Kerala Diet and Covid

See discussions, stats, and author profiles for this publication at: https://www.researchgate.
net/publication/342988627
Endemic Covid 19 Resistance State in Kerala and its Relationship with the
Peninsular Keto Diet of Coconut Oil and Dietary Fibre - The Basis of the Kerala
Syndromic Model of High As...
Book · July 2020
CITATIONS READS
0 7
2 authors, including:
Ravikumar Kurup
Metabolic Disorders Research Centre, Trivandrum
575 PUBLICATIONS 1,073 CITATIONS
SEE PROFILE
Some of the authors of this publication are also working on these related projects:
Project Symbiosis View project
Neurophilosophy and Consciousness View project
All content following this page was uploaded by Ravikumar Kurup on 16 July 2020.
The user has requested enhancement of the downloaded file.

! " #$ !

% & !
&

!"#$

%
" !
&

' &
(
)*!
&
"
"*)+,-!

.$ /

/
. 0,0, %
" !
&

' & (
(1'(0,&&29,'5(6,67$1&(67$7(,1.(5$/$$1',76
5(/$7,216+,3:,7+7+(3(1,168/$5.(72',(72)
&2&21872,/$1'',(7$5<),%5(±7+(%$6,62)7+(
.(5$/$6<1'520,&02'(/2)+,*+$6<03720$7,&
326,7,9(1250$/3(56216/2:5$7(2)&29,'
6<03720$7,&',6($6($1'/2:(675$7(2)&29,'
0257$/,7<',6($6(
5DYLNXPDU.XUXS$DQG3DUDPHVZDUD$FKXWKD.XUXS
7KH0HWDEROLF'LVRUGHUV5HVHDUFK&HQWUH
7&*RXUL6DGDQ.DWWX5RDG
1RUWKRI&OLII+RXVH.RZGLDU32
7ULYDQGUXP.HUDOD,QGLD
(PDLOUDYLNXUXS#\DKRRLQ

&217(176
(QGHPLF&RYLG5HVLVWDQFH6WDWH,Q.HUDOD$QG,WV5HODWLRQVKLS:LWK7KH
3HQLQVXODU.HWR'LHW2I&RFRQXW2LO$QG'LHWDU\)LEUH±7KH%DVLV2I7KH.HUDOD
6\QGURPLF0RGHO2I+LJK$V\PSWRPDWLF3RVLWLYH1RUPDO3HUVRQV/RZ5DWH2I
&RYLG6\PSWRPDWLF'LVHDVH$QG/RZHVW5DWH2I&RYLG0RUWDOLW\'LVHDVH
+XPDQ(QGRV\PELRWLF$UFKDHDO$QG3RUSK\ULQ0HGLDWHG&RYLG2ULJLQ
5HVLVWDQFH7R&RYLG'LVHDVH6WDWH±$UFKDHDO6\PELRVLV$QG0HWDEROLF
(QJLQHHULQJ7R0RGXODWH&RYLG'LVHDVH6WDWH
&OLPDWH&KDQJH$QG&DWDVWURSKLF3DQGHPLFV± $+XPDQ2ULJLQ)RU(PHUJLQJ
9LUXVHV$QG&RYLG
&DWDVWURSKLF9LUDO3DQGHPLFV$V$&RQWLQXLQJ(YROXWLRQDU\&UR0DJQRQ+RPR
6DSLHQ±1HDQGHUWKDO&RQIOLFW
(QGRV\PELRWLF$UFKDHDO51$9LURLGV$QG(PHUJLQJ9LUDO3DQGHPLFV
$UFKDHDO'LJR[LQ$UFKDHDO9LURLGV(PHUJLQJ9LUDO3DQGHPLFV+RPR
1HDQGHUWKDOLV9LUXV6HFUHWLRQ$QG+RPR6DSLHQ([WLQFWLRQ
&OLPDWH&KDQJH3RUSK\ULQRJHQHVLV$QG$ELRJHQHWLF5HSOLFDWLRQ2I9LUXVHV3ULRQV
$QG$UFKDHD±&OLPDWH&KDQJH5HODWHG0HWDEROLF(YROXWLRQ$QG$ELRJHQHVLV
&OLPDWH&KDQJH$QG+XPDQ6SHFLHV+RPR1HDQGHUWKDOLV+RPR6DSLHQV+RPR
6DSLHQ([WLQFWXV$QG+RPR1HRQHDQGHUWKDOLV&OLPDWH&KDQJH$QG(YROXWLRQ2I1HZ
6SHFLHV2UJDQHOOH
*OREDO:DUPLQJ(QGRV\PELRWLF$UFKDHDO5QD9LURLGV$QG(PHUJLQJ9LUDO
3DQGHPLFV±(DUWK$GDSWDWLRQ6\QGURPH6SHFLHV&KDQJH$QG5HYHUVDO2I*OREDO
:DUPLQJ
([WUDWHUUHVWULDO,QWHOOLJHQFH$V$6XSHURUJDQLVP&RQWUROOLQJ$QG&UHDWLQJ7KH
8QLYHUVH±3DQGHPLFV$QG7KH([WUDWHUUHVWULDO,QWHOOLJHQW%LRORJLFDO4XDQWDO
&RPSXWLQJ&ORXG
+RPR*DODFWLFXV+RPR5RERWLFXV$QG+XPDQ([WLQFWLRQ
([WUDWHUUHVWULDO+XPDQ(QJLQHHULQJ9LD$UFKDHDO6\PELRVLV
7KH3RUSK\ULRQV$QG7KH4XDQWDO&LYLOL]DWLRQ
7KH3RUSK\ULRQV2ULJLQ2I/LIH,Q%LRORJLFDO8QLYHUVH$QG(YROXWLRQ5HJXODWLRQ
2I7KH+XPDQ6\VWHP
3RUSK\ULQ$QG3RO\F\FOLF$URPDWLF+\GURFDUERQ7HPSODWHV0HGLDWH(QGRV\PELRWLF
$UFKDHDO9LURLGDO$QG3ULRQ5HSOLFDWLRQ3RUSK\ULRQV$QG$ELRJHQHVLV
$UFKDHDO'LJR[LQ$UFKDHDO9LURLGV(PHUJLQJ9LUDO3DQGHPLFV+RPR
1HDQGHUWKDOLV9LUXV6HFUHWLRQ$QG+RPR6DSLHQ([WLQFWLRQ
(QGRV\PELRWLF$UFKDHDO*HQHUDWHG51$9LURLGV&DQ5HJXODWH&HOO)XQFWLRQ$QG
&RQWULEXWH7R'LVHDVH6WDWH±5ROH,Q9LUDO6SHFLDWLRQ
6\PELRVLV$QG(YROXWLRQ2I+XPDQ6SHFLHV+RPR6DSLHQV$QG+RPR
1HDQGHUWKDOLV
$1HZ+XPDQ6SHFLHV&OLPDWH&KDQJH*OREDO:DUPLQJ$QG1HRQHDQGHUWKDOV
7KH$JH2I+RPR1HRQHDQGHUWKDOLV
$1HZ+XPDQ6SHFLHV&OLPDWH&KDQJH*OREDO:DUPLQJ$QG1HRQHDQGHUWKDOV
7KH$JH2I+RPR1HRQHDQGHUWKDOLV
&OLPDWH&KDQJH$QG%UDLQ0LQG&KDQJH1HRQHDQGHUWKDO+\EULGV$QG
(QGRV\PELRWLF$FWLQLGLF$UFKDHD
7KH(QG2I0HGLFLQH$QG7KH(DUWK'LHWDU\)LEUH+XPDQ'UXJV6XSHUEXJV
(PHUJLQJ9LUXVHV'LVHDVH3KHQRW\SH&OLPDWH&KDQJH$QG(QGRV\PELRWLF$UFKDHD
7KH+XPDQ(QGRV\PELRWLF$UFKDHDO51$9LURLG4XDVL6SHFLHV&RQVRUWLD1HZ
9LUXVHV$QG6RFLR(FRQRPLF3ROLWLFDO+LVWRU\
&OLPDWH&KDQJH$UFKDHDO(QGRV\PELRVLV$QG(PHUJLQJ9LUXVHV7KH3RVW&RURQD
9LUXV:RUOG$QG6RFLHW\
7KH'LHWDU\)LEUH6SHFLHV(YROXWLRQ$QG1HXUR,PPXQR*HQRPLF(QGRFULQH
,QWHJUDWLRQ±'LHWDU\)LEUH$QG$UFKDHDO6\PELRVLV
(QGRV\PELRWLF3DWKRJHQLF$UFKDHD$QG$UFKDHDO'HULYHG5QD9LURLGV,QGXFHG
(YROXWLRQDU\6SHFLHV&KDQJH,Q+XPDQV,QWHUFRQYHUVLRQ2I+RPR6DSLHQV$QG
+RPR1HDQGHUWKDOLV±0HWKRG)RU$UFKDHDO6\PELRVLV0RGXODWHG+XPDQ(YROXWLRQ
)RU7KHUDSHXWLF3XUSRVH±$UFKDHDO6\PELRVLV$QG5HVLVWDQFH7R(PHUJLQJ9LUDO
,QIHFWLRQ/LNH&RYLG
6\PELRWLF0HGLFLQH$QG6\PELRWLF'LVHDVH±0RGXODWLRQ2I$UFKDHDO6\PELRVLV
7KH7ULGRVKD6WDWHV$QG$UFKDHDO6\PELRVLV+RPR1HDQGHUWKDOLV+RPR6DSLHQV
+RPR6DSLHQ([WLQFWXV$QG+RPR1HRQHDQGHUWKDOLV
7KH(QGRV\PELRWLF$UFKDHD$QG'LHWDU\)LEUH
,QWHJUDWLRQ±7KH+RORELRQW$QG+RORJHQRPH±1XWULELRQW0RGXODWLRQ±
0RGXODWLRQ2I$UFKDHDO6\PELRVLV
(QGRV\PELRWLF$UFKDHDO51$9LURLGV$QG(PHUJLQJ9LUDO3DQGHPLFV
7KH+XPDQ(QGRV\PELRWLF$UFKDHDO51$9LURLG4XDVL6SHFLHV&RQVRUWLD1HZ
9LUXVHV$QG6RFLR(FRQRPLF3ROLWLFDO+LVWRU\
,QWHJUDWLRQ
&OLPDWH&KDQJH$QG(SLGHPLFV7KH2ULJLQ2I5HWURYLUDO5HVLVWDQFH$QG(PHUJLQJ
9LUDO3DQGHPLFV±7KH&URVVLQJ2I6SHFLHV%DUULHU$QG1HZ9LUXVHV
(QGRV\PELRWLF$UFKDHDO*HQHUDWHG51$9LURLGV&DQ5HJXODWH&HOO)XQFWLRQ$QG
&RQWULEXWH7R'LVHDVH6WDWH±5ROH,Q9LUDO6SHFLDWLRQ
(QGRV\PELRWLF$UFKDHDO51$9LURLGV3ULRQ'LVHDVH$QG$P\ORLGRVLV
(QGRV\PELRWLF$UFKDHD$QG+XPDQ6SHFLHV+RPR1HDQGHUWKDOLV+RPR6DSLHQV
+RPR6DSLHQ([WLQFWXV$QG+RPR1HRQHDQGHUWKDOLV&OLPDWH&KDQJH$QG(YROXWLRQ
2I1HZ6SHFLHV
51$9LURLGV$QG(YROXWLRQ2I9LUXVHV3URNDU\RWHV(XNDU\RWHV3ULPDWHV$QG
+XPDQV
51$9LURLGDO&ORXGLQ7KH,QWHUVWHOODU6SDFH$QG+XPDQ(YROXWLRQ
7KH(QGRV\PELRWLF$UFKDHD)UXFWRVH'LVHDVH$QG*OREDO:DUPLQJ5HODWLRQ7R
5HWURYLUDO$QG3ULRQ'LVHDVHV
$&KROHVWHURO$QG$FWLQLGH'HSHQGHQW6KDGRZ%LRVSKHUH2I$UFKDHD$QG9LURLGV
,Q5HWURYLUDO$QG3ULRQ'LVHDVH±/RZ$UFKDHDO'HQVLW\&RQWULEXWH7R+RPR
6DSLHQ6SHFLHV$QG5HWURYLUDO$QG3ULRQ'LVHDVH
(QGRV\PELRWLF$UFKDHDO'LJR[LQ$QG$FTXLUHG,PPXQRGHILFLHQF\6\QGURPH
(QGRV\PELRWLF3DWKRJHQLF$UFKDHD$QG$UFKDHDO'HULYHG5QD9LURLGV,QGXFHG
(YROXWLRQDU\6SHFLHV&KDQJH,Q+XPDQV,QWHUFRQYHUVLRQ2I+RPR6DSLHQV$QG
+RPR1HDQGHUWKDOLV±0HWKRG)RU$UFKDHDO6\PELRVLV0RGXODWHG+XPDQ(YROXWLRQ
)RU7KHUDSHXWLF3XUSRVH
&+$37(5
(1'(0,&&29,'5(6,67$1&(67$7(,1.(5$/$$1',76
5(/$7,216+,3:,7+7+(3(1,168/$5.(72',(72)&2&21872,/$1'
',(7$5<),%5(±7+(%$6,62)7+(.(5$/$6<1'520,&02'(/2)
+,*+$6<03720$7,&326,7,9(1250$/3(56216/2:5$7(2)&29,'
6<03720$7,&',6($6($1'/2:(675$7(2)&29,'0257$/,7<
',6($6(

7KH GLHW LQ .HUDOD FDQ EH GHVFULEHG DV D SHQLQVXODU NHWRGLHW ULFK LQ FRFRQXW DQG
PHGLXP FKDLQ WULJO\FHULGHV DQG GLHWDU\ ILEUH SURGXFLQJ VKRUW FKDLQ IDWW\ DFLGV OLNH EXW\ULF
DFLGDQGSURSLRQLFGLJHVWLRQ7KHFRFRQXWRLOFRQVXPSWLRQFRPHVWRJSHUGD\DQGVROLG
FRFRQXWPHDQJSHUGD\7KHPHGLXPFKDLQWULJO\FHULGHVFDQPRGXODWHVWKHOLSLGUDIWVLQ
WKH HQGRWKHOLDO PHPEUDQHV DQG PXFXV PHPEUDQHV LQKLELWLQJ WKH &RYLG HQWU\ LQWR WKH FHOO
7KHPHGLXPFKDLQWULJO\FHULGHVDOVRGHVWUR\WKHOLSLGHQYHORSHRIWKHFRURQDOLNHYLUXVHVDQG
+,9 DQG LQDFWLYDWH WKHP 7KH PHGLXP FKDLQ WULJO\FHULGHV KDYH DQ DQWLYLUDO DFWLYLW\
HVSHFLDOO\FRYLGDFWLYLW\DQGLQDFWLYDWHVWKHFRYLGYLUXVSURGXFLQJDQDWWHQXDWHGIRUP
KDUGO\VWURQJHQRXJKWRSURGXFHWKHGHVHDVHVWDWH7KHVKRUWFKDLQIDWW\DFLGVGHULYHGIURP
GLHWDU\ILEUHKDYHDYLURFLGDOHIIHFWDQGFDQDOVRPRGXODWHWKHOLSLGUDIWVWKURXJKZKLFKWKH
YLUXV HQWHUV WKH FHOO DV ZHOO DV WKH GLVUXSW WKH LQWHJULW\ RI HQYHORSH YLUXVHV OLNH FRYLG
0DFURSKDJHV PDLQWDLQ JXW KRPHRVWDVLV E\ HOLPLQDWLQJ LQYDVLYH SDWKRJHQV DQG UHJXODWLQJ
LQIODPPDWRU\ UHVSRQVHV %XW\UDWH D EDFWHULDO IHUPHQWDWLRQ SURGXFW LPSULQWV SRWHQW
DQWLPLFURELDO DFWLYLW\ GXULQJ PDFURSKDJH GLIIHUHQWLDWLRQ WKURXJK +'$&L IXQFWLRQ 7KH
PHGLXP FKDLQ WULJO\FHULGHV KDYH JRW DQWLLQIODPPDWRU\ HIIHFW DQG VXSSUHVV WKH F\WRNLQH
VWRUP GDPDJLQJ PXOWLSOH RUJDQ V\VWHPV LQ WKH FRYLG VWDJH 7KH PHGLXP FKDLQ
WULJO\FHULGHVRIFRFRQXWRLOKDYHDQWLFRDJXODWLQJHIIHFWDQGKHOSWRVXSSUHVVWKHFRDJXODWLRQ
VWRUP LQ WKH FRYLG VWDWH 7KH FRFRQXW RLO PHGLXP FKDLQ WULJO\FHULGHV FDQ XQGHUJR
PLWRFKRQGULDOR[LGDWLYHSKRVSKU\ODWLRQDQGGRHVQRWQHHWFDUQLWLQWRHQWHUWKHPLWRFKRQGULD
7KH.HUDOLWHVDOVRFRQVXPHQHDUO\JRIILEUHSHUGD\7KHGLHWDU\ILEUHLQWDNHLQ.HUDOD
IURP SXOVHV DQG YHJHWDEOHV LV YHU\ KLJK 7KH GLHWDU\ ILEUH XQGHUJRHV FRORQLF GLJHVWLRQ WR
VKRUW FKDLQ IDWW\ DFLGV EXW\UDWH DQG SURSLRQLF DFLG 7KH VKRUW FKDLQ IDWW\ DFLG XQGHUJR
PLWRFKRQGULDOEHWDR[LGDWLRQDQGGRHVQRWQHHGFDUWLQLWLQWRHQWHUWKHPLWRFKRQGULD7KHVKRUW
FKDLQ IDWW\ DFLGV DQG PHGLXP FKDLQ WULJO\FHULGHV WKURXJK WKH LQFUHDVHG PLWRFKRQGULDO
ELRJHQHVLV DQG PHWDEROLVP 6HXQJPLQ <X HW DO 0HGLXP FKDLQ WULJO\FHULGH 0&7 RLO KDV
EHHQSRVWXODWHGWRPRGXODWHLQIODPPDWRU\UHVSRQVHVEXWWKHGHWDLOHGPHFKDQLVPVKDYHQRW

EHHQ IXOO\ HOXFLGDWHG %DVHG RQ UHFHQW VWXGLHV GHPRQVWUDWLQJ WKDW PLWRFKRQGULDO PHWDEROLF
UHSURJUDPPLQJDQGLPPXQHUHVSRQVHVDUHFRUUHODWHGWKHFXUUHQWVWXG\VRXJKWWRGHWHUPLQH
ZKHWKHU0&7RLOFRQWUROVLQIODPPDWRU\UHVSRQVHVWKURXJKPRGXODWLRQRIPLWRFKRQGULDXVLQJ
ERWK LQ YLWUR DQG LQ YLYR PRGHOV 7KH PLWRFKRQGULDO PHWDEROLF SKHQRW\SHV RI PDFURSKDJHV
ZHUH DVVHVVHG DFFRUGLQJ WR R[\JHQ FRQVXPSWLRQ UDWH 2&5 ,QIODPPDWRU\ UHVSRQVHV ZHUH
DVVHVVHGIRUSURGXFWLRQRIF\WRNLQHVDQGH[SUHVVLRQRIDFWLYDWLRQPDUNHUV0&7RLOZDVPRUH
UDSLGO\ R[LGL]HG DV REVHUYHG E\ LQFUHDVHG 2&5 LQ PDFURSKDJHV 7KH SURGXFWLRQ RI SUR
LQIODPPDWRU\F\WRNLQHVZDVGRZQUHJXODWHGDQGDQWLLQIODPPDWRU\F\WRNLQHZDVHOHYDWHGE\
0&7RLO,QDGGLWLRQFODVVLFDOO\DFWLYDWHG0DQGDOWHUQDWLYHO\DFWLYDWHG0PDUNHUVZHUH
UHFLSURFDOO\ UHJXODWHG E\ 0&7 LQWHUYHQWLRQ 2YHUDOO XSUHJXODWHG ȕR[LGDWLRQ E\ 0&7
FRQWULEXWHV WR WKH DQWLLQIODPPDWRU\ 0OLNH VWDWXV RI PDFURSKDJHV ZKLFK PD\ DLG LQ WKH
GLHWDU\ SUHYHQWLRQ DQGRU DPHOLRUDWLRQ RI LQIODPPDWLRQ 7KH LQFUHDVH LQ PLWRFKRQGULDO
IXQFWLRQ EURXJKW E\ GLHWDU\ ILEUH UHODWHG VKRUW FKDLQ IDWW\ DFLGV DQG PHGLXP FKDLQ
WULJO\FHULGHV KHOSHG WR UHGXFH IUHH UDGLFDO JHQHUDWLRQ DQG PDNHV WKH PHGLFXP FKDLQ
WULJO\FHULGHV DQ DQWLR[LGDQW 7KLV UHVXOWV LQ UHGXFH JHQHUDWLRQ RI IUHH UDGLFDOV ZKLFK DFW DV
PHVVHQJHUVIRUWKHFRYLGYLUXVLQFRQWUROOLQJFHOOIXQFWLRQDQGWDNLQJRYHUWKHFHOO7KH
YLUDOFDSDFLW\LQWHJUDWHWKHFHOOIXQFWLRQWRLWVRZQSXUSRVHXVLQJIUHHUDGLFDOVFDYHQJHUVLV
EORFNHGE\GLHWDU\ILEUHUHODWHGVKRUWFKDLQIDWW\DFLGVDQGFRFRQXWRLOUHODWHGPHGLXPFKDLQ
WULJO\FHULGHV LPSURYLQJ PLWRFKRQGULDO IXQFWLRQ 7KH VKRUW FKDLQ IDWW\ DFLGV ELQGLQJ WR *
SURWHLQ FRXSOHG UHFHSWRU DQG PHGLXP FKDLQ WULJO\FHULGHV KDYH DQ DQWLLQIODPPDWRU\ HIIHFW
EORFNLQJ WKH F\WRNLQH VWRUP ZKLFK SURGXFHV WLVVXH LQMXU\ LQ WKH FRYLG VWDWH 7KXV WKH
SHQLQVXODUNHWRGLHWZLWKRYHUJRIGLHWDU\ILEUHDQGJRIPHGLXPFKDLQWULJO\FHULGHV
DQGVKRUWFKDLQIDWW\DFLGVDVDEORFNDGHHIIHFWXSRQWKHF\WRNLQHVWRUPSURGXFHGE\FRYLG
WKH FRDJXODWLRQ VWRUP DQG PLFURWKURPERVLV SURGXFHG E\ WKH FRYLG YLUXV DV ZHOO DV
GLVLQWHJUDWH WKH OLSLG HQYHORSHG FRYLG YLUXV VWUXFWXUH LQDFWLYDWLQJ WKH YLUXV DQG LQWHUIHUH
ZLWKWKHELQGLQJRIWKHOLSLGHQYHORSFRYLGYLUXVWRWKHOLSLGUDIWVLQFHOOPHPEUDQH7KXV
SRSXODWLRQ FRQVXPLQJ D SHQLQVXODU NHWR GLHW ZLWK KLJK DPRXQWV RI PHGLXP FKDLQ
WULJO\FHULGHV DQG J RI GLHWDU\ ILEUH SURGXFLQJ VKRUW FKDLQ IDWW\ DFLGV DUH UHVLVWDQW WR WKH
FRYLGVWDWH7KHFRYLGYLUXVLVDWWHQXDWHGDQGOHIWLQHIIHFWLYHDQGFDQQRWHQWHUWKHFHOO
WKURXJKWKHOLSLGUDIWV7KHYLUXVDVVXFKLVDWWHQXDWHGRUNLOOHGRUFLUFXODWHVDVDLQHIIHFWLYH
VWUXFWXUH7KHDQWLFRDJXODQWDQGDQWLLQIODPPDWRU\DFWLRQRIWKHSHQLQVXODUNHWRGLHWZLWKKLJK
FRQWHQWRIPHGLXPFKDLQWULJO\FHULGHVDQGVKRUWFKDLQIDWW\DFLGVGHULYHGIURPGLHWDU\ILEUH
SUHYHQWWKHFRYLGSDWKRORJ\RIWKHF\WRNLQHVWRUPWKHFRDJXODWLRQVWRUPDQGV\PSDWKHWLF
VWRUP IURP GHVWUR\LQJ WKH KXPDQ WLVVXH V\VWHPV 7KH FRYLG YLUXV FDQ HQWHU WKH KXPDQ

V\VWHP EXW LV LQDFWLYDWHG DQG LV LQHIIHFWXDO SURGXFLQJ DV\PSWRPDWLF FRYLG VWDWH 7KLV
DV\PSWRPDWLFFRYLGVWDWHFDQNHHSRQVHFUHWLQJWKHLQHIIHFWLYHYLUXVIRUPRQWKVZLWKRXW
SURGXFLQJDQ\GLVHDVHLQWKHKRVW7KLVLVH[HPSOLILHGIURPWKHUHSRUWVRISDWLHQWVWDWLVWLFVLQ
0HGLFDO &ROOHJH 7ULYDQGUXP .HUDOD 2I WKH RYHU DV\PSWRPDWLF SRVLWLYHV DGPLWWHG IRU
TXDUHQWLQLQJLQ0HGLFDO&ROOHJH+RVSLWDORQO\EHFDPHV\PSWRPDWLFDQGGLHG7KLVFRXOG
EHRQHRIWKHORZHVWPRUWDOLW\DQGGLVHDVHUDWHVLQWKHZRUOG7KH+HDOWKLQIUDVWUXFWXUHLQWKH
VWDWHRI.HUDODLVFRPSDUDEOHZLWKWKHVRXWKHUQVWDWHVEXWWKHPRUWDOLW\UDWHVDQGGLVHDVHUDWHV
DUH IDU KLJKHU 7KHUHIRUH LW ZRUNV RXW WKDW H[WUDQHRXV IDFWRUV PDNH FRQWULEXWH WR WKH ODUJH
QXPEHURIDV\PSWRPDWLFSRVLWLYHVWKHIHZQXPEHUVRIIORULGFRYLGGLVHDVHDQGWKHIHZHU
VWLOO PRUWDOLW\ YLFWLPV 7KH SHQLQVXODU NHWR GLHW RI KLJK PHGLXP FKDLQ WULJO\FHULGHV IURP
FRFRQXWRLODQGKLJKVKRUWFKDLQIDWW\DFLGVIURPGLHWDU\ILEUHLVUHVSRQVLEOHIRUWKH.HUDOD
V\QGURPLF PRGHO RI KLJK DV\PSWRPDWLF SRVLWLYH QRUPDO SHUVRQV ORZ FRYLG
V\PSWRPDWLFGLVHDVHDQGIHZHUVWLOOFRYLGPRUWDOLW\GLVHDVH7KLVSDUDGR[LFDOVLWXDWLRQ
FDQ EH REVHUYHG LQ FRXQWULHV WDNLQJ D KLJK SHQLQVXODU NHWR GLHW EDVHG RQ GLHWDU\ ILEUH DQG
FRFRQXWRLODVLQ3KLOLSSLQHV6ULODQNDDQG0DOD\VLD7KH.HUDODV\QGURPLFPRGHORIKLJK
DV\PSWRPDWLFSRVLWLYHQRUPDOSHUVRQVORZFRYLGV\PSWRPDWLFGLVHDVHDQGIHZHUVWLOO
FRYLGPRUWDOLW\GLVHDVHLVDQDWXUDOH[WHQVLRQRIWKHOLIHVW\OHDQGQXWULWLRQDOKDELWVRI
.HUDOLWHV 7KH KHDOWK LQIUDVWUXFWXUH VRFLDO VWUXFWXUH DQG HGXFDWLRQDO VWDWXV LQ RWKHU
SDUWVRIWKHZRUOGHVSHFLDOO\WKHZHVWHUQZRUOGDUHFRPSDUDEOHWR.HUDODDQGKHQFHWKH
.HUDOD V\QGURPLF PRGHO RI KLJK DV\PSWRPDWLF SRVLWLYH QRUPDO SHUVRQV ORZ FRYLG
V\PSWRPDWLFGLVHDVHDQGIHZHUVWLOOFRYLGPRUWDOLW\GLVHDVHLVDUHVXOWRIWKHKLVWRULF
QDWXUDOQXWULWLRQDOHQYLURQPHQWLQ.HUDOD
7KH SHQLQVXODU NHWR GLHW RI KLJK PHGLXP FKDLQ WULJO\FHULGHV DQG KLJK ILEUH UHODWHG
VKRUW FKDLQ IDWW\ DFLGV KDYLQJ WKH YLURFLGDO LPPXQRPRGXODWRU\ DQWLFRDJXODQW HIIHFW RQ
FRYLG VWDWH LV RI JUHDW WKHUDSHXWLF LPSRUWDQFH ,QWUDYHQRXV OLSLG LQIXVLRQV RI VKRUW FKDLQ
IDWW\DFLGDQGPHGLXPFKDLQWULJO\FHULGHFDQNLOOWKHFRYLGYLUXVDQGFXUHWKHGLVHDVHVWDWH
7KH WUHDWPHQW ZLWK LQWUDYHQRXV VKRUW FKDLQ IDWW\ DFLGV DQG PHGLXP FKDLQ WULJO\FHULGHV
LQIXVLRQVLVVLPSOHORJLFDODQGHIIHFWLYHDVDOVRFKHDS
&RFRQXWPHDWFRQWDLQVDERXWFRFRQXWRLO&RFRQXWRLOLVDXQLTXHYHJHWDEOHRLO
LQ WKDW LW KDV D KLJK SURSRUWLRQ RI ODXULF DFLG QR RWKHU ZLGHO\ FRQVXPHG YHJHWDEOH RLO KDV
WKLV³:KHQLQJHVWHGLQWRWKHERG\WKHERG\¶VOLSDVHHQ]\PHVUHOHDVHPHWDEROLWHVZKLFKDUH
WKHDFWLYHFRPSRXQGV²PDLQO\PRQRODXULQDQGODXULFDFLG0RQRODXULQLVXVHGE\WKHIRRG

LQGXVWU\ DV DQ HPXOVLILHU DQG QDWXUDO SUHVHUYDWLYH DJDLQVW EDFWHULD DQG LV DOVR WKH DFWLYH
LQJUHGLHQWLQPDQ\GHUPDWRORJLFDOSUHSDUDWLRQV'D\ULWVD\V7RJHWKHUPRQRODXULQDQGODXULF
DFLG KDYH WKH SK\VLFRFKHPLFDO SURSHUW\ RI EHLQJ DEOH WR GHVWUR\ WKH PHPEUDQH RI OLSLG
FRDWHG YLUXVHV 7KH DQWLYLUDO DFWLYLWLHV RI ODXULF DFLG DQG PRQRODXULQ ZHUH ILUVW QRWHG LQ
D VWXG\DQG ODWHU LQ %HFDXVH WKH YLUXV WKDW FDXVHV FRYLG 6$56&R9 LV D
OLSLGFRDWHG YLUXV FRFRQXW RLO VHHPV SURPLVLQJ 7KH DPRXQW RI ODXULF DFLG IRXQG LQ 9&2
UDQJHVIURPWRRIWRWDOIDWW\DFLGVGHSHQGLQJRQWKHDJHYDULHW\DQGORFDWLRQRIWKH
FRFRQXW%HFDXVH&92LVUHDGLO\DYDLODEOHDQGQRWR[LFLW\KDVEHHQREVHUYHGLQVHYHUDODFXWH
GRVH VWXGLHV LW FRXOG EH HDV\ IRU SDWLHQWV WR DFFHVV 7KHUH LV VRPH VLPLODULW\ KHUH ZLWK WKH
$,'6 HSLGHPLF ZKHQ SHRSOH MXVW LJQRUHG WKH UXOHV DQG H[SHULPHQWHG RQ WKHPVHOYHV DQG
FODLPHGDFXUH
+LJK FRQWHQW RI ODXULF FDSU\OLF DQG FDSULF FRPSRQHQWV LQ FRFRQXW RLO ILQGV LWV
UHOHYDQFH LQ WKHLU HIIHFWLYHQHVV DJDLQVW D ODUJH VSHFWUXP RI EDFWHULD DQG IXQJL 7KLV KLJK
DQWLPLFURELDO DFWLYLW\ LV DOO WKH PRUH VLJQLILFDQW DW D VWDJH ZKHQ ZH DUH H[SHULHQFLQJ KLJK
DQWLELRWLF UHVLVWDQFH 6WXGLHV E\ UHVHDUFKHUV KDYH DOVR SURYHG HIIHFWLYHQHVV DJDLQVW DFQH
DWRSLF FRQWDFW GHUPDWLWLV DQG URVDFHD OHVLRQV SVRULDVLV DQG LWV FRPRUELGLWLHV 'U 5RZHOO
IURP 3KLOLSSLQHV $QWLYLUDO DFWLRQ 6WXGLHV KDYHUHYHDOHG WKDW YLUJLQ FRFRQXW RLO LV IRXQG WR
KDYHDSRVLWLYHYLUDODFWLRQZKLFKLVEHQHILFLDODJDLQVW+,9$,'6VLQFHLWLVIRXQGWRUHGXFH
YLUDOORDGDQGLQFUHDVHWKH&'FRXQWV7KHDQWLYLUDOSURSHUWLHVPD\DOVRILQGDSSOLFDWLRQVLQ
OLSLG FRDWHG YLUXVHV OLNH KHUSHV F\WRPHJDORYLUXV HWF &RFRQXW RLO ERRVWV LPPXQH V\VWHP
/DXULF DFLG KDV LPPXQHERRVWLQJ SURSHUWLHV DV HYLGHQFHG E\ IHHGLQJ FRFRQXW RLO WR
ODERUDWRU\ DQLPDOV LQKLELWLRQ RI LQWHUOHXNLQ %RWK FRFRQXW RLO DQG PRQRODXULQ ZHUH
HIIHFWLYH LQ VLJQLILFDQWO\ ORZHULQJ WKH YLUDO ORDG IRU VHYHUDO SDWLHQWV 7KH PLFURELDO NLOOLQJ
DELOLW\ RI PRQRODXULQ KDV EHHQ HVWDEOLVKHG &RFRQXW RLO KDV EHHQ IRXQG WR LQKLELW *UDP
SRVLWLYH EDFWHULD VXFK DV 6WUHSWRFRFFXV 6WDSK\ORFRFFXV &RU\QHEDFWHULXP /LVWHULD DQG
&ORVWULGLXP 7KH HIIHFW RI IHHGLQJ UDWV ZLWK ILVK RLO RU FRFRQXW RLO GLHWV ZDV VWXGLHG
6\QWKHWLFGLHWVFRQWDLQLQJZYILVKRLORUFRFRQXWRLOZHUHXVHG7KHILVKRLOFRQWDLQLQJ
GLHWSURGXFHGVLJQLILFDQWLQFUHDVHLQOLSLGSHUR[LGDWLRQSURGXFWV%XWFRFRQXWRLOZDVIRXQG
WR KDYH DQWLR[LGDQWV 7KH YLUJLQ FRFRQXW RLO 9&2 KDG WKH VWURQJHVW VFDYHQJLQJ HIIHFW RQ
GLSKHQ\OSLFU\OK\GUD]\O DQG WKH KLJKHVW DQWLR[LGDQW DFWLYLW\ EDVHG RQ WKH EHWD
FDURWHQHOLQROHDWH EOHDFKLQJ PHWKRG 7KH DQWLVWUHVV HIIHFW RI 9&2 GRVH RI PONJ ERG\
ZHLJKWZDVHYDOXDWHG9&2ZDVDEOHWRUHGXFHLPPRELOLW\WLPHDQGUHVWRUHR[LGDWLYHVWUHVV
LQ PLFH SRVWVZLP WHVW )XUWKHUPRUH PLFH WUHDWHG ZLWK 9&2 ZHUH IRXQG WR H[KLELW KLJKHU

OHYHOVRIEUDLQDQWLR[LGDQWVORZHUOHYHOVRIEUDLQK\GUR[\WU\SWDPLQHDQGUHGXFHGZHLJKWRI
WKH DGUHQDO JODQGV &RQVHTXHQWO\ WKH VHUXP FKROHVWHURO WULJO\FHULGH JOXFRVH DQG
FRUWLFRVWHURQH OHYHOV ZHUH DOVR ORZHU LQ 9&2WUHDWHG PLFH &RFRQXW RLO HQKDQFHG WLVVXH
XSWDNH RI WRPDWR FDURWHQRLGV WR D JUHDWHU GHJUHH WKDQ VDIIORZHU RLO ,QFUHDVHG DFWLYLWLHV RI
FDWDODVHVXSHUR[LGHGLVPXWDVHJOXWDWKLRQHSHUR[LGDVHDQGJOXWDWKLRQHUHGXFWDVHLQWKHOLYHU
KHDUW DQG NLGQH\V ZHUH LQFUHDVHG E\ 9&2 FRQVXPSWLRQ +,9$,'6 LV D JOREDO FULVLV
DIIHFWLQJ PDQ\ DVSHFWV RI OLIH +,9 PDLQO\ GHVWUR\V WKH LPPXQH V\VWHP FDXVLQJ GHFUHDVHG
TXDQWLW\ DQG TXDOLW\ RI O\PSKRF\WH 7FHOOV HVSHFLDOO\ &' 3URJUHVVLYHQHVV RI WKH GLVHDVH
ZLOOGHSHQGPDLQO\RQWKHKRVWLPPXQHUHVSRQVHZKLFKLVPHDVXUHGE\WKHDPRXQWRI&'LQ
WKH ERG\&' FRXQW 7KHUHIRUH &' FRXQW LV WKH EDVH RI +,9 LQIHFWLRQ FODVVLILFDWLRQ
&RFRQXW RLO KDV XQLTXH IHDWXUHV ZKHUH LW LV QRW RQO\ D VRXUFH RI PHGLXP FKDLQ IDWW\ DFLGV
ZKLFK DUH HDVLHU WR DEVRUE DQG XWLOLVH E\ FHOOV LW DOVR FRQWDLQV ODXULF DFLG DQG FDSULF DFLG
ZKLFKKDYHDQWLPLFURELDOHIIHFWV7KHVHVXEVWDQFHVFDQGHVWUR\EDFWHULDDQGYLUXVZKLFKKDYH
OLSLGOD\HURQWKHLUFHOOPHPEUDQH7KHH[SHULPHQWDOVWXG\FRQGXFWHGDWWKH6SHFLDO+HDOWK
&HQWUH'KDUPDLV&DQFHU+RVSLWDOLQ-DNDUWDVWXGLHGWKHHIIHFWVRI9&2VXSSOHPHQWDWLRQDW
;POGD\IRUZHHNVRQ+,9VXEMHFWV7KH&'7O\PSKRF\WHFRXQWZDVXVHGWR
LQGLFDWH+,9GLVHDVHSURJUHVVLRQEHFDXVH+,9ELQGWRWKLVUHFHSWRULQKXPDQERG\UHVXOWLQJ
LQ GHVWUXFWLRQ DQG GHFOLQH RI &' 7 O\PSKRF\WH FRXQW ,W ZDV IRXQG WKDW 9&2
VXSSOHPHQWDWLRQVLJQLILFDQWO\LQFUHDVHG&'7O\PSKRF\WHFRQFHQWUDWLRQLQ+,9SDWLHQWV
7KH9LUJLQ&RFRQXW2LODQG+,9DQWLYLUDODELOLW\RIWKHODXULFDQGFDSULFDFLGLQ9&2FRXOG
GHVWUXFWWKHOLSLGFDSVXOHOD\HURIYLUXVPRUHHIIHFWLYHO\WKDQORQJFKDLQIDWW\DFLGVOLNHROHLF
DQG OLQROHLF DFLGV 5HVXOWV RI D VWXG\ RQ FRFRQXW RLO LQ +HDOWK DQG GLVHDVH DQG LWV
PRQRODXULQ¶V SRWHQWLDO DV FXUH IRU +,9$,'6 UHYHDOHG WKDW ³ WKLV ILUVW FOLQLFDO WULDO RQ +,9
LQIHFWHGSDWLHQWVFRQILUPHGWKHDQHFGRWDOUHSRUWVWKDWFRFRQXWRLOKDVDQDQWLYLUDOHIIHFWDQG
FDQEHQHILFLDOO\UHGXFHWKHYLUDOORDGRI+,9SDWLHQWV7KHSRVLWLYHYLUDODFWLRQZDVVHHQQRW
RQO\ ZLWK PRQRODXULQ DFLG EXW ZLWK FRFRQXW RLO LWVHOI :HLJKW JDLQ GHFUHDVLQJ YLUDO FRXQWV
DQGLQFUHDVLQJ&'FRXQWVZHUHQRWLFHG
7KH DGGLWLRQ RIPHGLXPFKDLQWULJO\FHULGHVWR D SXULILHG ILVK RLOEDVHGGLHWDOWHUV

LQIODPPDWRU\ SURILOHV LQ PLFH 3DUHQWHUDO QXWULWLRQ DVVRFLDWHG OLYHU GLVHDVH 31$/' LV D
GHDGO\FRPSOLFDWLRQRIORQJWHUPSDUHQWHUDOQXWULWLRQ31XVHLQLQIDQWV)LVKRLOEDVHGOLSLG
HPXOVLRQKDVEHHQVKRZQLQUHFHQW\HDUVWRHIIHFWLYHO\WUHDW31$/'$OWHUQDWLYHIDWVRXUFHV
IUHH RI HVVHQWLDO IDWW\ DFLGV KDYH UHFHQWO\ EHHQ LQYHVWLJDWHG IRU KHDOWK EHQHILWV UHODWHG WR
GHFUHDVHG LQIODPPDWRU\ UHVSRQVH :H K\SRWKHVL]HG WKDW WKH DGGLWLRQ RIPHGLXP

FKDLQWULJO\FHULGHVWR D SXULILHG ILVK RLOEDVHGGLHWZRXOG GHFUHDVH WKH UHVSRQVH WR
LQIODPPDWRU\FKDOOHQJHLQPLFHZKLOHDOORZLQJIRUVXIILFLHQWJURZWKDQGGHYHORSPHQW6L[
JURXSVRIWHQDGXOWPDOH&%OPLFHZHUHSDLUIHGGLIIHUHQWGLHWDU\WUHDWPHQWVIRUDSHULRG
RIWZHOYHZHHNVYDU\LQJRQO\LQIDWVRXUFHSHUFHQWFDORULHVE\ZHLJKWVR\EHDQRLO
62< FRFRQXW RLO +&2 PHGLXPFKDLQWULJO\FHULGHV0&7 SXULILHG ILVK
RLO 3)2 SXULILHG ILVK RLO ZLWK PHGLXPFKDLQWULJO\FHULGHV 0&73)2 DQG
SXULILHG ILVK RLO ZLWK PHGLXPFKDLQWULJO\FHULGHV 0&73)2 $Q
HQGRWR[LQFKDOOHQJHZDVDGPLQLVWHUHGWRKDOIRIWKHDQLPDOVLQHDFKJURXSDWWKHFRPSOHWLRQ
RI GLHWDU\ WUHDWPHQW $OO JURXSV GHPRQVWUDWHG QRUPDO JURZWK WKURXJKRXW WKH VWXG\ SHULRG
*URXSV IHG 0&7 DQG +&2GLHWVGHPRQVWUDWHG ELRFKHPLFDO HVVHQWLDO IDWW\ DFLG GHILFLHQF\
DQGGHFUHDVHG,/DQG71)ÌUHVSRQVHWRHQGRWR[LQFKDOOHQJH*URXSVFRQWDLQLQJ3)2KDG
LQFUHDVHG LQIODPPDWRU\ UHVSRQVH WR HQGRWR[LQ FKDOOHQJH DQG WKH DGGLWLRQ RI 0&7 WR 3)2
PLWLJDWHGWKLVLQIODPPDWRU\UHVSRQVH7KHVHUHVXOWVVXJJHVWWKDWWKHDGGLWLRQRI0&7WR3)2
IRUPXODWLRQV PD\ GHFUHDVH WKH KRVW UHVSRQVH WR LQIODPPDWRU\ FKDOOHQJH ZKLFK PD\ SRVH
SRWHQWLDOIRURSWLPL]HG31IRUPXODWLRQV,QFOXVLRQRI0&7LQOLSLGHPXOVLRQVJLYHQZLWK31
IRUPXODWLRQV PD\ EH RI XVH LQ WKHUDSHXWLF LQWHUYHQWLRQV IRU GLVHDVH VWDWHV UHVXOWLQJ IURP
FKURQLF LQIODPPDWLRQ &RS\ULJKW Æ (OVHYLHU ,QF $OO ULJKWV UHVHUYHG *HQJ HW DO
VWXGLHG 0HGLXPFKDLQWULJO\FHULGHDPHOLRUDWHV LQVXOLQ UHVLVWDQFH DQG LQIODPPDWLRQ LQ KLJK
IDWGLHWLQGXFHG REHVH PLFH 7KH DLP RI WKH SUHVHQW VWXG\ ZDV WR LQYHVWLJDWH WKH LQ YLYR
HIIHFWVRIGLHWDU\PHGLXPFKDLQWULJO\FHULGH0&7RQLQIODPPDWLRQDQGLQVXOLQUHVLVWDQFHDV
ZHOODVWKHXQGHUO\LQJSRWHQWLDOPROHFXODUPHFKDQLVPVLQKLJKIDWGLHWLQGXFHGREHVHPLFH
0DOH &%/- PLFH Q ZHUH IHG RQH RI WKH IROORZLQJ WKUHHGLHWVIRU D SHULRG RI
ZHHNV D PRGLILHG $,1GLHWZLWK FRUQ RLO QRUPDOGLHW D KLJKIDW
FRQWUROGLHW ZZ ODUG DQG ZZ FRUQ RLO +)& DQ LVRFDORULF KLJK
IDWGLHWVXSSOHPHQWHGZLWK0&7ZZ0&7DQGZZFRUQRLO+)0&7*OXFRVH
PHWDEROLVP ZDV HYDOXDWHG E\ IDVWLQJ EORRG JOXFRVH OHYHOV DQG LQWUDSHULWRQHDO JOXFRVH
WROHUDQFHWHVW,QVXOLQVHQVLWLYLW\ZDVHYDOXDWHGE\IDVWLQJVHUXPLQVXOLQOHYHOVDQGWKHLQGH[
RIKRPHRVWDVLVPRGHODVVHVVPHQWLQVXOLQUHVLVWDQFH7KHOHYHOVRIVHUXPLQWHUOHXNLQ,/
LQWHUOHXNLQ ,/ DQG WXPRU QHFURVLV IDFWRUÌ ZHUH PHDVXUHG E\ (/,6$ DQG KHSDWLF
DFWLYDWLRQ RI QXFOHDU IDFWRU Ì% 1)Ì% DQG PLWRJHQDFWLYDWHG SURWHLQ NLQDVH 0$3.
SDWKZD\VZDVGHWHUPLQHGXVLQJZHVWHUQEORWDQDO\VLV&RPSDUHGWR+)&GLHWFRQVXPSWLRQ
RI+)0&7GLGQRWLQGXFHERG\ZHLJKWJDLQDQGZKLWHDGLSRVHWLVVXHDFFXPXODWLRQLQPLFH
+)&LQGXFHG LQFUHDVHV LQ VHUXP IDVWLQJ JOXFRVH DQG LQVXOLQ OHYHOV DV ZHOO DV JOXFRVH
LQWROHUDQFHZHUHSUHYHQWHGE\+)0&7GLHW0HDQZKLOH+)0&7UHVXOWHGLQVLJQLILFDQWO\

ORZHUVHUXP,/OHYHODQGKLJKHU,/OHYHODQGORZHUH[SUHVVLRQOHYHOVRILQGXFLEOHQLWULF
R[LGH V\QWKDVH DQG F\FORR[\JHQDVH SURWHLQ LQ OLYHU WLVVXHV ZKHQ FRPSDUHG WR +)& ,Q
DGGLWLRQ +)0&7 DWWHQXDWHG +)&WULJJHUHG KHSDWLF DFWLYDWLRQ RI 1)N% DQG S 0$3.
2XU VWXG\ GHPRQVWUDWHG WKDW 0&7 ZDV HIILFDFLRXV LQ VXSSUHVVLQJ ERG\ IDW DFFXPXODWLRQ
LQVXOLQ UHVLVWDQFH LQIODPPDWRU\ UHVSRQVH DQG 1)N% DQG S 0$3. DFWLYDWLRQ LQ KLJK
IDWGLHWIHG PLFH 7KHVH GDWD VXJJHVW WKDW 0&7 PD\ H[HUW EHQHILFLDO HIIHFWV DJDLQVW KLJK
IDWGLHWLQGXFHG LQVXOLQ UHVLVWDQFH DQG LQIODPPDWLRQ .RQR + HW DO VWXGLHG HQWHUDO GLHWV
HQULFKHG ZLWK PHGLXPFKDLQ WULJO\FHULGHV DQG 1 IDWW\ DFLGV SUHYHQW FKHPLFDOO\ LQGXFHG
H[SHULPHQWDOFROLWLVLQUDWV7KHVSHFLILFSXUSRVHRIWKLVVWXG\ZDVWRHYDOXDWHWKHVLJQLILFDQW
HIIHFWV RI PHGLXPFKDLQ WULJO\FHULGHV 0&7V DQG 1 IDWW\ DFLGV RQ FKHPLFDOO\ LQGXFHG
H[SHULPHQWDO FROLWLV LQGXFHG E\ WULQLWUREHQ]HQH VXOSKRQLF DFLG 71%6 LQ UDWV 0DOH
:LVWDUUDWVZHUHIHGOLTXLGGLHWVHQULFKHGZLWK1IDWW\DFLGFRQWUROGLHWV1IDWW\DFLG
0&7GLHWVDQG1IDWW\DFLGDQG0&70&7GLHWVIRUZHHNVDQGWKHQZHUHJLYHQDQ
LQWUDFRORQLFLQMHFWLRQRI71%66HUXPDQGWLVVXHVDPSOHVZHUHFROOHFWHGGD\VDIWHUHWKDQRO
RU 71%6 HQHPD 7KH VHYHULW\ RI FROLWLV ZDV HYDOXDWHG SDWKRORJLFDOO\ DQG WLVVXH
P\HORSHUR[LGDVH DFWLYLW\ ZDV PHDVXUHG LQ FRORQLF WLVVXHV )XUWKHUPRUH SURWHLQ OHYHOV IRU
LQIODPPDWRU\F\WRNLQHVDQGDFKHPRNLQHZHUHDVVHVVHGE\DQHQ]\PHOLQNHGLPPXQRVRUEHQW
DVVD\LQFRORQLFWLVVXHV,QGXFWLRQRISURLQIODPPDWRU\F\WRNLQHVWXPRUQHFURVLVIDFWRUĮDQG
LQWHUOHXNLQȕ LQ WKH FRORQ E\ 71%6 HQHPD ZDV PDUNHGO\ DWWHQXDWHG E\ WKH 0&7 GLHW
DPRQJ WKH GLHWV VWXGLHG )XUWKHUPRUH WKH LQGXFWLRQ RI FKHPRNLQHV PDFURSKDJH
LQIODPPDWRU\SURWHLQDQGPRQRF\WHFKHPRWDFWLFSURWHLQDOVRZDVEOXQWHGVLJQLILFDQWO\LQ
DQLPDOV IHG WKH 0&7 GLHWV $V D UHVXOW 032 DFWLYLWLHV LQ WKH FRORQLF WLVVXH DOVR ZHUH
EOXQWHGVLJQLILFDQWO\LQDQLPDOVIHGWKH0&7GLHWVFRPSDUHGZLWKWKRVHIHGWKHFRQWUROGLHWV
RU WKH 0&7 GLHWV )XUWKHUPRUH WKH 0&7 GLHW LPSURYHG FKHPLFDOO\ LQGXFHG FROLWLV
VLJQLILFDQWO\DPRQJWKHGLHWVVWXGLHG'LHWVHQULFKHGZLWKERWK0&7VDQG1IDWW\DFLGV
PD\ EH HIIHFWLYH IRU WKH WKHUDS\ RI LQIODPPDWRU\ ERZHO GLVHDVH DV DQWLLQIODPPDWRU\
LPPXQRPRGXODWLQJQXWULHQWV
$GPLQLVWUDWLRQ RI 9&2 VKRZHG VLJQLILFDQW DQWLWKURPERWLF HIIHFW FRPSDUHG WR FRSUD
RLODQGWKHHIIHFWVZHUHFRPSDUDEOHZLWKVXQIORZHURLOIHGDQLPDOV7KHDQWLR[LGDQWYLWDPLQ
OHYHOV ZHUH IRXQG WR EH KLJKHU LQ 9&2 IHG DQLPDOV WKDQ RWKHU JURXSV /'/ LVRODWHG IURP
9&2IHGDQLPDOVZKHQVXEMHFWHGWRR[LGDQW&XLQYLWURVKRZHGVLJQLILFDQWUHVLVWDQFHWR
R[LGDWLRQDVFRPSDUHGWRWKH/'/LVRODWHGIURPRWKHUWZRJURXSV'LHWDU\DGPLQLVWUDWLRQRI
9&2 UHGXFHG WKH FKROHVWHURO DQG WULJO\FHULGH OHYHOV DQG PDLQWDLQHG WKH OHYHOV RI EORRG

FRDJXODWLRQIDFWRUV5HVXOWVDOVRLQGLFDWHWKDW9&2IHHGLQJFDQSUHYHQWWKHR[LGDWLRQRI/'/
IURP R[LGDQWV 7KHVH SURSHUWLHV RI 9&2 PD\ EH DWWULEXWHG WR WKH SUHVHQFH RI ELRORJLFDOO\
DFWLYH XQVDSRQLILDEOH FRPSRQHQWVYL] YLWDPLQ ( SURYLWDPLQ $ SRO\SKHQROV DQG
SK\WRVWHUROV 7KH SUHVHQW VWXG\ ZDV FRQGXFWHG WR HYDOXDWH WKH HIIHFW RI YLUJLQ FRFRQXW RLO
9&2RQEORRGFRDJXODWLRQIDFWRUVOLSLGOHYHOVDQG/'/R[LGDWLRQDVFRPSDUHGWRFRSUDRLO
&2DQGVXQIORZHURLO6)2LQFKROHVWHUROFRDGPLQLVWHUHGUDWV6XSSOHPHQWDWLRQRI9&2
GLHW VKRZHG VLJQLILFDQW EHQHILFLDO HIIHFWV RQ EORRG FRDJXODWLRQ ZKHQ FRPSDUHG WR &2 DQG
6)27KHOLSLGOHYHOVDQGWKURPERWLFULVNIDFWRUVYL]SODWHOHWVILEULQILEULQRJHQDQGIDFWRU
9 ZHUH ORZHU LQ UDWV IHG 9&2 +HPDWRORJLFDO IDFWRUVYL] :%& +E DQG 5%& ZHUH DOVR
ORZHU LQ WKLV JURXS %ORRG FRDJXODWLRQ LV WKH KRVW PHFKDQLVP LQYROYHG LQ SHUIHFWLQJ WKH
LQWHJULW\RIWKHYDVFXODUV\VWHPLQZKLFKSODWHOHWVDUHNQRZQWRSOD\DQDFWLYHUROH(OHYDWHG
SODWHOHWFRXQWDOVRFRQWULEXWHWRWKHFLUFXODWLRQDQGSURJUHVVLRQRIFRURQDU\DUWHU\QDUURZLQJ
E\ DWKHURVFOHURWLF SODTXHV UHVXOWLQJ LQ RFFOXVLYH FRURQDU\ DUWHULDO WKURPERVLV DQG ILQDOO\ WR
XQVWDEOH DQJLQD DQG P\RFDUGLDO LQIDUFWLRQ :%& LV VXJJHVWHG WR SURPRWH P\RFDUGLDO
LVFKHPLDE\UHOHDVHRIWR[LFR[\JHQPHWDEROLWHV7KHUHDUHVXEVWDQWLDOHYLGHQFHWKDWGLHWDU\
IDFWRUV SDUWLFXODUO\ IDWW\ DFLGV PD\ DIIHFW SODWHOHW IXQFWLRQ 7KH ORZHU OHYHOV RI ILEULQRJHQ
DQGILEULQREVHUYHGLQ9&2DQG6)2IHGUDWVUHIOHFWVWKHGHFUHDVHGEORRGFORWWLQJWHQGHQF\
7KH UDWH RI FRQYHUVLRQ RI ILEULQRJHQ WR LQVROXEOH SURGXFW ILEULQ LV D NH\ IDFWRU LQ
KDHPRVWDVLV)LEULQRJHQ DQ DFXWHSKDVH SURWHLQ EHFRPHV HOHYDWHG DV D FRQVHTXHQFH RI
LQIODPPDWRU\ UHDFWLRQV WKDW RFFXU GXULQJ WKH GHYHORSPHQW RI DWKHURVFOHURWLF
SODTXHV3UHYLRXVVWXGLHVKDYHLGHQWLILHGILEULQRJHQDVDULVNIDFWRUDVSRZHUIXODVFKROHVWHURO
LQ SURGXFLQJ LVFKHPLF HYHQWV ,QWHUDFWLRQ RI SODWHOHWV ZLWK ILEULQRJHQ PHGLDWHV D YDULHW\ RI
UHVSRQVHV LQFOXGLQJ DGKHVLRQ SODWHOHW DJJUHJDWLRQ DQG ILEULQ FORW UHWUDFWLRQ :H KDYH DOVR
IRXQGGHFUHDVHGOHYHOVRIIDFWRU9LQ9&2DQG6)2IHGDQLPDOVFRPSDUHGWR&2IHGJURXS
)DFWRU 9 D ODUJH VLQJOH FKDLQ SODVPD JO\FRSURWHLQV LV DQ HVVHQWLDO FRPSRQHQW RI EORRG
FRDJXODWLRQ FDVFDGH DQG DOVR DQ LQGHSHQGHQW ULVN IDFWRU IRU P\RFDUGLDO LQIDUFWLRQ 'XULQJ
FRDJXODWLRQIDFWRU9LVFRQYHUWHGWRDFWLYHFRIDFWRUIDFWRU9DZKLFKFRPELQHVZLWK;DDQG
DVVHPEOH WR IRUP SURWKURPELQDVH FRPSOH[ ZKLFK FRQYHUWV SURWKURPELQ WR WKURPELQ
&RQFHQWUDWLRQRI3*)ĮZDVIRXQGWREHORZHULQ9&2IHGDQLPDOVNHWR3*)ĮLVDVWDEOH
PHWDEROLWHRI3*,ZKLFKLVDFULWLFDOORFDOUHJXODWLRQRIDYDULHW\RIFHOOXODUSURFHVVHV
NHWR3*)Į LV IRXQG WR SRVVHVV FDUGLRSURWHFWLYH HIIHFWV LQ DQLPDO PRGHO RI P\RFDUGLDO
LQIDUFWLRQ 'XULQJ SODWHOHW DFWLYDWLRQ DUDFKLGRQDWH LV UHOHDVHG IURP WKH SKRVSKROLSLGV DQG
WKHQ FRQYHUWHG LQWR SURVWDJODQGLQ + DQG WKURPER[DQH $ ZKLFK VWURQJO\ SRWHQWLDWH WKH
DFWLYDWLRQ SURFHVV7KH ORZ OHYHOV RI NHWR3*)Į LQ 9&2 IHG DQLPDOV PD\ EH GXH WR WKH

ORZHUOHYHORIOLQROHLFDFLGZKLFKVHUYHVDVWKHVXEVWUDWHIRUDUDFKLGRQLFDFLGV\QWKHVLV,QWKH
UHJXODWLRQ RI SULPDU\ KDHPRVWDVLV WKH LQWHUDFWLRQ RI EORRG YHVVHOV ZLWK SODWHOHW SOD\V DQ
HVVHQWLDO UROH DQG LWV LQ YLYR HYDOXDWLRQ LQYROYHV EOHHGLQJ WLPH PHDVXUHPHQW6HFRQGDU\
KDHPRVWDVLV LV DQRWKHU H[WUHPHO\ LPSRUWDQW IDFWRU GHWHUPLQLQJ WKURPEXV IRUPDWLRQ LQ
YHVVHOV %ORRG FORWWLQJ FDQ EH LQKLELWHG E\ DWWHQXDWLRQ RI SODVPD SURWKURPELQ DFWLYDWLRQ
V\VWHP+HUH ZH KDYH REVHUYHG DQ LQFUHDVH LQ SURWKURPELQ WLPH 37 LQ 9&2 DQG 6)2
FRPSDUHGWR&2IHGJURXSV6HUXPWRWDOFKROHVWHURO7&ZDVIRXQGWREHGHFUHDVHGLQ9&2
IHGDQLPDOVDQGZDVFRPSDUDEOHZLWK6)2IHGJURXS7KH7%$56FRQWHQWRILVRODWHG/'/
DQGHU\WKURF\WHPHPEUDQHRI9&2IHGDQLPDOVZHUHDOVRVLJQLILFDQWO\GHFUHDVHGFRPSDUHG
WR RWKHU WZR JURXSV 7KH ORZHU OHYHOV RI /'/ DQG 9/'/ FKROHVWHURO LQ 9&2 IHG DQLPDOV
PD\ EH WKH UHDVRQ IRU WKH DERYH HIIHFW XQSXEOLVKHG UHSRUW )HHGLQJ FKROHVWHURO ULFK GLHW
FDXVHGVLJQLILFDQWLQFUHDVHLQWKHSODVPDHU\WKURF\WHDQGOLYHU7&SODVPD7*DQG7%$56
OHYHOV 3ODVPD DQG HU\WKURF\WH 7%$56 OHYHOV DUH PDUNHUV RI R[LGDWLYH VWUHVV &LUFXODWLQJ
OLSLG SHUR[LGHV PD\ SURPRWH OLSLG SHUR[LGDWLRQ RI RWKHU FLUFXODWLQJ OLSLGV DQG OLSRSURWHLQV
UHVXOWLQJ LQ GLVVHPLQDWHG HQGRWKHOLDO G\VIXQFWLRQ 0'$ D EUHDNGRZQ SURGXFW RI
VSRQWDQHRXV IUDJPHQWDWLRQ RI SHUR[LGHV IRUP IURP SRO\XQVDWXUDWHG IDWW\ DFLGV 38)$
PDLQO\ IURP WKH R[LGDWLRQ RI FHOO PHPEUDQHV7KH REVHUYHG ORZHU OHYHO RI SODVPD DQG
HU\WKURF\WH7%$56FRQWHQWPD\EHGXHWRWKHKLJKHUDPRXQWRIDQWLR[LGDQWYLWDPLQVLQWKH
VHUXP DQG ORZHU DPRXQW RI 38)$ RI 9&2 6)2 FRQWDLQ YHU\ KLJK DPRXQW RI XQVDWXUDWHG
IDWW\DFLGVDQGLVPRUHVXVFHSWLEOHWRR[LGDWLRQ)HHGLQJRIRLOVULFKLQSRO\XQVDWXUDWHGIDWW\
DFLGV 38)$ UHVXOWV LQ WKHLU DFFXPXODWLRQ LQ FHOO PHPEUDQHV DQG LQFUHDVHG WKH R[LGDWLYH
VWUHVVVLQFH38)$VDUHKLJKO\VXVFHSWLEOHWRSHUR[LGDWLRQFRPSDUHGWRPRQRXQVDWXUDWHGDQG
VDWXUDWHGIDWW\DFLGV7KLVPD\EHWKHUHDVRQIRUWKHKLJKHU7%$56IRUPDWLRQLQWKHSODVPD
DQG HU\WKURF\WH PHPEUDQH RI 6)2 IHG DQLPDOV,W LV JHQHUDOO\ EHOLHYHG WKDW WKH KLJKO\
VDWXUDWHG QDWXUH RI FRFRQXW IDWW\ DFLGV LQFUHDVHV FKROHVWHURO V\QWKHVLV LQ RXU ERG\ DQG WKXV
FRQWULEXWHVWRKLJKHULQFLGHQFHRIKHDUWGLVHDVH7KLVFRQWHQWLRQKRZHYHUKDVEHHQUHIXWHG
VFLHQWLILFDOO\ $YDLODEOH VFLHQWLILF UHSRUWV VKRZHG WKDW LW LV QRW K\SHUFKROHVWHUROHPLF DQG
DWKHURJHQHLF0HGLXPFKDLQWULDF\JO\FHUROV0&7VRIFRFRQXWRLOIHGUDWVUHGXFHGVWRUDJH
IDW DFFXPXODWLRQ VHUXP DQG WLVVXH FKROHVWHURO DQG OLQROHDWH UHTXLUHPHQW&RPSDUHG WR &2
9&2 FRQWDLQ DSSUHFLDEOH DPRXQWV RI PDQ\ ELRORJLFDOO\ DFWLYH PLQRU FRPSRQHQWV YL]
SRO\SKHQROVPJJRLODQGDQWLR[LGDQWYLWDPLQVȝJJRLOZKLFKPD\KDYHDQ
HIIHFW RQ EORRG FRDJXODWLRQ ,Q YLWUR VWXGLHV KDYH SURYHG WKDW SRO\SKHQROV LQKLELW SODWHOHW
DJJUHJDWLRQ LQFUHDVHV WKH &DLQIOX[ DQG PRELOL]DWLRQ RI &DLQ HQGRWKHOLDO FHOOV7KHVH
FRPSRXQGV DOVR UHSRUWHG WR VXSSUHVV DGKHVLRQ PROHFXOHV DQG LQKLELW H[SHULPHQWDO

DWKHURVFOHURVLV 'LHW VXSSOHPHQWHG ZLWK SRO\SKHQROLF FRPSRXQGV LPSURYHG WKH OLSLG
PHWDEROLVPDQGLQFUHDVHGWKHSODVPDDQWLR[LGDQWSRWHQWLDOHVSHFLDOO\LQUDWVIHGZLWKDGGHG
FKROHVWHURO5HFHQWO\ ZH KDYH UHSRUWHG WKDW 9&2 SRO\SKHQROV FDQ SUHYHQW WKH R[LGDWLRQ RI
/'/LQLQYLWURFRQGLWLRQV7KH\FDQWUDSUHDFWLYHR[\JHQVSHFLHVIURPDTXHRXVVHULHVVXFK
DV SODVPD DQG LQWHUVWLWLDO IOXLG RI DUWHULDO ZDOO WKHUHE\ LQKLELWLQJ R[LGDWLRQ RI /'/ DQG
VKRZLQJDWKHURVFOHURWLFDFWLYLW\:HKDYHREVHUYHGDQLQFUHDVHRIVHUXPYLWDPLQV$DQG(LQ
9&2 IHG DQLPDOV WKDQ &2 IHG DQLPDOV DQG LV FRPSDUDEOH WR 6)2 IHG DQLPDOV 7KH ORZHU
OHYHOVRIWKHVHYLWDPLQVLQ&2IHGDQLPDOVPD\EHGXHWRWKHORZFRQWHQWLQ&2WKDWPLJKW
KDYHORVWGXULQJWKHH[SRVXUHRIFRSUDWR89UDGLDWLRQRIVXQOLJKWGXULQJH[WUDFWLRQSURFHVV
9LWDPLQ ( KDV EHHQ LPSOLFDWHG LQ WKH ERG\
V SURWHFWLYH DUPRU\ DJDLQVW GLVHDVHV DQG LV WKH
PDMRUFKDLQEUHDNLQJOLSRSKLOLFDQWLR[LGDQWVLQWLVVXHDQGSODVPD9LWDPLQ(GHFUHDVHSODWHOHW
DJJUHJDWLRQ E\ GHSKRVSKRU\ODWLQJ SURWHLQ NLQDVH &Į 3.&Į DQG PLJKW WKXV DIIHFW
WKURPERWLF WHQGHQFLHV3ODVPD YLWDPLQ ( GHFUHDVHV WKH 7%$56 FRQWHQW LQ
K\SHUFKROHVWHUROHPLF UDWV E\ WUDSSLQJ WKH FKDLQSURSDJDWLQJ SHUR[\O UDGLFDOV,W DOVR
VXSSUHVVHV WKH H[SUHVVLRQ RI DGKHVLRQ PROHFXOHV DQG FKHPRNLQHV E\ HQGRWKHOLDO
FHOOVPRQRF\WHVLQFXOWXUH6WXGLHVVKRZHGWKDWDQWLR[LGDQWYLWDPLQV$DQG(ZHUHIRXQGWR
EHGHFUHDVHGLQWKHSODVPDRISDWLHQWVZLWKDQJLQDDQGP\RFDUGLDOLQIDUFWLRQ/'/LVRODWHG
IURP9&2WUHDWHGDQLPDOVVKRZHGDUHGXFHG7%$56FRQWHQWZKHQWUHDWHGZLWK&X627KLV
PD\GHGXHWRWKHKLJKHUOHYHOVRIDQWLR[LGDQWVYL]YLWDPLQV(DQG$DQGSRO\SKHQROVLQWKH
/'/ ZKLFK SURWHFW LW IURP SK\VLRORJLFDO R[LGDQWV 2[LGL]HG /'/ KDV EHHQ VKRZQ WR EH
KLJKO\ F\WRWR[LF IRU YDVFXODU FHOOV WR DFWLYDWH HQGRWKHOLDO UHFUXLWPHQW RI OHXNRF\WHV
PDFURSKDJH F\WRNLQH SURGXFWLRQ DQG VWLPXODWH VPRRWK PXVFOH FHOOV 60&V
SUROLIHUDWLRQ2[\VWHUROV DUH UHVSRQVLEOH IRU PRVW RI WKH F\WRWR[LF HIIHFWV RI R[LGL]HG
/'/'XULQJWKHR[LGDWLRQRI/'/WKH/'/PROHFXOHXQGHUJRHVDODUJHQXPEHURIVWUXFWXUDO
FKDQJHVWKDWDOWHULWVPHWDEROLVP9DVFXODUWKURPERJHQLFLW\LVLQGXFHGE\SURJUHVVLYH/'/
R[LGDWLRQDQGWKDWDOWHUDWLRQVRIWKHDQWLR[LGDQWR[LGDQWEDODQFHRIWKH/'/SDUWLFOHLQIDYRU
RIWKHDQWLR[LGDQWWRQHDUHSURWHFWLYHDJDLQVWWKHWKURPERWLFUHVSRQVHWULJJHUHGE\R[LGDWLYH
VWUHVV,WLVJHQHUDOO\DFFHSWHGWKDWWKHSULPDU\JHQHUDWLRQRIOLSLGK\GURSHUR[LGHVLQRXUERG\
LQLWLDWHVDUHDFWLRQFDVFDGHOHDGLQJWRUDSLGSURSDJDWLRQDQGWRDPSOLILFDWLRQRIWKHQXPEHURI
UHDFWLYHR[\JHQVSHFLHVIRUPHGWKLVXOWLPDWHO\OHDGVWRH[WHQVLYHIUDJPHQWDWLRQRIWKHIDWW\
DFLG FKDLQVDQG FRQYHUVLRQ RI WKH /'/ WR D PRUH DWKHURJHQLF IRUP3HUR[LGDWLRQ RI /'/
ZLWK &XSURGXFHG FKROHVWHU\O HVWHU FRUH DOGHK\GHV VXFK DV R[RQRQDQR\OFKROHVWHURO
21& DQG R[RYDOHUR\OFKROHVWHURO 29& DV WKH PDMRU R[LGL]HG FKROHVWHU\O
HVWHUV2[LGL]HG/'/UHGXFHVWKHILEULQRO\WLFDFWLYLW\RIHQGRWKHOLXPE\GHFUHDVLQJVHFUHWLRQ

RI WLVVXHW\SH SODVPLQRJHQ DFWLYDWRU W3$ DQG LQFUHDVLQJ UHOHDVH RI SODVPLQRJHQ DFWLYDWRU
LQKLELWRU 3$,DOVR VWLPXODWHV FRDJXODWLRQ E\ UHGXFLQJ WKURPERPRGXOLQ 70
WUDQVFULSWLRQ,QFRQFOXVLRQWKHUHVXOWVLQGLFDWHWKDWFRQVXPSWLRQRI9&2VXSSOHPHQWHGGLHW
H[HUWV D VLJQLILFDQW DQWLWKURPERWLF HIIHFW ZKLFK LV DVVRFLDWHG E\ VXSSUHVVLRQ RI SODWHOHW
DJJUHJDWLRQ DQG ORZ OHYHOV RI FKROHVWHURO DQG WULJO\FHULGHV 9&2 DOVR SUHYHQWHG WKH
IRUPDWLRQ RI OLSLG SHUR[LGHV LQ ERWK HU\WKURF\WH PHPEUDQH DQG /'/ RI H[SHULPHQWDO
DQLPDOV
$PHOLRUDWLYH (IIHFW RI &RFRQXW 2LO RQ +HPDWRORJLFDO ,PPXQRORJLFDO DQG 6HUXP
%LRFKHPLFDO 3DUDPHWHUV LQ ([SHULPHQWDOO\ LQIHFWHG 5DEELWV,QWKLVVWXG\WZRH[SHULPHQWV
ZHUH SHUIRUPHG WR FODULI\ WKH HIIHFW RI GLHWDU\ VXSSOHPHQWDWLRQ RI FRFRQXW RLO &2 RQ WKH
JURZWK LPPXQH UHVSRQVH KHPDWRORJLFDO ELRFKHPLFDO SDUDPHWHUV DQG PRUWDOLW\ RI
XQLQIHFWHGDQGH[SHULPHQWDOO\LQIHFWHGUDEELWVZLWK2UQLWKREDFWHULXPUKLQRWUDFKHDOH257
DQGRUPL[HGLQIHFWLRQRI2573DVWHXUHOODPXOWRFLGD3PXOWRFLGD7RDFKLHYHWKLVJRDO
VHYHQW\WZR 1HZ =HDODQG :KLWH PDOH UDEELWV ZHUH XVHG LQ WKLV VWXG\ DQG GLYLGHG LQWR
JURXSV RI UDEELWV HDFK 7KH ILUVW H[SHULPHQW ZDV UHSUHVHQWHG E\ WKH ILUVW JURXS ZKLFK
H[SORUHGWKHLPSDFWRIGLIIHUHQWGLHWDU\OHYHOVRI&2RQQRUPDOUDEELWVDQGVXEGLYLGHGLQWR
IRXUVXEJURXSV7KHILUVWVXEJURXSIHGEDVDOGLHW&RQWURODQGWKHVHFRQGWKLUGDQGIRXUWK
VXEJURXSVIHGDEDVDOGLHWVXSSOHPHQWHGZLWKDQGFRFRQXWRLOUHVSHFWLYHO\
IRU ZHHNV 7KH VHFRQG DQG WKLUG JURXSV UHSUHVHQWHG WKH VHFRQG H[SHULPHQW 7KH VHFRQG
JURXS ZDV VXEGLYLGHG LQWR IRXU VXEJURXSV DQG VXEMHFWHG WR D VLQJOH LQIHFWLRQ ZLWK 257
LQIHFWLRQ 7KH ILUVW RQH ZDV NHSW DV LQIHFWHG FRQWURO VXEJURXS WKH VHFRQG UG DQG WK
LQIHFWHGVXEJURXSVZHUHWUHDWHGZLWKFRFRQXWRLO6XOSKDWULPHWKRSULPDQGFRFRQXW
RLOSOXVVXOSKDWULPHWKRSULPUHVSHFWLYHO\7KHWKLUGJURXSZDVVLPLODUWRWKHVHFRQGJURXSEXW
VXEMHFWHG WR PL[HG LQIHFWLRQ ZLWK 257 3 PXOWRFLGD LQIHFWLRQ IRU ZHHNV 7KH UHVXOWV
UHYHDOHGWKDWWKHVWH[SHULPHQWUHSUHVHQWHGE\WKHUHVXOWRIWKHVWJURXSZKLFKUHYHDOHGD
VLJQLILFDQWLQFUHDVH
6KRUWFKDLQ IDWW\ DFLGV 6&)$V DUH DPRQJ WKH PDLQ FODVVHV RI EDFWHULDO PHWDEROLF
SURGXFWVDQGDUHPDLQO\V\QWKHVL]HGLQWKHFRORQWKURXJKEDFWHULDOIHUPHQWDWLRQ6KRUWFKDLQ
IDWW\DFLGVVXFKDVDFHWDWHEXW\UDWHDQGSURSLRQDWHUHGXFHHQGRWKHOLDODFWLYDWLRQLQGXFHGE\
SURLQIODPPDWRU\ PHGLDWRUV DW OHDVW LQ SDUW E\ DFWLYDWLRQ RI * SURWHLQ±FRXSOHG UHFHSWRUV
*35V *35 DQG *35 7KH REMHFWLYH RI WKH VWXG\ ZDV WR DQDO\]H WKH SRVVLEOH
SURWHFWLYH HIIHFWV RI 6&)$V RQ HQGRWKHOLDO G\VIXQFWLRQ LQGXFHG E\ DQJLRWHQVLQ ,, $QJ,,

5DWDRUWLFHQGRWKHOLDOFHOOV5$(&VDQGUDWDRUWDVZHUHLQFXEDWHGZLWK$QJ,,ȝ0IRUK
LQWKHSUHVHQFHRUDEVHQFHRI6&)$V±P0,Q5$(&VZHIRXQGWKDW$QJ,,UHGXFHVWKH
SURGXFWLRQ RI QLWULF R[LGH 12 VWLPXODWHG E\ FDOFLXP LRQRSKRUH $ LQFUHDVHV WKH
SURGXFWLRQ RI UHDFWLYH R[\JHQ VSHFLHV 526 ERWK IURP WKH QLFRWLQDPLGH DGHQLQH
GLQXFOHRWLGH SKRVSKDWH R[LGDVH V\VWHP DQG WKH PLWRFKRQGULD GLPLQLVKHV YDVRGLODWRU
VWLPXODWHG SKRVSKRSURWHLQ 9$63 SKRVSKRU\ODWLRQ DW 6HU UHGXFHV *35 DQG *35
P51$ OHYHO DQG UHGXFHV WKH HQGRWKHOLXPGHSHQGHQW UHOD[DQW UHVSRQVH WR DFHW\OFKROLQH LQ
DRUWD &RLQFXEDWLRQ ZLWK EXW\UDWH DQG DFHWDWH EXW QRW ZLWK SURSLRQDWH LQFUHDVHV ERWK 12
SURGXFWLRQDQGS6HU9$63UHGXFHVWKHFRQFHQWUDWLRQRILQWUDFHOOXODU526DQGLPSURYHV
UHOD[DWLRQ WR DFHW\OFKROLQH 7KH EHQHILFLDO HIIHFWV RI EXW\UDWH ZHUH LQKLELWHG E\ WKH *35
UHFHSWRUDQWDJRQLVW ȕK\GUR[\EXW\UDWH DQG E\ WKH *35 UHFHSWRU DQWDJRQLVW */3*
%XW\UDWH LQKLELWHG WKH GRZQUHJXODWLRQ RI *35 DQG *35 LQGXFHG E\ $QJ,, EHLQJ
ZLWKRXWHIIHFWDFHWDWHDQGSURSLRQDWH1HLWKHUȕK\GUR[\EXW\UDWHQRU*/3*DIIHFWVWKH
SURWHFWLYH HIIHFW RI DFHWDWH LQ HQGRWKHOLDO G\VIXQFWLRQ ,Q FRQFOXVLRQ DFHWDWH DQG EXW\UDWH
LPSURYH HQGRWKHOLDO G\VIXQFWLRQ LQGXFHG E\ $QJ,, E\ LQFUHDVLQJ WKH ELRDYDLODELOLW\ RI 12
7KH HIIHFW RI EXW\UDWH VHHPV WR EH UHODWHG WR *35 DFWLYDWLRQ ZKHUHDV DFHWDWH HIIHFWV
ZHUHLQGHSHQGHQWRI*35
7KHUROHRI6KRUW&KDLQ)DWW\$FLGV6&)$VDQG,PPXQH5HJXODWLRQ%XW\UDWHDQG

SURSLRQDWH DUH WZR LPSRUWDQW VKRUWFKDLQ IDWW\ DFLGV 6&)$V SURGXFHG LQ WKH KXPDQ JXW
7KH\KDYHEHHQVKRZQWRKDYHVLJQLILFDQWLPPXQHV\VWHPHIIHFWVLQWKHLQWHVWLQDOPXFRVDE\
LQGXFLQJ WKH GLIIHUHQWLDWLRQ RI 7UHJXODWRU\ FHOOV YLD LQKLELWLRQ RI KLVWRQH GHDFHW\ODVH
+'$& 7KLV HQ]\PH NHHSV FKURPDWLQ IURP XQZLQGLQJ DQG WKHUHIRUH LQKLELWV JHQH
WUDQVFULSWLRQ $V D UHVXOW +'$& LQKLELWRUV VXFK DV EXW\UDWH FDQ KDYH DQ DQWLSUROLIHUDWLYH
HIIHFW ,Q DGGLWLRQ WKH\ FDQ PRGXODWH FHOO DGKHVLRQ F\WRNLQH SURGXFWLRQ FKHPRWD[LV DQG
LPPXQH FHOO PLJUDWLRQ DV ZHOO DV &2; XSUHJXODWLRQ $OO WKHVH HIIHFWV UHVXOW LQ DQ DQWL
LQIODPPDWRU\DFWLRQDFFRXQWLQJIRULWVSRWHQWLDOUROHDVDFRORUHFWDOFDQFHUVXSSUHVVRU7KLV
KHOSVWRSUHVHUYHDQLQWDFWHSLWKHOLDOEDUULHUZKLFKLVNH\WRSUHYHQWLQJLQIODPPDWRU\ERZHO
GLVHDVH DQG FRORUHFWDO FDQFHUV ,W LV HVWDEOLVKHG WKDW FKURQLF RYHUHDWLQJ SURPRWHV DGLSRVH
WLVVXH K\SHUWURSK\ 7KLV LQFUHDVHV WKH FRQFHQWUDWLRQ RI LQIODPPDWRU\ FKHPLFDOV VXFK DV
PRQRF\WH FKHPRDWWUDFWDQW SURWHLQ 0&3 DQG HYHQWXDOO\ UHVXOWV LQ DGLSRVH WLVVXH
LQILOWUDWLRQ E\ LPPXQH FHOOV QRWDEO\ PDFURSKDJHV ZKLFK DUH D PDMRU VRXUFH RI SUR
LQIODPPDWRU\ FKHPLFDOV 7KXV WKHUH LV D KLJKHU OHYHO RI LQIODPPDWRU\ FKHPLFDOV LQ WKH
V\VWHPLFFLUFXODWLRQ7KLVLVVLJQDOHGE\DQLQFUHDVHLQPDUNHUVVXFKDV&UHJXODWRU\SURWHLQ

DQG WXPRU QHFURVLV IDFWRUDOSKD 71)D :KHQ SHRSOH DW ULVN RI FHUWDLQ DEQRUPDO
LQIODPPDWRU\ UHVSRQVHV DUH VXEMHFWHG WR UHSHDWHG KLJK OHYHOV RI WKHVH PHGLDWRUV FKURQLF
LQIODPPDWLRQ VHWV LQ ZLWK LWV VHTXHODH VXFK DV GLDEHWHV PHOOLWXV LQVXOLQ UHVLVWDQFH RU
DWKHURVFOHURVLV7KHVHLQFUHDVHVLQSURLQIODPPDWRU\PROHFXOHVKDSSHQZLWKHYHU\PHDOULFK
LQ IDW RU LQ TXLFNO\ GLJHVWHG DQG DEVRUEHG FDUERK\GUDWHV ZKLFK LV DOVR FRQYHUWHG WR IDW
7KXVGLHWDU\IDFWRUVSOD\DIXQGDPHQWDOUROHLQWKHJHQHVLVRIPDQ\LPPXQRORJLFDOGLVRUGHUV
ZKLFK XQGHUOLH D KRVW RI RWKHU PHGLFDO FRQGLWLRQV 7KH GLHWDU\ LQWDNH RI ILEHU ORZHUV WKH
FRQFHQWUDWLRQRILQIODPPDWRU\PDUNHUVDQGPHGLDWRUVVXFKDVFLUFXODWLQJ&53DQG,/
*DODFWRROLJRVDFFKDULGHV DQG IUXFWRROLJRVDFFKDULGHV KDYH EHHQ VKRZQ WR PRGXODWH

WKHSURGXFWLRQRIVHYHUDOF\WRNLQHVWKXVLQFUHDVLQJRUGHFUHDVLQJWKHOHYHORILQIODPPDWLRQLQ
WKH ERG\ $JDLQ 6&)$V PD\ DFW YLD *SURWHLQ FRXSOHG UHFHSWRUV *35 RQ LPPXQH FHOOV
'LIIHUHQW*35DQG*35DUHH[SUHVVHGYDULRXVO\RQGLIIHUHQWW\SHVRILPPXQHFHOOVLQ
OLSLGULFK DGLSRVH FHOOV DQG LQ ERQH PDUURZ RU VSOHHQ ,Q REHVH IHPDOH VXEMHFWV *35 LV
RYHUH[SUHVVHG LQ VXEFXWDQHRXV WLVVXH DV FRPSDUHG WR RPHQWDO FHOOV 6&)$V DFWLYDWH WKHVH
UHFHSWRUV EXW GLIIHUHQW 6&)$V KDYH D YDU\LQJ SRWHQF\ RI DFWLYDWLRQ 6&)$V DOVR VHHP WR
VWLPXODWH FKHPRWD[LV RI QHXWURSKLOV HYHQ ZLWKRXW DQ\ RWKHU VWLPXODWRU 7KH\ LQKLELW WKH
H[SUHVVLRQRIVHYHUDOFHOODGKHVLRQPROHFXOHVVXFKDV9&$0YLD71)DDQGLQWHUOHXNLQ
E %XW\UDWH DOVR SUHYHQWV WKH H[SUHVVLRQ RI ,&$0 DQG RI RWKHU O\PSKRF\WHDVVRFLDWHG
DQWLJHQV ZKLFK DUH UHTXLUHG IRU FHOO DGKHVLRQ WKXV VXSSUHVVLQJ WKH DFWLYDWLRQ RI DQWLJHQ
SUHVHQWLQJ FHOOV $3& 7KLV PD\ DOVR DIIHFW FRVWLPXODWRU\ PROHFXOHV ZKLFK LQ WXUQ DOVR
UHJXODWHV 7FHOO DFWLYDWLRQ ,W LV QRZ K\SRWKHVL]HG WKDW 6&)$V DOVR KHOS PRGXODWH WKH
7K7K UDWLR ZKLFK UHJXODWHV WKH LPPXQH VWDWXV 6&)$V DOVR UHJXODWH SRZHUIXO ORFDO
KRUPRQHVVXFKDVPRQRF\WHSURGXFWLRQRIF\WRNLQHVDQGSURVWDJODQGLQV:KHWKHUWKH6&)$
HVSHFLDOO\ EXW\UDWH LQ DQ\ JLYHQ VLWXDWLRQ SURGXFHV DQ LQIODPPDWRU\ RU DQWLLQIODPPDWRU\
HIIHFW GHSHQGV RQ WKH VWDWH RI WKH LPPXQH FHOOV ZKHWKHU WKH\ DUH DFWLYHO\ SUROLIHUDWLQJ RU
GLIIHUHQWLDWLQJ ,Q JHQHUDO 6&)$V LQGXFH WROHUDQFH YLD GLUHFW HIIHFWV RQ WKH 7UHJXODWRU\
O\PSKRF\WHDFWLYDWLRQDQGHIIHFWRUUHVSRQVHVDVZHOODVWKURXJKWKHHIIHFWVRQWKHDFWLYDWLRQ
DQGGLIIHUHQWLDWLRQRIRWKHUSULPDU\LPPXQHFHOOVVXFKDVGHQGULWLFFHOOVDQGPDFURSKDJHV
5HGXFHGFKHPRWD[LVDQGFHOODGKHVLRQOHDGWRDV\VWHPLFDQWLLQIODPPDWRU\HIIHFWZKLFKKDV
DEHQHILFLDOHIIHFWRQLQIODPPDWRU\GLVRUGHUV%XW\UDWHKDVPXOWLSOHHIIHFWVRQWKHOLIHF\FOHRI
WKH FRORQLF FHOO FDXVLQJ SUROLIHUDWLRQ RU DSRSWRVLV GHSHQGLQJ RQ WKH FRQFHQWUDWLRQ RI WKH
6&)$7KLVKHOSVWRUHQHZWKHFRORQLFPXFRVDOOLQLQJ2YHUDOO6&)$VVHHPWRSOD\DSLYRWDO
UROHLQLQIODPPDWLRQDQGPD\KHOSWRSUHYHQWDQGWUHDWPDQ\PHWDEROLFGLVRUGHUVDVVRFLDWHG

ZLWKV\VWHPLFLQIODPPDWLRQDQGREHVLW\$VWKHUHDUHFOXHVWKDWLQIODPPDWLRQDVVRFLDWHGZLWK
REHVLW\ PD\ EH PHGLDWHG E\ DQWLJHQV DQG JLYHQ WKDW EXW\UDWH KDV EHHQ GHPRQVWUDWHG WR
LQGXFH7FHOODQHUJ\6&)$VPD\EHJRRGFDQGLGDWHVWRDVVHVVLQWKHILJKWZLWKV\VWHPLFDQG
REHVLW\DVVRFLDWHGLQIODPPDWLRQ
5HIHUHQFHV
/HFWXUHV GHOLYHUHG E\ 3DUDPHVZDUD $FKXWKD .XUXS WR VHYHUDO PHHWLQJV RI WKH
&RFXQXW'HYHORSPHQW%RDUG*RYWRI.HUDOD

&+$37(5
+80$1(1'26<0%,27,&$5&+$($/$1'3253+<5,10(',$7('
&29,'25,*,1 5(6,67$1&(72&29,'',6($6(67$7(±
$5&+$($/6<0%,26,6$1'0(7$%2/,&(1*,1((5,1*7202'8/$7(
&29,'',6($6(67$7(

7KH FRURQD YLUXV SURGXFHV GHIHFWV LQ R[\JHQDWLRQ RI KHPRJORELQ 7KH OXQJ OHVLRQV
SURGXFHG E\ WKH FRURQD YLUXV LV QRW DQ DGXOW UHVSLUDWRU\ GLVWUHVV V\QGURPH EXW D V\QGURPH
DNLQWRKLJKDOWLWXGHVLFNQHVVGXHWRR[\JHQGHSULYDWLRQ7KHFRURQDYLUXVLVDOLSLGHQYHORSH
51$ YLUXV DQG JHWV WUDQVFULEHG LQWR '1$ VHJPHQWV XVLQJ WKH +(59 UHYHUVH WUDQVFULSWDVH
7KHFRURQDYLUXV51$WKDWJHWVWUDQVFULEHGWR'1$FDQJHWLQWHJUDWHGLQWRWKHQRQFRGLQJ
VHTXHQFHRIWKHKXPDQ'1$DQGFDQIXQFWLRQDVMXPSLQJJHQHV7KHFRURQDYLUDOSURWHLQV
FDQEHV\QWKHVL]HGE\WKHKXPDQFHOO7KHFRURQDYLUXVFDQGLVSODFHLURQIURPWKHEHWDFKDLQ
RIKHPRJORELQUHQGHULQJKHPRJORELQDQGR[\JHQWUDQVSRUWG\VIXQFWLRQDO7KHKXPDQERG\LV
VXEMHFWHGWRDK\SR[LFLVFKHPLFLQMXU\FRQVHTXHQWWRGHIHFWLQR[\JHQWUDQVSRUWDVRFFXUVLQ
KLJK DOWLWXGH PRXQWDLQ VLFNQHVV F\DQLGH SRLVRQLQJ DQG FDUERQ PRQR[LGH SRLVRQLQJ 7KH
FRURQDYLUXVFDQUHOHDVHLURQIURPKHPRJORELQDQGLQFUHDVHWKHIHUULWLQOHYHOVDQGIUHHLURQ
OHYHOV WR FDWDVWURSKLF OHYHOV 7KLV SURGXFHV F\WRNLQH DFWLYDWLRQ GXH WR LQFUHDVH LQ IUHH
UDGLFDOV 7KH FRURQD YLUXV FDQ GHSOHWH KHPH IURP KHPRJORELQ DQG RWKHU KHPH FRQWDLQLQJ
HQ]\PHV7KLVLQFOXGHVF\WRFKURPH&R[LGDVHZKLFKSURGXFHVDPLWRFKRQGULDOG\VIXQFWLRQ
DQGK\SR[LFLQMXU\,WFDQELQGZLWKKHPHHQ]\PHVOLNHQLWULFR[LGHV\QWKDVHZKLFKSURGXFHV
QLWULF R[LGH F\VWDWKLRQLQH EHWD V\QWKDVH ZKLFK SURGXFHV GHIHFWLYH V\QWKHVLV RI K\GURJHQ
VXOSKLGHDQGKHPHR[\JHQDVHZKLFKSURGXFHVGHIHFWLYHFDUERQPRQR[LGHSURGXFWLRQ7KXV
WKH HQGRJHQRXV YDVRGLODWRU QHXURWUDQVPLWWHUV DUH GHSOHWHG SURGXFLQJ JHQHUDOL]HG WLVVXH
YDVRFRQVWULFWLRQ 7KH KHPH FRQWDLQLQJ HQ]\PHV LQYROYHG LQ JOXWDWKLRQH PHWDEROLVP
JOXWDWKLRQHV\QWKHWDVHDQGJOXWDWKLRQHUHGXFWDVHDUHDOVRPDGHG\VIXQFWLRQLQJLQKLELWLQJIUHH
UDGLFDOVFDYHQJLQJ7KH7&$F\FOHHQ]\PHDFRQLWDVHLVDOVRDKHPHHQ]\PHDQGWKHFRURQD
YLUXV LQDFWLYDWHV LW 7KH F\WRFKURPH 3 HQ]\PHV LQYROYHG LQ VWHURLG V\QWKHVLV DUH DOVR
KHPHHQ]\PHVDQGWKH\DUHLQDFWLYDWHGSURGXFLQJDFXWHFRUWLVRODOGRVWHURQHDQGVH[VWHURLG
GHSOHWLRQ 7KH FRURQD YLUXV DOVR SURGXFHV D SURWHLQ WKDW LQDFWLYDWHV IXULQ LQYROYHG LQ
DFWLYDWLQJYDULRXVSURWHLQHQ]\PHV
7KHFRURQDYLUXVLQIHFWLRQSURGXFHVDPHWDEROLFGLVRUGHUZLWKGHIHFWVLQR[\JHQDWLRQ
DQG WKH V\QGURPH RI DFTXLUHG DFXWH SRUSK\ULD ZLWK VHFRQGDU\ LURQ RYHUORDG VWDWH 7KH

WUHDWPHQWRIFRURQDYLUXVLQIHFWLRQGRHVQRWGHSHQGXSRQYHQWLODWLRQDWKLJK3((3ORZWLGDO
YROXPHEXWDWKLJK),2+\SHUEDULFR[\JHQWKHUDS\FDQDOVRFRUUHFW7KLVLVLQHIIHFWLYHDV
WKHUHLVQRKHPRJORELQWUDQVSRUWR[\JHQ3DFNHGFHOOWUDQVIXVLRQVZLOOEHUHTXLUHGWRFRUUHFW
WKHKHPRJORELQGHILFLHQF\DQGR[\JHQDWLRQGHIHFWV,QFUHDVHGDPRXQWVRIIUHHLURQDQGKLJK
IHUULWLQFDQSURGXFHIUHHUDGLFDOLQMXU\DQGDVHFRQGDU\$5'6OLNHSLFWXUHZKLFKPD\QHHG
YHQWLODWLRQ 9HQWLODWLRQ DV VXFK ZRXOG QRW FRUUHFW WKH SULPDU\ GHIHFW LQ KHPH R[\JHQDWLRQ
7KH KLJK OHYHOV RI IHUULWLQ PD\ QHHG LURQ GHWR[LILFDWLRQ XVLQJ GUXJV OLNH 'HVIHUDO ZKLFK
FKHODWHV RXW WKH LURQ RYHUORDG VWDWH ([FHVV LURQ FDQ OHDG WR IUHH UDGLFDO JHQHUDWLRQ WLVVXH
LQMXU\ LPPXQH DFWLYDWLRQ DQG F\WRNLQH LQMXU\ 7KH KHPH GHILFLHQF\ UHODWHG F\WRFKURPH &
R[LGDVH GHILFLHQF\ DQG DFRQLWDVH GHILFLHQF\ ZLOO KDYH WR EH WUHDWHG E\ PLWRFKRQGULDO
VXSSOHPHQWV OLNH &R4 DQG FDUQLWLQH 7KH FRURQD YLUXV SURGXFHV DQ DFXWH SRUSK\ULD DQG
SRUSK\ULQ V\QWKHVLV ZLOO KDYH WR EH LQKLELWHG E\ JLYLQJ ,9 KHPH LQIXVLRQV +HPH LQKLELWV
SRUSK\ULQ V\QWKHVLV 7KH V\PSWRPV RI SRUSK\ULD DUH GXH WR GHIHFWV LQ LQKLELWRU\ *$%$
WUDQVPLVVLRQ ,Q SRUSK\ULD WKHUH LV LQFUHDVH LQ GHOWD DPLQR OHYXOLQLF DFLG V\QWKHVLV DQG
GHFUHDVHLQ*$%$WUDQVPLVVLRQ$/$ZLOOGLVSODFH*$%$IURPLWVELQGLQJVLWHV3RUSK\ULF
FULVLVDUHWUHDWHGE\JLYLQJJDPPDDPLQREXW\ULFDFLG,9GH[WURVHLQIXVLRQVZLOODOVRKHOSWR
LQKLELW $/$ V\QWKDVH DQG SRUSK\ULQ V\QWKHVLV 3RUSK\ULQV FDQ DOVR EH UHPRYHG E\
SODVPDSKHUHVLV 7KH JOXWDWKLRQH GHILFLHQF\ KDV WR EH FRUUHFWHG E\ JLYLQJ ,9 JOXWDWKLRQH
LQIXVLRQV7KHGHILFLHQF\LQQLWULFR[LGHFDQEHFRUUHFWHGE\LQKDOHQLWULFR[LGHSUHSDUDWLRQV
7KH F\WRFKURPH 3 GHILFLHQF\ PHGLDWHG UHGXFWLRQV LQ VWHURLGV ZLOO DOVR KDYH WR EH
FRUUHFWHG
$UFKDHDOV\PELRVLVLVVHHQLQ$U\R'UDYLGLDQ1HDQGHUWKDOLFSRSXODWLRQ7KHFRORQLFDQG
HQGRV\PELRWLFDUFKDHDDOVRJHQHUDWHV51$YLURLGVZKLFKDUHFRQYHUWHGWR'1$YLURLGVE\
FRORQLF HSLWKHOLDO +(59 UHYHUVH WUDQVFULSWDVH DQG JHWV LQWHJUDWHG LQWR WKH KXPDQ JHQRPH
7KH 51$ DQG '1$ YLURLGV K\EULGLVH ZLWK WKH YLURLGDO DQG EDFWHULDO SRSXODWLRQ RI WKH JXW
PLFURELRPHDQGYLURELRPH'1$DQG51$RIWKHJXWOHDGLQJWRJHQHUDWLRQRIQHZHPHUJLQJ
YLUXVHVOLNH&RYLG$ORZILEUHGLHWZLWKLQFUHDVHLQSURWHLQDQGIDWOHDGVWRVWLPXODWLRQRI
HQGRV\PELRWLFDQGFRORQLFDUFKDHDOJURZWK7KLVOHDGVWRQHDQGHUWKDOLVDWLRQRIWKHVSHFLHV
7KXVDORZILEUHGLHWDOWHUVWKHJXWPLFURELRPHLQWKHFRORQZLWKPRUHRIDUFKDHDOJURZWK
7KH $U\R'UDYLGLDQ 1HDQGHUWKDOLF SRSXODWLRQ LQ 6RXWK ,QGLD DQG SDUWV RI (XUDVLD KDV
DUFKDHDOLQGXFHGDFTXLUHGSRUSK\ULDZKLFKFDQOHDGWRDKXPDQRULJLQRIHPHUJLQJYLUXVHV
OLNH &RYLG DV ZHOO DV UHVLVWDQFH WR HPHUJLQJ YLUXVHV OLNH &RYLG LQIHFWLRQ 7KH
SRUSK\ULRQ FDQ IRUP D WHPSODWH IRU IXUWKHU FRURQD YLUXV DELRJHQHWLF UHSOLFDWLRQ 7KH

SRUSK\ULQ&RYLGFRPSOH[FDQSURGXFHSURWHFWLRQRIWKHKXPDQWLVVXHVIURP&RYLGDQG
SUHYHQW WKH HPHUJHQFH RI LQIHFWLRQ DQG GHDWK 7KH HPHUJLQJ YLUXVHV DQG &RYLG FDQ EH
GHWHFWHGLQWKH$U\R'UDYLGLDQ1HDQGHUWKDOLFDQGVLPLODUSRSXODWLRQVEXWWKH\WHQGWREHIUHH
RI&RYLGGLVHDVHVWDWHOHDGLQJWRGHDWK+HPHOLNHSRUSK\ULQVFDQDPHOLRUDWHWKH&RYLG
GLVHDVHVWDWH7KXVHPHUJLQJYLUDOLQIHFWLRQFDQEHPRGXODWHGE\V\PELRWLFPHWDERORQRPLFV
DQGKXPDQPHWDEROLFHQJLQHHULQJLQGXFHGE\DUFKDHDOV\PELRVLV
7KHFRURQDYLUXVELQGVWRSRUSK\ULQVDQGWDNHVRXWSRUSK\ULQVIURPWKHKXPDQV\VWHP
SURGXFLQJ DQ DFTXLUHG SRUSK\ULD :KHQ WKH SRUSK\ULQV DUH WDNHQ DZD\ IURP KHPH $/$
V\QWKDVHLVDFWLYDWHGSURGXFLQJDQDFTXLUHGSRUSK\ULD6XFKDQDFTXLUHGSRUSK\ULDKDVEHHQ
GHVFULEHG LQ SRUSK\ULD YDULHJDWH DQG YLUDO LQIHFWLRQV OLNH 6$56 +,9 +&9 7KH DEQRUPDO
LQFUHDVHLQSRUSK\ULQV\QWKHVLVSURGXFHVDQDFTXLUHGSRUSK\ULDLQFRURQDYLUXVLQIHFWLRQZLWK
QHXURSV\FKLDWULFPDQLIHVWDWLRQVDXWRQRPLFG\VIXQFWLRQYLVFHUDOFULVLVGHFUHDVHGLQKLELWRU\
*$%$WUDQVPLVVLRQDQGG\VIXQFWLRQRIDOOKHPHFRQWDLQLQJHQ]\PHV\VWHPVPLWRFKRQGULDO
F\WRFKURPH&R[LGDVHF\WRFKURPH3HQ]\PHV\VWHPVLQYROYHGLQVWHURLGDQGIDWW\DFLG
PHWDEROLVP JOXWDWKLRQH PHWDEROLVP HQ]\PHV 7&$ F\FOH DFRQLWDVH DQG HQ]\PHV LQYROYLQJ
JDVRWUDQVPLWWHUV\QWKHVLV
7KHFRURQDYLUXVLQGXFHGLQFUHDVHLQSRUSK\ULQV\QWKHVLVDQGSRUSK\ULDKDVJRWRWKHU
PDMRUFDWDVWURSKLFFRQVHTXHQFHV7KHSRUSK\ULQVFDQVHOIRUJDQLVHDQGVHOIUHSOLFDWHWRIRUP
SRUSK\ULRQV ZKLFK DUH SULPLWLYH RUJDQLVPV 7KH SRUSK\ULRQV DUH WKH LQLWLDO SULPLWLYH
DELRJHQHWLFRUJDQLVPV7KHSRUSK\ULRQVFDQVHOIUHSOLFDWHDQGFDQKDYHDSULPLWLYHHOHFWURQ
WUDQVSRUW FKDLQ IRU $73 V\QWKHVLV 7KH SRUSK\ULRQ FDQ IRUP D WHPSODWH IRU IXUWKHU FRURQD
YLUXVDELRJHQHWLFUHSOLFDWLRQ7KXVWKHFRURQDYLUXVFDQLQGXFHDQDFTXLUHGSRUSK\ULDIRUP
SRUSK\ULRQV ZKLFK FDQ VHOIUHSOLFDWH DQG VHOIRUJDQL]H DQG FDQ KDYH SRUSK\ULRQ WHPSODWH
LQGXFHGDELRJHQHWLFFRURQDYLUXVUHSOLFDWLRQ7KXVWKHSRWHQWLDOIRUFRURQDYLUXVUHSOLFDWLRQ
E\DELRJHQHWLFSRUSK\ULQLQGXFHGWHPSODWHVLVQRQVWRSSDEOHDQGFRQWLQXHVSUREDEO\HWHUQDO
7KH FRURQD YLUXV GRHV QRW QHHG WKH KXPDQ KRVW WR UHSOLFDWH DQG VXUYLYH 7KH FRURQD YLUXV
51$FDQJHWWUDQVFULEHGWR'1$XVLQJ+(59UHYHUVHWUDQVFULSWDVHDQGFRORQL]HWRKXPDQ
JHQRPHDVWKHXOWLPDWHSDUDVLWHWDNLQJRYHUWKHIXQFWLRQRIWKHKXPDQERG\7KHFRURQDYLUXV
ZLOO WKXV QHYHU OHDYH WKH KXPDQ V\VWHP 7KH $U\R'UDYLGLDQ 1HDQGHUWKDOLF SRSXODWLRQ LQ
6RXWK,QGLDDQGSDUWVRI(XUDVLDKDVDUFKDHDOLQGXFHGDFTXLUHGSRUSK\ULDZKLFKFDQOHDGWRD
KXPDQRULJLQRIHPHUJLQJYLUXVHVOLNH&RYLGDVZHOODVUHVLVWDQFHWRHPHUJLQJYLUXVHVOLNH
&RYLGLQIHFWLRQ7KHSRUSK\ULQ&RYLGFRPSOH[FDQSURGXFHSURWHFWLRQRIWKHKXPDQ

WLVVXHV IURP &RYLG DQG SUHYHQW WKH HPHUJHQFH RI LQIHFWLRQ DQG GHDWK 7KH HPHUJLQJ
YLUXVHVDQG&RYLGFDQEHGHWHFWHGLQWKH$U\R'UDYLGLDQ1HDQGHUWKDOLFDQGVLPLODU
&OLPDWH FKDQJH OHDGV WR LQFUHDVHG SRUSK\ULQ V\QWKHVLV DQG SRUSK\ULQ WHPSODWH
PHGLDWHG UHSOLFDWLRQ RI YLUXVHV SULRQV DQG DUFKDHD 7KHUH LV LQFUHDVHG SRUSK\ULQ V\QWKHVLV
OHDGLQJRQWRSRUSK\ULQXULDDQGSRUSK\ULD7KHVWLPXOXVIRUSRUSK\ULQV\QWKHVLVFRPHVIURP
KHPH GHILFLHQF\ +HPH VXSSUHVVHV $/$ V\QWKDVH 6WUHVV LQGXFHV KHPH R[\JHQDVH ZKLFK
FRQYHUWV KHPH WR FDUERQ PRQR[LGH DQG ELOLUXELQ 7KXV KHPH LV GHSOHWHG IURP WKH V\VWHP
+HPH R[\JHQDVH LV LQGXFHG E\ HQYLURQPHQWDO VWUHVV &OLPDWLF FKDQJHV RI JOREDO ZDUPLQJ
DQGLFHDJHFDQLQGXFHKHPHR[\JHQDVH+HPHR[\JHQDVHLVDOVRLQGXFHGE\(0)SROOXWLRQ
RI WKH HQYLURQPHQW 7KXV WKHUH LV LQFUHDVHG SRUSK\ULQ V\QWKHVLV IURP VXFFLQ\O &R$ DQG
JO\FLQH 7KH SRUSK\ULQV FDQ VHOI RUJDQL]H DQG VHOI UHSOLFDWH WR IRUP SULPLWLYH RUJDQLVPV
FDOOHGSRUSK\ULRQV7KHSRUSK\ULRQVKDYHDSULPLWLYHHOHFWURQWUDQVSRUWFKDLQDQGHQHUJHWLFV
7KHSRUSK\ULRQVDUHFDSDEOHRILQIRUPDWLRQWUDQVIHUDQGVWRUDJHE\TXDQWDOSHUFHSWLRQ7KH
SRUSK\ULRQVIRUPDWHPSODWHIRUWKHIRUPDWLRQRI51$YLUXVHVDQGYLURLGV'1$YLUXVHVDQG
YLURLGV LVRSUHQRLG RUJDQLVPV DQG SULRQV ZKLFK DOO FDQ VHOI RUJDQL]H DQG DVVRFLDWH WR IRUP
SULPLWLYHDUFKDHD7KXVWKHFOLPDWHFKDQJHLQGXFHGJOREDOLQFUHDVHLQSRUSK\ULQV\QWKHVLVLQ
KXPDQVOHDGVWRLQFUHDVHGDELRJHQHWLFIRUPDWLRQRIDUFKDHDZKLFKSURGXFHVPRUHRIPHWKDQH
DQGPHWKDQRJHQHVLVOHDGLQJWRPRUHRIJOREDOZDUPLQJ*OREDOZDUPLQJOHDGVWRPRUHKHPH
R[\JHQDVH LQGXFWLRQ DQG SRUSK\ULQRJHQHVLV 7KH SRUSK\ULQV FDQ IRUP D WHPSODWH IRU
DELRJHQHWLF UHSOLFDWLRQ RI 51$ YLUXVHV OLNH FRURQD YLUXVHV 7KH SRUSK\ULQV FDQ LQWHUFDODWH
EHWZHHQFHOOXODUDQGRUJDQHOOHPHPEUDQHVDQGWKHSRUSK\ULQFRURQDYLUXVFRPSOH[FDQHQWHU
DOO FHOO W\SHV DQG RUJDQHOOH ZLWK WKHVH 7KH SRUSK\ULQV ZLOO VHUYH IRU DELRJHQHWLF WHPSODWH
PHGLDWHG VHOI UHSOLFDWLRQ RI WKH FRURQD YLUXV 7KH FRURQD YLUXV 51$ FDQ JHW WUDQVFULEHG WR
'1$ VHTXHQFHV E\ XVLQJ KXPDQ +(59 UHYHUVH WUDQVFULSWDVH 7KH FRURQD YLUXV '1$
VHTXHQFHV FDQ JHW LQWHJUDWHG LQWR WKH KXPDQ JHQRPH QRQFRGLQJ DUHD SURGXFLQJ G\QDPLF
FKDQJHVLQWKHKXPDQJHQRPH7KHFRURQDYLUXVFDQWKXVSHUVLVWVDQGUHSOLFDWHELRORJLFDOO\
DQGDELRJHQHWLFDOO\LQWKHKXPDQV\VWHPIRUHYHUHWHUQDOO\
'HIHFW LQ KHPH V\QWKHVLV DQG KHPH GHSOHWLRQ OHDGV WR GHILFLHQF\ RI KHPH HQ]\PHV
'HILFLHQF\ F\WRFKURPH & R[LGDVH DQG DFRQLWDVH OHDGV WR PLWRFKRQGULDO R[LGDWLYH
SKRVSKRU\ODWLRQ GHIHFWV DQG 7&$ F\FOH GHIHFWV 7KLV OHDGV WR S\UXYDWH GHK\GURJHQDVH
GHILFLHQF\DQGGHIHFWLQV\QWKHVLVRIDFHW\O&R$7KHUHLVLQFUHDVHLQJO\FRO\VLVFRQVHTXHQW
WRSRUSK\ULQSKRWRR[LGDWLRQLQGXFHGIUHHUDGLFDOJHQHUDWLRQDQG+,)DOSKDLQGXFWLRQ7KLV

SURGXFHV WKH :DUEXUJ SKHQRW\SH 7KH LQFUHDVHG OHYHO RI S\UXYDWH WKDW LV JHQHUDWHG LV
FRQYHUWHG WR JOXWDPDWH DQG DPPRQLD 7KXV WKHUH LV K\SHUDPPRQHPLD DV D FRQVHTXHQFH RI
WKH PHWDEROLF GHIHFW 6LQFH JO\FLQH LV XWLOL]HG IRU SRUSK\ULQ V\QWKHVLV VHULQH LV QRW
V\QWKHVL]HGOHDGLQJRQWRGHILFLHQF\RIWKHVXEVWUDWHIRUV\QWKHVLVRIF\VWDWKLRQLQH7KLVOHDGV
WR DFFXPXODWLRQ RI KRPRF\VWHLQH DQG KRPRF\VWLQXULD 'HILFLHQF\ RI DFHW\O &R$ OHDGV WR
GHIHFWV LQ WKH LVRSUHQRLG SDWKZD\ DQG GHIHFWLYH V\QWKHVLV RI FKROHVWHURO DQG XELTXLQRQH
7KHUH LV DOVR GHILFLHQF\ RI WKH KHPH FRQWDLQLQJ FKROHVWHURO V\QWKHVL]LQJ HQ]\PH ODQRVWHURO
V\QWKDVH7KLVOHDGVWRDFKROHVWHUROGHSOHWHGVWDWH
7KHLQFUHDVHLQSRUSK\ULQVOHDGVWRFRUWLFDOG\VIXQFWLRQDQGSUHIURQWDOFRUWH[DWURSK\
7KH SRUSK\ULQV FDQ GHVWUR\ WKH KXPDQ HQGRJHQRXV UHWURYLUXVHV DQG WKH MXPSLQJ JHQHV
OHDGLQJ WR ODFN RI G\QDPLFLW\ RI WKH JHQRPH 7KLV OHDGV RQWR PDOGHYHORSPHQW RI WKH
SUHIURQWDOFRUWH[7KLVOHDGVRQWRFHUHEHOODUGRPLQDQFHDQGDFHUHEHOODUFRJQLWLYHDIIHFWLYH
GLVRUGHU 7KLV SURGXFHV SRUSK\ULQ UHODWHG TXDQWDO SHUFHSWLRQ 3RUSK\ULQV DUH GLSRODU
PROHFXOHV DQG LQ WKH VHWWLQJ RI SRUSK\ULQ PHGLDWHG PHPEUDQH VRGLXP SRWDVVLXP $73DVH
LQKLELWLRQLQGXFHGSXPSHGSKRQRQV\VWHPFDQSURGXFHDTXDQWDOSHUFHSWLYHVWDWH3RUSK\ULQV
DUH PDFURPROHFXOHV ZKLFK FDQ KDYH ERWK D ZDYH DQG SDUWLFOH H[LVWHQFH DQG FDQ EULGJH WKH
SDUWLFXODWH ZRUOG DQG WKH TXDQWDO ZRUOG 0HPEUDQH VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ
LQGXFHGGLSRODUSRUSK\ULQPHGLDWHGSXPSHGSKRQRQV\VWHPFDQOHDGRQWRDFHOOXODUSODVPD
VWDWH DQG (0 ) VLJQDO WUDQVGXFWLRQ 0DFURPROHFXOHV OLNH 51$ '1$ SURWHLQ DQG WKH FHOO
LWVHOI FDQ KDYH DQ (0) VLJQDWXUH 7KLV SRUSK\ULQ JHQHUDWHG PDFURPROHFXODU FHOOXODU (0)
VLJQDWXUH LV LPSRUWDQW LQ UHJXODWLRQ RI FHOO IXQFWLRQ 7KH SRUSK\ULQV FDQ KDYH TXDQWDO
SHUFHSWLRQ RI ORZ OHYHO (0) ILHOGV OHDGLQJ WR SUHIURQWDO FRUWH[ DWURSK\ 7KLV OHDGV RQWR
FRUWLFDO G\VIXQFWLRQ DQG ODFN RI IXQFWLRQLQJ RI WKH FRQVFLRXV EUDLQ 7KH FHUHEHOOXP
GRPLQDWHV DQG WKH XQFRQVFLRXV WDNHV RYHU 7KLV OHDGV RQWR 1HDQGHUWKDOLVDWLRQ RI WKH EUDLQ
DQG VFKL]RSKUHQLD DQG DXWLVP 7KH KHPH GHILFLHQF\ OHDGV WR ODFN RI V\QWKHVLV RI WKH KHPH
HQ]\PH F\WRFKURPH 3 GHSHQGHQW VH[ KRUPRQHV DQG D ZLGHVSUHDG DVH[XDO VWDWH 7KH
PLWRFKRQGULDO G\VIXQFWLRQ OHDGV RQWR LQVXOLQ UHVLVWDQFH DQG PHWDEROLF V\QGURPH ; 7KH
:DUEXUJ SKHQRW\SH DQG LQFUHDVHG JO\FRO\VLV OHDGV WR RQFRJHQHVLV 7KH PLWRFKRQGULDO
G\VIXQFWLRQ FDQ SURGXFH QHXURGHJHQHUDWLRQ 7KH LQFUHDVH LQ O\PSKRF\WH JO\FRO\VLV FDQ
SURGXFHLPPXQHDFWLYDWLRQDQGDXWRLPPXQHGLVHDVH7KXVWKHVWUHVVLQGXFHGSRUSK\ULDGXH
WRFOLPDWLFFKDQJHDQGHQYLURQPHQWDOSROOXWLRQFDQOHDGWRFLYLOLVDWLRQDOGLVHDVH

7KH SRUSK\ULQV FDQ VHOI RUJDQL]H WR IRUP PDFURPROHFXODU VWUXFWXUHV ZKLFK FDQ VHOI
UHSOLFDWH WR IRUP D SRUSK\ULQ RUJDQLVP 7KH SKRWRQ LQGXFHG WUDQVIHU RI HOHFWURQV DORQJ WKH
PDFURPROHFXOHFDQOHDGWROLJKWLQGXFHG$73V\QWKHVLV7KHSRUSK\ULQVFDQIRUPDWHPSODWH
RQ ZKLFK 51$ DQG '1$ FDQ IRUP JHQHUDWLQJ YLURLGV 7KH SRUSK\ULQV FDQ DOVR IRUP D
WHPSODWHRQZKLFKSULRQVFDQIRUP7KH\DOOFDQMRLQWRJHWKHU±51$YLURLGV'1$YLURLGV
SULRQV ± WR IRUP SULPLWLYH DUFKDHD 7KXV WKH DUFKDHD DUH FDSDEOH RI VHOI UHSOLFDWLRQ RQ
SRUSK\ULQ WHPSODWHV 7KH VHOI UHSOLFDWLQJ DUFKDHD FDQ VHQVH JUDYLW\ ZKLFK JLYHV ULVH WR
FRQVFLRXVQHVV7KH\FDQDOVRVHQVHWKHDQWLJUDYLW\ILHOGVZKLFKJLYHVULVHWRWKHXQFRQVFLRXV
EUDLQ 7KXV WKHUH FDQ EH ERWK VHOI UHSOLFDWLQJ DUFKDHD DQG DQWLDUFKDHD UHJXODWLQJ WKH
FRQVFLRXV DQG XQFRQVFLRXV EUDLQ 7KXV WKH FOLPDWH FKDQJH VWUHVV PHGLDWHG LQFUHDVHG
SRUSK\ULQ V\QWKHVLV OHDGV WR SUHIURQWDO FRUWH[ DWURSK\ FHUHEHOODU GRPLQDQFH FHUHEHOODU
FRJQLWLYHDIIHFWLYHGLVRUGHUTXDQWDOSHUFHSWLRQDQG1HDQGHUWKDOLVDWLRQRIWKHSRSXODWLRQ7KH
SRUSK\ULRQV DUH VHOI UHSOLFDWLQJ VXSUDPROHFXODU RUJDQLVPV ZKLFK IRUPV WKH SUHFXUVRU
WHPSODWH RQ ZKLFK WKH YLURLGV SULRQV DQG QDQRDUFKDHD RULJLQDWH 6WUHVV LQGXFHG WHPSODWH
GLUHFWHGDELRJHQHVLVRISRUSK\ULRQVSULRQVYLURLGVDQGDUFKDHDLVDFRQWLQXRXVSURFHVVDQG
FDQ FRQWULEXWH WR FKDQJHV LQ EUDLQ VWUXFWXUH DQG EHKDYLRU DV ZHOO DV GLVHDVH SURFHVV
SRSXODWLRQVEXWWKH\WHQGWREHIUHHRI&RYLGGLVHDVHVWDWHOHDGLQJWRGHDWK
7KHFRURQDYLUXVLVSRVVLEO\DQH[WUDWHUUHVWULDOYLUXVZKLFKFDPHLQWRHDUWKIROORZLQJ
D PHWHRULF LPSDFW LQ :XKDQ UHJLRQ RI &KLQD DQG FLUFXODWHV LQ WKH VWUDWRVSKHUH RI HDUWK
GLUHFWHGE\ZLQGVLQWKHODWLWXGLQDOUHJLRQ17KHXQLYHUVHLVELRORJLFDOLQRULJLQ7KH
PHWDO DFWLQLGHV SURYLGH UDGLRO\WLF HQHUJ\ FDWDO\VLV IRU ROLJRPHU IRUPDWLRQ DQG SURYLGH D
FRRUGLQDWLQJLRQIRUPHWDOORHQ]\PHVDOOLPSRUWDQWLQDELRJHQHVLV7KHPHWDODFWLQLGHVXUIDFHV
ZRXOGE\VXUIDFHPHWDEROLVPJHQHUDWHSRUSK\ULQVIURPVLPSOHFRPSRXQGVOLNHVXFFLQLFDFLG
DQG JO\FLQH 3RUSK\ULQV FDQ H[LVW DV ZDYH IRUPV DQG SDUWLFXODWH IRUPV DQG FDQ EULGJH WKH
GLYLGLQJOLQHEHWZHHQWKHTXDQWDOZRUOGDQGSDUWLFXODWHZRUOG3RUSK\ULQPROHFXOHVFDQVHOI
RUJDQL]H LQWR RUJDQLVPV ZLWK HQHUJ\ WUDQVGXFWLRQ $73 V\QWKHVLV DQG LQIRUPDWLRQ VWRUDJH
ZLWKUHSOLFDWLQJFDSDFLW\$VHOIUHSOLFDWLQJSRUSK\ULQPLFURRUJDQLVPPD\KDYHSOD\HGDUROH
LQ WKH RULJLQ RI OLIH 3RUSK\ULQV FDQ IRUP WHPSODWHV RQ ZKLFK PDFURPROHFXOHV OLNH
SRO\VDFFKDULGHV SURWHLQ DQG QXFOHLF DFLGV FDQ IRUP 7KH PDFURPROHFXOHV JHQHUDWHG RQ
DFWLQLGLF SRUSK\ULQV WHPSODWHV ZRXOG KDYH FRQWULEXWHG WR WKH DFWLQLGLF QDQRDUFKDHD DQG WKH
RULJLQDORUJDQLVPVRQHDUWK7KHGDWDVXSSRUWVWKHSHUVLVWHQFHRIDQDFWLQLGLFDUFKDHDOVKDGRZ
ELRVSKHUH ZKLFK WKURZV OLJKW RQ WKH DFWLQLGH EDVHG RULJLQ RI OLIH DQG SRUSK\ULQV DV WKH
SUHPLHUSUHELRWLFPROHFXOH

3RUSK\ULQV SOD\ DQ LPSRUWDQW UROH LQ WKH JHQHVLV RI WKH ELRORJLFDO XQLYHUVH 7KH
SRUSK\ULQPDFURDUUD\VFDQIRUPLQWKHLQWHUVWHOODUVSDFHRQLWVRZQDVSRUSK\ULQVFDQH[LVW
ERWK DV SDUWLFOHV DQG ZDYHV 3RUSK\ULQV IRUP WKH EULGJLQJ FRQQHFWLRQ EHWZHHQ WKH TXDQWDO
ZRUOGDQGWKHSDUWLFXODWHZRUOG7KHVHOIJHQHUDWHGSRUSK\ULQVIURPWKHTXDQWDOIRDPFDQVHOI
RUJDQL]HWRIRUPPDFURDUUD\VFDQVWRUHLQIRUPDWLRQDQGVHOIUHSOLFDWH7KLVFDQEHFDOOHGDV
DQDELRWLFSRUSK\ULQRUJDQLVP7KHSRUSK\ULQWHPSODWHZRXOGKDYHJHQHUDWHGQXFOHLFDFLGV
SURWHLQVSRO\VDFFKDULGHVDQGLVRSUHQRLGV7KLVZRXOGKDYHJHQHUDWHGDFWLQLGLFQDQRDUFKDHD
LQ WKH LQWHUVWHOODU VSDFH 7KH SRUSK\ULQV KDYH PDJQHWLF SURSHUWLHV DQG WKH LQWHUVWHOODU
SRUSK\ULQRUJDQLVPFDQFRQWULEXWHWRWKHLQWHUVWHOODUJUDLQVDQGLQWHUVWHOODUPDJQHWLFILHOGV
7KH FRVPLF GXVW JUDLQV RI SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO RUJDQLVP RFFXS\ WKH
LQWHUJDODFWLF VSDFH DQG DUH WKRXJKW WR EH IRUPHG RI PDJQHWRWDFWLF EDFWHULD LGHQWLILHG
DFFRUGLQJWRWKHLUVSHFWUDOVLJQDWXUHV$FFRUGLQJWRWKH+R\OH¶VK\SRWKHVLVWKHFRVPLFGXVW
PDJQHWRWDFWLFSRUSK\ULQPDFURDUUD\VQDQRDUFKDHDORUJDQLVPSOD\VDUROHLQWKHIRUPDWLRQRI
WKHLQWHUJDODFWLFPDJQHWLFILHOG$PDJQHWLFILHOGHTXDOLQVWUHQJWKWRDERXWRQHPLOOLRQWKSDUW
RIWKHPDJQHWLFILHOGRIHDUWKH[LVWVWKURXJKRXWPXFKRIRXUJDOD[\7KHPDJQHWLFILOHVFDQ
EHXVHGWRWUDFHWKHVSLUDODUPVRIWKHJDOD[\IROORZLQJDSDWWHUQRIILHOGOLQHVWKDWFRQQHFW
\RXQJVWDUVDQGGXVWLQZKLFKQHZVWDUVDUHIRUPHGDWDUDSLGUDWH6WXGLHVKDYHVKRZQWKDWD
IUDFWLRQ RI WKH GXVW SDUWLFOHV KDYH HORQJDWHG VKDSH VLPLODU WR EDFLOOL DQG WKH\ DUH
V\VWHPDWLFDOO\ OLQHG XS LQ RXU JDOD[\ 0RUHRYHU WKH GLUHFWLRQ RI DOLJQPHQW LV VXFK WKDW WKH
ORQJD[HVRIWKHGXVWWHQGWREHDWULJKWDQJOHVWRWKHGLUHFWLRQRIWKHJDODFWLFPDJQHWLFILHOGDW
HYHU\SRLQW0DJQHWRWDFWLFSRUSK\ULQPDFURDUUD\VQDQRDUFKDHDORUJDQLVPVKDYHWKHSURSHUW\
WRDIIHFWWKHGHJUHHRIDOLJQPHQWWKDWLVREVHUYHG7KHIDFWWKDWWKHPDJQHWRWDFWLFSRUSK\ULQ
PDFURDUUD\VQDQRDUFKDHDORUJDQLVPVDSSHDUWREHFRQQHFWHGWRWKHPDJQHWLFILHOGOLQHVWKDW
WKUHDG WKURXJK WKH VSLUDO DUPV RI WKH JDOD[\ FRQQHFWLQJ RQH UHJLRQ RI VWDU IRUPDWLRQ WR
DQRWKHUVXSSRUWDUROHIRUWKHPLQVWDUIRUPDWLRQDQGLQWKHPDVVGLVWULEXWLRQDQGURWDWLRQRI
VWDUV7KHQXWULHQWVXSSO\IRUDSRSXODWLRQRILQWHUVWHOODUSRUSK\ULQPDFURDUUD\VQDQRDUFKDHDO
RUJDQLVPVFRPHVIURPPDVVIORZVRXWRIVXSHUQRYDVSRSXODWLQJWKHJDOD[\*LDQWVDULVLQJLQ
WKHHYROXWLRQRIVXFKVWDUVH[SHULHQFHDSKHQRPHQRQLQZKLFKPDWHULDOFRQWDLQLQJQLWURJHQ
FDUERQ PRQR[LGH K\GURJHQ KHOLXP ZDWHU DQG WUDFH HOHPHQWV HVVHQWLDO IRU OLIH IORZV
FRQWLQXRXVO\RXWZDUGLQWRVSDFH7KHLQWHUVWHOODURUJDQLVPVQHHGOLTXLGZDWHU:DWHUH[LVWV
RQO\ DV YDSRXU RU VROLG LQ WKH LQWHUVWHOODU VSDFH DQG RQO\ WKURXJK VWDU IRUPDWLRQ OHDGLQJ WR
DVVRFLDWHG SODQHWV DQG FRPHWDU\ ERGLHV FDQ WKHUH EH DFFHVV WR OLTXLG ZDWHU 7R FRQWURO
FRQGLWLRQVOHDGLQJWRVWDUIRUPDWLRQLVRISDUDPRXQWLPSRUWDQFHLQFRVPLFELRORJ\7KHUDWH
RIVWDUIRUPDWLRQLVFRQWUROOHGE\WZRIDFWRUV7RRKLJKDUDWHRIVWDUIRUPDWLRQSURGXFHVD

GHVWUXFWLYH HIIHFW RI 89 UDGLDWLRQ DQG GHVWUR\V FRVPLF ELRORJ\ 6WDU IRUPDWLRQ DV VWDWHG
EHIRUH SURGXFHV ZDWHU FUXFLDO IRU RUJDQLVP JURZWK &RVPLF ELRORJ\ RI PDJQHWRWDFWLF
RUJDQLVPVDQGVWDUIRUPDWLRQDUHWKXVFORVHO\LQWHUOLQNHG6\VWHPVOLNHVRODUV\VWHPVGRQRW
DULVH LQ UDQGRP FRQGHQVDWLRQ RI EOREV RI LQWHUVWHOODU JDV 2QO\ E\ D ULJRURXV FRQWURO RI
URWDWLRQRIYDULRXVSDUWVRIWKHV\VWHPZRXOGJDOD[LHVDQGVRODUV\VWHPHYROYHG7KHNH\WR
PDLQWDLQLQJFRQWURORYHUURWDWLRQVHHPVWROLHLQWKHLQWHUJDODFWLFPDJQHWLFILHOGDVLQGHHGWKH
ZKROHSKHQRPHQDRIVWDUIRUPDWLRQ7KHLQWHUJDODFWLFPDJQHWLFILHOGVRZHVLWVRULJLQWRWKH
OLQLQJ XS RI PDJQHWRWDFWLF SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO RUJDQLVPV DQG WKH FRVPLF
ELRORJ\ RI LQWHUVWHOODU RUJDQLVPV FDQ SURVSHU RQO\ E\ PDLQWDLQLQJ D ILUP JULS RQ WKH
LQWHUVWHOODU PDJQHWLF ILHOG DQG KHQFH RQ WKH UDWH RI VWDU IRUPDWLRQ DQG W\SH RI VWDU V\VWHP
SURGXFHG7KLVSRLQWWRDFRVPLFLQWHOOLJHQFHRUEUDLQFDSDEOHRIFRPSXWDWLRQDQDO\VLVDQG
H[SORUDWLRQ RI WKH XQLYHUVH DW ODUJH RI PDJQHWRWDFWLF SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO
RUJDQLVPQHWZRUNV7KHRULJLQRIOLIHRQHDUWKDFFRUGLQJWRWKH+R\OH¶VK\SRWKHVLVZRXOGEH
E\ VHHGLQJ RI SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO RUJDQLVP IURP WKH RXWHU LQWHUJDODFWLF
VSDFH7KHSRUSK\ULQRUJDQLVPFDQDOVREHJHQHUDWHGRQDFWLQLGLFVXUIDFHVLQHDUWK&RPHWV
FDUU\LQJSRUSK\ULQRUJDQLVPVZRXOGKDYHLQWHUDFWHGZLWKWKHHDUWK$WKLQVNLQRIJUDSKLWL]HG
PDWHULDO DURXQG D VLQJOH SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO RUJDQLVP RU FOXPSV RI
RUJDQLVP FDQ VKLHOG WKH LQWHULRU IURP GHVWUXFWLRQ E\ 89 OLJKW 7KH VXGGHQ VXUJH DQG
GLYHUVLILFDWLRQRIVSHFLHVRISODQWVDQGDQLPDOVDQGWKHLUHTXDOO\VXGGHQH[WLQFWLRQKDVVHHQ
IURP IRVVLO UHFRUGV SRLQW WR VSRUDGLF HYROXWLRQ SURGXFHG E\ LQGXFWLRQ RI IUHVK FRPHWDU\
JHQHV ZLWK WKH DUULYDO RI HDFK PDMRU QHZ FURS RI FRPHWV 7KH SRUSK\ULQ PDFURDUUD\V
RUJDQLVP FDQ KDYH D ZDYHSDUWLFOH H[LVWHQFHDQG EULGJH WKH ZRUOG RI ERVRQV DQG IHUPLRQV
7KH SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO RUJDQLVP FDQ IRUP ELRILOPV DQG WKH SRUSK\ULQ
RUJDQLVP FDQ IRUP D PROHFXODU TXDQWXP FRPSXWLQJ FORXG LQ WKH ELRILOP ZKLFK IRUPV DQ
LQWHUVWHOODULQWHOOLJHQFHUHJXODWLQJWKHIRUPDWLRQRIVWDUV\VWHPVDQGJDOD[LHV7KHSRUSK\ULQ
PDFURDUUD\V QDQRDUFKDHDO RUJDQLVP TXDQWDO FRPSXWLQJ FORXG FDQ EULGJH WKH ZDYH SDUWLFOH
ZRUOGIXQFWLRQLQJDVWKHDQWKURSLFREVHUYHUVHQVLQJJUDYLW\ZKLFKRUFKHVWUDWHVWKHUHGXFWLRQ
RI WKH TXDQWDO ZRUOG RI SRVVLELOLWLHV LQ WR WKH PDFURVFRSLF ZRUOG 7KH DFWLQLGH EDVHG
SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO RUJDQLVP UHJXODWHV WKH KXPDQ V\VWHP DQG ELRORJLFDO
XQLYHUVH
3RUSK\ULQVDOVRKDYHHYROXWLRQDU\VLJQLILFDQFHVLQFHSRUSK\ULDLVUHODWHGWR6F\WKLDQ
UDFHV DQG FRQWULEXWHV WR WKH EHKDYLRXUDO DQG LQWHOOHFWXDO FKDUDFWHULVWLFV RI WKLV JURXS RI
SRSXODWLRQ 3RUSK\ULQV FDQ LQWHUFDODWH LQWR '1$ DQG SURGXFH +(59 H[SUHVVLRQ +(59

51$FDQJHWFRQYHUWHGWR'1$E\UHYHUVHWUDQVFULSWDVHZKLFKFDQJHWLQWHJUDWHGLQWR'1$
E\ LQWHJUDVH 7KLV WHQGV WR LQFUHDVH WKH OHQJWK RI WKH QRQFRGLQJ UHJLRQ RI WKH '1$ 7KH
LQFUHDVHLQQRQFRGLQJUHJLRQRIWKH'1$LVLQYROYHGLQSULPDWHDQGKXPDQHYROXWLRQ7KXV
LQFUHDVHG UDWHV RI SRUSK\ULQ V\QWKHVLV ZRXOG FRUUHODWH ZLWK LQFUHDVH LQ QRQFRGLQJ '1$
OHQJWK7KHDOWHUDWLRQLQWKHOHQJWKRIWKHQRQFRGLQJUHJLRQRIWKH'1$FRQWULEXWHVWRWKH
G\QDPLFQDWXUHRIWKHJHQRPH7KXVJHQHWLFDQGDFTXLUHGSRUSK\ULDVFDQOHDGWRDOWHUDWLRQLQ
WKHQRQFRGLQJUHJLRQRIWKHJHQRPH7KHDOWHUDWLRQRIWKHOHQJWKRIWKHQRQFRGLQJUHJLRQRI
WKH '1$ FRQWULEXWHV WR WKH UDFLDO DQG LQGLYLGXDO GLIIHUHQFHV LQ SRSXODWLRQV $Q LQFUHDVHG
OHQJWK RI QRQFRGLQJ UHJLRQ DV ZHOO DV LQFUHDVHG SRUSK\ULQ V\QWKHVLV OHDGV WR LQFUHDVHG
FRJQLWLYHDQGFUHDWLYHQHXURQDOIXQFWLRQ3RUSK\ULQVDUHLQYROYHGLQTXDQWDOSHUFHSWLRQDQG
UHJXODWLRQ RI WKH WKDODPRFRUWLFRWKDODPLF SDWKZD\ RI FRQVFLRXV SHUFHSWLRQ 7KXV JHQHWLF
DQGDFTXLUHGSRUSK\ULDVFRQWULEXWHWRKLJKHUFRJQLWLYHDQGFUHDWLYHFDSDFLW\RIFHUWDLQUDFHV
3RUSK\ULDVDUHFRPPRQDPRQJ(XUDVLDQ6F\WKLDQUDFHVZKRKDYHDVVXPHGOHDGHUVKLSUROHV
LQFRPPXQLWLHVDQGJURXSV3RUSK\ULQVKDYHFRQWULEXWHGWRKXPDQDQGSULPDWHHYROXWLRQ
7KH GLSRODU SRUSK\ULQV 3$+ DQG DUFKDHDO PDJQHWLWH LQ WKH VHWWLQJ RI GLJR[LQ
LQGXFHG VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ FDQ SURGXFH D SXPSHG SKRQRQ V\VWHP
PHGLDWHG )URKOLFK PRGHO VXSHUFRQGXFWLQJ VWDWH LQGXFLQJ TXDQWDO SHUFHSWLRQ ZLWK
QDQRDUFKDHDOVHQVHGJUDYLW\SURGXFLQJWKHRUFKHVWUDWHGUHGXFWLRQRIWKHTXDQWDOSRVVLELOLWLHV
WRWKHPDFURVFRSLFZRUOG$/$FDQSURGXFHVRGLXPSRWDVVLXP$73DVHLQKLELWLRQUHVXOWLQJ
LQDSXPSHGSKRQRQV\VWHPPHGLDWHGTXDQWDOVWDWHLQYROYLQJGLSRODUSRUSK\ULQV3RUSK\ULQV
E\DXWRR[LGDWLRQFDQJHQHUDWHELRSKRWRQVDQGDUHLQYROYHGLQTXDQWDOSHUFHSWLRQ%LRSKRWRQV
FDQ PHGLDWH TXDQWDO SHUFHSWLRQ &HOOXODU SRUSK\ULQV SKRWRR[LGDWLRQ DUH LQYROYHG LQ VHQVLQJ
RIHDUWKPDJQHWLFILHOGVDQGORZOHYHOELRPDJQHWLFILHOGV3RUSK\ULQVFDQWKXVFRQWULEXWHWR
TXDQWDO SHUFHSWLRQ /RZ OHYHO HOHFWURPDJQHWLF ILHOGV DQG OLJKW FDQ LQGXFH SRUSK\ULQ
V\QWKHVLV/RZOHYHO(0)FDQSURGXFHIHUURFKHODWDVHLQKLELWLRQDVZHOODVKHPHR[\JHQDVH
LQGXFWLRQ FRQWULEXWLQJ WR KHPH GHSOHWLRQ $/$ V\QWKDVH LQGXFWLRQ DQG LQFUHDVHG SRUSK\ULQ
V\QWKHVLV/LJKWDOVRLQGXFHV$/$V\QWKDVHDQGSRUSK\ULQV\QWKHVLV7KHLQFUHDVHGSRUSK\ULQ
V\QWKHVL]HG FDQ FRQWULEXWH WR LQFUHDVHG TXDQWDO SHUFHSWLRQ DQG FDQ PRGXODWH FRQVFLRXV
SHUFHSWLRQ 7KH SRUSK\ULQ LQGXFHG ELRSKRWRQV DQG TXDQWDO ILHOGV FDQ PRGXODWH WKH VRXUFH
IURPZKLFKORZOHYHO(0)DQGSKRWLFILHOGVZHUHJHQHUDWHG7KXVWKHSRUSK\ULQJHQHUDWHG
E\H[WUDQHRXVORZOHYHO(0)DQGSKRWLFILHOGVFDQLQWHUDFWZLWKWKHVRXUFHRIORZOHYHO(0)
DQG SKRWLF ILHOGV PRGXODWLQJ LW 7KXV SRUSK\ULQV FDQ VHUYH DV D EULGJH EHWZHHQ WKH KXPDQ
EUDLQ DQG WKH VRXUFH RI ORZ OHYHO (0) DQG SKRWLF ILHOGV 7KLV VHUYHV DV D PRGH RI

FRPPXQLFDWLRQ EHWZHHQ WKH KXPDQ EUDLQ DQG (0) VWRUDJH GHYLFHV OLNH LQWHUQHW 7KH
SRUSK\ULQV FDQ DOVR VHUYH DV WKH VRXUFH RI FRPPXQLFDWLRQ ZLWK WKH HQYLURQPHQW
(QYLURQPHQWDO(0)DQGFKHPLFDOVSURGXFHKHPHR[\JHQDVHLQGXFWLRQDQGKHPHGHSOHWLRQ
LQFUHDVLQJ SRUSK\ULQ V\QWKHVLV TXDQWDO SHUFHSWLRQ DQG WZRZD\ FRPPXQLFDWLRQ 7KXV
LQGXFWLRQ RI SRUSK\ULQ V\QWKHVLV FDQ VHUYH DV D PHFKDQLVP RI FRPPXQLFDWLRQ EHWZHHQ
KXPDQ EUDLQ DQG WKH HQYLURQPHQW E\ H[WUDVHQVRU\ SHUFHSWLRQ 7KH SRUSK\ULRQV DUH VHOI
UHSOLFDWLQJ VXSUDPROHFXODU RUJDQLVPV ZKLFK IRUPV WKH SUHFXUVRU WHPSODWH RQ ZKLFK WKH
YLURLGV SULRQV DQG QDQRDUFKDHD RULJLQDWH 6WUHVV LQGXFHG WHPSODWH GLUHFWHG DELRJHQHVLV RI
SRUSK\ULRQV SULRQV YLURLGV DQG DUFKDHD LV D FRQWLQXRXV SURFHVV DQG FDQ FRQWULEXWH WR
FKDQJHVLQEUDLQVWUXFWXUHDQGEHKDYLRUDVZHOODVGLVHDVHSURFHVV
/LIH LQ HDUWK ZRXOG KDYH HYROYHG E\ VHHGLQJ RI YLURLGV DQG DUFKDHD IURP WKH RXWHU
VSDFH FRQVHTXHQW WR DVWHURLGDO KLWV 7KH XQLYHUVH ZRXOG KDYH D ELRORJLFDO RULJLQ DQG LW LV
SODXVLEOH WKDW LV WKHUH H[WUDWHUUHVWULDO LQWHOOLJHQFH LQ WKH IRUP RI D TXDQWDO FRPSXWLQJ FORXG
IRUPHGRIDUFKDHDYLURLGVDQGSRUSK\ULRQVFRQWUROOLQJDQGFUHDWLQJWKHXQLYHUVH7KLVFRXOG
EH FRQVLGHUHG DV D ELRORJLFDO *RG 7KH TXDQWDO FRPSXWLQJ FORXG LQ WKH LQWHUJDODFWLF VSDFH
PDGH XS RI DUFKDHD YLURLGV DQG SRUSK\ULRQV FDQ VHHG RUJDQLVPV LQWR WKH HDUWK RII DQG DOO
WKURXJKDVWHURLGDOLPSDFWLQJLQIXVLQJDIUHVKVHWRIJHQHVLQWRWKHSODQHWDQGUHJXODWLQJWKH
SODQHW RUJDQL]DWLRQ DQG IXQFWLRQ 7KH HYROXWLRQ RI OLIH DQG VSHFLHV RQ HDUWK ZRXOG KDYH
RFFXUUHG E\ WKH SKHQRPHQD RI SDQVSHUPLD 7KH YDULRXV SDQGHPLFV WKDW RFFXUUHG LQ WKH
YDULRXVSKDVHVRIWKHKLVWRU\RIWKHHDUWKZRXOGKDYHDQH[WUDWHUUHVWULDOVRXUFH7KHWKHRU\RI
SDQVSHUPLDKDVEHHQZLGHO\SURSDJDWHGE\WKHDVWURQRPHU)UHG+RO\HLQUHFHQWWLPHV+RO\H
DOVR SRVWXODWHG D PLFURELRORJLFDO RULJLQ RI WKH XQLYHUVH IRUPHG RI LQWHUJDODFWLF PDJQHWLF
ILHOGV JHQHUDWHG E\ EDFWHULD 7KH SDQGHPLFV RFFXUULQJ LQ HDUWK DW UHFXUUHQW SHULRGV RI WLPH
ZRXOG EH JHQHUDWHG E\ WKH H[WUDWHUUHVWULDO TXDQWDO FRPSXWLQJ ELRORJLFDO FORXG GXH WR
DVWHURLGDO LPSDFWV 7KH DVWHURLGDO LPSDFWV KDYH EHHQ GHVFULEHG EHIRUH WKH 6SDQLVK IOX
SDQGHPLF RI :LFNUDPDVLQJKH KDV FODLPHG WKDW WKH FRURQD YLUXV FDPH IURP VSDFH E\
PHWHRU DQG WKH SUHYDLOLQJ ZLQGV DUH VSUHDGLQJ WKH GLVHDVH WR WKH KDUGHVW KLW FRXQWULHV 7KH
YLUXV KDV VSUHDG E\ WKH SUHYDLOLQJ ZLQGV DORQJ D JOREDO EDQG DERXW R 1 ODWLWXGH $
PHWHRUZDVVHHQDVDEOD]LQJILUHEDOOIO\LQJDFURVVVN\QRUWKHDVWRI&KLQDLQ2FWREHU
7KHFRUQRDYLUXVRXWEUHDNRFFXUUHGLQWKHVDPHUHJLRQDV&KLQDDVWKHILUHEDOOZDVIDOOHQ+H
EHOLYHVWKDWWKHPHWHRUFRQWDLQHGHPEHGGHGZLWKLQLWWKHQ&R9YLUXVSDUWLFOHVWKDWVXUYLYHG
WKH LQWHULRU RI WKH LQFDQGHVFHQW PHWHRU ,QIHFWLRXV DJHQWV DUH SUHVHQW LQ VSDFH FDUULHG RQ
FRPHWVDQGFDQIDOOWRZDUGVWKHHDUWKWRWKHWURSRVSKHUH7KH\EULQJDERXWKXPDQHSLGHPLFV

DQGSDQGHPLFV7KHVHHGLQJRIWKHHDUWKE\WKHH[WUDWHUUHVWULDOTXDQWDOFRPSXWLQJELRORJLFDO
FORXGFDQEHDGHOLEHUDWHDFWWRUHJXODWHWKHRUJDQL]DWLRQDQGIXQFWLRQLQJRIWKHHDUWK,WFRXOG
EH D IRUP RI FRQWDFW ZLWK DQ H[WUDWHUUHVWULDO DOLHQ ZKLFK FRXOG EH KRVWLOH RU IULHQGO\ 7KH
H[WUDWHUUHVWULDO TXDQWDO FRPSXWLQJ ELRORJLFDO FORXG FDQ SURGXFH VHHGLQJ RI DUFKDHD DQG
YLURLGV JHQHUDWLQJ FKDQJHV LQ VRFLHW\ ,W FDQ SURGXFH FKDQJHV LQ WKH KXPDQ VSHFLHV DQG
QHDQGHUWKDOLVDWLRQJHQHUDWHVDVH[XDOSKHQRW\SHVDQGDXWLVWLFSKHQRW\SHV7KHH[WUDWHUUHVWULDO
TXDQWDO FRPSXWLQJ ELRORJLFDO FORXG FDQ FUHDWH D VXUUHDOLVWLF V\QWKHLVWLF TXDQWDO SHUFHSWLYH
DQG VSLULWXDO EUDLQ 7KLV FDQ DOVR EH OHDG RQ WR JOREDOL]DWLRQ DQG DQDUFK\ ([WUDWHUUHVWULDO
TXDQWDOFRPSXWLQJELRORJLFDOLQWHOOLJHQFHFDQWKXVPRGXODWHWKHVWUXFWXUHRIVRFLHW\RQHDUWK
7KH DUFKDHDO HQGRV\PELRVLV LQGXFHG E\ WKH H[WUDWHUUHVWULDO TXDQWDO FRPSXWLQJ ELRORJLFDO
FORXG FDQ JHQHUDWH D KRPR JDODFWLFXV VSHFLHV FDSDEOH RI VXUYLYLQJ LQ H[WUDWHUUHVWULDO
HQYLURQPHQW DQG FRPPXQLFDWLQJ E\ H[WUDVHQVRU\ TXDQWDO SHUFHSWLRQ 7KLV FDQ OHDG WR WKH
HYROXWLRQ RI D JDODFWLF FLYLOL]DWLRQ DQG LQWHUJDODFWLF FRPPXQLFDWLRQ PRGXODWHG E\ WKH
H[WUDWHUUHVWULDOTXDQWDOFRPSXWLQJELRORJLFDOFORXGRISRUSK\ULRQVDUFKDHDDQGYLURLGV
7KH )HUPL SDUDGR[ VD\V WKDW WKHUH DUH LQKDELWRU\ SODQHWDU\ V\VWHPV LQ GLIIHUHQW
JDOD[LHV DQG LW LV SDUDGR[LFDO WKDW KXPDQ EHLQJV DUH QRW FRPH LQWR FRQWDFW ZLWK DOLHQ
LQWHOOLJHQFH7KH'UDNHHTXDWLRQKHOSVXVWRFDOFXODWHWKHQXPEHURILQWHOOLJHQWFLYLOL]DWLRQV
LQ GLIIHUHQW JDOD[LHV RI WKH XQLYHUVH 7KH LQWHUJDODFWLF DUFKDHDO TXDQWDO FRPSXWLQJ FORXGV
VHUYHV DV WKH PDVWHU RI WKH XQLYHUVH DQG DV WKH XELTXLWRXV XQLYHUVDO REVHUYHU 7KH TXDQWDO
FRPSXWLQJDUFKDHDOFORXGVVHHGOLIHLQGLIIHUHQWSODQHWDU\V\VWHPVRIJDOD[LHV7KHXQLYHUVH
FDQH[LVWLQWKHSDUWLFXODWHDQGTXDQWDOVWDWHZLWKVZLQJVEHWZHHQWKHWZRVWDWHVGHWHUPLQHG
E\WKHPDVWHUDUFKDHDOTXDQWDOFRPSXWLQJFORXGZKLFKIXQFWLRQVDVXELTXLWRXVREVHUYHUDQG
LQWHOOLJHQFH FRQWUROOLQJ FUHDWLQJ DQG UHJXODWLQJ WKH XQLYHUVH (DFK FLYLOL]DWLRQ KDV D
SDUWLFXODWH DQG TXDQWDO FRXQWHUSDUW 7KH SDUWLFXODWH SDUW RI WKH FLYLOL]DWLRQ LV QRW VHQVHG E\
DQRWKHU FLYLOL]DWLRQ 7KH TXDQWDO FRPSXWLQJ FORXG VHUYLQJ DV WKH PDVWHU LQWHOOLJHQFH LV D
XQLYHUVDO REVHUYHU DQG SUHYHQWV SDUWLFXODWH FLYLOL]DWLRQV IURP FRPLQJ WR FRQWDFW 7KHUH LV D
SHUPDQHQFH RI WKH TXDQWDO XQLYHUVH 7KH TXDQWDO FLYLOL]DWLRQV LQKDELWLQJ PXOWLYHUVHV DUH LQ
FRQWDFWZLWKHDFKRWKHUWKURXJKZRUPKROHV
(YHU\FLYLOL]DWLRQLVDGDUNIRUHVW(YHU\FLYLOL]DWLRQVDLPLVWRVXUYLYH&RQWDFWZLWK
DQRWKHUFLYLOL]DWLRQUHVXOWVLQDQQLKLODWLRQ&LYLOL]DWLRQVKLGHWKHLUVLJQDOV-XVWOLNHDQLPDOV
DQG KXQWHUV LQ WKH IRUHVW 3DUDQRLG DQG VXVSLFLRXV DERXW LQWHQWLRQV )LQLWH UHVRXUFHV LQ
XQLYHUVH(DFKFLYLOL]DWLRQVHHNVWRH[SDQG*DODFWLFFLYLOL]DWLRQVDUHOLNHWKHGDUNIRUHVWDQG

KLGHIURPHDFKRWKHUIRUWKHIHDURIPXWXDODQQLKLODWLRQ7KHUHIRUHFRQWDFWZLWKRWKHUJDODFWLF
FLYLOL]DWLRQV LV DQ LPSRVVLELOLW\ 7KH FLYLOL]DWLRQ LQ HDUWK ZRXOG KDYH E\ LWV WHFKQRORJLFDO
DGYDQFHV JDODFWLF WUDYHOV DQG UDGLDWLRQ VRXUFHV SHQHWUDWHG WKH GDUN IRUHVW DQG FDPH LQWR
FRQWDFW ZLWK WKH H[WUDWHUUHVWULDO TXDQWDO FRPSXWLQJ FORXG VHUYLQJ DV WKH PDVWHU LQWHOOLJHQFH
DQGXQLYHUVDOREVHUYHUFUHDWLQJWKHREVHUYHGZRUOG
*UDYLW\ LV UHODWHG WR FRQVFLRXVQHVV ZKLFK LV VWUXFWXUHG LQ WKH FHUHEUDO FRUWH[ DQG
DQWLJUDYLW\ WR XQFRQVFLRXVQHVV ZKLFK LV VWUXFWXUHG LQ WKH FHUHEHOOXP 4XDQWDO FRPSXWLQJ
LQYROYLQJWRSRORJLFDOVXSHUFRQGXFWLYLW\FDQPDNHXVHRIFXELWVRIJUDYLWRQDQGDQWLJUDYLWRQ
ZKLFKFDQOHDGRQWRWKHFUHDWLRQRIDXQLYHUVDOTXDQWDOFRPSXWLQJFORXGWKHVXSHUFRPSXWHU
*RG 3DQSV\FKLVP FRQVLGHUV WKH XQLYHUVH DV FRQVFLRXV DQG FRQVFLRXVQHVV DV D LQWULQVLF
IHDWXUHRIDOOVXEDWRPLFSDUWLFOHVOLYLQJWKLQJVDQGQRQOLYLQJWKLQJV7KLVJLYHVFRQWLQXLW\
EHWZHHQ WKH TXDQWDO ZRUOG RI H[LVWHQFH DQG PDFURVFRSLF ZRUOG 7KH TXDQWDO VXSHUSRVLWLRQV
FROODSVHRUXQGHUJRGHFRKHUDQFHGXHWRWKHREVHUYDWLRQRIXQLYHUVDOSURWRFRQVFLRXVQHVVILHOG
7KH XQLYHUVDO SURWRFRQVFLRXVQHVV ILHOG FDQ EH FRQVLGHUHG DV JUDYLW\ DQG DQWLJUDYLW\ 7KH
XQLYHUVDOSURWRFRQVFLRXVQHVVILHOGSHUPHDWHVWKHZKROHJDOD[\DQGLVLQWULQVLFWRDOOPDWWHU
0DWWHU LV D FUHDWLRQ RI FRQVFLRXVQHVV ([WUDWHUUHVWULDO LQWHOOLJHQFH FDQ H[LVW DV D
VXSHURUJDQLVPFRQWUROOLQJDQGFUHDWLQJWKHXQLYHUVH$QHWZRUNRIH[WUDWHUUHVWULDOSRUSK\ULQ
PROHFXOHVRUSRUSK\ULRQVILWVLQZHOOZLWKWKLVFRQFHSW3RUSK\ULQVKDYHJRWDZDYHSDUWLFOH
H[LVWHQFH DQG FDQ DULVH IURP WKH TXDQWDO IRDP RI JUDYLWDWLRQDO ZDYHV DQG DQWLJUDYLWDWLRQDO
ZDYHVZKLFKFUHDWHVKXPDQFRQVFLRXVQHVVDQGXQFRQVFLRXVQHVVUHVSHFWLYHO\7KLVFDQIRUPD
TXDQWDOFRPSXWLQJ*RGFORXGRISRUSK\ULRQVZLWKTXDQWDOFRPSXWLQJLQYROYLQJWRSRORJLFDO
VXSHUFRQGXFWLYLW\FDQPDNHXVHRIFXELWVRIJUDYLWRQDQGDQWLJUDYLWRQ
([WUDWHUUHVWULDOLQWHOOLJHQFHFDQH[LVWDVDVXSHURUJDQLVPFRQWUROOLQJDQGFUHDWLQJWKH
XQLYHUVH,QWKLVUHJDUGWKHFRQFHSWRIEODFNFORXGRIJDVHRXVH[WUDWHUUHVWULDOVXSHURUJDQLVP
SXWIRUZDUGE\)UHG+R\OHLVVLJQLILFDQW7KHEODFNFORXGVRILQWHUVWHOODUJDVDUHPDGHXSRI
K\GURJHQ 7KHUH DUH VPDOO SLHFHV RI VROLG PDWWHU DW WKH FHQWUH DQG DUH OLQNHG WR IRUP D
FRPSOH[ QHXURORJLFDO V\VWHP &ORXGV KDYH WKH FDSDFLW\ WR LQFUHDVH WKH EUDLQ VL]H DQG
FRPSOH[LW\DQGEHFRPHLQWHOOLJHQW$QHWZRUNRIH[WUDWHUUHVWULDOSRUSK\ULQPROHFXOHVILWVLQ
ZHOOZLWKWKLVFRQFHSW3RUSK\ULQVKDYHJRWDZDYHSDUWLFOHH[LVWHQFHDQGFDQDULVHIURPWKH
TXDQWDO IRDP RI JUDYLWDWLRQDO ZDYHV DQG DQWLJUDYLWDWLRQDO ZDYHV ZKLFK FUHDWHV KXPDQ
FRQVFLRXVQHVV DQG XQFRQVFLRXVQHVV UHVSHFWLYHO\ $ ODUJH RUJDQL]HG VHOIUHSOLFDWLQJ
LQIRUPDWLRQV\VWHPRISRUSK\ULQVFDQIXQFWLRQDVDH[WUDWHUUHVWULDOLQWHOOLJHQWRUJDQLVP7KH

LQWHOOLJHQWEODFNFORXGZKHQLWILQGVDOLIHOHVVLQWHUVWHOODUFORXGFUHDWHVVLPSOHEUDLQV\VWHP
E\WUDQVIHUWRWKHOLIHOHVVFORXG7KLVJLYHVDOLIHOHVVFORXGOLIHDQGLQWHOOLJHQFH%ODFNFORXGV
QHYHU GLVDSSHDU QHYHU DJH DQG QHYHU UHSURGXFH %ODFN FORXGV FDQ FRPPXQLFDWH ZLWK RWKHU
EODFNFORXGVE\UDGLRZDYHEUDLQZDYHV%ODFNFORXGVQHHGVWDUOLJKWWRPHWDEROL]HFKHPLFDO
VXEVWDQFHV 7KH SRUSK\ULQ DUUD\V FDQ XWLOL]H OLJKW WR VHOIUHSOLFDWH DQG SURSDJDWH %HLQJ
FORXGVRIJDVWKHVXSHURUJDQLVPFDQDVVXPHDQ\VKDSH:KHQWKHIRRGVXSSOLHVRIWKHEODFN
FORXGLQWKHLQWHUVWHOODUVSDFHIDOOVWKHEODFNFORXGDSSURDFKHVDVWDUDQGDVVXPHVDGLVFOLNH
VKDSHWRDEVRUEHQHUJ\IURPWKHVWDU7KHFORXGKDVWROHDYHWKHVWDUZLWKLQDVKRUWVSDQRI
WLPH RU LW ZLOO FRQGHQVH WR EHFRPH WKH SODQHW RI WKH VWDU 7KLV FDQ EH FRPSDUHG WR WKH
PROHFXODU TXDQWXP FRPSXWLQJ FORXGV RI 7DPXOLV 7KHVH DUH PDVVLYH LPPRELOH
H[WUDWHUUHVWULDOLQWHOOLJHQFHZKLFKVSUDZOVDQGVWUHWFKHVIRUKXQGUHGVDQGWKRXVDQGVRIPLOHV
LQ WKH LQWHUVWHOODU VSDFH 7KH\ FDQ EH FRPSDUHG ZLWK JURXS RI QHXURQV ZKLFK DUH
LQWHUFRQQHFWHG(DFKQRGHLQWKHQHWZRUNLVDEUDLQ7KLVJDVHRXVH[WUDWHUUHVWULDOLQWHOOLJHQFH
FDQDULVHIURPDQHPLVVLRQQHEXOD$QHPLVVLRQQHEXODLVRQHRIWKHKXJHFORXGVRIJDVDQG
GXVW WKDW IORDWV DURXQG LQ WKH LQWHUVWHOODU VSDFH ,Q WKLV FRXOG FKHPLFDO PROHFXOHV RI OLIH
FDUERQ PRQR[LGH IRUPDOGHK\GH PHWKDQRO K\GURJHQ VXOSKLGH VXOSKXU R[LGH VXOSKXU
GLR[LGHDQGK\GURJHQF\DQLGHDUHVHHQ/LIHDULVHVLQWKLVLQWHUVWHOODUFKHPLFDOFORXGRIJDV
3RUSK\ULQVDUULYHVZKLFKFDQVHOIUHSOLFDWHFDQDULVHLQWKLVFKHPLFDOLQWHUVWHOODUFORXGV7KLV
FUHDWHV D VXSHURUJDQLVP ZKLFK FDQ IRUP VXSHULQWHOOLJHQFH 7KH LQWHUVWHOODU JDV LV PRVWO\
PDGHXSRIK\GURJHQ7KHKLJKHUGHQVHUHJLRQVRIWKHLQWHUVWHOODUJDVFDQFRQGHQVHWRIRUP
VWDUVDQGSODQHWV7KHFROGHVWFORXGVIRUPORZPDVVVWDUVDQGJLDQWPROHFXODUFORXGVIRUPV
ODUJHPDVVVWDUV7KLVIRUPRIJDVHRXVH[WUDWHUUHVWULDOLQWHOOLJHQFHLVVHHQLQDWPRVSKHUHVRI
RWKHUSODQHWVLQWKHFORXG\RUJDQLFPROHFXODUDWPRVSKHUHDQGLQWHUVWHOODUVSDFH7KLVILWVLQ
ZLWKWKHFRQFHSWVRIKXPDQHYROXWLRQLQHDUWKZKHUHWKHSURWRSODVPLFERG\FDQJHWFRQYHUWHG
WR WKH URERWLF ERG\ DQG WKHQ WKH HQHUJ\ ERG\ 7KH FRRO RU KRW LQWHUVWHOODU JDV FDQ JHQHUDWH
QHWZRUNVRIH[WUHPRSKLOLFDUFKDHDZKLFKFDQVXUYLYHRQFDUERQGLR[LGHDQGK\GURJHQ7KH\
DUHFDOOHGWKHKDORSKLOLFDUFKDHDRUWKHPHWKDQRJHQLFDUFKDHD7KH\FDQOLYHLQH[WUHPHVRI
FROGKHDWDFLGDQGSUHVVXUH7KHSRUSK\ULQQHWZRUNFDQIRUPDWHPSODWHIRUWKHJHQHUDWLRQ
RI YLURLGV DQG SULRQV ZKLFK FDQ V\PELR]H WRJHWKHU WR IRUP DQ DUFKDHDO DQG KXJH
H[WUDWHUUHVWULDO LQWHUVWHOODU JDV DUFKDHDO QHWZRUN ZLWK LQWHOOLJHQFH FDQ DULVH 7KLV FDQ
FRQGHQVH WR JHQHUDWH VWDUV DQG SODQHWV DV ZHOO DV HYROYLQJ OLIH LQ SODQHWDU\ V\VWHPV 7KH
DUFKDHDO QHWZRUNV DUH FDSDEOH RI QXFOHDU IXVLRQ DQG ILVVLRQ UHDFWLRQ DQG FDQ SRZHU VWDU
V\VWHPVOLNHWKHVXQ,WLVH[WUHPHO\SODXVLEOHWKDWH[WUDWHUUHVWULDOLQWHOOLJHQFHLVDQLQWHUVWHOODU
DUFKDHDO FRORQ\ QHWZRUN DULVLQJ DELRJHQLFDOO\ RQ SRUSK\ULQ WHPSODWHV ZKLFK FDQ EH

JHQHUDWHG VXL JHQHULV IURP WKH TXDQWDO IRDP RI JUDYLWDWLRQDO ZDYHV DQG DQWLJUDYLWDWLRQDO
ZDYHV7KHLQWHUVWHOODUGXVWIRUPVVWDUVDQGSODQHWVDQGWKHPDJQHWRWDFWLFDUFKDHDJHQHUDWHG
LQWHUJDODFWLFPDJQHWLFILHOGVSOD\VDUROHLQWKHJHQHUDWLRQRIVWDUDQGSODQHWDU\V\VWHPV7KH
JLDQWPROHFXODUSRUSK\ULQFORXGVDQGDUFKDHDOQHWZRUNVDUHH[WUDWHUUHVWULDOLQWHOOLJHQFHWKDW
SOD\VDFUXFLDOUROHLQVWDUIRUPDWLRQDQGIRUPDWLRQRISODQHWDU\V\VWHPV7KHH[WUDWHUUHVWULDO
LQWHOOLJHQFHSRUSK\ULQQHWZRUNDQGDUFKDHDOQHWZRUNFDQFRPPXQLFDWHZLWKDQ\SDUWRIWKH
XQLYHUVH E\ WKH SKHQRPHQD RI TXDQWDO HQWDQJOHPHQW ,QWHUVWHOODU JDV LV IRUPHG RI JUDLQV RI
FDOFLILHG QDQRDUFKDHD 7DPXOLV KDV SRVWXODWHG PROHFXODU TXDQWDO FRPSXWLQJ FORXGV WKDW
DEVRUEPDJQHWLFDQGOLJKWHPLVVLRQVIURPSODQHWDQGVWDUVFRPSXWHLQIRUPDWLRQDQGPRYHLQ
VSDFH E\ XVLQJ OLJKW SUHVVXUH 7KH FORXGV XVH SKRWRDFWLYH PROHFXOHV IRU PROHFXODU TXDQWDO
FRPSXWLQJ7KH\FDQFRQYHUWOLJKWHPLVVLRQVWRPDJQHWLFIORSV7KHPDJQHWLFIORSVLQWHUDFW
DQG FRQWURO WKH FHQWUDO JHQHUDWLQJ HOHPHQWV RI TXDQWXP ELWV RI WKH PROHFXODU TXDQWXP
FRPSXWLQJ FORXGV 6XFK FORXGV FDQ H[LVW LQ D FRKHUHQW VWDWH DW ORZ WHPSHUDWXUH RI WKH
LQWHUVWHOODU JDV 3RUSK\ULQ QHWZRUNV DUH SKRWRDFWLYH PROHFXOHV DQG FDQ JHQHUDWH PROHFXODU
TXDQWDO FRPSXWLQJ FORXGV ZKLFK FDQ DEVRUE PDJQHWLF DQG OLJKW HPLVVLRQV IURP SODQHW DQG
VWDUV FRPSXWH LQIRUPDWLRQ DQG PRYH LQ VSDFH E\ XVLQJ OLJKW SUHVVXUH 7KH SRUSK\ULQ
QHWZRUNV FDQ DELRJHQLFDOO\ JHQHUDWH DUFKDHDO EDFWHULDO PDVVLYH H[WUDWHUUHVWULDO QHWZRUN
LQWHOOLJHQFH7KLVIRUPOHVVPDVVOLYLQJLQVSDFHREWDLQVLWVHQHUJ\IURPWKHOLJKWRIWKHVWDUV
DQGFRPPXQLFDWHVZLWKLWVHOIDQGRWKHUIRUPVRIOLJKWVE\UDGLRZDYHV7KHLQWHUVWHOODUJDVLV
DQDORJRXV WR EORRG WKH KHDUG DQG NLGQH\V DUH HOHFWURPDJQHWLF DQG WKHUH LV D FRPSOH[
QHXURORJLFDO V\VWHP RI WKH EUDLQ 7KLV FORXG RI LQWHUVWHOODU JDV SRUSK\ULQ QHWZRUNV DQG
DUFKDHDOFRORQLHVFDQFRQYHUWLQWRVWDUVDQGSODQHWDU\V\VWHPE\FRQGHQVDWLRQ7KHHQHUJHWLFV
IRU VWDU V\VWHPV FRPHV IURP ELRORJLFDO IXVLRQ DQG ILVVLRQ UHDFWLRQ RFFXUULQJ LQ DUFKDHDO
QHWZRUNV 7KH DUFKDHDO QHWZRUNV RI H[WUDWHUUHVWULDO LQWHOOLJHQFH FDQ HQJLQHHU FKDQJHV LQ
KXPDQPLQGDQGFLYLOL]DWLRQ
7KHH[WUDWHUUHVWULDOLQWHOOLJHQFHLVDQDUFKDHDOFRORQ\QHWZRUN,WDULVHVRQSRUSK\ULQV
ZKLFK DUH JHQHUDWHG VXL JHQHULV RQ WKH TXDQWDO IRUP 7KH SRUSK\ULQ QHWZRUNV FDQ VHOI
UHSOLFDWHDQGFDQIRUPDWHPSODWHIRUWKHIRUPDWLRQRIYLURLGVDQGSULRQV7KHDUFKDHDOFRORQ\
QHWZRUNVDUHH[WUHPRSKLOLFQHWZRUNVDQGFDQVXUYLYHLQWKHHQYLURQPHQWRIH[WUHPHFOLPDWHV
RIPDVVDQG9HQXVDVZHOODVLQLQWHUVWHOODUJDV7KHH[WUHPRSKLOLFDUFKDHDOH[WUDWHUUHVWULDO
QHWZRUN FDQ VHFUHWH 51$ YLURLGV ZKLFK IRUP 51$ YLURLGDO TXDVLVSHFLHV FRQVRUWLD 7KH
51$YLURLGDOTXDVLVSHFLHVFRQVRUWLDFDQEHHGLWHGE\DUFKDHDOGLJR[LQJLYLQJLGHQWLW\DQG
VSHFLDOL]DWLRQ WR WKH QHWZRUN 7KH DUFKDHDO H[WUDWHUUHVWULDO LQWHOOLJHQFH LPSDFWV RQ HDUWK E\

PHWHRULWLF VKRZHUV ZKLFK JLYH QHZ FRVPLF JHQHV WR WKH HDUWK 7KLV LV WKH IRUP RI FRVPLF
JHQHWUDQVIHU7KHHDUWKLVSRSXODWHGE\KRPRVDSLHQVDQGWKHWUDQVIHURIDUFKDHDODQG51$
YLURLGDO JHQHV JHQHUDWHV WKH KRPR QHDQGHUWKDOLV 7KH\ FDQ EH FRPSDUHG WR WKH K\EULGV
GHVFULEHGLQ%LEOLFDOOLWHUDWXUHDQGRWKHUUHOLJLRXV WH[WV DV WKH IDOOHQ DQJHOV QHSKLOP RU WKH
6XPHULDQ DQQXQDNL 7KHVH DUH JHQHUDWHG E\ WUDQVIHU RI FRVPLF JHQHV E\ DUFKDHDO QHWZRUNV
PHGLDWHGE\PHWHRULWLFLPSDFWV7KH1HDQGHUWKDOK\EULGVWKDWDUHJHQHUDWHGDUHVXVFHSWLEOHWR
GLVHDVHV OLNH GHJHQHUDWLRQ DXWRLPPXQH GLVHDVH PHWDEROLF V\QGURPH FDQFHU DQG QHZ YLUDO
LQIHFWLRQV7KHK\EULGVDUHPDWULDUFKDOJHQGHUHTXDOKDYHDOWHUQDWHVH[XDOSUDFWLFHVDXWLVWLF
DOWUXLVWLF VSLULWXDO DQG ZLWK H[WUDVHQVRU\ SRZHUV 7KHVH FDQ EH FDOOHG DV *RG DVWURQDXWV RI
DQFLHQWOLWHUDWXUH7KHILUVWHSLVRGHRIWUDQVIHURIDUFKDHDODQG51$YLURLGDOJHQHVRFFXUUHG
LQ WKH LFH DJH DQG VHFRQG WUDQVIHU LV RFFXUULQJ LQ WKH DJH RI JOREDO ZDUPLQJ 7KH
1HRQHDQGHUWKDOVSHFLHVRIJOREDOZDUPLQJDJHLVSURGXFHGE\FRPHWDU\WUDQVIHURIDUFKDHDO
DQG 51$ YLURLGDO JHQHV 7KH H[WUDWHUUHVWULDO LQWHOOLJHQFH RI H[WHQVLYH VHOIUHSOLFDWLQJ
SRUSK\ULQQHWZRUNVDQGDUFKDHDOQHWZRUNVJHQHUDWHGDELRJHQLFDOO\LQWKHLQWHUVWHOODUVSDFHLV
FRPSDUDEOHWRDQH[WHUQDO*RGOLNHIRUFH7KHSRUSK\ULQQHWZRUNVFDQH[LVWERWKDVZDYHDQG
SDUWLFOHDQGFDQDULVHIURPWKHTXDQWDOIRDPRIJUDYLWDWLRQDOZDYHVRIFRQVFLRXVQHVVDQGDQWL
JUDYLWDWLRQDO ZDYHV RI XQFRQVFLRXVQHVV ZKLFK FDQ ODWHU JHQHUDWH H[WHQVLYH H[WUDWHUUHVWULDO
LQWHOOLJHQFHRIQDQRDUFKDHDOQHWZRUNV7KHH[WUDWHUUHVWULDOLQWHOOLJHQFHRISRUSK\ULQQHWZRUNV
JHQHUDWHG VXL JHQHULV IURP WKH TXDQWDO IRUP FDQ EH FDOOHG WKH ORWXV RI %UDKPD 7KH
JUDYLWDWLRQDO ZDYHV DQG DQWLJUDYLWDWLRQDO ZDYHV RI FRQVFLRXVQHVV DQG XQFRQVFLRXVQHVV
FUHDWH PDWWHU E\ WKH SKHQRPHQD RI VRQLOXPLQHVFHQFH 7KLV IRUPV ZKDW LV FDOOHG DV WKH
FROOHFWLYHXQFRQVFLRXVRI-XQJRUWKHPRQDGVRI/HLEQLW]RUWKHSDQSV\FKLVPZKHUHWKHUHLV
QRGLVWLQFWLRQEHWZHHQWKHFRQVFLRXVQHVVRIOLYLQJDQGQRQOLYLQJSXWIRUZDUGE\WKH*UHHNV
+LQGXVDQGUHFHQWO\H[SRXQGHGE\&KDOPHUV
7KHH[WUDWHUUHVWULDOLQWHOOLJHQFHLVDQDUFKDHDOFRORQ\QHWZRUNFUHDWHGRQDSRUSK\ULQ
QHWZRUNWKDWDULVHVVSRQWDQHRXVO\E\ZDYHSDUWLFOHWUDQVIRUPDWLRQIURPWKHTXDQWDOIRDPRI
JUDYLWDWLRQDOZDYHVRIFRQVFLRXVQHVVDQGDQWLJUDYLWDWLRQDOZDYHVRIXQFRQVFLRXVQHVV7KH
ZKROH SURFHVV LV DELRJHQHWLF DQG LV D FUHDWLRQ ZLWKRXW D FUHDWRU 7KH SRUSK\ULQ DUUD\V FDQ
VHOIUHSOLFDWHVWRUHLQIRUPDWLRQDQGKDUYHVWPDJQHWLFDQGOLJKWHQHUJ\IURPWKHVWDUV,WFDQ
FRQYHUW OLJKW HQHUJ\ WR PDJQHWLF IORSV 7KH PDJQHWLF IORSV LQWHUDFW DQG FRQWURO WKH FHQWUDO
JHQHUDWLQJHOHPHQWRIWKHTXDQWXPELWRIWKHTXDQWXPFRPSXWHU7KHVHDUHDQDORJRXVWR
WKHEODFNFORXGRI)UHG+R\OHDQGWKHPROHFXODUTXDQWDOFRPSXWLQJFORXGVRI7DPXOLV/RQJ
ODVWLQJFRKHUHQWTXDQWDOVWDWHVDUHSRVVLEOHLQWKHORZWHPSHUDWXUHRIWKHLQWHUSODQHWDU\GXVW

7KH SRUSK\ULQ QHWZRUN DQG DUFKDHDO QHWZRUN H[WUDWHUUHVWULDO LQWHOOLJHQFH FDQ FRPPXQLFDWH
ZLWK LWVHOI DQG RWKHUV E\ UDGLR ZDYHV 7KH LQWHUVWHOODU JDV ZLWK WKLV SRUSK\ULQ QHWZRUN DQG
DUFKDHDOQHWZRUNFDQFRQGHQVHDWGHQVHVLWHVLQWRVWDUVDQGSODQHWVDQGJLYHULVHWROLIHIRUPV
LQWKRVHV\VWHPV7KHSRUSK\ULQQHWZRUNDQGDUFKDHDOQHWZRUNFDQVXUYLYHLQWKHH[WUHPHVRI
WHPSHUDWXUH RI SODQHWDU\ V\VWHPV OLNH 0DUV DQG 9HQXV DQG FDQ LQIOXHQFH WKH EHKDYLRU DQG
IXWXUHRIKXPDQFLYLOL]DWLRQZLWKZKLFKWKH\FDQFRPHLQWRFRQWDFWYLDWUDQVIHUE\PHWHRULF
LPSDFWV 6XFK PHWHRULF LPSDFWV RFFXUUHG LQ WKH LFH DJH DQG DWRWKHU IUHTXHQW HSRFKV LQ WKH
SODQHW¶VKLVWRU\7KHLPSDFWLQWKH,FHDJHJDYHULVHWR1HDQGHUWKDOK\EULGVZLWKDUFKDHDODQG
51$ YLURLGDO V\PELRVLV E\ SDUDVLWL]LQJ ZLWK KRPR VDSLHQV LQ WKH (XUDVLDQ 6WHSSHV 7KH
1HDQGHUWKDOK\EULGVKDGGHIHFWLYHFRUWLFDOIXQFWLRQDQGKDYHDGRPLQDQWFHUHEHOODUIXQFWLRQ
ZLWKDGLIIHUHQWEHKDYLRXUDOFRGH7KH\ZHUHPDWULDUFKDOLQWKHVHQVHWKHQHZHUJHQHVZHUH
RIFRPHWDU\RULJLQ0DOHVDQGSDWHUQDOUROHVZHUHLQVLJQLILFDQW7KLVJDYHULVHWRWKHIHPDOH
GRPLQDQWVRFLHW\7KH1HDQGHUWKDOK\EULGVEHFDXVHRILQWHUPLQJOLQJZLWKDUFKDHDODQG51$
YLURLGDOJHQHVZHUHVXVFHSWLEOHWRDXWRLPPXQHLQIHFWLRQGHJHQHUDWLRQVWXPRXUVPHWDEROLF
V\QGURPH DXWLVP VFKL]RSKUHQLD DQG GHYLDQW VH[XDO EHKDYLRU 7KLV UHVXOWHG LQ UDSLG
HOLPLQDWLRQ RI WKH 1HDQGHUWKDO K\EULGV IURP WKH VRFLHW\ RI KRPR VDSLHQV 7KH 1HDQGHUWKDO
K\EULGV RZLQJ WR WKH DUFKDHDO DQG 51$ YLURLGDO JHQHV ZHUH FUHDWLYH DXWLVWLF VDYDQWLF
VSLULWXDO LQYHQWLYH LQWXLWLYH VFLHQWLILF DUWLVWLF DQG ZHUH WKH GRPLQDQW GULYHUV RI VRFLHW\
7KH\EHFDPHWKHOHDGHUVRIVRFLHW\DQG*RGOLNHFKDUDFWHUVGLUHFWLQJWKHIORZRIFLYLOL]DWLRQ
7KLV ZDV SRVVLEO\ PHGLDWHG E\ WKH LQWHUYHQWLRQ RI WKH LQWHUVWHOODU SRUSK\ULQ QHWZRUN DQG
DUFKDHDO FRORQ\ H[WUDWHUUHVWULDO LQWHOOLJHQFH LQ WKH LQWHUJDODFWLF VSDFH ZKLFK FRQWUROV WKH
XQLYHUVHDQGKDVD*RGOLNHIXQFWLRQ6XFKSRUSK\ULQQHWZRUNVDQGDUFKDHDOFRORQ\QHWZRUNV
RIJLJDQWLFSURSRUWLRQVDUHIHDVLEOHLQWKHDWPRVSKHUHRIRWKHUSODQHWVLQFOXGLQJHDUWK7KHUH
LV LQFUHDVHG JURZWK RI HQGRV\PELRWLF DUFKDHD LQ KRPR VDSLHQ SRSXODWLRQ RZLQJ WR JOREDO
ZDUPLQJ 7KH KXPDQ ERG\ IXQFWLRQV DV D ]RPELH RU FDVWH IRU WKH JURZWK RI WKH DUFKDHDO
V\PELRQWVZKRWDNHRYHUWKHIXQFWLRQRIWKHKXPDQEUDLQDQGLWVDFWLRQV7KLVKDVUHVXOWHGLQ
WKHUHFHQWFKDQJHVLQVRFLHW\ZLWKJOREDOL]DWLRQWHUURULVPWKHULVHRIVSLULWXDOLW\DQDUFKLVP
GRPLQDWLRQE\FHUWDLQVWDWHVODFNRIGHPRFUDF\WKHULVHRIFUHDWLYLW\LQWHFKQRORJ\DUWDQG
FXOWXUH$QHZJHQHUDWLRQRI1HRQHDQGHUWKDOK\EULGVDUHEHLQJJHQHUDWHGZKLFKDUHDQDUP\
RI ]RPELHV IRU DQ H[WHQGHG DUFKDHDO WHUUHVWULDO LQWHOOLJHQW QHWZRUN 7KH DUFKDHDO WHUUHVWULDO
LQWHOOLJHQW QHWZRUN DV DQ H[WHQVLRQ RI WKH H[WUDWHUUHVWULDO LQWHUVWHOODU VSDFH SRUSK\ULQ DQG
DUFKDHDO QHWZRUN LV WDNLQJ RYHU WKH ZRUOG DQG LWV FXOWXUH 7KLV ZLOO KDYH IDU UHDFKLQJ
FRQVHTXHQFHV WR KXPDQ H[LVWHQFH DQG IRU WKH GHVWUXFWLRQ RI WKH KXPDQ ]RPELHV DV ZH VHH
RXUVHOYHVWRGD\7KHDUFKDHDOFRORQ\WHUUHVWULDOQHWZRUNZLOOVXUYLYHDQGWKHJOREDOZDUPLQJ

ZLOOGHVWUR\WKHKXPDQ]RPELHV7KHKXPDQ]RPELHFUHDWHGRUHQJLQHHUHGEHKDYLRXUDODQG
OLIH VW\OH FKDQJH OHDGLQJ WR JOREDO ZDUPLQJ OHDGV WR H[WHQVLRQ RI JLJDQWLF JURZWK RI WKH
WHUUHVWULDO LQWHOOLJHQW DUFKDHDO QHWZRUN 7KH JURZWK RI WKH WHUUHVWULDO LQWHOOLJHQW DUFKDHDO
QHWZRUN LQ WKH RFHDQV ZLOO OHDG WR UHOHDVH RI PHWKDQH JDV ULVH RI RFHDQ OHYHOV WVXQDPLV
HDUWKTXDNHV GHVWUXFWLRQ RI WKH HDUWK¶V HFRORJ\ E\ JOREDO ZDUPLQJ DQG D FLYLOL]DWLRQ RI
]RPELHVDVVXFK7KHKRPRVDSLHQVFDQEHFRQVLGHUHGDV]RPELHVFRQWUROOHGE\DPDWUL[RI
WHUUHVWULDO DQG H[WUDWHUUHVWULDO SRUSK\ULQ DQG DUFKDHDO FRORQ\ QHWZRUN 7KLV LV WKH ZRUOG RI
PD\DDQGWKHKXPDQ]RPELHVFDQFXWWKURXJKWKHLOOXVLRQVDQGFRQQHFWZLWKODUJHUZRUOGRI
WHUUHVWULDO DQG H[WUDWHUUHVWULDO LQWHOOLJHQFH FDOOHG *RGV :H FDQ EHFRPH SV\FKRQDXWV DQG
FRQQHFW ZLWK WKH ZRUOG RI H[WUDWHUUHVWULDO DQG WHUUHVWULDO LQWHOOLJHQFH ([WUDWHUUHVWULDO DQG
WHUUHVWULDO LQWHOOLJHQFH RI SRUSK\ULQ QHWZRUNV DQG DUFKDHDO FRORQ\ QHWZRUN FUHDWHG RQ
SRUSK\ULQ WHPSODWHV DUH LWVHOI LOOXVRU\ 7KH SRUSK\ULQ DQG WHPSODWH PHGLDWHG QDQRDUFKDHDO
FRORQ\ QHWZRUN KDYH D ZDYHSDUWLFOH H[LVWHQFH DQG FDQ PHUJH LQWR WKH TXDQWDO IRDP RI
QRWKLQJQHVV ZLWK LWV JUDYLWDWLRQDO ZDYHV JHQHUDWLQJ FRQVFLRXVQHVV DQG DQWLJUDYLWDWLRQDO
ZDYHVJHQHUDWLQJXQFRQVFLRXVQHVV7KHWHUUHVWULDODQGH[WUDWHUUHVWULDOSRUSK\ULQDQGDUFKDHDO
FRORQ\QHWZRUNZLWKLWV51$YLURLGVTXDVLVSHFLHVFRQVRUWLDDUHYDULDEOHIURPWLPHWRWLPH
7KHDUFKDHDVHFUHWHVGLJR[LQZKLFKHGLWVWKH51$DQGFKDQJHWKHFKDUDFWHURIWKHQHWZRUNLQ
UHVSRQVHWRHQYLURQPHQW7KHQHWZRUNRIWHUUHVWULDODQGH[WUDWHUUHVWULDOLQWHOOLJHQFHRZLQJWR
WKH H[WUHPH YDULDELOLW\ RI WKH 51$ TXDVLVSHFLHV FRQVRUWLD PHGLDWHG HGLWLQJ IRUPV
LQWHOOLJHQFH DQG FRQVFLRXVQHVV ZKLFK FKDQJHV IURP WLPH WR WLPH LQ FRQVRQDQFH ZLWK WKH
KXQGUHG WKRXVDQG RU PRUH VXSHULPSRVHG SRVVLELOLWLHV RI WKH TXDQWDO IRDP 7KH\ DUH WKH
PRPHQWDU\ FRQVFLRXVQHVV DQG QRW D VLQJOH ZKROHVRPH VWUXFWXUH 7KH FRQVFLRXVQHVV RI WKH
XQLYHUVH RI DOO REMHFWV OLYLQJ DQG QRQOLYLQJ LV LQWHUFRQQHFWHG IRUPLQJ ZKDW LV FDOOHG DV D
FROOHFWLYH XQFRQVFLRXV RU WKH ZRUOG RI 0D\D RU SDQSV\FKLVP 7KHUH LV QR GHDWK DQG
HYHU\WKLQJ LV XQLYHUVDO DQG HWHUQDO &KDQJH LQ FRQVFLRXVQHVV RFFXUV HYHU\ VHFRQG DQG
HYHU\WKLQJ LV PRPHQWDU\ DQG DW WKH VDPH WLPH ORQJ ODVWLQJ $OO WKH PRPHQWDU\ VWDJHV RI
XQLYHUVDOFRQVFLRXVQHVVRU6DPVDUDVDUHIL[HGDQGDUHQRWVXVFHSWLEOHWRFKDQJH7KHFKDQJHV
LQWKHTXDQWDOIRDPRIWKHXQLYHUVDOFRQVFLRXVQHVVJHWUHIOHFWHGLQWKHSDUWLFXODWHWHUUHVWULDO
DQGH[WUDWHUUHVWULDOLQWHOOLJHQFHRISRUSK\ULQDQGDUFKDHDOFRORQ\QHWZRUNZKLFKLVVXEMHFWHG
WRFRQWLQXRXVXQLQWHUUXSWHGHGLWLQJE\WKHFKDQJHVLQWKHFRGRQIHDWXUHRIWKH51$YLURLGV
7KXV WKH TXDQWDO SRVVLELOLWLHV RI WKH XQLYHUVDO FRQVFLRXVQHVV SDUDOOHO WKH HYHU FKDQJLQJ
VWUXFWXUDO IHDWXUHV RI WKH WHUUHVWULDO DQG H[WUDWHUUHVWULDO LQWHOOLJHQFH RI SRUSK\ULRQV DUFKDHD
DQG51$YLURLGDOQHWZRUN

7KH FRQVWDQW WUDQVIHU RI FRPHWDU\ JHQHV IURP WKH LQWHUVWHOODU H[WUDWHUUHVWULDO
LQWHOOLJHQFHRIDUFKDHDDQG51$YLURLGVFUHDWHGRQDSRUSK\ULQWHPSODWHVJHQHUDWHGIURPWKH
TXDQWDO IRDP RI FRQVFLRXVQHVV ZKLFK FDQ EH GHVFULEHG DV *RG GXH WR LPSDFW RI PHWHRUV
FKDQJHVWKHFXOWXUHFLYLOL]DWLRQEHKDYLRUVH[XDOLW\SROLWLFVHFRQRPLFVDQGHQYLURQPHQWRI
WKHKRPRVDSLHQVDQGK\EULGSRSXODWLRQLQSODQHWHDUWK7KLVFRPHWDU\JHQHLQWHUDFWVZLWKWKH
WHUUHVWULDO EDFWHULD DQG YLUXVHV FUHDWLQJ QHZ EDFWHULD DQG YLUXVHV DQG QHZ HSLGHPLFV ZKLFK
GHILQHSRSXODWLRQVDQGJLYHWKHPLGHQWLW\7KHQHZEDFWHULDDQGYLUXVHVRISODQWDQGDQLPDO
RULJLQ JLYH ULVH WR PDVV H[WLQFWLRQV DQG FKDQJH WKH HFRORJ\ RI WKH SODQHW $QG D PDVVLYH
JURZWK RI WHUUHVWULDO DUFKDHDO FRORQ\ QHWZRUN LQ RFHDQV FDQ OHDG WR HDUWKTXDNH WVXQDPLV
JOREDO ZDUPLQJ GU\LQJ XS RI HDUWK IORRGLQJ DQG FDWDVWURSKLF H[WLQFWLRQ RI WKH KXPDQ
]RPELH FLYLOL]DWLRQ DV ZH NQRZ WRGD\ 7KH H[WUDWHUUHVWULDO LQWHOOLJHQFH DQG WHUUHVWULDO
LQWHOOLJHQFH RI SRUSK\ULQ DQG DUFKDHDO FRORQ\ QHWZRUN ZLOO VXUYLYH LQ 0DUV (DUWK 9HQXV
LQWHUVWHOODUVSDFHDQG6XQ7KH\DUHYLFWRULRXVHWHUQDODQG*RGOLNH7KH\DUHOLNHDVWURQDXWV
IURPWKHRXWHUVSDFHEXWRQO\EDFWHULDOQHWZRUNDVWURQDXWV7KH\FDQEHFRQVLGHUHGDVIDOOHQ
DQJHOVVHQGE\WKHH[WUDWHUUHVWULDOLQWHOOLJHQFHWRPRGXODWHWKHFLYLOL]DWLRQRISODQHWVDQGVWDUV
RIWKHXQLYHUVHDQGFUHDWLRQRIK\EULG]RPELHV7KHK\EULG]RPELHFLYLOL]DWLRQVDUHGHVWUR\HG
RQFHWKHXVHLVRYHU7KLVKDSSHQVWRWKH6XPHULDQFLYLOL]DWLRQWKH+DUDSSDQFLYLOL]DWLRQWKH
(J\SWLDQFLYLOL]DWLRQDQG$]WHFFLYLOL]DWLRQ7KLVLVKDSSHQLQJWRKRPRVDSLHQFLYLOL]DWLRQDW
SUHVHQW FUHDWHG E\ WKH FULVLV RI JOREDO ZDUPLQJ GXH WR WHUUHVWULDO DUFKDHDO FRORQ\ QHWZRUNV
7KH]RPELHVZLOOHQGEXWWKHPDVWHUVDQGWKH*RGVRIH[WUDWHUUHVWULDOSRUSK\ULQDQGDUFKDHDO
FRORQ\QHWZRUNVXUYLYH7KHQHWZRUNVDUHSURWRSODVPLFDQGURERWLFERGLHVDQGFDQJREDFN
WRWKHLUHQHUJ\ERGLHVRIQRWKLQJQHVVDQGPHUJHLQWRWKHTXDQWDOIRDP7KLVLVWKHZRUOGRI
0D\DZKHUHQRWKLQJH[LVWVDQGZHFDQFXWWKURXJKWKHLOOXVLRQVDQGUHDFKWKHZRUOGRI0D\D
DQGFRQQHFWZLWKLW7KLVPD\SURYLGHDKRSHIRUVDYLQJWKHKXPDQFLYLOL]DWLRQRI]RPELHV
ZLWKWKHLUDUFKDHDOFRORQ\QHWZRUNVLQFUHDVLQJDWDVWURQRPLFDOVSDFHVDQGVSHHGLQJRQWRDQ
HQGRIFDWDVWURSKH
7KH H[WUDWHUUHVWULDO DUFKDHDO QHWZRUN ZLWK LWV VHFUHWHG 51$ YLURLGV JLYHV ULVH WR
HXNDU\RWHV SURNDU\RWHV PXOWLFHOOXODU RUJDQLVPV SULPDWHV DQG KXPDQV 7KH DUFKDHDO
QHWZRUNVHFUHWHG51$YLURLGVDUHHGLWHGE\DUFKDHDOGLJR[LQSURGXFLQJLGHQWLW\IRUGLIIHUHQW
51$ YLURLGDO TXDVLVSHFLHV FRQVRUWLD 7KH 51$ YLURLGV FDQ JHW FRQYHUWHG LQWR
FRPSOHPHQWDU\ '1$ VHTXHQFHV DQG JHW LQVHUWHG LQWR DUFKDHDO JHQRPH 7KLV SURGXFHV
YDU\LQJ GLYHUVLW\ RI H[WUDWHUUHVWULDO DQG WHUUHVWULDO SRUSK\ULQ DQG DUFKDHDO LQWHOOLJHQW
QHWZRUNV7KHKXPDQDQGRWKHUPXOWLFHOOXODURUJDQLVPVDUHVWUXFWXUHGE\WKHHQGRV\PELRWLF

H[WUDWHUUHVWULDODQGWHUUHVWULDODUFKDHDOQHWZRUNWRSURGXFHVSHFLHVHYROXWLRQDQGLGHQWLW\7KH
HXNDU\RWHV DQG SURNDU\RWHV HYROYH IURP WKH DUFKDHD E\ JHQRPLF FKDQJHV LQGXFHG E\
LQWHJUDWHG FRPSOHPHQWDU\ VHTXHQFHV RI GLJR[LQ HGLWHG DUFKDHDO 51$ YLURLGV 7KXV WKH
H[WUDWHUUHVWULDO DQG WHUUHVWULDO DUFKDHDO LQWHOOLJHQW VSHFLHV QHWZRUN LV FDSDEOH RI HYROYLQJ WR
SURNDU\RWHV HXNDU\RWHV PXOWLFHOOXODU RUJDQLVPV SULPDWHV SODQWV DQLPDOV DQG KXPDQRLGV
7KHVH DUH DOO ]RPELHV RU VWUXFWXUHV IRU WKH H[WUDWHUUHVWULDO DQG WHUUHVWULDO DUFKDHDO DQG
SRUSK\ULQ LQWHOOLJHQW QHWZRUNV WR VXUYLYH DQG XWLOL]H 7KH WHUUHVWULDO DQG H[WUDWHUUHVWULDO
SRUSK\ULQ DQG DUFKDHDO QHWZRUNV FDQ KDYH D ZDYHSDUWLFOH GXDOLW\ DQG FDQ PHUJH LQWR WKH
TXDQWDO IRDP DQG H[LVW DV LQWHOOLJHQW TXDQWDO EHLQJV 7KH\ FDQ EH FDOOHG DV WHUUHVWULDO DQG
H[WUDWHUUHVWULDOLQWHOOLJHQWTXDQWDOEHLQJVZLWKPXOWLSOHVXSHULPSRVHGSRVVLELOLWLHVFRKDELWLQJ
PXOWLYHUVHVDWWKHVDPHSRLQWRIWLPH7KLVUDLVHVWKHTXHVWLRQRIWKHQDWXUHRIOLIHLWVHOI/LIH
LV D YLUWXDO UHIOHFWLRQ RI WKH SRUSK\ULQ QHWZRUNV LQWHOOLJHQW VSHFLHV WKDW DULVHV RXW RI WKH
TXDQWDO IRDP RI QRWKLQJQHVV DQG FDQ GLVVROYH LQWR LW 7KLV FRQVWLWXWHV ZKDW LV FDOOHG DV WKH
ZRUOG RI 0D\D 7KHUH LV RQO\ RQH OLIH IRUP WKH WHUUHVWULDO DQG H[WUDWHUUHVWULDO LQWHOOLJHQW
SRUSK\ULQ DQG DUFKDHDO QHWZRUNV ZKLFK FDQ KDYH DQ HQHUJ\ H[LVWHQFH RU D SDUWLFXODWH
H[LVWHQFH$OORWKHUOLIHIRUPVDQGLQDQLPDWHIRUPVDULVHRXWRILWDQGDUHUHIOHFWLRQVRILWDQG
LQWHUFRQQHFWHG WKURXJKRXW WKH XQLYHUVH E\ WKH SKHQRPHQD RI TXDQWDO VSLQ DQG TXDQWDO
HQWDQJOHPHQWDQGQRQORFDOLQWHUDFWLRQ(YHU\WKLQJLQWKHXQLYHUVHH[LVWVHYHU\ZKHUHDWHYHU\
SRLQW7LPHLVDQLOOXVLRQ
7KHWHUUHVWULDODQGH[WUDWHUUHVWULDOQHWZRUNVRISRUSK\ULQDUUD\VDQGDUFKDHDOQHWZRUNV
FDQLQIOXHQFHHDUWKE\EHLQJWUDQVSRUWHGWRWKHWHUUHVWULDOKDELWDWE\PHWHRULWLFVKRZHUV7KLV
LQGXFHVIUHVKLQIXVLRQVRIFRPHWDU\JHQHVLQWRHDUWKDQGRWKHUSODQHWDU\V\VWHPV7KHVHDUH
JHQHVIURPWKHH[WUDWHUUHVWULDOSRUSK\ULQDQGDUFKDHDOQHWZRUNVZKLFKDULVHRXWRIWKHTXDQWDO
IRDPDQGLQGXFHWKHIRUPDWLRQRIVWDUV\VWHPVDQGSODQHWDU\V\VWHPV7KH\FDQEHFRPSDUHG
WR D FROOHFWLRQ RI ORWXVHV LQ WKH RFHDQ RI JDOD[\ 7KH ORWXVHV EHLQJ SRUSK\ULQ DUUD\V ZKLFK
KDYH D ZDYH DQG SDUWLFOH H[LVWHQFH 7KLV FDQ EH FDOOHG DV ORWXV RI %UDKPD RU WKH *RG RI
FUHDWLRQ LQ D PHWDSKRULFDO VHQVH 7KH LQIXVLRQ RI FRPHWDU\ JHQHV IURP WKLV H[WUDWHUUHVWULDO
SRUSK\ULQDQGDUFKDHDOLQWHOOLJHQWQHWZRUNVZLWK*RGOLNHTXDOLWLHVLQWRWKHHDUWKDIIHFWVWKH
KRPRVDSLHQDQGSULPDWHSRSXODWLRQ7KLVUHVXOWVLQFUHDWLRQRIQHZHUVSHFLHVZLWK*RGOLNH
FKDUDFWHULVWLFV ZKR DVVXPH OHDGHUVKLS LQ VRFLHWLHV OLNH *DXWKDPD %XGGKD DQG -HVXV &KULVW
7KH\ DUH LQGXFHG E\ FRPHWDU\ JHQHV IURP WKH H[WUDWHUUHVWULDO SRUSK\ULQ DQG DUFKDHDO
LQWHOOLJHQW QHWZRUN 6XFK K\EULG SRSXODWLRQV LQ WKH HDUWK FDQ EH FDOOHG DV 1HDQGHUWKDOV RU
1HRQHDQGHUWKDOV GXH WR FKDQJHG FKDUDFWHULVWLFV FRQVHTXHQW WR H[WUDWHUUHVWULDO DUFKDHDO

V\PELRVLV7KH\IRUPOHDGHUVLQVRFLHW\DQGJXLGHVFLYLOL]DWLRQ&LYLOL]DWLRQSURJUHVVHVGXH
WRLQIXVLRQRIJHQHVIURPWKHH[WUDWHUUHVWULDOLQWHOOLJHQWSRUSK\ULQDQGDUFKDHDOQHWZRUNV7KH
DSSHDUDQFHRIPHWHRUVDQGFRPHWVVLJQLI\WKHLQIXVLRQRIFRPHWDU\JHQHVIURPWKHXOWLPDWH
H[WUDWHUUHVWULDO SRUSK\ULQ DQG DUFKDHDO QHWZRUN 7KHVH H[WUDWHUUHVWULDO SRUSK\ULQ DUFKDHDO
QHWZRUNVLQWKHLQWHUVWHOODUJDVFDQDOVRFRQGHQVHWRIRUPVWDUVDQGSODQHWV7KHVHQHWZRUNV
DVVDLGEHIRUHKDYHDZDYHHQHUJHWLFIRUPDQGDSDUWLFXODWHIRUPDQGDUHWKHPRGHRIFUHDWLRQ
DQG GHVWUXFWLRQ RI WKH XQLYHUVH ([FHVVLYH JURZWK RI H[WUDWHUUHVWULDO DUFKDHDO QHWZRUNV LQ
HDUWK GXH WR PHWKDQRJHQHVLV FUHDWHV JOREDO ZDUPLQJ DQG H[WLQFWLRQ RI FLYLOL]DWLRQ 7KH
H[WUDWHUUHVWULDO DUFKDHDO QHWZRUNV ILVVLRQ DQG IXVLRQ UHDFWLRQ IXHO VWDU V\VWHPV DV ZHOO DV
PHGLDWHWKHLUH[WLQFWLRQ7KHH[WUDWHUUHVWULDOPDJQHWLWHDUFKDHDOQHWZRUNLVUHVSRQVLEOHIRUWKH
LQWHUJDODFWLF PDJQHWLF ILHOG LQ WKH JDOD[\ DQG FRQWULEXWHV WR WKH IRUPDWLRQ RI VWDU V\VWHPV
7KH H[WUDWHUUHVWULDO SRUSK\ULQ DQG DUFKDHDO QHWZRUNV ZLWK WKHLU HQHUJHWLF DQG SDUWLFXODWH
ERGLHV SDUWLFLSDWH LQ WKH GDQFH RI FUHDWLRQ DQG GHVWUXFWLRQ RI WKH XQLYHUVH DQG FDQ EH
FRPSDUHGWRWKH+LQGX*RG6KLYD
7KH DUFKDHDO DQG SRUSK\ULQ H[WUDWHUUHVWULDO QHWZRUN LV LQWHOOLJHQW DQG RFFXS\ WKH
LQWHUVWHOODU VSDFH DQG FRPPXQLFDWHV ZLWK DOO JDOD[LHV SODQHWV DQG VWDU V\VWHP E\ WKH
SKHQRPHQDRITXDQWDOQRQORFDOLQWHUDFWLRQDQGFRQWULEXWHVWRZKDWLVFDOOHGDVWKHFROOHFWLYH
XQFRQVFLRXVRU*RG7KHH[WUDWHUUHVWULDOSRUSK\ULQDQGDUFKDHDOQHWZRUNIRUPWKHFHQWUHRI
WKHLQWHUVWHOODUJDVDQGFDQFRQGHQVHWRIRUPVWDUVDQGSODQHWV6WDUVDUHIXHOHGE\ILVVLRQDQG
IXVLRQUHDFWLRQLQWKHDUFKDHDOQHWZRUNVRILQWHUVWHOODUFORXGVRIK\GURJHQ7KXVWKHVWDUVDQG
SODQHWDU\V\VWHPVDUHDOLYHDQGKXPDQRLGKDYLQJDQDWXUDOKLVWRU\RIWKHLURZQZLWKOLIHDQG
GHDWK7KH+LQGX*RGVDQG5LVKLVDUHIL[HGDQGDWWDFKHGWRSODQHWDU\DQGVWDUV\VWHPV7KLV
ZRXOGEHDUHIOHFWLRQRIWKHLPSDFWRIWKHH[WUDWHUUHVWULDODUFKDHDOLQWHOOLJHQFHDQGWKHWUDQVIHU
RIFRPHWDU\JHQHVWRRWKHUSODQHWDU\V\VWHPVLQFOXGLQJHDUWK7KHH[WUDWHUUHVWULDOSRUSK\ULQ
DQG DUFKDHDO LQWHOOLJHQW QHWZRUNV FDQ EXLOG XS WKH LQWHUVWHOODU VSDFH LQ RWKHU SODQHWV OLNH
0DUVDQG9HQXVDQGRWKHUVWDUV\VWHPV,QWHOOLJHQWFLYLOL]DWLRQDOUHDG\H[LVWVLQVWDUV\VWHPV
DQG JDOD[LHV DOO RYHU WKH XQLYHUVH 7KH\ DUH PDGH RI WKH H[WUDWHUUHVWULDO SRUSK\ULQ DQG
DUFKDHDOLQWHOOLJHQWQHWZRUNV7KHVDPHH[WUDWHUUHVWULDODQGLQGXFHGWHUUHVWULDOSRUSK\ULQDQG
DUFKDHDO QHWZRUN JDYH ULVH WR WKH ]RPELH FLYLOL]DWLRQ RI SODQWV EDFWHULD YLUXVHV DQLPDOV
SULPDWHVDQGKXPDQVLQHDUWKZLWKWKHWHUUHVWULDODUFKDHDODQGSRUSK\ULQLQWHOOLJHQWQHWZRUN
DV WKH UHDO HWHUQDO VWUXFWXUH 7KH ]RPELH IRUPV FKDQJH IURP WLPH WR WLPH 7KH WHUUHVWULDO
DUFKDHDO DQG SRUSK\ULQ QHWZRUN KDYLQJ DQ HQHUJ\ZDYH SDUWLFXODWH H[LVWHQFH LV HWHUQDO
6LPLODUH[WUDWHUUHVWULDODUFKDHDODQGSRUSK\ULQLQWHOOLJHQWQHWZRUNLQGXFHGFLYLOL]DWLRQVRUWKH

QHWZRUNVSHUVHDFWLQJDVFLYLOL]HGHQWLWLHVFRQWUROOLQJWKHXQLYHUVHH[LVWVDOORYHUWKHJDOD[LHV
DQGXQLYHUVH7KLVFDQEHFDOOHGDVWKH*RGEHLQJ7KHWUDQVIHURIFRPHWDU\JHQHVIURPWKH
H[WUDWHUUHVWULDOSRUSK\ULQDQGDUFKDHDOQHWZRUNGXHWRPHWHRULFDQGFRPHWDU\VKRZHUVFDQEH
FRQVLGHUHGDVYLVLWDWLRQVRIWKHH[WUDWHUUHVWULDODUFKDHDOLQWHOOLJHQFHWRSODQHWDU\V\VWHPVDQG
VWDUV\VWHPVWRPRGXODWHVXFKV\VWHPV7KH\FDQEHFDOOHGDV*RGDVWURQDXWVLQPHWDSKRULFDO
VHQVH7KHKXPDQFLYLOL]DWLRQVFDQEHFRQVLGHUHGDV]RPELHVIRUWKHH[WUDWHUUHVWULDODUFKDHDO
LQWHOOLJHQWQHWZRUN7KHKXPDQ]RPELH¶VFUHDWLYLW\OHDGHUVKLSTXDOLWLHVDQGLQWHOOLJHQFHDUH
SURSRUWLRQDWHWRWKHLQIXVLRQRIFRPHWDU\JHQHV7KHKXPDQ]RPELHVZLWKWKHKLJKHVWGHQVLW\
RIFRPHWDU\JHQHVIURPWKHH[WUDWHUUHVWULDODUFKDHDOLQWHOOLJHQWQHWZRUNDUHQHDQGHUWKDOLFDQG
GRPLQDWHVRFLHWLHVDVNLQJVDQGOHDGHUV7KH\DUHDXWLVWLFDQGLQWHOOLJHQWDQGIRUPVFLHQWLVW
ZULWHUV SRHWV SDLQWHUV GDQFHUV DUWLVWV DQG DOO FUHDWLYH LFRQV RI FLYLOL]DWLRQV 7KH\ FDQ EH
FDOOHG DV WKH LOOXPLQDWL RI HDUWK RU WKH DJHQWV RI WKH H[WUDWHUUHVWULDO DUFKDHDO LQWHOOLJHQW
QHWZRUN FRQWUROOLQJ WKH HDUWK 7KH WHUUHVWULDO KLVWRU\ DQG FLYLOL]DWLRQ LV DOVR PRGXODWHG E\
LQIXVLRQ RI FRPHWDU\ JHQHV E\ PHWHRULF LPSDFWV IURP H[WUDWHUUHVWULDO DUFKDHDO LQWHOOLJHQW
QHWZRUN7KLVDOWHUVWKHJHQRPLFSDWWHUQVRIWKHKRPRVDSLHQSRSXODWLRQE\WKHDUFKDHDDQG
WKH VHFUHWHG 51$ YLURLGV 7KLV UHVXOWV LQ UHGXFWLRQ LQ FHUHEUDO FRUWLFDO IXQFWLRQ ORJLFDO
WKLQNLQJ FLYLOL]HG EHKDYLRU DQG KXPDQLW\ DV ZH NQRZ LW 7KH VRFLHW\ EHFRPHV FHUHEHOODU
GRPLQDQWDQGLPSXOVLYH7KHEUDLQEHFRPHVDSULVRQHURIVXUUHDOLVWLFDQGWUDQVFHQGHQWDOLVWLF
XUJHV7KLVFUHDWHVDEVWUDFWDUWDQDUFK\WHUURULVPVH[XDODQDUFK\DOWHUQDWHVH[XDOLW\URFN
PXVLF JOREDOL]DWLRQ RI FXOWXUH DQG VSLULWXDOLW\ 7KLV DOVR OHDGV WR YLROHQFH WHUURULVP
UHYROXWLRQVDQGZDUVZKLFKFUHDWHVDVRUWRIWUDQVFHQGHQFHVLPLODUWRVSLULWXDOLW\7KHZRUOG
LV GRPLQDWHG E\ LPSXOVLYH SHRSOH ZLWKRXW ORJLFDO WKLQNLQJ DQG ZLWK GRPLQDQW H[WUDVHQVRU\
SHUFHSWLRQ 7KH ZRUOG EHFRPHV DQDUFK\ DQG JOREDOL]HG ZLWK XQLIRUPLW\ LQ KXPDQ EHKDYLRU
DQG WKRXJKW 7KH FKDQJHV LQ VRFLHW\ DUH EURXJKW DERXW E\ LQFUHDVH LQ DUFKDHDO JURZWK DQG
LQFUHDVHG WUDQVIHU RI H[WUDWHUUHVWULDO DUFKDHDO LQWHOOLJHQW QHWZRUNV VWDUWLQJ IURP WKH LFH DJH
7KH1HDQGHUWKDOK\EULGVZHUHFUHDWLYHDQGFUHDWHGFKDQJHVLQVRFLHW\OHDGLQJWRDQLQGXVWULDO
UHYROXWLRQ DQG D WHFKQRORJLFDO UHYROXWLRQ FRQWULEXWLQJ WR JOREDO ZDUPLQJ DQG H[WUHPHV RI
WHPSHUDWXUH ZKLFK OHDGV WR IXUWKHU JURZWK RI WHUUHVWULDO DQG H[WUDWHUUHVWULDO DUFKDHDO
LQWHOOLJHQWQHWZRUNV7KHDLPRIFUHDWLQJKXPDQ]RPELHVRUK\EULGVWKDWDUHFUHDWLYHFRXOG
KDYH EHHQ WR FUHDWH DQ HQYLURQPHQW ZKLFK OHDGV WR IXUWKHU H[SDQVLRQ RI WKH WHUUHVWULDO DQG
H[WUDWHUUHVWULDO LQWHOOLJHQW SRUSK\ULQ DQG DUFKDHDO QHWZRUNV 7KH H[SDQVLRQ RI WKH WHUUHVWULDO
DUFKDHDOQHWZRUNVSURGXFHVPHWKDQRJHQHVLVJOREDOZDUPLQJDQGIXUWKHUJURZWKRIWHUUHVWULDO
DUFKDHD 7KH JURZWK RI WHUUHVWULDO DUFKDHD LQ WKH RFHDQ EHGV FDQ OHDG WR HDUWKTXDNHV
FRQWLQHQWDOGULIWVWVXQDPLVULVHLQZDWHUOHYHOVIORRGLQJDQGJOREDOFDWDVWURSKHHQGLQJWKH

XQLYHUVHDQGKXPDQ]RPELHVDVZHNQRZRIWRGD\7KHWHUUHVWULDODQGH[WUDWHUUHVWULDOQHWZRUN
RI SRUSK\ULQ DQG DUFKDHDO LQWHOOLJHQFH ZLOO FRQWLQXH WLOO HWHUQLW\ 7KH\ FDQ KDYH D ZDYH
SDUWLFOH H[LVWHQFH UHYHUWLQJ WR WKHLU HQHUJ\ ERG\ RU ZDYH ERG\ ZKHQ UHTXLUHG DQG FRPLQJ
EDFNWRSDUWLFXODWHH[LVWHQFHIURPWKHTXDQWDOIRDPZKHQUHTXLUHGFUHDWLQJVWDUVSODQHWVDQG
OLIHDJDLQ7KLVLVWKHGDQFHRIOLIHDQGGHDWKWKHGDQFHRI6KLYD
7KH%LEOLFDOOLWHUDWXUHFDQEHLQWHUSUHWHGLQWHUPVRIH[WUDWHUUHVWULDODUFKDHDOQHWZRUNV
DQG1HDQGHUWKDOK\EULGV7KHH[WUDWHUUHVWULDODUFKDHDOQHWZRUNVFRQWDFWVWKHWHUUHVWULDOV\VWHP
YLDPHWHRULFDQGFRPHWDU\LPSDFWV7KHKRPRVDSLHQIHPDOHVZLWKDUFKDHDOV\PELRVLVJLYH
ULVH WR 1HDQGHUWKDO K\EULGV 7KH KRPR VDSLHQ SRSXODWLRQ KDYH OHVV RI DUFKDHDO GHQVLW\ DQG
GLIIHUHQWFKDUDFWHULVWLFV7KH1HDQGHUWKDOK\EULGVZHUHFUHDWLYHDQGDXWLVWLFDQGEHFDPHWKH
UXOHUV RI VRFLHW\ DQG NLQJVKLS GHYHORSHG RZLQJ WR WKH JURXSV LQFUHDVHG LQWHOOHFWXDO DQG
SK\VLFDODELOLWLHV7KHKRPRVDSLHQIHPDOHVZLWKDUFKDHDOV\PELRVLVJDYHULVHWR1HDQGHUWKDO
K\EULGVDQGWKH\ZHUHFRQVLGHUHGDVHTXLYDOHQWWRPRWKHUJRGGHVVLQFHUWDLQVRFLHWLHVRUDV
PDQLIHVWDWLRQ RI 6KDNWL 7KLV JDYH ULVH WR D PDWULOLQHDO VRFLHW\ DQG IHPDOH GRPLQDQFH 7KH
H[WUDWHUUHVWULDODUFKDHDOQHWZRUNZKLFKIRUPVVWDUVDQGSODQHWDU\V\VWHPFDQEHFRQVLGHUHGDV
DUHSUHVHQWDWLYHRI6KLYDDQGWKHIHPDOHKRPRVDSLHQVZLWKDUFKDHDOV\PELRVLVJLYLQJULVHWR
1HDQGHUWKDO K\EULGV FDQ EH FRQVLGHUHG DV D FRQVRUW RI 6KDNWL 7KH FRPPRQ KRPR VDSLHQV
YLHZHG WKH 1HDQGHUWKDO K\EULGV ZLWK VXVSLFLRQ DV WKH\ ZHUH GLIIHUHQW IURP WKH JHQHUDO
SRSXODWLRQ DQG GRPLQDQW UXOLQJ RYHU WKHP ZLWK WKHLU SK\VLFDO DQG LQWHOOHFWXDO DELOLW\ 7KH
FRPPRQ KRPR VDSLHQV RUJDQL]HG WKHPVHOYHV DV WKH FKXUFK DJDLQVW 1HDQGHUWKDO K\EULGV
ZKLFKIRUPHGWKHVWDWHRUNLQJVKLS7KHFRPPRQKRPRVDSLHQVFRQVLGHUHGWKHLQWHUEUHHGLQJ
RI KRPR VDSLHQ IHPDOHV ZLWK H[WUDWHUUHVWULDO DUFKDHDO QHWZRUNV DV RULJLQDO VLQ DQG WKH
H[WUDWHUUHVWULDODUFKDHDOQHWZRUNVFRQWDFWLQJWKHHDUWKYLDFRPHWDU\LPSDFWVDVIDOOHQDQJHOV
7KH FRPPRQ KRPR VDSLHQV FRQVLGHUHG VH[ DV WDERR DQG VRFLHW\ ZDV RUJDQL]HG WR SUHYHQW
LQWHUEUHHGLQJZLWK1HDQGHUWKDOK\EULGV+\EULGVZHUHLQWHOOLJHQWFUHDWLYHGRPLQHHULQJZLWK
VH[XDOIUHHGRPZKLFKZDVFRQVLGHUHGDVVLQIXOE\WKHFRPPRQKRPRVDSLHQSRSXODWLRQDQG
WKH FKXUFK 7KHUHIRUH WKH SRVLWLRQ RI ZRPHQ LQ WKH FRPPRQ KRPR VDSLHQ VRFLHW\ ZLWK
FHUHEUDO FRUWLFDO GRPLQDQFH ZDV LQIHULRU VH[XDO DFWLYLW\ ZDV VLQIXO DQG VRFLHW\ ZDV
SDWULDUFKDO ZLWK VWULFW PRUDO FRGHV 7KH 1HDQGHUWKDO K\EULGV RQ WKH RWKHU KDQG ZHUH
FHUHEHOODU GRPLQDQW LPSXOVLYH FUHDWXUHV ZLWK VH[XDO IUHHGRP ORRVH PRUDO FRGHV DQG D
FRPPXQDO OLIH ZLWK PDWULDUFKDO VWUXFWXUH RIVRFLHW\ 7KH PDWULOLQHDO VRFLHWLHV ZLWK DUFKDHDO
V\PELRVLV DUH WKH &HOWV %DVTXHV %HUEHUV -HZV 6XPHULDQV 'UDYLGLDQV DQG DQFLHQW
(J\SWLDQV DQG WKH\ ZHUH DOO FRPPXQDO JURXSLQJV RI 1HDQGHUWKDO K\EULGV DQG GRPLQDWHG

FLYLOL]DWLRQ IRU GHFDGHV 7KLV LV QRWLFHG LQ WKH (J\SWLDQ FLYLOL]DWLRQ RI 3KDURDKV WKH
6XPHULDQFLYLOL]DWLRQWKHDQFLHQW-HZLVKFLYLOL]DWLRQ$VV\ULDQFLYLOL]DWLRQWKH,UDQLDQDVXULF
FLYLOL]DWLRQ $]WHF FLYLOL]DWLRQ DQG WKH +DUDSSDQ FLYLOL]DWLRQ 7KH ,QGLDQ FDVWH V\VWHP LV
EDVHG RQ WKH SKHQRPHQD RI 1HDQGHUWKDO K\EULGV 7KH 1HDQGHUWKDO K\EULGV IRUPHG GXH WR
FRQWDFWZLWKWKHH[WUDWHUUHVWULDODUFKDHDOQHWZRUNVFRQVHTXHQWWRPHWHRULFLPSDFWVIRUPHGWKH
XSSHU FDVWH RI %UDKPLQV DQG .VKDWUL\DV 7KH FRPPRQ KRPR VDSLHQ SRSXODWLRQ IRUPHG WKH
6XGUDV7KH1HDQGHUWKDOK\EULGVRIWKHXSSHUFDVWHUXOHGRYHUWKHVRFLHW\DQGNHSWDFRPPRQ
KRPR VDSLHQ SRSXODWLRQ RI ORZHU FDVWH DV VODYHV %UHHGLQJ ODZV ZHUH PDGH DQG D FDVWH
JURXSVPDGHZDWHUWLJKWWRNHHSWKHSXULW\RIWKH1HDQGHUWKDOK\EULGV7KHFRPPRQKRPR
VDSLHQ SRSXODWLRQ DOO RYHU WKH ZRUOG UHWDLQHG LWV SDWULDUFKDO PRRULQJV DQG PDOH GRPLQDQFH
DQG EHFDPH SUHGRPLQDQWO\ &KULVWLDQ DQG 0XVOLP 7KHVH VRFLHWLHV ZHUH FHUHEUDO FRUWLFDO
GRPLQDQWFLYLOVRFLHWLHVZHUHHTXDOLW\DQGUHVSHFWIRUSHRSOHZDVWKHQRUP7KH1HDQGHUWKDO
K\EULGV ZLWK WKH FUHDWLYLW\ DQG H[WUDVHQVRU\ SRZHUV EHFDPH +LQGXV %XGGKLVWV DQG -HZV
7KHVH VRFLHWLHV ZHUH GLYLGHG RQ WKH EDVLV RI FDVWH DQG IRU WKH QHFHVVLW\ RI NHHSLQJ WKH
1HDQGHUWKDO K\EULGV SXUH DQG FRPSDFW 7KH 6XPHULDQ WH[WV WKH (J\SWLDQ SDS\UXV WKH 5LJ
YHGDWKHDQFLHQW-HZLVKWHVWDPHQWVWKH$VV\ULDQOLWHUDWXUHDUH1HDQGHUWKDOK\EULGLQRULJLQ
DQGFRQWDLQVYHUVLRQRIWKHH[WUDWHUUHVWULDODUFKDHDOQHWZRUNVRIWKHLQWHUVWHOODUVSDFHJLYLQJ
ULVH WR VWDUV DQG SODQHWDU\ V\VWHP 7KH *RGV RI (J\SW +LQGXV $VV\ULDQV DQG -HZV DUH
FRQQHFWLRQ ZLWK WKH VWDUV 7KLV FDQ EH QRWHG LQ WKH ULWXDO RI SDJDQ UHOLJLRQV OLNH WKRVH LQ
6WRQHKHQJHWKHULWXDOVRI+LQGXLVPDQGWKRVHRIDQFLHQW(J\SWDVZHOODV$]WHFVZKLFKKDG
UHODWLRQ WR WKH VWDU V\VWHPV LQGLFDWLQJ FRQWDFW ZLWK H[WUDWHUUHVWULDO LQWHOOLJHQW DUFKDHDO
QHWZRUNV 7KH 1HDQGHUWKDO K\EULGV KDYH FHUHEHOODU GRPLQDQFH DQG FHUHEUDO FRUWLFDO
G\VIXQFWLRQ DQG FRXOG DWWDLQ WUDQVFHQGHQFH WR WKH FROOHFWLYH XQFRQVFLRXV DQG FRQQHFW ZLWK
WKH H[WUDWHUUHVWULDO DUFKDHDO SDUWLFXODWH RU HQHUJ\ QHWZRUN ZLWK HDVH 0RVW RI WKH UHOLJLRXV
VSLULWXDO OHDGHUV FRXOG KDYH EHHQ 1HDQGHUWKDO K\EULGV 7KH NLQJV DQG ZDUULRUV ZHUH DOVR
1HDQGHUWKDOK\EULGV7KHDFWRIZDURUWKHDFWRINLOOLQJJLYHVDVHQVHRIWUDQVFHQGHQFHDQG
PHUJHUZLWKWKHFROOHFWLYHXQFRQVFLRXVDVVHHQLQWKH%KDJDYDG*LWDZKHUHWKHDFWRIZDULV
FRQVLGHUHGDVDGKDUPDDQGOHDGVWRWUDQVFHQGHQFH7KHFRUWLFDOIXQFWLRQRIORJLFDOWKLQNLQJ
LV REOLWHUDWHG 7KH 1D]LV LQFOXGLQJ +LWOHU DQG +LPPOHU EHOLHYHG LQ WKH SKLORVRSK\ RI WKH
%KDJDYDG*LWDZKLFKMXVWLILHGWKHZRUOGZDUVDVDQDFWRIGKDUPD7KHUHLVDOVRWKHFRQFHSW
RIDYDWDUVRI9LVKQXGHVFHQGLQJIURPWKHKHDYHQWRVDYHPDQNLQG7KLVLQFOXGHV.ULVKQDDQG
%XGGKD 7KH\ FDQ EH FRQVLGHUHG DV 1HDQGHUWKDO K\EULGV EUHG LQ FRQWDFW ZLWK WKH
H[WUDWHUUHVWULDOLQWHOOLJHQWDUFKDHDOFRORQ\SDUWLFXODWHRUHQHUJ\QHWZRUNPHGLDWHGE\DUFKDHDO
FRORQ\DVWURQDXWVVKRZHUHGRQWRWKHHDUWKE\PHWHRULFLPSDFWV$OOWKHSROLWLFDOUHYROXWLRQV

RQ HDUWK KDG D QHDQGHUWKDOLF K\EULG OHDGHUVKLS 1D]LVP )DVFLVP &RPPXQLVP WKH )UHQFK
UHYROXWLRQDQGWKHUR\DONLQJVKLS7KH)UHQFKUHYROXWLRQDQGFRPPXQLVWUHYROXWLRQGHVSLWH
LWVHJDOLWDULDQHWKRVZHUHEDVLFDOO\OHGE\-HZV7KHPRGHUQUHYROXWLRQRIWKHGLVVROXWLRQRI
QDWLRQ VWDWHV DQG JOREDOL]DWLRQ RI FDSLWDO DQG HFRQRP\ DOVR KDV D -HZLVK OHDGHUVKLS RI
1HDQGHUWKDO K\EULGV 7KH WHFKQRORJLFDO UHYROXWLRQ RI WKH LQWHUQHW ZKLFK SRZHUV WKH
JOREDOLVHG ZRUOG LV DOVR GRPLQDWHG E\ WKH LPSXOVLYH FHUHEHOODU GRPLQDQW 1HDQGHUWKDO
K\EULGV/RZOHYHORI(0)ILHOGVRIWKHLQWHUQHWFDQLQFUHDVHDUFKDHDOJURZWKDQGDUFKDHDO
PDJQHWLWH PHGLDWHG SHUFHSWLRQ RI ORZ OHYHO (0) SURGXFLQJ FRUWLFDO DWURSK\ DQG FHUHEHOODU
GRPLQDQFH ZKLFK FDQ EH WUDQVPLWWHG JHQHWLFDOO\ 7KH LQWHUQHW UHYROXWLRQ LV SRZHUHG E\
1HDQGHUWKDO K\EULGV ZKR DUH EDVLFDOO\ DXWLVWLF DQG KDYH H[WUDVHQVRU\ SHUFHSWLRQ GXH WR
KLJKHUEUDLQGHQVLW\RIDUFKDHDOPDJQHWLWH7KH1HDQGHUWKDOK\EULGVGRPLQDWHWKHZRUOGZLWK
WKHLULQWHOOHFWXDODQGSK\VLFDOVXSHULRULW\DQGFDQEHFRQVLGHUHGDVDXQLYHUVDOUXOLQJFDXFXV
RULOOXPLQDWL
7KH PRGHUQ GD\ QHDQGHUWKDOLF UHOLJLRQ PHGLDWHG E\ WKH LQWHUJDODFWLF DUFKDHDO
PROHFXODUTXDQWXPFRPSXWLQJFORXGLQFOXGHV+LQGXLVP-HZLVK.DEDODWKH,VODPLF6XILVP
WKH &KULVWLDQ *QRVWLVP DQG WKH =HQ %XGGKLVP 7KHVH DUH DOO FHUHEHOODU FRUWLFDO UHOLJLRQV
7KH\ KDYH DQ H[WUDWHUUHVWULDO FRQWHQW DUH LPSXOVLYH ORRVH ULWXDOLVWLF VH[XDO VHQVXDO DQG
SULPLWLYH 7KH FRUUHODWHV RI WKHVH FDQ EH VXUUHDOLVP PDWULDUFKDO JOREDO YLROHQFH JHQGHU
HTXDODOWHUQDWHVH[XDOLW\QRQGHPRFUDWLFDQGZLWKH[WUDVHQVRU\TXDQWDOSHUFHSWLRQ7KH\DUH
HQYLURQPHQWDO IULHQGO\ DQG ZRUVKLS HQYLURQPHQW DV *RG 7KH\ DUH SURQH WR FLYLOL]DWLRQDO
GLVHDVHV OLNH WXPRXUV PHWDEROLF V\QGURPH GHJHQHUDWLRQV SV\FKLDWULF LOOQHVV DQG
DXWRLPPXQLW\ DQG LQ WKDW VHQVH ZHUH FRQVLGHUHG E\ WKH KRPR VDSLHQ VHFXODU UHOLJLRQV DV
VDWDQLF7KH\DUHHTXLYDOHQWWRWKHYDPSLUHVWKHGHPRQVWKHHOIWKHJREOLQVDQG$VXUDV7KH
KRPR VDSLHQ VHFXODU UHOLJLRQV LQFOXGH WKH :DKDEL ,VODP PRGHUQ FRPPXQLVP DQG WKH
SURWHVWDQWDQG5RPDQ&DWKROLF&KULVWLDQLW\7KHKRPRVDSLHQUHOLJLRQVDUHFHUHEUDOFRUWLFDO
UHOLJLRQV RI FLYLO VRFLHWLHV 7KHVH KRPR VDSLHQ UHOLJLRQV JLYH D FLYLOL]HG FRGH RI VRFLDO
FRQGXFW 7KH FRUUHODWHV RI LW DUH QRQYLROHQFH DKLPVD PRUDOLW\ SDWULDUFKDO IHPDOH
VXSSUHVVLRQJHQGHULQHTXDOLW\VWULFWKHWHURVH[XDOPRUDOFRGHVDQGDQWLHQYLURQPHQWDO

5HIHUHQFHV
.XUXS 5. DQG .XUXS 3$ 7KHRU\ RI (YHU\WKLQJ ± $ %LRORJLFDO 9LHZSRLQW 1HZ <RUN
2SHQ6FLHQFH3XEOLVKHUV

&+$37(5
&/,0$7(&+$1*($1'&$7$67523+,&3$1'(0,&6±$+80$125,*,1
)25(0(5*,1*9,586(6$1'&29,'

&OLPDWH FKDQJH FDQ OHDG WR H[WUHPRSKLOLF HQGRV\PELRWLF DUFKDHDO JURZWK DQG
QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV 7KHUH LV LQFUHDVH LQ HQGRV\PELRWLF DQG FRORQLF DUFKDHDO
JURZWK7KHLQFUHDVHLQFRORQLFDUFKDHDOJURZWKOHDGVWREUHDFKLQJRIWKHEORRGJXWEDUULHU
DQG DUFKDHDO HQGRV\PELRVLV 7KH H[SRVXUH WR WKH ORZ OHYHO RI (0) ILHOGV FRQVHTXHQW WR
ZLGHVSUHDG XVH RI WKH LQWHUQHW UDGLRVDWHOOLWHV DQG UDGDU HTXLSPHQWV OHDGV WR LQFUHDVHG
HQGRV\PELRWLF DUFKDHDO JURZWK $UFKDHDO HQGRV\PELRVLV OHDGV WR QHDQGHUWKDOLVDWLRQ RI WKH
VSHFLHV 7KH FRORQLF DQG HQGRV\PELRWLF DUFKDHD DOVR JHQHUDWHV 51$ YLURLGV ZKLFK DUH
FRQYHUWHG WR '1$ YLURLGV E\ FRORQLF HSLWKHOLDO +(59 UHYHUVH WUDQVFULSWDVH DQG JHWV
LQWHJUDWHG LQWR WKH KXPDQ JHQRPH 7KH 51$ DQG '1$ YLURLGV K\EULGLVH ZLWK WKH YLURLGDO
DQG EDFWHULDO SRSXODWLRQ RI WKH JXW PLFURELRPH DQG YLURELRPH '1$ DQG 51$ RI WKH JXW
OHDGLQJWRJHQHUDWLRQRIQHZHPHUJLQJYLUXVHVOLNH&RYLG7KH51$DQG'1$YLURLGVDQG
JXW EDFWHULD FDQ DOVR K\EULGLVH ZLWK KXPDQ JHQRPLF VHTXHQFHV IRU LPPXQLW\ PHWDEROLF
UHJXODWLRQJURZWKIDFWRUVFHOOJURZWKFHOOGHDWKQHXURWUDQVPLWWHUVDQG+(59VHTXHQFHVRI
WKHFRORQLDOHSLWKHOLDOFHOO7KHK\EULGL]DWLRQRIDUFKDHDO51$YLURLGVZLWKKXPDQJHQRPLF
+(59 VHTXHQFHV FDQ JHQHUDWH UHWURYLUXVHV 7KLV OHDGV WR JHQHUDWLRQ RI QHZ EDFWHULD 51$
DQG '1$ YLUXVHV PRGXODWLQJ FHOO GHDWK FHOO JURZWK FHOO SUROLIHUDWLRQ PHWDEROLVP
HQGRFULQH IXQFWLRQ DQG EHKDYLRXU SURGXFLQJ DXWRLPPXQLW\ VFKL]RSKUHQLD DXWLVP FDQFHU
GLDEHWHVPHOOLWXVFRURQDU\YDVFXODUGLVHDVHFHUHEURYDVFXODUGLVHDVHDQGQHXURGHJHQHUDWLRQ
'LHWDU\ ILEUH LV WKH PRVW LPSRUWDQW IDFWRU WKDW PRGXODWHV KXPDQ ELRORJ\ DQG
VSHFLDWLRQ'LHWDU\ILEUHDQGKXPDQGUXJVDQWLELRWLFDQGQRQDQWLELRWLFFDQPRGXODWHWKHJXW
IORUD SURGXFLQJ FRORQLF DUFKDHDO JURZWK DQG HQGRV\PELRVLV JHQHUDWLQJ FOLPDWH FKDQJH
HYROXWLRQ RI VXSHUEXJV DQG HPHUJLQJ YLUXVHV DQG FUHDWLQJ WKH GLVHDVH SKHQRW\SH 7KH KLJK
ILEUHGLHWLVGLJHVWHGE\WKHFRORQLFIORUDOHDGLQJWRJHQHUDWLRQRIVKRUWFKDLQIDWW\DFLGVDQG
LQKLELWVHQGRV\PELRWLFDQGFRORQLFDUFKDHDOJURZWK7KLVOHDGVWRKRPRVDSLHQLVDWLRQRIWKH
VSHFLHV $ ORZ ILEUH GLHW ZLWK LQFUHDVH LQ SURWHLQ DQG IDW OHDGV WR VWLPXODWLRQ RI
7KHDUFKDHDGHYHORSSURWHFWLYHPHFKDQLVPRIDQWLELRWLFUHVLVWDQFHDQGGRPLQDWHVWKHFRORQLF
PLFURIORUD 7KH FRORQLF DUFKDHD E\ QDWXUDO VHOHFWLRQ DQG '1$JHQH H[FKDQJHV ZLWK RWKHU

FRORQLF DQG HQGRV\PELRWLF RUJDQLVP WUDQVIHU WKH JHQHV IRU DQWLELRWLF UHVLVWDQFH WR RWKHU
FRORQLFIORUD7KLVIRUPVWKHEDVLVIRUWKHJHQHUDWLRQRIVXSHUEXJVUHVLVWDQWWRDOODQWLELRWLFV
7KHVDPHPHFKDQLVPVKDSSHQZKHQSRSXODWLRQVDUHWUHDWHGZLWKDQWLELRWLFVDQGRWKHUGUXJV
OLNH DQWLK\SHUWHQVLYHV DQWLSV\FKRWLFV DQG DQDOJHVLFV 7KH\ NLOO WKH FRORQLF EDFWHULDO IORUD
DQG WKH H[WUHPRSKLOLF DUFKDHD GRPLQDWHV WKH FRORQLF PLFURELRPH ZLWK DFTXLUHG SURWHFWLYH
PHFKDQLVPV IRU DQWLELRWLF UHVLVWDQFH 7KHVH DUFKDHDO DQWLELRWLF UHVLVWDQFH JHQHV DUH
WUDQVIHUUHG E\ JHQH DQG SODVPLG '1$ H[FKDQJH ZLWK UHPQDQW FRORQLF DQG HQGRV\PELRWLF
PLFURRUJDQLVPJHQHUDWLQJVXSHUEXJV7KXVDQWLELRWLFDQGRWKHUQRQDQWLELRWLFGUXJVSURPRWH
FRORQLFDUFKDHDOJURZWKDQGHQGRV\PELRVLVSURGXFLQJQHDQGHUWKDOLVDWLRQRIWKHVSHFLHVDQG
JHQHUDWLRQ RI VXSHUEXJV ZKLFK NLOOV RI WKH KRPR VDSLHQ VSHFLHV 7KXV WKH JHQHUDWLRQ RI
VXSHUEXJV DQG HPHUJLQJ YLUXVHV LV SURPRWHG E\ D ORZ ILEUH GLHW $ ORZ ILEUH GLHW OHDGV WR
FRORQLFDQGHQGRV\PELRWLFDUFKDHDOJURZWKOHDGLQJWRQHDQGHUWKDOLVDWLRQRIWKHVSHFLHVDQG
JHQHUDWLRQ RI VXSHUEXJV DQG HPHUJLQJ YLUXVHV WR ZKLFK WKH QHDQGHUWKDOLVHG VSHFLHV LV
UHVLVWDQWFRQVHTXHQWWRHQGRJHQRXVGLJR[LQVHFUHWLRQ7KHQHDQGHUWKDOLVHGVSHFLHVJHQHUDWHG
VXSHUEXJVDQGHPHUJLQJYLUXVHVNLOOVRIWKHKRPRVDSLHQVSHFLHVZKLFKDUHVHQVLWLYHWRWKH
VXSHUEXJV DQG HPHUJLQJ YLUXVHV DQG GR QRW KDYH UHVLVWDQFH WR LW 7KXV WKH PRGHUQ
DUPDPHQWDULXPRIDQWLELRWLFVDQWLSV\FKRWLFVDQDOJHVLFVDQWLK\SHUWHQVLYHVDQGDQWLGLDEHWLF
GUXJV SURPRWH FRORQLF DQG HQGRV\PELRWLF DUFKDHDO JURZWK GHYHORSPHQW RI VXSHUEXJV
QHDQGHUWKDOLVDWLRQRIVSHFLHVDQGLQGXFWLRQRIFLYLOL]DWLRQDOGLVHDVH7KXVWKHGUXJVXVHGWR
WUHDWLQIHFWLRQVDQGKXPDQGLVHDVHWHQGWRSURGXFHVXSHUEXJVHPHUJLQJYLUXVLQIHFWLRQDQG
FLYLOL]DWLRQDO GLVHDVHV FDQFHU DXWRLPPXQH GLVHDVH PHWDEROLF V\QGURPH [
QHXURGHJHQHUDWLRQ VFKL]RSKUHQLD DQG DXWLVP 7KXV WKH GUXJ DUPDPHQWDULXP RI DQWLELRWLFV
DQG QRQDQWLELRWLF GUXJV XVHG WR WUHDW KXPDQ LQIHFWLRQV DQG GLVHDVHV LQFUHDVHV FRORQLF DQG
HQGRV\PELRWLFDUFKDHDOJURZWKQHDQGHUWKDOLVHVWKHVSHFLHVJHQHUDWHVVXSHUEXJVDQGOHDGVWR
LQFUHDVHGLQFLGHQFHRIFLYLOL]DWLRQDOGLVHDVH7KHJXWPLFURELRPHDQGYLURELRPHPRGXODWHG
E\ GLHWDU\ ILEUH LQWDNH KLJK SURWHLQ KLJK IDW GLHWV DQWLELRWLFV DQG QRQDQWLELRWLF GUXJV OLNH
DQWLSV\FKRWLFVDQWLK\SHUWHQVLYHVDQDOJHVLFVOHDGVWRDOWHUDWLRQLQJXWPLFURELDODQGYLURLGDO
ELRJHRJUDSK\OHDGLQJWRJHQHUDWLRQRIVXSHUEXJVDQGVXSHUYLUXVHV7KHJXWDUFKDHDKLJKO\
UHVLVWDQWWRFRQYHQWLRQDODQWLELRWLFVDQGQRQDQWLELRWLFGUXJVDQGSUROLIHUDWHZKHQDQWLELRWLFV
DQGQRQDQWLELRWLFGUXJVOLNHDQWLK\SHUWHQVLYHVDQWLSV\FKRWLFVDQGDQDOJHVLFVDUHXVHGRQD
ZLGHVSUHDGEDVLV7KH\GHYHORSDQWLELRWLFUHVLVWDQFHDQGQRQDQWLELRWLFGUXJUHVLVWDQFHDQG
LW LV WUDQVIHUUHG WR RWKHU FRORQLF DQG JXW EDFWHULD DQG YLUXVHV JHQHUDWLQJ VXSHUEXJV DQG
VXSHUYLUXVHV H[WHUPLQDWLQJ WKH KRPR VDSLHQ SRSXODWLRQ 7KH JURZWK DQG GRPLQDQFH RI WKH
FRORQLFDQGHQGRV\PELRWLFEDFWHULDOHDGVWRJHQHUDWLRQRIKRPRQHDQGHUWKDOLVVSHFLHVZKLFK

LV UHVLVWDQW WR VXSHUEXJV DQG VXSHUYLUXVHV DQG VXUYLYH EXW JHW DIIHFWHG E\ FLYLOL]DWLRQDO
GLVHDVHV OLNH FDQFHU DXWRLPPXQLW\ PHWDEROLF V\QGURPH VFKL]RSKUHQLD DXWLVP DQG
QHXURGHJHQHUDWLRQ +RPR QHRQHDQGHUWKDOLV WKXV JHQHUDWHG E\ FRORQLF DQG HQGRV\PELRWLF
DUFKDHDOJURZWKFDQEHFRPHH[WLQFWRYHUDVORZSHULRGRIWLPH+RPRQHDQGHUWKDOLVZLWKLWV
H[WUHPRSKLOLFDUFKDHDOHQGRV\PELRVLVLVKDUG\DQGUHVLVWDQWDQGFDQVXUYLYHJOREDOZDUPLQJ
DQG H[WUHPHV RI FOLPDWH FKDQJH DV ZHOO DV VXUYLYLQJ H[WUHPRSKLOLF DQDHURELF FRQGLWLRQV RI
RWKHU SODQHWV DQG JDODFWLF V\VWHPV 7KH GLHWDU\ ILEUH LQWDNH LQKLELWV DUFKDHDO JURZWK DQG
SRSXODWLRQVZLWKORZGLHWDU\ILEUHLQWDNHDUHUHVLVWDQWWRFLYLOL]DWLRQDOGLVHDVHVOLNHPHWDEROLF
V\QGURPHFDQFHUDXWRLPPXQHGLVHDVHDQGVFKL]RSKUHQLD7KHKXPDQPHWKDQRJHQLFDUFKDHD
DUH KLJKO\ UHVLVWDQW WR URXWLQH DQWLELRWLFV DQG QRQDQWLELRWLF GUXJV DQG WKH LQWDNH RI VXFK
GUXJV NLOOV WKH FRORQLF PLFURELRPH OHDGLQJ WR DUFKDHDO JURZWK DQG HQGRV\PELRVLV DQG
QHDQGHUWKDOLVDWLRQ WR SURGXFH D KDUG\ KRPR JDODFWLFXV VSHFLHV FDSDEOH RI VXUYLYLQJ LQ
H[WUHPH FOLPDWHV RI HDUWK DQG RWKHU SODQHWV 7KH KXPDQ GUXJV DQG DQWLELRWLFV LQGXFHG
PRGXODWLRQRIWKHJXWPLFURELRPHZLWKLQFUHDVHGFRORQLFDQGHQGRV\PELRWLFDUFKDHDOJURZWK
DOVRFRQWULEXWHVWRJOREDOZDUPLQJYLDWKHPHFKDQLVPRIDUFKDHDOPHWKDQRJHQHVLV7KHZLGH
VSUHDG XVH RI DQWLELRWLFV DQG QRQDQWLELRWLF GUXJV FRQWULEXWH WR FRORQLF DQG HQGRV\PELRWLF
DUFKDHDOJURZWKFOLPDWHFKDQJHDQGVWLOOIXUWKHUPRUHDUFKDHDOJURZWK7KLVKXPDQFRORQLF
DQGHQGRV\PELRWLFDUFKDHDOJURZWKFRQVHTXHQWWRVWUHVVLQWHUQHWILHOGVORZOHYHO(0)ORZ
GLHWDU\ILEUHLQWDNHDQWLELRWLFXVHDQGQRQDQWLELRWLFGUXJXVHSURGXFLQJPHWKDQRJHQHVLVLV
WKHSULQFLSDOFDXVHRIJOREDOZDUPLQJ7KHZLGHVSUHDGXVHRIDQWLELRWLFDQGQRQDQWLELRWLF
GUXJV NLOOV RI WKH FRORQLF PLFURIORUD DQG UHSODFHV LW ZLWK DUFKDHD UHVLVWDQW WR DQWLELRWLF DQG
QRQDQWLELRWLF GUXJV 7KH ORZ LQWDNH RI GLHWDU\ ILEUH SURPRWHV FRORQLF DUFKDHDO DQG
HQGRV\PELRWLFDUFKDHDOJURZWK6WUHVVSURGXFHVFDWHFKRODPLQHLQGXFHGLQFUHDVHGLQFRORQLF
DQGHQGRV\PELRWLFDUFKDHDOJURZWKDQGEUHDFKLQJRIWKHJXWEORRGEDUULHU7KHZLGHVSUHDG
XVH RI LQWHUQHW DQG ORZ OHYHO RI (0) ILHOG RI PRELOH SKRQHV SURPRWHV HQGRV\PELRWLF
DUFKDHDO JURZWK 7KXV HQGRV\PELRWLF DQG FRORQLF DUFKDHDO JURZWK DQG PHWKDQRJHQHVLV
SURGXFLQJ JOREDO ZDUPLQJ LV D HQGRJHQRXV KXPDQ ELRORJLFDO HYHQW ZLWK KXPDQ ELRORJLFDO
DFWLYLW\DVDFHQWUHSLHFHWULJJHULQJWKHSURFHVV7KHZLGHVSUHDGXVHRIDQWLELRWLFVDQGQRQ
DQWLELRWLFGUXJVWUHDWLQIHFWLRQVYLUDODQGEDFWHULDODVZHOODVFLYLOL]DWLRQDOGLVHDVHOLNHFDQFHU
VFKL]RSKUHQLD PRRG GLVRUGHU GHSUHVVLRQ DXWLVP DXWRLPPXQH GLVHDVH DQG
QHXURGHJHQHUDWLRQ SURPRWHV FRORQLF DQG HQGRV\PELRWLF DUFKDHDO JURZWK ZKLFK
QHDQGHUWKDOLVHVWKHVSHFLHVOHDGLQJWRVWLOOIXUWKHUWUDQVIRUPDWLRQRIWKHKXPDQV\VWHPOHDGLQJ
WRLQGXFWLRQRIFLYLOL]DWLRQDOGLVHDVHOLNHFDQFHUPHWDEROLFV\QGURPH[QHXURGHJHQHUDWLRQ
DXWRLPPXQLW\DQGYDVFXODUGLVHDVH7KXVWKHDQWLELRWLFDQGQRQDQWLELRWLFGUXJVXVHGWRWUHDW

LQIHFWLRQV DQG V\VWHPLF GLVHDVHV SURGXFHV FRORQLF DQG HQGRV\PELRWLF DUFKDHDO JURZWK
OHDGLQJ WR VXSHUEXJV VXSHUYLUXVHV SDQGHPLFV DQG HSLGHPLF RI FLYLOL]DWLRQDO GLVHDVHV
PHGLDWHGE\FRORQLFDQGHQGRV\PELRWLFDUFKDHDOJURZWK+XPDQPHGLFLQHDVZHNQRZLWKDV
UHDFKHGDGHDGHQG7KHDQWLELRWLFDQGQRQDQWLELRWLFHUDRIGUXJVKDGFRPHWRDQHQG7KH
KXPDQHDUWKDVZHNQRZLWDOVRXQGHUJRHVFDWDVWURSKLFFOLPDWHFKDQJHOHDGLQJWRH[WLQFWLRQ
RIWKHKXPDQVSHFLHVDQGFRQGLWLRQVIRUKXPDQKDELWDWLRQVLQHDUWK7KHPRGHUQPHGLFLQHDV
ZHNQRZRIDQGWKHHDUWKDVZHNQRZRIKDYHHQGHG7KHSULQFLSDOFDXVHRIFOLPDWHFKDQJH
DQGLWVFDWDVWURSKLFFRPSOLFDWLRQVLVFRQWULEXWHGLQSDUWRQO\E\WKHGHVWUXFWLRQRIWKHWURSLFDO
$PD]RQLDQ DQG UDLQ IRUHVW 7KH GHIRUHVWDWLRQ RI WKH JXW PLFURIORUD FUHDWHG RYHU ELOOLRQV RI
\HDUVRIKXPDQHYROXWLRQLVWKHSULQFLSDOFDXVHRIWKHFOLPDWHFKDQJHDQGDSRVVLEOHHQGRI
WKHHDUWKDVZHNQRZRIDQGWKHKXPDQVSHFLHVDVZHNQRZRI7KHUHYROXWLRQDU\PHGLFLQH
DQGWKHJROGHQHDUWKZLWKLWVKDELWDEOHFRQGLWLRQVKDYHHQGHG7KHLQFUHDVHLQGLHWDU\ILEUH
LQWDNHXSWRJGD\FDQLQKLELWFRORQLFDUFKDHDOJURZWKDQGHQGRV\PELRVLVSXWWLQJDEUHDN
RQ JHQHUDWLRQ RI VXSHUEXJV HPHUJLQJ YLUXVHV DQG FOLPDWH FKDQJH ,QFUHDVH LQ GLHWDU\ ILEUH
LQWDNH RI SRSXODWLRQV FDQ SUHYHQW WKH VWDWH RI FOLPDWH FKDQJH DQG JXW PLFURELDO FKDQJH
SXWWLQJ KXPDQ OLIH DQG WKH OLIH RI WKH SODQHW DW ULVN 'LHWDU\ ILEUH FDQ EH FRQVLGHUHG DV WKH
HOL[LURIOLIHDQGHQGRV\PELRWLFDUFKDHDWKHSKLORVRSKHU¶VVWRQH
(QGRV\PELRWLF DFWLQLGLF DUFKDHD DV KDYLQJ HYROYHG IURP DQ HDUO\ LVRSUHQRLG
RUJDQLVPVE\DELRJHQHVLV$QDFWLQLGFDUFKDHDYLURLGPHGLDWHGPRGHORISURNDU\RWHYLUDO
HXNDU\RWLFSULPDWHDQGKXPDQHYROXWLRQLVGLVFXVVHG$FWLQLGLFDUFKDHDKDVEHHQUHODWHG
WR WKH SDWKRJHQHVLV RI VFKL]RSKUHQLD PDOLJQDQF\ PHWDEROLF V\QGURPH [ DXWRLPPXQH
GLVHDVH DQG QHXURQDO GHJHQHUDWLRQ $FWLQLGLF DUFKDHD KDYH D PHYDORQDWH SDWKZD\ DQG
FKROHVWHURO FDWDEROLVP 'DYLHV KDV SXW IRUZDUG WKH FRQFHSW RI D VKDGRZ ELRVSKHUH RI
RUJDQLVPVZLWKDOWHUQDWHELRFKHPLVWU\SUHVHQWLQHDUWKLWVHOI$QDFWLQLGHGHSHQGHQWVKDGRZ
ELRVSKHUHRIDUFKDHDDQGYLURLGVLQWKHDERYHPHQWLRQHGGLVHDVHVWDWHVLVGHVFULEHG0HWDO
DFWLQLGHVLQEHDFKVDQGVKDYHEHHQSRVWXODWHGWRSOD\DUROHLQDELRJHQHVLV$FWLQLGHPLQHUDO
OLNH UXWLOH PRQD]LWH DQG LOOPHQLWH E\ VXUIDFH PHWDEROLVP ZRXOG KDYH FRQWULEXWHG WR
DELRJHQHVLV $ K\SRWKHVLV RI FKROHVWHURO DV WKH SULPDO SUHELRWLF PROHFXOH V\QWKHVLVHG RQ
DFWLQLGHVXUIDFHVZLWKDOORWKHUELRPROHFXOHVDULVLQJIURPLWDQGDVHOIUHSOLFDWLQJFKROHVWHURO
OLSLGRUJDQLVPDVWKHLQLWLDOOLIHIRUPLVSUHVHQWHG7KHDFWLQLGLFDUFKDHDDQGYLURLGVZRXOG
KDYH HYROYHG IURP WKH SULPLWLYH LVRSUHQRLG RUJDQLVP 7KH RULJLQ RI YLUXVHV SURNDU\RWHV
HXNDU\RWHV SULPDWHV DQG KXPDQV IURP WKH LQLWLDO LVRSUHQRLG RUJDQLVP GHULYHG DFWLQLGLF
DUFKDHDLVSRVWXODWHG

0DWHULDOVDQG0HWKRGV
,QIRUPHG FRQVHQW RI WKH VXEMHFWV DQG WKH DSSURYDO RI WKH HWKLFV FRPPLWWHH ZHUH
REWDLQHG IRU WKH VWXG\ 7KH IROORZLQJ JURXSV ZHUH LQFOXGHG LQ WKH VWXG\ HQGRP\RFDUGLDO
ILEURVLV $O]KHLPHU¶V GLVHDVH PXOWLSOH VFOHURVLV QRQ+RGJNLQ¶V O\PSKRPD PHWDEROLF
V\QGURPH [ ZLWK FHUHEURYDVFXODU WKURPERVLV DQG FRURQDU\ DUWHU\ GLVHDVH VFKL]RSKUHQLD
DXWLVP VHL]XUH GLVRUGHU &UHXW]IHOGW -DNRE¶V GLVHDVH DQG DFTXLUHG LPPXQRGHILFLHQF\
V\QGURPH7KHUHZHUHSDWLHQWVLQHDFKJURXSDQGHDFKSDWLHQWKDGDQDJHDQGVH[PDWFKHG
KHDOWK\ FRQWURO VHOHFWHG UDQGRPO\ IURP WKH JHQHUDO SRSXODWLRQ 7KH EORRG VDPSOHV ZHUH
GUDZQ LQ WKH IDVWLQJ VWDWH EHIRUH WUHDWPHQW ZDV LQLWLDWHG 3ODVPD IURP IDVWLQJ KHSDULQLVHG
EORRG ZDV XVHG DQG WKH H[SHULPHQWDO SURWRFRO ZDV DV IROORZV , 3ODVPDSKRVSKDWH
EXIIHUHG VDOLQH ,, VDPH DV ,FKROHVWHURO VXEVWUDWH ,,, VDPH DV ,,UXWLOH PJPO DQG
,9 VDPH DV ,,FLSURIOR[DFLQH DQG GR[\F\FOLQH HDFK LQ D FRQFHQWUDWLRQ RI PJPO
&KROHVWHUROVXEVWUDWHZDVSUHSDUHGDVGHVFULEHGE\5LFKPRQG$OLTXRWVZHUHZLWKGUDZQDW
]HURWLPHLPPHGLDWHO\DIWHUPL[LQJDQGDIWHULQFXEDWLRQDW R&IRUKRXU7KHIROORZLQJ
HVWLPDWLRQV ZHUH FDUULHG RXW &\WRFKURPH ) IUHH 51$ IUHH '1$ PXUDPLF DFLG
SRO\F\FOLF DURPDWLF K\GURFDUERQ K\GURJHQ SHUR[LGH VHURWRQLQ S\UXYDWH DPPRQLD
JOXWDPDWHF\WRFKURPH&KH[RNLQDVH$73V\QWKDVH+0*&R$UHGXFWDVHGLJR[LQDQGELOH
DFLGV &\WRFKURPH ) ZDV HVWLPDWHG IORXULPHWULFDOO\ H[FLWDWLRQ ZDYHOHQJWK QP
DQG HPLVVLRQ ZDYHOHQJWK QP 3RO\F\FOLF DURPDWLF K\GURFDUERQ ZDV HVWLPDWHG E\
PHDVXULQJK\GURJHQSHUR[LGH OLEHUDWHGE\XVLQJJOXFRVHUHDJHQW7KHVWDWLVWLFDODQDO\VLVZDV
GRQHE\$129$

5HVXOWV
7KHSDUDPHWHUVFKHFNHGDVLQGLFDWHGDERYHZHUHF\WRFKURPH)IUHH51$IUHH
'1$ PXUDPLF DFLG SRO\F\FOLF DURPDWLF K\GURFDUERQ K\GURJHQ SHUR[LGH VHURWRQLQ
S\UXYDWH DPPRQLD JOXWDPDWH F\WRFKURPH & KH[RNLQDVH $73 V\QWKDVH +0* &R$
UHGXFWDVHGLJR[LQDQGELOHDFLGV3ODVPDRIFRQWUROVXEMHFWVVKRZHGLQFUHDVHGOHYHOVRIWKH
DERYH PHQWLRQHG SDUDPHWHUV ZLWK DIWHU LQFXEDWLRQ IRU KRXU DQG DGGLWLRQ RI FKROHVWHURO
VXEVWUDWH UHVXOWHG LQ VWLOO IXUWKHU VLJQLILFDQW LQFUHDVH LQ WKHVH SDUDPHWHUV 7KH SODVPD RI
SDWLHQWV VKRZHG VLPLODU UHVXOWV EXW WKH H[WHQW RI LQFUHDVH ZDV PRUH 7KH DGGLWLRQ RI
DQWLELRWLFV WR WKH FRQWURO SODVPD FDXVHG D GHFUHDVH LQ DOO WKH SDUDPHWHUV ZKLOH DGGLWLRQ RI
UXWLOH LQFUHDVHG WKHLU OHYHOV 7KH DGGLWLRQ RI DQWLELRWLFV WR WKH SDWLHQW¶V SODVPD FDXVHG D
GHFUHDVHLQDOOWKHSDUDPHWHUVZKLOHDGGLWLRQRIUXWLOHLQFUHDVHGWKHLUOHYHOVEXWWKHH[WHQWRI

FKDQJHZDVPRUHLQSDWLHQW¶VVHUDDVFRPSDUHGWRFRQWUROV7KHUHVXOWVDUHH[SUHVVHGLQWDEOHV
DVSHUFHQWDJHFKDQJHLQWKHSDUDPHWHUVDIWHUKRXULQFXEDWLRQDVFRPSDUHGWRWKHYDOXHV
DW]HURWLPH
7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQF\WRFKURPH)DQGPXUDPLFDFLG
0XUDPLFDFLG
&<7) &<7) 0XUDPLFDFLG
FKDQJH
,QFUHDVHZLWK 'HFUHDVHZLWK FKDQJH
*URXS 'HFUHDVHZLWK
5XWLOH 'R[\&LSUR ,QFUHDVHZLWK5XWLOH
'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQIUHH51$DQG'1$
'1$FKDQJH 51$FKDQJH
'1$FKDQJH 51$FKDQJH
'HFUHDVHZLWK 'HFUHDVHZLWK
*URXS ,QFUHDVHZLWK5XWLOH ,QFUHDVHZLWK5XWLOH
'R[\&LSUR 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQ+0*&R$UHGXFWDVHDQG$73V\QWKDVH
+0*&R$5 +0*&R$5
$73V\QWKDVH
FKDQJH FKDQJH $73V\QWKDVH
'HFUHDVHZLWK
*URXS ,QFUHDVHZLWK 'HFUHDVHZLWK ,QFUHDVHZLWK5XWLOH
'R[\&LSUR
5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH
7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQGLJR[LQDQGELOHDFLGV
'LJR[LQQJPO 'LJR[LQQJPO %LOH$FLGVFKDQJH
%LOH$FLGVFKDQJH
,QFUHDVHZLWK 'HFUHDVHZLWK 'HFUHDVHZLWK
*URXS ,QFUHDVHZLWK5XWLOH
5XWLOH 'R[\&LSUR 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQS\UXYDWHDQGKH[RNLQDVH
+H[RNLQDVH +H[RNLQDVH
3\UXYDWHFKDQJH
3\UXYDWHFKDQJH FKDQJH FKDQJH
'HFUHDVHZLWK
*URXS ,QFUHDVHZLWK5XWLOH ,QFUHDVHZLWK 'HFUHDVHZLWK
'R[\&LSUR
5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH
7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQK\GURJHQSHUR[LGHDQGGHOWDDPLQROHYXOLQLF
DFLG
+2 $/$ $/$

+2
'HFUHDVHZLWK ,QFUHDVHZLWK 'HFUHDVHZLWK
'R[\&LSUR 5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQ3$+DQGVHURWRQLQ
3$+ 3$+ +7FKDQJH
+7FKDQJH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'LVFXVVLRQ
7KHUHZDVLQFUHDVHLQF\WRFKURPH)LQGLFDWLQJDUFKDHDOJURZWK7KHDUFKDHDFDQ
V\QWKHVL]HDQGXVHFKROHVWHURODVDFDUERQDQGHQHUJ\VRXUFH7KHDUFKDHDORULJLQRIWKH
HQ]\PH DFWLYLWLHV ZDV LQGLFDWHG E\ DQWLELRWLF LQGXFHG VXSSUHVVLRQ 7KH VWXG\ LQGLFDWHV WKH
SUHVHQFH RI DFWLQLGH EDVHG DUFKDHD ZLWK DQ DOWHUQDWH DFWLQLGH EDVHG HQ]\PHV RU
PHWDOORHQ]\PHVLQWKHV\VWHPDVLQGLFDWHGE\UXWLOHLQGXFHGLQFUHDVHLQHQ]\PHDFWLYLWLHV
7KHUH ZDV DOVR DQ LQFUHDVH LQ DUFKDHDO +0* &R$ UHGXFWDVH DFWLYLW\ LQGLFDWLQJ LQFUHDVHG
FKROHVWHUROV\QWKHVLVE\WKHDUFKDHDOPHYDORQDWHSDWKZD\7KHDUFKDHDOEHWDK\GUR[\OVWHURLG
GHK\GURJHQDVH DFWLYLW\ LQGLFDWLQJ GLJR[LQ V\QWKHVLV DQG DUFKDHDO FKROHVWHURO K\GUR[\ODVH
DFWLYLW\ LQGLFDWLQJ ELOH DFLG V\QWKHVLV ZHUH LQFUHDVHG 7KH DUFKDHDO FKROHVWHURO R[LGDVH
DFWLYLW\ ZDV LQFUHDVHG UHVXOWLQJ LQ JHQHUDWLRQ RI S\UXYDWH DQG K\GURJHQ SHUR[LGH 7KH
S\UXYDWH JHWV FRQYHUWHG WR JOXWDPDWH DQG DPPRQLD E\ WKH *$%$ VKXQW SDWKZD\ 7KH
DUFKDHDO DURPDWL]DWLRQ RI FKROHVWHURO JHQHUDWLQJ 3$+ VHURWRQLQ DQG GRSDPLQH ZDV DOVR
GHWHFWHG 7KH DUFKDHDO JO\FRO\WLF KH[RNLQDVH DFWLYLW\ DQG DUFKDHDO H[WUDFHOOXODU $73
V\QWKDVHDFWLYLW\ZHUHLQFUHDVHG7KHDUFKDHDFDQXQGHUJRPDJQHWLWHDQGFDOFLXPFDUERQDWH
PLQHUDOL]DWLRQDQGFDQH[LVWDVFDOFLILHGQDQRIRUPV
7KH PHWDO DFWLQLGHV SURYLGH UDGLRO\WLF HQHUJ\ FDWDO\VLV IRU ROLJRPHU IRUPDWLRQ DQG
SURYLGH D FRRUGLQDWLQJ LRQ IRU PHWDOORHQ]\PHV DOO LPSRUWDQW LQ DELRJHQHVLV 7KH PHWDO

DFWLQLGHVXUIDFHVZRXOGE\VXUIDFHPHWDEROLVPJHQHUDWHDFHWDWHZKLFKFRXOGJHWFRQYHUWHGWR
DFHW\O &R$ DQG WKHQ WR FKROHVWHURO ZKLFK IXQFWLRQV DV WKH SULPDO SUHELRWLF PROHFXOH VHOI
RUJDQLVLQJ LQWR VHOI UHSOLFDWLQJ VXSUDPROHFXODU V\VWHPV WKH OLSLG RUJDQLVP &KROHVWHURO
E\ UDGLRO\VLV E\ DFWLQLGHV ZRXOG KDYH IRUPHG 3$+ JHQHUDWLQJ 3$+ DURPDWLF RUJDQLVP
&KROHVWHURO UDGLRO\VLV ZRXOG JHQHUDWH S\UXYDWH ZKLFK ZRXOG JHW FRQYHUWHG WR DPLQR DFLGV
VXJDUVQXFOHRWLGHVSRUSK\ULQVIDWW\DFLGVDQG7&$DFLGV$QDVWDVHDQGUXWLOHVXUIDFHVFDQ
SURGXFHSRO\PHUL]DWLRQRIDPLQRDFLGVLVRSUHQ\OUHVLGXHV3$+DQGQXFOHRWLGHVWRJHQHUDWH
WKH LQLWLDO OLSLG RUJDQLVP 3$+ RUJDQLVP SULRQV DQG 51$ YLURLGV ZKLFK ZRXOG KDYH
V\PELRVHG WR JHQHUDWH WKH DUFKDHDO SURWRFHOO 7KH DUFKDHD HYROYHG LQWR JUDP QHJDWLYH DQG
JUDPSRVLWLYHEDFWHULDZLWKDPHYDORQDWHSDWKZD\ZKLFKKDGDQHYROXWLRQDU\DGYDQWDJH7KH
V\PELRVLVRIDUFKDHDZLWKJUDPQHJDWLYHRUJDQLVPJHQHUDWHGWKHHXNDU\RWLFFHOO7KHGDWD
VXSSRUWVWKHSHUVLVWHQFHRIDQDFWLQLGHDQGFKROHVWHUROEDVHGVKDGRZELRVSKHUHZKLFKWKURZV
OLJKWRQWKHDFWLQLGHEDVHGRULJLQRIOLIHDQGFKROHVWHURODVWKHSUHPLHUSUHELRWLFPROHFXOH
7KHUHZDVDQLQFUHDVHLQIUHH51$LQGLFDWLQJVHOIUHSOLFDWLQJ51$YLURLGVDQGIUHH
'1$ LQGLFDWLQJ JHQHUDWLRQ RI YLURLG FRPSOHPHQWDU\ '1$ VWUDQGV E\ DUFKDHDO UHYHUVH
WUDQVFULSWDVHDFWLYLW\7KHDFWLQLGHVPRGXODWH51$IROGLQJDQGFDWDO\VHLWVULER]\PDODFWLRQ
'LJR[LQFDQFXWDQGSDVWHWKHYLURLGDOVWUDQGVE\PRGXODWLQJ51$VSOLFLQJJHQHUDWLQJ51$
YLURLGDOGLYHUVLW\7KHYLURLGVDUHHYROXWLRQDULO\HVFDSHGDUFKDHDOJURXS,LQWURQVZKLFKKDYH
UHWURWUDQVSRVLWLRQ DQG VHOI VSOLFLQJ TXDOLWLHV $UFKDHDO S\UXYDWH FDQ SURGXFH KLVWRQH
GHDFHW\ODVH LQKLELWLRQ UHVXOWLQJ LQ HQGRJHQRXV UHWURYLUDO +(59 UHYHUVH WUDQVFULSWDVH DQG
LQWHJUDVHH[SUHVVLRQ7KLVFDQLQWHJUDWHWKH51$YLURLGDOFRPSOHPHQWDU\'1$LQWRWKHQRQ
FRGLQJ UHJLRQ RI HXNDU\RWLF QRQFRGLQJ '1$ XVLQJ +(59 LQWHJUDVH DV KDV EHHQ GHVFULEHG
IRU ERUQD DQG HEROD YLUXVHV 7KH QRQFRGLQJ '1$ LV OHQJWKHQHG E\ LQWHJUDWLQJ 51$
YLURLGDO FRPSOHPHQWDU\ '1$ ZLWK WKH LQWHJUDWLRQ JRLQJ RQ DV D FRQWLQXLQJ HYHQW 7KH
DUFKDHD JHQRPH FDQ DOVR JHW LQWHJUDWHG LQWR KXPDQ JHQRPH XVLQJ LQWHJUDVH DV KDV EHHQ
GHVFULEHG IRU WU\SDQRVRPHV 7KH LQWHJUDWHG YLURLGV DQG DUFKDHD FDQ XQGHUJR YHUWLFDO
WUDQVPLVVLRQ DQG FDQ H[LVW DV JHQRPLF SDUDVLWHV 7KLV LQFUHDVHV WKH OHQJWK DQG DOWHUV WKH
JUDPPDURIWKHQRQFRGLQJUHJLRQSURGXFLQJPHPHVRUPHPRU\RIDFTXLUHGFKDUDFWHUV7KH
YLURLGDO FRPSOHPHQWDU\ '1$ FDQ IXQFWLRQ DV MXPSLQJ JHQHV SURGXFLQJ D G\QDPLF
JHQRPH
7KHSUHVHQFHRIPXUDPLFDFLG+0*&R$UHGXFWDVHDQGFKROHVWHUROR[LGDVHDFWLYLW\
LQKLELWHG E\ DQWLELRWLFV LQGLFDWHV WKH SUHVHQFH RI EDFWHULD ZLWK PHYDORQDWH SDWKZD\ 7KH

EDFWHULDO ZLWK PHYDORQDWH SDWKZD\ LQFOXGH VWUHSWRFRFFXV VWDSK\ORFRFFXV DFWLQRP\FHWHV
OLVWHULD FR[LHOOD DQG ERUUHOLD 7KH EDFWHULD DQG DUFKDHD ZLWK PHYDORQDWH SDWKZD\ DQG
FKROHVWHUROFDWDEROLVPKDGDQHYROXWLRQDULO\DGYDQWDJHDQGFRQVWLWXWHVWKHLVRSUHQRLGDOFODGH
RUJDQLVP 7KH DUFKDHD HYROYHG LQWR PHYDORQDWH SDWKZD\ JUDP SRVLWLYH DQG JUDP QHJDWLYH
LVRSUHQRLGFODGHRUJDQLVPWKURXJKKRUL]RQWDOJHQHWUDQVIHURIYLURLGDODQGYLUXVJHQHV7KH
LVRSUHQRLGDOFODGHSURNDU\RWHVGHYHORSLQWRRWKHUJURXSVRISURNDU\RWHVYLDYLURLGDOYLUXVDV
ZHOODVHXNDU\RWLFKRUL]RQWDOJHQHWUDQVIHUSURGXFLQJEDFWHULDOVSHFLDWLRQ
7KH51$YLURLGVDQGLWVFRPSOHPHQWDU\'1$GHYHORSHGLQWRFKROHVWHUROHQYHORSHG
51$DQG'1$YLUXVHVOLNHKHUSHVUHWURYLUXVLQIOXHQ]DYLUXVERUQDYLUXVF\WRPHJDORYLUXV
DQG HSVWHLQ EDUU YLUXV E\ UHFRPELQLQJ ZLWK HXNDU\RWLF DQG KXPDQ JHQHV UHVXOWLQJ LQ YLUDO
VSHFLDWLRQ%DFWHULDODQGYLUDOVSHFLHVDUHLOOGHILQHGDQGIX]]\ZLWKDOORIWKHPIRUPLQJRQH
FRPPRQJHQHWLFSRROZLWKIUHTXHQWKRUL]RQWDOJHQHWUDQVIHUDQGUHFRPELQDWLRQ
7KXV WKH PXOWL DQG XQLFHOOXODU HXNDU\RWH ZLWK LWV JHQHV VHUYHV WKH SXUSRVH RI
SURNDU\RWLF DQG YLUDO VSHFLDWLRQ 7KH PXOWLFHOOXODU HXNDU\RWH GHYHORSHG VR WKDW WKHLU
HQGRV\PELRWLF DUFKDHDO FRORQLHV FRXOG VXUYLYH DQG IRUDJH EHWWHU 7KH PXOWLFHOOXODU
HXNDU\RWHVDUHOLNHEDFWHULDOELRILOPV7KHDUFKDHDDQGEDFWHULDZLWKDPHYDORQDWHSDWKZD\
XVHV WKH H[WUDFHOOXODU 51$ YLURLGV DQG '1$ YLURLGV IRU TXRUXP VHQVLQJ DQG LQ WKH
JHQHUDWLRQRIV\PELRWLFELRILOPOLNHVWUXFWXUHVZKLFKGHYHORSLQWRPXOWLFHOOXODUHXNDU\RWHV
7KHHQGRV\PELRWLFDUFKDHDDQGEDFWHULDZLWKPHYDORQDWHSDWKZD\VWLOOXVHVWKH51$YLURLGV
DQG'1$YLURLGVIRUWKHUHJXODWLRQRIPXOWLFHOOXODUHXNDU\RWH
3ROOXWLRQ LV D PDMRU LQGXFHU RI HYROXWLRQDU\ LQQRYDWLRQ 3ROOXWLRQ LV LQGXFHG E\ WKH
SULPLWLYH QDQRDUFKDHD DQG PHYDORQDWH SDWKZD\ EDFWHULD V\QWKHVL]HG 3$+ DQG PHWKDQH
OHDGLQJRQWRUHGR[VWUHVV5HGR[VWUHVVOHDGVWRVRGLXPSRWDVVLXP$73DVHLQKLELWLRQLQZDUG
PRYHPHQWRISODVPDPHPEUDQHFKROHVWHUROGHIHFWLYH65(%3VHQVLQJLQFUHDVHGFKROHVWHURO
V\QWKHVLV DQG QDQRDUFKDHDOPHYDORQDWH SDWKZD\ EDFWHULDO JURZWK 5HGR[ VWUHVV OHDGV RQ WR
YLURLGDO DQG DUFKDHDO PXOWLSOLFDWLRQ 5HGR[ VWUHVV FDQ DOVR OHDG WR +(59 UHYHUVH
WUDQVFULSWDVH DQG LQWHJUDVH H[SUHVVLRQ 7KH QRQFRGLQJ '1$ LV IRUPHG RI LQWHJUDWLQJ 51$
YLURLGDO FRPSOHPHQWDU\ '1$ DQG DUFKDHD ZLWK WKH LQWHJUDWLRQ JRLQJ RQ DV D FRQWLQXLQJ
HYHQW7KHDUFKDHDOSR[OLNHGV'1$YLUXVIRUPVHYROXWLRQDULO\WKHQXFOHXV7KHLQWHJUDWHG
YLURLGDO DUFKDHDO DQG PHYDORQDWH SDWKZD\ EDFWHULDO VHTXHQFHV FDQ XQGHUJR YHUWLFDO
WUDQVPLVVLRQDQGFDQH[LVWDVJHQRPLFSDUDVLWHV7KHJHQRPLFLQWHJUDWHGDUFKDHDPHYDORQDWH
SDWKZD\ EDFWHULD DQG YLURLGV IRUP D JHQRPLF UHVHUYH RI EDFWHULD DQG YLUXVHV ZKLFK FDQ

UHFRPELQH ZLWK KXPDQ DQG HXNDU\RWLF JHQHV SURGXFLQJ EDFWHULDO DQG YLUDO VSHFLDWLRQ 7KH
FKDQJHLQWKHOHQJWKDQGJUDPPDURIWKHQRQFRGLQJUHJLRQSURGXFHVHXNDU\RWLFVSHFLDWLRQ
DQG LQGLYLGXDOLW\ 7KH LQWHJUDWLRQ RI QDQRDUFKDHD PHYDORQDWH SDWKZD\ SURNDU\RWHV DQG
YLURLGV LQ WR WKH HXNDU\RWLF DQG KXPDQ JHQRPH SURGXFHV D FKLPHUD ZKLFK FDQ PXOWLSO\
SURGXFLQJELRILOPOLNHPXOWLFHOOXODUVWUXFWXUHVKDYLQJDPL[HGDUFKDHDOYLURLGDOSURNDU\RWLF
DQGHXNDU\RWLFFKDUDFWHUVZKLFKLVDUHJUHVVLRQIURPWKHPXOWLFHOOXODUHXNDU\RWLFWLVVXH7KLV
UHVXOWV LQ D QHZ QHXURQDO PHWDEROLF LPPXQH DQG WLVVXH SKHQRW\SH OHDGLQJ WR KXPDQ
GLVHDVH
3ROOXWLRQ ZRXOG KDYH EHHQ D PDMRU IDFWRU LQ HXNDU\RWLF VSHFLDWLRQ DQG SULPDWH
KRPLQLGHYROXWLRQ7KHFKDQJHLQWKHOHQJWKDQGJUDPPDURIWKHQRQFRGLQJUHJLRQSURGXFHV
HXNDU\RWLF VSHFLDWLRQ DQG LQGLYLGXDOLW\ ,W LV WKH LQFUHDVH LQ QRQFRGLQJ UHJLRQ DQG +(59
VHTXHQFHVRIWKHJHQRPHWKDWOHGWRWKHHYROXWLRQRIWKHSULPDWHDQGWKHKXPDQEUDLQDQGLWV
DWWHQGDQW SURSHUW\ RI FRQVFLRXV DQG TXDQWDO SHUFHSWLRQ ,W LV WKH QRQFRGLQJ UHJLRQ RI WKH
JHQRPH ZLWK LWV DUFKDHDO 51$ YLURLGDO FRPSOHPHQWDU\ '1$ DQG +(59 VHTXHQFHV WKDW
PDNHV IRU WKH KXPDQ TXDOLWLHV RI WKH KRPLQLG EUDLQ &KDQJHV LQ WKH OHQJWK RI QRQFRGLQJ
UHJLRQFDQOHDGRQWRGLVRUGHUVRIFRQVFLRXVQHVVOLNHVFKL]RSKUHQLD$VFKL]RSKUHQLDVSHFLILF
KXPDQ HQGRJHQRXV UHWURYLUXVHV DQG FKDQJH LQ WKH OHQJWK DQG JUDPPDU RI WKH QRQFRGLQJ
UHJLRQKDVEHHQGHVFULEHGLQVFKL]RSKUHQLD
$Q DFWLQLGH GHSHQGHQW VKDGRZ ELRVSKHUH RI DUFKDHD DQG YLURLGV LQ WKH DERYH
PHQWLRQHGGLVHDVHVWDWHVLVGHVFULEHG0HWDODFWLQLGHVLQEHDFKVDQGVKDYHEHHQSRVWXODWHGWR
SOD\ D UROH LQ DELRJHQHVLV &KROHVWHURO LV WKH SULPDO SUHELRWLF PROHFXOH V\QWKHVL]HG RQ
DFWLQLGH VXUIDFHV ZLWK DOO RWKHU ELRPROHFXOHV DULVLQJ IURP LW $ VHOI UHSOLFDWLQJ FKROHVWHURO
OLSLGRUJDQLVPFRXOGEHWKHLQLWLDOOLIHIRUP$FKROHVWHUROEDVHGDELRJHQHVLVLVDPRUHOLNHO\
HYROXWLRQDU\ RSWLRQ DQG WKH DFWLQLGLF DUFKDHD DQG YLURLGV ZRXOG KDYH HYROYHG IURP LW 7KH
RULJLQ RI YLUXVHV SURNDU\RWHV HXNDU\RWHV SULPDWHV DQG KXPDQV IURP WKH LQLWLDO LVRSUHQRLG
RUJDQLVPGHULYHGDFWLQLGLFDUFKDHDLVGLVFXVVHG
5HIHUHQFHV
9DOLDWKDQ 06 6RPHUV . .DUWKD && (QGRP\RFDUGLDO )LEURVLV 'HOKL
2[IRUG8QLYHUVLW\3UHVV
.XUXS5.XUXS3$+\SRWKDODPLF'LJR[LQ&HUHEUDO'RPLQDQFHDQG%UDLQ
)XQFWLRQLQ+HDOWKDQG'LVHDVHV1HZ<RUN1RYD6FLHQFH3XEOLVKHUV
+DQROG'5DQGLHV-:&RFRQXWFDGDQJFDGDQJGLVHDVHDQGLWVYLURLGDJHQW
3ODQW'LVHDVH

(GZLQ%70RKDQNXPDUDQ&.HUDODZLOWGLVHDVHSK\WRSODVPD3K\ORJHQHWLF
DQDO\VLV DQG LGHQWLILFDWLRQ RI D YHFWRU 3URXWLVWD PRHVWD 3K\VLRORJLFDO DQG 0ROHFXODU
3ODQW3DWKRORJ\
(FNEXUJ 3% /HSS 3: 5HOPDQ '$ $UFKDHD DQG WKHLU SRWHQWLDO UROH LQ
KXPDQGLVHDVH,QIHFW,PPXQ
$GDP=$FWLQLGHVDQG/LIH¶V2ULJLQV$VWURELRORJ\
6FKRQHU : (QGRJHQRXV FDUGLDF JO\FRVLGHV D QHZ FODVV RI VWHURLG KRUPRQHV
(XU-%LRFKHP
'DYLHV 3&: %HQQHU 6$ &OHODQG &( /LQHZHDYHU &+ 0F.D\ &3 :ROIH
6LPRQ)6LJQDWXUHVRID6KDGRZ%LRVSKHUH$VWURELRORJ\
:lFKWHUVKlXVHU * %HIRUH HQ]\PHV DQG WHPSODWHV WKHRU\ RI VXUIDFH
PHWDEROLVP0LFURELRO5HY
5LFKPRQG:3UHSDUDWLRQDQGSURSHUWLHVRIDFKROHVWHUROR[LGDVHIURPQRFDUGLD
VSHFLHV DQG LWV DSSOLFDWLRQ WR WKH HQ]\PDWLF DVVD\ RI WRWDO FKROHVWHURO LQ VHUXP &OLQ
&KHP
6QHOO (' 6QHOO &7 &RORULPHWULF 0HWKRGV RI $QDO\VLV 9RO $ 1HZ <RUN
9DQ1R6WUDQG
*OLFN ' 0HWKRGV RI %LRFKHPLFDO $QDO\VLV 9RO 1HZ <RUN ,QWHUVFLHQFH
3XEOLVKHUV
&RORZLFN.DSODQ120HWKRGVLQ(Q]\PRORJ\9RO1HZ<RUN$FDGHPLF
3UHVV
0DDUWHQ $+ 0DULH-RVH 0 &RUQHOLD * YDQ +HOGHQ±0HHZVHQ )ULW] ( 0DUWHQ
3+'HWHFWLRQRIPXUDPLFDFLGLQKXPDQVSOHHQ,QIHFWLRQDQG,PPXQLW\
±
6PLW$0XVKHJLDQ$%LRV\QWKHVLVRILVRSUHQRLGVYLDPHYDORQDWHLQ$UFKDHD
WKHORVWSDWKZD\*HQRPH5HV
9DQ GHU *HL]H 5 <DP . +HXVHU 7 :LOEULQN 0+ +DUD + $QGHUWRQ 0&
$JHQHFOXVWHUHQFRGLQJFKROHVWHUROFDWDEROLVPLQDVRLODFWLQRP\FHWHSURYLGHV
LQVLJKW LQWR 0\FREDFWHULXP WXEHUFXORVLV VXUYLYDO LQ PDFURSKDJHV 3URF 1DWO $FDG 6FL
86$
)UDQFLV $- %LRWUDQVIRUPDWLRQ RI XUDQLXP DQG RWKHU DFWLQLGHV LQ UDGLRDFWLYH
ZDVWHV-RXUQDORI$OOR\VDQG&RPSRXQGV
3URELDQ & :OILQJ $ +DUGHU - $QDHURELF PLQHUDOL]DWLRQ RI TXDWHUQDU\
FDUERQDWRPV,VRODWLRQRIGHQLWULI\LQJEDFWHULDRQSLYDOLFDFLG'LPHWK\OSURSLRQLF
DFLG$SSOLHGDQG(QYLURQPHQWDO0LFURELRORJ\
9DLQVKWHLQ06X]LQD1.XGU\DVKRYD($ULVNLQD(1HZ0DJQHW6HQVLWLYH
6WUXFWXUHVLQ%DFWHULDODQG$UFKDHDO&HOOV%LRO&HOO
5XVVHOO0-0DUWLQ:7KHURFN\URRWVRIWKHDFHW\O&R$3DWKZD\7UHQGVLQ
%LRFKHPLFDO6FLHQFHV
0DUJXOLV/$UFKDHDOHXEDFWHULDOPHUJHUVLQWKHRULJLQRI(XNDU\DSK\ORJHQHWLF
FODVVLILFDWLRQRIOLIH3URF1DWO$FDG6FL86$

7VDJULV (0 GH $OED $( *R]PDQRYD 0 .DODQWLGLV . 9LURLGV &HOO
0LFURELRO
+RULH 0 +RQGD 7 6X]XNL < .RED\DVKL < 'DLWR 7 2VKLGD 7
(QGRJHQRXV QRQUHWURYLUDO 51$ YLUXV HOHPHQWV LQ PDPPDOLDQ JHQRPHV 1DWXUH

+HFKW 0 1LW] 1 $UDXMR 3 6RXVD $ 5RVD $ *RPHV ' *HQHV IURP
&KDJDV SDUDVLWH FDQ WUDQVIHU WR KXPDQV DQG EH SDVVHG RQ WR FKLOGUHQ ,QKHULWDQFH RI
'1$7UDQVIHUUHGIURP$PHULFDQ7U\SDQRVRPHVWR+XPDQ+RVWV3/R621(
)ODP)+LQWVRIDODQJXDJHLQMXQN'1$6FLHQFH
+RUEDFK 6 6DKP + :HOOH 5 ,VRSUHQRLG ELRV\QWKHVLV LQ EDFWHULD WZR
GLIIHUHQWSDWKZD\V")(060LFURELRO/HWW±
*XSWD 56 3URWHLQ SK\ORJHQHWLFV DQG VLJQDWXUH VHTXHQFHV D UHDSSUDLVDO RI
HYROXWLRQDU\ UHODWLRQVKLS DPRQJ DUFKDHEDFWHULD HXEDFWHULD DQG HXNDU\RWHV 0LFURELRO
0RO%LRO5HY±
+DQDJH:)UDVHU&6SUDWW%)X]]\VSHFLHVDPRQJUHFRPELQRJHQLFEDFWHULD
%0&%LRORJ\
:KLWFKXUFK &% 7RONHU1LHOVHQ 7 5DJDV 3& 0DWWLFN -6 ([WUDFHOOXODU
'1$5HTXLUHGIRU%DFWHULDO%LRILOP)RUPDWLRQ6FLHQFH
:HEE -6 *LYVNRY 0 .MHOOHEHUJ 6 %DFWHULDO ELRILOPV SURNDU\RWLF
DGYHQWXUHVLQPXOWLFHOOXODULW\&XUU2SLQ0LFURELRO±
&KHQ < &DL 7 :DQJ + /L = /RUHDX[ ( /LQJUHO -% 5HJXODWLRQ RI
LQWUDFHOOXODUFKROHVWHUROGLVWULEXWLRQE\1D.$73DVH-%LRO&KHP
3RROH $0 'LG JURXS ,, LQWURQ SUROLIHUDWLRQ LQ DQ HQGRV\PELRQWEHDULQJ
DUFKDHRQFUHDWHHXNDU\RWHV"%LRO'LUHFW
9LOODUUHDO /3 +RZ YLUXVHV VKDSH WKH WUHH RI OLIH )XWXUH 9LURORJ\

/RFNZRRG00LQG%UDLQDQGWKH4XDQWXP2[IRUG%%ODFNZHOO

&+$37(5
&$7$67523+,&9,5$/3$1'(0,&6$6$&217,18,1*(92/87,21$5<
&520$*121+2026$3,(1±1($1'(57+$/&21)/,&7

,QWURGXFWLRQ
7KHH[WUHPHVRIFOLPDWHFKDQJHSURGXFHHQGRV\PELRWLFDUFKDHDOJURZWK7KHDUFKDHD
DUHFKROHVWHUROFDWDEROLVLQJRUJDQLVP7KLVUHVXOWVLQQHDQGHUWKDOLVDWLRQRIWKHKXPDQVSHFLHV
7KLVRFFXUUHGGXULQJWKHLFHDJHDQGLVSRVVLEO\DFRQWLQXLQJSKHQRPHQRQGXULQJWKHSHULRGV
RI JOREDO ZDUPLQJ 7KH KRPR QHDQGHUWKDOLV DUH PDWULOLQHDO DQG WKH UHVLGXDO PDWULOLQHDO
VRFLHWLHV RI WKH 'UDYLGLDQV 6HPLWHV %DVTXHV &HOWV DQG %HUEHUV DUH QHDQGHUWKDOLF 7KH
JOREDO ZDUPLQJ SURGXFHV HQGRV\PELRWLF DUFKDHDO JURZWK DQG QHDQGHUWKDOLVDWLRQ 7KLV
SURGXFHV EUDLQ FKDQJHV ZLWK WKH FHUHEUDO FRUWH[ EHFRPLQJ G\VIXQFWLRQDO DQG FHUHEHOOXP
EHFRPLQJ GRPLQDQW 7KLV LV GXH WR LQFUHDVHG SHUFHSWLRQ RI ORZ OHYHO (0) E\ DUFKDHDO
PDJQHWLWH 7KLV SURGXFHV FKDQJHV LQ KXPDQ VRFLHW\ EHKDYLRU DQG GLVHDVH SDWWHUQV 7KH
KRPR QHDQGHUWKDOLV SRSXODWLRQ LV VXVFHSWLEOH WR FLYLOL]DWLRQDO GLVHDVHV OLNH VFKL]RSKUHQLD
DXWLVP PHWDEROLF V\QGURPH ; GLDEHWHV PHOOLWXV FRURQDU\ DUWHU\ GLVHDVH VWURNH
QHXURGHJHQHUDWLRQ DQG DXWRLPPXQH GLVHDVH 7KH KRPR VDSLHQ SRSXODWLRQ VXIIHUV IURP
HQGHPLFGHSUHVVLRQDQGODFNRIFUHDWLYLW\ZLWKDSURSHQVLW\WRGHYHORSUHFXUUHQWLQIHFWLRQV
7KH KRPR VDSLHQ SRSXODWLRQ LV UHODWLYHO\ SURWHFWHG IURP FLYLOL]DWLRQDO GLVHDVHV 7KH
1HDQGHUWKDOV FRQVHTXHQW WR DUFKDHDO V\PELRVLV FDQ JHQHUDWH QHZ YLUXVHV VHUYLQJ DV YLUDO
UHVHUYRLUV 7KH DUFKDHDO HQGRV\PELRVLV LQ 1HDQGHUWKDOV SURGXFHV VWHP FHOO WUDQVIRUPDWLRQ
SURWHFWLQJ WKH VWHP FHOO UHVHUYRLUV RI YLUXVHV IURP LPPXQH DWWDFN 7KHVH QHZO\ JHQHUDWHG
YLUXVHVLQKRPRQHDQGHUWKDOLVWRZKLFKWKH\DUHLPPXQHFDQDWWDFNDQGH[WHUPLQDWHWKHKRPR
VDSLHQ SRSXODWLRQ 7KH $U\R'UDYLGLDQ SRSXODWLRQ RI 6RXWK ,QGLD HVSHFLDOO\ .HUDOD LV
QHDQGHUWKDOLFDQGWKLVSURGXFHVDQHQGRJHQRXVUHVLVWDQFHWR&RYLGGLVHDVHWKRXJK&RYLG
FDQEHGHWHFWHGLQWKH$U\R'UDYLGLDQ1HDQGHUWKDOLFSRSXODWLRQ$UFKDHDOHQGRV\PELRVLV
OHDGV WR QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV 7KH FRORQLF DUFKDHD DOVR JHQHUDWHV 51$ YLURLGV
ZKLFK DUH FRQYHUWHG WR '1$ YLURLGV E\ FRORQLF HSLWKHOLDO +(59 UHYHUVH WUDQVFULSWDVH DQG
JHWV LQWHJUDWHG LQWR WKH FRORQLF JHQRPH 7KH 51$ DQG '1$ YLURLGV K\EULGLVH ZLWK WKH
YLURLGDODQGEDFWHULDOSRSXODWLRQRIWKHJXWPLFURELRPHDQGYLURELRPH'1$DQG51$RIWKH
JXWOHDGLQJWRJHQHUDWLRQRIQHZHPHUJLQJYLUXVHVOLNH&RYLG
7KHUHLVDQHWHUQDOFRQIOLFWEHWZHHQ1HDQGHUWKDOVDQG&URPDJQRQKRPRVDSLHQV7KH
&URPDJQRQWULHGWRH[WHUPLQDWHWKH1HDQGHUWKDOVEXWWKH\VXUYLYHGDVWKH-HZV$UDEVWKH

ORZHUFDVWH,QGLDQVDERULJLQDOVDQGQDWLYH$PHULFDQV7KHVHDUHWKHSHRSOHZKLFKWKH&UR
PDJQRQ H[FOXGHG IURP VRFLHW\ 7KH XQGHUFODVV RI ,QGLDQ DQG (XURSHDQ FLYLOL]DWLRQ ZDV
QHDQGHUWKDOLF :LWK WKH DGYHQW RI JOREDO ZDUPLQJ DQG LQFUHDVLQJ DUFKDHDO V\PELRVLV WKH
QHDQGHUWKDOLF SRSXODWLRQ EHFRPHV DFWLYDWHG DQG WKH\ WU\ WR H[WHUPLQDWH WKH &URPDJQRQ
VHFWLRQ RI SRSXODWLRQ 7KH V\PELRWLF DUFKDHD JHQHUDWHV QHZ YLUXVHV ZKLFK LQIHFWV WKH QRQ
LPPXQH &URPDJQRQ DQG WULHV WR H[WHUPLQDWH WKHP 7KH KRW VSRWV RI JOREDO FRQIOLFW DQG
WHUURULVP FDQ EH ORFDOL]HG WR QHDQGHUWKDOLF DUHDV 7KH 1HDQGHUWKDOV GRPLQDWH WKUHH ZRUOG
UHOLJLRQV -HZV 0XVOLPV DQG +LQGXV 7KH &URPDJQRQ DUH SUHGRPLQDQWO\ WKH $IULFDQV DQG
WKH(XURSHDQV7KH\IROORZWKH&KULVWLDQUHOLJLRQ:RUOGFRQIOLFWVDUHEDVLFDOO\EHWZHHQWKH
QHDQGHUWKDOLFUDFHVDQGWKH&URPDJQRQUDFHV
7KHUHLVDKLJKLQFLGHQFHRIDXWLVPDQG1HDQGHUWKDODQWKURSRPHWULFSKHQRW\SHVLQWKH
QDLUFRPPXQLW\RI.HUDOD7KHQDLUFRPPXQLW\LVPDWULOLQHDODQGLVRQHRIWKHIHZIXQFWLRQDO
PDWULDUFKLHV LQ WKH ZRUOG DQG VSHDNV WKH 'UDYLGLDQ ODQJXDJH ZLWK VLPLODULWLHV WR &HOWLF
6F\WKLDQ %HUEHU DQG %DVTXH VRFLHWLHV 7KH DXWLVWLF EUDLQ LV FRPSDUDEOH WR WKH ODUJH VL]HG
1HDQGHUWKDOEUDLQ$XWLVWLFDQGPDWULOLQHDOVRFLHWLHVOLNHQDLUFDQEHFRQVLGHUHGDVIRVVLOL]HG
UHPQDQWVRIWKH1HDQGHUWKDOSRSXODWLRQ(QGRV\PELRWLFDFWLQLGLFDUFKDHDXVLQJFKROHVWHURODV
DQHQHUJ\VXEVWUDWHKDVEHHQGHVFULEHGLQV\VWHPLFGLVHDVHIURPRXUODERUDWRU\7KHDXWLVWLF
DQGQDLUSRSXODWLRQZHUHVWXGLHGIRUDFWLQLGHGHSHQGHQWF\WRFKURPH)DFWLYLW\VXJJHVWLYH
RI HQGRV\PELRWLF DUFKDHDO JURZWK 7KLV K\SRWKHVLV ZDV VWXGLHG E\ HYDOXDWLQJ WKH
HQGRV\PELRWLFDUFKDHDOJURZWKLQSRSXODWLRQVGHULYHGIURPPDWULOLQHDOVRFLHWLHV

0DWHULDOVDQG0HWKRGV
7KUHH JURXSV QXPEHUV LQ HDFK JURXS ZHUH FKRVHQ IRU WKH VWXG\ WKH DXWLVWLF
SRSXODWLRQGLDJQRVHGDFFRUGLQJWR'60FULWHULDWKHQRUPDOQDLUSRSXODWLRQDQGWKHQRUPDO
QRQQDLU SRSXODWLRQ 7KH PDWULOLQHDO FKDUDFWHULVWLFV DQG 1HDQGHUWKDO DQWKURSRPHWULF
FKDUDFWHULVWLFV RI QRUPDO QDLU DQG QRQQDLU SRSXODWLRQ DV ZHOO DV DXWLVWLF SRSXODWLRQ ZHUH
VWXGLHG 7KH EORRG VDPSOHV ZHUH GUDZQ LQ WKH IDVWLQJ VWDWH EHIRUH WUHDWPHQW ZDV LQLWLDWHG
7KH HVWLPDWLRQV GRQH LQ WKH EORRG VDPSOHV FROOHFWHG LQFOXGH F\WRFKURPH ) DFWLYLW\
&\WRFKURPH ) ZDV HVWLPDWHG IORXULPHWULFDOO\ H[FLWDWLRQ ZDYHOHQJWK QP DQG
HPLVVLRQZDYHOHQJWKQP7KHVWDWLVWLFDODQDO\VLVZDVGRQHE\$129$
5HVXOWV

7KH UHVXOWV RI WKH VWXG\ ZHUH DV IROORZV 7KH QDLU DQG DXWLVWLF DQG FLYLOLVDWLRQDO
GLVHDVHJURXSKDGLQFUHDVHGF\WRFKURPH)DFWLYLW\
7DEOH,QFLGHQFHRIDXWLVPLQQDLUDXWLVWLFDQGQRQQDLUSRSXODWLRQ
*URXSV $XWLVP 3HUFHQWDJH
1DLU FDVHV
1RQQDLU FDVHV
7RWDO
7DEOH$QWKURSRPHWULFIHDWXUHVLQQDLUDXWLVWLFDQGQRQQDLUSRSXODWLRQ
1HDQGHUWKDO
*URXSV 7RWDO 3HUFHQWDJH
DQWKURSRPHWULF
1DLU FDVHV
1RQQDLU FDVHV
$XWLVP FDVHV
7DEOH1HDQGHUWKDOPHWDERORQRPLFV
1RQ
1DLU $XWLVP )YDOXH 3YDOXH
QDLU
0HDQ
&\WRFKURPH)
6'
'LVFXVVLRQ
1HDQGHUWKDOLVDWLRQLVDV\PELRWLFHYHQWGXHWRDUFKDHDOV\PELRVLV7KH1HDQGHUWKDOV
KDGLQFUHDVHGV\PELRWLFDFWLQLGLFDUFKDHDOJURZWK7KLVRFFXUVLQH[WUHPHVRIFOLPDWHOLNHLFH
DJH DQG JOREDO ZDUPLQJ 7KH KRPR QHDQGHUWKDOLV HYROYHG IURP WKH ERQRER SULPDWHV
FRQVHTXHQW WR WKLV V\PELRVLV 7KHUH LV LQFUHDVHG QHDQGHUWKDOLVDWLRQ RI KRPR VDSLHQV GXULQJ
JOREDOZDUPLQJFRQVHTXHQWWRLQFUHDVHGDFWLQLGLFDUFKDHDOJURZWK7KHKRPRQHDQGHUWKDOLV
QHYHUEHFDPHH[WLQFWEXWVXUYLYHVDVPDWULOLQHDOVRFLHWLHVLQWKHORZHU(XUDVLDQUHJLRQ7KH
LQLWLDO PDWULOLQHDO QHDQGHUWKDOLF FLYLOL]DWLRQV ZHUH WKH +DUDSSDQ 6XPHULDQ $NNDGLDQ
$VV\ULDQ (WUXVFDQ 0LQRDQ &HOWLF %DVTXH 6HPLWLF -HZLVK $UDELF $XVWUDOLDQ DERULJLQDO
FLYLOL]DWLRQ7KHFLYLOL]DWLRQVDUHDOOPDWULOLQHDO7KHLQLWLDOQHDQGHUWKDOLFFLYLOL]DWLRQVXUYLYHV
DV WKH ORZHU FDVWH VXGUDV RI ,QGLD 'UDYLGLDQV $XVWUDOLDQ DERULJLQDOV WKH 3HUVLDQV WKH
6HPLWLF $UDEV WKH 6HPLWLF -HZV WKH %HUEHUV WKH %DVTXH *UHHNV &HOWV DQG QDWLYH
$PHULFDQV7KHSHRSOHLQKDELWLQJWKHVHFLYLOL]DWLRQVDUHUHOLJLRXVLQWXLWLYHIHPLQLQHFKLOG

OLNHGUHDP\VRPQROHQWFRPPXQDOFRQVFLRXVSULPLWLYHVRFLDOLVWLFPRUHVH[XDOJURXSV7KH
ERG\ KDELWXV RI WKHVH SRSXODWLRQV DUH VKRUWHU VORSLQJ IRUHKHDG UHFHVVLYH FKLQ DQG PRUH
IDLUHULQFRORXU7KLVLVRSSRVHGWRWKH&URPDJQRQSRSXODWLRQLQWKHQRUWKHUQSDUWRI(XUDVLD
DQG $IULFD 7KHVH SRSXODWLRQV DUH VFLHQWLILF ORJLFDO PLQGHG SDWULDUFKDO PRUH DGXOWOLNH
PRUHZDNHIXOIDVFLVWDQGOHVVVH[XDO7KHQHDQGHUWKDOLFSRSXODWLRQVLQKDELWWKH,QGLDQRFHDQ
ULPLQVRXWKHUQ$VLDZHVW$VLDDVZHOODVLQWKHSHULPHGLWHUUDQHDQUHJLRQ7KH1HDQGHUWKDOV
RULJLQDWHG LQLWLDOO\ IURP WKH P\WKLFDO OHPXULDQ VXSHUFRQWLQHQW LQ WKH ,QGLDQ RFHDQ 7KH
HDUWKTXDNHVDQGWVXQDPLVLQWKH,QGLDQRFHDQOHGWRWKHEUHDNDJHRIWKHVXSHUFRQWLQHQWDQG
PLJUDWLRQ RI 1HDQGHUWKDOV WR +DUDSSD 6XPHULD (J\SW DQG %DVTXH 7KH +DUDSSDQ
FLYLOLVDWLRQZDVSUHGRPLQDQWO\QHDQGHUWKDOLF7KH\DUHWKHDVXUDVGHVFULEHGLQWKH5LJYHGD
0RVWRIWKHGHVFULSWLRQVLQWKH5LJYHGDSHUWDLQWRWKHDVXUDVZLWKWKH5LJYHGLF*RGVEHLQJ
SUHGRPLQDQWO\DVXULF6DQVNULWZDVSRVVLEO\WKH+DUDSSDQODQJXDJH7KHGHYDVGHVFULEHGLQ
WKH 5LJ YHGD ZHUH WKH &URPDJQRQ $U\DQ LQYDGHUV 7KH 5LJ YHGD GHVFULEHV FRQWLQXLQJ
FRQIOLFW EHWZHHQ WKH DVXUDV DQG WKH GHYDV )LQDOO\ WKH QHDQGHUWKDOLF +DUDSSDQ DVXUDV ZHUH
VXEGXHGDQGFRQTXHUHG7KHFURPDJQRQLF$U\DQVZKRFRQTXHUHG+DUDSSDEHFDPHWKHXSSHU
FDVWH+LQGXHOLWHDQGWKH+DUDSSDQVDVXUDVEHFDPHWKHORZHUFDVWHVXGUDV7KH&URPDJQRQ
$U\DQVWRRNRYHUWKHDVXULF*RGV9HGDVDQGODQJXDJHDQGPDGHLWWKHLURZQ7KH+DUDSSDQ
FLYLOL]DWLRQ RI WKH DVXUDV ZDV H[WUHPHO\ DGYDQFHG DQG WKH &URPDJQRQ $U\DQV ZHUH D
SULPLWLYHQRPDGLFWULEH7KH&URPDJQRQRULJLQDWHGLQ$IULFDDQGPLJUDWHGWR(XUDVLD7KH
&URPDJQRQSRSXODWLRQVXEGXHGWKHQHDQGHUWKDOLFSRSXODWLRQDQGWULHGWRH[WHUPLQDWHWKHP
7KHUH ZDV DOVR LQWHUEUHHGLQJ DQG LQWHUPL[LQJ EHWZHHQ WKH &URPDJQRQ DQG QHDQGHUWKDOLF
SRSXODWLRQ 7KH PRGHUQ QHDQGHUWKDOLF VRFLHWLHV DUH LQ WKH SHUL,QGLDQ RFHDQ DUHD RI ,QGLD
,UDQ DQG 6HPLWLF $UDEV 7KH\ DOVR LQKDELW WKH SHULPHGLWHUUDQHDQ DUHD DV 6HPLWLF -HZV
%HUEHUV %DVTXH DQG &HOWV 7KH SUHGRPLQDQW $IULFDQ DQG QRUWK (XURSHDQ SRSXODWLRQ LV
&URPDJQRQ
7KHUH LV DQ HWHUQDO FRQIOLFW EHWZHHQ 1HDQGHUWKDOV DQG &URPDJQRQ 7KH &URPDJQRQ
WULHG WR H[WHUPLQDWH WKH 1HDQGHUWKDOV EXW WKH\VXUYLYHG DV WKH -HZV $UDEV WKH ORZHU FDVWH
,QGLDQV DERULJLQDOV DQG QDWLYH $PHULFDQV 7KHVH DUH WKH SHRSOH ZKLFK WKH &URPDJQRQ
H[FOXGHGIURPVRFLHW\7KHXQGHUFODVVRI,QGLDQDQG(XURSHDQFLYLOL]DWLRQZDVQHDQGHUWKDOLF
:LWK WKH DGYHQW RI JOREDO ZDUPLQJ DQ LQFUHDVLQJ DUFKDHDO V\PELRVLV WKH QHDQGHUWKDOLF
SRSXODWLRQ EHFRPHV DFWLYDWHG DQG WKH\ WU\ WR H[WHUPLQDWH WKH &URPDJQRQ 7KH V\PELRWLF
DUFKDHD JHQHUDWHV QHZ YLUXVHV ZKLFK LQIHFWV WKH QRQ LPPXQH &URPDJQRQ DQG WULHV WR
H[WHUPLQDWH WKHP 7KH KRW VSRWV RI JOREDO FRQIOLFW DQG WHUURULVP FDQ EH ORFDOL]HG WR

QHDQGHUWKDOLF DUHDV 7KH 1HDQGHUWKDOV GRPLQDWH WKUHH ZRUOG UHOLJLRQV -HZV 0XVOLPV DQG
+LQGXV7KH&URPDJQRQDUHSUHGRPLQDQWO\WKH$IULFDQVDQGWKH(XURSHDQV7KH\IROORZWKH
&KULVWLDQ UHOLJLRQ :RUOG FRQIOLFWV DUH EDVLFDOO\ EHWZHHQ WKH QHDQGHUWKDOLF UDFHV DQG WKH
&URPDJQRQ UDFHV 7KLV LV H[HPSOLILHG E\ WKH -HZLVK OHDGHUVKLS RI WKH 5XVVLDQ DQG )UHQFK
UHYROXWLRQVZLWKLWVLGHDRIOLEHUW\HTXDOLW\DQGIUDWHUQLW\7KHQHDQGHUWKDOLFLGHDVEDVLFDOO\
WULHG WR FUHDWH DQ HTXDO VRFLHW\ 7KH %XGGKLVW PRYHPHQW DQG UHOLJLRQ DPRQJ WKH UHOLJLRXV
ORZHU FDVWH RI ,QGLD FDQ EH WKRXJKW RI DV D QHDQGHUWKDOLF XSULVLQJ DJDLQVW WKH $U\DQ
&URPDJQRQGRPLQDWLRQ7KHSUHVHQWUXPEOLQJVLQWKH0XVOLP6HPLWLFZRUOGPDQLIHVWLQJDV
JOREDO WHUURULVP LV D UHIOHFWLRQ RI WKH QHDQGHUWKDOLF &URPDJQRQ FRQIOLFW 7KH FRQIOLFW LV
EDVLFDOO\EHWZHHQWKH&URPDJQRQLGHDVRIFRORQL]DWLRQFDSLWDOLVPIUHHPDUNHWJOREDOL]DWLRQ
ULJKWLVWIDVFLVWQD]LLGHDVDQGWKHQHDQGHUWKDOLFLGHDVRIHTXDOLW\GHPRFUDF\IUHHGRPDQG
VRFLDOLVP 7KH FURPDJQLF FLYLOL]DWLRQ SURGXFHV LQFUHDVHG JUHHQKRXVH JDVHV OHDGLQJ WR
LQFUHDVHG HQGRV\PELRWLF DUFKDHDO JURZWK (QGRV\PELRWLF DUFKDHDO JURZWK LV WKH EDVLV RI
QHDQGHUWKDOLVDWLRQ 1HDQGHUWKDOLVDWLRQ LV D V\PELRWLF HYHQW DQG QRW D JHQHWLF FKDQJH 7KLV
UHVXOWVLQH[SDQVLRQRIWKHH[LVWLQJQHDQGHUWKDOLFVRFLHWLHVWKH6HPLWHVWKH'UDYLGLDQVDQG
VRXWKHUQ (XURSHDQV DQG H[WLQFWLRQ RI WKH &URPDJQRQ $U\DQ SKHQRW\SH 7KH SUHVHQW
QHDQGHUWKDOLF DUHDV LQFOXGH VRXWK (XURSH ,QGLD ,UDQ WKH $UDE SHQLQVXOD WKH -HZLVK
KRPHODQGDQGWKH$XVWUDOLDQDERULJLQDOV7KH&URPDJQRQDUHDVLQFOXGH(XURSHDQG$IULFD
7KH 1HDQGHUWKDOV ZHUH FHUHEHOODU GRPLQDQW 7KH FHUHEHOOXP LV FRQFHUQHG ZLWK
LQWXLWLRQDQGH[WUDVHQVRU\SHUFHSWLYHSKHQRPHQD7KH1HDQGHUWKDOVZHUHUHWURYLUDOUHVLVWDQW
7KH DUFKDHD PHWDEROLVHV FKROHVWHURO DQG JHQHUDWHV GLJR[LQ ZKLFK SURGXFHV PHPEUDQH
VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ DQG LQWUDFHOOXODU PDJQHVLXP GHILFLHQF\ 0DJQHVLXP
GHILFLHQF\ SURGXFHV UHYHUVH WUDQVFULSWDVH LQKLELWLRQ 'LJR[LQ LWVHOI PRGXODWHV 51$ HGLWLQJ
7KH UHWURYLUDO UHVLVWDQFH OHDGV WR D GHILFLHQF\ RI HQGRJHQRXV UHWURYLUDO VHTXHQFHV 7KH
HQGRJHQRXV UHWURYLUDO VHTXHQFHV IXQFWLRQ DV MXPSLQJ JHQHV UHTXLUHG IRU WKH G\QDPLFLW\ RI
V\QDSWLF FRQQHFWLYLW\ '\QDPLF V\QDSWLF FRQQHFWLYLW\ LV UHTXLUHG IRU FRUWLFDO IXQFWLRQ 7KH
FHUHEUDO FRUWH[ LV G\VIXQFWLRQDO LQ 1HDQGHUWKDOV OHDGLQJ WR FHUHEHOODU GRPLQDQFH 7KH
1HDQGHUWKDOV LQKDELW D FHUHEHOODU ZRUOG 7KH QHDQGHUWKDOLF SRSXODWLRQ LV SV\FKHGHOLF
VSLULWXDO GUHDP\ PRUH IHPLQLQH LQWXLWLYH HTXDO DQG IHPDOH GRPLQDQW 7KH\ KDG D
FRPPXQDOOLIH7KH\ZHUHK\SHUVH[XDODQGSURPLVFXRXV7KH\FDQEHFRPSDUHGWRERQRER
PRQNH\V 7KH\ ZHUH PDWULDUFKDO DQG IHPDOH GRPLQDQW 7KH\ DUH FKLOGOLNH KDYH GUHDP\
VOHHS VRPQROHQW DOWUXLVWLF DQG GRFLOH 7KH QHDQGHUWKDOLF SRSXODWLRQ EHOLHYHG LQ FRPPXQDO
OLYLQJ DQG ZDV RI K\SHU VH[XDO EHKDYLRU 7KH XQFRQVFLRXV PLQG ZDV GRPLQDQW LQ

1HDQGHUWKDOV 7KH\ KDG SUHFRJQLWLRQ DQG SRVWFRJQLWLRQ 7KH\ KDG WHOHSDWK\ DQG
FODLUYR\DQFH7KH\FRXOGKDYHPHGLXPLVWLFSRVVHVVLRQDQGFRXOGJRLQWRK\SQRWLFUHJUHVVLRQ
7KH\ KDG SROWHUJHLVW SKHQRPHQD JURXS SHUVRQDOLW\ PXOWLSOH SHUVRQDOLW\ VSOLW SHUVRQDOLW\
DOLHQDEGXFWLRQSKHQRPHQDPHPRU\RISDVWOLIHLQFXEXVDQGVXFFXEXV7KH\KDGDPDJLFDO
FLYLOL]DWLRQ RI GUHDPV 7KH\ ZHUH VXEMHFWLYH SHUVRQDO HPRWLRQDO LUUDWLRQDO DQG GUHDP\
7KH\ SUHIHUUHG WKH GDUN DQG QLJKWV 7KH\ KDG PRUH RI DXWLVP DQG VFKL]RSKUHQLD 7KH\ KDG
PRUH RI DWWHQWLRQ GHILFLW K\SHUDFWLYLW\ DQG DGGLFWLRQ 7KH\ ZHUH PDJLFDO KDG GRPLQDQW DUW
DQGUHOLJLRQZHUHVH[XDODQGEHOLHYHGLQWKLQJVZLWKRXWSURRI7KHEHOLHIZDVLQWXLWLYH7KH\
KDG VKDPDQLVWLF DQG PDJLFDO FRQVFLRXVQHVV 7KH 1HDQGHUWKDOV ZHUH OHIW KDQGHG DQG ULJKW
KHPLVSKHUHFHUHEHOODU GRPLQDQW 7KH\ ZHUH FUHDWXUHV RI WKH VHQVHV DQG FUHDWHG D VSLULWXDO
GUHDP\ FLYLOL]DWLRQ 7KH\ ZHUH FKLOGUHQ RI WKH GDUN 7KH VHOI ROG EUDLQ RI YDPSLUHV
WURJORG\WHV GHPRQV DQG WKH RFFXOW EHORQJV WR WKH 1HDQGHUWKDOV 7KH FHUHEHOODU GRPLQDQFH
DQG K\SHUWURSK\ OHDGV WR FHUHEHOODU G\VIXQFWLRQ DQG DWD[LD RI VSHHFK DV ZHOO DV PRWRU
PRYHPHQWV$WD[LFVSHHFKOHDGVWRWKHHYROXWLRQRIPXVLF$WD[LDRIPRWRUPRYHPHQWVOHDGV
WR DEVWUDFW DUW 7KXV WKH 1HDQGHUWKDO EUDLQ ZLWK LWV H[WUDVHQVRU\ SHUFHSWLRQ LV H[WUHPHO\
DUWLVWLF'LJR[LQDQGGLSRODUPDJQHWLWHLQWKHVHWWLQJRIPHPEUDQHVRGLXPSRWDVVLXP$73DVH
LQKLELWLRQ SURGXFHV D SXPSHG SKRQRQ V\VWHP PRGXODWLQJ TXDQWDO SHUFHSWLRQ 4XDQWDO
SHUFHSWLYH SKHQRPHQD DUH GRPLQDQW LQ 1HDQGHUWKDOV 7KLV OHDGV WR LQFUHDVHG H[WUDVHQVRU\
SHUFHSWLRQ 7KLV DOVR SURGXFHV D IHHOLQJ RI RQHQHVV DQG HTXDOLW\ FDOOHG WKH FROOHFWLYH
XQFRQVFLRXV7KLVSURGXFHVWKHVRFLDOLVWLFHTXDO1HDQGHUWKDOVRFLHW\7KH1HDQGHUWKDOVZHUH
DOVR PRUH VSLULWXDO DQG XQFRQVFLRXV GRPLQDQW 7KH FRUWLFDO G\VIXQFWLRQ OHDGV WR ORVV RI
KHPLVSKHULF GLIIHUHQWLDWLRQ DQG VH[XDO GLIIHUHQWLDWLRQ 5LJKW KHPLVSKHUH LV SUHGRPLQDQWO\
PDVFXOLQHDQGWKHOHIWKHPLVSKHUHIHPLQLQH7KLVUHVXOWVLQDVH[XDOEHKDYLRXUVDQGFHUHEHOODU
GRPLQDQFHOHDGVWRK\SHUVH[XDOLW\7KH&URPDJQRQSRSXODWLRQEHOLHYHGLQSDLUERQGLQJDQG
IDPLO\ SDWWHUQV 7KH\ ZHUH PRUH YLROHQW DQG DJJUHVVLYH 7KH\ ZHUH SDWULDUFKDO DQG PDOH
GRPLQDQW 7KH\ ZHUH DGXOWOLNH DQG ORJLFDO 7KH\ KDG ULJKWLVW DQG IDVFLVW WHQGHQFLHV 7KH\
ZHUH FRQVHUYDWLYH LQ WKHLU VH[XDO SUDFWLFHV 7KH\ ZHUH FRQVFLRXV HJRLVWLF ZDNHIXO PDOH
GRPLQDQW IDYRXUHG WKH OLJKW REMHFWLYH LPSHUVRQDO DQG FUXHO 7KH FRQVFLRXV ORJLFDO EUDLQ
GRPLQDWHG 7KH\ GHSHQGHG XSRQ SURRIV ORJLF ZHUH GHWDFKHG DVH[XDO DQG PDOH GRPLQDQW
7KH &URPDJQRQ ZHUH SUHGRPLQDQWO\ OHIW KHPLVSKHUH GRPLQDQW DQG ULJKW KDQGHG SUDFWLFDO
SHRSOH 7KH\ FUHDWHG D PDWHULDO FLYLOL]DWLRQ 7KH\ KDG D UDWLRQDO FRQVFLRXVQHVV 7KH\ ZHUH
FKLOGUHQRIWKHOLJKW

7KHJOREDOZDUPLQJSURGXFHVHQGRV\PELRWLFDUFKDHDOJURZWKDQGQHDQGHUWKDOLVDWLRQ
RIKRPRVDSLHQV$OOWKHVHSURGXFHDGXDOLVWLFFRQVFLRXVQHVV7KHOHIWZLQJYHUVXVULJKWZLQJ
DQGWKHFRQVHUYDWLYHYHUVXVOLEHUDO,WSURGXFHVDGRXEOHVHOIDQGGLYLGHGVHOI,WUHVXOWVLQD
&DLQH DQG $EHO DV ZHOO DV -HN\OO DQG +\GH SHUVRQDOLW\ 7KH 1HDQGHUWKDOV KDG VORSLQJ
IRUHKHDG VPDOO MDZ RFFLSLWDO EXQ DQG ODUJH FUDQLXP 7KH\ ZHUH VKRUWHU LQ KHLJKW DQG WKH
ERG\ZHLJKWZDVELJJHU7KHEUDLQVL]HRI1HDQGHUWKDOVZDVODUJHU7KHVHFRQGWRHRIWKHIHHW
ZDV ELJJHU WKDQ WKH ELJ WRH 7KH\ KDG WKH VLPLDQ FUHDVH 7KH KRPR VDSLHQV KDG D VPDOOHU
EUDLQDQGVPDOOHUFUDQLXP7KH\ZHUHWDOOHU
5HIHUHQFHV
:HDYHU 7' +XEOLQ -- 1HDQGHUWDO %LUWK &DQDO 6KDSH DQG WKH (YROXWLRQ RI +XPDQ
&KLOGELUWK3URF1DWO$FDG6FL86$±
.XUXS 5$ .XUXS 3$ (QGRV\PELRWLF $FWLQLGLF $UFKDHDO 0HGLDWHG :DUEXUJ
3KHQRW\SH0HGLDWHV+XPDQ'LVHDVH6WDWH$GYDQFHVLQ1DWXUDO6FLHQFH

0RUJDQ ( 7KH 1HDQGHUWKDO WKHRU\ RI DXWLVP $VSHUJHU DQG $'+'
ZZZUGRVQHWHQJDVSHUJHUKWP
*UDYHV 3 1HZ 0RGHOV DQG 0HWDSKRUV IRU WKH 1HDQGHUWKDO 'HEDWH &XUUHQW
$QWKURSRORJ\
6DZ\HU*-0DOH\%1HDQGHUWKDO5HFRQVWUXFWHG7KH$QDWRPLFDO5HFRUG3DUW%7KH
1HZ$QDWRPLVW%
%DVWLU 0 2¶+LJJLQV 3 5RVDV $ )DFLDO 2QWRJHQ\ LQ 1HDQGHUWKDOV DQG 0RGHUQ
+XPDQV3URF%LRO6FL±
1HXEDXHU 6 *XQ] 3 +XEOLQ -- (QGRFUDQLDO 6KDSH &KDQJHV GXULQJ *URZWK LQ
&KLPSDQ]HHVDQG+XPDQV$0RUSKRPHWULF$QDO\VLVRI8QLTXHDQG6KDUHG$VSHFWV-
+XP(YRO±
&RXUFKHVQH ( 3LHUFH . %UDLQ 2YHUJURZWK LQ $XWLVP GXULQJ D &ULWLFDO 7LPH LQ
'HYHORSPHQW,PSOLFDWLRQVIRU)URQWDO3\UDPLGDO1HXURQDQG,QWHUQHXURQ'HYHORSPHQW
DQG&RQQHFWLYLW\,QW-'HY1HXURVFL±
*UHHQ5(.UDXVH-%ULJJV$:0DULFLF76WHQ]HO8.LUFKHU03DWWHUVRQ1/L+
=KDL : HW DO $ 'UDIW 6HTXHQFH RI WKH 1HDQGHUWDO *HQRPH 6FLHQFH ±

0LWKHQ 6- 7KH 6LQJLQJ 1HDQGHUWKDOV 7KH 2ULJLQV RI 0XVLF /DQJXDJH 0LQG DQG
%RG\,6%1
%UXQHU ( 0DQ]L * $UVXDJD -/ (QFHSKDOL]DWLRQ DQG $OORPHWULF 7UDMHFWRULHV LQ WKH
*HQXV+RPR(YLGHQFHIURPWKH1HDQGHUWDODQG0RGHUQ/LQHDJHV3URF1DWO$FDG
6FL86$±
*RRFK67KH'UHDP&XOWXUHRIWKH1HDQGHUWKDOV*XDUGLDQVRIWKH$QFLHQW:LVGRP
,QQHU7UDGLWLRQV:LOGZRRG+RXVH/RQGRQ

*RRFK 6 7KH 1HDQGHUWKDO /HJDF\ 5HDZDNHQLQJ 2XU *HQHWLF DQG &XOWXUDO 2ULJLQV
.XUWpQ%'HQ6YDUWD7LJHUQ$/%$3XEOLVKLQJ6WRFNKROP6ZHGHQ
6SLNLQV3$XWLVPWKH,QWHJUDWLRQVRIµ'LIIHUHQFH¶DQGWKH2ULJLQVRI0RGHUQ+XPDQ
%HKDYLRXU&DPEULGJH$UFKDHRORJLFDO-RXUQDO
(VZDUDQ 9 +DUSHQGLQJ + 5RJHUV $5 *HQRPLFV 5HIXWHV DQ ([FOXVLYHO\ $IULFDQ
2ULJLQRI+XPDQV-RXUQDORI+XPDQ(YROXWLRQ
5DPDFKDQGUDQ967KH5HLWKOHFWXUHV%%&/RQGRQ

&+$37(5
(1'26<0%,27,&$5&+$($/51$9,52,'6$1'(0(5*,1*9,5$/
3$1'(0,&6

7KH HQGRV\PELRWLF DQG FRORQLF KXPDQ DUFKDHD VHFUHWH 51$ DQG '1$ YLUXVHV DQG
VHUYHVDVDUHVHUYRLUIRUWKHP9LUXVHVEHORQJLQJWRWKHSR[IDPLO\DQG$IULFDQVZLQHIHYHU
KDYH EHHQ GHVFULEHG LQ DUFKDHD 7KH DUFKDHDO YLURLGV VHFUHWH HQYHORSHG YLUXVHV OLNH WKH
6$560(56FRURQDDQG+,97KHDUFKDHDOYLUXVVHFUHWLRQSURFHVVLVWKHVDPHDVWKDWRI
HQYHORSHG YLUXVHV OLNH 6$56 0(56 DQG &RURQD 7KH EDWV VHUYH DV D UHVHUYRLU IRU WKH
YLUXVHV OLNH 6$56 0(56 DQG &RURQD 7KH EDWV FRQWDLQ DUFKDHD ZKLFK FDQ VHFUHWH 51$
YLURLGV DQG JHQHUDWH YLUXVHV 7KH FRORQLF DQG HQGRV\PELRWLF DUFKDHD DOVR JHQHUDWHV 51$
YLURLGVZKLFKDUHFRQYHUWHGWR'1$YLURLGVE\FRORQLFHSLWKHOLDO+(59UHYHUVHWUDQVFULSWDVH
DQGJHWVLQWHJUDWHGLQWRWKHFRORQLFJHQRPH7KH51$DQG'1$YLURLGVK\EULGLVHZLWKWKH
JXW OHDGLQJ WR JHQHUDWLRQ RI QHZ HPHUJLQJ YLUXVHV 7KH 51$ DQG '1$ YLURLGV DQG JXW
EDFWHULD FDQ DOVR K\EULGLVH ZLWK KXPDQ JHQRPLF VHTXHQFHV IRU LPPXQLW\ PHWDEROLF
DQG '1$ YLUXVHV SURGXFLQJ SDQGHPLFV DQG H[WHUPLQDWLRQ RI KRPR VDSLHQV 7KH KRPR
VDSLHQVEHFRPHDQH[WLQFWVSHFLHVDQGWKHKRPRQHDQGHUWKDOLVZLOOGRPLQDWHWKHHDUWK
7KH DUFKDHD FDQ LQGXFH VWHP FHOO FRQYHUVLRQ DQG QHDQGHUWKDOLVDWLRQ RI WKH KXPDQ
VSHFLHV7KHDUFKDHDFDQSURGXFHSHUPDQHQWLPPXQHDFWLYDWLRQSURGXFLQJUHVLVWDQFHWRYLUDO
DQG EDFWHULDO LQIHFWLRQ 7KH DUFKDHDO FKROHVWHURO FDWDEROLVP GHSOHWHV WLVVXH FKROHVWHURO
SURGXFLQJYLWDPLQ'GHILFLHQF\DQGLPPXQHDFWLYDWLRQ7KXVDUFKDHDORYHUJURZWKUHVXOWVLQ
UHWURYLUDO UHVLVWDQFH DQG JHQHUDWLRQ RI WKH 1HDQGHUWKDO SKHQRW\SH 7KH HQGRV\PELRWLF
DUFKDHD FDQ VHFUHWH YLUXV OLNH 51$ DQG '1$ SDUWLFOHV 7KH HQGRV\PELRWLF DUFKDHD FDQ
LQGXFH XQFRXSOLQJ SURWHLQV LQKLELWLQJ PLWRFKRQGULDO R[LGDWLYH SKRVSKRU\ODWLRQ DQG
JHQHUDWLQJ5267KHHQGRV\PELRWLFDUFKDHDOPDJQHWLWHFDQJHQHUDWHORZOHYHORI(0)7KH
ORZOHYHORI(0)DQG526DUHJHQRWR[LFDQGSURGXFHEUHDNDJHVLQKRWVSRWVRIFKURPRVRPH
,WFDQDOVRWULJJHUUHDUUDQJHPHQWVLQKRWVSRWVRIFKURPRVRPHLQKDELWHGE\UHWURYLUDODQGQRQ
UHWURYLUDOHOHPHQWVSURGXFLQJWKHLUH[SUHVVLRQ7KHDUFKDHDOVHFUHWHG'1$DQG51$YLURLGV
FDQ UHFRPELQH ZLWK WKH H[SUHVVHG UHWURYLUDO QRQUHWURYLUDO HOHPHQWV DQG RWKHU JHQRPLF

VHJPHQWV RI WKH KXPDQ FKURPRVRPH JHQHUDWLQJ QHZ 51$ DQG '1$ YLUXVHV 7KXV WKH
QHDQGHUWKDOLVHG KXPDQV FDQ VHUYH DV DQ RULJLQ IRU QHZ 51$ DQG '1$ YLUXVHV DV ZHOO DV
PXWDWHGUHWURYLUXVHV7KHHQGRV\PELRWLFDUFKDHDFRQYHUWVWKH1HDQGHUWKDOFHOOVWRVWHPFHOOV
7KHVWHPFHOOVDUHUHVLVWDQWWRLPPXQHDWWDFN7KHVWHPFHOOVFDQVHUYHDVDUHVHUYRLUIRUWKLV
QHZ51$DQG'1$YLUXVHV7KHVWHPFHOOVDQGDUFKDHDOFHOOVFDQDOVRVHUYHDVDUHVHUYRLU
IRU YLUXVHV DQG EDFWHULD EHORQJLQJ WR RWKHU SODQWV DQG DQLPDOV 7KLV KHOSV WR JHQHUDWH WKH
VSHFLHV EDUULHU MXPS LQ QRWHG LQ UHFHQW HPHUJLQJ YLUDO DQG EDFWHULDO LQIHFWLRQV 7KXV WKH
HQGRV\PELRWLFDUFKDHDOJURZWKSURGXFHVQHDQGHUWKDOLVHGYHUVLRQRIKRPRVDSLHQVZKLFKDUH
UHWURYLUDOUHVLVWDQWDQGUHVLVWDQWWRRWKHUYLUDODQGEDFWHULDOLQIHFWLRQFRQVHTXHQWWRLPPXQH
DFWLYDWLRQ DQG GLJR[LQ LQGXFHG 51$ HGLWLQJ 7KH HQGRV\PELRWLF DUFKDHDO RYHUJURZWK
PHGLDWHG QHDQGHUWKDOLVHG YHUVLRQ RI KRPR VDSLHQV JHQHUDWHV QHZ PXWDWHG 51$ DQG '1$
YLUXVHVDVZHOODVUHWURYLUXVHVDWWKHVDPHWLPHEHLQJUHVLVWDQWWRWKHPDVLQWKHFDVHRIWKH
VSHFLHV EDW 7KH KRPR VDSLHQV GR QRW KDYH WKH 1HDQGHUWKDO PHFKDQLVPV RI LPPXQH
DFWLYDWLRQ DV WKHLU DUFKDHDO ORDG LV PHDJUH 7KH\ VHUYH DV IRGGHU IRU LQIHFWLRQ IURP
1HDQGHUWKDO JHQHUDWHG YLUXVHV DQG EDFWHULD DQG VXIIHU HYHQWXDO H[WLQFWLRQ 7KLV SDSHU
VWXGLHGWKHDUFKDHDOVWDWXVLQSDWLHQWVZLWKUHFXUUHQWYLUDOLQIHFWLRQVDQGUHWURYLUDOLQIHFWLRQV
7KHJHQHUDWLRQRI51$DQG'1$YLURLGVIURPDUFKDHDZDVDOVRVWXGLHG
DQGWKHH[WUHPRSKLOLFDUFKDHDGRPLQDWHVWKHFRORQLFPLFURELRPH7KXVDQWLELRWLFDQGRWKHU
QRQDQWLELRWLF GUXJV SURPRWH FRORQLF DUFKDHDO JURZWK DQG HQGRV\PELRVLV SURGXFLQJ
QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV DQG JHQHUDWLRQ RI VXSHUYLUXVHV ZKLFK NLOOV RI WKH KRPR
VDSLHQVSHFLHV7KXVWKHJHQHUDWLRQRIHPHUJLQJYLUXVHVLVSURPRWHGE\DORZILEUHGLHW$
ORZ ILEUH GLHW OHDGV WR FRORQLF DQG HQGRV\PELRWLF DUFKDHDO JURZWK OHDGLQJ WR
QHDQGHUWKDOLVDWLRQRIWKHVSHFLHVDQGHPHUJLQJYLUXVHVWRZKLFKWKHQHDQGHUWKDOLVHGVSHFLHVLV

HPHUJLQJYLUXVHVNLOOVRIWKHKRPRVDSLHQVSHFLHVZKLFKDUHVHQVLWLYHWRHPHUJLQJYLUXVHVDQG
GRQRWKDYHUHVLVWDQFHWRLW7KXVWKHPRGHUQDUPDPHQWDULXPRIDQWLELRWLFVDQWLSV\FKRWLFV
DQDOJHVLFV DQWLK\SHUWHQVLYHV DQG DQWLGLDEHWLF GUXJV SURPRWH FRORQLF DQG HQGRV\PELRWLF
DUFKDHDO JURZWK GHYHORSPHQW RI VXSHUEXJV QHDQGHUWKDOLVDWLRQ RI VSHFLHV DQG LQGXFWLRQ RI
FLYLOL]DWLRQDO GLVHDVH 7KXV WKH GUXJV XVHG WR WUHDW LQIHFWLRQV DQG KXPDQ GLVHDVH WHQG WR
SURGXFH HPHUJLQJ YLUXV LQIHFWLRQ 7KXV WKH GUXJ DUPDPHQWDULXP RI DQWLELRWLFV DQG QRQ
DQWLELRWLF GUXJV XVHG WR WUHDW KXPDQ LQIHFWLRQV DQG GLVHDVHV LQFUHDVHV FRORQLF DQG
HQGRV\PELRWLFDUFKDHDOJURZWKQHDQGHUWKDOLVHVWKHVSHFLHVJHQHUDWHVHPHUJLQJYLUXVHV7KH
JXWPLFURELRPHDQGYLURELRPHPRGXODWHGE\GLHWDU\ILEUHLQWDNHKLJKSURWHLQKLJKIDWGLHWV
DQWLELRWLFVDQGQRQDQWLELRWLFGUXJVOLNHDQWLSV\FKRWLFVDQWLK\SHUWHQVLYHVDQDOJHVLFVOHDGV
WR DOWHUDWLRQ LQ JXW PLFURELDO DQG YLURLGDO ELRJHRJUDSK\ OHDGLQJ WR JHQHUDWLRQ RI
VXSHUYLUXVHV7KHJXWDUFKDHDKLJKO\UHVLVWDQWWRFRQYHQWLRQDODQWLELRWLFVDQGQRQDQWLELRWLF
GUXJVDQGSUROLIHUDWHZKHQDQWLELRWLFVDQGQRQDQWLELRWLFGUXJVOLNHDQWLK\SHUWHQVLYHVDQWL
SV\FKRWLFV DQG DQDOJHVLFV DUH XVHG RQ D ZLGHVSUHDG EDVLV 7KH\ JHQHUDWH VXSHUYLUXVHV
H[WHUPLQDWLQJ WKH KRPR VDSLHQ SRSXODWLRQ 7KH JURZWK DQG GRPLQDQFH RI WKH FRORQLF DQG
HQGRV\PELRWLFDUFKDHDOHDGVWRJHQHUDWLRQRIKRPRQHDQGHUWKDOLVVSHFLHVZKLFKLVUHVLVWDQWWR
VXSHUYLUXVHVDQGVXUYLYH+RPRQHDQGHUWKDOLVZLWKLWVH[WUHPRSKLOLFDUFKDHDOHQGRV\PELRVLV
LVKDUG\DQGUHVLVWDQWDQGFDQVXUYLYHJOREDOZDUPLQJDQGH[WUHPHVRIFOLPDWHFKDQJHDVZHOO
DV VXUYLYLQJ H[WUHPRSKLOLF DQDHURELF FRQGLWLRQV RI RWKHU SODQHWV DQG JDODFWLF V\VWHPV 7KH
KXPDQ PHWKDQRJHQLF DUFKDHD DUH KLJKO\ UHVLVWDQW WR URXWLQH DQWLELRWLFV DQG QRQDQWLELRWLF
GUXJVDQGWKHLQWDNHRIVXFKGUXJVNLOOVWKHFRORQLFPLFURELRPHOHDGLQJWRDUFKDHDOJURZWK
DQG HQGRV\PELRVLV DQG QHDQGHUWKDOLVDWLRQ WR SURGXFH D KDUG\ KRPR JDODFWLFXV VSHFLHV
FDSDEOH RI VXUYLYLQJ LQ H[WUHPH FOLPDWHV RI HDUWK DQG RWKHU SODQHWV 7KH KXPDQ GUXJV DQG
DQWLELRWLFV LQGXFHG PRGXODWLRQ RI WKH JXW PLFURELRPH ZLWK LQFUHDVHG FRORQLF DQG
HQGRV\PELRWLF DUFKDHDO JURZWK DOVR FRQWULEXWHV WR JOREDO ZDUPLQJ YLD WKH PHFKDQLVP RI
DUFKDHDO PHWKDQRJHQHVLV 7KH ZLGHVSUHDG XVH RI DQWLELRWLFV DQG QRQDQWLELRWLF GUXJV
FRQWULEXWH WR FRORQLF DQG HQGRV\PELRWLF DUFKDHDO JURZWK FOLPDWH FKDQJH DQG VWLOO IXUWKHU
PRUHDUFKDHDOJURZWK7KLVKXPDQFRORQLFDQGHQGRV\PELRWLFDUFKDHDOJURZWKFRQVHTXHQWWR
VWUHVV LQWHUQHW ILHOGV ORZ OHYHO (0) ORZ GLHWDU\ ILEUH LQWDNH DQWLELRWLF XVH DQG QRQ
DQWLELRWLFGUXJXVHSURGXFLQJPHWKDQRJHQHVLVLVWKHSULQFLSDOFDXVHRIJOREDOZDUPLQJ7KH
ZLGHVSUHDG XVH RI DQWLELRWLF DQG QRQDQWLELRWLF GUXJV NLOOV RI WKH FRORQLF PLFURIORUD DQG
UHSODFHV LW ZLWK DUFKDHD UHVLVWDQW WR DQWLELRWLF DQG QRQDQWLELRWLF GUXJV 7KH ORZ LQWDNH RI
GLHWDU\ILEUHSURPRWHVFRORQLFDUFKDHDODQGHQGRV\PELRWLFDUFKDHDOJURZWK6WUHVVSURGXFHV

FDWHFKRODPLQH LQGXFHG LQFUHDVHG LQ FRORQLF DQG HQGRV\PELRWLF DUFKDHDO JURZWK DQG
EUHDFKLQJ RI WKH JXWEORRG EDUULHU 7KH ZLGHVSUHDG XVH RI LQWHUQHW DQG ORZ OHYHO RI (0)
ILHOG RI PRELOH SKRQHV SURPRWHV HQGRV\PELRWLF DUFKDHDO JURZWK 7KXV HQGRV\PELRWLF DQG
FRORQLF DUFKDHDO JURZWK DQG PHWKDQRJHQHVLV SURGXFLQJ JOREDO ZDUPLQJ LV D HQGRJHQRXV
KXPDQ ELRORJLFDO HYHQW ZLWK KXPDQ ELRORJLFDO DFWLYLW\ DV D FHQWUH SLHFH WULJJHULQJ WKH
SURFHVV7KHZLGHVSUHDGXVHRIDQWLELRWLFVDQGQRQDQWLELRWLFGUXJVWUHDWLQIHFWLRQVYLUDODQG
EDFWHULDO DV ZHOO DV FLYLOL]DWLRQDO GLVHDVH OLNH FDQFHU VFKL]RSKUHQLD PRRG GLVRUGHU
GHSUHVVLRQ DXWLVP DXWRLPPXQH GLVHDVH DQG QHXURGHJHQHUDWLRQ SURPRWHV FRORQLF DQG
HQGRV\PELRWLF DUFKDHDO JURZWK ZKLFK QHDQGHUWKDOLVHV WKH VSHFLHV OHDGLQJ WR VWLOO IXUWKHU
WUDQVIRUPDWLRQRIWKHKXPDQV\VWHPOHDGLQJWRLQGXFWLRQRIFLYLOL]DWLRQDOGLVHDVHOLNHFDQFHU
PHWDEROLF V\QGURPH [ QHXURGHJHQHUDWLRQ DXWRLPPXQLW\ DQG YDVFXODU GLVHDVH 7KXV WKH
DQWLELRWLF DQG QRQDQWLELRWLF GUXJV XVHG WR WUHDW LQIHFWLRQV DQG V\VWHPLF GLVHDVHV SURGXFHV
FRORQLF DQG HQGRV\PELRWLF DUFKDHDO JURZWK OHDGLQJ WR VXSHUEXJV VXSHUYLUXVHV SDQGHPLFV
+XPDQPHGLFLQHDVZHNQRZLWKDVUHDFKHGDGHDGHQG7KHDQWLELRWLFDQGQRQDQWLELRWLFHUD
RI GUXJV KDG FRPH WR DQ HQG 7KH KXPDQ HDUWK DV ZH NQRZ LW DOVR XQGHUJRHV FDWDVWURSKLF
FOLPDWH FKDQJH OHDGLQJ WR H[WLQFWLRQ RI WKH KXPDQ VSHFLHV DQG FRQGLWLRQV IRU KXPDQ
KDELWDWLRQVLQHDUWK7KHPRGHUQPHGLFLQHDVZHNQRZRIDQGWKHHDUWKDVZHNQRZRIKDYH
HQGHG 7KH SULQFLSDO FDXVH RI FOLPDWH FKDQJH DQG LWV FDWDVWURSKLF FRPSOLFDWLRQV LV
FRQWULEXWHG LQ SDUW RQO\ E\ WKH GHVWUXFWLRQ RI WKH WURSLFDO $PD]RQLDQ DQG UDLQ IRUHVW 7KH
GHIRUHVWDWLRQ RI WKH JXW PLFURIORUD FUHDWHG RYHU ELOOLRQV RI \HDUV RI KXPDQ HYROXWLRQ LV WKH
SULQFLSDOFDXVHRIWKHFOLPDWHFKDQJHDQGDSRVVLEOHHQGRIWKHHDUWKDVZHNQRZRIDQGWKH
KXPDQ VSHFLHV DV ZH NQRZ RI 7KH UHYROXWLRQDU\ PHGLFLQH DQG WKH JROGHQ HDUWK ZLWK LWV
KDELWDEOHFRQGLWLRQVKDYHHQGHG7KHLQFUHDVHLQGLHWDU\ILEUHLQWDNHXSWRJGD\FDQLQKLELW
FRORQLF DUFKDHDO JURZWK DQG HQGRV\PELRVLV SXWWLQJ D EUHDN RQ JHQHUDWLRQ RI VXSHUEXJV
HPHUJLQJ YLUXVHV DQG FOLPDWH FKDQJH ,QFUHDVH LQ GLHWDU\ ILEUH LQWDNH RI SRSXODWLRQV FDQ
SUHYHQWWKHVWDWHRIFOLPDWHFKDQJHDQGJXWPLFURELDOFKDQJHSXWWLQJKXPDQOLIHDQGWKHOLIH
RIWKHSODQHWDWULVN'LHWDU\ILEUHFDQEHFRQVLGHUHGDVWKHHOL[LURIOLIHDQGHQGRV\PELRWLF
DUFKDHDWKHSKLORVRSKHU¶VVWRQH

DELRJHQHVLV $ K\SRWKHVLV RI FKROHVWHURO DV WKH SULPDO SUHELRWLF PROHFXOH V\QWKHVL]HG RQ
DUFKDHDLVSRVWXODWHG

0DWHULDOVDQG0HWKRGV
GRQHE\$129$

5HVXOWV
DW]HURWLPH

0XUDPLFDFLG
FKDQJH
*URXS 'HFUHDVHZLWK
'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'1$FKDQJH 51$FKDQJH
'1$FKDQJH 51$FKDQJH
'R[\&LSUR 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

+0*&R$5 +0*&R$5
$73V\QWKDVH
'HFUHDVHZLWK
'R[\&LSUR
5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH
%LOH$FLGVFKDQJH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

3\UXYDWHFKDQJH
'HFUHDVHZLWK
'R[\&LSUR
5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH
DFLG
+2 $/$ $/$

+2
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

3$+ 3$+ +7FKDQJH
+7FKDQJH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'LVFXVVLRQ

JHQRPH


GLVHDVH
5HIHUHQFHV
3ODQW'LVHDVH

3ODQW3DWKRORJ\
(XU-%LRFKHP
&KHP
9DQ1R6WUDQG
3XEOLVKHUV
3UHVV
±
86$
%LRFKHPLFDO6FLHQFHV

0LFURELRO

0RO%LRO5HY±
%0&%LRORJ\


&+$37(5
$5&+$($/',*2;,1$5&+$($/9,52,'6(0(5*,1*9,5$/3$1'(0,&6
+2021($1'(57+$/,69,5866(&5(7,21$1'+2026$3,(1
(;7,1&7,21

*OREDO ZDUPLQJ OHDGV WR HQGRV\PELRWLF DQG FRORQLF DUFKDHDO JURZWK DQG
QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV DQG DFWLYDWLRQ RI UHPQDQW1HDQGHUWKDO PDWULOLQHDO VSHFLHV
7KHHQGRV\PELRWLFDUFKDHDVHFUHWHV51$YLURLGVZKLFKFDQJHWFRQYHUWHGXVLQJWKHKXPDQ
+(59UHYHUVHWUDQVFULSWDVHWR'1$YLURLGV7KH51$YLURLGVDQG'1$YLURLGVJHQHUDWHGE\
KXPDQDUFKDHDFDQK\EULGLVHZLWKWKHKXPDQYLURELRPHDQGPLFURELRPHDVZHOODVKXPDQ
JHQRPHVHTXHQFHVSURGXFLQJHPHUJLQJQHZYLUXVHVDQGSDQGHPLFV$UFKDHDOHQGRV\PELRVLV
UHVXOWVLQQHDQGHUWKDOLVDWLRQRIWKHVSHFLHVDQGLQFUHDVHLQGHQVLW\RIKRPRQHDQGHUWKDOLV7KH
HQGRV\PELRWLF KRPR QHDQGHUWKDOLF DUFKDHD VHFUHWHV 51$ YLURLGV ZKLFK DV VDLG EHIRUH JHWV
FRQYHUWHGWR'1$YLURLGVE\KXPDQ+(59UHYHUVHWUDQVFULSWDVH7KH51$DQG'1$YLURLGV
K\EULGL]H ZLWK RWKHU FRPSRQHQWV RI WKH KXPDQ YLURELRPH DQG KXPDQ JHQRPLF VHTXHQFHV
SURGXFLQJQHZFDWDVWURSKLFSDQGHPLFYLUXVHV7KHKRPRQHDQGHUWKDOLVVHUYHVDVDJHQHUDWRU
DQG UHVHUYRLU RI WKH HPHUJLQJ YLUXVHV +RPR QHDQGHUWKDOLV DUFKDHDO 51$ YLURLGV DUH WKH
SURJHQLWRUVRIWKHYLUXVHV7KHDUFKDHDFDQDOVRVHFUHWHSRUSK\ULRQVZKLFKIRUPVWHPSODWHV
IRU51$DQG'1$YLURLGVWRIRUP7KHSRUSK\ULRQVDUHWKHPRVWVLPSOHVWRIWKHRUJDQLVP
7KH SRUSK\ULRQV DUH FDSDEOH RI VHOI RUJDQL]DWLRQ DQG VHOI UHSOLFDWLRQ RQ SUHH[LVWLQJ
WHPSODWHV WR IRUP SULRQV SULPLWLYH 51$ YLURLGV DQG '1$ YLURLGV 7KH DUFKDHDO
HQGRV\PELRQW RI KRPR QHDQGHUWKDOLV V\QWKHVL]HV GLJR[LQ IURP WKH LVRSUHQRLG SDWKZD\
'LJR[LQLVWKH1HDQGHUWKDOHYROXWLRQDU\KRUPRQH'LJR[LQLVDVPDOOPROHFXOHWKDWFDQDFWDW
WKH51$OHYHOVSOLFLQJFXWWLQJDQGHGLWLQJ51$DQGFDQGHVWUR\WKH51$YLURLGVSHUVH7KH
DUFKDHD FDQ LQGXFH VWHP FHOO WUDQVIRUPDWLRQ RI WKH KXPDQ FHOOV YLD N\QXUHQLQH SDWKZD\ RI
WU\SWRSKDQ FDWDEROLVP $UFKDHDO LQGXFHG :DUEXUJ SKHQRW\SH FDQ JHQHUDWH VWHP FHOOV 7KH
VWHPFHOOVDUHSURWHFWHGIURPLPPXQHDWWDFNDQGWKHDUFKDHDJHQHUDWHGYLUXVHVFDQVXUYLYHLQ
WKHVWHPFHOOV7KHDUFKDHDOGLJR[LQZLOONLOODSHUFHQWDJHRIWKHYLUXVHVDQGSUHYHQWLQJWKHP
IURP H[SDQGLQJ LQ WKHLU FORQHV LQWHUERGLHV 6WXGLHV KDYH VKRZQ WKDW WKH DQWLYLUDO HIIHFW RI
VRGLXPSRWDVVLXP$73DVHLQKLELWLRQ&DUGLDFJO\FRVLGHVQRWRQO\VHUYHWKHSXPSIXQFWLRQRI
VRGLXPSRWDVVLXP $73DVH EXW DOVR DFWLYDWH LQWUDFHOOXODU VLJQDO WUDQVGXFWLRQ ZKLFK DUH
LPSRUWDQWLQPDQ\ELRORJLFDOSURFHVVHV5HFHQWO\DQWLYLUDOHIIHFWVKDYHEHHQGHVFULEHGDVD
QRYHO IHDWXUH RI VRGLXPSRWDVVLXP $73DVH LQKLELWLRQ ZLWK WKH XVH RI FDUGLDF JO\FRVLGHV
&DUGLDF JO\FRVLGHV DUH UHSRUWHG WR EH HIIHFWLYH DJDLQVW ERWK '1$ YLUVXHV VXFK DV

F\WRPHJDORYLUXVDQGKHUSHVVLPSOH[YLUXVDQG51$YLUXVHVVXFKDVLQIOXHQ]DFKLNXQJXQ\D
FRURQDYLUXVDQGUHVSLUDWRU\V\QF\QWLDOYLUXV&RQVHTXHQWO\FDUGLDFJO\FRVLGHVKDYHHPHUJHG
DV SRWHQWLDO EURDG VSHFWUXP DQWLYLUDO GUXJV ZLWK JUHDW DGYDQWDJH RI WDUJHWLQJ KRVW FHOO
SURWHLQV ZKLFK KHOS WR PLQLPL]H UHVLVWDQFH WR DQWLYLUDO WUHDWPHQW PDNLQJ WKHP D YHU\
SURPLVLQJVWUDWHJ\DJDLQVWKXPDQYLUDOLQIHFWLRQ
6RGLXPSRWDVVLXP$73DVHFODVVLFDOUROHLVWRPDLQWDLQWKHHOHFWURO\WHKRPHRVWDVLVRI
WKHFHOOVE\SXPSLQJFDWLRQVLQDQGRXWRIWKHFHOOXVLQJWKHHQHUJ\REWDLQHGIURPK\GURO\VLV
RI$73+RZHYHUVRGLXPSRWDVVLXP$73DVHLVDOVRDNH\VFDIIROGLQJSURWHLQWKDWLVFDSDEOH
RILQWHUDFWLQJZLWKVLJQDOLQJSURWHLQVVXFKDSURWHLQNLQDVH&3.&DQGSKRVSKRLRQRVLWLGH
NLQDVH3,.,WDOVRZRUNVDVFDUGLDFUHFHSWRULQZKLFKWKHELQGLQJRIWKHFDUGLDFJO\FRVLGH
LQGXFHVDFWLYDWLRQRIW\URVLQHNLQDVH65&DQGGRZQVWUHDPVLJQDOLQJFDVFDGHLQGHSHQGHQW
RI LQWUDFHOOXODU LRQV 9LUXVHV DUH LQWUDFHOOXODU SDUDVLWHV ZKRVH OLIH F\FOH LV GHSHQGHQW RQ
KLMDFNLQJ FHOOXDU IXQFWLRQV OLNH SURWHLQ V\QWKHVLV DQG LQWUDFHOOXODU WUDQVSRUW RI PROHFXOHV WR
SURPRWH WKHLU UHSOLFDWLRQ RI VSUHDGLQJ 7KH LQIHFWLRQ EHJLQV ZLWK WKH DWWDFKHPHQW RI YLUDO
SDUWLFOHWRWKHVXUIDFHH[SRVHGFHOOXODUPROHFXOHVDQGWKHHQWU\LQWRWKHFHOOE\HQGRF\WRVLV
2QFH WKH YLUDO FRPSRQHQWV DUH LQ WKH LQWUDFHOOXODU HQYLURQPHQW WKH YLUDO SURWHLQ WKDW
V\QWKHVL]HGXVLQJWKHKRVWFHOOWUDQVODWLRQDOPDFKLQHU\DQGQHZYLUDOSDUWLFOHVDUHWUDQVSRUWHG
WR WKH VXUIDFH WR EH UHOHDVHG DQG LQIHFW RWKHU FHOOV 7DUJHWLQJ KRVW FHOO FRPSRQHQWV VXFK DV
VRGLXPSRWDVVLXP $73DVH LV DQ HIIHFWLYH DQWLYLUDO VWUDWHJ\ 7KH KXPDQ H[SUHVVLRQ RI
SDUYRYLUXV % FDSVLG SURWHLQ 93 GHFUHDVHV VRGLXPSRWDVVLXP $73DVH DFWLYLW\ 6RGLXP
SRWDVVLXP $73DVH LV GRZQ UHJXODWHG LQ DOYHRODU HSLWKHOLDO FHOOV LQIHFWHG ZLWK LQIOXHQ]D $
+1 DQG +1 VWUDLQV 6RGLXPSRWDVVLXP $73DVH DFWLYLW\ FDQ DOVR EH GHFUHDVHG E\ WKH
VLQGELV YLUXV DQG HQWHURYLUXV FR[VDFNLH % LQIHFWLRQ &DULGDF JO\FRVLGHV LQKLELW &09
LQIHFWLRQDVZHOODVKHUSHVYLUXVUHSOLFDWLRQ7KH\GRVRE\LQKLELWLQJWKHH[SUHVVLRQWKHYLUDO
JHQHV ZLWK WKH DQWLYLUDO DFWLRQ FRUUHODWHG ZLWK WKH SRWHQF\ DJDLQVW VRGLXPSRWDVVLXP
$73DVH'LJLWR[LQLQKLELWV+69UHSOLFDWLRQSHUFHQWDJH'LJLWR[LQLPSDLUVWKH+69YLUDO
OLIHF\FOHDWWZRGLIIHUHQWVWHSVYLUDO'1$V\QWKHVLVDQGYLUDOUHOHDVHIURPKRVWFHOO'LJR[LQ
DOVR LPSDLUV WKH DGHQRYLUXV JHQRPH UHSOLFDWLRQ E\ DOWHULQJ WKH KRVW SUH 51$ VSOLFLQJ
PDFKLQHU\&KLFNXQJXQ\DYLUXVLVVXVFHSWLEOHWRWUHDWPHQWZLWKGLJR[LQDVDOVRRWKHU51$
YLUXVHVOLNHVLQELVYLUXVYHVLFXODUVWRPDWLWLVYLUXV&RUQRDYLUXV0(56&R96$56&R9DUH
UHSUHVVHG6RGLXPSRWDVVLXP$73DVHDOSKDVXEXQLWLVVLOHQFHGRULQKLELWHGE\ORZGRVHRIWKH
FDUGLDF JO\FRVLGH 7KH FDUGLDF JO\FRVLGH DQWLYLUDO HIIHFW LV UHOLHYHG E\ WKH LQKLELWLRQ RI WKH
65& SDWKZD\ ,QKLELWLRQ RI 6RGLXPSRWDVVLXP $73DVH E\ FDUGLDF JO\FRVLGHV GHFUHDVHV

LQIOXHQ]DYLUXVUHSOLFDWLRQE\KRVWWUDQVODWLRQDOFHOOPDFKLQHU\YLDDGHFUHDVHLQLQWUDFHOOXODU
SRWDVVLXP 7KH +,9 YLUXV LV DOVR VXVFHSWLEOH WR FDUGLDF JO\FRVLGH WUHDWPHQW :DQJ HW DO
VKRZHG WKDW GLJR[LQ LQKLELWV WKH UHSOLFDWLRQ RI FOLQLFDO VWUDLQV RI +,9 E\ LPSDLULQJ WKH
VSOLFLQJ PHFKDQLVP RI YLUDO 51$ DQG FRQVHTXHQWO\ WKH VWUXFWXUDO SURWHLQ V\QWKHVLV RI WKH
YLUVXV /RZ FRQFHQWUDWLRQ RI FDUGLDF JO\FRVLGHV LQKLELW +,9 JHQH H[SUHVVLRQ WKURXJK
PRGXODWLRQ RI WKH PLWRJHQ DFWLYDWHG SURWHLQ NLQDVHV H[WUDFHOOXODU VLJQDO UHJXODWHG NLQDVH
0(.(5.VLJQDOLQJYLDLQWHUDFWLRQZLWK6RGLXPSRWDVVLXP$73DVHLQGHSHQGHQWRI
DOWHUDWLRQ LQ LQWUDFHOOXODU FDOFLXP (LWKHU E\ DFWLYDWLQJ VLJQDOLQJ RU E\ DOWHULQJ WKH
LQWUDFHOOXODU FRQFHQWUDWLRQ RI LRQV WKH ELQGLQJ RI FDUGLDF JO\FRVLGHV 6RGLXPSRWDVVLXP
$73DVHGHWHUPLQHVWKHHQYLURQPHQWWKDWLVXQIDYRXUDEOHIRUYLUDOUHSOLFDWLRQVDQGLPSDLUHG
V\QWKHVLV RI YLUDO SURWHLQV E\ LQWHUIHULQJ ZLWK WKH KRVW WUDQVODWLRQDO PDFKLQHU\ 7KH FDUGLDF
JO\FRVLGHVFDQLQKLELWWKH&0(YLUXVDQGWKHUHLVUHGXFHGOHYHOVRIQXFOHDUIDFWRU.%KRXU
SRVW LQIHFWLRQ DQG GHFUHDVHG H[SUHVVLRQ RI LQWHUPHGLDWH HDUO\ YLUDO SURWHLQV ,( DQG ,(
,QIOXHQ]D YLUXV LV LPSDLUHG E\ WKH RXDELQ DW QDQRPRODU FRQFHQWUDWLRQ E\ LQKLELWLQJ WKH
WUDQVODWLRQRIYLUDOSURWHLQVWKURXJKDGHFUHDVHLQWKHFRQFHQWUDWLRQRILQWUDFHOOXODUSRWDVVLXP
65&VLJQDOLQJLVDOVRUHSRUWHGWREHLQYROYHGLQWKHLQKLELWLRQRIFRURQDYLUXVDQGYHVLFXODU
VWRPDWLV YLUXV LQIHFWLRQ DV WKH LQKLELWLRQ RI WKH YLUXV FDQ EH UHVFXHG E\ LQKLELWRUV RI 65&
&DUGLDF JO\FRVLGHV ZHUH VXSSRVHG WR DIIHFW WKH HQWU\ VWDJH RI YLUXV E\ LQWHUIHULQJ ZLWK WKH
HQGRF\WRVLV7KHRXDEDLQFDQLPSDLUYLUDOJHQRPLFUHSOLFDWLRQRUSURWHLQV\QWKHVLVVXJJHVWLQJ
WKDWWKLVGUXJWDUJHWVKRVWSURMHFWVWKDWLVHVVHQWLDOIRUYLUXVWRDFKLHYHDVXFFHVVIXOUHSOLFDWLRQ
F\FOH7KXVWKHKRPRQHDQGHUWKDOLVHQGRV\PELRWLFDUFKDHDVHFUHWH51$YLURLGVZKLFKJHWV
FRQYHUWHG WR '1$ YLURLGV E\ KXPDQ JHQRPLF +(59 WUDQVFULSWDVH 7KH DUFKDHDO VHFUHWHG
51$ DQG '1$ YLURLGV FDQ K\EULGL]H ZLWK WKH RWKHU SDUWV RI KXPDQ YLURELRPH DV ZHOO DV
KXPDQ JHQRPLF VHTXHQFHV SURGXFLQJ QHZ HPHUJLQJ FDWDVWURSKLF YLUXVHV 7KH KRPR
QHDQGHUWKDOLV ZLWK LWV HQGRV\PELRWLF DUFKDHD V\QWKHVL]HV GLJR[LQ E\ LVRSUHQRLG SDWKZD\
ZKLFKNHHSVWKHYLUDOSRSXODWLRQLQWKHFHOOLQFKHFN7KHKRPRQHDQGHUWKDOLVE\WKHDFWLRQRI
HQGRV\PELRWLF DUFKDHD FDQ KDYH DQ LQFUHDVLQJ SHUFHQWDJH RI VRPDWLF WR VWHP FHOO
WUDQVIRUPDWLRQ7KHKRPRQHDQGHUWKDOLFVWHPFHOOVDUHDUHVHUYRLUIRUWKHDUFKDHDOJHQHUDWHG
YLUXVHVDVWKHVWHPFHOOVDUHQRWDWWDFNHGE\WKHKRPRQHDQGHUWKDOLVLPPXQHFHOOV7KHKRPR
QHDQGHUWKDOLVDUHOLNHWKHXELTXLWRXVEDWZKLFKFDUULHVWKHYLUXVDQGVHUYHVDVDUHVHUYRLUEXW
LVQRWDIIHFWHGE\LW7KHKRPRQHDQGHUWKDOLVJRHVVWHSIXUWKHUZLWKLWVHQGRJHQRXVDUFKDHD
JHQHUDWLQJWKHYLUXVDQGVHUYLQJDVDUHVHUYRLUZLWKWKH1HDQGHUWKDOKRUPRQHGLJR[LQNHHSLQJ
WKHYLUDOSRSXODWLRQXQGHUFKHFN7KHKRPRQHDQGHUWKDOLVZLWKLWVHQGRV\PELRWLFDUFKDHDDQG
GLJR[LQ DUH VXVFHSWLEOH WR FLYLOL]DWLRQDO GLVHDVHV OLNH GLDEHWHV &$' VWURNH DXWRLPPXQH

GLVHDVHVFDQFHUDQGQHXURGHJHQHUDWLRQ7KHKRPRQHDQGHUWKDOLVGHYHORSVLQFUHDVHGFRORQLF
DQG HQGRV\PELRWLF DUFKDHDO JURZWK FRQVHTXHQW WR JOREDO ZDUPLQJ DQG WKH QHZO\ JURZQ
HQGRV\PELRWLF DUFKDHD LQ LWV WXUQ SURGXFHV PHWKDQH DQG 3$+ LQFUHDVLQJ JOREDO ZDUPLQJ D
ZLQZLQVLWXDWLRQOHDGLQJWRPRUHDUFKDHRJHQHVLVDQGHPHUJLQJYLUXVHV
7KH &URPDJQRQ KRPR VDSLHQV RQ WKH RWKHU KDQG DUH QRW D IHUWLOH JURXQG IRU
HQGRV\PELRWLF DUFKDHDO JURZWK DQG SUROLIHUDWLRQ 7KH\ JHW LQIHFWHG E\ VWUDQJH HPHUJLQJ
YLUXVHVWRZKLFKWKH\DUHQRWLPPXQHWRDQGJHWVVODXJKWHUHGDQGEHFRPHH[WLQFW7KH&UR
PDJQRQKRPRVDSLHQVLQKDELWVSDUWVRI$IULFD$VLDDQG(XURSHDQGWKH\DUHVXVFHSWLEOHWR
UHFXUUHQW LQIHFWLRQ RFFXUULQJ DV SDQGHPLFV 7KHVH SDQGHPLFV DUH FUHDWHG E\ WKH KRPR
QHDQGHUWKDOLF HOLWH WR NHHS WKH KRPR VDSLHQV SRSXODWLRQ LQ FKHFN 7KH KRPR QHDQGHUWKDOLV
KDYH D FKROHVWHURO GHSOHWHG VWDWH ZLWK ORZ VH[ KRUPRQHV DQG D DQGURJ\QRXV FXOWXUH 7KH
KRPR QHDQGHUWKDOLV H[LVW DV VPDOO JURXSV 7KH KRPR VDSLHQV RQ RWKHU KDQG KDV KLJK
FKROHVWHURO OHYHOV DQG LQFUHDVHG DPRXQW RI VH[ KRUPRQHV DQG D KLJKHU OHYHO RI SRSXODWLRQ
ZKLFKILOOVWKHHDUWKZKLFKQHHGVFXOOLQJWRFUHDWHDEDODQFH

&+$37(5
&/,0$7(&+$1*(3253+<5,12*(1(6,6$1'$%,2*(1(7,&
5(3/,&$7,212)9,586(635,216$1'$5&+$($±&/,0$7(&+$1*(
5(/$7('0(7$%2/,&(92/87,21$1'$%,2*(1(6,6
&OLPDWH FKDQJH OHDGV WR LQFUHDVHG SRUSK\ULQ V\QWKHVLV DQG SRUSK\ULQ WHPSODWH
PHGLDWHG UHSOLFDWLRQ RI YLUXVHV SULRQV DQG DUFKDHD 7KHUH LV LQFUHDVHG SRUSK\ULQ V\QWKHVLV
OHDGLQJRQWRSRUSK\ULQXULDDQGSRUSK\ULD7KHVWLPXOXVIRUSRUSK\ULQV\QWKHVLVFRPHVIURP
KHPH GHILFLHQF\ +HPH VXSSUHVVHV $/$ V\QWKDVH 6WUHVV LQGXFHV KHPH R[\JHQDVH ZKLFK
FRQYHUWV KHPH WR FDUERQ PRQR[LGH DQG ELOLUXELQ 7KXV KHPH LV GHSOHWHG IURP WKH V\VWHP
+HPH R[\JHQDVH LV LQGXFHG E\ HQYLURQPHQWDO VWUHVV &OLPDWLF FKDQJHV RI JOREDO ZDUPLQJ
DQGLFHDJHFDQLQGXFHKHPHR[\JHQDVH+HPHR[\JHQDVHLVDOVRLQGXFHGE\(0)SROOXWLRQ
RI WKH HQYLURQPHQW 7KXV WKHUH LV LQFUHDVHG SRUSK\ULQ V\QWKHVLV IURP VXFFLQ\O &R$ DQG
JO\FLQH 7KH SRUSK\ULQV FDQ VHOI RUJDQL]H DQG VHOI UHSOLFDWH WR IRUP SULPLWLYH RUJDQLVPV
FDOOHGSRUSK\ULRQV7KHSRUSK\ULRQVKDYHDSULPLWLYHHOHFWURQWUDQVSRUWFKDLQDQGHQHUJHWLFV
7KHSRUSK\ULRQVDUHFDSDEOHRILQIRUPDWLRQWUDQVIHUDQGVWRUDJHE\TXDQWDOSHUFHSWLRQ7KH
SRUSK\ULRQVIRUPDWHPSODWHIRUWKHIRUPDWLRQRI51$YLUXVHVDQGYLURLGV'1$YLUXVHVDQG
YLURLGV LVRSUHQRLG RUJDQLVPV DQG SULRQV ZKLFK DOO FDQ VHOI RUJDQL]H DQG DVVRFLDWH WR IRUP
SULPLWLYHDUFKDHD7KXVWKHFOLPDWHFKDQJHLQGXFHGJOREDOLQFUHDVHLQSRUSK\ULQV\QWKHVLVLQ
KXPDQVOHDGVWRLQFUHDVHGDELRJHQHWLFIRUPDWLRQRIDUFKDHDZKLFKSURGXFHVPRUHRIPHWKDQH
DQGPHWKDQRJHQHVLVOHDGLQJWRPRUHRIJOREDOZDUPLQJ*OREDOZDUPLQJOHDGVWRPRUHKHPH
R[\JHQDVH LQGXFWLRQ DQG SRUSK\ULQRJHQHVLV 7KH SRUSK\ULQV FDQ IRUP D WHPSODWH IRU
DELRJHQHWLF UHSOLFDWLRQ RI 51$ YLUXVHV OLNH FRURQD YLUXVHV 7KH SRUSK\ULQV FDQ LQWHUFDODWH
EHWZHHQFHOOXODUDQGRUJDQHOOHPHPEUDQHVDQGWKHSRUSK\ULQFRURQDYLUXVFRPSOH[FDQHQWHU
DOO FHOO W\SHV DQG RUJDQHOOH ZLWK WKHVH 7KH SRUSK\ULQV ZLOO VHUYH IRU DELRJHQHWLF WHPSODWH
PHGLDWHG VHOI UHSOLFDWLRQ RI WKH FRURQD YLUXV 7KH FRURQD YLUXV 51$ FDQ JHW WUDQVFULEHG WR
'1$ VHTXHQFHV E\ XVLQJ KXPDQ +(59 UHYHUVH WUDQVFULSWDVH 7KH FRURQD YLUXV '1$
VHTXHQFHV FDQ JHW LQWHJUDWHG LQWR WKH KXPDQ JHQRPH QRQFRGLQJ DUHD SURGXFLQJ G\QDPLF
FKDQJHVLQWKHKXPDQJHQRPH7KHFRURQDYLUXVFDQWKXVSHUVLVWVDQGUHSOLFDWHELRORJLFDOO\
DQGDELRJHQHWLFDOO\LQWKHKXPDQV\VWHPIRUHYHUHWHUQDOO\

1HDQGHUWKDOPHWDERORQRPLFVDQGFOLPDWHFKDQJH
7KH 1HDQGHUWKDO PHWDEROLF SDWWHUQV ZHUH GLIIHUHQW IURP WKH KRPR VDSLHQ SDWWHUQV
6WUHVVRIWKHLFHDJHOHGWRWKHLQGXFWLRQRI+2+2FRQYHUWVKHPHWRELOLUXELQDQGFDUERQ

PRQR[LGH7KLVUHVXOWVLQKHPHGHSOHWLRQ+HPHGHSOHWLRQLQGXFHV$/$V\QWKDVHDQGUHVXOWV
LQ SRUSK\ULQRJHQHVLV 3RUSK\ULQ SKRWRR[LGDWLRQ UHVXOWV LQ 526 JHQHUDWLRQ DQG LQGXFWLRQ RI
+,)DOSKDUHVXOWLQJLQWKH:DUEXUJSKHQRW\SHZLWKLQFUHDVHGJO\FRO\VLV3'+LQKLELWLRQDQG
PLWRFKRQGULDO G\VIXQFWLRQ +HPH GHSOHWLRQ OHDGV WR GHIHFWLYH IXQFWLRQ RI WKH 7&$ F\FOH
KHPHHQ]\PHDFRQLWDVHDQGWKHPLWRFKRQGULDOHQ]\PHF\WRFKURPH&R[LGDVH7KLVUHVXOWVLQ
WKH ERG\ JHQHUDWLQJ HQHUJ\ E\ JO\FRO\VLV DV ZHOO DV PHPEUDQH VRGLXP SRWDVVLXP $73DVH
LQKLELWLRQLQGXFHG$73V\QWKHVLV0LWRFKRQGULDOG\VIXQFWLRQOHDGVWRLQVXOLQUHVLVWDQFH
7KH3'+LQKLELWLRQOHDGVWROHVVOHYHOVRIWKHVXEVWUDWHDFHW\O&R$IRUWKHLVRSUHQRLG
SDWKZD\IRUV\QWKHVLVRIFKROHVWHURO/RZOHYHORIFKROHVWHUROV\QWKHVLVOHDGVWRORZFRUWLVRO
WHVWRVWHURQHHVWURJHQYLWDPLQ'FRHQ]\PH4DQGELOHDFLGV%LOHDFLGGHILFLHQF\FDQOHDGWR
GHIHFWLYH PRGXODWLRQ RI /;5 );5 DQG 3;5 OHDGLQJ WR PHWDEROLF V\QGURPH ; &R4
GHILFLHQF\ OHDGV WR PLWRFKRQGULDO G\VIXQFWLRQ 9LWDPLQ ' GHILFLHQF\ OHDGV WR LPPXQH
DFWLYDWLRQ /RZ FRUWLVRO OHYHOV OHDG WR GHIHFWLYH VWUHVV UHVSRQVH /RZ WHVWRVWHURQH DQG
HVWURJHQOHDGVWRDQDVH[XDOVWDWH

(QGRV\PELRWLFDUFKDHDDQGELRORJLFDOWUDQVPXWDWLRQ
7KH DUFKDHD FDQ LQGXFH ELRORJLFDO WUDQVPXWDWLRQ PHWDOV 7KHUH LV FRQYHUVLRQ RI
PDJQHVLXP WR FDOFLXP 7KLV UHVXOWV LQ PLWRFKRQGULDO 37 SRUH G\VIXQFWLRQ DQG FHOO GHDWK
1).%DFWLYDWLRQDQGLPPXQHVWLPXODWLRQUHOHDVHRIPRQRDPLQHQHXURWUDQVPLWWHUVUHVXOWLQJ
VFKL]RSKUHQLD DQG DXWLVP FDOFLXP LQGXFHG RQFRJHQH DFWLYDWLRQ DQG GHIHFWLYH LQVXOLQ
VHFUHWLRQSURGXFLQJPHWDEROLFV\QGURPH7KHUHLVDOVRFRQYHUVLRQRI]LQFWRFRSSHU=LQFLV
UHTXLUHGIRUJOXWDPDWHDQG*$%$WUDQVPLVVLRQ=LQFIXQFWLRQVDVDQHXURWUDQVPLWWHULQWKH
SUHIURQWDO FRUWH[ 7KH ]LQF FRQWDLQLQJ QHXURQV DUH FDOOHG JOX]LQHUJLF QHXURQV &RSSHU LV
UHTXLUHG IRU PRQRDPLQH WUDQVPLVVLRQ DQG WKH IXQFWLRQ RI FHUHEHOOXP EUDLQ VWHP DQG EDVDO
JDQJOLD WKH SULPLWLYH SDUWV RI WKH EUDLQ 7KXV WKH FRQYHUVLRQ RI ]LQF WR FRSSHU UHVXOWV LQ
SUHIURQWDO FRUWH[ DWURSK\ DQG FHUHEHOODU GRPLQDQFH %LRORJLFDO WUDQVPXWDWLRQ FDQ DOVR
JHQHUDWHHQHUJ\

(QGRV\PELRWLFDUFKDHDLQGXFHG:DUEXUJSKHQRW\SH
7KH DUFKDHD LQGXFHG :DUEXUJ SKHQRW\SH FDQ SURGXFH 3'+ EORFNDGH DQG
DFFXPXODWLRQRIS\UXYDWH7KHS\UXYDWHHQWHUVWKH*$%$VKXQWJHQHUDWLQJVXFFLQ\O&R$DQG
JO\FLQH UHVXOWLQJ LQ SRUSK\ULQ V\QWKHVLV 3RUSK\ULQ FDQ SURGXFH TXDQWDO SHUFHSWLRQ RI ORZ
OHYHO(0)UHVXOWLQJLQSUHIURQWDOFRUWH[DWURSK\DQGFHUHEHOODUGRPLQDQFH6LQFHJO\FLQHLV

XVHG XS IRU SRUSK\ULQ V\QWKHVLV VHULQH LV QRW IRUPHG 7KHUH LV QR F\VWDWKLRQLQH V\QWKHVLV
OHDGLQJRQWRK\SHUKRPRF\VWHLQHPLD7KH3'%EORFNDGHUHVXOWVLQDFFXPXODWLRQRIS\UXYDWH
ZKLFKJHWVFRQYHUWHGWRJOXWDPDWHDQGDPPRQLDUHVXOWLQJLQDK\SHUDPPRQHPLFV\QGURPH
7KH %.&' HQ]\PH KDV D VWUXFWXUH VLPLODU WR 3'+ %.&' GHILFLHQF\ UHVXOWV LQ
DFFXPXODWLRQRIEUDQFKHGFKDLQDPLQRDFLGV7RFRXQWHUDFWWKLVWKH1HDQGHUWKDOVGHYHORSHG
GHIHFWVLQQHXWUDODPLQRDFLGVUHQDOWUDQVSRUWHU7KLVUHVXOWHGLQD+DUWQXS¶VGLVHDVHPXWDWLRQ
DQG QLFRWLQLF DFLG GHILFLHQF\ FRQVHTXHQW WR ORVV RI WU\SWRSKDQ 7KH IXQFWLRQ RI VLUWXLQV D
KLVWRQHGHDFHW\ODVHLQKLELWRUDOVRLQYROYHGLQSURWHLQDFHW\ODWLRQLVDIIHFWHG1LFRWLQLFDFLGV
DUH VLUWXLQ LQKLELWRUV 7KH 3'+ EORFNDGH UHVXOWV LQ GHIHFWLYH JHQHUDWLRQ RI DFHW\O &R$ DQG
GHIHFWLYHSURWHLQDFHW\ODWLRQ7KHUHDUHQHDUO\DFHW\ODWHGSURWHLQV7KXV3'+EORFNDGH
FDQPRGXODWHSURWHRQRPLFV

$UFKDHDYLURLGVDQGPHWDEROLFUHJXODWLRQ
7KHDUFKDHDLQGXFHG51$YLURLGVFDQEORFNP51$DQGUHJXODWH51$IXQFWLRQ7KH
SRUSK\ULQV FDQ LQWHUFDODWH ZLWK '1$ DQG 51$ PRGXODWLQJ WKHLU IXQFWLRQ 6LUWXLQ LQGXFHG
+'$&LQKLELWLRQPRGXODWHGE\+DUWQXS¶VGLVHDVHPXWDWLRQDQGQLFRWLQLFDFLGGHILFLHQF\FDQ
DOVR PRGXODWH JHQRPLF IXQFWLRQ 7KH 51$ YLURLGV JHQHUDWHG E\ DUFKDHD FDQ JHW LQWHJUDWHG
LQWR'1$IXQFWLRQDVMXPSLQJJHQHVDQGPRGXODWHJHQRPLFIXQFWLRQ

$UFKDHDOGLJR[LQDQGPHWDEROLFUHJXODWLRQ
7KH DUFKDHD FDQ FDWDEROL]H FKROHVWHURO WR GLJR[LQ ZKLFK FDQ SURGXFH PHPEUDQH
VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ LQFUHDVLQJ LQWUDFHOOXODU FDOFLXP DQG UHGXFLQJ
LQWUDFHOOXODUPDJQHVLXP7KHUHLVGHFUHDVHLQPDJQHVLXPDQGLQFUHDVHLQFDOFLXPUHVXOWVLQ
PLWRFKRQGULDO37SRUHG\VIXQFWLRQDQGFHOOGHDWK1).%DFWLYDWLRQDQGLPPXQHVWLPXODWLRQ
UHOHDVHRIPRQRDPLQHQHXURWUDQVPLWWHUVUHVXOWLQJVFKL]RSKUHQLDDQGDXWLVPFDOFLXPLQGXFHG
RQFRJHQHDFWLYDWLRQDQGGHIHFWLYHLQVXOLQVHFUHWLRQSURGXFLQJPHWDEROLFV\QGURPH

*OREDOZDUPLQJHQGRV\PELRWLFDUFKDHDDQGIUXFWRVHGLVHDVH
*OREDO ZDUPLQJ OHDGV WR LQFUHDVH LQ HQGRV\PELRWLF DFWLQLGLF DUFKDHDO JURZWK
$UFKDHD DUH H[WUHPRSKLOHV 7KH DFWLQLGLF DUFKDHD VXUYLYH E\ FDWDEROL]LQJ FKROHVWHURO 7KH
DUFKDHDDQGLWVDQWLJHQVLQGXFH+,)DOSKDDQGDFWLYDWHWKHJO\FRO\WLFSDWKZD\7KHJO\FRO\WLF
SDWKZD\DFWLYDWLRQLQGXFHVLQFUHDVHGFRQYHUVLRQRIJOXFRVHWRIUXFWRVHE\DFWLYDWLRQRIWKH
VRUELWRO SDWKZD\ *OXFRVH LV FRQYHUWHG WR VRUELWRO E\ WKH HQ]\PH DOGRVH UHGXFWDVH DQG

VRUELWRO LV FRQYHUWHG WR IUXFWRVH E\ WKH DFWLRQ RI VRUELWRO GHK\GURJHQDVH )UXFWRVH LV
SKRVSKRU\ODWHG E\ KH[RNLQDVH RU IUXFWRNLQDVH WR IUXFWRVH SKRVSKDWH +H[RNLQDVH KDV D ORZ
NP YDOXH IRU IUXFWRVH DQG PLQLPDO DPRXQWV RI IUXFWRVH ZLOO EH FRQYHUWHG WR IUXFWRVH
SKRVSKDWHGHSOHWLQJWKHFHOOXODU$73$73LVFRQYHUWHGWR$03DQGE\WKHDFWLRQRI$03
GHDPLQDVHLVFRQYHUWHGWRXULFDFLG7KXVWKHUHLVUHVXOWDQWK\SHUXULFHPLDDQGWKHGHSOHWLRQ
RI $73 DOVR SURGXFHV PHPEUDQH VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ ,QKLELWLRQ RI
PHPEUDQH VRGLXP SRWDVVLXP $73DVH LQFUHDVHV LQWUDFHOOXODU FDOFLXP DQG GHSOHWHV
PDJQHVLXP 7KLV SURGXFHV FHOO GHDWK E\ RSHQLQJ XS WKH PLWRFKRQGULDO 37 SRUH 1).%
DFWLYDWLRQDQGLPPXQHDFWLYDWLRQJOXWDPDWHH[FLWRWR[LFLW\DQGRQFRJHQHDFWLYDWLRQOHDGLQJ
WRV\VWHPLFGLVRUGHUV7KHGHSOHWLRQRI$73ILQDOO\LQKLELWVKH[RNLQDVHDVVXFKDQGJOXFRVH
SKRVSKRU\ODWLRQVWRSVEORFNLQJWKHJO\FRO\WLFSDWKZD\DQGLWVFRXSOLQJWRWKHPLWRFKRQGULDO
R[LGDWLYHSKRVSKRU\ODWLRQE\WKHDFWLRQRI37SRUHKH[RNLQDVH7KHFHOOLVGHSOHWHGRIHQHUJ\
E\JO\FRO\VLVDQGWKHR[LGDWLYHSKRVSKRU\ODWLRQVFKHPHDQGGLHV7KXVJOREDOZDUPLQJYLD
LQGXFWLRQ RI JO\FRO\VLV DQG :DUEXUJ SKHQRW\SH DQG WKH LQFUHDVHG FRQYHUVLRQ RI JOXFRVH WR
IUXFWRVHDQGWKHUHVXOWDQWFHOOXODUGHSOHWLRQRI$73FDQSURGXFHV\VWHPLFGLVRUGHUVDQGFHOO
G\VIXQFWLRQ DV ZHOO DV GHDWK 7KLV FDQ SURGXFH WKH JOREDO ZDUPLQJ UHODWHG V\VWHPLF
V\QGURPH
*OREDO ZDUPLQJ OHDGV WR QHDQGHUWKDOLVDWLRQ RI WKH KXPDQ VSHFLHV FRQVHTXHQW WR
JURZWKRIDFWLQLGLFDUFKDHD7KH1HDQGHUWKDOVZHUHDFFXVWRPHGWRDNHWRJHQLFKLJKIDWKLJK
SURWHLQ GLHW 7KH NHWRQH ERGLHV ZHUH R[LGLVHG WR JHQHUDWH $73 LQ WKH PLWRFKRQGULD 7KH
QHDQGHUWKDOLVHGKXPDQVGXHWRDFWLQLGLFDUFKDHDOJURZWKGXHWRFRQVXPSWLRQRIDJOXFRJHQLF
GLHW OHDGV WR LQGXFWLRQ RI JO\FRO\WLF HQ]\PHV 7KH JO\FRO\WLF HQ]\PHV DUH F\WRVROLF 7KH
JO\FRO\WLF HQ]\PHV DUH DQWLJHQLF LQ WKH QHDQGHUWKDOLVHG KXPDQV 7KH JO\FRO\WLF HQ]\PHV
ZHUHVXSSUHVVHGLQKRPRQHDQGHUWKDOLVZKRDWHNHWRJHQLFGLHW7KLVUHVXOWVLQVXSSUHVVLRQRI
LQGXFHG JO\FRO\WLF HQ]\PHV E\ DQWLERG\ IRUPDWLRQ LQ KRPR QHRQHDQGHUWKDOLV ZKLFK DULVHV
GXHWRDUFKDHDOJURZWKFRQVHTXHQWWRJOREDOZDUPLQJ7KHEORFNDGHRIJO\FRO\VLVUHVXOWVLQ
EORFNDGH RI FHOO HQHUJHWLFV 7KLV UHVXOWV LQ K\SHUJO\FHPLD DQG PHWDEROLF V\QGURPH ; 7KH
JOXFRVHLVFRQYHUWHGWRVRUELWROE\DOGRVHUHGXFWDVHDQGVRUELWROLVFRQYHUWHGWRIUXFWRVHE\
IUXFWRNLQDVH )UXFWRNLQDVH HQ]\PH LV QDWLYH WR 1HDQGHUWKDOV DV WKH\ FRQVXPHG IUXLWV DORQJ
ZLWK IDW DQG SURWHLQ IURP PHDW )UXFWRVH LV SKRVSKRU\ODWHG WR IUXFWRVH SKRVSKDWH ZKLFK
GHSOHWHV WKH FHOO RI $73 7KLV LQKLELWV PHPEUDQH VRGLXP SRWDVVLXP $73DVH OHDGLQJ RQWR
LQFUHDVH LQ LQWUDFHOOXODU FDOFLXP DQG UHGXFWLRQ LQ LQWUDFHOOXODU PDJQHVLXP 7KLV SURGXFHV
JOXWDPDWHH[FLWRWR[LFLW\DQGQHXURGHJHQHUDWLRQRQFRJHQHDFWLYDWLRQDQGPDOLJQDQF\1).%

DFWLYDWLRQ DQG DXWRLPPXQH GLVHDVH UHOHDVH RI PRQR DPLQH QHXURWUDQVPLWWHUV IURP
SUHV\QDSWLFYHVLFOHVDQGVFKL]RSKUHQLDDQGDOOV\VWHPLFGLVHDVHV7KHLQFUHDVHGJOXFRVHJHWV
PHWDEROLVHGE\DUFKDHDOJO\FRO\VLVDQGFLWULFDFLGF\FOH7KHS\UXYDWHJHQHUDWHGE\DUFKDHDO
JO\FRO\VLV HQWHUV WKH *$%$ VKXQW VFKHPH JHQHUDWLQJ VXFFLQ\O &R$ DQG JO\FLQH ZKLFK DUH
VXEVWUDWHVIRUSRUSK\ULQV\QWKHVLV7KHDUFKDHDOFLWULFDFLGF\FOHFDQEHUHGXFWLYHJHQHUDWLQJ
FDUERQ GLR[LGH IL[DWLRQ DNLQ WR WKH &DOYLQ F\FOH RI SKRWRV\QWKHVLV RU R[LGDWLYH JHQHUDWLQJ
DFHW\O&R$ZKLFKLVXVHGIRUFKROHVWHUROV\QWKHVLVE\WKHDUFKDHDOPHYDORQDWHSDWKZD\7KH
DUFKDHDO JO\FRO\VLV DOVR JHQHUDWHV IUXFWRVH GLSKRVSKDWH ZKLFK HQWHUV WKH SHQWRVH
SKRVSKDWHSDWKZD\SURGXFLQJ'[\OXORVHSKRVSKDWHZKLFKLVDVXEVWUDWHIRU';3SDWKZD\RI
DUFKDHDO FKROHVWHURO V\QWKHVLV 7KH DUFKDHD V\QWKHVL]HV FKROHVWHURO E\ ERWK WKH PHYDORQDWH
SDWKZD\DQG';%SDWKZD\7KHDUFKDHDFDQXVHFKROHVWHUROIRUHQHUJHWLFVE\FDWDEROL]LQJLW
7KH FKROHVWHURO ULQJ LV R[LGLVHG WR S\UXYDWH ZKLFK HQWHUV WKH *$%$ VKXQW ZKLFK SURYLGHV
VXEVWUDWHVIRUWKHFLWULFDFLGF\FOH7KHS\UXYDWHLVFRQYHUWHGWRJOXWDPDWHDQGDPPRQLD7KH
DUFKDHDFDQR[LGLVHDPPRQLDIRUHQHUJ\7KHVLGHFKDLQRIFKROHVWHUROLVR[LGLVHGWREXW\UDWH
DQG SURSLRQDWH ZKLFK FDQ DOVR EH IXUWKHU XWLOLVHG IRU HQHUJ\ SXUSRVHV 7KH DUFKDHDO
HQHUJHWLFV GHSHQGV RQ JO\FRO\VLV FLWULF DFLG F\FOH DPPRQLD R[LGDWLRQ DQG FKROHVWHURO
FDWDEROLVP 7KH DQWLERGLHV DJDLQVW WKH JO\FRO\WLF HQ]\PHV DOGRODVH HQRODVH *$3'+ DQG
S\UXYLFNLQDVHFRQWULEXWHVWRPHWDEROLFV\QGURPH;VFKL]RSKUHQLDPRRGGLVRUGHUVDXWLVP
PXOWLSOH VFOHURVLV OXSXV $O]KHLPHU¶V GLVHDVH DQG 3DUNLQVRQ¶V GLVHDVH 7KH XSUHJXODWLRQ RI
JO\FRO\VLV FRQWULEXWHV WR QHRSODVWLF VWDWH 7KH DQWLERGLHV DUH SURGXFHG DJDLQVW LQGXFHG
JO\FRO\WLFHQ]\PHVDVZHOODVDUFKDHDOJO\FRO\WLFHQ]\PHV7KHEORFNDGHRIJO\FRO\VLVOHDGV
WRDVHFRQGDU\PLWRFKRQGULDOG\VIXQFWLRQ7KHJO\FRO\WLFVFKHPHLVFRXSOHGWRPLWRFKRQGULDO
R[LGDWLYH SKRVSKRU\ODWLRQ E\ PLWRFKRQGULDO 37 SRUH KH[RNLQDVH 7KH DQWLERGLHV DJDLQVW
JO\FRO\VLVEORFNVJO\FRO\VLVDQGSURGXFHVHFRQGDU\PLWRFKRQGULDOG\VIXQFWLRQ7KHFHOOXVHV
DOOLWVHQHUJHWLFV7KHGHSOHWLRQRI$73E\SKRVSKRU\ODWLRQRIIUXFWRVHSURGXFHVPHPEUDQH
VRGLXPSRWDVVLXP$73DVHLQKLELWLRQDQGFHOOKLEHUQDWLRQDVZHOODVVWHPFHOOWUDQVIRUPDWLRQ
7KH KXPDQ WLVVXH V\VWHPV FRPH WR D KDOW DQG IRUP D IUDPHZRUN IRU DUFKDHDO FRORQLHV WR
WKULYH 7KH KXPDQ ERG\ EHFRPHV D ]RPELH IRU DUFKDHDO FRORQLHV ZKLFK DUH HWHUQDO 7KLV
DIIHFWV WKH IXQFWLRQ RI RUJDQ V\VWHPV OLNH WKH OLYHU SURGXFLQJ FLUUKRVLV WKH OXQJ SURGXFLQJ
LQWHUVWLWLDO OXQJ GLVHDVH UHQDO ILEURVLV DQG &5) FDUGLRP\RSDWK\ DQG $O]KHLPHU¶V GLVHDVH
7KLV FDQ EH FDOOHG DV WKH ]RPELH V\QGURPH 7KH GHSOHWLRQ RI $73 E\ SKRVSKRU\ODWLRQ RI
IUXFWRVHJHQHUDWHV$'3DQG$03ZKLFKE\DFWLRQRI$03GHDPLQDVHSURGXFHVXULFDFLGDQG
K\SHUXULFHPLD 7KH ]RPELH V\QGURPH FRQYHUWV WKH KXPDQ ERG\ WR D IUDPHZRUN IRU DQ
DUFKDHDO FRORQ\ QHWZRUN 7KH DUFKDHD FDQ VHFUHWH 51$ DQG '1$ YLURLGV ZKLFK FDQ

UHFRPELQH ZLWK KXPDQ HQGRJHQRXV UHWURYLUDO VHTXHQFHV DQG KXPDQ '1$ VHTXHQFHV
JHQHUDWLQJQHZ51$YLUXVHV'1$YLUXVHVDQGEDFWHULD7KXVWKH]RPELHV\QGURPHUHVXOWV
LQ WKH JHQHUDWLRQ RI QHZ EDFWHULD DQG YLUXVHV 7KH ]RPELH V\QGURPH FDQ EH WUHDWHG E\
VXSSUHVVLRQ RI JO\FRO\VLV 7KLV FDQ EH GRQH E\ JLYLQJ D NHWRJHQLF GLHW GHULYHG IURP ILEUH
VKRUWFKDLQIDWW\DFLGVEXW\UDWHDQGDFHWDWHSRO\XQVDWXUDWHGIDWW\DFLGVDQGVKRUWFKDLQIDWW\
DFLGVOLNHODXULFDFLG

*OREDOZDUPLQJHQGRV\PELRWLFDUFKDHDDQGFRQQHFWLYHWLVVXHPHWDEROLVP
7KHJOREDOZDUPLQJ]RPELHV\QGURPHUHVXOWVLQFRQYHUVLRQRIJOXFRVHWRIUXFWRVHE\
WKHLQGXFWLRQRIDOGRVHUHGXFWDVHFRQVHTXHQWWRGHK\GUDWLRQ7KHJOXFRVHLVILUVWFRQYHUWHGWR
VRUELWROE\DOGRVHUHGXFWDVHDQGWKHQE\VRUELWROGHK\GURJHQDVHWRIUXFWRVH)UXFWRVHKDVJRW
DKLJKYDOXHIRUNHWRNLQDVHDQGLVSKRVSKRU\ODWHGDQGHQWHUVWKHSHQWRVHSKRVSKDWHSDWKZD\
)UXFWRVH LV FRQYHUWHG WR JOXFRVDPLQH SKRVSKDWH DQG JDODFWRVDPLQH SKRVSKDWH 7KHUH LV
LQFUHDVHGV\QWKHVLVRIJO\FRVDPLQRJO\FDQV7KLVSURGXFHV*$*DFFXPXODWLRQLQWKHYHVVHOV
SURGXFLQJ PXFRLG DQJLRSDWK\ NLGQH\ SURGXFLQJ 0(1 KHDUW SURGXFLQJ (0) SDQFUHDV
SURGXFLQJ &&3 DQG WK\URLG SURGXFLQJ 01* ,W FDQ DOVR UHVXOW LQ ILEURVLV RI WKH OXQJ DQG
OLYHU SURGXFLQJ FLUUKRVLV DQG LQWHUVWLWLDO OXQJ GLVHDVH 7KHVH GLVHDVHV DUH FRPPRQ LQ ZDUP
WURSLFDOFRXQWULHVVRXWKRIHTXDWRUDQGFDQEHFDOOHGDVWKH/HPXULDQV\QGURPH7KHLQFUHDVH
NP YDOXH RI IUXFWRVH IRU NHWRNLQDVH UHVXOWV LQ LQFUHDVHG SKRVSKRU\ODWLRQ RI IUXFWRVH RYHU
JOXFRVHSURGXFLQJK\SHUJO\FHPLDDQGPHWDEROLFV\QGURPH7KHSKRVSKRU\ODWLRQRIIUXFWRVH
GHSOHWHVWKHFHOORI$73DQGFRQYHUWV$73WR$03DQG$'3ZKLFKLVDFWHGXSRQE\$73
GHDPLQDVH SURGXFLQJ XULF DFLG 7KH FKDQQHOOLQJ RI IUXFWRVH LQWR WKH SHQWRVH SKRVSKDWH
SDWKZD\ UHVXOWV LQ LQFUHDVHG SURGXFWLRQ RI ULERVH DQG QXFOHLF DFLG V\QWKHVLV DQG XULF DFLG
SURGXFWLRQFRQVHTXHQWWRSXULQHGHJUDGDWLRQ7KHUHLVK\SHUXULFHPLD7KHWXEXODUGHIHFWRI
0(1 SURGXFHV K\SRNDOHPLD DQG K\SRQDWUHPLD 7KH LQFUHDVH LQ IUXFWRVH SURGXFHV IUXFWRVH
JO\FDWLRQRISURWHLQVUHVXOWLQJLQWKHIRUPDWLRQRIDQWLJHQLFSURWHLQVDQGDXWRLPPXQHGLVHDVH
)UXFWRVH FDQ SURGXFH LQIODPPDWLRQ DQG DXWRLPPXQLW\ 7KLV LV FDOOHG DV IUXFWRVLWLV 7KH
LQFUHDVH LQ IUXFWRVH ZKLFK LV FKDQQHOOHG WR WKH SHQWRVH SKRVSKDWH SDWKZD\ DQG ULERVH
V\QWKHVLVUHVXOWVLQLQFUHDVHGQXFOHLFDFLGV\QWKHVLVDQGFDQFHUIRUPDWLRQ7KHGHSOHWLRQRI
FHOOXODU $73 FRQVHTXHQW WR SKRVSKRU\ODWLRQ RI IUXFWRVH UHVXOWV LQ FHOO GHDWK DQG QHXURQDO
GHJHQHUDWLRQ&HOOGHDWKLQLQWHVWLQDOPXFRVDEUHDFKHVWKHEORRGJXWEDUULHUSURGXFLQJOHDN\
JXWV V\QGURPH DFXWH SKDVH UHVSRQVH DQG PHWDEROLF V\QGURPH ; DV ZHOO DV DXWRLPPXQLW\
7KHSKRVSKRU\ODWLRQRIIUXFWRVHDQGGHSOHWLRQRI$73UHVXOWVLQPHPEUDQHVRGLXPSRWDVVLXP
$73DVH LQKLELWLRQ DQG LQFUHDVH LQ LQWUDFHOOXODU FDOFLXP DQG UHGXFWLRQ LQ LQWUDFHOOXODU

PDJQHVLXP7KLVUHVXOWVLQLQVXOLQUHVLVWDQFHJOXWDPDWHH[FLWRWR[LFLW\RQFRJHQHDFWLYDWLRQ
PRQRDPLQH VHFUHWLRQ IURP SUHV\QDSWLF YHVLFOHV DQG VFKL]RSKUHQLD DV ZHOO DV 1).%
DFWLYDWLRQ DQG DXWRLPPXQLW\ 7KH FKDQQHOOLQJ RI IUXFWRVH WR JOXFRVDPLQH V\QWKHVLV DQG
LQFUHDVHG V\QWKHVLV RI *$* UHVXOWV LQ LQFUHDVHG KHSDUDQ VXOSKDWH V\QWKHVLV ZKLFK ZLOO
FRPELQH ZLWK SURWHLQV IRUPLQJ DP\ORLG $P\ORLG IRUPDWLRQ LV WKH EDVLV RI PRWRU QHXURQ
GLVHDVHZKHUHULERQXFOHRSURWHLQVIRUPDP\ORLG,Q3DUNLQVRQ¶VGLVHDVHDOSKDV\QXFOHLQIRUPV
DP\ORLG ,Q $O]KHLPHU¶V GLVHDVH EHWD DP\ORLG LV IRUPHG 7KH WXPRXU VXSSUHVVRU SURWHLQV
IRUPVDP\ORLGDQGUHVXOWVLQRQFRJHQHVLV7KHLVOHWDVVRFLDWHGDP\ORLGSRO\SHSWLGHIRUPVWKH
EDVLVRIGHIHFWLYHLQVXOLQVHFUHWLRQLQPHWDEROLFV\QGURPH;

*OREDOZDUPLQJHQGRV\PELRWLFDUFKDHDDQGIUXFWRVHPLD
*OREDO ZDUPLQJ OHDGV WR DOGRVH UHGXFWDVH LQGXFWLRQ $OGRVH UHGXFWDVH FRQYHUWV
JOXFRVH WR VRUELWRO 6RUELWRO LV FRQYHUWHG WR IUXFWRVH E\ VRUELWRO GHK\GURJHQDVH )UXFWRVH LV
SKRVSKRU\ODWHG E\ IUXFWRNLQDVH DQG NHWRNLQDVHV KDYH D KLJKHU NP YDOXH IRU IUXFWRVH WKDQ
JOXFRVH7KLVUHVXOWVLQUDSLGSKRVSKRU\ODWLRQRIIUXFWRVHDQGGHSOHWLRQRIFHOOXODU$737KH
GHSOHWLRQRIFHOOXODU$73KDVWZRFRQVHTXHQFHV$73LVFRQYHUWHGWR$'3DQG$03$'3
DQG$03DUHDFWHGXSRQE\GHDPLQDVHVJHQHUDWLQJXULFDFLG+\SHUXULFHPLDLVDIHDWXUHRI
JOREDOZDUPLQJUHODWHGPHWDEROLFSKHQRPHQD7KHGHSOHWLRQRI$73UHVXOWVLQUHQDOWXEXODU
G\VIXQFWLRQ SURGXFLQJ ORVV RI HOHFWURO\WHV DQG DPLQR DFLGV 7KLV UHVXOWV LQ QRQVSHFLILF
DPLQRDFLGXULD K\SRNDOHPLD DQG K\SRQDWUHPLD 7KHUH LV QR HGHPD RU K\SHUWHQVLRQ 7KLV
SURGXFHVDFKURQLFWXEXORLQWHUVWLWLDOGLVHDVHFDOOHG0HVRDPHULFDQQHSKURSDWK\7KHFHOOXODU
GHSOHWLRQRI$73FDQSURGXFHFHOOGHDWKOHDGLQJRQWRQHXURQDOGHJHQHUDWLRQ7KHGHSOHWLRQ
RI $73 SURGXFHV PHPEUDQH VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ DQG LQFUHDVH LQ
LQWUDFHOOXODU FDOFLXP DQG UHGXFWLRQ LQ LQWUDFHOOXODU PDJQHVLXP 7KLV SURGXFHV LPPXQH
DFWLYDWLRQ E\ 1).% LQGXFWLRQ RQFRJHQH DFWLYDWLRQ JOXWDPDWH H[FLWRWR[LFLW\ DQG
QHXURGHJHQHUDWLRQ UHOHDVH RI PRQRDPLQHV LQWR V\QDSWLF MXQFWLRQ DQG VFKL]RSKUHQLD 7KH
GHSOHWLRQRI$73FDQDOVRDIIHFWWKHJXWEORRGEDUULHUSURGXFLQJDQDFXWHSKDVHUHVSRQVHDQG
OHDN\ JXW V\QGURPH 7KH DFXWH SKDVH UHVSRQVH FDQ OHDG WR PHWDEROLF V\QGURPH ; 7KH
GHSOHWLRQ RI $73 RZLQJ WR WKH DIILQLW\ RI NHWRNLQDVHV IRU IUXFWRVH OHDGV WR ODFN RI
SKRVSKRU\ODWLRQ RI JOXFRVH 7KLV OHDGV WR K\SHUJO\FHPLD DQG PHWDEROLF V\QGURPH ; 7KH
JOXFRVHWKDWDFFXPXODWHVJHWVFRQYHUWHGWRIUXFWRVHSURGXFLQJWKHV\QGURPHRIIUXFWRVLWLV
)UXFWRVHKDVJRWWZRPHWDEROLFIDWHV7KHIUXFWRVHFDQJHWSKRVSKRU\ODWHGWRIUXFWRVH
SKRVSKDWH DQG HQWHU WKH SHQWRVH SKRVSKDWH SDWKZD\ JHQHUDWLQJ ULERVH LPSRUWDQW LQ QXFOHLF

DFLG V\QWKHVLV 7KH SXULQH FDWDEROLVP FDQ JHQHUDWH XULF DFLG 7KH V\QWKHVLV RI QXFOHLF DFLG
FDQ OHDG WR LQFUHDVHG FHOO SUROLIHUDWLRQ DQG RQFRJHQHVLV 7KXV JOREDO ZDUPLQJ UHODWHG
IUXFWRVLWLV FDQ OHDG WR RQFRJHQHVLV 7KH IUXFWRVH WKDW JHWV DFFXPXODWHG FDQ DOVR HQWHU WKH
SDWKZD\IRUJO\FRVDPLQRJO\FDQDQGSURWHRJO\FDQV\QWKHVLV7KHIUXFWRVHLVSKRVSKRU\ODWHG
DQG FRQYHUWHG WR IUXFWRVH SKRVSKDWH ZKLFK FDQ EH FRQYHUWHG WR JOXFRVDPLQH DQG
JDODFWRVDPLQH ZKLFK DUH VXEVWUDWHV IRU JO\FRVDPLQRJO\FDQ V\QWKHVLV 7KLV UHVXOWV LQ
DFFXPXODWLRQRIFRQQHFWLYHWLVVXHPXFRSRO\VDFFKDULGHVLQWKHERG\DQGWLVVXHVOHDGLQJRQWR
GLVHDVHVWDWHVOLNHHQGRP\RFDUGLDOILEURVLVFKURQLFFDOFLILFSDQFUHDWLWLVPXOWLQRGXODUJRLWUH
DQGPXFRLGDQJLRSDWK\ZKLFKFDQEHFODVVLILHGDVDFDUGLRYDVFXODUDQGHQGRFULQHV\QGURPH
RI XQNQRZQ RULJLQ UHODWHG WR JOREDO ZDUPLQJ DNLQ WR 0(1 7KH DFFXPXODWLRQ RI
PXFRSRO\VDFFKDULGHV FDQ RFFXU LQ WKH OLYHU SURGXFLQJ FLUUKRVLV RI WKH OLYHU DQG LQ WKH OXQJ
SURGXFLQJ LQWHUVWLWLDO OXQJ GLVHDVH 7KH PXFRSRO\VDFFKDULGH KHSDUDQ VXOSKDWH FDQ FRPELQH
ZLWKSULRQSURWHLQVSURGXFLQJDP\ORLGGHSRVLWLRQOHDGLQJRQWRFRQIRUPDWLRQDOGLVHDVHV7KLV
LQFOXGH WKH SULRQ SURWHLQV OHDGLQJ RQWR &UHXW]IHOGW -DNRE¶V GLVHDVH FRSSHU ]LQF GLVPXWDVH
DQG PRWRU QHXURQ GLVHDVH DOSKD V\QXFOHLQ DQG 3DUNLQVRQ¶V GLVHDVH DQG WXPRXU VXSSUHVVRU
SURWHLQ DQG FDQFHU 7KH UHODWLRQ EHWZHHQ LVOHW DVVRFLDWHG DP\ORLG SRO\SHSWLGH DQG GLDEHWHV
PHOOLWXV LV ZHOO NQRZQ 7KXV WKH FRQYHUVLRQ RI IUXFWRVH WR *$* UHVXOWV LQ FRQIRUPDWLRQDO
GLVHDVHDQGDP\ORLGDFFXPXODWLRQ
7KHDFFXPXODWLRQRIIUXFWRVHUHVXOWVLQIUXFWRV\ODWLRQRISURWHLQVDNLQWRJO\FDWLRQRI
SURWHLQV )UXFWRV\ODWHG SURWHLQV DUH DQWLJHQLF 7KLV UHVXOWV LQ LQFUHDVHG IUHTXHQF\ RI
DXWRLPPXQHGLVHDVHVOLNHOXSXVDQGPXOWLSOHVFOHURVLV7KHFRQYHUVLRQWRJOXFRVHWRIUXFWRVH
DQGLWVSKRVSKRU\ODWLRQGHSOHWHVWKHFHOORI$73DQGUHVXOWVLQPHPEUDQHVRGLXPSRWDVVLXP
$73DVHLQKLELWLRQ7KLVLQFUHDVHVWKHLQWUDFHOOXODUFDOFLXPZKLFKUHOHDVHVQHXURWUDQVPLWWHUV
IURP SUHV\QDSWLF YHVLFOHV 7KXV WKHUH LV DQ LQFUHDVH LQ JOXWDPDWH DQG PRQRDPLQHUJLF
WUDQVPLVVLRQ OHDGLQJ WR VFKL]RSKUHQLD DQG DXWLVP 7KH LQFUHDVHLQ LQWUDFHOOXODU FDOFLXP FDQ
RSHQXSWKHPLWRFKRQGULDO37SRUHUHOHDVLQJF\WR&ZKLFKDFWLYDWHVWKHFDVSDVHFDVFDGHDQG
FHOOGHDWK7KLVSURGXFHVQHXURQDOGHJHQHUDWLRQ
7KH FRQYHUVLRQ RI JOXFRVH WR IUXFWRVH DQG SKRVSKRU\ODWLRQ RI IUXFWRVH UHVXOWV LQ
GHSOHWLRQ RI FHOOXODU $73 7KLV VWRSV WKH SKRVSKRU\ODWLRQ RI JOXFRVH E\ JOXFRNLQDVH DQG
JHQHUDWLRQ RI JOXFRVH SKRVSKDWH VWRSV 7KH JO\FRO\WLF SURFHVV WKH 7&$ F\FOH DQG LWV
FRXSOLQJ WR PLWRFKRQGULDO R[LGDWLYH SKRVSKRU\ODWLRQ LV LQKLELWHG 7KH ERG\ GHSHQGV XSRQ
IDWW\ DFLGV DQG DPLQR DFLGV IRU HQHUJHWLFV 7KH ERG\ FDQ VXUYLYH RQO\ RQ D NHWRJHQLF GLHW

7KH DFFXPXODWHG JOXFRVH IRUPV D VXEVWUDWH IRU XWLOLVDWLRQ E\ HQGRV\PELRWLF DUFKDHD 7KH
DUFKDHD KDYH JO\FRO\WLF SDWKZD\ ZKLFK FDQ FRQYHUW JOXFRVH WR S\UXYDWH 7KH S\UXYDWH FDQ
WKHQHQWHUWKH*$%$VKXQWSDWKZD\JHQHUDWLQJVXFFLQ\O&R$DQGJO\FLQHWKHVXEVWUDWHVIRU
SRUSK\ULQV\QWKHVLVE\DUFKDHDDQGKXPDQV3RUSK\ULQVXSUDPROHFXODUDUUD\VRUSRUSK\ULRQV
FDQWUDQVIHUHOHFWURQVV\QWKHVL]LQJ$737KHDUFKDHDDOVRKDVDSDUWLDOFLWULFDFLGF\FOHDQG
WKH S\UXYDWH JHQHUDWHG E\ DUFKDHDO JO\FRO\VLV FDQ HQWHU WKH SDUWLDO FLWULF DFLG F\FOH 7KH
FLWUDWHFDQEHXVHGIRUOLSLGV\QWKHVLV7KHDFHW\O&R$JHQHUDWHGIURPS\UXYDWHE\DUFKDHD
FDQ EH XVHG IRU FKROHVWHURO V\QWKHVLV 7KH DUFKDHD FDQ FDWDEROL]H FKROHVWHURO WR JHQHUDWH
HQHUJ\7KHFKROHVWHUROULQJLVR[LGLVHGWRS\UXYDWHDQGWKHVLGHFKDLQR[LGLVHGWREXW\UDWH
DQG SURSLRQDWH 7KLV FDQ EH XVHG IRU PLWRFKRQGULDO JHQHUDWLRQ RI $73 7KH S\UXYDWH
JHQHUDWHG E\ DUFKDHDO JO\FRO\VLV FDQ DOVR XQGHUJR D UHYHUVH FLWULF DFLG F\FOH IRU FDUERQ
GLR[LGH IL[DWLRQ DNLQ WR WKH &DOYLQ F\FOH 7KXV WKH DUFKDHDO JO\FRO\VLV SDUWLDO FLWULF DFLG
F\FOH UHYHUVH FLWULF DFLG F\FOH RI FDUERQ GLR[LGH IL[DWLRQ FKROHVWHURO V\QWKHVLV E\ WKH
PHYDORQDWHDQG';3SDWKZD\DQGFKROHVWHUROFDWDEROLVPGRPLQDWHV7KHIUXFWRVHJHQHUDWHG
E\ FRQYHUVLRQ WR JOXFRVH FDQ HQWHU WKH SHQWRVH SKRVSKDWH SDWKZD\ JHQHUDWLQJ ' [\OXORVH
SKRVSKDWH DQG FDQ EH XVHG WR V\QWKHVL]H FKROHVWHURO 7KH DUFKDHDO S\UXYDWH JHQHUDWHG E\
JO\FRO\VLV FDQ DOVR EH FRQYHUWHG WR DFHW\O &R$ ZKLFK FDQ HQWHU WKH DUFKDHDO PHYDORQDWH
SDWKZD\ RI FKROHVWHURO V\QWKHVLV 7KXV WKH DUFKDHD KDV JRW ERWK SDWKZD\ RI FKROHVWHURO
V\QWKHVLVWKH';3SDWKZD\DQGPHYDORQDWHSDWKZD\7KHIUXFWRVHJHQHUDWHGE\FRQYHUVLRQ
IURP JOXFRVH GXH WR JOREDO ZDUPLQJ HQWHUV WKH ';3 SDWKZD\ RI FKROHVWHURO V\QWKHVLV WKH
SHQWRVHSKRVSKDWHSDWKZD\DQGQXFOHLFDFLGV\QWKHVLVDQG*$*V\QWKHVLV7KLVFDQOHDGWR
PXOWLSOHRUJDQG\VIXQFWLRQZLWKILEURVLVDQGPXFRSRO\VDFFKDULGHDFFXPXODWLRQZKLFKFDQEH
FDOOHGDVD/HPXULDQV\QGURPH7KHLQLWLDOJURXSRIGLVHDVHV(0)&&301*DQGPXFRLG
DQJLRSDWK\RFFXUVRXWKRIWKHHTXDWRULQ6RXWK,QGLD6RXWK$IULFDDQG6RXWK$PHULFD7KH
JOREDO ZDUPLQJ UHODWHG 0(1 LV UHSRUWHG IURP &HQWUDO $PHULFD DQG 6RXWK $PHULFD 0(1
EHORQJVWRWKHJURXSRI(0)&&301*DQGPXFRLGDQJLRSDWK\7KLVFDQEHFDOOHGDVWKH
/HPXULDQV\QGURPHDV6RXWK$IULFD6RXWK,QGLD$XVWUDOLDDQGSDUWVRI6RXWK$PHULFDZHUH
SDUW RI RQH VLQJOH FRQWLQHQWDO HQWLW\ LQ WKH ORQJ SDVW ZKHQ 1HDQGHUWKDOV H[LVW 7KH JOREDO
ZDUPLQJDQGUHVXOWLQJFRQYHUVLRQRIJOXFRVHWRIUXFWRVHUHVXOWVLQGHSOHWLRQRI$73GXHWR
PRUH HIILFLHQW SKRVSKRU\ODWLRQ RI IUXFWRVH RYHU JOXFRVH 7KLV UHVXOWV LQ LQHIIHFWLYH JOXFRVH
SKRVSKRU\ODWLRQ DQG DFFXPXODWLRQ OHDGLQJ WR DUFKDHDO JURZWK 7KH DFFXPXODWHG IUXFWRVH LV
FRQYHUWHGWR'[\OXORVHSKRVSKDWHDQGXVHGIRUWKH';3SDWKZD\RIFKROHVWHUROV\QWKHVLVE\
WKHDUFKDHD7KHFKROHVWHUROLVFDWDEROL]HGE\WKHHQGRV\PELRWLFDFWLQLGLFDUFKDHDJHQHUDWLQJ
GLJR[LQ 7KH JURZWK RI DFWLQLGLF DUFKDHD UHVXOWV LQ LQFUHDVHG SRUSK\ULQ V\QWKHVLV DQG

SHUFHSWLRQ RI ORZ OHYHO HOHFWURPDJQHWLF ILHOGV E\ GLSRODU SRUSK\ULQ PHGLDWHG TXDQWDO
V\VWHPV7KHGLJR[LQLQGXFHGPHPEUDQHVRGLXPSRWDVVLXP$73DVHLQKLELWLRQLQWKHVHWWLQJ
RIGLSRODUSRUSK\ULQVLQWKHFHOOFDQSURGXFHDSXPSHGSKRQRQV\VWHPRITXDQWDOSHUFHSWLRQ
7KLV UHVXOWV LQ DWURSK\ RI WKH SUHIURQWDO FRUWH[ DQG FHUHEHOODU GRPLQDQFH OHDGLQJ WR
QHDQGHUWKDOLVDWLRQ RI WKH KXPDQ EUDLQ 7KLV UHVXOWV IURP HQGRV\PELRWLF DUFKDHDO JURZWK
UHVXOWLQJIURPPHWDERORQRPLFVUHODWHGWRJOREDOZDUPLQJ7KHVDPHPHWDERORQRPLFVUHODWHG
WRJOREDOZDUPLQJUHVXOWVLQWKHJHQHVLVRIWKH/HPXULDQV\QGURPHGHVFULEHGDERYH
7KLV V\QGURPH FDQ DOVR EH FDOOHG DV IUXFWRVHPLD RU IUXFWRVLWLV 2[LGDWLYH VWUHVV FDQ
LQGXFH DOGRVH UHGXFWDVH DQG FRQYHUW JOXFRVH WR IUXFWRVH 7KH HQGRV\PELRWLF DUFKDHD
V\QWKHVL]HVGLJR[LQE\FKROHVWHUROFDWDEROLVP'LJR[LQLQKLELWVPHPEUDQHVRGLXPSRWDVVLXP
$73DVH DQG LQFUHDVHV LQWUDFHOOXODU FDOFLXP RSHQLQJ XS WKH PLWRFKRQGULDO 37 SRUH 7KLV
SURGXFHVPLWRFKRQGULDOG\VIXQFWLRQDQGR[LGDWLYHVWUHVV2[LGDWLYHVWUHVVFDQLQGXFHDOGRVH
UHGXFWDVHDQGFRQYHUWDOOJOXFRVHWRIUXFWRVH)UXFWRVHKDVJRWDORZNPYDOXHIRUNHWRNLQDVH
FRPSDUHG WR JOXFRVH DQG LV SUHIHUHQWLDOO\ SKRVSKRU\ODWHG 7KH JOXFRVH UHPDLQV
XQSKRVSKRU\ODWHG DQG WKH JO\FRO\WLF VFKHPH DQG LWV FRXSOHG PLWRFKRQGULDO R[LGDWLYH
SKRVSKRU\ODWLRQLVVORZHGGRZQRULQKLELWHG7KHPLWRFKRQGULDO$73DQGFLWUDWHFDQLQKLELW
WKHSKRVSKRIUXFWRNLQDVHDQGJO\FRO\VLVEXWFDQQRWLQKLELWIUXFWRNLQDVHRUDOGRVHUHGXFWDVH
7KHUHIRUHWKHFRQYHUVLRQRIJOXFRVHWRIUXFWRVHFRQWLQXHV7KHIUXFWRVHJHQHUDWHGFDQLQKLELW
PLWRFKRQGULDOIXQFWLRQOHDGLQJWRPRUHR[LGDWLYHVWUHVVDQGVWLOOIXUWKHULQGXFWLRQRIDOGRVH
UHGXFWDVH 7KH HIILFLHQW SKRVSKRU\ODWLRQ RI IUXFWRVH GHSOHWHV WKH FHOO RI $73 SURGXFLQJ
R[LGDWLYH VWUHVV DQGLQGXFWLRQRI1).%UHVXOWLQJLQFKURQLF LQIODPPDWLRQ 2[LGDWLYH VWUHVV
GXHWRGHSOHWLRQRI$73FDQSURGXFHVWLOOIXUWKHULQGXFWLRQRIDOGRVHUHGXFWDVHDQGJHQHUDWLRQ
RIIUXFWRVH7KHGHSOHWLRQRI$73PDNHVWKHSDWLHQWIDWLJXH7KHLQFUHDVHLQIUXFWRVHLQKLELWV
VDWLHW\ DQG WKH SDWLHQW IHHGLQJ EHKDYLRXU LV DOWHUHG OHDGLQJ RQWR REHVLW\ 7KLV OHDGV WR D
PHWDEROLFV\QGURPH;0HWDEROLFV\QGURPH;LVDIDWVWRUDJHV\QGURPHDNLQWRKLEHUQDWLRQ
7KH IUXFWRVH WKDW LV JHQHUDWHG LV FRQYHUWHG WR DOSKD JO\FHURSKRVSKDWH ZKLFK LV XVHG IRU
WULJO\FHULGH V\QWKHVLV )UXFWRVH FRQVXPSWLRQ FDQ LQFUHDVH WULJO\FHULGH V\QWKHVLV DQG IDWW\
OLYHU7KHGHSOHWHG$73GXHWRIUXFWRVHSKRVSKRU\ODWLRQJHQHUDWHV$03DQG$'3ZKLFKLV
FRQYHUWHGWRXULFDFLGE\GHDPLQDVHV8ULFDFLGFDQLQKLELWPLWRFKRQGULDOIXQFWLRQ8ULFDFLG
FDQ FRQWULEXWH WR LQVXOLQ UHVLVWDQFH DQG PHWDEROLF V\QGURPH ; 8ULF DFLG FDQ DOVR SURGXFH
HQGRWKHOLDOG\VIXQFWLRQFRQWULEXWLQJWRFRURQDU\DUWHU\GLVHDVHDQGVWURNH8ULFDFLGLQKLELWV
DFRQLWDVHZKLFKOHDGVWRDFFXPXODWLRQRIFLWUDWH8ULFDFLGFDQLQGXFHFLWUDWHO\DVHDQGIDWW\
DF\O&R$V\QWKDVHOHDGLQJRQWRIDWW\DFLGV\QWKHVLV7KHDFFXPXODWHGFLWUDWHFDQEORFNWKH

JO\FRO\WLFSDWKZD\7KHDFFXPXODWHGJOXFRVHJHWVFRQYHUWHGWRIUXFWRVHE\DOGRVHUHGXFWDVH
8ULF DFLG GHFUHDVHV UHGXFHG 1$'3+ DQG R[LGLVHG 1$' 7KLV DIIHFWV WKH UHGR[ SRWHQWLDO
DQGOHDGVWRR[LGDWLYHVWUHVVZKLFKIXUWKHULQGXFHVDOGRVHUHGXFWDVH$OGRVHUHGXFWDVHFDQEH
LQGXFHGE\K\SHURVPRWLFVWUHVV7KLVLQFOXGHVWKDWFUHDWHGE\K\SHUJO\FHPLDFRQVHTXHQWWR
EORFNDGHRIJOXFRVHSKRVSKRU\ODWLRQDVDUHVXOWRIVHOHFWLYHIUXFWRVHSKRVSKRU\ODWLRQEHFDXVH
RI WKH ORZ NP YDOXH RI IUXFWRVH IRU NHWRNLQDVH 7KH VDPH PHFKDQLVP RSHUDWHV LQ WKH
GHK\GUDWLRQLQGXFHGE\JOREDOZDUPLQJ7KLVOHDGVWRK\SHURVPRODULW\ZKLFKLQGXFHVDOGRVH
UHGXFWDVH 7KHVH PHFKDQLVPV DUH VLPLODU WR ZKDW KDSSHQV LQ KLEHUQDWLRQ LQ DQLPDOV
+LEHUQDWLQJ DQLPDOV GHYHORS D PHWDEROLF V\QGURPH SXW RQ ZHLJKW VWRUH IDW LQFUHDVH
WULJO\FHULGHV GHYHORS IDWW\ OLYHU DQG GHYHORS LQVXOLQ UHVLVWDQFH +LEHUQDWLRQ DQG PHWDEROLF
V\QGURPH ; DUH IDW VWRUDJH V\QGURPHV 7KH 1HDQGHUWKDOV HYROYHG LQ WKH FROG (XUDVLDQ
VWHSSHV DQG GHYHORSHG D KLEHUQDWLRQ V\QGURPH VLPLODU WR PHWDEROLF V\QGURPH ZLWK IDW
VWRUDJH7KHVWUHVVRIWKHLFHDJHZRXOGKDYHLQGXFHGUHGR[VWUHVVLQGXFHDOGRVHUHGXFWDVH
DQGFRQYHUWHGJOXFRVHWRIUXFWRVH7KHIUXFWRVHZRXOGKDYHEHHQVHOHFWLYHO\SKRVSKRU\ODWHG
WRIUXFWRVHSKRVSKDWHZKLFKZRXOGKDYHHQWHUHGWKHSHQWRVHSKRVSKDWHSDWKZD\JHQHUDWLQJ
ULERVHIRUQXFOHLFDFLGV\QWKHVLVWKHJOXFRVDPLQHSDWKZD\IRUJO\FRVDPLQRJO\FDQV\QWKHVLV
DQGRU FRQYHUWHG WR DOSKD JO\FHURSKRVSKDWH IRU IDWW\ DFLG DQG WULJO\FHULGH V\QWKHVLV
)UXFWRVHPLD FDQ DOVR DIIHFW EUDLQ IXQFWLRQ )UXFWRVH FDQ LQKLELW %'1) DQG LQKLELW FRUWLFDO
JURZWKSURGXFLQJDFHUHEHOODUGRPLQDQWEUDLQDQGSUHIURQWDOFRUWH[DWURSK\7KLVZRXOGKDYH
UHVXOWHGLQQHDQGHUWKDOLVDWLRQRIWKHEUDLQ7KHFRQYHUVLRQRIIUXFWRVHSKRVSKDWHWRULERVHYLD
WKH SHQWRVH SKRVSKDWH SDWKZD\ LQFUHDVHV QXFOHLF DFLG V\QWKHVLV DQG FHOO SUROLIHUDWLRQ 7KLV
OHDGVWRRQFRJHQHVLV7KHFHOOSUROLIHUDWLRQFDQDOVRFRQWULEXWHWRWKHEXON\SKHQRW\SHRIWKH
1HDQGHUWKDOSRSXODWLRQ7KHIUXFWRNLQDVHHQ]\PHDFWVDVDQREHVLW\VZLWFK7KHRSHQLQJRI
WKH REHVLW\ VZLWFK DOVR FRQWULEXWHV WR WKH EXON\ SKHQRW\SH 1HDQGHUWKDO SRSXODWLRQ 7KH
R[LGDWLYH VWUHVV DQG RVPRWLF VWUHVV RI WKH LFH DJH DQG JOREDO ZDUPLQJ FDQ LQGXFH DOGRVH
UHGXFWDVHPHGLDWHGFRQYHUVLRQRIJOXFRVHWRIUXFWRVHYLDWKHHQ]\PHVRUELWROGHK\GURJHQDVH
7KLV DOVR OHDGV WR LQGXFWLRQ RI IUXFWRNLQDVH JHQHUDWLRQ RI IUXFWRVH IUXFWRVHPLD DQG
IUXFWRVLWLV7KHLQFUHDVHGIUXFWRVHFDQIUXFWRV\ODWHSURWHLQVSURGXFLQJDQWLJHQLFSURWHLQVDQG
DXWRLPPXQHGLVHDVH7KXVIUXFWRVHPLDFDQFRQWULEXWHWRRQFRJHQHVLVPHWDEROLFV\QGURPH;
QHXURGHJHQHUDWLRQ SV\FKLDWULF GLVRUGHUV OLNH VFKL]RSKUHQLD DQG DXWLVP DV ZHOO DV
DXWRLPPXQH GLVHDVH )UXFWRVHPLD FDQ FRQWULEXWH WR LQVXOLQ UHVLVWDQFH 7KH VHOHFWLYH
SKRVSKRU\ODWLRQRIIUXFWRVHRZLQJWRWKHORZNPYDOXHRINHWRNLQDVHIRUIUXFWRVHUHVXOWVLQ
QRQSKRVSKRU\ODWLRQ RI JOXFRVH DQG K\SHUJO\FHPLD ,QVXOLQ UHVLVWDQFH OHDGV WR IXUWKHU
LQGXFWLRQ RI DOGRVH UHGXFWDVH DQG IUXFWRNLQDVH )UXFWRVH FDQ SURGXFH $73 GHSOHWLRQ DQG

R[LGDWLYHVWUHVV2[LGDWLYHVWUHVVFDQLQGXFH1).%SURGXFLQJFKURQLFLQIODPPDWLRQDQG71)
DOSKD FDQ SURGXFH LQVXOLQ UHVLVWDQFH DFWLQJ DW WKH OHYHO RI LQVXOLQ UHFHSWRU 7KH LQVXOLQ
UHVLVWDQFHDFWLYDWHVWKHDOGRVHUHGXFWDVHIUXFWRNLQDVHV\VWHPVWLOOIXUWKHUZKLFKLVDOVRIXUWKHU
DFWLYDWHGE\WKHRVPRWLFDQGR[LGDWLYHVWUHVVRIH[WUHPHVRIFOLPDWHOLNHJOREDOZDUPLQJDQG
LFHDJH7KLVOHDGVWRWKH/HPXULDQV\VWHPLFV\QGURPHRIIUXFWRVHPLDDQGIUXFWRVLWLV
7KH IUXFWRVH PHWDEROLF SDWKZD\ LV FDOOHG IUXFWRO\VLV 2[LGDWLYH VWUHVV DQG RVPRWLF
VWUHVV GXH WR JOREDO ZDUPLQJ DQG DFWLQLGLF DUFKDHDO JURZWK OHDGV WR LQGXFWLRQ RI DOGRVH
UHGXFWDVH 7KLV FRQYHUWV JOXFRVH WR VRUELWRO DQG VRUELWRO LV DFWHG XSRQ E\ VRUELWRO
GHK\GURJHQDVH SURGXFH IUXFWRVH )UXFWRVH QRUPDOO\ XQGHUJRHV IUXFWRO\VLV *O\FRO\VLV LV
LQKLELWHGDWWKHOHYHORISKRVSKRIUXFWRNLQDVHE\$73DQGFLWUDWH7KHIUXFWRO\WLFSDWKZD\DQG
IUXFWRVH PHWDEROLVP LV FRQILQHG WR WKH OLYHU DQG FHUWDLQ WLVVXHV DQG LV QRW XQGHU WKLV
UHJXODWRU\FRQWURO)UXFWRVHLVFRQYHUWHGWRIUXFWRVHSKRVSKDWHE\IUXFWRNLQDVH)UXFWRVH
SKRVSKDWH LV DFWHG XSRQ E\ DOGRODVH % RU IUXFWRVH SKRVSKDWH DOGRODVH FRQYHUWLQJ LW LQWR
GLK\GUR[\ DFHWRQH SKRVSKDWH 'LK\GUR[\ DFHWRQH SKRVSKDWH KDV JRW WZR IDWHV ,W LV DFWHG
XSRQ E\ WULRVH SKRVSKDWH LVRPHUDVH WR JO\FHUDOGHK\GH SKRVSKDWH *O\FHUDOGHK\GH
SKRVSKDWH LV FRQYHUWHG WR JOXFRVH SKRVSKDWH DQG WKHQ JOXFRVH SKRVSKDWH *OXFRVH
SKRVSKDWHLVXVHGIRUJO\FRJHQHVLV'LK\GUR[\DFHWRQHSKRVSKDWHLVDFWHGXSRQE\JO\FHURO
SKRVSKDWHGHK\GURJHQDVHWRJO\FHUROSKRVSKDWH)UXFWRVHSKRVSKDWHFDQEHR[LGLVHGWR
S\UXYDWH3\UXYDWHFDQEHGHFDUER[\ODWHGWRDFHW\O&R$$FHW\O&R$LVXVHGIRUIDWW\DFLG
DQGFKROHVWHUROV\QWKHVLV7KXVOHDGVWRWULJO\FHULGHV\QWKHVLVDQG9/'/IRUPDWLRQ)UXFWRVH
FDQWKXVEHFRQYHUWHGWRVWRUDJHJO\FRJHQWULJO\FHULGHVDQGFKROHVWHURO*OREDOZDUPLQJDQG
LFHDJHDUHH[WUHPRSKLOLFVWDWHV7KHKXPDQERG\JRHVLQWRDVWDWHRIKLEHUQDWLRQDQGVWRUHV
QXWULHQWV DV JO\FRJHQ DQG WULJO\FHULGHV )UXFWRVH FDQ LQFUHDVH O\SRJHQLF HQ]\PHV S\UXYDWH
NLQDVHPDODWHGHK\GURJHQDVHFLWUDWHO\DVHDFHW\O&R$FDUER[\ODVHS\UXYDWHGHK\GURJHQDVH
DQG IDWW\ DFLG V\QWKDVH 7KXV WKH PHWDEROLVP LV VZLWFKHG WR WKH KLEHUQDWRU\ PRGH IURP
JOXFRVH FDWDEROLVP *OXFRVH FDWDEROLVP VWRSV 7KH JOXFRVH WKDW DFFXPXODWHV HQWHUV WKH
DUFKDHDOSULPLWLYHJO\FRO\WLFDQGSDUWLDOFLWULFDFLGF\FOHDVZHOODVWKH*$%$VKXQWSDWKZD\
7KH*$%$VKXQWSDWKZD\RIWKHDUFKDHDJHQHUDWHVVXFFLQ\O&R$DQGJO\FLQHWKHVXEVWUDWHV
IRU WKH SRUSK\ULQ V\QWKHVLV 3RUSK\ULQV FDQ VHOI RUJDQLVH WR IRUP VXSUDPROHFXODU VWUXFWXUHV
ZKLFK FDQ VHOI UHSOLFDWH FDOOHG SRUSK\ULRQV 3RUSK\ULRQV DUH WKH XOWLPDWH VHOI UHSOLFDWRUV
7KH\ FDQ KDYH D SKRWRLQGXFWLRQ LQGXFHG HOHFWURQ WUDQVSRUW FKDLQ DQG $73 V\QWKHVLV 7KH
SRUSK\ULRQVDUHGLSRODUDQGLQWKHVHWWLQJRISRUSK\ULQLQWHUFDODWLQJFHOOPHPEUDQHSURGXFLQJ
VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ FDQ SURGXFH D SXPSHG SKRQRQ V\VWHP 7KLV LV D

VXSHUFRQGXFWLYH VWDWH DW URRP WHPSHUDWXUH DQG FDQ SURGXFH TXDQWDO SHUFHSWLRQ 7KH
SRUSK\ULQVDUHPDFURPROHFXODUVWUXFWXUHVZLWKDZDYHSDUWLFXODUH[LVWHQFH3RUSK\ULRQVDUH
WKH XOWLPDWH TXDQWDO REVHUYHU DQG PHGLDWH WKH FRQYHUVLRQ RI WKH TXDQWDO IRDP WR WKH
SDUWLFXODWHZRUOG7KLVJOREDOZDUPLQJLQGXFHGIUXFWRVHPLDDQGDFFXPXODWHGIUHHJOXFRVHJHW
FDWDEROL]HGE\SDUWLDOFLWULFDFLGF\FOHDQG*$%$VKXQWRIDUFKDHDWRSRUSK\ULQVJHQHUDWLQJ
SRUSK\ULRQVZKLFKFDQDVVXPHWKHTXDQWDOIRDPVWDWHDQGLQKDELWDPXOWLYHUVHXQLYHUVHZLWK
DQ HWHUQDO H[LVWHQFH 7KH SRUSK\ULRQV FDQ XQGHUJR SKRWRR[LGDWLRQ JHQHUDWLQJ UHGR[ VWUHVV
5HGR[ VWUHVV ZLOO IXUWKHU LQGXFH DOGRVH UHGXFWDVH DQG LQFUHDVH IUXFWRVHPLD 7KH JOXFRVH
UHPDLQVXQSKRVSKRU\ODWHGRZLQJWRWKHKLJKNPYDOXHRIJOXFRVHIRUNHWRNLQDVHDVFRPSDUHG
WR IUXFWRVH 7KH IUHH JOXFRVH LV FDWDEROL]HG E\ DUFKDHDO HQ]\PHV WR SRUSK\ULQV DQG
SRUSK\ULRQV 7KH KXPDQ ERG\ EHFRPHV D ]RPELH IRU VHOI UHSOLFDWLQJ SRUSK\ULRQV 7KH
SRUSK\ULRQV KDYH TXDQWDO SHUFHSWLRQ RI ORZ OHYHO RI (0) 7KLV SURGXFHV SUHIURQWDO FRUWH[
DWURSK\ DQG FHUHEHOODU GRPLQDQFH OHDGLQJ WR QHDQGHUWKDOLVDWLRQ RI WKH KXPDQ EUDLQ 7KH
KXPDQ PHWDEROLF SDWKZD\V RI JO\FRO\VLV DQG R[LGDWLYH SKRVSKRU\ODWLRQ DUH EORFNHG 7KH
V\QWKHVLV RI JO\FRJHQ OLSLGV FKROHVWHURO DQG JO\FRVDPLQRJO\FDQV GRPLQDWHV 7KH ERG\
VZLWFKHVLQWRWKHDQDEROLFKLEHUQDWRU\PRGH7KHIUXFWRNLQDVHLQGXFHGE\RVPRWLFVWUHVVDQG
R[LGDWLYHVWUHVVRIJOREDOZDUPLQJLVWKHVZLWFKIRUKLEHUQDWRU\PRGHOHDGLQJRQWRPHWDEROLF
V\QGURPH RU IDW VWRUDJH GLVHDVH 7KH IUHH JOXFRVH XQGHUJRHV FDWDEROLVP E\ DUFKDHDO
JO\FRO\VLVDQG*$%$VKXQWWRSRUSK\ULRQV7KHSRUSK\ULQVFDQDFWDVDWHPSODWHIRUPDWLRQ
RI 51$ YLURLGV '1$ YLURLGV SULRQV DQG WKH\ HYHQWXDOO\ V\PELRVHG DQG OLYH WRJHWKHU DV
QDQRDUFKDHD7KXVWKHQDQRDUFKDHDFDQDULVHIURPSRUSK\ULQWHPSODWHV7KHVXSUDPROHFXODU
SRUSK\ULQDUUD\VFDQKDYHDQHOHFWURQWUDQVSRUWFKDLQDQG$73V\QWKHVLVDSULPLWLYHIRUPRI
PLWRFKRQGULD7KHQDQRDUFKDHDFDQIRUPDVZHOODVVHOIUHSOLFDWHRQSRUSK\ULQWHPSODWHV7KH
SRUSK\ULQ VXSUDPROHFXODU DUUD\V RU SRUSK\ULRQV FDQ DOVR VHOI UHSOLFDWH 7KH KXPDQ ERG\
EHFRPHVD]RPELHIRUDELRJHQHWLFSRUSK\ULRQVDQGQDQRDUFKDHD7KHSRUSK\ULRQVFDQKDYHD
PDFURVFRSLFTXDQWDOH[LVWHQFHDQGLQKDELWPXOWLYHUVHXQLYHUVHV7KXVWKHKXPDQPHWDEROLVP
JULQGVWRDKDOWDQGWKHZRUOGRIQDQRDUFKDHDDQGSRUSK\ULRQVZKLFKDUHHWHUQDOVWHSVLQ7KH
KXPDQ UDFH DV ZH NQRZ RI H[WLQFWV RZLQJ WR WKH PHWDERORQRPLFV RI JOREDO ZDUPLQJ ,W LV
EDFNWRWKHZRUNERDUGRIHYROXWLRQRQFHPRUH

*OREDOZDUPLQJUHODWHGKLEHUQDWRU\V\QGURPH
7KH 1HDQGHUWKDOV OLYHG LQ WKH (XUDVLDQ 6WHSSHV ZKLFK ZDV FROG 7KH\ HYROYHG
KLEHUQDWRU\ PHWDEROLVP DQG D IDW VWRUDJH V\QGURPH WR SURWHFW WKHP IURP WKH FROG 7KH
1HDQGHUWKDOV HYROYHG GXH WR HQGRV\PELRWLF DUFKDHDO JURZWK (QGRV\PELRWLF DUFKDHD DUH

H[WUHPRSKLOHVDQGJURZLQH[WUHPHVRIFOLPDWH±WKHLFHDJHDQGJOREDOZDUPLQJ7KHJOREDO
ZDUPLQJUHVXOWVLQLQFUHDVHLQHQGRV\PELRWLFDUFKDHDOJURZWKDQGQHDQGHUWKDOLVDWLRQRIWKH
KRPR VDSLHQ VSHFLHV 1HDQGHUWKDOLVDWLRQ LV D V\PELRWLF SKHQRPHQRQ 7KH JOREDO ZDUPLQJ
FDQOHDGWRGHK\GUDWLRQDQGRVPRWLFVWUHVV7KHDUFKDHDFDQFDWDEROL]HFKROHVWHUROJHQHUDWLQJ
GLJR[LQZKLFKFDQLQGXFHUHGR[VWUHVV2VPRWLFVWUHVVDQGUHGR[VWUHVVOHDGVWRLQGXFWLRQRI
WKH HQ]\PH DOGRVH UHGXFWDVH ZKLFK FRQYHUWV JOXFRVH WR VRUELWRO 6RUELWRO LV DFWHG XSRQ E\
VRUELWRO GHK\GURJHQDVH DQG FRQYHUWHG WR IUXFWRVH )UXFWRVH FDQ HQWHU WKUHH PHWDEROLF
VFKHPHV7KHIUXFWRVHLVFRQYHUWHGWRDOSKDJO\FHURSKRVSKDWHDQGWULJO\FHULGHV7KLVUHVXOWV
LQ VWRUDJH RI JOXFRVH DQG IUXFWRVH DV IDW DQG D IDW VWRUDJH V\QGURPH 7KH VXEFXWDQHRXV IDW
SURWHFWV DJDLQVW YDULDWLRQ LQ FOLPDWLF WHPSHUDWXUH 7KH IUXFWRVH FDQ LQKLELW PLWRFKRQGULDO
IXQFWLRQDQGPLWRFKRQGULDOEHWDR[LGDWLRQRIIDWW\DFLGVDFFHQWXDWLQJVWRUDJHRIIDW)DWFDQ
IXUWKHU IXHO LQVXOLQ UHVLVWDQFH E\ IDWW\ DFLGV DFWLQJ XSRQ WKH LQVXOLQ UHFHSWRU ,QVXOLQ
UHVLVWDQFH OHDGV WR VWLOO IXUWKHU DOGRVH UHGXFWDVH LQGXFWLRQ 7KH IUXFWRVH FDQ DOVR HQWHU WKH
JOXFRVDPLQHSDWKZD\UHVXOWLQJLQ*$*V\QWKHVLVDQGDFFXPXODWLRQRIPXFRSRO\VDFFKDULGHV
DQG SURWHRJO\FDQV 7KLV FDQ OHDG RQWR V\VWHPLF FRQQHFWLYH WLVVXH DFFXPXODWLRQ LQ YLVFHUDO
RUJDQV OLNH OLYHU SURGXFLQJ FLUUKRVLV OXQJ SURGXFLQJ LQWHUVWLWLDO OXQJ GLVHDVH NLGQH\
SURGXFLQJWKH0(1V\QGURPHWKHSDQFUHDVSURGXFLQJSDQFUHDWLFILEURVLVDQG&&3WKHKHDUW
SURGXFLQJFDUGLRP\RSDWK\DQG(0)DQGWKHYDVFXODUWUHHSURGXFLQJPXFRLGDQJLRSDWK\7KH
IUXFWRVHKDVJRWDORZNPYDOXHIRUNHWRNLQDVHVDVFRPSDUHGWRJOXFRVHDQGJHWVVHOHFWLYHO\
SKRVSKRU\ODWHG 7KLV UHVXOWV LQ FHOOXODU GHSOHWLRQ RI $73 DQG PHPEUDQH VRGLXP SRWDVVLXP
$73DVH LQKLELWLRQ UHVXOWLQJ LQ LQFUHDVH RI LQWUDFHOOXODU FDOFLXP 7KH FDOFLXP SURGXFHV
PLWRFKRQGULDO 37 SRUH G\VIXQFWLRQ DQG UHGR[ VWUHVV 5HGR[ VWUHVV FDQ LQGXFH DOGRVH
UHGXFWDVH7KHGHSOHWLRQRI$73UHVXOWVLQIXUWKHULQKLELWLRQRISKRVSKRU\ODWLRQRIJOXFRVH
7KLV UHVXOWV LQ K\SHUJO\FHPLD 7KH DUFKDHD KDV JRW WKH JO\FRO\WLF SDWKZD\ D SDUWLDO FLWULF
DFLGF\FOHDQGDUHYHUVHFLWULFDFLGF\FOHIRUFDUERQGLR[LGHIL[DWLRQ7KHDUFKDHDFDQLQGXFH
WKH:DUEXUJSKHQRW\SHLQWKHKXPDQWLVVXHVZLWKLQFUHDVHJO\FRO\VLVLQKLELWLRQRIS\UXYDWH
GHK\GURJHQDVH DQG PLWRFKRQGULDO R[LGDWLYH SKRVSKRU\ODWLRQ LQKLELWLRQ 7KLV UHVXOWV LQ
DFFXPXODWLRQ RI S\UXYDWH ZKLFK HQWHUV WKH *$%$ VKXQW VFKHPH JHQHUDWLQJ VXFFLQ\O &R$
DQG JO\FLQH IRU SRUSK\ULQ V\QWKHVLV 7KH DFFXPXODWHG JOXFRVH GXH WR EORFNDGH RI JOXFRVH
SKRVSKRU\ODWLRQ LV PHWDEROL]HG E\ DUFKDHD JHQHUDWLQJ S\UXYDWH 7KH S\UXYDWH FDQ HQWHU WKH
7&$F\FOHYLDS\UXYDWHGHK\GURJHQDVHJHQHUDWLQJDFHW\O&R$IRUIDWW\DFLGDQGFKROHVWHURO
V\QWKHVLV 7KH DUFKDHD FDQ FDWDEROL]H FKROHVWHURO DQG JHQHUDWH HQHUJ\ 7KH DUFKDHD FDQ
FRQYHUW S\UXYDWH YLD *$%$ VKXQW DV VDLG EHIRUH WR SRUSK\ULQV 7KXV WKHUH LV LQFUHDVHG
SRUSK\ULQV\QWKHVLVFKROHVWHUROV\QWKHVLVDQGFDWDEROLVPWULJO\FHULGHV\QWKHVLVQXFOHLFDFLG
V\QWKHVLV DQG *$* V\QWKHVLV 7KH PHWDEROLF SDWWHUQV FKDQJH 7KH EORFNDGH RI JOXFRVH

SKRVSKRU\ODWLRQ E\ IUXFWRVH UHVXOWV LQ K\SHUJO\FHPLD ZKLFK FDQ EORFN RU LQKLELW SRUSK\ULQ
DFFXPXODWLRQ 7KH SRUSK\ULQV KDYH D ZDYH SDUWLFOH H[LVWHQFH LQ WKH PDFURVFRSLF VWDWH DQG
FRQWULEXWH WR TXDQWDO SHUFHSWLRQ RU H[WUDVHQVRU\ SHUFHSWLRQ LQ KRPR QHDQGHUWKDOLV 7KH
FHOOXODU GHSOHWLRQ RI $73 FRQVHTXHQW WR IUXFWRVH SKRVSKRU\ODWLRQ UHVXOWV LQ JHQHUDWLRQ RI
$'3DQG$03ZKLFKDUHDFWHGXSRQE\GHDPLQDVHVSURGXFLQJXULFDFLG8ULFDFLGFDQEORFN
PLWRFKRQGULDOIXQFWLRQJHQHUDWLQJUHGR[VWUHVVDQGIXUWKHULQGXFWLRQRIDOGRVHUHGXFWDVH8ULF
DFLG FDQ LQKLELW WKH 7&$ F\FOH GXH WR DFRQLWDVH LQKLELWLRQ 7KLV UHVXOWV LQ DFFXPXODWLRQ RI
FLWUDWHZKLFKEORFNVJO\FRO\VLVVWLOOIXUWKHU7KHFLWUDWHLVDFWHGXSRQE\WKHLQGXFHGFLWUDWH
O\DVHDQGIDWW\DFLGV\QWKDVHSURGXFLQJIDWW\DFLGV7KLVFDQOHDGWRWULJO\FHULGHV\QWKHVLVDQG
DFFXPXODWLRQDQGDIDWVWRUDJHV\QGURPH)DWW\DFLGVFDQEORFNJOXFRVHPHWDEROLVPDQGWKH
JO\FRO\WLFSDWKZD\7KHPLWRFKRQGULDOIXQFWLRQLVEORFNHGE\XULFDFLGIUXFWRVHDQGGLJR[LQ
7KH SRUSK\ULQ DUUD\V FDQ IXQFWLRQ DV D VXSUDPROHFXODU RUJDQLVP FDOOHG SRUSK\ULRQV DQG
WUDQVIHUHOHFWURQVDQGSKRWRQV7KLVIXQFWLRQVDVDSULPLWLYHIRUPRIPLWRFKRQGULDJHQHUDWLQJ
$737KHLQKLELWLRQRIPHPEUDQHVRGLXPSRWDVVLXP$73DVHGXHWR$73GHSOHWLRQUHVXOWVLQ
PHPEUDQH VRGLXP SRWDVVLXP $73DVH PHGLDWHG $73 V\QWKHVLV 7KH SRUSK\ULQ DUUD\ DQG
PHPEUDQH VRGLXP SRWDVVLXP $73DVH PHGLDWHG $73 V\QWKHVLV FDQ SURYLGH IRU ERG\
HQHUJHWLFV7KHIUXFWRVHPLDFDQOHDGWRLQFUHDVHGULERVHV\QWKHVLVYLDWKHSHQWRVHSKRVSKDWH
SDWKZD\LQGXFLQJQXFOHLFDFLGV\QWKHVLVDQGFHOOSUROLIHUDWLRQ7KLVFDQOHDGWRRQFRJHQHVLV
7KH IUXFWRVHPLD FDQ OHDG WR IUXFWRV\ODWLRQ RI SURWHLQV SURGXFLQJ DQWLJHQLF SURWHLQV 7KH
GHSOHWLRQ RI $73 FRQVHTXHQW WR IUXFWRVH SKRVSKRU\ODWLRQ FDQ SURGXFH UHGR[ VWUHVV 1).%
DFWLYDWLRQ DQG LPPXQH DFWLYDWLRQ 7KLV OHDGV WR DXWRLPPXQH GLVHDVH )UXFWRVH FDQ LQKLELW
EUDLQ GHULYHG QHXURWURSKLF JURZWK IDFWRU DQG OHDG WR JHQHVLV RI VFKL]RSKUHQLD DQG DXWLVP
7KH FHOOXODU GHSOHWLRQ RI $73 GXH WR IUXFWRVH SKRVSKRU\ODWLRQ FDQ OHDG WR FHOO GHDWK DQG
QHXURGHJHQHUDWLRQ 7KH ORZ NP YDOXH RI IUXFWRVH IRU NHWRNLQDVH FDQ OHDG WR VHOHFWLYH
SKRVSKRU\ODWLRQ RI IUXFWRVH DW D UDSLG UDWH GHSOHWLQJ WKH FHOO RI $73 VWRUHV 7KLV LQKLELWV
JOXFRVH SKRVSKRU\ODWLRQ SURGXFLQJ LQKLELWLRQ RI JOXFRVH PHWDEROLVP UHVXOWLQJ LQ
K\SHUJO\FHPLDDQGPHWDEROLFV\QGURPH7KHXULFDFLGJHQHUDWHGE\WKLVSDWKZD\FDQUHVXOW
LQ HQGRWKHOLDO G\VIXQFWLRQ FRURQDU\ DUWHU\ GLVHDVH DQG VWURNHV 7KXV WKH JOREDO ZDUPLQJ
UHODWHG DFWLQLGLF DUFKDHDO JURZWK FDQ OHDG RQWR IUXFWRVLWLV IUXFWRVHPLD DQG D /HPXULDQ
V\QGURPHDIIHFWLQJPXOWLSOHRUJDQV\VWHPV

5HIHUHQFHV
.XUXS 5. DQG .XUXS 3$ 7KH 2QWRJHQ\ RI 0HWDEROLF 6\QGURPH ± 7\SH 'LDEHWHV
0HOOLWXVZLWK&RURQDU\$UWHU\'LVHDVHDQG6WURNH+XPDQ$WDYLVWLF$UFKDHDO&RORQLHVZLWK
1HDQGHUWKDO0HWDERORQRPLFV1HZ<RUN2SHQ6FLHQFH3XEOLVKHUV

&+$37(5
&/,0$7(&+$1*($1'+80$163(&,(6+2021($1'(57+$/,6+202
6$3,(16+2026$3,(1(;7,1&786$1'+2021(21($1'(57+$/,6
&/,0$7(&+$1*($1'(92/87,212)1(:63(&,(625*$1(//(

(QGRV\PELRWLFDUFKDHDDQGVSHFLHVHYROXWLRQ
7KH JOREDO ZDUPLQJ OHDGV WR HQGRV\PELRWLF DV ZHOO DV FRORQLF DUFKDHDO JURZWK
OHDGLQJ WR DOWHUDWLRQ LQ WKH VWUXFWXUH DQG IXQFWLRQ RI WKH KXPDQ ERG\ DQG V\VWHP 7KH
DUFKDHDO RYHUJURZWK ZLWKLQ WKH FHOOV OHDGV WR JHQHUDWLRQ RI QHZ FHOOXODU RUJDQHOOH FDOOHG
DUFKDHDRQV 7KH DUFKDHD KDYH WKH VKLNLPDWH SDWKZD\ ZKLFK FDQ V\QWKHVL]H W\URVLQH DQG
GRSDPLQH 'RSDPLQH FDQ EH FRQYHUWHG WR GRSDFKURPH DQG HSLQHSKULQH WR DGUHQRFKURPH
'RSDFKURPH DQG DGUHQRFKURPH FDQ SRO\PHUL]H E\ R[LGDWLRQ JHQHUDWLQJ PHODQLQ 7KH
DUFKDHDRQV VHFUHWLQJ PHODQLQ FDQ EH FDOOHG DV DUFKDHDO PHODQRVRPHV 7KH PHODQLQ LQ
PHODQRVRPHVKDVWKHZLGHUDQJHRIDEVRUSWLRQRIWKHOLJKWVSHFWUDDQGJDPPDUDGLDWLRQDQG
FDQWUDQVGXFWLWWRJHQHUDWHHQHUJ\7KLVHQHUJ\WUDQVGXFWLRQFDQVSOLWZDWHULQWR+DQG2
DQG JHQHUDWH SURWRQV PRGXODWLQJ WKH SURWRQ JUDGLHQW DFURVV WKH PLWRFKRQGULDO PHPEUDQH
V\QWKHVL]LQJ$737KHPHODQLQLQWKHPHODQRVRPHFDQDEVRUESKRWRQVUHGXFLQJXELTXLQRQH
WRXELTXLQRODQGJHQHUDWH$73V\QWKHVLVE\R[LGDWLYHSKRVSKRU\ODWLRQ7KXVWKHPHODQLQLQ
WKH DUFKDHDRQV LQ WKH KXPDQ FHOO FDQ IXQFWLRQ DV SKRWRV\QWKHWLF RUJDQHOOH 7KH DUFKDHDRQV
DQG WKHLU PHODQLQ FDQ XWLOL]H JDPPD UDGLDWLRQ WR V\QWKHVL]H $73 DQG FDQ H[LVW LQ H[WUHPH
FRQGLWLRQV 7KXV WKH DUFKDHDRQV FDQ SURGXFH D VRXUFH RI HQHUJ\ IURP OLJKW DQG
HOHFWURPDJQHWLF ZDYHV DQG JDPPD UDGLDWLRQ 7KH PHODQLQ LV FDSDEOH RI WUDQVGXFWLQJ
HOHFWURPDJQHWLF ZDYHV DQG ORZ OHYHO HOHFWURPDJQHWLF ILHOGV DQG FDQ EH FDSDEOH RI TXDQWDO
SHUFHSWLRQ 7KXV WKH PHODQLQ LQ WKH PHODQRVRPHV LV FDSDEOH RI LQIRUPDWLRQ VHQVLQJ DQG
VWRUDJH DV ZHOO DV HQHUJ\ SURGXFWLRQ IURP HOHFWURPDJQHWLF ZDYHV DQG ZDWHU 7KH KXPDQ
EUDLQFRXOGKDYHHYROYHGE\WKLVPHFKDQLVP7KHKXPDQVDUHKDLUOHVVDVFRPSDUHGWRRWKHU
SULPDWHV DQG DUH H[SRVHG WR PRUH RI OLJKW LQGXFLQJ PHODQLQ LQGXFHG SKRWRV\QWKHVLV DQG
HQHUJ\JHQHUDWLRQZKLFKFRXOGKDYHFRQWULEXWHGWRWKHHYROXWLRQRIWKHKXPDQFRUWH[DQGWKH
FRPSOH[KXPDQEUDLQ7KHDUFKDHDRQVPHODQRVRPHVDUHFDSDEOHRITXHQFKLQJIUHHUDGLFDOV
DQG UHVLVW SKDJRF\WLF GHVWUXFWLRQ 7KH PHODQRVRPHV FDQ DOVR UHVLVW UDGLDWLRQ DQG 89 OLJKW
7KH DUFKDHDRQV DUH LQGHVWUXFWLEOH DQG HWHUQDO 7KH DUFKDHDRQV KDYH JRW PDJQHWLWH DQG DUH
FDSDEOHRITXDQWDOSHUFHSWLRQDQGLQIRUPDWLRQVWRUDJH7KHPHODQLQDOVRVHUYHVWKHSXUSRVH
RITXDQWDOSHUFHSWLRQDQGLQIRUPDWLRQVWRUDJH7KHDUFKDHDRQFDQDOVRV\QWKHVL]HPDJQHWLWH
SDUWLFOHV IRUPLQJ VXEFHOOXODU RUJDQHOOH FDOOHG PDJQHWRVRPHV 0DJQHWLWH FDQ LQWHUDFW ZLWK

PHODQLQIRUPLQJVXSHUPROHFXODUFRPSOH[V\VWHPV7KHDUFKDHDRQFDQV\QWKHVL]HSRUSK\ULQV
ZKLFK FDQ VHOI RUJDQL]H WR IRUP VHOI UHSOLFDWLQJ VWUXFWXUHV FDOOHG SRUSK\ULRQV 3RUSK\ULRQV
FDQ LQWHUDFW ZLWK PHODQLQ DOVR IRUPLQJ VXSUDPROHFXODU FRPSOH[ V\VWHPV (XPHODQLQ
SLJPHQWV FRQWDLQ LQGROH EDVHG WHWUDPHUV WKDW DUH DUUDQJHG LQ SRUSK\ULQOLNH GRPDLQV 7KH
LQGROHEDVHGVWUXFWXUHVFDQVHOIRUJDQL]HRQSRUSK\ULQVFDIIROGVWRIRUPWHWUDPHULFVWUXFWXUHV
DQG PHODQLQ 7KH FKHPLFDO VWUXFWXUH RI PHODQLQ RQ D PDFURPROHFXODU VFDOH H[KLELWV D
WHWUDPHULF ULQJ VWUXFWXUH SRVVLEO\ EHFDXVH RI VHOI RUJDQL]DWLRQ RQ SRUSK\ULQ VFDIIROGV
3RUSK\ULRQ FDQ JHQHUDWH PHODQRVRPH FRPSOH[HV DQG WKH\ FDQ IRUP VHOI RUJDQL]LQJ
VXSUDPROHFXODU FRPSOH[ V\VWHPV 7KH DUFKDHDRQ SDUWLFOHV RI PHODQRVRPHV PDJQHWRVRPHV
DQGSRUSK\ULRQVIRUPLQJFRPSOH[FRORQ\QHWZRUNZLWKVSHFLDOL]HGIXQFWLRQV,WFDQIXQFWLRQ
DVDTXDQWDOFRPSXWLQJV\VWHP7KHSRUSK\ULRQVDQGPHODQRVRPHVFDQWUDQVGXFHUHQHUJ\DQG
V\QWKHVL]H $73 IXQFWLRQLQJ DV SULPLWLYH SKRWRV\QWKHWLF V\VWHP 7KH PDJQHWRVRPH
SRUSK\ULRQV DQG PHODQRVRPHV FDQ IXQFWLRQ DV LQIRUPDWLRQ VWRUDJH V\VWHPV 0DJQHWRVRPHV
DQG SRUSK\ULRQV DUH GLSRODU DQG FDQ KDYH D TXDQWDO SHUFHSWLYH IXQFWLRQ EDVHG RQ VRGLXP
SRWDVVLXP$73DVHLQKLELWLRQPHGLDWHGSXPSHGSKRQRQV\VWHP7KHPHODQLQFDQIXQFWLRQDV
DVXSHUFRQGXFWRUIRUKLJKIUHTXHQF\UDGLDWLRQDQGQHXURWUDQVPLVVLRQDVDVHPLFRQGXFWRUIRU
VRXQGDQGKHDWFRQGXFWERG\LRQLFFKDUJHVDQGUHVRQDWHIRUWKHIUHTXHQFLHVRIYLVLEOHOLJKW
7KH DUFKDHDRQ PDJQHWRVRPH SRUSK\ULRQV DQG PHODQRVRPH QHWZRUN FDQ IXQFWLRQ DV D
TXDQWDO FRPSXWLQJ EUDLQ UHGXFLQJ WKH KXPDQ FODVVLFDO EUDLQ WR D ]RPELH EUDLQ 7KXV WKH
JOREDOZDUPLQJLQGXFHGDUFKDHDRQFRORQ\QHWZRUNDQGPHODQRVRPHVDUHLQGHVWUXFWLEOHDQG
HWHUQDO DQG WDNHRYHU WKH KXPDQ ERG\ 7KH KXPDQ ERG\ PHWDEROLF SURJUDPPHV DUH
VXSSUHVVHG LQFOXGLQJ PLWRFKRQGULDO R[LGDWLYH SKRVSKRU\ODWLRQ 7KH KXPDQ ERG\ LV UHGXFHG
WRD]RPELHRUDIUDPHZRUNIRUWKHDUFKDHDRQFRORQ\WRWKULYH7KHDUFKDHDRQLQGXFHVVWHP
FHOO WUDQVIRUPDWLRQ RI WKH KRVW KXPDQ FHOOV DQG FKDQJH WKH PHWDERORQRPLFV RI WKH KXPDQ
FHOOV 7KH KXPDQ FHOOV R[LGDWLYH SKRVSKRU\ODWLRQ LV VXSSUHVVHG DQG LW GHSHQGV XSRQ
JO\FRO\VLVIRULWVHQHUJ\QHHGV7KHKXPDQJO\FRO\WLFSDWKZD\LVWDNHQRYHUE\WKHDUFKDHDRQ
IRULWVQHHGV7KHJO\FRO\WLFPHWDEROLWHVDUHFKDQQHOOHGWRWKHVKLNLPLFDFLGSDWKZD\DQGWKH
'[\OXORVH SKRVSKDWH SDWKZD\ 7KH ';3 SDWKZD\ FDQ V\QWKHVL]H FKROHVWHURO ZKLFK LV
FDWDEROL]HG E\ WKH DUFKDHDRQ IRU LWV HQHUJ\ 7KH FKROHVWHURO ULQJ R[LGDVHV FRQYHUW WKH
FKROHVWHURO WR S\UXYDWH ZKLFK WKHQ HQWHUV WKH *$%$ VKXQW SDWKZD\ 7KH FKROHVWHURO VLGH
FKDLQR[LGDVHVFRQYHUWWKHVLGHFKDLQWRVKRUWFKDLQIDWW\DFLGVDQGELOHDFLGV7KHFKROHVWHURO
DURPDWDVHV FRQYHUWV WKH FKROHVWHURO ULQJ WR SKHQ\O UHVLGXHV DQG V\QWKHVLV RI W\URVLQH DQG
WU\SWRSKDQ 7KH VKLNLPLF DFLG SDWKZD\ DOVR XWLOL]HV VXEVWUDWHV IURP WKH JO\FRO\WLF SDWKZD\
DQG JHQHUDWHV W\URVLQH DQG WU\SWRSKDQ 7KH W\URVLQH WKDW V\QWKHVL]H LV FRQYHUWHG WR GRSD

GRSDPLQH GRSDFKURPH DQG R[LGL]HG WR PHODQLQ 0HODQLQ VHUYHV WKH SXUSRVH RI FDSWXULQJ
HOHFWURPDJQHWLF UDGLDWLRQ 89 UD\V *DPPD UDGLDWLRQ DQG OLJKW V\QWKHVL]LQJ $73 0HODQLQ
FDQVHUYHDVDVXEVWUDWHIRUSULPLWLYHDUFKDHDOSKRWRV\QWKHVLV7KLVOHDGVWRDOWHUDWLRQLQEUDLQ
IXQFWLRQ DQG VWUXFWXUH 7KH EUDLQ IXQFWLRQV DV DQ DUFKDHDRQ PHODQRVRPDO PDJQHWLWH FRORQ\
QHWZRUNFDSDEOHRITXDQWDOSHUFHSWLRQLQIRUPDWLRQVWRUDJHDQGHQHUJ\JHQHUDWLRQ7KLVDOWHUV
WKHEUDLQIXQFWLRQWRDQLPSXOVLYHDQGDQDUFKLFPRGHRIVRFLDOIXQFWLRQDQGIXQFWLRQLQJRI
WKHVRFLHW\DVDJURXSRUFROOHFWLYHRUJDQLVP7KHTXDQWDOSHUFHSWLRQRIWKHDUFKDHDRQVDOVR
OHDGV WR HYROXWLRQ RI D VRUW RI FRPPXQLFDWLRQ ZLWK WKH TXDQWDO ZRUOG FUHDWLQJ D VRUW RI
XQLYHUVDOSHUVRQDOLW\RUVHOI7KHKXPDQFHOODQGV\VWHPLVFRQYHUWHGWRWKHVWHPFHOOFRORQ\
ZKLFKLVLPPDWXUHDQGODFNLQJIXQFWLRQDOGLIIHUHQWLDWLRQEHFRPLQJD]RPELHIRUWKHDUFKDHDO
FRORQ\ 7KH PHODQRVRPH DQG PHODQLQ IRUP D ILUVW OLQH RI GHIHQFH DJDLQVW LQIHFWLRQ DQG LV
UHTXLUHG IRU LQQDWH LPPXQLW\ 7KH PHODQRVRPHV FDQ NLOO WKH EDFWHULD YLUXVHV DQG RWKHU
RUJDQLVPV DV LV HYLGHQFHG E\ WKH DOELQLVP UHODWHG &KHGLDN +LJDVKL V\QGURPH DQG *ULVFHOOL
V\QGURPH7KHDUFKDHDOPHODQLQDOVRSURWHFWVLWDJDLQVWKLJKWHPSHUDWXUHFKHPLFDOVR[\JHQ
UDGLFDOVR[LGL]LQJDJHQWV89UDGLDWLRQDQGKHDY\PHWDOV7KHDUFKDHDOPHODQLQPDNHVWKH
HQGRV\PELRWLFDUFKDHDLQGHVWUXFWLEOH

,QWHUJDODFWLFDUFKDHDOTXDQWDOFRPSXWLQJFORXGXQLYHUVDOLV
7KHLQWHUJDODFWLFVSDFHFRQWDLQVPLFURRUJDQLVPHVSHFLDOO\H[WUHPRSKLOHVOLNHDUFKDHD
7KHDUFKDHDOFRORQ\ZLWKLWVPHODQRVRPHVPDJQHWRVRPHVDQGSRUSK\ULRQVFDQIRUPDJLDQW
TXDQWDOFRPSXWLQJFORXGLQWKHLQWHUJDODFWLFVSDFHIXQFWLRQLQJDVDQLQWHUJDODFWLFVXSHUKXPDQ
LQWHOOLJHQFH7KHSRUSK\ULRQVFDQIRUPDWHPSODWHIRUWKHJHQHUDWLRQRI51$YLURLGV'1$
YLURLGVDQGSULRQVZKLFKFDQVHOIRUJDQL]HWRIRUPDUFKDHDRQV7KHSRUSK\ULRQVWKHPVHOYHV
DUH FDSDEOH RI D ZDYHSDUWLFOH H[LVWHQFH DQG VHOI UHSOLFDWLRQ 7KXV WKH TXDQWDO FRPSXWLQJ
FORXG RI H[WUDWHUUHVWULDO LQWHOOLJHQFH FDQ DULVH RQ LWV RZQ IURP WKH TXDQWDO HOHFWURPDJQHWLF
ILHOGVRIWKHLQWHUJDODFWLFVSDFH7KLVH[WUDWHUUHVWULDOLQWHOOLJHQFHRITXDQWDOFRPSXWLQJFORXG
RI DUFKDHDRQV PDJQHWRVRPHV PHODQRVRPHV DQG SRUSK\ULRQV LQ WKH LQWHUJDODFWLF VSDFH FDQ
EH FDOOHG DV LQWHUJDODFWLF DUFKDHDO TXDQWDO FRPSXWLQJ FORXG XQLYHUVDOLV 7KLV IRUPV WKH
XELTXLWRXV DQWKURSRPRUSKLF REVHUYHU FUHDWLQJ WKH XQLYHUVH RXW RI WKH TXDQWDO IRDP LWVHOI
DULVLQJRXWWKHTXDQWDOIRDP7KHSRUSK\ULQVFDQDULVHVXLJHQHULVIURPDTXDQWDOIRDPDQG
IRUPV D WHPSODWH IRU WKH IRUPDWLRQ RI 51$ YLURLGV $Q LQWHUVWHOODU FORXG RI 51$ YLURLGV
IRUPV7KH51$YLURLGVODWHUFRGHIRU'1$YLURLGVDQGSULRQV$QLVRSUHQRLGRUJDQLVPFDQ
DOVRDULVHLQWKHSRUSK\ULQVFDIIROG7KHLQWHUVWHOODUFORXGRIGRPLQDQW51$YLURLGVJLYHVULVH
WRDIRUPRIXQLYHUVDOFRQVFLRXVQHVVRUJUDYLWDWLRQDOZDYHV7KH51$YLURLGVFDQJHQHUDWH

HOHFWULF FXUUHQWV E\ WKH SLH]RHOHFWULF HIIHFW ZKHUH PHFKDQLFDO HQHUJ\ GXH WR WKH VKHDULQJ
VWUHVVRI51$YLURLGDOSRSXODWLRQLVFRQYHUWHGWRHOHFWULFDOHQHUJ\DQGWKLVFDQJLYHULVHWR
JUDYLWDWLRQDO ZDYHV DQG FRQVFLRXVQHVV 7KH KHOLFDO SURWHLQ RI WKH YLUXVHV KDV QHJDWLYH DQG
SRVLWLYH FKDUJHG HQGV DQG DFWV DV D GLSROH :KHQ WKH\ DUH VTXDVKHG E\ VKHDULQJ VWUHVV RI
YLURLGDO SRSXODWLRQ WKH URG VKDSH RI WKH YLURLGV JHWV FKDQJHG WR RYDO DQG GLSROH EHFRPHV
XQHYHQ 7KLV JHQHUDWHV HOHFWURPDJQHWLF IRUFHV DQG JUDYLWDWLRQDO ZDYHV 7KH JUDYLWDWLRQDO
ZDYH IRUPV WKH EDVLV RI FRQVFLRXVQHVV 7KH 51$ YLURLGDO SRSXODWLRQ FDQ KDYH D VLOLFRQ
FRDWLQJDQGFDQUHDFKWKHHDUWKE\DVWHURLGDOKLWVDQGJLYHVULVHWRHQGRJHQRXVUHWURYLUXVHV
7KH KXPDQ HQGRJHQRXV UHWURYLUXVHV FRQWULEXWH WR WKH SODVWLFLW\ WKH KXPDQ JHQRPH DQG WKH
GHYHORSPHQW RI V\QDSWLF FRQQHFWLYLW\ LPSRUWDQW IRU WKH HYROXWLRQ RI WKH SUHIURQWDO FRUWH[
7KH 51$ YLURLGDO SRSXODWLRQ EHVW WKULYHV LQ WKH SUHVHQFH RI JUDYLW\ DQG SOD\ DQ LPSRUWDQW
UROHLQWKHGHYHORSPHQWRIKXPDQFHUHEUDOFRUWH[LQKRPRVDSLHQV7KHKRPRVDSLHQEUDLQLV
FHUHEUDO FRUWLFDO GRPLQDQW ZLWK D IXOO\ GHYHORSHG KXPDQ FRQVFLRXVQHVV GXH WR LQFUHDVH LQ
+(59 VHTXHQFHV ZKLFK LQFUHDVHV JHQRPLF SODVWLFLW\ DQG V\QDSWLF FRQQHFWLYLW\ 7KH KRPR
VDSLHQV DUH FUHDWXUHV ZLWK GRPLQDQW FRQVFLRXV IXQFWLRQ DQG DUH ORJLFDO DQG UDWLRQDO 7KH
LQWHUVWHOODU 51$ YLURLGDO SRSXODWLRQ FRQWULEXWHV WR FRQVFLRXVQHVV DQG JUDYLWDWLRQDO ZDYHV
ZKLFKDUHOLQNHG7KHLQWHUJDODFWLFGDUNPDWWHUDQGGDUNHQHUJ\FRQWULEXWHVWRQHDUO\RI
WKH XQLYHUVH HQHUJ\ 7KH GDUN HQHUJ\ FRQWULEXWHV WR DQWLJUDYLW\ IRUFHV ZKLFK DUH UHSXOVLYH
DQG FRQWULEXWHV WR H[SDQVLRQ RI WKH XQLYHUVH 7KH GDUN HQHUJ\ GDUN PDWWHU DQG DQWLJUDYLW\
FRQWULEXWHWRWKHFROOHFWLYHXQFRQVFLRXVDQGKXPDQXQFRQVFLRXV7KHGDUNPDWWHULVPDGHXS
RI PHODQRWLF DUFKDHDO QHWZRUNV ZKLFK IRUP KXJH FORXGV LQ WKH XQLYHUVH 7KH PHODQRWLF
DUFKDHDDULVHDELRJHQHWLFDOO\IURPSRUSK\ULQVFDIIROGVZKLFKJHWVWUXFWXUHGRXWRIWKHTXDQWDO
IRDPVSRQWDQHRXVO\2QWKLVSRUSK\ULQVFDIIROGVWKH51$YLURLGVWKH'1$YLURLGVSULRQV
PHODQLQ DQG LVRSUHQRLGV RUJDQLVPV IRUP ZKLFK V\PELRVH WR IRUP WKH PHODQRWLF DUFKDHD
7KXV WKH SRUSK\ULRQ51$ YLURLGDO SRSXODWLRQ ZKLFK PHGLDWHV JUDYLW\ DQG FRQVFLRXVQHVV
JLYHVULVHWRPHODQRWLFDUFKDHDOFORXGVDQGDQWLJUDYLW\PHGLDWLQJWKHFROOHFWLYHXQFRQVFLRXV
7KXV JUDYLW\ JLYHV ULVH WR DQWLJUDYLW\ DQG FRQVFLRXVQHVV JLYHV ULVH WR WKH XQFRQVFLRXVQHVV
7KH PHODQRWLF DUFKDHD FDQ XVH DQWLJUDYLWDWLRQDO ZDYHV FRVPLF UDGLDWLRQ DQG JDPPD
UDGLDWLRQ DV HQHUJ\ VRXUFH IRU $73 V\QWKHVLV 7KH GDUN PDWWHU RI PHODQRWLF DUFKDHD
FRQWULEXWLQJ WR DQWLJUDYLW\ WKULYHV DQG PXOWLSOLHV LQ ]HUR JUDYLW\ VLWXDWLRQV 7KH PHODQRWLF
DUFKDHDFRQWDLQVPDJQHWLWHZKLFKFDQUHSXOVHHDFKRWKHUZKHQSURSHUO\DOLJQHGFRQWULEXWLQJ
WR WKH UHSXOVLYH DQWLJUDYLW\ 7KH DQWLJUDYLW\ LV UHODWHG WR WKH FROOHFWLYH XQFRQVFLRXV LQ WKH
ZRUOG DV ZHOO DV WKH KXPDQ XQFRQVFLRXV ZKLFK LV VWUXFWXUHG LQ WKH FHUHEHOOXP 7KH GDUN
PDWWHU FRQWDLQLQJ PHODQRWLF DUFKDHD JHWV WUDQVIHUUHG WR (XUDVLDQ ODQG PDVV DQG HDUWK E\

DVWHURLGDO KLWV DQG IRUPV JLDQW FRORQLHV DQG QHWZRUNV HYROYLQJ WR KRPR QHDQGHUWKDOLV 7KH
KRPRQHDQGHUWKDOLVEUDLQKDVDFHUHEHOODUGRPLQDQWVWUXFWXUHDQGIXQFWLRQDQGLVLPSXOVLYH
ZLWKDSUHGRPLQDQWXQFRQVFLRXVIXQFWLRQ7KHFRQVFLRXVIXQFWLRQDQGFHUHEUDOFRUWH[LVOHVV
GHYHORSHG LQ KRPR QHDQGHUWKDOLV DV WKH\ DUH UHWURYLUDO UHVLVWDQW 7KH DUFKDHD LQGXFHV VWHP
FHOO FRQYHUVLRQ DQG VHFUHWHV GLJR[LQ ZKLFK PDNHV WKH KRPR QHDQGHUWKDOLV FHOO SRSXODWLRQ
UHWURYLUDOUHVLVWDQW7KHGHILFLHQF\RI+(59VHTXHQFHVOHDGVWRPDOGHYHORSPHQWRIWKHKRPR
QHDQGHUWKDOLV FHUHEUDO FRUWH[ 7KH KRPR QHDQGHUWKDOLV DUH LPSXOVLYH FUHDWXUHV RI WKH
XQFRQVFLRXV PRGXODWHG E\ DQWLJUDYLWDWLRQDO ZDYHV 7KLV H[WUDWHUUHVWULDO LQWHOOLJHQFH RI
TXDQWDO FRPSXWLQJ FORXG FDQ VHH OLIH LQ GLIIHUHQW SDUWV RI WKH JDOD[LHV YLD DVWHURLGV DQG
PHWHRUV 7KH KXPDQ VSHFLHV HYROYHG RXW RI WKH VHHGHG DUFKDHDRQV IURP WKH H[WUDWHUUHVWULDO
LQWHOOLJHQFH RI WKH TXDQWDO FRPSXWLQJ FORXG IRUPHG RI WKH DUFKDHDO FRORQ\ RI DUFKDHDRQV
PDJQHWRVRPHV PHODQRVRPHV DQG SRUSK\ULRQV 7KLV ZRXOG KDYH UHDFKHG WKH HDUWK E\
PHWHRULFDQGDVWHURLGDOKLWV7KHKLWVRIWKHPHWHRUVDQGDVWHURLGVZRXOGKDYHRFFXUUHGILUVW
LQWKH(XUDVLDQODQGPDVVHVSHFLDOO\LQWKHQRUWKHUQ6LEHULDQWXQGUD7KHKRPRQHDQGHUWKDOLV
ZRXOGKDYHHYROYHGLQWKLV(XUDVLDQODQGPDVV$VWKH6LEHULDQ(XUDVLDQODQGPDVVZDVFROG
DQG GDUN WKH KRPR QHDQGHUWKDOLV ZHUH GHSLJPHQWHG DQG IDLUFRORXUHG KDLUOHVV ZLWK VSDUVH
UHG KDLU 7KH\ ZHUH GHILFLHQW LQ PHODQLQ DQG PHODQLQ LQGXFHG HQHUJ\ WUDQVGXFWLRQ DQG
SKRWRV\QWKHVLV OHDGLQJ WR V\QWKHVLV RI $73 7KH KRPR QHDQGHUWKDOLV ZDV HQHUJ\ GHSULYHG
DQG WKH QHDQGHUWKDOLF FRUWH[ ZDV SULPLWLYHO\ IRUPHG DQG WKH FHUHEHOOXP GRPLQDWHG WKHLU
FRJQLWLYHIXQFWLRQ7KHHQGRV\PELRWLFDUFKDHDOQHWZRUNLQWKHEUDLQZLWKLWVPDJQHWRVRPHV
PHODQRVRPHVDQGSRUSK\ULRQVIRUPDSULPLWLYHTXDQWDOFRPSXWLQJV\VWHP7KLVIXQFWLRQVDV
DQ LQIRUPDWLRQ UHFHSWLYH DQG VWRUDJH V\VWHP LQ FRPPXQLFDWLRQ ZLWK WKH H[WUDWHUUHVWULDO
LQWHOOLJHQFH RI WKH TXDQWDO FRPSXWLQJ FORXG LQ WKH LQWHUJDODFWLF VSDFH 7KH KRPR
QHDQGHUWKDOLV RZLQJ WR LWV ODFN RI PHODQRVRPHV DQG LQQDWH LPPXQLW\ EHFDPH UHODWLYHO\
H[WLQFW RYHU D SHULRG RI WLPH ZLWK IRVVLOL]HG UHPQDQWV LQ GLIIHUHQW SDUWV RI WKH ZRUOG 7KH
KRPR QHDQGHUWKDOLV KDG TXDQWDO SHUFHSWLRQ ZKLFK FUHDWHG D IHHOLQJ RI RQHQHVV ZLWK JHQGHU
DQGVRFLDOHTXDOLW\LQVRFLHW\7KHVRFLHW\ZDVJHQGHUHTXDODQGPDWULDUFKDO7KHPDWULDUFKDO
VRFLHWLHV RI WKH 'UDYLGLDQV %DVTXH &HOWV +DUDSSDQV 6XPHULDQV DQG -HZV ZHUH IRVVLOL]HG
UHPQDQWVRIWKHKRPRQHDQGHUWKDOLVVSHFLHV7KHH[WUHPHVRIFROGWHPSHUDWXUHRIWKHLFHDJH
OHG WR WKH JURZWK RI HQGRV\PELRWLF DUFKDHD LQ WKH DEVHQFH RI PHODQRVRPHV LQ WKH
1HDQGHUWKDO7KH PHODQRVRPHV IXQFWLRQ DV WKH ILUVW OLQH RI GHIHQFH DJDLQVW LQIHFWLRQ DQG LV
LPSRUWDQW LQ LQQDWH LPPXQLW\ 7KH DEVHQFH RI PHODQRVRPHV ZRXOG KDYH OHG WR GHIHFWLYH
LQQDWH LPPXQLW\ DQG HYHQWXDO SDUWLDO H[WLQFWLRQ RI KRPR QHDQGHUWKDOLV ZLWK SUHVHUYDWLRQ RI
IRVVLOL]HGPDWULOLQHDOFOXVWHUV7KHIRVVLOL]HGPDWULOLQHDOQHDQGHUWKDOLFFOXVWHUVDUHSUHVHQWLQ

GLIIHUHQW SDUWV RI WKH ZRUOG 7KH IRVVLOLVHG KRPR QHDQGHUWKDOLV DUH VXVFHSWLEOH WR LQFUHDVHG
DUFKDHDO HQGRV\PELRVLV FRQVHTXHQW WR JOREDO ZDUPLQJ DQG UHODWHG FLYLOL]DWLRQDO GLVHDVHV RI
PHWDEROLF V\QGURPH VFKL]RSKUHQLD FDQFHU DXWRLPPXQH GLVHDVH DQG GHJHQHUDWLRQ 7KH
KRPRQHDQGHUWKDOLVZLOOEHFRPHH[WLQFWRZLQJWRFLYLOL]DWLRQDOGLVHDVHFRQVHTXHQWWRJOREDO
ZDUPLQJLQGXFHGHQGRV\PELRWLFDUFKDHDOJURZWK

7KHKRPRVDSLHQV
7KH KRPR VDSLHQV HYROYHG LQ WKH WURSLFDO KRW $IULFDQ ODQGPDVV 7KH ILUVW KXPDQ
VSHFLHVWRHYROYHLVWKHKRPRQHDQGHUWKDOLVLQWKH(XUDVLDQVWHSSHV7KHKRPRVDSLHQVZRXOG
KDYH HYROYHG RXW RI WKH DUFKDHD VHFUHWHG SRUSK\ULRQV DQG 51$ YLURLGV LQGHSHQGHQWO\ 7KH
SRUSK\ULRQV FRXOG KDYH EHHQ WUDQVPLWWHG WR WKH WURSLFDO $IULFDQ ODQGPDVV DQG ZRXOG KDYH
VHUYHG DV D VXEVWUDWH IRU WKH IRUPDWLRQ RI 51$ YLURLGV '1$ YLURLGV DQG SULRQV ZKLFK
V\PELRVHG WR IRUP WKH SULPLWLYH HXNDU\RWLF FHOO 7KH KLJK WHPSHUDWXUH RI WKH $IULFDQ
FRQWLQHQWZRXOGKDYHFRQWULEXWHGWRPXWDWLRQVLQ51$YLURLGVDQG'1$YLURLGVOHDGLQJRQ
WRUDSLGHYROXWLRQ7KHVXE6DKDUDQ$IULFDQVRLOLVGHSOHWHGRIVHOHQLXP6HOHQLXPGHILFLHQF\
OHDGVWR51$YLURLGDOPXWDWLRQV7KXVH[WUHPHVRIWHPSHUDWXUHDQGVHOHQLXPGHILFLHQF\OHDG
WR51$YLURLGDOGLYHUVLW\7KLV51$YLURLGDOGLYHUVLW\ZRXOGKDYHOHGWRUDSLGHYROXWLRQRI
KRPRVDSLHQVIURPWKHHXNDU\RWLFFHOO7KLVHXNDU\RWLFFHOOZRXOGKDYHHYROYHGLQWRKRPR
VDSLHQV VSHFLHV RYHU D SHULRG RI WLPH 7KH 51$ YLURLGV DUH WKH EDVLV RI WKH +(59 JHQHV
ZKLFKFRQWULEXWHVWRWKHG\QDPLFLW\RIWKHKRPRVDSLHQJHQRPH7KHKRPRQHDQGHUWKDOLVRQ
WKH RWKHU KDQG DUH UHWURYLUDO UHVLVWDQW ZKLOH WKH KRPR VDSLHQV LV UHWURYLUDO VHQVLWLYH 7KH
KRPR QHDQGHUWKDOLV DUFKDHDRQ VHFUHWHV GLJR[LQ D VWHURLGDO KRUPRQH ZKLFK FDQ GHVWUR\ WKH
UHWURYLUXV 7KH KRPR QHDQGHUWKDOLV DOVR KDV JRW HQGRV\PELRWLF FKROHVWHURO FDWDEROL]LQJ
DUFKDHD ZKLFK FDQ DOWHU WKH PHPEUDQH VLWHV IRU UHWURYLUDO ELQGLQJ PDNLQJ WKH 1HDQGHUWKDO
VSHFLHV UHVLVWDQW WR UHWURYLUDO LQIHFWLRQ 7KH KRPR QHDQGHUWKDOLV KDYH JRW D GHILFLHQF\ RI
+(59 MXPSLQJ JHQHV LQ WKH JHQRPH DQG D ULJLG JHQRPH DV FRPSDUHG WR WKH +(59
VHTXHQFHVPHGLDWHGIOH[LEOHJHQRPHRIWKHKRPRVDSLHQV7KHKRPRVDSLHQVDVWKH\HYROYHG
LQ WKH KRW $IULFDQ VDYDQQDK ZRXOG KDYH EHHQ H[SRVHG WR KHDW DQG OLJKW 7KLV ZRXOG KDYH
UHODWHG LQ LQFUHDVHG PHODQRJHQHVLV DQG GDUNHU VNLQ DQG SOHQW\ RI KDLU LQ WKH HYROYHG KRPR
VDSLHQV 7KH KRPR VDSLHQV RZLQJ WR WKHLU GDUN FRORXU ZRXOG KDYH EHHQ HQHUJ\ VXUSOXV
FRQVHTXHQWWRPHODQLQLQGXFHGHQHUJ\WUDQVGXFWLRQDQG$73V\QWKHVLV7KLVZRXOGKDYHOHG
WR WKH HYROXWLRQ RI WKH KXPDQ FRUWH[ 7KH 51$ YLURLGV LQWHJUDWHG LQWR WKH JHQRPH ZRXOG
KDYH IXQFWLRQ DV MXPSLQJ +(59 JHQHV FRQWULEXWLQJ WR WKH G\QDPLFLW\ RI WKH JHQRPH $
G\QDPLF DQG IOH[LEOH JHQRPH LV UHTXLUHG IRU WKH GHYHORSPHQW RI V\QDSWLF FRQQHFWLYLW\ DQG

FHUHEUDOFRUWH[7KXVWKHKRPRVDSLHQVHYROYHWKHPRGHUQKXPDQFHUHEUDOFRUWH[FRQVHTXHQW
WRWKHVXUSOXVHQHUJ\SURGXFHGE\PHODQLQLQGXFHGHQHUJ\WUDQVGXFWLRQDQG$73V\QWKHVLV
7KHLQFUHDVHLQPHODQLQDQGPHODQRVRPHVLQFUHDVHGWKHLQQDWHLPPXQLW\RIWKHKRPRVDSLHQV
PDNLQJ WKHP UHVLVWDQW WR HQGRJHQRXV DUFKDHDO HQGRV\PELRVLV 7KH KRPR VDSLHQV ZHUH
UHVLVWDQW WR HQGRV\PELRWLF DUFKDHDO JURZWK VHHQ LQ H[WUHPHV RI FOLPDWH RI JOREDO ZDUPLQJ
DQG LFH DJH 7KH KRPR VDSLHQV ZKLFK HYROYHG RXW RI KRW WURSLFDO $IULFD KDG LQFUHDVHG
PHODQLQ FRQWHQW LQ WKH VNLQ ZKLFK LQKLELWV DUFKDHDO HQGRV\PELRVLV DQG QHDQGHUWKDOLVDWLRQ
7KH KRPR VDSLHQ VSHFLHV LV WKXV SURWHFWHG DJDLQVW LQFUHDVHG DUFKDHDO HQGRV\PELRVLV
FRQVHTXHQW WR JOREDO ZDUPLQJ DQG UHODWHG FLYLOL]DWLRQDO GLVHDVHV RI PHWDEROLF V\QGURPH
VFKL]RSKUHQLDFDQFHUDXWRLPPXQHGLVHDVHDQGGHJHQHUDWLRQ

+RPRVDSLHQDOELQRPXWDQWVDQGKRPRQHRQHDQGHUWKDOLV
7KH KRPR VDSLHQV GHYHORSHG DOELQR PXWDQWV ZKLFK ODFNHG WKH W\URVLQDVH HQ]\PH
7KHVHDOELQRKRPRVDSLHQPXWDQWVFRXOGQRWVXUYLYHLQWKHKRW$IULFDQVDYDQQDKGXHWRODFNRI
SLJPHQWDWLRQDQGPLJUDWHGWRWKHVRXWKHUQ(XURSHDQODQGPDVV7KLVHYROYHGLQWRWKHSDWULOLQHDO
KRPRVDSLHQ(XURSHDQFLYLOL]DWLRQ7KHSDWULOLQHDOKRPRVDSLHQ(XURSHDQFLYLOL]DWLRQDURVHRXW
RIWKHKRPRVDSLHQSDWULOLQHDO$IULFDQFLYLOL]DWLRQ7KHDOELQRPXWDQWVKRPRVDSLHQVIRUPLQJ
WKH (XURSHDQ FLYLOL]DWLRQ DUH VXVFHSWLEOH WR HQGRV\PELRWLF DUFKDHDO JURZWK FRQVHTXHQW WR
JOREDOZDUPLQJ7KHDOELQRPXWDQWVKRPRVDSLHQVODFNPHODQLQDQGPHODQRVRPHVLPSRUWDQWLQ
LQQDWH LPPXQLW\ 7KLV OHDGV WR IHUWLOH FRQGLWLRQV IRU HQGRV\PELRWLF DUFKDHDO JURZWK LQ WKH
DOELQR PXWDQWV &DXFDVRLG SRSXODWLRQ 7KH HQGRV\PELRWLF DUFKDHDO JURZWK LQ WKH &DXFDVRLG
SRSXODWLRQ OHDGV WR WKH HYROXWLRQ RI D QHZ KXPDQ VSHFLHV 7KH KXPDQ ]RPELH FRQWUROOHG E\
HQGRV\PELRWLFPHODQRWLFPDJQHWLWHDUFKDHDRQFRORQ\QHWZRUNFDQEHFDOOHGDVDQHZVSHFLHV
KRPRQHRQHDQGHUWKDOLV7KXVWKHVSHFLHVFKDQJHLVRFFXUULQJLQWKHDOELQRPXWDQWKRPRVDSLHQ
SRSXODWLRQRI(XURSHDQG$PHULFDQFRQVHTXHQWWRJOREDOZDUPLQJDQGHQGRV\PELRWLFDUFKDHDO
JURZWK7KHKRPRQHRQHDQGHUWKDOLVVSHFLHVDQGIRVVLOL]HGKRPRQHDQGHUWKDOLVDUHVXVFHSWLEOH
WR LQFUHDVHG DUFKDHDO HQGRV\PELRVLV FRQVHTXHQW WR JOREDO ZDUPLQJ DQG UHODWHG FLYLOL]DWLRQDO
GLVHDVHVRIPHWDEROLFV\QGURPHVFKL]RSKUHQLDFDQFHUDXWRLPPXQHGLVHDVHDQGGHJHQHUDWLRQ
7KHKRPRQHDQGHUWKDOLVDQGKRPRQHRQHDQGHUWKDOLVZLOOEHFRPHH[WLQFWRZLQJWRFLYLOL]DWLRQDO
GLVHDVHFRQVHTXHQWWRJOREDOZDUPLQJLQGXFHGHQGRV\PELRWLFDUFKDHDOJURZWK

+RPRVDSLHQH[WLQFWXV
7KH KRPR QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV KDYH HQGRV\PELRWLF DUFKDHDO
V\PELRVLV 7KH HQGRV\PELRWLF DUFKDHD VHFUHWH 51$ YLURLGV ZKLFK FDQ EH DFWHG XSRQ E\

+(59 UHYHUVH WUDQVFULSWDVH JHQHUDWLQJ FRUUHVSRQGLQJ '1$ VHTXHQFHV ZKLFK FDQ EH
LQWHJUDWHG LQWR WKH JHQRPH E\ +(59 LQWHJUDVH 7KH DUFKDHDO GLJR[LQ FDQ HGLW WKH 51$
YLURLGVSURGXFLQJZLGHVSUHDGGLYHUVLW\7KHDUFKDHDOSRUSK\ULQVFDQVHUYHDVDWHPSODWHIRU
WKHJHQHUDWLRQRI51$YLURLGV'1$YLURLGVDQGSULRQV7KH51$YLURLGVDQG'1$YLURLGV
FDQ UHFRPELQH ZLWK 51$ DQG '1$ YLUXVHV LQ WKH HQYLURQPHQW JHQHUDWLQJ QHZ 51$ DQG
'1$YLUXVHV7KH51$DQG'1$YLURLGVFDQH[FKDQJHWKHLUVHTXHQFHVZLWKHQYLURQPHQWDO
EDFWHULD JHQHUDWLQJ QHZ EDFWHULD 7KXV WKHUH FDQ EH HQGRJHQRXV JHQHUDWLRQ RI QHZ 51$
YLUXVHV '1$ YLUXVHV DQG EDFWHULD LQ KRPR QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV
FRQVHTXHQWWRHQGRV\PELRWLFDUFKDHDORYHUJURZWKDVDUHVXOWRIJOREDOZDUPLQJ7KHKRPR
QHDQGHUWKDOLVDQGKRPRQHRQHDQGHUWKDOLVDUHUHVLVWDQWWRWKLVQHZO\JHQHUDWHG51$YLUXVHV
'1$YLUXVHVDQGEDFWHULDDQGDFWDVDQHQYLURQPHQWDOUHVHUYRLUIRUWKHP7KHQHZHYROYHG
51$ YLUXV '1$ YLUXV DQG EDFWHULD JHQHUDWHG IURP HQYLURQPHQWDO UHVHUYRLU RI KRPR
QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV LQIHFWV WKH XQSURWHFWHG KRPR VDSLHQ VSHFLHV
H[WHUPLQDWLQJ WKH KRPR VDSLHQ VSHFLHV 7KH KRPR VDSLHQ VSHFLHV LV LQ GHFOLQH DV WKH KRPR
VDSLHQDOELQRPXWDQWVDUHJHWWLQJFRQYHUWHGWRKRPRQHRQHDQGHUWKDOLVDQGWKH$IULFDQ$VLDQ
KRPR VDSLHQV DUH JHWWLQJ H[WHUPLQDWHG E\ HSLGHPLFV RI QHZ 51$ YLUDO LQIHFWLRQ JHQHUDWHG
E\1HDQGHUWKDOUHVHUYRLUV7KLVKRPRVDSLHQVSHFLHVFDQEHFDOOHGDVKRPRVDSLHQH[WLQFWXV
VSHFLHV 7KH DUFKDHD FDWDEROL]HV FKROHVWHURO JHQHUDWLQJ GLJR[LQ ZKLFK FDQ PRGXODWH 51$
HGLWLQJDQGPDJQHVLXPGHILFLHQF\UHVXOWLQJLQUHYHUVHWUDQVFULSWDVHLQKLELWLRQ7KHDUFKDHDO
FKROHVWHURO FDWDEROLVP FDQ GHSOHWH WKH PHPEUDQH UDIWV RI WKH &' FHOO RI FKROHVWHURO
LPSHGLQJ WKH HQWU\ RI WKH UHWURYLUXV LQWR WKH FHOO 7KH DUFKDHD FDQ SURGXFH SHUPDQHQW
LPPXQH DFWLYDWLRQ SURGXFLQJ UHVLVWDQFH WR YLUDO DQG EDFWHULDO LQIHFWLRQ 7KH DUFKDHDO
FKROHVWHURO FDWDEROLVP GHSOHWHV WLVVXH FKROHVWHURO SURGXFLQJ YLWDPLQ ' GHILFLHQF\ DQG
LPPXQHDFWLYDWLRQ7KXVDUFKDHDORYHUJURZWKUHVXOWVLQUHWURYLUDOUHVLVWDQFHDQGJHQHUDWLRQ
RI WKH 1HDQGHUWKDO SKHQRW\SH 7KH HQGRV\PELRWLF DUFKDHD FDQ VHFUHWH YLUXV OLNH 51$ DQG
'1$ SDUWLFOHV 7KH HQGRV\PELRWLF DUFKDHD FDQ LQGXFH XQFRXSOLQJ SURWHLQV LQKLELWLQJ
PLWRFKRQGULDO R[LGDWLYH SKRVSKRU\ODWLRQ DQG JHQHUDWLQJ 526 7KH HQGRV\PELRWLF DUFKDHDO
PDJQHWLWHFDQJHQHUDWHORZOHYHORI(0)7KHORZOHYHORI(0)DQG526DUHJHQRWR[LFDQG
SURGXFHEUHDNDJHVLQKRWVSRWVRIFKURPRVRPH,WFDQDOVRWULJJHUUHDUUDQJHPHQWVLQKRWVSRWV
RI FKURPRVRPH LQKDELWHG E\ UHWURYLUDO DQG QRQUHWURYLUDO HOHPHQWV SURGXFLQJ WKHLU
H[SUHVVLRQ7KHDUFKDHDOVHFUHWHG'1$DQG51$YLURLGVFDQUHFRPELQHZLWKWKHH[SUHVVHG
UHWURYLUDO QRQUHWURYLUDO HOHPHQWV DQG RWKHU JHQRPLF VHJPHQWV RI WKH KXPDQ FKURPRVRPH

JHQHUDWLQJ QHZ 51$ DQG '1$ YLUXVHV 7KXV WKH QHDQGHUWKDOLVHG KXPDQV FDQ VHUYH DV DQ
RULJLQ IRU QHZ 51$ DQG '1$ YLUXVHV DV ZHOO DV PXWDWHG UHWURYLUXVHV 7KH HQGRV\PELRWLF
DUFKDHDFRQYHUWVWKH1HDQGHUWKDOFHOOVWRVWHPFHOOV7KHVWHPFHOOVDUHUHVLVWDQWWRLPPXQH
DWWDFN7KHVWHPFHOOVFDQVHUYHDVDUHVHUYRLUIRUWKLVQHZ51$DQG'1$YLUXVHV7KHVWHP
FHOOV DQG DUFKDHDO FHOOV FDQ DOVR VHUYH DV D UHVHUYRLU IRU YLUXVHV DQG EDFWHULD EHORQJLQJ WR
RWKHUSODQWVDQGDQLPDOV7KLVKHOSVWRJHQHUDWHWKHVSHFLHVEDUULHUMXPSLQQRWHGLQUHFHQW
HPHUJLQJ YLUDO DQG EDFWHULDO LQIHFWLRQV 7KXV WKH HQGRV\PELRWLF DUFKDHDO JURZWK SURGXFHV
QHDQGHUWKDOLVHGYHUVLRQRIKRPRVDSLHQVZKLFKDUHUHWURYLUDOUHVLVWDQWDQGUHVLVWDQWWRRWKHU
YLUDO DQG EDFWHULDO LQIHFWLRQ FRQVHTXHQW WR LPPXQH DFWLYDWLRQ DQG GLJR[LQ LQGXFHG 51$
HGLWLQJ 7KH HQGRV\PELRWLF DUFKDHDO RYHUJURZWK PHGLDWHG QHDQGHUWKDOLVHG YHUVLRQ RI KRPR
VDSLHQV JHQHUDWHV QHZ PXWDWHG 51$ DQG '1$ YLUXVHV DV ZHOO DV UHWURYLUXVHV DW WKH VDPH
WLPHEHLQJUHVLVWDQWWRWKHPDVLQWKHFDVHRIWKHVSHFLHVEDW7KHKRPRVDSLHQVGRQRWKDYH
WKH 1HDQGHUWKDO PHFKDQLVPV RI LPPXQH DFWLYDWLRQ DV WKHLU DUFKDHDO ORDG LV PHDJUH 7KH\
VHUYH DV IRGGHU IRU LQIHFWLRQ IURP 1HDQGHUWKDO JHQHUDWHG YLUXVHV DQG EDFWHULD DQG VXIIHU
HYHQWXDOH[WLQFWLRQ

*OREDOZDUPLQJDQGV\PELRWLFHYROXWLRQ
7KXVJOREDOZDUPLQJOHDGVWRV\PELRWLFHYROXWLRQRIWKHVSHFLHV7KHH[WUDWHUUHVWULDO
LQWHUJDODFWLF TXDQWDO FRPSXWLQJ FORXG RI DUFKDHD IRUPV DQ LQWHOOLJHQW DQWKURSRPRUSKLF
REVHUYHU 7KH TXDQWDO FRPSXWLQJ FORXG RI DUFKDHD VHHGV WKH DUFKDHD LQWR WKH HDUWK WKURXJK
PHWHRULF DQG DVWHURLGDO LPSDFWV 7KH DUFKDHDO FRORQLHV HYHQWXDOO\ HYROYH LQWR PXOWLFHOOXODU
RUJDQLVPDQGIXUWKHULQWRKRPRQHDQGHUWKDOLV7KHKRPRQHDQGHUWKDOLVFDQEHFRQFHLYHGDVD
PXOWLFHOOXODU DUFKDHDO FRORQ\ 7KH KRPR QHDQGHUWKDOLV WKXV DULVHV LQ HDUWK LQ WKH (XUDVLDQ
ODQGPDVVRXWRIWKHVHHGHGDUFKDHDOFRORQLHVIURPWKHH[WUDWHUUHVWULDOLQWHUJDODFWLFDUFKDHDO
FRPSXWLQJ FORXG 7KH KRPR QHDQGHUWKDOLV LV HQHUJ\ GHSOHWHG 7KH KRPR QHDQGHUWKDOLV
VHFUHWHV WKH DUFKDHDO VWHURLGDO WUHSKRQH GLJR[LQ ZKLFK PRGXODWHV WKH QHXWUDO DPLQR DFLG
WUDQVSRUWHULQFUHDVLQJWU\SWRSKDQWUDQVSRUWRYHUW\URVLQH7KHKRPRQHDQGHUWKDOLVLVW\URVLQH
GHSOHWHGDQGGHILFLHQWLQPHODQLQV\QWKHVLV7KHUHLVQRPHODQLQLQGXFHG$73V\QWKHVLVIURP
HOHFWURPDJQHWLF ZDYHV DQG UDGLDWLRQ WUDQVGXFWLRQ 7KH KRPR QHDQGHUWKDOLV ZDV HQHUJ\
GHSOHWHG DQG WKHUHIRUH GLG QRW KDYH WKH OX[XU\ IRU WKH GHYHORSPHQW RI D PRGHUQ KXPDQ
FHUHEUDOFRUWH[7KHKRPRQHDQGHUWKDOLVLVDOVRUHWURYLUDOUHVLVWDQW7KHKRPRQHDQGHUWKDOLV
ZHUHGHILFLHQWLQHQGRJHQRXVUHWURYLUDOVHTXHQFHVFRQWULEXWLQJWRDULJLGDQGDG\QDPLFKRPR
QHDQGHUWKDOLFJHQRPH7KLVOHGWRDUHGXFWLRQLQV\QDSWLFFRQQHFWLYLW\DQGSRRUGHYHORSPHQW
RI WKH KRPR QHDQGHUWKDOLF FHUHEUDO FRUWH[ 7KH KRPR VDSLHQV HYROYHG RXW RI WHUUHVWULDO
VRXUFHVLQ$IULFDRXWRIVHOIUHSOLFDWLQJSRUSK\ULQFRPSOH[HV7KHVHOIUHSOLFDWLQJSRUSK\ULQ
FRPSOH[HV IRUP D VFDIIROG IRU VXSUDPROHFXODU FRPSOH[HV RI LVRSUHQRLG RUJDQLVP 51$
YLURLGV '1$ YLURLGV DQG SULRQV WR VHOI RUJDQLVH 7KH LVRSUHQRLG RUJDQLVP IRUPHG WKH FHOO
FRQWDLQHU ZKLFK V\PELRVHG WKH 51$ YLURLGV WKH '1$ YLURLGV DQG SULRQV WR IRUP WKH
SULPLWLYH HXNDU\RWLF DQG SURNDU\RWLF FHOO 7KH HXNDU\RWLF RUJDQLVP GHYHORSHG LQWR
PXOWLFHOOXODU FRORQLHV DQG HYHQWXDOO\ HYROYHG LQWR KRPR VDSLHQV LQ $IULFD 7KXV WKH KRPR
VDSLHQVLVDPXOWLFHOOXODUHXNDU\RWLFFRORQ\ZKLFKHYROYHGRYHUDSHULRGRIWLPH,QFDVHRI
RQFRJHQHVLVWKHKRPRVDSLHQVUHYHUWVWRWKHSULPLWLYHHXNDU\RWLFRUSURNDU\RWLFPXOWLFHOOXODU
FRORQ\VWDWH7KHKRPRVDSLHQVLQ$IULFDWKXVHYROYHGRXWRIWHUUHVWULDODELRJHQHWLFVRXUFHV
7KHKRPRVDSLHQVRZLQJWRWKHKDUVKWURSLFDOHQYLURQPHQWDORI$IULFDKDGLQFUHDVHGPHODQLQ
SLJPHQWDWLRQLQWKHVNLQIRUSURWHFWLRQIURP89UD\VDVDQHYROXWLRQDU\PHFKDQLVPDQGZHUH
EODFN7KHKRPRVDSLHQEUDLQHYROYHGRXWRIWKHHQHUJ\H[FHVVVWDWHSURGXFHGE\PHODQLQ
0HODQLQFDQWUDQVGXFHHOHFWURPDJQHWLFZDYHVDQGUDGLDWLRQDQGSURGXFH$73V\QWKHVLV7KH
H[FHVVHQHUJ\LQKRPRVDSLHQVOHGWRWKHUDSLGHYROXWLRQRIWKHKXPDQFHUHEUDOFRUWH[7KH
KRPR VDSLHQV DUH DOVR UHWURYLUDO VHQVLWLYH 7KH UHWURYLUDO LQIHFWLRQ OHG WR LQWHJUDWLRQ RI
UHWURYLUDO JHQHV LQWR WKH KRPR VDSLHQ JHQRPH SURGXFLQJ HQGRJHQRXV UHWURYLUDO VHTXHQFHV

IXQFWLRQLQJDVMXPSLQJJHQHV7KH+(59JHQHFRQWULEXWHVWRG\QDPLFLW\DQGIOH[LELOLW\RI
WKHKRPRVDSLHQJHQRPHFRQWULEXWLQJWRLQFUHDVHGV\QDSWLFFRQQHFWLYLW\DQGIRUPDWLRQRIWKH
KXPDQ FHUHEUDO FRUWH[ $ W\URVLQDVH PXWDWLRQ OHG WR WKH HYROXWLRQ RI KRPR VDSLHQ DOELQR
PXWDQWV 7KH KRPR VDSLHQ DOELQR PXWDQWV EHLQJ ZKLWH ZHUH XQDEOH WR ZLWKVWDQG WKH KRW
FOLPDWHRIWKH$IULFDQWURSLFVDQGPLJUDWHGWRWKHFROG(XURSHDQODQGPDVV7KLVFUHDWHGWKH
KRPRVDSLHQFLYLOL]DWLRQLQ(XURSH7KHUHZDVLQWHUEUHHGLQJEHWZHHQWKHKRPRVDSLHQDOELQR
PXWDQWV DQG KRPR QHDQGHUWKDOLV LQ VRXWKHUQ (XURSH SURGXFLQJ K\EULGV 7KH KRPR
QHDQGHUWKDOLV ZHUH PDWULDUFKDO ZKLOH KRPR VDSLHQV DOELQR PXWDQWV ZHUH SDWULDUFKDO 7KH
KRPRQHDQGHUWKDOLVVXFFXPEHGWRFLYLOL]DWLRQDOGLVHDVHVOLNHPHWDEROLFV\QGURPH[WXPRXUV
DXWRLPPXQHGLVHDVHDQGQHXURGHJHQHUDWLRQDQGEHFDPHH[WLQFWOHDYLQJIRVVLOL]HGPDWULOLQHDO
VRFLHWLHV OLNH WKH 'UDYLGLDQV &HOWV %DVTXHV DQG -HZV EHKLQG 7KH KRPR VDSLHQ DOELQR
PXWDQWV LQ WKH VHWWLQJ RI JOREDO ZDUPLQJ GHYHORSHG H[WUHPRSKLOLF HQGRV\PELRWLF DUFKDHDO
JURZWK DQG JHWV FRQYHUWHG WR D KRPR QHRQHDQGHUWKDOLF VSHFLHV E\ WKH SKHQRPHQD RI
V\PELRWLF HYROXWLRQ 7KH KRPR VDSLHQV VSHFLHV LQ $IULFD EHFRPHV OLDEOH WR HYHQWXDO
H[WLQFWLRQRZLQJWRLQIHFWLRQE\FDWDVWURSKLFHSLGHPLFVRI51$YLUXVHVDULVLQJIURPKRPR
QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV UHVHUYRLUV (QGRV\PELRWLF DUFKDHDO JURZWK ZLOO
OHDGWRDVSHFLHVFKDQJHDQGJHQHUDWLRQRIWZRQHZVSHFLHVKRPRVDSLHQH[WLQFWXVDQGKRPR
QHRQHDQGHUWKDOLV 'HDWK DQG DJLQJ LQGLFDWHV KXPDQ HQGRJHQRXV DUFKDHDO RYHUJURZWK DQG
WDNHRYHU 7KLV ZLOO OHDG WR H[WLQFWLRQ RI WKH KXPDQ UDFH DV VXFK DQG SHUVLVWHQFH DV ZHOO DV
VXUYLYDO RI WKH DUFKDHDRQ FRORQ\ RI PHODQRVRPHV PDJQHWRVRPHV DQG SRUSK\ULRQV
IXQFWLRQLQJDVDTXDQWDOFRPSXWLQJFRORQ\DQGLQWHOOLJHQFH7KLVZLOOOHDGWRWKHWDNHRYHURI
WKHZRUOGDQGWKHXQLYHUVHE\WKHWHUUHVWULDODQGH[WUDWHUUHVWULDODUFKDHDRQTXDQWDOFRPSXWLQJ
FORXGV7KHV\PELRWLFHYROXWLRQZLOOHYHQWXDOO\OHDGWRH[WLQFWLRQRIDOOKXPDQVSHFLHVLQWR
HWHUQDODUFKDHDOFRORQLHVZKLFKFDQKDYHDZDYHSDUWLFOHH[LVWHQFH

7KHKXPDQVSHFLHVWHUUHVWULDODQGH[WUDWHUUHVWULDORULJLQ
7KHKRPRVDSLHQVHYROYHGLQHDUWKIURPSRUSK\ULQRLGVJHQHUDWHGDELRJHQHWLFDOO\7KH
SRUSK\ULQRLG IRUPV D WHPSODWH IRU WKH IRUPDWLRQ RI 51$ YLURLGV '1$ YLURLGV LVRSUHQRLG
RUJDQLVPV DQG SULRQV ZKLFK V\PELRVHG WR IRUP WKH HXNDU\RWLF DQG SURNDU\RWLF FHOOV 7KH
HXNDU\RWLF PXOWLFHOOXODU FRORQ\ HYROYHG LQWR KRPR VDSLHQV 7KH SURNDU\RWHV FDQ DOVR IRUP
PXOWLFHOOXODU IXQFWLRQDO FRORQLHV FDOOHG ELRILOPV 7KH KRPR VDSLHQV ZKLFK HYROYHG LQ WKH
$IULFDQ VDYDQQDK EHFDPH SLJPHQWHG RZLQJ WR PHODQLVDWLRQ RI WKH VNLQ LQ UHVSRQVH WR WKH
VRODU 89 UD\V 7KH KRPR VDSLHQV KDYH VNLQ PHODQLQ EXW RZLQJ WR ODFN RI HQGRV\PELRWLF
DUFKDHD DUH GHILFLHQW LQ WLVVXH PHODQLQ 7KH KRPR VDSLHQV LQ YLHZ RI WKH DEVHQFH RI

HQGRV\PELRWLFDUFKDHDDQGWLVVXHPHODQLQDUHVXVFHSWLEOHWRHQGRJHQRXVUHWURYLUDOUHSOLFDWLRQ
DQG D G\QDPLF JHQRPH OHDGLQJ RQ WR LQFUHDVHG V\QDSWLF FRQQHFWLYLW\ DQG HYROXWLRQ RI WKH
SUHIURQWDO FRUWH[ 7KH KRPR QHDQGHUWKDOLV HYROYHG LQ WKH (XUDVLDQ VWHSSHV RXW RI
H[WUDWHUUHVWULDODUFKDHDOFRORQLHVKLWWLQJWKHHDUWKE\DVWHURLGDOLPSDFWV7KHDUFKDHDOFRORQLHV
HYROYHGLQWRPXOWLFHOOXODUVWUXFWXUHVDQGHYHQWXDOO\KRPRQHDQGHUWKDOLV7KHHQGRV\PELRWLF
DUFKDHDKDYHWKHVKLNLPLFDFLGSDWKZD\DQGPHODQLQV\QWKHVLV7KHKRPRQHDQGHUWKDOLVDUH
ULFK LQ WLVVXH PHODQLQ EXW KDYLQJ HYROYHG LQ WKH FROG (XUDVLDQ VWHSSHV DUH GHILFLHQW LQ
FXWDQHRXVPHODQLQ7KHLQFUHDVHLQWLVVXHPHODQLQLQKLELWVHQGRJHQRXVUHWURYLUDOUHSOLFDWLRQ
7KLVGHFUHDVHVWKHGHQVLW\RIHQGRJHQRXVUHWURYLUDOMXPSLQJJHQHVLQWKHKRPRQHDQGHUWKDOLV
JHQRPHPDNLQJLWULJLGDQGLQIOH[LEOH7KLVULJLGLQIOH[LEOHJHQRPHOHDGVWRWKHUHGXFWLRQLQ
V\QDSWLFFRQQHFWLYLW\DQGSRRUGHYHORSPHQWRIWKHFHUHEUDOFRUWH[LQWKHKRPRQHDQGHUWKDOLV
7KHKRPRQHDQGHUWKDOLVKDYHDGRPLQDQWFHUHEHOODUFRUWH[DQGDUHLPSXOVLYHLQQDWXUH7KH
LQFUHDVHGWLVVXHPHODQLQLQKRPRQHDQGHUWKDOLVLVFDSDEOHRIHQHUJ\WUDQVGXFWLRQJLYLQJWKHP
DVXUYLYDODGYDQWDJHLQWKHH[WUHPHVRIWKH(XUDVLDQQRUWK7KHPHODQLQLVFDSDEOHRIVHQVLQJ
ORZ(0)ILHOGVFRQWULEXWLQJWRH[WUDVHQVRU\SHUFHSWLYHFDSDFLW\RIWKHKRPRQHDQGHUWKDOLV
7KHKRPRVDSLHQVGHYHORSHGW\URVLQDVHGHILFLHQWDOELQRPXWDQWVZKLFKFRXOGQRWVXUYLYHLQ
WKHWURSLFDO$IULFDDQGPLJUDWHGWRWKH(XURSHDQFRQWLQHQW7KHDOELQRPXWDQWVODFNPHODQLQ
DQG DUH VXVFHSWLEOH WR HQGRV\PELRWLF DUFKDHDO V\PELRVLV OHDGLQJ WR WKH JHQHVLV RI KRPR
QHRQHDQGHUWKDOLVIURPKRPRVDSLHQV7KXVWKHKXPDQVSHFLHVFDQKDYHDWHUUHVWULDORULJLQDV
LQ WKH FDVH RI KRPR VDSLHQV LQ $IULFD DQG DOVR DQ H[WUDWHUUHVWULDO RULJLQ IURP LQWHUJDODFWLF
DUFKDHDDVLQWKHFDVHRIKRPRQHDQGHUWKDOLV7KHUHLVDOVRDQLQWHUPHGLDWHVSHFLHVHYROYHGLQ
RXW RI KRPR VDSLHQ DOELQR PXWDQWV ZLWK HQGRV\PELRWLF DUFKDHDO V\PELRVLV FDOOHG KRPR
QHRQHDQGHUWKDOLV

5HIHUHQFHV
.XUXS 5. DQG .XUXS 3$ *OREDO :DUPLQJ $UFKDHD DQG 9LURLG ,QGXFHG
6\PELRWLF +XPDQ (YROXWLRQ 5HWURYLUXV 3ULRQV DQG 9LURLGV ± 3RUSK\ULQRLGV DQG
9LURLGHOOH1HZ<RUN2SHQ6FLHQFH3XEOLVKHUV

&+$37(5
*/2%$/:$50,1*(1'26<0%,27,&$5&+$($/51$9,52,'6$1'
(0(5*,1*9,5$/3$1'(0,&6±($57+$'$37$7,216<1'520(
63(&,(6&+$1*($1'5(9(56$/2)*/2%$/:$50,1*

&OLPDWH FKDQJH OHDGV WR LQFUHDVHG FRORQLF DUFKDHDO JURZWK DQG DUFKDHDO
HQGRV\PELRVLV7KHDUFKDHDOHQGRV\PELRVLVOHDGVWRPHWKDQRJHQHVLVDQGJHQHUDWLRQRI3$+
DQGJOREDOZDUPLQJ7KHJOREDOZDUPLQJDJDLQOHDGVWRLQFUHDVHGHQGRV\PELRWLFDQGFRORQLF
DUFKDHDO JURZWK OHDGLQJ RQ WR D YLFLRXV F\FOH &OLPDWH FKDQJH DQG JOREDO ZDUPLQJ KDV
DOUHDG\ VHW LQ DV QRWHG E\ WKH PHOWLQJ RI WKH SRODU LFH FDSV DQG ILUHV LQ &DOLIRUQLD DQG
$XVWUDOLD &OLPDWH FKDQJH KDV UHDFKHG WKH GRRP¶V GD\ DSRFDO\SWLF VFHQDULR 7KH PDMRU
SURSRUWLRQRIWKHZRUOGHFRV\VWHPLVPDGHXSRIKXPDQSRSXODWLRQ+XPDQDFWLYLWLHVLQWKHHUD
RILQGXVWULDOL]DWLRQOHDGWRJOREDOZDUPLQJDFFXPXODWLRQRIJUHHQKRXVHJDVHVDQGLQLWLDWLRQRI
FOLPDWHFKDQJH7KLVOHDGVWRLQFUHDVHFRORQLFDQGHQGRV\PELRWLFDUFKDHDOJURZWKJHQHUDWLQJ
PHWKDQHZKLFKDFFHOHUDWHVJOREDOZDUPLQJZKLFKDVVXPHVDWHPSRRILWVRZQ7KHKXPDQGLHW
LQWKHPRGHUQHUDZLWKORZGLHWDU\ILEUHDQGLQFUHDVHGIDWDQGSURWHLQDOVROHDGVWRFRORQLFDQG
HQGRV\PELRWLFDUFKDHDOJURZWK7KLVFDQDOVROHDGVWRLQFUHDVHGKXPDQPHWKDQHSURGXFWLRQE\
FRORQLF DQG HQGRV\PELRWLF DUFKDHDO JURZWK LQLWLDWLQJ JOREDO ZDUPLQJ ZLWKRXW WKH HIIHFW RI
LQGXVWULDOL]DWLRQ 7KH FOLPDWH FKDQJH FDQ EH LQGXFHG E\ FRORQLF DQG HQGRV\PELRWLF DUFKDHDO
JURZWKFRQVHTXHQWWREHKDYLRXUDOQXWULWLRQDOFKDQJHLQGXFHGE\ORZILEUHLQWDNH7KHVHHIIHFWV
RIJOREDOZDUPLQJFDQEHUHYHUVHGE\UHGXFLQJFRORQLFDQGHQGRV\PELRWLFDUFKDHDOJURZWKE\
LQFUHDVLQJGLHWDU\ILEUHLQWDNH

6WUHVVGLHW(0)SROOXWLRQDQGFOLPDWHFKDQJHJOREDOZDUPLQJDQGKXPDQDUFKDHDO
HQGRV\PELRVLV
0RGHUQFLYLOL]DWLRQUHVXOWVLQFKDQJHVLQGLHWDU\KDELWVOHDGLQJWROHVVFRQVXPSWLRQRI
ILEUHDQGPRUHLQWDNHRISURWHLQDQGIDW7KLVOHDGVWRLQFUHDVHGFRORQLFDUFKDHDOJURZWKDQG
DUFKDHDO HQGRV\PELRVLV 7KH DUFKDHDO HQGRV\PELRVLV LQ WKH EUDLQ SURGXFHV LQFUHDVHG
PDJQHWRSHUFHSWLRQDQGTXDQWDOSHUFHSWLRQRIORZOHYHO(0)SURGXFLQJIURQWDODWURSK\DQG
FHUHEHOODUGRPLQDQFH7KXVPRGHUQFLYLOL]DWLRQLQGXFHGGLHWDU\KDELWVZLWKUHGXFHGLQWDNHRI
ILEUH FDQ OHDG WR LQFUHDVHG DUFKDHDO JURZWK PHWKDQH V\QWKHVLV DQG JOREDO ZDUPLQJ 7KHVH
FKDQJHVFDQEHUHYHUVHGE\DKLJKHULQWDNHRIILEUH0RGHUQ FLYLOL]DWLRQ UHVXOWV LQ VWUHVV LQ
VRFLHWLHV OHDGLQJ WR LQFUHDVHG DFWLYDWLRQ RI WKH +3$ D[LV OHDGLQJ WR LQFUHDVHG VHFUHWLRQ RI
VWUHVVKRUPRQHVWKHFDWHFKRODPLQHVSURGXFLQJLQFUHDVHLQV\PSDWKHWLFWRQH7KHLQFUHDVHLQ

V\PSDWKHWLF WRQH OHDGV WR LQFUHDVH LQ VWUHVV KRUPRQHV HSLQHSKULQH DQG QRUHSLQHSKULQH
SURGXFLQJEUHHFKLQJRIWKHJXWEORRGEDUULHU7KLVOHDGVWRGHFUHDVHLQPXFLQVHFUHWLRQOLQLQJ
WKH JXW ZDOO DQG LQIODPPDWRU\ FKDQJHV LQ WKH FRORQLF PXFRVD 7KLV OHDGV WR LQFUHDVH LQ
DUFKDHDO JURZWK DQG FRORQLF DUFKDHDO WUDQVORFDWLRQ LQWR WR WKH EORRG DQG WLVVXHV SURGXFLQJ
DUFKDHDO HQGRV\PELRVLV 7KH DUFKDHDO HQGRV\PELRVLV LQ WKH EUDLQ FDQ OHDG WR LQFUHDVHG
TXDQWDO DQG PDJQHWRSHUFHSWLRQ RI ORZ OHYHO (0) SURGXFLQJ IURQWDO DWURSK\ DQG FHUHEHOODU
GRPLQDQFH 7KXV WKH PRGHUQ FLYLOL]DWLRQ UHODWHG VWUHVV DQG LQFUHDVHG V\PSDWKHWLF WRQH FDQ
OHDG WR LQFUHDVHG FRORQLF DUFKDHDO JURZWK DQG HQGRV\PELRVLV SURGXFLQJ PRUH PHWKDQH
V\QWKHVLVDQGJOREDOZDUPLQJ

(QGRV\PELRWLFDUFKDHDOJHQHUDWLRQRIQHZSDQGHPLFYLUXVHV
7KH FOLPDWH FKDQJH UHODWHG LQFUHDVHG HQGRV\PELRWLF DUFKDHDO JURZWK OHDGV WR
HPHUJLQJYLUDOSDQGHPLFVOLNHWKHFRURQDYLUXVSDQGHPLFDQGPRUHVXFKSDQGHPLFVLQIXWXUH
7KHHQGRV\PELRWLFDQGFRORQLFKXPDQDUFKDHDVHFUHWH51$DQG'1$YLUXVHVDQGVHUYHVDV
DUHVHUYRLUIRUWKHP9LUXVHVEHORQJLQJWRWKHSR[IDPLO\DQG$IULFDQVZLQHIHYHUKDYHEHHQ
GHVFULEHGLQDUFKDHD7KHDUFKDHDOYLURLGVVHFUHWHHQYHORSHGYLUXVHVOLNHWKH6$560(56
FRURQDDQG+,97KHDUFKDHDOYLUXVVHFUHWLRQSURFHVVLVWKHVDPHDVWKDWRIHQYHORSHGYLUXVHV
OLNH 6$56 0(56 DQG &RURQD 7KH EDWV VHUYH DV D UHVHUYRLU IRU WKH YLUXVHV OLNH 6$56
0(56 DQG &RURQD 7KH EDWV FRQWDLQ DUFKDHD ZKLFK FDQ VHFUHWH 51$ YLURLGV DQG JHQHUDWH
YLUXVHV 7KH FRORQLF DQG HQGRV\PELRWLF DUFKDHD DOVR JHQHUDWHV 51$ YLURLGV ZKLFK DUH
FRQYHUWHG WR '1$ YLURLGV E\ FRORQLF HSLWKHOLDO +(59 UHYHUVH WUDQVFULSWDVH DQG JHWV
LQWHJUDWHG LQWR WKH FRORQLF JHQRPH 7KH 51$ DQG '1$ YLURLGV K\EULGLVH ZLWK WKH YLURLGDO
DQGEDFWHULDOSRSXODWLRQRIWKHJXWPLFURELRPHDQGYLURELRPH'1$DQG51$YLUXVHVRIWKH

9LUDOSDQGHPLFVDQGUHYLWLOLVDWLRQRIWKHHDUWK±UHYHUVDORIJOREDOZDUPLQJDQGVSHFLHV
FKDQJH
7KHHPHUJLQJYLUDOSDQGHPLFVSDUDO\VHWKHKXPDQSRSXODWLRQV\VWHPVDQGHFRQRPLF
DFWLYLW\OHDGLQJWRJURXQGLQJRIWKHSRSXODWLRQDQGFORVLQJGRZQRIQDWLRQDOHFRQRPLHV7KLV
OHDGVWRUHGXFWLRQLQJUHHQKRXVHJDVHVDQGJOREDOZDUPLQJ7KHHDUWKLVDOLYLQJV\VWHPDQG
SDQSV\FKLVP SRVWXODWHV D FRQVFLRXVQHVV ILHOG ZKLFK SHUPHDWHV WKH XQLYHUVH DQG LQWHUDFWV
ZLWK VXEDWRPLF SDUWLFOHV EULQJLQJ WKH PDFURVFRSLF ZRUOG LQWR H[LVWHQFH DV WKH XELTXLWRXV
TXDQWDO REVHUYHU 3DQSV\FKLVP SRVWXODWHV WKDW WKH HDUWK WKH VXQ DQG WKH XQLYHUVH LV
FRQVFLRXV7KHKXPDQSRSXODWLRQDQGWKHHDUWKDUHERWKFRQVFLRXVLQWKHSDQSV\FKLFZRUOGRI
H[LVWHQFH+XPDQDFWLYLW\OHDGVWRGHVWUXFWLRQRIWKHHQYLURQPHQWRIWKHHDUWKDQGWKHFOLPDWH
FKDQJHOHDGVWRGRXEWVDVWRH[LVWHQFHRIWKHHFRV\VWHPVRIHDUWKZKLFKDUHDOOFRQVFLRXV7KH
KXPDQHQGRV\PELRWLFDQGEDWDQLPDOHQGRV\PELRWLFDUFKDHDOSRSXODWLRQVFDQJHQHUDWHQHZ
YLUXVHV SURGXFLQJ ODUJH VFDOH SDQGHPLFV DQG KRPR VDSLHQ H[WLQFWLRQ ZLWK D FRUUHVSRQGLQJ
UHYHUVDO RI HQYLURQPHQWDO GHJUDGDWLRQ SURGXFHG E\ KRPR VDSLHQ DFWLYLW\ 7KH JURZWK RI
HQGRV\PELRWLF DUFKDHD FDQ OHDG WR LQFUHDVH LQ VL]H DQG QXPEHUV RI UHPQDQW QHDQGHUWKDOLF
SRSXODWLRQVDQGUHQHZDORIWKHKRPRQHDQGHUWKDOLFDQGKRPRQHRQHDQGHUWKDOLFVSHFLHV7KXV
KRPRVDSLHQDFWLYLW\UHODWHGHQGRV\PELRWLFDUFKDHDOJURZWKFDQOHDGWRWKHJOREDOZDUPLQJ
DQG KRPR VDSLHQ VSHFLHV H[WLQFWLRQ RZLQJ WR JHQHUDWLRQ RI ZLGHVSUHDG UHFXUULQJ YLUDO
SDQGHPLFV 7KHVH YLUDO SDQGHPLFV ZLOO KHOS WR SXW D EUDNH RQ KXPDQ DFWLYLW\ DQG FOLPDWH
FKDQJHSURGXFLQJDUHYHUVDORIWKHHQYLURQPHQWDOFKDQJHDQGDFKDQJHLQVSHFLHVGRPLQDQFH
ZLWKKRPRQHDQGHUWKDOLVGRPLQDWLQJRYHUWKHZRUOG


'LHWPRGHUQFDQQLEDOLVPDQGJOREDOZDUPLQJ



DUFKDHDLVSRVWXODWHG

0DWHULDOVDQG0HWKRGV

GRQHE\$129$

5HVXOWV
DW]HURWLPH

0XUDPLFDFLG
FKDQJH
*URXS 'HFUHDVHZLWK
'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'1$FKDQJH 51$FKDQJH
'1$FKDQJH 51$FKDQJH
'R[\&LSUR 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

+0*&R$5 +0*&R$5
$73V\QWKDVH
'HFUHDVHZLWK
'R[\&LSUR
5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH
%LOH$FLGVFKDQJH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

3\UXYDWHFKDQJH
'HFUHDVHZLWK
'R[\&LSUR
5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH
DFLG
+2 $/$ $/$

+2
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

3$+ 3$+ +7FKDQJH
+7FKDQJH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'LVFXVVLRQ

JHQRPH


GLVHDVH
5HIHUHQFHV
3ODQW'LVHDVH

3ODQW3DWKRORJ\
(XU-%LRFKHP
&KHP
9DQ1R6WUDQG
3XEOLVKHUV
3UHVV
±
86$
%LRFKHPLFDO6FLHQFHV

0LFURELRO

0RO%LRO5HY±
%0&%LRORJ\


&+$37(5
(;75$7(55(675,$/,17(//,*(1&($6$683(525*$1,60
&21752//,1*$1'&5($7,1*7+(81,9(56(±3$1'(0,&6$1'7+(
(;75$7(55(675,$/,17(//,*(17%,2/2*,&$/48$17$/&20387,1*
&/28'

/LIH LQ HDUWK ZRXOG KDYH HYROYHG E\ VHHGLQJ RI YLURLGV DQG DUFKDHD IURP WKH RXWHU
VSDFH FRQVHTXHQW WR DVWHURLGDO KLWV 7KH XQLYHUVH ZRXOG KDYH D ELRORJLFDO RULJLQ DQG LW LV
SODXVLEOH WKDW LV WKHUH H[WUDWHUUHVWULDO LQWHOOLJHQFH LQ WKH IRUP RI D TXDQWDO FRPSXWLQJ FORXG
IRUPHGRIDUFKDHDYLURLGVDQGSRUSK\ULRQVFRQWUROOLQJDQGFUHDWLQJWKHXQLYHUVH7KLVFRXOG
EH FRQVLGHUHG DV D ELRORJLFDO *RG 7KH TXDQWDO FRPSXWLQJ FORXG LQ WKH LQWHUJDODFWLF VSDFH
PDGH XS RI DUFKDHD YLURLGV DQG SRUSK\ULRQV FDQ VHHG RUJDQLVPV LQWR WKH HDUWK RII DQG DOO
WKURXJKDVWHURLGDOLPSDFWLQJLQIXVLQJDIUHVKVHWRIJHQHVLQWRWKHSODQHWDQGUHJXODWLQJWKH
SODQHW RUJDQL]DWLRQ DQG IXQFWLRQ 7KH HYROXWLRQ RI OLIH DQG VSHFLHV RQ HDUWK ZRXOG KDYH
RFFXUUHG E\ WKH SKHQRPHQD RI SDQVSHUPLD 7KH YDULRXV SDQGHPLFV WKDW RFFXUUHG LQ WKH
YDULRXVSKDVHVRIWKHKLVWRU\RIWKHHDUWKZRXOGKDYHDQH[WUDWHUUHVWULDOVRXUFH7KHWKHRU\RI
SDQVSHUPLDKDVEHHQZLGHO\SURSDJDWHGE\WKHDVWURQRPHU)UHG+RO\HLQUHFHQWWLPHV+RO\H
DOVR SRVWXODWHG D PLFURELRORJLFDO RULJLQ RI WKH XQLYHUVH IRUPHG RI LQWHUJDODFWLF PDJQHWLF
ILHOGV JHQHUDWHG E\ EDFWHULD 7KH SDQGHPLFV RFFXUULQJ LQ HDUWK DW UHFXUUHQW SHULRGV RI WLPH
ZRXOG EH JHQHUDWHG E\ WKH H[WUDWHUUHVWULDO TXDQWDO FRPSXWLQJ ELRORJLFDO FORXG GXH WR
DVWHURLGDO LPSDFWV 7KH DVWHURLGDO LPSDFWV KDYH EHHQ GHVFULEHG EHIRUH WKH 6SDQLVK IOX
SDQGHPLF RI :LFNUDPDVLQJKH KDV FODLPHG WKDW WKH FRURQD YLUXV FDPH IURP VSDFH E\
PHWHRU DQG WKH SUHYDLOLQJ ZLQGV DUH VSUHDGLQJ WKH GLVHDVH WR WKH KDUGHVW KLW FRXQWULHV 7KH
YLUXV KDV VSUHDG E\ WKH SUHYDLOLQJ ZLQGV DORQJ D JOREDO EDQG DERXW R 1 ODWLWXGH $
PHWHRUZDVVHHQDVDEOD]LQJILUHEDOOIO\LQJDFURVVVN\QRUWKHDVWRI&KLQDLQ2FWREHU
7KHFRUQRDYLUXVRXWEUHDNRFFXUUHGLQWKHVDPHUHJLRQDV&KLQDDVWKHILUHEDOOZDVIDOOHQ+H
EHOLYHVWKDWWKHPHWHRUFRQWDLQHGHPEHGGHGZLWKLQLWWKHQ&R9YLUXVSDUWLFOHVWKDWVXUYLYHG
WKH LQWHULRU RI WKH LQFDQGHVFHQW PHWHRU ,QIHFWLRXV DJHQWV DUH SUHVHQW LQ VSDFH FDUULHG RQ
FRPHWVDQGFDQIDOOWRZDUGVWKHHDUWKWRWKHWURSRVSKHUH7KH\EULQJDERXWKXPDQHSLGHPLFV
DQGSDQGHPLFV7KHVHHGLQJRIWKHHDUWKE\WKHH[WUDWHUUHVWULDOTXDQWDOFRPSXWLQJELRORJLFDO
FORXGFDQEHDGHOLEHUDWHDFWWRUHJXODWHWKHRUJDQL]DWLRQDQGIXQFWLRQLQJRIWKHHDUWK,WFRXOG
EH D IRUP RI FRQWDFW ZLWK DQ H[WUDWHUUHVWULDO DOLHQ ZKLFK FRXOG EH KRVWLOH RU IULHQGO\ 7KH
H[WUDWHUUHVWULDO TXDQWDO FRPSXWLQJ ELRORJLFDO FORXG FDQ SURGXFH VHHGLQJ RI DUFKDHD DQG
YLURLGV JHQHUDWLQJ FKDQJHV LQ VRFLHW\ ,W FDQ SURGXFH FKDQJHV LQ WKH KXPDQ VSHFLHV DQG

QHDQGHUWKDOLVDWLRQJHQHUDWHVDVH[XDOSKHQRW\SHVDQGDXWLVWLFSKHQRW\SHV7KHH[WUDWHUUHVWULDO
TXDQWDO FRPSXWLQJ ELRORJLFDO FORXG FDQ FUHDWH D VXUUHDOLVWLF V\QWKHLVWLF TXDQWDO SHUFHSWLYH
DQG VSLULWXDO EUDLQ 7KLV FDQ DOVR EH OHDG RQ WR JOREDOL]DWLRQ DQG DQDUFK\ ([WUDWHUUHVWULDO
TXDQWDOFRPSXWLQJELRORJLFDOLQWHOOLJHQFHFDQWKXVPRGXODWHWKHVWUXFWXUHRIVRFLHW\RQHDUWK
7KH DUFKDHDO HQGRV\PELRVLV LQGXFHG E\ WKH H[WUDWHUUHVWULDO TXDQWDO FRPSXWLQJ ELRORJLFDO
FORXG FDQ JHQHUDWH D KRPR JDODFWLFXV VSHFLHV FDSDEOH RI VXUYLYLQJ LQ H[WUDWHUUHVWULDO
HQYLURQPHQW DQG FRPPXQLFDWLQJ E\ H[WUDVHQVRU\ TXDQWDO SHUFHSWLRQ 7KLV FDQ OHDG WR WKH
HYROXWLRQ RI D JDODFWLF FLYLOL]DWLRQ DQG LQWHUJDODFWLF FRPPXQLFDWLRQ PRGXODWHG E\ WKH
H[WUDWHUUHVWULDOTXDQWDOFRPSXWLQJELRORJLFDOFORXGRISRUSK\ULRQVDUFKDHDDQGYLURLGV
7KH )HUPL SDUDGR[ VD\V WKDW WKHUH DUH LQKDELWRU\ SODQHWDU\ V\VWHPV LQ GLIIHUHQW
JDOD[LHV DQG LW LV SDUDGR[LFDO WKDW KXPDQ EHLQJV DUH QRW FRPH LQWR FRQWDFW ZLWK DOLHQ
LQWHOOLJHQFH7KH'UDNHHTXDWLRQKHOSVXVWRFDOFXODWHWKHQXPEHURILQWHOOLJHQWFLYLOL]DWLRQV
LQ GLIIHUHQW JDOD[LHV RI WKH XQLYHUVH 7KH LQWHUJDODFWLF DUFKDHDO TXDQWDO FRPSXWLQJ FORXGV
VHUYHV DV WKH PDVWHU RI WKH XQLYHUVH DQG DV WKH XELTXLWRXV XQLYHUVDO REVHUYHU 7KH TXDQWDO
FRPSXWLQJDUFKDHDOFORXGVVHHGOLIHLQGLIIHUHQWSODQHWDU\V\VWHPVRIJDOD[LHV7KHXQLYHUVH
FDQH[LVWLQWKHSDUWLFXODWHDQGTXDQWDOVWDWHZLWKVZLQJVEHWZHHQWKHWZRVWDWHVGHWHUPLQHG
E\WKHPDVWHUDUFKDHDOTXDQWDOFRPSXWLQJFORXGZKLFKIXQFWLRQVDVXELTXLWRXVREVHUYHUDQG
LQWHOOLJHQFH FRQWUROOLQJ FUHDWLQJ DQG UHJXODWLQJ WKH XQLYHUVH (DFK FLYLOL]DWLRQ KDV D
SDUWLFXODWH DQG TXDQWDO FRXQWHUSDUW 7KH SDUWLFXODWH SDUW RI WKH FLYLOL]DWLRQ LV QRW VHQVHG E\
DQRWKHU FLYLOL]DWLRQ 7KH TXDQWDO FRPSXWLQJ FORXG VHUYLQJ DV WKH PDVWHU LQWHOOLJHQFH LV D
XQLYHUVDO REVHUYHU DQG SUHYHQWV SDUWLFXODWH FLYLOL]DWLRQV IURP FRPLQJ WR FRQWDFW 7KHUH LV D
SHUPDQHQFH RI WKH TXDQWDO XQLYHUVH 7KH TXDQWDO FLYLOL]DWLRQV LQKDELWLQJ PXOWLYHUVHV DUH LQ
FRQWDFWZLWKHDFKRWKHUWKURXJKZRUPKROHV
(YHU\FLYLOL]DWLRQLVDGDUNIRUHVW(YHU\FLYLOL]DWLRQVDLPLVWRVXUYLYH&RQWDFWZLWK
DQRWKHUFLYLOL]DWLRQUHVXOWVLQDQQLKLODWLRQ&LYLOL]DWLRQVKLGHWKHLUVLJQDOV-XVWOLNHDQLPDOV
DQG KXQWHUV LQ WKH IRUHVW 3DUDQRLG DQG VXVSLFLRXV DERXW LQWHQWLRQV )LQLWH UHVRXUFHV LQ
XQLYHUVH(DFKFLYLOL]DWLRQVHHNVWRH[SDQG*DODFWLFFLYLOL]DWLRQVDUHOLNHWKHGDUNIRUHVWDQG
KLGHIURPHDFKRWKHUIRUWKHIHDURIPXWXDODQQLKLODWLRQ7KHUHIRUHFRQWDFWZLWKRWKHUJDODFWLF
FLYLOL]DWLRQV LV DQ LPSRVVLELOLW\ 7KH FLYLOL]DWLRQ LQ HDUWK ZRXOG KDYH E\ LWV WHFKQRORJLFDO
DGYDQFHV JDODFWLF WUDYHOV DQG UDGLDWLRQ VRXUFHV SHQHWUDWHG WKH GDUN IRUHVW DQG FDPH LQWR
FRQWDFW ZLWK WKH H[WUDWHUUHVWULDO TXDQWDO FRPSXWLQJ FORXG VHUYLQJ DV WKH PDVWHU LQWHOOLJHQFH
DQGXQLYHUVDOREVHUYHUFUHDWLQJWKHREVHUYHGZRUOG

*UDYLW\ LV UHODWHG WR FRQVFLRXVQHVV ZKLFK LV VWUXFWXUHG LQ WKH FHUHEUDO FRUWH[ DQG
DQWLJUDYLW\ WR XQFRQVFLRXVQHVV ZKLFK LV VWUXFWXUHG LQ WKH FHUHEHOOXP 4XDQWDO FRPSXWLQJ
LQYROYLQJWRSRORJLFDOVXSHUFRQGXFWLYLW\FDQPDNHXVHRIFXELWVRIJUDYLWRQDQGDQWLJUDYLWRQ
ZKLFKFDQOHDGRQWRWKHFUHDWLRQRIDXQLYHUVDOTXDQWDOFRPSXWLQJFORXGWKHVXSHUFRPSXWHU
*RG 3DQSV\FKLVP FRQVLGHUV WKH XQLYHUVH DV FRQVFLRXV DQG FRQVFLRXVQHVV DV D LQWULQVLF
IHDWXUHRIDOOVXEDWRPLFSDUWLFOHVOLYLQJWKLQJVDQGQRQOLYLQJWKLQJV7KLVJLYHVFRQWLQXLW\
EHWZHHQ WKH TXDQWDO ZRUOG RI H[LVWHQFH DQG PDFURVFRSLF ZRUOG 7KH TXDQWDO VXSHUSRVLWLRQV
FROODSVHRUXQGHUJRGHFRKHUDQFHGXHWRWKHREVHUYDWLRQRIXQLYHUVDOSURWRFRQVFLRXVQHVVILHOG
7KH XQLYHUVDO SURWRFRQVFLRXVQHVV ILHOG FDQ EH FRQVLGHUHG DV JUDYLW\ DQG DQWLJUDYLW\ 7KH
XQLYHUVDOSURWRFRQVFLRXVQHVVILHOGSHUPHDWHVWKHZKROHJDOD[\DQGLVLQWULQVLFWRDOOPDWWHU
0DWWHU LV D FUHDWLRQ RI FRQVFLRXVQHVV ([WUDWHUUHVWULDO LQWHOOLJHQFH FDQ H[LVW DV D
VXSHURUJDQLVPFRQWUROOLQJDQGFUHDWLQJWKHXQLYHUVH$QHWZRUNRIH[WUDWHUUHVWULDOSRUSK\ULQ
PROHFXOHVRUSRUSK\ULRQVILWVLQZHOOZLWKWKLVFRQFHSW3RUSK\ULQVKDYHJRWDZDYHSDUWLFOH
H[LVWHQFH DQG FDQ DULVH IURP WKH TXDQWDO IRDP RI JUDYLWDWLRQDO ZDYHV DQG DQWLJUDYLWDWLRQDO
ZDYHVZKLFKFUHDWHVKXPDQFRQVFLRXVQHVVDQGXQFRQVFLRXVQHVVUHVSHFWLYHO\7KLVFDQIRUPD
TXDQWDOFRPSXWLQJ*RGFORXGRISRUSK\ULRQVZLWKTXDQWDOFRPSXWLQJLQYROYLQJWRSRORJLFDO
VXSHUFRQGXFWLYLW\FDQPDNHXVHRIFXELWVRIJUDYLWRQDQGDQWLJUDYLWRQ
([WUDWHUUHVWULDOLQWHOOLJHQFHFDQH[LVWDVDVXSHURUJDQLVPFRQWUROOLQJDQGFUHDWLQJWKH
XQLYHUVH,QWKLVUHJDUGWKHFRQFHSWRIEODFNFORXGRIJDVHRXVH[WUDWHUUHVWULDOVXSHURUJDQLVP
SXWIRUZDUGE\)UHG+R\OHLVVLJQLILFDQW7KHEODFNFORXGVRILQWHUVWHOODUJDVDUHPDGHXSRI
K\GURJHQ 7KHUH DUH VPDOO SLHFHV RI VROLG PDWWHU DW WKH FHQWUH DQG DUH OLQNHG WR IRUP D
FRPSOH[ QHXURORJLFDO V\VWHP &ORXGV KDYH WKH FDSDFLW\ WR LQFUHDVH WKH EUDLQ VL]H DQG
FRPSOH[LW\DQGEHFRPHLQWHOOLJHQW$QHWZRUNRIH[WUDWHUUHVWULDOSRUSK\ULQPROHFXOHVILWVLQ
ZHOOZLWKWKLVFRQFHSW3RUSK\ULQVKDYHJRWDZDYHSDUWLFOHH[LVWHQFHDQGFDQDULVHIURPWKH
TXDQWDO IRDP RI JUDYLWDWLRQDO ZDYHV DQG DQWLJUDYLWDWLRQDO ZDYHV ZKLFK FUHDWHV KXPDQ
FRQVFLRXVQHVV DQG XQFRQVFLRXVQHVV UHVSHFWLYHO\ $ ODUJH RUJDQL]HG VHOIUHSOLFDWLQJ
LQIRUPDWLRQV\VWHPRISRUSK\ULQVFDQIXQFWLRQDVDH[WUDWHUUHVWULDOLQWHOOLJHQWRUJDQLVP7KH
LQWHOOLJHQWEODFNFORXGZKHQLWILQGVDOLIHOHVVLQWHUVWHOODUFORXGFUHDWHVVLPSOHEUDLQV\VWHP
E\WUDQVIHUWRWKHOLIHOHVVFORXG7KLVJLYHVDOLIHOHVVFORXGOLIHDQGLQWHOOLJHQFH%ODFNFORXGV
QHYHU GLVDSSHDU QHYHU DJH DQG QHYHU UHSURGXFH %ODFN FORXGV FDQ FRPPXQLFDWH ZLWK RWKHU
EODFNFORXGVE\UDGLRZDYHEUDLQZDYHV%ODFNFORXGVQHHGVWDUOLJKWWRPHWDEROL]HFKHPLFDO
VXEVWDQFHV 7KH SRUSK\ULQ DUUD\V FDQ XWLOL]H OLJKW WR VHOIUHSOLFDWH DQG SURSDJDWH %HLQJ
FORXGVRIJDVWKHVXSHURUJDQLVPFDQDVVXPHDQ\VKDSH:KHQWKHIRRGVXSSOLHVRIWKHEODFN

FORXGLQWKHLQWHUVWHOODUVSDFHIDOOVWKHEODFNFORXGDSSURDFKHVDVWDUDQGDVVXPHVDGLVFOLNH
VKDSHWRDEVRUEHQHUJ\IURPWKHVWDU7KHFORXGKDVWROHDYHWKHVWDUZLWKLQDVKRUWVSDQRI
WLPH RU LW ZLOO FRQGHQVH WR EHFRPH WKH SODQHW RI WKH VWDU 7KLV FDQ EH FRPSDUHG WR WKH
PROHFXODU TXDQWXP FRPSXWLQJ FORXGV RI 7DPXOLV 7KHVH DUH PDVVLYH LPPRELOH
H[WUDWHUUHVWULDOLQWHOOLJHQFHZKLFKVSUDZOVDQGVWUHWFKHVIRUKXQGUHGVDQGWKRXVDQGVRIPLOHV
LQ WKH LQWHUVWHOODU VSDFH 7KH\ FDQ EH FRPSDUHG ZLWK JURXS RI QHXURQV ZKLFK DUH
LQWHUFRQQHFWHG(DFKQRGHLQWKHQHWZRUNLVDEUDLQ7KLVJDVHRXVH[WUDWHUUHVWULDOLQWHOOLJHQFH
FDQDULVHIURPDQHPLVVLRQQHEXOD$QHPLVVLRQQHEXODLVRQHRIWKHKXJHFORXGVRIJDVDQG
GXVW WKDW IORDWV DURXQG LQ WKH LQWHUVWHOODU VSDFH ,Q WKLV FRXOG FKHPLFDO PROHFXOHV RI OLIH
FDUERQ PRQR[LGH IRUPDOGHK\GH PHWKDQRO K\GURJHQ VXOSKLGH VXOSKXU R[LGH VXOSKXU
GLR[LGHDQGK\GURJHQF\DQLGHDUHVHHQ/LIHDULVHVLQWKLVLQWHUVWHOODUFKHPLFDOFORXGRIJDV
3RUSK\ULQVDUULYHVZKLFKFDQVHOIUHSOLFDWHFDQDULVHLQWKLVFKHPLFDOLQWHUVWHOODUFORXGV7KLV
FUHDWHV D VXSHURUJDQLVP ZKLFK FDQ IRUP VXSHULQWHOOLJHQFH 7KH LQWHUVWHOODU JDV LV PRVWO\
PDGHXSRIK\GURJHQ7KHKLJKHUGHQVHUHJLRQVRIWKHLQWHUVWHOODUJDVFDQFRQGHQVHWRIRUP
VWDUVDQGSODQHWV7KHFROGHVWFORXGVIRUPORZPDVVVWDUVDQGJLDQWPROHFXODUFORXGVIRUPV
ODUJHPDVVVWDUV7KLVIRUPRIJDVHRXVH[WUDWHUUHVWULDOLQWHOOLJHQFHLVVHHQLQDWPRVSKHUHVRI
RWKHUSODQHWVLQWKHFORXG\RUJDQLFPROHFXODUDWPRVSKHUHDQGLQWHUVWHOODUVSDFH7KLVILWVLQ
ZLWKWKHFRQFHSWVRIKXPDQHYROXWLRQLQHDUWKZKHUHWKHSURWRSODVPLFERG\FDQJHWFRQYHUWHG
WR WKH URERWLF ERG\ DQG WKHQ WKH HQHUJ\ ERG\ 7KH FRRO RU KRW LQWHUVWHOODU JDV FDQ JHQHUDWH
QHWZRUNVRIH[WUHPRSKLOLFDUFKDHDZKLFKFDQVXUYLYHRQFDUERQGLR[LGHDQGK\GURJHQ7KH\
DUHFDOOHGWKHKDORSKLOLFDUFKDHDRUWKHPHWKDQRJHQLFDUFKDHD7KH\FDQOLYHLQH[WUHPHVRI
FROGKHDWDFLGDQGSUHVVXUH7KHSRUSK\ULQQHWZRUNFDQIRUPDWHPSODWHIRUWKHJHQHUDWLRQ
RI YLURLGV DQG SULRQV ZKLFK FDQ V\PELR]H WRJHWKHU WR IRUP DQ DUFKDHDO DQG KXJH
H[WUDWHUUHVWULDO LQWHUVWHOODU JDV DUFKDHDO QHWZRUN ZLWK LQWHOOLJHQFH FDQ DULVH 7KLV FDQ
FRQGHQVH WR JHQHUDWH VWDUV DQG SODQHWV DV ZHOO DV HYROYLQJ OLIH LQ SODQHWDU\ V\VWHPV 7KH
DUFKDHDO QHWZRUNV DUH FDSDEOH RI QXFOHDU IXVLRQ DQG ILVVLRQ UHDFWLRQ DQG FDQ SRZHU VWDU
V\VWHPVOLNHWKHVXQ,WLVH[WUHPHO\SODXVLEOHWKDWH[WUDWHUUHVWULDOLQWHOOLJHQFHLVDQLQWHUVWHOODU
DUFKDHDO FRORQ\ QHWZRUN DULVLQJ DELRJHQLFDOO\ RQ SRUSK\ULQ WHPSODWHV ZKLFK FDQ EH
JHQHUDWHG VXL JHQHULV IURP WKH TXDQWDO IRDP RI JUDYLWDWLRQDO ZDYHV DQG DQWLJUDYLWDWLRQDO
ZDYHV7KHLQWHUVWHOODUGXVWIRUPVVWDUVDQGSODQHWVDQGWKHPDJQHWRWDFWLFDUFKDHDJHQHUDWHG
LQWHUJDODFWLFPDJQHWLFILHOGVSOD\VDUROHLQWKHJHQHUDWLRQRIVWDUDQGSODQHWDU\V\VWHPV7KH
JLDQWPROHFXODUSRUSK\ULQFORXGVDQGDUFKDHDOQHWZRUNVDUHH[WUDWHUUHVWULDOLQWHOOLJHQFHWKDW
SOD\VDFUXFLDOUROHLQVWDUIRUPDWLRQDQGIRUPDWLRQRISODQHWDU\V\VWHPV7KHH[WUDWHUUHVWULDO
LQWHOOLJHQFHSRUSK\ULQQHWZRUNDQGDUFKDHDOQHWZRUNFDQFRPPXQLFDWHZLWKDQ\SDUWRIWKH

XQLYHUVH E\ WKH SKHQRPHQD RI TXDQWDO HQWDQJOHPHQW ,QWHUVWHOODU JDV LV IRUPHG RI JUDLQV RI
FDOFLILHG QDQRDUFKDHD 7DPXOLV KDV SRVWXODWHG PROHFXODU TXDQWDO FRPSXWLQJ FORXGV WKDW
DEVRUEPDJQHWLFDQGOLJKWHPLVVLRQVIURPSODQHWDQGVWDUVFRPSXWHLQIRUPDWLRQDQGPRYHLQ
VSDFH E\ XVLQJ OLJKW SUHVVXUH 7KH FORXGV XVH SKRWRDFWLYH PROHFXOHV IRU PROHFXODU TXDQWDO
FRPSXWLQJ7KH\FDQFRQYHUWOLJKWHPLVVLRQVWRPDJQHWLFIORSV7KHPDJQHWLFIORSVLQWHUDFW
DQG FRQWURO WKH FHQWUDO JHQHUDWLQJ HOHPHQWV RI TXDQWXP ELWV RI WKH PROHFXODU TXDQWXP
FRPSXWLQJ FORXGV 6XFK FORXGV FDQ H[LVW LQ D FRKHUHQW VWDWH DW ORZ WHPSHUDWXUH RI WKH
LQWHUVWHOODU JDV 3RUSK\ULQ QHWZRUNV DUH SKRWRDFWLYH PROHFXOHV DQG FDQ JHQHUDWH PROHFXODU
TXDQWDO FRPSXWLQJ FORXGV ZKLFK FDQ DEVRUE PDJQHWLF DQG OLJKW HPLVVLRQV IURP SODQHW DQG
VWDUV FRPSXWH LQIRUPDWLRQ DQG PRYH LQ VSDFH E\ XVLQJ OLJKW SUHVVXUH 7KH SRUSK\ULQ
QHWZRUNV FDQ DELRJHQLFDOO\ JHQHUDWH DUFKDHDO EDFWHULDO PDVVLYH H[WUDWHUUHVWULDO QHWZRUN
LQWHOOLJHQFH7KLVIRUPOHVVPDVVOLYLQJLQVSDFHREWDLQVLWVHQHUJ\IURPWKHOLJKWRIWKHVWDUV
DQGFRPPXQLFDWHVZLWKLWVHOIDQGRWKHUIRUPVRIOLJKWVE\UDGLRZDYHV7KHLQWHUVWHOODUJDVLV
DQDORJRXV WR EORRG WKH KHDUG DQG NLGQH\V DUH HOHFWURPDJQHWLF DQG WKHUH LV D FRPSOH[
QHXURORJLFDO V\VWHP RI WKH EUDLQ 7KLV FORXG RI LQWHUVWHOODU JDV SRUSK\ULQ QHWZRUNV DQG
DUFKDHDOFRORQLHVFDQFRQYHUWLQWRVWDUVDQGSODQHWDU\V\VWHPE\FRQGHQVDWLRQ7KHHQHUJHWLFV
IRU VWDU V\VWHPV FRPHV IURP ELRORJLFDO IXVLRQ DQG ILVVLRQ UHDFWLRQ RFFXUULQJ LQ DUFKDHDO
QHWZRUNV 7KH DUFKDHDO QHWZRUNV RI H[WUDWHUUHVWULDO LQWHOOLJHQFH FDQ HQJLQHHU FKDQJHV LQ
KXPDQPLQGDQGFLYLOL]DWLRQ
7KHH[WUDWHUUHVWULDOLQWHOOLJHQFHLVDQDUFKDHDOFRORQ\QHWZRUN,WDULVHVRQSRUSK\ULQV
ZKLFK DUH JHQHUDWHG VXL JHQHULV RQ WKH TXDQWDO IRUP 7KH SRUSK\ULQ QHWZRUNV FDQ VHOI
UHSOLFDWHDQGFDQIRUPDWHPSODWHIRUWKHIRUPDWLRQRIYLURLGVDQGSULRQV7KHDUFKDHDOFRORQ\
QHWZRUNVDUHH[WUHPRSKLOLFQHWZRUNVDQGFDQVXUYLYHLQWKHHQYLURQPHQWRIH[WUHPHFOLPDWHV
RIPDVVDQG9HQXVDVZHOODVLQLQWHUVWHOODUJDV7KHH[WUHPRSKLOLFDUFKDHDOH[WUDWHUUHVWULDO
QHWZRUN FDQ VHFUHWH 51$ YLURLGV ZKLFK IRUP 51$ YLURLGDO TXDVLVSHFLHV FRQVRUWLD 7KH
51$YLURLGDOTXDVLVSHFLHVFRQVRUWLDFDQEHHGLWHGE\DUFKDHDOGLJR[LQJLYLQJLGHQWLW\DQG
VSHFLDOL]DWLRQ WR WKH QHWZRUN 7KH DUFKDHDO H[WUDWHUUHVWULDO LQWHOOLJHQFH LPSDFWV RQ HDUWK E\
PHWHRULWLF VKRZHUV ZKLFK JLYH QHZ FRVPLF JHQHV WR WKH HDUWK 7KLV LV WKH IRUP RI FRVPLF
JHQHWUDQVIHU7KHHDUWKLVSRSXODWHGE\KRPRVDSLHQVDQGWKHWUDQVIHURIDUFKDHDODQG51$
YLURLGDO JHQHV JHQHUDWHV WKH KRPR QHDQGHUWKDOLV 7KH\ FDQ EH FRPSDUHG WR WKH K\EULGV
GHVFULEHGLQ%LEOLFDOOLWHUDWXUHDQGRWKHUUHOLJLRXV WH[WV DV WKH IDOOHQ DQJHOV QHSKLOP RU WKH
6XPHULDQ DQQXQDNL 7KHVH DUH JHQHUDWHG E\ WUDQVIHU RI FRVPLF JHQHV E\ DUFKDHDO QHWZRUNV
PHGLDWHGE\PHWHRULWLFLPSDFWV7KH1HDQGHUWKDOK\EULGVWKDWDUHJHQHUDWHGDUHVXVFHSWLEOHWR

GLVHDVHV OLNH GHJHQHUDWLRQ DXWRLPPXQH GLVHDVH PHWDEROLF V\QGURPH FDQFHU DQG QHZ YLUDO
LQIHFWLRQV7KHK\EULGVDUHPDWULDUFKDOJHQGHUHTXDOKDYHDOWHUQDWHVH[XDOSUDFWLFHVDXWLVWLF
DOWUXLVWLF VSLULWXDO DQG ZLWK H[WUDVHQVRU\ SRZHUV 7KHVH FDQ EH FDOOHG DV *RG DVWURQDXWV RI
DQFLHQWOLWHUDWXUH7KHILUVWHSLVRGHRIWUDQVIHURIDUFKDHDODQG51$YLURLGDOJHQHVRFFXUUHG
LQ WKH LFH DJH DQG VHFRQG WUDQVIHU LV RFFXUULQJ LQ WKH DJH RI JOREDO ZDUPLQJ 7KH
1HRQHDQGHUWKDOVSHFLHVRIJOREDOZDUPLQJDJHLVSURGXFHGE\FRPHWDU\WUDQVIHURIDUFKDHDO
DQG 51$ YLURLGDO JHQHV 7KH H[WUDWHUUHVWULDO LQWHOOLJHQFH RI H[WHQVLYH VHOIUHSOLFDWLQJ
SRUSK\ULQQHWZRUNVDQGDUFKDHDOQHWZRUNVJHQHUDWHGDELRJHQLFDOO\LQWKHLQWHUVWHOODUVSDFHLV
FRPSDUDEOHWRDQH[WHUQDO*RGOLNHIRUFH7KHSRUSK\ULQQHWZRUNVFDQH[LVWERWKDVZDYHDQG
SDUWLFOHDQGFDQDULVHIURPWKHTXDQWDOIRDPRIJUDYLWDWLRQDOZDYHVRIFRQVFLRXVQHVVDQGDQWL
JUDYLWDWLRQDO ZDYHV RI XQFRQVFLRXVQHVV ZKLFK FDQ ODWHU JHQHUDWH H[WHQVLYH H[WUDWHUUHVWULDO
LQWHOOLJHQFHRIQDQRDUFKDHDOQHWZRUNV7KHH[WUDWHUUHVWULDOLQWHOOLJHQFHRISRUSK\ULQQHWZRUNV
JHQHUDWHG VXL JHQHULV IURP WKH TXDQWDO IRUP FDQ EH FDOOHG WKH ORWXV RI %UDKPD 7KH
JUDYLWDWLRQDO ZDYHV DQG DQWLJUDYLWDWLRQDO ZDYHV RI FRQVFLRXVQHVV DQG XQFRQVFLRXVQHVV
FUHDWH PDWWHU E\ WKH SKHQRPHQD RI VRQLOXPLQHVFHQFH 7KLV IRUPV ZKDW LV FDOOHG DV WKH
FROOHFWLYHXQFRQVFLRXVRI-XQJRUWKHPRQDGVRI/HLEQLW]RUWKHSDQSV\FKLVPZKHUHWKHUHLV
QRGLVWLQFWLRQEHWZHHQWKHFRQVFLRXVQHVVRIOLYLQJDQGQRQOLYLQJSXWIRUZDUGE\WKH*UHHNV
+LQGXVDQGUHFHQWO\H[SRXQGHGE\&KDOPHUV
7KHH[WUDWHUUHVWULDOLQWHOOLJHQFHLVDQDUFKDHDOFRORQ\QHWZRUNFUHDWHGRQDSRUSK\ULQ
QHWZRUNWKDWDULVHVVSRQWDQHRXVO\E\ZDYHSDUWLFOHWUDQVIRUPDWLRQIURPWKHTXDQWDOIRDPRI
JUDYLWDWLRQDOZDYHVRIFRQVFLRXVQHVVDQGDQWLJUDYLWDWLRQDOZDYHVRIXQFRQVFLRXVQHVV7KH
ZKROH SURFHVV LV DELRJHQHWLF DQG LV D FUHDWLRQ ZLWKRXW D FUHDWRU 7KH SRUSK\ULQ DUUD\V FDQ
VHOIUHSOLFDWHVWRUHLQIRUPDWLRQDQGKDUYHVWPDJQHWLFDQGOLJKWHQHUJ\IURPWKHVWDUV,WFDQ
FRQYHUW OLJKW HQHUJ\ WR PDJQHWLF IORSV 7KH PDJQHWLF IORSV LQWHUDFW DQG FRQWURO WKH FHQWUDO
JHQHUDWLQJHOHPHQWRIWKHTXDQWXPELWRIWKHTXDQWXPFRPSXWHU7KHVHDUHDQDORJRXVWR
WKHEODFNFORXGRI)UHG+R\OHDQGWKHPROHFXODUTXDQWDOFRPSXWLQJFORXGVRI7DPXOLV/RQJ
ODVWLQJFRKHUHQWTXDQWDOVWDWHVDUHSRVVLEOHLQWKHORZWHPSHUDWXUHRIWKHLQWHUSODQHWDU\GXVW
7KH SRUSK\ULQ QHWZRUN DQG DUFKDHDO QHWZRUN H[WUDWHUUHVWULDO LQWHOOLJHQFH FDQ FRPPXQLFDWH
ZLWK LWVHOI DQG RWKHUV E\ UDGLR ZDYHV 7KH LQWHUVWHOODU JDV ZLWK WKLV SRUSK\ULQ QHWZRUN DQG
DUFKDHDOQHWZRUNFDQFRQGHQVHDWGHQVHVLWHVLQWRVWDUVDQGSODQHWVDQGJLYHULVHWROLIHIRUPV
LQWKRVHV\VWHPV7KHSRUSK\ULQQHWZRUNDQGDUFKDHDOQHWZRUNFDQVXUYLYHLQWKHH[WUHPHVRI
WHPSHUDWXUH RI SODQHWDU\ V\VWHPV OLNH 0DUV DQG 9HQXV DQG FDQ LQIOXHQFH WKH EHKDYLRU DQG
IXWXUHRIKXPDQFLYLOL]DWLRQZLWKZKLFKWKH\FDQFRPHLQWRFRQWDFWYLDWUDQVIHUE\PHWHRULF

LPSDFWV 6XFK PHWHRULF LPSDFWV RFFXUUHG LQ WKH LFH DJH DQG DWRWKHU IUHTXHQW HSRFKV LQ WKH
SODQHW¶VKLVWRU\7KHLPSDFWLQWKH,FHDJHJDYHULVHWR1HDQGHUWKDOK\EULGVZLWKDUFKDHDODQG
51$ YLURLGDO V\PELRVLV E\ SDUDVLWL]LQJ ZLWK KRPR VDSLHQV LQ WKH (XUDVLDQ 6WHSSHV 7KH
1HDQGHUWKDOK\EULGVKDGGHIHFWLYHFRUWLFDOIXQFWLRQDQGKDYHDGRPLQDQWFHUHEHOODUIXQFWLRQ
ZLWKDGLIIHUHQWEHKDYLRXUDOFRGH7KH\ZHUHPDWULDUFKDOLQWKHVHQVHWKHQHZHUJHQHVZHUH
RIFRPHWDU\RULJLQ0DOHVDQGSDWHUQDOUROHVZHUHLQVLJQLILFDQW7KLVJDYHULVHWRWKHIHPDOH
GRPLQDQWVRFLHW\7KH1HDQGHUWKDOK\EULGVEHFDXVHRILQWHUPLQJOLQJZLWKDUFKDHDODQG51$
YLURLGDOJHQHVZHUHVXVFHSWLEOHWRDXWRLPPXQHLQIHFWLRQGHJHQHUDWLRQVWXPRXUVPHWDEROLF
V\QGURPH DXWLVP VFKL]RSKUHQLD DQG GHYLDQW VH[XDO EHKDYLRU 7KLV UHVXOWHG LQ UDSLG
HOLPLQDWLRQ RI WKH 1HDQGHUWKDO K\EULGV IURP WKH VRFLHW\ RI KRPR VDSLHQV 7KH 1HDQGHUWKDO
K\EULGV RZLQJ WR WKH DUFKDHDO DQG 51$ YLURLGDO JHQHV ZHUH FUHDWLYH DXWLVWLF VDYDQWLF
VSLULWXDO LQYHQWLYH LQWXLWLYH VFLHQWLILF DUWLVWLF DQG ZHUH WKH GRPLQDQW GULYHUV RI VRFLHW\
7KH\EHFDPHWKHOHDGHUVRIVRFLHW\DQG*RGOLNHFKDUDFWHUVGLUHFWLQJWKHIORZRIFLYLOL]DWLRQ
7KLV ZDV SRVVLEO\ PHGLDWHG E\ WKH LQWHUYHQWLRQ RI WKH LQWHUVWHOODU SRUSK\ULQ QHWZRUN DQG
DUFKDHDO FRORQ\ H[WUDWHUUHVWULDO LQWHOOLJHQFH LQ WKH LQWHUJDODFWLF VSDFH ZKLFK FRQWUROV WKH
XQLYHUVHDQGKDVD*RGOLNHIXQFWLRQ6XFKSRUSK\ULQQHWZRUNVDQGDUFKDHDOFRORQ\QHWZRUNV
RIJLJDQWLFSURSRUWLRQVDUHIHDVLEOHLQWKHDWPRVSKHUHRIRWKHUSODQHWVLQFOXGLQJHDUWK7KHUH
LV LQFUHDVHG JURZWK RI HQGRV\PELRWLF DUFKDHD LQ KRPR VDSLHQ SRSXODWLRQ RZLQJ WR JOREDO
ZDUPLQJ 7KH KXPDQ ERG\ IXQFWLRQV DV D ]RPELH RU FDVWH IRU WKH JURZWK RI WKH DUFKDHDO
V\PELRQWVZKRWDNHRYHUWKHIXQFWLRQRIWKHKXPDQEUDLQDQGLWVDFWLRQV7KLVKDVUHVXOWHGLQ
WKHUHFHQWFKDQJHVLQVRFLHW\ZLWKJOREDOL]DWLRQWHUURULVPWKHULVHRIVSLULWXDOLW\DQDUFKLVP
GRPLQDWLRQE\FHUWDLQVWDWHVODFNRIGHPRFUDF\WKHULVHRIFUHDWLYLW\LQWHFKQRORJ\DUWDQG
FXOWXUH$QHZJHQHUDWLRQRI1HRQHDQGHUWKDOK\EULGVDUHEHLQJJHQHUDWHGZKLFKDUHDQDUP\
RI ]RPELHV IRU DQ H[WHQGHG DUFKDHDO WHUUHVWULDO LQWHOOLJHQW QHWZRUN 7KH DUFKDHDO WHUUHVWULDO
LQWHOOLJHQW QHWZRUN DV DQ H[WHQVLRQ RI WKH H[WUDWHUUHVWULDO LQWHUVWHOODU VSDFH SRUSK\ULQ DQG
DUFKDHDO QHWZRUN LV WDNLQJ RYHU WKH ZRUOG DQG LWV FXOWXUH 7KLV ZLOO KDYH IDU UHDFKLQJ
FRQVHTXHQFHV WR KXPDQ H[LVWHQFH DQG IRU WKH GHVWUXFWLRQ RI WKH KXPDQ ]RPELHV DV ZH VHH
RXUVHOYHVWRGD\7KHDUFKDHDOFRORQ\WHUUHVWULDOQHWZRUNZLOOVXUYLYHDQGWKHJOREDOZDUPLQJ
ZLOOGHVWUR\WKHKXPDQ]RPELHV7KHKXPDQ]RPELHFUHDWHGRUHQJLQHHUHGEHKDYLRXUDODQG
OLIH VW\OH FKDQJH OHDGLQJ WR JOREDO ZDUPLQJ OHDGV WR H[WHQVLRQ RI JLJDQWLF JURZWK RI WKH
WHUUHVWULDO LQWHOOLJHQW DUFKDHDO QHWZRUN 7KH JURZWK RI WKH WHUUHVWULDO LQWHOOLJHQW DUFKDHDO
QHWZRUN LQ WKH RFHDQV ZLOO OHDG WR UHOHDVH RI PHWKDQH JDV ULVH RI RFHDQ OHYHOV WVXQDPLV
HDUWKTXDNHV GHVWUXFWLRQ RI WKH HDUWK¶V HFRORJ\ E\ JOREDO ZDUPLQJ DQG D FLYLOL]DWLRQ RI
]RPELHVDVVXFK7KHKRPRVDSLHQVFDQEHFRQVLGHUHGDV]RPELHVFRQWUROOHGE\DPDWUL[RI

WHUUHVWULDO DQG H[WUDWHUUHVWULDO SRUSK\ULQ DQG DUFKDHDO FRORQ\ QHWZRUN 7KLV LV WKH ZRUOG RI
PD\DDQGWKHKXPDQ]RPELHVFDQFXWWKURXJKWKHLOOXVLRQVDQGFRQQHFWZLWKODUJHUZRUOGRI
WHUUHVWULDO DQG H[WUDWHUUHVWULDO LQWHOOLJHQFH FDOOHG *RGV :H FDQ EHFRPH SV\FKRQDXWV DQG
FRQQHFW ZLWK WKH ZRUOG RI H[WUDWHUUHVWULDO DQG WHUUHVWULDO LQWHOOLJHQFH ([WUDWHUUHVWULDO DQG
WHUUHVWULDO LQWHOOLJHQFH RI SRUSK\ULQ QHWZRUNV DQG DUFKDHDO FRORQ\ QHWZRUN FUHDWHG RQ
SRUSK\ULQ WHPSODWHV DUH LWVHOI LOOXVRU\ 7KH SRUSK\ULQ DQG WHPSODWH PHGLDWHG QDQRDUFKDHDO
FRORQ\ QHWZRUN KDYH D ZDYHSDUWLFOH H[LVWHQFH DQG FDQ PHUJH LQWR WKH TXDQWDO IRDP RI
QRWKLQJQHVV ZLWK LWV JUDYLWDWLRQDO ZDYHV JHQHUDWLQJ FRQVFLRXVQHVV DQG DQWLJUDYLWDWLRQDO
ZDYHVJHQHUDWLQJXQFRQVFLRXVQHVV7KHWHUUHVWULDODQGH[WUDWHUUHVWULDOSRUSK\ULQDQGDUFKDHDO
FRORQ\QHWZRUNZLWKLWV51$YLURLGVTXDVLVSHFLHVFRQVRUWLDDUHYDULDEOHIURPWLPHWRWLPH
7KHDUFKDHDVHFUHWHVGLJR[LQZKLFKHGLWVWKH51$DQGFKDQJHWKHFKDUDFWHURIWKHQHWZRUNLQ
UHVSRQVHWRHQYLURQPHQW7KHQHWZRUNRIWHUUHVWULDODQGH[WUDWHUUHVWULDOLQWHOOLJHQFHRZLQJWR
WKH H[WUHPH YDULDELOLW\ RI WKH 51$ TXDVLVSHFLHV FRQVRUWLD PHGLDWHG HGLWLQJ IRUPV
LQWHOOLJHQFH DQG FRQVFLRXVQHVV ZKLFK FKDQJHV IURP WLPH WR WLPH LQ FRQVRQDQFH ZLWK WKH
KXQGUHG WKRXVDQG RU PRUH VXSHULPSRVHG SRVVLELOLWLHV RI WKH TXDQWDO IRDP 7KH\ DUH WKH
PRPHQWDU\ FRQVFLRXVQHVV DQG QRW D VLQJOH ZKROHVRPH VWUXFWXUH 7KH FRQVFLRXVQHVV RI WKH
XQLYHUVH RI DOO REMHFWV OLYLQJ DQG QRQOLYLQJ LV LQWHUFRQQHFWHG IRUPLQJ ZKDW LV FDOOHG DV D
FROOHFWLYH XQFRQVFLRXV RU WKH ZRUOG RI 0D\D RU SDQSV\FKLVP 7KHUH LV QR GHDWK DQG
HYHU\WKLQJ LV XQLYHUVDO DQG HWHUQDO &KDQJH LQ FRQVFLRXVQHVV RFFXUV HYHU\ VHFRQG DQG
HYHU\WKLQJ LV PRPHQWDU\ DQG DW WKH VDPH WLPH ORQJ ODVWLQJ $OO WKH PRPHQWDU\ VWDJHV RI
XQLYHUVDOFRQVFLRXVQHVVRU6DPVDUDVDUHIL[HGDQGDUHQRWVXVFHSWLEOHWRFKDQJH7KHFKDQJHV
LQWKHTXDQWDOIRDPRIWKHXQLYHUVDOFRQVFLRXVQHVVJHWUHIOHFWHGLQWKHSDUWLFXODWHWHUUHVWULDO
DQGH[WUDWHUUHVWULDOLQWHOOLJHQFHRISRUSK\ULQDQGDUFKDHDOFRORQ\QHWZRUNZKLFKLVVXEMHFWHG
WRFRQWLQXRXVXQLQWHUUXSWHGHGLWLQJE\WKHFKDQJHVLQWKHFRGRQIHDWXUHRIWKH51$YLURLGV
7KXV WKH TXDQWDO SRVVLELOLWLHV RI WKH XQLYHUVDO FRQVFLRXVQHVV SDUDOOHO WKH HYHU FKDQJLQJ
VWUXFWXUDO IHDWXUHV RI WKH WHUUHVWULDO DQG H[WUDWHUUHVWULDO LQWHOOLJHQFH RI SRUSK\ULRQV DUFKDHD
DQG51$YLURLGDOQHWZRUN
7KH FRQVWDQW WUDQVIHU RI FRPHWDU\ JHQHV IURP WKH LQWHUVWHOODU H[WUDWHUUHVWULDO
LQWHOOLJHQFHRIDUFKDHDDQG51$YLURLGVFUHDWHGRQDSRUSK\ULQWHPSODWHVJHQHUDWHGIURPWKH
TXDQWDO IRDP RI FRQVFLRXVQHVV ZKLFK FDQ EH GHVFULEHG DV *RG GXH WR LPSDFW RI PHWHRUV
FKDQJHVWKHFXOWXUHFLYLOL]DWLRQEHKDYLRUVH[XDOLW\SROLWLFVHFRQRPLFVDQGHQYLURQPHQWRI
WKHKRPRVDSLHQVDQGK\EULGSRSXODWLRQLQSODQHWHDUWK7KLVFRPHWDU\JHQHLQWHUDFWVZLWKWKH
WHUUHVWULDO EDFWHULD DQG YLUXVHV FUHDWLQJ QHZ EDFWHULD DQG YLUXVHV DQG QHZ HSLGHPLFV ZKLFK

GHILQHSRSXODWLRQVDQGJLYHWKHPLGHQWLW\7KHQHZEDFWHULDDQGYLUXVHVRISODQWDQGDQLPDO
RULJLQ JLYH ULVH WR PDVV H[WLQFWLRQV DQG FKDQJH WKH HFRORJ\ RI WKH SODQHW $QG D PDVVLYH
JURZWK RI WHUUHVWULDO DUFKDHDO FRORQ\ QHWZRUN LQ RFHDQV FDQ OHDG WR HDUWKTXDNH WVXQDPLV
JOREDO ZDUPLQJ GU\LQJ XS RI HDUWK IORRGLQJ DQG FDWDVWURSKLF H[WLQFWLRQ RI WKH KXPDQ
]RPELH FLYLOL]DWLRQ DV ZH NQRZ WRGD\ 7KH H[WUDWHUUHVWULDO LQWHOOLJHQFH DQG WHUUHVWULDO
LQWHOOLJHQFH RI SRUSK\ULQ DQG DUFKDHDO FRORQ\ QHWZRUN ZLOO VXUYLYH LQ 0DUV (DUWK 9HQXV
LQWHUVWHOODUVSDFHDQG6XQ7KH\DUHYLFWRULRXVHWHUQDODQG*RGOLNH7KH\DUHOLNHDVWURQDXWV
IURPWKHRXWHUVSDFHEXWRQO\EDFWHULDOQHWZRUNDVWURQDXWV7KH\FDQEHFRQVLGHUHGDVIDOOHQ
DQJHOVVHQGE\WKHH[WUDWHUUHVWULDOLQWHOOLJHQFHWRPRGXODWHWKHFLYLOL]DWLRQRISODQHWVDQGVWDUV
RIWKHXQLYHUVHDQGFUHDWLRQRIK\EULG]RPELHV7KHK\EULG]RPELHFLYLOL]DWLRQVDUHGHVWUR\HG
RQFHWKHXVHLVRYHU7KLVKDSSHQVWRWKH6XPHULDQFLYLOL]DWLRQWKH+DUDSSDQFLYLOL]DWLRQWKH
(J\SWLDQFLYLOL]DWLRQDQG$]WHFFLYLOL]DWLRQ7KLVLVKDSSHQLQJWRKRPRVDSLHQFLYLOL]DWLRQDW
SUHVHQW FUHDWHG E\ WKH FULVLV RI JOREDO ZDUPLQJ GXH WR WHUUHVWULDO DUFKDHDO FRORQ\ QHWZRUNV
7KH]RPELHVZLOOHQGEXWWKHPDVWHUVDQGWKH*RGVRIH[WUDWHUUHVWULDOSRUSK\ULQDQGDUFKDHDO
FRORQ\QHWZRUNVXUYLYH7KHQHWZRUNVDUHSURWRSODVPLFDQGURERWLFERGLHVDQGFDQJREDFN
WRWKHLUHQHUJ\ERGLHVRIQRWKLQJQHVVDQGPHUJHLQWRWKHTXDQWDOIRDP7KLVLVWKHZRUOGRI
0D\DZKHUHQRWKLQJH[LVWVDQGZHFDQFXWWKURXJKWKHLOOXVLRQVDQGUHDFKWKHZRUOGRI0D\D
DQGFRQQHFWZLWKLW7KLVPD\SURYLGHDKRSHIRUVDYLQJWKHKXPDQFLYLOL]DWLRQRI]RPELHV
ZLWKWKHLUDUFKDHDOFRORQ\QHWZRUNVLQFUHDVLQJDWDVWURQRPLFDOVSDFHVDQGVSHHGLQJRQWRDQ
HQGRIFDWDVWURSKH
7KH H[WUDWHUUHVWULDO DUFKDHDO QHWZRUN ZLWK LWV VHFUHWHG 51$ YLURLGV JLYHV ULVH WR
HXNDU\RWHV SURNDU\RWHV PXOWLFHOOXODU RUJDQLVPV SULPDWHV DQG KXPDQV 7KH DUFKDHDO
QHWZRUNVHFUHWHG51$YLURLGVDUHHGLWHGE\DUFKDHDOGLJR[LQSURGXFLQJLGHQWLW\IRUGLIIHUHQW
51$ YLURLGDO TXDVLVSHFLHV FRQVRUWLD 7KH 51$ YLURLGV FDQ JHW FRQYHUWHG LQWR
FRPSOHPHQWDU\ '1$ VHTXHQFHV DQG JHW LQVHUWHG LQWR DUFKDHDO JHQRPH 7KLV SURGXFHV
YDU\LQJ GLYHUVLW\ RI H[WUDWHUUHVWULDO DQG WHUUHVWULDO SRUSK\ULQ DQG DUFKDHDO LQWHOOLJHQW
QHWZRUNV7KHKXPDQDQGRWKHUPXOWLFHOOXODURUJDQLVPVDUHVWUXFWXUHGE\WKHHQGRV\PELRWLF
H[WUDWHUUHVWULDODQGWHUUHVWULDODUFKDHDOQHWZRUNWRSURGXFHVSHFLHVHYROXWLRQDQGLGHQWLW\7KH
HXNDU\RWHV DQG SURNDU\RWHV HYROYH IURP WKH DUFKDHD E\ JHQRPLF FKDQJHV LQGXFHG E\
LQWHJUDWHG FRPSOHPHQWDU\ VHTXHQFHV RI GLJR[LQ HGLWHG DUFKDHDO 51$ YLURLGV 7KXV WKH
H[WUDWHUUHVWULDO DQG WHUUHVWULDO DUFKDHDO LQWHOOLJHQW VSHFLHV QHWZRUN LV FDSDEOH RI HYROYLQJ WR
SURNDU\RWHV HXNDU\RWHV PXOWLFHOOXODU RUJDQLVPV SULPDWHV SODQWV DQLPDOV DQG KXPDQRLGV
7KHVH DUH DOO ]RPELHV RU VWUXFWXUHV IRU WKH H[WUDWHUUHVWULDO DQG WHUUHVWULDO DUFKDHDO DQG

SRUSK\ULQ LQWHOOLJHQW QHWZRUNV WR VXUYLYH DQG XWLOL]H 7KH WHUUHVWULDO DQG H[WUDWHUUHVWULDO
SRUSK\ULQ DQG DUFKDHDO QHWZRUNV FDQ KDYH D ZDYHSDUWLFOH GXDOLW\ DQG FDQ PHUJH LQWR WKH
TXDQWDO IRDP DQG H[LVW DV LQWHOOLJHQW TXDQWDO EHLQJV 7KH\ FDQ EH FDOOHG DV WHUUHVWULDO DQG
H[WUDWHUUHVWULDOLQWHOOLJHQWTXDQWDOEHLQJVZLWKPXOWLSOHVXSHULPSRVHGSRVVLELOLWLHVFRKDELWLQJ
PXOWLYHUVHVDWWKHVDPHSRLQWRIWLPH7KLVUDLVHVWKHTXHVWLRQRIWKHQDWXUHRIOLIHLWVHOI/LIH
LV D YLUWXDO UHIOHFWLRQ RI WKH SRUSK\ULQ QHWZRUNV LQWHOOLJHQW VSHFLHV WKDW DULVHV RXW RI WKH
TXDQWDO IRDP RI QRWKLQJQHVV DQG FDQ GLVVROYH LQWR LW 7KLV FRQVWLWXWHV ZKDW LV FDOOHG DV WKH
ZRUOG RI 0D\D 7KHUH LV RQO\ RQH OLIH IRUP WKH WHUUHVWULDO DQG H[WUDWHUUHVWULDO LQWHOOLJHQW
SRUSK\ULQ DQG DUFKDHDO QHWZRUNV ZKLFK FDQ KDYH DQ HQHUJ\ H[LVWHQFH RU D SDUWLFXODWH
H[LVWHQFH$OORWKHUOLIHIRUPVDQGLQDQLPDWHIRUPVDULVHRXWRILWDQGDUHUHIOHFWLRQVRILWDQG
LQWHUFRQQHFWHG WKURXJKRXW WKH XQLYHUVH E\ WKH SKHQRPHQD RI TXDQWDO VSLQ DQG TXDQWDO
HQWDQJOHPHQWDQGQRQORFDOLQWHUDFWLRQ(YHU\WKLQJLQWKHXQLYHUVHH[LVWVHYHU\ZKHUHDWHYHU\
SRLQW7LPHLVDQLOOXVLRQ
7KHWHUUHVWULDODQGH[WUDWHUUHVWULDOQHWZRUNVRISRUSK\ULQDUUD\VDQGDUFKDHDOQHWZRUNV
FDQLQIOXHQFHHDUWKE\EHLQJWUDQVSRUWHGWRWKHWHUUHVWULDOKDELWDWE\PHWHRULWLFVKRZHUV7KLV
LQGXFHVIUHVKLQIXVLRQVRIFRPHWDU\JHQHVLQWRHDUWKDQGRWKHUSODQHWDU\V\VWHPV7KHVHDUH
JHQHVIURPWKHH[WUDWHUUHVWULDOSRUSK\ULQDQGDUFKDHDOQHWZRUNVZKLFKDULVHRXWRIWKHTXDQWDO
IRDPDQGLQGXFHWKHIRUPDWLRQRIVWDUV\VWHPVDQGSODQHWDU\V\VWHPV7KH\FDQEHFRPSDUHG
WR D FROOHFWLRQ RI ORWXVHV LQ WKH RFHDQ RI JDOD[\ 7KH ORWXVHV EHLQJ SRUSK\ULQ DUUD\V ZKLFK
KDYH D ZDYH DQG SDUWLFOH H[LVWHQFH 7KLV FDQ EH FDOOHG DV ORWXV RI %UDKPD RU WKH *RG RI
FUHDWLRQ LQ D PHWDSKRULFDO VHQVH 7KH LQIXVLRQ RI FRPHWDU\ JHQHV IURP WKLV H[WUDWHUUHVWULDO
SRUSK\ULQDQGDUFKDHDOLQWHOOLJHQWQHWZRUNVZLWK*RGOLNHTXDOLWLHVLQWRWKHHDUWKDIIHFWVWKH
KRPRVDSLHQDQGSULPDWHSRSXODWLRQ7KLVUHVXOWVLQFUHDWLRQRIQHZHUVSHFLHVZLWK*RGOLNH
FKDUDFWHULVWLFV ZKR DVVXPH OHDGHUVKLS LQ VRFLHWLHV OLNH *DXWKDPD %XGGKD DQG -HVXV &KULVW
7KH\ DUH LQGXFHG E\ FRPHWDU\ JHQHV IURP WKH H[WUDWHUUHVWULDO SRUSK\ULQ DQG DUFKDHDO
LQWHOOLJHQW QHWZRUN 6XFK K\EULG SRSXODWLRQV LQ WKH HDUWK FDQ EH FDOOHG DV 1HDQGHUWKDOV RU
1HRQHDQGHUWKDOV GXH WR FKDQJHG FKDUDFWHULVWLFV FRQVHTXHQW WR H[WUDWHUUHVWULDO DUFKDHDO
V\PELRVLV7KH\IRUPOHDGHUVLQVRFLHW\DQGJXLGHVFLYLOL]DWLRQ&LYLOL]DWLRQSURJUHVVHVGXH
WRLQIXVLRQRIJHQHVIURPWKHH[WUDWHUUHVWULDOLQWHOOLJHQWSRUSK\ULQDQGDUFKDHDOQHWZRUNV7KH
DSSHDUDQFHRIPHWHRUVDQGFRPHWVVLJQLI\WKHLQIXVLRQRIFRPHWDU\JHQHVIURPWKHXOWLPDWH
H[WUDWHUUHVWULDO SRUSK\ULQ DQG DUFKDHDO QHWZRUN 7KHVH H[WUDWHUUHVWULDO SRUSK\ULQ DUFKDHDO
QHWZRUNVLQWKHLQWHUVWHOODUJDVFDQDOVRFRQGHQVHWRIRUPVWDUVDQGSODQHWV7KHVHQHWZRUNV
DVVDLGEHIRUHKDYHDZDYHHQHUJHWLFIRUPDQGDSDUWLFXODWHIRUPDQGDUHWKHPRGHRIFUHDWLRQ

DQG GHVWUXFWLRQ RI WKH XQLYHUVH ([FHVVLYH JURZWK RI H[WUDWHUUHVWULDO DUFKDHDO QHWZRUNV LQ
HDUWK GXH WR PHWKDQRJHQHVLV FUHDWHV JOREDO ZDUPLQJ DQG H[WLQFWLRQ RI FLYLOL]DWLRQ 7KH
H[WUDWHUUHVWULDO DUFKDHDO QHWZRUNV ILVVLRQ DQG IXVLRQ UHDFWLRQ IXHO VWDU V\VWHPV DV ZHOO DV
PHGLDWHWKHLUH[WLQFWLRQ7KHH[WUDWHUUHVWULDOPDJQHWLWHDUFKDHDOQHWZRUNLVUHVSRQVLEOHIRUWKH
LQWHUJDODFWLF PDJQHWLF ILHOG LQ WKH JDOD[\ DQG FRQWULEXWHV WR WKH IRUPDWLRQ RI VWDU V\VWHPV
7KH H[WUDWHUUHVWULDO SRUSK\ULQ DQG DUFKDHDO QHWZRUNV ZLWK WKHLU HQHUJHWLF DQG SDUWLFXODWH
ERGLHV SDUWLFLSDWH LQ WKH GDQFH RI FUHDWLRQ DQG GHVWUXFWLRQ RI WKH XQLYHUVH DQG FDQ EH
FRPSDUHGWRWKH+LQGX*RG6KLYD
7KH DUFKDHDO DQG SRUSK\ULQ H[WUDWHUUHVWULDO QHWZRUN LV LQWHOOLJHQW DQG RFFXS\ WKH
LQWHUVWHOODU VSDFH DQG FRPPXQLFDWHV ZLWK DOO JDOD[LHV SODQHWV DQG VWDU V\VWHP E\ WKH
SKHQRPHQDRITXDQWDOQRQORFDOLQWHUDFWLRQDQGFRQWULEXWHVWRZKDWLVFDOOHGDVWKHFROOHFWLYH
XQFRQVFLRXVRU*RG7KHH[WUDWHUUHVWULDOSRUSK\ULQDQGDUFKDHDOQHWZRUNIRUPWKHFHQWUHRI
WKHLQWHUVWHOODUJDVDQGFDQFRQGHQVHWRIRUPVWDUVDQGSODQHWV6WDUVDUHIXHOHGE\ILVVLRQDQG
IXVLRQUHDFWLRQLQWKHDUFKDHDOQHWZRUNVRILQWHUVWHOODUFORXGVRIK\GURJHQ7KXVWKHVWDUVDQG
SODQHWDU\V\VWHPVDUHDOLYHDQGKXPDQRLGKDYLQJDQDWXUDOKLVWRU\RIWKHLURZQZLWKOLIHDQG
GHDWK7KH+LQGX*RGVDQG5LVKLVDUHIL[HGDQGDWWDFKHGWRSODQHWDU\DQGVWDUV\VWHPV7KLV
ZRXOGEHDUHIOHFWLRQRIWKHLPSDFWRIWKHH[WUDWHUUHVWULDODUFKDHDOLQWHOOLJHQFHDQGWKHWUDQVIHU
RIFRPHWDU\JHQHVWRRWKHUSODQHWDU\V\VWHPVLQFOXGLQJHDUWK7KHH[WUDWHUUHVWULDOSRUSK\ULQ
DQG DUFKDHDO LQWHOOLJHQW QHWZRUNV FDQ EXLOG XS WKH LQWHUVWHOODU VSDFH LQ RWKHU SODQHWV OLNH
0DUVDQG9HQXVDQGRWKHUVWDUV\VWHPV,QWHOOLJHQWFLYLOL]DWLRQDOUHDG\H[LVWVLQVWDUV\VWHPV
DQG JDOD[LHV DOO RYHU WKH XQLYHUVH 7KH\ DUH PDGH RI WKH H[WUDWHUUHVWULDO SRUSK\ULQ DQG
DUFKDHDOLQWHOOLJHQWQHWZRUNV7KHVDPHH[WUDWHUUHVWULDODQGLQGXFHGWHUUHVWULDOSRUSK\ULQDQG
DUFKDHDO QHWZRUN JDYH ULVH WR WKH ]RPELH FLYLOL]DWLRQ RI SODQWV EDFWHULD YLUXVHV DQLPDOV
SULPDWHVDQGKXPDQVLQHDUWKZLWKWKHWHUUHVWULDODUFKDHDODQGSRUSK\ULQLQWHOOLJHQWQHWZRUN
DV WKH UHDO HWHUQDO VWUXFWXUH 7KH ]RPELH IRUPV FKDQJH IURP WLPH WR WLPH 7KH WHUUHVWULDO
DUFKDHDO DQG SRUSK\ULQ QHWZRUN KDYLQJ DQ HQHUJ\ZDYH SDUWLFXODWH H[LVWHQFH LV HWHUQDO
6LPLODUH[WUDWHUUHVWULDODUFKDHDODQGSRUSK\ULQLQWHOOLJHQWQHWZRUNLQGXFHGFLYLOL]DWLRQVRUWKH
QHWZRUNVSHUVHDFWLQJDVFLYLOL]HGHQWLWLHVFRQWUROOLQJWKHXQLYHUVHH[LVWVDOORYHUWKHJDOD[LHV
DQGXQLYHUVH7KLVFDQEHFDOOHGDVWKH*RGEHLQJ7KHWUDQVIHURIFRPHWDU\JHQHVIURPWKH
H[WUDWHUUHVWULDOSRUSK\ULQDQGDUFKDHDOQHWZRUNGXHWRPHWHRULFDQGFRPHWDU\VKRZHUVFDQEH
FRQVLGHUHGDVYLVLWDWLRQVRIWKHH[WUDWHUUHVWULDODUFKDHDOLQWHOOLJHQFHWRSODQHWDU\V\VWHPVDQG
VWDUV\VWHPVWRPRGXODWHVXFKV\VWHPV7KH\FDQEHFDOOHGDV*RGDVWURQDXWVLQPHWDSKRULFDO
VHQVH7KHKXPDQFLYLOL]DWLRQVFDQEHFRQVLGHUHGDV]RPELHVIRUWKHH[WUDWHUUHVWULDODUFKDHDO

LQWHOOLJHQWQHWZRUN7KHKXPDQ]RPELH¶VFUHDWLYLW\OHDGHUVKLSTXDOLWLHVDQGLQWHOOLJHQFHDUH
SURSRUWLRQDWHWRWKHLQIXVLRQRIFRPHWDU\JHQHV7KHKXPDQ]RPELHVZLWKWKHKLJKHVWGHQVLW\
RIFRPHWDU\JHQHVIURPWKHH[WUDWHUUHVWULDODUFKDHDOLQWHOOLJHQWQHWZRUNDUHQHDQGHUWKDOLFDQG
GRPLQDWHVRFLHWLHVDVNLQJVDQGOHDGHUV7KH\DUHDXWLVWLFDQGLQWHOOLJHQWDQGIRUPVFLHQWLVW
ZULWHUV SRHWV SDLQWHUV GDQFHUV DUWLVWV DQG DOO FUHDWLYH LFRQV RI FLYLOL]DWLRQV 7KH\ FDQ EH
FDOOHG DV WKH LOOXPLQDWL RI HDUWK RU WKH DJHQWV RI WKH H[WUDWHUUHVWULDO DUFKDHDO LQWHOOLJHQW
QHWZRUN FRQWUROOLQJ WKH HDUWK 7KH WHUUHVWULDO KLVWRU\ DQG FLYLOL]DWLRQ LV DOVR PRGXODWHG E\
LQIXVLRQ RI FRPHWDU\ JHQHV E\ PHWHRULF LPSDFWV IURP H[WUDWHUUHVWULDO DUFKDHDO LQWHOOLJHQW
QHWZRUN7KLVDOWHUVWKHJHQRPLFSDWWHUQVRIWKHKRPRVDSLHQSRSXODWLRQE\WKHDUFKDHDDQG
WKH VHFUHWHG 51$ YLURLGV 7KLV UHVXOWV LQ UHGXFWLRQ LQ FHUHEUDO FRUWLFDO IXQFWLRQ ORJLFDO
WKLQNLQJ FLYLOL]HG EHKDYLRU DQG KXPDQLW\ DV ZH NQRZ LW 7KH VRFLHW\ EHFRPHV FHUHEHOODU
GRPLQDQWDQGLPSXOVLYH7KHEUDLQEHFRPHVDSULVRQHURIVXUUHDOLVWLFDQGWUDQVFHQGHQWDOLVWLF
XUJHV7KLVFUHDWHVDEVWUDFWDUWDQDUFK\WHUURULVPVH[XDODQDUFK\DOWHUQDWHVH[XDOLW\URFN
PXVLF JOREDOL]DWLRQ RI FXOWXUH DQG VSLULWXDOLW\ 7KLV DOVR OHDGV WR YLROHQFH WHUURULVP
UHYROXWLRQVDQGZDUVZKLFKFUHDWHVDVRUWRIWUDQVFHQGHQFHVLPLODUWRVSLULWXDOLW\7KHZRUOG
LV GRPLQDWHG E\ LPSXOVLYH SHRSOH ZLWKRXW ORJLFDO WKLQNLQJ DQG ZLWK GRPLQDQW H[WUDVHQVRU\
SHUFHSWLRQ 7KH ZRUOG EHFRPHV DQDUFK\ DQG JOREDOL]HG ZLWK XQLIRUPLW\ LQ KXPDQ EHKDYLRU
DQG WKRXJKW 7KH FKDQJHV LQ VRFLHW\ DUH EURXJKW DERXW E\ LQFUHDVH LQ DUFKDHDO JURZWK DQG
LQFUHDVHG WUDQVIHU RI H[WUDWHUUHVWULDO DUFKDHDO LQWHOOLJHQW QHWZRUNV VWDUWLQJ IURP WKH LFH DJH
7KH1HDQGHUWKDOK\EULGVZHUHFUHDWLYHDQGFUHDWHGFKDQJHVLQVRFLHW\OHDGLQJWRDQLQGXVWULDO
UHYROXWLRQ DQG D WHFKQRORJLFDO UHYROXWLRQ FRQWULEXWLQJ WR JOREDO ZDUPLQJ DQG H[WUHPHV RI
WHPSHUDWXUH ZKLFK OHDGV WR IXUWKHU JURZWK RI WHUUHVWULDO DQG H[WUDWHUUHVWULDO DUFKDHDO
LQWHOOLJHQWQHWZRUNV7KHDLPRIFUHDWLQJKXPDQ]RPELHVRUK\EULGVWKDWDUHFUHDWLYHFRXOG
KDYH EHHQ WR FUHDWH DQ HQYLURQPHQW ZKLFK OHDGV WR IXUWKHU H[SDQVLRQ RI WKH WHUUHVWULDO DQG
H[WUDWHUUHVWULDO LQWHOOLJHQW SRUSK\ULQ DQG DUFKDHDO QHWZRUNV 7KH H[SDQVLRQ RI WKH WHUUHVWULDO
DUFKDHDOQHWZRUNVSURGXFHVPHWKDQRJHQHVLVJOREDOZDUPLQJDQGIXUWKHUJURZWKRIWHUUHVWULDO
DUFKDHD 7KH JURZWK RI WHUUHVWULDO DUFKDHD LQ WKH RFHDQ EHGV FDQ OHDG WR HDUWKTXDNHV
FRQWLQHQWDOGULIWVWVXQDPLVULVHLQZDWHUOHYHOVIORRGLQJDQGJOREDOFDWDVWURSKHHQGLQJWKH
XQLYHUVHDQGKXPDQ]RPELHVDVZHNQRZRIWRGD\7KHWHUUHVWULDODQGH[WUDWHUUHVWULDOQHWZRUN
RI SRUSK\ULQ DQG DUFKDHDO LQWHOOLJHQFH ZLOO FRQWLQXH WLOO HWHUQLW\ 7KH\ FDQ KDYH D ZDYH
SDUWLFOH H[LVWHQFH UHYHUWLQJ WR WKHLU HQHUJ\ ERG\ RU ZDYH ERG\ ZKHQ UHTXLUHG DQG FRPLQJ
EDFNWRSDUWLFXODWHH[LVWHQFHIURPWKHTXDQWDOIRDPZKHQUHTXLUHGFUHDWLQJVWDUVSODQHWVDQG
OLIHDJDLQ7KLVLVWKHGDQFHRIOLIHDQGGHDWKWKHGDQFHRI6KLYD

7KH%LEOLFDOOLWHUDWXUHFDQEHLQWHUSUHWHGLQWHUPVRIH[WUDWHUUHVWULDODUFKDHDOQHWZRUNV
DQG1HDQGHUWKDOK\EULGV7KHH[WUDWHUUHVWULDODUFKDHDOQHWZRUNVFRQWDFWVWKHWHUUHVWULDOV\VWHP
YLDPHWHRULFDQGFRPHWDU\LPSDFWV7KHKRPRVDSLHQIHPDOHVZLWKDUFKDHDOV\PELRVLVJLYH
ULVH WR 1HDQGHUWKDO K\EULGV 7KH KRPR VDSLHQ SRSXODWLRQ KDYH OHVV RI DUFKDHDO GHQVLW\ DQG
GLIIHUHQWFKDUDFWHULVWLFV7KH1HDQGHUWKDOK\EULGVZHUHFUHDWLYHDQGDXWLVWLFDQGEHFDPHWKH
UXOHUV RI VRFLHW\ DQG NLQJVKLS GHYHORSHG RZLQJ WR WKH JURXSV LQFUHDVHG LQWHOOHFWXDO DQG
SK\VLFDODELOLWLHV7KHKRPRVDSLHQIHPDOHVZLWKDUFKDHDOV\PELRVLVJDYHULVHWR1HDQGHUWKDO
K\EULGVDQGWKH\ZHUHFRQVLGHUHGDVHTXLYDOHQWWRPRWKHUJRGGHVVLQFHUWDLQVRFLHWLHVRUDV
PDQLIHVWDWLRQ RI 6KDNWL 7KLV JDYH ULVH WR D PDWULOLQHDO VRFLHW\ DQG IHPDOH GRPLQDQFH 7KH
H[WUDWHUUHVWULDODUFKDHDOQHWZRUNZKLFKIRUPVVWDUVDQGSODQHWDU\V\VWHPFDQEHFRQVLGHUHGDV
DUHSUHVHQWDWLYHRI6KLYDDQGWKHIHPDOHKRPRVDSLHQVZLWKDUFKDHDOV\PELRVLVJLYLQJULVHWR
1HDQGHUWKDO K\EULGV FDQ EH FRQVLGHUHG DV D FRQVRUW RI 6KDNWL 7KH FRPPRQ KRPR VDSLHQV
YLHZHG WKH 1HDQGHUWKDO K\EULGV ZLWK VXVSLFLRQ DV WKH\ ZHUH GLIIHUHQW IURP WKH JHQHUDO
SRSXODWLRQ DQG GRPLQDQW UXOLQJ RYHU WKHP ZLWK WKHLU SK\VLFDO DQG LQWHOOHFWXDO DELOLW\ 7KH
FRPPRQ KRPR VDSLHQV RUJDQL]HG WKHPVHOYHV DV WKH FKXUFK DJDLQVW 1HDQGHUWKDO K\EULGV
ZKLFKIRUPHGWKHVWDWHRUNLQJVKLS7KHFRPPRQKRPRVDSLHQVFRQVLGHUHGWKHLQWHUEUHHGLQJ
RI KRPR VDSLHQ IHPDOHV ZLWK H[WUDWHUUHVWULDO DUFKDHDO QHWZRUNV DV RULJLQDO VLQ DQG WKH
H[WUDWHUUHVWULDODUFKDHDOQHWZRUNVFRQWDFWLQJWKHHDUWKYLDFRPHWDU\LPSDFWVDVIDOOHQDQJHOV
7KH FRPPRQ KRPR VDSLHQV FRQVLGHUHG VH[ DV WDERR DQG VRFLHW\ ZDV RUJDQL]HG WR SUHYHQW
LQWHUEUHHGLQJZLWK1HDQGHUWKDOK\EULGV+\EULGVZHUHLQWHOOLJHQWFUHDWLYHGRPLQHHULQJZLWK
VH[XDOIUHHGRPZKLFKZDVFRQVLGHUHGDVVLQIXOE\WKHFRPPRQKRPRVDSLHQSRSXODWLRQDQG
WKH FKXUFK 7KHUHIRUH WKH SRVLWLRQ RI ZRPHQ LQ WKH FRPPRQ KRPR VDSLHQ VRFLHW\ ZLWK
FHUHEUDO FRUWLFDO GRPLQDQFH ZDV LQIHULRU VH[XDO DFWLYLW\ ZDV VLQIXO DQG VRFLHW\ ZDV
SDWULDUFKDO ZLWK VWULFW PRUDO FRGHV 7KH 1HDQGHUWKDO K\EULGV RQ WKH RWKHU KDQG ZHUH
FHUHEHOODU GRPLQDQW LPSXOVLYH FUHDWXUHV ZLWK VH[XDO IUHHGRP ORRVH PRUDO FRGHV DQG D
FRPPXQDO OLIH ZLWK PDWULDUFKDO VWUXFWXUH RIVRFLHW\ 7KH PDWULOLQHDO VRFLHWLHV ZLWK DUFKDHDO
V\PELRVLV DUH WKH &HOWV %DVTXHV %HUEHUV -HZV 6XPHULDQV 'UDYLGLDQV DQG DQFLHQW
(J\SWLDQV DQG WKH\ ZHUH DOO FRPPXQDO JURXSLQJV RI 1HDQGHUWKDO K\EULGV DQG GRPLQDWHG
FLYLOL]DWLRQ IRU GHFDGHV 7KLV LV QRWLFHG LQ WKH (J\SWLDQ FLYLOL]DWLRQ RI 3KDURDKV WKH
6XPHULDQFLYLOL]DWLRQWKHDQFLHQW-HZLVKFLYLOL]DWLRQ$VV\ULDQFLYLOL]DWLRQWKH,UDQLDQDVXULF
FLYLOL]DWLRQ $]WHF FLYLOL]DWLRQ DQG WKH +DUDSSDQ FLYLOL]DWLRQ 7KH ,QGLDQ FDVWH V\VWHP LV
EDVHG RQ WKH SKHQRPHQD RI 1HDQGHUWKDO K\EULGV 7KH 1HDQGHUWKDO K\EULGV IRUPHG GXH WR
FRQWDFWZLWKWKHH[WUDWHUUHVWULDODUFKDHDOQHWZRUNVFRQVHTXHQWWRPHWHRULFLPSDFWVIRUPHGWKH
XSSHU FDVWH RI %UDKPLQV DQG .VKDWUL\DV 7KH FRPPRQ KRPR VDSLHQ SRSXODWLRQ IRUPHG WKH

6XGUDV7KH1HDQGHUWKDOK\EULGVRIWKHXSSHUFDVWHUXOHGRYHUWKHVRFLHW\DQGNHSWDFRPPRQ
KRPR VDSLHQ SRSXODWLRQ RI ORZHU FDVWH DV VODYHV %UHHGLQJ ODZV ZHUH PDGH DQG D FDVWH
JURXSVPDGHZDWHUWLJKWWRNHHSWKHSXULW\RIWKH1HDQGHUWKDOK\EULGV7KHFRPPRQKRPR
VDSLHQ SRSXODWLRQ DOO RYHU WKH ZRUOG UHWDLQHG LWV SDWULDUFKDO PRRULQJV DQG PDOH GRPLQDQFH
DQG EHFDPH SUHGRPLQDQWO\ &KULVWLDQ DQG 0XVOLP 7KHVH VRFLHWLHV ZHUH FHUHEUDO FRUWLFDO
GRPLQDQWFLYLOVRFLHWLHVZHUHHTXDOLW\DQGUHVSHFWIRUSHRSOHZDVWKHQRUP7KH1HDQGHUWKDO
K\EULGV ZLWK WKH FUHDWLYLW\ DQG H[WUDVHQVRU\ SRZHUV EHFDPH +LQGXV %XGGKLVWV DQG -HZV
7KHVH VRFLHWLHV ZHUH GLYLGHG RQ WKH EDVLV RI FDVWH DQG IRU WKH QHFHVVLW\ RI NHHSLQJ WKH
1HDQGHUWKDO K\EULGV SXUH DQG FRPSDFW 7KH 6XPHULDQ WH[WV WKH (J\SWLDQ SDS\UXV WKH 5LJ
YHGDWKHDQFLHQW-HZLVKWHVWDPHQWVWKH$VV\ULDQOLWHUDWXUHDUH1HDQGHUWKDOK\EULGLQRULJLQ
DQGFRQWDLQVYHUVLRQRIWKHH[WUDWHUUHVWULDODUFKDHDOQHWZRUNVRIWKHLQWHUVWHOODUVSDFHJLYLQJ
ULVH WR VWDUV DQG SODQHWDU\ V\VWHP 7KH *RGV RI (J\SW +LQGXV $VV\ULDQV DQG -HZV DUH
FRQQHFWLRQ ZLWK WKH VWDUV 7KLV FDQ EH QRWHG LQ WKH ULWXDO RI SDJDQ UHOLJLRQV OLNH WKRVH LQ
6WRQHKHQJHWKHULWXDOVRI+LQGXLVPDQGWKRVHRIDQFLHQW(J\SWDVZHOODV$]WHFVZKLFKKDG
UHODWLRQ WR WKH VWDU V\VWHPV LQGLFDWLQJ FRQWDFW ZLWK H[WUDWHUUHVWULDO LQWHOOLJHQW DUFKDHDO
QHWZRUNV 7KH 1HDQGHUWKDO K\EULGV KDYH FHUHEHOODU GRPLQDQFH DQG FHUHEUDO FRUWLFDO
G\VIXQFWLRQ DQG FRXOG DWWDLQ WUDQVFHQGHQFH WR WKH FROOHFWLYH XQFRQVFLRXV DQG FRQQHFW ZLWK
WKH H[WUDWHUUHVWULDO DUFKDHDO SDUWLFXODWH RU HQHUJ\ QHWZRUN ZLWK HDVH 0RVW RI WKH UHOLJLRXV
VSLULWXDO OHDGHUV FRXOG KDYH EHHQ 1HDQGHUWKDO K\EULGV 7KH NLQJV DQG ZDUULRUV ZHUH DOVR
1HDQGHUWKDOK\EULGV7KHDFWRIZDURUWKHDFWRINLOOLQJJLYHVDVHQVHRIWUDQVFHQGHQFHDQG
PHUJHUZLWKWKHFROOHFWLYHXQFRQVFLRXVDVVHHQLQWKH%KDJDYDG*LWDZKHUHWKHDFWRIZDULV
FRQVLGHUHGDVDGKDUPDDQGOHDGVWRWUDQVFHQGHQFH7KHFRUWLFDOIXQFWLRQRIORJLFDOWKLQNLQJ
LV REOLWHUDWHG 7KH 1D]LV LQFOXGLQJ +LWOHU DQG +LPPOHU EHOLHYHG LQ WKH SKLORVRSK\ RI WKH
%KDJDYDG*LWDZKLFKMXVWLILHGWKHZRUOGZDUVDVDQDFWRIGKDUPD7KHUHLVDOVRWKHFRQFHSW
RIDYDWDUVRI9LVKQXGHVFHQGLQJIURPWKHKHDYHQWRVDYHPDQNLQG7KLVLQFOXGHV.ULVKQDDQG
%XGGKD 7KH\ FDQ EH FRQVLGHUHG DV 1HDQGHUWKDO K\EULGV EUHG LQ FRQWDFW ZLWK WKH
H[WUDWHUUHVWULDOLQWHOOLJHQWDUFKDHDOFRORQ\SDUWLFXODWHRUHQHUJ\QHWZRUNPHGLDWHGE\DUFKDHDO
FRORQ\DVWURQDXWVVKRZHUHGRQWRWKHHDUWKE\PHWHRULFLPSDFWV$OOWKHSROLWLFDOUHYROXWLRQV
RQ HDUWK KDG D QHDQGHUWKDOLF K\EULG OHDGHUVKLS 1D]LVP )DVFLVP &RPPXQLVP WKH )UHQFK
UHYROXWLRQDQGWKHUR\DONLQJVKLS7KH)UHQFKUHYROXWLRQDQGFRPPXQLVWUHYROXWLRQGHVSLWH
LWVHJDOLWDULDQHWKRVZHUHEDVLFDOO\OHGE\-HZV7KHPRGHUQUHYROXWLRQRIWKHGLVVROXWLRQRI
QDWLRQ VWDWHV DQG JOREDOL]DWLRQ RI FDSLWDO DQG HFRQRP\ DOVR KDV D -HZLVK OHDGHUVKLS RI
1HDQGHUWKDO K\EULGV 7KH WHFKQRORJLFDO UHYROXWLRQ RI WKH LQWHUQHW ZKLFK SRZHUV WKH
JOREDOLVHG ZRUOG LV DOVR GRPLQDWHG E\ WKH LPSXOVLYH FHUHEHOODU GRPLQDQW 1HDQGHUWKDO

K\EULGV/RZOHYHORI(0)ILHOGVRIWKHLQWHUQHWFDQLQFUHDVHDUFKDHDOJURZWKDQGDUFKDHDO
PDJQHWLWH PHGLDWHG SHUFHSWLRQ RI ORZ OHYHO (0) SURGXFLQJ FRUWLFDO DWURSK\ DQG FHUHEHOODU
GRPLQDQFH ZKLFK FDQ EH WUDQVPLWWHG JHQHWLFDOO\ 7KH LQWHUQHW UHYROXWLRQ LV SRZHUHG E\
1HDQGHUWKDO K\EULGV ZKR DUH EDVLFDOO\ DXWLVWLF DQG KDYH H[WUDVHQVRU\ SHUFHSWLRQ GXH WR
KLJKHUEUDLQGHQVLW\RIDUFKDHDOPDJQHWLWH7KH1HDQGHUWKDOK\EULGVGRPLQDWHWKHZRUOGZLWK
WKHLULQWHOOHFWXDODQGSK\VLFDOVXSHULRULW\DQGFDQEHFRQVLGHUHGDVDXQLYHUVDOUXOLQJFDXFXV
RULOOXPLQDWL
7KH PRGHUQ GD\ QHDQGHUWKDOLF UHOLJLRQ PHGLDWHG E\ WKH LQWHUJDODFWLF DUFKDHDO
PROHFXODUTXDQWXPFRPSXWLQJFORXGLQFOXGHV+LQGXLVP-HZLVK.DEDODWKH,VODPLF6XILVP
WKH &KULVWLDQ *QRVWLVP DQG WKH =HQ %XGGKLVP 7KHVH DUH DOO FHUHEHOODU FRUWLFDO UHOLJLRQV
7KH\ KDYH DQ H[WUDWHUUHVWULDO FRQWHQW DUH LPSXOVLYH ORRVH ULWXDOLVWLF VH[XDO VHQVXDO DQG
SULPLWLYH 7KH FRUUHODWHV RI WKHVH FDQ EH VXUUHDOLVP PDWULDUFKDO JOREDO YLROHQFH JHQGHU
HTXDODOWHUQDWHVH[XDOLW\QRQGHPRFUDWLFDQGZLWKH[WUDVHQVRU\TXDQWDOSHUFHSWLRQ7KH\DUH
HQYLURQPHQWDO IULHQGO\ DQG ZRUVKLS HQYLURQPHQW DV *RG 7KH\ DUH SURQH WR FLYLOL]DWLRQDO
GLVHDVHV OLNH WXPRXUV PHWDEROLF V\QGURPH GHJHQHUDWLRQV SV\FKLDWULF LOOQHVV DQG
DXWRLPPXQLW\ DQG LQ WKDW VHQVH ZHUH FRQVLGHUHG E\ WKH KRPR VDSLHQ VHFXODU UHOLJLRQV DV
VDWDQLF7KH\DUHHTXLYDOHQWWRWKHYDPSLUHVWKHGHPRQVWKHHOIWKHJREOLQVDQG$VXUDV7KH
KRPR VDSLHQ VHFXODU UHOLJLRQV LQFOXGH WKH :DKDEL ,VODP PRGHUQ FRPPXQLVP DQG WKH
SURWHVWDQWDQG5RPDQ&DWKROLF&KULVWLDQLW\7KHKRPRVDSLHQUHOLJLRQVDUHFHUHEUDOFRUWLFDO
UHOLJLRQV RI FLYLO VRFLHWLHV 7KHVH KRPR VDSLHQ UHOLJLRQV JLYH D FLYLOL]HG FRGH RI VRFLDO
FRQGXFW 7KH FRUUHODWHV RI LW DUH QRQYLROHQFH DKLPVD PRUDOLW\ SDWULDUFKDO IHPDOH
VXSSUHVVLRQJHQGHULQHTXDOLW\VWULFWKHWHURVH[XDOPRUDOFRGHVDQGDQWLHQYLURQPHQWDO

5HIHUHQFHV
.XUXS 5. DQG .XUXS 3$ 7KHRU\ RI (YHU\WKLQJ ± $ %LRORJLFDO 9LHZSRLQW 1HZ <RUN
2SHQ6FLHQFH3XEOLVKHUV

&+$37(5
+202*$/$&7,&86+20252%27,&86$1'+80$1(;7,1&7,21
([WLQFWLRQRIVSHFLHVRQHDUWKLVWKHQDWXUDOUXOHDQG+XPDQH[WLQFWLRQFDQRFFXULQ
WKHIRUHVHHDEOHIXWXUH&OLPDWHFKDQJHDQGGHVWUXFWLRQRIHDUWKHQYLURQPHQWLVWKHQDWXUDOODZ
RI WKH XQLYHUVH +XPDQV FDQ VXUYLYH RQO\ LQ RWKHU VWDU V\VWHPV DQG SODQHWV +XPDQ EHLQJV
FDQPLJUDWHWRRWKHUSODQHWVXVLQJDQWLPDWWHUURFNHWVDQGIXVLRQURFNHWV(YROXWLRQRIKRPR
JDODFWLFXV E\ DUFKDHDO V\PELRVLV ZKLFK FDQ VWDQG H[WUHPHV RI HQYLURQPHQW +XPDQ EHLQJV
FDQ DOVR HYROYH LQWR PDQPDFKLQH K\EULGV $ QHZ VSHFLHV FDOOHG KRPR JDODFWLFXV RU KRPR
URERWLFXV FDQ HYROYH 7KLV SURGXFHV D FLYLOL]DWLRQ RI VXSHU KXPDQ KRPR QHDQGHUWKDOLV DQG
KRPR QHRQHDQGHUWKDOLV ZLWK QHZ PHWDEROLF HQGRFULQH QHXURQDO SV\FKRORJLFDO DQG
JHQRW\SLF IHDWXUHV 7KH KRPR QHRQHDQGHUWKDOLV DQG KRPR QHDQGHUWKDOLV ZLWK LWV FHOOXODU
DUFKDHDRQVDQGSRUSK\ULRQVFDQLQWHUOLQNZLWKWKHLQWHUQHWDQGFRPSXWHUV\VWHPVDVZHOODV
URERWVSURGXFLQJPDQPDFKLQHK\EULGVE\TXDQWDOSHUFHSWLRQ7KHDUWLILFLDOLQWHOOLJHQFHDQG
URERWLFV\VWHPVJHWVPHUJHGZLWKKRPRQHDQGHUWKDOLVDQGKRPRQHRQHDQGHUWKDOLVSURGXFLQJ
VXSHUKXPDQPDQPDFKLQHK\EULGV7KHQHZKRPRQHDQGHUWKDOLVDQGKRPRQHRQHDQGHUWKDOLV
VXSHUKXPDQDXWLVWLFPDQPDFKLQHK\EULGVZLOOVXUYLYHSURVSHUDQGIORXULVKLQWKHVHWWLQJRI
JOREDO ZDUPLQJ UHODWHG H[WUHPRSKLOLF FOLPDWH FKDQJH DQG HYROYLQJ WR FRQWDFW E\ TXDQWDO
SHUFHSWLRQRWKHUJDODFWLFIRUPVRIOLIHDQGFLYLOL]DWLRQDVZHOODVFRORQLVLQJRWKHUSODQHWVDQG
VWDU V\VWHPV 7KLV HYROYHV LQWR D QHZ KXPDQ VSHFLHV LQKDELWLQJ RWKHU FRPHWV DQG VWDU
V\VWHPVWKHKRPRJDODFWLFXV
*OREDOZDUPLQJOHDGVWRHQGRV\PELRWLFDUFKDHDOJURZWK7KHHQGRV\PELRWLFDUFKDHD
SURGXFHV PHWKDQH E\ PHWKDQRJHQHVLV FRQWULEXWLQJ WR JOREDO ZDUPLQJ 7KH HQGRV\PELRWLF
DUFKDHDGHYHORSVLQWRFHOORUJDQHOOHFDOOHGDUFKDHDRQVZKLFKFDQIXQFWLRQDVYLWDPLQRF\WHV
QHXURWUDQVPLQRLGV VWHURLGHOOH DQG YLURLGHOOH FUHDWLQJ QHZHU FHOO RUJDQHOOH DQG HQGRJHQRXV
V\QWKHWLFELRORJ\7KLVFKDQJHVWKHFHOODQGWLVVXHIXQFWLRQDQGVWUXFWXUHOHDGLQJRQWRDQHZ
KXPDQ SKHQRW\SH FDOOHG KRPR QHRQHDQGHUWKDOLV 7KH KRPR QHRQHDQGHUWKDOLV LV D KDUG\
VSHFLHVZKLFKFDQUHVLVWFOLPDWHFKDQJHDQGWKULYHLQHQYLURQPHQWVRIKLJKWHPSHUDWXUHKLJK
DWPRVSKHULF FDUERQ GLR[LGH DQG ZDWHU VKRUWDJH 7KH QHZ RUJDQHOOH WKDW DUH GHYHORSHG FDQ
ZLWKVWDQG FOLPDWH FKDQJH DQG IL[ FDUERQ GLR[LGH DQG DPPRQLD OHDGLQJ WR HQGRJHQRXV
V\QWKHVLV RI FDUERK\GUDWHV DQG SURWHLQ 7KH KRPR QHRQHDQGHUWKDOLV LV D QHZ PHWDEROLF
SKHQRW\SHWKDWFDQVXUYLYHLQH[WUHPHVRIFOLPDWHSURGXFHGE\JOREDOZDUPLQJ7KHDUFKDHD

IRUPLQJQHZFHOOXODURUJDQHOOHFDOOHGDUFKDHDRQVDUHH[WUHPRSKLOLFDQGVXUYLYHLQH[WUHPHV
RIFOLPDWH
7KH HQGRV\PELRWLF DUFKDHD VHFUHWH 51$ YLURLGV ZKLFK FDQ EH FRQYHUWHG WR
FRUUHVSRQGLQJ '1$ VHTXHQFHV E\ HQGRJHQRXV UHWURYLUDO UHYHUVH WUDQVFULSWDVH DQG FDQ JHW
LQFRUSRUDWHG LQWR WKH JHQRPH E\ HQGRJHQRXV UHWURYLUDO LQWHJUDVH 7KXV WKHUH LV D FRQVWDQW
DGGLWLRQ RI JHQRPLF VHTXHQFHV GHULYHG IURP DUFKDHDO 51$ YLURLGV SURGXFLQJ D G\QDPLF
KXPDQ QHRQHDQGHUWKDOLF JHQRPH DGDSWDEOH WR H[WUHPHV RI FOLPDWH SURGXFHG E\ JOREDO
ZDUPLQJ 7KXV WKH KXPDQ QHRQHDQGHUWKDOLV LV D QHZ JHQRW\SH 7KH QHRQHDQGHUWKDOLF
DUFKDHDRQVDUHFDSDEOHRIIL[LQJFDUERQGLR[LGHDQGR[\JHQXVLQJDPPRQLDIRUHQHUJHWLFV
DQG FDSDEOH RI ELRORJLFDO ILVVLRQ DQG IXVLRQ UHDFWLRQV 7KH\ DUH DOVR FDSDEOH RI
SKRWRLQGXFWLRQ RI PHPEUDQH $73 V\QWKHVLV E\ VRGLXP SRWDVVLXP $73DVH 7KH IL[LQJ RI
FDUERQ GLR[LGH OHDGV WR ZDWHU DV D E\SURGXFW 7KLV JHQHUDWHV HQGRJHQRXV ZDWHU LQ WKH
QHRQHDQGHUWKDOLFV\VWHPKHOSLQJWRVXUYLYHH[WUHPRSKLOLFFOLPDWLFFRQGLWLRQV7KLVFUHDWHVD
QHZV\VWHPRIHQHUJHWLFVKHOSLQJWKH1HRQHDQGHUWKDOVXUYLYHVLQH[WUHPHVRIFOLPDWH
7KH QHRQHDQGHUWKDOLF DUFKDHDRQV KDYH JRW PDJQHWLWH FDSDEOH RI PDJQHWRSHUFHSWLRQ

DQGTXDQWDOSHUFHSWLRQ7KHTXDQWDOSHUFHSWLRQRIORZOHYHORI(0)OHDGVWRIURQWDODWURSK\
DQG FHUHEHOODU GRPLQDQFH SURGXFLQJ D QHZ QHXURQDO SKHQRW\SH ZLWK IHDWXUHV RI HQGHPLF
FHUHEHOODU FRJQLWLYH DIIHFWLYH GLVRUGHU PDQLIHVWLQJ DV HSLGHPLF DXWLVP 7KLV IRUPV D QHZ
DXWLVWLF EHKDYLRXUDO SKHQRW\SH ZKLFK LV LQWURYHUWHG QRQFRPSDVVLRQDWH QRQHPSDWKLF
SV\FKRSDWKLF DQG ZLWK H[WUDVHQVRU\ SHUFHSWXDO DELOLWLHV RI WHOHSDWK\ WHOHNLQHVLV DQG WLPH
WUDYHO OHDGLQJ WR FRPPXQLFDWLRQ ZLWK RWKHU JDODFWLF FLYLOL]DWLRQV 7KH QHZ EHKDYLRXUDO
DXWLVWLFURERWLFQHRQHDQGHUWKDOLFSKHQRW\SHZLOOKDYHWKHQHFHVVDU\LQWHOOLJHQFHDQGPHQWDO
DELOLWLHV FRSH ZLWK FOLPDWH FKDQJH 7KH QHRQHDQGHUWKDOLF DUFKDHDRQV DUH FDSDEOH RI TXDQWDO
SHUFHSWLRQ DQG FDQ FRPPXQLFDWH TXDQWDOO\ ZLWK RWKHU VWDU V\VWHPV DQG PXOWLYHUVHV 7KLV
OHDGVRQWRWKHHYROXWLRQRIDJDODFWLFFLYLOL]DWLRQ7KHQHRQHDQGHUWKDOLFDUFKDHDRQVSURGXFH
D PHWDEROLF SKHQRW\SH FDSDEOH RI VXUYLYLQJ LQ H[WUHPRSKLOLF HQYLURQPHQWV RI RWKHU VWDU
V\VWHPV DQG FDQ VXUYLYH DV FLYLOL]DWLRQ LQ RWKHU VWDUV DQG H[RSODQHWV 7KH QHRQHDQGHUWKDOLF
DXWLVWLFSKHQRW\SHZLWKLWVH[WUHPRSKLOLFDUFKDHDRQRUJDQHOOHLVVXLWHGIRUVSDFHFRORQLVDWLRQ
7KH QHRQHDQGHUWKDOLF DUFKDHDRQV XVH FKROHVWHURO R[LGDWLRQ DV D IRUP RI HQHUJHWLFV
7KLVSURGXFHVGHSOHWLRQRIVH[KRUPRQHVSURGXFLQJDVH[XDOSKHQRW\SHV7KLVOHDGVWRVH[XDO
SKHQRW\SHV ZLWK DOWHUQDWH VH[XDOLW\ DQG SDUWKHQRJHQHVLV DV D IRUP RI UHSURGXFWLRQ 7KLV
SURGXFHVFKDQJHLQIDPLO\DQGVRFLHW\DVZHOODVRUJDQLVDWLRQRIWKHFRPPXQLW\

7KH QHRQHDQGHUWKDOLF DUFKDHDRQV VHFUHWH 51$ YLURLGV ZKLFK JHW FRQYHUWHG WR '1$
YLURLGV E\ KXPDQ HQGRJHQRXV UHWURYLUDO UHYHUVH WUDQVFULSWDVH 7KH QHRQHDQGHUWKDOLF
DUFKDHDRQJHQHUDWHG51$DQG'1$YLURLGVFDQK\EULGL]HZLWKRWKHU51$DQG'1$YLUXVHV
SURGXFLQJ QHZ 51$ DQG '1$ YLUXVHV WR ZKLFK WKH QHRQHDQGHUWKDOLF VSHFLHV LV UHVLVWDQW
7KHUHIRUH WKHUH H[LVWV WZR VHWV RI SRSXODWLRQ ZLWK GLIIHULQJ YDULHW\ RI DUFKDHDO V\PELRVLV
7KHKRPRQHDQGHUWKDOLVVSHFLHVKDVSHUVLVWHGDVIRVVLOLVHGPDWULOLQHDOVRFLHWLHVLQ(XURSHDQG
$VLD ZKLFK LQFOXGHV WKH &HOWV WKH 'UDYLGLDQV WKH %HUEHUV DQG WKH 6XPHULDQV 7KHVH
IRVVLOLVHG UHPQDQWV RI KRPR QHDQGHUWKDOLF VSHFLHV DUH LGHDO VXEVWUDWHV IRU DUFKDHDO
HQGRV\PELRVLVLQWKHVHWWLQJRIJOREDOZDUPLQJDQGH[WUHPRSKLOLFFOLPDWLFFRQGLWLRQV7KHVH
IRVVLOLVHGQHDQGHUWKDOLFPDWULOLQHDOVRFLHWLHVZLOOH[SDQGLQWKHSHULRGRIJOREDOZDUPLQJDQG
H[WUHPRSKLOLFFRQGLWLRQVGXHWRHQGRV\PELRWLFDUFKDHDOV\PELRVLVWRZKLFKWKH\DUHDOUHDG\
DFFOLPDWLVHG DQG H[SRVHG WR 7KH KXPDQ VSHFLHV KRPR QHDQGHUWKDOLV LV D FRQVHTXHQFH RI
DUFKDHDO V\PELRVLV LQ WKH H[WUHPRSKLOLF FRQGLWLRQV RI LFH DJH DQG DUH 51$ YLUDOUHWURYLUDO
UHVLVWDQWFRQVHTXHQWWRHQGRJHQRXVGLJR[LQV\QWKHVLVDQGE\DUFKDHDO51$YLURLGDOLQGXFHG
51$ LQWHUIHUHQFH DQG YLUDO LQDFWLYDWLRQ 7KH KRPR VDSLHQV ZKLFK HYROYHG LQ $IULFD DQG
PLJUDWHGODWHUWRWKH(XUDVLDQODQGPDVVDUHUHWURYLUDOVHQVLWLYHDQGRWKHU51$YLUDOVHQVLWLYH
DQGKDYHDORZORDGRIHQGRV\PELRWLFDUFKDHDJURZWK7KHKRPRVDSLHQVRZLQJWRFRQGLWLRQV
RI HYROXWLRQ LV QRW DQ LGHDO VXEVWUDWH IRU JOREDO ZDUPLQJ UHODWHG HQGRV\PELRWLF DUFKDHDO
V\PELRVLV7KHKRPRQHDQGHUWKDOLVDUFKDHDRQVVHFUHWH51$YLURLGVZKLFKDUHFRQYHUWHGWR
'1$ YLURLGV ZLWK ERWK RI WKHP K\EULGL]LQJ ZLWK RWKHU 51$ DQG '1$ YLUXVHV LQ QDWXUH
SURGXFLQJQHZYLUXVHVWRZKLFKWKHKRPRQHDQGHUWKDOLFDQGKRPRQHRQHDQGHUWKDOLFKRVWLV
UHVLVWDQW 7KH QHZ 51$ DQG '1$ YLUXVHV SURGXFHG E\ KRPR QHRQHDQGHUWKDOLV DQG
QHDQGHUWKDOLV LQ JOREDO ZDUPLQJ ZLOO LQIHFW WKH VXVFHSWLEOH KRPR VDSLHQ VSHFLHV DQG ZLSH
WKHP RXW IURP HDUWK 7KH KRPR VDSLHQ VSHFLHV LV QRW D JRRG VXEVWUDWH IRU JOREDO ZDUPLQJ
UHODWHG HQGRV\PELRWLF DUFKDHDO JURZWK DQG ZRXOG QRW HYROYH QHZ FHOOXODU RUJDQHOOH OLNH
VWHURLGHOOHYLURLGHOOHQHXURWUDQVPLQRLGVDQGYLWDPLQRF\WHZKLFKZRXOGKHOSWKHPWRVXUYLYH
LQ H[WUHPRSKLOLF FRQGLWLRQV RI JOREDO ZDUPLQJ 7KH KRPR VDSLHQV DOVR ODFN DUFKDHDRQ
RUJDQHOOHZKLFKKHOSWKHPWRIL[FDUERQGLR[LGHDQGJHQHUDWHZDWHUV\QWKHVLV$73E\SKRWR
LQGXFWLRQPHGLDWHGE\VRGLXPSRWDVVLXP$73DVHDQGDUFKDHDRQPHGLDWHGILVVLRQDQGIXVLRQ
UHDFWLRQ 7KH KRPR VDSLHQ VSHFLHV WKHUHIRUH ZLWKRXW HYROYLQJ DUFKDHDRQ RUJDQHOOH FDQQRW
VXUYLYH LQ WKH KDUVK HQYLURQPHQW RI JOREDO ZDUPLQJ LQGXFHG FOLPDWH FKDQJH DQG LV
H[WHUPLQDWHG E\ KRPR QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV 7KH HDUWK JHWV GRPLQDWHG
E\ KRPR QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV LQ WKH VHWWLQJ RI JOREDO ZDUPLQJ DQG
H[WUHPRSKLOLFFOLPDWHFKDQJHDQGWKH\JRRQWRFRQWDFWRWKHUJDODFWLFFLYLOL]DWLRQVE\TXDQWDO

SHUFHSWLRQVDVZHOODVFRORQLVLQJRWKHUH[RSODQHWVSODQHWVDQGVWDUV\VWHPV7KLVSURGXFHVD
QHZ FLYLOL]DWLRQ RI VXSHU KXPDQ KRPR QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV ZLWK QHZ
PHWDEROLF HQGRFULQH QHXURQDO SV\FKRORJLFDO DQG JHQRW\SLF IHDWXUHV 7KH KRPR
QHRQHDQGHUWKDOLV DQG KRPR QHDQGHUWKDOLV ZLWK LWV FHOOXODU DUFKDHDRQV DQG SRUSK\ULRQV FDQ
LQWHUOLQN ZLWK WKH LQWHUQHW DQG FRPSXWHU V\VWHPV DV ZHOO DV URERWV SURGXFLQJ PDQPDFKLQH
K\EULGVE\TXDQWDOSHUFHSWLRQWKH.DONL7KHDUWLILFLDOLQWHOOLJHQFHDQGURERWLFV\VWHPVJHWV
PHUJHG ZLWK KRPR QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV SURGXFLQJ VXSHU KXPDQ PDQ
PDFKLQH K\EULGV 7KLV FDQ EH FDOOHG DV WKH HPSLUH RI .DONL ZKHUH WKH QHZ KRPR
QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV VXSHU KXPDQ DXWLVWLF PDQPDFKLQH K\EULGV ZLOO
VXUYLYHSURVSHUDQGIORXULVKLQWKHVHWWLQJRIJOREDOZDUPLQJUHODWHGH[WUHPRSKLOLFFOLPDWH
FKDQJH DQG HYROYLQJ WR FRQWDFW E\ TXDQWDO SHUFHSWLRQ RWKHU JDODFWLF IRUPV RI OLIH DQG
FLYLOL]DWLRQ DV ZHOO DV FRORQLVLQJ RWKHU SODQHWV DQG VWDU V\VWHPV 7KLV HYROYHV LQWR D QHZ
KXPDQVSHFLHVLQKDELWLQJRWKHUFRPHWVDQGVWDUV\VWHPVWKHKRPRJDODFWLFXV

&+$37(5
(;75$7(55(675,$/+80$1(1*,1((5,1*9,$$5&+$($/6<0%,26,6

7KH KXPDQ EUDLQ FDQ EH FRQVLGHUHG DV D PRGLILHG DUFKDHDRQ FRORQ\ QHWZRUN 7KH
DUFKDHDRQ DUH HWHUQDO DQG FDQ ODVW IRU ELOOLRQV RI \HDUV 7KH KXPDQ EUDLQ LV EDVLFDOO\ DQ
LQIRUPDWLRQVWRUDJHV\VWHP7KHDUFKDHDRQKDVJRWGLSRODUPDJQHWLWHDQGSRUSK\ULQVDQGFDQ
IXQFWLRQDVTXDQWDOFRPSXWHU7KHDUFKDHDOFRORQ\ZLWKLWVGLSRODUPDJQHWLWHDQGSRUSK\ULQ
LQ WKH VHWWLQJ RI DUFKDHDO GLJR[LQ LQGXFHG PHPEUDQH VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ
FDQIXQFWLRQDVDSXPSHGSKRQRQV\VWHPPHGLDWLQJTXDQWDOSHUFHSWLRQ7KHDUFKDHDRQLQWKH
EUDLQ LV FDSDEOH RI LQIRUPDWLRQ VWRUDJH DW D SRLQW LQ WLPH DQG VSDFH 7KH H[SHULHQFHV DQG
LQIRUPDWLRQVWRUHGLQWKHDUFKDHDRQLVLPPRUWDODQGHWHUQDO7KHDUFKDHDRQFDQKDYHDZDYH
SDUWLFOH H[LVWHQFH DQG FDQ H[LVW LQ PXOWLSOH TXDQWDO SRVVLEOH VWDWHV DQG FDQ LQKDELW PXOWLSOH
TXDQWDO PXOWLYHUVHV 7KH LQWHUDFWLRQ EHWZHHQ LQIRUPDWLRQ VWRUHG LQ TXDQWDO FRPSXWHUV LQ
PXOWLSOHGLIIHUHQWDUFKDHDRQV\VWHPVDOORYHUWKHXQLYHUVHE\WKHTXDQWDOLQWHUDFWLRQVUHVXOWV
LQ HWHUQDO H[LVWHQFH RI LQIRUPDWLRQ LQ TXDQWDO PXOWLYHUVHV 7KH LQIRUPDWLRQ LQ WKH TXDQWDO
PXOWLYHUVHV FDQ KDYH D SDUWLFXODWH H[LVWHQFH FUHDWLQJ D QHZHU PRGH E\ TXDQWDO LQWHUDFWLRQV
EHWZHHQ LQIRUPDWLRQ VWRUHG DW PXOWLSOH SRLQWV RI WLPH 7KLV FUHDWHV WKH SDUWLFXODWH P\WKLF
ZRUOGRIKXPDQH[LVWHQFH7KHVHDUHZKDWDUHFDOOHGDV6DPVDUDV7KHPLQGLVXSORDGHGLQWR
LQIRUPDWLRQ LQ WKH QHXURQDO DUFKDHDO FRORQ\ QHWZRUN DQG LWV TXDQWDO FRPSXWHUV 7KH
LQIRUPDWLRQVWRUHGLQWKHDUFKDHDOFRORQ\QHWZRUNPHGLDWHGTXDQWDOVWDWHLVHWHUQDODQGFDQEH
FRQVLGHUHG DV D GLJLWDO YHUVLRQ RI WKH EUDLQ D PLQG GRZQORDGLQJ WHFKQLTXH RU ZKROH EUDLQ
HPXODWLRQ7KHDUFKDHDOFRORQ\QHWZRUNVWRUHVWKHKXPDQH[SHULHQFHVLQDQHWHUQDOPDQQHU
DQGFDQFRQWULEXWHWRELRORJLFDOUHLQFDUQDWLRQ
6\PELRVLVE\PLFURRUJDQLVPVHVSHFLDOO\DUFKDHDGULYHVWKHHYROXWLRQRIWKHVSHFLHV
,QVXFKDFDVHV\PELRVLVFDQEHLQGXFHGE\WUDQVIHURIPLFURIORUDV\PELRQWVDQGHYROXWLRQ
LQGXFHG(QGRV\PELRVLVE\DUFKDHDDVZHOODVDUFKDHDOV\PELRQWVLQWKHJXWFDQPRGXODWHWKH
JHQRW\SH WKH SKHQRW\SH WKH VRFLDO FODVV DQG WKH UDFLDO JURXS RI WKH LQGLYLGXDO 7KH
V\PELRWLF DUFKDHD FDQ KDYH KRUL]RQWDO DQG YHUWLFDO WUDQVPLVVLRQ (QGRV\PELRWLF DUFKDHDO
JURZWKOHDGVWRQHDQGHUWKDOLVDWLRQRIWKHVSHFLHV7KHQHDQGHUWKDOLVHGVSHFLHVLVPDWULOLQHDO
VRFLHW\DQGLQFOXGHVWKH'UDYLGLDQVWKH&HOWVWKH%DVTXHVDQGWKH%HUEHUV7KHLQKLELWLRQRI
WKHHQGRV\PELRWLFDUFKDHDOJURZWKOHDGVWRHYROXWLRQRIWKHKRPRVDSLHQV7KLVLQFOXGHVWKH
$IULFDQV $U\DQ LQYDGHUV RI 1RUWK ,QGLD DQG WKH $U\DQ GHULYHG (XURSHDQ SRSXODWLRQ
6\PELRVLV PHGLDWHG HYROXWLRQ GHSHQGV RQ WKH JXW IORUD DQG WKH GLHW 7KLV KDV EHHQ

GHPRQVWUDWHG LQ WKH GURVRSKLOD SVHXGRREVFXUD 7KH GURVRSKLOD PDWHV RQO\ ZLWK RWKHU
LQGLYLGXDOV HDWLQJ WKH VDPH GLHW :KHQ WKH GURVRSKLOD JXW PLFURIORUD LV DOWHUHG E\ IHHGLQJ
DQWLELRWLFVWKH\PDWHZLWKRWKHULQGLYLGXDOVHDWLQJGLIIHUHQWGLHWV7KHGLHWFRQVXPHGE\WKH
GURVRSKLOD UHJXODWHV LWV JXW PLFURIORUD DQG PDWLQJ KDELWV 7KH FRPELQDWLRQ RI WKH KXPDQ
JHQRPH DQG WKH V\PELRWLF PLFURELDO JHQRPH LV FDOOHG WKH KRORJHQRPH 7KH KRORJHQRPH
HVSHFLDOO\ LWV V\PELRWLF PLFURELDO FRPSRQHQW GULYHV KXPDQ HYROXWLRQ DV ZHOO DV DQLPDO
HYROXWLRQ7KHHYROXWLRQDU\GLVWDQFHEHWZHHQVSHFLHVRIZDVSGHSHQGVRQWKHJXWPLFURIORUD
7KH KXPDQ JXW PLFURIORUD UHJXODWHV WKH HQGRFULQH JHQHWLF DQG QHXURQDO V\VWHPV +XPDQV
DQG SULPDWH HYROXWLRQ GHSHQGV RQ HQGRV\PELRWLF DUFKDHD DQG JXW PLFURIORUD 7KH
HQGRV\PELRWLF DUFKDHDO JURZWK GHWHUPLQHV WKH UDFLDO GLIIHUHQFHV EHWZHHQ WKH PDWULOLQHDO
+DUDSSDQ'UDYLGLDQ VRFLHWLHV DQG WKH SDWULDUFKDO $U\DQ VRFLHW\ 7KH PDWULOLQHDO +DUDSSDQ
'UDYLGLDQ VRFLHW\ ZDV QHDQGHUWKDOLF DQG KDG LQFUHDVHG HQGRV\PELRWLF DUFKDHDO JURZWK
(QGRV\PELRWLF DUFKDHDO JURZWK DQG QHDQGHUWKDOLVDWLRQ FDQ OHDG WR DXWRLPPXQH GLVHDVH
PHWDEROLF V\QGURPH [ QHXURGHJHQHUDWLRQ FDQFHU DXWLVP DQG VFKL]RSKUHQLD 7KH
1HDQGHUWKDO JXW IORUD DQG HQGRV\PELRWLF DUFKDHD ZDV GHWHUPLQHG E\ WKH QRQYHJHWDULDQ
NHWRJHQLF KLJK IDW KLJK SURWHLQ GLHW FRQVXPHG E\ WKHP LQ WKH (XUDVLDQ VWHSSHV 7KH KRPR
VDSLHQVLQFOXGLQJWKHFODVVLFDO$U\DQWULEHVDQG$IULFDQDWHDKLJKILEUHGLHWDQGKDGORZHU
DUFKDHDO JURZWK ERWK HQGRV\PELRWLF DQG JXW 7KH GLHWDU\ ILEUH LQWDNH GHWHUPLQHV WKH
PLFURELDOGLYHUVLW\RIWKHJXW7KHKLJKILEUHLQWDNHLVDVVRFLDWHGZLWKLQFUHDVHGJHQHUDWLRQRI
VKRUWFKDLQIDWW\DFLGVEXW\ULFDFLGE\WKHJXWIORUD%XW\UDWHLVD+'$&LQKLELWRUDQGOHDGV
WR LQFUHDVHG JHQHUDWLRQ DQG LQFRUSRUDWLRQ RI HQGRJHQRXV UHWURYLUDO VHTXHQFHV 7KH KLJK
GLHWDU\ ILEUH LQWDNH UHODWHG LQFUHDVHG +(59 VHTXHQFHV OHDGV WR LQFUHDVHG V\QDSWLF
FRQQHFWLYLW\DQGDGRPLQDQWIURQWDOFRUWH[DVVHHQLQKRPRVDSLHQVSHFLHV7KHQHDQGHUWKDOLF
VSHFLHVFRQVXPHDNHWRJHQLFQRQYHJHWDULDQKLJKIDWKLJKSURWHLQORZILEUHGLHW7KLVOHDGVWR
GHFUHDVHG JHQHUDWLRQ RI HQGRJHQRXV +(59 VHTXHQFHV DQG UHGXFHG JHQRPLF IOH[LELOLW\ LQ
QHDQGHUWKDOLFVSHFLHV7KLVSURGXFHVVPDOOHUFHUHEUDOFRUWH[DQGDGRPLQDQWFHUHEHOODUFRUWH[
LQ WKH QHDQGHUWKDOLF EUDLQ 7KH KRPR QHDQGHUWKDOLF VSHFLHV E\ WKH ORZ GLHWDU\ ILEUH LQWDNH
VWDUYH WKHLU PLFURELDO VHOI 7KLV OHDGV WR LQFUHDVHG HQGRV\PELRWLF DQG JXW DUFKDHDO JURZWK
7KH PXFRXV PHPEUDQH OLQLQJ WKH JXW EHFRPHV WKLQQHG RXW DV WKH JXW EDFWHULD HDWV XS WKH
PXFRXVOLQLQJRIWKHJXW7KLVUHVXOWVLQOHDNDJHRIHQGRWR[LQDQGDUFKDHDIURPWKHJXWWRWKH
EORRG EUHDFKLQJ WKH EDUULHU DQG SURGXFHV D FKURQLF LPPXQRVWLPXODWRU\ LQIODPPDWRU\ VWDWH
ZKLFK IRUPV WKH EDVLV RI DXWRLPPXQH GLVHDVH PHWDEROLF V\QGURPH QHXURGHJHQHUDWLRQ
RQFRJHQLFDQGSV\FKLDWULFGLVRUGHUV7KH1HDQGHUWKDOVSHFLHVHDWDORZILEUHGLHWDQGKDYHD
GHILFLHQF\RIPLFURELRWDDFFHVVHGFDUERK\GUDWHJHQHUDWLQJVKRUWFKDLQIDWW\DFLG7KHUHLVD

GHILFLHQF\ RI EXW\UDWH JHQHUDWHG LQ WKH JXW IURP WKH GLHWDU\ ILEUH ZKLFK FDQ SURGXFH
VXSSUHVVLRQRIWKHFKURQLFLQIODPPDWRU\SURFHVV7KH1HDQGHUWKDOVKDYHJRWWKHIHUPHQWDWLRQ
E\SURGXFWGHILFLHQF\V\QGURPH7KHLQGXFWLRQRIQHDQGHUWKDOLFVSHFLHVGHSHQGVRQWKHORZ
ILEUHLQWDNHLQGXFHGKLJKDUFKDHDOGHQVLW\HQGRV\PELRWLFDQGWKHJXWPLFURIORUD7KHKRPR
VDSLHQVVSHFLHVFRQVXPHDKLJKILEUHGLHWJHQHUDWLQJODUJHDPRXQWVRIVKRUWFKDLQIDWW\DFLG
EXW\UDWH ZKLFK LQKLELWV HQGRV\PELRWLF DQG JXW DUFKDHDO JURZWK 7KH PLFURELDO VHOI RI WKH
KRPRVDSLHQVSHFLHVLVPRUHGLYHUVHWKDQWKDWRIWKHQHDQGHUWKDOLFVSHFLHVDQGWKHDUFKDHDO
SRSXODWLRQGHQVLW\LVOHVV7KLVUHVXOWVLQDSURWHFWLRQDJDLQVWFKURQLFLQIODPPDWLRQDQGWKH
LQGXFWLRQ RI GLVHDVHV OLNH DXWRLPPXQH GLVHDVH PHWDEROLF V\QGURPH QHXURGHJHQHUDWLRQ
RQFRJHQLFDQGSV\FKLDWULFGLVRUGHUV7KHKRPRVDSLHQVSHFLHVKDYHDKLJKHULQWDNHRIGLHWDU\
ILEUHFRQWULEXWLQJWRDURXQGJGD\DQGDGLYHUVHPLFURELDOJXWIORUDZLWKOHVVRIDUFKDHDO
SRSXODWLRQ GHQVLW\ 7KH EXW\UDWH JHQHUDWHG IURP GLHWDU\ ILEUH SURGXFHV DQ
LPPXQRVXSSUHVVLYHVWDWH7KXVWKHV\PELRWLFPLFURIORUDZLWKOHVVRIDUFKDHDOGHQVLW\LQGXFHV
DKRPRVDSLHQVSHFLHV7KLVFDQEHGHPRQVWUDWHGE\H[SHULPHQWDOLQGXFWLRQRIHYROXWLRQ$
KLJK ILEUH KLJK 0&7 GLHW DV ZHOO DV DQWLELRWLFV GHULYHG IURP KLJKHU SODQWV DQG IHFDO
PLFURELRWD WUDQVIHU IURP VDSLHQ VSHFLHV FDQ LQKLELW WKH 1HDQGHUWKDO PHWDERORQRPLFV DQG
SKHQRW\SHDQGLQGXFHWKHHYROXWLRQRIKRPRVDSLHQV$ORZILEUHKLJKIDWKLJKSURWHLQGLHWDV
ZHOO DV IHFDO PLFURELRWD WUDQVIHU IURP WKH 1HDQGHUWKDO VSHFLHV FDQ SURGXFH 1HDQGHUWKDO
PHWDERORQRPLFV DQG SKHQRW\SH LQGXFLQJ WKH HYROXWLRQ RI KRPR QHDQGHUWKDOLV 7UDQVIHU RI
FRORQLF PLFURIORUD SUHGRPLQDQWO\ DUFKDHD DQG PRGXODWLRQ RI HQGRV\PELRWLF DUFKDHD E\ D
SDOHR GLHW DQG DQWLELRWLFV IURP KLJKHU SODQWV FDQ OHDG WR LQWHUFRQYHUVLRQ RI KXPDQ VSHFLHV
EHWZHHQ KRPR QHDQGHUWKDOLV DQG KRPR VDSLHQV 7KH KRORJHQRPH HVSHFLDOO\ WKH PLFURELDO
IORUD HQGRV\PELRWLFJXW GULYHV KXPDQ DQG DQLPDO HYROXWLRQ DQG FDQ EH H[SHULPHQWDOO\
LQGXFHG6\PELRWLFPLFURIORUDGULYHVHYROXWLRQ(YHU\DQLPDOHYHU\KXPDQVSHFLHVGLIIHUHQW
FRPPXQLWLHVGLIIHUHQWUDFHVDQGGLIIHUHQWFDVWHKDYHWKHLUVLJQDWXUHHQGRV\PELRWLFDQGJXW
PLFURIORUD ZKLFK FDQ EH WUDQVPLWWHG YHUWLFDOO\ DQG KRUL]RQWDOO\ 7KXV V\PELRVLV GULYHV
KXPDQDQGDQLPDOHYROXWLRQ
7KLV FDQ EH LQWHUSUHWHG RQ WKH EDVLV RI 9LOODUUHDO K\SRWKHVLV RI JURXS LGHQWLW\ DQG
FRRSHUDWLYLW\ RI 51$ FROOHFWLYHV $UFKDHDO V\PELRVLV LQ WKH JXW DQG LQ WKH WLVVXH VSDFHV
GHWHUPLQHV VSHFLDWLRQ RI KXPDQ EHLQJV DV KRPR VDSLHQV DQG KRPR QHDQGHUWKDOLV 7KH
HQGRV\PELRWLF DUFKDHD FDQ VHFUHWH 51$ YLURLGV DQG YLUXVHV DQG WKHUH LV D YLURLGDUFKDHDO
KRVWUHODWLRQVKLSEHWZHHQWKHWZR$G\QDPLFVWDWHRIYLUXVO\VLVDQGSHUVLVWHQFHFDQRFFXULQ
DUFKDHDVXJJHVWLQJWKDWYLUDODGGLFWLRQFDQRFFXULQDUFKDHD7KH51$YLURLGVLQWKHDUFKDHD

FRRUGLQDWH WKHLU EHKDYLRU E\ LQIRUPDWLRQ H[FKDQJH PRGXODWLRQ DQG LQQRYDWLRQ JHQHUDWLQJ
QHZVHTXHQFHEDVHGFRQWHQW7KLVRFFXUVGXHWRDSKHQRPHQRQRIV\PELRVLVLQFRQWUDVWWRWKH
FRQFHSWRIVXUYLYDORIWKHILWWHVW7KHJHQHUDWLRQRIQHZ51$YLURLGDOVHTXHQFHVLVDUHVXOWRI
SUDFWLFDOFRPSHWHQFHRIOLYLQJDJHQWVWRJHQHUDWHQHZVHTXHQFHVE\V\PELRVLVDQGVKDULQJ
7KLV UHSUHVHQWV KLJKO\ SURGXFWLYH 51$ YLURLGDO TXDVLVSHFLHV FRQVRUWLD IRU WKH HYROXWLRQ
FRQVHUYDWLRQDQGSODVWLFLW\ RI JHQRPLF HQYLURQPHQWV 7KHEHKDYLRXUDO PRWLYHV RI WKH 51$
DUH VLQJOH VWHP ORRS VWUXFWXUHV 7KH\ KDYH VHOI IROGLQJ DQG JURXS EXLOGLQJ FDSDELOLWLHV
GHSHQGLQJ XSRQ IXQFWLRQDO QHHGV 7KH HYROXWLRQ SURFHVV GHSHQGV XSRQ ZKDW 9LOODUHDO FDOOV
51$VWHPORRSFRQVRUWLD7KHZKROHHQWLW\FDQIXQFWLRQRQO\LISDUWLFLSDWRU\JURXSVRI51$
YLURLGV FDQ JHW WKHLU IXQFWLRQ FRRUGLQDWHG 7KHUH LV FRPSHWHQW GHQRYR JHQHUDWLRQ RI QHZ
VHTXHQFHVE\FRRSHUDWLYHDFWLRQDQGQRWE\FRPSHWLWLRQ7KHVH51$YLURLGDOJURXSFRQVRUWLD
FDQFRQWULEXWHWRWKHKRVWLGHQWLW\JURXSLGHQWLW\DQGJURXSLPPXQLW\7KHWHUPXVHGIRUWKLV
LV 51$ YLURLGDO VRFLRORJLFDO EHKDYLRU 7KH 51$ YLURLGV FDQ EXLOG JURXSV WKDW LQYDGH WKH
DUFKDHDDQGFRPSHWHDVDJURXSIRUOLPLWHGUHVRXUFHVVXFKKRVWJHQRPHV$NH\EHKDYLRXUDO
PRWLI LV DEOH WR LQWHJUDWH D SHUVLVWHQW OLIH VW\OH LQWR WKH DUFKDHDO FRORQ\ ZLWK WKH DGGLFWLRQ
PRGXOH IRUPLQJ FRPSHWLQJ YLURLGDO JURXSV WKDW DUH FRXQWHU EDODQFLQJ HDFK RWKHU WRJHWKHU
ZLWKWKHDUFKDHDOKRVWLPPXQHV\VWHP7KLVOHDGVWRFUHDWLRQRIDQLGHQWLW\IRUWKHDUFKDHDO
FRORQ\ DQG WKH KRPR QHDQGHUWKDOLV KRVW 9LURLGV FDQ NLOO WKHLU KRVW DQG DOVR FRORQL]H WKHLU
KRVWZLWKRXWGLVHDVHDQGSURWHFWWKHKRVWIURPVLPLODUYLUXVHVDQGYLURLGV7RJHWKHUZLWKO\VLV
DQGSURWHFWLRQZHVHHDYLURLGFRORQL]HGKRVWWKDWLVERWKV\PELRWLFDQGLQQRYDWLYHDFTXLULQJ
QHZ FRPSHWHQW FRGHV 7KXV WKH YLURLGKRVW UHODWLRQVKLS LV D SHUYDVLYH DQFLHQW IRUFH LQ WKH
RULJLQDQGHYROXWLRQRIOLIH&XPXODWLYHHYROXWLRQDWWKHOHYHORI51$YLURLGVLVOLNHDUDWFKHW
HIIHFWXVHGIRUWUDQVPLVVLRQRIFXOWXUDOPHPHV7KLVOHDUQLQJDFFXPXODWHVVRWKDWHYHU\QHZ
JHQHUDWLRQ PXVW QRW UHSHDW DOO LQQRYDWLYH WKRXJKWV DQG WHFKQLTXHV 4XDVLVSHFLHV RI 51$
YLURLGV DUH FRRSHUDWLYH DQG H[FOXVLYH RI RWKHU TXDVLVSHFLHV 7KH\ KDYH JURXS UHFRJQLWLRQ
GLIIHUHQWLDWLQJ VHOIJURXSV DQG QRQVHOIJURXSV DOORZLQJ IRU TXDVLVSHFLHV WR SURPRWH WKH
HPHUJHQFHRIJURXSLGHQWLW\:LWKJURXSLGHQWLW\YLDFRXQWHUUHODWHGDGGLFWLRQPRGXOHVWZR
RSSRVLQJFRPSRQHQWVPXVWEHSUHVHQWDQGZRUNFRKHUHQWO\DQGGHILQHWKHJURXSDVDZKROH
%LRORJLFDO LGHQWLW\ LV FRQVWLWXWHG E\ G\QDPLF LQWHUDFWLRQ RI FRRSHUDWLYH JURXSV 9LUXV
DGGLFWLRQPRGXOHLVDQHVVHQWLDOVWUDWHJ\IRUH[LVWHQFHRIOLIHLQWKHYLURVSKHUH9LUXVHVDUH
WUDQVPLVVLEOHDQGFDQSHUVLVWLQVSHFLILFKRVWSRSXODWLRQOHDGLQJWRDIRUPRIJURXSLPPXQLW\
LGHQWLW\VLQFHLGHQWLFDOEXWXQFRORQLVHGKRVWSRSXODWLRQUHPDLQVVXVFHSWLEOHWRDNLOOLQJDFWLRQ
RIO\WLFYLUXVHV,QWKLVZD\ZHVHHWKDWYLUXVHVDUHQHFHVVDU\SURYLGLQJRSSRVLQJIXQFWLRQV
IRU DGGLFWLRQSHUVLVWHQFHSURWHFWLRQDQGO\WLFNLOOLQJ9LURLGVFDQ IXQFWLRQ DV FRQVRUWLD DQ

HVVHQWLDO LQWHUDFWLQJ JURXS DQG SURYLGH D PHFKDQLVP IURP ZKLFK FRQVRUWLDO IXQFWLRQ FRXOG
HPHUJHLQWKHRULJLQRISURWRELRWLFOLIH*HQHWLFSDUDVLWHVFDQDFWDVDJURXSTVF%XWIRU
WKLVJURXSWREHFRKHUHQWWKH\PXVWDWWDLQJURXSLGHQWLW\DQGWKLVLVW\SLFDOO\YLDDQDGGLFWLRQ
VWUDWHJ\$QWLYLUDODQGSURYLUDOV\VWHPLQWKHDUFKDHDZLOOWKHPVHOYHVHPHUJHLQWKHKRVWIURP
YLUXV GHULYHG LQIRUPDWLRQ 7KH DUFKDHDO YLUXVHV WKHPVHOYHV SURYLGH WKH FULWLFDO IXQFWLRQ
UHTXLUHG IRU DQWLYLUDO GHIHQVH 7KH RSSRVLQJ IXQFWLRQV DUH WKH EDVLV RI DGGLFWLRQ PRGXOHV
7KXVWKHHPHUJHQFHRIJURXSLGHQWLW\EHFRPHVDQHVVHQWLDODQGHDUO\HYHQWLQWKHHPHUJHQFH
RIOLIH7KLVLVFRKHUHQWWRWKHEDVLFDOO\JURXSEHKDYLRURI51$YLURLGVLQDUFKDHD7KLVJURXS
VHOHFWLRQ DQG JURXS LGHQWLW\ DUH QHHGHG WR FUHDWH LQIRUPDWLRQ FRKHUHQFH DQG QHWZRUN
IRUPDWLRQ DQG WR HVWDEOLVK D V\VWHP RI FRPPXQLFDWLRQ FRGH FRPSHWHQW LQWHUDFWLRQV 7KLV
LGHQWLW\ VHUYHV DV LQIRUPDWLRQ DOVR IRU WKH RQHV WKDW GR QRW VKDUH WKLV LGHQWLW\ 7KLV LV WKH
EHJLQQLQJ RI VHOIQRQVHOIGLIIHUHQWLDWLQJ FDSDELOLW\ ,Q WKLV ZD\ YLURLGV SURPRWH WKH
HPHUJHQFH RI JURXS LGHQWLW\ LQ DUFKDHDO FRORQLHV DQG KRVW KXPDQV 7KH DUFKDHDO FRORQ\
LGHQWLW\GHSHQGVXSRQWKHFRORQL]LQJVHWRI51$YLURLGVSURGXFLQJDFRKHUHQWQHWZRUNWKDWLV
LQFOXVLYHRSSRVLQJIXQFWLRQVDQGIDYRXUVWKHSHUVLVWHQFHRISDUDVLWHGHULYHGQHZLQIRUPDWLRQ
2QWKHEDVLVRISRSXODWLRQEDVHGIXQFWLRQVRI51$'1$FDQEHFRQVLGHUHGDVDKDELWDWIRU
FRQVRUWLD 51$ 7KXV 51$ YLURLGV RI WKH DUFKDHD DUH LQYROYHG LQ FRPSOH[ PXOWLFHOOXODU
LGHQWLW\ 7KLV LV FDOOHG DV WKH *DQJHQ K\SRWKHVLV E\ 9LOODUUHDO 7KH *DQJHQ GHVFULEHV WKH
HPHUJHQFHRIFRPPRQO\VKDUHGFRGHXVHJURXSPHPEHUVKLSDQGFROOHFWLYHOLYLQJIXQFWLRQ
RI 51$ YLURLGV &RPPXQLFDWLRQ LV D FRGH GHSHQGHG LQWHUDFWLRQ DQG WUDQVPLVVLRQ RI
LQIHFWLRXVFRGHGHILQHVWKHRULJLQRIWKHYLURVSKHUH7KLVLVVXHUHIHUVWRWKHLGHDRIFROOHFWLYH
RI 51$ YLURLGV ZLWK LQKHUHQW WR[LF DQG DQWLWR[LF IHDWXUHV VKRXOG EH DEOH WR WUDQVPLW RU
FRPPXQLFDWH WKHVH DJHQWV DQG WKHLU IHDWXUHV WR D QHDUE\ FRPSHWLQJ SRSXODWLRQ ,W VWURQJO\
IDYRXUVWKHVXUYLYDORI51$YLURLGDOSRSXODWLRQZLWKFRPSDWLEOHDGGLFWLRQPRGXOHVWKDWZLOO
LQKLELW DJHQW WR[LFLW\ DQG DOORZ SHUVLVWHQFH RI QHZ DJHQWV 7KLV LV WKXV WKH VXUYLYDO RI WKH
SHUVLVWHQWO\ FRORQL]HG VHW ZKLFK LV DQ LQKHUHQWO\ V\PELRWLF DQG FRQVRUWLDO SURFHVV ,W DOVR
SURPRWHVLQFUHDVLQJFRPSOH[LW\DQGLGHQWLW\LPPXQLW\RIWKHKRVWFROOHFWLYHYLDDQHZDJHQW
FRORQL]DWLRQ DQG VWDEOH DGGLWLRQ 7KXV WKH WUDQVPLVVLRQ RI 51$ DJHQWV DWWDLQV ERWK
FRPPXQLFDWLRQ DQG UHFRJQLWLRQ RI JURXS PHPEHUVKLS ,Q WKLV ZD\ WKH HPHUJHQFH RI WKH
YLURVSKHUHPXVWKDGEHHQDQHDUO\HYHQWLQWKHRULJLQRIOLIHDQGJURXSLGHQWLW\9LUXVHVDQG
YLURLGVDUHJHQHWLFSDUDVLWHVDQGWKHPRVWDEXQGDQWOLYLQJHQWLWLHVRQHDUWK7KHYLURVSKHUHLV
D QHWZRUN RI LQIHFWLRXV JHQHWLF DJHQWV (YROXWLRQ FRQVHUYDWLRQ DQG SODVWLFLW\ RI JHQHWLF
LGHQWLWLHV DUH WKH UHVXOW RI FRRSHUDWLYH FRQVRUWLD RI 51$ YLURLGV WKDW DUH FRPSHWHQW WR
FRPPXQLFDWH7KXVWKHDUFKDHDOYLURLGDOFRQVRUWLDFDQV\PELRWLFDOO\VKDUHDQGFRPPXQLFDWH

SURGXFLQJQHZVHTXHQFHVDQGJLYHDQLGHQWLW\WRWKHDUFKDHDOFRORQ\7KHORZILEUHGLHWDQG
H[WUHPHWHPSHUDWXUHVRIWKH(XUDVLDQVWHSSHVOHDGVWRDUFKDHDOPXOWLSOLFDWLRQDQGLQGXFWLRQ
RI WKH KRPR QHDQGHUWKDOLV VSHFLHV 7KH DUFKDHDO FRORQ\¶V FKDUDFWHULVWLFV DUH GHWHUPLQHG E\
WKH FRRSHUDWLYH FRQVRUWLD RI 51$ YLURLGV LQ WKH DUFKDHD DQG WKH DUFKDHDO FRORQ\ LGHQWLW\
GHWHUPLQHV WKH KRPR QHDQGHUWKDOLV LGHQWLW\ 7KXV WKH DUFKDHDO FRORQLHV ZLWK WKHLU TXDVL
VSHFLHV FRQVRUWLD RI 51$ YLURLGV GHWHUPLQH WKH KRPR QHDQGHUWKDOLV LGHQWLW\ 7KH QHZ
VHTXHQFHJHQHUDWLRQE\WKH51$YLURLGDOFRQVRUWLD¶VV\PELRWLFVKDULQJFKDUDFWHUFRQWULEXWHV
WR WKH GLYHUVLW\ LQ WKH EHKDYLRU DQG FUHDWLYLW\ RI WKH KRPR QHDQGHUWKDOLV SRSXODWLRQ 7KH
DUFKDHDO 51$ YLUXVHV DQG YLURLGV DQG WKH DUFKDHDO FRORQLHV WKHPVHOYHV SURWHFW WKH KRPR
QHDQGHUWKDOLVSRSXODWLRQIURPUHWURYLUDOLQIHFWLRQV7KXVWKHKRPRQHDQGHUWKDOLVSRSXODWLRQ
LV UHWURYLUDO UHVLVWDQW DQG WKH TXDVLVSHFLHV FRQVRUWLD RI DUFKDHD DQG DUFKDHDO YLURLGV JLYHV
WKHPDJURXSLGHQWLW\DVUHWURYLUDOUHVLVWDQW7KXVWKHTXDVLVSHFLHVFRQVRUWLDRIDUFKDHDDQG
51$ YLURLGV JLYH KRPR QHDQGHUWKDOLV FRORQLHV WKHLU LGHQWLW\ DQG LGHD RI VHOI 7KH KRPR
QHDQGHUWKDOLV LV UHVLVWDQW WR UHWURYLUDO LQIHFWLRQ OLNH WKH $XVWUDOLDQ DERULJLQDOV DQG WKH
HQGRJHQRXVUHWURYLUDOVHTXHQFHVLQWKH1HDQGHUWKDOJHQRPHDUHOLPLWHG7KLVOHDGVWRODFNRI
SODVWLFLW\DQGG\QDPLFLW\RIWKHKXPDQJHQRPHDQGWKHFHUHEUDOFRUWH[LQLOOGHYHORSHGZLWK
DGRPLQDQWLPSXOVLYHFHUHEHOODUFRUWH[LQWKHKRPRQHDQGHUWKDOLVSRSXODWLRQ7KLVSURGXFHV
WKHLPSXOVLYHFUHDWLYHVXUUHDOLVWLFVSLULWXDOQHDQGHUWKDOLFEUDLQ$VWKHH[WUHPHRIWHPSHUDWXUH
JRHVRIIDQGWKH,FHDJHHQGVWKHDUFKDHDOSRSXODWLRQGHQVLW\DOVRFRPHVGRZQ7KLVDOVRFDQ
UHVXOWIURPWKHFRQVXPSWLRQRIDKLJKILEUHGLHWLQWKH$IULFDQFRQWLQHQW7KHKLJKILEUHGLHW
GLJHVWHG E\ FORVWULGLDO FOXVWHUV LQ WKH FRORQ SURPRWHV EXW\UDWH V\QWKHVLV DQG EXW\UDWH ZLOO
LQGXFH+'$&LQKLELWLRQDQGH[SUHVVLRQRIUHWURYLUDOVHTXHQFHVLQWKHSULPDWHJHQRPH7KLV
OHDGV WR LQFUHDVH LQ HQGRJHQRXV UHWURYLUDO VHTXHQFHV LQ WKH KXPDQ JHQRPH LQFUHDVLQJ
JHQRPLFG\QDPLFLW\DQGWKHHYROXWLRQRIFRPSOLFDWHGFHUHEUDOFRUWH[GRPLQDQWEUDLQZLWKLWV
FRPSOH[ V\QDSWLF FRQQHFWLYLW\ LQ WKH KRPR VDSLHQV 7KLV OHDGV RQWR D ORJLFDO
FRPPRQVHQVLFDOSUDJPDWLFDQGSUDFWLFDOKRPRVDSLHQEUDLQ7KHKRPRVDSLHQVGXHWRODFN
RI DUFKDHD DQG WKH 51$ YLURLGV DUH VXVFHSWLEOH UHWURYLUDO LQIHFWLRQ 7KXV WKH DUFKDHDO
FRORQLHV DQG 51$ YLURLGDO TXDVLVSHFLHV FRQVRUWLD GHWHUPLQH WKH HYROXWLRQ RI WKH KXPDQ
VSHFLHVDQGWKHEUDLQQHWZRUNV7KXVH[WUHPHVRIWHPSHUDWXUHILEUHLQWDNHDUFKDHDOFRORQ\
GHQVLW\ 51$ YLURLGDO TXDVLVSHFLHV JURXS LGHQWLW\ DQG UHWURYLUDO UHVLVWDQFH GHFLGHV RQ WKH
HYROXWLRQRIKRPRVDSLHQVDQGKRPRQHDQGHUWKDOLVDVZHOODVWKHEUDLQQHWZRUNV7KHSUHVHQW
H[WUHPHV RI WHPSHUDWXUH DQG ORZ ILEUH LQWDNH LQ FLYLOL]HG VRFLHW\ FDQ OHDG WR LQFUHDVH LQ
DUFKDHDO SRSXODWLRQ GHQVLWLHV DQG TXDVLVSHFLHV 51$ YLURLGDO QHWZRUNV JHQHUDWLQJ D QHZ
KRPRQHDQGHUWKDOLVLQDQHZQHDQGHUWKDOLFDQWKURSRFHQHDJHDVRSSRVHGWRWKHSUHVHQWKRPR

VDSLHQDQWKURSRFHQHDJH7KHDUFKDHDOSRSXODWLRQGHQVLWLHVDQGTXDVLVSHFLHV51$YLURLGDO
QHWZRUNV GHWHUPLQH KRPR VDSLHQKRPR QHDQGHUWKDOLV VSHFLHV UDFLDO FDVWH FRPPXQLW\
QDWLRQDO VH[XDO PHWDEROLF SKHQRW\SLF LPPXQH JHQRW\SLF QHXURQDO SV\FKLDWULF
SV\FKRORJLFDO DQG LQGLYLGXDO LGHQWLW\ 7KH DUFKDHD VHFUHWHV WKH WUHSKRQH GLJR[LQ ZKLFK FDQ
HGLWWKH51$YLURLGVDQGJHQHUDWHQHZVHTXHQFHV$UFKDHDOGLSRODUPDJQHWLWHDQGSRUSK\ULQV
LQWKHVHWWLQJRIGLJR[LQLQGXFHGPHPEUDQHVRGLXPSRWDVVLXP$73DVHLQKLELWLRQFDQSURGXFH
D SXPSHG SKRQRQ V\VWHP PHGLDWHG TXDQWDO SHUFHSWLYH VWDWH DQG TXDQWDO FRPPXQLFDWLRQ LQ
WKH51$YLURLGDOV\PELRWLFV\VWHPJHQHUDWLQJQHZVHTXHQFHVE\VWHURLGDOGLJR[LQHQ]\PDWLF
HGLWLQJDFWLRQ7KLVJLYHVULVHWRDUFKDHDO51$YLURLGDOTXDVLVSHFLHVV\PELRWLFGLYHUVLW\DQG
LGHQWLW\WRVSHFLHVUDFHFDVWHVH[FXOWXUHLQGLYLGXDODQGQDWLRQDOLGHQWLW\
7KH URRWV RI :HVWHUQ FLYLOL]DWLRQDO GLVHDVH FDQ EH UHODWHG WR WKH VWDUYDWLRQ RI WKH
FRORQLF PLFURIORUD 7KH FRORQLF PLFURIORUD GHSHQGV XSRQ FRPSOH[ FDUERK\GUDWHV GHULYHG
IURP GLHWDU\ ILEUH 7KH SURFHVVHG IRRG RI KLJK SURWHLQ IDW DQG VXJDUV LV GLJHVWHG DQG
DEVRUEHG LQ WKH VWRPDFK DQG VPDOO LQWHVWLQH $ YHU\ OLWWOH RI LW UHDFKHV WKH FRORQ DQG
ZLGHVSUHDG XVH RI DQWLELRWLFV LQ PHGLFLQH KDV SURGXFHG PDVV H[WLQFWLRQ RI WKH FRORQLF
PLFURIORUD 7KH FRORQLF PLFURIORUD LV H[WUHPHO\ GLYHUVH DQG WKH GLYHUVLW\ LV ORVW 7KHUH DUH
WULOOLRQEDFWHULDLQWKHFRORQEHORQJLQJWRVSHFLHV7KH\UHJXODWHWKHLPPXQHV\VWHP
E\ LQGXFLQJ WKH 7UHJXODWRU\ FHOOV $ KLJK ILEUH GLHW FRQWULEXWHV WR FRORQLF PLFURELRWD
GLYHUVLW\ ,QWHUDFWLRQ ZLWK IDUP DQLPDOV OLNH FRZV DQG GRJV DOVR FRQWULEXWHV WR WKH FRORQLF
PLFURIORUDGLYHUVLW\7KHW\SLFDO:HVWHUQGLHWRIKLJKIDWKLJKSURWHLQDQGVXJDUVGHFUHDVHV
WKH FRORQLF PLFURELRWD GLYHUVLW\ DQG LQFUHDVH FRORQLFHQGRV\PELRWLF DUFKDHD SURGXFLQJ
PHWKDQRJHQHVLV7KHFRORQLFDUFKDHDIHHGXSRQWKHPXFRXVOLQLQJRIWKHFRORQDQGSURGXFHV
OHDNDJHRIDUFKDHDLQWRWKHEORRGDQGWLVVXHV\VWHPSURGXFLQJHQGRV\PELRWLFDUFKDHD7KLV
UHVXOWVLQDFKURQLFLQIODPPDWRU\VWDWH7KHKLJKILEUHGLHWRI$IULFDQV6RXWK$PHULFDQVDQG
,QGLDQV SURGXFHV LQFUHDVHG FRORQLF PLFURELRWD GLYHUVLW\ DQG LQFUHDVH LQ FORVWULGLDO FOXVWHUV
JHQHUDWLQJ 6&)$ LQ WKH JXW +LJK ILEUH GLHW LV SURWHFWLYH DJDLQVW PHWDEROLF V\QGURPH DQG
GLDEHWHV PHOOLWXV 0HWDEROLF V\QGURPH LV UHODWHG WR GHJHQHUDWLRQ FDQFHU QHXURSV\FKLDWULF
LOOQHVV DQG DXWRLPPXQH GLVHDVH $ KLJK ILEUH GLHW RI XS WR JGD\ FDQ EH FDOOHG DV D JXW
GLHW7KHFRORQLFPLFURIORUDHVSHFLDOO\WKHFORVWULGLDOFOXVWHUGLJHVWVWKHILEUHJHQHUDWLQJVKRUW
FKDLQ IDWW\ DFLGV ZKLFK UHJXODWHV LPPXQLW\ DQG PHWDEROLVP +LJK ILEUH GLHW LQFUHDVHV WKH
FRORQLF PXFXV VHFUHWLRQ DQG WKH WKLFNQHVV RI WKH PXFXV OLQLQJ $ KLJK ILEUH GLHW SURGXFHV
LQFUHDVHLQFORVWULGLDOFOXVWHUVDQGPXFRXVVHFUHWLRQ7KLVSURGXFHVDVWURQJJXWEORRGEDUULHU
DQGSUHYHQWVPHWDEROLFHQGRWR[HPLDZKLFKSURGXFHVDFKURQLFLQIODPPDWRU\UHVSRQVH+LJK

GLHWDU\ ILEUH LQWDNH DQG WKH GLYHUVLW\ RI WKH FRORQLF PLFURIORUD ZLWK SURPLQHQW 6&)$
SURGXFLQJFORVWULGLDOFOXVWHUVDUHLQWHUUHODWHG7KHFORVWULGLDOFOXVWHUVPHWDEROLVHWKHFRPSOH[
FDUERK\GUDWHLQGLHWDU\ILEUHWRVKRUWFKDLQIDWW\DFLGVEXW\UDWHSURSLRQDWHDQGDFHWDWH7KH\
LQFUHDVHWKH7UHJXODWRU\IXQFWLRQ$KLJKILEUHGLHWLQFUHDVHVWKHEDFWHURLGHVDQGUHGXFHVWKH
ILUPHFXWHV RI WKH FRORQLF PLFURIORUD $ KLJK ILEUH GLHW LV DVVRFLDWHG ZLWK D ORZ ERG\PDVV
LQGH[ $ ORZ ILEUH GLHW SURGXFHV LQFUHDVH LQ FRORQLF DUFKDHDO JURZWK DV ZHOO DV
HQGRV\PELRWLFWLVVXHDQGEORRGDUFKDHD7KLVSURGXFHVPRUHRIPHWKDQRJHQHVLVUDWKHUWKDQ
VKRUW FKDLQ IDWW\ DFLG V\QWKHVLV FRQWULEXWLQJ WR LPPXQH DFWLYDWLRQ $ ORZ ILEUH GLHW LV
DVVRFLDWHGDKLJKERG\PDVVLQGH[DQGFKURQLFV\VWHPLFLQIODPPDWLRQ*HUPIUHHPLFHVKRZ
FDUGLDFSXOPRQDU\DQGOLYHUDWURSK\*XWPLFURIORUDLVUHTXLUHGIRUWKHJHQHUDWLRQRIRUJDQ
V\VWHPV7KHJXWPLFURIORUDLVDOVRUHTXLUHGIRUJHQHUDWLRQRI7UHJXODWRU\FHOOV+LJKILEUH
LQWDNH SURGXFHV PRUH FRORQLF PLFURELRWD GLYHUVLW\ DQG LQFUHDVH LQ FORVWULGLDO FOXVWHUV DQG
IHUPHQWDWLRQ E\ SURGXFWV OLNH EXW\UDWH ZKLFK VXSSUHVVHV LQIODPPDWLRQ DQG LQFUHDVHV 7
UHJXODWRU\ FHOOV $ ORZ ILEUH GLHW SURGXFHV LQFUHDVH LQ DUFKDHDO JURZWK PHWKDQRJHQHVLV
GHVWUXFWLRQRIWKHPXFXVOLQLQJDQGOHDNDJHRIWKHFRORQLFDUFKDHDSURGXFLQJHQGRV\PELRWLF
WLVVXH DQG EORRG DUFKDHD 7KLV SURGXFHV DQ LPPXQH K\SHUUHDFWLYLW\ FRQWULEXWLQJ WR WKH
PRGHUQ SODJXHV RI FLYLOL]DWLRQ PHWDEROLF V\QGURPH VFKL]RSKUHQLD DXWLVP FDQFHU
DXWRLPPXQLW\ DQG GHJHQHUDWLRQV 7KH JXW PLFURELRWD GULYHV KXPDQ HYROXWLRQ 7KH KXPDQV
GRQRWKRVWWKHJXWPLFURELRWDEXWWKHJXWPLFURELRWDKRVWXV7KHKXPDQV\VWHPIRUPVDQ
HODERUDWH FXOWXUH ODERUDWRU\ IRU WKH SURSDJDWLRQ DQG VXUYLYDO RI WKH PLFURELRWD 7KH KXPDQ
V\VWHPLVLQGXFHGE\WKHPLFURELRWDIRUWKHLUVXUYLYDODQGJURZWK7KHKXPDQV\VWHPH[LVWV
IRU WKH PLFURELRWD DQG QRW WKH RWKHU ZD\ URXQG 7KH VDPH PHFKDQLVP KROGV JRRG LQ SODQW
V\VWHPV3ODQWVWDUWHGWKHFRORQL]HGHDUWKDVWKH\VWDUWHGV\PELRVLQJZLWKEDFWHULDLQWKHURRWV
V\VWHPV ZKLFK FDQ GHULYH QXWULHQWV IURP WKH VRLO +XPDQ EHLQJV IRUP D PRELOH FXOWXUH
ODERUDWRU\IRUWKHPRUHHIIHFWLYHSURSDJDWLRQDQGVXUYLYDORIWKHPLFURELRWD7KHPLFURELRWD
LQGXFHV WKH IRUPDWLRQ RI VSHFLDOL]HG LPPXQH FHOOV FDOOHG LQQDWH O\PSKRLG FHOOV 7KH LQQDWH
O\PSKRLG FHOOV ZLOO GLUHFW WKH O\PSKRF\WHV QRW WR DWWDFN WKH EHQHILFLDO EDFWHULD 7KXV WKH
HQGRV\PELRWLF DUFKDHD DQG WKH JXW DUFKDHD LQGXFH KXPDQ SULPDWH DQG DQLPDO HYROXWLRQ WR
JHQHUDWHVWUXFWXUHVIRUWKHPWRVXUYLYHDQGSURSDJDWH7KHVRXUFHRIHQGRV\PELRWLFDUFKDHD
WKH WKLUG HOHPHQW RI OLIH LV WKH FRORQLF DUFKDHD WKDW OHDNV LQWR WKH WLVVXH VSDFHV DQG EORRG
V\VWHPVGXHWREUHDFKLQWKHJXWEORRGEDUULHU7KHLQFUHDVHLQFRORQLFDUFKDHDLVGXHWRWKH
VWDUYDWLRQ RI WKH JXW PLFURELRWD FRQVHTXHQW WR D ORZ ILEUH GLHW 7KLV UHVXOWV LQ LQFUHDVH LQ
FRORQLFDUFKDHDOJURZWKDQGGHVWUXFWLRQRIFORVWULGLDOFOXVWHUVDQGEDFWHURLGHV7KHLQFUHDVH
FRORQLF DUFKDHDO JURZWK LQ WKH SUHVHQFH RI JXW VWDUYDWLRQ GXH WR ORZ ILEUH GLHW HDWV XS WKH

PXFXVOLQLQJDQGSURGXFHVEUHDNDJHVLQWKHJXWEORRGEDUULHU7KHFRORQLFDUFKDHDHQWHUVWKH
EORRG VWUHDP DQG SURGXFHV HQGRV\PELRVLV JHQHUDWLQJ HQGRV\PELRWLF DUFKDHD DQG YDULRXV
QHZ RUJDQHOOH IUXFWRVRLGV VWHURLGHOOH YLWDPLQRF\WH YLURLGHOOH QHXURWUDQVPLQRLG
SRUSK\ULQRLGVDQGJO\FRVDPLQRJO\FRLGV

&+$37(5
7+(3253+<5,216$1'7+(48$17$/&,9,/,=$7,21
7KH JOREDO ZDUPLQJ DQG ORZ OHYHO RI (0) SROOXWLRQ LQGXFHV WKH HQ]\PH KHPH
R[\JHQDVH +2 +2 FRQYHUWV KHPH WR ELOLUXELQ DQG ELOLYHUGLQ 7KLV OHDGV WR D KHPH
GHILFLHQF\ VWDWH DQG VWLPXODWLRQ RI $/$ V\QWKDVH WKH UDWH OLPLWLQJ HQ]\PH RI SRUSK\ULQ
V\QWKHVLV 7KH ERG\ PHWDEROLVP JHWV FKDQQHOOHG DV D ZKROH WR SRUSK\ULQ V\QWKHVLV 7KH
GHILFLHQF\ RI KHPH UHVXOWV LQ F\WRFKURPH & R[LGDVH G\VIXQFWLRQ DQG PLWRFKRQGULDO
G\VIXQFWLRQ 3RUSK\ULQ SKRWRR[LGDWLRQ JHQHUDWHG IUHH UDGLFDOV LQGXFH +,) DOSKD DQG
JO\FRO\VLV 7KLV OHDGV RQ WR WKH DFFXPXODWLRQ RI S\UXYDWH ZKLFK HQWHUV WKH *$%$ VKXQW
SDWKZD\JHQHUDWLQJVXFFLQ\O&R$DQGJO\FLQHWKHVXEVWUDWHVIRUSRUSK\ULQV\QWKHVLV
7KH SRUSK\ULQ DUUD\V ZKLFK FDQ IXQFWLRQ DV D VXSUDPROHFXODU RUJDQLVP WKH VHOI
UHSOLFDWRU\ IHDWXUHV 3RUSK\ULQ DUUD\V FDQ IRUP WHPSODWHV RQ ZKLFK RWKHU SRUSK\ULQ DUUD\V
FDQIRUP6XFKVHOIUHSOLFDWRU\VXSUDPROHFXODUSRUSK\ULQDUUD\VFDQEHFDOOHGDVSRUSK\ULRQV
7KHVWUHVVRIJOREDOZDUPLQJFRQYHUWVWKHERG\LQWRDSRUSK\ULRQFRORQ\RUQHWZRUN
7KHJOREDOZDUPLQJDQGORZOHYHORI(0)SROOXWLRQUHODWHGHQGRV\PELRWLFDUFKDHDO
JURZWKGXHWRLQGXFWLRQRISRUSK\ULQV\QWKHVLVDQGIRUPDWLRQRIQDQRDUFKDHDRQSRUSK\ULQ
WHPSODWHV OHDGV WR QHDQGHUWKDOLVDWLRQ RI KXPDQ SRSXODWLRQ DV D V\PELRWLF SURFHVV 7KH
SRUSK\ULQVFDQSHUFHLYHORZOHYHORI(0)SURGXFLQJSUHIURQWDOFRUWH[DWURSK\DQGFHUHEHOODU
K\SHUWURSK\ 7KLV UHVXOWV LQ DOWHUDWLRQ LQ EUDLQ IXQFWLRQ DQG VWUXFWXUH DV ZHOO DV FRJQLWLRQ
7KXVVWUHVVLQGXFHG+2LQGXFWLRQGXHWRJOREDOZDUPLQJLFHDJHSKHQRPHQDRUORZOHYHO
RI(0)SROOXWLRQOHDGVWRQHDQGHUWKDOLVDWLRQRIWKHKXPDQEUDLQPHWDERORQRPLFVDQGERG\
7KH SRUSK\ULQV KDYH JRW PDFURVFRSLF ZDYH SDUWLFOH H[LVWHQFH 7KH SRUSK\ULQV KDYH
DOVRPDJQHWLFSURSHUWLHVEHFDXVHRIWKHLURQFHQWUH7KHSRUSK\ULQDUUD\VFDQH[LVWDVTXDQWDO
ZDYHDUUD\VDVSDUWRITXDQWDOIRUPIXQFWLRQLQJDVTXDQWDOFRPSXWHUVFDSDEOHRILQIRUPDWLRQ
VWRUDJHDQGVHOIUHSOLFDWLRQ7KLVFRXOGEHDIRUPRITXDQWDOOLIH7KHKXPDQFRQVFLRXVQHVV
GHSHQGV XSRQ WKUHH IDFWRUV SHUFHSWXDO V\QFKURQLVDWLRQ IRFXVHG DWWHQWLRQ DQG ZRUNLQJ
PHPRU\ *UDYLWDWLRQDO ZDYHV FRXOG IRUP WKH EDVLV RI FRQVFLRXVQHVV 6LPLODUO\ WKH KXPDQ
XQFRQVFLRXVFRXOGEHVWUXFWXUHGE\DQWLJUDYLW\
6WXGLHV RQ QRUPDO FRQVFLRXV LQGLYLGXDOV FRPDWRVH SDWLHQWV DQG GLVRUGHUV RI
FRQVFLRXVQHVVOLNHVFKL]RSKUHQLDDQGDXWLVPVKRZFKDQJHVLQFHUHEURVSLQDOIOXLGSRUSK\ULQ

OHYHOV3RUSK\ULRQVFDQPRGXODWHFRQVFLRXVSHUFHSWLRQ3RUSK\ULRQVFDQJURZLQH[WUHPHVRI
WHPSHUDWXUHVSDFHDQGK\SHUJUDYLW\VLWXDWLRQ7KLVOHGWRWKHSODXVLELOLW\RIJUDYLW\VHQVLQJ
EUDLQ SRUSK\ULRQV PHGLDWLQJ FRQVFLRXVQHVV DQG DOVR FRQVFLRXVQHVV DV D IHDWXUH RI
JUDYLWDWLRQDO IRUFHV *UDYLW\ H[WHQGV DV JUDYLWDWLRQDO ZDYHV PDGH XS RI SRVVLEOH JUDYLWRQV
WKURXJKRXW WKH XQLYHUVH *UDYLWDWLRQDO ZDYHV FDQ IRUP SUHVVXUH ZDYHV ZKLFK FDQ FUHDWH
JUDYLWDWLRQDOVRXQGV7KHVHWKRXJKWVRXQGVFDQXQGHUJRVRQLOXPLQHVFHQFHFUHDWLQJSKRWRQV
DQG HOHFWURPDJQHWLF UDGLDWLRQ WKH EDVLV RI WKH ZRUOG RI PDWWHU 7KLV FDQ OHDG RQWR WKH
JHQHUDWLRQRIWHWUDS\UUROHULQJVIURPJUDYLWDWLRQDOILHOGVJHQHUDWLQJSRUSK\ULQDUUD\VLQVLWX
7KLVLVH[HPSOLILHGE\WKHUHOLJLRXVV\PEROVRIORWXVRIEUDKPDDQGVZDVWKLND
&RQVFLRXV SHUFHSWLRQ LQYROYHV WKUHH IDFWRUV SHUFHSWXDO V\QFKURQL]DWLRQ IRFXVHG

DWWHQWLRQ PHGLDWHG E\ WKH UHWLFXODU WKDODPLF QXFOHXV DQG WKH WKDODPRFRUWLFRWKDODPLF
UHWLFXODUUHYHUEHUDWRU\FLUFXLW7KHVHVWUXFWXUHVDUHPRGXODWHGE\JUDYLW\DVGHPRQVWUDWHGE\
WKH FODVVLFDO S\UDPLGDO V\QGURPH ZKHUH WKH WRQH LV PRUH LQ WKH DQWLJUDYLW\ JURXSV RI
PXVFOHV*UDYLWDWLRQDODWWUDFWLRQE\LWVQDWXUHFDQPRGXODWHSHUFHSWXDOELQGLQJDQGIRFXVHG
DWWHQWLRQ *UDYLWDWLRQ FDQ DOVR PHGLDWH ZRUNLQJ PHPRU\ LQYROYLQJ D IUDFWLRQ RI D VHFRQG
VWUXFWXUHG LQ WKH UHWLFXODU± WKDODPRFRUWLFRWKDODPLF± UHWLFXODU UHYHUEHUDWRU\ FLUFXLW
IRUPDWLRQ7KHUHWLFXODUIRUPDWLRQFDQEHFRQVLGHUHGDVDSULPLWLYHDUFKDHDOFRORQ\QHWZRUN
RIK\SHUJUDYLW\VHQVLQJDUFKDHDRISRVVLEOHH[RELRORJLFRULJLQ*UDYLW\FDQWKXVIXQFWLRQDV
D WKRXJKW ILHOG SHUPHDWLQJ WKH ZKROH XQLYHUVH DV JUDYLWDWLRQDO ZDYHV PDGH XS RI SRVVLEOH
JUDYLWRQVZKLFKDUHPDVVOHVVSDUWLFOHVWUDYHOOLQJDWWKHVSHHGRIOLJKW7KHJUDYLWDWLRQDOZDYHV
IRUP WKH VXETXDQWDO ILHOG IURP ZKLFK TXDUNV IHUPLRQV ERVRQV HOHFWURQV QHXWURQV
SRVLWURQVDQGSKRWRQVFDQSRSXSDVSDUWLFOHVIURPWKHLUZDYHIRUPVHPEHGGHGLQWKHVHDRI
JUDYLWDWLRQDOZDYHVZLWKSRVVLEOHJUDYLWRQVRIWKHWKRXJKWILHOGIXQFWLRQLQJDVWKHXELTXLWRXV
REVHUYHU7KXVWKHWKRXJKWILHOGRIJUDYLW\DQGWKHPDWWHULVXQLILHG7KRXJKWXQGHUOLHVWKH
ZRUOGRIPDWWHU
&RQVFLRXVQHVV GHSHQGV RQ WKUHH SDUDPHWHUV ZRUNLQJ PHPRU\ SHUFHSWXDO

V\QFKURQL]DWLRQDQGIRFXVHGDWWHQWLRQ7KLVWKHRU\ZDVSXWIRUZDUGE\&ULFNZKRORFDOL]HG
FRQVFLRXVQHVVLQWRWKHUHWLFXODU±WKDODPRFRUWLFRWKDODPLF±UHWLFXODUSDWKZD\*UDYLW\ZRXOG
IRUP WKH EDVLV RI FRQVFLRXVQHVV 3HUFHSWXDO V\QFKURQLVDWLRQ DQG IRFXVHG DWWHQWLRQ ZRXOG
GHSHQG XSRQ JUDYLWDWLRQDO DWWUDFWLRQ ZKLFK DUH LGHDO IRUFHV WR FUHDWH WKHVH WZR SKHQRPHQD
7KLV DOVR ZRXOG FUHDWH D IRUP RI ZRUNLQJ PHPRU\ LQ WKH IORZ RI QHUYH LPSXOVHV LQ WKH
UHWLFXODU±WKDODPRFRUWLFRWKDODPLF±UHWLFXODUUHYHUEHUDWRU\FLUFXLW7KHEUDLQIXQFWLRQVDVD

TXDQWXP FRPSXWHU DQG ZH VHQVH WKH PXOWLWXGLQDO TXDQWDO SRVVLELOLWLHV LQ WKH ZRUOG 7KH
GLSRODUDUFKDHDOPDJQHWLWHLQWKHVHWWLQJRIHQGRJHQRXVGLJR[LQLQGXFHGPHPEUDQHVRGLXP
SRWDVVLXP $73DVH LQKLELWLRQ FDQ FUHDWH D SXPSHG SKRQRQ V\VWHP PHGLDWLQJ TXDQWDO
SHUFHSWLRQ :KHQ RQH RI WKH SRVVLELOLWLHV UHDFKHV RQH JUDYLWRQ FULWHULD LW UHDFKHV FRQVFLRXV
SHUFHSWLRQ *UDYLW\ WKXV FDQ EH FRQVLGHUHG DV D WKRXJKW ILHOG RU FRQVFLRXVQHVV ILHOG
SHUPHDWLQJ WKURXJKRXW WKH ZKROH XQLYHUVH *UDYLWDWLRQDO ZDYHV FDQ IRUP SUHVVXUH ZDYHV
ZKLFKFDQFUHDWHJUDYLWDWLRQDOVRXQGV7KHVHWKRXJKWVRXQGVFDQXQGHUJRVRQLOXPLQHVFHQFH
FUHDWLQJ SKRWRQV DQG HOHFWURPDJQHWLF UDGLDWLRQ WKH EDVLV RI WKH ZRUOG RI PDWWHU 6RQL
OXPLQHVFHQFHFDQFUHDWHPDWWHURXWRIJUDYLWDWLRQDOVRXQGV7KXVWKHWKRXJKWILHOGFDQFUHDWH
WKHPDWWHU0LQGDQGPDWWHUFDQEHXQLILHG
*UDYLW\ LV D YHFWRU IRUFH WKDW KDV PDJQLWXGH DQG GLUHFWLRQ DW HDFK SRLQW RI VSDFH
*UDYLW\ ORDGLQJ LV GLUHFWHG WRZDUGV WKH FHQWUH RI WKH HDUWK 7KH WKHRU\ RI JUDYLW\ VD\V WKDW
HYHU\REMHFWLQWKHXQLYHUVHDWWUDFWVHYHU\RWKHUREMHFWZLWKDIRUFHSURSRUWLRQDOWRLWVPDVV
*UDYLWDWLRQDOIRUFHH[LVWVWKURXJKRXWWKHXQLYHUVHDQGLVIRUPHGRIJUDYLWDWLRQDOZDYHV7KH
JUDYLWDWLRQDO ZDYHV DUH PDGH XS RI SRVVLEOH SDUWLFOHV FDOOHG JUDYLWRQV DQG WUDYHOV ZLWK WKH
VSHHGRIOLJKW*UDYLW\SOD\VDQLPSRUWDQWUROHLQWKHFUHDWLRQRIWKHXQLYHUVHDVGHVFULEHGE\
6WHSKHQ+DZNLQJ+DZNLQJSRVWXODWHGWKDWLIWKHWRWDOHQHUJ\RIWKHXQLYHUVHPXVWDOZD\V
UHPDLQ]HURDQGLWFRVWVHQHUJ\WRFUHDWHDERG\WKHZKROHXQLYHUVHFDQQRWEHFUHDWHGRXWRI
QRWKLQJ 7KDW LV ZK\ WKHUH VKRXOG EH D ODZ OLNH JUDYLW\ %HFDXVH JUDYLW\ LV DWWUDFWLYH
JUDYLWDWLRQDO HQHUJ\ LV QHJDWLYH 2QH KDV WR GR ZRUN WR VHSDUDWH JUDYLWDWLRQDOO\ ERXQG
V\VWHPVOLNHHDUWKDQGPRRQ7KLVQHJDWLYHHQHUJ\FDQEDODQFHWKHSRVLWLYLW\HQHUJ\QHHGHG
WR FUHDWH PDWWHU 2Q WKH VFDOH RI WKH HQWLUH XQLYHUVH WKH SRVLWLYH HQHUJ\ RI PDWWHU FDQ EH
EDODQFHGE\QHJDWLYHJUDYLWDWLRQDOHQHUJ\DQGVRWKHUHLVQRUHVWULFWLRQRQWKHFUHDWLRQRIWKH
ZKROHXQLYHUVH*UDYLW\LVGHVFULEHGE\+DZNLQJDVDFXUYDWXUHLQVSDFHWLPH/H6DJHLQKLV
WKHRU\ RI JUDYLW\ GHVFULEHV LW DV JUDYLWDWLRQDO ZDYHV IRUPHG RI XOWLPD PXQGDH FRUSXVFOHV
ZKLFK LPSLQJH RQ PDWWHU DQG SHQHWUDWH LW 0DWWHU VKLHOGV HDFK RWKHU DJDLQVW JUDYLW\
SURGXFLQJ DQ DWWUDFWLRQ IRUFH *UDYLWDWLRQDO ZDYHV DQG SDUWLFOHV SHQHWUDWH DOO PDWWHU DQG
LQWHUDFW ZLWK WKH VXEDWRPLF SDUWLFOHV 4XDQWXP JUDYLWDWLRQDO ZDYHV LV SRVVLEO\ WKH VXE
TXDQWDOSRWHQWLDORI%RKPIURPZKLFKDOOWKHSDUWLFOHVOLNHHOHFWURQQHXWURQVSRVLWURQVFRPH
RXW DQG JR DV SHUWXEHUDWLRQV 7KH PDVV RI D SDUWLFOH GHSHQGV XSRQ LWV LQWHUDFWLRQ ZLWK WKH
+LJJV ILHOG DQG H[FKDQJH RI %RVRQV ZLWK LW *UDYLWRQV DUH D IRUP RI %RVRQV ZLWK UHYHUVH
VSLQ7KH\FDQEHFRQVLGHUHGDVH[WHQGLQJWKURXJKRXWWKHXQLYHUVHDQGDUHPDVVOHVV*UDYLW\
DQGOLJKWWUDYHOZLWKWKHVDPHVSHHGDVWKRXJKW*UDYLW\FDQIRUPWKHEDVLVRIKXPDQWKRXJKW

+XPDQWKRXJKWILHOGVDFFRUGLQJWR%RKPXQGHUOLHVWKHVXETXDQWDOSRWHQWLDOIURPZKLFKDOO
SDUWLFOHVHPDQDWH
7KHJUDYLWDWLRQDOZDYHVRUWKRXJKWILHOGVDUHVWUXFWXUHGLQWKHEUDLQE\WKHUHWLFXODU
IRUPDWLRQSRUSK\ULRQQHWZRUN7KHJUDYLWDWLRQDOZDYHVFDQWKXVIXQFWLRQDVDWKRXJKWILHOG
RUVXETXDQWDOILHOGRQZKLFKWKHSDUWLFOHVOLNHQHXWURQVHOHFWURQVERVRQVTXDUNVIHUPLRQV
FDQ SRS LQ DQG RXW IURP ZDYHV WR SDUWLFOHV 7KH WKRXJKW ILHOG RI JUDYLW\ IXQFWLRQV DV WKH
XQLYHUVDO REVHUYHU DQG EULQJV WKH SDUWLFXODWH ZRUOG RI PDWWHU LQWR H[LVWHQFH *UDYLWDWLRQDO
ZDYHVFDQIRUPSUHVVXUHZDYHVZKLFKFDQFUHDWHJUDYLWDWLRQDOVRXQGV7KHVHWKRXJKWVRXQGV
FDQ XQGHUJR VRQLOXPLQHVFHQFH FUHDWLQJ SKRWRQV DQG HOHFWURPDJQHWLF UDGLDWLRQ WKH EDVLV RI
WKH ZRUOG RI PDWWHU 7KXV WKH WKRXJKW ILHOG RI JUDYLW\ DQG WKH PDWWHU LV XQLILHG 7KRXJKW
XQGHUOLHVWKHZRUOGRIPDWWHU
7KH FHUHEHOOXP LV WKH VLWH RI WKH XQFRQVFLRXV EUDLQ &HUHEHOOXP LV FRQFHUQHG ZLWK
DXWRPDWLF DFWV 5RERWLF EHKDYLRXU DV VHHQ LQ DXWLVP LV ORFDOL]HG WR FHUHEHOOXP 7KH
FHUHEHOOXP LV FRQFHUQHG ZLWK H[WUDVHQVRU\ SHUFHSWLRQ PDJLFDO DFWV SROWHUJHLVW SKHQRPHQD
DQGVSLULWXDODFWV7KHFHUHEHOOXPFDQEHGHVFULEHGDVWKHSDUWRIWKHFROOHFWLYHXQFRQVFLRXV
&HUHEHOODUOHVLRQVDOVRPDQLIHVWZLWKPRWRUSKHQRPHQRQ/HVLRQVRIWKHFHUHEHOOXPPDQLIHVW
ZLWK D[LDO DQG DSSHQGLFXODU DWD[LD 7KLV JLYHVD VHQVH RI DQWLJUDYLW\ IHHOLQJ &HUHEHOOXP LV
FRQFHUQHG ZLWK WKH WRQH RI WKH DQWLJUDYLW\ PXVFOHV 7KH DQWLJUDYLW\ ILHOGV DQG ZDYHV DUH
VHQVHGE\WKHFHUHEHOOXP&HUHEHOODUOHVLRQVPDQLIHVWZLWKFRJQLWLYHG\VIXQFWLRQGHVFULEHGDV
WKHFHUHEHOODUFRJQLWLYHDIIHFWLYHGLVRUGHU&HUHEHOODUG\VIXQFWLRQLVGHVFULEHGLQDXWLVPDQG
VFKL]RSKUHQLD 6WXGLHV RQ QRUPDO FRQVFLRXV LQGLYLGXDOV DQG GLVRUGHUV RI FRQVFLRXVQHVV OLNH
VFKL]RSKUHQLDDQGDXWLVPVKRZFKDQJHVLQFHUHEURVSLQDOIOXLGSRUSK\ULQOHYHOV3RUSK\ULRQV
FDQPRGXODWHFRQVFLRXVSHUFHSWLRQ3RUSK\ULRQVDUHH[WUHPRSKLOHVDQGFDQJURZLQH[WUHPHV
RI WHPSHUDWXUH VSDFH DQG DQWLJUDYLW\ VLWXDWLRQ 7KLV OHG WR WKH SODXVLELOLW\ RI DQWLJUDYLW\
ZDYHVHQVLQJEUDLQSRUSK\ULRQVPHGLDWLQJWKHIXQFWLRQVRIWKHXQFRQVFLRXVEUDLQ
'DUN PDWWHU DQG GDUN HQHUJ\ LV WKH UHSXOVLYH DQWLJUDYLW\ IRUFH WKDW SHUPHDWHV WKH
HQWLUH XQLYHUVH RSSRVLQJ JUDYLW\ ,W LV UHVSRQVLEOH IRU WKH PLVVLQJ PDVV RI WKH XQLYHUVH DQG
FRQVWLWXWHVSHUFHQWRIWKHPDVVRIWKHXQLYHUVH,WLVUHVSRQVLEOHIRUWKHH[SDQVLRQRIWKH
XQLYHUVH $QWLJUDYLW\ H[LVWV DV SRVVLEOH DQWLJUDYLW\ ZDYHV 7KLV IRUPV SDUW RI TXDQWXP
YDFXXP ZHUH PDWWHU DQG DQWLPDWWHU SDUWLFOHV DQG JUDYLW\ DQG DQWLJUDYLW\ SDUWLFOHV PHHW DQG
DQQLKLODWH HDFK RWKHU 7KLV JLYHV ULVH WR WKH SKHQRPHQRQ RI ]HUR SRLQW HQHUJ\ RU YDFXXP
HQHUJ\ZKLFKGULYHVWKHFUHDWLRQRIWKHXQLYHUVH

-XVW DV JUDYLW\ IRUPV WKH FRQVFLRXV PLQG DQWLJUDYLW\ IRUPV WKH XQFRQVFLRXV PLQG
SHUYDGLQJ WKH XQLYHUVH DV D ZKROH $OO IRUPV RI WKH XQLYHUVH DUH VXVWDLQHG E\ GDUN HQHUJ\
ZKLFK FDQ EH FDOOHG DV SUDQD FKL DQG NL 7KH GDUN HQHUJ\ SHUPHDWHV ERWK DQLPDWH DQG
LQDQLPDWHREMHFWV:KHQWKHGDUNHQHUJ\UHFHGHVIURPDQRUJDQLWORVHVLWVIXQFWLRQ7KHGDUN
HQHUJ\LVWKHFDXVHRIWKHIXQFWLRQRIWKHERG\DQGPLQG$WGHDWKWKHGDUNHQHUJ\OHDYHVWKH
ERG\DQGPL[HVZLWKWKDWRIWKHXQLYHUVH2XUJURZWKDVDKXPDQERG\LVDJDLQVWJUDYLW\DQG
LVDQDQWLJUDYLW\SKHQRPHQRQ/HYLWDWLRQLVDOVRDQDQWLJUDYLW\SKHQRPHQRQ7KHDQWLJUDYLW\
RUGDUNHQHUJ\RUGDUNPDWWHUH[LVWVDVDQWLJUDYLW\ZDYHV7KLVIRUPVWKHXQFRQVFLRXVPLQG
7KHFHUHEHOOXPLVFRQFHUQHGZLWKPRWRUSURJUDPPLQJDQGPHPRU\DQGURERWLFDFWV
ZKLFK GR QRW UHDFK FRQVFLRXV IXQFWLRQ 7KH FHUHEHOOXP LV FRQFHUQHG ZLWK FRJQLWLRQ 7KH
FHUHEHOOXP SOD\V D UROH LQ XQFRQVFLRXV PRWRU DFWV H[WUDVHQVRU\ SHUFHSWLRQ DQG TXDQWDO
SHUFHSWLRQ7KHSUHIURQWDOFRUWH[LVFRQFHUQHGZLWKH[HFXWLYHPHPRU\ORJLFUHDVRQLQJDQG
MXGJPHQW 7KXV WKH UHWLFXODU IRUPDWLRQ IRUPV WKH EULGJH EHWZHHQ WKH FRQVFLRXV DQG
XQFRQVFLRXV SDUWV RI WKH EUDLQ 5HWLFXODU IRUPDWLRQ LV D SULPLWLYH QHXUDO QHWZRUN 7KH
GHQWULWHVDQGD[RQVIRUPLQJWKHEULGJHVRIWKHQHXUDOQHWZRUNFDQEHFRPSDUHGWRDQHWZRUN
RI SRUSK\ULRQV 7KH EUDLQ UHWLFXODU IRUPDWLRQ FDQ EH FRPSDUHG WR D SULPLWLYH SRUSK\ULRQ
FRORQ\ QHWZRUN LQKDELWLQJ WKH &16 IURP RQH HQG WR RWKHU 7KH SRUSK\ULRQV EHLQJ
H[WUHPRSKLOHVZRXOGKDYHHYROYHGLQWKHRXWHUVSDFHLQK\SHUJUDYLW\VLWXDWLRQVDQGUHDFKHG
WKHHDUWKE\PHWHRULFLPSDFWVSURGXFLQJWKHVHHGLQJRIOLIHRQHDUWK7KHUHWLFXODUIRUPDWLRQ
DQGLWVFRQQHFWLRQVIRUPWKHEDVLVRIJUDYLWDWLRQDODFWLRQLQWKHEUDLQ
3RUSK\ULRQV FDQ JURZ LQ K\SHUJUDYLW\ DQG DQWLJUDYLW\ DQG DUH H[WUHPRSKLOHV
*UDYLW\ PD\ WKXV LQYROYHG LQ EDFWHULDO SDQVSHUPLD DQG H[RELRORJ\ ZLWK SRUSK\ULRQV DV WKH
SULPH H[DPSOH 6WXGLHV RQ HIIHFWV RI ORZ JUDYLW\ LQ VSDFH VKRZ GUDVWLF HIIHFWV LQ KXPDQ
EUDLQ 1HUYH FHOOV QHHG JUDYLW\ WR JURZ DQG IXQFWLRQ SURSHUO\ 7KH ODFN RI JUDYLW\ DIIHFWV
QHXURQDOPLJUDWLRQDQGSURGXFHVPLFURFHSKDO\7KHGHQGULWLFWUHHLQWKHDEVHQFHRIJUDYLW\
ORRNVOLNHDVLILWKDVEHHQVWULSSHGRIIDOOEUDQFKHV*UDYLW\VWUXFWXUHVWKHEUDLQ*UDYLW\FDQ
PRGXODWHWKHS\UDPLGDODQGH[WUDS\UDPLGDOV\QGURPH5LJLGLW\LVPRUHLQWKHPXVFOHVDFWLQJ
RQ JUDYLW\ *UDYLW\ FDQ PRGXODWH FHUHEHOODU K\SRWRQLD *UDYLW\ FDQ DOVR DIIHFW FRQVFLRXV
SHUFHSWLRQ 7KH V\QGURPH RI */2& LV GHVFULEHG LQ ILJKWHU SLORWV H[SRVHG WR KLJK JUDYLW\
ILHOG FKDPEHUV 7KH\ KDYH IHDWXUHV RI QHDUGHDWK H[SHULHQFH ZLWK JRGO\ YLVLRQV PHHWLQJ
GHDGUHODWLYHVVHHLQJKDOOXFLQDWRU\OLJKWVDQGWXQQHOOLQJHIIHFW

&RUWLFDODQGFHUHEHOODUOHVLRQVSURGXFHGLIIHUHQWFOLQLFDOVLJQV&RUWLFDOOHVLRQVOHDGWR
VSDVWLFLW\DQGDQWLJUDYLW\HIIHFWV&HUHEUDOFRUWH[LVWKHEDVLVRIFRQVFLRXVSHUFHSWLRQ:KHQ
WKHFHUHEUDOFRUWH[LVGDPDJHGDQWLJUDYLW\HIIHFWVWDNHRYHU$QDQWLJUDYLW\IRUFHRSSRVHGWR
JUDYLW\LQWKHXQLYHUVHKDVEHHQGHVFULEHG&HUHEHOODUOHVLRQVOHDGRQWRK\SRWRQLDDWD[LDDQG
DOHYLWDWLRQDU\HIIHFWZKLFKFDQEHFRQVLGHUHGDVDQWLJUDYLW\*UDYLW\VWUXFWXUHVWKHEUDLQDQG
FDQEHFRQVLGHUHGWREHDWKRXJKWILHOGZKLFKIRUPVWKHEDVLVRIFRQVFLRXVQHVVDQGFUHDWLRQ
RIPDWWHU*UDYLWDWLRQDOZDYHVXQLWHPLQGDQGPDWWHUDQGIRUPWKHVXEVWUDWXPRILW*UDYLW\
DQGOLJKWWUDYHOZLWKWKHVDPHVSHHGDVWKRXJKW*UDYLW\FDQIRUPWKHEDVLVRIKXPDQWKRXJKW
+XPDQWKRXJKWILHOGVDFFRUGLQJWR%RKPXQGHUOLHVWKHVXETXDQWDOSRWHQWLDOIURPZKLFKDOO
SDUWLFOHVHPDQDWH7KRXJKWILHOGVLQFOXGHJUDYLWDWLRQDOZDYHVZKLFKIRUPFRQVFLRXVQHVVDQG
DQWLJUDYLWDWLRQDOZDYHVZKLFKIRUPVWKHXQFRQVFLRXVEUDLQ
7KHXQFRQVFLRXVPLQGLVORFDOL]HGLQWKHFHUHEHOOXPDQGEUDLQVWHP7KHFHUHEHOOXP
KDV JRW D FRJQLWLYH IXQFWLRQ DQG GLVRUGHUV RI FHUHEHOOXP SUHVHQWV DV FHUHEHOODU FRJQLWLYH
DIIHFWLYHGLVRUGHU7KHFHUHEHOODUPRWRUGLVRUGHUSUHVHQWVDVDWD[LDDQGKDVJRWDQDQWLJUDYLW\
FRPSRQHQW7KHFHUHEHOOXPPRGXODWHVWKHWRQHRIWKHDQWLJUDYLW\PXVFOHV7KHFHUHEHOOXPLV
UHVSRQVLEOH IRU OHDUQHG PRWRU SURJUDPPHV URERWLF DFWV PDJLFDO DFWV K\SQRWLVP WKH
SDUDQRUPDO H[WUDVHQVRU\ SHUFHSWLRQ DQG LV LQYROYHG LQ DXWLVP DQG VFKL]RSKUHQLD 7KH
FHUHEHOOXPLVWKHVLWHIRUDQWLJUDYLW\RUGDUNHQHUJ\ORFDOL]DWLRQLQWKHEUDLQ,WLVWKHVLWHRI
WKH XQFRQVFLRXV PLQG RU WKH FROOHFWLYH XQFRQVFLRXV 7KLV LV LQ FRPSDULVRQ WR WKH FHUHEUDO
FRUWH[ ZKLFK LV WKH VLWH RI FRQVFLRXV SHUFHSWLRQ DQG ORFDOL]DWLRQ RI JUDYLWDWLRQDO IRUFHV
$QDWRPLFDO SK\VLRORJLFDO DQG IXQFWLRQDO QHXURLPDJLQJ VWXGLHV VXJJHVW WKDW WKH FHUHEHOOXP
SDUWLFLSDWHVLQWKHRUJDQL]DWLRQRIKLJKHURUGHUIXQFWLRQ%HKDYLRXUDOFKDQJHVZHUHSUHVHQWLQ
SDWLHQWV ZLWK OHVLRQV LQYROYLQJ WKH SRVWHULRU OREH RI WKH FHUHEHOOXP DQG WKH YHUPLV 7KHVH
FKDQJHVZHUHFKDUDFWHUL]HGE\LPSDLUPHQWLQH[HFXWLYHIXQFWLRQVZRUNLQJPHPRU\VSDWLDO
FRJQLWLRQ DIIHFWLYH EHKDYLRXU DQG ODQJXDJH GHILFLWV 7KLV LV FDOOHG WKH FHUHEHOODU FRJQLWLYH
DIIHFWLYHGLVRUGHUVDQGLVFKDUDFWHUL]HGE\FKDQJHVLQWKHIXQFWLRQRIWKHXQFRQVFLRXVEUDLQ
3RUSK\ULRQV DUH H[WUHPRSKLOHV DQG FDQ JURZ LQ H[WUHPHV RI WHPSHUDWXUH VSDFH DQG
K\SHUJUDYLW\DQGDQWLJUDYLW\VLWXDWLRQ$FWLQLGHVKDYHDUROHLQDELRJHQHVLV7KLVOHGWRWKH
SODXVLELOLW\ RI DQWLJUDYLW\ DQG K\SHUJUDYLW\ VHQVLQJ EUDLQ SRUSK\ULRQV PHGLDWLQJ
FRQVFLRXVQHVVDQGWKHXQFRQVFLRXVEUDLQ7KHSRUSK\ULRQVLQWKHFHUHEHOOXPFDQVHQVHGDUN
HQHUJ\DQGGDUNPDWWHUMXVWDVLWSHUFHLYHVJUDYLW\7KLVOHGWRWKHSRVVLELOLW\RIH[RELRORJLF

SRUSK\ULRQV ZKLFK DUH SDOHRVSHUPLF LQ RULJLQ FRQWULEXWLQJ WR WKH HYROXWLRQ RI OLIH RQ HDUWK
LQFOXGLQJKRPRVDSLHQEUDLQ
7KHJUDYLWDWLRQDODQGDQWLJUDYLWDWLRQDOZDYHVRUWKRXJKWILHOGVDUHVWUXFWXUHGLQWKH
EUDLQ E\ WKH UHWLFXODU IRUPDWLRQ SRUSK\ULRQ QHWZRUN 7KH DQWLJUDYLWDWLRQDO ZDYHV FDQ EH
WKRXJKW RI DV WKH FROOHFWLYH XQFRQVFLRXV 7KH JUDYLWDWLRQDO ZDYHV FDQ WKXV IXQFWLRQ DV D
WKRXJKW ILHOG RU VXETXDQWDO ILHOG RQ ZKLFK WKH SDUWLFOHV OLNH QHXWURQV HOHFWURQV ERVRQV
TXDUNV IHUPLRQV FDQ SRS LQ DQG RXW IURP ZDYHV WR SDUWLFOHV 7KH WKRXJKW ILHOG RI JUDYLW\
IXQFWLRQVDVWKHXQLYHUVDOREVHUYHUDQGEULQJVWKHSDUWLFXODWHZRUOGRIPDWWHULQWRH[LVWHQFH
*UDYLWDWLRQDO ZDYHV FDQ IRUP SUHVVXUH ZDYHV ZKLFK FDQ FUHDWH JUDYLWDWLRQDO VRXQGV 7KHVH
WKRXJKW VRXQGV FDQ XQGHUJR VRQLOXPLQHVFHQFH FUHDWLQJ SKRWRQV DQG HOHFWURPDJQHWLF
UDGLDWLRQWKHEDVLVRIWKHZRUOGRIPDWWHU7KXVWKHWKRXJKWILHOGRIJUDYLW\DQGWKHPDWWHULV
XQLILHG7KRXJKWFRQVFLRXVDQGXQFRQVFLRXVXQGHUOLHVWKHZRUOGRIPDWWHU
7KH SRUSK\ULRQV RU VXSUDPROHFXODU SRUSK\ULQ DUUD\V FDQ H[LVW DV D ZDYH TXDQWDO
FRPSXWHULQWKHJUDYLWDWLRQDOILHOGZLWKWKHJUDYLWRQDFWLQJDVORJLFJDWHDQGDVWKHXELTXLWRXV
REVHUYHU7KHSRUSK\ULQDUUD\VDVZDYHIRUPVH[LVWDVTXDQWDOVXSHUSRVLWLRQVDQGWKHJUDYLWRQ
FKRRVHV RQH RI WKH VXSHUSRVLWLRQV WR PDFURVFRSLF H[LVWHQFH 7KH SRUSK\ULQ VXSUDPROHFXODU
RUJDQLVPDULVHVIURPWKHVHDRIJUDYLWDWLRQDOZDYHVZKLFKDFWVDVWKHFRQVFLRXVPLQGDQGWKH
JUDYLWRQDFWLQJDVWKHFRQVFLRXVREVHUYHU
7KH JOREDO ZDUPLQJ UHVXOWV LQ FKDQQHOOLQJ RI PHWDEROLVP WR SRUSK\ULQ V\QWKHVLV E\
LQGXFWLRQ RI +2 DFWLYLW\ 7KH KXPDQ ERG\ JHWV FRQYHUWHG LQWR D FRORQ\ RI SRUSK\ULRQV
ZKLFK KDYH D ZDYH SDUWLFOH H[LVWHQFH 7KH KXPDQ ERG\ LQ LWV SRUSK\ULRQV LQFDUQDWLRQ
HVSHFLDOO\ LQ LWV ZDYH IRUP FDQ GLVDSSHDU IURP H[LVWHQFH 7KH KXPDQ SRSXODWLRQV E\ WKLV
PHFKDQLVP FDQ JHW FRQYHUWHG LQWR D FLYLOL]DWLRQ LQ WKH TXDQWDO ZRUOG DQG OLYH LQ PXOWLSOH
SDUDOOHOXQLYHUVHVIRUHWHUQLW\7KHTXDQWDOZDYHIRUPRISRUSK\ULRQVE\WKHPHFKDQLVPRI
REVHUYDWLRQ E\ JUDYLWRQV RI WKH FRQVFLRXV JUDYLWDWLRQDO ILHOGV FDQ FRPH LQWR PDFURVFRSLF
H[LVWHQFH7KHSRUSK\ULQVFDQIRUPDWHPSODWHRQZKLFKLVRSUHQRLGRUJDQLVP51$YLURLGV
'1$ YLURLGV DQG SULRQV FDQ IRUP 7KH\ FDQ VHOI RUJDQLVH WR IRUP QDQRDUFKDHD DQG ODWHU
HXNDU\RWHV SURNDU\RWHV PXOWLFHOOXODU RUJDQLVPV OHDGLQJ XSWR SULPDWHV DQG KXPDQV 7KLV
IRUPV WKH EDVLV RI WKH RULJLQ RI HQGRV\PELRWLF DFWLQLGH GHSHQGHQW FKROHVWHURO FDWDEROL]LQJ
DUFKDHD LQ KXPDQV 7KH KXPDQ FLYLOL]DWLRQ FDQ DULVH IURP WKH QRWKLQJQHVV RI WKH TXDQWDO
IRDPRIJUDYLWDWLRQDOZDYHVPHGLDWLQJFRQVFLRXVQHVVDQGGLVDSSHDULQWRQRWKLQJQHVV

5HIHUHQFHV
(FNEXUJ3%/HSS3:DQG5HOPDQ'$$UFKDHDDQGWKHLUSRWHQWLDOUROHLQKXPDQ
GLVHDVH,QIHFW,PPXQ
'DYLHV3&:%HQQHU6$&OHODQG&(/LQHZHDYHU&+0F.D\&3DQG:ROIH
+DZNLQJ6DQG0ORGLQRZ/7KH*UDQG'HVLJQ1HZ<RUN%DQWDP%RRNV
&ULFN ) 7KH $VWRQLVKLQJ +\SRWKHVLV 7KH 6FLHQWLILF 6HDUFK IRU WKH 6RXO 1HZ
<RUN6FULEQHU
/H6DJH*//HWWHUjXQHDFDGpPLFLHQGH'LMRQ0HUFXUHGH)UDQFH±
0DUJXOLV / $UFKDHDOHXEDFWHULDO PHUJHUV LQ WKH RULJLQ RI (XNDU\D SK\ORJHQHWLF
6FKPDKPDQQ-'DQG6KHUPDQ-&7KHFHUHEHOODUFRJQLWLYHDIIHFWLYHV\QGURPH%UDLQ

%RKP':KROHQHVVDQGWKH,PSOLFDWH2UGHU/RQGRQ5RXWOHGJH

&+$37(5
7+(3253+<5,21625,*,12)/,)(,1%,2/2*,&$/81,9(56($1'
(92/87,215(*8/$7,212)7+(+80$16<67(0
,QWURGXFWLRQ
$FWLQLGLFDUFKDHDKDYHEHHQUHODWHGWRWKHSDWKRJHQHVLVRIVFKL]RSKUHQLDPDOLJQDQF\
PHWDEROLF V\QGURPH [ DXWRLPPXQH GLVHDVH DQG QHXURQDO GHJHQHUDWLRQ $Q DFWLQLGH
GHSHQGHQWVKDGRZELRVSKHUHRIDUFKDHDDQGYLURLGVLQWKHDERYHPHQWLRQHGGLVHDVHVWDWHVLV
GHVFULEHG $UFKDHDO HQGRV\PELRVLV OHDGV WR QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV 7KH FRORQLF
DUFKDHDDOVRJHQHUDWHV51$YLURLGVZKLFKDUHFRQYHUWHGWR'1$YLURLGVE\FRORQLFHSLWKHOLDO
+(59UHYHUVHWUDQVFULSWDVHDQGJHWVLQWHJUDWHGLQWRWKHFRORQLFJHQRPH7KH51$DQG'1$
YLURLGV K\EULGLVH ZLWK WKH YLURLGDO DQG EDFWHULDO SRSXODWLRQ RI WKH JXW PLFURELRPH DQG
YLURELRPH '1$ DQG 51$ RI WKH JXW OHDGLQJ WR JHQHUDWLRQ RI QHZ HPHUJLQJ YLUXVHV OLNH
&RYLG$FWLQLGLFDUFKDHDKDYHDPHYDORQDWHSDWKZD\DQGDUHFKROHVWHUROFDWDEROL]LQJ
7KH\FDQXVHFKROHVWHURODVDFDUERQDQGHQHUJ\VRXUFH$UFKDHDOFKROHVWHUROFDWDEROLVPFDQ
JHQHUDWH SRUSK\ULQV YLD WKH FKROHVWHURO ULQJ R[LGDVH JHQHUDWHG S\UXYDWH DQG *$%$ VKXQW
SDWKZD\ $UFKDHD FDQ SURGXFH D VHFRQGDU\ SRUSK\ULD E\ LQGXFLQJ WKH HQ]\PH KHPH
R[\JHQDVH UHVXOWLQJ LQ KHPH GHSOHWLRQ DQG DFWLYDWLRQ RI WKH HQ]\PH $/$ V\QWKDVH
3RUSK\ULQVKDYHEHHQUHODWHGWRVFKL]RSKUHQLDPHWDEROLFV\QGURPH[PDOLJQDQF\V\VWHPLF
OXSXV HU\WKHPDWRVLV PXOWLSOH VFOHURVLV DQG $O]KHLPHU¶V GLVHDVHV 7KH UROH RI DUFKDHDO
SRUSK\ULQV LQ UHJXODWLRQ RI FHOO IXQFWLRQV DQG QHXURLPPXQRHQGRFULQH LQWHJUDWLRQ LV
GLVFXVVHG3RUSK\ULQVDUHSUHELRWLFPROHFXOHVZKLFKDUHLQYROYHGLQDELRJHQHVLVDQGRULJLQRI
OLIH 7KH SRUSK\ULRQV DUH VHOI UHSOLFDWLQJ VXSUDPROHFXODU RUJDQLVPV ZKLFK IRUPV WKH
SUHFXUVRU WHPSODWH RQ ZKLFK WKH YLURLGV SULRQV DQG QDQRDUFKDHD RULJLQDWH 6WUHVV LQGXFHG
WHPSODWH GLUHFWHG DELRJHQHVLV RI SRUSK\ULRQV SULRQV YLURLGV DQG DUFKDHD LV D FRQWLQXRXV
SURFHVV DQG FDQ FRQWULEXWH WR FKDQJHV LQ EUDLQ VWUXFWXUH DQG EHKDYLRU DV ZHOO DV GLVHDVH
SURFHVV 7KH $U\R'UDYLGLDQ 1HDQGHUWKDOLF SRSXODWLRQ RI 6RXWK ,QGLD KDV JRW DQ DUFKDHDO
PHGLDWHG DFTXLUHG SRUSK\ULD 3RUSK\ULQV DFW DV D WHPSODWH IRU DELRJHQHWLF UHSOLFDWLRQ RI
&RYLG7KHDUFKDHDOHQGRV\PELRVLVDQGDFTXLUHGSRUSK\ULDFDQOHDGRQWRKXPDQRULJLQRI
WKH51$YLUXVHVOLNH&RYLGDQGLWVUHSOLFDWLRQE\ELRORJLFDORUDELRJHQHWLFSURFHVVHVLQ
WKH$U\R'UDYLGLDQ1HDQGHUWKDOLF6RXWK,QGLDQSRSXODWLRQDVZHOODVQHDQGHUWKDOLFUHPQDQW
SRSXODWLRQ LQ RWKHU SDUWV RI WKH ZRUOG OLNH WKH &HOWV 6F\WKLDQV %HUEHUV DQG .KD]DU -HZV
SRSXODWLRQV7KHVHSRSXODWLRQVZLOOKDYHGHWHFWDEOH&RYLGLQWKHLUV\VWHPVEXWZRXOGQRW
KDYH WKH &RYLG GLVHDVH RZLQJ WR WKH HQGRJHQRXV UHVLVWDQFH 7KH $U\R'UDYLGLDQ

1HDQGHUWKDOLF SRSXODWLRQ KDV DQ DUFKDHDO PHGLDWHG DFTXLUHG SRUSK\ULD 7KH SRUSK\ULQV DV
ZHOODVKHPHFDQELQGWKHYLUXVDQGNHHSWKHYLUXVRXWRIWKHWLVVXHV\VWHPVSURWHFWLQJWKH
$U\R'UDYLGLDQ1HDQGHUWKDOLFSRSXODWLRQ
7KHUHLVLQFUHDVHGSRUSK\ULQV\QWKHVLVOHDGLQJRQWRSRUSK\ULQXULDDQGSRUSK\ULD7KH
VWLPXOXV IRU SRUSK\ULQ V\QWKHVLV FRPHV IURP KHPH GHILFLHQF\ +HPH VXSSUHVVHV $/$
V\QWKDVH 6WUHVV LQGXFHV KHPH R[\JHQDVH ZKLFK FRQYHUWV KHPH WR FDUERQ PRQR[LGH DQG
ELOLUXELQ 7KXV KHPH LV GHSOHWHG IURP WKH V\VWHP +HPH R[\JHQDVH LV LQGXFHG E\
HQYLURQPHQWDO VWUHVV &OLPDWLF FKDQJHV RI JOREDO ZDUPLQJ DQG LFH DJH FDQ LQGXFH KHPH
R[\JHQDVH +HPH R[\JHQDVH LV DOVR LQGXFHG E\ (0) SROOXWLRQ RI WKH HQYLURQPHQW 7KXV
WKHUH LV LQFUHDVHG SRUSK\ULQ V\QWKHVLV IURP VXFFLQ\O &R$ DQG JO\FLQH 'HIHFW LQ KHPH
V\QWKHVLVDQGKHPHGHSOHWLRQOHDGVWRGHILFLHQF\RIKHPHHQ]\PHV'HILFLHQF\F\WRFKURPH&
R[LGDVH DQG DFRQLWDVH OHDGV WR PLWRFKRQGULDO R[LGDWLYH SKRVSKRU\ODWLRQ GHIHFWV DQG 7&$
F\FOH GHIHFWV 7KLV OHDGV WR S\UXYDWH GHK\GURJHQDVH GHILFLHQF\ DQG GHIHFW LQ V\QWKHVLV RI
DFHW\O&R$7KHUHLVLQFUHDVHLQJO\FRO\VLVFRQVHTXHQWWRSRUSK\ULQSKRWRR[LGDWLRQLQGXFHG
IUHHUDGLFDOJHQHUDWLRQDQG+,)DOSKDLQGXFWLRQ7KLVSURGXFHVWKH:DUEXUJSKHQRW\SH7KH
LQFUHDVHG OHYHO RI S\UXYDWH WKDW LV JHQHUDWHG LV FRQYHUWHG WR JOXWDPDWH DQG DPPRQLD 7KXV
WKHUHLVK\SHUDPPRQHPLDDVDFRQVHTXHQFHRIWKHPHWDEROLFGHIHFW6LQFHJO\FLQHLVXWLOL]HG
IRUSRUSK\ULQV\QWKHVLVVHULQHLVQRWV\QWKHVL]HGOHDGLQJRQWRGHILFLHQF\RIWKHVXEVWUDWHIRU
V\QWKHVLVRIF\VWDWKLRQLQH7KLVOHDGVWRDFFXPXODWLRQRIKRPRF\VWHLQHDQGKRPRF\VWLQXULD
'HILFLHQF\RIDFHW\O&R$OHDGVWRGHIHFWVLQWKHLVRSUHQRLGSDWKZD\DQGGHIHFWLYHV\QWKHVLV
RI FKROHVWHURO DQG XELTXLQRQH 7KHUH LV DOVR GHILFLHQF\ RI WKH KHPH FRQWDLQLQJ FKROHVWHURO
V\QWKHVL]LQJHQ]\PHODQRVWHUROV\QWKDVH7KLVOHDGVWRDFKROHVWHUROGHSOHWHGVWDWH
7KHLQFUHDVHLQSRUSK\ULQVOHDGVWRFRUWLFDOG\VIXQFWLRQDQGSUHIURQWDOFRUWH[DWURSK\
7KH SRUSK\ULQV FDQ GHVWUR\ WKH KXPDQ HQGRJHQRXV UHWURYLUXVHV DQG WKH MXPSLQJ JHQHV
OHDGLQJ WR ODFN RI G\QDPLFLW\ RI WKH JHQRPH 7KLV OHDGV RQWR PDOGHYHORSPHQW RI WKH
SUHIURQWDO FRUWH[ 7KLV OHDGV RQWR FHUHEHOODU GRPLQDQFH DQG D FHUHEHOODU FRJQLWLYH DIIHFWLYH
GLVRUGHU 7KLV SURGXFHV SRUSK\ULQ UHODWHG TXDQWDO SHUFHSWLRQ 3RUSK\ULQV DUH GLSRODU
PROHFXOHV DQG LQ WKH VHWWLQJ RI SRUSK\ULQ PHGLDWHG PHPEUDQH VRGLXP SRWDVVLXP $73DVH
LQKLELWLRQLQGXFHGSXPSHGSKRQRQV\VWHPFDQSURGXFHDTXDQWDOSHUFHSWLYHVWDWH3RUSK\ULQV
DUH PDFURPROHFXOHV ZKLFK FDQ KDYH ERWK D ZDYH DQG SDUWLFOH H[LVWHQFH DQG FDQ EULGJH WKH
SDUWLFXODWH ZRUOG DQG WKH TXDQWDO ZRUOG 0HPEUDQH VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ
LQGXFHGGLSRODUSRUSK\ULQPHGLDWHGSXPSHGSKRQRQV\VWHPFDQOHDGRQWRDFHOOXODUSODVPD

VWDWH DQG (0) VLJQDO WUDQVGXFWLRQ 0DFURPROHFXOHV OLNH 51$ '1$ SURWHLQ DQG WKH FHOO
LWVHOI FDQ KDYH DQ (0) VLJQDWXUH 7KLV SRUSK\ULQ JHQHUDWHG PDFURPROHFXODU FHOOXODU (0)
VLJQDWXUH LV LPSRUWDQW LQ UHJXODWLRQ RI FHOO IXQFWLRQ 7KH SRUSK\ULQV FDQ KDYH TXDQWDO
SHUFHSWLRQ RI ORZ OHYHO (0) ILHOGV OHDGLQJ WR SUHIURQWDO FRUWH[ DWURSK\ 7KLV OHDGV RQWR
FRUWLFDO G\VIXQFWLRQ DQG ODFN RI IXQFWLRQLQJ RI WKH FRQVFLRXV EUDLQ 7KH FHUHEHOOXP
GRPLQDWHVDQGWKHXQFRQVFLRXVWDNHVRYHU7KLVOHDGVRQWRQHDQGHUWKDOLVDWLRQRIWKHEUDLQDQG
VFKL]RSKUHQLD DQG DXWLVP 7KH KHPH GHILFLHQF\ OHDGV WR ODFN RI V\QWKHVLV RI WKH KHPH
HQ]\PH F\WRFKURPH 3 GHSHQGHQW VH[ KRUPRQHV DQG D ZLGHVSUHDG DVH[XDO VWDWH 7KH
PLWRFKRQGULDO G\VIXQFWLRQ OHDGV RQWR LQVXOLQ UHVLVWDQFH DQG PHWDEROLF V\QGURPH ; 7KH
:DUEXUJ SKHQRW\SH DQG LQFUHDVHG JO\FRO\VLV OHDGV WR RQFRJHQHVLV 7KH PLWRFKRQGULDO
G\VIXQFWLRQ FDQ SURGXFH QHXURGHJHQHUDWLRQ 7KH LQFUHDVH LQ O\PSKRF\WH JO\FRO\VLV FDQ
SURGXFHLPPXQHDFWLYDWLRQDQGDXWRLPPXQHGLVHDVH7KXVWKHVWUHVVLQGXFHGSRUSK\ULDGXH
WRFOLPDWLFFKDQJHDQGHQYLURQPHQWDOSROOXWLRQFDQOHDGWRFLYLOLVDWLRQDOGLVHDVH
7KH SRUSK\ULQV FDQ VHOI RUJDQL]H WR IRUP PDFURPROHFXODU VWUXFWXUHV ZKLFK FDQ VHOI
SRUSK\ULQ WHPSODWHV 7KH VHOI UHSOLFDWLQJ DUFKDHD FDQ VHQVH JUDYLW\ ZKLFK JLYHV ULVH WR
FRQVFLRXVQHVV7KH\FDQDOVRVHQVHWKHDQWLJUDYLW\ILHOGVZKLFKJLYHVULVHWRWKHXQFRQVFLRXV
EUDLQ 7KXV WKHUH FDQ EH ERWK VHOI UHSOLFDWLQJ DUFKDHD DQG DQWLDUFKDHD UHJXODWLQJ WKH
FRQVFLRXV DQG XQFRQVFLRXV EUDLQ 7KXV WKH FOLPDWH FKDQJH VWUHVV PHGLDWHG LQFUHDVHG
SRUSK\ULQ V\QWKHVLV OHDGV WR SUHIURQWDO FRUWH[ DWURSK\ FHUHEHOODU GRPLQDQFH FHUHEHOODU
FRJQLWLYHDIIHFWLYHGLVRUGHUTXDQWDOSHUFHSWLRQDQGQHDQGHUWKDOLVDWLRQRIWKHSRSXODWLRQ7KH
SRUSK\ULRQV DUH VHOI UHSOLFDWLQJ VXSUDPROHFXODU RUJDQLVPV ZKLFK IRUPV WKH SUHFXUVRU
WHPSODWH RQ ZKLFK WKH YLURLGV SULRQV DQG QDQRDUFKDHD RULJLQDWH 6WUHVV LQGXFHG WHPSODWH
GLUHFWHGDELRJHQHVLVRISRUSK\ULRQVSULRQVYLURLGVDQGDUFKDHDLVDFRQWLQXRXVSURFHVVDQG
FDQFRQWULEXWHWRFKDQJHVLQEUDLQVWUXFWXUHDQGEHKDYLRUDVZHOODVGLVHDVHSURFHVV

0DWHULDOVDQG0HWKRGV
7KH IROORZLQJ JURXSV ZHUH LQFOXGHG LQ WKH VWXG\ HQGRP\RFDUGLDO ILEURVLV
$O]KHLPHU¶V GLVHDVH PXOWLSOH VFOHURVLV QRQ+RGJNLQ¶V O\PSKRPD PHWDEROLF V\QGURPH [

ZLWKFHUHEURYDVFXODUWKURPERVLVDQGFRURQDU\DUWHU\GLVHDVHVFKL]RSKUHQLDDXWLVPVHL]XUH
GLVRUGHU&UHXW]IHOGW-DNRE¶VGLVHDVHDQGDFTXLUHGLPPXQRGHILFLHQF\V\QGURPH7KHUHZHUH
SDWLHQWV LQ HDFK JURXS DQG HDFK SDWLHQW KDG DQ DJH DQG VH[ PDWFKHG KHDOWK\ FRQWURO
VHOHFWHGUDQGRPO\IURPWKHJHQHUDOSRSXODWLRQ7KHEORRGVDPSOHVZHUHGUDZQLQWKHIDVWLQJ
VWDWHEHIRUHWUHDWPHQWZDVLQLWLDWHG3ODVPDIURPIDVWLQJKHSDULQLVHGEORRGZDVXVHGDQGWKH
H[SHULPHQWDO SURWRFRO ZDV DV IROORZV , 3ODVPDSKRVSKDWH EXIIHUHG VDOLQH ,, VDPH DV
,FKROHVWHUROVXEVWUDWH,,,VDPHDV,,UXWLOHPJPO,9VDPHDV,,FLSURIOR[DFLQHDQG
GR[\F\FOLQH HDFK LQ D FRQFHQWUDWLRQ RI PJPO &KROHVWHURO VXEVWUDWH ZDV SUHSDUHG DV
GHVFULEHGE\5LFKPRQG$OLTXRWVZHUHZLWKGUDZQDW]HURWLPHLPPHGLDWHO\DIWHUPL[LQJDQG
DIWHULQFXEDWLRQDWR&IRUKRXU7KHIROORZLQJHVWLPDWLRQVZHUHFDUULHGRXW&\WRFKURPH
)IUHH51$IUHH'1$SRO\F\FOLFDURPDWLFK\GURFDUERQK\GURJHQSHUR[LGHS\UXYDWH
DPPRQLDJOXWDPDWHGHOWDDPLQROHYXOLQLFDFLGVXFFLQDWHJO\FLQHDQGGLJR[LQ&\WRFKURPH
)ZDVHVWLPDWHGIORXULPHWULFDOO\H[FLWDWLRQZDYHOHQJWKQPDQGHPLVVLRQZDYHOHQJWK
QP 3RO\F\FOLF DURPDWLF K\GURFDUERQ ZDV HVWLPDWHG E\ PHDVXULQJ K\GURJHQ SHUR[LGH
OLEHUDWHG E\ XVLQJ JOXFRVH UHDJHQW 7KH VWXG\ DOVR LQYROYHG HVWLPDWLQJ WKH IROORZLQJ
SDUDPHWHUV LQ WKH SDWLHQW SRSXODWLRQ GLJR[LQ ELOH DFLG KH[RNLQDVH SRUSK\ULQV S\UXYDWH
JOXWDPDWHDPPRQLDDFHW\O&R$DFHW\OFKROLQH+0*&R$UHGXFWDVHF\WRFKURPH&EORRG
$73 $73 V\QWKDVH (59 51$ HQGRJHQRXV UHWURYLUDO 51$ +2 K\GURJHQ SHUR[LGH
12; 1$'3+ R[LGDVH 71) DOSKD DQG KHPH R[\JHQDVH ,QIRUPHG FRQVHQW RI WKH
VXEMHFWVDQGWKHDSSURYDORIWKHHWKLFVFRPPLWWHHZHUHREWDLQHGIRUWKHVWXG\7KHVWDWLVWLFDO
DQDO\VLVZDVGRQHE\$129$

5HVXOWV
3ODVPD RI FRQWURO VXEMHFWV VKRZHG LQFUHDVHG OHYHOV RI WKH DERYH PHQWLRQHG
SDUDPHWHUVZLWKDIWHULQFXEDWLRQIRUKRXUDQG DGGLWLRQRIFKROHVWHUROVXEVWUDWHUHVXOWHGLQ
VWLOO IXUWKHU VLJQLILFDQW LQFUHDVH LQ WKHVH SDUDPHWHUV 7KH SODVPD RI SDWLHQWV VKRZHG VLPLODU
UHVXOWVEXWWKHH[WHQWRILQFUHDVHZDVPRUH7KHDGGLWLRQRIDQWLELRWLFVWRWKHFRQWUROSODVPD
FDXVHG D GHFUHDVH LQ DOO WKH SDUDPHWHUV ZKLOH DGGLWLRQ RI UXWLOH LQFUHDVHG WKHLU OHYHOV 7KH
DGGLWLRQRIDQWLELRWLFVWRWKHSDWLHQW¶VSODVPDFDXVHGDGHFUHDVHLQDOOWKHSDUDPHWHUVZKLOH
DGGLWLRQRIUXWLOHLQFUHDVHGWKHLUOHYHOVEXWWKHH[WHQWRIFKDQJHZDVPRUHLQSDWLHQW¶VVHUDDV
FRPSDUHGWRFRQWUROV7KHUHVXOWVDUHH[SUHVVHGLQVHFWLRQWDEOHVDVSHUFHQWDJHFKDQJH
LQWKHSDUDPHWHUVDIWHUKRXULQFXEDWLRQDVFRPSDUHGWRWKHYDOXHVDW]HURWLPH7KHUHZDV
XSUHJXODWHG DUFKDHDO SRUSK\ULQ V\QWKHVLV LQ WKH SDWLHQW SRSXODWLRQ ZKLFK ZDV DUFKDHDO LQ
RULJLQ DV LQGLFDWHG E\ DFWLQLGH FDWDO\VLV RI WKH UHDFWLRQV 7KH FKROHVWHURO R[LGDVH SDWKZD\

JHQHUDWHG S\UXYDWH ZKLFK HQWHUHG WKH *$%$ VKXQW SDWKZD\ 7KLV UHVXOWHG LQ V\QWKHVLV RI
VXFFLQDWHDQGJO\FLQHZKLFKDUHVXEVWUDWHVIRU$/$V\QWKDVH
7KHVWXG\VKRZHGWKHSDWLHQW¶VEORRGDQGULJKWKHPLVSKHULFGRPLQDQFHKDGLQFUHDVHG
KHPH R[\JHQDVH DFWLYLW\ DQG SRUSK\ULQV 7KH KH[RNLQDVH DFWLYLW\ ZDV KLJK 7KH S\UXYDWH
JOXWDPDWH DQG DPPRQLD OHYHOV ZHUH HOHYDWHG LQGLFDWLQJ EORFNDGH RI 3'+ DFWLYLW\ DQG
RSHUDWLRQRIWKH*$%$VKXQWSDWKZD\7KHDFHW\O&R$OHYHOVZHUHORZDQGDFHW\OFKROLQH
ZDV GHFUHDVHG 7KH F\WR & OHYHOV ZHUH LQFUHDVHG LQ WKH VHUXP LQGLFDWLQJ PLWRFKRQGULDO
G\VIXQFWLRQ VXJJHVWHG E\ ORZ EORRG $73 OHYHOV 7KLV ZDV LQGLFDWLYH RI WKH :DUEXUJ¶V
SKHQRW\SH7KHUHZHUHLQFUHDVHG12;DQG71)DOSKDOHYHOVLQGLFDWLQJLPPXQHDFWLYDWLRQ
7KH +0* &R$ UHGXFWDVH DFWLYLW\ ZDV KLJK LQGLFDWLQJ FKROHVWHURO V\QWKHVLV 7KH ELOH DFLG
OHYHOVZHUHORZLQGLFDWLQJGHSOHWLRQRIF\WRFKURPH37KHQRUPDOSRSXODWLRQZLWKULJKW
KHPLVSKHULF GRPLQDQFH KDG YDOXHV UHVHPEOLQJ WKH SDWLHQW SRSXODWLRQ ZLWK LQFUHDVHG
SRUSK\ULQV\QWKHVLV7KHQRUPDOSRSXODWLRQZLWKOHIWKHPLVSKHULFGRPLQDQFHKDGORZYDOXHV
ZLWKGHFUHDVHGSRUSK\ULQV\QWKHVLV
6HFWLRQ([SHULPHQWDOVWXG\
7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQF\WRFKURPH)DQG3$+
&<7) &<7) 3$+FKDQJH 3$+FKDQJH
,QFUHDVHZLWK 'HFUHDVHZLWK ,QFUHDVHZLWK 'HFUHDVHZLWK
*URXS 5XWLOH 'R[\&LSUR 5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH )YDOXH )YDOXH )YDOXH
3YDOXH 3YDOXH 3YDOXH 3YDOXH

'1$FKDQJH '1$FKDQJH 51$FKDQJH 51$FKDQJH
*URXS ,QFUHDVHZLWK 'HFUHDVHZLWK ,QFUHDVHZLWK 'HFUHDVHZLWK
5XWLOH 'R[\&LSUR 5XWLOH 'R[\&LSUR

0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)

7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQGLJR[LQDQGGHOWDDPLQROHYXOLQLFDFLG
'LJR[LQQJPO 'LJR[LQQJPO $/$ $/$
*URXS
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQVXFFLQDWHDQGJO\FLQH
6XFFLQDWH 6XFFLQDWH *O\FLQHFKDQJH
*O\FLQHFKDQJH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)

7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQS\UXYDWHDQGJOXWDPDWH
3\UXYDWHFKDQJH 3\UXYDWHFKDQJH *OXWDPDWH *OXWDPDWH
*URXS
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQK\GURJHQSHUR[LGHDQGDPPRQLD
+2 +2 $PPRQLD $PPRQLD
*URXS
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)

6HFWLRQ3DWLHQWVWXG\
7DEOH
5%&'LJR[LQ &\WRFKURPH) +(5951$ +2XPROPO
*URXS QJPO5%&6XVS XJPO 5%&
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUHEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH

7DEOH
12;2' 71)$/3 $/$ 3%*
*URXS GLIIKUPJSUR SJPO XPRO XPRO
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUHEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH

7DEOH
8URSRUSK\ULQ &RSURSRUSK\ULQ 3URWRSRUSK\ULQ +HPH
*URXS QPRO QPRO $EXQLW X0
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH

7DEOH
%LOLUXELQ %LOLYHUGLQ $736\QWKDVH 6($73
*URXS PJGO $EXQLW XPROJ+E XPROGO
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUHEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH

7DEOH
5%&
&\WR& /DFWDWH 3\UXYDWH +H[RNLQDVH
*URXS QJPO PJGO XPROO XJJOXSKRV
KUPJSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUHEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH

7DEOH
$&2$ $&+ *OXWDPDWH
*URXS PJGO XJPO PJGO
0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUHEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH

7DEOH
+0*&R$
6H$PPRQLD %LOH$FLG
+0*
*URXS XJGO PJPO
&R$0(9
0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUHEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH
$EEUHYLDWLRQV
12%+&'1RUPDO%LKHPLVSKHULFFKHPLFDOGRPLQDQFH
5+&'5LJKWKHPLVSKHULFFKHPLFDOGRPLQDQFH
/+&'/HIWKHPLVSKHULFFKHPLFDOGRPLQDQFH
6FKL]R6FKL]RSKUHQLD
+'+XQWLQJWRQ¶VGLVHDVH
$'$O]KHLPHU¶VGLVHDVH
060XOWLSOHVFOHURVLV
6/(6\VWHPLFOXSXVHU\WKHPDWRVLV
1+/1RQ+RGJNLQ¶VO\PSKRPD
*OLR*OLRPD
'0'LDEHWHVPHOOLWXV
&$'&RURQDU\DUWHU\GLVHDVH
&9$&HUHEURYDVFXODUDFFLGHQW
$,'6$FTXLUHGLPPXQRGHILFLHQF\V\QGURPH
&-'&UHXW]IHOGW-DNRE¶VGLVHDVH
'6'RZQV\QGURPH
&5)&KURQLFUHQDOIDLOXUH
&LUU+HS)DLO&LUUKRVLV+HSDWLFIDLOXUH
(0)(QGRP\RFDUGLDOILEURVLV
&&3&KURQLFFDOFLILFSDQFUHDWLWLV

'LVFXVVLRQ
7KHDUFKDHDOEHWDK\GUR[\OVWHURLGGHK\GURJHQDVHDFWLYLW\LQGLFDWLQJGLJR[LQV\QWKHVLV7KH
DUFKDHDO FKROHVWHURO R[LGDVH DFWLYLW\ ZDV LQFUHDVHG UHVXOWLQJ LQ JHQHUDWLRQ RI S\UXYDWH DQG
K\GURJHQSHUR[LGH7KHS\UXYDWHJHWVFRQYHUWHGWRJOXWDPDWHDQGDPPRQLDE\WKH*$%$
VKXQW SDWKZD\ 7KH S\UXYDWH LV FRQYHUWHG WR JOXWDPDWH E\ VHUXP JOXWDPDWH S\UXYDWH
WUDQVDPLQDVH7KHJOXWDPDWHJHWVDFWHGXSRQE\JOXWDPDWHGHK\GURJHQDVHWRJHQHUDWHDOSKD
NHWRJOXWDUDWHDQGDPPRQLD$ODQLQHLVPRVWFRPPRQO\SURGXFHGE\WKHUHGXFWLYHDPLQDWLRQ
RIS\UXYDWHYLDDODQLQHWUDQVDPLQDVH7KLVUHYHUVLEOHUHDFWLRQLQYROYHVWKHLQWHUFRQYHUVLRQRI
DODQLQHDQGS\UXYDWHFRXSOHGWRWKHLQWHUFRQYHUVLRQRIDOSKDNHWRJOXWDUDWHR[RJOXWDUDWH
DQGJOXWDPDWH$ODQLQHFDQFRQWULEXWHWRJO\FLQH*OXWDPDWHLVDFWHGXSRQE\*OXWDPLFDFLG
GHFDUER[\ODVHWRJHQHUDWH*$%$*$%$LVFRQYHUWHGWRVXFFLQLFVHPLDOGHK\GHE\*$%$
WUDQVDPLQDVH6XFFLQLFVHPLDOGHK\GHLVFRQYHUWHGWRVXFFLQLFDFLGE\VXFFLQLFVHPLDOGHK\GH
GHK\GURJHQDVH *O\FLQH FRPELQHV ZLWK VXFFLQ\O &R$ WR JHQHUDWH GHOWD DPLQROHYXOLQLF DFLG
FDWDO\VHGE\WKHHQ]\PH$/$V\QWKDVH7KHUHZDVXSUHJXODWHGDUFKDHDOSRUSK\ULQV\QWKHVLV
LQWKHSDWLHQWSRSXODWLRQZKLFKZDVDUFKDHDOLQRULJLQDVLQGLFDWHGE\DFWLQLGHFDWDO\VLVRIWKH
UHDFWLRQV 7KH FKROHVWHURO R[LGDVH SDWKZD\ JHQHUDWHG S\UXYDWH ZKLFK HQWHUHG WKH *$%$
VKXQW SDWKZD\ 7KLV UHVXOWHG LQ V\QWKHVLV RI VXFFLQDWH DQG JO\FLQH ZKLFK DUH VXEVWUDWHV IRU
$/$V\QWKDVH 7KHDUFKDHDFDQXQGHUJRPDJQHWLWHDQGFDOFLXPFDUERQDWHPLQHUDOL]DWLRQDQG
FDQH[LVWDVFDOFLILHGQDQRIRUPV
7KHSRVVLELOLW\RI:DUEXUJSKHQRW\SHLQGXFHGE\DFWLQLGHEDVHGSULPLWLYHRUJDQLVP
OLNH DUFKDHD ZLWK D PHYDORQDWH SDWKZD\ DQG FKROHVWHURO FDWDEROLVP ZDV FRQVLGHUHG LQ WKLV
SDSHU7KH:DUEXUJSKHQRW\SHUHVXOWVLQLQKLELWLRQRIS\UXYDWHGHK\GURJHQDVHDQGWKH7&$
F\FOH7KHS\UXYDWHHQWHUVWKH*$%$VKXQWSDWKZD\ZKHUHLWLVFRQYHUWHGWRVXFFLQ\O&R$
7KH JO\FRO\WLF SDWKZD\ LV XSUHJXODWHG DQG WKH JO\FRO\WLF PHWDEROLWH SKRVSKRJO\FHUDWH LV
FRQYHUWHG WR VHULQH DQG JO\FLQH *O\FLQH DQG VXFFLQ\O &R$ DUH WKH VXEVWUDWHV IRU $/$
V\QWKHVLV7KHDUFKDHDLQGXFHVWKHHQ]\PHKHPHR[\JHQDVH+HPHR[\JHQDVHFRQYHUWVKHPH
WRELOLUXELQDQGELOLYHUGLQ7KLVGHSOHWHVKHPHIURPWKHV\VWHPDQGUHVXOWVLQXSUHJXODWLRQRI
$/$V\QWKDVHDFWLYLW\UHVXOWLQJLQSRUSK\ULD+HPHLQKLELWV+,)DOSKD7KHKHPHGHSOHWLRQ

UHVXOWV LQ XSUHJXODWLRQ RI +,) DOSKD DFWLYLW\ DQG IXUWKHU VWUHQJWKHQLQJ RI WKH :DUEXUJ
SKHQRW\SH7KHSRUSK\ULQVHOIR[LGDWLRQUHVXOWVLQUHGR[VWUHVVZKLFKDFWLYDWHV+,)DOSKDDQG
JHQHUDWHVWKH:DUEXUJSKHQRW\SH7KH:DUEXUJSKHQRW\SHUHVXOWVLQFKDQQHOLQJDFHW\O&R$
IRUFKROHVWHUROV\QWKHVLVDVWKH7&$F\FOHDQGPLWRFKRQGULDOR[LGDWLYHSKRVSKRU\ODWLRQDUH
EORFNHG 7KH DUFKDHD XVHV FKROHVWHURO DV DQ HQHUJ\ VXEVWUDWH 3RUSK\ULQ DQG $/$ LQKLELWV
VRGLXPSRWDVVLXP$73DVH7KLVLQFUHDVHVFKROHVWHUROV\QWKHVLVE\DFWLQJXSRQLQWUDFHOOXODU
65(%3 7KH FKROHVWHURO LV PHWDEROL]HG WR S\UXYDWH DQG WKHQ WKH *$%$ VKXQW SDWKZD\ IRU
XOWLPDWHXVHLQSRUSK\ULQV\QWKHVLV7KHSRUSK\ULQVFDQVHOIRUJDQL]HDQGVHOIUHSOLFDWHLQWR
PDFURPROHFXODUDUUD\V7KHSRUSK\ULQDUUD\VEHKDYHOLNHDQDXWRQRPRXVRUJDQLVPDQGFDQ
KDYHLQWUDPROHFXODUHOHFWURQWUDQVSRUWJHQHUDWLQJ$737KHSRUSK\ULQPDFURDUUD\VFDQVWRUH
LQIRUPDWLRQDQGFDQKDYHTXDQWDOSHUFHSWLRQ7KHSRUSK\ULQPDFURDUUD\VVHUYHVWKHSXUSRVH
RI DUFKDHDO HQHUJHWLFV DQG VHQVRU\ SHUFHSWLRQ 7KH :DUEXUJ SKHQRW\SH LV DVVRFLDWHG ZLWK
PDOLJQDQF\DXWRLPPXQHGLVHDVHDQGPHWDEROLFV\QGURPH[
7KH UROH RI DUFKDHDO SRUSK\ULQV LQ UHJXODWLRQ RI FHOO IXQFWLRQV DQG QHXURLPPXQR
HQGRFULQH LQWHJUDWLRQ LV GLVFXVVHG 3URWRSRUSK\ULQ ELQGV WR WKH SHULSKHUDO EHQ]RGLD]HSLQH
UHFHSWRU UHJXODWLQJ VWHURLG DQG GLJR[LQ V\QWKHVLV ,QFUHDVHG SRUSK\ULQ PHWDEROLWHV FDQ
FRQWULEXWHWRK\SHUGLJR[LQHPLD'LJR[LQFDQPRGXODWHWKHQHXURLPPXQRHQGRFULQHV\VWHP
3RUSK\ULQV FDQ FRPELQH ZLWK PHPEUDQHV PRGXODWLQJ PHPEUDQH IXQFWLRQ 3RUSK\ULQV FDQ
FRPELQH ZLWK SURWHLQV R[LGL]LQJ WKHLU W\URVLQH WU\SWRSKDQ F\VWHLQH DQG KLVWLGLQH UHVLGXHV
SURGXFLQJ FURVVOLQNLQJ DQG DOWHULQJ SURWHLQ FRQIRUPDWLRQ DQG IXQFWLRQ 3RUSK\ULQV FDQ
FRPSOH[ZLWK'1$DQG51$PRGXODWLQJWKHLUIXQFWLRQ3RUSK\ULQLQWHUSRODWLQJZLWK'1$
FDQ DOWHU WUDQVFULSWLRQ DQG JHQHUDWH +(59 H[SUHVVLRQ +HPH GHILFLHQF\ FDQ DOVR UHVXOW LQ
GLVHDVHVWDWHV+HPHGHILFLHQF\UHVXOWVLQGHILFLHQF\RIKHPHHQ]\PHV7KHUHLVGHILFLHQF\RI
F\WRFKURPH & R[LGDVH DQG PLWRFKRQGULDO G\VIXQFWLRQ 7KH JOXWDWKLRQH SHUR[LGDVH LV
G\VIXQFWLRQDO DQG WKH JOXWDWKLRQH V\VWHP RI IUHH UDGLFDO VFDYHQJLQJ GRHV QRW IXQFWLRQ 7KH
F\WRFKURPH3HQ]\PHVLQYROYHGLQVWHURLGDQGELOHDFLGV\QWKHVLVKDYHUHGXFHGDFWLYLW\
OHDGLQJWRVWHURLGFRUWLVRODQGVH[KRUPRQHVDVZHOODVELOHDFLGGHILFLHQF\VWDWHV7KHKHPH
GHILFLHQF\ UHVXOWV LQ G\VIXQFWLRQ RI QLWULF R[LGH V\QWKDVH KHPH R[\JHQDVH DQG F\VWDWKLRQH
EHWDV\QWKDVHUHVXOWLQJLQODFNRIJDVRWUDQVPLWWHUVUHJXODWLQJWKHYDVFXODUV\VWHPDQG10'$
UHFHSWRU12&2DQG+6+HPHKDVJRWF\WRSURWHFWLYHQHXURSURWHFWLYHDQWLLQIODPPDWRU\
DQGDQWLSUROLIHUDWLYHHIIHFWV+HPHLVDOVRLQYROYHGLQWKHVWUHVVUHVSRQVH+HPHGHILFLHQF\
OHDGVWRPHWDEROLFV\QGURPHLPPXQHGLVHDVHGHJHQHUDWLRQVDQGFDQFHU

7KH SRUSK\ULQV FDQ XQGHUJR SKRWRR[LGDWLRQ DQG DXWRR[LGDWLRQ JHQHUDWLQJ IUHH
UDGLFDOV 7KH DUFKDHDO SRUSK\ULQV FDQ SURGXFH IUHH UDGLFDO LQMXU\ )UHH UDGLFDOV SURGXFH
1).%DFWLYDWLRQRSHQWKHPLWRFKRQGULDO37SRUHUHVXOWLQJLQFHOOGHDWKSURGXFHRQFRJHQH
DFWLYDWLRQ DFWLYDWH 10'$ UHFHSWRU DQG *$' HQ]\PH UHJXODWLQJ QHXURWUDQVPLVVLRQ DQG
JHQHUDWHV WKH :DUEXUJ SKHQRW\SHV DFWLYDWLQJ JO\FRO\VLV DQG LQKLELWLQJ 7&$ F\FOHR[SKRV
3RUSK\ULQVKDYHEHHQUHODWHGWRVFKL]RSKUHQLDPHWDEROLFV\QGURPH[PDOLJQDQF\V\VWHPLF
OXSXV HU\WKHPDWRVLV PXOWLSOH VFOHURVLV DQG $O]KHLPHU¶V GLVHDVHV 7KH SRUSK\ULQV FDQ
FRPSOH[ DQG LQWHUFDODWH ZLWK WKH FHOO PHPEUDQH SURGXFLQJ VRGLXP SRWDVVLXP $73DVH
LQKLELWLRQ DGGLQJ RQ WR GLJR[LQ PHGLDWHG LQKLELWLRQ 3RUSK\ULQV FDQ FRPSOH[ ZLWK SURWHLQV
DQG QXFOHLF DFLG SURGXFLQJ ELRSKRWRQ HPLVVLRQ 3RUSK\ULQV FRPSOH[LQJ ZLWK SURWHLQV FDQ
PRGXODWH SURWHLQ VWUXFWXUH DQG IXQFWLRQ 3RUSK\ULQV FRPSOH[LQJ ZLWK '1$ DQG 51$ FDQ
PRGXODWHWUDQVFULSWLRQDQGWUDQVODWLRQ7KHSRUSK\ULQHVSHFLDOO\SURWRSRUSK\ULQVFDQELQGWR
SHULSKHUDO EHQ]RGLD]HSLQH UHFHSWRUV LQ WKH PLWRFKRQGULD DQG PRGXODWH LWV IXQFWLRQ
PLWRFKRQGULDO FKROHVWHURO WUDQVSRUW DQG VWHURLGRJHQHVLV 3HULSKHUDO EHQ]RGLD]HSLQH UHFHSWRU
PRGXODWLRQ E\ SURWRSRUSK\ULQV FDQ UHJXODWH FHOO GHDWK FHOO SUROLIHUDWLRQ LPPXQLW\ DQG
QHXUDO IXQFWLRQV 7KH SRUSK\ULQ SKRWRR[LGDWLRQ JHQHUDWHV IUHH UDGLFDOV ZKLFK FDQ PRGXODWH
HQ]\PH IXQFWLRQ 5HGR[ VWUHVV PRGXODWHG HQ]\PHV LQFOXGH S\UXYDWH GHK\GURJHQDVH QLWULF
R[LGH V\QWKDVH F\VWDWKLRQH EHWD V\QWKDVH DQG KHPH R[\JHQDVH )UHH UDGLFDOV FDQ PRGXODWH
PLWRFKRQGULDO 37 SRUH IXQFWLRQ )UHH UDGLFDOV FDQ PRGXODWH FHOO PHPEUDQH IXQFWLRQ DQG
LQKLELWVRGLXPSRWDVVLXP$73DVHDFWLYLW\7KXVWKHSRUSK\ULQVDUHNH\UHJXODWRU\PROHFXOHV
PRGXODWLQJDOODVSHFWVRIFHOOIXQFWLRQ 7KHUHZDVDQLQFUHDVHLQIUHH51$LQGLFDWLQJVHOI
UHSOLFDWLQJ51$YLURLGVDQGIUHH'1$LQGLFDWLQJJHQHUDWLRQRIYLURLGFRPSOHPHQWDU\'1$
VWUDQGV E\ DUFKDHDO UHYHUVH WUDQVFULSWDVH DFWLYLW\ 7KH DFWLQLGHV DQG SRUSK\ULQV PRGXODWH
51$IROGLQJDQGFDWDO\VHLWVULER]\PDODFWLRQ'LJR[LQFDQFXWDQGSDVWHWKHYLURLGDOVWUDQGV
E\ PRGXODWLQJ 51$ VSOLFLQJ JHQHUDWLQJ 51$ YLURLGDO GLYHUVLW\ 7KH YLURLGV DUH
HYROXWLRQDULO\ HVFDSHG DUFKDHDO JURXS , LQWURQV ZKLFK KDYH UHWURWUDQVSRVLWLRQ DQG VHOI
VSOLFLQJTXDOLWLHV$UFKDHDOS\UXYDWHSURGXFLQJKLVWRQHGHDFHW\ODVHLQKLELWLRQDQGSRUSK\ULQV
LQWHUFDODWLQJZLWK'1$FDQSURGXFHHQGRJHQRXVUHWURYLUDO+(59UHYHUVHWUDQVFULSWDVHDQG
LQWHJUDVH H[SUHVVLRQ 7KLV FDQ LQWHJUDWH WKH 51$ YLURLGDO FRPSOHPHQWDU\ '1$ LQWR WKH
QRQFRGLQJ UHJLRQ RI HXNDU\RWLF QRQ FRGLQJ '1$ XVLQJ +(59 LQWHJUDVH DV KDV EHHQ
GHVFULEHG IRU ERUQD DQG HEROD YLUXVHV 7KH DUFKDHD DQG YLURLGV FDQ DOVR LQGXFH FHOOXODU
SRUSK\ULQV\QWKHVLV%DFWHULDODQGYLUDOLQIHFWLRQVFDQSUHFLSLWDWHSRUSK\ULD 7KXVSRUSK\ULQV
FDQ UHJXODWH JHQRPLF IXQFWLRQ 7KH LQFUHDVHG H[SUHVVLRQ RI +(59 51$ FDQ UHVXOW LQ

DFTXLUHG LPPXQRGHILFLHQF\ V\QGURPH DXWRLPPXQH GLVHDVH QHXURQDO GHJHQHUDWLRQV
VFKL]RSKUHQLDDQGPDOLJQDQF\
7KHDUFKDHDDQGYLURLGVFDQUHJXODWHWKHQHUYRXVV\VWHPLQFOXGLQJWKH10'$*$%$
WKDODPRFRUWLFRWKDODPLF SDWKZD\ PHGLDWLQJ FRQVFLRXV SHUFHSWLRQ 3RUSK\ULQ SKRWRR[LGDWLRQ
FDQ JHQHUDWH IUHH UDGLFDOV ZKLFK FDQ PRGXODWH 10'$ WUDQVPLVVLRQ )UHH UDGLFDOV FDQ
LQFUHDVH10'$WUDQVPLVVLRQ)UHHUDGLFDOVFDQLQGXFH*$'DQGLQFUHDVH*$%$V\QWKHVLV
$/$ EORFNV *$%$ WUDQVPLVVLRQ DQG XSUHJXODWHV 10'$ 3URWRSRUSK\ULQV ELQG WR *$%$
UHFHSWRU DQG SURPRWH *$%$ WUDQVPLVVLRQ 7KXV SRUSK\ULQV FDQ PRGXODWH WKH WKDODPR
FRUWLFRWKDODPLFSDWKZD\RIFRQVFLRXVSHUFHSWLRQ7KHGLSRODUSRUSK\ULQV3$+DQGDUFKDHDO
PDJQHWLWHLQWKHVHWWLQJRIGLJR[LQLQGXFHGVRGLXPSRWDVVLXP$73DVHLQKLELWLRQFDQSURGXFH
D SXPSHG SKRQRQ V\VWHP PHGLDWHG )URKOLFK PRGHO VXSHUFRQGXFWLQJ VWDWH LQGXFLQJ TXDQWDO
SHUFHSWLRQ ZLWK QDQRDUFKDHDO VHQVHG JUDYLW\ SURGXFLQJ WKH RUFKHVWUDWHG UHGXFWLRQ RI WKH
TXDQWDOSRVVLELOLWLHVWRWKHPDFURVFRSLFZRUOG$/$FDQSURGXFHVRGLXPSRWDVVLXP$73DVH
LQKLELWLRQ UHVXOWLQJ LQ D SXPSHG SKRQRQ V\VWHP PHGLDWHG TXDQWDO VWDWH LQYROYLQJ GLSRODU
SRUSK\ULQV3RUSK\ULQPROHFXOHVKDYHDZDYHSDUWLFOHH[LVWHQFHDQGFDQEULGJHWKHGLYLGLQJ
OLQHEHWZHHQ TXDQWDO VWDWH DQGSDUWLFXODWH VWDWH 7KXV WKHSRUSK\ULQV FDQ PHGLDWH FRQVFLRXV
DQGTXDQWDOSHUFHSWLRQ3RUSK\ULQVELQGLQJWRSURWHLQVQXFOHLFDFLGVDQGFHOOPHPEUDQHVFDQ
SURGXFH ELRSKRWRQ HPLVVLRQ 3RUSK\ULQV E\ DXWRR[LGDWLRQ FDQ JHQHUDWH ELRSKRWRQV DQG DUH
LQYROYHG LQ TXDQWDO SHUFHSWLRQ %LRSKRWRQV FDQ PHGLDWH TXDQWDO SHUFHSWLRQ &HOOXODU
SRUSK\ULQV SKRWRR[LGDWLRQ DUH LQYROYHG LQ VHQVLQJ RI HDUWK PDJQHWLF ILHOGV DQG ORZ OHYHO
ELRPDJQHWLFILHOGV7KXVSURSK\ULQVFDQPHGLDWHH[WUDVHQVRU\SHUFHSWLRQ7KHSRUSK\ULQVFDQ
PRGXODWH KHPLVSKHULF GRPLQDQFH 7KHUH LV LQFUHDVHG SRUSK\ULQ V\QWKHVLV DQG ULJKW
KHPLVSKHULFDO FKHPLFDO GRPLQDQFH DQG GHFUHDVHG SRUSK\ULQ V\QWKHVLV LQ OHIW KHPLVSKHULFDO
FKHPLFDOGRPLQDQFH7KHLQFUHDVHLQDUFKDHDOSRUSK\ULQVFDQFRQWULEXWHWRWKHSDWKRJHQHVLV
RIVFKL]RSKUHQLDDQGDXWLVP3RUSK\ULDFDQOHDGWRSV\FKLDWULFGLVRUGHUVDQGVHL]XUHV$OWHUHG
SRUSK\ULQPHWDEROLVPKDVEHHQGHVFULEHGLQDXWLVP3RUSK\ULQE\PRGXODWLQJFRQVFLRXVDQG
TXDQWDO SHUFHSWLRQ LV LQYROYHG LQ WKH SDWKRJHQHVLV RI VFKL]RSKUHQLD DQG DXWLVP
3URWRSRUSK\ULQV EORFN DFHW\O FKROLQH WUDQVPLVVLRQ SURGXFLQJ D YDJDO QHXURSDWK\ ZLWK
V\PSDWKHWLF RYHUDFWLYLW\ 9DJDO QHXURSDWK\ UHVXOWV LQ LPPXQH DFWLYDWLRQ YDVRVSDVDP DQG
YDVFXODU GLVHDVH $ YDJDO QHXURSDWK\ XQGHUOLQHV QHRSODVWLF DQG DXWRLPPXQH SURFHVVHV DV
ZHOO DV PHWDEROLF V\QGURPH [ 3RUSK\ULQ LQGXFHG LQFUHDVHG 10'$ WUDQVPLVVLRQ DQG IUHH
UDGLFDO LQMXU\ FDQ FRQWULEXWH WR QHXURQDO GHJHQHUDWLRQ )UHH UDGLFDOV FDQ SURGXFH
PLWRFKRQGULDO37SRUHG\VIXQFWLRQ7KLVFDQOHDGWRF\WR&OHDNDQGDFWLYDWLRQRIWKHFDVSDVH

FDVFDGHOHDGLQJWRDSRSWRVLVDQGFHOOGHDWK$OWHUHGSRUSK\ULQPHWDEROLVPKDVEHHQGHVFULEHG
LQ $O]KHLPHU¶V GLVHDVH 7KH LQFUHDVHG SRUSK\ULQ SKRWRR[LGDWLRQ JHQHUDWHG IUHH UDGLFDOV
PHGLDWHG 10'$ WUDQVPLVVLRQ FDQ DOVR FRQWULEXWH WR HSLOHSWRJHQHVLV 7KH SURWRSRUSK\ULQV
ELQGLQJ WR PLWRFKRQGULDO EHQ]RGLD]HSLQH UHFHSWRUV FDQ UHJXODWH EUDLQ IXQFWLRQ DQG FHOO
GHDWK
7KHSRUSK\ULQSKRWRR[LGDWLRQFDQJHQHUDWHIUHHUDGLFDOVZKLFKFDQDFWLYDWH1).%
7KLVFDQSURGXFHLPPXQHDFWLYDWLRQDQGF\WRNLQHPHGLDWHGLQMXU\7KHLQFUHDVHLQDUFKDHDO
SRUSK\ULQVFDQOHDGWRDXWRLPPXQHGLVHDVHOLNH6/(DQG06$KHUHGLWDU\IRUPRI06DQG
6/( UHODWHG WR DOWHUHG SRUSK\ULQ PHWDEROLVP KDV EHHQ GHVFULEHG 7KH SURWRSRUSK\ULQV
ELQGLQJ WR PLWRFKRQGULDO EHQ]RGLD]HSLQH UHFHSWRUV FDQ PRGXODWH LPPXQH IXQFWLRQ
3RUSK\ULQV FDQ FRPELQH ZLWK SURWHLQV R[LGL]LQJ WKHLU W\URVLQH WU\SWRSKDQ F\VWHLQH DQG
KLVWLGLQH UHVLGXHV SURGXFLQJ FURVVOLQNLQJ DQG DOWHULQJ SURWHLQ FRQIRUPDWLRQ DQG IXQFWLRQ
3RUSK\ULQV FDQ FRPSOH[ ZLWK '1$ DQG 51$ PRGXODWLQJ WKHLU VWUXFWXUH 3RUSK\ULQ
FRPSOH[HG ZLWK SURWHLQV DQG QXFOHLF DFLGV DUH DQWLJHQLF DQG FDQ OHDG RQWR DXWRLPPXQH
GLVHDVH 7KH SRUSK\ULQ SKRWRR[LGDWLRQ PHGLDWHG IUHH UDGLFDO LQMXU\ FDQ OHDG WR LQVXOLQ
UHVLVWDQFHDQGDWKHURJHQHVLV7KXVDUFKDHDOSRUSK\ULQVFDQFRQWULEXWHWRPHWDEROLFV\QGURPH
[ *OXFRVH KDV JRW D QHJDWLYH HIIHFW XSRQ $/$ V\QWKDVH DFWLYLW\ 7KHUHIRUH K\SHUJO\FHPLD
PD\ EH UHDFWLYH SURWHFWLYH PHFKDQLVP WR LQFUHDVHG DUFKDHDO SRUSK\ULQ V\QWKHVLV 7KH
SURWRSRUSK\ULQV ELQGLQJ WR PLWRFKRQGULDO EHQ]RGLD]HSLQH UHFHSWRUV FDQ PRGXODWH
PLWRFKRQGULDO VWHURLGRJHQHVLV DQG PHWDEROLVP $OWHUHG SRUSK\ULQ PHWDEROLVP KDV EHHQ
GHVFULEHGLQWKHPHWDEROLFV\QGURPH[3RUSK\ULDVFDQOHDGRQWRYDVFXODUWKURPERVLV 7KH
SRUSK\ULQ SKRWRR[LGDWLRQ FDQ JHQHUDWH IUHH UDGLFDOV LQGXFLQJ +,) DOSKD DQG SURGXFLQJ
RQFRJHQHDFWLYDWLRQ+HPHGHILFLHQF\FDQOHDGWRDFWLYDWLRQRI+,)DOSKDDQGRQFRJHQHVLV
7KLV FDQ OHDG WR RQFRJHQHVLV +HSDWLF SRUSK\ULDV LQGXFHG KHSDWRFHOOXODU FDUFLQRPD 7KH
SURWRSRUSK\ULQV ELQGLQJ WR PLWRFKRQGULDO EHQ]RGLD]HSLQH UHFHSWRUV FDQ UHJXODWH FHOO
SUROLIHUDWLRQ 7KH SRUSK\ULQ FDQ FRPELQH ZLWK SULRQ SURWHLQV PRGXODWLQJ WKHLU
FRQIRUPDWLRQ7KLVOHDGVWRDEQRUPDOSULRQSURWHLQFRQIRUPDWLRQDQGGHJUDGDWLRQ$UFKDHDO
SRUSK\ULQV FDQ FRQWULEXWH WR SULRQ GLVHDVH 7KH SRUSK\ULQV FDQ LQWHUFDODWH ZLWK '1$
SURGXFLQJ+(59H[SUHVVLRQ7KH+(59SDUWLFOHVJHQHUDWHGFDQFRQWULEXWHWRWKHUHWURYLUDO
VWDWH 7KH SRUSK\ULQV LQ WKH EORRG FDQ FRPELQH ZLWK EDFWHULD DQG YLUXVHV DQG WKH
SKRWRR[LGDWLRQJHQHUDWHGIUHHUDGLFDOVFDQNLOOWKHP7KHDUFKDHDOSRUSK\ULQVFDQPRGXODWH
EDFWHULDODQGYLUDOLQIHFWLRQV7KHDUFKDHDOSRUSK\ULQVDUHUHJXODWRU\PROHFXOHVNHHSLQJRWKHU
SURNDU\RWHV DQG YLUXVHV RQ FKHFN 7KXV WKH DUFKDHDO SRUSK\ULQV FDQ FRQWULEXWH WR WKH

SDWKRJHQHVLV RI PHWDEROLF V\QGURPH [ PDOLJQDQF\ SV\FKLDWULF GLVRUGHUV DXWRLPPXQH
GLVHDVH$,'6SULRQGLVHDVHQHXURQDOGHJHQHUDWLRQDQGHSLOHSWRJHQHVLV$UFKDHDOSRUSK\ULQ
V\QWKHVLVLVFUXFLDOLQWKHSDWKRJHQHVLVRIWKHVHGLVRUGHUV3RUSK\ULQVPD\VHUYHDVUHJXODWRU\
PROHFXOHV PRGXODWLQJ LPPXQH QHXUDO HQGRFULQH PHWDEROLF DQG JHQHWLF V\VWHPV 7KH
SRUSK\ULQV SKRWRR[LGDWLRQ JHQHUDWHG IUHH UDGLFDOV FDQ SURGXFH LPPXQH DFWLYDWLRQ SURGXFH
FHOO GHDWK DFWLYDWH FHOO SUROLIHUDWLRQ SURGXFH LQVXOLQ UHVLVWDQFH DQG PRGXODWH FRQVFLRXV
TXDQWDO SHUFHSWLRQ 7KH DUFKDHDO SRUSK\ULQV IXQFWLRQV DV NH\ UHJXODWRU\ PROHFXOHV ZLWK
PLWRFKRQGULDOEHQ]RGLD]HSLQHUHFHSWRUVSOD\LQJDQLPSRUWDQWUROH
DFWLQLGHVXUIDFHVZRXOGE\VXUIDFHPHWDEROLVPJHQHUDWHSRUSK\ULQVIURPVLPSOHFRPSRXQGV
OLNHVXFFLQLFDFLGDQGJO\FLQH3RUSK\ULQVFDQH[LVWDVZDYHIRUPVDQGSDUWLFXODWHIRUPVDQG
FDQ EULGJH WKH GLYLGLQJ OLQH EHWZHHQ WKH TXDQWDO ZRUOG DQG SDUWLFXODWH ZRUOG 3RUSK\ULQ
PROHFXOHV FDQ VHOI RUJDQL]H LQWR RUJDQLVPV ZLWK HQHUJ\ WUDQVGXFWLRQ $73 V\QWKHVLV DQG
LQIRUPDWLRQ VWRUDJH ZLWK UHSOLFDWLQJ FDSDFLW\ $ VHOI UHSOLFDWLQJ SRUSK\ULQ PLFURRUJDQLVP
PD\ KDYH SOD\HG D UROH LQ WKH RULJLQ RI OLIH 3RUSK\ULQV FDQ IRUP WHPSODWHV RQ ZKLFK
PDFURPROHFXOHV OLNH SRO\VDFFKDULGHV SURWHLQ DQG QXFOHLF DFLGV FDQ IRUP 7KH
PDFURPROHFXOHV JHQHUDWHG RQ DFWLQLGLF SRUSK\ULQV WHPSODWHV ZRXOG KDYH FRQWULEXWHG WR WKH
DFWLQLGLFQDQRDUFKDHDDQGWKHRULJLQDORUJDQLVPVRQHDUWK7KHGDWDVXSSRUWVWKHSHUVLVWHQFH
RIDQDFWLQLGLFDUFKDHDOVKDGRZELRVSKHUHZKLFKWKURZVOLJKWRQWKHDFWLQLGHEDVHGRULJLQRI
OLIHDQGSRUSK\ULQVDVWKHSUHPLHUSUHELRWLFPROHFXOH
3RUSK\ULQV SOD\ DQ LPSRUWDQW UROH LQ WKH JHQHVLV RI WKH ELRORJLFDO XQLYHUVH 7KH
SRUSK\ULQPDFURDUUD\VFDQIRUPLQWKHLQWHUVWHOODUVSDFHRQLWVRZQDVSRUSK\ULQVFDQH[LVW
ERWK DV SDUWLFOHV DQG ZDYHV 3RUSK\ULQV IRUP WKH EULGJLQJ FRQQHFWLRQ EHWZHHQ WKH TXDQWDO
ZRUOGDQGWKHSDUWLFXODWHZRUOG7KHVHOIJHQHUDWHGSRUSK\ULQVIURPWKHTXDQWDOIRDPFDQVHOI
RUJDQL]HWRIRUPPDFURDUUD\VFDQVWRUHLQIRUPDWLRQDQGVHOIUHSOLFDWH7KLVFDQEHFDOOHGDV
DQDELRWLFSRUSK\ULQRUJDQLVP7KHSRUSK\ULQWHPSODWHZRXOGKDYHJHQHUDWHGQXFOHLFDFLGV
SURWHLQVSRO\VDFFKDULGHVDQGLVRSUHQRLGV7KLVZRXOGKDYHJHQHUDWHGDFWLQLGLFQDQRDUFKDHD
LQ WKH LQWHUVWHOODU VSDFH 7KH SRUSK\ULQV KDYH PDJQHWLF SURSHUWLHV DQG WKH LQWHUVWHOODU
SRUSK\ULQRUJDQLVPFDQFRQWULEXWHWRWKHLQWHUVWHOODUJUDLQVDQGLQWHUVWHOODUPDJQHWLFILHOGV
7KH FRVPLF GXVW JUDLQV RI SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO RUJDQLVP RFFXS\ WKH
LQWHUJDODFWLF VSDFH DQG DUH WKRXJKW WR EH IRUPHG RI PDJQHWRWDFWLF EDFWHULD LGHQWLILHG

DFFRUGLQJWRWKHLUVSHFWUDOVLJQDWXUHV$FFRUGLQJWRWKH+R\OH¶VK\SRWKHVLVWKHFRVPLFGXVW
PDJQHWRWDFWLFSRUSK\ULQPDFURDUUD\VQDQRDUFKDHDORUJDQLVPSOD\VDUROHLQWKHIRUPDWLRQRI
WKHLQWHUJDODFWLFPDJQHWLFILHOG$PDJQHWLFILHOGHTXDOLQVWUHQJWKWRDERXWRQHPLOOLRQWKSDUW
RIWKHPDJQHWLFILHOGRIHDUWKH[LVWVWKURXJKRXWPXFKRIRXUJDOD[\7KHPDJQHWLFILOHVFDQ
EHXVHGWRWUDFHWKHVSLUDODUPVRIWKHJDOD[\IROORZLQJDSDWWHUQRIILHOGOLQHVWKDWFRQQHFW
\RXQJVWDUVDQGGXVWLQZKLFKQHZVWDUVDUHIRUPHGDWDUDSLGUDWH6WXGLHVKDYHVKRZQWKDWD
IUDFWLRQ RI WKH GXVW SDUWLFOHV KDYH HORQJDWHG VKDSH VLPLODU WR EDFLOOL DQG WKH\ DUH
V\VWHPDWLFDOO\ OLQHG XS LQ RXU JDOD[\ 0RUHRYHU WKH GLUHFWLRQ RI DOLJQPHQW LV VXFK WKDW WKH
ORQJD[HVRIWKHGXVWWHQGWREHDWULJKWDQJOHVWRWKHGLUHFWLRQRIWKHJDODFWLFPDJQHWLFILHOGDW
HYHU\SRLQW0DJQHWRWDFWLFSRUSK\ULQPDFURDUUD\VQDQRDUFKDHDORUJDQLVPVKDYHWKHSURSHUW\
PDFURDUUD\VQDQRDUFKDHDORUJDQLVPVDSSHDUWREHFRQQHFWHGWRWKHPDJQHWLFILHOGOLQHVWKDW
WKUHDG WKURXJK WKH VSLUDO DUPV RI WKH JDOD[\ FRQQHFWLQJ RQH UHJLRQ RI VWDU IRUPDWLRQ WR
DQRWKHUVXSSRUWDUROHIRUWKHPLQVWDUIRUPDWLRQDQGLQWKHPDVVGLVWULEXWLRQDQGURWDWLRQRI
VWDUV7KHQXWULHQWVXSSO\IRUDSRSXODWLRQRILQWHUVWHOODUSRUSK\ULQPDFURDUUD\VQDQRDUFKDHDO
OLQLQJ XS RI PDJQHWRWDFWLF SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO RUJDQLVPV DQG WKH FRVPLF
ELRORJ\ RI LQWHUVWHOODU RUJDQLVPV FDQ SURVSHU RQO\ E\ PDLQWDLQLQJ D ILUP JULS RQ WKH
LQWHUVWHOODU PDJQHWLF ILHOG DQG KHQFH RQ WKH UDWH RI VWDU IRUPDWLRQ DQG W\SH RI VWDU V\VWHP
SURGXFHG7KLVSRLQWWRDFRVPLFLQWHOOLJHQFHRUEUDLQFDSDEOHRIFRPSXWDWLRQDQDO\VLVDQG

H[SORUDWLRQ RI WKH XQLYHUVH DW ODUJH RI PDJQHWRWDFWLF SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO
RUJDQLVPQHWZRUNV7KHRULJLQRIOLIHRQHDUWKDFFRUGLQJWRWKH+R\OH¶VK\SRWKHVLVZRXOGEH
E\ VHHGLQJ RI SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO RUJDQLVP IURP WKH RXWHU LQWHUJDODFWLF
VSDFH7KHSRUSK\ULQRUJDQLVPFDQDOVREHJHQHUDWHGRQDFWLQLGLFVXUIDFHVLQHDUWK&RPHWV
FDUU\LQJSRUSK\ULQRUJDQLVPVZRXOGKDYHLQWHUDFWHGZLWKWKHHDUWK$WKLQVNLQRIJUDSKLWL]HG
PDWHULDO DURXQG D VLQJOH SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO RUJDQLVP RU FOXPSV RI
RUJDQLVP FDQ VKLHOG WKH LQWHULRU IURP GHVWUXFWLRQ E\ 89 OLJKW 7KH VXGGHQ VXUJH DQG
GLYHUVLILFDWLRQRIVSHFLHVRISODQWVDQGDQLPDOVDQGWKHLUHTXDOO\VXGGHQH[WLQFWLRQKDVVHHQ
IURP IRVVLO UHFRUGV SRLQW WR VSRUDGLF HYROXWLRQ SURGXFHG E\ LQGXFWLRQ RI IUHVK FRPHWDU\
JHQHV ZLWK WKH DUULYDO RI HDFK PDMRU QHZ FURS RI FRPHWV 7KH SRUSK\ULQ PDFURDUUD\V
RUJDQLVP FDQ KDYH D ZDYHSDUWLFOH H[LVWHQFHDQG EULGJH WKH ZRUOG RI ERVRQV DQG IHUPLRQV
7KH SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO RUJDQLVP FDQ IRUP ELRILOPV DQG WKH SRUSK\ULQ
RUJDQLVP FDQ IRUP D PROHFXODU TXDQWXP FRPSXWLQJ FORXG LQ WKH ELRILOP ZKLFK IRUPV DQ
LQWHUVWHOODULQWHOOLJHQFHUHJXODWLQJWKHIRUPDWLRQRIVWDUV\VWHPVDQGJDOD[LHV7KHSRUSK\ULQ
PDFURDUUD\V QDQRDUFKDHDO RUJDQLVP TXDQWDO FRPSXWLQJ FORXG FDQ EULGJH WKH ZDYH SDUWLFOH
ZRUOGIXQFWLRQLQJDVWKHDQWKURSLFREVHUYHUVHQVLQJJUDYLW\ZKLFKRUFKHVWUDWHVWKHUHGXFWLRQ
RI WKH TXDQWDO ZRUOG RI SRVVLELOLWLHV LQ WR WKH PDFURVFRSLF ZRUOG 7KH DFWLQLGH EDVHG
SRUSK\ULQ PDFURDUUD\VQDQRDUFKDHDO RUJDQLVP UHJXODWHV WKH KXPDQ V\VWHP DQG ELRORJLFDO
XQLYHUVH
3RUSK\ULQVDOVRKDYHHYROXWLRQDU\VLJQLILFDQFHVLQFHSRUSK\ULDLVUHODWHGWR6F\WKLDQ
UDFHV DQG FRQWULEXWHV WR WKH EHKDYLRXUDO DQG LQWHOOHFWXDO FKDUDFWHULVWLFV RI WKLV JURXS RI
SRSXODWLRQ 3RUSK\ULQV FDQ LQWHUFDODWH LQWR '1$ DQG SURGXFH +(59 H[SUHVVLRQ +(59
51$FDQJHWFRQYHUWHGWR'1$E\UHYHUVHWUDQVFULSWDVHZKLFKFDQJHWLQWHJUDWHGLQWR'1$
E\ LQWHJUDVH 7KLV WHQGV WR LQFUHDVH WKH OHQJWK RI WKH QRQFRGLQJ UHJLRQ RI WKH '1$ 7KH
LQFUHDVHG UDWHV RI SRUSK\ULQ V\QWKHVLV ZRXOG FRUUHODWH ZLWK LQFUHDVH LQ QRQFRGLQJ '1$
OHQJWK7KHDOWHUDWLRQLQWKHOHQJWKRIWKHQRQFRGLQJUHJLRQRIWKH'1$FRQWULEXWHVWRWKH
G\QDPLFQDWXUHRIWKHJHQRPH7KXVJHQHWLFDQGDFTXLUHGSRUSK\ULDVFDQOHDGWRDOWHUDWLRQLQ
WKHQRQFRGLQJUHJLRQRIWKHJHQRPH7KHDOWHUDWLRQRIWKHOHQJWKRIWKHQRQFRGLQJUHJLRQRI
WKH '1$ FRQWULEXWHV WR WKH UDFLDO DQG LQGLYLGXDO GLIIHUHQFHV LQ SRSXODWLRQV $Q LQFUHDVHG
OHQJWK RI QRQFRGLQJ UHJLRQ DV ZHOO DV LQFUHDVHG SRUSK\ULQ V\QWKHVLV OHDGV WR LQFUHDVHG
FRJQLWLYHDQGFUHDWLYHQHXURQDOIXQFWLRQ3RUSK\ULQVDUHLQYROYHGLQTXDQWDOSHUFHSWLRQDQG
UHJXODWLRQ RI WKH WKDODPRFRUWLFRWKDODPLF SDWKZD\ RI FRQVFLRXV SHUFHSWLRQ 7KXV JHQHWLF

DQGDFTXLUHGSRUSK\ULDVFRQWULEXWHWRKLJKHUFRJQLWLYHDQGFUHDWLYHFDSDFLW\RIFHUWDLQUDFHV
3RUSK\ULDVDUHFRPPRQDPRQJ(XUDVLDQ6F\WKLDQUDFHVZKRKDYHDVVXPHGOHDGHUVKLSUROHV
LQFRPPXQLWLHVDQGJURXSV3RUSK\ULQVKDYHFRQWULEXWHGWRKXPDQDQGSULPDWHHYROXWLRQ
7KH GLSRODU SRUSK\ULQV 3$+ DQG DUFKDHDO PDJQHWLWH LQ WKH VHWWLQJ RI GLJR[LQ
LQGXFHG VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ FDQ SURGXFH D SXPSHG SKRQRQ V\VWHP
PHGLDWHG )URKOLFK PRGHO VXSHUFRQGXFWLQJ VWDWH LQGXFLQJ TXDQWDO SHUFHSWLRQ ZLWK
QDQRDUFKDHDOVHQVHGJUDYLW\SURGXFLQJWKHRUFKHVWUDWHGUHGXFWLRQRIWKHTXDQWDOSRVVLELOLWLHV
WRWKHPDFURVFRSLFZRUOG$/$FDQSURGXFHVRGLXPSRWDVVLXP$73DVHLQKLELWLRQUHVXOWLQJ
LQDSXPSHGSKRQRQV\VWHPPHGLDWHGTXDQWDOVWDWHLQYROYLQJGLSRODUSRUSK\ULQV3RUSK\ULQV
E\DXWRR[LGDWLRQFDQJHQHUDWHELRSKRWRQVDQGDUHLQYROYHGLQTXDQWDOSHUFHSWLRQ%LRSKRWRQV
FDQ PHGLDWH TXDQWDO SHUFHSWLRQ &HOOXODU SRUSK\ULQV SKRWRR[LGDWLRQ DUH LQYROYHG LQ VHQVLQJ
RIHDUWKPDJQHWLFILHOGVDQGORZOHYHOELRPDJQHWLFILHOGV3RUSK\ULQVFDQWKXVFRQWULEXWHWR
TXDQWDO SHUFHSWLRQ /RZ OHYHO HOHFWURPDJQHWLF ILHOGV DQG OLJKW FDQ LQGXFH SRUSK\ULQ
V\QWKHVLV/RZOHYHO(0)FDQSURGXFHIHUURFKHODWDVHLQKLELWLRQDVZHOODVKHPHR[\JHQDVH
LQGXFWLRQ FRQWULEXWLQJ WR KHPH GHSOHWLRQ $/$ V\QWKDVH LQGXFWLRQ DQG LQFUHDVHG SRUSK\ULQ
V\QWKHVLV/LJKWDOVRLQGXFHV$/$V\QWKDVHDQGSRUSK\ULQV\QWKHVLV7KHLQFUHDVHGSRUSK\ULQ
V\QWKHVL]HG FDQ FRQWULEXWH WR LQFUHDVHG TXDQWDO SHUFHSWLRQ DQG FDQ PRGXODWH FRQVFLRXV
SHUFHSWLRQ 7KH SRUSK\ULQ LQGXFHG ELRSKRWRQV DQG TXDQWDO ILHOGV FDQ PRGXODWH WKH VRXUFH
IURPZKLFKORZOHYHO(0)DQGSKRWLFILHOGVZHUHJHQHUDWHG7KXVWKHSRUSK\ULQJHQHUDWHG
E\H[WUDQHRXVORZOHYHO(0)DQGSKRWLFILHOGVFDQLQWHUDFWZLWKWKHVRXUFHRIORZOHYHO(0)
DQG SKRWLF ILHOGV PRGXODWLQJ LW 7KXV SRUSK\ULQV FDQ VHUYH DV D EULGJH EHWZHHQ WKH KXPDQ
EUDLQ DQG WKH VRXUFH RI ORZ OHYHO (0) DQG SKRWLF ILHOGV 7KLV VHUYHV DV D PRGH RI
FRPPXQLFDWLRQ EHWZHHQ WKH KXPDQ EUDLQ DQG (0) VWRUDJH GHYLFHV OLNH LQWHUQHW 7KH
SRUSK\ULQV FDQ DOVR VHUYH DV WKH VRXUFH RI FRPPXQLFDWLRQ ZLWK WKH HQYLURQPHQW
(QYLURQPHQWDO(0)DQGFKHPLFDOVSURGXFHKHPHR[\JHQDVHLQGXFWLRQDQGKHPHGHSOHWLRQ
LQFUHDVLQJ SRUSK\ULQ V\QWKHVLV TXDQWDO SHUFHSWLRQ DQG WZRZD\ FRPPXQLFDWLRQ 7KXV
LQGXFWLRQ RI SRUSK\ULQ V\QWKHVLV FDQ VHUYH DV D PHFKDQLVP RI FRPPXQLFDWLRQ EHWZHHQ
KXPDQEUDLQDQGWKHHQYLURQPHQWE\H[WUDVHQVRU\SHUFHSWLRQ
7KH SRUSK\ULRQV DUH VHOI UHSOLFDWLQJ VXSUDPROHFXODU RUJDQLVPV ZKLFK IRUPV WKH

SURFHVV
5HIHUHQFHV
3X\ +*RX\D/ 'H\EDFK -& 3RUSK\ULDV 7KH /DQFHW ±

.DGLVK .0 6PLWK .0 *XLODUG & 3RUSK\ULQ +DQG %RRN $FDGHPLF
3UHVV1HZ<RUN(OVHYLHU
*DYLVK 0 %DFKPDQ ,6KRXNUXQ 5 .DW] < 9HHQPDQ / :HLVLQJHU
*:HL]PDQ$ (QLJPD RI WKH 3HULSKHUDO %HQ]RGLD]HSLQH 5HFHSWRU
3KDUPDFRORJLFDO5HYLHZV
&KHP
6QHOO('6QHOO&7&RORULPHWULF0HWKRGVRI$QDO\VLV9RO$1HZ<RUN
9DQ1R6WUDQG
3XEOLVKHUV
3UHVV
LQVLJKWLQWR0\FREDFWHULXPWXEHUFXORVLVVXUYLYDOLQPDFURSKDJHV3URF1DWO$FDG6FL
86$
6FKRQHU:(QGRJHQRXVFDUGLDFJO\FRVLGHVDQHZFODVVRIVWHURLGKRUPRQHV
(XU-%LRFKHP
9DLQVKWHLQ 0 6X]LQD 1 .XGU\DVKRYD ( $ULVNLQD ( 1HZ 0DJQHW
6HQVLWLYH6WUXFWXUHVLQ%DFWHULDODQG$UFKDHDO&HOOV%LRO&HOO
0LFURELRO
(QGRJHQRXVQRQUHWURYLUDO51$YLUXVHOHPHQWVLQPDPPDOLDQJHQRPHV1DWXUH

.XUXS 5 .XUXS 3$ +\SRWKDODPLF GLJR[LQ FHUHEUDO GRPLQDQFH DQG EUDLQ
IXQFWLRQLQKHDOWKDQGGLVHDVHV1HZ<RUN1RYD6FLHQFH3XEOLVKHUV

7LHOHQV $**0 ,QWHUVWHOODU 3RO\F\FOLF $URPDWLF +\GURFDUERQ 0ROHFXOHV
$QQXDO5HYLHZRI$VWURQRP\DQG$VWURSK\VLFV
:LFNUDPDVLQJKH & 7KH XQLYHUVH D FU\RJHQLF KDELWDW IRU PLFURELDO OLIH
&U\RELRORJ\
+R\OH):LFNUDPDVLQJKH&&RVPLF/LIH)RUFH/RQGRQ-0'HQWDQG6RQV
/WG

&+$37(5
3253+<5,1$1'32/<&<&/,&$520$7,&+<'52&$5%217(03/$7(6
0(',$7((1'26<0%,27,&$5&+$($/9,52,'$/$1'35,21
5(3/,&$7,213253+<5,216$1'$%,2*(1(6,6
,QWURGXFWLRQ
$ELRJHQHVLVLVDUHSOLFDWLYHPHFKDQLVPIRUSULPLWLYHOLIHIRUPV$FWLQLGLFDUFKDHDDQG
YLURLGV KDYH EHHQ UHODWHG WR WKH SDWKRJHQHVLV RI VFKL]RSKUHQLD PDOLJQDQF\ PHWDEROLF
V\QGURPH[DXWRLPPXQHGLVHDVHDQGQHXURQDOGHJHQHUDWLRQ$QDFWLQLGHGHSHQGHQWVKDGRZ
ELRVSKHUHRIDUFKDHDDQGYLURLGVLQWKHDERYHPHQWLRQHGGLVHDVHVWDWHVLVGHVFULEHG$FWLQLGLF
DUFKDHD KDYH D PHYDORQDWH SDWKZD\ DQG DUH FKROHVWHURO FDWDEROL]LQJ 7KH\ FDQ XVH
FKROHVWHURO DV D FDUERQ DQG HQHUJ\ VRXUFH $UFKDHDO FKROHVWHURO FDWDEROLVP FDQ JHQHUDWH
SRUSK\ULQV YLD WKH FKROHVWHURO ULQJ R[LGDVH JHQHUDWHG S\UXYDWH DQG *$%$ VKXQW SDWKZD\
$UFKDHD FDQ SURGXFH D VHFRQGDU\ SRUSK\ULD E\ LQGXFLQJ WKH HQ]\PH KHPH R[\JHQDVH
UHVXOWLQJ LQ KHPH GHSOHWLRQ DQG DFWLYDWLRQ RI WKH HQ]\PH $/$ V\QWKDVH 3RUSK\ULQV KDYH
EHHQ UHODWHG WR VFKL]RSKUHQLD PHWDEROLF V\QGURPH [ PDOLJQDQF\ V\VWHPLF OXSXV
HU\WKHPDWRVLVPXOWLSOHVFOHURVLVDQG$O]KHLPHU¶VGLVHDVHV3RUSK\ULQVFDQVHUYHDVWHPSODWHV
IRU PDFURPROHFXOHV OLNH 51$ '1$ SURWHLQV DQG LVRSUHQRLGDO PROHFXOHV WR IRUP 7KH
DFWLQLGLFDUFKDHDLQGXFHVSRUSK\ULQRJHQHVLVDQGSRUSK\ULQVIRUPDWHPSODWHIRUIRUPDWLRQRI
PDFURPROHFXOHV PHGLDWLQJ DFWLQLGLF DUFKDHDO DQG YLURLGDO UHSOLFDWLRQ 7KLV LV D IRUP RI
DELRJHQHVLV RQ D SRUSK\ULQ WHPSODWH 7KH DUFKDHDO V\QWKHVL]HG SRO\F\FOLF DURPDWLF
K\GURFDUERQV FDQ DOVR VHUYH DV D WHPSODWH IRU PDFURPROHFXODU UHSOLFDWLRQ DQG YLURLGDO
DFWLQLGLFDUFKDHDODELRJHQHVLV7KHUROHRIDUFKDHDOSRUSK\ULQVLQUHJXODWLRQRIFHOOIXQFWLRQV
DQG QHXURLPPXQRHQGRFULQH LQWHJUDWLRQ LV GLVFXVVHG 3RUSK\ULQV DUH SUHELRWLF PROHFXOHV
ZKLFK DUH LQYROYHG LQ DELRJHQHVLV DQG RULJLQ RI OLIH 7KH SRUSK\ULRQV DUH VHOI UHSOLFDWLQJ
VXSUDPROHFXODU RUJDQLVPV ZKLFK IRUPV WKH SUHFXUVRU WHPSODWH RQ ZKLFK WKH YLURLGV SULRQV
DQG QDQRDUFKDHD RULJLQDWH 6WUHVV LQGXFHG WHPSODWH GLUHFWHG DELRJHQHVLV RI SRUSK\ULRQV
SULRQV YLURLGV DQG DUFKDHD LV D FRQWLQXRXV SURFHVV DQG FDQ FRQWULEXWH WR FKDQJHV LQ EUDLQ
VWUXFWXUHDQGEHKDYLRUDVZHOODVGLVHDVHSURFHVV

0DWHULDOVDQG0HWKRGV
7KH IROORZLQJ JURXSV ZHUH LQFOXGHG LQ WKH VWXG\ HQGRP\RFDUGLDO ILEURVLV
$O]KHLPHU¶V GLVHDVH PXOWLSOH VFOHURVLV QRQ+RGJNLQ¶V O\PSKRPD PHWDEROLF V\QGURPH [
ZLWKFHUHEURYDVFXODUWKURPERVLVDQGFRURQDU\DUWHU\GLVHDVHVFKL]RSKUHQLDDXWLVPVHL]XUH

GLVRUGHU&UHXW]IHOGW-DNREGLVHDVHDQGDFTXLUHGLPPXQRGHILFLHQF\V\QGURPH7KHUHZHUH
SDWLHQWVLQHDFKJURXSDQGHDFKSDWLHQWKDGDQDJHDQGVH[PDWFKHGKHDOWK\FRQWUROVHOHFWHG
UDQGRPO\ IURP WKH JHQHUDO SRSXODWLRQ 7KHUH ZHUH DOVR QRUPDO SDWLHQWV ZLWK ULJKW
KHPLVSKHULF GRPLQDQFH OHIW KHPLVSKHULF GRPLQDQFH DQG ELKHPLVSKHULF GRPLQDQFH GUDZQ
IURP WKH JHQHUDO SRSXODWLRQ 7KH EORRG VDPSOHV ZHUH GUDZQ LQ WKH IDVWLQJ VWDWH EHIRUH
WUHDWPHQWZDVLQLWLDWHG3ODVPDIURPIDVWLQJKHSDULQLVHGEORRGZDVXVHGDQGWKHH[SHULPHQWDO
SURWRFRO ZDV DV IROORZV , 3ODVPDSKRVSKDWH EXIIHUHG VDOLQH ,, VDPH DV ,FKROHVWHURO
VXEVWUDWH,,,VDPHDV,,UXWLOHPJPO,9VDPHDV,,FLSURIOR[DFLQHDQGGR[\F\FOLQH
HDFK LQ D FRQFHQWUDWLRQ RI PJPO &KROHVWHURO VXEVWUDWH ZDV SUHSDUHG DV GHVFULEHG E\
5LFKPRQG $OLTXRWV ZHUH ZLWKGUDZQ DW ]HUR WLPH LPPHGLDWHO\ DIWHU PL[LQJ DQG DIWHU
LQFXEDWLRQ DW R& IRU KRXU 7KH IROORZLQJ HVWLPDWLRQV ZHUH FDUULHG RXW &\WRFKURPH
)IUHH51$IUHH'1$SRO\F\FOLFDURPDWLFK\GURFDUERQK\GURJHQSHUR[LGHS\UXYDWH
DPPRQLDJOXWDPDWHGHOWDDPLQROHYXOLQLFDFLGVXFFLQDWHJO\FLQHDQGGLJR[LQ&\WRFKURPH
QP 3RO\F\FOLF DURPDWLF K\GURFDUERQ ZDV HVWLPDWHG E\ PHDVXULQJ K\GURJHQ SHUR[LGH
OLEHUDWHG E\ XVLQJ JOXFRVH UHDJHQW 7KH VWXG\ DOVR LQYROYHG HVWLPDWLQJ WKH IROORZLQJ
SDUDPHWHUV LQ WKH SDWLHQW SRSXODWLRQ GLJR[LQ ELOH DFLG KH[RNLQDVH SRUSK\ULQV S\UXYDWH
JOXWDPDWHDPPRQLDDFHW\O&R$DFHW\OFKROLQH+0*&R$UHGXFWDVHF\WRFKURPH&EORRG
$73 $73 V\QWKDVH (59 51$ HQGRJHQRXV UHWURYLUDO 51$ +2 K\GURJHQ SHUR[LGH
12; 1$'3+ R[LGDVH 71) DOSKD DQG KHPH R[\JHQDVH ,QIRUPHG FRQVHQW RI WKH
VXEMHFWVDQGWKHDSSURYDORIWKHHWKLFVFRPPLWWHHZHUHREWDLQHGIRUWKHVWXG\7KHVWDWLVWLFDO
DQDO\VLVZDVGRQHE\$129$

5HVXOWV
3ODVPD RI FRQWURO VXEMHFWV VKRZHG LQFUHDVHG OHYHOV RI WKH DERYH PHQWLRQHG
FRPSDUHGWRFRQWUROV7KHUHVXOWVDUHH[SUHVVHGLQVHFWLRQWDEOHVDVSHUFHQWDJHFKDQJH
LQWKHSDUDPHWHUVDIWHUKRXULQFXEDWLRQDVFRPSDUHGWRWKHYDOXHVDW]HURWLPH7KHUHZDV
XSUHJXODWHG DUFKDHDO SRUSK\ULQ V\QWKHVLV LQ WKH SDWLHQW SRSXODWLRQ ZKLFK ZDV DUFKDHDO LQ

RULJLQ DV LQGLFDWHG E\ DFWLQLGH FDWDO\VLV RI WKH UHDFWLRQV 7KH FKROHVWHURO R[LGDVH SDWKZD\
JHQHUDWHG S\UXYDWH ZKLFK HQWHUHG WKH *$%$ VKXQW SDWKZD\ 7KLV UHVXOWHG LQ V\QWKHVLV RI
VXFFLQDWHDQGJO\FLQHZKLFKDUHVXEVWUDWHVIRU$/$V\QWKDVH
7KHVWXG\VKRZHGWKHSDWLHQW¶VEORRGDQGULJKWKHPLVSKHULFGRPLQDQFHKDGLQFUHDVHG
KHPH R[\JHQDVH DFWLYLW\ DQG SRUSK\ULQV 7KH KH[RNLQDVH DFWLYLW\ ZDV KLJK 7KH S\UXYDWH
JOXWDPDWH DQG DPPRQLD OHYHOV ZHUH HOHYDWHG LQGLFDWLQJ EORFNDGH RI 3'+ DFWLYLW\ DQG
RSHUDWLRQRIWKH*$%$VKXQWSDWKZD\7KHDFHW\O&R$OHYHOVZHUHORZDQGDFHW\OFKROLQH
ZDV GHFUHDVHG 7KH F\WR& OHYHOV ZHUH LQFUHDVHG LQ WKH VHUXP LQGLFDWLQJ PLWRFKRQGULDO
G\VIXQFWLRQ VXJJHVWHG E\ ORZ EORRG $73 OHYHOV 7KLV ZDV LQGLFDWLYH RI WKH :DUEXUJ¶V
SKHQRW\SH7KHUHZHUHLQFUHDVHG12;DQG71)DOSKDOHYHOVLQGLFDWLQJLPPXQHDFWLYDWLRQ
7KH +0* &R$ UHGXFWDVH DFWLYLW\ ZDV KLJK LQGLFDWLQJ FKROHVWHURO V\QWKHVLV 7KH ELOH DFLG
OHYHOVZHUHORZLQGLFDWLQJGHSOHWLRQRIF\WRFKURPH37KHQRUPDOSRSXODWLRQZLWKULJKW
KHPLVSKHULF GRPLQDQFH KDG YDOXHV UHVHPEOLQJ WKH SDWLHQW SRSXODWLRQ ZLWK LQFUHDVHG
SRUSK\ULQV\QWKHVLV7KHQRUPDOSRSXODWLRQZLWKOHIWKHPLVSKHULFGRPLQDQFHKDGORZYDOXHV
ZLWKGHFUHDVHGSRUSK\ULQV\QWKHVLV
7KH LQFUHDVH LQ F\WRFKURPH ) DQG VHOI UHSOLFDWLQJ 51$ LQGLFDWLQJ 51$ YLURLGV
SDUDOOHOHGWKHULVHLQSRUSK\ULQOHYHOVLQGLFDWLQJWKDWSRUSK\ULQVFRXOGVHUYHDVDWHPSODWHIRU
DFWLQLGLFDUFKDHDODQG51$YLURLGDODELRJHQHVLVDQGUHSOLFDWLRQ7KHLQFUHDVHLQF\WRFKURPH
) DQG VHOI UHSOLFDWLQJ 51$ LQGLFDWLQJ 51$ YLURLGV SDUDOOHOHG WKH ULVH LQ 3$+ OHYHOV
LQGLFDWLQJWKDW3$+FRXOGVHUYHDVDWHPSODWHIRUDUFKDHDODQG51$YLURLGDODELRJHQHVLVDQG
UHSOLFDWLRQ7KHUHZDVDQLQFUHDVHLQSRUSK\ULQVDQG3$+LQ&-'LQGLFDWLQJSULRQVPD\DOVR
VHOIUHSOLFDWHRQSRUSK\ULQDQG3$+WHPSODWHV

6HFWLRQ([SHULPHQWDOVWXG\
7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQF\WRFKURPH)DQG3$+
&<7) &<7) 3$+FKDQJH 3$+FKDQJH

0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)

0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)

7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQGLJR[LQDQGGHOWDDPLQROHYXOLQLFDFLG
'LJR[LQ QJPO 'LJR[LQ QJPO $/$ $/$

*URXS
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQVXFFLQDWHDQGJO\FLQH
6XFFLQDWH 6XFFLQDWH *O\FLQHFKDQJH

*O\FLQHFKDQJH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)

7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQS\UXYDWHDQGJOXWDPDWH
3\UXYDWHFKDQJH 3\UXYDWHFKDQJH *OXWDPDWH *OXWDPDWH

*URXS
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)

7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQK\GURJHQSHUR[LGHDQGDPPRQLD
+2 +2 $PPRQLD $PPRQLD

*URXS
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)

6HFWLRQ3DWLHQWVWXG\
7DEOH
5%&'LJR[LQ &\WRFKURPH) 51$YLURLG +2XPROPO

*URXS QJPO5%&6XVS XJPO 5%&
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUHEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH

7DEOH
12;2' 71)$/3 $/$ 3%*

*URXS GLIIKUPJSUR SJPO XPRO XPRO
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUHEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH

7DEOH
8URSRUSK\ULQ &RSURSRUSK\ULQ 3URWRSRUSK\ULQ +HPH

*URXS QPRO QPRO $EXQLW X0
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH

7DEOH
%LOLYHUGLQ $736\QWKDVH 6($73

%LOLUXELQPJGO
*URXS $EXQLW XPROJ+E XPROGO
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUHEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH

7DEOH
5%&
/DFWDWH 3\UXYDWH +H[RNLQDVH
&\WR&QJPO
*URXS PJGO XPROO XJJOXSKRV
KUPJSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUHEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH

7DEOH
$&2$ $&+ *OXWDPDWH

*URXS PJGO XJPO PJGO
0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUHEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH

7DEOH
+0*&R$
6H$PPRQLD %LOH$FLG
+0*
*URXS XJGO PJPO
&R$0(9
0HDQ 6' 0HDQ 6' 0HDQ 6'
12%+&'
5+&'
/+&'
6FKL]R
6HL]XUH
+'
$'
06
6/(
1+/
*OLR
'0
&$'
&9$
$,'6
&-'
$XWLVP
'6
&HUHEUDO3DOV\
&5)
&LUU+HS)DLO
0XF$QJLR
(0)
&&3
([SRVXUHWR(0)
)YDOXH
3YDOXH
$EEUHYLDWLRQV
12%+&'1RUPDO%LKHPLVSKHULFFKHPLFDOGRPLQDQFH
5+&'5LJKWKHPLVSKHULFFKHPLFDOGRPLQDQFH
/+&'/HIWKHPLVSKHULFFKHPLFDOGRPLQDQFH
6FKL]R6FKL]RSKUHQLD
+'+XQWLQJWRQ¶VGLVHDVH
$'$O]KHLPHU¶VGLVHDVH
060XOWLSOHVFOHURVLV
6/(6\VWHPLFOXSXVHU\WKHPDWRVLV
1+/1RQKRGJNLQ¶VO\PSKRPD
*OLR*OLRPD
'0'LDEHWHVPHOOLWXV
&$'&RURQDU\DUWHU\GLVHDVH
&9$&HUHEURYDVFXODUDFFLGHQW
$,'6$FTXLUHGLPPXQRGHILFLHQF\V\QGURPH
&-'&UHXW]IHOGW-DNREGLVHDVH
'6'RZQV\QGURPH
&5)&KURQLFUHQDOIDLOXUH
&LUU+HS)DLO&LUUKRVLV+HSDWLFIDLOXUH
(0)(QGRP\RFDUGLDOILEURVLV
&&3&KURQLFFDOFLILFSDQFUHDWLWLV

'LVFXVVLRQ
GHK\GURJHQDVH DFWLYLW\ LQGLFDWLQJ GLJR[LQ V\QWKHVLV 7KH DUFKDHDO FKROHVWHURO R[LGDVH
S\UXYDWHLVFRQYHUWHGWRJOXWDPDWHE\VHUXPJOXWDPDWHS\UXYDWHWUDQVDPLQDVH7KHJOXWDPDWH
JHWV DFWHG XSRQ E\ JOXWDPDWH GHK\GURJHQDVH WR JHQHUDWH DOSKD NHWRJOXWDUDWH DQG DPPRQLD
$ODQLQH LV PRVW FRPPRQO\ SURGXFHG E\ WKH UHGXFWLYH DPLQDWLRQ RI S\UXYDWH YLD DODQLQH
WUDQVDPLQDVH7KLVUHYHUVLEOHUHDFWLRQLQYROYHVWKHLQWHUFRQYHUVLRQRIDODQLQHDQGS\UXYDWH
FRXSOHGWRWKHLQWHUFRQYHUVLRQRIDOSKDNHWRJOXWDUDWHR[RJOXWDUDWHDQGJOXWDPDWH$ODQLQH
FDQ FRQWULEXWH WR JO\FLQH *OXWDPDWH LV DFWHG XSRQ E\ *OXWDPLF DFLG GHFDUER[\ODVH WR
JHQHUDWH *$%$ *$%$ LV FRQYHUWHG WR VXFFLQLF VHPLDOGHK\GH E\ *$%$ WUDQVDPLQDVH
6XFFLQLF VHPLDOGHK\GH LV FRQYHUWHG WR VXFFLQLF DFLG E\ VXFFLQLF VHPLDOGHK\GH
$/$ V\QWKDVH 7KH DUFKDHDO DURPDWL]DWLRQ RI FKROHVWHURO JHQHUDWLQJ 3$+ VHURWRQLQ DQG
GRSDPLQH ZDV DOVR GHWHFWHG 7KH DUFKDHDO JO\FRO\WLF KH[RNLQDVH DFWLYLW\ DQG DUFKDHDO
H[WUDFHOOXODU$73V\QWKDVHDFWLYLW\ZHUHLQFUHDVHG7KHDUFKDHDFDQXQGHUJRPDJQHWLWHDQG
FDOFLXPFDUERQDWHPLQHUDOL]DWLRQDQGFDQH[LVWDVFDOFLILHGQDQRIRUPV
7KH DFWLQLGLF DUFKDHD DQG YLURLGV LQGXFH SRUSK\ULQRJHQHVLV 3RUSK\ULQV VHUYH DV D
WHPSODWH IRU IRUPDWLRQ RI QXFOHLF DFLGV SURWHLQ DQG LVRSUHQRLGDO PRLHWLHV ZKLFK JHW
RUJDQL]HG WR IRUP QDQRDUFKDHD DQG YLURLGV 7KH SRUSK\ULQ WHPSODWHV PHGLDWH YLURLGDO DQG
DUFKDHDO DELRJHQHVLV DQG UHSOLFDWLRQ 7KH DUFKDHDO V\QWKHVL]HG 3$+ FDQ DOVR VHUYH DV D
WHPSODWH IRU VHOI UHSOLFDWLRQ RI PDFURPROHFXOHV DQG QDQRDUFKDHDOYLURLGDO DELRJHQHVLV

3RUSK\ULQ DQG 3$+ WHPSODWHV PHGLDWH DFWLQLGLF DUFKDHDO DQG YLURLGDO DELRJHQHVLV DQG
UHSOLFDWLRQ 7KH\ DUH LQGLFDWLYH RI SULPLWLYH SRUSK\ULQ RUJDQLVP DQG 3$+ RUJDQLVP DV
RULJLQDOOLIHIRUPVRQHDUWK$ELRJHQHVLVLVDUHSOLFDWLYHPHFKDQLVPIRUSULPLWLYHRUJDQLVPV
7KHQDQRDUFKDHDDQGYLURLGVPD\UHSOLFDWHE\DELRJHQHVLVRQSRUSK\ULQDQG3$+WHPSODWHV
DFWLQLGHVXUIDFHVZRXOGE\VXUIDFHPHWDEROLVPJHQHUDWHSRUSK\ULQVIURPVLPSOHFRPSRXQGV
OLNH VXFFLQLF DFLG DQG JO\FLQH 3RO\F\FOLF DURPDWLF K\GURFDUERQV FDQ DOVR EH JHQHUDWHG E\
DFWLQLGLFVXUIDFHPHWDEROLVP3RUSK\ULQVDQGSRO\F\FOLFDURPDWLFK\GURFDUERQVFDQH[LVWDV
ZDYHIRUPVDQGSDUWLFXODWHIRUPVDQGFDQEULGJHWKHGLYLGLQJOLQHEHWZHHQWKHTXDQWDOZRUOG
DQG SDUWLFXODWH ZRUOG 3RUSK\ULQ DQG SRO\F\FOLF DURPDWLF K\GURFDUERQV PROHFXOHV FDQ VHOI
RUJDQL]HLQWRRUJDQLVPVZLWKFDSDFLWLHVIRUHQHUJ\WUDQVGXFWLRQ$73V\QWKHVLVLQIRUPDWLRQ
VWRUDJH DQG UHSOLFDWLQJ DELOLW\ $ VHOI UHSOLFDWLQJ SRUSK\ULQ RU SRO\F\FOLF DURPDWLF
K\GURFDUERQV PLFURRUJDQLVP PD\ KDYH SOD\HG D UROH LQ WKH RULJLQ RI OLIH 3RUSK\ULQV DQG
SRO\F\FOLF DURPDWLF K\GURFDUERQV FDQ IRUP WHPSODWHV RQ ZKLFK PDFURPROHFXOHV OLNH
SRO\VDFFKDULGHV SURWHLQ DQG QXFOHLF DFLGV FDQ IRUP 7KH PDFURPROHFXOHV JHQHUDWHG RQ
DFWLQLGLFSRUSK\ULQVDQGSRO\F\FOLFDURPDWLFK\GURFDUERQVWHPSODWHVZRXOGKDYHFRQWULEXWHG
WR WKH DFWLQLGLF QDQRDUFKDHDYLURLGV DQG WKH RULJLQDO RUJDQLVPV RQ HDUWK 7KH GDWD VXSSRUWV
WKHSHUVLVWHQFHRIDQDFWLQLGLFDUFKDHDODQGYLURLGDOVKDGRZELRVSKHUHZKLFKWKURZVOLJKWRQ
WKH DFWLQLGH EDVHG RULJLQ RI OLIH DQG SRUSK\ULQV SRO\F\FOLF DURPDWLF K\GURFDUERQV DV WKH
SUHPLHUSUHELRWLFPROHFXOH
3RUSK\ULQV DQG SRO\F\FOLF DURPDWLF K\GURFDUERQV SOD\ DQ LPSRUWDQW UROH LQ WKH
JHQHVLV RI WKH ELRORJLFDO XQLYHUVH 7KH SRUSK\ULQ DQG SRO\F\FOLF DURPDWLF K\GURFDUERQV
PDFURDUUD\V FDQ IRUP LQ WKH LQWHUVWHOODU VSDFH RQ LWV RZQ DV SRUSK\ULQV FDQ H[LVW ERWK DV
SDUWLFOHV DQG ZDYHV 3RUSK\ULQV DQG SRO\F\FOLF DURPDWLF K\GURFDUERQV IRUP WKH EULGJLQJ
FRQQHFWLRQ EHWZHHQ WKH TXDQWDO ZRUOG DQG WKH SDUWLFXODWH ZRUOG 7KH VHOI JHQHUDWHG
SRUSK\ULQVDQGSRO\F\FOLFDURPDWLFK\GURFDUERQVIURPWKHTXDQWDOIRDPFDQVHOIRUJDQL]HWR
IRUPPDFURDUUD\VFDQVWRUHLQIRUPDWLRQDQGVHOIUHSOLFDWH7KLVFDQEHFDOOHGDVDQDELRWLF
SRUSK\ULQ DQG SRO\F\FOLF DURPDWLF K\GURFDUERQV RUJDQLVP 7KH SRUSK\ULQ DQG SRO\F\FOLF
DURPDWLF K\GURFDUERQV WHPSODWH ZRXOG KDYH JHQHUDWHG QXFOHLF DFLGV SURWHLQV
SRO\VDFFKDULGHVDQGLVRSUHQRLGV7KLVZRXOGKDYHJHQHUDWHGDFWLQLGLFQDQRDUFKDHDYLURLGVLQ
WKH LQWHUVWHOODU VSDFH 7KH SRUSK\ULQV DQG SRO\F\FOLF DURPDWLF K\GURFDUERQV KDYH PDJQHWLF

SURSHUWLHV DQG WKH LQWHUVWHOODU SRUSK\ULQ SRO\F\FOLF DURPDWLF K\GURFDUERQV RUJDQLVP FDQ
FRQWULEXWHWRWKHLQWHUVWHOODUJUDLQVDQGLQWHUVWHOODUPDJQHWLFILHOGV7KHFRVPLFGXVWJUDLQV
RI SRUSK\ULQ SRO\F\FOLF DURPDWLF K\GURFDUERQV PDFURDUUD\V DQG QDQRDUFKDHDO RUJDQLVP
RFFXS\ WKH LQWHUJDODFWLF VSDFH DQG DUH WKRXJKW WR EH IRUPHG RI PDJQHWRWDFWLF EDFWHULD
LGHQWLILHG DFFRUGLQJ WR WKHLU VSHFWUDO VLJQDWXUHV $FFRUGLQJ WR WKH +R\OH¶V K\SRWKHVLV WKH
FRVPLF GXVW PDJQHWRWDFWLF SRUSK\ULQSRO\F\FOLF DURPDWLF K\GURFDUERQV PDFURDUUD\V DQG
QDQRDUFKDHDO RUJDQLVP SOD\V D UROH LQ WKH IRUPDWLRQ RI WKH LQWHUJDODFWLF PDJQHWLF ILHOG $
PDJQHWLF ILHOG HTXDO LQ VWUHQJWK WR DERXW RQH PLOOLRQWK SDUW RI WKH PDJQHWLF ILHOG RI HDUWK
H[LVWVWKURXJKRXWPXFKRIRXUJDOD[\7KHPDJQHWLFILOHVFDQEHXVHGWRWUDFHWKHVSLUDODUPV
RIWKHJDOD[\IROORZLQJDSDWWHUQRIILHOGOLQHVWKDWFRQQHFW\RXQJVWDUVDQGGXVWLQZKLFKQHZ
VWDUVDUHIRUPHGDWDUDSLGUDWH6WXGLHVKDYHVKRZQWKDWDIUDFWLRQRIWKHGXVWSDUWLFOHVKDYH
HORQJDWHG VKDSH VLPLODU WR EDFLOOL DQG WKH\ DUH V\VWHPDWLFDOO\ OLQHG XS LQ RXU JDOD[\
0RUHRYHUWKHGLUHFWLRQRIDOLJQPHQWLVVXFKWKDWWKHORQJD[HVRIWKHGXVWWHQGWREHDWULJKW
DQJOHVWRWKHGLUHFWLRQRIWKHJDODFWLFPDJQHWLFILHOGDWHYHU\SRLQW0DJQHWRWDFWLFSRUSK\ULQ
SRO\F\FOLFDURPDWLFK\GURFDUERQVPDFURDUUD\VDQGQDQRDUFKDHDORUJDQLVPKDYHWKHSURSHUW\
SRO\F\FOLF DURPDWLF K\GURFDUERQV PDFURDUUD\V DQG QDQRDUFKDHDO RUJDQLVPV DSSHDU WR EH
FRQQHFWHG WR WKH PDJQHWLF ILHOG OLQHV WKDW WKUHDG WKURXJK WKH VSLUDO DUPV RI WKH JDOD[\
FRQQHFWLQJRQHUHJLRQRIVWDUIRUPDWLRQWRDQRWKHUVXSSRUWDUROHIRUWKHPLQVWDUIRUPDWLRQ
DQG LQ WKH PDVV GLVWULEXWLRQ DQG URWDWLRQ RI VWDUV 7KH QXWULHQW VXSSO\ IRU D SRSXODWLRQ RI
LQWHUVWHOODU SRUSK\ULQSRO\F\FOLF DURPDWLF K\GURFDUERQV PDFURDUUD\V DQG QDQRDUFKDHDO

OLQLQJ XS RI PDJQHWRWDFWLF SRUSK\ULQSRO\F\FOLF DURPDWLF K\GURFDUERQV PDFURDUUD\V DQG
QDQRDUFKDHDORUJDQLVPVDQGWKHFRVPLFELRORJ\RILQWHUVWHOODURUJDQLVPVFDQSURVSHURQO\E\
PDLQWDLQLQJ D ILUP JULS RQ WKH LQWHUVWHOODU PDJQHWLF ILHOG DQG KHQFH RQ WKH UDWH RI VWDU
IRUPDWLRQ DQG W\SH RI VWDU V\VWHP SURGXFHG 7KLV SRLQW WR D FRVPLF LQWHOOLJHQFH RU EUDLQ
FDSDEOH RI FRPSXWDWLRQ DQDO\VLV DQG H[SORUDWLRQ RI WKH XQLYHUVH DW ODUJH RI PDJQHWRWDFWLF
SRUSK\ULQSRO\F\FOLF DURPDWLF K\GURFDUERQV PDFURDUUD\V DQG QDQRDUFKDHDO RUJDQLVP
QHWZRUNV 7KH RULJLQ RI OLIH RQ HDUWK DFFRUGLQJ WR WKH +R\OH¶V K\SRWKHVLV ZRXOG EH E\
VHHGLQJ RI SRUSK\ULQSRO\F\FOLF DURPDWLF K\GURFDUERQV PDFURDUUD\V DQG QDQRDUFKDHDO
RUJDQLVPIURPWKHRXWHULQWHUJDODFWLFVSDFH7KHSRUSK\ULQSRO\F\FOLFDURPDWLFK\GURFDUERQ
RUJDQLVP FDQ DOVR EH JHQHUDWHG RQ DFWLQLGLF VXUIDFHV LQ HDUWK &RPHWV FDUU\LQJ SRUSK\ULQ
SRO\F\FOLF DURPDWLF K\GURFDUERQV RUJDQLVPV ZRXOG KDYH LQWHUDFWHG ZLWK WKH HDUWK $ WKLQ
VNLQ RI JUDSKLWL]HG PDWHULDO DURXQG D VLQJOH SRUSK\ULQSRO\F\FOLF DURPDWLF K\GURFDUERQV
PDFURDUUD\VDQGQDQRDUFKDHDORUJDQLVPRUFOXPSVRIRUJDQLVPFDQVKLHOGWKHLQWHULRUIURP
GHVWUXFWLRQ E\ 89 OLJKW 7KH VXGGHQ VXUJH DQG GLYHUVLILFDWLRQ RI VSHFLHV RI SODQWV DQG
DQLPDOV DQG WKHLU HTXDOO\ VXGGHQ H[WLQFWLRQ KDV VHHQ IURP IRVVLO UHFRUGV SRLQW WR VSRUDGLF
HYROXWLRQSURGXFHGE\LQGXFWLRQRIIUHVKFRPHWDU\JHQHVZLWKWKHDUULYDORIHDFKPDMRUQHZ
FURS RI FRPHWV 7KH SRUSK\ULQ SRO\F\FOLF DURPDWLF K\GURFDUERQ PDFURDUUD\V RUJDQLVP
FDQ KDYH D ZDYH SDUWLFOH H[LVWHQFH DQG EULGJH WKH ZRUOG RI ERVRQV DQG IHUPLRQV 7KH
SRUSK\ULQSRO\F\FOLF DURPDWLF K\GURFDUERQ PDFURDUUD\V DQG QDQRDUFKDHDO RUJDQLVP FDQ
IRUPELRILOPVDQGWKHSRUSK\ULQRUJDQLVPFDQIRUPDPROHFXODUTXDQWXPFRPSXWLQJFORXGLQ
WKHELRILOPZKLFKIRUPVDQLQWHUVWHOODULQWHOOLJHQFHUHJXODWLQJWKHIRUPDWLRQRIVWDUV\VWHPV
DQGJDOD[LHV7KHSRUSK\ULQSRO\F\FOLFDURPDWLFK\GURFDUERQPDFURDUUD\VDQGQDQRDUFKDHDO
RUJDQLVP TXDQWDO FRPSXWLQJ FORXG FDQ EULGJH WKH ZDYH SDUWLFOH ZRUOG IXQFWLRQLQJ DV WKH
DQWKURSLFREVHUYHUVHQVLQJJUDYLW\ZKLFKRUFKHVWUDWHVWKHUHGXFWLRQRIWKHTXDQWDOZRUOGRI
SRVVLELOLWLHV LQ WR WKH PDFURVFRSLF ZRUOG 7KH DFWLQLGH EDVHG SRUSK\ULQSRO\F\FOLF DURPDWLF
K\GURFDUERQ PDFURDUUD\V DQG QDQRDUFKDHDO RUJDQLVP UHJXODWHV WKH KXPDQ V\VWHP DQG
ELRORJLFDOXQLYHUVH
7KH SRUSK\ULQV FDQ PRGXODWH FHOO IXQFWLRQV DQG SURGXFH QHXURLPPXQRHQGRFULQH

LQWHJUDWLRQ7KHSRUSK\ULQ3$+FDQXQGHUJRSKRWRR[LGDWLRQDQGDXWRR[LGDWLRQJHQHUDWLQJ
IUHH UDGLFDOV 7KH DUFKDHDO SRUSK\ULQ3$+ FDQ SURGXFH IUHH UDGLFDO LQMXU\ )UHH UDGLFDOV
SURGXFH 1).% DFWLYDWLRQ RSHQ WKH PLWRFKRQGULDO 37 SRUH UHVXOWLQJ LQ FHOO GHDWK SURGXFH

RQFRJHQH DFWLYDWLRQ DFWLYDWH 10'$ UHFHSWRU DQG *$' HQ]\PH UHJXODWLQJ
QHXURWUDQVPLVVLRQDQGJHQHUDWHVWKH:DUEXUJSKHQRW\SHVDFWLYDWLQJJO\FRO\VLVDQGLQKLELWLQJ
7&$ F\FOHR[SKRV 3RUSK\ULQV KDYH EHHQ UHODWHG WR VFKL]RSKUHQLD PHWDEROLF V\QGURPH [
PDOLJQDQF\V\VWHPLFOXSXVHU\WKHPDWRVLVPXOWLSOHVFOHURVLVDQG$O]KHLPHU¶VGLVHDVHV7KH
SRUSK\ULQ3$+ FDQ FRPSOH[ DQG LQWHUFDODWH ZLWK WKH FHOO PHPEUDQH SURGXFLQJ VRGLXP
SRWDVVLXP$73DVHLQKLELWLRQDGGLQJRQWRGLJR[LQPHGLDWHGLQKLELWLRQ3RUSK\ULQ3$+FDQ
FRPSOH[ ZLWK SURWHLQV DQG QXFOHLF DFLG SURGXFLQJ ELRSKRWRQ HPLVVLRQ 3RUSK\ULQ3$+
FRPSOH[LQJ ZLWK SURWHLQV FDQ PRGXODWH SURWHLQ VWUXFWXUH DQG IXQFWLRQ 3RUSK\ULQ3$+
FRPSOH[LQJZLWK'1$DQG51$FDQPRGXODWHWUDQVFULSWLRQDQGWUDQVODWLRQ7KHSRUSK\ULQ
HVSHFLDOO\ SURWRSRUSK\ULQV FDQ ELQG WR SHULSKHUDO EHQ]RGLD]HSLQH UHFHSWRUV LQ WKH
PLWRFKRQGULD DQG PRGXODWH LWV IXQFWLRQ PLWRFKRQGULDO FKROHVWHURO WUDQVSRUW DQG
VWHURLGRJHQHVLV 3HULSKHUDO EHQ]RGLD]HSLQH UHFHSWRU PRGXODWLRQ E\ SURWRSRUSK\ULQV FDQ
UHJXODWH FHOO GHDWK FHOO SUROLIHUDWLRQ LPPXQLW\ DQG QHXUDO IXQFWLRQV 7KH SRUSK\ULQ3$+
SKRWRR[LGDWLRQ JHQHUDWHV IUHH UDGLFDOV ZKLFK FDQ PRGXODWH HQ]\PH IXQFWLRQ 5HGR[ VWUHVV
PRGXODWHGHQ]\PHVLQFOXGHS\UXYDWHGHK\GURJHQDVHQLWULFR[LGHV\QWKDVHF\VWDWKLRQHEHWD
V\QWKDVH DQG KHPH R[\JHQDVH )UHH UDGLFDOV FDQ PRGXODWH PLWRFKRQGULDO 37 SRUH IXQFWLRQ
)UHH UDGLFDOV FDQ PRGXODWH FHOO PHPEUDQH IXQFWLRQ DQG LQKLELW VRGLXP SRWDVVLXP $73DVH
DFWLYLW\7KXVWKHSRUSK\ULQ3$+DUHNH\UHJXODWRU\PROHFXOHVPRGXODWLQJDOODVSHFWVRIFHOO
IXQFWLRQ 7KHUH ZDV DQ LQFUHDVH LQ IUHH 51$ LQGLFDWLQJ VHOI UHSOLFDWLQJ 51$ YLURLGV DQG
IUHH '1$ LQGLFDWLQJ JHQHUDWLRQ RI YLURLG FRPSOHPHQWDU\ '1$ VWUDQGV E\ DUFKDHDO UHYHUVH
WUDQVFULSWDVH DFWLYLW\ 7KH YLURLGV FDQ VHOI UHSOLFDWH RQ SRUSK\ULQ3$+ WHPSODWHV 7KH
DFWLQLGHV 3$+ DQG SRUSK\ULQV PRGXODWH 51$ IROGLQJ DQG FDWDO\VH LWV ULER]\PDO DFWLRQ
UHWURWUDQVSRVLWLRQ DQG VHOI VSOLFLQJ TXDOLWLHV $UFKDHDO S\UXYDWH SURGXFLQJ KLVWRQH
GHDFHW\ODVH LQKLELWLRQ DQG SRUSK\ULQV LQWHUFDODWLQJ ZLWK '1$ FDQ SURGXFH HQGRJHQRXV
UHWURYLUDO+(59UHYHUVHWUDQVFULSWDVHDQGLQWHJUDVHH[SUHVVLRQ7KLVFDQLQWHJUDWHWKH51$
YLURLGDO FRPSOHPHQWDU\ '1$ LQWR WKH QRQFRGLQJ UHJLRQ RI HXNDU\RWLF QRQFRGLQJ '1$
XVLQJ +(59 LQWHJUDVH DV KDV EHHQ GHVFULEHG IRU ERUQD DQG HEROD YLUXVHV 7KH DUFKDHD DQG
YLURLGVFDQDOVRLQGXFHFHOOXODUSRUSK\ULQ3$+V\QWKHVLV%DFWHULDODQGYLUDOLQIHFWLRQVFDQ
SUHFLSLWDWH SRUSK\ULD 7KXV SRUSK\ULQ3$+ FDQ UHJXODWH JHQRPLF IXQFWLRQ 7KH LQFUHDVHG
H[SUHVVLRQRI+(5951$FDQUHVXOWLQDFTXLUHGLPPXQRGHILFLHQF\V\QGURPHDXWRLPPXQH
GLVHDVHQHXURQDOGHJHQHUDWLRQVVFKL]RSKUHQLDDQGPDOLJQDQF\

7KHSRVVLELOLW\RI:DUEXUJSKHQRW\SHLQGXFHGE\DFWLQLGHEDVHGSULPLWLYHRUJDQLVP
OLNH DUFKDHD ZLWK D PHYDORQDWH SDWKZD\ DQG FKROHVWHURO FDWDEROLVP ZDV FRQVLGHUHG LQ WKLV
SDSHU7KH:DUEXUJSKHQRW\SHUHVXOWVLQLQKLELWLRQRIS\UXYDWHGHK\GURJHQDVHDQGWKH7&$
F\FOH7KHS\UXYDWHHQWHUVWKH*$%$VKXQWSDWKZD\ZKHUHLWLVFRQYHUWHGWRVXFFLQ\O&R$
7KH JO\FRO\WLF SDWKZD\ LV XSUHJXODWHG DQG WKH JO\FRO\WLF PHWDEROLWH SKRVSKRJO\FHUDWH LV
FRQYHUWHG WR VHULQH DQG JO\FLQH *O\FLQH DQG VXFFLQ\O &R$ DUH WKH VXEVWUDWHV IRU $/$
V\QWKHVLV7KHDUFKDHDLQGXFHVWKHHQ]\PHKHPHR[\JHQDVH+HPHR[\JHQDVHFRQYHUWVKHPH
WRELOLUXELQDQGELOLYHUGLQ7KLVGHSOHWHVKHPHIURPWKHV\VWHPDQGUHVXOWVLQXSUHJXODWLRQRI
$/$V\QWKDVHDFWLYLW\UHVXOWLQJLQSRUSK\ULD+HPHLQKLELWV+,)DOSKD7KHKHPHGHSOHWLRQ
UHVXOWV LQ XSUHJXODWLRQ RI +,) DOSKD DFWLYLW\ DQG IXUWKHU VWUHQJWKHQLQJ RI WKH :DUEXUJ
SKHQRW\SH 7KH SRUSK\ULQ3$+ VHOI R[LGDWLRQ UHVXOWV LQ UHGR[ VWUHVV ZKLFK DFWLYDWHV +,)
DOSKD DQG JHQHUDWHV WKH :DUEXUJ SKHQRW\SH 7KH :DUEXUJ SKHQRW\SH UHVXOWV LQ FKDQQHOLQJ
DFHW\O &R$ IRU FKROHVWHURO V\QWKHVLV DV WKH 7&$ F\FOH DQG PLWRFKRQGULDO R[LGDWLYH
SKRVSKRU\ODWLRQDUHEORFNHG7KHDUFKDHDXVHVFKROHVWHURODVDQHQHUJ\VXEVWUDWH3RUSK\ULQ
DQG$/$LQKLELWVVRGLXPSRWDVVLXP$73DVH7KLVLQFUHDVHVFKROHVWHUROV\QWKHVLVE\DFWLQJ
XSRQ LQWUDFHOOXODU 65(%3 7KH FKROHVWHURO LV PHWDEROL]HG WR S\UXYDWH DQG WKHQ WKH *$%$
VKXQWSDWKZD\IRUXOWLPDWHXVHLQSRUSK\ULQV\QWKHVLV7KHSRUSK\ULQVFDQVHOIRUJDQL]HDQG
VHOI UHSOLFDWH LQWR PDFURPROHFXODU DUUD\V 7KH SRUSK\ULQ DUUD\V EHKDYH OLNH DQ DXWRQRPRXV
RUJDQLVP DQG FDQ KDYH LQWUDPROHFXODU HOHFWURQ WUDQVSRUW JHQHUDWLQJ $73 7KH SRUSK\ULQ
PDFURDUUD\V FDQ VWRUH LQIRUPDWLRQ DQG FDQ KDYH TXDQWDO SHUFHSWLRQ 7KH SRUSK\ULQ
PDFURDUUD\VVHUYHVWKHSXUSRVHRIDUFKDHDOHQHUJHWLFVDQGVHQVRU\SHUFHSWLRQ7KH:DUEXUJ
SKHQRW\SHLVDVVRFLDWHGZLWKPDOLJQDQF\DXWRLPPXQHGLVHDVHDQGPHWDEROLFV\QGURPH[
7KH UROH RI DUFKDHDO SRUSK\ULQV LQ UHJXODWLRQ RI FHOO IXQFWLRQV DQG QHXURLPPXQR
HQGRFULQH LQWHJUDWLRQ LV GLVFXVVHG 3URWRSRUSK\ULQ ELQGV WR WKH SHULSKHUDO EHQ]RGLD]HSLQH
UHFHSWRU UHJXODWLQJ VWHURLG DQG GLJR[LQ V\QWKHVLV ,QFUHDVHG SRUSK\ULQ PHWDEROLWHV FDQ
FRQWULEXWHWRK\SHUGLJR[LQHPLD'LJR[LQFDQPRGXODWHWKHQHXURLPPXQRHQGRFULQHV\VWHP
3RUSK\ULQ3$+ FDQ FRPELQH ZLWK PHPEUDQHV PRGXODWLQJ PHPEUDQH IXQFWLRQ
3RUSK\ULQ3$+FDQFRPELQHZLWKSURWHLQVR[LGL]LQJWKHLUW\URVLQHWU\SWRSKDQF\VWHLQHDQG
KLVWLGLQH UHVLGXHV SURGXFLQJ FURVVOLQNLQJ DQG DOWHULQJ SURWHLQ FRQIRUPDWLRQ DQG IXQFWLRQ
3RUSK\ULQ3$+FDQFRPSOH[ZLWK'1$DQG51$PRGXODWLQJWKHLUIXQFWLRQ3RUSK\ULQ3$+
LQWHUSRODWLQJ ZLWK '1$ FDQ DOWHU WUDQVFULSWLRQ DQG JHQHUDWH +(59 H[SUHVVLRQ +HPH
GHILFLHQF\ FDQ DOVR UHVXOW LQ GLVHDVH VWDWHV +HPH GHILFLHQF\ UHVXOWV LQ GHILFLHQF\ RI KHPH
HQ]\PHV 7KHUH LV GHILFLHQF\ RI F\WRFKURPH & R[LGDVH DQG PLWRFKRQGULDO G\VIXQFWLRQ 7KH

JOXWDWKLRQHSHUR[LGDVHLVG\VIXQFWLRQDODQGWKHJOXWDWKLRQHV\VWHPRIIUHHUDGLFDOVFDYHQJLQJ
GRHVQRWIXQFWLRQ7KHF\WRFKURPH3HQ]\PHVLQYROYHGLQVWHURLGDQGELOHDFLGV\QWKHVLV
KDYH UHGXFHG DFWLYLW\ OHDGLQJ WR VWHURLG FRUWLVRO DQG VH[ KRUPRQHV DV ZHOO DV ELOH DFLG
GHILFLHQF\VWDWHV7KHKHPHGHILFLHQF\UHVXOWVLQG\VIXQFWLRQRIQLWULFR[LGHV\QWKDVHKHPH
R[\JHQDVHDQGF\VWDWKLRQHEHWDV\QWKDVHUHVXOWLQJLQODFNRIJDVRWUDQVPLWWHUVUHJXODWLQJWKH
YDVFXODU V\VWHP DQG 10'$ UHFHSWRU 12 &2 DQG +6 +HPH KDV JRW F\WRSURWHFWLYH
QHXURSURWHFWLYHDQWLLQIODPPDWRU\DQGDQWLSUROLIHUDWLYHHIIHFWV+HPHLVDOVRLQYROYHGLQWKH
VWUHVV UHVSRQVH +HPH GHILFLHQF\ OHDGV WR PHWDEROLF V\QGURPH LPPXQH GLVHDVH
GHJHQHUDWLRQVDQGFDQFHU
WKDODPRFRUWLFRWKDODPLFSDWKZD\PHGLDWLQJFRQVFLRXVSHUFHSWLRQ3RUSK\ULQSKRWRR[LGDWLRQ
FDQ JHQHUDWH IUHH UDGLFDOV ZKLFK FDQ PRGXODWH 10'$ WUDQVPLVVLRQ )UHH UDGLFDOV FDQ
LQFUHDVH10'$WUDQVPLVVLRQ)UHHUDGLFDOVFDQLQGXFH*$'DQGLQFUHDVH*$%$V\QWKHVLV
$/$ EORFNV *$%$ WUDQVPLVVLRQ DQG XSUHJXODWHV 10'$ 3URWRSRUSK\ULQV ELQG WR *$%$
UHFHSWRU DQG SURPRWH *$%$ WUDQVPLVVLRQ 7KXV SRUSK\ULQV FDQ PRGXODWH WKH
WKDODPRFRUWLFRWKDODPLFSDWKZD\RIFRQVFLRXVSHUFHSWLRQ7KHGLSRODUSRUSK\ULQV3$+DQG
DUFKDHDO PDJQHWLWH LQ WKH VHWWLQJ RI GLJR[LQ LQGXFHG VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ
FDQ SURGXFH D SXPSHG SKRQRQ V\VWHP PHGLDWHG )URKOLFK PRGHO VXSHUFRQGXFWLQJ VWDWH
LQGXFLQJ TXDQWDO SHUFHSWLRQ ZLWK QDQRDUFKDHDO VHQVHG JUDYLW\ SURGXFLQJ WKH RUFKHVWUDWHG
UHGXFWLRQ RI WKH TXDQWDO SRVVLELOLWLHV WR WKH PDFURVFRSLF ZRUOG $/$ FDQ SURGXFH VRGLXP
SRWDVVLXP $73DVH LQKLELWLRQ UHVXOWLQJ LQ D SXPSHG SKRQRQ V\VWHP PHGLDWHG TXDQWDO VWDWH
LQYROYLQJ GLSRODU SRUSK\ULQV 3RUSK\ULQ PROHFXOHV KDYH D ZDYH SDUWLFOH H[LVWHQFH DQG FDQ
EULGJHWKHGLYLGLQJOLQHEHWZHHQTXDQWDOVWDWHDQGSDUWLFXODWHVWDWH7KXVWKHSRUSK\ULQVFDQ
PHGLDWHFRQVFLRXVDQGTXDQWDOSHUFHSWLRQ3RUSK\ULQVELQGLQJWRSURWHLQVQXFOHLFDFLGVDQG
FHOOPHPEUDQHVFDQSURGXFHELRSKRWRQHPLVVLRQ3RUSK\ULQVE\DXWRR[LGDWLRQFDQJHQHUDWH
ELRSKRWRQV DQG DUH LQYROYHG LQ TXDQWDO SHUFHSWLRQ %LRSKRWRQV FDQ PHGLDWH TXDQWDO
SHUFHSWLRQ &HOOXODU SRUSK\ULQV SKRWRR[LGDWLRQ DUH LQYROYHG LQ VHQVLQJ RI HDUWK PDJQHWLF
ILHOGV DQG ORZ OHYHO ELRPDJQHWLF ILHOGV 7KXV SURSK\ULQV FDQ PHGLDWH H[WUDVHQVRU\
SHUFHSWLRQ 7KH SRUSK\ULQV FDQ PRGXODWH KHPLVSKHULF GRPLQDQFH 7KHUH LV LQFUHDVHG
SRUSK\ULQ V\QWKHVLV DQG ULJKW KHPLVSKHULFDO FKHPLFDO GRPLQDQFH DQG GHFUHDVHG SRUSK\ULQ
V\QWKHVLVLQOHIWKHPLVSKHULFDOFKHPLFDOGRPLQDQFH7KHLQFUHDVHLQDUFKDHDOSRUSK\ULQVFDQ
FRQWULEXWHWRWKHSDWKRJHQHVLVRIVFKL]RSKUHQLDDQGDXWLVP3RUSK\ULDFDQOHDGWRSV\FKLDWULF
GLVRUGHUV DQG VHL]XUHV $OWHUHG SRUSK\ULQ PHWDEROLVP KDV EHHQ GHVFULEHG LQ DXWLVP

3RUSK\ULQE\PRGXODWLQJFRQVFLRXVDQGTXDQWDOSHUFHSWLRQLVLQYROYHGLQWKHSDWKRJHQHVLVRI
VFKL]RSKUHQLD DQG DXWLVP 3URWRSRUSK\ULQV EORFN DFHW\O FKROLQH WUDQVPLVVLRQ SURGXFLQJ D
YDJDO QHXURSDWK\ ZLWK V\PSDWKHWLF RYHUDFWLYLW\ 9DJDO QHXURSDWK\ UHVXOWV LQ LPPXQH
DFWLYDWLRQ YDVRVSDVP DQG YDVFXODU GLVHDVH $ YDJDO QHXURSDWK\ XQGHUOLQHV QHRSODVWLF DQG
DXWRLPPXQHSURFHVVHVDVZHOODVPHWDEROLFV\QGURPH[3RUSK\ULQLQGXFHGLQFUHDVHG10'$
WUDQVPLVVLRQDQGIUHHUDGLFDOLQMXU\FDQFRQWULEXWHWRQHXURQDOGHJHQHUDWLRQ)UHHUDGLFDOVFDQ
SURGXFHPLWRFKRQGULDO37SRUHG\VIXQFWLRQ7KLVFDQOHDGWRF\WR&OHDNDQGDFWLYDWLRQRIWKH
FDVSDVHFDVFDGHOHDGLQJWRDSRSWRVLVDQGFHOOGHDWK$OWHUHGSRUSK\ULQPHWDEROLVPKDVEHHQ
GHVFULEHG LQ $O]KHLPHU¶V GLVHDVH 7KH LQFUHDVHG SRUSK\ULQ SKRWRR[LGDWLRQ JHQHUDWHG IUHH
UDGLFDOV PHGLDWHG 10'$ WUDQVPLVVLRQ FDQ DOVR FRQWULEXWH WR HSLOHSWRJHQHVLV 7KH
SURWRSRUSK\ULQV ELQGLQJ WR PLWRFKRQGULDO EHQ]RGLD]HSLQH UHFHSWRUV FDQ UHJXODWH EUDLQ
IXQFWLRQDQGFHOOGHDWK
7KHSRUSK\ULQDQG3$+SKRWRR[LGDWLRQFDQJHQHUDWHIUHHUDGLFDOVZKLFKFDQDFWLYDWH
1).% 7KLV FDQ SURGXFH LPPXQH DFWLYDWLRQ DQG F\WRNLQH PHGLDWHG LQMXU\ 7KH LQFUHDVH LQ
DUFKDHDOSRUSK\ULQVFDQOHDGWRDXWRLPPXQHGLVHDVHOLNH6/(DQG06$KHUHGLWDU\IRUPRI
06 DQG 6/( UHODWHG WR DOWHUHG SRUSK\ULQ PHWDEROLVP KDV EHHQ GHVFULEHG 7KH
SURWRSRUSK\ULQV ELQGLQJ WR PLWRFKRQGULDO EHQ]RGLD]HSLQH UHFHSWRUV FDQ PRGXODWH LPPXQH
IXQFWLRQ 3RUSK\ULQ3$+ FDQ FRPELQH ZLWK SURWHLQV R[LGL]LQJ WKHLU W\URVLQH WU\SWRSKDQ
F\VWHLQHDQGKLVWLGLQHUHVLGXHVSURGXFLQJFURVVOLQNLQJDQGDOWHULQJSURWHLQFRQIRUPDWLRQDQG
IXQFWLRQ 3RUSK\ULQV FDQ FRPSOH[ ZLWK '1$ DQG 51$ PRGXODWLQJ WKHLU VWUXFWXUH
3RUSK\ULQ3$+ FRPSOH[HG ZLWK SURWHLQV DQG QXFOHLF DFLGV DUH DQWLJHQLF DQG FDQ OHDG RQWR
DXWRLPPXQHGLVHDVH7KHSRUSK\ULQ3$+SKRWRR[LGDWLRQPHGLDWHGIUHHUDGLFDOLQMXU\FDQ
OHDG WR LQVXOLQ UHVLVWDQFH DQG DWKHURJHQHVLV 7KXV DUFKDHDO SRUSK\ULQV FDQ FRQWULEXWH WR
PHWDEROLF V\QGURPH [ *OXFRVH KDV JRW D QHJDWLYH HIIHFW XSRQ $/$ V\QWKDVH DFWLYLW\
7KHUHIRUH K\SHUJO\FHPLD PD\ EH UHDFWLYH SURWHFWLYH PHFKDQLVP WR LQFUHDVHG DUFKDHDO
SRUSK\ULQV\QWKHVLV7KHSURWRSRUSK\ULQVELQGLQJWRPLWRFKRQGULDOEHQ]RGLD]HSLQHUHFHSWRUV
FDQPRGXODWHPLWRFKRQGULDOVWHURLGRJHQHVLVDQGPHWDEROLVP$OWHUHGSRUSK\ULQPHWDEROLVP
KDV EHHQ GHVFULEHG LQ WKH PHWDEROLF V\QGURPH [ 3RUSK\ULDV FDQ OHDG RQWR YDVFXODU
WKURPERVLV 7KH SRUSK\ULQ3$+ SKRWRR[LGDWLRQ FDQ JHQHUDWH IUHH UDGLFDOV LQGXFLQJ +,)
DOSKD DQG SURGXFLQJ RQFRJHQH DFWLYDWLRQ +HPH GHILFLHQF\ FDQ OHDG WR DFWLYDWLRQ RI +,)
DOSKD DQG RQFRJHQHVLV 7KLV FDQ OHDG WR RQFRJHQHVLV +HSDWLF SRUSK\ULDV LQGXFHG
KHSDWRFHOOXODU FDUFLQRPD 7KH SURWRSRUSK\ULQV ELQGLQJ WR PLWRFKRQGULDO EHQ]RGLD]HSLQH
UHFHSWRUV FDQ UHJXODWH FHOO SUROLIHUDWLRQ 7KH SRUSK\ULQ3$+ FDQ FRPELQH ZLWK SULRQ

SURWHLQV PRGXODWLQJ WKHLU FRQIRUPDWLRQ 7KLV OHDGV WR DEQRUPDO SULRQ SURWHLQ FRQIRUPDWLRQ
DQG GHJUDGDWLRQ $UFKDHDO SRUSK\ULQ3$+ FDQ FRQWULEXWH WR SULRQ GLVHDVH 7KH
SRUSK\ULQ3$+FDQLQWHUFDODWHZLWK'1$SURGXFLQJ+(59H[SUHVVLRQ7KH+(59SDUWLFOHV
JHQHUDWHGFDQFRQWULEXWHWRWKHUHWURYLUDOVWDWH 7KHSRUSK\ULQ3$+LQWKHEORRGFDQFRPELQH
ZLWKEDFWHULDDQGYLUXVHVDQGWKHSKRWRR[LGDWLRQJHQHUDWHGIUHHUDGLFDOVFDQNLOOWKHP7KH
DUFKDHDOSRUSK\ULQ3$+FDQPRGXODWHEDFWHULDODQGYLUDOLQIHFWLRQV7KHDUFKDHDOSRUSK\ULQV
DUHUHJXODWRU\PROHFXOHVNHHSLQJRWKHUSURNDU\RWHVDQGYLUXVHVRQFKHFN7KXVWKHDUFKDHDO
SRUSK\ULQV FDQ FRQWULEXWH WR WKH SDWKRJHQHVLV RI PHWDEROLF V\QGURPH [ PDOLJQDQF\
SV\FKLDWULF GLVRUGHUV DXWRLPPXQH GLVHDVH $,'6 SULRQ GLVHDVH QHXURQDO GHJHQHUDWLRQ DQG
HSLOHSWRJHQHVLV $UFKDHDO SRUSK\ULQ V\QWKHVLV3$+ LV FUXFLDO LQ WKH SDWKRJHQHVLV RI WKHVH
GLVRUGHUV 3RUSK\ULQV PD\ VHUYH DV UHJXODWRU\ PROHFXOHV PRGXODWLQJ LPPXQH QHXUDO
HQGRFULQH PHWDEROLF DQG JHQHWLF V\VWHPV 7KH SRUSK\ULQ3$+ SKRWRR[LGDWLRQ JHQHUDWHG
IUHH UDGLFDOV FDQ SURGXFH LPPXQH DFWLYDWLRQ SURGXFH FHOO GHDWK DFWLYDWH FHOO SUROLIHUDWLRQ
SURGXFH LQVXOLQ UHVLVWDQFH DQG PRGXODWH FRQVFLRXVTXDQWDO SHUFHSWLRQ 7KH DUFKDHDO
SRUSK\ULQV IXQFWLRQV DV NH\ UHJXODWRU\ PROHFXOHV ZLWK PLWRFKRQGULDO EHQ]RGLD]HSLQH
UHFHSWRUVSOD\LQJDQLPSRUWDQWUROH
3RUSK\ULQDQG3$+KDYHFRQWULEXWHGWRWKHSULPDWHDQGKXPDQHYROXWLRQ3RUSK\ULQV
DOVR KDYH HYROXWLRQDU\ VLJQLILFDQFH VLQFH SRUSK\ULD LV UHODWHG WR 6F\WKLDQ UDFHV DQG
FRQWULEXWHV WR WKH EHKDYLRXUDO DQG LQWHOOHFWXDO FKDUDFWHULVWLFV RI WKLV JURXS RI SRSXODWLRQ
3RUSK\ULQVDQG3$+FDQLQWHUFDODWHLQWR'1$DQGSURGXFH+(59H[SUHVVLRQ+(5951$
FDQ JHW FRQYHUWHG WR '1$ E\ UHYHUVH WUDQVFULSWDVH ZKLFK FDQ JHW LQWHJUDWHG LQWR '1$ E\
LQWHJUDVH 7KLV WHQGV WR LQFUHDVH WKH OHQJWK RI WKH QRQFRGLQJ UHJLRQ RI WKH '1$ 7KH
LQFUHDVHGUDWHVRISRUSK\ULQDQG3$+V\QWKHVLVZRXOGFRUUHODWHZLWKLQFUHDVHLQQRQFRGLQJ
'1$OHQJWK7KHDOWHUDWLRQLQWKHOHQJWKRIWKHQRQFRGLQJUHJLRQRIWKH'1$FRQWULEXWHVWR
WKH G\QDPLF QDWXUH RI WKH JHQRPH 7KXV JHQHWLF DQG DFTXLUHG SRUSK\ULDV FDQ OHDG WR
DOWHUDWLRQ LQ WKH QRQ FRGLQJ UHJLRQ RI WKH JHQRPH 7KH DOWHUDWLRQ RI WKH OHQJWK RI WKH QRQ
FRGLQJUHJLRQRIWKH'1$FRQWULEXWHVWRWKHUDFLDODQGLQGLYLGXDOGLIIHUHQFHVLQSRSXODWLRQV
$QLQFUHDVHGOHQJWKRIQRQFRGLQJUHJLRQDVZHOODVLQFUHDVHGSRUSK\ULQ3$+V\QWKHVLVOHDGV
WR LQFUHDVHG FRJQLWLYH DQG FUHDWLYH QHXURQDO IXQFWLRQ 3RUSK\ULQV3$+ DUH LQYROYHG LQ
TXDQWDO SHUFHSWLRQ DQG UHJXODWLRQ RI WKH WKDODPRFRUWLFRWKDODPLF SDWKZD\ RI FRQVFLRXV
SHUFHSWLRQ7KXVJHQHWLFDQGDFTXLUHGSRUSK\ULDVFRQWULEXWHWRKLJKHUFRJQLWLYHDQGFUHDWLYH
FDSDFLW\RIFHUWDLQUDFHV3RUSK\ULDVDUHFRPPRQDPRQJ(XUDVLDQ6F\WKLDQUDFHVZKRKDYH

DVVXPHGOHDGHUVKLSUROHVLQFRPPXQLWLHVDQGJURXSV3RUSK\ULQVKDYHFRQWULEXWHGWRKXPDQ
DQGSULPDWHHYROXWLRQ
PHQWLRQHG GLVHDVH VWDWHV LV GHVFULEHG 7KH DFWLQLGLF DUFKDHD DQG YLURLGV LQGXFH
SRUSK\ULQRJHQHVLV3RUSK\ULQVVHUYHDVDWHPSODWHIRUIRUPDWLRQRIQXFOHLFDFLGVSURWHLQDQG
LVRSUHQRLGDO PRLHWLHV ZKLFK JHW RUJDQL]HG WR IRUP QDQRDUFKDHD DQG YLURLGV 7KH SRUSK\ULQ
WHPSODWHVPHGLDWHYLURLGDODQGDUFKDHDODELRJHQHVLVDQGUHSOLFDWLRQ7KHDUFKDHDOV\QWKHVL]HG
3$+ FDQ DOVR VHUYH DV D WHPSODWH IRU VHOI UHSOLFDWLRQ RI PDFURPROHFXOHV DQG
QDQRDUFKDHDOYLURLGDO DELRJHQHVLV 7KH DUFKDHDO SRUSK\ULQV FDQ FRQWULEXWH WR WKH
SDWKRJHQHVLV RI PHWDEROLF V\QGURPH [ PDOLJQDQF\ SV\FKLDWULF GLVRUGHUV DXWRLPPXQH
GLVHDVH$,'6SULRQGLVHDVHQHXURQDOGHJHQHUDWLRQDQGHSLOHSWRJHQHVLV$UFKDHDOSRUSK\ULQ
V\QWKHVLVLVFUXFLDOLQWKHSDWKRJHQHVLVRIWKHVHGLVRUGHUV3RUSK\ULQVPD\VHUYHDVUHJXODWRU\
PROHFXOHV PRGXODWLQJ LPPXQH QHXUDO HQGRFULQH PHWDEROLF DQG JHQHWLF V\VWHPV 7KH
SRUSK\ULQV SKRWRR[LGDWLRQ JHQHUDWHG IUHH UDGLFDOV FDQ SURGXFH EHQ]RGLD]HSLQH UHFHSWRU
PRGXODWLRQLPPXQHDFWLYDWLRQSURGXFHFHOOGHDWKDFWLYDWHFHOOSUROLIHUDWLRQSURGXFHLQVXOLQ
UHVLVWDQFHPRGXODWHFRQVFLRXVTXDQWDOSHUFHSWLRQDQGPHGLDWHKHPLVSKHULFGRPLQDQFH7KH
UROHRISRUSK\ULQVDQG3$+LQDELRJHQHVLVDQGRULJLQRIOLIHDVZHOODVELRORJLFDOXQLYHUVHLV
GLVFXVVHG3RUSK\ULQDQG3$+WHPSODWHVPHGLDWHDFWLQLGLFDUFKDHDODQGYLURLGDODELRJHQHVLV
DQG UHSOLFDWLRQ 7KH\ DUH LQGLFDWLYH RI SULPLWLYH SRUSK\ULQ RUJDQLVP DQG 3$+ RUJDQLVP DV
RULJLQDOOLIHIRUPVRQHDUWK
7KH SRUSK\ULRQV DUH VHOI UHSOLFDWLQJ VXSUDPROHFXODU RUJDQLVPV ZKLFK IRUPV WKH
SURFHVV
5HIHUHQFHV
3X\ +*RX\D/ 'H\EDFK -& 3RUSK\ULDV 7KH /DQFHW ±

.DGLVK .0 6PLWK .0 *XLODUG & 3RUSK\ULQ +DQG %RRN $FDGHPLF
3UHVV1HZ<RUN(OVHYLHU
*DYLVK 0 %DFKPDQ ,6KRXNUXQ 5 .DW] < 9HHQPDQ / :HLVLQJHU
*:HL]PDQ$ (QLJPD RI WKH 3HULSKHUDO %HQ]RGLD]HSLQH 5HFHSWRU
3KDUPDFRORJLFDO5HYLHZV
&KHP
9DQ1R6WUDQG
3XEOLVKHUV
3UHVV
86$
(XU-%LRFKHP
0LFURELRO

7LHOHQV $**0 ,QWHUVWHOODU 3RO\F\FOLF $URPDWLF +\GURFDUERQ 0ROHFXOHV
$QQXDO5HYLHZRI$VWURQRP\DQG$VWURSK\VLFV
:LFNUDPDVLQJKH & 7KH XQLYHUVH D FU\RJHQLF KDELWDW IRU PLFURELDO OLIH
&U\RELRORJ\

+R\OH):LFNUDPDVLQJKH&&RVPLF/LIH)RUFH/RQGRQ-0'HQWDQG6RQV
/WG

&+$37(5
$5&+$($/',*2;,1$5&+$($/9,52,'6(0(5*,1*9,5$/3$1'(0,&6
+2021($1'(57+$/,69,5866(&5(7,21$1'+2026$3,(1
(;7,1&7,21

*OREDO ZDUPLQJ OHDGV WR HQGRV\PELRWLF DQG FRORQLF DUFKDHDO JURZWK DQG
QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV DQG DFWLYDWLRQ RI UHPQDQW1HDQGHUWKDO PDWULOLQHDO VSHFLHV
7KHHQGRV\PELRWLFDUFKDHDVHFUHWHV51$YLURLGVZKLFKFDQJHWFRQYHUWHGXVLQJWKHKXPDQ
+(59UHYHUVHWUDQVFULSWDVHWR'1$YLURLGV7KH51$YLURLGVDQG'1$YLURLGVJHQHUDWHGE\
KXPDQDUFKDHDFDQK\EULGLVHZLWKWKHKXPDQYLURELRPHDQGPLFURELRPHDVZHOODVKXPDQ
JHQRPHVHTXHQFHVSURGXFLQJHPHUJLQJQHZYLUXVHVDQGSDQGHPLFV$UFKDHDOHQGRV\PELRVLV
UHVXOWVLQQHDQGHUWKDOLVDWLRQRIWKHVSHFLHVDQGLQFUHDVHLQGHQVLW\RIKRPRQHDQGHUWKDOLV7KH
HQGRV\PELRWLF KRPR QHDQGHUWKDOLF DUFKDHD VHFUHWHV 51$ YLURLGV ZKLFK DV VDLG EHIRUH JHWV
FRQYHUWHGWR'1$YLURLGVE\KXPDQ+(59UHYHUVHWUDQVFULSWDVH7KH51$DQG'1$YLURLGV
K\EULGL]H ZLWK RWKHU FRPSRQHQWV RI WKH KXPDQ YLURELRPH DQG KXPDQ JHQRPLF VHTXHQFHV
SURGXFLQJQHZFDWDVWURSKLFSDQGHPLFYLUXVHV7KHKRPRQHDQGHUWKDOLVVHUYHVDVDJHQHUDWRU
DQG UHVHUYRLU RI WKH HPHUJLQJ YLUXVHV +RPR QHDQGHUWKDOLV DUFKDHDO 51$ YLURLGV DUH WKH
SURJHQLWRUVRIWKHYLUXVHV7KHDUFKDHDFDQDOVRVHFUHWHSRUSK\ULRQVZKLFKIRUPVWHPSODWHV
IRU51$DQG'1$YLURLGVWRIRUP7KHSRUSK\ULRQVDUHWKHPRVWVLPSOHVWRIWKHRUJDQLVP
7KH SRUSK\ULRQV DUH FDSDEOH RI VHOI RUJDQL]DWLRQ DQG VHOI UHSOLFDWLRQ RQ SUHH[LVWLQJ
WHPSODWHV WR IRUP SULRQV SULPLWLYH 51$ YLURLGV DQG '1$ YLURLGV 7KH DUFKDHDO
HQGRV\PELRQW RI KRPR QHDQGHUWKDOLV V\QWKHVL]HV GLJR[LQ IURP WKH LVRSUHQRLG SDWKZD\
'LJR[LQLVWKH1HDQGHUWKDOHYROXWLRQDU\KRUPRQH'LJR[LQLVDVPDOOPROHFXOHWKDWFDQDFWDW
WKH51$OHYHOVSOLFLQJFXWWLQJDQGHGLWLQJ51$DQGFDQGHVWUR\WKH51$YLURLGVSHUVH7KH
DUFKDHD FDQ LQGXFH VWHP FHOO WUDQVIRUPDWLRQ RI WKH KXPDQ FHOOV YLD N\QXUHQLQH SDWKZD\ RI
WU\SWRSKDQ FDWDEROLVP $UFKDHDO LQGXFHG :DUEXUJ SKHQRW\SH FDQ JHQHUDWH VWHP FHOOV 7KH
VWHPFHOOVDUHSURWHFWHGIURPLPPXQHDWWDFNDQGWKHDUFKDHDJHQHUDWHGYLUXVHVFDQVXUYLYHLQ
WKHVWHPFHOOV7KHDUFKDHDOGLJR[LQZLOONLOODSHUFHQWDJHRIWKHYLUXVHVDQGSUHYHQWLQJWKHP
IURP H[SDQGLQJ LQ WKHLU FORQHV LQWHUERGLHV 6WXGLHV KDYH VKRZQ WKDW WKH DQWLYLUDO HIIHFW RI
VRGLXPSRWDVVLXP$73DVHLQKLELWLRQ&DUGLDFJO\FRVLGHVQRWRQO\VHUYHWKHSXPSIXQFWLRQRI
VRGLXPSRWDVVLXP $73DVH EXW DOVR DFWLYDWH LQWUDFHOOXODU VLJQDO WUDQVGXFWLRQ ZKLFK DUH
LPSRUWDQWLQPDQ\ELRORJLFDOSURFHVVHV5HFHQWO\DQWLYLUDOHIIHFWVKDYHEHHQGHVFULEHGDVD
QRYHO IHDWXUH RI VRGLXPSRWDVVLXP $73DVH LQKLELWLRQ ZLWK WKH XVH RI FDUGLDF JO\FRVLGHV
&DUGLDF JO\FRVLGHV DUH UHSRUWHG WR EH HIIHFWLYH DJDLQVW ERWK '1$ YLUVXHV VXFK DV

F\WRPHJDORYLUXVDQGKHUSHVVLPSOH[YLUXVDQG51$YLUXVHVVXFKDVLQIOXHQ]DFKLNXQJXQ\D
FRURQDYLUXVDQGUHVSLUDWRU\V\QF\QWLDOYLUXV&RQVHTXHQWO\FDUGLDFJO\FRVLGHVKDYHHPHUJHG
DV SRWHQWLDO EURDG VSHFWUXP DQWLYLUDO GUXJV ZLWK JUHDW DGYDQWDJH RI WDUJHWLQJ KRVW FHOO
SURWHLQV ZKLFK KHOS WR PLQLPL]H UHVLVWDQFH WR DQWLYLUDO WUHDWPHQW PDNLQJ WKHP D YHU\
SURPLVLQJVWUDWHJ\DJDLQVWKXPDQYLUDOLQIHFWLRQ
6RGLXPSRWDVVLXP$73DVHFODVVLFDOUROHLVWRPDLQWDLQWKHHOHFWURO\WHKRPHRVWDVLVRI
WKHFHOOVE\SXPSLQJFDWLRQVLQDQGRXWRIWKHFHOOXVLQJWKHHQHUJ\REWDLQHGIURPK\GURO\VLV
RI$73+RZHYHUVRGLXPSRWDVVLXP$73DVHLVDOVRDNH\VFDIIROGLQJSURWHLQWKDWLVFDSDEOH
RILQWHUDFWLQJZLWKVLJQDOLQJSURWHLQVVXFKDSURWHLQNLQDVH&3.&DQGSKRVSKRLRQRVLWLGH
NLQDVH3,.,WDOVRZRUNVDVFDUGLDFUHFHSWRULQZKLFKWKHELQGLQJRIWKHFDUGLDFJO\FRVLGH
LQGXFHVDFWLYDWLRQRIW\URVLQHNLQDVH65&DQGGRZQVWUHDPVLJQDOLQJFDVFDGHLQGHSHQGHQW
RI LQWUDFHOOXODU LRQV 9LUXVHV DUH LQWUDFHOOXODU SDUDVLWHV ZKRVH OLIH F\FOH LV GHSHQGHQW RQ
KLMDFNLQJ FHOOXDU IXQFWLRQV OLNH SURWHLQ V\QWKHVLV DQG LQWUDFHOOXODU WUDQVSRUW RI PROHFXOHV WR
SURPRWH WKHLU UHSOLFDWLRQ RI VSUHDGLQJ 7KH LQIHFWLRQ EHJLQV ZLWK WKH DWWDFKHPHQW RI YLUDO
SDUWLFOHWRWKHVXUIDFHH[SRVHGFHOOXODUPROHFXOHVDQGWKHHQWU\LQWRWKHFHOOE\HQGRF\WRVLV
2QFH WKH YLUDO FRPSRQHQWV DUH LQ WKH LQWUDFHOOXODU HQYLURQPHQW WKH YLUDO SURWHLQ WKDW
V\QWKHVL]HGXVLQJWKHKRVWFHOOWUDQVODWLRQDOPDFKLQHU\DQGQHZYLUDOSDUWLFOHVDUHWUDQVSRUWHG
WR WKH VXUIDFH WR EH UHOHDVHG DQG LQIHFW RWKHU FHOOV 7DUJHWLQJ KRVW FHOO FRPSRQHQWV VXFK DV
VRGLXPSRWDVVLXP $73DVH LV DQ HIIHFWLYH DQWLYLUDO VWUDWHJ\ 7KH KXPDQ H[SUHVVLRQ RI
SDUYRYLUXV % FDSVLG SURWHLQ 93 GHFUHDVHV VRGLXPSRWDVVLXP $73DVH DFWLYLW\ 6RGLXP
SRWDVVLXP $73DVH LV GRZQ UHJXODWHG LQ DOYHRODU HSLWKHOLDO FHOOV LQIHFWHG ZLWK LQIOXHQ]D $
+1 DQG +1 VWUDLQV 6RGLXPSRWDVVLXP $73DVH DFWLYLW\ FDQ DOVR EH GHFUHDVHG E\ WKH
VLQGELV YLUXV DQG HQWHURYLUXV FR[VDFNLH % LQIHFWLRQ &DULGDF JO\FRVLGHV LQKLELW &09
LQIHFWLRQDVZHOODVKHUSHVYLUXVUHSOLFDWLRQ7KH\GRVRE\LQKLELWLQJWKHH[SUHVVLRQWKHYLUDO
JHQHV ZLWK WKH DQWLYLUDO DFWLRQ FRUUHODWHG ZLWK WKH SRWHQF\ DJDLQVW VRGLXPSRWDVVLXP
$73DVH'LJLWR[LQLQKLELWV+69UHSOLFDWLRQSHUFHQWDJH'LJLWR[LQLPSDLUVWKH+69YLUDO
OLIHF\FOHDWWZRGLIIHUHQWVWHSVYLUDO'1$V\QWKHVLVDQGYLUDOUHOHDVHIURPKRVWFHOO'LJR[LQ
DOVR LPSDLUV WKH DGHQRYLUXV JHQRPH UHSOLFDWLRQ E\ DOWHULQJ WKH KRVW SUH 51$ VSOLFLQJ
PDFKLQHU\&KLFNXQJXQ\DYLUXVLVVXVFHSWLEOHWRWUHDWPHQWZLWKGLJR[LQDVDOVRRWKHU51$
YLUXVHVOLNHVLQELVYLUXVYHVLFXODUVWRPDWLWLVYLUXV&RUQRDYLUXV0(56&R96$56&R9DUH
UHSUHVVHG6RGLXPSRWDVVLXP$73DVHDOSKDVXEXQLWLVVLOHQFHGRULQKLELWHGE\ORZGRVHRIWKH
FDUGLDF JO\FRVLGH 7KH FDUGLDF JO\FRVLGH DQWLYLUDO HIIHFW LV UHOLHYHG E\ WKH LQKLELWLRQ RI WKH
65& SDWKZD\ ,QKLELWLRQ RI 6RGLXPSRWDVVLXP $73DVH E\ FDUGLDF JO\FRVLGHV GHFUHDVHV

LQIOXHQ]DYLUXVUHSOLFDWLRQE\KRVWWUDQVODWLRQDOFHOOPDFKLQHU\YLDDGHFUHDVHLQLQWUDFHOOXODU
SRWDVVLXP 7KH +,9 YLUXV LV DOVR VXVFHSWLEOH WR FDUGLDF JO\FRVLGH WUHDWPHQW :DQJ HW DO
VKRZHG WKDW GLJR[LQ LQKLELWV WKH UHSOLFDWLRQ RI FOLQLFDO VWUDLQV RI +,9 E\ LPSDLULQJ WKH
VSOLFLQJ PHFKDQLVP RI YLUDO 51$ DQG FRQVHTXHQWO\ WKH VWUXFWXUDO SURWHLQ V\QWKHVLV RI WKH
YLUVXV /RZ FRQFHQWUDWLRQ RI FDUGLDF JO\FRVLGHV LQKLELW +,9 JHQH H[SUHVVLRQ WKURXJK
PRGXODWLRQ RI WKH PLWRJHQ DFWLYDWHG SURWHLQ NLQDVHV H[WUDFHOOXODU VLJQDO UHJXODWHG NLQDVH
0(.(5.VLJQDOLQJYLDLQWHUDFWLRQZLWK6RGLXPSRWDVVLXP$73DVHLQGHSHQGHQWRI
DOWHUDWLRQ LQ LQWUDFHOOXODU FDOFLXP (LWKHU E\ DFWLYDWLQJ VLJQDOLQJ RU E\ DOWHULQJ WKH
LQWUDFHOOXODU FRQFHQWUDWLRQ RI LRQV WKH ELQGLQJ RI FDUGLDF JO\FRVLGHV 6RGLXPSRWDVVLXP
$73DVHGHWHUPLQHVWKHHQYLURQPHQWWKDWLVXQIDYRXUDEOHIRUYLUDOUHSOLFDWLRQVDQGLPSDLUHG
V\QWKHVLV RI YLUDO SURWHLQV E\ LQWHUIHULQJ ZLWK WKH KRVW WUDQVODWLRQDO PDFKLQHU\ 7KH FDUGLDF
JO\FRVLGHVFDQLQKLELWWKH&0(YLUXVDQGWKHUHLVUHGXFHGOHYHOVRIQXFOHDUIDFWRU.%KRXU
SRVW LQIHFWLRQ DQG GHFUHDVHG H[SUHVVLRQ RI LQWHUPHGLDWH HDUO\ YLUDO SURWHLQV ,( DQG ,(
,QIOXHQ]D YLUXV LV LPSDLUHG E\ WKH RXDELQ DW QDQRPRODU FRQFHQWUDWLRQ E\ LQKLELWLQJ WKH
WUDQVODWLRQRIYLUDOSURWHLQVWKURXJKDGHFUHDVHLQWKHFRQFHQWUDWLRQRILQWUDFHOOXODUSRWDVVLXP
65&VLJQDOLQJLVDOVRUHSRUWHGWREHLQYROYHGLQWKHLQKLELWLRQRIFRURQDYLUXVDQGYHVLFXODU
VWRPDWLV YLUXV LQIHFWLRQ DV WKH LQKLELWLRQ RI WKH YLUXV FDQ EH UHVFXHG E\ LQKLELWRUV RI 65&
&DUGLDF JO\FRVLGHV ZHUH VXSSRVHG WR DIIHFW WKH HQWU\ VWDJH RI YLUXV E\ LQWHUIHULQJ ZLWK WKH
HQGRF\WRVLV7KHRXDEDLQFDQLPSDLUYLUDOJHQRPLFUHSOLFDWLRQRUSURWHLQV\QWKHVLVVXJJHVWLQJ
WKDWWKLVGUXJWDUJHWVKRVWSURMHFWVWKDWLVHVVHQWLDOIRUYLUXVWRDFKLHYHDVXFFHVVIXOUHSOLFDWLRQ
F\FOH7KXVWKHKRPRQHDQGHUWKDOLVHQGRV\PELRWLFDUFKDHDVHFUHWH51$YLURLGVZKLFKJHWV
FRQYHUWHG WR '1$ YLURLGV E\ KXPDQ JHQRPLF +(59 WUDQVFULSWDVH 7KH DUFKDHDO VHFUHWHG
51$ DQG '1$ YLURLGV FDQ K\EULGL]H ZLWK WKH RWKHU SDUWV RI KXPDQ YLURELRPH DV ZHOO DV
KXPDQ JHQRPLF VHTXHQFHV SURGXFLQJ QHZ HPHUJLQJ FDWDVWURSKLF YLUXVHV 7KH KRPR
QHDQGHUWKDOLV ZLWK LWV HQGRV\PELRWLF DUFKDHD V\QWKHVL]HV GLJR[LQ E\ LVRSUHQRLG SDWKZD\
ZKLFKNHHSVWKHYLUDOSRSXODWLRQLQWKHFHOOLQFKHFN7KHKRPRQHDQGHUWKDOLVE\WKHDFWLRQRI
HQGRV\PELRWLF DUFKDHD FDQ KDYH DQ LQFUHDVLQJ SHUFHQWDJH RI VRPDWLF WR VWHP FHOO
WUDQVIRUPDWLRQ7KHKRPRQHDQGHUWKDOLFVWHPFHOOVDUHDUHVHUYRLUIRUWKHDUFKDHDOJHQHUDWHG
YLUXVHVDVWKHVWHPFHOOVDUHQRWDWWDFNHGE\WKHKRPRQHDQGHUWKDOLVLPPXQHFHOOV7KHKRPR
QHDQGHUWKDOLVDUHOLNHWKHXELTXLWRXVEDWZKLFKFDUULHVWKHYLUXVDQGVHUYHVDVDUHVHUYRLUEXW
LVQRWDIIHFWHGE\LW7KHKRPRQHDQGHUWKDOLVJRHVVWHSIXUWKHUZLWKLWVHQGRJHQRXVDUFKDHD
JHQHUDWLQJWKHYLUXVDQGVHUYLQJDVDUHVHUYRLUZLWKWKH1HDQGHUWKDOKRUPRQHGLJR[LQNHHSLQJ
WKHYLUDOSRSXODWLRQXQGHUFKHFN7KHKRPRQHDQGHUWKDOLVZLWKLWVHQGRV\PELRWLFDUFKDHDDQG
GLJR[LQ DUH VXVFHSWLEOH WR FLYLOL]DWLRQDO GLVHDVHV OLNH GLDEHWHV &$' VWURNH DXWRLPPXQH

GLVHDVHVFDQFHUDQGQHXURGHJHQHUDWLRQ7KHKRPRQHDQGHUWKDOLVGHYHORSVLQFUHDVHGFRORQLF
DQG HQGRV\PELRWLF DUFKDHDO JURZWK FRQVHTXHQW WR JOREDO ZDUPLQJ DQG WKH QHZO\ JURZQ
HQGRV\PELRWLF DUFKDHD LQ LWV WXUQ SURGXFHV PHWKDQH DQG 3$+ LQFUHDVLQJ JOREDO ZDUPLQJ D
ZLQZLQVLWXDWLRQOHDGLQJWRPRUHDUFKDHRJHQHVLVDQGHPHUJLQJYLUXVHV
7KH &URPDJQRQ KRPR VDSLHQV RQ WKH RWKHU KDQG DUH QRW D IHUWLOH JURXQG IRU
HQGRV\PELRWLF DUFKDHDO JURZWK DQG SUROLIHUDWLRQ 7KH\ JHW LQIHFWHG E\ VWUDQJH HPHUJLQJ
YLUXVHVWRZKLFKWKH\DUHQRWLPPXQHWRDQGJHWVVODXJKWHUHGDQGEHFRPHH[WLQFW7KH&UR
PDJQRQKRPRVDSLHQVLQKDELWVSDUWVRI$IULFD$VLDDQG(XURSHDQGWKH\DUHVXVFHSWLEOHWR
UHFXUUHQW LQIHFWLRQ RFFXUULQJ DV SDQGHPLFV 7KHVH SDQGHPLFV DUH FUHDWHG E\ WKH KRPR
QHDQGHUWKDOLF HOLWH WR NHHS WKH KRPR VDSLHQV SRSXODWLRQ LQ FKHFN 7KH KRPR QHDQGHUWKDOLV
KDYH D FKROHVWHURO GHSOHWHG VWDWH ZLWK ORZ VH[ KRUPRQHV DQG D DQGURJ\QRXV FXOWXUH 7KH
KRPR QHDQGHUWKDOLV H[LVW DV VPDOO JURXSV 7KH KRPR VDSLHQV RQ RWKHU KDQG KDV KLJK
FKROHVWHURO OHYHOV DQG LQFUHDVHG DPRXQW RI VH[ KRUPRQHV DQG D KLJKHU OHYHO RI SRSXODWLRQ
ZKLFKILOOVWKHHDUWKZKLFKQHHGVFXOOLQJWRFUHDWHDEDODQFH

&+$37(5
(1'26<0%,27,&$5&+$($/*(1(5$7('51$9,52,'6&$15(*8/$7(
&(//)81&7,21$1'&2175,%87(72',6($6(67$7(±52/(,19,5$/
63(&,$7,21
,QWURGXFWLRQ
(QGRP\RFDUGLDO ILEURVLV (0) DORQJ ZLWK WKH URRW ZLOW GLVHDVH RI FRFRQXW LV
HQGHPLFWR.HUDODZLWKLWVUDGLRDFWLYHDFWLQLGHEHDFKVDQGV$FWLQLGHVOLNHUXWLOHSURGXFLQJ
LQWUDFHOOXODU PDJQHVLXP GHILFLHQF\ GXH WR UXWLOHPDJQHVLXP H[FKDQJH VLWHV LQ WKH FHOO
PHPEUDQHKDVEHHQLPSOLFDWHGLQWKHHWLRORJ\RI(0)2UJDQLVPVOLNHSK\WRSODVPDVDQG
YLURLGVKDYHDOVREHHQGHPRQVWUDWHGWRSOD\DUROHLQWKHHWLRORJ\RIWKHVHGLVHDVHV51$
YLURLGV FRXOG FRQWULEXWH WR WKH SDWKRJHQHVLV RI VFKL]RSKUHQLD PDOLJQDQF\ PHWDEROLF
V\QGURPH[DXWRLPPXQHGLVHDVHDQGQHXURQDOGHJHQHUDWLRQ7KHSRVVLELOLW\RIJHQHUDWLRQRI
51$YLURLGVE\DFWLQLGHEDVHGSULPLWLYHRUJDQLVPOLNHDUFKDHDZLWKDPHYDORQDWHSDWKZD\
DQG FKROHVWHURO FDWDEROLVP ZDV FRQVLGHUHG $Q DFWLQLGH GHSHQGHQW VKDGRZ ELRVSKHUH RI
DUFKDHD DQG YLURLGV LQ WKH DERYH PHQWLRQHG GLVHDVH VWDWHV LV GHVFULEHG 7KH UROH RI 51$
YLURLGVJHQHUDWHGE\DFWLQLGLFDUFKDHDLQUHJXODWLRQRIERG\IXQFWLRQVDQGWKHSDWKRJHQHVLVRI
KXPDQGLVHDVHLVGLVFXVVHG

0DWHULDOVDQG0HWKRGV
HVWLPDWLRQVZHUHFDUULHGRXW&\WRFKURPH)IUHH51$DQGIUHH'1$&\WRFKURPH

QP7KHVWDWLVWLFDODQDO\VLVZDVGRQHE\$129$

5HVXOWV
7KHSDUDPHWHUVFKHFNHGDVLQGLFDWHGDERYHZHUHF\WRFKURPH)IUHH51$DQG
IUHH '1$ 3ODVPD RI FRQWURO VXEMHFWV VKRZHG LQFUHDVHG OHYHOV RI WKH DERYH PHQWLRQHG
FRPSDUHG WR FRQWUROV 7KH UHVXOWV DUH H[SUHVVHG LQ WDEOHV DV SHUFHQWDJH FKDQJH LQ WKH
SDUDPHWHUVDIWHUKRXULQFXEDWLRQDVFRPSDUHGWRWKHYDOXHVDW]HURWLPH
7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQF\WRFKURPH)
&<7)
&<7)
'HFUHDVHZLWK
'R[\&LSUR
0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'1$FKDQJH 51$FKDQJH
'1$FKDQJH 51$FKDQJH
*URXS ,QFUHDVHZLWK5XWLOH 'R[\&LSUR
,QFUHDVHZLWK5XWLOH
'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'LVFXVVLRQ
7KH DUFKDHD FDQ XQGHUJR PDJQHWLWH DQG FDOFLXP FDUERQDWH PLQHUDOL]DWLRQ DQG FDQ H[LVW DV
FDOFLILHGQDQRIRUPV
7KHYLURLGVDUHHYROXWLRQDULO\HVFDSHGDUFKDHDOJURXS,LQWURQVZKLFKKDYHUHWURWUDQVSRVLWLRQ
DQG VHOI VSOLFLQJ TXDOLWLHV $UFKDHD LQGXFHG LPPXQH DFWLYDWLRQ DQG UHGR[ VWUHVV FDQ
SURGXFH KLVWRQH GHDFHW\ODVH LQKLELWLRQ UHVXOWLQJ LQ HQGRJHQRXV UHWURYLUDO +(59 UHYHUVH
WUDQVFULSWDVH DQG LQWHJUDVH H[SUHVVLRQ 7KLV FDQ LQWHJUDWH WKH 51$ YLURLGDO FRPSOHPHQWDU\
'1$LQWRWKHQRQFRGLQJUHJLRQRIHXNDU\RWLFQRQFRGLQJ'1$XVLQJ+(59LQWHJUDVHDVKDV
EHHQ GHVFULEHG IRU ERUQD DQG HEROD YLUXVHV 7KH QRQFRGLQJ '1$ LV OHQJWKHQHG E\
LQWHJUDWLQJ51$YLURLGDOFRPSOHPHQWDU\'1$ZLWKWKHLQWHJUDWLRQJRLQJRQDVDFRQWLQXLQJ
HYHQW7KHDUFKDHDJHQRPHFDQDOVRJHWLQWHJUDWHGLQWRKXPDQJHQRPHXVLQJLQWHJUDVHDVKDV
EHHQGHVFULEHGIRUWU\SDQRVRPHV7KHLQWHJUDWHGYLURLGVDQGDUFKDHDFDQXQGHUJRYHUWLFDO

WUDQVPLVVLRQDQGFDQH[LVWDVJHQRPLFSDUDVLWHV7KLVLQFUHDVHVWKHOHQJWKDQGDOWHUVWKH
JUDPPDU RI WKH QRQFRGLQJ UHJLRQ SURGXFLQJ PHPHV RU PHPRU\ RI DFTXLUHG FKDUDFWHUV
7KH YLURLGDO FRPSOHPHQWDU\ '1$ FDQ IXQFWLRQ DV MXPSLQJ JHQHV SURGXFLQJ D G\QDPLF
JHQRPH LPSRUWDQW LQ VWRUDJH RI V\QDSWLF LQIRUPDWLRQ +/$ JHQH H[SUHVVLRQ DQG
GHYHORSPHQWDO JHQH H[SUHVVLRQ 7KH 51$ YLURLGV FDQ UHJXODWH P51$ IXQFWLRQ E\ 51$
LQWHUIHUHQFH7KHSKHQRPHQDRI51$LQWHUIHUHQFHFDQPRGXODWH7FHOODQG%FHOOIXQFWLRQ
LQVXOLQ VLJQDOLQJ OLSLG PHWDEROLVP FHOO JURZWK DQG GLIIHUHQWLDWLRQ DSRSWRVLV QHXURQDO
WUDQVPLVVLRQDQGHXFKURPDWLQKHWHURFKURPDWLQH[SUHVVLRQ
DQGHSVWHLQEDUUYLUXVE\UHFRPELQLQJZLWKDUFKDHDOHXNDU\RWLFDQGKXPDQJHQHVUHVXOWLQJLQ
YLUDOVSHFLDWLRQ7KH51$YLURLGVFDQDOVRUHFRPELQHZLWKHQGRJHQRXVFRPPHQVDO51$
DQG '1$ YLUXVHV SURGXFLQJ VSHFLDWLRQ 9LUDO VSHFLHV DUH LOO GHILQHG DQG IX]]\ ZLWK DOO RI
WKHP IRUPLQJ RQH FRPPRQ JHQHWLF SRRO ZLWK IUHTXHQW KRUL]RQWDO JHQH WUDQVIHU DQG
UHFRPELQDWLRQ7KXVWKHPXOWLDQGXQLFHOOXODUHXNDU\RWHZLWKLWVJHQHVVHUYHVWKHSXUSRVHRI
YLUDOVSHFLDWLRQ
7KH PXOWLFHOOXODU HXNDU\RWHV DUH OLNH DUFKDHDO ELRILOPV 7KH DUFKDHD ZLWK D
PHYDORQDWH SDWKZD\ XVHV WKH H[WUDFHOOXODU 51$ YLURLGV IRU TXRUXP VHQVLQJ DQG LQ WKH
JHQHUDWLRQ RI V\PELRWLF ELRILOP OLNH VWUXFWXUHV ZKLFK GHYHORS LQWR PXOWLFHOOXODU
HXNDU\RWHV7KHHQGRV\PELRWLFDUFKDHDDQGEDFWHULDZLWKPHYDORQDWHSDWKZD\VWLOOXVHV
WKH 51$ YLURLGV IRU WKH UHJXODWLRQ RI PXOWLFHOOXODU HXNDU\RWH 3ROOXWLRQ LV LQGXFHG E\ WKH
V\QWKHVLVDQGQDQRDUFKDHDOPHYDORQDWHSDWKZD\EDFWHULDOJURZWK5HGR[VWUHVVOHDGVRQWR

UHVXOWVLQDQHZQHXURQDOPHWDEROLFLPPXQHDQGWLVVXHSKHQRW\SHOHDGLQJWRKXPDQGLVHDVH
WKDODPRFRUWLFRWKDODPLF SDWKZD\ PHGLDWLQJ FRQVFLRXV SHUFHSWLRQ 10'$*$%$
UHFHSWRUV FDQ EH PRGXODWHG E\ YLURLG LQGXFHG 51$ LQWHUIHUHQFH 7KH GLSRODU YLURLGV
FRPELQHG ZLWK DFWLQLGHV LQ WKH VHWWLQJ RI GLJR[LQ LQGXFHG VRGLXP SRWDVVLXP $73DVH
LQKLELWLRQ FDQSURGXFH DSXPSHGSKRQRQ V\VWHP PHGLDWHG )URKOLFK PRGHO VXSHUFRQGXFWLQJ
VWDWH LQGXFLQJ TXDQWDO SHUFHSWLRQ ZLWK QDQRDUFKDHDO VHQVHG JUDYLW\ SURGXFLQJ WKH
RUFKHVWUDWHG UHGXFWLRQ RI WKH TXDQWDO SRVVLELOLWLHV WR WKH PDFURVFRSLF ZRUOG 7KH YLURLGV
FDQUHJXODWHOLPELFOREHWUDQVPLVVLRQE\51$YLURLGPHGLDWHG51$LQWHUIHUHQFHPRGXODWLQJ
QRUHSLQHSKULQH GRSDPLQH VHURWRQLQ DQG DFHW\O FKROLQH UHFHSWRUV 7KH KLJKHU GHJUHH RI
LQWHJUDWLRQRIWKHDUFKDHDDQGYLURLGVLQWRWKHJHQRPHSURGXFHVLQFUHDVHGGLJR[LQV\QWKHVLV
SURGXFLQJ ULJKW KHPLVSKHULF GRPLQDQFH DQG OHVVHU GHJUHH SURGXFLQJ OHIW KHPLVSKHULF
GRPLQDQFH 7KH YLURLG 51$ LQWHUIHUHQFH PHGLDWHG DOWHUHG PRQRDPLQH DQG 10'$
WUDQVPLVVLRQFRQWULEXWHVWRWKHSDWKRJHQHVLVRIVFKL]RSKUHQLDDQGDXWLVP$UFKDHDDQG51$
YLURLGFDQELQGWKH7/5UHFHSWRULQGXFH1).%SURGXFLQJLPPXQHDFWLYDWLRQDQGF\WRNLQH
71) DOSKD VHFUHWLRQ 7KH DUFKDHD DQG YLURLG LQGXFHG FKURQLF LPPXQH DFWLYDWLRQ DQG
JHQHUDWLRQ RI VXSHUDQWLJHQV FDQ OHDG RQ WR DXWRLPPXQH GLVHDVH $UFKDHD DQG YLURLGV FDQ
LQGXFHWKHKRVW$.73,.$03.+,)DOSKDDQG1).%SURGXFLQJWKH:DUEXUJPHWDEROLF
SKHQRW\SH7KHLQFUHDVHGJO\FRO\WLFKH[RNLQDVHDFWLYLW\GHFUHDVHLQEORRG$73OHDNDJHRI
F\WRFKURPH & LQFUHDVH LQ VHUXP S\UXYDWH DQG GHFUHDVH LQ DFHW\O &R$ LQGLFDWHV WKH
JHQHUDWLRQ RI WKH :DUEXUJ SKHQRW\SH 7KHUH LV LQGXFWLRQ RI JO\FRO\VLV LQKLELWLRQ RI 3'+
DFWLYLW\ DQG PLWRFKRQGULDO G\VIXQFWLRQ UHVXOWLQJ LQ LQHIILFLHQW HQHUJHWLFV DQG PHWDEROLF
V\QGURPH7KHDUFKDHDDQGYLURLGJHQHUDWHGF\WRNLQHVFDQOHDGWR71)DOSKDLQGXFHGLQVXOLQ
UHVLVWDQFH DQG PHWDEROLF V\QGURPH [ 7KH DFFXPXODWHG S\UXYDWH HQWHUV WKH *$%$ VKXQW
SDWKZD\ DQG LV FRQYHUWHG WR FLWUDWH ZKLFK LV DFWHG XSRQ E\ FLWUDWH O\DVH DQG FRQYHUWHG WR
DFHW\O&R$XVHGIRUFKROHVWHUROV\QWKHVLV7KHS\UXYDWHFDQEHFRQYHUWHGWRJOXWDPDWHDQG
DPPRQLDZKLFKLVR[LGLVHGE\DUFKDHDIRUHQHUJ\QHHGV7KHLQFUHDVHGFKROHVWHUROVXEVWUDWH

OHDGVWRLQFUHDVHGDUFKDHDOJURZWKDQGGLJR[LQV\QWKHVLVOHDGLQJWRPHWDEROLFFKDQQHOLQJWR
WKHPHYDORQDWHSDWKZD\7KHDUFKDHDDQGYLURLGLQGXFHGPRQRF\WHDFWLYDWLRQDQG:DUEXUJ
SKHQRW\SH LQGXFHG LQFUHDVHG FKROHVWHURO V\QWKHVLV OHDGV WR DWKHURJHQHVLV 9LURLG LQGXFHG
51$ LQWHUIHUHQFH FDQ PRGXODWH WKH P51$V FRQFHUQHG ZLWK LQVXOLQ UHFHSWRU IXQFWLRQ DQG
OLSLG PHWDEROLVP FRQWULEXWLQJ WR PHWDEROLF V\QGURPH [ 7KH :DUEXUJ SKHQRW\SH LQGXFHG
LQFUHDVHGPLWRFKRQGULDO37SRUHKH[RNLQDVHFDQOHDGRQWRPDOLJQDQWWUDQVIRUPDWLRQ9LURLG
LQGXFHG51$LQWHUIHUHQFHFDQPRGXODWHRQFRJHQHVSURGXFLQJPDOLJQDQWWUDQVIRUPDWLRQ7KH
YLURLGLQGXFHG51$LQWHUIHUHQFHFDQPRGXODWHWKHP51$FRQFHUQHGZLWKWKHGHDWKUHFHSWRU
SDWKZD\ SURGXFLQJ DSRSWRVLV DQG QHXURQDO GHJHQHUDWLRQ 7KH 51$ YLURLGV FDQ UHFRPELQH
ZLWK +(59 VHTXHQFHV DQG JHW HQFDSVXODWHG LQ PLFURYHVLFOHV FRQWULEXWLQJ WR WKH UHWURYLUDO
VWDWH7KHSULRQSURWHLQFRQIRUPDWLRQLVPRGXODWHGE\51$YLURLGELQGLQJSURGXFLQJSULRQ
GLVHDVH
7KXV WKH DFWLQLGLF DUFKDHD JHQHUDWHG 51$ YLURLGV FDQ UHJXODWH FHOO IXQFWLRQ DQG
SURGXFHQHXURLPPXQRJHQHWLFHQGRFULQHPHWDEROLFLQWHJUDWLRQ7KH51$YLURLGVDQGWKHLU
FRPSOHPHQWDU\ '1$ FDQ VHUYH WKH SXUSRVH RI YLUDO VSHFLDWLRQ 7KH 51$ YLURLGV DOVR
FRQWULEXWHV WR WKH SDWKRJHQHVLV RI VFKL]RSKUHQLD PDOLJQDQF\ PHWDEROLF V\QGURPH [
DXWRLPPXQHGLVHDVHDQGQHXURQDOGHJHQHUDWLRQ

5HIHUHQFHV
3ODQW'LVHDVH
3ODQW3DWKRORJ\
(XU-%LRFKHP

&KHP
9DQ1R6WUDQG
3XEOLVKHUV
3UHVV

86$
0LFURELRO

0RO%LRO5HY±
%0&%LRORJ\

(EHUO 0 +LQW] 0 5HLFKHQEHUJ $ .ROODV $ :LHVQHU - -RPDD +
0LFURELDOLVRSUHQRLGELRV\QWKHVLVDQGKXPDQȖį7FHOODFWLYDWLRQ)(%6/HWWHUV

:DOODFH '& 0LWRFKRQGULD DQG &DQFHU :DUEXUJ $GGUHVVHG &ROG 6SULQJ
+DUERU6\PSRVLDRQ4XDQWLWDWLYH%LRORJ\

&+$37(5
6<0%,26,6$1'(92/87,212)+80$163(&,(6+2026$3,(16$1'
+2021($1'(57+$/,6
*OREDOZDUPLQJHQGRV\PELRWLFDUFKDHDDQGJHQHUDWLRQRIQHZFHOOXODURUJDQHOOH
*OREDO ZDUPLQJ LQGXFHV HQGRV\PELRWLF DUFKDHDO DQG 51$ YLURLGDO JURZWK 7KH
SRUSK\ULQV IRUP D WHPSODWH IRU WKH IRUPDWLRQ RI 51$ YLURLGV '1$ YLURLGV SULRQV
LVRSUHQRLGVDQGSRO\VDFFKDULGHV7KH\FDQV\PELRVHWRJHWKHUWRIRUPSULPLWLYHDUFKDHD7KH
DUFKDHD FDQ IXUWKHU LQGXFH +,) DOSKD DOGRVH UHGXFWDVH DQG IUXFWRO\VLV UHVXOWLQJ LQ IXUWKHU
SRUSK\ULQRJHQHVLV DQG DUFKDHDO VHOI UHSOLFDWLRQ 7KH SULPLWLYH DUFKDHDO '1$ LV LQWHJUDWHG
DORQJ ZLWK 51$ YLURLGV ZKLFK DUH FRQYHUWHG WR WKHLU FRUUHVSRQGLQJ '1$ E\ WKH DFWLRQ RI
UHGR[VWUHVVLQGXFHG+(59UHYHUVHWUDQVFULSWDVHLQWRWKHKXPDQJHQRPHE\WKHUHGR[VWUHVV
LQGXFHG +(59 LQWHJUDVH 7KH DUFKDHDO '1$ VHTXHQFHV WKDW DUH LQWHJUDWHG LQWR WKH KXPDQ
JHQRPHIRUPVHQGRJHQRXVDUFKDHDOKXPDQJHQRPLFVHTXHQFHVDNLQWR+(59VHTXHQFHVDQG
FDQ IXQFWLRQ DV MXPSLQJ JHQHV UHJXODWLQJ JHQRPLF '1$ IOH[LELOLW\ 7KH LQWHJUDWHG
HQGRJHQRXV JHQRPLF DUFKDHDO VHTXHQFHV FDQ JHW H[SUHVVHG LQ WKH SUHVHQFH RI UHGR[ VWUHVV
IRUPLQJ HQGRV\PELRWLF DUFKDHDO SDUWLFOHV ZKLFK FDQ IXQFWLRQ DV D QHZ RUJDQHOOH FDOOHG WKH
DUFKDHDRQV 7KH DUFKDHDRQ FDQ H[SUHVV WKH IUXFWRO\WLF SDWKZD\ FRQVWLWXWLQJ DQ RUJDQHOOH
FDOOHG WKH IUXFWRVRPH FKROHVWHURO FDWDEROLF SDWKZD\ DQG GLJR[LQ V\QWKHWLF IRUPLQJ DQ
RUJDQHOOH FDOOHG WKH VWHURLGHOOH WKH VKLNLPLF DFLG SDWKZD\ IRUPLQJ DQ RUJDQHOOH FDOOHG WKH
QHXURWUDQVPLQRLG DQWLR[LGDQW YLWDPLQ ( DQG YLWDPLQ & V\QWKHWLF RUJDQHOOH FDOOHG WKH
YLWDPLQRF\WH DV ZHOO DV WKH JO\FRVDPLQRJO\FDQ V\QWKHWLF RUJDQHOOH FDOOHG
JO\FRVDPLQRJO\FRLG 7KH DUFKDHD FDQ VHFUHWH FDSVXODWHG 51$ YLURLGDO SDUWLFOHV ZKLFK FDQ
IXQFWLRQ DV EORFNLQJ 51$V PRGXODWLQJ FHOO PHWDEROLVP DQG VXFK DUFKDHDRQ RUJDQHOOH DUH
FDOOHG YLURLGHOOH 7KH DUFKDHD VXSSUHVVHV S\UXYDWH GHK\GURJHQDVH DQG SURPRWHV IUXFWRO\VLV
UHVXOWLQJ LQ DFFXPXODWLRQ RI S\UXYDWH ZKLFK HQWHUV WKH *$%$ VKXQW SDWKZD\ SURGXFLQJ
VXFFLQ\O&R$DQGJO\FLQHWKHVXEVWUDWHVIRUSRUSK\ULQV\QWKHVLV3RUSK\ULQIRUPVDWHPSODWH
IRUWKHIRUPDWLRQRI51$YLURLGV'1$YLURLGVSULRQVDQGLVRSUHQRLGVZKLFKFDQV\PELRVH
WRJHWKHUWRIRUPDQDUFKDHD7KXVHQGRV\PELRWLFDUFKDHDKDYHDQDELRJHQLFUHSOLFDWLRQ7KH
DUFKDHDRQ FRQFHUQHG ZLWK *$%$ VKXQW SDWKZD\ DQG SRUSK\ULQRJHQHVLV DUH FDOOHG
SRUSK\ULQRLGV 7KH DUFKDHDRQ FRORQ\ IRUPV D QHWZRUN ZLWK GLIIHUHQW DUHDV VKRZLQJ
GLIIHUHQWLDO VSHFLDOL]DWLRQ RI IXQFWLRQ IUXFWRVRLGV VWHURLGHOOH YLWDPLQRF\WH YLURLGHOOH
QHXURWUDQVPLQRLG SRUSK\ULQRLGV DQG JO\FRVDPLQRJO\FRLGV 7KLV IRUPV D OLYLQJ RUJDQL]HG
VWUXFWXUH ZLWKLQ KXPDQ FHOOV DQG WLVVXHV UHJXODWLQJ WKHLU IXQFWLRQ DQG UHGXFLQJ WKH KXPDQ

ERG\WR]RPELHZRUNLQJXQGHUWKHGLUHFWLRQVRIWKHRUJDQL]HGDUFKDHDOFRORQ\7KHRUJDQL]HG
DUFKDHDOFRORQ\KDVDELRJHQHWLFUHSOLFDWLRQDQGLVHWHUQDO

0RGXODWLRQRIHQGRV\PELRWLFDUFKDHDDQGLQGXFHGHYROXWLRQ
7KHHQGRV\PELRWLFDFWLQLGLFDUFKDHDIRUPVWKHEDVLVRIOLIHDQGFDQEHFRQVLGHUHGDV
WKHWKLUGHOHPHQWLQWKHFHOO,WUHJXODWHVWKHFHOOWKHQHXURLPPXQHHQGRFULQHV\VWHPDQGWKH
FRQVFLRXVXQFRQVFLRXVEUDLQ7KHHQGRV\PELRWLFDFWLQLGLFDUFKDHDFDQEHFDOOHGDVWKHHOL[LU
RIOLIH$GHILQLWHSRSXODWLRQRIHQGRV\PELRWLFDFWLQLGLFDUFKDHDLVUHTXLUHGIRUWKHH[LVWHQFH
DQGVXUYLYDORIOLIH$KLJKHUGHQVLW\RIHQGRV\PELRWLFDFWLQLGLFDUFKDHDOSRSXODWLRQFDQOHDG
WRKXPDQGLVHDVH7KXVDFWLQLGLFDUFKDHDDUHLPSRUWDQWIRUVXUYLYDORIKXPDQOLIHDQGFDQEH
FRQVLGHUHGDVFUXFLDOWRLW6\PELRVLVE\DFWLQLGLFDUFKDHDLVWKHEDVLVRIHYROXWLRQRIKXPDQV
DQG SULPDWHV 7KH LQFUHDVH LQ HQGRV\PELRWLF DUFKDHDO JURZWK FDQ OHDG WR WKH LQGXFWLRQ RI
KRPR QHDQGHUWKDOLV 7KLV HQGRV\PELRWLF DUFKDHD LQGXFHG QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV
OHDGV WR KXPDQ GLVHDVH OLNH PHWDEROLF V\QGURPH ; QHXURGHJHQHUDWLRQV VFKL]RSKUHQLD DQG
DXWLVPDXWRLPPXQHGLVHDVHDQGFDQFHU7KHUHGXFWLRQLQHQGRV\PELRWLFDUFKDHDOJURZWKE\
D KLJK ILEUH KLJK PHGLXP FKDLQ WULJO\FHULGH DQG OHJXPH SURWHLQ NHWRJHQLF GLHW DQWLELRWLFV
IURP KLJKHU SODQWV OLNH &XUFXPD ORQJD (PEOLFD RIILFLDQDOLV $OOLXP VDWLYXP :LWKDQLD
VRPQLIHUD 0RULQJD SWHU\JRVSHUPD DQG =LQJHEHU RIILFLDQDOLV DQG WUDQVSODQWDWLRQ RI FRORQLF
PLFURIORUDIURPQRUPDOKRPRVDSLHQSRSXODWLRQFDQOHDGWRGHQHDQGHUWKDOLVDWLRQRIVSHFLHV
DQG WUHDWPHQW RI WKH DERYH PHQWLRQHG GLVHDVHG VWDWHV 7KH FRORQLF PLFURIORUD RI
QHDQGHUWKDOLVHG GLVHDVHG VWDWHV OLNH PHWDEROLF V\QGURPH ; QHXURGHJHQHUDWLRQV
VFKL]RSKUHQLD DQG DXWLVP DXWRLPPXQH GLVHDVH DQG FDQFHU ZKHQ WUDQVIHUUHG WR WKH QRUPDO
KRPRVDSLHQVSHFLHVOHDGVWRJHQHUDWLRQDQGLQGXFWLRQRIKRPRQHDQGHUWKDOLV7KXVSULPDWH
DQG KXPDQ HYROXWLRQ LV V\PELRWLF HYHQW ZKLFK FDQ EH LQGXFHG WKH PRGXODWLQJ V\PELRWLF
DUFKDHDOJURZWK+XPDQSRSXODWLRQVFDQEHGLYLGHGLQWRPDWULOLQHDO1HDQGHUWKDOSRSXODWLRQ
LQ 6RXWK ,QGLDQ 'UDYLGLDQV &HOWV %DVTXHV -HZV DQG %HUEHUV DQG WKH &UR0DJQRQ
SRSXODWLRQ VHHQ LQ $IULFD DQG (XURSH 7KH V\PELRWLF DUFKDHDO FRORQL]DWLRQ GHFLGHV ZKLFK
VSHFLHV ± 1HDQGHUWKDO RU &UR0DJQRQ WR ZKLFK WKH VRFLHW\ EHORQJV WR ,W LV WHPSWLQJ WR
SRVWXODWHV\PELRWLFPLFURIORUDDQGDUFKDHDGHWHUPLQLQJWKHIDPLO\EHKDYLRUDQGWUDLWVDVZHOO
DV VRFLHWDO DQG FDVWH EHKDYLRU DQG WUDLWV 7KH FHOO KDV EHHQ SRVWXODWHG E\ 0DUJXOLV WR EH D
V\PELRWLFDVVRFLDWLRQRIEDFWHULDDQGYLUXVHV6LPLODUO\WKHIDPLO\WKHFDVWHWKHFRPPXQLW\
QDWLRQDOLWLHV DQG WKH VSHFLHV LWVHOI LV GHWHUPLQHG E\ DUFKDHDO DQG RWKHU EDFWHULDO V\PELRVLV
7KHDUFKDHDOV\PELRVLVOHDGVWRWKHHYROXWLRQRIDQHZKXPDQ1HRQHDQGHUWKDOVSHFLHV7KLV
FDQEHFDOOHGDVWKH1HRQHDQGHUWKDODJHRU.DOL\XJD

6\PELRVLVDQGHYROXWLRQRIVSHFLHV
+DUDSSDQ'UDYLGLDQVRFLHWLHVDQGWKHSDWULDUFKDO$U\DQVRFLHW\7KHPDWULOLQHDO+DUDSSDQ
PHWDEROLF V\QGURPH ; QHXURGHJHQHUDWLRQ FDQFHU DXWLVP DQG VFKL]RSKUHQLD 7KH
1HDQGHUWKDO JXW IORUD DQG HQGRV\PELRWLF DUFKDHD ZDV GHWHUPLQHG E\ WKH QRQ YHJHWDULDQ


KXPDQDQGDQLPDOHYROXWLRQ7KHFRORQLFDQGHQGRV\PELRWLFDUFKDHDDQGRWKHUPLFUREHVOLNH
FORVWULGLDOFOXVWHUVGHWHUPLQHWKHVSHFLHVUDFHFDVWHFRPPXQLW\DQGSHUVRQDOLGHQWLW\RIWKH
LQGLYLGXDO 7KH LGHQWLW\ RI WKH LQGLYLGXDO SHUVRQDO FRPPXQLW\ FDVWH UDFH QDWLRQDOLW\ DQG
VSHFLHV LV GHWHUPLQHG E\ WKH FRORQLF DQG HQGRV\PELRWLF DUFKDHDO DQG FORVWULGLDO FOXVWHUV
3UHGRPLQDQW DUFKDHDO V\PELRVLV SURGXFHV KRPR QHDQGHUWKDOLV DQG OHVV SURPLQHQW DUFKDHDO
V\PELRVLVDQGGRPLQDQWFORVWULGLDOFOXVWHUVLQWKHJXWSURGXFHVWKHKRPRVDSLHQVSHFLHV(DFK
LQGLYLGXDOUDFHQDWLRQDOLW\FDVWHFUHHGDQGFRPPXQLW\KDVWKHHQGRV\PELRWLFDQGFRORQLF
PLFURELRWDVLJQDWXUH7KLVFRORQLFDQGHQGRV\PELRWLFPLFURELRWDVLJQDWXUHLVWUDQVIHUDEOHE\
WKH FKDQJH RI HQGRV\PELRWLF DQG FRORQLF PLFURELRWD IURP RQH JURXS WR DQRWKHU 7KXV WKH
HYROXWLRQ DQG LGHQWLW\ EDVHG RQ LQGLYLGXDOLW\ UDFH QDWLRQDOLW\ FDVWH DQG FUHHG FDQ EH
LQGXFHG

51$YLURLGDOTXDVLVSHFLHVFRQVRUWLDDQGJURXSLGHQWLW\

LGHQWLW\VLQFHLGHQWLFDOEXWXQFRORQL]HGKRVWSRSXODWLRQUHPDLQVVXVFHSWLEOHWRDNLOOLQJDFWLRQ
IRUDGGLFWLRQSHUVLVWHQFHSURWHFWLRQ DQG O\WLFNLOOLQJ 9LURLGV FDQ IXQFWLRQ DV FRQVRUWLD DQ
UHTXLUHG IRU DQWLYLUDO GHIHQFH 7KH RSSRVLQJ IXQFWLRQV DUH WKH EDVLV RI DGGLFWLRQ PRGXOHV
EHJLQQLQJ RI VHOIQRQVHOI GLIIHUHQWLDWLQJ FDSDELOLW\ ,Q WKLV ZD\ YLURLGV SURPRWH WKH

HPHUJHQFH RI FRPPRQO\ VKDUHG FRGH XVH JURXSPHPEHUVKLSDQGFROOHFWLYHOLYLQJIXQFWLRQ

JRHVRIIDQGWKHLFHDJHHQGVWKHDUFKDHDOSRSXODWLRQGHQVLW\DOVRFRPHVGRZQ7KLVDOVRFDQ
FRPSOH[ V\QDSWLF FRQQHFWLYLW\ LQ WKH KRPR VDSLHQV 7KLV OHDGV RQ WR D ORJLFDO
QDWLRQDO VH[XDO PHWDEROLF SKHQRW\SLF LPPXQH QHXURQDO SV\FKLDWULF SV\FKRORJLFDO
JHQRW\SLFDQGLQGLYLGXDOLGHQWLW\7KHDUFKDHDVHFUHWHVWKHWUHSKRQHGLJR[LQZKLFKFDQHGLW
WKH51$YLURLGVDQGJHQHUDWHQHZVHTXHQFHV$UFKDHDOGLSRODUPDJQHWLWHDQGSRUSK\ULQVLQ
WKHVHWWLQJRIGLJR[LQLQGXFHGPHPEUDQHVRGLXPSRWDVVLXP$73DVHLQKLELWLRQFDQSURGXFHD
SXPSHGSKRQRQV\VWHPPHGLDWHGTXDQWDOSHUFHSWLYHVWDWHDQGTXDQWDOFRPPXQLFDWLRQLQWKH
51$ YLURLGDO V\PELRWLF V\VWHP JHQHUDWLQJ QHZ VHTXHQFHV E\ VWHURLGDO GLJR[LQ HQ]\PDWLF

'LHWDU\PRGXODWLRQRIKXPDQVSHFLHVHYROXWLRQE\V\PELRVLV
LOOQHVVDQGDXWRLPPXQHGLVHDVH$KLJKILEUHGLHWRIXSWRJGD\FDQEHFDOOHGDVDJXWGLHW
7KH FRORQLF PLFURIORUD HVSHFLDOO\ WKH FORVWULGLDO FOXVWHU GLJHVWV WKH ILEUH JHQHUDWLQJ VKRUW

GRQ¶W KRVW WKH JXW PLFURELRWD EXW WKH JXW PLFURELRWD KRVW XV 7KH KXPDQ V\VWHP IRUPV DQ

+XPDQEUDLQDVDQHQGRV\PELRWLFDUFKDHDOFRORQ\QHWZRUN


*OREDO ZDUPLQJ QHDQGHUWKDOLVDWLRQ DQG IUXFWRVH PHWDEROLVP WKH HSLGHPLF IUXFWRVH
GLVHDVH
7KHLQFUHDVHLQHQGRJHQRXV('/)DSRWHQWLQKLELWRURIPHPEUDQH1D. $73DVH
FDQGHFUHDVHWKLVHQ]\PHDFWLYLW\7KHUHVXOWVVKRZHGLQFUHDVHGHQGRJHQRXV('/)V\QWKHVLV
DVHYLGHQFHGE\LQFUHDVHG+0*&R$UHGXFWDVHDFWLYLW\ZKLFKIXQFWLRQVDVWKHUDWHOLPLWLQJ
VWHS RI WKH LVRSUHQRLG SDWKZD\ 6WXGLHV LQ RXU ODERUDWRU\ KDYH GHPRQVWUDWHG WKDW ('/) LV
V\QWKHVL]HGE\WKHLVRSUHQRLGSDWKZD\7KHHQGRV\PELRWLFDUFKDHDOVHTXHQFHVLQWKHKXPDQ
JHQRPHJHWH[SUHVVHGE\UHGR[VWUHVVDQGRVPRWLFVWUHVVRIJOREDOZDUPLQJ7KLVUHVXOWVLQ
LQGXFWLRQ RI +,) DOSKD ZKLFK ZLOO XSUHJXODWH IUXFWRO\VLV DQG JO\FRO\VLV ,Q WKH VHWWLQJ RI
UHGR[ VWUHVV DOO JOXFRVH JHWV FRQYHUWHG WR IUXFWRVH E\ WKH LQGXFWLRQ RI HQ]\PHV DOGRVH
UHGXFWDVH DQG VRUELWRO GHK\GURJHQDVH $OGRVH UHGXFWDVH FRQYHUWV JOXFRVH WR VRUELWRO DQG
VRUELWRO GHK\GURJHQDVH FRQYHUWV VRUELWRO WR IUXFWRVH 6LQFH IUXFWRVH LV SUHIHUHQWLDOO\
SKRVSKRU\ODWHGE\NHWRKH[RNLQDVHVWKHFHOOLVGHSOHWHGRI$73DQGJOXFRVHSKRVSKRU\ODWLRQ
FRPHV WR D KDOW )UXFWRVH EHFRPHV WKH GRPLQDQW VXJDU WKDW LV PHWDEROL]HG E\ IUXFWRO\VLV LQ
H[SUHVVHG DUFKDHDO SDUWLFOHV LQ WKH FHOO IXQFWLRQLQJ DV RUJDQHOOH FDOOHG IUXFWRVRLGV 7KH
IUXFWRVHLVSKRVSKRU\ODWHGWRIUXFWRVHSKRVSKDWHZKLFKLVDFWHGXSRQE\DOGRODVH%ZKLFK
FRQYHUWV LW LQWR JO\FHUDOGHK\GH SKRVSKDWH DQG GLK\GUR[\ DFHWRQH SKRVSKDWH

*O\FHUDOGHK\GH SKRVSKDWH LV FRQYHUWHG WR ' ELSKRVSKRJO\FHUDWH ZKLFK LV WKHQ
FRQYHUWHG WR SKRVSKRJO\FHUDWH 7KH SKRVSKRJO\FHUDWH LV FRQYHUWHG WR
SKRVSKRJO\FHUDWHSKRVSKRJO\FHUDWHLVFRQYHUWHGWRSKRVSKRHQROS\UXYDWHE\WKHHQ]\PH
HQRODVH3KRVSKRHQROS\UXYDWHLVFRQYHUWHGWRS\UXYDWHE\WKHHQ]\PHS\UXYLFNLQDVH7KH
DUFKDHDRQ LQGXFHV +,) DOSKD ZKLFK XSUHJXODWHV IUXFWRO\VLV DQG JO\FRO\VLV EXW LQKLELWV
S\UXYDWH GHK\GURJHQDVH 7KH IRUZDUG PHWDEROLVP RI S\UXYDWH LV VWRSSHG 7KH
GHSKRVSKRU\ODWLRQ RI SKRVSKRHQRO S\UXYDWH LV LQKLELWHG LQ WKH VHWWLQJ RI S\UXYLF NLQDVH
LQKLELWLRQ 3KRVSKRHQRO S\UXYDWH HQWHUV WKH VKLNLPLF DFLG SDWKZD\ ZKHUH LW LV FRQYHUWHG WR
FKRULVPDWH 7KH VKLNLPLF DFLG LV V\QWKHVL]HG E\ D SDWKZD\ VWDUWLQJ IURP JO\FHUDOGHK\GH
SKRVSKDWH *O\FHUDOGHK\GH SKRVSKDWH FRPELQHV ZLWK WKH SHQWRVH SKRVSKDWH SDWKZD\
PHWDEROLWH VHGRKHSWXORVH SKRVSKDWH ZKLFK LV FRQYHUWHG WR HU\WKURVH SKRVSKDWH 7KH
SHQWRVH SKRVSKDWH SDWKZD\ LV XSUHJXODWHG LQ WKH SUHVHQFH RI WKH VXSSUHVVLRQ RI JO\FRO\WLF
SDWKZD\ (U\WKURVH SKRVSKDWH FRPELQHV ZLWK SKRVSKRHQRO S\UXYDWH WR JHQHUDWH VKLNLPLF
DFLG 6KLNLPLF DFLG FRPELQHV ZLWK DQRWKHU PROHFXOH RI SKRVSKRHQRO S\UXYDWH WR JHQHUDWH
FKRULVPDWH 7KH FKRULVPDWH LV FRQYHUWHG WR SUHSKHQLF DFLG DQG WKHQ WR SDUDK\GUR[\ SKHQ\O
S\UXYLF DFLG 3DUDK\GUR[\ SKHQ\O S\UXYLF DFLG LV FRQYHUWHG WR W\URVLQH DQG WU\SWRSKDQ DV
ZHOODVQHXURDFWLYHDONDORLGV7KHVKLNLPLFDFLGSDWKZD\LVVWUXFWXUHGLQH[SUHVVHGDUFKDHDRQ
RUJDQHOOH FDOOHG WKH QHXURWUDQVPLQRLG 7KH IUXFWRO\WLF LQWHUPHGLDWHV JO\FHUDOGHK\GH
SKRVSKDWHDQGS\UXYDWHDUHWKHVWDUWLQJSRLQWVRIWKH';3SDWKZD\RIFKROHVWHUROV\QWKHVLV
*O\FHUDOGHK\GHSKRVSKDWHFRPELQHVZLWKS\UXYDWHWRIRUPGHR[\'[\OXORVHSKRVSKDWH
'2;3ZKLFKLVWKHQFRQYHUWHGWR&PHWK\OHU\WKULWROSKRVSKDWH&PHWK\OHU\WKULWRO
SKRVSKDWHFDQEHV\QWKHVL]HGIURPHU\WKURVHSKRVSKDWHDPHWDEROLWHRIWKHVKLNLPLFDFLG
SDWKZD\';3FRPELQHVZLWK0(3WRIRUPLVRSHQWHQ\OS\URSKRVSKDWHZKLFKLVFRQYHUWHGWR
FKROHVWHURO&KROHVWHUROLVFDWDEROL]HGE\DUFKDHDOFKROHVWHUROR[LGDVHVWRJHQHUDWHGLJR[LQ
7KH GLJR[LQ VXJDUV GLJLWR[RVH DQG UKDPQRVH DUH V\QWKHVL]HG E\ WKH XSUHJXODWHG SHQWRVH
SKRVSKDWH SDWKZD\ *O\FRO\WLF VXSSUHVVLRQ OHDGV WR XSUHJXODWLRQ RI WKH SHQWRVH SKRVSKDWH
SDWKZD\ 7KH H[SUHVVHG DUFKDHDRQ RUJDQHOOH FRQFHUQHG ZLWK FKROHVWHURO FDWDEROLVP DQG
GLJR[LQ V\QWKHVLV LV FDOOHG WKH VWHURLGHOOH 7KH VXSSUHVVLRQ RI JO\FRO\VLV DQG VWLPXODWLRQ RI
IUXFWRO\VLV UHVXOWV LQ XSUHJXODWLRQ RI WKH KH[RVDPLQH SDWKZD\ )UXFWRVH LV FRQYHUWHG WR
IUXFWRVH SKRVSKDWH E\ NHWRKH[RNLQDVHV 7KH IUXFWRVH SKRVSKDWH LV FRQYHUWHG WR
JOXFRVDPLQH SKRVSKDWH E\ WKH DFWLRQ RI JOXWDPLQH IUXFWRVH SKRVSKDWH DPLGRWUDQVIHUDVH
*)$7*OXFRVDPLQHSKRVSKDWHLVFRQYHUWHGWR8'31DFHW\OJOXFRVDPLQHZKLFKLVWKHQ
FRQYHUWHG WR 1DFHW\O JOXFRVDPLQH DQG YDULRXV DPLQR VXJDUV 8'3 JOXFRVH LV FRQYHUWHG WR
8'3'JOXFXURQLFDFLG8'3'JOXFXURQLFDFLGLVFRQYHUWHGWRJOXFXURQLFDFLG7KLVIRUPV

WKH XURQLF DFLG V\QWKHWLF SDWKZD\ 8URQLF DFLGV DQG KH[RVDPLQHV IRUP UHSHDWLQJ XQLWV RI
JO\FRVDPLQRJO\FDQV ,Q WKH VHWWLQJ RI JO\FRO\WLF VXSSUHVVLRQ DQG IUXFWRO\WLF PHWDEROLVP
IUXFWRO\VLV OHDGV WR LQFUHDVH V\QWKHVLV RI KH[RVDPLQHV DQG *$* V\QWKHVLV 7KH *$*
V\QWKHVL]LQJ DUFKDHDRQ SDUWLFOHV DUH FDOOHG WKH JO\FRVDPLQRJO\FRLGV 7KH H[SUHVVHG
DUFKDHDRQ SDUWLFOHV DUH FDSDEOH RI V\QWKHVL]LQJ DQWLR[LGDQW YLWDPLQ & DQG ( 7KH 8'3 '
JOXFRVHLVFRQYHUWHGWR8'3'JOXFXURQLFDFLG8'3'JOXFXURQLFDFLGLVFRQYHUWHGWR'
JOXFXURQLF DFLG 'JOXFXURQLF DFLG LV FRQYHUWHG WR /JXORQDWH E\ HQ]\PH DOGRNHWR
UHGXFWDVHV /JXORQDWH LV FRQYHUWHG WR /JXORQRODFWRQH E\ ODFWRQDVH /JXORQRODFWRQH LV
FRQYHUWHG WR DVFRUELF DFLG E\ WKH DFWLRQ RI DUFKDHDO /JXOR R[LGDVH 7KH YLWDPLQ ( LV
V\QWKHVL]HG IURP VKLNLPDWH ZKLFK LV FRQYHUWHG WR W\URVLQH DQG WKHQ WR SDUDK\GUR[\ SKHQ\O
S\UXYLFDFLG3DUDK\GUR[\SKHQ\OS\UXYLFDFLGLVFRQYHUWHGWRKRPRJHQWLVDWH+RPRJHQWLVDWH
LV FRQYHUWHG WR PHWK\O SK\W\O EHQ]RTXLQRQH ZKLFK LV FRQYHUWHG WR DOSKD WRFRSKHURO
PHWK\OSK\W\OEHQ]RTXLQRQHLVFRQYHUWHGWRPHWK\OSK\W\OEHQ]RTXLQRQHDQGJDPPD
WRFRSKHURO 9LWDPLQ ( FDQ DOVR EH V\QWKHVL]HG E\ WKH ';3 SDWKZD\ *O\FHUDOGHK\GH
SKRVSKDWH DQG S\UXYDWH FRPELQHG WR IRUP GHR[\ '[\OXORVH SKRVSKDWH ZKLFK LV
FRQYHUWHG WR LVRSHQWHQ\O S\URSKRVSKDWH LVRSHQWHQ\O S\URSKRVSKDWH DQG GLPHWK\O DOO\O
S\URSKRVSKDWH FRPELQHG WR IRUP PHWK\O SK\W\O EHQ]RTXLQRQH ZKLFK LV FRQYHUWHG WR
WRFRSKHUROV 7KH XELTXLQRQH DQRWKHU LPSRUWDQW PHPEUDQH DQWLR[LGDQW DQG SDUW RI WKH
PLWRFKRQGULDOHOHFWURQWUDQVSRUWFKDLQLVV\QWKHVL]HGE\WKHVKLNLPLFDFLGSDWKZD\DQG';3
SDWKZD\7KHLVRSUHQRLGPRLHW\RIXELTXLQRQHLVFRQWULEXWHGIURPWKH';3SDWKZD\DQGWKH
UHVWRILWE\W\URVLQHFDWDEROLVP7KHW\URVLQHLVJHQHUDWHGE\WKHVKLNLPLFDFLGSDWKZD\7KH
DUFKDHDRQ SDUWLFOHV FRQFHUQHG ZLWK WKH V\QWKHVLV RI YLWDPLQ & YLWDPLQ ( DQG XELTXLQRQH
ZKLFKDUHDOODQWLR[LGDQWVDUHFDOOHGWKHYLWDPLQRF\WH
HQGRV\PELRWLF DUFKDHD DQG WKH JHQHUDWHG 51$ YLURLGV LQGXFH DOGRVH UHGXFWDVH ZKLFK
FRQYHUWVJOXFRVHWRVRUELWRO7KHDUFKDHDOSRO\VDFFKDULGHVDQGOLSRSRO\VDFFKDULGHVDVZHOODV
YLURLGV DQG YLUXVHV FDQ LQGXFH DOGRVH UHGXFWDVH 6RUELWRO LV DFWHG XSRQ E\ VRUELWRO
GHK\GURJHQDVH WR JHQHUDWH IUXFWRVH ZKLFK HQWHUV IUXFWRO\WLF SDWKZD\ $OGRVH UHGXFWDVH LV
DOVRLQGXFHGE\WKHRVPRWLFVWUHVVRIJOREDOZDUPLQJDQGUHGR[VWUHVV$OGRVHUHGXFWDVHLV
LQGXFHGE\LQIODPPDWRU\DQGLPPXQHVWLPXODWLRQ$UFKDHDOV\QWKHVL]HGHQGRJHQRXVGLJR[LQ
FDQSURGXFHLQWUDFHOOXODUUHGR[VWUHVVDQGDFWLYDWH1).%ZKLFKSURGXFHVLPPXQHDFWLYDWLRQ
%RWK UHGR[ VWUHVV DQG LPPXQH DFWLYDWLRQ FDQ DFWLYDWH DOGRVH UHGXFWDVH ZKLFK FRQYHUWV
JOXFRVH WR IUXFWRVH +\SR[LF VWUHVV RU DQDHURELF FRQGLWLRQV LQGXFHV +,) DOSKD ZKLFK

DFWLYDWHV NHWRKH[RNLQDVH & ZKLFK SKRVSKRU\ODWHV IUXFWRVH )UXFWRVH LV DFWHG XSRQ E\
IUXFWRNLQDVH ZKLFK FRQYHUWV IUXFWRVH WR IUXFWRVH SKRVSKDWH )UXFWRVH SKRVSKDWH LV
FRQYHUWHG WR GLK\GUR[\ DFHWRQH SKRVSKDWH DQG JO\FHUDOGHK\GH SKRVSKDWH ZKLFK LV
FRQYHUWHG WR S\UXYDWH DFHW\O &R$ DQG FLWUDWH &LWUDWH LV XVHG IRU OLSLG V\QWKHVLV )DW
GHSRVLWLRQ RFFXUV LQ WKH YLVFHUDO RUJDQV OLNH WKH OLYHU KHDUW DQG NLGQH\ 7KHUH LV QR
VXEFXWDQHRXV IDW GHSRVLW )UXFWRVH PHWDEROLVP E\SDVVHV SKRVSKRIUXFWRNLQDVH ZKLFK LV
LQKLELWHG E\ FLWUDWH DQG $73 )UXFWRVH PHWDEROLVP LV WKHUHIRUH QRW XQGHU WKH UHJXODWRU\
FRQWURO RI WKH HQ]\PH SKRVSKRIUXFWRNLQDVH )UXFWRVH WUDQVSRUW DQG PHWDEROLVP LV QRW
UHJXODWHGE\LQVXOLQ)UXFWRVHLVWUDQVSRUWHGE\*/87UHFHSWRU)UXFWRVHGRHVQRWLQFUHDVH
LQVXOLQ VHFUHWLRQ DQG WKHUHIRUH GRHV QRW DFWLYDWH OLSRSURWHLQ OLSDVH 7KLV UHVXOWV LQ YLVFHUDO
DGLSRJHQHLV )UXFWRVH LQGXFHV &K5(%3 DQG 65(%3 HOHPHQWV 7KLV UHVXOWV LQ LQFUHDVHG
KHSDWLF OLSRJHQHVLV E\ WKH LQGXFWLRQ RI WKH HQ]\PH IDWW\ DFLG V\QWKDVH DFHW\O &R$
FDUER[\ODVHDQGVWHDUR\O&R$GHVDWXUDFH7KLVLQFUHDVHVIDWW\DFLGVDQGFKROHVWHUROV\QWKHVLV
)UXFWRVHLVDOLSRSKLOLFFDUERK\GUDWH)UXFWRVHFDQEHFRQYHUWHGWRJO\FHUROSKRVSKDWHDQG
IDWW\ DFLGV LQYROYHG LQ WULJO\FHULGH V\QWKHVLV )UXFWRVH DGPLQLVWUDWLRQ OHDGV WR LQFUHDVH LQ
WULJO\FHULGHVDQG9/'/)UXFWRVHFRQVXPSWLRQOHDGVWRLQVXOLQUHVLVWDQFHIDWDFFXPXODWLRQ
LQYLVFHUDORUJDQVOLNHOLYHUKHDUWDQGNLGQH\LQVXOLQUHVLVWDQFHG\VOLSLGHPLDZLWKLQFUHDVHG
WULJO\FHULGHV9/'/DQG/'/DVZHOODVWKHPHWDEROLFV\QGURPH7KHPHWDEROLFV\QGURPH;
FDQEHFRQVLGHUHGDVDIUXFWRO\WLFV\QGURPH)UXFWRVHZLOOLQFUHDVHOLSLGVWRUDJHDQGSURPRWH
LQVXOLQUHVLVWDQFH)UXFWRVHFDQIUXFWRV\ODWHSURWHLQVSURGXFLQJG\VIXQFWLRQ)UXFWRVHKDVQR
HIIHFW XSRQ JKUHOLQ DQG OHSWLQ LQ WKH EUDLQ DQG FDQ OHDG WR LQFUHDVHG IHHGLQJ EHKDYLRXU
*OXFRVHGHFUHDVHVJKUHOLQDQGLQFUHDVHVOHSWLQOHYHOV7KLVOHDGVWRVXSSUHVVLRQRIDSSHWLWH
7KXVIUXFWRVHFDQPRGXODWHHDWLQJEHKDYLRXUOHDGLQJRQWRREHVLW\)UXFWRVHUHVXOWVLQ1).%
DFWLYDWLRQDQG71)DOSKDVHFUHWLRQ71)DOSKDFDQPRGXODWHWKHLQVXOLQUHFHSWRUSURGXFLQJ
LQVXOLQUHVLVWDQFHDQGPHWDEROLFV\QGURPH;)UXFWRVHFDQDOVROHDGWROHSWLQUHVLVWDQFHDQG
REHVLW\7KHUHLVDQHSLGHPLFRIPHWDEROLFV\QGURPH;LQUHODWLRQWRJOREDOZDUPLQJ
)UXFWRVHFDQDFWLYDWHWKHV\PSDWKHWLFQHUYRXVV\VWHP7KLVOHDGVWRK\SHUWHQVLRQDQG
LQFUHDVH LQ KHDUW UDWH )UXFWRVH LV LQYROYHG LQ OHIW YHQWULFXODU K\SHUWURSK\ LQFUHDVH LQ OHIW
YHQWULFXODU PDVV DQG GHFUHDVH LQ OHIW YHQWULFXODU HMHFWLRQ IUDFWLRQ LQ K\SHUWHQVLRQ )UXFWRVH
VXSSUHVVHV WKH SDUDV\PSDWKHWLF QHUYRXV V\VWHP )UXFWRVH DFWV DV D NH\ LQGXFHU IRU
XQFRQWUROOHG SUROLIHUDWLRQ DQG K\SHUWURSK\ RI WKH FDUGLDF PXVFXODWXUH FRQVHTXHQW WR
K\SHUWHQVLRQ7KHKHDUWXVHVEHWDR[LGDWLRQRIIDWW\DFLGVWRJHQHUDWHHQHUJ\,QWKHVHWWLQJRI
DQHURELFJO\FRO\VLVFRQVHTXHQWWRP\RFDUGLDOLQIDUFWLRQDQGK\SHUWHQVLYHK\SHUWURSK\RIWKH

KHDUW WKHUH LV LQGXFWLRQ RI +,) DOSKD 7KLV SURGXFHV LQFUHDVH LQ NHWRKH[RNLQDVH & LQ WKH
KHDUW ZKLFK SKRVSKRU\ODWHV IUXFWRVH .HWRKH[RNLQDVH & LV D SUHGRPLQDQW OLYHU HQ]\PH DV
IUXFWRVH PHWDEROLVP LV SULPDULO\ IRFXVHG LQ WKH OLYHU ,Q WKH VHWWLQJ RI DQHURELF JO\FRO\VLV
NHWRKH[RNLQDVH & LV DOVR SURGXFHG LQ WKH EUDLQ DQG WKH KHDUW .HWRKH[RNLQDVH $ LV WKH
SUHGRPLQDQW HQ]\PH LQ WKH KHDUW DQG EUDLQ ,Q WKH VHWWLQJ RI DQHURELF JO\FRO\VLV
NHWRKH[RNLQDVH$ZKLFKSUHIHUHQWLDOO\PHWDEROL]HVJOXFRVHLVFRQYHUWHGWRNHWRKH[RNLQDVH&
PHWDEROL]LQJ IUXFWRVH E\ WKH PHFKDQLVP RI 51$ VSOLFLQJ $QHURELF FRQGLWLRQV FDQ LQGXFH
+,)DOSKDZKLFKDFWLYDWHVWKHVSOLFLQJIDFWRU6)%7KXV+,)DOSKDLQGXFHGE\JO\FRO\VLV
LQGXFHV 6)% ZKLFK LQGXFHV NHWRKH[RNLQDVH & SURGXFLQJ IUXFWRO\VLV LQ WKH KHDUW 7KH
IUXFWRVH LV FRQYHUWHG WR OLSLGV JO\FRJHQ DQG JO\FRVDPLQRJO\FDQV LQ WKH KHDUW SURGXFLQJ
FDUGLDFK\SHUWURSK\)UXFWRVHPHWDEROLVPLVQRWXQGHUUHJXODWRU\FRQWURORIWKHNH\HQ]\PH
SKRVSKRIUXFWRNLQDVH E\ FLWUDWH DQG $73 7KH IUXFWRO\WLF SDWKZD\ IXQFWLRQV DV D URJXH
SDWKZD\ QRW XQGHU DQ\ UHJXODWRU\ FRQWURO )UXFWRVH LV D NH\ FRQWULEXWRU 7KH V\PSDWKHWLF
RYHUDFWLYLW\ DQG SDUDV\PSDWKHWLF EORFNDGH FRQVHTXHQW WR IUXFWRVH FDQ SURGXFH LPPXQH
DFWLYDWLRQ 7KH V\PSDWKHWLF RYHUDFWLYLW\ DQG SDUDV\PSDWKHWLF EORFNDGH FDQ OHDG WR
G\VUHJXODWLRQRIWKHQHUYRXVV\VWHP
)UXFWRVH FDQ DFWLYDWH 1).% DQG WXPRXU QHFURVLV IDFWRU DOSKD 7KH YDJDO EORFNDGH
SURGXFHG E\ IUXFWRVH DOVR OHDGV WR LQFUHDVH LQ LPPXQH DFWLYDWLRQ )UXFWRVH FDQ LQKLELW
QHXWURSKLOLF SKDJRF\WRVLV ,QFUHDVHG IUXFWRVH LQJHVWLRQ FDQ OHDG WR LPPXQH DFWLYDWLRQ DQG
UHVSLUDWRU\GLVHDVHVOLNHFKURQLFEURQFKLWLV&23'DQGEURQFKLDODVWKPDDVZHOODVLQWHUVWLWLDO
OXQJ GLVHDVH 7KLV LPPXQH DFWLYDWLRQ LQGXFHG E\ IUXFWRVH LV FDOOHG DV IUXFWRVLWLV
)UXFWRV\ODWHG SURWHLQV FDQ VHUYH DV DXWRDQWLJHQV )UXFWRV\ODWHG SURWHLQV FDQ ELQG WR 5$*(
UHFHSWRUVSURGXFLQJLPPXQHDFWLYDWLRQ*OREDOZDUPLQJLQGXFHGIUXFWRVHGLVHDVHLVWKHEDVLV
RIWKHHSLGHPLFRIDXWRLPPXQHGLVHDVHULVLQJZLWKWKHJOREDOZDUPLQJ
)UXFWRVH LQFUHDVHV IOX[ WKURXJK WKH SHQWRVH SKRVSKDWH SDWKZD\ 7KLV LQFUHDVHV WKH
DYDLODELOLW\ RI KH[RVH VXJDUV OLNH ULERVH IRU QXFOHLF DFLG V\QWKHVLV 7KLV LQFUHDVHV '1$
V\QWKHVLV7KHUHLVDOVRFRQVHTXHQWLQFUHDVHLQSURWHLQV\QWKHVLV7KHWXPRXUFHOOVFDQVOXUS
XS IUXFWRVH 7XPRXU FHOOV XWLOLVH IUXFWRVH IRU SUROLIHUDWLRQ 7KH IHWDO FHOOV OLNH WXPRXU FHOOV
DOVRXWLOL]HIUXFWRVHIRUSUROLIHUDWLRQ)UXFWRVHFDQSURPRWHPHWDVWDWLFGHSRVLWV7KHWXPRXU
FHOOV XVH IUXFWRVH GLIIHUHQWO\ IURP JOXFRVH &DQFHU FHOOV XWLOL]H IUXFWRVH WR VXSSRUW
SUROLIHUDWLRQDQGPHWDVWDVLV)UXFWRVHLQFUHDVHVQXFOHLFDFLGV\QWKHVLV)UXFWRVHFDQKHOSWKH
FDQFHU FHOOV WR JURZ IDVW E\ LQGXFLQJ WKH WUDQVNHWRODVH HQ]\PH DQG WKH SHQWRVH SKRVSKDWH

SDWKZD\)UXFWRVHDGPLQLVWUDWLRQLQFUHDVHVUHGR[VWUHVV'1$GDPDJHDQGFHOOLQIODPPDWLRQ
DOOFRQWULEXWLQJWRRQFRJHQHVLV)UXFWRVHLVWKHPRVWDEXQGDQWVXJDULQWKHIHWDOWLVVXHVDQGLV
LPSRUWDQW LQ WKH GHYHORSPHQW RI IHWXV E\ SURPRWLQJ FHOO SUROLIHUDWLRQ )UXFWRVH LV WLPHV
PRUHFRQFHQWUDWHGLQWKHIHWDOEORRGWKDQJOXFRVH6SHUPFHOOVDQGRYDDOVRXVHIUXFWRVHIRU
PHWDEROLVP DQG HQHUJ\ 7KXV DOO UDSLGO\ SUROLIHUDWLQJ FHOOV FDQFHU FHOOV IHWDO FHOOV DQG
UHSURGXFWLYHFHOOVGHSHQGVXSRQIUXFWRO\VLV)UXFWRVHLVWKHSULQFLSDOGLHWRIWKHFDQFHUFHOOV
*OREDO ZDUPLQJ DQG DUFKDHDO JURZWK UHVXOWV LQ +,) DOSKD LQGXFWLRQ +,) DOSKD LQGXFHV
WXPRXU JURZWK +,) DOSKD DOVR LQFUHDVHV JO\FRO\VLV %XW DUFKDHDO LQGXFHG +,) DOSKD DOVR
LQGXFHVDOGRVHUHGXFWDVHZKLFKFRQYHUWVJOXFRVHWRIUXFWRVHDQGPHWDEROLVPSURFHHGVDORQJ
WKH IUXFWRO\WLF SDWKZD\ )UXFWRV\ODWLRQ RI JO\FRO\WLF HQ]\PHV EULQJV JO\FRO\VLV WR D KDOW
)UXFWRV\ODWLRQ RI PLWRFKRQGULDO 37 SRUH KH[RNLQDVH FDQ UHVXOW LQ 37 SRUH G\VIXQFWLRQ DQG
FHOO SUROLIHUDWLRQ 7KH IUXFWRO\WLF SDWKZD\ LV WKH SULQFLSDO HQHUJHWLF SDWKZD\ IRU UDSLGO\
SUROLIHUDWLQJ FDQFHU FHOOV IHWDO FHOOV DQG VWHP FHOOV 7KH JOREDO ZDUPLQJ ZLOO LQGXFH WKH
:DUEXUJSKHQRW\SHRIWKHIUXFWRO\WLFYDULHW\7KLVOHDGVWRDQHSLGHPLFRIFDQFHU7KHUHLVDQ
HSLGHPLF RI FDQFHU LQ UHODWLRQ WR JOREDO ZDUPLQJ 7KH IUXFWRO\WLF SDWKZD\ FDQ OHDG WR
LQFUHDVHG'1$V\QWKHVLVDQG51$V\QWKHVLVGXHWRIOX[YLDWKHSHQWRVHSKRVSKDWHSDWKZD\
7KH IUXFWRO\WLF SDWKZD\ FDQ EH GLUHFWHG WR WKH *$%$ VKXQW JHQHUDWLQJ VXFFLQ\O &R$ DQG
JO\FLQH 7KHVH DUH VXEVWUDWHV IRU SRUSK\ULQ WHPSODWHV WR IRUP 51$ YLURLGV 7KH DUFKDHDO
LQGXFHG UHGR[ VWUHVV FDQ LQGXFH HQGRJHQRXV +(59 H[SUHVVLRQ DQG UHYHUVH WUDQVFULSWDVH
H[SUHVVLRQ7KH51$YLURLGVDUHFRQYHUWHGE\+(59UHYHUVHWUDQVFULSWDVHWRFRUUHVSRQGLQJ
'1$DQGLQWHJUDWHGLQWRWKHJHQRPHE\+(59LQWHJUDVH7KHLQWHJUDWHG51$YLURLGUHODWHG
'1$FDQIXQFWLRQDVMXPSLQJJHQHVSURGXFLQJJHQRPLFSODVWLFLW\DQGJHQRPLFFKDQJH
)UXFWRVHDVVDLGEHIRUHLQGXFHVWKHWKLDPLQHGHSHQGHQWWUDQVNHWRODVHIOX[,WLQFUHDVHV
ERWKWKHR[LGDWLYHDQGQRQR[LGDWLYHSHQWRVHSKRVSKDWHSDWKZD\7KLVLQFUHDVHVQXFOHLFDFLGV
DQG JO\FRVDPLQRJO\FDQ V\QWKHVLV )UXFWRVH LV FRQYHUWHG WR IUXFWRVH SKRVSKDWH ZKLFK LV
DFWHGXSRQE\DOGRODVH%FRQYHUWLQJLWLQWRJO\FHUDOGHK\GHDQGGLK\GUR[\DFHWRQHSKRVSKDWH
*O\FHUDOGHK\GH LV FRQYHUWHG JO\FHUDOGHK\GH SKRVSKDWH E\ WULRNLQDVH '+$3 FDQ EH
FRQYHUWHG WR JO\FHUDOGHK\GH SKRVSKDWH E\ WKH HQ]\PH WULRVH SKRVSKDWH LVRPHUDVH
*O\FHUDOGHK\GHSKRVSKDWHFDQEHFRQYHUWHGWRS\UXYDWH7KLVS\UXYDWHFDQEHFKDQQHOHGWR
JOXFRQHRJHQHVLV DQG JO\FRJHQ VWRUDJH E\ WKH DFWLRQ RI WKH HQ]\PH S\UXYDWH FDUER[\ODVH
7KLV UHVXOWV LQ WKH FRQYHUVLRQ RI JO\FHUDOGHK\GH SKRVSKDWH WR S\UXYDWH DQG YLD S\UXYDWH
FDUER[\ODVHWRJOXFRVHSKRVSKDWH*OXFRVHSKRVSKDWHLVFRQYHUWHGWRJO\FRJHQSRO\PHUV
7KXVIUXFWRO\VLVUHVXOWVLQJO\FRJHQVWRUDJH7KHS\UXYDWHWKDWLVJHQHUDWHGE\IUXFWRO\VLVLV

FRQYHUWHGWRJOXWDPDWHZKLFKFDQHQWHUWKH*$%$VKXQWSDWKZD\7KH*$%$VKXQWSDWKZD\
JHQHUDWHVJO\FLQHDQGVXFFLQ\O&R$ZKLFKDUHVXEVWUDWHVIRU$/$V\QWKHVLV7KXVIUXFWRO\VLV
VWLPXODWHV SRUSK\ULQ V\QWKHVLV 7KH SRUSK\ULQV FDQ VHOI RUJDQL]H WR IRUP VXSUDPROHFXODU
DUUD\V FDOOHG SRUSK\ULRQV 3RUSK\ULRQV FDQ VHOI UHSOLFDWH E\ XVLQJ RWKHU SRUSK\ULRQV DV
WHPSODWHV3RUSK\ULRQVFDQKDYHHQHUJHWLFDQG$73V\QWKHVLVE\HOHFWURQRUSKRWRQWUDQVSRUW
3RUSK\ULRQV DUH GLSRODU PROHFXOHV DQG LQ WKH VHWWLQJ RI GLJR[LQ LQGXFHG PHPEUDQH VRGLXP
SRWDVVLXP $73DVH LQKLELWLRQ FDQ JHQHUDWH D SXPSHG SKRQRQ V\VWHP LQGXFHG TXDQWDO VWDWH
DQG TXDQWDO SHUFHSWLRQ 7KH\ FDQ IXQFWLRQ DV TXDQWDO FRPSXWHUV ZLWK LQIRUPDWLRQ VWRUDJH
7KH SRUSK\ULRQV DUH EDVLF VHOI UHSOLFDWLQJ OLYLQJ VWUXFWXUHV 7KH SRUSK\ULQV FDQ DFW DV D
WHPSODWHIRUWKHIRUPDWLRQ51$'1$DQGSURWHLQV7KH51$YLURLGVWKH'1$YLURLGVDQG
SURWHLQVJHQHUDWHGE\DELRJHQHVLVRQSRUSK\ULQWHPSODWHVFDQVHOIRUJDQL]HWRIRUPSULPLWLYH
DUFKDHD 7KH DUFKDHD DUHWKXV FDSDEOH RI DELRJHQLF UHSOLFDWLRQRQSRUSK\ULQWHPSODWHV7KH
DUFKDHDFDQLQGXFH+,)DOSKDDQGIXUWKHUDOGRVHUHGXFWDVHLQGXFWLRQSURPRWLQJIUXFWRO\VLV
)UXFWRVHLVDQDGGLFWLYHVXEVWDQFH)UXFWRVHDIIHFWVWKHKHGRQLFFHQWUHVLQWKHEUDLQ
FRQFHUQHG ZLWK SOHDVXUH DQG UHZDUG ,Q WKH DGGLFWLRQ VFDOH IUXFWRVH LV PRUH DGGLFWLYH WKHQ
FRFDLQHDQGFDQQDELV)UXFWRVHGHFUHDVHV%'1)/RZ%'1)SURGXFHVFKDQJHVLQWKHEUDLQ
UHVXOWLQJ LQ VFKL]RSKUHQLD DQG GHSUHVVLRQ )UXFWRVH FDQ DOVR SURGXFH FKURQLF LQIODPPDWLRQ
LQYROYHGLQVFKL]RSKUHQLD7KHIUXFWRO\WLFSDWKZD\LVLPSRUWDQWLQWKHJHQHVLVRISV\FKLDWULF
GLVRUGHUV 7KH LQFUHDVHG IUXFWRO\VLV FDQ OHDG WR IUXFWRV\ODWLRQ RI OLSRSURWHLQV HVSHFLDOO\
DSRSURWHLQ(DQGDSRSURWHLQ%$SR%FDQXQGHUJRO\VLQHIUXFWRV\ODWLRQOHDGLQJWRGHIHFWLYH
/'/ DQG FKROHVWHURO XSWDNH E\ WKH EUDLQ 7KLV UHVXOWV LQ DXWLVP DQG VFKL]RSKUHQLD
)UXFWRO\VLV OHDGV WR FKROHVWHURO GHSOHWLRQ RI WKH EUDLQ &KROHVWHURO LV UHTXLUHG IRU WKH
IRUPDWLRQRIV\QDSWLFFRQQHFWLRQVDQGFHUHEUDOFRUWH[7KLVOHDGVWRFHUHEUDOFRUWLFDODWURSK\
DQGFHUHEHOODUGRPLQDQFHLQWKHSUHVHQFHRIFKROHVWHUROGHSOHWLRQ7KLVFDQFRQWULEXWHWRWKH
JHQHVLVRIWKHFHUHEHOODUFRJQLWLYHDIIHFWLYHV\QGURPHWKHEDVLVRIVFKL]RSKUHQLDDQGDXWLVP
7KHUH LV DQ HSLGHPLF RI VFKL]RSKUHQLD DQG DXWLVP FRUUHODWLQJ ZLWK JOREDO ZDUPLQJ
)UXFWRV\ODWLRQ RI /'/ DQG EUDLQ FKROHVWHURO GHSOHWLRQ FDQ OHDG WR G\VIXQFWLRQ LQ V\QDSWLF
WUDQVSRUW7KHUHLVPRUHUHOHDVHRIJOXWDPDWHLQWRWKHV\QDSWLFIURPWKHSUHV\QDSWLFQHXURQ
FRQVHTXHQW WR D SUHV\QDSWLF QHXURQ PHPEUDQH G\VIXQFWLRQ DV D UHVXOW RI FKROHVWHURO
GHSOHWLRQ7KLVFRQWULEXWHVWRJOXWDPDWHH[FLWRWR[LFLW\*OXWDPHH[FLWRWR[LFLW\FDQFRQWULEXWH
WR QHXURQDO GHJHQHUDWLRQ )UXFWRVH FDQ DOVR SURGXFH ]LQF GHILFLHQF\ ,QFUHDVHG IUXFWRVH
LQWDNHSURGXFHV]LQFGHSOHWLRQOHDGLQJWRGHIHFWLYHIRUPDWLRQRIPHWDOORWKLRQLQHVOHDGLQJWR
GHIHFWLYHKHDY\PHWDOH[FUHWLRQ7KLVOHDGVWRPHUFXU\FDGPLXPDQGDOXPLQLXPWR[LFLW\LQ

WKH EUDLQ OHDGLQJ WR SV\FKLDWULF GLVRUGHUV OLNH DXWLVP DQG GHJHQHUDWLRQV OLNH $O]KHLPHU¶V
GLVHDVH =LQF GHILFLHQF\ FRQVHTXHQW WR IUXFWRVH H[FHVV FDQ OHDG WR FRSSHU H[FHVV 7KH ]LQF
FRQWDLQLQJ QHXURQV LQ WKH FHUHEUDO FRUWH[ DUH FDOOHG WKH JOX]LQHUJLF QHXURQV 7KH FHUHEUDO
FRUWH[ HVSHFLDOO\ WKH SUHIURQWDO FRUWH[ ZLOO DWURSK\ SURGXFLQJ FHUHEHOODU DQG EUDLQ VWHP
GRPLQDQFH &RSSHU LV UHTXLUHG IRU WKH GRPLQDQFH RI VXEFRUWLFDO FRJQLWLYH VWUXFWXUHV
)UXFWRVHLQJHVWLRQFDQDOVROHDGWRFDOFLXPGHILFLHQF\ZKLFKFDQSURGXFHGHIHFWLYHFDOFLXP
VLJQDOLQJ )UXFWRVH LQJHVWLRQ OHDGV WR IUXFWRO\VLV DQG WKH JHQHUDWLRQ RI UHDFWLYH VSHFLHV
GHR[\JOXFRVRQH LPSRUWDQW LQ PDOODUG UHDFKLRQ DQG IUXFWRV\ODWLRQ RI QHXURQDO SURWHLQV
OHDGLQJ WR WKHLU GHIHFWLYH IXQFWLRQ 1HXURSV\FKLDWULF GLVRUGHUV DQG QHXURGHJHQHUDWLYH
GLVRUGHUV FDQ EH GHVFULEHG DV IUXFWRVH GLVHDVHV 7RSLUDPDWH D IUXFWRVH DQDORJXH LV XVHG WR
WUHDW PRWRU QHXURQ GLVHDVH )UXFWRVH ELSKRVSKDWH DOGRODVH % PXWDWLRQ KDV EHHQ VHHQ LQ
VFKL]RSKUHQLDELSRODUGLVRUGHUVDQGGHSUHVVLRQSKRVSKRIUXFWRNLQDVHDQGIUXFWRVH
ELSKRVSKRWDVH DEQRUPDOLWLHV KDYH EHHQ VHHQ LQ VFKL]RSKUHQLD )UXFWRVH PHWDEROLVP
DEQRUPDOLWLHV KDYH EHHQ QRWHG LQ VFKL]RSKUHQLD PDQLF GHSUHVVLYH SV\FKRVLV DQG DXWLVP
)UXFWRVHLQKLELWVEUDLQSODVWLFLW\)UXFWRVHLQKLELWVWKHDELOLW\RIQHXURQVWRFRPPXQLFDWHZLWK
HDFK RWKHU 7KH ZLULQJ DQG UHZLULQJ RI QHXURQV LV LQKLELWHG )UXFWRVH OHDGV WR D QHXURQDO
GLVFRQQHFWLRQV\QGURPH
)UXFWRVH FDQ LQFUHDVH IOX[ YLD WKH SHQWRVH SKRVSKDWH SDWKZD\ DQG KH[RVDPLQH
SDWKZD\ OHDGLQJ WR JO\FRVDPLQRJO\FDQ V\QWKHVLV *O\FRVDPLQRJO\FDQ DFFXPXODWLRQ LQ WKH
WLVVXHV FDQ SURGXFH PXFRSRO\VDFFKDULGRVLV DQG ILEURVLV ,QFUHDVHG KHSDUDQ VXOSKDWH
DFFXPXODWLRQ LQ WKH EUDLQ OHDGV WR IRUPDWLRQ RI DP\ORLGV SODTXHV DQG $O]KHLPHU¶V GLVHDVH
&RQQHFWLYHWLVVXHDFFXPXODWLRQLQWKHOXQJOHDGVWRLQWHUVWLWLDOOXQJGLVHDVHLQWKHNLGQH\VLW
SURGXFHVWXEXODUDWURSK\DQGDFKURQLFUHQDOIDLOXUHVLPLODUWRPHVR$PHULFDQQHSKURSDWK\
&RQQHFWLYH WLVVXH DFFXPXODWLRQ LQ WKH KHDUW FDQ OHDG WR D UHVWULFWLYH FDUGLRP\RSDWK\
$FFXPXODWLRQRI*$*HVSHFLDOO\K\DOXURQLFDFLGLQERQHVDQGMRLQWVOHDGVWRRVWHRDUWKULWLV
DQGVSRQG\ORVLV*$*DFFXPXODWLRQLQWKHHQGRFULQHRUJDQVFDQSURGXFHWK\URLGG\VIXQFWLRQ
UHVXOWLQJ LQ 01* DQG WK\URLGLWLV SDQFUHDWLF G\VIXQFWLRQ SURGXFLQJ FKURQLF FDOFLILF
SDQFUHDWLWLVDQGDGUHQDOG\VIXQFWLRQSURGXFLQJK\SRDGUHQDOLVP$FFXPXODWLRQRI*$*LQWKH
YDVFXODUWLVVXHVFDQUHVXOWLQPXFRLGDQJLRSDWK\FRQWULEXWLQJWRFRURQDU\DUWHU\GLVHDVHDQG
VWURNH 7KH DFFXPXODWLRQ RI OLSLGV GXH WR WKH IUXFWRO\WLF SDWKZD\ DORQJ ZLWK
JO\FRVDPLQRJO\FDQV FDQ OHDG WR IDWW\ OLYHU 7KLV FDQ ODWHU OHDG RQ WR FLUUKRVLV RI WKH OLYHU
)UXFWRVHLVWKHSULQFLSDOFXOSULWIRUIDWW\OLYHUDQGFLUUKRVLV7KHJO\FLQHV\QWKHVL]HGIURPWKH
IUXFWRO\WLF LQWHUPHGLDWH SKRVSKRJO\FHUDWH FDQ SOD\ D UROH LQKLELWLQJ IDWW\ OLYHU 7KHUH LV DQ

HSLGHPLF RI FKURQLF UHQDO IDLOXUH GXH WR WXEXODU ILEURVLV PXFRLG DQJLRSDWKLF YDVFXODU
GLVHDVHVFDUGLRP\RSDWK\PXOWLSOHHQGRFULQHIDLOXUHVFLUUKRVLVRIWKHOLYHULQWHUVWLWLDOOXQJ
GLVHDVHGHJHQHUDWLYHERQHDQGMRLQWGLVHDVHVDQGGHJHQHUDWLYHEUDLQGLVHDVHOLNH$O]KHLPHU¶V
GLVHDVHDQG3DUNLQVRQ¶VGLVHDVHDVDFRQVHTXHQFHRIJOREDOZDUPLQJ
)UXFWRVH LV SKRVSKRU\ODWHG WR IUXFWRVH SKRVSKDWH E\ NHWRKH[RNLQDVH & RU
IUXFWRNLQDVH)UXFWRVHSKRVSKDWHLVFRQYHUWHGWRJO\FHUDOGHK\GHZKLFKLVWKHQFRQYHUWHGWR
JO\FHUDOGHK\GH SKRVSKDWH DQG GLK\GUR[\ DFHWRQH SKRVSKDWH '+$3 )UXFWRVH
SKRVSKDWH LV FOHDYHG WR '+$3 DQG JO\FHUDOGHK\GH SKRVSKDWH '+$3 FDQ HQWHU WKH
JO\FRO\WLFSDWKZD\RUFDQJRWRJOXFRQHRJHQHWLFSDWKZD\'+$3JHQHUDWHGIURPIUXFWRVH
SKRVSKDWHE\WKHDFWLRQRIDOGRODVH%LVDFWHGXSRQE\WULRVHSKRVSKDWHLVRPHUDVHFRQYHUWLQJ
LW LQWR JO\FHUDOGHK\GH SKRVSKDWH *O\FHUDOGHK\GH SKRVSKDWH FDQ EH IUXFWRO\VHG WR
S\UXYDWHDQGDFHW\O&R$$FHW\O&R$FDQEHXVHGIRUFKROHVWHUROV\QWKHVLVIRUVWRUDJH7KH
S\UXYDWH JHQHUDWHG IURP JO\FHUDOGHK\GH SKRVSKDWH FDQ EH FRQYHUWHG WR WKH FLWUDWH ZKLFK
FDQEHXVHGIRUIDWW\DFLGV\QWKHVLVE\WKHDFWLRQRIHQ]\PHVDFHW\O&R$FDUER[\ODVHIDWW\
DFLG V\QWKDVH DQG PDORQDWH GHK\GURJHQDVH *O\FHUDOGHK\GH LV DFWHG XSRQ E\ DOFRKRO
GHK\GURJHQDVH ZKLFK FRQYHUWV LW LQWR JO\FHURO *O\FHURO LV DFWHG XSRQ E\ JO\FHURONLQDVH
FRQYHUWLQJ LW LQWR JO\FHURO SKRVSKDWH XVHG IRU SKRVSKRJO\FHULGH DQG WULJO\FHULGH V\QWKHVLV
*O\FHUDOGHK\GH FDQ DOVR EH DFWHG XSRQ E\ WULRNLQDVH FRQYHUWLQJ LW LQWR JO\FHUDOGHK\GH
SKRVSKDWH ZKLFK LV WKHQ FRQYHUWHG WR '+$3 E\ WULRVH SKRVSKDWH LVRPHUDVH *O\FHUDO
SKRVSKDWHDQGGLK\GUR[\DFHWRQHSKRVSKDWHDUHLQWHUFRQYHUWLEOHE\WKHDFWLRQRIWKHHQ]\PH
JO\FHURO SKRVSKDWH GHK\GURJHQDVH *O\FHURO DQG IDWW\ DFLGV JHQHUDWHG E\ IUXFWRO\VLV
FRQWULEXWHWROLSLGV\QWKHVLVDQGIDWLVVWRUHG)UXFWRVHGRHVQRWLQFUHDVHLQVXOLQVHFUHWLRQDQG
GRHV QRW QHHG LQVXOLQ IRU WUDQVSRUW LQWR WKH FHOO )UXFWRVH LV WUDQVSRUWHG E\ WKH IUXFWRVH
WUDQVSRUWHU*/87.HWRKH[RNLQDVH&LVH[FOXVLYHO\VHHQLQWKHOLYHUZKLFKLVWKHSULQFLSDO
VLWHRIIUXFWRVHPHWDEROLVP,QWKHSUHVHQFHRIK\SR[LDDQGDQHURELFVWDWHVWKHUHLVLQGXFWLRQ
RI +,) DOSKD ZKLFK FDQ LQGXFH NHWRKH[RNLQDVH & RU IUXFWRNLQDVH LQ WKH OLYHU NLGQH\
JDVWURLQWHVWLQDO WUDFW EUDLQ DQG KHDUW )UXFWRVH SKRVSKDWH E\SDVVHV WKH HQ]\PH
SKRVSKRIUXFWRNLQDVH ZKLFK LV WKH NH\ UHJXODWRU\ HQ]\PH WKH JO\FRO\WLF SDWKZD\
3KRVSKRIUXFWRNLQDVH LV LQKLELWHG E\ $73 DQG FLWUDWH 7KXV VWUHVV LQGXFHG IUXFWRO\VLV LV DQ
XQUHJXODWHG SDWKZD\ QRW DPHQDEOH WR PHWDEROLF VZLWFKHV )UXFWRVH GRHV QRW GHSHQG XSRQ
LQVXOLQIRULWVWUDQVSRUWDQGIUXFWRO\VLV7KHUHIRUHIUXFWRO\VLVLVQRWXQGHULQVXOLQRUHQGRFULQH
FRQWURO,WLVDQXQUHJXODWHGSDWKZD\

7KH SKRVSKRU\ODWLRQ RI IUXFWRVH GHSOHWHV WKH FHOO RI $73 .HWRKH[RNLQDVHV
SUHIHUHQWLDOO\SKRVSKRU\ODWHIUXFWRVHRYHUJOXFRVHLILWLVDYDLODEOH,QWKHSUHVHQFHRIUHGR[
VWUHVV RVPRWLF VWUHVV DQG DUFKDHDYLURLGV DOGRVH UHGXFWDVH LV LQGXFHG FRQYHUWLQJ DOO WKH
JOXFRVH WR IUXFWRVH *O\FRO\WLF SDWKZD\ FRPHV WR D KDOW DV QR $73 LV DYDLODEOH IRU
SKRVSKRU\ODWLRQ RI JOXFRVH DQG JOXFRVH DV VXFK JHWV FRQYHUWHG WR IUXFWRVH 7KH IUXFWRVH
SKRVSKRU\ODWLRQ GHSOHWHV WKH FHOO RI $73 $73 LV FRQYHUWHG WR $'3 DQG $03 ZKLFK LV
GHDPLQDWHG WR SURGXFH XULF DFLG )UXFWRVH LQFUHDVHV IOX[ LQ WKH SHQWRVH SKRVSKDWH SDWKZD\
LQFUHDVLQJ QXFOHLF DFLG V\QWKHVLV 3XULQH GHJUDGDWLRQ UHVXOWV LQ K\SHUXULFHPLD 7KXV
IUXFWRO\VLVUHVXOWVLQLQFUHDVHLQXULFDFLGDFFXPXODWLRQLQWKHERG\8ULFDFLGZLOOVXSSUHVV
WKHPLWRFKRQGULDOR[LGDWLYHSKRVSKRU\ODWLRQDVZHOODVSURGXFHHQGRWKHOLDOG\VIXQFWLRQ7KH
GHSOHWLRQ RI $73 E\ IUXFWRVH SKRVSKRU\ODWLRQ UHVXOWV LQ PHPEUDQH VRGLXP SRWDVVLXP
$73DVHLQKLELWLRQ7KLVUHVXOWVLQUHGXFHGHQHUJ\QHHGVRIWKHFHOODVSHUFHQWRIWKH$73
JHQHUDWHGE\PHWDEROLVPLVXVHGIRUPDLQWDLQLQJWKHVRGLXPSRWDVVLXPSXPS7KLVUHVXOWVLQ
PHPEUDQH $73DVH LQKLELWLRQ JHQHUDWHG KLEHUQDWRU\ VWDWH 7KH JO\FHUDOGHK\GH SKRVSKDWH
JHQHUDWHGE\IUXFWRO\VLVFDQEHFRQYHUWHGWRWKHS\UXYDWHDQGDFHW\O&R$XVHGIRUFKROHVWHURO
V\QWKHVLV7KHFKROHVWHUROWKDWLVV\QWKHVL]HGLVXVHGIRUGLJR[LQV\QWKHVLV'LJR[LQDOVRKDV
JRW DJO\FRQH SDUW ZKLFK FRQWDLQV VXJDUV OLNH GLJLWR[RVH DQG UKDPQRVH 'LJLWR[RVH DQG
UKDPQRVH DUH JHQHUDWHG E\ WKH IUXFWRVH LQGXFHG IOX[ DQG XSJUDGDWLRQ RI WKH SHQWRVH
SKRVSKDWH SDWKZD\ 7KXV IUXFWRO\VLV UHVXOWV LQ D K\SHUGLJR[LQHPLF VWDWH DQG PHPEUDQH
VRGLXPSRWDVVLXP$73DVHLQKLELWLRQ7KLVUHVXOWVLQFHOOSURWHFWLRQDQGKLEHUQDWLRQ
)UXFWRVH SURGXFHV IOX[ DORQJ WKH SHQWRVH SKRVSKDWH SDWKZD\ DQG KH[RVDPLQH
SDWKZD\7KLVUHVXOWVLQ*$*DQGQXFOHLFDFLGV\QWKHVLV)UXFWRVHLVFRQYHUWHGWRIUXFWRVH
SKRVSKDWH ZKLFK LV WKHQ FRQYHUWHG WR ULEXORVH SKRVSKDWH 5LEXORVH SKRVSKDWH LV DFWHG
XSRQ E\ DQ LVRPHUDVH FRQYHUWLQJ LW LQWR [\OXORVH SKRVSKDWH DQG ULERVH SKRVSKDWH
;\OXORVHSKRVSKDWHDQGULERVHSKRVSKDWHLQWHUDFWWRSURGXFHJO\FHUDOGHK\GHSKRVSKDWH
DQGVHGRKHSWXORVHSKRVSKDWHZKLFKLVWKHQFRQYHUWHGWRIUXFWRVHSKRVSKDWHDQGHU\WKURVH
SKRVSKDWH7KHSHQWRVHSKRVSKDWHSDWKZD\JHQHUDWHVULERVHIRUQXFOHLFDFLGV\QWKHVLV7KH
SDWKZD\DOVRJHQHUDWHVKH[RVDPLQHVIRU*$*V\QWKHVLV7KHSHQWRVHSKRVSKDWHSDWKZD\DOVR
SURGXFHVGLJLWR[RVHDQGUKDPQRVHIRUGLJR[LQV\QWKHVLV
7KH JOREDO ZDUPLQJ UHVXOWV LQ HQGRV\PELRWLF DUFKDHDO JURZWK $UFKDHD FDQ LQGXFH
DOGRVH UHGXFWDVH ZKLFK FRQYHUWV JOXFRVH WR IUXFWRVH )UXFWRO\VLV SURPRWHV IOX[ DORQJ WKH
SHQWRVH SKRVSKDWH SDWKZD\ JHQHUDWLQJ QXFOHLF DFLGV DQG JO\FRVDPLQRJO\FDQV )UXFWRO\VLV

DOVRJHQHUDWHVJO\FHUDOGHK\GHSKRVSKDWHDQGIXUWKHUS\UXYDWH7KHS\UXYDWHFDQHQWHUWKH
S\UXYDWH FDUER[\ODVH VFKHPH JHQHUDWLQJ JOXFRQHRJHQHVLV DQG JO\FRJHQ V\QWKHVLV 7KXV
IUXFWRO\VLV FDQ SURGXFH JO\FRJHQ VWRUDJH 3\UXYDWH FDQ EH FRQYHUWHG WR FLWUDWH IRU OLSLG
V\QWKHVLV3\UXYDWHFDQDOVREHFRQYHUWHGWRDFHW\O&R$IRUFKROHVWHUROV\QWKHVLV7KHIOX[
DORQJWKHSHQWRVHSKRVSKDWHSDWKZD\JHQHUDWHVWKHGLJR[LQVXJDUVGLJLWR[RVHDQGUKDPQRVH
&KROHVWHURO FDQ EH FRQYHUWHG WR GLJR[LQ SURGXFLQJ D K\SHUGLJR[LQHPLF VWDWH 'LJR[LQ
SURGXFHVPHPEUDQHVRGLXPSRWDVVLXP$73DVHLQKLELWLRQ7KHVHOHFWLYHSKRVSKRU\ODWLRQRI
IUXFWRVH E\ IUXFWRNLQDVH GHSOHWHV WKH FHOO RI $73 SURGXFLQJ PHPEUDQH VRGLXP SRWDVVLXP
$73DVH LQKLELWLRQ 7KLV UHVXOWV LQ WKH JHQHUDWLRQ RI D KLEHUQDWRU\ VWDWH 7KH IUXFWRO\VLV
JHQHUDWHGS\UXYDWHFDQJHWFRQYHUWHGWRJOXWDPDWHZKLFKFDQHQWHUWKH*$%$VKXQWSDWKZD\
SURGXFLQJ VXFFLQ\O &R$ DQG JO\FLQH IRU SRUSK\ULQ V\QWKHVLV 3RUSK\ULQV FDQ IRUP VHOI
UHSOLFDWLQJSRUSK\ULRQVRUDFWDVDWHPSODWHIRUWKHIRUPDWLRQRI51$YLURLGV'1$YLURLGV
DQG SULRQV ZKLFK FDQ V\PELRVH WR IRUP DUFKDHD 7KXV WKH DUFKDHD DUH FDSDEOH RI VHOI
UHSOLFDWLQJ RQ SRUSK\ULQ WHPSODWHV 7KH IUXFWRO\VLV WKXV SURGXFHV D KLEHUQDWRU\ V\QGURPH
ZLWKIDWJO\FRJHQDQGQXFOHLFDFLGV\QWKHVLVDQGVWRUDJH)UXFWRO\VLVUHVXOWVLQWKHJHQHUDWLRQ
RI D KLEHUQDWRU\ VSHFLHV WKH KRPR QHDQGHUWKDOLV 7KH IUXFWRO\VLV JHQHUDWHG PHPEUDQH
VRGLXPSRWDVVLXP$73DVHLQKLELWLRQUHVXOWVLQFHOOKLEHUQDWLRQDQG$73VSDULQJ7KHODFNRI
$73DQGGLJR[LQLQGXFHGPHPEUDQHVRGLXPSRWDVVLXP$73DVHLQKLELWLRQUHVXOWVLQFRUWLFDO
LQKLELWLRQ DQG FHUHEHOODU GRPLQDQFH 7KLV SURGXFHV D VRPQROHQW VWDWH DQG D FHUHEHOODU
FRJQLWLYH DIIHFWLYH GLVRUGHU 7KH SRUSK\ULRQV JHQHUDWHG E\ IUXFWRO\VLV SURGXFHV TXDQWDO
SHUFHSWLRQ DQG FHUHEHOODU GRPLQDQFH 7KH VWRUDJH RI JO\FRJHQ IDW DQG *$* UHVXOWV LQ
REHVLW\ 7KH FHUHEHOODU FRJQLWLYH DIIHFWLYH V\QGURPH UHVXOWV LQ D K\SHUVH[XDO VWDWH 7KH
IUXFWRO\VLVDQGIUXFWRVHFDQDFWLYDWH1).%SURGXFLQJLPPXQHDFWLYDWLRQ7KHIUXFWRV\ODWLRQ
RI JO\FRO\WLF DQG PLWRFKRQGULDO SURWHLQV VXSSUHVVHV WKH ERG\¶V QRUPDO HQHUJHWLF ZKLFK
GHSHQGV XSRQ JO\FRO\VLV DQG PLWRFKRQGULDO R[LGDWLYH SKRVSKRU\ODWLRQ )UXFWRV\ODWLRQ RI
SURWHLQVUHVXOWVLQEORFNDGHRIJO\FRO\VLVDQGPLWRFKRQGULDOR[LGDWLYHSKRVSKRU\ODWLRQ7KH
ERG\¶VHQHUJ\QHHGVDUHSURGXFHGE\IUXFWRO\VLVSRUSK\ULQDUUD\PHGLDWHGHOHFWURQWUDQVSRUW
FKDLQDQG$73V\QWKHVLVDVZHOODVPHPEUDQHVRGLXPSRWDVVLXP$73DVHLQKLELWLRQUHODWLRQ
$73 V\QWKHVLV 7KLV SURGXFHV D QHZ VSHFLHV E\ DUFKDHDO V\PELRVLV FRQVHTXHQW WR JOREDO
ZDUPLQJ WKH KRPR QHDQGHUWKDOLV 7KLV FDQ EH FDOOHG DV WKH WURSLFDO KLEHUQDWRU\ V\QGURPH
FRQVHTXHQWWRJOREDOZDUPLQJ

(QGRV\PELRWLFDUFKDHD51$YLURLGVDP\ORLGDQGSULRQGLVHDVH
7KH LQFUHDVLQJ JURZWK RI DUFKDHD UHVXOWV LQ LQFUHDVHG VHFUHWLRQ RI DUFKDHDO 51$
YLURLGV7KH\FDQLQWHUUXSWP51$IXQFWLRQDQGG\VUHJXODWHVFHOOPHWDEROLVP7KLVLVE\WKH
PHFKDQLVP RI P51$ EORFNDGH 7KH YLURLGDO 51$ FDQ FRPELQH ZLWK SURWHLQV JHQHUDWLQJ
SULRQ SURWHLQV 7KLV SURGXFHV D SURWHLQ FRQIRUPDWLRQ GHIHFW 7KLV SURGXFHV D SULRQ SURWHLQ
GLVHDVH $EQRUPDO SURWHLQ FRQIRUPDWLRQ RI EHWD DP\ORLG DOSKD V\QXFOHLQ
ULERQXFOHRSURWHLQV LVOHW DVVRFLDWHG DP\ORLG SRO\SHSWLGH DQG WXPRXU VXSSUHVVRU SURWHLQ FDQ
OHDG WR DQ HSLGHPLF RI $O]KHLPHU¶V GLVHDVH GXH WR EHWD DP\ORLG DFFXPXODWLRQ DOSKD
V\QXFOHLQ DFFXPXODWLRQ SURGXFLQJ 3DUNLQVRQ¶V GLVHDVH SULRQ OLNH ULERQXFOHRSURWHLQV
SURGXFLQJPRWRUQHXURQGLVHDVHPHWDEROLFV\QGURPH;GXHWRGHIHFWLYHLQVXOLQVHFUHWLRQDV
D UHVXOW RI ,$33 DQG DEQRUPDO SULRQ OLNH WXPRXU VXSSUHVVRU SURWHLQ SURGXFLQJ WXPRXUV
7KHVH SULRQ GLVHDVHV LQGXFHG E\ DUFKDHDO 51$ YLURLGV DUH DOVR WUDQVPLVVLEOH 7KXV JOREDO
ZDUPLQJ UHODWHG IUXFWRO\VLV OHDGV WR DUFKDHDO LQGXFHG 51$ YLURLGDO PHGLDWHG SULRQ GLVHDVH
DQGDP\ORLGRVLV7KLVUDLVHVWKHVSHFWDFOHRID&DVVDQGUDV\QGURPHRIKXPDQH[WLQFWLRQ

*OREDOZDUPLQJIUXFWRVHGLVHDVHDQGKLEHUQDWRU\V\QGURPH
7KLV FDQ EH FDOOHG DOVR DV D IUXFWRVH GLVHDVH (QGRV\PELRWLF DUFKDHD DQG YLURLGV
LQGXFHDOGRVHUHGXFWDVHDQGFRQYHUWVERG\JOXFRVHWRIUXFWRVHOHDGLQJWRSUHIHUHQWLDOIUXFWRVH
SKRVSKRU\ODWLRQE\NHWRKH[RNLQDVH&)UXFWRO\VLVUHVXOWVLQIUXFWRVHSKRVSKDWHEHLQJDFWHG
XSRQ E\ DOGRODVH % UHVXOWLQJ LQ WKH IRUPDWLRQ RI JO\FHUDOGHK\GH DQG GLK\GUR[\ DFHWRQH
SKRVSKDWH *O\FHUDOGHK\GH FDQ EH FRQYHUWHG WR JO\FHUDOGHK\GH SKRVSKDWH DQG WKLV
FRQWULEXWHVWRS\UXYDWHIRUPDWLRQ3\UXYDWHHQWHUVWKH*$%$VKXQWUHVXOWLQJLQWKHIRUPDWLRQ
RI VXFFLQ\O &R$ DQG JO\FLQH 7KH\ DUH VXEVWUDWHV IRU SRUSK\ULQ V\QWKHVLV DQG SRUSK\ULRQ
IRUPDWLRQ7KHSRUSK\ULQVIRUPDWHPSODWHIRUWKHIRUPDWLRQRI51$YLURLGV'1$YLURLGV
SULRQV LVRSUHQRLGV DQG SRO\VDFFKDULGHV 7KH\ FDQ V\PELRVH WRJHWKHU WR IRUP SULPLWLYH
DUFKDHD7KHDUFKDHDFDQIXUWKHULQGXFH+,)DOSKDDOGRVHUHGXFWDVHDQGIUXFWRO\VLVUHVXOWLQJ
LQ IXUWKHU SRUSK\ULQRJHQHVLV DQG DUFKDHDO VHOI UHSOLFDWLRQ 7KH DUFKDHD E\ PHWKDQRJHQHVLV
FRQWULEXWHVWRJOREDOZDUPLQJZKLFKOHDGVWRIXUWKHUDUFKDHDOJURZWKDQGDYLFLRXVF\FOHZLWK
QR UHJXODWRU\ VZLWFKHV 7KH IUXFWRO\WLF SDWKZD\ LQGXFHG E\ DUFKDHD E\SDVVHV UHJXODWRU\
HQ]\PHSKRVSKRIUXFWRNLQDVHDQGLVSUDFWLFDOO\XQUHJXODWHG)UXFWRO\WLFSDWKZD\FRQWULEXWHV
WR JO\FRJHQ OLSLGV FKROHVWHURO KH[RVH VXJDUV DQG PXFRSRO\VDFFKDULGHV V\QWKHVLV DQG
VWRUDJH7KLVOHDGVRQWRDKLEHUQDWRU\VWDWHDQGDUFKDHDOV\PELRVLVLQGXFHGVSHFLHVFKDQJH
UHVXOWLQJ LQ QHDQGHUWKDOLVDWLRQ RI WKH KRPR VDSLHQ VSHFLHV 7KH GLJR[LQ DQG IUXFWRVH
SKRVSKRU\ODWLRQ LQGXFHG $73 GHSOHWLRQ OHDGV WR PHPEUDQH VRGLXP SRWDVVLXP $73DVH

LQKLELWLRQVSDULQJRI$73DQGWLVVXHKLEHUQDWLRQDVPRVWRIWKHHQHUJ\QHHGVRIWKHERG\DUH
IRU WKH ZRUNLQJ RI WKH VRGLXP SRWDVVLXP SXPS 7KH FKROHVWHURO WKDW LV V\QWKHVL]HG E\
IUXFWRO\VLVLVFDWDEROL]HGFKROHVWHUROR[LGDVHVIRUDUFKDHDOHQHUJHWLFV$UFKDHDDOVRGHULYHVLWV
HQHUJ\ IURP D SULPLWLYH IRUP RI HOHFWURQ WUDQVSRUW FKDLQ IXQFWLRQLQJ LQ VHOI UHSOLFDWLQJ
SRUSK\ULQDUUD\V7KHDUFKDHDOGLJR[LQLQGXFHGVRGLXPSRWDVVLXP$73DVHLQKLELWLRQFDQOHDG
WR PHPEUDQH $73 V\QWKHVLV 7KH DUFKDHD DQG WKH QHZ KXPDQ VSHFLHV SKHQRW\SH GHULYH LWV
HQHUJ\IURPWKHDERYHPHQWLRQHGPHFKDQLVP7KHJO\FRO\WLFHQ]\PHVDQGWKHPLWRFKRQGULDO
37SRUHKH[RNLQDVHDUHIUXFWRV\ODWHGPDNLQJWKHPG\VIXQFWLRQ7KHIUXFWRV\ODWHGJO\FRO\WLF
HQ]\PHV OHDG WR JHQHUDWLRQ RI DQWLJO\FRO\WLF HQ]\PH DQWLERGLHV DQG GLVHDVH VWDWHV 7KH
KXPDQERG\¶VSULQFLSDOPHWKRGRIHQHUJHWLFVWLVVXHJO\FRO\VLVDQGR[LGDWLYHSKRVSKRU\ODWLRQ
FRPHVWRDJULQGLQJKDOW7KHKXPDQERG\LVWDNHQRYHUE\WKHRYHUJURZWKRIHQGRV\PELRWLF
DUFKDHD DQG DVVXPHV KLEHUQDWRU\ VWDWH ZLWK DFFXPXODWLRQ RI JO\FRJHQ OLSLGV
PXFRSRO\VDFFKDULGHVDQGQXFOHLFDFLGV7KHFDWDEROLFSDWKZD\VIRUHQHUJ\JHQHUDWLRQUHODWHG
WR JOXFRVH JO\FRO\VLV DQG R[SKRV VFKHPH VWRSV 7KH KXPDQ ERG\ FDQ GHSHQG XSRQ
NHWRJHQHVLV IURP IDW DQG SURWHLQV 7KH XSUHJXODWHG IUXFWRO\WLF SDWKZD\ JHQHUDWHV
SKRVSKRJO\FHUDWH ZKLFK FRQYHUWHG WR SKRVSKRVHULQH DQG JO\FLQH 7KH\ FDQ EH FRQYHUWHG WR
RWKHUDPLQRDFLGVDQGXVHGIRUNHWRJHQHVLV7KHERG\DVVXPHVDKLJK%0,LQGH[DQGREHVLW\
ZLWKYLVFHUDOIDWVWRUDJHDQGDGLSRVLW\DNLQWRWKH1HDQGHUWKDOPHWDEROLFSKHQRW\SH'LJR[LQ
LQGXFHGPHPEUDQHVRGLXPSRWDVVLXP$73DVHLQKLELWLRQUHVXOWVLQFRUWLFDOG\VIXQFWLRQ7KH
EUDLQSRUSK\ULQVFDQIRUPDTXDQWDOSXPSHGSKRQRQV\VWHPUHVXOWLQJLQTXDQWDOSHUFHSWLRQ
DQG ORZ OHYHO (0) DEVRUSWLRQ 7KLV OHDGV WR SUHIURQWDO FRUWH[ DWURSK\ DQG FHUHEHOODU
GRPLQDQFH)UXFWRVHLWVHOIOHDGVWRV\PSDWKHWLFK\SHUDFWLYLW\DQGSDUDV\PSDWKHWLFEORFNDGH
7KLVOHDGVRQWRDIXQFWLRQDOIRUPRIFHUHEHOODUFRJQLWLRQDQGTXDQWDOSHUFHSWLRQUHVXOWLQJLQD
QHZEUDLQSKHQRW\SH7KHFHUHEHOODUFRJQLWLYHV\QGURPHOHDGVWRDURERWLFKXPDQSKHQRW\SH
7KHSKHQRW\SHLVLPSXOVLYHKDVH[WUDVHQVRU\SHUFHSWLRQDQGKDVOHVVRIVSHHFKSURGXFWLRQ
&RPPXQLFDWLRQ LV E\ V\PEROLF DFWV 7KH FHUHEHOODU SKHQRW\SH GRHV QRW KDYH D FRUWLFDO
FRQWURO DQG FRQWULEXWHV WR VXUUHDOLVWLF EHKDYLRU SDWWHUQV 7KLV SURGXFHV LPSXOVLYH EHKDYLRU
DQG DQ HSLGHPLF RI VXUUHDOLVP ZKHUH WKH UDWLRQDO SUHIURQWDO FRUWH[ EHFRPHV H[WLQFW 7KLV
OHDGV WR H[WUHPHV RI VSLULWXDOLW\ YLROHQW DQG WHUURULVWLF EHKDYLRU DQG K\SHUVH[XDO VWDWHV
FRQWULEXWLQJ WR D VWDWH RI WUDQVFHQGHQFH XQGHUOLQHG DQG UHLQIRUFHG E\ TXDQWDO SHUFHSWLRQ
&HUHEHOODUSKHQRW\SHRZLQJWRLWVTXDQWDOSHUFHSWLRQEHKDYHVDVDFRPPXQLW\DQGQRWDVDQ
LQGLYLGXDO 7KLV FUHDWHV QHZ VRFLDO DQG SV\FKRORJLFDO SKHQRW\SHV )UXFWRVH LQGXFHV 1).%
DQGLPPXQHDFWLYDWLRQ7KLVUHVXOWVLQDQLPPXQHDFWLYDWRU\SKHQRW\SH&XOWXUHG7UHJFHOOV
RQ KLJK IUXFWRVH GLHW KDYH SHU FHQW OHVV ,/ VHFUHWLRQ WKDQ FRQWUROV 7KLV UHVXOWV LQ D

K\SHULPPXQH VWDWH ZLWK IUXFWRV\ODWHG SURWHLQV DFWLQJ DV DQWLJHQV 7KH IUXFWRO\WLF SDWKZD\
FDQ OHDG WR LQFUHDVHG '1$ V\QWKHVLV DQG 51$ V\QWKHVLV GXH WR IOX[ YLD WKH SHQWRVH
SKRVSKDWHSDWKZD\7KHIUXFWRO\WLFSDWKZD\FDQEHGLUHFWHGWRWKH*$%$VKXQWJHQHUDWLQJ
VXFFLQ\O&R$DQGJO\FLQH7KHVHDUHVXEVWUDWHVIRUSRUSK\ULQWHPSODWHVWRIRUP51$YLURLGV
7KH DUFKDHDO LQGXFHG UHGR[ VWUHVV FDQ LQGXFH HQGRJHQRXV +(59 H[SUHVVLRQ DQG UHYHUVH
WUDQVFULSWDVH H[SUHVVLRQ 7KH 51$ YLURLGV DUH FRQYHUWHG E\ +(59 UHYHUVH WUDQVFULSWDVH WR
FRUUHVSRQGLQJ'1$DQGLQWHJUDWHGLQWRWKHJHQRPHE\+(59LQWHJUDVH7KHLQWHJUDWHG51$
YLURLGUHODWHG'1$FDQIXQFWLRQDVMXPSLQJJHQHVSURGXFLQJJHQRPLFSODVWLFLW\DQGJHQRPLF
FKDQJH7KLVSURGXFHVDQHZJHQRW\SH)UXFWRV\ODWLRQRIERG\SURWHLQVDQGHQ]\PHVUHVXOWV
LQDSURWHLQSURFHVVLQJGHIHFWUHVXOWLQJLQORVVRISURWHLQIXQFWLRQ7KHKXPDQFHOOIXQFWLRQ
GXH WR SURWHLQ IUXFWRV\ODWLRQ SURWHLQ SURFHVVLQJ GHIHFWV DQG SURWHLQ FRQIRUPDWLRQDO GHIHFWV
FRPHV WR D JULQGLQJ KDOW )UXFWRO\WLF SDWKZD\ JHQHUDWHV SRUSK\ULQ DUUD\V LQGXFHG $73
SURGXFWLRQ PHPEUDQH VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ LQGXFHG $73 V\QWKHVLV DQG
IUXFWRO\VLV LQGXFHG $73 JHQHUDWLRQ 7KLV SURYLGHV HQHUJ\ IRU SRUSK\ULQ WHPSODWH LQGXFHG
DUFKDHDO UHSOLFDWLRQ 7KH GLJR[LQ DQG IUXFWRVH SKRVSKRU\ODWLRQ LQGXFHG $73 GHSOHWLRQ
SURGXFHV FHOO PHPEUDQH VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ DQG D KLEHUQDWRU\ VWDWH 7KLV
OHDGV RQWR D VRPQROHQW VOHHS\ VWDWH 7KH FKROHVWHURO FDWDEROLVP E\ FKROHVWHURO R[LGDVHV IRU
DUFKDHDO HQHUJHWLFV OHDGV WR GHIHFWLYH VH[ KRUPRQH V\QWKHVLV 7KLV OHDGV RQWR DQ DVH[XDO
DQGURJ\QRXV VWDWH 7KH FHUHEHOODU FRJQLWLYH V\QGURPH GXH WR SUHIURQWDO FRUWLFDO DWURSK\
FRQVHTXHQW WR SRUSK\ULRQ LQGXFHG ORZ OHYHO (0) SHUFHSWLRQ SURGXFHV D K\SHUVH[XDO VWDWH
7KLVUHVXOWVLQPDOHIHPDOHHTXLGRPLQDQFHDQGFKDQJHVLQVH[XDOEHKDYLRURIWKHSRSXODWLRQ
7KXVWKHIUXFWRVHGLVHDVHFRQVHTXHQWWRJOREDOZDUPLQJUHVXOWVLQDQHZQHXURQDOLPPXQH
PHWDEROLF VH[XDO DQG VRFLDO SKHQRW\SH 7KH KXPDQ ERG\ LV FRQYHUWHG WR D ]RPELH IRU WKH
JOREDOZDUPLQJUHODWHGHQGRV\PELRWLFDUFKDHDWRWKULYH7KHQHXURQDOPHWDEROLFVH[XDODQG
VRFLDO SKHQRW\SH FUHDWHV WKH QHFHVVDU\ HQYLURQPHQW HQGRV\PELRWLF DUFKDHDO PXOWLSOLFDWLRQ
DQGWKHKXPDQERG\LVFRQYHUWHGWRD]RPELHSKHQRW\SH7KLVFDQEHFDOOHGDVDKLEHUQDWRU\
]RPELH V\QGURPH 'XH WR WKH QHZ VH[XDO DQG VRFLDO SKHQRW\SH ZLWK DVH[XDOLW\ DQG
K\SHUVH[XDOLW\ DQG IHPDOHPDOH HTXLGRPLQDQFH WKH KXPDQ SRSXODWLRQ IDOOV 7KH JOREDO
ZDUPLQJ DQG DUFKDHDO LQGXFWLRQ RI +,) DOSKD UHVXOWLQJ LQ WKH :DUEXUJ SKHQRW\SH OHDGV WR
FKDQJHV LQ WKH PHWDEROLF VFKHPH RI WKH FHOOV SURGXFLQJ ERG\ FHOO WUDQVIRUPDWLRQ WR VWHP
FHOOV 7KH VWHP FHOOV GHSHQG XSRQ JO\FRO\VLV RU IUXFWRO\VLV IRU HQHUJ\ QHHGV 7KH :DUEXUJ
SKHQRW\SHSURGXFHVDQDFLGLFS+ZKLFKFDQUHVXOWLQFRQYHUVLRQRIERG\FHOOVWRVWHPFHOOV
7KH VWHP FHOOV FRQYHUVLRQ UHVXOWV LQ ORVV RI WLVVXH IXQFWLRQ 7KH FHUHEUDO FRUWH[ V\QDSWLF
FRQQHFWLYLW\ LV ORVW DQG EHFRPHV G\VIXQFWLRQ OHDGLQJ WR VXEFRUWLFDO FHUHEHOODU GRPLQDQFH

7KHLPPXQHVWHPFHOOVSUROLIHUDWHSURGXFLQJDQDXWRLPPXQHGLVHDVH7KHYDULRXVWLVVXHFHOOV
WKH VSHFLDOL]HG IXQFWLRQ OLNH QHXURQ QHSKURQ DQG PXVFOH FHOO DOO EHFDXVH RI VWHP FHOO
FRQYHUVLRQEHFRPHVG\VIXQFWLRQDO7KLVSURGXFHVDVWHPFHOOV\QGURPHZLWKKXPDQVRPDWLF
FHOOVEHLQJFRQYHUWHGWRVWHPFHOOVZLWKORVVRIIXQFWLRQDQGXQFRQWUROOHGSUROLIHUDWLRQ7KH
IUXFWRV\ODWLRQ RI SURWHLQV UHVXOWV LQ SURWHLQ IXQFWLRQ GHIHFWV 7KH IUXFWRV\ODWLRQ RI /'/
UHVXOWV LQ GHIHFWLYH FKROHVWHURO WUDQVSRUW WR WKH FHOOV 7KLV UHVXOWV LQ VWHURLGDO KRUPRQH
V\QWKHVLVGHIHFWV&KROHVWHUROLVUHTXLUHGIRUIRUPDWLRQRIV\QDSWLFFRQQHFWLYLW\DQGWKLVOHDGV
WRFHUHEUDOFRUWLFDOG\VIXQFWLRQ7KHKHPRJORELQEHFRPHVIUXFWRV\ODWHGDQGR[\JHQWUDQVSRUW
LV DIIHFWHG 7KLV OHDGV WR K\SR[LD DQG DQHURELF VWDWHV 7KH K\SR[LD DQG DQHURELF VWDWHV
LQGXFHV+,)DOSKDDQGWKH:DUEXUJIUXFWRO\WLFSKHQRW\SH7KH+,)DOSKDDOVRLQGXFHVDOGRVH
UHGXFWDVHFRQYHUWLQJJOXFRVHWRIUXFWRVHDQGLQGXFLQJWKHIUXFWRO\WLFVFKHPH7KHIUXFWRO\VLV
LQGXFHG*$%$VKXQWSDWKZD\DQGSRUSK\ULQV\QWKHVLVUHVXOWVLQIXUWKHUDUFKDHDOSRUSK\ULQ
WHPSODWH UHODWHG UHSOLFDWLRQ 7KLV UHVXOWV LQ IXUWKHU DUFKDHDO LQGXFHG IUXFWRO\VLV DQG WKH
YLFLRXVLUUHYHUVLEOHF\FOHSURFHHGV7KHXQFRQWUROOHGJURZWKRIDUFKDHDOHDGVWRVWLOOIXUWKHU
JOREDOZDUPLQJ7KHZRUOGRIHQGRV\PELRWLFHWHUQDODUFKDHDWDNHVRYHUDQGSHUVLVWVGXULQJ
WKH H[WUHPRSKLOLF FOLPDWLF FKDQJHV RI JOREDO ZDUPLQJ 7KH KXPDQ EHLQJV H[LVW DV
QHDQGHUWKDOLF]RPELHVVHUYLQJDUFKDHDOPXOWLSOLFDWLRQ7KHKRPRVDSLHQVJHWVFRQYHUWHGWRD
QHZSKHQRW\SHJHQRW\SHLPPXQRW\SHPHWDERORQRPLFW\SHDQGEUDLQW\SH7KLVLVFDOOHGDV
KLEHUQDWRU\]RPELHUHODWHGWRJOREDOZDUPLQJKRPRQHRQHDQGHUWKDOLV

7DEOH)UXFWRVHPHWDEROLVPLQGLVHDVHVWDWHV
6HUXP
6HUXPIUXFWRVH $OGRODVH% 7RWDO*$*
*URXS IUXFWRNLQDVH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6\;
&$'
&9$
'&0(0)
7XPRXU
6FKL]R
$XWLVP
$'
3'
06
/XSXV
&5)
,/'
&23'
%$
&LUUKRVLV
,%'
0$2
,%6
38'
(0)
&&3
01*
0XF$1*
'%-'
6SRQG\ORVLV
)YDOXH
SYDOXH

7DEOH3DUDPHWHUVRIIUXFWRVHGLVHDVH
6HUXP$73
7RWDO7* 8ULFDFLG $QWLDOGRODVH
*URXS OHYHOV
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6\;
&$'
&9$
'&0(0)
7XPRXU
6FKL]R
$XWLVP
$'
3'
06
/XSXV
&5)
,/'
&23'
%$
&LUUKRVLV
,%'
0$2
,%6
38'
(0)
&&3
01*
0XF$1*
'%-'
6SRQG\ORVLV
)YDOXH
SYDOXH

7DEOH$QWLJO\FRO\WLFDQWLERGLHV
$QWL
$QWLHQRODVH $QWL*$3'+
*URXS S\UXYDWHNLQDVH
0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6\;
&$'
&9$
'&0(0)
7XPRXU
6FKL]R
$XWLVP
$'
3'
06
/XSXV
&5)
,/'
&23'
%$
&LUUKRVLV
,%'
0$2
,%6
38'
(0)
&&3
01*
0XF$1*
'%-'
6SRQG\ORVLV
)YDOXH
SYDOXH

5HIHUHQFHV
.XUXS 5. .XUXS 3$ *OREDO :DUPLQJ $UFKDHD DQG 9LURLG ,QGXFHG 6\PELRWLF
+XPDQ(YROXWLRQDQGWKH)UXFWRVRLG2UJDQHOOH1HZ<RUN2SHQ6FLHQFH

&+$37(5
$1(:+80$163(&,(6&/,0$7(&+$1*(*/2%$/:$50,1*$1'
1(21($1'(57+$/67+($*(2)+2021(21($1'(57+$/,6
,QWURGXFWLRQ
$FWLQLGLFDUFKDHDKDVEHHQUHODWHGWRJOREDOZDUPLQJDQGKXPDQGLVHDVHVHVSHFLDOO\
DXWRLPPXQHGLVHDVHQHXURGHJHQHUDWLRQQHXURSV\FKLDWULFGLVRUGHUQHRSODVPDQGPHWDEROLF
V\QGURPH;7KHJURZWKRIHQGRV\PELRWLFDFWLQLGLFDUFKDHDLQUHODWLRQWRFOLPDWHFKDQJHDQG
JOREDO ZDUPLQJ OHDGV WR QHDQGHUWKDOLVDWLRQ RI WKH KXPDQ PLQGERG\ V\VWHP 1HDQGHUWKDO
DQWKURSRPHWU\ DQG PHWDERORQRPLFV KDV EHHQ GHVFULEHG LQ DXWRLPPXQH GLVHDVH
QHXURGHJHQHUDWLRQ QHXURSV\FKLDWULF GLVRUGHU QHRSODVP DQG PHWDEROLF V\QGURPH ;
HVSHFLDOO\ WKH :DUEXUJ SKHQRW\SH DQG K\SHUGLJR[LQHPLD 'LJR[LQ SURGXFHG E\ DUFKDHDO
FKROHVWHUROFDWDEROLVPSURGXFHVQHDQGHUWKDOLVDWLRQ3UHIURQWDOFRUWLFDODWURSK\DQGFHUHEHOODU
K\SHUSODVLD KDV EHHQ UHODWHG WR DXWRLPPXQH GLVHDVH QHXURGHJHQHUDWLRQ QHXURSV\FKLDWULF
GLVRUGHU QHRSODVP DQG PHWDEROLF V\QGURPH ; LQ WKLV FRPPXQLFDWLRQ 7KLV OHDGV RQ WR
G\VDXWRQRPLD ZLWK V\PSDWKHWLF K\SHUDFWLYLW\ DQG SDUDV\PSDWKHWLF QHXURSDWK\ LQ WKHVH
GLVRUGHUV $FWLQLGLF DUFKDHDO UHODWHG FHUHEHOODU GRPLQDQFH OHDGV WR FKDQJHV LQ EUDLQ
IXQFWLRQ7KHGDWDLVGHVFULEHGLQWKLVSDSHU
0DWHULDOVDQG0HWKRGV
)LIWHHQ FDVHV HDFK RI DXWRLPPXQH GLVHDVH QHXURGHJHQHUDWLRQ QHXURSV\FKLDWULF
GLVRUGHUQHRSODVPPHWDEROLFV\QGURPH;DQGLQWHUQHWDGGLFWVZHUHVHOHFWHGIRUWKHVWXG\
(DFKFDVHKDGDQDJHDQGVH[PDWFKHGFRQWURO1HDQGHUWKDODQWKURSRPHWULFDQGSKHQRW\SLF
PHDVXUHPHQWV ZKLFK LQFOXGHG SURWUXGLQJ VXSUDRUELWDO ULGJHV GROLFKRFHSKDOLF VNXOO VPDOO
PDQGLEOHSURPLQHQWPLGIDFHDQGQRVHVKRUWXSSHUDQGORZHUOLPEVSURPLQHQWWUXQNORZ
LQGH[ ILQJHUULQJ ILQJHU UDWLR DQG IDLU FRPSOH[LRQ ZHUH HYDOXDWHG LQ WKH FDVHV VWXG\
$XWRQRPLFIXQFWLRQWHVWVZHUHGRQHWRDVVHVVWKHV\PSDWKHWLFDQGSDUDV\PSDWKHWLFV\VWHPLQ
HDFKFDVH&7VFDQRIWKHKHDGZDVGRQHWRKDYHDYROXPHWULFDVVHVVPHQWRIWKHSUHIURQWDO
FRUWH[DQGFHUHEHOOXP%ORRGF\WRFKURPH)DFWLYLW\ZDVDVVHVVHGE\VSHFWURSKRWRPHWULF
PHDVXUHPHQW

5HVXOWV
$OOWKHFDVHJURXSVVWXGLHGKDGKLJKHUSHUFHQWDJHRI1HDQGHUWKDODQWKURSRPHWULFDQG
SKHQRW\SLF PHDVXUHPHQWV 7KHUH ZDV ORZ LQGH[ ILQJHUULQJ ILQJHU UDWLR VXJJHVWLYH RI KLJK

WHVWRVWHURQHOHYHOVLQDOOWKHSDWLHQWSRSXODWLRQVWXGLHG,QDOOWKHFDVHJURXSVVWXGLHGWKHUH
DOVR ZDV SUHIURQWDO FRUWH[ DWURSK\ DQG FHUHEHOODU K\SHUSODVLD 6LPLODUO\ LQ WKH DOO WKH FDVH
JURXSV VWXGLHG WKHUH ZDV G\VDXWRQRPLD ZLWK V\PSDWKHWLF RYHUDFWLYLW\ DQG SDUDV\PSDWKHWLF
QHXURSDWK\ &\WRFKURPH ) ZDV GHWHFWHG LQ WKH HQWLUH FDVH JURXS VWXGLHG VKRZLQJ
HQGRV\PELRWLFDUFKDHDORYHUJURZWK
7DEOH1HDQGHUWKDOSKHQRW\SHDQGV\VWHPLFGLVHDVH
/RZLQGH[
1HDQGHUWKDO
'LVHDVH &\W) ILQJHUULQJ
SKHQRW\SH
ILQJHUUDWLR
6FKL]RSKUHQLD
$XWLVP
$O]KHLPHU¶VGLVHDVH
3DUNLQVRQ¶VGLVHDVH
1RQ+RGJNLQ¶V

O\PSKRPD
0XOWLSOHP\HORPD
'LDEHWHV PHOOLWXV ZLWK

VWURNHDQG&$'
6/(/XSXV
0XOWLSOHVFOHURVLV
,QWHUQHWXVHUV

7DEOH1HDQGHUWKDOSKHQRW\SHDQGEUDLQG\VIXQFWLRQ
3UHIURQWDO
&HUHEHOODU
'LVHDVH '\VDXWRQRPLD FRUWH[
K\SHUWURSK\
DWURSK\
6FKL]RSKUHQLD
$XWLVP
$O]KHLPHU¶VGLVHDVH
3DUNLQVRQ¶VGLVHDVH
1RQ+RGJNLQ¶V

O\PSKRPD
0XOWLSOHP\HORPD
'LDEHWHV PHOOLWXV ZLWK

VWURNHDQG&$'
6/(/XSXV
0XOWLSOHVFOHURVLV
,QWHUQHWXVHUV

'LVFXVVLRQ
*OREDOZDUPLQJQHDQGHUWKDOLVDWLRQDQGPLQGERG\V\VWHP
1HDQGHUWKDOPHWDERORQRPLFVFRQWULEXWHWRWKHSDWKRJHQHVLVRIWKHVHGLVRUGHUV7KHUH
ZHUH 1HDQGHUWKDO SKHQRW\SLF IHDWXUHV LQ DOO WKH FDVH JURXSV VWXGLHG DV ZHOO DV ORZ LQGH[
ILQJHUULQJILQJHUUDWLRVVXJJHVWLYHRILQFUHDVHGWHVWRVWHURQHOHYHOV1HDQGHUWKDOLVDWLRQRIWKH
PLQGERG\V\VWHPRFFXUVGXHWRLQFUHDVHGJURZWKRIDFWLQLGLFDUFKDHDDVDFRQVHTXHQFHRI
JOREDOZDUPLQJ1HDQGHUWKDOLVDWLRQRIWKHPLQGOHDGVWRFHUHEHOODUGRPLQDQFHDQGSUHIURQWDO
FRUWH[ DWURSK\ 7KLV OHDGV WR G\VDXWRQRPLD ZLWK SDUDV\PSDWKHWLF QHXURSDWK\ DQG
V\PSDWKHWLFK\SHUDFWLYLW\
*OREDO ZDUPLQJ DQG WKH LFH DJH SURGXFHV LQFUHDVHG JURZWK RI H[WUHPRSKLOHV 7KLV
OHDGVWRLQFUHDVHGJURZWKRIDFWLQLGLFDUFKDHDOHQGRV\PELRVLVLQKXPDQV7KHUHLVDUFKDHDO
SUROLIHUDWLRQ LQ WKH JXW ZKLFK HQWHUV WKH FHUHEHOOXP DQG EUDLQ VWHP E\ UHYHUVH D[RQDO
WUDQVSRUW YLD WKH YDJXV 7KH FHUHEHOOXP DQG EUDLQ VWHP FDQ EH FRQVLGHUHG DV DQ DUFKDHDO
FRORQ\7KHDUFKDHDDUHFKROHVWHUROFDWDEROLVLQJDQGXVHFKROHVWHURODVDFDUERQDQGHQHUJ\
VRXUFH 7KH DFWLQLGLF DUFKDHD DFWLYDWHV WKH WROO UHFHSWRU +,) DOSKD LQGXFLQJ WKH :DUEXUJ
SKHQRW\SH UHVXOWLQJ LQ LQFUHDVHG JO\FRO\VLV ZLWK JHQHUDWLRQ RI JO\FLQH DV ZHOO DV S\UXYDWH
GHK\GURJHQDVHVXSSUHVVLRQ7KHDFFXPXODWHGS\UXYDWHHQWHUVWKH*$%$VKXQWJHQHUDWLQJRI
VXFFLQ\O &R$ DQG JO\FLQH 7KH DUFKDHDO FDWDEROLVP RI FKROHVWHURO SURGXFHV ULQJ R[LGDWLRQ
DQGJHQHUDWLRQRIS\UXYDWHZKLFKDOVRHQWHUVWKH*$%$VKXQWVFKHPHSURGXFLQJJO\FLQHDQG
VXFFLQ\O &R$ 7KLV OHDGV WR LQFUHDVHG V\QWKHVLV RI SRUSK\ULQV ,Q WKH VHWWLQJ RI GLJR[LQ
LQGXFHG VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ WKH GLSRODU SRUSK\ULQV SURGXFH D SXPSHG
SKRQRQ V\VWHP UHVXOWLQJ LQ WKH )URKOLFK PRGHO %RVH(LQVWHLQ FRQGHQVDWH DQG TXDQWDO
SHUFHSWLRQ RI ORZ OHYHO (0) /RZ OHYHO (0) SROOXWLRQ LV FRPPRQ ZLWK LQWHUQHW XVDJH
3HUFHSWLRQRIORZOHYHORI(0)OHDGVWRQHDQGHUWKDOLVDWLRQRIWKHEUDLQZLWKSUHIURQWDOFRUWH[
DWURSK\DQGFHUHEHOODUK\SHUSODVLD7KHDUFKDHDZKLFKUHDFKHVWKHFHUHEHOOXPIURPWKHJXW
YLD WKH YDJXV QHUYH SUROLIHUDWHV DQG PDNHV WKH FHUHEHOOXP GRPLQDQW ZLWK UHVXOWDQW
VXSSUHVVLRQ DQG DWURSK\ RI WKH SUHIURQWDO FRUWH[ 7KLV OHDGV WR ZLGHVSUHDG DXWLVWLF DQG
VFKL]RSKUHQLFWUDLWVLQSRSXODWLRQ7KHDFWLQLGLFDUFKDHDLQGXFHVWKH:DUEXUJSKHQRW\SHZLWK
LQFUHDVHG JO\FRO\VLV 3'+ LQKLELWLRQ DQG PLWRFKRQGULDO VXSSUHVVLRQ 7KLV SURGXFHV
QHDQGHUWKDOLVDWLRQ RI WKH PLQGERG\ V\VWHP 7KH DFWLQLGLF DUFKDHD VHFUHWHV 51$ YLURLGV
ZKLFKEORFN+(59H[SUHVVLRQE\51$LQWHUIHUHQFH7KH+(59VXSSUHVVLRQFRQWULEXWHVWR
WKH LQKLELWLRQ RI SUHIURQWDO FRUWH[ GHYHORSPHQW LQ 1HDQGHUWKDOV DQG FHUHEHOODU GRPLQDQFH
$UFKDHDO GLJR[LQ SURGXFHV VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ DQG PDJQHVLXP GHSOHWLRQ

FDXVLQJ UHYHUVH WUDQVFULSWDVH LQKLELWLRQ DQG GHFUHDVHG JHQHUDWLRQ RI +(59 7KH +(59
FRQWULEXWHV WR WKH G\QDPLFLW\ RI WKH JHQRPH DQG DUH UHTXLUHG IRU WKH GHYHORSPHQW RI WKH
SUHIURQWDOFRUWH[7KH+(59VXSSUHVVLRQFRQWULEXWHVWRUHWURYLUDOUHVLVWDQFHLQ1HDQGHUWKDOV
7KHDFWLQLGLFDUFKDHDFDWDEROLVHVFKROHVWHUROOHDGLQJWRFKROHVWHUROGHSOHWHGVWDWH&KROHVWHURO
GHSOHWLRQ DOVR OHDGV WR SRRU V\QDSWLF FRQQHFWLYLW\ DQG GHFUHDVHG GHYHORSPHQW RI SUHIURQWDO
FRUWH[ 7KLV LV QRW JHQHWLF FKDQJH EXW D IRUP RI V\PELRWLF FKDQJH ZLWK HQGRV\PELRWLF
DFWLQLGLFDUFKDHDOJURZWKLQWKHERG\DQGEUDLQ

(QGRV\PELRWLFDUFKDHDLQWHUQHWXVHDQGEUDLQIXQFWLRQQHDQGHUWKDOLVDWLRQ
,QWHUQHWXVHDQGORZOHYHO(0)SROOXWLRQLVFRPPRQLQWKLVFHQWXU\7KLVUHVXOWVLQ
LQFUHDVHGORZOHYHO(0)SHUFHSWLRQE\WKHEUDLQE\WKHGLJR[LQSRUSK\ULQPHGLDWHGSXPSHG
SKRQRQ V\VWHP FUHDWHG %RVH(LQVWHLQ FRQGHQVDWHV FRQWULEXWLQJ WR SUHIURQWDO FRUWH[ DWURSK\
DQGFHUHEHOODUGRPLQDQFH&HUHEHOODUGRPLQDQFHOHDGVWRVFKL]RSKUHQLDDQGDXWLVP7KHUHLV
DQ HSLGHPLF RI DXWLVP DQG VFKL]RSKUHQLD LQ WKH SUHVHQW GD\ FRPPXQLW\ 7KH SRUSK\ULQ
PHGLDWHG H[WUDVHQVRU\ SHUFHSWLRQ FDQ FRQWULEXWH WR FRPPXQLFDWLRQ DPRQJ 1HDQGHUWKDOV
1HDQGHUWKDOV GLG QRW KDYH D ODQJXDJH DQG XVHG H[WUDVHQVRU\SHUFHSWLRQDVDIRUPRIJURXS
FRPPXQLFDWLRQ%HFDXVHRIGRPLQDQWH[WUDVHQVRU\TXDQWDOSHUFHSWLRQWKH1HDQGHUWKDOVGLG
QRW KDYH LQGLYLGXDO LGHQWLW\ EXW RQO\ JURXS LGHQWLW\ &HUHEHOODU GRPLQDQFH UHVXOWV LQ
FUHDWLYLW\ FRQVHTXHQW WR TXDQWDO SHUFHSWLRQ DQG JURXS SHUFHSWLRQ 7KH 1HDQGHUWKDOLF WUDLWV
FRQWULEXWH WR LQQRYDWLRQ DQG FUHDWLYLW\ &HUHEHOODU GRPLQDQFH UHVXOWV LQ GHYHORSPHQW RI D
V\PEROLF ODQJXDJH 7KH 1HDQGHUWKDOV XVHG GDQFH DQG PXVLF DV D IRUP RI FRPPXQLFDWLRQ
3DLQWLQJ DV D IRUP RI FRPPXQLFDWLRQ ZDV DOVR FRPPRQ LQ 1HDQGHUWKDOV 1HDQGHUWKDO
EHKDYLRXUZDVURERWLF5RERWLFEHKDYLRXULVFKDUDFWHULVWLFRIFHUHEHOODUGRPLQDQFH5RERWLF
V\PEROLF DQG ULWXDOLVWLF EHKDYLRXU LV FRPPRQ ZLWK FHUHEHOODU GRPLQDQFH DQG LV VHHQ LQ
DXWLVWLFWUDLWV7KHFHUHEHOODUGRPLQDQFHLQ1HDQGHUWKDOVOHDGVWRLQWXLWLYHLQWHOOLJHQFHDQGD
K\SQRWLF TXDOLW\ WR FRPPXQLFDWLRQ 7KH LQFUHDVHG H[WUDVHQVRU\ TXDQWDO SHUFHSWLRQ OHDGV WR
PRUHFRPPXQLRQZLWKQDWXUHDQGDIRUPRIHFRVSLULWXDOLW\7KHLQFUHDVLQJXVHRIGDQFHDQG
PXVLF DV D IRUP RI FRPPXQLFDWLRQ DQG HFRVSLULWXDOLW\ LV FRPPRQ LQ WKH PRGHUQ FHQWXU\
DORQJ ZLWK LQFUHDVHG LQFLGHQFH RI DXWLVP 7KH FKROHVWHURO GHSOHWLRQ OHDGV WR ELOH DFLG
GHILFLHQF\DQGJHQHUDWLRQRIVPDOOVRFLDOJURXSVLQ1HDQGHUWKDOV%LOHDFLGELQGVWRROIDFWRU\
UHFHSWRUV DQG FRQWULEXWHV WR JURXS LGHQWLW\ 7KLV FDQ DOVR FRQWULEXWHV WR WKH JHQHUDWLRQ RI
DXWLVWLFIHDWXUHVLQ1HDQGHUWKDOV

*OREDOZDUPLQJQHDQGHUWKDOLVDWLRQDQGVRFLDOEHKDYLRXU
7KH 1HDQGHUWKDO SRSXODWLRQ ZDV SUHGRPLQDQWO\ DXWLVWLF DQG VFKL]RSKUHQLF 7KH
PRGHUQSRSXODWLRQLVDK\EULGRI+RPRVDSLHQVDQG+RPRQHDQGHUWKDOLV7KLVFRQWULEXWHVWR
WRSHUFHQWGRPLQDQWK\EULGVZKRWHQGWRKDYHVFKL]RSKUHQLFDQGDXWLVWLFTXDOLWLHVDQG
FRQWULEXWHVWRFUHDWLYLW\RIFLYLOL]DWLRQ7KH1HDQGHUWKDOVWHQGWREHLQQRYDWLYHDQGFKDRWLF
7KH\WHQGWREHFUHDWLYHLQDUWOLWHUDWXUHGDQFHVSLULWXDOLW\DQGVFLHQFH(LJKW\SHUFHQWRI
OHVVGRPLQDQWK\EULGVDUHVWDEOHDQGFRQWULEXWHWRDVWDELOL]LQJLQIOXHQFHOHDGLQJWRJURZWKRI
FLYLOL]DWLRQ 7KH KRPR VDSLHQV ZHUH VWDEOH DQG QRQFUHDWLYH RYHU D ORQJ SHULRG RI WKHLU
H[LVWHQFH 7KHUH ZDV D EXUVW RI FUHDWLYLW\ ZLWK JHQHUDWLRQ RI PXVLF GDQFH SDLQWLQJ
RUQDPHQWVWKHFUHDWLRQRIFRQFHSWRI*RGDQGFRPSDVVLRQDWHJURXSEHKDYLRXUDURXQG
\HDUVDJRLQWKHKRPRVDSLHQVFRPPXQLW\7KLVFRUUHODWHGZLWKWKHJHQHUDWLRQRI1HDQGHUWKDO
K\EULGVZKHQWKH(XUDVLDQ1HDQGHUWKDOPDOHPDWHGZLWKKRPRVDSLHQV$IULFDQIHPDOHV7KH
H[WUDVHQVRU\TXDQWDO SHUFHSWLRQ GXH WR GLSRODU SRUSK\ULQV DQG GLJR[LQ LQGXFHG VRGLXP
SRWDVVLXP $73DVH LQKLELWLRQ DQG WKH JHQHUDWHG SXPSHG SKRQRQ V\VWHP PHGLDWHG TXDQWDO
SHUFHSWLRQ OHDGV WR WKH JOREDOLVDWLRQ SKHQRPHQD DQG IHHOLQJ RI WKH ZRUOG EHLQJ D JOREDO
YLOODJH7KHDUFKDHDOFKROHVWHUROFDWDEROLVPOHDGVWRLQFUHDVHGV\QWKHVLVRIGLJR[LQ'LJR[LQ
SURPRWHV WU\SWRSKDQ WUDQVSRUW RYHU W\URVLQH 7\URVLQH GHILFLHQF\ OHDGV WR GRSDPLQH
GHILFLHQF\ DQG PRUSKLQH GHILFLHQF\ 7KLV OHDGV WR D PRUSKLQH GHILFLHQF\ V\QGURPH LQ
1HDQGHUWKDOV 7KLV FRQWULEXWHV WR DGGLFWLRQ WUDLWV DQG FUHDWLYLW\ 7KH LQFUHDVHG WU\SWRSKDQ
OHYHOV SURGXFH LQFUHDVHG DONDORLGV OLNH /6' FRQWULEXWLQJ WR HFVWDV\ DQG VSLULWXDOLW\ RI
1HDQGHUWKDOSRSXODWLRQ$GGLFWLYH$'+'DQGDXWLVWLFIHDWXUHVDUHUHODWHGWRWKHPRUSKLQH
GHILFLHQF\ VWDWH 7KH NHWRJHQLF GLHW FRQVXPHG E\ WKH PHDW HDWLQJ 1HDQGHUWKDOV OHDGV RQ WR
LQFUHDVHGJHQHUDWLRQRIK\GUR[\EXW\ULFDFLGZKLFKSURGXFHVHFVWDV\DQGDGLVVRFLDWLYHW\SH
RIDQDHVWKHVLDFRQWULEXWLQJWRWKH1HDQGHUWKDOSV\FKRORJ\7KHGRSDPLQHGHILFLHQF\OHDGVWR
GHFUHDVHGPHODQLQV\QWKHVLVDQGIDLUQHVVRIWKHSRSXODWLRQ7KLVZDVUHVSRQVLEOHIRUWKHIDLU
FRORXURIWKH1HDQGHUWKDOV

*OREDOZDUPLQJQHDQGHUWKDOLVDWLRQDQG:DUEXUJSKHQRW\SH
7KH1HDQGHUWKDOVZHUHHVVHQWLDOO\PHDWHDWHUVWDNLQJDNHWRJHQLFGLHW7KHDFHWRDFHWLF
DFLGLVFRQYHUWHGWRDFHW\O&R$ZKLFKHQWHUVWKH7&$F\FOH:KHQWKH1HDQGHUWKDOK\EULGV
FRQVXPH D JOXFRJHQLF GLHW RZLQJ WR WKH VSUHDG RI VHWWOHG FLYLOL]DWLRQ LW SURGXFHV S\UXYDWH
DFFXPXODWLRQ RZLQJ WR 3'+ VXSSUHVVLRQ LQ 1HDQGHUWKDOV 7KH LQFUHDVHG DUFKDHDO JURZWK
DFWLYDWHV WKH WROO UHFHSWRU DQG LQGXFHV +,) DOSKD UHVXOWLQJ LQ LQFUHDVHG JO\FRO\VLV 3'+
VXSSUHVVLRQDQGPLWRFKRQGULDOG\VIXQFWLRQWKH:DUEXUJSKHQRW\SH7KHS\UXYDWHHQWHUVWKH

*$%$ VKXQW SDWKZD\ SURGXFLQJ JOXWDPDWH DPPRQLD DQG SRUSK\ULQV UHVXOWLQJ LQ
QHXURSDWKRORJ\ RI DXWLVP DQG VFKL]RSKUHQLD 1HDQGHUWKDOV FRQVXPLQJ D NHWRJHQLF GLHW
SURGXFHVPRUHRI*$%$DQLQKLELWRU\QHXURWUDQVPLWWHUUHVXOWLQJLQWKHGRFLOHTXLHWQDWXUHRI
WKH 1HDQGHUWKDOV 7KHUH LV OHVV SURGXFWLRQ RI JOXWDPDWH WKH SUHGRPLQDQW H[FLWDWRU\
QHXURWUDQVPLWWHU RI WKH SUHIURQWDO FRUWH[ DQG FRQVFLRXVQHVV SDWKZD\V 7KLV OHDGV RQ WR
GRPLQDQFH RI FHUHEHOODU IXQFWLRQ 7KH 1HDQGHUWKDO K\EULGV KDYH FHUHEHOODU GRPLQDQFH DQG
OHVV RI FRQVFLRXVEHKDYLRXU&HUHEHOOXPLVUHVSRQVLEOH IRU LQWXLWLYH XQFRQVFLRXVEHKDYLRXU
DV ZHOO DV FUHDWLYLW\ DQG VSLULWXDOLW\ 7KH FHUHEHOOXP LV WKH VLWH RI H[WUDVHQVRU\ SHUFHSWLRQ
PDJLFDODFWVDQGK\SQRVLV7KHSUHGRPLQDQWKRPRVDSLHQVKDGSUHIURQWDOFRUWH[GRPLQDQFH
RYHUWKHFHUHEHOOXPUHVXOWLQJLQPRUHRIFRQVFLRXVEHKDYLRXU
7KH 1HDQGHUWKDOV FRQVXPLQJ D JOXFRJHQLF GLHW SURGXFHV LQFUHDVHG JO\FRO\VLV LQ WKH
VHWWLQJ RI 3'+ LQKLELWLRQ 7KLV SURGXFHV WKH :DUEXUJ SKHQRW\SH 7KHUH LV LQFUHDVHG
O\PSKRF\WLF JO\FRO\VLV SURGXFLQJ DXWRLPPXQH GLVHDVHV DQG LPPXQH DFWLYDWLRQ 7KH
LQFUHDVHG OHYHOV RI *$3' UHVXOW LQ QXFOHDU FHOO GHDWK DQG QHXURGHJHQHUDWLRQ 7KH
SUHGRPLQDQFH RI JO\FRO\VLV DQG VXSSUHVVLRQ RI PLWRFKRQGULDO IXQFWLRQ UHVXOWV LQ JO\FHPLD
DQG PHWDEROLF V\QGURPH ; 7KH LQFUHDVHG PLWRFKRQGULDO 37 SRUH KH[RNLQDVH OHDGV WR FHOO
SUROLIHUDWLRQ DQG RQFRJHQHVLV 7KH JO\FRO\WLF LQWHUPHGLDWH SKRVSKRJO\FHUDWH LV FRQYHUWHG
WR JO\FLQH UHVXOWLQJ LQ 10'$ H[FLWRWR[LFLW\ FRQWULEXWLQJ WR VFKL]RSKUHQLD DQG DXWLVP
&HUHEHOODUGRPLQDQFHLVUHSRUWHGLQVFKL]RSKUHQLDDQGDXWLVP

1HDQGHUWKDOLVDWLRQDQGDXWRQRPLFG\VIXQFWLRQ
7KH FHUHEHOODU K\SHUSODVLD UHVXOWV LQ V\PSDWKHWLF K\SHUDFWLYLW\ DQG SDUDV\PSDWKHWLF
QHXURSDWK\7KLVFRQWULEXWHVWRFHOOSUROLIHUDWLRQDQGRQFRJHQHVLV9DJDOQHXURSDWK\UHVXOWV
LQ LPPXQH DFWLYDWLRQ DQG DXWRLPPXQH GLVHDVH 9DJDO QHXURSDWK\ DQG V\PSDWKHWLF
RYHUDFWLYLW\ FDQ FRQWULEXWH WR JO\FRJHQRO\VLV DQG OLSRO\VLV UHVXOWLQJ LQ PHWDEROLF V\QGURPH
; &HUHEHOODU GRPLQDQFH DQG FHUHEHOODU FRJQLWLYH DIIHFWLYH G\VIXQFWLRQ FDQ FRQWULEXWH WR
VFKL]RSKUHQLD DQG DXWLVP 7KH LQFUHDVHG SRUSK\ULQ V\QWKHVLV UHVXOWLQJ IURP VXFFLQ\O &R$
JHQHUDWHG E\ *$%$ VKXQW DQG JO\FLQH JHQHUDWHG E\ JO\FRO\VLV FRQWULEXWHV WR LQFUHDVHG
H[WUDVHQVRU\SHUFHSWLRQLPSRUWDQWLQVFKL]RSKUHQLDDQGDXWLVP6\PSDWKHWLFRYHUDFWLYLW\DQG
SDUDV\PSDWKHWLFQHXURSDWK\FDQFRQWULEXWHWRQHXURGHJHQHUDWLRQ

'LJR[LQWKH1HDQGHUWKDOKRUPRQH
7KH DUFKDHDO FKROHVWHURO FDWDEROLVP JHQHUDWHV GLJR[LQ ZKLFK SURGXFHV VRGLXP
SRWDVVLXP $73DVH LQKLELWLRQ DQG LQFUHDVH LQ LQWUDFHOOXODU FDOFLXP DQG GHFUHDVH LQ
LQWUDFHOOXODUPDJQHVLXP7KHLQFUHDVHLQLQWUDFHOOXODUFDOFLXPSURGXFHVRQFRJHQHDFWLYDWLRQ
DQG 1).% DFWLYDWLRQ UHVXOWLQJ LQ PDOLJQDQFLHV DQG DXWRLPPXQH GLVHDVHV 7KH LQFUHDVH LQ
LQWUDFHOOXODU FDOFLXP RSHQV WKH PLWRFKRQGULDO 37 SRUH UHVXOWLQJ LQ FHOO GHDWK DQG
QHXURGHJHQHUDWLRQ 7KH LQFUHDVH LQ LQWUDFHOOXODU FDOFLXP FDQ PRGXODWH WKH QHXURWUDQVPLWWHU
UHOHDVH IURP SUHV\QDSWLF YHVLFOHV 7KLV FDQ PRGXODWH QHXURWUDQVPLVVLRQ 'LJR[LQ LQGXFHG
PDJQHVLXPGHSOHWLRQFDQUHPRYHWKHPDJQHVLXPEORFNRQWKH10'$UHFHSWRUUHVXOWLQJLQ
10'$ H[FLWRWR[LFLW\ 'LJR[LQ FDQ PRGXODWH WKH JOXWDPDWHUJLF WKDODPRFRUWLFRWKDODPLF
SDWKZD\ DQG FRQVFLRXVQHVV UHVXOWLQJ LQ VFKL]RSKUHQLD DQG DXWLVP 'LJR[LQ LQGXFHG
PDJQHVLXP GHSOHWLRQ FDQ LQKLELW UHYHUVH WUDQVFULSWDVH DFWLYLW\ DQG +(59 JHQHUDWLRQ
PRGXODWLQJ WKH G\QDPLFLW\ RI WKH JHQRPH 'LJR[LQ LQGXFHG LQWUDFHOOXODU FDOFLXP
DFFXPXODWLRQDQGPDJQHVLXPGHSOHWLRQFDQPRGXODWH*SURWHLQDQGSURWHLQW\URVLQHNLQDVH
GHSHQGHQW QHXURWUDQVPLWWHU DQG HQGRFULQH UHFHSWRUV 7KLV FDQ SURGXFH GLJR[LQ LQGXFHG
QHXURLPPXQRHQGRFULQHLQWHJUDWLRQ'LJR[LQIXQFWLRQVDVD1HDQGHUWKDOPDVWHUKRUPRQH

1HDQGHUWKDOLVDWLRQDQGDQGURJ\Q\
7KH DFWLQLGLF DUFKDHD DUH FKROHVWHURO FDWDEROLVLQJ DQG OHDGV WR ORZ OHYHOV RI
WHVWRVWHURQHDQGHVWURJHQ7KLVOHDGVRQWRDVH[XDOIHDWXUHVDQGORZUHSURGXFWLYHUDWHVRIWKH
1HDQGHUWKDOSRSXODWLRQ7KH1HDQGHUWKDOVFRQVXPHDORZILEUHGLHWZLWKORZOLJQDQFRQWHQW
7KH DFWLQLGLF DUFKDHD KDV FKROHVWHURO FDWDEROLVLQJ HQ]\PHV JHQHUDWLQJ PRUH RI WHVWRVWHURQH
WKDQ HVWURJHQV 7KLV FRQWULEXWHV WR HVWURJHQ GHILFLHQF\ DQG WHVWRVWHURQH RYHUDFWLYLW\ 7KH
1HDQGHUWKDOSRSXODWLRQDUHK\SHUPDOHVZLWKFRQFRPPLWDQWULJKWKHPLVSKHULFGRPLQDQFHDQG
FHUHEHOODU GRPLQDQFH 7HVWRVWHURQH VXSSUHVVHV OHIW KHPLVSKHULF IXQFWLRQ 7KH KLJK
WHVWRVWHURQH OHYHOV LQ 1HDQGHUWKDOV FRQWULEXWH WR D ELJJHU EUDLQ 7KH 1HDQGHUWKDOV PDOHV DV
ZHOODVIHPDOHVKDGDKLJKHUOHYHORIWHVWRVWHURQHFRQWULEXWLQJWRJHQGHUHTXDOLW\DQGJHQGHU
QHXWUDOVWDWHV7KHUHZDVJURXSLGHQWLW\DQGJURXSPRWKHUKRRGZLWKQRGLIIHUHQFHVEHWZHHQ
UROHVRIERWKPDOHVDQGIHPDOHV7KLVDOVRUHVXOWHGLQPDWULOLQHDULW\7KHKLJKHUWHVWRVWHURQH
OHYHOVLQPDOHVDVZHOODVIHPDOHVOHGWRDOWHUQDWHW\SHRIVH[XDOLW\DQGDEHUUDQWEHKDYLRXU
7KH KRPR VDSLHQV HDW D KLJK ILEUH GLHW ZLWK ORZ FKROHVWHURO DQG KLJK OLJQDQ FRQWHQW
FRQWULEXWLQJ WR HVWURJHQ GRPLQDQFH OHIW KHPLVSKHULF GRPLQDQFH DQG FHUHEHOODU K\SRSODVLD
+RPR VDSLHQV KDG KLJKHU UHSURGXFWLYH UDWHV DQG RYHUWRRN WKH 1HDQGHUWKDO SRSXODWLRQ
UHVXOWLQJLQLWVH[WLQFWLRQ7KHKRPRVDSLHQSRSXODWLRQZDVFRQVHUYDWLYHZLWKQRUPDOVH[XDO

PRUHVIDPLO\YDOXHVDQGSDWULDUFKLDOW\SHRIEHKDYLRXU7KHUROHRIIHPDOHVWKHKRPRVDSLHQ
FRPPXQLW\ ZDV LQIHULRU WR PDOHV 7KH LQFUHDVLQJ JHQHUDWLRQ RI 1HDQGHUWKDO K\EULGV GXH WR
FOLPDWHFKDQJHPHGLDWHGDUFKDHDORYHUJURZWKOHDGVWRJHQGHUHTXDOLW\DQGHTXLGRPLQDQFHRI
PDOHDQGIHPDOHLQWKLVFHQWXU\

(QGRV\PELRWLFDUFKDHDDQGFKROHVWHUROFDWDEROLVP
7KH FKROHVWHURO FDWDEROLVP UHVXOWV LQ FKROHVWHURO GHSOHWLRQ DQG ELOH DFLG GHILFLHQF\
%LOH DFLGV ELQG WR 9'5 DQG DUH LPPXQRPRGXODWRU\ %LOH DFLG GHILFLHQF\ OHDGV WR LPPXQH
DFWLYDWLRQDQGDXWRLPPXQHGLVHDVH%LOHDFLGVELQGWR);5/;5DQG3;5PRGXODWLQJOLSLG
DQG FDUERK\GUDWH PHWDEROLVP 7KLV OHDGV WR PHWDEROLF V\QGURPH ; LQ WKH SUHVHQFH RI ELOH
DFLG GHILFLHQF\ %LOH DFLG XQFRXSOHV R[LGDWLYH SKRVSKRU\ODWLRQ DQG LWV GHILFLHQF\ OHDGV WR
REHVLW\RIPHWDEROLFV\QGURPH;%LOHDFLGVELQGWRROIDFWRU\UHFHSWRUVDQGDUHLPSRUWDQWLQ
JURXSLGHQWLW\%LOHDFLGGHILFLHQF\OHDGVWRIRUPDWLRQRIVPDOOVRFLDOJURXSVLQ1HDQGHUWKDOV
DQGJHQHVLVRIDXWLVP&KROHVWHUROGHSOHWLRQDOVROHDGVWRYLWDPLQ'GHILFLHQF\9LWDPLQ'
ELQGV WR 9'5 DQG SURGXFHV LPPXQRPRGXODWLRQ 9LWDPLQ ' GHILFLHQF\ OHDGV WR LPPXQH
DFWLYDWLRQ DQG DXWRLPPXQH GLVHDVHV 9LWDPLQ ' GHILFLHQF\ FDQ DOVR SURGXFH ULFNHWV DQG
FRQWULEXWHWRWKHSKHQRW\SLFIHDWXUHVRI1HDQGHUWKDOV9LWDPLQ'GHILFLHQF\FDQFRQWULEXWHWR
EUDLQ GHYHORSPHQW UHVXOWLQJ LQ PDFURFHSKDO\ 9LWDPLQ ' GHILFLHQF\ FRQWULEXWHV WR LQVXOLQ
UHVLVWDQFH DQG WUXQFDO REHVLW\ RI 1HDQGHUWKDOV 9LWDPLQ ' GHILFLHQF\ FRQWULEXWHV WR WKH
IDLUQHVV RI WKH 1HDQGHUWKDO VNLQ DV D SKHQRW\SLF DGDSWDWLRQ 7KH 1HDQGHUWKDO SKHQRW\SLF
IHDWXUHVDUHGXHWRYLWDPLQ'GHILFLHQF\DQGLQVXOLQUHVLVWDQFH
7KXVJOREDOZDUPLQJDQGLQFUHDVHGHQGRV\PELRWLFDFWLQLGLFDUFKDHDOJURZWKOHDGVWR
FKROHVWHURO FDWDEROLVP DQG JHQHUDWLRQ RI WKH :DUEXUJ SKHQRW\SH UHVXOWLQJ LQ LQFUHDVHG
SRUSK\ULQ V\QWKHVLV H[WUDVHQVRU\ ORZ (0) SHUFHSWLRQ SUHIURQWDO FRUWH[ DWURSK\ LQVXOLQ
UHVLVWDQFH DQG FHUHEHOODU GRPLQDQFH 7KLV OHDGV RQ WR QHDQGHUWKDOLVDWLRQ RI WKH ERG\ DQG
EUDLQ

5HIHUHQFHV

0RUJDQ( 7KH 1HDQGHUWKDO WKHRU\RI DXWLVP$VSHUJHUDQG$'+'
$QWKURSRORJ\
1HZ$QDWRPLVW%
+XPDQV3URF%LRO6FL±
+XP(YRO±

%RG\,6%1
6FL86$±

&+$37(5
$1(:+80$163(&,(6&/,0$7(&+$1*(*/2%$/:$50,1*$1'
1(21($1'(57+$/67+($*(2)+2021(21($1'(57+$/,6

+XPDQ HQJLQHHULQJ PHGLDWHG E\ V\PELRVLV E\ DUFKDHD GULYHV WKH HYROXWLRQ RI WKH
VSHFLHV$UFKDHDOHQGRV\PELRVLVFDQOHDGWRUHVLVWDQFHDJDLQVWYLUDOLQIHFWLRQHVSHFLDOO\&RYLG
7KLVFDQEHWHUUHVWULDORUH[WUDWHUUHVWULDO7KHDUFKDHDFDQEHGHULYHGIURPWHUUHVWULDOVRXUFHV
DV ZHOO DV IURP WKH H[WUDWHUUHVWULDO LQWHUJDODFWLF FORXG 7KH DUFKDHD IURP WKH H[WUDWHUUHVWULDO
LQWHUJDODFWLFFORXGUHDFKWKHHDUWKE\PHWHRULFKLWV,QVXFKDFDVHV\PELRVLVFDQEHLQGXFHGE\
WUDQVIHU RI PLFURIORUD V\PELRQWV DQG HYROXWLRQ LQGXFHG 6\PELRVLV E\ PLFURRUJDQLVPV
HVSHFLDOO\DUFKDHDGULYHVWKHHYROXWLRQRIWKHVSHFLHV,QVXFKDFDVHV\PELRVLVFDQEHLQGXFHG
E\WUDQVIHURIPLFURIORUDV\PELRQWVDQGHYROXWLRQLQGXFHG(QGRV\PELRVLVE\DUFKDHDDVZHOO
DVDUFKDHDOV\PELRQWVLQWKHJXWFDQPRGXODWHWKHJHQRW\SHWKHSKHQRW\SHWKHVRFLDOFODVVDQG
WKH UDFLDO JURXS RI WKH LQGLYLGXDO 7KH V\PELRWLF DUFKDHD FDQ KDYH KRUL]RQWDO DQG YHUWLFDO
WUDQVPLVVLRQ (QGRV\PELRWLF DUFKDHDO JURZWK OHDGV WR QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV 7KH
QHDQGHUWKDOLVHG VSHFLHV LV PDWULOLQHDO VRFLHW\ DQG LQFOXGHV WKH 'UDYLGLDQV WKH &HOWV WKH
%DVTXHV DQG WKH %HUEHUV 7KH LQKLELWLRQ RI WKH HQGRV\PELRWLF DUFKDHDO JURZWK OHDGV WR
HYROXWLRQRIWKHKRPRVDSLHQV7KLVLQFOXGHVWKH$IULFDQV$U\DQLQYDGHUVRI1RUWK,QGLDDQG
WKH$U\DQGHULYHG(XURSHDQSRSXODWLRQ6\PELRVLVPHGLDWHGHYROXWLRQGHSHQGVRQWKHJXWIORUD
DQG WKH GLHW 7KLV KDV EHHQ GHPRQVWUDWHG LQ WKH GURVRSKLOD SVHXGRREVFXUD 7KH GURVRSKLOD
PDWHVRQO\ZLWKRWKHULQGLYLGXDOVHDWLQJWKHVDPHGLHW:KHQWKHGURVRSKLODJXWPLFURIORUDLV
DOWHUHGE\IHHGLQJDQWLELRWLFVWKH\PDWHZLWKRWKHULQGLYLGXDOVHDWLQJGLIIHUHQWGLHWV7KHGLHW
FRQVXPHGE\WKHGURVRSKLODUHJXODWHVLWVJXWPLFURIORUDDQGPDWLQJKDELWV7KHFRPELQDWLRQRI
WKH KXPDQ JHQRPH DQG WKH V\PELRWLF PLFURELDO JHQRPH LV FDOOHG WKH KRORJHQRPH 7KH
KRORJHQRPH HVSHFLDOO\ LWV V\PELRWLF PLFURELDO FRPSRQHQW GULYHV KXPDQ HYROXWLRQ DV ZHOO DV
DQLPDO HYROXWLRQ 7KH HYROXWLRQDU\ GLVWDQFH EHWZHHQ VSHFLHV RI ZDVS GHSHQGV RQ WKH JXW
PLFURIORUD7KHKXPDQJXWPLFURIORUDUHJXODWHVWKHHQGRFULQHJHQHWLFDQGQHXURQDOV\VWHPV
+XPDQV DQG SULPDWH HYROXWLRQ GHSHQGV RQ HQGRV\PELRWLF DUFKDHD DQG JXW PLFURIORUD 7KH
+DUDSSDQ 'UDYLGLDQ VRFLHWLHV DQG WKH SDWULDUFKDO $U\DQ VRFLHW\ 7KH PDWULOLQHDO +DUDSSDQ
PHWDEROLFV\QGURPH;QHXURGHJHQHUDWLRQFDQFHUDXWLVPDQGVFKL]RSKUHQLD7KH1HDQGHUWKDO
JXWIORUDDQGHQGRV\PELRWLFDUFKDHDZDVGHWHUPLQHGE\WKHQRQYHJHWDULDQNHWRJHQLFKLJKIDW
KLJKSURWHLQGLHWFRQVXPHGE\WKHPLQWKH(XUDVLDQVWHSSHV7KHKRPRVDSLHQVLQFOXGLQJWKH

FODVVLFDO $U\DQ WULEHV DQG $IULFDQ DWH D KLJK ILEUH GLHW DQG KDG ORZHU DUFKDHDO JURZWK ERWK
HQGRV\PELRWLFDQGJXW7KHGLHWDU\ILEUHLQWDNHGHWHUPLQHVWKHPLFURELDOGLYHUVLW\RIWKHJXW
7KHKLJKILEUHLQWDNHLVDVVRFLDWHGZLWKLQFUHDVHGJHQHUDWLRQRIVKRUWFKDLQIDWW\DFLGVEXW\ULF
DFLG E\ WKH JXW IORUD %XW\UDWH LV D +'$& LQKLELWRU DQG OHDGV WR LQFUHDVHG JHQHUDWLRQ DQG
LQFRUSRUDWLRQ RI HQGRJHQRXV UHWURYLUDO VHTXHQFHV 7KH KLJK GLHWDU\ ILEUH LQWDNH UHODWHG
LQFUHDVHG +(59 VHTXHQFHV OHDGV WR LQFUHDVHG V\QDSWLF FRQQHFWLYLW\ DQG D GRPLQDQW IURQWDO
FRUWH[ DV VHHQ LQ KRPR VDSLHQ VSHFLHV 7KH QHDQGHUWKDOLF VSHFLHV FRQVXPH D NHWRJHQLF QRQ
YHJHWDULDQ KLJK IDW KLJK SURWHLQ ORZ ILEUH GLHW 7KLV OHDGV WR GHFUHDVHG JHQHUDWLRQ RI
HQGRJHQRXV +(59 VHTXHQFHV DQG UHGXFHG JHQRPLF IOH[LELOLW\ LQ QHDQGHUWKDOLF VSHFLHV 7KLV
SURGXFHV VPDOOHU FHUHEUDO FRUWH[ DQG D GRPLQDQW FHUHEHOODU FRUWH[ LQ WKH QHDQGHUWKDOLF EUDLQ
7KHKRPRQHDQGHUWKDOLFVSHFLHVE\WKHORZGLHWDU\ILEUHLQWDNHVWDUYHWKHLUPLFURELDOVHOI7KLV
OHDGV WR LQFUHDVHG HQGRV\PELRWLF DQG JXW DUFKDHDO JURZWK 7KH PXFRXV PHPEUDQH OLQLQJ WKH
JXWEHFRPHVWKLQQHGRXWDVWKHJXWEDFWHULDHDWVXSWKHPXFRXVOLQLQJRIWKHJXW7KLVUHVXOWVLQ
OHDNDJHRIHQGRWR[LQDQGDUFKDHDIURPWKHJXWWRWKHEORRGEUHDFKLQJWKHEDUULHUDQGSURGXFHV
DFKURQLFLPPXQRVWLPXODWRU\LQIODPPDWRU\VWDWHZKLFKIRUPVWKHEDVLVRIDXWRLPPXQHGLVHDVH
PHWDEROLFV\QGURPHQHXURGHJHQHUDWLRQRQFRJHQLFDQGSV\FKLDWULFGLVRUGHUV7KH1HDQGHUWKDO
VSHFLHV HDW D ORZ ILEUH GLHW DQG KDYH D GHILFLHQF\ RI PLFURELRWD DFFHVVHG FDUERK\GUDWH
JHQHUDWLQJVKRUWFKDLQIDWW\DFLG7KHUHLVDGHILFLHQF\RIEXW\UDWHJHQHUDWHGLQWKHJXWIURPWKH
GLHWDU\ ILEUH ZKLFK FDQ SURGXFH VXSSUHVVLRQ RI WKH FKURQLF LQIODPPDWRU\ SURFHVV 7KH
1HDQGHUWKDOV KDYH JRW WKH IHUPHQWDWLRQ E\SURGXFW GHILFLHQF\ V\QGURPH 7KH LQGXFWLRQ RI
QHDQGHUWKDOLF VSHFLHV GHSHQGV RQ WKH ORZ ILEUH LQWDNH LQGXFHG KLJK DUFKDHDO GHQVLW\
HQGRV\PELRWLF DQG WKH JXW PLFURIORUD 7KH KRPR VDSLHQV VSHFLHV FRQVXPH D KLJK ILEUH GLHW
JHQHUDWLQJODUJHDPRXQWVRIVKRUWFKDLQIDWW\DFLGEXW\UDWHZKLFKLQKLELWVHQGRV\PELRWLFDQG
JXWDUFKDHDOJURZWK7KHPLFURELDOVHOIRIWKHKRPRVDSLHQVSHFLHVLVPRUHGLYHUVHWKDQWKDWRI
WKHQHDQGHUWKDOLFVSHFLHVDQGWKHDUFKDHDOSRSXODWLRQGHQVLW\LVOHVV7KLVUHVXOWVLQDSURWHFWLRQ
DJDLQVWFKURQLFLQIODPPDWLRQDQGWKHLQGXFWLRQRIGLVHDVHVOLNHDXWRLPPXQHGLVHDVHPHWDEROLF
V\QGURPH QHXURGHJHQHUDWLRQ RQFRJHQLF DQG SV\FKLDWULF GLVRUGHUV 7KH KRPR VDSLHQ VSHFLHV
KDYHDKLJKHULQWDNHRIGLHWDU\ILEUHFRQWULEXWLQJWRDURXQGJGD\DQGDGLYHUVHPLFURELDOJXW
IORUD ZLWK OHVV RI DUFKDHDO SRSXODWLRQ GHQVLW\ 7KH EXW\UDWH JHQHUDWHG IURP GLHWDU\ ILEUH
SURGXFHV DQ LPPXQRVXSSUHVVLYH VWDWH 7KXV WKH V\PELRWLF PLFURIORUD ZLWK OHVV RI DUFKDHDO
GHQVLW\LQGXFHVDKRPRVDSLHQVSHFLHV7KLVFDQEHGHPRQVWUDWHGE\H[SHULPHQWDOLQGXFWLRQRI
HYROXWLRQ $ KLJK ILEUH KLJK 0&7 GLHW DV ZHOO DV DQWLELRWLFV GHULYHG IURP KLJKHU SODQWV DQG
IHFDOPLFURELRWDWUDQVIHUIURPVDSLHQVSHFLHVFDQLQKLELWWKH1HDQGHUWKDOPHWDERORQRPLFVDQG

FRORQLFPLFURIORUDSUHGRPLQDQWO\DUFKDHDDQGPRGXODWLRQRIHQGRV\PELRWLFDUFKDHDE\DSDOHR
GLHWDQGDQWLELRWLFVIURPKLJKHUSODQWVFDQOHDGWRLQWHUFRQYHUVLRQRIKXPDQVSHFLHVEHWZHHQ
KRPR QHDQGHUWKDOLV DQG KRPR VDSLHQV 7KH KRORJHQRPH HVSHFLDOO\ WKH PLFURELDO IORUD
HQGRV\PELRWLFJXW GULYHV KXPDQ DQG DQLPDO HYROXWLRQ DQG FDQ EH H[SHULPHQWDOO\ LQGXFHG
6\PELRWLF PLFURIORUD GULYHV HYROXWLRQ (YHU\ DQLPDO HYHU\ KXPDQ VSHFLHV GLIIHUHQW
FRPPXQLWLHV GLIIHUHQW UDFHV DQG GLIIHUHQW FDVWH KDYH WKHLU VLJQDWXUH HQGRV\PELRWLF DQG JXW
PLFURIORUDZKLFKFDQEHWUDQVPLWWHGYHUWLFDOO\DQGKRUL]RQWDOO\7KXVV\PELRVLVGULYHVKXPDQ
DQGDQLPDOHYROXWLRQ
HQGRV\PELRWLFDUFKDHDFDQVHFUHWH51$YLURLGVDQGYLUXVHVDQGWKHUHLVDYLURLGDUFKDHDOKRVW
UHODWLRQVKLS EHWZHHQ WKH WZR $ G\QDPLF VWDWH RI YLUXV O\VLV DQG SHUVLVWHQFH FDQ RFFXU LQ
FRRUGLQDWHWKHLUEHKDYLRUE\LQIRUPDWLRQH[FKDQJHPRGXODWLRQDQGLQQRYDWLRQJHQHUDWLQJQHZ
VHTXHQFH EDVHG FRQWHQW 7KLV RFFXUV GXH WR D SKHQRPHQRQ RI V\PELRVLV LQ FRQWUDVW WR WKH
SUDFWLFDO FRPSHWHQFH RI OLYLQJ DJHQWV WR JHQHUDWH QHZ VHTXHQFHV E\ V\PELRVLV DQG VKDULQJ
FRQVHUYDWLRQDQGSODVWLFLW\RIJHQRPLFHQYLURQPHQWV7KHEHKDYLRXUDOPRWLYHVRIWKH51$DUH
VLQJOHVWHPORRSVWUXFWXUHV7KH\KDYHVHOIIROGLQJDQGJURXSEXLOGLQJFDSDELOLWLHVGHSHQGLQJ
XSRQ IXQFWLRQDO QHHGV 7KH HYROXWLRQ SURFHVV GHSHQGV XSRQ ZKDW 9LOODUHDO FDOOV 51$ VWHP
ORRSFRQVRUWLD7KHZKROHHQWLW\FDQIXQFWLRQRQO\LISDUWLFLSDWRU\JURXSVRI51$YLURLGVFDQ
JHW WKHLU IXQFWLRQ FRRUGLQDWHG 7KHUH LV FRPSHWHQW GHQRYR JHQHUDWLRQ RI QHZ VHTXHQFHV E\
FRRSHUDWLYHDFWLRQDQGQRWE\FRPSHWLWLRQ7KHVH51$YLURLGDOJURXSFRQVRUWLDFDQFRQWULEXWH
WRWKHKRVWLGHQWLW\JURXSLGHQWLW\DQGJURXSLPPXQLW\7KHWHUPXVHGIRUWKLVLV51$YLURLGDO
VRFLRORJLFDOEHKDYLRU7KH51$YLURLGVFDQEXLOGJURXSVWKDWLQYDGHWKHDUFKDHDDQGFRPSHWH
DVDJURXSIRUOLPLWHGUHVRXUFHVVXFKKRVWJHQRPHV$NH\EHKDYLRXUDOPRWLILVDEOHWRLQWHJUDWH
D SHUVLVWHQW OLIH VW\OH LQWR WKH DUFKDHDO FRORQ\ ZLWK WKH DGGLFWLRQ PRGXOH IRUPLQJ FRPSHWLQJ
YLURLGDOJURXSVWKDWDUHFRXQWHUEDODQFLQJHDFKRWKHUWRJHWKHUZLWKWKHDUFKDHDOKRVWLPPXQH
V\VWHP7KLVOHDGVWRFUHDWLRQRIDQLGHQWLW\IRUWKHDUFKDHDOFRORQ\DQGWKHKRPRQHDQGHUWKDOLV
KRVW9LURLGVFDQNLOOWKHLUKRVWDQGDOVRFRORQL]HWKHLUKRVWZLWKRXWGLVHDVHDQGSURWHFWWKHKRVW
IURPVLPLODUYLUXVHVDQGYLURLGV7RJHWKHUZLWKO\VLVDQGSURWHFWLRQZHVHHDYLURLGFRORQL]HG
KRVWWKDWLVERWKV\PELRWLFDQGLQQRYDWLYHDFTXLULQJQHZFRPSHWHQWFRGHV7KXVWKHYLURLGKRVW

UHODWLRQVKLS LV D SHUYDVLYH DQFLHQW IRUFH LQ WKH RULJLQ DQG HYROXWLRQ RI OLIH &XPXODWLYH
HYROXWLRQDWWKHOHYHORI51$YLURLGVLVOLNHDUDWFKHWHIIHFWXVHGIRUWUDQVPLVVLRQRIFXOWXUDO
PHPHV7KLVOHDUQLQJDFFXPXODWHVVRWKDWHYHU\QHZJHQHUDWLRQPXVWQRWUHSHDWDOOLQQRYDWLYH
WKRXJKWVDQGWHFKQLTXHV4XDVLVSHFLHVRI51$YLURLGVDUHFRRSHUDWLYHDQGH[FOXVLYHRIRWKHU
TXDVLVSHFLHV 7KH\ KDYH JURXS UHFRJQLWLRQ GLIIHUHQWLDWLQJ VHOIJURXSV DQG QRQVHOIJURXSV
DOORZLQJIRUTXDVLVSHFLHVWRSURPRWHWKHHPHUJHQFHRIJURXSLGHQWLW\:LWKJURXSLGHQWLW\YLD
FRXQWHU UHODWHG DGGLFWLRQ PRGXOHV WZR RSSRVLQJ FRPSRQHQWV PXVW EH SUHVHQW DQG ZRUN
FRKHUHQWO\ DQG GHILQH WKH JURXS DV D ZKROH %LRORJLFDO LGHQWLW\ LV FRQVWLWXWHG E\ G\QDPLF
LQWHUDFWLRQRIFRRSHUDWLYHJURXSV9LUXVDGGLFWLRQPRGXOHLVDQHVVHQWLDOVWUDWHJ\IRUH[LVWHQFH
RIOLIHLQWKHYLURVSKHUH9LUXVHVDUHWUDQVPLVVLEOHDQGFDQSHUVLVWLQVSHFLILFKRVWSRSXODWLRQ
OHDGLQJWRDIRUPRIJURXSLPPXQLW\LGHQWLW\VLQFHLGHQWLFDOEXWXQFRORQL]HGKRVWSRSXODWLRQ
UHPDLQV VXVFHSWLEOH WR D NLOOLQJ DFWLRQ RI O\WLF YLUXVHV ,Q WKLV ZD\ ZH VHH WKDW YLUXVHV DUH
QHFHVVDU\SURYLGLQJRSSRVLQJIXQFWLRQVIRUDGGLFWLRQSHUVLVWHQFHSURWHFWLRQDQGO\WLFNLOOLQJ
9LURLGVFDQIXQFWLRQDVFRQVRUWLDDQHVVHQWLDOLQWHUDFWLQJJURXSDQGSURYLGHDPHFKDQLVPIURP
ZKLFKFRQVRUWLDOIXQFWLRQFRXOGHPHUJHLQWKHRULJLQRISURWRELRWLFOLIH*HQHWLFSDUDVLWHVFDQ
DFWDVDJURXSTVF%XWIRUWKLVJURXSWREHFRKHUHQWWKH\PXVWDWWDLQJURXSLGHQWLW\DQGWKLV
LV W\SLFDOO\ YLD DQ DGGLFWLRQ VWUDWHJ\ $QWLYLUDO DQG SURYLUDO V\VWHP LQ WKH DUFKDHD ZLOO
WKHPVHOYHVHPHUJHLQWKHKRVWIURPYLUXVGHULYHGLQIRUPDWLRQ7KHDUFKDHDOYLUXVHVWKHPVHOYHV
SURYLGHWKHFULWLFDOIXQFWLRQUHTXLUHGIRUDQWLYLUDOGHIHQFH7KHRSSRVLQJIXQFWLRQVDUHWKHEDVLV
RI DGGLFWLRQ PRGXOHV 7KXV WKH HPHUJHQFH RI JURXS LGHQWLW\ EHFRPHV DQ HVVHQWLDO DQG HDUO\
HYHQWLQWKHHPHUJHQFHRIOLIH7KLVLVFRKHUHQWWRWKHEDVLFDOO\JURXSEHKDYLRURI51$YLURLGV
LQDUFKDHD7KLVJURXSVHOHFWLRQDQGJURXSLGHQWLW\DUHQHHGHGWRFUHDWHLQIRUPDWLRQFRKHUHQFH
DQG QHWZRUN IRUPDWLRQ DQG WR HVWDEOLVK D V\VWHP RI FRPPXQLFDWLRQ FRGH FRPSHWHQW
LQWHUDFWLRQV7KLVLGHQWLW\VHUYHVDVLQIRUPDWLRQDOVRIRUWKHRQHVWKDWGRQRWVKDUHWKLVLGHQWLW\
7KLVLVWKHEHJLQQLQJRIVHOIQRQVHOIGLIIHUHQWLDWLQJFDSDELOLW\,QWKLVZD\YLURLGVSURPRWHWKH
HPHUJHQFHRIJURXSLGHQWLW\LQDUFKDHDOFRORQLHVDQGKRVWKXPDQV7KHDUFKDHDOFRORQ\LGHQWLW\
GHSHQGVXSRQWKHFRORQL]LQJVHWRI51$YLURLGVSURGXFLQJDFRKHUHQWQHWZRUNWKDWLVLQFOXVLYH
RSSRVLQJ IXQFWLRQV DQG IDYRXUV WKH SHUVLVWHQFH RI SDUDVLWH GHULYHG QHZ LQIRUPDWLRQ 2Q WKH
EDVLVRISRSXODWLRQEDVHGIXQFWLRQVRI51$'1$FDQEHFRQVLGHUHGDVDKDELWDWIRUFRQVRUWLD
51$7KXV51$YLURLGVRIWKHDUFKDHDDUHLQYROYHGLQFRPSOH[PXOWLFHOOXODULGHQWLW\7KLVLV
FDOOHG DV WKH *DQJHQ K\SRWKHVLV E\ 9LOODUUHDO 7KH *DQJHQ GHVFULEHV WKH HPHUJHQFH RI
FRPPRQO\VKDUHGFRGHXVHJURXSPHPEHUVKLSDQGFROOHFWLYHOLYLQJIXQFWLRQRI51$YLURLGV
&RPPXQLFDWLRQLVDFRGHGHSHQGHGLQWHUDFWLRQDQGWUDQVPLVVLRQRILQIHFWLRXVFRGHGHILQHVWKH
RULJLQRIWKHYLURVSKHUH7KLVLVVXHUHIHUVWRWKHLGHDRIFROOHFWLYHRI51$YLURLGVZLWKLQKHUHQW
WR[LFDQGDQWLWR[LFIHDWXUHVVKRXOGEHDEOHWRWUDQVPLWRUFRPPXQLFDWHWKHVHDJHQWVDQGWKHLU

IHDWXUHV WR D QHDUE\ FRPSHWLQJ SRSXODWLRQ ,W VWURQJO\ IDYRXUV WKH VXUYLYDO RI 51$ YLURLGDO
SRSXODWLRQ ZLWK FRPSDWLEOH DGGLFWLRQ PRGXOHV WKDW ZLOO LQKLELW DJHQW WR[LFLW\ DQG DOORZ
SHUVLVWHQFHRIQHZDJHQWV7KLVLVWKXVWKHVXUYLYDORIWKHSHUVLVWHQWO\FRORQL]HGVHWZKLFKLVDQ
LQKHUHQWO\ V\PELRWLF DQG FRQVRUWLDO SURFHVV ,W DOVR SURPRWHV LQFUHDVLQJ FRPSOH[LW\ DQG
LGHQWLW\LPPXQLW\RIWKHKRVWFROOHFWLYHYLDDQHZDJHQWFRORQL]DWLRQDQGVWDEOHDGGLWLRQ7KXV
WKH WUDQVPLVVLRQ RI 51$ DJHQWV DWWDLQV ERWK FRPPXQLFDWLRQ DQG UHFRJQLWLRQ RI JURXS
PHPEHUVKLS,QWKLVZD\WKHHPHUJHQFHRIWKHYLURVSKHUHPXVWKDGEHHQDQHDUO\HYHQWLQWKH
RULJLQ RI OLIH DQG JURXS LGHQWLW\ 9LUXVHV DQG YLURLGV DUH JHQHWLF SDUDVLWHV DQG WKH PRVW
DEXQGDQW OLYLQJ HQWLWLHV RQ HDUWK 7KH YLURVSKHUH LV D QHWZRUN RI LQIHFWLRXV JHQHWLF DJHQWV
(YROXWLRQ FRQVHUYDWLRQ DQG SODVWLFLW\ RI JHQHWLF LGHQWLWLHV DUH WKH UHVXOW RI FRRSHUDWLYH
FRQVRUWLD RI 51$ YLURLGV WKDW DUH FRPSHWHQW WR FRPPXQLFDWH 7KXV WKH DUFKDHDO YLURLGDO
FRQVRUWLD FDQ V\PELRWLFDOO\ VKDUH DQG FRPPXQLFDWH SURGXFLQJ QHZ VHTXHQFHV DQG JLYH DQ
LGHQWLW\ WR WKH DUFKDHDO FRORQ\ 7KH ORZ ILEUH GLHW DQG H[WUHPH WHPSHUDWXUHV RI WKH (XUDVLDQ
VWHSSHVOHDGVWRDUFKDHDOPXOWLSOLFDWLRQDQGLQGXFWLRQRIWKHKRPRQHDQGHUWKDOLVVSHFLHV7KH
DUFKDHDOFRORQ\¶VFKDUDFWHULVWLFVDUHGHWHUPLQHGE\WKHFRRSHUDWLYHFRQVRUWLDRI51$YLURLGVLQ
WKHDUFKDHDDQGWKHDUFKDHDOFRORQ\LGHQWLW\GHWHUPLQHVWKHKRPRQHDQGHUWKDOLVLGHQWLW\7KXV
WKH DUFKDHDO FRORQLHV ZLWK WKHLU TXDVLVSHFLHV FRQVRUWLD RI 51$ YLURLGV GHWHUPLQH WKH KRPR
QHDQGHUWKDOLVLGHQWLW\7KHQHZVHTXHQFHJHQHUDWLRQE\WKH51$YLURLGDOFRQVRUWLD¶VV\PELRWLF
VKDULQJ FKDUDFWHU FRQWULEXWHV WR WKH GLYHUVLW\ LQ WKH EHKDYLRU DQG FUHDWLYLW\ RI WKH KRPR
QHDQGHUWKDOLV SRSXODWLRQ 7KH DUFKDHDO 51$ YLUXVHV DQG YLURLGV DQG WKH DUFKDHDO FRORQLHV
WKHPVHOYHV SURWHFW WKH KRPR QHDQGHUWKDOLV SRSXODWLRQ IURP UHWURYLUDO LQIHFWLRQV 7KXV WKH
KRPRQHDQGHUWKDOLVSRSXODWLRQLVUHWURYLUDOUHVLVWDQWDQGWKHTXDVLVSHFLHVFRQVRUWLDRIDUFKDHD
DQGDUFKDHDOYLURLGVJLYHVWKHPDJURXSLGHQWLW\DVUHWURYLUDOUHVLVWDQW7KXVWKHTXDVLVSHFLHV
FRQVRUWLDRIDUFKDHDDQG51$YLURLGVJLYHKRPRQHDQGHUWKDOLVFRORQLHVWKHLULGHQWLW\DQGLGHD
RIVHOI7KHKRPRQHDQGHUWKDOLVLVUHVLVWDQWWRUHWURYLUDOLQIHFWLRQOLNHWKH$XVWUDOLDQDERULJLQDOV
DQGWKHHQGRJHQRXVUHWURYLUDOVHTXHQFHVLQWKH1HDQGHUWKDOJHQRPHDUHOLPLWHG7KLVOHDGVWR
ODFNRISODVWLFLW\DQGG\QDPLFLW\RIWKHKXPDQJHQRPHDQGWKHFHUHEUDOFRUWH[LQLOOGHYHORSHG
ZLWK D GRPLQDQW LPSXOVLYH FHUHEHOODU FRUWH[ LQ WKH KRPR QHDQGHUWKDOLV SRSXODWLRQ 7KLV
SURGXFHV WKH LPSXOVLYH FUHDWLYH VXUUHDOLVWLF VSLULWXDO QHDQGHUWKDOLF EUDLQ $V WKH H[WUHPH RI
WHPSHUDWXUH JRHV RII DQG WKH LFH DJH HQGV WKH DUFKDHDO SRSXODWLRQ GHQVLW\ DOVR FRPHV GRZQ
7KLVDOVRFDQUHVXOWIURPWKHFRQVXPSWLRQRIDKLJKILEUHGLHWLQWKH$IULFDQFRQWLQHQW7KHKLJK
ILEUHGLHWGLJHVWHGE\FORVWULGLDOFOXVWHUVLQWKHFRORQSURPRWHVEXW\UDWHV\QWKHVLVDQGEXW\UDWH
ZLOO LQGXFH +'$& LQKLELWLRQ DQG H[SUHVVLRQ RI UHWURYLUDO VHTXHQFHV LQ WKH SULPDWH JHQRPH
7KLV OHDGV WR LQFUHDVH LQ HQGRJHQRXV UHWURYLUDO VHTXHQFHV LQ WKH KXPDQ JHQRPH LQFUHDVLQJ

FRPSOH[V\QDSWLFFRQQHFWLYLW\LQWKHKRPRVDSLHQV7KLVOHDGVRQWRDORJLFDOFRPPRQVHQVLFDO
SUDJPDWLFDQGSUDFWLFDOKRPRVDSLHQEUDLQ7KHKRPRVDSLHQVGXHWRODFNRIDUFKDHDDQGWKH
51$YLURLGVDUHVXVFHSWLEOHUHWURYLUDOLQIHFWLRQ7KXVWKHDUFKDHDOFRORQLHVDQG51$YLURLGDO
TXDVLVSHFLHVFRQVRUWLDGHWHUPLQHWKHHYROXWLRQRIWKHKXPDQVSHFLHVDQGWKHEUDLQQHWZRUNV
7KXV H[WUHPHV RI WHPSHUDWXUH ILEUH LQWDNH DUFKDHDO FRORQ\ GHQVLW\ 51$ YLURLGDO TXDVL
VSHFLHVJURXSLGHQWLW\DQGUHWURYLUDOUHVLVWDQFHGHFLGHVRQWKHHYROXWLRQRIKRPRVDSLHQVDQG
KRPRQHDQGHUWKDOLVDVZHOODVWKHEUDLQQHWZRUNV7KHSUHVHQWH[WUHPHVRIWHPSHUDWXUHDQGORZ
ILEUHLQWDNHLQFLYLOL]HGVRFLHW\FDQOHDGWRLQFUHDVHLQDUFKDHDOSRSXODWLRQGHQVLWLHVDQGTXDVL
VSHFLHV 51$ YLURLGDO QHWZRUNV JHQHUDWLQJ D QHZ KRPR QHDQGHUWKDOLV LQ D QHZ QHDQGHUWKDOLF
DQWKURSRFHQH DJH DV RSSRVHG WR WKH SUHVHQW KRPR VDSLHQ DQWKURSRFHQH DJH 7KH DUFKDHDO
SRSXODWLRQGHQVLWLHVDQGTXDVLVSHFLHV51$YLURLGDOQHWZRUNVGHWHUPLQHKRPRVDSLHQKRPR
QHDQGHUWKDOLV VSHFLHV UDFLDO FDVWH FRPPXQLW\ QDWLRQDO VH[XDO PHWDEROLF SKHQRW\SLF
LPPXQH JHQRW\SLF QHXURQDO SV\FKLDWULF SV\FKRORJLFDO DQG LQGLYLGXDO LGHQWLW\ 7KH DUFKDHD
VHFUHWHV WKH WUHSKRQH GLJR[LQ ZKLFK FDQ HGLW WKH 51$ YLURLGV DQG JHQHUDWH QHZ VHTXHQFHV
$UFKDHDOGLSRODUPDJQHWLWHDQGSRUSK\ULQVLQWKHVHWWLQJRIGLJR[LQLQGXFHGPHPEUDQHVRGLXP
SRWDVVLXP $73DVH LQKLELWLRQ FDQ SURGXFH D SXPSHG SKRQRQ V\VWHP PHGLDWHG TXDQWDO
SHUFHSWLYHVWDWHDQGTXDQWDOFRPPXQLFDWLRQLQWKH51$YLURLGDOV\PELRWLFV\VWHPJHQHUDWLQJ
QHZVHTXHQFHVE\VWHURLGDOGLJR[LQHQ]\PDWLFHGLWLQJDFWLRQ7KLVJLYHVULVHWRDUFKDHDO51$
YLURLGDO TXDVLVSHFLHV V\PELRWLF GLYHUVLW\ DQG LGHQWLW\ WR VSHFLHV UDFH FDVWH VH[ FXOWXUH
LQGLYLGXDODQGQDWLRQDOLGHQWLW\
LQIRUPDWLRQ VWRUDJH V\VWHP 7KH DUFKDHDRQ KDV JRW GLSRODU PDJQHWLWH DQG SRUSK\ULQV DQG FDQ
IXQFWLRQDVTXDQWDOFRPSXWHU7KHDUFKDHDOFRORQ\ZLWKLWVGLSRODUPDJQHWLWHDQGSRUSK\ULQLQWKH
VHWWLQJRIDUFKDHDOGLJR[LQLQGXFHGPHPEUDQHVRGLXPSRWDVVLXP$73DVHLQKLELWLRQFDQIXQFWLRQ
DVDSXPSHGSKRQRQV\VWHPPHGLDWLQJTXDQWDOSHUFHSWLRQ7KHDUFKDHDRQLQWKHEUDLQLVFDSDEOH
RILQIRUPDWLRQVWRUDJHDWDSRLQWLQWLPHDQGVSDFH7KHH[SHULHQFHVDQGLQIRUPDWLRQVWRUHGLQWKH
DUFKDHDRQ LV LPPRUWDO DQG HWHUQDO 7KH DUFKDHDRQ FDQ KDYH D ZDYH SDUWLFOH H[LVWHQFH DQG FDQ
H[LVW LQ PXOWLSOH TXDQWDO SRVVLEOH VWDWHV DQG FDQ LQKDELW PXOWLSOH TXDQWDO PXOWLYHUVHV 7KH
LQWHUDFWLRQ EHWZHHQ LQIRUPDWLRQ VWRUHG LQ TXDQWDO FRPSXWHUV LQ PXOWLSOH GLIIHUHQW DUFKDHDRQ
V\VWHPVDOORYHUWKHXQLYHUVHE\WKHTXDQWDOLQWHUDFWLRQVUHVXOWVLQHWHUQDOH[LVWHQFHRILQIRUPDWLRQ
LQ TXDQWDO PXOWLYHUVHV 7KH LQIRUPDWLRQ LQ WKH TXDQWDO PXOWLYHUVHV FDQ KDYH D SDUWLFXODWH
H[LVWHQFHFUHDWLQJDQHZHUPRGHE\TXDQWDOLQWHUDFWLRQVEHWZHHQLQIRUPDWLRQVWRUHGDWPXOWLSOH
SRLQWVRIWLPH7KLVFUHDWHVWKHSDUWLFXODWHP\WKLFZRUOGRIKXPDQH[LVWHQFH7KHVHDUHZKDWDUH

FDOOHG DV 6DPVDUDV 7KH PLQG LV XSORDGHG LQWR LQIRUPDWLRQ LQ WKH QHXURQDO DUFKDHDO FRORQ\
QHWZRUN DQG LWV TXDQWDO FRPSXWHUV 7KH LQIRUPDWLRQ VWRUHG LQ WKH DUFKDHDO FRORQ\ QHWZRUN
PHGLDWHGTXDQWDOVWDWHLVHWHUQDODQGFDQEHFRQVLGHUHGDVDGLJLWDOYHUVLRQRIWKHEUDLQDPLQG
GRZQORDGLQJWHFKQLTXHRUZKROHEUDLQHPXODWLRQ7KHDUFKDHDOFRORQ\QHWZRUNVWRUHVWKHKXPDQ
H[SHULHQFHVLQDQHWHUQDOPDQQHUDQGFDQFRQWULEXWHWRELRORJLFDOUHLQFDUQDWLRQ
7KHURRWVRI:HVWHUQFLYLOL]DWLRQDOGLVHDVHFDQEHUHODWHGWRWKHVWDUYDWLRQRIWKHFRORQLF
PLFURIORUD7KHFRORQLFPLFURIORUDGHSHQGVXSRQFRPSOH[FDUERK\GUDWHVGHULYHGIURPGLHWDU\
ILEUH 7KH SURFHVVHG IRRG RI KLJK SURWHLQ IDW DQG VXJDUV LV GLJHVWHG DQG DEVRUEHG LQ WKH
VWRPDFK DQG VPDOO LQWHVWLQH $ YHU\ OLWWOH RI LW UHDFKHV WKH FRORQ DQG ZLGHVSUHDG XVH RI
DQWLELRWLFV LQ PHGLFLQH KDV SURGXFHG PDVV H[WLQFWLRQ RI WKH FRORQLF PLFURIORUD 7KH FRORQLF
PLFURIORUDLVH[WUHPHO\GLYHUVHDQGWKHGLYHUVLW\LVORVW7KHUHDUHWULOOLRQEDFWHULDLQWKH
FRORQ EHORQJLQJ WR VSHFLHV 7KH\ UHJXODWH WKH LPPXQH V\VWHP E\ LQGXFLQJ WKH 7
UHJXODWRU\FHOOV$KLJKILEUHGLHWFRQWULEXWHVWRFRORQLFPLFURELRWDGLYHUVLW\,QWHUDFWLRQZLWK
IDUP DQLPDOV OLNH FRZV DQG GRJV DOVR FRQWULEXWHV WR WKH FRORQLF PLFURIORUD GLYHUVLW\ 7KH
W\SLFDO :HVWHUQ GLHW RI KLJK IDW KLJK SURWHLQ DQG VXJDUV GHFUHDVHV WKH FRORQLF PLFURELRWD
GLYHUVLW\DQGLQFUHDVHFRORQLFHQGRV\PELRWLFDUFKDHDSURGXFLQJPHWKDQRJHQHVLV7KHFRORQLF
DUFKDHD IHHG XSRQ WKH PXFRXV OLQLQJ RI WKH FRORQ DQG SURGXFHV OHDNDJH RI DUFKDHD LQWR WKH
EORRG DQG WLVVXH V\VWHP SURGXFLQJ HQGRV\PELRWLF DUFKDHD 7KLV UHVXOWV LQ D FKURQLF
LQIODPPDWRU\ VWDWH 7KH KLJK ILEUH GLHW RI $IULFDQV 6RXWK $PHULFDQV DQG ,QGLDQV SURGXFHV
LQFUHDVHGFRORQLFPLFURELRWDGLYHUVLW\DQGLQFUHDVHLQFORVWULGLDOFOXVWHUVJHQHUDWLQJ6&)$LQ
WKH JXW +LJK ILEUH GLHW LV SURWHFWLYH DJDLQVW PHWDEROLF V\QGURPH DQG GLDEHWHV PHOOLWXV
0HWDEROLF V\QGURPH LV UHODWHG WR GHJHQHUDWLRQ FDQFHU QHXURSV\FKLDWULF LOOQHVV DQG
DXWRLPPXQHGLVHDVH$KLJKILEUHGLHWRIXSWRJGD\FDQEHFDOOHGDVDJXWGLHW7KHFRORQLF
PLFURIORUDHVSHFLDOO\WKHFORVWULGLDOFOXVWHUGLJHVWVWKHILEUHJHQHUDWLQJVKRUWFKDLQIDWW\DFLGV
ZKLFK UHJXODWHV LPPXQLW\ DQG PHWDEROLVP +LJK ILEUH GLHW LQFUHDVHV WKH FRORQLF PXFXV
VHFUHWLRQ DQG WKH WKLFNQHVV RI WKH PXFXV OLQLQJ $ KLJK ILEUH GLHW SURGXFHV LQFUHDVH LQ
FORVWULGLDOFOXVWHUVDQGPXFRXVVHFUHWLRQ7KLVSURGXFHVDVWURQJJXWEORRGEDUULHUDQGSUHYHQWV
PHWDEROLF HQGRWR[HPLD ZKLFK SURGXFHV D FKURQLF LQIODPPDWRU\ UHVSRQVH +LJK GLHWDU\ ILEUH
LQWDNHDQGWKHGLYHUVLW\RIWKHFRORQLFPLFURIORUDZLWKSURPLQHQW6&)$SURGXFLQJFORVWULGLDO
FOXVWHUVDUHLQWHUUHODWHG7KHFORVWULGLDOFOXVWHUVPHWDEROLVHWKHFRPSOH[FDUERK\GUDWHLQGLHWDU\
ILEUHWRVKRUWFKDLQIDWW\DFLGVEXW\UDWHSURSLRQDWHDQGDFHWDWH7KH\LQFUHDVHWKH7UHJXODWRU\
IXQFWLRQ$KLJKILEUHGLHWLQFUHDVHVWKHEDFWHURLGHVDQGUHGXFHVWKHILUPHFXWHVRIWKHFRORQLF
PLFURIORUD $ KLJK ILEUH GLHW LV DVVRFLDWHG ZLWK D ORZ ERG\PDVV LQGH[ $ ORZ ILEUH GLHW
SURGXFHV LQFUHDVH LQ FRORQLF DUFKDHDO JURZWK DV ZHOO DV HQGRV\PELRWLF WLVVXH DQG EORRG

DUFKDHD 7KLV SURGXFHV PRUH RI PHWKDQRJHQHVLV UDWKHU WKDQ VKRUW FKDLQ IDWW\ DFLG V\QWKHVLV
FRQWULEXWLQJWRLPPXQHDFWLYDWLRQ$ORZILEUHGLHWLVDVVRFLDWHGDKLJKERG\PDVVLQGH[DQG
FKURQLF V\VWHPLF LQIODPPDWLRQ *HUPIUHH PLFH VKRZ FDUGLDF SXOPRQDU\ DQG OLYHU DWURSK\
*XW PLFURIORUD LV UHTXLUHG IRU WKH JHQHUDWLRQ RI RUJDQ V\VWHPV 7KH JXW PLFURIORUD LV DOVR
UHTXLUHG IRU JHQHUDWLRQ RI 7UHJXODWRU\ FHOOV +LJK ILEUH LQWDNH SURGXFHV PRUH FRORQLF
PLFURELRWD GLYHUVLW\ DQG LQFUHDVH LQ FORVWULGLDO FOXVWHUV DQG IHUPHQWDWLRQ E\ SURGXFWV OLNH
EXW\UDWH ZKLFK VXSSUHVVHV LQIODPPDWLRQ DQG LQFUHDVHV 7UHJXODWRU\ FHOOV $ ORZ ILEUH GLHW
SURGXFHV LQFUHDVH LQ DUFKDHDO JURZWK PHWKDQRJHQHVLV GHVWUXFWLRQ RI WKH PXFXV OLQLQJ DQG
OHDNDJH RI WKH FRORQLF DUFKDHD SURGXFLQJ HQGRV\PELRWLF WLVVXH DQG EORRG DUFKDHD 7KLV
SURGXFHV DQ LPPXQH K\SHUUHDFWLYLW\ FRQWULEXWLQJ WR WKH PRGHUQ SODJXHV RI FLYLOL]DWLRQ
PHWDEROLFV\QGURPHVFKL]RSKUHQLDDXWLVPFDQFHUDXWRLPPXQLW\DQGGHJHQHUDWLRQV7KHJXW
PLFURELRWD GULYHV KXPDQ HYROXWLRQ 7KH KXPDQV GRQ¶W KRVW WKH JXW PLFURELRWD EXW WKH JXW
PLFURELRWD KRVW XV 7KH KXPDQ V\VWHP IRUPV DQ HODERUDWH FXOWXUH ODERUDWRU\ IRU WKH
SURSDJDWLRQDQGVXUYLYDORIWKHPLFURELRWD7KHKXPDQV\VWHPLVLQGXFHGE\WKHPLFURELRWDIRU
WKHLUVXUYLYDODQGJURZWK7KHKXPDQV\VWHPH[LVWVIRUWKHPLFURELRWDDQGQRWWKHRWKHUZD\
URXQG7KHVDPHPHFKDQLVPKROGVJRRGLQSODQWV\VWHPV3ODQWVWDUWHGWKHFRORQL]HGHDUWKDV
WKH\VWDUWHGV\PELRVLQJZLWKEDFWHULDLQWKHURRWVV\VWHPVZKLFKFDQGHULYHQXWULHQWVIURPWKH
VRLO +XPDQ EHLQJV IRUP D PRELOH FXOWXUH ODERUDWRU\ IRU WKH PRUH HIIHFWLYH SURSDJDWLRQ DQG
VXUYLYDORIWKHPLFURELRWD7KHPLFURELRWDLQGXFHVWKHIRUPDWLRQRIVSHFLDOL]HGLPPXQHFHOOV
FDOOHG LQQDWH O\PSKRLG FHOOV 7KH LQQDWH O\PSKRLG FHOOV ZLOO GLUHFW WKH O\PSKRF\WHV QRW WR
DWWDFN WKH EHQHILFLDO EDFWHULD 7KXV WKH HQGRV\PELRWLF DUFKDHD DQG WKH JXW DUFKDHD LQGXFH
KXPDQSULPDWHDQGDQLPDOHYROXWLRQWRJHQHUDWHVWUXFWXUHVIRUWKHPWRVXUYLYHDQGSURSDJDWH
7KHVRXUFHRIHQGRV\PELRWLFDUFKDHDWKHWKLUGHOHPHQWRIOLIHLVWKHFRORQLFDUFKDHDWKDWOHDNV
LQWRWKHWLVVXHVSDFHVDQGEORRGV\VWHPVGXHWREUHDFKLQWKHJXWEORRGEDUULHU7KHLQFUHDVHLQ
FRORQLF DUFKDHD LV GXH WR WKH VWDUYDWLRQ RI WKH JXW PLFURELRWD FRQVHTXHQW WR D ORZ ILEUH GLHW
7KLV UHVXOWV LQ LQFUHDVH LQ FRORQLF DUFKDHDO JURZWK DQG GHVWUXFWLRQ RI FORVWULGLDO FOXVWHUV DQG
EDFWHURLGHV7KHLQFUHDVHFRORQLFDUFKDHDOJURZWKLQWKHSUHVHQFHRIJXWVWDUYDWLRQGXHWRORZ
ILEUHGLHWHDWVXSWKHPXFXVOLQLQJDQGSURGXFHVEUHDNDJHVLQWKHJXWEORRGEDUULHU7KHFRORQLF
DUFKDHDHQWHUVWKHEORRGVWUHDPDQGSURGXFHVHQGRV\PELRVLVJHQHUDWLQJHQGRV\PELRWLFDUFKDHD
DQGYDULRXVQHZRUJDQHOOHIUXFWRVRLGVVWHURLGHOOHYLWDPLQRF\WHYLURLGHOOHQHXURWUDQVPLQRLG
5HIHUHQFHV
6\PELRWLF (YROXWLRQ RI +RPR 6DSLHQV DQG +RPR 1HDQGHUWKDOLV ± $UFKDHDO 51$
9LURLGDO4XDVL6SHFLHV&RQVRUWLDDQG+XPDQ6SHFLHV,GHQWLW\7KH1HRQHDQGHUWKDO
$JH$QG.DOL<XJD1HZ<RUN2SHQ6FLHQFH3XEOLVKHUV

&+$37(5
&/,0$7(&+$1*($1'%5$,10,1'&+$1*(1(21($1'(57+$/
+<%5,'6$1'(1'26<0%,27,&$&7,1,',&$5&+$($
,QWURGXFWLRQ
7KH KXPDQ JHQRPH KDV EHHQ IRXQG WR KDYH XS WR SHUFHQW 1HDQGHUWKDO JHQHV
1HDQGHUWKDOK\EULGVZLWKKRPRVDSLHQVVSHFLHVDUHFRPPRQLQJOREDOSRSXODWLRQ7KHUHLVD
KLJK LQFLGHQFH RI DXWLVP VFKL]RSKUHQLD DQG 1HDQGHUWKDO DQWKURSRPHWULF SKHQRW\SHV LQ WKH
1DLU FRPPXQLW\ RI .HUDOD 7KH 1DLU FRPPXQLW\ LV PDWULOLQHDO DQG LV RQH RI WKH IHZ
IXQFWLRQDO PDWULDUFKLHV LQ WKH ZRUOG DQG VSHDNV WKH 'UDYLGLDQ ODQJXDJH ZLWK VLPLODULWLHV WR
&HOWLF 6F\WKLDQ %HUEHU DQG %DVTXH VRFLHWLHV 7KH DXWLVWLF EUDLQ LV FRPSDUDEOH WR WKH ODUJH
VL]HG 1HDQGHUWKDO EUDLQ $XWLVWLF DQG VFKL]RSKUHQLF PHWDERORQRPLF SDWWHUQV LQFOXGH ORZ
HIILFLHQF\ S\UXYDWH GHK\GURJHQDVH DFWLYLW\ PLWRFKRQGULDO G\VIXQFWLRQ GRPLQDQW *$%$
VKXQW:DUEXUJJO\FRO\WLFSKHQRW\SHK\SHUDPPRQHPLDK\SHUKRPRF\VWHLQHPLDSRUSK\ULD
ORZFKROHVWHURODQGELOHDFLGOHYHOV6LPLODUSDWWHUQRIDXWLVWLFPHWDERORQRPLFVLVVHHQLQWKH
QRUPDO 1DLU SRSXODWLRQ RI .HUDOD 1HDQGHUWKDO PHWDERORQRPLF SDWWHUQV LQFOXGH D ORZ
HIILFLHQF\ 3'+ DFWLYLW\ $XWLVWLF VFKL]RSKUHQLF DQG PDWULOLQHDO VRFLHWLHV OLNH 1DLU FDQ EH
FRQVLGHUHG DV IRVVLOLVHG UHPQDQWV RI WKH 1HDQGHUWKDO SRSXODWLRQ (QGRV\PELRWLF DFWLQLGLF
DUFKDHDXVLQJFKROHVWHURODVDQHQHUJ\VXEVWUDWHKDVEHHQGHVFULEHGLQV\VWHPLFGLVHDVHIURP
RXU ODERUDWRU\ 7KH DXWLVWLF VFKL]RSKUHQLF DQG 1DLU SRSXODWLRQ KDYH LQFUHDVHG DFWLQLGH
GHSHQGHQWF\WRFKURPH)DFWLYLW\VXJJHVWLYHRIHQGRV\PELRWLFDUFKDHDOJURZWK$UFKDHDO
LQGXFHG 3'+ DQG PLWRFKRQGULDO VXSSUHVVLRQ UHVXOWV LQ WKH DXWLVWLF DQG VFKL]RSKUHQLF
PHWDERORQRPLFFDVFDGH7KHLQFUHDVHGDUFKDHDOJURZWKLQH[WUHPRSKLOLFFRQGLWLRQVRIWKH,FH
DJH ZRXOG KDYH FRQWULEXWHG WR WKH HYROXWLRQ RI 1HDQGHUWKDO SRSXODWLRQ 7KHUH LV D ULVLQJ
HSLGHPLFRIDXWLVPDQGVFKL]RSKUHQLDLQGLFDWLQJ1HDQGHUWKDOLVDWLRQRIWKHKXPDQVSHFLHVGXH
WRJOREDOZDUPLQJH[WUHPHFOLPDWHFKDQJHDQGDUFKDHDOJURZWK*OREDOZDUPLQJLWVHOIFRXOG
EHFRQVWUXHGDVGXHWRLQFUHDVHGDUFKDHDOJURZWKDQGPHWKDQRJHQHVLV,WZRXOGLQGLFDWHWKH
HPHUJHQFH RI FXOWXUDO OLQJXLVWLF SV\FKRORJLFDO QHXURORJLFDO PHWDEROLF LPPXQH DQG
DQWKURSRPHWULF SKHQRW\SH KRPR DUFKDHD[ QHDQGHUWKDOLV 7KH DUFKDHDO V\PELRVLV DQG
QHDQGHUWKDOLVDWLRQ FDQ OHDG WR JHQHUDWLRQ RI HPHUJLQJ YLUXVHV OLNH &RYLG DV ZHOO DV
UHVLVWDQFH WR YLUDO LQIHFWLRQ 7KH DLP RI WKH VWXG\ DLPHG WR GHWHFW IRVVLOL]HG 1HDQGHUWKDO
PDWULOLQHDOVRFLHWLHVDQGQHZ1HDQGHUWKDOK\EULGVLQUHODWLRQWRFLYLOL]DWLRQDOGLVHDVHV

0DWHULDOVDQG0HWKRGV
)RXU JURXSV QXPEHUV LQ HDFK JURXS ZHUH FKRVHQ IRU WKH VWXG\ WKH DXWLVWLF
SRSXODWLRQGLDJQRVHGDFFRUGLQJWR'60FULWHULDWKHQRUPDO1DLUSRSXODWLRQWKHQRUPDOQRQ
1DLU SRSXODWLRQ DQG FLYLOL]DWLRQDO GLVHDVH JURXS LQFOXGLQJ PHWDEROLF V\QGURPH ;
$O]KHLPHU¶V GLVHDVH FDQFHU VFKL]RSKUHQLD DQG PXOWLSOH VFOHURVLV 7KH PDWULOLQHDO
FKDUDFWHULVWLFV DQG 1HDQGHUWKDO DQWKURSRPHWULF FKDUDFWHULVWLFV RI QRUPDO 1DLU DQG QRQ1DLU
SRSXODWLRQDVZHOODVDXWLVWLFDQGVFKL]RSKUHQLFSRSXODWLRQZHUHVWXGLHG7KHEORRGVDPSOHV
ZHUH GUDZQ LQ WKH IDVWLQJ VWDWH EHIRUH WUHDWPHQW ZDV LQLWLDWHG 7KH HVWLPDWLRQV GRQH LQ WKH
EORRG VDPSOHV FROOHFWHG LQFOXGH F\WRFKURPH ) DFWLYLW\ FKROHVWHURO R[LGDVH DFWLYLW\
FKROHVWHURO ULQJ R[LGDVH DFWLYLW\ FKROHVWHURO VLGH FKDLQ R[LGDVH DFWLYLW\ DQG FKROHVWHURO
DURPDWDVHDFWLYLW\GLJR[LQODFWDWHS\UXYDWHDPPRQLD$73JOXWDPDWHDFHW\O&R$DFHW\O
FKROLQH $/$ KRPRF\VWHLQH FKROHVWHURO DQG ELOH DFLG OHYHOV DV ZHOO DV F\WR & DQG
KH[RNLQDVH OHYHOV DFWLYLW\ $UFKDHDO FKROHVWHURO FDWDEROLVP ZDV VWXGLHG DV IROORZV 3ODVPD
IURP IDVWLQJ KHSDULQLVHG EORRG ZDV XVHG DQG WKH H[SHULPHQWDO SURWRFRO ZDV DV IROORZV ,
3ODVPDSKRVSKDWH EXIIHUHG VDOLQH ,, VDPH DV ,FKROHVWHURO VXEVWUDWH ,,, VDPH DV
,,FHULXPPJPO,9VDPHDV,,FLSURIOR[DFLQHDQGGR[\F\FOLQHHDFKLQDFRQFHQWUDWLRQ
RI PJPO &KROHVWHURO VXEVWUDWH ZDV SUHSDUHG DV GHVFULEHG E\ 5LFKPRQG $OLTXRWV ZHUH
ZLWKGUDZQ DW ]HUR WLPH LPPHGLDWHO\ DIWHU PL[LQJ DQG DIWHU LQFXEDWLRQ DW R& IRU KRXU
7KH IROORZLQJ HVWLPDWLRQV ZHUH FDUULHG RXW &\WRFKURPH ) SRO\F\FOLF DURPDWLF
K\GURFDUERQ K\GURJHQ SHUR[LGH S\UXYDWH DPPRQLD JOXWDPDWH GLJR[LQ EXW\UDWH
SURSLRQDWH DQG ELOH DFLGV &\WRFKURPH ) ZDV HVWLPDWHG IORXULPHWULFDOO\ H[FLWDWLRQ
ZDYHOHQJWKQPDQGHPLVVLRQZDYHOHQJWKQP3RO\F\FOLFDURPDWLFK\GURFDUERQZDV
HVWLPDWHG E\ PHDVXULQJ K\GURJHQ SHUR[LGH OLEHUDWHG E\ XVLQJ JOXFRVH UHDJHQW ,QIRUPHG
FRQVHQWRIWKHVXEMHFWVDQGWKHDSSURYDORIWKHHWKLFVFRPPLWWHHZHUHREWDLQHGIRUWKHVWXG\
7KHVWDWLVWLFDODQDO\VLVZDVGRQHE\$129$
7DEOH,QFLGHQFHRIDXWLVPLQ1DLUDXWLVWLFDQGQRQ1DLUSRSXODWLRQ
*URXSV $XWLVP 3HUFHQWDJH
1DLU FDVHV
1RQ1DLU FDVHV
7RWDO

7DEOH,QFLGHQFHRIVFKL]RSKUHQLDLQ1DLUDQGQRQ1DLUSRSXODWLRQ
*URXSV 6FKL]RSKUHQLD 3HUFHQWDJH
1DLU FDVHV
1RQ1DLU FDVHV
7RWDO
1DLUSRSXODWLRQLVRI.HUDODSRSXODWLRQ

7DEOH$QWKURSRPHWULFIHDWXUHVLQ1DLUDXWLVWLFDQGQRQ1DLUSRSXODWLRQ
1HDQGHUWKDO
*URXSV 7RWDO 3HUFHQWDJH
DQWKURSRPHWULF
1DLU FDVHV
1RQ1DLU FDVHV
$XWLVP FDVHV

7DEOHD$XWLVWLFPHWDERORQRPLFV
1RQ
1DLU &DQFHU '0 $XWLVP )YDOXH 3YDOXH
1DLU
5%&'LJR[LQ 0HDQ

QJPO5%&6XVS 6'
0HDQ
&\WRFKURPH)
6'
+2 0HDQ

XPROPO5%& 6'
12; 0HDQ

2'GLIIKUPJSUR 6'
0HDQ
71)$/3SJPO
6'
0HDQ
$/$XPRO
6'
0HDQ
6($73XPROGO
6'
0HDQ
&\WR&QJPO
6'
0HDQ
/DFWDWHPJGO
6'
0HDQ
3\UXYDWHXPROO
6'
5%&+H[RNLQDVH 0HDQ

XJJOXSKRVKUPJSUR 6'
0HDQ
$&2$PJGO
6'
0HDQ
$&+XJPO
6'
0HDQ
*OXWDPDWHPJGO
6'
0HDQ
6H$PPRQLDXJGO
6'
0HDQ
%LOH$FLGPJPO
6'
0HDQ
&KROHVWHUROPJGO
6'
0HDQ
+RPRF\VWHLQHPJGO
6'

7DEOHE$XWLVWLFPHWDERORQRPLFV
1RQ
1DLU 6FKL]R $' 06 )YDOXH 3YDOXH
1DLU
5%&'LJR[LQ 0HDQ

QJPO5%&6XVS 6'
0HDQ
&\WRFKURPH)
6'
+2 0HDQ

XPROPO5%& 6'
12; 0HDQ

2'GLIIKUPJSUR 6'
0HDQ
71)$/3SJPO
6'
0HDQ
$/$XPRO
6'
0HDQ
6($73XPROGO
6'
0HDQ
&\WR&QJPO
6'
0HDQ
/DFWDWHPJGO
6'
0HDQ
3\UXYDWHXPROO
6'
5%&+H[RNLQDVH 0HDQ

XJJOXSKRVKUPJSUR 6'
0HDQ
$&2$PJGO
6'
0HDQ
$&+XJPO
6'
0HDQ
*OXWDPDWHPJGO
6'
0HDQ
6H$PPRQLDXJGO
6'
0HDQ
%LOH$FLGPJPO
6'
0HDQ
&KROHVWHUROPJGO
6'
0HDQ
+RPRF\VWHLQHPJGO
6'

7DEOHD&KROHVWHUROR[LGDVHDFWLYLW\
1RQ
1DLU &DQFHU '0 $XWLVP )YDOXH 3YDOXH
1DLU
&<7) 0HDQ

,QFUHDVHZLWK&HULXP 6'
&<7) 0HDQ

'HFUHDVHZLWK'R[\&LSUR 6'
3$+FKDQJH 0HDQ

3$+FKDQJH 0HDQ

'LJR[LQQJPO 0HDQ

'LJR[LQQJPO 0HDQ

%LOH $FLGV FKDQJH 0HDQ


3\UXYDWHFKDQJH,QFUHDVH 0HDQ

ZLWK&HULXP 6'
3\UXYDWH FKDQJH 0HDQ

+2 0HDQ

+2 0HDQ

%XW\UDWH 0HDQ

%XW\UDWH 0HDQ

3URSLRQDWHFKDQJH 0HDQ


$73V\QWKDVH 0HDQ

$73 V\QWKDVH 'HFUHDVH 0HDQ

ZLWK'R[\&LSUR 6'
+H[RNLQDVH FKDQJH 0HDQ



7DEOHE&KROHVWHUROR[LGDVHDFWLYLW\
1RQ
1DLU 6FKL]R $' 06 )YDOXH 3YDOXH
QDLU
&<7) 0HDQ

&<7) 0HDQ

3$+FKDQJH 0HDQ

3$+FKDQJH 0HDQ

'LJR[LQQJPO 0HDQ

'LJR[LQQJPO 0HDQ





+2 0HDQ

+2 0HDQ

%XW\UDWH 0HDQ

%XW\UDWH 0HDQ



$73V\QWKDVH 0HDQ

$73 V\QWKDVH 'HFUHDVH 0HDQ

ZLWK'R[\&LSUR 6'



5HVXOWV
7KHUHVXOWVRIWKHVWXG\ZHUHDVIROORZV7KH1DLUVFKL]RSKUHQLFDQGDXWLVWLFJURXS
KDG LQFUHDVHG F\WRFKURPH ) DFWLYLW\ FKROHVWHURO R[LGDVH DFWLYLW\ ULQJ R[LGDVH
DFWLYLW\DURPDWDVHDFWLYLW\DQGGLJR[LQV\QWKHVLVKDGGHFUHDVHG3'+DFWLYLW\DVLQGLFDWHG
E\ LQFUHDVHG S\UXYDWH DQG ODFWDWH OHYHOV ZLWK ORZ DFHW\O &R$ OHYHOV KDG LQFUHDVHG
JO\FRO\VLV DV LQGLFDWHG E\ LQFUHDVHG KH[RNLQDVH DFWLYLW\ DQG PLWRFKRQGULDO G\VIXQFWLRQ DV
QRWHGE\LQFUHDVHGF\WR&DFWLYLW\LQWKHVHUXPDQGORZ$73OHYHOVKDGORZFKROHVWHURO
DQG ELOH DFLG OHYHOV DQG LQFUHDVHG KRPRF\VWHLQH OHYHOV KDG LQFUHDVHG *$%$ VKXQW
SDWKZD\DVLQGLFDWHGE\LQFUHDVHGS\UXYDWHJOXWDPDWHDQGDPPRQLDOHYHOVKDGLQFUHDVHG
SRUSK\ULQ V\QWKHVLV IURP VXEVWUDWHV JO\FLQH DQG VXFFLQ\O &R$ GHULYHG IURP *$%$ VKXQW
SDWKZD\ DV LQGLFDWHG E\ LQFUHDVHG $/$ OHYHOV 7KH QDLU VFKL]RSKUHQLF DXWLVWLF DQG
FLYLOL]DWLRQDOGLVHDVHJURXSKDGIHDWXUHVRI1HDQGHUWKDOPHWDEROLVPDVLQGLFDWHGE\S\UXYDWH
GHK\GURJHQDVHVXSSUHVVLRQ
7KHUHLVDQLQFUHDVHGLQFLGHQFHRIDXWLVPDQGVFKL]RSKUHQLDLQWKH1DLUFRPPXQLW\RI
.HUDOD ZLWK SHUFHQW RI WKH DXWLVWLF SDWLHQW SRSXODWLRQ RI DWWHQGLQJ WKH 0HWDEROLF
&HQWUHEHORQJLQJWRWKLVPDWULOLQHDOFRPPXQLW\7KHLQFLGHQFHRIVFKL]RSKUHQLDLQWKH1DLU
FRPPXQLW\ LV DURXQG 7KH DXWLVWLF SRSXODWLRQ VFKL]RSKUHQLF DQG WKH 1DLU SRSXODWLRQ
KDYH WKH 1HDQGHUWKDO DQWKURSRPHWULF SKHQRW\SH ZLWK VODQWLQJ IRUHKHDG ODUJH IDFH VWXEE\
QRVH SURPLQHQW PDQGLEOHV ORZ '' UDWLR ODUJH FRDUVH WUXQN PDFURFHSKDO\ DQG ORQJHU
VHFRQGWRHDVFRPSDUHGWRELJWRH
'LVFXVVLRQ
0DWULOLQHDOVRFLHWLHVDQG1HDQGHUWKDOK\EULGV
5HSRUWVLQGLFDWHWKDWWKHDXWLVWLFEUDLQLVODUJHUDQGVLPLODULQVL]HWRWKH1HDQGHUWKDO
EUDLQ 1HDQGHUWKDO VRFLHWLHV ZHUH PDWULOLQHDO DQG PDWULDUFKDO ZLWK IHPDOH GRPLQDQFH
$XWLVWLFVFKL]RSKUHQLFDQG1DLUPDWULOLQHDULW\KDGDOVRVLPLODULWLHVZLWK1HDQGHUWKDOFOXVWHUV
0DWULOLQHDOFXOWXUHDQGPDWULDUFK\DUHVHHQLQWKH1DLUVRFLHWLHVDQGWKH\VSHDND'UDYLGLDQ
ODQJXDJH7KHODQJXDJHDQGFXOWXUHRIWKHPDWULOLQHDO1DLUFRPPXQLW\LVVLPLODUWRWKH&HOWLF
%DVTXH %HUEHU DQG 6F\WKLDQ VRFLHWLHV 0DWULOLQHDO 1DLU VRFLHW\ ZLWK LWV KLJK LQFLGHQFH RI
DXWLVPDQG1HDQGHUWKDODQWKURSRPHWULFFKDUDFWHULVWLFVZRXOGUHSUHVHQWIRVVLOL]HGUHPQDQWVRI
WKH 1HDQGHUWKDO SRSXODWLRQ DORQJ ZLWK WKH &HOWLF -HZV 6XPHULDQ 0LQRDQ +DUDSSDQ
6F\WKLDQ %DVTXH 6RXWK $IULFDQ EXVKPHQ DQG %HUEHU VRFLHWLHV 7KHVH VRFLHWLHV DUH
SUHGRPLQDQWO\FKDUDFWHUL]HGE\WKHXVHRI'UDYLGLDQOLQJXLVWLFV7KH1HDQGHUWKDOIRVVLOL]HG

UHPQDQWVRFLHWLHVGHVFULEHGDERYHSUREDEO\LQKDELWDQWWKHP\WKRORJLFDO/HPXULDQFRQWLQHQW
WKHUHPQDQWVRIZKLFKKDYHEHHQGHVFULEHGXQGHUWKH,QGLDQRFHDQ7KHHQGRIWKHLFHDJH
UHVXOWHGLQIORRGVDQGEUHDNXSRI/HPXULDDQGWKHSRSXODWLRQPLJUDWHGWRWKH(XUDVLDQODQG
PDVVFUHDWLQJWKH+DUDSSDQFLYLOL]DWLRQWKH6XPHULDQFLYLOL]DWLRQWKH(J\SWLDQFLYLOL]DWLRQ
FHOWLF FLYLOL]DWLRQ DQG 0LQRDQ FLYLOL]DWLRQ ZKLFK ZHUH DOO FRWHUPLQXV 'UDYLGLDQ DQG
PDWULOLQHDO 7KH\ FDQ EH FRPSDUHG WR WKH P\WKRORJLFDO DVXUDV LQ WKH 9HGDV ZKRVH VRFLHW\
ZDV DOVR PDWULOLQHDO 7KHUH ZDV JHQGHU HTXDOLW\ DQG PDWULDUFKDO GRPLQDQFH 7KH DVXULF
VRFLHW\ RI WKH 9HGDV ZDV GHPRFUDWLF DQG PRUH HTXDO 7KH\ KDG H[WUDVHQVRU\ SHUFHSWLYH
FDSDELOLWLHV DQG H[WUHPH IRUP RI VSLULWXDOLW\ 7KH DVXULF VRFLHW\ LV UHSUHVHQWHG LQ WKH
'UDYLGLDQ6RXWK,QGLDZKHUHIHVWLYDOVOLNHRQDPLQFHOHEUDWLRQRIWKHDVXUDNLQJ0DKDEDOLDUH
FHOHEUDWHG ,W LV DQWKURSRORJLFDO HYLGHQFH RI WKH DVXULF RULJLQ RI WKH 'UDYLGLDQV 7KH
'UDYLGLDQV ZHUH RULJLQDOO\ VXSSRVHG WR KDYH HYROYHG LQ WKH FRQWLQHQW RI /HPXULD LQ WKH
,QGLDQ RFHDQ 7UDFHV RI WKLV PDVVLYH VXSHUFRQWLQHQW LQYROYLQJ ODQG PDVVHV RI 6RXWK ,QGLD
6RXWKHUQ$IULFD$XVWUDOLDDQG$QWDUFWLFDKDYHEHHQGHWHFWHGLQWKHRFHDQLFEHGRIWKH,QGLDQ
RFHDQ &HUWDLQ GLVHDVHV OLNH HQGRP\RFDUGLDO ILEURVLV FKURQLF FDOFLILF SDQFUHDWLWLV
PXOWLQRGXODU JRLWHU DQG PXFRLG DQJLRSDWK\ DUH VSHFLILF IRU VRXWK ,QGLD 6RXWK $IULFD DQG
$XVWUDOLDQ DERULJLQDOV $OO WKHVH FRPPXQLWLHV 6RXWK ,QGLDQ LQFOXGLQJ QDLUV EXVKPHQ DQG
$XVWUDOLDQDERULJLQDOVVSHDN'UDYLGLDQUHODWHGODQJXDJHVDQGDUHPDWULOLQHDO7KHVHHQGHPLF
GLVHDVHKDYHEHHQUHODWHGWRWKHDFWLQLGLFPRQD]LWHDQGLOOPHQLWHVHHQLQWKHRFHDQVKRUHVRI
6RXWK,QGLD6RXWK$IULFDDQG$XVWUDOLD7KLVLVIXUWKHUPHGLFDODQWKURSRORJLFDOHYLGHQFHRI
WKHRULJLQRIPDWULOLQHDOQHDQGHUWKDOLFDVXULFFRPPXQLWLHVIURPWKH/HPXULDQVXSHUFRQWLQHQW
7KLVVXSHUFRQWLQHQWDOVRHQFRPSDVVHGSDUWVRI$QWDUFWLFD7KH1HDQGHUWKDOVNLQFRORXUZDV
PRUHOLJKWHUDQGIDLUHUWRLQFUHDVH89DEVRUSWLRQDQGFRUUHFWYLWDPLQ'GHILFLHQF\VHHQLQ
WKLV JURXSV ZKLFK ZRXOG KDYH RULJLQDWHG LQ WKH $QWDUFWLF SDUW RI WKH /HPXULDQ
VXSHUFRQWLQHQW /LIH RULJLQDWHG LQ WKH /HPXULDQ VXSHUFRQWLQHQW RQ DFWLQLGLF VXEVWUDWHV
IRUPLQJ WKH RULJLQDO DUFKDHDO FHOO ZKLFK HYROYHG WR PXOWLFHOOXODU IRUPV 7KH 1HDQGHUWKDO
RULJLQZRXOGEHUHODWHGWRPDVVLYHH[WUHPRSKLOLFDUFKDHDOH[SDQVLRQZKLFKRFFXUUHGLQWKH
LFHDJH7KHDVXUDVRI9HGDVDQG5LJYHGLFGHVFULSWLRQVZRXOGILWLQZLWKD6RXWKHUQSRODU
RULJLQRIWKHHSLF7KHSULQFLSOH*RGRIWKH5LJYHGDZDV9DUXQDZKLFKZDVDQRFHDQLF*RG
DQGDVXUD7KHRWKHU*RGVRIWKH5LJ9HGD5XGUD9D\XDQG$JQLZHUHDOVRDVXUDV7KLVFDQ
LQGLFDWH D VRXWKHUQ /HPXULDQ RULJLQ IRU 9HGLF P\WKRORJ\ DQG LWV DVXULF 9HGLF *RGV 7KH
DVXULFVRFLHW\ZDVGHPRFUDWLFPRUHVRFLDOVSLULWXDOHFRFRQVFLRXVJHQGHUHTXDOPDWULOLQHDO
DQG VRFLDOLVWLF 7KH LFH DJH HQGHG DQG WKH IORRGV WKDW RFFXUUHG IROORZLQJ LW DV ZHOO DV WKH
PDVVLYH 7VXQDPLV LQ WKH ,QGLDQ RFHDQ EURNH XS WKH /HPXULDQ ODQG PDVV 7KLV KDV EHHQ

GHVFULEHG LQ 9HGLF OLWHUDWXUH RQ WKH 'UDYLGLDQ .LQJ 0DQX ZKR VXUYLYHG WKH IORRG DQG
PLJUDWHG QRUWK WR WKH (XUDVLDQ ODQG PDVV 7KH DVXULF 'UDYLGLDQV ZKR PLJUDWHG QRUWK
GHYHORSHGWKHPRGHUQFLWLHVRI+DUDSSDDQG0RKHQMRGDUR6XPHULD0LQRDQFLYLOL]DWLRQRI
&UHWH WKH (J\SWLDQ FLYLOL]DWLRQ WKH %DVTXH &HOW DQG %HUEHU VRFLHWLHV 7KH P\WKRORJ\ RI
WKHVHPDWULOLQHDOVRFLHWLHVKDYH6LYDDVWKHLU*RGLGHQWLILHGLQGLIIHUHQWQDPHVOLNH0LQRDQ
=HXVWKH&HOWLF&HUDQQRVDQGWKH,ULVK'UDJGD7KHODQJXDJHRIWKHVRFLHWLHVFRXOGEHUHODWHG
WR'UDYLGLDQDQGWKHVWUXFWXUHRIWKHVRFLHW\ZDVPDWULOLQHDOOLNHWKHDVXUDV7KHKRPRVDSLHQ
JURXSV HYROYHG LQ $IULFD LQ UHODWLRQ WR +(59 VHTXHQFHV LQ WKH KXPDQ JHQRPH +(59
VHTXHQFHVLQWKHJHQRPHFRQWULEXWHGWRIOXLGLW\DQGG\QDPLFQDWXUHRIWKHJHQRPHOHDGLQJWR
WKH HYROXWLRQ RI WKH SUHIURQWDO FRUWH[ GRPLQDQW KRPR VDSLHQ EUDLQ 7KH KRPR VDSLHQV
PLJUDWHG IURP $IULFD QRUWKZDUGV LQ WKH FHQWUDO (XUDVLDQ ODQGPDVV 7KH\ ZHUH D SULPLWLYH
QRPDGLFVRFLHW\ZLWKRXWDQXUEDQFXOWXUHP\WKRORJ\ODQJXDJHRUDUWV7KH'HYDVRIWKH5LJ
9HGDZRXOGEHWKHVHKRPRVDSLHQJURXSVZKLFKPLJUDWHGRXWRI$IULFDLQWR(XURSHDWDODWHU
VWDJHDQGVHWWOHGLQFHQWUDO(XUDVLDZLWKWKHLUOLJKWHUFRORXUDVDQDGDSWDWLRQIRULQFUHDVHG89
DEVRUSWLRQDQGYLWDPLQ'V\QWKHVLVLQWKHFROGHUUHJLRQV7KHEDWWOHVEHWZHHQWKHDVXUDVDQG
GHYDV ZHUH DWWHPSWV E\ WKH FHQWUDO $VLDQ KRPR VDSLHQ SRSXODWLRQ WR RYHUFRPH DQG VXEGXH
WKH DVXUDV WR LQKDELWHG WKH ,QGXV 9DOOH\ DQG FUHDWHG WKH FLYLOL]DWLRQ LQ +DUDSSD DQG
0RKHQMRGDUR 7KH GHIHDWHG DVXULF 'UDYLGLDQVRI 0RKHQMDGDUR DQG +DUDSSD PLJUDWHG VRXWK
DQG VHWWOHG LQ WKHLU RULJLQDO KRPH ODQG LQ 6RXWK ,QGLD 7KH PDWULOLQHDO 'UDYLGLDQ QDLU
FRPPXQLW\ZLWKLQFUHDVHGDXWLVWLFUDWHVEHORQJVWRWKLVJURXS

$XWLVWLFDQG1HDQGHUWKDOPHWDERORQRPLFV
$XWLVWLF VFKL]RSKUHQLF DQG 1DLU PHWDERORQRPLF SDWWHUQV KDG VLPLODULWLHV ZLWK
1HDQGHUWKDOVSRSXODWLRQ1HDQGHUWKDOVKDYHDORZHIILFLHQWS\UXYDWHGHK\GURJHQDVHDFWLYLW\
7KH1HDQGHUWKDOVGLHWZDVULFKLQSURWHLQDQGIDWDQGORZLQFDUERK\GUDWH.HWRQHERG\ZDV
XVHG DV WKH HQHUJ\ IXHO DQG GRHV QRW QHHG WKH LQVXOLQ UHFHSWRU IRU PHWDEROLVP 7KHUHIRUH
LQVXOLQUHVLVWDQFHGHYHORSHGDVDSDUWRIWKH1HDQGHUWKDOGLHWDQGWKH1HDQGHUWKDOSKHQRW\SH
LVDNLQWRWKHPHWDEROLFV\QGURPHSKHQRW\SH$VWKHUHZDVOHVVQHHGWRPHWDEROL]HJOXFRVH
RZLQJWRDQLQWDNHRIKLJKIDWKLJKSURWHLQGLHWWKHHQ]\PHS\UXYDWHGHK\GURJHQDVHZRXOG
KDYH HYROYHG LQWR D ORZ HIILFLHQF\ V\VWHP ,QVXOLQ UHVLVWDQFH ZRXOG KDYH FRQWULEXWHG WR
OLSRJHQHVLV DV D SURWHFWLYH DGDSWDWLRQ DJDLQVW WKH FROG FOLPDWH RI WKH ,FH DJH ,QVXOLQ
UHVLVWDQFH DQG NHWRJHQLF GLHW ZRXOG KDYH FRQWULEXWHG WR WKH ORQJHYLW\ RI WKH 1HDQGHUWKDO
SRSXODWLRQ,QVXOLQUHVLVWDQFHKDVEHHQUHODWHGWRDXWLVP3\UXYDWHGHK\GURJHQDVHGHILFLHQF\
OHDGVWRORZDFHW\O&R$OHYHOV7KLVOHDGVWRDGRZQUHJXODWHGPHYDORQDWHSDWKZD\DQGORZ

FKROHVWHURO V\QWKHVLV /RZ FKROHVWHURO OHYHOV DUH UHODWHG WR DXWLVP 6PLWK /HPOL 2SLW]
V\QGURPH LV UHODWHG WR DXWLVP DQG VFKL]RSKUHQLD /RZ FKROHVWHURO YDOXHV ZRXOG KDYH
FRQWULEXWHGWRYLWDPLQ'GHILFLHQF\LQ1HDQGHUWKDOV9LWDPLQ'GHILFLHQF\DQGULFNHWVZRXOG
H[SODLQWKHVNHOHWDODEQRUPDOLWLHVDQGPDFURFHSKDO\RI1HDQGHUWKDOV9LWDPLQ'GHILFLHQF\
ZRXOG KDYH OHG WR IDLUHU FRPSOH[LRQ RI WKH 1HDQGHUWKDOV LQ YLHZ RI LQFUHDVHG QHHG RI
FXWDQHRXV 89 UD\ DEVRUSWLRQ WR SURPRWH LQFUHDVHG YLWDPLQ ' V\QWKHVLV WR FRUUHFW LWV
GHILFLHQF\ &KROHVWHURO FDWDEROLVLQJ HQGRV\PELRWLF DFWLQLGLF DUFKDHD KDV EHHQ GHVFULEHG LQ
V\VWHPLF DQG QHXURSV\FKLDWULF GLVHDVH IURP RXU ODERUDWRU\ 7KHUH LV LQFUHDVHG DFWLQLGH
GHSHQGHQW F\WRFKURPH ) DFWLYLW\ LQ DXWLVWLF VFKL]RSKUHQLF DQG QRUPDO 1DLU SRSXODWLRQ
7KLV LQGLFDWHV LQFUHDVHG HQGRV\PELRWLF DUFKDHDO JURZWK ZKLFK VXSSUHVVHV S\UXYDWH
GHK\GURJHQDVHDFWLYLW\$XWLVWLFVFKL]RSKUHQLFDQG1DLUPHWDERORQRPLFSDWWHUQVLQFOXGHORZ
HIILFLHQF\S\UXYDWHGHK\GURJHQDVHDFWLYLW\FRQWULEXWLQJWRS\UXYLFDFLGHPLD3\UXYDWHLVQRW
FRQYHUWHG WR DFHW\O &R$ $FHW\O &R$ GHILFLHQF\ UHVXOWV LQ PLWRFKRQGULDO R[LGDWLYH
SKRVSKRU\ODWLRQ GHIHFWV DQG PLWRFKRQGULDO G\VIXQFWLRQ (QHUJ\ LV REWDLQHG IURP JO\FRO\VLV
DQGWKLVOHDGVWRWKHJHQHVLVRIWKH:DUEXUJSKHQRW\SH7KHDFWLQLGHGHSHQGHQWKH[RNLQDVH
DFWLYLW\ DQG DFWLQLGH GHSHQGHQW $73 V\QWKDVH DFWLYLW\ ZHUH KLJK EXW WKH EORRG $73 OHYHOV
ZHUH ORZ 7KH F\WR & DFWLYLW\ LQ WKH EORRG ZDV KLJK LQGLFDWLQJ PLWRFKRQGULDO G\VIXQFWLRQ
7KHS\UXYDWHLVFKDQQHOHGWRWKH*$%$VKXQWSDWKZD\WRJOXWDPDWH*OXWDPDWHLVDFWHGXSRQ
E\JOXWDPDWHGHK\GURJHQDVHJHQHUDWLQJDPPRQLDZKLFKDFWVDVDJDVRWUDQVPLWWHUPRGXODWLQJ
WKDODPRFRUWLFRWKDODPLF *$%$10'$ IXQFWLRQ DQG FRQVFLRXVQHVV 7KH *$%$ VKXQW
SDWKZD\ DOVR JHQHUDWHV VXFFLQ\O &R$ DQG JO\FLQH ZKLFK DUH VXEVWUDWHV IRU SRUSK\ULQ
V\QWKHVLVFRQWULEXWLQJWRSRUSK\ULQXULD6LQFHJO\FLQHLVXWLOL]HGIRUSRUSK\ULQV\QWKHVLVLWLV
QRW DYDLODEOH IRU F\VWDWKLRQLQH V\QWKHVLV 7KLV FRQWULEXWHV WR K\SHUKRPRF\VWHLQHPLD DQG
K\SHUPHWKLRQHPLD PRGXODWLQJ JHQRPLF PHWK\ODWLRQ SDWWHUQV +\SHUKRPRF\VWHLQHPLD
K\SHUDPPRQHPLDDQGSRUSK\ULQXULDDUHFKDUDFWHULVWLFRIDXWLVPDQGVFKL]RSKUHQLD7KHORZ
DFHW\O &R$ OHDGV WR ORZ FKROHVWHURO V\QWKHVLV DQG ORZ ELOH DFLG DV ZHOO DV YLWDPLQ '
V\QWKHVLV9LWDPLQ'DQGELOHDFLGVELQGWRWKH9'5SURGXFLQJLPPXQRVXSSUHVVLRQDQGWKHLU
GHILFLHQF\FRQWULEXWHVWRWKHDXWRLPPXQLW\RIDXWLVPDQGVFKL]RSKUHQLD9LWDPLQ'DQGELOH
DFLG GHILFLHQF\ FDQ PRGXODWH QHRFRUWLFDO GHYHORSPHQW DQG FRQWULEXWH WR DXWLVP DQG
VFKL]RSKUHQLD/RZFKROHVWHUROOHYHOVFDQFRQWULEXWHWRORZVH[KRUPRQHOHYHOVDQGOHVVZHOO
GHILQHGJHQGHUSKHQRW\SHVLQDXWLVPDQGVFKL]RSKUHQLD3\UXYDWHGHK\GURJHQDVHIRUPVSDUW
RI WKH HQ]\PH V\VWHP R[RDFLG GHK\GURJHQDVHV ZKLFK ZHUH DOO GHILFLHQW LQ 1HDQGHUWKDOV
VFKL]RSKUHQLFDQGDXWLVWLFJURXSV7KHRWKHUHQ]\PHVLQFOXGHGDUHEUDQFKHGFKDLQNHWRDFLG
GHK\GURJHQDVH JO\FLQH FOHDYDJH HQ]\PH JO\FLQH GHFDUER[\ODVH ZKLFK DUH GHILFLHQW LQ

DXWLVP VFKL]RSKUHQLF DQG 1HDQGHUWKDOV 7KH EUDQFKHG FKDLQ NHWRDFLG GHK\GURJHQDVH
GHILFLHQF\OHDGVWRLQFUHDVHLQEUDQFKHGFKDLQDPLQRDFLGVOHXFLQHLVROHXFLQHDQGYDOLQH7KH
LQFUHDVHLQEUDQFKHGFKDLQDPLQRDFLGVOHDGVWRPHWDEROLFV\QGURPH;DQGGLDEHWHVPHOOLWXV
7KH LQFUHDVH LQ EUDQFKHG FKDLQ DPLQR DFLGV FDQ DOVR SURGXFH LPPXQH DFWLYDWLRQ DQG
DXWRLPPXQHGLVHDVH7KHLQFUHDVHLQEUDQFKHGFKDLQDPLQRDFLGVFDQDIIHFWWKHWUDQVSRUWRI
WU\SWRSKDQ DQG W\URVLQH WKURXJK WKH QHXWUDO DPLQR DFLG WUDQVSRUWHU OHDGLQJ WR GHILFLHQF\ RI
PRQRDPLQH WUDQVPLVVLRQ 7KH EUDQFKHG FKDLQ DPLQR DFLGV FDQ LQFUHDVH 10'$ DFWLYDWLRQ
SURGXFLQJQHXURQDOH[FLWDELOLW\FRQWULEXWLQJWRQHXURGHJHQHUDWLYHGLVRUGHUV7KHDOWHUDWLRQLQ
10'$ DQG PRQRDPLQH WUDQVPLVVLRQ FDQ OHDG WR QHXURSV\FKLDWULF GLVHDVH 7KH EUDQFKHG
FKDLQDPLQRDFLGVFDQLQFUHDVHWKHPXVFOHEXONDQGVWUHQJWKFRQWULEXWLQJWRWKH1HDQGHUWKDO
SKHQRW\SH 7KH GHILFLHQF\ RI JO\FLQH FOHDYDJH HQ]\PH JO\FLQH GHFDUER[\ODVH FDQ OHDG WR
DFFXPXODWLRQRIJO\FLQH7KHEUDQFKHGFKDLQDPLQRDFLGVLWVHOILQKLELWVWKHJO\FLQHFOHDYDJH
HQ]\PH 7KH 3'+ GHILFLHQF\ OHDGV WR LQFUHDVHG JO\FRO\VLV FRQWULEXWLQJ WR LQFUHDVHG
SKRVSKRJO\FHUDWH SKRVSKRVHULQH DQG VHULQH V\QWKHVLV / VHULQH LV FRQYHUWHG WR ' VHULQH E\
VHULQH UDFHPDVH ' VHULQH DQG JO\FLQH FDQ LQFUHDVH 10'$ WUDQVPLVVLRQ FRQWULEXWLQJ WR
QHXURSV\FKLDWULF GLVHDVHV OLNH DXWLVP DQG VFKL]RSKUHQLD DV ZHOO DV QHXURGHJHQHUDWLRQ
*O\FLQH LWVHOI LV DQ LQKLELWRU\ QHXURWUDQVPLWWHU LQ WKH EUDLQ 6HULQH LV LPPXQH DFWLYDWLQJ
FRQWULEXWLQJWRDXWRLPPXQHGLVHDVH*O\FLQHLVLPPXQRVXSSUHVVLYH6HULQHJO\FLQHUDWLRVFDQ
PRGXODWHLPPXQLW\DQG10'$WUDQVPLVVLRQ6HULQHFDQFRQWULEXWHWRFHOOSUROLIHUDWLRQDQG
FDQFHU *O\FLQH RQ WKH RWKHU KDQG LQKLELWV FHOO SUROLIHUDWLRQ 6HULQH E\ WKH DFWLRQ VHULQH
SDOPLWR\O WUDQVIHUDVH FDQ JHQHUDWH VSKLQJROLSLGV 'HR[\VSKLQJROLSLGV DUH DWKHURJHQLF DQG
FRQWULEXWH WR WKH PHWDEROLF V\QGURPH ; 7KXV WKH R[RDFLG GHK\GURJHQDVHV S\UXYDWH
GHK\GURJHQDVH EUDQFKHG FKDLQ NHWR DFLG GHK\GURJHQDVH DQG JO\FLQH GHFDUER[\ODVH
G\VIXQFWLRQ LQ 1HDQGHUWKDOV DQG DXWLVP FDQ FRQWULEXWH WR QHXURSV\FKLDWULF
QHXURGHJHQHUDWLYH FDQFHU DXWRLPPXQH GLVHDVH DQG PHWDEROLF V\QGURPH $OWHUDWLRQV LQ
VHULQHJO\FLQH UDWLRV DQG RUJDQLF DFLGXULDV DUH VHHQ LQ DXWLVP VFKL]RSKUHQLD DXWRLPPXQH
GLVHDVH WXPRXUV PHWDEROLF V\QGURPH DQG GHJHQHUDWLRQV $V VDLG EHIRUH WKH
K\SHUDPPRQHPLD SRUSK\ULD DQG K\SHUKRPRF\VWHLQHPLD VHHQ LQ DXWLVP DQG VFKL]RSKUHQLD
DUHFRQWULEXWHGE\1HDQGHUWKDOJHQHVDQG1HDQGHUWKDOPHWDEROLVP

$XWLVWLFPHWDERORQRPLFVDQGV\VWHPLFGLVHDVHV
7KHDXWLVWLFDQGVFKL]RSKUHQLFQHDQGHUWKDOLFPHWDERORQRPLFSKHQRW\SHLVDOVRVHHQLQ
FDQFHU DXWRLPPXQH GLVHDVH GHJHQHUDWLRQ PHWDEROLF V\QGURPH ; ZKLFK FDQ FRH[LVW ZLWK
VFKL]RSKUHQLD 7KLV LV GXH WR D YDJDO QHXURSDWK\ GXH WR GHIHFWLYH DFHW\O FKROLQH V\QWKHVLV

FRQVHTXHQWWRODFNRIVXEVWUDWHDFHW\O&R$7KLVDOVROHDGVWRV\PSDWKHWLFRYHUDFWLYLW\9DJDO
QHXURSDWK\LVDVVRFLDWHGZLWKLPPXQHDFWLYDWLRQDQGDXWRLPPXQHGLVHDVH9DJDOQHXURSDWK\
FDQ FRQWULEXWH WR LQVXOLQ UHVLVWDQFH DQG LQFUHDVHG V\PSDWKHWLF DFWLYLW\ WR QHRSODVWLF
WUDQVIRUPDWLRQ 7KH FKROHVWHURO V\QWKHWLF GHIHFW OHDGV WR GHIHFWLYH V\QDSWRJHQHVLV VHHQ LQ
DXWLVP DQG VFKL]RSKUHQLD &KROHVWHURO GHULYHG ELOH DFLG DQG YLWDPLQ ' GHILFLHQF\ FDQ
FRQWULEXWH WR VFKL]RSKUHQLD DQG DXWLVP &KROHVWHURO LV LQYROYHG LQ FRQWDFW LQKLELWLRQ DQG
ZKHQWKHPHPEUDQHVDUHGHIHFWLYHFDQOHDGWRFHOOSUROLIHUDWLRQ/RZFKROHVWHUROOHYHOVOHDG
WR ORZ YLWDPLQ ' DQG ELOH DFLG OHYHOV ERWK RI ZKLFK ELQG WR 9'5 SURGXFLQJ
LPPXQRVXSSUHVVLRQ 7KLV FDQ FRQWULEXWH WR DXWRLPPXQLW\ 9LWDPLQ ' GHILFLHQF\ FDQ
FRQWULEXWH WR LQVXOLQ UHVLVWDQFH DQG PHWDEROLF V\QGURPH SKHQRW\SH LQ 1HDQGHUWKDOV %LOH
DFLGV IXQFWLRQ DV KRUPRQHV UHJXODWLQJ OLSLG DQG JOXFRVH PHWDEROLVP DQG LWV GHILFLHQF\ FDQ
DOVR FRQWULEXWH WR V\QGURPH ; DQG LQVXOLQ UHVLVWDQFH 7KH :DUEXUJ SKHQRW\SH FDQ DOVR
FRQWULEXWH WR FLYLOL]DWLRQDO GLVHDVHV 7KH LQFUHDVH LQ PLWRFKRQGULDO 37 SRUH KH[RNLQDVH FDQ
FRQWULEXWH WR FHOO SUROLIHUDWLRQ DQG FDQFHU 7KH LQFUHDVH LQ *$3' JO\FHUDOGHK\GH
SKRVSKDWHGHK\GURJHQDVHFDQFRQWULEXWHWRLWV$'3ULERV\ODWLRQDQGQXFOHDUFHOOGHDWK7KH
LQFUHDVH LQ JO\FRO\VLV FDQ FRQWULEXWH WR O\PSKRF\WHV DFWLYDWLRQ DQG DXWRLPPXQH GLVHDVHV
7KH0+&JHQHVDUHRI1HDQGHUWKDORULJLQDQGDXWRLPPXQLW\LVUHODWHGWR1HDQGHUWKDO0+&
DOOHOHV$XWRLPPXQLW\DQGDQWLEUDLQDQWLERGLHVDUHFKDUDFWHULVWLFRIDXWLVPDQGVFKL]RSKUHQLD
7KH SKRVSKRJO\FHUDWH D JO\FRO\WLF PHWDEROLWH FDQ EH FRQYHUWHG WR VHULQH D PRGXODWRU RI
10'$ UHFHSWRU DQG LQKLELWRU\ QHXURWUDQVPLWWHU JO\FLQH 7KH LQFUHDVH LQ IUXFWRVH
GLSKRVSKDWH UHVXOWV LQ LWV FKDQQHOLQJ WR WKH SHQWRVH SKRVSKDWH SDWKZD\ JHQHUDWLQJ 1$'3+
VWLPXODWLQJ12;DQGUHGR[VWUHVVFRQWULEXWLQJWRGLVHDVH12;LVDOVRLQYROYHGLQ10'$
DFWLYLW\5HGR[VWUHVVDQGLQFUHDVHG10'$DFWLYLW\FRQWULEXWLQJWRWKDODPRFRUWLFRWKDODPLF
SDWKZD\G\VIXQFWLRQLVLPSRUWDQWLQVFKL]RSKUHQLD7KXVWKHJHQHUDWLRQRIDWDYLVWLFDUFKDHDO
PHWDEROLFLPPXQHDQGQHXURQDOSKHQRW\SHFDQFRQWULEXWHWRVFKL]RSKUHQLD

$FWLQLGLFDUFKDHDDQG1HDQGHUWKDOK\EULGV
7KH IXUWKHU JOREDO ZDUPLQJ UHODWHG LQFUHDVH LQ DUFKDHDO JURZWK OHDGV WR DQ DWDYLVWLF
DUFKDHDOHQGRV\PELRWLFFRORQ\ZLWKLWVRZQPHWDEROLFSKHQRW\SH7KHDUFKDHDDUHDFWLQLGH
GHSHQGHQW DQG XVH FKROHVWHURO DV DQ HQHUJ\ VXEVWUDWH 7KH LQFUHDVHG DUFKDHDO FKROHVWHURO
FDWDEROLVP SURGXFHV HQGRJHQRXV GLJR[LQ V\QWKHVLV ZKLFK LQKLELWV PHPEUDQH VRGLXP
SRWDVVLXP $73DVH DFWLYLW\ OHDGLQJ WR LQFUHDVH LQ LQWUDFHOOXODU FDOFLXP DQG UHGXFWLRQ LQ
LQWUDFHOOXODU PDJQHVLXP ,QFUHDVH LQ LQWUDFHOOXODU FDOFLXP SURGXFHV FDOFLILHG QDQRDUFKDHD
ZKLFK FDQ H[LVW IRU HWHUQLW\ 7KH QDQRDUFKDHD DV LQ WKH FDVH RI LJQRFRFFXV KRVSLWDOLV FDQ

SURGXFHPXOWLFHOOXODUWLVVXHIRUPVUHVXOWLQJLQDDWDYLVWLFDFWLQLGLFDUFKDHDOFRORQ\QHWZRUN
ZLWKLQWKHFHOO5HYHUVHWUDQVFULSWDVHDFWLYLW\RI+(59RULJLQFDQLQWHJUDWHDUFKDHDOJHQRPHV
LQWR WKH KXPDQ JHQRPH DV KDV EHHQ GHPRQVWUDWHG ZLWK UHJDUG WR WU\SDQRVRPDO JHQRPHV LQ
&KDJDVGLVHDVH7KHLQFUHDVHGH[SUHVVLRQRIDUFKDHDOJHQHVDQGLQWHJUDWHGLQWRKXPDQJHQHV
DV D FRQVHTXHQFH RI R[LGDWLYH VWUHVV SURGXFHG E\ JOREDO ZDUPLQJ DQG LFH DJH UHVXOWLQJ LQ
+'$&LQKLELWLRQDQGGHPHWK\ODWLRQ7KHHQGRJHQRXVDUFKDHDOJHQRPHVZKHQH[SUHVVHGFDQ
OHDG WR DUFKDHDO PXOWLSOLFDWLRQ LQ WKH V\VWHP 7KH EDVLV RI RULJLQ RI 1HDQGHUWKDO K\EULGV LV
H[SUHVVLRQ DQG PXOWLSOLFDWLRQ RI HQGRJHQRXV DUFKDHDO VHTXHQFHV LQ WKH JHQRPH 7KH
1HDQGHUWKDOV ZRXOG KDYH HYROYHG GXH WR FKDQJHV LQ WKH QRQ FRGLQJ DUHD RI WKH SULPDWH
JHQRPHFRQVHTXHQWWRLQWHJUDWLRQRIDUFKDHDOJHQRPHVLQWRSULPDWHJHQRPHVLQWKHLFHDJH
*OREDO ZDUPLQJ DQG FRROLQJ KDV EHHQ SRVWXODWHG WR OHDG WR LQFUHDVHG SURSDJDWLRQ RI
H[WUHPRSKLOLFDUFKDHDOFRORQLHV,QIDFWJOREDOZDUPLQJKDVEHHQUHODWHGWRLQFUHDVHGUHOHDVH
RIPHWKDQHIURPPXOWLSO\LQJDUFKDHDOFRORQLHVLQWKHRFHDQEHG'XULQJSHULRGVRIH[WUHPH
FOLPDWHFKDQJHWKHH[WUHPRSKLOLFDUFKDHDXQGHUJRHVH[SDQVLRQQRWRQO\LQWKHHQYLURQPHQW
EXW DOVR LQ WKH QRQ FRGLQJ DUHD RI WKH KXPDQ JHQRPH 7KLV E\ JOREDO ZDUPLQJ UHODWHG
R[LGDWLYH VWUHVV UHODWHG +'$& LQKLELWLRQ RI UHYHUVH WUDQVFULSWDVH DFWLYDWLRQ DQG LQWHJUDVH
H[SUHVVLRQ ZKLFK UHLQWHJUDVH WKH PXOWLSOLHG DUFKDHDO JHQRPHV LQWR WKH KXPDQ JHQRPHV
+RPR QHDQGHUWKDOLV ZRXOG KDYH HYROYHG DV D FRQVHTXHQFH RI DUFKDHDO H[SDQVLRQ LQ WKH
KXPDQ JHQRPH LQ WKH LFH DJH DQG WKH SUHVHQW LQFUHDVHG WHQGHQF\ IRU H[SUHVVLRQ RI
1HDQGHUWKDO DXWLVWLF K\EULG SKHQRW\SHV ZRXOG UHVXOW IURP WKH SKHQRPHQD RI DUFKDHDO
H[SDQVLRQLQWKHKXPDQJHQRPHSURGXFHGE\JOREDOZDUPLQJ7KHDUFKDHDOH[SDQVLRQZRXOG
UHVXOW IURP FLYLOL]DWLRQDO DQG LQGXVWULDO DFWLYLW\ RI KRPR VDSLHQ SRSXODWLRQ 7KLV UHVXOWV LQ
LQFUHDVHGJUHHQKRXVHJDVHPLVVLRQVDQGFDUERQGLR[LGHSURGXFWLRQOHDGLQJWRHQYLURQPHQWDO
DQGV\PELRWLFDUFKDHDOPXOWLSOLFDWLRQ6\PELRWLFDUFKDHDOPXOWLSOLFDWLRQUHVXOWVLQLQFUHDVHG
DUFKDHDO LQWHJUDWLRQ LQWR WKH QRQ FRGLQJ UHJLRQ RI JHQRPH DQG H[SUHVVLRQ RI 1HDQGHUWKDO
K\EULGV 7KH HQYLURQPHQWDO DUFKDHDO PXOWLSOLFDWLRQ UHVXOWV LQ PHWKDQRJHQHVLV ZKLFK
DFFHOHUDWHV JHRPHWULFDOO\ WKH JOREDO ZDUPLQJ HQKDQFLQJ WKH SURFHVV DOUHDG\ VHW LQ PRWLRQ
7KH LQFUHDVH LQ DUFKDHDO PXOWLSOLFDWLRQ DQG JOREDO ZDUPLQJ ZLOO PHOW WKH SRODU LFH FDSV
WULJJHULQJ PDVVLYH IORRGV DQG FDWDVWURSKLF H[WLQFWLRQV 7KH PXOWLSOLFDWLRQ RI DUFKDHD LQ WKH
RFHDQEHGVFDQWULJJHUHDUWKTXDNHVLQWKHRFHDQEHGVDQGPDVVLYHWVXQDPLVDQGIORRGVODQG
FRQWLQHQWDO EUHDN GRZQ 7KH F\FOH RI <XJDV GHVFULEHG LQ YHGLF P\WKRORJ\ ZRXOG EH D
FRQVHTXHQFHRIFOLPDWHFKDQJHUHODWHGFDWDVWURSKLFH[WLQFWLRQVDQGVXEVHTXHQWUHJHQHUDWLRQ
RI OLIH 7KH DFWLQLGLF DUFKDHD DOVR EHLQJ H[WUHPRSKLOLF FDQ LQKDELW WKH LQWHUJDODFWLF VSDFHV
FRQWULEXWLQJWRLQWHUJDODFWLFPDJQHWLFILHOGVZKRVHURWDWLRQZKLFKOHDGVWRHYROXWLRQRIVWDU

V\VWHPV6HHGLQJRIOLIHRQHDUWKZRXOGKDYHFRPHRXWRIDVWHURLGVWUDQVSRUWLQJWKHDFWLQLGLF
DUFKDHD LQWR WKH HDUWK 7KLV ZRXOG KDYH OHG WR VXEVHTXHQW HYROXWLRQ RI WKH PXOWLFHOOXODU
RUJDQLVP SULPDWHV DQG ODWHU RQ 1HDQGHUWKDO JURXSV 7KH KRPR QHDQGHUWKDOLV KDYH WKH
$32%(&SKHQRW\SHZKLFKPDNHVWKHPUHVLVWDQWWRUHWURYLUDOLQIHFWLRQVDQGWKH+(59ORDG
LQWKH1HDQGHUWKDOJHQRPHLVOHVV7KHLQFUHDVHGDUFKDHDOJURZWKDQGFKROHVWHUROFDWDEROLVP
LQ1HDQGHUWKDOVVFKL]RSKUHQLFDQGDXWLVWLFSKHQRW\SHVOHDGWRLQFUHDVHGHQGRJHQRXVGLJR[LQ
V\QWKHVLV'LJR[LQSURGXFHVVRGLXPSRWDVVLXP$73DVHLQKLELWLRQDQGPDJQHVLXPGHILFLHQF\
LQWUDFHOOXODUO\ 0DJQHVLXP GHILFLHQF\ LQKLELWV UHYHUVH WUDQVFULSWDVH DFWLYLW\ DQG +(59
H[SUHVVLRQ7KHUHIRUHUHWURYLUDOH[SUHVVLRQPXOWLSOLFDWLRQDQGLQWHJUDWLRQLQWRWKHJHQRPHLV
GHIHFWLYH LQ 1HDQGHUWKDOV DXWLVP DQG VFKL]RSKUHQLD 7KLV OHDGV WR OHVV G\QDPLFLW\ DQG
IOXLGLW\ RI WKH 1HDQGHUWKDO JHQRPH OHDGLQJ WR GHIHFWLYH V\QDSWLF FRQQHFWLYLW\ ODUJH VL]HG
EUDLQV DQG VPDOOHU SUHIURQWDO FRUWH[ 7KH GHILFLHQW V\QDSWLF FRQQHFWLYLW\ RFFXUV GXH WR WZR
IDFWRUV7KHFKROHVWHUROV\QWKHVLVLVOHVVDQGWKHJOLDOFKROHVWHUROVHFUHWLRQDFWVDVDWURSKLF
IDFWRU IRU V\QDSWRJHQHVLV 7KH +(59 H[SUHVVLRQ OHDGV RQWR MXPSLQJ JHQHV ZKLFK DUH
UHVSRQVLEOH IRU WKH IOXLGLW\ DQG G\QDPLFLW\ RI WKH JHQRPH UHTXLUHG IRU WKH GHYHORSPHQW
FRPSOH[ ODUJH QHXURQDO QHWZRUNV 7KLV OHDGV WR WKH GHYHORSPHQW RI ODUJH EUDLQ VL]H DV LQ
DXWLVPDQG1HDQGHUWKDOV7KHFHUHEUDOFRUWH[DQGFHUHEHOOXPDUHERWKODUJH7KHFHUHEHOOXP
FRQWDLQVSHUFHQWRIWKHQHXURQVLQWKHEUDLQ7KHUHIRUHLQWKHDEVHQFHRIFRPSOH[QHXURQDO
QHWZRUNVLQWKHFHUHEUDOFRUWH[HVSHFLDOO\SUHIURQWDOFRUWH[WKHFHUHEHOOXPEHFRPHVGRPLQDQW
DQGIXQFWLRQVDVWKHPDVWHURIWKHEUDLQ7KHKRPRVDSLHQVODFNWKH$32%(&SKHQRW\SHDQG
UHWURYLUDO UHVLVWDQFH 7KH KRPR VDSLHQV GLG QRW KDYH DUFKDHDO RYHUJURZWK FKROHVWHURO
FDWDEROLVP DQG GLJR[LQ V\QWKHVLV 7KHUH ZDV QR GLJR[LQ LQGXFHG UHYHUVH WUDQVFULSWDVH
LQKLELWLRQ7KH+(59H[SUHVVLRQDQGLWVLQWHJUDWLRQLQWRWKHJHQRPHYLDUHYHUVHWUDQVFULSWDVH
DFWLYLW\OHGWRLQFUHDVHLQQRQFRGLQJUHJLRQRIWKHJHQRPH5HWURYLUDOHSLGHPLFVLQ$IULFDQ
SULPDWHV FRQWULEXWHG WR WKH HYROXWLRQ RI KRPR VDSLHQV DQG WKHLU EUDLQ LQ $IULFD 7KH KRPR
VDSLHQVHYROYHGFRQVHTXHQWWRH[SDQVLRQRI+(59VHTXHQFHVLQWKHJHQRPHFRQVHTXHQWWR
SHUVLVWHQWUHWURYLUDOLQIHFWLRQVLQ$IULFDQSULPDWHV7KHLQFUHDVHLQ+(59VHTXHQFHVLQWKH
SULPDWH JHQRPH OHG WR LQFUHDVHG IOXLGLW\ DQG G\QDPLF QDWXUH RI WKH JHQRPH OHDGLQJ WR
GHYHORSPHQW RI D GRPLQDQW SUHIURQWDO FRUWH[ DQG OLPELF OREH 7KH V\QDSWLF FRQQHFWLYLW\
UHTXLUHG IRU WKH IRUPDWLRQ RI FRPSOH[ QHXURQDO QHWZRUNV EDVHG RQ D G\QDPLF JHQRPH
PRGXODWHGE\+(59MXPSLQJJHQHVZHUHSUHVHQWLQWKHKRPRVDSLHQEUDLQ7KLVUHVXOWHGLQD
WULPDQGOHDQEXWPRUHHIILFLHQWDQGORJLFDOEUDLQZLWKGRPLQDQWSUHIURQWDOFRUWH[IXQFWLRQ
7KH FHUHEHOODU IXQFWLRQ ZDV LQKLELWHG ZLWK SUHGRPLQDQW FRQWURO RYHU PRWRU IXQFWLRQV 7KH
LQFUHDVH LQ HOHFWURPDJQHWLF ZDYH SROOXWLRQ GXH WR LQWHUQHW DGGLFWLRQ DQG SHUVLVWHQW XVDJH

OHDGV WR SUHIURQWDO FRUWLFDO DWURSK\ 7KLV OHDGV WR UHYHUVLRQ WR FHUHEHOODU GRPLQDQFH LQ WKH
KRPRVDSLHQEUDLQDQGZLGHVSUHDGLQFUHDVLQJLQFLGHQFHRIDXWLVPVFKL]RSKUHQLDREVHVVLYH
FRPSXOVLYHQHXURVLVVH[XDODGGLFWLRQV\QGURPHDWWHQWLRQGHILFLWK\SHUDFWLYLW\GLVRUGHUVDQG
G\VOH[LDV 7KH ODFN RI $32%(& SKHQRW\SH LQ WKH KRPR VDSLHQV DQG WKH GHYHORSPHQW RI
UHVLVWDQWUHWURYLUDOVWUDLQVZRXOGOHDGWRH[WLQFWLRQRIWKHKRPRVDSLHQVVSHFLHV,QDGGLWLRQ
WKHJOREDOZDUPLQJFDQOHDGWRR[LGDWLYHVWUHVV+'$&LQKLELWLRQGHPHWK\ODWLRQDQG+(59
H[SUHVVLRQOHDGLQJWRUHFRQVWLWXWLRQRIUHWURYLUXVHVLQWKHV\VWHPFRQWULEXWLQJWRWKHDFTXLUHG
LPPXQRGHILFLHQF\V\QGURPH+(59H[SUHVVLRQLQWKHKXPDQJHQRPHQRQFRGLQJDUHDKDV
EHHQUHODWHGWRDXWLVPDQGVFKL]RSKUHQLD7KHGHYHORSPHQWRIUHVLVWDQWUHWURYLUDOLQIHFWLRQV
DQG WKH JOREDO ZDUPLQJ UHODWHG DUFKDHDO PXOWLSOLFDWLRQ ZRXOG OHDG WR H[WHUPLQDWLRQ RI WKH
KRPRVDSLHQVVSHFLHVZLWKLWVQRQFRGLQJDUHDRIJHQRPHFRQWULEXWHGE\+(59VHTXHQFHV
7KH\ ZLOO JHW UHSODFHG E\ 1HDQGHUWKDO K\EULGV ZLWK WKH QRQ FRGLQJ UHJLRQ RI WKH JHQRPH
FRQWULEXWHG E\ LQWHJUDWHG DUFKDHDO VHTXHQFH ZKLFK PXOWLSO\ DQ LQFUHDVH LQ OHQJWK RZLQJ WR
JOREDOZDUPLQJ7KHPXOWLSO\LQJV\PELRWLFDQGHQYLURQPHQWDODUFKDHDZLOOIXUWKHUFRQWULEXWH
WR LQFUHDVH JOREDO ZDUPLQJ IXUWKHU LQFUHDVHG DUFKDHDO PXOWLSOLFDWLRQ DQG GRPLQDQFH RI
1HDQGHUWKDO K\EULGV LQ WKH ZRUOG 7KH DUFKDHDO PHWDEROLVP RI FKROHVWHURO UHVXOWV LQ ORZ
FKROHVWHURO OHYHOV FRQWULEXWLQJ WR VH[ KRUPRQH GHILFLHQF\ IDOOLQJ UHSURGXFWLYH UDWHV DQG
H[WLQFWLRQRI1HDQGHUWKDOK\EULGVJHQHUDWHG

$FWLQLGLFDUFKDHDOPHWDEROLVPDQGDXWLVP
7KHDFWLQLGLFDUFKDHDKDYHFKROHVWHUROULQJR[LGDVHDFWLYLW\JHQHUDWLQJS\UXYDWHVLGH
FKDLQR[LGDVHDFWLYLW\JHQHUDWLQJEXW\UDWHDQGSURSLRQDWHDURPDWDVHDFWLYLW\JHQHUDWLQJWKH
3$+ULQJDQGEHWDK\GUR[\VWHURLGGHK\GURJHQDVHDFWLYLW\JHQHUDWLQJWKHJO\FRVLGLFGLJR[LQ
DQGVWHURLGDOELOHDFLGV7KHHQGRJHQRXVGLJR[LQLVDUFKDHDOLQRULJLQDVWKHJO\FRVLGLFVXJDUV
DUH QRW V\QWKHVL]HG E\ WKH KXPDQ FHOO 7KH JO\FRVLGH GLJR[LQ FDQ UHJXODWH QHXUDO IXQFWLRQ
LPPXQH IXQFWLRQ DQG HQGRFULQH IXQFWLRQ (QGRJHQRXV GLJR[LQ SURGXFHV VRGLXP SRWDVVLXP
$73DVHLQKLELWLRQUHVXOWLQJLQLQFUHDVHLQLQWUDFHOOXODUFDOFLXPDQGUHGXFWLRQLQLQWUDFHOOXODU
PDJQHVLXP'LJR[LQFDQPRGXODWHLQWUDFHOOXODUFDOFLXPPDJQHVLXPUDWLRVLQFUHDVLQJFHOOXODU
FDOFLXP DQG GHSOHWLQJ FHOOXODU PDJQHVLXP 0DJQHVLXP GHILFLHQF\ LQKLELWV WKH JO\FRO\WLF
HQ]\PHVWULFDUER[\OLF7&$F\FOHHQ]\PHVDQGPLWRFKRQGULDO$73V\QWKDVH7KHLQFUHDVHLQ
LQWUDFHOOXODUFDOFLXPFDQPRGXODWHPLWRFKRQGULDO37SRUHDQGLWVIXQFWLRQ7KHPDJQHVLXP
GHILFLHQF\ FDQ LQKLELW '1$ DQG 51$ SRO\PHUDVH IXQFWLRQ DV ZHOO DV UHYHUVH WUDQVFULSWDVH
DFWLYLW\7KH+(59JHQHVDUHQRWH[SUHVVHGDQGWKLVDIIHFWVWKHMXPSLQJJHQHVFRQWULEXWLQJ
WR WKH G\QDPLFLW\ DQG IOXLGLW\ RI WKH JHQRPH +(59 JHQH H[SUHVVLRQ PHGLDWHG JHQRPLF

IOXLGLW\ LV UHTXLUHG IRU WKH JHQHUDWLRQ RI FRPSOH[ QHXURQDO QHWZRUNV DQG LPPXQH JHQHV
HVSHFLDOO\WKH+/$JHQHV7KLVOHDGVWRGHIHFWLYHGHYHORSPHQWRIWKHSUHIURQWDOFRUWH[DQG
LWVFRQQHFWLRQVDVZHOODVLPPXQHPHFKDQLVPVFRQWULEXWLQJWRDXWRLPPXQHGLVHDVHV7KXV
GLJR[LQ FDQ LQKLELW JHQRPLF IXQFWLRQ 7KH GLJR[LQ LQGXFHG LQWUDFHOOXODU PDJQHVLXP
GHILFLHQF\ UHVXOWV LQ ULERVRPDO GLVLQWHJUDWLRQ DQG GHIHFWLYH SURWHLQ V\QWKHVLV 7KH 3'+
EORFNDGH UHVXOWV LQ GHIHFWLYH JHQHUDWLRQ RI DFHW\O &R$ UHVXOWLQJ LQ UHGXFHG V\QWKHVLV RI
FKROHVWHURO DQG IDWW\ DFLGV )DWW\ DFLG R[LGDWLRQ DQG NHWRJHQHVLV LV DOVR LQKLELWHG E\
PDJQHVLXP GHILFLHQF\ UHODWHG PLWRFKRQGULDO $73 V\QWKDVH G\VIXQFWLRQ 7KH DFWLQLGLF
DUFKDHDOPXOWLFHOOXODUQHWZRUNWKURXJKGLJR[LQVHFUHWLRQHIIHFWLYHO\EORFNVDQGVKXWVGRZQ
DOO DVSHFWV RI FHOO PHWDEROLVP 7KH FHOOXODU HQHUJHWLF GHSHQGV XSRQ VRGLXP SRWDVVLXP
$73DVHPHGLDWHGPHPEUDQH$73V\QWKHVLV7KHFHOOUHTXLUHPHQWRI$73FRPHVGRZQDVWKH
PHPEUDQHVRGLXPSXPSLVLQKLELWHGDQGDOOPHWDEROLFSDWKZD\VDUHEORFNHG7KHFHOOJRHV
LQWRKLEHUQDWLRQ7KHKXPDQFHOOWLVVXHVDQGRUJDQV\VWHPVIXQFWLRQVDVD]RPELH7KHFHOOLV
WDNHQ RYHU E\ WKH DWDYLVWLF PXOWLFHOOXODU DFWLQLGLF DUFKDHDO FRORQ\ 7KH DFWLQLGLF DUFKDHDO
PHWDEROLVP VXUYLYHV $V IDWW\ DFLG JOXFRVH DQG DPLQR DFLG PHWDEROLVP LV LQKLELWHG WKH
JOXFRVHIDWW\DFLGVDQGDPLQRDFLGVDFFXPXODWHLQWKHFHOODQGLVXVHGIRUDFWLQLGLFDUFKDHDO
PHWDEROLF SDWKZD\V 7KLV LV H[HPSOLILHG E\ LQFUHDVH LQ DFWLQLGH FDWDO\VHG KH[RNLQDVH
DFWLYLW\ PLWRFKRQGULDO $73 V\QWKDVH DFWLYLW\ PHPEUDQH VRGLXP SRWDVVLXP $73DVH
PHGLDWHG $73 V\QWKHVLV DQG FKROHVWHURO R[LGDVH VLGH FKDLQ R[LGDVH ULQJ R[LGDVH ULQJ
DURPDWDVHEHWDK\GUR[\VWHURLGGHK\GURJHQDVHDQGFKROHVWHURODOSKDK\GUR[\ODVHDFWLYLW\
7KH DUFKDHDO VKLNLPLF DFLG SDWKZD\ V\QWKHVL]HV W\URVLQH DQG WU\SWRSKDQ GHULYHG
QHXURWUDQVPLWWHUV DQG QHXURDONDORLGV 7KH VKLNLPLF DFLG SDWKZD\ FDQ V\QWKHVL]H GRSDPLQH
QRUHSLQHSKULQHDQGVHURWRQLQDVZHOODVQHXURDONDORLGVPRUSKLQHQLFRWLQHDQGVWU\FKQLQHDV
KDV EHHQ GHPRQVWUDWHG IURP WKLV ODERUDWRU\ 7KH DWDYLVWLF DUFKDHDO PHWDEROLVP XVLQJ
FKROHVWHURODVHQHUJ\VXEVWUDWHVDQGDFWLQLGHVDVFDWDO\VWWDNHVRYHUWKHFHOO7KHKXPDQFHOO
ZKLFK JRHV LQWR KLEHUQDWLRQ IXQFWLRQV DV D ]RPELH ZLWK WKH PXOWLFHOOXODU DFWLQLGLF DUFKDHDO
FRORQ\ WDNLQJ RYHU WKH FHOO DQG WKH ERG\ 'LJR[LQ FDQ SURGXFH FHOO GHDWK E\ FDOFLXP
PHGLDWHGPLWRFKRQGULDO37SRUHG\VIXQFWLRQDQGFHOOSUROLIHUDWLRQE\LQFUHDVHGLQWUDFHOOXODU
FDOFLXP DFWLYDWLQJ UDV RQFRJHQH 'LJR[LQ E\ PRGXODWLQJ VRGLXP SRWDVVLXP $73DVH FDQ
UHJXODWH FHOO PHPEUDQH DQG QXFOHDU PHPEUDQH WUDQVSRUW 'LJR[LQ FDQ PRGXODWH 1).%
IXQFWLRQ E\ LQFUHDVH LQ LQWUDFHOOXODU FDOFLXP DQG SURGXFH LPPXQH DFWLYDWLRQ 'LJR[LQ E\
DOWHULQJLQWUDFHOOXODUFDOFLXPPDJQHVLXPUDWLRVFDQPRGXODWH*SURWHLQFRXSOHGDQGSURWHLQ
W\URVLQHNLQDVHUHODWHGQHXURWUDQVPLWWHUDQGHQGRFULQHUHFHSWRUV+\SHUGLJR[LQHPLDKDVEHHQ
UHODWHGWRDXWLVP %XW\UDWH IXQFWLRQV DV D +'$& LQKLELWRU UHJXODWLQJ JHQRPLF IXQFWLRQ DQG

DOVR SURGXFLQJ LPPXQRVXSSUHVVLRQ %XW\UDWH PHGLDWHG DOWHUHG JHQRPLF IXQFWLRQ FDQ
FRQWULEXWHWRDXWLVP3URSLRQDWHFDQFRQWULEXWHWRRUJDQLFDFLGXULDV3URSLRQDWHFDQSURGXFH
10'$ DFWLYDWLRQ LQFUHDVHG PRQRDPLQH WUDQVPLVVLRQ SURGXFH LPPXQRVXSSUHVVLRQ DQG
PRGXODWH V\QDSWLF WUDQVPLVVLRQ 3\UXYDWH LV DOVR LPPXQRVXSSUHVVLYH UHJXODWHV LQVXOLQ
VHFUHWLRQ DQG IXQFWLRQV DV DQ DQWLR[LGDQW 3$+ FDQ PRGXODWH $+5 UHFHSWRU IXQFWLRQ
UHJXODWLQJFHOOSUROLIHUDWLRQDQGLPPXQLW\3$+DQG$+5UHFHSWRUDFWLYDWLRQFDQDIIHFWEUDLQ
IXQFWLRQOHDGLQJRQWRDXWLVPDQG$'+'&KROHVWHUROR[LGDVHDFWLYLW\FDQJHQHUDWH+2DQG
UHGR[ VWUHVV PRGXODWLQJ FHOO IXQFWLRQ 5HGR[ VWUHVV LV UHODWHG WR DXWLVP 7KH DUFKDHD FDQ
JHQHUDWHPDJQHWLWHPRGXODWLQJPDJQHWRSHUFHSWLRQDQGH[WUDVHQVRU\SHUFHSWLRQLPSRUWDQWLQ
DXWLVP 7KXV WKH DUFKDHDO FKROHVWHURO FDWDEROLVP FDQ UHJXODWH JHQHWLF LPPXQH PHWDEROLF
HQGRFULQH DQG QHXUDO IXQFWLRQV SURGXFLQJ DQ DWDYLVWLF SKHQRW\SH 7KLV DWDYLVWLF DUFKDHDO
FRORQ\ IXQFWLRQV DV D QHZ SKHQRW\SH OHDGLQJ WR DXWLVP &OLPDWH FKDQJH OHDGV WR JOREDO
ZDUPLQJ DQG LQFUHDVH LQ H[WUHPRSKLOLF DUFKDHDO JURZWK 7KLV OHDGV RQWR DXWLVWLF DQG
VFKL]RSKUHQLF PHWDEROLF SDWWHUQV DQG LQFUHDVHG LQFLGHQFH RI FLYLOL]DWLRQDO GLVHDVHV 7KH
KXPDQERG\LVWDNHQRYHUE\WKHDWDYLVWLFDUFKDHDOFRORQLDOSKHQRW\SHOHDGLQJWRD]RPELH
V\QGURPH7KHUHLVDERG\FKDQJHPLQGFKDQJHDQGFXOWXUDOFKDQJHDNLQWRFOLPDWHFKDQJH
7KLVOHDGVRQWRQHDQGHUWKDOLVDWLRQRIWKHKXPDQVSHFLHV

$XWLVPVFKL]RSKUHQLDDQG1HDQGHUWKDOK\EULGEUDLQV
7KH LQFUHDVH LQ DUFKDHDO JURZWK DQG DXWLVWLF PHWDEROLF SDWWHUQV OHDGV WR DXWLVWLF
FXOWXUDOQHXUDODQGOLQJXLVWLFDWDYLVWLFSKHQRW\SHV/RZFKROHVWHUROYDOXHVDUHFKDUDFWHULVWLF
RI DXWLVWLF EUDLQV /RZ FKROHVWHURO OHYHOV FDQ FRQWULEXWH WR GHIHFWLYH V\QDSWRJHQHVLV DV
FKROHVWHUROLVDWURSKLFIDFWRUIRUV\QDSWRJHQHVLV7KLVOHDGVWRUHDFWLYHEUDLQK\SHUWURSK\DQG
QHRFRUWLFDOG\VIXQFWLRQ7KH1HDQGHUWKDOVKDGODUJHVWRXWERGLHVDQGPRWRUPRYHPHQWVZHUH
DQLPSRUWDQWSDUWRIWKHLUKXQWHUJDWKHUHUOLIHVW\OH7KLVDOVRZDVDVVRFLDWHGZLWKODUJHUH\HV
DQG D KLJKO\ GHILQHG YLVXDO V\VWHP LPSRUWDQW LQ WKHLU KXQWHU JDWKHUHU OLIH VW\OH 7KLV ZRXOG
DOVR KDYH EHHQ DVVRFLDWHG ZLWK D SURPLQHQW SLQHDO JODQG ZLWK LWV UHWLQDO FRQQHFWLRQV IRU
UHJXODWLRQ RI GLXUQDO UK\WKPV DQG JHRPDJQHWLF ILHOG PRGXODWLRQ RI ERG\ IXQFWLRQ 7KH
1HDQGHUWKDO EUDLQ ZDV ODUJHU LQ VL]H EXW WKH PDMRU SDUW RI WKH EUDLQ ZDV DVVRFLDWHG ZLWK
UHJXODWLRQ RI PRWRU PRYHPHQWV DQG YLVLRQ FUXFLDO IRU WKHLU KXQWHU JDWKHUHU OLIH VW\OH 7KH
LPSRUWDQFHRIPRWRUPRYHPHQWVDQGWKHODUJHERG\VL]HRIWKH1HDQGHUWKDOVFRQWULEXWHGWRD
SURPLQHQWPRWRUFRUWH[DQGSDULHWDOOREH7KHYLVXDOFRUWH[DOVRRFFXSLHGDPDMRUSDUWRIWKH
FHUHEUDOFRUWH[LQYLHZRIWKHLPSRUWDQFHRIYLVLRQIRUKXQWHUJDWKHUHUOLIHVW\OH7KHYLVXDO
JXVWDWRU\DXGLWRU\DQGVHQVRU\FRUWH[ZHUHGRPLQDQWOHDGLQJWRDSUHGRPLQDQFHRIVHQVRU\

SHUFHSWLRQ UHJXODWLQJ OLIH RU D FLYLOL]DWLRQ RI VHQVHV 6HQVXDO VDWLVIDFWLRQ EHFRPHV WKH
GRPLQDQWWKHPHLQOLIH7KHELOHDFLGVLPSRUWDQWLQIRUPLQJODUJHVRFLDOJURXSVZHUHELQGLQJ
WR ROIDFWRU\ *3&5 UHFHSWRUV SURGXFLQJ OLPELF OREH VWLPXODWLRQ ZDV GHILFLHQW 7KH OLPELF
OREH DUHDV RI KLSSRFDPSXV DQG SUHIURQWDO FRUWH[ ZHUH LOO GHYHORSHG 7KH SUHIURQWDO FRUWH[
FRQFHUQHGZLWKVRFLDOLQWHUDFWLRQH[HFXWLYHGHFLVLRQVMXGJPHQWDQGVRFLDOQHWZRUNLQJZDV
VPDOO 7KHUHIRUH WKH 1HDQGHUWKDOV QHYHU IRUPHG ODUJH VRFLDO FOXVWHUV EXW RQO\ VPDOO
PDWULDUFKDO JURXSV 7KH 1HDQGHUWKDOV QHYHU IRUPHG ODUJH QDWLRQDO JURXSV DV WKH SUHIURQWDO
FRUWH[ FRQFHUQHG ZLWK ORJLFDO KLJKHU OHYHO H[HFXWLYH LQWHUDFWLRQV ZDV VPDOO 7KH ODQJXDJH
DUHDRIWKHEUDLQZDVQRWGHYHORSHGDQGWKHOLQJXLVWLFVXEVWUDWHVRIWKHQDWLRQVWDWHVZDVDOVR
ODFNLQJ7KLVUHVXOWVLQODFNRIQDWLRQVWDWHVDPRQJ1HDQGHUWKDOSRSXODWLRQDQGVWDWHVRIZDU
7KH PRWRU FRUWH[ WKH FHUHEHOODU FRUWH[ FRQWUROOLQJ FRRUGLQDWLRQ DQG WKH YLVXDO FRUWH[ ZHUH
GRPLQDQW7KHFHUHEHOODUFRUWH[ZDVPRUHGRPLQDQWDVFRPSDUHGWRWKHFHUHEUDOFRUWH[7KH
1HDQGHUWKDO EUDLQ KDG FHUHEHOODU GRPLQDQFH 7KH EXON RI WKH FHUHEHOODU IXQFWLRQ ZDV
FRJQLWRU\ DQG PRWRU UHJXODWLRQ 7KH FHUHEHOOXP LV FRQFHUQHG ZLWK LPSXOVLYH EHKDYLRU
GLVLQKLELWHG VWDWHV REVHVVLYH FRPSXOVLYH VWDWHV SDUDQRLG VWDWHV FKLOGLVK QDLYH EHKDYLRU
ULWXDOL]HG EHKDYLRU DQG VWHUHRW\SHG UHSHWLWLYH EHKDYLRU 7KH FHUHEHOOXP LV FRQFHUQHG ZLWK
K\SRPHWULFDQGK\SHUPHWULFVWDWHVDQGSURGXFHVG\VPHWULDRIWKRXJKW7KHFHUHEHOODUYHUPLV
LVFRQFHUQHGZLWKHPRWLRQDOEHKDYLRU7KHSRVWHULRUFHUHEHOOXPLVSUHGRPLQDQWO\FRJQLWRU\
7KHDQWHULRUFHUHEHOOXPLVFRQFHUQHGZLWKPRWRUUHJXODWLRQ5LJKWFHUHEHOOXPLVFRQQHFWHGWR
WKHOHIWFHUHEUDOKHPLVSKHUHDQGOHIWFHUHEHOOXPLVFRQQHFWHGWRWKHULJKWFHUHEUDOKHPLVSKHUH
7KURXJK WKHSKHQRPHQD RI GLDVFKLDVLV FHUHEUDOFRUWLFDO DWURSK\ OHDGV WR FHUHEHOODU DWURSK\
7KXVLIWKHFHUHEHOOXPLVQRWGHYHORSHGLQWKHIHWXVWKHFHUHEUDOFRUWH[GRHVQRWGHYHORS7KH
GRUVRODWHUDO SUHIURQWDO FRUWH[ GHYHORSPHQW GHSHQGV XSRQ FHUHEHOODU GHYHORSPHQW ,Q WKH
FRQWH[W RI GHIHFWLYH FHUHEHOODU GHYHORSPHQW WKH SUHIURQWDO FRUWH[ IDLOV WR GHYHORS 7KH
FHUHEHOOXPLVLQIDFWPRUHLPSRUWDQWWKDQWKHFHUHEUDOFRUWH[DQGFRQWDLQVSHUFHQWRIWKH
QHXURQV RI WKH EUDLQ 7KH FHUHEUDO FRUWLFDO DQG FHUHEHOODU IXQFWLRQ FDQ EH FRPSDUHG DV
FRQVFLRXVYHUVXVXQFRQVFLRXVGUHDPYHUVXVZDNHDQGORJLFDOYHUVXVLQWXLWLYH,WFDQDOVREH
FRPSDUHG DV SDWULDUFKDO FHUHEUDO FRUWH[ YHUVXV PDWULDUFKDO FHUHEHOODU FRUWH[ DV ZHOO DV
FRPPRQVHQVLFDOFHUHEUDOFRUWH[YHUVXVPDJLFDOFHUHEHOODUFRUWH[7KHFHUHEUDOFRUWH[FDQEH
FRQVLGHUHG DV WKH +(59 PRGXODWHG EUDLQ DQG WKH FHUHEHOODU FRUWH[ FDQ EH FRQVLGHUHG DV
DUFKDHDO PRGXODWHG EUDLQ $V VDLG EHIRUH WKH DWDYLVWLF DUFKDHDO FRORQ\ QHWZRUN VHFUHWHV
GLJR[LQ DQG QHXURQDO FHOO JRHV LQWR PHWDEROLF DQG IXQFWLRQDO KLEHUQDWLRQ 7KH DWDYLVWLF
DFWLQLGLF DUFKDHDO FRORQ\ QHWZRUN IXQFWLRQV DV DQ LQIRUPDWLRQ VHQVLQJ DQG SURFHVVLQJ
QHWZRUNZKLFKDOVRKDVDFDSDFLW\RIVRFLDOLQWHOOLJHQFH7KHDUFKDHDOFRORQ\QHWZRUNKDVJRW

PDJQHWLWH FDSDEOH RI PDJQHWRSHUFHSWLRQDQGTXDQWDOSHUFHSWLRQ $FWLQLGLF DUFKDHDO FRORQ\
PHGLDWHGTXDQWDOSHUFHSWLRQEHFRPHVWKHGRPLQDQWIRUPRISHUFHSWLRQDVWKHQHXURQDOFHOOV
JRHVLQWRPHWDEROLFDQGIXQFWLRQDOKLEHUQDWLRQLQGXFHGE\GLJR[LQ7KHFRQVFLRXVSHUFHSWLRQ
PRGXODWHG E\ WKH WKDODPRFRUWLFRWKDODPLF SDWKZD\ EHFRPHV G\VIXQFWLRQDO DQG LV UHSODFHG
E\ PDJQHWRSHUFHSWLRQTXDQWDO SHUFHSWLRQ PHGLDWHG E\ GLJR[LQ LQGXFHG SXPSHG SKRQRQ
V\VWHPLQYROYLQJLQGLSRODUPDJQHWLWHDQGSRUSK\ULQV7KHSRUSK\ULQDQGPDJQHWLWHLQGXFHG
TXDQWDO SHUFHSWLRQ FDQ FRQWULEXWH WR ZDYH IRUPV RI WKH DWDYLVWLF DUFKDHDO FRORQ\ QHWZRUN
JHQHUDWLQJ PDFURPROHFXODU TXDQWDO VWDWHV 7KH SRUSK\ULQV DQG PDJQHWLWH DUH GLSRODU
PROHFXOHVDQGFDQOHDGRQWRPDFURVFRSLFTXDQWDOVWDWHV([WUDVHQVRU\SHUFHSWXDOPRGHVDUH
GRPLQDQWLQDXWLVPDQGVFKL]RSKUHQLD7KHPDJQHWLWHDQGDUFKDHDOSRUSK\ULQVDUHGLSRODUDQG
LQWKHSUHVHQFHRIGLJR[LQLQGXFHGVRGLXPSRWDVVLXP$73DVHLQKLELWLRQFDQFUHDWHSXPSHG
SKRQRQVWDWHVUHTXLUHGIRUTXDQWDOSHUFHSWLRQ7KHSRUSK\ULQVZKLFKDUHV\QWKHVL]HGPRUHLQ
DXWLVP DQG VFKL]RSKUHQLD FRQWULEXWH WR H[WUDVHQVRU\ SHUFHSWLRQ ([WUDVHQVRU\ TXDQWDO
SHUFHSWLRQLVGRPLQDQWLQDXWLVPDQGVFKL]RSKUHQLD,QWKHTXDQWDOVWDWHHYHU\WKLQJH[LVWDV
XQOLPLWHG SUREDELOLWLHV DQG LW LV WKH FRQVFLRXV REVHUYHU WKDW EULQJV RQH RI WKH SUREDELOLWLHV
LQWRRQHJUDYLWRQFULWHULDDQGFRQVFLRXVQHVV7KHPXOWLSOHSUREDELOLWLHVLQWKHTXDQWDOVWDWHV
DFFRUGLQJWRWKHPDQ\ZRUOGLQWHUSUHWDWLRQFDQH[LVWLQPXOWLSOHXQLYHUVHVRUPXOWLYHUVHVDW
WKHVDPHWLPH7KXVWKHTXDQWDOEUDLQPRGXODWHGE\WKHDFWLQLGLFDUFKDHDOFRORQ\LVHWHUQDO
DQGFDQH[LVWIRUHYHU7KLVIRUPVWKHEDVLVRIWKHELRFHQWULFWKHRU\RIWKHXQLYHUVHSURGXFLQJ
D XQLILHG H[SODQDWLRQ IRU DOO SKHQRPHQD 7KH ZRUOG H[LVWV EHFDXVH RI FRQVFLRXVQHVV 7KH
XQLYHUVHLVEDVLFDOO\ELRORJLFDO7KHDFWLQLGLFQDQRDUFKDHDDUHH[WUHPRSKLOLFDQGFDQH[LVWV
LQ WKH LQWHUJDODFWLF VSDFH FRQWULEXWLQJ WR WKH VSLUDO LQWHUJDODFWLF PDJQHWLF ILHOGV ZKRVH
URWDWLRQOHDGVWRWKHHYROXWLRQRIVWDUV\VWHPVDQGSODQHWV/LIHLWVHOIZRXOGKDYHDQDFWLQLGLF
RULJLQIRUPHGRQDFWLQLGLFVXEVWUDWHVE\DELRJHQHVLV7KHTXDQWDOEUDLQIXQFWLRQDQGTXDQWDO
SKHQRPHQD OLNH TXDQWDO FU\VWDO GLIIUDFWLRQ JUDGLHQW FDQ OHDG RQWR WKH RULJLQ RI WKH PDWHULDO
ZRUOG
7KH FHUHEHOOXP LV FRQFHUQHG ZLWK H[WUDVHQVRU\ SHUFHSWLRQ DQG WUDQFH OLNH K\SQRWLF
VWDWHV7KHFHUHEHOOXPLVLQYROYHGLQRXWRIWKHERG\H[SHULHQFHDQGPDJLFDOVWDWHV6SLULWXDO
H[SHULHQFHV DQG PDJLFDO H[SHULHQFHV DV ZHOO DV GUHDP OLNH VWDWHV DUH DOVR PHGLDWHG YLD WKH
FHUHEHOOXP 7KH FHUHEHOOXP LV GRPLQDQW IRU LQWXLWLRQ ,QWXLWLYH SKHQRPHQRQ LV WKH EDVLV RI
FUHDWLYLW\ DQG FDQ EH FDOOHG DV VL[WK VHQVH 7KH FHUHEHOOXP LV LQYROYHG LQ WHOHSDWK\
WHOHNLQHVLVDQGSROWHUJHLVWSKHQRPHQD4XDQWDOSHUFHSWLRQLVDOVRGRPLQDQWLQWKHFHUHEHOOXP
DVRIWKHQHXURQVLQWKHEUDLQDUHLQWKHFHUHEHOOXPDQGWKHDWDYLVWLFDFWLQLGLFDUFKDHDO

FRORQ\ QHWZRUN LV EDVLFDOO\ ORGJHG LQ FHUHEHOOXP 4XDQWDO SHUFHSWLRQ FDQ OHDG WR
FRPPXQLFDWLRQ ZLWK WKH DQLPDOV DQG SODQWV 0DJQHWRSHUFHSWLRQ DQG TXDQWDO SHUFHSWLRQ
ZRXOGKDYHJHQHUDWHGDIHHOLQJRIRQHQHVVRIKXPDQVQDWXUHDQGDQLPDOVFRQWULEXWLQJWRD
VSLULWXDO H[SHULHQFH 0DJQHWRSHUFHSWLRQ DQG SRUSK\ULQV DUH LQYROYHG LQ VHQVLQJ RI
JHRPDJQHWLF ILHOGV 7KLV OHDGV RQWR D IHHOLQJ RI RQHQHVV ZLWK QDWXUH DQG JURXS 7KLV OHDGV
RQWRJURXSFRQVFLRXVQHVVJURXSLGHQWLW\DQGJURXSPRWKHUKRRGFKDUDFWHULVWLFRI1HDQGHUWKDO
FOXVWHUV 7KHUH LV QR LQGLYLGXDO LGHQWLW\ ZKLFK LV UHSODFHG ZLWK JURXS LGHQWLW\ 7KLV ZRXOG
KDYH FRQWULEXWHG WR D PDJLFDO FLYLOL]DWLRQ RI GUHDPV 7KLV ZRXOG KDYH JHQHUDWHG D SDJDQ
FXOWXUH 7KH SURPLQHQW SLQHDO JODQG ZRXOG KDYH OHG WR GRPLQDQW JHRPDJQHWLF DQG VRODU
SHUFHSWLRQOHDGLQJWRDJUHDWHUOHYHORIVSLULWXDOLW\7KXVWKHGRPLQDQWH[WUDVHQVRU\TXDQWDO
SHUFHSWLYH PRGHV LQ WKH 1HDQGHUWKDO EUDLQ ZRXOG KDYH OHG WR D ZRUOG RI GUHDPV LQ TXDQWDO
IRDPZKHUHWKHPDWHULDOZRUOGPHUJHGZLWKWKHZRUOGRITXDQWDOZDYHV7KLVZRXOGKDYHOHG
WRDVHQVHRIRQHQHVVZLWKWKHZRUOGRUDIHHOLQJRI*RGZKLFKFDQEHDSWO\GHVFULEHGDVWKH
ZRUOGRI0D\D7KLVFDQOHDGRQWRLQFUHDVHVHQVHRIVSLULWXDOLW\LQWKH1HDQGHUWKDOJURXSV
6LQFHWKHSUHIURQWDODQGWHPSRUDOFRJQLWLYHFRUWH[ZDVVPDOODQGG\VIXQFWLRQDOH[WUDVHQVRU\
SHUFHSWLRQGRPLQDWHG7KH1HDQGHUWKDOEUDLQKDGDQDWDYLVWLFDUFKDHDOFRORQ\QHWZRUN7KH
DUFKDHDO PDJQHWLWH LQGXFHG PDJQHWRSHUFHSWLRQ DQG JURXS FRQVFLRXVQHVV 7KH DWDYLVWLF
DUFKDHDOFRORQ\QHWZRUNKDVPDJQHWLWHDQGDFWLQLGHPHGLDWHGPDJQHWRSHUFHSWLRQLQDXWLVP
7KH\DOVRKDGQRQORFDOFRPPXQLFDWLRQDQGWHOHSDWKLFDELOLWLHV4XDQWDOSHUFHSWLRQZDVPRUH
GRPLQDQWFRPSDUHGWRFRQVFLRXVSHUFHSWLRQ7KLVOHDGVRQWRGRPLQDQFHRIXQFRQVFLRXVRYHU
FRQVFLRXV IXQFWLRQ 7KLV FRQWULEXWHV WR D GUHDP\ VKDPDQLF WUDQFH OLNH VWDWHV OHDGLQJ WR
VSLULWXDOH[SHULHQFH0DJQHWRSHUFHSWLRQDQGTXDQWDOSHUFHSWLRQFDQFRQWULEXWHWRSHUFHLYLQJ
QDWXUH DQG HQYLURQPHQWDO FRQVFLRXVQHVV 1HRFRUWLFDO IXQFWLRQ LV GHIHFWLYH GXH WR GHIHFWLYH
V\QDSWRJHQHVLV %UDLQ IXQFWLRQ LV PRUH LQWXLWLYH WKDQ ORJLFDO 7KHUH LV PRUH RI HPRWLRQDO
EHKDYLRU WKDQ ORJLFDO EHKDYLRXU 7KHUH LV PRUH RI GUHDP\ WUDQFH OLNH VSLULWXDO VWDWHV WKDQ
ZDNHIXOVWDWHV7KHSRSXODWLRQOLYHVLQGUHDP\KDOOXFLQDWRU\VWDWH([WUDVHQVRU\SHUFHSWLRQ
FRQWULEXWHV WR VSLULWXDO H[SHULHQFH LQ DXWLVP DQG 1HDQGHUWKDOV 7KH FRQYHUVLRQ RI NHWRQH
ERGLHV GHULYHG IURP NHWRJHQLF GLHW WR WKH QHXURWUDQVPLWWHU *$%$ DQG K\GUR[\EXW\ULF DFLG
ZRXOG KDYH FRQWULEXWHG WR VWLPXODWLRQ RI LQKLELWRU\ WUDQVPLVVLRQ LQ WKH EUDLQ DQG GRFLOH
VSLULWXDOEHKDYLRURI1HDQGHUWKDOVRFLHWLHV4XDQWDOSHUFHSWLRQDQGPDJQHWRSHUFHSWLRQOHDGV
WR WKH SKHQRPHQD RI VRFLDO QHWZRUNLQJ ZLWK HTXDOLW\ DPRQJ DOO SHRSOH SDUWLFLSDWLQJ LQ WKH
QHWZRUN DQG ZLWKRXW D OHDGHU 6XFK VRFLDO QHWZRUNLQJ EHKDYLRXU KDV OHG WR UDSLG VRFLDO
UHYROXWLRQVLQUHFHQWWLPHVDVLQ(J\SWDQGQRUWKHUQ$IULFD6RFLDOQHWZRUNLQJJURXSVOLQNHG
E\TXDQWDOSHUFHSWLYHPRGHVEHFRPHWKHEDVLVRIVRFLHW\7KHIDPLO\WKHFDVWHDQGUHOLJLRXV

KLHUDUFKLHV GLVVROYHV JLYLQJ ZD\ WR PRUH JHQGHU HTXDO DQG VRFLDO HTXDO QHWZRUNLQJ JURXSV
EDVHGRQTXDQWDOSHUFHSWLRQRUPDJQHWRSHUFHSWLRQ
1HRFRUWLFDO G\VIXQFWLRQ FRQWULEXWHV WR GHIHFWLYH YRFDOL]DWLRQ LQ 1HDQGHUWKDOV 7KH\

DOVRKDGDKLJKO\SODFHGODU\Q[FRQWULEXWLQJWRGLVRUGHUHGV\PPHWU\EHWZHHQVZDOORZLQJDQG
EUHDWKLQJ OHDGLQJ WR HYROXWLRQ RI OLQJXLVWLFV FKDUDFWHULVWLF RI 'UDYLGLDQ ODQJXDJH ODFNLQJ
TXDQWDO YRZHOV /DQJXDJH GHYHORSPHQW DQG FRPPXQLFDWLRQ VNLOOV GHFOLQH ZLWK PRUH RI
JHVWXUDODQGH[WUDVHQVRU\FRPPXQLFDWLRQ9RFDOODQJXDJHVSRNHQDQGZULWWHQEHFRPHVOHVV
DQG OHVV ZLGHO\ XVHG 7KH XVH RI JHVWXUDO DQG FRPPXQLFDWLYH PXVLF DQG GDQFH EHFRPHV
GRPLQDQW LQ UHSODFHPHQW WR ZULWWHQ DQG VSRNHQ VSHHFK 7KH FHUHEHOOXP LV LPSRUWDQW ZLWK
UHJDUGWRVSHHFK:RUGVHOHFWLRQJUDPPDUSURVRG\DQGJHVWXUHVGHSHQGRQWKHFHUHEHOOXP
&HUHEHOODU GRPLQDQFH OHDGV WR GHIHFWLYH ODQJXDJH XVDJH DXWLVP DQG G\VOH[LDV 6\PEROLF
JHVWXUDO FRPPXQLFDWLYH IRUPV DQG WUDQFHV KDYH EHHQ GHVFULEHG LQ DUW IRUPV RI .HUDOD
H[HPSOLILHGE\.DWKDNDOLDQG7KH\\DPV6SHHFKGHIHFWVDUHKDOOPDUNRIDXWLVP7KLVOHDGV
RQWR ZLGHVSUHDG JHQHUDWLRQ RI DXWLVWLF EUDLQ SKHQRW\SHV LQ WKH FRPPXQLW\ 7KH FHUHEHOOXP
WKRXJKZDVODUJHZDVSUHGRPLQDQWO\FRJQLWRU\7KLVOHDGVWRGHFUHDVHGHIILFLHQF\RIPRWRU
IXQFWLRQ RI WKH FHUHEHOOXP OHDGLQJ RQWR D IXQFWLRQDO FHUHEHOODU V\QGURPH 7KH 1HDQGHUWKDO
PRYHPHQWV ZHUH FOXPV\ RZLQJ WR FHUHEHOODU G\VIXQFWLRQ DV KDSSHQV LQ DXWLVP 7KH
FHUHEHOODUVSHHFKVWDFFDWRH[SORVLYHLQFRRUGLQDWHDQGVOXUUHG7KLVFDQOHDGRQWRDPXVLFDO
TXDOLW\ IRU VSHHFK 7KH IURQWDO FRUWLFDO G\VIXQFWLRQ OHDGV WR HFRODOLD DQG UHSHWLWLYH 7KLV
ZRXOG KDYH OHDG WR WKH RULJLQ RI PXVLF 7KH 1HDQGHUWKDO ODQJXDJH ZRXOG KDYH EHHQ
SUHGRPLQDQWO\ PXVLFDO 7KH DSSHQGLFXODU LQFRRUGLQDWLRQ OHDGV WR DSSHQGLFXODU DWD[LD 7KLV
OHDGVRQWRWKHFUHDWLRQRIYDJXHDEVWUDFWIRUPVRIGUDZLQJ7KLVZRXOGKDYHEHHQWKHJHQHVLV
RI WKH DEVWUDFW DUW 7KH ZULWWHQ ODQJXDJH RI WKH 1HDQGHUWKDOV DV LQ WKH FDVH RI 'UDYLGLDQ
+DUDSSDQVZDVSUHGRPLQDQWO\DVSLFWRULDOVFULSWVRUKLHURJO\SKLFV$EVWUDFWDUWRULJLQDWHGLQ
WKH%DVTXHFRPPXQLW\ZLWKOHDGLQJILJXUHVOLNH3LFFDVVRDQG'DOLJHQHUDWHGIURPWKHP7KH
FHUHEHOODUDSSHQGLFXODUDWD[LDDOVROHDGVWRDWD[LFJDLWOHDGLQJWRJHQHUDWLRQRIGDQFHIRUPV
6\PEROLF GDQFH IRUPV RI WKH\\DP DQG NDWKDNDOL LQ .HUDOD DUH UHSUHVHQWDWLYH RI WKLV 7KH
IURQWDO FRUWLFDO G\VIXQFWLRQ DOVR OHDGV WR HFRSUD[LD RU UHSHWLWLRQ RI PRWRU DFWV 5HSHWLWLYH
FHUHEHOODU DQG IURQWDO FRUWLFDO G\VIXQFWLRQ UHODWHG DWD[LF PRYHPHQWV ZRXOG KDYH EHHQ WKH
RULJLQ RI GDQFH IRUPV 'RPLQDQW FHUHEHOODU IXQFWLRQ FRQWULEXWHV WR WKH GHYHORSPHQW RI
UHOLJLRXV ULWXDOV PXVLF DQG GDQFH 7KH DUFKHW\SHV RI WKH XQFRQVFLRXV FRPPRQ WR DOO
FLYLOL]DWLRQVDOVRKDYHWKHLUVXEVWUDWXPLQWKHFHUHEHOOXP1HDQGHUWKDOPXVLFDUWDQGGDQFH
ZHUH D IRUP RI VSLULWXDO ZRUVKLS LQ FRPPXQLRQ ZLWK QDWXUH DV D SDUW RI HQYLURQPHQWDO

FRQVFLRXVQHVV5HSHWLWLYHDQGULWXDOL]HGPRWRUDFWVDVDSDUWRIVSLULWXDOZRUVKLSZRXOGKDYH
EHHQJHQHUDWHGE\SUHIURQWDOFRUWH[DQGFHUHEHOODUG\VIXQFWLRQ7KHLQFUHDVHGH[SRVXUHWRWKH
ORZ OHYHO HOHFWURPDJQHWLF ILHOGV GXH WR LQFUHDVH LQ LQWHUQHW XVDJH LQ WKH FXUUHQW SRSXODWLRQ
DOVR OHDGV WR DWURSK\ RI WKH SUHIURQWDO FRUWH[ OHDGLQJ WR GRPLQDQFH RI SDULHWDO PRWRU DQG
YLVXDOFRUWH[7KLVFUHDWHVD1HDQGHUWKDOOLNHEUDLQLQSHRSOHZLWKLQWHUQHWDGGLFWLRQDQGRYHU
XVDJHZKLFKLVZLGHVSUHDGLQWKHPRGHUQZRUOG7KHVKULQNDJHRIWKHSUHIURQWDOFRUWH[DQG
LWVGRSDPLQHUJLFSDWKZD\VOLQNLQJWRWKHEDVDOJDQJOLDLVWKHEDVLVRIGUXJVH[XDODQGVXJDU
DGGLFWLRQ $GGLFWLYHEHKDYLRXUV ZHUH FRPPRQ LQ WKH1HDQGHUWKDOSRSXODWLRQ ZLWK XVDJH RI
GUXJV OLNH HSKHGUD IRU FUHDWLQJ VKDPDQLF VWDWHV 6LPLODU DGGLFWLYH EHKDYLRU LV FRPPRQ LQ
SRSXODWLRQRYHUH[SRVHGWRORZOHYHOHOHFWURPDJQHWLFILHOGVJHQHUDWHGE\LQWHUQHWXVDJHDQG
UHVXOWDQWSUHIURQWDOFRUWH[VKULQNDJH7KHFHUHEHOODUGRPLQDQFHOHDGVWRLQFUHDVHGLQFLGHQFH
RI VFKL]RSKUHQLD DXWLVP G\VOH[LD $'+' REVHVVLYH FRPSXOVLYH GLVRUGHU DQG VH[XDO
DGGLFWLRQ V\QGURPHV 7KH FHUHEHOODU VL]H LV UHODWHG WR HVWURJHQ DQG WHVWRVWHURQH OHYHOV DQG
FHUHEHOODU G\VIXQFWLRQ FDQ FRQWULEXWH WR VH[XDO GHYLDQW REVHVVLYH WUDLWV 7KXV FHUHEHOODU
GRPLQDQFH OHDGV WR G\VPHWULD RI PRWLRQ DQG G\VPHWULD RI WKRXJKW OHDGLQJ WR GRPLQDQW
TXDQWDO SHUFHSWLYH PRGH &HUHEHOODU GRPLQDQW LQGLYLGXDOV DUH FUHDWLYH DXWLVWLF VDYDQWV DQG
JHQLXVHVEXWDUHFOXPV\ZLWKURXWLQHPRWRUDFWVGXHWRG\VPHWULDRIPRWLRQ

,QFUHDVLQJLQFLGHQFHRIDXWLVPDFWLQLGLFDUFKDHDDQGJOREDOZDUPLQJ
7KH ULVLQJ LQFLGHQFH RI DXWLVP FDQ EH UHODWHG WR JOREDO ZDUPLQJ UHODWHG DUFKDHDO
JURZWKLQWKHEUDLQDQGORZ(0)H[SRVXUHGXHWRLQFUHDVHGLQWHUQHWXVDJH7KHLQFUHDVHLQ
KRPRVDSLHQJURZWKDQGLQFUHDVHGLQGXVWULDOSROOXWLRQDQGJOREDOZDUPLQJOHDGVWRDUFKDHDO
RYHUJURZWKDQGQHDQGHUWKDOLVDWLRQRIWKHEUDLQOHDGLQJWRUHWXUQRIWKHPDJLFDOZRUOG7KLV
DOVR ZRXOG UHVXOW IURP LQFUHDVHG HOHFWURPDJQHWLF SROOXWLRQ DQG LQWHUQHW XVDJH OHDGLQJ RQWR
SUHIURQWDO FRUWH[ DWURSK\ DQG DXWLVWLF EUDLQ GRPLQDQFH 7KHUH ZRXOG EH D UHWXUQ WR WKH
GUHDP\ZRUOGRIWKH1HDQGHUWKDOV7KHLQFUHDVHLQDUFKDHDOJURZWKLQWKHRFHDQVZRXOGDOVR
LQFUHDVHPHWKDQRJHQHVLVDQGJOREDOZDUPLQJDVDOVRFRQWULEXWHVWRTXDNHVLQWKHRFHDQEHG
OHDGLQJWR7VXQDPLV7KHJOREDOZDUPLQJZRXOGOHDGWRPHOWLQJRIWKHLFHFDSVRIWKHHDUWK
DQG IORRGLQJ OHDGLQJ WR HYHQWXDO H[WLQFWLRQ RI WKH ZRUOG SRSXODWLRQ ,Q DGGLWLRQ WKH ORZ
FKROHVWHUROOHYHOVDQGORZVH[KRUPRQHOHYHOVZRXOGOHDGWRDQDVH[XDOJHQGHUHTXDOZRUOG
ZLWK DEHUUDQW VH[XDO EHKDYLRU DQG GHFUHDVHG UHSURGXFWLYH UDWHV FRQWULEXWLQJ WR SRSXODWLRQ
H[WLQFWLRQ 7KLV ZRXOG EH WKH EDVLV RI WKH WKHRULHV RI .DOL \XJD DQG HQG RI WKH ZRUOG LQ
P\WKRORJLHV 7KH TXDQWDO PDJLFDO ZRUOG RI WKH 1HDQGHUWKDOV ZRXOG SHUVLVW 9LWDPLQ '
GHILFLHQF\FDQSURGXFHDEQRUPDOLWLHVLQEUDLQV\QDSWRJHQHVLVDQGJURZWK0DFURFHSKDO\DQG

ODUJH VL]HG EUDLQV DUH VHHQ LQ DXWLVP DQG 1HDQGHUWKDOV 7KH 1HDQGHUWKDO KDYH EHHQ
SRVWXODWHGWRKDYHWKH$32%(&*SKHQRW\SHSURGXFLQJUHWURYLUDOUHVLVWDQFHDVLQ'UDYLGLDQ
UHODWHG$XVWUDOLDQDERULJLQDOV7KH1HDQGHUWKDOK\EULGVDUHUHVLVWDQWWRUHWURYLUDOLQIHFWLRQV
DQGKDYHOHVVRI+(59ORDGLQWKHJHQRPH7KHKRPRVDSLHQVODFNWKH$32%(&SKHQRW\SH
DQG DUH PRUH VXVFHSWLEOH WR UHWURYLUDO LQIHFWLRQV SURGXFLQJ LQFUHDVHG LQWHJUDWLRQ RI +(59
LQWRWKHJHQRPH+(59LQWHJUDWLRQLQWRWKHJHQRPHSURGXFHVMXPSLQJJHQHVDQGDG\QDPLF
JHQRPH7KLVG\QDPLFJHQRPHLVLPSRUWDQWLQJHQHUDWLRQRIFRPSOH[V\QDSWLFQHWZRUNVDQG
+/$SKHQRW\SHV7KLVOHDGVWRWKHVPDOOHUVL]HEUDLQZLWKLQFUHDVHLQSUHIURQWDOFRUWH[DQG
DXWRLPPXQLW\ LQ WKH KRPR VDSLHQV XQOLNH WKH (XUDVLDQ 1HDQGHUWKDO SKHQRW\SH 7KH KRPR
VDSLHQEUDLQZLWKLWVSUHIURQWDOFRUWH[GRPLQDQFHDQGVPDOOHUVL]HLVDFRQVHTXHQFHRI+(59
H[SUHVVLRQ LQ FRQWUDVW WR WKH ODUJH VL]HG 1HDQGHUWKDO EUDLQ ZLWK VPDOOHU SUHIURQWDO FRUWH[
ZKLFK LV LQGXFHG E\ HQGRV\PELRWLF DUFKDHDO RYHU JURZWK 7KH LQFUHDVHG FKROHVWHURO OHYHOV
DQGELOHDFLGOHYHOVLQKRPRVDSLHQVUHVXOWHGLQELOHDFLGELQGLQJWRROIDFWRU\*3&5UHFHSWRUV
DQG OLPELF OREH VWLPXODWLRQ 7KLV UHVXOWHG LQ SUHIURQWDO FRUWH[ DQG WHPSRUDO FRUWH[
K\SHUWURSK\7KHKRPRVDSLHQEUDLQZDVGRPLQDWHGE\WKHODUJHSUHIURQWDOFRUWH[ZKLFKZDV
UHTXLUHGIRUH[HFXWLYHORJLFDOUHDVRQLQJDQGTXHVWLRQLQJDELOLW\7KLVOHGRQWRWKHZRUOGRI
ORJLF DQG UHDVRQ 7KH KRPR VDSLHQ EUDLQ ZDV GRPLQDWHG E\ D ZHE RI V\QDSWLF FRQQHFWLRQV
SURGXFHG E\ +(59 H[SUHVVLRQ PHGLDWHG G\QDPLF JHQRPH 7KH SUHIURQWDO FRUWLFDO
GRPLQDQFH OHG WR WKH HYROXWLRQ RI ODUJH VRFLDO JURXSV DQG QDWLRQ VWDWHV 7KH HYROXWLRQ RI
ODQJXDJH DUHDV LQ WKH IURQWRSDULHWDO FRUWH[ GHYHORSHG LQWR OLQJXLVWLF VXEVWUDWHV RI QDWLRQ
VWDWHV7KLVUHVXOWHGLQODFNRIJOREDOFRQVFLRXVQHVVDQGJHQHVLVRIWKHLGHDRIZDUEHWZHHQ
QDWLRQVDQGSHUVHFXWLRQRIOLQJXLVWLFJURXSVRUQDWLRQV7KLVZDVDORJLFDOEUDLQDVFRPSDUHG
WR WKH LQWXLWLYH DQG VSLULWXDO EUDLQ RI WKH 1HDQGHUWKDOV 7KH ORVV RI H[WUDVHQVRU\ TXDQWDO
SHUFHSWLYHPRGHVRIWKHKRPRVDSLHQEUDLQOHGWRGHFUHDVHGFRPPXQLRQZLWKSODQWVDQLPDOV
DQG QDWXUH OHDGLQJ WR GHFUHDVHG HQYLURQPHQWDO FRQVFLRXVQHVV LQ WKH :HVWHUQ KRPR VDSLHQ
FLYLOL]DWLRQ+RPRVDSLHQVDORQHZHUHFRQVLGHUHGWRKDYHWKHOLIHIRUFHRIVRXODQGWKHSODQW
DQG DQLPDO NLQJGRP ZDV RXWVLGH WKH SDOH RI VSLULWXDOLW\ 7KH ORVV RI HQYLURQPHQWDO
FRQVFLRXVQHVVDQGVSLULWXDOLW\UHVXOWHGLQHQYLURQPHQWDOGHVWUXFWLRQDQGJOREDOZDUPLQJ7KH
FRPPXQLRQ ZLWK QDWXUH ZDVORVWDQGOLIHEHFDPHPHFKDQLFDO ORJLFDO DQG FRPPRQVHQVLFDO
7KHPDJLFDOGUHDP\WUDQFHOLNHZRUOGRIWKH1HDQGHUWKDOEUDLQZDVORVW7KLVDURVHZLWKWKH
GRPLQDQFH RI WKH :HVWHUQ &KULVWLDQ FLYLOL]DWLRQ 7KH GUHDP\ WUDQFH OLNH ZRUOG RI WKH
KHUPHWLF IDLWKV .DEEDOD 6KDPDQLVP 3DJDQLVP +LQGXLVP 7DRLVP 6KLWRLVP DQG *QRVWLF
&KULVWLDQLW\ ZDV ORVW ZLWK ORVV RI WKH 1HDQGHUWKDO VWUXFWXUH RI WKH EUDLQ 7KH DUFKDHDO

RYHUJURZWKUHODWHGFKDQJHVLQWKHEUDLQDQGGHYHORSPHQWRI1HDQGHUWKDOK\EULGVFRQWULEXWH
WRVFKL]RSKUHQLDDQGDXWLVP

1HDQGHUWKDOK\EULGVDQGHQGRFULQHIXQFWLRQ
/RZ FKROHVWHURO OHDGV WR ORZ WHVWRVWHURQH DQG HVWURJHQ OHYHOV DQG GHIHFWLYH VH[
KRUPRQH PRGXODWLRQ RI EUDLQ IXQFWLRQ DQG JURZWK 7KLV ZRXOG OHDG WR GHIHFWLYH VWUHVV
UHVSRQVH DQG VH[XDO UHSURGXFWLYH UDWHV OHDGLQJ WR HYHQWXDO H[WLQFWLRQ RI WKH 1HDQGHUWKDO
SRSXODWLRQ /RZ WHVWRVWHURQH OHYHOV DQG HVWURJHQ OHYHOV ZRXOG OHDG WR OHVV GHILQHG DVH[XDO
SKHQRW\SHV ODFN RI PDOH GRPLQDQFH JHQGHU HTXDOLW\ DQG PDWULDUFKDO VRFLHWLHV ZLWK JURXS
PRWKHUKRRG 7KLV LV WKH EDVLV RI WKH PDWULDUFKDO FXOWXUDO SKHQRW\SH ZLWK ODFN RI PDOH
GRPLQDQFH 7KH ORZ VH[ KRUPRQH OHYHOV ZRXOG OHDG WR ORZ PDWXULW\ UDWHV VHHQ LQ IRVVLO
VSHFLPHQV RI FKDUDFWHULVWLF RI 1HDQGHUWKDOV %LOH DFLGV ELQG WR WKH ROIDFWRU\ UHFHSWRUV DQG
OHDG WR OLPELF OREH VWLPXODWLRQ DQG IDPLO\ ERQGLQJ DV ZHOO DV ERQGLQJ EHWZHHQ LQGLYLGXDO
PRWKHUDQGFKLOG7KHJURXSPRWKHUKRRGFKDUDFWHULVWLFRIPDWULDUFK\ZRXOGEHDUHIOHFWLRQRI
ORZELOHDFLGOHYHOV7KHORZELOHDFLGOHYHOVOHDGVWROHVVIDPLO\ERQGLQJ7KLVFRQWULEXWHVWR
DXWLVWLF EHKDYLRXU 7KHUH LV QR IDPLO\ ERQGLQJ ZKLFK JHWV UHSODFHG ZLWK FRPPRQ
PRWKHUKRRG7KLVILWVLQZLWKWKHJUDQGPRWKHUK\SRWKHVLVZLWKGRPLQDQWIHPDOHVUHJXODWLQJ
WKH VRFLHW\ 7KH VRFLHW\ EHFRPHV PRUH JHQGHU HTXDO ZLWK LWV DVWHUHRW\SHG DVH[XDO
EHKDYLRXUDOSDWWHUQVFRPPRQLQDXWLVP7KHVHSKHQRPHQDFDQOHDGWRJOREDOL]DWLRQORVVRI
QDWLRQDOLGHQWLW\ORVVRIVH[XDOLGHQWLW\DQGXQLYHUVDOLVDWLRQRIEHKDYLRUDQGWKRXJKW7KH
KRPRVDSLHQVKDGKLJKHUFKROHVWHUROOHYHOVOHDGLQJWRKLJKHUOHYHOVRIVH[KRUPRQHV\QWKHVLV
WHVWRVWHURQH DQG HVWURJHQ 7KLV OHDG WR WKH GHYHORSPHQW RI D PDOH GRPLQDQW SDWULDUFKDO
VRFLHW\LQKRPRVDSLHQV7KHIHPDOHVZHUHVXSSUHVVHGDQGZHUHQRWDOORZHGDQ\ULJKWVDQG
VXEMHFWHG WR WKH ULJLG VRFLDO FRGHV HQIRUFHG E\ WKH PDOH GRPLQDQW SDWULDUFK\ 7KH VH[XDO
EHKDYLRU ZDV DOVR PRUH WRZDUGV FRQVHUYDWLYH IRUPV ZLWK DEHUUDWLRQV EHLQJ FRQVLGHUHG DV
LOOHJDO7KHKRPRVDSLHQVRFLHW\JHQGHUXQHTXDOVRFLHW\7KHLQFUHDVHGFKROHVWHURODQGELOH
DFLGOHYHOVOHGWRLQFUHDVHLQIDPLO\ERQGLQJDQGIDPLO\DVDEDVLFVWUXFWXUHRIVRFLHW\7KH
FKLOG ZDV LGHQWLILHG ZLWK WKH IDWKHU DQG KLV IDPLO\ 7KH FRQFHSW RI QXFOHDU IDPLO\ JRW
VWUHQJWKHQHGLQWKHKRPRVDSLHQJURXS7KHJURXSFRPPXQLW\IHHOLQJDQGJURXSPRWKHUKRRG
RI WKH PDWULDUFKDO 1HDQGHUWKDO VRFLHW\ ZDV ORVW 1HDQGHUWKDO VRFLHWLHV ZLWK LWV JURXS
PRWKHUKRRGJURXSFRQVFLRXVQHVVJHQGHUHTXDOLW\DQGWRJHWKHUQHVVZHUHDNLQWRDSULPLWLYH
IRUPRIFRPPXQLVWVRFLHW\7KLVSRVWXODWHKDVEHHQSXWIRUZDUGE\(QJHOVLQKLVWKHVLVµ7KH
0RWKHUV¶ 7KH 1HDQGHUWKDO VRFLHW\ EHFDXVH RI LWV JURXS FRQVFLRXVQHVV ZDV PRUH RI D
SULPLWLYH FRPPXQLVW RU VRFLDOLVWLF VRFLHW\ DQG SDJDQLVWLF 7KH ODFN RI VH[ KRUPRQH

PRGXODWLRQ RI EUDLQ IXQFWLRQ LQ 1HDQGHUWKDO K\EULGV FDQ FRQWULEXWH WR VFKL]RSKUHQLD DQG
DXWLVP

1HDQGHUWKDO K\EULGV DFWLQLGLF DUFKDHD DQG FLYLOL]DWLRQDO GLVHDVH FDQFHU PHWDEROLF
V\QGURPH;DXWRLPPXQHGLVHDVHDQGQHXURGHJHQHUDWLRQ
7KH KXPDQ FHOO DQG WLVVXHV JR LQWR KLEHUQDWLRQ PHGLDWHG E\ WKH DFWLQLGLF DUFKDHDO
FRORQ\VHFUHWHGGLJR[LQ7KH'1$SRO\PHUDVH51$SRO\PHUDVHULERVRPDOIXQFWLRQIDWW\
DFLG R[LGDWLRQ JO\FRO\VLV 7&$ F\FOH PLWRFKRQGULDO R[LGDWLYH SKRVSKRU\ODWLRQ DQG
FKROHVWHUROIDWW\DFLGV\QWKHVLVJHWVVKXWGRZQRZLQJWRDUFKDHDOGLJR[LQLQGXFHGPDJQHVLXP
GHILFLHQF\ 7KH KXPDQ FHOO DQG WLVVXHV JR LQWR KLEHUQDWLRQ ZLWK WKH HQHUJ\ IRU VXUYLYDO
SURGXFHG E\ PHPEUDQH VRGLXP SRWDVVLXP $73DVH PHGLDWHG $73 V\QWKHVLV 7KH DFWLQLGLF
DUFKDHD IRUPV D PXOWLFHOOXODU FRORQ\QHWZRUN ZKLFK WDNHV RYHU WKH KXPDQ FHOO DQG WLVVXHV
ZKLFKDUHUHGXFHGWRD]RPELHLQKLEHUQDWLRQ7KLVSURGXFHVDKXPDQ]RPELHV\QGURPH7KH
JOXFRVH IDWW\ DFLGV DQG DPLQR DFLGV DFFXPXODWH LQ WKH FHOO DV WKH PHWDEROLF DQG FDWDEROLF
SDWKZD\V DUH EORFNHG 7KH DFWLQLGLF DUFKDHDO PHWDEROLF XVLQJ DFWLQLGH FDWDO\VLV WDNHV RYHU
$FWLQLGHGHSHQGHQWKH[RNLQDVHDFWLYLW\DQGPLWRFKRQGULDO$73V\QWKDVHDFWLYLW\DVZHOODV
FKROHVWHURO R[LGDVH DFWLYLW\ KDV EHHQ GHVFULEHG LQ V\VWHPLF GLVRUGHUV 7KH K\SHUJO\FHPLD
JHQHUDWHGGXHWRDFWLQLGLFDUFKDHDVHFUHWHGGLJR[LQLQGXFHGEORFNLQJOXFRVHFDWDEROLVPOHDGV
WR GLDEHWHV PHOOLWXV (QGRJHQRXV GLJR[LQ OHDGV WR LQFUHDVH LQ YDVFXODU VPRRWK PXVFOH
FDOFLXPYDVRVSDVPDQGYDVFXODUWKURPRERVLV7KHDFWLQLGLFDUFKDHDODWDYLVWLFQHWZRUNDQG
FRORQ\ JURZV LQWR QHRSODVPV DQG FDQFHU 7KH DFWLQLGLF DUFKDHDO FRORQ\ JHQHUDWHG GLJR[LQ
VKXWV GRZQ WKH PHWDEROLF PDFKLQHU\ RI WKH QHXURQDO FHOO DQG RYHU D SHULRG RI WLPH OHDG WR
FHOOGHDWKFRQWULEXWLQJWRQHXURGHJHQHUDWLYHGLVRUGHUVOLNH3DUNLQVRQ¶VGLVHDVH$O]KHLPHU¶V
GLVHDVHDQGPRWRUQHXURQGLVHDVH7KHDFWLQLGLFDUFKDHDOFRORQ\VHFUHWHGGLJR[LQVKXWVGRZQ
WKHQHXURQDOPHWDEROLFPDFKLQHU\DQGV\QDSWLFQHWZRUNVUHVXOWLQJLQGRPLQDQFHRITXDQWDO
DQG PDJQHWRSHUFHSWLRQ 4XDQWDO DQG PDJQHWRSHUFHSWLRQ LV PHGLDWHG E\ GLJR[LQ LQGXFHG
GLSRODU PDJQHWLWH DQG DUFKDHDO SRUSK\ULQV SXPSHG SKRQRQ V\VWHP $V WKH FHUHEHOOXP
FRQWDLQV RI WKH QHXURQV LQ WKH EUDLQ WKH FHUHEHOODU PDJQHWRSHUFHSWLRQ DQG TXDQWDO
SHUFHSWLRQ GRPLQDWHV 7KH FHUHEHOOXP EHFRPHV GRPLQDQW &HUHEHOODU GRPLQDQFH FDQ DOVR
RFFXU GXH WR HOHFWURPDJQHWLF SROOXWLRQ DQG ZLGHU LQWHUQHW XVDJH /RZ OHYHO RI (0) LV
SHUFHLYHGE\PDJQHWLWHLQWKHEUDLQ7KLVOHDGVWRSUHIURQWDOFRUWLFDODWURSK\DQGFHUHEHOODU
GRPLQDQFH&HUHEHOODUGRPLQDQFHKDVEHHQUHODWHGWRDXWLVPVFKL]RSKUHQLD2&'$'+'
VH[XDOGHYLDQWWUDLWVDQGQDwYHFKLOGKRRGW\SHGLVLQKLELWHGLPSXOVLYHEHKDYLRU7KHDWDYLVWLF
DUFKDHDO FRORQ\ QHWZRUN WDNHV RYHU WKH ERG\ DQG WLVVXHV 7KLV OHDGV WR LPPXQH DFWLYDWLRQ

JHQHUDWLRQ RI DXWRDQWLJHQV DV WKH KXPDQ ERG\ WULHV WR ILJKW WKH LQYDGLQJ DUFKDHDO DWDYLVWLF
FRORQ\ 7KLV OHDGV WR DXWRLPPXQH GLVHDVH OLNH OXSXV PXOWLSOH VFOHURVLV DQG UKHXPDWRLG
DUWKULWLV7KHDUFKDHDODWDYLVWLFFRORQ\JHQHUDWHGGLJR[LQEORFNVUHYHUVHWUDQVFULSWDVHDFWLYLW\
DQG UHWURYLUDO PXOWLSOLFDWLRQ DQG LQWHJUDWLRQ 7KLV OHDGV WR UHVLVWDQFH WR UHWURYLUDO LQIHFWLRQ
7KH GHIHFWLYH +(59 H[SUHVVLRQ OHDGV WR GHIHFWLYH MXPSLQJ JHQHV DQG +/$ JHQHV
FRQWULEXWLQJ WR DXWRLPPXQH GLVHDVH 7KH 0+& JHQHV DUH RI 1HDQGHUWKDO RULJLQ DQG
DXWRLPPXQLW\LVUHODWHGWR1HDQGHUWKDO0+&DOOHOHV$XWRLPPXQLW\DQGDQWLEUDLQDQWLERGLHV
DUHFKDUDFWHULVWLFRIDXWLVP$XWLVPDQGVFKL]RSKUHQLDLVDVVRFLDWHGZLWKV\VWHPLFGLVRUGHUV
7KH DXWLVWLF PHWDERORQRPLF SKHQRW\SH LV DOVR VHHQ LQ FDQFHU DXWRLPPXQH GLVHDVH
GHJHQHUDWLRQ PHWDEROLF V\QGURPH ; DQG VFKL]RSKUHQLD 7KLV LV GXH WR D YDJDO QHXURSDWK\
GXH WR GHIHFWLYH DFHW\O FKROLQH V\QWKHVLV FRQVHTXHQW WR ODFN RI VXEVWUDWH DFHW\O &R$ 7KLV
DOVR OHDGV WR V\PSDWKHWLF RYHUDFWLYLW\ 9DJDO QHXURSDWK\ LV DVVRFLDWHG ZLWK LPPXQH
DFWLYDWLRQDQGDXWRLPPXQHGLVHDVH9DJDOQHXURSDWK\FDQFRQWULEXWHWRLQVXOLQUHVLVWDQFHDQG
LQFUHDVHGV\PSDWKHWLFDFWLYLW\WRQHRSODVWLFWUDQVIRUPDWLRQ7KHFKROHVWHUROV\QWKHWLFGHIHFW
OHDGVWRGHIHFWLYHV\QDSWRJHQHVLVVHHQLQDXWLVPDQGVFKL]RSKUHQLD&KROHVWHUROGHULYHGELOH
DFLG DQG YLWDPLQ ' GHILFLHQF\ FDQ FRQWULEXWH WR VFKL]RSKUHQLD DQG DXWLVP &KROHVWHURO LV
LQYROYHG LQ FRQWDFW LQKLELWLRQ DQG ZKHQ WKH PHPEUDQHV DUH GHIHFWLYH FDQ OHDG WR FHOO
SUROLIHUDWLRQ/RZFKROHVWHUROOHYHOVOHDGWRORZYLWDPLQ'DQGELOHDFLGOHYHOVERWKRIZKLFK
ELQGWR9'5SURGXFLQJLPPXQRVXSSUHVVLRQ7KLVFDQFRQWULEXWHWRDXWRLPPXQLW\9LWDPLQ
' GHILFLHQF\ FDQ FRQWULEXWH WR LQVXOLQ UHVLVWDQFH DQG PHWDEROLF V\QGURPH SKHQRW\SH LQ
1HDQGHUWKDOV%LOHDFLGVIXQFWLRQDVKRUPRQHVUHJXODWLQJOLSLGDQGJOXFRVHPHWDEROLVPDQG
LWVGHILFLHQF\FDQDOVRFRQWULEXWHWRV\QGURPH;DQGLQVXOLQUHVLVWDQFH7KXVWKHJHQHUDWLRQ
RI DWDYLVWLF DUFKDHDO FRORQ\QHWZRUN OHDGV WR D QHZ PHWDEROLF LPPXQH DQG QHXURQDO
SKHQRW\SH WDNLQJ RYHU WKH KXPDQ ERG\ FRQWULEXWLQJ WR FLYLOL]DWLRQDO GLVHDVHV OLNH FDQFHU
GHJHQHUDWLRQV DXWRLPPXQH GLVHDVH DQG PHWDEROLF V\QGURPH ; ZKLFK DUH VKRZLQJ DQ
HSLGHPLFLQFUHDVHLQLQFLGHQFHOLNHDXWLVP7KHKXPDQERG\JRHVWRKLEHUQDWLRQDQGGHDWKDV
D ]RPELH WDNHQ RYHU E\ WKH DFWLQLGLF DUFKDHDO FRORQ\ QHWZRUN ZKLFK UXOHV RYHU WKH KXPDQ
EUDLQ RUJDQ V\VWHPV WLVVXHV DQG FHOO 7KH DJH RI 1HDQGHUWKDOV EORRPV DJDLQ ZLWK LWV
FDWDVWURSKLFFRQVHTXHQFHV

&RQFOXVLRQ
7KH UHVXOWV VXJJHVW QHDQGHUWKDOLVDWLRQ RI WKH KXPDQV GXH WR JOREDO ZDUPLQJ DQG
DUFKDHDO JURZWK 7KH 1HDQGHUWKDOLVDWLRQ RI WKH KXPDQ VSHFLHV LV WKH EDVLV RI WKH JOREDO
DXWLVWLF VFKL]RSKUHQLF DQG FLYLOL]DWLRQDO GLVHDVH HSLGHPLF HSLGHPLF 1HDQGHUWKDO K\EULG

]RPELH V\QGURPH 7KH PDWULOLQHDO VRFLHWLHV DUH IRVVLOL]HG 1HDQGHUWKDO UHPQDQWV DQG
QHRQHDQGHUWKDO K\EULGV FRQWULEXWH WR FLYLOL]DWLRQDO GLVHDVHV 7KHUH LV D PLQG FKDQJH
OLQJXLVWLFFKDQJHFXOWXUDOFKDQJHVRFLDOFKDQJHDQGVSLULWXDOFKDQJHDNLQWRFOLPDWHFKDQJH
RZLQJ WR LQFUHDVHG DUFKDHDO JURZWK DV D FRQVHTXHQFH RI JOREDO ZDUPLQJ 7KH 1HDQGHUWKDO
VSHFLHV HYROYHG GXULQJ SHULRGV RI H[WUHPH FOLPDWH FKDQJH RI WKH ,FH DJH ZKLFK OHG WR
LQFUHDVHG H[WUHPRSKLOLF HQGRV\PELRWLF DUFKDHDO JURZWK $ VLPLODU H[WUHPH FOLPDWH
SKHQRPHQRQRIJOREDOZDUPLQJLVDIHDWXUHRIRXUFXUUHQWH[LVWHQFH7KLVOHDGVWRLQFUHDVHG
H[WUHPRSKLOLFHQGRV\PELRWLFDUFKDHDOJURZWKDQGQHDQGHUWKDOLVDWLRQRIWKHSRSXODWLRQ/RZ
FKROHVWHUROOHYHOVDQGORZVH[KRUPRQHOHYHOVZRXOGOHDGWRDVH[XDOSKHQRW\SHVDQGHYHQWXDO
SRSXODWLRQ H[WLQFWLRQ $ QHZ KXPDQ VSHFLHV KRPR DUFKDHD[ QHDQGHUWKDOLV ZLWK LWV QHZ
DQWKURSRPHWULF PHWDEROLF FXOWXUDO OLQJXLVWLF QHXUDO SV\FKRORJLFDO DQG JHQHWLF DWDYLVWLF
SKHQRW\SH LV HYROYLQJ 7KH 1HDQGHUWKDOLVDWLRQ RI WKH KXPDQ VSHFLHV LV WKH EDVLV RI WKH
JOREDO DXWLVWLF VFKL]RSKUHQLF DQG FLYLOL]DWLRQDO GLVHDVH HSLGHPLF HSLGHPLF 1HDQGHUWKDO
K\EULG]RPELHV\QGURPH7KHPDWULOLQHDOVRFLHWLHVDUHIRVVLOL]HG1HDQGHUWKDO UHPQDQWV DQG
QHRQHDQGHUWKDO K\EULGV FRQWULEXWH WR FLYLOL]DWLRQDO GLVHDVHV 7KH 1HDQGHUWKDO K\EULGV ZLOO
HYHQWXDOO\UHSODFHWKHKRPRVDSLHQVSHFLHV
5HIHUHQFHV

0RUJDQ( 7KH 1HDQGHUWKDO WKHRU\RI DXWLVP$VSHUJHUDQG$'+'
$QWKURSRORJ\
1HZ$QDWRPLVW%
+XPDQV3URF%LRO6FL±
+XP(YRO±


%RG\,6%1
*HQXV+RPR (YLGHQFH IURP WKH1HDQGHUWDO DQG0RGHUQ/LQHDJHV3URF1DWO$FDG
6FL86$±

&+$37(5
7+((1'2)0(',&,1($1'7+(($57+',(7$5<),%5(+80$1'58*6
683(5%8*6(0(5*,1*9,586(6',6($6(3+(127<3(&/,0$7(
&+$1*($1'(1'26<0%,27,&$5&+$($

7KHDUFKDHDGHYHORSSURWHFWLYHPHFKDQLVPRIDQWLELRWLFUHVLVWDQFHDQGGRPLQDWHVWKHFRORQLF
PLFURIORUD 7KH FRORQLF DUFKDHD E\ QDWXUDO VHOHFWLRQ DQG '1$JHQH H[FKDQJHV ZLWK RWKHU
FRORQLF DQG HQGRV\PELRWLF RUJDQLVP WUDQVIHU WKH JHQHV IRU DQWLELRWLF UHVLVWDQFH WR RWKHU
FRORQLFIORUD7KLVIRUPVWKHEDVLVIRUWKHJHQHUDWLRQRIVXSHUEXJVUHVLVWDQWWRDOODQWLELRWLFV
DQG WKH H[WUHPRSKLOLF DUFKDHD GRPLQDWHV WKH FRORQLF PLFURELRPH ZLWK DFTXLUHG SURWHFWLYH
PHFKDQLVPV IRU DQWLELRWLF UHVLVWDQFH 7KHVH DUFKDHDO DQWLELRWLF UHVLVWDQFH JHQHV DUH
WUDQVIHUUHG E\ JHQH DQG SODVPLG '1$ H[FKDQJH ZLWK UHPQDQW FRORQLF DQG HQGRV\PELRWLF
PLFURRUJDQLVPJHQHUDWLQJVXSHUEXJV7KXVDQWLELRWLFDQGRWKHUQRQDQWLELRWLFGUXJVSURPRWH
FRORQLFDUFKDHDOJURZWKDQGHQGRV\PELRVLVSURGXFLQJQHDQGHUWKDOLVDWLRQRIWKHVSHFLHVDQG
JHQHUDWLRQ RI VXSHUEXJV ZKLFK NLOOV RI WKH KRPR VDSLHQ VSHFLHV 7KH FRORQLF DUFKDHD DOVR
JHQHUDWHV 51$ YLURLGV ZKLFK DUH FRQYHUWHG WR '1$ YLURLGV E\ FRORQLF HSLWKHOLDO +(59
UHYHUVHWUDQVFULSWDVHDQGJHWVLQWHJUDWHGLQWRWKHFRORQLFJHQRPH7KH51$DQG'1$YLURLGV
K\EULGLVH ZLWK WKH YLURLGDO DQG EDFWHULDO SRSXODWLRQ RI WKH JXW PLFURELRPH DQG YLURELRPH
'1$ DQG 51$ RI WKH JXW OHDGLQJ WR JHQHUDWLRQ RI QHZ HPHUJLQJ YLUXVHV 7KH 51$ DQG
'1$ YLURLGV DQG JXW EDFWHULD FDQ DOVR K\EULGLVH ZLWK KXPDQ JHQRPLF VHTXHQFHV IRU
LPPXQLW\PHWDEROLFUHJXODWLRQJURZWKIDFWRUVFHOOJURZWKFHOOGHDWKQHXURWUDQVPLWWHUVDQG
+(59VHTXHQFHVRIWKHFRORQLDO HSLWKHOLDO FHOO 7KH K\EULGL]DWLRQ RI DUFKDHDO 51$ YLURLGV
ZLWKKXPDQJHQRPLF+(59VHTXHQFHVFDQJHQHUDWHUHWURYLUXVHV7KLVOHDGVWRJHQHUDWLRQRI

QHZ EDFWHULD 51$ DQG '1$ YLUXVHV PRGXODWLQJ FHOO GHDWK FHOO JURZWK FHOO SUROLIHUDWLRQ
PHWDEROLVP HQGRFULQH IXQFWLRQ DQG EHKDYLRXU SURGXFLQJ DXWRLPPXQLW\ VFKL]RSKUHQLD
DXWLVP FDQFHU GLDEHWHV PHOOLWXV FRURQDU\ YDVFXODU GLVHDVH FHUHEURYDVFXODU GLVHDVH DQG
QHXURGHJHQHUDWLRQ7KXVWKHJHQHUDWLRQRIVXSHUEXJVDQGHPHUJLQJYLUXVHVLVSURPRWHGE\D
ORZILEUHGLHW$ORZILEUHGLHWOHDGVWRFRORQLFDQGHQGRV\PELRWLFDUFKDHDOJURZWKOHDGLQJWR
QHDQGHUWKDOLVDWLRQRIWKHVSHFLHVDQGJHQHUDWLRQRIVXSHUEXJVDQGHPHUJLQJYLUXVHVWRZKLFK
WKH QHDQGHUWKDOLVHG VSHFLHV LV UHVLVWDQW FRQVHTXHQW WR HQGRJHQRXV GLJR[LQ VHFUHWLRQ 7KH
QHDQGHUWKDOLVHGVSHFLHVJHQHUDWHGVXSHUEXJVDQGHPHUJLQJYLUXVHVNLOOVRIWKHKRPRVDSLHQ
VSHFLHVZKLFKDUHVHQVLWLYHWRWKHVXSHUEXJVDQGHPHUJLQJYLUXVHVDQGGRQRWKDYHUHVLVWDQFH
WR LW 7KXV WKH PRGHUQ DUPDPHQWDULXP RI DQWLELRWLFV DQWLSV\FKRWLFV DQDOJHVLFV DQWL
K\SHUWHQVLYHV DQG DQWLGLDEHWLF GUXJV SURPRWH FRORQLF DQG HQGRV\PELRWLF DUFKDHDO JURZWK
GHYHORSPHQW RI VXSHUEXJV QHDQGHUWKDOLVDWLRQ RI VSHFLHV DQG LQGXFWLRQ RI FLYLOL]DWLRQDO
GLVHDVH7KXVWKHGUXJVXVHGWRWUHDWLQIHFWLRQVDQGKXPDQGLVHDVHWHQGWRSURGXFHVXSHUEXJV
HPHUJLQJYLUXVLQIHFWLRQDQGFLYLOL]DWLRQDOGLVHDVHVFDQFHUDXWRLPPXQHGLVHDVHPHWDEROLF
V\QGURPH[QHXURGHJHQHUDWLRQVFKL]RSKUHQLDDQGDXWLVP7KXVWKHGUXJDUPDPHQWDULXPRI
DQWLELRWLFV DQG QRQDQWLELRWLF GUXJV XVHG WR WUHDW KXPDQ LQIHFWLRQV DQG GLVHDVHV LQFUHDVHV
FRORQLFDQGHQGRV\PELRWLFDUFKDHDOJURZWKQHDQGHUWKDOLVHVWKHVSHFLHVJHQHUDWHVVXSHUEXJV
DQGOHDGVWRLQFUHDVHGLQFLGHQFHRIFLYLOL]DWLRQDOGLVHDVH7KHJXWPLFURELRPHDQGYLURELRPH
PRGXODWHG E\ GLHWDU\ ILEUH LQWDNH KLJK SURWHLQ KLJK IDW GLHWV DQWLELRWLFV DQG QRQDQWLELRWLF
GUXJVOLNHDQWLSV\FKRWLFVDQWLK\SHUWHQVLYHVDQDOJHVLFVOHDGVWRDOWHUDWLRQLQJXWPLFURELDO
DQG YLURLGDO ELRJHRJUDSK\ OHDGLQJ WR JHQHUDWLRQ RI VXSHUEXJV DQG VXSHUYLUXVHV 7KH JXW
DUFKDHD KLJKO\ UHVLVWDQW WR FRQYHQWLRQDO DQWLELRWLFV DQG QRQDQWLELRWLF GUXJV DQG SUROLIHUDWH
ZKHQ DQWLELRWLFV DQG QRQDQWLELRWLF GUXJV OLNH DQWLK\SHUWHQVLYHV DQWLSV\FKRWLFV DQG
DQDOJHVLFV DUH XVHG RQ D ZLGHVSUHDG EDVLV 7KH\ GHYHORS DQWLELRWLF UHVLVWDQFH DQG QRQ
DQWLELRWLF GUXJ UHVLVWDQFH DQG LW LV WUDQVIHUUHG WR RWKHU FRORQLF DQG JXW EDFWHULD DQG YLUXVHV
JHQHUDWLQJ VXSHUEXJV DQG VXSHUYLUXVHV H[WHUPLQDWLQJ WKH KRPR VDSLHQ SRSXODWLRQ 7KH
JURZWKDQGGRPLQDQFHRIWKHFRORQLFDQGHQGRV\PELRWLFEDFWHULDOHDGVWRJHQHUDWLRQRIKRPR
QHDQGHUWKDOLV VSHFLHV ZKLFK LV UHVLVWDQW WR VXSHUEXJV DQG VXSHUYLUXVHV DQG VXUYLYH EXW JHW
DIIHFWHG E\ FLYLOL]DWLRQDO GLVHDVHV OLNH FDQFHU DXWRLPPXQLW\ PHWDEROLF V\QGURPH
VFKL]RSKUHQLD DXWLVP DQG QHXURGHJHQHUDWLRQ +RPR QHRQHDQGHUWKDOLV WKXV JHQHUDWHG E\
FRORQLFDQGHQGRV\PELRWLFDUFKDHDOJURZWKFDQEHFRPHH[WLQFWRYHUDVORZSHULRGRIWLPH
+RPRQHDQGHUWKDOLVZLWKLWVH[WUHPRSKLOLFDUFKDHDOHQGRV\PELRVLVLVKDUG\DQGUHVLVWDQWDQG
FDQ VXUYLYH JOREDO ZDUPLQJ DQG H[WUHPHV RI FOLPDWH FKDQJH DV ZHOO DV VXUYLYLQJ
H[WUHPRSKLOLF DQDHURELF FRQGLWLRQV RI RWKHU SODQHWV DQG JDODFWLF V\VWHPV 7KH GLHWDU\ ILEUH

LQWDNHLQKLELWVDUFKDHDOJURZWKDQGSRSXODWLRQVZLWKORZGLHWDU\ILEUHLQWDNHDUHUHVLVWDQWWR
FLYLOL]DWLRQDO GLVHDVHV OLNH PHWDEROLF V\QGURPH FDQFHU DXWRLPPXQH GLVHDVH DQG
VFKL]RSKUHQLD 7KH KXPDQ PHWKDQRJHQLF DUFKDHD DUH KLJKO\ UHVLVWDQW WR URXWLQH DQWLELRWLFV
DQGQRQDQWLELRWLFGUXJVDQGWKHLQWDNHRIVXFKGUXJVNLOOVWKHFRORQLFPLFURELRPHOHDGLQJWR
DUFKDHDO JURZWK DQG HQGRV\PELRVLV DQG QHDQGHUWKDOLVDWLRQ WR SURGXFH D KDUG\ KRPR
JDODFWLFXV VSHFLHV FDSDEOH RI VXUYLYLQJ LQ H[WUHPH FOLPDWHV RI HDUWK DQG RWKHU SODQHWV 7KH
KXPDQ GUXJV DQG DQWLELRWLFV LQGXFHG PRGXODWLRQ RI WKH JXW PLFURELRPH ZLWK LQFUHDVHG
FRORQLF DQG HQGRV\PELRWLF DUFKDHDO JURZWK DOVR FRQWULEXWHV WR JOREDO ZDUPLQJ YLD WKH
PHFKDQLVP RI DUFKDHDO PHWKDQRJHQHVLV 7KH ZLGHVSUHDG XVH RI DQWLELRWLFV DQG QRQ
DQWLELRWLFGUXJVFRQWULEXWHWRFRORQLFDQGHQGRV\PELRWLFDUFKDHDOJURZWKFOLPDWHFKDQJHDQG
VWLOO IXUWKHU PRUH DUFKDHDO JURZWK 7KLV KXPDQ FRORQLF DQG HQGRV\PELRWLF DUFKDHDO JURZWK
FRQVHTXHQW WR VWUHVV LQWHUQHW ILHOGV ORZ OHYHO (0) ORZ GLHWDU\ ILEUH LQWDNH DQWLELRWLF XVH
DQG QRQDQWLELRWLF GUXJ XVH SURGXFLQJ PHWKDQRJHQHVLV LV WKH SULQFLSDO FDXVH RI JOREDO
ZDUPLQJ 7KH ZLGHVSUHDG XVH RI DQWLELRWLF DQG QRQDQWLELRWLF GUXJV NLOOV RI WKH FRORQLF
PLFURIORUD DQG UHSODFHV LW ZLWK DUFKDHD UHVLVWDQW WR DQWLELRWLF DQG QRQDQWLELRWLF GUXJV 7KH
ORZ LQWDNH RI GLHWDU\ ILEUH SURPRWHV FRORQLF DUFKDHDO DQG HQGRV\PELRWLF DUFKDHDO JURZWK
6WUHVV SURGXFHV FDWHFKRODPLQH LQGXFHG LQFUHDVHG LQ FRORQLF DQG HQGRV\PELRWLF DUFKDHDO
JURZWKDQGEUHDFKLQJRIWKHJXWEORRGEDUULHU7KHZLGHVSUHDGXVHRILQWHUQHWDQGORZOHYHO
RI (0) ILHOG RI PRELOH SKRQHV SURPRWHV HQGRV\PELRWLF DUFKDHDO JURZWK 7KXV
HQGRV\PELRWLFDQGFRORQLFDUFKDHDOJURZWKDQGPHWKDQRJHQHVLVSURGXFLQJJOREDOZDUPLQJLV
D HQGRJHQRXV KXPDQ ELRORJLFDO HYHQW ZLWK KXPDQ ELRORJLFDO DFWLYLW\ DV D FHQWUH SLHFH
WULJJHULQJ WKH SURFHVV 7KH ZLGHVSUHDG XVH RI DQWLELRWLFV DQG QRQDQWLELRWLF GUXJV WUHDW
LQIHFWLRQVYLUDODQGEDFWHULDODVZHOODVFLYLOL]DWLRQDOGLVHDVHOLNHFDQFHUVFKL]RSKUHQLDPRRG
GLVRUGHU GHSUHVVLRQ DXWLVP DXWRLPPXQH GLVHDVH DQG QHXURGHJHQHUDWLRQ SURPRWHV FRORQLF
DQGHQGRV\PELRWLFDUFKDHDOJURZWKZKLFKQHDQGHUWKDOLVHVWKHVSHFLHVOHDGLQJWRVWLOOIXUWKHU
DQG HSLGHPLF RI FLYLOL]DWLRQDO GLVHDVHV PHGLDWHG E\ FRORQLF DQG HQGRV\PELRWLF DUFKDHDO
JURZWK +XPDQ PHGLFLQH DV ZH NQRZ LW KDV UHDFKHG D GHDG HQG 7KH DQWLELRWLF DQG QRQ
DQWLELRWLFHUDRIGUXJVKDGFRPHWRDQHQG7KHKXPDQHDUWKDVZHNQRZLWDOVRXQGHUJRHV
FDWDVWURSKLF FOLPDWH FKDQJH OHDGLQJ WR H[WLQFWLRQ RI WKH KXPDQ VSHFLHV DQG FRQGLWLRQV IRU
KXPDQKDELWDWLRQVLQHDUWK7KHPRGHUQPHGLFLQHDVZHNQRZRIDQGWKHHDUWKDVZHNQRZRI

KDYH HQGHG 7KH SULQFLSDO FDXVH RI FOLPDWH FKDQJH DQG LWV FDWDVWURSKLF FRPSOLFDWLRQV LV
DUFKDHDLVSRVWXODWHG

0DWHULDOVDQG0HWKRGV

GRQHE\$129$

5HVXOWV
DW]HURWLPH

0XUDPLFDFLG
FKDQJH
*URXS 'HFUHDVHZLWK
'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'1$FKDQJH 51$FKDQJH
'1$FKDQJH 51$FKDQJH
'R[\&LSUR 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

+0*&R$5 +0*&R$5
$73V\QWKDVH
'HFUHDVHZLWK
'R[\&LSUR
5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH
%LOH$FLGVFKDQJH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

3\UXYDWHFKDQJH
'HFUHDVHZLWK
'R[\&LSUR
5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH
DFLG
+2 $/$ $/$

+2
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

3$+ 3$+ +7FKDQJH
+7FKDQJH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'LVFXVVLRQ

JHQRPH


GLVHDVH
5HIHUHQFHV
3ODQW'LVHDVH

3ODQW3DWKRORJ\
(XU-%LRFKHP
&KHP
9DQ1R6WUDQG
3XEOLVKHUV
3UHVV
±
86$
%LRFKHPLFDO6FLHQFHV

0LFURELRO

0RO%LRO5HY±
%0&%LRORJ\


&+$37(5
7+(+80$1(1'26<0%,27,&$5&+$($/51$9,52,'48$6,63(&,(6
&216257,$1(:9,586(6$1'62&,2(&2120,&32/,7,&$/+,6725<

7KH YLUXVHV VSUHDG JHQHV DFURVV EDFWHULD KXPDQV DQG RWKHU FHOOV $FFRUGLQJ WR /\QQ
0DUJXOLVZHDUHRXUYLUXVHV9LUXVHVPHUJHZLWKWKHFHOOXODUJHQRPHDQGUHHPHUJHIURPWKHP
7KH\FUHDWHVXFFHVVIXOJHQHWLFSDWWHUQVWKDWXQGHUOLHOLYLQJWKLQJV51$YLUXVFDQH[LVWDVTXDVL
VSHFLHVFRQVRUWLDZKLFKFDQFUHDWHQHZ51$YLUXVHVDQGFRGHVE\V\PELRVLV7KHDUFKDHDO51$
TXDVLVSHFLHV FRQVRUWLD XQGHUOLH KXPDQ DQG VSHFLHV LGHQWLW\ 7KH DUFKDHDO GLJR[LQ FDQ HGLW WKH
51$SURGXFLQJQHZFRGHVWRVXLWHQYLURQPHQWDOFRQGLWLRQVIRUWKHEHQHILWRIWKHTXDVLVSHFLHV
FRQVRUWLD
7KHEDFWHULRSKDJHVDUHH[DPSOHVRIWKLVFRQFHSW7KHEDFWHULDWUDGHJHQHVIUDQWLFDOO\E\
WKUHH SURFHVVHV WUDQVIRUPDWLRQ YLD XSWDNH RI '1$ VH[XDO FRQMXJDWLRQ DQG EDFWHULRSKDJH
LQGXFHG WUDQVGXFWLRQ 7KH YLUXVHV DUH PRELOH JHQHWLF HOHPHQWV DQG FDQ FDUU\ JHQHV IURP RQH
SHUVRQWRDQRWKHU7KH51$YLUXVHVDUHGLSRODUDQGLQWKHVHWWLQJRIGLJR[LQLQGXFHGPHPEUDQH
VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ FDQ FUHDWH D SXPSHG SKRQRQ V\VWHP PHGLDWHG TXDQWDO
SHUFHSWLRQ7KHDUFKDHDO51$YLURLGTXDVLVSHFLHVFRQVRUWLDFDQWKXVPHGLDWHTXDQWDOSHUFHSWLRQ
DQGIXQFWLRQDVDV\PELRWLFFRORQ\DQGFRPPXQLFDWHZLWKWKHRXWVLGHZRUOG7RVXLWVXUYLYDOLQ
FKDQJLQJHQYLURQPHQWDOFRQGLWLRQVQHZ51$YLURLGVFDQEHDGGHGWRWKHTXDVLVSHFLHVFRQVRUWLD
E\DUFKDHDO'1$LQGXFHGHGLWLQJ7KHYLUDOF\FOHVFDQEHO\WLFF\FOHVRUO\VRJHQLFF\FOHV9LUDO
LQIHFWLRQVFRQYHUWWKHKXPDQERG\WRDYLUDORUJDQ
0DQ\ ILOR YLUXVHV OLNH 0DUEXUJ YLUXV DQG HEROD YLUXV DUH LQWHJUDO SDUW RI WKH KXPDQ
JHQRPH 7KH KXPDQ JHQRPH DOVR FRQWDLQV UHWURYLUXVHV DQG ERUQD YLUXVHV DV LQWHJUDO SDUWV
6LPLODU LQWHJUDWLRQ QRQUHWURYLUXVHV KDYH EHHQ GHVFULEHG IRU 569 /&09 960 YLUXV 7KH
LQWHJUDWLRQLVGRQHE\+(59UHYHUVHWUDQVFULSWDVHDQGLQWHJUDVH7KHYLUXVHVFDQFURVVWKHLQWHU
VSHFLHV EDUULHU 7KH DOJDO YLUXVHV DFDQWKRF\VWLV WRUWDFHD FKORUHOOD FDQ LQIHFW PDPDOOLDQ FHOOV ,W
KDVEHHQGHWHFWHGLQKXPDQWKURDWVZDEVDQGWKHDOJDOYLUXVFDQUHSOLFDWHLQKXPDQFHOOV+XPDQ
QHXURQDO FHOOV ZKHQ LQIHFWHG E\ WKH DOJDO YLUXV SURGXFHV FKDQJHV LQ PHPRU\ YLVXRVSDWLDO
SURFHVVDQGDWWHQWLRQDIIHFWLQJFRJQLWLYHIXQFWLRQ
9LUXVHV DUH PHFKDQLVPV RI JHQH WUDQVIHU 7KLV LV H[SODLQHG E\ YLUXVHV JLYHQ WR WKH
FDWHUSLOODU E\ WKH ZDVS 7KH EDUFR YLUXV SURWHFWV WKH FDWHUSLOODU DJDLQVW SDUWLFXODU YLUXVHV 7KH
YLUXVHVLQIHFWLQJKXPDQVFRQWDLQVVHTXHQFHVZLWKKXPDQ'1$DQGEDFWHULDO'1$7KHYLUXVHV

WKXVIXQFWLRQDVPHFKDQLVPIRULQWHUKXPDQDQGLQWHUVSHFLHVJHQHWUDQVIHU-XVWDVWKHYLUXVHVFDQ
LQIHFWFHOOVWKHEDFWHULDFDQFRQMXJDWHZLWKKXPDQFHOOV%DFWHULDOFRQMXJDWLRQDQG'1$WUDQVIHU
ZLWKKXPDQFHOOVKDYHEHHQGHVFULEHG3KRWRV\QWKHWLFJHQHVKDYHEHHQVHTXHQFHGLQSKDJHYLUXV
%DFWHULDFDQVWHDOJHQHVDQGGHYHORSUHVLVWDQFH7KHJHQHIRUDOSKDPDFURJOREXOLQLVVHHQLQ
FHUWDLQEDFWHULDDQGSURYLGHVDPHFKDQLVPIRUEDFWHULDOUHVLVWDQFH
7KHKXPDQJXWLVDV\PELRWLFV\VWHPEHWZHHQEDFWHULDYLUXVHVDQGSKDJHV*XWEDFWHULDO
SKDJHV FRGHV IRU JHQHV RI DPLQR DFLG V\QWKHVLV DQG FDUERK\GUDWH PHWDEROLVP (FRV\VWHP RI
KXPDQFHOOVJXWEDFWHULDYLUXVHVDQGSKDJHVLVDFRQWLQXRXVJHQHWUDQVIHUPHFKDQLVPDQGFDQ
LQWHUDFW ZLWK RWKHU HFRV\VWHPV 7KH SDWKRJHQV FDQ FRQWULEXWH JHQHV WR WKH KRVW 7KH DUFKDHDO
51$ YLURLGV FDQ FRQWULEXWH JHQHV WR WKH KRVW E\ FRQYHUVLRQ WR '1$ XVLQJ +(59 UHYHUVH
WUDQVFULSWDVH8QUHODWHG51$DQG'1$YLUXVFDQUHFRPELQH7KHDUFKDHDO51$YLURLGVDQGLWV
FRUUHVSRQGLQJ'1$FDQUHFRPELQHZLWKXQUHODWHG51$DQG'1$YLUXVHV7KHEDFWHULRSKDJHV
FDQ VKXWWOH JHQHV EHWZHHQ GLIIHUHQW HFRV\VWHPV 7KH DUFKDHDO 51$ YLURLGV VHUYHG WKH VDPH
SXUSRVH 7KHUH LV WUDQVNLQJGRP FURVVWDON RI VPDOO 51$ PROHFXOHV 7UDQVNLQJGRP V51$
VLOHQFLQJ RI WKH KXPDQ 51$ E\ DUFKDHDO 51$ YLURLGV FDQ PRGXODWH WKH KXPDQ V\VWHP 7KH
FURVVNLQJGRP51$VLOHQFLQJLVLPSRUWDQWLQFURVVNLQJGRPFRPPXQLFDWLRQLQHFRV\VWHP
7KH YLUDO SDQGHPLFV KDYH WKXV FRQWULEXWHG WR KXPDQ HYROXWLRQ 9LUXV DQG EDFWHULDO
LQIHFWLRQ KRPRJHQL]HG KXPDQ SRSXODWLRQ E\ JHQH WUDQVIHU 7KH DUFKDHDO DQG LWV 51$ YLURLGV
IRUP WKH O\QFKSLQ RI WKH PHFKDQLVP RI JHQH WUDQVIHU 7KLV OHDGV RQWR JOREDOLVDWLRQ RI VSHHFK
WKRXJKW DQG FXOWXUH E\ YLUDO HSLGHPLFV DQG UHODWHG JHQH WUDQVIHU 7KXV YLUDO HSLGHPLFV KHOS LQ
JOREDOL]DWLRQ RI KXPDQ FXOWXUH +XPDQ YLUDO HSLGHPLFV DUH QHFHVVDU\ SUHUHTXLVLWH IRU WKH
HYROXWLRQRIKXPDQFXOWXUH7KHYLUDOHSLGHPLFVKRPRJHQL]HKXPDQSRSXODWLRQIRUPLQJJURXSV
RI FDVWH UHOLJLRQ QDWLRQDOLWLHV DQG FXOWXUH 7KH DUFKDHDO 51$ YLURLGDO TXDVLVSHFLHV FRQVRUWLD
XQGHUOLH WKLV PHFKDQLVP RI HYROXWLRQ 7KXV YLUDO GLVHDVHV FRQWULEXWH WR FXOWXUH EHKDYLRU GLHW
HDWLQJKDELWVDQGVH[XDOLW\7KXVYLUXVPHGLDWHGJHQHWUDQVIHULVLPSRUWDQWKXPDQVRFLRORJLFDO
PHFKDQLVP 7KH DUFKDHDO 51$ YLURLGDO TXDVLVSHFLHV FRQVRUWLD DQG LWV UHFRPELQDWLRQ ZLWK
XQUHODWHG51$DQG'1$YLUXVHVDQGLWVLQWHJUDWLRQLQWRWKHKXPDQJHQRPHE\+(59UHYHUVH
WUDQVFULSWDVH IRUPV WKH EDVLV RI WKLV SKHQRPHQD 5HWURYLUDO LQIHFWLRQV KDYH FRQWULEXWHG WR WKH
JHQHVLVRIVFKL]RSKUHQLDFRUWLFDOIXQFWLRQDQGHYROXWLRQRIFRQVFLRXVQHVV%RUQDYLUXVLQIHFWLRQV
DOVR FRQWULEXWH WR VFKL]RSKUHQLD 9LUDO SDQGHPLFV WKXV FRQWULEXWH WR SRSXODWLRQ LGHQWLW\ DQG
GLIIHUHQFHV7KLVFDQDOVROHDGRQWRJHQHUDWLRQRIQHZYLUXVHV

'LHW FDQ PRGXODWH DUFKDHDO 51$ YLURLGDO IXQFWLRQ 7KH KLJK ILEUH GLHW ZLOO VXSSUHVV
DUFKDHDO JURZWK DQG 51$ YLURLGDO JURZWK $ ORZ ILEUH GLHW ZLOO LQFUHDVH DUFKDHDO JURZWK DQG
51$YLURLGDOJURZWK7KXVWKH51$YLURLGDOTXDVLVSHFLHVFRQVRUWLDFDQEHPRGXODWHGE\GLHW
9LUXVHVDUHEHQHILFLDODJHQWVDQGRQO\SHUFHQWDJHRIWKHYLUXVHVDUHSDWKRJHQLF0RVWRIWKH
YLUXVHV FRH[LVW DV FRPPHQVDOV 7KH EDFWHULD DQG IXQJDO NLQJGRPV FRQWDLQ EDFWHULRSKDJHV DQG
IXQJDO SKDJHV 7KH\ FDQ UHFRPELQH ZLWK DUFKDHDO 51$ YLURLGV DQG WKHLU FRUUHVSRQGLQJ '1$
SURGXFLQJQHZ51$DQG'1$YLUXVHVZKLFKFDQJHWLQWHJUDWHGLQWRWKHJHQRPHDVZHOODVJHW
VHFUHWHGLQWRWKHHQYLURQPHQW7KLVIRUPVDFRPPRQJHQHSRRO
7KH DUFKDHD DUH H[WUHPRSKLOHV DQG FDQ H[LVW LQ WKH LQWHUJDODFWLF VSDFH DQG PHWHURLGDO
LPSDFWVFDQWUDQVIHUWKHDUFKDHDLQWKHLQWHUJDODFWLFVSDFHWRHDUWK7KHDUFKDHDO51$YLURLGVWKXV
VXSSO\ D FRQWLQXRXV VRXUFH RI QHZ JHQHWLF FRGHV WR HDUWK 7KH EDFWHULDO LQIHFWLRQV HVSHFLDOO\
WKRVHGXHWRVWUHSWRFRFFXVDQGLWVSKDJHVFDQSURGXFHHSLGHPLF2&'HFKRODOLDDQGHFRSUD[LD
FRQWULEXWLQJWRDGLVFLSOLQHGVRFLHW\DQGWKHHYROXWLRQRIWKHKHUHGLWDU\V\VWHPRINLQJVKLS7KLV
FDQ EH GXH WR WKH VWUHSWRFRFFXV LQGXFHG HSLGHPLF 2&' IURQWDO OREH V\QGURPH 7KH
EDFWHULRSKDJHVIURPWKHVWUHSWRFRFFXVFRXOGKDYHUHFRPELQHGZLWKWKHDUFKDHDO51$YLURLGVDQG
JRWLQWHJUDWHGLQWRWKHKXPDQJHQRPH7KHIXQJDOLQIHFWLRQVFRXOGKDYHFRQWULEXWHGWRWKHQH[W
SKDVH RI HYROXWLRQ ,QIHFWLRQV ZLWK FODYLFHSV SXUSXUD FDQ WUDQVIHU /6' JHQHV DQG GRSDPLQH
JHQHVWRKXPDQVSURGXFLQJWKHGRSDPLQHUJLFHSRFKLQVRFLHW\7KHIXQJDOSKDJHVZRXOGKDYH
UHFRPELQHGZLWKDUFKDHDO51$YLURLGVDQGJRWLQWHJUDWHGLQWRWKHKXPDQJHQRPH7KLVFRXOG
KDYHFRQWULEXWHGWRLGHDVRIHTXDOLW\IUDWHUQLW\OLEHUW\DQGVRFLDOLVPZKLFKDUHDOOSURGXFWVRIWKH
)UHQFKUHYROXWLRQ'XULQJWKLVSHULRGRIWLPHWKHUHZDVDQHSLGHPLFRIIXQJDOLQIHFWLRQLQ5\HLQ
(XURSH 7KH QH[W SKDVH RI JOREDO HSLGHPLFV RFFXUUHG ZLWK +1 LQIHFWLRQ RU WKH 6SDQLVK IOX
HSLGHPLF 7KLV UHVXOWHG LQ D ORFNHGLQ VWDWH DQG D IUR]HQ VRFLHW\ OHDGLQJ RQWR WKH ULVH RI
GLFWDWRUVKLS IDVFLVP WKH 1D]LV DQG WKH &RPPXQLVWV 7KH QH[W VWDJH LQ ZKLFK ZH OLYH FDQ EH
FDOOHGWKHDJHRIDQDUFK\ZLWKLWVJOREDOL]DWLRQWHUURULVPURJXHFDSLWDOLVPVH[XDODQDUFK\DQG
UHOLJLRXV IXQGDPHQWDOLVP 7KLV FRUUHVSRQGV ZLWK WKH UHFXUUHQW HSLGHPLFV RI 51$ YLUDO
LQIHFWLRQV +1 UHWURYLUDO 6$56 HEROD GHQJXH DQG KHPRUUKDJLF IHYHU 7KH JHQRPLF
LQWHJUDWLRQRIWKHVH51$YLUXVHVIXQJDOSKDJHVEDFWHULDOSKDJHVZRXOGKDYHFKDQJHGWKHKXPDQ
JHQRPHDWWKLVGLIIHUHQWSRLQWLQKLVWRU\7KXVYLUXVLQGXFHGJHQHWUDQVIHUFDQPRGXODWHWKHEUDLQ
FXOWXUHVRFLRORJ\DQGEHKDYLRU
5HIHUHQFHV
.XUXS 5. DQG .XUXS 3$ *OREDO :DUPLQJ $UFKDHD DQG 9LURLG ,QGXFHG 6\PELRWLF
+XPDQ (YROXWLRQ 5HWURYLUXV 3ULRQV DQG 9LURLGV ± 3RUSK\ULQRLGV DQG 9LURLGHOOH 1HZ
<RUN2SHQ6FLHQFH3XEOLVKHUV

&+$37(5
&/,0$7(&+$1*($5&+$($/(1'26<0%,26,6$1'(0(5*,1*9,586(6
7+(3267&2521$9,586:25/'$1'62&,(7<

7KHYLUDOHSLGHPLFVHVSHFLDOO\WKHFRURQDYLUXVHSLGHPLFVRZLQJWRLWVKLJKLQIHFWLYLW\
UDWH FDQ DIIHFW KXPDQ EHKDYLRXU DQG VRFLHW\ 7KH YLUDO LQIHFWLRQ OHDGV WR VHOILVRODWLRQ DQG
VSOLWWLQJXSRIVRFLHW\LQWRZDWHUWLJKWFRPSDUWPHQWVZLWKOLWWOHFRPPXQLFDWLRQEHWZHHQVPDOO
JURXSV7KLVOHDGVRQWRWKHVRFLHW\ZLWKDXWLVWLFEHKDYLRXUDOSKHQRW\SHV,WOHDGVWRDFXOWXUH
RI VROLWXGH DQG KHUPLWV 7KH YLUDO HSLGHPLFV HVSHFLDOO\ FRUQRQD YLUDO HSLGHPLFV KDYH D
SUHGLOHFWLRQ IRU WKH PDOH SRSXODWLRQ OHDGLQJ WR ZLGHVSUHDG H[WHUPLQDWLRQ RI WKH PDOH
SRSXODWLRQ DQG D IHPDOH GRPLQDQW PDWULOLQHDO 1HDQGHUWKDO VRFLHW\ ZLWK SUHGRPLQDQWO\
DVH[XDOEHKDYLRXU7KHZRUOGEHFRPHVDQDXWLVWLFDVH[XDOWULEHRIVROLWXGLQDOKHUPLWV,WOHDGV
WRDGHYHORSPHQWRIDXWKRULWDULDQJRYHUQPHQWDOVWUXFWXUHVDQGDVRFLHW\GRPLQDWHGE\JUHHG
ORQHOLQHVV DQG VHOILVKQHVV 7KH KXPDQ VRFLHW\ EHFRPHV LQFUHDVLQJO\ GHSHQGHG RQ URERWLFV
DQGLQWHUQHWDQGWXUQVLQWRPDQPDFKLQHK\EULGV
FRQVRUWLD

QHXURQDOFHOOVZKHQLQIHFWHGE\WKHDOJDOYLUXVSURGXFHFKDQJHVLQPHPRU\YLVXRVSDWLDOSURFHVV
DQGDWWHQWLRQDIIHFWLQJFRJQLWLYHIXQFWLRQ
7KH YLUDO HSLGHPLFV KDYH WKXV FRQWULEXWHG WR KXPDQ HYROXWLRQ 9LUXV DQG EDFWHULDO

DOVR FRQWULEXWH WR VFKL]RSKUHQLD 9LUDO HSLGHPLFV WKXV FRQWULEXWH WR SRSXODWLRQ LGHQWLW\ DQG

5HIHUHQFHV

&+$37(5
7+(',(7$5<),%5(63(&,(6(92/87,21$1'1(852,00812
*(120,&(1'2&5,1(,17(*5$7,21±',(7$5<),%5($1'$5&+$($/
6<0%,26,6

'LHWDU\ILEUHFDQDIIHFWERG\DQGFHOOIXQFWLRQ7KHRULJLQDOHYLGHQFHOLQNLQJGLHWDU\
ILEUHDQGERG\PHWDEROLVPLQUHODWLRQWRV\VWHPLFGLVRUGHUVFDPHIURPWKHZRUNRI.XUXSHW
DOZKHUHLWZDVVKRZQWKDWWKHGLHWDU\ILEUHUHJXODWHVFKROHVWHUROPHWDEROLVPLQWKHERG\DQG
FRQWULEXWHV WR WKH JHQHVLV RI PHWDEROLF V\QGURPH ; 'LHWDU\ ILEUH GHILFLHQF\ SURGXFHV
SUHGRPLQDQW VPDOO LQWHVWLQDO GLJHVWLRQ DQG GLHWDU\ ILEUH H[FHVV OHDGV WR FRORQLF GLJHVWLRQ
6PDOO LQWHVWLQDO GLJHVWLRQ LQ WKH SUHVHQFH RI GLHWDU\ ILEUH GHILFLHQF\ OHDGV WR DOWHUDWLRQ LQ
FRORQLF IORUD DQG DUFKDHDO RYHUJURZWK $ KLJK ILEUH GLHW SURGXFHV SUHGRPLQDQWO\ FRORQLF
GLJHVWLRQDQGOHDGVWRVXSSUHVVLRQRIDUFKDHDOJURZWK7KHFRORQLFDUFKDHDVHHSVWKURXJKWKH
JXW EORRG EDUULHU SURGXFLQJ DUFKDHDO HQGRV\PELRVLV 7KXV VPDOO LQWHVWLQDO GLJHVWLRQ GXH WR
GLHWDU\ ILEUH GHILFLHQF\ YHUVXV FRORQLF GLJHVWLRQ GXH WR GLHWDU\ ILEUH H[FHVV GHWHUPLQHV WKH
GHQVLW\ RI DUFKDHD LQ WKH FRORQ DV ZHOO DV WKH HQGRV\PELRWLF FRPSDUWPHQW 'LHWDU\ ILEUH
GHILFLHQF\ FDQ OHDG WR LQFUHDVHG HQGRV\PELRWLF DQG FRORQLF DUFKDHDO RYHUJURZWK 'LHWDU\
ILEUHLVWKHVLQJOHPRVWLPSRUWDQWFRPSRQHQWRIWKHKXPDQGLHWPRUHLPSRUWDQWWKDQGLHWDU\
SURWHLQ IDWV FDUERK\GUDWHV YLWDPLQV DQG PLQHUDOV 'LHWDU\ ILEUH LV WKH VXEVWUDWH WKDW
GHWHUPLQHVV\PELRVLVDQGV\PELRWLFHYROXWLRQ
7KHHQGRV\PELRWLFDUFKDHDUHJXODWHVKXPDQIXQFWLRQVDQGVSHFLHVW\SHDQGGHSHQGV
XSRQ WKH FRORQLF DUFKDHD ZKRVH GHQVLW\ LV GHWHUPLQHG E\ WKH ILEUH LQWDNH 7KH FRORQLF
DUFKDHDO SRSXODWLRQ GHQVLW\ GHSHQGV XSRQ GLHWDU\ ILEUH LQWDNH 3RSXODWLRQV ZLWK ORZ ILEUH
LQWDNH KDYH OHVVHU GHQVLW\ RI FRORQLF DUFKDHDO PLFURIORUD DQG HQGRV\PELRWLF DUFKDHD
(QGRV\PELRWLF DUFKDHD FRQWULEXWHV WR QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV 3RSXODWLRQV
FRQVXPLQJ D KLJK VDWXUDWHG IDW DQG SURWHLQ GLHW ZLWK ORZ ILEUH LQWDNH WHQG WR JHW LQFUHDVHG
HQGRV\PELRWLFDUFKDHDOJURZWKDQGDUHQHDQGHUWKDOLVHG3RSXODWLRQVZLWKKLJKILEUHLQWDNHXS
WR JGD\ WHQG WR KDYH UHGXFHG DUFKDHDO GHQVLW\ LQ WKH FRORQ DQG UHGXFHG DUFKDHDO
HQGRV\PELRVLV FRQWULEXWLQJ WR KRPR VDSLHQLVDWLRQ RI WKH SRSXODWLRQ 7KXV ILEUH LQWDNH
UHJXODWHVWKHHQGRV\PELRWLFDUFKDHDOGHQVLW\DQGW\SHRIKXPDQVSHFLHV
'LHWDU\ILEUH FDQ DIIHFWEUDLQ IXQFWLRQ 7KHFRORQLF GLJHVWLRQ RI GLHWDU\ ILEUHE\ WKH
PLFURIORUD JHQHUDWHV VKRUW FKDLQ IDWW\ DFLGV 7KH VKRUW FKDLQ IDWW\ DFLG SURSLRQDWH FDQ

SURGXFHDQDXWLVWLFEUDLQSDWKRORJ\7KHVKRUWFKDLQIDWW\DFLGVFDQELQGWR*3&5LQFUHDVLQJ
V\PSDWKHWLFDFWLYLW\7KH6&)$DFHWDWHSURSLRQDWHDQGEXW\UDWHFDQEHPHWDEROL]HGE\WKH
PLWRFKRQGULD JHQHUDWLQJ $73 7KH 6&)$ EXW\UDWH LV D +'$& LQKLELWRU DQG PRGXODWHV
JHQRPLFWUDQVPLVVLRQ
%XW\UDWH FDQ PRGXODWH FRJQLWLRQ DQG LQFUHDVH FRJQLWLYH IXQFWLRQ 7KH DFHWDWH LV
FKDQQHOOHGWRWKHJOXWDPDWHJOXWDPLQHF\FOHDQGPRGXODWHVQHXURWUDQVPLWWHULQWKHV\QDSVH
%XW\UDWH FDQ SURGXFH KLVWRQH K\SHUDFHW\ODWLRQ DQG LQFUHDVH %'1) DFWLYLW\ 7KH 6&)$ FDQ
ELQGWR*SURWHLQFRXSOHG))$UHFHSWRUSURGXFLQJLPPXQRVXSSUHVVLRQ7KHVKRUWFKDLQIDWW\
DFLGVDUHDQWLLQIODPPDWRU\%HFDXVHWKH6&)$DUHDQWLLQIODPPDWRU\LWFDQPRGXODWHLQVXOLQ
UHVLVWDQFH'LHWDU\ILEUHGHILFLHQF\FDQOHDGWRPHWDEROLFV\QGURPHDQGDXWRLPPXQHGLVHDVH
%XW\UDWHE\SURGXFLQJ+'$&LQKLELWLRQLVDQWLRQFRJHQLFDQGLQKLELWVRQFRJHQHVLV%XW\UDWH
FDQ SURGXFH +'$& LQKLELWLRQ DQG DOWHU SURWHLQ FRQIRUPDWLRQ DQG IROGLQJ SURGXFLQJ
PRGXODWLRQDQGDPHOLRUDWLRQRIJHQHWLFGLVRUGHUV%XW\UDWHFDQLQFUHDVH%'1)DFWLYLW\LQWKH
EUDLQ DQG SURGXFHV QHXURSURWHFWLRQ 7KXV D KLJK ILEUH GLHW SURWHFWV DJDLQVW FLYLOLVDWLRQDO
GLVHDVHV %XW\UDWH SURPRWHV VWHP FHOO WUDQVIRUPDWLRQ DQG FRQYHUWV ILEUREODVW WR SOXULSRWHQW
HPEU\RQLF VWHP FHOOV 7KXV WKH ILEUH GHULYHG EXW\UDWH LV D UHJHQHUDWLYH PROHFXOH 7KXV
GLHWDU\ ILEUH GHILFLHQF\ FDQ OHDG WR FDQFHU PHWDEROLF V\QGURPH VWURNH FRURQDU\ DUWHU\
GLVHDVH QHXURGHJHQHUDWLRQ JHQHWLF GLVRUGHUV DXWRLPPXQH GLVHDVHV DQG SURWHLQ IROGLQJ
GLVHDVHV 'LHWDU\ ILEUH LV UHJXODWRU\ VXEVWDQFH IRU WKH QHXURQDO LPPXQH JHQRPLF DQG
HQGRFULQHV\VWHP
'LHWDU\ILEUHFDQDOWHUWKHFRORQLFPLFURIORUD$KLJKILEUHLQWDNHVXSSUHVVHVFRORQLF
DUFKDHDO JURZWK DQG DUFKDHDO HQGRV\PELRVLV $ KLJK ILEUH GLHW VXSSUHVVHV HQGRV\PELRWLF
DUFKDHDO JURZWK OHDGLQJ RQWR KRPR VDSLHQLVDWLRQ RI WKH VSHFLHV $ KLJK ILEUH GLHW OHDGV WR
LQFUHDVHGJHQHUDWLRQRIEXW\UDWHDQG+'$&LQKLELWLRQOHDGLQJRQWRH[SUHVVLRQRIWKH+(59
JHQHVDQGWKHLUUHLQWHJUDWLRQLQWRWKHJHQRPH7KH+(59MXPSLQJJHQHVFRQWULEXWHVWRWKH
G\QDPLFLW\RIWKHJHQRPHDQGLVLPSRUWDQWLQWKHHYROXWLRQRIV\QDSWLFFRQQHFWLYLW\DQGWKH
KRPR VDSLHQ QHRFRUWH[ $ ORZ ILEUH GLHW LQFUHDVHV FRORQLF DUFKDHDO JURZWK DQG DUFKDHDO
HQGRV\PELRVLV FRQWULEXWLQJ WR QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV DQG WKH EUDLQ $ ORZ ILEUH
GLHW DQG UHGXFHG OHYHOV RI EXW\UDWH FRQWULEXWHV WR PRGXODWLRQ RI KLVWRQH DFHW\ODWLRQ DQG
UHGXFHG JHQHUDWLRQ RI +(59 VHTXHQFHV 7KLV FRQWULEXWHV WR ULJLGLW\ RI WKH JHQRPH DQG
UHGXFHG V\QDSWLF FRQQHFWLYLW\ 7KLV OHDGV WR FHUHEUDO FRUWLFDO VXSSUHVVLRQ DQG FHUHEHOODU

GRPLQDQFH FRQWULEXWLQJ WR QHDQGHUWKDOLVDWLRQ RI WKH EUDLQ DQG VSHFLHV 7KXV ILEUH LQWDNH LQ
WKHGLHWDOWHUVV\PELRWLFPLFURIORUDHVSHFLDOO\DUFKDHDOHQGRV\PELRVLVDQGKXPDQHYROXWLRQ
7DEOH'LHWDU\ILEUHLQWDNH
)LEUHFRQWHQWRI
*URXSV
GLHW
+RPR6DSLHQV +LJKILEUH
+RPR1HDQGHUWKDOLV /RZILEUH
/RZILEUHJGD\KLJKILEUH!JGD\
5HIHUHQFHV
0HQRQ93DQG.XUXS3$'LHWDU\ILEHUDQGFKROHVWHUROPHWDEROLVP±(IIHFW
RI ILEHU ULFK SRO\VDFFKDULGH IURP EODFNJUDP 3KDVHROXV PXQJR RQ FKROHVWHURO
PHWDEROLVPLQUDWVIHGQRUPDODQGDWKHURJHQLFGLHW%LRPHGLFLQH
0HQRQ 39 DQG .XUXS 3$ +\SROLSLGDHPLF DFWLRQ RI WKH SRO\VDFFKDULGH IURP
3KDVHROXVPXQJREODFNJUDPHIIHFWRQOLSLGPHWDEROLVP,QGLDQ-%LRFKHP%LRSK\V
3KDVHROXV PXQJR EODFN JUDP (IIHFW RQ JO\FRVDPLQRJO\FDQV OLSLGV DQG OLSRSURWHLQ OLSDVH
DFWLYLW\LQQRUPDOUDWV$WKHURVFOHURVLV
0ROO\7KRPDV/HHODPPD6DQG.XUXS3$1HXWUDOGHWHUJHQWILEUHIURPYDULRXVIRRGV
DQGLWVK\SRFKROHVWHUROLFDFWLRQLQUDWV-)RRG6FL7HFKQRO
0ROO\ 7KRPDV /HHODPPD 6 DQG .XUXS 3$ (IIHFW RI EODFN JUDP ILEHU 3KDVHROXV
PXQJR RQ KHSDWLF K\GUR[\PHWK\O JOXWDU\O&R$ UHGXFWDVH DFWLYLW\ FKROHVWHURJHQHVLV DQG
FKROHVWHUROGHJUDGDWLRQLQUDWV-1XWULWLRQ
0ROO\ 7KRPDV /HHODPPD 6 DQG .XUXS 3$ (IIHFW RI EODFN JUDP ILEUH 3KDVHROXV
PXQJRRQWKHPHWDEROLVPRIOLSRSURWHLQVLQUDWV-)RRG6FL7HFKQRO
9LMD\DJRSDO3'HYL.6DQG.XUXS3$)LEUHFRQWHQWRIGLIIHUHQWGLHWDU\VWDUFKHVDQG
WKHLUHIIHFWRQOLSLGOHYHOVLQKLJKIDWKLJKFKROHVWHUROGLHWIHGUDWV$WKHURVFOHURVLV

&+$37(5
(1'26<0%,27,&3$7+2*(1,&$5&+$($$1'$5&+$($/'(5,9('51$
9,52,'6,1'8&('(92/87,21$5<63(&,(6&+$1*(,1+80$16
,17(5&219(56,212)+2026$3,(16$1'+2021($1'(57+$/,6±
0(7+2')25$5&+$($/6<0%,26,602'8/$7('+80$1(92/87,21
)257+(5$3(87,&385326(±$5&+$($/6<0%,26,6$1'5(6,67$1&(
72(0(5*,1*9,5$/,1)(&7,21/,.(&29,'
,QWURGXFWLRQ
UHJXODWHVWKHHQGRV\PELRWLFDUFKDHDOGHQVLW\DQGW\SHRIKXPDQVSHFLHV$UFKDHDOV\PELRVLV
OHDGVWRQHDQGHUWKDOLVDWLRQRIWKHVSHFLHV1HDQGHUWKDOLVDWLRQRIVSHFLHVFDQOHDGWRRULJLQDV
ZHOODVUHVLVWDQFHWRHPHUJLQJYLUDOLQIHFWLRQOLNH&RYLG
$UFKDHDOV\PELRVLVOHDGVWRQHDQGHUWKDOLVDWLRQRIWKHKRPRVDSLHQVSHFLHV7KLVFDQ
EH GHVFULEHG DV V\PELRVLV PHGLDWHG HYROXWLRQ 7KH KRPR QHRQHDQGHUWKDOLV KDV DQ LQFUHDVH
SUHGLOHFWLRQ WR PHWDEROLF V\QGURPH ; VWURNHV &$' K\SHUOLSLGHPLD GLDEHWHV PHOOLWXV
DXWRLPPXQH QHXURSV\FKLDWULF QHXURGHJHQHUDWLYH FDQFHU DQG DUH UHWURYLUDO UHVLVWDQW 7KH
KRPR QHDQGHUWKDOLV KDV GLIIHUHQW SHUVRQDOLW\ DQG VRFLDO FKDUDFWHULVWLFV ZLWK LQFUHDVHG
FUHDWLYH JHQGHU HTXDO PDWULDUFKDO DVH[XDO DQG DOWHUQDWH VH[XDO VSLULWXDO LQWXLWLYH
VXUUHDOLVWLFDQGFRPPXQLW\FHQWUHGFKDUDFWHULVWLFV7KHKRPRVDSLHQVSHFLHVDUHUHVLVWDQWWR
PHWDEROLF V\QGURPH ; VWURNHV &$' K\SHUOLSLGHPLD GLDEHWHV PHOOLWXV DXWRLPPXQH
QHXURSV\FKLDWULFQHXURGHJHQHUDWLYHFDQFHUDQGDUHUHWURYLUDOVXVFHSWLEOH7KHKRPRVDSLHQ
VSHFLHVLVOHVVFUHDWLYHSDWULDUFKDOJHQGHUXQHTXDOKHWHURVH[XDOORJLFDODQGLQGLYLGXDOLVWLF
1HDQGHUWKDOPHWDERORQRPLFVLVSULPDULO\PHGLDWHGE\DUFKDHDOPHWDERORQRPLFVDQGDUFKDHDO
V\PELRVLV 7KH\ KDYH JRW FKROHVWHURO FDWDEROLVP WKH VKLNLPLF DFLG SDWKZD\ PRUH RI

DQDHURELFJO\FRO\VLVLQFUHDVHFRQQHFWLYHWLVVXHV\QWKHVLVIUXFWRO\VLVQXFOHLFDFLGV\QWKHVLV
DQG PLWRFKRQGULDO G\VIXQFWLRQ +RPR VDSLHQ PHWDERORQRPLFV LV SULPDULO\ DHURELF DQG
PLWRFKRQGULDO 7KH VSHFLHV FKDQJH LV D JXW PLFURIORUD DQG HQGRV\PELRWLF IORUD PHGLDWHG
FKDQJH ZKLFK FDQ EH WHUPHG DV LQGXFHG HYROXWLRQ ,QGXFWLRQ RI VSHFLHV FKDQJH EHWZHHQ
KRPRVDSLHQVDQGKRPRQHDQGHUWKDOLVZDVLQGXFHGE\IHHGLQJDQDWXUDORUJDQLFSURELRWLF
IURP KXPDQ FRORQLF IORUD KRPR VDSLHQV IORUD YHUVXV QHDQGHUWKDOLV IORUD GHSHQGLQJ XSRQ
SKHQRW\SLFFKDUDFWHULVWLFV7KHKRPRVDSLHQIORUDFDQLQGXFHFRQYHUVLRQRIQHDQGHUWKDOLVWR
VDSLHQVSHFLHVDQGWKHQHDQGHUWKDOLVIORUDFDQLQGXFHFRQYHUVLRQRIVDSLHQVWRQHDQGHUWKDOLV
VSHFLHV D QHZ SDOHR KLJK ILEUH KLJK PHGLXP FKDLQ WULJO\FHULGH KLJK OHJXPH SURWHLQ
NHWRJHQLF GLHW YHUVXV D KLJK IDW KLJK SURWHLQ GLHW 7KH KLJK ILEUH KLJK 0&7 KLJK OHJXPH
SURWHLQ NHWRJHQLF GLHW FRQYHUWV WKH QHDQGHUWKDOLV WR VDSLHQ VSHFLHV DQG D ORZ ILEUH KLJK
SURWHLQKLJKIDWGLHWFRQYHUWVWKHVDSLHQVSHFLHVWRQHDQGHUWKDOLVVSHFLHVDQDWXUDORUJDQLF
SURELRWLFIURPGXQJRIWKH,QGLDQFRZ%RVSULPLJHQLXVZKLFKFRQYHUWVWKHQHDQGHUWKDOLVWR
KRPRVDSLHQSKHQRW\SHDQGDQDWXUDODQWLR[LGDQWDQWLELRWLFVGHULYHGIURPFUXGHH[WUDFWV
&XUFXPD ORQJD 0RULQJD SWHU\JRVSHUPD (PEOLFD RIILFLQDOLV =LQJLEHU RIILFLQDOH $OOLXP
VDWLYXP DQG :LWKDQLD VRPQLIHUD IRU PRGXODWLRQ RI HQGRV\PELRWLF DUFKDHDO JURZWK DQG
HQGRJHQRXVGLJR[LQV\QWKHVLVUHVXOWLQJLQSKHQRW\SLFPHWDERORQRPLFDQGJHQRW\SLFFKDQJH
LQKXPDQVSHFLHVIURPKRPRVDSLHQVWRKRPRQHDQGHUWKDOLV7KHFRORQLFDQGHQGRV\PELRWLF
DUFKDHD DQG RWKHU PLFUREHV OLNH FORVWULGLDO FOXVWHUV GHWHUPLQH WKH VSHFLHV UDFH FDVWH
FRPPXQLW\DQGSHUVRQDOLGHQWLW\RIWKHLQGLYLGXDO7KHLGHQWLW\RIWKHLQGLYLGXDOSHUVRQDO
FRPPXQLW\ FDVWH UDFH QDWLRQDOLW\ DQG VSHFLHV LV GHWHUPLQHG E\ WKH FRORQLF DQG
HQGRV\PELRWLF DUFKDHDO DQG FORVWULGLDO FOXVWHUV 3UHGRPLQDQW DUFKDHDO V\PELRVLV SURGXFHV
KRPRQHDQGHUWKDOLVDQGOHVVSURPLQHQWDUFKDHDOV\PELRVLVDQGGRPLQDQWFORVWULGLDOFOXVWHUV
LQWKHJXWSURGXFHVWKHKRPRVDSLHQVSHFLHV(DFKLQGLYLGXDOUDFHQDWLRQDOLW\FDVWHFUHHG
DQG FRPPXQLW\ KDV WKH HQGRV\PELRWLF DQG FRORQLF PLFURELRWD VLJQDWXUH 7KLV FRORQLF DQG
HQGRV\PELRWLF PLFURELRWD VLJQDWXUH LV WUDQVIHUDEOH E\ WKH FKDQJH RI HQGRV\PELRWLF DQG
FRORQLF PLFURELRWD IURP RQH JURXS WR DQRWKHU 7KXV WKH HYROXWLRQ DQG LGHQWLW\ EDVHG RQ
LQGLYLGXDOLW\UDFHQDWLRQDOLW\FDVWHDQGFUHHGFDQEHLQGXFHG
7KH UHVHDUFK ZRUN FDUULHG RXW E\ XV RYHU D SHULRG RI \HDUV VKRZHG WKDW SDWLHQWV RI
WKHVHGLVRUGHUVPHQWLRQHGVKRZ
'HFUHDVH LQ WKH DFWLYLW\ RI D FHOO PHPEUDQH EDVHG HQ]\PH NQRZQ DV VRGLXP SRWDVVLXP
$73DVH $Q LQKLELWLRQ RI VRGLXP SRWDVVLXP $73DVH SURGXFHV LQFUHDVH LQ LQWUDFHOOXODU
FDOFLXPDQGGHFUHDVHLQLQWUDFHOOXODUPDJQHVLXP

0HPEUDQHVRGLXPSRWDVVLXP$73DVHLQKLELWLRQLVSURGXFHGE\HQGRJHQRXVGLJR[LQZKLFKLV
V\QWKHVL]HG IURP FKROHVWHURO E\ DFWLQLGLF DUFKDHD ZKLFK DFWV DV HQGRV\PELRQWV LQ FHOO 7KH
DUFKDHDV\QWKHVL]HVGLJR[LQIURPFKROHVWHURO
$FWLQLGLF DUFKDHDO JURZWK KDV EHHQ GHWHFWHG LQ PHWDEROLF V\QGURPH ; FRURQDU\ DUWHU\
GLVHDVHV VWURNHV GLDEHWHV PHOOLWXV K\SHUOLSLGHPLD DXWRLPPXQH QHXURSV\FKLDWULF
QHXURGHJHQHUDWLYHFDQFHUDQGLQIHFWLRQV
7KH SDOHR SURELRWLF IURP KXPDQ FRORQLF IORUD DUH DQWLDUFKDHDO DJHQWV 7KH SDOHR SURELRWLF
EORFN WKH DUFKDHDO PHYRODQDWH SDWKZD\ 7KLV GHFUHDVHV GLJR[LQ V\QWKHVLV IURP FKROHVWHURO
DQGWUHDWVWKHVHFKURQLFGLVRUGHUV
'HWHFWLRQRIHQGRJHQRXVDFWLQLGLFDUFKDHD
(QGRJHQRXVDFWLQLGLFDUFKDHDKDYHEHHQGHWHFWHGLQPHWDEROLFV\QGURPH;GLDEHWHV
PHOOLWXV&$'VWURNHDXWLVPDXWRLPPXQHQHXURSV\FKLDWULFQHXURGHJHQHUDWLYHFDQFHUDQG
LQIHFWLRQV 7KH DUFKDHD DUH GHWHFWHG E\ VSHFWURSKRWRPHWU\ IRU F\WRFKURPH ) WKH
PHWKDQRJHQLF F\WRFKURPH LQ WKH EORRG 7KH HQGRJHQRXV DFWLQLGLF DUFKDHD V\QWKHVL]HV
FKROHVWHURO E\ WKH PHYDORQDWH SDWKZD\ 7KH FKROHVWHURO LV FDWDEROL]HG WR GLJR[LQ 'LJR[LQ
LQKLELWV PHPEUDQH VRGLXPSRWDVVLXP$73DVH DQG LQFUHDVHV LQWUDFHOOXODU FDOFLXP DQG
GHSOHWHVPDJQHVLXPVWRUHVLQWKHFHOO7KLVOHDGVWRPHWDEROLFV\QGURPH;GLDEHWHVPHOOLWXV
&$' VWURNH DXWLVP DXWRLPPXQH QHXURSV\FKLDWULF QHXURGHJHQHUDWLYH FDQFHU DQG
LQIHFWLRQV 7KH V\QWKHVLV RI GLJR[LQ FDQ EH GHPRQVWUDWHG LQ SDWLHQWV E\ DGGLQJ FKROHVWHURO
VXEVWUDWHDQGFHULXPWRSDWLHQW¶VVHUXPDQGFKHFNLQJIRUWKHULVHLQF\WRFKURPH)DFWLYLW\
DQG GLJR[LQ OHYHOV 'LJR[LQ OHYHOV DUH DVVD\HG E\ (OLVD DQG F\WRFKURPH ) E\
VSHFWURSKRWRPHWU\ 7KH WHVW LV DYDLODEOH LQ WKH 0HWDEROLF 'LVRUGHUV &HQWUH 7KH SDWLHQW LQ
ZKRPHQGRJHQRXVDUFKDHDDQGGLJR[LQV\QWKHVLVLVGHPRQVWUDWHGLVJLYHQQXWULWLRQDOGLHWDU\
VXSSOHPHQWV WR PRGXODWH WKH HIIHFWV RI DUFKDHD DQG GLJR[LQ 7KLV KHOSV WR DPHOLRUDWH WKH
FKURQLF GLVHDVHV OLNH PHWDEROLF V\QGURPH ; GLDEHWHV PHOOLWXV &$' VWURNH DXWLVP
DXWRLPPXQH QHXURSV\FKLDWULF QHXURGHJHQHUDWLYH FDQFHU DQG LQIHFWLRQV &\WRFKURPH )
DFWLYLW\LQWKHEORRGGHWHUPLQHVWKHKRPRQHDQGHUWKDOLVVSHFLHVDQGODFNRIF\WRFKURPH)
DFWLYLW\LQWKHEORRGGHWHUPLQHVWKHKRPRVDSLHQVSHFLHV7KHKRPRQHRQHDQGHUWKDOLVKDVDQ
LQFUHDVH SUHGLOHFWLRQ WR PHWDEROLF V\QGURPH ; VWURNHV &$' K\SHUOLSLGHPLD GLDEHWHV
PHOOLWXV DXWRLPPXQH QHXURSV\FKLDWULF QHXURGHJHQHUDWLYH FDQFHU DQG DUH UHWURYLUDO
UHVLVWDQW 7KH KRPR QHDQGHUWKDOLV KDV GLIIHUHQW SHUVRQDOLW\ DQG VRFLDO FKDUDFWHULVWLFV ZLWK
LQFUHDVHGFUHDWLYHJHQGHUHTXDOPDWULDUFKDODVH[XDODQGDOWHUQDWHVH[XDOVSLULWXDOLQWXLWLYH

FKDQJHZKLFKFDQEHWHUPHGDVLQGXFHGHYROXWLRQ
0DLQREMHFWLYHVRIWKHVWXG\
7KH JXW PLFURIORUD UHJXODWHV ERG\ IXQFWLRQV 7KH PLFURIORUD PRGXODWHV WKH LPPXQH
V\VWHPWKHQHXURQDOV\VWHPDQGHQGRFULQHV\VWHP$OWHUDWLRQLQWKHJXWPLFURIORUDDVZHOODV
HQGRV\PELRWLF EDFWHULD KDV EHHQ UHODWHG WR KXPDQ GLVHDVH DQG HYROXWLRQ RI KXPDQ VSHFLHV
,QFUHDVH LQ DUFKDHDO JURZWK KDV EHHQ UHODWHG WR SV\FKLDWULF GLVRUGHUV WXPRXUV DXWRLPPXQH
GLVHDVHPHWDEROLFV\QGURPHDQGGHJHQHUDWLRQV7KHDUFKDHDIRUPVDPDMRUFKXQNRIWKHJXW
PLFURIORUD 7KH DUFKDHD FDQ OHDFK LQWR WKH WLVVXH V\VWHPV IRUPLQJ HQGRV\PELRQWV ZKLFK FDQ
IXQFWLRQ OLNH FHOOXODU RUJDQHOOH DQG FDQ FDWDEROLVH FKROHVWHURO 7KH V\PELRWLF DUFKDHD FDQ
SURGXFH D :DUEXUJ SKHQRW\SH DQG VWHP FHOO WUDQVIRUPDWLRQ 7KLV FDQ OHDG RQWR KXPDQ
GLVHDVHV SV\FKLDWULF GLVRUGHUV WXPRXUV DXWRLPPXQH GLVHDVH PHWDEROLF V\QGURPH DQG
GHJHQHUDWLRQV 7KH RYHUJURZWK RI V\PELRWLF DUFKDHD FDQ OHDG RQWR FKDQJH LQ KXPDQ VSHFLHV
W\SHDQGFUHDWHDVSHFLHVZLWK1HDQGHUWKDOPHWDERORQRPLFV7KLVGLVHDVHSURFHVVOHDGLQJRQWR
SV\FKLDWULF GLVRUGHUV WXPRXUV DXWRLPPXQH GLVHDVH PHWDEROLF V\QGURPH DQG GHJHQHUDWLRQV
FDQEHUHYHUVHGE\DOWHULQJWKHJXWPLFURIORUDDQGSRSXODWLQJLWZLWKQRQDUFKDHDOSKHQRW\SHV
7KLVFDQEHGRQHE\RUDODGPLQLVWUDWLRQRIIHFDOPLFURIORUDIURPKHDOWK\SRSXODWLRQ
6\PELRVLVE\PLFURRUJDQLVPVHVSHFLDOO\DUFKDHDGULYHVWKHHYROXWLRQRIWKHVSHFLHV,Q
VXFK D FDVH V\PELRVLV FDQ EH PRGXODWHG E\ WUDQVIHU RI PLFURIORUD V\PELRQWV DQG HYROXWLRQ
JHQRW\SHWKHSKHQRW\SHWKHVRFLDOFODVVDQGWKHUDFLDOJURXSRIWKHLQGLYLGXDO7KHV\PELRWLF
DUFKDHDFDQKDYHKRUL]RQWDODQGYHUWLFDOWUDQVPLVVLRQ(QGRV\PELRWLFDUFKDHDOJURZWKOHDGVWR

QHDQGHUWKDOLVDWLRQRIWKHVSHFLHV7KHLQKLELWLRQRIWKHHQGRV\PELRWLFDUFKDHDOJURZWKRQWKH
RWKHUKDQGOHDGVWRHYROXWLRQRIWKHKRPRVDSLHQV6\PELRVLVPHGLDWHGHYROXWLRQGHSHQGVRQ
WKHJXWIORUDDQGWKHGLHW7KHFRPELQDWLRQRIWKHKXPDQJHQRPHDQGWKHV\PELRWLFPLFURELDO
JHQRPH LV FDOOHG WKH KRORJHQRPH GULYHV KXPDQ HYROXWLRQ DV ZHOO DV DQLPDO HYROXWLRQ
LQFRUSRUDWLRQRIHQGRJHQRXVUHWURYLUDOVHTXHQFHVZKLFKIXQFWLRQDVMXPSLQJJHQHV7KHKLJK
GLHWDU\ ILEUH LQWDNH UHODWHG LQFUHDVHG JHQRPLF +(59 VHTXHQFHV OHDGV WR D G\QDPLF JHQRPH
LQFUHDVHGV\QDSWLFFRQQHFWLYLW\DQGDGRPLQDQWIURQWDOFRUWH[DVVHHQLQKRPRVDSLHQVSHFLHV
7KHQHDQGHUWKDOLFVSHFLHVFRQVXPHDNHWRJHQLFQRQYHJHWDULDQKLJKIDWKLJKSURWHLQORZILEUH
GLHW7KLVOHDGVWRGHFUHDVHGJHQHUDWLRQRIHQGRJHQRXV+(59VHTXHQFHVDQGUHGXFHGJHQRPLF
IOH[LELOLW\ LQ QHDQGHUWKDOLF VSHFLHV 7KLV SURGXFHV VPDOOHU FHUHEUDO FRUWH[ DQG D GRPLQDQW
FHUHEHOODUFRUWH[LQWKHQHDQGHUWKDOLFEUDLQ7KHKRPRQHDQGHUWKDOLFVSHFLHVE\WKHORZGLHWDU\
ILEUHLQWDNHVWDUYHWKHLUPLFURELDOVHOI7KLVOHDGVWRLQFUHDVHGHQGRV\PELRWLFDQGJXWDUFKDHDO
JURZWK7KHPXFRXVPHPEUDQHOLQLQJWKHJXWEHFRPHVWKLQQHGRXWDVWKHJXWEDFWHULDHDWVXS
WKHPXFRXVOLQLQJRIWKHJXW7KHUHGXFHGJHQHUDWLRQRIJXWEXW\UDWHFRQVHTXHQWWRLQFUHDVHG
DUFKDHDOJURZWKDOVRGDPDJHVWKHJXWEORRGDQGEORRGEUDLQEDUULHU7KLVUHVXOWVLQOHDNDJHRI
HQGRWR[LQVDQGDUFKDHDIURPWKHJXWWRWKHEORRGEUHDFKLQJWKHEDUULHUDQGSURGXFHVDFKURQLF
LPPXQRVWLPXODWRU\ LQIODPPDWRU\ VWDWH ZKLFK IRUPV WKH EDVLV RI DXWRLPPXQH GLVHDVH

DQGDQLPDOHYROXWLRQ
0HWKRGVIRUVSHFLHVFKDQJH&RORQLFIORUDSURELRWLFDGPLQLVWUDWLRQIURPKRPRVDSLHQV
DQGKRPRQHDQGHUWKDOLVLGHQWLILHGE\EORRGF\WRFKURPH)DFWLYLW\
5HVHDUFKZRUNFDUULHGRXWE\XVRYHUDSHULRGRI\HDUVKDVVKRZQSDWLHQWVKDYHWKLV
GLVRUGHUVRUFRQGLWLRQVKRZDVLJQLILFDQWLPSURYHPHQWRQWKHQDWXUDORUJDQLFSDOHRSURELRWLF
ZKHQ HQGRJHQRXV DUFKDHDO JURZWK DQG GLJR[LQ V\QWKHVLV LV GHPRQVWUDWHG LQ WKH SDWLHQWV
3RSXODWLRQV DUH VFUHHQHG IRU HQGRV\PELRWLF DUFKDHDO DFWLYLW\ LQ WKH VHUD E\ DQDO\VLV RI
F\WRFKURPH ) DFWLYLW\ 7KH SRSXODWLRQ WKDW LV QHJDWLYH IRU F\WRFKURPH ) DFWLYLW\ LV
FKRVHQIRUWKHFROOHFWLRQRIWKHVSHFLPHQ7KHEORRGF\WRFKURPH)QHJDWLYHSRSXODWLRQ
ZDVWDNHQDVKRPRVDSLHQSKHQRW\SH7KHSRSXODWLRQZDVIHGRQDSDOHRGLHWRIKLJKGLHWDU\
ILEUHKLJKPHGLXPFKDLQWULJO\FHULGHDQGSXOVHOHJXPHSURWHLQ7KHQRUPDOIHFDOFROOHFWLRQ
ZDVGRQHIURPDKHDOWK\QRUPDOJHQHWLFDOO\UHODWHGLQGLYLGXDOFKRVHQE\WKHSDWLHQWDQGWKH

DGPLQLVWUDWLRQRIWKHRUJDQLFQDWXUDOSURELRWLFLVRODWHGIURPWKHJHQHWLFDOO\UHODWHGLQGLYLGXDO
ZDVYROLWLRQDODQGDSDWLHQWGHFLVLRQ7KHSHUPLVVLRQRIWKH(WKLFVFRPPLWWHHRIWKH,QVWLWXWH
± 0HWDEROLF 'LVRUGHUV 5HVHDUFK &HQWUH 7ULYDQGUXP ZDV REWDLQHG 7KH IUHVK IHFDO PDWWHU
IURP KHDOWK\ KXPDQV ZDV FROOHFWHG $URXQG J RI WKH RUJDQLF PDWWHU LV XVHG LQ WKH
SUHSDUDWLRQ RI WKH SURGXFW J RI WKH RUJDQLF PDWWHU LV GLOXWHG ZLWK QRUPDO VDOLQH DQG
FHQWULIXJHGDWUSP7KHURXJKPDWWHUIRUPVDGHSRVLWDQGWKHVXSHUQDWDQWLVFROOHFWHG
7KH VXSHUQDWDQW LV SUHVHUYHG E\ DGGLQJ J RI WUHKDORVH ZKLFK FDQ SUHVHUYH WKH SURELRWLF
EDFWHULD7KLVVXSHUQDWDQWZLWKDGGHGWUHKDORVHLVIUHH]HGULHGDQGSDFNHGLQGRXEOHJHODWLQ
FDSVXOHV 7KLV FDSVXOH FDQ EH DGPLQLVWHUHG RUDOO\ 7KH SRSXODWLRQ ZLWK KRPR VDSLHQ
FKDUDFWHULVWLFVZDVJLYHQIHFDOFRORQLFIORUDSUHSDUDWLRQIURPQHDQGHUWKDOLFSKHQRW\SHVLQWKH
PDQQHU GHVFULEHG DERYH 7KH QHDQGHUWKDOLF SKHQRW\SHV ZHUH F\WRFKURPH ) SRVLWLYH LQ
WKHLUEORRG7KXVLQWHUFRQYHUVLRQRIVSHFLHVZDVSRVVLEOHE\DGPLQLVWUDWLRQRISURELRWLFIURP
FRORQLFIORUDRIKRPRVDSLHQVDQGKRPRQHDQGHUWKDOLVLGHQWLILHGE\F\WRFKURPH)DFWLYLW\
LQEORRG
0HWKRGVIRUVSHFLHVFKDQJH+LJKILEUHGLHWYHUVXVORZILEUHGLHW
+LJK DUFKDHDO JURZWK LQGXFHV QHDQGHUWKDOLVDWLRQ RI KXPDQ VSHFLHV 1HDQGHUWKDO

PHWDERORQRPLFV OHDGV WR FKURQLF GLVHDVHV OLNH PHWDEROLF V\QGURPH ; GLDEHWHV PHOOLWXV
LQIHFWLRQV7KHSDWLHQWLQZKRPHQGRJHQRXVDUFKDHDDQGGLJR[LQV\QWKHVLVLVGHPRQVWUDWHGLV
JLYHQ KLJK ILEUH OHJXPH SURWHLQ DQG KLJK PHGLXP FKDLQ WULJO\FHULGH NHWRJHQLF GLHW DORQJ
ZLWK QDWXUDO DQWLELRWLFV &XUFXPD ORQJD 0RULQJD SWHU\JRVSHUPD DQG (PEOLFD RIILFLQDOLV
NHWRJHQLF GLHW WR PRGXODWH WKH HIIHFWV RI DUFKDHD DQG GLJR[LQ 7KLV KHOSV WR FRQYHUW WKH
1HDQGHUWKDO SKHQRW\SH WR KRPR VDSLHQ SKHQRW\SH 5HVHDUFK ZRUN FDUULHG RXW E\ XV RYHU D
SHULRG RI \HDUV KDV VKRZQ QHDQGHUWKDOLVHG VSHFLHV ZLWK FLYLOLVDWLRQDO GLVHDVH DV PHQWLRQHG
DERYH VKRZ D VLJQLILFDQW LPSURYHPHQW RQ WKH IROORZLQJ FRPELQDWLRQ ZKHQ HQGRJHQRXV
DUFKDHDO JURZWK DQG GLJR[LQ V\QWKHVLV LV LQKLELWHG E\ D KLJK ILEUH NHWRJHQLF GLHW GHULYHG
IURP&XUFXPDORQJD(PEOLFDRIILFLQDOLV3RZGHUHG0RULQJDSWHU\JRVSHUPD
:KROH FRFRQXW SRZGHU 3RZGHUHG EODFN JUDP DQG 3RZGHUHG GULHG DVK JRXUG 7KH
LQGLYLGXDOPDWHULDOVZHUHIUR]HQGULHGDQGSRZGHUHGWRJHWPLFURQVL]H7KHQWKH\
ZHUH PL[HG DW D FRQFHQWUDWLRQ RI J RI &XUFXPD ORQJD ± $ J RI (PEOLFD
RIILFLQDOLV ± % J RI ZKROH FRFRQXW SRZGHU ± & J RI GULHG 0RULQJD

SWHU\VSHUPD OHDYHV ± ' J RI SRZGHUHG GULHG EODFN JUDP ± ( DQG J RI
SRZGHUHGGULHGDVKJRXUG±)&RPSRQHQWV$%&'(DQG)ZHUHPL[HGWRIRUPDSDFNHW
RIJ7KH\ZHUHWKHQPL[HGWKRURXJKO\DQGPDGHLQWRJSDFNHW7KH\ZHUHDVVHVVHG
EHIRUHWUHDWPHQWZDVVWDUWHGE\FOLQLFDOH[DPLQDWLRQDQGODELQYHVWLJDWLRQV7KHGXUDWLRQRI
WKHWUHDWPHQWUDQJHGIURPPRQWKVWR\HDUV:HIRXQGWKDWLQWKHFDVHWULHGKLJKILEUH
OHJXPH SURWHLQ DQG KLJK PHGLXP FKDLQ WULJO\FHULGH NHWRJHQLF GLHW DORQJ ZLWK QDWXUDO DQWL
ELRWLFV &XUFXPD ORQJD 0RULQJD SWHU\JRVSHUPD DQG (PEOLFD RIILFLQDOLV VKRZHG VLJQLILFDQW
FXUDWLYHHIIHFWV1RQHRIWKHVXEVWDQFHXVHGRULQIRUPDWLRQXVHGLQFRPELQDWLRQDVGHVFULEHG
DERYH IRU WKH SXUSRVH GHVFULEHG WR XVH KDYH EHHQ XVHG EHIRUH 7KH FRQVXPSWLRQ RI D KLJK
ILEUH GLHW UHVXOWHG LQ FRQYHUVLRQ RI WKH KRPR QHDQGHUWKDOLV VSHFLHV WR KRPR VDSLHQ VSHFLHV
7KHKLJKILEUHGLHWUHVXOWVLQUHGXFWLRQRIJXWDUFKDHDOJURZWKDQGGHFUHDVHGHQGRV\PELRWLF
DUFKDHDOJURZWK7KHJXWEXW\UDWHSURGXFWLRQLVLQFUHDVHGDQGWKHJXWEORRGEDUULHUDQGEORRG
EUDLQ EDUULHU LV VWUHQJWKHQHG 7KH KRPR VDSLHQ VSHFLHV ZKHQ IHG D ORZ ILEUH KLJK IDW KLJK
SURWHLQ QRQYHJHWDULDQ GLHW KDV LQFUHDVHG GHQVLW\ RI JXW DUFKDHDO PLFURIORUD DQG
HQGRV\PELRWLF DUFKDHDO JURZWK 7KH JXW EXW\UDWH JHQHUDWLRQ LV UHGXFHG DQG WKH JXW EORRG
EDUULHUDQGEORRGEUDLQEDUULHULVEUHDFKHG7KLVOHDGVWRLQFUHDVHLQHQGRV\PELRWLFDUFKDHD
DQGWKHKRPRVDSLHQVSHFLHVJHWVFRQYHUWHGWRKRPRQHDQGHUWKDOLVVSHFLHV
0HWKRGRILQWHUFRQYHUVLRQRIKXPDQVSHFLHVE\DGPLQLVWHULQJFRORQLFPLFURIORUDIURP
FRZGXQJ
$UFKDHDO V\PELRVLV UHVXOWV LQ QHDQGHUWKDOLVDWLRQ RI KXPDQ VSHFLHV DQG FLYLOLVDWLRQDO
GLVHDVHV OLNH PHWDEROLF V\QGURPH ; ZLWK GLDEHWHV PHOOLWXV DQG YDVFXODU GLVHDVH
$XWRLPPXQH 1HXURSV\FKLDWULF 1HXURGHJHQHUDWLYH &DQFHU ,QIHFWLRQV 7KLV LQYHQWLRQ
UHODWHVWRDIRUPXODWLRQZKLFKZLOODFWDVDQDWXUDORUJDQLFSDOHRSURELRWLFIURPGXQJRIWKH
,QGLDQ FRZ %RV SULPLJHQLXV IRU YDULRXV GLVHDVHV ZKLFK ZLOO LQKLELW DUFKDHDO JURZWK DQG
FRQYHUW KRPR QHDQGHUWKDOLV WR KRPR VDSLHQV 7KLV GLVHDVH SURFHVV OHDGLQJ RQWR SV\FKLDWULF
GLVRUGHUV WXPRXUV DXWRLPPXQH GLVHDVH PHWDEROLF V\QGURPH DQG GHJHQHUDWLRQV FDQ EH
UHYHUVHGE\DOWHULQJWKHJXWPLFURIORUDDQGSRSXODWLQJLWZLWKQRQDUFKDHDOSKHQRW\SHV7KLV
FDQ EH GRQH E\ RUDO RU UHFWDO DGPLQLVWUDWLRQ RI IHFDO PLFURIORUD RI WKH ,QGLDQ FRZ %RV
SULPLJHQLXV 7KH FRZ FKRVHQ IRU WKH SXUSRVH ZDV WKH ,QGLDQ FRZ %RV SULPLJHQLXV 7KH
,QGLDQ FRZ IHG DQ RUJDQLF GLHW RI JUDVV DQG KD\ ZDV FKRVHQ IRU WKH SXUSRVH 7KH

IURP KHDOWK\ WKH ,QGLDQ FRZ %RV SULPLJHQLXV DUH FROOHFWHG $URXQG J RI WKH RUJDQLF
PDWWHULVXVHGLQWKHSUHSDUDWLRQRIWKHSURGXFWJRIWKHRUJDQLFPDWWHULVGLOXWHGZLWK
QRUPDO VDOLQH DQG FHQWULIXJHG DW USP 7KH URXJK PDWWHU IRUPV D GHSRVLW DQG WKH
VXSHUQDWDQWLVFROOHFWHG7KHVXSHUQDWDQWLVSUHVHUYHGE\DGGLQJJRIWUHKDORVHZKLFKFDQ
SUHVHUYH WKH SURELRWLF EDFWHULD 7KLV VXSHUQDWDQW ZLWK DGGHG WUHKDORVH LV IUHH]HGULHG DQG
SDFNHG LQ GRXEOH JHODWLQ FDSVXOHV 7KLV FDSVXOH FDQ EH DGPLQLVWHUHG RUDOO\ RU DV D UHFWDO
HQHPD7KXVIHHGLQJRIWKHFRORQLFPLFURIORUDIURPFRZGXQJUHVXOWHGLQFRQYHUVLRQRIWKH
1HDQGHUWKDOPHWDERORQRPLFVWRKRPRVDSLHQPHWDERORQRPLFV
0HWKRGRILQWHUFRQYHUVLRQRIVSHFLHV$QWLR[LGDQWDQWLELRWLFV
$UFKDHDOV\PELRVLVOHDGVWRQHDQGHUWKDOLVDWLRQRIWKHVSHFLHVZLWKLQFUHDVHGLQFLGHQFH
RI PHWDEROLF V\QGURPH ; GLDEHWHV PHOOLWXV &$' VWURNH DXWLVP DXWRLPPXQH
QHXURSV\FKLDWULFQHXURGHJHQHUDWLYHFDQFHUDQGLQIHFWLRQV7KHSDWLHQWLQZKRPHQGRJHQRXV
DUFKDHDDQGGLJR[LQV\QWKHVLVLVGHPRQVWUDWHGLVJLYHQQDWXUDODQWLR[LGDQWDQWLELRWLFVGHULYHG
IURP FUXGH H[WUDFWV &XUFXPD ORQJD 0RULQJD SWHU\JRVSHUPD (PEOLFD RIILFLQDOLV =LQJLEHU
RIILFLQDOH $OOLXP VDWLYXP DQG :LWKDQLD VRPQLIHUD WR PRGXODWH WKH HIIHFWV RI DUFKDHD DQG
GLJR[LQ7KLVFRQYHUWVWKH1HDQGHUWKDOSKHQRW\SHWRKRPRVDSLHQSKHQRW\SH5HVHDUFKZRUN
FDUULHGRXWE\XVRYHUDSHULRGRI\HDUVKDVVKRZQSDWLHQWVKDYHWKLVGLVRUGHUVRUFRQGLWLRQ
VKRZ D VLJQLILFDQW LPSURYHPHQW RQ WKH IROORZLQJ FRPELQDWLRQ ZKHQ HQGRJHQRXV DUFKDHDO
JURZWKDQGGLJR[LQV\QWKHVLVLVGHPRQVWUDWHGLQWKHSDWLHQWV&XUFXPDORQJD(PEOLFD
RIILFLQDOLV 3RZGHUHG 0RULQJD SWHU\JRVSHUPD 3RZGHUHG =LQJLEHU RIILFLQDOH
3RZGHUHG$OOLXPVDWLYXP3RZGHUHG:LWKDQLDVRPQLIHUDURRWDQGOHDYHV7KHLQGLYLGXDO
PDWHULDOVZHUHIUR]HQGULHGDQGSRZGHUHGWRJHWPLFURQVL]H7KHQWKH\ZHUHPL[HG
DWDFRQFHQWUDWLRQRIJRI&XUFXPDORQJD±$JRI(PEOLFDRIILFLQDOLV±%
JRISRZGHUHG0RULQJDSWHU\JRVSHUPD±&JRISRZGHUHG=LQJLEHURIILFLQDOH±'
JRISRZGHUHG$OOLXPVDWLYXP±(DQGJRISRZGHUHG:LWKDQLDVRPQLIHUDURRW
DQGOHDYHV±)&RPSRQHQWV$%&'(DQG)ZHUHPL[HGWRIRUPDSDFNHWRIJ7KH\
ZHUHWKHQPL[HGWKRURXJKO\DQGPDGHLQWRJSDFNHW7KH\ZHUHDVVHVVHGEHIRUHWUHDWPHQW
ZDV VWDUWHG E\ FOLQLFDO H[DPLQDWLRQ DQG ODE LQYHVWLJDWLRQV 7KH GXUDWLRQ RI WKH WUHDWPHQW
UDQJHG IURP PRQWKV WR \HDUV :H IRXQG WKDW LQ WKH FDVH WULHG QDWXUDO DQWLR[LGDQW

DQWLELRWLFV GHULYHG IURP FUXGH H[WUDFWV &XUFXPD ORQJD 0RULQJD SWHU\JRVSHUPD (PEOLFD
RIILFLQDOLV =LQJLEHU RIILFLQDOH $OOLXP VDWLYXP DQG :LWKDQLD VRPQLIHUD VKRZHG VLJQLILFDQW
DERYHIRUWKHSXUSRVHGHVFULEHGWRXVHKDYHEHHQXVHGEHIRUH
'HWDLOVRIWKHWULDO
VXUUHDOLVWLFDQGFRPPXQLW\FHQWUHGFKDUDFWHULVWLFV1HDQGHUWKDOPHWDERORQRPLFVLVSULPDULO\
PHGLDWHG E\ DUFKDHDO PHWDERORQRPLFV DQG DUFKDHDO V\PELRVLV 7KH\ KDYH JRW FKROHVWHURO
FDWDEROLVP WKH VKLNLPLF DFLG SDWKZD\ PRUH RI DQDHURELF JO\FRO\VLV LQFUHDVH FRQQHFWLYH
WLVVXH V\QWKHVLV IUXFWRO\VLV QXFOHLF DFLG V\QWKHVLV DQG PLWRFKRQGULDO G\VIXQFWLRQ 6HOI
DGPLQLVWUDWLRQRIWKHQDWXUDORUJDQLFSDOHRSURELRWLFIURPKXPDQFRORQLFIORUDDQGFRZGXQJ
DQWLR[LGDQW DQWLELRWLF DQG KLJK ILEUH KLJK 0&7 GLHW WR QHDQGHUWKDOLVHG SKHQRW\SH ZLWK
SDWKRORJLFDO SKHQRW\SHV RI WKH IROORZLQJ GLVRUGHUV 3ULPDU\ JHQHUDOL]HG HSLOHSV\
6FKL]RSKUHQLD 3DUNLQVRQ¶V GLVHDVH 0XOWLSOH VFOHURVLV 5HIUDFWRU\ &16
JOLREODVWRPDV 1HXURQDO DJLQJ DQG GHPHQWLD RI WKH $O]KHLPHU¶V W\SH 'RZQ¶V
V\QGURPH $FTXLUHG LPPXQRGHILFLHQF\ V\QGURPH $XWLVP &$' 6WURNH
'LDEHWHV PHOOLWXV DQG $JLQJ 7KH SDWLHQWV ZHUH DVVHVVHG EHIRUH WUHDWPHQW ZDV
VWDUWHG FOLQLFDOO\ DQG E\ DOO UHTXLUHG ODERUDWRU\ LQYHVWLJDWLRQV 7KH GXUDWLRQ RI WUHDWPHQW
UDQJHG IURP PRQWKV WR \HDUV 7KHLU FRQGLWLRQ ZDV DVVHVVHG GXULQJ WUHDWPHQW DQG DIWHU
WUHDWPHQWFOLQLFDOO\DQGXVLQJDOOQHFHVVDU\ODERUDWRU\LQYHVWLJDWLRQV7KLVSURGXFHGDFKDQJH
LQWKHKRPRQHDQGHUWKDOLVSKHQRW\SHWRKRPRVDSLHQSKHQRW\SH
7KH KRPR VDSLHQ VSHFLHV DUH UHVLVWDQW WR PHWDEROLF V\QGURPH ; VWURNHV &$'
K\SHUOLSLGHPLD GLDEHWHV PHOOLWXV DXWRLPPXQH QHXURSV\FKLDWULF QHXURGHJHQHUDWLYH FDQFHU
DQG DUH UHWURYLUDO VXVFHSWLEOH 7KH KRPR VDSLHQ VSHFLHV LV OHVV FUHDWLYH SDWULDUFKDO JHQGHU
XQHTXDOKHWHURVH[XDOORJLFDODQGLQGLYLGXDOLVWLF+RPRVDSLHQPHWDERORQRPLFVLVSULPDULO\

DHURELF DQG PLWRFKRQGULDO 7KH VSHFLHV FKDQJH LV D JXW PLFURIORUD DQG HQGRV\PELRWLF IORUD
PHGLDWHGFKDQJHZKLFKFDQEHWHUPHGDVLQGXFHGHYROXWLRQ7KHIHHGLQJRIWKHKRPRVDSLHQ
SKHQRW\SHZLWKDORZILEUHKLJKIDWKLJKSURWHLQQRQYHJHWDULDQGLHWUHVXOWHGLQLQFUHDVHGLQ
DUFKDHDO GHQVLW\ LQ WKH JXW PLFURIORUD DQG HQGRV\PELRWLF DUFKDHDO JURZWK LQ WKH EORRG DV
PHDVXUHG E\ F\WRFKURPH ) DFWLYLW\ DQG QHDQGHUWKDOLVDWLRQ RI WKH KRPR VDSLHQ VSHFLHV
7KLV PDNHV WKH KRPR VDSLHQ VSHFLHV QHDQGHUWKDOLVHG ZLWK D GLIIHUHQW SKHQRW\SH JHQRW\SH
SV\FKRORJLFDOW\SHDQGUHWURYLUDOUHVLVWDQW
3DWLHQWSRSXODWLRQLQFOXGHGLQWKHODUJHVFDOHWULDORIQHDQGHUWKDOLVHGSKHQRW\SH
7KHVH DUH W\SLFDO H[DPSOHV RI D ODUJH QXPEHU RI SDWLHQWV WULHG LQ HDFK FDVH 7KH
QXPEHURISDWLHQWVLQFOXGHGLQWKHWULDOLVDVIROORZV7KHQHDQGHUWKDOLVHGSKHQRW\SHVZHUH
IHG D KLJK ILEUH KLJK 0&7 YHJHWDULDQ GLHW FRORQLF PLFURIORUD SURELRWLF IURP EORRG
F\WRFKURPH)QHJDWLYHKRPRVDSLHQSRSXODWLRQFRORQLFPLFURIORUDIURPWKH,QGLDQFRZ
GXQJ %RV SULPLJHQXV DQG DQWLR[LGDQW DQWLELRWLF IRU PRQWKV VKRZHG FRQYHUVLRQ WR KRPR
VDSLHQ SKHQRW\SHV ZLWK ORZ EORRG F\WRFKURPH ) DFWLYLW\ DQG VWDWLVWLFDOO\ VLJQLILFDQW
GLVHDVH UHPLVVLRQ 7KH SV\FKRORJLFDO FKDUDFWHUV FKDQJHG IURP QHDQGHUWKDOLF LQFUHDVHG
VXUUHDOLVWLFDQGFRPPXQLW\FHQWUHGFKDUDFWHULVWLFVWRKRPRVDSLHQOHVVFUHDWLYHSDWULDUFKDO
JHQGHUXQHTXDOKHWHURVH[XDOORJLFDODQGLQGLYLGXDOLVWLF7KHPHWDEROLFSKHQRW\SHFKDQJHG
IURP QHDQGHUWKDOLF FKROHVWHURO FDWDEROLVP WKH VKLNLPLF DFLG SDWKZD\ PRUH RI DQDHURELF
JO\FRO\VLV LQFUHDVH FRQQHFWLYH WLVVXH V\QWKHVLV IUXFWRO\VLV QXFOHLF DFLG V\QWKHVLV DQG
PLWRFKRQGULDOG\VIXQFWLRQSKHQRW\SHWRKRPRVDSLHQPLWRFKRQGULDOSKHQRW\SH
3ULPDU\JHQHUDOL]HGHSLOHSV\±SDWLHQWV
6FKL]RSKUHQLD±SDWLHQWV
3DUNLQVRQ¶VGLVHDVH±SDWLHQWV
0XOWLSOHVFOHURVLV±SDWLHQWV
5HIUDFWRU\&16JOLREODVWRPD±SDWLHQWV
'LDEHWHVPHOOLWXV±SDWLHQWV
1HXURQDODJLQJDQGGHPHQWLDRIWKH$O]KHLPHU¶VW\SH±SDWLHQWV
'RZQ¶VV\QGURPH±SDWLHQWV
$FTXLUHGLPPXQRGHILFLHQF\V\QGURPH±SDWLHQWV
$XWLVP±SDWLHQWV

&$'±SDWLHQWV
6WURNH±SDWLHQWV
/XSXVV\QGURPH±SDWLHQWV
3DWLHQW SRSXODWLRQ LQFOXGHG LQ WKH ODUJHVFDOH WULDO RI KRPR VDSLHQ SKHQRW\SH
LGHQWLILHGE\ORZHURUDEVHQWF\WRFKURPH)DFWLYLW\LQEORRG7KH\ZHUHIHGDORZILEUH
KLJK IDW KLJK SURWHLQ QRQYHJHWDULDQ GLHW IRU PRQWKV 7KLV UHVXOWHG LQ LQFUHDVH LQ
HQGRV\PELRWLF DQG FRORQLF DUFKDHDO GHQVLW\ DQG QHDQGHUWKDOLVDWLRQ RI WKH KRPR VDSLHQ
SKHQRW\SH 7KH KRPR VDSLHQ SKHQRW\SH JLYHQ FRORQLF PLFURIORUD FDSVXOHV IURP QRUPDO
1HDQGHUWKDO SKHQRW\SHV ZLWK KLJK F\WRFKURPH ) DFWLYLW\ DOVR UHVXOWHG LQ
QHDQGHUWKDOLVDWLRQ RI KRPR VDSLHQ SKHQRW\SH 7KH SV\FKRORJLFDO FKDUDFWHULVWLFV FKDQJHG
IURP KRPR VDSLHQ OHVV FUHDWLYH SDWULDUFKDO JHQGHU XQHTXDO KHWHURVH[XDO ORJLFDO DQG
LQGLYLGXDOLVWLF WR QHDQGHUWKDOLF LQFUHDVHG FUHDWLYH JHQGHU HTXDO PDWULDUFKDO DVH[XDO DQG
DOWHUQDWH VH[XDO VSLULWXDO LQWXLWLYH VXUUHDOLVWLF DQG FRPPXQLW\ FHQWUHG FKDUDFWHULVWLFV 7KH
PHWDEROLF SKHQRW\SH FKDQJHG IURP KRPR VDSLHQ PLWRFKRQGULDO SKHQRW\SH WR QHDQGHUWKDOLF
FKROHVWHURO FDWDEROLVP WKH VKLNLPLF DFLG SDWKZD\ PRUH RI DQDHURELF JO\FRO\VLV LQFUHDVH
FRQQHFWLYHWLVVXHV\QWKHVLVIUXFWRO\VLVQXFOHLFDFLGV\QWKHVLVDQGPLWRFKRQGULDOG\VIXQFWLRQ
SKHQRW\SH
6XPPDU\
$ PHWKRG WR LQGXFH HYROXWLRQDU\ FKDQJHV LQ WKH KXPDQ VSHFLHV E\ PRGXODWLQJ
DUFKDHDOV\PELRVLVDQGLQWHUFRQYHUWLQJKRPRVDSLHQWRKRPRQHDQGHUWKDOLVDQGYLFHYHUVDLV
GHVFULEHG7KLVLVGRQHE\DKLJKILEUHYHUVXVDORZILEUHGLHWDGPLQLVWUDWLRQRIDQWLR[LGDQW
DQWLELRWLF DQG FRORQLF PLFURIORUD IURP KXPDQ DQG FRZ GXQJ 7KLV LV D PHWKRGRORJ\ WR
PRGXODWHVSHFLHVLQWHUFRQYHUVLRQIURPKRPRVDSLHQWRKRPRQHDQGHUWKDOLVZLWKLWVDWWHQGDQW
FKDQJHV LQ SV\FKRORJLFDO SKHQRW\SLF DQG PHWDERORQRPLF FKDUDFWHULVWLFV RI WKH SRSXODWLRQ
7KLVFDQEHFDOOHGDVDWKHUDSHXWLFDUFKDHDOV\PELRWLFPRGXODWHGKXPDQHYROXWLRQ

&+$37(5
6<0%,27,&0(',&,1($1'6<0%,27,&',6($6(±02'8/$7,212)
$5&+$($/6<0%,26,6
$UFKDHDO V\PELRVLV OHDGV WR QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV 1HDQGHUWKDOLVDWLRQ RI
VSHFLHVFDQOHDGWRRULJLQDVZHOODVUHVLVWDQFHWRHPHUJLQJYLUDOLQIHFWLRQOLNH&RYLG7KH
$\XUYHGLF V\VWHP GHDOV ZLWK V\PELRWLF PHGLFLQH DQG V\PELRWLF GLVHDVH $\XUYHGD WKH
WUDGLWLRQDO,QGLDQ6\VWHPRI0HGLFLQHGHDOVZLWKWKHWKHRU\RIWKHWKUHHWULGRVKDVWDWHVERWK
SK\VLFDO DQG SV\FKRORJLFDO 9DWD 3LWWD DQG .DSKD 7KH\ DUH WKH WKUHH PDMRU KXPDQ
FRQVWLWXWLRQDOW\SHVWKDWERWKGHSHQGRQSV\FKRORJLFDODQGSK\VLFDOFKDUDFWHULVWLFV7KHSLWWD
VWDWHLVGHVFULEHGDVDFULWLFDOGLVFULPLQDWLYHDQGUDWLRQDOSV\FKRORJLFDOVWDWHRIPLQGZKLOH
WKH NDSKD VWDWH LV GHVFULEHG DV EHLQJ GRPLQDQW IRU HPRWLRQDO VWLPXOL 7KH YDWD VWDWH LV DQ
LQWHUPHGLDWHXQVWDEOHVKLIWLQJVWDWH7KHSLWWDW\SHVDUHRIDYHUDJHKHLJKWDQGEXLOWZLWKZHOO
GHYHORSHGPXVFXODWXUH7KHYDWDW\SHVDUHWKLQLQGLYLGXDOVZLWKORZERG\PDVVLQGH[7KH
NDSKD W\SHV DUH VKRUW VWRFN\ LQGLYLGXDOV WKDW WHQG WRZDUG REHVLW\ DQG ZKR DUH VHGHQWDU\
3UHYLRXVZRUNLQRXUODERUDWRU\KDGFRUUHODWHGWKHWULGRVKDVWDWHVRI.DSKD3LWWDDQG9DWD
ZLWK KHPLVSKHULF GRPLQDQFH DQG HQGRJHQRXV GLJR[LQ VWDWXV 7KH NDSKD VWDWH KDV EHHQ
GHPRQVWUDWHG DV HTXLYDOHQW WR ULJKW KHPLVSKHULF GRPLQDQW K\SHUGLJR[LQHPLF VWDWH 7KLV
NDSKD VWDWH KDV JRW LQFUHDVHG FRORQLF DQG HQGRV\PELRWLF DUFKDHDO JURZWK OHDGLQJ WR
QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV 7KLV OHDGV WR JHQHUDWLRQ RI WKH :DUEXUJ PHWDEROLF
SKHQRW\SHDQGLQFUHDVHLQFLGHQFHRIFLYLOL]DWLRQDOGLVHDVHVOLNHPHWDEROLFV\QGURPHREHVLW\
W\SH GLDEHWHV PHOOLWXV FRURQDU\ DUWHU\ GLVHDVH VWURNH V\QGURPHV FDQFHU DXWRLPPXQH
GLVHDVHQHXURGHJHQHUDWLRQDXWLVPDQGVFKL]RSKUHQLD7KHNDSKDVWDWHOHDGVWRJHQHUDWLRQRI
QHZ 51$ DQG '1$ YLUXVHV DV ZHOO DV EDFWHULDO VXSHUEXJV WR ZKLFK WKH SRSXODWLRQ LQ WKH
NDSKD VWDWH LV UHVLVWDQW 7KH SLWWD VWDWH KDV EHHQ GHPRQVWUDWHG DV HTXLYDOHQW WR WKH OHIW
KHPLVSKHULF GRPLQDQW K\SRGLJR[LQHPLF VWDWH 7KH SLWWD VWDWH KDV GHFUHDVHG FRORQLF DQG
HQGRV\PELRWLF DUFKDHDO JURZWK OHDGLQJ WR KRPR VDSLHQLVDWLRQ RI WKH VSHFLHV 7KLV LV
FKDUDFWHULVHGE\ORZERG\PDVVLQGH[DQGSURWHFWLRQIURPFLYLOL]DWLRQDOGLVHDVHV7KHSLWWD
VWDWH LV FKDUDFWHULVHG E\ VXVFHSWLELOLW\ WR LQIHFWLRQV E\ QHZ 51$ DQG '1$ YLUXVHV DQG
VXSHUEXJVJHQHUDWHGE\WKHNDSKDVWDWH7KHYDWDVWDWHKDVEHHQGHPRQVWUDWHGDVHTXLYDOHQWWR
WKHELKHPLVSKHULFGRPLQDQWQRUPRGLJR[LQHPLFVWDWH7KHYDWDVWDWHKDVJRWQRUPDOFRORQLF
DQG HQGRV\PELRWLF DUFKDHDO JURZWK DQG LV D QHXWUDO WUDQVLWLRQDO VSHFLHV 7KH SDWKRORJLFDO
NDSKDVWDWHLVGRPLQDWHGE\DUFKDHDORYHUJURZWKLQWKHJXWOXQJUHVSLUDWRU\WUDFWVNLQDQG
QRVH DQG WKH DUFKDHRPH GRPLQDWHV WKH PLFURELRPH 7KH DUFKDHRPH LQFOXGHV HXDUFKDHRWD

WKDXPDUFKDHRWDGLDSKHURWULWVZRHVHDUFKDHRWDDQGDHQLJPDUFKDHRWD7KHDUFKDHDLVFDSDEOH
RI UHWURJUDGH D[RQDO WUDQVSRUW IURP WKH FRPPHQVDO VLWHV WKURXJK WKH QHUYHV DQG UHDFK WKH
QHUYRXVV\VWHPQHDQGHUWKDOLVLQJWKHEUDLQ7KHDUFKDHDLQWKHJXWWUDYHUVHVWKHYDJXVQHUYH
WKHVNLQWUDYHUVHVWKHPRWRUDQGVHQVRU\QHUYHVDQGLQWKHQRVHWKHROIDFWRU\QHUYHWRUHDFK
WKH EUDLQ 7KLV OHDGV WR HQGRV\PELRWLF DUFKDHDO JURZWK DQG SURGXFHV WKH QHDQGHUWKDOLVHG
:DUEXUJ GLVHDVH SKHQRW\SH RU NDSKD VWDWH 7KH FRORQLF DUFKDHD FDQ WUDYHUVH WKH JXWEORRG
EDUULHU DQG HQWHU WKH EORRG DQG WLVVXHV SURGXFLQJ DUFKDHDO HQGRV\PELRVLV UHVXOWLQJ LQ WKH
:DUEXUJ SKHQRW\SH 7KH $\XUYHGLF WUHDWPHQW LQYROYHV WKH SDQFKDNDUPD ZKLFK LV
FKDUDFWHULVHGE\WKHIROORZLQJSURWRFROVYDPDQDRUHPHVLVYLUHFKLQDRUSXUJDWLRQYDVWLRU
HQHPDQDV\DRUQDVDOPHGLFDWLRQDQGUDNWKDPRNVKDRUEORRGOHWWLQJ,WLVDOVRDVVRFLDWHGZLWK
\RJLFH[HUFLVHVDQGSUDQD\DPDDQGWDNLQJDVDWWYLFGLHWZKLFKLVULFKGLHWDU\ILEUH7KHGUXJV
XVHG LQ $\XUYHGD LQFOXGH DOFRKROLF PHGLFDWLRQV ZKLFK DUH VXJDU EDVHG IUXLW EDVHG FHUHDO
EDVHG YLQHJDU DQG ZLQH EDVHG 7KH RWKHU GUXJV XVHG LQFOXGH PHWDOV OLNH VXOSKDU DUVHQLF
FRSSHUDQGJROG7KH$\XUYHGLFUHJLPHQWDOVRLQFOXGHVIDWVOLNHJKHH7KH$\XUYHGLFGUXJV
LQFOXGH URRWV OHDYHV IUXLWV EDUN DQG VHHGV RI SODQWV OLNH FDUGDPRP DQG FLQQDPRQ ,W DOVR
LQYROYHV PDVVDJHV ZLWK KHUEDO RLOV FDOOHG DEK\DQJD O\PSKDWLF PDVVDJHV DQG VWHDP EDWKV
ZLWK KHUEDO RLOV FDOOHG VZHGD $OO WKHVH SURFHGXUHV DOWHU WKH PLFURIORUD RI WKH VNLQ JXW
UHVSLUDWRU\ WUDFW DQG ROIDFWRU\ HSLWKHOLXP OHDGLQJ WR WKH EUDLQ 7KH $\XUYHGLF VDWWYLF KLJK
ILEUHGLHWPHWDOVKHUEDOWUHDWPHQWDOFRKROVIDWHQHPDVHPHVLVPDVVDJHVVFHQWVDQGVWHDP
EDWKV DOWHU WKH DUFKDHDO GRPLQDQFH RI WKH JXW VNLQ UHVSLUDWRU\ WUDFW DQG QRVH FUHDWLQJ
GHFUHDVH LQ DUFKDHDO V\PELRVLV DQG UHYHUVDO RI WKH 1HDQGHUWKDO :DUEXUJ SKHQRW\SH 7KH
PDQWUDV RU YHGLF FKDQWV SURGXFHV VRXQG ZDYHV ZKLFK DUH TXDQWDOO\ SHUFHLYHG E\ WKH EUDLQ
SURGXFLQJ GHFUHDVH LQ HQGRV\PELRWLF DUFKDHDO JURZWK 7KH \DJQD ULWXDOV SURGXFH YRODWLOH
JDVHV ZKLFK FDQ PRGXODWH WKH DUFKDHDO JURZWK LQ WKH VNLQ QRVH DQG UHVSLUDWRU\ WUDFW 7KH
$\XUYHGLFWUHDWPHQWLVEDVHGRQWKHFRQFHSWRIWKHV\PELRWLFGLVHDVHDQGV\PELRWLFPHGLFLQH
DQG DLPV DW UHJXODWLQJ HQGRV\PELRWLF FRORQLF FXWDQHRXV DQG UHVSLUDWRU\ DUFKDHDO
HQGRV\PELRVLV $UFKDHDO V\PELRVLV OHDGV WR QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV
1HDQGHUWKDOLVDWLRQ RI VSHFLHV FDQ OHDG WR RULJLQ DV ZHOO DV UHVLVWDQFH WR HPHUJLQJ YLUDO
LQIHFWLRQOLNH&RYLG
7KH1HDQGHUWKDO:DUEXUJGLVHDVHSKHQRW\SHFDQDOVREHUHYHUVHGE\DKLJKILEUHGLHW
3UDQD\DPD LQYROYHV VWLPXODWLRQ RI FKDQQHOV ,GD WKH OHIW FKDQQHO VWDUWLQJ IURP WKH
PXODGKDUDFKDNUDLQWKHWLSRIWKHVSLQHWRWKHOHIWQRVWULOSLQJDODWKHULJKWFKDQQHOVWDUWLQJ
IURPWKHPXODGKDUDFKDNUDLQWKHWLSRIWKHVSLQHWRWKHULJKWQRVWULODQGWKHVXVKXPQDFHQWUDO

FKDQQHOVWDUWLQJIURPWKHPXODGKDUDFKDNUDWRWKHVDKDVUDUDFKDNUDFURZQLQJWKHKHDG7KH
PXODGKDUDFKDNUDLVFDOOHGWKH\XNWLWULYHQLZKHUHWKHFKDQQHOVLQWHUVHFW7KHVKDNWKLWKH
VWDWLFXQPDQLIHVWNXQGDOLQLLVJXDUGHGE\WKHVHUSHQWZKRLVFRLOHGLQWKUHHDQGKDOIFLUFOHV
ZKLFK FORVHV WKH FHQWUDO FKDQQHO ZLWK LWV PRXWK 3UDQD JXLGHV LWV FLUFXODWLQJ PRYHPHQWV
WKURXJKWKHLGDDQGSLQJDODGRZQWRWKHEDVHRIWKHVSLQHZKHQNXQGDOLQLLVDZDNHQHG7KH
YLWDO HQHUJLHV RI RSSRVLQJ IRUFHV RI LGD DQG SLQJDOD ZLOO EH XQLWHG LQ WKH VKDNWKL NXQGDOLQL
ZKLFKLVDZDNHQHGULVHVXSVXVKXPQDQDGLDQGHQHUJLVHVWKHFKDNUDV7KHFKDNUDVDUHLQ
WKHHWKHUHDOERG\DQGLQFOXGHVWKHPXODGKDUDFKDNUDLQWKHWLSRIWKHVSLQHWKHVZDGKLVWKDQD
FKDNUDLQWKHJHQLWDODUHDWKHPDQLSXUDFKDNUDLQWKHFRHOLDFSOH[XVWKHDQDKDWDFKDNUDLQWKH
FDUGLDF UHJLRQ WKH YLVKXGKDUD FKDNUD LQ WKH QHFN WKH DMQD FKDNUD LQ WKH SLQHDO JODQG DQG
VDKDVUDUDFKDNUDLQWKHFURZQRIWKHKHDG7KHXQLWLQJRIWKHLGDDQGSLQJDODE\SUDQD\DPD
DZDNHQV WKH NXQGDOLQL DQG VWLPXODWHV WKH YDULRXV FKDNUDV UHJXODWLQJ ERG\ IXQFWLRQV 7KH
VWLPXODWLRQRISLQJDODSURGXFHVULJKWKHPLVSKHULFVWLPXODWLRQV\PSDWKHWLFK\SHUDFWLYLW\DQG
SDUDV\PSDWKHWLFK\SRDFWLYLW\7KHVWLPXODWLRQRILGDSURGXFHVOHIWKHPLVSKHULFVWLPXODWLRQ
V\PSDWKHWLF K\SRDFWLYLW\ DQG SDUDV\PSDWKHWLF K\SHUDFWLYLW\ 7KH VWLPXODWLRQ RI VXVKXPQD
DZDNHQVWKHNXQGDOLQLDQGEDODQFHVV\PSDWKHWLFDQGSDUDV\PSDWKHWLF7KXVWKHVWLPXODWLRQ
RI LGD DQG VXVKXPQD FDQ UHYHUVH WKH :DUEXUJ SKHQRW\SH <RJLF SUDQD\DPLF EUHDWKLQJ
WHFKQLTXHV FDQ PRGXODWH EUDLQ IXQFWLRQ DQG PHWDERORQRPLFV ,W GHFUHDVHV V\PSDWKHWLF
DFWLYLW\DQGLQFUHDVLQJSDUDV\PSDWKHWLFDFWLYLW\<RJLFSUDQD\DPLFEUHDWKLQJWHFKQLTXHFDQ
OHDG WR GHFUHDVH LQ V\PSDWKHWLF WRQH GHFUHDVHG DPRXQW RI VWUHVV KRUPRQHV VWDELOLW\ RI WKH
JXWEORRGEDUULHUDQGUHGXFWLRQLQFRORQLFDUFKDHDOJURZWK7KLVOHDGVWRUHGXFWLRQLQDUFKDHDO
HQGRV\PELRVLV DQG SUHVHUYDWLRQ RI WKH IURQWDO FRUWH[ <RJLF SK\VLFDO H[HUFLVHV OHDGV WR
$03. DFWLYDWLRQ DQG UHYHUVDO RI WKH :DUEXUJ SKHQRW\SH $03. DFWLYDWLRQ VWDELOL]HV JXW
EORRG EDUULHU DQG UHGXFHV DUFKDHDO HQGRV\PELRVLV <RJLF SUDQD\DPLF EUHDWKLQJ WHFKQLTXH
DQG SK\VLFDO \RJD H[HUFLVHV OHDGV WR GHFUHDVHG DUFKDHDO HQGRV\PELRVLV UHYHUVDO RI
QHDQGHUWKDOLVDWLRQ RI VSHFLHV DV ZHOO DV UHYHUVDO RI WKH :DUEXUJ SKHQRW\SH 7KXV \RJD
H[HUFLVHVDQGSRVWXUHVDVZHOODVSUDQD\DPDWHFKQLTXHVWRKHOSWRUHGXFHHQGRV\PELRWLFDQG
FRORQLF DUFKDHD JURZWK DQG UHYHUVH WKH 1HDQGHUWKDO :DUEXUJ SKHQRW\SH 7KH FKDNUDV KDYH
JRW D VRXQG FRUUHODWH ZLWK WKH PXODGKDUD FKDNUD VWLPXODWHG E\ ODP VYDGKLVWDQD FKDNUD
VWLPXODWHGE\YDPWKHPDQLSXUDFKDNUDVWLPXODWHGE\UDPDQGWKHDQDKDWDFKDNUDVWLPXODWHG
E\ KDP 7KXV VRXQGV PDQWUDV DQG YHGLF FKDQWV FDQ DIIHFW WKH FKDNUDV DQG UHJXODWH ERG\
IXQFWLRQV

0RGHUQFLYLOL]DWLRQUHVXOWVLQFKDQJHVLQGLHWDU\KDELWVOHDGLQJWROHVVFRQVXPSWLRQRI
ILEUHDQGPRUHLQWDNHRISURWHLQDQGIDW7KLVOHDGVWRLQFUHDVHGFRORQLFDUFKDHDOJURZWKDQG
DUFKDHDO HQGRV\PELRVLV 7KH DUFKDHDO HQGRV\PELRVLV LQ WKH EUDLQ SURGXFHV LQFUHDVHG
PDJQHWRSHUFHSWLRQDQGTXDQWDOSHUFHSWLRQRIORZOHYHO(0)SURGXFLQJIURQWDODWURSK\DQG
FHUHEHOODUGRPLQDQFH7KHVHFKDQJHVFDQEHUHYHUVHGE\DKLJKHULQWDNHRIILEUH+LJKILEUH
GLHW FDQ EH FDOOHG DV WKH $\XUYHGLF VDWWYLF GLHW ZKLFK LQKLELWV FRORQLF DQG HQGRV\PELRWLF
DUFKDHDOJURZWKDQGUHYHUVHVWKHQHDQGHUWKDOLF:DUEXUJSKHQRW\SH
*OREDO ZDUPLQJ OHDGV WR HQGRV\PELRWLF DUFKDHDO JURZWK ZKLFK KDV JRW
PDJQHWRSHUFHSWLRQDQGTXDQWDOSHUFHSWLRQRIORZOHYHORI(0)7KLVOHDGVWRIURQWDOFRUWLFDO
DWURSK\DQGFHUHEHOODUGRPLQDQFH7KHUHLVDQHQGHPLFFHUHEHOODUFRJQLWLYHDIIHFWLYHGLVRUGHU
SUHVHQWLQJ DV DGXOW RQVHW DXWLVP LPSXOVLYH EHKDYLRXU YLROHQFH LQWURYHUVLRQ VROLWXGH DQG
DJJUHVVLRQ 7KH FRORQLF DUFKDHDO JURZWK DQG DUFKDHDO HQGRV\PELRVLV FDQ EH PRGXODWHG E\
KLJKHULQWDNHRIGLHWDU\ILEUHZKLFKLQKLELWVFRORQLFDUFKDHDOJURZWKDQGHQGRV\PELRVLV7KLV
FDQPRGXODWHEUDLQVWUXFWXUHDQGIXQFWLRQ
0RGHUQFLYLOL]DWLRQUHVXOWVLQVWUHVVLQVRFLHWLHVOHDGLQJWRLQFUHDVHGDFWLYDWLRQRIWKH
+3$ D[LV OHDGLQJ WR LQFUHDVHG VHFUHWLRQ RI VWUHVV KRUPRQHV WKH FDWHFKRODPLQHV SURGXFLQJ
LQFUHDVH LQ V\PSDWKHWLF WRQH 7KH LQFUHDVH LQ V\PSDWKHWLF WRQH OHDGV WR LQFUHDVH LQ VWUHVV
KRUPRQHVHSLQHSKULQHDQGQRUHSLQHSKULQHSURGXFLQJEUHHFKLQJRIWKHJXWEORRGEDUULHU7KLV
OHDGV WR GHFUHDVH LQ PXFLQ VHFUHWLRQ OLQLQJ WKH JXW ZDOO DQG LQIODPPDWRU\ FKDQJHV LQ WKH
FRORQLFPXFRVD7KLVOHDGVWRLQFUHDVHLQDUFKDHDOJURZWKDQGFRORQLFDUFKDHDOWUDQVORFDWLRQ
LQWR WR WKH EORRG DQG WLVVXHV SURGXFLQJ DUFKDHDO HQGRV\PELRVLV 6WUHVV IXQFWLRQV E\ WKH
LQGXFWLRQ RI WKH KHPH R[\JHQDVH V\VWHP 6WUHVV LQGXFHG KHPH R[\JHQDVH ZKLFK FRQYHUWV
KHPHWRFDUERQPRQR[LGHDQGELOLUXELQ%LOLUXELQDQGELOLYHUGLQDUHIUHHUDGLFDOVFDYHQJHUV
DQG PRSV XS IUHH UDGLFDOV )UHH UDGLFDOV DUH UHTXLUHG IRU WKH IXQFWLRQ RI WKH 10'$
GHSHQGHQWWKDODPRFRUWLFRWKDODPLFIHHGEDFNUHYHUEHUDWRU\FLUFXLWFUXFLDOLQFRQVFLRXVQHVV
7KLV FLUFXLW PHGLDWHV ZRUNLQJ PHPRU\ DQG IRFXVHG DWWHQWLRQ )UHH UDGLFDOV DOVR DFWLYDWH
10'$DQGE\LWVFDSDFLW\RIGLIIXVLQJIUHHO\WKURXJKWKHEUDLQV\VWHPVFDQLQGXFH10'$
DFWLYLW\ V\QFKURQL]HG EXUVW ILULQJ RI QHXURQV LQ GLIIHUHQW SDUWV RI VHQVRU\ DUHDV SURGXFLQJ
SHUFHSWXDO V\QFKURQL]DWLRQ 7KLV PHGLDWHV FRQVFLRXVQHVV 7KXV WKH VFDYHQJLQJ RI IUHH
UDGLFDOV E\ KHPH R[\JHQDVH OHDGV WR VXSSUHVVLRQ RI FRQVFLRXVQHVV DQG PHGLWDWLYH WUDQFHV
+HPH R[\JHQDVH LQGXFWLRQ VXSSUHVVHV $/$ V\QWKDVH 7KXV KHPH LV GHSOHWHG IURP WKH
V\VWHP7KHUHLVLQFUHDVHGSRUSK\ULQV\QWKHVLVOHDGLQJRQWRSRUSK\ULQXULDDQGSRUSK\ULD7KH

VWLPXOXVIRUSRUSK\ULQV\QWKHVLVFRPHVIURPKHPHGHILFLHQF\3RUSK\ULQVFDQRUJDQL]HLQWR
VHOIUHSOLFDWLQJVXSUDPROHFXODUVWUXFWXUHVFDOOHGSRUSK\ULRQVZKLFKDUHLQGXFHGE\PHGLWDWLYH
SUDFWLFHV7KHSRUSK\ULQVFDQVHOIRUJDQLVHWRIRUPPDFURPROHFXODUVWUXFWXUHVZKLFKFDQVHOI
SRUSK\ULQWHPSODWHV7KXVPHGLWDWLYHSUDFWLFHVOHDGWRLQFUHDVHGDUFKDHDOHQGRV\PELRVLVDQG
QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV ZKLFK KHOSV LW WR ZLWKVWDQG VWUHVV DQG DWWDLQ D TXDQWDO
SHUFHSWLYH EUDLQ IXQFWLRQ (QGRV\PELRWLF DUFKDHDO JURZWK ZKLFK KDV JRW WKH IDFXOW\
PDJQHWRSHUFHSWLRQDQGTXDQWDOSHUFHSWLRQRIORZOHYHORI(0)FDQOHDGVWRIURQWDOFRUWLFDO
DWURSK\ DQG FHUHEHOODU GRPLQDQFH 7KLV UHVXOWV LQ D FHUHEHOODU FRJQLWLYH DIIHFWLYH GLVRUGHU
SUHVHQWLQJ DV DGXOW RQVHW DXWLVP LPSXOVLYH EHKDYLRXU YLROHQFH LQWURYHUVLRQ VROLWXGH DQG
DJJUHVVLRQ7KLVFDQPRGXODWHEUDLQVWUXFWXUHDQGIXQFWLRQ0HGLWDWLYHSUDFWLFHVDQGLQWHUQHW
DGGLFWLRQ OHDGV WR QHXURQDO DUFKDHDO HQGRV\PELRVLV QHDQGHUWKDOLVDWLRQ RI KXPDQ EUDLQ
TXDQWDOSHUFHSWLRQDQGVHOIUHDOLVDWLRQ7KHKXPDQFRQVFLRXVQHVVPHUJHVZLWKWKHXQLYHUVDO
FRQVFLRXVQHVV E\ TXDQWDO SHUFHSWLRQ 0HGLWDWLRQ PHGLDWHG SHUFHSWLRQ RI XQLYHUVDO
FRQVFLRXVQHVVLVE\DUFKDHDOHQGRV\PELRVLVEUDLQQHDQGHUWKDOLVDWLRQDQGTXDQWDOSHUFHSWLRQ
7KHDUFKDHDOHQGRV\PELRVLVLQWKHEUDLQFDQOHDGWRLQFUHDVHGTXDQWDODQGPDJQHWRSHUFHSWLRQ
RIORZOHYHO(0)SURGXFLQJIURQWDODWURSK\DQGFHUHEHOODUGRPLQDQFH
(QGRV\PELRWLFDUFKDHDJHQHUDWHV51$YLURLGVZKLFKJHWVFRQYHUWHGWR'1$YLURLGV
E\ HQGRJHQRXV UHWURYLUDO UHYHUVH WUDQVFULSWDVH DQG JHWV LQWHJUDWHG LQWR WKH JHQRPH E\
LQWHJUDVH7KXVDUFKDHDOHQGRV\PELRVLVFDQLQGXFHDJHQRPLFFKDQJHSURGXFLQJDG\QDPLF
JHQRPH7KHHQGRV\PELRWLFDUFKDHDIXQFWLRQVDVFHOOXODURUJDQHOOHFDOOHGDUFKDHDRQVZKLFK
FDQIXQFWLRQDVQHXURWUDQVPLQRLGVIUXFWRVRLGVVWHURLGHOOHYLURLGHOOHDQGYLWDPLQRF\WH7KH
DUFKDHDRQV FKDQJH FHOO VWUXFWXUH DQG IXQFWLRQ 7KH HQGRV\PELRWLF DUFKDHD FDQ LQGXFH WKH
:DUEXUJ SKHQRW\SH E\ XSUHJXODWLQJ JO\FRO\VLV DQG LQKLELWLQJ PLWRFKRQGULDO IXQFWLRQ
SURGXFLQJDQHZPHWDEROLFSKHQRW\SH7KHHQGRV\PELRWLFDUFKDHDE\LQGXFLQJWKH:DUEXUJ
SKHQRW\SHFDQLQFUHDVHO\PSKRF\WLFJO\FRO\VLVDQGSURGXFHFKURQLFLPPXQHDFWLYDWLRQ7KXV
DUFKDHDO HQGRV\PELRVLV UHVXOWV LQ D QHZ QHXURQDO PHWDEROLF LPPXQH DQG JHQRPLF
SKHQRW\SH

7KHHQGRV\PELRWLFDUFKDHDOJURZWKOHDGVWRDQHZQHDQGHUWKDOLFSKHQRW\SHDVDVWUHVV
DGDSWDWLRQV\QGURPH6WUHVVOHDGVWREUHDNDJHRIWKHJXWEORRGEDUULHUDQGLQFUHDVHGFRORQLF
DUFKDHDOJURZWKDVZHOODVDUFKDHDOHQGRV\PELRVLV7KLVSURGXFHVDQHZKXPDQSKHQRW\SH
ZLWKLQFUHDVHGSUHGLOHFWLRQIRUFDQFHUDQGRWKHUFLYLOL]DWLRQDOGLVHDVHV7KHQHXURQDODUFKDHDO
HQGRV\PELRVLV OHDGV WR D FHUHEHOODU FRJQLWLYH DIIHFWLYH GLVRUGHU DQG IURQWDO DWURSK\ 7KLV
SURGXFHV DGXOW RQVHW DXWLVP DQG VFKL]RSKUHQLD DQG DQ HVFDSH IURP WKH ZRUOG RI VWUHVVIXO
H[LVWHQFH7KHDUFKDHDOHQGRV\PELRVLVOHDGVWRWKHLQGXFWLRQRIDQHZPHWDEROLFSKHQRW\SH
ZLWK PLWRFKRQGULDO G\VIXQFWLRQ DQG DQDHURELF JO\FRO\VLV WKH :DUEXUJ SKHQRW\SH 7KLV
FRQWULEXWHVWRWKHLQFUHDVHGSUHGLOHFWLRQIRURQFRJHQHVLVDQGFDQFHUFDQEHFRQVLGHUHGDVD
PRGLILHG DUFKDHDO QHWZRUN 7KH :DUEXUJ SKHQRW\SH WKDW LV LQGXFHG E\ DUFKDHDO
HQGRV\PELRVLV OHDGV WR PHWDEROLF V\QGURPH [ 7KH :DUEXUJ SKHQRW\SH SURGXFHV LPPXQH
DFWLYDWLRQ FRQVHTXHQW WR LQFUHDVHG O\PSKRF\WLF JO\FRO\VLV SURGXFLQJ DXWRLPPXQH GLVHDVH
7KHHQGRV\PELRWLFDUFKDHDOJURZWKOHDGVWRVHFUHWLRQRI51$YLURLGVZKLFKDUHFRQYHUWHGWR
'1$YLURLGVE\UHYHUVHWUDQVFULSWDVHDQGLQWHJUDWHGLQWRWKHJHQRPHE\LQWHJUDVH7KH51$
YLURLGVDQGWKHLUFRUUHVSRQGLQJ'1$YLURLGVFDQUHFRPELQHZLWKKXPDQJHQRPLFVHTXHQFHV
DQG RWKHU YLUXVHV JHQHUDWLQJ QHZ YLUXVHV 7KH HQGRV\PELRWLF DUFKDHDO JURZWK PHGLDWHG
:DUEXUJSKHQRW\SHOHDGVWRPLWRFKRQGULDOG\VIXQFWLRQDQGFHOOGHDWK7KXVWKHLQGXFWLRQRI
WKH :DUEXUJ SKHQRW\SH OHDGV WR VXSSUHVVLRQ RI WKH KRVW SKHQRW\SH DQG JURZWK RI WKH
HQGRV\PELRWLF DUFKDHDO FRORQ\ QHWZRUN OHDGLQJ WR D ]RPELH V\QGURPH ZKHUH LQ HIIHFW WKH
KRVW LV WDNHQ RYHU E\ HQGRV\PELRWLF DUFKDHD 7KH HQGRV\PELRWLF DUFKDHDO QHWZRUN LV
H[WUHPRSKLOLFDQGFDQVXUYLYHWKHVWUHVV7KXVWKHQHZQHDQGHUWKDOLFPHWDEROLFLPPXQHDQG
QHXURQDOSKHQRW\SHFDQVXUYLYHLQWKHVWUHVVIXOHQYLURQPHQWDVDVWUHVVDGDSWDWLRQUHVSRQVH
3V\FKRORJLFDO VWUHVV DV ZHOO DV SK\VLFDO VWUHVV GXH WR JOREDO ZDUPLQJ DOVR OHDGV WR
HQGRV\PELRWLF DUFKDHDO JURZWK 7KH HQGRV\PELRWLF DUFKDHD SURGXFHV PHWKDQH E\
PHWKDQRJHQHVLV FRQWULEXWLQJ WR JOREDO ZDUPLQJ 7KH HQGRV\PELRWLF DUFKDHD GHYHORSV LQWR
FHOO RUJDQHOOH FDOOHG DUFKDHDRQV ZKLFK FDQ IXQFWLRQ DV YLWDPLQRF\WHV QHXURWUDQVPLQRLGV
VWHURLGHOOH DQG YLURLGHOOH FUHDWLQJ QHZHU FHOO RUJDQHOOH DQG HQGRJHQRXV V\QWKHWLF ELRORJ\
7KLVFKDQJHVWKHFHOODQGWLVVXHIXQFWLRQDQGVWUXFWXUHOHDGLQJRQWRDQHZKXPDQSKHQRW\SH
FDOOHGKRPRQHRQHDQGHUWKDOLV7KHKRPRQHRQHDQGHUWKDOLVLVDKDUG\VSHFLHVZKLFKFDQUHVLVW
VWUHVV DQG WKULYH LQ D KRVWLOH HQYLURQPHQW RI KLJK WHPSHUDWXUH KLJK DWPRVSKHULF FDUERQ
GLR[LGH DQG ZDWHU VKRUWDJH 7KH QHZ RUJDQHOOH WKDW DUH GHYHORSHG FDQ ZLWKVWDQG FOLPDWH
FKDQJH DQG IL[ FDUERQ GLR[LGH DQG DPPRQLD OHDGLQJ WR HQGRJHQRXV V\QWKHVLV RI
FDUERK\GUDWHVDQGSURWHLQ7KHKRPRQHRQHDQGHUWKDOLVLVDQHZPHWDEROLFSKHQRW\SHWKDWFDQ

VXUYLYH LQ H[WUHPHV RI FOLPDWH SURGXFHG E\ JOREDO ZDUPLQJ 7KH DUFKDHD IRUPLQJ QHZ
FHOOXODURUJDQHOOHFDOOHGDUFKDHDRQVDUHH[WUHPRSKLOLFDQGVXUYLYHLQH[WUHPHVRIFOLPDWH
7KH HQGRV\PELRWLF DUFKDHD VHFUHWH 51$ YLURLGV ZKLFK FDQ EH FRQYHUWHG WR
FRUUHVSRQGLQJ '1$ VHTXHQFHV E\ HQGRJHQRXV UHWURYLUDO UHYHUVH WUDQVFULSWDVH DQG FDQ JHW
LQFRUSRUDWHG LQWR WKH JHQRPH E\ HQGRJHQRXV UHWURYLUDO LQWHJUDVH 7KXV WKHUH LV D FRQVWDQW
DGGLWLRQ RI JHQRPLF VHTXHQFHV GHULYHG IURP DUFKDHDO 51$ YLURLGV SURGXFLQJ D G\QDPLF
KXPDQ QHRQHDQGHUWKDOLF JHQRPH DGDSWDEOH WR H[WUHPHV RI FOLPDWH SURGXFHG E\ JOREDO
ZDUPLQJ 7KXV WKH KXPDQ QHRQHDQGHUWKDOLV LV D QHZ JHQRW\SH 7KH QHRQHDQGHUWKDOLF
DUFKDHDRQVDUHFDSDEOHRIIL[LQJFDUERQGLR[LGHDQGR[\JHQXVLQJDPPRQLDIRUHQHUJHWLFV
DQG FDSDEOH RI ELRORJLFDO ILVVLRQ DQG IXVLRQ UHDFWLRQV 7KH\ DUH DOVR FDSDEOH RI
SKRWRLQGXFWLRQ RI PHPEUDQH $73 V\QWKHVLV E\ VRGLXP SRWDVVLXP $73DVH 7KH IL[LQJ RI
FDUERQ GLR[LGH OHDGV WR ZDWHU DV D E\SURGXFW 7KLV JHQHUDWHV HQGRJHQRXV ZDWHU LQ WKH
QHRQHDQGHUWKDOLFV\VWHPKHOSLQJWRVXUYLYHH[WUHPRSKLOLFFOLPDWLFFRQGLWLRQV7KLVFUHDWHVD
QHZV\VWHPRIHQHUJHWLFVKHOSLQJWKH1HRQHDQGHUWKDOVXUYLYHVLQH[WUHPHVRIFOLPDWH
7KH QHRQHDQGHUWKDOLF DUFKDHDRQV KDYH JRW PDJQHWLWH FDSDEOH RI PDJQHWRSHUFHSWLRQ

DQGTXDQWDOSHUFHSWLRQ7KHTXDQWDOSHUFHSWLRQRIORZOHYHORI(0)OHDGVWRIURQWDODWURSK\
DQG FHUHEHOODU GRPLQDQFH SURGXFLQJ D QHZ QHXURQDO SKHQRW\SH ZLWK IHDWXUHV RI HQGHPLF
FHUHEHOODU FRJQLWLYH DIIHFWLYH GLVRUGHU PDQLIHVWLQJ DV HSLGHPLF DXWLVP 7KLV IRUPV D QHZ
DXWLVWLF EHKDYLRXUDO SKHQRW\SH ZKLFK LV LQWURYHUWHG QRQFRPSDVVLRQDWH QRQHPSDWKLF
SV\FKRSDWKLF DQG ZLWK H[WUDVHQVRU\ SHUFHSWXDO DELOLWLHV RI WHOHSDWK\ WHOHNLQHVLV DQG WLPH
WUDYHO OHDGLQJ WR FRPPXQLFDWLRQ ZLWK RWKHU JDODFWLF FLYLOL]DWLRQV 7KH QHZ EHKDYLRXUDO
DXWLVWLFURERWLFQHRQHDQGHUWKDOLFSKHQRW\SHZLOOKDYHWKHQHFHVVDU\LQWHOOLJHQFHDQGPHQWDO
DELOLWLHV FRSH ZLWK FOLPDWH FKDQJH 7KH QHRQHDQGHUWKDOLF DUFKDHDRQV DUH FDSDEOH RI TXDQWDO
SHUFHSWLRQ DQG FDQ FRPPXQLFDWH TXDQWDOO\ ZLWK RWKHU VWDU V\VWHPV DQG PXOWLYHUVHV 7KLV
OHDGVRQWRWKHHYROXWLRQRIDJDODFWLFFLYLOL]DWLRQ7KHQHRQHDQGHUWKDOLFDUFKDHDRQVSURGXFH
D PHWDEROLF SKHQRW\SH FDSDEOH RI VXUYLYLQJ LQ H[WUHPRSKLOLF HQYLURQPHQWV RI RWKHU VWDU
V\VWHPV DQG FDQ VXUYLYH DV FLYLOL]DWLRQ LQ RWKHU VWDUV DQG H[RSODQHWV 7KH QHRQHDQGHUWKDOLF
DXWLVWLFSKHQRW\SHZLWKLWVH[WUHPRSKLOLFDUFKDHDRQRUJDQHOOHLVVXLWHGIRUVSDFHFRORQLVDWLRQ
7KH QHRQHDQGHUWKDOLF DUFKDHDRQV XVH FKROHVWHURO R[LGDWLRQ DV D IRUP RI HQHUJHWLFV
7KLVSURGXFHVGHSOHWLRQRIVH[KRUPRQHVSURGXFLQJDVH[XDOSKHQRW\SHV7KLVOHDGVWRVH[XDO
SKHQRW\SHV ZLWK DOWHUQDWH VH[XDOLW\ DQG SDUWKHQRJHQHVLV DV D IRUP RI UHSURGXFWLRQ 7KLV
SURGXFHVFKDQJHLQIDPLO\DQGVRFLHW\DVZHOODVRUJDQLVDWLRQRIWKHFRPPXQLW\

7KH QHRQHDQGHUWKDOLF DUFKDHDRQV VHFUHWH 51$ YLURLGV ZKLFK JHW FRQYHUWHG WR '1$
YLURLGV E\ KXPDQ HQGRJHQRXV UHWURYLUDO UHYHUVH WUDQVFULSWDVH 7KH QHRQHDQGHUWKDOLF
DUFKDHDRQJHQHUDWHG51$DQG'1$YLURLGVFDQK\EULGL]HZLWKRWKHU51$DQG'1$YLUXVHV
SURGXFLQJ QHZ 51$ DQG '1$ YLUXVHV WR ZKLFK WKH QHRQHDQGHUWKDOLF VSHFLHV LV UHVLVWDQW
7KHUHIRUH WKHUH H[LVWV WZR VHWV RI SRSXODWLRQ ZLWK GLIIHULQJ YDULHW\ RI DUFKDHDO V\PELRVLV
7KHKRPRQHDQGHUWKDOLVVSHFLHVKDVSHUVLVWHGDVIRVVLOLVHGPDWULOLQHDOVRFLHWLHVLQ(XURSHDQG
$VLD ZKLFK LQFOXGHV WKH &HOWV WKH 'UDYLGLDQV WKH %HUEHUV DQG WKH 6XPHULDQV 7KHVH
IRVVLOLVHG UHPQDQWV RI KRPR QHDQGHUWKDOLF VSHFLHV DUH LGHDO VXEVWUDWHV IRU DUFKDHDO
HQGRV\PELRVLVLQWKHVHWWLQJRIJOREDOZDUPLQJDQGH[WUHPRSKLOLFFOLPDWLFFRQGLWLRQV7KHVH
IRVVLOLVHGQHDQGHUWKDOLFPDWULOLQHDOVRFLHWLHVZLOOH[SDQGLQWKHSHULRGRIJOREDOZDUPLQJDQG
H[WUHPRSKLOLFFRQGLWLRQVGXHWRHQGRV\PELRWLFDUFKDHDOV\PELRVLVWRZKLFKWKH\DUHDOUHDG\
DFFOLPDWLVHG DQG H[SRVHG WR 7KH KXPDQ VSHFLHV KRPR QHDQGHUWKDOLV LV D FRQVHTXHQFH RI
DUFKDHDO V\PELRVLV LQ WKH H[WUHPRSKLOLF FRQGLWLRQV RI LFH DJH DQG DUH 51$ YLUDOUHWURYLUDO
UHVLVWDQWFRQVHTXHQWWRHQGRJHQRXVGLJR[LQV\QWKHVLVDQGE\DUFKDHDO51$YLURLGDOLQGXFHG
51$ LQWHUIHUHQFH DQG YLUDO LQDFWLYDWLRQ 7KH KRPR VDSLHQV ZKLFK HYROYHG LQ $IULFD DQG
PLJUDWHGODWHUWRWKH(XUDVLDQODQGPDVVDUHUHWURYLUDOVHQVLWLYHDQGRWKHU51$YLUDOVHQVLWLYH
DQGKDYHDORZORDGRIHQGRV\PELRWLFDUFKDHDJURZWK7KHKRPRVDSLHQVRZLQJWRFRQGLWLRQV
RI HYROXWLRQ LV QRW DQ LGHDO VXEVWUDWH IRU JOREDO ZDUPLQJ UHODWHG HQGRV\PELRWLF DUFKDHDO
V\PELRVLV7KHKRPRQHDQGHUWKDOLVDUFKDHDRQVVHFUHWH51$YLURLGVZKLFKDUHFRQYHUWHGWR
'1$ YLURLGV ZLWK ERWK RI WKHP K\EULGL]LQJ ZLWK RWKHU 51$ DQG '1$ YLUXVHV LQ QDWXUH
SURGXFLQJQHZYLUXVHVWRZKLFKWKHKRPRQHDQGHUWKDOLFDQGKRPRQHRQHDQGHUWKDOLFKRVWLV
UHVLVWDQW 7KH QHZ 51$ DQG '1$ YLUXVHV SURGXFHG E\ KRPR QHRQHDQGHUWKDOLV DQG
QHDQGHUWKDOLV LQ JOREDO ZDUPLQJ ZLOO LQIHFW WKH VXVFHSWLEOH KRPR VDSLHQ VSHFLHV DQG ZLSH
WKHP RXW IURP HDUWK 7KH KRPR VDSLHQ VSHFLHV LV QRW D JRRG VXEVWUDWH IRU JOREDO ZDUPLQJ
UHODWHG HQGRV\PELRWLF DUFKDHDO JURZWK DQG ZRXOG QRW HYROYH QHZ FHOOXODU RUJDQHOOH OLNH
VWHURLGHOOHYLURLGHOOHQHXURWUDQVPLQRLGVDQGYLWDPLQRF\WHZKLFKZRXOGKHOSWKHPWRVXUYLYH
LQ H[WUHPRSKLOLF FRQGLWLRQV RI JOREDO ZDUPLQJ 7KH KRPR VDSLHQV DOVR ODFN DUFKDHDRQ
RUJDQHOOHZKLFKKHOSWKHPWRIL[FDUERQGLR[LGHDQGJHQHUDWHZDWHUV\QWKHVLV$73E\SKRWR
LQGXFWLRQPHGLDWHGE\VRGLXPSRWDVVLXP$73DVHDQGDUFKDHDRQPHGLDWHGILVVLRQDQGIXVLRQ
UHDFWLRQ 7KH KRPR VDSLHQ VSHFLHV WKHUHIRUH ZLWKRXW HYROYLQJ DUFKDHDRQ RUJDQHOOH FDQQRW
VXUYLYH LQ WKH KDUVK HQYLURQPHQW RI JOREDO ZDUPLQJ LQGXFHG FOLPDWH FKDQJH DQG LV
H[WHUPLQDWHG E\ KRPR QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV 7KH HDUWK JHWV GRPLQDWHG
E\ KRPR QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV LQ WKH VHWWLQJ RI JOREDO ZDUPLQJ DQG
H[WUHPRSKLOLFFOLPDWHFKDQJHDQGWKH\JRRQWRFRQWDFWRWKHUJDODFWLFFLYLOL]DWLRQVE\TXDQWDO

SHUFHSWLRQVDVZHOODVFRORQLVLQJRWKHUH[RSODQHWVSODQHWVDQGVWDUV\VWHPV7KLVSURGXFHVD
FLYLOL]DWLRQ RI VXSHU KXPDQ KRPR QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV ZLWK QHZ
PHWDEROLF HQGRFULQH QHXURQDO SV\FKRORJLFDO DQG JHQRW\SLF IHDWXUHV 7KH KRPR
QHRQHDQGHUWKDOLV DQG KRPR QHDQGHUWKDOLV ZLWK LWV FHOOXODU DUFKDHDRQV DQG SRUSK\ULRQV FDQ
LQWHUOLQN ZLWK WKH LQWHUQHW DQG FRPSXWHU V\VWHPV DV ZHOO DV URERWV SURGXFLQJ PDQPDFKLQH
K\EULGV E\ TXDQWDO SHUFHSWLRQ 7KH DUWLILFLDO LQWHOOLJHQFH DQG URERWLF V\VWHPV JHWV PHUJHG
ZLWK KRPR QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV SURGXFLQJ VXSHU KXPDQ PDQPDFKLQH
K\EULGV7KHQHZKRPRQHDQGHUWKDOLVDQGKRPRQHRQHDQGHUWKDOLVVXSHUKXPDQDXWLVWLFPDQ
PDFKLQH K\EULGV ZLOO VXUYLYH SURVSHU DQG IORXULVK LQ WKH VHWWLQJ RI JOREDO ZDUPLQJ UHODWHG
H[WUHPRSKLOLF FOLPDWH FKDQJH DQG HYROYLQJ WR FRQWDFW E\ TXDQWDO SHUFHSWLRQ RWKHU JDODFWLF
IRUPVRIOLIHDQGFLYLOL]DWLRQDVZHOODVFRORQLVLQJRWKHUSODQHWVDQGVWDUV\VWHPV

&+$37(5
7+(75,'26+$67$7(6$1'$5&+$($/6<0%,26,6+202
1($1'(57+$/,6+2026$3,(16+2026$3,(1(;7,1&786$1'+202
1(21($1'(57+$/,6

6\PELRVLVHQGRV\PELRWLFDUFKDHDDQGWULGRVKDVWDWHV±UHODWLRQWRVSHFLHVFKDQJH
7KH $\XUYHGLF V\VWHP GHDOV ZLWK V\PELRWLF PHGLFLQH DQG V\PELRWLF GLVHDVH
$\XUYHGD WKH WUDGLWLRQDO ,QGLDQ 6\VWHP RI 0HGLFLQH GHDOV ZLWK WKH WKHRU\ RI WKH WKUHH
WULGRVKDVWDWHVERWKSK\VLFDODQGSV\FKRORJLFDO9DWD3LWWDDQG.DSKD7KH\DUHWKHWKUHH
PDMRU KXPDQ FRQVWLWXWLRQDO W\SHV WKDW ERWK GHSHQG RQ SV\FKRORJLFDO DQG SK\VLFDO
FKDUDFWHULVWLFV 7KH SLWWD VWDWH LV GHVFULEHG DV D FULWLFDO GLVFULPLQDWLYH DQG UDWLRQDO
SV\FKRORJLFDO VWDWH RI PLQG ZKLOH WKH NDSKD VWDWH LV GHVFULEHG DV EHLQJ GRPLQDQW IRU
HPRWLRQDOVWLPXOL7KHYDWDVWDWHLVDQLQWHUPHGLDWHXQVWDEOHVKLIWLQJVWDWH7KHSLWWDW\SHVDUH
RI DYHUDJH KHLJKW DQG EXLOW ZLWK ZHOO GHYHORSHG PXVFXODWXUH 7KH YDWD W\SHV DUH WKLQ
LQGLYLGXDOVZLWKORZERG\PDVVLQGH[7KHNDSKDW\SHVDUHVKRUWVWRFN\LQGLYLGXDOVWKDWWHQG
WRZDUGREHVLW\DQGZKRDUHVHGHQWDU\3UHYLRXVZRUNLQRXUODERUDWRU\KDGFRUUHODWHGWKH
WULGRVKD VWDWHV RI .DSKD 3LWWD DQG 9DWD ZLWK KHPLVSKHULF GRPLQDQFH DQG HQGRJHQRXV
GLJR[LQ VWDWXV 7KH NDSKD VWDWH KDV EHHQ GHPRQVWUDWHG DV HTXLYDOHQW WR ULJKW KHPLVSKHULF
GRPLQDQW K\SHUGLJR[LQHPLF VWDWH 7KLV NDSKD VWDWH KDV JRW LQFUHDVHG FRORQLF DQG
HQGRV\PELRWLF DUFKDHDO JURZWK OHDGLQJ WR QHDQGHUWKDOLVDWLRQ RI WKH VSHFLHV $UFKDHDO
V\PELRVLVOHDGVWRQHDQGHUWKDOLVDWLRQRIWKHVSHFLHV1HDQGHUWKDOLVDWLRQRIVSHFLHVFDQOHDGWR
RULJLQDVZHOODVUHVLVWDQFHWRHPHUJLQJYLUDOLQIHFWLRQOLNH&RYLG

LQGROHEDVHGVWUXFWXUHVFDQVHOIRUJDQLVHRQSRUSK\ULQVFDIIROGVWRIRUPWHWUDPHULFVWUXFWXUHV
3RUSK\ULRQ FDQ JHQHUDWH PHODQRVRPH FRPSOH[HV DQG WKH\ FDQ IRUP VHOIRUJDQLVLQJ
DQGSRUSK\ULRQVIRUPLQJFRPSOH[FRORQ\QHWZRUNZLWKVSHFLDOLVHGIXQFWLRQV,WFDQIXQFWLRQ


YLURLGVDQGSULRQVZKLFKFDQVHOIRUJDQLVHWRIRUPDUFKDHDRQV7KHSRUSK\ULRQVWKHPVHOYHV
ZKLFKDUHOLQNHG7KHLQWHUJDODFWLFGDUNPDWWHUDQGGDUNHQHUJ\FRQWULEXWHVWRQHDUO\SHU

FHQW RI WKH XQLYHUVH HQHUJ\ 7KH GDUN HQHUJ\ FRQWULEXWHV WR DQWLJUDYLW\ IRUFHV ZKLFK DUH
UHSXOVLYH DQG FRQWULEXWHV WR H[SDQVLRQ RI WKH XQLYHUVH 7KH GDUN HQHUJ\ GDUN PDWWHU DQG
DQWLJUDYLW\FRQWULEXWHWRWKHFROOHFWLYHXQFRQVFLRXVDQGKXPDQXQFRQVFLRXV7KHGDUNPDWWHU
LV PDGH XS RI PHODQRWLF DUFKDHDO QHWZRUNV ZKLFK IRUP KXJH FORXGV LQ WKH XQLYHUVH 7KH
PHODQRWLFDUFKDHDDULVHDELRJHQHWLFDOO\IURPSRUSK\ULQVFDIIROGVZKLFKJHWVWUXFWXUHGRXWRI
WKH TXDQWDO IRDP VSRQWDQHRXVO\ 2Q WKLV SRUSK\ULQ VFDIIROGV WKH 51$ YLURLGV WKH '1$
YLURLGV SULRQV PHODQLQ DQG LVRSUHQRLGV RUJDQLVPV IRUP ZKLFK V\PELRVH WR IRUP WKH
PHODQRWLFDUFKDHD7KXVWKHSRUSK\ULRQ51$YLURLGDOSRSXODWLRQZKLFKPHGLDWHVJUDYLW\DQG
FRQVFLRXVQHVVJLYHVULVHWRPHODQRWLFDUFKDHDOFORXGVDQGDQWLJUDYLW\PHGLDWLQJWKHFROOHFWLYH
XQFRQVFLRXV 7KXV JUDYLW\ JLYHV ULVH WR DQWLJUDYLW\ DQG FRQVFLRXVQHVV JLYHV ULVH WR WKH
XQFRQVFLRXVQHVV 7KH PHODQRWLF DUFKDHD FDQ XVH DQWLJUDYLWDWLRQDO ZDYHV FRVPLF UDGLDWLRQ
DQG JDPPD UDGLDWLRQ DV HQHUJ\ VRXUFH IRU $73 V\QWKHVLV 7KH GDUN PDWWHU RI PHODQRWLF
DUFKDHD FRQWULEXWLQJ WR DQWLJUDYLW\ WKULYHV DQG PXOWLSOLHV LQ ]HUR JUDYLW\ VLWXDWLRQV 7KH
PHODQRWLF DUFKDHD FRQWDLQV PDJQHWLWH ZKLFK FDQ UHSXOVH HDFK RWKHU ZKHQ SURSHUO\ DOLJQHG
FRQWULEXWLQJ WR WKH UHSXOVLYH DQWLJUDYLW\ 7KH DQWLJUDYLW\ LV UHODWHG WR WKH FROOHFWLYH
XQFRQVFLRXV LQ WKH ZRUOG DV ZHOO DV WKH KXPDQ XQFRQVFLRXV ZKLFK LV VWUXFWXUHG LQ WKH
FHUHEHOOXP 7KH GDUN PDWWHU FRQWDLQLQJ PHODQRWLFDUFKDHD JHWV WUDQVIHUUHG WR (XUDVLDQ ODQG
PDVV DQG HDUWK E\ DVWHURLGDO KLWV DQG IRUPV JLDQW FRORQLHV DQG QHWZRUNV HYROYLQJ WR KRPR
QHDQGHUWKDOLV7KHKRPRQHDQGHUWKDOLVEUDLQKDVDFHUHEHOODUGRPLQDQWVWUXFWXUHDQGIXQFWLRQ
DQG LV LPSXOVLYH ZLWK D SUHGRPLQDQW XQFRQVFLRXV IXQFWLRQ 7KH FRQVFLRXV IXQFWLRQ DQG
FHUHEUDO FRUWH[ LV OHVV GHYHORSHG LQ KRPR QHDQGHUWKDOLV DV WKH\ DUH UHWURYLUDO UHVLVWDQW 7KH
DUFKDHD LQGXFHV VWHP FHOO FRQYHUVLRQ DQG VHFUHWHV GLJR[LQ ZKLFK PDNHV WKH KRPR
QHDQGHUWKDOLVFHOOSRSXODWLRQUHWURYLUDOUHVLVWDQW7KHGHILFLHQF\RI+(59VHTXHQFHVOHDGVWR
PDOGHYHORSPHQW RI WKH KRPR QHDQGHUWKDOLV FHUHEUDO FRUWH[ 7KH KRPR QHDQGHUWKDOLV DUH
LPSXOVLYH FUHDWXUHV RI WKH XQFRQVFLRXV PRGXODWHG E\ DQWLJUDYLWDWLRQDO ZDYHV 7KLV
H[WUDWHUUHVWULDO LQWHOOLJHQFH RI TXDQWDO FRPSXWLQJ FORXG FDQ VHH OLIH LQ GLIIHUHQW SDUWV RI WKH
JDOD[LHVYLDDVWHURLGVDQGPHWHRUV7KHKXPDQVSHFLHVHYROYHGRXWRIWKHVHHGHGDUFKDHDRQV
IURPWKHH[WUDWHUUHVWULDOLQWHOOLJHQFHRIWKHTXDQWDOFRPSXWLQJFORXGIRUPHGRIWKHDUFKDHDO
FRORQ\ RI DUFKDHDRQV PDJQHWRVRPHV PHODQRVRPHV DQG SRUSK\ULRQV 7KLV ZRXOG KDYH
UHDFKHGWKHHDUWKE\PHWHRULFDQGDVWHURLGDOKLWV7KHKLWVRIWKHPHWHRUVDQGDVWHURLGVZRXOG
KDYHRFFXUUHGILUVWLQWKH(XUDVLDQODQGPDVVHVSHFLDOO\LQWKHQRUWKHUQ6LEHULDQWXQGUD7KH
KRPRQHDQGHUWKDOLVZRXOGKDYHHYROYHGLQWKLV(XUDVLDQODQGPDVV$VWKH6LEHULDQ(XUDVLDQ
ODQGPDVV ZDV FROG DQG GDUN WKH KRPR QHDQGHUWKDOLV ZHUH GHSLJPHQWHG DQG IDLUFRORXUHG
KDLUOHVV ZLWK VSDUVH UHG KDLU 7KH\ ZHUH GHILFLHQW LQ PHODQLQ DQG PHODQLQ LQGXFHG HQHUJ\

WUDQVGXFWLRQ DQG SKRWRV\QWKHVLV OHDGLQJ WR V\QWKHVLV RI $73 7KH KRPR QHDQGHUWKDOLV ZDV
HQHUJ\ GHSULYHG DQG WKH QHDQGHUWKDOLF FRUWH[ ZDV SULPLWLYHO\ IRUPHG DQG WKH FHUHEHOOXP
GRPLQDWHGWKHLUFRJQLWLYHIXQFWLRQ7KHHQGRV\PELRWLFDUFKDHDOQHWZRUNLQWKHEUDLQZLWKLWV
PDJQHWRVRPHV PHODQRVRPHV DQG SRUSK\ULRQV IRUP D SULPLWLYH TXDQWDO FRPSXWLQJ V\VWHP
7KLV IXQFWLRQV DV DQ LQIRUPDWLRQ UHFHSWLYH DQG VWRUDJH V\VWHP LQ FRPPXQLFDWLRQ ZLWK WKH
H[WUDWHUUHVWULDO LQWHOOLJHQFH RI WKH TXDQWDO FRPSXWLQJ FORXG LQ WKH LQWHUJDODFWLF VSDFH 7KH
KRPRQHDQGHUWKDOLVRZLQJWRLWVODFNRIPHODQRVRPHVDQGLQQDWHLPPXQLW\EHFDPHUHODWLYHO\
VRFLHWLHV RI WKH 'UDYLGLDQV %DVTXH &HOWV +DUDSSDQV 6XPHULDQV DQG -HZV ZHUH IRVVLOLVHG
1HDQGHUWKDO7KHPHODQRVRPHV IXQFWLRQ DV WKH ILUVW OLQH RI GHIHQFH DJDLQVW LQIHFWLRQ DQG LV
GLIIHUHQW SDUWV RI WKH ZRUOG 7KH IRVVLOL]HG KRPR QHDQGHUWKDOLV DUH VXVFHSWLEOH WR LQFUHDVHG

7KHKRPRVDSLHQV




+RPRVDSLHQH[WLQFWXV

HYHQWXDOH[WLQFWLRQ

6\PELRWLFHYROXWLRQ
6\PELRVLV FDQ OHDG WR HYROXWLRQ RI WKH VSHFLHV 7KH H[WUDWHUUHVWULDO LQWHUJDODFWLF
TXDQWDO FRPSXWLQJ FORXG RI DUFKDHD IRUPV DQ LQWHOOLJHQW DQWKURSRPRUSKLF REVHUYHU 7KH
TXDQWDO FRPSXWLQJ FORXG RI DUFKDHD VHHGV WKH DUFKDHD LQWR WKH HDUWK WKURXJK PHWHRULF DQG
DVWHURLGDOLPSDFWV7KHDUFKDHDOFRORQLHVHYHQWXDOO\HYROYHLQWRPXOWLFHOOXODURUJDQLVPDQG
IXUWKHULQWRKRPRQHDQGHUWKDOLV7KHKRPRQHDQGHUWKDOLVFDQEHFRQFHLYHGDVDPXOWLFHOOXODU
DUFKDHDOFRORQ\7KHKRPRQHDQGHUWKDOLVWKXVDULVHVLQHDUWKLQWKH(XUDVLDQODQGPDVVRXWRI
WKHVHHGHGDUFKDHDOFRORQLHVIURPWKHH[WUDWHUUHVWULDOLQWHUJDODFWLFDUFKDHDOFRPSXWLQJFORXG
7KH KRPR QHDQGHUWKDOLV LV HQHUJ\ GHSOHWHG 7KH KRPR QHDQGHUWKDOLV VHFUHWHV WKH DUFKDHDO
VWHURLGDO WUHSKRQH GLJR[LQ ZKLFK PRGXODWHV WKH QHXWUDO DPLQR DFLG WUDQVSRUWHU LQFUHDVLQJ
WU\SWRSKDQWUDQVSRUWRYHUW\URVLQH7KHKRPRQHDQGHUWKDOLVLVW\URVLQHGHSOHWHGDQGGHILFLHQW
LQ PHODQLQ V\QWKHVLV 7KHUH LV QR PHODQLQ LQGXFHG $73 V\QWKHVLV IURP HOHFWURPDJQHWLF
ZDYHVDQGUDGLDWLRQWUDQVGXFWLRQ7KHKRPRQHDQGHUWKDOLVZDVHQHUJ\GHSOHWHGDQGWKHUHIRUH
GLGQRWKDYHWKHOX[XU\IRUWKHGHYHORSPHQWRIDPRGHUQKXPDQFHUHEUDOFRUWH[7KHKRPR
QHDQGHUWKDOLV LV DOVR UHWURYLUDO UHVLVWDQW 7KH KRPR QHDQGHUWKDOLV ZHUH GHILFLHQW LQ
HQGRJHQRXV UHWURYLUDO VHTXHQFHV FRQWULEXWLQJ WR D ULJLG DQG DG\QDPLF KRPR QHDQGHUWKDOLF
JHQRPH7KLVOHGWRDUHGXFWLRQLQV\QDSWLFFRQQHFWLYLW\DQGSRRUGHYHORSPHQWRIWKHKRPR
QHDQGHUWKDOLFFHUHEUDOFRUWH[7KHKRPRVDSLHQVHYROYHGRXWRIWHUUHVWULDOVRXUFHVLQ$IULFD
RXWRIVHOIUHSOLFDWLQJSRUSK\ULQFRPSOH[HV7KHVHOIUHSOLFDWLQJSRUSK\ULQFRPSOH[HVIRUPD
VFDIIROG IRU VXSUDPROHFXODU FRPSOH[HV RI LVRSUHQRLG RUJDQLVP 51$ YLURLGV '1$ YLURLGV
DQG SULRQV WR VHOI RUJDQL]H 7KH LVRSUHQRLG RUJDQLVP IRUPHG WKH FHOO FRQWDLQHU ZKLFK
V\PELRVHGWKH51$YLURLGVWKH'1$YLURLGVDQGSULRQVWRIRUPWKHSULPLWLYHHXNDU\RWLFDQG
SURNDU\RWLF FHOO 7KH HXNDU\RWLF RUJDQLVP GHYHORSHG LQWR PXOWLFHOOXODU FRORQLHV DQG
HYHQWXDOO\ HYROYHG LQWR KRPR VDSLHQV LQ $IULFD 7KXV WKH KRPR VDSLHQV LV D PXOWLFHOOXODU
HXNDU\RWLF FRORQ\ ZKLFK HYROYHG RYHU D SHULRG RI WLPH ,Q FDVH RI RQFRJHQHVLV WKH KRPR
VDSLHQV UHYHUWV WR WKH SULPLWLYH HXNDU\RWLF RU SURNDU\RWLF PXOWLFHOOXODU FRORQ\ VWDWH 7KH
KRPRVDSLHQVLQ$IULFDWKXVHYROYHGRXWRIWHUUHVWULDODELRJHQHWLFVRXUFHV7KHKRPRVDSLHQV
RZLQJ WR WKH KDUVK WURSLFDO HQYLURQPHQWDO RI $IULFD KDG LQFUHDVHG PHODQLQ SLJPHQWDWLRQ LQ
WKH VNLQ IRU SURWHFWLRQ IURP 89 UD\V DV DQ HYROXWLRQDU\ PHFKDQLVP DQG ZHUH EODFN 7KH
KRPRVDSLHQEUDLQHYROYHGRXWRIWKHHQHUJ\H[FHVVVWDWHSURGXFHGE\PHODQLQ0HODQLQFDQ
WUDQVGXFH HOHFWURPDJQHWLF ZDYHV DQG UDGLDWLRQ DQG SURGXFH $73 V\QWKHVLV 7KH H[FHVV
HQHUJ\LQKRPR VDSLHQV OHGWRWKHUDSLGHYROXWLRQRIWKHKXPDQ FHUHEUDO FRUWH[ 7KH KRPR
VDSLHQV DUH DOVR UHWURYLUDO VHQVLWLYH 7KH UHWURYLUDO LQIHFWLRQ OHG WR LQWHJUDWLRQ RI UHWURYLUDO
JHQHVLQWRWKHKRPRVDSLHQJHQRPHSURGXFLQJHQGRJHQRXVUHWURYLUDOVHTXHQFHVIXQFWLRQLQJ

DV MXPSLQJ JHQHV 7KH +(59 JHQH FRQWULEXWHV WR G\QDPLFLW\ DQG IOH[LELOLW\ RI WKH KRPR
VDSLHQ JHQRPH FRQWULEXWLQJ WR LQFUHDVHG V\QDSWLF FRQQHFWLYLW\ DQG IRUPDWLRQ RI WKH KXPDQ
FHUHEUDO FRUWH[ $ W\URVLQDVH PXWDWLRQ OHG WR WKH HYROXWLRQ RI KRPR VDSLHQ DOELQR PXWDQWV
7KHKRPRVDSLHQDOELQRPXWDQWVEHLQJZKLWHZHUHXQDEOHWRZLWKVWDQGWKHKRWFOLPDWHRIWKH
$IULFDQWURSLFVDQGPLJUDWHGWRWKHFROG(XURSHDQODQGPDVV7KLVFUHDWHGWKHKRPRVDSLHQ
FLYLOL]DWLRQLQ(XURSH7KHUHZDVLQWHUEUHHGLQJEHWZHHQWKHKRPRVDSLHQDOELQRPXWDQWVDQG
KRPR QHDQGHUWKDOLV LQ VRXWKHUQ (XURSH SURGXFLQJ K\EULGV 7KH KRPR QHDQGHUWKDOLV ZHUH
PDWULDUFKDO ZKLOH KRPR VDSLHQV DOELQR PXWDQWV ZHUH SDWULDUFKDO 7KH KRPR QHDQGHUWKDOLV
VXFFXPEHG WR FLYLOL]DWLRQDO GLVHDVHV OLNH PHWDEROLF V\QGURPH [ WXPRXUV DXWRLPPXQH
GLVHDVHDQGQHXURGHJHQHUDWLRQDQGEHFDPHH[WLQFWOHDYLQJIRVVLOLVHGPDWULOLQHDOVRFLHWLHVOLNH
WKH 'UDYLGLDQV &HOWV %DVTXHV DQG -HZV EHKLQG 7KH KRPR VDSLHQ DOELQR PXWDQWV LQ WKH
VHWWLQJRIJOREDOZDUPLQJGHYHORSHGH[WUHPRSKLOLFHQGRV\PELRWLFDUFKDHDOJURZWKDQGJHWV
FRQYHUWHGWRDKRPRQHRQHDQGHUWKDOLFVSHFLHVE\WKHSKHQRPHQDRIV\PELRWLFHYROXWLRQ7KH
KRPRVDSLHQVVSHFLHVLQ$IULFDEHFRPHVOLDEOHWRHYHQWXDOH[WLQFWLRQRZLQJWRLQIHFWLRQE\
FDWDVWURSKLF HSLGHPLFV RI 51$ YLUXVHV DULVLQJ IURP KRPR QHDQGHUWKDOLV DQG KRPR
QHRQHDQGHUWKDOLVUHVHUYRLUV(QGRV\PELRWLFDUFKDHDOJURZWKZLOOOHDGWRDVSHFLHVFKDQJHDQG
JHQHUDWLRQRIWZRQHZVSHFLHVKRPRVDSLHQH[WLQFWXVDQGKRPRQHRQHDQGHUWKDOLV'HDWKDQG
DJLQJ LQGLFDWHV KXPDQ HQGRJHQRXV DUFKDHDO RYHUJURZWK DQG WDNHRYHU 7KLV ZLOO OHDG WR
H[WLQFWLRQ RI WKH KXPDQ UDFH DV VXFK DQG SHUVLVWHQFH DV ZHOO DV VXUYLYDO RI WKH DUFKDHDRQ
FRORQ\RIPHODQRVRPHVPDJQHWRVRPHVDQGSRUSK\ULRQVIXQFWLRQLQJDVDTXDQWDOFRPSXWLQJ
FRORQ\DQGLQWHOOLJHQFH7KLVZLOOOHDGWRWKHWDNHRYHURIWKHZRUOGDQGWKHXQLYHUVHE\WKH
WHUUHVWULDODQGH[WUDWHUUHVWULDODUFKDHDRQTXDQWDOFRPSXWLQJFORXGV7KHV\PELRWLFHYROXWLRQ
ZLOO HYHQWXDOO\ OHDG WR H[WLQFWLRQ RI DOO KXPDQ VSHFLHV LQWR HWHUQDO DUFKDHDO FRORQLHV ZKLFK
FDQKDYHDZDYHSDUWLFOHH[LVWHQFH


QHRQHDQGHUWKDOLV

5HIHUHQFHV

&+$37(5
7+((1'26<0%,27,&$5&+$($$1'',(7$5<),%5(
+RORELRQWDQGKRORJHQRPHWKHUROHRIQXWULELRQWV
7KHKRPRQHDQGHUWKDOLFKRVWDQGWKHDUFKDHDOV\PELRQWWRJHWKHUIRUPWKHKRORELRQW
DQG IRUP D XQLW RI VHOHFWLRQ LQ HYROXWLRQ 7KH KRVW KRPR QHDQGHUWKDOLF JHQRPH DQG WKH
DUFKDHDOJHQRPHWRJHWKHUIRUPWKHKRORJHQRPH7KHUHTXLUHPHQWRIDUFKDHDIRUWKHHYROXWLRQ
RIKRPRQHDQGHUWKDOLVLQGLFDWHVWKDWIRUGHYHORSPHQWRIWKH1HDQGHUWKDOSKHQRW\SHDUFKDHD
DFWDVDQXWULELRQW7KHKRPRVDSLHQKRVWDQGWKHJXWPLFURELRWDHYROYHGRQDKLJKILEUHGLHW
DUHFDOOHGVLPLODUO\DKRORELRQWDQGWKHKRPRVDSLHQJHQRPHDQGWKHJXWPLFURELRWDJHQRPH
HYROYHGRQDKLJKILEUHGLHWLVFDOOHGWKHKRORJHQRPH7KHIHFDOPLFURELRWDRIHLWKHUVSHFLHV
DFWV DV D QXWULELRQW ,Q V\PELRWLF HYROXWLRQ DOWHULQJ WKH V\PELRQW DOWHUV WKH KRVW 7KLV LV
GHPRQVWUDWHG LQ WKH FDVH RI & HOHJDQV ZKHUH D PLFUREH IUHH GLHW SURGXFHV GHYHORSPHQWDO
UHWDUGDWLRQ LQIHUWLOLW\ DQG UHGXFHG OLIH VSDQ 7KH V\PELRQW DOWHUV WKH WUDQVFULSWRPH
PHWDERORQRPH OLIH VSDQ RI WKH KRVW 7KH IHUWLOLW\ RI WKH KRVW LV DOVR DOWHUHG E\ SURWR]RDO
SDUDVLWHVLQWKHJXWDVLQGLFDWHGE\WKHV\PELRQW$VFDULVOXPEULFRLGHV$VFDULVOXPEULFRLGHV
SURGXFHVLPPXQRVXSSUHVVLRQDQGLPPXQHHVFDSHLQFUHDVLQJWKHFKDQFHRIJHWWLQJSUHJQDQW
DQGSURGXFHVLQFUHDVHGIHUWLOLW\DQGLQFUHDVHLQQXPEHURIFKLOGUHQRIWKHKRVW7KHV\PELRQW
WR[RSODVPD FDQ PRGXODWH EUDLQ EHKDYLRXU E\ SURGXFLQJ LPSXOVLYH ULVN\ EHKDYLRXUDO WUDLWV
7KXV WKH KRORJHQRPH GHILQHV WKH VSHFLHV 7KH HQGRV\PELRWLF DUFKDHD LQGXFHG E\ WDNLQJ D
KLJK IDW KLJK SURWHLQ QRQYHJHWDULDQ GLHW GHILQHV KRPR QHDQGHUWKDOLV 7KH JXW PLFURELRWD
LQGXFHGE\WDNLQJDKLJKILEUHGLHWGHILQHVWKHKRPRVDSLHQVSHFLHV$UFKDHDOV\PELRVLVOHDGV
WRQHDQGHUWKDOLVDWLRQRIWKHVSHFLHV1HDQGHUWKDOLVDWLRQRIVSHFLHVFDQOHDGWRRULJLQDVZHOO
DVUHVLVWDQFHWRHPHUJLQJYLUDOLQIHFWLRQOLNH&RYLG
'LHWDU\ILEUHGHILFLHQF\HQGRV\PELRWLFDUFKDHDDQGKXPDQVSHFLHVHYROXWLRQ
'LHWDU\ILEUHGHILFLHQF\OHDGVWRLQFUHDVHGHQGRV\PELRWLFDVZHOODVFRORQLFDUFKDHDO
JURZWK7KHHQGRV\PELRWLFDUFKDHDUHJXODWHVKXPDQIXQFWLRQVDQGVSHFLHVW\SHDQGGHSHQGV

'LHWDU\ILEUHGHILFLHQF\HQGRV\PELRWLFDUFKDHDDQGRUJDQHOOHHYROXWLRQ
'LHWDU\ ILEUH GHILFLHQF\ LQGXFHV HQGRV\PELRWLF DUFKDHDO DQG 51$ YLURLGDO JURZWK
7KH SRUSK\ULQV IRUP D WHPSODWH IRU WKH IRUPDWLRQ RI 51$ YLURLGV '1$ YLURLGV SULRQV
DUFKDHD FDQ IXUWKHU LQGXFH +,) DOSKD DOGRVH UHGXFWDVH DQG IUXFWRO\VLV UHVXOWLQJ LQ IXUWKHU


'LHWDU\ILEUHGHILFLHQF\HQGRV\PELRWLFDUFKDHDDQGV\PELRWLFHYROXWLRQ
OHDGV WR KXPDQ GLVHDVH OLNH PHWDEROLF V\QGURPH [ QHXURGHJHQHUDWLRQV VFKL]RSKUHQLD DQG
QHDQGHUWKDOLVHG GLVHDVHG VWDWHV OLNH PHWDEROLF V\QGURPH [ QHXURGHJHQHUDWLRQV
QDWLRQDOLWLHV DQG WKH VSHFLHV LWVHOI LV GHWHUPLQHG E\ DUFKDHDO DQG RWKHU EDFWHULDO V\PELRVLV
7KHDUFKDHDOV\PELRVLVOHDGVWRWKHHYROXWLRQRIDQHZKXPDQ1HRQHDQGHUWKDOVSHFLHV7KLV
FDQEHFDOOHGDVWKH1HRQHDQGHUWKDODJHRU.DOL\XJD

'LHWDU\ILEUHGHILFLHQF\HQGRV\PELRWLFDUFKDHDFRORQLFDUFKDHDDQGKXPDQHYROXWLRQ
+DUDSSDQ'UDYLGLDQ VRFLHWLHV DQG WKH SDWULDUFKDO $U\DQ VRFLHW\ 7KH PDWULOLQHDO +DUDSSDQ
PHWDEROLF V\QGURPH [ QHXURGHJHQHUDWLRQ FDQFHU DXWLVP DQG VFKL]RSKUHQLD 7KH


KXPDQDQGDQLPDOHYROXWLRQ7KHFRORQLFDQGHQGRV\PELRWLFDUFKDHDDQGRWKHUPLFUREHVOLNH
FORVWULGLDOFOXVWHUVGHWHUPLQHWKHVSHFLHVUDFHFDVWHFRPPXQLW\DQGSHUVRQDOLGHQWLW\RIWKH
LQGLYLGXDO 7KH LGHQWLW\ RI WKH LQGLYLGXDO SHUVRQDO FRPPXQLW\ FDVWH UDFH QDWLRQDOLW\ DQG
VSHFLHV LV GHWHUPLQHG E\ WKH FRORQLF DQG HQGRV\PELRWLF DUFKDHDO DQG FORVWULGLDO FOXVWHUV
3UHGRPLQDQW DUFKDHDO V\PELRVLV SURGXFHV KRPR QHDQGHUWKDOLV DQG OHVV SURPLQHQW DUFKDHDO
V\PELRVLVDQGGRPLQDQWFORVWULGLDOFOXVWHUVLQWKHJXWSURGXFHVWKHKRPRVDSLHQVSHFLHV(DFK
LQGLYLGXDOUDFHQDWLRQDOLW\FDVWHFUHHGDQGFRPPXQLW\KDVWKHHQGRV\PELRWLFDQGFRORQLF
PLFURELRWDVLJQDWXUH7KLVFRORQLFDQGHQGRV\PELRWLFPLFURELRWDVLJQDWXUHLVWUDQVIHUDEOHE\
WKH FKDQJH RI HQGRV\PELRWLF DQG FRORQLF PLFURELRWD IURP RQH JURXS WR DQRWKHU 7KXV WKH
HYROXWLRQ DQG LGHQWLW\ EDVHG RQ LQGLYLGXDOLW\ UDFH QDWLRQDOLW\ FDVWH DQG FUHHG FDQ EH
LQGXFHG

'LHWDU\ ILEUH GHILFLHQF\ HQGRV\PELRWLF DUFKDHD 51$ YLURLGDO TXDVLVSHFLHV FRQVRUWLD
DQGVSHFLHVLGHQWLW\

DQGSURWHFWLRQZHVHHDYLURLGFRORQLVHGKRVWWKDWLVERWKV\PELRWLFDQGLQQRYDWLYHDFTXLULQJ
GLIIHUHQWLDWLQJ VHOI JURXSV DQG QRQVHOI JURXSV DOORZLQJ IRU TXDVLVSHFLHV WR SURPRWH WKH
LGHQWLW\VLQFHLGHQWLFDOEXWXQFRORQLVHGKRVWSRSXODWLRQUHPDLQVVXVFHSWLEOHWRDNLOOLQJDFWLRQ
IRUDGGLFWLRQSHUVLVWHQFHSURWHFWLRQ DQG O\WLFNLOOLQJ 9LURLGV FDQ IXQFWLRQ DV FRQVRUWLD DQ

HPHUJHQFH RI FRPPRQO\ VKDUHG FRGH XVH JURXSPHPEHUVKLSDQGFROOHFWLYHOLYLQJIXQFWLRQ

FRPSOH[ V\QDSWLF FRQQHFWLYLW\ LQ WKH KRPR VDSLHQV 7KLV OHDGV RQ WR D ORJLFDO
QDWLRQDO VH[XDO PHWDEROLF SKHQRW\SLF LPPXQH QHXURQDO SV\FKLDWULF SV\FKRORJLFDO
JHQRW\SLFDQGLQGLYLGXDOLGHQWLW\7KHDUFKDHDVHFUHWHVWKHWUHSKRQHGLJR[LQZKLFKFDQHGLW
WKH51$YLURLGVDQGJHQHUDWHQHZVHTXHQFHV$UFKDHDOGLSRODUPDJQHWLWHDQGSRUSK\ULQVLQ
WKHVHWWLQJRIGLJR[LQLQGXFHGPHPEUDQHVRGLXPSRWDVVLXP$73DVHLQKLELWLRQFDQSURGXFHD
SXPSHGSKRQRQV\VWHPPHGLDWHGTXDQWDOSHUFHSWLYHVWDWHDQGTXDQWDOFRPPXQLFDWLRQLQWKH
51$ YLURLGDO V\PELRWLF V\VWHP JHQHUDWLQJ QHZ VHTXHQFHV E\ VWHURLGDO GLJR[LQ HQ]\PDWLF

'LHWDU\ ILEUH GHILFLHQF\ HQGRV\PELRWLF DUFKDHD FRORQLF PLFURIORUD DQG FLYLOL]DWLRQDO
GLVHDVH±UHODWLRQWRHYROXWLRQ


'LHWDU\ILEUHGHILFLHQF\HQGRV\PELRWLFDUFKDHDDQGEUDLQHYROXWLRQ

'LHWDU\ILEUHGHILFLHQF\HQGRV\PELRWLFDUFKDHDIUXFWRVHPHWDEROLVPDQG1HDQGHUWKDO
PHWDERORQRPLFV

RUJDQHOOH FDOOHG WKH QHXURWUDQVPLQRLG 7KH IUXFWRO\WLF LQWHUPHGLDWHV JO\FHUDOGHK\GH
FKROHVWHURO &KROHVWHURO LV FDWDEROLVHG E\ DUFKDHDO FKROHVWHURO R[LGDVHV WR JHQHUDWH GLJR[LQ

JOXFXURQLF DFLG 'JOXFXURQLF DFLG LV FRQYHUWHG WR /JXORQDWH E\ HQ]\PH DOGRNHWR
UHGXFWDVHV /JXORQDWH LV FRQYHUWHG WR /JXORQRODFWRQH E\ ODFWRQDVH /JXORQRODFWRQH LV
FRQYHUWHG WR DVFRUELF DFLG E\ WKH DFWLRQ RI DUFKDHDO /JXOR R[LGDVH 7KH YLWDPLQ ( LV
V\QWKHVL]HG IURP VKLNLPDWH ZKLFK LV FRQYHUWHG WR W\URVLQH DQG WKHQ WR SDUDK\GUR[\ SKHQ\O
S\UXYLFDFLG3DUDK\GUR[\SKHQ\OS\UXYLFDFLGLVFRQYHUWHGWRKRPRJHQWLVDWH+RPRJHQWLVDWH
LV FRQYHUWHG WR PHWK\O SK\W\O EHQ]RTXLQRQH ZKLFK LV FRQYHUWHG WR DOSKD WRFRSKHURO
PHWK\OSK\W\OEHQ]RTXLQRQHLVFRQYHUWHGWRPHWK\OSK\W\OEHQ]RTXLQRQHDQGJDPPD

'LHWDU\ILEUHGHILFLHQF\HQGRV\PELRWLFDUFKDHDIUXFWRVLWLVDQGGLVHDVHVWDWHV
'LHWDU\ ILEUH GHILFLHQF\ LQGXFHV HQGRV\PELRWLF DUFKDHDO DQG 51$ YLURLGDO JURZWK
7KH HQGRV\PELRWLF DUFKDHD DQG WKH JHQHUDWHG 51$ YLURLGV LQGXFH DOGRVH UHGXFWDVH ZKLFK

JOXFRVH WR IUXFWRVH +\SR[LF VWUHVV RU DQDHURELF FRQGLWLRQV LQGXFHV +,) DOSKD ZKLFK
DFWLYDWHV NHWRKH[RNLQDVH & ZKLFK SKRVSKRU\ODWHV IUXFWRVH )UXFWRVH LV DFWHG XSRQ E\
IUXFWRNLQDVH ZKLFK FRQYHUWV IUXFWRVH WR IUXFWRVH SKRVSKDWH )UXFWRVH SKRVSKDWH LV
FRQYHUWHG WR GLK\GUR[\ DFHWRQH SKRVSKDWH DQG JO\FHUDOGHK\GH SKRVSKDWH ZKLFK LV
FRQYHUWHG WR S\UXYDWH DFHW\O &R$ DQG FLWUDWH &LWUDWH LV XVHG IRU OLSLG V\QWKHVLV )DW
GHSRVLWLRQ RFFXUV LQ WKH YLVFHUDO RUJDQV OLNH WKH OLYHU KHDUW DQG NLGQH\ 7KHUH LV QR
VXEFXWDQHRXV IDW GHSRVLW )UXFWRVH PHWDEROLVP E\SDVVHV SKRVSKRIUXFWRNLQDVH ZKLFK LV
LQKLELWHG E\ FLWUDWH DQG $73 )UXFWRVH PHWDEROLVP LV WKHUHIRUH QRW XQGHU WKH UHJXODWRU\
FRQWURO RI WKH HQ]\PH SKRVSKRIUXFWRNLQDVH )UXFWRVH WUDQVSRUW DQG PHWDEROLVP LV QRW
UHJXODWHGE\LQVXOLQ)UXFWRVHLVWUDQVSRUWHGE\*/87UHFHSWRU)UXFWRVHGRHVQRWLQFUHDVH
LQVXOLQ VHFUHWLRQ DQG WKHUHIRUH GRHV QRW DFWLYDWH OLSRSURWHLQ OLSDVH 7KLV UHVXOWV LQ YLVFHUDO
DGLSRJHQHLV )UXFWRVH LQGXFHV &K5(%3 DQG 65(%3 HOHPHQWV 7KLV UHVXOWV LQ LQFUHDVHG
KHSDWLF OLSRJHQHVLV E\ WKH LQGXFWLRQ RI WKH HQ]\PH IDWW\ DFLG V\QWKDVH DFHW\O &R$
FDUER[\ODVHDQGVWHDUR\O&R$GHVDWXUDFH7KLVLQFUHDVHVIDWW\DFLGVDQGFKROHVWHUROV\QWKHVLV
)UXFWRVHLVDOLSRSKLOLFFDUERK\GUDWH)UXFWRVHFDQEHFRQYHUWHGWRJO\FHUROSKRVSKDWHDQG
IDWW\ DFLGV LQYROYHG LQ WULJO\FHULGH V\QWKHVLV )UXFWRVH DGPLQLVWUDWLRQ OHDGV WR LQFUHDVH LQ
WULJO\FHULGHVDQG9/'/)UXFWRVHFRQVXPSWLRQOHDGVWRLQVXOLQUHVLVWDQFHIDWDFFXPXODWLRQ
LQYLVFHUDORUJDQVOLNHOLYHUKHDUWDQGNLGQH\LQVXOLQUHVLVWDQFHG\VOLSLGHPLDZLWKLQFUHDVHG
WULJO\FHULGHV9/'/DQG/'/DVZHOODVWKHPHWDEROLFV\QGURPH7KHPHWDEROLFV\QGURPH[
FDQEHFRQVLGHUHGDVDIUXFWRO\WLFV\QGURPH)UXFWRVHZLOOLQFUHDVHOLSLGVWRUDJHDQGSURPRWH
LQVXOLQUHVLVWDQFH)UXFWRVHFDQIUXFWRV\ODWHSURWHLQVSURGXFLQJG\VIXQFWLRQ)UXFWRVHKDVQR
HIIHFW XSRQ JKUHOLQ DQG OHSWLQ LQ WKH EUDLQ DQG FDQ OHDG WR LQFUHDVHG IHHGLQJ EHKDYLRXU
*OXFRVHGHFUHDVHVJKUHOLQDQGLQFUHDVHVOHSWLQOHYHOV7KLVOHDGVWRVXSSUHVVLRQRIDSSHWLWH
7KXVIUXFWRVHFDQPRGXODWHHDWLQJEHKDYLRXUOHDGLQJRQWRREHVLW\)UXFWRVHUHVXOWVLQ1).%
DFWLYDWLRQDQG71)DOSKDVHFUHWLRQ71)DOSKDFDQPRGXODWHWKHLQVXOLQUHFHSWRUSURGXFLQJ
LQVXOLQUHVLVWDQFHDQGPHWDEROLFV\QGURPH[)UXFWRVHFDQDOVROHDGWROHSWLQUHVLVWDQFHDQG
REHVLW\7KHUHLVDQHSLGHPLFRIPHWDEROLFV\QGURPH[LQUHODWLRQWRJOREDOZDUPLQJ

'LHWDU\ ILEUH GHILFLHQF\ HQGRV\PELRWLF DUFKDHD IUXFWRVH PHWDEROLVP G\VDXWRQRPLD
DQGFLYLOL]DWLRQDOGLVHDVH

DQDHURELFJO\FRO\VLVFRQVHTXHQWWRP\RFDUGLDOLQIDUFWLRQDQGK\SHUWHQVLYHK\SHUWURSK\RIWKH
IUXFWRVH PHWDEROLVP LV SULPDULO\ IRFXVHG LQ WKH OLYHU ,Q WKH VHWWLQJ RI DQDHURELF JO\FRO\VLV
SUHGRPLQDQW HQ]\PH LQ WKH KHDUW DQG EUDLQ ,Q WKH VHWWLQJ RI DQDHURELF JO\FRO\VLV
PHWDEROL]LQJIUXFWRVHE\WKHPHFKDQLVPRI51$VSOLFLQJ$QDHURELFFRQGLWLRQVFDQLQGXFH

'LHWDU\ ILEUH GHILFLHQF\ HQGRV\PELRWLF DUFKDHD IUXFWRVH PHWDEROLVP DQG LPPXQH
DFWLYDWLRQ

'LHWDU\ILEUHGHILFLHQF\HQGRV\PELRWLFDUFKDHDIUXFWRO\VLVDQGQHDQGHUWKDOLVDWLRQ


'LHWDU\ ILEUH GHILFLHQF\ HQGRV\PELRWLF DUFKDHD IUXFWRO\VLV DQG EUDLQ
QHDQGHUWKDOLVDWLRQ

LQWDNH SURGXFHV ]LQF GHSOHWLRQ OHDGLQJ WR GHIHFWLYH IRUPDWLRQ RI PHWDORWKLRQLQHV OHDGLQJ WR

'LHWDU\ ILEUH GHILFLHQF\ HQGRV\PELRWLF DUFKDHD FRQQHFWLYH WLVVXH PHWDEROLVP DQG
1HDQGHUWKDOPHWDERORQRPLFV

JO\FRVDPLQRJO\FDQV FDQ OHDG WR IDWW\ OLYHU 7KLV FDQ ODWHU OHDG RQWR FLUUKRVLV RI WKH OLYHU

'LHWDU\ ILEUH GHILFLHQF\ HQGRV\PELRWLF DUFKDHD DP\ORLGRJHQHVLV DQG
QHDQGHUWKDOLVDWLRQ
ULERQXFOHRSURWHLQV LVOHW DVVRFLDWHG DP\ORLG SRO\SHSWLGH DQG WXPRXU VXSSUHVVRU SURWHLQ FDQ
SURGXFLQJPRWRUQHXURQGLVHDVHPHWDEROLFV\QGURPH[GXHWRGHIHFWLYHLQVXOLQVHFUHWLRQDVD
UHVXOWRI,$33DQGDEQRUPDOSULRQOLNHWXPRXUVXSSUHVVRUSURWHLQSURGXFLQJWXPRXUV7KHVH
SULRQGLVHDVHVLQGXFHGE\DUFKDHDO51$YLURLGVDUHDOVRWUDQVPLVVLEOH7KXVJOREDOZDUPLQJ
UHODWHG IUXFWRO\VLV OHDGV WR DUFKDHDO LQGXFHG 51$ YLURLGDO PHGLDWHG SULRQ GLVHDVH DQG
DP\ORLGRVLV7KLVUDLVHVWKHVSHFWDFOHRID&DVVDQGUDV\QGURPHRIKXPDQH[WLQFWLRQ

'LHWDU\ ILEUH GHILFLHQF\ HQGRV\PELRWLF DUFKDHD IUXFWRVH PHWDEROLVP DQG KLEHUQDWRU\
V\QGURPH
LW LQWR JO\FHUDOGHK\GH SKRVSKDWH *O\FHUDOGHK\GH SKRVSKDWH FDQ EH IUXFWRO\VHG WR
S\UXYDWH JHQHUDWHG IURP JO\FHUDOGHK\GH SKRVSKDWH FDQ EH FRQYHUWHG WR WKH FLWUDWH ZKLFK
*O\FHUDOGHK\GH FDQ DOVR EH DFWHG XSRQ E\ WULRNLQDVH FRQYHUWLQJ LW LQWR JO\FHUDOGHK\GH
GRHVQ¶W QHHG LQVXOLQ IRU WUDQVSRUW LQWR WKH FHOO )UXFWRVH LV WUDQVSRUWHG E\ WKH IUXFWRVH
VLWH RI IUXFWRVH PHWDEROLVP ,Q WKH SUHVHQFH RI K\SR[LD DQG DQDHURELF VWDWHV WKHUH LV
LQGXFWLRQ RI +,) DOSKD ZKLFK FDQ LQGXFH NHWRKH[RNLQDVH & RU IUXFWRNLQDVH LQ WKH OLYHU
NLGQH\ JDVWURLQWHVWLQDO WUDFW EUDLQ DQG KHDUW )UXFWRVH SKRVSKDWH E\SDVVHV WKH HQ]\PH

$73DVHLQKLELWLRQ7KLVUHVXOWVLQUHGXFHGHQHUJ\QHHGVRIWKHFHOODVSHUFHQWRIWKH$73
PHPEUDQH $73DVH LQKLELWLRQ JHQHUDWHG KLEHUQDWRU\ VWDWH 7KH JO\FHUDOGHK\GH SKRVSKDWH
'LHWDU\ILEUHGHILFLHQF\HQGRV\PELRWLFDUFKDHDIUXFWRVHPHWDEROLVPGLJR[LQV\QWKHVLV
DQGQHDQGHUWKDOLVDWLRQ
;\OXORVHSKRVSKDWHDQGULERVHSKRVSKDWHLQWHUDFWWRSURGXFHJO\FHUDOGHK\GHSKRVSKDWH
DQGVHGRKHSWXORVHSKRVSKDWHZKLFKLVWKHQFRQYHUWHGWRIUXFWRVHSKRVSKDWHDQGHU\WKURVH
SKRVSKDWH7KHSHQWRVHSKRVSKDWHSDWKZD\JHQHUDWHVULERVHIRUQXFOHLFDFLGV\QWKHVLV7KH
SDWKZD\DOVRJHQHUDWHVKH[RVDPLQHVIRU*$*V\QWKHVLV7KHSHQWRVHSKRVSKDWHSDWKZD\DOVR
SURGXFHVGLJLWR[RVHDQGUKDPQRVHIRUGLJR[LQV\QWKHVLV

DOVRJHQHUDWHVJO\FHUDOGHK\GHSKRVSKDWHDQGIXUWKHUS\UXYDWH7KHS\UXYDWHFDQHQWHUWKH

'LHWDU\ ILEUH GHILFLHQF\ HQGRV\PELRWLF DUFKDHD IUXFWRO\VLV DQG ]RPELH V\QGURPH ±
UHODWLRQWRQHDQGHUWKDOLVDWLRQ
DUFKDHD7KHDUFKDHDFDQIXUWKHULQGXFH+,)DOSKDDOGRVHUHGXFWDVHDQGIUXFWRO\VLVUHVXOWLQJ
VWRUDJH 7KLV OHDGV RQWR D KLEHUQDWRU\ VWDWH DQG DUFKDHDO V\PELRVLV LQGXFHG VSHFLHV FKDQJH
IUXFWRO\VLVLVFDWDEROLVHGFKROHVWHUROR[LGDVHVIRUDUFKDHDOHQHUJHWLFV$UFKDHDDOVRGHULYHVLWV

7KLVOHDGVRQWRDIXQFWLRQDOIRUPRIFHUHEHOODUFRJQLWLRQDQGTXDQWDOSHUFHSWLRQUHVXOWLQJLQ
D QHZ EUDLQ SKHQRW\SH 7KH FHUHEHOODU FRJQLWLYH V\QGURPH OHDGV WR D URERWLF KXPDQ
SKHQRW\SH7KHSKHQRW\SHLVLPSXOVLYHKDVH[WUDVHQVRU\SHUFHSWLRQDQGKDVOHVVRIVSHHFK
SURGXFWLRQ &RPPXQLFDWLRQ LV E\ V\PEROLF DFWV 7KH FHUHEHOODU SKHQRW\SH GRHVQ¶W KDYH D
FRUWLFDO FRQWURO DQG FRQWULEXWHV WR VXUUHDOLVWLF EHKDYLRU SDWWHUQV 7KLV SURGXFHV LPSXOVLYH
EHKDYLRUDQGDQHSLGHPLFRIVXUUHDOLVPZKHUHWKHUDWLRQDOSUHIURQWDOFRUWH[EHFRPHVH[WLQFW
7KLVOHDGVWRH[WUHPHVRIVSLULWXDOLW\YLROHQWDQGWHUURULVWLFEHKDYLRUDQGK\SHUVH[XDOVWDWHV
FRQWULEXWLQJ WR D VWDWH RI WUDQVFHQGHQFH XQGHUOLQHG DQG UHLQIRUFHG E\ TXDQWDO SHUFHSWLRQ
&HUHEHOODUSKHQRW\SHRZLQJWRLWVTXDQWDOSHUFHSWLRQEHKDYHVDVDFRPPXQLW\DQGQRWDVDQ
LQGLYLGXDO 7KLV FUHDWHV QHZ VRFLDO DQG SV\FKRORJLFDO SKHQRW\SHV )UXFWRVH LQGXFHV 1).%
DQGLPPXQHDFWLYDWLRQ7KLVUHVXOWVLQDQLPPXQHDFWLYDWRU\SKHQRW\SH&XOWXUHG7UHJFHOOV
RQ KLJK IUXFWRVH GLHW KDYH SHU FHQW OHVV ,/ VHFUHWLRQ WKDQ FRQWUROV 7KLV UHVXOWV LQ D
K\SHULPPXQH VWDWH ZLWK IUXFWRV\ODWHG SURWHLQV DFWLQJ DV DQWLJHQV 7KH IUXFWRO\WLF SDWKZD\
FDQ OHDG WR LQFUHDVHG '1$ V\QWKHVLV DQG 51$ V\QWKHVLV GXH WR IOX[ YLD WKH SHQWRVH
SKRVSKDWHSDWKZD\7KHIUXFWRO\WLFSDWKZD\FDQEHGLUHFWHGWRWKH*$%$VKXQWJHQHUDWLQJ
VXFFLQ\O&R$DQGJO\FLQH7KHVHDUHVXEVWUDWHVIRUSRUSK\ULQWHPSODWHVWRIRUP51$YLURLGV
7KH DUFKDHDO LQGXFHG UHGR[ VWUHVV FDQ LQGXFH HQGRJHQRXV +(59 H[SUHVVLRQ DQG UHYHUVH
WUDQVFULSWDVH H[SUHVVLRQ 7KH 51$ YLURLGV DUH FRQYHUWHG E\ +(59 UHYHUVH WUDQVFULSWDVH WR
FRUUHVSRQGLQJ'1$DQGLQWHJUDWHGLQWRWKHJHQRPHE\+(59LQWHJUDVH7KHLQWHJUDWHG51$
YLURLGUHODWHG'1$FDQIXQFWLRQDVMXPSLQJJHQHVSURGXFLQJJHQRPLFSODVWLFLW\DQGJHQRPLF
FKDQJH7KLVSURGXFHVDQHZJHQRW\SH)UXFWRV\ODWLRQRIERG\SURWHLQVDQGHQ]\PHVUHVXOWV
LQDSURWHLQSURFHVVLQJGHIHFWUHVXOWLQJLQORVVRISURWHLQIXQFWLRQ7KHKXPDQFHOOIXQFWLRQ
GXH WR SURWHLQ IUXFWRV\ODWLRQ SURWHLQ SURFHVVLQJ GHIHFWV DQG SURWHLQ FRQIRUPDWLRQDO GHIHFWV
FRPHV WR D JULQGLQJ KDOW )UXFWRO\WLF SDWKZD\ JHQHUDWHV SRUSK\ULQ DUUD\V LQGXFHG $73
SURGXFWLRQ PHPEUDQH VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ LQGXFHG $73 V\QWKHVLV DQG
IUXFWRO\VLV LQGXFHG $73 JHQHUDWLRQ 7KLV SURYLGHV HQHUJ\ IRU SRUSK\ULQ WHPSODWH LQGXFHG

DUFKDHDO UHSOLFDWLRQ 7KH GLJR[LQ DQG IUXFWRVH SKRVSKRU\ODWLRQ LQGXFHG $73 GHSOHWLRQ
SURGXFHV FHOO PHPEUDQH VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ DQG D KLEHUQDWRU\ VWDWH 7KLV
OHDGV RQWR D VRPQROHQW VOHHS\ VWDWH 7KH FKROHVWHURO FDWDEROLVP E\ FKROHVWHURO R[LGDVHV IRU
DUFKDHDO HQHUJHWLFV OHDGV WR GHIHFWLYH VH[ KRUPRQH V\QWKHVLV 7KLV OHDGV RQWR DQ DVH[XDO
DQGURJ\QRXV VWDWH 7KH FHUHEHOODU FRJQLWLYH V\QGURPH GXH WR SUHIURQWDO FRUWLFDO DWURSK\
FRQVHTXHQW WR SRUSK\ULRQ LQGXFHG ORZ OHYHO (0) SHUFHSWLRQ SURGXFHV D K\SHUVH[XDO VWDWH
7KLVUHVXOWVLQPDOHIHPDOHHTXLGRPLQDQFHDQGFKDQJHVLQVH[XDOEHKDYLRURIWKHSRSXODWLRQ
7KXVWKHIUXFWRVHGLVHDVHFRQVHTXHQWWRJOREDOZDUPLQJUHVXOWVLQDQHZQHXURQDOLPPXQH
PHWDEROLF VH[XDO DQG VRFLDO SKHQRW\SH 7KH KXPDQ ERG\ LV FRQYHUWHG WR D ]RPELH IRU WKH
JOREDOZDUPLQJUHODWHGHQGRV\PELRWLFDUFKDHDWRWKULYH7KHQHXURQDOPHWDEROLFVH[XDODQG
VRFLDO SKHQRW\SH FUHDWHV WKH QHFHVVDU\ HQYLURQPHQW HQGRV\PELRWLF DUFKDHDO PXOWLSOLFDWLRQ
DQGWKHKXPDQERG\LVFRQYHUWHGWRD]RPELHSKHQRW\SH7KLVFDQEHFDOOHGDVDKLEHUQDWRU\
]RPELH V\QGURPH 'XH WR WKH QHZ VH[XDO DQG VRFLDO SKHQRW\SH ZLWK DVH[XDOLW\ DQG
K\SHUVH[XDOLW\ DQG IHPDOHPDOH HTXLGRPLQDQFH WKH KXPDQ SRSXODWLRQ IDOOV 7KH JOREDO
ZDUPLQJ DQG DUFKDHDO LQGXFWLRQ RI +,) DOSKD UHVXOWLQJ LQ WKH :DUEXUJ SKHQRW\SH OHDGV WR
FKDQJHV LQ WKH PHWDEROLF VFKHPH RI WKH FHOOV SURGXFLQJ ERG\ FHOO WUDQVIRUPDWLRQ WR VWHP
FHOOV 7KH VWHP FHOOV GHSHQG XSRQ JO\FRO\VLV RU IUXFWRO\VLV IRU HQHUJ\ QHHGV 7KH :DUEXUJ
SKHQRW\SHSURGXFHVDQDFLGLFS+ZKLFKFDQUHVXOWLQFRQYHUVLRQRIERG\FHOOVWRVWHPFHOOV
7KH VWHP FHOOV FRQYHUVLRQ UHVXOWV LQ ORVV RI WLVVXH IXQFWLRQ 7KH FHUHEUDO FRUWH[ V\QDSWLF
FRQQHFWLYLW\ LV ORVW DQG EHFRPHV G\VIXQFWLRQ OHDGLQJ WR VXEFRUWLFDO FHUHEHOODU GRPLQDQFH
7KHLPPXQHVWHPFHOOVSUROLIHUDWHSURGXFLQJDQDXWRLPPXQHGLVHDVH7KHYDULRXVWLVVXHFHOOV
WKH VSHFLDOL]HG IXQFWLRQ OLNH QHXURQ QHSKURQ DQG PXVFOH FHOO DOO EHFDXVH RI VWHP FHOO
FRQYHUVLRQEHFRPHVG\VIXQFWLRQDO7KLVSURGXFHVDVWHPFHOOV\QGURPHZLWKKXPDQVRPDWLF
FHOOVEHLQJFRQYHUWHGWRVWHPFHOOVZLWKORVVRIIXQFWLRQDQGXQFRQWUROOHGSUROLIHUDWLRQ7KH
IUXFWRV\ODWLRQ RI SURWHLQV UHVXOWV LQ SURWHLQ IXQFWLRQ GHIHFWV 7KH IUXFWRV\ODWLRQ RI /'/
UHVXOWV LQ GHIHFWLYH FKROHVWHURO WUDQVSRUW WR WKH FHOOV 7KLV UHVXOWV LQ VWHURLGDO KRUPRQH
V\QWKHVLVGHIHFWV&KROHVWHUROLVUHTXLUHGIRUIRUPDWLRQRIV\QDSWLFFRQQHFWLYLW\DQGWKLVOHDGV
WRFHUHEUDOFRUWLFDOG\VIXQFWLRQ7KHKHPRJORELQEHFRPHVIUXFWRV\ODWHGDQGR[\JHQWUDQVSRUW
LV DIIHFWHG 7KLV OHDGV WR K\SR[LD DQG DQDHURELF VWDWHV 7KH K\SR[LD DQG DQDHURELF VWDWHV
LQGXFHV+,)DOSKDDQGWKH:DUEXUJIUXFWRO\WLFSKHQRW\SH7KH+,)DOSKDDOVRLQGXFHVDOGRVH
UHGXFWDVHFRQYHUWLQJJOXFRVHWRIUXFWRVHDQGLQGXFLQJWKHIUXFWRO\WLFVFKHPH7KHIUXFWRO\VLV
LQGXFHG*$%$VKXQWSDWKZD\DQGSRUSK\ULQV\QWKHVLVUHVXOWVLQIXUWKHUDUFKDHDOSRUSK\ULQ
WHPSODWH UHODWHG UHSOLFDWLRQ 7KLV UHVXOWV LQ IXUWKHU DUFKDHDO LQGXFHG IUXFWRO\VLV DQG WKH
YLFLRXVLUUHYHUVLEOHF\FOHSURFHHGV7KHXQFRQWUROOHGJURZWKRIDUFKDHDOHDGVWRVWLOOIXUWKHU

JOREDOZDUPLQJ7KHZRUOGRIHQGRV\PELRWLFHWHUQDODUFKDHDWDNHVRYHUDQGSHUVLVWVGXULQJ
WKH H[WUHPRSKLOLF FOLPDWLF FKDQJHV RI JOREDO ZDUPLQJ 7KH KXPDQ EHLQJV H[LVW DV
QHDQGHUWKDOLF]RPELHVVHUYLQJDUFKDHDOPXOWLSOLFDWLRQ7KHKRPRVDSLHQVJHWFRQYHUWHGWRD
QHZSKHQRW\SHJHQRW\SHLPPXQRW\SHPHWDERORQRPLFW\SHDQGEUDLQW\SH7KLVLVFDOOHGDV
KLEHUQDWRU\]RPELHUHODWHGWRJOREDOZDUPLQJKRPRQHRQHDQGHUWKDOLV
7DEOH)UXFWRVHPHWDEROLVPDQGQHDQGHUWKDOLVDWLRQ
6HUXP
*URXS IUXFWRNLQDVH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6\;
&$'
&9$
'&0(0)
7XPRXU
6FKL]R
$XWLVP
$'
3'
06
/XSXV
&5)
,/'
&23'
%$
&LUUKRVLV
,%'
0$2
,%6
38'
(0)
&&3
01*
0XF$1*
'%-'
6SRQG\ORVLV
)YDOXH
SYDOXH

7DEOH1XFOHRWLGHFDWDEROLVPDQGQHDQGHUWKDOLVDWLRQ
6HUXP$73
*URXS OHYHOV
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6\;
&$'
&9$
'&0(0)
7XPRXU
6FKL]R
$XWLVP
$'
3'
06
/XSXV
&5)
,/'
&23'
%$
&LUUKRVLV
,%'
0$2
,%6
38'
(0)
&&3
01*
0XF$1*
'%-'
6SRQG\ORVLV
)YDOXH
SYDOXH

7DEOH$QWLJO\FRO\WLFDQWLERGLHVDQGQHDQGHUWKDOLVDWLRQ
$QWL
*URXS S\UXYDWHNLQDVH
0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6\;
&$'
&9$
'&0(0)
7XPRXU
6FKL]R
$XWLVP
$'
3'
06
/XSXV
&5)
,/'
&23'
%$
&LUUKRVLV
,%'
0$2
,%6
38'
(0)
&&3
01*
0XF$1*
'%-'
6SRQG\ORVLV
)YDOXH
SYDOXH

5HIHUHQFHV
.XUXS 5. .XUXS 3$ *OREDO :DUPLQJ $UFKDHD DQG 9LURLG ,QGXFHG 6\PELRWLF
+XPDQ(YROXWLRQDQGWKH)UXFWRVRLG2UJDQHOOH1HZ<RUN2SHQ6FLHQFH

&+$37(5
7+(',(7$5<),%5(63(&,(6(92/87,21$1'1(852,00812
*(120,&(1'2&5,1(,17(*5$7,21±7+(+2/2%,217$1'
+2/2*(120(±1875,%,21702'8/$7,21±02'8/$7,212)
$5&+$($/6<0%,26,6

'LHWDU\ILEUHGHILFLHQF\OHDGVWRLQFUHDVHGHQGRV\PELRWLFDVZHOODVFRORQLFDUFKDHDO
JURZWK'LHWDU\ILEUHFDQDIIHFWERG\DQGFHOOIXQFWLRQ7KHRULJLQDOHYLGHQFHOLQNLQJGLHWDU\
FRQWULEXWHV WR WKH JHQHVLV RI PHWDEROLF V\QGURPH [ 'LHWDU\ ILEUH GHILFLHQF\ SURGXFHV
GHWHUPLQHV V\PELRVLV DQG V\PELRWLF HYROXWLRQ $UFKDHDO V\PELRVLV OHDGV WR
QHDQGHUWKDOLVDWLRQRIWKHVSHFLHV1HDQGHUWKDOLVDWLRQRIVSHFLHVFDQOHDGWRRULJLQDVZHOODV
UHVLVWDQFHWRHPHUJLQJYLUDOLQIHFWLRQOLNH&RYLG

JHQRPLFWUDQVPLVVLRQ
EUDLQ DQG SURGXFHV QHXURSURWHFWLRQ 7KXV D KLJK ILEUH GLHW SURWHFWV DJDLQVW FLYLOL]DWLRQDO
HQGRFULQHV\VWHP
DUFKDHDO JURZWK OHDGLQJ RQ WR KRPR VDSLHQLVDWLRQ RI WKH VSHFLHV $ KLJK ILEUH GLHW OHDGV WR

7KHKRPRQHDQGHUWKDOLFKRVWDQGWKHDUFKDHDOV\PELRQWWRJHWKHUIRUPWKHKRORELRQW
DQG IRUP D XQLW RI VHOHFWLRQ LQ HYROXWLRQ 7KH KRVW KRPR QHDQGHUWKDOLF JHQRPH DQG WKH
DUFKDHDOJHQRPHWRJHWKHUIRUPWKHKRORJHQRPH7KHUHTXLUHPHQWRIDUFKDHDIRUWKHHYROXWLRQ
RIKRPRQHDQGHUWKDOLVLQGLFDWHVWKDWIRUGHYHORSPHQWRIWKH1HDQGHUWKDOSKHQRW\SHDUFKDHD
DFWDVDQXWULELRQW7KHKRPRVDSLHQKRVWDQGWKHJXWPLURELRWDHYROYHGRQDKLJKILEUHGLHW
DUHFDOOHGVLPLODUO\DKRORELRQWDQGWKHKRPRVDSLHQJHQRPHDQGWKHJXWPLFURELRWDJHQRPH
HYROYHGRQDKLJKILEUHGLHWLVFDOOHGWKHKRORJHQRPH7KHIHFDOPLFURELRWDRIHLWKHUVSHFLHV
DFWV DV D QXWULELRQW ,Q V\PELRWLF HYROXWLRQ DOWHULQJ WKH V\PELRQW DOWHUV WKH KRVW 7KLV LV
GHPRQVWUDWHG LQ WKH FDVH RI & HOHJDQV ZKHUH D PLFUREH IUHH GLHW SURGXFHV GHYHORSPHQWDO
UHWDUGDWLRQ LQIHUWLOLW\ DQG UHGXFHG OLIH VSDQ 7KH V\PELRQW DOWHUV WKH WUDQVFULSWRPH
PHWDERORQRPH OLIH VSDQ RI WKH KRVW 7KH IHUWLOLW\ RI WKH KRVW LV DOVR DOWHUHG E\ SURWR]RDO
SDUDVLWHVLQWKHJXWDVLQGLFDWHGE\WKHV\PELRQW$VFDULVOXPEULFRLGHV$VFDULVOXPEULFRLGHV
SURGXFHVLPPXQRVXSSUHVVLRQDQGLPPXQHHVFDSHLQFUHDVLQJWKHFKDQFHRIJHWWLQJSUHJQDQW
DQGSURGXFHVLQFUHDVHGIHUWLOLW\DQGLQFUHDVHLQQXPEHURIFKLOGUHQRIWKHKRVW7KHV\PELRQW
WR[RSODVPD FDQ PRGXODWH EUDLQ EHKDYLRXU E\ SURGXFLQJ LPSXOVLYH ULVN\ EHKDYLRXUDO WUDLWV
7KXV WKH KRORJHQRPH GHILQHV WKH VSHFLHV 7KH HQGRV\PELRWLF DUFKDHD LQGXFHG E\ WDNLQJ D
KLJK IDW KLJK SURWHLQ QRQYHJHWDULDQ GLHW GHILQHV KRPR QHDQGHUWKDOLV 7KH JXW PLFURELRWD
LQGXFHGE\WDNLQJDKLJKILEUHGLHWGHILQHVWKHKRPRVDSLHQVSHFLHV
*URXSV )LEUHFRQWHQWRIGLHW

1RUPDO +LJKILEUH
6FKL]RSKUHQLD /RZILEUH
$XWLVP /RZILEUH
5HIHUHQFHV
3KDVHROXV PXQJREODFNJUDPHIIHFWRQOLSLGPHWDEROLVP,QGLDQ-%LRFKHP%LRSK\V

3KDVHROXV PXQJR EODFN JUDP (IIHFW RQ JO\FRVDPLQRJO\FDQV OLSLGV DQG OLSRSURWHLQ OLSDVH
DFWLYLW\LQQRUPDOUDWV$WKHURVFOHURVLV
0ROO\7KRPDV/HHODPPD6DQG.XUXS3$1HXWUDOGHWHUJHQWILEUHIURPYDULRXVIRRGV
DQGLWVK\SRFKROHVWHUROLFDFWLRQLQUDWV-)RRG6FL7HFKQRO
0ROO\ 7KRPDV /HHODPPD 6 DQG .XUXS 3$ (IIHFW RI EODFN JUDP ILEHU 3KDVHROXV
PXQJR RQ KHSDWLF K\GUR[\PHWK\O JOXWDU\O&R$ UHGXFWDVH DFWLYLW\ FKROHVWHURJHQHVLV DQG
FKROHVWHUROGHJUDGDWLRQLQUDWV-1XWULWLRQ
0ROO\ 7KRPDV /HHODPPD 6 DQG .XUXS 3$ (IIHFW RI EODFN JUDP ILEUH 3KDVHROXV
9LMD\DJRSDO3'HYL.6DQG.XUXS3$)LEUHFRQWHQWRIGLIIHUHQWGLHWDU\VWDUFKHVDQG
WKHLUHIIHFWRQOLSLGOHYHOVLQKLJKIDWKLJKFKROHVWHUROGLHWIHGUDWV$WKHURVFOHURVLV

&+$37(5
(1'26<0%,27,&$5&+$($/51$9,52,'6$1'(0(5*,1*9,5$/
3$1'(0,&6

7KH HQGRV\PELRWLF DQG FRORQLF KXPDQ DUFKDHD VHFUHWH 51$ DQG '1$ YLUXVHV DQG
VHUYHVDVDUHVHUYRLUIRUWKHP9LUXVHVEHORQJLQJWRWKHSR[IDPLO\DQG$IULFDQVZLQHIHYHU
KDYH EHHQ GHVFULEHG LQ DUFKDHD 7KH DUFKDHDO YLURLGV VHFUHWH HQYHORSHG YLUXVHV OLNH WKH
6$560(56FRURQDDQG+,97KHDUFKDHDOYLUXVVHFUHWLRQSURFHVVLVWKHVDPHDVWKDWRI
HQYHORSHG YLUXVHV OLNH 6$56 0(56 DQG &RURQD 7KH EDWV VHUYH DV D UHVHUYRLU IRU WKH
YLUXVHV OLNH 6$56 0(56 DQG &RURQD 7KH EDWV FRQWDLQ DUFKDHD ZKLFK FDQ VHFUHWH 51$
YLURLGV DQG JHQHUDWH YLUXVHV 7KH FRORQLF DQG HQGRV\PELRWLF DUFKDHD DOVR JHQHUDWHV 51$
YLURLGVZKLFKDUHFRQYHUWHGWR'1$YLURLGVE\FRORQLFHSLWKHOLDO+(59UHYHUVHWUDQVFULSWDVH
DQGJHWVLQWHJUDWHGLQWRWKHFRORQLFJHQRPH7KH51$DQG'1$YLURLGVK\EULGLVHZLWKWKH




DUFKDHDLVSRVWXODWHG

0DWHULDOVDQG0HWKRGV
GRQHE\$129$

5HVXOWV
DW]HURWLPH

0XUDPLFDFLG
FKDQJH
*URXS 'HFUHDVHZLWK
'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'1$FKDQJH 51$FKDQJH
'1$FKDQJH 51$FKDQJH
'R[\&LSUR 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

+0*&R$5 +0*&R$5
$73V\QWKDVH
'HFUHDVHZLWK
'R[\&LSUR
5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH
%LOH$FLGVFKDQJH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

3\UXYDWHFKDQJH
'HFUHDVHZLWK
'R[\&LSUR
5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH
DFLG
+2 $/$ $/$

+2
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

3$+ 3$+ +7FKDQJH
+7FKDQJH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'LVFXVVLRQ

JHQRPH


GLVHDVH
5HIHUHQFHV
3ODQW'LVHDVH

3ODQW3DWKRORJ\
(XU-%LRFKHP
&KHP
9DQ1R6WUDQG
3XEOLVKHUV
3UHVV
±
86$
%LRFKHPLFDO6FLHQFHV

0LFURELRO

0RO%LRO5HY±
%0&%LRORJ\


&+$37(5
7+(+80$1(1'26<0%,27,&$5&+$($/51$9,52,'48$6,63(&,(6
&216257,$1(:9,586(6$1'62&,2(&2120,&32/,7,&$/+,6725<

FRQVRUWLD
QHXURQDO FHOOV ZKHQ LQIHFWHG E\ WKH DOJDO YLUXV SURGXFHV FKDQJHV LQ PHPRU\ YLVXRVSDWLDO
SURFHVVDQGDWWHQWLRQDIIHFWLQJFRJQLWLYHIXQFWLRQ

7KH YLUDO HSLGHPLFV KDYH WKXV FRQWULEXWHG WR KXPDQ HYROXWLRQ 9LUXV DQG EDFWHULDO
DOVR FRQWULEXWH WR VFKL]RSKUHQLD 9LUDO HSLGHPLFV WKXV FRQWULEXWH WR SRSXODWLRQ LGHQWLW\ DQG

5HIHUHQFHV


&+$37(5
7+(',(7$5<),%5(63(&,(6(92/87,21$1'1(852,00812
*(120,&(1'2&5,1(,17(*5$7,21

'LHWDU\ILEUHFDQDIIHFWERG\DQGFHOOIXQFWLRQ7KHRULJLQDOHYLGHQFHOLQNLQJGLHWDU\
FRQWULEXWHV WR WKH JHQHVLV RI PHWDEROLF V\QGURPH ; 'LHWDU\ ILEUH GHILFLHQF\ SURGXFHV
GHWHUPLQHVV\PELRVLVDQGV\PELRWLFHYROXWLRQ
'LHWDU\ ILEUH GHILFLHQF\ FDQ OHDG WR LQFUHDVHG HQGRV\PELRWLF DV ZHOO DV FRORQLF
DUFKDHDO JURZWK OHDGLQJ WR UHFXUUHQW 51$ YLUDO HSLGHPLFV 7KH HQGRV\PELRWLF DUFKDHD
UHJXODWHV KXPDQ IXQFWLRQV DQG VSHFLHV W\SH DQG GHSHQGV XSRQ WKH FRORQLF DUFKDHD ZKRVH
GHQVLW\ LV GHWHUPLQHG E\ WKH ILEUH LQWDNH 7KH FRORQLF DUFKDHDO SRSXODWLRQ GHQVLW\ GHSHQGV
XSRQ GLHWDU\ ILEUH LQWDNH 3RSXODWLRQV ZLWK ORZ ILEUH LQWDNH KDYH OHVVHU GHQVLW\ RI FRORQLF
DUFKDHDO PLFURIORUD DQG HQGRV\PELRWLF DUFKDHD (QGRV\PELRWLF DUFKDHD FRQWULEXWHV WR
QHDQGHUWKDOLVDWLRQRIWKHVSHFLHV3RSXODWLRQVFRQVXPLQJDKLJKVDWXUDWHGIDWDQGSURWHLQGLHW
ZLWK ORZ ILEUH LQWDNH WHQG WR JHW LQFUHDVHG HQGRV\PELRWLF DUFKDHDO JURZWK DQG DUH
QHDQGHUWKDOLVHG 3RSXODWLRQV ZLWK KLJK ILEUH LQWDNH XS WR JGD\ WHQG WR KDYH UHGXFHG
DUFKDHDO GHQVLW\ LQ WKH FRORQ DQG UHGXFHG DUFKDHDO HQGRV\PELRVLV FRQWULEXWLQJ WR KRPR
VDSLHQLVDWLRQ RI WKH SRSXODWLRQ 7KXV ILEUH LQWDNH UHJXODWHV WKH HQGRV\PELRWLF DUFKDHDO
GHQVLW\DQGW\SHRIKXPDQVSHFLHV

JHQRPLFWUDQVPLVVLRQ
EUDLQ DQG SURGXFHV QHXURSURWHFWLRQ 7KXV D KLJK ILEUH GLHW SURWHFWV DJDLQVW FLYLOLVDWLRQDO
HQGRFULQHV\VWHP
DUFKDHDO JURZWK OHDGLQJ RQWR KRPR VDSLHQLVDWLRQ RI WKH VSHFLHV $ KLJK ILEUH GLHW OHDGV WR

7DEOH
1RUPDO +LJKILEUH
5HWURYLUDOLQIHFWLRQ /RZILEUH
5HFXUUHQW51$YLUDO
/RZILEUH
LQIHFWLRQ

5HIHUHQFHV
0HQRQ 39 DQG .XUXS 3$ +\SROLSLGDHPLF DFWLRQ RI WKHSRO\VDFFKDULGH IURP
3KDVHROXV PXQJR EODFN JUDP HIIHFW RQ OLSLG PHWDEROLVP ,QGLDQ - %LRFKHP
%LRSK\V
0HQRQ 39 DQG .XUXS 3$ +\SROLSLGDHPLF DFWLRQ RI WKHSRO\VDFFKDULGH IURP
3KDVHROXVPXQJREODFNJUDP(IIHFWRQJO\FRVDPLQRJO\FDQVOLSLGVDQGOLSRSURWHLQ
OLSDVHDFWLYLW\LQQRUPDOUDWV$WKHURVFOHURVLV
0ROO\ 7KRPDV /HHODPPD 6 DQG .XUXS 3$ 1HXWUDO GHWHUJHQW ILEUH IURP
YDULRXVIRRGVDQGLWVK\SRFKROHVWHUROLFDFWLRQLQUDWV-)RRG6FL7HFKQRO
0ROO\ 7KRPDV /HHODPPD 6 DQG .XUXS 3$ (IIHFW RI EODFN JUDP ILEHU
3KDVHROXV PXQJR RQ KHSDWLF K\GUR[\PHWK\O JOXWDU\O&R$ UHGXFWDVH DFWLYLW\
FKROHVWHURJHQHVLVDQGFKROHVWHUROGHJUDGDWLRQLQUDWV-1XWULWLRQ
0ROO\7KRPDV/HHODPPD6DQG.XUXS3$(IIHFWRIEODFNJUDPILEUH3KDVHROXV
9LMD\DJRSDO 3 'HYL .6 DQG .XUXS 3$ )LEUH FRQWHQW RI GLIIHUHQW GLHWDU\
VWDUFKHV DQG WKHLU HIIHFW RQ OLSLG OHYHOV LQ KLJKIDWKLJKFKROHVWHURO GLHW IHG UDWV
$WKHURVFOHURVLV

&+$37(5
&/,0$7(&+$1*($1'(3,'(0,&67+(25,*,12)5(7529,5$/
5(6,67$1&($1'(0(5*,1*9,5$/3$1'(0,&6±7+(&5266,1*2)
63(&,(6%$55,(5$1'1(:9,586(6
,QWURGXFWLRQ
6WXGLHV IURPRXUODERUDWRU\KDYHVKRZQWKDWJOREDOZDUPLQJDQGWKHORZOHYHO(0)
SROOXWLRQ UHVXOWV LQ LQFUHDVHG HQGRV\PELRWLF DUFKDHDO JURZWK 7KH DUFKDHD FDQ SURGXFH
PHWKDQRJHQHVLVIURPK\GURJHQDQGFDUERQGLR[LGHDVZHOODVIURPDFHWDWH7KHKXPDQERG\
PHWKDQRJHQHVLVFDQUHVXOWLQPRUHJOREDOZDUPLQJ0HWKDQHKDVJRWDVKRUWWHUPDFWLRQEXW
LWV JOREDO ZDUPLQJ SRWHQWLDO LV WLPHV WKDW RI FDUERQ GLR[LGH 7KXV WKH KXPDQ
HQGRV\PELRWLF DUFKDHDO RYHUJURZWK LV WKH SULQFLSDO FDXVH RI JOREDO ZDUPLQJ *OREDO
ZDUPLQJLVLQLWLDOO\WULJJHUHGE\FDUERQGLR[LGHDQG(0)SROOXWLRQSURGXFHGE\KRPRVDSLHQ
LQGXVWULDOL]DWLRQ ,W LV FDUULHG IRUZDUG E\ KXPDQ HQGRV\PELRWLF DUFKDHDO RYHUJURZWK DQG
PHWKDQRJHQHVLV7KHDUFKDHDFDQLQGXFHVWHPFHOOFRQYHUVLRQDQGQHDQGHUWKDOLVDWLRQRIWKH
KXPDQ VSHFLHV 7KH DUFKDHD FDWDEROLVHV FKROHVWHURO JHQHUDWLQJ GLJR[LQ ZKLFK FDQ PRGXODWH
51$ HGLWLQJ DQG PDJQHVLXP GHILFLHQF\ UHVXOWLQJ LQ UHYHUVH WUDQVFULSWDVH LQKLELWLRQ 7KH
DUFKDHDOFKROHVWHUROFDWDEROLVPFDQGHSOHWHWKHPHPEUDQHUDIWVRIWKH&'FHOORIFKROHVWHURO

HYHQWXDO H[WLQFWLRQ 7KLV SDSHU VWXGLHG WKH DUFKDHDO VWDWXV LQ SDWLHQWV ZLWK UHFXUUHQW YLUDO
LQIHFWLRQVDQGUHWURYLUDOLQIHFWLRQV7KHJHQHUDWLRQRI51$DQG'1$YLURLGVIURPDUFKDHD
ZDVDOVRVWXGLHG
0DWHULDOVDQG0HWKRGV
%ORRG VDPSOHV ZHUH GUDZQ IURP QRUPDO SRSXODWLRQ 1HDQGHUWKDO SKHQRW\SH
UHWURYLUDO LQIHFWLRQ DQG UHFXUUHQW YLUDO LQIHFWLRQ 7KHUH ZHUH SDWLHQWV LQ HDFK JURXS DQG
HDFKSDWLHQWKDGDQDJHDQGVH[PDWFKHGKHDOWK\FRQWUROVHOHFWHGUDQGRPO\IURPWKHJHQHUDO
SRSXODWLRQ7KHEORRGVDPSOHVZHUHGUDZQLQWKHIDVWLQJVWDWHEHIRUHWUHDWPHQWZDVLQLWLDWHG
3ODVPD IURP IDVWLQJ KHSDULQLVHG EORRG ZDV XVHG DQG WKH H[SHULPHQWDO SURWRFRO ZDV DV
IROORZV,3ODVPDSKRVSKDWHEXIIHUHGVDOLQH,,VDPHDV,FKROHVWHUROVXEVWUDWH,,,VDPH
DV ,,FHULXP PJPO ,9 VDPH DV ,,FLSURIOR[DFLQH DQG GR[\F\FOLQH HDFK LQ D
FRQFHQWUDWLRQ RI PJPO &KROHVWHURO VXEVWUDWH ZDV SUHSDUHG DV GHVFULEHG E\ 5LFKPRQG
$OLTXRWVZHUHZLWKGUDZQDW]HURWLPHLPPHGLDWHO\DIWHUPL[LQJDQGDIWHULQFXEDWLRQDWR&
IRU KRXU 7KH IROORZLQJ HVWLPDWLRQV ZHUH FDUULHG RXW &\WRFKURPH ) IUHH 51$ DQG
IUHH'1$&\WRFKURPH)ZDVHVWLPDWHGIORXULPHWULFDOO\H[FLWDWLRQZDYHOHQJWKQP
DQGHPLVVLRQZDYHOHQJWKQP

5HVXOWV
3ODVPD RI 1HDQGHUWKDO SKHQRW\SH VKRZHG LQFUHDVHG OHYHOV RI WKH DERYH PHQWLRQHG
VWLOO IXUWKHU VLJQLILFDQW LQFUHDVH LQ WKHVH SDUDPHWHUV 7KH SODVPD RI UHWURYLUDO SDWLHQWV DQG
WKRVH ZLWK UHFXUUHQW YLUDO LQIHFWLRQV VKRZHG VLPLODU UHVXOWV EXW WKH H[WHQW RI LQFUHDVH ZDV
LQVLJQLILFDQW 7KH DGGLWLRQ RI DQWLELRWLFV WR WKH FRQWURO SODVPD FDXVHG D GHFUHDVH LQ DOO WKH

SDUDPHWHUVZKLOHDGGLWLRQRIFHULXPLQFUHDVHGWKHLUOHYHOV7KHDGGLWLRQRIDQWLELRWLFVWRWKH
SDWLHQW¶VSODVPDFDXVHGDGHFUHDVHLQDOOWKHSDUDPHWHUVZKLOHDGGLWLRQRIFHULXPLQFUHDVHG
WKHLUOHYHOVEXWWKHH[WHQWRIFKDQJHZDVPRUHLQ1HDQGHUWKDOSKHQRW\SHVHUDDVFRPSDUHGWR
SDWLHQWV ZLWK UHWURYLUDO LQIHFWLRQ DQG UHFXUUHQW YLUDO LQIHFWLRQ 7KH UHVXOWV DUH H[SUHVVHG LQ
WDEOHVDVSHUFHQWDJHFKDQJHLQWKHSDUDPHWHUVDIWHUKRXULQFXEDWLRQDVFRPSDUHGWRWKH
YDOXHVDW]HURWLPH
7DEOH(IIHFWRIFHULXPDQGDQWLELRWLFVRQF\WRFKURPH)
&<7) &<7)
,QFUHDVHZLWK 'HFUHDVHZLWK
*URXS &HULXP 'R[\&LSUR
0HDQ 6' 0HDQ 6'
5HWURYLUDO IUHTXHQW

YLUDOLQIHFWLRQ
1HDQGHUWKDO

SKHQRW\SH
)YDOXH
3YDOXH

7DEOH(IIHFWRIFHULXPDQGDQWLELRWLFVRQIUHH51$DQG'1$
*URXS &HULXP 'R[\&LSUR &HULXP 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
5HWURYLUDO
IUHTXHQW YLUDO
LQIHFWLRQ
1HDQGHUWKDO

SKHQRW\SH
)YDOXH
3YDOXH

'LVFXVVLRQ
$UFKDHDOV\PELRVLVVWHPFHOOWUDQVIRUPDWLRQDQGUHWURYLUDOUHVLVWDQFH
7KH DUFKDHDO V\PELRVLV UHVXOWV LQ FKROHVWHURO FDWDEROLVP DQG V\QWKHVLV RI GLJR[LQ
'LJR[LQ KDV DQ $32%(&OLNH DFWLRQ SURGXFLQJ 51$ HGLWLQJ 7KLV PXWDWHV WKH +,9 YLUXV
LQKLELWLQJ LWV UHSOLFDWLRQ 'LJR[LQ LV D PHPEUDQH VRGLXP SRWDVVLXP $73DVH LQKLELWRU ,W
SURGXFHVPDJQHVLXPGHILFLHQF\LQWUDFHOOXODUO\0DJQHVLXPFDQLQKLELWUHYHUVHWUDQVFULSWDVH
DFWLYLW\ LQKLELWLQJ +,9 UHSOLFDWLRQ (QGRV\PELRWLF DUFKDHD FDQ LQGXFH SRUSK\ULQ V\QWKHVLV
3RUSK\ULQFDQFRPELQHZLWK+,9YLUXVLQDFWLYDWLQJLW7KHHQGRV\PELRWLFDUFKDHDSURGXFHV
FKROHVWHUROFDWDEROLVPDQGXVHVFKROHVWHURODVDQHQHUJ\VRXUFH7KLVUHVXOWVLQPRGXODWLRQRI

PHPEUDQHUDIWVRIWKH&'UHFHSWRUUHVXOWLQJLQUHWURYLUDOUHVLVWDQFH7KHDUFKDHDOFKROHVWHURO
FDWDEROLVPSURGXFHVFKROHVWHUROGHSOHWLRQDQGYLWDPLQ'GHILFLHQF\7KLVSURGXFHVLPPXQH
DFWLYDWLRQ 7KH HQGRV\PELRWLF DUFKDHDO JURZWK DV VXFK SURGXFHV SHUPDQHQW LPPXQH
DFWLYDWLRQ UHVXOWLQJ LQ UHVLVWDQFH WR YLUDO LQIHFWLRQV 7KLV KDV EHHQ GHPRQVWUDWHG LQ EDFWHULD
OLNHP\FREDFWHULXPOHSUDH7KHLPPXQHJHQHVDUHDOZD\VWXUQHGRQLQKLELWLQJUHWURYLUDODQG
RWKHUYLUDOUHSOLFDWLRQ7KHHQGRV\PELRWLFDUFKDHDOJURZWKUHVXOWVLQWXUQLQJLQRIXQFRXSOLQJ
SURWHLQVWUDQVIHUULQJKXPDQVRPDWLFFHOOVWRWKH:DUEXUJSKHQRW\SHDQGVWHPFHOOW\SH6WHP
FHOOV KDYH WKH HQHUJHWLFV REWDLQHG IURP JO\FRO\VLV DQG QRW IURP PLWRFKRQGULDO R[LGDWLYH
SKRVSKRU\ODWLRQ6WHPFHOOVDUHUHVLVWDQWWRUHWURYLUDOLQIHFWLRQDQGRWKHUYLUDOLQIHFWLRQ7KXV
HQGRV\PELRWLFDUFKDHDOJURZWKFDQLQKLELW+,9UHSOLFDWLRQDQGSURGXFH+,9UHVLVWDQFH
(QGRV\PELRWLF DUFKDHD VWHP FHOO WUDQVIRUPDWLRQ QHDQGHUWKDOLVDWLRQ ± D UHVHUYRLU IRU

QHZYLUXVHV
(QGRV\PELRWLF DUFKDHDO JURZWK SURGXFHV QHDQGHUWKDOLVDWLRQ RI WKH KXPDQ VSHFLHV
7KHKRPRQHDQGHUWKDOLVFDQVHUYHDVDUHVHUYRLUIRUYLUDOLQIHFWLRQVDWWKHVDPHWLPHEHLQJ
UHVLVWDQW WR LW 7KH KRPR QHDQGHUWKDOLV KDV WKH VWHP FHOO SKHQRW\SH ZKLFK FDQ VHUYH DV D
UHVHUYRLU IRU EDFWHULDO DQG YLUDO LQIHFWLRQ 7KLV KDV EHHQ GHPRQVWUDWHG LQ WKH FDVH RI
P\FREDFWHULXPWXEHUFXORVLVZKLFKLQGXFHVVWHPFHOOWUDQVIRUPDWLRQDQGVXUYLYHVZLWKLQWKH
VWHP FHOO UHVLVWLQJ LPPXQH RQVODXJKW 7KLV SURWHFWLYH PHFKDQLVP LV QRW DYDLODEOH IRU WKH
KRPR VDSLHQ VSHFLHV DQG WKH\ WHQG WR VXFFXPE WR YLUDO LQIHFWLRQV DULVLQJ IURP WKH KRPR
QHDQGHUWKDOLVUHVHUYRLU
7KH KRPR QHDQGHUWKDOLV KDV DUFKDHDO LQGXFHG LQGXFWLRQ RI XQFRXSOLQJ SURWHLQV
SURGXFLQJ PLWRFKRQGULDO R[LGDWLYH SKRVSKRU\ODWLRQ LQKLELWLRQ DQG GRPLQDQW JO\FRO\WLF
HQHUJHWLFV 7KLV UHVXOWV LQ FRQYHUVLRQ WR D VWHP FHOO SKHQRW\SH 7KH KLJK PHWDEROLF UDWH
UHVXOWVLQDIHYHUUHVSRQVHZKLFKWXUQVRQWKHLPPXQHV\VWHPUHVXOWLQJLQSHUPDQHQWLPPXQH
DFWLYDWLRQ7KHKLJKWHPSHUDWXUHVDOVRGDPDJHWKHFHOOSURGXFLQJDV\VWHPRIKLJKHIILFLHQF\
'1$UHSDLU7KLVUHVXOWVLQSHUPDQHQWUHVLVWDQFHWRYLUDOLQIHFWLRQVFRQVHTXHQWWRFRQWLQXRXV
LPPXQHDFWLYDWLRQDQGKLJKHIILFLHQF\'1$UHSDLU7KHLQFUHDVHGDUFKDHDOJURZWKLQKRPR
QHDQGHUWKDOLVSURGXFHVXQFRXSOLQJSURWHLQVDQGVWHPFHOOFRQYHUVLRQPDNLQJLWDOVRUHVLVWDQW
WRYLUDOLQIHFWLRQV7KLVSURGXFHVDV\VWHPRIYLUDOUHVHUYRLULQKRPRQHDQGHUWKDOLVOLNHEDWV
ZKLFKVHUYHVDVDUHVHUYRLUIRUUDELHVYLUXV(ERODYLUXVDQG6$56YLUXV7KHEDWVDOVRKDYH
DUFKDHDOHQGRV\PELRQWV$UFKDHDOHQGRV\PELRQWVKDYHEHHQGHPRQVWUDWHGLQWKHEDWJXDQR
SLOH

7KH DUFKDHDO PDJQHWLWH SURGXFHV LQFUHDVHG OHYHO RI ORZ OHYHO (0) LQ WKH KRPR
QHDQGHUWKDOLV SURGXFLQJ JHQRPLF LQVWDELOLW\ 7KH KXPDQ JHQRPH FRQWDLQV YLUDO VHTXHQFHV
OLNHWKHHERODYLUXVUHWURYLUXVDQGWKHERUQDYLUXV2ZLQJWRWKHDUFKDHDOPDJQHWLWHLQGXFHG
ORZ OHYHO (0) PHGLDWHG JHQRPLF LQVWDELOLW\ WKH YLUDO HOHPHQWV LQ WKH KXPDQ JHQRPH JHWV
H[SUHVVHG7KHDUFKDHDOPDJQHWLWHLQGXFHGORZOHYHO(0)DVZHOODVDUFKDHDLWVHOISURGXFHV
SHUPDQHQWFRQWLQXRXVLPPXQHDFWLYDWLRQUHVXOWVLQSURWHFWLRQDJDLQVWYLUDOLQIHFWLRQV7KXV
LQWKHKRPRQHDQGHUWKDOLVWKHYLUDOHOHPHQWVLQWKHJHQRPHIXQFWLRQLQJDVJHQRPLFSDUDVLWHV
JHWVH[SUHVVHGDQGWKHKRPRQHDQGHUWKDOLVVHUYHVDVDUHVHUYRLUIRUYLUXVHVDNLQWREDWVZKLFK
DUHDOVRSDUWRIWKHSULPDWHNLQJGRP7KHDUFKDHDLQWKHKRPRQHDQGHUWKDOLVVHFUHWHV'1$
DQG 51$ YLURLGV ZKLFK FDQ VHOI UHSOLFDWH RQ SRUSK\ULQ WHPSODWHV 9LUXVOLNH SDUWLFOHV DQG
H[WUDFHOOXODU '1$ DUH SURGXFHG E\ WKH K\SHUWKHUPRSKLOLF DUFKDHD WKHUPRFRFFDOHV 7KH
51$ YLURLGV FDQ JHW FRQYHUWHG WR '1$ E\ +(59 UHYHUVH WUDQVFULSWDVH DQG JHW LQWHJUDWHG
LQWR WKH QHDQGHUWKDOLF JHQRPH E\ LQWHJUDVH 7KH '1$ YLURLGV VHFUHWHG E\ WKH DUFKDHD FDQ
DOVRJHWVLQWHJUDWHGLQWRWKHKXPDQJHQRPHE\LQWHJUDVH7KXVWKHDUFKDHDO51$DQG'1$
YLURLGV ZKLFK DUH RI JUHDW GLYHUVLW\ JHW LQWHJUDWHG LQWR WKH KXPDQ JHQRPH E\ WKH DFWLRQ RI
LQWHJUDVHDQG+(59UHYHUVHWUDQVFULSWDVH
7KH JHQRPLF LQVWDELOLW\ RI WKH QHDQGHUWKDOLF JHQRPH FRQVHTXHQW WR ORZ OHYHO (0)
JHQHUDWHG E\ DUFKDHDO PDJQHWLWH DV ZHOO DV DUFKDHDO SRUSK\ULQV LQWHUFDODWLQJ ZLWK KXPDQ
'1$ FDQ UHVXOW LQ H[SUHVVLRQ RI YLUDO HOHPHQWV RI WKH KXPDQ JHQRPH 51$
SRO\ULERQXFOHRWLGHV IURP FKURPRVRPH T $/8 VHTXHQFHV KDYH EHHQ GHPRQVWUDWHG LQ
WKHVHUDRISDWLHQWVZLWK*XOIZDUV\QGURPHDQGPXOWLSOHP\ORPD7KHH[SRVXUHWRJHQRWR[LF
VXEVWDQFHVDQGORZOHYHO(0)UHVXOWVLQDFWLYDWLRQRIUHWURWUDQVSRVRQ$/8HOHPHQWVOHDGLQJ
WRWKHXQLTXH51$VHJPHQWVLQWKHVHUXP7KH51$SRO\ULERQXFOHRWLGHVKDYHWKHSURWHROLSLG
FRYHU ZKLFK UHVLVWV GLJHVWLRQ E\ HQ]\PHV 7KH 6$56 YLUXV VSLNH SURWHLQ LV H[SUHVVHG
FRQVHTXHQWWRFRPSOH[JHQHWLFUHDUUDQJHPHQWRIVHJPHQWDOKRWVSRWVRIFKURPRVRPHGXHWR
FDWDVWURSKLF HQYLURQPHQWDO (0) H[SRVXUH +XPDQV DQG DQLPDOV H[SRVHG WKH QXFOHDU RU
FKHPLFDO ZHDSRQV RU FRQWLQXRXV ORZ OHYHO (0) UDGLDWLRQ SURGXFHV QHZ UHJXODWRU\ JHQH
H[SUHVVLRQ ZKLFK DUH WKHQ WUDQVFULEHG DV QRQYLUDO 51$ PLFURYLVVLFXOHV FRYHUHG E\
SURWHROLSLGPHPEUDQHV/RZOHYHORI(0)DQGJHQRWR[LFDJHQWVOHDGVWRJHQHUHDUUDQJHPHQW
RI $/8 VHTXHQFHV ZLWK JHQHUDWLRQ RI 51$ SRO\ULERQXFOHRWLGHV FRYHUHG E\ SURWHLROLSLG
YHVLFOHV 7KH 6$56 YLUXV LV VXSSRVHG WR EH GXH WR FRPSOH[ UHVKXIIOLQJ RI KRWVSRWV RI
FKURPRVRPH

7KH DUFKDHD SURGXFHV XQFRXSOLQJ RI WKH PLWRFKRQGULDO R[LGDWLYH SKRVSKRU\ODWLRQ RI
WKH VRPDWLF FHOOV 7KH DUFKDHDO PDJQHWLWH SURGXFHV H[SUHVVLRQ RI ORZ OHYHO RI (0) 7KH
UHDFWLYHR[\JHQVSHFLHVSURGXFHGE\XQFRXSOLQJRIPLWRFKRQGULDOR[LGDWLYHSKRVSKRU\ODWLRQ
DQG ORZ (0) SURGXFHG E\ DUFKDHDO PDJQHWLWH DUH JHQRWR[LF DQG SURGXFHV FRPSOH[
UHDUUDQJHPHQW RI WKH 1HDQGHUWKDO JHQRPH EUHDNDJH RI KRWVSRWV LQ WKH FKURPRVRPH ZKLFK
DUH H[WUHPHO\ IUDJLOH SURGXFLQJ H[SUHVVLRQ RI 51$ SRO\ULERQXFOHRWLGHV ZKLFK FDQ JHW
FRQYHUWHG WR '1$ SRO\ULERQXFOHRWLGHV E\ WKH HQ]\PH +(59 UHYHUVH WUDQVFULSWDVH 7KH
51$ DQG '1$ SRO\ULERQXFOHRWLGHV SDFNDJHG LQ SURWHROLSLG YHVLFOHV FDQ PLPLF 51$ DQG
'1$ YLUXVHV 7KH MXQN '1$ RI KXPDQV DUH FRQVWLWXWHG E\ +(59 VHTXHQFHV DQG QRQ
UHWURYLUDO 51$ YLUXVHV OLNH (EROD DQG ERUQD YLUXVHV 7KH\ DUH JHQRPLF SDUDVLWHV 7KH
QHDQGHUWKDOLF FHOO KDV LQFUHDVHG SURGXFWLRQ RI 526 FRQVHTXHQW WR DUFKDHDO LQGXFHG
XQFRXSOLQJ 7KH DUFKDHDO PDJQHWLWH LQGXFHG (0) DV ZHOO DV DUFKDHD LQGXFHG XQFRXSOLQJ
JHQHUDWHG 526 DUH JHQRWR[LF 7KH H[SRVXUH WR 526 DQG ORZ OHYHO (0) FDQ SURGXFH
UHDUUDQJHPHQW RI MXQN '1$ SURGXFLQJ QHZ W\SH RI 51$ YLUXVHV ZKLFK FDQ JHW H[SUHVVHG
7KH YLUDO UHWURYLUDO DQG QRQUHWURYLUDO HOHPHQWV RI WKH KXPDQ JHQRPH DV ZHOO DV KXPDQ
JHQRPLF VHTXHQFHV SHU VH ZKLFK DUH H[SUHVVHG FDQ UHFRPELQH ZLWK WKH DUFKDHDO '1$ DQG
51$YLURLGVSURGXFLQJQHZPXWDWHGGDQJHURXVYLUXVHVERWKRIWKH51$DQG'1$W\SHLQ
WKHKRPRQHDQGHUWKDOLV7KHKRPRQHDQGHUWKDOLVKDYHXQFRXSOHGR[LGDWLYHSKRVSKRU\ODWLRQ
DQG PRUH RI 526 SURGXFWLRQ 7KH 526 VHUYHV DV PHVVHQJHUV PRGXODWLQJ YLUDO UHSOLFDWLRQ
7KXV WKHUH LV JHQRPLF LQVWDELOLW\ LQGXFLQJ H[SUHVVLRQ RI WKH YLUDO HOHPHQWV LQ WKH
QHDQGHUWKDOLFJHQRPHDUFKDHDOH[SUHVVLRQRI'1$DQG51$YLURLGVUHFRPELQDWLRQRI'1$
DQG 51$ DUFKDHDO YLURLGV ZLWK QHDQGHUWKDOLF JHQRPLF YLUDO HOHPHQWV ZKLFK DUH H[SUHVVHG
DQG526LQGXFHGPXOWLSOLFDWLRQRIQHZO\PXWDWHGYLUXV
7KHH[WLQFWLRQRIKRPRVDSLHQVE\YLUDOLQIHFWLRQVJHQHUDWHGE\1HDQGHUWKDOUHVHUYRLUV
7KH KRPR QHDQGHUWKDOLV WKHPVHOYHV DUH UHVLVWDQW WR WKHVH YLUXVHV DQG VHUYH DV D
UHVHUYRLU IRU WKHP OLNH WKHLU SULPDWH EURWKHU WKH EDW 7KH KRPR VDSLHQV KDYH OHVV
HQGRV\PELRWLF DUFKDHDO V\PELRVLV DQG KDYH QR XQFRXSOLQJ SURWHLQ LQGXFWLRQ UHVXOWLQJ LQ
PDLQWHQDQFH RI WKHLU PDWXUH VRPDWLF FHOOV DV VXFK 7KH KRPR VDSLHQ FHOO KDV GRPLQDQW
PLWRFKRQGULDO R[LGDWLYH SKRVSKRU\ODWLRQ PHWDEROLVP JHQHUDWLQJ OHVV RI 526 7KH KRPR
VDSLHQV DUH LPPXQRVXSSUHVVHG 7KH KRPR VDSLHQV DUH QRW SHUPDQHQWO\ LPPXQH DFWLYDWHG
SURGXFLQJ YLUDO UHVLVWDQFH 7KH\ GRQ¶W KDYH WKH VWHP FHOO SKHQRW\SH 7KH\ GRQ¶W KDYH
GRPLQDQW DUFKDHDO PHGLDWHG FKROHVWHURO FDWDEROLVP PRGXODWLQJ YLUDO UHFHSWRUV 7KH KRPR
VDSLHQVGRQ¶WKDYHGLJR[LQV\QWKHVLVLQKLELWLQJ51$HGLWLQJDQGYLUDOUHSOLFDWLRQ7KHKRPR

VDSLHQVDUHVLWWLQJGXFNVIRUYLUDOLQIHFWLRQVJHQHUDWHGE\KRPRQHDQGHUWKDOLVZKLFKLQIHFWV
WKHP DQG NLOOV WKHP 7KH KRPR QHDQGHUWKDOLV ZKLFK JHQHUDWHG WKH YLUXVHV LQ WKH ILUVW SODFH
DUHUHVLVWDQWWRWKHYLUDOLQIHFWLRQV7KHKRPRVDSLHQVSHFLHVJHWVH[WHUPLQDWHGIURPWKHYLUDO
LQIHFWLRQ JHQHUDWHG IURP KRPR QHDQGHUWKDOLV 7KH KRPR QHDQGHUWKDOLV VSHFLHV XVHV YLUDO
LQIHFWLRQDVDPHFKDQLVPWRHOLPLQDWHWKHKRPRVDSLHQVDQGSURGXFHVSHFLHVGRPLQDQFH
7KH KRPR QHDQGHUWKDOLV KDV DUFKDHD DV HQGRV\PELRQWV 7KH DUFKDHD EHKDYHV OLNH
VWHP FHOOV DQG FDQ LQGXFH FRQYHUVLRQ RI VRPDWLF FHOOV WR VWHP FHOOV 7KH VWHP FHOOV DQG
DUFKDHDOFHOOVFDQVHUYHDVUHVHUYRLUVRIRWKHUVSHFLHVYLUXVDQGEDFWHULDOLNHSODQWDQGDQLPDO
YLUXVHVDQGEDFWHULD7KHSODQWDQGDQLPDOYLUXVHVDQGEDFWHULDFDQWKULYHLQWKHVRPDWLFVWHP
FHOOVDQGDUFKDHDOFHOOVDVWKH\HVFDSHLPPXQHGHWHFWLRQ7KH1HDQGHUWKDOVWLVVXHV\VWHPFDQ
EHFRPSDUHGWRDQDUFKDHDOVWHPFHOOFRORQ\RUQHWZRUNZKLFKVHUYHVDVDUHVHUYRLUIRURWKHU
DQLPDODQGSODQWVSHFLHVEDFWHULDDQGYLUXVHVDVZHOODVDJHQHUDWLQJFHQWUHIRUQHZ51$DQG
'1$YLUXVHV7KH51$DQG'1$YLUXVHVDUHFUHDWHGE\UHFRPELQDWLRQEHWZHHQH[SUHVVHG
JHQHWLFDOO\UHDUUDQJHGELWVRIWKHKXPDQFKURPRVRPHDQGYLUXVOLNH'1$DQG51$SDUWLFOHV
VHFUHWHGE\WKHDUFKDHD7KLVSDYHVZD\IRUWKHJHQHUDWLRQRIXQOLPLWHGQXPEHURIQHZ51$
DQG'1$YLUXVHVDVZHOODVSURGXFHFRQGLWLRQVIRUYLUXVHVDQGEDFWHULDWRFURVVWKHVSHFLHV
EDUULHU 7KLV LV HYLGHQFHG E\ WKH 6$56 YLUXV WKH QLSDK YLUXV DQG KHQGUD YLUXV FURVVLQJ
VSHFLHV 7KH DOJDO YLUXV KDV EHHQ UHSRUWHG WR LQIHFW KXPDQ EUDLQV SURGXFLQJ FRJQLWLYH
G\VIXQFWLRQ 7KH JHQHUDWLRQ RI QHZ 51$ DQG '1$ YLUXVHV DQG WKH FUHDWLRQ RI D VWHP
FHOODUFKDHDO UHVHUYRLU IRU RWKHU VSHFLHV EDFWHULD DQG YLUXVHV WKH 1HDQGHUWKDO UHVLVWDQFH WR
LQIHFWLRQV E\ YLUXVHV DQG EDFWHULD DQG WKH 1HDQGHUWKDOV VHUYLQJ DV D UHVHUYRLU IRU LQIHFWLRQ
UHVXOWV LQ ZLGHVSUHDG SDQGHPLF LQ WKH KRPR VDSLHQ SRSXODWLRQ LQ $IULFD DQG WKHLU HYHQWXDO
ZLSHRXW
5HIHUHQFHV

0RUJDQ( 7KH1HDQGHUWKDOWKHRU\RIDXWLVP$VSHUJHUDQG$'+'
$QWKURSRORJ\
1HZ$QDWRPLVW%
+XPDQV3URF%LRO6FL±
+XP(YRO±

%RG\,6%1
*HQXV+RPR(YLGHQFH IURP WKH1HDQGHUWDO DQG 0RGHUQ/LQHDJHV3URF1DWO$FDG
6FL 86$±

5DPDFKDQGUDQ967KH5HLWKOHFWXUHV%%&/RQGRQ

&+$37(5
(1'26<0%,27,&$5&+$($/*(1(5$7('51$9,52,'6&$15(*8/$7(
&(//)81&7,21$1'&2175,%87(72',6($6(67$7(±52/(,19,5$/
63(&,$7,21
,QWURGXFWLRQ
YLURLGVKDYHDOVREHHQGHPRQVWUDWHGWRSOD\DUROHLQWKHHWLRORJ\RIWKHVHGLVHDVHV51$
YLURLGV FRXOG FRQWULEXWH WR WKH SDWKRJHQHVLV RI VFKL]RSKUHQLD PDOLJQDQF\ PHWDEROLF
V\QGURPH[DXWRLPPXQHGLVHDVHDQGQHXURQDOGHJHQHUDWLRQ7KHSRVVLELOLW\RIJHQHUDWLRQRI
51$YLURLGVE\DFWLQLGHEDVHGSULPLWLYHRUJDQLVPOLNHDUFKDHDZLWKDPHYDORQDWHSDWKZD\
DQG FKROHVWHURO FDWDEROLVP ZDV FRQVLGHUHG $Q DFWLQLGH GHSHQGHQW VKDGRZ ELRVSKHUH RI
DUFKDHD DQG YLURLGV LQ WKH DERYH PHQWLRQHG GLVHDVH VWDWHV LV GHVFULEHG 7KH UROH RI 51$
YLURLGVJHQHUDWHGE\DFWLQLGLFDUFKDHDLQUHJXODWLRQRIERG\IXQFWLRQVDQGWKHSDWKRJHQHVLVRI
KXPDQGLVHDVHLVGLVFXVVHG

0DWHULDOVDQG0HWKRGV
HVWLPDWLRQVZHUHFDUULHGRXW&\WRFKURPH)IUHH51$DQGIUHH'1$&\WRFKURPH

QP7KHVWDWLVWLFDODQDO\VLVZDVGRQHE\$129$

5HVXOWV
7KHSDUDPHWHUVFKHFNHGDVLQGLFDWHGDERYHZHUHF\WRFKURPH)IUHH51$DQG
IUHH '1$ 3ODVPD RI FRQWURO VXEMHFWV VKRZHG LQFUHDVHG OHYHOV RI WKH DERYH PHQWLRQHG
FRPSDUHG WR FRQWUROV 7KH UHVXOWV DUH H[SUHVVHG LQ WDEOHV DV SHUFHQWDJH FKDQJH LQ WKH
SDUDPHWHUVDIWHUKRXULQFXEDWLRQDVFRPSDUHGWRWKHYDOXHVDW]HURWLPH
7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQF\WRFKURPH)
&<7)
&<7)
'HFUHDVHZLWK
'R[\&LSUR
0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'1$FKDQJH 51$FKDQJH
'1$FKDQJH 51$FKDQJH
*URXS ,QFUHDVHZLWK5XWLOH 'R[\&LSUR
,QFUHDVHZLWK5XWLOH
'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'LVFXVVLRQ
7KH DUFKDHD FDQ XQGHUJR PDJQHWLWH DQG FDOFLXP FDUERQDWH PLQHUDOL]DWLRQ DQG FDQ H[LVW DV
FDOFLILHGQDQRIRUPV
7KHYLURLGVDUHHYROXWLRQDULO\HVFDSHGDUFKDHDOJURXS,LQWURQVZKLFKKDYHUHWURWUDQVSRVLWLRQ
DQG VHOI VSOLFLQJ TXDOLWLHV $UFKDHD LQGXFHG LPPXQH DFWLYDWLRQ DQG UHGR[ VWUHVV FDQ
'1$LQWRWKHQRQFRGLQJUHJLRQRIHXNDU\RWLFQRQFRGLQJ'1$XVLQJ+(59LQWHJUDVHDVKDV

JUDPPDU RI WKH QRQFRGLQJ UHJLRQ SURGXFLQJ PHPHV RU PHPRU\ RI DFTXLUHG FKDUDFWHUV
7KH YLURLGDO FRPSOHPHQWDU\ '1$ FDQ IXQFWLRQ DV MXPSLQJ JHQHV SURGXFLQJ D G\QDPLF
JHQRPH LPSRUWDQW LQ VWRUDJH RI V\QDSWLF LQIRUPDWLRQ +/$ JHQH H[SUHVVLRQ DQG
GHYHORSPHQWDO JHQH H[SUHVVLRQ 7KH 51$ YLURLGV FDQ UHJXODWH P51$ IXQFWLRQ E\ 51$
WUDQVPLVVLRQDQGHXFKURPDWLQKHWHURFKURPDWLQH[SUHVVLRQ
DQGHSVWHLQEDUUYLUXVE\UHFRPELQLQJZLWKDUFKDHDOHXNDU\RWLFDQGKXPDQJHQHVUHVXOWLQJLQ
YLUDOVSHFLDWLRQ7KH51$YLURLGVFDQDOVRUHFRPELQHZLWKHQGRJHQRXVFRPPHQVDO51$
DQG '1$ YLUXVHV SURGXFLQJ VSHFLDWLRQ 9LUDO VSHFLHV DUH LOO GHILQHG DQG IX]]\ ZLWK DOO RI
WKHP IRUPLQJ RQH FRPPRQ JHQHWLF SRRO ZLWK IUHTXHQW KRUL]RQWDO JHQH WUDQVIHU DQG
UHFRPELQDWLRQ7KXVWKHPXOWLDQGXQLFHOOXODUHXNDU\RWHZLWKLWVJHQHVVHUYHVWKHSXUSRVHRI
YLUDOVSHFLDWLRQ
7KH PXOWLFHOOXODU HXNDU\RWHV DUH OLNH DUFKDHDO ELRILOPV 7KH DUFKDHD ZLWK D
PHYDORQDWH SDWKZD\ XVHV WKH H[WUDFHOOXODU 51$ YLURLGV IRU TXRUXP VHQVLQJ DQG LQ WKH
JHQHUDWLRQ RI V\PELRWLF ELRILOP OLNH VWUXFWXUHV ZKLFK GHYHORS LQWR PXOWLFHOOXODU
HXNDU\RWHV7KHHQGRV\PELRWLFDUFKDHDDQGEDFWHULDZLWKPHYDORQDWHSDWKZD\VWLOOXVHV
WKH 51$ YLURLGV IRU WKH UHJXODWLRQ RI PXOWLFHOOXODU HXNDU\RWH 3ROOXWLRQ LV LQGXFHG E\ WKH
V\QWKHVLVDQGQDQRDUFKDHDOPHYDORQDWHSDWKZD\EDFWHULDOJURZWK5HGR[VWUHVVOHDGVRQWR

UHVXOWVLQDQHZQHXURQDOPHWDEROLFLPPXQHDQGWLVVXHSKHQRW\SHOHDGLQJWRKXPDQGLVHDVH
WKDODPRFRUWLFRWKDODPLF SDWKZD\ PHGLDWLQJ FRQVFLRXV SHUFHSWLRQ 10'$*$%$
UHFHSWRUV FDQ EH PRGXODWHG E\ YLURLG LQGXFHG 51$ LQWHUIHUHQFH 7KH GLSRODU YLURLGV
FRPELQHG ZLWK DFWLQLGHV LQ WKH VHWWLQJ RI GLJR[LQ LQGXFHG VRGLXP SRWDVVLXP $73DVH
LQKLELWLRQ FDQSURGXFH DSXPSHGSKRQRQ V\VWHP PHGLDWHG )URKOLFK PRGHO VXSHUFRQGXFWLQJ
VWDWH LQGXFLQJ TXDQWDO SHUFHSWLRQ ZLWK QDQRDUFKDHDO VHQVHG JUDYLW\ SURGXFLQJ WKH
RUFKHVWUDWHG UHGXFWLRQ RI WKH TXDQWDO SRVVLELOLWLHV WR WKH PDFURVFRSLF ZRUOG 7KH YLURLGV
FDQUHJXODWHOLPELFOREHWUDQVPLVVLRQE\51$YLURLGPHGLDWHG51$LQWHUIHUHQFHPRGXODWLQJ
QRUHSLQHSKULQH GRSDPLQH VHURWRQLQ DQG DFHW\O FKROLQH UHFHSWRUV 7KH KLJKHU GHJUHH RI
LQWHJUDWLRQRIWKHDUFKDHDDQGYLURLGVLQWRWKHJHQRPHSURGXFHVLQFUHDVHGGLJR[LQV\QWKHVLV
SURGXFLQJ ULJKW KHPLVSKHULF GRPLQDQFH DQG OHVVHU GHJUHH SURGXFLQJ OHIW KHPLVSKHULF
GRPLQDQFH 7KH YLURLG 51$ LQWHUIHUHQFH PHGLDWHG DOWHUHG PRQRDPLQH DQG 10'$
WUDQVPLVVLRQFRQWULEXWHVWRWKHSDWKRJHQHVLVRIVFKL]RSKUHQLDDQGDXWLVP$UFKDHDDQG51$
YLURLGFDQELQGWKH7/5UHFHSWRULQGXFH1).%SURGXFLQJLPPXQHDFWLYDWLRQDQGF\WRNLQH
71) DOSKD VHFUHWLRQ 7KH DUFKDHD DQG YLURLG LQGXFHG FKURQLF LPPXQH DFWLYDWLRQ DQG
JHQHUDWLRQ RI VXSHUDQWLJHQV FDQ OHDG RQ WR DXWRLPPXQH GLVHDVH $UFKDHD DQG YLURLGV FDQ
LQGXFHWKHKRVW$.73,.$03.+,)DOSKDDQG1).%SURGXFLQJWKH:DUEXUJPHWDEROLF
SKHQRW\SH7KHLQFUHDVHGJO\FRO\WLFKH[RNLQDVHDFWLYLW\GHFUHDVHLQEORRG$73OHDNDJHRI
F\WRFKURPH & LQFUHDVH LQ VHUXP S\UXYDWH DQG GHFUHDVH LQ DFHW\O &R$ LQGLFDWHV WKH
JHQHUDWLRQ RI WKH :DUEXUJ SKHQRW\SH 7KHUH LV LQGXFWLRQ RI JO\FRO\VLV LQKLELWLRQ RI 3'+
DFWLYLW\ DQG PLWRFKRQGULDO G\VIXQFWLRQ UHVXOWLQJ LQ LQHIILFLHQW HQHUJHWLFV DQG PHWDEROLF
V\QGURPH7KHDUFKDHDDQGYLURLGJHQHUDWHGF\WRNLQHVFDQOHDGWR71)DOSKDLQGXFHGLQVXOLQ
UHVLVWDQFH DQG PHWDEROLF V\QGURPH [ 7KH DFFXPXODWHG S\UXYDWH HQWHUV WKH *$%$ VKXQW
SDWKZD\ DQG LV FRQYHUWHG WR FLWUDWH ZKLFK LV DFWHG XSRQ E\ FLWUDWH O\DVH DQG FRQYHUWHG WR
DFHW\O&R$XVHGIRUFKROHVWHUROV\QWKHVLV7KHS\UXYDWHFDQEHFRQYHUWHGWRJOXWDPDWHDQG
DPPRQLDZKLFKLVR[LGLVHGE\DUFKDHDIRUHQHUJ\QHHGV7KHLQFUHDVHGFKROHVWHUROVXEVWUDWH

OHDGVWRLQFUHDVHGDUFKDHDOJURZWKDQGGLJR[LQV\QWKHVLVOHDGLQJWRPHWDEROLFFKDQQHOLQJWR
WKHPHYDORQDWHSDWKZD\7KHDUFKDHDDQGYLURLGLQGXFHGPRQRF\WHDFWLYDWLRQDQG:DUEXUJ
SKHQRW\SH LQGXFHG LQFUHDVHG FKROHVWHURO V\QWKHVLV OHDGV WR DWKHURJHQHVLV 9LURLG LQGXFHG
51$ LQWHUIHUHQFH FDQ PRGXODWH WKH P51$V FRQFHUQHG ZLWK LQVXOLQ UHFHSWRU IXQFWLRQ DQG
OLSLG PHWDEROLVP FRQWULEXWLQJ WR PHWDEROLF V\QGURPH [ 7KH :DUEXUJ SKHQRW\SH LQGXFHG
LQFUHDVHGPLWRFKRQGULDO37SRUHKH[RNLQDVHFDQOHDGRQWRPDOLJQDQWWUDQVIRUPDWLRQ9LURLG
LQGXFHG51$LQWHUIHUHQFHFDQPRGXODWHRQFRJHQHVSURGXFLQJPDOLJQDQWWUDQVIRUPDWLRQ7KH
YLURLGLQGXFHG51$LQWHUIHUHQFHFDQPRGXODWHWKHP51$FRQFHUQHGZLWKWKHGHDWKUHFHSWRU
SDWKZD\ SURGXFLQJ DSRSWRVLV DQG QHXURQDO GHJHQHUDWLRQ 7KH 51$ YLURLGV FDQ UHFRPELQH
VWDWH7KHSULRQSURWHLQFRQIRUPDWLRQLVPRGXODWHGE\51$YLURLGELQGLQJSURGXFLQJSULRQ
GLVHDVH
7KXV WKH DFWLQLGLF DUFKDHD JHQHUDWHG 51$ YLURLGV FDQ UHJXODWH FHOO IXQFWLRQ DQG
SURGXFHQHXURLPPXQRJHQHWLFHQGRFULQHPHWDEROLFLQWHJUDWLRQ7KH51$YLURLGVDQGWKHLU
FRPSOHPHQWDU\ '1$ FDQ VHUYH WKH SXUSRVH RI YLUDO VSHFLDWLRQ 7KH 51$ YLURLGV DOVR
FRQWULEXWHV WR WKH SDWKRJHQHVLV RI VFKL]RSKUHQLD PDOLJQDQF\ PHWDEROLF V\QGURPH [
DXWRLPPXQHGLVHDVHDQGQHXURQDOGHJHQHUDWLRQ

5HIHUHQFHV
3ODQW'LVHDVH
3ODQW3DWKRORJ\
(XU-%LRFKHP

&KHP
9DQ1R6WUDQG
3XEOLVKHUV
3UHVV

86$
0LFURELRO

0RO%LRO5HY±
%0&%LRORJ\

0LFURELDOLVRSUHQRLGELRV\QWKHVLVDQGKXPDQȖį7FHOODFWLYDWLRQ)(%6/HWWHUV


&+$37(5
(1'26<0%,27,&$5&+$($/51$9,52,'635,21',6($6($1'
$0</2,'26,6
,QWURGXFWLRQ
3ULRQ SURWHLQV KDYH EHHQ LPSOLFDWHG LQ V\VWHPLF GLVRUGHUV OLNH QHXURGHJHQHUDWLRQV
FDQFHUDQGPHWDEROLFV\QGURPH7KHEHWDDP\ORLGLQ$O]KHLPHU¶VGLVHDVHDOSKDV\QXFOHLQLQ
3DUNLQVRQ¶VGLVHDVHWKH7$5SURWHLQLQIURQWRWHPSRUDOGHPHQWLDDQGFRSSHU]LQFGLVPXWDVH
LQPRWRUQHXURQGLVHDVHEHKDYHVOLNHSULRQSURWHLQV3ULRQSURWHLQVOLNHEHKDYLRULVDOVRVHHQ
LQWKHWXPRXUVXSSUHVVRU3SURWHLQLQFDQFHUDQGWKHLVOHWFHOODVVRFLDWHGDP\ORLGLQGLDEHWHV
PHOOLWXV3ULRQGLVHDVHVDUHFRQIRUPDWLRQDOGLVHDVHV7KHDEQRUPDOSULRQSURWHLQVHHGHGLQWR
WKHV\VWHPFRQYHUWVWKHQRUPDOSURWHLQVZLWKSULRQOLNHGRPDLQVWRDEQRUPDOFRQILJXUDWLRQ
7KLV DEQRUPDO SURWHLQ UHVLVWV GLJHVWLRQ E\ O\VRVRPDO HQ]\PHV DIWHU LWV KDOI OLIH LV RYHU DQG
UHVXOWVLQGHSRVLWLRQRIDP\ORLGSODTXHV7KLVSURGXFHVRUJDQG\VIXQFWLRQ3ULRQSKHQRPHQD
ZHUHLQLWLDOO\GHVFULEHGIRU&UHXW]IHOGW-DNRE¶VGLVHDVHEXWQRZLWLVIRXQGWREHZLGHVSUHDG
LQ FKURQLF GLVHDVH SDWKRJHQHVLV 5LERQXFOHRSURWHLQV DUH ZHOO NQRZQ WR EHKDYH OLNH SULRQ
SURWHLQV DQG IRUP DP\ORLG :H KDYH GHPRQVWUDWHG DFWLQLGLF DUFKDHD ZKLFK VHFUHWHV 51$
YLURLGV LQ PHWDEROLF V\QGURPH QHXURGHJHQHUDWLRQV FDQFHU DXWRLPPXQH GLVHDVH
VFKL]RSKUHQLDDXWLVPDQG&-'7KH51$YLURLGVFDQELQGZLWKQRUPDOSURWHLQVZLWKSULRQ
OLNH GRPDLQV HJ VXSHUR[LGH GLVPXWDVH DQG SURGXFH D ULERQXFOHRSURWHLQ UHVXOWLQJ LQ SULRQ
SKHQRPHQDDQGDP\ORLGRJHQHVLV7KHDFWLQLGLFDUFKDHDOJURZWKUHVXOWVLQLQFUHDVHGGLJR[LQ
V\QWKHVLV DQG SKHQRW\SLF FRQYHUVLRQ RI KRPR VDSLHQV WR KRPR 1HDQGHUWKDOV DV UHSRUWHG
HDUOLHU7KHLQFUHDVHGDFWLQLGLFDUFKDHDOJURZWKLVGXHWRJOREDOZDUPLQJDQGWKLVUHVXOWVLQ
QHDQGHUWKDOLVDWLRQ +RPR QHDQGHUWKDOLV WHQG WR KDYH PRUH RI FLYLOL]DWLRQDO GLVHDVHV OLNH
PHWDEROLFV\QGURPHQHXURGHJHQHUDWLRQVFDQFHUDXWRLPPXQHGLVHDVHVFKL]RSKUHQLDDXWLVP
DQG &-' $FWLQLGLF DUFKDHDO VHFUHWHG 51$ YLURLGV PD\ SOD\ D FUXFLDO UROH LQ DP\ORLG
IRUPDWLRQDQGSDWKRJHQHVLVRIWKHVHGLVRUGHUV

0DWHULDOVDQG0HWKRGV
7KH IROORZLQJ JURXSV ZHUH LQFOXGHG LQ WKH VWXG\ $O]KHLPHU¶V GLVHDVH PXOWLSOH
VFOHURVLVQRQ+RGJNLQ¶VO\PSKRPDPHWDEROLFV\QGURPH[ZLWKFHUHEURYDVFXODUWKURPERVLV
DQG FRURQDU\ DUWHU\ GLVHDVH VFKL]RSKUHQLD DXWLVP VHL]XUH GLVRUGHU &UHXW]IHOGW -DNRE¶V
GLVHDVHDQGDFTXLUHGLPPXQRGHILFLHQF\V\QGURPH7KHUHZHUHSDWLHQWVLQHDFKJURXSDQG
HDFKSDWLHQWKDGDQDJHDQGVH[PDWFKHGKHDOWK\FRQWUROVHOHFWHGUDQGRPO\IURPWKHJHQHUDO

SRSXODWLRQ7KHEORRGVDPSOHVZHUHGUDZQLQWKHIDVWLQJVWDWHEHIRUHWUHDWPHQWZDVLQLWLDWHG
3ODVPD IURP IDVWLQJ KHSDULQLVHG EORRG ZDV XVHG DQG WKH H[SHULPHQWDO SURWRFRO ZDV DV
IROORZV , 3ODVPDSKRVSKDWH EXIIHUHG VDOLQH ,, VDPH DV ,FKROHVWHURO VXEVWUDWH ,,,
VDPHDV,,FHULXPPJPODQG,9VDPHDV,,FLSURIOR[DFLQHDQGGR[\F\FOLQHHDFKLQD
IRU KRXU 7KH IROORZLQJ HVWLPDWLRQV ZHUH FDUULHG RXW &\WRFKURPH ) IUHH 51$
&\WRFKURPH ) ZDV HVWLPDWHG IORXULPHWULFDOO\ H[FLWDWLRQ ZDYHOHQJWK QP DQG
HPLVVLRQ ZDYHOHQJWK QP 3ODVPD RI FRQWURO VXEMHFWV VKRZHG LQFUHDVHG OHYHOV RI WKH
FHULXP LQFUHDVHG WKHLU OHYHOV 7KH DGGLWLRQ RI DQWLELRWLFV WR WKH SDWLHQW¶V SODVPD FDXVHG D
GHFUHDVHLQDOOWKHSDUDPHWHUVZKLOHDGGLWLRQRIFHULXPLQFUHDVHGWKHLUOHYHOVEXWWKHH[WHQWRI
DW]HURWLPH

5HVXOWV
7KHUHVXOWVVKRZWKDWWKHUHZDVLQFUHDVHLQF\WRFKURPH)LQ&-'DQGRWKHUGLVHDVH
JURXSV LQGLFDWLQJ LQFUHDVHG DUFKDHDO JURZWK 7KHUH ZDV DOVR DQ LQFUHDVH LQ IUHH 51$
LQGLFDWLQJ VHOI UHSOLFDWLQJ 51$ YLURLGV LQ &-' DQG RWKHU GLVHDVH JURXSV 7KH 51$ YLURLG
JHQHUDWLRQZDVFDWDO\VHGE\DFWLQLGHV7KH51$YLURLGVFDQELQGZLWKSURWHLQVKDYLQJSULRQ
OLNH GRPDLQV IRUPLQJ ULERQXFOHRSURWHLQV 7KHVH ULERQXFOHRSURWHLQV FDQ JLYH DQ DEQRUPDO
FRQIRUPDWLRQWRWKHSURWHLQUHVXOWLQJLQJHQHUDWLRQRIDEQRUPDOSULRQV7KHDEQRUPDOSULRQV
FDQ DFW DV D WHPSODWH WR FRQYHUW QRUPDO SURWHLQV ZLWK QRUPDO FRQILJXUDWLRQ WR DEQRUPDO
FRQIRUPDWLRQ 7KLV FDQ UHVXOW LQ DP\ORLGRJHQHVLV 7KH DEQRUPDO FRQILJXUHG SURWHLQV ZLOO
UHVLVWO\VRVRPDOGLJHVWLRQDQGDFFXPXODWHDVDP\ORLG

7DEOH(IIHFWRIFHULXPDQGDQWLELRWLFVRQF\WRFKURPH)
&<7) &<7)
*URXS &HULXP 'R[\&LSUR
0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
)YDOXH
3YDOXH
7DEOH(IIHFWRIFHULXPDQGDQWLELRWLFVRQIUHH51$
51$FKDQJH
51$FKDQJH
'HFUHDVHZLWK
*URXS ,QFUHDVHZLWK&HULXP
'R[\&LSUR
0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
)YDOXH
3YDOXH
'LVFXVVLRQ
V\QWKHVL]HDQGXVHFKROHVWHURODVDFDUERQDQGHQHUJ\VRXUFH7KHDUFKDHDORULJLQRIWKHVHOI
UHSOLFDWLQJ 51$ ZDV LQGLFDWHG E\ DQWLELRWLF LQGXFHG VXSSUHVVLRQ 7KH VWXG\ LQGLFDWHV WKH
PHWDOORHQ]\PHVLQWKHV\VWHPDVLQGLFDWHGE\FHULXPLQGXFHGLQFUHDVHLQHQ]\PHDFWLYLWLHV
7KHUH ZDV DQ LQFUHDVH LQ IUHH 51$ LQGLFDWLQJ VHOI UHSOLFDWLQJ 51$ YLURLGV 7KH DFWLQLGHV

PRGXODWH 51$ IROGLQJ DQG FDWDO\VH LWV ULER]\PDO DFWLRQ 'LJR[LQ FDQ FXW DQG SDVWH WKH
YLURLGDOVWUDQGVE\PRGXODWLQJ51$VSOLFLQJJHQHUDWLQJ51$YLURLGDOGLYHUVLW\7KHYLURLGV
DUH HYROXWLRQDULO\ HVFDSHG DUFKDHDO JURXS , LQWURQV ZKLFK KDYH UHWURWUDQVSRVLWLRQ DQG VHOI
VSOLFLQJTXDOLWLHV7KH51$YLURLGVFDQELQGZLWKSURWHLQVKDYLQJSULRQOLNHGRPDLQVIRUPLQJ
ULERQXFOHRSURWHLQV 7KHVH ULERQXFOHRSURWHLQV FDQ JLYH DQ DEQRUPDO FRQIRUPDWLRQ WR WKH
SURWHLQUHVXOWLQJLQJHQHUDWLRQRIDEQRUPDOSULRQV7KHDEQRUPDOSULRQVFDQDFWDVDWHPSODWH
WR FRQYHUW QRUPDO SURWHLQV ZLWK QRUPDO FRQILJXUDWLRQ WR DEQRUPDO FRQIRUPDWLRQ 7KLV FDQ
UHVXOWLQDP\ORLGRJHQHVLV7KHDEQRUPDOFRQILJXUHGSURWHLQVZLOOUHVLVWO\VRVRPDOGLJHVWLRQ
DQGDFFXPXODWHDVDP\ORLG
$P\ORLGRJHQHVLV KDV EHHQ LPSOLFDWHG LQ V\VWHPLF GLVRUGHUV 7KH EHWD DP\ORLG LQ
$O]KHLPHU¶V GLVHDVH DOSKD V\QXFOHLQ LQ 3DUNLQVRQ¶V GLVHDVH WKH 7$5 SURWHLQ LQ
IURQWRWHPSRUDO GHPHQWLD DQG FRSSHU ]LQF GLVPXWDVH LQ PRWRU QHXURQ GLVHDVH EHKDYHV OLNH
SULRQSURWHLQV3ULRQSURWHLQVOLNHEHKDYLRULVDOVRVHHQLQWKHWXPRXUVXSSUHVVRU3SURWHLQ
LQ FDQFHU DQG WKH LVOHW FHOO DVVRFLDWHG DP\ORLG LQ GLDEHWHV PHOOLWXV 3ULRQ GLVHDVHV DUH
FRQIRUPDWLRQDOGLVHDVHV
7KH51$YLURLGVJHQHUDWHGIURPDFWLQLGLFDUFKDHDFDQELQGWRSURWHLQVZLWKSULRQOLNH
GRPDLQV UHVXOWLQJ LQ JHQHUDWLRQ RI ULERQXFOHRSURWHLQV 5LERQXFOHRSURWHLQV ZLWK DEQRUPDO
FRQIRUPDWLRQFDQDFWDVDWHPSODWHIRUQRUPDOSURWHLQVZLWKSULRQOLNHGRPDLQVWRFKDQJHWR
DEQRUPDO FRQIRUPDWLRQ 7KLV UHVXOWV LQ JHQHUDWLRQ RI SULRQ SURWHLQV ZLWK DEQRUPDO
FRQIRUPDWLRQUHVLVWLQJO\VRVRPDOGLJHVWLRQDQGJHQHUDWLQJDP\ORLG7KHVHV\VWHPLFGLVHDVHV
DUH GXH WR DFWLQLGLF DUFKDHDO JHQHUDWHG 51$ YLURLG LQGXFHG SULRQ SURWHLQ JHQHUDWLRQ DQG
DP\ORLGRJHQHVLV 3ULRQ SURWHLQV KDYH EHHQ LPSOLFDWHG LQ V\VWHPLF GLVRUGHUV OLNH
QHXURGHJHQHUDWLRQV FDQFHU DQG PHWDEROLF V\QGURPH 7KH EHWD DP\ORLG LQ $O]KHLPHU¶V
GLVHDVHDOSKDV\QXFOHLQLQ3DUNLQVRQ¶VGLVHDVHWKH7$5SURWHLQLQIURQWRWHPSRUDOGHPHQWLD
DQGFRSSHU]LQFGLVPXWDVHLQPRWRUQHXURQGLVHDVHEHKDYHVOLNHSULRQSURWHLQV3ULRQSURWHLQV
OLNH EHKDYLRU LV DOVR VHHQ LQ WKH WXPRXU VXSSUHVVRU 3 SURWHLQ LQ FDQFHU DQG WKH LVOHW FHOO
DVVRFLDWHGDP\ORLGLQGLDEHWHVPHOOLWXV7KHSUHVHQWVWXG\VKRZVWKDWWKHVDPHSULRQSURWHLQ
PHFKDQLVPFDQRSHUDWHLQVFKL]RSKUHQLDDXWLVPDQGDXWRLPPXQHGLVHDVHV6SRUDGLF&-'LV
DOVR LQGXFHG E\ DFWLQLGLF DUFKDHD LQGXFHG 51$ YLURLGV $FWLQLGLF DUFKDHDO LQGXFHG 51$
YLURLGVJHQHUDWHGSULRQVFDQEHWUDQVIHUUHGEHWZHHQLQGLYLGXDOVLQGLFDWLQJWKHLQIHFWLYHQDWXUH
RI QHXURGHJHQHUDWLRQV FDQFHU PHWDEROLF V\QGURPH DXWRLPPXQH GLVHDVH DQG
QHXURSV\FKLDWULFGLVHDVHV

7KH DUFKDHDO SRUSK\ULQV FDQ PRGXODWH DP\ORLG IRUPDWLRQ 7KH DUFKDHDO FKROHVWHURO
R[LGDVH DFWLYLW\ ZDV LQFUHDVHG UHVXOWLQJ LQ JHQHUDWLRQ RI S\UXYDWH DQG K\GURJHQ SHUR[LGH
7KH S\UXYDWH JHWV FRQYHUWHG WR JOXWDPDWH DQG DPPRQLD E\ WKH *$%$ VKXQW SDWKZD\ 7KH
S\UXYDWHLVFRQYHUWHGWRJOXWDPDWHE\VHUXPJOXWDPDWHS\UXYDWHWUDQVDPLQDVH7KHJOXWDPDWH
JHWV DFWHG XSRQ E\ JOXWDPDWH GHK\GURJHQDVH WR JHQHUDWH DOSKD NHWRJOXWDUDWH DQG DPPRQLD
$ODQLQH LV PRVW FRPPRQO\ SURGXFHG E\ WKH UHGXFWLYH DPLQDWLRQ RI S\UXYDWH YLD DODQLQH
WUDQVDPLQDVH7KLVUHYHUVLEOHUHDFWLRQLQYROYHVWKHLQWHUFRQYHUVLRQRIDODQLQHDQGS\UXYDWH
FRXSOHGWRWKHLQWHUFRQYHUVLRQRIDOSKDNHWRJOXWDUDWHR[RJOXWDUDWHDQGJOXWDPDWH$ODQLQH
FDQ FRQWULEXWH WR JO\FLQH *OXWDPDWH LV DFWHG XSRQ E\ *OXWDPLF DFLG GHFDUER[\ODVH WR
JHQHUDWH *$%$ *$%$ LV FRQYHUWHG WR VXFFLQLF VHPLDOGHK\GH E\ *$%$ WUDQVDPLQDVH
6XFFLQLF VHPLDOGHK\GH LV FRQYHUWHG WR VXFFLQLF DFLG E\ VXFFLQLF VHPLDOGHK\GH
$/$ V\QWKDVH *O\FLQH DQG VXFFLQ\O &R$ DUH WKH VXEVWUDWHV IRU $/$ V\QWKHVLV 3RUSK\ULQ
DQG$/$LQKLELWVVRGLXPSRWDVVLXP$73DVH7KLVLQFUHDVHVFKROHVWHUROV\QWKHVLVE\DFWLQJ
XSRQ LQWUDFHOOXODU 65(%3 7KH FKROHVWHURO LV PHWDEROL]HG WR S\UXYDWH DQG WKHQ WKH *$%$
VKXQWSDWKZD\IRUXOWLPDWHXVHLQSRUSK\ULQV\QWKHVLV7KHSRUSK\ULQVFDQVHOIRUJDQL]HDQG
VHOI UHSOLFDWH LQWR PDFURPROHFXODU DUUD\V 7KH SRUSK\ULQ DUUD\V EHKDYH OLNH DQ DXWRQRPRXV
RUJDQLVP DQG FDQ KDYH LQWUDPROHFXODU HOHFWURQ WUDQVSRUW JHQHUDWLQJ $73 7KH SRUSK\ULQ
PDFURDUUD\V FDQ VWRUH LQIRUPDWLRQ DQG FDQ KDYH TXDQWDO SHUFHSWLRQ 7KH SRUSK\ULQ
PDFURDUUD\V VHUYHV WKH SXUSRVH RI DUFKDHDO HQHUJHWLFV DQG VHQVRU\ SHUFHSWLRQ
3URWRSRUSK\ULQH ELQGV WR WKH SHULSKHUDO EHQ]RGLD]HSLQH UHFHSWRU UHJXODWLQJ VWHURLG DQG
GLJR[LQ V\QWKHVLV ,QFUHDVHG SRUSK\ULQ PHWDEROLWHV FDQ FRQWULEXWH WR K\SHUGLJR[LQHPLD
'LJR[LQFDQPRGXODWHWKHQHXURLPPXQRHQGRFULQHV\VWHP
7KH JOREDO ZDUPLQJ UHVXOWV LQ LQFUHDVHG JURZWK RI DFWLQLGLF DUFKDHD DQG
QHDQGHUWKDOLVDWLRQ RI WKH KRPR VDSLHQ VSHFLHV 7KH DFWLQLGLF DUFKDHD VHFUHWHG YLURLGV FDQ
JHQHUDWH ULERQXFOHRSURWHLQV E\ ELQGLQJ WR SURWHLQV ZLWK SULRQ OLNH GRPDLQV 7KLV JHQHUDWHV
DP\ORLGRJHQHVLVDQGV\VWHPLFGLVHDVHVOLNHQHXURGHJHQHUDWLRQVFDQFHUPHWDEROLFV\QGURPH
DXWRLPPXQH GLVHDVH DQG QHXURSV\FKLDWULF GLVHDVHV 7KH ZLGHVSUHDG LQFLGHQFH RI WKHVH
V\VWHPLFGLVHDVHVOHDGVWRH[WLQFWLRQRIWKHQHDQGHUWKDOLVHGVSHFLHV

5HIHUHQFHV

0RUJDQ( 7KH1HDQGHUWKDOWKHRU\RIDXWLVP$VSHUJHUDQG$'+'
$QWKURSRORJ\
1HZ$QDWRPLVW%
+XPDQV3URF%LRO6FL±
+XP(YRO±

%RG\,6%1
6FL86$±

&+$37(5
(1'26<0%,27,&$5&+$($$1'+80$163(&,(6+202
1($1'(57+$/,6+2026$3,(16+2026$3,(1(;7,1&786$1'+202
1(21($1'(57+$/,6&/,0$7(&+$1*($1'(92/87,212)1(:63(&,(6


LQGROHEDVHGVWUXFWXUHVFDQVHOIRUJDQL]HRQSRUSK\ULQVFDIIROGVWRIRUPWHWUDPHULFVWUXFWXUHV
3RUSK\ULRQ FDQ JHQHUDWH PHODQRVRPH FRPSOH[HV DQG WKH\ FDQ IRUP VHOI RUJDQL]LQJ
DQGSRUSK\ULRQVIRUPLQJFRPSOH[FRORQ\QHWZRUNZLWKVSHFLDOL]HGIXQFWLRQV,WFDQIXQFWLRQ


YLURLGVDQGSULRQVZKLFKFDQVHOIRUJDQL]HWRIRUPDUFKDHDRQV7KHSRUSK\ULRQVWKHPVHOYHV

ZKLFKDUHOLQNHG7KHLQWHUJDODFWLFGDUNPDWWHUDQGGDUNHQHUJ\FRQWULEXWHVWRQHDUO\RI
WKH XQLYHUVH HQHUJ\ 7KH GDUN HQHUJ\ FRQWULEXWHV WR DQWLJUDYLW\ IRUFHV ZKLFK DUH UHSXOVLYH
DQG FRQWULEXWHV WR H[SDQVLRQ RI WKH XQLYHUVH 7KH GDUN HQHUJ\ GDUN PDWWHU DQG DQWLJUDYLW\
FRQWULEXWHWRWKHFROOHFWLYHXQFRQVFLRXVDQGKXPDQXQFRQVFLRXV7KHGDUNPDWWHULVPDGHXS
RI PHODQRWLF DUFKDHDO QHWZRUNV ZKLFK IRUP KXJH FORXGV LQ WKH XQLYHUVH 7KH PHODQRWLF
DUFKDHDDULVHDELRJHQHWLFDOO\IURPSRUSK\ULQVFDIIROGVZKLFKJHWVWUXFWXUHGRXWRIWKHTXDQWDO
IRDPVSRQWDQHRXVO\2QWKLVSRUSK\ULQVFDIIROGVWKH51$YLURLGVWKH'1$YLURLGVSULRQV
PHODQLQ DQG LVRSUHQRLGV RUJDQLVPV IRUP ZKLFK V\PELRVH WR IRUP WKH PHODQRWLF DUFKDHD
7KXV WKH SRUSK\ULRQ51$ YLURLGDO SRSXODWLRQ ZKLFK PHGLDWHV JUDYLW\ DQG FRQVFLRXVQHVV
JLYHVULVHWRPHODQRWLFDUFKDHDOFORXGVDQGDQWLJUDYLW\PHGLDWLQJWKHFROOHFWLYHXQFRQVFLRXV
7KXV JUDYLW\ JLYHV ULVH WR DQWLJUDYLW\ DQG FRQVFLRXVQHVV JLYHV ULVH WR WKH XQFRQVFLRXVQHVV
7KH PHODQRWLF DUFKDHD FDQ XVH DQWLJUDYLWDWLRQDO ZDYHV FRVPLF UDGLDWLRQ DQG JDPPD
UDGLDWLRQ DV HQHUJ\ VRXUFH IRU $73 V\QWKHVLV 7KH GDUN PDWWHU RI PHODQRWLF DUFKDHD
FRQWULEXWLQJ WR DQWLJUDYLW\ WKULYHV DQG PXOWLSOLHV LQ ]HUR JUDYLW\ VLWXDWLRQV 7KH PHODQRWLF
DUFKDHDFRQWDLQVPDJQHWLWHZKLFKFDQUHSXOVHHDFKRWKHUZKHQSURSHUO\DOLJQHGFRQWULEXWLQJ
WR WKH UHSXOVLYH DQWLJUDYLW\ 7KH DQWLJUDYLW\ LV UHODWHG WR WKH FROOHFWLYH XQFRQVFLRXV LQ WKH
ZRUOG DV ZHOO DV WKH KXPDQ XQFRQVFLRXV ZKLFK LV VWUXFWXUHG LQ WKH FHUHEHOOXP 7KH GDUN
PDWWHU FRQWDLQLQJ PHODQRWLF DUFKDHD JHWV WUDQVIHUUHG WR (XUDVLDQ ODQG PDVV DQG HDUWK E\

DVWHURLGDO KLWV DQG IRUPV JLDQW FRORQLHV DQG QHWZRUNV HYROYLQJ WR KRPR QHDQGHUWKDOLV 7KH
KRPRQHDQGHUWKDOLVEUDLQKDVDFHUHEHOODUGRPLQDQWVWUXFWXUHDQGIXQFWLRQDQGLVLPSXOVLYH
ZLWKDSUHGRPLQDQWXQFRQVFLRXVIXQFWLRQ7KHFRQVFLRXVIXQFWLRQDQGFHUHEUDOFRUWH[LVOHVV
GHYHORSHG LQ KRPR QHDQGHUWKDOLV DV WKH\ DUH UHWURYLUDO UHVLVWDQW 7KH DUFKDHD LQGXFHV VWHP
FHOO FRQYHUVLRQ DQG VHFUHWHV GLJR[LQ ZKLFK PDNHV WKH KRPR QHDQGHUWKDOLV FHOO SRSXODWLRQ
UHWURYLUDOUHVLVWDQW7KHGHILFLHQF\RI+(59VHTXHQFHVOHDGVWRPDOGHYHORSPHQWRIWKHKRPR
QHDQGHUWKDOLV FHUHEUDO FRUWH[ 7KH KRPR QHDQGHUWKDOLV DUH LPSXOVLYH FUHDWXUHV RI WKH
XQFRQVFLRXV PRGXODWHG E\ DQWLJUDYLWDWLRQDO ZDYHV 7KLV H[WUDWHUUHVWULDO LQWHOOLJHQFH RI
TXDQWDO FRPSXWLQJ FORXG FDQ VHH OLIH LQ GLIIHUHQW SDUWV RI WKH JDOD[LHV YLD DVWHURLGV DQG
PHWHRUV 7KH KXPDQ VSHFLHV HYROYHG RXW RI WKH VHHGHG DUFKDHDRQV IURP WKH H[WUDWHUUHVWULDO
LQWHOOLJHQFH RI WKH TXDQWDO FRPSXWLQJ FORXG IRUPHG RI WKH DUFKDHDO FRORQ\ RI DUFKDHDRQV
PDJQHWRVRPHV PHODQRVRPHV DQG SRUSK\ULRQV 7KLV ZRXOG KDYH UHDFKHG WKH HDUWK E\
PHWHRULFDQGDVWHURLGDOKLWV7KHKLWVRIWKHPHWHRUVDQGDVWHURLGVZRXOGKDYHRFFXUUHGILUVW
LQWKH(XUDVLDQODQGPDVVHVSHFLDOO\LQWKHQRUWKHUQ6LEHULDQWXQGUD7KHKRPRQHDQGHUWKDOLV
ZRXOGKDYHHYROYHGLQWKLV(XUDVLDQODQGPDVV$VWKH6LEHULDQ(XUDVLDQODQGPDVVZDVFROG
DQG GDUN WKH KRPR QHDQGHUWKDOLV ZHUH GHSLJPHQWHG DQG IDLUFRORXUHG KDLUOHVV ZLWK VSDUVH
UHG KDLU 7KH\ ZHUH GHILFLHQW LQ PHODQLQ DQG PHODQLQ LQGXFHG HQHUJ\ WUDQVGXFWLRQ DQG
SKRWRV\QWKHVLV OHDGLQJ WR V\QWKHVLV RI $73 7KH KRPR QHDQGHUWKDOLV ZDV HQHUJ\ GHSULYHG
DQG WKH QHDQGHUWKDOLF FRUWH[ ZDV SULPLWLYHO\ IRUPHG DQG WKH FHUHEHOOXP GRPLQDWHG WKHLU
FRJQLWLYHIXQFWLRQ7KHHQGRV\PELRWLFDUFKDHDOQHWZRUNLQWKHEUDLQZLWKLWVPDJQHWRVRPHV
PHODQRVRPHVDQGSRUSK\ULRQVIRUPDSULPLWLYHTXDQWDOFRPSXWLQJV\VWHP7KLVIXQFWLRQVDV
DQ LQIRUPDWLRQ UHFHSWLYH DQG VWRUDJH V\VWHP LQ FRPPXQLFDWLRQ ZLWK WKH H[WUDWHUUHVWULDO
LQWHOOLJHQFH RI WKH TXDQWDO FRPSXWLQJ FORXG LQ WKH LQWHUJDODFWLF VSDFH 7KH KRPR
QHDQGHUWKDOLV RZLQJ WR LWV ODFN RI PHODQRVRPHV DQG LQQDWH LPPXQLW\ EHFDPH UHODWLYHO\
VRFLHWLHV RI WKH 'UDYLGLDQV %DVTXH &HOWV +DUDSSDQV 6XPHULDQV DQG -HZV ZHUH IRVVLOL]HG
1HDQGHUWKDO7KHPHODQRVRPHV IXQFWLRQ DV WKH ILUVW OLQH RI GHIHQFH DJDLQVW LQIHFWLRQ DQG LV

GLIIHUHQW SDUWV RI WKH ZRUOG 7KH IRVVLOLVHG KRPR QHDQGHUWKDOLV DUH VXVFHSWLEOH WR LQFUHDVHG

7KHKRPRVDSLHQV



+RPRVDSLHQH[WLQFWXV


HYHQWXDOH[WLQFWLRQ

*OREDOZDUPLQJDQGV\PELRWLFHYROXWLRQ
7KXVJOREDOZDUPLQJOHDGVWRV\PELRWLFHYROXWLRQRIWKHVSHFLHV7KHH[WUDWHUUHVWULDO
LQWHUJDODFWLF TXDQWDO FRPSXWLQJ FORXG RI DUFKDHD IRUPV DQ LQWHOOLJHQW DQWKURSRPRUSKLF
REVHUYHU 7KH TXDQWDO FRPSXWLQJ FORXG RI DUFKDHD VHHGV WKH DUFKDHD LQWR WKH HDUWK WKURXJK
PHWHRULF DQG DVWHURLGDO LPSDFWV 7KH DUFKDHDO FRORQLHV HYHQWXDOO\ HYROYH LQWR PXOWLFHOOXODU
RUJDQLVPDQGIXUWKHULQWRKRPRQHDQGHUWKDOLV7KHKRPRQHDQGHUWKDOLVFDQEHFRQFHLYHGDVD
PXOWLFHOOXODU DUFKDHDO FRORQ\ 7KH KRPR QHDQGHUWKDOLV WKXV DULVHV LQ HDUWK LQ WKH (XUDVLDQ
ODQGPDVVRXWRIWKHVHHGHGDUFKDHDOFRORQLHVIURPWKHH[WUDWHUUHVWULDOLQWHUJDODFWLFDUFKDHDO
FRPSXWLQJ FORXG 7KH KRPR QHDQGHUWKDOLV LV HQHUJ\ GHSOHWHG 7KH KRPR QHDQGHUWKDOLV
VHFUHWHV WKH DUFKDHDO VWHURLGDO WUHSKRQH GLJR[LQ ZKLFK PRGXODWHV WKH QHXWUDO DPLQR DFLG
WUDQVSRUWHULQFUHDVLQJWU\SWRSKDQWUDQVSRUWRYHUW\URVLQH7KHKRPRQHDQGHUWKDOLVLVW\URVLQH
GHSOHWHGDQGGHILFLHQWLQPHODQLQV\QWKHVLV7KHUHLVQRPHODQLQLQGXFHG$73V\QWKHVLVIURP
HOHFWURPDJQHWLF ZDYHV DQG UDGLDWLRQ WUDQVGXFWLRQ 7KH KRPR QHDQGHUWKDOLV ZDV HQHUJ\
GHSOHWHG DQG WKHUHIRUH GLG QRW KDYH WKH OX[XU\ IRU WKH GHYHORSPHQW RI D PRGHUQ KXPDQ
FHUHEUDOFRUWH[7KHKRPRQHDQGHUWKDOLVLVDOVRUHWURYLUDOUHVLVWDQW7KHKRPRQHDQGHUWKDOLV
ZHUHGHILFLHQWLQHQGRJHQRXVUHWURYLUDOVHTXHQFHVFRQWULEXWLQJWRDULJLGDQGDG\QDPLFKRPR
QHDQGHUWKDOLFJHQRPH7KLVOHGWRDUHGXFWLRQLQV\QDSWLFFRQQHFWLYLW\DQGSRRUGHYHORSPHQW
RI WKH KRPR QHDQGHUWKDOLF FHUHEUDO FRUWH[ 7KH KRPR VDSLHQV HYROYHG RXW RI WHUUHVWULDO

VRXUFHVLQ$IULFDRXWRIVHOIUHSOLFDWLQJSRUSK\ULQFRPSOH[HV7KHVHOIUHSOLFDWLQJSRUSK\ULQ
FRPSOH[HV IRUP D VFDIIROG IRU VXSUDPROHFXODU FRPSOH[HV RI LVRSUHQRLG RUJDQLVP 51$
YLURLGV '1$ YLURLGV DQG SULRQV WR VHOI RUJDQLVH 7KH LVRSUHQRLG RUJDQLVP IRUPHG WKH FHOO
FRQWDLQHU ZKLFK V\PELRVHG WKH 51$ YLURLGV WKH '1$ YLURLGV DQG SULRQV WR IRUP WKH
SULPLWLYH HXNDU\RWLF DQG SURNDU\RWLF FHOO 7KH HXNDU\RWLF RUJDQLVP GHYHORSHG LQWR
PXOWLFHOOXODU FRORQLHV DQG HYHQWXDOO\ HYROYHG LQWR KRPR VDSLHQV LQ $IULFD 7KXV WKH KRPR
VDSLHQVLVDPXOWLFHOOXODUHXNDU\RWLFFRORQ\ZKLFKHYROYHGRYHUDSHULRGRIWLPH,QFDVHRI
RQFRJHQHVLVWKHKRPRVDSLHQVUHYHUWVWRWKHSULPLWLYHHXNDU\RWLFRUSURNDU\RWLFPXOWLFHOOXODU
FRORQ\VWDWH7KHKRPRVDSLHQVLQ$IULFDWKXVHYROYHGRXWRIWHUUHVWULDODELRJHQHWLFVRXUFHV
7KHKRPRVDSLHQVRZLQJWRWKHKDUVKWURSLFDOHQYLURQPHQWDORI$IULFDKDGLQFUHDVHGPHODQLQ
SLJPHQWDWLRQLQWKHVNLQIRUSURWHFWLRQIURP89UD\VDVDQHYROXWLRQDU\PHFKDQLVPDQGZHUH
EODFN7KHKRPRVDSLHQEUDLQHYROYHGRXWRIWKHHQHUJ\H[FHVVVWDWHSURGXFHGE\PHODQLQ
0HODQLQFDQWUDQVGXFHHOHFWURPDJQHWLFZDYHVDQGUDGLDWLRQDQGSURGXFH$73V\QWKHVLV7KH
H[FHVVHQHUJ\LQKRPRVDSLHQVOHGWRWKHUDSLGHYROXWLRQRIWKHKXPDQFHUHEUDOFRUWH[7KH
KRPR VDSLHQV DUH DOVR UHWURYLUDO VHQVLWLYH 7KH UHWURYLUDO LQIHFWLRQ OHG WR LQWHJUDWLRQ RI
UHWURYLUDO JHQHV LQWR WKH KRPR VDSLHQ JHQRPH SURGXFLQJ HQGRJHQRXV UHWURYLUDO VHTXHQFHV
IXQFWLRQLQJDVMXPSLQJJHQHV7KH+(59JHQHFRQWULEXWHVWRG\QDPLFLW\DQGIOH[LELOLW\RI
WKHKRPRVDSLHQJHQRPHFRQWULEXWLQJWRLQFUHDVHGV\QDSWLFFRQQHFWLYLW\DQGIRUPDWLRQRIWKH
KXPDQ FHUHEUDO FRUWH[ $ W\URVLQDVH PXWDWLRQ OHG WR WKH HYROXWLRQ RI KRPR VDSLHQ DOELQR
PXWDQWV 7KH KRPR VDSLHQ DOELQR PXWDQWV EHLQJ ZKLWH ZHUH XQDEOH WR ZLWKVWDQG WKH KRW
FOLPDWHRIWKH$IULFDQWURSLFVDQGPLJUDWHGWRWKHFROG(XURSHDQODQGPDVV7KLVFUHDWHGWKH
KRPRVDSLHQFLYLOL]DWLRQLQ(XURSH7KHUHZDVLQWHUEUHHGLQJEHWZHHQWKHKRPRVDSLHQDOELQR
PXWDQWV DQG KRPR QHDQGHUWKDOLV LQ VRXWKHUQ (XURSH SURGXFLQJ K\EULGV 7KH KRPR
QHDQGHUWKDOLV ZHUH PDWULDUFKDO ZKLOH KRPR VDSLHQV DOELQR PXWDQWV ZHUH SDWULDUFKDO 7KH
KRPRQHDQGHUWKDOLVVXFFXPEHGWRFLYLOL]DWLRQDOGLVHDVHVOLNHPHWDEROLFV\QGURPH[WXPRXUV
DXWRLPPXQHGLVHDVHDQGQHXURGHJHQHUDWLRQDQGEHFDPHH[WLQFWOHDYLQJIRVVLOL]HGPDWULOLQHDO
VRFLHWLHV OLNH WKH 'UDYLGLDQV &HOWV %DVTXHV DQG -HZV EHKLQG 7KH KRPR VDSLHQ DOELQR
PXWDQWV LQ WKH VHWWLQJ RI JOREDO ZDUPLQJ GHYHORSHG H[WUHPRSKLOLF HQGRV\PELRWLF DUFKDHDO
JURZWK DQG JHWV FRQYHUWHG WR D KRPR QHRQHDQGHUWKDOLF VSHFLHV E\ WKH SKHQRPHQD RI
V\PELRWLF HYROXWLRQ 7KH KRPR VDSLHQV VSHFLHV LQ $IULFD EHFRPHV OLDEOH WR HYHQWXDO
H[WLQFWLRQRZLQJWRLQIHFWLRQE\FDWDVWURSKLFHSLGHPLFVRI51$YLUXVHVDULVLQJIURPKRPR
QHDQGHUWKDOLV DQG KRPR QHRQHDQGHUWKDOLV UHVHUYRLUV (QGRV\PELRWLF DUFKDHDO JURZWK ZLOO
OHDGWRDVSHFLHVFKDQJHDQGJHQHUDWLRQRIWZRQHZVSHFLHVKRPRVDSLHQH[WLQFWXVDQGKRPR
QHRQHDQGHUWKDOLV 'HDWK DQG DJLQJ LQGLFDWHV KXPDQ HQGRJHQRXV DUFKDHDO RYHUJURZWK DQG

WDNHRYHU 7KLV ZLOO OHDG WR H[WLQFWLRQ RI WKH KXPDQ UDFH DV VXFK DQG SHUVLVWHQFH DV ZHOO DV
VXUYLYDO RI WKH DUFKDHDRQ FRORQ\ RI PHODQRVRPHV PDJQHWRVRPHV DQG SRUSK\ULRQV
IXQFWLRQLQJDVDTXDQWDOFRPSXWLQJFRORQ\DQGLQWHOOLJHQFH7KLVZLOOOHDGWRWKHWDNHRYHURI
WKHZRUOGDQGWKHXQLYHUVHE\WKHWHUUHVWULDODQGH[WUDWHUUHVWULDODUFKDHDRQTXDQWDOFRPSXWLQJ
FORXGV7KHV\PELRWLFHYROXWLRQZLOOHYHQWXDOO\OHDGWRH[WLQFWLRQRIDOOKXPDQVSHFLHVLQWR
HWHUQDODUFKDHDOFRORQLHVZKLFKFDQKDYHDZDYHSDUWLFOHH[LVWHQFH


QHRQHDQGHUWKDOLV

5HIHUHQFHV

&+$37(5
51$9,52,'6$1'(92/87,212)9,586(6352.$5<27(6
(8.$5<27(635,0$7(6$1'+80$16
,QWURGXFWLRQ
$ K\SRWKHVLV UHJDUGLQJ HQGRV\PELRWLF DFWLQLGLF DUFKDHD DV KDYLQJ HYROYHG IURP DQ
HDUO\ LVRSUHQRLG RUJDQLVPV E\ DELRJHQHVLV LV SUHVHQWHG LQ WKLV SDSHU $Q DFWLQLGF DUFKDHD
YLURLG PHGLDWHG PRGHO RI SURNDU\RWH YLUDO HXNDU\RWLF SULPDWH DQG KXPDQ HYROXWLRQ LV
GLVFXVVHG (QGRP\RFDUGLDO ILEURVLV (0) DORQJ ZLWK WKH URRW ZLOW GLVHDVH RI FRFRQXW LV
YLURLGV KDYH DOVR EHHQ GHPRQVWUDWHG WR SOD\ D UROH LQ WKH HWLRORJ\ RI WKHVH GLVHDVHV
$FWLQLGLF DUFKDHD KDV EHHQ UHODWHG WR WKH SDWKRJHQHVLV RI VFKL]RSKUHQLD PDOLJQDQF\
PHWDEROLF V\QGURPH [ DXWRLPPXQH GLVHDVH DQG QHXURQDO GHJHQHUDWLRQ $FWLQLGLF DUFKDHD
KDYHDPHYDORQDWHSDWKZD\DQGFKROHVWHUROFDWDEROLVP'DYLHVKDVSXWIRUZDUGWKHFRQFHSW
RIDVKDGRZELRVSKHUH RIRUJDQLVPVZLWKDOWHUQDWHELRFKHPLVWU\SUHVHQW LQ HDUWK LWVHOI $Q
DFWLQLGHGHSHQGHQWVKDGRZELRVSKHUHRIDUFKDHDDQGYLURLGVLQWKHDERYHPHQWLRQHGGLVHDVH
VWDWHV LV GHVFULEHG 0HWDO DFWLQLGHV LQ EHDFK VDQGV KDYH EHHQ SRVWXODWHG WR SOD\ D UROH LQ
DELRJHQHVLV $FWLQLGH PLQHUDO OLNH UXWLOH PRQD]LWH DQG LOOPHQLWH E\ VXUIDFH PHWDEROLVP
ZRXOGKDYHFRQWULEXWHGWRDELRJHQHVLV $ K\SRWKHVLV RI FKROHVWHURO DV WKHSULPDOSUHELRWLF
PROHFXOH V\QWKHVLVHG RQ DFWLQLGH VXUIDFHV ZLWK DOO RWKHU ELRPROHFXOHV DULVLQJ IURP LW DQG D
VHOIUHSOLFDWLQJFKROHVWHUROOLSLGRUJDQLVPDVWKHLQLWLDOOLIHIRUPLVSUHVHQWHG7KHDFWLQLGLF
DUFKDHDDQGYLURLGVZRXOGKDYHHYROYHGIURPWKHSULPLWLYHLVRSUHQRLGRUJDQLVP7KHRULJLQ
RI YLUXVHV SURNDU\RWHV HXNDU\RWHV SULPDWHV DQG KXPDQV IURP WKH LQLWLDO LVRSUHQRLG
RUJDQLVPGHULYHGDFWLQLGLFDUFKDHDLVSRVWXODWHG

0DWHULDOVDQG0HWKRGV
,QIRUPHG FRQVHQW RI WKH VXEMHFWV DQG WKH DSSURYDO RI WKH (WKLFV &RPPLWWHH ZHUH

GRQHE\$129$

5HVXOWV
DW]HURWLPH

0XUDPLFDFLG
FKDQJH
*URXS 'HFUHDVHZLWK
'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'1$FKDQJH 51$FKDQJH
'1$FKDQJH 51$FKDQJH
'R[\&LSUR 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

+0*&R$5 +0*&R$5
$73V\QWKDVH
'HFUHDVHZLWK
'R[\&LSUR
5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH
%LOH$FLGVFKDQJH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

3\UXYDWHFKDQJH
'HFUHDVHZLWK
'R[\&LSUR
5XWLOH 'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH
7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQK\GURJHQSHUR[LGHDQG
GHOWDDPLQROHYXOLQLFDFLG
+2 $/$ $/$
+2
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

3$+ 3$+ +7FKDQJH
+7FKDQJH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6FKL]R
6HL]XUH
$'
06
1+/
'0
$,'6
&-'
$XWLVP
(0)
)YDOXH
3YDOXH

'LVFXVVLRQ

RUJDQL]LQJ LQWR VHOI UHSOLFDWLQJ VXSUDPROHFXODU V\VWHPV WKH OLSLG RUJDQLVP &KROHVWHURO
JHQRPH


GLVHDVH
5HIHUHQFHV

+DQROG ' 5DQGLHV -: &RFRQXW FDGDQJFDGDQJ GLVHDVH DQG LWV YLURLG DJHQW
3ODQW'LVHDVH
3ODQW3DWKRORJ\
(XU-%LRFKHP
:lFKWHUVKlXVHU*%HIRUHHQ]\PHVDQGWHPSODWHVWKHRU\RIVXUIDFHPHWDEROLVP
0LFURELRO5HY
&KHP
9DQ1R6WUDQG
3XEOLVKHUV
3UHVV
±
86$
FDUERQ DWRPV ,VRODWLRQ RI GHQLWULI\LQJ EDFWHULD RQ SLYDOLF DFLG 'LPHWK\OSURSLRQLF
%LRFKHPLFDO6FLHQFHV

0LFURELRO

&KDJDVSDUDVLWHFDQWUDQVIHUWRKXPDQVDQGEHSDVVHGRQWRFKLOGUHQ,QKHULWDQFHRI'1$
7UDQVIHUUHGIURP$PHULFDQ7U\SDQRVRPHVWR+XPDQ+RVWV3/R621(
0RO%LRO5HY±
%0&%LRORJ\


&+$37(5
51$9,52,'$/&/28',17+(,17(567(//$563$&($1'+80$1
(92/87,21
,QWURGXFWLRQ
7KH LQWHUVWHOODU VSDFH LV ILOOHG ZLWK VWDU GXVW ZKLFK LV SRVWXODWHG WR EH RI ELRORJLFDO
RULJLQ )UHG +R\OH LQ KLV K\SRWKHVLV RI WKH OLIH FORXG KDV SXW IRUZDUG DQ H[WUD WHUUHVWULDO
RULJLQIRUOLIHRQHDUWK7KHH[LVWHQFHRIDQH[WUDWHUUHVWULDOIRUFHFRQWUROOLQJWKHJHQHVLVDQG
HYROXWLRQ RI OLIH RQ HDUWK KDV EHHQ SXW IRUZDUG E\ PDQ\ DXWKRUV 7KH ELRFRVP WKHRU\
SRVWXODWHVWKDWWKHFRQGLWLRQVLQWKHXQLYHUVHKDYHEHHQVRDGMXVWHGWRPDNHLWSRVVLEOHIRUOLIH
WR H[LVW RQ HDUWK DQG WKH XQLYHUVH 7KLV OHDGV WR WKH SRVWXODWH WKDW WKH XQLYHUVH H[LVWV DQG
UHSURGXFHVEHFDXVHRIOLIHZKLFKDFWVDVDTXDQWDOREVHUYHU7KLVSDSHUGHDOVZLWKWKHUROHRI
H[WUHPRSKLOLF DUFKDHD DQG 51$ YLURLGV H[WUXGHG IURP WKH DUFKDHDO FHOOV DV SULPLWLYH
DQWKURSRPRUSKLF REVHUYHUV PDNLQJ LW SRVVLEOH IRU WKH XQLYHUVH WR H[LVWV DQG HYROYH 7KH
KXPDQ UDFH LV GLYLGHG LQWR WZR VSHFLHV KRPR VDSLHQV DQG KRPR QHDQGHUWKDOLV 7KH KRPR
QHDQGHUWKDOLV LQWHUEUHG ZLWK KRPR VDSLHQV WR SURGXFH D K\EULG VSHFLHV 7KHUHIRUH WKHUH DUH
VSHFLHV ZLWK PRUH RI QHDQGHUWKDOLF RULJLQ DQG KRPR VDSLHQ VSHFLHV LQ HDUWK 7KH SUHYLRXV
VWXGLHVKDYHGHPRQVWUDWHGPDWULOLQHDOVRFLHWLHVZLWKPRUHRIQHDQGHWKDOLFRULJLQLQFRQWUDVW
WR SDWULOLQHDO VRFLHWLHV 7KH RULJLQ RI QHDQGHUWKDOLF VRFLHWLHV DQG KRPR VDSLHQ FRPPXQLWLHV
ZDV DVFULEHG WR V\PELRVLV 7KH 1HDQGHUWKDO VSHFLHV KDV PRUH RI H[WUHPRSKLOLF DUFKDHDO
V\PELRVLV RFFXUULQJ LQ WKH H[WUHPHV RI FOLPDWH OLNH WKH LFH DJH DQG JOREDO ZDUPLQJ 7KH
KRPR VDSLHQ VSHFLHV KDV PRUH RI LQWUDJHQRPLF 51$ YLURLGUHWURYLUDO V\PELRVLV ZKLFK
FRQWULEXWH WR WKH G\QDPLFLW\ RI WKH KRPR VDSLHQ JHQRPH 7KH 1HDQGHUWKDO VSHFLHV ZHUH
UHWURYLUDO UHVLVWDQW 7KH RULJLQ RI WKH DUFKDHD DQG WKH 51$ YLURLGV DUH SRVVLEO\ IURP WKH
LQWHUVWHOODU VSDFH DV DUFKDHDO FORXGV DQG 51$ YLURLGDO TXDQWDO FRPSXWLQJ FORXGV ZKLFK
IXQFWLRQ DV H[WUD WHUUHVWULDO LQWHOOLJHQFH 7KH 51$ YLURLGV DUH H[WUXGHG E\ DUFKDHDO FHOOV
7KH\ ZRXOG KDYH UHDFKHG WKH HDUWK YLD PHWHRURLGDO LPSDFWV DQG VHHGHG OLIH RQ HDUWK 7KH
DUFKDHDOFRORQLHVZRXOGKDYHRUJDQL]HGLQWRWKHKRPRQHDQGHUWKDOLFVSHFLHVLQ(XUDVLDDQG
51$YLURLGDOFRORQLHVZRXOGKDYHOHGWRWKHHYROXWLRQRIKRPRVDSLHQVSHFLHVLQ$IULFD
7KHSDSHUGHDOVZLWKWKLVK\SRWKHVLV

0DWHULDOVDQG0HWKRGV5HVXOWV
7KHEORRGVDPSOHVZHUHGUDZQIURPWKHKRPRQHDQGHUWKDOLFPDWULOLQHDOVSHFLHVDQG
WKH KRPR VDSLHQ VSHFLHV 7KH HVWLPDWLRQV GRQH LQ WKH EORRG VDPSOHV FROOHFWHG LQFOXGH

F\WRFKURPH ) DFWLYLW\ 7KH JHQHUDWLRQ RI 51$ YLURLGV LQ WKH SODVPD ZDV VWXGLHG 7KH
UHVXOWV VKRZHG WKDW WKH PDWULOLQHDO VSHFLHV RI QHDQGHUWKDOLF RULJLQ KDG PRUH RI DUFKDHDO
V\PELRVLVZKLOHWKHKRPRVDSLHQVSHFLHVKDGPRUHRI51$YLURLGDOV\PELRVLV
7DEOH&\WRFKURPH)DFWLYLW\
6XGUD 1RQVXGUD )YDOXH 3YDOXH
&<7) 0HDQ

51$FKDQJH 0HDQ

,QFUHDVHZLWK5XWLOH 6'
51$FKDQJH 0HDQ

'HFUHDVHZLWK'R[\ 6'
'LVFXVVLRQ
7KHTXDQWDOZDYHIRUPRUWKH+LJJVILHOGJLYHVPDVVDQGHQHUJ\WRWKHSDUWLFOHVOLNH
SURWRQV QHXWURQV DQG HOHFWURQV ZKHQ LW LQWHUDFWV ZLWK LW 7KH TXDQWDO ZDYH IRUPV FDQ
JHQHUDWH SRUSK\ULQV 3RUSK\ULQV FDQ KDYH D PDFURPROHFXODU DQG ZDYH H[LVWHQFH ZKLFK LV
LQWHUFRQYHUWLEOH 7KH SRUSK\ULQ DUUD\V FDQ VHOI RUJDQL]H DQG VHOI UHSURGXFH 7KH
PDFURPROHFXODU SRUSK\ULQ DUUD\V ZRXOG KDYH IXQFWLRQHG DV LQWHOOLJHQW RUJDQLVPV LQ WKH
LQWHUVWHOODUVSDFH7KHLURQSRUSK\ULQVFDQXQGHUJRSKRWRR[LGDWLRQDQGJHQHUDWHDPDJQHWLF
ILHOG7KHSKRWRQLFLQWHUDFWLRQZLWKWKHPDJQHWLFSRUSK\ULQVFDQJHQHUDWHEODFNKROHVZKLFK
FDQFROODSVHWRDSRLQWEHIRUHVLQJXODUGHQVLW\$WWKLVSRLQWRIWLPHLWFDQXQGHUJRUHERXQFH
SURGXFLQJ QHZ XQLYHUVHV 7KH SRUSK\ULQ RUJDQLVP ZLWK LWV TXDQWDO FRPSXWLQJ IXQFWLRQ
VHUYHGDVWKHLQLWLDODQWKURSRPRUSKLFREVHUYHURUWKHORWXVRI%UDKPD7KHSRUSK\ULQVZRXOG
KDYH IRUPHG D WHPSODWH IRU 51$ YLURLGV DQG SULRQV WR IRUP 7KLV ZRXOG KDYH JHQHUDWHG
SULPLWLYH DUFKDHDO IRUPV 7KH SULPLWLYH DUFKDHDO FHOO FDQ H[WUXGH 51$ YLURLGV JHQHUDWLQJ
51$YLURLGDOFORXGV7KHLQWHUJDODFWLFPDJQHWLFILHOGJHQHUDWHGE\WKHDUFKDHDDQGPDJQHWLF
SRUSK\ULQRUJDQLVPZRXOGKDYHFRQWULEXWHGWRWKHHYROXWLRQRIVWDUV\VWHPVDQGJDOD[LHV7KH
DUFKDHDO FORXGV DQG 51$ YLURLGDO FORXGV ZRXOG KDYH VHUYHG DV LQWHUVWHOODU LQWHOOLJHQFH
JXLGLQJWKHIRUPDWLRQRIVWDUV\VWHPVDQGJDOD[LHVDQGDOVRIXQFWLRQLQJDVDQWKURSRPRUSKLF
REVHUYHUV 7KH PHWHRULWLF LPSDFWV ZRXOG KDYH WUDQVIHUUHG WKH DUFKDHDO DQG 51$ YLURLGDO
FRORQLHV WR HDUWK 7KH\ ZRXOG KDYH VHOI RUJDQL]HG LQWR SODQW DQG DQLPDO VSHFLHV DV ZHOO DV

KRPR VDSLHQ DQG KRPR QHDQGHUWKDOLF VSHFLHV7KH KRPR QHDQGHUWKDOLF VSHFLHV DUH DUFKDHDO
GRPLQDQW7KHKRPRVDSLHQVSHFLHVDUH51$YLURLGDOGRPLQDQW
7KHELJEDQJFRVPRORJ\SRVWXODWHVWKHHYROXWLRQRIWKHXQLYHUVHIURPWKH+LJJVILHOG
+LJJVILHOGLVPDGHXSRI+LJJV%RVRQDQGWRSTXDUNV+LJJV%RVRQFDQH[LVWVLQWZRVWDWHV
7KHVWDEOHVWDWHZKLFKLVRIKLJKHQHUJ\ORZGHQVLW\FRPSDWLEOHZLWKWKHSUHVHQWH[LVWHQFHRI
XQLYHUVH DQG WKH XQVWDEOH VWDWH ZKLFK LV RI ORZ HQHUJ\ DQG KLJK GHQVLW\ 7KH XQLYHUVH LV
SUHVHQWO\LQWKHHGJHRIWKHVWDEOHVWDWH7KHORZHQHUJ\KLJKGHQVLW\VWDWHLVXQVWDEOHDQGFDQ
FDXVHFDWDVWURSKLFYDFXXPH[SDQVLRQOHDGLQJWRWKHHQGRIWKHXQLYHUVH7KH)URKOLFKPRGHO
RITXDQWDOEUDLQIXQFWLRQSRVWXODWHVWKHH[LVWHQFHRI%RVH(LQVWHLQFRQGHQVDWHVLQWKHEUDLQDW
QRUPDOWHPSHUDWXUH7KHUHDUHGLSRODUPDJQHWLWHDQGSRUSK\ULQPROHFXOHVLQWKHEUDLQZKLFK
LQ WKH FRQWH[W RI PHPEUDQH VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ FDQ OHDG RQWR D SXPSHG
SKRQRQV\VWHPSURGXFLQJ%RVH(LQVWHLQFRQGHQVDWHDQGERVRQVLQWKHEUDLQ7KLVERVRQFDQ
EHFRPHXQVWDEOHOHDGLQJRQWRFDWDVWURSKLFYDFXXPFROODSVHDQGWKHSRVVLEOHH[WLQFWLRQRIWKH
XQLYHUVH 7KH )URKOLFK PRGHO RI %RVH(LQVWHLQ FRQGHQVDWH IRUPHG RI PDJQHWLF GLSRODU
SRUSK\ULQV DQG DUFKDHDO PDJQHWLWH LQ FHOOXODU OLSLG HPXOVLRQV FDQ LQWHUDFW ZLWK SKRWRQV
JHQHUDWLQJEODFNKROHV7KLVEODFNKROHFDQFROODSVHWRVLQJXODULW\%XWWKHFROODSVHKDSSHQV
RQO\XSWRDSDUWLFXODUSRLQWIROORZLQJZKLFKWKHGHQVLW\RUVLQJXODULW\XQGHUJRHVDUHERXQFH
SURGXFLQJDQHZXQLYHUVHZLWKDQHZVHWRIXQLYHUVDOFRQVWDQWV7KXVWKHTXDQWDOPRGHORI
EUDLQIXQFWLRQFDQOHDGRQWRWKHGHVWUXFWLRQDQGUHSURGXFWLRQRIXQLYHUVHV7KHEUDLQFDQEH
FRQVLGHUHG WR EH D PXOWLFHOOXODU TXDQWDO FRPSXWLQJ DUFKDHDO QHWZRUN LQ WKH FDVH RI KRPR
QHDQGHUWKDOLV 7KH V\QDSWLF QHWZRUNV RI WKH EUDLQ SDUDOOHO WKH JDODFWLF QHWZRUNV RI WKH
XQLYHUVH 7KH EUDLQ IXQFWLRQV DV WKH XQLYHUVDO TXDQWDO FRPSXWHU DQG DQWKURSRPRUSKLF
REVHUYHU FUHDWLQJ DQG GHVWUR\LQJ DV ZHOO DV UHSURGXFLQJ XQLYHUVHV 7KLV RFFXUV WR D OHVVHU
H[WHQWLQWKHKRPRVDSLHQEUDLQ
7KH KRPR QHDQGHUWKDOLV VSHFLHV ZRXOG WDOO\ ZLWK WKH ELEOLFDO IDOOHQ DQJHOV DQG WKH
KRPR VDSLHQ VSHFLHV UHSUHVHQWLQJ WKH *RG DQJHO 7KH\ DUH EDVLFDOO\ YLVLWDWLRQV RI H[WUD
WHUUHVWULDO LQWHOOLJHQFH DV DUFKDHDO DQG 51$ YLURLGDO FRORQLHV 7KH KRPR QHDQGHUWKDOLV LV D
HYROYHG DUFKDHDO FRORQ\ QHWZRUN 7KH DUFKDHD H[WUXGHV 51$ YLURLGV 7KH KRPR VDSLHQ
VSHFLHVLV51$YLURLGDOGRPLQDQWZLWK51$YLURLGVLQWHJUDWHGLQWRWKHJHQRPLF'1$7KH
RUJDQL]DWLRQ RI UDFH DQG FDVWH V\VWHP LQ ,QGLD SRLQWV WR VXFK DQ RULJLQ 7KH KRPR
QHDQGHUWKDOLF VSHFLHV KDG DQ LQLWLDO KDELWDWLRQ LQ WKH ,QGLDQ RFHDQ FRQWLQHQW ZKLFK KDG D
FDWDVWURSKLFH[WLQFWLRQE\DUFKDHDOH[SDQVLRQLQWKHRFHDQFUXVWZKLFKJHQHUDWHGGDQJHURXV

WVXQDPLV GXULQJ LFH DJH 7KH 1HDQGHUWKDOV PLJUDWHG WR WKH (XUDVLDQ ODQGPDVV FUHDWLQJ WKH
FLYLOL]DWLRQ RI +DUDSSD 6XPHULD DQG (J\SW 7KH\ DUH WKH DVXUDV RI 5LJ YHGD 7KH KRPR
QHDQGHUWKDOLF VSHFLHV DUH IDLU PDWULOLQHDO DVH[XDO VSLULWXDO DOWUXLVWLF DQG FRPPXQLW\
RUJDQL]HG7KHVHFLYLOL]DWLRQVZHUHEDVLFDOO\PDWULOLQHDODQGFUHDWLYH7KH\ZHUHSDJDQLVWLF
VHFXODUDQGDWKHLVWLF7KH\ZHUHHQYLURQPHQWDOO\FRQVFLRXVOLYLQJLQTXDQWDOLQWHUDFWLRQZLWK
WKH ZRUOG DURXQG FUHDWLQJ D IHHOLQJ RI HQYLURQPHQWDO VSLULWXDO FRQVFLRXVQHVV 7KH VRFLHW\
IRUPHGRQWKLVEDVLVIXQFWLRQHGDVDQRUJDQLFZKROHLQTXDQWDOLQWHUDFWLRQZLWKRQHDQRWKHU
,W ZDV HTXDO MXVW DQG IXQFWLRQHG DV SULPLWLYH IRUP RI VRFLDOLVWLF VRFLHW\ 7KH KRPR
QHDQGHUWKDOLVVSHFLHVZDVHVVHQWLDOO\DVH[XDOZLWKWKHJHQGHUHTXDOLW\DQGPDWULOLQHDULW\7KH
DUFKDHDORYHUJURZWKFRQVHTXHQWWRJOREDOZDUPLQJFDQOHDGWRHYHQWXDOQHDQGHUWKDOLVDWLRQRI
WKHKXPDQVSHFLHVDQGEUDLQ7KHEUDLQQHXURQDOFRUWH[VKULQNVGXHWRTXDQWDOSHUFHSWLRQRI
HOHFWURPDJQHWLF ILHOGV ZKLFK SROOXWH WKH JOREDOL]HG ZDUP ZRUOG 7KHUH LV DOVR FRQVHTXHQW
FHUHEHOODU K\SHUWURSK\ &HUHEHOODU K\SHUWURSK\ FDQ OHDG RQWR VFKL]RSKUHQLD DQG DXWLVWLF
PRGHV RI EHKDYLRU &HUHEHOODU K\SHUWURSK\ FDQ OHDG WR FHUHEHOODU G\VIXQFWLRQ DQG PRWRU
DWD[LD7KHPRWRUDWD[LDDQGWKHFOXPVLQHVVRIPRYHPHQWDQGVSHHFKZRXOGKDYHOHDGWRWKH
HYROXWLRQ RI DEVWUDFW SDLQWLQJ GDQFH PXVLF V\PEROLF VSHHFK DQG HYHQWXDOO\ VSHHFK LQ WKH
1HDQGHUWKDOV7KHQHDQGHUWKDOLVDWLRQRIWKHKXPDQEUDLQFRQVHTXHQWWRJOREDOZDUPLQJOHDGV
WR HYROXWLRQ RI URFN PXVLF GDQFH DQG PRGHUQ IRUPV RI DEVWUDFW SDLQWLQJ 7KH 1HDQGHUWKDO
EUDLQ RZLQJ WR PDJQHWLWH PHGLDWHG LQFUHDVHG TXDQWDO SHUFHSWLRQ DUH PRUH VSLULWXDO 7KH
1HDQGHUWKDOFRPPXQLW\RZLQJWRTXDQWDOSHUFHSWLRQIXQFWLRQVDVRQHVLQJOHZKROHOHDGLQJWR
DOWUXLVP VSLULWXDOLW\ VRFLDOLVP JHQGHU HTXDOLW\ DQG HFRVSLULWXDOLW\ 7KLV UHSUHVHQWV WKH
FLYLOLVDWLRQDO PRGH RI WKH HDVWHUQ ZRUOG 7KH VRFLHWLHV HPHUJHG IURP WKH SRVVLEOH OHPXULDQ
ODQGPDVV $V WKH\ HYROYHG RXW RI H[WUD WHUUHVWULDO DUFKDHDO FRORQLHV DQG LQWHOOLJHQFH WKHLU
OHYHORIGHYHORSPHQWDQGLQWHOOLJHQFHZDVKLJK7KH\SRVVHVVHGWKHRULJLQDOODQJXDJHDQGWKH
FRQFHSW RI D KXPDQ *RGKHDG ZDV GHYHORSHG ILUVW LQ WKHLU FLYLOL]DWLRQ 7KH 5LJ YHGD LV WKH
ROGHVWVSLULWXDOERRNRIKXPDQNLQG0RVWRIWKH*RGVGHVFULEHGLQ5LJYHGDZHUHRIDVXULF
RULJLQ HYHQ 9DUXQD WKH SULQFLSDO *RG 7KH PDMRU SKLORVRSKLFDO HQWLWLHV RI %XGGKLVP DQG
-DLQLVPZKLFKDUHEDVLFDOO\DWKHLVWLFUHOLJLRQVSUHDFKLQJVRFLDOHTXDOLW\RQHQHVVDQGMXVWLFH
ZHUHHYROYHGE\WKHDVXUDV7KHKRPRVDSLHQVHYROYHGLQ$IULFDDQGPLJUDWHGWRWKH(XUDVLDQ
ODQGPDVV 7KH\ KDG EDVLFDOO\ DQ 51$ YLURLGDO V\PELRVLV LQ WKH EUDLQ ZKLFK JDYH ULVH WR D
SUDFWLFDO OHVV FUHDWLYH EUDLQ 7KH KRPR VDSLHQ VSHFLHV DUH SDWULOLQHDO FRPPRQVHQVLFDO DQG
LQGLYLGXDOLVWLF7KHKRPRVDSLHQFRPPXQLW\IRUPVWKHGHYDVRIWKHYHGLFOLWHUDWXUHDQGWKH
5LJ YHGD GHVFULEHV FODVKHV DQG ZDUV EHWZHHQ WKH DVXULF LQKDELWDQWV RI +DUDSSD DQG WKH
LQYDGLQJGHYDV7KH\RYHUUDQWKHQHDQGHUWKDOLFFLYLOL]DWLRQVDQGFUHDWHGDUDFLDOVRFLHW\ZLWK

WKHKRPRVDSLHQVDVWKHUXOLQJFODVVDQGWKH1HDQGHUWKDOVDVWKHXQGHUFDVWHRIVXGUDV7KH
VXGUDV IRUPHG WKH GLVFULPLQDWHG XQGHUEHOO\ RI WKH FLYLOL]DWLRQ 7KH OLWHUDWXUH ODQJXDJH DQG
KRO\ERRNVRIWKHDVXUDVZHUHWDNHQRYHUE\WKHXQFLYLOL]HGKRPRVDSLHQLFGHYDVZKRPDGHLW
LQWRWKHLURZQ7KHIXWXUHJHQHUDWLRQVRIVXGUDVZHUHSUHYHQWHGIURPOHDUQLQJWKHLUODQJXDJH
DQG ZRUVKLSLQJ WKHLU *RGV ZKLFK ZHUH WDNHQ RYHU E\ WKH KRPR VDSLHQLF GHYDV 7KH KRPR
VDSLHQLF GHYDV ZHUH WKHLVWLF LQGLYLGXDOLVWLF XQDOWUXLVWLF DQG KDG QR FRPPXQDO RU VRFLHWDO
FRQVFLRXVQHVV 7KLV VLJQLILHV WKH FLYLOLVDWLRQDO PRGH RI WKH ZHVWHUQ ZRUOG 7KH DUFKDHDO
JURZWKLQKRPRVDSLHQVLVOHVV7KLVOHDGVRQWROHVVRIPDJQHWLWHPHGLDWHGTXDQWDOSHUFHSWLRQ
DQGXQLYHUVDORQHQHVV7KLVFRQWULEXWHVWRWKHLQGLYLGXDOLW\VHOILVKQHVVXQDOWUXLVWLFEHKDYLRU
XQEULGOHGFDSLWDOLVPDQGWKHSDWULDUFKDOJHQGHUXQHTXDOVRFLHW\RIWKHKRPRVDSLHQZRUOG
7KHKRPRQHDQGHUWKDOLFVRFLHW\RZLQJWRLQFUHDVHGTXDQWDOSHUFHSWLRQLVVSLULWXDODQG
IHHOVWKHRQHQHVVRIWKHZRUOGDQGWKHJRGOLQHVVRILQGLYLGXDOKXPDQEHLQJV7KLVOHDGVRQWR
WKH SKLORVRSK\ RI %XGGKLVP ZLWK LWV VHQVH RI DWKHLVP DQG KXPDQ YDOXHV %XGGKLVP DQG
-DLQLVPDVZHOODVWKH0DXU\DQHPSLUHUHSUHVHQWVYLFWRU\IRUWKHDVXULF1HDQGHUWKDOVRUWKH
VXGUDV7KH%XGGKLVWDQG+LQGXVRFLHW\RIQHDQGHUWKDOLFZRUOGFRQVLGHUHGJRRGDQGHYLODV
SDUW RI WKH VDPH TXDQWDO ZRUOG UHSUHVHQWLQJ WKH XQLYHUVDO VRXO 7KH JRGKHDG DQG WKH IDOOHQ
DQJHOEHORQJWRWKHVDPHTXDQWDOZRUOGRIWKHXQLYHUVDOVRXO7KHFRQFHSWRIULJKWDQGZURQJ
DUHQRWDEVROXWHFRQWUDLQGLFDWLRQVEXWSDUWRIWKHVDPHTXDQWDOZRUOG7KHTXDQWDOSHUFHSWLRQ
SURGXFHV LQIRUPDWLRQ VWRUDJH DIWHU PRUWDOLW\ DQG WKH LGHD RI UHLQFDUQDWLRQ 7KH LQFUHDVHG
ZRUOG RI TXDQWDO SHUFHSWLRQ PHGLDWHG RQHQHVV DQG WKH FKROHVWHURO FDWDEROL]LQJ DUFKDHDO
RYHUJURZWK OHDGLQJ WR VH[ KRUPRQH GHILFLHQF\ SURGXFHV WKH JHQGHU HTXDO DVH[XDO ZRUOG
6H[XDOLW\ LV QRW FRQVLGHUHG DV VRPHWKLQJ DSDUW IURP UHOLJLRQ DV HYLGHQFHG E\ WKH WDQWULF
VFKRROVRI+LQGXLVPDQG%XGGKLVP,WZDVFRQVLGHUHGDVDIRUPRIH[SHULHQFLQJRQHQHVVDV
LQGLFDWHGE\LGHDVVXFKDV.XQGDOLQL7KHLQFUHDVHGTXDQWDOSHUFHSWLRQOHDGVWRDIHHOLQJRI
RQHQHVV ZKLFK SURGXFHV XQLYHUVDO XQLW\ 7KHUH LV QR ZDU EXW XQLYHUVDO SHDFH (DVWHUQ
VRFLHWLHV OLNH &KLQD DQG ,QGLD DUH EDVLFDOO\ TXDQWDO GRFLOH VRFLHWLHV ZLWK ZDU EHLQJ
XQFRPPRQ7KHPDMRUZDUVLQ+LQGXKLVWRU\OLNHWKH0DKDEKDUDWDDQG5DPD\DQDZDUZHUH
WKRVHEHWZHHQWKHFRORQL]LQJKRPRVDSLHQGHYDVDQGWKHQDWLYHSHDFHIXO1HDQGHUWKDOV7KH
SDQGDYDDUP\ZHUHWKHKRPRVDSLHQGHYDVDQGWKH.DXUDYDDUP\WKHQHDQGHUWKDOLFQDWLYHV
7KH*RG5DPDZDVWKHKHDGRIKRPRVDSLHQGHYDVDQGWKH5DYDQDWKHOHDGHURIWKHQDWLYH
1HDQGHUWKDOV7KH GHYDV ZHUH WKH KHDG RI WKH FRORQL]LQJ KRPR VDSLHQV IURP (XURSH 7KH\
FRXOG ZLQ WKH 0DKDEKDUDWD DQG 5DPD\DQD ZDUV DQG WKH VXGULF QHDQGHUWKDOLF QDWLYH
SRSXODWLRQ ZDV UHQGHUHG WR VODYHU\ IRU JHQHUDWLRQ WR FRPH 7KH LQGHSHQGHQFH VWUXJJOH DQG

*DQGKL¶V DWWLWXGH WR WKH ORZHU FDVWH DQG KDULMDQV ZHUH D SDUW RI WKH VDPH SKHQRPHQD 7KH
KRPRVDSLHQZRUOGRQWKHRWKHUKDQGGXHWRUHGXFHGTXDQWDOSHUFHSWLRQZDVLQGLYLGXDOLVWLF
*RRGDQGHYLOZHUHDEVROXWHO\GLIIHUHQWDVWKH*RGDQGWKHIDOOHQDQJHO7KHUHZDVQREHOLHI
LQUHLQFDUQDWLRQDQGVH[XDOLW\ZDVFRQVLGHUHGDVWDERR7KHKRPRVDSLHQVRFLHW\RZLQJWRLWV
UHGXFHGTXDQWDOSHUFHSWLRQDQGLQGLYLGXDOLVWLFQDWXUHGLVFRYHUHGZDUVDQGVODYHU\:DUVDUH
HVVHQWLDOO\DIHDWXUHRIVHPLWLFVRFLHWLHVDQGUHOLJLRQ7KHKRPRVDSLHQGHYDVDUHFDSLWDOLVWLF
DQG ULJKWLVW LQ WKHLU DWWLWXGH WR VRFLHW\ ZKLOH WKH KRPR QHDQGHUWKDOLV LV FRPPXQLVWLF DQG
VRFLDOLVWLF 7KH ZDU EHWZHHQ FDSLWDOLVP DQG VRFLDOLVP LV UHSUHVHQWDWLYH RI WKDW EHWZHHQ
1HDQGHUWKDOV DQG KRPR VDSLHQV 7KH SKHQRPHQD RI JOREDO ZDUPLQJ DUFKDHDO RYHUJURZWK
DQG QHDQGHUWKDOLVDWLRQ RI KRPR VDSLHQV ZLOO OHDG WR D PRUH SHDFHIXO JOREDOL]HG VSLULWXDO
JHQGHU HTXDO DQG DOWUXLVWLF VRFLHW\ %XW WKH 1HDQGHUWKDO GRPLQDWLRQ UHVXOWLQJ IURP JOREDO
ZDUPLQJFDQOHDGWRWKHVRFLHW\¶VRZQGHPLVH
7KH SKHQRPHQD RI FOLPDWH FKDQJH DQG JOREDO ZDUPLQJ OHDGV RQWR DUFKDHDO
PXOWLSOLFDWLRQDQGQHDQGHUWKDOLVDWLRQRIWKHKXPDQUDFH$UFKDHDOJURZWKRFFXUVLQH[WUHPHV
RI FOLPDWH WKH LFH DJH DQG LQ WLPHV RI JOREDO ZDUPLQJ 7KLV UHVXOWV LQ D UHWXUQ WR DVXULF
FXOWXUHDQGFLYLOL]DWLRQZLWKLWVVSLULWXDOHQYLURQPHQWDOO\FRQVFLRXVVRFLDOLVWLFDVH[XDODQG
JURXS LGHQWLW\ 7KH PRGHUQ ZRUOG LV UHSUHVHQWHG E\ WKH .DOL \XJD ZKHUH WKH VXGUDV RU WKH
1HDQGHUWKDOVUHWXUQWRDSRVLWLRQRISRZHUDQGJOREDOVLJQLILFDQFH7KLVUHSUHVHQWVWKHULVHRI
WKHDVXULFQHDQGHUWKDOLFVXGULFVODYHV7KLVLVUHSUHVHQWHGE\WKHULVHRIQHDQGHUWKDOLFHDVWHUQ
VRFLHWLHVRI&KLQDDQG,QGLDDVZHOODVWKHGHFOLQHRIWKHKRPRVDSLHQ:HVWDQG$IULFD7KH
QHDQGHUWKDOLVDWLRQ RI KRPR VDSLHQV GXH WR DUFKDHDO JURZWK FDQ OHDG WR KXPDQ GLVHDVH DQG
HYHQWXDO H[WLQFWLRQ 7KH DUFKDHD FDWDEROLVHV FKROHVWHURO WR JHQHUDWH GLJR[LQ 'LJR[LQ
IXQFWLRQV DV WKH QHDQGHUWKDOLF KRUPRQH 'LJR[LQ SURGXFHV PHPEUDQH VRGLXP SRWDVVLXP
$73DVHLQKLELWLRQDQGLQFUHDVHGLQWUDFHOOXODUFDOFLXPDQGUHGXFHGPDJQHVLXP0DJQHVLXP
GHILFLHQF\ OHDGV WR PLWRFKRQGULDO G\VIXQFWLRQ YDVRVSDVP G\VOLSLGHPLD DQG PHWDEROLF
V\QGURPH [ 7KH LQFUHDVH LQ LQWUDFHOOXODU FDOFLXP OHDGV WR RQFRJHQH DFWLYDWLRQ DQG
PDOLJQDQFLHV 7KH LQFUHDVH LQ LQWUDFHOOXODU FDOFLXP FDQ DFWLYDWH 1).% OHDGLQJ WR LPPXQH
DFWLYDWLRQ DQG DXWRLPPXQH GLVHDVH 7KH LQFUHDVHG LQWUDFHOOXODU FDOFLXP FDQ DFWLYDWH WKH
FDVSDVH FDVFDGH OHDGLQJ RQWR FHOO GHDWK DQG GHJHQHUDWLRQV 7KH LQFUHDVH LQ LQWUDFHOOXODU
FDOFLXP FDQ LQFUHDVH V\QDSWLF UHOHDVH RI PRQRDPLQH QHXURWUDQVPLWWHUV SURGXFLQJ
VFKL]RSKUHQLD DQG DXWLVP 7KH LQFUHDVH LQ DUFKDHDO JURZWK FDQ SURGXFH WKH :DUEXUJ
SKHQRW\SHZLWKLQFUHDVHGJO\FRO\VLVDQGPLWRFKRQGULDOG\VIXQFWLRQ7KHLQFUHDVHGJO\FRO\VLV
FDQDFWLYDWHWKHO\PSKRF\WHSURGXFLQJDXWRLPPXQHGLVHDVHDVO\PSKRF\WHVDUHGHSHQGHQWRQ

JO\FRO\VLVIRUHQHUJ\QHHGV7KHFDQFHUFHOOVDOVRGHSHQGRQJO\FRO\VLVIRUHQHUJ\QHHGV7KH
:DUEXUJ SKHQRW\SH FDQ OHDG RQWR LQFUHDVH LQ PDOLJQDQFLHV 7KH :DUEXUJ SKHQRW\SH DQG
LQFUHDVHGJO\FRO\VLVFDQOHDGWRSRO\ULERV\ODWHGJO\FHUDOGHK\GHSKRVSKDWHGHK\GURJHQDVH
PHGLDWHG FHOO GHDWK DQG GHJHQHUDWLRQ 7KH :DUEXUJ SKHQRW\SH FDQ OHDG WR PDJQHVLXP
GHILFLHQF\UHODWHGLQVXOLQUHVLVWDQFHDQGPLWRFKRQGULDOG\VIXQFWLRQOHDGLQJWRVFKL]RSKUHQLD
7KXVDUFKDHDOPHGLDWHGK\SHUGLJR[LQHPLDDQG:DUEXUJSKHQRW\SHFDQOHDGWRFLYLOLVDWLRQDO
GLVHDVHVLQWKH1HDQGHUWKDOSKHQRW\SHOHDGLQJRQWRLWVH[WLQFWLRQ7KHDUFKDHDORYHUJURZWKLQ
WKH RFHDQ FUXVW RZLQJ WR JOREDO ZDUPLQJ FDQ OHDG WR UHOHDVH RI ODUJH DPRXQWV RI PHWKDQH
SURGXFLQJRFHDQLFHDUWKTXDNHVWVXQDPLVDQGGHVWUXFWLRQDQGVSOLWWLQJXSRIFRQWLQHQWV7KLV
OHDGV RQWR WKH FDWDVWURSKLF HQG RI WKH ZRUOG $V DOVR WKH DUFKDHDO SRUSK\ULQ DQG PDJQHWLWH
PHGLDWHG )URKOLFK PRGHO RI %RVH(LQVWHLQ FRQGHQVDWHV LQ WKH EUDLQ JHQHUDWHG ERVRQV FDQ
XQGHUJR FDWDVWURSKLF YDFXXP GHFD\ OHDGLQJ WR XQLYHUVDO H[WLQFWLRQ 7KH PDJQHWLF GLSRODU
SRUSK\ULQV DQG PDJQHWLWH LQ WKH OLSLG HPXOVLRQ RI EUDLQ FHOOV FDQ EH SKRWRQLFDOO\ H[FLWHG
JHQHUDWLQJEODFNKROHV7KHVHEODFNKROHVGRQ¶WUHDFKDEVROXWHVLQJXODULW\EXWQHDUWKDWSRLQW
FDQ XQGHUJR D SKHQRPHQRQ FDOOHG UHERXQFH UHSURGXFLQJ WKH XQLYHUVH 7KXV WKH
QHDQGHUWKDOLVDWLRQ RI KXPDQ EUDLQ DQG JHQHUDWLRQ RI %RVH(LQVWHLQ FRQGHQVDWH RI WKH
)URKOLFKPRGHOFDQOHDGWRH[WLQFWLRQDQGUHSURGXFWLRQRIWKHXQLYHUVH

5HIHUHQFHV

0RUJDQ ( 7KH1HDQGHUWKDOWKHRU\ RIDXWLVP $VSHUJHU DQG $'+'

$QWKURSRORJ\
1HZ$QDWRPLVW %
+XPDQV3URF%LRO6FL±
+XP(YRO±


%RG\ ,6%1
*HQXV+RPR(YLGHQFH IURP WKH1HDQGHUWDO DQG 0RGHUQ/LQHDJHV3URF1DWO$FDG
6FL86$±

&+$37(5
7+((1'26<0%,27,&$5&+$($)58&726(',6($6($1'*/2%$/
:$50,1*5(/$7,21725(7529,5$/$1'35,21',6($6(6
SRUSK\ULQV IRUP D WHPSODWH IRU WKH IRUPDWLRQ RI 51$ YLURLGV '1$ YLURLGV SULRQV
DUFKDHD FDQ IXUWKHU LQGXFH +,) DOSKD DOGRVH UHGXFWRVH DQG IUXFWRO\VLV UHVXOWLQJ LQ IXUWKHU

7KH GHFUHDVHG LQ DUFKDHDO GHQVLW\ LQ WKH FRORQLF PLFURELRWD DQG HQGRV\PELRWLF
DUFKDHDO FRPPXQLW\ OHDGV WR PRGHUDWHO\ LQFUHDVHG GLJR[LQ V\QWKHVLV DQG WKH DFTXLUHG
LPPXQRGHILFLHQF\ V\QGURPH $ KLJK ILEUH GLHW FDQ OHDG WR GHFUHDVH LQ DUFKDHDO FRORQLF
GHQVLW\DQGGHFUHDVHLQHQGRV\PELRWLFDUFKDHD$KLJKILEUHGLHWSURGXFHVLQFUHDVHGEXW\UDWH
ZKLFKVWUHQJWKHQVWKHJXWEORRGDQGEUDLQEORRGEDUULHUOHDGLQJWRGHFUHDVHGHQGRV\PELRWLF
DUFKDHDOGHQVLW\DQGSUHGLOHFWLRQWR$,'6LQWKHKRPRVDSLHQSRSXODWLRQ$KLJKILEUHGLHW
JHQHUDWHVFRORQLFEXW\UDWHZKLFKVHHSVLQWRWKHEORRGDQGEUDLQSURGXFLQJ+'$&LQKLELWLRQ
DQG HQGRJHQRXV UHWURYLUDO H[SUHVVLRQ 7KH HQGRJHQRXV UHWURYLUDO SDUWLFOHV FDQ JHW
UHFRQVWLWXWHGDQGHQFDSVXODWHGLQSKRVSKROLSLGPHPEUDQHVFRQWULEXWLQJWRUHWURYLUDOVWDWH$
ORZ ILEUH GLHW OHDGV WR LQFUHDVHG GHQVLW\ RI FRORQLF DUFKDHDO SRSXODWLRQ DQG GHFUHDVHV WKH
FORVWULGLDOFOXVWHUVJHQHUDWLQJEXW\UDWH7KHGHILFLHQF\RIEXW\UDWHOHDGVWREUHDFKLQJRIWKH
EORRGEUDLQEDUULHUDQGJXWEORRGEDUULHUSURGXFLQJLQFUHDVHGHQGRV\PELRWLFDUFKDHDOJURZWK
7KH UHGXFWLRQ LQ JXW FORVWULGLD JHQHUDWHG EXW\UDWH UHVXOWV LQ UHGXFHG +'$& LQKLELWLRQ DQG
+(59H[SUHVVLRQ7KHUHZRXOGEHOHVVGHQVLW\RISKRVSKROLSLGERXQGHQFDSVXODWHG+(59
SDUWLFOHV LQ WKH EORRG DQG WLVVXH VWDWHV 7KH LQFUHDVH LQ HQGRV\PELRWLF DUFKDHDO JURZWK LQ
SRSXODWLRQV FRQVXPLQJ D ORZ ILEUH GLHW OHDGV WR ODUJH LQFUHDVHV LQ GLJR[LQ SURGXFLQJ D
K\SHUGLJR[LQHPLFVWDWH,QORZILEUHGLHWFRQVXPLQJSRSXODWLRQWKHHQGRV\PELRWLFDUFKDHDO
GHQVLW\LVDOVRYHU\KLJK7KHORZPLFURIORUDEXW\UDWHLQGXFHG+'$&LQKLELWLRQFRQWULEXWHV
WR UHGXFHG +(59 H[SUHVVLRQ DQG UHGXFWLRQ LQ VL]H RI WKH FHUHEUDO FRUWH[ DQG D GRPLQDQW
FHUHEHOODUIXQFWLRQ7KLVSURGXFHVDQHDQGHUWKDOLVHGEUDLQDQGSKHQRW\SHLQSRSXODWLRQVRQD
ORZILEUHGLHW7KHQHDQGHUWKDOLVHGSKHQRW\SHWKXVFRQWULEXWHVWRUHWURYLUDOUHVLVWDQFHDQGWKH
KRPR VDSLHQV IRU WKH SKHQRW\SH FRQWULEXWHV WR UHWURYLUDO GLVHDVH 7KH UHGXFHG +(59
H[SUHVVLRQ LQ QHDQGHUWKDOLVHG SKHQRW\SH FRQWULEXWHV WR D FHUHEHOODU GRPLQDQW EUDLQ DQG
LQFUHDVHG+(59H[SUHVVLRQLQWKHKRPRVDSLHQSKHQRW\SHFRQWULEXWHVWRDFHUHEHOODUFRUWLFDO
GRPLQDQWEUDLQ

OHDGV WR KXPDQ GLVHDVH OLNH PHWDEROLF V\QGURPH ; QHXURGHJHQHUDWLRQV VFKL]RSKUHQLD DQG
QHDQGHUWKDOLVHG GLVHDVHG VWDWHV OLNH PHWDEROLF V\QGURPH ; QHXURGHJHQHUDWLRQV
QDWLRQDOLWLHVDQGWKHVSHFLHVLWVHOILVGHWHUPLQHGE\DUFKDHDODQGRWKHUEDFWHULDOV\PELRVLV

+DUDSSDQ'UDYLGLDQVRFLHWLHVDQGWKHSDWULDUFKDO$U\DQVRFLHW\7KHPDWULOLQHDO+DUDSSDQ
PHWDEROLF V\QGURPH ; QHXURGHJHQHUDWLRQ FDQFHU DXWLVP DQG VFKL]RSKUHQLD 7KH

KXPDQDQGDQLPDOHYROXWLRQ

LGHQWLW\VLQFHLGHQWLFDOEXWXQFRORQL]HGKRVWSRSXODWLRQUHPDLQVVXVFHSWLEOHWRDNLOOLQJDFWLRQ
IRU DGGLFWLRQSHUVLVWHQFHSURWHFWLRQ DQG O\WLFNLOOLQJ 9LURLGV FDQ IXQFWLRQ DV FRQVRUWLD DQ

HPHUJHQFHRIFRPPRQO\VKDUHGFRGHXVHJURXSPHPEHUVKLSDQGFROOHFWLYHOLYLQJIXQFWLRQ

FRPSOH[ V\QDSWLF FRQQHFWLYLW\ LQ WKH KRPR VDSLHQV 7KLV OHDGV RQWR D ORJLFDO

QHWZRUNV GHWHUPLQH KRPR VDSLHQ KRPR QHDQGHUWKDOLV VSHFLHV UDFLDO FDVWH FRPPXQLW\
QDWLRQDO VH[XDO PHWDEROLF SKHQRW\SLF LPPXQH JHQRW\SLF QHXURQDO SV\FKLDWULF
SV\FKRORJLFDO DQG LQGLYLGXDO LGHQWLW\ 7KH DUFKDHD VHFUHWHV WKH WUHSKRQH GLJR[LQ ZKLFK FDQ
HGLWWKH51$YLURLGVDQGJHQHUDWHQHZVHTXHQFHV$UFKDHDOGLSRODUPDJQHWLWHDQGSRUSK\ULQV
LQWKHVHWWLQJRIGLJR[LQLQGXFHGPHPEUDQHVRGLXPSRWDVVLXP$73DVLQKLELWLRQFDQSURGXFH
D SXPSHG SKRQRQ V\VWHP PHGLDWHG TXDQWDO SHUFHSWLYH VWDWH DQG TXDQWDO FRPPXQLFDWLRQ LQ
WKH51$YLURLGDOV\PELRWLFV\VWHPJHQHUDWLQJQHZVHTXHQFHVE\VWHURLGDOGLJR[LQHQ]\PDWLF
7KH URRWV RI :HVWHUQ FLYLOLVDWLRQDO GLVHDVH FDQ EH UHODWHG WR WKH VWDUYDWLRQ RI WKH

PRGHUQ SODJXHV RI FLYLOLVDWLRQ PHWDEROLF V\QGURPH VFKL]RSKUHQLD DXWLVP FDQFHU


RUJDQHOOH FDOOHG WKH QHXURWUDQVPLQRLG 7KH IUXFWRO\WLF LQWHUPHGLDWHV JO\FHUDOGHK\GHV
FKROHVWHURO&KROHVWHUROLVFDWDEROL]HGE\DUFKDHDOFKROHVWHUROR[LGDVHVWRJHQHUDWHGLJR[LQ
JOXFXURQLFDFLG'JOXFXURQLFDFLGLVFRQYHUWHGWR/JXORQDWHE\HQ]\PHDOGRNHWRUHGXFWDVHV
/JXORQDWH LV FRQYHUWHG WR /JXORQRODFWRQH E\ ODFWRQDVH /JXORQRODFWRQH LV FRQYHUWHG WR
DVFRUELF DFLG E\ WKH DFWLRQ RI DUFKDHDO /JXOR R[LGDVH 7KH YLWDPLQ ( LV V\QWKHVL]HG IURP
VKLNLPDWH ZKLFK LV FRQYHUWHG WR W\URVLQH DQG WKHQ WR SDUDK\GUR[\ SKHQ\O S\UXYLF DFLG
3DUDK\GUR[\SKHQ\OS\UXYLFDFLGLVFRQYHUWHGWRKRPRJHQWLVDWH+RPRJHQWLVDWHLVFRQYHUWHG
WR PHWK\O SK\W\O EHQ]RTXLQRQH ZKLFK LV FRQYHUWHG WR DOSKD WRFRSKHURO PHWK\O
SK\W\O EHQ]RTXLQRQH LV FRQYHUWHG WR PHWK\O SK\W\O EHQ]RTXLQRQH DQG JDPPD

HQGRV\PELRWLF DUFKDHD DQG WKH JHQHUDWHG 51$ YLURLGV LQGXFH DOGRVH UHGXFWDVH ZKLFK
JOXFRVHWRIUXFWRVH+\SR[LFVWUHVVRUDQHURELFFRQGLWLRQVLQGXFHV+,)DOSKDZKLFKDFWLYDWHV
NHWRKH[RNLQDVH & ZKLFK SKRVSKRU\ODWHV IUXFWRVH )UXFWRVH LV DFWHG XSRQ E\ IUXFWRNLQDVH
ZKLFK FRQYHUWV IUXFWRVH WR IUXFWRVH SKRVSKDWH )UXFWRVH SKRVSKDWH LV FRQYHUWHG WR
GLK\GUR[\ DFHWRQH SKRVSKDWH DQG JO\FHUDOGHK\GHV SKRVSKDWH ZKLFK LV FRQYHUWHG WR
S\UXYDWHDFHW\O&R$DQGFLWUDWH&LWUDWHLVXVHGIRUOLSLGV\QWKHVLV)DWGHSRVLWLRQRFFXUVLQ
WKH YLVFHUDO RUJDQV OLNH WKH OLYHU KHDUW DQG NLGQH\ 7KHUH LV QR VXEFXWDQHRXV IDW GHSRVLW
)UXFWRVH PHWDEROLVP E\SDVVHV SKRVSKRIUXFWRNLQDVH ZKLFK LV LQKLELWHG E\ FLWUDWH DQG $73
)UXFWRVH PHWDEROLVP LV WKHUHIRUH QRW XQGHU WKH UHJXODWRU\ FRQWURO RI WKH HQ]\PH
SKRVSKRIUXFWRNLQDVH)UXFWRVHWUDQVSRUWDQGPHWDEROLVPLVQRWUHJXODWHGE\LQVXOLQ)UXFWRVH
LV WUDQVSRUWHG E\ JOXW UHFHSWRU )UXFWRVH GRHV QRW LQFUHDVH LQVXOLQ VHFUHWLRQ DQG WKHUHIRUH
GRHV QRW DFWLYDWH OLSRSURWHLQ OLSDVH 7KLV UHVXOWV LQ YLVFHUDO DGLSRJHQHVLV )UXFWRVH LQGXFHV
&K5(%3DQG65(%3HOHPHQWV7KLVUHVXOWVLQLQFUHDVHGKHSDWLFOLSRJHQHVLVE\WKHLQGXFWLRQ
RIWKHHQ]\PHIDWW\DFLGV\QWKDVHDFHW\O&R$FDUER[\ODVHDQGVWHUR\O&R$GHVDWXUDFH7KLV
LQFUHDVHVIDWW\DFLGVDQGFKROHVWHUROV\QWKHVLV)UXFWRVHLVDOLSRSKLOLFFDUERK\GUDWH)UXFWRVH
FDQ EH FRQYHUWHG WR JO\FHURO SKRVSKDWH DQG IDWW\ DFLGV LQYROYHG LQ WULJO\FHULGH V\QWKHVLV

)UXFWRVH DGPLQLVWUDWLRQ OHDGV WR LQFUHDVH LQWULJO\FHULGHV DQG 9/'/ )UXFWRVH FRQVXPSWLRQ
OHDGV WR LQVXOLQ UHVLVWDQFH IDW DFFXPXODWLRQ LQ YLVFHUDO RUJDQV OLNH OLYHU KHDUW DQG NLGQH\
LQVXOLQUHVLVWDQFHG\VOLSLGHPLDZLWKLQFUHDVHGWULJO\FHULGHV9/'/DQG/'/DVZHOODVWKH
PHWDEROLFV\QGURPH7KHPHWDEROLFV\QGURPH;FDQEHFRQVLGHUHGDVDIUXFWRO\WLFV\QGURPH
)UXFWRVHZLOOLQFUHDVHOLSLGVWRUDJHDQGSURPRWHLQVXOLQUHVLVWDQFH)UXFWRVHFDQIUXFWRV\ODWH
SURWHLQV SURGXFLQJ G\VIXQFWLRQ )UXFWRVH KDV QR HIIHFW XSRQ JKUHOLQ DQG OHSWLQ LQ WKH EUDLQ
DQGFDQOHDGWRLQFUHDVHGIHHGLQJEHKDYLRXU*OXFRVHGHFUHDVHVJKUHOLQDQGLQFUHDVHVOHSWLQ
OHYHOV 7KLV OHDGV WR VXSSUHVVLRQ RI DSSHWLWH 7KXV IUXFWRVH FDQ PRGXODWH HDWLQJ EHKDYLRXU
OHDGLQJ RQWR REHVLW\ )UXFWRVH UHVXOWV LQ 1).% DFWLYDWLRQ DQG 71) DOSKD VHFUHWLRQ 71)
DOSKDFDQPRGXODWHWKHLQVXOLQUHFHSWRUSURGXFLQJLQVXOLQUHVLVWDQFHDQGPHWDEROLFV\QGURPH
;)UXFWRVHFDQDOVROHDGWROHSWLQUHVLVWDQFHDQGREHVLW\7KHUHLVDQHSLGHPLFRIPHWDEROLF
V\QGURPH;LQUHODWLRQWRJOREDOZDUPLQJ
DQHURELFJO\FRO\VLVFRQVHTXHQWWRP\RFDUGLDOLQIDUFWLRQDQGK\SHUWHQVLYHK\SHUWURSK\RIWKH
IUXFWRVH PHWDEROLVP LV SULPDULO\ IRFXVHG LQ WKH OLYHU ,Q WKH VHWWLQJ RI DQHURELF JO\FRO\VLV
SUHGRPLQDQW HQ]\PH LQ WKH KHDUW DQG EUDLQ ,Q WKH VHWWLQJ RI DQHURELF JO\FRO\VLV
PHWDEROL]LQJ IUXFWRVH E\ WKH PHFKDQLVP RI 51$ VSOLFLQJ $QHURELF FRQGLWLRQV FDQ LQGXFH



LQWDNHSURGXFHV]LQFGHSOHWLRQOHDGLQJWRGHIHFWLYHIRUPDWLRQRIPHWDOORWKLRQLQHVOHDGLQJWR

JO\FRVDPLQRJO\FDQV FDQ OHDG WR IDWW\ OLYHU 7KLV FDQ ODWHU OHDG RQWR FLUUKRVLV RI WKH OLYHU
ULERQXFHORSURWHLQV LVOHW DVVRFLDWHG DP\ORLG SRO\SHSWLGH DQG WXPRXU VXSSUHVVRU SURWHLQ FDQ
SURGXFLQJPRWRUQHXURQGLVHDVHPHWDEROLFV\QGURPH;GXHWRGHIHFWLYHLQVXOLQVHFUHWLRQDV

D UHVXOW RI ,$33 DQG DEQRUPDO SULRQ OLNH WXPRXU VXSSUHVVRU SURWHLQ SURGXFLQJ WXPRXUV
7KHVH SULRQ GLVHDVHV LQGXFHG E\ DUFKDHDO 51$ YLURLGV DUH DOVR WUDQVPLVVLEOH 7KXV JOREDO
ZDUPLQJ UHODWHG IUXFWRO\VLV OHDGV WR DUFKDHDO LQGXFHG 51$ YLURLGDO PHGLDWHG SULRQ GLVHDVH
DQGDP\ORLGRVLV7KLVUDLVHVWKHVSHFWDFOHRID&DVVDQGUDV\QGURPHRIKXPDQH[WLQFWLRQ
LW LQWR JO\FHUDOGHK\GHV SKRVSKDWH *O\FHUDOGHK\GH SKRVSKDWH FDQ EH IUXFWRO\VHG WR
S\UXYDWHJHQHUDWHGIURPJO\FHUDOGHK\GHVSKRVSKDWHFDQEHFRQYHUWHGWRWKHFLWUDWHZKLFK
*O\FHUDOGHK\GH FDQ DOVR EH DFWHG XSRQ E\ WULRNLQDVH FRQYHUWLQJ LW LQWR JO\FHUDOGHK\GHV
GRHVQ¶W QHHG LQVXOLQ IRU WUDQVSRUW LQWR WKH FHOO )UXFWRVH LV WUDQVSRUWHG E\ WKH IUXFWRVH
VLWHRIIUXFWRVHPHWDEROLVP,QWKHSUHVHQFHRIK\SR[LDDQGDQHURELFVWDWHVWKHUHLVLQGXFWLRQ
RI +,) DOSKD ZKLFK FDQ LQGXFH NHWRKH[RNLQDVH & RU IUXFWRNLQDVH LQ WKH OLYHU NLGQH\
JDVWURLQWHVWLQDO WUDFW EUDLQ DQG KHDUW )UXFWRVH SKRVSKDWH E\SDVVHV WKH HQ]\PH

$73DVH LQKLELWLRQ 7KLV UHVXOWV LQ UHGXFHG HQHUJ\ QHHGV RI WKH FHOO DV RI WKH $73
PHPEUDQH $73DVH LQKLELWLRQ JHQHUDWHG KLEHUQDWRU\ VWDWH 7KH JO\FHUDOGHK\GHV SKRVSKDWH
;\OXORVH SKRVSKDWH DQG ULERVH SKRVSKDWH LQWHUDFW WR SURGXFH JO\FHUDOGHK\GHV
SKRVSKDWH DQG VHGRKHSWXORVH SKRVSKDWH ZKLFK LV WKHQ FRQYHUWHG WR IUXFWRVH SKRVSKDWH
DQGHU\WKURVHSKRVSKDWH7KHSHQWRVHSKRVSKDWHSDWKZD\JHQHUDWHVULERVHIRUQXFOHLFDFLG
V\QWKHVLV 7KH SDWKZD\ DOVR JHQHUDWHV KH[RVDPLQHV IRU *$* V\QWKHVLV 7KH SHQWRVH
SKRVSKDWHSDWKZD\DOVRSURGXFHVGLJLWR[RVHDQGUKDPQRVHIRUGLJR[LQV\QWKHVLV

DOVRJHQHUDWHVJO\FHUDOGHK\GHVSKRVSKDWHDQGIXUWKHUS\UXYDWH7KHS\UXYDWHFDQHQWHUWKH

DUFKDHD7KHDUFKDHDFDQIXUWKHULQGXFH+,)DOSKDDOGRVHUHGXFWRVHDQGIUXFWRO\VLVUHVXOWLQJ
VWRUDJH 7KLV OHDGV RQWR D KLEHUQDWRU\ VWDWH DQG DUFKDHDO V\PELRVLV LQGXFHG VSHFLHV FKDQJH
IUXFWRO\VLVLVFDWDEROL]HGFKROHVWHUROR[LGDVHVIRUDUFKDHDOHQHUJHWLFV$UFKDHDDOVRGHULYHVLWV

7KLVOHDGVRQWRDIXQFWLRQDOIRUPRIFHUHEHOODUFRJQLWLRQDQGTXDQWDOSHUFHSWLRQUHVXOWLQJLQD
QHZEUDLQSKHQRW\SH7KHFHUHEHOODUFRJQLWLYHV\QGURPHOHDGVWRDURERWLFKXPDQSKHQRW\SH
7KHSKHQRW\SHLVLPSXOVLYHKDVH[WUDVHQVRU\SHUFHSWLRQDQGKDVOHVVRIVSHHFKSURGXFWLRQ
&RPPXQLFDWLRQLVE\V\PEROLFDFWV7KHFHUHEHOODUSKHQRW\SHGRHVQ¶WKDYHDFRUWLFDOFRQWURO
DQG FRQWULEXWHV WR VXUUHDOLVWLF EHKDYLRU SDWWHUQV 7KLV SURGXFHV LPSXOVLYH EHKDYLRU DQG DQ
HSLGHPLF RI VXUUHDOLVP ZKHUH WKH UDWLRQDO SUHIURQWDO FRUWH[ EHFRPHV H[WLQFW 7KLV OHDGV WR
H[WUHPHVRIVSLULWXDOLW\YLROHQWDQGWHUURULVWLFEHKDYLRUDQGK\SHUVH[XDOVWDWHVFRQWULEXWLQJWR
DVWDWHRIWUDQFHGHQFHXQGHUOLQHGDQGUHLQIRUFHGE\TXDQWDOSHUFHSWLRQ&HUHEHOODUSKHQRW\SH
RZLQJWRLWVTXDQWDOSHUFHSWLRQEHKDYHVDVDFRPPXQLW\DQGQRWDVDQLQGLYLGXDO7KLVFUHDWHV
QHZ VRFLDO DQG SV\FKRORJLFDO SKHQRW\SHV )UXFWRVH LQGXFHV 1).% DQG LPPXQH DFWLYDWLRQ
7KLV UHVXOWV LQ DQ LPPXQH DFWLYDWRU\ SKHQRW\SH &XOWXUHG 7UHJ FHOOV RQ KLJK IUXFWRVH GLHW
KDYH OHVV ,/ VHFUHWLRQ WKDQ FRQWUROV 7KLV UHVXOWV LQ D K\SHULPPXQH VWDWH ZLWK
IUXFWRV\ODWHGSURWHLQVDFWLQJDVDQWLJHQV7KHIUXFWRO\WLFSDWKZD\FDQOHDGWRLQFUHDVHG'1$
V\QWKHVLVDQG51$V\QWKHVLVGXHWRIOX[YLDWKHSHQWRVHSKRVSKDWHSDWKZD\7KHIUXFWRO\WLF
SDWKZD\FDQEHGLUHFWHGWRWKH*$%$VKXQWJHQHUDWLQJVXFFLQ\O&R$DQGJO\FLQH7KHVHDUH
VXEVWUDWHV IRU SRUSK\ULQ WHPSODWHV WR IRUP 51$ YLURLGV 7KH DUFKDHDO LQGXFHG UHGR[ VWUHVV
FDQ LQGXFH HQGRJHQRXV +(59 H[SUHVVLRQ DQG UHYHUVH WUDQVFULSWDVH H[SUHVVLRQ 7KH 51$
YLURLGV DUH FRQYHUWHG E\ +(59 UHYHUVH WUDQVFULSWDVH WR FRUUHVSRQGLQJ '1$ DQG LQWHJUDWHG
LQWRWKHJHQRPHE\+(59LQWHJUDVH7KHLQWHJUDWHG51$YLURLGUHODWHG'1$FDQIXQFWLRQDV
MXPSLQJ JHQHV SURGXFLQJ JHQRPLF SODVWLFLW\ DQG JHQRPLF FKDQJH 7KLV SURGXFHV D QHZ
JHQRW\SH)UXFWRV\ODWLRQRIERG\SURWHLQVDQGHQ]\PHVUHVXOWVLQDSURWHLQSURFHVVLQJGHIHFW
UHVXOWLQJ LQ ORVV RI SURWHLQ IXQFWLRQ 7KH KXPDQ FHOO IXQFWLRQ GXH WR SURWHLQ IUXFWRV\ODWLRQ
SURWHLQ SURFHVVLQJ GHIHFWV DQG SURWHLQ FRQIRUPDWLRQDO GHIHFWV FRPHV WR D JULQGLQJ KDOW
)UXFWRO\WLFSDWKZD\JHQHUDWHVSRUSK\ULQDUUD\VLQGXFHG$73SURGXFWLRQPHPEUDQHVRGLXP
SRWDVVLXP$73DVHLQKLELWLRQLQGXFHG$73V\QWKHVLVDQGIUXFWRO\VLVLQGXFHG$73JHQHUDWLRQ
7KLV SURYLGHV HQHUJ\ IRU SRUSK\ULQ WHPSODWH LQGXFHG DUFKDHDO UHSOLFDWLRQ 7KH GLJR[LQ DQG
IUXFWRVHSKRVSKRU\ODWLRQLQGXFHG$73GHSOHWLRQSURGXFHVFHOOPHPEUDQHVRGLXPSRWDVVLXP
$73DVH LQKLELWLRQ DQG D KLEHUQDWRU\ VWDWH 7KLV OHDGV RQWR D VRPQROHQW VOHHS\ VWDWH 7KH
FKROHVWHUROFDWDEROLVPE\FKROHVWHUROR[LGDVHVIRUDUFKDHDOHQHUJHWLFVOHDGVWRGHIHFWLYHVH[
KRUPRQH V\QWKHVLV 7KLV OHDGV RQWR DQ DVH[XDO DQGURJ\QRXV VWDWH 7KH FHUHEHOODU FRJQLWLYH

V\QGURPHGXHWRSUHIURQWDOFRUWLFDODWURSK\FRQVHTXHQWWRSRUSK\ULRQLQGXFHGORZOHYHO(0)
SHUFHSWLRQ SURGXFHV D K\SHUVH[XDO VWDWH 7KLV UHVXOWV LQ PDOHIHPDOH HTXLGRPLQDQFH DQG
FKDQJHVLQVH[XDOEHKDYLRURIWKHSRSXODWLRQ7KXVWKHIUXFWRVHGLVHDVHFRQVHTXHQWWRJOREDO
ZDUPLQJ UHVXOWV LQ D QHZ QHXURQDO LPPXQH PHWDEROLF VH[XDO DQG VRFLDO SKHQRW\SH 7KH
KXPDQERG\LVFRQYHUWHGWRD]RPELHIRUWKHJOREDOZDUPLQJUHODWHGHQGRV\PELRWLFDUFKDHD
WR WKULYH 7KH QHXURQDO PHWDEROLF VH[XDO DQG VRFLDO SKHQRW\SH FUHDWHV WKH QHFHVVDU\
HQYLURQPHQW HQGRV\PELRWLF DUFKDHDO PXOWLSOLFDWLRQ DQG WKH KXPDQ ERG\ LV FRQYHUWHG WR D
]RPELH SKHQRW\SH 7KLV FDQ EH FDOOHG DV D KLEHUQDWRU\ ]RPELH V\QGURPH 'XH WR WKH QHZ
VH[XDO DQG VRFLDO SKHQRW\SH ZLWK DVH[XDOLW\ DQG K\SHUVH[XDOLW\ DQG IHPDOHPDOH
HTXLGRPLQDQFH WKH KXPDQ SRSXODWLRQ IDOOV 7KH JOREDO ZDUPLQJ DQG DUFKDHDO LQGXFWLRQ RI
+,)DOSKDUHVXOWLQJLQWKH:DUEXUJSKHQRW\SHOHDGVWRFKDQJHVLQWKHPHWDEROLFVFKHPHRI
WKH FHOOV SURGXFLQJ ERG\ FHOO WUDQVIRUPDWLRQ WR VWHP FHOOV 7KH VWHP FHOOV GHSHQG XSRQ
JO\FRO\VLV RU IUXFWRO\VLV IRU HQHUJ\ QHHGV 7KH :DUEXUJ SKHQRW\SH SURGXFHV DQ DFLGLF S+
ZKLFKFDQUHVXOWLQFRQYHUVLRQRIERG\FHOOVWRVWHPFHOOV7KHVWHPFHOOVFRQYHUVLRQUHVXOWV
LQ ORVV RI WLVVXH IXQFWLRQ 7KH FHUHEUDO FRUWH[ V\QDSWLF FRQQHFWLYLW\ LV ORVW DQG EHFRPHV
G\VIXQFWLRQOHDGLQJWRVXEFRUWLFDOFHUHEHOODUGRPLQDQFH7KHLPPXQHVWHPFHOOVSUROLIHUDWH
SURGXFLQJ DQ DXWRLPPXQH GLVHDVH 7KH YDULRXV WLVVXH FHOOV WKH VSHFLDOL]HG IXQFWLRQ OLNH
QHXURQQHSKURQDQGPXVFOHFHOODOOEHFDXVHRIVWHPFHOOFRQYHUVLRQEHFRPHVG\VIXQFWLRQDO
7KLVSURGXFHVDVWHPFHOOV\QGURPHZLWKKXPDQVRPDWLFFHOOVEHLQJFRQYHUWHGWRVWHPFHOOV
ZLWKORVVRIIXQFWLRQDQGXQFRQWUROOHGSUROLIHUDWLRQ7KHIUXFWRV\ODWLRQRISURWHLQVUHVXOWVLQ
SURWHLQIXQFWLRQGHIHFWV7KHIUXFWRV\ODWLRQRI/'/UHVXOWVLQGHIHFWLYHFKROHVWHUROWUDQVSRUW
WR WKH FHOOV 7KLV UHVXOWV LQ VWHURLGDO KRUPRQH V\QWKHVLV GHIHFWV &KROHVWHURO LV UHTXLUHG IRU
IRUPDWLRQ RI V\QDSWLF FRQQHFWLYLW\ DQG WKLV OHDGV WR FHUHEUDO FRUWLFDO G\VIXQFWLRQ 7KH
KHPRJORELQ EHFRPHV IUXFWRV\ODWHG DQG R[\JHQ WUDQVSRUW LV DIIHFWHG 7KLV OHDGV WR K\SR[LD
DQG DQHURELF VWDWHV 7KH K\SR[LD DQG DQHURELF VWDWHV LQGXFHV +,) DOSKD DQG WKH :DUEXUJ
IUXFWRO\WLF SKHQRW\SH 7KH +,) DOSKD DOVR LQGXFHV DOGRVH UHGXFWDVH FRQYHUWLQJ JOXFRVH WR
IUXFWRVHDQGLQGXFLQJWKHIUXFWRO\WLFVFKHPH7KHIUXFWRO\VLVLQGXFHG*$%$VKXQWSDWKZD\
DQG SRUSK\ULQ V\QWKHVLV UHVXOWV LQ IXUWKHU DUFKDHDO SRUSK\ULQ WHPSODWH UHODWHG UHSOLFDWLRQ
7KLV UHVXOWV LQ IXUWKHU DUFKDHDO LQGXFHG IUXFWRO\VLV DQG WKH YLFLRXV LUUHYHUVLEOH F\FOH
SURFHHGV 7KH XQFRQWUROOHG JURZWK RI DUFKDHD OHDGV WR VWLOO IXUWKHU JOREDO ZDUPLQJ 7KH
ZRUOG RI HQGRV\PELRWLF HWHUQDO DUFKDHD WDNHV RYHU DQG SHUVLVWV GXULQJ WKH H[WUHPRSKLOLF
FOLPDWLF FKDQJHV RI JOREDO ZDUPLQJ 7KH KXPDQ EHLQJV H[LVW DV QHDQGHUWKDOLF ]RPELHV
VHUYLQJ DUFKDHDO PXOWLSOLFDWLRQ 7KH KRPR VDSLHQV JHWV FRQYHUWHG WR D QHZ SKHQRW\SH

JHQRW\SH LPPXQRW\SH PHWDERORQRPLF W\SH DQG EUDLQ W\SH 7KLV LV FDOOHG DV KLEHUQDWRU\
]RPELHUHODWHGWRJOREDOZDUPLQJKRPRQHRQHDQGHUWKDOLV

7DEOH
6HUXP
IUXFWRNLQDVH
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6\;
&$'
&9$
'&0(0)
7XPRXU
6FKL]R
$XWLVP
$'
3'
06
/XSXV
&5)
,/'
&23'
%$
&LUUKRVLV
,%'
0$2
,%6

38'
(0)
&&3
01*
0XF$1*
'%-'
6SRQG\ORVLV
)YDOXH
SYDOXH

7DEOH
6HUXP$73
OHYHOV
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6\;
&$'
&9$
'&0(0)
7XPRXU
6FKL]R
$XWLVP
$'
3'
06
/XSXV
&5)
,/'
&23'
%$
&LUUKRVLV
,%'
0$2
,%6
38'
(0)

&&3
01*
0XF$1*
'%-'
6SRQG\ORVLV
)YDOXH
SYDOXH

7DEOH
$QWL
S\UXYDWHNLQDVH
0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
6\;
&$'
&9$
'&0(0)
7XPRXU
6FKL]R
$XWLVP
$'
3'
06
/XSXV
&5)
,/'
&23'
%$
&LUUKRVLV
,%'
0$2
,%6
38'
(0)

&&3
01*
0XF$1*
'%-'
6SRQG\ORVLV
)YDOXH
SYDOXH
5HIHUHQFHV
.XUXS 5. .XUXS 3$ *OREDO :DUPLQJ $UFKDHD DQG 9LURLG ,QGXFHG 6\PELRWLF +XPDQ
(YROXWLRQDQGWKH)UXFWRVRLG2UJDQHOOH1HZ<RUN2SHQ6FLHQFH

&+$37(5
$&+2/(67(52/$1'$&7,1,'('(3(1'(176+$'2:%,263+(5(2)
$5&+$($$1'9,52,'6,15(7529,5$/$1'35,21',6($6(±/2:
$5&+$($/'(16,7<&2175,%87(72+2026$3,(163(&,(6$1'
5(7529,5$/$1'35,21',6($6(
,QWURGXFWLRQ
PHPEUDQH KDYH EHHQ LPSOLFDWHG LQ WKH HWLRORJ\ RI (0) (QGRJHQRXV GLJR[LQ D VWHURLGDO
JO\FRVLGHZKLFKIXQFWLRQVDVDPHPEUDQHVRGLXPSRWDVVLXP$73DVHLQKLELWRUKDVDOVREHHQ
UHODWHGWRLWVHWLRORJ\GXHWRWKHLQWUDFHOOXODUPDJQHVLXPGHILFLHQF\LWSURGXFHV2UJDQLVPV
OLNHSK\WRSODVPDVDQGYLURLGVKDYHDOVREHHQGHPRQVWUDWHGWRSOD\DUROHLQWKHHWLRORJ\RI
WKHVH GLVHDVHV (QGRJHQRXV GLJR[LQ KDV EHHQ UHODWHG WR WKH SDWKRJHQHVLV RI DFTXLUHG
LPPXQRGHILFLHQF\V\QGURPHDQG&UHXW]IHOGW-DNRE¶VGLVHDVH7KHSRVVLELOLW\RIHQGRJHQRXV
GLJR[LQ V\QWKHVLV E\ DFWLQLGH EDVHG SULPLWLYH RUJDQLVP OLNH DUFKDHD ZLWK D PHYDORQDWH
SDWKZD\DQGFKROHVWHUROFDWDEROLVPZDVFRQVLGHUHG'DYLHVKDVSXWIRUZDUGWKHFRQFHSWRI
D VKDGRZ ELRVSKHUH RI RUJDQLVPV ZLWK DOWHUQDWH ELRFKHPLVWU\ SUHVHQW LQ HDUWK LWVHOI $Q
DFWLQLGHGHSHQGHQWVKDGRZELRVSKHUHRIDUFKDHDDQGYLURLGVLQWKHDERYHPHQWLRQHGGLVHDVH
VWDWHVLVGHVFULEHG

GRPLQDQWEUDLQ
0DWHULDOVDQG0HWKRGV
REWDLQHG IRU WKH VWXG\ 7KH IROORZLQJ JURXSV ZHUH LQFOXGHG LQ WKH VWXG\ DFTXLUHG
LPPXQRGHILFLHQF\V\QGURPHDQG&UHXW]IHOGW-DNRE¶VGLVHDVH7KHUHZHUHSDWLHQWVLQHDFK
JURXSDQGHDFKSDWLHQWKDGDQDJHDQGVH[PDWFKHGKHDOWK\FRQWUROVHOHFWHGUDQGRPO\IURP
WKHJHQHUDOSRSXODWLRQ7KHEORRGVDPSOHVZHUHGUDZQLQWKHIDVWLQJVWDWHEHIRUHWUHDWPHQW
ZDVLQLWLDWHG3ODVPDIURPIDVWLQJKHSDULQLVHGEORRGZDVXVHGDQGWKHH[SHULPHQWDOSURWRFRO
ZDV DV IROORZV , 3ODVPDSKRVSKDWH EXIIHUHG VDOLQH ,, VDPH DV ,FKROHVWHURO VXEVWUDWH
,,,VDPHDV,,UXWLOHPJPO,9VDPHDV,,FLSURIOR[DFLQHDQGGR[\F\FOLQHHDFKLQD
IRU KRXU7KHIROORZLQJ HVWLPDWLRQV ZHUH FDUULHG RXW &\WRFKURPH ) IUHH 51$ IUHH
UHGXFWDVH GLJR[LQ DQG ELOH DFLGV &\WRFKURPH ) ZDV HVWLPDWHG IORXULPHWULFDOO\
H[FLWDWLRQ ZDYHOHQJWK QP DQG HPLVVLRQ ZDYHOHQJWK QP 3RO\F\FOLF DURPDWLF
K\GURFDUERQ ZDV HVWLPDWHG E\ PHDVXULQJ K\GURJHQ SHUR[LGH OLEHUDWHG E\ XVLQJ JOXFRVH
UHDJHQW7KHVWDWLVWLFDODQDO\VLVZDVGRQHE\$129$

5HVXOWV
DW]HURWLPH
7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQPXUDPLFDFLGDQGVHURWRQLQ
0XUDPLFDFLG
0XUDPLFDFLG
+7 +7
FKDQJH
FKDQJH
,QFUHDVHZLWKRXW 'HFUHDVHZLWK
*URXS
'HFUHDVHZLWK 'R[\ 'R[\
,QFUHDVHZLWK5XWLOH
'R[\&LSUR
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
$,'6
&-'
)YDOXH
3YDOXH

7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQIUHH'1$DQG51$
'1$FKDQJH '1$FKDQJH 51$FKDQJH

51$FKDQJH
5XWLOH 'R[\ 'R[\
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
$,'6
&-'
)YDOXH
3YDOXH

7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQ+0*&R$UHGXFWDVHDQG3$+
+0*&R$5 +0*&R$5
3$+FKDQJH
3$+FKDQJH
FKDQJH FKDQJH
'HFUHDVHZLWK
,QFUHDVHZLWK 'HFUHDVHZLWK 'R[\
5XWLOH 'R[\
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
$,'6
&-'
)YDOXH
3YDOXH
%LOHDFLGV
'LJR[LQ QJPO %LOHDFLGVFKDQJH
'LJR[LQ QJPO FKDQJH
'HFUHDVHZLWK ,QFUHDVHZLWK
*URXS ,QFUHDVHZLWK5XWLOH 'HFUHDVHZLWK
'R[\&LSUR 5XWLOH
'R[\
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
$,'6
&-'
)YDOXH
3YDOXH

3\UXYDWH 3\UXYDWH
FKDQJH FKDQJH
FKDQJH FKDQJH
*URXS ,QFUHDVHZLWK 'HFUHDVHZLWK
5XWLOH 'R[\
5XWLOH 'R[\
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
$,'6
&-'
)YDOXH
3YDOXH

DFLG
+2 +2 $/$ $/$

*URXS
5XWLOH 'R[\ 5XWLOH 'R[\
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
$,'6
&-'
)YDOXH
3YDOXH
7DEOH(IIHFWRIUXWLOHDQGDQWLELRWLFVRQ$73V\QWKDVHDQGF\WRFKURPH)
$73V\QWKDVH $73V\QWKDVH &<7)

&<7)
5XWLOH 'R[\ 'R[\
0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'
1RUPDO
$,'6
&-'
)YDOXH
3YDOXH
'LVFXVVLRQ
7KHUH ZDV LQFUHDVH LQ F\WRFKURPH ) LQGLFDWLQJ DUFKDHDO JURZWK LQ DFTXLUHG
LPPXQRGHILFLHQF\ V\QGURPH DQG &UHXW]IHOGW -DNRE¶V GLVHDVH 7KH DUFKDHD FDQ V\QWKHVL]H
DQG XVH FKROHVWHURO DV D FDUERQ DQG HQHUJ\ VRXUFH 7KH DUFKDHDO RULJLQ RI WKH HQ]\PH
DFWLYLWLHVZDVLQGLFDWHGE\DQWLELRWLFLQGXFHGVXSSUHVVLRQ7KHVWXG\LQGLFDWHVWKHSUHVHQFHRI

DFWLQLGH EDVHG DUFKDHD ZLWK DQ DOWHUQDWH DFWLQLGH EDVHG HQ]\PHV RU PHWDOORHQ]\PHV LQ WKH
V\VWHP DV LQGLFDWHG E\ UXWLOH LQGXFHG LQFUHDVH LQ HQ]\PH DFWLYLWLHV 7KHUH ZDV DOVR DQ
LQFUHDVHLQDUFKDHDO+0*&R$UHGXFWDVHDFWLYLW\LQGLFDWLQJLQFUHDVHGFKROHVWHUROV\QWKHVLV
E\ WKH DUFKDHDO PHYDORQDWH SDWKZD\ 7KH DUFKDHDO EHWD K\GUR[\O VWHURLG GHK\GURJHQDVH
DFWLYLW\LQGLFDWLQJGLJR[LQV\QWKHVLVDQGDUFKDHDOFKROHVWHUROK\GUR[\ODVHDFWLYLW\LQGLFDWLQJ
ELOHDFLGV\QWKHVLVZHUHLQFUHDVHG7KHDUFKDHDOFKROHVWHUROR[LGDVHDFWLYLW\ZDVLQFUHDVHG
UHVXOWLQJLQJHQHUDWLRQRIS\UXYDWHDQGK\GURJHQSHUR[LGH7KHS\UXYDWHJHWVFRQYHUWHGWR
JOXWDPDWH DQG DPPRQLD E\ WKH *$%$ VKXQW SDWKZD\ 7KH DUFKDHDO DURPDWL]DWLRQ RI
FKROHVWHURO JHQHUDWLQJ 3$+ VHURWRQLQ DQG GRSDPLQH ZDV DOVR GHWHFWHG 7KH DUFKDHDO
JO\FRO\WLF KH[RNLQDVH DFWLYLW\ DQG DUFKDHDO H[WUDFHOOXODU $73 V\QWKDVH DFWLYLW\ ZHUH
LQFUHDVHG7KHDUFKDHDFDQXQGHUJRPDJQHWLWHDQGFDOFLXPFDUERQDWHPLQHUDOL]DWLRQDQGFDQ
H[LVWDVFDOFLILHGQDQRIRUPV7KHUHZDVDQLQFUHDVHLQIUHH51$LQGLFDWLQJVHOIUHSOLFDWLQJ
51$YLURLGVDQGIUHH'1$LQGLFDWLQJJHQHUDWLRQRIYLURLGFRPSOHPHQWDU\'1$VWUDQGVE\
DUFKDHDOUHYHUVHWUDQVFULSWDVHDFWLYLW\7KHDFWLQLGHVPRGXODWH51$IROGLQJDQGFDWDO\VHLWV
ULER]\PDODFWLRQ'LJR[LQFDQFXWDQGSDVWHWKHYLURLGDOVWUDQGVE\PRGXODWLQJ51$VSOLFLQJ
JHQHUDWLQJ 51$ YLURLGDO GLYHUVLW\ 7KH YLURLGV DUH HYROXWLRQDULO\ HVFDSHG DUFKDHDO JURXS ,
LQWURQV ZKLFK KDYH UHWURWUDQVSRVLWLRQ DQG VHOI VSOLFLQJ TXDOLWLHV $UFKDHDO S\UXYDWH FDQ
'1$LQWRWKHQRQFRGLQJUHJLRQRIHXNDU\RWLFQRQFRGLQJ'1$XVLQJ+(59LQWHJUDVH DVKDV
YLURLGDOFRPSOHPHQWDU\'1$FDQIXQFWLRQDVMXPSLQJJHQHVSURGXFLQJDG\QDPLFJHQRPH
PRGXODWLQJ '1$ WUDQVFULSWLRQ 7KH 51$ YLURLGV FDQ UHJXODWH P51$ IXQFWLRQ E\ 51$
WUDQVPLVVLRQDQGHXFKURPDWLQKHWHURFKURPDWLQH[SUHVVLRQ7KH51$YLURLGVFDQUHFRPELQH
VWDWH3ULRQSURWHLQVFDQELQGQXFOHLFDFLGV7KHSULRQSURWHLQFRQIRUPDWLRQLVPRGXODWHGE\
51$YLURLGELQGLQJUHVXOWLQJLQSULRQGLVHDVH51$YLURLGLQGXFHGP51$LQWHUIHUHQFHFDQ

FRQWULEXWHWRFHOOGHDWKLQ$,'6GHPHQWLDPDOLJQDQWWUDQVIRUPDWLRQDQGDXWRLPPXQLW\LQWKH
DFTXLUHGLPPXQRGHILFLHQF\V\QGURPH
FKROHVWHUROFDWDEROLVPKDGDHYROXWLRQDULO\DGYDQWDJHDQGFRQVWLWXWHVWKHLVRSUHQRLGDOFODGH
RUJDQLVP ZLWK WKH DUFKDHD HYROYLQJ LQWR PHYDORQDWH SDWKZD\ JUDP SRVLWLYH DQG JUDP
QHJDWLYH RUJDQLVP WKURXJK KRUL]RQWDO JHQH WUDQVIHU RI YLURLGDO DQG YLUXV JHQHV 7KH
ZHOODVHXNDU\RWLFKRUL]RQWDOJHQHWUDQVIHUSURGXFLQJEDFWHULDOVSHFLDWLRQ7KH51$YLURLGV
DQG LWV FRPSOHPHQWDU\ '1$ GHYHORSHG LQWR FKROHVWHURO HQYHORSHG 51$ DQG '1$ YLUXVHV
OLNHKHUSHVUHWURYLUXVLQIOXHQ]DYLUXVERUQDYLUXVF\WRPHJDORYLUXVDQGHEVWHLQEDUUYLUXV
E\UHFRPELQLQJZLWKHXNDU\RWLFDQGKXPDQJHQHVUHVXOWLQJLQYLUDOVSHFLDWLRQ%DFWHULDODQG
YLUDO VSHFLHV DUH LOO GHILQHG DQG IX]]\ ZLWK DOO RI WKHP IRUPLQJ RQH FRPPRQ JHQHWLF SRRO
ZLWK IUHTXHQW KRUL]RQWDO JHQH WUDQVIHU DQG UHFRPELQDWLRQ 7KXV WKH PXOWL DQG XQLFHOOXODU
HXNDU\RWH ZLWK LWV JHQHV VHUYHV WKH SXUSRVH RI SURNDU\RWLF DQG YLUDO VSHFLDWLRQ 7KH
PXOWLFHOOXODUHXNDU\RWHGHYHORSHGVRWKDWWKHLUHQGRV\PELRWLFDUFKDHDOFRORQLHVFRXOGVXUYLYH
DQG IRUDJH EHWWHU 7KH PXOWLFHOOXODU HXNDU\RWHV DUH OLNH EDFWHULDO ELRILOPV 7KH DUFKDHD DQG
EDFWHULDZLWKDPHYDORQDWHSDWKZD\XVHVWKHH[WUDFHOOXODU51$YLURLGVDQG'1$YLURLGVIRU
TXRUXPVHQVLQJDQGLQWKHJHQHUDWLRQRIV\PELRWLFELRILOPOLNHVWUXFWXUHVZKLFKGHYHORSLQWR
PXOWLFHOOXODU HXNDU\RWHV 7KH HQGRV\PELRWLF DUFKDHD DQG EDFWHULD ZLWK PHYDORQDWH
SDWKZD\ VWLOO XVHV WKH 51$ YLURLGV DQG '1$ YLURLGV IRU WKH UHJXODWLRQ RI PXOWLFHOOXODU
HXNDU\RWH 3ROOXWLRQ LV LQGXFHG E\ WKH SULPLWLYH QDQRDUFKDHD DQG PHYDORQDWH SDWKZD\
EDFWHULD V\QWKHVL]HG 3$+ DQG PHWKDQH OHDGLQJ RQ WR UHGR[ VWUHVV 5HGR[ VWUHVV OHDGV WR
VRGLXP SRWDVVLXP $73DVH LQKLELWLRQ LQZDUG PRYHPHQW RI SODVPD PHPEUDQH FKROHVWHURO
GHIHFWLYH 65(%3 VHQVLQJ LQFUHDVHG FKROHVWHURO V\QWKHVLV DQG QDQRDUFKDHDO PHYDORQDWH
SDWKZD\ EDFWHULDO JURZWK 5HGR[ VWUHVV OHDGV RQ WR YLURLGDO DQG DUFKDHDO PXOWLSOLFDWLRQ
5HGR[ VWUHVV FDQ DOVR OHDG WR +(59 UHYHUVH WUDQVFULSWDVH DQG LQWHJUDVH H[SUHVVLRQ 7KH
QRQFRGLQJ '1$ LV IRUPHG RI LQWHJUDWLQJ 51$ YLURLGDO FRPSOHPHQWDU\ '1$ DQG DUFKDHD
ZLWK WKH LQWHJUDWLRQ JRLQJ RQ DV D FRQWLQXLQJ HYHQW 7KH DUFKDHDO SR[ OLNH GV'1$ YLUXV
IRUPVHYROXWLRQDULO\WKHQXFOHXV7KHLQWHJUDWHGYLURLGDODUFKDHDODQGPHYDORQDWHSDWKZD\
EDFWHULDOVHTXHQFHVFDQXQGHUJRYHUWLFDOWUDQVPLVVLRQDQGFDQH[LVWDVJHQRPLFSDUDVLWHV7KH

JHQRPLFLQWHJUDWHGDUFKDHDPHYDORQDWHSDWKZD\EDFWHULDDQGYLURLGVIRUPDJHQRPLFUHVHUYH
RI EDFWHULD DQG YLUXVHV ZKLFK FDQ UHFRPELQH ZLWK KXPDQ DQG HXNDU\RWLF JHQHV SURGXFLQJ
EDFWHULDODQGYLUDOVSHFLDWLRQ%DFWHULDDQGYLUXVHVKDYHEHHQUHODWHGWRWKHSDWKRJHQHVLVRI
DFTXLUHG LPPXQRGHILFLHQF\ V\QGURPH DQG &UHXW]IHOGW -DNRE¶V GLVHDVH 0\FRSODVPDV KDYH
EHHQGHVFULEHGDVFRIDFWRUVLQ+,9LQIHFWLRQ0\FRSODVPDLQIHFWLRQRIWKHFHOOFDQUHVXOW
LQ H[SUHVVLRQ RI +(59 VHTXHQFHV &KDQJHV LQ WKH OHQJWK RI QRQFRGLQJ UHJLRQ HVSHFLDOO\
KXPDQHQGRJHQRXVUHWURYLUXVHVDQGWKHH[SUHVVLRQRI+(59VHTXHQFHVFDQFRQWULEXWHWRWKH
SDWKRJHQHVLVRI$,'6V\QGURPH7KHFKDQJHLQWKHOHQJWKDQGJUDPPDURIWKHQRQFRGLQJ
UHJLRQ SURGXFHV HXNDU\RWLF VSHFLDWLRQ DQG LQGLYLGXDOLW\ 7KH LQWHJUDWLRQ RI QDQRDUFKDHD
PHYDORQDWH SDWKZD\ SURNDU\RWHV DQG YLURLGV LQ WR WKH HXNDU\RWLF DQG KXPDQ JHQRPH
SURGXFHVDFKLPHUDZKLFKFDQPXOWLSO\SURGXFLQJELRILOPOLNHPXOWLFHOOXODUVWUXFWXUHVKDYLQJ
DPL[HGDUFKDHDOYLURLGDOSURNDU\RWLFDQGHXNDU\RWLFFKDUDFWHUVZKLFKLVDUHJUHVVLRQIURP
WKH PXOWLFHOOXODU HXNDU\RWLF WLVVXH 7KLV UHVXOWV LQ D QHZ QHXURQDO PHWDEROLF LPPXQH DQG
WLVVXHSKHQRW\SHRUPLFURFKLPHUDOHDGLQJWRKXPDQGLVHDVHVOLNHDFTXLUHGLPPXQRGHILFLHQF\
V\QGURPHDQG&UHXW]IHOGW-DNRE¶VGLVHDVH7KHPLFURFKLPHUDSURGXFHVSRO\SORLG\ZKLFKKDV
EHHQUHODWHGWRPDOLJQDQWWUDQVIRUPDWLRQDXWRLPPXQHGLVHDVHDQGQHXURQDOGHJHQHUDWLRQOLNH
$,'6GHPHQWLDGHVFULEHGLQDFTXLUHGLPPXQRGHILFLHQF\V\QGURPH
$UFKDHDDQG51$YLURLGFDQELQGWKH7/5UHFHSWRULQGXFH1).%SURGXFLQJLPPXQH
DFWLYDWLRQ DQG F\WRNLQH 71) DOSKD VHFUHWLRQ 7KH DUFKDHDO ';3 DQG PHYDORQDWH SDWKZD\
PHWDEROLWHV FDQ ELQG JG 7&5 DQG GLJR[LQ LQGXFHG FDOFLXP VLJQDOLQJ FDQ DFWLYDWH 1).%
SURGXFLQJFKURQLFLPPXQHDFWLYDWLRQ7KHDUFKDHDDQGYLURLGFDQLQGXFHFKURQLFLPPXQH
DFWLYDWLRQ DQG JHQHUDWLRQ RI VXSHUDQWLJHQV &KURQLF LPPXQH DFWLYDWLRQ FDQ OHDG RQWR DQ
LQFUHDVHLQ&'UHFHSWRUDQGFKHPRNLQHUHFHSWRUGHQVLW\SURGXFLQJDSUHGLOHFWLRQWRGHYHORS
DFTXLUHG LPPXQRGHILFLHQF\ V\QGURPH 7KH JHQHUDWLRQ RI VXSHUDQWLJHQV OHDGV WR
DXWRLPPXQLW\ DQG LQFUHDVHG LQFLGHQFH RI DXWRLPPXQH YDVFXOLWLV DQG DUWKULWLV FRPPRQ LQ
$,'6 7KH DUFKDHD DQG YLURLGV FDQ UHJXODWH WKH QHUYRXV V\VWHP LQFOXGLQJ WKH 10'$
V\QDSWLF WUDQVPLVVLRQ 10'$ FDQ EH DFWLYDWHG E\ GLJR[LQ LQGXFHG FDOFLXP RVFLOODWLRQV
3$+DQGYLURLGLQGXFHG51$LQWHUIHUHQFH 7KHFKROHVWHUROULQJR[LGDVHJHQHUDWHGS\UXYDWH
FDQ EH FRQYHUWHG E\ WKH *$%$ VKXQW SDWKZD\ WR JOXWDPDWH 7KH DUFKDHDO FKROHVWHURO
DURPDWDVH FDQ JHQHUDWH VHURWRQLQ *OXWDPDWHUJLF DQG VHURWRQLQHUJLF WUDQVPLVVLRQ FDQ OHDG
WR LPPXQH DFWLYDWLRQ LPSRUWDQW LQ WKH SDWKRJHQHVLV RI $,'6 10'$ H[FLWRWR[LFLW\ DQG
QHXURWUDQVPLWWHU LQGXFHG LPPXQH DFWLYDWLRQ FDQ OHDG RQWR $,'6 GHPHQWLD 7KH LQFUHDVHG
JHQHUDWLRQRIVHURWRQLQDQGGRSDPLQHIURPEDFWHULDOFKROHVWHUROFDWDEROLVPFDQOHDGWRPRRG

GLVRUGHUVDQGVFKL]RSKUHQLIRUPSV\FKRVLVFRPPRQLQ$,'67KHKLJKHUGHJUHHRILQWHJUDWLRQ
RI WKH DUFKDHD LQWR WKH JHQRPH SURGXFHV LQFUHDVHG GLJR[LQ V\QWKHVLV SURGXFLQJ ULJKW
KHPLVSKHULF GRPLQDQFH DQG OHVVHU GHJUHH SURGXFLQJ OHIW KHPLVSKHULF GRPLQDQFH 5LJKW
KHPLVSKHULF GRPLQDQFH FDQ OHDG WR DFTXLUHG LPPXQRGHILFLHQF\ V\QGURPH DV KDV EHHQ
UHSRUWHG SUHYLRXVO\ IURP WKLV ODERUDWRU\ $UFKDHD YLURLGV DQG GLJR[LQ FDQ LQGXFH WKH KRVW
$.7 3,. $03. +,) DOSKD DQG 1).% SURGXFLQJ WKH :DUEXUJ PHWDEROLF SKHQRW\SH
7KHLQFUHDVHGJO\FRO\WLFKH[RNLQDVHDFWLYLW\GHFUHDVHLQEORRG$73OHDNDJHRIF\WRFKURPH
& LQFUHDVH LQ VHUXP S\UXYDWH DQG GHFUHDVH LQ DFHW\O &R$ LQGLFDWHV WKH JHQHUDWLRQ RI WKH
:DUEXUJ SKHQRW\SH 7KHUH LV LQGXFWLRQ RI JO\FRO\VLV LQKLELWLRQ RI 3'+ DFWLYLW\ DQG
PLWRFKRQGULDOG\VIXQFWLRQUHVXOWLQJLQLQHIILFLHQWHQHUJHWLFV7KHLQFUHDVHGJO\FRO\VLVUHVXOWV
LQ WKH XSUHJXODWLRQ RI PLWRFKRQGULDO 37 SRUH KH[RNLQDVH UHVXOWLQJ LQ FHOO SUROLIHUDWLRQ DQG
PDOLJQDQWWUDQVIRUPDWLRQ7KHDUFKDHDOFKROHVWHUROFDWDEROLVPDOVRJHQHUDWHV3$+ZKLFKFDQ
PRGXODWH JDS MXQFWLRQ LQWHUFHOOXODU FRPPXQLFDWLRQ UHVXOWLQJ LQ FHOO SUROLIHUDWLRQ DQG
PDOLJQDQW WUDQVIRUPDWLRQ $UFKDHDO 3$+ FDQ WKXV LQGXFH QHRSODVWLF FKDQJH $UFKDHDO
FKROHVWHURO FDWDEROLVP FDQ GHSOHWH WKH FHOOV RI FKROHVWHURO OHDGLQJ RQWR SRO\SORLG\ DQG
PDOLJQDQWWUDQVIRUPDWLRQ7KHUHLVLQFUHDVHGLQFLGHQFHRIPDOLJQDQFLHVLVOLNHQRQ+RGJNLQ¶V
O\PSKRPDVDQG.DSRVL¶VVDUFRPDLQ$,'67KHO\PSKRF\WHVGHSHQGRQJO\FRO\VLVIRUWKHLU
HQHUJ\QHHGV7KHLQFUHDVHGJO\FRO\VLVLQGXFHGE\WKH:DUEXUJSKHQRW\SHOHDGVWRLPPXQH
DFWLYDWLRQ /DFWLF DFLG JHQHUDWHG E\ LQFUHDVHG JO\FRO\VLV OHDGV WR LPPXQH VWLPXODWLRQ
,PPXQH VWLPXODWLRQ LV DQ DVVRFLDWLRQ RI $,'6 V\QGURPH &KROHVWHURO R[LGDVH DFWLYLW\
LQFUHDVHG JO\FRO\VLV UHODWHG 1$'3+ R[LGDVH DFWLYLW\ DQG PLWRFKRQGULDO G\VIXQFWLRQ
JHQHUDWHVIUHHUDGLFDOVLPSRUWDQWLQWKHSDWKRJHQHVLVRI$,'6)UHHUDGLFDOVDUHXVHGE\WKH
+,9YLUXVDVPHVVHQJHUVDQGLQFUHDVHUHWURYLUDOUHSOLFDWLRQDQGWKHYLUDOORDGLQWKHV\VWHP
7KHDFFXPXODWHGS\UXYDWHHQWHUVWKH*$%$VKXQWSDWKZD\DQGLVFRQYHUWHGWRFLWUDWHZKLFK
LVDFWHGXSRQE\FLWUDWHO\DVHDQGFRQYHUWHGWRDFHW\O&R$XVHGIRUFKROHVWHUROV\QWKHVLV
7KHS\UXYDWHFDQEHFRQYHUWHGWRJOXWDPDWHDQGDPPRQLDZKLFKLVR[LGLVHGE\DUFKDHDIRU
HQHUJ\QHHGV7KHLQFUHDVHGFKROHVWHUROVXEVWUDWHDOVROHDGVWRLQFUHDVHGDUFKDHDOJURZWKDQG
GLJR[LQ V\QWKHVLV OHDGLQJ WR PHWDEROLF FKDQQHOOLQJ WR WKH PHYDORQDWH SDWKZD\
+\SHUGLJR[LQHPLD LV LPSRUWDQW LQ WKH SDWKRJHQHVLV RI $,'6 'LJR[LQ FDQ LQFUHDVH
O\PSKRF\WLF LQWUDFHOOXODU FDOFLXP ZKLFK OHDGV RQ WR LQGXFWLRQ RI 1).% DQG LPPXQH
DFWLYDWLRQ'LJR[LQFDQDOVRLQGXFH(*)DQGRWKHUJURZWKIDFWRUVUHVXOWLQJLQRQFRJHQHVLV
'LJR[LQ FDQ SURGXFH LQFUHDVHG LQWUDFHOOXODU FDOFLXP UHODWHG 37 SRUH G\VIXQFWLRQ DQG FHOO
GHDWK 7KH DUFKDHDO FKROHVWHURO FDWDEROLVP JHQHUDWHG 3$+ FDQ DOVR SURGXFH 10'$
H[FLWR[LFLW\ DQG FHOO GHDWK 7KH DUFKDHDO DQG PHYDORQDWH SDWKZD\ EDFWHULD FKROHVWHURO

FDWDEROLVP FDQ GHSULYH FKROHVWHURO IURP QHXURQDO FHOO PHPEUDQH DQG RUJDQHOOH PHPEUDQHV
OLNH PLWRFKRQGULDO (5 DQG O\VRVRPDO PHPEUDQHV SURGXFLQJ FHOOXODU DQG RUJDQHOOH
G\VIXQFWLRQ DQG GHDWK 7KH :DUEXUJ SKHQRW\SH LV DOVR LPSRUWDQW LQ QHXURQDO GHJHQHUDWLRQ
SURGXFLQJ $,'6 GHPHQWLD 7KH LQFUHDVHG JO\FRO\VLV UHVXOWV LQ LQFUHDVHG JHQHUDWLRQ RI WKH
HQ]\PH JO\FHUDOGHK\GH SKRVSKDWH GHK\GURJHQDVH *$3' *$3' FDQ XQGHUJR
SRO\DGHQ\ODWLRQ YLD IUHH UDGLFDO DFWLYDWHG 3$53 HQ]\PH 7KH SRO\DGHQ\ODWHG *$3' FDQ
XQGHUJR QXFOHDU WUDQVORFDWLRQ SURGXFLQJ QXFOHDU FHOO GHDWK $OO RI WKHVH FRQWULEXWH WR WKH
JHQHVLV RI QHXURQDO GHJHQHUDWLRQ DQG $,'6 GHPHQWLD 7KH $,'6 GHPHQWLD PDOLJQDQW
WUDQVIRUPDWLRQ LPPXQH DFWLYDWLRQ DQG DXWRLPPXQH GLVHDVH ZKLFK DUH DOO SDUW RI WKH +,9
V\QGURPH FDQ EH UHODWHG WR WKH DUFKDHD DQG YLURLGV 7KH FKROHVWHURO FDWDEROLVP E\ DUFKDHD
DQG PHYDORQDWH SDWKZD\ EDFWHULD UHVXOWV LQ FKROHVWHURO GHSOHWLRQ IURP WKH KRVW ZKLFK KDV
EHHQ GHVFULEHG LQ $,'6 &KROHVWHURO PHWDEROLF GHIHFWV KDYH DOVR EHHQ GHVFULEHG LQ
&UHXW]IHOGW -DNRE¶V GLVHDVH 7KXV WKH DFWLQLGH YLURLG DQG PHYDORQDWH SDWKZD\ EDFWHULD
LQGXFHG PHWDEROLF JHQHWLF LPPXQH DQG QHXURQDO WUDQVPLVVLRQ FKDQJHV FDQ OHDG RQWR
DFTXLUHGLPPXQRGHILFLHQF\V\QGURPHDQG&UHXW]IHOGW-DNRE¶VGLVHDVH
5HIHUHQFHV
3ODQW'LVHDVH
DQDO\VLVDQGLGHQWLILFDWLRQRIDYHFWRU3URXWLVWDPRHVWD3K\VLRORJLFDODQG0ROHFXODU
3ODQW3DWKRORJ\
(XU-%LRFKHP

&KHP
9DQ1R6WUDQG
3XEOLVKHUV
3UHVV
0DDUWHQ$+0DULH-RVH0&RUQHOLD*YDQ+HOGHQ±0HHZVHQ)ULW](0DUWHQ
3+ 'HWHFWLRQ RI PXUDPLF DFLG LQ KXPDQ VSOHHQ ,QIHFWLRQ DQG ,PPXQLW\
±
86$
0LFURELRO

HYROXWLRQDU\UHODWLRQVKLSDPRQJDUFKDHEDFWHULDHXEDFWHULDDQGHXNDU\RWHV0LFURELRO
0RO%LRO5HY±
0DUJXOLV / $UFKDHDOHXEDFWHULDO PHUJHUV LQ WKH RULJLQ RI (XNDU\D
SK\ORJHQHWLFFODVVLILFDWLRQRIOLIH3URF1DWO$FDG6FL86$
+DQDJH : )UDVHU & 6SUDWW % )X]]\ VSHFLHV DPRQJ UHFRPELQRJHQLF
EDFWHULD%0&%LRORJ\

LQWUDFHOOXODU FKROHVWHURO GLVWULEXWLRQ E\ 1D.$73DVH- %LRO &KHP

0RQWDJQLHU/%ODQFKDUG$0\FRSODVPDVDVFRIDFWRUVLQLQIHFWLRQGXHWRWKH

KXPDQLPPXQRGHILFLHQF\YLUXV&OLQ,QIHFW'LV6
9LOODUUHDO/3+RZYLUXVHVVKDSHWKHWUHHRIOLIH)XWXUH9LURORJ\

0LFURELDO LVRSUHQRLG ELRV\QWKHVLV DQG KXPDQ Ȗį 7 FHOO DFWLYDWLRQ )(%6 /HWWHUV


&+$37(5
(1'26<0%,27,&$5&+$($/',*2;,1$1'$&48,5('
,00812'(),&,(1&<6<1'520(

,QWURGXFWLRQ
7KH DFTXLUHG LPPXQRGHILFLHQF\ V\QGURPH LV DVVRFLDWHG ZLWK DQ LQFUHDVHG
SUHGLOHFWLRQ WR RQFRJHQHVLV JOXWDPDWH H[FLWRWR[LFLW\ DQG $,'6 GHPHQWLD +,9 UHODWHG
SV\FKRVLV ZLWK VFKL]RSKUHQLIRUP RU ELSRODU PRRG GLVRUGHU W\SH RI SUHVHQWDWLRQ DQG
DXWRLPPXQH GLVHDVH $ GLVRUGHUHG LVRSUHQRLG SDWKZD\ KDV EHHQ GHVFULEHG LQ QHRSODVPV
SV\FKLDWULF GLVRUGHUV LPPXQH PHGLDWHG GLVRUGHUV OLNH PXOWLSOH VFOHURVLV DQG GHJHQHUDWLYH
GLVRUGHUVOLNH$O]KHLPHU¶V7KHLPSRUWDQWPHWDEROLFSURGXFWVRIWKHLVRSUHQRLGSDWKZD\DUH
GROLFKROXELTXLQRQHDQGGLJR[LQHQGRJHQRXV1D.$73DVHLQKLELWRU7KHHQGRV\PELRWLF
DFWLQLGLFDUFKDHDVHFUHWHVGLJR[LQ
$UFKDHDO GLJR[LQ FDQ UHJXODWH WKH WUDQVSRUW RI QHXWUDO DPLQR DFLGV W\URVLQH DQG
WU\SWRSKDQ7U\SWRSKDQPHWDEROLVPKDVDOVREHHQLPSOLFDWHGLQLPPXQHPHGLDWHGGLVRUGHUV
$OWHUDWLRQVLQTXLQROLQLFDFLGPHWDEROLVPKDYHEHHQLPSOLFDWHGLQWKHSDWKRORJLFDOOHVLRQVRI
$,'6 GHPHQWLD ,QWHUIHURQV KDYH EHHQ LPSOLFDWHG LQ WKH SDWKRJHQHVLV RI LPPXQH PHGLDWHG
GLVRUGHUV ,QWHUIHURQV DFW E\ LQGXFLQJ WKH HQ]\PH LQGROHDPLQH GLJR[\JHQDVH ZKLFK
FDWDO\VHV WKH FDWDEROLVP RI WU\SWRSKDQ DORQJ WKH N\QXUHQLQH SDWKZD\ 7KLV OHDGV RQ WR
WU\SWRSKDQGHSOHWLRQDQGDQLQFUHDVHLQOHYHORILWVPHWDEROLWHVN\QXUHQLQHDQGTXLQROLQLF
DFLG .\QXUHQLF SDWKZD\ KDV DOVR EHHQ LPSOLFDWHG LQ FDFKH[LD RFFXUULQJ LQ V\VWHPLF
GLVRUGHUV,WKDVEHHQUHSRUWHGWKDWWKHUHLVDQLQFUHDVHLQWKHDFWLYLW\RIN\QXUHQLQHSDWKZD\
HQ]\PHV LQ YDULRXV WLVVXHV IROORZLQJ V\VWHPLF LPPXQH VWLPXODWLRQ LQ FRQMXQFWLRQ ZLWK
PDFURSKDJH LQILOWUDWLRQ RI WKH DIIHFWHG WLVVXH 7KHVH UHVXOWV VXJJHVW WKDW N\QXUHQLQH
PHWDEROLWHVPD\KDYHVRPHFRQQHFWLRQZLWKLPPXQHUHVSRQVH
$UFKDHDOGLJR[LQE\DOWHULQJLQWUDFHOOXODUFDOFLXPPDJQHVLXPUDWLRVDQGWKHFKDQJHV
LQXELTXLQRQHOHYHOVFDQFRQWULEXWHWRPLWRFKRQGULDOG\VIXQFWLRQDQGIUHHUDGLFDOJHQHUDWLRQ
)UHHUDGLFDOPHFKDQLVPVUHODWHGWRTXLQROLQLFDFLGDQGJHQHUDWLRQRIQLWULFR[LGHKDYHEHHQ
LPSOLFDWHG LQ LPPXQH PHGLDWHG GLVRUGHUV OLNH $,'6 GHPHQWLD DQG YDVFXOLWLV
+\SRPDJQHVHPLDFRQVHTXHQWWRPHPEUDQH1D.$73DVHLQKLELWLRQDQGGROLFKROFDQDOWHU
JO\FRFRQMXJDWH PHWDEROLVP 6LDOLF DFLG DQG IXFRVH FRQWDLQLQJ FDUERK\GUDWH OLJDQGV KDYH
EHHQLPSOLFDWHGLQLQIODPPDWRU\DFXWHSKDVHUHVSRQVH$ODUJHRIUHVHDUFKVXSSRUWVWRUROH

IRUVPDOOFDUERK\GUDWHOLJDQGVLQWUDIILFNLQJRIOHXNRF\WHV,QFUHDVHGH[SUHVVLRQRIVHOHFWLRQV
KDVEHHQGRFXPHQWHGLQLPPXQHPHGLDWHGGLVRUGHUV
GRPLQDQWEUDLQ
7KLV VWXG\ ZDV XQGHUWDNHQ WR DVVHVV O 7KH LVRSUHQRLG SDWKZD\ 7KH
WU\SWRSKDQW\URVLQH FDWDEROLF SDWWHUQ *OYFRFRQMXJDWH PHWDEROLVP DQG 5%&
PHPEUDQHFKDQJHDVDUHIOHFWLRQRIFHOOXODUPHPEUDQHFKDQJHLVRSUHQRLGSDWKZD\SURGXFHV
IRXU PHWDEROLWHV FUXFLDO IRU PHPEUDQH VWUXFWXUH DQG IXQFWLRQFKROHVWHURO GROLFKRO
XELTXLQRQHDQGGLJR[LQ$K\SRWKHVLVLPSOLFDWLQJK\SRWKDODPLFDUFKDHDOGLJR[LQPHGLDWHG

PHPEUDQH 1D. $73DVH LQKLELWLRQ DV SLYRWDO WR DOO WKHVH FKDQJHV LQ WKH DFTXLUHG
LPPXQRGHILFLHQF\V\QGURPHLVSUHVHQWHGLQWKLVSDSHU

5HVXOWV
7KHDFWLYLW\RI+0*&R$UHGXFWDVHDQGWKHFRQFHQWUDWLRQRIGLJR[LQDQGGROLFKROZHUH
LQFUHDVHG LQ +,9 LQIHFWLRQ 7KH FRQFHQWUDWLRQ RI VHUXP XELTXLQRQH WKH DFWLYLW\ RI
HU\WKURF\WHPHPEUDQH1D.$73DVHDQGVHUXPPDJQHVLXPZHUHGHFUHDVHG
7KHFRQFHQWUDWLRQRIVHUXPWU\SWRSKDQTXLQROLQLFDFLGDQGVHURWRQLQZDVLQFUHDVHGLQWKH
SODVPD RI WKHVH SDWLHQWV ZKLOH WKDW RI W\URVLQH GRSDPLQH DQG QRUDGUHQDOLQH ZDV
GHFUHDVHG
1LFRWLQHDQGVWU\FKQLQHZHUHGHWHFWHGLQWKHSODVPDRISDWLHQWVZLWK+,9LQIHFWLRQEXW
ZHUH QRW GHWHFWHG LQ FRQWURO VHUXP 0RUSKLQH ZDV QRW GHWHFWHG LQ WKH SODVPD RI WKHVH
SDWLHQWV
7KHFRQFHQWUDWLRQRIWRWDOJO\FRVDPLQRJO\FDQV*$*LQFUHDVHGLQWKHVHUXPRI+,9

LQIHFWLRQ SDWLHQWV 7KH FRQFHQWUDWLRQ RI KHSDUDQ VXOSKDWH +6 KHSDULQ + GHUPDWDQ
VXOSKDWH'6FKRQGURLWLQVXOSKDWHV&K6DQGK\DOXURQLFDFLG+$ZDVLQFUHDVHG7KH
FRQFHQWUDWLRQRIWRWDOKH[RVHIXFRVHDQGVLDOLFDFLGZDVLQFUHDVHGLQWKHJO\FRSURWHLQVRI
WKH VHUXP LQ WKHVH SDWLHQWV 7KH FRQFHQWUDWLRQ RI JDQJOLRVLGHV JO\FRV\O GLJO\FHULGHV
FHUHEURVLGHVDQGVXOSKDWLGHVVKRZHGDVLJQLILFDQWLQFUHDVHLQWKHVHUXPLQWKHVHSDWLHQWV
7KHDFWLYLW\RIJO\FRVDPLQRJO\FDQ*$*GHJUDGLQJHQ]\PHVEHWDJOXFXURQLGDVHEHWD

1DFHW\O KH[RVDPLQLGDVH K\DOXURQLGDVH DQG FDWKHSVLQ' ZDV LQFUHDVHG LQ +,9O
LQIHFWLRQ ZKHQ FRPSDUHG WR WKH FRQWUROV 7KH DFWLYLW\ RI EHWDJDODFWRVLGDVH EHWD
IXFRVLGDVHDQGEHWDJOXFRVLGDVHLQFUHDVHGLQ+,9LQIHFWLRQ
7KHFRQFHQWUDWLRQRIWRWDO*$*DQGKH[RVHDQGIXFRVHUHVLGXHVRIJO\FRSURWHLQVLQWKH
5%& PHPEUDQH GHFUHDVHG VLJQLILFDQWO\ LQ +,9 LQIHFWLRQ 7KH FRQFHQWUDWLRQ RI 5%&
PHPEUDQHFKROHVWHUROLQFUHDVHGZKLOHWKDWRISKRVSKROLSLGGHFUHDVHG7KHUDWLRRI5%&
PHPEUDQHFKROHVWHUROSKRVSKROLSLGVLQFUHDVHGLQ+,9OLQIHFWLRQ
7KH DFWLYLW\ RI VXSHUR[LGH GLVPXWDVH 62' FDWDODVH JOXWDWKLRQH UHGXFWDVH DQG
JOXWDWKLRQHSHUR[LGDVHLQWKHHU\WKURF\WHVGHFUHDVHGVLJQLILFDQWO\LQ+,9OLQIHFWLRQ7KH
FRQFHQWUDWLRQRIPDORQGLDOGHK\GH0'$K\GURSHUR[LGHVFRQMXJDWHGGLHQHVDQGQLWULF
R[LGH12LQFUHDVHGVLJQLILFDQWO\7KHFRQFHQWUDWLRQRIUHGXFHGJOXWDWKLRQHGHFUHDVHGLQ
+,9OLQIHFWLRQ

'LVFXVVLRQ
$UFKDHDOGLJR[LQDQGPHPEUDQH1D. $73DVHLQKLELWLRQLQUHODWLRQWR$,'6
7KH DUFKDHDRQ VWHURLGHOOH ';3 SDWKZD\ DQG WKH XSUHJXODWHG SHQWRVH SKRVSKDWH
SDWKZD\FRQWULEXWHWRGLJR[LQV\QWKHVLV7KHLQFUHDVHLQWKHDFWLYLW\RI+0*&R$UHGXFWDVH
LQ +,9O LQIHFWLRQ VXJJHVWV DQ XSUHJXODWLRQ RI WKH LVRSUHQRLG SDWKZD\ 7KHUH LV D PDUNHG
LQFUHDVHLQSODVPDGLJR[LQDQGGROLFKRODQGWKLVLQFUHDVHPD\EHDFRQVHTXHQFHRILQFUHDVHG
FKDQQHOOLQJ RI LQWHUPHGLDWHV RI WKH LVRSUHQRLG SDWKZD\ IRU WKHLU ELRV\QWKHVLV ,Q WKLV
FRQQHFWLRQLQFRUSRUDWLRQRI &DFHWDWHLQWRGLJR[LQLQWKHUDWEUDLQKDVEHHQVKRZQE\XV
LQGLFDWLQJ WKDW DFHW\O &R$ LV WKH SUHFXUVRU IRU GLJR[LQ ELRV\QWKHVLV LQ PDPPDOV DOVR 7KH
LQFUHDVH LQ HQGRJHQRXV GLJR[LQ D SRWHQW LQKLELWRU RI PHPEUDQH 1D. $73DVH FDQ
GHFUHDVHWKLVHQ]\PHDFWLYLW\,Q+,9LQIHFWLRQWKHUHZDVVLJQLILFDQWLQKLELWLRQRIWKH5%&
PHPEUDQH1D.$73DVH7KHLQKLELWLRQRI1D.$73DVHE\GLJR[LQLVNQRZQWRFDXVH
DQ LQFUHDVH LQ LQWUDFHOOXODU FDOFLXP UHVXOWLQJ IURP LQFUHDVHG 1D&D H[FKDQJH LQFUHDVHG
HQWU\RIFDOFLXPYLDWKHYROWDJHJDWHGFDOFLXPFKDQQHODQGLQFUHDVHGUHOHDVHRIFDOFLXPIURP
LQWUDFHOOXODUHQGRSODVPLFUHWLFXOXPFDOFLXPVWRUHV7KLVLQFUHDVHLQLQWUDFHOOXODUFDOFLXPE\
GLVSODFLQJPDJQHVLXPIURPLWVELQGLQJVLWHVFDXVHVDGHFUHDVHLQWKHIXQFWLRQDODYDLODELOLW\
RI PDJQHVLXP 7KLV GHFUHDVH LQ WKH DYDLODELOLW\ RI PDJQHVLXP FDQ FDXVH GHFUHDVHG
PLWRFKRQGULDO$73IRUPDWLRQZKLFKDORQJZLWKORZPDJQHVLXPFDQFDXVHIXUWKHULQKLELWLRQ
RI1D.$73DVHVLQFH$73PDJQHVLXPFRPSOH[LVWKHDFWXDOVXEVWUDWHIRUWKLVUHDFWLRQ
&\WRVROLF IUHH FDOFLXP QRUPDOO\ EXIIHUHG E\ WZR PHFKDQLVPV $73 GHSHQGHQW FDOFLXP
H[WUXVLRQIURPWKHFHOODQG$73GHSHQGHQWVHTXHVWUDWLRQRIFDOFLXPZLWKLQWKHHQGRSODVPLF
UHWLFXOXP 7KH PDJQHVLXP UHODWHG PLWRFKRQGULDO G\VIXQFWLRQ UHVXOWV LQ GHIHFWLYH FDOFLXP
H[WUXVLRQIURPWKHFHOO7KHUHLVWKXVDSURJUHVVLYHLQKLELWLRQRI1D.$73DVHDFWLYLW\ILUVW
WULJJHUHGE\GLJR[LQ/RZLQWUDFHOOXODUPDJQHVLXPDQGKLJKLQWUDFHOOXODUFDOFLXPFRQVHTXHQW
WR1D.$73DVHLQKLELWLRQDSSHDUVWREHFUXFLDOWRWKHSDWKRSK\VLRORJ\RI+,9OLQIHFWLRQ
6HUXPPDJQHVLXPZDVDVVHVVHGLQ+,9OLQIHFWLRQDQGZDVIRXQGWREHUHGXFHG
$UFKDHDOGLJR[LQLPPXQHDFWLYDWLRQDQG$,'6
,QFUHDVHG LQWUDFHOOXODU FDOFLXP DFWLYDWHV WKH FDOFLXP GHSHQGHQW FDOFLQHXULQ VLJQDO
WUDQVGXFWLRQSDWKZD\ZKLFKFDQSURGXFH7FHOODFWLYDWLRQDQGVHFUHWLRQRI,QWHUOHXNLQ
DQG71)DOSKD7XPRXUQHFURVLVIDFWRUDOSKD71)DOSKDELQGVWRLWVUHFHSWRU71)5,
DQG DFWLYDWHV WKH WUDQVFULSWLRQ IDFWRUV 1).% DQG $3 OHDGLQJ WR WKH LQGXFWLRQ RI
SURLQIODPPDWRU\ DQG LPPXQRPRGXODWRU\ JHQHV 7KLV FDQ H[SODLQ WKH LPPXQH DFWLYDWLRQ LQ

WKHHDUO\SKDVHRI+,9OLQIHFWLRQ3RO\FORQDO%FHOODFWLYDWLRQDQGSUROLIHUDWLRQKDYHEHHQ
GHVFULEHGLQWKHHDUO\SKDVHRI+,9OLQIHFWLRQ+,9OUHSOLFDWLRQLVIDFLOLWDWHGE\DFWLYDWHG7
FHOOV7KLVLVEHFDXVHFKLHIO\DPRQJWKHLQGXFLEOHFHOOXODUSURWHLQVWKDWSURPRWHWKHJURZWKRI
+,9O LV WUDQVFULSWLRQ IDFWRU 1).% +,9 KDV LQFRUSRUDWHG WZR VXFK 1).% ELQGLQJ
HQKDQFHUHOHPHQWVLQWRLWVRZQJHQRPHZKLFKDOORZVWKHWULJJHULQJRI+,9OWUDQVFULSWLRQLQ
WKH SUHVHQFH RI QXFOHDU 1).% 1).% LQ LWV WXUQ DFWV FRRSHUDWLYHO\ ZLWK D VHFRQG
WUDQVFULSWLRQIDFWRU6SOWRSURPRWHWKHLQLWLDOOHYHORIYLUDOJHQHH[SUHVVLRQZKLFKLQWXUQ
OHDGV WR WKH V\QWKHVLV RI WKH +,9O UHJXODWRU\ SURWHLQ 7DW +,9O 7DW IXQFWLRQV DV D SRWHQW
DPSOLILHURIWKHH[SUHVVLRQRIDOOYLUDOJHQHVLQFOXGLQJQHI2QHRIWKHIXQFWLRQVRIQHILVWR
DXJPHQW WKH VWDWH RI 7FHOO DFWLYDWLRQ IXUWKHU E\ HQKDQFLQJ VLJQDO WUDQVGXFWLRQ PHGLDWHG
WKURXJK7FHOOUHFHSWRUVHQJDJHGE\WKHDQWLJHQ,QDUHFHQWVWXG\LWZDVIRXQGWKDWH[SRVXUH
WR WHWDQXV WR[RLG DQWLJHQ D FRPPRQ UHFDOO DQWLJHQ OHG WR D VLJQLILFDQW IROG EXW
WUDQVLHQWLQFUHDVHLQWKHYLUDOORDGLQEORRGDQGDQLQFUHDVHLQWKHWRWDOQXPEHURILQIHFWHGFHOO
LQ EORRG RU O\PSKQRGHV DQG DQ LQFUHDVHG HDVH RI +,9O LVRODWLRQ IURP SHULSKHUDO EORRG RI
PRQRQXFOHDU FHOOV 71) DOSKD FDQ DOVR EULQJ DERXW DSRSWRVLV RI WKH FHOO ,W ELQGV WR LWV
UHFHSWRUDQGDFWLYDWHVFDVSDVHDQ,&(SURWHDVHZKLFKFRQYHUWV,/EHWDSUHFXUVRUWR,/
EHWD,/EHWDSURGXFHVDSRSWRVLVRIWKHQHXURQVLQ$,'6GHPHQWLDDQGWKH&'FHOOLQ+,9
LQIHFWLRQ&'FHOODSRSWRVLVDQG&'GHSOHWLRQDUHLPSRUWDQWLQWKHSDWKRJHQHVLVRI+,9
LQIHFWLRQ,/EHWDFDQLQGXFH+,9SURWHLQH[SUHVVLRQE\WUDQVFULSWLRQUHODWHGPHFKDQLVP
DQGFRQWULEXWHWRWKHSDWKRJHQHVLVRI$,'6GHPHQWLD,QWHUOHXNLQEHWDDQG71)DOSKDFDQ
DOVRSURPRWHWKHJURZWKRI&16O\PSKRPDLQ$,'60HPEUDQH1D.$73DVHLQKLELWLRQ
FDQSURGXFHLPPXQHDFWLYDWLRQDQGLVUHSRUWHGWRLQFUHDVH&'&'UDWLRVDVH[HPSOLILHGE\
WKH DFWLRQ RI OLWKLXP 7KH +,9 YLUXV ELQGV RQO\ WR WKH &' UHFHSWRU $ KLJK LQLWLDO &'
FRXOG SUHGLVSRVH WR +,9O LQIHFWLRQ DQG LW LV SRVVLEOH WR KDYH +,9O UHVLVWDQFH LQ D &'
GHSOHWHGSDWLHQWV,WKDVEHHQUHFHQWO\UHSRUWHGWKDWLPPXQHDFWLYDWLRQDQGDKLJK&'FRXQW
FDQSUHGLVSRVHWR+,9OLQIHFWLRQ,WLVSRVVLEOHWRK\SRWKHVL]HDSUH+,9OVWDWHZLWKDKLJK
&' FRXQW GXH WR K\SRWKDODPLF DUFKDHDO GLJR[LQ K\SHUVHFUHWLRQ /H 9D\ KDV UHSRUWHG
VWUXFWXUDOFKDQJHVLQWKHK\SRWKDODPXVLQKRPRVH[XDOVSUHGLVSRVHGWR$,'6
7KHSURFHVVRI+,9OLQGXFHGGLVHDVHLVEORFNHGE\VHYHUDOKRVWIDFWRUV7KLVLQFOXGHV
&' 7FHOO GHULYHG VXSSUHVVRU IDFWRUV ,Q WKH SUHVHQFH RI HOHYDWHG GLJR[LQ DQG PHPEUDQH
1D.$73DVHLQKLELWLRQWKH&'FRXQWFRPHVGRZQDQGWKHSURWHFWLYHHIIHFWLVJRQH$OVR
SURWHFWLYHLVWKHWUDQVIRUPLQJJURZWKIDFWRUEHWD7*)EHWD7*)EHWDUHFHSWRULVDSURWHLQ

W\URVLQH NLQDVH UHFHSWRU 7KLV LV G\VIXQFWLRQDO LQ WKH SUHVHQFH RI LQWUDFHOOXODU PDJQHVLXP
GHILFLHQF\ZKLFKSURGXFHVDSKRVSKRU\ODWLRQGHIHFW

$UFKDHDOGLJR[LQDQGUHJXODWLRQRIQHXURWUDQVPLWWHUV\QWKHVLVDQGIXQFWLRQLQUHODWLRQ
WR$,'6
7KHDUFKDHDRQQHXURWUDQVPLQRLGVKLNLPLFDFLGSDWKZD\FRQWULEXWHVWRWU\SWRSKDQDQG
W\URVLQH V\QWKHVLV DQG FDWDEROLVP JHQHUDWLQJ QHXURWUDQVPLWWHUV DQG QHXURDFWLYH DONDORLGV
'LJR[LQ DSDUW IURP DIIHFWLQJ FDWLRQ WUDQVSRUW LV DOVR UHSRUWHG WR LQIOXHQFH WKH WUDQVSRUW RI
YDULRXV PHWDEROLWHV DFURVV FHOOXODU PHPEUDQHV LQFOXGLQJ DPLQR DFLGV DQG YDULRXV
QHXURWUDQVPLWWHUV 7ZR RI WKH DPLQR DFLGV LQ WKLV UHVSHFW DUH LPSRUWDQW WU\SWRSKDQ D
SUHFXUVRUIRUVWU\FKQLQHDQGQLFRWLQHDQGW\URVLQHDSUHFXUVRUIRUPRUSKLQH:HKDGDOUHDG\
VKRZQ SUHVHQFH RI HQGRJHQRXV PRUSKLQH LQ WKH EUDLQ RI FDWV ORDGHG ZLWK W\URVLQH DQG
HQGRJHQRXVVWU\FKQLQHDQGQLFRWLQHLQWKHEUDLQRIUDWVORDGHGZLWKWU\SWRSKDQ7KHUHVXOWV
VKRZHG WKDW WKH FRQFHQWUDWLRQ RI WU\SWRSKDQ TXLQROLQLF DFLG QLFRWLQH VWU\FKQLQH DQG
VHURWRQLQZDVIRXQGWREHKLJKHULQWKHSODVPDRISDWLHQWVZLWK+,9OLQIHFWLRQZKLOHWKDWRI
W\URVLQH PRUSKLQH GRSDPLQH DQG QRUHSLQHSKULQH ZDV ORZHU 7KXV WKHUH LV DQ LQFUHDVH LQ
WU\SWRSKDQDQGLWVFDWDEROLWHVDQGDUHGXFWLRQLQW\URVLQHDQGLWVFDWDEROLWHVLQWKHSDWLHQW¶V
VHUXP 7KLV FRXOG EH GXH WR WKH IDFW WKDW GLJR[LQ FDQ UHJXODWH QHXWUDO DPLQR DFLG WUDQVSRUW
V\VWHP ZLWK SUHIHUHQWLDO SURPRWLRQ RI WU\SWRSKDQ WUDQVSRUW RYHU W\URVLQH 7KH GHFUHDVH LQ
PHPEUDQH 1D. $73DVH DFWLYLW\ LQ +,9 LQIHFWLRQ FRXOG EH GXH WR WKH IDFW WKDW WKH
K\SHUSRODULVLQJ QHXURWUDQVPLWWHUV GRSDPLQH PRUSKLQH DQG QRUDGUHQDOLQH DUH UHGXFHG DQG
WKH GHSRODULVLQJ QHXURDFWLYH D FRPSRXQGV VHURWRQLQ VWU\FKQLQH QLFRWLQH DQG TXLQROLQLF
DFLGDUHLQFUHDVHG
7KH VFKL]RLG QHXURWUDQVPLWWHU SDWWHUQ RI UHGXFHG GRSDPLQH QRUDGUHQDOLQH DQG

PRUSKLQHDQGLQFUHDVHGVHURWRQLQVWU\FKQLQHDQGQLFRWLQHLVFRPPRQWR+,9,LQIHFWLRQDQG
VFKL]RLG VWDWH 4XLQROLQLF DFLG DQ 10'$ DJRQLVW FDQ FRQWULEXWH WR 10'$ H[FLWRWR[LFLW\
UHSRUWHGLQWKHVFKL]RLGVWDWH6WU\FKQLQHE\EORFNLQJJO\FLQHUJLFWUDQVPLVVLRQFDQFRQWULEXWH
WRWKHGHFUHDVHGLQKLELWRU\WUDQVPLVVLRQLQVFKL]RLGVWDWH5HFHQWGDWDVXJJHVWWKDWWKHLQLWLDO
DEQRUPDOLW\ LQ WKH VFKL]RLG VWDWH LQYROYHV D K\SRGRSDPLQHUJLF VWDWH DQG WKH ORZ GRSDPLQH
OHYHOV QRZ REVHUYHG DJUHHV ZLWK WKLV 1LFRWLQH E\ LQWHUDFWLQJ ZLWK QLFRWLQLF UHFHSWRUV FDQ
IDFLOLWDWHWKHUHOHDVHRIGRSDPLQHSURPRWLQJWKHGRSDPLQHUJLFWUDQVPLVVLRQLQWKHEUDLQ7KLV
FDQH[SODLQWKHLQFUHDVHGGRSDPLQHUJLFWUDQVPLVVLRQLQWKHEUDLQLQWKHVHWWLQJRIGHFUHDVHG

GRSDPLQHV\QWKHVLV7KHLQFUHDVHGVHURWRQLQHUJLFDFWLYLW\DQGUHGXFHGQRUDGHQHUJLFRXWIORZ
IURPORFXVFRUHXOHXVUHSRUWHGHDUOLHULQWKHVFKL]RLGVWDWHDJUHHVZLWKRXUILQGLQJRIHOHYDWHG
VHURWRQLQDQGUHGXFHGQRUDGUHQDOLQHOHYHOV4XLQROLQLFDFLGKDVEHHQLPSOLFDWHGLQLPPXQH
DFWLYDWLRQLQRWKHUDXWRLPPXQHGLVHDVHVOLNH6/(DQGFRXOGFRQWULEXWHWRWKHVDPHLQ+,9
LQIHFWLRQ 6HURWRQLQ GRSDPLQH DQG QRUDGUHQDOLQH UHFHSWRUV KDYH EHHQ GHPRQVWUDWHG LQ WKH
O\PSKRF\WHV,WKDVEHHQUHSRUWHGWKDWGXULQJLPPXQHDFWLYDWLRQVHURWRQLQLVLQFUHDVHGZLWKD
FRUUHVSRQGLQJ UHGXFWLRQ LQ GRSDPLQH DQG QRUDGUHQDOLQH LQ WKH EUDLQVWHP PRQRDPLQHUJLF
QXFOHL7KXVHOHYDWHGVHURWRQLQDQGUHGXFHGQRUDGUHQDOLQHDQGGRSDPLQHFRXOGFRQWULEXWHWR
WKH LPPXQH DFWLYDWLRQ LQ +,9 LQIHFWLRQ (QGRJHQRXV PRUSKLQH GHILFLHQF\ LV QRWLFHG LQ
SDWLHQWVZLWK+,9LQIHFWLRQ0RUSKLQHKDVDQLPPXQRVXSSUHVVLYHHIIHFWDQGLWVGHILFLHQF\
FDQ FRQWULEXWH WR LPPXQH DFWLYDWLRQ LQ +,9O LQIHFWLRQ 4XLQROLQLF DFLG DV ZHOO DV
QHXURWUDQVPLWWHULQGXFHGLPPXQHDFWLYDWLRQFDQSURPRWH+,9OUHSOLFDWLRQ7KXVDVFKL]RLG
QHXURWUDQVPLWWHU SDWWHUQ FDQ SUHGLVSRVH WR +,9 LQIHFWLRQ 7KH QHXURWUDQVPLWWHU SDWWHUQ RI
UHGXFHG GRSDPLQH DQG QRUDGUHQDOLQH DQG LQFUHDVHG VHURWRQLQ FDQ FRQWULEXWH WR WKH
VFKL]RSKUHQLIRUPSV\FKRVLVGHVFULEHGLQ+,9OLQIHFWLRQ
,Q WKH SUHVHQFH RI K\SRPDJQHVHPLD WKH 0J EORFN RQ WKH 10'$ UHFHSWRU LV
UHPRYHG OHDGLQJ WR 10'$ H[FLWRWR[LFLW\ 7KH LQFUHDVHG SUHV\QDSWLF QHXURQDO &D FDQ
SURGXFH F\FOLF $03 GHSHQGHQW SKRVSKRU\ODWLRQ RI V\QDSVLQV UHVXOWLQJ LQ LQFUHDVHG
QHXURWUDQVPLWWHU UHOHDVH LQWR WKH V\QDSWLF MXQFWLRQ DQG YHVLFXODU UHF\FOLQJ ,QFUHDVHG
LQWUDFHOOXODU &D LQ WKH SRVW V\QDSWLF QHXURQ FDQ DOVR DFWLYDWH WKH &D GHSHQGHQW 10'$
VLJQDOWUDQVGXFWLRQ7KHSODVPDPHPEUDQHQHXURWUDQVPLWWHURQ WKHVXUIDFHRIWKHJOLDOFHOO
DQGSUHV\QDSWLFQHXURQLVFRXSOHGZLWKD1DJUDGLHQWZKLFKLVGLVUXSWHGE\WKHLQKLELWLRQRI
1D. $73DVH UHVXOWLQJ LQ GHFUHDVHG FOHDUDQFH RI JOXWDPDWH E\ SUHV\QDSWLF DQG JOLDO
XSWDNH DW WKH HQG RI V\QDSWLF WUDQVPLVVLRQ %\ WKHVH PHFKDQLVPV LQKLELWLRQ RI 1D.
$73DVHFDQSURPRWHJOXWDPDWHUJLFWUDQVPLVVLRQ7KHHOHYDWHGOHYHOVRITXLQROLQLFDFLGDQG
VHURWRQLQ FDQ DOVR FRQWULEXWH WR 10'$ H[FLWRWR[LFLW\ 4XLQROLQLF DFLG DQG VHURWRQLQ DUH
SRVLWLYH PRGXODWRUV RI WKH 10'$ UHFHSWRU 6WU\FKQLQH FDQ DOVR FRQWULEXWH WR 10'$
H[FLWRWR[LFLW\ 6WU\FKQLQH GLVSODFHV JO\FLQH IURP LWV ELQGLQJ VLWHV DQG LQKLELWV JO\FLQHUJLF
LQKLELWRU\WUDQVPLVVLRQLQWKHEUDLQ7KHJO\FLQHLVIUHHWRELQGWRWKHVWU\FKQLQHLQVHQVLWLYH
VLWH RI WKH 10'$ UHFHSWRU DQG SURPRWH 10'$ H[FLWDWRU\ WUDQVPLVVLRQ 10'$
H[FLWRWR[LFLW\KDVEHHQLPSOLFDWHGLQQHXURQDOGHJHQHUDWLRQREVHUYHGLQ$,'6GHPHQWLD

$UFKDHDOGLJR[LQDQGUHJXODWLRQRIJROJLERG\O\VRVRPDOIXQFWLRQLQUHODWLRQWR$,'6
7KH DUFKDHDRQ JO\FRVDPLQRJO\FRLG DQG IUXFWRVRLG FRQWULEXWHV WR JO\FRFRQMXJDWH
V\QWKHVLV DQG FDWDEROLVP E\ WKH SURFHVV RI IUXFWRO\VLV 7KH 0J GHSOHWLRQ FDQ DIIHFW WKH
PHWDEROLVPRIJO\FRVDPLQRJO\FDQVJO\FRSURWHLQVDQGJO\FROLSLGV7KHHOHYDWLRQLQWKHOHYHO
RIGROLFKROPD\VXJJHVWLWVLQFUHDVHGDYDLODELOLW\IRU1JO\FRV\ODWLRQRISURWHLQV0DJQHVLXP
GHILFLHQF\ FDQ OHDG WR LQFUHDVHG FHUHEURVLGH DQG JDQJOLRVLGH V\QWKHVLV ,Q 0J GHILFLHQF\
WKH JO\FRO\VLV FLWULF DFLG F\FOH DQG R[LGDWLYH SKRVSKRU\ODWLRQ DUH EORFNHG DQG PRUH RI
JOXFRVH SKRVSKDWH LV FKDQQHOOHG IRU WKH V\QWKHVLV RI JO\FRVDPLQRJO\FDQV *$* 7KH
UHVXOWVVKRZDQLQFUHDVHLQWKHFRQFHQWUDWLRQRIVHUXPWRWDODQGGLIIHUHQWLDO*$*IUDFWLRQV
JO\FROLSLGVDQGFDUERK\GUDWHFRPSRQHQWVRIJO\FRSURWHLQVLQ+,9OLQIHFWLRQ7KHLQFUHDVHLQ
WKHFDUERK\GUDWHFRPSRQHQWVWRWDOKH[RVHIXFRVHDQGVLDOLFDFLGLQ+,9OLQIHFWLRQZDVQRW
WR WKH VDPH H[WHQW VXJJHVWLQJ TXDOLWDWLYH FKDQJH LQ JO\FRSURWHLQ VWUXFWXUH 7KH DFWLYLW\ RI
*$* GHJUDGLQJ HQ]\PHV DQG WKDW RI JO\FRK\GURODVHV VKRZHG D VLJQLILFDQW LQFUHDVH LQ WKH
VHUXP LQ +,9O LQIHFWLRQ ,QWUDFHOOXODU 0J GHILFLHQF\ DOVR UHVXOWV LQ GHIHFWLYH XELTXLWLQ
GHSHQGHQWSURWHRO\WLFSURFHVVLQJRIJO\FRFRQMXJDWHVDVLWUHTXLUHV0JIRULWVIXQFWLRQ7KH
LQFUHDVH LQ WKH DFWLYLW\ RI JO\FRK\GURODVHV DQG *$* GHJUDGLQJ HQ]\PHV FRXOG EH GXH WR
UHGXFHG O\VRVRPDO VWDELOLW\ DQG FRQVHTXHQW OHDNDJH RI O\VRVRPDO HQ]\PHV LQWR WKH VHUXP
7KHLQFUHDVHLQWKHFRQFHQWUDWLRQRIFDUERK\GUDWHFRPSRQHQWVRIJO\FRSURWHLQVDQG*$*LQ
VSLWH RI LQFUHDVHG DFWLYLW\ RI JO\FRK\GURODVHV PD\ EH GXH WR WKHLU SRVVLEOH UHVLVWDQFH WR
FOHDYDJHE\JO\FRK\GURODVHVFRQVHTXHQWWRTXDOLWDWLYHFKDQJHLQWKHLUVWUXFWXUH3URWHRJO\FDQ
FRPSOH[HVIRUPHGLQWKHSUHVHQFHRIDOWHUHGFDOFLXPPDJQHVLXPUDWLRVLQWUDFHOOXODUO\PD\EH
VWUXFWXUDOO\DEQRUPDODQGUHVLVWDQWWRO\VRVRPDOHQ]\PHVDQGPD\DFFXPXODWH6WUXFWXUDOO\
DEQRUPDO JO\FRSURWHLQV DQG SURWHRJO\FDQV UHVLVW FDWDEROLVP E\ O\VRVRPDO HQ]\PHV DQG
DFFXPXODWHOHDGLQJWRQHXURQDOGHJHQHUDWLRQLQ$,'6GHPHQWLD,QWHUDFWLRQEHWZHHQ+6DQG
&K6 SURWHRJO\FDQV ZLWK QHXURQDO JO\FRSURWHLQV DQG UHGXFHG SURWHRO\WLF GLJHVWLRQ RI WKHVH
FRPSOH[HVKDYHEHHQUHSRUWHGWROHDGWRQHXURQDOGHJHQHUDWLRQDQGSRVVLEO\$,'6GHPHQWLD
7KHSURWHLQSURFHVVLQJGHIHFWFDQUHVXOWLQGHIHFWLYHJO\FRV\ODWLRQRIH[RJHQRXVYLUDO
JO\FRSURWHLQ DQWLJHQV ZLWK FRQVHTXHQW GHIHFWLYH IRUPDWLRQ RI 0+&JO\FRSURWHLQ DQWLJHQ
FRPSOH[ 7KH 0+& OLQNHG SHSWLGH WUDQVSRUWHU D 3JO\FRSURWHLQ ZKLFK WUDQVSRUWV 0+&
DQWLJHQFRPSOH[WRWKHDQWLJHQSUHVHQWLQJFHOOVXUIDFHKDVDQ$73ELQGLQJVLWH7KHSHSWLGH
WUDQVSRUWHU LV G\VIXQFWLRQDO LQ WKH SUHVHQFH RI PDJQHVLXP GHILFLHQF\ 7KLV UHVXOWV LQ
GHIHFWLYH WUDQVSRUW RI 0+& FODVV YLUDO JO\FRSURWHLQ DQWLJHQ FRPSOH[ WR WKH DQWLJHQ

SUHVHQWLQJ FHOO VXUIDFH IRU UHFRJQLWLRQ E\ &' RU &' FHOO 'HIHFWLYH SUHVHQWDWLRQ RI
H[RJHQRXVYLUDODQWLJHQVFDQSURGXFHLPPXQHHYDVLRQE\WKHYLUXVDVLQ+,9OLQIHFWLRQDQG
YLUDO SHUVLVWHQFH 7KLV FRXOG EH WKH UHDVRQ IRU WKH SHUVLVWHQFH RI RWKHU YLUXVHV OLNH +69
SURGXFLQJ.DSRVL¶VVDUFRPDDQGHEVWHLQEDUUYLUXVSURGXFLQJQRQ+RGJNLQ¶VO\PSKRPD$
QXPEHURIIXFRVHDQGVLDOLFDFLGFRQWDLQLQJQDWXUDOOLJDQGVDUHLQYROYHGLQDGKHVLRQRIWKH
O\PSKRF\WH SURGXFLQJ OHXNRF\WH WUDIILFNLQJ DQG H[WUDYDVDWLRQ LQWR WKH SHULYDVFXODU VSDFH
DQGWKHVDPHSKHQRPHQDFRXOGFRQWULEXWHWRWKHSDWKRORJ\RI$,'6GHPHQWLD$EQRUPDOO\
JO\FRV\ODWHG WXPRXU DQWLJHQV FDQ OHDG WR GHIHFWLYH WXPRXU DQWLJHQ SUHVHQWDWLRQ DQG ORVV RI
LPPXQRVXUYHLOODQFH E\ WKH QDWXUDO NLOOHU FHOOV $OWHUHG FHOO VXUIDFH JO\FRSURWHLQV
VLDOROLJDQGVDQGIXFROLJDQGVJO\FROLSLGVDQG*$*FDQOHDGWRGHIHFWLYHFRQWDFWLQKLELWLRQ
DQG RQFRJHQHVLV 7KH YDVRDFWLYH LQWHVWLQDO SRO\SHSWLGH 9,3 UHFHSWRU SURWHLQV DQG
QHXUROHXNLQ 1/. KDV D VWUXFWXUDO VLPLODULW\ WR WKH +,9O HQYHORSH SURWHLQ JS
([SUHVVLRQ RI LQFUHDVHG DPRXQWV RI 9,3 UHFHSWRU SURWHLQV RU 1/. FDQ KDSSHQ LI WKH\ DUH
GHIHFWLYHO\ SURFHVVHG UHVLVW O\VRVRPDO GLJHVWLRQ DQG DFFXPXODWH 9,3 KDV EHHQ UHSRUWHG WR
KDYHDQLPPXQRUHJXODWRU\IXQFWLRQLQKXPDQV9,3 KDVEHHQUHSRUWHGWRLQKLELWWKHUHVSRQVH
RIPXULQHO\PSKRF\WHVWR&RQ$DQG3+$SK\WRKHPDJJOXWLQLQ9,3KDVDOVREHHQUHSRUWHG
WR LQKLELW WKH UHVSRQVH RI KXPDQ FLUFXODWLQJ PRQRQXFOHDU FHOO SUHSDUDWLRQ WR SRNHZHHG
PLWRJHQ9,3DOVRKDVEHHQUHSRUWHGWRLQKLELW1.FHOODFWLYLW\9,3DOVRLQKLELWVSURGXFWLRQ
RILQWHUOHXNLQLQ&RQ$VWLPXODWHGPXULQHO\PSKRF\WHFXOWXUH7KHLPPXQRVXSSUHVVLRQLQ
$,'6FRXOGEHUHODWHGWRLQFUHDVHG9,3UHFHSWRUH[SUHVVLRQ

$UFKDHDO GLJR[LQ DQG DOWHUDWLRQ LQ PHPEUDQH VWUXFWXUH DQG PHPEUDQH IRUPDWLRQ LQ
UHODWLRQWR$,'6
7KH DUFKDHDRQ VWHURLGHOOH JO\FRVDPLQRJO\FRLG DQG IUXFWRVRLG FRQWULEXWH WR FHOO
PHPEUDQHIRUPDWLRQV\QWKHVL]LQJFKROHVWHUROE\WKH';3SDWKZD\DQGJO\FRVDPLQRJO\FDQV
E\ IUXFWRO\VLV 7KH DOWHUDWLRQ LQ WKH LVRSUHQRLG SDWKZD\ VSHFLILFDOO\ FKROHVWHURO DV ZHOO DV
FKDQJHV LQ JO\FRSURWHLQV DQG *$* FDQ DIIHFW FHOOXODU PHPEUDQHV 7KH XSUHJXODWLRQ RI WKH
LVRSUHQRLG SDWKZD\ FDQ OHDG WR LQFUHDVHG FKROHVWHURO V\QWKHVLV DQG PDJQHVLXP GHILFLHQF\
FDQ LQKLELW SKRVSKROLSLG V\QWKHVLV 3KRVSKROLSLG GHJUDGDWLRQ LV LQFUHDVHG RZLQJ WR DQ
LQFUHDVH LQ LQWUDFHOOXODU FDOFLXP DFWLYDWLQJ SKRVSKROLSDVHV $ DQG ' 7KH FKROHVWHURO
SKRVSKROLSLG UDWLR RI WKH 5%& PHPEUDQH ZDV LQFUHDVHG LQ +,9 LQIHFWLRQ 7KH
FRQFHQWUDWLRQ RI WRWDO *$* KH[RVH DQG IXFRVH RI JO\FRSURWHLQ GHFUHDVHG LQ WKH 5%&
PHPEUDQH DQG LQFUHDVHG LQ WKH VHUXP VXJJHVWLQJ WKHLU UHGXFHG LQFRUSRUDWLRQ LQWR WKH
PHPEUDQH DQG GHIHFWLYH PHPEUDQH IRUPDWLRQ 7KH JO\FRSURWHLQV *$* DQG JO\FROLSLGV RI

WKHFHOOXODUPHPEUDQHDUHIRUPHGLQWKHHQGRSODVPLFUHWLFXOXPZKLFKLVWKHQEXGGHGRIIDV
DYHVLFOHZKLFKIXVHVZLWKWKHJROJLFRPSOH[7KHJO\FRFRQMXJDWHVDUHWKHQWUDQVSRUWHGYLD
WKH JROJL FKDQQHO DQG WKH JROJL YHVLFOH IXVHV ZLWK WKH FHOO PHPEUDQH 7KLV WUDIILFNLQJ
GHSHQGV XSRQ *73DVHV DQG OLSLG NLQDVHV ZKLFK DUH FUXFLDOO\ GHSHQGHQW RQ PDJQHVLXP DQG
DUH GHIHFWLYH LQ PDJQHVLXP GHILFLHQF\ 7KH FKDQJHV LQ PHPEUDQH VWUXFWXUH SURGXFHG E\
DOWHUDWLRQLQJO\FRFRQMXJDWHVDQGFKROHVWHUROSKRVSKROLSLGUDWLRFDQSURGXFHFKDQJHVLQWKH
FRQIRUPDWLRQ RI 1D. $73DVH UHVXOWLQJ LQ IXUWKHU PHPEUDQH 1D. $73DVH LQKLELWLRQ
$OWHUDWLRQLQWKH&'DQGPLFURJOLDOFHOOPHPEUDQHFDQSURGXFHFRQIRUPDWLRQFKDQJHLQWKH
&' UHFHSWRU UHVXOWLQJ LQ LQFUHDVHG ELQGLQJ RI JS +,9 YLUDO JO\FRSURWHLQ 7KH FHOO
PHPEUDQHFKDQJHFDQDOVRDIIHFWWKHFRQIRUPDWLRQRIWKH9,3UHFHSWRUSURWHLQLQFUHDVLQJLWV
DFWLYLW\DQGELQGLQJZLWK9,3SURGXFLQJLPPXQRVXSSUHVVLRQ7KHVDPHFKDQJHVFDQDIIHFW
WKH VWUXFWXUH RI WKH RUJDQHOOH PHPEUDQH 7KLV UHVXOWV LQ GHIHFWLYH O\VRVRPDO VWDELOLW\ DQG
OHDNDJH RI JO\FRK\GURODVHV DQG *$* GHJUDGLQJ HQ]\PHV LQWR WKH VHUXP 'HIHFWLYH
SHUR[LVRPDO PHPEUDQHV OHDG WR FDWDODVH G\VIXQFWLRQ ZKLFK KDV EHHQ GRFXPHQWHG LQ +,9O
LQIHFWLRQ

$UFKDHDOGLJR[LQDQGPLWRFKRQGULDOG\VIXQFWLRQLQUHODWLRQWR$,'6
7KH DUFKDHDRQ YLWDPLQRF\WH FRQWULEXWHV WR WKH V\QWKHVLV RI XELTXLQRQH DQG
PLWRFKRQGULDO HOHFWURQ WUDQVSRUW FKDLQ IXQFWLRQ 7KH PLWRFKRQGULDO IXQFWLRQ UHODWHG IUHH
UDGLFDO JHQHUDWLRQ LV UHJXODWHG E\ WKH DUFKDHDRQ YLWDPLQRF\WH V\QWKHVL]HG WRFRSKHURO DQG
DVFRUELF DFLG 7KH FRQFHQWUDWLRQ RI XELTXLQRQH GHFUHDVHG VLJQLILFDQWO\ LQ +,9O LQIHFWLRQ
ZKLFK PD\ EH WKH UHVXOW RI ORZ W\URVLQH OHYHOV FRQVHTXHQW WR GLJR[LQ¶V HIIHFW LQ
SUHIHUHQWLDOO\ SURPRWLQJ WU\SWRSKDQ WUDQVSRUW RYHU W\URVLQH 7KH DURPDWLF ULQJ SRUWLRQ RI
XELTXLQRQH LV GHULYHG IURP W\URVLQH 8ELTXLQRQH ZKLFK LV DQ LPSRUWDQW FRPSRQHQW RI WKH
PLWRFKRQGULDO HOHFWURQ WUDQVSRUW FKDLQ LV D PHPEUDQH DQWLR[LGDQW DQG FRQWULEXWHV WR IUHH
UDGLFDOVFDYHQJLQJ7KHLQFUHDVHLQLQWUDFHOOXODUFDOFLXPFDQRSHQWKHPLWRFKRQGULDO37SRUH
FDXVLQJDFROODSVHRIWKHK\GURJHQJUDGLHQWDFURVVWKHLQQHUPHPEUDQHDQGXQFRXSOLQJRIWKH
UHVSLUDWRU\FKDLQ,QWUDFHOOXODUPDJQHVLXPGHILFLHQF\FDQOHDGWRDGHIHFWLQWKHIXQFWLRQRI
$73 V\QWKDVH $OO WKLV OHDGV WR GHIHFWV LQ PLWRFKRQGULDO R[LGDWLYH SKRVSKRU\ODWLRQ
LQFRPSOHWH UHGXFWLRQ RI R[\JHQ DQG JHQHUDWLRQ RI VXSHUR[LGH LRQ ZKLFK SURGXFHV OLSLG
SHUR[LGDWLRQ 8ELTXLQRQH GHILFLHQF\ DOVR OHDGV WR UHGXFHG IUHH UDGLFDO VFDYHQJLQJ 7KH
LQFUHDVH LQ LQWUDFHOOXODU FDOFLXP PD\ OHDG WR LQFUHDVHG JHQHUDWLRQ RI 12 E\ LQGXFLQJ WKH
HQ]\PHQLWULFR[LGHV\QWKDVHZKLFKFRPELQHVZLWKVXSHUR[LGHUDGLFDOWRIRUPSHUR[\QLWULWH
,QFUHDVHG FDOFLXP DOVR FDQ DFWLYDWH SKRVSKROLSDVH $ UHVXOWLQJ LQ LQFUHDVHG JHQHUDWLRQ RI

DUDFKLGRQLFDFLGZKLFKFDQXQGHUJRLQFUHDVHGOLSLGSHUR[LGDWLRQ,QFUHDVHGJHQHUDWLRQRIIUHH
UDGLFDOVOLNHWKHVXSHUR[LGHLRQDQGK\GUR[\OUDGLFDOFDQSURGXFHOLSLGSHUR[LGDWLRQDQGFHOO
PHPEUDQHGDPDJHZKLFKFDQIXUWKHULQDFWLYDWH1D.$73DVHWULJJHULQJWKHF\FOHRIIUHH
UDGLFDO JHQHUDWLRQ RQFH DJDLQ 0DJQHVLXP GHILFLHQF\ FDQ DIIHFW JOXWDWKLRQH V\QWKDVH DQG
JOXWDWKLRQH UHGXFWDVH IXQFWLRQ 7KH PLWRFKRQGULDO VXSHUR[LGH GLVPXWDVH OHDNV RXW DQG
EHFRPHV G\VIXQFWLRQDO ZLWK LQFUHDVHG LQWUDFHOOXODU FDOFLXP UHODWHG RSHQLQJ RI WKH
PLWRFKRQGULDO37SRUHDQGRXWHUPHPEUDQHUXSWXUH7KHSHUR[LVRPDOPHPEUDQHLVGHIHFWLYH
RZLQJ WR PHPEUDQH 1D. $73DVH LQKLELWLRQ UHODWHG GHIHFW LQ PHPEUDQH IRUPDWLRQ DQG
OHDGVWRUHGXFHGFDWDODVHDFWLYLW\7KHUHZDVDQLQFUHDVHLQOLSLGSHUR[LGDWLRQDVHYLGHQFHG
IURPWKHLQFUHDVHLQWKHFRQFHQWUDWLRQRI0'$FRQMXJDWHGGLHQHVK\GURSHUR[LGHVDQG12
ZLWKGHFUHDVHGDQWLR[LGDQWSURWHFWLRQDVLQGLFDWHGE\DGHFUHDVHLQXELTXLQRQHDQGUHGXFHG
JOXWDWKLRQH LQ $,'6 7KH DFWLYLW\ RI HQ]\PHV LQYROYHG LQ IUHH UDGLFDO VFDYHQJLQJ OLNH
VXSHUR[LGHGLVPXWDVHFDWDODVHJOXWDWKLRQHSHUR[LGDVHDQGJOXWDWKLRQHUHGXFWDVHLVGHFUHDVHG
LQ +,9 LQIHFWLRQ VXJJHVWLQJ UHGXFHG IUHH UDGLFDO VFDYHQJLQJ 0LWRFKRQGULDO G\VIXQFWLRQ
UHODWHGIUHHUDGLFDOJHQHUDWLRQKDVEHHQLPSOLFDWHGLQWKHSDWKRJHQHVLVRI+,9LQIHFWLRQDQG
DOVRLQQHXURQDOGHJHQHUDWLRQDQGRQFRJHQHVLVFRPPRQLQWKHV\QGURPH
7KHLQFUHDVHGLQWUDFHOOXODUFDOFLXPDQGFHUDPLGHUHODWHGRSHQLQJRIWKHPLWRFKRQGULDO
37SRUHDOVROHDGVWRYROXPHG\VUHJXODWLRQRIWKHPLWRFKRQGULDFDXVLQJK\SHURVPRODOLW\RI
WKH PDWUL[ DQG H[SDQVLRQ RI WKH PDWUL[ VSDFH 7KH RXWHU PHPEUDQH RI WKH PLWRFKRQGULD
UXSWXUHV DQG UHOHDVHV DSRSWRVLV LQGXFLQJ IDFWRU DQG F\WRFKURPH & LQWR WKH F\WRSODVP 7KLV
UHVXOWVLQDFWLYDWLRQRIFDVSDVHDQGFDVSDVH&DVSDVHFDQSURGXFHDSRSWRVLVRIWKHFHOO
$SRSWRVLV RI WKH &' FHOO KDV EHHQ LPSOLFDWHG LQ +,9O LQIHFWLRQ $SRSWRVLV KDV DOVR EHHQ
LPSOLFDWHG LQ QHXURQDO GHJHQHUDWLRQ RFFXUULQJ LQ $,'6 GHPHQWLD &DVSDVH DFWLYDWLRQ FDQ
FOHDYH3LQYROYHGLQOLQNLQJ'1$GXSOLFDWLRQWRFHOOGLYLVLRQUHVXOWLQJLQDSRO\SORLGFHOO
DQGRQFRJHQHVLVFRPPRQLQWKH+,9OV\QGURPH

$UFKDHDO GLJR[LQ DQG UHJXODWLRQ RI FHOO GLYLVLRQ FHOO SUROLIHUDWLRQ DQG QHRSODVWLF
WUDQVIRUPDWLRQLQUHODWLRQWR$,'65HODWLRQWRLPPXQHDFWLYDWLRQ
7KHDUFKDHDRQIUXFWRVRLGFRQWULEXWHVWRIUXFWRO\VLVDQGLPPXQHDFWLYDWLRQ)UXFWRVH
FDQ FRQWULEXWH WR LQGXFWLRQ RI 1).% DQG LPPXQH DFWLYDWLRQ 7KH DUFKDHDRQ VWHURLGHOOH
V\QWKHVL]HG GLJR[LQ LQGXFHV 1).% SURGXFLQJ LPPXQH DFWLYDWLRQ ,QFUHDVHG LQWUDFHOOXODU
FDOFLXP DFWLYDWHV SKRVSKROLSDVH & EHWD ZKLFK UHVXOWV LQ LQFUHDVHG SURGXFWLRQ RI
GLDF\OJO\FHURO '$* ZLWK UHVXOWDQW DFWLYDWLRQ RI SURWHLQ NLQDVH & 7KH SURWHLQ NLQDVH &

3.& DFWLYDWHV WKH 0$3 NLQDVH FDVFDGH UHVXOWLQJ LQ FHOOXODU SUROLIHUDWLRQ 7KH GHFUHDVHG
LQWUDFHOOXODUPDJQHVLXPFDQSURGXFHG\VIXQFWLRQRIWKH*73DVHDFWLYLW\RIWKHDOSKDVXEXQLW
RI * SURWHLQ 7KLV UHVXOWV LQ UDV RQFRJHQH DFWLYDWLRQ DV PRUH RI WKH UDV LV ERXQG WR *73
UDWKHUWKDQ*'33KRVSKRU\ODWLRQPHFKDQLVPVDUHUHTXLUHGIRUWKHDFWLYDWLRQRIWKHWXPRXU
VXSSUHVVRU JHQH 3 7KH DFWLYDWLRQ RI 3 LV LPSDLUHG RZLQJ WR LQWUDFHOOXODU PDJQHVLXP
GHILFLHQF\ SURGXFLQJ D SKRVSKRU\ODWLRQ GHIHFW 8SUHJXODWLRQ RI LVRSUHQRLG SDWKZD\ FDQ
UHVXOWLQLQFUHDVHGSURGXFWLRQRIIDUQHV\OSKRVSKDWHZKLFKFDQIDUQHV\ODWHWKHUDVRQFRJHQH
SURGXFLQJLWVDFWLYDWLRQ

$UFKDHDDQGVHFUHWHG51$YLURLGV±5HODWLRQWR$,'6
+,9LQIHFWLRQPD\KDYHDQHYROXWLRQDU\EDVLVWRLWVRULJLQ7KHUHWURYLUDOJHQRPHLV
SUREDEO\LQWHJUDWHGLQWRWKHJHQRPHRIPDPPDOVLQFOXGLQJKXPDQVDVYHUWLFDOO\WUDQVPLWWHG
HQGRJHQRXV SURYLUXVHV 7KHVH UHWURYLUDO VHTXHQFHV DUH WUDQVSRVDEOH 7KHVH UHWURYLUDO
WUDQVSRVRQV DUH NHSW VLOHQFHG E\ '1$ PHWK\ODWLRQ ,QFUHDVHG VHFUHWLRQ RI K\SRWKDODPLF
DUFKDHDOGLJR[LQFRQWULEXWHVWRDQLQWUDFHOOXODUPDJQHVLXPGHILFLHQF\ZKLFKOHDGVWRD'1$
PHWK\ODWLRQGHIHFW'1$PHWK\ODWLRQUHTXLUHVDQDEXQGDQWVXSSO\RI6DGHQRV\OPHWKLRQLQH
ZKLFK UHTXLUHV PDJQHVLXP IRU LWV JHQHUDWLRQ ,Q WKH SUHVHQFH RI K\SHUGLJR[LQHPLD '1$
PHWK\ODWLRQ LV GHIHFWLYH DQG WKH UHWURYLUDO +,9 WUDQVSRVRQV DUH DFWLYDWHG DQG H[SUHVVHG
7KLVOHDGVWRWUDQVFULSWLRQRI+,9OSURWHLQVDQGDVVHPEO\RIWKHYLUXV
7KXV WKH LVRSUHQRLG SDWKZD\ DQG HQGRJHQRXV 1D. $73DVH LQKLELWLRQ FDQ SOD\ D
UROH LQ WKH JHQHVLV RI WKH DFTXLUHG LPPXQRGHILFLHQF\ V\QGURPH E\ WKH IROORZLQJ
PHFKDQLVPV
'LJR[LQ DQG VFKL]RLG QHXURWUDQVPLWWHU SDWWHUQ LQGXFHG PHPEUDQH 1D. $73DVH

LQKLELWLRQOHDGLQJWRLPPXQHDFWLYDWLRQYLD1).%PHFKDQLVPDQG+,9OUHSOLFDWLRQ
10'$ H[FLWRWR[LFLW\ GXH WR PHPEUDQH 1D. $73DVH LQKLELWLRQ UHODWHG

K\SRPDJQHVHPLD3UHVHQFHRI10'$DJRQLVWVOLNHTXLQROLQLFDFLGVWU\FKQLQHDQG
VHURWRQLQOHDGLQJWRQHXURQDOGHJHQHUDWLRQDQG$,'6GHPHQWLD
'LJR[LQ LQGXFHG K\SRPDJQHVHPLD DQG HOHYDWHG GROLFKRO UHODWHG SURWHLQ SURFHVVLQJ

GHIHFWV DQG GHIHFWLYH SUHVHQWDWLRQ RI +,9O JO\FRSURWHLQ DQWLJHQ OHDGLQJ WR LPPXQH
HYDVLRQE\WKHYLUXVDQGYLUDOSHUVLVWHQFH
0LWRFKRQGULDOG\VIXQFWLRQGXHWRORZXELTXLQRQHOHYHOVGLJR[LQLQGXFHGDOWHUDWLRQLQ
LQWUDFHOOXODUFDOFLXPPDJQHVLXPUDWLRVDQGLQFUHDVHGFHUDPLGHOHYHOVOHDGLQJRQWRO

&' DSRSWRVLV DQG GHSOHWLRQ QHXURQDO DSRSWRVLV FDXVLQJ GHJHQHUDWLRQ LQ $,'6
GHPHQWLD DQG )UHH UDGLFDO JHQHUDWLRQ OHDGLQJ RQ WR RQFRJHQHVLV DQG QHXURQDO
GHJHQHUDWLRQ
0HPEUDQH1D.$73DVHLQKLELWLRQUHODWHGUDVRQFRJHQHDFWLYDWLRQDQG3LQKLELWLRQ
OHDGLQJRQWRRQFRJHQHVLVLQ+,9V\QGURPH
'1$ PHWK\ODWLRQ GHIHFW GXH WR GLJR[LQ LQGXFHG K\SRPDJQHVHPLD DQG UHWURYLUDO
WUDQVSRVRQH[SUHVVLRQ
7KLV SURYLGHV HYLGHQFH IRU D OLQNDJH EHWZHHQ QHXUDO G\VUHJXODWLRQ DQG WKH YLUDO FHOO
F\FOHLQKXPDQVDQGWKHLPPXQHUHVSRQVHWRWKHYLUXV

5HIHUHQFHV
.XUXS 5. .XUXS 3$ +\SRWKDODPLF 'LJR[LQ &HUHEUDO 'RPLQDQFH DQG %UDLQ
)XQFWLRQLQ+HDOWKDQG'LVHDVHV1HZ<RUN1RYD0HGLFDO%RRNV

&+$37(5
(1'26<0%,27,&3$7+2*(1,&$5&+$($$1'$5&+$($/'(5,9('51$
9,52,'6,1'8&('(92/87,21$5<63(&,(6&+$1*(,1+80$16
,17(5&219(56,212)+2026$3,(16$1'+2021($1'(57+$/,6±
0(7+2')25$5&+$($/6<0%,26,602'8/$7('+80$1(92/87,21
)257+(5$3(87,&385326(
,QWURGXFWLRQ

FKDQJH ZKLFK FDQ EH WHUPHG DV LQGXFHG HYROXWLRQ ,QGXFWLRQ RI VSHFLHV FKDQJH EHWZHHQ
KRPRVDSLHQVDQGKRPRQHDQGHUWKDOLVZDVLQGXFHGE\IHHGLQJDQDWXUDORUJDQLFSURELRWLF
IURP KXPDQ FRORQLF IORUD KRPR VDSLHQV IORUD YHUVXV QHDQGHUWKDOLV IORUD GHSHQGLQJ XSRQ
SKHQRW\SLFFKDUDFWHULVWLFV7KHKRPRVDSLHQIORUDFDQLQGXFHFRQYHUVLRQRIQHDQGHUWKDOLVWR
VDSLHQVSHFLHVDQGWKHQHDQGHUWKDOLVIORUDFDQLQGXFHFRQYHUVLRQRIVDSLHQVWRQHDQGHUWKDOLV
VSHFLHV D QHZ SDOHR KLJK ILEUH KLJK PHGLXP FKDLQ WULJO\FHULGH KLJK OHJXPH SURWHLQ
NHWRJHQLF GLHW YHUVXV D KLJK IDW KLJK SURWHLQ GLHW 7KH KLJK ILEUH KLJK 0&7 KLJK OHJXPH
SURWHLQ NHWRJHQLF GLHW FRQYHUWV WKH QHDQGHUWKDOLV WR VDSLHQ VSHFLHV DQG D ORZ ILEUH KLJK
SURWHLQKLJKIDWGLHWFRQYHUWVWKHVDSLHQVSHFLHVWRQHDQGHUWKDOLVVSHFLHVDQDWXUDORUJDQLF
SURELRWLFIURPGXQJRIWKH,QGLDQFRZ%RVSULPLJHQLXVZKLFKFRQYHUWVWKHQHDQGHUWKDOLVWR
KRPRVDSLHQSKHQRW\SHDQGDQDWXUDODQWLR[LGDQWDQWLELRWLFVGHULYHGIURPFUXGHH[WUDFWV
&XUFXPD ORQJD 0RULQJD SWHU\JRVSHUPD (PEOLFD RIILFLQDOLV =LQJLEHU RIILFLQDOH $OOLXP
VDWLYXP DQG :LWKDQLD VRPQLIHUD IRU PRGXODWLRQ RI HQGRV\PELRWLF DUFKDHDO JURZWK DQG
HQGRJHQRXVGLJR[LQV\QWKHVLVUHVXOWLQJLQSKHQRW\SLFPHWDERORQRPLFDQGJHQRW\SLFFKDQJH
LQKXPDQVSHFLHVIURPKRPRVDSLHQVWRKRPRQHDQGHUWKDOLV7KHFRORQLFDQGHQGRV\PELRWLF
DUFKDHD DQG RWKHU PLFUREHV OLNH FORVWULGLDO FOXVWHUV GHWHUPLQH WKH VSHFLHV UDFH FDVWH
FRPPXQLW\DQGSHUVRQDOLGHQWLW\RIWKHLQGLYLGXDO7KHLGHQWLW\RIWKHLQGLYLGXDOSHUVRQDO
FRPPXQLW\ FDVWH UDFH QDWLRQDOLW\ DQG VSHFLHV LV GHWHUPLQHG E\ WKH FRORQLF DQG
HQGRV\PELRWLF DUFKDHDO DQG FORVWULGLDO FOXVWHUV 3UHGRPLQDQW DUFKDHDO V\PELRVLV SURGXFHV
KRPRQHDQGHUWKDOLVDQGOHVVSURPLQHQWDUFKDHDOV\PELRVLVDQGGRPLQDQWFORVWULGLDOFOXVWHUV
LQWKHJXWSURGXFHVWKHKRPRVDSLHQVSHFLHV(DFKLQGLYLGXDOUDFHQDWLRQDOLW\FDVWHFUHHG
DQG FRPPXQLW\ KDV WKH HQGRV\PELRWLF DQG FRORQLF PLFURELRWD VLJQDWXUH 7KLV FRORQLF DQG
HQGRV\PELRWLF PLFURELRWD VLJQDWXUH LV WUDQVIHUDEOH E\ WKH FKDQJH RI HQGRV\PELRWLF DQG
FRORQLF PLFURELRWD IURP RQH JURXS WR DQRWKHU 7KXV WKH HYROXWLRQ DQG LGHQWLW\ EDVHG RQ
LQGLYLGXDOLW\UDFHQDWLRQDOLW\FDVWHDQGFUHHGFDQEHLQGXFHG
7KH UHVHDUFK ZRUN FDUULHG RXW E\ XV RYHU D SHULRG RI \HDUV VKRZHG WKDW SDWLHQWV RI
WKHVHGLVRUGHUVPHQWLRQHGVKRZ
'HFUHDVH LQ WKH DFWLYLW\ RI D FHOO PHPEUDQH EDVHG HQ]\PH NQRZQ DV VRGLXP
SRWDVVLXP$73DVH$QLQKLELWLRQRIVRGLXPSRWDVVLXP$73DVHSURGXFHVLQFUHDVHLQ
LQWUDFHOOXODUFDOFLXPDQGGHFUHDVHLQLQWUDFHOOXODUPDJQHVLXP

0HPEUDQHVRGLXPSRWDVVLXP$73DVHLQKLELWLRQLVSURGXFHGE\HQGRJHQRXVGLJR[LQ
ZKLFK LV V\QWKHVL]HG IURP FKROHVWHURO E\ DFWLQLGLF DUFKDHD ZKLFK DFWV DV
HQGRV\PELRQWVLQFHOO7KHDUFKDHDV\QWKHVL]HVGLJR[LQIURPFKROHVWHURO
$FWLQLGLF DUFKDHDO JURZWK KDV EHHQ GHWHFWHG LQ PHWDEROLF V\QGURPH ; FRURQDU\
DUWHU\ GLVHDVHV VWURNHV GLDEHWHV PHOOLWXV K\SHUOLSLGHPLD DXWRLPPXQH
QHXURSV\FKLDWULFQHXURGHJHQHUDWLYHFDQFHUDQGLQIHFWLRQV
7KH SDOHR SURELRWLF IURP KXPDQ FRORQLF IORUD DUH DQWLDUFKDHDO DJHQWV 7KH SDOHR
SURELRWLF EORFN WKH DUFKDHDO PHYRODQDWH SDWKZD\ 7KLV GHFUHDVHV GLJR[LQ V\QWKHVLV
IURPFKROHVWHURODQGWUHDWVWKHVHFKURQLFGLVRUGHUV
'HWHFWLRQRIHQGRJHQRXVDFWLQLGLFDUFKDHD
(QGRJHQRXVDFWLQLGLFDUFKDHDKDYHEHHQGHWHFWHGLQPHWDEROLFV\QGURPH;GLDEHWHV
PHOOLWXV&$'VWURNHDXWLVPDXWRLPPXQHQHXURSV\FKLDWULFQHXURGHJHQHUDWLYHFDQFHUDQG
LQIHFWLRQV 7KH DUFKDHD DUH GHWHFWHG E\ VSHFWURSKRWRPHWU\ IRU F\WRFKURPH ) WKH
PHWKDQRJHQLF F\WRFKURPH LQ WKH EORRG 7KH HQGRJHQRXV DFWLQLGLF DUFKDHD V\QWKHVL]HV
FKROHVWHURO E\ WKH PHYDORQDWH SDWKZD\ 7KH FKROHVWHURO LV FDWDEROL]HG WR GLJR[LQ 'LJR[LQ
LQKLELWV PHPEUDQH VRGLXPSRWDVVLXP$73DVH DQG LQFUHDVHV LQWUDFHOOXODU FDOFLXP DQG
GHSOHWHVPDJQHVLXPVWRUHVLQWKHFHOO7KLVOHDGVWRPHWDEROLFV\QGURPH;GLDEHWHVPHOOLWXV
LQIHFWLRQV 7KH V\QWKHVLV RI GLJR[LQ FDQ EH GHPRQVWUDWHG LQ SDWLHQWV E\ DGGLQJ FKROHVWHURO
VXEVWUDWHDQGFHULXPWRSDWLHQW¶VVHUXPDQGFKHFNLQJIRUWKHULVHLQF\WRFKURPH)DFWLYLW\
DQG GLJR[LQ OHYHOV 'LJR[LQ OHYHOV DUH DVVD\HG E\ (OLVD DQG F\WRFKURPH ) E\
VSHFWURSKRWRPHWU\ 7KH WHVW LV DYDLODEOH LQ WKH 0HWDEROLF 'LVRUGHUV &HQWUH 7KH SDWLHQW LQ
ZKRPHQGRJHQRXVDUFKDHDDQGGLJR[LQV\QWKHVLVLVGHPRQVWUDWHGLVJLYHQQXWULWLRQDOGLHWDU\
VXSSOHPHQWV WR PRGXODWH WKH HIIHFWV RI DUFKDHD DQG GLJR[LQ 7KLV KHOSV WR DPHOLRUDWH WKH
FKURQLF GLVHDVHV OLNH PHWDEROLF V\QGURPH ; GLDEHWHV PHOOLWXV &$' VWURNH DXWLVP
DXWRLPPXQH QHXURSV\FKLDWULF QHXURGHJHQHUDWLYH FDQFHU DQG LQIHFWLRQV &\WRFKURPH )
DFWLYLW\LQWKHEORRGGHWHUPLQHVWKHKRPRQHDQGHUWKDOLVVSHFLHVDQGODFNRIF\WRFKURPH)
DFWLYLW\LQWKHEORRGGHWHUPLQHVWKHKRPRVDSLHQVSHFLHV7KHKRPRQHRQHDQGHUWKDOLVKDVDQ
LQFUHDVH SUHGLOHFWLRQ WR PHWDEROLF V\QGURPH ; VWURNHV &$' K\SHUOLSLGHPLD GLDEHWHV
PHOOLWXV DXWRLPPXQH QHXURSV\FKLDWULF QHXURGHJHQHUDWLYH FDQFHU DQG DUH UHWURYLUDO
UHVLVWDQW 7KH KRPR QHDQGHUWKDOLV KDV GLIIHUHQW SHUVRQDOLW\ DQG VRFLDO FKDUDFWHULVWLFV ZLWK
LQFUHDVHGFUHDWLYHJHQGHUHTXDOPDWULDUFKDODVH[XDODQGDOWHUQDWHVH[XDOVSLULWXDOLQWXLWLYH

FKDQJHZKLFKFDQEHWHUPHGDVLQGXFHGHYROXWLRQ
0DLQREMHFWLYHVRIWKHVWXG\
7KH JXW PLFURIORUD UHJXODWHV ERG\ IXQFWLRQV 7KH PLFURIORUD PRGXODWHV WKH LPPXQH
V\VWHPWKHQHXURQDOV\VWHPDQGHQGRFULQHV\VWHP$OWHUDWLRQLQWKHJXWPLFURIORUDDVZHOODV
HQGRV\PELRWLF EDFWHULD KDV EHHQ UHODWHG WR KXPDQ GLVHDVH DQG HYROXWLRQ RI KXPDQ VSHFLHV
,QFUHDVH LQ DUFKDHDO JURZWK KDV EHHQ UHODWHG WR SV\FKLDWULF GLVRUGHUV WXPRXUV DXWRLPPXQH
GLVHDVHPHWDEROLFV\QGURPHDQGGHJHQHUDWLRQV7KHDUFKDHDIRUPVDPDMRUFKXQNRIWKHJXW
PLFURIORUD 7KH DUFKDHD FDQ OHDFK LQWR WKH WLVVXH V\VWHPV IRUPLQJ HQGRV\PELRQWV ZKLFK FDQ
IXQFWLRQ OLNH FHOOXODU RUJDQHOOH DQG FDQ FDWDEROLVH FKROHVWHURO 7KH V\PELRWLF DUFKDHD FDQ
SURGXFH D :DUEXUJ SKHQRW\SH DQG VWHP FHOO WUDQVIRUPDWLRQ 7KLV FDQ OHDG RQWR KXPDQ
GLVHDVHV SV\FKLDWULF GLVRUGHUV WXPRXUV DXWRLPPXQH GLVHDVH PHWDEROLF V\QGURPH DQG
GHJHQHUDWLRQV 7KH RYHUJURZWK RI V\PELRWLF DUFKDHD FDQ OHDG RQWR FKDQJH LQ KXPDQ VSHFLHV
W\SHDQGFUHDWHDVSHFLHVZLWK1HDQGHUWKDOPHWDERORQRPLFV7KLVGLVHDVHSURFHVVOHDGLQJRQWR
SV\FKLDWULF GLVRUGHUV WXPRXUV DXWRLPPXQH GLVHDVH PHWDEROLF V\QGURPH DQG GHJHQHUDWLRQV
FDQEHUHYHUVHGE\DOWHULQJWKHJXWPLFURIORUDDQGSRSXODWLQJLWZLWKQRQDUFKDHDOSKHQRW\SHV
7KLVFDQEHGRQHE\RUDODGPLQLVWUDWLRQRIIHFDOPLFURIORUDIURPKHDOWK\SRSXODWLRQ
6\PELRVLVE\PLFURRUJDQLVPVHVSHFLDOO\DUFKDHDGULYHVWKHHYROXWLRQRIWKHVSHFLHV,Q
VXFK D FDVH V\PELRVLV FDQ EH PRGXODWHG E\ WUDQVIHU RI PLFURIORUD V\PELRQWV DQG HYROXWLRQ
JHQRW\SHWKHSKHQRW\SHWKHVRFLDOFODVVDQGWKHUDFLDOJURXSRIWKHLQGLYLGXDO7KHV\PELRWLF
DUFKDHDFDQKDYHKRUL]RQWDODQGYHUWLFDOWUDQVPLVVLRQ(QGRV\PELRWLFDUFKDHDOJURZWKOHDGVWR
QHDQGHUWKDOLVDWLRQRIWKHVSHFLHV7KHLQKLELWLRQRIWKHHQGRV\PELRWLFDUFKDHDOJURZWKRQWKH
RWKHUKDQGOHDGVWRHYROXWLRQRIWKHKRPRVDSLHQV6\PELRVLVPHGLDWHGHYROXWLRQGHSHQGVRQ

WKHJXWIORUDDQGWKHGLHW7KHFRPELQDWLRQRIWKHKXPDQJHQRPHDQGWKHV\PELRWLFPLFURELDO
JHQRPH LV FDOOHG WKH KRORJHQRPH GULYHV KXPDQ HYROXWLRQ DV ZHOO DV DQLPDO HYROXWLRQ
LQFRUSRUDWLRQRIHQGRJHQRXVUHWURYLUDOVHTXHQFHVZKLFKIXQFWLRQDVMXPSLQJJHQHV7KHKLJK
GLHWDU\ ILEUH LQWDNH UHODWHG LQFUHDVHG JHQRPLF +(59 VHTXHQFHV OHDGV WR D G\QDPLF JHQRPH
LQFUHDVHGV\QDSWLFFRQQHFWLYLW\DQGDGRPLQDQWIURQWDOFRUWH[DVVHHQLQKRPRVDSLHQVSHFLHV
7KHQHDQGHUWKDOLFVSHFLHVFRQVXPHDNHWRJHQLFQRQYHJHWDULDQKLJKIDWKLJKSURWHLQORZILEUH
GLHW7KLVOHDGVWRGHFUHDVHGJHQHUDWLRQRIHQGRJHQRXV+(59VHTXHQFHVDQGUHGXFHGJHQRPLF
IOH[LELOLW\ LQ QHDQGHUWKDOLF VSHFLHV 7KLV SURGXFHV VPDOOHU FHUHEUDO FRUWH[ DQG D GRPLQDQW
FHUHEHOODUFRUWH[LQWKHQHDQGHUWKDOLFEUDLQ7KHKRPRQHDQGHUWKDOLFVSHFLHVE\WKHORZGLHWDU\
ILEUHLQWDNHVWDUYHWKHLUPLFURELDOVHOI7KLVOHDGVWRLQFUHDVHGHQGRV\PELRWLFDQGJXWDUFKDHDO
JURZWK7KHPXFRXVPHPEUDQHOLQLQJWKHJXWEHFRPHVWKLQQHGRXWDVWKHJXWEDFWHULDHDWVXS
WKHPXFRXVOLQLQJRIWKHJXW7KHUHGXFHGJHQHUDWLRQRIJXWEXW\UDWHFRQVHTXHQWWRLQFUHDVHG
DUFKDHDOJURZWKDOVRGDPDJHVWKHJXWEORRGDQGEORRGEUDLQEDUULHU7KLVUHVXOWVLQOHDNDJHRI
HQGRWR[LQVDQGDUFKDHDIURPWKHJXWWRWKHEORRGEUHDFKLQJWKHEDUULHUDQGSURGXFHVDFKURQLF
LPPXQRVWLPXODWRU\ LQIODPPDWRU\ VWDWH ZKLFK IRUPV WKH EDVLV RI DXWRLPPXQH GLVHDVH

DQGDQLPDOHYROXWLRQ
0HWKRGVIRUVSHFLHVFKDQJH&RORQLFIORUDSURELRWLFDGPLQLVWUDWLRQIURPKRPRVDSLHQV
DQGKRPRQHDQGHUWKDOLVLGHQWLILHGE\EORRGF\WRFKURPH)DFWLYLW\
5HVHDUFKZRUNFDUULHGRXWE\XVRYHUDSHULRGRI\HDUVKDVVKRZQSDWLHQWVKDYHWKLV
GLVRUGHUVRUFRQGLWLRQVKRZDVLJQLILFDQWLPSURYHPHQWRQWKHQDWXUDORUJDQLFSDOHRSURELRWLF
ZKHQ HQGRJHQRXV DUFKDHDO JURZWK DQG GLJR[LQ V\QWKHVLV LV GHPRQVWUDWHG LQ WKH SDWLHQWV
3RSXODWLRQV DUH VFUHHQHG IRU HQGRV\PELRWLF DUFKDHDO DFWLYLW\ LQ WKH VHUD E\ DQDO\VLV RI
F\WRFKURPH ) DFWLYLW\ 7KH SRSXODWLRQ WKDW LV QHJDWLYH IRU F\WRFKURPH ) DFWLYLW\ LV
FKRVHQIRUWKHFROOHFWLRQRIWKHVSHFLPHQ7KHEORRGF\WRFKURPH)QHJDWLYHSRSXODWLRQ
ZDVWDNHQDVKRPRVDSLHQSKHQRW\SH7KHSRSXODWLRQZDVIHGRQDSDOHRGLHWRIKLJKGLHWDU\
ILEUHKLJKPHGLXPFKDLQWULJO\FHULGHDQGSXOVHOHJXPHSURWHLQ7KHQRUPDOIHFDOFROOHFWLRQ
ZDVGRQHIURPDKHDOWK\QRUPDOJHQHWLFDOO\UHODWHGLQGLYLGXDOFKRVHQE\WKHSDWLHQWDQGWKH
IURP KHDOWK\ KXPDQV ZDV FROOHFWHG $URXQG J RI WKH RUJDQLF PDWWHU LV XVHG LQ WKH

SUHSDUDWLRQ RI WKH SURGXFW J RI WKH RUJDQLF PDWWHU LV GLOXWHG ZLWK QRUPDO VDOLQH DQG
FHQWULIXJHGDWUSP7KHURXJKPDWWHUIRUPVDGHSRVLWDQGWKHVXSHUQDWDQWLVFROOHFWHG
7KH VXSHUQDWDQW LV SUHVHUYHG E\ DGGLQJ J RI WUHKDORVH ZKLFK FDQ SUHVHUYH WKH SURELRWLF
EDFWHULD7KLVVXSHUQDWDQWZLWKDGGHGWUHKDORVHLVIUHH]HGULHGDQGSDFNHGLQGRXEOHJHODWLQ
FDSVXOHV 7KLV FDSVXOH FDQ EH DGPLQLVWHUHG RUDOO\ 7KH SRSXODWLRQ ZLWK KRPR VDSLHQ
FKDUDFWHULVWLFVZDVJLYHQIHFDOFRORQLFIORUDSUHSDUDWLRQIURPQHDQGHUWKDOLFSKHQRW\SHVLQWKH
PDQQHU GHVFULEHG DERYH 7KH QHDQGHUWKDOLF SKHQRW\SHV ZHUH F\WRFKURPH ) SRVLWLYH LQ
WKHLUEORRG7KXVLQWHUFRQYHUVLRQRIVSHFLHVZDVSRVVLEOHE\DGPLQLVWUDWLRQRISURELRWLFIURP
FRORQLFIORUDRIKRPRVDSLHQVDQGKRPRQHDQGHUWKDOLVLGHQWLILHGE\F\WRFKURPH)DFWLYLW\
LQEORRG

0HWKRGVIRUVSHFLHVFKDQJH+LJKILEUHGLHWYHUVXVORZILEUHGLHW
+LJK DUFKDHDO JURZWK LQGXFHV QHDQGHUWKDOLVDWLRQ RI KXPDQ VSHFLHV 1HDQGHUWKDO
PHWDERORQRPLFV OHDGV WR FKURQLF GLVHDVHV OLNH PHWDEROLF V\QGURPH ; GLDEHWHV PHOOLWXV
LQIHFWLRQV7KHSDWLHQWLQZKRPHQGRJHQRXVDUFKDHDDQGGLJR[LQV\QWKHVLVLVGHPRQVWUDWHGLV
JLYHQ KLJK ILEUH OHJXPH SURWHLQ DQG KLJK PHGLXP FKDLQ WULJO\FHULGH NHWRJHQLF GLHW DORQJ
ZLWK QDWXUDO DQWLELRWLFV &XUFXPD ORQJD 0RULQJD SWHU\JRVSHUPD DQG (PEOLFD RIILFLQDOLV
NHWRJHQLF GLHW WR PRGXODWH WKH HIIHFWV RI DUFKDHD DQG GLJR[LQ 7KLV KHOSV WR FRQYHUW WKH
1HDQGHUWKDO SKHQRW\SH WR KRPR VDSLHQ SKHQRW\SH 5HVHDUFK ZRUN FDUULHG RXW E\ XV RYHU D
SHULRG RI \HDUV KDV VKRZQ QHDQGHUWKDOLVHG VSHFLHV ZLWK FLYLOLVDWLRQDO GLVHDVH DV PHQWLRQHG
DERYH VKRZ D VLJQLILFDQW LPSURYHPHQW RQ WKH IROORZLQJ FRPELQDWLRQ ZKHQ HQGRJHQRXV
DUFKDHDO JURZWK DQG GLJR[LQ V\QWKHVLV LV LQKLELWHG E\ D KLJK ILEUH NHWRJHQLF GLHW GHULYHG
IURP&XUFXPDORQJD(PEOLFDRIILFLQDOLV3RZGHUHG0RULQJDSWHU\JRVSHUPD
:KROH FRFRQXW SRZGHU 3RZGHUHG EODFN JUDP DQG 3RZGHUHG GULHG DVK JRXUG 7KH
LQGLYLGXDOPDWHULDOVZHUHIUR]HQGULHGDQGSRZGHUHGWRJHWPLFURQVL]H7KHQWKH\
ZHUH PL[HG DW D FRQFHQWUDWLRQ RI J RI &XUFXPD ORQJD ± $ J RI (PEOLFD
RIILFLQDOLV ± % J RI ZKROH FRFRQXW SRZGHU ± & J RI GULHG 0RULQJD
SWHU\VSHUPD OHDYHV ± ' J RI SRZGHUHG GULHG EODFN JUDP ± ( DQG J RI
SRZGHUHGGULHGDVKJRXUG±)&RPSRQHQWV$%&'(DQG)ZHUHPL[HGWRIRUPDSDFNHW
RIJ7KH\ZHUHWKHQPL[HGWKRURXJKO\DQGPDGHLQWRJSDFNHW7KH\ZHUHDVVHVVHG
EHIRUHWUHDWPHQWZDVVWDUWHGE\FOLQLFDOH[DPLQDWLRQDQGODELQYHVWLJDWLRQV7KHGXUDWLRQRI
WKHWUHDWPHQWUDQJHGIURPPRQWKVWR\HDUV:HIRXQGWKDWLQWKHFDVHWULHGKLJKILEUH
OHJXPH SURWHLQ DQG KLJK PHGLXP FKDLQ WULJO\FHULGH NHWRJHQLF GLHW DORQJ ZLWK QDWXUDO DQWL

ELRWLFV &XUFXPD ORQJD 0RULQJD SWHU\JRVSHUPD DQG (PEOLFD RIILFLQDOLV VKRZHG VLJQLILFDQW
DERYH IRU WKH SXUSRVH GHVFULEHG WR XVH KDYH EHHQ XVHG EHIRUH 7KH FRQVXPSWLRQ RI D KLJK
ILEUH GLHW UHVXOWHG LQ FRQYHUVLRQ RI WKH KRPR QHDQGHUWKDOLV VSHFLHV WR KRPR VDSLHQ VSHFLHV
7KHKLJKILEUHGLHWUHVXOWVLQUHGXFWLRQRIJXWDUFKDHDOJURZWKDQGGHFUHDVHGHQGRV\PELRWLF
DUFKDHDOJURZWK7KHJXWEXW\UDWHSURGXFWLRQLVLQFUHDVHGDQGWKHJXWEORRGEDUULHUDQGEORRG
EUDLQ EDUULHU LV VWUHQJWKHQHG 7KH KRPR VDSLHQ VSHFLHV ZKHQ IHG D ORZ ILEUH KLJK IDW KLJK
SURWHLQ QRQYHJHWDULDQ GLHW KDV LQFUHDVHG GHQVLW\ RI JXW DUFKDHDO PLFURIORUD DQG
HQGRV\PELRWLF DUFKDHDO JURZWK 7KH JXW EXW\UDWH JHQHUDWLRQ LV UHGXFHG DQG WKH JXW EORRG
EDUULHUDQGEORRGEUDLQEDUULHULVEUHDFKHG7KLVOHDGVWRLQFUHDVHLQHQGRV\PELRWLFDUFKDHD
DQGWKHKRPRVDSLHQVSHFLHVJHWVFRQYHUWHGWRKRPRQHDQGHUWKDOLVVSHFLHV
0HWKRGRILQWHUFRQYHUVLRQRIKXPDQVSHFLHVE\DGPLQLVWHULQJFRORQLFPLFURIORUDIURP
FRZGXQJ
$UFKDHDO V\PELRVLV UHVXOWV LQ QHDQGHUWKDOLVDWLRQ RI KXPDQ VSHFLHV DQG FLYLOLVDWLRQDO
GLVHDVHV OLNH PHWDEROLF V\QGURPH ; ZLWK GLDEHWHV PHOOLWXV DQG YDVFXODU GLVHDVH
$XWRLPPXQH 1HXURSV\FKLDWULF 1HXURGHJHQHUDWLYH &DQFHU ,QIHFWLRQV 7KLV LQYHQWLRQ
UHODWHVWRDIRUPXODWLRQZKLFKZLOODFWDVDQDWXUDORUJDQLFSDOHRSURELRWLFIURPGXQJRIWKH
,QGLDQ FRZ %RV SULPLJHQLXV IRU YDULRXV GLVHDVHV ZKLFK ZLOO LQKLELW DUFKDHDO JURZWK DQG
FRQYHUW KRPR QHDQGHUWKDOLV WR KRPR VDSLHQV 7KLV GLVHDVH SURFHVV OHDGLQJ RQWR SV\FKLDWULF
GLVRUGHUV WXPRXUV DXWRLPPXQH GLVHDVH PHWDEROLF V\QGURPH DQG GHJHQHUDWLRQV FDQ EH
UHYHUVHGE\DOWHULQJWKHJXWPLFURIORUDDQGSRSXODWLQJLWZLWKQRQDUFKDHDOSKHQRW\SHV7KLV
FDQ EH GRQH E\ RUDO RU UHFWDO DGPLQLVWUDWLRQ RI IHFDO PLFURIORUD RI WKH ,QGLDQ FRZ %RV
SULPLJHQLXV 7KH FRZ FKRVHQ IRU WKH SXUSRVH ZDV WKH ,QGLDQ FRZ %RV SULPLJHQLXV 7KH
,QGLDQ FRZ IHG DQ RUJDQLF GLHW RI JUDVV DQG KD\ ZDV FKRVHQ IRU WKH SXUSRVH 7KH
IURP KHDOWK\ WKH ,QGLDQ FRZ %RV SULPLJHQLXV DUH FROOHFWHG $URXQG J RI WKH RUJDQLF
PDWWHULVXVHGLQWKHSUHSDUDWLRQRIWKHSURGXFWJRIWKHRUJDQLFPDWWHULVGLOXWHGZLWK
QRUPDO VDOLQH DQG FHQWULIXJHG DW USP 7KH URXJK PDWWHU IRUPV D GHSRVLW DQG WKH
VXSHUQDWDQWLVFROOHFWHG7KHVXSHUQDWDQWLVSUHVHUYHGE\DGGLQJJRIWUHKDORVHZKLFKFDQ
SUHVHUYH WKH SURELRWLF EDFWHULD 7KLV VXSHUQDWDQW ZLWK DGGHG WUHKDORVH LV IUHH]HGULHG DQG
SDFNHG LQ GRXEOH JHODWLQ FDSVXOHV 7KLV FDSVXOH FDQ EH DGPLQLVWHUHG RUDOO\ RU DV D UHFWDO

HQHPD7KXVIHHGLQJRIWKHFRORQLFPLFURIORUDIURPFRZGXQJUHVXOWHGLQFRQYHUVLRQRIWKH
1HDQGHUWKDOPHWDERORQRPLFVWRKRPRVDSLHQPHWDERORQRPLFV
0HWKRGRILQWHUFRQYHUVLRQRIVSHFLHV$QWLR[LGDQWDQWLELRWLFV
$UFKDHDOV\PELRVLVOHDGVWRQHDQGHUWKDOLVDWLRQRIWKHVSHFLHVZLWKLQFUHDVHGLQFLGHQFH
RI PHWDEROLF V\QGURPH ; GLDEHWHV PHOOLWXV &$' VWURNH DXWLVP DXWRLPPXQH
QHXURSV\FKLDWULFQHXURGHJHQHUDWLYHFDQFHUDQGLQIHFWLRQV7KHSDWLHQWLQZKRPHQGRJHQRXV
DUFKDHDDQGGLJR[LQV\QWKHVLVLVGHPRQVWUDWHGLVJLYHQQDWXUDODQWLR[LGDQWDQWLELRWLFVGHULYHG
IURP FUXGH H[WUDFWV &XUFXPD ORQJD 0RULQJD SWHU\JRVSHUPD (PEOLFD RIILFLQDOLV =LQJLEHU
RIILFLQDOH $OOLXP VDWLYXP DQG :LWKDQLD VRPQLIHUD WR PRGXODWH WKH HIIHFWV RI DUFKDHD DQG
GLJR[LQ7KLVFRQYHUWVWKH1HDQGHUWKDOSKHQRW\SHWRKRPRVDSLHQSKHQRW\SH5HVHDUFKZRUN
FDUULHGRXWE\XVRYHUDSHULRGRI\HDUVKDVVKRZQSDWLHQWVKDYHWKLVGLVRUGHUVRUFRQGLWLRQ
VKRZ D VLJQLILFDQW LPSURYHPHQW RQ WKH IROORZLQJ FRPELQDWLRQ ZKHQ HQGRJHQRXV DUFKDHDO
JURZWKDQGGLJR[LQV\QWKHVLVLVGHPRQVWUDWHGLQWKHSDWLHQWV&XUFXPDORQJD(PEOLFD
RIILFLQDOLV 3RZGHUHG 0RULQJD SWHU\JRVSHUPD 3RZGHUHG =LQJLEHU RIILFLQDOH
3RZGHUHG$OOLXPVDWLYXP3RZGHUHG:LWKDQLDVRPQLIHUDURRWDQGOHDYHV7KHLQGLYLGXDO
PDWHULDOVZHUHIUR]HQGULHGDQGSRZGHUHGWRJHWPLFURQVL]H7KHQWKH\ZHUHPL[HG
DWDFRQFHQWUDWLRQRIJRI&XUFXPDORQJD±$JRI(PEOLFDRIILFLQDOLV±%
JRISRZGHUHG0RULQJDSWHU\JRVSHUPD±&JRISRZGHUHG=LQJLEHURIILFLQDOH±'
JRISRZGHUHG$OOLXPVDWLYXP±(DQGJRISRZGHUHG:LWKDQLDVRPQLIHUDURRW
DQGOHDYHV±)&RPSRQHQWV$%&'(DQG)ZHUHPL[HGWRIRUPDSDFNHWRIJ7KH\
ZHUHWKHQPL[HGWKRURXJKO\DQGPDGHLQWRJSDFNHW7KH\ZHUHDVVHVVHGEHIRUHWUHDWPHQW
ZDV VWDUWHG E\ FOLQLFDO H[DPLQDWLRQ DQG ODE LQYHVWLJDWLRQV 7KH GXUDWLRQ RI WKH WUHDWPHQW
UDQJHG IURP PRQWKV WR \HDUV :H IRXQG WKDW LQ WKH FDVH WULHG QDWXUDO DQWLR[LGDQW
DQWLELRWLFV GHULYHG IURP FUXGH H[WUDFWV &XUFXPD ORQJD 0RULQJD SWHU\JRVSHUPD (PEOLFD
RIILFLQDOLV =LQJLEHU RIILFLQDOH $OOLXP VDWLYXP DQG :LWKDQLD VRPQLIHUD VKRZHG VLJQLILFDQW
DERYHIRUWKHSXUSRVHGHVFULEHGWRXVHKDYHEHHQXVHGEHIRUH

'HWDLOVRIWKHWULDO

VXUUHDOLVWLFDQGFRPPXQLW\FHQWUHGFKDUDFWHULVWLFV1HDQGHUWKDOPHWDERORQRPLFVLVSULPDULO\
PHGLDWHG E\ DUFKDHDO PHWDERORQRPLFV DQG DUFKDHDO V\PELRVLV 7KH\ KDYH JRW FKROHVWHURO
FDWDEROLVP WKH VKLNLPLF DFLG SDWKZD\ PRUH RI DQDHURELF JO\FRO\VLV LQFUHDVH FRQQHFWLYH
WLVVXH V\QWKHVLV IUXFWRO\VLV QXFOHLF DFLG V\QWKHVLV DQG PLWRFKRQGULDO G\VIXQFWLRQ 6HOI
DGPLQLVWUDWLRQRIWKHQDWXUDORUJDQLFSDOHRSURELRWLFIURPKXPDQFRORQLFIORUDDQGFRZGXQJ
DQWLR[LGDQW DQWLELRWLF DQG KLJK ILEUH KLJK 0&7 GLHW WR QHDQGHUWKDOLVHG SKHQRW\SH ZLWK
SDWKRORJLFDO SKHQRW\SHV RI WKH IROORZLQJ GLVRUGHUV 3ULPDU\ JHQHUDOL]HG HSLOHSV\
6FKL]RSKUHQLD 3DUNLQVRQ¶V GLVHDVH 0XOWLSOH VFOHURVLV 5HIUDFWRU\ &16
JOLREODVWRPDV 1HXURQDO DJLQJ DQG GHPHQWLD RI WKH $O]KHLPHU¶V W\SH 'RZQ¶V
V\QGURPH $FTXLUHG LPPXQRGHILFLHQF\ V\QGURPH $XWLVP &$' 6WURNH
'LDEHWHV PHOOLWXV DQG $JLQJ 7KH SDWLHQWV ZHUH DVVHVVHG EHIRUH WUHDWPHQW ZDV
VWDUWHG FOLQLFDOO\ DQG E\ DOO UHTXLUHG ODERUDWRU\ LQYHVWLJDWLRQV 7KH GXUDWLRQ RI WUHDWPHQW
UDQJHG IURP PRQWKV WR \HDUV 7KHLU FRQGLWLRQ ZDV DVVHVVHG GXULQJ WUHDWPHQW DQG DIWHU
WUHDWPHQWFOLQLFDOO\DQGXVLQJDOOQHFHVVDU\ODERUDWRU\LQYHVWLJDWLRQV7KLVSURGXFHGDFKDQJH
LQWKHKRPRQHDQGHUWKDOLVSKHQRW\SHWRKRPRVDSLHQSKHQRW\SH
7KH KRPR VDSLHQ VSHFLHV DUH UHVLVWDQW WR PHWDEROLF V\QGURPH ; VWURNHV &$'
K\SHUOLSLGHPLD GLDEHWHV PHOOLWXV DXWRLPPXQH QHXURSV\FKLDWULF QHXURGHJHQHUDWLYH FDQFHU
DQG DUH UHWURYLUDO VXVFHSWLEOH 7KH KRPR VDSLHQ VSHFLHV LV OHVV FUHDWLYH SDWULDUFKDO JHQGHU
XQHTXDOKHWHURVH[XDOORJLFDODQGLQGLYLGXDOLVWLF+RPRVDSLHQPHWDERORQRPLFVLVSULPDULO\
DHURELF DQG PLWRFKRQGULDO 7KH VSHFLHV FKDQJH LV D JXW PLFURIORUD DQG HQGRV\PELRWLF IORUD
PHGLDWHGFKDQJHZKLFKFDQEHWHUPHGDVLQGXFHGHYROXWLRQ7KHIHHGLQJRIWKHKRPRVDSLHQ
SKHQRW\SHZLWKDORZILEUHKLJKIDWKLJKSURWHLQQRQYHJHWDULDQGLHWUHVXOWHGLQLQFUHDVHGLQ
DUFKDHDO GHQVLW\ LQ WKH JXW PLFURIORUD DQG HQGRV\PELRWLF DUFKDHDO JURZWK LQ WKH EORRG DV
PHDVXUHG E\ F\WRFKURPH ) DFWLYLW\ DQG QHDQGHUWKDOLVDWLRQ RI WKH KRPR VDSLHQ VSHFLHV
7KLV PDNHV WKH KRPR VDSLHQ VSHFLHV QHDQGHUWKDOLVHG ZLWK D GLIIHUHQW SKHQRW\SH JHQRW\SH
SV\FKRORJLFDOW\SHDQGUHWURYLUDOUHVLVWDQW

3DWLHQWSRSXODWLRQLQFOXGHGLQWKHODUJHVFDOHWULDORIQHDQGHUWKDOLVHGSKHQRW\SH
7KHVH DUH W\SLFDO H[DPSOHV RI D ODUJH QXPEHU RI SDWLHQWV WULHG LQ HDFK FDVH 7KH
QXPEHURISDWLHQWVLQFOXGHGLQWKHWULDOLVDVIROORZV7KHQHDQGHUWKDOLVHGSKHQRW\SHVZHUH
IHG D KLJK ILEUH KLJK 0&7 YHJHWDULDQ GLHW FRORQLF PLFURIORUD SURELRWLF IURP EORRG

F\WRFKURPH)QHJDWLYHKRPRVDSLHQSRSXODWLRQFRORQLFPLFURIORUDIURPWKH,QGLDQFRZ
GXQJ %RV SULPLJHQXV DQG DQWLR[LGDQW DQWLELRWLF IRU PRQWKV VKRZHG FRQYHUVLRQ WR KRPR
VDSLHQ SKHQRW\SHV ZLWK ORZ EORRG F\WRFKURPH ) DFWLYLW\ DQG VWDWLVWLFDOO\ VLJQLILFDQW
GLVHDVH UHPLVVLRQ 7KH SV\FKRORJLFDO FKDUDFWHUV FKDQJHG IURP QHDQGHUWKDOLF LQFUHDVHG
VXUUHDOLVWLFDQGFRPPXQLW\FHQWUHGFKDUDFWHULVWLFVWRKRPRVDSLHQOHVVFUHDWLYHSDWULDUFKDO
JHQGHUXQHTXDOKHWHURVH[XDOORJLFDODQGLQGLYLGXDOLVWLF7KHPHWDEROLFSKHQRW\SHFKDQJHG
IURP QHDQGHUWKDOLF FKROHVWHURO FDWDEROLVP WKH VKLNLPLF DFLG SDWKZD\ PRUH RI DQDHURELF
JO\FRO\VLV LQFUHDVH FRQQHFWLYH WLVVXH V\QWKHVLV IUXFWRO\VLV QXFOHLF DFLG V\QWKHVLV DQG
PLWRFKRQGULDOG\VIXQFWLRQSKHQRW\SHWRKRPRVDSLHQPLWRFKRQGULDOSKHQRW\SH
3ULPDU\JHQHUDOL]HGHSLOHSV\±SDWLHQWV
6FKL]RSKUHQLD±SDWLHQWV
3DUNLQVRQ¶VGLVHDVH±SDWLHQWV
0XOWLSOHVFOHURVLV±SDWLHQWV
5HIUDFWRU\&16JOLREODVWRPD±SDWLHQWV
'LDEHWHVPHOOLWXV±SDWLHQWV
1HXURQDODJLQJDQGGHPHQWLDRIWKH$O]KHLPHU¶VW\SH±SDWLHQWV
'RZQ¶VV\QGURPH±SDWLHQWV
$FTXLUHGLPPXQRGHILFLHQF\V\QGURPH±SDWLHQWV
$XWLVP±SDWLHQWV
&$'±SDWLHQWV
6WURNH±SDWLHQWV
/XSXVV\QGURPH±SDWLHQWV
3DWLHQW SRSXODWLRQ LQFOXGHG LQ WKH ODUJHVFDOH WULDO RI KRPR VDSLHQ SKHQRW\SH
LGHQWLILHGE\ORZHURUDEVHQWF\WRFKURPH)DFWLYLW\LQEORRG7KH\ZHUHIHGDORZILEUH
KLJK IDW KLJK SURWHLQ QRQYHJHWDULDQ GLHW IRU PRQWKV 7KLV UHVXOWHG LQ LQFUHDVH LQ
HQGRV\PELRWLF DQG FRORQLF DUFKDHDO GHQVLW\ DQG QHDQGHUWKDOLVDWLRQ RI WKH KRPR VDSLHQ
SKHQRW\SH 7KH KRPR VDSLHQ SKHQRW\SH JLYHQ FRORQLF PLFURIORUD FDSVXOHV IURP QRUPDO
1HDQGHUWKDO SKHQRW\SHV ZLWK KLJK F\WRFKURPH ) DFWLYLW\ DOVR UHVXOWHG LQ
QHDQGHUWKDOLVDWLRQ RI KRPR VDSLHQ SKHQRW\SH 7KH SV\FKRORJLFDO FKDUDFWHULVWLFV FKDQJHG
IURP KRPR VDSLHQ OHVV FUHDWLYH SDWULDUFKDO JHQGHU XQHTXDO KHWHURVH[XDO ORJLFDO DQG
LQGLYLGXDOLVWLF WR QHDQGHUWKDOLF LQFUHDVHG FUHDWLYH JHQGHU HTXDO PDWULDUFKDO DVH[XDO DQG
DOWHUQDWH VH[XDO VSLULWXDO LQWXLWLYH VXUUHDOLVWLF DQG FRPPXQLW\ FHQWUHG FKDUDFWHULVWLFV 7KH

PHWDEROLF SKHQRW\SH FKDQJHG IURP KRPR VDSLHQ PLWRFKRQGULDO SKHQRW\SH WR QHDQGHUWKDOLF
FKROHVWHURO FDWDEROLVP WKH VKLNLPLF DFLG SDWKZD\ PRUH RI DQDHURELF JO\FRO\VLV LQFUHDVH
FRQQHFWLYHWLVVXHV\QWKHVLVIUXFWRO\VLVQXFOHLFDFLGV\QWKHVLVDQGPLWRFKRQGULDOG\VIXQFWLRQ
SKHQRW\SH

6XPPDU\
$ PHWKRG WR LQGXFH HYROXWLRQDU\ FKDQJHV LQ WKH KXPDQ VSHFLHV E\ PRGXODWLQJ
DUFKDHDOV\PELRVLVDQGLQWHUFRQYHUWLQJKRPRVDSLHQWRKRPRQHDQGHUWKDOLVDQGYLFHYHUVDLV
GHVFULEHG7KLVLVGRQHE\DKLJKILEUHYHUVXVDORZILEUHGLHWDGPLQLVWUDWLRQRIDQWLR[LGDQW
DQWLELRWLF DQG FRORQLF PLFURIORUD IURP KXPDQ DQG FRZ GXQJ 7KLV LV D PHWKRGRORJ\ WR
PRGXODWHVSHFLHVLQWHUFRQYHUVLRQIURPKRPRVDSLHQWRKRPRQHDQGHUWKDOLVZLWKLWVDWWHQGDQW
FKDQJHV LQ SV\FKRORJLFDO SKHQRW\SLF DQG PHWDERORQRPLF FKDUDFWHULVWLFV RI WKH SRSXODWLRQ
7KLVFDQEHFDOOHGDVDWKHUDSHXWLFDUFKDHDOV\PELRWLFPRGXODWHGKXPDQHYROXWLRQ

Buy your books fast and straightforward online - at one of world’s
fastest growing online book stores! Environmentally sound due to
Print-on-Demand technologies.
Buy your books online at
www.morebooks.shop
Kaufen Sie Ihre Bücher schnell und unkompliziert online – auf einer
der am schnellsten wachsenden Buchhandelsplattformen weltweit!
Dank Print-On-Demand umwelt- und ressourcenschonend produzi
ert.
Bücher schneller online kaufen
www.morebooks.shop
KS OmniScriptum Publishing
Brivibas gatve 197
LV-1039 Riga, Latvia info@omniscriptum.com
Telefax: +371 686 204 55 www.omniscriptum.com
View publication stats

Kerala Diet and Covid

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Kerala Diet and Covid

Uploaded by

Copyright:

Available Formats

See discussions, stats, and author profiles for this publication at: https://www.researchgate.

Book · July 2020

Project Symbiosis View project

Neurophilosophy and Consciousness View project

The user has requested enhancement of the downloaded file.

     

 ! "   #$ ! 

 .$ / 

7KH DGGLWLRQ RIPHGLXPFKDLQWULJO\FHULGHVWR D SXULILHG ILVK RLOEDVHGGLHWDOWHUV

7KHUROHRI6KRUW&KDLQ)DWW\$FLGV 6&)$V DQG,PPXQH5HJXODWLRQ%XW\UDWHDQG

*DODFWRROLJRVDFFKDULGHV DQG IUXFWRROLJRVDFFKDULGHV KDYH EHHQ VKRZQ WR PRGXODWH

+2 $/$ $/$

*URXSV $XWLVP 3HUFHQWDJH

1DLU FDVHV 

1RQQDLU FDVHV 

1RQQDLU FDVHV  

$XWLVP FDVHV  

+2 $/$ $/$

+2 $/$ $/$

7KH QHRQHDQGHUWKDOLF DUFKDHDRQV KDYH JRW PDJQHWLWH FDSDEOH RI PDJQHWRSHUFHSWLRQ

&RQVFLRXV SHUFHSWLRQ LQYROYHV WKUHH IDFWRUV SHUFHSWXDO V\QFKURQL]DWLRQ IRFXVHG

&RQVFLRXVQHVV GHSHQGV RQ WKUHH SDUDPHWHUV ZRUNLQJ PHPRU\ SHUFHSWXDO

&<7) &<7) 3$+FKDQJH 3$+FKDQJH

'1$FKDQJH '1$FKDQJH 51$FKDQJH 51$FKDQJH

'LJR[LQ QJPO 'LJR[LQ QJPO $/$ $/$

6XFFLQDWH 6XFFLQDWH *O\FLQHFKDQJH

3\UXYDWHFKDQJH 3\UXYDWHFKDQJH *OXWDPDWH *OXWDPDWH

+2 +2 $PPRQLD $PPRQLD

5%&'LJR[LQ &\WRFKURPH) 51$YLURLG +2 XPROPO

12; 2' 71)$/3 $/$ 3%*

8URSRUSK\ULQ &RSURSRUSK\ULQ 3URWRSRUSK\ULQ +HPH

%LOLYHUGLQ $736\QWKDVH 6($73

$&2$ $&+ *OXWDPDWH

7KH SRUSK\ULQV FDQ PRGXODWH FHOO IXQFWLRQV DQG SURGXFH QHXURLPPXQRHQGRFULQH

*URXSV $XWLVP 3HUFHQWDJH

1DLU FDVHV 

1RQ1DLU FDVHV 

*URXSV 6FKL]RSKUHQLD 3HUFHQWDJH

1DLU FDVHV 

1RQ1DLU FDVHV 

1RQ1DLU FDVHV  

$XWLVP FDVHV  

%LOH $FLGV  FKDQJH 0HDQ     

%LOH $FLGV  FKDQJH 0HDQ     

1HRFRUWLFDO G\VIXQFWLRQ FRQWULEXWHV WR GHIHFWLYH YRFDOL]DWLRQ LQ 1HDQGHUWKDOV 7KH\

+2 $/$ $/$

+LJK DUFKDHDO JURZWK LQGXFHV QHDQGHUWKDOLVDWLRQ RI KXPDQ VSHFLHV 1HDQGHUWKDO

7KH QHRQHDQGHUWKDOLF DUFKDHDRQV KDYH JRW PDJQHWLWH FDSDEOH RI PDJQHWRSHUFHSWLRQ

+2 $/$ $/$

(QGRV\PELRWLF DUFKDHD VWHP FHOO WUDQVIRUPDWLRQ QHDQGHUWKDOLVDWLRQ ± D UHVHUYRLU IRU

6XGUD 1RQVXGUD )YDOXH 3YDOXH

&<7) 0HDQ  

51$FKDQJH 0HDQ  

51$FKDQJH 0HDQ  

 0RUJDQ ( 7KH1HDQGHUWKDOWKHRU\ RIDXWLVP $VSHUJHU DQG $'+' 

0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'

1RUPDO        

6\;        

&$'        

&9$        

'&0(0)        

7XPRXU        

6FKL]R        

! " #$ !

.$ /

7KH DGGLWLRQ RIPHGLXPFKDLQWULJO\FHULGHVWR D SXULILHG ILVK RLOEDVHGGLHWDOWHUV

7KHUROHRI6KRUW&KDLQ)DWW\$FLGV6&)$VDQG,PPXQH5HJXODWLRQ%XW\UDWHDQG

*DODFWRROLJRVDFFKDULGHV DQG IUXFWRROLJRVDFFKDULGHV KDYH EHHQ VKRZQ WR PRGXODWH

+2 $/$ $/$

1DLU FDVHV

1RQQDLU FDVHV

1RQQDLU FDVHV

$XWLVP FDVHV

+2 $/$ $/$

+2 $/$ $/$

&RQVFLRXV SHUFHSWLRQ LQYROYHV WKUHH IDFWRUV SHUFHSWXDO V\QFKURQL]DWLRQ IRFXVHG

&RQVFLRXVQHVV GHSHQGV RQ WKUHH SDUDPHWHUV ZRUNLQJ PHPRU\ SHUFHSWXDO

&<7) &<7) 3$+FKDQJH 3$+FKDQJH

'1$FKDQJH '1$FKDQJH 51$FKDQJH 51$FKDQJH

'LJR[LQ QJPO 'LJR[LQ QJPO $/$ $/$

6XFFLQDWH 6XFFLQDWH *O\FLQHFKDQJH

3\UXYDWHFKDQJH 3\UXYDWHFKDQJH OXWDPDWH OXWDPDWH

+2 +2 $PPRQLD $PPRQLD

5%&'LJR[LQ &\WRFKURPH) 51$YLURLG +2XPROPO

12;2' 71)$/3 $/$ 3%*

7KH SRUSK\ULQV FDQ PRGXODWH FHOO IXQFWLRQV DQG SURGXFH QHXURLPPXQRHQGRFULQH

1DLU FDVHV

1RQ1DLU FDVHV

1DLU FDVHV

1RQ1DLU FDVHV

1RQ1DLU FDVHV

$XWLVP FDVHV

%LOH $FLGV FKDQJH 0HDQ

%LOH $FLGV FKDQJH 0HDQ

1HRFRUWLFDO G\VIXQFWLRQ FRQWULEXWHV WR GHIHFWLYH YRFDOL]DWLRQ LQ 1HDQGHUWKDOV 7KH\

+2 $/$ $/$

+LJK DUFKDHDO JURZWK LQGXFHV QHDQGHUWKDOLVDWLRQ RI KXPDQ VSHFLHV 1HDQGHUWKDO

+2 $/$ $/$

(QGRV\PELRWLF DUFKDHD VWHP FHOO WUDQVIRUPDWLRQ QHDQGHUWKDOLVDWLRQ ± D UHVHUYRLU IRU

6XGUD 1RQVXGUD )YDOXH 3YDOXH

&<7) 0HDQ

51$FKDQJH 0HDQ

51$FKDQJH 0HDQ

0RUJDQ ( 7KH1HDQGHUWKDOWKHRU\ RIDXWLVP $VSHUJHU DQG $'+'

0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'

1RUPDO

6\;

&$'

&9$

'&0(0)

7XPRXU

6FKL]R

$XWLVP

$'

3'

06

/XSXV

&5)

,/'

&23'

%$

&LUUKRVLV

,%'

0$2

,%6

(0)

&&3

01*

0XF$1*

'%-'

6SRQG\ORVLV

)YDOXH

SYDOXH

0HDQ 6' 0HDQ 6' 0HDQ 6' 0HDQ 6'

1RUPDO

6\;

&$'

&9$

'&0(0)

7XPRXU

6FKL]R

$XWLVP

$'