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

net/publication/285288685

A Research on Systematic Theology, a Foundation of Faith as a Believer

Book · October 2015

DOI: 10.13140/RG.2.1.4983.9446

CITATIONS READS
0 517

1 author:

Samuel Asumadu Sarkodie

Nord University
128 PUBLICATIONS   3,764 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Solar & Wind Energy View project

Energy Consumption (Econometrics) View project

All content following this page was uploaded by Samuel Asumadu Sarkodie on 01 December 2015.

The user has requested enhancement of the downloaded file.



  




 
 
        
 
 
  
 
   
   

  
   !"#$$

%   &
    '
   (       ' 
   ' '
'
(  &    

       
  

      
 


'
   ' '
 & 
        
'
   
   
  
   & 
 ''
'  
 
     
    
    &   
'  '  $       

 )     & 
   
 

    (  
    *      (  * 

     

       '  
   +
 , 

PY
- .
/012
  '
  
 
'  
 "  -
 

O
C
'S

 

 


R

 
 
O
 3 $   ' 
 '

 -4

 

 



TH
5 6 
 
(
  
,'
 
7 3 
 .
 , - 
8 53('   7  
 
  99  
AU

795$4--

 

 ! 

 

 


 
 

 


PY
O
C
'S
R
O
TH
AU
AU
TH
O
R
'S
C
O
PY

 

 


 
 


 

PY
O
C
'S
R
O
TH
AU

 
! 

 




 

 

 
   

 
   
 

 


 
  

 

 
 




 ! 

 

"



 
# 

 

$  !%
 !

   
& 
$

'  

 
'  

($
 

' 

# %
 %
)   %
*  %
'  
  $


'
 

 

+ 
 


" %
 
 
 

&

'  !

#  




  
$,

 

( 

$



  

 
 
-
 
 
   
. 
 
   

 
 

 
 
  

 
  
 

  

 


 ! 

"-
 
 


 


 


(


PY
  %
 

 



  


  


 


. 



 
 %

 %

 %
 
 %




$ 
O

  
 

 
$



$ -




 
 

 
 -

 






  

C
 

 


 


-
-
'S

/

/
 
$$$   

0 

 

R

1"
1"#23.
" 
 

O








  


4&
)*
5
/
+)

TH

* !6!&
7!8%
779:9
& %
  

) -

2 

; !  
AU

*
 

&





 
 



<

"
-
.= 
/
& %
>&"%
? 


 
/%
 %
:@9A

/- 
B
:@9A
4&
)*
5
/
+)

"
3 
 

"
 

& 
:@9A


'(',&$7,21


7KLV GLVVHUWDWLRQ LV GHGLFDWHG WR WKH /RUG $OPLJKW\ DQG P\ ORYHO\ ZLIH 3KHEH
$VDQWHZDD2ZXVXDQGRXUIDPLOLHV

PY



O
C
'S


R


O
TH


AU




 $&.12:/('*(0(176

*ORU\EHWR*RGIRUWKHJUDFHJLYHQPHWRZULWHWKLVGLVVHUWDWLRQ,VLQFHUHO\WKDQNWKH
$GPLQLVWUDWRUDQGWKHVLVVXSHUYLVRU3DVWRU'DYLG:DUQHUIRUKLVJXLGDQFHDQGVXSSRUW
WRZDUGVWKHZULWHXSRIWKLVGLVVHUWDWLRQ

)XUWKHUPRUHJUDWLWXGHJRHVWRWKH$GPLQLVWUDWLRQRI)DLWKIXO%DSWLVW&ROOHJH&ROOHJH
6WDWLRQLQ7H[DV86$IRUWKHLURXWVWDQGLQJHIIRUWWRZDUGVJURRPLQJ0LQLVWHUVRIWKH
*RVSHOZLWKRXWPDNLQJPRQH\DFRQVWUDLQW

0RUHRYHU,ZRXOGOLNHWRDFNQRZOHGJH&\SUXV)HOORZVKLSRI(YDQJHOLFDO6WXGHQWV
&\)(60LGGOH(DVW7HFKQLFDO8QLYHUVLW\1RUWKHUQ&\SUXV&DPSXV&KDSWHUIRUWKH

PY
YDOXDEOHSODWIRUPJLYHQPHWRVKDUHWKH*RVSHORIRXU/RUGDQG6DYLRXU-HVXV&KULVW

O
*UDWLWXGHJRHVWRP\IULHQGV0U'DQLDO5HXWHUVIURP86$3DVWRU5LNV'XJDQRI
C
6RXWK &\SUXV 3DWULFN 5XIDQJXUD IURP 5ZDQGD &KULVWLDQ %LHQYHQX %XQDQL IURP
'S

5ZDQGD3HWHU$PRDNR%DDILIURP*KDQD*RGZLQ2ZXVX$J\DSRQJIURP*KDQD
(EHQH]HU 0HQVDK IURP *KDQD 6DPXHO .\HUHPDWHQJ IURP *KDQD DOO PHPEHUV RI
R

%LEOH FOXE 0(781&& DQG PHPEHUV RI 7RZHU 3UD\HU JURXS 2OG7DIR .XPDVL
O

*KDQD
TH

/DVWEXWQRWWKHOHDVWJUDWLWXGHJRHVWRP\EHDXWLIXOZLIH3KHEH$VDQWHZDD2ZXVX
AU

0UDQG0UV$VXPDGX6DUNRGLHP\SDUHQWV6WHSKHQ$VXPDGX6DUNRGLHP\EURWKHU
(EHQH]HU6DUNRGLHP\EURWKHU3DWLHQFH$GGDHP\VLVWHUDQGWKHUHVWRIP\VLEOLQJV
IRUWKHLUSUD\HUVVXSSRUWORYHDQGHQFRXUDJHPHQWGXULQJP\UHVHDUFK




 $%675$&7
$5(6($5&+216<67(0$7,&7+(2/2*<$)281'$7,212)
)$,7+$6$%(/,(9(5

6DPXHO$VXPDGX6DUNRGLH

0$7KHRORJ\

6XSHUYLVRU3DVWRU'DYLG:DUQHU

7KHWHUP³6\VWHPDWLF7KHRORJ\´KDVORQJEHHQLQXVHIRUDORQJWLPHWRGHVLJQDWHRQH

PY
RI WKH WKHRORJLFDO GLVFLSOLQHV 2Q WKH ZKROH LW DSSHDUV WR EH VXIILFLHQWO\ H[DFW
GHVLJQDWLRQRIWKLVGLVFLSOLQH<HWLWKDVQRWHVFDSHGFULWLFLVP$JDLQVWWKLVEDFNGURS
O
LWZDVQHFHVVDU\WRFULWLFDOO\DQDO\]H6\VWHPDWLF7KHRORJ\DVDIRXQGDWLRQRIIDLWKIRU
C
DEHOLHYHU
'S

7KHREMHFWLYHVRIWKHGLVVHUWDWLRQLVWRDVFHUWDLQDOOWKDWQDWXUHDQGWKH6FULSWXUHVWHDFK
R

RQV\VWHPDWLFWKHRORJ\E\FRPSDULQJDOOWHDFKLQJVRQHZLWKDQRWKHUDQGWRGHILQHWKHLU
O

PXWXDO OLPLWDWLRQV DQG WR FRPSDUH ZKDW 5HDVRQ DQG 1DWXUH WHDFKHV LQ V\VWHPDWLF
TH

WKHRORJ\ ZLWK WKH UHYHODWLRQV RI *RG

V :RUG YLD WKH 2OG 7HVWDPHQW DQG 1HZ
7HVWDPHQWRIWKH%LEOH
AU

7KHUHODWLRQRI%LEOLFDO7KHRORJ\WR6\VWHPDWLF7KHRORJ\LVEDVHGRQDWUXHYLHZRI
LWVIXQFWLRQ6\VWHPDWLF7KHRORJ\LVQRWIRXQGHGRQWKHGLUHFWDQGSULPDU\UHVXOWVRI
WKHH[HJHWLFDOSURFHVVLWLVIRXQGHGRQWKHILQDODQGFRPSOHWHUHVXOWVRIH[HJHVLVDV
H[KLELWHG LQ %LEOLFDO 7KHRORJ\ 1RW H[HJHVLV LWVHOI WKHQ EXW %LEOLFDO 7KHRORJ\
SURYLGHVWKHPDWHULDOIRU6\VWHPDWLFV

.H\ZRUGVV\VWHPDWLFWKHRORJ\&KULVWLDQIDLWKGLYLQHUHYHODWLRQ+RO\%LEOH+RO\
6SLULW




7$%/(2)&217(176


'(',&$7,21

$&.12:/('*(0(176

$%675$&7

&+$37(521(

,1752'8&7,21

&+$37(57:2

352%/(067$7(0(17

PY
&+$37(57+5((
O
2%-(&7,9(6
C
&+$37(5)285
'S

7+(2/2*<
R

&KDUDFWHULVWLFVRI7KHRORJ\
O

0HWKRGVRI7KHRORJ\
TH

7KH6SHFXODWLYH0HWKRG
AU

7KH0\VWLFDO0HWKRG

7KH,QGXFWLYH0HWKRG

7KH'HGXFWLYH0HWKRG

7KHRORJ\DVD6FLHQFH

6RXUFHVRI7KHRORJ\

1DWXUDO7KHRORJ\

5HYHDOHG%LEOLFDO7KHRORJ\

'RJPDWLF7KHRORJ\



 3UDFWLFDO7KHRORJ\

7KHRORJ\3URSHU

&KULVWLDQ7KHRORJ\DQG7UDGLWLRQV

:KDWLV&KULVWLDQ7KHRORJ\"

&KULVWRORJ\

(FFOHVLRORJ\

(VFKDWRORJ\

6RWHULRORJ\

$QWKURSRORJ\

PY
&XOWXUH
O
:KDWLV&KULVWLDQ7UDGLWLRQ"
C
7UDGLWLRQ
'S

:KDWLV/RFDO7KHRORJ\"
R

3UREOHPVHQFRXQWHUHGZLWKLQ/RFDO7KHRORJ\DQG&KULVWLDQ7UDGLWLRQ
O

&RQVWUXFWLQJ/RFDO7KHRORJLHV
TH

:K\7KHRORJ\"
AU

&+$37(5),9(

6<67(0$7,&7+(2/2*<

%LEOLRORJ\'RFWULQHRIWKH%LEOH

'LYLQH2ULJLQRIWKH%LEOH

'LYLQH5HYHODWLRQRIWKH%LEOH

*HQHUDO5HYHODWLRQ

6SHFLDO5HYHODWLRQ

,QVSLUDWLRQRIWKH%LEOH



 1HFHVVLW\RI,QVSLUDWLRQ

'HILQLWLRQRI,QVSLUDWLRQ

)DOVH9LHZVRI,QVSLUDWLRQ

1DWXUDOLQVSLUDWLRQ

6SLULWXDOLOOXPLQDWLRQ

3DUWLDORUG\QDPLFLQVSLUDWLRQ

&RQFHSWXDOLQVSLUDWLRQ

'LYLQHGLFWDWLRQ

1HRRUWKRGR[RSLQLRQ

PY
%LEOLFDO9LHZRI,QVSLUDWLRQ9HUEDO3OHQDU\
O
&KULVW¶VYLHZRIWKH%LEOH
C
3DXO¶VYLHZRIWKH%LEOH
'S

3HWHU¶VYLHZRIWKH%LEOH
R

([LVWHQFHRI*RG
O

&RVPRORJLFDO$UJXPHQW
TH

7HOHRORJLFDO$UJXPHQW
AU

$QWKURSRORJLFDO$UJXPHQW

0RUDO$UJXPHQW

2QWRORJLFDO$UJXPHQW

$QWL7KHLVWLF7KHRULHV

$WKHLVWLF9LHZ

$JQRVWLF9LHZ

(YROXWLRQ

3RO\WKHLVP



 3DQWKHLVP

'HLVP

$WWULEXWHVRI*RG

$EVROXWH$WWULEXWHV

6SLULWXDOLW\

6HOIH[LVWHQFH

,PPXWDELOLW\

8QLW\

7UXWK

PY
/RYH
O
+ROLQHVV
C
5HODWLYH$WWULEXWHV
'S

(WHUQLW\
R

,PPHQVLW\
O

2PQLSUHVHQFH
TH

2PQLVFLHQFH
AU

2PQLSRWHQFH

7UXWK

0HUF\

*UDFH

-XVWLFH

&+$37(56,;

&21&/86,21

5()(5(1&(6



/LVWRI7DEOHV

7DEOH7\SHVRI'LYLQH5HYHODWLRQ
7DEOH7KH$WWULEXWHVRI*RG9DULHWLHVRI&DWHJRUL]DWLRQ

PY
O
C
'S
R
O
TH
AU






&+$37(521(

,1752'8&7,21


6WXG\WRVKHZWK\VHOIDSSURYHGXQWR*RGDZRUNPDQWKDWQHHGHWKQRWWREHDVKDPHG
ULJKWO\GLYLGLQJWKHZRUGRIWUXWK7LPRWK\.-9

1RWKLQJVRDIIHFWVWKHVSLULWDQGFKDUDFWHURIDSHUVRQDVKLVNQRZOHGJHRI*RGRU
WKHODFNRILW'DYLG&ODUN%HFDXVHWKLVLVWUXHWKHRORJ\EHFRPHVWKHPRVWYLWDODQG
IXQGDPHQWDO RI DOO VWXGLHV ³7R WKLV FRQVLGHUDWLRQ LQGLYLGXDOV PD\ ZHOO EULQJ WKH

PY
OLYHOLHVWLQWHUHVWNHHQHVWDSSUHKHQVLRQDQGORIWLHVWSRZHUVRIWKHPLQG3HRSOHPD\
HQJDJHLQWKHPRVWGLOLJHQWRIVSLULWXDOODERXUVZKLOHFDOOLQJXSRQWKHVRXODQGDOOWKDW
O
LVZLWKLQWKHVRXOWRDWWHQGVHULRXVO\DQGUHYHUHQWO\WRWKHJUHDWDQGVROHPQVXEMHFWV
C
WKDWFRQFHUQ*RG´'DYLG&ODUN7KHVSLULWXDOKHDUWSUD\VZLWKWKH3VDOPLVW
'S

³/RUGRSHQWKRXPLQHH\HVWKDW,PD\EHKROGZRQGURXVWKLQJVRXWRIWK\ODZ´6XFK
R

DSUD\HULVQHHGHGEHFDXVH³1RWKLQJWZLVWVDQGGHIRUPVWKHVRXOPRUHWKDQDORZRU
O

XQZRUWK\FRQFHSWLRQRI*RG´$:7R]HU
TH

:H DUH EURXJKW IDFH WR IDFH ZLWK WKH IDFW WKDW RXU NQRZOHGJHLV ERXQGHG E\ *RG
V
5HYHODWLRQDQGDUHOHGWRDFNQRZOHGJHLWDVLWVVRXUFH:HDUHFRQVHTXHQWO\ZDUQHG
AU

QRWWRRPLWDQ\RIWKHWUXWKDVFHUWDLQHGIURPDQ\VRXUFHQRUGLGWRDGGWRLWDQ\WKLQJ
QRWSURSHUO\HPEUDFHWKHUHLQ$GHSDUWXUHIURPWKLVUXOHZLOOOHDGLQWRLQHYLWDEOHHUURU
7KH KDUPRQ\ DQG FRQVLVWHQF\ ZKLFK ZLOO EH IRXQG LQ DOO *RG
V WHDFKLQJV IURP
ZKDWHYHUVRXUFHZHPD\GUDZWKHPZLOOEHFRPHFRQFOXVLYHSURRIRIWKHGLYLQHRULJLQ
RIUHYHODWLRQ

³7KH/RUGRXU*RGLVEXWRQHRQO\OLYLQJDQGWUXH*RGZKRVHVXEVLVWHQFHLVLQDQGRI
+LPVHOILQILQLWHLQEHLQJDQGSHUIHFWLRQZKRVHHVVHQFHFDQQRWEHFRPSUHKHQGHGE\
DQ\EXW+LPVHOIDPRVWSXUHVSLULWLQYLVLEOHZLWKRXWERG\SDUWVRUSDVVLRQVZKR



RQO\KDWKLPPRUWDOLW\GZHOOLQJLQWKHOLJKWZKLFKQRPDQFDQDSSURDFKXQWRZKRLV
LPPXWDEOH LPPHQVH HWHUQDO LQFRPSUHKHQVLEOH DOPLJKW\ HYHU\ ZD\ LQILQLWH PRVW
ZLVHPRVWKRO\PRVWIUHHPRVWDEVROXWHZRUNLQJDOOWKLQJVDFFRUGLQJWRWKHFRXQVHO
RIKLVRZQLPPXWDEOHDQGPRVWULJKWHRXVZLOOIRUKLVRZQJORU\PRVWORYLQJJUDFLRXV
PHUFLIXO ORQJVXIIHULQJ DEXQGDQW LQ JRRGQHVV DQG WUXWK IRUJLYLQJ LQLTXLW\
WUDQVJUHVVLRQDQGVLQWKHUHZDUGHURIWKHPWKDWGLOLJHQWO\VHHN+LPDQGZLWKDOPRVW
MXVWDQGWHUULEOHLQ+LVMXGJPHQWVKDWLQJDOOVLQDQGZKRZLOOE\QRPHDQVFOHDUWKH
JXLOW\´7KH%DSWLVW&RQIHVVLRQRI)DLWKRI

$QG\HVKDOOVHHNPHDQGILQGPHZKHQ\HVKDOOVHDUFKIRUPHZLWKDOO\RXUKHDUW
-HUHPLDK.-9)URPWKLVWKHSXUVXLWWRNQRZWKH/RUGPXVWEHPDGHDFFRUGLQJ

PY
WRWUXWKZLWKIDLWKLQWKHSURPLVHRI-HVXV&KULVWZKRVDLGDQG\HVKDOONQRZWKHWUXWK
DQGWKHWUXWKVKDOOPDNH\RXIUHH-RKQ.-9$FFRUGLQJWR6WDQIRUG(0
O
HYHU\ WKRXJKWIXO LQGLYLGXDO LV D WKHRORJLDQ WR VRPH H[WHQW IRU OLIH DQG GHVWLQ\ DUH
C
DIIHFWHGE\ZKDWDQLQGLYLGXDOEHOLHYHVDERXW*RGDQG+LVZLOO$FFRUGLQJWR3URYHUEV
'S

.-9$VDPDQWKLQNHWKLQKLVKHDUWVRLVKH´1RWKLQJVRDIIHFWVWKHVSLULWDQG

R

FKDUDFWHU RI D SHUVRQ DV KLV NQRZOHGJH RI *RG RU WKH ODFN RI LW 'DYLG &ODUN
O

%HFDXVHWKLVLVWUXHWKHRORJ\EHFRPHVWKHPRVWYLWDODQGIXQGDPHQWDORIDOOVWXGLHV
TH

³7R WKLV FRQVLGHUDWLRQ LQGLYLGXDOV PD\ ZHOO EULQJ WKH OLYHOLHVW LQWHUHVW NHHQHVW
DSSUHKHQVLRQDQGORIWLHVWSRZHUVRIWKHPLQG3HRSOHPD\HQJDJHLQWKHPRVWGLOLJHQW
AU

RIVSLULWXDOODERUVZKLOHFDOOLQJXSRQWKHVRXODQGDOOWKDWLVZLWKLQWKHVRXOWRDWWHQG
VHULRXVO\DQGUHYHUHQWO\WRWKHJUHDWDQGVROHPQVXEMHFWVWKDWFRQFHUQ*RG´'DYLG
&ODUN
+XPDQVDUHZRQGURXVDQGFRPSOH[EHLQJV7KH\DUHFDSDEOHRIH[HFXWLQJLQWULFDWH
SK\VLFDOIHDWVSHUIRUPLQJDEVWUDFWLQWHOOHFWXDOFDOFXODWLRQVDQGSURGXFLQJLQFUHGLEO\
EHDXWLIXOVLJKWVDQGVRXQGV%H\RQGWKLVKXPDQEHLQJVDUHLQFXUDEO\UHOLJLRXV)RU
ZKHUHYHUZHILQGKXPDQLW\LQZLGHO\GLIIHUHQWFXOWXUHVJHRJUDSKLFDOO\GLVSHUVHGDQG
DWDOOSRLQWVIURPWKHGLPPHVWPRPHQWVRIUHFRUGHGKLVWRU\WRWKHSUHVHQWZHDOVRILQG
UHOLJLRQ



5HOLJLRQLVRQHRIWKRVHWHUPVWKDWZHDOODVVXPHZHXQGHUVWDQGEXWLVQRWHDV\WR
GHILQH'LVDJUHHPHQWVRUDWOHDVWYDULHW\LQGHILQLWLRQVRUGHVFULSWLRQVRIWHQPHDQV
HLWKHUWKDWWKHUHKDVQRWEHHQVXIILFLHQWVWXG\RIUHIOHFWLRQRQDQGGLVFXVVLRQRIWKH
VXEMHFWRUWKDWWKHVXEMHFWPDWWHULVWRRULFKDQGFRPSOH[WREHJDWKHUHGLQWRDVLQJOH
FRPSUHKHQVLYHVWDWHPHQW
&HUWDLQFRPPRQIHDWXUHVDSSHDULQPDQ\GHVFULSWLRQVRIUHOLJLRQ7KHUHLVEHOLHILQ
VRPHWKLQJ KLJKHU WKDQ LQGLYLGXDO KXPDQ SHUVRQV ZKHWKHU D SHUVRQDO JRG RU
VXSHUQDWXUDOEHLQJVDIRUFHZLWKLQQDWXUHDVHWRIYDOXHVRUWKHKXPDQUDFHDVDZKROH
7\SLFDOO\ WKHUH LV D GLVWLQFWLRQ EHWZHHQ VDFUHG DQG VHFXODU RU SURIDQH ZKHWKHU
SHUVRQVREMHFWVSODFHVRUSUDFWLFHV7KHGHJUHHRIIRUFHZLWKZKLFKDUHOLJLRQLVKHOG
YDULHVDPRQJ UHOLJLRQV DQG DPRQJWKHDGKHUHQWVRI D JLYHQ UHOLJLRQ  5HOLJLRQ DOVR

PY
RUGLQDULO\LQYROYHVDZRUOGDQGOLIHYLHZWKDWLVDSHUVSHFWLYHRUJHQHUDOSLFWXUHRI
O
UHDOLW\DVDZKROHDQGDFRQFHSWLRQRIKRZLQGLYLGXDOVDUHWROHUDWHWRWKHZRUOGLQOLJKW
C
RI WKLV SHUVSHFWLYH $ VHW RI SUDFWLFHV RI HLWKHU ULWXDO RU HWKLFDO EHKDYLRXU RU ERWK
DWWDFKHVWRDUHOLJLRQ&HUWDLQDWWLWXGHVRUIHHOLQJVVXFKDVDZHJXLOWDQGDVHQVHRI
'S

P\VWHU\DUHIRXQGLQUHOLJLRQ7KHUHLVVRPHVRUWRIUHODWLRQVKLSRUUHVSRQVHWRWKH
R

KLJKHUREMHFWVXFKDVFRPPLWPHQWZRUVKLSRUSUD\HU)LQDOO\WKHUHDUHRIWHQEXW
O

QRWDOZD\VFHUWDLQVRFLDOGLPHQVLRQV*URXSVDUHIUHTXHQWO\IRUPHGRQWKHEDVLVRID
TH

FRPPRQUHOLJLRXVVWDQFHRUFRPPLWPHQW
$WWHPSWVKDYHEHHQPDGHWRILQGRQHFRPPRQ HVVHQFHLQDOOUHOLJLRQ)RUH[DPSOH
AU

GXULQJPXFKRIWKH0LGGOH$JHVSDUWLFXODUO\LQWKH:HVWUHOLJLRQZDVWKRXJKWRIDV
EHOLHI RU GRJPD 7KHVH EHOLHIV GLVWLQJXLVKHG &KULVWLDQLW\ IURP RWKHU UHOLJLRQV DQG
GLVWLQJXLVKHGYDULRXVEUDQFKHVRI&KULVWLDQLW\IURPRQHDQRWKHU
,WZDVQDWXUDOWKDWGRFWULQDOWHDFKLQJVVKRXOGKDYHEHHQVHHQDVSULPDU\GXULQJWKH
SHULRGIURPWKHEHJLQQLQJRIWKHPLGGOHDJHVWKURXJKWKHHLJKWHHQWKFHQWXU\6LQFH
SKLORVRSK\ ZDV D VWURQJ ZHOOHVWDEOLVKHG GLVFLSOLQH WKH FKDUDFWHU RI UHOLJLRQ DV D


:LOOLDP3$OVWRQ³5HOLJLRQ´LQ(QF\FORSDHGLDRI3KLORVRSK\HG3DXO(GZDUGV1HZ<RUN0DFPLOODQ±
,ELG


5HOLJLRQ6RFLDO$VSHFWVRI´LQ(QF\FORSDHGLD%ULWDQQLFDWKHG0DFURSDHGLD±



ZRUOGYLHZZRXOGQDWXUDOO\EHHPSKDVL]HG$QGVLQFHWKHEHKDYLRXUDOVFLHQFHVZHUH
VWLOOLQWKHLULQIDQFLHVUHODWLYHO\OLWWOHZDVVDLGDERXWUHOLJLRQDVDVRFLDOLQVWLWXWLRQRU
DERXWWKHSV\FKRORJLFDOSKHQRPHQDRIUHOLJLRQ
:LWKWKHVWDUWRIWKHQLQHWHHQWKFHQWXU\KRZHYHUWKHXQGHUVWDQGLQJRIWKHORFXVRI
UHOLJLRQVKLIWHG)ULHGULFK6FKOHLHUPDFKHULQKLV2Q5HOLJLRQ6SHHFKHVWR,WV&XOWXUHG
'HVSLVHUVUHMHFWHGWKHLGHDRIHLWKHUGRJPDRUHWKLFVDVWKHORFXVRIUHOLJLRQ5DWKHU
KHVDLGUHOLJLRQLVDPDWWHURIIHHOLQJHLWKHURIIHHOLQJLQJHQHUDORURIWKHIHHOLQJRI
DEVROXWHGHSHQGHQFH7KLVYLHZKDVEHHQGHYHORSHGE\WKHSKHQRPHQRORJLFDODQDO\VLV
RI WKLQNHUV VXFK DV 5XGROI 2WWR ZKR VSRNH RI WKH QXPLQRXV WKH DZDUHQHVV RI WKH
KRO\ 7KLV ZDV FRQWLQXHG LQ PXFK RI WZHQWLHWKFHQWXU\ UHOLJLRXV WKRXJKW ZLWK LWV
UHDFWLRQDJDLQVWORJLFDOFDWHJRULHVDQG³UDWLRQDOLVP´3RSXODUFRQWHPSRUDU\&KULVWLDQ

PY
ZRUVKLSVKRZVDVWURQJHPSKDVLVRQIHHOLQJ
O
6FKOHLHUPDFKHU¶VIRUPXODWLRQZDVLQODUJH SDUWDUHDFWLRQWRWKHZRUNRI ,PPDQXHO
C
.DQW $OWKRXJK .DQW ZDV D SKLORVRSKHU UDWKHU WKDQ D WKHRORJLDQ KLV WKUHH IDPRXV
FULWLTXHV7KH&ULWLTXHRI3XUH5HDVRQ7KH&ULWLTXHRI3UDFWLFDO5HDVRQ
'S

DQG7KH&ULWLTXHRI-XGJHPHQWKDGDQLPPHQVHLPSDFWRQWKHSKLORVRSK\RI

R

UHOLJLRQ,QWKHILUVWRIWKHVHKHUHIXWHGWKHLGHDWKDWLWLVSRVVLEOHWRKDYHWKHRUHWLFDO
O

NQRZOHGJHRIREMHFWVWKDWWUDQVFHQGVHQVHH[SHULHQFH7KLVRIFRXUVHGLVSRVHGRIWKH
TH

SRVVLELOLW\ RI DQ\ UHDO NQRZOHGJH RI RU FRJQLWLYH EDVLV IRU UHOLJLRQ DV WUDGLWLRQDOO\
XQGHUVWRRG5DWKHU.DQWGHWHUPLQHGWKDWUHOLJLRQLVDQREMHFWRIWKHSUDFWLFDOUHDVRQ
AU

+H GHHPHG WKDW *RG QRUPV DQG LPPRUWDO OLIH DUH QHFHVVDU\ DV SRVWXODWHV ZLWKRXW
ZKLFKPRUDOLW\FDQQRWIXQFWLRQ7KXVUHOLJLRQEHFDPHDPDWWHURIHWKLFV7KLVYLHZ
RIUHOLJLRQZDVDSSOLHGWR&KULVWLDQWKHRORJ\E\$OEUHFKW5LWVFKOZKRVDLGWKDWUHOLJLRQ
LVDPDWWHURIPRUDOMXGJPHQWV¶


)ULHGULFK6FKOHLHUPDFKHU2Q5HOLJLRQ6SHHFKHVWR,WV&XOWXUHG'HVSLVHUV1HZ<RUN+DUSHU 5RZ

5XGROI2WWR7KH,GHDRIWKH+RO\1HZ<RUN2[IRUG8QLYHUVLW\3UHVV

$&0F*LIIHUWLQ3URWHVWDQW7KRXJKWEHIRUH.DQW1HZ<RUN+DUSHU

,PPDQXHO.DQW&ULWLTXHRI3XUH5HDVRQ³7UDQVFHQGHQWDO$QDO\WLF
,PPDQXHO.DQW&ULWLTXHRI3UDFWLFDO5HDVRQ


$OEUHFKW5LWVFKO³7KHRORJ\DQG0HWDSK\VLFV´LQ7KUHH(VVD\VWUDQV3KLOLS+HIQHU3KLODGHOSKLD)RUWUHVV±



+RZWKHQVKDOOZHKDYH DWHQGHQF\WRUHJDUGIDLWK"5HOLJLRQLVUHDOO\DOORIWKRVH
EHOLHIRUGRFWULQHIHHOLQJRUDWWLWXGHVDQGDQDSSURDFKRIOLIHRUPDQQHURIEHKDYLQJ
&KULVWLDQLW\ ILWV DOO WKHVH FULWHULD RI UHOLJLRQ ,W LV D PHDQV RI OLIH D UHDVRQDEO\
EHKDYLRXUDVW\OHRIOLYLQJ$QGLWLVWKLVQRWZLWKLQWKHVHQVHRIMXVWLVRODWHGLQGLYLGXDO
H[SHUWLVHEXWLQJLYLQJELUWKWRVRFLDOJURXSV&KULVWLDQLW\DGGLWLRQDOO\LQYROYHVERXQG
IHHOLQJV OLNH GHSHQGHQFH ORYH DQG IXOILOPHQW $QG &KULVWLDQLW\ PRVW FHUWDLQO\
LQYROYHV D JURXS RI WHDFKLQJV DQ DSSURDFK RI YLHZLQJ UHDOLW\ DQG RQHVHOI DQG D
SHUVSHFWLYHIURPWKDWDOORIH[SHULHQFHPDNHVVHQVH
7REHDZRUWK\PHPEHURIDJURXSQDPHGDIWHUDSDUWLFXODUOHDGHURQHPXVWDGKHUHWR
WKHWHDFKLQJVRIWKDWOHDGHU)RUH[DPSOHD3ODWRQLVWLVRQHZKRLQVRPHVHQVHKROGV
WRWKHFRQFHSWLRQVWDXJKWE\3ODWRD0DU[LVWLVRQHZKRDFFHSWVWKHWHDFKLQJVRI.DUO

PY
0DU[,QVRIDUDVWKHOHDGHUDOVRDGYRFDWHGDZD\RIOLIHLQVHSDUDEOHIURPWKHPHVVDJH
O
KH WDXJKW LW LV HVVHQWLDO WKDW WKH IROORZHU DOVR HPXODWH WKHVH SUDFWLFHV :H XVXDOO\
C
GLVWLQJXLVK KRZHYHU EHWZHHQ LQKHUHQW RU HVVHQWLDO SUDFWLFHV DQG DFFLGHQWDO RU
LQFLGHQWDOSUDFWLFHV7REHD3ODWRQLVWRQHQHHGQRWOLYHLQ$WKHQVDQGVSHDNFODVVLFDO
'S

*UHHN7REHD0DU[LVWRQHQHHGQRWEHD-HZVWXG\LQWKH%ULWLVK0XVHXPRUULGHD
R

ELF\FOH
O

,Q WKH VDPH IDVKLRQ D &KULVWLDQ QHHG QRW ZHDU VDQGDOV KDYH D EHDUG RU OLYH LQ
TH

3DOHVWLQH %XW WKRVH ZKR FODLP WR EH &KULVWLDQV ZLOO EHOLHYH ZKDW -HVXV WDXJKW DQG
SUDFWLFHZKDWKHFRPPDQGHGVXFKDV³/RYH\RXUQHLJKERXUDV\RXUVHOI´
AU

HJ0DWW)RUDFFHSWLQJ-HVXVDV/RUGPHDQVPDNLQJKLPWKHDXWKRULW\E\
ZKLFKZHFRQGXFWRXUOLYHV:KDWWKHQLVLQYROYHGLQEHLQJD&KULVWLDQ"-DPHV2UU
SXWLWZHOO³+HZKRZLWKKLVZKROHKHDUWEHOLHYHVLQ-HVXVDVWKH6RQRI*RGLVWKHUHE\
FRPPLWWHGWRRPXFKHOVHEHVLGHV+HLVFRPPLWWHGWRDYLHZRI*RGWRDYLHZRIPDQ
WRDYLHZRIVLQWRDYLHZRI5HGHPSWLRQWRDYLHZRIWKHSXUSRVHRI*RGLQFUHDWLRQ
DQGKLVWRU\WRDYLHZRIKXPDQGHVWLQ\IRXQGRQO\LQ&KULVWLDQLW\´



-DPHV2UU7KH&KULVWLDQ9LHZRI*RGDQGWKH:RUOG*UDQG5DSLGV(HUGPDQV 



,WVHHPVUHDVRQDEOHWKHQWRVD\WKDWKROGLQJWKHEHOLHIVWKDW-HVXVKHOGDQGWDXJKWLV
SDUWRIZKDWLWPHDQVWREHD&KULVWLDQRUDIROORZHURI&KULVW7KHVWXG\RIWKHVHEHOLHIV
LVWKHSDUWLFXODUFRQFHUQRI&KULVWLDQWKHRORJ\%HOLHILVQRWWKHZKROHRI&KULVWLDQLW\
$QH[SHULHQFHRUVHWRIH[SHULHQFHVLVLQYROYHGLQFOXGLQJORYHKXPLOLW\DGRUDWLRQ
DQGZRUVKLS7KHUHDUHSUDFWLFHVERWKHWKLFDOLQQDWXUHDQGULWXDOLVWLFRUGHYRWLRQDO
&KULVWLDQLW\ HQWDLOV VRFLDO GLPHQVLRQV LQYROYLQJ UHODWLRQVKLSV ERWK ZLWK RWKHU
&KULVWLDQVLQZKDWLVXVXDOO\WHUPHGWKHFKXUFKDQGZLWKQRQ&KULVWLDQVLQWKHZRUOG
DVDZKROH2WKHUGLVFLSOLQHVRILQTXLU\DQGNQRZOHGJHLQYHVWLJDWHWKHVHGLPHQVLRQV
RI &KULVWLDQLW\ %XW WKH FHQWUDO WDVN RI H[DPLQLQJ LQWHUSUHWLQJ DQG RUJDQL]LQJ WKH
WHDFKLQJV RI WKH RQH IURP ZKRP WKLV UHOLJLRQ WDNHV LWV QDPH EHORQJV WR &KULVWLDQ
WKHRORJ\ 7KH DFWXDO OLYLQJRXW DQG SHUVRQDO SUDFWLFH RI UHOLJLRQ LQFOXGLQJ KROGLQJ

PY
GRFWULQDO EHOLHIV RFFXU RQ WKH OHYHO RI SULPDU\ H[SHULHQFH 7KHUH LV DOVR D OHYHO RI
O
UHIOHFWLRQRQZKDWLVRFFXUULQJRQWKHSULPDU\OHYHO7KHGLVFLSOLQHWKDWFRQFHUQVLWVHOI
C
ZLWKGHVFULELQJDQDO\VLQJFULWLFL]LQJDQGRUJDQL]LQJWKHGRFWULQHVLVWKHRORJ\7KXV
WKHRORJ\LVDVHFRQGOHYHODFWLYLW\DVFRQWUDVWHGZLWKUHOLJLRQ,WLVWRUHOLJLRQ ZKDW
'S

SV\FKRORJ\LVWRKXPDQHPRWLRQVZKDWDHVWKHWLFVLVWRZRUNVRIDUWZKDWSROLWLFDO
R

VFLHQFHLVWRSROLWLFDOEHKDYLRXU
O

6RPHRWKHUFRQFHSWLRQVRIWKHRORJ\WKDQWKHRQHSUHVHQWHGKHUHQHHGWREHQRWHG7KH\
TH

VWHP IURP WKH EDVLF YLHZ RI UHOLJLRQ DQG RI GRFWULQH 7R *XVWDYR *XWLpUUH] DQG
OLEHUDWLRQ WKHRORJLDQV UHOLJLRQ LV FOHDUO\ SUDJPDWLF FRQFHUQHG ZLWK DOOHYLDWLQJ WKH
AU

LQMXVWLFHV ZLWKLQ WKH KXPDQ UDFH 7KXV WKH UROH RI GRFWULQH LV WR VSHDN WR WKRVH
LQHTXLWLHV7KHRORJ\WKHQEHFRPHVFULWLFDOUHIOHFWLRQRQSUD[LV
7KHUHDUHDOVRWKRVHZKRWDNHSULPDULO\DVXEMHFWLYHYLHZRIUHOLJLRQ$FFRUGLQJWR
VRPH VXFK DV -RKQ +LFN WKH HVVHQFH RI UHOLJLRQ LV DQ H[SHULHQFH RI WKH RQH JUHDW
UHDOLW\ ZKLFK KH WHUPV WKH ³(WHUQDO 2QH´ 7KLV SODFHV KLP VTXDUHO\ LQ WKH



6WDQOH\-*UHQ]5HQHZLQJWKH&HQWHU(YDQJHOLFDO7KHRORJ\LQD3RVW7KHRORJLFDO(UDQGHG>*UDQG5DSLGV%DNHU@±

*XVWDYR*XWLpUUH]$7KHRORJ\RI/LEHUDWLRQ+LVWRU\3ROLWLFVDQG6DOYDWLRQ0DU\NQROO1<2UELV±


-RKQ+LFN*RG+DV0DQ\1DPHV3KLODGHOSKLD:HVWPLQVWHU



6FKOHLHUPDFKHULDQWUDGLWLRQUHJDUGLQJWKHQDWXUHRIUHOLJLRQ'RFWULQHVWKHQZKHWKHU
RI GLIIHUHQW UHOLJLRQV RU RI YDU\LQJ GHQRPLQDWLRQV ZLWKLQ D JLYHQ UHOLJLRQ DUH WKH
GLIIHULQJLQWHUSUHWDWLRQVYDULRXVJURXSVRISHRSOHSODFHRQWKLVJHQHULFH[SHULHQFHDV
WKH\LQWHUSUHWLWWKURXJKWKHJULGRIWKHLURZQFXOWXUH 
)LQDOO\WKHDSSURDFKXVHGLQWKLVWKHVLVDOVRGLIIHUVIURPWKHDSSURDFKRI*HRUJH/LQG
EHFNDQGSRVWOLEHUDOV5HMHFWLQJERWKWKHLGHDWKDWUHOLJLRQFRQVLVWVSULPDULO\RILWV
GRFWULQDO WHDFKLQJV LQ SURSRVLWLRQDO IRUP DQG WKDW LW LV SULPDULO\ DQ H[SUHVVLRQ RI
HPRWLRQDOH[SHULHQFH KH SURSRVHV WKHFXOWXUDOOLQJXLVWLFYLHZ 7KLV LV WKHLGHDWKDW
UHOLJLRQLVDVHWRIFDWHJRULHVRUWHDFKLQJVWKDWHDFKFXOWXUHFRQVWUXFWVWRLQWHUSUHWOLIH
DQGRQWKHEDVLVRIZKLFKLWVPHPEHUVIXQFWLRQ,WGRHVQRWJURZRXWRIH[SHULHQFHVR
PXFKDVLWVKDSHVLW,WLVDVWRU\WROGE\LWVDGKHUHQWVRQWKHEDVLVRIZKLFKWKH\PDNH

PY
VHQVHRIOLIH'RFWULQHRQWKLVYLHZLVDVHFRQGOHYHODFWLYLW\WKDWVHUYHVDUHJXODWLYH
O
IXQFWLRQ5DWKHUWKDQJLYLQJXVRQWRORJLFDONQRZOHGJHDERXW*RGGRFWULQHVDUHUXOHV
C
JRYHUQLQJWKHFRPPXQLW\PXFKWKHVDPHZD\JUDPPDULVUHODWHGWRDODQJXDJH
2XUFRQWHQWLRQLVWKDWGRFWULQHVGRLQGHHGFRQVLVWRIJHQXLQHNQRZOHGJHDERXW*RG
'S

DQGWKDWUHOLJLRQLQYROYHVWKHZKROHSHUVRQLQWHOOHFWHPRWLRQVDQGZLOO7KLVYLHZRI
R

GRFWULQH DQG WKHRORJ\ KDV WZR PDMRU DGYDQWDJHV QRW SRVVHVVHG E\ DQ\ RI WKH RWKHU
O

YLHZV,WHQDEOHVXVWRDFFRXQWIRUWKHIXOOULFKQHVVDQGFRPSOH[LW\RIKXPDQUHOLJLRQV
TH

)XUWKHU LW ILWV PRUH FORVHO\ WKH DFWXDO XQGHUVWDQGLQJ RI UHOLJLRQ DQG GRFWULQH ZLWK
ZKLFKWKHHDUO\FKXUFKDQGWKHDXWKRUVRI6FULSWXUHZRUNHG$QGWRWKHH[WHQWWKDWD
AU

&KULVWLDQ FRPPXQLW\ WRGD\ UHJDUGV WKH %LEOH DV YDOLG ELQGLQJ DQG LWV SULPDU\
DXWKRULW\WKLVYLHZDOVRILWVWKHDYHUDJH&KULVWLDQ¶VXQGHUVWDQGLQJDQGSUDFWLFHRIWKH
&KULVWLDQ OLIH 7KH RWKHU GLPHQVLRQV RI &KULVWLDQ H[SHULHQFH VXFK DV WKH HWKLFDO
DSSOLFDWLRQ RI &KULVWLDQ WHDFKLQJV DQG WKH ZKROHKHDUWHG SUDLVH RI *RG LQYROYHG LQ



,ELG±

*HRUJH$/LQGEHFN7KH1DWXUHRI'RFWULQH5HOLJLRQDQG7KHRORJ\LQD3RVWOLEHUDO$JH3KLODGHOSKLD:HVWPLQVWHU±


,ELG±



ZRUVKLS DUH LQWLPDWHO\ WLHG WR RXU GRFWULQDO XQGHUVWDQGLQJ %XW WKH\ DUH
FRPSOHPHQWDU\QRWDOWHUQDWLYHVWRLW










PY

 O
C


'S


R


O


TH



AU












 &+$37(57:2

352%/(067$7(0(17

7KHWHUP³6\VWHPDWLF7KHRORJ\´ KDVORQJEHHQLQXVHIRUDORQJWLPHHVSHFLDOO\LQ
$PHULFDWRGHVLJQDWHRQHRIWKHWKHRORJLFDOGLVFLSOLQHV2QWKHZKROHLWDSSHDUVWREH
VXIILFLHQWO\H[DFWGHVLJQDWLRQRIWKLVGLVFLSOLQH<HWLWKDVQRWHVFDSHGFULWLFLVP
7KHPDLQIDXOWVWKDWKDYHEHHQIRXQGZLWKLWDUHVXFFLQFWO\VXPPHGXSE\DUHFHQW
ZULWHULQWKHIROORZLQJFRPSDFWSKUDVHV
$FFRUGLQJ WR :DUILHOG  WKH H[SUHVVLRQ ³V\VWHPDWLF WKHRORJ\´ LV UHDOO\ DQ
LPSHUWLQHQWWDXWRORJ\,WLVDWDXWRORJ\LQVRIDUDVDWKHRORJ\WKDWLVQRWV\VWHPDWLFRU

PY
PHWKRGLFDOZRXOGEHQRWKHRORJ\7KHLGHDRIUDWLRQDOPHWKRGOLHVLQWKHZRUGORJRV
ZKLFKIRUPVSDUWRIWKHWHUPWKHRORJ\$QGLWLVDQLPSHUWLQHQFHLQVRIDUDVLWVXJJHVWV
O
WKDWWKHUHDUHRWKHUWKHRORJLFDOGLVFLSOLQHRUGHSDUWPHQWVRIWKHRORJ\ZKLFKDUHQRW
C
PHWKRGLFDO
'S

,VQRWWKLVKRZHYHUMXVWDVKDGHK\SHUFULWLFDO":KDWLVPHDQWE\FDOOLQJWKLVGLVFLSOLQH
R

³6\VWHPDWLF 7KHRORJ\´ LV QRW WKDW LW GHDOV ZLWK LWV PDWHULDO LQ D V\VWHPDWLF RU
O

PHWKRGLFDOZD\DQGWKHRWKHUGLVFLSOLQHVGRQRWEXWWKDWLWSUHVHQWVLWVPDWHULDOLQWKH
TH

IRUPRIDV\VWHP2WKHUGLVFLSOLQHVPD\XVHDFKURQRORJLFDODKLVWRULFDORUVRPHRWKHU
PHWKRGWKLVGLVFLSOLQHPXVWQHHGVHPSOR\DV\VWHPDWLFWKDWLVWRVD\DSKLORVRSKLFDO
AU

RU VFLHQWLILF PHWKRG ,W PLJKW EH HTXDOO\ ZHOO GHVLJQDWHG WKHUHIRUH ³3KLORVRSKLFDO
7KHRORJ\´RU³6FLHQWLILF7KHRORJ\´%XWZHVKRXOGQRWE\WKHDGRSWLRQRIRQHRIWKHVH
WHUPV HVFDSH WKH DPELJXLWLHV ZKLFK DUH FKDUJHG DJDLQVW WKH WHUP ³6\VWHPDWLF
7KHRORJ\´ 2WKHU WKHRORJLFDO GLVFLSOLQHV PD\ DOVR FODLP WR EH SKLORVRSKLFDO RU
VFLHQWLILF,IH[HJHVLVVKRXOGEHV\VWHPDWLFLWVKRXOGDOVREHVFLHQWLILF,IKLVWRU\VKRXOG
EHPHWKRGLFDOLWVKRXOGDOVREHSKLORVRSKLFDO$QDGGLWLRQDODPELJXLW\ZRXOGDOVREH
EURXJKW WR WKHVH WHUPV IURP WKHLU SRSXODU XVDJH 7KHUH ZRXOG EH GDQJHU WKDW



3URIHVVRU':6LPRQ''³7KH1DWXUHDQG6FRSHRI6\VWHPDWLF7KHRORJ\´LQ%LEOLRWKHFD6DFUDOLS




³3KLORVRSKLFDO7KHRORJ\´VKRXOGEHPLVDSSUHKHQGHGDVWKHRORJ\GRPLQDWHGE\VRPH
SKLORVRSKLFDO V\VWHP 7KHUH ZRXOG EH D VLPLODU GDQJHU WKDW ³6FLHQWLILF 7KHRORJ\´
VKRXOGEHPLVXQGHUVWRRGDVWKHRORJ\UHGXFHGWRDQHPSLULFDOVFLHQFHRUGHSHQGHQW
XSRQDQ³H[SHULPHQWDOPHWKRG´1HYHUWKHOHVVWKHVHWHUPVDOVRZRXOGIDLUO\GHVFULEH
ZKDW ZH PHDQ E\ ³6\VWHPDWLF 7KHRORJ\´ 7KH\ WRR ZRXOG GLVFULPLQDWH LW IURP LWV
VLVWHU GLVFLSOLQHV DV WKH SKLORVRSKLFDO GLVFLSOLQH ZKLFK LQYHVWLJDWHV IURP WKH
SKLORVRSKLFDOVWDQGSRLQWWKHPDWWHUZLWKZKLFKDOOWKHGLVFLSOLQHVGHDO$QGWKH\ZRXOG
NHHSFOHDUO\EHIRUHRXUPLQGVWKHPDLQIDFWLQWKHFDVHQDPHO\WKDW
6\VWHPDWLF7KHRORJ\DVGLVWLQJXLVKHGIURPLWVVLVWHUGLVFLSOLQHVLVDVFLHQFHDQGLVWR
EHFRQFHLYHGDVDVFLHQFHDQGWUHDWHGDVDVFLHQFH
7KH WZR GHVLJQDWLRQV ³3KLORVRSKLFDO 7KHRORJ\´ DQG ³6FLHQWLILF 7KHRORJ\´ DUH

PY
SUDFWLFDOO\V\QRQ\PV%XWWKH\GLIIHULQWKHLUFRQQRWDWLRQDVWKHWHUPV³SKLORVRSK\´
O
DQG³VFLHQFH´GLIIHU7KHGLVWLQFWLRQEHWZHHQWKHVHWHUPVLQDUHIHUHQFHOLNHWKHSUHVHQW
C
ZRXOGVHHPWREHWKDWEHWZHHQWKHZKROHDQGRQHRILWVSDUWV3KLORVRSK\LVWKHVFLHQWLD
VFLHQWLDUXP:KDWDVFLHQFHGRHVIRUDGLYLVLRQRINQRZOHGJHWKDWSKLORVRSK\HVVD\V
'S

WRGRIRUWKHPDVVRINQRZOHGJH
R

$ VFLHQFH UHGXFHV D VHFWLRQ RI RXU NQRZOHGJH WR RUGHU DQG KDUPRQ\ SKLORVRSK\
O

UHGXFHVWKHVFLHQFHVWRRUGHUDQGKDUPRQ\$FFRUGLQJO\WKHUHDUHPDQ\VFLHQFHVEXW
TH

RQHSKLORVRSK\:HWKHUHIRUHVRIDUDJUHHZLWK3URIHVVRU':6LPRQZKRPZH
KDYHTXRWHGDERYHLQRUGHUWRGLVDJUHHZLWKKLPZKHQKHVD\VWKDW³ZKDWDVFLHQFH
AU

SURSHUO\XQGHUVWRRGGRHVIRUDVXEV\VWHPWKDWSKLORVRSK\DLPVWRGRIRUWKHV\VWHP
ZKLFKWKHVXEV\VWHPVFRQVWLWXWH´³,WVIXQFWLRQLVVRWRJUDVSWKHZKROHWKDWHYHU\SDUW
VKDOOILQGLWVSURSHUSODFHWKHUHLQDQGWKHSDUWVWKDWWKH\VKDOOIRUPDQRUGHUO\RUJDQLF
ZKROH´³VRWRFRUUHODWHWKHUHDOVZKLFKZLWKWKHLULQWHUDFWLYLWLHVPDNHXSWKHZRUOG
RUWKHXQLYHUVHWKDWWKHZKROHVKDOOEHVHHQLQLWVKDUPRQ\DQGXQLW\DQGWKDWWRHYHU\
LQGLYLGXDOUHDOVKDOOEHDVVLJQHGWKHSODFHLQZKLFKLWFDQEHVHHQWREHGLVFKDUJLQJLWV




SURSHUIXQFWLRQV´7KLVDVZLOOEHDWRQFHSHUFHLYHGLVWKHIXQFWLRQRIHDFKVFLHQFH
LQ LWV RZQ VSKHUH 7R FDOO ³6\VWHPDWLF 7KHRORJ\´ ³3KLORVRSKLFDO 7KHRORJ\´ RU
³6FLHQWLILF7KHRORJ\´ZRXOGWKHUHIRUHEHDOORQHLQHVVHQWLDOPHDQLQJ
2QO\ ZKHQ ZH FDOO LW ³3KLORVRSKLFDO 7KHRORJ\´ ZH VKRXOG EH FRQFHLYLQJ LW DV D
VFLHQFHDPRQJWKHVFLHQFHVDQGVKRXOGKDYHRXUH\HXSRQLWVSODFHLQWKHXQLYHUVDO
VXPRINQRZOHGJHZKLOHZKHQZHFDOOLW³6FLHQWLILF7KHRORJ\´RXUPLQGVKRXOGEH
RFFXSLHGZLWKLWLQLWVHOIDVLWZHUHLQLVRODWLRQDQGZLWKWKHSURSHUPRGHRIGHDOLQJ
ZLWKLWVPDWHULDO,QHLWKHUFDVHZHDUHDIILUPLQJWKDWLWGHDOVZLWKLWVPDWHULDODVDQ
RUJDQL]DEOHV\VWHPRINQRZOHGJHWKDWLWGHDOVZLWKLWIURPWKHSKLORVRSKLFDOSRLQWRI
YLHZWKDWLWLVLQRWKHUZRUGVLQLWVHVVHQWLDOQDWXUHDVFLHQFH
,WLVSRVVLEOHWKDWWKHLPSOLFDWLRQVRIWKLVGHWHUPLQDWLRQDUHQRWDOZD\VIXOO\UHDOL]HG

PY
:KHQZHKDYH PDGHWKHVLPSOH DVVHUWLRQRI ³6\VWHPDWLF7KHRORJ\´WKDWLWLVLQLWV
O
HVVHQWLDOQDWXUHDVFLHQFHZHKDYHDOUHDG\GHWHUPLQHGPRVWRIWKHYH[LQJTXHVWLRQV
C
ZKLFKDULVHFRQFHUQLQJLWLQDIRUPDOSRLQWRIYLHZ,QWKLVVLQJOHSUHGLFDWHLVLPSOLFLWO\
LQFOXGHGDVHULHVRIDIILUPDWLRQVZKLFKZKHQWDNHQWRJHWKHUZLOOJLYHXVDUDWKHUFOHDU
'S

FRQFHSWLRQQRWRQO\RIZKDW6\VWHPDWLF7KHRORJ\LVEXWDOVRRIZKDWLWGHDOVZLWK
R

ZKHQFHLWREWDLQVLWVPDWHULDODQGIRUZKDWSXUSRVHLWH[LVWV$JDLQVWWKLVEDFNGURSLW
O

LVQHFHVVDU\WRFULWLFDOO\DQDO\]H6\VWHPDWLF7KHRORJ\DVDIRXQGDWLRQRIIDLWKIRUD
TH

EHOLHYHU

AU









/RF&LWS




 &+$37(57+5((

2%-(&7,9(6


 7R DVFHUWDLQ DOO WKDW QDWXUH DQG WKH 6FULSWXUHV WHDFK RQ V\VWHPDWLF WKHRORJ\ E\
FRPSDULQJDOOWHDFKLQJVRQHZLWKDQRWKHUDQGWRGHILQHWKHLUPXWXDOOLPLWDWLRQV
 7R FRPSDUH ZKDW 5HDVRQ DQG 1DWXUH WHDFKHV LQ V\VWHPDWLF WKHRORJ\ ZLWK WKH
UHYHODWLRQVRI*RG
V:RUGYLDWKH2OG7HVWDPHQWDQG1HZ7HVWDPHQWRIWKH%LEOH

PY

O
C

'S


R


O
TH


AU





 &+$37(5)285

7+(2/2*<

%RLFH-3GHILQHV7KHRORJ\DVDGLVFRXUVHFRQFHUQLQJ*RGEXWLQDQDORJ\

ZLWKRWKHUZRUGVDJHRORJ\FKURQRORJ\DQGELRORJ\LWPHDQVWKHVFLHQFHZKLFKWUHDWV
RI*RG,WQDWXUDOO\FRQFHUQVLWVHOIZLWKVXFKTXHVWLRQVDVWKHVH,VWKHUHD*RGFDQKH
EHNQRZQZKDWLVKLVQDWXUHDQGFKDUDFWHUZKDWDUHWKHUHODWLRQVKHVXVWDLQVWRWKH
XQLYHUVHSDUWLFXODUO\WRLQWHOOLJHQWEHLQJVSRVVHVVHGRIVSLULWXDOQDWXUHVDQGDERYHDOO
DV PRVW LPSRUWDQW WR XV WR PHQ LQ ZKDW ZD\V KDV KH PDGH KLPVHOI NQRZQ DQG
HVSHFLDOO\LQZKDWDVSHFWGRHVKHUHYHDOKLPVHOIWRWKHPDVVLQQHU7KLVLV7KHRORJ\
SURSHU

PY
,QFRQQHFWLRQZLWKWKLVODVWUHODWLRQLWWUHDWVSDUWLFXODUO\RIPDQDVDFUHDWXUHRI*RG
O
SODFHGXQGHUWKHJRYHUQPHQWRIKLVPRUDOODZ,WHQTXLUHVLQWRKLVRULJLQDOFRQGLWLRQ
C
RILQQRFHQFHDQGKDSSLQHVVWKHPDQQHULQZKLFKKHIHOOWKHUHIURPDQGKLVSUHVHQW
'S

VWDWH RI VLQIXOQHVV DQG FRQGHPQDWLRQ DQG LQDELOLW\ IRU VHOIUHVFXH 7KLV LV
R

$QWKURSRORJ\
O

,WLVWKXVOHGDOVRWRGLVFXVVWKHQDWXUHRIWKHVDOYDWLRQZKLFK*RGKDVSURYLGHGDV
TH

VHHQLQWKHSHUVRQDQGFKDUDFWHURI-HVXV&KULVWWKURXJKZKRPLWKDVFRPHDQGLQWKH
ZRUNVRIDFWLYHDQGSDVVLYHREHGLHQFHE\ZKLFKKHKDVZURXJKWRXWUHFRQFLOLDWLRQWR
AU

*RG7KLVLV6RWHULRORJ\

,QOLNHPDQQHUDOVRGRHVLWFRQVLGHUWKHQDWXUHDQGZRUNRIWKH+RO\6SLULWWKURXJK
ZKRP PDQ LV OHG WR DFFHSW WKH SURYLVLRQV RI *RG
V JUDFH DQG WR DWWDLQ WKURXJK
SHQLWHQFH DQG IDLWK XQWR D VDOYDWLRQ LQ &KULVW ZKLFK FRQVLVWV LQ IUHHGRP QRW IURP
FRQGHPQDWLRQ RQO\ EXW DOVR IURP WKH GRPLQLRQ DQG GHILOHPHQW RI VLQ DQG LQ
DWWDLQPHQWRIWKHKROLQHVVDQGKDSSLQHVVRIFKLOGUHQRIWKH+HDYHQO\)DWKHU7KLVLV
3QHXPDWRORJ\




,WIROORZVPDQDOVREH\RQGWKHGHDWKRIWKHERG\DQGPDNHVNQRZQWKHIXWXUHVWDWHRI
ERWKWKHULJKWHRXVDQGWKHZLFNHGDVZHEHIRUHDVDIWHUWKHUHVXUUHFWLRQRIWKHERG\
WRJHWKHUZLWKWKHILQDOMXGJPHQWRIERWKWKHVHFODVVHVDQGWKHKHDYHQDQGKHOOZKLFK
VKDOOEHWKHLUUHVSHFWLYHDERGHVIRUHYHU7KLVLV(VFKDWRORJ\

)LQDOO\LWWHDFKHVWKHJUHDWHQGZKLFK*RGLVDFFRPSOLVKLQJWKURXJKDOOKLVZRUNVLQ
WKHPDQLIHVWDWLRQWRDOOKLVFUHDWXUHVRIKLVRZQJORU\DVVHHQLQLWVWZRIROGDVSHFWRI
PHUF\DQGMXVWLFHLQKLVGHDOLQJVZLWKWKLVIDOOHQUDFHRIPDQ7KLVLV7HOHRORJ\

&KDUDFWHULVWLFVRI7KHRORJ\

$FFRUGLQJWR2JGHQ607KHRORJ\LQWKHVHQVHH[SOLFLWO\FRQYH\HGE\WKH

PY
ZRUGV ³&KULVWLDQ WKHRORJ\ LV WKH IXOO\ UHIOHFWLYH XQGHUVWDQGLQJ RI WKH &KULVWLDQ
ZLWQHVVRIIDLWKDVGHFLVLYHIRUKXPDQH[LVWHQFH
O
C
2QH RI WKH GHILQLQJ FKDUDFWHULVWLFV RI WKHRORJ\ ZKLFK LW VKDUHV ZLWK SKLORVRSK\ LQ
FRQWUDVW WR WKH VSHFLDO VFLHQFHV LV WKDW LW QHFHVVDULO\ LQFOXGHV UHIOHFWLRQ RQ LWV RZQ
'S

FRQGLWLRQV RI SRVVLELOLW\ DV D IRUP RI XQGHUVWDQGLQJ 7KXV WKH TXHVWLRQ RI ZKDW
R

WKHRORJ\LVLWVHOIDWKHRORJLFDOTXHVWLRQZKRVHDQVZHULVVXEMHFWWRWKHVDPHFULWHULD
O

RIDGHTXDF\DVDQ\RWKHUWKHRORJLFDOVWDWHPHQW)RUUHDVRQVWKDWZLOOSUHVHQWO\EHFRPH
TH

FOHDU WKH WKHRORJLFDO XQGHUVWDQGLQJ RI WKHRORJ\ SHFXOLDUO\ FRLQFLGHV ZLWK WKH
SKLORVRSKLFDO ZLWK WKH UHVXOW WKDW LW LV DSSOLFDEOH LQ SULQFLSOH QRW RQO\ WR &KULVWLDQ
AU

WKHRORJ\EXWDOVRWRWKHWKHRORJLFDOUHIOHFWLRQFRJQDWHZLWKDQ\RWKHUZLWQHVVRIIDLWK
RUUHOLJLRQ0RVOHPWKHRORJ\IRUH[DPSOHPD\EHXQGHUVWRRGPXWDWLVPXWDQGLVDV
WKHIXOO\UHIOHFWLYHXQGHUVWDQGLQJRI,VODPDVVLPLODUO\GHFLVLYHIRUKXPDQH[LVWHQFH

7KHZRUGWKHRORJ\LVGHULYHGIURPWZR*UHHNZRUGV7KHRV*RGDQGORJRVGLVFRXUVH
7KHRORJ\3URSHULVWKHVWXG\RIWKHNQRZOHGJHRI*RGDQG+LVUHODWLRQWRPDQNLQG
7KHVWXGHQWRI*RG¶V:RUGWKH%LEOHKDVWKHSULYLOHJHRIFRQVWUXFWLQJDQGSUHVHQWLQJ
DFRPSUHKHQVLYHDQGFRQVLVWHQWV\VWHPRIWKRXJKWFRQFHUQLQJWKH*RGRIWKHXQLYHUVH
ZKRKDVUHYHDOHG+LPVHOILQYDULRXVZD\VWR+LVFUHDWLRQ7KHTXHVWWRNQRZWKH/RUG



-HUHPLDKPXVWEHPDGHDFFRUGLQJWRWUXWKZLWKIDLWKLQWKHSURPLVHRI-HVXV
ZKRVDLG³<HVKDOONQRZWKHWUXWKDQGWKHWUXWKVKDOOVHW\RXIUHH´-RKQ.-9

%XWWKLVSULPDU\VHQVHRIWKHRORJ\LVQRWLWVRQO\VHQVH,WPD\DOVRPHDQDQLQWHJUDO
SDUWRISKLORVRSK\
VFHQWUDOWDVNDVPHWDSK\VLFVLQZKLFKFDVHLWVPHDQLQJLVH[SOLFDWHG
E\ WKH SKUDVH SKLORVRSKLFDO WKHRORJ\ RU OHVV KDSSLO\ QDWXUDO WKHRORJ\ 7KLV
VHFRQGDU\VHQVHLVLPSRUWDQWEHFDXVHUHIOHFWLRQGLVFORVHVWKDWSKLORVRSKLFDOWKHRORJ\
LVQHFHVVDULO\SUHVXSSRVHGRULPSOLHGE\&KULVWLDQWKHRORJ\DVZHOODVQDWXUDOO\E\
WKHWKHRORJ\DSSURSULDWHWRHYHU\RWKHUUHOLJLRXVWUDGLWLRQ
2JGHQ

$VIRUWKHSKUDVHIXOO\UHIOHFWLYHXQGHUVWDQGLQJ³LWLVLQWHQGHGWRGHVFULEHIRUPDOO\
WKHPRGHRUOHYHORIXQGHUVWDQGLQJWKDWLVSURSHUO\WKHRORJLFDO6LQFHDOOXQGHUVWDQGLQJ

PY
DSSHDUVWRLQYROYHVRPHGHJUHHRIUHIOHFWLRQUHIOHFWLYHXQGHUVWDQGLQJ³E\LWVHOIPD\
O
XQGHUVWDQGDEO\EHFRQVLGHUHGDSOHRQDVP<HWVLQFHUHIOHFWLYHQHVVFOHDUO\VHHPVWREH
C
DPDWWHURIGHJUHHDGGLWLRQRIWKH DGYHUE³IXOO\UHVXOWVLQDVLJQLILFDQWH[SUHVVLRQ
ZKLFK PDNHV H[SOLFLW ZKDW LV DOVR LQWHQGHG E\ WKH XQTXDOLILHG SKUDVHQDPHO\ WKDW
'S

UHIOHFWLRQLVRUVKRXOGEHSUHVHQWWRWKHKLJKHVWGHJUHHLQWKHRORJLFDOXQGHUVWDQGLQJ
R

,PSOLHGWKHUHE\RIFRXUVHLVWKDWWKHRORJ\RXJKWWRH[KLELWDWOHDVWVRPHRIWKHIRUPDO
O

PDUNV RI DQ\ VFLHQFH LQFOXGLQJ WKH PHWKRGLFDO SXUVXLW RI LWV TXHVWLRQV DQG WKH
TH

IRUPXODWLRQRILWVDQVZHUVLQDSUHFLVHFRQFHSWXDOLW\
AU

7KH DPELJXLW\ RI WKH JHQLWLYH SKUDVH WKH IXOO\ UHIOHFWLYH XQGHUVWDQGLQJ RI WKH
&KULVWLDQZLWQHVVRIIDLWKLVV\VWHPDWLFDQGVLJQLILFDQW6LQFH:LOKHOP'LOWKH\LWKDV
EHHQUHFRJQL]HGWKDWLQWKHVFLHQFHVRIPDQ*HLVWHVZLVVHQVFKDIWHQWRZKLFKWKHRORJ\
FOHDUO\LVPRVWFORVHO\UHODWHGWKHUHODWLRQRIWKHLQTXLUHUWRWKHREMHFWRIKLVLQTXLU\
FDQQRWEHPHUHO\WKDWRIVXEMHFWWRREMHFW%HFDXVHWKHREMHFWRIDQ\VXFKVFLHQFHV
LWVHOI D PHDQLQJIXO KXPDQ DFWLYLW\ DQG WKXV LV RU LQYROYHV VRPH PRGH RI


'LOWKH\:LOKHOP,QWURGXFWLRQWRWKHKXPDQVFLHQFHV$QDWWHPSWWROD\DIRXQGDWLRQIRUWKHVWXG\RIVRFLHW\DQGKLVWRU\:D\QH

6WDWH8QLYHUVLW\3UHVV




XQGHUVWDQGLQJ WKH RQO\ FULWHULD RI LGHQWLW\ ILQDOO\ DSSURSULDWH IRU VSHFLI\LQJ LWV
UHJXODULWLHVDUHWKRVHWKDWLWLWVHOI SURYLGHV&RQVHTXHQWO\WKHUHFDQEHQRDGHTXDWH
XQGHUVWDQGLQJRIVXFKDQDFWLYLW\DV DQREMHFW ZKLFKLVQRWDOVRLQGLUHFWO\LWVIXOOHU
XQGHUVWDQGLQJRILWVHOIDVDVXEMHFW,WPD\EHDUJXHGWKDWWKHVDPHLVWUXHDIRUWLRULLQ
WKHFDVHRIWKHRORJ\VLQFHUDWKHUOLNHSKLORVRSK\LWVREMHFWLVQRWWKLVKXPDQDFWLYLW\
RUWKDWEXWWKHDOOLQFOXVLYHDFWLYLW\RIZLWQHVVDQGWKXVKXPDQH[LVWHQFHDVVXFK,Q
RWKHU ZRUGV WKH &KULVWLDQ ZLWQHVV RI IDLWK FDQ EHFRPH WKH REMHFW RI WKHRORJLFDO
XQGHUVWDQGLQJRQO\LQVRIDUDVLWLQGLUHFWO\EHFRPHVWKHVXEMHFWRIVXFKXQGHUVWDQGLQJ
DV ZHOO 7R WKLV H[WHQW WKHUH LV D VRXQG EDVLV IRU WKH WUDGLWLRQDO IRUPXOD LQ ZKLFK
WKHRORJ\LVVXFFLQFWO\GHILQHGDVILGHVTXDHUHQVLQWHOOHFWXP

PY
,WVKRXOGDOVREHQRWHGWKDWVLQFHWKH&KULVWLDQZLWQHVVRIIDLWKFDQPHDQQRWKLQJ
RWKHUWKDQWKHEHOLHYLQJUHSUHVHQWDWLRQRIWKHZLWQHVVRIIDLWKRI-HVXVRI1D]DUHWK
O
WKHRORJ\DVKHUHGHILQHGLVLQHIIHFWWKHIXOO\UHIOHFWLYHXQGHUVWDQGLQJRI-HVXVDVWKH
C
&KULVW 7KHUH FDQ EH QR TXHVWLRQ WKDW WKH DIILUPDWLRQ ³-HVXV LV WKH &KULVW ³LV WKH
'S

FRQVWLWXWLYHDIILUPDWLRQRIWKH&KULVWLDQZLWQHVVDQGWKHUHIRUHWKHLQWHJUDOREMHFWRI
R

WKHRORJLFDOUHIOHFWLRQDVZHOO<HWWKHWDVNRIWKHRORJ\DVVXFKLVQRWVLPSO\WRPDNH
O

WKLV DIILUPDWLRQ EXW DOVR WR XQGHUVWDQG LW DQG WKLV FRQVLGHUDWLRQ LV LPSRUWDQW IRU D
TH

SURSHUO\WKHRORJLFDOGHILQLWLRQRIWKHRORJ\LWVHOI$VVXFKWKHRORJ\SUHVXSSRVHVDVD
FRQGLWLRQRILWVSRVVLELOLW\WKHFRUUHODWLRQRIWKH&KULVWLDQZLWQHVVRIIDLWKDQGKXPDQ
AU

H[LVWHQFHERWKSROHVRIZKLFKDOLNHKDYHDYDULDEOHDVZHOODVDFRQVWDQWDVSHFW

0HWKRGVRI7KHRORJ\

6LQFH WKHUH DUH YDULRXV ZD\V WR EXLOG D V\VWHP RI UHOLJLRXV EHOLHI LW LV JRRG WR
UHPHPEHUWKDWWKHSURFHGXUHDSHUVRQGHFLGHVWRSXUVXHZLOOLQIOXHQFHWKHILQDOUHVXOWV
$ IDOVH RU GHIHFWLYH SURFHVV RI SUHVXSSRVLWLRQDO LQTXLU\ ZLOO GLPLQLVK ZKDWHYHU
FRQFOXVLRQVDUHFRQVLGHUHG7KHUHDUHVHYHUDOEDVLFPHWKRGVRIWKHRORJLFDOH[SORUDWLRQ
EDVHGXSRQUHDVRQ




 7KH6SHFXODWLYH0HWKRG

,Q WKLV V\VWHP HYHU\WKLQJ FRQVLGHUHG LV PDGH WR FRQIRUP WR WKH SKLORVRSKLFDO
SULQFLSOHV SUHYLRXVO\ DVVXPHG )RU H[DPSOH 'HLVP DVVXPHV WKH SKLORVRSKLFDO
SULQFLSOHWKDW*RGRSHUDWHVRQO\DFFRUGLQJWR1DWXUDO/DZ3DQWKHLVPVD\VWKDW*RGLV
DOO DOO LV *RG 5DWLRQDOLVP FRQWHQGV WKDW WKH PLQG RI PDQ KDV FUHDWHG *RG ZKLOH
(YROXWLRQ WDNHV WKH SRVLWLRQ WKDW PDQ LV D SURGXFW RI WLPH VSDFH DQG FKDQFH
&KULVWLDQLW\DVVXPHVWKHH[LVWHQFHRI*RG:KLOHWKLVIRXQGDWLRQDOSULQFLSOHRIIDLWKLV
SOHDVLQJWRWKH/RUG+HEUHZVLWGLVSOHDVHVWKHSKLORVRSKLHVRIPDQZKLFKDUH
IRXQG WR EH IXQGDPHQWDOO\ IODZHG LQ OLJKW RI REMHFWLYH HYLGHQFH 7KH &KULVWLDQ LV
ZDUQHGWR%HZDUHOHVWDQ\PDQVSRLO\RXWKURXJKSKLORVRSK\DQGYDLQGHFHLWDIWHU

PY
WKHWUDGLWLRQRIPHQDIWHUWKHUXGLPHQWVRIWKHZRUOGDQGQRWDIWHU&KULVW&RORVVLDQV

O
C
7KH0\VWLFDO0HWKRG
'S

,QGLYLGXDOV ZKR FODLP VSHFLDO UHYHODWLRQV IURP *RG HPEUDFH WKH 0\VWLFDO 0HWKRG
R

7KHVH UHYHODWLRQV DUH FRQVLGHUHG WR EH VXSHULRU WR WKH 6FULSWXUHV 7KRXJK JUHDWO\
O

GLIIHUHQW WKH *QRVWLFV $QD%DSWLVW DQG WKH 4XDNHU VKDUH D FRPPRQ HPSKDVLV RQ
TH

SHUVRQDOUHYHODWLRQVIURPWKH/RUG,QP\VWLFLVPHYHU\WKLQJGHSHQGVRQLQWHUQDODQG
VXEMHFWLYHLPSUHVVLRQVRUFRQYLFWLRQVUDWKHUWKDQRQH[WHUQDODXWKRULW\DQGLQVWUXFWLRQ
AU

)RUH[DPSOHWKH0RUPRQVFODLPWREHOLHYHLQWKH%RRN RI0RUPRQDVDQDGGLWLRQ
H[WHUQDOUHYHODWLRQIURP*RG+RZHYHUDFFHSWDQFHRIWKLVVSXULRXVZRUNLVEDVHGXSRQ
SHUVRQDO WHVWLPRQ\ WR D EXUQLQJ LQ WKH ERVRP WKDW LWV ZRUGV DUH WUXH 1HLWKHU WKH
P\VWLFVQRUWKH0RUPRQVZRXOGQHYHUVD\7RWKHODZDQGWRWKHWHVWLPRQ\LIWKH\
VSHDNQRWDFFRUGLQJWRWKLVZRUGLWLVEHFDXVHWKHUHLVQROLJKWLQWKHP,VD

7KHPRGHUQ3HQWHFRVWDO&KDULVPDWLFPRYHPHQWLVVDWXUDWHGZLWKVSLULWXDOVXEMHFWLYH
VWDQGDUGV EXW LW LV QRW DORQH 7KH FXOWV DUH DOVR VXIIHU IURP H[FHVVLYH VSLULWXDO
H[SHULHQFHVWKDWGHSDUWIURPWKH6FULSWXUHVUHIOHFWHGLQWKHIROORZHUVRI:LOOLDP0LOOHU
,Q2FWREHUWKHIROORZHUVRI:LOOLDP0LOOHURIWKH6HYHQWK'D\$GYHQWLVWIL[HG



WKHGDWHIRUWKH6HFRQG$GYHQWRI&KULVW0LOOHUDIRUPHU%DSWLVWOD\PLQLVWHUEHOLHYHG
WKDWKLVSUD\HUVKDGEHHQDQVZHUHGFRQFHUQLQJSURSKHWLFHYHQWV+HZDVFRQYLQFHG
WKDWKHZDVDEOHWRLQWHUSUHWSURSKHF\FRUUHFWO\

5HO\LQJRQWKLVVXEMHFWLYHFRQYLFWLRQ0LOOHUFRQYLQFHGRWKHUVWRVHOOWKHLUSURSHUW\
UREHWKHPVHOYHVLQZKLWHDQGZDLWIRUWKH6HFRQG$GYHQWRI-HVXV7KH/RUGGLGQRW
FRPH LQ 2FWREHU RI  :KDW GLG FRPH ZDV D PDQLIHVWDWLRQ RI WKH HUURU RI WKH
0\VWLFDO0HWKRGLQGLYLGXDOVKDGFKRVHQWRHPEUDFH7UXWKZDVVHWDVLGHLQIDYRXURI
WKULOOLQJSHUVRQDOH[SHULHQFHV7KHVHULRXVQHVVRIWKH0\VWLFDO0HWKRGLVUHIOHFWHGLQ
WKH2OG7HVWDPHQW³%XWWKHSURSKHWZKLFKVKDOOSUHVXPHWRVSHDNDZRUGLQP\QDPH
ZKLFK,KDYHQRWFRPPDQGHGKLPWRVSHDNRUWKDWVKDOOVSHDNLQWKHQDPHRIRWKHU

PY
JRGVHYHQWKDWSURSKHWVKDOOGLH´'HX.-9

7KH,QGXFWLYH0HWKRG O
C
7KH,QGXFWLYH0HWKRGRIUHDVRQLQJPRYHVIURPDSDUWWRDZKROHIURPSDUWLFXODUVWR
'S

JHQHUDOV RU IURP WKH LQGLYLGXDO WR WKH XQLYHUVDO ,W VHHNV WR JDWKHU LQIRUPDWLRQ IRU
R

H[DPLQDWLRQ IURP DOO WKH DUHDV LQ ZKLFK *RG KDV UHYHDOHG +LPVHOI WKH SK\VLFDO
O

XQLYHUVHKXPDQKLVWRU\WKHFRQVWLWXWLRQRIWKHKXPDQVRXODQGWKHUHYHODWLRQRIWKH
TH

ZULWWHQ :RUG 2QFH WKH LQIRUPDWLRQ LV FROOHFWHG WKH DWWHPSW LV PDGH WR FRPELQH
HYHU\WKLQJ LQWR D KDUPRQLRXV DQG FRQVLVWHQW WKHRORJLFDO V\VWHP 7KH /RUG LV QRW
AU

RSSRVHGWRWKH,QGXFWLYH0HWKRGRILQTXLU\

Ƈ3URYHUEV*RWRWKHDQWWKRXVOXJJDUGFRQVLGHUKHUZD\VDQGEHZLVH

Ƈ-REVD\V6XUHO\,ZRXOGVSHDNWRWKH$OPLJKW\DQG,GHVLUHWRUHDVRQZLWK
*RG

Ƈ,VDLDK&RPHQRZDQGOHWXVUHDVRQWRJHWKHUVDLWKWKH/RUGWKRXJK\RXUVLQV
EHDVVFDUOHWWKH\VKDOOEHDVZKLWHDVVQRZWKRXJKWKH\EHUHGOLNHFULPVRQWKH\VKDOO
EHDVZRRO




 7KH'HGXFWLYH0HWKRG

+DYLQJJDWKHUHGSDUWLFXODUSDUWVRILQIRUPDWLRQWKH'HGXFWLYH0HWKRGRIUHDVRQLQJLV
XVHG WR PRYH IURP WKHVH SDUWLFXODUV WR LQIHU JHQHUDO SULQFLSOHV E\ UHDVRQLQJ 7KH
'HGXFWLYH 0HWKRG EHJLQV ZLWK DQ LQIHUHQFH LQ ZKLFK WKH FRQFOXVLRQ IROORZV
QHFHVVDULO\IURPWKHSUHPLVHV

)RUH[DPSOHWKH%LEOHWHOOVXVLQVXFKSDVVDJHVDV-RKQWKDW*RGORYHV7KHORYH
RI*RGLVPDQLIHVWHGLQPDQ\VSHFLILFLQVWDQFHVRIWHQGHUFDUHDQGFRQFHUQ7KHJHQHUDO
SULQFLSOHLVHVWDEOLVKHGWKDW*RGLVJUDFLRXVDQGPHUFLIXO$JDLQWKH%LEOHWHOOVXVWKDW
7KHKHDYHQVGHFODUHWKHJORU\RI*RGDQGWKHILUPDPHQWVKHZHWKKLV KDQGLZRUN
3VD7KHKHDUWFRQVLGHUVWKHPRYHPHQWVRI3OHLDGHVDQG2ULRQ-REDQG

PY
FRQFOXGHVWKHZLVGRPDQGJORU\RIWKH&UHDWRU

7KHRORJ\DVD6FLHQFH
O
C
7KHWHUPWKHRORJ\LVDSSOLHGQRWRQO\WRWKHVFLHQFHLWVHOIEXWWRDQ\WUHDWLVHRQWKDW
'S

VFLHQFH7KLVLVWUXHQRWRQO\RIDGLVFRXUVHXSRQWKHRQHWUXH*RGEXWHYHQRIRQH
R

XSRQWKHPDQ\IDOVHJRGVRIWKHKHDWKHQ,WLVDOVRWUXHWKRXJKWKHWUHDWLVHEHQRWD
O

VFLHQWLILFGLVFXVVLRQEXWVLPSO\DQLPDJLQDWLYHQDUUDWLYHRUSRHP7KXV2USKHXVDQG
TH

+RPHUZHUHFDOOHGWKHRORJLDQVDPRQJWKH*UHHNEHFDXVHWKHLUSRHPVWUHDWHGRIWKH
QDWXUHRIWKHJRGV(YHQWKHSRHPVRI2VVLDQWKRXJKSUREDEO\ZULWWHQLQ(QJODQG
AU

ZLWKLQWKHSDVWFHQWXU\LVDERRNRIWKHRORJ\%RLFH-30\WKRORJ\LVQRW

OHVVWKHRORJ\EHFDXVHLWWUHDWVRIIDOVHJRGVDQGLQZRUNVRIWKHLPDJLQDWLRQ

7KHWHUPWKHRORJ\LVKRZHYHUHVSHFLDOO\DSSOLFDEOHWROHDUQHGDQGVFLHQWLILFZRUNV
XSRQ*RGRUWKHJRGV2IWKHVHPDQ\DUHWREHIRXQGFRQQHFWHGZLWK+HDWKHQLVP
6XFKDUHWKH9HGDVWKHPRVWDQFLHQWRIWKHVDFUHGERRNVRIWKH+LQGRRV6XFKLVWKH
=HQGDYHVWD RI WKH DQFLHQW 3HUVLDQV 7KH (GGD ZKLFK VHWV IRUWK WKH 6FDQGLQDYLDQ



+RGJH&KDUOHV6\VWHPDWLF7KHRORJ\9RO*UDQG5DSLGV0LFKLJDQ:P%




P\WKRORJ\FRQVLVWVRISRHWLFVRQJVDQGDOVRRIGLDORJXHVRQWKHRULJLQRIWKHJRGV
RQWKHFUHDWLRQRIWKHZRUOGDQGRWKHUOLNHWRSLFV

7KH PRVW YDOXDEOHGLVFXVVLRQV DPRQJ WKH KHDWKHQKRZHYHU DUH WR EHIRXQGLQ WKH
ZRUNVRIWKH*UHHNSKLORVRSKHUVWKHJUHDWHUSDUWRIZKLFKZKHQQRWGLUHFWO\XSRQWKH
QDWXUHRIWKHJRGVLQYROYHTXHVWLRQVDVWRWKHRULJLQRIWKHZRUOGDQGWKHSUHVHQFH
WKHUHLQRIDGLYLQHFRQWUROOLQJ6SLULWDVZHOODVXSRQWKHQDWXUHRIWKHVRXODQGLWV
GXWLHVDQGLWVLPPRUWDOLW\2IWKHLUZRUNVPDQ\KDYHFRPHGRZQWRXVLQIUDJPHQWV
RQO\ZKLOHDODUJHSRUWLRQRIZKDWWKH\WDXJKWLVIRXQGRQO\LQWKHUHFRUGVDQGUHSRUWV
PDGHE\RWKHUVEXWWKHUHDUHDOVRPDQ\FRPSOHWHZRUNVZKLFKSURIHVVWRKDYHEHHQ
ZULWWHQE\WKHDXWKRUVRIWKHVHVSHFXODWLRQV&RQIHVVHGO\WKHPRVWLPSRUWDQWRIWKHVH

PY
*UHHNZULWLQJVDUH;HQRSKRQ
V0HPRUDELOLDRI6RFUDWHVDQGWKHZRUNVRI3ODWRDQG
$ULVWRWOH%XWIURPWKHEHJLQQLQJRI*UHFLDQSKLORVRSK\LQ7KDOHVDQG3\WKDJRUDVWR
O
LWVFXOPLQDWLRQLQ6RFUDWHV3ODWRDQG$ULVWRWOHZDVQRWTXLWHWZRKXQGUHG\HDUVZKLOH
C
LWVZKROHKLVWRU\FRYHUVDSHULRGRIVL[FHQWXULHVDQGDKDOIEHIRUHDQGILYHFHQWXULHV
'S

DIWHU WKH FRPLQJ RI &KULVW 1R KXPDQ PLQG FDQ HVWLPDWH WKH YDOXH RI WKHVH
R

FRQWULEXWLRQVQRU WKHLQIOXHQFH WKH\KDYHH[HUWHGHYHQRYHUWKRVHSRVVHVVHGRIWKH

O

&KULVWLDQ5HYHODWLRQ7KH/DWLQZULWHUVDOVRSURGXFHGVHYHUDOZRUNVRIDWKHRORJLFDO
TH

FKDUDFWHUSUHHPLQHQWDPRQJZKLFKLVWKDWRI&LFHUR&RQFHUQLQJWKHQDWXUHRIWKH
*RGV
AU

7KHRORJ\LVDOVRIUHTXHQWO\XVHGIRUWKHVHWRIRSLQLRQVH[KLELWHGE\DZULWHURUFODVV
RIZULWHUVLQDQ\RQHRUPRUHSURGXFWLRQV7KXVZHKDYHWKHWKHRORJ\RI&DOYLQRURI
$UPLQLXVRURI%D[WHUWKDWRIWKH5HIRUPDWLRQ3ULQFHWRQWKHRORJ\DQG1HZ(QJODQG
WKHRORJ\0HQDOVRVSHDNRIWKHWKHRORJ\RIWKH2OG RURIWKH 1HZ7HVWDPHQWWKH


*DUGQHU5HY-DPHV7KH)DLWKVRIWKH:RUOG$Q$FFRXQWRI$OO5HOLJLRQVDQG5HOLJLRXV6HFWV7KHLU'RFWULQHV5LWHV&HUHPRQLHV

DQG&XVWRPV9RO$)XOODUWRQ &RPSDQ\


+RUVOH\5LFKDUG$7KHODZRIQDWXUHLQ3KLORDQG&LFHUR+DUYDUG7KHRORJLFDO5HYLHZ




WKHRORJ\RIWKH3VDOPVRIWKHYDULRXV(YDQJHOLVWVHVSHFLDOO\RI-RKQDQG3HWULQHDQG
3DXOLQHWKHRORJ\

7KHRORJ\LVGHILQHGDVDVFLHQFH,WLVHPLQHQWO\ZRUWK\RIWKDWQDPH,WODFNVQRWKLQJ
WKDWFRQVWLWXWHVDVFLHQFH,WLVFRQFHUQHGLQWKHLQYHVWLJDWLRQRIIDFWV,WHQTXLUHVLQWR
WKHLU H[LVWHQFH WKHLU UHODWLRQV WR HDFK RWKHU WKHLU V\VWHPDWLF DUUDQJHPHQW WKH ODZV
ZKLFKJRYHUQWKHPDQGWKHJUHDWSULQFLSOHVZKLFKDUHWKHEDVLVRIWKLVH[LVWHQFHDQG
WKHVH UHODWLRQV $V LQ RWKHU VFLHQFHV WKHUH LV PXFK WKDW LV DEVROXWHO\ NQRZQ PXFK
EH\RQGWKLVWKDWLVOLWWOHTXHVWLRQHGPXFKWKDWLVVWLOOPDWWHURIVSHFXODWLRQDQGPXFK
DVWRZKLFKWKHUHLVGHFLGHGGLIIHUHQFHRIRSLQLRQ1HZIDFWVDUHFRQVWDQWO\GHYHORSLQJ
LQWKLVVFLHQFHDVLQRWKHUVZKLFKHQDEOHXVWRYHULI\WKHIDFWVDQGSULQFLSOHVKHUHWRIRUH

PY
DFFHSWHG ZKHQ WUXH DQG WR PRGLI\ WKHP ZKHQ HUURQHRXV 1HZ WKHRULHV SUHVHQW
WKHPVHOYHVIRUWKHEHWWHUH[SODQDWLRQRIIDFWVDOUHDG\NQRZQDQGDUHWHVWHGE\WKHVH
O
DQGE\RWKHUVVXEVHTXHQWO\GLVFRYHUHGDQGDUHUHFHLYHGRUUHMHFWHGDFFRUGLQJWRWKHLU
C
DVFHUWDLQHG FRUUHFWQHVV 7KH NQRZOHGJH RI WKH SDVW LV EXLOW XSRQ IRU SURJUHVVLRQ
'S

WRZDUGVWKHIXWXUH
R

7KHGLVFRYHU\RIWKHIDFWVLVFRQGXFWHGDVLQDOORWKHUVFLHQFHVE\VWXG\RIZKDWWKH
O

ILHOGDIIRUGV*HRORJ\H[DPLQHVWKHHDUWKDQGGHULYHVLWVIDFWVIURPWKHVWUXFWXUHRI
TH

WKDWHDUWK$VWURQRP\LQYHVWLJDWHVWKHVWDUV7KHRORJ\OLNHZLVHVWXGLHVWKHVRXUFHVRI
LWVNQRZOHGJH(DFKVFLHQFHVHHNVWRDUULYHDWWKHWUXWK7KHYRWDULHVRIHDFKDUHFHUWDLQ
AU

WKDW LW LV WR EH IRXQG LQ WKHLU ILHOGV HLWKHU SDUWLDOO\ RU FRPSOHWHO\ 7KH SHUIHFW
DWWDLQPHQWRIDOOIDFWVSUHSDUHVIRUWKHH[DFWQHVVRIVFLHQWLILFNQRZOHGJH7KHDEVHQFH
RI DQ\ PXVW PDNH WKH NQRZOHGJH LQFRPSOHWH 7KH SURSHU JHQHUDOL]DWLRQ RI DOO LV
HVVHQWLDOLQWKLVDVLQDOORWKHUNLQGVRIVFLHQFH$IXOONQRZOHGJHRIDOOWKHIDFWVDQG
DSHUIHFWJHQHUDOL]DWLRQRIWKHPZLOOFRQVWLWXWHWKHRORJ\DQH[DFWVFLHQFH

7KHRORJ\ LV DOVR DV VHQVLWLYH WR WKH DEVHQFH RI IDFWV DV LV DQ\ RWKHU VFLHQFH 7KH
DVWURQRPHU ILQGV WKDW KLV FDOFXODWLRQV EDVHG XSRQ FRUUHFW WKHRULHV DUH QRW H[DFWO\
YHULILHGDQGDWRQFHVXVSHFWVWKHSUHVHQFHRIVRPHGLVWXUELQJERG\DVWKHFDXVHRIWKLV



YDULDWLRQ6RDOVRLQWKHRORJ\7KHRPLVVLRQRIDVLQJOHIDFWKRZHYHUVPDOOPXVW
DIIHFWWKHZKROHXQLYHUVHRIGRFWULQH7KHFRPPRQPLQGGRHVQRWSHUFHLYHWKLVDQG
KHQFHLVQRWSUHSDUHGWRYDOXHWKHGLVFRYHU\RIWKHQHZIDFW%XWWKHWKHRORJLDQILQGV
LQWKHQHZDQGPRUHH[DFWDGMXVWPHQWWKXVPDGHSRVVLEOHWKHSURRIRIWKHWUXWKRIKLV
ZKROHV\VWHPDQGWKHUHIRUHSUL]HVLWHYHQVRPHWLPHVEH\RQGZKDWKHRXJKW

$FFRUGLQJWR%RLFH-3WKHRORJ\UHJDUGHGDVDVFLHQFHPD\EHFODVVLILHGLQ

YDULRXVIRUPV

 $FFRUGLQJ WR WKH PHWKRG RI UHYHODWLRQ LQWR QDWXUDO DQG VXSHUQDWXUDO WKHRORJ\
1DWXUDOWKHRORJ\HPEUDFHVZKDWPDQPD\DWWDLQE\WKHVWXG\RI*RGLQ1DWXUH7KLV
H[WHQGVQRWRQO\WRZKDWLVEHKHOGRIKLPLQWKH+HDYHQVDQGWKH(DUWKEXWDOVRLQWKH

PY
LQWHOOHFWXDODQGVSLULWXDOQDWXUHRIPDQKLPVHOI6XSHUQDWXUDOWKHRORJ\LVWKDWGHULYHG
O
IURPVXFKVSHFLDOLQIRUPDWLRQDV*RGKDVJLYHQE\ZKDWZHFRPPRQO\FDOO5HYHODWLRQ
C
 $FFRUGLQJ WR WKH SXUSRVH ZKLFK LW FRQWHPSODWHV LQWR 6\VWHPDWLF 7KHRORJ\ DOVR
'S

FDOOHG 'LGDFWLF RU 'RJPDWLF 3ROHPLF RU &RQWURYHUVLDO 7KHRORJ\ DQG 3UDFWLFDO RU
R

([SHULPHQWDO7KHRORJ\
O

$FFRUGLQJWRWKHPDLQUHOLJLRXVLGHDDVVRFLDWHGZLWKLWDV 3DQWKHLVWLF7KHRORJ\
TH

'HLVWLF7KHRORJ\5DWLRQDOLVWLF7KHRORJ\
AU

$FFRUGLQJWRWKHQDPHRILWVIRXQGHURUWKHUDFHLQZKLFKLWRULJLQDWHGRUIORXULVKHV
DV

&KULVWLDQ7KHRORJ\-XGDLVWLF7KHRORJ\0RKDPPHGDQ7KHRORJ\

$FFRUGLQJWRWKHVRXUFHVIURPZKLFKLWLVGHULYHGLQWR%LEOLFDO7KHRORJ\&KULVWLDQ
'RJPDWLF7KHRORJ\DQG(FFOHVLDVWLFDO'RJPDWLFV




6RXUFHVRI7KHRORJ\
1DWXUDO7KHRORJ\

1DWXUDO7KHRORJ\LVWKDWV\VWHPRIEHOLHIZKLFKDSSHDOVWRREMHFWLYHIDFWVFRQWDLQHGLQ
WKH ZRUNV RI *RG DV GLVWLQFW IURP WKH ZULWWHQ UHYHODWLRQ RI 6FULSWXUH 2EMHFWLYH
LQIRUPDWLRQLVVRXJKWIURPQDWXUHKXPDQKLVWRU\WKHQDWXUHRIPDQDQG3URYLGHQFH

&RQFHUQLQJ1DWXUDO7KHRORJ\WKHIROORZLQJVWDWHPHQWVFDQEHPDGH

 7KHFUHDWHGXQLYHUVHUHYHDOVWKHH[LVWHQFHRI*RG7KDWLVDQREMHFWLYHIDFW

x *HQHVLV,QWKHEHJLQQLQJ*RGFUHDWHGWKHKHDYHQDQGWKHHDUWK

PY
x 5RPDQV)RUWKHLQYLVLEOHWKLQJVRIKLPIURPWKHFUHDWLRQRIWKHZRUOGDUH
FOHDUO\VHHQEHLQJXQGHUVWRRGE\WKHWKLQJVWKDWDUHPDGH7KHVWRU\LVWROGWKDW
O
1DSROHRQRQFHUHVSRQGHGWRWKHDUJXPHQWVRIVNHSWLFVE\SRLQWLQJKLV ILQJHU
C
WRZDUGWKHVWDUVDQGDVNLQJ:KRPDGHWKHVH"´7KHUHZDVVLOHQFH
'S

 1DWXUDO7KHRORJ\LVQRWVXIILFLHQWWRPHHWWKHVSLULWXDOQHHGVRIKXPDQLW\IRU
R

VSHFLILFUHDVRQV
O
TH

x 1DWXUDO7KHRORJ\WHOOVRIQRZD\RISDUGRQDQGSHDFHZLWK*RG
AU

x 1DWXUDO7KHRORJ\SURYLGHVQRHVFDSHIURPVLQDQGLWVFRQVHTXHQFH

x 1DWXUDO7KHRORJ\RIIHUVQRZD\RIHWHUQDOVDOYDWLRQ

x 1DWXUDO7KHRORJ\SURYLGHVQRLQFHQWLYHWRKROLQHVV

x 1DWXUDO7KHRORJ\FRQWDLQVQRVXUHUHYHODWLRQRIWKHIXWXUH

1DWXUDO7KHRORJ\OHDYHVPDQLQWKHKDQGVRILPSHUVRQDOODZVZKLFKDUHEHOLHYHGWREH
LUUHYRFDEOHLUUHYHUVLEOHDQGLPSHUVRQDO$QG\HWWKRVHZKRHPEUDFH 1DWXUDO/DZ
EHOLHYHWKDWVRPHKRZWKLVV\VWHPRIEHOLHIKDVWKHFDSDFLW\WRWXUQWKHKHDUWIURPFROG



KDUGREMHFWLYHIDFWVWRVHQVLWLYHVSLULWXDOPDWWHUV,WZDVWKHERDVWRIWKH'HLVWRIWKH
HLJKWHHQWKFHQWXU\WKDWWKH\ZRXOGGHVWUR\UHYHDOHGUHOLJLRQDQGUHSODFHLWZLWKQDWXUDO
UHOLJLRQ7KHLUERDVWZDVSUHPDWXUH,WLVWKHWHVWLPRQ\RIWLPHWKDWWKHZRUOGKDVQHYHU
EHHQPDGHEHWWHUQRUKXPDQLW\XSOLIWHGE\DSXUHO\QDWXUDOUHOLJLRQ'DYLG&ODUN

 ,Q 1DWXUDO 7KHRORJ\ PDQ VHHNV *RG LQ 5HYHDOHG 7KHRORJ\ *RG VHHNV PDQ
EHFDXVHRILQILQLWHJUDFHDQGQRWRXWRIQHFHVVLW\³*RGKDYLQJDOOOLIHJORU\
JRRGQHVV EOHVVHGQHVV LQ DQG RI +LPVHOI LV DORQH LQ DQG XQWR +LPVHOI DOO
VXIILFLHQWQRWVWDQGLQJLQQHHGRIDQ\FUHDWXUHZKLFK+HKDWKPDGHQRUGHULYLQJ
DQ\JORU\IURPWKHPEXWRQO\PDQLIHVWLQJ+LVRZQJORU\LQE\XQWRDQGXSRQ
WKHP +H LV WKH DORQH IRXQWDLQ RI DOO EHLQJ RI ZKRP WKURXJK ZKRP DQG WR

PY
ZKRPDUHDOOWKLQJVDQG+HKDWKPRVWVRYHUHLJQGRPLQLRQRYHUDOOFUHDWXUHV
WRGRE\WKHPIRUWKHPDQGXSRQWKHPZKDWVRHYHU+LPVHOISOHDVHWKLQ+LV
O
VLJKWDOOWKLQJVDUHRSHQDQGPDQLIHVW+LVNQRZOHGJHLVLQILQLWHLQIDOOLEOHDQG
C
LQGHSHQGHQWXSRQWKHFUHDWXUHVRDVQRWKLQJLVWR+LPFRQWLQJHQWRUXQFHUWDLQ
'S

+HLVPRVWKRO\LQDOO+LVFRXQVHOVLQDOO+LVZRUNVDQGLQDOO+LVFRPPDQGV
R

WR+LPLVGXHIURPDQJHOVDQGPHQZKDWVRHYHUZRUVKLSVHUYLFHRUREHGLHQFH
O

DVFUHDWXUHVWKH\RZHXQWRWKH&UHDWRUDQGZKDWHYHU+HLVIXUWKHUSOHDVHGWR
TH

UHTXLUHRIWKHP´7KH%DSWLVW&RQIHVVLRQRI)DLWKRI

7KRXJK*RGGRHVQRWQHHG+LVFUHDWLRQ+HGRHVVHHNIHOORZVKLSZLWKLWIRUVXFKLV
AU

WKHQDWXUHRIJUDFH(YHQVLQKDVQRWNHHS*RGIURPVHHNLQJPDQ$GDPZKHUHDUW
WKRXLVVWLOOWKH'LYLQHFDOO*HQ

5HYHDOHG%LEOLFDO7KHRORJ\

5HYHDOHG%LEOLFDO7KHRORJ\5HYHDOHG7KHRORJ\LVSULPDULO\FRQFHUQHGZLWKZKDWLV

FRQWDLQHG LQ WKH 6FULSWXUHV RI WKH 2OG DQG 1HZ 7HVWDPHQWV IRU LQ WKHP DUH DOO WKH
QHFHVVDU\LQIRUPDWLRQWKDWLVQHHGHGLQRUGHUWRNQRZWKH/RUG5HYHDOHG7KHRORJ\
GRHVQRWGLVUHJDUGWUXHWUXWKIRXQGHOVHZKHUH,WGRHVLQVLVWWKDW'LYLQHUHYHODWLRQLV
WKHOHDGLQJVRXUFHRINQRZOHGJHRI*RG+LVZLOODQGRIPDQ
VGXW\WRKLV&UHDWRU7R



-RVKXDWKHFRPPDQGFDPH7KLVERRNRIWKHODZVKDOOQRWGHSDUWRXWRIWK\PRXWK
EXWWKRXVKDOWPHGLWDWHWKHUHLQGD\DQGQLJKWWKDWWKRXPD\HVWREVHUYHWRGRDFFRUGLQJ
WRDOOWKDWLVZULWWHQWKHUHLQIRUWKHQWKRXVKDOWPDNHWK\ZD\SURVSHURXVDQGWKHQWKRX
VKDOWKDYHJRRGVXFFHVV-RVKXD.-9

%LEOLFDO 7KHRORJ\ FRQVLVWV LQ WKH IDFWV RI WKH %LEOH KDUPRQL]H E\ VFULSWXUDO
FRPSDULVRQ JHQHUDOL]HG E\ VFULSWXUDO WKHRULHV FU\VWDOL]HG LQWR VFULSWXUDO GRFWULQHV
DQGVRV\VWHPDWL]HGDVWRVKRZWKHV\VWHPRIWUXWKWDXJKWWRWKHIXOOH[WHQWWKDWLWLVD
V\VWHP DQG QR IDUWKHU $V LQ %RWDQ\ RQH JDWKHUV DOO WKH SODQWV RI WKH ZRUOG DQG
DUUDQJHVWKHPZLWKRXWDWWHPSWLQJWRLQWURGXFHQHZSODQWVHYHQWRILOOXSPDQLIHVWJDSV
VR%LEOLFDO7KHRORJ\GXO\SUHVHQWHGVKRZVFULSWXUDOWUXWKLQDOOWKHSHUIHFWLRQDQGLQ

PY
DOOWKHLPSHUIHFWLRQZLWKZKLFK*RGKDVJLYHQLW

O
7UXH %LEOLFDO 7KHRORJ\ VKRXOG UHFRJQL]H WKH LQVSLUHG VRXUFH ZKHQFH LWV WHDFKLQJV
C
FRPH %XW DV QRZ WHFKQLFDOO\ XVHG %LEOLFDO 7KHRORJ\ UHIHUV WR WKH VWDWHPHQW DQG
GHYHORSPHQW RI GRFWULQH E\ WKH YDULRXV %LEOLFDO ZULWHUV RU LQ RWKHU ZRUGV WR WKH
'S

GHYHORSPHQWRI-HZLVKUHOLJLRXVWKRXJKWZLWKRXWDVVXPLQJRUGHQ\LQJWKHLQVSLUDWLRQ
R

RIWKH%LEOH
O
TH

'RJPDWLF7KHRORJ\
AU

&KULVWLDQ 'RJPDWLFV LV QRW FRQILQHG DV LV %LEOLFDO WR WKH IDFWV DQG WKHRULHV DQG
VWDWHPHQWVRIGRFWULQHH[SUHVVO\DQGIRUPDOO\VHWIRUWKLQWKH6FULSWXUHV,WFRPSULVHV
LQDGGLWLRQVXFKSKLORVRSKLFDOH[SODQDWLRQVDVVHHPQHFHVVDU\WRPDNHDFRPSOHWHDQG
KDUPRQLRXV V\VWHP 7KHVH DGGLWLRQV DUH QRW QHFHVVDULO\ QRQVFULSWXUDO IRU WKH\ DUH
RIWHQ WKH HPERGLPHQW RI WKH YHU\ HVVHQFH RI %LEOH WUXWK WKRXJK QRW RI LWV IRUPDO
XWWHUDQFHV7KH\PD\EHDVPXFKDSDUWRI6FULSWXUHDVWKHWKHRU\RIJUDYLWDWLRQLVRI
WKHUHYHODWLRQRIQDWXUH7KH\VKRXOGQHYHUEHVRIDUXQVFULSWXUDODVQRWWREH HLWKHU
SUREDEOHLQIHUHQFHVIURPWKH:RUGRI*RGRUQDWXUDOH[SODQDWLRQVRILWVVWDWHPHQWV



7KHPRUHSHUIHFWO\WKH\DFFRUGZLWKWKDWZRUGDQGWKHJUHDWHUWKHSURSRUWLRQRILWV
IDFWVZKLFKWKH\H[SODLQWKHPRUHFOHDUO\GRWKH\HVWDEOLVKWKHLURZQWUXWKDQGWKH
PRUHIRUFLEO\GRWKH\GHPDQGXQLYHUVDODFFHSWDQFH)DLOXUHWRH[SODLQDOOGLIILFXOWLHV
RUWRKDUPRQL]HDOOIDFWVGRHVQRWGHSULYHWKHPRIFRQILGHQFH EXWRQO\WHDFKHVWKH
QHHGRIIXUWKHULQYHVWLJDWLRQ'LUHFWRSSRVLWLRQKRZHYHUWRDQ\RQHVFULSWXUDOWUXWKLV
HQRXJKWRSURYHWKHH[LVWHQFHRIHUURULQDQ\&KULVWLDQ'RJPDWLFVWDWHPHQW

$FFRUGLQJ WR 6WDQIRUG ( 0  'RJPDWLF 7KHRORJ\ FRQFHQWUDWHV RQ WKH FRUH
GRFWULQHV WKH &KXUFK KDV FRQVLVWHQWO\ KHOG WR RYHU WKH FHQWXULHV FRQFHUQLQJ &KULVW
7KHVH GRFWULQHV LQFOXGH VXFK WHDFKLQJV DV WKH YLUJLQ ELUWK D VLQOHVV OLIH +LV
VXEVWLWXWLRQDU\GHDWKWKHUHVXUUHFWLRQIURPWKHGHDGWKH6HFRQG&RPLQJWKH7ULQLW\

PY
HWF7KH&KXUFKPXVWEHFDUHIXOWRJLYH LWVHOI WRWKHIRXQGDWLRQDOWHDFKLQJV2IWKH
HDUO\GLVFLSOHVLQ-HUXVDOHPLWZDVVDLGWKDWWKH\FRQWLQXHGVWHDGIDVWO\LQWKHDSRVWOH
V
O
GRFWULQHDQGIHOORZVKLSDQGLQEUHDNLQJRIEUHDGDQGLQSUD\HUV$FWV.-9
C
(FFOHVLDVWLFDO'RJPDWLFVFRQVLVWVRIDXWKRULWDWLYHVWDWHPHQWVRIGRFWULQHSXWIRUWKE\
'S

VRPHERG\RI&KULVWLDQVFODLPLQJWREHDFKXUFKRI&KULVW7KHVHDUHWREHIRXQGLQ
R

FUHHGVV\PEROVGHFUHHVDSRORJLHVDQGUHVROXWLRQV7KH\PD\DOVRDSSHDULQWKHIRUP
O

RIDXWKRULWDWLYHGLVFXVVLRQVRIWKHFUHHGRUV\VWHPRIGRFWULQHRIDQ\FKXUFK,WWKXV
TH

DSSHDUVWKDWDSHUIHFWV\VWHPRIWKHRORJ\ZLOOFRPELQHDOORIWKHVHFODVVHV,WPXVWEH
EDVHGXSRQ%LEOLFDO'RJPDWLFVZKLFKVKDOOKDYHVRFROOHFWHGDQGV\VWHPDWL]HGDOOWKH
AU

WHDFKLQJV RI D IXOO UHYHODWLRQ DV WR EH FRQFXUUHQW ZLWK WKH IDFWV DQG GRFWULQHV RI
&KULVWLDQ'RJPDWLFV7KH(FFOHVLDVWLFDO'RJPDWLFVZLOOKDYHJRQHQRIDUWKHUWKDQIXOO\
DXWKRUL]HGE\WKH:RUGRI*RGDQGWKHUHIRUHZLOOFRQFXUZLWK%LEOLFDO'RJPDWLFV
ZKLOHWKHIXOOQHVVRIUHYHODWLRQZLOOKDYHOHIWWR&KULVWLDQ'RJPDWLFVQRVSHFXODWLYH
TXHVWLRQVEXWLQDOOLWVGLVFXVVLRQVLWZLOOKDYHEHHQDEOHWRDWWDLQXQWRIXOONQRZOHGJH
RIWKHIDFWVDQGDVFHUWDLQPHQWRIDOOWKHGRFWULQHV%RLFH-3

%XWWKLVFRQFXUUHQFHFDQRQO\EHZKHQ7KHRORJ\KDVEHHQUHGXFHGWRDQH[DFWVFLHQFH
7KLVFDQQHYHUEHORRNHGIRULQWKLVOLIH7KHFDXVHVRIGRFWULQDOYDULDWLRQZLOOWKHUHIRUH



EH DSSDUHQW ,I PHQ FDPH WR WKH VWXG\ RI %LEOLFDO 7KHRORJ\ ZLWK PLQGV HQWLUHO\
XQSUHMXGLFHGFDSDEOHRIH[DPLQLQJLWVWUXWKVZLWKWKHVDPHPHQWDOSRZHUVDQGZLWK
WKHVDPHDPRXQWRIVWXG\DOOZRXOGDJUHHDVWRLWVIDFWVDQGGRFWULQHV%XWWKLVFDQQRW
EHGRQH0HQWDOFDSDFLWLHVYDU\$OOPHQKDYHWKHLUSUHMXGLFHV$OOKDYHQRWHTXDOWLPH
IRUVWXG\DQGDOOXVHQRWHTXDOO\WKHWLPHWKDWWKH\KDYH7KXVYDULHW\LVFHUWDLQHYHQ
LQVWXG\LQJ%LEOLFDO7KHRORJ\

7KHVDPHFDXVHVLQFUHDVHWKLVLQ&KULVWLDQ'RJPDWLFVEHFDXVHKHUHWKHKXPDQHOHPHQW
HQWHUVPRUHODUJHO\WKDQLQ%LEOLFDO7KHRORJ\ZKLOHUHYHUHQFHIRUDQWLTXLW\RSSRVLWLRQ
WR FKDQJH DQG WKH LQIOXHQFH RI WKH OHDUQHG RI WKH SDVW DQG WKH SUHVHQW SUHYHQW WKH
DOWHUDWLRQRI(FFOHVLDVWLFDOFUHHGVZKLFKHPERG\ (FFOHVLDVWLFDO'RJPDWLFVDQGWKXV

PY
OHDGPHQFRQVWDQWO\WRFRQWLQXDQFHLQHUURUDQGUHIXVDOWRDFFHSWWUXWK

 O
C
3UDFWLFDO7KHRORJ\
'S

3UDFWLFDO7KHRORJ\VHHNVWRVWXG\WKHHIIHFWRI'LYLQHWUXWKXSRQWKHOLYHVRISURIHVVLQJ
R

&KULVWLDQV7KHPDLQFULWHULDLVZKHWKHURUQRWDSDUWLFXODUGRFWULQHLVHIIHFWLYHLQWKH
O

OLYHVRILQGLYLGXDOV,WKDVEHHQREVHUYHGWKDWDOOGRFWULQHLVSUDFWLFDODQGDOOSUDFWLFH
TH

VKRXOG EH GRFWULQDO 0DQ\ RI WKH HSLVWOHV DUH GLYLGHG LQWR WZR SDUWV GRFWULQDO DQG
SUDFWLFH6HHQRWHEHORZ(SKHVLDQVFKDSWHUV'RFWULQHDQG(SKHVLDQVFKDSWHUV
AU

3UDFWLFH

7KHRORJ\3URSHU

$FFRUGLQJWR6WDQIRUG(07KHRORJ\3URSHUUHWXUQVWRWKHSHUVRQRI*RGIRU

WKHFRPPDQGLVJLYHQ³6HHN\HWKH/RUGZKLOHKHPD\EHIRXQG,VD.-97KH
HIIRUWWRNQRZWKH/RUGLVPDGHLQRUGHUWRGLVFHUQWKHDWWULEXWHVDQGHVVHQFHRI*RG
%HKROG , DP WKH /RUG WKH *RG RI DOO IOHVK LV WKHUH DQ\WKLQJ WRR KDUG IRU PH"




-HUHPLDK7KHRORJ\3URSHUVHHNVWRXQGHUVWDQGDQGNQRZ*RGDVDSHUVRQ*RG
LVQRWDQLGRO1RULV*RGWKHSURGXFWRIPDQ
VLPDJLQDWLRQV)RUDVNQRZRIWKHGD\V
WKDWDUHSDVWZKLFKZHUHEHIRUHWKHHVLQFHWKHGD\WKDW*RGFUHDWHGPDQXSRQWKH
HDUWKDQGDVNIURPWKHRQHVLGHRIKHDYHQXQWRWKHRWKHUZKHWKHUWKHUHKDWKEHHQDQ\
VXFKWKLQJDVWKLVJUHDWWKLQJLVRUKDWKEHHQKHDUGOLNHLW"'LGHYHUSHRSOHKHDUWKH
YRLFHRI*RGVSHDNLQJRXWRIWKHPLGVWRIWKHILUHDVWKRXKDVKHDUGDQGOLYHG"'HXW
.-90DQPXVWFRPHWR*RGEHOLHYLQJWKDW+HH[LVWVDQGWKDW+HH[LVWVDVD
SHUVRQZRUWK\RIZRUVKLS+HEUHZV$OOWUXHWKHRORJ\PXVWFRPHEDFNWRWKHVH
EDVLFFRQVLGHUDWLRQV-,3DFNHUH[SODLQV+RZFDQZHWXUQRXUNQRZOHGJHDERXW*RG
LQWRNQRZOHGJHRI*RG"7KHUXOHIRUGRLQJWKLVLVGHPDQGLQJEXWVLPSOH,WLVWKDWZH
WXUQHDFKWUXWKWKDWZHOHDUQDERXW*RGLQWRPDWWHUIRUPHGLWDWLRQEHIRUH*RGOHDGLQJ

PY
WRSUD\HUDQGSUDLVHWR*RG

&KULVWLDQ7KHRORJ\DQG7UDGLWLRQV
O
C
$V &KULVWLDQ WKHRORJ\ LQ PRGHUQ DJH KDV FRPH WR H[LVWHQFH LQ YDVW GLIIHUHQW
'S

SHUVSHFWLYHVLQGLIIHUHQWVLWXDWLRQVQRZDGD\VORFDOWKHRORJ\ HPHUJHGIURPWKHSDVW
R

IRXU GHFDGHV DV UHFHQWO\ FKDOOHQJLQJ WKHRORJ\ 'HDOLQJ ZLWK DQ\ NLQG RI SDUWLFXODU
O

WKHRORJ\ LQHYLWDEO\ LQYROYHV &KULVWLDQ WUDGLWLRQ VFULSWXUH WUDGLWLRQDO FXOWXUH DQG

TH

KXPDQH[SHULHQFHRUFRQWH[W+RZHYHUORFDOWKHRORJ\RUFRQWH[WXDOWKHRORJ\HPHUJHG
QRZ DV YHU\ VLWXDWLRQDO GHPDQGLQJ WKHRORJ\ PDNLQJ PXFK PRUH HPSKDVL]HG WKH
AU

LPSRUWDQFHRIORFDOWUDGLWLRQDQGFRQWH[W7KLVVHFWLRQWULHVWRSUHVHQWUHOHYDQWVRXUFHV
DSSURDFKHV DQG SHUVSHFWLYHV LQ OLQH ZLWK ORFDO WKHRORJLHV :H FDQ REVHUYH WKHVH
LQWHQGHGHOHPHQWVIURPWKHIROORZLQJSUHVHQWHGWRSLFVRQ:KDWLV&KULVWLDQ7KHRORJ\"
:KDWLV&KULVWLDQ7UDGLWLRQ":KDWLV/RFDO7KHRORJ\"3UREOHPVHQFRXQWHUHGZLWKLQ
/RFDO7KHRORJ\DQG&KULVWLDQ7UDGLWLRQDQG&RQVWUXFWLQJ/RFDO7KHRORJLHV



3DFNHU-DPHV,QQHOO.QRZLQJ*RG+DFKHWWH8.



6WHYHQ%%HYDQZURWHWKHUHDUHWKUHHVRXUFHVRI7KHRORJ\6FULSWXUHWUDGLWLRQDQG
SUHVHQWKXPDQH[SHULHQFHRUFRQWH[W7KHVHWKUHHDUHLQH[WULFDEO\UHODWHGHOHPHQWV
LQWKHSURFHVVRIFRQVWUXFWLQJORFDOWKHRORJLHV7RGRDJHQXLQHORFDOWKHRORJ\WKHUHLV
DQHHGRIVLQFHUHUHFRJQLWLRQWKDWFXOWXUDOWUDGLWLRQILUPO\DGRSWHGDQGURRWHGLQWKH
ORFDOFRQWH[WSOD\LPSRUWDQWUROH7KLVIDFWWRJHWKHUZLWKRWKHUUHODWHGWKHRORJLFDODQG
FXOWXUDOEDVLFUHOHYDQWSHUVSHFWLYHVFDQEHREVHUYHGLQWKLVVHFWLRQ

:KDWLV&KULVWLDQ7KHRORJ\"
&KULVWLDQWKHRORJ\LVFULWLFDOUHIOHFWLRQDERXW*RGDERXWKXPDQH[LVWHQFHDERXWWKH
QDWXUHRIWKHXQLYHUVHDQGDERXWIDLWKLWVHOILQWKHOLJKWRIWKHUHYHODWLRQRI*RGUHFRUGHG
LQ 6FULSWXUH DQG SDUWLFXODUO\ HPERGLHG LQ -HVXV &KULVW ZKR LV IRU WKH &KULVWLDQ

PY
FRPPXQLW\WKHILQDOUHYHODWLRQWKDWLVWKHGHILQLWLYHUHYHODWLRQZKLFKLVWKHFULWHULDRI
DOORWKHUUHYHODWLRQV
O
0LOODUG - (ULFNVRQZURWH ³WKH VWXG\ RI RU VFLHQFHRI *RG´ DV D EDVLF GHILQLWLRQ RI
C
WKHRORJ\ 7KHRORJ\ VHHNV WR XQGHUVWDQG *RG¶V FUHDWLRQ SDUWLFXODUO\ PDQ DQG KLV
'S

FRQGLWLRQDQG*RG¶VUHGHPSWLYHZRUNLQJLQUHODWLRQWRPDQNLQG$PRUHFRPSOHWH
R

GHILQLWLRQ RI WKHRORJ\ LQFOXGHV 7KHRORJ\ LV ELEOLFDO 7KHRORJ\ LV V\VWHPDWLF
O

7KHRORJ\DOVRUHODWHVWRWKHLVVXHVRIJHQHUDOFXOWXUHVDQGOHDUQLQJ7KHRORJ\PXVWDOVR
TH

EHFRQWHPSRUDU\DQGWKHRORJ\LVWREHSUDFWLFDO
AU

&ODVVLFDOWKHRORJ\FRQFHLYHGWKHRORJ\DVDNLQGRIREMHFWLYHVFLHQFHRIIDLWK,WZDV
XQGHUVWRRG DV D UHIOHFWLRQ LQ IDLWK RQ WKH WZR WKHRORJLFDO VRXUFHV RI 6FULSWXUH DQG
WUDGLWLRQ7KHFRQWHQWRIWKHVHVRXUFHVLVQRWDQGQHYHUZLOOEHFKDQJHGDQGDUHDERYH
FXOWXUHDQGKLVWRULFDOO\FRQGLWLRQHGH[SUHVVLRQ:HFDQRQO\VSHDNDERXWDWKHRORJ\
WKDWPDNHVVHQVHDWDFHUWDLQSODFHDQGLQDFHUWDLQWLPH+HQUL%RXLOODUGRQFHVDLGWKDW



6WHSKHQ%%HYDQV0RGHOVRI&RQWH[WXDO7KHRORJ\5HYLVHG ([SDQGHGHG0DQLOD3KLOLSSLQHV/RJRV3XEOLFDWLRQV,QF


KWWSHQZLNLSHGLDRUJZLNL&KULVWLDQBWKHRORJ\
 0LOODUG - (ULFNVRQ &KULVWLDQ 7KHRORJ\ 8QDEULGJHG RQHYROXPH HGLWLRQ UHSULQWHG 0DQLOD 3KLOLSSLQHV &KULVWLDQ *URZWK
0LQLVWU\



DWKHRORJ\WKDWLVQRWXSWRGDWHLVDIDOVHWKHRORJ\6WHSKHQ%HYDQVVXJJHVWVWKLVIDFW
WRPHDQWKDW³DWKHRORJ\WKDWLVQRWVRPHKRZUHIOHFWLYHRIRXUWLPHVRXUFXOWXUHDQG
RXUFXUUHQWFRQFHUQVLVDOVRDIDOVHWKHRORJ\´

7KHRORJ\LVWKHVFLHQFHRI*RGDQGRIWKHUHODWLRQVEHWZHHQ*RGDQGWKHXQLYHUVH7KH
DLP RI WKHRORJ\ LV WKH DVFHUWDLQPHQW RI WKH IDFWV UHVSHFWLQJ *RG DQG WKH UHODWLRQV
EHWZHHQ*RGDQGWKHXQLYHUVHDQGWKHH[KLELWLRQRIWKHVHIDFWVLQWKHLUUDWLRQDOXQLW\
DVFRQQHFWHGSDUWVRIDIRUPXODWHGDQGRUJDQLFV\VWHPRIWUXWK7KHRORJ\LVWKHUHIRUH
D VXPPDU\ DQG H[SODQDWLRQ RI WKH FRQWHQW RI *RG¶V VHOIUHYHODWLRQV 7KHVH DUH WKH
UHYHODWLRQRI*RGLQQDWXUHDQGWKHUHYHODWLRQRI*RGLQWKH6FULSWXUHV

7KUHH7\SHVRI7KHRORJ\6WHSKHQ%%HYDQVDQG5RJHU36FKURHGHUKDYHGRQHDJRRG

PY
FDWHJRUL]DWLRQRIWKHRORJ\LQWKUHHW\SHV(DFKW\SHLVGHVFULEHGLQZKDWWKH\FDOOHG
³6L[&RQVWDQWVLQ&KULVWLDQLW\´²WKHIXQGDPHQWDOHOHPHQWVRI&KULVWLDQWKHRORJ\:H
O
PD\DVVXPHDOOWKHVHVL[FRQVWDQWVQRZLQOLQHZLWKRXUFRQFHUQ&KULVWLDQWUDGLWLRQV
C
7KHVH DUH  &KULVWRORJ\ ZKR LV -HVXV &KULVW DQG ZKDW LV KLV PHDQLQJ" 
'S

(FFOHVLRORJ\ZKDWLVWKHQDWXUHRIWKH&KULVWLDQFKXUFK"(VFKDWRORJ\KRZGRHV
R

WKH FKXUFK UHJDUG LWV HVFKDWRORJLFDO IXWXUH"  6DOYDWLRQ ZKDW LV WKH QDWXUH RI WKH
O

VDOYDWLRQLWSUHDFKHV"$QWKURSRORJ\KRZGRHVWKHFKXUFKYDOXHWKHKXPDQ"DQG
TH

&XOWXUHZKDWLVWKHYDOXHRIKXPDQFXOWXUHDVWKHFRQWH[WLQZKLFKWKHJRVSHOLV
SUHDFKHG"
AU

,ZLOOSXWDOOWKHVHVL[FRQVWDQWVLQEULHIEHORZ6HH6WHSKHQ%%HYDQVDQG5RJHU3
6FKURHGHU &RQVWDQWV LQ &RQWH[W  ZLWK WKH LQWHQWLRQ WR VHH KRZ &KULVWLDQ
WUDGLWLRQVDUHREVHUYHGDQGPDLQWDLQHGLQWKHVHGLIIHUHQWW\SHVRI&KULVWLDQWKHRORJ\LQ
RUGHU WR GLVFHUQ UHOHYDQW HOHPHQWV WR FRQVWUXFW ORFDO WKHRORJLHV 2QH FRXOG VXUHO\



%HYDQV0RGHOVRI&RQWH[WXDO7KHRORJ\

7KH$JHV'LJLWDO/LEUDU\7KHRORJ\6\VWHPDWLF7KHRORJ\9ROXPHE\$6WURQJ$*(66RIWZDUH$OEDQ\2586$9HUVLRQ
‹
6WHSKHQ%%HYDQVDQG5RJHU36FKURHGHU &RQVWDQWVLQ&RQWH[W$7KHRORJ\RI0LVVLRQIRU7RGD\ 4XH]RQ&LW\3KLOLSSLQHV

&ODUHWLDQ3XEOLFDWLRQV



FKRRVHDQGHYHQSURSRVHZKLFKW\SHRIWKHRORJ\DQGLWVPDLQWDLQHGWUDGLWLRQZRXOG
EHVWILWWRFRQVWUXFWORFDOWKHRORJLHV

&KULVWRORJ\
2QHQRWHZRUWK\WLPHZKHQWKLVKDSSHQHGZDVVXUURXQGLQJWKHGRFWULQHRI&KULVWRU
³&KULVWRORJ\´ /LVWHQ WR WKH FKXUFK¶V UHVSRQVH WR FRQWURYHUV\ RYHU &KULVW LQ WKH
&RXQFLORI&KDOFHGRQLQ$'7KHUHZHUHDGWKDW

>&KULVWLV@WUXO\*RGDQGWUXO\PDQ«UHFRJQL]HGLQWZRQDWXUHVZLWKRXW
FRQIXVLRQ ZLWKRXW FKDQJH ZLWKRXW GLYLVLRQ ZLWKRXW VHSDUDWLRQ WKH
GLVWLQFWLRQRIQDWXUH¶VEHLQJLQQRZD\DQQXOOHGE\WKHXQLRQEXWUDWKHU
WKHFKDUDFWHULVWLFVRIHDFKQDWXUHEHLQJSUHVHUYHGDQGFRPLQJWRJHWKHUWR

PY
IRUP RQH SHUVRQ DQG VXEVLVWHQFH QRW DV SDUWHG RU VHSDUDWHG LQWR WZR
SHUVRQV O

C
7KLVVWDWHPHQWGHVFULEHV&KULVWLQZRUGVWKDWDUHGLIIHUHQWIURPWKHWHUPLQRORJ\RIWKH
'S

%LEOH7KHFRXQFLOGUHZIURPH[WUDELEOLFDOVRXUFHVDQGVSRNHRIWKHQDWXUHVRI&KULVW
R

7KHFRXQFLODOVRVDLGWKDW&KULVW¶VQDWXUHVDUHGLVWLQFWEHLQJ³ZLWKRXWFRQIXVLRQ´WKDW
O

WKH\ DUH QRW DOWHUHG E\ RQH DQRWKHU EHLQJ ³ZLWKRXW FKDQJH´ EXW WKDW WKH\ DUH
TH

QHYHUWKHOHVV LQVHSDUDEO\ XQLWHG LQ &KULVW¶V ³RQH SHUVRQ´ EHLQJ ³ZLWKRXW GLYLVLRQ
ZLWKRXW VHSDUDWLRQ´ ,Q IDFW HYHQ WKH ZRUG ³SHUVRQ´ DV XVHG LQ WKLV FRQWH[W ZDV
AU

SUREDEO\ERUURZHGIURPWKHOHJDOYRFDEXODU\RIWKDWGD\LQZKLFKD³SHUVRQ´ZDVD
OHJDO WHUP IRU DQ LQGLYLGXDO¶V LGHQWLW\ 7KLV WHFKQLFDO ODQJXDJH GLG QRW FRPH IURP
6FULSWXUHEXWLWZDVWUXHWR6FULSWXUH$QGLWZDVQHFHVVDU\LQRUGHUWRFRPPXQLFDWH
WKHFKXUFK¶VGRFWULQHVDERXW&KULVWZLWKSUHFLVLRQ 

7\SH $ WKHRORJ\ IRFXVHV OHVV RQ WKH PHDQLQJ RI WKH KLVWRULFDO -HVXV DQG WKH


 7KLUG0LOOHQQLXP0LQLVWULHVDWWKLUGPLOORUJ





VLJQLILFDQFH RI KLV OLIH DQG PHVVDJH DQG PRUH RQ WKH RUWKRGR[\ RI GRFWULQDO
GHVFULSWLRQVRIKLVUHDOLW\DVHWHUQDO6RQEHFRPHWUXO\LQFDUQDWH7\SH$&KULVWRORJ\
KROGWKHH[FOXVLYHSRVLWLRQ

7\SH%WKHRORJ\WRRNRQWKHIRUPVRID³ORZ´&KULVWRORJ\ZKLFKIRFXVHGRQWKH-HVXV
RIKLVWRU\RQKLVSHUIHFWLRQDVWKHLGHDOKXPDQEHLQJDQGRQKLVWHDFKLQJVDVLPSRUWDQW
PRUDOSULQFLSOHVIRUDXWKHQWLFKXPDQOLIH

7\SH&WKHRORJ\GRQRWVHH-HVXV¶UHGHHPLQJZRUNDVWKHSD\PHQWRIDGHEWRUWKH
RIIHULQJ RI D KLJKHU LOOXPLQDWLRQ 5DWKHU -HVXV LV WKH RQH ZKRVH OLIH GHDWK DQG
UHVXUUHFWLRQKDYHVHWXVIUHHIURPRXUVODYHU\WR6DWDQ7\SH&OLEHUDWLRQWKHRORJLHV
ZRXOGWDNHDPRGHUDWHO\SOXUDOLVWSRVLWLRQ

PY


(FFOHVLRORJ\
O
C
7KHELEOLFDOWHDFKLQJRQWKHGRFWULQHRIWKHFKXUFKLVFRPPRQO\FDOOHG³HFFOHVLRORJ\´
'S

7KLVWHFKQLFDOWHUPLVGHULYHGIURPHNNOƝVLDਥțțȜȘıȓĮZKLFKLVWKH1HZ7HVWDPHQW

R

*UHHNZRUGIRU³FKXUFK´
O

,Q7\SH$WKHRORJ\WKHFKXUFKLVWKHVROHDJHQWDQGSURWHFWRURIIDLWKLQ&KULVW³2XWVLGH
TH

WKHFKXUFKWKHUHLVQRVDOYDWLRQ´LVXQGHUVWRRGTXLWHOLWHUDOO\
AU

7\SH % HFFOHVLRORJ\ ZRXOG PRVW OLNHO\ VHH LWVHOI LQ WHUPV RI WKH PRGHO RI P\VWLFDO
FRPPXQLRQRUVDFUDPHQW,WLVDFRPPXQLW\WKDWLVLQWLPDWHO\OLQNHGWR&KULVWDQG
WKURXJK&KULVWLWVPHPEHUVDUHLQWLPDWHO\OLQNHGWRRQHDQRWKHU

7\SH & WKHRORJ\ VHHV WKH FKXUFK DV WKH ³VDFUDPHQW RI OLEHUDWLRQ´ 7KH FKXUFK LV D
FRPPXQLW\WKDWE\LWVOLIHDQGE\LWVDFWLRQLQWKHZRUOGZLWQHVVHVWR*RG¶VOLEHUDWLQJ
ZRUNLQKLVWRU\,WKDVUHFRJQL]HGWKHFHQWUDOLPSRUWDQFHRIWKHORFDOFRPPXQLW\WKH
EDVHHFFOHVLDOFRPPXQLW\OHGE\ORFDOOHDGHUV




 (VFKDWRORJ\
7\SH$WKHRORJ\ZRXOGWHQGWRWKLQNRIWKHHVFKDWRQDVWKHWLPHZKHQ*RG¶VMXGJPHQW
RIWKHJRRGDQGWKHZLFNHGDQGWKHZRUOGZLOOILQDOO\WDNHSODFH

7\SH%HVFKDWRORJ\ZRXOGPRUHEHLQIDYRXURIOLEHUDOLVP7KHHVFKDWRORJ\RIPRVW
7\SH%WKHRORJLDQVWRGD\KRZHYHULVPXFKPRUHRIWKH³LQDXJXUDWHG´YHUVLRQ7KH
HQGRIKLVWRU\LVXQGHUVWRRGDVDOUHDG\LQDXJXUDWHGE\WKHGHDWKDQGUHVXUUHFWLRQRI
-HVXVEXWQRW\HWIXOO\SUHVHQWDVZH³ZDLWZLWKMR\IXOKRSHWKHFRPLQJRIRXU6DYLRXU
-HVXV&KULVW

7\SH&¶VHVFKDWRORJ\LVRQHWKDWWDNHVKLVWRU\ZLWKXWPRVWVHULRXVQHVVDQGXQGHUVWDQGV
HVFKDWRORJLFDOIXOOQHVVQRWDVWKHHQGRIKLVWRULFDOSURFHVVDQGWKHLQDXJXUDWLRQRID

PY
WLPHOHVV VSLULWXDO VWDWH EXW DV KLVWRU\¶V WUDQVIRUPDWLRQ DQG IXOILOOPHQW 7\SH &
HVFKDWRORJ\WRGD\PLJKWEHVWEHGHVFULEHGDV³LQDXJXUDWHGHVFKDWRORJ\´-HVXV¶OLIH
O
GHDWKDQGUHVXUUHFWLRQLQDXJXUDWHGWKHUHLJQRI*RGEXWWKHILQDOFRQVXPPDWLRQRIWKDW
C
UHLJQLVVWLOOLQWKHIXWXUH
'S


R
O

6RWHULRORJ\
TH

6RWHULRORJ\ WKH WHDFKLQJ RI VDOYDWLRQ KLVWRULD VDOXWLV *RG¶V DFFRPSOLVKPHQW RI
VDOYDWLRQ LQ KLVWRU\ ³VXEVWLWXWLRQDU\ DWRQHPHQW´ WKH LGHD WKDW &KULVW GLHG DV WKH
AU

VXEVWLWXWHRQZKRP*RGSRXUHGRXWKLVZUDWKDQG³RUGRVDOXWLV´WKHRUGHULQZKLFK

VDOYDWLRQFRPHVWRDQLQGLYLGXDO¶VOLIH6RWHULRORJ\GLYLGHVLQWRWZRLPSRUWDQWVXE
WRSLFV RUGR VDOXWLV DQG KLVWRULD VDOXWLV´ ³&KULVW¶V GHDWK ZDV D VXEVWLWXWLRQDU\
DWRQHPHQWRQEHKDOIRIEHOLHYHUV´³&KULVW¶VVXEVWLWXWLRQDU\DWRQHPHQWLVWKHRQO\KRSH
IRUDSHUVRQ¶VIRUJLYHQHVVDQGHWHUQDOOLIH´³6DYLQJIDLWKDQGUHSHQWDQFHDUHHVVHQWLDO
DVSHFWVRIWKHRUGRVDOXWLV´

7KHVRWHULRORJLFDOVLJQLILFDQFHRI&KULVW¶VGHDWKPXVWEHVHHQLQWKHOLJKWRI KLVWRULD
VDOXWLVDQGRUGRVDOXWLV2QWKHRQHKDQGWKHKLVWRULDVDOXWLVWKHKLVWRU\RIVDOYDWLRQ




UHDFKHG D FOLPDFWLFPRPHQW LQ WKH GHDWK RI &KULVW +LV GHDWK ZDV D VXEVWLWXWLRQDU\
DWRQHPHQWVHFXULQJHWHUQDOIRUJLYHQHVVRIVLQV2QWKHRWKHUKDQGQRLQGLYLGXDOVDUH
DFWXDOO\IRUJLYHQDQGVDYHGXQWLOWKHEHQHILWVRI&KULVW¶VDWRQHPHQWDUHDSSOLHGWRWKHP
LQWKHRUGRVDOXWLV:KHQLQGLYLGXDOVH[HUFLVHVDYLQJIDLWKE\UHSHQWLQJRIWKHLUVLQDQG
WUXVWLQJLQ&KULVWIRUIRUJLYHQHVVWKH\UHFHLYHHWHUQDOOLIH´ 

7\SH$7KHRORJ\YLHZVKXPDQEHLQJVDVHQPHVKHGLQVLQDQGVRLIOHIWRQWKHLURZQ
GRRPHG WR HWHUQDO SXQLVKPHQW DQG GDPQDWLRQ ,Q 7\SH $ WKHRORJ\ VDOYDWLRQ LV
SHUVRQDOLQWZRVHQVHVRIWKHZRUG,WLVRQO\WRDQLQGLYLGXDODQGRQO\ZLWKIXOO
LQGLYLGXDO FRQVHQW LW KDSSHQV ZKHQ RQH DFFHSWV -HVXV DV SHUVRQDO VDYLRXU 
6DOYDWLRQLVUHVWULFWHGWRLQWHULRUVSLULWXDOUHQHZDODQGWUDQVIRUPDWLRQ

PY
6DOYDWLRQLQ7\SH%WKHRORJ\LVPRUHFRQWH[WXDODQGFKDOOHQJLQJ,WLVZKLFKEURXJKW
KXPDQVWRJHWKHULPSURYHGWKHLUORWDQGVHWWKHPRQWKHURDGWRFXOWXUDODQGPDWHULDO
O
SURJUHVV :LWK WKH GDZQ RI PRGHUQLW\ WUDGLWLRQDO VSLULWXDO XQGHUVWDQGLQJV RI
C
VDOYDWLRQZHUHSURIRXQGO\FKDOOHQJHG$V'DYLG%RVFKGHVFULEHV LW³VDOYDWLRQQRZ
'S

PHDQWOLEHUDWLRQIURPUHOLJLRXVVXSHUVWLWLRQDWWHQWLRQWRKXPDQZHOIDUHDQGWKHPRUDO
R

LPSURYHPHQWRIKXPDQLW\´7KLVZDV³DQXQGHUVWDQGLQJRIVDOYDWLRQLQZKLFKKXPDQV
O

ZHUH DFWLYHDQG UHVSRQVLEOH DJHQWV ZKR XWLOL]HG VFLHQFH DQGWHFKQRORJ\ LQ RUGHU WR
TH

HIIHFWPDWHULDOLPSURYHPHQWVDQGLQGXFHVRFLRSROLWLFDOFKDQJHLQWKHSUHVHQW´
AU

)RU 7\SH & WKHRORJ\ VDOYDWLRQ PHDQW WKH DELOLW\ WR JURZ LQWR JUHDWHU DQG JUHDWHU
FRPPXQLRQZLWK*RG6DOYDWLRQLVXQGHUVWRRGWREHPDWHULDODVZHOODVWKHZKROHRI
FUHDWLRQOLYHVDQGJURZVWRLWVIXOOFDSDFLW\7\SH&XQGHUVWDQGLQJVRIVDOYDWLRQWRGD\
DOVRVSHDNRI*RG¶VDQGWKHFKXUFK¶VVDYLQJDFWLYLW\DVKXPDQDQGFRVPLFKHDOLQJDQG
ZKROHQHVV 6XFK ZKROHQHVV LQYROYHV ERWK PDWHULDO DQG VSLULWXDO GLPHQVLRQV 'DYLG
%RVFKVSHDNVRI³FRPSUHKHQVLYH´³LQWHJUDO´³WRWDO´RU³XQLYHUVDO´VDOYDWLRQDVDQ


7KLUG0LOOHQQLXP0LQLVWULHVDWWKLUGPLOORUJ

%HYDQVDQG6FKURHGHU&RQVWDQWVLQ&RQWH[W
,ELG4XRWHGIURP'DYLG-%RVFK7UDQVIRUPLQJ0LVVLRQ3DUDGLJP6KLIWVLQ7KHRORJ\RI0LVVLRQ0DU\NQROO1HZ<RUN2UELV

%RRNV



XQGHUVWDQGLQJ WKDW DYRLGV WKH WZR H[WUHPHV EHOLHIV WKDW DEDQGRQ LQFOXVLYH YLHZ RI
VDOYDWLRQ

$QWKURSRORJ\
7\SH$WKHRORJ\YLHZVKXPDQEHLQJVDVDIDOOHQFUHDWXUHV+XPDQLW\ZDVFUHDWHGLQ
WKHLPDJHDQGOLNHQHVVRI*RGEXWLWORVWWKDWLPDJHDQGOLNHQHVVDORQJZLWKFHUWDLQ
SRZHUVWKDWFDPHWREHFDOOHGSUHWHUQDWXUDOJLIWVZKHQ$GDPDQG(YHVLQQHG

7\SH%DQWKURSRORJ\VHHVFRQILGHQFHDQGWUXVWLQKXPDQUHDVRQ²RUWRSXWLWLQPRUH
PRGHUQ WHUPV KXPDQ H[SHULHQFH²WR ILQG 7UXWK 8OWLPDWHO\ IRU 7\SH % WKHRORJ\

PY
ZKDWLVWUXO\KXPDQLVJRRGDQGWKHWUXO\KXPDQLVWKHGRRUWRWKHKRO\

7\SH&WKHRORJ\SURYLGHVWKHEDVLVIRUDSRVLWLYHDSSUHFLDWLRQRIKXPDQEHLQJVZKLOH
O
DW WKH VDPH WLPH QRW EHLQJ QDwYH DERXW KXPDQ IDLOXUH DQG KXPDQ VLQIXOQHVV ,W
C
UHSUHVHQWVDEDODQFHRIWKHSHUVSHFWLYHVRI7\SH$DQG7\SH%1RZDGD\VKXPDQLW\
'S

LVEHLQJXQGHUVWRRGQRWDVWKHFHQWUHRIFUHDWLRQEXWDVDQLQWHJUDOSDUWRILW²KXPDQLW\
R

LVEHLQJXQGHUVWRRGPRUHDQGPRUHLQWKHFRQWH[WRIFRVPLFZKROHQHVV
O


TH

&XOWXUH
AU

+XPDQEHLQJVDUHPHDQLQJPDNLQJDQLPDOVDQGZRUNRXWDQGH[SUHVVWKDWPHDQLQJ
WKURXJK KXPDQ FXOWXUH 7\SH $ WKHRORJ\ VHHV QR VXFK YDOXH RI FXOWXUH LQ &KULVWLDQ
WUDGLWLRQ,QVWHDGORFDOFXOWXUHZDVWREHVZHSWDVLGHVRWKDWSHRSOHZRXOGEHDEOHWR
SUDFWLFH&KULVWLDQLW\LQD³SXUH´PDQQHU

,Q 7\SH % WKHRORJ\ FXOWXUH LV UHJDUGHG DV VRPHWKLQJ JRRG DQG WUXVWZRUWK\ DQG D
FRQWH[WLQZKLFKRQHPLJKWHQFRXQWHUWKHGLYLQH7\SH%WKHRORJ\DOVRDLPVWRVKRZ
WKHFRPSDWLELOLW\RIKXPDQFXOWXUHZLWK&KULVWLDQLW\,QGHHGFXOWXUHPLJKWHYHQVHUYH
DV D KHUPHQHXWLFDO WRRO WR XQGHUVWDQG &KULVWLDQLW\ HYHQ PRUH SURIRXQGO\ DV
&KULVWLDQLW\PRYHVLQWRQHZFXOWXUDOFRQWH[WV



+XPDQFXOWXUHLQWKHSHUVSHFWLYHRI7\SH&WKHRORJ\LVUHJDUGHGDVEDVLFDOO\JRRG
%HFDXVHRIKXPDQVLQFXOWXUHQHHGVWREHSXULILHGSHUIHFWHGDQGKHDOHG,WLVIRUWKLV
UHDVRQ WKDW &KULVWLDQ IDLWK PLJKW EHVW LQWHUDFW ZLWK FXOWXUH LQ WHUPV RI WKH ³SUD[LV
PRGHO´RIFRQWH[WXDOWKHRORJ\,QWKLVPRGHOFXOWXUHLVFRQFHLYHGPXFKPRUHIURPWKH
SHUVSHFWLYH RI WKH G\QDPLFV RI VRFLDO FKDQJH $FWLRQ WKHUHIRUH GRQH RXW RI
FRPPLWPHQWWRJRVSHOYDOXHVLVWKHEHJLQQLQJDQGHQGRIVXFKFXOWXUDOHQJDJHPHQW
7\SH &¶V WKHRORJ\ IRFXV ZRXOG EH RQ GLVFHUQLQJ DQG ZRUNLQJ IRU WKH IXOOQHVV RI
VDOYDWLRQZLWKLQDSDUWLFXODUFXOWXUDOFRQWH[WDQGFDOOLQJWKDWFRQWH[WWRJUHDWHUJURZWK
DQGJUHDWHUVHQVLWLYLW\WR*RG¶VVDYLQJDFWLRQLQKLVWRU\

7KHUROHRIWKHRORJ\LVWRLQWHUSUHWDQGFODULI\*RG¶V:RUGIRUWKHVDNHRIREHGLHQFH

PY
WR &KULVW LQ WKH FRQFUHWH KLVWRULFDO VLWXDWLRQ 7KHRORJ\ LV DQ LQVWUXPHQW IRU WKH
FRQWH[WXDOL]DWLRQRIWKH*RVSHO)RULWWRIXOILOLWVSXUSRVHLWPXVWEHEDVHGRQELEOLFDO
O
UHYHODWLRQLQWKHFRQWH[WRIUHDOOLIHDQGIRUREHGLHQFHWR&KULVWWRGD\ 
C

'S

:KDWLV&KULVWLDQ7UDGLWLRQ"
R

,Q WKLV WRSLF ZH VHH WZR FRUUHODWHG VXEWRSLFV &KULVWLDQ WUDGLWLRQ DQG &XOWXUDO
O

WUDGLWLRQ &KULVWLDQ WUDGLWLRQ KDV WR GR ZLWK &KULVWLDQ IDLWK EHOLHI SUDFWLFHV HWF
TH

EDVLFDOO\EDVHGRQ+RO\6FULSWXUHV7UDGLWLRQLHZKDW,ZRXOGOLNHWRWHUP³&XOWXUDO
AU

WUDGLWLRQ´GHDOVZLWKXQLTXHEHOLHIVDQGSUDFWLFHVDGRSWHGIURPRXWVLGHRI VFULSWXUH
&KULVWLDQWUDGLWLRQVDUHWUDGLWLRQVRISUDFWLFHRUEHOLHIDVVRFLDWHGZLWK&KULVWLDQLW\

7KHWHUPKDVVHYHUDOFRQQHFWHGPHDQLQJV,QWHUPVRIEHOLHIWUDGLWLRQVDUHJHQHUDOO\
VWRULHV RU KLVWRU\ WKDW DUH RU ZHUH ZLGHO\ DFFHSWHG ZLWKRXW EHLQJ SDUW RI &KULVWLDQ
GRFWULQH([DPSOHVRIVXFKPLJKWEHWKHFUXFLIL[LRQRI6DLQW3HWHUZKLFKLVZLGHO\
EHOLHYHGWRKDYHKDSSHQHGEXWLVQRWUHFRUGHGLQVFULSWXUH 



%HYDQVDQG6FKURHGHU&RQVWDQWVLQ&RQWH[W
'HQQLV7HDJXH&XOWXUH7KH0LVVLQJ/LQNLQ0LVVLRQ0DQLOD3KLOLSSLQHV20)/LWHUDWXUH,QF


KWWSZZZDQVZHUVFRPWRSLFFKULVWLDQWUDGLWLRQV



 7UDGLWLRQ
$WUDGLWLRQLVDVWRU\RUDFXVWRPWKDWLVPHPRUL]HGDQGSDVVHGGRZQIURPJHQHUDWLRQ
WRJHQHUDWLRQRULJLQDOO\ZLWKRXWWKHQHHGIRUDZULWLQJV\VWHP7RROVWRDLGWKLVSURFHVV
LQFOXGHSRHWLFGHYLFHVVXFKDVUK\PHDQGDOOLWHUDWLRQ7KHVWRULHVWKXVSUHVHUYHGDUH
DOVRUHIHUUHGWRDVWUDGLWLRQRUDVSDUWRIDQRUDOWUDGLWLRQ7UDGLWLRQLVWKHUHSRVLWRU\RI
WKHORUHDERXWJURXSERXQGDU\DQGDERXWZRUOGYLHZXVXDOO\WUDQVPLWWHGWRWKH\RXQJ
RI D VRFLHW\ LQ SUHSDUDWLRQ IRU IXOO SDUWLFLSDWLRQ LQ WKH FXOWXUH DV DGXOWV 7KLV
WUDQVPLVVLRQ WDNHV SODFH WKURXJK ULWHV RI LQLWLDWLRQ DW SXEHUW\ WKURXJK HGXFDWLRQDO
V\VWHPVDQGWKURXJKWKHJLYHDQGWDNHRIGD\WRGD\OLYLQJ7UDGLWLRQDVDERG\RI
ORUHLQFOXGHVVWRULHVDFWLYLWLHVPHPRULHVDQGWKHUXOHVJRYHUQLQJJURXSERXQGDU\
DQGZRUOGYLHZIRUPDWLRQ,WSURYLGHVDVHPLRWLFV\VWHPDVHW RI FRGHVZLWKLQWKDW

PY
V\VWHP ZKHUHE\ WKH EDVLF PHVVDJHV RI LGHQWLW\ FDQ FLUFXODWH WKURXJK D FXOWXUH
O
7UDGLWLRQ EHFDXVH RI LWV FRPSOH[ LQWHUUHODWLQJ RI VWRULHV DFWLYLWLHV PHPRULHV DQG
C
UXOHVJLYHVDVHQVHRIFRKHVLRQDQGFRQWLQXLW\WRDFXOWXUHDQGWKHLQGLYLGXDOVZKROLYH
ZLWKLQLW7KH³FRKHVLRQ´PHDQVWKDWLWDOOILWVWRJHWKHULWPDNHVVHQVH
'S
R

,QWKH5RPDQ&DWKROLF&KXUFKWUDGLWLRQLVWKHGRFWULQHWKDW6DFUHG7UDGLWLRQKROGV
O

HTXDODXWKRULW\WR+RO\6FULSWXUH,QWKH2UWKRGR[&KXUFKVFULSWXUHLVFRQVLGHUHGWR
TH

EH WKH FRUH FRQVWLWXHQW RI D ODUJHU WUDGLWLRQ 7KHVH YLHZV DUH RIWHQ FRQGHPQHG DV
KHUHWLFDO E\ 3URWHVWDQW FKXUFKHV ZKR KROG WKH %LEOH WR EH WKH RQO\ YDOLG WUDGLWLRQ
AU

,QVSLUHGE\WKH3URWHVWDQWUHMHFWLRQRIWUDGLWLRQWKH$JHRI(QOLJKWHQPHQWEHJDQWR
FRQVLGHUHYHQWKH%LEOHLWVHOIDVDTXHVWLRQDEOHWUDGLWLRQ

,QDUFKDHRORJ\DWUDGLWLRQLVDVHULHVRIFXOWXUHVRULQGXVWULHVZKLFKDSSHDUWRGHYHORS
RQIURPRQHDQRWKHURYHUDSHULRGRIWLPH 

&KULVWLDQWUDGLWLRQLVEHOLHYHGWRKDYHFRPHSULQFLSDOO\VROHO\IURPWKHUHYHODWLRQRI
*RGZKLFKLVNQRZQWKURXJK+RO\6FULSWXUHV6RPHZULWHUVSRLQWWRWKUHHVRXUFHVRI


5REHUW-6FKUHLWHU&RQVWUXFWLQJ/RFDO7KHRORJLHV0DU\NQROO1HZ<RUN2UELV%RRNV


KWWSZZZDQVZHUVFRPWRSLFWUDGLWLRQLQ$16:(5&20



UHYHODWLRQ6FULSWXUHWUDGLWLRQDQGUHDVRQ2QHPLJKWDWWULEXWHSULPDF\WRDQ\RQHRI
WKHWKUHH(YDQJHOLFDOVKDYHFKDUDFWHULVWLFDOO\DIILUPHGWKHSULPDF\RI6FULSWXUH:KLOH
WUDGLWLRQDQGUHDVRQPD\EHWUXHDVWKHZRUOGVRIPHQRQO\6FULSWXUHFDQEHFRQFOXGHG
DVWUXHLWDORQHEHLQJWKH:RUOGRI*RG

2QH RI WKH JUHDWHVW UHSUHVHQWDWLYH RI &KULVWLDQ WUDGLWLRQ HVSHFLDOO\ WKH PDJLVWHULDO
WUDGLWLRQ RI 5RPDQ &DWKROLF WKHRORJ\ LV 7KRPDV $TXLQDV $TXLQDV GLYLGHG KLV
WKHRORJ\LQWRWZRXQHTXDOSDUWV1DWXUDO7KHRORJ\WKDWVHHNVWRGLVFRYHUWKHWUXWKDERXW
*RG EDVHG XSRQ UHDVRQ DQG 5HYHDOHG 7KHRORJ\ LQ ZKLFK IDLWK DFFHSWV WKH WUXWKV
UHYHDOHGE\*RGWKURXJK6FULSWXUHDQGWKH&KULVWLDQWUDGLWLRQ

PY
:KDWLV/RFDO7KHRORJ\"
O
:KLOHWKHPRYHPHQWRILQGLJHQRXVWKHRORJ\EHJDQLQ,QGLDDQG&KLQDDVHDUO\DVWKH
C
VWKHPRYHPHQWRIFRQWH[WXDOWKHRORJLHVVSURXWHGIURPWKHVWRVDVWKH
'S

FRQVFLRXVHIIRUWRIVRPHWKLUGZRUOGWKHRORJLDQVWRILJKWDJDLQVW(XURSHDQLPSHULDOLVP
WKDWKDGH[LVWHGVLQFHWKHWKFHQWXU\
R
O

/RFDO7KHRORJ\LVDFRPSOH[SURFHVVZKLFKDZDUHRIFRQWH[WVRIKLVWRULHVRUWKHUROH
TH

RI H[SHULHQFH RI WKH QHHG WR HQFRXQWHU WKH WUDGLWLRQV RI IDLWK LQ RWKHU EHOLHYLQJ
FRPPXQLWLHV,QWKLVUHJDUGLWLVDOVRREYLRXVWKDWFRQWH[WVDUHFRPSOH[KLVWRULHVFDQ
AU

EHYDULRXVO\UHDGH[SHULHQFHFDQEHDPELJXRXVH[SHULHQFHFDQEHDPELJXRXVDQGWKH
HQFRXQWHULQIDLWKLVRIWHQGLPO\XQGHUVWRRG7KHVHIDFWRUVFDQEHVHHQDVURRWVIHHGLQJ
IRUWKHGHYHORSPHQWDQGJURZWKRIDORFDOWKHRORJ\7KHWKUHHSULQFLSDOURRWVEHQHDWK
WKHJURZWKRIORFDOWKHRORJ\DUHJRVSHOFKXUFKDQGFXOWXUH



'HQQLV7HDJXH&XOWXUH

3DXO0DWKHQ\2QWKH*HQHDORJLHVDQG*HRJUDKSLHVRI3KLORVRSKLFDODQG7KHRORJLFDO7KLQNLQJ$Q,QWURGXFWRU\7H[W4XH]RQ
&LW\3KLOLSSLQHV1HZ'D\3XEOLVKHUV

 $QJHOD :DL &KLQJ :RQJ ³%HWZHHQ 5HOLJLRXV 6WXGLHV DQG &XOWXUDO 6WXGLHV $Q ,QWHOOHFWXDO 5HIOHFWLRQ´ LQ 4XHVW $Q
,QWHUGLVFLSOLQDU\-RXUQDOIRU$VLDQ&KULVWLDQ6FKRODUV9RO1R-XQH

6FKUHLWHU&RQVWUXFWLQJ/RFDO7KHRORJLHV



'RLQJWKHRORJ\FRQWH[WXDOO\PHDQVGRLQJWKHRORJ\LQDZD\WKDWWDNHVLQWRDFFRXQW
WZRWKLQJV)LUVWLWWDNHVLQWRDFFRXQWWKHIDLWKH[SHULHQFHRIWKHSDVWWKDWLVUHFRUGHG
LQ VFULSWXUHV DQG NHSW DOLYH SUHVHUYHG GHIHQGHG DQG SHUKDSV HYHQ QHJOHFWHG RU
VXSSUHVVHGLQWUDGLWLRQ

/RFDO7KHRORJ\DVLWLVEDVHGRQORFDOFRQWH[WXDOVHWWLQJVLVDOVRFDOOHG&RQWH[WXDO
WKHRORJ\&RQWH[WXDOWKHRORJ\UHDOL]HVFXOWXUHKLVWRU\FRQWHPSRUDU\WKRXJKWIRUPV
DQGVRIRUWKDUHWREHFRQVLGHUHGDORQJZLWKVFULSWXUHDQGWUDGLWLRQDVYDOLGVRXUFHV
IRU WKHRORJLFDO H[SUHVVLRQ 7RGD\ ZH VSHDN RI WKHRORJ\ DV KDYLQJ WKUHH VRXUFHV
VFULSWXUHWUDGLWLRQDQGSUHVHQWKXPDQH[SHULHQFHRUFRQWH[W

$XWKHQWLF FRQWH[WXDOL]DWLRQ LV DOZD\V SURSKHWLF DULVLQJ DOZD\V RXW RI D JHQXLQH

PY
HQFRXQWHU EHWZHHQ *RG¶V :RUG DQG +LV ZRUOG DQG PRYHV WRZDUG WKH SXUSRVH RI
FKDOOHQJLQJ DQG FKDQJLQJ WKH VLWXDWLRQ WKURXJK URRWHGQHVV LQ DQG FRPPLWPHQW WR D
O
JLYHQKLVWRULFDOPRPHQW*HRUJH:3HWHUVVD\V³&RQWH[WXDOL]DWLRQSURSHUO\DSSOLHG
C
PHDQVWRGLVFRYHUWKHOHJLWLPDWHLPSOLFDWLRQVRIWKHJRVSHOLQDJLYHQVLWXDWLRQ´+DUYLH
'S

&RQQ ZULWHV WKDW FRQWH[WXDOL]DWLRQ LV ³WKH SURFHVV RI FRQVFLHQWL]DWLRQ RI WKH ZKROH
R

SHRSOHRI*RGWRWKHKHUPHQHXWLFDOFODLPVRIWKHJRVSHO´ 
O


TH

3UREOHPVHQFRXQWHUHGZLWKLQ/RFDO7KHRORJ\DQG&KULVWLDQ7UDGLWLRQ
AU

(QFRXQWHUZLWKWKHWUDGLWLRQFDQUDLVHPDQ\SUREOHPVIRUWKHFKXUFKHVDVWKH\GHYHORS
WKHLUORFDOWKHRORJLHV2IPDQ\GLIIHUHQWNLQGVRISUREOHPVUHJDUGLQJWKHWUDGLWLRQZLWK
ZKLFKWKHORFDOFKXUFKILQGVLWVHOIIDFHGVHYHQGHVHUYHVSHFLDODWWHQWLRQKHUH7KHVH
ZLOOKHOSWRIRUPWKHFRQWH[WIRUDGLVFXVVLRQRIDQXQGHUVWDQGLQJRIWUDGLWLRQDGHTXDWH



%HYDQV0RGHOVRI&RQWH[WXDO7KHRORJ\

,ELG

 'DYLG - +HVVHOJUDYH &RPPXQLFDWLQJ &KULVW &URVV&XOWXUDOO\ $Q ,QWURGXFWLRQ WR 0LVVLRQDU\ &RPPXQLFDWLRQ  QG HG *UDQG
5DSLGV0LFKLJDQ=RQGHUYDQ3XEOLVKLQJ+RXVH

,ELG



WR WKH SUREOHPV EHLQJ IDFHG LQ ORFDO FKXUFKHV WRGD\  6HH 5REHUW - 6FKUHLWHU
&RQVWUXFWLQJ/RFDO7KHRORJLHVIRUWKHIROORZLQJSRLQWRXWSUREOHPV

 7KHSUREOHPRIFKXUFKWUDGLWLRQRIRULJLQDOVLQ0DQ\$IULFDQFXOWXUHVIDFH
WKHFKXUFKWUDGLWLRQRIRULJLQDOVLQ:KHQWKLVWUDGLWLRQRIXQLYHUVDOVLQIXOQHVVDQGWKH
QHHG IRU UHGHPSWLRQ LV EURXJKW LQWR QRQ:HVWHUQ FXOWXUHV LW HQFRXQWHU SUREOHP
(VSHFLDOO\PDQ\$IULFDQFXOWXUHVGRQRWKDYHDVWRU\RIWKHIDOOLHWKHJDUGHQVWRU\
LQ*HQHVLVLQWKHLURZQRULJLQDOVWRULHV:HVWHUQH[HJHWHVDQGWKHRORJLDQVKDYH
VWUXJJOHGZLWKWKLVNLQGRISUREOHPVLQOLJKWRIWKHORFDOSHRSOHZRUOGYLHZ

 7KHSUREOHPRIFKXUFKWUDGLWLRQRIPRQRJDP\3RO\JDPRXVPDUULDJHLQUXUDO
$IULFDFXOWXUDOWUDGLWLRQIDFHV&KULVWLDQWUDGLWLRQRIPRQRJDP\PDUULDJH3RO\JDPRXV

PY
PDUULDJHLVZLGHO\DFFHSWHGHYHQLQUHOLJLRQGRFWULQHDVLQ,VODPDQG+LQGXLQVRPH
DUHDVRIFRPPXQLW\OLNHWKHVDLGUXUDO$IULFD+RZORFDOWKHRORJLHVZRXOGGHDOZLWK
O
LW"
C
'S

 7KHSUREOHPRI&KULVWLDQWUDGLWLRQRIFHOLEDF\ 7KHTXHVWLRQRIFHOLEDF\LQ
&KULVWLDQWUDGLWLRQLVEHLQJDVNHGLQFUHDVLQJO\%HFDXVHRIWKHSUDFWLFHRIFRQFXELQDJH
R

LQPRGHUQFXOWXUDOSUDFWLFHVVRPHORFDOFKXUFKHQFRXQWHUSUREOHPRIYDOLGLW\EHLQJDQ
O

XQPDUULHGSULHVWHYHQLQWKHFHQWUDO&DWKROLFGRFWULQH
TH

 7KHSUREOHPRIJHQXLQH&KULVWLDQLGHQWLW\7KLVSUREOHPLVDERXWWKHTXHVWLRQV
AU

RQWKHOLPLWRIFRQWH[WXDOL]DWLRQKRZIDULVRQHWRJRLQGDQJHURIV\QFUHWLVP(YHQ
WKRXJKERWKH[RUFLVPDQGKHDOLQJKDYHORQJWUDGLWLRQVLQ&KULVWLDQLW\KRZVXFKTXLWH
H[WUHPHDQGXQLTXHORFDOULWHVRIH[RUFLVPDQGKHDOLQJEHDOORZHGLQWR&KULVWLDQULWH
WRVKRZJHQXLQH&KULVWLDQLGHQWLW\"

 7KHSUREOHPRISDWHUQDOLVP0DQ\FKXUFKHVRIPRUHUHFHQWRULJLQKDYHIHOW
EHLQJXQFRPIRUWDEOHZLWKFKXUFKWUDGLWLRQRISDWHUQDOLVP,QGHHGLWLVLPSRUWDQWIDFW
LQORFDOFKXUFKHVWKDWPDQ\DUHNHHQO\VHQVLWLYHWRSDWHUQDOLVPLQFKXUFKUHODWLRQVKLSV



6FKUHLWHU&RQVWUXFWLQJ/RFDO7KHRORJLHV



&DQWKLVFKXUFKWUDGLWLRQRISDWHUQDOLVPEHKHDOWKLO\DSSOLHGLQORFDOWKHRORJLHV"

 7KHQHHGRIGLDORJXHIRUDFTXLULQJJHQXLQH&KULVWLDQWUDGLWLRQ$PLGVWVXFK
D GLYHUVH FXOWXUDO WUDGLWLRQ RI ORFDO FRPPXQLWLHV &KULVWLDQ WUDGLWLRQ HVSHFLDOO\ WKH
LQFDUQDWLRQRI&KULVWLQORFDOFXOWXUHQHHGVWREHGRQHZLWKDJHQXLQHGLDORJXH7KHUH
LV LQFUHDVLQJ GDQJHU WKDW PDQ\ FKXUFKHV ZRXOG QRW ZDQW WR KDYH GLDORJXH ZLWK WKH
WUDGLWLRQDWDOO

  7KH SUREOHP RI QRUPDWLYH WUDGLWLRQ  :KLOH GLIIHUHQW SDUWV RI WKH FKXUFK
FRQVWUXHWKDWQRUPDWLYHQHVVGLIIHUHQWO\WKHUHLVDQDJUHHGQRUPDWLYHWUDGLWLRQRIVRPH
VRUW 7KLV QRUPDWLYHQHVV VHHPV WR FRPH ZLWK WKHLU FXOWXUDOO\ FRQGLWLRQHG FKDUDFWHU
+RZLVRQHWRDVFHUWDLQWKHQRUPDWLYHZLWKLQWKH6FULSWXUHV"+RZLVRQHWRUHPDLQ

PY
IDLWKIXOWRWKDWZKLFKLVLQGHHGQRUPDWLYH"
O
)XUWKHUPRUHWKHUHDUHIRXUSUREOHPVWKDW&KULVWLDQWUDGLWLRQHQFRXQWHUVORFDOWKHRORJ\
C
-XVWWRSLQSRLQWWKHPDUH7KH3UREOHPRI&KULVWLDQWUDGLWLRQRIXQLW\³2QH/RUG
'S

RQHIDLWKRQHEDSWLVPRQH*RGDQG)DWKHURIDOO´(SK.-9LQFXOWXUDOGLYHUVLW\

 7KH SUREOHP RI V\QFUHWL]LQJ &KULVWLDQ WUDGLWLRQ ZLWK ORFDO WUDGLWLRQ HJ ORFDO
R

SHRSOHLQWHUSUHWWKH&KULVWLDQPHVVDJHDVWKH\XQGHUVWDQGLWZLWKLQWKHLUFXOWXUH
O

7KHSUREOHPRIPLVDSSO\LQJRIFKXUFKWUDGLWLRQHJLQOLEHUDWLRQWKHRORJ\FRQWH[WWKH
TH

ILJXUHRI0RVHVDQGWKHVWRU\RIWKHH[RGXVEHFRPHPRUHLPSRUWDQWWRWKHFRPPXQLW\
AU

WKDQWKHVWRU\RI-HVXV7KHSUREOHPRI&KULVWLDQWUDGLWLRQQRWWRODSVHLQFXOWXUDO
URPDQWLFLVP

7KHVHHOHYHQSUREOHPVDUHFUXFLDOWRWKHVXFFHVVRIDORFDOWKHRORJ\LQLQFDUQDWLQJWKH
JRVSHO7KH\KLJKOLJKWERWKORFDOWKHRORJ\DQG&KULVWLDQWUDGLWLRQIDFLQJSUREOHPVLQ
WKHLUPXWXDOHQFRXQWHUDQGJURZWK7KH&KULVWLDQWUDGLWLRQLVWRRSUHFLRXVDKHULWDJHWR
EHVTXDQGHUHGFDUHOHVVO\RU WUHDWHGOLJKWO\%XWZLWKRXWLWV FRQWLQXHGLQFDUQDWLRQLQ
ORFDO FRPPXQLWLHV LW EHFRPHV OLNH WKDW WUHDVXUH EXULHG LQ WKH JURXQG SURGXFLQJ QR
SURILW0W




 &RQVWUXFWLQJ/RFDO7KHRORJLHV
,QFRQVWUXFWLQJORFDOWKHRORJLHVQRZDGD\VZHFRPHWRNQRZKRZ FXOWXUDOWUDGLWLRQ
SOD\V LQHYLWDEOH UROH (DUOLHU ZH FDPH DFURVV WKDW KRZ ORFDO WKHRORJLHV HQFRXQWHU
FKXUFK WUDGLWLRQV LH VHYHQSUREOHPV DQG DOVR KRZ &KULVWLDQ WUDGLWLRQ HQFRXQWHUV
ORFDOWKHRORJLHVLHIRXUSUREOHPV$OOWKHVHSUREOHPVIDFHGLQORFDOFKXUFKHVDQG
ORFDOWKHRORJLHVFDQQRWEHGRQHEHLQJIUHHIURPFXOWXUH

5HOLJLRXVWUDGLWLRQLVDQLQWHJUDOSDUWRIRXUFXOWXUDOPHPRU\,QWKHIDFHRIPRGHUQLW\
VDLG - 0ROWPDQQ ³:H QHHG WR VXPPRQ RXU FXOWXUDO PHPRU\ EDFN WR OLIH DQG WR
VHDUFKIRUWKHZLVGRPDQGKRSHRIRXUDQFHVWRUVEHFDXVHLWLVQRWMXVWRXUZRUOGWKDW
LVDWULVNEXWDOVRWKHLUV:HQHHGWRUHODWHRXUFXOWXUDODQGUHOLJLRXVWUDGLWLRQVWRRXU

PY
VFLHQWLILFDQGWHFKQRORJLFDOSURJUHVVVRWKDWRXUSURJUHVVLVPDGHWRZDUGWKHKRUL]RQ
RIWKHIXWXUHWKDWWKHEHVWRIRXUWUDGLWLRQVRSHQXSWRXV
O
3HUKDSV7KHRORJ\DQG,WV&RQWH[W&KXUFK7UDGLWLRQDV/RFDO7KHRORJLHVSURSRVHGE\
C
5REHUW-6FKUHLWHUZRXOGSUREDEO\WKHPRVWUHOHYDQWVRXUFHVRIWUDGLWLRQDQGEHVWILW
'S

WKHFRQFHUQRIWKLVWRSLF:HZLOOOLNHWRVXPPDUL]HLWLQDQXWVKHOOWRVHHDFOXHKRZ
R

ORFDO WKHRORJLHVKDYH HPHUJHG DQG GHYHORSLQJ 7KHRORJ\ KDV RIWHQEHHQGHILQHGDV

O

IDLWK VHHNLQJ XQGHUVWDQGLQJ /RFDO WKHRORJLHV PDNH XV NHHQO\ DZDUH WKDW
TH

³XQGHUVWDQGLQJ´LWVHOILVGHHSO\FRORXUHGE\FXOWXUDOFRQWH[W+RZKXPDQNQRZOHGJH
LV H[SHULHQFHG DOWKRXJK FRPPXQLFDEOH DFURVV FXOWXUDO ERXQGDULHV LV QRQHWKHOHVV
AU

ODUJHO\VKDSHGE\ORFDOFLUFXPVWDQFHV

7KH H[SHULHQFH RI WKH FXOWXUDO URRWHGQHVV RI WKHRORJ\ UHERXQGV DJDLQ RQ D ORFDO
FRPPXQLW\ZKHQLWHQJDJHVWKHFKXUFKWUDGLWLRQHQWHULQJLQWRWKDWGLDORJXHWRWHVW
DIILUP DQG FKDOOHQJH LWV RZQ XQGHUVWDQGLQJ RI WKH JRVSHO ,Q WKH HQFRXQWHULQJ RI
FXOWXUH DQG FKXUFK WUDGLWLRQ WR IRUP ORFDO WKHRORJLHV WKUHH ZD\V DUH FRPPRQO\



-XUJHQ0ROWPDQQ³7KH,GHDRID&KULVWLDQ8QLYHUVLW\´LQ4XHVW$Q,QWHUGLVFLSOLQDU\-RXUQDOIRU$VLDQ&KULVWLDQ6FKRODUV9RO
1R-XQHS

6FKUHLWHU&RQVWUXFWLQJ/RFDO7KHRORJLHV



FRQVLGHUHGDQGIROORZHG

 5HFRQVWUXFWLQJWKHZLWQHVVHVRIWKH1HZ7HVWDPHQWWRIRUPDQLGHDOW\SHWKH
1HZ7HVWDPHQWFKXUFK(J7KH1HZ7HVWDPHQWFKXUFKHVWKHPVHOYHVUHSUHVHQW
GLIIHUHQWFXOWXUDODQGVRFLDOFLUFXPVWDQFHV
 'HDOLQJZLWKWKHJUHDWUHFXUULQJWKHPHVLQWKHRORJ\IURPDORFDOSHUVSHFWLYH
(J7KH:HVWHUQGRFWULQHRIRULJLQDOVLQGRHVQRWWDNHRQWKHVDPHIRUPRUWKH
VDPHVLJQLILFDQFHLQ2UWKRGR[WKHRORJ\
 5HDOL]LQJ WKDW WKH JUHDW WKHRORJLHV RI (DVW DQG :HVW KDYH GUDZQ XSRQ
SKLORVRSKLFDO V\VWHPV HODERUDWHG LQ WKHLU UHVSHFWLYH FXOWXUHV WR IUDPH WKHLU
TXHVWLRQV DQG DQVZHUV (J ,W DVVXPHV RQH VHW RI FXOWXUDO UHODWLRQV IRU WKH

PY
H[SUHVVLRQRINQRZOHGJHWREHYDOLGIRUDOOFXOWXUHVDWDOOWLPHV

O
7R VXPPDUL]H WKH DSSURDFK WR WKH FKXUFK WUDGLWLRQ LQ WKH GHYHORSPHQW RI ORFDO
C
WKHRORJLHVPHDQVXQGHUVWDQGLQJQRWRQO\KRZWKHTXHVWLRQVDQGWKHFRQWHQWWKDWDUHLQ
'S

WKH WUDGLWLRQ UHFHLYH WKHLU VKDSH EXW DOVR WKH FXOWXUDO FRQGLWLRQLQJ RI WKH YHU\
R

SDUDGLJPVRIWKRXJKWWKHPVHOYHV3HUKDSVWKHRORJ\LQ$IULFDQYLOODJHVFRXOGEHVWEH
O

H[SUHVVHGLQSURYHUEVUDWKHUWKDQLQ%DQKXSKLORVRSK\3HUKDSVWKHRORJ\FRXOGEHGRQH
TH

LQSRHWU\LQ-DSDQRULQWKHIRUPRIVXWUDDQGFRPPHQWDU\LQ6RXWK$VLD0HODQHVLDQ
WKHRORJ\PLJKWEHGRQHLQVRQJVDQGRUDWRU\DQG8QLWHG6WDWHVEODFNWKHRORJ\LQWKH
AU

GLDORJXHRIJRVSHOSUHDFKLQJ:HQHHGWRORFDWHWKRVHSDUDGLJPVRIWKRXJKWLQDFXOWXUH
ZKLFKVKDSHPHDQLQJDQGDIILUPLWLQWKHFXOWXUH

,Q6RFLRORJ\RIWKHRORJ\WKHRORJ\LVYLHZHGLQGLIIHUHQWH[SUHVVLRQV,WWULHVWRVHH
KRZSDUWLFXODUIRUPVRIWKRXJKWPLJKWEHUHODWHGWRSDUWLFXODUFXOWXUDOFRQGLWLRQV)RXU
IRUPVRIWKHRORJLFDOH[SUHVVLRQDUH7KHRORJ\DVYDULDWLRQVRQDVDFUHGWH[W
7KHRORJ\DV:LVGRP7KHRORJ\DVVXUHNQRZOHGJHDQG7KHRORJ\DVSUD[LV


,ELG


,ELG



1XPEHUVDUHPRUHUHOHYDQWH[SUHVVLRQVWRPHQWLRQZLWKUHJDUGWRRXUFRQFHUQ2QH
RIWKHSUHGRPLQDQWIRUPVRIWKHRORJ\LQ&KULVWLDQLW\DVZHOODVLQRWKHUJUHDWOLWHUDWH
WUDGLWLRQVKDVEHHQ7KHRORJ\DV:LVGRP,Q&KULVWLDQLW\LWLVLGHQWLILHGHVSHFLDOO\ZLWK
WKHSDWULVWLFSHULRGZLWKWKHWKHRORJLFDOWUDGLWLRQLQWKH(DVWGRZQWRWKHSUHVHQWZLWK
WKH$XJXVWLQLDQKHULWDJHLQWKH:HVWDQGZLWKWKHWKHRORJ\JURZLQJRXWRIWKHVSLULWXDO
DQGP\VWLFDOWUDGLWLRQV

:KDWLPSOLFDWLRQVGRWKHVHFXOWXUDOFRQGLWLRQVVXJJHVWIRUWKH GHYHORSPHQWRIORFDO
WKHRORJLHV"

 $ ZLVGRP WKHRORJ\ ZLOO EH D OLNHO\ GHYHORSPHQW LQ WKRVH FXOWXUHV WKDW KDYH
PDLQWDLQHGWKHLULPSRUWDQWULWHVRISDVVDJH,WSURYLGHVDZD\WREULQJWRJHWKHU

PY
WKHZLVGRPRIWKHDQFHVWRUVZLWKWKHZLVGRPRI&KULVWWKHILUVWDQFHVWRULQIDLWK
 :KHUH SHRSOH SUL]H ZLVGRP DERYH OHDUQLQJ DQG ZHDOWK ZLVGRP WKHRORJ\
O
EHFRPHVWKHQDWXUDOYHKLFOHIRUWKHLUH[SUHVVLRQLQIDLWK
C
 &XOWXUHV SODFLQJ JUHDW SUL]HRQ D XQLILHG YLHZ RI WKH ZRUOG RIWHQ VDFULILFLQJ
'S

PDQ\RWKHUWKLQJVWR PDLQWDLQLWVHHNWKHZD\RIZLVGRP,QTXHVWVIRUQHZ
R

VSLULWXDOWLHV¶LQWKH:HVWWKLVNLQGRIWKHRORJ\LVUHDVVHUWLQJLWVHOIWKHTXHVWIRU
O

XQLW\LQVHOIDQGVRFLHW\DVWKHZD\WR*RGWKHVRXUFHRIDOOXQLW\
TH

 :LVGRPWKHRORJ\PRGHOVKDYHPDLQWDLQHGWKHPRVWIUXLWIXOIRUFDWHFKHVLV
 :LVGRPWKHRORJ\IXQFWLRQVEHVWZKHUHDXQLW\LQZRUOGYLHZLVSRVVLEOH
AU

7KHRORJ\DVVXUHNQRZOHGJHLVSUREDEO\WKHPRVWFRPPRQIRUPRIWKHRORJ\LQ5RPDQ
&DWKROLFLVPDQGPDLQOLQH3URWHVWDQWLVPLQWKH:HVWWRGD\,WWULHVWRJLYHDFULWLFDO
UHODWLRQDODFFRXQWRIIDLWKXVLQJWKHWRROVRIDGLVFLSOLQHWKDWFDQRIIHUWKHPRVWH[DFW
KXPDQUHDVRQEXWDOVRQRZLQFOXGHVGLVFLSOLQHVLQWKHVRFLDOVFLHQFHVDQGWRVRPH
H[WHQWLQWKHQDWXUDOVFLHQFHV7KURXJKRXWWKHFHQWXULHVLWKDVGRPLQDWHGWKHVFHQHIURP


,ELG


,ELG



WKHWKLQWRWKHWKFHQWXU\

:KDW DUH VRPH LPSOLFDWLRQV RI 7KHRORJ\ DV VXUH NQRZOHGJH LQ GHYHORSLQJ ORFDO
WKHRORJLHV"

 ,WIXQFWLRQVEHVWLQWZRHQYLURQPHQWVWKHKLJKO\VSHFLDOL]HGDQGGLIIHUHQWLDWHG
VLWXDWLRQVLQXUEDQHFRQRPLHVDQGZKHUHYHUWKHUHLVDSOXUDOLW\RIFRPSHWLQJ
ZRUOGYLHZV :KHQ HLWKHU RI WKHVH VLWXDWLRQV SUHYDLOV LW LV WKH EHVW WRRO IRU
WKHRORJLFDOUHIOHFWLRQDQGDUWLFXODWLRQRI&KULVWLDQH[SHULHQFH
 %HFDXVH RI LWVHPSKDVLVRQ SUHFLVLRQ DQG FODULW\ LWKDVVSHFLDO FDSDFLWLHV IRU
FURVVFXOWXUDOFRPPXQLFDWLRQ
 $QDO\VLV DQG H[SODQDWLRQ DUH WKH JUHDW VWUHQJWKV RI LW IURP D PHWKRGRORJLFDO

PY
SRLQWRIYLHZ
 O
C
7KHRORJ\DV3UD[LVKDVFRPHWRWKHIRUHPRUHUHFHQWO\DVDPDMRUIRUPRIWKHRORJLFDO
'S

UHIOHFWLRQ $V XQGHUVWRRG WRGD\ SUD[LV LV WKH HQVHPEOH RI VRFLDO UHODWLRQVKLSV WKDW
LQFOXGHDQGGHWHUPLQHWKHVWUXFWXUHVRIVRFLDOFRQVFLRXVQHVV7KXVWKRXJKWDQGWKHRU\
R

DUHFRQVLGHUHGVHWVRIUHODWLRQVZLWKLQWKHODUJHUQHWZRUNRIVRFLDOUHODWLRQVKLSV
O
TH

:KDWDUHWKHWDVNVRID7KHRORJ\DVSUD[LV"7KUHHFDQEHPHQWLRQHGVSHFLILFDOO\

,WLVWRKHOSGLVHQWDQJOHWUXHFRQVFLRXVQHVVIURPIDOVHFRQVFLRXVQHVV
AU



 ,WKDVWREHFRQFHUQHGZLWKWKHRQJRLQJUHIOHFWLRQXSRQDFWLRQ
 ,WLVFRQFHUQHGZLWKWKHPRWLYDWLRQWRVXVWDLQWKHWUDQVIRUPDWLYHSUD[LV

:KDWLPSOLFDWLRQVDQGSRVVLELOLWLHVGRHVWKLVIRUPRIWKHRORJLFDOUHIOHFWLRQKDYHIRU
GHYHORSLQJORFDOWKHRORJLHV",WVHPSKDVLVRQVRFLDODQDO\VLVDQGLWVHPSKDVLVRQVRFLDO
WUDQVIRUPDWLRQKDYHDOUHDG\PDGHWKLVNLQGRIWKHRORJ\ZLGHO\XVHGLQFRPPXQLWLHV


,ELG


,ELG



VWUXJJOLQJLQWKHPLGVWRIRSSUHVVLRQ,WLVSDUWLFXODUO\KHOSIXODVDZD\RIUHFRYHULQJ
DZRUOGYLHZRUZD\RIOLIHWKDWKDVEHHQEORFNHGE\IDOVHFRQVFLRXVQHVVRQDODUJH
VFDOH

)XUWKHUPRUHLWLVZRUWK\WRPHQWLRQPRUHRQWKHLQHYLWDELOLW\RIFXOWXUHLQFRQVWUXFWLQJ
ORFDOWKHRORJLHVLQUHOLJLRXVH[LVWHQFH2QWKHTXHVWLRQ³:KDWLVDFXOWXUDOFULWLTXHRI
WKHRORJ\DQGUHOLJLRXVVWXGLHV"´3DXO7LOOLFKZLOOVD\WKDWLWLVDERXWTXHVWLRQLQJDQG
DQVZHULQJ WKH FRUUHODWLRQ RI WKH FULWLFDO TXHVWLRQV DULVLQJ IURP WKH FRQWHPSRUDU\
FXOWXUDOVLWXDWLRQRIWKHWUXWKDVUHYHDOHGWKURXJKWKHWUDGLWLRQVDQGLQWHUSUHWDWLRQVRI
&KULVWLDQLW\ $FFRUGLQJ WR &DWKROLF WKHRORJLDQ *XVWDYR *XWHUULH] WKHRORJ\ ZRXOG
UHPDLQDFRORQLDOWRROXQOHVVLWVKDNHLWVLPSHULDOLVWLFGUHVVDQGDGGUHVVHGWKHOLEHUDWLRQ

PY
RIWKHSRRUDQGWKHRSSUHVVHG

5REHUW 6FKUHLWHU SURSRVHV D GHILQLWLRQ RI FXOWXUH WKDW LQFOXGHV WKUHH DVSHFWV RU
O
GLPHQVLRQV)LUVWFXOWXUHLV³LGHDWLRQDO´SURYLGLQJDJULGE\ZKLFKWKHZRUOGFDQEH
C
LQWHUSUHWHGDQGDFFRUGLQJWRZKLFKOLIHFDQEHOLYHG6XFKDJULGLQFOXGHVEHOLHIVYDOXHV
'S

DQGFRGHVRIFRQGXFWLWSURYLGHVWKHFXOWXUH¶VEDVLFZRUOGYLHZ6HFRQGFXOWXUHLV
R

³SHUIRUPDQFH´HYHU\FXOWXUHKDV ULWXDOZD\VE\ZKLFKLWVEDVLFZRUOGYLHZFDQEH
O

H[SUHVVHG DQG WKURXJK ZKLFK PHPEHUV RI WKH FXOWXUH DUH ERXQG WRJHWKHU 6XFK
TH

SHUIRUPDQFHV PLJKW EH FXOWXUDO FHOHEUDWLRQV OLNH 7KDQNVJLYLQJ 'D\ LQ WKH 8QLWHG
6WDWHVRU,QGHSHQGHQFH'D\-XQHLQWKH3KLOLSSLQHVRU³HPERGLHG EHKDYLRXUV´
AU

OLNHIRUPVRIJUHHWLQJVKDNLQJKDQGVERZLQJDQGVRRQRUGHWHUPLQHGGLVWDQFHVIRU

FRPPXQLFDWLRQFORVHHQRXJKWRIHHOWKHRWKHU¶VEUHDWKDQDUP¶VOHQJWKDZD\DQGVR
IRUWK 7KLUG FXOWXUH KDV D ³PDWHULDO´ GLPHQVLRQ HYHU\ SHRSOH KDYH GLVWLQFWLYH
ODQJXDJHIRRGFORWKLQJPXVLFDQGVRRQ$OOWKHVHFXOWXUDODVSHFWVLQRWKHUZRUGV
FXOWXUDOYDOXHVVKDSHORFDOSHRSOHPHDQLQJIXOLQWKHLUUHOLJLRXVIDLWK



,ELG

$:DL&KLQJ:RQJ
 %HYDQV DQG6FKURHGHU &RQVWDQWV LQ &RQWH[W  4XRWHG IURP 5REHUW - 6FKUHLWHU 7KH 1HZ &DWKROLFLW\ 7KHRORJ\ EHWZHHQ WKH

*OREDODQGWKH/RFDO0DU\NQROO1<2UELV%RRNV




6WHSKHQ%%HYDQKDVSURSRVHGVL[PRGHOVWKDWHPHUJHDFFRUGLQJWRSDUWLFXODUFRQWH[WV
DQGRUSHUVRQV¶WKHRORJLFDORULHQWDWLRQVLQWKHHQFRXQWHURI&KULVWLDQIDLWKZLWKKXPDQ
FXOWXUH7KH7UDQVODWLRQ0RGHOUHJDUGVFXOWXUHVRPHZKDWSRVLWLYHO\EXWIRFXVHVPRUH
RQ WKH IDLWKIXOWUDQVPLVVLRQRI WKH JRVSHO PHVVDJH ,W WKHUHIRUH UHJDUGVFXOWXUH DVD
PHDQVDVDYHKLFOHRIWUDQVPLVVLRQUDWKHUWKDQVRPHWKLQJJRRGDQGUHYHODWRU\LQLWVHOI

7KH $QWKURSRORJLFDO 0RGHO VWDUWV ZLWK D EDVLF WUXVW RI FXOWXUH¶V JRRGQHVV DQG
UHYHODWRU\SRVVLELOLWLHVDQGSURSRVHVWKDWWKHZHDOWKRIWHQKLGGHQLQDFXOWXUHPLJKW
RIIHU QHZ ULFKHV WR WKH &KULVWLDQ VHOIXQGHUVWDQGLQJ 7KH 3UD[LV 0RGHO HPSOR\HG
SDUWLFXODUO\ E\ FRPPXQLWLHV VWUXJJOLQJ IRU OLEHUDWLRQ IRFXVHV RQ WKH GLPHQVLRQV RI
FXOWXUHLQYROYHGLQVRFLDOFKDQJHDQGGHYHORSVDUHLQWHUSUHWDWLRQRI&KULVWLDQLW\LQWKH

PY
PLGVWRIUHIOHFWLYHDFWLRQLQIDYRXURIFKDQJHWKDWHPERGLHV&KULVWLDQSULQFLSOHV7KH
6\QWKHWLF0RGHOIRFXVHVRQWKHDPELJXLW\RIDQ\FXOWXUHDQGORRNVRXWZDUGWRRWKHU
O
FXOWXUHVDQGVXFFHVVIXO&KULVWLDQH[SUHVVLRQVRIIDLWKIRUWKHPRVWDGHTXDWHH[SUHVVLRQ
C
RI &KULVWLDQ IDLWK LQ FXOWXUDO FRQWH[W 7KH 7UDQVFHQGHQWDO 0RGHO IRFXVHV RQ WKH
'S

DXWKHQWLF LQGLYLGXDO DQG KLV RU KHU DELOLW\ WR VSDUN DXWKHQWLF &KULVWLDQ DQG FXOWXUDO
R

WKLQNLQJLQGLDORJXHDQGFRQYHUVDWLRQ7KH&RXQWHU&XOWXUDO0RGHOZKLOHUHFRJQL]LQJ
O

WKHLPSRUWDQFHRIFXOWXUHUHJDUGVLWZLWKXWPRVWVXVSLFLRQDVVRPHWKLQJWKDWQHHGVWR
TH

EHFRQIURQWHGZLWKWKHFXOWXUDOO\VSHFLILF\HWXQLYHUVDOO\YDOLGJRVSHOPHVVDJH

,WLVQRZFOHDUIURPWKHDERYHDSSURDFKHVWKDWFXOWXUHKDVDOZD\VEHHQDQLQWHJUDOSDUW
AU

RI WKHRORJ\ HVSHFLDOO\ LQ FRQVWUXFWLQJ ORFDOWKHRORJ\ +RZHYHU IURP WKHRORJLHVRI

$XJXVWLQHWR$TXLQDV/XWKHUDQG:HVOH\LQDOORIWKHVHFXOWXUHZDVODUJHO\VHHQDV
SDJDQDQGRQO\DQDUHDWREHVXEGXHGLQRUGHUIRUWKH&KULVWLDQIDLWKWREHXSOLIWHGDQG
VKLQHWKURXJKWKHZRUOG+RZHYHUDVLQGLFDWHGHDUOLHUWKHUHFRXOGEHDGDQJHURI
EHLQJFXOWXUDOURPDQWLFLVPLQDWWHPSWLQJGRLQJORFDOWKHRORJLHV

%HLQJDIDLWKIXO&KULVWLDQZKRHQJDJHVLQGRLQJVXFKORFDOWKHRORJLHVVKRXOGDOZD\V


%HYDQVDQG6FKURHGHU&RQVWDQWVLQ&RQWH[W


$:DL&KLQJ:RQJ



KROGSUHYDLOLQJ&KULVWLDQWUDGLWLRQRWKHUWKDQFXOWXUDOWUDGLWLRQ7RSXWLWRWKHUZD\D
&KULVWLDQ ORFDO WKHRORJLDQ VKRXOG QRW PRUH RQ FXOWXUDO RULHQWHG EXW IDLWK RULHQWHG
&KULVWLDQ IDLWK PXVW DSSHDO WR D WUDGLWLRQDO GRFWULQH RI WKH &KXUFK RU UHOLJLRXV
FRPPXQLW\LQRUGHUWRIRXQGLWVEHOLHIQRWWRKXPDQH[SHULHQFH%HKLQGWKLVDSSHDOLV
DOZD\V WKH DUJXPHQW WKDW UHYHDOHG GRFWULQH JLYHV FUHGHQFH WR VRFLDO DQG SROLWLFDO
DXWKRULW\

:H ZRXOG DGPLW DQG FRQWHQW RQ ZKDW +LHEHUW KDV VDLG DERXW WKHRORJ\ WKDW ³$OO
WKHRORJLHV GHYHORSHG E\ KXPDQ EHLQJV DUH VKDSHG E\ WKHLU SDUWLFXODU KLVWRULFDO DQG
FXOWXUDO FRQWH[WV E\ WKH ODQJXDJHV WKH\ XVH DQG WKH TXHVWLRQV WKH\ DVN $OO KXPDQ
WKHRORJLHVDUHRQO\SDUWLDOXQGHUVWDQGLQJVRI7KHRORJ\DV*RGVHHVLW´

PY


:K\7KHRORJ\"
O
C
(YHU\ WKRXJKWIXO LQGLYLGXDO LV D WKHRORJLDQ WR VRPH H[WHQW IRU OLIH DQG GHVWLQ\ DUH
'S

DIIHFWHGE\ZKDWDQLQGLYLGXDOEHOLHYHVDERXW*RGDQG+LVZLOO$FFRUGLQJWR3URYHUEV
R

.-9$VDPDQWKLQNHWKLQKLVKHDUWVRLVKH´1RWKLQJVRDIIHFWVWKHVSLULWDQG
O

FKDUDFWHU RI D SHUVRQ DV KLV NQRZOHGJH RI *RG RU WKH ODFN RI LW 'DYLG &ODUN
TH

%HFDXVHWKLVLVWUXHWKHRORJ\EHFRPHVWKHPRVWYLWDODQGIXQGDPHQWDORIDOOVWXGLHV
³7R WKLV FRQVLGHUDWLRQ LQGLYLGXDOV PD\ ZHOO EULQJ WKH OLYHOLHVW LQWHUHVW NHHQHVW
AU

DSSUHKHQVLRQDQGORIWLHVWSRZHUVRIWKHPLQG3HRSOHPD\HQJDJHLQWKHPRVWGLOLJHQW
RIVSLULWXDOODERUVZKLOHFDOOLQJXSRQWKHVRXODQGDOOWKDWLVZLWKLQWKHVRXOWRDWWHQG
VHULRXVO\DQGUHYHUHQWO\WRWKHJUHDWDQGVROHPQVXEMHFWVWKDWFRQFHUQ*RG´'DYLG
&ODUN7KHVSLULWXDOKHDUWSUD\VZLWKWKH3VDOPLVW/RUGRSHQWKRXPLQHH\HV
WKDW,PD\EHKROGZRQGURXVWKLQJVRXWRIWK\ODZ´6XFKDSUD\HULVQHHGHGEHFDXVH


3DXO0DWKHQ\


'HQQLV7HDJXH&XOWXUH



1RWKLQJWZLVWVDQGGHIRUPVWKHVRXOPRUHWKDQDORZRUXQZRUWK\FRQFHSWLRQRI*RG
$:7R]HU

:LWKZKDWVSLULWZHVKRXOGZHVWXG\7KHRORJ\"

 :LWKUHYHUHQFHIRUWUXWKDQGHVSHFLDOO\IRUWKHWUXWKWDXJKWLQWKH:RUGRI*RG

 :LWKHDUQHVWSUD\HUIRU'LYLQHKHOS

 :LWKFDUHIXOVHDUFKLQJRIKHDUWDJDLQVWSUHMXGLFH

 :LWKWLPLGLW\DVWRWKHUHFHSWLRQDQGSURSDJDWLRQRIQHZGRFWULQH

 %XWZLWKDVSLULWZLOOLQJDQGDQ[LRXVWRH[DPLQHDQGWRDFFHSWZKDWHYHUZH

PY
PD\EHFRQYLQFHGLVWUXH
O
 :LWKWHDFKDEOHKXPLOLW\ZKLFKNQRZLQJWKDW*RGKDVQRWWDXJKWXVLQKLVZRUG
C
DOOWKHWUXWKWKDWH[LVWVQRWHYHQDOOWKHWUXWKRQPDQ\DVLQJOHSRLQWDFFHSWV
'S

ZLWKLPSOLFLWIDLWKDOOWKDWKHKDVWDXJKWDQGDZDLWVKLVRZQWLPHIRUWKDWPRUH
R

IXOOUHYHODWLRQZKLFKVKDOOUHPRYHDOORXUSUHVHQWSHUSOH[LWLHV
O

:KDWDUHWKHDGYDQWDJHVRIVWXG\LQJWKHRORJ\V\VWHPDWLFDOO\"
TH

 :HWKXVDVFHUWDLQDOOWKDWQDWXUHDQGWKH6FULSWXUHVWHDFKRQHDFKSRLQW
AU

 :HFRPSDUHDOOWKHVHWHDFKLQJVRQHZLWKDQRWKHUDQGDUHHQDEOHGWRGHILQHWKHLU
PXWXDOOLPLWDWLRQV

 :HDUHEURXJKWIDFHWRIDFHZLWKWKHIDFWWKDWRXUNQRZOHGJHLVERXQGHGE\*RG
V
5HYHODWLRQDQGDUHOHGWRDFNQRZOHGJHLWDVLWVVRXUFH



7R]HU$LGHQ:LOVRQ*RGLV(DV\WR/LYHZLWK/DVW'D\V0LQLVWULHV




  :HDUHFRQVHTXHQWO\ZDUQHGQRWWRRPLWDQ\RIWKHWUXWKDVFHUWDLQHGIURPDQ\
VRXUFHQRUGLGWRDGGWRLWDQ\WKLQJQRWSURSHUO\HPEUDFHWKHUHLQ$GHSDUWXUH
IURPWKLVUXOHZLOOOHDGLQWRLQHYLWDEOHHUURU

 7KHKDUPRQ\DQGFRQVLVWHQF\ZKLFKZLOOEHIRXQGLQDOO*RG
VWHDFKLQJVIURP
ZKDWHYHUVRXUFHZHPD\GUDZWKHPZLOOEHFRPHFRQFOXVLYHSURRIRIWKHGLYLQH
RULJLQRIUHYHODWLRQ7KLVZLOOUHVXOWQRWRQO\IURPDFRPSDULVRQRIZKDW5HDVRQ
DQG1DWXUHWHDFKZLWKWKHUHYHODWLRQVRI*RG
V:RUGEXWRIHDFKRIWKHVHYHUDO
ERRNV RI WKH %LEOH ZLWK WKH RWKHUV DQG HVSHFLDOO\ RI WKH ERG\ RI WKH 2OG
7HVWDPHQWDVRQHERRNZLWKWKDWRIWKH1HZ7HVWDPHQWDVDQRWKHU

 :HDUHWKXVOHGWRYDOXHHDFKRIWKHGRFWULQHVRIWKHZRUGRU*RG(DFKLVWUXH

PY
(DFKKDVEHHQUHYHDOHGWKDWLWPLJKWEHEHOLHYHG:HFDQQRWWKHUHIRUHRPLWDQ\
O
RQH EHFDXVH RI LWV IRUELGGLQJ DVSHFW RU LWV VHHPLQJ XQLPSRUWDQFH RU LWV
C
P\VWHULRXVQDWXUHRULWVGHPDQGIRUJUHDWSHUVRQDOVDFULILFHRULWVKXPLOLDWLQJ
DVVHUWLRQVRUUHTXLUHPHQWVRUWKHIUHHWHUPVXSRQZKLFKLWDVVXUHVRIOLIHDQG
'S

VDOYDWLRQ
R
O


TH


AU




 &+$37(5),9(

6<67(0$7,&7+(2/2*<

0DQ\ KDYH EHLQJ ZRQGHULQJ DQG DVNLQJ WKLV TXHVWLRQ FDQ *RG EH NQRZQ" 7KH
DQVZHUHGLV\HV³7KHPDQLIHVWDWLRQRI*RGLQQDWXUH+LVUHYHODWLRQLQWKH6FULSWXUHV
DQG+LVLQFDUQDWLRQLQ-HVXV&KULVWDVVXUHXVWKDW*RGFDQEHNQRZQ´²'U'DYLG
&ODUNH

,QWKLVVHFWLRQD UHYLHZRI 6WDQIRUG( 0XUUHO¶V)RXQGDWLRQIRU IDLWK DQG0RRG\¶V

'LFWLRQDU\RQ7KHRORJ\LVGRQH

7KHZRUGV\VWHPDWLF FRPHVIURPWKH*UHHNYHUE VXQLVWDQRZKLFKPHDQV ³WRVWDQG

PY
WRJHWKHU´RU³WRRUJDQL]H´KHQFHV\VWHPDWLFWKHRORJ\HPSKDVL]HVWKHV\VWHPDWL]DWLRQ
O
RIWKHRORJ\&KDIHUSURYLGHVDVXLWDEOHGHILQLWLRQRIV\VWHPDWLFWKHRORJ\³6\VWHPDWLF
C
7KHRORJ\ PD\ EH GHILQHG DV WKH FROOHFWLQJ VFLHQWLILFDOO\ DUUDQJLQJ FRPSDULQJ
H[KLELWLQJDQGGHIHQGLQJRIDOOIDFWVIURPDQ\DQGHYHU\VRXUFHFRQFHUQLQJ*RGDQG
'S

+LV ZRUNV´ 6\VWHPDWLF WKHRORJ\ LV GLVWLQJXLVKHG IURP RWKHU FODVVLILFDWLRQV RI
R

WKHRORJ\7KHRWKHUFODVVLILFDWLRQVFDQEHGLIIHUHQWLDWHGDVIROORZV
O

%LEOLFDOWKHRORJ\LVDQDUURZHUIRFXVRIVWXG\HPSKDVL]LQJWKHVWXG\RIDSDUWLFXODU
TH

HUDRUZULWHUHJWKHSURSKHWLFHUDRU-RKDQQLQH>-RKQ¶V@WKHRORJ\
AU

+LVWRULFDO WKHRORJ\ LV WKH VWXG\ RI WKH KLVWRULFDO GHYHORSPHQW DQG XQIROGLQJ RI
WKHRORJ\)RUH[DPSOHKLVWRULFDOWKHRORJ\REVHUYHVWKHGHYHORSPHQWRI&KULVWRORJ\LQ
WKHHDUO\FHQWXULHVRIWKH&KULVWLDQFKXUFKZKHQWKHFKXUFKFRXQFLOVIRUPXODWHGWKHLU
SRVLWLRQRQDJUHDWPDQ\GRFWULQHVVXFKDVWKHWZRQDWXUHVRI-HVXV&KULVW

'RJPDWLF WKHRORJ\ LV VRPHWLPHV FRQIXVHG ZLWK V\VWHPDWLF WKHRORJ\ DQG VRPH
RXWVWDQGLQJ WKHRORJ\ ZRUNV KDYH EHHQ HQWLWOHG ³GRJPDWLF WKHRORJ\´ FI : * 7



/HZLV6SHUU\&KDIHU6\VWHPDWLF7KHRORJ\YROV'DOODV'DOODV6HPLQDU\




6KHGG'RJPDWLFWKHRORJ\LVQRUPDOO\XQGHUVWRRGWRGHQRWHWKH VWXG\RIDFUHHGDO
V\VWHPDVGHYHORSHGE\DGHQRPLQDWLRQRUDWKHRORJLFDOPRYHPHQW

&KULVWLDQ WKHRORJ\ LV DQRWKHU FDWHJRUL]DWLRQ WKDW LV VRPHWLPHV XVHG V\QRQ\PRXVO\
ZLWK V\VWHPDWLF WKHRORJ\ 7KH PRVW UHFHQW ZRUN E\ 0LOODUG - (ULFNVRQ LV VR
GHVLJQDWHG7KHRORJLFDOERRNVE\(PHU\+%DQFURIWDQG+2UWRQ:LOH\DUHRWKHU
H[DPSOHV :KLOH DOVR V\VWHPDWL]LQJ WKHRORJ\ WKLV GHVLJQDWLRQ HPSKDVL]HV WKDW LW LV
ZULWWHQ IURP D GHFLGHGO\ &KULVWLDQ SHUVSHFWLYH EXW QRW VXJJHVWLQJ WKDW ZRUNV
GHVLJQDWHGV\VWHPDWLFWKHRORJ\DUHQRW

7KHRORJ\SURSHULVDFDWHJRU\RIVWXG\ZLWKLQV\VWHPDWLFWKHRORJ\LWGHQRWHVWKHVWXG\
RIWKHQDWXUHDQGH[LVWHQFHRI*RG7RGLVWLQJXLVKWKHVWXG\RI*RGVSHFLILFDOO\LQ

PY
FRQWUDVWWRWKHVWXG\RI-HVXV&KULVWWKH+RO\6SLULWWKHFKXUFKHWFWKHWHUPSURSHU
LVXVHGWRGLVWLQJXLVKWKHVWXG\RI*RGIURPWKHRORJ\LQJHQHUDO
O
C
7KH6FULSWXUHVSURYLGH DSULPDU\VRXUFHRI WKHRORJ\LQWKHLUUHYHODWLRQRI *RGDQG
'S

PDQ¶VUHODWLRQVKLSWR+LP,I*RGKDVUHYHDOHG+LPVHOIDQG+HKDVDQGLIWKDWVHOI

UHYHODWLRQLVDFFXUDWHO\HQFRGHGLQWKHVL[W\VL[ERRNVRI6FULSWXUHDQGLWLVWKHQWKH
R

6FULSWXUHVDUHWKHSULPDU\VRXUFHRIPDQ¶VNQRZOHGJHRI*RG
O
TH

1DWXUH LV DOVR D SULPDU\ VRXUFH RI D NQRZOHGJH RI *RG 3V  1DWXUH LQ LWV
KDUPRQLRXV UHYHODWLRQ LV D FRQVWDQW ZLWQHVV FRQFHUQLQJ *RG¶V DWWULEXWHV HWHUQDO
AU

SRZHUDQGGLYLQHQDWXUH5RP

6HFRQGDU\VRXUFHVRI7KHRORJ\LQFOXGHVWKHGRFWULQDOFRQIHVVLRQVVXFKDVWKH1LFHQH
&UHHGWKH:HVWPLQVWHU&RQIHVVLRQVDQGPDQ\RWKHUVDUHLPSRUWDQWLQXQGHUVWDQGLQJ
KRZRWKHU&KULVWLDQVRYHUWKHFHQWXULHVKDYHXQGHUVWRRGWKHRORJLFDOFRQFHSWV

7UDGLWLRQLQVSLWHRILWVIDOOLELOLW\LVLPSRUWDQWLQXQGHUVWDQGLQJDIILUPDWLRQVDERXWWKH
&KULVWLDQ IDLWK :KDW LQGLYLGXDOV FKXUFKHV DQG GHQRPLQDWLRQV KDYH WDXJKW LV D
QHFHVVDU\FRQVLGHUDWLRQLQIRUPXODWLQJWKHRORJLFDOVWDWHPHQWV




5HDVRQDVJXLGHGE\WKH+RO\6SLULWLVDOVRDVRXUFHRIWKHRORJ\5HDVRQKRZHYHU
PXVWVXEPLWWRWKHVXSHUQDWXUDOUDWKHUWKDQDWWHPSWLQJWRGHILQHLW

%LEOLRORJ\'RFWULQHRIWKH%LEOH
7KH(QJOLVKZRUGELEOHLVGHULYHGIURPWKH*UHHNZRUGELEOLRQZKLFKPHDQV³ERRN´
RU³UROO´7KHQDPHFRPHVIURPE\EORVZKLFKGHQRWHGWKHSDS\UXVSODQWWKDWJUHZLQ
PDUVKHVRUULYHUEDQNVSULPDULO\DORQJWKH1LOH

7KHZRUGWUDQVODWHG³6FULSWXUH´FRPHVIURPWKH*UHHNZRUG JUDSKHZKLFKVLPSO\
PHDQV³ZULWLQJ´,QWKH2OG7HVWDPHQWWKLVZULWLQJZDVUHFRJQL]HGDVFDUU\LQJJUHDW
DXWKRULW\HJ.LQJV&KURQ(]UD1HK7KH³ZULWLQJV´RI
WKH 2OG 7HVWDPHQW ZHUH HYHQWXDOO\ FROOHFWHG LQWR WKUHH JURXSV FDOOHG WKH /DZ

PY
3URSKHWVDQG:ULWLQJVRU3VDOPVDQGFRQVWLWXWHGWKHWKLUW\QLQHERRNVRIWKH2OG
7HVWDPHQW 7KHVH ZULWLQJV²WKH 6FULSWXUHV²ZHUH IRUPDOO\ FRPELQHG LQWR WKH 2OG
O
7HVWDPHQWFDQRQ
C
'S

,QWKH1HZ7HVWDPHQWWKH*UHHNYHUEJUDSKRLVXVHGDERXWQLQHW\WLPHVLQUHIHUHQFH
WRWKH%LEOHZKLOHWKHQRXQIRUPJUDSKHLVXVHGILIW\RQHWLPHVLQWKH1HZ7HVWDPHQW
R

DOPRVWH[FOXVLYHO\RIWKH+RO\6FULSWXUHV
O
TH

'LYLQH2ULJLQRIWKH%LEOH
7KHUHDUHPDQ\HYLGHQFHVWKDWWKH%LEOHLVDQHQWLUHO\XQLTXHERRNTXLWHXQOLNHDQ\
AU

RWKHU ZRUN 7KH XQLTXH FODLPV ZLWKLQ WKH %LEOH LWVHOI EHDU ZLWQHVV WR LWV XQXVXDO
FKDUDFWHU6RPHWKLUW\HLJKWKXQGUHGWLPHVWKH%LEOHGHFODUHV³*RGVDLG´RU³7KXV
VD\VWKH/RUG´HJ([/HY1XP'HXW,VD
-HU(]HNHWF3DXODOVRUHFRJQL]HGWKDWWKHWKLQJVKHZDVZULWLQJZHUHWKH
/RUG¶VFRPPDQGPHQWV&RUDQGWKH\ZHUHDFNQRZOHGJHGDVVXFKE\WKH
EHOLHYHUV  7KHVV  3HWHU SURFODLPHG WKH FHUWDLQW\ RI WKH 6FULSWXUHV DQG WKH
QHFHVVLW\RIKHHGLQJWKHXQDOWHUDEOHDQGFHUWDLQ:RUGRI*RG3HW±-RKQ
WRRUHFRJQL]HGWKDWKLVWHDFKLQJZDVIURP*RGWRUHMHFWKLVWHDFKLQJZDVWRUHMHFW*RG
-RKQ



,Q UHVSRQVH WR WKRVH ZKR ZRXOG UHMHFW WKH DERYHPHQWLRQHG DUJXPHQW LW VKRXOG EH
QRWHGWKDWWKHZULWHUVZKRPDGHWKRVHFODLPVIRUWKH6FULSWXUHZHUHWUXVWZRUWK\PHQ
ZKR GHIHQGHG WKH LQWHJULW\ RI WKH 6FULSWXUH DW JUHDW SHUVRQDO VDFULILFH -HUHPLDK
UHFHLYHGKLVPHVVDJHGLUHFWO\IURPWKH/RUG-HU±\HWEHFDXVHRIKLVGHIHQVH
RIWKH6FULSWXUHVRPHDWWHPSWHGWRNLOOKLP-HUHYHQKLVIDPLO\UHMHFWHGKLP
-HU  &RXQWHUIHLW SURSKHWV ZHUH UHDGLO\ UHFRJQL]HG -HU   ±
+RZHYHU WKH %LEOH¶V FODLPV VKRXOG QRW EH XQGHUVWRRG DV DUJXLQJ LQ D FLUFOH RU E\
FLUFXODUUHDVRQLQJ7KHWHVWLPRQ\RIUHOLDEOHZLWQHVVHV²SDUWLFXODUO\RI-HVXVEXWDOVR
RIRWKHUVVXFKDV0RVHV-RVKXD'DYLG'DQLHODQG1HKHPLDKLQWKH2OG7HVWDPHQW
DQG-RKQDQG3DXOLQWKH1HZ7HVWDPHQW²DIILUPHGWKHDXWKRULW\DQGYHUEDOLQVSLUDWLRQ
RIWKH+RO\6FULSWXUHV

PY

O
'LYLQH5HYHODWLRQRIWKH%LEOH
C
*HQHUDO5HYHODWLRQ
'S

*HQHUDO UHYHODWLRQ DOWKRXJK QRW DGHTXDWH WR SURFXUH VDOYDWLRQ LV QRQHWKHOHVV DQ
R

LPSRUWDQWDQWHFHGHQWWRVDOYDWLRQ*HQHUDOUHYHODWLRQLV*RGUHYHDOLQJFHUWDLQWUXWKV
O

DQG DVSHFWV DERXW +LV QDWXUH WR DOO KXPDQLW\ ZKLFK UHYHODWLRQ LV HVVHQWLDO DQG
TH

SUHOLPLQDU\WR*RG¶VVSHFLDOUHYHODWLRQ
AU

*RG¶V UHYHODWLRQ LQ QDWXUH LV SHUKDSV WKH PRVW SURPLQHQW GHPRQVWUDWLRQ RI JHQHUDO
UHYHODWLRQ3VDOP±DIILUPV+LVUHYHODWLRQWRWKHKXPDQUDFHLQWKHKHDYHQVDV
ZHOODVRQHDUWK7KHSVDOPLVWLQGLFDWHVWKDWWKLVUHYHODWLRQLVFRQWLQXRXV²LWRFFXUV
³GD\WRGD\´DQG³QLJKWWRQLJKW´Y7KLVUHYHODWLRQQHYHUFHDVHV)XUWKHUPRUHLW
LVDZRUGOHVVUHYHODWLRQ³WKHUHLVQRVSHHFKQRUDUHWKHUHZRUGV´Y)LQDOO\LWV
VFRSHLVZRUOGZLGH³7KHLUOLQH>VRXQG@KDVJRQHRXWWKURXJKDOOWKHHDUWK´Y1R
RQHLVH[FOXGHGIURPWKLVUHYHODWLRQRI*RG:KHUHYHUPDQSHHUVDWWKHXQLYHUVHWKHUH
LV RUGHUOLQHVV $W D GLVWDQFH RI QLQHW\WKUHH PLOOLRQ PLOHV IURP WKH HDUWK WKH VXQ
SURYLGHVH[DFWO\WKHULJKWWHPSHUDWXUHHQYLURQPHQWIRUPDQWRIXQFWLRQRQHDUWK:HUH




WKHVXQFORVHULWZRXOGEHWRRKRWWRVXUYLYHDQGZHUHLWIXUWKHUDZD\LWZRXOGEHWRR
FROGIRUPDQWRIXQFWLRQ,IWKHPRRQZHUHFORVHUWKDQWZRKXQGUHGIRUW\WKRXVDQG
PLOHVWKHJUDYLWDWLRQDOSXOORIWKHWLGHVZRXOGHQJXOIWKHHDUWK¶VVXUIDFHZLWKZDWHU
IURP WKH RFHDQV :KHUHYHU PDQ ORRNV LQ WKH XQLYHUVH WKHUH LV KDUPRQ\ DQG RUGHU
6LPLODUO\*RGKDVUHYHDOHG+LPVHOIRQHDUWKY7KHPDJQLILFHQFHRIWKHKXPDQ
ERG\ LVSHUKDSV WKHEHVW HYLGHQFHRI JHQHUDOUHYHODWLRQRQ HDUWK 7KH HQWLUHKXPDQ
ERG\²LWV FDUGLRYDVFXODU V\VWHP WKH ERQH VWUXFWXUH WKH UHVSLUDWRU\ V\VWHP WKH
PXVFOHVWKHQHUYRXVV\VWHPLQFOXGLQJLWVFHQWUHLQWKHEUDLQ²UHYHDOVDQLQILQLWH*RG

5RPDQV ± IXUWKHU GHYHORSV WKH FRQFHSW RI JHQHUDO UHYHODWLRQ 7KH ³LQYLVLEOH
DWWULEXWHV´³HWHUQDOSRZHU´DQG³GLYLQHQDWXUH´RI*RGKDYHEHHQ³FOHDUO\VHHQ´Y

PY
7KHKXPDQUDFHLVUHQGHUHGJXLOW\DQGZLWKRXWH[FXVHWKURXJK*RG¶VUHYHODWLRQ
RI+LPVHOILQQDWXUH7KLVUHYHODWLRQJLYHVPDQNLQGDQDZDUHQHVVRI*RGEXWLVRILWVHOI
O
LQDGHTXDWHWRSURYLGHVDOYDWLRQFIDOVR-RE±3VDOP±,VD±
C
$FWV ± *RG KDV DOVR UHYHDOHG +LPVHOI WR WKH KXPDQ UDFH WKURXJK +LV
'S

SURYLGHQWLDOFRQWURO,WLVWKURXJK+LVSURYLGHQWLDOJRRGQHVVLQVXSSO\LQJSHRSOHZLWK
R

VXQVKLQHDQGUDLQWKDWHQDEOHVWKHPWROLYHDQGIXQFWLRQ0DWW$FWV±
O

3DXOUHPLQGVWKHSHRSOHDW/\VWUDWKDW*RG¶VSURYLGHQWLDOJRRGQHVVZDVDZLWQHVVWR
TH

WKHP$FWV*RG¶VSURYLGHQWLDOFRQWUROLVDOVRHYLGHQWLQ+LVGHDOLQJZLWKWKH

QDWLRQV+HGLVFLSOLQHG+LVGLVREHGLHQWSHRSOH,VUDHO'HXW±EXWZLOODOVR
AU

UHVWRUHWKHP'HXW±+HMXGJHG(J\SWIRUVLQQLQJDJDLQVW,VUDHO([±

+HUDLVHGWKHQDWLRQVWRSRZHUDQGDOVRFDXVHGWKHLUGHPLVH'DQD±

)XUWKHU*RGKDVUHYHDOHG+LPVHOIWKURXJKFRQVFLHQFH5RPDQV±LQGLFDWHV*RG
KDVSODFHGLQWXLWLRQDONQRZOHGJHFRQFHUQLQJ+LPVHOIZLWKLQWKHKHDUWRIPDQ³0DQ
LQWXLWLYHO\NQRZVQRWRQO\WKDW*RGYDOXHVJRRGQHVVDQGDEKRUVHYLOEXWDOVRWKDWKHLV
XOWLPDWHO\DFFRXQWDEOHWRVXFKDULJKWHRXV3RZHU´ :KLOHWKH-HZVZLOOEHMXGJHG
DFFRUGLQJWRWKHZULWWHQODZ*HQWLOHVZKRGRQRWKDYHWKHZULWWHQ/DZZLOOEHMXGJHG


%UXFH$'HPDUHVW*HQHUDO5HYHODWLRQ+LVWRULFDO9LHZVDQG&RQWHPSRUDU\,VVXHV*UDQG5DSLGV=RQGHUYDQS




DFFRUGLQJWRDQXQZULWWHQODZWKHODZRIFRQVFLHQFHZULWWHQRQWKHLUKHDUWV0RUHRYHU
3DXO VD\V WKH FRQVFLHQFH DFWV DV D OHJDO SURVHFXWRU Y  ³&RQVFLHQFH PD\ EH
UHJDUGHG
DVDQLQQHUPRQLWRURUWKHYRLFHRI*RGLQWKHVRXOWKDWSDVVHVMXGJPHQWRQPDQ¶V
UHVSRQVHWRWKHPRUDOODZZLWKLQ´

7DEOH7\SHVRI'LYLQH5HYHODWLRQ

7\SH 0DQLIHVWDWLRQ 6FULSWXUH 6LJQLILFDQFH

 ,Q1DWXUH 3V± 5HYHDOV*RGH[LVWV

5HYHDOV*RG¶VJORU\

PY
*HQHUDO  5RP± 5HYHDOV*RGLVRPQLSRWHQW
O5HYHDOV*RGZLOOMXGJH
C
'S

  0DWW 5HYHDOV *RG LV EHQHYROHQW WR

DOOSHRSOH
R
O

5HYHODWLRQ ,Q3URYLGHQFH $FWV± 5HYHDOV*RGSURYLGHVIRRGIRU

TH

DOOSHRSOH
AU

  'DQ 5HYHDOV *RG UDLVHV XS DQG

UHPRYHVUXOHUV

 ,Q&RQVFLHQFH 5RP± 5HYHDOV *RG KDV SODFHG +LV

ODZ ZLWKLQ WKH KHDUWV RI DOO
SHRSOH

  -RKQ 5HYHDOVZKDWWKH)DWKHULVOLNH




  ,Q&KULVW -RKQ± 5HYHDOV WKH )DWKHU¶V
FRPSDVVLRQ

6SHFLDO  -RKQ  5HYHDOV WKDW WKH )DWKHU JLYHV

 OLIHWRWKRVHZKREHOLHYHLQWKH
6RQ

5HYHODWLRQ ,Q6FULSWXUH 7LP 5HYHDOV DOO WKH GRFWULQH

UHEXNH

FRUUHFWLRQ DQG JXLGDQFH WKDW

WKH

PY
&KULVWLDQ QHHGV IRU JRRG
OOLYLQJ
C
  3HW 5HYHDOV DOO WKDW *RG KDV
'S

FKRVHQ WR GLVFORVH WKURXJK

R

KXPDQDXWKRUVGLUHFWHGE\WKH
O

+RO\6SLULW
TH


AU

6SHFLDO5HYHODWLRQ
6SHFLDOUHYHODWLRQLQYROYHVDQDUURZHUIRFXVWKDQJHQHUDOUHYHODWLRQDQGLVUHVWULFWHG
WR-HVXV&KULVWDQGWKH6FULSWXUHV2IFRXUVHDOOWKDWLVNQRZQRI&KULVWLVWKURXJKWKH
6FULSWXUHVWKHUHIRUHLWFDQEHVDLGWKDWVSHFLDOUHYHODWLRQLVUHVWULFWHGWRWKH6FULSWXUHV

6SHFLDOUHYHODWLRQDVUHIOHFWHGLQWKH6FULSWXUHVLVJLYHQLQSURSRVLWLRQDOVWDWHPHQWV
VRPHWKLQJWKDWQHRRUWKRGR[\GHQLHVLQRWKHUZRUGVLWFRPHVIURPRXWVLGHRIPDQ
QRW IURP ZLWKLQ PDQ 0DQ\ H[DPSOHV UHIOHFW WKH SURSRVLWLRQDO QDWXUH RI VSHFLDO
UHYHODWLRQ³7KHQ*RGVSRNHDOOWKHVHZRUGVVD\LQJ´([³7KHVHDUHWKHZRUGV
RIWKHFRYHQDQW´'HXW³0RVHVILQLVKHGZULWLQJWKHZRUGVRIWKLVODZLQDERRN



XQWLOWKH\ZHUHFRPSOHWH´'HXW³7KHQWKHZRUGRIWKH/RUGFDPHWR-HUHPLDK
DIWHUWKHNLQJKDGEXUQHGWKHVFUROODQGWKHZRUGVZKLFK%DUXFKKDGZULWWHQDWWKH
GLFWDWLRQRI-HUHPLDKVD\LQJµ7DNHDJDLQDQRWKHUVFUROODQGZULWHRQLWDOOWKHIRUPHU
ZRUGVWKDWZHUHRQWKHILUVWVFUROOZKLFK-HKRLDNLPWKHNLQJRI-XGDKEXUQHG¶´-HU
±FIY³WKHJRVSHOZKLFKZDVSUHDFKHGE\PHLVQRWDFFRUGLQJWRPDQ
)RU , QHLWKHU UHFHLYHG LW IURP PDQ QRU ZDV , WDXJKW LW EXW , UHFHLYHG LW WKURXJK D
UHYHODWLRQRI-HVXV&KULVW´*DO±

6SHFLDO UHYHODWLRQ KDV EHHQ QHFHVVLWDWHG EHFDXVH RI PDQ¶V VLQIXO HVWDWH WKURXJK WKH
)DOO,QRUGHUWRUHVWRUHIDOOHQKXPDQLW\WRIHOORZVKLSZLWK+LPVHOILWZDVHVVHQWLDOWKDW
*RG UHYHDO WKH ZD\ RI VDOYDWLRQ DQG UHFRQFLOLDWLRQ KHQFH WKH HVVHQFH RI VSHFLDO

PY
UHYHODWLRQFHQWHUVRQWKH3HUVRQRI-HVXV&KULVW+HLVGLVSOD\HGLQ6FULSWXUHDVWKH2QH
ZKRKDVH[SODLQHGWKH)DWKHU-RKQ$OWKRXJKLQWKHSDVWSHRSOHKDYHQRWVHHQ
O
*RG³-HVXVKDVQRZJLYHQDIXOODFFRXQWRIWKH)DWKHU´-HVXVGHFODUHGWKDWERWK+LV
C
ZRUGV -RKQ  DQG +LV ZRUNV -RKQ  GHPRQVWUDWHG WKDW +H UHYHDOHG WKH
'S

)DWKHU²DQG ERWK +LV ZRUGV DQG +LV ZRUNV DUH DFFXUDWHO\ UHFRUGHG LQ 6FULSWXUH
R

+HEUHZV  LQGLFDWHV &KULVW LV WKH ³UDGLDQFH RI *RG¶V JORU\ DQG WKH H[DFW
O

UHSUHVHQWDWLRQRI+LVQDWXUH´7KHILUVWSKUDVHLQGLFDWHV&KULVWUDGLDWHVWKH6KHNLQDK
TH

JORU\RI*RGZKLOHWKHODWWHUSKUDVHUHYHDOVWKDW&KULVWLVWKHSUHFLVHUHSURGXFWLRQRI
WKH)DWKHU-HVXV&KULVWKDVIXOO\UHYHDOHGWKH)DWKHUWRDVLQIXOKXPDQLW\DQGWKURXJK
AU

+LVUHGHPSWLRQKDVHQDEOHGPDQNLQGWREHUHVWRUHGWRIHOORZVKLSZLWK*RG

%HFDXVHWKH%LEOHLV*RGEUHDWKHG7LPDQGZULWWHQE\PHQFDUULHGDORQJE\

WKH+RO\6SLULW3HWWKH%LEOHLVHQWLUHO\UHOLDEOHDQGDFFXUDWHLQLWVSRUWUD\DO
RI -HVXV &KULVW 7KHUH LV LQ IDFW D FRUUHODWLRQ EHWZHHQ WKH WZR DVSHFWV RI VSHFLDO
UHYHODWLRQWKH6FULSWXUHPD\EHWHUPHGWKHOLYLQJZULWWHQ:RUG+HEZKLOH
-HVXV&KULVWPD\EHGHVLJQDWHGWKHOLYLQJLQFDUQDWH:RUG-RKQ,QWKHFDVH
RI&KULVWWKHUHZDVKXPDQSDUHQWDJHEXWWKH+RO\6SLULWRYHUVKDGRZHGWKHHYHQW/XNH



/HRQ0RUULV7KH*RVSHO$FFRUGLQJWR-RKQ*UDQG5DSLGV(HUGPDQVS



 HQVXULQJ D VLQOHVV &KULVW LQ WKH FDVH RI WKH 6FULSWXUHV WKHUH ZDV KXPDQ
DXWKRUVKLS EXW WKH +RO\ 6SLULW VXSHULQWHQGHG WKH ZULWHUV  3HW  HQVXULQJ DQ
LQHUUDQW:RUG7KH%LEOHDFFXUDWHO\SUHVHQWVWKHVSHFLDOUHYHODWLRQRI*RGLQ&KULVW

,QVSLUDWLRQRIWKH%LEOH
1HFHVVLW\RI,QVSLUDWLRQ
,QVSLUDWLRQLVQHFHVVDU\WRSUHVHUYHWKHUHYHODWLRQRI*RG,I*RGKDVUHYHDOHG+LPVHOI
EXWWKHUHFRUGRIWKDWUHYHODWLRQLVQRWDFFXUDWHO\UHFRUGHGWKHQWKHUHYHODWLRQRI*RG
LVVXEMHFWWRTXHVWLRQ+HQFHLQVSLUDWLRQJXDUDQWHHVWKHDFFXUDF\RIWKHUHYHODWLRQ

'HILQLWLRQRI,QVSLUDWLRQ
,QVSLUDWLRQPD\EHGHILQHGDVWKH+RO\6SLULW¶VVXSHULQWHQGLQJRYHUWKHZULWHUVVRWKDW

PY
ZKLOH ZULWLQJ DFFRUGLQJ WR WKHLU RZQ VW\OHV DQG SHUVRQDOLWLHV WKH UHVXOW ZDV *RG¶V
O
:RUG ZULWWHQ²DXWKRULWDWLYH WUXVWZRUWK\ DQG IUHH IURP HUURU LQ WKH RULJLQDO
C
DXWRJUDSKV6RPHGHILQLWLRQVE\SURPLQHQWHYDQJHOLFDOWKHRORJLDQVDUHDVIROORZV
'S

%HQMDPLQ % :DUILHOG ³,QVSLUDWLRQ LV WKHUHIRUH XVXDOO\ GHILQHG DV D VXSHUQDWXUDO
LQIOXHQFHH[HUWHGRQWKHVDFUHGZULWHUVE\WKH6SLULWRI*RGE\YLUWXHRIZKLFKWKHLU
R

ZULWLQJVDUHJLYHQ'LYLQHWUXVWZRUWKLQHVV´ 
O
TH

(GZDUG-<RXQJ³,QVSLUDWLRQLVDVXSHULQWHQGHQFHRI*RGWKH+RO\6SLULWRYHUWKH
ZULWHUVRIWKH6FULSWXUHVDVDUHVXOWRIZKLFKWKHVH6FULSWXUHVSRVVHVV'LYLQHDXWKRULW\
AU

DQGWUXVWZRUWKLQHVVDQGSRVVHVVLQJVXFK'LYLQHDXWKRULW\DQGWUXVWZRUWKLQHVVDUHIUHH
IURPHUURU´

&KDUOHV&5\ULH³,QVSLUDWLRQLV*RG¶VVXSHULQWHQGHQFHRIWKHKXPDQDXWKRUVVRWKDW
XVLQJWKHLURZQLQGLYLGXDOSHUVRQDOLWLHVWKH\FRPSRVHGDQGUHFRUGHGZLWKRXWHUURU+LV
UHYHODWLRQWRPDQLQWKHZRUGVRIWKHRULJLQDODXWRJUDSKV´



%%:DUILHOG7KH,QVSLUDWLRQDQG$XWKRULW\RIWKH%LEOH3KLODGHOSKLD3UHVE\WHULDQDQG5HIRUPHGS 
(GZDUG-<RXQJ7K\:RUG,V7UXWK*UDQG5DSLGV(HUGPDQVS


&KDUOHV&5\ULH$6XUYH\RI%LEOH'RFWULQH&KLFDJR0RRG\S



7KHUHDUHVHYHUDOLPSRUWDQWHOHPHQWVWKDWEHORQJLQDSURSHUGHILQLWLRQRILQVSLUDWLRQ
WKHGLYLQHHOHPHQW²*RGWKH+RO\6SLULWVXSHULQWHQGHGWKHZULWHUVHQVXULQJWKH
DFFXUDF\RIWKHZULWLQJWKHKXPDQHOHPHQW²KXPDQDXWKRUVZURWHDFFRUGLQJWR
WKHLULQGLYLGXDOVW\OHVDQGSHUVRQDOLWLHVWKHUHVXOWRIWKHGLYLQHKXPDQDXWKRUVKLS
LVWKHUHFRUGLQJRI*RG¶VWUXWKZLWKRXWHUURULQVSLUDWLRQH[WHQGVWRWKHVHOHFWLRQRI
ZRUGVE\WKHZULWHUVLQVSLUDWLRQUHODWHVWRWKHRULJLQDOPDQXVFULSWV

7KH(QJOLVKZRUGLQVSLUDWLRQLQLWVWKHRORJLFDOXVDJHLVGHULYHGIURPWKH/DWLQ9XOJDWH
%LEOHLQZKLFKWKHYHUELQVSLURDSSHDUVLQERWK7LPRWK\DQG3HWHU7KH
ZRUG LQVSLUDWLRQ LV XVHG WR WUDQVODWH WKHRSQHXVWRV D KDSD[ OHJRPHQRQ PHDQLQJ LW
DSSHDUV RQO\ RQFH LQ WKH *UHHN 1HZ 7HVWDPHQW IRXQG LQ  7LPRWK\ 

PY
7KHRSQHXVWRV PHDQV³*RGEUHDWKHG´DQGHPSKDVL]HVWKHH[KDODWLRQRI*RGKHQFH
LQVSLUDWLRQZRXOGEHPRUHDFFXUDWHVLQFHLWHPSKDVL]HVWKDW6FULSWXUHLVWKHSURGXFWRI
O
WKHEUHDWKRI*RG7KH6FULSWXUHVDUHQRWVRPHWKLQJEUHDWKHGLQWRE\*RGUDWKHUWKH
C
6FULSWXUHVKDYHEHHQEUHDWKHGRXWE\*RG
'S


R

)DOVH9LHZVRI,QVSLUDWLRQ
O

1DWXUDOLQVSLUDWLRQ
TH

7KLV YLHZ WHDFKHV WKDW WKHUH LV QRWKLQJ VXSHUQDWXUDO DERXW ELEOLFDO LQVSLUDWLRQ WKH
ZULWHUVRI6FULSWXUHZHUHVLPSO\PHQRIXQXVXDODELOLW\ZKRZURWHWKHERRNVRIWKH
AU

%LEOHLQWKHVDPHZD\WKDWDQLQGLYLGXDOZRXOGZULWHDQ\RWKHUERRN 7KHZULWHUV
ZHUHPHQRIXQXVXDOUHOLJLRXVLQVLJKWZULWLQJRQUHOLJLRXVVXEMHFWVLQWKHVDPHZD\
PHQOLNH6KDNHVSHDUHRU6FKLOOHUZURWHOLWHUDWXUH

6SLULWXDOLOOXPLQDWLRQ
7KHLOOXPLQDWLRQYLHZVXJJHVWVWKDWVRPH&KULVWLDQVPD\KDYHVSLULWXDOLQVLJKWWKDW
DOWKRXJK VLPLODU WR RWKHU &KULVWLDQV LV JUHDWHU LQ GHJUHH ,Q WKLV YLHZ DQ\ GHYRXW


$ODQ5LFKDUGVRQ&KULVWLDQ$SRORJHWLFV1HZ<RUN+DUSHUS5LFKDUGVRQVXJJHVWVWKHUHKDYHEHHQ&KULVWLDQERRNV

ZULWWHQIURPWKHVHFRQGWRWKHWZHQWLHWKFHQWXU\WKDWDUHLQVSLUHGLQSUHFLVHO\WKHVDPHZD\DVWKH%LEOH



&KULVWLDQ LOOXPLQDWHG E\ WKH +RO\ 6SLULW FDQ EH WKH DXWKRU RI LQVSLUHG 6FULSWXUH
$GKHUHQWVWRWKLVYLHZVXJJHVWLWLVQRWWKHZULWLQJVWKDWDUHLQVSLUHGUDWKHULWLVWKH
ZULWHUV ZKR DUH LQVSLUHG 6FKOHLHUPDFKHU WDXJKW WKLV YLHZ RQ WKH &RQWLQHQW ZKLOH
&ROHULGJHSURSRXQGHGLWLQ(QJODQG

3DUWLDORUG\QDPLFLQVSLUDWLRQ
7KHSDUWLDOLQVSLUDWLRQWKHRU\WHDFKHVWKDWWKHSDUWVRIWKH%LEOHUHODWHGWRPDWWHUVRI
IDLWKDQGSUDFWLFHDUHLQVSLUHGZKHUHDVPDWWHUVUHODWHGWRKLVWRU\VFLHQFHFKURQRORJ\
RURWKHUQRQIDLWKPDWWHUVPD\EHLQHUURU,QWKLVYLHZ*RGSUHVHUYHVWKHPHVVDJHRI
VDOYDWLRQDPLGRWKHUPDWHULDOWKDWPD\EHLQHUURU7KHSDUWLDOWKHRU\UHMHFWVERWKYHUEDO
LQVSLUDWLRQWKDWLQVSLUDWLRQH[WHQGVWRWKHZRUGVRI6FULSWXUHDQGSOHQDU\LQVSLUDWLRQ

PY
WKDWLQVSLUDWLRQH[WHQGVWRWKHHQWLUHW\RI6FULSWXUH'HVSLWHWKHSUHVHQFHRIHUURUVLQ
6FULSWXUH SDUWLDO WKHRULVWV WHDFK WKDW DQ LPSHUIHFW PHGLXP LV D VXIILFLHQW JXLGH WR
VDOYDWLRQ$+6WURQJZDVDSURSRQHQWRIWKLVYLHZ
O
C
3UREOHPDWLFTXHVWLRQVPD\EHSRVHGWRDGKHUHQWVRIWKLVYLHZZKDWSDUWVRIWKH%LEOH
'S

DUHLQVSLUHGDQGZKDWSDUWVFRQWDLQHUURUV":KRGHWHUPLQHVZKDWSDUWVRIWKH%LEOHDUH
R

WUXVWZRUWK\DQGZKDWSDUWVFRQWDLQHUURUV"(UUDQWLVWVGLIIHUZLWKRQHDQRWKHURQWKHLU
O

OLVWLQJV RI HUURUV +RZ FDQ GRFWULQH EH VHSDUDWHG IURP KLVWRU\" )RU H[DPSOH WKH
TH

QDUUDWLYHVDERXW-HVXV¶YLUJLQELUWKFRQWDLQERWKKLVWRU\DQGGRFWULQH+RZFDQWKH
%LEOHEHWUXVWZRUWK\LQRQHDUHDZKLOHLQHUURULQDQRWKHUDUHD"
AU

&RQFHSWXDOLQVSLUDWLRQ
7KLVYLHZVXJJHVWVWKDWRQO\WKHFRQFHSWVRULGHDVRIWKHZULWHUVDUHLQVSLUHGEXWQRW
WKHZRUGV,QWKLVYLHZ*RGJDYHDQLGHDRUFRQFHSWWRWKHZULWHUZKRWKHQSHQQHGWKH
LGHDLQKLVRZQZRUGV$FFRUGLQJWRWKLVYLHZWKHUHFDQEHHUURUVLQ6FULSWXUHEHFDXVH
WKHFKRLFHRIZRUGVLVOHIWWRWKHZULWHUDQGLVQRWVXSHULQWHQGHGE\*RG,QUHVSRQVH
KRZHYHU LW LV QRWHG WKDW -HVXV 0DWW  DQG 3DXO  7KHVV  ERWK DIILUPHG

)RUDQH[SDQGHGGLVFXVVLRQVHH$+6WURQJ6\VWHPDWLF7KHRORJ\9DOOH\)RUJH3D-XGVRQSS±


,ELGSS±




YHUEDOLQVSLUDWLRQ3DFKHULJKWO\FRQFOXGHV³,GHDVFDQEHFRQFHLYHGRIDQGWUDQVPLWWHG
RQO\ E\ PHDQV RI ZRUGV ,I WKH WKRXJKW FRPPXQLFDWHG WR PDQ LV GLYLQH DQG RI WKH
QDWXUHRIDUHYHODWLRQWKHIRUPLQZKLFKLWLVH[SUHVVHGLVRISULPHVLJQLILFDQFH,WLV
LPSRVVLEOHWRGLVVRFLDWHWKHRQHIURPWKHRWKHU´

'LYLQHGLFWDWLRQ
7KHGLFWDWLRQYLHZVWDWHVWKDW*RGGLFWDWHGWKHZRUGVRI6FULSWXUHDQGWKHPHQZURWH
WKHPGRZQLQDSDVVLYHPDQQHUEHLQJPHUHDPDQXHQVHVVHFUHWDULHVZKRZURWHRQO\
WKHZRUGVWKH\ZHUH WROGWRZULWH7KLVFODLPZRXOGUHQGHUWKH%LEOHVLPLODUWRWKH
.RUDQZKLFKVXSSRVHGO\ZDVGLFWDWHGLQ$UDELFIURPKHDYHQ$OWKRXJKVRPHSDUWVRI
WKH%LEOHZHUHJLYHQE\GLFWDWLRQFI([³7KHQ*RGVSRNHDOOWKHVHZRUGV´WKH

PY
ERRNVRIWKH%LEOHUHYHDODGLVWLQFWFRQWUDVWLQVW\OHDQGYRFDEXODU\VXJJHVWLQJWKH
DXWKRUV ZHUH QRW PHUH DXWRPDWRQV 7KH EHJLQQLQJ VWXGHQW LQ *UHHN ZLOO TXLFNO\
O
GLVFRYHUWKHGLIIHUHQFHLQVW\OHEHWZHHQWKHJRVSHORI-RKQDQGWKHJRVSHORI/XNH
C
-RKQZURWHLQDVLPSOHVW\OHZLWKDOLPLWHGYRFDEXODU\ZKHUHDV/XNHZURWHZLWKDQ
'S

H[SDQGHGYRFDEXODU\DQGDPRUHVRSKLVWLFDWHGVW\OH,IWKHGLFWDWLRQWKHRU\ZHUHWUXH
R

WKHVW\OHRIWKHERRNVRIWKH%LEOHVKRXOGEHXQLIRUP
O

1HRRUWKRGR[RSLQLRQ
TH

7KHQHRRUWKRGR[YLHZHPSKDVL]HVWKDWWKH%LEOHLVQRWWREHH[DFWO\HTXDWHGZLWKWKH
:RUGRI*RGEHFDXVH*RGGRHVQRWVSHDNLQPHUHSURSRVLWLRQV*RGGRHVQRWUHYHDO
AU

PHUHIDFWVDERXW+LPVHOI+HUHYHDOV+LPVHOI7KH%LEOHLVQRWWKHVXEVWDQFHRIWKH
:RUGRI*RGEXWUDWKHUWKHZLWQHVVWRWKH:RUGRI*RG,WEHFRPHVWKH:RUGRI*RG
DVWKHUHDGHUHQFRXQWHUV&KULVWLQKLVRZQVXEMHFWLYHH[SHULHQFH0RUHRYHUWKH%LEOH
LVHQVKURXGHGLQP\WKQHFHVVLWDWLQJDGHP\WKRORJL]LQJRIWKH%LEOHWRGLVFRYHUZKDW
DFWXDOO\WRRNSODFH7KHKLVWRULFLW\RIWKHHYHQWVLVXQLPSRUWDQW)RUH[DPSOHZKHWKHU
RUQRW&KULVWDFWXDOO\URVHIURPWKHGHDGLQWLPHDQGVSDFHLVXQLPSRUWDQWWRWKHQHR


5HQH3DFKH 7KH,QVSLUDWLRQ $XWKRULW\RI6FULSWXUH&KLFDJR0RRG\S3DFKHJRHVRQWRVD\WKDWXQGHUO\LQJWKH

FRQFHSWXDOYLHZLVWKHUHIXVDOWR³JLYHFUHGHQFHWRWKHDXWKRULW\RIWKHVDFUHGWH[W´S



RUWKRGR[DGKHUHQW7KHLPSRUWDQWWKLQJLVWKHH[SHULHQWLDOHQFRXQWHUWKDWLVSRVVLEOH
HYHQWKRXJKWKH%LEOHLVWDLQWHGZLWKIDFWXDOHUURUV,QWKLVYLHZWKHDXWKRULW\LVWKH
VXEMHFWLYHH[SHULHQFHRIWKHLQGLYLGXDOUDWKHUWKDQWKH6FULSWXUHVWKHPVHOYHV

7RWKHVHYLHZVWKHHYDQJHOLFDO&KULVWLDQUHVSRQGVZLWKFRQWUDVWLQJSRLQWV7KH%LEOH
LVWKHREMHFWLYHDQGDXWKRULWDWLYH:RUGRI*RGZKHWKHURUQRWDSHUVRQUHVSRQGVWRLW
-RKQ   )XUWKHUPRUH WKHUH DUH QR REMHFWLYH FULWHULD IRU HYDOXDWLQJ ZKDW
ZRXOG FRQVWLWXWH D ³OHJLWLPDWH´ HQFRXQWHU ZLWK *RG $GGLWLRQDOO\ ZKR ZRXOG EH
FDSDEOHRIGLVWLQJXLVKLQJP\WKIURPWUXWK"

PY
%LEOLFDO9LHZRI,QVSLUDWLRQ9HUEDO3OHQDU\


&KULVW¶VYLHZRIWKH%LEOH
O
C
,QGHWHUPLQLQJWKHQDWXUHRIELEOLFDOLQVSLUDWLRQQRWKLQJFRXOGEHPRUHVLJQLILFDQWWKDQ
'S

GHWHUPLQLQJWKHYLHZ&KULVWKHOGUHJDUGLQJWKH6FULSWXUHV&HUWDLQO\QRRQHRXJKWWR
R

KROGDORZHUYLHZRI6FULSWXUHWKDQ+HKHOG+LVYLHZRIWKH6FULSWXUHVRXJKWWREHWKH
O

GHWHUPLQDQWDQGWKHQRUPIRURWKHUSHUVRQV¶YLHZV7KDWLVWKHIRXQGDWLRQDODUJXPHQW
TH

RI 5 /DLUG +DUULV ,Q GHIHQGLQJWKH LQVSLUDWLRQRI WKH 6FULSWXUHV KH GRHV QRW XVH
7LPRWK\RU3HWHUDVWKHSULPDU\DUJXPHQWDOWKRXJKKHUHFRJQL]HVWKHLU
AU

YDOLGLW\KHLQVWHDGDUJXHVIURPWKHVWDQGSRLQWRI&KULVW¶VYLHZRIWKH6FULSWXUHV

,QVSLUDWLRQRIWKHZKROH,Q+LVXVHRIWKH2OG7HVWDPHQW&KULVWJDYHFUHGHQFHWR
WKHLQVSLUDWLRQRIWKHHQWLUH2OG7HVWDPHQW,Q0DWWKHZ±&KULVWDIILUPHGWKDW
QRWWKHVPDOOHVWOHWWHURUVWURNHZRXOGSDVVIURPWKHODZXQWLOLWZRXOGEHIXOILOOHG,Q
Y+HUHIHUUHGWRWKHODZRUWKHSURSKHWVDFRPPRQSKUDVHGHVLJQDWLQJWKHHQWLUH


6HHWKHH[FHOOHQWZRUNRI-HVXV¶YLHZRIWKH%LEOHE\5REHUW3/LJKWQHU7KH6DYLRXUDQGWKH6FULSWXUHV3KLODGHOSKLD3UHVE\WHULDQ

5HIRUPHGSS±

5/DLUG+DUULV,QVSLUDWLRQDQG&DQRQLFLW\RIWKH%LEOH*UDQG5DSLGV=RQGHUYDQSII 




2OG7HVWDPHQW,QWKLVUDWKHUVWURQJVWDWHPHQW-HVXVDIILUPHGWKHLQYLRODELOLW\RIWKH
HQWLUH2OG7HVWDPHQWDQGWKHUHE\DIILUPHGWKHLQVSLUDWLRQRIWKHHQWLUH2OG7HVWDPHQW

,Q/XNH-HVXVUHPLQGHGWKHGLVFLSOHVWKDWDOOWKHWKLQJVZULWWHQDERXW+LPLQWKH
/DZRI0RVHVWKHSURSKHWVDQGWKH3VDOPVPXVWEHIXOILOOHG7KHGLVFLSOHVKDGIDLOHG
WRXQGHUVWDQGWKHWHDFKLQJVFRQFHUQLQJWKHGHDWKDQGUHVXUUHFWLRQRI&KULVWLQWKH2OG
7HVWDPHQW EXW EHFDXVH RI WKH LQVSLUDWLRQ RI WKH 2OG 7HVWDPHQW WKRVH SURSKHVLHG
HYHQWVKDGWRWDNHSODFH%\+LVWKUHHIROGGHVLJQDWLRQRIWKH2OG7HVWDPHQW&KULVW
ZDVDIILUPLQJWKHLQVSLUDWLRQDQGDXWKRULW\RIWKHHQWLUH2OG7HVWDPHQW

:KHQ-HVXVGHEDWHGZLWKWKHXQEHOLHYLQJ-HZVFRQFHUQLQJ+LVULJKWWREHFDOOHGWKH
6RQRI*RG+HUHIHUUHGWKHPWR3VDOPDQGUHPLQGHGWKHP³WKH6FULSWXUHFDQQRW

PY
EHEURNHQ´-RKQ³,WPHDQVWKDW6FULSWXUH FDQQRWEHHPSWLHGRILWVIRUFHE\
EHLQJ VKRZQ WR EH HUURQHRXV´ ,W LV QRWHZRUWK\ WKDW -HVXV UHIHUUHG WR D UDWKHU
O
LQVLJQLILFDQWSDVVDJHIURPWKH2OG7HVWDPHQWDQGLQGLFDWHGWKDWWKH6FULSWXUHFRXOG
C
QRWEHVHWDVLGHRUDQQXOOHG
'S

 ,QVSLUDWLRQ RI WKH SDUWV &KULVW TXRWHG IURP WKH 2OG 7HVWDPHQW SURIXVHO\ DQG
R

IUHTXHQWO\+LVDUJXPHQWVKLQJHGRQWKHLQWHJULW\RIWKH2OG7HVWDPHQWSDVVDJH+H
O

ZDVTXRWLQJ%\WKLVPHWKRGRIDUJXPHQWDWLRQ&KULVWZDVDIILUPLQJWKHLQVSLUDWLRQRI
TH

WKHLQGLYLGXDOWH[WVRUERRNVRIWKH2OG7HVWDPHQW$IHZH[DPSOHVZLOOVXIILFH,Q
AU

-HVXV¶HQFRXQWHUZLWK6DWDQDWWKHWLPHRI+LVWHPSWDWLRQ+HUHIXWHGWKHDUJXPHQWVRI
6DWDQ E\ D UHIHUHQFH WR 'HXWHURQRP\ ,Q 0DWWKHZ    -HVXV TXRWHG IURP
'HXWHURQRP\LQGLFDWLQJ6DWDQZDVZURQJDQGHPSKDVL]LQJWKDWWKHVH
ZRUGVZULWWHQLQ'HXWHURQRP\KDGWREHIXOILOOHG,Q0DWWKHZ-HVXVTXRWHGIURP
3VDOPZKLFKWHDFKHVWKDWWKH0HVVLDKZRXOGEHUHMHFWHG,Q0DWWKHZ±



/HRQ0RUULV7KH*RVSHO$FFRUGLQJWR-RKQ*UDQG5DSLGV(HUGPDQVS
  6HH WKH H[FHOOHQW GLVFXVVLRQ RQ -RKQ  LQ % % :DUILHOG 7KH ,QVSLUDWLRQ DQG $XWKRULW\ RI WKH %LEOH 3KLODGHOSKLD
3UHVE\WHULDQ 5HIRUPHGSII



-HVXVTXRWHGIURP,VDLDK±VKRZLQJWKDW+LVSHDFHDEOHJHQWOHGLVSRVLWLRQDQG
+LVLQFOXVLRQRIWKH*HQWLOHVKDGDOOEHHQIRUHWROGLQWKHSURSKHWLFZULWLQJV

7KHVHDUHRQO\VHOHFWHGH[DPSOHVUHYHDOLQJWKDW&KULVWTXRWHGIURPYDULRXVSDUWVRI
WKH2OG7HVWDPHQWDIILUPLQJWKHLULQVSLUDWLRQDQGDXWKRULW\

 ,QVSLUDWLRQ RI WKH ZRUGV ,Q GHIHQGLQJ WKH GRFWULQH RI WKH UHVXUUHFWLRQ WR WKH
6DGGXFHHV-HVXVTXRWHGIURP([RGXVVLJQLILFDQWEHFDXVHWKH6DGGXFHHVKHOGRQO\
WRWKH3HQWDWHXFK³,DPWKH*RGRI$EUDKDP´,QWKLVUHVSRQVH-HVXV¶HQWLUHDUJXPHQW
KLQJHGRQWKHZRUGV³,DP´-HVXVZDVDSSDUHQWO\VXSSO\LQJWKHYHUEZKLFKWKH+HEUHZ
WH[WRQO\LPSOLHV7KXV+HVXSSRUWHGWKH6HSWXDJLQW*UHHNYHUVLRQZKLFKLQFOXGHV
WKHYHUE7KDWYHUVLRQZDVVRKLJKO\UHJDUGHGE\PDQ\RIWKH/RUG¶VFRQWHPSRUDULHV

PY
WKDWLWZDVSUDFWLFDOO\HTXDWHGZLWKWKHRULJLQDO6FULSWXUHV
O
,Q DIILUPLQJ WKH UHVXUUHFWLRQ-HVXVUHPLQGHGWKH 6DGGXFHHV WKDW ([RGXVVDLG ³,
C
DP´+HHODERUDWHG³*RGLVQRWWKH*RGRIWKHGHDGEXWRIWKHOLYLQJ´,IWKHZRUGVRI
'S

WKH2OG7HVWDPHQWZHUHQRWLQVSLUHG+LVDUJXPHQWZDVXVHOHVVEXWLIWKHYHU\ZRUGV
RI WKH 2OG 7HVWDPHQW ZHUH DFWXDOO\ LQVSLUHG WKHQ +LV DUJXPHQW FDUULHG HQRUPRXV
R

ZHLJKW,QIDFW-HVXV¶DUJXPHQWKLQJHVRQWKHSUHVHQWWHQVHRIWKHVWDWHPHQW%HFDXVH
O

LW ZDV ZULWWHQ LQ ([RGXV  ³, $P«´ WKH GRFWULQH RI WKH UHVXUUHFWLRQ FRXOG EH
TH

DIILUPHG*RGLVWKH*RGRIWKHOLYLQJSDWULDUFKV
AU

$VLPLODUH[DPSOHLVIRXQGLQ0DWWKHZZKHUH-HVXVLQGHEDWLQJWKH3KDULVHHV
H[SODLQHGWKDWWKHLUFRQFHSWRI0HVVLDKZDVZURQJ7KH3KDULVHHVWKRXJKWRI0HVVLDK
DVDSROLWLFDOUHGHHPHUEXW-HVXVVKRZVWKHPLQ+LVTXRWDWLRQIURP3VDOPWKDW
'DYLG,VUDHO¶VJUHDWHVWNLQJVDZ0HVVLDKDVJUHDWHUWKDQKLPVHOIFDOOLQJ+LP/RUG
7KHHQWLUHDUJXPHQWRI&KULVWUHVWVRQWKHSKUDVH³P\/RUG´,QTXRWLQJ3VDOP
-HVXVUHVWHG+LVDUJXPHQWRQWKHLQVSLUDWLRQRIWKHSUHFLVHZRUGV³P\/RUG´,I3VDOP
GLGQRWUHDGH[DFWO\³P\/RUG´WKHQ&KULVW¶VDUJXPHQWZDVLQYDLQ$QDGGLWLRQDO
H[DPSOHLV&KULVW¶VXVHRI3VDOPLQ-RKQZKHUH+LVHQWLUHDUJXPHQWUHVWV
RQWKHZRUG³JRGV´



 ,QVSLUDWLRQ RI WKH OHWWHUV ,Q D QXPEHU RI +LV VWDWHPHQWV &KULVW UHYHDOV WKDW +H
EHOLHYHGWKHOHWWHUVRI6FULSWXUHZHUHLQVSLUHG,Q0DWWKHZ-HVXVGHFODUHG³QRW
WKHVPDOOHVWOHWWHURUVWURNHVKDOOSDVVDZD\IURPWKH/DZXQWLODOOLVDFFRPSOLVKHG´
7KH WHUP ³VPDOOHVW OHWWHU´ UHIHUV WR WKH +HEUHZ OHWWHU \RGK ZKLFK ORRNV OLNH DQ
DSRVWURSKH ¶ 7KH ³VWURNH´ UHIHUV WR WKH PLQXWH GLVWLQFWLRQ EHWZHHQ WZR +HEUHZ
OHWWHUV$QHTXLYDOHQWZRXOGEHWKHGLVWLQFWLRQEHWZHHQDQ2DQGD42QO\WKHOLWWOH
³WDLO´GLVWLQJXLVKHVWKH4IURPWKH2-HVXVHPSKDVL]HGWKDWDOOWKHGHWDLOVRIWKH2OG
7HVWDPHQWZULWLQJVZRXOGEHIXOILOOHGGRZQWRWKHYHU\OHWWHU

 ,QVSLUDWLRQRI WKH 1HZ 7HVWDPHQW ,Q WKH 8SSHU 5RRP GLVFRXUVH &KULVW PDGH D
VLJQLILFDQWVWDWHPHQWWKDWVHHPVWRSRLQWWRWKHXOWLPDWHDFFXUDWHUHFRUGLQJRIWKH1HZ

PY
7HVWDPHQWZULWLQJV,Q-RKQ-HVXVLQGLFDWHGWKDWWKH+RO\6SLULWZRXOGSURYLGH
DFFXUDWHUHFDOOIRUWKHDSRVWOHVDVWKH\SHQQHGWKHZRUGVRI6FULSWXUHWKXVJXDUDQWHHLQJ
O
WKHLUDFFXUDF\FI-RKQ±7KLVPD\H[SODLQKRZDQROGPDQVXFKDV-RKQ
C
ZKHQSHQQLQJWKHOLIHRI&KULVWFRXOGDFFXUDWHO\GHVFULEHWKHGHWDLOVRIWKHHYHQWVWKDW
'S

RFFXUUHG\HDUVHDUOLHU7KH+RO\6SLULWJDYH-RKQDQGWKHRWKHUZULWHUVDFFXUDWHUHFDOO
R

RIWKHHYHQWV+HQFH-HVXVDIILUPHGQRWRQO\WKHLQVSLUDWLRQRIWKH2OG7HVWDPHQWEXW
O

DOVRWKH1HZ7HVWDPHQW
TH

$QREYLRXVFRQFOXVLRQLVWKDW-HVXV&KULVWKHOGDYHU\KLJKYLHZRI6FULSWXUHDIILUPLQJ
LWVLQVSLUDWLRQLQWKHHQWLUH2OG7HVWDPHQW±WKHYDULRXVERRNVRIWKH2OG7HVWDPHQWWKH
AU

SUHFLVH ZRUGV WKH DFWXDO OHWWHUV±DQG +H SRLQWHG WR WKH LQVSLUDWLRQ RI WKH 1HZ
7HVWDPHQW6XUHO\WKRVHZKRKROGWRRQO\FRQFHSWXDOLQVSLUDWLRQRURWKHUYDULDQWVQHHG
WRUHFRQVLGHUWKHDWWLWXGHRI-HVXVWRWKH6FULSWXUHV2XJKW+LVYLHZRIWKH%LEOHQRWWR
EHWKHVWDQGDUG",VLWOHJLWLPDWHWRKROGDORZHUYLHZRI6FULSWXUHWKDQ+HKHOG"


)RUDGGLWLRQDOGLVFXVVLRQVVHH5REHUW3/LJKWQHU7KH6DYLRXUDQGWKH6FULSWXUHVSS±DQG&KDUOHV&5\ULH:KDW<RX6KRXOG

.QRZ$ERXW,QHUUDQF\&KLFDJR0RRG\SS±




 3DXO¶VYLHZRIWKH%LEOH
,QVSLUDWLRQRIWKH2OGDQG1HZ7HVWDPHQWV,Q7LPRWK\3DXOSUHIDFHGKLV
UHPDUNVZLWK³WKH6FULSWXUHVD\V´7KHQKHTXRWHGIURP'HXWHURQRP\DQG/XNH
WKHUHE\DVFULELQJWKHVWDWXVRI6FULSWXUHWRERWKWKH2OGDQG1HZ7HVWDPHQWV
3DXOZDVVD\LQJWKDWWKH1HZ7HVWDPHQWLVDVPXFKWKHLQVSLUHG:RUGRI*RGDVWKH
2OG7HVWDPHQW

,QVSLUDWLRQRIWKHZRUGV,Q3DXO¶VFODVVLFVWDWHPHQWIRXQGLQ7LPRWK\WKH
DSRVWOHUHPLQGVWKHUHDGHUWKDWDOO6FULSWXUHLV³LQVSLUHGE\*RG´$VLQGLFDWHGHDUOLHU
³LQVSLUHG E\ *RG´ LV WKH *UHHN ZRUG WKHRSQHXVWRV PHDQLQJ ³*RGEUHDWKHG´ 7KLV
LQGHHG LV DQ LPSRUWDQW YHUVH WR FRQVLGHU LQ WKH HQWLUH VXEMHFW RI LQVSLUDWLRQ DQG

PY
LQHUUDQF\DQGSURSHUO\XQGHUVWRRGUHVROYHVWKHSUREOHP

6HYHUDOWKLQJVVKRXOGEHQRWHG)LUVWVLQFH6FULSWXUHLV*RGEUHDWKHGLWHPSKDVL]HV
O
WKDWWKHRULJLQRI6FULSWXUHLV*RG7KLVLVFRQVLVWHQWZLWKWKH2OG7HVWDPHQWSURSKHWV
C
ZKRUHFHLYHGWKHLUPHVVDJHVIURPWKHPRXWKRI*RGDQGVRLQGLFDWHGE\WKHLUIUHTXHQW
'S

VWDWHPHQWV³7KXVVD\VWKH/RUG´7KXVWKHPHVVDJHVSRNHQE\WKHSURSKHWVZDVWKH
R

PHVVDJHJLYHQWRWKHPE\WKH/RUGFI([±-HUHWF7KHUHIRUHMXVW

O

DVWKHZRUGJLYHQWRWKHSURSKHWVZDVWUXVWZRUWK\DQGUHOLDEOHVRWKH6FULSWXUHVZKLFK
TH

DUH*RGEUHDWKHGDUHWUXVWZRUWK\DQGDFFXUDWHEHFDXVHERWKFRPPXQLFDWLRQVFRPH
IURPWKHPRXWKRI*RG3DXO¶VHPSKDVLVWKHQLVRQWKHRULJLQRIWKH6FULSWXUHVWKDW
AU

ZKLFKLV*RGEUHDWKHGLV³SURGXFHGE\WKHFUHDWLYHEUHDWKRIWKH$OPLJKW\´ 7KHIDFW
WKDWWKHRSQHXVWRVRFFXUVLQWKHSDVVLYHYRLFHDQGQRWWKHDFWLYHIXUWKHUHPSKDVL]HV
WKDW*RGLVWKHRULJLQRIWKH6FULSWXUHVQRWPDQ 

 7KH HQWLUH 6FULSWXUHV DUH *RGEUHDWKHG <RXQJ FODULILHV ³,I 3DXO PHDQV µHYHU\
6FULSWXUH¶ KH LV ORRNLQJ DW WKH YDULRXV SDUWV RI WKH %LEOH WKDW LV KH LV FRQVLGHULQJ
6FULSWXUHGLVWULEXWLYHO\+HLVWKHQVD\LQJWKDWZKDWHYHU6FULSWXUHZHFRQVLGHULWLV


%%:DUILHOG7KH,QVSLUDWLRQDQG$XWKRULW\RIWKH%LEOH3KLODGHOSKLD3UHVE\WHULDQ 5HIRPHGS


6HH(-<RXQJ7K\:RUG,V7UXWKSS±DVZHOODV%%:DUILHOG7KH,QVSLUDWLRQDQG$XWKRULW\RIWKH%LEOHS



LQVSLUHG RI *RG 2Q WKH RWKHU KDQG LI KH PHDQV µDOO VFULSWXUH¶ LW LV FOHDU WKDW KLV
UHIHUHQFHLVWRWKH6FULSWXUHLQLWVHQWLUHW\,QHLWKHUFDVHKHLVVD\LQJWKDWZKDWHYHUPD\
EHFDOOHGµVFULSWXUH¶LVLQVSLUHGRI*RG´

,QDGGLWLRQDOOWKDWLV*RGEUHDWKHGLVDOVRGHVLJQDWHG6FULSWXUH:KLOHWKHGHVLJQDWLRQ
³6FULSWXUH´LQYLVVRPHWLPHVXQGHUVWRRGWRUHIHURQO\WRWKH2OG7HVWDPHQWLWFDQ
EH DUJXHG WKDW 3DXO ZDV XVLQJ WKH GHVLJQDWLRQ ³6FULSWXUH´ QRW RQO\ IRU WKH 2OG
7HVWDPHQWEXWDOVRIRUWKHSRUWLRQVRIWKH1HZ7HVWDPHQWWKDWKDGEHHQZULWWHQE\WKDW
WLPHHJ3DXOPXVWKDYHFRQVLGHUHGWKHJRVSHORI/XNHFDQRQLFDO>7LP@DQG
SHUKDSVHYHQWKHHQWLUH1HZ7HVWDPHQWVRPHRIZKLFKZRXOGEHZULWWHQLQWKHIXWXUH

3DXOFRQFOXGHVWKDWWKH2OGDQG1HZ7HVWDPHQWVDUH*RGEUHDWKHGKDYLQJWKHLURULJLQ

PY
ZLWK*RGQRWPDQ3DXOWKXVDIILUPVKLVEHOLHILQYHUEDOLQVSLUDWLRQ

3HWHU¶VYLHZRIWKH%LEOH
O
C
3HWHU¶VWHDFKLQJFRQFHUQLQJWKH6FULSWXUHVFRLQFLGHVZLWK3DXO¶VWHDFKLQJ,Q3HWHU
'S

3HWHUHPSKDVL]HVWKDWQR6FULSWXUHLVSURGXFHGDVDUHVXOWRIKXPDQZLOOUDWKHU
LWLVWKHSURGXFWRIWKHVXSHULQWHQGLQJSRZHURIWKH+RO\6SLULW3HWHULGHQWLILHVWKH
R

6FULSWXUHV DV ³WKH SURSKHWLF ZRUG´ Y  ³SURSKHF\ RI 6FULSWXUH´ Y  DQG
O

³SURSKHF\´YKHGHFODUHVWKDWWKH6FULSWXUHLV³VRPHWKLQJDOWRJHWKHUUHOLDEOH´ 

TH

,QYHUVH3HWHUH[SODLQVZK\WKH6FULSWXUHLVUHOLDEOH/LNH3DXO3HWHUDIILUPVWKDW
AU

6FULSWXUHKDVLWVRULJLQZLWK*RG$OWKRXJKPHQSHQQHGWKHZRUGVRI6FULSWXUHWKH\
GLGVRDVWKH\ZHUHFDUULHGDORQJ>*NSKHURPHQRL@E\WKH+RO\6SLULW3HWHUWKHUHIRUH
DFNQRZOHGJHVKLVEHOLHILQYHUEDOLQVSLUDWLRQLQDVPXFKDVLWZDVWKH+RO\6SLULWZKR


,ELGS

+:D\QH+RXVH³%LEOLFDO,QVSLUDWLRQLQ7LPRWK\´%LEOLRWKHFD6DFUD-DQXDU\±0DUFK±

:LOOLDP)$UQGWDQG):LOEXU*LQJULFK$*UHHN(QJOLVK/H[LFRQRIWKH1HZ7HVWDPHQWDQG2WKHU(DUO\&KULVWLDQ/LWHUDWXUHQG
HGUHYLVHGE\):LOEXU*LQJULFKDQG)UHGHULFN:'DQNHU&KLFDJR8RI&KLFDJRS

<RXQJVWDWHV³7KHPHQZKRVSDNHIURP*RGDUHVDLGWRKDYHEHHQERUQHE\WKH+RO\6SLULW7KDWLVWKH6SLULWDFWXDOO\OLIWHGWKHP
XSDQGFDUULHGWKHPDORQJDQGWKXVWKH\VSDNH7KH\ZHUHERUQHRUFDUULHGDORQJXQGHUWKHSRZHURIWKH6SLULWDQGQRWE\WKHLURZQ
SRZHU,IDSHUVRQSLFNVXSVRPHWKLQJDQGEHDUVLWKHGRHVLW E\KLVRZQSRZHU7KDWZKLFKLVSLFNHGXSDQGERUQHKRZHYHULV
DEVROXWHO\SDVVLYH,WZDVWKH6SLULWRI*RGZKRERUHWKHP,WZDV+HZKRZDVDFWLYHDQGWKH\ZKRZHUHSDVVLYH7KXV+HERUHWKHP
WRWKHJRDORI+LVRZQGHVLULQJ´(-<RXQJ7K\:RUG,V7UXWKS



JXLGHGWKHZULWHUVRI6FULSWXUHLQWKHLUVHOHFWLRQRIZRUGV7KLVWUXWKFRXOGEHLOOXVWUDWHG
E\DPDQZKRJRHVWRWKHGHSDUWPHQWVWRUHLQDVKRSSLQJFHQWUH%HFDXVHKHLVLQD
KXUU\WRJHWWRWKHVHFRQGIORRUKHZDONVXSWKHHVFDODWRU$OWKRXJKKHLVZDONLQJWKH
HVFDODWRULVFDUU\LQJKLPDORQJEULQJLQJKLPWRWKHVHFRQGIORRU6LPLODUO\DOWKRXJK
WKHZULWHUVRI6FULSWXUHSHQQHGWKHZRUGVDFFRUGLQJWRWKHLUHGXFDWLRQDODELOLWLHVDQG
WKHLU RZQ GLVWLQFWLYH VW\OHV WKH +RO\ 6SLULW ZDV FDUU\LQJ WKHP DORQJ HQVXULQJ WKH
DFFXUDF\RIDOOWKH\ZHUHZULWLQJ

,Q3HWHU3HWHUUHIHUVWR3DXO¶VZULWLQJVDQGLQGLFDWHVWKDWWKHIDOVHWHDFKHUVGLVWRUW
3DXO¶VZULWLQJVDVWKH\ GRWKHUHVWRIWKH6FULSWXUHV,QWKLVUDWKHUXQLTXHVWDWHPHQW
3HWHUSODFHV3DXO¶VZULWLQJVRQDSDUZLWKWKH2OG7HVWDPHQW6FULSWXUHV

PY


([LVWHQFHRI*RG
O
C
&RVPRORJLFDO$UJXPHQW
'S

/RJLFDOO\VSHDNLQJWKHFRVPRORJLFDODUJXPHQWIRUWKHH[LVWHQFHRI*RGLVLQGXFWLYH
R

DQGDSRVWHULRULWKHHYLGHQFHLVH[DPLQHGDQGEDVHGRQLWDFRQFOXVLRQLVGUDZQWKDW
O

*RG H[LVWV 7KH WHUP FRVPRORJLFDO FRPHV IURP WKH *UHHN ZRUG FRVPRV PHDQLQJ
TH

³ZRUOG´7KLVDUJXPHQWLVEDVHGRQWKHIDFWWKDWDFRVPRVRUZRUOGH[LVWV%HFDXVH
VRPHWKLQJFDQQRWFRPHIURPQRWKLQJWKHUHPXVWEHDQRULJLQDOFDXVHWKDWLVWKHUHDVRQ
AU

IRUWKHZRUOG¶VH[LVWHQFH$PDQZHDUVD%XORYDZULVWZDWFK$OWKRXJKKHKDVQHYHU
VHHQDZDWFKPDNHUWKHIDFWRIWKHH[LVWHQFHRIWKHZULVWZDWFKVXJJHVWVWKHUHLVD6ZLVV
ZDWFKPDNHUZKRPDGHWKHZDWFK7KHFRVPRORJLFDODUJXPHQWVD\VWKDWHYHU\HIIHFW
PXVWKDYHDFDXVH



 - 2OLYHU %XVZHOO -U $ 6\VWHPDWLF 7KHRORJ\ RI WKH &KULVWLDQ 5HOLJLRQ *UDQG 5DSLGV =RQGHUYDQ  SS ± %XVZHOO
GLVFXVVHVWKHQHFHVVLW\IRUWKHFRVPRORJLFDODUJXPHQW7KHRQO\RWKHURSWLRQLVWKHHWHUQDOLW\RIWKHXQLYHUVHZKLFKFDQEHUHIXWHG
WKURXJKWKHVHFRQGODZRIWKHUPRG\QDPLFV



 7HOHRORJLFDO$UJXPHQW
$V LQ WKH SUHYLRXV FDVH WKH WHOHRORJLFDO DUJXPHQW LV LQGXFWLYH DQG D SRVWHULRUL
7HOHRORJLFDO FRPHV IURP WKH *UHHN ZRUG WHORV PHDQLQJ ³HQG´ 7KH WHOHRORJLFDO
DUJXPHQW PD\ EH GHILQHG WKXV ³2UGHU DQG XVHIXO DUUDQJHPHQW LQ D V\VWHP LPSO\
LQWHOOLJHQFHDQGSXUSRVHLQWKHRUJDQL]LQJFDXVH7KHXQLYHUVHLVFKDUDFWHUL]HGE\RUGHU
DQGXVHIXODUUDQJHPHQWWKHUHIRUHWKHXQLYHUVH KDVDQLQWHOOLJHQWDQGIUHHFDXVH´
7KHZRUOGHYHU\ZKHUHHYLGHQFHVLQWHOOLJHQFHSXUSRVHDQGKDUPRQ\WKHUHPXVWEHD
PDVWHUDUFKLWHFWEHKLQGDOOWKLVHYLGHQFH7KHSVDOPLVWVHHVWKHPDJQLILFHQFHRI*RG¶V
FUHDWLRQLQWKHXQLYHUVHDQGUHFRJQL]HVWKDWLWWHVWLILHVWR+LVH[LVWHQFH3V±±
 *RG¶V KDUPRQ\ LV REVHUYHG WKURXJKRXW WKH XQLYHUVH DQG ZRUOG WKH VXQ EHLQJ
QLQHW\WKUHHPLOOLRQPLOHVGLVWDQWLVSUHFLVHO\ULJKWIRUDQDGHTXDWHFOLPDWHRQHDUWK

PY
WKHPRRQ¶VGLVWDQFHRIWZRKXQGUHGIRUW\WKRXVDQGPLOHVSURYLGHVWLGHVDWDSURSHU
O
OHYHOWKHHDUWK¶VWLOWSURYLGHVWKHVHDVRQV$FRQFOXVLRQLVFOHDUWKDW*RGWKH0DVWHU
C
'HVLJQHU KDV FUHDWHG WKLV PDJQLILFHQW XQLYHUVH 7KH DOWHUQDWLYH WKDW WKH ZRUOG
KDSSHQHG³E\FKDQFH´LVQRPRUHSRVVLEOHWKDQDPRQNH\¶VEHLQJDEOHWRFUHDWHDZRUN
'S

RI6KDNHVSHDUHRQDW\SHZULWHUE\KDSKD]DUGSOD\RQWKHNH\V
R
O

$QWKURSRORJLFDO$UJXPHQW
TH

7KHDQWKURSRORJLFDODUJXPHQWZKLFKLVDOVRLQGXFWLYHDQGDSRVWHULRULLVEDVHGRQWKH
*UHHNZRUG DQWKURSRVPHDQLQJ³PDQ´&RQWUDU\WRWKHVHFXODUKXPDQLVWZKRVHHV
AU

PDQVLPSO\DVDELRORJLFDOEHLQJWKH%LEOLFLVWVHHVPDQDVFUHDWHGLQWKHLPDJHRI*RG
*HQ±7KHLPDJHRI*RGLQPDQLVVSLULWXDOQRWSK\VLFDOFI(SK&RO
0DQLVQRWVLPSO\DSK\VLFDOEHLQJEXWDOVRDPRUDOEHLQJZLWKDFRQVFLHQFH
LQWHOOHFWHPRWLRQDQGZLOO&KDIHUVWDWHV³7KHUHDUHSKLORVRSKLFDODQGPRUDOIHDWXUHV
LQPDQ¶VFRQVWLWXWLRQZKLFKPD\EHWUDFHGEDFNWRILQGWKHLURULJLQLQ*RG$EOLQG



+HQU\&7KLHVVHQ/HFWXUHVLQ6\VWHPDWLF7KHRORJ\UHYLVHGE\9HUQRQ''RHUNVHQ*UDQG5DSLGV(HUGPDQVS



IRUFHFRXOG QHYHU SURGXFH D PDQ ZLWK LQWHOOHFW VHQVLELOLW\ ZLOO FRQVFLHQFH DQG
LQKHUHQWEHOLHILQD&UHDWRU´

0RUDO$UJXPHQW
7KHPRUDODUJXPHQWLVUHODWHGWRWKHDQWKURSRORJLFDODUJXPHQWVRPHFRPELQHWKHWZR
DQG FDQ EH VHHQ DV D IXUWKHU FRQVLGHUDWLRQ RI WKDW DUJXPHQW 7KH PRUDO DUJXPHQW
DFNQRZOHGJHV WKDW PDQ KDV DQ DZDUHQHVV RI ULJKW DQG ZURQJ D VHQVH RI PRUDOLW\
:KHUHGLGWKLVVHQVHRIPRUDOMXVWLFHFRPHIURP",IPDQLVRQO\DELRORJLFDOFUHDWXUH
ZK\GRHVKHKDYHDVHQVHRIPRUDOREOLJDWLRQ"5HFRJQLWLRQRIPRUDOVWDQGDUGVDQG
FRQFHSWVFDQQRWEHDWWULEXWHGWRDQ\HYROXWLRQDU\SURFHVV7KH%LEOLFLVWUHFRJQL]HVWKDW
*RGKDVSODFHGDVHQVHRIPRUDOMXVWLFHZLWKLQWKHKXPDQUDFHLQFRQWUDGLVWLQFWLRQWR

PY
DOORWKHUFUHDWLRQ5RPDQV±LQGLFDWHVWKDW*HQWLOHVZKRKDYHKDGQRUHYHODWLRQ
RIWKHODZKDYHDQLQQHUPRUDOZLWQHVVSODFHGWKHUHE\*RG
O
2QWRORJLFDO$UJXPHQW
C
7KHRQWRORJLFDODUJXPHQWGLVWLQFWIURPWKHSUHFHGLQJDUJXPHQWVLVGHGXFWLYHDQGD
'S

SULRULLWEHJLQVZLWKDQDVVXPSWLRQDQGWKHQDWWHPSWVWRSURYHWKDWDVVXPSWLRQ,WLV
R

OHVVVLJQLILFDQWWKDQWKHSUHFHGLQJDUJXPHQWV7KHWHUP RQWRORJLFDOFRPHVIURPWKH
O

*UHHNSUHVHQWSDUWLFLSOHRQWRVIURPWKHYHUEHLPLDQGPHDQV³EHLQJ´RU³H[LVWHQFH´

TH

7KHRQWRORJLFDODUJXPHQWLVSKLORVRSKLFDOUDWKHUWKDQLQGXFWLYH7KHDUJXPHQWUHDVRQV
³,IPDQFRXOGFRQFHLYHRID3HUIHFW*RGZKRGRHVQRWH[LVWWKHQKHFRXOGFRQFHLYHRI
AU

VRPHRQHJUHDWHUWKDQ*RGKLPVHOIZKLFKLVLPSRVVLEOH7KHUHIRUH*RGH[LVWV´7KH
DUJXPHQWUHVWVRQWKHIDFWWKDWDOOPHQKDYHDQDZDUHQHVVRI*RG%HFDXVHWKHFRQFHSW
RI*RGLVXQLYHUVDO*RGPXVWKDYHSODFHGWKHLGHDZLWKLQPDQ$QVHOP±
ZDVWKHILUVWSURSRQHQWRIWKLVYLHZ,QWKHWKLQNLQJRIVRPHWKLVDUJXPHQWKDVOLPLWHG
YDOXHDQGIHZZRXOGDIILUPWKHXVHIXOQHVVRIWKHRQWRORJLFDODUJXPHQW



/HZLV6SHUU\&KDIHU6\VWHPDWLF7KHRORJ\YROV'DOODV'DOODV6HPLQDU\



$QWL7KHLVWLF7KHRULHV
$WKHLVWLF9LHZ
7KHWHUPDWKHLVWFRPHVIURPWKH*UHHNZRUGWKHRVPHDQLQJ³*RG´DQGWKHSUHIL[D
*NDOSKDZKLFKLQ*UHHNQHJDWHVWKHSUHFHGLQJVWDWHPHQW7KHUHIRUHLWPHDQVD
QRQEHOLHYHULQ*RG(SKHVLDQVXVHVWKHWHUPWUDQVODWHG³ZLWKRXW*RG´WRH[SODLQ
WKH VWDWXV RI XQVDYHG *HQWLOHV LQ WKHLU UHODWLRQVKLS WRZDUG *RG $WKHLVWV FDQ EH
FODVVLILHGLQWRWKUHHFDWHJRULHVWKHSUDFWLFDODWKHLVWZKROLYHVDVLIWKHUHLVQR
*RGWKHGRJPDWLFDWKHLVWZKRRSHQO\UHSXGLDWHV*RGWKHYLUWXDODWKHLVWZKR
UHMHFWV*RGE\KLVWHUPLQRORJ\HJ3DXO7LOOLFK*RGLVWKH³*URXQGRIDOOEHLQJ´
7KLVFODVVLILFDWLRQZRXOGLQFOXGHWKRVHZKRGHQ\DSHUVRQDO*RG

PY
$JQRVWLF9LHZ
7KHWHUPDJQRVWLFFRPHVIURPWKH*UHHNJQRVLVPHDQLQJ³NQRZOHGJH´DFFRPSDQLHG
E\WKHDSUHIL[7KHUHIRUHDQDJQRVWLFPHDQVRQHZKRODFNVNQRZOHGJHRI*RG+HQFH
O
C
DQ DJQRVWLF LV RQH ZKR VD\V ZH FDQQRW NQRZ WKDW *RG HYHQ H[LVWV 7KH WHUP ILUVW
'S

FRLQHG E\ 7KRPDV +X[OH\ FRYHUV YDU\LQJ GHJUHHV RI VNHSWLFLVP $JQRVWLFV DUH
R

IROORZHUVRISUDJPDWLVPWKHLUEHOLHILQVRPHWKLQJKDVWREHVFLHQWLILFDOO\YHULILDEOH
O

DQGEHFDXVH*RGLVQRWVFLHQWLILFDOO\YHULILDEOHWKH\OHDYH+LPRXWRIWKHLUGLVFXVVLRQ
TH

(YROXWLRQ
(YROXWLRQ LV DQ DQWLVXSHUQDWXUDO DSSURDFK WR OLIH DQG LWV RULJLQ ,W EHJLQV ZLWK WKH
AU

SUHPLVHWKDWWKHUHLVQR*RGDQGWKHQVHHNVWRH[SODLQOLIHDSDUWIURPDQ\LQYROYHPHQW
E\ *RG 7KH LPSOLFDWLRQV DUH VHULRXV LI *RG FUHDWHG PDQ WKHQ PDQ LV D PRUDOO\
UHVSRQVLEOHEHLQJLIPDQLVWKHSURGXFWRIHYROXWLRQWKHQKHLVRQO\ELRORJLFDODQGLV
QRWPRUDOO\UHVSRQVLEOHWRDQ\JRG


 7KLHVVHQ /HFWXUHV LQ 6\VWHPDWLF 7KHRORJ\ SS ± 6HH WKLV ZRUN IRU D UHVSRQVH WR WKH DQWLWKHLVWLF WKHRULHV )RU D IXUWKHU

UHIXWDWLRQDOVRVHH/HZLV6SHUU\&KDIHU6\VWHPDWLF7KHRORJ\±



 3RO\WKHLVP
7KHWHUPSRO\WKHLVPFRPHVIURPWKH*UHHNZRUGSRO\PHDQLQJ³PDQ\´DQGWKHRV
PHDQLQJ³*RG´KHQFHLWLQYROYHVDEHOLHILQPDQ\JRGVRULQ DSOXUDOLW\RI JRGV
+LVWRU\ KDV QRWHG PDQ\ QDWLRQV DQG VRFLHWLHV WKDW ZHUH SRO\WKHLVWLF HDUO\ 5RPDQV
ZHUHDQLPLVWLFWKHSHRSOHRI,QGLDZHUHSDQWKHLVWLFDVZHOODVSRO\WKHLVWLF(J\SWLDQV
ZRUVKLSHGDPXOWLSOLFLW\RIJRGVLQFOXGLQJWKHVXQWKH1LOHIURJVDQGHYHQJQDWV

3DQWKHLVP
3DQWKHLVPPHDQVWKDWHYHU\WKLQJLV*RGDQG*RGLVHYHU\WKLQJ³*RGLVDOODQGDOOLV
*RG´6HQHFDVDLG³:KDWLV*RG"+HLVDOOWKDW\RXVHHDQGDOOWKDW\RXGRQRWVHH´
7KHUHDUHDQXPEHURIGLIIHUHQWIRUPVRISDQWKHLVP PDWHULDOLVWLFSDQWKHLVPKHOGE\

PY
'DYLG6WUDXVVZKLFKEHOLHYHVLQWKHHWHUQLW\RIPDWWHUDQGWKDWPDWWHULVWKHFDXVHRI
DOOOLIHK\OR]RLVPWKHPRGHUQIRUPKHOGE\/HLEQL]ZKLFKKROGVWKDWDOOPDWWHUKDVD
O
SULQFLSOH RI OLIH RU SV\FKLFDO SURSHUWLHV QHXWUDOLVP ZKLFK VD\V WKDW OLIH LV QHXWUDO
C
QHLWKHUPLQGQRUPDWWHULGHDOLVPZKLFKVXJJHVWVWKDWXOWLPDWHUHDOLW\LVUHDOO\PLQG
'S

HLWKHU LQGLYLGXDO PLQG RU LQILQLWH PLQG SKLORVRSKLFDO P\VWLFLVP ZKLFK LV DEVROXWH
R

PRQLVPWHDFKLQJWKDWDOOUHDOLW\LVDXQLW
O

'HLVP
TH

'HLVWVEHOLHYHWKHUHLVQRSHUVRQDO*RGWRZKRPPDQFDQUHODWH$QLPSHUVRQDO*RG
FUHDWHGWKHZRUOGDQGDIWHUZDUGGLYRUFHG+LPVHOIIURPWKHKXPDQUDFHDQGOHIWPDQ
AU

DORQHLQKLVFUHDWHGZRUOG'HLVWVDFNQRZOHGJHRQO\WKHWUDQVFHQGHQFHRI*RGWKH\
GHQ\+LVLPPDQHQFH

$WWULEXWHVRI*RG
7KHFDWHJRUL]DWLRQDQGLGHQWLILFDWLRQRI*RG¶VDWWULEXWHVLVVRPHZKDWDUELWUDU\DVFDQ
EHVHHQE\WKHYDULHW\LQWKHIROORZLQJFKDUW6RPHLGHQWLI\DVHSDUDWHFDWHJRU\DSDUW



&KDIHU6\VWHPDWLF7KHRORJ\
7KLHVVHQ/HFWXUHVLQ6\VWHPDWLF7KHRORJ\SS±6HHWKLVZRUNIRUDUHIXWDWLRQRIWKHYDULRXVIRUPVRISDQWKHLVPDVZHOODV

WKHRWKHUDQWLWKHLVWLFWKHRULHV



IURPDWWULEXWHVIRULGHQWLI\LQJWKH3HUVRQRI*RGOLVWLQJIHDWXUHVVXFKDVVSLULWXDOLW\
SHUVRQDOLW\LPPHQVLW\DQGHWHUQLW\$QXPEHURIWKHRORJLDQVVXFKDV/RXLV%HUNKRI
&KDUOHV+RGJH:LOOLDP6KHGGDQG+HUPDQ%DYLQFNIROORZZLWKVRPHYDULDWLRQVWKH
FDWHJRULHVVHWIRUWKLQWKH:HVWPLQVWHU&RQIHVVLRQ2WKHUVVXFKDV-2OLYHU%XVZHOO
-U DQG &KDUOHV 5\ULH UHIXVH WR FDWHJRUL]H WKH DWWULEXWHV ,W GRHV VHHP KHOSIXO WR
DVVHPEOHWKHFKDUDFWHULVWLFVRI*RGV\VWHPDWLFDOO\

7KHDWWULEXWHVRI*RGPD\EHGHILQHGDV³WKRVHGLVWLQJXLVKLQJFKDUDFWHULVWLFVRIWKH
GLYLQHQDWXUHZKLFKDUHLQVHSDUDEOHIURPWKHLGHDRI*RGDQGZKLFKFRQVWLWXWHWKHEDVLV
DQGJURXQGIRUKLVYDULRXVPDQLIHVWDWLRQVWRKLVFUHDWXUHV´ *RG¶VDWWULEXWHVDUHWREH
GLVWLQJXLVKHGIURP+LVZRUNV*RG¶VDWWULEXWHVGRQRW³DGG´DQ\WKLQJWR*RGWKH\

PY
UHYHDO+LVQDWXUH*RUGRQ/HZLVSURYLGHVDFRPSUHKHQVLYHGHILQLWLRQ

*RGLVDQLQYLVLEOHSHUVRQDODQGOLYLQJ6SLULWGLVWLQJXLVKHGIURPDOORWKHUVSLULWVE\
O
VHYHUDO NLQGV RI DWWULEXWHV PHWDSK\VLFDOO\ *RG LV VHOIH[LVWHQW HWHUQDO DQG
C
XQFKDQJLQJLQWHOOHFWXDOO\*RGLVRPQLVFLHQWIDLWKIXODQGZLVHHWKLFDOO\*RGLVMXVW
'S

PHUFLIXO DQG ORYLQJ HPRWLRQDOO\ *RG GHWHVWV HYLO LV ORQJVXIIHULQJ DQG LV
R

FRPSDVVLRQDWHH[LVWHQWLDOO\*RGLVIUHHDXWKHQWLFDQGRPQLSRWHQWUHODWLRQDOO\*RG
O

LVWUDQVFHQGHQWLQEHLQJLPPDQHQWXQLYHUVDOO\LQSURYLGHQWLDODFWLYLW\DQGLPPDQHQW
TH

ZLWK+LVSHRSOHLQUHGHPSWLYHDFWLYLW\ 
AU

*RG¶VDWWULEXWHVDUHXVXDOO\FODVVLILHGXQGHUWZRFDWHJRULHV7KHSDLUVRIWLWOHVWKDWDUH
XVHGGHSHQGVRQZKLFKRIPDQ\FRQWUDVWVWKHWKHRORJLDQZLVKHVWRHPSKDVL]H0RUH
IUHTXHQW FODVVLILFDWLRQV LQFOXGH DEVROXWH DQG UHODWLYH LQFRPPXQLFDEOH DQG
FRPPXQLFDEOHLQWUDQVLWLYHDQGWUDQVLWLYHRUPRUDODQGQRQPRUDO,QWKHVWXG\RI
*RG¶VDWWULEXWHVLWLVLPSRUWDQWQRWWRH[DOWRQHDWWULEXWHRYHUDQRWKHUZKHQWKDWLV
GRQHLWSUHVHQWVDFDULFDWXUHRI*RG,WLVDOOWKHDWWULEXWHVRI*RGWDNHQWRJHWKHUWKDW



$+6WURQJ6\VWHPDWLF7KHRORJ\9DOOH\)RUJH3D-XGVRQS
*RUGRQ5/HZLV³*RG$WWULEXWHVRI´LQ:DOWHU$(OZHOOHG(YDQJHOLFDO'LFWLRQDU\RI7KHRORJ\*UDQG5DSLGV%DNHU

S



SURYLGHDQXQGHUVWDQGLQJRIWKHQDWXUHDQG3HUVRQRI*RG$VDOUHDG\LQGLFDWHGWKH
IROORZLQJFDWHJRUL]DWLRQZKLFKIROORZVWKHGLYLVLRQVRI$+ 6WURQJLVVRPHZKDW
DUELWUDU\OLNHDQ\RWKHUOLVWLQJ

$EVROXWH$WWULEXWHV
6SLULWXDOLW\
*RGLVVSLULWQRWDVSLULWZKRGRHVQRWKDYHFRUSRUHLW\RUSK\VLFDOIRUP-RKQ
$ERG\ORFDOL]HVEXW*RGDVVSLULWLVHYHU\ZKHUH+HFDQQRWEHOLPLWHG$OWKRXJK*RG
GRHVQRWKDYHDERG\+HLVQRQHWKHOHVVDVXEVWDQFHEXWQRWPDWHULDO6SLULWXDOLW\JRHV
IXUWKHUWKDQVLPSO\LGHQWLI\LQJ*RGDVQRWKDYLQJDERG\LWDOVRPHDQV+HLVWKHVRXUFH
RIDOOOLIH7KHSURKLELWLRQRI ([RGXVZDVJLYHQEHFDXVH*RGGRHVQRWKDYHD

PY
SK\VLFDOIRUPKHQFHLWLVZURQJWRPDNHDQ\OLNHQHVVRI+LP7KHPDQ\UHIHUHQFHV
WR *RG¶V SK\VLFDO IHDWXUHV FI *HQ   .LQJV  3V  ,VD  DUH
O
DQWKURSRPRUSKLVPV ILJXUDWLYH ODQJXDJH JLYLQJ *RG KXPDQ FKDUDFWHULVWLFV XVHG WR
C
DWWHPSWWRPDNH+LPXQGHUVWDQGDEOH
'S

6HOIH[LVWHQFH
R

*RG¶VVHOIH[LVWHQFHPHDQV³+HKDVWKHJURXQGRI+LVH[LVWHQFHLQ+LPVHOI«*RGLV
O

LQGHSHQGHQW LQ +LV %HLQJ EXW DOVR+H LV LQGHSHQGHQW LQ HYHU\WKLQJ HOVH LQ +LV
TH

YLUWXHVGHFUHHVZRUNVDQG«FDXVHVHYHU\WKLQJWRGHSHQGRQ+LP´ ([RGXV
HPSKDVL]HV+LVVHOIH[LVWHQFHLQ+LVLGHQWLILFDWLRQ³,$0:+2,$0´7KHYHUEWR
AU

EHHPSKDVL]HV+HKDVFRQWLQXDOH[LVWHQFHLQ+LPVHOI-RKQIXUWKHUVWUHVVHVWKDW
WKH)DWKHUKDVOLIHLQ+LPVHOI$QXQERUQFKLOGLVGHSHQGHQWRQLWVPRWKHU IRU OLIH
DQLPDOVDUHGHSHQGHQWRQWKHLUVXUURXQGLQJVIRUOLIHWUHHVDQGSODQWVDUHGHSHQGHQWRQ
VXQDQGUDLQIRUOLIHHYHU\OLYLQJWKLQJLVGHSHQGHQWRQVRPHRQHRUVRPHWKLQJHOVHEXW
*RGLVLQGHSHQGHQWDQGH[LVWHQWLQ+LPVHOI'DQ$FWV



/RXLV%HUNKRI6\VWHPDWLF7KHRORJ\*UDQG5DSLGV(HUGPDQVS



 ,PPXWDELOLW\
,PPXWDELOLW\³LVWKDWSHUIHFWLRQRI*RGE\ZKLFK+HLVGHYRLGRIDOOFKDQJHQRWRQO\
LQ+LV%HLQJEXWDOVRLQ+LVSHUIHFWLRQVDQGLQ+LVSXUSRVHVDQGSURPLVHVDQGLVIUHH
IURP DOO DFFHVVLRQ RU GLPLQXWLRQ DQG IURP DOO JURZWK RU GHFD\ LQ +LV %HLQJ RU
SHUIHFWLRQV´ &KDQJH LV DOZD\V IRU EHWWHU RU IRU ZRUVH EXW VLQFH *RG LV DEVROXWH
SHUIHFWLRQLPSURYHPHQWRUGHWHULRUDWLRQDUHLPSRVVLEOHIRU+LP0DODFKLWHDFKHV
WKHGRFWULQHRILPPXWDELOLW\³,WKH/RUGGRQRWFKDQJH´-DPHVLQGLFDWHVWKHUH
LVQRYDULDWLRQRUVKLIWLQJVKDGRZZLWK*RG7KHUHLVFKDQJHWKURXJKRXWWKHZRUOGIURP
\HDUWR\HDUEXW*RGGRHVQRWFKDQJHLQ+LV3HUVRQQRULQ+LVUHVSRQVHWR+LVFUHDWXUHV
7KHYDOXHRIWKLVGRFWULQHLVHQRUPRXVVLQFH*RGGRHVQRWFKDQJH+LVORYHDQG+LV
SURPLVHVIRUHYHUUHPDLQFHUWDLQ)RUH[DPSOH+HZLOOQHYHUFKDQJHFRQFHUQLQJ+LV

PY
SURPLVHLQ-RKQ

8QLW\
O
C
7ZRWKRXJKWVDUHH[SUHVVHGLQWKHXQLW\RI*RG)LUVWLWHPSKDVL]HVWKDW*RGLVRQH
'S

QXPHULFDOO\,WZDVWKLVEHOLHIWKDWVHW,VUDHODSDUWIURPKHU SRO\WKHLVWLF QHLJKERXUV

R

3DUW RI ,VUDHO¶V GDLO\ ZRUVKLS ZDV WKH UHFLWDWLRQ RI WKH 6KHPD 'HXW  ZKLFK
O

DIILUPHG³+HDU2,VUDHO7KH/RUGLVRXU*RGWKH/RUGLVRQH´7KLVVWDWHPHQWZDV
TH

DGHFODUDWLRQRIPRQRWKHLVPDIILUPLQJWKDW*RGLVRQHLQ+LVHVVHQFHDQGFDQQRWEH
GLYLGHG ,W DOVR DIILUPHG +LP DV DEVROXWHO\ XQLTXH WKHUH LV QRQH RWKHU WKDW FDQ EH
AU

FRPSDUHGZLWK+LPFI([7KHHPSKDVLVRQ*RGDVQXPHULFDOO\RQHLVDOVR

VWUHVVHGLQ7LPRWK\DQG&RULQWKLDQV6HFRQGWKHXQLW\RI*RGVWUHVVHVWKDW
*RGLVQRWDFRPSRVLWHDQGFDQQRWEHGLYLGHGLQWRSDUWV7KHVWDWHPHQWVWUHVVHVWKH
³LQQHUDQGTXDOLWDWLYHXQLW\´RI*RG%HFDXVHWKH/RUGDORQHLV*RGQRQHRWKHULVWR
VKDUH+LVJORU\KHQFHWKHSURKLELWLRQ³*XDUG\RXUVHOYHVIURPLGROV´-RKQ



,ELG

65'ULYHU$&ULWLFDODQG([HJHWLFDO&RPPHQWDU\RQ'HXWHURQRP\LQ7KH,QWHUQDWLRQDO&ULWLFDO&RPPHQWDU\UGHG(GLQEXUJK
&ODUNS

%HUNKRI6\VWHPDWLF7KHRORJ\S



 7UXWK
7UXWK PHDQV WKDW WKH IDFWV FRQIRUP WR UHDOLW\ WUXWK LGHQWLILHV WKLQJV DV WKH\ DUH
3URSHUO\GHILQHGLQUHODWLRQWR*RGWUXWKLV³WKDWSHUIHFWLRQRI+LVEHLQJE\YLUWXHRI
ZKLFK +H IXOO\ DQVZHUV WR WKH LGHD RI WKH *RGKHDG LV SHUIHFWO\ UHOLDEOH LQ +LV
UHYHODWLRQDQGVHHVWKLQJVDVWKH\UHDOO\DUH´)LUVWLWPHDQV+HLVWKHWUXH*RGLQ
GLVWLQFWLRQWRDOORWKHUVWKHUHLVQRQHOLNH+LP,VD±VHFRQG+HLVWKH
WUXWKLQWKDW+LV:RUGDQG+LVUHYHODWLRQDUHUHOLDEOH1XP5RP±-RKQ
+HE7LWXV+HFDQEHWUXVWHG7KLUG+HNQRZVWKLQJVDVWKH\DUH
+HLVWKHEHJLQQLQJRIDOONQRZOHGJHDQGPDNHVLWDYDLODEOHWRPDQLQRUGHUWKDWPDQ
PD\KDYHIHOORZVKLSZLWK+LP+HLVWKHWUXWKLQDFRPSUHKHQVLYHVHQVH³+HLVWKH
VRXUFHRIDOOWUXWKQRWRQO\LQWKHVSKHUHRIPRUDOVDQGUHOLJLRQEXWDOVRLQHYHU\ILHOG

PY
RIVFLHQWLILFHQGHDYRXU´

/RYH
O
C
)LUVW -RKQ  LQGLFDWHV ³*RG LV ORYH´ ZKLOH YHUVH  H[SODLQV KRZ WKDW ORYH LV
'S

GLVSOD\HG³,QWKLVLVORYHQRWWKDWZHORYHG*RGEXWWKDW+HORYHGXVDQGVHQW+LV
R

6RQ WR EH WKH SURSLWLDWLRQ IRU RXU VLQV´ 7KXV *RG¶V ORYH PD\ EH GHILQHG DV ³WKDW
O

SHUIHFWLRQ RI WKH GLYLQH QDWXUH E\ ZKLFK *RG LV HWHUQDOO\ PRYHG WR FRPPXQLFDWH
TH

KLPVHOI ,W LV QRW D PHUH HPRWLRQDO LPSXOVH EXW D UDWLRQDO DQG YROXQWDU\ DIIHFWLRQ
KDYLQJLWVJURXQGLQWUXWKDQGKROLQHVVDQGLWVH[HUFLVHLQIUHHFKRLFH´7KH*UHHN
AU

WHUPDJDSHWUDQVODWHG³ORYH´LVIUHTXHQWO\XVHGWRGHQRWH*RGDQG+LVUHVSRQVHWR
KXPDQLW\FI-RKQ5RP-RKQ5HY 
$JDSH GHQRWHV D UHDVRQHGRXW ORYH UDWKHU WKDQ DQ HPRWLRQDOO\EDVHG ORYH EXW QRW



,ELGS

,ELG

7KLHVVHQ/HFWXUHVLQ6\VWHPDWLF7KHRORJ\S
6HH/HRQ0RUULV7HVWDPHQWVRI/RYH*UDQG5DSLGV(HUGPDQVIRUDGHILQLWLYHGLVFXVVLRQRIWKHELEOLFDOQDWXUHDQGPHDQLQJ

RIORYH



GHYRLGRIHPRWLRQ²RQHWKDWORYHVWKHREMHFWLUUHVSHFWLYHRIWKHZRUWKRIWKHREMHFW
DQGHYHQWKRXJKWKHORYHPD\QRWEHUHFLSURFDWHG

+ROLQHVV
7KH EDVLF PHDQLQJ RI KROLQHVV LV ³VHW DSDUW´ RU ³VHSDUDWLRQ´ +HE THGRVK *N
KDJLD]R0DQ\VHHKROLQHVVDVWKHIRUHPRVWDWWULEXWHRIDOOEHFDXVHKROLQHVVSHUYDGHV
DOOWKHRWKHUDWWULEXWHVRI*RGDQGLVFRQVLVWHQWZLWKDOO+HLVDQGGRHV

6HYHUDOIHDWXUHVDUHHPEUDFHGLQWKHKROLQHVVRI*RG,WKDVDWUDQVFHQGHQWHPSKDVLV
LQGLFDWLQJ³+HLVDEVROXWHO\GLVWLQFWIURPDOO+LVFUHDWXUHVDQGLVH[DOWHGDERYHWKHP
LQLQILQLWHPDMHVW\´([RGXVH[SODLQVWKDWLQ+LVKROLQHVV*RGLVZLWKRXWSHHU
DQGDZHVRPH²UHYHDOHGLQWKHPDUYHOORXVZD\+HGHOLYHUHG,VUDHOIURPWKH(J\SWLDQV

PY
,VDLDKGHVFULEHV+LVWUDQVFHQGHQFH+HLV³KLJKDQGH[DOWHG´OLYLQJRQD³KLJK
DQGKRO\SODFH´,WKDVDQHWKLFDOHPSKDVLVLQGLFDWLQJ³+HLVVHSDUDWHIURPPRUDOHYLO
O
RU VLQ µ+ROLQHVV¶ SRLQWV WR *RG¶V PDMHVWLF SXULW\ RU HWKLFDO PDMHVW\´  7KH
C
IRXQGDWLRQRIWKLVHPSKDVLVLV/HYLWLFXV³%HKRO\IRU,DPKRO\´%HFDXVH
'S

*RGLVPRUDOO\SXUH+HFDQQRWFRQGRQHHYLORUKDYHDQ\UHODWLRQVKLSWRLW3V±
R

,Q+LVKROLQHVV*RGLVWKHPRUDODQGHWKLFDOVWDQGDUG+HLVWKHODZ+HVHWVWKH
O

VWDQGDUG
TH


AU



%HUNKRI6\VWHPDWLF7KHRORJ\S
,ELG


:P*76KHGG'RJPDWLF7KHRORJ\YROV5HSULQW1DVKYLOOH1HOVRQ±



7DEOH7KH$WWULEXWHVRI*RG9DULHWLHVRI&DWHJRUL]DWLRQ

7KHRORJLDQV &DWHJRULHV $WWULEXWHV

+HQU\&7KLHVVHQ 1RQPRUDO 2PQLSUHVHQFH 2PQLVFLHQFH

2PQLSRWHQFH,PPXWDELOLW\

9HUQRQ ' 0RUDO +ROLQHVV 5LJKWHRXVQHVV DQG -XVWLFH

'RHUNVHQ *RRGQHVVDQG0HUF\7UXWK

$XJXVWXV +RSNLQV $EVROXWH,PPDQHQW 6SLULWXDOLW\/LIH3HUVRQDOLW\

6WURQJ
,QILQLW\ 6HOI([LVWHQFH ,PPXWDELOLW\

PY
8QLW\

3HUIHFWLRQ7UXWK/RYH+ROLQHVV
O
C
 5HODWLYH7UDQVLWLYH 5HODWHG WR WLPH DQG VSDFH (WHUQLW\
,PPHQVLW\
'S
R

5HODWHG WR FUHDWLRQ 2PQLSUHVHQFH

O

2PQLVFLHQFH2PQLSRWHQFH
TH

5HODWHG WR PRUDO EHLQJV 7UXWK DQG

)DLWKIXOQHVV 0HUF\ DQG *RRGQHVV
AU

7UDQVLWLYH /RYH -XVWLFH DQG

5LJKWHRXVQHVV7UDQVLWLYH+ROLQHVV

:LOOLDP * 7 ,QFRPPXQLFDEOH 6KHGG+RGJH 6HOI([LVWHQFH

6KHGG 6LPSOLFLW\ ,QILQLW\ (WHUQLW\
,PPXWDELOLW\
&KDUOHV+RGJH

/RXLV%HUNKRI




 +HUPDQ%DYQLFN %HUNKRI 6HOI([LVWHQFH ,PPXWDELOLW\
8QLW\ ,QILQLW\ 3HUIHFWLRQ (WHUQLW\
,PPHQVLW\

%DYQLFN ,QGHSHQGHQFH 6HOI

6XIILFLHQF\ ,PPXWDELOLW\ ,QILQLW\
(WHUQLW\ ,PPHQVLW\ 2PQLSUHVHQFH
2QHQHVV1XPHULFDO4XDOLWDWLYH

 &RPPXQLFDEOH 6KHGG+RGJH :LVGRP %HQHYROHQFH

+ROLQHVV-XVWLFH&RPSDVVLRQ7UXWK

PY
%HUNKRI

6SLULWXDOLW\ ,QWHOOHFWXDO .QRZOHGJH

O
:LVGRP 9HUDFLW\ 0RUDO *RRGQHVV
C
/RYH *UDFH 0HUF\ /RQJVXIIHULQJ
'S

+ROLQHVV 5LJKWHRXVQHVV 5HPXQHUDWLYH

R

-XVWLFH5HWULEXWLYH-XVWLFH6RYHUHLJQW\
O

6RYHUHLJQ:LOO6RYHUHLJQ3RZHU
TH

%DYQLFN
AU

/LIH$QG6SLULW6SLULWXDOLW\,QYLVLELOLW\
3HUIHFW ,Q 6HOI&RQVFLRXVQHVV
.QRZOHGJH 2PQLVFLHQFH :LVGRP
9HUDFLW\ (WKLFDO 1DWXUH *RRGQHVV
5LJKWHRXVQHVV +ROLQHVV /RUG .LQJ
6RYHUHLJQ :LOO )UHHGRP
2PQLSRWHQFH $EVROXWH %OHVVHGQHVV
3HUIHFWLRQ%OHVVHGQHVV*ORU\




 0LOODUG-(ULFNVRQ *UHDWQHVV 6SLULWXDOLW\ 3HUVRQDOLW\ /LIH ,QILQLW\
&RQVWDQF\

 *RRGQHVV 0RUDO 3XULW\ +ROLQHVV 5LJKWHRXVQHVV

-XVWLFH,QWHJULW\*HQXLQHQHVV9HUDFLW\
)DLWKIXOQHVV/RYH%HQHYROHQFH*UDFH
0HUF\3HUVLVWHQFH

 0HWDSK\VLFDOO\ 6HOIH[LVWHQW(WHUQDO8QFKDQJLQJ

*RUGRQ5/HZLV ,QWHOOHFWXDOO\ 2PQLVFLHQW)DLWKIXO:LVH

 (WKLFDOO\ +RO\5LJKWHRXV/RYLQJ

PY
 (PRWLRQDOO\ 'HWHVWV HYLO /RQJVXIIHULQJ
O
&RPSDVVLRQDWH
C
 ([LVWHQWLDOO\ )UHH$XWKHQWLF2PQLSRWHQW
'S

 5HODWLRQDOO\ 7UDQVFHQGHQWLQEHLQJ
R
O

,PPDQHQW XQLYHUVDOO\ LQ SURYLGHQWLDO

TH

DFWLYLW\

,PPDQHQWZLWK+LVSHRSOHLQUHGHPSWLYH
AU

DFWLYLW\




 5HODWLYH$WWULEXWHV
6RPHDWWULEXWHVPD\EHWHUPHG³UHODWLYH´EHFDXVHWKH\DUHUHODWHGWRWLPHDQGVSDFH

(WHUQLW\
7KHHWHUQLW\RI*RGLVXVXDOO\XQGHUVWRRGDVUHODWHGWRWLPH%\GHILQLWLRQLWPHDQVWKDW
*RGLVQRWOLPLWHGRUERXQGE\WLPHZLWK*RGWKHUHLVQRVXFFHVVLRQRIHYHQWV+HLV
DERYHDOOWHPSRUDOOLPLWDWLRQV³:LWK+LPWKHUHLVQRGLVWLQFWLRQEHWZHHQWKHSUHVHQW
SDVWDQGIXWXUHEXWDOOWKLQJVDUHHTXDOO\DQGDOZD\VSUHVHQWWR+LP´ +LVHWHUQLW\
LV H[SUHVVHGLQ3VDOP  ³IURP HYHUODVWLQJWRHYHUODVWLQJ 7KRX DUW *RG´ *RG¶V
HWHUQLW\H[WHQGVEDFNZDUGWRLQILQLW\DQGIRUZDUGWRLQILQLW\0RUHRYHU*RG¶VHWHUQLW\
LV DOVR UHODWHG WR +LV HWHUQDO UXOH LQ +LV XQLYHUVDO NLQJGRP 3V  *RG¶V

PY
HWHUQLW\LVDOVRUHODWHGWR+LVQDPH,Q([RGXV+HLQIRUPHG0RVHVWKDW+LVQDPH
LV³,$0:+2,$0´6RPHVFKRODUVUHODWH+LVQDPH/RUGYWR³,$0:+2
O
,$0´DQGWRWKHSUHVHQWWHQVHRIWKH+HEUHZYHUE KD\DKPHDQLQJ³WREH´+HQFH
C
*RG¶VQDPHUHIOHFWV+LVHWHUQLW\LQWKDW+HLVWKH³FRQWLQXDOO\H[LVWLQJ2QH´+RZHYHU
'S

WKLVLVQRW WRVXJJHVW WKDW WLPH LV XQUHDO RU QRQH[LVWHQW ZLWK *RG :KLOH *RGVHHV
R

HYHU\WKLQJDVDQHWHUQDOQRZ+HQRQHWKHOHVVLQUHODWLRQWRPDQDQGFUHDWLRQVHHVD
O

VXFFHVVLRQRIHYHQWVLQWLPH
TH

,PPHQVLW\
,PPHQVLW\ PD\ EH GHILQHG DV ³WKDW SHUIHFWLRQ RI WKH 'LYLQH %HLQJ E\ ZKLFK +H
AU

WUDQVFHQGVDOOVSDWLDOOLPLWDWLRQVDQG\HWLVSUHVHQWLQHYHU\SRLQWRIVSDFHZLWK+LV
ZKROH%HLQJ´)LUVW.LQJVHPSKDVL]HVWKLVWUXWKFIDOVR,VD-HU
 $FWV   6RORPRQ GHFODUHG ³+HDYHQ DQG KLJKHVW KHDYHQ FDQQRW FRQWDLQ
7KHH´6RORPRQKDGEXLOWDPDJQLILFHQWWHPSOHWRWKH/RUGEXWUHFRJQL]HGWKDW*RG
FRXOGQRWEHFRQWDLQHGLQDWHPSOH8QOLNHKXPDQERGLHVWKDWDUHERXQGHGDQGOLPLWHG



&KDUOHV+RGJH6\VWHPDWLF7KHRORJ\YROV5HSULQW/RQGRQ&ODUNH

6HH$OYD-0F&ODLQ7KH*UHDWQHVVRIWKH.LQJGRP&KLFDJR0RRG\SS±IRUDGLVFXVVLRQWUDFLQJ*RG¶VXQLYHUVDO
NLQJGRPWKURXJKRXWHWHUQLW\

%HUNKRI6\VWHPDWLF7KHRORJ\S



WRVSDFH*RGLQ+LVLPPHQVLW\LVQRWOLPLWHGRUORFDOL]HG,Q+LVHQWLUH%HLQJ+HILOOV
DOOSODFHVEXWQRWWRWKHVDPHGHJUHH³+HGRHVQRWGZHOORQHDUWKDV+HGRHVLQKHDYHQ
LQDQLPDOVDV+HGRHVLQPDQLQWKHLQRUJDQLFDV+HGRHVLQWKHRUJDQLFFUHDWLRQLQ
WKHZLFNHGDV+HGRHVLQWKHSLRXVQRULQWKH&KXUFKDV+HGRHVLQ&KULVW´ 7KHUH
DUHDOVRUHODWLYHDWWULEXWHVWKDWDUHUHODWHGWRFUHDWLRQWKDWLVWKH\UHYHDOVRPHDVSHFWV
RI*RG¶VSHUVRQLQ+LVGHDOLQJVZLWKSHRSOHDQGFUHDWLRQ

2PQLSUHVHQFH
,QWKHQH[WWKUHHDWWULEXWHVWKHSUHIL[RPQLFRPHVIURPWKH/DWLQZRUGRPQLVPHDQLQJ
³DOO´7KXVRPQLSUHVHQFHPHDQV*RGLVHYHU\ZKHUHSUHVHQWWKLVLVFRQWUDVWHGZLWK
SDQWKHLVPZKLFKVWDWHVWKDW*RGLV LQHYHU\WKLQJ0RUHVSHFLILFDOO\RPQLSUHVHQFH

PY
PD\EHGHILQHGDV³*RGLQWKHWRWDOLW\RIKLVHVVHQFHZLWKRXWGLIIXVLRQRUH[SDQVLRQ
PXOWLSOLFDWLRQRUGLYLVLRQSHQHWUDWHVDQGILOOVWKHXQLYHUVHLQDOOLWVSDUWV´ 3VDOP
O
±H[SODLQVWKHRPQLSUHVHQFHRI*RG)URPWKHKLJKHVWKHDYHQWRWKHGHSWKVRI
C
WKHHDUWKDQGVHD²*RGLVHYHU\ZKHUHSUHVHQW7KHUHLVQRHVFDSLQJ*RG¶VSUHVHQFH
'S

,QWKHGHILQLWLRQLWLVQRWHGWKDW*RGLVSUHVHQWHYHU\ZKHUHLQWKHWRWDOLW\RI+LVSHUVRQ
R

7KLVGHILQLWLRQPLOLWDWHVDJDLQVWWKHLGHDWKDW*RGLVLQKHDYHQDQGRQO\+LVSRZHULV
O

RQHDUWK$GLVWLQFWLRQVKRXOGEHUHFRJQL]HGEHWZHHQWKHLPPHQVLW\RI*RGDQGWKH
TH

RPQLSUHVHQFHRI*RG,PPHQVLW\HPSKDVL]HVWKHWUDQVFHQGHQFHRI*RGDQGVWUHVVHV
WKDW +H LV QRW ERXQG E\ VSDFH ZKHUHDV RPQLSUHVHQFH HPSKDVL]HV +LV LPPDQHQFH
AU

ILOOLQJ DOO VSDFH LQFOXGLQJ HDUWK 7KH GRFWULQH RI RPQLSUHVHQFH LV D FRPIRUW WR WKH
EHOLHYHUZKRUHFRJQL]HVWKDWQRFDODPLW\FDQEHIDOOKLPWKDW*RGLVQRWSUHVHQWZLWK
+LPLWLVDOVRDZDUQLQJWRWKHGLVREHGLHQWSHUVRQWKDWKHFDQQRWHVFDSHWKHSUHVHQFH
RI*RG


,ELGS


6WURQJ6\VWHPDWLF7KHRORJ\S



 2PQLVFLHQFH
7KH(QJOLVKZRUGRPQLVFLHQFHFRPHVIURPWKH/DWLQZRUGVRPQLVPHDQLQJ³DOO´DQG
VFLHQWLD PHDQLQJ ³NQRZOHGJH´ WKXVLW PHDQVWKDW *RG KDVDOO NQRZOHGJH $ PRUH
FRPSUHKHQVLYHGHILQLWLRQZLOOVWDWHWKDW*RGNQRZVDOOWKLQJVDFWXDODQGSRVVLEOHSDVW
SUHVHQWDQGIXWXUHLQRQHHWHUQDODFW$QXPEHURIWKLQJVVKRXOGEHQRWHGDERXW
*RG¶VRPQLVFLHQFH

*RGNQRZVDOOWKLQJVWKDWH[LVWLQDFWXDOLW\3V±0DWW±
7KHSVDOPLVWUHFRJQL]HGWKHRPQLVFLHQFHRI*RGLQWKDW*RGNQHZKLVDFWLRQVKLV
WKRXJKWVKLVZRUGVEHIRUHKHHYHQVSRNHWKHPDQGKLVHQWLUHOLIH3V±

*RGNQRZVDOOWKHYDULDEOHVFRQFHUQLQJWKLQJVWKDWKDYHQRWRFFXUUHG-HVXVNQHZ

PY
ZKDW7\UHDQG6LGRQZRXOGKDYHGRQHKDGWKHJRVSHOEHHQSUHDFKHGWRWKHP0DWW
 O
C
*RGNQRZVDOOIXWXUHHYHQWV%HFDXVH*RGLVHWHUQDODQGNQRZVDOOWKLQJVLQRQH
'S

HWHUQDODFWHYHQWVWKDWDUHIXWXUHWRPDQDUHDQ³HWHUQDOQRZ´WR*RG+HNQHZWKH
QDWLRQVWKDWZRXOGGRPLQDWH,VUDHO'DQ±±DQG+HNQRZVWKHHYHQWV
R

WKDWZLOO\HWWUDQVSLUHXSRQWKHHDUWK0DWW5HY±
O
TH

*RG¶VNQRZOHGJHLVLQWXLWLYH,WLVLPPHGLDWHQRWFRPLQJWKURXJKWKHVHQVHVLWLV
VLPXOWDQHRXVQRWDFTXLUHGWKURXJKREVHUYDWLRQRUUHDVRQLWLVDFWXDOFRPSOHWHDQG
AU

DFFRUGLQJWRUHDOLW\

2PQLSRWHQFH
7KHWHUPRPQLSRWHQFHVLJQLILHVWKDW*RGLVDOOSRZHUIXO+RZHYHULWGRHVQRWVXJJHVW
WKDWEHFDXVH*RGLVDOOSRZHUIXO+HFDQDQGGRHVGRDQ\WKLQJRUHYHU\WKLQJDWUDQGRP
$SURSHUGHILQLWLRQVWDWHV³*RGLVDOOSRZHUIXODQGDEOHWRGRZKDWHYHUKHZLOOV6LQFH
KLVZLOOLVOLPLWHGE\KLVQDWXUH*RGFDQGRHYHU\WKLQJWKDWLVLQKDUPRQ\ZLWKKLV


,WLVLPSRUWDQWWRUHFRJQL]HWKDWLQVSHDNLQJRI*RG¶VNQRZOHGJHRUIRUHNQRZOHGJHLWGRHVQRWLPSO\DSDVVLYHDZDUHQHVVRIZKDW
ZLOOKDSSHQEXWLQFRQQHFWLRQZLWK+LVNQRZOHGJHRUIRUHNQRZOHGJH+HKDVGHFUHHGDOOHYHQWV&RPSDUH6KHGG'RJPDWLF7KHRORJ\
±±



SHUIHFWLRQV´,QRWKHUZRUGVWKHTXHVWLRQ³&DQ*RGFUHDWHDVWRQHVRODUJHWKDW+H
FRXOGQRWOLIWLW"´LVQRWDOHJLWLPDWHTXHVWLRQ*RGFDQGRDOOWKLQJVWKDWDUHLQKDUPRQ\
ZLWK+LVQDWXUHDQG3HUVRQ

7KHQDPH$OPLJKW\ PHDQV³WKH PLJKW\RQH´DQGLVSUREDEO\GHULYHGIURPWKHYHUE

PHDQLQJ³WREHVWURQJ´FI*HQ,VD(]HN-RHO%HFDXVH
*RGLV$OPLJKW\DOOWKLQJVDUHSRVVLEOH0DWW7KH2QHZKRKDVIRUPHGWKH
XQERUQFKLOG3V±DQGFUHDWHGWKHKHDYHQV-HUFDQGRDOOWKLQJV
QRWKLQJLVWRRKDUGIRU+LP+HGRHVDV+HSOHDVHV3VDQGGHFUHHVDOOWKLQJV
LQDFFRUGDQFHZLWK+LVZLOO(SK

*RGFDQQRWGRWKLQJVWKDWDUHQRWLQKDUPRQ\ZLWK+LVQDWXUH+HFDQQRWJREDFNRQ

PY
+LVZRUG7LP+HFDQQRWOLH+HE+HKDVQRUHODWLRQVKLSWRVLQ+DE
 -DPHV  6LQFH *RG LV DEOH WR GR DV +H SOHDVHV WKH GRFWULQH RI *RG¶V
O
RPQLSRWHQFHEHFRPHVDVRXUFHRIJUHDWFRPIRUWIRUWKHEHOLHYHUFI*HQ3HW
C
7KHUHDUHDOVRUHODWLYHDWWULEXWHVRI*RGWKDWUHODWHWRPRUDOLW\
'S

7UXWK
R

,QVSHDNLQJRI*RGDVWUXWKLWLVLPSOLHGWKDW*RGLVDOOWKDW+HDV*RGVKRXOGEHDQG
O

WKDW+LVZRUGDQGUHYHODWLRQDUHFRPSOHWHO\UHOLDEOH
TH

*RGLVWKHWUXWKLQ+LVSHUVRQ+HLVSHUIHFWO\FRPSOHWHDQGFRPSOHWHO\SHUIHFWDV
AU

*RG+HLVZLWKRXWSHHU,VD

*RGLVWKHWUXWKLQ+LVUHYHODWLRQ3V3HW0DWW,WPHDQVWKDW

+HLVFRPSOHWHO\WUXHLQ+LVUHYHODWLRQWRPDQNLQG+HLVUHOLDEOH8QOLNHDPRUWDO
*RGFDQQRWOLH7LW+HE+HVSHDNVWKHWUXWKDQGIXOILOVHYHU\WKLQJWKDW+H
KDV SURPLVHG WR GR 1XP  *RG LV WUXH LQ WKDW +H ZLOO QHYHU DEURJDWH +LV
SURPLVHV5RP±,QFRQFHUWZLWKWKH)DWKHU-HVXVSURFODLPHG³,DPWKHWUXWK´
-RKQ+LVZRUGZDVUHOLDEOH+LVGLVFLSOHVFRXOGWUXVW+LP7KHDSSOLFDWLRQRI



7KLHVVHQ/HFWXUHVLQ6\VWHPDWLF7KHRORJ\S



WKLVGRFWULQHLVRIVLJQLILFDQWYDOXH6LQFH*RGLVWUXWKLWPHDQV+LVZRUGWRPDQNLQG
LVDEVROXWHO\UHOLDEOHDQGFDQEHWUXVWHGLPSOLFLWO\,WPHDQV+HZLOOQHYHUUHQHJHRQD
SURPLVH+HKDVPDGHVXFKDVLQ-RKQ

0HUF\
$JHQHUDOGHILQLWLRQRIPHUF\LV³WKHJRRGQHVVRUORYHRI*RGVKRZQWRWKRVHZKRDUH
LQPLVHU\RUGLVWUHVVLUUHVSHFWLYHRIWKHLUGHVHUWV´7KH+HEUHZZRUGFKHVHGLQWKH
2OG7HVWDPHQWHPSKDVL]HV³KHOSRUNLQGQHVVDVWKHJUDFHRIDVXSHULRU´,WVWUHVVHVWKH
IDLWKIXOQHVV RI *RG GHVSLWH PDQ¶V XQIDLWKIXOQHVV DQG WKHUHIRUH HPSKDVL]HV SLW\
V\PSDWK\DQGORYH7KH1HZ7HVWDPHQW*UHHNZRUGHOHRVDOVRLQFOXGHVWKHLGHDRI
SLW\ DQG V\PSDWK\ DQG PD\ EH WUDQVODWHG ³ORYLQJNLQGQHVV´ LQ D JHQHUDO VHQVH

PY
*RG¶VPHUF\VHHNVERWKWKHWHPSRUDOQHHGRIPDQNLQG5XWK+HEDVZHOO
DVWKHHWHUQDOVDOYDWLRQRISHRSOH5RP(SK7LWXV3HW,VD
O
KRZHYHUWKHODWWHULVWKHVWUHVVLQWKH1HZ7HVWDPHQW+LVPHUF\H[WHQGVWR,VUDHO3V
C
DVZHOODVWR*HQWLOHV5RP±+LVPHUF\LVIUHHRIREOLJDWLRQ
'S

DQGJLYHQDFFRUGLQJWR+LVVRYHUHLJQFKRLFH5RP±$FRQFRUGDQFHVWXG\

R

RIPHUF\XVHDFRQFRUGDQFHWKDWOLVWVWKHXVDJHRIWKH+HEUHZZRUGFKHVHGUHYHDOV

O

WKDW*RGLVLQGHHG³ULFKLQPHUF\´ZKLFKLVSDUWLFXODUO\UHIOHFWHGLQWKH3VDOPVFI
TH

       HWF QRWH WKH ZRUG LV IUHTXHQWO\ WUDQVODWHG
³ORYLQJNLQGQHVV´
AU

*UDFH
*UDFHPD\EHGHILQHGDVWKHXQPHULWHGRUXQGHVHUYLQJIDYRXURI*RGWRWKRVHZKRDUH
XQGHUFRQGHPQDWLRQ$SURPLQHQW2OG7HVWDPHQWZRUGGHVFULELQJ*RG¶VJUDFHLVDOVR
FKHVHG 7KLVZRUGGHQRWHVGHOLYHUDQFHIURPHQHPLHVDIIOLFWLRQRUDGYHUVLW\3V
    ± HQDEOHPHQW 3V  GDLO\ JXLGDQFH 3V 



%XVZHOO$6\VWHPDWLF7KHRORJ\RIWKH&KULVWLDQ5HOLJLRQS

 5XGROSK %XOWPDQQ ³(OHRV´ LQ *HUKDUG .LWWHO HG 7KHRORJLFDO 'LFWLRQDU\ RI WKH 1HZ 7HVWDPHQW  YROV *UDQG 5DSLGV
(HUGPDQV±

7KH+HEUHZZRUGFKHVHGUHDOO\GHQRWHV³ORYLQJNLQGQHVV´DQGWKHFRQFHSWRYHUODSVLQWRERWKPHUF\DQGJUDFH



IRUJLYHQHVV1XP3VDQGSUHVHUYDWLRQ3V
7KH1HZ7HVWDPHQWZRUGFKDULVSDUWLFXODUO\IRFXVHVRQWKHSURYLVLRQRI
VDOYDWLRQLQ&KULVW*UDFHLVUHIOHFWHGLQ*RGSURYLGLQJVDOYDWLRQ5RP(SK
&KULVWEURXJKWJUDFHDQGWUXWK-RKQ5RPWKHJUDFHRI&KULVW
HQDEOHGEHOLHYHUVWRKDYHDSRVLWLRQDOVWDQGLQJEHIRUH*RG5RP&KULVWEURXJKW
OLIHLQVWHDGRIGHDWKWKURXJKJUDFH5RPWKHJUDFHRI&KULVWH[FHHGHGWKHVLQRI
$GDP 5RP   WKHJUDFH RI &KULVW GLVSHQVHG VSLULWXDO JLIWV WR DOO EHOLHYHUV
5RP(SK-HZVDQG*HQWLOHVDOLNHDUHDFFHSWHGWKURXJKJUDFH(SK

-XVWLFH
-XVWLFHLVVRPHWLPHVWDNHQWRJHWKHUZLWKWKHULJKWHRXVQHVVRI*RG7KHMXVWLFHRI*RG

PY
PHDQVWKDW*RGLVHQWLUHO\FRUUHFWDQGMXVWLQDOO+LVGHDOLQJVZLWKKXPDQLW\PRUHRYHU
WKLVMXVWLFHDFWVLQDFFRUGDQFHZLWK+LVODZ7KHMXVWLFHRI*RGWKHUHIRUHLVUHODWHGWR
O
PDQ¶V VLQ 6LQFH *RG¶V ODZ UHIOHFWV *RG¶V VWDQGDUGWKHQ *RG LV ULJKWHRXV DQG MXVW
C
ZKHQ+HMXGJHVPDQIRU+LVYLRODWLRQRI*RG¶VUHYHDOHGODZ
'S

7KHMXVWLFHRI*RGLVVRPHWLPHVGLYLGHGLQWRVHYHUDOFDWHJRULHV7KHUHFWRUDOMXVWLFH
R

RI*RGUHFRJQL]HV*RGDVPRUDOUXOHUZKRLQLPSRVLQJ+LVPRUDOODZLQWKHZRUOG
O

SURPLVHVUHZDUGIRUWKHREHGLHQWDQGSXQLVKPHQWIRUWKHGLVREHGLHQW3V5RP
TH

7KHGLVWULEXWLYHMXVWLFHRI*RGUHODWHVWRWKHH[HFXWLRQRIWKHODZLQWHUPVRI
ERWKUHZDUGDQGSXQLVKPHQW,VD5RP3HW'LVWULEXWLYHMXVWLFH
AU

LVERWKSRVLWLYHDQGQHJDWLYH2QWKHSRVLWLYHVLGHLWLVWHUPHGUHPXQHUDWLYHMXVWLFHD
UHIOHFWLRQRIGLYLQHORYHZKLFKGLVSHQVHVUHZDUGWRWKHREHGLHQW'HXW3V
5RP2QWKHQHJDWLYHVLGHLWLVWHUPHGUHWULEXWLYHMXVWLFHDQH[SUHVVLRQRIGLYLQH
ZUDWKLQZKLFK*RGSXQLVKHVWKHZLFNHG*HQ  'HXW*DO5RP


&KDUOHV&5\ULH7KH*UDFHRI*RG&KLFDJR0RRG\SS±7KLVLVDPRVWKHOSIXOERRNRQWKHHQWLUHVXEMHFWRIJUDFH

DQGLVKLJKO\UHFRPPHQGHGIRUDSURSHUXQGHUVWDQGLQJRIWKLVPRVWLPSRUWDQWGRFWULQH



6LQFH*RGLVMXVWDQGULJKWHRXVWKHSXQLVKPHQWRIHYLOGRHUVLVIDLUEHFDXVHWKH\
UHFHLYHWKHMXVWSHQDOW\GXHWKHPIRUWKHLUVLQ

PY

O
C

'S


R


O
TH


AU



6HH:P*76KHGG'RJPDWLF7KHRORJ\±IRUDQH[FHOOHQWH[WHQVLYHGLVFXVVLRQRIWKHVXEMHFW 



 &+$37(56,;

&21&/86,21


7KHWHUP³6\VWHPDWLF7KHRORJ\´KDVORQJEHHQLQXVHIRUDORQJWLPHHVSHFLDOO\LQ
$PHULFDWRGHVLJQDWHRQHRIWKHWKHRORJLFDOGLVFLSOLQHV2QWKHZKROHLWDSSHDUVWREH
VXIILFLHQWO\ H[DFW GHVLJQDWLRQ RI WKLV GLVFLSOLQH <HW LW KDV QRW HVFDSHG FULWLFLVP
$JDLQVWWKLVEDFNGURSLWZDVQHFHVVDU\WRFULWLFDOO\DQDO\]H6\VWHPDWLF7KHRORJ\DVD
IRXQGDWLRQRIIDLWKIRUDEHOLHYHU

7KHREMHFWLYHVRIWKHUHVHDUFKZDVWRDVFHUWDLQDOOWKDWQDWXUHDQGWKH6FULSWXUHVWHDFK

PY
RQV\VWHPDWLFWKHRORJ\E\FRPSDULQJDOOWHDFKLQJVRQHZLWKDQRWKHUDQGWRGHILQHWKHLU
O
PXWXDO OLPLWDWLRQV DQG WR FRPSDUH ZKDW 5HDVRQ DQG 1DWXUH WHDFKHV LQ V\VWHPDWLF
C
WKHRORJ\ ZLWK WKH UHYHODWLRQV RI *RG
V :RUG YLD WKH 2OG 7HVWDPHQW DQG 1HZ
7HVWDPHQWRIWKH%LEOH
'S

$FFRUGLQJ WR % % :DUILHOG ³7KH UHODWLRQ RI %LEOLFDO 7KHRORJ\ WR 6\VWHPDWLF
R
O

7KHRORJ\LVEDVHGRQDWUXHYLHZRILWVIXQFWLRQ6\VWHPDWLF7KHRORJ\LVQRWIRXQGHG
RQWKHGLUHFWDQGSULPDU\UHVXOWVRIWKHH[HJHWLFDOSURFHVVLWLVIRXQGHGRQWKHILQDO
TH

DQGFRPSOHWHUHVXOWVRIH[HJHVLVDVH[KLELWHGLQ%LEOLFDO7KHRORJ\1RWH[HJHVLVLWVHOI
AU

WKHQEXW%LEOLFDO7KHRORJ\SURYLGHVWKHPDWHULDOIRU6\VWHPDWLFV%LEOLFDO7KHRORJ\
LVQRWWKHQDULYDORI6\VWHPDWLFVLWLVQRWHYHQDSDUDOOHOSURGXFWRIWKHVDPHERG\RI
IDFWV SURYLGHG E\ H[HJHVLV LW LV WKH EDVLV DQG VRXUFH RI 6\VWHPDWLFV 6\VWHPDWLF
7KHRORJ\ LV QRW D FRQFDWHQDWLRQ RI WKH VFDWWHUHG WKHRORJLFDO GDWD IXUQLVKHG E\ WKH
H[HJHWLFSURFHVVLWLVWKHFRPELQDWLRQRIWKHDOUHDG\FRQFDWHQDWHGGDWDJLYHQWRLWE\
%LEOLFDO 7KHRORJ\ ,W XVHV WKHLQGLYLGXDOGDWD IXUQLVKHG E\ H[HJHVLVLQD ZRUGQRW
FUXGHO\QRWLQGHSHQGHQWO\IRU LWVHOIEXWRQO\DIWHUWKHVHGDWDKDYHEHHQZRUNHGXS
LQWR %LEOLFDO 7KHRORJ\ DQG KDYH UHFHLYHG IURP LW WKHLU ILQDO FRORXULQJ DQG VXEWOHVW




VKDGHVRIPHDQLQJLQRWKHUZRUGVRQO\LQWKHLUWUXHVHQVHDQGDIWHU([HJHWLFVKDV
VDLGLWVODVWZRUGXSRQWKHP´

$FFRUGLQJWR-RKQ0XUUD\6\VWHPDWLFWKHRORJ\LVWLHGWRH[HJHVLV,WFRRUGLQDWHVDQG
V\QWKHVL]HVWKHZKROHZLWQHVVRI6FULSWXUHRQWKHYDULRXVWRSLFVZLWKZKLFKLWGHDOV
%XWV\VWHPDWLFWKHRORJ\ZLOOIDLORILWVWDVNWRWKHH[WHQWWRZKLFKLWGLVFDUGVLWVURRWDJH
LQELEOLFDOWKHRORJ\DVSURSHUO\FRQFHLYHGDQGGHYHORSHG 7KHH[HJHVLVZLWKZKLFK
>V\VWHPDWLFWKHRORJ\@LVVRLQWLPDWHO\FRQFHUQHGVKRXOGEHUHJXODWHGE\WKHSULQFLSOH
RIELEOLFDOWKHRORJ\7KHIDFWLVWKDWRQO\ZKHQV\VWHPDWLFWKHRORJ\LVURRWHGLQELEOLFDO
WKHRORJ\GRHVLWH[HPSOLI\LWVWUXHIXQFWLRQDQGDFKLHYHLWVSXUSRVH

³6\VWHPDWLFWKHRORJ\GHDOVZLWKVSHFLDOUHYHODWLRQDVDILQLVKHGSURGXFWLQFRUSRUDWHG

PY
IRU XV LQ +RO\ 6FULSWXUH %XW VSHFLDO UHYHODWLRQ LQ LWV WRWDOLW\ LV QHYHU SURSHUO\
FRQFHLYHGRIDSDUWIURPWKHKLVWRU\E\ZKLFKLWEHFDPHDILQLVKHGSURGXFW$VZHWKLQN
O
RIVWXG\DSSUHFLDWHDSSURSULDWHDQGDSSO\WKHUHYHODWLRQSXWLQRXUSRVVHVVLRQE\
C
LQVFULSWXUDWLRQZHGRQRWSURSHUO\HQJDJHLQDQ\RIWKHVH>V\VWHPDWLF@H[HUFLVHVH[FHSW
'S

DVWKHSDQRUDPDRI*RG
VPRYHPHQWVLQKLVWRU\FRPHVZLWKLQRXU YLVLRQRUDWOHDVW
R

IRUPV WKH EDFNJURXQG RI RXU WKRXJKW « 7KHUHIRUH ZKDW LV WKH VSHFLDO LQWHUHVW RI
O

ELEOLFDO WKHRORJ\ LV QHYHU GLYRUFHG IURP RXU WKRXJKW ZKHQ ZH VWXG\ DQ\ SDUW RI
TH

6FULSWXUH DQG VHHN WR EULQJ LWV WUHDVXUHV RI WUXWK WR EHDU XSRQ WKH V\QWKHVLV ZKLFK
V\VWHPDWLF WKHRORJ\ DLPV WR DFFRPSOLVK )XUWKHUPRUH WKH WHQGHQF\ WR DEVWUDFWLRQ
AU

ZKLFKHYHUOXUNVIRUV\VWHPDWLFWKHRORJ\LVKHUHE\FRXQWHUDFWHG7KHYDULRXVGDWDDUH
LQWHUSUHWHGQRWRQO\LQWKHLUVFULSWXUDOFRQWH[WEXWDOVRLQWKHLUKLVWRULFDOFRQWH[WDQG
WKHUHIRUHDV9RVVD\V
LQWKHPLOLHXRIWKHKLVWRULFDOOLIHRIDSHRSOH
EHFDXVH*RGKDV
FDXVHGKLVUHYHODWLRQWREHJLYHQLQWKDWPLOLHX´

 3HUKDSV WKH JUHDWHVW HQULFKPHQW RI V\VWHPDWLF WKHRORJ\ ZKHQ LW LV RULHQWHG WR
ELEOLFDOWKHRORJ\LVWKHSHUVSHFWLYHWKDWLVJDLQHGIRUWKHXQLW\DQGFRQWLQXLW\RIVSHFLDO
UHYHODWLRQ2UWKRGR[V\VWHPDWLFWKHRORJ\UHVWVRQWKHSUHPLVHRIWKHXQLW\RI6FULSWXUH
WKHFRQVHQWRIDOOWKHSDUWV,WLVWKLVXQLW\WKDWPDNHVYDOLGWKHKHUPHQHXWLFDOSULQFLSOH




WKH DQDORJ\ RI 6FULSWXUH $ V\VWHPDWLF WKHRORJ\ WKDW LV IDLWKIXO WR WKLV DWWULEXWH RI
6FULSWXUHDQGVHHNVHDUQHVWO\WRDSSO\LWFDQQRWWRWDOO\IDLORILWVIXQFWLRQ«7KXVWKH
YDULRXV SDVVDJHV GUDZQ IURP WKH ZKROH FRPSDVV RI 6FULSWXUH DQG ZRYHQ LQWR WKH
WH[WXUHRIV\VWHPDWLFWKHRORJ\DUHQRWFLWHGDVPHUHSURRIWH[WVRUZUHVWHGIURPWKH
VFULSWXUDO DQG KLVWRULFDO FRQWH[W WR ZKLFK WKH\ EHORQJ EXW XQGHUVWRRG LQ D ZD\
DSSURSULDWHWRWKHSODFHWKH\RFFXS\LQWKLVXQIROGLQJSURFHVVDUHDSSOLHGZLWKWKDW
SDUWLFXODUUHOHYDQFHWRWKHWRSLFXQGHUFRQVLGHUDWLRQ7H[WVZLOOQRWWKXVEHIRUFHGWR
EHDUDPHDQLQJWKH\GRQRWSRVVHVVQRUIRUFHGLQWRDVHUYLFHWKH\FDQQRWSHUIRUP%XW
LQWKHORFXVWRZKLFKWKH\EHORQJDQGE\WKHLPSRUWWKH\GRSRVVHVVWKH\ZLOOFRQWULEXWH
WRWKHVXPWRWDORIUHYHODWRU\HYLGHQFHE\ZKLFKELEOLFDOGRFWULQHLVHVWDEOLVKHG

PY
7RVXPPDUL]H*DIILQ
VIRUPXODWLRQ)LUVWELEOLFDOWKHRORJ\DVDGLVFLSOLQHPRWLYDWHG
E\WKHG\QDPLVPRIWKHKLVWRULFDOSHUVSHFWLYHFKDOOHQJHVV\VWHPDWLFWKHRORJ\WRDYRLG
O
DEVWUDFWLRQDQGWRGRMXVWLFHWRWKHKLVWRULFDOFRYHQDQWDOG\QDPLFRIGLYLQHUHYHODWLRQ
C
6HFRQG ELEOLFDO WKHRORJ\ DV DQ H[HJHWLFDO PHWKRGRORJ\ ZKLFK LV VHOIFRQVFLRXVO\
'S

FRJQL]DQW RI WKH XQLW\ RI 6FULSWXUH JXDUDQWHHV WKDW WKH KHUPHQHXWLFDO SURFHVV IURP
R

H[HJHVLVWRV\VWHPDWLFGRFWULQDOIRUPXODWLRQLVLQDFFRUGZLWKWKH5HIRUPDWLRQ
VNH\
O

LQWHUSUHWLYHSULQFLSOHWKHDQDORJ\RI6FULSWXUH
TH

7KLUGELEOLFDOWKHRORJ\DVPRGHOOHGLQWKHFDQRQLWVHOIHVSHFLDOO\WKH1HZ7HVWDPHQW
AU

HJ 3DXO
V WKHRORJLFDO UHIOHFWLRQ RQ UHGHPSWLYH KLVWRU\ NHHSV WKH FKXUFK
V SRVW
FDQRQLFDO WKHRORJLFDO UHIOHFWLRQ ILUPO\ DQG RUJDQLFDOO\ URRWHG LQ WKH 6FULSWXUHV
GHWHUPLQHG QRW RQO\ LQ LWV FRQFOXVLRQV EXW DOVR LQ WKH TXHVWLRQV LW EULQJV WR WKH
V\VWHPDWLFHQWHUSULVH

7KH VWURQJHVW GHIHQFH IRU WKH YHUEDO SOHQDU\ LQVSLUDWLRQ RI WKH 6FULSWXUHV LV WKH
WHVWLPRQ\RI-HVXV&KULVW+HWHVWLILHGWRWKHLQVSLUDWLRQRIWKHHQWLUH6FULSWXUHVWKH
YDULRXVERRNVRIWKH2OG7HVWDPHQWDQGWKHDFWXDOZRUGVRI6FULSWXUHDVWKH\KDGEHHQ
RULJLQDOO\ UHFRUGHG 7KH IDFW WKDW -HVXV &KULVW EDVHG +LV DUJXPHQWV RQ WKH SUHFLVH
ZRUGLQJ RI 6FULSWXUH WHVWLILHV WR +LV H[DOWHG YLHZ RI 6FULSWXUH ,Q DGGLWLRQ 3DXO



DFNQRZOHGJHG WKDW DOO 6FULSWXUH ZDV *RGEUHDWKHG PDQ ZDV D SDVVLYH LQVWUXPHQW
EHLQJ JXLGHG E\ *RG LQ WKH ZULWLQJ RI 6FULSWXUH 3HWHU¶V VWDWHPHQW ZDV VLPLODU LQ
HPSKDVL]LQJWKDWLQWKHLUSDVVLYLW\PHQZHUHFDUULHGDORQJE\WKH+RO\6SLULWLQWKH
ZULWLQJRI6FULSWXUH7KHWHVWLPRQ\RIHDFKRIWKHVHZLWQHVVHVGUDZVDWWHQWLRQWRWKH
YHUEDOSOHQDU\LQVSLUDWLRQRI6FULSWXUH

6\VWHPDWLFWKHRORJ\PXVWEHUHGHPSWLYHKLVWRULFDOO\UHJXODWHG EHFDXVHWKHILQLVKHG
SURGXFWRIUHYHODWLRQFDQQHYHUVKHGWKHPDUNVRIWKHKLVWRULFDOFRYHQDQWDOSURFHVV
WKDWOHGXSWRLW

PY


 O
C

'S


R
O


TH


AU




5()(5(1&(6


 $VXPDGX6DUNRGLH 6  7KH 1DWXUH RI D &KULVWLDQ :RUOGYLHZ

&KULVWLDQLW\DQGWKH(OHPHQWVRI3KLORVRSK\'RL
$VXPDGX6DUNRGLH 6 %LEOH WKH ERRN RI ZRQGHUIXO YDULHW\ 'RL

 $VXPDGX6DUNRGLH 6 (WKLFV DV D PRUDO SKLORVRSK\ 'RL

 $VXPDGX6DUNRGLH6,QWHOOLJHQWGHVLJQ'RL
$VXPDGX6DUNRGLH 6 3V\FKRORJ\ DQG WKH %LEOH LQ 6XLFLGH&RXQVHOLQJ 'RL

PY

 %HQMDPLQ % :DUILHOG 7KH ,GHD RI 6\VWHPDWLF 7KHRORJ\ LQ 6WXGLHV LQ
O
7KHRORJ\ 2[IRUG  SS  7KH DUWLFOH RULJLQDOO\ DSSHDUHG LQ
C
3UHVE\WHULDQDQG5HIRUPHG5HYLHZ
'S

 %HUNKRI/6\VWHPDWLFWKHRORJ\:P%(HUGPDQV3XEOLVKLQJ

R

 %HYDQVDQG6FKURHGHU&RQVWDQWVLQ&RQWH[W0DQLOD0DQLIHVWRDIILUPDWLRQ
O

LQ6FKHUHUDQG%HYDQV
TH

 %HYDQV6WHQSKHQ%0RGHOVRI&RQWH[WXDO7KHRORJ\5HYLVHG ([SDQGHGHG

0DQLOD3KLOLSSLQHV/RJRV3XEOLFDWLRQV,QF
AU

%HYDQV6WHSKHQ%DQG6FKURHGHU5RJHU3&RQVWDQWVLQ&RQWH[W$7KHRORJ\
RI0LVVLRQIRU7RGD\4XH]RQ&LW\3KLOLSSLQHV&ODUHWLDQ3XEOLFDWLRQV
%RLFH-3$EVWUDFWRI6\VWHPDWLF7KHRORJ\
%UDFNHQ-$,PDJHVRI*RGZLWKLQV\VWHPDWLFWKHRORJ\7KHRORJLFDO
6WXGLHV
&KDIHU/66\VWHPDWLFWKHRORJ\.UHJHO$FDGHPLF&KLFDJR
'DEQH\5/ /HZLV56\VWHPDWLF7KHRORJ\%DQQHURI7UXWK7UXVW
(ULFNVRQ 0LOODUG - &KULVWLDQ 7KHRORJ\ 8QDEULGJHG RQHYROXPH HGLWLRQ
UHSULQWHG0DQLOD3KLOLSSLQHV&KULVWLDQ*URZWK0LQLVWU\



 )LQQH\&*/HFWXUHVRQ6\VWHPDWLF7KHRORJ\9RO;XORQ3UHVV
*UXGHP:$ 7KRHQQHV.(6\VWHPDWLFWKHRORJ\,QWHU9DUVLW\
+HVVHOJUDYH 'DYLG - &RPPXQLFDWLQJ &KULVW &URVV&XOWXUDOO\ $Q
,QWURGXFWLRQ WR 0LVVLRQDU\ &RPPXQLFDWLRQ QG HG *UDQG 5DSLGV 0LFKLJDQ
=RQGHUYDQ3XEOLVKLQJ+RXVH
+RGJH&6\VWHPDWLFWKHRORJ\9RO6FULEQHU
KWWSHQZLNLSHGLDRUJZLNL&KULVWLDQBWKHRORJ\
KWWSZZZDQVZHUVFRPWRSLFFKULVWLDQWUDGLWLRQV
KWWSZZZDQVZHUVFRPWRSLFWUDGLWLRQLQ$16:(5&20
-HQVRQ5:6\VWHPDWLF7KHRORJ\7KH7ULXQH*RG9RO2[IRUG
8QLYHUVLW\3UHVV

PY
-RKQ 0XUUD\ 6\VWHPDWLF 7KHRORJ\ LQ &ROOHFWHG :ULWLQJV RI -RKQ 0XUUD\
O
9RO,9%DQQHURI7UXWK7UXVWSS2ULJLQDOO\SXEOLVKHGDVWZR
C
DUWLFOHVLQ:HVWPLQVWHU7KHRORJLFDO-RXUQDO0D\DQG
1RY
'S

.LQJ-DPHV9HUVLRQRIWKH%LEOH
R

/H[LFRQV*UHHNDQG+HEUHZ'LFWLRQDU\3RZHU%LEOH&'
O

0DWKHQ\ 3DXO 2Q WKH *HQHDORJLHV DQG *HRJUDKSLHV RI 3KLORVRSKLFDO DQG
TH

7KHRORJLFDO 7KLQNLQJ $Q ,QWURGXFWRU\ 7H[W 4XH]RQ &LW\ 3KLOLSSLQHV 1HZ

'D\3XEOLVKHUV
AU

0F&OHQGRQ-:6\VWHPDWLF7KHRORJ\9ROXPH9RO$ELQJGRQ

3UHVV
0HVD -RVH 0 'H DQG :RVW\Q /RGH / 'RLQJ &KULVWRORJ\ 7KH 5H
$SSURSULDWLRQRID7UDGLWLRQ4XH]RQ&LW\3KLOLSSLQHV&ODUHWLDQ3XEOLFDWLRQV
0LOODUG-(ULFNVRQ&KULVWLDQ7KHRORJ\UGHGLWLRQ8QDEULGJHGRQHYROXPH
HGLWLRQ*UDQG5DSLGV%DNHU
0ROWPDQQ -XUJHQ ³7KH ,GHD RI D &KULVWLDQ 8QLYHUVLW\´ LQ 4XHVW $Q
,QWHUGLVFLSOLQDU\-RXUQDOIRU$VLDQ&KULVWLDQ6FKRODUV9RO1R-XQH




 
2JGHQ60:KDWLVWKHRORJ\"7KH-RXUQDORI5HOLJLRQ
3DQQHQEHUJ:6\VWHPDWLFWKHRORJ\9RO%ORRPVEXU\3XEOLVKLQJ
5H\PRQG 5  $ 1HZ 6\VWHPDWLF 7KHRORJ\ RI WKH &KULVWLDQ )DLWK 
5HYLVHGDQG8SGDWHG7KRPDV1HOVRQ,QF
5LFKDUG % *DIILQ-U 6\VWHPDWLF 7KHRORJ\ DQG %LEOLFDO 7KHRORJ\ LQ 7KH
1HZ7HVWDPHQW6WXGHQWDQG7KHRORJ\9RO,,,RI7KH1HZ7HVWDPHQW6WXGHQW
HG-RKQ+6NLOWRQ3 5SS
6FKUHLWHU 5REHUW - &RQVWUXFWLQJ /RFDO 7KHRORJLHV 0DU\NQROO 1HZ <RUN
2UELV%RRNV
6WURQJ$+ 6WURQJ$6\VWHPDWLFWKHRORJ\$PHU %DSWLVW3XE

PY
6RF
O
6XULQ . (G  7KH WXUQLQJV RI GDUNQHVV DQG OLJKW HVVD\V LQ
C
SKLORVRSKLFDODQGV\VWHPDWLFWKHRORJ\&DPEULGJH8QLYHUVLW\3UHVV
7HDJXH 'HQQLV &XOWXUH 7KH 0LVVLQJ /LQN LQ 0LVVLRQ 0DQLOD 3KLOLSSLQHV
'S

20)/LWHUDWXUH,QF
R

7KH $JHV 'LJLWDO /LEUDU\ 7KHRORJ\ 6\VWHPDWLF 7KHRORJ\ 9ROXPH  E\ $
O

6WURQJ$*(66RIWZDUH$OEDQ\2586$9HUVLRQ‹

TH

7KLHVVHQ + &  /HFWXUHV LQ V\VWHPDWLF WKHRORJ\ :P % (HUGPDQV
3XEOLVKLQJ
AU

7KLUG0LOOHQQLXP0LQLVWULHVDWWKLUGPLOORUJ
7LOOLFK36\VWHPDWLFWKHRORJ\9RO8QLYHUVLW\RI&KLFDJR3UHVV
7LOOLFK3DXO7HUU\/HFWXUHV&RXUDJHWR%H<DOH8QLYHUVLW\3UHVV
9DQ+X\VVWHHQ:7KHRORJ\DQGWKHMXVWLILFDWLRQRIIDLWKFRQVWUXFWLQJ
WKHRULHVLQV\VWHPDWLFWKHRORJ\:P%(HUGPDQV3XEOLVKLQJ
:DUILHOG % %  7KH ,GHD RI 6\VWHPDWLF 7KHRORJ\ 3XEOLVKHU QRW
LGHQWLILHG




 :HEVWHU-%7DQQHU. 7RUUDQFH,(GV7KH2[IRUGKDQGERRN
RIV\VWHPDWLFWKHRORJ\2[IRUG+DQGERRNV2QOLQH
:RQJ$QJHOD:DL&KLQJ³%HWZHHQ5HOLJLRXV6WXGLHVDQG&XOWXUDO6WXGLHV$Q
,QWHOOHFWXDO 5HIOHFWLRQ´ LQ 4XHVW $Q ,QWHUGLVFLSOLQDU\ -RXUQDO IRU $VLDQ
&KULVWLDQ6FKRODUV9RO1R-XQH

PY
O
C
'S
R
O
TH
AU




AU
TH
O
R
'S
C
O
PY
AU
TH
O
R
'S
C
O
PY
AU
TH
O
R
'S
C
O
PY
 PY
O
C
'S
R
O
TH
AU

View publication stats