You are on page 1of 44

ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ

%RLOHU:DWHU3UREOHPV 6ROXWLRQV

&RXUVH&RQWHQW
7KHTXDOLW\RIZDWHULVLPSRUWDQWWRDYRLGGDPDJHWRWKHERLOHU7KHPDNHXSZDWHUGHSHQGLQJRQLWVVRXUFH
PD\FRQWDLQODUJHDPRXQWRILPSXULWLHV7KLVLIQRWWUHDWHGVKDOOUHVXOWLQIRXOLQJRIERLOHUKHDWWUDQVIHU
VXUIDFHVDQGVKDOOLQFUHDVHWKHIXHOFRQVXPSWLRQ0DNHXSZDWHUDOVRFRQWDLQVFRQVLGHUDEOHDPRXQWVRI
GLVVROYHGR[\JHQZKLFKLVDSULPHFDXVHRIFRUURVLRQ7KHKLJKKHDWLQWHQVLW\RIWKHHYDSRUDWLRQDFFHOHUDWHV
WKHR[LGDWLRQVFDOLQJDQGFRUURVLRQSURFHVV7KHSLWWLQJFRUURVLRQOHDGVWRERLOHUWXEHIDLOXUHVDQGPLJKW
GDPDJHWKHGRZQVWUHDPHTXLSPHQW*HQHUDOO\WKHKLJKHUWKHPDNHXSZDWHUWKHKLJKHUVKDOOEHWKH
LPSXULWLHVDQGWKHGLVVROYHGR[\JHQORDGLQJ

$VXFFHVVIXOZDWHUWUHDWPHQWDSSURDFKUHTXLUHVDWRWDOV\VWHPDSSURDFKWR

• 3UHSDUHWKHZDWHUEHIRUHLWJRHVWRWKHERLOHU

• 0D[LPL]HWKHSRWHQWLDORIFRQGHQVDWH

• 3URYLGHLQWHUQDOERLOHUSURWHFWLRQ

• 0DLQWDLQFOHDQLQWHUQDOERLOHUVXUIDFHV

• $YRLGSUREOHPVDQGVKXWGRZQV

• ([WHQGHTXLSPHQWOLIH

• 0RQLWRUDQGFRQWUROWUHDWPHQWOHYHOV

%\GHILQLWLRQWKHIROORZLQJWHUPVDUHVXPPDUL]HGIRUWKHERLOHUZDWHUV\VWHPV

  0DNHXS:DWHU7KHUDZZDWHUVRIWHQHGZDWHURUGHPLQHUDOL]HGZDWHUUHTXLUHGIRUVWHDPJHQHUDWLRQ

  &RQGHQVDWH:DWHU:KHQVWHDPWUDQVIHUVLWVKHDWWRWKHSURFHVVKHDWH[FKDQJHURUKHDWLQJFRLOLW
UHYHUWVWRDOLTXLGSKDVHFDOOHGFRQGHQVDWH&RQGHQVDWHZDWHULVJHQHUDOO\YHU\SXUHDQGZKHQUHWXUQHG
EDFNWRWKHERLOHUIRUSURGXFWLRQLQWRVWHDPDJDLQGRHVQRWUHTXLUHDGGLWLRQDOWUHDWPHQWFKHPLFDOV,WLV
RQHRIWKHPRVWDWWUDFWLYHPHWKRGVRILPSURYLQJWKHERLOHUZDWHUTXDOLW\DQGVWHDPSODQW¶VHQHUJ\
HIILFLHQF\

  %ORZGRZQ:DWHU7KHSDUWRIZDWHUWKDWLVSXUSRVHO\GUDLQHGWROLPLWWKHOHYHORILPSXULWLHVWRDQ
DFFHSWDEOHOHYHO0DNHXSZDWHULVDGGHGWRFRPSHQVDWHIRUWKHEORZGRZQORVV

  )HHGZDWHU)HHGZDWHULVWKHDJJUHJDWHRIWKHWRWDORIFRQGHQVDWHUHWXUQDQGERLOHUPDNHXSZDWHUWKDWLV
IHGWRWKHERLOHUWRPDNHQHZVWHDP)HHGZDWHU ):  0DNHXSZDWHU 0: 5HWXUQFRQGHQVDWH 5& 

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


,QDKHDY\XVHLQGXVWULDOVWHDPERLOHUWKHZDWHUFRXOGEHFRPSOHWHO\UHSODFHGDVRIWHQDVRQFHHDFKKRXU
2EYLRXVO\DWKLJKHUWXUQRYHUWKHERLOHUZRXOGTXLFNO\KDYHVFDOHDQGRUWXEHIDLOXUHVIURPWKHZDWHULPSXULWLHV
WKDWZRXOGUHGXFHDQGXOWLPDWHO\SUHYHQWZDWHUFLUFXODWLRQDQGKHDWWUDQVIHUZKLFKVKDOOGHVWUR\WKHERLOHU

7KHKLJKHUWKHRSHUDWLQJSUHVVXUHRIWKHERLOHUWKHPRUHFULWLFDOWKHUHPRYDORIIRUHLJQLWHPVIURPWKH
IHHGZDWHUEHFRPHV/DUJHXWLOLW\ERLOHUVRSHUDWLQJDWSVLJPD\DFWXDOO\XVHGLVWLOOHGZDWHUIRUXOWLPDWH
SXULW\$VDUXOHWKHIROORZLQJQHHGWREHQRWHG

  7KHFRQVWLWXHQWVRIFRQFHUQLQVWHDPF\FOHZDWHUDUHFRQVWLWXHQWVWKDWFDXVHFRUURVLRQRUIRXOLQJQRWRQO\
WRWKHERLOHUKHDWWUDQVIHUVXUIDFHVEXWDOVRRIGRZQVWUHDPHTXLSPHQWVXFKDVVWHDPWXUELQHVDQG
SURFHVVKHDWH[FKDQJHUV

  7KHFRQVWLWXHQWVRIFRQFHUQIRUKHDWWUDQVIHUVXUIDFHFRUURVLRQLQFOXGHWRWDOGLVVROYHGVROLGV 7'6 IUHH


FDXVWLFDFLGVGLVVROYHGR[\JHQDQGFDUERQGLR[LGH

  7KHFRQVWLWXHQWVRIFRQFHUQIRUKHDWWUDQVIHUVXUIDFHIRXOLQJLQFOXGHLURQDQGFRSSHU

  7KHFRQVWLWXHQWVRIFRQFHUQWRPDMRUGRZQVWUHDPHTXLSPHQWVXFKDVVWHDPWXUELQHVLQFOXGHFDWLRQ
FRQGXFWLYLW\VLOLFDVRGLXPFKORULGHVXOIDWHDQGS+

7KLV$PHULFDQ6RFLHW\RI0HFKDQLFDO(QJLQHHUV $60( KDVSURYLGHGJXLGHOLQHVIRUZDWHUTXDOLW\7KHWDEOH


EHORZUHIOHFWVWKHPD[LPXPDOORZDEOHZDWHULPSXULWLHVUHFRPPHQGHGE\$60(ZKLFKWUXO\UHIOHFWVVDIHDQG
UHOLDEOHRSHUDWLRQSDUDPHWHUV

$60(*XLGHOLQHVIRU:DWHU4XDOLW\LQ:DWHUWXEH%RLOHUV

'UXP ,URQ &RSSHU 7RWDO 6LOLFD 7RWDO 6SHFLILF


3UHVVXUH KDUGQHVV SSP6L22 DONDOLQLW\  &RQGXFWDQFH
SSP SSP
SSP SSP PLFURPKRVFP
SVLJ
&D&23 &D&23

WR      

WR      

WR      

WR      

WR      

WR      

$ONDOLQLW\QRWWRH[FHHGRIVSHFLILFFRQGXFWDQFH

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


7KHWDEOHSXWVDQDFFXUDWHDQDO\VLVRIDFRPSRVLWHIHHGZDWHUVDPSOHWRGHWHUPLQHWKHFRQFHQWUDWLRQOLPLWRI
WKHERLOHUZDWHU7KHWHUP³&\FOHVRIFRQFHQWUDWLRQ´UHIHUVWRWKHDFFXPXODWLRQRILPSXULWLHVLQWKHERLOHU
ZDWHU,IWKHERLOHUZDWHUFRQWDLQVWHQWLPHVWKHOHYHORILPSXULWLHVLQWKHPDNHXSZDWHULWLVVDLGWRKDYHWHQ
F\FOHVRIFRQFHQWUDWLRQ7KHDSSOLFDWLRQRIWKHWDEOHDERYHLVDVIROORZV

  ,IWKHIHHGZDWHUVDPSOHIRUDSDFNDJHGZDWHUWXEHERLOHURSHUDWHGDWSVLJVKRZVDWRWDODONDOLQLW\ DV
FDOFLXPFDUERQDWH RISSPDQGWKHPD[LPXPDOORZHGLVSSPWKHUHIRUHWKHFRQFHQWUDWLRQOLPLWLV


  ,IWKHDQDO\]HGVDPSOHIRUVLOLFD DVVLOLFRQGLR[LGH LQGLFDWHVSSPDQGWKHPD[LPXPDOORZHGLV


SSPWKHUHIRUHWKHFRQFHQWUDWLRQOLPLWLV

  ,IWKHDQDO\]HGVDPSOHIRUWRWDOGLVVROYHGVROLGVWHVWVPLFURPKRVDQGWKHPD[LPXPDOORZHGLV
PLFURPKRVWKHUHIRUHWKHFRQFHQWUDWLRQOLPLWLV

7KHUHTXLVLWHZDWHUTXDOLW\IRUERLOHUIHHGZDWHUVKDOOEHDFKLHYHGWKURXJKSURSHUH[WHUQDOWUHDWPHQWDQG
SURSHULQWHUQDOWUHDWPHQW

([WHUQDO7UHDWPHQW

([WHUQDOWUHDWPHQWDVWKHWHUPLVDSSOLHGWRZDWHUSUHSDUHGIRUXVHDVERLOHUIHHGZDWHUXVXDOO\UHIHUVWRWKH
FKHPLFDODQGPHFKDQLFDOWUHDWPHQWRIWKHZDWHUVRXUFH7KHJRDOLVWRLPSURYHWKHTXDOLW\RIWKLVVRXUFHSULRU
WRLWVXVHDVERLOHUIHHGZDWHUH[WHUQDOWRWKHRSHUDWLQJERLOHULWVHOI6XFKH[WHUQDOWUHDWPHQWQRUPDOO\
LQFOXGHVFODULILFDWLRQILOWUDWLRQVRIWHQLQJGHDONDOL]DWLRQGHPLQHUDOL]DWLRQ'HDUDWLRQHWF$Q\RUDOORIWKHVH
DSSURDFKHVFDQEHXVHGLQIHHGZDWHURUERLOHUZDWHUSUHSDUDWLRQ

,QWHUQDO7UHDWPHQW

(YHQDIWHUWKHEHVWDQGPRVWDSSURSULDWHH[WHUQDOWUHDWPHQWRIWKHZDWHUVRXUFHERLOHUIHHGZDWHU LQFOXGLQJ
UHWXUQFRQGHQVDWH VWLOOFRQWDLQVLPSXULWLHVWKDWFRXOGDGYHUVHO\DIIHFWERLOHURSHUDWLRQ,QWHUQDOERLOHUZDWHU
WUHDWPHQWXVXDOO\LQIRUPRIFKHPLFDOGRVDJHLQMHFWLRQLVWKHQDSSOLHGWRPLQLPL]HWKHSRWHQWLDOSUREOHPVDQG
WRDYRLGDQ\FDWDVWURSKLFIDLOXUHUHJDUGOHVVRIH[WHUQDOWUHDWPHQWPDOIXQFWLRQ

7KLVFRXUVHSULPDULO\IRFXVHVRQWZRPRVWLPSRUWDQWDGYHUVHDIIHFWVRIZDWHUERUQHLPSXULWLHVQDPHO\6FDOH
&RUURVLRQ

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


3$57  352%/(062):$7(5

$OOUDZZDWHUXVHGIRUERLOHUPDNHXSLUUHVSHFWLYHRILWVVRXUFHFRQWDLQVQXPEHURILPSXULWLHV:DWHUDVLW
SDVVHVRYHUWKHJURXQGSLFNVXSVRPHRIWKHOLPHVWRQHDQGRWKHUHOHPHQWVRIQDWXUHZKLFKGLVVROYHDQG
UHPDLQ7KHFRPPRQLPSXULWLHVRIZDWHUDUHVXPPDUL]HGEHORZ

1DPH 'HVFULSWLRQ 4XDOLWDWLYH 

7XUELGLW\ )LQHO\VXVSHQGHGPDWWHUZKLFKGRHVQRWVHWWOH,PSDUWDPXGG\
RUFORXG\DSSHDUDQFHWRZDWHU

&RORU &RORULQQDWXUDOZDWHUVLVJHQHUDOO\GXHWRRUJDQLFVIURPGHFD\HG
YHJHWDWLRQDQGRUJDQLFZDVWHVFDXVLQJZDWHUWRYDU\IURP
FRORUOHVVWRGHHSEURZQ

6XVSHQGHG6ROLGV 7KHVHDUHVXEVWDQFHVWKDWH[LVWLQZDWHUDVVXVSHQGHGSDUWLFOHV
7KH\DUHXVXDOO\PLQHUDORURUJDQLFLQRULJLQ

8QGLVVROYHGPDWWHUFDXVHVWXUELGLW\DQGFDQSOXJOLQHVGHSRVLW
LQKHDWH[FKDQJHHTXLSPHQWERLOHUVHWF

7KHVHVXEVWDQFHVDUHQRWJHQHUDOO\DSUREOHPDVWKH\FDQEH
ILOWHUHGRXW

'LVVROYHG6ROLGV 7KHVHDUHVXEVWDQFHVWKDWZLOOGLVVROYHLQZDWHU
7KHSULQFLSDORQHVDUHWKHFDUERQDWHVDQGVXOSKDWHVRIFDOFLXP
DQGPDJQHVLXPZKLFKDUHVFDOHIRUPLQJZKHQKHDWHG7KHUH
DUHRWKHUGLVVROYHGVROLGVZKLFKDUHQRQVFDOHIRUPLQJ

7KHWRWDODPRXQWRIGLVVROYHGPDWWHUH[FOXGLQJGLVVROYHGJDVVHV
LVGHWHUPLQHGE\HYDSRUDWLRQ

7RWDO6ROLGV 7KHVXPRIVXVSHQGHGVROLGVDQGGLVVROYHGVROLGVLVGHWHUPLQHG
JUDYLPHWULFDOO\

+DUGQHVV &DOFLXPDQGPDJQHVLXPVDOWVZKLFKDUHWKHFKLHIVRXUFHRIVFDOH

$ONDOLQLW\ %LFDUERQDWH +&2 FDUERQDWH &2 DQGK\GUDWH 2+ 


PHDVXUHGE\WLWUDWLRQ$ONDOLQLW\FDQFRQYHUWWR&2LQVWHDPDQG
FDXVHFRUURVLRQ

)UHH0LQHUDO$FLGLW\ +62+&/HWF

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


1DPH 'HVFULSWLRQ 4XDOLWDWLYH 

'LVVROYHG*DVHV 2[\JHQDQGFDUERQGLR[LGHFDQEHUHDGLO\GLVVROYHGE\ZDWHU
7KHVHJDVHVDUHDJJUHVVLYHLQVWLJDWRUVRIFRUURVLRQ

&DWLRQV 3RVLWLYHO\FKDUJHGLRQVVXFKDVFDOFLXP&DPDJQHVLXP
0JVRGLXP1DDQGSRWDVVLXP.

$QLRQV 1HJDWLYHO\FKDUJHGLRQVVXFKDVDONDOLQLW\VXOSKDWH 62 


FKORULGHDQGQLWUDWH 12 


6LOLFD 1RUPDOO\H[LVWVLQZDWHUDVDQDQLRQ +6L2 RUDVDFROORLGDO
VXVSHQVLRQ

,URQDQG0DQJDQHVH &DQH[LVWLQZDWHUDVDGLVVROYHGFDWLRQEXWUHDGLO\SUHFLSLWDWHV
DQGFDXVHGLVFRORUDWLRQDQGIRXOLQJ

2LODQG*UHDVH &DQH[LVWLQZDWHUDVDQHPXOVLRQFDXVLQJIRDPLQJDQGIRXOLQJ

,QFRQWH[WWRERLOHUZDWHUWKHILUVWQRWLFHDEOHREVHUYDWLRQLVKDUGQHVVZKLFKLVFRPSRVHGSULPDULO\RI&DOFLXP
&D DQG0DJQHVLXP 0J PLQHUDOV7KHKDUGQHVVLVSULPDULO\UHVSRQVLEOHIRUVFDOHIRUPDWLRQ7KHRWKHU
HOHPHQWVDQGWKHLUHIIHFWWRERLOHUVXUIDFHVDUHOLVWHGEHORZ

&RPPRQ,PSXULWLHVRI:DWHUDQGWKHLU(IIHFWV

1DPH &RPPRQ1DPH (IIHFW

&DOFLXPFDUERQDWH&D&2 &KDONOLPHVWRQH 6RIWVFDOH

&DOFLXPELFDUERQDWH&D+&2  6RIWVFDOH&2

&DOFLXPVXOSKDWH&D62 *\SVXPSODVWHURISDULV +DUGVFDOH

&DOFLXPFKORULGH&D&O  &RUURVLRQ

0DJQHVLXPFDUERQDWH0J&2 0DJQHVLWH 6RIWVFDOH

0DJQHVLXPELFDUERQDWH0J+&2  6FDOH&RUURVLRQ

0DJQHVLXPVXOSKDWH0J62 (SVRPVDOW &RUURVLRQ

6RGLXP&KORULGH1D&O &RPPRQVDOW (OHFWURO\VLV

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


1DPH &RPPRQ1DPH (IIHFW

6RGLXPFDUERQDWH1D&2 :DVKLQJ6RGD $ONDOLQLW\

6RGLXPELFDUERQDWH1D+&2 %DNLQJ6RGD 3ULPLQJ)RDPLQJ

6RGLXPK\GUR[LGH1D2+ &DXVWLF6RGD $ONDOLQLW\HPEULWWOHPHQW

6RGLXPVXOSKDWH1D62 *ODXEHUVDOWV $ONDOLQLW\

6LOLFRQGLR[LGH6L2 6LOLFD +DUG6FDOH

%HIRUHZHSURFHHGIXUWKHULWLVQHFHVVDU\WRHVWDEOLVKDGHILQLWLRQRIZDWHUTXDOLW\SDUDPHWHUV

&RQGXFWLYLW\$PHDVXUHRIZDWHU¶VDELOLW\WRFRQGXFWHOHFWULFLW\LQFRROLQJZDWHU,WLQGLFDWHVWKHDPRXQWRI
GLVVROYHGPLQHUDOVLQZDWHU&RQGXFWLYLW\LVPHDVXUHGLQPLFURPKRVDQGFDQYDU\IURPDIHZIRUGLVWLOOHG
ZDWHUWRRYHUIRUVDOLQHZDWHU

S+S+LVWKHPHDVXUHRIWKHGHJUHHRIDFLGLW\RUEDVLFLW\RIVROXWLRQ7KHS+VFDOHUDQJHVIURP2WRZLWK
]HUREHLQJWKHPRVWDFLGLFDQGWKHPRVWEDVLFRUDONDOLQH&RQWURORIS+LVFULWLFDOIRUWKHPDMRULW\RIERLOHU
ZDWHUWUHDWPHQWSURJUDPV

.H\LQGLFDWRUVDUH

• $FKDQJHRIRQHS+YDOXHUHSUHVHQWVDFKDQJHRIWLPHVLQUHODWLYHDFLGLW\RUDONDOLQLW\)RUH[DPSOHD
S+RILVWHQWLPHVPRUHDFLGLFWKDQDS+RI

• $FLGVDQGDONDOLVKDYHWKHHIIHFWRILQFUHDVLQJWKHFRQGXFWLYLW\RIZDWHUDERYHWKDWRIDQHXWUDOVDPSOH
)RUH[DPSOHDVDPSOHRIZDWHUZLWKDS+YDOXHRIZLOOKDYHDKLJKHUFRQGXFWLYLW\WKDQDVDPSOHWKDW
KDVDS+YDOXHRI

• ,QJHQHUDOZKHQS+LVEHORZUHFRPPHQGHGUDQJHVWKHFKDQFHVIRUFRUURVLRQLQFUHDVHDQGZKHQS+LV
DERYHUHFRPPHQGHGUDQJHVWKHFKDQFHVIRUVFDOHIRUPDWLRQLQFUHDVH

• $FFRUGLQJWR$60(JXLGHOLQHVWKHERLOHUZDWHU VOHYHORIS+PXVWEHPDLQWDLQHGDERYHWRHQVXUHWKDW
WKHSURSHUFKHPLFDOUHDFWLRQRFFXUVEHWZHHQWKHFDOFLXPDQGPDJQHVLXPLRQVDQGWKHSKRVSKDWH
PROHFXOHV


$ONDOLQLW\$ONDOLQLW\LVDPHDVXUHRIWKHELFDUERQDWH +&2 FDUERQDWH &2 DQGK\GUR[\O 2+ LRQVLQ
ZDWHU,WLVSRVVLEOHIRUWKHVHLRQVWRH[LVWVLPXOWDQHRXVO\WKRXJKRQO\WKHELFDUERQDWHDQGFDUERQDWHLRQV
DUHIRXQGLQQDWXUDOZDWHUVXSSOLHV

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


.H\LQGLFDWRUVDUH

• ,QERLOHUIHHGZDWHUWZRIRUPVRIDONDOLQLW\DUHWKHFDUERQDWH &2 DONDOLQLW\DQGELFDUERQDWH +&2 


DONDOLQLW\%LFDUERQDWHDONDOLQLW\LVE\IDUWKHPRVWFRPPRQ

• 0DONDOLQLW\RUWRWDODONDOLQLW\LVGHILQHGDVWKHVXPRIFDUERQDWHELFDUERQDWHDQGK\GUR[LGH

• 3DONDOLQLW\RUSKHQRSKWDOHLQLVGHILQHGDVRQHKDOIRIWKHFDUERQDWHDONDOLQLW\SOXVDOORIWKHK\GUR[LGH
DONDOLQLW\

• &DUERQDWHDQGELFDUERQDWHDONDOLQLWLHVFDQFRPELQHZLWKFDOFLXPDQGPDJQHVLXPKDUGQHVVWRIRUPVFDOH
LQERLOHUZDWHUV\VWHPV

• $ONDOLQLW\DQGS+DUHUHODWHGEHFDXVHLQFUHDVHLQS+LQGLFDWHVLQFUHDVHVLQDONDOLQLW\DQGYLFHYHUVD

• :KHQZDWHUZLWKFDUERQDWHRUELFDUERQDWHDONDOLQLW\LVKHDWHGWKHDONDOLQLW\LVEURNHQGRZQWRFDUERQ
GLR[LGH7KH&2UHOHDVHGFRPELQHVZLWKWKHZDWHUWRJLYHFDUERQLFDFLGZKLFKFDQFDXVHFRUURVLRQRI
WKHERLOHULQWHUQDOV7KHFRUURVLRQSURGXFWVUHDFWIXUWKHUZLWKDONDOLQLW\DQGWKHGHSRVLWVFDQEXLOGXSLQ
WKHVDPHPDQQHUDVFDOFLXPFDUERQDWHVFDOH


+DUGQHVV:DWHULVUHIHUUHGWRDVEHLQJHLWKHUµKDUG¶RUµVRIW¶+DUGZDWHUFRQWDLQVVFDOHIRUPLQJLPSXULWLHV
ZKLOHVRIWZDWHUFRQWDLQVOLWWOHRUQRQH

.H\LQGLFDWRUVDUH

• +DUGQHVVLVFRPSRVHGSULPDULO\RI&DOFLXP &D DQG0DJQHVLXP 0J PLQHUDOV7KHVHDUHSULPDULO\


UHVSRQVLEOHIRUVFDOHIRUPDWLRQ7KHVXPRIWKHVHWZRLVWKHWRWDOKDUGQHVV

• 7KHWRWDOKDUGQHVVLVWKHQEURNHQGRZQLQWRWZRFDWHJRULHV

¾&DUERQDWHRUWHPSRUDU\KDUGQHVV&DOFLXPDQGPDJQHVLXPELFDUERQDWHVDUHUHVSRQVLEOHIRU
DONDOLQHKDUGQHVV7KHVDOWVGLVVROYHLQZDWHUWRIRUPDQDONDOLQHVROXWLRQ:KHQKHDWLVDSSOLHGWKH\
GHFRPSRVHWRUHOHDVHFDUERQGLR[LGHDQGVRIWVFDOHRUVOXGJH

¾1RQFDUERQDWHRUSHUPDQHQWKDUGQHVV7KLVLVDOVRGXHWRWKHSUHVHQFHRIWKHVDOWVRIFDOFLXPDQG
PDJQHVLXPEXWLQWKHIRUPRIVXOSKDWHVDQGFKORULGHV7KHVHSUHFLSLWDWHRXWRIVROXWLRQGXHWRWKHLU
UHGXFHGVROXELOLW\DVWKHWHPSHUDWXUHULVHVDQGIRUPKDUGVFDOHZKLFKLVGLIILFXOWWRUHPRYH

• +DUGQHVVSDUWLFXODUO\WKHWHPSRUDU\KDUGQHVVLVWKHPRVWFRPPRQDQGLVUHVSRQVLEOHIRUWKHGHSRVLWLRQ
RIFDOFLXPFDUERQDWHVFDOH

• ,IWKHZDWHULVDONDOLQHDSURSRUWLRQRIWKLVKDUGQHVVHTXDOLQPDJQLWXGHWRWKHWRWDODONDOLQLW\ H[SUHVVHG
DV&D&2 LVFRQVLGHUHGDVDONDOLQHKDUGQHVVDQGWKHUHPDLQGHUDVQRQDONDOLQHKDUGQHVV

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


• 7KHSUHVHQFHRIVLOLFDLQERLOHUZDWHUFDQDOVROHDGWRKDUGVFDOHZKLFKFDQUHDFWZLWKFDOFLXPDQG
PDJQHVLXPVDOWVWRIRUPVLOLFDWHVZKLFKFDQVHYHUHO\LQKLELWKHDWWUDQVIHUDFURVVWKHILUHWXEHVDQGFDXVH
WKHPWRRYHUKHDW

• +DUGQHVVLVPHDVXUHGLQJUDLQVRUSDUWVSHUPLOOLRQZLWKRQHJUDLQRIKDUGQHVVEHLQJSSPRIWKHVH
HOHPHQWV

• 7KHKDUGQHVVLVUHPRYHGIURPWKHZDWHUE\DSURFHVVNQRZQDVSRVLWLYHLRQH[FKDQJH7KLVSURFHVVLV
DOVRNQRZQDVLRQVXEVWLWXWLRQZKHUHVRIW6RGLXP 1D LRQVDUHVXEVWLWXWHGRUH[FKDQJHGIRUWKH
&DOFLXPDQG0DJQHVLXPLRQVDVWKHZDWHUSDVVHVWKURXJKWKHVRIWHQHUWDQN


7KHRWKHULPSRUWDQWSDUDPHWHUVDUH

  7RWDO6XVSHQGHG6ROLGV7KHPHDVXUHRISDUWLFXODWHPDWWHUVXVSHQGHGLQDVDPSOHRIZDWHURU
ZDVWHZDWHU$IWHUILOWHULQJDVDPSOHRIDNQRZQYROXPHWKHILOWHULVGULHGDQGZHLJKHGWRGHWHUPLQHWKH
UHVLGXHUHWDLQHG7KHDPRXQWRIVXVSHQGHGVROLGVPHDVXUHGLQPJO

  7RWDO'LVVROYHG6ROLGV 7'6 7KLVUHSUHVHQWVDOOWKHGLVVROYHGFRQVWLWXHQWVIRUHJ&D&ODQG1DHWF


,WLVPHDVXUHGLQPJO7KHWHUPV7'6DQGFRQGXFWLYLW\RIZDWHUDUHLQWHUUHODWHG

  7RWDO&DWLRQV&DWLRQVDUHPHWDOOLFSDUWVDQGFDUU\SRVLWLYHFKDUJHVFDOFLXPVRGLXPPDJQHVLXPDUH
DWWUDFWHGWRWKHFDWKRGH

  7RWDO$QLRQV$QLRQVDUHQRQPHWDOOLFDQGFDUU\QHJDWLYHFKDUJHVELFDUERQDWHVFDUERQDWHFKORULGH
VXOSKDWHDUHDWWUDFWHGWRWKHDQRGH

  %2'6LJQLI\%LRORJLFDO2[\JHQ'HPDQGDQGLVPHDVXUHGLQPJO

  &2'&KHPLFDO2[\JHQ'HPDQGDQGLVPHDVXUHGLQPJO

  72&7RWDO2UJDQLF&DUERQDQGLVPHDVXUHGLQPJO

  7RWDO6LOLFDWKDWLVPHDVXUHGLQPJORI6L2

  7XUELGLW\VLJQLI\VXVSHQGHGPDWWHULQZDWHURUZDVWHZDWHUWKDWVFDWWHUVRURWKHUZLVHLQWHUIHUHVZLWKWKH
SDVVDJHRIOLJKWWKURXJKWKHZDWHU

:$7(55(/$7('352%/(06

7KHFKHPLVWU\RIZDWHUKDVDGLUHFWLPSDFWRQWKHWZRPDLQSUREOHPVRIERLOHUZDWHUV\VWHP

  6FDOH

  &RUURVLRQ

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


%RWKRIWKHVHDULVHIURPGLIIHUHQWJURXSRIFRQWDPLQDQWV7KHIRUPHULVGXHWRGHSRVLWLRQRI&DDQG0JVDOWV
DWKLJKWHPSHUDWXUHVLQWRSURGXFWVOLNHFDUERQDWHK\GUR[LGHVXOSKDWHDQGVLOLFDWHV7KHSURGXFWVRIFRUURVLRQ
IRUH[DPSOHVLOWDQGVOXGJHPD\DOVRDGGWRVFDOHIRUPDWLRQ

7KHFRUURVLRQVSULQJVIURPGLVVROYHGJDVHVOLNH2LQIHHGZDWHUDQG&2RULJLQDWLQJIURPWKHGHFRPSRVLWLRQ
RIFDUERQDWHVDQGELFDUERQDWHVDWKLJKERLOHUWHPSHUDWXUHV


6&$/('(326,76

:DWHULPSXULWLHVVXFKDVFDOFLXPPDJQHVLXPDQGVLOLFDFRPPRQO\IRXQGLQPRVWZDWHUVXSSOLHVSUHFLSLWDWH
DWKLJKWHPSHUDWXUHDQGIRUPDGHQVHFRDWLQJRIPDWHULDORQWKHZDWHUVLGHRIWKHERLOHUWXEHV7KLVOD\HURI
FRDWLQJLVWHFKQLFDOO\NQRZQDVµVFDOH¶7KHFKDUDFWHURIWKHVHVFDOHVPD\YDU\IRUPYHU\GHQVHWRSRURXV
IURPORRVHO\KHOGWRWHQDFLRXVO\ERQGHGWRWKHVXUIDFH

7KHNH\SRLQWVWRQRWHKHUHDUH

  6FDOHW\SLFDOO\KDVDWKHUPDOFRQGXFWLYLW\RIDQRUGHURIPDJQLWXGHOHVVWKDQWKHFRUUHVSRQGLQJYDOXHIRU
EDUHVWHHO(YHQWKLQOD\HUVRIVFDOHVHUYHDVDQHIIHFWLYHLQVXODWRUDQGUHWDUGKHDWWUDQVIHU

  6FDOHLQDGGLWLRQWRLWVKLJKLQVXODWLQJYDOXHSURJUHVVLYHO\QDUURZVSLSHLQWHUQDOGLDPHWHUVURXJKHQWXEH
VXUIDFHVDQGLPSHGHSURSHUIORZ

  6FDOHFDXVHVWKHWXEHV¶PHWDOWHPSHUDWXUHWRULVHZKLFKLQFUHDVHVWKHIOXHJDVWHPSHUDWXUH,QH[WUHPH
FDVHVWKHWXEHVIDLOIURPRYHUKHDWLQJ

  6FDOHFDXVHVIXHOZDVWDJHW\SLFDOO\XSWRIRUZDWHUWXEHERLOHUVDQGXSWRLQILUHWXEHERLOHUV


3ULQFLSOH)DFWRUV5HVSRQVLEOHIRU6FDOH)RUPDWLRQ

  &DOFLXP0DJQHVLXPDQG6LOLFDFRQFHQWUDWLRQV

  $ONDOLQLW\RIZDWHU RUS+! 

  +LJKRSHUDWLQJWHPSHUDWXUHV

  +LJKFRQFHQWUDWLRQRIVROLGV 7'6 

  ,QVXIILFLHQWEORZGRZQ

  /RZFRQGHQVDWHUHFLUFXODWLRQ

&D 0JKDUGQHVVLVQ WWKHRQO\FDXVH2WKHULPSXULWLHVVXFKDVLURQVLOLFDFRSSHURLOHWFDUHRIWHQIRXQGLQ


VDPSOHVRIERLOHUVFDOH,QIDFWLWLVUDUHWRILQGVFDOHZKLFKLVQ WWKHUHVXOWRIVHYHUDORIWKHVHLPSXULWLHV

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


+RZGRWKHVHIDFWRUVLQFUHDVHWKHDPRXQWRIVFDOLQJ"

$VDQ\RIDERYHIDFWRUVFKDQJHVVFDOLQJWHQGHQFLHVDOVRFKDQJH

+LJKHUWKHOHYHORIVFDOHIRUPLQJVDOWVWKHJUHDWHUVKDOOEHWKHFKDQFHVRIVFDOHIRUPDWLRQ+DUGQHVVOHYHOV
DUHSULPDULO\DVVRFLDWHGZLWKWKHWHQGHQFLHVRIIHHGZDWHUWREHVFDOHIRUPLQJRUQRW

0RVWVDOWVEHFRPHPRUHVROXEOHDVWHPSHUDWXUHLQFUHDVHV+RZHYHUVRPHVDOWVVXFKDVFDOFLXPFDUERQDWH
EHFRPHOHVVVROXEOHDVWHPSHUDWXUHLQFUHDVHV7KHUHIRUHWKH\RIWHQFDXVHGHSRVLWVDWKLJKHUWHPSHUDWXUHV

$FKDQJHLQS+RUDONDOLQLW\FDQJUHDWO\DIIHFWVFDOHIRUPDWLRQ$VDONDOLQLW\LQFUHDVHVVDOWVVXFKDVFDOFLXP
FDUERQDWHGHFUHDVHVLQVROXELOLW\DQGWKHUHIRUHUHVXOWVLQGHSRVLWVDWKLJKDONDOLQLW\

6RPHPDWHULDOVVXFKDVVLOLFD 6L2 DUHOHVVVROXEOHDWORZHUDONDOLQLWLHV


+RZFDQVFDOHIRUPDWLRQEHFRQWUROOHG"

$Q\VFDOHLQDERLOHULVXQGHVLUDEOH7KHEHVWZD\WRGHDOZLWKVFDOHLVQRWWROHWLWIRUPLQWKHILUVWSODFH6FDOH
IRUPDWLRQLVSUHYHQWHGE\

  ([WHUQDOSUHWUHDWPHQWRIERLOHUPDNHXSZDWHU XVLQJZDWHUVRIWHQHUVGHDONDOL]HUVGHPLQHUDOL]HUVDQG
UHYHUVHRVPRVLV WRUHPRYHKDUGQHVVVFDOHIRUPLQJPLQHUDOVEHIRUHWKH\HQWHUWKHERLOHUV\VWHP

  ,QWHUQDOWUHDWPHQWXVLQJFKHPLFDOIRUPXODWLRQVLQWRWKHERLOHUIHHGZDWHUIRULQVWDQFHSKRVSKDWHWUHDWPHQW
WRNHHSWKHFRPPRQVFDOHIRUPLQJPDWHULDOVLQGLVVROYHGIRUP

  $GRSWLQJSURSHUERLOHUEORZGRZQSUDFWLFHVWROLPLWWKHFRQFHQWUDWLRQRIVFDOHIRUPLQJPDWHULDOVE\
FRQWUROOLQJF\FOHVRIFRQFHQWUDWLRQ$SDUWRIZDWHULVSXUSRVHO\GUDLQHGRII EORZGRZQ WRSUHYHQW
PLQHUDOVEXLOWXS$F\FOHRIFRQFHQWUDWLRQLVWKHUDWLRRIWKHPDNHXSUDWHWRWKHEORZGRZQUDWH

  7KHERLOHUIHHGZDWHULVVXPRIFRQGHQVDWHUHWXUQPDNHXSZDWHU7KHFRQGHQVDWHZDWHUSURGXFHGDVD
UHVXOWRIFRQGHQVDWLRQRIHYDSRUDWHGVWHDPLVYHU\SXUHDQGIUHHRIKDUGQHVVFDXVLQJVDOWV7KHPDNHXS
ZDWHURQWKHRWKHUKDQGKDVLPSXULWLHVZKLFKPXVWEHWUHDWHGWRUHPRYHWKHKDUGQHVVVDOWV7KXVKLJKHU
WKHPDNHXSZDWHUWKHKLJKHUVKDOOEHWKHLPSXULWLHVDQGKLJKHUZLOOEHVFDOHIRUPLQJWHQGHQFLHV

+RZGRHVWKHLQWHUQDOFKHPLFDOWUHDWPHQWZRUN"

7KHUHDUHWZRSULPDU\PHWKRGVXVHGWRFRQWUROKDUGQHVVLQLQWHUQDOERLOHUWUHDWPHQWSUREOHPVWKHFDUERQDWH
F\FOHDQGWKHSKRVSKDWHF\FOH,QJHQHUDOWKHFDUERQDWHF\FOHLVUHFRPPHQGHGIRUV\VWHPVZLWKRSHUDWLQJ
SUHVVXUHVEHORZSVLJ7KHSKRVSKDWHF\FOHLVUHFRPPHQGHGIRUV\VWHPVZLWKRSHUDWLQJSUHVVXUHVDERYH
SVLJ

7KHFDUERQDWHF\FOHLVEDVHGXSRQWKHSULQFLSOHRISUHFLSLWDWLQJWKHKDUGQHVVLQWKHIRUPRIFDUERQDWH7KLV
 
UHDFWLRQSURFHHGVLQWKHIROORZLQJPDQQHU &D  +&2 KHDWSUHVVXUH &D&&+

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


2QFHWKHKDUGQHVVSUHFLSLWDWHLVIRUPHGLWLVFRQGLWLRQHGWKURXJKWKHXVHRIV\QWKHWLFRUQDWXUDOSRO\PHUV,Q
DSK\VLFDOUHDFWLRQWKHFDOFLXPFDUERQDWHPROHFXOHLVDWWDFKHGWRWKHSRO\PHUPROHFXOHDQGGURSSHGWRWKH
ERWWRPRIWKHERLOHUDVIOXLGVOXGJH$VWKHSRO\PHUPROHFXOHVEHJLQWRDFFXPXODWHDWWKHERWWRPRIWKHERLOHU
WKH\DUHUHPRYHGIURPWKHERLOHUWKURXJKERWWRPEORZGRZQ

7KHSKRVSKDWHF\FOHLVEDVHGXSRQWKHSULQFLSOHRISUHFLSLWDWLQJWKHFDOFLXPDQGPDJQHVLXPKDUGQHVVZLWK
SKRVSKDWH2QFHWKHKDUGQHVVSKRVSKDWHSUHFLSLWDWHLVIRUPHGLWDOVRLVFRQGLWLRQHGDVVOXGJHWKURXJKWKH
XVHRIV\QWKHWLFRUQDWXUDOSRO\PHUV,QWKLVSK\VLFDOUHDFWLRQPDQ\FDOFLXPSKRVSKDWHPROHFXOHVDWWDFKWR
RQHSRO\PHUPROHFXOHDQGGURSDVIOXLGVOXGJHWRWKHERWWRPRIWKHERLOHUZKHUHWKH\FDQEHEORZQGRZQ
$FFRUGLQJWR$60(JXLGHOLQHVWKHERLOHUZDWHU VOHYHORIS+PXVWEHPDLQWDLQHGDERYHWRHQVXUHWKDWWKH
SURSHUFKHPLFDOUHDFWLRQRFFXUVEHWZHHQWKHFDOFLXPDQGPDJQHVLXPLRQVDQGWKHSKRVSKDWHPROHFXOHV

6KRXOGXQH[SHFWHGKDUGQHVVUHVXOWDSKRVSKDWHUHVLGXDOVKRXOGEHPDLQWDLQHG+RZHYHUWKHUHLVDPDMRU
GLVDGYDQWDJHWRXVLQJDSKRVSKDWHWRSUHFLSLWDWHKDUGQHVV0DJQHVLXPSKRVSKDWHIRUPVDYHU\VWLFN\
VOXGJHDQGIUHTXHQWO\WKHVOXGJHGURSVRQWRWKHKHDWWUDQVIHUVXUIDFHVDQGIRUPVGHSRVLWV


+RZGRHVWKHVFDOHFRQGLWLRQLQJZRUN"

6FDOHFRQGLWLRQHUVPRGLI\WKHFU\VWDOVWUXFWXUHRIVFDOHFUHDWLQJDEXON\WUDQVSRUWDEOHVOXGJHLQVWHDGRIKDUG
GHSRVLW

:KHQKDUGQHVVLVFRQWUROOHGWKURXJKFDUERQDWHDQGSKRVSKDWHSURJUDPVWKHUHVXOWLQJVOXGJHPXVWEH
FRQGLWLRQHGLQWRDIOXLGVXEVWDQFHIRUHDVHLQERWWRPEORZGRZQ6OXGJHFRQGLWLRQHUVJHQHUDOO\DUHYHU\ORQJ
V\QWKHWLFRUQDWXUDOFKDLQVRISRO\PHULFPROHFXOHV7KHVOXGJHFRQGLWLRQHUSK\VLFDOO\ERQGVZLWKWKHFDOFLXP
FDUERQDWHRUSKRVSKDWHIRUPHGLQWKHERLOHUWRSUHYHQWWKHIRUPDWLRQRISUHFLSLWDWHGVFDOHRQWKHKHDWWUDQVIHU
VXUIDFHV

6HYHUDORIWKHPRVWSRSXODULQWHUQDOERLOHUVOXGJHFRQGLWLRQHUVDUHVRGLXPSRO\FU\ODWHOLJQLQVRGLXP
SRO\PHWKDFU\ODWHDQGVXOIRQDWHGFRSRO\PHUV

,WLVLPSRUWDQWWRUHPHPEHUWKDWDQHIIHFWLYHERWWRPEORZGRZQVFKHGXOHPXVWEHPDLQWDLQHGWRHQVXUHWKDW
WKHFRQGLWLRQHGVOXGJHLVUHPRYHGIURPWKHERLOHU


+RZGRHVWKH6FDOHGHSRVLWV(QHUJ\&RQVXPSWLRQ"

$VDUXOHRIWKXPERQHPLOOLPHWHURIVFDOHEXLOGXSFDQLQFUHDVHIXHOFRQVXPSWLRQE\WZRSHUFHQW

7KHILJXUHVEHORZEULQJRXWWKHLPSRUWDQFHRIWKHVFDOHVDQGLWVLQIOXHQFHRQHQHUJ\FRQVHUYDWLRQ

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


,WLVLQWXLWLYHO\REYLRXVWKDWWKHSUHVHQFHRIHYHQWKHORZWKLFNQHVVVFDOHFDQFDXVHFRQVLGHUDEOHUHGXFHG
KHDWWUDQVIHUUDWHVDFURVVVHQVLWLYHERLOHUVXUIDFHDPRXQWLQJWRODUJHIXHOUDWHFRQVXPSWLRQIRUHTXLYDOHQW
ERLOHUUDWLQJDQGFDSDFLW\


:KDWV\PSWRPVLQGLFDWHOLNHOLKRRGRI6FDOH"

  )OXH*DV7HPSHUDWXUH

$QLQGLUHFWLQGLFDWRURIVFDOHRUGHSRVLWIRUPDWLRQLVIOXHJDVWHPSHUDWXUH$QXSZDUGWUHQGLQIOXHJDV
WHPSHUDWXUHVRYHUZHHNVRUPRQWKVXVXDOO\LQGLFDWHVWKDWDGHSRVLWKDVEXLOWXSRQHLWKHUWKHILUHVLGHRU
ZDWHUVLGHRIERLOHUKHDWH[FKDQJHVXUIDFHV7KHERLOHUVKRXOGEHLQVSHFWHGSURPSWO\

  9LVXDO,QVSHFWLRQV

9LVXDOO\LQVSHFWERLOHUWXEHVZKHQWKHXQLWLVVKXWGRZQIRUPDLQWHQDQFH6FDOHUHPRYDOFDQEHDFKLHYHGE\
PHFKDQLFDOPHDQVRUDFLGFOHDQLQJ,IVFDOHLVSUHVHQWFRQVXOWZLWK\RXUORFDOZDWHUWUHDWPHQWVSHFLDOLVWDQG
FRQVLGHUPRGLI\LQJ\RXUIHHGZDWHUWUHDWPHQWRUFKHPLFDODGGLWLYHVVFKHGXOH

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


+RZWRSUHYHQW6FDOH)RUPDWLRQIURPKDSSHQLQJ"

7KHILUVWDQGIRUHPRVWDVSHFWRIVWRSSLQJVFDOHIRUPDWLRQLVWRKDYHDJRRGLGHDRIWKHPDNHXSZDWHUWKDWLV
IHHGLQJ\RXUV\VWHP,I\RXDUHQ WVXUHKDYHDFHUWLILHGODERUDWRU\FRPSOHWHDIXOODQDO\VLVRQWKHZDWHUVR
\RXFDQPDNHDQLQIRUPHGGHFLVLRQRQZKDWH[DFWO\WKHSRWHQWLDOSUREOHPV\RXPD\HQFRXQWHU

$IWHUGHWHUPLQLQJWKHVHVSHFLILFDVSHFWVRI\RXUPDNHXSZDWHURQHFDQFRQVXOWDZDWHUWUHDWPHQWH[SHUWZKR
FDQJXLGH\RXWKURXJKDSURJUDPWKDWILWV\RXUVLWXDWLRQ$FRPSOHWHSURJUDPZLOOJHQHUDOO\LQFOXGHVOXGJH
EXLOGXSS+OHYHOVR[\JHQUHPRYDOFRQGHQVDWHWUHDWPHQWDQGDONDOLQLW\OHYHOV

1RUPDOO\SUHVRIWHQLQJWKHZDWHUEHIRUHIHHGLQJLWWRWKHERLOHULVWKHILUVWVWHSLQHOLPLQDWLQJVFDOHIRUPDWLRQV
(YHQZKHQWKHPDNHXSLVVRIWWKHUHLVVWLOODQHHGIRUFKHPLFDOVFDOHLQKLELWRUVLQVLGHWKHERLOHU:LWKSURSHU
WUHDWPHQWWKHSUREOHPVRIORVWHIILFLHQF\WXEHGDPDJHDQGORVWSURGXFWLRQFDQEHDYRLGHGRUJUHDWO\
UHGXFHG3URSHUWUHDWPHQWUHTXLUHVWKHULJKWEDODQFHRIFKHPLFDOWUHDWPHQWDQGFRQWURO

$FXUVRU\RYHUYLHZRIWKHYDULRXVSRVVLELOLWLHVLVSURYLGHGODWHULQWKLVFRXUVH


&25526,21

:KDWFDXVHVFRUURVLRQLQERLOHUV"

7KHPRVWFRPPRQVRXUFHRIFRUURVLRQLQERLOHUV\VWHPVLVGLVVROYHGJDVHVR[\JHQFDUERQGLR[LGHDQG
DPPRQLD2IWKHVHR[\JHQLVWKHPRVWDJJUHVVLYH7KHLPSRUWDQFHRIHOLPLQDWLQJR[\JHQDVDVRXUFHRI
SLWWLQJDQGLURQGHSRVLWLRQFDQQRWEHRYHUHPSKDVL]HG(YHQVPDOOFRQFHQWUDWLRQVRIWKLVJDVFDQFDXVH
VHULRXVFRUURVLRQSUREOHPV

0DNHXSZDWHULQWURGXFHVDSSUHFLDEOHDPRXQWVRIR[\JHQLQWRWKHV\VWHP2[\JHQFDQDOVRHQWHUWKHIHHG
ZDWHUV\VWHPIURPWKHFRQGHQVDWHUHWXUQV\VWHP3RVVLEOHUHWXUQOLQHVRXUFHVDUHGLUHFWDLUOHDNDJHRQWKH
VXFWLRQVLGHRISXPSVV\VWHPVXQGHUYDFXXPWKHEUHDWKLQJDFWLRQRIFORVHGFRQGHQVDWHUHFHLYLQJWDQNV
RSHQFRQGHQVDWHUHFHLYLQJWDQNVDQGOHDNDJHRIQRQGHDHUDWHGZDWHUXVHGIRUFRQGHQVDWHSXPSVHDODQGRU
TXHQFKZDWHU:LWKDOORIWKHVHVRXUFHVJRRGKRXVHNHHSLQJLVDQHVVHQWLDOSDUWRIWKHSUHYHQWLYHSURJUDP


:KDWW\SHVRIFRUURVLRQH[LVWVLQERLOHUZDWHUV\VWHPV"

7KHPRVWFRPPRQW\SHRIERLOHUFRUURVLRQLVORFDOL]HGµ3LWWLQJ¶DWWDFN7KHPDLQVRXUFHIRUSLWWLQJDWWDFNLV
GLVVROYHGR[\JHQZKLFKFDXVHVVPDOOEXWGHHSSLQSRLQWKROHVWKDWHYHQWXDOO\SHQHWUDWHERLOHUWXEHZDOOVDQG
FDXVHWKHLUIDLOXUH2QO\VPDOODUHDRIWKHPHWDOFRUURGHVEXWLWLVHQRXJKWRFDXVHPDMRUGLVUXSWLRQVRIERLOHU
V\VWHPV7KHGHJUHHRIR[\JHQDWWDFNGHSHQGVRQWKHFRQFHQWUDWLRQRIGLVVROYHGR[\JHQWKHS+DQGWKH
WHPSHUDWXUHRIWKHZDWHU

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


7KHRWKHUW\SHLVWKHJHQHUDODWWDFNZKHUHWKHFRUURVLRQLVXQLIRUPO\GLVWULEXWHGRYHUWKHPHWDOVXUIDFH
WKURXJKRXWWKHERLOHUV\VWHPQHWZRUN7KHFRQVLGHUDEOHDPRXQWRILURQR[LGHSURGXFHGGXHWRJHQHUDO
FRUURVLRQFRQWULEXWHVWRIRXOLQJSUREOHPV


:KDWZDWHUFKDUDFWHULVWLFVDIIHFWFRUURVLRQ"

  2[\JHQDQGRWKHUGLVVROYHGJDVVHV

  'LVVROYHGRUVXVSHQGHGVROLGV

  $FLGLW\ RUS+ 

  9HORFLW\

  7HPSHUDWXUH

,QJHQHUDOFRUURVLRQLQERLOHUVFDQDOZD\VEHWUDFHGWRRQHRUERWKRIWKHIROORZLQJSUREOHPV

)LUVWWKHGLVVROYHGR[\JHQHQWHULQJWKHV\VWHPYLDWKHIHHGZDWHURUFDQLQILOWUDWHWKHERLOHUV\VWHPDWYLUWXDOO\
DQ\SRLQW2[\JHQGLVVROYHGLQZDWHULVHVVHQWLDOIRUWKHFDWKRGLFUHDFWLRQWRWDNHSODFH

6HFRQGFRPPRQFDXVHRIFRUURVLRQLQERLOHUV\VWHPVLVORZS+ZLWKLQWKHERLOHU7KLVUHGXFHGS+PD\UHVXOW
IURP&2LQILOWUDWLRQRUIRUPFRQWDPLQDWLRQE\RWKHUFKHPLFDOV


+RZGRGLVVROYHGRUVXVSHQGHGVROLGVDIIHFWFRUURVLRQ"

'LVVROYHGVROLGVFDQDIIHFWWKHFRUURVLRQUHDFWLRQE\LQFUHDVLQJWKHHOHFWULFDOFRQGXFWLYLW\RIWKHZDWHU7KH
KLJKHULVWKHGLVVROYHGVROLGVFRQFHQWUDWLRQWKHJUHDWHUVKDOOEHWKHFRQGXFWLYLW\DQGPRUHLVWKHOLNHOLKRRGRI
FRUURVLRQ'LVVROYHGFKORULGHVDQGVXOSKDWHVDUHSDUWLFXODUO\FRUURVLYH


+RZGRHVDONDOLQLW\RUDFLGLW\DIIHFWFRUURVLRQ"

$FLGLFDQGVOLJKWO\DONDOLQHZDWHUFDQGLVVROYHPHWDODQGWKHSURWHFWLYHR[LGHILOPRQPHWDOVXUIDFHV0RUH
DONDOLQHZDWHUIDYRUVWKHIRUPDWLRQRIWKHSURWHFWLYHR[LGHOD\HU7RSUHYHQWFRUURVLRQWKHERLOHUZDWHUQHHGV
WREHVRPHZKDWDONDOLQHDQGQRWDFLGLF

6WDQGDUGSUDFWLFHVFDOOIRUPDLQWDLQLQJS+±IRUVKHOOERLOHUV#SVLJS+RIFRXOGEHXVHGLQ
KLJKHUSUHVVXUHERLOHUV9DULDWLRQVIURPWKHOHYHOVWKDWDUHFRQVLGHUHGRSWLPXPIRUPDLQWHQDQFHRIWKH
PDJQHWLWHOD\HUFDQFDXVHJHQHUDOFRUURVLRQHLWKHUGXHWRDFLGLFRUFDXVWLFDWWDFN

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


• $FLGLF$WWDFN,IERLOHUZDWHUS+KDVGURSSHGVLJQLILFDQWO\EHORZDSKHQRPHQRQFDOOHGZDWHUVLGH
WKLQQLQJFDQRFFXU7KHQRUPDOPDQLIHVWDWLRQRIDFLGLFDWWDFNLVHWFKLQJ,QDUHDVRIKLJKHUIORZWKH
VXUIDFHVDUHVPRRWK,QDGGLWLRQDQ\VWUHVVHGDUHDZRXOGEHDSULQFLSDODUHDIRUDWWDFN

• &DXVWLF$WWDFN&DXVWLFDWWDFNLVHVVHQWLDOO\VWULSSLQJRIWKHPDJQHWLWHILOPDQGW\SLFDOO\RFFXUVGXHWR
H[WUHPHO\KLJKS+RI&DXVWLFFRUURVLRQLVRIWHQHQFRXQWHUHGLQSKRVSKDWHWUHDWHGERLOHUVLQZKLFK
GHSRVLWVRFFXULQKLJKKHDWWUDQVIHUDUHDV7\SLFDOO\DFDXVWLFVROXWLRQLVXVHGWRDFKLHYHDWDUJHWS+
RIEHWZHHQDQG


+RZ$ONDOLQLW\FRQWUROLVLPSRUWDQWLQSUHYHQWLQJFRUURVLRQ"

$ONDOLQLW\FRQWUROLVYLWDOWRWKHVXFFHVVRIDQ\LQWHUQDOERLOHUWUHDWPHQWSURJUDP$ONDOLQLW\LQDERLOHUV\VWHP
SURWHFWVWKHXQLWDJDLQVWDWWDFNDQGPDLQWDLQVWKHSURSHUS+OHYHOIRUWKHQHFHVVDU\FKHPLFDOUHDFWLRQVWR
RFFXU-XVWDVLPSRUWDQWO\DONDOLQLW\SURYLGHVK\GUR[\OLRQVZKLFKIRUPDQLQVROXEOHIHUURXVK\GUR[LGHILOPRQ
PHWDO

7KHOHYHORIDONDOLQLW\UHTXLUHGLQDERLOHUV\VWHPGHSHQGVXSRQVHYHUDOIDFWRUV0RVWRIWHQKRZHYHUWKHOHYHO
RIDONDOLQLW\LVUHODWHGWRWKHRSHUDWLQJSUHVVXUHRIWKHERLOHU

,QVLWXDWLRQVZKHUHWKHFDOFLXPDQGPDJQHVLXPKDUGQHVVKDVEHHQUHPRYHGPHFKDQLFDOO\WKURXJKWKHXVHRI
DVRGLXPH[FKDQJHVRIWHQHUDONDOLQLW\FRQWUROFDQEHDFKLHYHGZLWKRXWWKHDGGLWLRQRIFKHPLFDODONDOLQLW\
EXLOGHUV$IHHGZDWHUDQDO\VLVZLOOVKRZZKHWKHUSURSHUDONDOLQLW\FDQEHDFKLHYHGZLWKRXWWKHXVHRI
VXSSOHPHQWDOFKHPLFDOV


+RZGRHVWKHZDWHUYHORFLW\DIIHFWFRUURVLRQ"

+LJKYHORFLW\ZDWHULQFUHDVHVFRUURVLRQE\WUDQVSRUWLQJR[\JHQWRWKHPHWDODQGFDUU\LQJDZD\WKHSURGXFWVRI
FRUURVLRQDWDIDVWHUUDWH:KHQZDWHUYHORFLW\LVORZGHSRVLWLRQRIVXVSHQGHGVROLGVFDQHVWDEOLVKORFDOL]HG
FRUURVLRQFHOOVWKHUHE\LQFUHDVLQJFRUURVLRQUDWHV


+RZGRHVWHPSHUDWXUHDIIHFWFRUURVLRQ"

7KHLQIOXHQFHRIWHPSHUDWXUHRQWKHFRUURVLYLW\RIGLVVROYHGR[\JHQLVSDUWLFXODUO\LPSRUWDQWLQFORVHGKHDWHUV
DQGHFRQRPL]HUVZKHUHWKHZDWHUWHPSHUDWXUHLQFUHDVHVUDSLGO\(OHYDWHGWHPSHUDWXUHLQLWVHOIGRHVQRW
FDXVHFRUURVLRQEXWVPDOOFRQFHQWUDWLRQVRIR[\JHQDWHOHYDWHGWHPSHUDWXUHVGRFDXVHVHYHUHSUREOHPV7KLV
WHPSHUDWXUHULVHSURYLGHVWKHGULYLQJIRUFHWKDWDFFHOHUDWHVWKHUHDFWLRQVRWKDWHYHQVPDOOTXDQWLWLHVRI
GLVVROYHGR[\JHQFDQFDXVHVHULRXVFRUURVLRQ

$VDUXOHRIWKXPEHYHU\°)LQFUHDVHLQWHPSHUDWXUHFDXVHVFRUURVLRQUDWHVWRGRXEOH

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ



:KLFKPDWHULDOVDUHVXVFHSWLEOHWRFRUURVLRQ"

&DUERQVWHHOLVDFRPPRQO\XVHGPHWDOLQWKHFRQVWUXFWLRQRIERLOHUV\VWHPVWKDWLVPRVWVXVFHSWLEOHWR
FRUURVLRQ,URQLVFDUULHGLQWRWKHERLOHULQYDULRXVIRUPVRIFKHPLFDOFRPSRVLWLRQDQGSK\VLFDOVWDWH0RVWRI
WKHLURQIRXQGLQWKHERLOHUHQWHUVDVLURQR[LGHRUK\GUR[LGH$Q\VROXEOHLURQLQWKHIHHGZDWHULVFRQYHUWHGWR
WKHLQVROXEOHK\GUR[LGHZKHQH[SRVHGWRWKHKLJKDONDOLQLW\ WHPSHUDWXUHLQWKHERLOHU

7KHVHLURQFRPSRXQGVDUHGLYLGHGURXJKO\LQWRWZRW\SHVUHGLURQR[LGH )H2 DQGEODFNPDJQHWLFR[LGH


)H2 7KHUHGR[LGH KHPDWLWH LVIRUPHGXQGHUR[LGL]LQJFRQGLWLRQVWKDWH[LVWIRUH[DPSOHLQWKH
FRQGHQVDWHV\VWHPRULQDERLOHUWKDWLVRXWRIVHUYLFH7KHEODFNR[LGHV PDJQHWLWH DUHIRUPHGXQGHU
UHGXFLQJFRQGLWLRQVWKDWW\SLFDOO\H[LVWLQDQRSHUDWLQJERLOHU

2WKHUPHWDOVLQJHQHUDOVXFKDVFRSSHUVWDLQOHVVVWHHODOXPLQXPDOOR\VDOVRGRFRUURGHEXWWKHSURFHVVLV
VORZ+RZHYHULQVRPHZDWHUVDQGLQSUHVHQFHRIGLVVROYHGJDVHVVXFKDV+6RU1+WKHFRUURVLRQWR
WKHVHPHWDOVLVPRUHVHYHUH GHVWUXFWLYHWKDQWRPLOGVWHHO


:KDWPHWKRGVDUHXVHGWRUHPRYH22DQG&22WRSUHYHQWFRUURVLRQ"

  2[\JHQFRUURVLRQ

7KHPRVWKDUPIXORIWKHGLVVROYHGJDVHVLVR[\JHQ(YHQYHU\VPDOODPRXQWVRIR[\JHQFDQFDXVH
VHYHUHGDPDJH7KHDPRXQWRIGLVVROYHGR[\JHQSUHVHQWLQWKHV\VWHPLVGHSHQGHQWRQWKHWHPSHUDWXUH
RIWKHIHHGZDWHUWKHORZHUWKHIHHGZDWHUWHPSHUDWXUHWKHODUJHUWKHYROXPHRIGLVVROYHGR[\JHQSUHVHQW
7KHR[\JHQFDQEHUHPRYHGERWKPHFKDQLFDOO\DQGFKHPLFDOO\
7KHPHFKDQLFDOPHWKRGVIRUFRQWUROOLQJR[\JHQLQFOXGHWKHGHDUDWRUVDQGYDFXXPGHJDVLILHUV

$Q\UHPDLQLQJR[\JHQLVGHDOWZLWKE\WKHDGGLWLRQRIDFKHPLFDOR[\JHQVFDYHQJHUVXFKDVFDWDO\]HG
VRGLXPVXOSKLWH7\SLFDOO\SSPRIVRGLXPVXOSKLWHLVVXIILFLHQWWRGHDOZLWKSSPRIGLVVROYHGR[\JHQ

  &DUERQGLR[LGHFRUURVLRQ

&DUERQGLR[LGHFRUURVLRQLVQRUPDOO\FRQWUROOHGE\GULYLQJWKH&2IURPWKHZDWHULQDQDHUDWRURU
GHFDUERQDWRU%RWKUHGXFH&2FRQFHQWUDWLRQWRSSPUDQJH

7KHFDUERQGLR[LGHFRQFHQWUDWLRQLQWKHHIIOXHQWIURPDYDFXXPGHJDVLILHULVW\SLFDOO\SSP7KHHIIOXHQW
FRQFHQWUDWLRQPD\EHGLIIHUHQWLIWKHYDFXXPGHJDVLILHULVVL]HGIRUR[\JHQUHGXFWLRQUDWKHUWKDQFDUERQ
GLR[LGHUHGXFWLRQ

&KHPLFDOLQKLELWRUVLQIRUPRIQHXWUDOL]LQJDPLQHVDUHJHQHUDOO\XVHG

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


:KDWLVSXUSRVHRI'HDHUDWRU"

0DNHXSZDWHULQWURGXFHVDSSUHFLDEOHDPRXQWVRIR[\JHQLQWRWKHV\VWHP2[\JHQFDQDOVRHQWHUWKHIHHG
ZDWHUV\VWHPIURPWKHFRQGHQVDWHUHWXUQV\VWHP

6LQFHPDNHXSZDWHUFRQWDLQVFRQVLGHUDEOHDPRXQWVRIGLVVROYHGR[\JHQFRUURVLRQEHFRPHVDFULWLFDO
UHOLDELOLW\FRQFHUQEHFDXVHKLJKKHDWLQWHQVLW\DWWKHERLOHUWXEHVDFFHOHUDWHVWKHR[LGDWLRQSURFHVV
7KHUHIRUHIHHGZDWHUWRWKHERLOHUPXVWEHPDGHR[\JHQIUHH*HQHUDOO\WKHKLJKHUWKHPDNHXSZDWHUWKH
KLJKHULVWKHGLVVROYHGR[\JHQORDGLQJ

'HDHUDWRULVPRVWFRPPRQO\XVHGHTXLSPHQWWRJHWULGRIGLVVROYHGR[\JHQ9HU\EULHIO\WKHGHDHUDWLRQ
SURFHVVXVHVOLYHVWHDPDQGPHFKDQLFDODJLWDWLRQWRHQFRXUDJHGLVVROYHGR[\JHQWRHVFDSHIURPWKHZDWHU
7KHOLEHUDWHGGLVVROYHGR[\JHQPXVWEHFRQWLQXRXVO\UHPRYHGIURPWKHGHDHUDWRUDQGKHQFHDVPDOOSXUJH
VWUHDPQRUPDOO\RQHSHUFHQWRIERLOHUFDSDFLW\KDVEHHQDFFHSWHGLQGXVWULDOQRUP

6LPSO\VSHDNLQJWKHSXUSRVHRIGHDHUDWLRQLV

 7RUHPRYHR[\JHQFDUERQGLR[LGHDQGRWKHUQRQFRQGHQVDEOHJDVHVIURPIHHGZDWHU

 7RKHDWWKHLQFRPLQJPDNHXSZDWHUDQGUHWXUQFRQGHQVDWHWRDQRSWLPXPWHPSHUDWXUHIRUPLQLPL]LQJ
VROXELOLW\RIWKHXQGHVLUDEOHJDVHVDQGSURYLGLQJWKHKLJKHVWWHPSHUDWXUHZDWHUIRULQMHFWLRQWRWKHERLOHU


'R\RXUHTXLUHDGGLWLRQDOWUHDWPHQWZKHQ'HDHUDWRULVLQVWDOOHG"

<HV&RPSOHWHR[\JHQUHPRYDOFDQQRWEHDWWDLQHGE\PHFKDQLFDOGHDHUDWLRQDORQH(TXLSPHQW
PDQXIDFWXUHUVVWDWHWKDWDSURSHUO\RSHUDWHGGHDHUDWLQJKHDWHUFDQPHFKDQLFDOO\UHGXFHWKHGLVVROYHG
R[\JHQFRQFHQWUDWLRQVLQWKHIHHGZDWHUWRFFSHUOLWHU SSE DQG]HURIUHHFDUERQGLR[LGH7\SLFDOO\
SODQWR[\JHQOHYHOVYDU\IURPWRSSE7UDFHVRIGLVVROYHGR[\JHQUHPDLQLQJLQWKHIHHGZDWHUFDQWKHQ
EHFKHPLFDOO\UHPRYHGZLWKWKHR[\JHQVFDYHQJHUXVXDOO\FDWDO\]HGVRGLXPVXOILWH,WLVFRPPRQSUDFWLFHWR
PDLQWDLQDVXOILWHUHVLGXDORISSPLQWKHIHHGZDWHUDQGLIQHFHVVDU\IHHGVXIILFLHQWFDXVWLFVRGDRU
QHXWUDOL]LQJDPLQHWRLQFUHDVHWKHIHHGZDWHUS+WREHWZHHQDQG


+RZGRFKHPLFDOFRUURVLRQLQKLELWRUVZRUN"

&KHPLFDOLQKLELWRUVUHGXFHRUVWRSFRUURVLRQE\LQWHUIHULQJZLWKFRUURVLRQPHFKDQLVP,QKLELWLQJXVXDOO\DIIHFW
HLWKHUWKHDQRGHRUWKHFDWKRGH

$QRGLFFRUURVLRQLQKLELWRUVHVWDEOLVKDSURWHFWLYHILOPRQWKHDQRGH7KRXJKWKHVHLQKLELWRUVFDQEHHIIHFWLYH
WKH\FDQEHGDQJHURXVLIVXIILFLHQWDQRGLFLQKLELWRULVSUHVHQWWKHHQWLUHFRUURVLRQSRWHQWLDORFFXUVDWWKH
XQSURWHFWHGDQRGHVLWHV7KLVFDXVHVVHYHUHORFDOL]HG RUSLWWLQJ DWWDFN

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


&DWKRGLFFRUURVLRQLQKLELWRUVIRUPDSURWHFWLYHILOPRQWKHFDWKRGH7KHVHLQKLELWRUVUHGXFHWKHFRUURVLRQUDWH
LQGLUHFWSURSRUWLRQWRWKHUHGXFWLRQRIFDWKRGLFDUHD

*HQHUDOFRUURVLRQLQKLELWRUVSURWHFWE\ILOPLQJDOOPHWDOVXUIDFHVZKHWKHUDQRGLFRUFDWKRGLF


:KDWLQKLELWRUVDUHFRPPRQO\XVHGIRU226FDYHQJLQJ"

,QWHUQDOWUHDWPHQWIRUGLVVROYHGR[\JHQFRUURVLRQLVQRUPDOO\DFFRPSOLVKHGE\WKHDGGLWLRQRIVRGLXPVXOILWH
0RVWR[\JHQVFDYHQJHUVFRQWDLQDFDWDO\VWZKLFKVSHHGVWKHUHDFWLRQRIWKHVXOILWHZLWKWKHR[\JHQ,Q
V\VWHPVHTXLSSHGZLWKDGHDHUDWRUWKHVXOILWHVKRXOGEHIHGWRWKHVWRUDJHWDQNRIWKHGHDHUDWRURUWRHLWKHU
WKHVXFWLRQRUSUHVVXUHVLGHRIWKHIHHGZDWHUSXPS,QV\VWHPVZKLFKGRQRWKDYHDGHDHUDWRUWKHVXOILWHFDQ
EHIHGDWDOPRVWDQ\SRLQWLQWKHIHHGZDWHUV\VWHPLQFOXGLQJWKHFRQGHQVDWHWDQN

7KHRWKHUFRPPRQFKHPLFDOVRWKHUWKDQVRGLXPVXOSKLWHELVXOILWHDUH

  +\GUD]LQH

  &DUERK\GUD]LGH

  2UJDQLFEDVHGR[\JHQVFDYHQJHU VXFKDVK\GURTXLQRQHGLHWK\OK\GUR[\ODPLQHRUPHWK\OHWK\O
NHWR[LPH 

$OOWKHDERYHW\SHVUHPRYHHYHQWUDFHDPRXQWVRIR[\JHQ


:KDWLQKLELWRUVDUHFRPPRQO\XVHGIRU&225HPRYDO"

,QWHUQDOWUHDWPHQWIRUFDUERQGLR[LGHLVQRUPDOO\DFFRPSOLVKHGE\WKHXVHRIDYRODWLOHDPLQH$PLQHUHIHUV
WRDQ\RIDQXPEHURIFKHPLFDOVGHULYHGIURPDPPRQLD7KHUHDUHWZRPDMRUJURXSVRIDPLQHVLQSUDFWLFH
QRUPDOO\UHIHUUHGWRDVQHXWUDOL]LQJDPLQHVRUILOPLQJDPLQHVGHSHQGLQJXSRQZKHWKHUWKH\QHXWUDOL]HWKH
DFLGIRUPHGE\FDUERQGLR[LGHRUIRUPDSURWHFWLYHILOPRQWKHPHWDO

  )LOPLQJDPLQHVGRQRWQHXWUDOL]HWKHFDUERQLFDFLGZKLFKIRUPVLQFRQGHQVDWHV\VWHPV,QVWHDGWKH\
IRUPDILOPRQWKHPHWDOZKLFKLVQRQZHWWDEOHRULPSHUYLRXVWRZDWHU7KLVSURWHFWLYHILOPSUHYHQWVWKH
FRUURVLYHLPSXULWLHVIURPFRQWDFWLQJWKHPHWDO%\GHVLJQILOPIRUPHUVKDYHEHHQGHYHORSHGWRIXQFWLRQ
EHVWDWDS+RI,QDGGLWLRQWKHVHDPLQHVDUHKLJKO\VXUIDFHDFWLYHDQGZLOOVORXJKORRVHO\
DGKHUHQWLURQR[LGHDQGRWKHUFRUURVLRQSURGXFWVEDFNWRUHFHLYLQJSRLQWVRUWRWKHERLOHU&DUHPXVWEH
H[HUFLVHGZLWKWKHIHHGRIILOPLQJDPLQHV

  1HXWUDOL]LQJDPLQHVIXQFWLRQE\LQFUHDVLQJWKHS+RIWKHFRQGHQVDWH1RUPDOO\WKH\DUHIHGDWVXFKDUDWH
WKDWWKHS+RIWKHFRQGHQVDWHLVPDLQWDLQHGVOLJKWO\DERYH6DWLVIDFWRU\UHGXFWLRQRIFDUERQGLR[LGH
FRUURVLRQLVSRVVLEOHZLWKWKHXVHRIDQHXWUDOL]LQJDPLQH,WLVQHFHVVDU\WRVXSSOHPHQWWKLVW\SHRI
FRQGHQVDWHSURWHFWLRQZLWKDQR[\JHQVFDYHQJHUWRUHPRYHGLVVROYHGR[\JHQ

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


3$57,, 0$.(83:$7(5²75($70(17$3352$&+(6

7KHPDNHXSZDWHUHVVHQWLDOO\UDZZDWHUPD\EHVXSSOLHGIURPWKHPXQLFLSDOZDWHUV\VWHPZHOOZDWHURU
RWKHUVRXUFHV6LQFHWKHOLVWRIOLNHO\UDZZDWHULPSXULWLHVLVVRODUJHDQGLQDQ\VDPSOHDGLIIHUHQWVHWPD\EH
SUHVHQWWRYDU\LQJGHJUHHVLWLVREYLRXVWKDWQRVLQJOHWUHDWPHQWFDQEHSUHVFULEHGIRUDOOZDWHUVDPSOHV7KH
WUHDWPHQWWKDWPD\EHRIIHUHGZLOOGHSHQGRQWKHFDUHIXODQDO\VLVRIZDWHUVDPSOH

7KHPRVWFRPPRQIRXQGZDWHUWUHDWPHQWIRULQGXVWULDOERLOHUVLVZDWHUVRIWHQHUZKLFKZRUNVRQDSULQFLSOHRI
LRQH[FKDQJH,QWKHODUJHLQVWDOODWLRQVZKHUHTXDOLW\RIVWHDPLVDSULPHFRQFHUQGHPLQHUDOL]HUV\VWHPLV
FRPPRQO\XVHG


,21(;&+$1*(:$7(562)7(1(5

7KHSXUSRVHRIDZDWHUVRIWHQHULVWRUHPRYHKDUGQHVVIURPWKHERLOHUPDNHXSZDWHU

7KHVRIWHQLQJPHGLDLVFRPPRQO\FDOOHGUHVLQRU=HROLWH7KHSURSHUQDPHIRULWLVSRO\VW\UHQHUHVLQ7KH
UHVLQKDVWKHDELOLW\WRDWWUDFWSRVLWLYHFKDUJHVWRLWVHOI7KHUHDVRQLWGRHVVRLVEHFDXVHLQLWVPDQXIDFWXUHLW
LQKHULWVDQHJDWLYHFKDUJH,WLVDODZRIQDWXUHWKDWRSSRVLWHFKDUJHVDWWUDFWLHDQHJDWLYHZLOODWWUDFWD
SRVLWLYHDQGYLFHYHUVD$VRIWHQHUWDQNFRQWDLQVKXQGUHGVRIWKRXVDQGVRI=HROLWHEHDGV(DFKEHDGLVD
QHJDWLYHLQQDWXUHDQGFDQEHFKDUJHGRUUHJHQHUDWHGZLWKSRVLWLYHLRQV,QDVRIWHQHUWKH=HROLWHLVFKDUJHG
ZLWKSRVLWLYHVRIWVRGLXPLRQV

$VKDUGZDWHUSDVVHVWKURXJKWKH=HROLWHWKHFDOFLXP PDJQHVLXPLRQVDUHVWURQJO\DWWUDFWHGWRWKH
EHDGV$VWKHKDUGLRQVDWWDFKWRWKH=HROLWHEHDGWKH\GLVSODFHWKHVRIWVRGLXPLRQVWKDWDUHDOUHDG\
DWWDFKHGWRWKHEHDG,QHIIHFWWKH6RGLXP 1D LVH[FKDQJHGIRUWKHFDOFLXP PDJQHVLXPZLWKWKH&D 
0JUHPDLQLQJRQWKH=HROLWHEHDGVDQGWKH1DLRQVWDNLQJWKHLUSODFHLQWKHZDWHUIORZLQJWKURXJKWKHVRIWHQHU
WDQN7KHUHVXOWRIWKLVH[FKDQJHSURFHVVLVVRIWZDWHUIORZLQJRXWRIWKHWDQN

)LJXUHEHORZLOOXVWUDWHVWKHUHJHQHUDWLRQVHUYLFHF\FOHVRIDZDWHUVRIWHQHUDQGVKRZVWKHYDULRXVLRQ
H[FKDQJHUHDFWLRQVWKDWWDNHSODFH

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


$VRIWHQHUZLOOFRQWLQXHWRSURGXFHVRIWZDWHUDVORQJDVWKHUHDUHVRGLXPLRQVUHPDLQLQJRQWKHUHVLQWR
H[FKDQJHZLWKWKHFDOFLXP PDJQHVLXPLRQVLQWKHKDUGZDWHU:KHQWKHVXSSO\RIVRGLXPLRQVKDVEHHQ
GHSOHWHGWKHUHVLQPXVWEHUHJHQHUDWHGZLWKDQHZVXSSO\RIVRGLXPLRQV


+RZLVUHJHQHUDWLRQSURFHVVDFFRPSOLVKHG"

7KHUHJHQHUDWLRQSURFHVVRIWKHUHVLQEHDGVLVDFFRPSOLVKHGE\DWKUHHVWHSSURFHVV

  %DFNZDVK7KHIORZRIZDWHUWKURXJKWKHPLQHUDOEHGLVUHYHUVHG7KHPLQHUDOEHGLVORRVHQHGDQG
DFFXPXODWHGVHGLPHQWLVZDVKHGWRWKHGUDLQE\WKHXSZDUGIORZRIWKHZDWHU$QDXWRPDWLFEDFNZDVK
IORZFRQWUROOHUPDLQWDLQVWKHSURSHUIORZUDWHWRSUHYHQWWKHORVVRIUHVLQ

  %ULQH'UDZDQG6ORZ5LQVH2UGLQDU\VDOWKDVWKHFDSDELOLW\WRUHVWRUHWKHH[FKDQJHFDSDFLW\RIWKH
PLQHUDO$JLYHQDPRXQWRIVDOWEULQHLVULQVHGVORZO\WKURXJKWKHPLQHUDOEHG$IWHUWKHVDOWEULQHLV
GUDZQWKHXQLWZLOOFRQWLQXHWRULQVHVORZO\ZLWKZDWHUWRUHPRYHDOORIWKHVDOWEULQHIURPWKHPHGLDEHG

  )DVW5LQVH$KLJKGRZQIORZRIZDWHUUHSDFNVWKHPLQHUDOEHG$Q\WUDFHRIEULQHQRWUHPRYHGLQVORZ
ULQVHLVIOXVKHGWRWKHGUDLQ

7KHXQLWLVWKHQUHWXUQHGWRVHUYLFH7KHEULQHPDNHULVUHILOOHGZLWKIUHVKZDWHUWRIRUPVDOWEULQHIRUWKHQH[W
UHJHQHUDWLRQ7KHWRWDOUHJHQHUDWLRQWLPHLVDSSUR[LPDWHO\PLQXWHV


:KDWIDFWRUVLPSDFWWKHGHVLJQRI,RQ([FKDQJHV\VWHP"

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


$UHDVRQDEO\DFFXUDWHZDWHUDQDO\VLVLVUHTXLUHGWRGHVLJQDQLRQH[FKDQJHLQVWDOODWLRQIRUZDWHUWUHDWPHQW
)ROORZLQJLRQVDUHPRVWFRPPRQO\IRXQGLQDZDWHUVDPSOH
 
  $ONDOLQH(DUWK&DWLRQV&D RU0J 
 
  $ONDOLQH0HWDO&DWLRQV1D . 
  
  7RWDO$ONDOLQLW\ $/. 2+ &2 DQG+&2 
  
  7RWDO6DOWVRI6WURQJ$FLGV 70$ 62 &O 12 


+RZLVWKHZDWHUFKHPLVWU\H[SUHVVHG"

7KHZDWHUFKHPLVWU\LQHQJLQHHULQJSDUODQFHLVGHVFULEHGLQJUDLQVSHUJDOORQDQGSDUWVSHUPLOOLRQ JUDLQRI
KDUGQHVV aSSPRIKDUGQHVVHOHPHQWV 

/HW VVD\WKHUHVXOWRIWKHKDUGQHVVWHVWLVSSP7KLVPHDQVWKDWIRUHYHU\PLOOLRQSRXQGVRIZDWHUWKHUH
DUHSRXQGVRIKDUGQHVVVDOWV GLVVROYHGFDOFLXPDQGPDJQHVLXP 

+DUGQHVVLQSSPPD\EHFRQYHUWHGWRJUDLQVSHUJDOORQE\GLYLGLQJWKHSSPUHDGLQJE\

([DPSOH:DWHU+DUGQHVVRISSPLVFRQYHUWHGWRJUDLQVSHUJDOORQ

GLYLGHG JUDLQVSHUJDOORQ

,WLVFRPPRQSUDFWLFHWRH[SUHVVWKHDPRXQWRIGLVVROYHGLPSXULWLHVDVWKHFDWLRQVDQGDQLRQV7KHVH
DPRXQWVPD\EHH[SUHVVHGLQWHUPVRIWKHLRQVWKHPVHOYHVRUDVWKHLUFDOFLXPFDUERQDWHHTXLYDOHQWV7KH
ODWHULVPRUHSUHYDOHQWDPRQJHQJLQHHUV


+RZWRFRQYHUWDQLRQFRQFHQWUDWLRQWR&D&23HTXLYDOHQW"

7RFRYHUWZDWHUDQDO\VLVSSPDVLRQWRSSPDVFDOFLXPFDUERQDWHIROORZWKHVWHSVEHORZRUUHIHUWRD
VWDQGDUGFDOFLXPFDUERQDWHFRQYHUVLRQWDEOHLQFKHPLFDOERRNV

  6WHS)LQGWKHHTXLYDOHQWZHLJKWRILRQLQTXHVWLRQDQGGLYLGHLWE\ZKLFKLVWKHHTXLYDOHQWZHLJKWRI
FDOFLXPFDUERQDWH

  6WHS0XOWLSOHWKHTXRWLHQWE\WKHSDUWSHUPLOOLRQ SSP FRQFHQWUDWLRQVDVWKHLRQ

  6WHS$IWHUFRPSOHWHFRQYHUVLRQWRFDOFLXPFDUERQDWHHTXLYDOHQWVFKHFNWKHVXPRIWKHWRWDOFDWLRQV
PXVWHTXDOWKHVXPRIWKHWRWDODQLRQV


:K\,RQ([FKDQJH5HVLQVDUH,PSRUWDQW"

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


5HVLQLVDKHDUWRILRQH[FKDQJHV\VWHP7KHUHVLQVSHUIRUPDIXQFWLRQRIH[FKDQJLQJWKHXQGHVLUDEOHLRQVLQ
WKHZDWHUWRWKHGHVLUDEOHRQHV7KHUHDUHPDQ\LRQH[FKDQJHUHVLQVDYDLODEOHWRGD\%\FDUHIXOFKRLFHRIWKH
LQGLYLGXDOLRQH[FKDQJHUHVLQRULQFRPELQDWLRQWKHUHRIILWLVSRVVLEOHWRGHVLJQPDQ\GLIIHUHQWW\SHVRI
V\VWHPVWRDFFRPSOLVKWKHVDPHHQG$Q\ZURQJVHOHFWLRQVKDOOKDYHWKHLPSDFWRQWKHILQDOHIIOXHQWIURPWKH
V\VWHP,WLVVWURQJO\UHFRPPHQGHGWRFRQVXOWDPDQXIDFWXUHURUDQH[SHULHQFHGZDWHUWUHDWPHQWGHVLJQ
HQJLQHHUIRUWKHULJKWVHOHFWLRQ


:KDWDUH=HROLWHV"

=HROLWHVDUHFRPSOH[VLOLFDWHVFRQVLVWLQJRIPDFURPROHFXOHVRIVHYHUDOPHWDOOLFDQGQRQPHWDOOLFR[LGHV
7KHVHDUHVLPSO\UHSUHVHQWHGDV1D=H7KH\KROGVRGLXPLRQLQORRVHIDVKLRQDQGFRQVHTXHQWO\ZKHQWKH\
DUHWUHDWHGZLWKDVROXWLRQFRQWDLQLQJSRVLWLYHLRQVVXFKDV&D 0JWKHVHVKDOOEHH[FKDQJHGZLWKVRGLXP
LRQVFRQWDLQHGLQ=HROLWH=HROLWHXVHGIRUZDWHUVRIWHQLQJSXUSRVHVFDQEHQDWXUDORUV\QWKHWLF6\QWKHWLF
LQRUJDQLF]HROLWHDUHPRUHHIIHFWLYHWKDQQDWXUDO]HROLWHEXWDUHOHVVGXUDEOH7KHVHDUHQRWFDSDEOHRI
UHVLVWLQJDFLGVDQGWKHUHIRUHFDQQRWEHXVHGLQWKHH[FKDQJHRIK\GURJHQLRQV7KHVXVSHQGHGLPSXULWLHV
FDQFORJWKH]HROLWHEHGWKXVKLQGHULQJWKHIXQFWLRQ


+RZWRHVWLPDWHWKHVRIWHQHUFDSDFLW\"

7KHVRIWHQHUFDSDFLW\LVJRYHUQHGE\WKHDPRXQWRIUHVLQ7KHDPRXQWRIKDUGQHVVUHPRYHGE\RQHFXELFIRRW
RIFDWLRQH[FKDQJHUHVLQLVGLUHFWO\GHSHQGHQWRQWKHDPRXQWRIUHJHQHUDWHVDOWXVHGWRFRQYHUWWKHUHVLQWR
WKHVRGLXPIRUP7KHFDSDFLW\RIVRIWHQHUFDQEHVL]HGIURPWKHIRUPXODEHORZ

& 0 7 +5

& &DSDFLW\RIVRIWHQHULQFXELFIHHWRIUHVLQ

0 0DNHXSZDWHUYROXPHSHUKRXULQJDOORQVWKHYROXPHQHHGHGWREHVRIWHQHG SRXQGVSHUJDOORQ 

7 7LPHLQKRXUVGHVLUHGEHWZHHQUHJHQHUDWLRQF\FOHV

+ +DUGQHVVRIZDWHULQJUDLQV SSPSHUJUDLQKDUGQHVV 

5 5HVLQ&DSDFLW\SHUFXELFIRRW WKLVLVYLUWXDOO\DOZD\VJUDLQV 


+RZWRHVWLPDWHWKHFKHPLFDOVUHTXLUHG"

7KHDPRXQWRIFKHPLFDOVUHTXLUHGIRUXVLQJLQWKLVPHWKRGPD\EHHVWLPDWHGIURPWKHIROORZLQJ

&DOFLXP+\GUR[LGHUHTXLUHGSHUOLWHUVRIZDWHUWREHWUHDWHG [ &D&2LQPJOLWHU0J&2LQ


PJOLWHU LQNJ

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


6RGLXP&DUERQDWHUHTXLUHGSHUOLWHURIZDWHUWREHWUHDWHG [ QRQFDUERQDWHKDUGQHVVLQ


PJOLWHU 

6RGLXP$OXPLQDWH¶VUHTXLUHGSHUOLWHUVRIZDWHUWREHWUHDWHG [ WRWDOKDUGQHVVDV&D&2 

7KLVLVVXSSRVHGWRSURYLGHWKHJXLGHOLQHVXSWRDPD[LPXPRIPJOLWHUKDUGQHVV,QFDVHRIKLJKHU
KDUGQHVVOHYHOVLQWKHIRUPRI&D&2WKHTXDQWLW\RIVRGLXPDOXPLQDWHPD\KDYHWREHLQFUHDVHGE\DERXW
RUVR


:KDWDUHWKHOLPLWDWLRQVRI6RIWHQLQJ"

8VHRIWKHVRGLXP]HROLWHSURFHVVRQPDNHXSZDWHUZLWKDKLJKDONDOLQLW\PD\UHVXOWLQH[FHVVLYHERLOHUZDWHU
DONDOLQLW\DQGOLWWOHRUQRUHGXFWLRQLQEORZGRZQ7KHVRGLXPF\FOHZDWHUVRIWHQHUUHPRYHVWKHKDUGQHVVIURP
WKHZDWHUEXWDOORZVWKHDONDOLQLW\WREHFDUULHGIRUZDUG

:KHQXQVRIWHQHGZDWHULVXVHGDOOKDUGQHVVVKRXOGEHUHPRYHGE\SUHFLSLWDWLRQZLWKLQWKHERLOHUWKURXJK
WKHDSSOLFDWLRQRIFKHPLFDO$SRUWLRQRIWKHDONDOLQLW\LVDOVRSUHFLSLWDWHGE\WKLVDSSURDFK

/LWWOHRUQRDONDOLQLW\LVUHPRYHGE\]HROLWHVRIWHQLQJVRDONDOLQLW\FRXOGEHDOLPLWLQJIHHGZDWHUFRQVWLWXHQW
7KHDONDOLQLWLHVQHHGWREHWUHDWHGZLWKDSURFHVVNQRZQDVGHDONDOL]DWLRQ

:DWHUVH[FHHGLQJKDUGQHVVDERYHSSPUHTXLUHVRPHZKDWGLIIHUHQWDUUDQJHPHQWVRIHTXLSPHQWDQG
WHFKQLTXHVRIUHJHQHUDWLRQ


:KDWFRQILJXUDWLRQVFDQ\RXEX\\RXUVRIWHQHUV"

:DWHUVRIWHQHUVFRPHDVVLQJOHPLQHUDOWDQNXQLWV VLPSOH[ GRXEOHPLQHUDOWDQNXQLWV GXSOH[ DQGPXOWLSOH


PLQHUDOWDQNXQLWV6LQFHUHJHQHUDWLRQF\FOHVFDQWDNHDSSUR[LPDWHO\RQHKRXUVLPSOH[XQLWVDUHXVHGRQO\
ZKHQWKLVLQWHUUXSWLRQFDQEHWROHUDWHG7RDYRLGLQWHUUXSWLRQGXSOH[XQLWVDUHXVHGVRWKDWWKHUHJHQHUDWLRQ
RIRQHXQLWFDQEHDFFRPSOLVKHGZKLOHWKHVHFRQGXQLWLVRQOLQH7ULSOH[RURWKHUPXOWLSOH[XQLWVXVXDOO\DUH
WKHUHVXOWRIQHHGIRULQFUHDVHGFDSDFLW\DQGXQLWVFDQEHDGGHGWRNHHSVRIWZDWHUDYDLODEOH7KHUHOLDELOLW\
RIQHZHOHFWURQLFPHWHULQJFRQWUROVIRUUHJHQHUDWLRQKDVDOORZHGXVHUVWRGHSHQGRQVPDOOHUXQLWVZLWKPRUH
IUHTXHQWUHJHQHUDWLRQ

6XPPDUL]LQJ

6RIWHQLQJSURFHVVFRQVLVWVRISDVVLQJKDUGZDWHUWKURXJKDFROXPQRIFDWLRQH[FKDQJHUHVLQLQWKHVRGLXP
IRUP7KHVRGLXPRQWKHUHVLQUHSODFHVWKHREMHFWLRQDEOHFDOFLXPDQGPDJQHVLXPLRQV:LWKVRGLXPEDVH
H[FKDQJHVRIWHQLQJWKHUHLVQRUHGXFWLRQLQWKHWRWDOGLVVROYHGVROLGVOHYHO 7'6LQSDUWVSHUPLOOLRQRUSSP 
DQGQRFKDQJHLQWKHS+RUDONDOLQLW\

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


6RIWHQHUVDUHUHODWLYHO\FKHDSWRRSHUDWHDQGFDQSURGXFHWUHDWHGZDWHUUHOLDEO\IRUPDQ\\HDUV7KH\FDQEH
XVHGVXFFHVVIXOO\HYHQLQKLJKDONDOLQH WHPSRUDU\ KDUGQHVVDUHDVSURYLGHGWKDWDWOHDVWRIFRQGHQVDWH
LVUHWXUQHG:KHUHWKHUHLVOLWWOHRUQRFRQGHQVDWHUHWXUQDPRUHVRSKLVWLFDWHGW\SHRILRQH[FKDQJHLV
SUHIHUDEOH

'($/.$/,=$7,21%<,21(;&+$1*(

7KHGLVDGYDQWDJHRIEDVHH[FKDQJHVRIWHQLQJLVWKDWWKHUHLVQRUHGXFWLRQLQWKH7'6DQGDONDOLQLW\7KLVPD\
EHRYHUFRPHE\WKHSULRUUHPRYDORIWKHDONDOLQLW\DQGWKLVLVXVXDOO\DFKLHYHGWKURXJKWKHXVHRID
GHDONDOL]HU
7KHUHDUHVHYHUDOW\SHVRIGHDONDOL]HUEXWWKHPRVWFRPPRQYDULHWLHVDUHVSOLWVWUHDPGHDONDOL]DWLRQDQG
FKORULGHGHDONDOL]DWLRQ

6SOLWVWUHDPGHDONDOL]DWLRQ6SOLWVWUHDPGHDONDOL]DWLRQHPSOR\VWZRFDWLRQH[FKDQJHXQLWVRSHUDWHGLQ
SDUDOOHORQHLVFRQYHQWLRQDOVRGLXP]HROLWHVRIWHQHUUHJHQHUDWHGZLWKVDOWDQGWKHRWKHUFRQWDLQVWKHVDPH
W\SHRIUHVLQEXWLVUHJHQHUDWHGZLWKDFLG$SRUWLRQRIPDNHXSZDWHUSDVVHVWKURXJKWKHVRGLXP]HROLWHWR
UHPRYHKDUGQHVVE\H[FKDQJLQJFDOFLXPDQGPDJQHVLXPIRUVRGLXPDQGWKHUHPDLQGHUJRHVWKURXJK
DFLGLILHG]HROLWHIRUUHPRYDORIKDUGQHVVDQGDONDOLQLW\7KHK\GURJHQF\FOHFDWLRQXQLWUHPRYHVWKHKDUGQHVV
IURPWKHZDWHUDQGDOVRFUHDWHVVRPHIUHHPLQHUDODFLGLW\

7KHVHWZRIORZVDUHWKHQEOHQGHGDQGSDVVHGWKURXJKDHUDWRURUGHFDUERQDWRU:KHQWKHVHWZRIORZVDUH
EOHQGHGWKHIUHHPLQHUDODFLGLW\IURPWKHK\GURJHQF\FOHFDWLRQXQLWUHDFWVZLWKWKHDONDOLQLW\IURPWKHZDWHU
VRIWHQHUWRSURGXFHFDUERQGLR[LGHDQGZDWHU7KH&2FDQEHHOLPLQDWHGE\DHUDWLRQRUGHJDVLILFDWLRQ

$GMXVWLQJWKHUDWLRRIVRGLXP]HROLWHHIIOXHQWWRK\GURJHQF\FOH DFLG ]HROLWHHIIOXHQWREWDLQVDQ\GHVLUHG


DONDOLQLW\UHGXFWLRQ6SOLWVWUHDPGHDONDOL]DWLRQORZHUVWKHKDUGQHVVOHYHOWRQHDUO\]HURUHGXFHVDONDOLQLW\DQG
UHPRYHVGLVVROYHGVROLGVWRWKHH[WHQWRIDONDOLQLW\UHGXFWLRQ

&KORULGHGHDONDOL]DWLRQ&KORULGHGHDONDOL]DWLRQXVHVWZRLRQH[FKDQJHXQLWVRSHUDWHGLQVHULHV7KHILUVWLV
DFRQYHQWLRQDOVRGLXP]HROLWHVRIWHQHUFRQWDLQLQJFDWLRQH[FKDQJHUHVLQDQGWKHVHFRQGLVDGHDONDOL]DWLRQ
XQLWFRQWDLQLQJDQLRQH[FKDQJHUHVLQ%RWKXQLWVDUHUHJHQHUDWHGZLWKVDOWZKLFKHOLPLQDWHVWKHKDQGOLQJRI
DFLGVUHTXLUHGLQWKHVSOLW±VWUHDPPHWKRG7KHVRGLXP]HROLWHWRUHPRYHKDUGQHVVDQGWKHDQLRQXQLW
H[FKDQJHVELFDUERQDWHDQGVXOSKDWHIRUFKORULGH$ONDOLQLW\RIWKHILQDOHIIOXHQWLVUHGXFHGWRQHDUO\]HUR

7KHFKORULGHSURFHVVGRHVQRWUHPRYHGLVVROYHGVROLGVRUVLOLFD$OODQLRQVLQFOXGLQJELFDUERQDWHDQG
VXOSKDWHDUHH[FKDQJHGWKHUHIRUHKLJKVXOSKDWHZDWHUVDUHFRVWO\WRWUHDWE\FKORULGHGHDONDOL]DWLRQ
%HFDXVHWKLVSURFHVVUHPRYHVQHDUO\DOODONDOLQLW\FDXVWLFVRGDLVDGGHGWRWKHV\VWHPWRREWDLQWKH
QHFHVVDU\K\GUR[LGHDONDOLQLW\LQWKHERLOHUZDWHU

&KORULGHGHDONDOL]DWLRQLVWKHVLPSOHVWDQGPRVWVWUDLJKWIRUZDUGSURFHVVDVLWHOLPLQDWHVWKHKDQGOLQJRIDFLGV
UHTXLUHGLQWKHVSOLWVWUHDPPHWKRG

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


$VFKHPDWLFUHSUHVHQWDWLRQRIDFKORULGHF\FOHGHDONDOL]HUZLWKWKHUHDFWLRQVWKDWWDNHSODFHLVLOOXVWUDWHG
LQILJXUHEHORZ

+$5':$7(5
6DOWVRI&D0J 5(*(1(5$17 5(*(1(5$17
 1D&/  1D&/

$1,21
&$7,21 (;&+$1*(5(6,1
(;&+$1*(5(6,1 HJ
67521*% $6(
'82/,7(& HJ '82/,7($

62)7:$7(5
1D&/
1D+&2 
5(*(1(5$17:$67( 1D62
 
1D12 5(*(1(5$17:$67(
&D&O  
1D&/ 1D+&2 
0J&O 1D62
 
[V1D&/ [V6DOW

5&D &D&O  5+&2  1D+&2


 1D&/ 51D  1D&/ 5&O 
50J 0J&O  562 1D62
  

6,03/(:$7(562)7(1,1* $1,21'($/.$/,=$7,21

'($/.$/,=$7,216&+(0 (


:DWHU3UREOHP 6RIWHQLQJDQG'HDONDOL]DWLRQ 

:KHQWKHWRWDOKDUGQHVVWRDONDOLQLW\UDWLRLVOHVVWKDQRQHDZHDNDFLGFDWLRQUHVLQLVDQHIIHFWLYHZD\RI
WUHDWLQJZDWHU5HVLQVXFKDV'XROLWH&&LVZLGHO\XVHGLQWKHLQGXVWULHVZKLFKVLPXOWDQHRXVO\UHPRYHERWK
KDUGQHVVDQGDONDOLQLW\

$ZHDNDFLGFDWLRQH[FKDQJHUHVLQLVYHU\XVHIXOZKHUHWKHKDUGQHVVH[FHHGVSSP7KHVFKHPHVKRZQ
DERYHLVJRRGIRUVXFKDVFHQDULR

:DWHU3UREOHP 6RIWHQLQJDQG'HDONDOL]DWLRQ 

,IWKHWRWDOKDUGQHVVWRDONDOLQLW\UDWLRLVJUHDWHUWKDQRQHWKHIROORZLQJVFKHPHFRXOGEHPRUHHIIHFWLYHWR
DFKLHYHFRPSOHWHUHPRYDORIERWKKDUGQHVVDQGDONDOLQLW\

2QHRIWKHFRPPRQO\XVHGWHFKQLTXHVRISURGXFLQJVRIWGHDONDOL]HGZDWHULQYROYHVWKHXVHRIDOD\HUHGEHG
FDWLRQXQLW7KLVV\VWHPFRQVLVWVRIDVLQJOHWDQNLRQH[FKDQJHXQLWZLWKDOD\HURIORZHUGHQVLW\ZHDNDFLG
UHVLQRQDOD\HURIKLJKHUGHQVLW\VWURQJDFLGUHVLQ

7KHZHDNDFLGUHVLJQLVUHJHQHUDWHGZLWKDPLQHUDODFLGDQGWKHVWURQJDFLGUHVLQZLWKVRGLXPFKORULGH

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


7KHZHDNDFLGUHVLQUHPRYHVWKHWHPSRUDU\RUFDUERQDWHKDUGQHVVDQGWKHVWURQJDFLGUHVLQUHPRYHWKH
QRQFDUERQDWHRUSHUPDQHQWKDUGQHVV

7KHHIIOXHQWIURPWKLVGXREHGXQLWLVWKHQSDVVHGWKURXJKDQDHUDWRURUGHFDUERQDWRUIRUUHPRYDORI&2

7KHUHDFWLRQVRIWKHLQGLYLGXDOUHVLQVDUHLOOXVWUDWHGLQ)LJXUHEHORZ

+$5'$/.$/,1(:$7(5
&D+&2 &2
 
0J+&2
1D+&2

5(*(1(5$17
5(*(1(5$17:$67( +&/RU+62
 

5(*(1(5$17
5(*(1(5$17:$67( 1D&/
72352&(66

&D62  &D&/  $(5$725


0J62  RU 25
0J&/
 '(&$5%21$725
1D62
  1D&O

/(*(1'6 5($&7,2162):($.$&,'5(6,1

&D+&2 5&D
:($.$&,'5(6,1
0J+&2 
HJ'82/,7(&&    5+ &2   2  50J
+
1D+&2  51D

67521*$&,'5(6,1 5&D &D&O 


 1 $&/ 51D
HJ '82/,7( & 50J 0J& O 

'($/.$/,=$7,21 /$<(5('%('&$7,2181,7

1RWHWKDWWKHGHDONDOL]HUZRXOGVHOGRPEHXVHGZLWKRXWDEDVHH[FKDQJHVRIWHQHUDVWKHVROXWLRQSURGXFHG
LVDFLGLFDQGZRXOGFDXVHFRUURVLRQDQGDQ\SHUPDQHQWKDUGQHVVZRXOGSDVVVWUDLJKWLQWRWKHERLOHU

'(0,1(5$/,=$7,21%<,21(;&+$1*(

7KHGHPLQHUDOL]DWLRQ '0 SURFHVVLVSULPDULO\XVHGZKHUHWRWDOGLVVROYHGVROLGV FRQGXFWLYLW\ LVWKHOLPLWLQJ


IHHGZDWHUFRQVWLWXHQW7KLVSURFHVVZLOOUHPRYHYLUWXDOO\DOOWKHVDOWVWRDFKLHYHZDWHUTXDOLW\DSSURDFKLQJ
GLVWLOOHGZDWHU,WLQYROYHVSDVVLQJWKHUDZZDWHUWKURXJKERWKFDWLRQDQGDQLRQH[FKDQJHUHVLQV6RPHWLPHV
WKHUHVLQVPD\EHFRQWDLQHGLQRQHYHVVHODQGWKLVLVWHUPHGµPL[HGEHG¶GHPLQHUDOL]DWLRQ

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


'HPLQHUDOL]HUVFRQVLVWRILRQH[FKDQJHUHVLQFROXPQVDVWURQJFDWLRQXQLWDQGVWURQJDQLRQXQLW+\GURJHQ
FDWLRQH[FKDQJHFRQYHUWVGLVVROYHGVDOWVWRWKHLUFRUUHVSRQGLQJDFLGIRUPVZKLFKDUHUHPRYHGE\WKHEDVLF
DQLRQH[FKDQJHU

7KHFDWLRQH[FKDQJHULQWKHK\GURJHQIRUPH[FKDQJHVK\GURJHQLRQVIRUWKHSRVLWLYHO\FKDUJHGFDWLRQVLQWKH
ZDWHU7KHHIIOXHQWIURPVXFKDXQLWLVWKHQFDUULHGIRUZDUGWRDQDQLRQH[FKDQJHUHVLQ

7KHDQLRQH[FKDQJHUHVLQLQWKHK\GUR[LGHIRUPH[FKDQJHVK\GUR[LGHLRQVIRUWKHDQLRQVLQWKHZDWHU7KLV
PLJKWEHHLWKHUDZHDNEDVHRUDVWURQJEDVHUHVLQ$ZHDNEDVHUHVLQDGVRUEVWKHHQWLUHDFLGPROHFXOHDQG
QRWMXVWWKHFKORULGHLRQ

7KHSURFHVVFRQVLVWVRIDW\SLFDODFLGEDVHUHDFWLRQZKLFKIRUPVWKHVDOWRIWKDWDFLGLQZDWHU,QPDQ\
DSSOLFDWLRQVDVWURQJEDVHDQLRQUHVLQIROORZVWKHZHDNEDVHUHVLQ7KHVSHQWUHJHQHUDQWIURPWKHVWURQJ
EDVHDQLRQXQLWLVVXIILFLHQWWRUHJHQHUDQWWKHZHDNEDVHDQLRQUHVLQLQPRVWFDVHV

7KHQHWUHVXOWRIWKLVRSHUDWLRQLVUHSODFHPHQWRIWKHGLVVROYHGVDOWVZLWKZDWHU

$VPHQWLRQHGEHIRUHLWLVSRVVLEOHWRXVHPDQ\FRPELQDWLRQVRIWKHYDULRXVFDWLRQDQGDQLRQH[FKDQJH
UHVLQVWRJHWWKHGHPLQHUDOL]HGZDWHU

+$5':$7(5,1)/8(17 ())/8(17)520&$7,21(;&+$1*(5
5(*(1(5$17
6DOWVRI&D0J 5(*(1(5$17
+&/RU+62 1D2+
  1D&2
 
1D2+
67521*$&,'&$7,21 :($.%$6(5(6,1 
5(6,1  HJ'82/,7(& HJ'82/,7($

72$1,21 72352&(66
+&2 &2  25
  67521*% $6(
+62
  5(6,1
5(*(1(5$17:$67(
+&/ 5(*(1(5$17:$67( +&2
 &2 
&D62  +12 
1D&/ +2
0J62  
 1D62
  6L2 
1$62
 

5&D &D62  +62  1D62


 +62
  5+
 5    1D2+  
50J 0J62 +&/ 1D&O    5
+2
51D
 1$62
 
+<'52*(1& <&/(& $7,21( ;&+$1*( :($.%$6(5(6,1

'(0 ,1(5$/,6$7,216&+(0 (


'(6,/,&,=$7,21

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


6LOLFDWHVFDXVHDQRWKHUW\SHRIVFDOLQJDQGFDQEHUHPRYHGZLWKLRQH[FKDQJHRUDPHPEUDQHSURFHVV

,IVLOLFDLVWKHOLPLWLQJIHHGZDWHUFRQVWLWXHQWLWLVUHPRYHGE\DVWURQJO\EDVLFDQLRQH[FKDQJHUHVLQ
UHJHQHUDWHGZLWKFDXVWLFVRGD7ZRV\VWHPVDUHXVHGWKHFKRLFHGHSHQGVRQZKHWKHUDUHGXFWLRQLQWKH
GLVVROYHGVROLGVOHYHODOVRLVUHTXLUHG

  'HVLOLFL]DWLRQXVHVDFRQYHQWLRQVRGLXP]HROLWHVRIWHQHUIROORZHGE\DVWURQJO\EDVLFDQLRQUHVLQXQLW
+DUGQHVVLVUHGXFHGLQWKHFDWLRQXQLWDQGDOODQLRQVDQGVLOLFDDUHUHGXFHGWRQHDUO\]HUR

  $FDWLRQH[FKDQJHULQWKHK\GURJHQIRUP UHJHQHUDWHGZLWKDFLG LVIROORZHGE\DVWURQJEDVHDQLRQ


H[FKDQJHU UHJHQHUDWHGZLWKFDXVWLFVRGD $OOFDWLRQVDQGDQLRQVDUHH[FKDQJHGIRUK\GURJHQDQG
K\GUR[LGHUHVSHFWLYHO\WKXVUHPRYLQJDOOGLVVROYHGVROLGVLQFOXGLQJVLOLFDWRQHDUO\]HUR'HPLQHUDOL]DWLRQ
UHVXOWLQDYHU\SXUHHIIOXHQWEXWWKHFRVWRIRSHUDWLRQLVKLJKDQGPD\QRWEHMXVWLILHGIRUORZWRPRGHUDWH
SUHVVXUHERLOHUV

'HVLOLFL]DWLRQXVLQJPHPEUDQHV\VWHPVLVRIWHQSUHIHUUHGZKHUHGLVVROYHGLRQFRQFHQWUDWLRQVDUHKLJK
EHFDXVHRIRSHUDWLQJFRVWFRQVLGHUDWLRQV+LJKVLOLFDWHOHYHOVDUHGLIILFXOWDQGPD\UHTXLUHFRSUHFLSLWDWLRQ
ZLWKRWKHULRQVRUKLJKWHPSHUDWXUHFDXVWLFUHJHQHUDWLRQRILRQH[FKDQJHV\VWHP

'($(5$7256

0HFKDQLFDOGHDHUDWLRQLVDSURFHVVRIHOLPLQDWLQJ2DQGRWKHUFRUURVLYHJDVHVIURPWKHIHHGZDWHU)UHH
&2LVDOVRUHPRYHGE\GHDHUDWLRQZKLOHLWLVUHOHDVHGZLWKWKHVWHDPLQWKHERLOHUDQGVXEVHTXHQWO\
GLVVROYHVLQWKHFRQGHQVDWH7KLVFDQFDXVHDGGLWLRQDOFRUURVLRQSUREOHPV

6LQFHGLVVROYHGR[\JHQLVDFRQVWDQWWKUHDWWRERLOHUWXEHLQWHJULW\WKHGLVFXVVLRQEHORZLVDLPHGDWUHGXFLQJ
WKH2FRQWHQWRIWKHIHHGZDWHU7KHWZRPDMRUW\SHVRIGHDHUDWRUVDUHWKHWUD\W\SHDQGWKHVSUD\W\SH,Q
ERWKFDVHVWKHPDMRUSRUWLRQRIJDVUHPRYDOLVDFFRPSOLVKHGE\VSUD\LQJFROGPDNHXSZDWHULQWRDVWHDP
HQYLURQPHQW

7UD\7\SH'HDHUDWLQJ+HDWHUV7UD\W\SHGHDHUDWLQJKHDWHUVUHOHDVHGLVVROYHGJDVHVLQWKHLQFRPLQJZDWHU
E\UHGXFLQJLWWRDILQHVSUD\DVLWFDVFDGHVRYHUVHYHUDOURZVRIWUD\V7KHVWHDPWKDWPDNHVLQWLPDWHFRQWDFW
ZLWKWKHZDWHUGURSOHWVWKHQVFUXEVWKHGLVVROYHGJDVHVE\LWVFRXQWHUFXUUHQWIORZ7KHVWHDPKHDWVWKH
ZDWHUWRZLWKLQž)RIWKHVWHDPVDWXUDWLRQWHPSHUDWXUHDQGLWVKRXOGUHPRYHDOOEXWWKHYHU\ODVWWUDFHVRI
R[\JHQ7KHGHDHUDWHGZDWHUWKHQIDOOVWRWKHVWRUDJHVSDFHEHORZZKHUHDVWHDPEODQNHWSURWHFWVLWIURP
UHFRQWDPLQDWLRQ

6SUD\7\SH'HDHUDWLQJ+HDWHUV6SUD\W\SHGHDHUDWLQJKHDWHUVZRUNRQWKHVDPHJHQHUDOSKLORVRSK\DV
WKHWUD\W\SHEXWGLIIHULQWKHLURSHUDWLRQ6SULQJORDGHGQR]]OHVORFDWHGLQWKHWRSRIWKHXQLWVSUD\WKHZDWHU
LQWRDVWHDPDWPRVSKHUHWKDWKHDWVLW6LPSO\VWDWHGWKHVWHDPKHDWVWKHZDWHUDQGDWWKHHOHYDWHG
WHPSHUDWXUHWKHVROXELOLW\RIR[\JHQLVH[WUHPHO\ORZDQGPRVWRIWKHGLVVROYHGJDVHVDUHUHPRYHGIURPWKH

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


V\VWHPE\YHQWLQJ7KHVSUD\ZLOOUHGXFHWKHGLVVROYHGR[\JHQFRQWHQWWRSSEZKLOHWKHVFUXEEHURU
WUD\VIXUWKHUUHGXFHWKHR[\JHQFRQWHQWWRDSSUR[LPDWHO\SSERUOHVV

)RURSWLPXPR[\JHQUHPRYDOWKHZDWHULQWKHVWRUDJHVHFWLRQPXVWEHKHDWHGWRZLWKLQž)RIWKH
WHPSHUDWXUHRIWKHVWHDPDWVDWXUDWLRQFRQGLWLRQV)URPLQOHWWRRXWOHWWKHZDWHULVGHDHUDWHGLQOHVVWKDQ
VHFRQGV7KHVWRUDJHVHFWLRQLVXVXDOO\GHVLJQHGWRKROGHQRXJKZDWHUIRUPLQXWHVRIERLOHURSHUDWLRQDW
IXOOORDG


:KDWDUHLPSRUWDQWFRQVLGHUDWLRQVLQRSHUDWLRQRI'HDUDWRUV"

)RUHIILFLHQWRSHUDWLRQDGHDHUDWRUPXVWVDWLVI\WKHIROORZLQJUHTXLUHPHQWV

  +HDWLQJRIWKHIHHGZDWHU7KHRSHUDWLQJWHPSHUDWXUHLQWKHXQLWVKRXOGEHƒ)DWSVL7KH
SUHVVXUHWHPSHUDWXUHUHODWLRQVKLSLVLPSRUWDQWVLQFHGHDHUDWLRQPXVWRFFXUUDSLGO\IRUTXLFNDQGHIILFLHQW
UHPRYDORIJDVHV

  $JLWDWLRQ$JLWDWLRQLVUHTXLUHGWRGHFUHDVHWKHWLPHDQGKHDWHQHUJ\QHFHVVDU\WRUHPRYHGLVVROYHG
JDVHVIURPWKHZDWHU

  0D[LPL]DWLRQRIVXUIDFHDUHD7KHZDWHUPXVWEHILQHO\GLVSHUVHGWRH[SRVHWKHPD[LPXPVXUIDFHDUHD
WRWKHVWHDP7KLVHQDEOHVWKHZDWHUWREHKHDWHGWRVDWXUDWLRQWHPSHUDWXUHPRUHTXLFNO\DQGUHGXFHVWKH
GLVWDQFHWKHJDVHVKDYHWRWUDYHOWREHOLEHUDWHG

  9HQWLQJ7KHOLEHUDWHGJDVHVPXVWEHDOORZHGWRHVFDSHIURPWKHV\VWHPDVWKH\DUHUHOHDVHG

  7KHUHDUHIHZOLPLWDWLRQV,QOHWZDWHUVKRXOGEHYLUWXDOO\IUHHRIVXVSHQGHGVROLGVWKDWFRXOGFORJVSUD\
YDOYHVDQGSRUWVRIWKHLQOHWGLVWULEXWRUDQGWKHGHDHUDWRUWUD\V,QDGGLWLRQVSUD\YDOYHVSRUWVDQG
GHDHUDWRUWUD\VPD\EHFRPHSOXJJHGZLWKVFDOHWKDWIRUPVZKHQWKHZDWHUEHLQJGHDHUDWHGKDVKLJK
KDUGQHVVDQGDONDOLQLW\OHYHOV,QWKLVFDVHURXWLQHFOHDQLQJDQGLQVSHFWLRQRIWKHGHDHUDWRULVYHU\
LPSRUWDQW


'RHVWKH'HDUDWRUHQVXUHFRPSOHWHSURWHFWLRQDJDLQVW2[\JHQ"

&RPSOHWHR[\JHQUHPRYDOFDQQRWEHDWWDLQHGE\PHFKDQLFDOGHDHUDWLRQDORQH(TXLSPHQWPDQXIDFWXUHUV
VWDWHWKDWDSURSHUO\RSHUDWHGGHDHUDWLQJKHDWHUFDQPHFKDQLFDOO\UHGXFHWKHGLVVROYHGR[\JHQ
FRQFHQWUDWLRQVLQWKHIHHGZDWHUWRFFSHUOLWHU SSE DQG]HURIUHHFDUERQGLR[LGH7\SLFDOO\SODQW
R[\JHQOHYHOVYDU\IURPWRSSE7UDFHVRIGLVVROYHGR[\JHQUHPDLQLQJLQWKHIHHGZDWHUFDQWKHQEH
FKHPLFDOO\UHPRYHGZLWKWKHR[\JHQVFDYHQJHUXVXDOO\FDWDO\]HGVRGLXPVXOILWH,WLVFRPPRQSUDFWLFHWR
PDLQWDLQDVXOILWHUHVLGXDORISSPLQWKHIHHGZDWHUDQGLIQHFHVVDU\IHHGVXIILFLHQWFDXVWLFVRGDRU
QHXWUDOL]LQJDPLQHWRLQFUHDVHWKHIHHGZDWHUS+WREHWZHHQDQG

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ



5(9(56(26026,6 526<67(0 

2VPRVLVLVWKHQDWXUDOSDVVDJHRIDOLTXLGWKURXJKDVHPLSHUPHDEOHPHPEUDQHGXULQJZKLFKWKHOLTXLGIORZV
IURPDVWDWHRIORZFRQFHQWUDWLRQRIVROLGVRULPSXULWLHVWRDVWDWHRIUHODWLYHO\KLJKFRQFHQWUDWLRQ5HYHUVH
RVPRVLVLVWKHUHYHUVHRIWKHQDWXUDORVPRVLVSURFHVVWKDWRFFXUVLQQDWXUH

7RWUHDWZDWHUE\WKHRVPRWLFSURFHVVRVPRVLVPXVWEHUHYHUVHGWRPDNHWKHZDWHUIORZIURPDVWDWHRIKLJK
FRQFHQWUDWLRQRIVROLGVWRDORZFRQFHQWUDWLRQ7KLVLVGRQHE\DSSO\LQJSUHVVXUHUDQJLQJIURPWR
SVLJWRWKHKLJKFRQFHQWUDWLRQVLGHRIWKHPHPEUDQHWKHUHVXOWLVKLJKTXDOLW\ZDWHU

,WLVKLJKO\HIILFLHQWPHWKRGRIREWDLQLQJKLJKTXDOLW\ZDWHU FRVWHIIHFWLYHSDUWLFXODUO\IRUVLWXDWLRQVZKHUH
ZDWHU7'6LVDERYHSSP

2WKHU)DFWVRQ5HYHUVH2VPRVLV

  7KHUHDUHGLIIHUHQWWKHRULHVDERXWWKHZDWHUDQGVDOWWUDQVIHUPHFKDQLVPWKURXJKWKHUHYHUVHRVPRVLV
PHPEUDQHVRQHDVVXPSWLRQLVWKDWFDSLOODULHVDUHVLWXDWHGLQWKHVXUIDFHLIWKHPHPEUDQHWKURXJKZKLFK
WKHSXUHZDWHUIORZVDQRWKHUUHIHUVWRDVROXWLRQGLIIXVLRQSKHQRPHQRQ

  5HYHUVHRVPRVLVSURFHVVGRHVQRWDOORZWKHGLVVROYHGLQRUJDQLFDQGRUJDQLFPDWWHUWRSDVVWKURXJKWKH
PHPEUDQHRURQO\WRDYHU\VPDOOH[WHQW,QDGGLWLRQRUJDQLFPDWWHUDVZHOODVFROORLGVDQGWXUELGLW\DUH
DOPRVWUHPRYHG

  3XUHZDWHULVIRUFHGWKURXJKWKHPHPEUDQHDQGGLVVROYHGLPSXULWLHVUHPDLQRQWKHIHHGVLGHRIWKH
PHPEUDQH

  7KHUHFRYHU\UDWHRUSHUPHDWHW\SLFDOO\UDQJHVIURPIRUVPDOO JDOSHUGD\ V\VWHPVWRIRU


ODUJHU JDOSHUGD\ V\VWHPV

  7KHVLQJOHSDVV52V\VWHPVDUHHPSOR\HGZKHUHZDWHU7'6LVDERXWPJOWRPJO

  'RXEOHSDVV52V\VWHPVDUHHPSOR\HGZKHUHZDWHU7'6LVDERYHPJO

  5HYHUVHRVPRVLVSURFHVVLVJHQHUDOO\SUHFHGHGE\WKRURXJKSUHWUHDWPHQWILOWUDWLRQ$FRUUHFWFKRLFHRI
SUHWUHDWPHQWLVYHU\LPSRUWDQWDVLWLQIOXHQFHVWKHTXDOLW\DQGTXDQWLW\RIWKHSURGXFWDQGDERYHDOOWKH
OLIHVSDQRIWKHPRGXOH

  :LWKLQFUHDVLQJRSHUDWLQJSUHVVXUHDQGWHPSHUDWXUHRIWKHIHHGZDWHUWKHFDSDFLW\RIWKH5HYHUVH
2VPRVLV 52 LQFUHDVHV

  7KHFDSDFLW\RIWKHLQVWDOODWLRQPXVWEHPHDVXUHGDJDLQVWWKHORZHVWIHHGZDWHUWHPSHUDWXUH6LQFHWKH
UDWHGRXWSXWLVEDVHGRQƒ) ƒ& LWPXVWEHGLYLGHGE\WKHDSSURSULDWHWHPSHUDWXUHFRUUHFWLRQ
IDFWRU

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


 )RXOLQJFDQFDXVHWKHFDSDFLW\RIWKHPRGXOHWREHUHGXFHGE\DERXWDWSVL EDUV DQGE\


DWSVL EDUV LQWKUHH\HDUV

 $Q52V\VWHPW\SLFDOO\UHGXFHVWKHVLOLFDFRQFHQWUDWLRQE\±GHSHQGLQJRQWKHIHHGZDWHUTXDOLW\
PHPEUDQHXVHGZDWHUWHPSHUDWXUHDQGPHPEUDQHDUUDQJHPHQW

,QVXPPDU\WKHUHDUHYDULRXVSRVVLEOHFRPELQDWLRQVDQGDUUDQJHPHQWVRILRQH[FKDQJHUHVLQVWRDFKLHYH
UHGXFWLRQLQKDUGQHVVDQGRUGLVVROYHGVROLGV(DFKUHVLQRUFRPELQDWLRQLVHIIHFWLYHIRUFRQWUROOLQJDSDUWLFXODU
SDUDPHWHUPRUHHIIHFWLYHO\,WLVUHFRPPHQGHGWRFRQVXOWDZDWHUWUHDWPHQWHTXLSPHQWVXSSOLHUIRU
DSSURSULDWHVHOHFWLRQ7KHIHZUHVLQVDUH

5HVLQ )XQFWLRQ

=HROLWH6RIWHQHU 7RUHPRYHKDUGQHVVLH&D0J


:HDN$FLG&DWLRQ :$&  7RUHPRYHWKHZHDNDFLGFDWLRQVLHKDUGQHVV&D RU
   
0J DVVRFLDWHGZLWKDONDOLQLW\2+ &2 DQG+&2 

  
6WURQJ$FLG&DWLRQ 6$&  7RUHPRYHDOOWKHFDWLRQV DQLRQVLQFOXGLQJ&D 0J 1D 

. 

  
:HDN%DVLF&DWLRQ :%&  7RUHPRYHVDOWVRIVWURQJDFLGV62 &O 12 

6WURQJ%DVH$QLRQ 6%$  7RUHPRYHDOODQLRQVLQFOXGLQJ6L2DQG&2

0L[HG%HG 0%  ,WLVDPL[WXUHRI6$&DQG6%$UHVLQV7KHIXQFWLRQLVWR
SROLVKDQGUHPRYHUHVLGXDOUHPDLQLQJLRQVLQZDWHU

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


3$57,,,²&21'(16$7( %/2:'2:1:$7(5

%RLOHUIHHGZDWHUFRQVLVWVRIUHWXUQHGFRQGHQVDWHSOXVWKHPDNHXSZDWHUWRVDWLVI\VWHDPGHPDQGV
8QFRQWDPLQDWHGFRQGHQVDWHLVORZLQGLVVROYHGVROLGVDQGDGGVIHZLPSXULWLHVWRWKHIHHGZDWHU0DNHXS
ZDWHUXVXDOO\FRQWULEXWHVPRVWRIWKHFRQWDPLQDQWVWKHUHIRUHWKHPRUHFRQGHQVDWHUHFRYHUHGDQGUHWXUQHG
WKHEHWWHUWKHIHHGZDWHUTXDOLW\

&RQGHQVDWHUHFRYHU\LVLPSRUWDQWWRWKHRYHUDOOHIILFLHQF\RIDERLOHUIRUPDLQUHDVRQV

  &RQGHQVDWHLVYHU\KLJKTXDOLW\ZDWHU7KHPRUHFRQGHQVDWHWKDWLVUHWXUQHGWKHOHVVPDNHXSZDWHUVKDOO
EHXVHG7KHOHVVHUWKHPDNHXSZDWHUWKHOHVVHUVKDOOEHWKHDPRXQWRIFRQWDPLQDQWVLQWURGXFHLQWRWKH
ERLOHUV\VWHP7KHOHVVHUWKHFRQWDPLQDQWVWKHOHVVHUVKDOOEHWKHQHHGIRUERWKH[WHUQDODQGLQWHUQDO
ZDWHUWUHDWPHQW7KLVVDYHVRQWKHYROXPHRIZDWHURQDFFRXQWRIFRPSHQVDWLQJPDNHXSZDWHUDQG
DVVRFLDWHGFRVWRIWUHDWPHQWFKHPLFDOV

  0RUHWKHFRQGHQVDWHUHFRYHU\OHVVHUVKDOOEHWKHFRQGHQVDWHWKDWLVGLVFKDUJHGLQWRDVHZHUV\VWHPDQG
ORZHUVKDOOEHWKHEORZGRZQ7KLVVKDOOUHGXFHWKHVHZHUGLVSRVDOFRVWV

%HVLGHVORZHUFRVWVRQZDWHUWUHDWPHQWFRQGHQVDWHUHFRYHU\OHDGVWRHQHUJ\VDYLQJVXSWR
&RQGHQVDWHLVXVXDOO\YHU\KRW WRƒ) FRPSDUHGWRWKHWHPSHUDWXUHRIPDNHXSZDWHU WRƒ) 
/RRVLQJKRWFRQGHQVDWHPHDQVORRVLQJSUHFLRXVKHDWHTXLYDOHQWWRWHPSHUDWXUHGLIIHUHQWLDORIWKHPDNHXS
DQGFRQGHQVDWHHQWKDOS\

&RQGHQVDWHUHFLUFXODWLRQLVXQVXLWDEOHRQO\ZKHUHWKHUHLVSRVVLELOLW\RIFRQGHQVDWHEHLQJFRQWDPLQDWHG
EHFDXVHRISURFHVVOHDNVDQGGLUHFWSURFHVVFRQWDFW7KHFRQWDPLQDWHGFRQGHQVDWHPXVWEHVHJUHJDWHG
IURPWKHSXUHVWUHDPRWKHUZLVHLWPD\OHDGWRELJJHUIDLOXUHVVDIHW\DQGHIILFLHQF\LVVXHVLWVKRXOGEH
DYRLGHG

(VWLPDWLQJ&RQGHQVDWH5HWXUQ

2QDQLGHDOV\VWHPWKHFRQGHQVDWHUHFRYHU\FRXOGEHZRUNHGRXWDVEHORZ

$VDUXOHVLOLFDRUQHXWUDOL]HGFRQGXFWLYLW\WHVWVRQWKHERLOHUZDWHUVDPSOHSURYLGHDUHDVRQDEOHDFFXUDWH
EDVLVIRUFRQGHQVDWHUHWXUQ

&RQVLGHUDWHVWDQDO\VLVRQDVPDOOERLOHUXVLQJVRIWHQHGZDWHULQGLFDWHIROORZLQJDQDO\VLV

/RFDWLRQ 6LOLFDSSP &RQGXFWLYLW\PLFURPKRV


QHXWUDOL]HG 

%RLOHUPDNHXS  

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


/RFDWLRQ 6LOLFDSSP &RQGXFWLYLW\PLFURPKRV


QHXWUDOL]HG 

&RQGHQVDWH  

)HHGZDWHU  

7KDQEDVHGRQVLOLFDUHVXOWVWKHIROORZLQJHTXDWLRQVFDQEHXVHG

9) 909&««««(TXDWLRQ

9) 909&««««««««(TXDWLRQ

:KHUH

9) 9ROXPHRIIHHGZDWHU

90 YROXPHRIPDNHXSZDWHU

9& 9ROXPHRIFRQGHQVDWH

9&LVHVWLPDWHGE\VROYLQJHTXDWLRQV  PXOWLSO\HTXDWLRQZLWKDQGVXEWUDFWIURPHTXDWLRQ 

9) 90

)URPZKLFK

90   

9& RU

7KHUHIRUHLQDVFHQDULRDERYHWKHLGHDOµFRQGHQVDWHPDNHXS¶VSOLWLVURXJKO\FRQGHQVDWHDQG
PDNHXSZDWHU

,IDOOWKHFRQGHQVDWHVWUHDPVUHWXUQEDFNWRWKHERLOHUDQGQRWKLQJHVFDSHVWKHV\VWHPWKHQWKHPDNHXS
ZDWHUWRSSLQJXSLVPLQLPXP7KHSURFHVVLVHVVHQWLDOO\DFORVHGORRSSURFHVV

0RVWRIWHQKRZHYHUVRPHZDWHURUVWHDPHVFDSHVIURPWKHORRSDQGPDNHXSLVQHFHVVDU\LQRUGHUWR
PDLQWDLQWKHZDWHULQYHQWRU\,QWKHH[WUHPHFDVHZKHUHQRFRQGHQVDWHLVUHWXUQHGWRWKHERLOHUWKHSURFHVV
EHFRPHVDRQFHWKURXJKV\VWHPDQGPDNHXSZDWHUUDWHPDWFKHVVWHDPIORZUDWH

*HQHUDOO\WKHKLJKHUWKHPDNHXSZDWHUWKHKLJKHUVKDOOEHWKHLPSXULWLHVDQGKLJKHUVKDOOEHWKHZDWHU
WUHDWPHQWFRVWV&ORVHGORRSSURFHVVUHTXLULQJPLQLPXPRIPDNHXSZDWHULVWKHEHVWZD\WRHQVXUHRSWLPXP
OHYHOZDWHUTXDOLW\


&RQGHQVDWH:DWHU7UHDWPHQWDQG0RQLWRULQJ

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


&RQGHQVDWHZDWHULVYHU\LPSRUWDQWWR\RXUIDFLOLW\DQGLJQRULQJWKLVXQVHHQFORVHGORRSFRPSRQHQWZLOOVRRQ
FDXVHIDLOXUHVFRVWLQJERWWRPOLQHGROODUV,QJHQHUDOWKHFRQGHQVDWHLVYHU\SXUHIUHHRIVDOWVEXWLWFRXOGEH
FRUURVLYHEHFDXVHLWFRQWDLQVGLVVROYHG&2DQGFDQDGGGLVVROYHGDQGVXVSHQGHGLURQWRWKHIHHGZDWHU


:KDWLVVRXUFHRI&2LQWKHFRQGHQVDWH"

&DUERQDWHDQGELFDUERQDWHDONDOLQLWLHVLQWKHPDNHXSZDWHUEUHDNGRZQXQGHUERLOHUWHPSHUDWXUHDQG
SUHVVXUHWRIRUPFDUERQGLR[LGH &2 ZKLFKLVOLEHUDWHGWRWKHVWHDP'XULQJVWHDPFRQGHQVDWLRQWKH
FDUERQGLR[LGHGLVVROYHVWRIRUPFDUERQLFDFLG,IXQWUHDWHGWKHFRQGHQVDWHUHWXUQSLSLQJYDOYHVDQGWDQNV
H[SHULHQFHVHYHUHJURRYLQJFRUURVLRQ7KHVHSURGXFWVQHXWUDOL]HWKHDFLGLFHIIHFWVRIWKHKRWFDUERQLF
DFLG


:KDWSUHFDXWLRQVDUHVXJJHVWHGIRUSUHYHQWLRQDJDLQVWJURRYLQJFRUURVLRQ"

7KHFRQGHQVDWHV\VWHPGRQRWUHTXLUHHODERUDWHH[WHUQDOWUHDWPHQWDVZLWKPDNHXSZDWHUEXWVRIWPHDVXUHV
OLNHFRQGHQVDWHSROLVKLQJRUFRQGLWLRQLQJPD\EHUHTXLUHGWRLQVXUHWKHLQWHJULW\RI\RXUHTXLSPHQW

7KHUHPHGLHVDQGFDXWLRQVDUHDVIROORZV

  7KHPRVWFRPPRQPHWKRGRIGHDOLQJZLWKWKLVSUREOHPLVWKURXJKWKHXVHRIQHXWUDOL]LQJDPLQHV7KHVH
FKHPLFDOVEHWWHUNQRZQDVPRUSKROLQHDQGF\FORKH[\ODPLQHQHXWUDOL]HWKHFDUERQLFDFLGDQGLQFUHDVH
WKHS+RIWKHFRQGHQVDWH

  $ILOPLQJDPLQHVXFKDVRFW\OGHF\ODPLQHSURYLGHVDQRQZHWWDEOHSURWHFWLYHEDUULHUDJDLQVWERWK
FDUERQLFDFLGDQGR[\JHQ7KHVHFUHDWHDQRLODWWUDFWLYHZDWHUUHSHOOHQWILOPRQPHWDOVXUIDFHVZKLFKLV
UHVLVWDQWWRERWKFDUERQGLR[LGHDQGR[\JHQ

  ,QRUGHUWRPLQLPL]HR[\JHQSLWWLQJDYRODWLOHR[\JHQVFDYHQJHUVXFKDVGLHWK\OK\GUR[\DPLQH '(+$ 
FRXOGEHXWLOL]HG'(+$SURYLGHVEHWWHUUHVXOWVDVLWVFDYHQJHVR[\JHQDQGSDVVLYDWHVRUFRDWVWKH
FRQGHQVDWHV\VWHPPDNLQJLWOHVVVXVFHSWLEOHWRFRUURVLRQ6RGLXPVXOSKLWHDQG+\GUD]LQHDUHRWKHU
FRPPRQO\XVHGFKHPLFDOVIRUR[\JHQVFDYHQJLQJ

$EULHIRYHUYLHZRIFKHPLFDOWUHDWPHQWLVDOVRFRYHUHGLQWKHQH[WVHFWLRQ

%/2:'2:1:$7(5

(YHQWUHDWHGGHPLQHUDOL]HG '0 ERLOHUIHHGZDWHUFRQWDLQVVPDOODPRXQWVRIGLVVROYHGPLQHUDOVDOWV2QJRLQJ


ZDWHUHYDSRUDWLRQLQVWHDPERLOHUVDQGIUHVKERLOHUPDNHXSLQFUHDVHVWKHFRQFHQWUDWLRQRIWKHVHPLQHUDOVDQG
OHDGWRWKHVROLGVDFFXPXODWLRQLQHLWKHUGLVVROYHGRUVXVSHQGHGIRUP

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


  'LVVROYHGVROLGVSURPRWHFDUU\RYHURIZDWHUZLWKWKHVWHDPFDXVLQJZDWHUKDPPHUDQGGDPDJLQJSLSLQJ
YDOYHVRURWKHUHTXLSPHQW&DUU\RYHUDOVRUDLVHVWKHPRLVWXUHFRQWHQWLQWKHVWHDPDIIHFWLQJSURSHU
RSHUDWLRQRIGRZQVWUHDPHTXLSPHQWWKDWXVHVVWHDP

  6XVSHQGHGVROLGVFDXVHVOXGJHRUVHGLPHQWLQWKHERLOHU7KHVHDIIHFWWKHKHDWWUDQVIHUFDSDELOLWLHVRIWKH
SUHVVXUHYHVVHODQGOHDGVWRSUREOHPVUDQJLQJIURPSRRUIXHOWRVWHDPHIILFLHQF\WRSUHVVXUHYHVVHO
GDPDJH

&KHPLFDOGRVLQJRIWKHERLOHUIHHGZDWHUDOVROHDGVWRWKHSUHVHQFHRIVXVSHQGHGVROLGVLQWKHERLOHU7KHVH
ZLOOLQHYLWDEO\FROOHFWLQWKHERWWRPRIWKHERLOHULQWKHIRUPRIVOXGJHDQGDUHUHPRYHGE\DSURFHVVNQRZQDV
ERWWRPEORZGRZQ6WHDPERLOHUVVKRXOGEHEORZQGRZQGDLO\RQFHRUWZLFHWRPDLQWDLQUHFRPPHQGHG
GLVVROYHGVROLGVOHYHOVDQGWRUHPRYHVOXGJHDQGVHGLPHQW


(IIHFWVRILQVXIILFLHQWRU([FHVVLYHEORZGRZQ

,QVXIILFLHQWEORZGRZQPD\OHDGWRFDUU\RYHURIERLOHUZDWHULQWRWKHVWHDPRUWKHIRUPDWLRQRIGHSRVLWV
([FHVVLYHEORZGRZQZLOOZDVWHHQHUJ\ZDWHUDQGFKHPLFDOV7KHRSWLPXPEORZGRZQUDWHLVGHWHUPLQHGE\
YDULRXVIDFWRUVLQFOXGLQJWKHERLOHUW\SHRSHUDWLQJSUHVVXUHZDWHUWUHDWPHQWDQGTXDOLW\RIPDNHXSZDWHU
%ORZGRZQUDWHVW\SLFDOO\UDQJHIURPWRRIERLOHUIHHGZDWHUIORZUDWHEXWFDQEHDVKLJKDVZKHQ
PDNHXSZDWHUKDVKLJKVROLGVFRQWHQW

)RUH[DPSOHFRQVLGHUDOEKUERLOHURSHUDWLQJ#SVLJKDVDEORZGRZQKHDWFRQWHQWRI%WXOE
,IWKHFRQWLQXRXVEORZGRZQV\VWHPLVVHWDWRIWKHPD[LPXPERLOHUUDWLQJWKHQWKHEORZGRZQIORZZRXOG
EHDERXWOEKUFRQWDLQLQJ%WX

$WSHUFHQWERLOHUHIILFLHQF\WKLVKHDWUHTXLUHVDERXWFXIWKURIQDWXUDOJDVZRUWKDERXWSHU
\HDUEDVHGRQKUVRSHUDWLRQSHU\HDUDWSHUFXIW


:KDWLV&\FOHVRI&RQFHQWUDWLRQ"

&\FOHVRIFRQFHQWUDWLRQUHIHUVWRWKHDFFXPXODWLRQRIWKHLPSXULWLHVLQDZDWHUVXSSO\

:KHQZDWHULVFRQYHUWHGWRVWHDPWKHGLVVROYHGVROLGVGRQRWWUDYHOZLWKWKHVWHDPEXWDUHOHIWEHKLQGLQWKH
ERLOHUZDWHU)UHVKPDNHXSZDWHUHQWHUVWKHERLOHUWRUHSODFHWKHDPRXQWORVWWKURXJKVWHDPHYDSRUDWLRQ
:KHQWKLVQHZZDWHULVFRQYHUWHGWRVWHDPPRUHVROLGVDUHOHIWEHKLQG$VVWHDPLVFRQWLQXDOO\SURGXFHG
HYDSRUDWHGDQGUHSODFHGZLWKQHZZDWHUWKHDPRXQWRIVROLGVLQWKHERLOHUFRQWLQXHVWRLQFUHDVHLQGHILQLWHO\
XQWLOWKHZDWHULVXQDEOHWRGLVVROYHLWVRZQLPSXULWLHVRUKROGWKHPLQVROXWLRQ

)RUHYHU\SRXQGRIVWHDPJHQHUDWHGDSRXQGRIZDWHUPXVWEHUHSODFHG7KHDPRXQWRIVROLGVLQWKHZDWHU
ZLOOKDYHGRXEOHGZKHQWKHDPRXQWRIQHZZDWHUWKDWKDVHQWHUHGWKHERLOHULVHTXDOWRWKHDPRXQWRIZDWHU
WKDWZDVXVHGWRRULJLQDOO\ILOOWKHERLOHU:KHQWKHDPRXQWRIVROLGVKDVGRXEOHGWKHUHDUHF\FOHVRI

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


FRQFHQWUDWLRQLQWKHZDWHUZKHQWKHDPRXQWRIVROLGVKDVWULSOHGWKHUHDUHF\FOHVRIFRQFHQWUDWLRQ&\FOHV
RIFRQFHQWUDWLRQLVDQLQGLFDWRURIWKHDPRXQWRIVROLGVEXLOGXSLQWKHZDWHU

%ORZGRZQUDWH &\FOHVRI&RQFHQWUDWLRQ
%ORZGRZQOLPLWVWKHFRQFHQWUDWLRQRILPSXULWLHVLQWKHERLOHUZDWHU$ERLOHURSHUDWLQJRQKLJKTXDOLW\
IHHGZDWHUQHHGVYHU\OLWWOHEORZGRZQ7KHSXUHUWKHIHHGZDWHUWKHOHVVHULVWKHEORZGRZQUHTXLUHGDQG
KLJKHUVKDOOEHWKHF\FOHVRIFRQFHQWUDWLRQ,IWKHIHHGZDWHUTXDOLW\LVLPSURYHGVRWKDWLWLVFRQFHQWUDWHG
WLPHVUDWKHUWKDQWKHEORZGRZQUDWHIRUOEKUVWHDPERLOHULVUHGXFHGIURPWRSHUFHQW

,QFUHDVLQJWKHF\FOHVRIFRQFHQWUDWLRQWRWZLFHWKHRULJLQDOYDOXHVKDOOFXWWKHEORZGRZQDQGHQHUJ\ORVVHVLQ
KDOI2QHZD\WRPD[LPL]HWKHF\FOHVRIFRQFHQWUDWLRQRIWKHERLOHUZDWHULVE\FRQWUROOLQJWKHERLOHUZDWHUDW
WKHKLJKHVWDOORZDEOHFKHPLVWU\OLPLWVDQGIHHGLQJUHFRPPHQGHGOHYHOVRIWUHDWPHQW7KHTXDQWLW\RI
EORZGRZQFDQEHPLQLPL]HGDQGWKHVWHDPSXULW\PDLQWDLQHG,QDFWXDOSUDFWLFHDFRPELQDWLRQRIWKH
PHFKDQLFDOKHDWUHFRYHU\DQGFKHPLFDOWUHDWPHQWLVEHVW

([DPSOH

$OEKERLOHURSHUDWHVDWEDUJ&DOFXODWHWKHEORZGRZQUDWHLIWKHPD[LPXPDOORZDEOHERLOHU
7'6LVDQGWKHERLOHUIHHGZDWHU7'6LVSSP

7KHEORZGRZQUDWHVKDOOEHJRYHUQHGE\HTXDWLRQ

%ORZGRZQUDWH &DSDFLW\ )HHGZDWHU7'6 0D[LPXPDOORZDEOH7'6±)HHGZDWHU7'6 

%ORZGRZQUDWH   ±  OEKU

:KDWSDUDPHWHUVFDQEHXVHGWRHVWDEOLVKWKHF\FOHVRIFRQFHQWUDWLRQRUUHJXODWLQJEORZGRZQ"

7KHUHDUHWZRWHVWVXVHGWRHVWDEOLVKWKHF\FOHVRIFRQFHQWUDWLRQRUWRUHJXODWHWKHIUHTXHQF\DQGYROXPHRI
EORZGRZQ7KHVHDUHFKORULGHOHYHODQGVSHFLILFFRQGXFWDQFH

&KORULGH7HVW

&KORULGHLVFKRVHQDVWKHLQGLFDWRUIRUF\FOHVRIFRQFHQWUDWLRQEHFDXVH

  ,WLVDOZD\VSUHVHQWLQWKHPDNHXSZDWHU

  ,WGRHVQRWFKDQJHFKDUDFWHUZKHQKHDWHG

  ,WGRQRWUHDFWZLWKWKHFKHPLFDOVLQWKHZDWHUWUHDWPHQWDQG

  ,WGRHVQRWOHDYHWKHZDWHULQWKHERLOHUZKHQVWHDPLVSURGXFHG

,IWKH&KORULGHLQWKHZDWHUGRXEOHVDOOWKHVROLGVKDYHGRXEOHG

([DPSOH

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


,IWKHPDNHXSFKORULGHVDUHSSPDQGWKHERLOHUZDWHUFKORULGHVDUHSSPWKHERLOHULVDWF\FOHVRI
FRQFHQWUDWLRQ,IPDNHXSFKORULGHVDUHDWSSPDQGWKHERLOHUZDWHULVDWSSPWKHERLOHULVDWF\FOHVRI
FRQFHQWUDWLRQ

7KH&KORULGH7HVWLVUXQRQDVDPSOHRIWKHUDZZDWHUDQGRQDVDPSOHRIWKHZDWHUIURPWKHERLOHUVLJKW
JODVV:KHQWKH&KORULGHUHDGLQJRIWKHERLOHUZDWHULVWLPHVWKH&KORULGHUHDGLQJRIWKHUDZZDWHUWKHUH
DUHF\FOHVRIFRQFHQWUDWLRQ

6SHFLILF&RQGXFWDQFH7HVW

7KHVHFRQGWHVWXVHGIRUUHJXODWLQJEORZGRZQLVVSHFLILFFRQGXFWDQFH$FRQGXFWLYLW\PHWHULVXVHGWR
PHDVXUHWKHFRQGXFWLYLW\RIWKHPDNHXSZDWHUDVFRPSDUHGWRWKHFRQGXFWLYLW\RIWKHERLOHUZDWHU7KHUDWLR
RIWKHWZRILJXUHVLVWKHF\FOHVRIFRQFHQWUDWLRQ

([DPSOH,IWKHPDNHXSZDWHUFRQGXFWLYLW\LVXPKRVDQGERLOHUZDWHUFRQGXFWLYLW\LVXPKRV·
HTXDOVF\FOHVRIFRQFHQWUDWLRQ
,PSRUWDQW,QJHQHUDOWKHERLOHUVKRXOGQHYHUEHRSHUDWHGRYHU&\FOHVRI&RQFHQWUDWLRQ

0HWKRGVIRUFRQWUROOLQJEORZGRZQ

%ORZGRZQV\VWHPVFRXOGEHHLWKHUPDQXDOO\RUDXWRPDWLFDOO\FRQWUROOHG

  0DQXDOFRQWURO7KHDPRXQWRIEORZGRZQLVGHWHUPLQHGE\SHUIRUPLQJWHVWVWRGHWHUPLQHWKHDPRXQWRI
GLVVROYHGVROLGVLQWKHERLOHUZDWHU7KHRSHUDWRUPXVWEHWKRURXJKO\LQVWUXFWHGLQWKHFRUUHFWEORZGRZQ
SURFHGXUH0XGRUERWWRPEORZGRZQLVXVXDOO\DPDQXDOSURFHGXUHGRQHIRUDIHZVHFRQGVRQLQWHUYDOV
RIVHYHUDOKRXUV,WLVGHVLJQHGWRUHPRYHVXVSHQGHGVROLGVWKDWVHWWOHRXWRIWKHERLOHUZDWHUDQGIRUPD
KHDY\VOXGJH

  $XWRPDWLFEORZGRZQ7KHDXWRPDWLFFRQWUROOHUVVHQVHWKHERLOHU7'6LQWHUPVRIHOHFWULFDOFRQGXFWLYLW\
DQGDXWRPDWLFDOO\RSHQRUFORVHWKHVXUIDFHEORZGRZQOLQHVWRFRQWUROWRH[DFWO\WKHULJKWPLQLPXPOHYHO
7KHRSHUDWRUPXVWFKHFNWKDWWKHFRQWUROVDUHVHWIRUUHTXLUHGEORZGRZQDQGWKDWWKH\DUHIXQFWLRQ
SURSHUO\$XWRPDWLFFRQWUROVFDQKDYHDVLJQLILFDQWLPSDFWRQHIILFLHQF\HVSHFLDOO\LIVWHDPORDGVYDU\
ZLGHO\6XUIDFHRUVNLPPLQJEORZGRZQLVGHVLJQHGWRUHPRYHWKHGLVVROYHGVROLGVWKDWFRQFHQWUDWHQHDU
WKHOLTXLGVXUIDFH6XUIDFHEORZGRZQLVRIWHQDFRQWLQXRXVSURFHVV

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


3$57,9&+(0,&$/6)25%2,/(5:$7(5&21',7,21,1*

,QWHUQDOZDWHUWUHDWPHQWLVXVXDOO\VWLOOUHTXLUHGWRVXSSOHPHQWWKHH[WHUQDOWUHDWPHQW IRUH[DPSOHWKHEDVH
H[FKDQJHV\VWHP DQGLVJHQHUDOO\FDUULHGRXWE\DGGLQJFKHPLFDOVLQPHWHUHGDPRXQWVLQWRHLWKHUWKH
IHHGZDWHUWDQNRUWKHIHHGZDWHUSLSHOLQHSULRUWRLWVHQWU\LQWRWKHERLOHU

7KHREMHFWLYHVRILQWHUQDOZDWHUWUHDWPHQWDUH

  7RSUHYHQWVFDOHIRUPDWLRQIURPORZUHPDLQLQJOHYHOVRIKDUGQHVVWKDWPD\KDYHHVFDSHGWUHDWPHQW
6RGLXPSKRVSKDWHLVQRUPDOO\XVHGIRUWKLVDQGFDXVHVWKHKDUGQHVVWRSUHFLSLWDWHWRWKHERWWRPRIWKH
ERLOHUZKHUHLWFDQEHEORZQGRZQ

  7RGHDOZLWKDQ\RWKHUVSHFLILFLPSXULWLHVSUHVHQW

  7RSUHYHQWFRUURVLRQZKLOHPDLQWDLQLQJWKHFRUUHFWFKHPLFDOEDODQFHWRUHPRYHWUDFHVRIGLVVROYHGJDVHV
SULPDULO\2DQG&2WKDWPD\KDYHHVFDSHGGHDUDWRU

7KXVWKHPDLQSXUSRVHRIWKHLQWHUQDOWUHDWPHQWLVWRHQVXUHTXDOLW\EHFDXVHLQHYLWDEO\WKHUHZLOOEHVRPH
LPSXULWLHVWKDWILQGDZD\WKURXJKWKHPDLQH[WHUQDOWUHDWPHQWV\VWHP

9DULRXVFKHPLFDOIRUPXODWLRQVDUHDYDLODEOHIURPZDWHUWUHDWPHQWFRPSDQLHVWRFRQWUROLQGLYLGXDOSDUDPHWHUV
VXFKDVDONDOLQLW\VXOILWHGLVSHUVDQWFRQGHQVDWHS+HWFDQGYDULHW\RIPXOWLSXUSRVH RQHGUXP 
IRUPXODWLRQV3ULQFLSDOO\DQ\RIWKHVHIRUPXODWLRQVDLPDWFKDQJLQJVFDOHFRUURVLRQIRUPLQJVDOWVLQWRVRIWRU
PRELOHVOXGJHV7KHVOXGJHFRQGLWLRQHUVXVHGLQWKHFKHPLFDOGRVLQJSUHYHQWWKHVHVROLGVIURPGHSRVLWLQJRQ
PHWDOVXUIDFHVDQGNHHSWKHPLQVXVSHQVLRQ,WLVLPSRUWDQWWRQRWHWKDWWKHFKHPLFDOVDGGHGGXULQJWKH
FRQGLWLRQLQJWUHDWPHQWZLOOLQFUHDVHWKH7'6OHYHOLQWKHERLOHUZDWHUDQGDKLJKHUUDWHRIEORZGRZQZLOOEH
UHTXLUHG

7KHFRPPRQW\SHVDUHOLVWHGEHORZ


$ONDOLQLW\$GMXQFW)RUPXODWLRQV

%RLOHUVUHTXLUHDFHUWDLQDPRXQWRIK\GUR[\O 2+ DONDOLQLW\WRSUHYHQWFRUURVLRQDQGKHOSPDLQWDLQFOHDQKHDW
WUDQVIHUVXUIDFHV:KHUHPDNHXSZDWHUDONDOLQLW\LVORZWKHVHIRUPXODWLRQVSURYLGHQHHGHGDONDOLQLW\

  /LTXLGDONDOLQLW\DGMXQFWZLWKSRO\PHULFGLVSHUVDQW

  &RQFHQWUDWHGOLTXLGDONDOLQLW\DGMXQFW

  /LTXLGDONDOLQLW\DGMXQFWZLWKSRO\PHULFGLVSHUVDQWDQGVOXGJHFRQGLWLRQHU

3RO\SKRVSKDWH)RUPXODWLRQV

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


)RUERLOHUV\VWHPVZLWKWUDFHRIKDUGQHVVLQWKHIHHGZDWHURUZLWKXQVRIWHQHGPDNHXSZDWHUWKHSKRVSKDWH
IRUPXODWLRQVVHTXHVWHUWKHKDUGQHVVVDOWVDQGSUHYHQWKDUGQHVVVFDOHIURPIRUPLQJRQWKHKHDWWUDQVIHU
VXUIDFHV7KHVHEDVLFDOO\H[WHQGWKHVROXELOLW\OLPLWRI&DOFLXP7KHSKRVSKDWHSRO\PHUSURJUDPVFDQ
HVVHQWLDOO\KDQGOHDQ\IHHGZDWHUKDUGQHVVDQGEHFRVWHIIHFWLYH7KLVLVSDUWLFXODUO\WUXHRIWKHQHZV\QWKHWLF
SRO\PHUV7KHVHDUHQRUPDOO\DYDLODEOHDV

  &RQFHQWUDWHGSRO\SKRVSKDWHIRUPXODWLRQ

  3RO\SKRVSKDWHIRUPXODWLRQZLWKVOXGJHFRQGLWLRQHU

  3RO\SKRVSKDWHZLWKVOXGJHFRQGLWLRQHUGLVSHUVDQWDQGDONDOLQLW\DGMXQFW

  3RO\SKRVSKDWHZLWKWHUSRO\PHUGLVSHUVDQWDQGDONDOLQLW\DGMXQFW

7KHPDLQOLPLWDWLRQVRIWKHVHDUHWKDWLQFDVHS+LQFUHDVHVEH\RQGWKHVHZLOOEHFRQYHUWHGLQWRRUWKR
FRPSRXQGZKLFKZLOOUHDFWZLWKFDOFLXPDQGIRUPWKHVOXGJH3RO\SKRVSKDWHIRUPXODWLRQZLWKVOXGJH
FRQGLWLRQHUPD\EHWKHDQVZHUWRVXFKFRQGLWLRQV*HQHUDOO\DSKRVSKDWHWUHDWHGERLOHUOHDYHVDOLJKWJUH\
GHSRVLWLRQRIDSSUR[LPDWHO\LQFK7KHUROOHGWXEHHQGVDQGWKHVWHDPGUXPVIUHTXHQWO\KDYHODUJHU
DPRXQWVRIGHSRVLWLRQ6OXGJHLVHYLGHQWLQWKHPXGGUXPDQGWKLVGHSRVLWLRQLVHDVLO\ZDWHUZDVKHG


6RGLXP0HWD3KRVSKDWH 6+03 

7KLVLVHIIHFWLYHLQDVHQVHWKDWLWGHOD\VWKHVROXELOLW\OLPLWRIFDOFLXPVDOWVDQGWKHUHIRUHWKHVFDOHIRUPDWLRQLV
GHOD\HG7KHGLVDGYDQWDJHKRZHYHULVWKDWLWGHJHQHUDWHVLQWRRUWKRFRPSRXQGDQGUHTXLUHS+WREH
FRQWUROOHGZLWKLQWR,WDOVRDFWVDVIRRGIRUELRIRXOLQJ7KHODWHVWGHYHORSPHQWVDUHHPSOR\LQJ$PLQR
7ULPLWK\OHQH3KRVSKRQDWH$FLG $703 DQG+\GUR[\O(WK\ONHGHQHGL3KRVSKRQDWH$FLG +('3 WKDWGRHV
QRWKDYHWKHOLPLWDWLRQVRI6+03


6OXGJH&RQGLWLRQHUV'LVSHUVDQWV

6\QWKHWLFRUJDQLFSRO\PHUIRUPXODWLRQVDUHXVHGWRGLVSHUVHVXVSHQGHGVROLGVLQWKHERLOHUZDWHUIRUUHPRYDO
E\VXUIDFHDQGERWWRPEORZGRZQ%\PDLQWDLQLQJSURSHUFRQFHQWUDWLRQVRIWKHVOXGJHFRQGLWLRQHUGLVSHUVDQW
WKHKHDWWUDQVIHUVXUIDFHVUHPDLQIUHHRIGHSRVLWLRQDQGPDLQWDLQKLJKKHDWWUDQVIHUHIILFLHQF\%\PDLQWDLQLQJ
KLJKFRQFHQWUDWLRQVRIFHUWDLQSURGXFWVROGVFDOHFDQEHUHPRYHGRQOLQH7KHVHDUHQRUPDOO\DYDLODEOHDV

  &RQFHQWUDWHGKRPRSRO\PHUDONDOLQLW\DGMXQFW

  &RQFHQWUDWHGKRPRSRO\PHUVOXGJHFRQGLWLRQHUZLWKDQWLSUHFLSLWDQW

  &RQFHQWUDWHGWHUSRO\PHUVOXGJHFRQGLWLRQHUZLWKDQWLSUHFLSLWDQW

  &RQFHQWUDWHGWHUSRO\PHUVOXGJHFRQGLWLRQHUZLWKDQWLSUHFLSLWDQW

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


  &RQFHQWUDWHGWHUSRO\PHUVOXGJHFRQGLWLRQHU


2[\JHQ6FDYHQJHUV

2[\JHQVFDYHQJHUVDUHQHHGHGWRSUHYHQWR[\JHQSLWWLQJFRUURVLRQLQWKHGHDHUDWRUIHHGZDWHUWDQNDQG
ERLOHUYDSRUVSDFH7KHVHSURGXFWVFKHPLFDOO\VFDYHQJHWKHGLVVROYHGR[\JHQDQGSUHYHQWFRUURVLRQ
7KHVHSURGXFWVFDQEHLQRUJDQLFRURUJDQLFFDWDO\]HGRUXQFDWDO\]HG7KHFRPPRQR[\JHQVFDYHQJHUVDUH
DYDLODEOHDV

  'U\XQFDWDO\]HGVRGLXPVXOILWH

  'U\FDWDO\]HGVRGLXPVXOILWH

  'U\FDWDO\]HGGHFKDUDFWHUL]HGVRGLXPVXOILWH

  /LTXLGFDWDO\]HGVXOILWH

  /LTXLGFDWDO\]HGPHWDELVXOILWH

  /LTXLGFDWDO\]HGVXOILWHPHWDELVXOILWH

  /LTXLGK\GUD]LQH

  /LTXLGK\GURTXLQRQH

  /LTXLGGLHWK\OK\GUR[\DPLQH '(+$ 

 /LTXLGPHWK\OHWK\ONHWR[LPH

$OOWKHDERYHW\SHVUHPRYHHYHQWUDFHDPRXQWVRIR[\JHQ

7KHPRVWFRPPRQR[\JHQVFDYHQJLQJFRPSRXQGLVVRGLXPVXOSKLWHSSPRIVRGLXPVXOSKLWHLVVXIILFLHQWWR
GHDOZLWKSSPRIGLVVROYHGR[\JHQ+RZHYHULWLVSUDFWLFHWRDGGDQH[WUDSSPRIVRGLXPVXOSKLWH
EHFDXVH

• 7KHUHLVDVLJQLILFDQWGDQJHURIFRUURVLYHGDPDJH

• 7KHFKHPLFDOGRVLQJV\VWHPLVXVXDOO\µRSHQORRS¶ZLWKZDWHUVDPSOHVWDNHQDWLQWHUYDOVDQGDGMXVWPHQWV
PDGHWRWKHGRVLQJUDWH

• 7KHUHLVDFRQFHUQDERXWFRPSOHWHGLVSHUVLRQRIWKHFKHPLFDOSHUKDSVGXHWRWKHPHWKRGRILQMHFWLRQ
FLUFXODWLRQFXUUHQWVRUVWUDWLILFDWLRQZLWKLQWKHIHHGWDQN

7KHWRWDOGRVLQJUDWHWKHUHIRUHLVSSPRIVRGLXPVXOSKLWHSHUSSPRIGLVVROYHGR[\JHQSOXVSSP
2WKHUR[\JHQVFDYHQJHUVLQYROYHRUJDQLFFRPSRXQGVRUK\GUD]LQH7KHODWWHUKRZHYHULVFDUFLQRJHQLFDQG
LVQRWJHQHUDOO\XVHGLQORZDQGPHGLXPSUHVVXUHSODQWV

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


%RLOHU$QWLIRDP)RUPXODWLRQV

6RPHERLOHUVH[KLELWDWHQGHQF\IRUIRDPLQJDQGFDUU\RYHUGXHWRFRQGHQVDWHFRQWDPLQDWLRQRUKLJK
DONDOLQLW\WRWDOVXVSHQGHGVROLGV7KHVHIRUPXODWLRQVSURYLGHDPHDQVWRSUHYHQWIRDPIURPIRUPLQJLQWKH
ERLOHU9DULRXVFRQFHQWUDWLRQVRIERLOHUDQWLIRDPGHSHQGVRQERLOHUVL]H


$ONDOLQH%RLORXW)RUPXODWLRQV

1HZERLOHUVUHTXLUHERLORXWWRUHPRYHRLOJUHDVHGLUWDQGRWKHURUJDQLFFRQWDPLQDQWVIURPWKHZDWHUVLGH
RIWKHKHDWWUDQVIHUVXUIDFHV7KHVHIRUPXODWLRQVDUHGHVLJQHGWRSURYLGHFOHDQLQJDQGSDVVLYDWLRQRIWKHVH
VXUIDFHV7KHVHIRUPXODWLRQVDUHDYDLODEOHDV

  &RQFHQWUDWHGDONDOLQHSRO\SKRVSKDWHIRUGHRLOLQJDQGSDVVLYDWLRQ

  &RQFHQWUDWHGDONDOLQHSHSWL]LQJDJHQWGLVSHUVDQWIRUGHRLOLQJDQGIRXODQWUHPRYDO

  &RQFHQWUDWHGORZFORXGSRLQWQRQLRQLFVXUIDFWDQWIRUKHDY\RLODQGJUHDVHUHPRYDO


&RQGHQVDWH5HWXUQ/LQH)RUPXODWLRQV

&DUERQDWHDQGELFDUERQDWHDONDOLQLWLHVLQWKHPDNHXSZDWHUEUHDNGRZQXQGHUERLOHUWHPSHUDWXUHDQG
SUHVVXUHWRIRUPFDUERQGLR[LGH &2 ZKLFKLVOLEHUDWHGWRWKHVWHDP'XULQJVWHDPFRQGHQVDWLRQWKH
FDUERQGLR[LGHGLVVROYHVWRIRUPFDUERQLFDFLG,IXQWUHDWHGWKHFRQGHQVDWHUHWXUQWDQNVYDOYHVDQGSLSLQJ
H[SHULHQFHVHYHUHJURRYLQJFRUURVLRQ7KHVHSURGXFWVQHXWUDOL]HWKHDFLGLFHIIHFWVRIWKHKRWFDUERQLF
DFLG7KHUHPHGLHVLQFOXGH

  /RZGLVWULEXWLRQUDWLRDPLQHEOHQGVLQGHPLQHUDOL]HGZDWHU

  +LJKGLVWULEXWLRQUDWLRDPLQHEOHQGVLQGHPLQHUDOL]HGZDWHU

  /RZDQGKLJKGLVWULEXWLRQUDWLRDPLQHVEOHQGHGLQGHPLQHUDOL]HGZDWHU

  /RZPHGLXPDQGKLJKGLVWULEXWLRQUDWLRDPLQHVEOHQGHGLQGHPLQHUDOL]HGZDWHU

  0HGLXPGLVWULEXWLRQUDWLRDPLQHEOHQGHGLQGHPLQHUDOL]HGZDWHU

  9HU\KLJKGLVWULEXWLRQUDWLRDPLQHEOHQGHGLQGHPLQHUDOL]HGZDWHU

  /RZPHGLXPDQGKLJKGLVWULEXWLRQUDWLRDPLQHVZLWKDYRODWLOHR[\JHQVFDYHQJHUEOHQGHGLQ
GHPLQHUDOL]HGZDWHU


&DUERQGLR[LGH3URWHFWLRQ
'LVVROYHGFDUERQGLR[LGHLVRIWHQSUHVHQWLQIHHGZDWHULQWKHIRUPRIFDUERQLFDFLGUHVXOWLQJLQORZHULQJRIWKH
S+OHYHOV$ONDOLQLW\OHYHOVLQWKHERLOHUDUHSDUWLFXODUO\LPSRUWDQW0DLQWDLQLQJDS+OHYHORIWRZLOO

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


DYRLGFRUURVLRQSUREOHPVE\SURYLGLQJVWDEOHFRQGLWLRQVIRUWKHIRUPDWLRQRIDILOPRIPDJQHWLWH )H2 LQD


WKLQGHQVHOD\HURQWKHPHWDOVXUIDFHVSURWHFWLQJWKHPIURPFRUURVLYHDWWDFN

3URSHUS+FRQWUROE\WKHDGGLWLRQRIVRGLXPK\GUR[LGHZLOOFRUUHFWWKLVEXWFDUERQGLR[LGHLVDOVRUHOHDVHGLQ
ERLOHUVGXHWRKHDWLQJRIFDUERQDWHVDQGELFDUERQDWHV7KHVHGHFRPSRVHLQWRFDXVWLFVRGDZLWKWKHUHOHDVH
RIFDUERQGLR[LGH

7KLVLVXVXDOO\GHDOWZLWKE\XVHRIDFRQGHQVDWHFRUURVLRQLQKLELWRUVXVXDOO\QHXWUDOL]LQJ ILOPLQJDPLQHV

  7KHPRVWFRPPRQPHWKRGRIGHDOLQJZLWKWKLVSUREOHPLVWKURXJKWKHXVHRIQHXWUDOL]LQJDPLQHV7KHVH
FKHPLFDOVEHWWHUNQRZQDVPRUSKROLQHDQGF\FORKH[\ODPLQHQHXWUDOL]HWKHFDUERQLFDFLGDQGLQFUHDVH
WKHS+RIWKHFRQGHQVDWH

  $ILOPLQJDPLQHVXFKDVRFW\OGHF\ODPLQHSURYLGHVDQRQZHWWDEOHSURWHFWLYHEDUULHUDJDLQVWERWK
FDUERQLFDFLGDQGR[\JHQ7KHVHFUHDWHDQRLODWWUDFWLYHZDWHUUHSHOOHQWILOPRQPHWDOVXUIDFHVZKLFKLV
UHVLVWDQWWRERWKFDUERQGLR[LGHDQGR[\JHQ


0XOWLSXUSRVH)RUPXODWLRQV

0XOWLSXUSRVH)RUPXODWLRQVDUHRIWHQXVHGIRUVPDOOHUERLOHUV\VWHPVUHTXLULQJVLPSOLFLW\LQWKHWUHDWPHQW
DSSURDFKHV7KHPXOWLSXUSRVHIRUPXODSURYLGHVDSUHYHQWLYHUHOLHIWRYDULRXVFRPELQDWLRQVZKHWKHULWLV

  0XOWLSXUSRVHIRUPXODIRUWUHDWLQJVPDOOV\VWHPVZLWKVRIWHQHGPDNHXSDQGVLJQLILFDQWFRQGHQVDWHUHWXUQ
QHXWUDOL]LQJDPLQHLQFOXGHG 

  0XOWLSXUSRVHIRUPXODIRUWUHDWLQJVPDOOV\VWHPVZLWKKDUGZDWHUPDNHXSDQGVLJQLILFDQWFRQGHQVDWH
UHWXUQ QHXWUDOL]LQJDPLQHLQFOXGHG 

  0XOWLSXUSRVHIRUPXODIRUWUHDWLQJVPDOOV\VWHPVZLWKKDUGZDWHUPDNHXSDQGOLWWOHRUQRFRQGHQVDWHUHWXUQ
QRQHXWUDOL]LQJDPLQH 

7KHVHPXOWLSXUSRVHIRUPXODWLRQVDUHJHQHUDOO\XVHGZKHUHOHVVGHWDLOHGZDWHUDQDO\VLVLVDYDLODEOH7KLVLV
KRZHYHUDULVN\DQGQRWDUHFRPPHQGHGRSWLRQIRUORQJUXQ


&DVH([DPSOH

2QHIDFLOLW\ZDVIRXQGWREHXVLQJDORZSUHVVXUHERLOHUZDWHUWUHDWPHQWSURGXFWIRUDKLJKHUSUHVVXUHERLOHU
ZLWKDVWHDPVXSHUKHDWHUDQGVWHDPWXUELQHZKLFKUHTXLUHGKLJKSXULW\VWHDP6XSHUKHDWHUWXEHIDLOXUH
IUHTXHQF\ZDVLQFUHDVLQJ7KHWUHDWPHQWSURGXFWFRQWDLQHGSKRVSKDWHWUHDWPHQWFKHPLFDOLQSRWDVVLXP
UDWKHUWKDQWKHDQWLFLSDWHGVRGLXPIRUP6WHDPSXULW\VWXGLHVXVLQJVWDQGDUGVRGLXPHOHFWURGHSURFHGXUH
LQGLFDWHGDFFHSWDEOHVWHDPSXULW\$QDO\]LQJIRUSRWDVVLXPDQGWKHQPRGLI\LQJWKHERLOHUZDWHUWUHDWPHQW

3DJHRI
ZZZ3'+FHQWHUFRP3'+&RXUVH0ZZZ3'+RQOLQHRUJ


SURJUDPWRXVHVRGLXPEDVHGSKRVSKDWHWUHDWPHQWHQDEOHGDFRUURVLYHVWHDPVROLGVFRQWDPLQDWLRQWREH
LGHQWLILHGDQGFRQWUROOHGWKURXJKLPSURYHGERLOHUZDWHUOHYHOFRQWURO


&RQFOXVLRQ

,WLVLPSRUWDQWWRQRWHWKDWWKHZDWHUWUHDWPHQWFRQGLWLRQLQJVKDOOEHHYDOXDWHGFDVHWRFDVHEDVLVGHSHQGLQJ
RQWKHLPSXULWLHVLQKHUHQWLQWKHPDNHXSZDWHULWVKDUGQHVVYROXPHRIFRQGHQVDWHUHWXUQHGIRUUHXVHTXDOLW\
RIIHHGZDWHU PDNHXSFRQGHQVDWH DQGDOVRRQWKHGHVLJQRIERLOHUDQGLWVRSHUDWLQJFRQGLWLRQV'HFLGLQJ
RQWKHW\SHDQGDPRXQWRIFKHPLFDODQGZDWHUWUHDWPHQWV\VWHPLVDPDWWHUIRUDVNLOOHGZDWHUWUHDWPHQW
VSHFLDOLVWZKRVKRXOGDOZD\VEHFRQVXOWHG

)XUWKHUGHWDLORQWKLVFRPSOLFDWHGVXEMHFWLVDYDLODEOHIURPZDWHUWUHDWPHQWKDQGERRNVDQGZDWHUWUHDWPHQW
VSHFLDOLVWVWKLVLVYHU\PXFKDPDWWHUIRUH[SHUWDGYLFHDQGSURIHVVLRQDODQDO\VLV


3DJHRI

You might also like