(ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


 


:5$1+63$2SWLPL]DWLRQ7HFKQLFDO*XLGH

 ,QWURGXFWLRQ 
 *HQHUDO 
 3XUSRVHDQGOLPLWDWLRQV
 2XWOLQH
 7HFKQLFDO6WUDWHJLFSUHVWXG\
 6HUYLFH6FHQDULRGHILQLWLRQ
 6HUYLFH$FWLYLWLHVVHOHFWLRQ
 $GGLWLRQDOQRWHV
 $UHDVRIRSWLPL]DWLRQ
 *HQHUDO 
 %DVLF+63$SDUDPHWHUV 
 +63$PRELOLW\DQGWUDIILFPDQDJHPHQW 
 &KDQQHOVZLWFKLQJ 
 'RZQOLQNSRZHUDOORFDWLRQ
 &DSDFLW\PDQDJHPHQW 
 .3,VDQGHYHQWVUHODWHGWRHDFKDUHDRIRSWLPL]DWLRQ 
 *HQHUDO 
 %DVLF+63$SDUDPHWHUV 
 +63$PRELOLW\DQGWUDIILFPDQDJHPHQW 
 &KDQQHOVZLWFKLQJ 
 'RZQOLQNSRZHUDOORFDWLRQ
 &DSDFLW\PDQDJHPHQW 
 5HIHUHQFHV


   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


 ,QWURGXFWLRQ
 *HQHUDO

7KH:&'0$5$1+63$2SWLPL]DWLRQ:5+62VHUYLFHLVDQRSWLRQRIWKH

1HWZRUN3HUIRUPDQFH,PSURYHPHQW13,VHUYLFHIDPLO\

:5+62GHDOVZLWK+6'3$DQG(8/ZLWKUHJDUGVWRWKHIROORZLQJDVSHFWV

x 2SWLPL]LQJQHWZRUNSHUIRUPDQFH

x $OLJQLQJWKHQHWZRUNVHWWLQJZLWKWKHFXVWRPHUVWUDWHJ\

x 3URYLGLQJVKRUWDQGORQJWHUPUHFRPPHQGDWLRQVWRLPSURYHWKH
QHWZRUN

6KDUH(ULFVVRQNQRZOHGJHLQUDGLRWHFKQRORJ\QHWZRUNPRQLWRULQJWRRO
XVDJHDQGVWUDWHJ\GHILQLWLRQ

x ,GHQWLI\PDLQVSHFLILFQHWZRUNERWWOHQHFNVDQGFULWLFDOLVVXHV

 3XUSRVHDQGOLPLWDWLRQV

7KHSXUSRVHRIWKLVGRFXPHQWLVWRGHVFULEHLPSURYHPHQWPHWKRGV
PHDVXUHPHQWVDQG.3,VWREHXVHGLQWKHGHOLYHU\RIWKH:&'0$5$1
+63$2SWLPL]DWLRQ:5+62VHUYLFH7KHWDUJHWUHOHDVHLV3EXW3
OLPLWDWLRQVDVZHOODV3YV3FRPSDULVRQZLOOEHJLYHQZKHQHYHULV
FRQVLGHUHGDUHOHYDQWFKDQJH,QWKH.3,VHFWLRQWKHUHDUHVRPHIRUPXODV
UHODWHGWR3EXWZKHQHYHUWKH\DUHGHSLFWHGWKH\DUHDOZD\VDGYLVHGWREH
XVHGRQO\LQ3UHOHDVH

0DLQO\SDVVLYHPHDVXUHPHQWVDQGDQDO\VLVDUHLQFOXGHGLQWKLVGRFXPHQW

2QO\WKH.3,VDQGFRXQWHUVQRWEHLQJGHVFULEHGLQ>@DUHIXOO\H[SODLQHGLQ
WKLVGRFXPHQW

7KH85$B3&+VWDWHLVQRWFRQVLGHUHGLQWKLVGRFXPHQW

 2XWOLQH

6HFWLRQH[SODLQVWKHWHFKQLFDOVWUDWHJLFSUHVWXG\ZKLFKLVDQLPSRUWDQW
DFWLYLW\SULRUWRWKHWHVWDFWLYLWLHVRIWKH:&'0$5$1+63$2SWLPL]DWLRQ
PRGXOH

6HFWLRQRIWKLVGRFXPHQWGHVFULEHVWKHDUHDVRIRSWLPL]DWLRQ,WFRYHUV
SDUDPHWHUVWREHWXUQHGRQIRUWKHVHOHFWHGIXQFWLRQDOLWLHVDVZHOODV
SDUDPHWHUVIRURSWLPL]DWLRQDQGWHVWV

6HFWLRQEULHIO\GHVFULEHVWKH.3,VWREHPRQLWRUHGIRUHDFKDUHDRI
RSWLPL]DWLRQ'HWDLOHGGHVFULSWLRQVDUHRQO\JLYHQLQ>@
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


6HFWLRQVXPPDUL]HVDOOWKHUHIHUHQFHVWKDWKDYHEHHQXVHGWRFUHDWHWKLV
:&'0$5$1+63$2SWLPL]DWLRQ7HFKQLFDO*XLGH
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 



 7HFKQLFDO6WUDWHJLFSUHVWXG\
7KHPDLQREMHFWLYHRIWKHSUHVWXG\LVWRGHILQHZKLFKWHVWDFWLYLWLHVZLOOEH
SHUIRUPHGLQWKHH[HFXWLRQSKDVH7KHVFRSHRIWKHVHUYLFHVKRXOGEHWDLORUHG
WRWKHDFWXDORSHUDWRUVQHHGVDQGQHWZRUNFRQGLWLRQ

 6HUYLFH6FHQDULRGHILQLWLRQ

)RUDQ\WHFKQLFDOSUHVWXG\WREHVXFFHVVIXOWKHVSHFLILFFRQGLWLRQVRIWKH
QHWZRUNDQGWKHRSHUDWRUVFRQFHUQVQHHGWREHIXOO\XQGHUVWRRG

7KHPDLQQHWZRUNFRQGLWLRQVWREHREWDLQHGDUH

x 1HWZRUNWRSRORJ\RQHRUOD\HUV*60LQWHUDFWLRQDPRXQWRI&(V
W\SHRI7;ERDUGXVHG

x 0DWXULW\RIWKHQHWZRUNVWDUWXSORZWUDIILFKLJKWUDIILF

x 7UDIILFPL[PDLQO\VSHHFKPL[HG+6RQO\(8/

x 2SHUDWRUSULRULW\VSHHFKPDLQIRFXVDQG36EHVWHIIRUWKLJK
WKURXJKSXW

7KHFXVWRPHUFRQFHUQVFDQEHJURXSHGLQWKHIROORZLQJNH\DUHDV

x 7KURXJKSXWOLPLWDWLRQ

x &DSDFLW\OLPLWDWLRQ

x 0RELOLW\7UDIILF0DQDJHPHQW

x &RYHUDJH

x $FFHVVLELOLW\UHWDLQDELOLW\.3,VLPSURYHPHQW

x ((SUREOHPV

7KHLQIRUPDWLRQDERYHFDQEHFRPELQHGWRGHILQHWKHVSHFLILFVHUYLFH
VFHQDULRRQZKLFKWKHH[HFXWLRQSKDVHZLOOEHFDUULHGRXWDQGFRQVHTXHQWO\
WRVHOHFWWKHPRVWVXLWDEOHWHVWDFWLYLWLHV

)RUJXLGHOLQHVDERXWVHUYLFHVFHQDULRDQGWHVWVGHILQLWLRQVHHDOVR>@

 6HUYLFH$FWLYLWLHVVHOHFWLRQ

2QFHWKHQHWZRUNFRQGLWLRQVDQGFXVWRPHUFRQFHUQVVHUYLFHVFHQDULRKDYH

EHHQLGHQWLILHGWKHKRWWHVWLVVXHVWRGHDOZLWKVKRXOGEHFOHDUHGXS

,WVKRXOGEHVWUHVVHGVLQFHWKHEHJLQQLQJWKDWWKHDFWXDOHQGXVHUSHUFHSWLRQ
FDQEHDIIHFWHGE\VHYHUDOUHDVRQVVXFKDV
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


 &RYHUDJHRIWKHPDLQ+6FKDQQHORUWKHFRQWUROFKDQQHOV

 $YDLODELOLW\RI5DGLRHJ3RZHU&RGHV&(VDQGRU7UDQVSRUW

UHVRXUFHV

 6FKHGXOHUVHWWLQJV

 0RELOLW\ERWKRQWKHVDPHFDUULHURUEHWZHHQFDUULHUVDQGV\VWHPV

 5HWDLQDELOLW\

 8(FKDUDFWHULVWLFVHJWHUPLQDOFDWHJRU\

 7LPHWRDFFHVV+6DQG(8/UHVRXUFHV

 8SOLQNSHUIRUPDQFH

 1RQRSWLPDOSDUDPHWHUVHWWLQJ

((VXFKDVSDFNHWORVVHVDQGRUDSSOLFDWLRQWUDIILFFKDUDFWHULVWLFV

&OHDUO\RQO\DVXEVHWRIWKHDERYHDVSHFWVLVVXHVFDQEHSUHVHQWLQWKH
RSHUDWRUQHWZRUNDQGDSSURDFKHGGXULQJWKHVHUYLFH:KLFKRQHWR
FRQFHQWUDWHLVGHFLGHGLQWKHVHUYLFHVFHQDULRGHILQLWLRQSKDVHVHH6HFWLRQ
DQG>@

 $GGLWLRQDOQRWHV

,WLVLPSRUWDQWWRUHPHPEHUWKDWLQPRVWRIWKHFDVHVWKHUHLVQRWQHFHVVDULO\
DQDEVROXWHRSWLPXPVHWWLQJEXWDVHWWLQJWKDWEHVWILWVZLWKWKHRSHUDWRU
VWUDWHJ\

,WVKRXOGDOVREHKLJKOLJKWHGWKDWWKH+63$&HOODQG8VHU7KURXJKSXW.3,V
PHQWLRQHGLQWKLVGRFXPHQWVHH6HFWLRQGRQRWHQDEOHWRPRQLWRUWKH
DFWXDOHQGXVHUSHUFHSWLRQEXWRQO\WRSURYLGHWKH+63$UDGLRSHUIRUPDQFH

)RUH[DPSOHWKHVHWKURXJKSXW.3,VZLOOEHPDUJLQDOO\DIIHFWHGE\UDGLR
RSWLPL]DWLRQDFWLYLWLHVWKDWDLPVDWRSWLPL]LQJLVVXHVDQGLQ6HFWLRQ
ZKLOHWKHDFWXDOHQGXVHUSHUFHSWLRQFRXOGEHPXFKEHWWHU

+RZHYHULQWKHVHFDVHVRWKHU.3,VDUHGLVFXVVHGZKLFKFDQJLYHVRPH
LQGLFDWLRQVRIWKHHIIHFWVRIFHUWDLQDFWLRQVHJSDUDPHWHUFKDQJHVRQXVHU
SHUIRUPDQFH

,QRUGHUWREHDEOHWRPRQLWRUFRPSOHWHO\WKHLPSDFWRIWKHUDGLRRSWLPL]DWLRQ
DFWLYLWLHVRQWKHHQGXVHUSHUIRUPDQFHDGLIIHUHQWW\SHRIDSSURDFKHJ
EDVHGRQWKHXVHRI((WRROVVXFKDV0RQLTFRXOGEHIROORZHG
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


)LQDOO\LIWKHPDLQRSHUDWRUFRQFHUQLV((SUREOHPVDQGRUWKHZRUNIRUFH
GHOLYHULQJWKHVHUYLFHUHDOL]HVWKDWWKLVLVWKHPDLQLVVXHWKLVVHUYLFHPD\EH
FRPSOHPHQWHGZLWKDQ+63$3HUIRUPDQFH,QYHVWLJDWLRQ7&3IRFXVHG
VHUYLFHZKLFKLVEDVHGRQDFWLYHWHVWLQJVHH>@

 $UHDVRIRSWLPL]DWLRQ
 *HQHUDO

7KHPDLQDUHDVRIRSWLPL]DWLRQKDYHEHHQGLYLGHGLQWRVHFWLRQVWR
7KHVHVHFWLRQVFRQWDLQDOOWKHPDLQSDUDPHWHUVWREHFRQVLGHUHGIRU
RSWLPL]DWLRQDQGVRPHLQGLFDWLRQVWKDWKDYHEHHQREWDLQHGIURPRQILHOG
DFWLYLWLHV

)RUGHWDLOVUHJDUGLQJKRZWRLGHQWLI\ZKLFKVSHFLILFDUHDVVKRXOGEHLQFOXGHG
LQWKHVHUYLFHUHIHUWR>@

7KHVHUYLFHPRGXOHVKRXOGLGHQWLI\DQGDQDO\]HIURPDUDGLRSHUVSHFWLYHWKH
URRWFDXVHVWRQRQRSWLPDO+63$SHUIRUPDQFH,PSURYHPHQWDFWLRQVDUH
LPSOHPHQWHGDQGORQJWHUPUHFRPPHQGDWLRQVDUHSURYLGHG

 %DVLF+63$SDUDPHWHUV

 *HQHUDO

7KHSXUSRVHRIWKHRSWLPL]DWLRQRIWKHEDVLFSDUDPHWHUVDLPVDWILQGLQJD
VROXWLRQRSWLPL]HGIRUKLJKHUWKURXJKSXWZKLFKDOVRLPSURYHVWKHVFKHGXOLQJ
UDWLRDQGJXDUDQWHHVWKHSHUIRUPDQFHRIWKHXVHUVLQSRRUUDGLRFRQGLWLRQV

$FWXDORSWLPL]DWLRQRIWKHEDVLFSDUDPHWHUVPD\QRWEHUHOHYDQWRUSRVVLEOH
EXWDVDQLW\FKHFNDQGVWUDWHJLFFKRLFHDSSOLFDEOHWRWKHFXVWRPHUQHWZRUNLV
RIWHQQHHGHG

 0DLQ+6'3$SDUDPHWHUV

 IOH[LEOH6FKHGXOHU2QDQGTXHXH6HOHFW$OJRULWKP

IOH[LEOH6FKHGXOHU2QLVXVHGWRDFWLYDWHWKH+6'3$IOH[LEOHVFKHGXOHU
IHDWXUHDQGWKHVFKHGXOLQJDOJRULWKPLVFKRVHQWKURXJKWKHSDUDPHWHU
TXHXH6HOHFW$OJRULWKP

2QHDVSHFWLQWKHFKRLFHRIVFKHGXOLQJDOJRULWKPLVWKHMXGJPHQWRIIDLUQHVV

,WLVUHFRPPHQGHGWRXVHWKHSURSRUWLRQDOIDLUDQG0D[&4,DOJRULWKPV
,WLVUHFRPPHQGHGWRXVHWKHSURSRUWLRQDOIDLUDQG0D[&4,DOJRULWKPV
WRJHWKHUZLWKWKH&4,DGMXVWPHQWIHDWXUHLQRUGHUWRDFKLHYHDWKURXJKSXW
WRJHWKHUZLWKWKH&4,DGMXVWPHQWIHDWXUHLQRUGHUWRDFKLHYHDWKURXJKSXW
JDLQFRPSDUHGWRURXQGURELQ:KHQXVLQJSURSRUWLRQDOIDLUZLWKRXW&4,
JDLQFRPSDUHGWRURXQGURELQ JS S
DGMXVWPHQWLQSRRUUDGLRFRQGLWLRQVWKH1$&.UDWLRFDQEHYHU\KLJKOHDGLQJ
M S 1$&.UDWLRFDQEHYHU\KLJKOHDGLQJ
WRORZHUFHOOWKURXJKSXWWKDQZLWKURXQGURELQ
WRORZHUFHOOWKURXJKSXWWKDQZLWKURXQGURELQ
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


7KHHTXDOUDWHVFKHPHDLPVDWSURYLGLQJDQHTXDOELWUDWHWRDOOXVHUV7KH
KLJKHVWV\VWHPWKURXJKSXWLVH[SHFWHGWREHUHDFKHGZLWKWKH0D[&4,
DOJRULWKPZKLFKDOVRSURYLGHVWKHOHVVIDLUQHVVEHWZHHQXVHUV

7KHGHIDXOWYDOXHIRUTXHXH6HOHFW$OJRULWKPLV5281'B52%,1:LWKWKLV
VFKHGXOLQJDOJRULWKPDOOXVHUVDUHHTXDOO\VFKHGXOHG0$;B&4,PD[LPL]HV
WKHFHOOWKURXJKSXWEXW8(VLQEDGUDGLRFRQGLWLRQVZLOOSUREDEO\QRWEH
VFKHGXOHG$WUDGHRIIEHWZHHQWKURXJKSXWJDLQDQG8(VFKHGXOLQJIDLUQHVV
J
FDQEHDFKLHYHGZLWKWKH3523257,21$/B)$,5DOJRULWKPV1RWHWKDWWKH
FDQEHDFKLHYHGZLWKWKH3523257,21$/B)$,5DOJRULWKPV1RWHWKDWWKH
XWLOL]DWLRQRI0$;B&4,DQG3523257,21$/B)$,5QHHGWKH&4,DGMXVWPHQW
XWLOL]DWLRQRI0$;B&4,DQG3523257,21$/B)$,5QHHGWKH&4, DGMXVWPHQW
IHDWXUHWREHDFWLYDWHGLQRUGHUWRJXDUDQWHHJRRGSHUIRUPDQFH
IHDWXUHWREHDFWLYDWHGLQRUGHUWRJXDUDQWHHJRRGSHUIRUPDQFH

7RPRQLWRUHYDOXDWHDQGRSWLPL]HVFKHGXOLQJDOJRULWKPVWKH+6'3$PRGH
UHSRUWVLQ7(06,QYHVWLJDWLRQIURPWKH8(DQGWKH5%6WKURXJKSXW.3,V
QHHGWREHFDSWXUHG7KHVHDUHJLYHQLQ

 FTL$GMXVWPHQW2Q

&4,DGMXVWPHQWLVDQ5%6RSWLRQDOIHDWXUHZKLFKSURFHVVHVWKH$&.VDQG
1$&.VUHFHLYHGIURPWKH8(HYDOXDWLQJLQWKLVZD\WKH8(V&4,UHSRUWLQJ
DFFXUDF\DQGJLYHVDVRXWSXWDQDGMXVWHG&4,YDOXHVRWKDWWKH1$&.UDWLR
UHPDLQVLQWKHRUGHURI

6LQFHWKHDFFXUDF\RIWKH&4,UHSRUWLQJGHSHQGVRQWKH8(YHQGRUDQG
PRGHOLWLVUHFRPPHQGHGWRHQDEOHWKH&4,DGMXVWPHQWIHDWXUHVRWKDWERWK
FHOODQGXVHUWKURXJKSXWDUHPD[LPL]HG7KLVLVSDUWLFXODUO\LPSRUWDQWZKHQ
SURSRUWLRQDOIDLURU0D[&4,LVVHOHFWHGDVVFKHGXOLQJDOJRULWKP

,WVKRXOGEHQRWHGWKDWLQFHOOVZLWKYHU\JRRGFRYHUDJHVXFKDVLQGRRUFHOOV
,WVKRXOGEHQRWHGWKDWLQFHOOVZLWKYHU\JRRGFRYHUDJHVXFKDVLQGRRUFHOOV
WKH1$&.UDWLRPD\QDWXUDOO\EHORZHUWKDQDQGWKH&4,DGMXVWPHQW
WKH 1$&.UDWLRPD\QDWXUDOO\EHORZHUWKDQDQGWKH&4,DGMXVWPHQW
IHDWXUHPD\OHDGWRWKURXJKSXWGHJUDGDWLRQVLQFHWKHDOJRULWKPZLOODGMXVWWKH
IHDWXUHPD\OHDGWRWKURXJKSXWGHJUDGDWLRQVLQFHWKHDOJRULWKPZLOODGMXVWWKH
1$&.UDWLRXSWRZDUGV
1$&.UDWLRXSWRZDUGV

7KHPHWKRGWRHYDOXDWHFTL$GMXVWPHQW2QLVWRPRQLWRU5%6WKURXJKSXW
.3,VJLYHQLQ

 'HOWDSDUDPHWHUV

7KHXSOLQN+6'3$FRQWUROFKDQQHO+6'3&&+LVXVHGIRUWUDQVPLWWLQJ
$&.1$&.IRUWKH+$54SURFHVVHVDQG&4,LQIRUPDWLRQ7KHTXDOLW\RIWKH
+6'3&&+FDQEHDGMXVWHGZLWKWKHSDUDPHWHUVGHOWD&TLGHOWD&TL
GHOWD$FNGHOWD$FNGHOWD1DFNDQGGHOWD1DFN7KHUHDUHWZRVHWVRI
SDUDPHWHUVIRUWKHLQIRUPDWLRQVHQWRQ+6'3&&+RQHXVHGLQVRIW
KDQGRYHUDQGWKHRWKHULQQRQVRIWKDQGRYHU
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


)URPDFRYHUDJHSHUVSHFWLYH+6'3$LVXSOLQNOLPLWHG$VWKHXVHULV
DSSURDFKLQJWKHFHOOHGJHWKHSHUIRUPDQFHRIWKHXSOLQN$'&+FKDQQHO
VWDUWVWRGHJUDGHWKH+6'3$SHUIRUPDQFHHJGXHWRVXERSWLPDO7&3
$&.VWUDQVPLVVLRQ7RPD[LPL]HWKHSHUIRUPDQFHIRUDQ+6'3$XVHUWKH
SRZHUDOORFDWHGWRWKHVHFKDQQHOVVKRXOGEHLQFUHDVHG7KLVFDQEHGRQHE\
UHGXFLQJWKHSRZHURQWKH8/FRQWUROSODQHE\DGMXVWLQJWKHGHOWD$FN
GHOWD1DFNDQGGHOWD&4,OHDYLQJPRUHSRZHUIRUWKHGHGLFDWHGFKDQQHO$
G%FRYHUDJHLPSURYHPHQWKDVEHHQVHHQLQILHOGE\VHWWLQJWKHVHYDOXHVWR
GHOWD$FN GHOWD1DFN DQGGHOWD&4, 

7KHQHJDWLYHFRQVHTXHQFHRIUHGXFLQJWKHSRZHULQWKHFRQWUROSODQHLVWKDW
WKHGRZQOLQNWKURXJKSXWLQJRRGUDGLRHQYLURQPHQWGHWHULRUDWHVGXHWRPRUH
UHWUDQVPLVVLRQV7KHUHIRUHLWLVZRUWKWRPRQLWRUERWKFRYHUDJHLPSURYHPHQW
DQGDFWXDODYHUDJH+6'3$WKURXJKSXWLQRUGHUWRILQGWKHEHVWWUDGHRII

 EOHU4XDOLW\7DUJHW8O

$QRIWHQQHJOHFWHGHIIHFWLVWKHLPSDFWRI8/%/(5WDUJHWRQWKH'/
WKURXJKSXW,QIDFWWKH7&3577GHSHQGVRQWKH8/%/(5DVPXFKDVRQ
WKH'/RQH$8/%/(5FDQVHULRXVO\LPSDFWRQWKH'/SHUIRUPDQFH
HVSHFLDOO\IRUKLJKELWUDWHV+HQFHWKLVSDUDPHWHUKDVWREHFRQVLGHUHGDV
ZHOO7KHGRZQVLGHRIDORZHU8/%/(5WDUJHWFDQEHLQFUHDVHG566,ORZHU
8/FRYHUDJHDQGKLJKHUGURSSUREDELOLW\

5HFHQWWHVWVKDYHVKRZQWKDWFKDQJLQJWKH8/%/(5WDUJHWIURPWR
KDVDVLJQLILFDQWLPSURYHPHQWRQWKH'RZQOLQNDURXQGLPSURYHPHQW
IRU8/5%DURXQGLPSURYHPHQWIRU8/5%7KHGUDZEDFNE\
WKLVFKDQJHLVDQLQFUHDVHLQ8(7UDQVPLWSRZHUDQGLQWHUIHUHQFHKRZHYHU
WKHGHJUDGDWLRQRQ5SHUIRUPDQFHZDVWROHUDEOH

 0DLQ(8/SDUDPHWHUV

 (XOPD[5RW&RYHUDJHDQG(XO0D[2ZQ8X/RDG

(VWLPDWLRQRIQRLVHULVHDQGRZQFHOOLQWHUIHUHQFHORDGDUHWDNHQFDUHRIE\
8/8XORDGHVWLPDWRUSULQFLSOHDVVKRZQLQWKHIROORZLQJILJXUH



1RWHWKDWWKHVHLPSURYHPHQWVDUHQRWWRWDOO\YLVLEOHIURP5%6WKURXJKSXW.3,VEXWDFWLYHWHVWVDUHQHHGHG
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 



(XO0D[5RW&RYHUDJHSDUDPHWHUGHILQHVWKH(8/DUHDRIFRYHUDJHZLWKD
FHUWDLQWKURXJKSXW,QIDFWLWLVXVHGWRVHWWKHWKUHVKROGIRUWKHLQWHUIHUHQFHLQ
8/RYHUZKLFKWKHVFKHGXOHUDFWVWRUHGXFHWKHJUDQWHGWKURXJKSXWWRWKH8(
7KHKLJKHUWKHWKUHVKROGWKHKLJKHULVWKHLQWHUIHUHQFHDOORZHGLQ8/DQGWKH
KLJKHUFRXOGEHWKHWKURXJKSXWHVSHFLDOO\LQQRWYHU\JRRGFRQGLWLRQV2QWKH
RWKHUKDQGWKHKLJKHULQWHUIHUHQFHDOORZHGFDQDIIHFWWKH5SHUIRUPDQFHV
'XHWRWKLVDJRRGWUDGHRIILVQHHGHGWRRSWLPL]H(8/WKURXJKSXWZLWKRXW
DIIHFWLQJ5SHUIRUPDQFHV

(XO0D[5RW&RYHUDJHFDQEHWXQHGGLIIHUHQWO\DFFRUGLQJWR5WUDIILFDQG
QXPEHURIFDUULHUV,QQHWZRUNVZLWKDVHFRQGFDUULHUPDLQO\XVHGIRU+63$
WKLVSDUDPHWHUFDQEHVHWWRKLJKYDOXHV,IRQO\RQHFDUULHUZLWKORWRI5
WUDIILFLVSUHVHQWWKHQWKHGHIDXOWYDOXHLVVXJJHVWHG

566,DQG527UHODWHGFRXQWHUVDUHXVHIXOWRGHWHUPLQHWKHLQFUHDVHLQ8/
LQWHUIHUHQFHDQGWRJHWKHUZLWK5DFFHVVLELOLW\UHWDLQDELOLW\SHUIRUPDQFHV
DQG(8/WKURXJKSXWWKH\FDQEHXVHGWRHYDOXDWHWKHJRRGQHVVRIWKH
SDUDPHWHUVHWWLQJ

(XO0D[2ZQ8X/RDGLVXVHGWRSUHYHQWSRZHUUXVKHVWKDWFDQDIIHFW5DQG
(8/SHUIRUPDQFHV,WVHWVWKHWKUHVKROGIRUWKHRZQFHOOLQWHUIHUHQFH
GHWHUPLQHGE\WKH6,5IRUDOOWKH'&+XVHUVFRQQHFWHGWRWKHFHOO$ORZ
YDOXHIRUWKLVSDUDPHWHULVGUDPDWLFDOO\DIIHFWLQJWKH(8/WKURXJKSXW
SHUIRUPDQFHV

1RWHWKDWLQFHOOVZLWKQR5;GLYHUVLW\IRUH[DPSOHLQGRRUFHOOV
WKHSDUDPHWHUVHXO0D[2ZQ8X/RDGDQGHXO0D[5RW&RYHUDJHVKRXOGEH
UHGXFHGZLWKG%DVFRPSDUHGWRWKHQRUPDO5;GLYHUVLW\FDVH7KHUHDVRQ
IRUWKLVLVWKDW8XORDGHVWLPDWLRQDOJRULWKPDVVXPHVDIDFWRUIRU5;GLYHUVLW\
JDLQZKHQFDOFXODWLQJWKH8XORDG7KLVZLOOUHTXLUHPRGLILFDWLRQRIV\VWHP
FRQVWDQWZKLFKLVQRWUHFRPPHQGHGIRULQGRRUFHOOLQYHVWLJDWLRQ

7KHVHSDUDPHWHUVDUHVSHFLILHGLQWHUPVRIQRLVHULVHXVLQJDORJDULWKPLF
VFDOHG%7RFRQYHUWWKHVHYDOXHVLQWRORDGIUDFWLRQRIWKHSROHFDSDFLW\WKH
IROORZLQJHTXDWLRQFDQEHXVHG
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


/ %B,8/

ZKHUH%,8/LVWKHQRLVHULVHLQG%DQG/LVWKHORDG$VDQH[DPSOHG%QRLVH
ULVHFRUUHVSRQGVWRRIWKHSROHFDSDFLW\DQGG%QRLVHULVHFRUUHVSRQGV
WRRIWKHSROHFDSDFLW\7KLVPHDQVWKDWWKHFDSDFLW\JDLQRILQFUHDVLQJ
WKHQRLVHULVHSDUDPHWHUVWRHYHUKLJKHUYDOXHVLVOLPLWHG

7KHKHDGURRPUHSRUWHGWRWKH(8/VFKHGXOHULVDOZD\VWKHPLQLPXPRIWKH
WZR

 HXO1RLVH)ORRU/RFNDQGHXO2SWLPDO1RLVH)ORRU(VWLPDWH

,IWKHWKHUPDOQRLVHFDOFXODWLRQIURP57:3PHDVXUHPHQWVLVFRQVLGHUHG
XQUHOLDEOHWKHUHLVDSRVVLELOLW\WRORFNWKHWKHUPDOQRLVHOHYHOE\VHWWLQJWKH
SDUDPHWHUHXO1RLVH)ORRU/RFNWRWUXH7KLVORFNVWKHWKHUPDOQRLVHYDOXHWR
DYDOXHJLYHQE\WKHSDUDPHWHUHXO2SWLPDO1RLVH)ORRU(VWLPDWH,I
HXO2SWLPDO1RLVH)ORRU(VWLPDWHLVVHWWR XQGHILQHGWKHWKHUPDOQRLVH
YDOXHLVLQVWHDGORFNHGWRHLWKHUHXO7KHUPDO/HYHO3ULRULIWKHORFNSDUDPHWHU
LVVHWWRWUXHDWV\VWHPVWDUWRUWRWKHWKHUPDOQRLVHOHYHODWWKDWSDUWLFXODU
SRLQWLQWLPHLIWKHORFNSDUDPHWHULVFKDQJHGWRWUXHGXULQJRQJRLQJ
RSHUDWLRQRI5%6

 $GGLWLRQDO+6'3$SDUDPHWHUV

 KV0HDVXUHPHQW3RZHU2IIVHW

7KHSXUSRVHRIWKLVSDUDPHWHULVWRDGMXVWWKHUHSRUWHG&4,YDOXHVIURPWKH
8(VZLWKDQRIIVHWVRWKDWWKHUHSRUWHGYDOXHVDUHGLVWULEXWHGEHWZHHQ
PLQLPXP&4,YDOXH]HURDQGPD[LPXP&4,YDOXH

,IWKH5%6UHFHLYHV&4,HTXDOWR]HURIURPD8(QRGDWDLVVHQWWRWKDW
SDUWLFXODU8(WKHFRPLQJ77,DQGWKH+6'3$WKURXJKSXWLVLPSDFWHG
7KHUHIRUHLWLVLPSRUWDQWWKDWWKH&4,GLVWULEXWLRQLVQRWFOLSSHGRQWKHORZHU
HQGUHVXOWLQJLQXQQHFHVVDU\&4,HTXDOWR]HURUHSRUWV

7KHWKURXJKSXWSHUIRUPDQFHLVDOVRGHJUDGHGZKHQWKH&4,GLVWULEXWLRQLV
FOLSSHGRQWKHKLJKHUHQG&4, 7KHEHVWSHUIRUPDQFHLVREWDLQHGZKHQ
DOOUHSRUWHG&4,YDOXHVDUHGLVWULEXWHGEHWZHHQDQG

7KHKV0HDVXUHPHQW3RZHU2IIVHWSDUDPHWHUVKRXOGEHVHWWRLWV
UHFRPPHQGHGYDOXHZKLFKKDVVKRZQJRRGSHUIRUPDQFHLQILHOG:KHQ
WKHVKDUHRI&4, LVKLJKHURURWKHUWKDQPHDVXUHGE\
SP5HSRUWHG&TL>@SP5HSRUWHG&TL>@RQHFRXOGFRQVLGHUDQ
DGMXVWPHQWRIWKLVSDUDPHWHU
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


 QXP+V6FFK&RGHVDQGKV6FFK0D[&RGH3RZHU

,WLVSRVVLEOHWRWUDQVPLWWRQXP+V6FFK&RGHVXVHUVRUPD[LPXPXSWRIRXU
XVHUVLQWKHVDPH77,7RDYRLGH[FHVVLYHSRZHUXVDJH+66&&+LVSRZHU
FRQWUROOHGZKHQXVLQJFRGHPXOWLSOH[LQJDQGWKHPD[LPXPSRZHUOHYHO
UHODWHGWR3&3,&+LVJLYHQE\KV6FFK0D[&RGH3RZHU

+6'3$FRGHPXOWLSOH[LQJLQFUHDVHVFHOOWKURXJKSXWLQFDVHVZKHUHRQH8(LV
QRWDEOHWRXWLOL]HWKHZKROH5%6SRZHUDQGWKHDYDLODEOH+6'6&+FRGH
UHVRXUFHLQRQH77,,QSRRUUDGLRWKHVLQJOH8(ZLOOFRQVXPHPRUHRIWKH
5%6SRZHUUHVRXUFHLQVRPHFDVHVHYHQDOODYDLODEOH5%6SRZHU7KHUHLV
QRWPXFK5%6SRZHUOHIWIRUDVHFRQGXVHURQWKHVDPH77,DQGWKHUHIRUH
WKHFDSDFLW\JDLQIURPFRGHPXOWLSOH[LQJLVVPDOOHU

7KHUHFRPPHQGHGSDUDPHWHUYDOXHIRUKV6FFK0D[&RGH3RZHULV
GHSHQGLQJRQLI+66&&+SRZHULVIL[HGWUDQVPLWWLQJZLWKFRQVWDQWSRZHURU
LI+66&&+SRZHUFRQWUROLVXVHG:KHQXVLQJ+66&&+SRZHUFRQWUROWKH
SRZHUVDYHFRPSDUHGWRIL[HG+66&&+LVVLJQLILFDQW)LHOGWULDOVKDYH
VKRZQWKDWWKHDYHUDJHSRZHUFDQEHUHGXFHGPRUHWKDQG%ZKHQXVLQJ
SRZHUFRQWUROOHG+66&&+$WUDGHRIIEHWZHHQSRZHUFRQVXPHGDQG
WKURXJKSXWQHHGVWREHPDGH)RUWKHFDVHZKHQ+66&&+LVSRZHU
FRQWUROOHGILHOGWULDOVKDYHVKRZQWKDW+6'3$WKURXJKSXWSHUIRUPDQFHLV
LPSURYHGZKHQLQFUHDVLQJWKHPD[LPXPDOORZHGFRGHSRZHUIRU+66&&+
E\G%IURPGHIDXOWVHWWLQJIURPG%WRG%UHODWLYH&3,&+7KLVLVGRQH
E\LQFUHDVLQJWKHSDUDPHWHUKV6FFK0D[&RGH3RZHU

7KHPHWKRGWRHYDOXDWHSRZHUFRQVXPSWLRQYHUVXVFHOOWKURXJKSXWLVWR
PRQLWRUSP1R2I+V8VHUV3HU7WLSP6XP2I+V6FFK8VHG3ZUDQGWKH5%6
WKURXJKSXW.3,VJLYHQLQ

 G\QDPLF+V3GVFK&RGH$GGLWLRQ2QQXP+V3GVFK&RGHVDQG
PD[1XP+V3GVFK&RGHV

:LWKG\QDPLF+V3GVFK&RGH$GGLWLRQ2QLWLVSRVVLEOHWRHQDEOH'\QDPLF
&RGH$OORFDWLRQLQDFHOOQXP+V3GVFK&RGHVPXVWEHVHWWRDWOHDVWRQH
+6'6&+FRGHLQRUGHUWRDFWLYDWH+6'3$LQDFHOO
PD[1XP+V3GVFK&RGHVLVXVHGWRJHWKHUZLWK'\QDPLF&RGH$OORFDWLRQDQG
VHWVWKHPD[LPXPQXPEHURI6)FRGHVWKDWFDQEHDOORFDWHGWR+6'6&+

7KHDYHUDJHFRGHWUHHXWLOL]DWLRQUHSRUWHGRQWKH6)OHYHOLVFDSWXUHGE\
SP6XP'O&RGHFRPELQHGZLWKSP6DPSOH'O&RGH1RWHWKDWWKHVHFRXQWHUV
GRQRWFDSWXUHWKHSHDNXVDJHDQGGRRQO\FRQVLGHUWKH5SRUWLRQ

7KHSUHYLRXVFRXQWHUVGRQRWPHDVXUHWKH+6'6&+FRGHVDOORFDWHGE\WKH
G\QDPLFFRGHDOORFDWLRQDOJRULWKPVLQFHWKLVDOJRULWKPLVH[HFXWHGLQWKH
5%6DQGWKHLQIRUPDWLRQRIFRGHDOORFDWLRQLVQRWUHSRUWHGWRWKH51&
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


,IG\QDPLFFRGHDOORFDWLRQIHDWXUHLVHQDEOHG5%6FRXQWHUV
SP6XP1XP+V3GVFK&RGHV$GGHGDQGSP6DPSOH1XP+V3GVFK&RGHV$GGHG
VKRXOGEHXVHGWRPHDVXUHWKH+6'6&+FRGHVXWLOL]HGLQWKHFHOO7KLV
FRXQWHUVKDYHWREHXVHGZLWKDWWHQWLRQ,QIDFWWKH\DUHVWHSSHGRQO\LIWKH
QXPEHURIFRGHVDOORFDWHGE\'&$LVFKDQJHGVRWKH\DUHQRWSURYLGLQJD
GLVWULEXWLRQRIFRGHXVHGSHUHDFK77,

7RPDNHXVHRIWKHFRXQWHUVDERYHWKH\QHHGWREHFRPELQHGZLWKWKH5%6
WKURXJKSXW.3,VJLYHQLQ

,QIRUPDWLRQRQZKLFKVLWHLVHTXLSSHGZLWKYDULRXV7;ERDUGVQHHGWREH
FRUUHODWHG)RULQVWDQFHD7;ERDUGPLJKWUHTXLUHDGLIIHUHQWFRQILJXUDWLRQ
WKDQD7;ERDUGQXP+V3GVFK&RGHVDQGPD[1XP+V3GVFK&RGHVFDQ
EHLQFUHDVHGLQDFDUULHUPDLQO\GHGLFDWHGWR+63$

 FRGH7KUHVKROG3GX

:KHQXVLQJELWUDWHVDERYH0ESVLWLVQHFHVVDU\WRLQFUHDVHWKH5/&3'8
VL]HIURPELWVWRELWVLQRUGHUWRQRWEHWKURXJKSXWOLPLWHGE\WKH5/&
3'8VL]H7KH3'8VL]HLVFRQWUROOHGE\WKHSDUDPHWHU
FRGH7KUHVKROG3GX

,IFRGH7KUHVKROG3GXLVVPDOOHUWKDQQXP+V3GVFK&RGHVWKHELW
5/&3'8VL]HZLOOEHXVHGIRU&DWHJRU\8(VRWKHUZLVHWKHELW5/&
3'8VL]HLVXVHG,I&DWHJRU\8(VDUHXVHGLQWKHV\VWHPDQGYHU\KLJK
GRZQOLQNWKURXJKSXWLVLPSRUWDQWLWLVUHFRPPHQGHGWRVHW
FRGH7KUHVKROG3GXQXP+V3GVFK&RGHV

1RVHUYLFHWULJJHUHGIDOOEDFNVWR5DUHSRVVLEOHZKHQWKH+6FRQQHFWLRQLV
HVWDEOLVKHGZLWKELW5/&3'8VL]H+RZHYHULWVSRVVLEOHWRPDNHD
FRYHUDJHWULJJHUHGIDOOEDFNWR5ZKHQOHDYLQJ+6'3$FRYHUDJH,WLVDOVR
SRVVLEOHWRPDNHDFHOOFKDQJHEHWZHHQFHOOVFRQILJXUHGIRUGLIIHUHQW5/&
3'8VL]HVRUELWV

7KHUHIRUHLWLVUHFRPPHQGHGWRXVHD5/&3'8VL]HRQO\IRUKLJK
QHWZRUNVZKHUHKLJKSHUIRUPDQFHLVSULRULWL]HGRYHUOLPLWHG5$%FKDQJH
FDSDELOLW\DQGGRZQOLQNWKURXJKSXWGHPRV

 $GGLWLRQDO(8/SDUDPHWHUV

 6,50D[DQG6LU0D[77,

2SWLPDOVHWWLQJVIRUWKHVHSDUDPHWHUVDUHLPSRUWDQWWRDVVXUHWKDWWKH2XWHU
/RRS3RZHU&RQWUROFDQPDLQWDLQWKHZDQWHGUHWUDQVPLVVLRQUDWHIRU(8/
+LJKHUVHWWLQJLVQHHGHGIRU(XOPV77,G%VXJJHVWHG,IQR(8/
HQDEOHGWKHQ6,50D[FDQEHVHWORZHUUHFRPPHQGHGLVG%ZKLOHZLWK
(8/PVWKHUHFRPPHQGHGYDOXHLVG%
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


 XO,QLW6LU7DUJHW(GFKDQGXO,QLW6LU7DUJHW(GFK7WL

7KHVHSDUDPHWHUVVHWWKHLQLWLDOXSOLQNVLUWDUJHWIRURUPV77,XVHUV
+LJKHUYDOXHVDUHUHFRPPHQGHGIRUPVXVHUV,QIDFWWRSURYLGHLPSURYHG
SHUIRUPDQFHDWKLJKELWUDWHVWKHJDLQIDFWRUVIRUWKH36LQWHUDFWLYH5$%RQ
PV77,DUHXSGDWHG$VDFRQVHTXHQFHWKHLQLWLDO8SOLQN6,57DUJHWIRU
PV77,XVHUVVKDOOEHLQFUHDVHGDVWKH'3&&+6,5ULVHVGXHWRWKHORZHU
SRZHURIIVHWV

 (XO6FKHGXOLQJ:HLJKW

,Q3LWLVSRVVLEOHWRDVVLJQWRHDFKORJLFDOFKDQQHODFHUWDLQ6FKHGXOLQJ
3ULRULW\,QGH[63,VHSDUDWHGIRU8/DQG'/,Q8/(DFK6FKHGXOLQJ3ULRULW\
LVDVVRFLDWHGZLWKDFRQILJXUDEOHZHLJKWIDFWRUHXO6FKHGXOLQJ:HLJKW2QO\WKH
VFKHGXOHGORJLFDOFKDQQHOVDUHFRQVLGHUHGWRGHWHUPLQHWKHRYHUDOO63,IRUD
XVHUXVHUVSL,QFDVHDXVHUKDVPRUHWKDQRQHVFKHGXOHGORJLFDOFKDQQHO
WKHXVHUV63,DQGWKHHXO6FKHGXOLQJ:HLJKWVKDOOEHWDNHQIURPWKH
VFKHGXOHGIORZWKDWKDVWKHKLJKHVW63,

7KLVSDUDPHWHULVDVHTXHQFHRIZHLJKWIDFWRUVDVVRFLDWHGZLWKWKH
6FKHGXOLQJ3ULRULW\,QGLFDWRUV63,V7KHZHLJKWIDFWRUVUHSUHVHQWWKHUHODWLYH
EDQGZLGWKEHWZHHQXVHUVDVVLJQHGWRWKHGLIIHUHQW6FKHGXOLQJ3ULRULWLHV,WLV
XVHGWRGLIIHUHQWLDWH8/4R6EHWZHHQXVHUV

8VHUSULRULW\KDVEHHQFKDQJHGFRPSDUHGWR3WDNLQJTRV3ULRDQGXVHU6SL
LQWRDFFRXQWDFFRUGLQJWRWKHIROORZLQJIRUPXODV

TRV3ULR

JUDQWHG5DWH

HXO6FKHGXOLQJ:HLJKW


,IHXO6FKHGXOLQJ:HLJKWLQILQLW\

LIHXO6FKHGXOLQJ:HLJKW LQILQLW\

XVHU6SL

1XPEHURI77,WKHXVHUKDVEHHQXQKDSS\

 (XO7DUJHWUDWHDQG(XO/RZUDWH

,IWKHVFKHGXOHGJUDQWLVEHORZHXO7DUJHW5DWHWKH(8/VFKHGXOHUDOZD\VWULHV
WRLQFUHDVHWKHVFKHGXOHGJUDQWWREHFRPHDWOHDVWHTXDOWRWKH
HXO7DUJHW5DWH,IWKHXVHULVWUDQVPLWWLQJDWORZHUWKURXJKSXWWKDQJUDQWHG
RQHWKHQWKHDEVROXWHJUDQWFDQEHUHGXFHGGRZQWR(XO/RZUDWH
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


'XULQJUHVFKHGXOLQJDXVHUZLWKORZHUSULRULW\DQGKLJKHUUDWHFDQQHYHUEH
UHVFKHGXOHGWRDUDWHORZHUWKDQ(XO7DUJHW5DWH)RUWKLVUHDVRQWRRKLJK
YDOXHVRI(XO7DUJHW5DWHFDQSUHYHQWWKHORZUDWHXVHUVWREHUHVFKHGXOHGWR
KLJKHUELWUDWHVGXHWRWKHLPSRVVLELOLW\WRUHVFKHGXOHKLJKELWUDWHXVHUVWR
ORZHUYDOXHVEHORZ(XO7DUJHW5DWHDQGWKH\FDQEHVWXFNDWORZ8/
WKURXJKSXWYDOXHV

 HXO6OLGLQJ:LQGRZ7LPH

7KHWKHUPDOQRLVHLVDOVRFDOFXODWHGE\57:3PHDVXUHPHQWVEXWVHOHFWLQJ
RQO\WKRVHVDPSOHVWKDWUHSUHVHQWDVLWXDWLRQIUHHRUDOPRVWIUHHRIWUDIILF7R
GRWKDWWKHORDGHVWLPDWRUFROOHFWVDQXPEHURIVDPSOHVLQDVOLGLQJZLQGRZ
GXULQJDFRQILJXUDEOHWLPHHXO6OLGLQJ:LQGRZ7LPH$VKRUWVOLGLQJZLQGRZ
WLPHPD\FDXVHVSXULRXVYDULDWLRQVLQWKHWKHUPDOQRLVHOHYHODORQJWLPH
PLJKWEHXQDEOHWRFDSWXUHQRUPDOYDULDWLRQVLQWKHWKHUPDOQRLVHOHYHOVXFK
DVWHPSHUDWXUHGULIW7KHUHFRPPHQGHGYDOXHLVKRXUVVHF7KH
FDOFXODWLRQVDUHIDFLOLWDWHGE\WKHXVHRISULRULQIRUPDWLRQUHJDUGLQJWKHQRLVH
IORRUOHYHOHXO7KHUPDOOHYHO3ULRU7KLVYDOXHUHSUHVHQWVWKHDQWLFLSDWHG
WKHUPDOQRLVHIORRUOHYHORIWKH5%6'HIDXOWYDOXHVHFPLJKWEHWRR
ORZDQGFDXVHZURQJHVWLPDWLRQRIWKHQRLVHIORRU

 +63$PRELOLW\DQGWUDIILFPDQDJHPHQW

 *HQHUDO

+63$PRELOLW\LVYHU\LPSRUWDQWIRUFXVWRPHUVLQZKLFKDVHFRQGFDUULHUKDV
EHHQGHSOR\HG,QWKHFDVHRIPXOWLFDUULHUVWKLVFKDSWHUFRXOGEHSDUWRID
ODUJHUVWUDWHJLFWUDIILFPDQDJHPHQWVFRSH7KLVFRXOGLQFOXGHFHOOVHOHFWLRQ
+6PRELOLW\DQG,QWHU)UHTXHQF\/RDG6KDULQJIRUH[DPSOH

7KH+6'3$3KDVH,,PRELOLW\IHDWXUHSURYLGHVPRELOLW\LPSURYHPHQWVLQWKH
VHQVHWKDWWKH+6'3$FRQQHFWLRQLVQRWGURSSHGDWD+6'3$FRYHUDJH
ERUGHURURYHU,XUEXWVZLWFKHGGRZQWR5'&+,WDOVRKDVWKHDELOLW\WR
VZLWFKXSD5'&+WR+6ZKHQWKHUHLV+6FRYHUDJH2QO\5'&+LV
DYDLODEOHLQ'51&XQWLOWKHFDOOLVUHOHDVHG,Q3WKLVIHDWXUHLVHQKDQFHG
E\DOORZLQJWKHSRVVLELOLW\WRSHUIRUPD6HUYLQJ+6'6&+&HOO&KDQJHWRRU
EHWZHHQH[WHUQDO'51&FHOOVRYHU,XUDQGWRSHUIRUPXSVZLWFKHVIURP'&+
WR+6'3$RYHU,XU

7KHPDLQEHQHILWLQXVLQJWKHSKDVHPRELOLW\IHDWXUHLVWKDWWKHSDFNHW
FRQQHFWLRQLVNHSW7KH8(UHPDLQVXQGHUFRQWURODQGWKHLQWHUUXSWLRQLQGDWD
WUDQVIHULVPLQLPL]HG

)RU.3,DQDO\VLV+6'URS5DWHFDQEHXVHGKRZHYHULWLVVWURQJO\
UHFRPPHQGHGWRIRFXVRQ+60LQXWHVSHUGURSDVWKLV.3,JLYHVDFOHDUHU
SLFWXUHRIDFWXDOSHUIRUPDQFH
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


 0DLQ+6'3$3DUDPHWHUV

 KV7R'FK7ULJJHU

7UDQVLWLRQ7\SHVIURP+6WR5FDQEHDOORZHGRUGLVDEOHGZLWKWKH
IROORZLQJPRELOLW\SKDVHSDUDPHWHUV

KV7R'FK7ULJJHUSRRU4XDOLW\'HWHFWHG

,IWKHTXDOLW\RIWKHFRQQHFWLRQLVSRRUDQGLQWHUIUHTXHQF\RULQWHU5$7
QHLJKERUVZRXOGSURYLGHEHWWHUFRYHUDJHHYHQWGRUGWKH
SRRU4XDOLW\'HWHFWHGIHDWXUHZLOOWULJJHUDWUDQVLWLRQIURP+6'6&+WR5
'&+

2QHVXJJHVWHGVWUDWHJ\LVWRRQO\XVHWKHSRRU4XDOLW\'HWHFWHGIHDWXUHZKHQ
,)+2LVWREHSHUIRUPHGRQDQ+6'3$FDSDEOHFHOO,QDOORWKHUFDVHVLW
,QDOORWKHUFDVHVLW
ZRXOGEHUHFRPPHQGHGWRNHHSWKH+6'3$FDOOLQ+6'3$FRYHUDJHDQG
ZDLWWRUHVHOHFWWKHRWKHUFDUULHURU5$7RQFHLWLVGURSSHG
ZDLWWRUHVHOHFWWKHRWKHUFDUULHURU5$7RQFHLWLVGURSSHG

.3,GHJUDGDWLRQVUHVXOWLQJIURPSLQJSRQJHIIHFWVVKRXOGEHFORVHO\
PRQLWRUHGZKHQIHDWXUHLVHQDEOHG7KLVLVEHFDXVHWKH+6XVHUPD\
H[SHULHQFHEDGTXDOLW\GXHWRVHOIJHQHUDWHGLQWHUIHUHQFHZKHQWUDQVPLWWLQJ
WKHQLWLVPRYHGWR'&+$IWHUPRYLQJWR'&+WKHLQWHUIHUHQFHVLWXDWLRQ
ZRXOGWKHQEHFRPHJRRGDJDLQQR+6WUDQVPLVVLRQDQ\PRUHDQGWKH8(
PDNHVDVZLWFKWRZDUGV+6DJDLQ

,WLVIRUWKLVUHDVRQWRJHWKHUZLWKWKHIDFWWKDWWKHSDUDPHWHULVVHWDWZKROH
51&OHYHOWKDWPDQ\RSHUDWRUVKDYHFKRVHQWRGLVDEOHWKLVIHDWXUH
SRRU4XDOLW\'HWHFWHG 2))

7KH&KDQQHO6ZLWFKLQJ6XFFHVV5DWHVKRXOGEHFORVHO\PRQLWRUHGDVLWKDV
EHHQUHSRUWHGWKDWWKHVXFFHVVUDWHLVORZGXHWRWKHUDGLRTXDOLW\LVWRRSRRU

1RWHFHUWDLQW\SHVRI8(VVXFKDV+XDZHL(86%0RGHPKDYHUHSRUWHG

1RWHFHUWDLQW\SHVRI8(VVXFKDV+XDZHL(86%0RGHPKDYHUHSRUWHG
H[SHULHQFLQJKLJKGURSVZKHQDWWHPSWLQJWRSHUIRUPGRZQVZLWFKIURP+6WR
57KLVKDVFDXVHGWKH36'URS5DWHWREHYHU\KLJK
57KLVKDVFDXVHGWKH36'URS5DWHWREHYHU\KLJK

KV7R'FK7ULJJHUVHUY+V&KDQJH,QWHU51&



$W\SLFDOH[DPSOHLVDWWKHERUGHUEHWZHHQDQLVODQGRIFHOOVZLWKWZRFDUULHUV+6RQIDQGDPDLQODQGZLWKRQH
FDUULHU+6RQI
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


,IWKHSDUDPHWHUVHUY+V&KDQJH,QWHU5QFLV21DGRZQVZLWFKWR'&+LV
WULJJHUHGDVWKHFDOOPRYHVWRZDUGVDQ,XUERUGHU7KLVDSSOLHVZKHQWKH
VHUYLQJFHOOLVUHPRYHGIURPWKHDFWLYHVHWDQGWKHEHVWFHOOLVDQLQWHU51&
H[WHUQDOFHOOHYHQWERUF7KHSDFNHWFDOOFDQWKHQEHNHSWRQ'&+5
RQWKH'51&1RWUDQVLWLRQWR+6'6&+LVSRVVLEOHXQWLOWKH8(KDVEHHQ
LQDFWLYHDQGKDVEHHQPRYHGWR)$&+VWDWH:KHQLQ)$&+VWDWHWKH8(
PD\EHXSVZLWFKHGWR+6'6&+DJDLQ

,IDWUDQVLWLRQWR'&+LVQRWDOORZHGIHDWXUHLV2))DQ55&FRQQHFWLRQ

UHOHDVHLVWULJJHUHG7KH55&FRQQHFWLRQUHOHDVHPHVVDJHZLOOFRQWDLQWKH
FDXVHYDOXHGLUHFWHGVLJQDOLQJFRQQHFWLRQUHHVWDEOLVKPHQWZKLFKPDNHVD
FDOOUHHVWDEOLVKPHQWLPPHGLDWHO\DWWHPSWHGRQWKHQHZEHVWFHOORQ+6'3$
RU5GHSHQGLQJRQWKHQHZEHVWFHOOFDSDELOLWLHV,IDFDOOLVXVLQJ+6&6
PXOWL5$%WKHQWKH&6SDUWRQO\FDQUHPDLQRYHU,XU

1RWHWKDWZLWKELW5/&3'8VL]HLQWHU51&+6'3$PRELOLW\EHKDYLRULV
QRWVXSSRUWHGHYHQLISDUDPHWHULIVHUY+V&KDQJH,QWHU5QFLV21

KV7R'FK7ULJJHUVHUY+V&KDQJH,QWUD5QFDWHYHQWERUF

,IWKHSDUDPHWHUVHUY+V&KDQJH,QWUD5QFLV21DGRZQVZLWFKWR'&+LV
WULJJHUHGZKHQWKHVHUYLQJFHOOLVUHPRYHGIURPWKHDFWLYHVHWDQGWKHEHVW
FHOODQLQWUD51&QRQ+6LQWHUQDOFHOOHYHQWERUF7KLVLVVLPLODUWR
IHDWXUHVHUY+V&KDQJH,QWHU51&+RZHYHULQWKLVVLWXDWLRQWKHFDOOLVQRWDW
WKH,XUERUGHU

,IVHUY+V&KDQJH,QWUD5QFLV2))WKHQWKHFRQQHFWLRQLVUHOHDVHG7KHUHIRUH
WKLVIHDWXUHFDQEHEHQHILFLDOLQUHGXFLQJRXWDJHWLPHV

KV7R'FK7ULJJHUFKDQJH2I%HVW&HOO,QWUD5QF

,IDQHYHQWG+6LVWULJJHUHGDQGWKHUHLVQRVXLWDEOH+6'6&+FHOOEDVHG
RQKV+\VWHU\VLVGDVDWDUJHWFHOODWUDQVLWLRQWR'&+LVLQLWLDWHG7KLVZLOO
KDSSHQLIWKHSDUDPHWHUFKDQJH2I%HVW&HOO,QWUD51&LV21,IWKHSDUDPHWHULV
2))WKHQQRDFWLRQLVWDNHQ

36RIWZDUH/LPLWDWLRQDWHYHQWG+6

,IWKHSDUDPHWHUKV&HOO&KDQJH$OORZHG )$/6(WKHQWKHIHDWXUH
FKDQJH2I%HVW&HOO,QWUD51&GRHVQRWZRUNDVGHVFULEHGLQ&3,GRFXPHQWV

7KLVSDUDPHWHUVKRXOGWULJJHUWKHFKDQJHWR5ZKHQWKHUHZLOOEHHYHQWG
+6WULJJHUHGDQGWKHQHLJKERXUFHOOLVQRW+6'3$FDSDEOHRUWKHSDUDPHWHU
WKDWHQDEOHVFHOOFKDQJHLVVHWWR)$/6(



,WKDVEHHQUHSRUWHGWKDWELW5/&3'8VL]HPRELOLW\GRHVQRWZRUNLQWUD51&LQDGGLWLRQWRLQWHU51&
KRZHYHUWKLVQHHGVWREHFRQILUPHG
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


7HVWVKDYHVKRZQWKDWWKHUHZLOOEHQRFKDQJHWR5,QVWHDGRIGRZQVZLWFK
WR5DGURSFDOORFFXUVDQGDIWHUZDUGVD'&+HVWDEOLVKPHQW7KH
ZRUNDURXQGIRUWKHSUREOHPLVWRVHWKV&HOO&KDQJH$OORZHG 758(DVZHOO
DVKDYLQJFKDQJH2I%HVW&HOO,QWUD5QF 215HIHUWR755HSRUW6HH
+-IRUGHWDLOV

KV7R'FK7ULJJHUFKDQJH2I%HVW&HOO,QWUD51&

,WLVQHZLQ3DQGLQGLFDWHVZKHWKHUDWULJJHUIRUD+6'6&+WR'&+
WUDQVLWLRQLVDFFHSWHGRUQRWZKHQ6HUYLQJ+6'6&+&HOO&KDQJHFDQQRWEH
FRPSOHWHGZKHQLWKDVEHHQWULJJHUHGE\DFKDQJHRIEHVWFHOOHYHQWG
LQGLFDWLRQDQGWKHFHOOLVDQLQWHU51&875$1&HOO

 FHOO&DSDELOLW\KVGVFK6XSSRUW

,QRUGHUWRDOORZ+6FHOOFKDQJHRYHU,XUFHOO&DSDELOLW\KVGVFK6XSSRUWKDVWR
EHVHW21IRUWKH0DQDJHG2EMHFWV([WHUQDO8WUDQ&HOODQG,XU/LQN0RUHRYHU
IRUH[WHUQDO'51&FHOOVRYHU,XUERWKDFRYHUDJHUHODWLRQDQGDQHLJKERXU
UHODWLRQPXVWEHGHILQHGWRVXSSRUW&HOO6HOHFWLRQDQG
KVSD3DWKORVV7KUHVKROGDSSOLHVIRUFHOOVHOHFWLRQIRU'51&FHOOVGHIDXOW


 ORDG6KDULQJ0DUJLQ

,I5RQO\FHOOVDQG+6'3$HQDEOHGFHOOVDUHGHSOR\HGRQVHSDUDWH
IUHTXHQFLHVDQGLI,)/6,QWHU)UHTXHQF\/RDG6KDULQJLVGHSOR\HGWKH
ORDG6KDULQJ0DUJLQSDUDPHWHUFDQEHXVHGWRDUWLILFLDOO\ORDGWKH+6'3$
FHOOV,QWKLVZD\PRUH5XVHUVZLOOEHNHSWRQRUUHGLUHFWHGWRWKH5
RQO\FHOOVDQGWKHSRZHULQWKH+6'3$FDQEHUHVHUYHGIRU+6'3$XVHUV
7KHDPRXQWRIUHVRXUFHH[FOXGHGIURPORDGVKDULQJXVHLVVSHFLILHGE\WKH
FHOOSDUDPHWHUORDG6KDULQJ0DUJLQDVDSHUFHQWDJHRISZU$GP

7KHORDG6KDULQJ0DUJLQGHIDXOWVHWWLQJLVKRZHYHULWLVVXJJHVWHGWR
LQFUHDVHWKLVSDUDPHWHULQWKH+6'3$HQDEOHGFHOORQVHSDUDWHIUHTXHQF\LI
WRRPXFK5WUDIILFLVEHLQJUHGLUHFWHGWRLWDQGWKH+6'3$SHUIRUPDQFHLV
UHGXFHGGXHWRODFNRISRZHU5HVXOWVIURPWKHILHOGLQGLFDWHWKDWD
ORDG6KDULQJ0DUJLQRILQWKH+6FHOOLVDEOHWRUHGXFHYHU\PXFKWKH
,)/6DFWLYLW\UDWH

$QDOWHUQDWLYHVHWWLQJLVORDG6KDULQJ0DUJLQ LQWKH+6HQDEOHGFHOO
DQGORDG6KDULQJ0DUJLQ LQWKH5RQO\FHOO,QWKLVZD\WKH+6
IUHTXHQF\LVNHSWFOHDUHGRQQRQ+6WUDIILFXQWLOWKH5IUHTXHQF\LVDW
ORDG6KDULQJ0DUJLQRISZU$GP7KLVUHVXOWVLQDSRZHUEXIIHUHTXDOWR
ORDG6KDULQJ0DUJLQLQWKH5FHOOZKLFKWXUQVRXWWREHVXLWDEOHWRKDQGOH
OHJDF\8(VPRELOLW\RU5XSVZLWFKHV
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


,WVKRXOGQRWEHIRUJRWWHQWKDW,)/6LVEDVHGRQO\RQSRZHU2WKHUFDSDFLW\
OLPLWVVXFKDVFKDQQHOL]DWLRQFRGHVRUFKDQQHOHOHPHQWVDUHQRWFRQVLGHUHG
LQ,)/6:KHQ'/SRZHULVQRWWKHPRVWOLPLWLQJUHVRXUFHLWLVVWLOOSRVVLEOHWR
UHGXFHSZU$GPLQWKH5FHOODQGVHWORDG6KDULQJ0DUJLQ LQWKH+6'3$
FHOOVRDVWRWULJJHUWKH,)/6DWDQHDUOLHUVWDJHORZHUSRZHUUHVRXUFHXVDJH
DQGWRDYRLGEORFNLQJRI5GXHWRRWKHUUHVRXUFHV

)LQDOO\ORDG6KDULQJ0DUJLQ!LQWKH+6HQDEOHGFHOOLVDOVRDQHIIHFWLYH
ZD\WRSURYLGHVRIWSRZHUUHVHUYDWLRQWR+6WUDIILFLQFDVHRIQRUPDO5
WUDIILFVKDULQJEHWZHHQWKH5DQGWKH+6FHOO

 KV+\VWHUHVLVGKV7LPH7R7ULJJHUG

7ZRPDLQSDUDPHWHUVWKDWFDQGLUHFWO\DIIHFW+6&HOOFKDQJHDUH
KV+\VWHUHVLVGDQGKV7LPH7R7ULJJHUG*HQHUDOO\DKLJKQXPEHURIFHOO
FKDQJHVUHVXOWVLQPRUHWUDIILFLQWHUUXSWLRQVRXWDJHWLPHVDQGJUHDWHUULVNRI
5/&UHWUDQVPLVVLRQ7KLVZLOOKDYHDGLUHFWLPSDFWRQWKH+6XVHUWKURXJKSXW

$PDLQJRDOZRXOGEHWRPLQLPL]HWKHQXPEHURIFHOOFKDQJHVLPSDFWRISLQJ
SRQJHIIHFWVZKLOHDWWKHVDPHWLPHPDLQWDLQLQJORZUHWUDQVPLVVLRQUDWHDV
WKH+6FRYHUDJHFRXOGGHFUHDVH

+LJKYDOXHVRIKV+\VWHUHVLVGDQGKV7LPH7R7ULJJHUGFDQEHH[SHFWHG
WR

x 5HGXFHQXPEHURISLQJSRQJFKDQJHVLQFUHDVHWKURXJKSXW

x 3RVVLEO\ORZHUUHSRUWHG&4,YDOXHVGXHWRORQJHUWLPHRQQRQEHVW
VHUYLQJFHOOUHGXFHGWKURXJKSXW

/RZYDOXHVRIKV+\VWHUHVLVGDQGKV7LPH7R7ULJJHUGFDQEHH[SHFWHG
WR

x ,QFUHDVHQXPEHURISLQJSRQJFHOOFKDQJHVUHGXFHWKURXJKSXW

x 3RVVLEO\KLJKHUUHSRUWHG&4,YDOXHVGXHWRVKRUWHUWLPHRQQRQEHVW
VHUYLQJFHOOLQFUHDVHGWKURXJKSXW

6RPHLQLWLDOWHVWLQJZLWKLQFUHDVLQJKV7LPH7R7ULJJHUGIURPPVWR
PVKDVVKRZQWKDWWKHQXPEHURISLQJSRQJFHOOFKDQJHVUHGXFHVZKLFK
KDVOHDGWRDQLQFUHDVHLQWKURXJKSXW1RPDMRUGHJUDGDWLRQLQUHSRUWHG&4,
YDOXHVFRXOGEHFRQILUPHGZLWKWKHFKDQJH



   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


2WKHUWHVWLQJRQKV+\VWHUHVLVGKDVVKRZQWKDWDQLQFUHDVHIURPG%WR
G%UHVXOWVLQDUHGXFWLRQRIPRELOLW\HYHQWVXSWRDWZKROH51&OHYHO
PRQLWRUHGE\SP1R+V&F$WWHPSW(5/B36B+67KH0LQXWHVSHU'URS+6
'DWDLVQRWDIIHFWHGDQGWKHUHLVQRYLVLEOHLPSDFWRQDYHUDJHUHSRUWHG&4,
HYHQLIWKHLPSDFWVKRXOGEHPRQLWRUHGE\ORRNLQJDWWKHZKROHGLVWULEXWLRQ
7KH+6'DWD5HWUDQVPLVVLRQ5DWH5/&OHYHOVHHPVWRLQFUHDVHE\
HYHQLIWKHDEVROXWHYDOXHUHPDLQVEHORZ)LQDOO\WKHWKURXJKSXWDW
51&OHYHOUHPDLQVVWDEOH

 0DLQ(8/3DUDPHWHUV

 (XO0D[6KR5DWH

,WGHILQHVWKHPD[LPXPUDWHWKDWPD\EHDOORFDWHGLQWKHVHUYLQJFHOOIRU
VFKHGXOHGGDWDWRDQ('&+XVHUGXULQJDVRIWKDQGRYHU

,WLVTXDQWL]HGIRUPVRUPV8HV,IWKHYDOXHLVVHWKLJKHUWKDQWKH
PD[LPXPIRUPVWWLWKHQLWLVTXDQWL]HGWRWKHPD[LPXPIRUPV,WLV
UHFRPPHQGHGWRXVHPD[LPXPYDOXHEXWLWFDQEHGHFUHDVHGWRFRQWURO8/
LQWHUIHUHQFH

 (XO1RQ6HUY+Z5DWH

:KHQDXVHULVLQVRIWKDQGRYHUWKH+:UHVRXUFHVDOORFDWHGIRUSURFHVVLQJ
GDWDLQWKHQRQVHUYLQJFHOOKDYHWREHVWDWLFDOO\DOORFDWHGEHFDXVHWKHQHZ
5%6GRHVQRWNQRZWKHDEVROXWHUDWHJUDQWHGE\WKHVHUYLQJFHOO
(XO1RQ6HUY+Z5DWHVHWVWKHDPRXQWRIKDUGZDUHUHVRXUFHVLQWHUPVRIDELW
UDWHWKDWG\QDPLFDOO\PD\EHDOORFDWHGLIDYDLODEOHWRDQRQVHUYLQJ('&+
UDGLROLQNIRUSURFHVVLQJVFKHGXOHGGDWD

)RUHDFKUDWHEHWZHHQ(XO1RQ6HUY+Z5DWHDQG(XO0D[6KR5DWHWKHUHDUH
QRUHVRXUFHVLQWKHQRQVHUYLQJ5%6WRSURFHVVWKHGDWDVRWKHUHZLOOEHQR
GDWDVHQWWR51&LQWKHDGGLWLRQDO,XEOLQNDQGWKHFRQVHTXHQFHZLOOEHWKH
ORVWRIWKHSRVVLEOHVKRJDLQ'DWDZLOOVWLOOEHVHQWRQWKHVHUYLQJ,XEOLQNZLWK
DUDWHXSWRWKHYDOXHVHWE\(XO0D[6KR5DWH

,QWKHDLULQWHUIDFHWKHQRQVHUYLQJUDGLROLQNZLOOVWLOOEHRQDLUDQGLWZLOODOVR
WDNHDFWLRQVLQWKHSRZHUFRQWURODOJRULWKP

,IWKHUHLVQRWWKHSRVVLELOLW\WRDOORFDWHLQWKHQRQVHUYLQJ5%6WKH+:
UHVRXUFHVVHWE\(XO1RQ6HUY5DWHGXHWR5WUDIILFWKHQRQO\DPLQLPXP
VHWRIUHVRXUFHVDUHUHVHUYHGLQWKHQRQVHUYLQJ5%67KLVPLQLPXPDPRXQW
RITXDQWLW\LVHTXDOWRHXO0LQ+Z6FK5DWHNESVE\GHIDXOWDQGLWVWKH
RQO\SDUWRIWKH8/+:FRQVLGHUHGE\DGPLVVLRQFRQWURODOJRULWKP
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


:KHQHYHU5QHHGVWKHDPRXQWRIUHVRXUFHVVHWE\(XO1RQVHUY+Z5DWHLQ
WKHQRQVHUYLQJFHOOFDQEHVXEWUDFWHGGRZQWRHXO0LQ+Z6FK5DWH)RUWKLV
UHDVRQWKHSDUDPHWHUHXO1RQ6HUY+Z5DWHFRXOGEHGHFUHDVHGWRUHGXFHWKH
FKDQQHOHOHPHQWFRQVXPSWLRQDVVRFLDWHGWRQRQVHUYLQJ(8/UDGLROLQNV
+RZHYHULWVKRXOGEHQRWHGWKDW(8/VRIWKDQGRYHURYHUKHDGVKRXOGQRW
KDYHDELJLPSDFWRQWKH5FDSDFLW\VLQFHWKH&(DOORFDWLRQLQQRQVHUYLQJ
FHOOLVG\QDPLFDQG&(VFDQDOZD\VEHWDNHQIURP5ZKHQQHHGHG

7KHIROORZLQJILJXUHUHSUHVHQWVWKHDOJRULWKPLQ3


3+:HIILFLHQF\


 HXO1RQ6HUY+Z5DWH
G\QDPLF
 G\QDPLF
RQ
IL[HG
GHPDQG

HXO0LQ+Z6FK5DWH

VWDWLF VWDWLF


 VHUYLQJ QRQVHUYLQJ
5/ 5/


1RLQWHUPHGLDWHVWHSVEHWZHHQ(XO0LQ+Z6FK5DWHDQG(XO1RQ6HUY+Z5DWH
DUHDOORZHGWREHDOORFDWHGLQWKHQRQVHUYLQJFHOO)RUWKLVUHDVRQ
(XO1RQ6HUYLQJ+Z5DWHVKRXOGEHVHWORZHQRXJKWRJXDUDQWHHPRVWRIWKH
WLPHVWKHFKDQFHWRDOORFDWHWKLVDPRXQWRI+:LQWKHQRQVHUYLQJ5%6DQG
KLJKHQRXJKWRH[SORLWWKHVKRJDLQLQWKH51&

 HYHQWG5QF7KUHVKROGDQGHYHQWG5QF2IIVHW

:KHQD(8/XVHUPRYHVLQWRDFHOOZKHUH(8/LVQRWVXSSRUWHGWKH
FRQQHFWLRQPXVWILUVWO\EHUHFRQILJXUHGWR'&+LQ8/VRWKDWWKHQRQ(8/FHOO
WKHQFDQEHDGGHGWRWKHDFWLYHVHWVLQFHQRQ(8/FHOOVFDQQHYHUEHDGGHG
LQD(8/DFWLYHVHW

7KLVLVWULJJHUHGE\PRQLWRULQJSHULRGLFDDQGFHYHQWUHSRUWVUHTXHVWLQJWR
DGGWKHQRQ(8/FHOOWRWKHDFWLYHVHW,IHYHQWG5QF7KUHVKROGQXPEHURI
FRQVHFXWLYHHYHQWDDQGRUHYHQWFUHSRUWVDUHUHFHLYHGUHTXHVWLQJWRDGG
WKHVDPHQRQ(8/FDSDEOHFHOODQGZKHUHDOOWKHUHSRUWVDUH
HYHQWG5QF2IIVHWVWURQJHUWKDQWKHFXUUHQWVHUYLQJFHOOWKHQD
UHFRQILJXUDWLRQWR'&+LQ8/LVWULJJHUHG:KHQWKHFRQQHFWLRQKDVEHHQ
UHFRQILJXUHGWR'&++6'3$LHZLWKRXW(8/WKHQVRIWVRIWHU+2VKDOO
H[HFXWHWKHODWHVWDRUFUHSRUWDQGDGGRUUHSODFHWKHQRQ(8/FHOOWRWKH
DFWLYHVHW
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


7KHVHQVLWLYLW\RIWKLVWULJJHUWKDWLVKRZORQJWKHXVHUFDQNHHSWKH(8/
FRQQHFWLRQZKHQGULYLQJLQWRDQRQ(8/FHOOFDQEHDGMXVWHGZLWKWKH
SDUDPHWHUVHYHQWG5QF7KUHVKROGDQGHYHQWG5QF2IIVHW,I
HYHQWG5QF7KUHVKROG WKHQHYHQWG51&VKDOOQHYHUEHWULJJHUHG

7KHKLJKHULVWKHWLPHWRZDLWWRUHFRQILJXUHWR'&++6'3$WKHKLJKHUZLOOEH
WKHWLPHLQ(8/ZLWKWKHFKDQFHRIKDYLQJKLJKHU8/WKURXJKSXWEXW
VLPXOWDQHRXVO\WKHKLJKHUZLOODOVREHWKHLQWHUIHUHQFHLQ8/GXHWRWKHIDFW
WKDWWKHFRQQHFWLRQLVSRZHUFRQWUROOHGE\DFHOOWKDWLVJHWWLQJIDUWKHUZKLOH
WKHSUREDEOHEHVWFHOOFDQQRWEHDGGHGLQWKH$6

$VHWWLQJWRH[HFXWHDIDVWUHFRQILJXUDWLRQFRXOGEHXVHGWRGHFUHDVH
LQWHUIHUHQFHDW(8/HGJHRIFRYHUDJHZKLOHLQRUGHUWRKDYHKLJKHU8/
WKURXJKSXWSHUIRUPDQFHVDGHOD\HGUHFRQILJXUDWLRQVKRXOGEHFRQVLGHUHG

7KHHYHQWG51&HYDOXDWLRQDQGFDOFXODWLRQVKDOOEHUHVWDUWHGLIWKHDFWLRQV
LQLWLDWHGE\DSUHYLRXVHYHQWG51&IDLOHGDQGWKHFRQQHFWLRQUHPDLQVRQ(
'&+

,IWKHVZLWFKWR'&+LQ8/LVEORFNHGE\$GPLVVLRQ&RQWURORUIDLOVWKH
FRQQHFWLRQVKDOOEHUHOHDVHG

 $GGLWLRQDO+6'3$SDUDPHWHUV

 KV4XDOLW\(VWLPDWH

7KH8(PHDVXUHPHQWFULWHULRQIRU+6FHOOFKDQJHLVGHWHUPLQHGE\SDUDPHWHU
KV4XDOLW\(VWLPDWH,WLVUHFRPPHQGHGWRNHHSWKHGHIDXOWYDOXHRIWKLV
SDUDPHWHUZKLFKLV&3,&+B56&3LQVWHDGRI&3,&+B(F1RLQRUGHUWRKDYH
DPRUHVWDEOHEHKDYLRUDYRLGLQJSLQJSRQJVLWXDWLRQVDV&3,&+56&3LVQRW
ORDGGHSHQGHQWDQGIOXFWXDWHVOHVVWKDQ(F1R

$QRWKHUUHDVRQIRUDYRLGLQJ&3,&+B(F1RDVDTXDOLW\PHDVXUHPHQWLVWKDW
(F1RGHJUDGHVLQFHOOVFDUU\LQJ+6'3$WUDIILFDIWHUDQ+6FHOOFKDQJH
(F1RRIWKHROGVHUYLQJ+6FHOOLPSURYHVZKHUHDVWKDWRIWKHQHZVHUYLQJ+6
FHOOVXGGHQO\EHFRPHVZRUVH7KLVPLJKWFDXVHXQGHVLUHGSLQJSRQJ
EHKDYLRU

8VLQJ&3,&+B56&3PLJKWFUHDWHSUREOHPVLQVSHFLDOFLUFXPVWDQFHVVXFK
DVWKHUPDOQRLVHOLPLWHGFRYHUDJHOLPLWHGDUHDVLQGRRUFRYHUDJHDUHDVIRU
H[DPSOH
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


 KV3DWKORVV7KUHVKROG

,QDQHWZRUNZLWKWZRFDUULHUVISXUHO\5FDSDEOHDQGIKDYLQJERWK5
DQG+6'3$HQDEOHGDFRQILJXUDWLRQDOORZLQJ+6'3$FDOOVIRUDOO+6'3$
FDSDEOH8(VLVWRGHILQHDFRYHUDJHUHODWLRQEHWZHHQHDFKSDLURIFHOOV
EHORQJLQJWRWKHVDPHVHFWRU7KLVZD\D8(LQLWLDWLQJDSDFNHWFDOORQIZLOO
EHDEOHWRVHWXSDQ+6'3$FDOORQIWKURXJKEOLQGKDUGKDQGRYHUSURYLGHG
WKDWWKHSDWKORVVFULWHULDLVYHULILHG

7KHGHIDXOWYDOXHIRUKV3DWKORVV7KUHVKROGSDUDPHWHULVG%ZKLFK
DOORZVDOO+6'3$FDSDEOH8(VLQLWLDWLQJDSDFNHWFDOORQIWRDWWHPSWDKDUG
KDQGRYHUWRDFRYHUDJHUHODWHGIFHOO7RRSWLPL]HWKHKDUGKDQGRYHU
VXFFHVVUDWHKV3DWKORVV7KUHVKROGFDQEHVHWWRDYDOXHORZHUWKDQGHIDXOW
7RWXQHWKLVSDUDPHWHUWKHVWDWLVWLFVRIWKHEOLQGKDUGKDQGRYHUVXFFHVVUDWH
FDQEHHYDOXDWHG0RVWRIILHOGUHVXOWVKDYHVKRZQYHU\KLJKKDUGKDQGRYHU
VXFFHVVUDWHZLWKWKHGHIDXOWVHWWLQJV,QRWKHUVWXGLHVLWKDVEHHQIRXQGWKDW
DSURSRVHGVHWWLQJVGRZQWRKV3DWKORVV7KUHVKROG LVRSWLPXPIRU.3,
SHUIRUPDQFH

7KHKV3DWKORVV7KUHVKROGGHIDXOWYDOXHDOORZVDOO8(VRQIWRDWWHPSWD
EOLQGKDUGKDQGRYHUWRWKHFRYHUDJHUHODWHGFHOO,WVKRXOGEHKRZHYHUQRWHG
WKDWDIDLOHGKDUGKDQGRYHUFRXOGUHVXOWHLWKHULQDQDWWHPSWWRHVWDEOLVKDQ
5365$%RQWKHIVRXUFHFHOORUVRPHWLPHVLQDQDFFHVVLELOLW\IDLOXUH7R
HQVXUHDKLJKEOLQGKDUGKDQGRYHUVXFFHVVUDWHWKHKV3DWKORVV7KUHVKROG
SDUDPHWHUFDQEHVHWWRDORZHUYDOXHWKDQWKHGHIDXOWRQHIRUH[DPSOHHTXDO
WRSULPDU\&SLFK3RZHUPLQXVPLQLPXP&3,&+56&3ZKHUHPLQLPXP
&3,&+56&3LVWKHPHGLDQYDOXHRI&3,&+56&3PHDVXUHPHQWVDWKDUG
KDQGRYHUIDLOXUHV

 $GGLWLRQDO(8/SDUDPHWHUV

 HXO1RQ6HUYLQJ&HOO8VHUV$GP

7KLVSDUDPHWHUVHWVWKHDGPLVVLRQWKUHVKROGIRUWKHQXPEHURI('&+XVHUV
KDYLQJWKLVFHOODVQRQVHUYLQJFHOO,WLVLPSDFWLQJWKHPRELOLW\DVZHOODVWKH
FDSDFLW\,QIDFWLWFDQEHXVHGWROLPLWWKHLPSDFWRIVWDWLFFKDQQHOHOHPHQW
UHVHUYDWLRQIRUQRQVHUYLQJUDGLROLQNVLQDQ5%6GLIIHUHQWIURPWKHVHUYLQJ
RQH


   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


 &KDQQHOVZLWFKLQJ

 *HQHUDO

&KDQQHO6ZLWFKLQJLVDNH\DOJRULWKPWREHFRQVLGHUHGZKHQGHDOLQJZLWK
+63$RSWLPL]DWLRQ7KHSXUSRVHRIWKH&KDQQHO6ZLWFKLQJIHDWXUHLVWR
G\QDPLFDOO\FKDQJHWKHSK\VLFDOUHVRXUFHVDOORFDWHGWRWKH8(DFFRUGLQJWR
WKHDPRXQWRIGDWDWKDWQHHGVWREHWUDQVPLWWHGLQ8/DQG'/DQGWKHQHWZRUN
DYDLODELOLW\7KLVLVDFKLHYHGE\VZLWFKLQJWKHLQWHUDFWLYH5$%XVHUVEHWZHHQ
GLIIHUHQWWUDQVSRUWFKDQQHOW\SHV7ZRW\SHVRIFKDQQHOVZLWFKLQJDUH
FRQVLGHUHG

x &KDQQHOW\SHVZLWFKLQJEHWZHHQ
R )$&+DQG(8/+6'3$
R )$&+DQG'&++6'3$

x &KDQQHOUDWHVZLWFKLQJIURP
R '&+WR(8/+6'3$
R '&+WR'&++6'3$
R '&++6'3$WR(8/+6'3$

$IXOOGHVFULSWLRQRIWKH&KDQQHO6ZLWFKLQJIHDWXUHDQGDOJRULWKPLVJLYHQLQ
>@

7KHSXUSRVHRIWKHFKDQQHOVZLWFKLQJRSWLPLVDWLRQDFWLYLW\LVWRILQGDWUDGHRII
EHWZHHQUHVRXUFHXVDJHDQGVZLWFKLQJWUDQVLWLRQVRUXVHUDFFHVVWLPH2QH
FDQVDYH(UODQJDQGKDUGZDUHFRQVXPSWLRQLQ8/RQRQHVLGHRUUHGXFH
WKHXQQHFHVVDU\XSGRZQVZLWFKHVRQWKHRWKHUZKLFKLPSO\ORZHUDFFHVV
WLPHDQGEHWWHUHQGXVHUSHUFHSWLRQ

 0DLQSDUDPHWHUV

 KVGVFK,QDFWLYLW\7LPHU

,WVHWVWKHWLPHGXULQJZKLFKWKURXJKSXWKDVWREHORZLQRUGHUWRWULJJHUD
GRZQVZLWFKGHGLFDWHGWR)$&+IRUD8(LQVWDWH'&++6RULQVWDWH
(8/+6

$KLJKWLPHUYDOXHOHDGVWRDUHGXFWLRQLQWKHFKDQQHOVZLWFKLQJDFWLYLW\DQGD
TXLFNHUDFFHVVWLPH7KH8(ZLOOH[SHULHQFHWKHGHOD\RIVZLWFKLQJIURP
)$&+WRWKHGHGLFDWHGDQGVKDUHG+6FKDQQHOVOHVVIUHTXHQWO\,QORZORDGHG
FHOOVWKLVVKRXOGLPSURYHXVHUH[SHULHQFHZLWKRXWDIIHFWLQJUHVRXUFH
XWLOL]DWLRQLQWHUPVRIFRGHVDQG8/+:WRDJUHDWH[WHQW$WRRKLJKLQFUHDVH
LQ(UODQJFRXOGOHDGWRUHVRXUFHVKRUWDJHDQGEORFNLQJSUREDELOLW\,QKLJK
ORDGHGFHOOLWZLOOEULQJWRORZDFFHVVLELOLW\GXHWRODFNRIUHVRXUFHV
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


7KHUHLVDQLPSRUWDQWUHODWLRQVKLSWRWKHWZRSDUDPHWHUV
S S S
GO7KURXJKSXW'RZQVZLWFK7LPHUDQGXO7KURXJKSXW'RZQVZLWFK7LPHU,I
GO7KURXJKSXW'RZQVZLWFK7LPHUU GXO7KURXJKSXW'RZQVZLWFK7LPHU
ERWKRIWKHVHWLPHUVDUHFRQILJXUHGWRDVKRUWHUWLPHWKDQWKH
KVGVFK,QDFWLYLW\7LPHUWKH+6FRQQHFWLRQGRZQVZLWFKWR+6EHIRUH
DQ\GRZQVZLWFKWR)$&+LVPDGH

$QLQFUHDVHGKVGVFK,QDFWLYLW\7LPHUYDOXHIURPVHFWRVHFW\SLFDOO\
LQFUHDVHVWKH51&7UDIILF+651&B(5/B+6E\ZKHQWKH+6
EHDUHULVFRQVLGHUHG$VLPLODUGHFUHDVHLQXSVZLWFKHVIURP)$&+WR+6'3$
FDQEHFDSWXUHGZLWKSP8SVZLWFK)DFK+V$WWHPSWDQG
SP8SVZLWFK)DFK+V6XFFHVV7KH0LQXWHVSHU'URS+6'DWDUHPDLQV
DOPRVWVWDEOHZKLOHLWLVGLIILFXOWWRPRQLWRUXVHUH[SHULHQFHLPSURYHPHQWVLQ
WHUPVRIWKURXJKSXWZLWKWKHH[LVWLQJFRXQWHUV

2QWKHRWKHUKDQGDORZHUYDOXHDOORZWRVDYH+:FRQVXPSWLRQLQ8/
HVSHFLDOO\FRQVLGHULQJWKDWGDWDFDUGXVHUVRIWHQVHQGRUUHFHLYHVRPHWKLQJLQ
EDFNJURXQGGXHWRQRUPDOZD\RIZRUNLQJRIVHYHUDO3&DSSOLFDWLRQV6DPH
EHKDYLRXULVH[SHFWHGIRUQHZJHQHUDWLRQ,SKRQHV,QFDVHRI5DWOHDVW
WKH&(VIRUD.ESV&(VFDQEHUHOHDVHG,QFDVHRI(8/WKHDPRXQWRI
+:HTXDOWRHXO0LQ+Z6FK5DWH&(VE\GHIDXOWRULQFDVHRIRSWLRQDO
&(VODGGHUFDQEHUHOHDVHG)RUWKLVUHDVRQLQDQHWZRUNZKHUHWKH8/+:
UHVRXUFHVDUHDPDMRUFRQFHUQWKHSRVVLELOLW\WRUHGXFHLWGRZQWRVHFRQG
FRXOGEHFRQVLGHUHG,IWKH+65$%LVHQDEOHGWKHQWKHLPSDFWRI
UHGXFLQJWKHSDUDPHWHUYDOXHRQ&(VXVDJHLVORZHU

7KH)$&+FKDQQHOLVGLPHQVLRQHGIRUDUDWHRINESVSHUFHOOEDVHGRQWKH
DYHUDJHIRUWKHSHUFHQWLOHRIWKHKHDYLHVWORDGHGFHOOV1RUPDOO\WKHWUDIILF
YROXPHVRQ)$&+DUHIDUIURPWKHGLPHQVLRQHGOHYHOV1HYHUWKHOHVVLWQHHGV
WRPHPRQLWRUHGZLWKSP'O7UDIILF9ROXPH3V&RPPRQHVSHFLDOO\LQFDVHRI
ORZKVGVFK,QDFWLYLW\7LPHUYDOXHV$GUDZEDFNZLWKKLJK)$&+ORDGLV'/
ZKVGVFK,QDFWLYLW\7LPHU U
SRZHUFRQVXPSWLRQ7KH)$&+FKDQQHOLVQRWSRZHUUHJXODWHGDQGFRXOGXVH
DORWRIGRZQOLQNSRZHUFRQVLGHULQJWKHOLPLWHGGRZQOLQNUDWH

2QWKHEDVLVRIILHOGUHVXOWVZKHUHWKHPHQWLRQHGDVSHFWVKDYHEHHQ
HYDOXDWHGDSDUDPHWHUYDOXHRIVHFVHHPVWREHDWRRKLJKYDOXHRU
VHFLVPRUHDSSURSULDWH2QHVHFRQGLVVXJJHVWHGLI8/&(VLVDPDMRU
FRQFHUQ

 LQDFWLYLW\7LPHU

7KHLQDFWLYLW\7LPHUGHWHUPLQHVWKHWLPHZLWKRXWGDWDWUDQVPLVVLRQDIWHU
ZKLFKD8(LQVWDWH)$&+LVVZLWFKHGGRZQWRVWDWH,GOH

$KLJKWLPHUYDOXHOHDGVWRDUHGXFWLRQLQWKHFKDQQHOVZLWFKLQJDFWLYLW\DQGD
TXLFNHUDFFHVVWLPH7KH8(GRHVQRWQHHGWRH[SHULHQFHRIWHQXQQHFHVVDU\
GRZQVZLWFKHVWR,GOH,QOHVVORDGHGFHOOVWKLVVKRXOGLPSURYHXVHU
H[SHULHQFHZLWKRXWDIIHFWLQJ)$&+(UODQJWRDJUHDWH[WHQW
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


$QLQFUHDVHGLQDFWLYLW\7LPHUYDOXHIURPVHFWRVHFW\SLFDOO\UHGXFHV
WKHSP&K6ZLWFK)DFK,GOHDQGSP7RW1R5UF&RQQHFW5HT3VWRLHERWK
VLJQDOLQJDQGDFFHVVWLPHDUHUHGXFHG7KHGLIIHUHQFHFDQDOVREHFDSWXUHG
E\51&7UDIILF3V'DWD51&B(5/B36WDNLQJRQO\WKH8H5FIRU)$&+LQWR
DFFRXQW

$VDQLQFUHDVHGYDOXHLQDFWLYLW\7LPHULVVWULFWO\FRUUHODWHGWR)$&+(UODQJ
WKHNESVGLPHQVLRQLQJUDWHVKRXOGEHFRQVLGHUHGLQKHDYLO\ORDGHGFHOOV

$SDUDPHWHUYDOXHRIVHFLVGHILQLWHO\DWRRORZYDOXHVHFRUHYHQ
VHFLVZRUWKFRQVLGHULQJ

 $GGLWLRQDOSDUDPHWHUV

 GRZQ6ZLWFK7KUHVKROGDQGGRZQ6ZLWFK7LPHU7KUHVKROG

KVGDFK,QDFWLYLW\7LPHUVWDUWVLIERWK8/DQG'/WKURXJKSXWHTXDORUIDOO
EHORZGRZQ6ZLWFK7KUHVKROGDQGVWRSVLIERWK8/DQG'/WKURXJKSXW
H[FHHGGRZQ6ZLWFK7LPHU7KUHVKROG

GRZQ6ZLWFK7KUHVKROGRINESVDQGGRZQ6ZLWFK7LPHU7KUHVKROGRI
NESVFRPELQHGZLWKKVGVFK,QDFWLYLW\7LPHURIVHFUHVXOWVLQWKDWWKH8(
VWD\VLQFRQQHFWHG'&+VWDWHPRVWRIWKHWLPHHYHQZKHQQRWDFWLYHO\
GRZQORDGLQJ7KLVZLOOFRVWXQQHFHVVDU\KDUGZDUHUHVRXUFHVDQGEORFNRWKHU
XVHUVIURPXVLQJ+6'3$VHUYLFHV7KLVVHWXSLVRSWLPL]HGIRUVKRUWHUODWHQF\
DQGLVRIWHQQRWWKHZDQWHGEHKDYLRXU,QVWHDGDGLIIHUHQWVHWRISDUDPHWHU
YDOXHVVKRXOGEHFRQVLGHUHGZKHQRSWLPL]LQJIRUFDSDFLW\)RULQVWDQFH
GRZQ6ZLWFK7KUHVKROGRINESVDQGGRZQ6ZLWFK7LPHU7KUHVKROGRI
NESVFRXOGEHFRQVLGHUHG7KLVZLOOUHVXOWLQWKDWWKH8(VWD\VLQ)$&+
VWDWHPRVWRIWKHWLPHZKHQWKHUHLVRQO\EDFNJURXQGWUDIILFVHQWDQGUHFHLYHG
WRIURPWKHFRPSXWHU

1RWHWKDWFKDQJLQJWKHSDUDPHWHUVIURPGHIDXOWZLOOUHVXOWLQZRUVHVPDOO
3,1*SHUIRUPDQFHVLQFHVPDOO3,1*VGRQRWDGGXSHQRXJKWUDIILFWRPRYH
WKH8(WRFRQQHFWHG'&+VWDWH,QVWHDGWKHVPDOO3,1*VZLOOEHVHQWIURP
)$&+ZLWKUHVXOWLQJORQJHU3,1*WLPHV

)LQDOO\LWVKRXOGEHVWUHVVHGWKDWLQFHUWDLQ3UHOHDVHGURSVHJ3
DQG3WKHFKDQJHRISDUDPHWHUVIURPWKHGHIDXOWGRHVQRWOHDGWRDQ\
SHUIRUPDQFHFKDQJHGXHWRDNQRZQSUREOHP)RUIXUWKHULQIRUPDWLRQSOHDVH
FKHFN:51DH

 GO5OF%XI8SVZLWFKXO5OF%XI8SVZLWFK

7KHVHSDUDPHWHUVDUHWKH'/8/WKUHVKROGIRUFKDQQHOVZLWFKLQJIURP)$&+
WRGHGLFDWHGFKDQQHOIRUDVLQJOH5$%
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


7KUHVKROGYDOXHVRI%VHHPWREHKLJKHQRXJKWRNHHSPRVWVSXULRXV
WUDIILFRQ)$&+'HFUHDVLQJWKHYDOXHVKDVDWRRELJLPSDFWRQWKHUHVRXUFH
XVDJHDQGQXPEHURIVZLWFKHVPHDVXUHGE\SP&K6ZLWFK)DFK'FKDQG
SP&K6ZLWFK'FK)DFK6LPLODULPSDFWLVDOVRPHDVXUDEOHZLWK51&7UDIILF
3V'DWD51&B(5/B36LIRQO\WKH365%LVFRQVLGHUHGDVWKH
FRQQHFWLRQLVVRVKRUWWKDWQRXSVZLWFKLVSRVVLEOH%\UHGXFLQJWKHWKUHVKROG
YDOXHVWRIRULQVWDQFH%LWLVSRVVLEOHWRHYDOXDWHWKHLPSRUWDQFHRIWKH
DPRXQWRIWUDIILFWUDQVPLWWHGRQ)$&+

7KHGHIDXOWVHHPVDJRRGVHWWLQJHYHQLILWVVWLOOQRWFOHDUZK\WKHVHWWLQJIRU
8/DQG'/DUHQRWHTXDO

 GO7KURXJKSXW'RZQVZLWFK7LPHUXO7KURXJKSXW'RZQVZLWFK7LPHU

7LPHGXULQJZKLFKWKH'/8/WKURXJKSXWPXVWEHORZHUWKDQWKDWVSHFLILHGE\
GO'RZQVZLWFK%DQGZLGWK0DUJLQXO'RZQVZLWFK%DQGZLGWK0DUJLQEHIRUHD
GRZQVZLWFKUHTXHVWLVLVVXHG

 'RZQOLQNSRZHUDOORFDWLRQ

 *HQHUDO

'RZQOLQNSRZHUVHWWLQJVDUHTXLWHLPSRUWDQWZKHUH+63$LVGHSOR\HGRQD
VLQJOHFDUULHUQHWZRUNRUZKHUH+63$LVGHSOR\HGRQVHFRQGFDUULHUDQG5
WUDIILFLVKLJK&KDQJLQJSRZHUDOORFDWLRQVHWWLQJVFDQKDYHDGLUHFWLPSDFWRQ
ERWK5DQG+6SHUIRUPDQFH$QRSWLPXPEDODQFHEHWZHHQFRYHUDJHDQG
FDSDFLW\VKRXOGEHDPDLQJRDOIRU5)URPWKH+6'3$SHUVSHFWLYHLWLV
LPSRUWDQWWRKDYHVXIILFLHQW3&3,&+FRYHUDJHWRHQVXUHUHTXLUHG&4,
PHDVXUHPHQWV,QDGGLWLRQ+6'3$UHTXLUHVVXIILFLHQWSRZHUWRPDLQWDLQKLJK
WKURXJKSXWYDOXHV

 0DLQ3DUDPHWHUV

 3ULPDU\&SLFK3RZHU

7KH3&3,&+SRZHULVVHWE\WKHSDUDPHWHU3ULPDU\&SLFK3RZHU7KH
SRZHUOHYHORIDOORWKHU5GRZQOLQNFRPPRQFKDQQHOVLVH[SUHVVHGDVDQ
RIIVHWUHODWLYHWRLW

3ULPDU\&SLFK3RZHUWXQLQJUHODWHGDFWLYLWLHVVKRXOGEHFRQVLGHUHGLQ
FRQMXQFWLRQZLWKRWKHU13,PRGXOHVVXFKDV&DSDFLW\2SWLPL]DWLRQ>@RU
7UDIILF0DQDJHPHQW>@,IIRUH[DPSOHWKHSULPDU\&SLFK3RZHULV
LQFUHDVHGWKHQWKHFRYHUDJHDUHDRIWKHFHOOVLVLQFUHDVHGZKLFKDOVRLPSOLHV
DSRVVLEOHLQFUHDVHRIWKH5WUDIILFFDUULHGE\WKHFHOOV+RZHYHUWKHRYHUDOO
DPRXQWRIXQXVHGSRZHUDYDLODEOHIRU+6'3$ZLOOEHUHGXFHGDQGWKH
DYHUDJHLQWHUIHUHQFHOHYHOIURP5PLJKWLQFUHDVHDQGKHQFHWKH+6
WKURXJKSXWFRXOGVXIIHU
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


)URPWKHSHUVSHFWLYHRILPSURYLQJ+6'3$WKURXJKSXWORZHULQJWKH
SULPDU\&SLFK3RZHUFDQIUHHXSSRZHU

+RZHYHUWKHKLJKXWLOLVDWLRQRIWKH'/FDUULHUEURXJKWDERXWE\+6'3$
WUDQVPLVVLRQPXVWEHFRQVLGHUHG(YHQWKRXJKWKH+6'3$WUDIILFLVEHVW
HIIRUWLWFRXOGVWLOOLQIOXHQFHDQGGHJUDGHWKH5)FRQGLWLRQVIRU5WUDIILF)RU
H[DPSOHDVVXPLQJDZDWWSRZHUDPSOLILHULISULPDU\&SLFK3RZHU DQG
PD[LPXP7UDQVPLVVLRQ3RZHU DQG+6'3$LVWUDQVPLWWLQJDWIXOOSRZHU
WKHQPD[LPXP(F1RYDOXHLQWKHFHOOZLOOEH G%7KH(F1R
YDOXHDWFHOOERUGHUZRXOGPRVWOLNHO\EHZRUVHGXHWRSRWHQWLDOLQWHUFHOO
LQWHUIHUHQFH(F1ROLNHWKLVFDQWULJJHUHQWU\RI5WUDIILFWRFRPSUHVVHG
PRGHLI(F1RWULJJHUVDUHHQDEOHGDQGIROORZRQZLWK*60+2RU,)+2
7KHSDUDPHWHUVFRQWUROOLQJHQWU\LQWRFRPSUHVVHGPRGH,)+2DQG*60+2
VXFKDVXVHG)UHT7KUHVKG5VFSXVHG)UHT7KUHVKG(F1R
XVHG)UHT5HO7KUHVKBE(F1RHWFFDQEHFRQVLGHUHGIRURSWLPL]DWLRQDV
ZHOOLIKLJK+6XWLOLVDWLRQLVFDXVLQJ5)SHUIRUPDQFHGHJUDGDWLRQV

,QVFHQDULRVZKHUH+6'3$DQG5WUDIILFDUHPL[HGWKH
SULPDU\&SLFK3RZHUVKRXOGEHKLJKHQRXJKWRJXDUDQWHHWKDWWKHPD[LPXP
(F1RYDOXHLQWKHFHOOLVZHOODERYHHJG%WKHWKUHVKROGVIRUEDG
FRQQHFWLRQTXDOLW\PRQLWRULQJDQG,)+2*60+2LQRUGHUWRPLQLPL]HWKH
LPSDFWRI+6'3$WUDQVPLVVLRQRQ5WUDIILF

2QWKHFRQWUDU\ZKHQ+6'3$LVGHSOR\HGRQDVHSDUDWHGFDUULHUWKHIRFXV
FDQEHRQWKHRSWLPDOSULPDU\&SLFK3RZHUWKDWRSWLPL]HVWKH+6'3$
WKURXJKSXW


 KV3RZHU0DUJLQ

7KHPDLQSXUSRVHRIWKLVSDUDPHWHULVWRSURYLGHKHDGURRPLQWKHWRWDOFDUULHU
SRZHUZKHQWKHVFKHGXOHULVDOORFDWLQJWKHUHPDLQLQJSRZHUWR+6'3$

,QJHQHUDOZKHQWKHKV3RZHU0DUJLQLVGHFUHDVHGWKH+6'3$WKURXJKSXW
LQFUHDVHVDVPRUHSRZHULVDYDLODEOHIRU+6'3$

,IWKHKV3RZHU0DUJLQSDUDPHWHULVVHWWRRORZWKHQWKHUHLVDSRVVLELOLW\RI
SRZHULQVWDELOLW\RUFHOOEUHDWKLQJSUREOHPV)RUQHWZRUNVLQZKLFK+6'3$LV
GHSOR\HGRQWKHVDPHFDUULHUDV5VXFKDVRQHFDUULHUVROXWLRQLWLV
UHFRPPHQGHGWRNHHSWKHKV3RZHU0DUJLQVHWWLQJWRGHIDXOWYDOXH

,I+6'3$LVGHSOR\HGRQDVHSDUDWHFDUULHUWZRFDUULHUVROXWLRQWKH

KV3RZHU0DUJLQVHWWLQJFDQEHUHGXFHGIURPWKHGHIDXOWRQH

+RZHYHULQJHQHUDOWKHGHIDXOWVHWWLQJIRUKV3RZHU0DUJLQFDQEHXVHGDQG
HQVXUHVJRRGSHUIRUPDQFH

5SRZHUXVDJHVKRXOGEHPRQLWRUHGFORVHO\ZKHQPRGLI\LQJWKLVSDUDPHWHU
DVDQ\FKDQJHLQ+6SRZHUWUDQVPLWWHGFDQDIIHFWWKHRYHUDOODPRXQWRI
LQWHUIHUHQFHLQWKHFHOODQGKHQFHUHTXLUHGDPRXQWRISRZHUQHHGHGIRU5
WUDIILF
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


 KV6FFK0D[&RGH3RZHUKV6FFK0LQ&RGH3RZHUTXDOLW\&KHFN3RZHU

7KHVHSDUDPHWHUVFDQEHVHWE\FRQVLGHULQJWKHWUDGHRIIEHWZHHQOHDYLQJ
PRUHSRZHUDYDLODEOHWR+6'6&+DQGPDNLQJ+66&&+UREXVWHQRXJKWR
EHDEOHWRJXDUDQWHHDKLJKVXFFHVVUDWHRIGHFRGLQJWKLVFKDQQHOEULQJLQJ
LQIRUPDWLRQWRWKH8(DERXWKRZWRGHFRGHWKH+6'6&+GDWDDQGFHUWDLQ
+$54LQIRUPDWLRQVHHDOVR6HFWLRQ

 PD[8VHU(+LFK(5JFK3RZHU'ODQGPD[($JFK3RZHU'O

7KHVHSDUDPHWHUVVHWWKHPD[LPXPGRZQOLQNSRZHUIRUDQLQGLYLGXDO(
+,&+(5*&+DQG$*&+LQWKHFHOO,QRUGHUWRLPSURYHWKHUHFHSWLRQRI(
$*&+(+,&+(5*&+LQDUHDVZLWKSRRUFRYHUDJHWKHSRZHUOHYHOVDW
ZKLFKWKH\DUHWUDQVPLWWHGVKRXOGEHLQFUHDVHG7KHLQFUHDVHVKRXOGOHDGWR
DPLQRUEXWDFFHSWDEOHLQFUHDVHLQ'/SRZHUFRQVXPSWLRQ

7KHPRVWDIIHFWLQJSDUDPHWHUFKDQJHUHJDUGVWKHSRZHUIRU+,&+EHFDXVH
WKLVFKDQQHOKDVDQKLJKHUDFWLYLW\IDFWRUDOZD\VRQDLUZKHQGDWDVHQWLQ8/
FRPSDUHGWRWKHDFWLYLW\IDFWRURI$*&+DQG5*&+ZKHUHLQIRUPDWLRQLVVHQW
RQO\ZKHQLWFKDQJHV)RUWKLVUHDVRQDQLQFUHDVHLQ
PD[8VHU(+LFK(5JFK3RZHU'OKDVDJUHDWHULPSDFWRQLQWHUIHUHQFHLQ'/
DQGDOVRRQSRZHUDYDLODEOHIRU+6'3$VRWKDWUHGXFLQJWKH+6'3$
SHUIRUPDQFHV2QWKHFRQWUDU\DYDOXHWRRORZPLJKWOHDGWRDKLJK
SHUFHQWDJHRI8/UHWUDQVPLVVLRQVZKLFKZLOODIIHFWQRWRQO\8/EXWDOVR'/
SHUIRUPDQFHV

 0&3$3RZHU,QFUHDVH

,QFUHDVLQJWKH0XOWL&DUULHU3RZHU$PSOLILHU0&3$LVDPHDQWRLPSURYH

+6'3$WKURXJKSXW7KHEHQHILWLVH[SHFWHGWREHKLJKHULQDQRLVHOLPLWHG
VFHQDULRHJGHHSLQGRRUFRYHUDJHIURPRXWGRRUVLWHVRUUXUDOVFHQDULRV
WKDQLQDQLQWHUIHUHQFHOLPLWHGVFHQDULR

$VIRUWKHLQWHUDFWLRQEHWZHHQ+6'3$DQG5LQFUHDVLQJWKH0&3$ZLOOQRW
LPSURYHWKH5SHUIRUPDQFHGXHWRZRUVHQLQJRI&3,&+(F1RXQOHVV
RWKHUSDUDPHWHUVDUHFKDQJHGDVZHOO7KHVHFKDQJHVLQFOXGHWKH3&3,&+
SRZHUYDOXHV&RPSUHVVHG0RGH,)+2WKUHVKROGVRUKV3RZHU0DUJLQ

 &DSDFLW\PDQDJHPHQW

 *HQHUDO

+63$GRFRQVXPHUDGLRUHVRXUFHV7KHUHIRUHLWLVLPSRUWDQWWRILQGVXLWDEOH
VHWWLQJVWKDWRSWLPL]HWKHXVDJHRIWKHUDGLRUHVRXUFHIRU+67KLVLV
HVSHFLDOO\WUXHZKHQ+6WUDIILFLVPL[HGZLWK5WUDIILFDQGWKHWUDIILFLV
PHGLXPKLJK
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


7KH'/WUDQVPLWWHGFDUULHUSRZHUGRHVQRWUHTXLUHDQDFWXDORSWLPL]DWLRQDV
WKH5%6VFKHGXOHUHQVXUHVWKDW+6FDQXWLOL]HDOPRVWDOOWKHUHPDLQLQJSRZHU
IURPWKH5WUDIILF

7KH8/KDUGZDUHKDVWREHFDUHIXOO\FRQVLGHUHGVLQFHHDFKUDGLROLQNVHW
FDUU\LQJ$'&+LQ8/PD\FRQVXPHRUFKDQQHOHOHPHQWV&(
GHSHQGLQJRQZKHWKHUNESV$'&+RUNESV$'&+DUHXVHGRUDW
OHDVW&(VUHVHUYHGLQFDVHRI(8/ZLWKRSWLRQDO&(VODGGHU,QFDVHWKH
+65$%LVHQDEOHGWKHQRQO\&(VLQ8/ZLOOEHFRQVXPHG

7KH'/KDUGZDUHGRHVQRWQHHGWREHRSWLPL]HGVLQFHDOOWKHUHVRXUFHV
QHHGHGIRU+6'3$WUDIILFDUHVWDWLFDOO\UHVHUYHGLQWKH+67[ERDUGV

7KH'/FKDQQHOL]DWLRQFRGHVDUHLPSRUWDQWLQFDVHWKH'\QDPLF&RGH
$OORFDWLRQIHDWXUHLVWXUQHGRIIDQGRUWKHQXPEHURI6)FRGHVUHVHUYHGIRU
+6QXP+V3GVFK&RGHVLVKLJKVHHDOVR

 0DLQSDUDPHWHUV

 XO+Z$GP

7KH(ULFVVRQUHFRPPHQGHGYDOXHVIRUWKH8/KDUGZDUH+:DGPLVVLRQ
SROLF\DUHXO+Z$GP 7KLVVHWWLQJDFWXDOO\GLVDEOHWKH8/+:DGPLVVLRQ
SROLF\7KHPDLQGRZQVLGHRIWKLVLVWKDWLQFDVHRI8/+:VKRUWDJHWKH
RSHUDWRUKDVQRPHDQVWRFRQWUROWKHSULRULW\KDQGOLQJIRUGLIIHUHQWW\SHVRI
FRQQHFWLRQV)RUH[DPSOHDJXDUDQWHHGVSHHFKFRQQHFWLRQPD\EHDIIHFWHG
LQWKHVDPHZD\DVDQRQJXDUDQWHHG36LQWHUDFWLYHFRQQHFWLRQERWKRYHU
5DQG+6

$QRWKHUGUDZEDFNLVWKDWWKHIDLOXUHVGXHWR8/+:VKRUWDJHZLOOQRWEH
UHJLVWHUHGE\$GPLVVLRQ&RQWUROUHODWHGFRXQWHUVHJSP1R5HT'HQLHG$GP
EXWWKH\ZLOOUHIOHFWHGLQWKHJHQHUDODFFHVVLELOLW\.3,VDQGDOVRUHJLVWHUHGLQ
SP1R)DLOHG$IWHU$GP

6WDUWLQJIURP3UHOHDVH8/+:DGPLVVLRQSROLF\DFWLYDWLRQLVEHQHILFLDOWR
SULRULWL]HDGPLVVLRQRIKLJKHUSULRULW\XVHUVHJJXDUDQWHHGLQFDVHRIODFNRI
&(V0RUHRYHUWKHHQKDQFHGVRIWFRQJHVWLRQRSHQVXSQHZRSSRUWXQLWLHVIRU
WKHRSWLPL]DWLRQRIWKHFRUUHVSRQGLQJ$GPLVVLRQ3ROLFLHVWKUHVKROGV

5HVXOWVIURPWKHILHOGLQGLFDWHWKDWZKHQWKH8/+:SROLF\LVDFWLYDWHGHYHQ
LIWKHQXPEHURIEORFNHG36LQWHUDFWLYHFDOOVRQ5RU+6LQFUHDVHVWKH
JHQHUDODFFHVVLELOLW\.3,VDUHKLJKHUGXHWRWKHHQKDQFHGVRIWFRQJHVWLRQ
PHFKDQLVP,QDGGLWLRQWKHDFFHVVLELOLW\RIJXDUDQWHHGFRQQHFWLRQVVKRZV
VLJQLILFDQWLPSURYHPHQWVGXULQJFRQJHVWHGSHULRGVGXHWRWKHHIIHFWLYHFRQWURO
EURXJKWDERXWE\WKH8/+:DGPLVVLRQSROLF\DQGHQKDQFHGVRIWFRQJHVWLRQ
PHFKDQLVP
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


,Q38O+Z$GP DQGEH0DUJLQ8O+Z KDYHEHHQWHVWHGRQILHOGDQG
SURYHQDVVXLWDEOHVHWWLQJV,Q3EHVWHIIRUWPDUJLQVKDYHEHHQUHPRYHGVR
XO+Z$GPYDOXHVORZHUWKDQFDQEHFRQVLGHUHG,QFDVHRIKLJKHU
XO+Z$GPHJWKHH[SHFWHGEHQHILWIURPWKHKLJKHUWKUHVKROGOHYHO
PLJKWEHVRPHKRZMHRSDUGL]HGE\WKHKLJKHUEORFNLQJUDWHVIRUKDQGRYHU
UHTXHVW

7KH8/$'&+DVVRFLDWHGWR+6FDQXVHWKHNESVRUWKHNESVUDWHV

6LQFHWKHNESVUDGLREHDUHUFRQVXPHVDORWRIUDGLRUHVRXUFHVLH
&(RUa$6(LWLVSRVVLEOHWROLPLWWKHPD[LPXPQXPEHURINEVUDGLR
OLQNVE\PHDQVRIWKHSDUDPHWHUVI$GP8O

VI$GP8O RULVRIWHQXVHGLQRUGHUWROLPLWWKHLPSDFWRIWKLVW\SHRI
FRQQHFWLRQ7KHKDUGOLPLWKDVWKHIROORZLQJLPSDFWVRQ+6SHUIRUPDQFH

 8SORDGSHUIRUPDQFH

 'RZQORDGSHUIRUPDQFHZKHQKLJK'/ELWUDWHVZRXOGEHSRVVLEOHHJ
FRGHVWHUPLQDOV

 'RZQORDGSHUIRUPDQFHLQFDVHRI((SUREOHPV

,QFDVHWKH8/+:LVWKHPDLQFRQFHUQLWLVEHWWHUWRHQDEOHKLJKXVDJHRI8/
5%ZKHQHQRXJK8/&(VDUHDYDLODEOHDQGWRUHO\RQDGPLVVLRQFRQWURO
SROLF\DQGHQKDQFHGVRIWFRQJHVWLRQWRSURPRWHWKHXWLOL]DWLRQRINESV
UDGLREHDUHUGXULQJFRQJHVWLRQSHULRGV7KLVFDQEHDFKLHYHGE\HQDEOLQJWKH
FRUUHVSRQGLQJSROLFLHVE\VHWWLQJ8O+Z$GPHTXDORUORZHUWKDQDQGE\
VHWWLQJVI8O$GP RUHYHQ

5HVXOWVIURPWKHILHOGKDYHVKRZQWKDWUHPRYDORIOLPLWIRU8/6)
VI8O$GP LPSURYHVDYDLODELOLW\RIKLJKHU8/ELWUDWHVZKLFKLVEHQHILFLDO
IRU+6SHUIRUPDQFHZLWKRXWDQ\LPSDFWRQEDVLFDFFHVVLELOLW\UHWDLQDELOLW\
.3,V

$FWLYHWHVWVKDYHVKRZQWKURXJKSXWJDLQRIZKHQXVLQJNESV5%LQ
8/UDWKHUWKDQNESVGXULQJ+6'3$GRZQORDGVLQQRUPDOFRQGLWLRQV7KH
JDLQLQFDVHRI((SUREOHPVLVPXFKKLJKHUWKDQWKLV

,WVKRXOGEHQRWHGWKDWLQRUGHUWRH[SORLWWKHEHQHILWVRQWKHUHPRYDORIOLPLW
IRU8/6)WKH8/$6(DGPLVVLRQSROLF\VKRXOGEHGLVDEOHGE\VHWWLQJ
DVH8O$GP DQGDVH8O$GP2IIVHW UHFRPPHQGHGYDOXHV

,QRUGHUWRUHGXFHDFFHVVLELOLW\SUREOHPVGXHWR8/+:LWFRXOGDOVREH
FRQVLGHUHGWKHXVHRI+65$%DVWKHSUHIHUUHGLQLWLDOUDWHWRVHWXSWKH
FRQQHFWLRQVHH



7KLVLVDW\SLFDOVLWXDWLRQZKHUHWKHJDLQRIHQGXVHUSHUFHSWLRQFDQQRWEHIXOO\PRQLWRUHGE\PHDQVRIWKH5%6
WKURXJKSXW.3,VPHQWLRQHGLQWKLVGRFXPHQW
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


 GO&RGH$GPEH0DUJLQ'O&RGHDQGQXP+V3VGFK&RGHV

6LPLODUO\WRWKH8/+DUGZDUHDGPLVVLRQSROLF\WKH'/FRGHVDGPLVVLRQSROLF\
FDQEHRSWLPL]HGLQRUGHUWRSULRULWL]HDGPLVVLRQRIKLJKHUSULRULW\XVHUVHJ
JXDUDQWHHGLQFDVHRIODFNRIFKDQQHOL]DWLRQFRGHV6LQFHHQKDQFHGVRIW
FRQJHVWLRQLVSUHVHQWLWLVSRVVLEOHWRVHDUFKWKHPLQLPXPEH0DUJLQ'O&RGH
VRDVWRPD[LPL]HDFFHVVLELOLW\RI36LQWHUDFWLYHWUDIILFRQ+6ZLWKRXW
FRPSURPLVLQJWKHDFFHVVLELOLW\RIKLJKHUSULRULW\UHTXHVWV

$QRWKHULQWHUHVWLQJSRVVLELOLW\IRURSWLPL]DWLRQFRPHVIURPWKHLQWHUDFWLRQ
EHWZHHQGO&RGH$GPDQGQXP+V3GVFK&RGHV6LQFHWKHQXPEHURI6)
FRGHVUHVHUYHGIRU+6'6&+LVVXEWUDFWHGIURPWKHWRWDOSRROZKHQ
FDOFXODWLQJWKH'/FRGHXVDJHIRUDGPLVVLRQFRQWUROSXUSRVHVWKHUHDUHWZR
LQWHUHVWLQJLPSOLFDWLRQV

 $VLQJOH5XVHUFRQVXPHVDKLJKHUSHUFHQWDJHRIWKHSRROZKHQ
QXP+V3GVFK&RGHVLVKLJKHJ 

 $VVXPLQJDFHUWDLQFRGHXVDJHOHYHOWKHUHPDLQLQJDEVROXWHQXPEHU
RIFRGHVEHIRUHILOOLQJWKHSRROHQWLUHO\ZKLFKFDQEHXVHGIRU
KDQGRYHUSXUSRVHVLVKLJKHUZKHQQXP+V3GVFK&RGHVLVORZHJ


$VVXPLQJQRZWKDWWKHGHIDXOWVHWWLQJIRUGO&RGH$GPQXP+V3GVFK&RGHV
LVZRUNLQJZHOOZLWKUHVSHFWWRKDQGRYHUSHUIRUPDQFH7KHQLQFDVH
QXP+V3GVFK&RGHVLVGHFUHDVHGWRLWLVSRVVLEOHWRLQFUHDVHGO&RGH$GP
WRDQGH[SHULHQFHWKHVDPHKDQGRYHUSHUIRUPDQFH

)LQDOO\LWVKRXOGQRWEHIRUJRWWHQWKDWVLPLODULQWHUDFWLRQH[LVWVEHWZHHQ
EH0DUJLQ'O&RGHDQGQXP+V3GVFK&RGHV,QSDUWLFXODULIRQHWKLQNVLQ
WHUPVRIDEVROXWHQXPEHURIFRGHVZKHQQXP+V3GVFK&RGHVLVGHFUHDVHG
EH0DUJLQ'O&RGHVKRXOGEHGHFUHDVHGDVZHOO+RZHYHUVLQFHWKHXQLWRI
PHDVXUHPHQWRIEH0DUJLQ'O&RGHLVLWLVPRUHGLIILFXOWWRSOD\ZLWKWKLV
SDUDPHWHU

7KHVHWWLQJRI1XP+V3GVFK&RGHVLVWKHQYHU\LPSRUWDQWLQWHUPRIFDSDFLW\
LVVXHV

,QQHWZRUNVZLWKRQO\RQHFDUULHUDQKLJKYDOXHZRXOGGUDPDWLFDOO\DIIHFW5
ZKLOHDYDOXHWRRORZZRXOGQRWJXDUDQWHHVXIILFLHQW+6'3$SHUIRUPDQFHVLQ
FDVHRIKLJK5WUDIILF

,QQHWZRUNVZLWKFDUULHUVLQJHQHUDORQHRIWKHPFDQEHPDLQO\GHGLFDWHGWR
+63$WUDIILFDQGWKHYDOXHRIVWDWLFDOO\DOORFDWHG'6&+FRGHVFDQEH
LQFUHDVHG5HVXOWVRQILHOGVKRZJRRGSHUIRUPDQFHVZKHQVHWWLQJWKLVYDOXH
HTXDOWRLQWKHVHFRQGFDUULHUPDLQO\GHGLFDWHGWR+63$
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


 5DWH6HOHFWLRQ3V,QWHUDFWLYH8O3UHI5DWH

7KH)OH[LEOH,QLWLDO5DWH6HOHFWLRQ)HDWXUHDOORZVRQDSHUFHOOEDVLVWRVHOHFW
WKHUDWHDWZKLFKWKHSDFNHWLQWHUDFWLYH5$%LVHVWDEOLVKHG+LJKLQLWLDOUDWHLV
EHQHILFLDOWRWKHHQGXVHUVLQFHLWZLOOWDNHVKRUWHUWLPHEHIRUHKHFDQUHDFKD
KLJKWKURXJKSXW2QWKHRWKHUKDQGLQDUHDVZKHUHFRYHUDJHIRUWKHKLJKHU
UDWHLVQRWSURYLGHGLWLVEHWWHUWRVHOHFWDORZHULQLWLDOUDWH0RUHRYHULWZLOO
UHTXLUHOHVVUHVRXUFHVLQWKHDGPLVVLRQFRQWURODOJRULWKPVRWKDWDKLJKHU
DFFHVVLELOLW\FDQEHDFKLHYHG

7KHVHOHFWLRQRIDSUHIHUUHGFKDQQHOW\SHLVDOORZHGZKHQWKHIHDWXUH
'\QDPLF36,QWHUDFWLYH%DFNJURXQG5$%(VWDEOLVKPHQWLVHQDEOHG7KH
SUHIHUUHGFKDQQHOW\SHLVVHOHFWHGWKURXJKWKH
5DWH6HOHFWLRQ3V,QWHUDFWLYHFKDQQHO7\SHSDUDPHWHUDQGFDQEHVHWWRHLWKHU
)$&+RU'&+,ILWLVVHWWR'&+WKH'&+UDWHLVFKRVHQDFFRUGLQJWRWKH
IHDWXUH)OH[LEOH,QLWLDO5DWH6HOHFWLRQLIWKHIHDWXUHLVHQDEOHG

7KHSUHIHUUHGUDWHFDQEHFKRVHQVHSDUDWHO\IRU8/DQG'/WKURXJK
SDUDPHWHUV5DWH6HOHFWLRQ3V,QWHUDFWLYHXO3UHI5DWHDQG
5DWH6HOHFWLRQ3V,QWHUDFWLYHGO3UHI5DWH

%\VHWWLQJ5DWH6HOHFWLRQ3V,QWHUDFWLYHXO3UHI5DWHHTXDOWRWKHV\VWHP
ZLOOILUVWO\WU\WRVHWXSWKH5$%RQ+6RU'&+7KLVZLOOGUDPDWLFDOO\
LPSURYHDFFHVVLELOLW\EHFDXVHIHZHUUHVRXUFHV&(FRGHV$6(DUH
UHTXHVWHGIRUNESVFRPSDUHGWRNESV$VDGUDZEDFNDQLQFUHDVHLQ
FKDQQHOXSVZLWFKLQJUDWHFDQEHREVHUYHGLQWKHQHWZRUN

 KVGVFK,QDFWLYLW\7LPHU

5HIHUWRVHFWLRQLQRUGHUWRXQGHUVWDQGWKHPDLQLPSDFWRQFDSDFLW\
LVVXHVUHODWHGWRWKLVSDUDPHWHUVHWWLQJ

 HXO6HUYLQJ&HOO8VHUV$GPDQGHXO6HUYLQJ&HOO8VHUV$GP77,

7KHVHFRXSOHRISDUDPHWHUVHWWKHPD[LPXPDOORZHGQXPEHURIPVRU
PV(XOXVHUV,IHXO6HUYLQJ&HOO8VHUV$GP7WLLVH[FHHGHGDWDQHZ5$%
HVWDEOLVKPHQWDWWHPSWRUDFKDQQHOVZLWFKDLPLQJIRUPV(8/WKHQDWU\WR
VHWXSWKHXVHURQPV(8/LQVWHDGLVSHUIRUPHGDQGDGPLVVLRQFRQWUROIRU
DPV(8/5$%DFFRUGLQJWRWKHVHUYLQJDQGQRQVHUYLQJ(8/DGPLVVLRQ
SROLF\ZLOOEHHYDOXDWHG

HXO6HUYLQJ&HOO8VHUV$GP77,FDQEHXVHGWROLPLWWKHQXPEHURIVHUYLQJ
UDGLROLQNIRU(8/PVXVHUVVRWKDWWKHZKROH(8/XVHUVFDQJHWDVXIILFLHQW
WKURXJKSXW,IWKHYDOXHRIWKLVSDUDPHWHULVJUHDWHUWKDQWKHYDOXHRI
HXO6HUYLQJ&HOO8VHUV$GPWKHQWKLVSDUDPHWHUZLOOKDYHQRHIIHFW


   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


 $GGLWLRQDOSDUDPHWHUV

 KVGSD8VHUV$GP

7KLVSDUDPHWHUFDQEHXVHGWRPD[LPL]H+6'3$DFFHVVLELOLW\HVSHFLDOO\LI
FKDQQHOVZLWFKLQJSDUDPHWHUVDUHVHWVRWKDWEDFNJURXQGWUDIILFIURPWKH3&
LVKROGLQJDORWRIXVHUVRQ+6VHH6HFWLRQ

,QSULQFLSOHKVGSD8VHUV$GPFRXOGEHVHWYHU\FORVHWRWKHPD[LPXP
QXPEHURIOLFHQVHG+6XVHUV+RZHYHULQWKDWFDVHLQFRPLQJFHOOFKDQJH
SHUIRUPDQFHPLJKWZRUVHQGXHWREORFNLQJRQOLFHQVH

 VFK0LQ3RZHU1RQ*EU+V8VHUV

6FK0LQ3RZHU1RQ*EU+V8VHUVZKLFKGHILQHVWKHPLQLPXPUHVHUYHGSRZHU
IRUWKHQRQJXDUDQWHHGVHUYLFHVXVLQJ+6'3$LQRUGHUWRKDYHDEHWWHU
VKDULQJRIWKH'/SRZHUEHWZHHQQRQJXDUDQWHHGVHUYLFHVRQ+6'3$DQG
QRQJXDUDQWHHGVHUYLFHVRQ536'&+

)RUWKHQRQ*%5VHUYLFHVWKHFRQJHVWLRQVLWXDWLRQLVGHILQHGDVWKHFDVH
ZKHQERWKIROORZLQJFRQGLWLRQVDUHPHW

7KHUDWLREHWZHHQWKHWRWDOWUDQVPLWWHG+6'6&+SRZHUPHDVXUHGGXULQJ
WKHSUHYLRXVPVIRUDOOQRQ*%5VHUYLFH34VUHJDUGOHVVRIVFKHGXOLQJ
SULRULW\FODVVDQGWKHPD[LPXPGRZQOLQNSRZHULVOHVVWKDQ
VFK0LQ3RZHU1RQ*EU+V8VHUV,QRWKHUZRUGVWKLVPHDQVWKDWDWOHDVWD
SHUFHQWDJHRISRZHUHTXDOWRVFK0LQ3RZHU1RQ*EU+V8VHUVLVUHVHUYHGIRU
QRQ*%5+6VHUYLFH

7KHDYHUDJHQXPEHUQRQ*%5VHUYLFH34VWKDWDUHQRWVFKHGXOHGHYHQ
WKRXJKSDVVLQJWKHTXHXHYDOLGDWLRQSURFHGXUHGXULQJWKHSUHYLRXVPVLV
HTXDOWRRUPRUHWKDQWKHSDUDPHWHUVFK&RQJ7KUHVK1RQ*EU

:KHQWKHFRQJHVWLRQVLWXDWLRQIRUWKHQRQ*%5VHUYLFHXVHUVLVGHWHFWHGWKH
+6'3$6FKHGXOHUZLOOUHSRUWWRWKH51&WKDWWKH+6UHTXLUHGSRZHULVMXVW
VFK0LQ3RZHU1RQ*EU+V8VHUVWKDWLVWKH5%6PHDVXUHPHQWVDUH
WUXQFDWHGDWWKLVYDOXH

%\GHIDXOWWKHFRQJHVWLRQVLWXDWLRQLVGHWHFWHGRQO\ZKHQWKHQXPEHURI34
QRWVHUYHGLV! VHFRQGEXOOHWVFK&RQJ7KUHVK1RQ*EU ZKLOH
VFK0LQ3RZHU1RQ*EU+V8VHUVGHIDXOWYDOXHLVHTXDOWR7KLVPHDQVWKDW+6
FRQJHVWLRQUHVROYLQJPHFKDQLVPLVGLVDEOHG7KLVLVWKHVLWXDWLRQRI3ZKHUH
QRPHFKDQLVPIRU+6FRQJHVWLRQRFFXUV9DOXHVKLJKHUWKDQPD\DIIHFW
5SHUIRUPDQFHV

,QDFHOOSUHGRPLQDQWO\FDUU\LQJ5WUDIILFRQHFDQPD[LPL]HFDSDFLW\
UHGXFHEORFNLQJE\LQFUHDVLQJWKHSZU$GP7RXWLOL]HWKHIXOO0&3$
FDSDELOLW\DQGUHO\RQWKH&RQJHVWLRQ&RQWUROPHFKDQLVPV
SZU$GPSZU2IIVHWFRXOGHTXDO7KLVZRXOGVWLOOWULJJHUWKHFRQJHVWLRQ
UHVROYHDFWLRQVSZU$GPFDQIRULQVWDQFHEHVHWWRZKLOHPDLQWDLQLQJ
SZU2IIVHWDW
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


7KHVHWWLQJDERYHFRXOGDOVREHFRPELQHGZLWKWKHVRIWSRZHUUHVHUYDWLRQIRU
+6'3$WUDIILFHJVFK0LQ3RZHU1RQ*EU+V8VHUV LQRUGHUWRDYRLG
ODFNRIUDGLRUHVRXUFHVIRU36VHUYLFHVFDUULHGRYHU+63$GXULQJ5WUDIILF
SHDNV

 $GGLWLRQDO+DUGZDUH

 8/&KDQQHO(OHPHQWV&(VLQFUHDVH

7KHOLFHQVHGDPRXQWRI8/&(VFDQLPSDFWRQ+683$DQG5
SHUIRUPDQFHV$&(VH[SDQVLRQVKRXOGEHFRQVLGHUHGLIDFFHVVLELOLW\
SUREOHPVDUHGXHWRODFNRI&(V*3(+,17(51$/B6<67(0B%/2&.HYHQW
FDQEHXVHGWRGHWHFWRULI8(JHWVORZ(8/WKURXJKSXWQHYHUH[FHHGLQJWKH
PD[LPXPYDOXHRIWKHWKURXJKSXWUDQJHPDSSHGWRDFHUWDLQ&(VYDOXH
ORZHUWKDQWKHPD[LPXPDFWLYHWHVWFDQEHXVHGWRGHWHFW

 7;GHSOR\PHQW

,I7;DUHPRVWO\GHSOR\HGLQWKHQHWZRUNDQG+6SHUIRUPDQFHLVVXHV
DULVHWKHQWKHXVDJHRI7;VKRXOGEHFRQVLGHUHG

7KURXJKDFWLYHWHVWLQJLWFDQEHGHWHFWHGLIFRGHVDUHHYHUDOORFDWHGWRWKH
8(LQJRRGFRYHUDJH,IQRWDQGPDQ\+6'3$XVHUVLQWKHDOOVHFWRUVRI
WKHVLWHVWKHQWKH\ZRXOGSUREDEO\KDYHWRVKDUHWKHFRGHVLQWKHVLWHDQG
WKH'&$ZLOOUHGLVWULEXWHWKHFRGHVDFFRUGLQJWRWKHQXPEHURI'6&+FRGHV
SHUXVHULQDFHOOWKHORZHUWKHPRUHSULRULW\WKHFHOOKDVWRJHWWKHFRGH

,QWKLVFDVHWKHGHSOR\PHQWRI7;ERDUGRU7;FDQKHOSWRVROYHWKH

SUREOHPVDOORZLQJIRU'6&+FRGHVSHU5%6

,WLVZRUWKWRUHPHPEHUWKDWLIWKHODFNRI'6&+FRGHVLVGXHWRKLJK5
WUDIILFWKHQ7;ERDUGFRXOGQRWVROYHWKHLVVXHDQGDVHFRQGFDUULHU
GHSOR\PHQWLVVXJJHVWHG


   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 




 .3,VDQGHYHQWVUHODWHGWRHDFKDUHDRIRSWLPL]DWLRQ
 *HQHUDO

,QWKLVVHFWLRQDOO.3,VDQGFRXQWHUVEHLQJPHQWLRQHGLQVHFWLRQDUHOLVWHG
SHUDUHDRIRSWLPL]DWLRQ2QO\WKH.3,VDQGFRXQWHUVQRWIXOO\GHVFULEHGLQ>@
DQG>@DUHH[SODLQHGKHUH5HIHUDOZD\VWR>@DQG>@IRUWKH.3,IXOO
GHVFULWSLRQIRUWKRVHWKDWDUHQRWGHWDLOHGKHUH+RZHYHUVRPHDUHDOVR
LQFOXGHGLQWKLVWHFKQLFDOJXLGHVLQFHWKH\DUHXVHGWRJHWKHUZLWK5%6
FRXQWHUVDQG*3(+EDVHG.3,VLQWKHSHUIRUPDQFHHYDOXDWLRQ

7KHSHUIRUPDQFHLQGLFDWRUVWREHXVHGGXULQJWKHVHUYLFHFDQEHGLYLGHG
DFFRUGLQJWRWKHDUHDVRIRSWLPL]DWLRQ

x %DVLF+63$SDUDPHWHUV

x +63$PRELOLW\DQGWUDIILFPDQDJHPHQW

x &KDQQHOVZLWFKLQJ

x 'RZQOLQNSRZHUDOORFDWLRQ

x &DSDFLW\PDQDJHPHQW

,WVKRXOGEHQRWHGWKDWWKHGHILQLWLRQRIWKH.3,VLQWKHIROORZLQJVHFWLRQVDUH
YDOLGIRUWKH3UHOHDVH

 %DVLF+63$SDUDPHWHUV

 .3,VDQG&RXQWHUV

)RUVWDWLVWLFDOUHVXOWVRQ0$&+6OHYHOWKHIROORZLQJ5%6FRXQWHUIRUPXODV
DUHDSSOLHG


'HVFULSWLRQ )RUPXOD
  SP1R$FWLYH6XE)UDPHV6SL;;0HDVXUHPHQWB
+6B7UDQVPLVVLRQB5DWLRB6SL;;  WLPH>V@
  SP1R$FWLYH6XE)UDPHV6SL;;
SP1R,QDFWLYH5HTXLUHG6XE)UDPHV6SL;;
+6B6FKHGXOLQJB5DWLRB6SL;;  0HDVXUHPHQWBWLPH>V@
SP6XP$FNHG%LWV6SL;; SP6XP1RQ(PSW\8VHU%
+6B8VHU7KB1HWB6SL;;  XIIHUV6SL;;
SP6XP7UDQVPLWWHG%LWV6SL;; SP6XP1RQ(PSW\
+6B8VHU7KB*URVVB6SL;;  8VHU%XIIHU6SL;;
 
0$&B+6B6FKHG7KB1HWB6SL;;  SP6XP$FNHG%LWV6SL;; SP1R$FWLYH6XE)UDPHV6
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


SL;;
SP6XP$FNHG%LWV6SL;; SP1R$FWLYH6XE)UDPHV6
0$&B+6B6FKHG7KB1HWB6SL;;  SL;;SP1R,QDFWLYH5HTXLUHG6XE)UDPH6SL;;
SP6XP7UDQVPLWWHG%LWV6SL;; SP1R$FWLYH6XE)UD
0$&B+6B6FKHG7KB*URVVB6SL;;  PHV6SL;;
SP6XP7UDQVPLWWHG%LWV6SL;; SP1R$FWLYH6XE)UD
0$&B+6B6FKHG7KB*URVVB6SL;;  PHV6SL;;SP1R,QDFWLYH5HTXLUHG6XE)UDPH6SL;;
SP6XP1RQ(PSW\8VHU%XIIHUV6SL;;
SP1R$FWLYH6XE)UDPHV6SL;;
$YHUDJHB8(VBLQB4XHXHB6SL;;  SP1R,QDFWLYH5HTXLUHG6XE)UDPHV6SL;;
+66&&+FRGHVKRUWDJH
1XPEHURIWLPHWKHVFKHGXOHUFDQQRWDFFHSW
QHZ+6XVHUEHFDXVHRI6&&+FRGHVVKRUWDJH SP5HPDLQLQJ5HVRXUFH&KHFN>@>@
+63'6&+FRGHVKRUWDJH
1XPEHURIWLPHWKHVFKHGXOHUFDQQRWDFFHSW
QHZ+6XVHUEHFDXVHRI3'6&+FRGHVVKRUWDJH SP5HPDLQLQJ5HVRXUFH&KHFN>@>@

+63'6&+SRZHUVKRUWDJH
1XPEHURIWLPHVWKHVFKHGXOHUFDQQRWDFFHSW
QHZ+6XVHUEHFDXVHRI3'6&+SRZHUVKRUWDJH SP5HPDLQLQJ5HVRXUFH&KHFN>@>@
$YJB+63'6&+B&RGHVB'\QDPLFB$OORFDWLRQ
$YHUDJH1XPEHURIDOORFDWHGFRGHVIRU SP6XP1XP+V3GVFK&RGHV$GGHGSP6DPSOH1XP+V3GV
+651&G\QDPLFFRGHDOORFDWLRQ FK&RGHV$GGHG
'\Q&RGHB$OORFDWLRQB5%6B+:BOLPLW SP5EV+V3GVFK&RGH3ULR
+66&&+B8VHUB3RZHU SP6XP2I+V6FFK8VHG3ZU>@>@
3')RIQXPEHURIXVHUVSHU77,IURPWR
 SP1R2I+V8VHUV3HU7WL>@>@
SP1R2I+V8VHUV3HU7WL>@ 
SP1R2I+V8VHUV3HU7WL>@ 
SP1R2I+V8VHUV3HU7WL>@ SP1R2I+V8VHUV3HU7WL>@
SP1R2I+V8VHUV3HU7WL>@SP1R2I+V8VHUV3HU7WL>@
$YHUDJH+6B6FKHGXOHGB8VHUVBSHUB77, SP1R2I+V8VHUV3HU7WL>@SP1R2I+V8VHUV3HU7WL>@
 
 SP5HPDLQLQJ5HVRXUFH&KHFN>@
+66&&+B&RGHB/LPLW SP1R$FWLYH6XE)UDPHV6SL;;
 SP5HPDLQLQJ5HVRXUFH&KHFN>@
+63'6&+FRGHOLPLW SP1R$FWLYH6XE)UDPHV6SL;;
 SP5HPDLQLQJ5HVRXUFH&KHFN>@
+63'6&+SRZHUOLPLW SP1R$FWLYH6XE)UDPHV6SL;;
 SP1DFN5HFHLYHGSP1DFN5HFHLYHGSP$FN5HFHLY
+6B0$&+6B%/(5 HG
7RWDOB'/B7UDQVPLWB3RZHUB1RQ+6 SP7UDQVPLWHG&DUULHU3RZHU1RQ+V
7RWDOB'/B7UDQVPLWB3RZHU SP7UDQVPLWWHG&DUULHU3RZHU>@>@
7RWDOB'/B7UDQVPLWB3RZHUB+6SGI SP7UDQVPLWHG&DUULHU3RZHU+V>@>@

.3,DUHFDOFXODWHGSHUHDFK6FKHGXOHG3ULRULW\,QGH[RQO\LQ3GHIDXOWLV63,
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


)RUVWDWLVWLFDOUHVXOWVRQ0$&HOHYHOWKHIROORZLQJ5%6FRXQWHUIRUPXODVDUH
DSSOLHG


(8/8875$)),&92/80(NELW SP6XP1DFNHG%LWV&HOO(XOSP6XP$FNHG%LWV&HOO(XO
(8/B$YJB8VHUB1(76&+('
7+370ESV SP6XP$FNHG%LWV&HOO(XOSP1R$FWLYHPV)UDPHV(XO

(8/$YJB8VHUB*52666&+(' SP6XP$FNHG%LWV&HOO(XOSP6XP1DFNHG%LWV&HOO(XOSP1R$FWLYH
7+370ESV PV)UDPHV(XO

(8/B$YJB8VHUB1(76&+(' SP6XP$FNHG%LWV&HOO(XOSP1R$FWLYHPV)UDPHV(XO

7+370ESV
 SP1R$FWLYHPV)UDPHV(XO

(8/$YJB8VHUB*52666&+(' SP6XP$FNHG%LWV&HOO(XOSP6XP1DFNHG%LWV&HOO(XOSP1R$FWLY
7+370ESV
 HPV)UDPHV(XO
SP1R$FWLYHPV)UDPHV(XO

SP1R$FWLYHPV)UDPHV(XOSP1R$FWLYHPV)UDPHV(XO
PV8VHUIUDFWLRQ
 SP1R$FWLYHPV)UDPHV(XO

SP6XP1DFNHG%LWV&HOO(XOSP6XP1DFNHG%LWV&HOO(XOSP6XP
(8/1$&.5$7(SHUFHQWDJH $FNHG%LWV&HOO(XO
5,6(29(512,6(SGI SP7RWDO5RW&RYHUDJH>@>@
2:188/2$'SGI SP2ZQ8X/RDG>@>@
12,6()/225SGI SP1RLVH)ORRU>@>@
('&+86(56SGI SP1R6FK(GFK(XO>@>@
727$/*5$17('885$7(SGI SP7RW5DWH*UDQWHG(XO>@>@
7,0(726&+('8/('
*5$17SGI
(8/'/&2002132:(5&216
(8/5(6&+88,17(5)/,0,7
SP1R$OORZHG(XO
(8/B,17B86(5B8/B7+528*+
SP:DLWLQJ7LPH(XO>@>@
SP&RPPRQ&K3RZHU(XO>@>@
SP1R8O8X/RDG/LPLW(XO
SP1R$OORZHG(XO
SP6XP(XOO5OF8VHU3DFNHW7KSSP6DPSOHV(XO5OF8VHU3DFNHW7KS
(8/BVFKHGXOHGB86(5SGI SP1R6FK(GFK(XO>@>@
8/B566,SGI SP1R$OORZHG(XO>@>@
8/B$9(B566, SP6XP8O5VVLSP6DPSOHV8O5VVL
(8/B8/B&(B8VDJH SP+Z&H3RRO(XO

  )RUPXODXVHGRQO\LQ3

7RREWDLQWKHGHWDLOVRIVFKHGXOLQJDOJRULWKPVWKHPRGHIURPWKH8(UHSRUWV
LQ7(06,QYHVWLJDWLRQVKDYHWREHXVHG

x +6'3$8/+6'3&&+LQIRUPDWLRQFRQWDLQLQJ8/LQIRUPDWLRQLQWHUPV
RI8(UHSRUWHG&4,DQG$&.1$&.'7;LQGLFDWRU77,VDUHUHSRUWHG
LQHDFK0RGH5HSRUW

x +6'3$+6'HFRGH6WDWXVFRQWDLQLQJ'/LQIRUPDWLRQRQ1HZ
7UDQVPLVVLRQ&5&UHVXOWDQG7%677,VDUHUHSRUWHGLQHDFK0RGH
5HSRUW7KHVWDUWLQJVXEIUDPHQXPEHURIWKH'/UHSRUWKDVDQRIIVHW
HTXDOWRFRPSDUHGWRWKH8/UHSRUW

x +683$('3&+/RJ3DFNHWFRQWDLQLQJ(8/LQIRUPDWLRQVRQKDSS\ELW
DQG(7)&,XVHGUHSRUWHGIURP8(WRWKH5%677,VRIPVDUH
UHSRUWHGLQHDFKPHVVDJH,IPV8VHUWKHQ77,VDUHUHSRUWHG

x +683$&RPELQHG/0$&/RJ3DFNHWFRQWDLQV(8/LQIRUPDWLRQIRU
$*&+DQG5*&+VHQWE\5%6WR8(V
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


x +683$/0$&6WDWLVWLFV/RJ3DFNHWJURXSVDOOWKHSUHYLRXVLQIRUPDWLRQ
SHUPV77,RIPV8VHUV

7KHIROORZLQJSGIFRXQWHUFDQEHXVHGWRPRQLWRU&4,UHSRUWLQJ

SP5HSRUWHG&TL

3RVVLEOHWUDQVSRUWQHWZRUNOLPLWDWLRQVWR+6'3$SHUIRUPDQFHSHUHDFK
6FKHGXOLQJ3ULRULW\LQGH[FDQEHPRQLWRUHGE\PHDQVRI

SP&DS$OORF,XE+6/LPLWLQJ5DWLR6SL;;

SP+V'DWD)UDPHV5HFHLYHG6SL;;DQGSP+V'DWD)UDPHV/RVW6SL;;

3RVVLEOHWUDQVSRUWQHWZRUNOLPLWDWLRQVWR(8/SHUIRUPDQFHFDQEHPRQLWRUHG
E\PHDQRI

SP(GFK,XE/LPLWLQJ5DWLR

DQGLQFDVHWKDWPRUHWKDQ(8/8(LVVLPXOWDQHRXVO\XSORDGLQJLWFDQEH
FRPELQHGZLWKWKHFRXQWHU

SP1R8O,XE/LPLW(XO

SURYLGLQJLQIRUPDWLRQDERXWUHGLVWULEXWLRQRIEDQGZLGWKELWUDWHEHWZHHQ(

'&+XVHUVLQDVLWXDWLRQZKHQRQHRUPRUHUHVRXUFHVDUHOLPLWLQJWKH
DOORFDWLRQRIKLJKHUUDWHVWRDQ('&+XVHULQDFHOO,WLVSHUIRUPHGE\D
GHFUHDVHLQUDWHIRURQH('&+XVHUWRDFFRPPRGDWHDQLQFUHDVHLQWKHUDWH
IRUDQRWKHU('&+XVHU

5&RGHXWLOL]DWLRQFDQEHPRQLWRUHGDVIROORZV

SP6XP'O&RGH

SP6DPSOH'O&RGH

 (YHQWV

7KHWKURXJKSXWRI36LQWHUDFWLYHGDWDXVHUVFDQEHPRQLWRUHGE\PHDQVRI
WKHIROORZLQJ*3(+HYHQW

,17(51$/B3$&.(7B'(',&$7('B7+528*+387
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


7KLVHQDEOHVWRIROORZWKHWKURXJKSXWRIVSHFLILFXVHUV7KLVLQIRUPDWLRQFDQ
EHDOVRFRUUHODWHGZLWKRWKHU*3(+HYHQWVLQRUGHUWRJHWWKHWKURXJKSXW
ZKLOHWKHXVHULVDVSHFLILF5$%VWDWHHJXVLQJ+6'3$

 +63$PRELOLW\DQGWUDIILFPDQDJHPHQW

 .3,VDQG&RXQWHUV

+6'DWD5HWUDQVPLVVLRQ5DWH+6B5(75$160B5$7(

+6'3$&HOO&KDQJH6XFFHVV5DWH+6B&&B68&&B5$7(

(8/&HOO&KDQJH6XFFHVV5DWH(8/B&&B68&&B5$7(

+6'3$WR'&+5HFRQILJXUDWLRQ6XFFHVV5DWH+6B'&+B68&&B5$7(

5$%'URS5DWH36,QWHUDFWLYH+6'5235$7(B36B+6

5$%'URS5DWH36,QWHUDFWLYH+6'5235$7(B36B(8/

0LQXWHVSHU'URS+6'DWD03'B36B+6

0LQXWHVSHU'URS(8/'DWD03'B36B(8/

,)+DUG+2+V6XFFHVV5DWH,)++2B68&&B+6

,)+DUG+2+V6XFFHVV5DWH,QFRPLQJ,)++2B68&&B+6B,1

,)+DUG+2+V6XFFHVV5DWH2XWJRLQJ,)++2B68&&B+6B287

,)+DUG+2+V)DLOXUH5DWH,QFRPLQJ,)++2B)$,/B+6B,1

,)+DUG+2+V)DLOXUH5DWH2XWJRLQJ,)++2B)$,/B+6B287

,)/6$FWLYLW\5DWH,)/6B$&7,9,7<

,)/6$FWLYLW\5DWH36,)/6B$&7,9,7<B36

,)/6$FWLYLW\5DWH&6,)/6B$&7,9,7<B&6

5$%(VWDEOLVKPHQW6XFFHVV5DWH36,QWHUDFWLYH'&+)$&+
36B121B+6B5$%68&&5$7(

 (YHQWV

7KHIROORZLQJ*3(+HYHQWVDUHXVHIXOWRPRQLWRUDQGRSWLPL]H+6PRELOLW\

 ,17(51$/B68&&(66)8/B+6'6&+B&(//B&+$1*(

 ,17(51$/B)$,/('B+6'6&+B&(//B&+$1*(
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


,17(51$/B68&&(66)8/B75$16,7,21B72B'&+

,17(51$/B)$,/('B75$16,7,21B72B'&+

,17(51$/B6<67(0B5(/($6(

 &KDQQHOVZLWFKLQJ

 .3,VDQGFRXQWHUV

51&7UDIILF+651&B(5/B+6

51&7UDIILF(8/51&B(5/B(8/

SP8SVZLWFK)DFK+V$WWHPSW

SP8SVZLWFK)DFK+V6XFFHVV

SP'O7UDIILF9ROXPH3V&RPPRQ

SP&K6ZLWFK)DFK,GOH

SP7RW1R5UF&RQQHFW5HT3V

51&7UDIILF3V'DWD51&B(5/B36

&KDQQHO8SVZLWFK)DLOXUH5DWH86:,7&+B)$,/5$7(B8/B(8/

 (YHQWV

7KHIROORZLQJ*3(+HYHQWVDUHXVHIXOWRPRQLWRUDQGRSWLPL]HFKDQQHO
VZLWFKLQJSHUIRUPDQFH

55&B55&B&211(&7,21B5(/($6(

55&B55&B&211(&7,21B5(48(67

,17(51$/B5$%B(67$%/,6+0(17

,17(51$/B&+$11(/B6:,7&+,1*

,17(51$/B&21*(67,21B&21752/B&+$11(/B6:,7&+B$1'B7(50,1$7(B5&

 'RZQOLQNSRZHUDOORFDWLRQ

 .3,6DQGFRXQWHUV

55&)DLOXUHV$GPLVVLRQ&6$'0&21752/B55&B'(1B&6

55&)DLOXUHV$GPLVVLRQ36$'0&21752/B55&B'(1B36
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


5$%(VWDEOLVKPHQW6XFFHVV5DWH36,QWHUDFWLYH+636B+6B
5$%68&&5$7(

5$%(VWDEOLVKPHQW6XFFHVV5DWH36,QWHUDFWLYH(8/
36B(8/B5$%68&&5$7(

5$%(VWDEOLVKPHQW6XFFHVV5DWH6SHHFK63((&+B5$%68&&5$7(

,)/6$FWLYLW\5DWH,)/6B$&7,9,7<

5$%'URS5DWH6SHHFK'5235$7(B63((&+

&HOO7UDIILF6SHHFK(5/B63((&+

&HOO7UDIILF36+6(5/B36B+6

&HOO7UDIILF36(8/(5/B36B(8/

3RZHU/LPLW)DLOXUH5(4'(1B'/32:(5

&RQJHVWLRQ7LPH8/8/B&21*B7,0(

&RQJHVWLRQ7LPH'/'/B&21*B7,0(

1XPEHURI&08VHUVSHU&HOO$9*B180B&211B&0

&6,5$7+2$FWLYLW\5DWH,5$7+2B$&7,9,7<B5$7(

SP7UDQVPLWWHG&DUULHU3RZHU1RQ+V

SP7UDQVPLWWHG&DUULHU3RZHU

SP7UDQVPLWWHG&DUULHU3RZHU+V

 (YHQWV

 ,17(51$/B67$57B&21*(67,21

 ,17(51$/B6723B&21*(67,21

 &DSDFLW\PDQDJHPHQW

 .3,6DQGFRXQWHUV

2YHUDOO$FFHVVLELOLW\6XFFHVV5DWH6SHHFK&665B63((&+

2YHUDOO$FFHVVLELOLW\6XFFHVV5DWH36,QWHUDFWLYH&665B36
   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


2YHUDOO$FFHVVLELOLW\6XFFHVV5DWH36,QWHUDFWLYH+6&665B36+6

2YHUDOO$FFHVVLELOLW\6XFFHVV5DWH36,QWHUDFWLYH(8/&665B36(8/

5$%'URS5DWH36,QWHUDFWLYH+6'5235$7(B36B+6

5$%'URS5DWH36,QWHUDFWLYH(8/'5235$7(B36B(8/

0LQXWHVSHU'URS+6'DWD03'B36B+6

0LQXWHVSHU'URS(8/'DWD03'B36B(8/

5$%'URS5DWH6SHHFK'5235$7(B63((&+

55&6HWXS$GPLVVLRQ&RQWURO)DLOXUHSP1R5UF'HQLHG$GP

5HTXHVWV'HQLHGGXHWR$GPLVVLRQIRU5$%6SHHFK
121+2B5(4'(1B63((&+

5HTXHVWV'HQLHGGXHWR$GPLVVLRQIRU5$%36,QWHUDFWLYH
121+2B5(4'(1B36

5HTXHVWV'HQLHGGXHWR$GPLVVLRQIRU5$%+6121+2B5(4'(1B+6

&RGH8VDJH)DLOXUH5(4'(1B&2'(6

8/+:/LPLW)DLOXUH5(4'(1B8/+:

7RWDO)DLOXUHVDIWHU$GPLVVLRQSP1R)DLOHG$IWHU$GP

'RZQJUDGHG36'DWD&RQQHFWLRQV$GP36B&21*B'2:16B$'0

SP6XP8O&UHGLWVSP6XP6TU8O&UHGLWVSP6DPSOHV8O&UHGLWV

SP8O&UHGLWV

SP6XP'O&RGHSP6XP6TU'O&RGHSP6DPSOHV'O&RGH

 (YHQWV

7KHIROORZLQJ*3(+HYHQWHQDEOHVWKHSUHFLVHFDOFXODWLRQRIZKRLVEORFNHG
HJJXDUDQWHHGQRQJXDUDQWHHGKDQGRYHUQRQKDQGRYHUDQGZKDWLVWKH
OLPLWLQJUHVRXUFH

 ,17(51$/B6<67(0B%/2&.

,17(51$/B6<67(0B5(/($6(


   
 (ULFVVRQ,QWHUQDO
7(&+1,&$/*8,'( 
3UHSDUHGDOVRVXEMHFWUHVSRQVLEOHLIRWKHU 1R

7(,5)10%HQHGHWWL5'H%HUQDUGL(60*%$ )$)
&KULVWHU0HMHUODQG(60*%%%ULDQ)DLUEDQNV7HUU\
$SSURYHG &KHFNHG 'DWH 5HY 5HIHUHQFH

6HEDVWLDQ6FKDSOLW] 7(,02/77(,//81  % 


 5HIHUHQFHV
>@ *XLGHOLQHIRU13,3UHVWXG\:&'0$5$1+63$2SWLPL]DWLRQ
6HUYLFH0RGXOH
>@ +63$3HUIRUPDQFH,QYHVWLJDWLRQ7&3IRFXVHG7HFKQLFDO*XLGH
>@ 7UDQVSRUW1HWZRUN*XLGHOLQHV3KRPHSDJH
>@ &KDQQHO6ZLWFKLQJ+6'8HQ&
>@ :&'0$51&3.3,V'HVFULSWLRQ)$)8HQ
>@ :&'0$5%63.3,V'HVFULSWLRQ)$)8HQ
>@ 6HUYLFH'HOLYHU\,QVWUXFWLRQIRU:5$17UDIILF0DQDJHPHQW
>@ 6HUYLFH'HOLYHU\,QVWUXFWLRQIRU:5$1&DSDFLW\2SWLPL]DWLRQ
>@ *HQHUDO3HUIRUPDQFH(YHQW+DQGOLQJ51&$;'
8HQ%
>@ 3HUIRUPDQFH6WDWLVWLFV51&$;'8HQ%
>@ +6'3$'HSOR\PHQW*XLGHOLQH+6'5HY%
>@ +6,PSDFWRQ57UDIILF&HQWUD6HVVLRQ
>@ &KDQQHO6ZLWFKLQJ2SWLPL]DWLRQ&HQWUD6HVVLRQ
>@ +6'3$*3,)LQDO5HSRUW
>@ :&'0$6),37HFKQLFDO*XLGHOLQH+63$IHDWXUHVDQGGHIDXOW
4R6
>@ &DSDFLW\ +63HUIRUPDQFHZLWK+LJK3RZHU0&3$
>@ +6'3$0RELOLW\3KDVH7HVW5HSRUW
>@ ,PSDFWRI$FWLYDWLQJ+6'3$3KDVH,,0RELOLW\RQ'DWD$SSOLFDWLRQ
>@ +60RELOLW\3KDVHSRRU4XDOLW\'HWHFWHGB2))6WXG\
>@ +6'3$2SWLPL]DWLRQ)LHOG7ULDO