Butler University
Digital Commons @ Butler University
Scholarship and Professional Work - Business
College of Business
2012
Education and Ecotourism: A Framework and
Analysis of Education in Ecolodges in Costa Rica
and Panama
Gregory E. Osland
Butler University, [email protected]
Robert D. Mackoy
Butler University, [email protected]
Follow this and additional works at: http://digitalcommons.butler.edu/cob_papers
Part of the Business Administration, Management, and Operations Commons, Marketing
Commons, and the Tourism and Travel Commons
Recommended Citation
Osland, Gregory E. and Mackoy, Robert D., "Education and Ecotourism: A Framework and Analysis of Education in Ecolodges in
Costa Rica and Panama" (2012). Scholarship and Professional Work - Business. Paper 236.
http://digitalcommons.butler.edu/cob_papers/236
This Article is brought to you for free and open access by the College of Business at Digital Commons @ Butler University. It has been accepted for
inclusion in Scholarship and Professional Work - Business by an authorized administrator of Digital Commons @ Butler University. For more
information, please contact [email protected].
Tourism
EJTHR Research
Tourism
EJTHR Research
!!!"#$%&'"()*
Tourism
EJTHR Research
European Journal of
Tourism, Hospitality and Recreation
!"#$%&'()*$"#('+)$, )-$"#./01)2$/%.3'+.34)'(5)6&7#&'3.$(
+),"-./-0112#-3/-44"-55678/-9:39
;-9:39-<),=%#(&>?(-0>1%?%2%#-)@ -A#?'?B"-C,,-'?D&%1-'#1#'E#F
<'?>%#F-?>-<)'%2DB,
Tourism
EJTHR Research
European Journal of
Tourism, Hospitality and Recreation
EDUCATION AND ECOTOURISM:
A framework and analysis
of education in ecolodges
in Costa Rica and Panama
Gregory E. Osland
Robert Mackoy
Butler University, USA
!"#$%!&$''KF2(B%?)>-)@ -%)2'?1%1-B%->B%2'#-6JB1#F-,)FD#1-?1-B>-?*4)'%B>%-J2%-2>F#'-6'#1#B'(&#F-
FRPSRQHQWRI HFRWRXULVP7KLVSDSHUSURSRVHVDIUDPHZRUNWKDWLGHQWLÀHVDQGGHYHORSVD
W\SRORJ\RI SRVVLEOHHGXFDWLRQDOJRDOVDQGDFWLYLWLHVLQDQHFRWRXULVPFRQWH[W8VLQJGDWD
IURPLQWHUYLHZVDQGSDUWLFLSDQWREVHUYDWLRQDWIRXUWHHQOHDGLQJHFRORGJHVLQ&RVWD5LFDDQG
3DQDPD WKH SDSHU GHVFULEHV FODVVLÀHV DQG FRPSDUHV HGXFDWLRQDO HIIRUWV GLUHFWHG WRZDUG
#(),)FD#-D2#1%1/-!?%&-B-4B'%?(2,B'-#*4&B1?1-)>-%&#-'),#-)@ ->B%2'#-D2?F#1-?>-%&#-#F2(B%?)>B,SURFHVV5HODWLRQVKLSVDPRQJVHYHUDOHGXFDWLRQDOJRDOVWRXULVWV·VDWLVIDFWLRQDQGYLHZVRI %&#-4#'@)'*B>(#-)@ ->B%2'#-D2?F#1-B'#-2>()E#'#F-B>F-#L4,?(B%#F"--M2,%?4,#-*B>BD#'?B,-?*4,?6
(B%?)>1-B>F-4')4)1?%?)>1-@)'-@2%2'#-'#1#B'(&-B'#-)@@#'#F"-4#&5%"-)6--#()%)2'?1*/-%)2'?1**B>BD#*#>%/->B%2'#-6JB1#F-%)2'?1*/-#(),)FD#1/-#F2(B%?)>"-
%(#)*(+'-/DHGXFDFLyQDPELHQWDOHQDOEHUJXHVGHQDWXUDOH]DHFRORGJHVHVXQFRPSRQHQWH
?*4)'%B>%#/-B2>N2#-4)()-#1%2F?BF)/-F#,-#()%2'?1*)"-K1%#-B'%O(2,)-4')4)>#-2>-*)F#,)-()>6
FHSWXDOSDUDLGHQWLÀFDU\GHVHQYROYHUXQDWLSRORJtDGHSRVLEOHVREMHWLYRV\DFWLYLGDGHVHGXFD6
FLRQDOHVHQFRQWH[WRGHHFRWXULVPR8VDQGRGDWRVGHHQFXHVWDV\REVHUYDFLyQSDUWLFLSDQWHHQ
DOEHUJXHVGHQDWXUDOH]DGHOD&RVWD5LFD\GHO3DQDPiHODUWtFXORGHVFULEHFODVLÀFD\FRPSDUD
ODVDFFLRQHVGLULJLGDVDORVKXpVSHGHVGHORVDOEHUJXHVFRQSDUWLFXODUpQIDVLVSDUDHOUROORGH
ORVJXtDVGHQDWXUDOH]DHQHOSURFHVRHGXFDWLYR6RQHYLGHQFLDGDVODVUHODFLRQHVHQWUHORVRE6
$#%?E)1-#F2(B(?)>B,#1/-,B-1B%?1@B((?P>-F#-,)1-%2'?1%B1-=-,B1-4#'(#4(?)>#1-1)J'#-,B1-4#'@)'*B>(#1GHORVJXtDVGHQDWXUDOH]D6RQD~QGLVFXWLGDVODVP~OWLSOHVLPSOLFDFLRQHV\VXJHVWLRQHVSDUD
@2%2'B1-?>E#1%?DB(?)>#1"-7+*+/"+)'2*+8#6HFRWXULVPRJHVWLyQWXUtVWLFDWXULVPRGHQDWXUDOH]D
DOEHUJXHVGHQDWXUDOH]DHGXFDFLyQ
%(#)*,6$HGXFDomRDPELHQWDOHPDOEHUJXHVGHQDWXUH]DHFRORGJHVpXPFRPSRQHQWH
?*4)'%B>%#/-#*J)'B-4)2()-#1%2FBF)/-F)-#()%2'?1*)"-K1%#-B'%?D)-4')4Q#-2*-*)F#,)-()>(#46
WXDOSDUDLGHQWLÀFDUHGHVHQYROYHUXPDWLSRORJLDGHSRVVtYHLVREMHWLYRVHDWLYLGDGHVHGXFDFLRQ6
DLVHPFRQWH[WRGHHFRWXULVPR8VDQGRGDGRVGHHQWUHYLVWDVHREVHUYDomRSDUWLFLSDQWHHP
DOEHUJXHVGHQDWXUH]DGD&RVWD5LFDHGR3DQDPiRDUWLJRGHVFUHYHFODVVLÀFDHFRPSDUDDV
Do}HVGLULJLGDVDRVKyVSHGHVGRVDOEHUJXHVFRPSDUWLFXODUrQIDVHSDUDRSDSHOGRVJXLDVGH
QDWXUH]DQRSURFHVVRHGXFDWLYR6mRHYLGHQFLDGDVDVUHODo}HVHQWUHRVREMHWLYRVHGXFDFLRQDLV
1
DVDWLVIDomRGRVWXULVWDVHDVSHUFHo}HVVREUHDVSHUIRUPDQFHVGRVJXLDVGHQDWXUH]D6mRDLQ6
FB-F?1(2%?FB1-B1-*R,%?4,B1-?*4,?(BSQ#1-#-12D#1%Q#1-4B'B-@2%2'B1-?>E#1%?DBSQ#1"-7+*+8"+)'29+8#6!"#$%"&'()*+,-LV3URIHVVRURI 0DUNHWLQJDQG,QWHUQDWLRQDO%XVLQHVVDW%XWOHU8QLYHU6
1?%="--G?1-'#1#B'(&-(#>%#'1-)>-#()%)2'?1*/-4'?*B'?,=-?>-AB%?>-C*#'?(B/-B>F-?>%#'>B%?)>B,-$)?>%YHQWXUHVLQ&KLQD+HKDVSXEOLVKHGFDVHVWXGLHVRQHFRWRXULVPLQVHYHUDORXWOHWV$XWKRU·V
()>%B(%H-D)1,B>FIJ2%,#'"#F2"-.%/#"0'1+23%&LV$VVRFLDWH3URIHVVRURI 0DUNHWLQJDW%XWOHU
8QLYHUVLW\+LVSULPDU\UHVHDUFKLQWHUHVWVIRFXVRQHFRWRXULVPLPPLJUDQWSRSXODWLRQEXVL6
QHVVGHYHORSPHQWDQGFRQVXPHUVDWLVIDFWLRQ$XWKRU·VFRQWDFWUPDFNR\#EXWOHUHGX"
77
78
('8&$7,21$1'(&27285,60
,1752'8&7,21
K()%)2'?1*-?1->B%2'#-6JB1#F-%'BE#,-%&B%-#*J'B(#1-4'?>(?4,#1-)@ -1216
%B?>BJ?,?%=/-B>F-%&21-?1-*B>BD#F-%)-()>1#'E#-%&#->B%2'B,-#>E?')>*#>%-)>ZKLFKLWGHSHQGVSURYLGHHFRQRPLFEHQHÀWVWRWKHORFDOFRPPXQLW\
B>F-%&#-?>F21%'=/-B>F-%)-&5"7'3&)'(5)/'3./,4)38&)3$"#./3/-TU)!,?>D-B>F-V#>6
QHOO2VODQG0DFNR\8QLWHG1DWLRQV:RUOG(FRWRXULVP
W2**?%/-9::9X-Y#BE#'/-9::Z["--KF2(B%?)>-)@ -%)2'?1%1-(B>-B@@#(%-%&#?'B!B'#>#11/-2>F#'1%B>F?>D/-B44'#(?B%?)>/-EB,2#1-B>F-J#&BE?)'1-'#DB'F6
?>D-%&#->B%2'B,-#>E?')>*#>%-B>F-%&#-,)(B,-()**2>?%=/-%&21-&#,4?>D-%)B(()*4,?1&-%&#-?F#B,1-)@ -#()%)2'?1*X-#F2(B%?)>-(B>-B,1)-B@@#(%-%)2'?1%#L4#'?#>(#1-B>F-1B%?1@B(%?)>/-()>%'?J2%?>D-%)-%&#-#()>)*?(-4#'@)'*6
B>(#-)@ -%&#-#(),)FD#"
U#14?%#-!?F#14'#BF-B11#'%?)>1-)@ -%&#-?*4)'%B>(#-)@ -#F2(B%?)>-?>HFRWRXULVPHJ*LOEHUW.LPPHO0DULRQ5HLG
!?%&-%)2'?1%1-,#B'>?>D-BJ)2%-J)%&->B%2'#-B>F-,)(B,-(2,%2'#1-TV#>>#,,/9::3[/-'#E?#!-)@ -%&#-*2,%?-6F?1(?4,?>B'=-#()%)2'?1*-,?%#'B%2'#-2>()E6
#'1-,?%%,#-#*4?'?(B,-'#1#B'(&-)'-%&#)'=/-4B'%?(2,B',=-B%-%&#-,#E#,-)@ -%&##(),)FD#"--K(),)FD#1-B'#-%&#-B(()**)FB%?)>-@B(?,?%?#1-B>F-1#'E?(#1-#16
%BJ,?1&#F-?>/-)'-E#'=->#B'/->B%2'B,-B'#B1-E?1?%#F-J=-#()%)2'?1%1"--K(),)FD#RZQHUVPDQDJHUVDUHZHOOSRVLWLRQHGWRKHOSHGXFDWHWKHLUHPSOR\HHV
WKHORFDOFRPPXQLW\DQGWRXULVWV$OWKRXJKPDQDJHUVXWLOL]HQXPHU6
)21-#F2(B%?)>B,-)@@#'?>D1/->B%2'#-D2?F#1-B'#-%&#-4'?*B'=-@B(?,?%B%)'1-)@ YLVLWRUV·HQYLURQPHQWDOOHDUQLQJVHUYLQJDVLQWHUPHGLDULHVEHWZHHQWKH
QDWXUDOHQYLURQPHQWDQGWKHJXHVWV%DOODQW\QH+XJKHV5H6
(#>%-'#1#B'(&-&B1-@)2>F-%&B%-B-4'?*B'=-*)%?EB%?)>-)@ -%)2'?1%1-%)-E?1?%#(),)FD#1-?1-%)-,#B'>-BJ)2%-B>F-#L4,)'#->B%2'#-B>F-,)(B%?)>1-)@ -(2,6
WXUDOLQWHUHVW&KDQ%DXP.ZDQ(DJOHV*HEKDUGW
\&21/-?>%#D'B%?>D-#>E?')>*#>%B,-B>F-(2,%2'B,-#F2(B%?)>-?>%)-%&#-)E#'6
B,,-#(),)FD#-#L4#'?#>(#-?1-?*4)'%B>%-?>-1B%?1@=?>D-%)2'?1%1/-B1-!#,,-B1-?>&#,4?>D-%)-()>1#'E#->B%2'#"----------------------------------------------------------------------------------------7KLVUHVHDUFKVHHNVWRH[SOLFDWHWKHRULHVDQGEHVWSUDFWLFHVLQHQYL6
')>*#>%B,-#F2(B%?)>-?>-%&#-()>%#L%-)@ -#()%)2'?1*"--Y#-F#1('?J#/-(,B11?@=B>F-()*4B'#-%&#-#F2(B%?)>B,-#@@)'%1-F?'#(%#F-%)!B'F-D2#1%1-)@ -,#BF?>DHFRORGJHVLQWZRSRSXODUHFRWRXULVPGHVWLQDWLRQVLQ&HQWUDO$PHULFD
&RVWD5LFDDQG3DQDPD:HXQFRYHUUHODWLRQVKLSVDPRQJHOHPHQWV
RI HGXFDWLRQDQGKLJKOLJKWHGXFDWLRQDOJRDOVWRXULVWV·VDWLVIDFWLRQDQG
YLHZVRI WKHHGXFDWLRQDOSHUIRUPDQFHRI JXLGHVLQHFRORGJHVLQ&RVWD
5LFDDQG3DQDPD,QWKHIROORZLQJVHFWLRQVZHUHYLHZDQGRUJDQL]H
#>E?')>*#>%B,-#F2(B%?)>-B>F-#()%)2'?1*-,?%#'B%2'#-@')*-1#E#'B,-F?16
(?4,?>#1/-F#1('?J#-)2'-'#1#B'(&-*#%&)F),)D=/-F?1(211-)2'-'#12,%1/-B>F%&#>-)@@#'-()>(,21?)>1-!?%&-*B>BD#'?B,-'#()**#>FB%?)>1"-/,7(5$785(5(9,(:
(GXFDWLRQLVDZLGHO\UHFRJQL]HGHOHPHQWRI HFRWRXULVPPDQ\DX6
%&)'1-B>F-)'JDQL]DWLRQVDVVHUWWKDWHGXFDWLRQDQGOHDUQLQJDUHLQWHJUDO
26/$1'$1'0$&.2<
79
DQG HVVHQWLDO HOHPHQWV %ODPH\ %XFNOH\ )HQQHOO *LOEHUW2VODQG0DFNR\7KH,QWHUQDWLRQDO(FRWRXULVP
6RFLHW\8QLWHG1DWLRQV:RUOG6XPPLWRQ(FRWRXULVP
2QHRI WKHÀUVWGLVFXVVLRQVRI HFRWRXULVPSODFHVHGXFDWLRQDWWKHFHQW6
HURI WKLVW\SHRI WRXULVP&HEDOORV/DVFDUDLQ(FRWRXULVPLV
F?1%?>D2?1&#F-@')*->B%2'#-6JB1#F-%)2'?1*-J=-?%1-#*4&B1?1-)>-#F2(B%?)>DQGWKHLQWHUSUHWDWLRQRI QDWXUH5RGJHU0RRUH1HZVRPH
\&#-21#-)@ ->B%2'#-%)2'1-B1-B-4')F2(%-)@@#'?>D-)@ -B-,)FD#-(B>-J#-B-('?6
%#'?)>-?>-F#%#'*?>?>D-?@ -B-,)FD#-?1-B>-#(),)FD#-T]B%%B/-9::^X-_1,B>F0DFNR\7KHVHWRXUVDUHOHGE\QDWXUHJXLGHVHPSOR\HGXQ6
F#'-()>%'B(%/-)'-B''B>D#F-J=-%&#-#(),)FD#"--V)'-#LB*4,#/-]B%%B-T9::^[FRQFOXGHVWKDWWKHODFNRI QDWXUHJXLGHVVLJQDJHDQGLQWHUSUHWDWLRQ
*B%#'?B,1-B%-%&'##-G?*B,B=B>-%)2'?1%-F#1%?>B%?)>1-'#E#B,1-%&B%-#()%)2'6
?1*-F)#1->)%-)((2'-%&#'#"--0%-?1-$21%->B%2'#-6JB1#F-%)2'?1*/-%&)2D&-1)*#JRYHUQPHQWRIÀFLDOVFDOOLWHFRWRXULVP1DWXUHJXLGHVSOD\DVLJQLÀ6
(B>%-'),#-?>-%&#-#F2(B%?)>-)@ -%)2'?1%1/-%&#-()>1#'EB%?)>-)@ ->B%2'#/-B>FWKHÀQDQFLDOVXFFHVVRI WKHHFRORGJH%DOODQWLQHDQG+XJKHV
KF2(B%?)>-?1-B>-?*4)'%B>%-#,#*#>%-?>-#()%)2'?1*-@)'-1#E#'B,-'#B1)>1"-V)'-#LB*4,#/-#>E?')>*#>%B,-#F2(B%?)>-&#,41-%)2'?1%1-DB?>-D'#B%#'-B!B'#6
>#11-B>F-2>F#'1%B>F?>D-)@ ->B%2'B,-4&#>)*#>B-TGB*/-3779X-<B,*#'/377Z["--\'BF?%?)>B,/-B>B,=%?(B,-B44')B(&#1-%)-#>E?')>*#>%B,-#F2(B%?)>FHQWHURQDJXLGHRUWHDFKHUÀQGLQJLGHQWLI\LQJDQGGHVFULELQJSDUWLFX6
,B'-#,#*#>%1-)@ -B->B%2'B,-B'#B/-12(&-B1-J?'F-B>F-*B**B,-14#(?#1"--\&?1?1-B>-)'DB>?1*-6@)(21#F-E?#!-)@ -J?),)D=-B>F-#>E?')>*#>%B,-#F2(B%?)>0DULRQ5HLG0RUHKROLVWLFHFRORJLFDODSSURDFKHVWRZDUG
#()%)2'?1*-#F2(B%?)>-()>(#'>-%&#)'?#1-B>F-%&#*#1"--\&#1#-?>(,2F#-()>6
%#>%-)>-&)!-%&#-#,#*#>%1-)@ -B-4B'%?(2,B'-#()1=1%#*-B'#-?>%#D'B%#F/-)'&)!-B-2>?E#'1B,-4&#>)*#>)>-12(&-B1-#(),)D?(B,-BFB4%B%?)>-?1-#E?F#>%LQWKHSDUWLFXODUQDWXUDODUHD.LPPHO0DULRQ5HLG
8QOLNHLQWHOOHFWXDODSSURDFKHVWROHDUQLQJLQWUDGLWLRQDOELRORJLFDO
#F2(B%?)>/-#()%)2'?1*-#F2(B%?)>-)@@#'1-@'2?%@2,-)44)'%2>?%?#1-@)'-#*)6
WLRQDOHOHPHQWVRI OHDUQLQJ.LPPHO*XLGHVEHFRPHIDFLOLWD6
%)'1-@)'-%)2'?1%1-%)-#L4#'?#>(#->B%2'#-B>F-%)-DB?>-B-F##4#'-B44'#(?B6
%?)>-@)'->B%2'B,-4&#>)*#>B"-\&?1-(B>-J#()*#-B-4')(#11-)@ -@B(?,?%B%?>DDZHDQGZRQGHU5\DQ+XJKHV&KLUJZLQ0LOHVVWDWHVWKDW
´/HDUQLQJDERXWZLOGHUQHVVLVQRWOLNHOHDUQLQJDULWKPHWLFRUHFRQRPLFV
RUKRZWKHSROLWLFDOV\VWHPZRUNV,WLVPRUHDNLQWROHDUQLQJZKDWLV
EHDXWLIXODERXWD0R]DUWFRQFHUWRD5HPEUDQGWSDLQWLQJRUD6KDNH6
14#B'#-1)>>#%`-T3773/-4"-^["---5DWKHUWKDQGLFKRWRPL]LQJQDWXUHHGXFDWLRQDVDVFLHQFHRUDQDUW
)'- BFE)(B%?>D- '#B1)>- )'- #*)%?)>/- *B>=- 4')D'#11?E#- #>E?')>*#>%B,#F2(B%)'1-&#,4-,#B'>#'1-()>>#(%-!?%&->B%2'#-?>-J)F=/-*?>F/-B>F-14?'?%TM))'#/-9::Z["--W4?'?%2B,-()>>#(%?)>1-J#%!##>-4#)4,#-B>F-4,B(#1-(B>J#-&?D&,?D&%#F-TY#?,#'-a-GB*/-9::3["--\&?1-B44')B(&-&B1-J##>-(,B11?6
80
('8&$7,21$1'(&27285,60
ÀHGDVDSDUWRI DQLQWHUSUHWLYHKROLVWLFIUDPHZRUNRI HQYLURQPHQ6
%B,-#F2(B%?)>-TbB*B,/-9::8["
(GXFDWLRQFDQDOVREHDNH\HOHPHQWLQKHOSLQJRYHUFRPHQHJDWLYH
?*4B(%1-)@ -%)2'?1*-)>-%&#->B%2'B,-#>E?')>*#>%"--\)2'?1%1-F)-?*4B(%QDWXUDODUHDVDQGFDQKDUPZLOGOLIH6HNHUFLRJOXIRUH[DPSOH
E\GLVWXUELQJELUGVWHQGLQJQHVWVRUE\IHHGLQJFDQG\WRPRQNH\V%XW
#F2(B%?)>-4')D'B*1-?>->B%2'B,-B'#B1-#>()2'BD#-E?1?%)'1-%)-()>1?F#'-%&##>E?')>*#>%B,-B>F-1)(?B,-()>1#N2#>(#1-)@ -%&#?'-B(%?)>1"--\&?1-()2,FHQKDQFHHQYLURQPHQWDOHWKLFVDQGOHDGWRVHOIGLUHFWHGPRGLÀFDWLRQ
RI WKHYLVLWRU·VSHUVRQDOEHKDYLRU7KLVDSSURDFKWRHFRWRXULVPHG6
XFDWLRQKDVEHHQFODVVLÀHGDVSDUWRI DSKLORVRSKLFDOVRFLDOVFLHQFH
IUDPHZRUNWKDWVHHNVWRLQÁXHQFHWKHYDOXHVDQGFRQGXFWRI WRXULVWV
0DULRQ5HLG7KHNH\JRDOLVWRUHGXFHLQDSSURSULDWHEHKDY6
?)'1-%&B%-&B'*-!?,F,?@#-B>F-%&#->B%2'B,-#>E?')>*#>%/-%)-&#,4-()>1#'E#QDWXUH2UDP5DQGDOO5ROOLQV5RGJHU0RRUH1HZ6
1)*#/-9::5["--<B,*#'-T377Z[-B'D2#1-%&B%-D2?F#1-1&)2,F-%'=-%)-&#,4-E?1?6
%)'1-F#E#,)4-B>-#%&?(-)@ -4#'1)>B,-'#14)>1?J?,?%=-B>F-1%#!B'F1&?4-%&B%!?,,-B,1)-B@@#(%-%&#?'-J#&BE?)'1-?>-%&#?'-&)*#-,)(B%?)>1"
6KLDQHW]DQG.DYDQDJKXWLOL]HDV\VWHPVVWDNHKROGHUDSSURDFKWR
#()%)2'?1*-#F2(B%?)>-%&B%-4)1?%1-%&B%-#()%)2'?1*-)4#'B%)'1-1&)2,F-(#>%#')>-%)2'?1*-121%B?>BJ?,?%=-J=-?>('#B1?>D-%&#-#>E?')>*#>%B,-B!B'#>#11-B>FHWKLFDOEHKDYLRUVRI YLVLWRUVVWDIIDQGWKHQHLJKERULQJFRPPXQLW\&RP6
*2>?%=-#F2(B%?)>B,-B(%?E?%?#1-)>-61?%#-B>F-?>-1(&)),1/-B1-!#,,-B1-#*4,)=##WUDLQLQJH[WHQGHQYLURQPHQWDOHGXFDWLRQEH\RQGWKHYLVLWRU6KLDQHW]DQG
cBEB>BD&-T9::Z[--1%B%#-%&B%-#L4B>F?>D-%&#-1()4#-)@ -#F2(B%?)>-?1->#(#11B'=%)-121%B?>->B%2'#-?>-B>-B'#B-)E#'-%&#-,)>D-%#'*"-------C>%&')4),)D?1%1-B>F-4),?%?(B,-1(?#>%?1%1-@')*-%&#-('?%?(B,-'#1#B'(&4B'BF?D*-1##-#()%)2'?1*-#F2(B%?)>-B1-B>-)44)'%2>?%=-%)-?>('#B1#-%)2'6
LVWV·DZDUHQHVVDQGXQGHUVWDQGLQJRI H[FOXGHGPLQRULW\JURXSVVXFK
DVORFDOLQGLJHQRXVFXOWXUHV1DWLYHSHRSOHV·YLHZVNQRZOHGJHDQG
UHODWLRQVKLSVZLWKQDWXUHDUHKLJKOLJKWHG=DQRWWL&KHUQHOD
\&?1-?>%#D'B%#1-%&#-#,#*#>%-)@ -#()%)2'?1*-%&B%-(#>%#'1-)>-%&#-,)(B,FRPPXQLW\2VODQG0DFNR\FUHDWLQJUHVSHFWIRUORFDOFXO6
WXUHVDQGFRPPXQLWLHVDQGEHQHÀWWLQJUDWKHUWKDQH[SORLWLQJWKHP
0DQ\GHÀQLWLRQVRI HFRWRXULVPLQWHJUDWHWKHLGHDOWR´VDWLVI\WRXULVWVµ
DVGRHVDFXVWRPHURULHQWHGPDUNHWLQJIUDPHZRUNHJ%DOODQW\QH
+XJKHV7RXULVWV·HQMR\PHQWEHFRPHVWKHSULPDU\JRDORI WKH
JXLGH6DWLVÀHGWRXULVWVWHOORWKHUVRI WKHLUSRVLWLYHH[SHULHQFHVZKLFK
(B>-?>('#B1#-%&#->2*J#'-)@ -E?1?%)'1-B>F-B,1)-1%?*2,B%#-'#4#B%-E?1?%1"--0>ELUGLQJRULHQWHGWRXUVWKLVFDQFHQWHURQÀQGLQJSDUWLFXODUUDUHELUG
VSHFLHVWKDWZLOOLQFUHDVHWKHWRXULVWV·OLIHOLVWVRI ´VHHQVSHFLHVµ%XWH[6
(#11?E#,=-@)(21?>D-)>-1B%?1@=?>D-%&#-%)2'?1%-(B>-J#-F#%'?*#>%B,-%)-%B'D#%14#(?#1-B>F-%)-%&#-#>E?')>*#>%-Tc?**#,/-3777["--\&#-*?>?*B,-6?*4B(%JRDORI HFRWRXULVPFDQHDVLO\EHRYHUORRNHGE\JXLGHVDQGWRXULVWVRQ
!?,F,LIHWRXUV5RGJHU0RRUH1HZVRPH
26/$1'$1'0$&.2<
81
U#14?%#-%&#-'B%&#'-,B'D#-()>(#4%2B,-,?%#'B%2'#-)>-#>E?')>*#>%B,-#F6
XFDWLRQUHODWLYHO\OLWWOHHPSLULFDOZRUNKDVEHHQGRQHRQHGXFDWLRQDO
4'B(%?(#1-B>F-)2%()*#1-?>-#()%)2'?1*"--M)1%-#*4?'?(B,-1%2F?#1-&BE#@)2>F-%&B%-#()%)2'?1*-#F2(B%?)>-B%%#*4%1-%)-J2?,F-B!B'#>#11-B>F-2>6
F#'1%B>F?>D/- 'B%&#'- %&B>- B%%?%2F#1- )'- J#&BE?)'1"- - C21%'B,?B>- #()%)2'D2?F#1-F#1('?J#F-%&#?'-'),#1-B1-?>@)'*#'1/-@)(21?>D-)>-?>@)'*B%?)>/-*)'#WKDQRQHQYLURQPHQWDOLQWHUSUHWDWLRQRURQLQÁXHQFLQJDWWLWXGHVWRZDUG
>B%2'#-T]B,,B>%=>#-a-G2D&#1/-9::3["--M)1%-)@ -%&#-1%2F?#1-B'#-JB1#F)>-)>#-1?%#-)'-(B1#"-Y?,F,?@#-%)2'1-?>-B>-B'#B-)@ -C21%'B,?B-@)(21#F-)>ÀQGLQJELUGVUDWKHUWKDQRQHGXFDWLQJRULQWHUSUHWLQJQDWXUH5RGJHU
0RRUH1HZVRPH+XJKHVDQG0RUULVRQ6DXQGHUV
VWXGLHGWKHLPSDFWRI WUDLOVLGHLQWHUSUHWLYHVLJQVRQYLVLWRUNQRZOHGJH
7KH\IRXQGWKDWLQWHUSUHWLYHVLJQVLQFUHDVHGWRXULVWV·SHUFHSWLRQWKDW
%&#-#()%)2'?1*-#L4#'?#>(#-!B1-B-,#B'>?>D-B(%?E?%=/-J2%->)-?>('#B1#-?>YLVLWRUV·NQRZOHGJHZDVIRXQG)XUWKHUIUHTXHQWXVHRI VLJQVDORQJ
WUDLOVPD\XQLQWHQWLRQDOO\UXLQVRPHYLVLWRUV·VHQVHRI H[SORUDWLRQDQG
F?1()E#'=/- ('#B%?>D- >#DB%?E#- B%%?%2F#1- %)!B'F- %&#- #()%)2'?1*- #L4#'?6
#>(#-T]'B*!#,,-a-AB>#/-3779["--MBF?>-B>F-V#>%)>-T9::8[/-1%2F=?>DYLVLWRUVWRWKH*UHDW%DUULHU5HHIIRXQGWKDWWKHQXPEHURI LQWHUSUH6
WLYHDFWLYLWLHVWRZKLFKYLVLWRUVZHUHH[SRVHGZDVFRUUHODWHGZLWKNH\
()D>?%?E#-)2%()*#1-'#DB'F?>D-%&#-'##@ -#>E?')>*#>%-B>F-&2*B>-?*6
4B(%1-)>-%&#-'##@"
\&#'#-&BE#-J##>-)>,=-B-@#!-#*4?'?(B,-1%2F?#1-!&?(&-#L%#>F-%&#-@)6
FXVRI HGXFDWLRQDOHIIHFWVEH\RQGDZDUHQHVVDQGXQGHUVWDQGLQJ3HDNH
0>>#1-B>F-U=#'-T9::7[-()>F2(%#F-B-,B'D#-1(B,#-12'E#=-)@ -!&B,#-!B%(&6
#'1-B%-G#'E#=-]B=/-C21%'B,?B"--\&#=-#LB*?>#F-()**2>?(B%?)>-*#11BD#()*4'#&#>1?)>/-J2%-B,1)-1%2F?#F-?*4B(%1-)>-%)2'?1%-#*)%?)>B,-'#14)>16
#1/-1B%?1@B(%?)>/-EB,2#1/-B>F-dD2?F#-612DD#1%#F-()>1#'EB%?)>-B(%?)>1`-T4"39:["--Y#?,#'-B>F-W*?%&-T9::7[-@)'*B,,=-()>1?F#'#F-%&#-?*4B(%1-)@ -?>6
%#'4'#%?E#-B(%?E?%?#1-)>-B-1=1%#*-)@ -#F2(B%?)>B,-)2%()*#1-%&B%-?>(,2F#F()D>?%?)>/-B@@#(%-B>F-J#&BE?)'/-%&)2D&-%&#?'-1%2F=-!B1->)%-()>F2(%#F?>-B>-#()%)2'?1*-()>%#L%"
K()%)2'?1*-(B>-&#,4-4')E?F#-B>-#L4#'?#>%?B,-#,#*#>%-%)-,#B'>?>D-.()
>B%2'#-%&B%-(B>-&BE#-*)'#-J#&BE?)'B,-#@@#(%1-%&B>-(,B11'))*-B>F-)>6
6,?>#- ,#B'>?>D- '9$"3- >B%2'#"- \?1F#,,- B>F- Y?,1)>- T9::e[- 4')E?F#- 1)*#HPSLULFDOHYLGHQFHWKDWHFRWRXULVPSURPRWHVWRXULVWV·GHVLUHDQGLQ6
%#>%?)>-%)-()>1#'E#->B%2'#/-?>-%&#-(B1#-)@ -#F2(B%?)>B,-#L4#'?#>(#1-!?%&1#B-%2'%,#1-?>-B->B%2'B,-1#%%?>D"-6RPH DXWKRUV FKDUDFWHUL]H WKH SULPDU\ IXQFWLRQ RI HGXFDWLRQ LQ
HFRWRXULVPDVEHLQJEHKDYLRUFKDQJH5DQGDOO5ROOLQV,QD
121%B?>BJ,#-%)2'?1*-()>%#L%/-%&#-1&)'%-6-B>F-,)>D-6%#'*-J#&BE?)'-(&B>D#RI WRXULVWVLVFRQVLGHUHGDNH\QRUPDWLYHJRDODQGHGXFDWLRQLVFRQ6
1?F#'#F-%)-J#-)>#-()1%-6#@@#(%?E#-*#%&)F-)@ -B(&?#E?>D-%&?1-D)B,"--G)!6
#E#'/-#N2B,,=-?*4)'%B>%-B'#-%&#-?>%'?>1?(-'#!B'F1-%)2'?1%1-'#(#?E#-@')*-
82
('8&$7,21$1'(&27285,60
%&#?'-#F2(B%?)>B,-#L4#'?#>(#1"--\)-%&#-#L%#>%-%&B%-()D>?%?E#-B>F-B@@#(6
%?E#-)2%()*#1-)@ -#F2(B%?)>B,-#L4#'?#>(#1-()>%'?J2%#-%)-%)2'?1%-1B%?1@B(6
WLRQWRXULVWVZLOOEHPRUHOLNHO\WRUHSHDWWKHLUWULSVDQGWRHQFRXUDJH
)%&#'1-%)-#>DBD#-?>-12(&-%'?41-TY#?,#'-a-W*?%&/-9::7["
:HV\QWKHVL]HWKHGLVSDUDWHHFRWRXULVPHGXFDWLRQOLWHUDWXUHLQWRWKH
@),,)!?>D-D)B,1-B>F-)2%()*#1H
&RJQLWLYHDZDUHQHVVXQGHUVWDQGLQJRI QDWXUHDQGORFDOFXOWXUHV
(PRWLRQDO DSSUHFLDWLRQDZH HQMR\PHQW DIIHFWLRQ IRU QDWXUH
B>F-(2,%2'#1[f-K%&?(B,-TEB,2#1/-?F#B,1/->)'*1-?>-?>%#'B(%?)>1-!?%&->B%2'#-B>F-,)6
(B,-(2,%2'#1[f- +),?%?)>B,- T4')F2(#- *?>?*B,- >#DB%?E#- ?*4B(%/- ()>1#'E#- >B%2'#B')2>F-%&#-!)',F[
7KHIROORZLQJPRGHOLQWHJUDWHVDQGVKRZVOLNHO\UHODWLRQVKLSVEH6
WZHHQWKHNH\JRDOVDQGRXWFRPHVRI HFRWRXULVPHGXFDWLRQ:HXVH
WKLVPRGHOWRRUJDQL]HERWKRXUGDWDFROOHFWLRQDQGRXUGLVFXVVLRQ
)@ -'#12,%1"
:;$<"#'='>'1%-#*'%? '@-<2+0;%,'!%+*)'+,-'(<02%A#)
5(6($5&+0(7+2'2/2*<
C,%&)2D&-#()%)2'?1*-(B>-)((2'-?>-E?'%2B,,=-B>=->B%?)>/-*2(&-B%%#>6
%?)>-&B1-(#>%#'#F-)>-#()%)2'?1*-?>-&?D&-6N2B,?%=/-J2%-'B4?F,=-F?*?>?1&6
LQJQDWXUDODUHDV3ULPDFN6LQFHELRORJLFDOGLYHUVLW\WHQGVWR
?>('#B1#-B1-,B%?%2F#1-F#('#B1#/-B>F-12J%')4?(B,-B>F-%')4?(B,->B%2'B,-B'#B1B'#-J#()*?>D-&?D&,=-#>FB>D#'#F/-F#E#,)4?>D->B%?)>1-)@ -%&#-%')4?(1-B'##14#(?B,,=-B%%'B(%?E#-%)-#()%)2'?1%1-B>F-()>1#'EB%?)>-J?),)D?1%1-TM=#'#%-B,"/-9:::["--0>-BFF?%?)>/-%&#1#-B'#B1/-#14#(?B,,=-?>-AB%?>-C*#'?(B/-B46
4#B'-%)-J#-2>F#''#4'#1#>%#F-?>-121%B?>BJ,#-%)2'?1*-'#1#B'(&-D#>#'B,,=/X1HSDO7RH[SORUHWKHUROHRI HGXFDWLRQLQHFRORGJHV
ZHVHOHFWHGWZRUHSUHVHQWDWLYHQDWLRQVLQ&HQWUDO$PHULFDWKDWKDYH
H[WHQVLYHEXWWKUHDWHQHGQDWXUDODUHDVDQGVLJQLÀFDQW\HWGLIIHUHQWOHY6
HOVRI HFRWRXULVPGHYHORSPHQW²&RVWD5LFDDQG3DQDPD
\)-('#B%#-)2'-1B*4,#-!#-1#,#(%#F-,)FD#1-%&B%-*#%-B,,-%&'##-)@ -%&#@),,)!?>D-('?%#'?B-@)'-B>-#(),)FD#H-,)(B%#F-?>-)'->#B'-B->B%2'B,-B'#B/-4')6
*)%#-%&#*1#,E#1-B1-@)'-#()%)2'?1%1/-B>F-)@@#'->B%2'#-%)2'1-,#F-J=-B-D2?F#"--
26/$1'$1'0$&.2<
83
Y#-B%%#*4%#F-%)-?>(,2F#-B-'B>D#-)@ -F?@@#'#>%-%=4#1-)@ -#(),)FD#1-%)DB?>-B-J')BF-4#'14#(%?E#-)>-?112#1/-B>F-%&21-?*4,#*#>%#F-B-$2FD*#>6
WDOTXRWDVDPSOH7KHOHDGDXWKRUPDGHWZRUHVHDUFKWULSVWR&HQ6
WUDO$PHULFDHDFKIRXUWRÀYHZHHNVLQGXUDWLRQ7KHH[SORUDWRU\
'#1#B'(&-F#1?D>-?>(,2F#F-)>-61?%#-B>B,=1#1-)@ -38-#(),)FD#1-?>-%&#-%!)>B%?)>1/-21?>D-?>-6F#4%&-4#'1)>B,-?>%#'E?#!1-!?%&-38-#(),)FD#-)!>#'1DQGRUPDQDJHUVDQGQDWXUHJXLGHVDVZHOODVSDUWLFLSDQWREVHUYHU
%#(&>?N2#1-T])!#>/-9::9[-B>F-F?1(211?)>1-!?%&-%)2'?1%1-!&?,#-#>DBD?>D?>-9:-D2?F#-6,#F-%'?41"--0>%#'E?#!1-!#'#-()>F2(%#F-?>-J)%&-W4B>?1&-B>FK>D,?1&/-21?>D-4'#-6%#1%#F/-1#*?-61%'2(%2'#F-?>%#'E?#!-D2?F#1-)@ -N2#16
%?)>1"--C>-)J1#'EB%?)>-D'?F-!B1-21#F-%)-F#1('?J#-B>F-B11#11-%&#-%#B(&?>DDFWLYLWLHVWKDWRFFXUUHGRQQDWXUHWRXUV:HXWLOL]HGWKHÀYHHOHPHQWV
LQ)LJXUHWRRUJDQL]HGDWDFROOHFWHGIURPWKHWRXUVDQGWKHJXLGHV
C>)%&#'-D'?F-!B1-21#F-?>-'#()'F?>D-)J1#'EB%?)>1-)@ -#B(&-#(),)FD#DQGZDVSDUWLDOO\EDVHGRQDOLVWRI HGXFDWLRQDORIIHULQJVIURP5RPH
DQG5RPHUR
\&?1-*2,%?>B%?)>B,/-#L4,)'B%)'=-'#1#B'(&-F#1?D>-?1-@B'-J')BF#'-B>F*)'#-'#4'#1#>%B%?E#-%&B>-%&#-*)'#-()**)>,=-621#F-1?>D,#-(B1#-1%2F=*#%&)F/-#>BJ,?>D-4B%%#'>1-%)-J#-2>()E#'#F"--_2'-N2B,?%B%?E#-F#1?D>-B,1)D)#1-F##4#'-%&B>-*B?,-12'E#=1/-2>()E#'?>D-@B(%)'1-B>F-?112#1-%&B%-B'#RIWHQRYHUORRNHGLQVWUXFWXUHGGHVFULSWLYHUHVHDUFKGHVLJQV+RZHYHU
D?E#>-%&B%-%&#-,)FD#1-!#'#->)%-(&)1#>-B%-'B>F)*/-%&#-N2B>%?%B%?E#-'#6
VXOWVLQWKLVVWXG\DUHQRWDSSURSULDWHIRUPDNLQJIRUPDOVWDWLVWLFDOLQ6
@#'#>(#1-%)-%&#-4)42,B%?)>-)@ -B,,-#(),)FD#1-?>-%&#-'#D?)>"-Y#-'#E?#!#FDOOÀHOGQRWHVDQGFRQGXFWHGTXDOLWDWLYHDQDO\VHVDVUHFRPPHQGHGE\
])!#>-T9::9["--Y#-B,1)-()>F2(%#F-()''#,B%?)>-B>F-F?@@#'#>(#-)@ -*#B>1B>B,=1#1-%)-&#,4-2>()E#'-'#,B%?)>1&?41-!?%&?>-)2'-1B*4,#-FB%B"
5(68/76$1'',6&866,21
:$5;&)<8'#'73&#./3.7/)'(5)!5"7'3.$('+)=,,&#.(;/
M)1%-)@ -%&#-,)FD#1-B'#-'#,B%?E#,=-1*B,,/-!?%&-B-*#F?B>->2*J#'-)@ 3^- '))*1- B>F- (B4B(?%=-@)'- ^e-D2#1%1X-=#%-%&#-EB'?B>(#- ?1-,B'D#/-!?%&%)%B,->2*J#'-)@ -'))*1-'B>D?>D-@')*-@)2'-%)-37Z"--\&#-B'#B-)@ -,B>F)!>#F-J=-%&#-,)FD#-)!>#'1-%&B%-%&#1#-,)FD#1-B'#-1#%-?>-?1-'B%&#'-,B'D#"-\&#-*#F?B>-B*)2>%-)@ -&#(%B'#1-%)%B,1-3:3"e"--K,#E#>-)@ -%&#-,)FD#1B'#-4B'%-)@ -12J1%B>%?E#-4'?EB%#->B%2'#-'#1#'E#1/-!?%&-%&#-,B'D#1%-J#?>D%RVTXHGH3D]ZKLFKSURWHFWVKHFWDUHVRI PRVWO\SULPDU\IRUHVW
LQ&RVWD5LFD(LJKWRI WKHORGJHVLQRXUVDPSOHSULPDULO\WDUJHW
(B12B,-#()%)2'?1%1/-!&)-*)1%,=-#>DBD#-?>-D#>#'B,->B%2'#-)J1#'EB%?)>DQGUHOD[DWLRQDQGZKRXVXDOO\UHTXLUHVLJQLÀFDQWDPHQLWLHV2VODQG
0DFNR\7KUHHRI WKHORGJHVWDUJHWGHGLFDWHGHFRWRXULVWV
ZKRPRVWO\HQJDJHLQVSHFLDOL]HGHFRWRXULVPDFWLYLWLHVVXFKDVELUG6
?>D/-B>F-!&)-B'#-!?,,?>D-%)-B((#4%-,?*?%#F-?>@'B1%'2(%2'#-B>F-B*#>?%?#1-
84
('8&$7,21$1'(&27285,60
2VODQG0DFNR\:HDOVRLQFOXGHGLQRXUVDPSOHRQHORGJH
WKDWWDUJHWVJXHVWVVHHNLQJWRGRVFLHQWLÀFUHVHDUFKDQGRUH[WHQVLYH
HGXFDWLRQDODFWLYLWLHV8QLYHUVLW\RI *HRUJLD·V6DQ/XLV(FRORGJHLQ
&RVWD5LFDDQGRQHORGJHIRFXVLQJRQDJULFXOWXUDOHFRWRXULVPZLWK
DZRUNLQJFRIIHHSODQWDWLRQDQGFRIIHHWRXUVLQWHJUDWHGLQWRELUGLQJ
DQGJHQHUDOQDWXUHDFWLYLWLHVLQWKHUHVHUYH)LQFD/HULGD²3DQDPD
:HIRXQGVLJQLÀFDQWFRXQWU\GLIIHUHQFHVLQWKHDJHVRI WKHHFRORGJ6
HV$FFRUGLQJWRRXUUHVSRQGHQWV&RVWD5LFD·VHFRWRXULVPLQGXVWU\KDV
EHHQHVWDEOLVKHGDVDVWUDWHJLFSULRULW\IRUDORQJHUWLPHWKDQ3DQDPD·V
2QDYHUDJHWKH&RVWD5LFDQHFRORGJHVLQRXUVDPSOHKDYHEHHQRSHUDW6
?>D-@)'-3^-=#B'1/-()*4B'#F-!?%&-,#11-%&B>-%#>-=#B'1-?>-<B>B*B"--G)%#,%HOPDULQ&RVWD5LFD·VIDPRXV0RQWHYHUGH&ORXG)RUHVWDUHDLVWKH
),F#1%-,)FD#/-B%-98-=#B'1"--Y#-B,1)-2>()E#'#F-()2>%'=-F?@@#'#>(#1-?>%&#->2*J#'-)@ -#-<2+0;%,+*'%??#";,$)"--\&#-BE#'BD#->2*J#'-)@ -%=4#1RI HGXFDWLRQDORIIHULQJVDW&RVWD5LFDQHFRORGJHVZDVZKHUHDV
<B>B*B>?B>-#(),)FD#1-?>-)2'-1B*4,#-)>,=-&BF-^"5-F?@@#'#>%-%=4#1-)@ RIIHULQJV3RWHQWLDOHGXFDWLRQDORIIHULQJVLQFOXGHQDWXUHDQGRU
FXOWXUDOWRXUVJXLGHVZHEVLWHVÀOHVOLQNVH[KLELWVGLVSOD\VRQ
QDWXUHDQGRUORFDOFXOWXUHVOLEUDU\RI QDWXUHEDVHGERRNVRQVLWH
OHFWXUHVZRUNVKRSVVHPLQDUVVHOIJXLGHGQDWXUHLQWHUSUHWLYHWUDLOV
LQWHUSUHWLYHVLJQVODEHOVQDWXUHRULHQWHGEURFKXUHVVSHFLDO
#L4#'?#>%?B,-)44)'%2>?%?#1/-33[-?>@)'*#F/-BEB?,BJ,#-1%B@@/-B>F-39[-!?,F6
,?@#-E?#!?>D-@B(?,?%?#1/-?>(,2F?>D-J?'F-@##F#'1"--V?D2'#-9-F?14,B=1-%&#-@'#6
N2#>(=-)@ -#B(&-%=4#-)@ -#F2(B%?)>B,-)@@#'?>D/-J=->B%?)>"
C,,-)@ -%&#-38-#(),)FD#1-)@@#'-%)2'1-B>F-D2?F#1/-!&#%&#'-#*4,)=#F/()>%'B(%#F/-)'-B''B>D#F"--C%-1)*#-,)FD#1-D2?F#F-%)2'1-B'#-4B'%-)@ -%&#SDFNDJHEXWDWPRVWORGJHVJXHVWVPXVWSD\DGGLWLRQDODPRXQWVIRU
QDWXUHWRXUVLQWKHDUHD&RVWD5LFDQHFRORGJHVPRUHH[WHQVLYHO\XVH
QDWXUHH[KLELWVOHFWXUHVDQGZRUNVKLSVVHOIJXLGHGQDWXUHWUDLOVDQG
?>%#'4'#%?E#-1?D>1/-B>F-J')(&2'#1-BJ)2%->B%2'#"--\&?1-F?@@#'#>(#-*B=J#-F2#-%)-%&#-@B(%-%&B%-%&#-)E#'B,,-#()%)2'?1*-?>F21%'=-?1-*)'#-F#E#,6
RSHGLQ&RVWD5LFDWKDQLQ3DQDPDDQGWKDWWKHHFRORGJHVLQ&RVWD
5LFDKDYHEHHQHVWDEOLVKHGIRUDORQJHUWLPHWKDQWKRVHLQ3DQDPD
\&#'#-F)#1->)%-B44#B'-%)-J#-B>=-'#,B%?)>1&?4-J#%!##>-%&#->2*J#'-)@ #F2(B%?)>B,-)@@#'?>D-%=4#1-B>F->2*J#'-)@ -&#(%B'#1-)@ -4'?EB%#,=-6&#,FODQGHFRORGJHVL]HGHÀQHGLQWHUPVRI PD[LPXPQXPEHURI JXHVWVRU
>2*J#'-)@ -'))*1[/-)'-#(),)FD#-4'?(#1"--\&21/-#F2(B%?)>B,-)'?#>%B%?)>?1->)%-'#,B%#F-%)-1(B,#-)'-4'?(#-64)?>%"--G)!#E#'/-%&#'#-?1-B>-?>%#'#1%?>D'#,B%?)>1&?4-J#%!##>-)!>#'->B%?)>B,?%=-B>F-)@@#'?>D1"--C1-1##>-?>-\B6
EOHLWDSSHDUVWKDWIRUHLJQRZQHUVDUHPRUHOLNHO\WRKDYHPDQ\W\SHV
)@ -#F2(B%?)>B,-)@@#'?>D1"--V)2'-)@ -%&#-%)4-1?L-,)FD#1-?>-%#'*1-)@ -%=4#1)@ -#F2(B%?)>B,-)@@#'?>D1-B'#-)!>#F-J=-@)'#?D>#'1"--Y?%&-%&#-#L(#4%?)>)@ -%&#-()@@##-@B'*-!?%&->B%2'#-%)2'1-?>-<B>B*B-TV?>(B-A#'?FB[/-B,,-)@ %&#-@)'#?D>-6)!>#F-,)FD#1-&BE#-B-!?F#-EB'?#%=-)@ -#F2(B%?)>B,-)@@#'?>D1"
<B>B*B
<B>B*B
<B>B*B
<B>B*B
<B>B*B
<B>B*B
<B>B*B
&LHOWLWR6XU
/RV4XHW]DOHV
&DQRS\/RGJH
&DQRS\7RZHU
*DPERD5DLQIRUHVW5HVRUW
])(B1-0>>
V?>(B-A#'?FB
98:
3
3.5
:
e:
8e:
9.
e
39Z"5
&RVWD5LFD
M)>%#E#'F#-A)FD#
e:
M#B>H-<B>B*B
&RVWD5LFD
G)%#,-]#,*B'
^^
957"3
&RVWD5LFD
WB>-A2?1-K(),)FD#
..:
0HDQ&RVWD5LFD
&RVWD5LFD
(FRORGJH/DJR&RWHU
.e:
3:3"e
&RVWD5LFD
C'#>B,-_J1#'EB%)'=
3e.
M#F?B>
&RVWD5LFD
5DQFKR0DUJRW
3:::
9:."7
&RVWD5LFD
%RVTXHGH3D]
C'#BTGB[
M#B>
&RXQWU\
(FRORGJH1DPH
CD'?(2,%2'B,
&DVXDO
&DVXDO
U#F?(B%#F
U#F?(B%#F
&DVXDO
&DVXDO
&DVXDO
&DVXDO
&DVXDO
6FLHQFH(G
&DVXDO
CD'?(2,%2'B,
U#F?(B%#F
\B'D#%-K()%)2'?1%-%=4#
Z7"7
55".
^e":
Z."^
5Z
38
8::
37
9:
7:
Z
^:
^:
39^
Z:
39:
5:
9e
88"8
.3".
3^":
7"5
3^"3
39"e
39"7
Z
.5
.5"7
33
7
3:
8
3Z
Z
37
98
38
37
9:
.
38
5
37Z
39
39
83
8
9Z
9^
.9
8:
e3
.:
39
86
<B>B*B
<B>B*B
<B>B*B
<B>B*B
<B>B*B
<B>B*B
86
&RVWD5LFD
86
V'B>(#
&RVWD5LFD
&KLOH
&RVWD5LFD
*XHVWV 5RRPV CD# _!>#'
>B%?)>B,?%=
B+/*#'='>'C%-$#'D9+"+20#";)0;2)'+,-'@-<2+0;%,+*'(??#";,$)
Z":
Z"3
.
5
5
7
5
^
Z
7
7
33
7
Z
39
Z
1XPEHURI #F2(B%?)>B,-)@@#'?>D1
26/$1'$1'0$&.2<
85
86
('8&$7,21$1'(&27285,60
:;$<"#'E'>':"#F<#,2&'%? '@-<2+0;%,+*'(??#";,$)
>".5&/)'(5)-$"#/
C,,-)@ -%&#-#(),)FD#-)!>#'1/-*B>BD#'1-B>F-D2?F#1->)%#-%&B%->B%2'#D2?F#1-B'#-%&#-*)1%-?*4)'%B>%-#F2(B%?)>B,-)@@#'?>D"--MB>=-1%B%#F-%&B%>B%2'#-D2?F#1-B'#-%&#-*)1%-('?%?(B,-#,#*#>%-@)'-%&#-12((#11-)@ -%&#-,)FD#"-d+?1?%)'1-()*#-&#'#-J#(B21#-)@ -%&#-'#42%B%?)>-)@ -)2'-D2?F#1/`->)%#FB-<B>B*B>?B>-,)FD#-*B>BD#'"--_!>#'1-F#1('?J#F-D2?F#1-B1-d%&#-?>%#'6
4'#%#'1-)@ ->B%2'#/`-!&)-B'#-('?%?(B,-J#(B21#-%&#=-d()>>#(%-4#)4,#-!?%&>B%2'#"`-d_2'-D2#1%1->##F-B-D2?F#-%)-1##-!&B%-%&#=-&BE#-()*#-@)'/`F#(,B'#F-)>#-,)FD#-)!>#'"--C,,-)@ -%&#-,)FD#1-)@@#'->B%2'#-%)2'1-)>-%&#,)FD#-4')4#'%=-)'-B%->#B'J=->B%2'B,-B'#B1/-'B>D?>D-@')*-%!)-&)2'1-%)B,,-FB=-,)>D/-B>F-*)1%-)@ -%&#-D2#1%1-4B'%?(?4B%#-?>-B->B%2'#-%)2'X-1)*)1%-D2#1%1-14#>F-*)'#-%?*#-!?%&-B-D2?F#-%&B>-!?%&-B>=-)%&#'-,)FD#'#4'#1#>%B%?E#"-0>-,)FD#1-!?%&-#*4,)=#F-D2?F#1/-*)1%-D2?F#1-B,1)-?>6
%#'B(%-!?%&-B>F-B%%#>F-%)-%&#->##F1-)@ -D2#1%1-%&')2D&)2%-%&#?'-1%B="-CJXLGHLQ&RVWD5LFDSURXGO\VWDWHG´:H·UHWKHIDFHRI WKLVSODFH7KHLU
VDWLVIDFWLRQGHSHQGVRQWKHLUWLPHZLWKXVµ$PDQDJHULQ&RVWD5LFD
DOVRPDGHWKHSRLQWWKDWJXLGHVJLYHJXHVWV´ÀUVWKDQGLQYROYHPHQW
!?%&-B-,)(B,/`-%&21/-?>F?'#(%,=-&#,4?>D-%&#*-%)-,#B'>-BJ)2%-%&#-(2,%2'#"\&#-#F2(B%?)>B,-()>%#>%/-D)B,1/-B>F-B(%?E?%?#1-)@ -D2?F#1-!#'#-B>B6
O\]HGIURPHFRWRXUVGLUHFWO\VSRQVRUHGRUDUUDQJHGE\WKHHFRORGJ6
#1/-B>F-J=-?>%#'E?#!1-!?%&-D2?F#1-B@%#'-%&#-%)2'1-!#'#-()*4,#%#F"--V2'6
26/$1'$1'0$&.2<
87
WKHUWRXULVWV·DQGWKHOHDGDXWKRU·VDVVHVVPHQWVRI IRXUHOHPHQWVRI 4#'@)'*B>(#--6-1B%?1@B(%?)>-!?%&-%&#-%)2'-B>F-!?%&-%&#-D2?F#/-B>F-#EB,6
XDWLRQVRI WKHJXLGH·VHGXFDWLRQDODQGRYHUDOOSHUIRUPDQFHZHUHUH6
FRUGHG8VLQJWKHPRGHO)LJXUHWKDWZHGHYHORSHGIURPDUHYLHZ
RI WKHOLWHUDWXUHÀYHVHWVRI FRQWHQWJRDOVDFWLYLWLHVZHUHRUJDQL]HG
J=-'?'#&(&//-T?FHQWLÀFDWLRQRI VSHFLHV"(5&#/3'(5.(;-T&2*B>-21#1-)@ 14#(?#1/-J#&BE?)'1-)@ -14#(?#1/-?>%#'B(%?)>1-)@ -14#(?#1[/-'%%#&7.'3.$(-TB46
4'#(?B%?)>/-#>$)=*#>%[/-&38.7/-T()>1#'EB%?)>-EB,2#1/-4#'1)>B,-'#14)>1?J?,6
?%=[/-B>F-9&8'@.$#/-T*?>?*B,-?*4B(%-)>->B%2'#/-&#,4-%)-()>1#'E#->B%2'#["-)LJXUHGLVSOD\VWKHJXLGHV·VWDWHGLPSRUWDQFHRI WHQDFWLYLWLHVYHUVXV
'#()'F#F-)J1#'EB%?)>1-)@ -%&#?'-B(%2B,-J#&BE?)'1-F2'?>D-%&#-#()%)2'1"
:;$<"#'GH''I0+0#-'JAK%"0+,2#'8#")<)'L20<+*'M#9+8;%"'%? '@2%0%<"'
!<;-#)
A?'#&(&//
7KHSULPDU\DFWLYLW\RI JXLGHVRQWKHWRXUVLQRXUVDPSOHZDVÀQG6
?>D/-1&)!?>D/-B>F-?F#>%?@=?>D-J?'F1-B>F-*B**B,1"-<,B>%1-B>F-)%&#'-)'6
JDQLVPVZHUHDOVRLGHQWLÀHGRQPRVWWRXUV0RVWJXLGHVFDUULHGVSRW6
WLQJVFRSHVZLWKWULSRGVZKLFKWKH\XVHGWR]RRPLQRQUHPDUNDEOH
14#(?#1-B%-B-F?1%B>(#/-B>F-%&#>-B%%#*4%#F-%)-D?E#-#B(&-%)2'-4B'%?(?4B>%-
88
('8&$7,21$1'(&27285,60
%&#-)44)'%2>?%=-%)-)J1#'E#-%&#->B*#F-J?'F-)'-*B**B,-%&')2D&-%&#1()4#"--\&?1-B(%?E?%=-!B1-()>1?1%#>%-!?%&-%&#-&?D&-,#E#,-)@ -?*4)'%B>(#JXLGHVSODFHGRQLGHQWLÀFDWLRQRI VSHFLHV*XLGHV·HPSKDVHVRQ'?'#&B
(&//-F?F->)%-()''#,B%#-!?%&-&?D&-,#E#,1-)@ -#*4&B1?1-)>-)%&#'-#F2(B%?)>6
B,-D)B,1-)'-!?%&-&?D&-,#E#,1-)@ -1B%?1@B(%?)>-!?%&-%&#-%)2'-)'-D2?F#/-)'!?%&-&?D&-'B%?>D1-)@ -#F2(B%?)>B,-)'-)E#'B,,-4#'@)'*B>(#-)@ -%&#-D2?F#"
C(5&#/3'(5.(;
V')*-B-,#B'>?>D-4#'14#(%?E#-B!B'#>#11/-?1-B-4'#'#N2?1?%#-@)'-2>F#'6
1%B>F?>D-BJ)2%->B%2'#-B>F-(2,%2'#/-!&?(&-?1-B>-?*4)'%B>%-#F2(B%?)>B,D)B,"--]2%-D2?F#1-F?F->)%-14#>F-*2(&-%?*#-&#,4?>D-%)2'?1%1-2>F#'1%B>F&2*B>-21#1-)@ -14#(?#1/-J#&BE?)'1-)@ -14#(?#1/-)'-?>%#'B(%?)>1-J#%!##>14#(?#1"-_((B1?)>B,,=-D2?F#1-F?1(211#F-%)4?(1-12(&-B1-%&#-?>%#'F#4#>F6
HQWPXWXDOO\EHQHÀFLDOUHODWLRQVKLSRI DSDUWLFXODUELUGVSHFLHVDQG
SODQWDVWKH5HVSOHQGHQW4XHW]DODQGWKHIUXLWEHDULQJDOPHQGUDWUHH
*XLGHVZKRVRXJKWWRHQKDQFHWRXULVWV·XQGHUVWDQGLQJDOVRVRXJKWWR
KHOSGHYHORSWRXULVWV·DSSUHFLDWLRQRI QDWXUHDQGWKHLUHQYLURQPHQ6
WDOEHKDYLRUV)RUWKRVHJXLGHVZKRWULHGWRKHOSWRXULVWV·XQGHUVWDQG
QDWXUDOSKHQRPHQDWKHLPSDFWRQWRXULVWV·DVVHVVPHQWVRI WKHLUSHU6
IRUPDQFHDQGRQVDWLVIDFWLRQZLWKWKHWRXUDQGJXLGHZDVVLJQLÀFDQW
?>-)2'-1B*4,#"--K()-6%)2'?1%1-J#(B*#-B%%2>#F-%)-B>F-EB,2#F-F?1(211?)>1)@ -B>?*B,-B>F-4,B>%-J#&BE?)'1-%&B%-&#,4#F-%&#*-2>F#'1%B>F->B%2'#-J#%6
WHU:HIRXQGVHYHUDOVLJQLÀFDQWUHODWLRQVKLSVEDVHGRQXQGHUVWDQG6
?>D/-!&?(&-!#-&?D&,?D&%-B1-%&'##-?*4)'%B>%-4')4)1?%?)>1-)@ -%&?1-1%2F=)>-#F2(B%?)>-?>-#(),)FD#1H
3*XLGHV·DWWHPSWVWRHQKDQFHWRXULVWV·XQGHUVWDQGLQJRI VSHFLHV·
J#&BE?)'1-B>F-?>%#'B(%?)>1-,#BF1-%)-D'#B%#'-B44'#(?B%?)>-B>F-#>6
$)=*#>%-)@ ->B%2'#-J=-%&#-%)2'?1%1"
3*XLGHV·DWWHPSWVWRHQKDQFHWRXULVWV·XQGHUVWDQGLQJRI VSHFLHV·
J#&BE?)'1-B>F-?>%#'B(%?)>1-B'#-()''#,B%#F-!?%&-D)B,1-%)-&#,4-%)2'6
LVWV·GHYHORSHQYLURQPHQWDOEHKDYLRUVRI PLQLPDOLPSDFWRQQD6
%2'#-B>F-()>1#'E?>D->B%2'#"3 *XLGHV ZKR VHHN WR LPSURYH WRXULVWV· XQGHUVWDQGLQJ RI VSH6
FLHV·EHKDYLRUVDQGLQWHUDFWLRQVDUHKLJKO\UDWHGE\WRXULVWVDQG
4')F2(#-&?D&-,#E#,1-)@ -1B%?1@B(%?)>-!?%&-%&#-%)2'-B>F-%&#-D2?F#"A%%#&7.'3.$()
*XLGHVUDWHGGHYHORSLQJWRXULVWV·DSSUHFLDWLRQRI QDWXUHDQGWKHLU
#>$)=*#>%-?>->B%2'#-B1-%&#?'-%!)-*)1%-?*4)'%B>%-D)B,1"-G)!#E#'/-%&#JXLGHV·DFWXDOEHKDYLRUVHVSHFLDOO\WRHQKDQFHWRXULVWV·DSSUHFLDWLRQRI QDWXUHIHOOVKRUWRI WKHLUVWDWHGLQWHQWLRQV,WDOVRDSSHDUVWRWDNHPRUH
%&B>-1?*4,=-?F#>%?@=?>D-B>?*B,1-B>F-4,B>%1-%)-&?D&,=-1B%?1@=-*)1%-#()6
WRXULVWV7KHUHZDVDSRVLWLYHFRUUHODWLRQEHWZHHQJXLGHV·DWWHPSWVWR
26/$1'$1'0$&.2<
89
VWLPXODWHDSSUHFLDWLRQIRUQDWXUHDQGWRXULVWV·VDWLVIDFWLRQZLWKJXLGHV
DQGZLWKWRXULVWV·DVVHVVPHQWRI JXLGHSHUIRUPDQFH
*XLGHVZKRVRXJKWWRKHOSYLVLWRUVXVHPXOWLSOHVHQVHVWRXQGHU6
1%B>F-B>F-#L4#'?#>(#->B%2'#-B44#B'#F-%)-J#-*)1%-#@@#(%?E#-?>-#>&B>(6
LQJDSSUHFLDWLRQ)RUH[DPSOHVRPHJXLGHVDVNHGWRXULVWVWRLGHQWL6
@=-4B'%?(2,B'-)F)'1/-12(&-B1-%&#-4,#B1B>%-1*#,,-)@ -EB>?,,B-@')*-(#'%B?>4,B>%1/-B>F-%&#-2>B%%'B(%?E#-1*#,,1-@')*-$BE#,?>B1-TB-%=4#-)@ -!?,F-&)D[/!&?(&-1?D>B,1-%&#?'-'#(#>%-4'#1#>(#"--Y#-@)2>F-B-4)1?%?E#-'#,B%?)>1&?4/!&?(&-!#-1%B%#-B1-B-4')4)1?%?)>H3*XLGHVZKRVHHNWRHQKDQFHWRXULVWV·DSSUHFLDWLRQRI QDWXUH
B'#-&?D&,=-'B%#F-J=-%)2'?1%1-B>F-4')F2(#-&?D&-,#E#,1-)@ -1B%?1@B(6
%?)>-!?%&-%&#-D2?F#"-_>#-D2?F#-1%B%#F-%&B%-B-'#B1)>-&#-%'?#1-%)-&#,4-%)2'?1%1-B44'#(?B%#>B%2'#-B>F-#>$)=-%&#*1#,E#1-?>->B%2'#/-?1-%&B%-&#-J#,?#E#1-%&#=-!?,,-,#B'>PRUHRQWKHWRXUVDQGZLOOVHHNWROHDUQPRUHRQWKHLURZQDIWHUWKHWRXU
!38.7/
U#14?%#- %&#- &?D&- ?*4)'%B>(#- %&B%- *)1%- #()%)2'- D2?F#1- 4,B(#- )>&#,4?>D-E?1?%)'1-F#E#,)4-()>1#'EB%?)>-EB,2#1/-B>F-J#,?#@1-12(&-B1-4#'6
VRQDOVWHZDUGVKLSRI QDWXUHJXLGHVDFWXDOO\GLGOLWWOHWRWU\WRLQÁXHQFH
WKHHWKLFVRI WRXULVWV2QHJXLGHPHQWLRQHGWKDWKH´GRHVQ·WZDQWWR
SUHDFKDWWKHPµ1RULVLWOLNHO\WKDWJXLGHVKDYHHQRXJKWLPHWRDI6
IHFWWRXULVWV·YDOXHVDQGEHOLHIVLQWKHVKRUWWLPHWKH\KDYHZLWKYLVL6
WRUV0RVWWRXUVKDYHDGXUDWLRQRI DERXWWZRKRXUV*XLGHVVWDWHG
WKDWWKH\GREHOLHYHWKDWWRXULVWV·HWKLFVDIIHFWWKHLUDFWXDOEHKDYLRUV
RQWRXUVDQGEDFNDWWKHLUKRPHV
D&8'@.$#
*XLGHVDOVRSODFHDKLJKOHYHORI LPSRUWDQFHRQLQÁXHQFLQJWRXU6
LVWV·EHKDYLRUVSDUWLFXODUO\LQKDYLQJDPLQLPDOLPSDFWRQQDWXUHZKLOH
)>-%)2'1-B>F-)>-1%?*2,B%?>D-E?1?%)'1-%)-&#,4-%)-()>1#'E#->B%2'#-B1-BORQJWHUPDFWLYLW\$JXLGHLQ&RVWD5LFDGHFODUHGWKDW´0\SULPDU\
D)B,-?1-%)-&BE#-%&?1-?*4B(%-)>-4#)4,#/-B>F-?%-*)%?EB%#1-*#-%&#-*)1%XEXW,WDONDERXWLWWKHOHDVWµ2XURYHUDOOÀQGLQJVDUHVLPLODUWRWKDW
FRPPHQW2FFDVLRQDOO\JXLGHVZKRJLYHSUHWRXUWDONVZLOOPHQWLRQ
%&#->##F-%)-B(%-?>-(#'%B?>-!B=1-!&?,#-)>-%)2'1/-12(&-B1-1%B=?>D-)>-%'B?,1"-%XWUDUHO\ZHUHUHDVRQVJLYHQIRUWKLVDQGRWKHUDWWHPSWVWRPLQLPL]H
WRXULVWV·LPSDFWRQQDWXUH
C>-2>#L4#(%#F-)J1#'EB%?)>-(#>%#'1-)>-%&#-'),#-)@ -%?41-@)'-D2?F#1?>-%&#-J#&BE?)'-)@ --?*4B(%-)>->B%2'#"--C44B'#>%,=-%?41-()>1%?%2%#-B-1?D6
QLÀFDQWVRXUFHRI LQFRPHIRUJXLGHVHVSHFLDOO\DWORGJHVWKB%-(B%#'-%)ZHDOWK\GHGLFDWHGHFRWRXULVWVZKRFRPHZLWKVSHFLÀFJRDOVRI ZKDW
%&#=-!B>%-%)-1##"--V)'-#LB*4,#/-1)*#-J?'F#'1-E?1?%-4B'%?(2,B'-B'#B1-%)-
90
('8&$7,21$1'(&27285,60
VHHQDWLRQDOHQGHPLFVSHFLHV,I WKHJXLGHÀQGVDQGVKRZVWKHPWKHVH
d%B'D#%-J?'F1/`-%&#-%?41-(B>-J#-N2?%#-,B'D#"-\&#-4')14#(%-)@ -%?41-(B>-,#BFWRDFRQÁLFWZLWKHGXFDWLRQDOJRDOVFRQFHUQLQJFRQVHUYDWLRQHWKLFVDQG
J#&BE?)'1"--\&#-,#BF-B2%&)'-)J1#'E#F-?1),B%#F-?>1%B>(#1-?>-!&?(&-D2?F#1GLGZKDWHYHULWWRRNWRÀQGDQGVKRZUDUHELUGVWRJXHVWVLQFOXGLQJ
(2%%?>D-)2%-4,B>%1-%)-('#B%#-)4#>?>D1-B>F-4,B=?>D-J?'F-'#()'F?>D1-@)'-B>#L%#>F#F-%?*#-B%-B->#1%-,)(B%?)>-%)-#,?(?%-B-E)(B,-B>F-4&=1?(B,-'#14)>1#@')*-B-%B'D#%-J?'F"--\&#-'#12,%?>D-1%'#11-#L4#'?#>(#F-J=-%&#-J?'F1/-B>FWKHGLVUXSWLRQRI IHHGLQJFKLFNVFDQKDYHQHJDWLYHLPSDFWVRQVXUYLYDO
UDWHV6HNHUFLRJOX
,WDSSHDUVLQVXPPDU\WKDWJXLGHV·DFWXDOEHKDYLRUFORVHO\PDWFKHG
%&#?'-1%B%#F-?*4)'%B>(#-)@ -#F2(B%?)>B,-D)B,1-@)'-'?'#&(&//-B>F-'%%#&7.'B
3.$(/-1)*#!&B%-*B%(&#F-%&#?'-1%B%#F-?*4)'%B>(#-@)'-"(5&#/3'(5.(;/-B>FIHOOVLJQLÀFDQWO\VKRUWRI WKHLUVWDWHGLPSRUWDQFHIRU&38.7/-B>F-9&8'@.$#/"-7KXVRXUÀQDOSURSRVLWLRQLV
3*XLGHVWHQGWRHPSKDVL]HDZDUHQHVVDQGDSSUHFLDWLRQJRDOVDQG
WRGHHPSKDVL]HHWKLFVDQGEHKDYLRUHGXFDWLRQDOJRDOV
&21&/86,216$1'0$1$*(5,$/,03/,&$7,216
MB>=-%=4#1-)@ -#F2(B%?)>B,-)@@#'?>D1-B'#-J#?>D-21#F-?>-#(),)FD#1-?>3DQDPDDQG&RVWD5LFDHVSHFLDOO\LQWKHODWWHUZHOOGHYHORSHGHFRWRXU6
?1*-F#1%?>B%?)>"--]2%-%&#-#F2(B%?)>B,-)@@#'?>D1-?>-J)%&->B%?)>1-B44#B'-%)J#-B'J?%'B'=/-!?%&)2%-B-(,#B'-1#%-)@ -D)B,1-B>F-4,B>1-BJ)2%-#F2(B%?>D-B>FVDWLVI\LQJWKHJXHVWV,GHQWLI\LQJWKHVHJRDOVXQFRYHULQJOLQNDJHVEH6
WZHHQWKHPDQGSURYLGLQJDIUDPHZRUNIRUDQDO\]LQJWKHVHHGXFDWLRQDO
LVVXHVDUHSDUWRI WKLVSURMHFW·VXQLTXHFRQWULEXWLRQVWRWKHOLWHUDWXUH
_!>#'1/- *B>BD#'1/- D2?F#1/- B>F- %)2'?1%1- BD'##- %&B%- %&#- *)1%- ?*6
4)'%B>%-#F2(B%?)>B,-#,#*#>%-B%-#(),)FD#1-?1-D2?F#1-B>F-%&#-%)2'1-%&#=,#BF/-B>F-*B>=-*B>BD#'1-J#,?#E#-%&B%-D2?F#1-B'#-('?%?(B,-%)-%&#-12((#11RI WKHHFRORGJH<HWHYHQWKHXVHRI JXLGHVRIWHQDSSHDUVWREHDUH6
VSRQVHWRWRXULVWV·UHTXHVWVIRUJXLGHVRUDVDPHDQVWRLQFUHDVHUHYH6
>2#/-'B%&#'-%&B>-B>-?>%#>%?)>B,-#,#*#>%-)@ -#F2(B%?>D-%)2'?1%1/-!&?(&-?1B-F?1%?>D2?1&?>D-#,#*#>%-)@ -#()%)2'?1*"--Y#-'#()**#>F-%&B%-#(),)FD#RZQHUVDQGJXLGHVXVHRXUPRGHORI ÀYHHGXFDWLRQDOJRDOVDQGRXW6
()*#1-B1-B-JB1?1-@)'-#EB,2B%?>D-!&B%-%&#=-B'#-(2''#>%,=-F)?>D-?>-%&#?'HGXFDWLRQDOHIIRUWVDQGDVDIUDPHZRUNIRUVWUDWHJLFDOO\DQGLQWHQWLRQ6
B,,=-F#E#,)4?>D-4,B>1-@)'-!&B%-%)-@)(21-)>-?>-%&#-@2%2'#-B>F-!&="--0>SDUWLFXODUHIIRUWVWRHQKDQFHHFRWRXULVWV·XQGHUVWDQGLQJRI WKHEHKDY6
LRUVDQGLQWHUDFWLRQVRI VSHFLHVDUHOLNHO\WRKDYHVRPHRI WKHODUJHVW
HIIHFWVRQYLVLWRUV·XQGHUVWDQGLQJDQGDSSUHFLDWLRQRI QDWXUHDVZHOO
B1-)>-%&#?'-1B%?1@B(%?)>"-K(),)FD#-*B>BD#'1-1&)2,F-(B'#@2,,=-()>1?F#'-%&#?'-#@@)'%1-%)-'#('2?%/%'B?>/-B>F-'#%B?>-D2?F#1/-#14#(?B,,=-()>1?F#'?>D-%&#-EB'?#%=-)@ -'),#1-D2?F#1(B>-BF)4%"--\&#-J#1%-D2?F#1-B'#-@B'-*)'#-%&B>-$21%-D))F-J?'F-B>F-4,B>%-
26/$1'$1'0$&.2<
91
ÀQGHUVDQGLGHQWLÀHUV7KH\KHOSJXHVWVXQGHUVWDQGWKHEHKDYLRUVDQG
?>%#'B(%?)>1-)@ -14#(?#1/-1%?*2,B%#-B44'#(?B%?)>-@)'->B%2'#/-B>F-B%-,#B1%*)F#,-#>E?')>*#>%B,,=-61#>1?%?E#-#%&?(1-B>F-J#&BE?)'1"--V,2#>(=-?>-%&#WDUJHWHGJXHVWV·ODQJXDJHLVFULWLFDOIRUHIIHFWLYHFRPPXQLFDWLRQDERXW
()*4,#L-4&#>)*#>B"--\&#-,)FD#1-%&B%-&BE#-J##>-*)1%-#@@#(%?E#-?>-'#6
%B?>?>D-)2%1%B>F?>D-D2?F#1-B,1)-()*4#>1B%#-%&#*-!#,,"--\&?1-?>(,2F#1D#>#')21-1B,B'?#1/-%'B?>?>D-)44)'%2>?%?#1/-B>F-%'?41-%)-)%&#'-()2>%'?#1ZKHQGRLQJSURPRWLRQ2QH&RVWD5LFDQFRPSDQ\ZLWKVHYHUDOORGJ6
HVRIIHUVDQDQQXDOUHWUHDWZLWKZRUNVKRSVDQGVSHDNHUVIRUWKHLUHP6
4,)=#F-B>F-()>%'B(%#F-D2?F#1"
2QHVSHFLÀFFRQWHQWDUHDWRFRQVLGHULQWHJUDWLQJLQWRHGXFDWLRQDO
#@@)'%1-?1-%&#-,)(B,-(2,%2'#"--Y#-@)2>F-,?%%,#-#E?F#>(#-%&B%-D2?F#1-&#,4D2#1%1-,#B'>-BJ)2%-(2,%2'#/-?>(,2F?>D-J)%&-?>F?D#>)21-4#)4,#1-B>F-!B=1WKDWKXPDQVKDYHLQWHUDFWHGZLWKRWKHUVSHFLHVDQGWKHODQG6HHNLQJ
%)-#>&B>(#-B!B'#>#11/-2>F#'1%B>F?>D/-B>F-B44'#(?B%?)>-@)'-,)(B,-(2,%2'#B'#-4')*?1?>D-)44)'%2>?%?#1-@)'-#(),)FD#1-%)-?*4,#*#>%/-B>F-!)2,FJ#-()>1?1%#>%-!?%&-%&#-?F#B,1-)@ -#()%)2'?1*/-!&?(&-?>%#D'B%#-%&#-,)(B,()**2>?%=-TV#>>#,,/-9::3["C,1)/-F#E#,)4?>D-1%'B%#D?#1-@)'-BFF'#11?>D-#%&?(1-B>F-J#&BE?)'-#F26
FDWLRQDOJRDOVDSSHDUVWREHDWDVNXSRQZKLFKPDQDJHUVVKRXOGUHÁHFW
)RUH[DPSOHQDWXUHJXLGHVVHHPWRXQGHUHPSKDVL]HWKHVHWZRDUHDV
F#14?%#-'B%?>D-%&#?'-?*4)'%B>(#-N2?%#-&?D&,="--MB>BD#'1-*?D&%-@)(21)>-2>()E#'?>D-D2?F#-dJ#1%-4'B(%?(#1`-?>-%&#1#-B'#B1-1)-%&#1#-*B=-J#F?11#*?>B%#F-%)-)%&#'-D2?F#1"--0>-BFF?%?)>/-*B>BD#'1-*?D&%-%'=-%)-J),6
1%#'-)%&#'-'#,#EB>%-#F2(B%?)>B,-B(%?E?%?#1-!?%&?>-%&#-,)FD#/-)'-?>-4'#-6-)'SRVWYLVLWFRPPXQLFDWLRQZLWKWRXULVWV+RZHYHUZHUHFRJQL]HWKDW
DGGUHVVLQJWKHVHWZRHGXFDWLRQDOJRDOVPD\EHSHUFHLYHGDVULVN\E\
*B>BD#'1-J#(B21#-B%%#*4%1-%)-(&B>D#-#%&?(1-B>F-J#&BE?)'-)@%#>-*?D&%B44#B'-&#BE=-6&B>F#F-%)-%)2'?1%1":H SURSRVH WKDW WKH IUDPHZRUN LQWURGXFHG KHUH FDQ VHUYH DV D
1%'2(%2'#-@)'-F#E#,)4?>D-B>F-%#1%?>D-#F2(B%?)>B,-)@@#'?>D1-?>-B-()*6
SUHKHQVLYHPDQQHU8OWLPDWHO\WKLVFRXOGVXSSRUWDFDWDORJRI SRVVL6
J,#-()1%-6#@@#(%?E#-#F2(B%?)>B,-)@@#'?>D1-!&?(&-(B>-J#-%B'D#%#F-%)!B'F1VSHFLÀFHGXFDWLRQDOREMHFWLYHVDQGWKXVFDQEHFRPHDYDOXDEOHWRROWR
HFRWRXULVPPDQDJHUVDQGSROLF\PDNHUV
5()(5(1&(6
%DOODQW\QH5+XJKHV.,QWHUSUHWDWLRQLQHFRWRXULVP
VHWWLQJV,QYHVWLJDWLQJWRXUJXLGHV·SHUFHSWLRQVRI WKHLUUROHUHVSRQ6
1?J?,?%?#1/-B>F-%'B?>?>D->##F1"-*$"#('+)$, )-$"#./0)E3"5.&/1)FGHGI1-.-67"
%DWWD51(YDOXDWLQJHFRWRXULVPLQP)2>%B?>-B'#B1H-C1%2F=-)@ -%&'##-G?*B,B=B>-F#1%?>B%?)>1"-J(3&#('3.$('+)6&@.&?),$#)!(@.#$(B
0&(3'+)E3#'3&;.&/1)KHFI/-83-6^9"
92
('8&$7,21$1'(&27285,60
%ODPH\5.(FRWRXULVP7KHVHDUFKIRUDQRSHUDWLRQDO
GHÀQLWLRQ*$"#('+)$, )E"/3'.('9+&)-$"#./01)LHGI/-3:7-63.:"
%RQQ0$-RVHSK0DWKHZV60'DL0+D\HV6&DYH-
+HULWDJHFXOWXUDODWWUDFWLRQDWPRVSKHULFV&UHDWLQJWKHULJKW
HQYLURQPHQWIRUWKHKHULWDJHFXOWXUDOYLVLWRU*$"#('+)$, )-#'@&+)6&/&'#78/8eT.[/-.8e-6.e8"
%RZHQ ' 5HVHDUFK WKURXJK SDUWLFLSDQW REVHUYDWLRQ LQ
%)2'?1*H-C-('#B%?E#-1),2%?)>-%)-%&#-*#B12'#*#>%-)@ -()>12*#'-1B%?16
IDFWLRQ GLVVDWLVIDFWLRQ &6' DPRQJ WRXULVWV *$"#('+) $, ) -#'@&+) 6&B
/&'#781)MFHFI/-8-638"
]'B*!#,,/-]"/-a-AB>#/-]"-T377.["-0>%#'4'#%B%?)>-B>F-121%B?>BJ,#-%)2'6
?1*H-\&#-4)%#>%?B,-B>F-4?%@B,,1"-*$"#('+)$, )E"/3'.('9+&)-$"#./01)FHGI/-53-6Z:"&HEDOORV/DVFXUDLQ+7RXULVPHFRWRXULVPDQGSURWHFWHG
B'#B1"-3DUNV/-.3-6.e"
&KDQ-%DXP7(FRWRXULVWV·SHUFHSWLRQVRI HFRWRXU6
?1*-#L4#'?#>(#-?>-,)!#'-c?>BJB%B>DB>/-WBJB,/-MB,B=1?B"-*$"#('+)$, )E"/B
3'.('9+&)-$"#./01)FLHLI1-e58-6e7:"
&KDZOD//LIHSDWKVLQWRHIIHFWLYHHQYLURQPHQWDODFWLRQ
*$"#('+)$, )!(@.#$(0&(3'+)!5"7'3.$(1-NFHFI/-3e-69^"'RQRKRH+01HHGKDP5'(FRWRXULVP7KHHYROY6
LQJFRQWHPSRUDU\GHÀQLWLRQ*$"#('+)$, )!7$3$"#./01)LHNI/-379-693:
'RZOLQJ5.)HQQHOO'$7KHFRQWH[WRI HFRWRXULVP
SROLF\DQGSODQQLQJ,Q'$)HQQHOODQG5.'RZOLQJ(GV!7$3$"#B
LVP3ROLF\DQG3ODQQLQJT44O):DOOLQJIRUG8.&$%,
)HQQHOO'$$FRQWHQWDQDO\VLVRI HFRWRXULVPGHÀQLWLRQV<"#B
#&(3)J//"&/).()-$"#./01)MHLI/-8:.-6893"
*LOEHUW5(FRWRXULVPDQGHGXFDWLRQIRUVXVWDLQDELOLW\$FULWLFDO
B44')B(&"--J(3&#('3.$('+)6&@.&?),$#)!(@.#$(0&(3'+)E3#'3&;.&/1)MHFI1-5e-6Z."
GB*/-W"-G"-T3779["-!(@.#$(0&(3'+).(3&#%#&3'3.$(*ROGHQ&2)XOFUXP3XE6
,?1&?>D"
G2D&#1/-M"/-a-M)''?1)>-6WB2>F#'1/-C"-T9::9["-0*4B(%-)@ -%'B?,-61?F#-?>6
WHUSUHWLYHVLJQVRQYLVLWRUNQRZOHGJH*$"#('+)$, )!7$3$"#./0/-FHG)BNI/-399-63.9"
bB*B,/-\"-]"-T9::8["-+?'%2#-#%&?(1-B>F-121%B?>BJ,#-%)2'?1*-4#FBD)6
D=H- <&')>#1?1/- 4'?>(?4,#1/- B>F- 4'B(%?(#"- *$"#('+) $, ) E"/3'.('9+&) -$"#./0/FGHKI/-e.:-6e8e"
.LPPHO-5(FRWRXULVPDVHQYLURQPHQWDOOHDUQLQJ*$"#('+)
$, )!(@.#$(0&(3'+)!5"7'3.$(/-.9/-8:-688".ZDQ 3 (DJOH 3 *HEKDUGW $ $ FRPSDULVRQ RI HFRORGJHSDWURQV·FKDUDFWHULVWLFVDQGPRWLYDWLRQVEDVHGRQSULFHOHY6
#,1H-C-(B1#-1%2G\RI %HOL]H*$"#('+)$, )E"/3'.('9+&)-$"#./0/-FKHKI/-^7Z-653Z"
AX-1HSDO6.6XVWDLQDEOHWRXULVPUHVHDUFK$QDQDO6
=1?1-)@ -4B4#'1-42J,?1&#F-?>-%&#-b)2'>B,-)@ -W21%B?>BJ,#-\)2'?1*"-*$"#('+)
$, )E"/3'.('9+&)-$"#./01)FPHFI/-e-63^"-
26/$1'$1'0$&.2<
93
MBF?>/-K"/-V#>%)>/-U"-M"-T9::8["-K>E?')>*#>%B,-?>%#'4'#%B%?)>-?>WKH*UHDW%DUULHU5HHI 0DULQH3DUN$QDVVHVVPHQWRI SURJUDPPHHI6
@#(%?E#>#11"-*$"#('+)$, )E"/3'.('9+&)-$"#./0/-FGHGI/-393-63.5"
0DULRQ-/5HLG6(0LQLPLVLQJYLVLWRULPSDFWVWR
SURWHFWHGDUHDV7KHHIÀFDF\RI ORZLPSDFWHGXFDWLRQSURJUDPPHV
*$"#('+)$, )E"/3'.('9+&)-$"#./01)FLHFI/-e-695"
M?,#1/-b"-T3773["-+?#!4)?>%H-\#B(&?>D-?>-!?,F#'>#11"-*$"#('+)$, )!(@.B
#$(0&(3'+)!5"7'3.$(1)GGHMI/-e-67"
0RRUH.'6LOHQFHOLNHVFRXULQJVDQG=#.$(1RY'HF
0\HUV10LWWHUPHLHU5$0LWWHUPHLHU'*)RQVHFD*$
]"/-a-c#>%/-b"-T9:::["--]?)F?E#'1?%=-&)%14)%1-@)'-()>1#'EB%?)>-4'?)'?%?#1"Q'3"#&1-MRNHGMI/-Ze.-6ZeZ"
_'B*1/-M"]"-T377^["-C-()>(#4%2B,-*)F#,-)@ -%)2'?1%-6!?,F,?@#-?>%#'6
B(%?)>H-\&#-(B1#-@)'-#F2(B%?)>-B1-B-*B>BD#*#>%-1%'B%#D="-A"/3#'+.'()
>&$;#'%8&#1-GPHFI/-.7-6e3"
2VODQG*(0DFNR\5(FRORGJHSHUIRUPDQFHJRDOV
B>F-#EB,2B%?)>1"-*$"#('+)$, )!7$3$"#./0/-NHGI/-3:7-639Z"
<B,*#'/-b"-T377Z["-!(@.#$(0&(3'+)&5"7'3.$().()38&)GF/3)7&(3"#4S)-8&$#41)%#'7B
3.7&1)%#$;#&//1)'(5)%#$0./&O1HZ<RUN5RXWOHGJH
3HDNH6,QQHV3'\HU3(FRWRXULVPDQGFRQVHUYD6
WLRQ )DFWRUV LQÁXHQFLQJ HIIHFWLYH FRQVHUYDWLRQ PHVVDJHV *$"#('+) $, )
E"/3'.('9+&)-$"#./01)FPHFI/-3:5-6395"
3ULPDFN5%A)%#.0&#)$, )7$(/&#@'3.$()9.$+$;4"-W2>F#',B>F/MCH-W?>B2#'-C11)(?B%#1"
5RGJHU.0RRUH6$1HZVRPH':LOGOLIHWRXUVLQ
$XVWUDOLD&KDUDFWHULVWLFVWKHSODFHRI VFLHQFHDQGVXVWDLQDEOHIXWXUHV
*$"#('+)$, )E"/3'.('9+&)-$"#./01)FLHGI/-3^:-6357"
5RPH$5RPHUR%(QKDQFLQJFRQVHUYDWLRQHGXFDWLRQ
)44)'%2>?%?#1-?>->B%2'#-'#1#'E#1-?>-%')4?(B,-()2>%'?#1H-C-(B1#-1%2F=-?>%HOL]H*$"#('+)$, )!(@.#$(0&(3'+)!5"7'3.$(1)NRHFI/-.8-6.5"
5\DQ&+XJKHV.&KLUJZLQ67KHJD]HVSHFWDFOH
B>F-#()%)2'?1*"-A(('+/)$, )-$"#./0)6&/&'#781)GPHFI/-38Z-63^."
6FKLDQHW]..DYDQDXJK/6XVWDLQDELOLW\LQGLFDWRUVIRU
%)2'?1*-F#1%?>B%?)>1H-C-()*4,#L-BFB4%?E#-1=1%#*1-B44')B(&-21?>D-1=16
%#*?(-?>F?(B%)'-*#%&)F1"-*$"#('+)$, )E"/3'.('9+&)-$"#./01)FKHKI/-^:3-6^9Z"
6HNHUFLRJOX&,PSDFWVRI ELUGZDWFKLQJRQKXPDQDQGDYL6
B>-()**2>?%?#1"-!(@.#$(0&(3'+)<$(/&#@'3.$(1)GTHNI/-9Z9-69Z7"
\&#-0>%#'>B%?)>B,-K()%)2'?1*-W)(?#%=-T377.["-!7$3$"#./0);".5&+.(&/),$#)
('3"#&)3$"#)$%&#'3$#/1RUWK%HQQLQJWRQ977KH,QWHUQDWLRQDO(FRW6
)2'?1*-W)(?#%="7LVGHOO&:LOVRQ&3HUFHLYHGLPSDFWVRI HFRWRXULVP
)>-#>E?')>*#>%B,-,#B'>?>D-B>F-()>1#'EB%?)>H-\2'%,#-!B%(&?>D-B1-B-(B1#1%2F="--!(@.#$(0&(31)U&@&+$%0&(31)'(5)E"/3'.('9.+.341)P/-973-6.:9"
94
('8&$7,21$1'(&27285,60
8QLWHG1DWLRQV:RUOG(FRWRXULVP6XPPLW)LQDOUHSRUW5H6
WULHYHGIURPKWWSZZZHFRWRXULVPRUJDQJODLVLQGH[BDKWPO"
Y#BE#'/-U"-T9::Z["-!7$3$"#./0O-Y?,%)>/-C21%'B,?BH-b)&>-Y?,#=-a-W)>1C21%'B,?B/-A%F"Y#?,#'/-]"/-a-GB*/-W"-T9::3["-\)2'-D2?F#1-B>F-?>%#'4'#%B%?)>-?>-#()6
%)2'?1*"-0>-U"-Y#BE#'-T#F"[/-!(747+$%&5.')$, )&7$3$"#./01)T44"-e87-6e^.["
:DOOLQJIRUG8.&$%,
Y#?,#'/-]"/-a-W*?%&/-A"-T9::7["-U)#1-*)'#-?>%#'4'#%B%?)>-,#BF-%)-D'#B%#'RXWFRPHV"$QDVVHVVPHQWRI WKHLPSDFWVRI PXOWLSOHOD\HUVRI LQWHUSUHWD6
WLRQLQD]RRFRQWH[W*$"#('+)$, )E"/3'.('9+&)-$"#./01)FPHFI/-73-63:e"
=DQRWWL/&KHUQHOD-&RQÁLFWLQJFXOWXUHVRI QDWXUH
(FRWRXULVPHGXFDWLRQDQG.D\DSRRI WKH%UD]LOLDQ$PD]RQ-$"#./0)
>&$;#'%8.&/1)FRHMI/-87e-6e93
E"90.33&5S)M38)*'("'#4)GRFG)))))))))))))))))))))))))A77&%3&5S)GR38)V&9#"'#4)GRFG
V.('+)@&#/.$(S)FN38)V&9#"'#4)GRFG)))))))))))))))))6&,&#&&5)'($(40$"/+4