$QRWKHU(XURSHDQ$XWRPDNHU+DV86(PLVVLRQV3UREOHPRI,WV2ZQ%ORRPEHUJ%XVLQHVV

$QRWKHU(XURSHDQ$XWRPDNHU+DV86
(PLVVLRQV3UREOHPRI,WV2ZQ
-RKQ/LSSHUW  -HII3OXQJLV
MRKQPOLSSHUW MSOXQJLV
-DQXDU\$0(67 8SGDWHGRQ-DQXDU\$0(67

)LDW&KU\VOHUZDVODVWLQ(3$UDQNLQJIRUIRXUWKVWUDLJKW\HDU

&RPSDQ\DOVRQHHGHGFUHGLWVWRPHHWIXHOHFRQRP\WDUJHWV

/RVWDPLGWKHLQWHQVHVFUXWLQ\RIHPLVVLRQVWHVWVDW9RONVZDJHQ$*DQG5HQDXOW6$LVWKHIDFWWKDWDQRWKHU
(XURSHDQDXWRPRWLYHSRZHUKRXVH)LDW&KU\VOHU$XWRPRELOHV19LVDOVRLQDWLJKWVSRWZLWKUHJXODWRUV

1RWIRUSRVVLEOHFKHDWLQJ)DUIURPLW)&$VSUREOHPLVWKDWLWVHPLVVLRQVUHFRUGLQWKH86LVEDGDQG
WLPHWRIL[LWLVUXQQLQJVKRUW

)RUWKHIRXUWKFRQVHFXWLYH\HDUWKHPDNHURI5DPSLFNXSVDQG-HHSVSRUWXWLOLW\YHKLFOHVILQLVKHGGHDGODVW
LQD(QYLURQPHQWDO3URWHFWLRQ$JHQF\UDQNLQJRIFDUERQGLR[LGHHPLVVLRQVDPRQJELJDXWR
PDQXIDFWXUHUV$QGWKHDJHQF\SODQVWRDFFHOHUDWHLWV&2WDUJHWVVKDUSO\EHJLQQLQJQH[W\HDU

7RFRPSO\)&$PXVWLPSURYHIDVWHUWKDQELJJHUDQGULFKHUULYDOVZKRDOVRDUHVWUDLQLQJWRFXWHPLVVLRQV
)DLOLQJWKDWLWPLJKWEHIRUFHGWRVWRSEXLOGLQJVRPHRIWKHOLJKWGXW\WUXFNV%ORRPEHUJ,QWHOOLJHQFH
DQDO\VW.HYLQ7\QDQVD\VGHOLYHUSHUFHQWRILWVSURILW2UWRNHHSPDNLQJWKHPLWFRXOGEHIRUFHGLQWRD
PHUJHU

KWWSZZZEORRPEHUJFRPQHZVDUWLFOHVHXURSHVRWKHUDXWRPDNHUKDVXVHPLVVLRQVSUREOHPRILWVRZQ 
 $QRWKHU(XURSHDQ$XWRPDNHU+DV86(PLVVLRQV3UREOHPRI,WV2ZQ%ORRPEHUJ%XVLQHVV

)&$GRHVQWKDYHWKHUHVRXUFHVWRIXOILOOWKHHPLVVLRQVUHTXLUHPHQWVVDLG0DU\DQQ.HOOHUDQ
LQGHSHQGHQWDXWRLQGXVWU\FRQVXOWDQWLQ6WDPIRUG&RQQHFWLFXW,WVQRWDFRPSDQ\WKDWFDQVXUYLYHLQLWV
SUHVHQWIRUP

7RILJKWJOREDOZDUPLQJWKH(3$ZLOOFDSWDLOSLSH&2DWJUDPVSHUPLOHLQ)&$UHSRUWHGDQ
DYHUDJHJUDPVSHUPLOHLQFRPSDUHGZLWKIRULQGXVWU\OHDGLQJ0D]GD0RWRU&RUS

7RXJKHU)XHO(FRQRP\5HTXLUHPHQWV

7KH/RQGRQEDVHGFRPSDQ\DOVRIDFHVWRXJKHUIXHOHFRQRP\WDUJHWVE\7KH(3$UHTXLUHV
DXWRPDNHUVWRERRVWDYHUDJHPLOHVSHUJDOORQSHUFHQWWR0HDQZKLOH&DOLIRUQLDUHTXLUHVDVPXFKDV
SHUFHQWRIVDOHVFRPHIURP]HURHPLVVLRQYHKLFOHVSRZHUHGE\IXHOFHOOVRUEDWWHULHV

&KLHI([HFXWLYH2IILFHU6HUJLR0DUFKLRQQHGHVFULEHVWKHVHPDQGDWHVDVERWKH[SHQVLYHDQGDQH[LVWHQWLDO
WKUHDW+HKDVEHHQVD\LQJVLQFHIDOOWKDWDXWRPDNHUVVKRXOGIDFHWKHFKDOOHQJHVDQGERRVWFKURQLFDOO\
ORZSURILWVE\PHUJLQJ*HQHUDO0RWRUV&RZKLFKKHKDVPDLQO\IRFXVHGRQVDLGQR

1RERG\QHHGVDPHUJHUZLWK&KU\VOHU.HOOHUVDLG

7KH(XURSHDQHPLVVLRQVVFDQGDOZLGHQHG7XHVGD\LQWKHPLGVWRI9RONVZDJHQVFKHDWLQJFULVLVZKHQ
5HQDXOWVDLGLWZLOOUHFDOOYHKLFOHVDQGPDNHXSJUDGHGSROOXWLRQFRQWUROV\VWHPVDYDLODEOHWRDERXW
FXVWRPHUV7KHFDUPDNHUKDVORVWPRUHWKDQELOOLRQHXURVELOOLRQLQPDUNHWYDOXHVLQFH
QHZVEURNHWKDWJRYHUQPHQWIUDXGLQYHVWLJDWRUVVHDUFKHGWKUHHRILWVRIILFHVLQ)UDQFHRQ-DQ

5HO\RQ5DP

)&$KDVVWUXJJOHGWRPHHWIXHOHIILFLHQF\UHTXLUHPHQWVVLQFHWKH86ILUVWVHWWKHPLQZKHQ)LDWDQG
&KU\VOHUZHUHVHSDUDWHFRPSDQLHV7RGD\LWUHOLHVRQ5DPV-HHSVDQGPLQLYDQV:LWKJDVROLQHDWDERXW
DJDOORQSHUFHQWRILWV86VDOHVYROXPHFRPHVIURPOLJKWGXW\WUXFNVFRPSDUHGZLWKSHUFHQWDW*0
DQGSHUFHQWDW)RUG0RWRU&RDFFRUGLQJWR$XWRGDWD&RUS

,WVWUXFNIXHOHFRQRP\ZDVZRUVHWKDQ*0VLQWKHPRGHO\HDUDFFRUGLQJWR(3$GDWDZLWKSLFNXSV
DYHUDJLQJPSJFRPSDUHGZLWK7KLVH[FOXGHVWZRZKHHOGULYHFRPSDFW689VWKDWKHOSERRVW
UDWLQJVZKLFKDFFRXQWHGIRUSHUFHQWRI)&$VIOHHWDQGSHUFHQWRI*0V

7RRIIVHWWKHGUDJRQIXHOHIILFLHQF\)&$XVHVFUHGLWVWKH(3$RIIHUVIRUJUHHQWHFKQRORJLHVLWDOVREX\V
FUHGLWVIURPFRPSHWLWRUVZKRPHHWWKHWDUJHWV,WERXJKWPLOOLRQVL[WLPHVPRUHWKDQWKHVHFRQGELJJHVW
EX\HUVLQWKHILYH\HDUVHQGLQJDFFRUGLQJWRDQ(3$FRPSDULVRQ,QWKHDQGPRGHO\HDUV
LWSXUFKDVHGPLOOLRQIURP7HVOD0RWRUV,QF7R\RWD0RWRU&RUS+RQGD0RWRU&RDQG1LVVDQ0RWRU
KWWSZZZEORRPEHUJFRPQHZVDUWLFOHVHXURSHVRWKHUDXWRPDNHUKDVXVHPLVVLRQVSUREOHPRILWVRZQ 
 $QRWKHU(XURSHDQ$XWRPDNHU+DV86(PLVVLRQV3UREOHPRI,WV2ZQ%ORRPEHUJ%XVLQHVV

&RDOVRVROGFUHGLWVGXULQJWKHILYH\HDUSHULRGWKHUHSRUWVDLG

3ULFHRI&UHGLWV

1HLWKHUWKHDJHQF\QRU)&$VSRNHVPDQ(ULF0D\QHZRXOGGLVFORVHWKHSULFHEXWSHRSOHIDPLOLDUZLWKVXFK
WUDQVDFWLRQVVDLGLWZDVDERXWPLOOLRQEDVHGRQJRLQJUDWHV

7KH(3$UHSRUWUHYHDOV)&$VVWUDWHJ\VRIDU,QWKHFRPSDQ\PDGHQRXVHRIFUHGLWVIRUVHOOLQJ
SOXJLQRU]HURHPLVVLRQPRGHOV,QVWHDGLWHDUQHGPRUHWKDQDQ\RWKHUDXWRPDNHUE\VHOOLQJYHKLFOHV
UXQQLQJRQIXHOFRQWDLQLQJDVPXFKDVSHUFHQWHWKDQRODQGE\PDNLQJDLUFRQGLWLRQLQJDQGLQWHULRU
YHQWLODWLRQPRUHHIILFLHQW

)&$KDGPLOOLRQFUHGLWVVDYHGXSE\6HSWHPEHUWKHODWHVWGDWHIRUZKLFKGDWDDUHDYDLODEOH%XW
DVUHJXODWRUVWLJKWHQ&2OLPLWVWKHFUHGLWVDUHJHWWLQJVFDUFHUDQGPRUHH[SHQVLYHWKHSHRSOHIDPLOLDU
ZLWKWKHPDUNHWVDLG

3RVVLEOH)LQHV

7KH(3$GRHVQWOHY\ILQHVIRUH[FHVVLYH&2EXWLWVUXOHVPLJKWFDXVH)&$WRUHWKLQNLWVGHSHQGHQFHRQ
OLJKWGXW\WUXFNV$QGLIWKHFRPSDQ\FRQWLQXHVODJJLQJRQIXHOHFRQRP\LWULVNVSD\LQJILQHVWRWKH
1DWLRQDO+LJKZD\7UDIILF6DIHW\$GPLQLVWUDWLRQ7KHVHFRXOGWRWDOSHUYHKLFOHIRUHYHU\PLOHSHU
JDOORQRIQRQFRPSOLDQFHZLWKWKH(3$WDUJHW:KDWHYHUKDSSHQVWKHFRPSDQ\LQWHQGVWRFRPSO\ZLWK
ERWKPDQGDWHV0D\QHVDLG

6RIDUWKH(3$KDVVKRZQQRLQWHUHVWLQEHQGLQJUXOHVIRU)&$RUDQ\ERG\HOVHVLQFHWRWDOLQGXVWU\
FRPSOLDQFHZDVDKHDGRIVFKHGXOHIRU

7KHUHVXOWVKDYHEHHQQRWKLQJVKRUWRIVSHFWDFXODU&KULVWRSKHU*UXQGOHU(3$VGLUHFWRURIWKH2IILFHRI
7UDQVSRUWDWLRQDQG$LU4XDOLW\VDLGGXULQJD-DQVSHHFKLQ'HWURLW

)&$VUHODWLRQVZLWKIHGHUDOUHJXODWRUVDOUHDG\DUHVWUDLQHGMXVWDVLWVILJKWLQJDFFXVDWLRQVZKLFKLW
GHQLHVWKDWLWHQFRXUDJHG86GHDOHUVWRIDOVLI\VDOHV/DVW\HDU1+76$ILQHGWKHFRPSDQ\DWKHQUHFRUG
PLOOLRQIRUGUDJJLQJLWVIHHWRQVDIHW\UHFDOOV7KHFRPSDQ\VTXDOLW\UHSXWDWLRQLVVXIIHULQJWRR,W
UDQNHGODVWLQWKH-'3RZHU $VVRFLDWHVVXUYH\RQTXDOLW\DIWHUGD\VRIRZQHUVKLSSDUWO\
EHFDXVHRIFRPSODLQWVDERXWQLQHVSHHGWUDQVPLVVLRQVLWLQVWDOOHGWRUHGXFH&2HPLVVLRQV

&HQWUDO5ROH

:LWKQHZPRGHOVVXFKDVWKH5HQHJDGH6890DUFKLRQQHERRVWHG-HHSVDOHVLQWKH86E\SHUFHQW
GXULQJ$QGKHVJLYHQ-HHSDFHQWUDOUROHLQKLVSODQWRWULSOHQHWLQFRPHWRDERXWELOOLRQHXURVE\
KWWSZZZEORRPEHUJFRPQHZVDUWLFOHVHXURSHVRWKHUDXWRPDNHUKDVXVHPLVVLRQVSUREOHPRILWVRZQ 
 $QRWKHU(XURSHDQ$XWRPDNHU+DV86(PLVVLRQV3UREOHPRI,WV2ZQ%ORRPEHUJ%XVLQHVV
GXULQJ$QGKHVJLYHQ-HHSDFHQWUDOUROHLQKLVSODQWRWULSOHQHWLQFRPHWRDERXWELOOLRQHXURVE\
(YHQVR)&$VWLOOFDQVDWLVI\IXWXUHJRYHUQPHQWPDQGDWHVE\DPRQJRWKHUWKLQJVFXWWLQJHPLVVLRQV
IURPSLFNXSVKHVDLG-DQDWWKH1RUWK$PHULFDQ,QWHUQDWLRQDO$XWR6KRZLQ'HWURLW+HVSODQQLQJD
SOXJLQPLQLYDQDQGDOUHDG\VHOOVWKH)LDW(EDWWHU\SRZHUHGFDULQ&DOLIRUQLDDQG2UHJRQ

0DUFKLRQQHVULYDOVDUHPRYLQJIDVWHU)RUGZKLFKLVDWKLUGELJJHUPDNHVVL[HOHFWULFVDQGK\EULGVQRZ
DQGVDLGODVWPRQWKLWZLOOVSHQGELOOLRQWRGHYHORSPRUHE\$QG*0VD\VLWVQHZ
&KHYUROHW%ROWHOHFWULFFDUZLOOJRPRUHWKDQPLOHVNLORPHWHUVRQDFKDUJHFORVHWRWKH
UDQJHRI7HVODV0RGHO6

:DWFK1H[W)LDW&KU\VOHU6XHG2YHU)DOVH6DOHV

)LDW&KU\VOHU6XHG2YHU)DOVH6DOHV

%HIRUHLW
VKHUHLW
VRQWKH%ORRPEHUJ7HUPLQDO

(XURSH

$LUEXV'HOLYHUV,WV1HZ3ODQH$OPRVW1R
KWWSZZZEORRPEHUJFRPQHZVDUWLFOHVHXURSHVRWKHUDXWRPDNHUKDVXVHPLVVLRQVSUREOHPRILWVRZQ