1XWULWLRQDOSRVVLELOLWLHVWRUHGXFH WKH1DQG3H[FUHWLRQRISLJV
$UHYLHZ
&V6]DEy/%DELQV]N\-7RVVHQEHUJHU
8QLYHUVLW\RI.DSRVYiU)DFXOW\RI$QLPDO6FLHQFH'HSDUWPHQWRI$QLPDO1XWULWLRQ .DSRVYiU+*XED6iQGRUX+XQJDU\
$%675$&7
0DQXUHGLVSRVDOLVDPDMRUSUREOHPLQKLJKO\LQWHQVLYHSLJSURGXFWLRQDUHDVHVSHFLDOO\
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
DQGOHJLVODWLRQLVQRWIRUHVHHQWKHGLHWDU\LQFOXVLRQRIPLFURELDOSK\WDVHZLOOGHSHQGRQ HFRQRPLFDOFRQVLGHUDWLRQV
.H\ZRUGVSKRVSKRUXVQLWURJHQSLJH[FUHWLRQ ,1752'8&7,21
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iU)DFXOW\RI$QLPDO6FLHQFH.DSRVYiU
6FKZHULQJDQG+DUWRJ7DEOHVKRZVWKHHVWLPDWHG1DQG3H[FUHWLRQRISLJV EURLOHUVDQGOD\LQJKHQVLQ+XQJDU\
7DEOH
(VWLPDWHG1DQG3H[FUHWLRQRISLJVEURLOHUV DQGOD\LQJKHQVLQ+XQJDU\LQ
6RZV )DWWHQLQJSLJV 3LJOHWV 7RWDO /D\LQJKHQV %URLOHUV 7RWDO
1H[FUHWLRQDNJ\HDUKHDG
7RWDO1H[FUHWLRQEW\HDU
3H[FUHWLRQDNJ\HDUKHDG
7RWDO3H[FUHWLRQEW\HDU
D-RQJEORHG DQG /HQLV E%DVHG RQ -RQJEORHG DQG /HQLV DQG 6WDWLVWLFDO
<HDUERRNRI+XQJDU\
$VLQJOHSLJLQWKHWRNJOLYHZHLJKWUDQJHFRQVXPHNJ1EXWRQO\NJ1 XVHGIRUPDLQWHQDQFHDQGWLVVXHDFFUHWLRQ-RQJEORHGDQG/HQLV7KHUHPDLQLQJ QLWURJHQLVH[FUHWHGYLDIDHFHVDQGXULQHLQWRWKHHQYLURQPHQW,QWKHFDVHRISKRVSKRUXV ZHFDQFDOFXODWHZLWKNJLQWDNHGXULQJIDWWHQLQJSHULRGDQGZLWKNJH[FUHWLRQ,Q WRWDODERXWWRQ1DQGWRQ3FDQSRWHQWLDOO\SROOXWHWKHHQYLURQPHQW\HDUO\
IURPWKHSLJDQGSRXOWU\VHFWRU7KHUHIRUHLWLVLPSRUWDQWWRUHGXFHWKHDPRXQWRIWKHVH HOHPHQWVLQWKHPDQXUHDQGXULQH
7KHDFWXDO1DQ3HPLVVLRQGHSHQGVRQPDQ\IDFWRUVWKHUHIRUHLQWKLVSDSHUZH DLP WR GLVFXVV WKH QXWULWLRQDO SRVVLELOLWLHV WR UHGXFH WKH 1 DQG 3 H[FUHWLRQ RI SLJ RSHUDWLRQVLQ+XQJDU\
5('8&,1*1,752*(1(;&5(7,21
7KHILUVWDSSURDFKIRULPSURYLQJWKHHIILFLHQF\RI1XWLOLVDWLRQE\WKHSLJVLVWRHQVXUH WKDWWKHVXSSO\LVDWDOOWLPHVDSSURSULDWHIRUJURZWKSRWHQWLDORIWKHDQLPDOVRUWRWKHLU SK\VLRORJLFDOQHHGV7KHGLJHVWLELOLW\RIGLHWDU\SURWHLQVDQGDPLQRDFLGVZDVIRUDORQJ WLPHH[SUHVVHGE\PHDQVRIWKHDSSDUHQWGLJHVWLRQFRHIILFLHQWPHDVXUHGIURPWKHIDHFHV VLPLODUO\WRWKDWRIRWKHUQXWULHQWV+RZHYHUUHVXOWVREWDLQHGIURPGLJHVWLRQSK\VLRORJ\
UHVHDUFKSURYHWKDW EDFWHULDO IORUD LQ WKH FRORQ QRW RQO\ V\QWKHWLVHV SURWHLQ EXW DW WKH VDPHWLPHFDWDEROLVHVLW7KLVLVZK\GLJHVWLELOLW\RIGLHWDU\SURWHLQVPHDVXUHGIURPWKH IDHFHVXQGHUHVWLPDWHVWKHDFWXDOYDOXHLQVRPHFDVHVZKLOHLQRWKHUVRYHUHVWLPDWHVWKLV YDOXH6FKU|GHU
)RU WKLV UHDVRQ LQ D QXPEHU RI ZHVWHUQ (XURSHDQ DQG QRUWK $PHULFDQ FRXQWULHV FDOFXODWLRQV DUH EDVHG XSRQ WKH LOHDO GLJHVWLELOLW\ RI SURWHLQV DQG DPLQR DFLGV 7KH DSSDUHQWGLVDGYDQWDJHRIWKLVPHWKRGLVWKDWWKHDPRXQWRIDPLQRDFLGVDEVRUEHGLQWKH FRORQLVQRWWDNHQLQWRDFFRXQW
+RZHYHULWZRXOGQRWEHFRUUHFWWRUHJDUGWKLVDVDVRXUFHRIHUURUVLQFHLQWKH SRVWLOHDO VHFWLRQ RI WKH LQWHVWLQH WKH FRORQ WKH YDULRXV QLWURJHQ ERQGV DUH DEVRUEHG DOPRVW H[FOXVLYHO\ LQ WKH IRUP RI DPPRQLD DQG WKXV DUH QRW LQYROYHG LQ SURWHLQ V\QWKHVLV -XVW HW DO EXW DUH H[FUHWHG LQ WKH XULQH +HQFH RQO\ WKH DPRXQW RI DPLQRDFLGVDEVRUEHGEHIRUHWKHHQGRIWKHVPDOOLQWHVWLQHKDVVLJQLILFDQFHZLWKUHVSHFW WRDQLPDOQXWULWLRQ
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
7DEOH
7KHHIIHFWRIGLHWDU\FUXGHSURWHLQFRQWHQWUHGXFWLRQZLWKDPLQRDFLG VXSSOHPHQWDWLRQRQJURZWKSHUIRUPDQFHDQG1H[FUHWLRQ
UDQJHNJ/: &3UHGXFWLRQ
WRFRQWURO (IIHFWRQ GDLO\JDLQ
(IIHFWRQ FRQYHUVLRQIHHG
5HGXFWLRQLQ1
H[FUHWLRQ 6RXUFH
QVD QV
QV QV 'RXUPDGHWDO
QV QV *XQGHOHWDO
QV QV
QV QV 7XLWRHNHWDO
D1RWVLJQLILFDQW
5('8&,1*3+263+2586(;&5(7,21
$FFRUGLQJWRWKHGDWDREWDLQHGIURPYDULRXVLQYHVWLJDWLRQVSLJVUHWDLQIRUPDLQWHQDQFH DQG ZHLJKWJDLQEDUHO\RISKRVSKRUXVLQJHVWHG ZLWK WKH GLHW WKH UHPDLQLQJ EHLQJH[FUHWHGLQWKHIDHFHVDQGXULQH7DEOH
7DEOH
3KRVSKRUXVUHWHQWLRQLQJURZLQJSLJV 7RVVHQEHUJHUDQG
.DNXN GHQ+DUWRJDQG
6ZLQNHOV 6FKZDU]
,QWDNH
([FUHWLRQ
5HWHQWLRQ
6LPLODUO\ WR WKH SURWHLQ DQG DPLQR DFLG VXSSOHPHQWDWLRQ WKH ILUVW DSSURDFK WR UHGXFH SKRVSKRUXV H[FUHWLRQ LV WR HQVXUH WKDW WKH VXSSO\ LV DW DOO WLPHV DSSURSULDWH IRU WKH JURZWKSRWHQWLDORIWKHDQLPDOVRUWRWKHLUSK\VLRORJLFDOQHHGV7KHORZQHWXWLOLVDWLRQRI 3LVPDLQO\GXHWRWKHTXLWHORZ3GLJHVWLELOLW\LQ SLJ GLHWV UHVXOWLQJ LQ D KLJK IDHFDO H[FUHWLRQRI3$WRWKHUKDQGWKHUHFRPPHQGDWLRQVIRU3UHTXLUHPHQWVZHUHEDVHGRQ WRWDO 3 FRQWHQW 7KHUHIRUH WKH\ ZHUH LPSUHFLVH DQG LQFOXGHG ODUJH VDIHW\ PDUJLQV )HUQiQGH] HW DO &RQVHTXHQWO\ D PRUH SUHFLVH EDVLV IRU 3 UHFRPPHQGDWLRQV ZRXOG EH GLJHVWLEOH 3 7KLV FDQ EH MXVWLILHG E\ PRGHO FDOFXODWLRQV 7DEOH ,I GLHWV IRUPXODWHG RQ WKH EDVLV RI WRWDO 3 FRQWHQW RQO\ GLHWV ZLWK FRPSRQHQWV KDYLQJ KLJKO\
GLJHVWLEOH 3 FRQWHQW UHDFK WKH UHFRPPHQGHG GLHWDU\ GLJHVWLEOH 3 OHYHO +RZHYHU WKH GLIIHUHQFHV EHWZHHQ WRWDO DQG GLJHVWLEOH SKRVSKRUXV FRQWHQW RI GLHWV LV LGHQWLFDO LQ DOO FDVH DOWKRXJK GHFUHDVLQJ ZLWK LQFUHDVHG 3 GLJHVWLELOLW\ RI GLHWDU\ FRPSRQHQWV 7KLV PHDQV WKDW DSSO\LQJ WKH GLJHVWLEOH SKRVSKRUXV FRQFHSW LQ GLHW IRUPXODWLRQV ZLOO GHFUHDVHWKH3H[FUHWLRQLIFRPSRQHQWVZLWKKLJKHU3GLJHVWLELOLW\ ZLOOEHSUHIHUUHGLQ VZLQHGLHWV
7DEOH
7RWDODQGGLJHVWLEOH3FRQWHQWRIGLHWVIRUPXODWHGWRPHHWHLWKHUWRWDORUGLJHVWLEOH 3UHFRPPHQGDWLRQDRI15&
0DLQGLHWDU\FRPSRQHQWV 6R\EHDQPHDO
0DL]H
6R\EHDQPHDO 0DL]H )LVKPHDO
6R\EHDQPHDO 0DL]H :KHDW
6R\EHDQPHDO
%DUOH\
:KHDW
%DVLVRIGLHWIRUPXODWLRQ 15&
73E '3F 73 '3 73 '3 73 '3
7RWDO3JNJ
'LJ3JNJ
7RWDO'LJJ
D*URZLQJ SLJV IURP NJ E'LHWV IRUPXODWHG WR PHHW WKH 15&
UHFRPPHQGDWLRQ IRU GLHWDU\ WRWDO 3 F'LHWV IRUPXODWHG WR PHHW WKH 15&
UHFRPPHQGDWLRQIRUGLHWDU\GLJHVWLEOH3
0RVW SKRVSKRUXV RI SODQW RULJLQ LV SUHVHQW DV SK\WLF DFLG ZKLFK LV SRRUO\
DYDLODEOHWRQRQUXPLQDQWDQLPDOV7KHDYDLODELOLW\RISK\WLFDFLG3 PD\EHLPSURYHG HLWKHUE\DGGLQJPLFURELDOSK\WDVHRUE\XVLQJSK\WDVHULFKFHUHDOGLHWV7RVVHQEHUJHUHW DO7KHLQWULQVLFSK\WDVHDFWLYLW\LVKLJKLQZKHDWWULWLFDOHDQGEDUOH\DQGORZLQ PDL]H RDWV DQG RLO PHDOV 'XH WR WKH GLIIHUHQW LQWULQVLF SK\WDVH DFWLYLW\ RI WKH
SK\WDWHFRQWHQWRIPDL]HDQGRIWKHSK\WDWHFRQWHQWRIZKHDWFDQEHWUDQVIRUPHG LQWR DQ DEVRUEDEOH IRUP 7RVVHQEHUJHU HW DO 7KHUHIRUH WKH HIIHFWLYHQHVV RI PLFURELDOSK\WDVHVXSSOHPHQWDWLRQGHSHQGRQGLHWFRPSRVLWLRQ
7KH UHJXODWLRQ RI 3 KRPHRVWDVLV LQ WKH ERG\ RFFXUV PDLQO\ WKURXJK FRQWURO RI 3 H[FUHWLRQLQXULQHDQG 3 DEVRUSWLRQ 3K\VLRORJLFDOO\ IUDFWLRQDO 3 DEVRUSWLRQ GHFUHDVHV DQG WKH XULQDU\ 3 H[FUHWLRQ LQFUHDVHV ZKHQ SLJV DUH IHG DERYH WKHLU UHTXLUHPHQW
&RQYHUVHO\IUDFWLRQDO3DEVRUSWLRQLQFUHDVHVDQGWKHXULQDU\3H[FUHWLRQGHFUHDVHVZKHQ SLJV DUH IHG EHORZ WKHLU 3 UHTXLUHPHQW :KHQ SLJV DUH IHG 3 DFFRUGLQJ WKHLU SK\VLRORJLFDO3UHTXLUHPHQWXULQDU\3H[FUHWLRQLVYHU\ORZ7KLVLVZHOOGHPRQVWUDWHG LQ7DEOH7KHH[SHULPHQWDOGDWDGHPRQVWUDWHWKDWLISKRVSKRUXVLVVXSSOLHGDFFRUGLQJ WR WKH UHFRPPHQGDWLRQV DQG SK\WDVH VXSSOHPHQWDWLRQ LV DSSOLHG WKH DPRXQW RI 3 H[FUHWHGLQWKHIDHFHVLVGHFUHDVHGGXHWREHWWHUGLJHVWLELOLW\RISKRVSKRUXV7KHH[FHVV SKRVSKRUXV DEVRUEHG IURP WKH LQWHVWLQH ZDV KRZHYHU H[FUHWHG LQ WKH XULQH 7KLV LQGLFDWHV WKDW SLJV KDG VXEVWDQWLDOO\ PRUH 3 DYDLODEOH WKDW WKHLU SK\VLRORJLFDO UHTXLUHPHQWV([SHULPHQWDOUHVXOWVSXEOLVKHGLQGLFDWHWKDWWKHGLJHVWLELOLW\RI3FDQEH LPSURYHG DERXW SHUFHQWDJH XQLWV 6LPRQV HW DO &URPZHOO HW DO 7RVVHQEHUJHU$GGLWLRQRIPLFURELDOSK\WDVHWRSLJGLHWVDERXW)78NJFDQ LPSURYH 3 GLJHVWLELOLW\ XS WR DERXW 3RXOVHQ HW DO ,I WKH GLHWV DUH KHDW WUHDWHGPRVWRIWKHSK\WDVHLQWULQVLFDQGPLFURELDOPLJKWEHLQDFWLYDWHG7KHUHIRUHWKH HIIHFWRIIHHGSURFHVVLQJVKRXOGDOVREHDFFRXQWHGLQFDOFXODWLRQRI3UHTXLUHPHQWV 7DEOH
&KDQJHVLQSKRVSKRUXVEDODQFHLQJURZLQJSLJVE\WKHHIIHFWRISK\WDVHDGGLWLRQ JLYHQLGHQWLFDOGDLO\SKRVSKRUXVLQWDNH
3K\WDVHVXSSOHPHQWDWLRQ)78NJIHHG
'DLO\3,QWDNH
'DLO\3H[FUHWLRQ LQXULQH
LQIDHFHV
'DLO\3UHWHQWLRQ
7RVVHQEHUJHU3iORV%DELQV]N\XQSXEOLVKHGGDWD ,03/,&$7,216
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
DQGOHJLVODWLRQLVQRWIRUHVHHQWKHGLHWDU\LQFOXVLRQRIPLFURELDOSK\WDVH)78NJ ZLOOGHSHQGRQHFRQRPLFDOFRQVLGHUDWLRQV
5()(5(1&(6
$5&7KHQXWULHQWUHTXLUHPHQWVRISLJV&RPPRQZHDOWK%XUHDX[6ORXJK8.
%RXUGRQ''RXUPDG-<+HQU\<5HGXFWLRQRIQLWURJHQRXWSXWLQJURZLQJ SLJVE\PXOWLSKDVHIHHGLQJZLWKGHFUHDVHGSURWHLQOHYHOWK$QQXDO0HHWLQJRI WKH($$3$XJXVW9LHQQD
&URPZHOO *, 6WDKO\ 76 &RIIH\ 5' 0RQHJXH +- 5DQGROSK -+
(IILFDF\RISK\WDVHLQLPSURYLQJWKHELRDYDLODELOLW\RISKRVSKRUXVLQVR\EHDQPHDO DQGFRUQVR\EHDQPHDOGLHWVIRUSLJV-$QLP6FL
GHQ+DUWRJ/$6ZLQNHOV-:*01XWULWLRQDOSRVVLELOLWLHVWRUHGXFHQXWULHQW H[FUHWLRQ LQ SLJV 3URF QG ,QW 6\PSRVLXP RQ $QLPDO 1XWULWLRQ .DSRVYiU +XQJDU\
'RXUPDG -< +HQU\ < %RXUGRQ ' 4XLQLRX 1 *XLOORX ' (IIHFW RI JURZWK SRWHQWLDO DQG GLHWDU\ SURWHLQ LQSXW RQ JURZWK SHUIRUPDQFH FDUFDVV FKDUDFWHULVWLFVDQGQLWURJHQRXWSXWLQJURZLQJILQLVKLQJSLJV,Q1LWURJHQIORZLQ SLJ SURGXFWLRQ DQG HQYLURQPHQWDO FRQVHTXHQFHV (GV 9HUVWHJHQ 0:$ /$
GHQ+DUWRJ*-0YDQ.HPSHQDQG-+00HW]($$33XEOLFDWLRQ 'RXUPDG-<*XLQJDQG1/DWLPLHU36HYH%1LWURJHQDQGSKRVSKRUXV
FRQVXPSWLRQXWLOLVDWLRQDQGORVVHVLQSLJSURGXFWLRQ)UDQFH/LYHVW3URG6FL )HUQiQGH]-$3RXOVHQ+'%RLVHQ65RP+%1LWURJHQDQGSKRVSKRUXV FRQVXPSWLRQXWLOLVDWLRQDQGORVVHVLQSLJSURGXFWLRQ'HQPDUN/LYHVW3URG6FL )XOOHU 0) 0F:LOOLDP 5 :DQJ 7& *LOHV /5 7KH RSWLPXP GLHWDU\
DPLQRDFLGSDWWHUQIRUSLJV5HTXLUHPHQWVIRUPDLQWHQDQFHDQGIRUWLVVXHSURWHLQ DFFUHWLRQ%U-1XWU
*XQGHO - +HUPDQ , 6]HOHQ\LQH *0 5HJLXVQH 0$ 9RWLVN\ / 7KH HIIHFWRIIHHGVWXIIVFRQVLVWLQJRIGLIIHUHWQQXWULHQWVRQWKHSHUIRUPDQFHRIIDWWHQLQJ SLJVDQGQLWURJHQDQGSKRVSKRUXVH[FUHWLRQLQ+XQJDULDQ+XQJDULDQ-RXUQDORI
$QLPDO3URGXFWLRQ
-RQJORHG $: /HQLV 13 ([FUHWLRQ RI Q LWURJHQ DQG VRPH PLQHUDOV E\
OLYHVWRFN ,Q 1LWURJHQ IORZ LQ SLJ SURGXFWLRQ DQG HQYLURQPHQWDO FRQVHTXHQFHV (GV9HUVWHJHQ0:$/$GHQ+DUWRJ*-0YDQ.HPSHQDQG-+00HW]
($$33XEOLFDWLRQ
-RQJEORHG $: 3RXOVHQ +' 'RXUPDG -< YDQ GHU 3HHW6FKZHULQJ &0&
(QYLURQPHQWDO DQG OHJLVODWLYH DVSHFWV RI SLJ SURGXFWLRQ LQ 7KH 1HWKHUODQGV)UDQFHDQG'HQPDUN/LYHVW3URG6FL
-XVW$-|UJHQVHQ+)HUQiQGH]-$7KHGLJHVWLYHFDSDFLW\RIFDHFXPFRORQ DQG WKH YDOX RI WKH QLWURJHQ DEVRUEHG IURP WKH KLQG JXW IRU SURWHLQ V\QWKHVLV LQ SLJV%U-1XWU
.LP<*-LQ-.LP-'6KLQ,6+DQ,.(IIHFWVRISKDVHIHHGLQJRQ JURZWK SHUIRUPDQFH QXWULHQW GLJHVWLELOLW\ QXWULHQW H[FUHWLRQ DQG FDUFDVV FKDUDFWHULVWLFVRIILQLVKLQJEDUURZDQGJLOW$VLDQ$XVWUDODVLDQ-RXUQDORI$QLPDO 6FLHQFHV
/DWLPLHU 3 'RXUPDG -< (IIHFW RI WKUHH SURWHLQ IHHGLQJ VWUDWHJLHV IRU JURZLQJILQLVKLQJ SLJV RQ JURZWK SHUIRUPDQFH DQG QLWURJHQ RXWSXW LQ WKH VOXUU\
DQG LQ WKH DLU ,Q 1LWURJHQ IORZ LQ SLJ SURGXFWLRQ DQG HQYLURQPHQWDO FRQVHTXHQFHV(GV9HUVWHJHQ0:$/$GHQ+DUWRJ*-0YDQ.HPSHQDQG -+00HW]($$33XEOLFDWLRQ
15& 1DWLRQDO 5HVHDUFK &RXQFLO 7KH QXWULHQW UHTXLUHPHQWV RI VZLQH 7HQWK UHYLVHGHGLWLRQ1DWLRQDO$FDGHP\3UHVV:DVKLQJWRQ'&86$
3RXOVHQ +' -RQJEORHG $: /DWLPLHU 3 )HUQiQGH] -$ 3KRVSKRUXV FRQVXPSWLRQ XWLOLVDWLRQ DQG ORVVHV LQ SLJ SURGXFWLRQ LQ )UDQFH 7KH 1HWKHUODQGV DQG'HQPDUN/LYHVW3URG6FL
6FKU|GHU + 8QWHUVXFKXQJHQ ]XU VFKHLEDUHQ 9HUGDXOLFKNHLW YRQ 1 9HUELQGXQJHQLQGLIIHUHQ]LHUWHQ $EVFKQLWWHQGHV,QWHVWLQDOWUDNWHVDP ZDFKVHQGHQ 6FKZHLQ'RNW'LVV&KULVWLDQ$OEUHFKWV8QLY.LHO*HUPDQ\
6FKZDU]*3URWHFWLQJWKHHQYLURQPHQWZLWKDQHQ]\PHDGGLWLYH)HHG0L[
6LPRQV3&09HUVWHHJK+$--RQJEORHG:.HPPH3$6OXPS3%RV.' :ROWHUV*(%HXGHNHU5)9HUVFKRRU*-,PSURYHPHQWRISKRVSKRUXV E\PLFURELODSK\WDVHLQEURLOHUVDQGSLJV%U-1XWU
6WDWLVWLFDO <HDUERRN RI +XQJDU\ &HQWUDO 6WDWLVWLFDO 2IILFH %XGDSHVW +XQJDU\
7RVVHQEHUJHU - .DNXN 7 $XVZLUNXQJHQ GHU PLNURELHOOHQ 3K\WDVH DXI GLH 3KRVSKRUDEVRUSWLRQ EHLP 6FKZHLQ 3URF ,QWHUQDFLRQDOH 7DJXQJ 6FKZHLQH XQG
*HIOKJHOHUQlKUXQJ+DOOH*HUPDQ\
7RVVHQEHUJHU-/LHEHUW)6FKXO](=XP(LQIOXVVYRQ3K\WDVHDXIGHQ$EEDX YRQ3K\WDWHQYHUVFKLHGHQHU+HUNKQIWH3URF6\PSRVLXP9LWDPLQHXQGZHLWHUH
=XVDW]VWRIIHEHL0HQVFKXQG7LHU-HQD*HUPDQ\
7RVVHQEHUJHU-7KHHIIHFWRIGLIIHUHQWSKRVSKRUXVVXSSO\DQGGLIIHUHQWO\VLQHWR HQHUJ\UDWLRVRQWKHSKRVSKRUXVPHWDEROLVPRIZHDQHGSLJOHWV3K'GLVVHUWDWLRQ LQ+XQJDULDQ8QLYHUVLW\RI.DSRVYiU.DSRVYiU+XQJDU\
7XLWRHN.-RXQJ/*GH/DQJH &)0 .HUU %- 7KH HIIHFW RI UHGXFLQJ H[FHVV GLHWDU\ DPLQR DFLGV RQ JURZLQJILQLVKLQJ SHUIRUPDQFH DQ HYDOXDWLRQ RI LGHDOSURWHLQFRQFHSW-$QLP6FL
YDQGHU3HHW6FKZHULQJ&0&GHQ+DUWRJ/$0DQLSXODWLRQRISLJGLHWVWR PLQLPLVHWKHHQYLURQPHQWDOLPSDFWRISLJSURGXFWLRQLQWKH1HWKHUODQGV3LJ1HZV DQG,QIRUPDWLRQ
&RUUHVSRQGLQJDXWKRU
&VDED6]DEy
8QLYHUVLW\RI.DSRVYiU)DFXOW\RI$QLPDO6FLHQFH 'HSDUWPHQWRI$QLPDO1XWULWLRQ
+.DSRVYiU32%R[+XQJDU\
7HO)D[
HPDLOV]DERFV#PDLODWNXNDSRVYDUKX