microsoft word - westbrook master _1_.doc

101
7KH(FRQRPLFDQG6RFLDO,PSDFW RIWKH$UWVLQWKH+LJKODQGVDQG,VODQGV )LQDO5HSRUW E\ ,QGHSHQGHQW1RUWKHUQ&RQVXOWDQWV 6HSWHPEHU 5HSRUW3URGXFHGE\6WHYH:HVWEURRN(FRQRPLVW %U\DQ%HDWWLH&UHDWLYH6HUYLFHV /RUUDLQH0DQQ5HVHDUFK$QDO\VLV

Upload: marcus-wilson

Post on 24-Mar-2016

220 views

Category:

Documents


0 download

DESCRIPTION

,QGHSHQGHQW1RUWKHUQ&RQVXOWDQWV 7KH(FRQRPLFDQG6RFLDO,PSDFW RIWKH$UWVLQWKH+LJKODQGVDQG,VODQGV E\ 5HSRUW3URGXFHGE\6WHYH:HVWEURRN(FRQRPLVW %U\DQ%HDWWLH&UHDWLYH6HUYLFHV /RUUDLQH0DQQ5HVHDUFK $QDO\VLV

TRANSCRIPT

Page 1: Microsoft Word - Westbrook master _1_.doc

7KH�(FRQRPLF�DQG�6RFLDO�,PSDFWRI�WKH�$UWV�LQ�WKH�+LJKODQGV�DQG�,VODQGV

)LQDO�5HSRUWE\

,QGHSHQGHQW�1RUWKHUQ�&RQVXOWDQWV

6HSWHPEHU�����5HSRUW�3URGXFHG�E\���6WHYH�:HVWEURRN��(FRQRPLVW%U\DQ�%HDWWLH��&UHDWLYH�6HUYLFHV/RUUDLQH�0DQQ�5HVHDUFK��$QDO\VLV

Page 2: Microsoft Word - Westbrook master _1_.doc

7KH�(FRQRPLF�DQG�6RFLDO�,PSDFWRI�WKH�$UWV�LQ�WKH�+LJKODQGV�DQG�,VODQGV&RQWHQWV 3DJH�1XPEHU

([HFXWLYH�6XPPDU\6HFWLRQ���� � ,QWURGXFWLRQ �6HFWLRQ���� � 0HWKRGRORJ\ �6HFWLRQ���� � 1DWLRQDO�DQG�5HJLRQDO�&RQWH[W ��6HFWLRQ���� � 7KHPDWLF�&DVH�6WXGLHV ��6HFWLRQ���� � $VSHFWV�RI�(FRQRPLF�,PSDFW ��6HFWLRQ���� � (FRQRPLF�,PSDFWV�E\�/RFDO�(QWHUSULVH�&RPSDQ\�$UHD ��6HFWLRQ���� � 2YHUDOO�+LJKODQGV�DQG�,VODQGV�(FRQRPLF�,PSDFWV ��6HFWLRQ���� � $QDO\VLV�RI�9ROXQWDU\�$FWLYLW\�DQG�$PDWHXU�3DUWLFLSDWLRQ ��6HFWLRQ���� � &RPSDULVRQV�ZLWK�WKH������,PSDFW�6WXG\ ��6HFWLRQ����� � &RPSDULVRQV�ZLWK�2WKHU�$UHDV ��6HFWLRQ����� � $QDO\VLV�RI�)XQGLQJ�IURP�WKH�6FRWWLVK�$UWV�&RXQFLO� ��WKH�$UWV�/RWWHU\��DQG�WKH�(XURSHDQ�8QLRQ6HFWLRQ����� � 6RFLDO�,PSDFWV ��6HFWLRQ����� � 7KH�5ROH�RI�WKH�$UWV�LQ�&XOWXUDO�7RXULVP ��6HFWLRQ����� � 2YHUDOO�&RQFOXVLRQV ��6HFWLRQ����� � 5HFRPPHQGDWLRQV�IRU�,QFUHDVLQJ�(FRQRPLF�DQG�6RFLDO ��,PSDFWV

$SSHQGLFHV$SSHQGL[���� � $UWV�$FWLYLWLHV�&RYHUHG�E\�WKH�6WXG\$SSHQGL[���� � &RSLHV�RI�6XUYH\�4XHVWLRQQDLUHV$SSHQGL[���� � /HDGHU�,,�)XQGHG�3URMHFWV

Page 3: Microsoft Word - Westbrook master _1_.doc

L

([HFXWLYH�6XPPDU\,QWURGXFWLRQ7KLV�VWXG\�KDV�DVVHVVHG��TXDQWLWDWLYHO\�DQG�TXDOLWDWLYHO\��WKH�HFRQRPLF�DQG�VRFLDO�LPSDFWV�RI�WKH�DUWVLQ�WKH�+LJKODQGV�DQG�,VODQGV�DW�WKH�EHJLQQLQJ�RI�WKH�QHZ�PLOOHQQLXP���GUDZLQJ�FRPSDULVRQV�ZLWK�DVLPLODU�VWXG\�FDUULHG�RXW�WHQ�\HDUV�SUHYLRXVO\�7KH� QHZ� VWXG\� LV� PRUH� ZLGH�UDQJLQJ� WKDQ� WKH� ����� VWXG\�� ZLWK� LQFUHDVHG� FRYHUDJH� RI� WKH� PRUHSRSXODU� DUWV�� LQFOXGLQJ� PXVLF� DQG� VPDOO� VFDOH� FLQHPD�� � 7KH� DQDO\VLV� H[FOXGHG� FHUWDLQ� DFWLYLWLHV�LQFOXGLQJ�PXVHXPV��OLEUDULHV��PXVLF�DQG�ERRN�UHWDLOLQJ��DQG�JUDSKLF�GHVLJQ��WKDW�PLJKW�EH�UHJDUGHG�DV³FUHDWLYH��RU�FXOWXUDO��LQGXVWULHV´��EXW�ZKLFK�GR�QRW�IDOO�ZLWKLQ�WKH�UHPLW�RI�WKH�6FRWWLVK�$UWV�&RXQFLO�6$&����&UDIWV�ZHUH�DOVR�H[FOXGHG�7KH� LQIRUPDWLRQ� UHTXLUHG� IRU� WKH�VWXG\�ZDV�FRPSLOHG� IURP�VRXUFH� WKURXJK�H[WHQVLYH� ORFDO� FRQWDFWVDQG�DQDO\VLV�RI�GDWDEDVHV�DQG�H[LVWLQJ�UHSRUWV���6RPH�DFWLYLW\�ZLOO�LQHYLWDEO\�KDYH�EHHQ�PLVVHG�LQ�WKHWUDZO��DQG�WKH�LPSDFWV�WKDW�ZHUH�FDOFXODWHG�VKRXOG�WKHUHIRUH�EH�UHJDUGHG�DV�WKH�PLQLPXP�3ULQFLSDO�(FRQRPLF�,PSDFWV,QIRUPDWLRQ�RQ�DUWV�DFWLYLW\�ZDV�REWDLQHG�IRU�WKH�\HDU�2FWREHU������WR�6HSWHPEHU�������DQG�HVWLPDWHVRI�LPSDFW�E\�DUW�IRUP�ZHUH�PDGH�IRU�LQGLYLGXDO�/RFDO�(QWHUSULVH�&RPSDQ\��/(&��DUHDV��DQG�IRU�WKH+LJKODQGV�DQG�,VODQGV�DV�D�ZKROH�$V�GHILQHG�IRU�WKH�SXUSRVHV�RI�WKH�VWXG\��WKH�DUWV�VXSSRUW�PRUH�WKDQ�������GLUHFW�IXOO�WLPH�HTXLYDOHQWMREV�� HTXDWLQJ� WR� ������ IXOO�WLPH� HTXLYDOHQW� �IWH�� MREV �GLUHFW�� LQGLUHFW� DQG� LQGXFHG� LQFOXGLQJPXOWLSOLHU�HIIHFWV�������RI�WKLV�WRWDO�LV�DWWULEXWDEOH�WR�YHQXHV�DQG�JDOOHULHV������WR�ZRUN�E\�LQGLYLGXDODUWLVWV������WR�DUWV�UHODWHG�WHDFKHUV�DQG�WXWRUV������WR�WKH�VSHQGLQJ�RI�WRXULVW�YLVLWRUV�WR�HYHQWV�DQGH[KLELWLRQV�RWKHU�WKDQ�DW�WKH�YHQXH�EXW�DWWULEXWDEOH�WR�WKH�YLVLW������WR�WKH�FUHDWLYH�FRQWHQW�LQGXVWU\�DQG� ���� WR� RWKHU� LPSDFWV�� � 7KH� ����� VWXG\ DWWULEXWHG� �������� GLUHFW� IWH� MREV WR� WKH� QDUURZHUDFWLYLWLHV� FRYHUHG�� DQG� FRPSDULQJ� OLNH� ZLWK� OLNH�� WKH� LQFUHDVH� VLQFH� ����� LQ� WKHVH� DFWLYLWLHV� LVHVWLPDWHG�DW�DSSUR[LPDWHO\����������GLUHFW�IWH�MREV��7KH�IRUPDO�HGXFDWLRQ�VHFWRU HPSOR\V�DSSUR[LPDWHO\�����IWH�DUWV�UHODWHG�WHDFKHUV LQ�WKH�+LJKODQGVDQG�,VODQGV�� �0DQ\�VFKRROV�VSHFLDOLVH� LQ�PXVLF�� LQFOXGLQJ�HPSOR\LQJ� LQVWUXPHQW� WXWRUV��EXW� WKHUH� LVYHU\� OLWWOH� GUDPD�RU� GDQFH� WXLWLRQ�� �7KHUH� KDV� EHHQ� D� UHGXFWLRQ� DFURVV�PXFK� RI� WKH�+LJKODQGV� DQG,VODQGV� LQ� YLVXDO� DUW� VSHFLDOLVW� WHDFKLQJ� GXH� LQ� SDUW� WR� JHQHUDO� FODVV� WHDFKHUV� LQ� SULPDU\� VFKRROVUHSODFLQJ�YLVLWLQJ�VSHFLDOLVWV�7KH�QHZ�VWXG\�LGHQWLILHG������PRUH�DWWHQGDQFHV�DW�HYHQWV�DQG�H[KLELWLRQV�WKDQ�WKH������VWXG\��DQG����� PRUH� ER[� RIILFH� LQFRPH�H[KLELWLRQ� HQWU\� IHHV� �DW� LQIODWLRQ�DGMXVWHG� SULFHV��� � 0XFK� RI� WKLVLQFUHDVH�LV�GXH�WR�WKH�ZLGHU�FRYHUDJH�RI�WKH�QHZ�VWXG\��EXW�WKHUH�KDYH�FOHDUO\�EHHQ�UHDO�LQFUHDVHV�RYHUWKH� SDVW� WHQ� \HDUV� LQ�� YLVLWV� WR� JDOOHULHV� �GXH� WR� WKH� LQFUHDVHG� QXPEHU� RI� JDOOHULHV��� DWWHQGDQFHV� DWFRQFHUWV� RI� WUDGLWLRQDO� PXVLF�� FODVVLFDO� PXVLF� DXGLHQFHV�� WKH� QXPEHU� RI� RYHUDOO� DWWHQGDQFHV� DWIHVWLYDOV��WKH�WRWDO�QXPEHU�DQG�SURSRUWLRQ�RI�WRXULVWV�YLVLWLQJ�ERWK�H[KLELWLRQV�DQG�HYHQWV�$FURVV� DOO� DUW�IRUPV� FRYHUHG�� WKHUH� ZHUH� DSSUR[LPDWHO\� ������ SXEOLF� SHUIRUPDQFHV JLYHQ� LQ� WKH+LJKODQGV� DQG� ,VODQGV� RYHU� WKH� \HDU�� DWWUDFWLQJ� D� WRWDO� RI� �������� DWWHQGDQFHV�� RI�ZKLFK� �������ZHUH� PDGH� E\� WRXULVW� YLVLWRUV WR� WKH� +LJKODQGV� DQG� ,VODQGV� ����� RI� WKH� WRWDO��� � ,Q� DGGLWLRQ�H[KLELWLRQV RI� DUW�ZRUN� DWWUDFWHG� DSSUR[LPDWHO\� �������� YLVLWRUV RYHU� WKH� \HDU�� RI�ZKRP� �������ZHUH� WRXULVWV ������� GHPRQVWUDWLQJ� WKH� LPSRUWDQW� UROH� RI� JDOOHULHV� DV� DQ� DOO� ZHDWKHU� IDFLOLW\� IRUWRXULVW�YLVLWRUV�WR�WKH�+LJKODQGV�DQG�,VODQGV�� � ,Q� WRWDO�� WKHUH�ZHUH�DSSUR[LPDWHO\�����������YLVLWV WRHYHQWV�DQG�H[KLELWLRQV RYHU�WKH�\HDU��RI�ZKLFK�������� ������ZHUH�PDGH�E\�WRXULVW�YLVLWRUV���9LVLWVE\�UHVLGHQWV�WR�HYHQWV�DQG�H[KLELWLRQV�WRWDOOHG�DSSUR[LPDWHO\����������ZKLFK�UHSUHVHQWV�����YLVLWV�SHU\HDU�SHU�KHDG RI�WKH�DUHD¶V�SRSXODWLRQ���%R[�RIILFH�HQWU\�IHHV WRWDOOHG�PRUH�WKDQ����PLOOLRQ�7KHVH�ILJXUHV�LQFOXGH�(GHQ�&RXUW�7KHDWUH ZKLFK��DV�LQ�������JHQHUDWHV�E\�IDU�WKH�JUHDWHVW�HFRQRPLFLPSDFW�RI�+LJKODQGV�DQG�,VODQGV�DUWV�IDFLOLWLHV���UHFHLYLQJ�����RI�DOO�ER[�RIILFH�H[KLELWLRQ�HQWU\�IHHV�$WWHQGDQFHV�DQG�ER[�RIILFH�LQFRPH�DUH�DOVR�FDOFXODWHG�LQ�WKH�UHSRUW�H[FOXVLYH�RI�(GHQ�&RXUW�7KHDWUH�

Page 4: Microsoft Word - Westbrook master _1_.doc

LL

���������RI� WKH���������� WKDW�SHUIRUPHUV� DUH� HVWLPDWHG� WR� VSHQG�ZKLOH� YLVLWLQJ� WKH�+LJKODQGV� DQG,VODQGV�LV�DWWULEXWDEOH�WR�SHUIRUPDQFHV�DW�(GHQ�&RXUW�7KHDWUH�5HODWLYHO\� IHZ� DUWLVWV� UHVLGHQW� LQ� WKH� +LJKODQGV� DQG� ,VODQGV� DUH� IXOO�WLPH�� DQG�� IRU� D� QXPEHU� RIUHDVRQV��WKH�DUHD�EHQHILWV�IURP�KDYLQJ�D�ODUJH�QXPEHU�RI�SDUW�WLPH�DUWLVWV��VRPH�RI�ZKRP�HDUQ�RQO\�DVPDOO�SURSRUWLRQ�RI�WKHLU�OLYLQJ�IURP�WKH�DUWV��DQG�ZKRVH�IDPLOLHV�DUH�VXSSRUWHG�E\�LQFRPH�IURP�RWKHUZRUN�WKDW�SD\V�WKHP�PRUH�SHU�KRXU���,Q�SDUWLFXODU��LQGLYLGXDOV�FDQ�SOD\�LPSRUWDQW�UROHV�LQ�FRPPXQLW\DUWV�UHODWHG�LQLWLDWLYHV�DQG�WKURXJK�SULYDWH�WXLWLRQ���,Q�FRQWUDVW��DUWLVWV�ZKR�EHFRPH�IXOO�WLPH�RU�ZLVKWR�SXUVXH�D�VXFFHVVIXO�FDUHHU�LQ�WKH�DUWV�WHQG�WR�OHDYH�WKH�DUHD��HVSHFLDOO\�LQ�GUDPD��GDQFH�DQG�FHUWDLQIRUPV�RI�PXVLF����EHQHILFLDO�IRU�WKH�LQGLYLGXDO��EXW�QRW�WR�ORFDO�HFRQRPLF�DQG�VRFLDO�LPSDFW�7RXULVP� KHOSV� FRQVLGHUDEO\� LQ� VXVWDLQLQJ� DUWLVWLF� DFWLYLW\� LQ� WKH� +LJKODQGV� DQG� ,VODQGV� WKURXJKERRVWLQJ�GHPDQG��HVSHFLDOO\�WKURXJK�DWWHQGDQFHV�DW�IHVWLYDOV��JDOOHULHV��DQG�PXVLFDO�HYHQWV���7KH�DUHDKDV�QRW�PD[LPLVHG�WKH�VFRSH�WR�SURPRWH�WKH�ULFKQHVV�RI�LWV�DUWV�WR�WKH�SURVSHFWLYH�YLVLWRU��KRZHYHU�&DVH�6WXGLHV7KUHH� WKHPDWLF� FDVH� VWXGLHV� ZHUH� FDUULHG� RXW� DV� SDUW� RI� WKH� RYHUDOO� VWXG\�� DOO� UHODWLQJ� WR� DUHDV� RIJURZWK�ZLWKLQ�WKH�DUWV�LQ�WKH�+LJKODQGV�DQG�,VODQGV�RYHU�WKH�SDVW�WHQ�\HDUV�

3URIHVVLRQDO� WRXULQJ�FRPSDQLHV� ZLWK� WKH�KHOS�RI�SURMHFW� IXQGLQJ�IURP�+,�$UWV�DQG� WKH�6$&�WKHVH�KDYH�JURZQ�LQ�QXPEHU�IURP���WR�����EXW�WKHUH�LV�D�KLJK�GHJUHH�RI�IUDJLOLW\���7KH�FRPSDQLHVSURYLGH�D�WRWDO�RI����GLUHFW�IWH�MREV��JLYLQJ�����SHUIRUPDQFHV�DW����GLIIHUHQW�YHQXHV�ZLWKLQ�WKH+LJKODQGV�DQG�,VODQGV�GXULQJ�WKH�VWXG\�\HDU��DQG�KROGLQJ�D�IXUWKHU����HYHQWV�IRU�PRUH�WKDQ������SHRSOH��ZRUNVKRSV��VFKRRO�SURMHFWV��FRPPXQLW\�GUDPD��HWF����/HYHOV�RI�VXSSRUW�IXQGLQJ�QHHG�WRDFNQRZOHGJH�WKH�UHODWLYHO\�KLJK�FRVW�RI�WRXULQJ�WR�VPDOO��JHRJUDSKLFDOO\�GLVSHUVHG�YHQXHV�LQ�WKH+LJKODQGV�DQG�,VODQGV�5HFRUG�ODEHOV� WKHUH�DUH�DW�OHDVW����UHFRUG�ODEHOV�EDVHG�LQ�WKH�+LJKODQGV�DQG�,VODQGV��SURYLGLQJDERXW� �� IWH� MREV�� DQG� SOD\LQJ� DQ� LPSRUWDQW� UROH� LQ� WKH� GHYHORSLQJ� PXVLF� LQIUDVWUXFWXUH� LQ� WKH+LJKODQGV�DQG�,VODQGV���$W�SUHVHQW��WKH�ODEHOV�VHOO�D�WRWDO�RI�DURXQG��������DOEXPV�SHU�\HDU�*DOOHULHV� WKHUH� DUH� QRZ� PRUH� WKDQ� ���� JDOOHULHV� HVWDEOLVKHG� LQ� WKH� +LJKODQGV� DQG� ,VODQGV�H[FOXGLQJ�FUDIW�RQO\�RXWOHWV���PDQ\�RI�ZKLFK�DUH�VPDOO�VFDOH�DQG�VHDVRQDO���7KLV�VHFWRU�SURYLGHVDERXW����GLUHFW�IWH�MREV��DQG�KDV�DQ�DGGLWLRQDO�LPSRUWDQFH�DV�DQ�RXWOHW�IRU�WKH�YHU\�ODUJH�QXPEHURI� YLVXDO� DUWLVWV� LQ� WKH� +LJKODQGV� DQG� ,VODQGV� ZKR� ZRXOG� RWKHUZLVH� KDYH� JUHDW� GLIILFXOW\� LQH[KLELWLQJ�WKHLU�ZRUN�WR�SURVSHFWLYH�EX\HUV�

/RFDO�,PSDFWV7KH� /RFDO� (QWHUSULVH� &RPSDQ\� DUHDV� WKDW� JHQHUDWH� WKH� KLJKHVW� LPSDFWV� IURP� WKH� DUWV� SHU� KHDG� RISRSXODWLRQ�DUH�

%R[�RIILFH�HQWU\�IHHV� 6N\H�DQG�/RFKDOVK��,QYHUQHVV�DQG�1DLUQ��$UJ\OO�DQG�WKH�,VODQGV$XGLHQFH�QXPEHUV�H[KLELWLRQ�YLVLWRUV� 2UNQH\��6N\H�DQG�/RFKDOVK��6KHWODQG7RWDO�IWH�MREV�VXSSRUWHG� 6N\H�DQG�/RFKDOVK��2UNQH\��6KHWODQG�$UHDV� ZKHUH� LPSDFWV� DUH� ORZ�� LQFOXGLQJ� 0RUD\�� %DGHQRFK� DQG� 6WUDWKVSH\� DQG� &DLWKQHVV� DQG6XWKHUODQG��WHQG�WR�ODFN�SURPRWHUV�DQG�VXLWDEOH�YHQXHV���:KHUH�QHZ�YHQXHV�KDYH�EHHQ�GHYHORSHG�LQORFDO�DUHDV��LPSDFWV�KDYH�WHQGHG�WR�LQFUHDVH���GXH�QRW�RQO\�WR�WKH�LQFUHDVHG�FDSDFLW\�WR�KROG�HYHQWV�EXW�WR�WKH�QHZ�SURMHFWV�WKDW�DUH�JHQHUDWHG�E\�VXFK�D�ORFDO�EDVH�

Page 5: Microsoft Word - Westbrook master _1_.doc

LLL

([WHUQDO�)XQGLQJ�6RXUFHV%HWZHHQ�$SULO������DQG�0DUFK������� WKH�6FRWWLVK�$UWV�&RXQFLO� JUDQW�DLGHG ����SURMHFWV� LQ� WKH+LJKODQGV� DQG� ,VODQGV� WR� WKH� VXP�RI������������� �7KLV� UHSUHVHQWHG�������SHU� KHDG�RI� SRSXODWLRQ� �����RI�WKH�6FRWWLVK�DYHUDJH���ZKLFK�ZDV�DQ�LPSURYHPHQW�RQ�WKH�����ILJXUH�WHQ�\HDUV�DJR���,I�6$&JUDQWV�WR�WKH�IRXU�³QDWLRQDO�FRPSDQLHV´�DUH�H[FOXGHG�IURP�WKH�6FRWWLVK�WRWDO�DV�WKH\�FDQ�EH�FRQVLGHUHGWR�KDYH�D�QDWLRQDO�UDWKHU�WKDQ�UHJLRQDO�UROH��KRZHYHU��WKH�+LJKODQGV�DQG�,VODQGV�UHFHLYHV�D�KLJKHU�SHUKHDG�VKDUH�WKDQ�WKH�UHVW�RI�6FRWODQG��������FRPSDUHG�ZLWK��������7KH� GLIILFXOW\� WKDW� WKH� 6$&� KDV� QDWLRQDOO\� LQ� UDWLRQLQJ� LWV� ILQDQFLDO� VXSSRUW� EHWZHHQ� DQ� HYHU�LQFUHDVLQJ�QXPEHU�RI�DSSOLFDQWV�IRU�LWV�GLIIHUHQW�SURJUDPPHV�ZDV�UHIOHFWHG�LQ�WKH�DGYHUVH�FRPPHQWVPDGH�E\�PDQ\�RI�WKH�SHRSOH�ZKRP�ZH�FRQVXOWHG�LQ�WKH�VWXG\���7KLV�LV�FRPSRXQGHG�E\�WKH�UHGXFHGEXGJHWV�WKDW�PRVW�RI�WKH�/RFDO�$XWKRULWLHV�LQ�WKH�+LJKODQGV�DQG�,VODQGV�KDYH�IRU�VXSSRUWLQJ�WKH�DUWVVLQFH�UH�RUJDQLVDWLRQ�%HWZHHQ�WKH�VWDUW�RI�WKH�/RWWHU\�LQ������DQG�2FWREHU�������WKH�+LJKODQGV�DQG�,VODQGV�UHFHLYHG����$UWV�/RWWHU\� DZDUGV�ZRUWK� D� WRWDO� RI�������������� � 7KLV� UHSUHVHQWV� ������� SHU� KHDG� RI� SRSXODWLRQFRPSDUHG�ZLWK��������IRU�6FRWODQG�DV�D�ZKROH��DOWKRXJK�WKH�DYHUDJH�IRU� WKH�+LJKODQGV�DQG�,VODQGVZLOO� IDOO� WR��������SHU� KHDG� LI� WKH�$Q�/DQQWDLU� DUWV� FHQWUH� SURMHFW� LQ�6WRUQRZD\�GRHV� QRW� SURFHHG�7KLV�/RWWHU\�IXQGLQJ�ZDV�QRW�HQYLVDJHG�ZKHQ�+,(�SURGXFHG�LWV�DUWV�VWUDWHJ\�LQ�WKH�HDUO\�����¶V��DQGKDV� KHOSHG� JUHDWO\� LQ� LPSOHPHQWLQJ� QHZ�SURMHFWV� FRQVLVWHQW�ZLWK� WKH� VWUDWHJ\�� �$SSUR[LPDWHO\� ���VPDOO�JURXSV�LQ�WKH�+LJKODQGV�DQG�,VODQGV�KDG�UHFHLYHG�VRPH��������� LQ�$ZDUGV�)RU�$OO /RWWHU\IXQGLQJ�E\�)HEUXDU\������$UWV�SURMHFWV�UHFHLYHG�(5')�IXQGLQJ� WRWDOOLQJ�������PLOOLRQ WKURXJK�WKH�2EMHFWLYH���3URJUDPPH������������IRU����SURMHFWV��ZKLOH�DUWV�WUDLQLQJ�SURMHFWV�UHFHLYHG��������� LQ�(6)�IXQGLQJ RYHU�WKHSHULRG�� � ���� SURMHFWV� ZHUH� DVVLVWHG� WKURXJK� WKH� /HDGHU� ,,� 3URJUDPPH�� UHFHLYLQJ� (8� IXQGLQJWRWDOOLQJ������������7KH�:HVWHUQ�,VOHV�DQG�6N\H�DQG�/RFKDOVK�PDGH�SDUWLFXODU�XVH�RI�WKLV�3URJUDPPHWR�IXQG�QHZ�DUWV�LQLWLDWLYHV�7KH�HVWDEOLVKPHQW�RI�+,�$UWV�DV�D�SDUWQHUVKLS�EHWZHHQ�+LJKODQGV�DQG�,VODQGV�(QWHUSULVH�DQG�WKH�6$&WR� KHOS� LQFUHDVH� DQG� VXSSRUW� DUWV� DFWLYLW\� LQ� WKH� DUHD� KDV� EHHQ� DQ� LPSRUWDQW� IDFWRU� LQ� JHQHUDWLQJGHPDQG�IRU�6$&��/RWWHU\��DQG�(8�IXQGLQJ�9ROXQWDU\�,QSXW�DQG�6RFLDO�,PSDFWV:H�LGHQWLILHG�D�WRWDO�RI�����DUWV�UHODWHG�RUJDQLVDWLRQV�DFWLYH�LQ�WKH�+LJKODQGV�DQG�,VODQGV��ZLWK�D�WRWDOHVWLPDWHG� PHPEHUVKLS� RI� �������� � *URVVLQJ�XS� IURP� RXU� VXUYH\� HYLGHQFH�� WKH� PHPEHUV� RI� WKHVHRUJDQLVDWLRQV�FRQWULEXWHG�D�WRWDO�RI��������GD\V�RI�XQSDLG�WLPH�LQ�SURPRWLQJ�RUJDQLVLQJ�HYHQWV�DQG�DWRWDO�RI��������GD\V�LQ�JLYLQJ�SHUIRUPDQFHV�IRU�WKH�SXEOLF�RYHU�WKH�FRXUVH�RI�WKH�\HDU���$W�D�PRGHVWUDWH�RI����SHU�KRXU��WKLV�UHSUHVHQWV�D�ILQDQFLDO�YDOXH�RI������PLOOLRQ�S�D���DQG�LV�HTXLYDOHQW�WR�����IWHMREV�� �0DQ\�LQGLYLGXDO�DUWLVWV�DOVR�KHOS�LQ� WKHLU� ORFDO�FRPPXQLWLHV� WKURXJK�XQSDLG�ZRUN� LQ�VFKRROV�HWF�� � 9ROXQWDU\� ZRUN� XQGHUSLQV� PXFK� DUWLVWLF� DFWLYLW\� LQ� WKH� +LJKODQGV� DQG� ,VODQGV�� � 7KLV� KDVJHQHUDOO\� SURYHG� VXVWDLQDEOH� RYHU� WKH� SDVW� WHQ� \HDUV�� EXW� YROXQWHHUV� DUH� EHFRPLQJ� LQFUHDVLQJO\VWUHWFKHG�6RFLDO� LPSDFWV� DQG� WUHQGV�� DQG� GLIILFXOWLHV� WKDW� YROXQWDU\� RUJDQLVDWLRQV� KDYH� LQ� SURYLGLQJ� DUWLVWLFDFWLYLW\�LQ�ORFDO�DUHDV�ZHUH�H[SORUHG�WKURXJK�FDVH�VWXGLHV�LQ�&DLWKQHVV�DQG�6WRUQRZD\��DQG� WKURXJKRWKHU�UHVHDUFK���.H\�SRLQWV�LQFOXGHG�WKH�IROORZLQJ�

x 'HVSLWH�SURJUHVV�RYHU�WKH�SDVW�WHQ�\HDUV��WKH�DUWV�KDYH�QRW�\HW�UHDOLVHG�WKHLU�IXOO�SRWHQWLDO��DQGZHDNQHVVHV�LQ�SXEOLF�VHFWRU�IXQGLQJ�VXSSRUW�DUH�DQ�LPSRUWDQW�DVSHFW�RI�WKLV�IDLOXUH�x ,QFUHDVHG� DZDUHQHVV� RI� *DHOLF� DQG� WKH� UHFRJQLWLRQ� RI� WKLV� E\� IXQGLQJ� ERGLHV� KDYH� EHHQLPSRUWDQW�SRVLWLYH�IDFWRUV��HJ��LQ�VXSSRUWLQJ�WKH�JURZWK�RI�IHLVHDQ��x 7KH� ODFN� RI� D� FXVWRPLVHG� PXOWL�SXUSRVH� DUWV� YHQXH� LQ� SDUWLFXODU� DUHDV� �HJ�� &DLWKQHVV�/RFKDEHU�DQG�/HZLV��KDV�KHOG�XS�SURJUHVV�LQ�DUWV�GHYHORSPHQW�

Page 6: Microsoft Word - Westbrook master _1_.doc

LY

x $UWV� RUJDQLVDWLRQV� KDYH� KDG� FRQWUDVWLQJ� H[SHULHQFHV� RYHU� WKH� SDVW� WHQ� \HDUV� �SRVLWLYH� DQGQHJDWLYH��� DOWKRXJK� LQ� PDQ\� FDVHV� WKH� VDPH� NH\� SHRSOH� KDYH� NHSW� XS� KLJK� OHYHOV� RIFRPPLWPHQW�x 7KHUH�LV�OLPLWHG�QHWZRUNLQJ�ZLWKLQ�DQG�EHWZHHQ�DUHDV�E\�DUWV�UHODWHG�RUJDQLVDWLRQV��DOWKRXJK3$1�LV�D�QRWDEOH�H[FHSWLRQ��DQG�0,'$6�KDV�SURPRWHG�FR�RUGLQDWLRQ�LQ�WKH�PXVLF�VHFWRU��x 7KHUH�LV�D�FRQWLQXDO�VWUXJJOH�WR�REWDLQ�VXIILFLHQW�IXQGLQJ�WR�VXUYLYH�GHYHORS�x 7KHUH�KDV�EHHQ�DQ�LQFUHDVLQJ�DSSUHFLDWLRQ�RI�WKH�SHUVRQDO�HQULFKPHQW�WKDW�SDUWLFLSDQWV�LQ�DUWVHYHQWV�DQG�WKHLU�DXGLHQFHV�FDQ�JDLQ�x 7UDGLWLRQDO�PXVLF�KDV�XQGHUJRQH�D�UHQDLVVDQFH��DWWUDFWLQJ�D�QHZ�JHQHUDWLRQ�RI�\RXQJ�SHRSOH�x 7KH�EXLOW�LQIUDVWUXFWXUH�RI�WKH�UXUDO�+LJKODQGV�DQG�,VODQGV�KDV�EHHQ�ERRVWHG�E\�D�QXPEHU�RIVWUDWHJLF�YLOODJH�KDOO�GHYHORSPHQWV�WKDW�HQDEOH�KLJKHU�TXDOLW\�DUWV�DFWLYLW\�WR�EH�KHOG�

)XWXUH�$UWV�'HYHORSPHQW)DFWRUV�WKDW�ZLOO�LQIOXHQFH�DUWV�GHYHORSPHQW�LQ�WKH�+LJKODQGV�DQG�,VODQGV�LQ�IXWXUH�\HDUV�LQFOXGH�

x 7KH�FRPPLWPHQW�RI�WKH�QHZ�6FRWWLVK�3DUOLDPHQW�WR�HGXFDWLRQ�DQG�VRFLDO�LQFOXVLRQ��ZLWK�VFRSHWR�UDLVH�WKH�SURILOH�RI�WKH�DUWV�LQ�ERWK�VSKHUHV�x ,PSOHPHQWDWLRQ�RI�WKH�1DWLRQDO�&XOWXUDO�6WUDWHJ\��ZKLFK�VKRXOG�VXSSRUW�QHZ�FUHDWLYHLQGXVWU\�LQLWLDWLYHV�x 7LJKWHU�/RWWHU\�IXQGLQJ��PRUH�KLJKO\�SULRULWLVHG��ZKLFK�PHDQV�WKDW�SURMHFWV�ZLOO�QHHG�WRVRXUFH�PRUH�GLYHUVH�VRXUFHV�RI�IXQGLQJ�x 2SSRUWXQLWLHV�WKURXJK�WKH�GHYHORSLQJ�8+,��LQ�SDUWLFXODU�WKURXJK�QHZ�DUWV�UHODWHG�IXUWKHU�DQGKLJKHU�HGXFDWLRQ�FRXUVHV�x 7KH�SKDVLQJ�RXW�RI�(8�DVVLVWDQFH�GXULQJ�WKH�QH[W�GHFDGH�x 7KH�QHHG�IRU�WKH�+LJKODQGV�DQG�,VODQGV�WR�GHYHORS�QLFKH�WRXULVP�LQ�DQ�LQFUHDVLQJO\FRPSHWLWLYH�LQWHUQDWLRQDO�LQGXVWU\�x 6FRSH�WR�VSHFLDOLVH�IXUWKHU�LQ�PXVLF��D�VHFWRU�WKDW�LV�OLNHO\�WR�UHFHLYH�FRQWLQXLQJ�DWWHQWLRQ�DV�DSRWHQWLDO�JURZWK�LQGXVWU\�QDWLRQDOO\��DQG�LQ�RWKHU�FXOWXUDO�LQGXVWU\�VHFWRUV�ZLWKQDWLRQDO�LQWHUQDWLRQDO�JURZWK�SURVSHFWV���LQFOXGLQJ�ILOP��

,QFUHDVLQJ�(FRQRPLF�DQG�6RFLDO�,PSDFW7KHUH� VKRXOG� EH� D� FR�RUGLQDWHG� HIIRUW� WR� LQIRUP� SROLF\�PDNHUV� ZLWKLQ� WKH� SXEOLF� VHFWRU� DERXW� WKHEHQHILWV� RI� WKH� DUWV� VR� WKDW� WKHLU� SRWHQWLDO�PLJKW� EH�PRUH� IXOO\� UHDOLVHG�� � 7KLV� VKRXOG� EH� DFKLHYHGQDWLRQDOO\ ZLWKLQ�WKH�IUDPHZRUN�RI�WKH�&XOWXUDO�6WUDWHJ\��UHJLRQDOO\ ZLWKLQ�WKH�SROLF\�IUDPHZRUN�RIWKH�+,(�1HWZRUN��DQG� ORFDOO\ ZLWKLQ� WKH�VWUDWHJLF�FRPPXQLW\�SODQQLQJ�RI�/RFDO�$XWKRULWLHV��7KHUHVKRXOG�EH�FOHDU�OLQNV�EHWZHHQ�WKHVH�WKUHH�OHYHOV�$�6WUDWHJ\� IRU�$GYRFDF\�RI� WKH�$UWV� WR� OREE\�DQG� LQIOXHQFH�SROLF\�DQG�GHFLVLRQ�PDNHUV� VKRXOG�EHHVWDEOLVKHG� DQG� LPSOHPHQWHG�� � ,Q� DGGLWLRQ�� JXLGHOLQHV� IRU� JRRG� SUDFWLFH� VKRXOG� EH� HVWDEOLVKHG� WRHQFRXUDJH�ORFDO�QHWZRUNLQJ�DQG�VWUDWHJLF�VKDULQJ�RI�UHVRXUFHV�$�NH\�FKDOOHQJH�LV�WR�ILQG�ZD\V�RI�UHF\FOLQJ�WKH�HFRQRPLF�EHQHILWV�WKDW�WKH�DUWV�FDQ�JHQHUDWH�WR�UHGXFHGHSHQGHQFH� RQ� RQJRLQJ� SXEOLF� IXQGLQJ�� � 7KLV� FRXOG� HQWDLO� JUHDWHU� SDUWQHUVKLS� EHWZHHQ� ORFDO� DUWV

Page 7: Microsoft Word - Westbrook master _1_.doc

Y

SURPRWHUV�DQG�DUWLVWV�DQG�WKH�WRXULVP�HVWDEOLVKPHQWV�WKDW�EHQHILW�IURP�WKH�VSHQGLQJ�RI�YLVLWRUV�GUDZQWR� DQ� DUHD� �DW� OHDVW� SDUWLDOO\�� WR� HQMR\� LWV� DUWLVWLF� DFWLYLW\�� � $� FOHDU� DQG� DFFHSWHG� IRUPDW� IRU� VHOI�HYDOXDWLRQ� DQG� LQGHSHQGHQW� HYDOXDWLRQ� RI� DUWV� RUJDQLVDWLRQV� DQG� HYHQWV� LQ� WHUPV� RI� VRFLDO� DQGHFRQRPLF�LPSDFW�VKRXOG�EH�LQWURGXFHG�DV�DQ�LQWHJUDO�SDUW�RI�SXEOLF�VHFWRU�ILQDQFLDO�VXSSRUW�,Q�UHVSRQVH�WR�WKHVH�QHHGV��NH\�DFWLRQV�IRU�WKH�SXEOLF�VHFWRU�IXQGLQJ�ERGLHV�VKRXOG�LQFOXGH�

x $FNQRZOHGJH�WKH�YDOXH�RI�LQYHVWPHQW�LQ�WKH�DUWV� LQIUDVWUXFWXUH�DFURVV�D�UDQJH�RI�VRFLDO�DQGHFRQRPLF�REMHFWLYHV�� �3ODQ� WR� LQFUHDVH� VLJQLILFDQWO\� WKHLU� ILQDQFLDO� LQYHVWPHQW� LQ� WKH� VHFWRULQFUHPHQWDOO\�RYHU� WKH�QH[W� WHQ�\HDUV�� �$FWLYHO\� HQFRXUDJH�DQ� LQFUHDVH� LQ�KXPDQ� UHVRXUFHVVXSSRUW�WR�WKH�VHFWRU�x &RQWLQXH� WR� IRFXV� RQ�PXVLF� DV� D� VHFWRU� LQ�ZKLFK�PDQ\�SDUWV� RI� WKH�+LJKODQGV� DQG� ,VODQGVKDYH�D�FRPSDUDWLYH�DGYDQWDJH�LQ�WHUPV�RI�WHFKQLFDO�VNLOOV��HQWKXVLDVP��DQG�WKH�LQYROYHPHQW�RI\RXQJ�SHRSOH�x (QFRXUDJH�WKH�JURZWK�RI�WKH�+LJKODQG�$UWV�3DUWQHUVKLS�WR�LQFOXGH�WKH�,VODQGV��DQG�RWKHU�SDUWVRI�WKH�+,(�DUHD���DQG�WR�DVVLVW�LQ�GHYHORSLQJ�PRUH�IRFXVVHG��VKDUHG�DVSLUDWLRQV�DQG�VWUDWHJLHV�x :RUN�ZLWK�WKH�DUHD¶V�7RXULVW�%RDUGV�DQG�WRXULVP�LQGXVWU\�WR�HQVXUH�WKDW�WKH�DUWV�DUH�VHHQ��DQGSURPRWHG��DV�DQ�LQWHJUDO�SDUW�RI�WKH�DUHD�DQG�D�VWURQJ�UHDVRQ�IRU�SHRSOH�WR�YLVLW�

7KH� DUWV� FRPPXQLW\� VKRXOG� XQGHUWDNH� WKH� IROORZLQJ� DFWLYLWLHV� WR� FRPSOHPHQW� WKH� SXEOLF� VHFWRUPHDVXUHV�x ,QFUHDVH� FROODERUDWLRQV� ZLWKLQ� WKH� DUWV� VHFWRU�� ZLWK� RWKHU� FUHDWLYH� LQGXVWULHV�� DQG� ZLWK� WKHWRXULVP�LQGXVWU\�LQ�RUGHU�WR�GHYHORS�LQQRYDWLYH�SURMHFWV�WKDW�ZLOO�DWWUDFW�VXSSRUW�IXQGLQJ��DQGWR�GHYHORS�ODUJHU�SURMHFWV�WKDQ�ZRXOG�EH�SRVVLEOH�IRU�D�VLQJOH�RUJDQLVDWLRQ� WKDW�FDQ�DFKLHYHHFRQRPLHV�RI�VFDOH�x 'HYHORS�QHZ�DXGLHQFHV�WKURXJK�SURJUDPPLQJ�WKDW�ZLOO�DWWUDFW�\RXQJ�SHRSOH��SHRSOH�ZLWK�DQLQWHUHVW� LQ� SRSXODU� DUW� DQG� HQWHUWDLQPHQW�� HOGHUO\� SHRSOH�� HWF� �DV� DSSOLFDEOH� LQ� ORFDO� DUHDVZKHUH� SDUWLFXODU� JURXSV� DUH� QRW� FDWHUHG� IRU��� � ,QLWLDWLYHV� WKDW� DGGUHVV� VRFLDO� H[FOXVLRQ�ZLOORIWHQ� DWWUDFW� VXSSRUW� IXQGLQJ� �IURP� D� UDQJH� RI� SRWHQWLDO� VRXUFHV��� DQG� VKRXOG� EH� EDVHG� RQPDUNHW�UHVHDUFK�x (QFRXUDJH�YROXQWHHUV�DQG�SDUW�WLPH�VWDII�WR�DWWHQG�UHOHYDQW�WUDLQLQJ�FRXUVHV���HJ��LQ�DVSHFWV�RIHIIHFWLYH� DGPLQLVWUDWLRQ��PDUNHWLQJ�� UHFUXLWPHQW�RI�QHZ�YROXQWHHUV�� XVH� RI� QHZ� WHFKQRORJ\�ZRUNLQJ�ZLWK�\RXQJ�SHRSOH��HWF�

Page 8: Microsoft Word - Westbrook master _1_.doc

��� ,1752'8&7,21��� 7KH�6WXG\�%ULHI7KLV� UHSRUW� ZDV� FRPPLVVLRQHG� E\� +LJKODQGV� DQG� ,VODQGV� (QWHUSULVH� �+,(��� ZLWK� ILQDQFLDOVXSSRUW�IURP�WKH�6FRWWLVK�$UWV�&RXQFLO��6$&���WR�

x $VVHVV�WKH�HFRQRPLF�DQG�VRFLDO�LPSDFW�RI�WKH�DUWV�LQ�WKH�+LJKODQGV�DQG�,VODQGV�x &RPSDUH�WKHVH�ILJXUHV�ZLWK�WKRVH�RI�WKH�VLPLODU�VWXG\�FDUULHG�RXW�IRU�+,(�LQ������E\0DFND\�&RQVXOWDQWV�DQG�7RP�0F*UDWK�x &RPSDUH�+LJKODQGV�DQG�,VODQGV�OHYHOV�RI�DUWV�DFWLYLW\�ZLWK�QDWLRQDO�DQG�LQWHUQDWLRQDOOHYHOV�

$OVR��WKH�EULHI�IRU�WKH�VWXG\�DVNHG�IRU�WKH�IROORZLQJ�WR�EH�DQDO\VHG�x 7KH�ZLGHU�HFRQRPLF�LPSDFW�RI� WKH�VXEVWDQWLDO�IXQGLQJ�IURP�WKH�1DWLRQDO�/RWWHU\� IRUSURMHFWV�LQ�WKH�DUHD�RYHU�WKH�SDVW�ILYH�\HDUV�x 7KH� LPSDFWV�RI� WKH� LQYHVWPHQWV� WKDW� KDYH�EHHQ� VXSSRUWHG� E\� WKH�(8�2EMHFWLYH�2QHDQG�/HDGHU�,,�3URJUDPPHV�x 7KH�YDOXH�RI�WKH�YROXQWDU\�ZRUN�LQYROYHG�LQ�GHOLYHULQJ�DUWV�DFWLYLWLHV�DQG�WKH�LPSDFWRI�WKLV�RQ�ZLGHU�LVVXHV�RI�FRPPXQLW\�UHJHQHUDWLRQ�x &KDQJHV�LQ�³YRWHG´�6$&�VSHQGLQJ�LQ�WKH�+LJKODQGV�DQG�,VODQGV�VLQFH�WKH������UHSRUW�DQG�WKH�ZLGHU�LPSDFW�RI�WKLV�LQYHVWPHQW�

,Q�WHUPV�RI�HFRQRPLF�LPSDFW��WKH�VSHFLILF�VWXG\�REMHFWLYHV�ZHUH�WR�x ([DPLQH�GLUHFW��LQGLUHFW�DQG�LQGXFHG�LPSDFWV�GHULYHG�IURP�DUWV�IDFLOLWLHV�DQG�DFWLYLWLHV�LQFOXGLQJ�WKH�LPSDFWV�RI�YLVLWLQJ�DQG�WRXULQJ�DUWV�JURXSV��x 5HYLHZ�HPSOR\PHQW�VXSSRUWHG�E\�DUWLVWV¶�RXWSXW�x 'HWHUPLQH�WKH�ILQDQFLDO�FRQWULEXWLRQ�PDGH�E\�YLVLWRUV�WR�+LJKODQGV�DUWV�HYHQWV�x :KHUH�SRVVLEOH��HVWLPDWH�WKH�VL]H�RI�WKH�³EODFN´�HFRQRP\�LQ�WKH�DUWV�VHFWRU�

,Q�WHUPV�RI�VRFLDO�LPSDFWV��WKH�VSHFLILF�VWXG\�REMHFWLYHV�ZHUH�WR�x ([DPLQH� WKH� UROH� RI� WKH� DUWV� LQ� UHWDLQLQJ� FRPPXQLW\� LGHQWLW\� DQG� ZKHUH� SRVVLEOHDSSRUWLRQLQJ�D�YDOXH�WR�WKLV��HVSHFLDOO\�LQ�WKH�FRQWH[W�RI�FXOWXUDO�WRXULVP�x 5HYLHZ� WKH� YROXQWDU\� VHFWRU¶V� FRQWULEXWLRQ� WR� VXSSRUWLQJ� DUWV� LQ� WKH� +LJKODQGV� DQG,VODQGV�x $VVHVV�WKH�UROH�RI�WKH�DUWV�LQ�FRQWULEXWLQJ�WR�VRFLDO�LQFOXVLRQ�LQLWLDWLYHV�

Page 9: Microsoft Word - Westbrook master _1_.doc

2XU� FRQFOXVLRQV� �6HFWLRQ����� LQFOXGH� DQ� DVVHVVPHQW�RI� WKH�SURJUHVV�PDGH� LQ� LPSOHPHQWLQJWKH�UHFRPPHQGDWLRQV�RI�WKH������UHSRUW���� 6XPPDU\�RI�WKH�6WXG\¶V�6FRSH�DQG�0HWKRGRORJ\7KH� PHWKRGRORJ\� WKDW� ZH� GHYLVHG� IRU� WKH� TXDQWLWDWLYH� DQDO\VLV� ZDV� LQWHQGHG� WR� IDFLOLWDWHFRPSDULVRQV�ZLWK�UHFHQW�6FRWWLVK��8.�DQG�LQWHUQDWLRQDO�UHVHDUFK���7KLV�LQYROYHG��IRU�H[DPSOH�XVLQJ�VWDQGDUG�DUW�IRUP�FDWHJRULHV�IRU�WKH�DQDO\VLV��VWDQGDUG�PHWKRGV�IRU�DQDO\VLQJ�HFRQRPLFLPSDFWV�IURP�WRXULVW�YLVLWV�WR�DUWV�HYHQWV�DQG�H[KLELWLRQV��DQG�JDWKHULQJ�GDWD�LQ�VXFK�D�ZD\�DVWR�\LHOG�ILJXUHV�WKDW�FRXOG�EH�FRPSDUHG�ZLWK�WKH�UHVXOWV�IURP�VSHFLILF�VHFWRUDO�VWXGLHV��HJ��RQPXVLF��WKDW�KDYH�EHHQ�SURGXFHG�IRU�RWKHU�DUHDV�,W�VKRXOG�EH�QRWHG��KRZHYHU��WKDW�RXU�IXQGDPHQWDO�PHWKRG�RI�GDWD�FROOHFWLRQ���IURP�VRXUFH��GLIIHUV�IURP�RWKHU�QDWLRQDO�DQG�LQWHUQDWLRQDO�VWXGLHV�RI�WKH�DUWV��ZKLFK�KDYH�WHQGHG�WR�EH�EDVHGRQ�&HQVXV�DQG�RWKHU�RIILFLDO�VRXUFHV�RI�VWDWLVWLFV���2XU�DSSURDFK�ZDV�QHFHVVLWDWHG�E\�WKH�ODFNRI� UHJLRQDO� DQG� VXE�UHJLRQDO� GDWD� IRU� WKH� +LJKODQGV� DQG� ,VODQGV� RQ� WKH� VHFWRU�� DQG� WKLV³ERWWRP�XS´�PHWKRG�KDV�WZR�LPSRUWDQW�LPSOLFDWLRQV�

x ,QIRUPDO� DFWLYLW\� KDV� EHHQ� LQFOXGHG�� DQG� D�PXFK�PRUH� FRPSUHKHQVLYH� VZHHS� RI� DOOFRQWHPSRUDU\� DFWLYLW\� KDV� EHHQ� SRVVLEOH�� � ,Q� VRPH� DFWLYLWLHV�� WKLV� KDV� \LHOGHG�PXFKKLJKHU�ILJXUHV�WKDQ�ZRXOG�KDYH�EHHQ�LQGLFDWHG�E\�RIILFLDO�VWDWLVWLFV��HYHQ�LI�LW�KDG�EHHQSRVVLEOH�WR�GLVDJJUHJDWH�QDWLRQDO�ILJXUHV�WR�WKH�UHTXLUHG�VSDWLDO�OHYHO�x ,W� KDV� EHHQ� SRVVLEOH� WR� GHOLQHDWH� TXDOLI\LQJ� DUWLVWLF� DFWLYLWLHV�PXFK�PRUH� DFFXUDWHO\WKDQ�LV�SRVVLEOH�IURP�RIILFLDO�VRXUFHV�RI�VWDWLVWLFV���6SHFLILFDOO\��DFWLYLW\�WKDW�LV�FXOWXUDOUDWKHU� WKDQ� DUWLVWLF� LV� QRUPDOO\� GLIILFXOW� WR� GLVHQWDQJOH� IURP� RIILFLDO� VWDWLVWLFV� RQFXOWXUDO�WUHQGV��ZKLFK�FRQVHTXHQWO\�WHQG�WR�RYHUVWDWH�MREV�GLUHFWO\�DVVRFLDWHG�ZLWK�WKHDUWV�

7KH�GHILQLWLRQ�RI�³WKH�DUWV´�XVHG�IRU�WKLV�VWXG\�ZDV�DJUHHG�ZLWK�+,(�DQG�WKH�6$&�SULRU�WR�GDWDJDWKHULQJ�� DQG� WKLV� LV� GLVFXVVHG� LQ�6HFWLRQ���EHORZ�� �7KH� VFRSH�ZDV�ZLGHU� WKDQ� WKDW� RI� WKH�����VWXG\�LQ�VRPH�UHVSHFWV��DQG��DV�IDU�DV�SRVVLEOH��WKLV�KDV�EHHQ�WDNHQ�LQWR�DFFRXQW� LQ� WKHFRPSDULVRQV�JLYHQ�LQ�6HFWLRQ������$OVR��WKHUH�LV�QRZ�PXFK�PRUH�LQIRUPDWLRQ�DYDLODEOH�WKDQWHQ�\HDUV�DJR�RQ�DUWV�DFWLYLW\�LQ�WKH�+LJKODQGV�DQG�,VODQGV��DQG��LQHYLWDEO\��SDUW�RI�WKH�LQFUHDVHWKDW�LV�LQGLFDWHG�E\�WKH�TXDQWLWDWLYH�DQDO\VLV�UHIOHFWV�WKH�LQFUHDVHG�FRPSUHKHQVLYHQHVV�RI� WKHQHZ�VWXG\¶V�FRYHUDJH�7KLV�LQFUHDVH�LQ�WKH�YLVLELOLW\�RI�DUWLVWLF�DFWLYLW\��GXH�WR�LPSURYHG�HYHQWV�SXEOLFLW\��LPSURYHGGDWDEDVHV��SUHVV�UHOHDVHV�RQ�/RWWHU\�DVVLVWDQFH��HWF��KDV�EHHQ�LPSRUWDQW�LQ�LWVHOI�LQ�EULQJLQJ�WKHHFRQRPLF�DQG�VRFLDO�EHQHILWV�RI� WKH�DUWV� WR� WKH�DWWHQWLRQ�RI� WKH�SXEOLF� LQ� WKH�+LJKODQGV�DQG,VODQGV�,W�VKRXOG�EH�QRWHG�WKDW�WKH�VWXG\�ZDV�FRPPLVVLRQHG�EHIRUH�+,(¶V�UHPLW�ZDV�H[WHQGHG�WR�FRYHUWKH�ZKROH�RI�0RUD\�� �7KH�DQDO\VLV�FRYHUV�ZHVW��EXW�QRW�HDVW��0RUD\��DV� LQFRUSRUDWHG� LQ� WKH0RUD\�%DGHQRFK�DQG�6WUDWKVSH\�(QWHUSULVH�DUHD�SULRU�WR�WKH�H[WHQVLRQ�'HVSLWH� WKH�FRPSUHKHQVLYHQHVV�RI� WKH� UHVHDUFK�XQGHUWDNHQ� IRU� WKLV� VWXG\�� LW� LV� LPSRUWDQW�� LQLQWHUSUHWLQJ� WKH� TXDQWLWDWLYH� UHVXOWV�� WR� DSSUHFLDWH� WKDW� WKHUH� ZLOO� LQHYLWDEO\� EH� DFWLYLW\� QRWSLFNHG�XS��ZKLFK�PHDQV�WKDW�WKH�UHVXOWV�VKRXOG�EH�UHJDUGHG�DV�PLQLPXP�HFRQRPLF�LPSDFWV�

Page 10: Microsoft Word - Westbrook master _1_.doc

$UWLVWLF�DFWLYLWLHV��HJ��FUDIWZRUN��H[FOXGHG�IURP�WKH�VWXG\�DQG�DFWLYLWLHV�WKDW�ZHUH�SDUWLFXODUO\GLIILFXOW�WR�PHDVXUH�DUH�QRWHG�LQ�6HFWLRQ���DQG�LQ�$SSHQGL[������ %DFNJURXQG7KH�NH\�FKDQJHV�VLQFH������WKDW�KDYH�LQIOXHQFHG�WKH�HFRQRPLF�DQG�VRFLDO�LPSDFWV�RI�WKH�DUWVLQ�WKH�+LJKODQGV�DQG�,VODQGV�FDQ�EH�VXPPDULVHG�DV�IROORZV�

x 1HZ�FDSLWDO�GHYHORSPHQWV�WKDW�KDYH�EHHQ�PDGH�SRVVLEOH�E\�IXQGLQJ�IURP�WKH�1DWLRQDO/RWWHU\�� SULQFLSDOO\� WKH� $UWV� /RWWHU\�� EXW� DOVR� WKH�0LOOHQQLXP�&RPPLVVLRQ� DQG� WKH/RWWHU\�&KDULWLHV�%RDUG� �LQFOXGLQJ�PDMRU�QHZ�IDFLOLWLHV�DQG� WKH�HTXLSSLQJ�RI�YLOODJHKDOOV��VFKRROV��HWF�IRU�DUWV�HYHQWV��x /RWWHU\�IXQGLQJ�IRU�D�ODUJH�QXPEHU�RI�VPDOOHU�VFDOH�FDSLWDO�DQG�UHYHQXH�SURMHFWV� WKDWKDV�KHOSHG�PDQ\�ORFDO�JURXSV�WR�LQWURGXFH�QHZ�LQLWLDWLYHV�DQG�VXVWDLQ�WKHLU�DFWLYLWLHV�DQG� IRU� /RFDO� $XWKRULWLHV� DQG� RWKHU� ERGLHV� �LQFOXGLQJ� +,� $UWV�� WR� LQWURGXFH� QHZUHJLRQDO�RU�VXE�UHJLRQDO�SURJUDPPHV�x 7KH�HVWDEOLVKPHQW�RI�+,�$UWV�DV�D�SDUWQHUVKLS�EHWZHHQ�+,(�DQG�WKH�6$&�ZKLFK�ZDVVSHFLILFDOO\�WDVNHG�WR�KHOS�LQFUHDVH�WKH�HFRQRPLF�DQG�VRFLDO�LPSDFW�RI� WKH�DUWV� LQ� WKHDUHD�x /RFDO� *RYHUQPHQW� UHRUJDQLVDWLRQ�� ZKLFK�� WRJHWKHU� ZLWK� FXWV� LQ� EXGJHWV�� KDV� PXFKUHGXFHG�WKH�ILQDQFLDO�FRQWULEXWLRQV�RI�WKH�DUHD¶V�/RFDO�$XWKRULWLHV��LQ�JHQHUDO��WR�WKHDUWV��ERWK�FDSLWDO�DQG�UHYHQXH�x 'LIILFXOWLHV�WKDW�WKH�6$&�KDV�KDG�LQ�WDNLQJ�RQ�QHZ�DQQXDO�UHYHQXH�FOLHQWV�DV�GHPDQGKDV� JURZQ� DFURVV� WKH� FRXQWU\�� DQG� WKDW� /RFDO� $XWKRULWLHV� KDYH� KDG� LQ� SURYLGLQJUHYHQXH�IXQGLQJ� WR�DUWV�RUJDQLVDWLRQV�GXH� WR� UHGXFHG�EXGJHWV�� �$V�D� UHVXOW��QHZ�DUWVYHQXHV�� RUJDQLVDWLRQV� DQG� HYHQWV� KDYH� LQFUHDVLQJO\� KDG� WR� UHO\� RQ� ³KDQG�WR�PRXWK´SURMHFW�IXQGLQJ�UDWKHU�WKDQ�KDYLQJ�D�UHODWLYHO\�VHFXUH�EDVH�RI�FRUH�IXQGLQJ�x 7KH�GHYHORSPHQW�RI�WKH�8QLYHUVLW\�RI�WKH�+LJKODQGV�DQG�,VODQGV��WKH�8+,�0LOOHQQLXP,QVWLWXWH��x $�UHVXUJHQFH�LQ�LQWHUHVW�LQ�WKH�WUDGLWLRQDO�DUWV�LQ�6FRWODQG��SDUWLFXODUO\�PXVLF��DQG�WKHUHODWHG�JURZWK�RI�IHLVHDQ�x 7KH�+LJKODQG�)HVWLYDO��ZLWK�LWV�H[WHQVLYH�SURJUDPPH�RI�HYHQWV�DFURVV�WKH�DUHD�DQG�WKHVWLPXOXV�LW�KDV�JLYHQ�WR�FRPPXQLW\�OHYHO�DUWV�LQLWLDWLYHV�x *URZWK�LQ�VPDOO�VFDOH�SURIHVVLRQDO�DUWV�UHODWHG�DFWLYLWLHV�LQ�WKH�+LJKODQGV�DQG�,VODQGV�LQFOXGLQJ� JDOOHULHV�� WRXULQJ� WKHDWUH� FRPSDQLHV�� UHFRUG� ODEHOV�� HWF�� � 7RJHWKHU� ZLWKLQFUHDVHG�YROXQWDU\�SURYLVLRQ��WKLV�KDV�KHOSHG�WKH�DUHD�WR�DWWUDFW�GLVFULPLQDWLQJ�WRXULVWYLVLWRUV�IURP�WKH�8.�DQG�RYHUVHDV�x ,QFUHDVH�LQ�FLQHPD�SURYLVLRQ�LQ�WKH�+LJKODQGV�DQG�,VODQGV��LQFOXGLQJ�WKH�QHZ�PRELOHFLQHPD��UHIOHFWLQJ�QDWLRQDO�JURZWK�LQ�FLQHPD�JRLQJ�

Page 11: Microsoft Word - Westbrook master _1_.doc

x 6XSSRUW�IRU�WKH�*DHOLF�ODQJXDJH��LQ�SDUWLFXODU��IURP�DQ�HFRQRPLF�LPSDFW�SHUVSHFWLYH�SXEOLF�ILQDQFLDO�VXSSRUW�IRU�*DHOLF�WHOHYLVLRQ�x ,QFUHDVHG�HFRQRPLF�SURVSHULW\��ZKLFK�KDV�JLYHQ�SHRSOH�PRUH�PRQH\�WR�VSHQG�RQ�WKHDUWV�DQG�KDV�JLYHQ�VRPH�SHRSOH��LQFOXGLQJ�WKH�HDUO\�UHWLUHG��PRUH�WLPH�WR�SXW�LQWR�DUWV�UHODWHG�YROXQWDU\�DFWLYLW\�x ,QFUHDVHG� UHFRJQLWLRQ� �HVSHFLDOO\� LQ� UHFHQW� \HDUV�� RI� WKH� QHHG� IRU� FXVWRPLVHGDSSURDFKHV�WR�SURYLGLQJ�IDFLOLWLHV�DQG�DFWLYLWLHV�IRU�WKH�DUHD¶V�\RXQJ�SHRSOH�x ,QFUHDVHG� QHWZRUNLQJ� E\� SURPRWHUV�� FXUUHQWO\� WKURXJK� 3$1� �3URPRWHUV� $UWV1HWZRUN���ZKLFK�KDV�LQFUHDVHG�WKH�DYHUDJH�TXDOLW\�RI�WRXUV�E\�SURIHVVLRQDO�DUWV�JURXSVDQG�LPSURYHG�WKH�PDWFK�EHWZHHQ�ORFDO�GHPDQG�DQG�VXSSO\�

Page 12: Microsoft Word - Westbrook master _1_.doc

��� 0(7+2'2/2*<��� ,QIRUPDWLRQ�*DWKHULQJ,Q� RUGHU� WR� SURYLGH� UREXVW� TXDQWLWDWLYH� LQIRUPDWLRQ� IRU� DQDO\VLV� DQG� WR� PD[LPLVHFRPSDUDELOLW\�ZLWK� WKH� ����� VWXG\�� RXU� GDWD� JDWKHULQJ�ZDV� RUJDQLVHG� DW� D� /RFDO� (QWHUSULVH&RPSDQ\��/(&��DUHD�OHYHO�5HFHQW�H[SHULHQFH�RI�UHVHDUFK�LQ�WKH�DUWV�VHFWRU�VXJJHVWHG�WR�XV�WKDW�D�FRPSUHKHQVLYH�SRVWDOVXUYH\� RI� RUJDQLVDWLRQV�� EXVLQHVVHV� DQG� LQGLYLGXDOV� LQYROYHG� LQ� WKH� DUWV� �ZKLFK� ZDV� D� NH\FRPSRQHQW� RI� WKH� �������� VWXG\�� ZRXOG� QRW� \LHOG� D� VXIILFLHQWO\� KLJK� UHVSRQVH� IRU� RXUSXUSRVHV�x 7DNLQJ� LQWR� DFFRXQW� DOVR� WKH� EXGJHW� DYDLODEOH� IRU� WKH� VWXG\�� ZH� GHFLGHG� �LQDJUHHPHQW�ZLWK�+,(��WR�XVH�D�FRPELQDWLRQ�RI�WKH�IROORZLQJ�FDWHJRULHV�RI�UDZ�PDWHULDO�

x ,QIRUPDWLRQ� �PRGLILHG� DV� DSSURSULDWH�� IURP� SUHYLRXV� UHSRUWV� RQ� DUWV� DFWLYLW\� DQGLPSDFWV�LQ�WKH�+LJKODQGV�DQG�,VODQGV��HJ��LPSDFW�VWXGLHV�RI�WKH�+LJKODQG�)HVWLYDO��x ,QIRUPDWLRQ�SURYLGHG�E\�WKH�6$&�RQ�LWV�FOLHQWV�DQG�RQ�$UWV�/RWWHU\�DVVLVWHG�SURMHFWV�IURP� LWV�$QQXDO� 5HSRUWV� DQG� IURP� VSHFLDOO\� SURGXFHG� DQDO\VLV� E\� /(&� DUHD� RI� LWVJUDQWV�DQG�RWKHU�DVVLVWDQFH��x ,QIRUPDWLRQ�IURP�YHQXHV��SURPRWHUV��RUJDQLVDWLRQV��JURXSV�DQG�LQGLYLGXDOV�ZKLFK�ZDVREWDLQHG� E\� DVVLVWDQWV�ZH� HPSOR\HG�ZKR�ZHUH� IDPLOLDU� ZLWK� WKH� DUWV� VFHQH� LQ� WKHLUORFDO�DUHDV���7KLV�LQIRUPDWLRQ�ZDV�ODUJHO\�REWDLQHG�E\�WHOHSKRQH��DQG�UHOHYDQW�DQQXDOUHSRUWV�� HWF�� ZHUH� UHTXHVWHG� IRU� GHWDLO�� � 7KH� IRXU� GLIIHUHQW� TXHVWLRQQDLUHV� WKDW� ZHUHXVHG�IRU�WKHVH�ORFDO�VXUYH\V�DUH�LQFOXGHG�LQ�$SSHQGL[���x 6XPPDU\�LQIRUPDWLRQ�IURP�WKH�3URPRWHUV�$UWV�1HWZRUN��3$1��RQ�WKH�DFWLYLWLHV�RI�LWVPHPEHUV�x ,QWHUYLHZ� VXUYH\V� ZLWK� JDOOHULHV�� +LJKODQGV� DQG� ,VODQGV�EDVHG� SURIHVVLRQDO� WRXULQJFRPSDQLHV� DQG� UHFRUG� ODEHOV�� � 7KH� TXDQWLWDWLYH� ILQGLQJV� IURP� WKHVH� VXUYH\V� DUHLQFOXGHG� LQ� WKH� RYHUDOO� DQDO\VLV� RI� LPSDFWV�� DQG� WKHPDWLF� FDVH� VWXGLHV� ZHUH� DOVRSURGXFHG��UHSRUWHG�LQ�6HFWLRQ������7KH�TXHVWLRQQDLUHV�XVHG�IRU�WKHVH�WKUHH�VXUYH\V�DUHSURYLGHG�LQ�$SSHQGL[���x ,QWHUYLHZV��IRFXVLQJ�PDLQO\�RQ�VRFLDO�LPSDFW��WKDW�ZHUH�KHOG�LQ�WZR�FDVH�VWXG\�DUHDV��6WRUQRZD\�DQG�&DLWKQHVV���7KHVH�FDVH�VWXGLHV�DUH�UHSRUWHG�LQ�6HFWLRQ����x ,QIRUPDWLRQ� IURP� WKH� +LJKODQGV� DQG� ,VODQGV� 3DUWQHUVKLS� 3URJUDPPH� RIILFH� RQ(XURSHDQ� 5HJLRQDO� 'HYHORSPHQW� )XQG� �(5')�� DQG� (XURSHDQ� 6RFLDO� )XQG� �(6)�DSSURYDOV�WKURXJK�WKH�2EMHFWLYH���3URJUDPPH�����������x 'HWDLOHG�UHFRUGV�IURP�WKH�+LJKODQGV�DQG�,VODQGV�/HDGHU�,,�(8�&RPPXQLW\� ,QLWLDWLYH����������

x IHHGEDFN�GXULQJ�RXU�ILHOGZRUN�FRQILUPHG�WKLV�YLHZ���$UWV�RUJDQLVDWLRQV�KDYH�EHHQ�LQXQGDWHG�LQ�UHFHQW\HDUV�E\�UHTXHVWV�IRU�LQIRUPDWLRQ��FRQVXOWDWLRQ�GRFXPHQWV��LQYLWDWLRQV�WR�DWWHQG�FRQVXOWDWLYH�PHHWLQJVRQ�DUWV�DQG�FXOWXUDO�VWUDWHJLHV��HWF�

Page 13: Microsoft Word - Westbrook master _1_.doc

:H�FRQVWUXFWHG�DQ�LQLWLDO�GDWDEDVH�IURP�+,�$UWV�GDWDEDVHV�RQ�RUJDQLVDWLRQV�DQG�HYHQWV��DQGWKH�0,'$6�GDWDEDVH�IRU�WKH�PXVLF�VHFWRU���7KLV�ZDV�VXSSOHPHQWHG�E\�GDWDEDVHV��PDLOLQJ�OLVWV�HWF�SURYLGHG�E\�/RFDO�$XWKRULW\�DUWV�RIILFHUV�DQG�IURP�RWKHU�VRXUFHV��DQG�HQKDQFHG�IXUWKHU�E\DVNLQJ� NH\� VHFWRUDO� DQG� ORFDO� FRQWDFWV� DERXW� RUJDQLVDWLRQV� DQG� SHRSOH� DFWLYH� LQ� WKHLUJHRJUDSKLFDO�DUHD�RU�DUHD�RI�LQWHUHVW���'DWD�SURWHFWLRQ�UHJXODWLRQV�PDGH�VXFK�DQ�H[HUFLVH�PRUHFRPSOH[�WKDQ�LW�ZRXOG�KDYH�EHHQ�D�IHZ�\HDUV�DJR��DQG�ZH�DOVR�IRXQG�VLJQLILFDQW�GLIIHUHQFHVEHWZHHQ� /(&� DUHDV� DQG� SDUWLFXODU� DUWIRUPV� LQ� WKH� DYDLODELOLW\� RI� EDVHOLQH� LQIRUPDWLRQ�*HQHUDOO\��NQRZOHGJH�DERXW�DUWV�DFWLYLW\�LV�PXFK�PRUH�FRPSUHKHQVLYH�WKDQ�WHQ�\HDUV�DJR��EXWLQGLYLGXDO� GDWDEDVHV� WHQG� WR� EH� RXW�RI�GDWH�� SDWFK\� LQ� FRYHUDJH�� DQG� VXEMHFW� WR� GXSOLFDWHHQWULHV�� � 2EWDLQLQJ� D� UHDVRQDEO\� DFFXUDWH� SLFWXUH� DFURVV� WKH� +LJKODQGV� DQG� ,VODQGV� RI� WKHYHQXHV��RUJDQLVDWLRQV�DQG�LQGLYLGXDOV�LQYROYHG�PRUH�WKDQ�WDQJHQWLDOO\�LQ�WKH�DUWV�SURYHG�WR�EHYHU\�GLIILFXOW�DQG�WLPH�FRQVXPLQJ��DQG�ZH�KDG�WR�PDNH�DVVXPSWLRQV�DERXW�DFWLYLW\�LQ�FHUWDLQJHRJUDSKLFDO�DUHDV�EDVHG�RQ�FRPSDUDELOLW\�ZLWK�RWKHU�DUHDV�ZKHUH�ZH�ZHUH�FRQILGHQW�WKDW�ZHREWDLQHG� JRRG� LQIRUPDWLRQ�� � 7KHVH� GLIILFXOWLHV� VXJJHVW� WKDW� WKHUH� ZRXOG� EH� EHQHILW� LQ� DQRUJDQLVDWLRQ� �HJ�� +,� $UWV�� WDNLQJ� UHVSRQVLELOLW\� IRU� FRPSLOLQJ� DQG� PDLQWDLQLQJ� DFRPSUHKHQVLYH�GDWDEDVH�IRU�XVH�E\�WKH�DUWV�VHFWRU�DV�D�ZKROH��DV�IDU�DV�WKLV�ZRXOG�EH�SRVVLEOHXQGHU�GDWD�SURWHFWLRQ�OHJLVODWLRQ����� &RYHUDJH�RI�WKH�6WXG\(YHQ� ZLWK� DFFXUDWH� LQIRUPDWLRQ� RQ� VSHFLILF� HYHQWV� DQG� WKH� DFWLYLWLHV� RI� SDUWLFXODURUJDQLVDWLRQV�DQG�LQGLYLGXDOV��KRZHYHU��WKH�JURVVLQJ�XS�RI�LPSDFWV�ZRXOG�KDYH�EHHQ�VXEMHFWWR�D�KLJK�PDUJLQ�IRU�HUURU�KDG�ZH�QRW�PDGH�WKH�HIIRUW�WR�FRQVWUXFW�D�UHDVRQDEO\�FRPSUHKHQVLYHEDVH� RI� IDFLOLWLHV� DQG� DFWLYLWLHV�� � 7KLV� EDVH� FRPSULVHG� WKH� TXDOLI\LQJ� DFWLYLWLHV� OLVWHG� LQ$SSHQGL[����JXLGHG�E\�QRWHV�WKDW�KHOSHG�WR�VHSDUDWH�LQFOXGHG�IURP�H[FOXGHG�DFWLYLWLHV���7KHVHJXLGHOLQHV�ZHUH�GHYHORSHG�LQ�FRQVXOWDWLRQ�ZLWK�WKH�VWXG\¶V�6WHHULQJ�*URXS�DQG�WKH�6$&�7KH�&UDIWV�VHFWRU�ZDV�H[FOXGHG�IURP�WKH�DQDO\VLV�EHFDXVH��DV�D�PDMRU�HPSOR\PHQW�VHFWRU�LQWKH�+LJKODQGV� DQG� ,VODQGV�� LW� LQFOXGHV� ³LQGXVWULDO´� SURGXFWLRQ�� DQG� EHFDXVH� LWV� YDOXH� WR� WKH6FRWWLVK�HFRQRP\�LV�EHLQJ�FRYHUHG� LQ�D�VWXG\�E\�6WLUOLQJ�8QLYHUVLW\�� �7KH�&UHDWLYH�&RQWHQWVHFWRU�ZDV�H[FOXGHG�EHFDXVH�LW�ZDV�FRYHUHG�E\�D�VXUYH\�WKDW�ZDV�FDUULHG�RXW�IRU�+,(�LQ�WKHODWWHU� SDUW� RI� ������ � 7KH� UHVXOWV� IURP� WKLV� VXUYH\� DUH�� KRZHYHU�� WDNHQ� LQWR� DFFRXQW� LQ� RXUDJJUHJDWH� DQDO\VLV�� � 2WKHU� DFWLYLWLHV�� LQFOXGLQJ� RSHUDWLQJ� PXVHXPV� DQG� OLEUDULHV�� ZHUHH[FOXGHG�EHFDXVH�WKH\�ZHUH�GHHPHG�WR�UHODWH�WR�FXOWXUH�UDWKHU�WKDQ�WKH�DUWV�RU�EHFDXVH�WKH�DUWVDUH�D�UHODWLYHO\�VPDOO�FRPSRQHQW�7KH�HFRQRPLF�LPSDFWV� WKDW�ZH�LGHQWLILHG�LQFOXGHG�DVVRFLDWHG�DFWLYLWLHV�ZLWKLQ�DUWV� IDFLOLWLHV�HJ�� FDWHULQJ� DQG� UHWDLOLQJ��ZKHUH� WKH� HPSOR\PHQW� LQYROYHG� FRXOG� EH� UHODWHG� GLUHFWO\� WR� WKHYLVLW� WR� WKH� DUWV� IDFLOLW\� RU� WR� WKH� H[LVWHQFH� RI� WKH� RSHUDWLRQ�� � 2XU� DQDO\VLV� RI� HPSOR\PHQWLPSDFWV�LV�SURYLGHG�LQ�WHUPV�RI�IXOO�WLPH�HTXLYDOHQW�MREV��IWH¶V��,Q�RUGHU� WR�JURVV�XS�IURP�WKH�UDZ�PDWHULDO� WKDW�ZH�ZHUH�DEOH� WR�REWDLQ��ZH�XVHG�D�VWUDWLILHGDSSURDFK���LH��E\�/(&�DUHD�ZH�JURVVHG�XS�ODUJHU�VFDOH�DQG�VPDOOHU�VFDOH�DFWLYLWLHV�RI�D�VLPLODUW\SH�VHSDUDWHO\�� �&RQVXOWDWLRQ�ZLWK� ORFDO�FRQWDFWV��SDUWLFXODUO\�/RFDO�$XWKRULW\�DUWV�RIILFHUV�KHOSHG�XV�WR�HVWLPDWH�ILJXUHV�IRU�FHUWDLQ�NH\�IDFLOLWLHV�DQG�HYHQWV�IRU�ZKLFK�ZH�GLG�QRW�KDYHXS�WR�GDWH�LQIRUPDWLRQ�,Q�RUGHU�IRU�RXU�DQDO\VLV� WR�EH�DV�FRQWHPSRUDU\�DV�SRVVLEOH�DQG�WR�ILW� WKH�LQWURGXFWLRQ�RI�+,$UWV¶�FRPSXWHULVHG�HYHQWV�GDWDEDVH�LQ�2FWREHU�������ZH�DWWHPSWHG�WR�REWDLQ�LQIRUPDWLRQ�WKDWUHODWHG�DV�FORVHO\�DV�SRVVLEOH�WR�WKH�\HDU�2FWREHU������WR�6HSWHPEHU��������6RPH�GDWD�WKDW�ZH

Page 14: Microsoft Word - Westbrook master _1_.doc

REWDLQHG�LQ�SUDFWLFH�UHODWHG�WR�D�GLIIHUHQW�WLPH�SHULRG��HJ��WKH������FDOHQGDU�\HDU�RU�WKH�$SULO�����WR�0DUFK������ILQDQFLDO�\HDU���DQG�WKLV�ZDV�DGMXVWHG�ZKHUH� UHTXLUHG� WR� ILW� LQ�ZLWK� WKHVWXG\�\HDU���7KLV�VWXG\�SHULRG�LQFOXGHG�PRVW�RI�WKH�0LOOHQQLXP�\HDU���������EXW�WKLV�GLG�QRWVHHP�WR�KDYH�KDG�D�VLJQLILFDQW�QHW�LPSDFW���DOWKRXJK�ZH�H[FOXGHG�FHUWDLQ�VSHFLILF�0LOOHQQLXPFHOHEUDWRU\�HYHQWV�IURP�WKH�DQDO\VLV��HJ��+LJKODQG�+RJPDQD\��LQ�,QYHUQHVV��$OWKRXJK�� DV� QRWHG� DERYH�� ZH� DWWHPSWHG� WR� PDNH� HVWLPDWHV� IRU� FHUWDLQ� DUWV� DFWLYLWLHV� LQSDUWLFXODU� /(&� DUHDV� WR� FRYHU� IRU� LQVXIILFLHQW� GDWD�� WKHUH� ZLOO� LQHYLWDEO\� EH� JDSV� LQ� RXULQIRUPDWLRQ��ZKLFK�PHDQV�WKDW�RXU�RYHUDOO�HVWLPDWHV�RI�HFRQRPLF�LPSDFW��PHPEHUVKLS�RI�DUWVRUJDQLVDWLRQV�� YROXQWDU\� LQSXW� HWF�� ZLOO� WHQG� WR� XQGHUVWDWH� WKH� DFWXDO� DJJUHJDWH� DFWLYLW\TXDOLI\LQJ�DV�DUWV�IRU� WKH�SXUSRVHV�RI� WKH�VWXG\��DV�ZHOO�DV� WKRVH�DVSHFWV�QRW�FRYHUHG�E\� WKHVWXG\�IRU�WKH�UHDVRQV�JLYHQ�LQ�6HFWLRQ���DERYH��,Q�SDUWLFXODU��WKH�IROORZLQJ�W\SHV�RI�HYHQW�DQG�H[KLELWLRQ�ZHUH�YHU\�GLIILFXOW�WR�FDSWXUH�LQ�IXOO�

x 2SHQ�DLU�SHUIRUPDQFHV��HJ��E\�SLSH�EDQGV��DQG�DUWV�HYHQWV� WKDW�ZHUH�DVVRFLDWHG�ZLWKJDODV�DQG�RWKHU�FRPPXQLW\�HYHQWV�WKDW�ZRXOG�QRW�JHQHUDOO\�EH�UHJDUGHG�DV�DUWLVWLF�x 8QDGYHUWLVHG�PXVLFDO�6FRWWLVK�HQWHUWDLQPHQW�HYHQWV�LQ�KRWHOV�DQG�RWKHU�YHQXHV��HJ��LQ�KRXVH�HQWHUWDLQPHQW�LQ�FRDFK�WRXU�KRWHOV��x 7HPSRUDU\�DUW�H[KLELWLRQV� LQ�PXVHXPV�DQG�RWKHU�YHQXHV�QRW� UHJDUGHG�DV�DUWV�UHODWHGIRU� WKH�SXUSRVHV�RI� WKH�VWXG\���H[FHSW�ZKHUH� IHDWXUHG� LQ�+,�$UWV¶�HYHQWV�GDWDEDVH�RURWKHUZLVH�EURXJKW�WR�RXU�DWWHQWLRQ�x :RUNVKRSV� RUJDQLVHG� ORFDOO\� �QRUPDOO\� IRU� \RXQJ� SHRSOH��� RWKHU� WKDQ� E\� YLVLWLQJWRXULQJ�JURXSV�ZKHUH�WKH�ZRUNVKRS�ZDV�DGYHUWLVHG�DV�SDUW�RI�WKHLU�LWLQHUDU\�x &RQFHUWV� KHOG� LQ� FKXUFKHV�� RWKHU� WKDQ� WKRVH� SXW� RQ� E\� DUWV� RUJDQLVDWLRQV� DQG� RWKHUSURPRWHUV�FRYHUHG�E\�RXU�VXUYH\�

7KH�GLUHFW�HPSOR\PHQW�LPSDFWV�IURP�VRPH�RI� WKH�DERYH�DFWLYLWLHV�ZLOO��KRZHYHU��KDYH�EHHQLQFRUSRUDWHG�LQ�RXU�HPSOR\PHQW�DQDO\VLV���LH��LQ�HVWLPDWLQJ�WKH�QXPEHU�RI�ZRUNLQJ�DUWLVWV�E\/(&� DUHD� LQ� WHUPV� RI� IXOO�WLPH� HTXLYDOHQW� MREV�� WKHLU� LQYROYHPHQW� LQ� VXFK� FDWHJRULHV� RIDFWLYLW\�ZLOO�KDYH�EHHQ�WDNHQ�LQWR�DFFRXQW�1HYHUWKHOHVV�� WKH� PRVW� GLIILFXOW� DVSHFW� RI� WKH� VWXG\� SURYHG� WR� EH� EXLOGLQJ� XS� D� SURILOH� RILQGLYLGXDO� ZRUNLQJ� DUWLVWV� �� PXVLFLDQV�� YLVXDO� DUWLVWV�� ZULWHUV�� HWF� �� DQG� DVVHVVLQJ� IXOO�WLPHHTXLYDOHQFH���(YHQ�LQ�WKH�PXVLF�VHFWRU��IRU�ZKLFK�0,'$6�KDV�SURGXFHG�D�GHWDLOHG�GDWDEDVH�RILQGLYLGXDO� PXVLFLDQV� DQG� JURXSV� RI� PXVLFLDQV�� WKHUH� LV� D� ORW� RI� FDVXDO� DFWLYLW\� �� RIWHQ� E\SHRSOH� ZLWK� IXOO�WLPH� MREV� RXWZLWK� WKH� DUWV� �RU� WHDFKHUV�� �� WKDW� FDQ� EH� RI� KLJK� TXDOLW\� DQGDWWUDFW�SD\LQJ�DXGLHQFHV��EXW�ZKHUH�WKH�SHRSOH�FRQFHUQHG�DUH�QRW�RQ�WKH�0,'$6�GDWDEDVH���,QWKH� YLVXDO� DUWV�� WKHUH� DUH� KXQGUHGV� RI� LQGLYLGXDOV�ZKR�ZRUN� RQ� D� YHU\� SDUW�WLPH�� RU� KREE\�EDVLV�� EXW� VHOO� DW� OHDVW� VRPH� RI� WKHLU� ZRUN�� DQG� ZKR� DUH� QRW� LQFOXGHG� LQ� GDWDEDVHV� RUGLUHFWRULHV�� H[FHSW� ZKHUH� D� ORFDO� UHJLVWHU� PLJKW� KDYH� EHHQ� GUDZQ� XS� E\� DQ� LQWHUHVWHGRUJDQLVDWLRQ��HJ��D�OLVW�RI�YLVXDO�DUWLVWV�ZDV�SURYLGHG�WR�XV�E\�2UNQH\�&ROOHJH����0HPEHUVKLSQXPEHUV�RI�ORFDO�DVVRFLDWLRQV�RI�DUWLVWV�DOVR�KHOSHG�LQ�TXDQWLI\LQJ�SDUWLFLSDWLRQ�([FOXGLQJ�DUWLVWV�ZKRVH�ZRUN�PLJKW�UHSUHVHQW����������RI�DQ�IWH�ZLOO�PDNH�OLWWOH�GLIIHUHQFH�WRWKH�DJJUHJDWH�DQDO\VLV�RI�WKH�GLUHFW�HPSOR\PHQW�LPSRUWDQFH�RI�WKH�DUWV�LQ�WKH�+LJKODQGV�DQG

Page 15: Microsoft Word - Westbrook master _1_.doc

,VODQGV� �JLYHQ� WKH�PDUJLQ� IRU�HUURU� LQ� WKH� VWXG\��� �7KLV�DFWLYLW\�� KRZHYHU�� LV� RIWHQ� D� FULWLFDOIDFWRU� LQ� WKH� OLIHVW\OH�RI� WKH� LQGLYLGXDO�RU� WKH� IDPLO\�� DQG� WDNLQJ� DFFRXQW�RI� WKLV�SRSXODWLRQJURZWK�RU�UHWHQWLRQ�HIIHFW�DGGV�D�IXUWKHU�GLPHQVLRQ�WR�WKH�LPSDFW�RI�WKH�DUWV�LQ�WKH�+LJKODQGVDQG� ,VODQGV�� �/RFDO� HPSOR\PHQW� OHYHOV� LQ� UXUDO� DUHDV� DUH� UHODWHG� WR� WKH� VL]H� RI� WKH� UHVLGHQWSRSXODWLRQ�WKURXJK�LWV�GHPDQG�IRU�ORFDOO\�SURGXFHG�VHUYLFHV��DV�ZHOO�DV�WR�WKH�WRXULVP�PDUNHWDQG�WR�PDUNHWV�IRU�JRRGV�DQG�VHUYLFHV�RXWZLWK�WKH�ORFDO�DUHD�$QRWKHU� GLIILFXOW� DVSHFW� RI� WKH� VWXG\� SURYHG� WR� EH� REWDLQLQJ� LQIRUPDWLRQ� RI� UHDVRQDEOHDFFXUDF\� RQ� WKH� HDUQLQJV� RI�PXVLFLDQV�� YLVXDO� DUWLVWV�� ZULWHUV�� JDOOHU\� SURSULHWRUV� DQG� RWKHUVHOI�HPSOR\HG�SHRSOH���:KLOVW�DUWLVWV�DQG�VPDOO�EXVLQHVVHV�ZHUH�ZLOOLQJ�WR�EH�LQWHUYLHZHG�DQGWR�SURYLGH�LQIRUPDWLRQ�RQ�WKHLU�DFWLYLW\��WKH\�ZHUH�YHU\�UHOXFWDQW�WR�GLYXOJH�ILJXUHV�IRU� WKHLUHDUQLQJV��RWKHU�WKDQ�WR�LQGLFDWH�WKDW�WKHLU�UDWHV�RI�HDUQLQJV�WHQG�WR�EH�ORZ����+DYLQJ�GLVFRYHUHGHDUO\� LQ� WKH� ILHOGZRUN�VWDJH� WKDW� WKLV� UHOXFWDQFH�ZDV�DIIHFWLQJ�NHHQQHVV� WR�FR�RSHUDWH� LQ� WKHVWXG\�DV�D�ZKROH��WKHUHIRUH��ZH�JDYH�OHVV�HPSKDVLV�WKDQ�RULJLQDOO\�LQWHQGHG�WR�WKLV�DVSHFW�RIWKH� VWXG\�� � 2XU� HVWLPDWHV� RI� LQGLYLGXDOV¶� HDUQLQJV� DUH� WKHUHIRUH� DSSUR[LPDWH�� DQG� DUH� XVHGPDLQO\�WR�KHOS�GHULYH�PXOWLSOLHUV�LQ�RUGHU�WR�HVWLPDWH�LQGXFHG�HPSOR\PHQW�IURP�WKH�VSHQGLQJLQ� WKH� +LJKODQGV� DQG� ,VODQGV� HFRQRP\� RI� WKHVH� LQGLYLGXDOV�� � ³%ODFN� HFRQRP\´� DFWLYLW\� LVLQFOXGHG�LQ�RXU�DQDO\VLV�RI�HYHQWV�DQG�RI�WKH�IXOO�WLPH�HTXLYDOHQW�ZRUN�WKDW�WKH�DUWV�SURYLGH�WR+LJKODQGV� DQG� ,VODQGV� UHVLGHQWV�� DOWKRXJK� ZH� ZHUH� QRW� DEOH� WR� LGHQWLI\� EODFN� HFRQRP\HDUQLQJV�VHSDUDWHO\���� 3DUWLFLSDWRU\�(YHQWV7KH� HYHQWV� WKDW� ZH� DQDO\VH� LQ� 6HFWLRQ� �� FRPSULVH� �PDLQO\�� SXEOLF� SHUIRUPDQFHV�� ZLWKZRUNVKRSV� LQFOXGHG�ZKHUH� JLYHQ� E\� YLVLWLQJ� SHUIRUPHUV� DQG� SURPLQHQWO\� DGYHUWLVHG� WR� WKHSXEOLF���3DUWLFLSDWRU\�³HYHQWV´�DUH�DOVR�DQ�LPSRUWDQW�DVSHFW�RI�DUWV�SURYLVLRQ�LQ�WKH�+LJKODQGVDQG� ,VODQGV�� KRZHYHU�� LQFOXGLQJ� GDQFH� FODVVHV�� VXPPHU� DFWLYLW\� SURJUDPPHV� IRU� FKLOGUHQ�FRPSHWLWLYH�PXVLF�IHVWLYDOV��)HLVHDQ��FOXE�VHVVLRQV��HWF���7KLV�DFWLYLW\�LV�FRYHUHG�LQ�RXU�VRFLDODQDO\VLV� WKURXJK� VWDWLVWLFV� RQ� WKH�PHPEHUVKLSV� RI� RUJDQLVDWLRQV�� YROXQWDU\� WLPH� LQSXWV�� HWF�ZKLOH�SDLG�WXWRULQJ�DQG�DGPLQLVWUDWLRQ�DUH�LQFRUSRUDWHG�LQ�WKH�HPSOR\PHQW�DQDO\VLV��LQFOXGLQJDUWLVWV�LQ�UHVLGHQFH��IHLV� WXWRULQJ��HWF��� �$Q�LQGLFDWLRQ�RI� WKH�LPSRUWDQFH�RI�SDUWLFLSDWRU\�DUWVDFWLYLW\� LV� SURYLGHG� E\� DQ� DQDO\VLV� RI� VXFK� HYHQWV� LQ� WKH� 5RVV� DQG�&URPDUW\�$UWV� 6WUDWHJ\FDUULHG� RXW� E\� ,QGHSHQGHQW� 1RUWKHUQ� &RQVXOWDQWV� LQ� ������ ZKLFK� LGHQWLILHG� WKH� IROORZLQJSDUWLFLSDWRU\�³HYHQWV´�

/LWHUDWXUH ��'UDPD ��'DQFH ���0XVLF ���9LVXDO�$UWV ��&KLOGUHQ¶V ���*HQHUDO ��BBBB�����BBBB

Page 16: Microsoft Word - Westbrook master _1_.doc

7KHVH� ILJXUHV� ZLOO� EH� KLJKHU� �SHU� FDSLWD�� WKDQ� IRU� PRVW� RWKHU� SDUWV� RI� WKH� +LJKODQGV� DQG,VODQGV��DV�WKH�IRUPHU�5RVV�DQG�&URPDUW\�'LVWULFW�&RXQFLO�JDYH�D�KLJK�SULRULW\�WR�SURPRWLQJDFWLYH� LQYROYHPHQW� LQ� WKH� DUWV�� � 7KLV� LQFOXGHG� HPSOR\LQJ� DUWLVWV�LQ�UHVLGHQFH� LQ� VSHFLILFDUWIRUPV��DQG�LQGHHG��WKH�ZRUN�RI�WKHVH�SHRSOH��HJ��LQ�VFKRROV��LV�QRW�IXOO\�HQFDSVXODWHG�LQ�WKHDERYH�VWDWLVWLFDO�DQDO\VLV���� (FRQRPLF�DQG�6RFLDO�,PSDFWV�LQ�3HUVSHFWLYH)RU� WKH� SXUSRVHV� RI� WKLV� VWXG\�� ³VRFLDO� LPSDFWV´� FDQ� EH� WDNHQ� WR� FRPSULVH� D� UDQJH� RI� QRQ�HFRQRPLF�EHQHILWV�WKDW�+LJKODQGV�DQG�,VODQGV�FRPPXQLWLHV�DQG�UHVLGHQWV�GHULYH�IURP�WKH�DUWV�� WKURXJK� DWWHQGLQJ� HYHQWV� DQG� H[KLELWLRQV�� SDUWLFLSDWLQJ� LQ� DUWLVWLF� DFWLYLW\�ZLWKLQ� WKH� DUHD�UHFHLYLQJ�WXLWLRQ��HWF�,W� LV� LPSRUWDQW� WR� DSSUHFLDWH� WKDW� FHUWDLQ� DVSHFWV� RI� DUWLVWLF� DFWLYLW\� LQ� WKH� +LJKODQGV� DQG,VODQGV�JHQHUDWH� VPDOO� �RU� HYHQ�QHJDWLYH��GLUHFW QHW� HFRQRPLF� LPSDFW�ZLWKLQ� WKH� DUHD�� �)RUH[DPSOH�� D�JURXS�RI�YLVLWLQJ� SHUIRUPHUV� IURP� � RXWZLWK� WKH�+LJKODQGV� DQG� ,VODQGV� SURYLGHGZLWK� KRVSLWDOLW\� E\� ORFDO� IDPLOLHV� ZKLOH� VWD\LQJ� LQ� D� ORFDOLW\� WR� JLYH� D� SHUIRUPDQFH� DW� DYROXQWDU\�YHQXH��DQG�FKDUJLQJ�PRUH�WKDQ�WKH�ER[�RIILFH�WDNLQJV�DV�IHHV��ZLOO�SURYLGH�OLWWOH�RUQR� QHW� UHYHQXH� WR� WKH� DUHD�� � ,QGHHG�� UHVLGHQWV� EX\LQJ� WLFNHWV� IRU� WKH� HYHQW�PLJKW� RWKHUZLVHKDYH�VSHQW�WKLV�PRQH\�RQ�ORFDO�JRRGV�DQG�VHUYLFHV�

Page 17: Microsoft Word - Westbrook master _1_.doc

��

��� 1$7,21$/�$1'�5(*,21$/�&217(;77KH�FRQWHPSRUDU\�HFRQRPLF�DQG�VRFLDO�LPSDFWV�RI�WKH�DUWV�LQ�WKH�+LJKODQGV�DQG�,VODQGV��DQGFKDQJHV�LQ�LPSDFWV�VLQFH�������FDQ�EH�UHODWHG�WR�D�FRPELQDWLRQ�RI�ORFDO��UHJLRQDO�DQG�QDWLRQDOIDFWRUV�� � 7KHVH� IDFWRUV� LQFOXGH� WKH� DYDLODELOLW\� RI� VXSSRUW� IXQGLQJ�� VRFLDO� WUHQGV�� LQFUHDVLQJSURVSHULW\��DQG�D�VWUHQJWKHQLQJ�RI�DVSHFWV�RI�6FRWODQG¶V�QDWLRQDO�LGHQWLW\���LQFOXGLQJ�FRQFHUQVIRU� WKH� IXWXUH�RI� WKH�*DHOLF� ODQJXDJH�DQG� LQWHUHVW� LQ� WUDGLWLRQDO� FXOWXUH� �SDUWLFXODUO\�PXVLF��$W�WKH�8.�OHYHO��WKHUH�LV�DQ�LQFUHDVLQJ�UHFRJQLWLRQ�RI�WKH�FXOWXUDO�VHFWRU¶V�HFRQRPLF�SRWHQWLDO�DOWKRXJK�ZKHUH�WKLV�LV�UHDOLVHG�LQ�WKH�LQWHUQDWLRQDO�PDUNHW�SODFH�WKURXJK�WKH�PHGLD�RU�WKURXJKOLYH�SHUIRUPDQFHV�DQG�H[KLELWLRQV�LQ�FLWLHV�VXFK�DV�/RQGRQ�DQG�(GLQEXUJK��WKHUH�LV�OLWWOH�VSLQ�RII�EHQHILW�IRU�WKH�+LJKODQGV�DQG�,VODQGV�DV�WKH�GLUHFW�MREV�LQYROYHG�DUH�GLVWDQW�IURP�WKH�DUHD���� 7KH�6FRWWLVK�3DUOLDPHQW7KH� IXOO� H[WHQW� RI� WKH� LPSDFW� RI� WKH� QHZ�6FRWWLVK� 3DUOLDPHQW� KDV� \HW� WR� EH� IHOW� E\� WKH� DUWVVHFWRU��DOWKRXJK�WKHUH�DUH�DOUHDG\�VLJQV�WKDW�VLJQLILFDQW�RSSRUWXQLWLHV�ZLOO�EH�FUHDWHG�$OUHDG\��WKH�HPSKDVLV�RQ�HQVXULQJ�WKDW�VRFLDO�LQFOXVLRQ LV�DGRSWHG�HIIHFWLYHO\�DW�D�FRUSRUDWHOHYHO�ZLWKLQ�WKH�([HFXWLYH�KDV�OHG�WR�

x 7KH�DUWV�VHFWRU��DUWV�SURMHFWV�DQG�DUWV�GHYHORSPHQW��EHLQJ�PDGH�FRQVFLRXV�RI�LWV�HIIHFWRQ�VRFLDO�LQFOXVLRQ�LVVXHV��DQG��SHUKDSV�PRUH�VLJQLILFDQWO\��x 2WKHU� VHFWRUV� RI� JRYHUQPHQW� �� LQFOXGLQJ� HGXFDWLRQ�� VRFLDO� ZRUN�� DQG� KRXVLQJ� �EHFRPLQJ� PRUH� DZDUH� RI� WKH� RSSRUWXQLWLHV� RIIHUHG� E\� WKH� DUWV� WR� DGYDQFH� VRFLDOLQFOXVLRQ�ZLWKLQ�WKRVH�VHFWRUV�

7KH� GHYHORSPHQW� RI� 6RFLDO� ,QFOXVLRQ� 3DUWQHUVKLSV� LQ� XUEDQ� DQG� UXUDO� DUHDV� WKURXJKRXW6FRWODQG� KDV� FUHDWHG� DZDUHQHVV� RI� WKH� RSSRUWXQLW\� WR� GHYHORS� D� PRUH� KROLVWLF� DSSURDFKWRZDUGV�WKH�GHOLYHU\�RI�VHUYLFHV��RI�ZKLFK�WKH�DUWV�DUH�FRQVLGHUHG�DQ�LPSRUWDQW�SDUW���6KRXOGWKLV�DSSURDFK�SURYH�VXFFHVVIXO���DQG�WKH�DUWV�EH�FRQVLGHUHG�DV�DQ�LQWHJUDO�SDUW�RI�VRFLDO�VHUYLFHGHOLYHU\���WKLV�ZLOO�FUHDWH�D�SRWHQWLDOO\�YDOXDEOH�RSSRUWXQLW\�WR�HVWDEOLVK�ERWK�GLUHFW�SURYLVLRQDQG�VXSSRUW�IRU�WKH�DUWV�PRUH�VHFXUHO\�ZLWKLQ�WKH�SXEOLF�VHFWRU��WKURXJKRXW�6FRWODQG�DV�ZHOO�DVLQ�WKH�+LJKODQGV�DQG�,VODQGV�7KH�([HFXWLYH�KDV�DOVR�UHLQIRUFHG�WKH�8.�JRYHUQPHQW¶V�FRPPLWPHQW�WR�HGXFDWLRQ���7KLV�KDVOHG� WR� LQFUHDVHG� DOORFDWLRQ� RI� ERWK� UHYHQXH� DQG� FDSLWDO� UHVRXUFHV� WR� SULPDU\� DQG� VHFRQGDU\HGXFDWLRQ�� XVXDOO\� IRU� D� VSHFLILF� SXUSRVH� RU� QDWLRQDO� SURMHFW�� � 7KH� SURSRVDO� WR� LQWURGXFHµFXOWXUDO�FKDPSLRQV¶�ZLWKLQ� VHFRQGDU\� VFKRROV� LV�SHUKDSV� WKH�RQH� VSHFLILF� DUWV� FRPPLWPHQWPDGH�WR�GDWH���$V�\HW�LW�LV�QRW�FOHDU�LI�WKHVH�SRVWV�ZLOO�EH�QHZ�RU�VHFRQGHG��RU�ZKDW�WKHLU�UHPLWZLOO�EH��DOWKRXJK�LW�LV�H[SHFWHG�WKDW�FR�RUGLQDWLRQ�RI�DUWV� LQIRUPDWLRQ�DQG�DUWV�DFWLYLWLHV�ZLOOEH�DQ� LPSRUWDQW�SDUW�� � ,Q�DGGLWLRQ�� WKHUH�PD\�EH� FRQWLQXLQJ�RSSRUWXQLWLHV�ZLWKLQ� WKH� UROOLQJSURJUDPPH� RI� HVWDEOLVKLQJ� µVSHFLDOLVW� FHQWUHV¶� DWWDFKHG� WR� VHFRQGDU\� VFKRROV�� VXSSRUWHG� E\WKH� ([FHOOHQFH� )XQG�� � 2QH� RI� WKH� PRVW� UHFHQW� RI� WKHVH� LV� WKH� WUDGLWLRQDO� PXVLF� FRXUVH� DW3ORFNWRQ�+LJK�6FKRRO�,Q� WKH������([HFXWLYH� UH�VKXIIOH�� UHVSRQVLELOLW\� IRU� WKH�$UWV�ZDV�PRYHG� IURP�(GXFDWLRQ� WR(QYLURQPHQW��DQG�WKH�SRUWIROLR�LV�QRZ�VKDUHG�ZLWK�VSRUW���6RPH�REVHUYHUV�VXJJHVWHG�WKLV�ZDVD�GRZQ�JUDGLQJ�RI�WKH�LPSRUWDQFH�RI�WKH�DUWV�ZLWKLQ�WKH�([HFXWLYH�DQG�WKDW�VXEVHTXHQW�VRFLDOVSHQGLQJ�SULRULWLHV�PD\�VTXHH]H�H[LVWLQJ�DUWV�IXQGLQJ���$V�\HW�WKLV�KDV�QRW�KDSSHQHG��DQG�WKH

Page 18: Microsoft Word - Westbrook master _1_.doc

��

JUDQW� WR� WKH� 6FRWWLVK� $UWV� &RXQFLO� �6$&�� IRU� �������� LQGHHG� LQFUHDVHG� DERYH� WKH� UDWH� RILQIODWLRQ��WKRXJK�ZLWK�QR�FKDQJH�IRU�WKH�IROORZLQJ�WZR�\HDUV����7KLV�LQFUHDVH�LV�QRW�DV�JUHDW�QHYHUWKHOHVV��DV�WKDW�IRU�DUWV�IXQGLQJ�LQ�(QJODQG��HJ��IRU�UHJLRQDO�WKHDWUHV���� 7KH�1DWLRQDO�&XOWXUDO�6WUDWHJ\7KH�3DUOLDPHQW¶V�SXEOLFDWLRQ�RI�WKH�1DWLRQDO�&XOWXUDO�6WUDWHJ\�LQ������KDV�SHUKDSV�JLYHQ�WKHPRVW�VLJQLILFDQW�VLJQDOV�RI�WKH�IXWXUH�FRQWH[W�IRU�WKH�DUWV�LQ�6FRWODQG���,Q�HVVHQFH��WKH�6WUDWHJ\LV�PRUH� RI� D� VWDUWLQJ� SRLQW� IRU� IXWXUH� GHYHORSPHQWV� WKDQ� D� GHILQLWLYH� EOXHSULQW� LQ� LWVHOI�� � ,WFROODWHV� DQG� GHPRQVWUDWHV� WKH� EUHDGWK� RI� WKH� 6FRWWLVK� FXOWXUDO� VFHQH� DW� WKH� WXUQ� RI� WKH0LOOHQQLXP�� �+RZHYHU�� LW� DOVR�PDNHV� VSHFLILF� UHFRPPHQGDWLRQV�DQG� LGHQWLILHV�D�QXPEHU�RIDUHDV� ZKHUH� FKDQJHV� PD\� WDNH� SODFH� ±� VRPH� RI� ZKLFK� ZLOO� LPSDFW� RQ� WKH� +LJKODQGV� DQG,VODQGV���7KH�UHYLHZ�DQG�VXEVHTXHQW�LPSOHPHQWDWLRQ�RI�WKH�6WUDWHJ\�ZLOO�WDNH�SODFH�RYHU�WKHQH[W�WKUHH�WR�ILYH�\HDUV�7KH�6WUDWHJ\�HPSKDVLVHV�WKH�([HFXWLYH¶V�VRFLDO�LQFOXVLRQ�DQG�OLIHORQJ�OHDUQLQJ�SULRULWLHV��ZLWKH[SOLFLW� HQFRXUDJHPHQW� µWR� SURPRWH� HGXFDWLRQ� LQ� DQG� WKURXJK� WKH� DUWV«¶� ZLWKLQ� WKHFXUULFXOXP�DW�DOO�OHYHOV���2WKHU�VSHFLILF�FRPPLWPHQWV�ZLWK�GLUHFW�UHOHYDQFH�WR�WKH�+LJKODQGVDQG�,VODQGV�LQFOXGH�

x ,QYHVWLJDWLQJ�WKH�IHDVLELOLW\�RI�LGHQWLI\LQJ�QDWLRQDO�FHQWUHV�RI�H[FHOOHQFH�LQ�WUDGLWLRQDO�DUWV�x 7DNLQJ�VWHSV�WR�GHYHORS�D�QDWLRQDO�WKHDWUH�IRU�6FRWODQG�x 3URPRWLQJ� SDUWQHUVKLSV� E\� SXEOLF� DQG� SULYDWH� ERGLHV� WKDW� VXSSRUW� WKH� SURGXFWLRQ� RI� WKHKLJKHVW�VWDQGDUG�RI�FXOWXUDO�ZRUN�x 6XSSRUWLQJ�WKH�GHYHORSPHQW�RI�6FRWODQG¶V�ILOP�LQGXVWU\�x :RUNLQJ�WR�SURPRWH�WKH�FRQWULEXWLRQ�RI�QHZ�WHFKQRORJLHV�WR�FXOWXUDO�OLIH�x 3URPRWLQJ�DFWLYLW\�WKURXJKRXW�WKH�FRXQWU\�E\�FRPSDQLHV�ZLWK�QDWLRQDO�UROHV�

(DUO\� LGHDV� VXJJHVWHG� IRU� FRQVLGHUDWLRQ� LQFOXGH� DPDOJDPDWLQJ� DOO� RI� WKH� QDWLRQDO� FXOWXUDODJHQFLHV� LQWR� RQH� ERG\�� DQG� GHYROYLQJ� UHVSRQVLELOLW\� �IRU� GHFLVLRQV� DQG� EXGJHWV�� WR� ORFDOUHJLRQDO�ERDUGV���� 5HFRJQLWLRQ�RI�WKH�&UHDWLYH�,QGXVWULHV�6HFWRU$� SRVLWLYH� GHYHORSPHQW� RYHU� WKH� SDVW� WZR� \HDUV� KDV� EHHQ� WKH� UHFRJQLWLRQ� E\� JRYHUQPHQW�6FRWWLVK� (QWHUSULVH� �6(�� DQG� +,(� � RI� WKH� &UHDWLYH� ,QGXVWULHV� DV� D� VHFWRU� RI� VLJQLILFDQWHFRQRPLF�LPSRUWDQFH�DQG�ZLWK�VLJQLILFDQW�JURZWK�SRWHQWLDO���7KH�VHFWRU�LV�XVXDOO\�GHILQHG�DVLQFOXGLQJ�WKH�DUWV��DQG�FXOWXUDO�LQGXVWULHV���QHZ�PHGLD��GHVLJQ��DUFKLWHFWXUH��DGYHUWLVLQJ��ILOP�LQWHUDFWLYH�OHLVXUH�VRIWZDUH��IDVKLRQ��SXEOLVKLQJ��UDGLR�DQG�WHOHYLVLRQ���7KH�&UHDWLYH�,QGXVWULHV0DSSLQJ� 'RFXPHQW�� SURGXFHG� E\� WKH� 'HSDUWPHQW� IRU� &XOWXUH�� 0HGLD� DQG� 6SRUW� LQ� �����SURYLGHV�H[WHQVLYH�VWDWLVWLFDO�HYLGHQFH��PDLQO\�DW�8.�OHYHO��RQ�WKH�WXUQRYHU��HPSOR\PHQW��HWF�RI�WKH�GLIIHUHQW�FRPSRQHQWV�RI�WKH�&UHDWLYH�,QGXVWULHV�6HFWRU���7KH�DUWV��E\�DVVRFLDWLRQ��KDYHEHHQ�SHUFHLYHG�LQFUHDVLQJO\�E\�SDUWQHUV�ZLWKLQ�DQG�RXWZLWK�WKH�VHFWRU�DV�SRVVHVVLQJ�D�VRFLDODQG�HFRQRPLF�VLJQLILFDQFH�WKDW�LW�KDG�SUHYLRXVO\�EHHQ�GLIILFXOW�WR�HVWDEOLVK���7KH�SRVVLELOLWLHVIRU� DGYDQFLQJ� WKH� DUWV� WKURXJK� WKLV� EURDGHU� SDUWQHUVKLS� RI� &UHDWLYH� ,QGXVWULHV� DUH� OLNHO\� WRLQFUHDVH�LQ�WKH�FRPLQJ�\HDUV�

Page 19: Microsoft Word - Westbrook master _1_.doc

��

��� 5HJLRQDO�*URZWK�DQG�&RQILGHQFH7KH�ORQJ�WHUP�HFRQRPLF�JURZWK�VWUDWHJLHV�RI�+,(�DQG�LWV�SUHGHFHVVRU��+,'%��DQG�RI�WKH�RWKHUSXEOLF�ERGLHV�LQYROYHG�LQ�WKH�HFRQRPLF�GHYHORSPHQW�RI�WKH�+LJKODQGV�DQG�,VODQGV��KDYH�EHHQVHHQ� WR� EHDU� IUXLW� LQ� UHFHQW� \HDUV�� � 7KH� ,QQHU�0RUD\� )LUWK� LQ� SDUWLFXODU�� 6N\H�� DQG� SDUWV� RI(DVWHU�5RVV��WKH�1RUWKHUQ�,VOHV�DQG�/RFKDEHU�KDYH�DFKLHYHG�FRQVLGHUDEOH�HFRQRPLF�JURZWK�UHLQIRUFHG�WKURXJK�LQFUHDVLQJ�LQZDUG�LQYHVWPHQW�DQG�D�JURZLQJ�UHJLRQDO�SRSXODWLRQ��6RFLDOO\�WKH� VWDQGDUG� RI� OLYLQJ� LQ� WKH� +LJKODQGV� DQG� ,VODQGV�� SDUWLFXODUO\� LQ� LWV� JURZWK� DUHDV�� KDVLQFUHDVHG��DQG�WKH�OHYHO�RI�DPHQLW\�DQG�VHUYLFH�DYDLODEOH�KDV�EHHQ�JUHDWO\�LPSURYHG�LQ�WKH�SDVWWHQ�\HDUV���7KHUH�KDV�EHHQ�D�JURZLQJ�FRQILGHQFH�LQ�WKH�+LJKODQGV�DQG�,VODQGV��ERWK�RQ�WKH�SDUWRI�UHVLGHQWV�DQG�LQYHVWRUV��DV�WKH�SHUFHSWLRQ�RI�WKH�DUHD�KDV�DOWHUHG�QDWLRQDOO\�,Q�WKH�DUWV��WKLV�QHZ�FRQILGHQFH�KDV�EHHQ�UHIOHFWHG�LQ�

x $�VXEVWDQWLDO�LQFUHDVH�RI�LQWHUHVW�LQ�WUDGLWLRQDO�PXVLF��ODUJHO\�WKURXJK�WKH�)HLV�PRYHPHQW��x 6LJQLILFDQW� DQQXDO� LQYHVWPHQW� LQ� WKH� *DHOLF� ODQJXDJH� �SDUWLFXODUO\� LQ� HGXFDWLRQ� DQGEURDGFDVWLQJ��EXW�DOVR�LQ�WKH�DUWV��x &RQVLGHUDEOH� LPSURYHPHQW� WR� WKH� VWDQGDUG� DQG� DYDLODELOLW\� RI� DUW� JDOOHULHV� DQG� SHUIRUPLQJDUWV�YHQXHV��ODUJHO\�WKURXJK�/RWWHU\�LQYHVWPHQW��x *URZWK�LQ�WKH�QXPEHU�RI�WKHDWUH�GDQFH�FRPSDQLHV�x $�GHYHORSLQJ�OLWHUDU\�UHSXWDWLRQ�x 1HZ�KLJK�SURILOH�IHVWLYDOV���LQFOXGLQJ�1RUWKODQGV��+LJKODQG��DQG�+HEULGHDQ�&HOWLF�

��� 3XEOLF�6HFWRU�,QYHVWPHQW�LQ�WKH�$UWV�,QIUDVWUXFWXUH�RI�WKH�+LJKODQGV�DQG�,VODQGV,QYHVWPHQW� LQ� WKH�EXLOW�DQG�KXPDQ�UHVRXUFH�DUWV� LQIUDVWUXFWXUH�RI� WKH�+LJKODQGV�DQG� ,VODQGVKDG�UHDFKHG�D�YLUWXDO�VWDQGVWLOO�E\�������DQG�ZDV�IXUWKHU�UHGXFHG��LQ�VRPH�DUHDV�GUDPDWLFDOO\�E\�ORFDO�JRYHUQPHQW�UHRUJDQLVDWLRQ�7KLV� WUHQG� ZDV� UHYHUVHG� E\� WKH� DUULYDO� RI� WKH� 1DWLRQDO� /RWWHU\� DQG� WKH� VXFFHVVIXO� JUDQWDSSOLFDWLRQV�IRU�D�QXPEHU�RI�VLJQLILFDQW�QHZ�EXLOGLQJ�GHYHORSPHQWV�� LQFOXGLQJ�$Q�7XLUHDQQ�6N\H���DUW�WP��,QYHUQHVV���$Q�7REDU��0XOO���WKH�0LOOHQQLXP�+DOOV�SURMHFW��YDULRXV�ORFDWLRQV��%RQKRJD� �6KHWODQG��� DQG� RWKHUV�� � ,Q� VRPH� FDVHV�� (XURSHDQ� 8QLRQ� IXQGLQJ� WKURXJK� WKH2EMHFWLYH� �� 3URJUDPPH� ZDV� DOVR� DQ� LPSRUWDQW� SDUW� RI� SURMHFWV¶� IXQGLQJ� SDFNDJHV�� � ,W� LVXQOLNHO\�WKDW�PDQ\�� LI�DQ\��RI� WKHVH�GHYHORSPHQWV�ZRXOG�KDYH�WDNHQ�SODFH�LQ� WKH�DEVHQFH�RI/RWWHU\� IXQGLQJ�� WKLV� SUHYLRXVO\� XQIRUHVHHQ� QHZ� VRXUFH� RI� IXQGLQJ� KDYLQJ� KHOSHG� +,(� WRLPSOHPHQW�WKH�$UWV�6WUDWHJ\�WKDW�LW�GHYLVHG�LQ�WKH�HDUO\�����¶V�,QFRPH�IURP�WKH�1DWLRQDO�/RWWHU\ RQ�FXUUHQW�HVWLPDWHV�ZLOO�SURYLGH�����PLOOLRQ�SHU�DQQXPIRU�WKH�DUWV�LQ�6FRWODQG��FRPSDUHG�ZLWK�����PLOOLRQ�LQ�WKH�ILUVW�\HDU�RI�WKH�/RWWHU\���$OWKRXJKLW�ZLOO�FRQWLQXH�WR�KHOS�PDQ\�VPDOO�DQG�PHGLXP�VFDOH�SURMHFWV��WKH�$UWV�/RWWHU\�LV�XQOLNHO\�WRVXSSRUW�PDQ\�ODUJH�VFDOH�FDSLWDO�GHYHORSPHQWV�GXH�WR�DQ�DGMXVWPHQW�WRZDUGV�SURMHFW�IXQGLQJ�7KLV�FKDQJH�LQ�HPSKDVLV�IURP�FDSLWDO�SURMHFWV�WR�DUWV�DFWLYLW\�SURMHFWV�ZDV�HQFRXUDJHG�E\�WKH'HSDUWPHQW�RI�&XOWXUH��0HGLD�DQG�6SRUW��DQG�WKH�GLVWULEXWLQJ�ERGLHV�ZHUH�UHTXLUHG�WR�SURGXFHVWUDWHJLHV�IRU�/RWWHU\�IXQGLQJ�ZKLFK�UHIOHFWHG� WKLV�� �:LWKRXW�VXSSRUW� IURP�WKH�/RWWHU\�� ODUJHVFDOH�GHYHORSPHQWV�DUH�JHQHUDOO\�XQOLNHO\�WR�EH�IXQGDEOH�

Page 20: Microsoft Word - Westbrook master _1_.doc

��

)XQGLQJ�IURP�6$&¶V�9RWHG�)XQGV LV�DOVR�XQOLNHO\�WR�LQFUHDVH�VLJQLILFDQWO\�LQ�WKH�QHDU�IXWXUH�DV�WKUHH�\HDU�IXQGLQJ�IURP�WKH�([HFXWLYH�KDV�UHFHQWO\�EHHQ�DJUHHG���,W�LV�OLNHO\�WKDW�PRVW�6$&UHYHQXH�FOLHQWV�ZLOO�EH�PDLQWDLQHG�DW�RU�DURXQG�WKHLU�FXUUHQW�OHYHOV�RI�VXSSRUW��ZLWK�RQH�RII�RUWLPH�VSHFLILF� SURMHFWV� UHPDLQLQJ� WKHLU� PDLQ� RSSRUWXQLW\� IRU� GHYHORSPHQW� �DV� IRU� QRQ�6$&UHYHQXH�FOLHQWV��/RFDO� $XWKRULW\� IXQGLQJ DSSHDUV� WR� EH� VWDELOLVLQJ�� DIWHU� VRPH� \HDUV� RI� XQFHUWDLQW\� DQGWUDQVLWLRQ�DIWHU�UHRUJDQLVDWLRQ��DW�OHYHOV�VLJQLILFDQWO\�ORZHU�WKDQ�SUHYLRXVO\���7KH�FXWV�WR�DUWVEXGJHWV�VLQFH�UH�RUJDQLVDWLRQ�DUH�XQOLNHO\�WR�EH�UH�LQVWDWHG�TXLFNO\�DQG�PD\�QHYHU�UHJDLQ�SUH�UHRUJDQLVDWLRQ�OHYHOV�7KH�(QWHUSULVH�1HWZRUN LQ�6FRWODQG�LV�XQGHUJRLQJ�UHYLHZ�EXW�ZLOO�SUREDEO\�UHWDLQ�WKH�VFRSHWR� FRQWLQXH� WR� VXSSRUW� WKH� DUWV� LQ� VLPLODU� ZD\V� WR� FXUUHQWO\�� LH�� ZLWKLQ� WKH� +LJKODQGV� DQG,VODQGV� SULQFLSDOO\� WKURXJK� VXSSRUW� IRU� &UHDWLYH� ,QGXVWULHV�� WKURXJK� +,�$UWV� LQLWLDWLYHV� DQGDGYLFH��DQG�WKURXJK�&RPPXQLW\�$FWLRQ�*UDQWV�DQG�SURMHFW�IXQGLQJ�E\�WKH�/(&¶V�6XSSRUW�IRU�WKH�$UWV�IURP�YLVLW6FRWODQG DQG�WKH�UHJLRQDO�7RXULVW�%RDUGV LV�XQOLNHO\�WR�LQFUHDVHPXFK� IURP� LWV� FXUUHQW� ORZ� OHYHO�ZLWKRXW� D� FKDQJH� LQ� SROLF\� �� LH�� JUHDWHU� UHFRJQLWLRQ� RI� WKHSRWHQWLDO�UROH�RI�WKH�DUWV�LQ�LQFUHDVLQJ�WKH�QXPEHU�RI�GD\V�VSHQW�E\�WRXULVWV�LQ�WKH�+LJKODQGVDQG�,VODQGV�(XURSHDQ�IXQGLQJ�WKURXJK�WKH�+LJKODQGV�DQG�,VODQGV�6SHFLDO�7UDQVLWLRQDO�3URJUDPPH�FRXOGKHOS�SURPRWH�VRPH�IXUWKHU�EXLOGLQJ�GHYHORSPHQW��SDUWLFXODUO\� LQ�HFRQRPLFDOO\� IUDJLOH�DUHDV�EXW�WKH�UDQJH�DQG�IUHTXHQF\�RI�EXLOGLQJ�GHYHORSPHQW�KDV�VORZHG�GRZQ�FRQVLGHUDEO\��DQG�LVXQOLNHO\� WR� DJDLQ� PDWFK� WKH� OHYHOV� RI� WKH� ODWH� ����V�� � 7KH� UHGXFWLRQ� LQ� WKH� DYDLODELOLW\� RI/RWWHU\�FDSLWDO�IXQGLQJ�LV�WKH�PDLQ�IDFWRU��DQG�WKLV�FRLQFLGHV�ZLWK�WLJKW�ORFDO�DXWKRULW\�FDSLWDOEXGJHWV�DQG�WKH�OLPLWHG�SRWHQWLDO�IRU�6$&�WR�DVVLVW�QHZ�SURMHFWV�:KLOH� ORFDO� DXWKRULW\� DUWV� SHUVRQQHO� KDYH� JHQHUDOO\� GHFUHDVHG� LQ� QXPEHU� DV� EXGJHWV� KDYHUHGXFHG�� HPSOR\PHQW� WKURXJK� WKH� DUWV� GHYHORSPHQW� DJHQFLHV� �� +,�$UWV� DQG� WKH� 1DWLRQDO*DHOLF� $UWV� $JHQF\� �1*$$�� �� KDV� JURZQ�� 7KH� 6KHWODQG� $UWV� 7UXVW� KDV� DOVR� GHYHORSHGJUDGXDOO\��ZLWK�WKH�ORFDO�DXWKRULW\�SUHIHUULQJ�WR�XVH�D�TXDVL�DXWRQRPRXV�ERG\�WR�GHOLYHU�DUWVVHUYLFHV�ORFDOO\���7KLV�FKDQJH�RI�EDODQFH�KDV�OHG�WR�D�GHJUHH�RI�LQVWDELOLW\��DQG�RQH�HIIHFW�KDVEHHQ� WR�PDNH� LW� GLIILFXOW� IRU� ORFDO� DXWKRULWLHV� WR� SURYLGH� SDUWQHUVKLS� IXQGLQJ� DORQJVLGH� WKH6$&� LQ� VXSSRUW� RI� H[LVWLQJ� DUWV� RUJDQLVDWLRQV� DQG� DFWLYLWLHV� RU� UHYHQXH� IXQGLQJ� IRU� QHZSURMHFWV� PDGH� SRVVLEOH� WKURXJK� /RWWHU\� IXQGLQJ�� � 'HYHORSPHQW� DJHQFLHV� KDYH� EHHQUHVSRQVLEOH� IRU� HVWDEOLVKLQJ� VRPH� H[WUHPHO\� YDOXDEOH� SURMHFWV� DQG� DUWV� FRPSDQLHV�� EXW� WKHLQVHFXULW\�RI� WKHLU�RZQ�IXQGLQJ�FDQ� OHDG� WR�D� IRFXV�RQ�VKRUW�WHUP�SURMHFWV��ZKLOH�/(&¶V�DUHQRW�DEOH� WR�SURYLGH�RQJRLQJ�UHYHQXH�IXQGLQJ�IRU�DUWV�SURMHFWV�� �7KH�QHZO\�IRUPHG�+LJKODQG$UWV� 3DUWQHUVKLS�� D� JURXSLQJ� RI� WKH�PDLQ� SXEOLF� VHFWRU� DUWV� ERGLHV�PD\� EH� DEOH� WR� GHYHORSPRGHOV�RI�SDUWQHUVKLS�RSHUDWLRQ�WKDW�EHJLQ�WR�RYHUFRPH�WKHVH�GLIILFXOWLHV�ZLWKLQ�WKH�+LJKODQG&RXQFLO�DUHD�(GHQ�&RXUW�7KHDWUH� UHPDLQV� WKH� ODUJHVW� UHFLSLHQW�RI�DUWV�JUDQW�VXSSRUW� LQ� WKH�+LJKODQGV�DQG,VODQGV���,Q�WKH�SDVW��LW�KDV�SHUKDSV�QRW�DOZD\V�XVHG�LWV�UHVRXUFHV�LQ�D�ZD\�WKDW�KDV�PD[LPLVHGEHQHILW� WR� WKH� UHVW� RI� WKH�+LJKODQG� DUWV� FRPPXQLW\�� �+RZHYHU�� RYHU� WKH� SDVW� ���� \HDUV�� WKHWKHDWUH�KDV�EHJXQ�WR�GHYHORS�PRUH�HIIHFWLYH�PHWKRGV�RI�RSHUDWLQJ�RXWZLWK�WKH�FRQILQHV�RI�WKHEXLOGLQJ��DV�ZHOO�DV�DFKLHYLQJ�WKH�KLJKHVW�DXGLHQFH�ILJXUHV�RI� UHFHLYLQJ� WKHDWUHV� LQ�6FRWODQGIRU� GDQFH� DQG� GUDPD�� DQG� IXOO� KRXVHV� IRU�PDQ\� HYHQWV�� � )XWXUH� SODQV� LQFOXGH�PXFK� FORVHULQWHJUDWLRQ�ZLWK�H[LVWLQJ�DUWV�DJHQFLHV�DQG�SURYLGHUV�DV�ZHOO�DV�WKH�IRUPDO�HGXFDWLRQ�VHFWRU�

Page 21: Microsoft Word - Westbrook master _1_.doc

��

��� 7KH�8+,�0LOOHQQLXP�,QVWLWXWH7KH� 8+,� LV� DQ� DVVRFLDWLRQ� RI� FROOHJHV� ZLWK� D� SK\VLFDO� SUHVHQFH� DFURVV� WKH� +LJKODQGV� DQG,VODQGV��DV�ZHOO�DV�(DVW�0RUD\�DQG�3HUWK��,W�DOVR�KDV�DFDGHPLF�OLQNV�ZLWK�WKH�8QLYHUVLWLHV�RI$EHUGHHQ�DQG�6WLUOLQJ�DQG�WKH�2SHQ�8QLYHUVLW\�IRU�FRXUVH�YDOLGDWLRQ�DQG�GHOLYHU\�� 7KHUH�DUHFOHDU�RSSRUWXQLWLHV�IRU�GHYHORSLQJ�IXUWKHU�DUWV�UHODWHG�FRXUVHV�WKURXJK�WKH�8+,�DQG�IRU�FORVHZRUNLQJ�EHWZHHQ�UHSUHVHQWDWLYHV�RI�WKH�DUWV�VHFWRU�DQG�WKH�8+,�GHYHORSPHQW�WHDP���&XUUHQWO\WKHUH�LV�QR�IRUXP�WR�DOORZ�D�GLDORJXH�EHWZHHQ�WKH�DUWV�FRPPXQLW\�DQG�WKH�8+,��DQG�LW�ZRXOGEH�EHQHILFLDO� IRU� D� IRUPDO�PHWKRG�RI� HQJDJHPHQW� WR�EH� HVWDEOLVKHG� LQ� WKH� VKRUW�WHUP� WR� WKHPXWXDO�EHQHILW�RI�ERWK���� %URDGFDVWLQJ�DQG�1HZ�0HGLD7KHUH�LV�D�VPDOO�(QJOLVK�ODQJXDJH�EURDGFDVWLQJ�FRPPXQLW\���PDLQO\�%%&�DQG�*UDPSLDQ���DWFHQWUHV�WKURXJKRXW�WKH�+LJKODQGV�DQG�,VODQGV�WKDW�KDV�UHPDLQHG�IDLUO\�VWDWLF�LQ�WKH�ODVW�GHFDGH�,Q�WKH�SDVW�WHQ�\HDUV��WKLV�KDV�EHHQ�DXJPHQWHG�E\�D�QHWZRUN�RI�FRPPXQLW\�UDGLR�VWDWLRQV��DUHDFRYHUDJH�LQFOXGLQJ�%DGHQRFK�DQG�6WUDWKVSH\��/RFKDEHU��(DVWHU�5RVV��:HVWHU�5RVV��&DLWKQHVV�:HVWHUQ�,VOHV��6N\H�DQG�2EDQ���7KHVH�VWDWLRQV�KDYH�EHHQ�UXQ�SULPDULO\��EXW�QRW�H[FOXVLYHO\�RQ�D�YROXQWDU\�EDVLV�DQG��LQ�PRVW�FDVHV��KDYH�LQYROYHG�D�ODUJH�QXPEHU�RI�ORFDO�SHRSOH���7KH\KDYH�SURYLGHG�DQ�LPSRUWDQW�VRFLDO�IXQFWLRQ�LQ� WKH�FRPPXQLWLHV� WR�ZKLFK�WKH\�EURDGFDVW�� � ,QDGGLWLRQ�WR�SURYLGLQJ�ORFDO�QHZV��LQIRUPDWLRQ�DQG�YRLFHV��WKH\�KDYH�SURYLGHG�RSSRUWXQLWLHV�WRJDLQ�WHFKQLFDO�H[SHULHQFH�ZLWKLQ�EURDGFDVWLQJ���$UJXDEO\��WKH\�KDYH�JLYHQ�WKHLU�FRPPXQLWLHVD� JUHDWHU� VHQVH� RI�ZRUWK� DQG� VHOI�FRQILGHQFH�� DQG� WKHLU� UROH� LQ� SURPRWLQJ� ORFDO� DUWV� HYHQWV�WKURXJK�IHDWXUHV�DQG�DGYHUWLVLQJ��KDV�DOVR�EHHQ�LPSRUWDQW�*DHOLF�ODQJXDJH�EURDGFDVWLQJ�KDV�EHHQ�YHU\�ZHOO�VHUYHG�VLQFH�WKH�DUULYDO�RI�WKH�&&*�LQ������6LJQLILFDQW�DQQXDO�IXQGLQJ�KDV�DOORZHG�D�JURZLQJ�SRRO�RI��PDLQO\��WHOHYLVLRQ�ZULWHUV��DFWRUV�GLUHFWRUV� DQG� SURGXFWLRQ� VWDII� WR� HPHUJH�� DV�ZHOO� DV� VLJQLILFDQWO\� UDLVLQJ� WKH� SURILOH� RI� WKHODQJXDJH�WKURXJK�WKH�RXWSXW�ZKLFK�LV�EURDGFDVW�QDWLRQDOO\���$�VHQLRU�8.�JRYHUQPHQW�PLQLVWHUDGGUHVVLQJ� D�EURDGFDVWLQJ� FRQIHUHQFH� LQ� ,QYHUQHVV� LQ� ����� VXJJHVWHG� WKDW�ZLWKLQ� ILYH� \HDUVWKHUH�ZRXOG�EH�D�*DHOLF�ODQJXDJH�FKDQQHO�DQG�DQ�LQFUHDVH�LQ�DQQXDO�JRYHUQPHQW�IXQGLQJ�IRUWKH�&&*�WR����P� ��,I�HLWKHU�RI�WKHVH�ZHUH�WR�FRPH�WR�SDVV� LW�ZRXOG�UHSUHVHQW�D�VLJQLILFDQWERRVW� IRU� EURDGFDVWLQJ� DQG� DVVRFLDWHG� DUWV�� DV� ZHOO� D� VLJQLILFDQW� HFRQRPLF� ERRVW� IRU� VRPHDUHDV�RI�WKH�+LJKODQGV�$OVR�� LQ� WKH� SDVW� WHQ� \HDUV�� 79� VWXGLRV� ±� 6WXGLR� 'UDPD� 1D� *DLGKOLJ� �� KDYH� RSHQHG� LQ6WRUQRZD\��DQG�WKHUH�LV�D�SURSRVDO�WR�FUHDWH�D�QHZ�ILOP�VWXGLR�LQ�,QYHUQHVV���6KRXOG�WKH�ODWWHUKDSSHQ�LW�ZRXOG�PDUN�D�VLJQLILFDQW�VWHS�WRZDUGV�DWWUDFWLQJ�DVVRFLDWHG�EXVLQHVVHV�WR�UH�ORFDWHWR� WKH� ,QQHU�0RUD\� )LUWK� DUHD�� � 7KHUH� DUH� DOUHDG\� VRPH� VPDOO� QHZ� PHGLD� DQG� SURGXFWLRQFRPSDQLHV�RSHUDWLQJ�LQ�WKH�DUHD���LQFOXGLQJ�$QLPD[��8QVW�$QLPDWLRQ�DQG�0RYH�2Q�8S���DQGD� FRQIHUHQFH� LQ�)RUW�:LOOLDP� LQ� ����� DWWUDFWHG� DOPRVW� ���� UHSUHVHQWDWLYHV� IURP� EURDGFDVW�UHODWHG� FRPSDQLHV� DURXQG� WKH�+LJKODQGV� DQG� ,VODQGV�� � ,W� LV� EHFRPLQJ� D� FOHDUHU� DPELWLRQ� RIVRPH�PHPEHUV�RI�WKH�/(&�QHWZRUN�WR�DWWUDFW�FOXVWHUV�RI�VXFK�FRPSDQLHV���7KH�+LJKODQG�DQG,VODQGV�)LOP�&RPPLVVLRQ�ZDV�HVWDEOLVKHG�LQ�������SULPDULO\�DV�D� ORFDWLRQV�DGYLVRU\�VHUYLFHIRU� WKH� ILOP� DQG� 79� LQGXVWU\�� ,QWHUHVWLQJO\�� LW� LV� SHUKDSV� WKH� RQO\� FXOWXUDO� ERG\�ZKLFK� KDVUHSUHVHQWDWLYHV�IURP�HDFK�RI�WKH�ORFDO�DXWKRULWLHV�LQ�WKH�+,(�DUHD��DV�ZHOO�DV�+,(�DQG�6FRWWLVK6FUHHQ� ���ODWHU�UHSRUWV�VXJJHVW�WKDW�WKLV�FRXOG�EH�DV�KLJK�DV�����PLOOLRQ�S�D�

Page 22: Microsoft Word - Westbrook master _1_.doc

��

��� 7+(0$7,&�&$6(�678',(67KH�PDLQ� ILQGLQJV� RI� WKH� VXUYH\V� XQGHUWDNHQ� IRU� WKH� WKUHH� WKHPDWLF� FDVH� VWXGLHV� �� 7RXULQJ7KHDWUH�&RPSDQLHV��5HFRUG� /DEHOV� DQG�*DOOHULHV� �� DUH� VXPPDULVHG� EHORZ�� � 7KH� HFRQRPLFLPSDFWV�RI� WKH� WKUHH� VHFWRUV� DUH� LQFOXGHG� LQ� WKH� DQDO\VLV� LQ�6HFWLRQV��� DQG� �� RI� WKLV� UHSRUW�ZKLOH� WKH� YROXQWDU\� HOHPHQW� LGHQWLILHG� WKURXJK� VXUYH\� LV� LQFRUSRUDWHG� LQ� WKH� DQDO\VLV� LQ6HFWLRQ�����$OVR��DOO�WKUHH�VHFWRUV�FRQWULEXWH�WR�FXOWXUDO�WRXULVP�LQ�WKH�+LJKODQGV�DQG�,VODQGV�HVSHFLDOO\�JDOOHULHV��DQG�HYLGHQFH�IURP�WKH�VXUYH\V�DOVR�LQIRUPV�RXU�FRQVLGHUDWLRQ�RI�WKH�UROHRI�WKH�DUWV�LQ�FXOWXUDO�WRXULVP�LQ�6HFWLRQ������7KH�LQWHUYLHZV�IRU�WKH�FDVH�VWXGLHV�ZHUH�KHOG�ODWH�����HDUO\��������� 3URIHVVLRQDO�7RXULQJ�7KHDWUH�&RPSDQLHV2YHU�WKH�SDVW�GHFDGH�� WKHUH�KDV�EHHQ�D�VXEVWDQWLDO� LQFUHDVH� LQ� WKH�QXPEHU�RI�+LJKODQGV�DQG,VODQGV�EDVHG�WRXULQJ�WKHDWUH�FRPSDQLHV���)URP�D�EDVHOLQH�RI�RQO\�RQH�LQ�������ZH�WDONHG�WR���FRPSDQLHV�ZKR�ZHUH�OLVWHG�E\�+,�$UWV�LQ�$XWXPQ������DV�WRXULQJ�WKHDWUH�FRPSDQLHV���2IWKH�����IRXU�GLG�QRW�WRXU�LQ�WKH�PRVW�UHFHQW�ILQDQFLDO�\HDU��RI�ZKLFK�WKUHH�DUH�QR�ORQJHU�WRXULQJDW�DOO��DV�WKHUH�LV�D�FULWLFDO�UHOLDQFH�RQ�SURMHFW�IXQGLQJ���$OO�RI�WKH�UHVW�UHSRUW�VXEVWDQWLDO�DQGFRQWLQXLQJ� GLIILFXOWLHV� LQ� IXQGLQJ� DUWLVWLF� GHYHORSPHQW� DQG� JURZWK�� DQG� IRU� PRVW� LW� LV� DVWUXJJOH�VLPSO\�WR�NHHS�JRLQJ�7KH�OLVW�VXSSOLHG�E\�+,�$UWV�LQFOXGHG�WKH�IROORZLQJ�

7RVJ�7KHDWUH�&RPSDQ\6WUD\�7KHDWUH�&RPSDQ\$Q�W�6LUHDGK�(X�&RPDVDFK7DUWDQ�&KDPHOHRQ,QYLVLEOH�%RXQFHUV��QR�ORQJHU�RSHUDWLQJ�0XOO�7KHDWUH$UWV�LQ�0RWLRQ7KHDWUH�+LJKODQG3RLQWEODQN�'DQFH�7KHDWUH��QR�ORQJHU�RSHUDWLQJ�0RYLQJ�$UWV��QRW�GRLQJ�WRXULQJ�WKHDWUH�WKHDWUHFROOHFWLYH#KLJKODQG��+LJKODQG�)HVWLYDO�*UH\�&RDVW�7KHDWUH�&RPSDQ\6ZHHW�0LON�7KHDWUH7KH�&ROOHFWRUV6NHNOHUV�7KHDWUH�&RPSDQ\��GLG�QRW�WRXU�ODVW�\HDU�2YHU� WKH�FRXUVH�RI� WKH�\HDU�� WZHOYH�+LJKODQGV�DQG� ,VODQGV�EDVHG� WRXULQJ� WKHDWUH� FRPSDQLHVSHUIRUPHG�RQ�D� WRWDO�RI�����RFFDVLRQV LQ�XSZDUGV�RI����GLIIHUHQW�YHQXHV WKURXJKRXW� WKH+LJKODQGV�DQG�,VODQGV���9HQXHV�FRYHUHG�WKH�PDLQ�SRSXODWLRQ�FHQWUHV��ZLWK�VHYHUDO�FRPSDQLHVDOVR� SHUIRUPLQJ� LQ� WKH� PRUH� UHPRWH� DUHDV�� DQG� LQFOXGHG�� $FKLOWLEXLH�� $SSLQ�� $UGULVKDLJ�$UGURVV��$XOWEHD��%DUUD��%HQEHFXOD��%HWW\KLOO��%RZPRUH��&ROO��&RORQVD\��&RQQHO��'DOPDOO\�'HUYDLJ�� 'XQRRQ�� (DVGDOH�� )LQGKRUQ�� )RUW� :LOOLDP�� +DUULV�� ,QYHUJRUGRQ�� ,QYHUQHVV� �(GHQ&RXUW� DQG� WKH� 7RZQ� +RXVH��� .LUNZDOO�� /\WK�� /RFKFDUURQ�� /RFKLQYHU�� 1DLUQ�� 1HWK\EULGJH�1RUWK�8LVW��2EDQ�� 3ORFNWRQ�� 3RUW� (OOHQ�� 3RUWUHH�� 6OHDW�� 6RXWK�8LVW�� 6WRUQRZD\�� 6WUDWKHULFN�7DLQ��7D\QXLOW��7KXUVR��7LUHH�DQG�8OODSRRO�

Page 23: Microsoft Word - Westbrook master _1_.doc

��

:KLOH�DOORZLQJ�IRU�WKH�SRVVLELOLW\�RI�VRPH�XQGHU�UHSRUWLQJ�RI�YHQXHV��LW�LV�QHYHUWKHOHVV�FOHDUWKDW�WKH�ZHVW�FRDVW�DQG�LVODQGV�DUH�EHWWHU�VHUYHG�WKDQ�WKH�HDVW�FRDVW�DQG�WKH�QRUWKHUQ�LVOHV��ZLWKDQ�DSSDUHQW�GHDUWK�RI�SHUIRUPDQFHV�LQ�WKH�0RUD\��%DGHQRFK�DQG�6WUDWKVSH\�DUHD���7KH�ODFN�RIORFDO�SURPRWHUV�LV�WKH�PDLQ�IDFWRU�LQ�H[SODLQLQJ�JHRJUDSKLFDO�JDSV���6RPH�RI�WKLV�GLVSDULW\�FDQDOVR� EH� OLQNHG� WR� WKH� JHRJUDSKLFDO� EDVH� RI� WKH� ODUJHU� WRXULQJ� FRPSDQLHV� DQG� VRPH� WR� WKHVSHFLDOLVPV�RI� WZR�RI� WKH�FRPSDQLHV�� �7ZR�RI� WKH�PDMRU�FRPSDQLHV�DUH�EDVHG�RQ�6N\H�DQG0XOO� DQG� RQH� RI� WKH� PHGLXP�VL]HG� FRPSDQLHV� LV� EDVHG� LQ� $UJ\OO�� � 2QH� PDMRU� FRPSDQ\VSHFLDOLVHV�LQ�*DHOLF�WKHDWUH�DQG��FOHDUO\��WKH�PDUNHW�IRU�WKLV�LV�JUHDWHU�LQ�WKH�:HVW���$�VHFRQG�VPDOOHU��FRPSDQ\�VSHFLDOLVHV�LQ�WKH�KLVWRU\�DQG�FXOWXUH�RI�WKH�:HVW�+LJKODQGV�DQG�,VODQGV�DQGWKLV��WRR��ZLOO�WHQG�WRZDUGV�PRUH�SHUIRUPDQFH�LQ�WKH�:HVW�WKDQ�WKH�(DVW�7KH�OLVW�SURYLGHG�E\�+,�$UWV�GLG�QRW� LQFOXGH�DQ\�WRXULQJ�WKHDWUH�FRPSDQLHV�EDVHG� LQ�0RUD\%DGHQRFK�DQG�6WUDWKVSH\��DOWKRXJK�2XW�RI�WKH�'DUNQHVV�7KHDWUH�&RPSDQ\��ZKLFK�LV�EDVHG�LQ(DVW�0RUD\x��LV�ZHOO�HVWDEOLVKHG��ZRUNLQJ�PDLQO\�LQ�VSHFLDO�QHHGV�DUHDV����7KH�VROH�FRPSDQ\ZKLFK� LV� VSHFLILFDOO\� RULHQWHG� WRZDUGV� WKH� 1RUWKHUQ� ,VOHV�� 6NHNOHUV�� H[SHULHQFHG� IXQGLQJGLIILFXOWLHV�ZKLFK�SUHFOXGHG�WRXULQJ�LQ�WKH�\HDU�FRYHUHG�E\�RXU�VWXG\�7KHUH�ZDV� D� WRWDO� DXGLHQFH� DWWHQGDQFH� RI� ������ GXULQJ� WKH� FRXUVH� RI� WKHVH� WRXUV�� DQG�DIXUWKHU����HYHQWV�QRW�OLQNHG�WR�WRXULQJ VSUHDG�RYHU�D�IXUWKHU�����SHUIRUPDQFH�GD\V DQGFDWHULQJ�IRU�D�IXUWKHU�������SDUWLFLSDQWV�� 7KHVH�HYHQWV�LQFOXGHG�ZRUNVKRSV��PDVWHUFODVVHV�VFKRRO� GUDPD� HYHQWV�� FRPPXQLW\� GUDPD� HYHQWV� DQG� UHDGLQJV� ZKLFK� ZHUH� QRW� SDUW� RI� WKHWRXULQJ�LWLQHUDU\�,Q�WRWDO�� WKH�VHFWRU�ZDV�ZRUWK��������� LQ� WKH�ODVW�ILQDQFLDO�\HDU�� �2I�WKDW�VXP��RQO\�������UHODWHG�WR�0LOOHQQLXP�HYHQWV�ZKLFK�ZRXOG�QRW�RWKHUZLVH�KDYH�WDNHQ�SODFH�7RWDO� ER[� RIILFH� LQFRPH IURP�+LJKODQGV� DQG� ,VODQGV� EDVHG� HYHQWV ZDV� ��������� � 7KHSHUFHQWDJH� RI� WKLV� ILJXUH�ZKLFK�ZDV� GHULYHG� IURP� WRXULVW� YLVLWRUV� YDULHG�ZLGHO\�� � )RU� VRPHFRPSDQLHV��ZKR�ZHUH�WRXULQJ�RXWZLWK�WKH�WRXULVW�VHDVRQ��LW�ZDV�FOHDU�WKDW�WKLV�SHUFHQWDJH�ZDVYHU\� ORZ� LQGHHG� �� EHORZ� ���� � ,Q� FRQWUDVW�� RQH� FRPSDQ\� JDYH� D� ILJXUH� RI� ���� IRU� WKHSURSRUWLRQ�RI�LWV�+LJKODQGV�DQG�,VODQGV�ER[�RIILFH�WDNLQJV�ZKLFK�FDPH�IURP�WRXULVW�YLVLWRUV�7KH�DYHUDJH�OHYHO��KRZHYHU��ZDV�DURXQG����:RUN� ZLWK� VFKRROV� ZDV� D� PDMRU� DUHD� RI� ZRUN� IRU� VHYHUDO� RI� WKH� FRPSDQLHV�� LQFOXGLQJSHUIRUPDQFHV� LQ� VFKRROV� DQG� D� UDQJH� RI� ZRUNVKRSV� WDUJHWHG� DW� VFKRROV�� �:RUN� H[SHULHQFHSODFHPHQWV�ZHUH�DOVR�SURYLGHG�E\�VHYHUDO�FRPSDQLHV�&RPPXQLW\�EDVHG�ZRUN�ZDV� DOVR� LPSRUWDQW� IRU� VHYHUDO� RI� WKH� FRPSDQLHV�� LQFOXGLQJ� WKHDWUHZRUNVKRSV� DQG� FRPPXQLW\�EDVHG� HYHQWV� WDNLQJ� SODFH� WKURXJKRXW� WKH� \HDU�� � 2QH� FRPSDQ\�VSHFLDOLVLQJ� LQ� OLYH� UROH�SOD\�� YLHZV� LWV�ZRUN� DV� EHLQJ� HQWLUHO\� EDVHG� DW� D� FRPPXQLW\� OHYHO�3DUWLFLSDWLRQ� LQ� VXFK� HYHQWV�� LW� ZDV� DUJXHG�� LQFUHDVHV� FRPPXQLW\� FRQILGHQFH� DQG� LV� D� NH\FRPSRQHQW�LQ�VRFLDO�LQFOXVLRQ�VWUDWHJLHV�%R[� RIILFH� LQFRPH WHQGHG� WR� EH� VRPHZKDW� KLJKHU� IRU� HYHQWV� RXWZLWK� WKH�+LJKODQGV� DQG,VODQGV��DQG�WKH�WRWDO�KHUH�ZDV���������x RXWZLWK�WKH�VWXG\�DUHD�

Page 24: Microsoft Word - Westbrook master _1_.doc

��

7KH� +LJKODQG�QRQ�+LJKODQG� LQFRPH� GLVSDULW\� ZDV� PRUH� SURQRXQFHG� LQ� UHODWLRQ� WR� JUDQWV�VXEVLGLHV�DQG�JXDUDQWHHV�DJDLQVW�ORVVHV���$�WRWDO�RI����������ZDV�UHFHLYHG�IURP�RUJDQLVDWLRQVZLWKLQ�WKH�+LJKODQGV�DQG�,VODQGV��ZKLOH����������ZDV�DZDUGHG�E\�RUJDQLVDWLRQV�RXWZLWK�WKHDUHD� �LQFOXGLQJ� WKH�6$&��� WKH� ODWWHU� UHSUHVHQWLQJ� ����RI� WKLV� WRWDO� SXEOLF� VHFWRU� VXSSRUW� RI���������� �7KLV� UHOLDQFH� RQ� IXQGLQJ� IURP� RXWZLWK� WKH� DUHD� LV� VLJQLILFDQW� IRU� VHYHUDO� RI� WKHFRPSDQLHV���7KH\�H[SUHVVHG�FRQFHUQ�DERXW�KDYLQJ�WR�FRPSHWH�ZLWK�WKHDWUH�FRPSDQLHV�IXUWKHUVRXWK�ZKRVH�ILQDQFLDO�FRPPLWPHQWV�LQ�WRXULQJ��VD\��WKH�&HQWUDO�%HOW�DUH�IDU�OHVV�RQHURXV�WKDQWKH�ILQDQFLDO�FRPPLWPHQW�LQYROYHG�LQ�WRXULQJ�DQ�DUHD�OLNH�WKH�+LJKODQGV�DQG�,VODQGV�2YHU� WKH� FRXUVH� RI� WKH� \HDU�� WKH� VHFWRU� SURYLGHG� VLJQLILFDQW� HPSOR\PHQW� WR� SHRSOH� IURP� DYDULHW\�RI�GLVFLSOLQHV��DFWRUV��PXVLFLDQV��GHVLJQHUV��GLUHFWRUV��ZULWHUV��DQG�WHFKQLFLDQV�DV�ZHOODV� DGPLQLVWUDWRUV� DQG� RWKHUV�ZRUNLQJ� LQ� DQFLOODU\� UROHV�� �$OWRJHWKHU������ LQGLYLGXDOV�ZHUHHPSOR\HG�LQ�SHUIRUPDQFH�ZRUN IRU�YDU\LQJ�SHULRGV�� UHVXOWLQJ� LQ�DQ�HTXLYDOHQW�RI���� IXOO�WLPH�MREV�� � ,Q�DQFLOODU\�RFFXSDWLRQV�� VXFK�DV�DGPLQLVWUDWLRQ��SURPRWLRQ�DQG�PDUNHWLQJ����LQGLYLGXDOV� ZHUH� HPSOR\HG� �� D� IXOO�WLPH� HTXLYDOHQFH� RI� ��� MREV�� � 7KXV�� LQ� WRWDO�� WKH+LJKODQGV�DQG�,VODQGV�EDVHG�WRXULQJ�WKHDWUH�FRPSDQLHV�SURYLGHG�D�WRWDO�RI����GLUHFW�IWH�MREV�7KH� WRXULQJ� WKHDWUH� FRPSDQLHV� SDLG� VRPH� �������� WR� DFWRUV� EDVHG� LQ� WKH� +LJKODQGV� DQG,VODQGV�� DORQJ�ZLWK� �������� WR� GHVLJQHUV� EDVHG� LQ� WKH� DUHD�� �������� WR� GLUHFWRUV�� ������� WRPXVLFLDQV�DQG��������� WR� WHFKQLFDO� VHUYLFH�SURYLGHUV�� LQFOXGLQJ� VWDJH�PDQDJHUV�� VRXQG�DQGOLJKWLQJ�FUHZV���7KLV�WRWDOV����������7KHUH�LV�D�FOHDU�YLHZ�WKDW� WKRVH�ZKR� WDNH� WKH�PDLQ�UHVSRQVLELOLW\� IRU�+LJKODQGV�DQG�,VODQGVEDVHG�WKHDWUH�FRPSDQLHV�GR�VR�DW�HQRUPRXV�SHUVRQDO�H[SHQVH���7KH�GHYHORSPHQW�RI�SURMHFWVWHQGV�WR�UHTXLUH�FRQVLGHUDEOH�XQSDLG�ZRUN�E\�WKH�SULQFLSDOV�RI�WKH�FRPSDQLHV��DQG�D�GHJUHH�RIYROXQWDU\�ZRUN� LV� DOVR� FRQWULEXWHG�E\�RWKHU�SHRSOH� LQ�SURPRWLQJ� DQG�KRVWLQJ� HYHQWV� DQG� LQSHUIRUPDQFHV�0RVW�+LJKODQGV�DQG�,VODQGV�EDVHG�WRXULQJ�WKHDWUH�FRPSDQLHV�IDOO�LQWR�WKH�QRW�IRU�SURILW�VHFWRUDQG� KDYH� ERDUGV� RI� GLUHFWRUV�� �$OWRJHWKHU�� ��� LQGLYLGXDOV�ZLWKLQ� WKH�+LJKODQGV� DQG� ,VODQGVVHUYH�RQ�VXFK�ERDUGV�7RXULQJ� WKHDWUH� FRPSDQLHV�ZHUH� FRQVLVWHQW� LQ� WKHLU� YLHZ�RI� UHFHQW� WUHQGV�� �:KLOH� WKHUH� KDVEHHQ�DQ�LQFUHDVH�LQ�WRXULQJ�WKHDWUH�DFWLYLW\�IURP�ZLWKLQ�WKH�+LJKODQGV�DQG�,VODQGV��DQG�SHRSOHDUH�EHFRPLQJ�PRUH�DQG�PRUH�ZLOOLQJ� WR�DWWHQG�HYHQWV�� WKH� ILQDQFLDO� VLGH�KDV�QRW�NHSW�SDFH�2QH� RI� WKH� ODUJHU� FRPSDQLHV� VSRNH� RI� KDYLQJ� EHHQ� RQ� ³VWDQGVWLOO´� IXQGLQJ� IRU� WKH� SDVW� VL[\HDUV�DQG�\HW��DW�D�WLPH�RI�LQFUHDVLQJ�FRVWV��EHLQJ�DVNHG�WR�GR�PRUH�DQG�PRUH�ZRUN�HDFK�\HDU�7KHUH� LV� D� VWURQJ� IHHOLQJ� ZLWKLQ� WKH� VHFWRU� WKDW� PRQH\� LV� EHFRPLQJ� KDUGHU� WR� DFFHVV� LQ� DFRPSHWLWLYH�PDUNHW�� � 7RXULQJ� LQ� WKH�+LJKODQGV� DQG� ,VODQGV��ZLWK� LQFUHDVLQJ� IXHO� DQG� RWKHUFRVWV��LV�EHFRPLQJ�PRUH�H[SHQVLYH���6HYHUDO�FRPSDQLHV�ZHUH�KLJKO\�FULWLFDO�RI�WKH�6$&�LQ�WKLVUHVSHFW�� GHVFULELQJ� WKH� RUJDQLVDWLRQ� DV� KDYLQJ� QR� DZDUHQHVV� RI� WKH� FRVWV� RI� WRXULQJ� LQ� WKH+LJKODQGV�DQG�,VODQGV���,Q�DGGLWLRQ��WKH�WKHDWUH�FRPSDQLHV�VD\�WKDW�WKHUH�KDV�EHHQ�DQ�LQFUHDVHLQ� WKH� OHYHOV� RI� EXUHDXFUDF\� DVVRFLDWHG� ZLWK� IXQGLQJ�� DQG� PRVW� IHHO� WKDW� WKH� HIIRUW� QRZUHTXLUHG� WR� DFFHVV� IXQGLQJ� LV� VR� WLPH�FRQVXPLQJ� WKDW� LW� LV� LQWHUIHULQJ� ZLWK� DUWLVWLFGHYHORSPHQW�DQG��LQ�PDQ\�FDVHV��WKH�GLUHFWRUV¶�IDPLO\�OLYHV�5HFHQWO\�� WKH� +LJKODQG� 3URGXFHUV� )XQG� KDV� SURYLGHG� WKH� LQGLJHQRXV� VHFWRU� ZLWK� DQQXDOIXQGLQJ�WRWDOOLQJ�����������7KLV�IXQGLQJ�IURP�6$&�DQG�+,(�LV�DGPLQLVWHUHG�E\�+,�$UWV�

Page 25: Microsoft Word - Westbrook master _1_.doc

��

7KHUH� DUH� GLIIHULQJ� YLHZV� RQ� WKH� DSSURSULDWHQHVV� RI� IXQGLQJ�� DQG� WKH� FRPSDQLHV� WKDW� KDYHEHHQ� DZDUGHG� VLJQLILFDQW� OHYHOV� RI� IXQGLQJ�� LQHYLWDEO\�� WHQG� WR� EH� PRUH� VDWLVILHG� ZLWK� WKHFXUUHQW� DUUDQJHPHQWV� WKDQ� WKRVH� ZKR� KDYH� QRW�� � 1HYHUWKHOHVV�� WKHUH� DUH� VHYHUDO� FOHDUSUREOHPV�x 1HZ�FRPSDQLHV�IHHO�GLVDGYDQWDJHG�LQ�UHODWLRQ�WR�6$&��WKRXJK�QRW�+,�$UWV��IXQGLQJ�DV�WKH\KDYH�QR�WUDFN�UHFRUG�RQ�ZKLFK�WR�EXLOG�x 7KHUH�LV�D�YLHZ�WKDW�FXUUHQW�IXQGLQJ�DUUDQJHPHQWV�PDNH�PHDQLQJIXO�DUWLVWLF�GHYHORSPHQW�YHU\GLIILFXOW�LQGHHG�DQG�WKDW�IXQGLQJ�VWUXFWXUHV�WHQG�WR�HQFRXUDJH�FRQVHUYDWLVP�ZLWKLQ�WKH�VHFWRU�2QH�FRPSDQ\�ZKLFK�LV�RQ�WKH�FXWWLQJ�HGJH�RI�PXOWL�PHGLD�IHOW�WKDW� IXQGLQJ��FULWHULD�ZHUH�QRWNHHSLQJ�SDFH�ZLWK�WKH�QHHG�IRU�DUWLVWLF�LQQRYDWLRQ�DQG�DQRWKHU�IHOW�WKDW�WKHLU�VSHFLDOLVP��OLYHUROH�SOD\��ZDV�VLPSO\�QRW�UHJDUGHG�DV�³UHDO´�WKHDWUH�x 7KHUH�ZDV� D� JHQHUDO� IHHOLQJ� WKDW�� DV� EXUHDXFUDF\� LQFUHDVHV��PRUH� DQG�PRUH� ERXQGDULHV� DUHEHLQJ�GUDZQ�ZLWKLQ�WKH�GUDPDWLF�DUWV���7KH�PRUH�FOHDUO\�RQH�ILWV�ZLWKLQ�D�SDUWLFXODU�³ER[´��WKHEHWWHU�RQH¶V�FKDQFH�RI�DFKLHYLQJ�D�IXQGLQJ�SDFNDJH���+RZHYHU��DV�ER[HV�DUH�GUDZQ�PRUH�DQGPRUH�WLJKWO\��WKH�VWUXFWXUHV�ZKLFK�KDYH�EHHQ�SXW�LQ�SODFH�DUH�EHFRPLQJ�LQFUHDVLQJO\�LQFDSDEOHRI�DFFRPPRGDWLQJ�LQQRYDWLYH�ZRUN��EHFDXVH�VXFK�ZRUN�QR�ORQJHU�ILWV�ZLWKLQ�WKH�UHFRJQLVHGER[HV�x 4XLWH�DSDUW�IURP�IXQGLQJ��WKHDWUH�FRPSDQLHV�H[SHULHQFHG�FRQVLGHUDEOH�GLIILFXOWLHV�LQ�KDQGOLQJWKH� DGPLQLVWUDWLYH� ZRUN� DVVRFLDWHG� ZLWK� DUUDQJLQJ� DQG� SURPRWLQJ� WRXUV�� � 7KHUH� ZHUHQXPHURXV� WDOHV� RI� GHDOLQJV� ZLWK� VPDOO� KDOO� FRPPLWWHHV�� PHVVDJHV� QRW� UHWXUQHG�� ODFN� RIZLOOLQJQHVV� WR� SD\� DQ\� IHH� ZKDWVRHYHU�� DQ� H[SHFWDWLRQ� WKDW� JURXSV� ZLOO� SD\� DOO� WKHLU� RZQH[SHQVHV� DQG� VR� RQ�� � 6XFK� GLIILFXOWLHV� WDNH� XS� HQRUPRXV� WLPH� DQG� HQHUJ\�ZKLFK� FRXOG� EHPRUH�SURGXFWLYHO\�GLUHFWHG���7KHUH�LV�DOVR�FRQFHUQ�DERXW�RYHU�UHOLDQFH�RQ�YROXQWDU\�HIIRUW�IRUSURPRWLRQ���&RPSDQLHV�IHHO�WKH�QHHG�WR�SD\�D�FRPPHUFLDO�UDWH�WR�SURPRWHUV�LQ�RUGHU�WKDW�WKHZRUN�LV�FDUULHG�RXW�HIILFLHQWO\��EXW�FDQ¶W�DIIRUG�LW�� �7KH\�DUH�WKHUHIRUH�REOLJHG�WR�WU\�WR�ILQGYROXQWHHUV��ZKLFK�OHDGV�WR�YHU\�YDULDEOH�TXDOLW\�RI�SURPRWLRQDO�DFWLYLW\�

6RPH�RI�WKH�FRPSDQLHV�KDYH�QRZ�VWDUWHG�WR�FROODERUDWH�RQ�D�QXPEHU�RI�SURMHFWV�DQG�VHHP�WREH� ILQGLQJ� WKLV� DSSURDFK�� ZLWK� HDFK� FRPSDQ\� SOD\LQJ� WR� LWV� VWUHQJWKV�� ZRUWKZKLOH�� 7KUHHFRPSDQLHV�EHOLHYH�WKDW�WKHUH�LV�JUHDW�VFRSH�IRU�MRLQW�ZRUNLQJ�LQ�VHYHUDO�DUHDV��SDUWLFXODUO\�LQSURPRWLRQ��DGPLQLVWUDWLRQ�DQG�GHYHORSPHQW�RI�D�SK\VLFDO� UHVRXUFH�EDVH�� DQG� WKDW� WKLV�FRXOGUHGXFH� WKH� FRVWV� IRU� HDFK�� DOWKRXJK� WZR� RI� WKHVH� FRPSDQLHV� VDLG� WKDW� H[LVWLQJ� IXQGLQJVWUXFWXUHV� ZRUN� DJDLQVW� WKLV� W\SH� RI� DSSURDFK�� � *HQHUDOO\�� OLPLWHG� IXQGLQJ� DYDLODELOLW\� KDVSURGXFHG� D� YHU\� FRPSHWLWLYH� XQGHUFXUUHQW�� ZKLFK� KDV� WHQGHG� WR� KROG� EDFN� SURJUHVV� RQFROODERUDWLRQ�� DOWKRXJK� +,� $UWV� LV� DFWLYHO\� VHHNLQJ� WR� SURPRWH� FROODERUDWLRQ� EHWZHHQ� WKHFRPSDQLHV��ZKLFK�FDQ�RSHQ�XS�DGGLWLRQDO�IXQGLQJ�RSSRUWXQLWLHV�1RQH� RI� WKH� WKHDWUH� FRPSDQLHV� DUH� FRQILGHQW� DERXW� WKH� IXWXUH�� � &RPPHQWV� DERXW� IXWXUHYLDELOLW\� UDQJHG� IURP� ³XQFHUWDLQ´� WKURXJK� ³WHQXRXV´� WR� WKH�PRUH� VWUDLJKWIRUZDUG� ³YLDELOLW\VXFNV´���&RPSDQLHV�VDZ�WKLV�DV�EHLQJ�GLUHFWO\�UHODWHG�WR�IXQGLQJ�FRQVWUDLQWV���7KH�PDUNHW�IRUWKHDWUH�ZDV�JURZLQJ��EXW� WKH�DYDLODEOH� IXQGLQJ�ZDV�QRW�� �2QH�FRPSDQ\� IHOW� WKDW� WKH�PDUNHWKDG� EHHQ� WRR� FURZGHG�� EXW� WKDW� WKH� ZKHDW� KDG� EHHQ� VHSDUDWHG� IURP� WKH� FKDII� DQG� WKDWUHVRXUFHV� VKRXOG�QRZ�EH� FRQFHQWUDWHG�RQ� WKH� WKUHH� ODUJHVW� FRPSDQLHV�� WKH�RQO\�RQHV�ZKLFKZHUH� WUXO\� YLDEOH�� �7KH� VPDOOHU� FRPSDQLHV�� RI� FRXUVH��ZRXOG� DUJXH� WKDW� DQ\� VXFK� DSSURDFKZRXOG�VWLIOH�GLYHUVLW\�DQG�WKHUHIRUH�DUWLVWLF�GHYHORSPHQW���� 5HFRUG�/DEHOV

Page 26: Microsoft Word - Westbrook master _1_.doc

��

7KH� QXPEHU� RI� UHFRUG� ODEHOV� EDVHG� LQ� WKH� +LJKODQGV� DQG� ,VODQGV� KDV� UDSLGO\� LQFUHDVHG� LQUHFHQW�\HDUV�� �2XU�VHDUFK�UHYHDOHG�WKLUW\��ZKLFK�LV�IHOW� WR�EH�D�VOLJKW�XQGHU�HVWLPDWLRQ�RI� WKHQXPEHUV�LQYROYHG���+RZHYHU��PRVW�RI� WKHVH�DUH�XVHG�VROHO\�IRU�VHOI�UHOHDVHV��ZKHUH�D�VLQJOHEDQG�RU�DUWLVW�UHOHDVHV�WKHLU�RZQ�UHFRUG�V��XQGHU�WKHLU�RZQ�ODEHO���$GYDQFHV�LQ�WHFKQRORJ\��DQGFRQFRPLWDQW�FRVW� UHGXFWLRQV�RYHU� WKH�SDVW� WHQ�\HDUV�KDYH�SOD\HG�D�PDMRU�SDUW� LQ� WKLV�� �6HOI�UHOHDVHV�DUH�RIWHQ�SURGXFHG�HLWKHU�DV� VDPSOHUV�� WR� LQWHUHVW� DQ�DJHQW��PDQDJHU�RU�PDLQVWUHDPUHFRUG�ODEHO�LQ�WKH�SURGXFW��RU�WR�SURGXFH�PHUFKDQGLVH�IRU�VHOOLQJ�DW�OLYH�SHUIRUPDQFHV���,W�LVQRW�XVXDO�IRU�VHOI�UHOHDVHV�WR�KDYH�D�VRSKLVWLFDWHG��RU�LQGHHG��DQ\��GLVWULEXWLRQ�QHWZRUN��RWKHUWKDQ� EHLQJ� RIIHUHG� IRU� VDOH� DW� WKH� DUWLVW¶V� SHUIRUPDQFH� HYHQWV�� � ,W� LV� QRZ� VLPSOH� DQG� FRVW�HIIHFWLYH� IRU� PXVLFLDQV� WR� DFTXLUH� WKH� UHOHYDQW� FRPSXWHU�EDVHG� PL[LQJ� DQG� PDVWHULQJHTXLSPHQW�WR�JLYH�WKHP�LQGHSHQGHQFH�IURP�FRPPHUFLDO�UHFRUGLQJ�DQG�ODEHO�IDFLOLWLHV�:H�IRXQG�WHQ�UHFRUG�ODEHOV EDVHG�LQ�WKH�+LJKODQGV�DQG�,VODQGV�GHDOLQJ�ZLWK�EDQGV�DQG�DUWLVWVLQGHSHQGHQWO\�RI� WKHLU� SURSULHWRUV¶� RZQ�SHUIRUPDQFH� LQWHUHVWV�� DQG� WKH� VHFWRU� DSSHDUV� WR� EHH[SDQGLQJ���7ZR�ODEHOV��WKRXJK�FXUUHQWO\�ZRUNLQJ�RQ�D�VHOI�UHOHDVH�EDVLV��DUH�ZHOO�JHDUHG�XSWR� SURYLGLQJ� UHFRUG� ODEHO� VHUYLFHV� DQG� PD\� ZHOO� JR� LQ� WKLV� GLUHFWLRQ� LQ� WKH� IXWXUH�� � 2QHFRPSDQ\�ZKLFK�DOUHDG\�UXQV�WZR�ODEHOV�LQWHQGV�WR�GHYHORS�D�WKLUG�LQ�WKH�QHDU�IXWXUH���%HWZHHQWKHP� �� WKH� ��� ODEHOV� UHOHDVHG����DOEXPV LQ� WKH� \HDU� ����� ±� ������ KDYLQJ�ZRUNHG�ZLWK� ��EDQGV�RU�DUWLVWV��RI�ZKRP����ZHUH�EDVHG�LQ�WKH�+LJKODQGV�DQG�,VODQGV���$ERXW��������UHFRUGVZHUH�VROG�XQGHU�WKHVH����ODEHOV�GXULQJ�WKH�FRXUVH�RI�WKH�\HDU��DQ�DYHUDJH�RI�������SHU�DOEXP�,I� LW�DVVXPHG� WKDW� WKH�DYHUDJH�DOEXP�LV�SULFHG�DW����� �QHW�RI�9$7��� WKLV�ZRXOG�JLYH�D� WRWDOWXUQRYHU�RI����������IRU�WKH�\HDU�:RUN�LQ�WKLV�ILHOG�WHQGV�WR�UHIOHFW�WKH�SURIRXQGO\�LQWHUZRYHQ�QDWXUH�RI�WKH�PXVLF�LQGXVWU\�DV�DZKROH���0RVW�RI�WKRVH�ZKR�VHHN�WR�PDNH�D�OLYLQJ�IURP�PXVLF�ZLOO�SXW� WRJHWKHU�D�QXPEHU�RIGLIIHUHQW� FRPSRQHQWV� WR�EXLOG� D� OLYHOLKRRG�� �7KRVH� UXQQLQJ� UHFRUG� ODEHOV� DUH� DOVR� YDULRXVO\LQYROYHG� LQ� SHUIRUPDQFH�� FRPSRVLWLRQ�VRQJ� ZULWLQJ�� SURGXFWLRQ�� SURYLVLRQ� RI� UHFRUGLQJIDFLOLWLHV�� SXEOLVKLQJ�� UHWDLOLQJ�� PXVLF� WHDFKLQJ�WXWRULQJ�� SURPRWLRQ�� GLVWULEXWLRQ�� VRXQGHQJLQHHULQJ��YLGHR�UDGLR�79�SURGXFWLRQ�DQG�ZHE�GHVLJQ���2QO\�RQH�RI�WKH�FRQWDFWV�ZH�VSRNHWR�RSHUDWHG�VROHO\�DV�D�ODEHO��DQG�LQ�WKLV�FDVH�WKH�SHUVRQ�LQYROYHG�RSHUDWHG�LQ�WKHLU�VSDUH�WLPH�ZLWK�D�IXOO�WLPH�MRE�RXWZLWK�WKH�PXVLF�LQGXVWU\���2I�WKH�UHFRUG�ODEHOV�ZKLFK�GR�GHDO�ZLWK�ZRUNRWKHU�WKDQ�WKHLU�RZQ��RQH�LV�D�YROXQWDU\�RUJDQLVDWLRQ�ZKLFK�DLPV�WR�SURPRWH�ORFDO�PXVLF�DQGVWRU\�WHOOLQJ���7KH�UHPDLQGHU�RSHUDWH�DV�EXVLQHVVHV��HLWKHU�RQ�D�IXOO�WLPH�RU�D�SDUW�WLPH�EDVLV�:KLOH����SHRSOH�ZRUN�GLUHFWO\�IRU�UHFRUG�ODEHOV LQ�WKH�+LJKODQGV�DQG�,VODQGV��WKH�WHQGHQF\WR�ZRUN�DFURVV�D�UDQJH�RI�DVSHFWV�ZLWKLQ�PXVLF�DQG�UHODWHG�VHFWRUV�PHDQV�WKDW�UHFRUG�ODEHOV�E\WKHPVHOYHV�RQO\�DFFRXQW�IRU�DERXW���IXOO�WLPH�HTXLYDOHQWV���:HUH�WKH�ODEHO�FRPSRQHQW�WR�EHVXEWUDFWHG�IURP�DOO�RI� WKH�ZRUN�FDUULHG�RXW�E\� WKH�SHRSOH� LQYROYHG��PDQ\�RI� WKH� MREV� LQ� WKHVHFWRU�ZRXOG�QR�ORQJHU�EH�YLDEOH��DOWKRXJK�WKH�LQWHUZRYHQ�QDWXUH�RI�WKH�PXVLF�LQGXVWU\�LQ�WKH+LJKODQGV�DQG�,VODQGV�PDNHV�LW�GLIILFXOW�WR�HVWLPDWH�WKH�VWULFW�ILQDQFLDO�YDOXH�RI�UHFRUG�ODEHOVDV� VXFK� WR� WKH� HFRQRP\�RI� WKH� DUHD�� �$V� UHFRUG� ODEHO� VHUYLFHV� WHQG� WR� FRQVWLWXWH� D� JDWHZD\VHUYLFH�ZLWKLQ�WKH�PXVLF�LQGXVWU\��DQ\�GRZQWXUQ�LQ�WKH�VHFWRU�ZRXOG�FUHDWH�VLJQLILFDQW�GRZQ�VWUHDP�SUREOHPV�IRU�RWKHUV�$QQXDO� WXUQRYHU� IURP� ODEHO� DFWLYLW\� FDQ� UDQJH� IURP� D� IHZ� KXQGUHG� SRXQGV� IRU� WKH� VPDOOHURUJDQLVDWLRQV� WR� WHQV� RI� WKRXVDQGV� IRU� ODUJHU� FRPSDQLHV�� � )HHV� RU� �PRUH� RIWHQ�� UR\DOWLHV� WRDUWLVWV�FDQ�UHSUHVHQW�EHWZHHQ�����DQG�����RI�WKLV�,Q� DGGLWLRQ�� WKH� UHFRUG� ODEHOV� WKHPVHOYHV� PDNH� YDU\LQJ� DPRXQWV� RI� ORFDO� SXUFKDVHV�� � 7KHUHFRUG� ODEHO� RSHUDWRUV� ZKR� GR� QRW� DOVR� KDYH� UHFRUGLQJ� VWXGLRV� VRPHWLPHV� �WKRXJK� QRW

Page 27: Microsoft Word - Westbrook master _1_.doc

��

LQYDULDEO\�� XVH� +LJKODQGV� DQG� ,VODQGV� EDVHG� UHFRUGLQJ� IDFLOLWLHV�� � 7KH� RWKHU� PDMRU� VHUYLFHZKLFK�FDQ�RIWHQ�EH�VRXUFHG�ORFDOO\� LV� WKH�SULQWLQJ�RI�&'�DQG� WDSH�³LQVHUWV´��DQG�RQH�UHFRUGODEHO� URXWLQHO\� SODFHV� WKH� DVVRFLDWHG� DUWZRUN� ZLWK� D� GHVLJQ� FRPSDQ\� LQ� ,QYHUQHVV�� � 7KHSK\VLFDO�SURGXFWLRQ�RI�&'V�WHQGV�WR�JR�WR�FRPSDQLHV�RXWZLWK�WKH�+LJKODQGV�DQG�,VODQGV���2QHRI�WKH�UHFRUG�ODEHOV�KDV� ORRNHG�DW�GHYHORSLQJ� WKLV�DV�DQ�DVVRFLDWHG�EXVLQHVV�DFWLYLW\�EXW�KDVGHFLGHG� WKDW� WKH� LQYHVWPHQW� UHTXLUHG� WR�HVWDEOLVK�DSSURSULDWH� IDFLOLWLHV�JHDUHG�XS� WR�PRGHUQUHTXLUHPHQWV�ZRXOG�EH�EH\RQG�WKHP���7DSHV�DQG�VRPH�&'V��KRZHYHU��DUH�FRSLHG�SUHVVHG�DW*UDPSLDQ�5HFRUGV�LQ�:LFN�,W�ZDV�GLIILFXOW�IRU�PRVW�RI�WKH�ODEHOV�WR�HVWLPDWH�KRZ�PXFK�RI�WKHLU�WXUQRYHU�LV�WRXULVW�UHODWHG�7KRVH�ZKR�ZHUH�DEOH�WR�JLYH�D�SHUFHQWDJH�IRU�WRXULVP�UHODWHG�VDOHV�RFFXSLHG�FOHDUO\�GHILQHGQLFKHV� ZLWKLQ� WKH� LQGXVWU\�� � 2QH� ODEHO� FRXOG� VD\� ZLWK� FHUWDLQW\� WKDW� YLUWXDOO\� QRQH� RI� LWVLQFRPH�ZDV�WRXULVW�UHODWHG��ZKLOH�DQRWKHU�JDYH�WKH�ILJXUH�DV�RYHU������DQG�TXRWHG�WXUQRYHUILJXUHV� IRU� KLV� EXVLQHVV� ZKLFK� LOOXVWUDWHG� KRZ� FORVHO\� KLV� EXVLQHVV� IRUWXQHV� PLUURUHG� WKHIRUWXQHV�RI�WRXULVP�LQ�JHQHUDO�6HYHUDO� ODEHOV�FRPPHQWHG�RQ� WKH� UHODWLRQVKLS�EHWZHHQ� WKH� ULFK�PXVLFDO�KHULWDJH�RI� WKH�DUHD�WUDGLWLRQDO� DQG� FRQWHPSRUDU\�� DQG� WKH� LQLWLDO� WULJJHU� ZKLFK� OHDGV� WRXULVWV� WR� YLVLW� WKH+LJKODQGV�DQG�,VODQGV���0RQDUFK�RI�WKH�*OHQ�DQG�WKH�0DGRQQD�ZHGGLQJ�PD\�ERWK�KDYH�KDG�DVWURQJ� HIIHFW� RQ� UDLVLQJ� DZDUHQHVV� RI� WKH� DUHD� DQG� HQFRXUDJLQJ� SHRSOH� WR� YLVLW� EXW�� LW� ZDVDUJXHG�� IRU�D�VLJQLILFDQW�QXPEHU�RI�SHRSOH� WKH�PXVLF�RI� WKH�DUHD�KDV�PXFK� WKH� VDPH�HIIHFW�7KH�,ULVK�H[DPSOH��LW�ZDV�IHOW��ZDV�D�FDVH�LQ�SRLQW���7KHUH�DUH�XQGRXEWHGO\�PDQ\�UHDVRQV�ZK\WRXULVWV� YLVLW� ,UHODQG�� EXW� IRU� D� SURSRUWLRQ�� WKH� FOHDUO\� LGHQWLILDEOH� PXVLFDO� KHULWDJH� RI� WKHFRXQWU\� KDV� EHHQ� D� VLJQLILFDQW� IDFWRU�� � 6HYHUDO� RI� WKH� PRUH� VXEVWDQWLDO� UHFRUG� ODEHOV� KDYHFDSLWDOLVHG� RQ� WKLV� H[DPSOH� E\� GHYHORSLQJ� QLFKH�PDUNHWV�ZLWKLQ� WKH�+LJKODQGV� DQG� ,VODQGVPXVLF�LQGXVWU\���6HYHUDO�ODEHOV�FRQFHQWUDWH�RQ�WKH�IRON�WUDGLWLRQDO�ILHOG��ZKHWKHU�LQ�D�6FRWWLVK�+LJKODQGV��RU�PRUH�ORFDO�JHQUH�2QH�UHFRUG� ODEHO�FRQFHQWUDWHV�DOPRVW�H[FOXVLYHO\�RQ�6FRWWLVK�&RXQWU\�'DQFH�PXVLF��KDYLQJVSRWWHG� D� FOHDU� JDS� VRPH� \HDUV� DJR� LQ� WKLV� ILHOG� DQG� QRZ� KDV� SODQV� WR� H[SDQG� E\� RIIHULQJUHODWHG�VHUYLFHV�WR�WKH�VHFWRU���$QRWKHU�FRPSDQ\�LQWHQGV�WR�VHW�XS�D�ODEHO�VSHFLILFDOO\�WR�FDUU\RULJLQDO� FRQWHPSRUDU\� VRQJ� IURP� WKH�+LJKODQGV� DQG� ,VODQGV��ZKLFK� LW� LQWHQGV� WR� EUDQG� DQGPDUNHW�SUHGRPLQDQWO\�LQ�WKH�86���7KUHH�ODEHOV�VSHFLDOLVH�LQ�PXVLF�IURP�WKHLU�UHVSHFWLYH�LVODQGJURXSV�DQG��DJDLQ��EUDQGLQJ�DQG�PDUNHWLQJ�DUH�RI�NH\�LPSRUWDQFH�+RZHYHU�� VHYHUDO� RI� WKH� UHFRUG� ODEHOV� ILQG� WKHPVHOYHV� LQFUHDVLQJO\� VTXHH]HG� EHWZHHQ� WKHODUJH� /RQGRQ�� (GLQEXUJK� DQG� *ODVJRZ�EDVHG� ODEHOV� DQG� WKH� LQFUHDVLQJ� SRSXODULW\� RI� VHOI�UHOHDVH�� �6HYHUDO� ODEHOV�UHSRUWHG�KDYLQJ�ORVW�DUWLVWV� WR�VHOI�UHOHDVH�WHFKQRORJLHV�� �$UWLVWV�ZKRDUH�FRQFHQWUDWLQJ�RQ�D�ORFDO�FLUFXLW��RU�RQ�VHOOLQJ�UHFRUGLQJV�DW�SHUIRUPDQFHV�DUH�LQFUHDVLQJO\DWWUDFWHG�WR�ZKDW�WKH\�PD\�VHH�DV�FXWWLQJ�RXW�WKH�PLGGOH�PDQ���7KLV�LV�SDUWLFXODUO\�WKH�FDVH�IRUNH\ERDUG�EDVHG� DUWLVWV�� DV� VHTXHQFLQJ� WHFKQRORJLHV� EHFRPH� EHWWHU� DQG� FKHDSHU� DQG� GLJLWDOSURGXFWLRQ�PHWKRGV�DUH�DYDLODEOH�RQ�D�VWDQGDUG�GHVNWRS�3&���2Q�WKH�RWKHU�KDQG��VHYHUDO�ODEHOVUHSRUW� ORVLQJ� DUWLVWV� WR� ODUJHU� UHFRUGLQJ� FRPSDQLHV� GRZQ� VRXWK�� � 7KH� PDLQ� FDXVH� RI� WKLVOHDNDJH�LV�WKH�ILUPHU�GLVWULEXWLRQ�DQG�PDUNHWLQJ�QHWZRUNV�WKH�ELJJHU�ODEHOV�FDQ�RIIHU�6HYHUDO� RI� WKH� UHFRUG� ODEHOV� VSRNH� KLJKO\� RI� WKH� VXSSRUW� DQG� KHOS� WKH\� KDYH� UHFHLYHG� IURPWKHLU�SHHUV�WKURXJK�PHFKDQLVPV�DQG�LQLWLDWLYHV�GHYHORSHG�E\�0,'$6���7KHUH�LV�D�FOHDU�YLHZVKDUHG�E\�PDQ\�RI�WKH�UHFRUG�ODEHOV�RI�DQ�RSHQ�VHFWRU��ZKLFK�LV�ZLOOLQJ�WR�VKDUH�H[SHUWLVH�DQGLQIRUPDWLRQ�DQG�KDV�QR�WUXFN�ZLWK�SHWW\�MHDORXVLHV�RU�SURWHFWLRQLVP�

Page 28: Microsoft Word - Westbrook master _1_.doc

��

$�IHZ�UHFRUG�ODEHOV�DUH�RSHUDWLQJ�LQ�VXFK�FOHDUO\�GHILQHG�DQG�VSHFLDOLVHG�QLFKH�PDUNHWV��HJ�6FRWWLVK�&RXQWU\�'DQFH��WKDW�GLVWULEXWLRQ�RI�WKH�SURGXFW�LV�QRW�DQ�LVVXH���+RZHYHU��WKH�SULRULW\IRU�PRVW�RI�WKH�ODEHOV�LV�VHFXULQJ�EHWWHU�GLVWULEXWLRQ�QHWZRUNV�ERWK�ZLWKLQ�WKH�8.�DQG�DEURDG�2QH� UHFRUG� ODEHO� RSHUDWRU� SRLQWHG� RXW� WKDW� VPDOO� UHFRUG� ODEHOV� WHQG� WR� KDYH� D� IDU� VPDOOHUYROXPH�RI� VDOHV� WKDQ�GR� ODUJH� ODEHOV�ZLWK� D� FRPSDUDEOH� DUWLVW� GXH� WR� WKH� LQDGHTXDF\� RI� WKHGLVWULEXWLRQ�FKDLQ���$EVHQFH�RI�VXLWDEOH�GLVWULEXWLRQ�QHWZRUNV�KDV�WZR�GHWULPHQWDO�LPSDFWV�RQWKH� UHFRUG� ODEHOV�� ILUVWO\�� LW� UHVWULFWV� WKH�RXWOHWV�ZKLFK� FDUU\� WKH�SURGXFW�� DQG� VHFRQGO\�� DV� DNQRFN�RQ�HIIHFW��LW�PDNHV�LW�PRUH�GLIILFXOW�IRU�UHFRUG�ODEHOV�WR�UHWDLQ�WKHLU�XS�DQG�FRPLQJ�DFWVDV�WKH\��WRR��VHHN�PD[LPXP�H[SRVXUH�7KH� HFRQRPLF� LPSDFW� RI� H[LVWLQJ� UHFRUG� ODEHOV� LQ� WKH� +LJKODQGV� DQG� ,VODQGV� FRXOG� EHLQFUHDVHG�VXEVWDQWLDOO\�LI�WKH�SUREOHPV�RI�GLVWULEXWLRQ�FRXOG�EH�DGGUHVVHG���,W�LV�LPSRUWDQW�WKDWWKRVH�UXQQLQJ�UHFRUG�ODEHOV�ZKLFK�GHDO�ZLWK�ZRUN�RWKHU�WKDQ�WKHLU�RZQ�DUH�KHOSHG�LQ�HQJDJLQJZLWK�GLVWULEXWRUV���7UDGH�IDLUV�DUH�LPSRUWDQW�LQ�WKLV�FRQWH[W��DQG�+LJKODQGV�DQG�,VODQGV�UHFRUGODEHOV� VKRXOG� EH� HQFRXUDJHG�DVVLVWHG� WR� SDUWLFLSDWH� LQ� WKH� UHOHYDQW�PDMRU� 8.� DQG� RYHUVHDVWUDGH�IDLUV�LQ�RUGHU�WR�PDNH�WKH�DSSURSULDWH�FRQWDFWV�2QH�RI�WKH�IDFWRUV�VXEVWDQWLDOO\�LQIOXHQFLQJ�GLVWULEXWRUV�LQ�WKHLU�GHFLVLRQ�DV�WR�ZKHWKHU�RU�QRWWR�DFFHSW�D�UHOHDVH�LV�WKH�TXHVWLRQ�RI�WRXULQJ���,I�WKH�DUWLVW�LV�WRXULQJ��WKHQ�WKH�UHOHDVH�ZLOO�EHHDVLHU�WR�PDUNHW��DQG�WKH�ILUVW�TXHVWLRQ�D�GLVWULEXWRU�WHQGV�WR�DVN�D�ODEHO�LV�³DUH�\RX�WRXULQJ"´$Q\WKLQJ�ZKLFK�KHOSV�EDQGV�DQG�DUWLVWV� LQ� WKH�+LJKODQGV�DQG�,VODQGV�WR� WRXU�ZLOO�DOVR�EH�RIKHOS�WR�WKHLU�UHFRUG�ODEHOV�DQG�LW�PD\�EH�ZRUWK�LQYHVWLJDWLQJ�WKH�ZD\V�LQ�ZKLFK�WKH�DJHQFLHV�LQWKH�DUHD�FDQ�SURYLGH�DVVLVWDQFH�WRZDUGV�WKLV�HQG�+LJKODQGV�DQG�,VODQGV�/DEHOV��+$,/��LV�SURPRWLQJ�QHWZRUNLQJ�EHWZHHQ�WKH�UHFRUG�ODEHOV��DQGKHOSLQJ� WR� UDLVH� WKH� SURILOH� RI� WKH� ODEHOV� DQG� WKH� ZLGH� UDQJH� RI� PXVLF� DQG� DUWLVWV� WKDW� LWUHSUHVHQWV�� � +$,/� ZDV� EURXJKW� WRJHWKHU� E\� 0XVLF� ,QGXVWU\� 'HYHORSPHQW� DQG� 6XSSRUW�0,'$6��� DQG� LV� VXSSRUWHG� E\� WKH�6$&��+,(��+,�$UWV�� DQG� WKH� 3HUIRUPLQJ�5LJKWV� 6RFLHW\)RXQGDWLRQ�� � -XJJOLQJ� WKH� GLIIHUHQW� DVSHFWV� RI� WKHLU� EXVLQHVVHV� OHDYHV� WKRVH� UXQQLQJ� UHFRUGODEHOV� YHU\� OLWWOH� WLPH� WR� ORRN� RXWZDUGV�� DQG� DQ� H[WHUQDO� VRXUFH� RI� VSHFLDOLVW� DGYLFH� DQGLQIRUPDWLRQ�LV�WKXV�D�XVHIXO�UHVRXUFH���� *DOOHULHV$W�WKH�SRLQW�RI�VHWWLQJ�XS�WKH�GDWD�JDWKHULQJ�IRU�WKH�*DOOHULHV�FDVH�VWXG\��ZH�KDG�LGHQWLILHG�DWRWDO�RI����JDOOHULHV�LQ�WKH�+LJKODQGV�DQG�,VODQGVx���*HRJUDSKLFDOO\��WKHUH�DUH�ZLGH�YDULDWLRQV�$UJ\OO�DQG�WKH�,VODQGV��IRU�H[DPSOH��KDG�VL[WHHQ�RI�WKH����JDOOHULHV��ZKLOH�6KHWODQG�KDG�RQO\WKUHH��OHLVXUH�FHQWUHV�DQG�RWKHU�SXEOLF�VSDFHV�RIWHQ�EHLQJ�XVHG�LQ�6KHWODQG�IRU�H[KLELWLQJ�DUW��:KLOH� RQH� PLJKW� H[SHFW� WKH� SUHYDOHQFH� RI� JDOOHULHV� WR� EH� UHODWHG� WR� WKH� SRSXODWLRQ� EDVHFRXSOHG� ZLWK� WRXULVW� QXPEHUV�� WKLV� GRHV� QRW� VHHP� WR� EH� WKH� FDVH�� � 7KH� JDOOHULHV� VHFWRU� LVGLIILFXOW� WR� HYDOXDWH� EHFDXVH� LW� LV� QRW� KRPRJHQHRXV�� � JDOOHULHV� FDQ� KDYH� UDGLFDOO\� GLIIHUHQWDLPV�DQG�REMHFWLYHV�IURP�HDFK�RWKHU�+DYLQJ� FDUULHG� RXW� WKH� FDVH� VWXG\� UHVHDUFK�� KRZHYHU�� ZH� ZHUH� DEOH� WR� GLYLGH� WKH� VHFWRUEURDGO\� LQWR� WKUHH� FDWHJRULHV�� � �L�� JDOOHULHV� DWWHQGHG� WR� DUWLVWV¶� SUHPLVHV�� �LL�� QRW�IRU�SURILWJDOOHULHV��DQG��LLL��FRPPHUFLDO�JDOOHULHV�x D�ODUJHU�QXPEHU�ZHUH�HYHQWXDOO\�LGHQWLILHG�WKURXJK�WKH�DQDO\VLV�E\�/(&�DUHD�WKDW�ZH�FDUULHG�RXW�IRU�WKH�HYHQWVDQG�H[KLELWLRQV�DQDO\VLV�WKDW�LV�SUHVHQWHG�LQ�6HFWLRQ���RI�WKLV�UHSRUW�

Page 29: Microsoft Word - Westbrook master _1_.doc

��

�L� *DOOHULHV�$WWDFKHG�WR�$UWLVWV¶�3UHPLVHV0DQ\�RI�WKHVH�JDOOHULHV�DUH�XVHG�VLPSO\�DV�D�VKRS�ZLQGRZ�IRU�DUWLVWV¶�RZQ�ZRUN���7KHVHDUWLVWV�UDQJH�IURP�VHULRXV�SURIHVVLRQDOV�WR�SHRSOH�ZKR�TXLWH�KDSSLO\�GHVFULEH�WKHLU�DUWLVWLFDFWLYLW\�DV�D�KREE\���6RPH�RI�WKH�DUWLVWV�LQYROYHG�KDYH�WDNHQ�HDUO\�UHWLUHPHQW��RIWHQ�IURPDUW�WHDFKLQJ���7KHUH�DUH�D�QXPEHU�RI�KXVEDQG�DQG�ZLIH�WHDPV�LQYROYHG�LQ�JDOOHULHV�RI�WKLVW\SH���6RPHWLPHV�ERWK�SDUWQHUV�DUH�DUWLVWV�� �6RPHWLPHV�RQH�UXQV�WKH�JDOOHU\�IRU�WKH�RWKHUZKR�SURGXFHV�DUW�ZRUN���6RPH�JDOOHULHV�LQ�WKLV�FDWHJRU\�HQODUJH�RQ�WKLV�IXQFWLRQ�E\�WDNLQJLQ� DUW� ZRUN� IURP� RQH� RU� WZR� RWKHU� ORFDO� DUWLVWV�� RU� E\� VHOOLQJ� FDUGV� DQG� FUDIW� LWHPV� LQDGGLWLRQ� WR�DUW�ZRUN�� �$W� WKLV� HQG�RI� WKH� VSHFWUXP�� LW� EHFRPHV� D�PDWWHU� RI� VHPDQWLFV� WRGHWHUPLQH� ZKLFK� RXWOHWV� FDQ� SURSHUO\� EH� GHVFULEHG� DV� FUDIW� VKRSV� ZLWK� VRPH� DUWZRUNGLVSOD\HG��DQG�ZKLFK�DUH�JDOOHULHV�DOVR�VHOOLQJ�FUDIW�LWHPV���+RZHYHU��WKH�PDLQ�DLP�RI�VXFKJDOOHULHV�LV�FOHDU���WKH\�DUH�WKHUH�WR�VHOO�DUW�ZRUN�DQG�WR�VHOO�LW��SUHGRPLQDQWO\��WR�WRXULVWV�7KH� SUHYDOHQFH� RI� GLIIHUHQW� DUW� IRUPV� LV�� FOHDUO\�� GHSHQGHQW� RQ� WKH� VSHFLDOLVP� RI� WKHJDOOHU\�RZQHU�DQG��DV�D�UHVXOW��RYHU�����RI�WKH�JDOOHULHV�WKDW�ZH�LQWHUYLHZHG�VSHFLDOLVHG�LQSDLQWLQJ�DQG�GUDZLQJ��RYHUZKHOPLQJO\�ODQGVFDSH�ZDWHUFRORXUV���$�PXFK�VPDOOHU�QXPEHUH[KLELW� VFXOSWXUH�� SKRWRJUDSK\�� SULQWLQJ� RU� RWKHU� DUHDV� RI� VSHFLDOLVP�� � 7KH� GLVWLQFWLRQEHWZHHQ�³DUW´�DQG�³FUDIW´�EHFRPHV�XQFOHDU�DQG�VRPHZKDW�DUWLILFLDO�LQ�JDOOHULHV�RI�WKLV�W\SHVSHFLDOLVLQJ�LQ��IRU�H[DPSOH��MHZHOOHU\�RU�FHUDPLFV�7KH�PRVW�FRPPRQ�IRUP�RI�H[KLELWLRQ�LQ�VXFK�JDOOHULHV�LV�D�UROOLQJ�SHUPDQHQW�H[KLELWLRQ�ZKHUH� LQGLYLGXDO� LWHPV� VROG� DUH� UHSODFHG� LPPHGLDWHO\� IURP� LWHPV� IURP� VWRFN� RU� QHZO\SURGXFHG� LWHPV�� � ,Q� VRPH� FDVHV�� DUWLVWV� GHYHORS� D� ZRUN� SDWWHUQ� ZKLFK� LQYROYHV� KLJKHUOHYHOV�RI�SURGXFWLRQ�LQ�ZLQWHU��ZLWK�JDOOHU\�ZRUN�GXULQJ�WKH�WRXULVW�PRQWKV���7KH�IRFXV�RIJDOOHULHV�DWWDFKHG�WR�DUWLVWV¶�SUHPLVHV�LV�DOPRVW�DOZD\V�RQ�WKH�WRXULVW�WUDGH��DQG�RQH�PLJKWDVVXPH� WKDW� WKHLU� IRUWXQHV�ZRXOG� EH� UHODWHG� WR� WKH�PRUH� JHQHUDO� XSV� DQG� GRZQV� RI� WKHYLVLWRU� LQGXVWU\�� �+RZHYHU��ZKLOH� WKLV� LV� WKH� FDVH� IRU� DERXW� KDOI� RI� WKRVH� LQWHUYLHZHG�� DVLJQLILFDQW� SURSRUWLRQ� UHIHUUHG� WR� EXFNLQJ� WKH� WRXULVP� WUHQG�� � :KLOH� RYHUDOO� WRXULVWQXPEHUV�KDYH�EHHQ�IDOOLQJ��VRPH�RI�WKH�JDOOHULHV� LQWHUYLHZHG�EHOLHYH�WKDW� WKH�SURSRUWLRQRI� WRXULVWV� YLVLWLQJ� WKHLU� JDOOHULHV� PD\� EH� ULVLQJ�� OHDGLQJ� WR� DQ� RYHUDOO� LPSURYHPHQW� LQWUDGH�IRU�VRPH�JDOOHULHV�RI�WKLV�W\SH�&KDQJLQJ� LQWHULRU� GHVLJQ� IDVKLRQV� VHHP� WR� EH� GULYLQJ� WRZDUGV� D� JUHDWHU� RSHQQHVV� WREX\LQJ�RULJLQDO�DUWZRUN�IRU�GLVSOD\�DW�KRPH���6HYHUDO�JDOOHU\�RZQHUV�LQ�WKLV�FDWHJRU\�IHOWWKDW� WHOHYLVLRQ� LQWHULRU� GHVLJQ� SURJUDPPHV� VXFK� DV� ³FKDQJLQJ� URRPV´� KDYH� KDG� DFRQVLGHUDEOH� LQIOXHQFH�� � 7KHUH� LV� D� YLHZ� WKDW� WKH� PDUNHW� IRU� RULJLQDO� DUWZRUN� KDVEURDGHQHG��ZKHUH�SHRSOH�ZRXOG�RQFH�KDYH�ERXJKW�UHSURGXFWLRQV�RI�WKH�³2OG�0DVWHUV´�WRGLVSOD\�DW�KRPH��WKH\�DUH�QRZ�PRUH�OLNHO\�WR�EX\�D�SLHFH�RI�RULJLQDO�DUWZRUN�*DOOHULHV�LQ�WKLV�FDWHJRU\�WHQG�WR�EH�RSHQ�RQO\��RU�PDLQO\��GXULQJ�WKH�WRXULVW�VHDVRQ��DQGDUH�LQFOLQHG�WR�YLHZ�WKHPVHOYHV�PRUH�DV�SURYLGLQJ�D�WRXULVW�VHUYLFH�WKDQ�D�VHUYLFH�WR� WKHORFDO�FRPPXQLW\��WKRXJK�VRPH�SURYLGH�IUDPLQJ�IRU�RWKHU�ORFDO�DUWLVWV���6XFK�JDOOHULHV�DUHRIWHQ� VLWXDWHG� LQ� VFHQLF� DUHDV� DQG� VHUYH� WR� EROVWHU� WKH� FULWLFDO� PDVV� RI� WRXULVW� VHUYLFHVZLWKLQ�D�FRPPXQLW\���,Q�SDUWLFXODU��JDOOHULHV�FDQ�SURYLGH�DQ�DOO�ZHDWKHU�IDFLOLW\��SURYLGLQJVRPHWKLQJ� LQWHUHVWLQJ� IRU� WRXULVWV� WR� GR� ZKHQ� ZHDWKHU� FRQGLWLRQV� DUH� XQVXLWDEOH� IRURXWGRRU�DFWLYLWLHV��7KH�JDOOHULHV�GR�QRW�XVXDOO\�NHHS�UHFRUGV�RI�YLVLWRU�QXPEHUV��DQG�LW�LVRIWHQ�GLIILFXOW�WR�GLVHQWDQJOH�WKH�GLIIHUHQW�HOHPHQWV�RI�WKH�EXVLQHVV���SURYLVLRQ�RI�DUWZRUN�IUDPLQJ��DUW�VDOHV�WKURXJK�WKH�JDOOHU\�DQG�VDOHV�RI�RWKHU�JRRGV�WKURXJK�WKH�JDOOHU\�

Page 30: Microsoft Word - Westbrook master _1_.doc

��

7KLV� JURXS� RI� JDOOHULHV� GRHV� QRW� WHQG� WR� VSHQG�PXFK� RQ� ORFDO� JRRGV� DQG� VHUYLFHV�� � $VH[KLELWLRQV�DUH�³UROOLQJ´�LQ�WKHLU�QDWXUH��WKHUH�DUH�QR�³RSHQLQJV´�ZLWK�ZLQH�RU�IRRG���6RPHJDOOHULHV�KDYH�EURFKXUHV�RU�OHDIOHWV�DQG�D�SURSRUWLRQ�RI�WKHVH�DUH�VRXUFHG�ORFDOO\���:KLOH�DIHZ�RI�WKH�JDOOHULHV�LQ�WKLV�FDWHJRU\�PD\�SURYLGH�UHVRXUFHV�IRU�ORFDO�VFKRROV��IRU�H[DPSOH�WKURXJK�SURYLGLQJ�ZRUN�H[SHULHQFH�SODFHPHQWV���WKHUH�LV�XVXDOO\�OLWWOH�RYHUW�VRFLDO�LPSDFWDVVRFLDWHG�ZLWK�WKH�JDOOHU\��LL� 1RW�IRU�3URILW�*DOOHULHV7KLV� FDWHJRU\� RI� JDOOHU\� LQFOXGHV� WKH� IRXU� JDOOHULHV� UXQQLQJ� XQGHU� WKH� DXVSLFHV� RI� 7KH+LJKODQG�&RXQFLO�DORQJ�ZLWK�D�YDULHW\�RI�RWKHU�JDOOHULHV�ZKRVH�PDLQ�IXQFWLRQ�LV�WR�PDNH�DULFK��GLYHUVH�DQG�UHOHYDQW�H[SHULHQFH�RI� WKH�YLVXDO�DUWV�DYDLODEOH� WR� ORFDO�SHRSOH�� �7KHVHJDOOHULHV� PD\� KDYH� D� UDQJH� RI� GHWDLOHG� REMHFWLYHV�� EXW� IRU� PDQ\� WKH� EDODQFH� EHWZHHQWRXULVW�DQG�ORFDO�³EXVLQHVV´�LV�WKH�UHYHUVH�RI�WKDW�IRU�FDWHJRU\��L��DERYH���WKH�JDOOHULHV�DUHSULPDULO\�WKHUH�IRU�ORFDO�SHRSOH��DQG�WRXULVW�YLVLWRUV��WKRXJK�ZHOFRPH��DUH�LQFLGHQWDO�WR�WKHJDOOHULHV¶�PDLQ� REMHFWLYHV�� � ,Q� VRPH� FDVHV�� WRXULVW� YLVLWRUV� DUH� VHHQ� DV� D�PHFKDQLVP� IRUVXVWDLQLQJ�ZKDW�LV�SUHGRPLQDQWO\�YLHZHG�DV�D�ORFDO�VHUYLFH���2WKHU�QRW�IRU�SURILW�JDOOHULHV�KRZHYHU�� SDUWLFXODUO\� WKRVH� LQ� DUHDV� ZLWK� UHODWLYHO\� ORZ� SRSXODWLRQ� GHQVLWLHV� DQG� KLJKWRXULVW�QXPEHUV��GR�VHH�WKHLU�VHUYLFH�WR�WRXULVWV�DV�EHLQJ�YHU\�VLJQLILFDQW��ZKLOH�QRW�ORVLQJVLJKW�RI�WKH�ORFDO�GLPHQVLRQ�1RW�IRU�3URILW� JDOOHULHV� WHQG� WR� SURPRWH� WKHPHG� WHPSRUDU\� H[KLELWLRQV�� DQG� WKHFRQYHQWLRQDO�GLVWLQFWLRQV�EHWZHHQ�GLIIHUHQW�DUW�IRUPV�DQG�EHWZHHQ�DUW�DQG�FUDIWV�EHFRPHODUJHO\� DUWLILFLDO� DQG� LUUHOHYDQW�� WR� WKH� H[WHQW� WKDW� PRVW� LQWHUYLHZHHV� ZHUH� XQDEOH� WRXQWDQJOH� WKH� SHUFHQWDJH� LPSRUWDQFH� RI� GLIIHUHQW� DUW� IRUPV�� � 0DQ\� RI� WKH� H[KLELWLRQVIHDWXUHG�LQ�WKLV�VHFWRU�DUH�EHVW�GHVFULEHG�DV�³PL[HG�PHGLD´���$V�WKH�H[KLELWLRQV�DUH�VHW�XSSULPDULO\� IRU� WRXULQJ�� VDOHV�RI� DUW�ZRUN�GR�QRW�QRUPDOO\� IHDWXUH� DV�SDUW� RI� WKH�JDOOHULHV¶DFWLYLWLHV�� DOWKRXJK�VRPH�VWUDGGOH� WKH�GLYLGH�EHWZHHQ�FRPPHUFLDO� SURYLVLRQ�RI� DUW�ZRUNDQG�SURYLVLRQ�RI�D�FXOWXUDO�H[SHULHQFH���*DOOHULHV�RI�WKLV�W\SH�DUH�OHVV�OLNHO\�WR�EH�VHDVRQDOLQ�WKHLU�RSHUDWLRQ�DQG�DUH�PRUH� OLNHO\� WR�HPSOR\�PRUH� WKDQ�RQH�SHUVRQ��RIWHQ�RQ�D�SDUW�WLPH�EDVLV���7KH\�UXQ�D�VHULHV�RI�WHPSRUDU\�H[KLELWLRQV��HDFK�WHQGLQJ�WR�ODVW�EHWZHHQ�WZRDQG�VL[�ZHHNV�WKURXJKRXW�WKH�\HDU�7KH� ZLGHU� ORFDO� HFRQRPLF� LPSDFW� RI� WKH� QRW�IRU�SURILW� JDOOHULHV� LV� JHQHUDOO\� QRW� KLJK�0RVW� DUH�KHDYLO\�GHSHQGHQW�RQ� ORFDO� DXWKRULW\� DQG� RWKHU� DJHQF\� IXQGLQJ� DQG��ZLWK� FXWVRYHU� PDQ\� \HDUV� LQ� ORFDO� DXWKRULW\� DQG� DJHQF\� EXGJHWV�� WKH� JDOOHULHV� KDYH� IRXQGWKHPVHOYHV�ZLWK�YHU\�OLPLWHG�VSHQGLQJ�SRZHU�7KH�VRFLDO� LPSDFW�RI� WKHVH�JDOOHULHV� LV��KRZHYHU��KLJK�� �6FKRROV�DUH� LQFUHDVLQJO\�PDNLQJXVH�RI� WKH�JDOOHULHV�DV�D� UHVRXUFH��DQG�+LJKODQG�&RXQFLO¶V�([KLELWLRQV�6HUYLFH�SURGXFHVVFKRROV�SDFNV�WR�HQDEOH�WHDFKHUV� WR�PDNH�EHVW�XVH�RI� LWV�JDOOHULHV�� �6RPH�RI� WKH�QRW�IRU�SURILW�JDOOHULHV�RUJDQLVH�H[KLELWLRQV�RI� ORFDO�VFKRRO�SXSLOV¶�ZRUN�� �7KH�QHZ�+LJKHU�6WLOOSURJUDPPH�LQ�$UW�DQG�'HVLJQ�SODFHV�D�JUHDWHU�OHYHO�RI�LPSRUWDQFH�RQ�YLHZLQJ�RULJLQDO�DUWZRUN��DQG�WKH�JDOOHULHV�PDNH�D�XVHIXO�FRQWULEXWLRQ�LQ�WKLV�DUHD��ZKLOH�7DLJK�&KHDUVDEKDJKRIIHUV�D�QDWLRQDOO\�FHUWLILFDWHG�KLJKHU�HGXFDWLRQ�FRXUVH���0DQ\�RI�WKH�JDOOHULHV�RI�WKLV�W\SHPDNH�WKHLU�IDFLOLWLHV�DYDLODEOH��XVXDOO\�GXULQJ�WKH�WRXULVW�VHDVRQ��WR�ORFDO�DUWLVWV��DUW�JURXSVDQG�FOXEV���7KLV�FDQ�DFW�DV�D�IRFDO�SRLQW�IRU�ORFDO�DUW�FOXE�DFWLYLWLHV�DQG�PD\�SURYLGH�ORFDODUWLVWV� ZLWK� WKHLU� ILUVW� RSSRUWXQLW\� WR� GLVSOD\� DQG� VHOO� ZRUN�� � 7KHUH� LV� DOVR� D� FRQFHUWHGHIIRUW�RQ�WKH�SDUW�RI�WKHVH�JDOOHULHV�WR�GH�P\VWLI\� WKH�YLVXDO�DUWV�DQG�WR�PDNH�WKHP�PRUHDFFHVVLEOH��UHPRYLQJ�WKH�DXUD�RI�HOLWLVP�ZKLFK�KDV�VXUURXQGHG�WKH�YLVXDO�DUWV�

Page 31: Microsoft Word - Westbrook master _1_.doc

��

�LLL� &RPPHUFLDO�*DOOHULHV7KHUH�DUH�UHODWLYHO\�IHZ�FRPPHUFLDO�JDOOHULHV�LQ�WKH�+LJKODQGV�DQG�,VODQGV�DUHD��DQG�WKHVHDUH�ORFDWHG�PRVWO\�LQ�WKH�PDLQ�SRSXODWLRQ�FHQWUHV��VXFK�DV�,QYHUQHVV��.LUNZDOO�DQG�7DLQ�$V�FRPPHUFLDO�RSHUDWLRQV�� WKHVH�JDOOHULHV�KDYH� WR�PD[LPLVH�ERWK� WKHLU� ORFDO� DQG� WRXULVWPDUNHWV���7KH\�DUH�VHOHFWLYH�DERXW�WKH�ZRUN�WKDW�WKH\�H[KLELW�DQG�WHQG�WR�EH�JHDUHG�WR�VDOHVRI� DUWZRUN��PDNLQJ� WKHLU� LQFRPH� IURP� WKH� FRPPLVVLRQ� WKH\� UHFHLYH�� ZKLOH� SURYLGLQJ� DVRXQG� FXOWXUDO� H[SHULHQFH� IRU� JDOOHU\� YLVLWRUV�� &RPPHUFLDO� JDOOHULHV� WHQG� WR� KDYH� DQH[KLELWLRQ�F\FOH�WKDW�LQFRUSRUDWHV�D�VHULHV�RI�HYHQWV�ZLWK�VLQJOH�DUWLVWV��JURXSV�RI�DUWLVWV��RUWKHPHG�HYHQWV�HDFK� ODVWLQJ�D� IHZ�ZHHNV�� �:KLOH�SDLQWLQJ� DQG�GUDZLQJ�GRPLQDWH� LQ� WKLVVHFWRU��WKH�JDOOHULHV�DOVR�IHDWXUH�VFXOSWXUH��FHUDPLFV��MHZHOOHU\��SKRWRJUDSK\�DQG�SULQWLQJWR�YDU\LQJ�GHJUHHV�6RPH� JDOOHULHV�ZKLFK� VWDUWHG� LQ� WKH� ILUVW� FDWHJRU\� DERYH� KDYH� VWHSSHG� XS� WKHLU� DFWLYLW\RYHU�WLPH��SHUKDSV�H[SDQGLQJ�SUHPLVHV�DQG�H[KLELWLQJ�D�ZLGHU�UDQJH�RI�DUWLVWV��WR�EHFRPHJDOOHULHV�LQ�WKLV�WKLUG�FDWHJRU\�7KH�(FRQRPLF�,PSRUWDQFH�RI�WKH�*DOOHULHV'LVFRXQWLQJ�WKH�DUWLVW�JDOOHU\�RZQHU�ZKR�H[KLELWV�KLV�RU�KHU�RZQ�ZRUN��WKHUH�DSSHDU�WR�EHPRUH�WKDQ�����+LJKODQGV�DQG�,VODQGV�EDVHG�DUWLVWV�ZKR�DUH�UHOLDQW�RQ�WKH�JDOOHULHV�LQ�WKHDUHD�WR�H[KLELW�DQG�VHOO�WKHLU�ZRUN��H[FOXGLQJ�KREE\LVWV��7KH� IDFW� WKDW� WKH� YDVW� PDMRULW\� RI� JDOOHULHV� LQ� WKH� +LJKODQGV� DQG� ,VODQGV� GR� QRW� NHHSUHFRUGV� RI� YLVLWRU� QXPEHUV� PDNHV� WKH� RYHUDOO� DWWHQGDQFH� ILJXUH� GLIILFXOW� WR� HVWLPDWH�+RZHYHU�LW�LV�SUREDEOH�WKDW�WKHUH�DUH�DERXW���������YLVLWV�WR�JDOOHULHV�LQ�WKH�+LJKODQGV�DQG,VODQGV� SHU� DQQXP�� ZLWK� DERXW� WZR�WKLUGV� RI� WKHVH� YLVLWV� PDGH� E\� WRXULVWV�� � 7KLV� WRWDOILJXUH�H[FOXGHV�FDVXDO�YLVLWRUV��HJ��(GHQ�&RXUW�7KHDWUH�SHUIRUPDQFH�DXGLHQFHV�ZKR�SDVVWKH�H[KLELWLRQV�RQ�WKHLU�ZD\�WR�WKH�DXGLWRULXP��*DOOHU\�LQFRPH�KDV�DOVR�EHHQ�GLIILFXOW�WR�HVWLPDWH���7KH�QRW�IRU�SURILW�VHFWRU�GRHV�QRW��E\DQG� ODUJH�� VHOO� ZRUN� DQG� WKHUHIRUH� FDOFXODWHV� LWV� WXUQRYHU� HQWLUHO\� GLIIHUHQWO\� IURP� WKHEXVLQHVV� VHFWRU�� � 7KH� RQH�DUWLVW� JDOOHULHV� �DQG� VRPH� RI� WKH� WZR� DUWLVW� RQHV�� GR� QRWGLIIHUHQWLDWH� EHWZHHQ� SURYLVLRQ� RI� DUWZRUN� DQG� JDOOHU\� DFWLYLW\�� � 0RVW� RI� WKH� JDOOHULHVLQWHUYLHZHG�ZHUH� H[WUHPHO\� FR\� DERXW�SURYLGLQJ� LQFRPH� ILJXUHV�� DQG�PDQ\� VLPSO\� VDLGWKH\�ZRXOG� QRW� GLVFXVV� HLWKHU� WKHLU� RZQ� LQFRPH�� RU� WKH� LQFRPH� SDLG� WR� DUWLVWV��ZKHWKHU+LJKODQGV�DQG�,VODQGV�EDVHG�RU�QRW���+RZHYHU��RQ�WKH�EDVLV�RI�HYLGHQFH�IURP�WKRVH�ZKRZHUH�SUHSDUHG�WR�GLVFXVV�WXUQRYHU DQG�IURP�RXU�DUHD�E\�DUHD�DQDO\VLV�RI�DOO�DUWV�DFWLYLW\�ZH�HVWLPDWH�WKDW�WKH�VHFWRU�PD\�EH�ZRUWK�VRPHZKHUH�LQ�WKH�UHJLRQ�RI������PLOOLRQ�:KLOH�SUREDEO\�PRUH� WKDQ� WZR�KXQGUHG� LQGLYLGXDOV�ZRUN� LQ� JDOOHULHV� LQ� VRPH� FDSDFLW\�WKLV�DPRXQWV�WR�OHVV�LQ�IXOO�WLPH�HTXLYDOHQWV���7KH�YDVW�PDMRULW\�RI�JDOOHULHV�GR�QRW�SURYLGHD� IXOO�WLPH� HTXLYDOHQW� MRE�� � ,Q� WKH� FDVH� RI� DUWLVW� JDOOHU\� RZQHUV�� WLPH� LV� JHQHUDOO\� VSOLWEHWZHHQ� SURGXFLQJ� DUW� ZRUN� DQG� GRLQJ� ³IURQW� RI� KRXVH´� DV� UHTXLUHG�� � 6HYHUDO� JDOOHU\RZQHUV�DOVR�SURYLGH�IUDPLQJ�VHUYLFHV�DQG�ZRUN�DW�WKLV�ZKLOH�WKH�JDOOHU\�LV�TXLHW���*DOOHULHVLQ�WKH�+LJKODQGV�DQG�,VODQGV�SURYLGH�LQ�WKH�UHJLRQ�RI����IXOO�WLPH�HTXLYDOHQW�MREV�

Page 32: Microsoft Word - Westbrook master _1_.doc

��

��� $63(&76�2)�(&2120,&�,03$&77ZR�FDWHJRULHV�RI�HFRQRPLF�LPSDFW�WKDW�IHHG�LQWR�WKH�/(&�DUHD�DQDO\VLV�LQ�6HFWLRQ���EHORZZHUH� ILUVW� DQDO\VHG� DW� WKH� ZLGHU� +LJKODQGV� DQG� ,VODQGV� OHYHO�� � �L�� (GXFDWLRQDO� DUWV�UHODWHGHPSOR\PHQW��DQG��LL��,PSDFWV�IURP�YLVLWLQJ�SHUIRUPHUV���� (GXFDWLRQDO $UWV�5HODWHG�(PSOR\PHQW,Q�RUGHU�WR�DVVHVV�WKH�QXPEHU�RI�WHDFKHUV�RI�DUWV�UHODWHG�VXEMHFWV�LQ�WKH�HGXFDWLRQDO�VHFWRU��ZHFRQWDFWHG�DOO�RI�WKH�HGXFDWLRQDO�DXWKRULWLHV�LQ�WKH�+LJKODQGV�DQG�,VODQGV�IRU�GDWD�RQ�SULPDU\DQG�VHFRQGDU\�HGXFDWLRQ��DQG�DOO�RI�WKH�UHOHYDQW�8+,�SDUWQHU�FROOHJHV�IRU�GDWD�RQ�IXUWKHU�DQGKLJKHU�HGXFDWLRQ���$OO�SURYLGHG�LQIRUPDWLRQ��DOWKRXJK�LQ�VRPH�FDVHV�LW�ZDV�GLIILFXOW�WR�GHGXFHIXOO�WLPH�HTXLYDOHQFH�IURP�QXPEHUV�RI�SHRSOH�HPSOR\HG�DQG�WR�H[FOXGH�WKH�WHDFKLQJ�RI�FUDIWV�GHVLJQ��HWF�IURP�ZLGHU�FRXUVHV��LQ�RUGHU�WR�UHWDLQ�FRQVLVWHQF\�ZLWK�RWKHU�DVSHFWV�RI�WKH�VWXG\��3ULPDU\�DQG�VHFRQGDU\�HGXFDWLRQ�ZHUH�FRYHUHG�LQ� WKH������VWXG\��DQG�WKH�ILJXUHV�IURP�WKDWVWXG\�DUH�JLYHQ�EHORZ�IRU�FRPSDULVRQ�ZLWK�WKRVH�IRU�HDUO\������

7HDFKHUV�RI�$UWV�5HODWHG�6XEMHFWVLQ�3ULPDU\�DQG�6HFRQGDU\�6FKRROV�IXOO�WLPH�HTXLYDOHQW�MREV�0XVLF $UW 'UDPD 'DQFH 7RWDO���� ���� ���� ���� ���� ���� ���� ���� ���� ����6KHWODQG �� �� �� �� � � � � �� ��2UNQH\ � � � �� � � � � �� ��:HVWHUQ�,VOHV �� �� �� �� � � � � �� ��+LJKODQG�:HVW�0RUD\ ��� ��� �� �� � � � � ��� ���$UJ\OO�DQG�,VODQGV �� �� �� �� � � � � �� ��7RWDOV ��� ��� ��� ��� � � � � ��� ���

7KH�GDWD�IRU�WKH�WZR�\HDUV�������DQG�������DUH�QRW�SUHFLVHO\�FRPSDUDEOH�DV�GLIIHUHQW�PHWKRGVPD\�KDYH�EHHQ�XVHG�E\�WKRVH�SURYLGLQJ�WKH�LQIRUPDWLRQ�LQ�FDOFXODWLQJ�IXOO�WLPH�HTXLYDOHQFH�7KH�IROORZLQJ�SRLQWV�DUH��KRZHYHU��FOHDU�x 7KHUH� KDV� EHHQ� D� VLJQLILFDQW� UHGXFWLRQ� LQ� DUW� WHDFKHUV� LQ� +LJKODQG�� � ,Q� +LJKODQG� SULPDU\VFKRROV�� YLVLWLQJ� VSHFLDOLVWV�ZKR�KDYH� UHWLUHG� RU� RWKHUZLVH� OHIW� KDYH� QRW� EHHQ� UHSODFHG� �IRUHFRQRP\���WKH�UHVSRQVLELOLW\�IRU�WHDFKLQJ�DUW�DQG�PXVLF�IDOOLQJ�LQFUHDVLQJO\�RQ�JHQHUDO�FODVVWHDFKHUV�� � ,Q�+LJKODQG� VHFRQGDU\� VFKRROV�� WKHUH� KDV� EHHQ� D� FKDQJH� LQ� EDODQFH� EHWZHHQ� WKHWHDFKLQJ� RI� DUWV� DQG� PXVLF� LQ� WKH� HDUO\� \HDUV�� ZKLFK� KDV� OHG� WR� DQ� LQFUHDVH� LQ� PXVLF� �DQGLQVWUXPHQW��WXLWLRQ�DQG�D�UHGXFWLRQ�LQ�DUW�WXLWLRQ�x ,Q� FRPSDULVRQ� ZLWK� 2UNQH\� DQG� WKH� :HVWHUQ� ,VOHV�� WKHUH� DUH� D� UHODWLYHO\� KLJK� QXPEHU� RIVSHFLDOLVW� DUWV�UHODWHG� WHDFKHUV� LQ� 6KHWODQG� ZKLFK� SHUKDSV� UHIOHFWV� WKH� DELOLW\� RI� WKH� /RFDO$XWKRULW\� WKURXJK� RLO� UHYHQXHV� WR� LQFXU� GLVFUHWLRQDU\� H[SHQGLWXUH� LQ� LWV� SULRULW\� DUHDV�6KHWODQG�FRQWLQXHV�WR�VSHFLDOLVH�LQ�PXVLF��DQG�WKLV�LV�OLQNHG�WR�WKH�UHODWLYHO\�KLJK�QXPEHU�RISURIHVVLRQDO�DQG�DPDWHXU�PXVLFLDQV�LQ�6KHWODQG�WKDW�ZH�IRXQG�LQ�RXU�ZLGHU�DQDO\VLV�IRU�WKLVVWXG\�x 'UDPD� DQG� GDQFH� WHDFKLQJ�� DV� LQ� ������ ODJ� EHKLQG� PXVLF� DQG� YLVXDO� DUW� WXLWLRQ�� DOWKRXJKGUDPD�DV�SDUW�RI�WKH�FXUULFXOXP�ZLOO�EH�WDXJKW�WR�DQ�H[WHQW�E\�(QJOLVK�WHDFKHUV��DQG�GDQFH�E\

Page 33: Microsoft Word - Westbrook master _1_.doc

��

3(� DQG�RWKHU� WHDFKHUV�� � 7KH� GDQFH� WHDFKLQJ� LQ� 2UNQH\� VKRZQ� DERYH� UHSUHVHQWV� H[SUHVVLYHGDQFLQJ�WDXJKW�LQ�EORFNV�E\�3(�WHDFKHUV�x <RXQJ� SHRSOH¶V� LQWHUHVW� LQ� GUDPD� LV� LOOXVWUDWHG� E\� DQ� ���� LQFUHDVH� LQ� DSSOLFDWLRQV� IRUXQLYHUVLW\�GUDPD�FRXUVHV�LQ�WKH�8.�LQ�WKH�SDVW�VHYHQ�\HDUV��LQIOXHQFHG�E\�SRWHQWLDO�FDUHHUV�LQWHOHYLVLRQ����7KLV�VWUHQJWK�RI�GHPDQG�KDV�QRW�VWLPXODWHG�LQFUHDVHG�SURYLVLRQ�LQ�+LJKODQGV�DQG,VODQGV�VFKRROV��DQG�LWV�SXSLOV�DUH�WKXV�GLVDGYDQWDJHG�LQ�SURJUHVVLQJ�LQWR�KLJKHU�HGXFDWLRQ�LQWKLV�ILHOG�

)URP� WKH� LQIRUPDWLRQ� UHFHLYHG��ZH� HVWLPDWH� WKDW� ������ IWH� MREV� DUH� SURYLGHG� LQ� DUWV�UHODWHGWHDFKLQJ�ZLWKLQ�WKH�+LJKODQGV�DQG�,VODQGV�E\�WKH�8+,�SDUWQHUV���7KLV�UDQJH�LV�JLYHQ�EHFDXVHRI�WKH�GLIILFXOW\�RI�H[FOXGLQJ�FUDIWV��GHVLJQ��HWF�ZKHUH�WKLV�LV�SDUW�RI�D�ZLGHU�DUWV�FRXUVH���,QDGGLWLRQ�� FRXUVH� WXWRULQJ� IRU� WKH� 2SHQ� 8QLYHUVLW\� DQG� WKH� 2SHQ� &ROOHJH� IRU� WKH� $UWV� ZLOOSURYLGH�HPSOR\PHQW� LQ� WKH�+LJKODQGV�DQG�,VODQGV��EXW� WKLV�ZRUN�ZLOO� WHQG� WR�EH�XQGHUWDNHQIRU� VXSSOHPHQWDU\� LQFRPH� E\� SHRSOH� DOUHDG\� LQFOXGHG� LQ� RXU� HFRQRPLF� LPSDFW� DQDO\VLV� DVDUWLVWV�RU�WHDFKHUV�$V�QRWHG�HOVHZKHUH�LQ�WKLV�UHSRUW��DUWV�WHDFKHUV�DUH�RIWHQ�LPSRUWDQW�LQ�WKHLU�ORFDO�DUHDV�WKURXJKDOVR�EHLQJ�DFWLYH�ZLWKLQ�WKHLU�GLVFLSOLQH��HJ��DV�D�PXVLFLDQ��DQG�RU�WKURXJK�KHOSLQJ�WR�OHDG�RUSDUWLFLSDWH� LQ� ORFDO� DUWV� LQLWLDWLYHV�� FRPPXQLW\� DUWV� HYHQWV�� HWF�� � 6LQFH� DUWV� WHDFKHUV� DUHVSHFLDOLVWV�ZKR�ZRXOG�RWKHUZLVH��LQ�JHQHUDO��EH�HPSOR\HG�DV�VXFK�RXWZLWK�WKH�+LJKODQGV�DQG,VODQGV�ZHUH�WKH�MREV�VKRZQ�LQ�WKH�WDEOH�DERYH�QRW�DYDLODEOH�LQ�WKH�UHJLRQ��WKH�EHQHILWV�IURPWKH�VFDOH�RI�SURYLVLRQ�RI�VXFK�MREV�LQ�ORFDO�DUHDV�H[WHQGV�EH\RQG�HTXLSSLQJ�VFKRRO�SXSLOV�ZLWKDUWLVWLF� VNLOOV� DQG� �WKHUHE\��HQFRXUDJLQJ� WKHP� WR�SDUWLFLSDWH� DFWLYHO\� LQ� WKH� DUWV� ODWHU� LQ� OLIH�7KH�UHGXFWLRQ�LQ�VSHFLDOLVW�DUW�WHDFKHUV��DQG�WKH�YLUWXDO�DEVHQFH�RI�VSHFLDOLVW�GUDPD�DQG�GDQFHWHDFKHUV��WKXV�PHDQV�WKDW�FRPPXQLWLHV�KDYH�EHFRPH�LQFUHDVLQJO\�GHSULYHG�RI�WKLV�VNLOOV�EDVH���� ,PSDFWV�IURP�9LVLWLQJ�3HUIRUPHUV3HUIRUPHUV� DW� WKH� HYHQWV� FRYHUHG� LQ� WKH� DQDO\VLV� LQ� 6HFWLRQ� �� RI� WKLV� UHSRUW� DQG� DVVLVWDQWVWUDYHOOLQJ� ZLWK� WKHP� JHQHUDWH� VLJQLILFDQW� HFRQRPLF� EHQHILW� WR� DUHDV� LQ� ZKLFK� WKH\� VWD\RYHUQLJKW�ZKHQ�VXFK�H[SHQGLWXUHV�DUH�DJJUHJDWHG�RYHU�WKH�\HDU�� �7KHVH�LPSDFWV�� LQ� WHUPV�RIH[SHQGLWXUH� E\� YLVLWLQJ� SHUIRUPHUV�� DUH� DQDO\VHG� EHORZ� VHSDUDWHO\� IRU� �D�� SHUIRUPDQFHV� DW(GHQ�&RXUW�7KHDWUH��DQG��E��DOO�RWKHU�HYHQWV��LQFOXGLQJ�IHVWLYDOV��ZKHUH�VRPH�SHUIRUPHUV�ZLOOYLVLW�WKH�ORFDO�DUHD�IRU�VHYHUDO�GD\V���D� (GHQ�&RXUW�7KHDWUH�3HUIRUPDQFHV7KH� GLUHFWRU� RI�(GHQ� &RXUW�� &ROLQ� 0DUU�� SURYLGHG� XV� ZLWK� HVWLPDWHV� HYHQW�E\�HYHQW� IRU� DOOSHUIRUPDQFHV�DW�WKH�WKHDWUH�EHWZHHQ��VW 2FWREHU������DQG���WK 6HSWHPEHU������RI�WKH�QXPEHURI�SHRSOH� LQ� WKH� YLVLWLQJ� FRPSDQ\� DQG� WKH� QXPEHU� RI� QLJKWV� �LI� DQ\�� WKDW� WKHVH� SHRSOH�ZLOOKDYH�VSHQW� LQ� WKH� ORFDO�DUHD� �QRUPDOO\� ,QYHUQHVV��� �7KH�VL]H�RI�YLVLWLQJ�JURXSV� VSHQGLQJ� WKHQLJKW�YDULHG�IURP���WR�DSSUR[LPDWHO\������6FRWWLVK�%DOOHW����$W�OHDVW�����SHRSOH�SHUIRUPLQJ�DWWKH�,QYHUQHVV������)HVWLYDO�)OLQJ��6HSWHPEHU��QG��ZLOO�DOVR�KDYH�VSHQW� WKH�QLJKW� ORFDOO\�� � ,QWRWDO��YLVLWLQJ�FRPSDQLHV�ZLOO�KDYH�VSHQW�D�WRWDO�RI�������QLJKWV�RYHU�WKH�\HDU��ZKLOH�D�IXUWKHU����� YLVLWRU�GD\V�ZLOO�KDYH�EHHQ�JHQHUDWHG��LH�� WKHVH�SHRSOH�ZLOO�KDYH� WUDYHOOHG�KRPH�DIWHUWKH�SHUIRUPDQFH��3URIHVVLRQDO� PXVLFLDQV�� GDQFHUV�� HWF� JHQHUDOO\� VWD\� LQ� UHODWLYHO\� H[SHQVLYH� KRWHOV�� ZKHUHDVVPDOO�JURXSV�WHQG�WR�VWD\�LQ�EXGJHW�DFFRPPRGDWLRQ���*LYHQ�WKH�RSSRUWXQLWLHV�WR�VSHQG�PRQH\LQ�,QYHUQHVV� WKH�GD\�DIWHU�D�SHUIRUPDQFH�DQG�WKLV�DFFRPPRGDWLRQ�SURILOH��ZH�KDYH�DVVXPHG

Page 34: Microsoft Word - Westbrook master _1_.doc

��

WKDW� WKHVH�������YLVLWRU�QLJKWV�ZLOO�JHQHUDWH�DQ�DYHUDJH�VSHQG�RI�������JLYLQJ�WRWDO�VSHQG�RI�����������7KH�������YLVLWRU�GD\V��ZH�KDYH�DVVXPHG��ZLOO�JHQHUDWH�DQ�DYHUDJH�VSHQG�RI����SHU� GD\� �� JLYLQJ� DGGLWLRQDO� WRWDO� VSHQG� RI� ��������� � 7RJHWKHU�� WKHVH� H[SHQGLWXUHV� WRWDODSSUR[LPDWHO\�����������E� 2WKHU�9LVLWLQJ�3HUIRUPHUV*URXSV�RU�LQGLYLGXDOV�JLYLQJ�SHUIRUPDQFHV�DW�RWKHU�HYHQWV�DQG�IHVWLYDOV�DQG�VWD\LQJ�RYHUQLJKWZLOO�YDU\�IURP�RQH��HJ��D�MD]]�SLDQLVW��WR�GRXEOH�ILJXUHV�IRU�D�JURXS�RI�GDQFHUV��WR�PXFK�ODUJHUQXPEHUV� DW� VSHFLDO� HYHQWV� VXFK� DV� WKH� 1DWLRQDO� 0RG� DQG� WKH� 1RUWKHUQ� 0HHWLQJ� 3LSLQJ&RPSHWLWLRQ���&RPSDQLHV�WRXULQJ�D�UDQJH�RI�+LJKODQGV�DQG�,VODQGV�YHQXHV�WKDW�DUH�LQ�UHFHLSWRI�JUDQW�RU�GHILFLW�IXQGLQJ�ZLOO�DYHUDJH�DSSUR[LPDWHO\�ILYH��ZKHUHDV�XQVXEVLGLVHG�JURXSV�ZLOOWHQG�WR�EH�VPDOOHU�LQ�VL]H���)RU�WKH�SXUSRVHV�RI�WKLV�VWXG\�ZH�KDYH�DVVXPHG�DQ�DYHUDJH�JURXSVL]H�RI�����ZKHUH�D�JURXS�VSHQGV�WKH�QLJKW�LQ�WKH�ORFDOLW\�RI�WKHLU�SHUIRUPDQFH��RU�HQ�URXWH�WRWKHLU�QH[W�YHQXH�ZKHUH�WKH\�DUH�WRXULQJ�WKH�+LJKODQGV�DQG�,VODQGV��7RXULQJ�JURXSV�ZLOO� WHQG� WR� VWD\� LQ�EXGJHW� DFFRPPRGDWLRQ��ZKLOH�PDQ\� UHFHLYH� KRVSLWDOLW\IURP� ORFDO� SURPRWHUV� �LQ� WKH� IRUP� RI� PHDOV�GULQNV�� DQG�� LQ� VRPH� FDVHV�� RYHUQLJKWDFFRPPRGDWLRQ��� � :H� KDYH�� WKHUHIRUH�� DVVXPHG� WKDW� WKHLU� DYHUDJH� RYHUQLJKW� VSHQG� LQ� WKH+LJKODQGV�DQG�,VODQGV�ZLOO�EH�DSSUR[LPDWHO\�WZR�WKLUGV�WKDW�RI�WKH�DYHUDJH�WRXULVW���LH������SHUQLJKW���$OORZLQJ�IRU�LQIODWLRQ��WKLV�LV�FRPSDUDEOH�WR�WKH�DYHUDJH�RI�����DVVXPHG�IRU�WKH�����,PSDFW�6WXG\���2XU�HVWLPDWH�RI�RYHUQLJKW�VWD\V�RYHU�WKH�\HDU�2FWREHU������WR�6HSWHPEHU�����LQ�WKH�+LJKODQGV�DQG�,VODQGV�DV�D�ZKROH��EDVHG�RQ�RXU�HYHQWV�DQDO\VLV�LQ�6HFWLRQ����EHORZ�LV����� SHUVRQ�QLJKWV���$W�DQ�DYHUDJH�VSHQG�RI�����SHU�QLJKW��WKLV�ZRXOG�JLYH�WRWDO�H[SHQGLWXUHRI�����������$�EUHDNGRZQ�RI�WKLV�HPSOR\PHQW�EHQHILW�E\�/(&�DUHD�LV�JLYHQ�LQ�7DEOHV��������������6RPH�RI�WKH�DERYH�WRXULQJ�JURXSV�ZLOO�EH�+LJKODQGV�DQG�,VODQGV�UHVLGHQWV���7KHLU�H[SHQGLWXUHDZD\� IURP� KRPH� LV� VWLOO� UHJDUGHG� DV� ³QRQ�GLVSODFHG´�� KRZHYHU�� DV� LW� LV� DVVXPHG� WKDW� WKH\ZRXOG�RWKHUZLVH�EH�WRXULQJ�RXWZLWK�WKH�+LJKODQGV�DQG�,VODQGV�� � ,Q����������x��+,(�IXQGHG��� LQFRPLQJ� FRPSDQLHV� ZKR� WRXUHG� ��� YHQXHV�� DQG� �� +LJKODQGV� DQG� ,VODQGV�EDVHGFRPSDQLHV��ZKR�WRXUHG�����YHQXHV�2YHUDOO�,PSDFW�IURP�9LVLWLQJ�3HUIRUPHUV$GGLQJ�WKH�H[SHQGLWXUH�LPSDFWV�ZKLOH�LQ�WKH�+LJKODQGV�DQG�,VODQGV�RI�YLVLWLQJ�SHUIRUPHUV�DW(GHQ�&RXUW�DQG�RWKHU�YHQXHV�JLYHV�DQ�DQQXDO�WRWDO�RI������������)ROORZLQJ�WKH�PHWKRGRORJ\JLYHQ�LQ�6HFWLRQ���IRU�FRQYHUWLQJ�YLVLWRU�VSHQGLQJ�LQWR�IXOO�WLPH�HTXLYDOHQW�MREV�VXSSRUWHG�LQWKH� +LJKODQGV� DQG� ,VODQGV�� WKLV� OHYHO� RI� H[SHQGLWXUH� E\� YLVLWLQJ� SHUIRUPHUV� ZLOO� JHQHUDWH� DWRWDO�RI�DSSUR[LPDWHO\����IWH¶V�

x 0D\�WR�$SULO

Page 35: Microsoft Word - Westbrook master _1_.doc

��

��� (&2120,&�,03$&76�%<�/2&$/�(17(535,6(�&203$1<�$5($��� &RYHUDJH�RI�WKH�$QDO\VLV2XU�DVVHVVPHQW�RI� ORFDO�HFRQRPLF� LPSDFWV� IURP�WKH�DUWV� LV�SUHVHQWHG�EHORZ�LQ� WKUHH�VHWV�RIWDEOHV�

�L� $Q�DQDO\VLV�RI�HYHQWV�DQG�H[KLELWLRQV�KHOG�LQ�HDFK�RI� WKH����/(&�DUHDV�EHWZHHQ�2FWREHU�����DQG�6HSWHPEHU�������LL� $Q�DQDO\VLV�RI�HPSOR\PHQW��D��GLUHFW�DQG��E��LQGLUHFW�DQG�LQGXFHG�W KDW�FRYHUV�

� DUWV�YHQXHV�DQG�JDOOHULHV��LQFOXGLQJ�DQFLOODU\�IDFLOLWLHV�� LQGLYLGXDO�DUWLVWV��H[FOXGLQJ�JDOOHU\�RZQHUV�� VFKRRO�DQG�FROOHJH�WHDFKHUV��SULYDWH�WXWRUV� UHFRUGLQJ�� YLGHR�� SXEOLVKLQJ�� � LQVWUXPHQW�PDNLQJ� DQG� UHWDLOLQJ�� HWF� �H[FOXGLQJ�PXVLFVKRSV�DQG�ERRN�VKRSV�� SXEOLF�DJHQF\�DUWV�RIILFHUV��SURMHFW�RIILFHUV��DUWLVWV�LQ�UHVLGHQFH��HWF� DUWV�KROLGD\V��PLVFHOODQHRXV�HPSOR\PHQW� WRXULVW�UHODWHG� MREV�JHQHUDWHG�RXWZLWK� WKH� DUWV�YHQXHV� WKURXJK� WKH�YLVLWV�RI� WRXULVWV� WRHYHQWV�DQG�H[KLELWLRQV��DV�HVWLPDWHG�XQGHU��L��DERYH�

�LLL� $Q� HVWLPDWH� RI� WKH� HFRQRPLF� LPSDFW� IURP� H[SHQGLWXUHV� LQ� WKH� +LJKODQGV� DQG� ,VODQGVHFRQRP\�E\�YROXQWDU\�DUWLVWLF�RUJDQLVDWLRQV�DQG�DPDWHXU�DUWLVWV�$OWKRXJK�YROXQWDU\� DUWLVWLF� RUJDQLVDWLRQV� DQG� YHQXHV� DQG� DPDWHXU� DUWLVWV� GR� QRW� VXSSRUW� RUUHSUHVHQW� GLUHFW� MREV� �RWKHU� WKDQ� RFFDVLRQDO� SDUW�WLPH�ZRUN�� HJ�� IRU� D� FDUHWDNHU��� WKH\� PD\PDNH� SXUFKDVHV� LQ� WKH� ORFDO� HFRQRP\� ZKLFK� ZLOO� FUHDWH� LQGLUHFW� DQG� LQGXFHG� MREV�� � 7KLVH[SHQGLWXUH� ZLOO� GHULYH� IURP� HQWU\� IHHV�� JUDQW� DQG� SURMHFW� VXSSRUW� IURP� WKH� SXEOLF� VHFWRU�PHPEHUVKLS�IHHV�DQG�FRPPHUFLDO�VSRQVRUVKLS���� (YHQWV�DQG�([KLELWLRQV�$QDO\VLV7DEOHV��������WR��������EHORZ�GLVDJJUHJDWH�HYHQWV�DQG�H[KLELWLRQV�E\�FDWHJRU\�IRU�HDFK�RI�WKH���/(&�DUHDV� LQ� WXUQ�� �7KH� WDEOHV�DUH�GLUHFWO\�FRPSDUDEOH�ZLWK� WKRVH�SURGXFHG� LQ� WKH�����,PSDFW� 6WXG\� �VHH� 6HFWLRQ� �� RI� WKLV� UHSRUW��� DOWKRXJK� WKHUH� LV� DQ� DGGLWLRQDO� FDWHJRU\� IRUFLQHPD�([KLELWLRQV� H[FOXGH� FUDIWV�� H[FHSW�ZKHUH� FUDIW� LWHPV�DUH�GLVSOD\HG�ZLWK�SDLQWLQJV� DQG� RWKHUYLVXDO�DUW��RU�ZKHUH�WKHUH�LV�D�KLJK�DUWLVWLF�FRQWHQW�LQ�D�WKHPHG�H[KLELWLRQ�RI�FUDIW�LWHPV�7KH� FDWHJRU\� ³SRHWU\�UHDGLQJV´� LQFOXGHV� OHFWXUHV� DQG� RWKHU� SUHVHQWDWLRQV�ZKHUH� WKH� VXEMHFWPDWWHU� LV� DUWLVWLF�� � )HVWLYDOV� WKDW� IHDWXUH� D� VLQJOH� DUWIRUP�� HJ�� MD]]�� DUH� LQFOXGHG� XQGHU� WKHDSSURSULDWH�DUWIRUP�KHDGLQJ��DQG��ZKHUH�WKLV�KDV�EHHQ�SRVVLEOH�IURP�WKH�LQIRUPDWLRQ�ZH�KDYHEHHQ�DEOH�WR�JDWKHU��LQGLYLGXDO�HYHQWV�LQ�PL[HG�IHVWLYDOV��HJ��6W�0DJQXV�LQ�2UNQH\��KDYH�EHHQDOORFDWHG�EHWZHHQ�DUWIRUPV���:KHUH�WKLV�KDV�QRW�EHHQ�IHDVLEOH��ZH�KDYH�XVHG�WKH�³RWKHU�HYHQWV

Page 36: Microsoft Word - Westbrook master _1_.doc

��

DQG� IHVWLYDOV´� FDWHJRU\�� � )HLVHDQ� DQG�0RG� HYHQWV� WKDW� DWWUDFW� DXGLHQFHV� DUH� LQFOXGHG� XQGHU³7UDGLWLRQDO�0XVLF´���)HVWLYDOV�DUH�HVSHFLDOO\�YDOXDEOH�IRU�HFRQRPLF�LPSDFW�DV�WKH\�DUH�PRUHOLNHO\�WKDQ�LQGLYLGXDO�HYHQWV��H[KLELWLRQV�DQG�DUWV�IDFLOLWLHV�WR�DWWUDFW�DGGLWLRQDO�SHRSOH�WR�WKH+LJKODQGV�DQG�,VODQGV��DV�IHVWLYDO�YLVLWRUV���W\SLFDOO\�JHQHUDWLQJ�RYHUQLJKW�VWD\V���HVSHFLDOO\�LQWKH� DUHDV� GLVWDQW� IURP� 6FRWODQG¶V�PDLQ� SRSXODWLRQ� FHQWUHV�� ZKHUH� UHWXUQLQJ� KRPH� DIWHU� WKHHYHQW�LV�QRW�IHDVLEOH�%R[�RIILFH�HQWU\�IHHV�DUH�JLYHQ�QHW�RI�9$7�ZKHUH�DSSOLFDEOH�([KLELWLRQV�UHODWH�WR�WRWDO�H[KLELWLRQ�GD\V�UDWKHU�WKDQ�WR�QXPEHU�RI�H[KLELWLRQV���,Q�WKH�FDVH�RIFRPPHUFLDO�JDOOHULHV��RQO\�VSHFLDO�H[KLELWLRQV�DUH�LQFOXGHG���3HUPDQHQW�H[KLELWLRQV�RI�DUW��HJ�LQ�PXVHXPV��DUH�DOVR�H[FOXGHG�8QGHU� WKH� FDWHJRU\� RI� FLQHPD�� WKH� WRWDO� QXPEHU� RI� ILOP� VKRZLQJV� LV� JLYHQ�� LQFOXGLQJ� WKHPRELOH�FLQHPD��³7KH�6FUHHQ�0DFKLQH´���2QO\�IDFLOLWLHV�WKDW�KDYH�UHFHLYHG�SXEOLF�DVVLVWDQFH�RUUHTXLUH�RSHUDWLRQDO�VXEVLG\�DUH� LQFOXGHG��� LH��FRPPHUFLDO�SURYLVLRQ� LV�H[FOXGHG�� � ,QFOXGLQJ�IRU�H[DPSOH��WKH�:DUQHU�9LOODJH�LQ�,QYHUQHVV�ZRXOG�KLJKO\�VNHZ�DOO�RI�WKH�ILJXUHV�$V�LQ�WKH������VWXG\��(GHQ�&RXUW�LV�VKRZQ�VHSDUDWHO\�LQ�WKH�,QYHUQHVV�DQG�1DLUQ�DQDO\VLV�DVDFWLYLW\�XQGHU�FHUWDLQ�DUWIRUPV�WKHUH�ZRXOG�GZDUI�DOO�RWKHU�DFWLYLW\�LQ�WKH�DUHD�:KHUH�ILJXUHV�IRU�DXGLHQFHV�YLVLWRUV�DQG�IRU�ER[�RIILFH�HQWU\�IHHV�DUH�URXQGHG��WKLV�LQGLFDWHVWKDW�D�GHJUHH�RI�HVWLPDWLRQ�ZDV�UHTXLUHG���8QURXQGHG�ILJXUHV�UHIOHFW�SUHFLVH�ILJXUHV�WKDW�ZHUHSURYLGHG�E\�FHUWDLQ�IDFLOLWLHV�DQG�RUJDQLVDWLRQV�,W� VKRXOG� EH� QRWHG� WKDW� LW� ZDV� QRW� SRVVLEOH� ZLWKLQ� WKH� VFDOH� RI� VXUYH\�ZRUN� XQGHUWDNHQ� WRLGHQWLI\�LQ�DOO�FDVHV�ZKHWKHU�RU�QRW�FHUWDLQ�W\SHV�RI�HYHQW�RU�H[KLELWLRQ�KDG�HQWU\�FKDUJHV���,QSDUWLFXODU��WUDGLWLRQDO�DQG�RWKHU�PXVLF�HYHQWV�LQ�KRWHOV��SXEV��FOXEV��HWF�RIWHQ�GR�QRW�KDYH�DQHQWU\�FKDUJH��DV�WKH�SURSULHWRU�H[SHFWV�WR�PDNH�DQ�HTXLYDOHQW�VXUSOXV�WKURXJK�EDU�VDOHV�ZLWKIUHH�HQWU\���)RU�RXU�SXUSRVHV��WKLV�DGGLWLRQDO�EDU�VXUSOXV�KDV�EHHQ�FRQVLGHUHG�DV�HTXLYDOHQW�WRD�PRGHVW�HQWU\�FKDUJH� 7DEOH������$UWLVWLF�(YHQWV�DQG�([KLELWLRQV�LQ�6KHWODQG��2FW������6HSW�����$UW�)RUP 1R��RI�(YHQWV�3HUIRUPDQFHV 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV����&ODVVLFDO�0XVLF �� ����� ��� �����7UDGLWLRQDO�0XVLF ��� ������ ����� ������2WKHU�0XVLF ��� ������ ��� ������'DQFH �� ��� ��� �����'UDPD���3URIHVVLRQDO � ��� ��� �������$PDWHXU �� ����� ��� �����&KLOGUHQV�(YHQWV �� ����� ��� �����3RHWU\�5HDGLQJV � �� �� ���&LQHPD0L[HG�(YHQWV�)HVWLYDOV([KLELWLRQV��GD\V� ����� ������ ������ ������7RWDO��,QFO��([KLELWLRQV� ������� ������ �������7RWDO��([FO��([KLELWLRQV� ��� ������ ����� �������

Page 37: Microsoft Word - Westbrook master _1_.doc

��

)DFLOLWLHV� DQG� HYHQWV� WKDW� FUHDWHG� SDUWLFXODUO\� KLJK� LPSDFWV� LQ� 6KHWODQG� LQFOXGH�� � WKH� )RON)HVWLYDO�DQG�WKH�$FFRUGLRQ�DQG�)LGGOH�)HVWLYDO��SHUIRUPDQFHV�RI�WUDGLWLRQDO�DQG�RWKHU�PXVLF�PDLQO\�E\�ORFDO�PXVLFLDQV���%RQKRJD�*DOOHU\�DQG�LWV�WRXULQJ�H[KLELWLRQV�7DEOH������$UWLVWLF�(YHQWV�DQG�([KLELWLRQV�LQ�2UNQH\��2FW������6HSW�����

$UW�)RUP 1R��RI�(YHQWV�3HUIRUPDQFHV 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV����&ODVVLFDO�0XVLF �� ����� ����� ������7UDGLWLRQDO�0XVLF ��� ������ ����� ������2WKHU�0XVLF ��� ������ ����� ������'DQFH �� ����� �� �����'UDPD���3URIHVVLRQDO � ����� ��� �������$PDWHXU �� ����� ��� �����&KLOGUHQV�(YHQWV Q�D Q�D Q�D Q�D3RHWU\�5HDGLQJV �� ����� ��� �����&LQHPD ��� ������ ����� ������0L[HG�(YHQWV�)HVWLYDOV � ��� ��� �����([KLELWLRQV��GD\V� ����� ������� ������ ������7RWDO��,QFO��([KLELWLRQV� ������� ������� �������7RWDO��([FO��([KLELWLRQV� ��� ������ ������ �������)DFLOLWLHV�DQG�HYHQWV�WKDW�FUHDWHG�SDUWLFXODUO\�KLJK�LPSDFWV�LQ�2UNQH\�LQFOXGH���WKH�6W�0DJQXV)HVWLYDO�� WKH�)RON�)HVWLYDO��SHUIRUPDQFHV�RI� WUDGLWLRQDO�DQG�RWKHU�PXVLF�E\� ORFDO�PXVLFLDQV�WKH�ODUJH�QXPEHU�RI��PDLQO\�VPDOO��JDOOHULHV��WKH�1HZ�3KHRQL[�&LQHPD�ZLWKLQ�WKH�3LFNDTXR\&HQWUH� 7DEOH������$UWLVWLF�(YHQWV�DQG�([KLELWLRQV�LQ�WKH�:HVWHUQ�,VOHV��2FW������6HSW�����$UW�)RUP 1R��RI�(YHQWV�3HUIRUPDQFHV 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV����&ODVVLFDO�0XVLF � ��� �� �����7UDGLWLRQDO�0XVLF ��� ������ ����� ������2WKHU�0XVLF �� ����� ��� ������'DQFH �� ��� ��� �����'UDPD���3URIHVVLRQDO �� ����� ��� ��������$PDWHXU �� ������ ����� ������&KLOGUHQV�(YHQWV � ��� �� ���3RHWU\�5HDGLQJV � �� �� ���&LQHPD ��� ����� ����� ������0L[HG�(YHQWV�)HVWLYDOV([KLELWLRQV��GD\V� ����� ������ ������ �����7RWDO��,QFO��([KLELWLRQV� ������� ������ �������7RWDO��([FO��([KLELWLRQV� ��� ������ ������ �������)DFLOLWLHV�DQG�HYHQWV�WKDW�FUHDWHG�SDUWLFXODUO\�KLJK�LPSDFWV�LQ�WKH�:HVWHUQ�,VOHV�LQFOXGH���WKH+HEULGHDQ�&HOWLF�)HVWLYDO��FHLOLGKV�IRU�ORFDO�DXGLHQFHV�DQG�YLVLWRUV��WKH�$Q�/DQQWDLU�DQG�7DLJK&KHDUVDEKDJK�*DOOHULHV��&HRODV�6XPPHU�6FKRRO�

Page 38: Microsoft Word - Westbrook master _1_.doc

��

7DEOH������$UWLVWLF�(YHQWV�DQG�([KLELWLRQV�LQ�&DLWKQHVV�DQG�6XWKHUODQG��2FW������6HSW�����$UW�)RUP 1R��RI�(YHQWV�3HUIRUPDQFHV 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV����&ODVVLFDO�0XVLF �� ����� ����� ������7UDGLWLRQDO�0XVLF ��� ������ ����� �������2WKHU�0XVLF ��� ������ ����� �������'DQFH �� ����� ��� �����'UDPD���3URIHVVLRQDO �� ����� ��� ��������$PDWHXU �� ����� ����� ������&KLOGUHQV�(YHQWV � ��� �� �����3RHWU\�5HDGLQJV � ��� �� ���&LQHPD �� ����� ��� �����0L[HG�(YHQWV�)HVWLYDOV � ����� ��� �����([KLELWLRQV��GD\V� ����� ������ ������ ������7RWDO��,QFO��([KLELWLRQV� ������� ������ �������7RWDO��([FO��([KLELWLRQV� ��� ������ ������ �������)DFLOLWLHV� DQG� HYHQWV� WKDW� FUHDWHG� SDUWLFXODUO\� KLJK� LPSDFWV� LQ� &DLWKQHVV� DQG� 6XWKHUODQGLQFOXGH�� �1RUWKODQGV� )HVWLYDO�� SDQWRPLPHV� DQG� RWKHU� DPDWHXU� GUDPD� SHUIRUPDQFHV�� D�ZLGHUDQJH�RI�JDOOHULHV�

7DEOH������$UWLVWLF�(YHQWV�DQG�([KLELWLRQV�LQ�5RVV�DQG�&URPDUW\��2FW������6HSW�����$UW�)RUP 1R��RI�(YHQWV�3HUIRUPDQFHV 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV����&ODVVLFDO�0XVLF �� ����� ��� ������7UDGLWLRQDO�0XVLF ��� ������ ����� ������2WKHU�0XVLF ��� ������ ����� �������'DQFH � ��� �� �����'UDPD���3URIHVVLRQDO �� ����� ��� ��������$PDWHXU �� ����� ��� ������&KLOGUHQV�(YHQWV �� ��� �� �����3RHWU\�5HDGLQJV �� ����� ��� �����&LQHPD �� ����� ��� �����0L[HG�(YHQWV�)HVWLYDOV([KLELWLRQV��GD\V� ����� ������ ������ �����7RWDO��,QFO��([KLELWLRQV� ������� ������ �������7RWDO��([FO��([KLELWLRQV� ��� ������� ������ �������)DFLOLWLHV�DQG�HYHQWV�WKDW�FUHDWHG�SDUWLFXODUO\�KLJK�LPSDFWV�LQ�5RVV�DQG�&URPDUW\�LQFOXGH���WKH+LJKODQG� 7UDGLWLRQDO� 0XVLF� )HVWLYDO�� D� ZLGH� UDQJH� RI� VPDOO�PHGLXP� VFDOH� DUWV� YHQXHVWKURXJKRXW�WKH�DUHD��SHUIRUPDQFHV�RI�PXVLF�LQ�SXEV�DQG�KRWHOV�

Page 39: Microsoft Word - Westbrook master _1_.doc

��

7DEOH�������D�$UWLVWLF�(YHQWV�DQG�([KLELWLRQV�LQ�,QYHUQHVV�DQG�1DLUQ��2FW������6HSW������LQFOXGLQJ�(GHQ�&RXUW�7KHDWUH�$UW�)RUP 1R��RI�(YHQWV�3HUIRUPDQFHV 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV����&ODVVLFDO�0XVLF �� ������ ����� �������7UDGLWLRQDO�0XVLF ��� ������ ����� �������2WKHU�0XVLF ��� ������ ����� �������'DQFH �� ������ ����� ������'UDPD���3URIHVVLRQDO ��� ������ ������ ���������$PDWHXU �� ������ ����� ������&KLOGUHQV�(YHQWV �� ����� ����� ������3RHWU\�5HDGLQJV �� ����� ��� �����&LQHPD ��� ������ ����� ������0L[HG�(YHQWV�)HVWLYDOV �� ����� ��� �����([KLELWLRQV��GD\V� ����� ������ ������ �7RWDO��,QFO��([KLELWLRQV� ������� ������ ���������7RWDO��([FO��([KLELWLRQV� ����� ������� ������ ���������

7DEOH�������E�$UWLVWLF�(YHQWV�DQG�([KLELWLRQV�LQ�,QYHUQHVV�DQG�1DLUQ��2FW������6HSW������H[FOXGLQJ�(GHQ�&RXUW�7KHDWUH�$UW�)RUP 1R��RI�(YHQWV�3HUIRUPDQFHV 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV����&ODVVLFDO�0XVLF �� ����� ��� ������7UDGLWLRQDO�0XVLF ��� ������ ����� ������2WKHU�0XVLF ��� ������ ����� �������'DQFH �� ��� ��� �����'UDPD���3URIHVVLRQDO �� ����� ��� ��������$PDWHXU �� ����� ����� ������&KLOGUHQV�(YHQWV �� ��� �� �����3RHWU\�5HDGLQJV �� ��� �� �����&LQHPD0L[HG�(YHQWV�)HVWLYDOV �� ��� ��� �����([KLELWLRQV��GD\V� ����� ������ ������ �7RWDO��,QFO��([KLELWLRQV� ������� ������ �������7RWDO��([FO��([KLELWLRQV� ��� ������ ����� �������)DFLOLWLHV� DQG� HYHQWV� WKDW� FUHDWHG� SDUWLFXODUO\� KLJK� LPSDFWV� LQ� ,QYHUQHVV� DQG�1DLUQ� LQFOXGH�(GHQ� &RXUW� 7KHDWUH�� WKH� +LJKODQG� )HVWLYDO� �LQFOXGLQJ� (GHQ� &RXUW� HYHQWV� DQG� WKH� )HVWLYDO&OXE���%DOQDLQ�+RXVH��QRZ�FORVHG���1DLUQ�,QWHUQDWLRQDO�-D]]�)HVWLYDO��DUW�WP�

Page 40: Microsoft Word - Westbrook master _1_.doc

��

7DEOH������$UWLVWLF�(YHQWV�DQG�([KLELWLRQV�LQ�6N\H�DQG�/RFKDOVK��2FW������6HSW�����$UW�)RUP 1R��RI�(YHQWV�3HUIRUPDQFHV 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV����&ODVVLFDO�0XVLF �� ��� ��� �����7UDGLWLRQDO�0XVLF ��� ������ ������ �������2WKHU�0XVLF ��� ������ ����� ������'DQFH � ��� �� �����'UDPD���3URIHVVLRQDO �� ����� ����� ��������$PDWHXU ��� ������ ����� ������&KLOGUHQV�(YHQWV � ��� �� �����3RHWU\�5HDGLQJV �� ����� ��� ���&LQHPD ��� ������ ����� ������0L[HG�(YHQWV�)HVWLYDOV �� ����� ��� �����([KLELWLRQV��GD\V� ����� ������ ������ ������7RWDO��,QFO��([KLELWLRQV� ������� ������ �������7RWDO��([FO��([KLELWLRQV� ��� ������ ������ �������)DFLOLWLHV� DQG� HYHQWV� WKDW� FUHDWHG� SDUWLFXODUO\� KLJK� LPSDFWV� LQ� 6N\H� DQG� /RFKDOVK� LQFOXGH�$URV��$Q�7XLUHDQQ�*DOOHU\��+LJKODQG�)HVWLYDO�HYHQWV��WUDGLWLRQDO�PXVLF�HYHQWV��IRU�ORFDO�DQGWRXULVW�DXGLHQFHV���ORFDOO\�SURPRWHG�WRXULQJ�DUWV�

7DEOH������$UWLVWLF�(YHQWV�DQG�([KLELWLRQV�LQ�/RFKDEHU��2FW������6HSW�����$UW�)RUP 1R��RI�(YHQWV�3HUIRUPDQFHV 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV����&ODVVLFDO�0XVLF �� ��� �� �����7UDGLWLRQDO�0XVLF ��� ����� ����� ������2WKHU�0XVLF �� ����� ��� ������'DQFH � ��� �� ���'UDPD���3URIHVVLRQDO �� ����� ��� �������$PDWHXU �� ����� ��� ������&KLOGUHQV�(YHQWV � ��� �� ���3RHWU\�5HDGLQJV � ��� �� ���&LQHPD � ��� �� ���0L[HG�(YHQWV�)HVWLYDOV([KLELWLRQV��GD\V� ����� ������ ����� �����7RWDO��,QFO��([KLELWLRQV� ������ ������ ������7RWDO��([FO��([KLELWLRQV� ��� ������ ����� ������)DFLOLWLHV� DQG� HYHQWV� WKDW� FUHDWHG� SDUWLFXODUO\� KLJK� LPSDFWV� LQ� /RFKDEHU� LQFOXGH�SHUIRUPDQFHV�RI�WUDGLWLRQDO�DQG�RWKHU�PXVLF�DW�D�UDQJH�RI�YHQXHV��/RFKDEHU�0XVLF�)HVWLYDO�

Page 41: Microsoft Word - Westbrook master _1_.doc

��

7DEOH������$UWLVWLF�(YHQWV�DQG�([KLELWLRQV�LQ�0RUD\��%DGHQRFK�DQG�6WUDWKVSH\�2FW������6HSW�����$UW�)RUP 1R��RI�(YHQWV�3HUIRUPDQFHV 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV����&ODVVLFDO�0XVLF � ��� ��� �����7UDGLWLRQDO�0XVLF ��� ������ ����� ������2WKHU�0XVLF �� ����� ��� ������'DQFH � ��� �� ���'UDPD���3URIHVVLRQDO � ��� ��� �������$PDWHXU �� ����� ��� ������&KLOGUHQV�(YHQWV � ��� �� ���3RHWU\�5HDGLQJV �� ��� �� ���&LQHPD � �� � ���0L[HG�(YHQWV�)HVWLYDOV � ����� ����� ������([KLELWLRQV��GD\V� ����� ������ ������ �����7RWDO��,QFO��([KLELWLRQV� ������ ������ ������7RWDO��([FO��([KLELWLRQV� ��� ������ ����� ������)DFLOLWLHV�DQG�HYHQWV�WKDW�FUHDWHG�SDUWLFXODUO\�KLJK�LPSDFWV�LQ�0RUD\�%DGHQRFK�DQG�6WUDWKVSH\LQFOXGH�� � WKH� 8QLYHUVDO� +DOO� DQG� RWKHU� IDFLOLWLHV� DW� WKH� )LQGKRUQ� )RXQGDWLRQ�� VXPPHU� DQGZLQWHU� IHVWLYDOV� LQ�$YLHPRUH�� � ,Q�0RUD\�� WKHUH� LV� D� KLJK� FRQFHQWUDWLRQ� RI� HYHQWV� DQG� RWKHUDUWLVWLF�DFWLYLW\�LQ�(OJLQ��ZKLFK�LV�UHDGLO\�DFFHVVLEOH�WR�PRVW�SHRSOH�OLYLQJ�ZLWKLQ�ZHVW�0RUD\�

7DEOH�������$UWLVWLF�(YHQWV�DQG�([KLELWLRQV�LQ�$UJ\OO�DQG�WKH�,VODQGV��2FW������6HSW�����$UW�)RUP 1R��RI�(YHQWV�3HUIRUPDQFHV 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV����&ODVVLFDO�0XVLF �� ����� ����� ������7UDGLWLRQDO�0XVLF ��� ������ ������ �������2WKHU�0XVLF ��� ������ ������ �������'DQFH �� ��� ��� �����'UDPD���3URIHVVLRQDO �� ������ ����� ��������$PDWHXU ��� ������ ������ �������&KLOGUHQV�(YHQWV �� ����� ��� �����3RHWU\�5HDGLQJV �� ����� ��� �����&LQHPD ��� ����� ����� ������0L[HG�(YHQWV�)HVWLYDOV �� ����� ��� �����([KLELWLRQV��GD\V� ����� ������ ������ �����7RWDO��,QFO��([KLELWLRQV� ������� ������� ���������7RWDO��([FO��([KLELWLRQV� ����� ������� ������� ���������)DFLOLWLHV�DQG�HYHQWV�WKDW�FUHDWHG�SDUWLFXODUO\�KLJK�LPSDFWV�LQ�$UJ\OO�DQG�WKH�,VODQGV�LQFOXGH�D�YHU\�ZLGH�UDQJH�RI�IHVWLYDOV��PRVW�QRWDEO\�%XWH�-D]]�)HVWLYDO�IURP�D�ER[�RIILFH�SHUVSHFWLYH��WKH� ����� 1DWLRQDO� 0RG�� $Q� 7REDU�� $Q� 7DLUEHUW� $UWV� &HQWUH�� D� UDQJH� RI� ORFDO� YHQXHV� IRUYLVLWLQJ�DUWV��D�ODUJH�QXPEHU�RI�VPDOO�JDOOHULHV�

Page 42: Microsoft Word - Westbrook master _1_.doc

��

��� (PSOR\PHQW�,PSDFW7KH�WDEOHV�EHORZ�ZHUH�GUDZQ�XS�IRU�HDFK�/(&�DUHD�IURP�VXUYH\�HYLGHQFH�DQG�IURP�HVWLPDWHVGHULYHG� IURP� NQRZOHGJH� RI� WKH� VFDOH�W\SH� RI� IDFLOLWLHV� DQG� DFWLYLWLHV� ZKHUH� GDWD� ZHUH� QRWDYDLODEOH� ��GUDZLQJ�RQ�HYLGHQFH� IURP�FRPSDUDEOH� IDFLOLWLHV�HOVHZKHUH� LQ� WKH�+LJKODQGV� DQG,VODQGV�ZKHUH�FRQVLGHUHG�UHDVRQDEOH�,QGLYLGXDO� DUWLVWV� LQFOXGH� PHPEHUV� RI� EDQGV� DQG� RWKHU� SHUIRUPLQJ� JURXSV� RI� PXVLFLDQV�0HPEHUV� RI� FKRLUV�� DPDWHXU� RUFKHVWUDV�� SLSH� EDQGV�� HWF� DUH� H[FOXGHG�� DOWKRXJK� PDQ\LQGLYLGXDOV�LQYROYHG�LQ�VXFK�DFWLYLW\�ZLOO�KDYH�EHHQ�SLFNHG�XS�LQ�WKH�DQDO\VLV�DV�LQGLYLGXDOV�RUJURXS�SHUIRUPHUV��WXWRUV��HWF�)RU� DOO� /(&� DUHDV�� DQ� HPSOR\PHQW� PXOWLSOLHU� RI� ���� ZDV� DSSOLHG� WR� GLUHFW� IWH¶V� WR� GHULYHLQGLUHFW�SOXV�LQGXFHG�IWH¶V�IRU�DOO�FDWHJRULHV�RI�HPSOR\PHQW�VKRZQ�LQ�7DEOHV�������WR�������EHORZ�RWKHU�WKDQ�³WHDFKHUV�DQG�WXWRUV´�DQG�³DUWV�RIILFHUV´���7KHVH�SHRSOH�WHQG�WR�KDYH�KLJKHUDYHUDJH� HDUQLQJV� WKDQ� DUWLVWV�� SHRSOH� ZRUNLQJ� LQ� DUWV� YHQXHV�� DQG� SHRSOH� HPSOR\HG� LQ� WKHWRXULVP�LQGXVWU\��DQG�D�PXOWLSOLHU�RI�����ZDV�LQVWHDG�XVHG���7KHVH�PXOWLSOLHUV�DUH�ORZHU�WKDQWKRVH� WKDW� ZRXOG� EH� XVHG� WR� HVWLPDWH� +LJKODQGV� DQG� ,VODQGV� LPSDFWV� IRU� VHFWRUV� VXFK� DVFRQVWUXFWLRQ�� LQ� ZKLFK� DYHUDJH� ZDJHV� DQG� VDODULHV� DUH� UHODWLYHO\� KLJK�� DQG� ZKHUH� DQDSSURSULDWH�PXOWLSOLHU�ZRXOG�EH�QHDUHU�����x(DUQLQJV� LQ� 6KHWODQG� DUH� DERYH� WKH� +LJKODQGV� DQG� ,VODQGV� DUHD� DYHUDJH�� EXW� WKLV� HIIHFW� LVDVVXPHG� WR� EH� FDQFHOOHG� RXW� LQ� WKH� PXOWLSOLHU� WKURXJK� ³OHDNDJHV´� WR� $EHUGHHQ� �LH�� WKH6KHWODQG�HFRQRP\�LV�OHVV�LQWHJUDWHG�ZLWK�WKH�UHVW�RI�WKH�+LJKODQGV�DQG�,VODQGV�WKDQ�RWKHU�/(&DUHDV��� �6LPLODUO\�� WKHUH�ZLOO�EH� UHODWLYHO\�KLJK� OHDNDJHV� IURP�ZHVW�0RUD\� WR�(OJLQ��EXW� WKLVZLOO�KDYH�OLWWOH�HIIHFW�RQ�WKH�DQDO\VLV�DV�WKHUH�LV�OLWWOH�DUWV�DFWLYLW\�LQ�ZHVW�0RUD\���(GHQ�&RXUWHPSOR\PHQW�LV�LQFOXGHG�XQGHU�WKH�,QYHUQHVV�DQG�1DLUQ�DQDO\VLV�LQ�7DEOH�������,Q�RUGHU�WR�HVWLPDWH�WKH�³H[WHUQDOLWLHV´�JHQHUDWHG�E\�WRXULVW�YLVLWV�WR�HYHQWV�DQG�H[KLELWLRQV��LH�WKH�DGGLWLRQDO H[SHQGLWXUH�LQ�WKH�+LJKODQGV�DQG�,VODQGV�GXULQJ�WKH�SHULRG�RI� WRXULVWV¶�YLVLWVWKDW�FDQ�EH�DWWULEXWHG�WR�WKHVH�DWWHQGDQFHV���WKH�IROORZLQJ�DVVXPSWLRQV�ZHUH�PDGH��L� (DFK�IHVWLYDO�DWWHQGDQFH�ZDV�DVVXPHG�WR�JHQHUDWH�RQH�H[WUD�GD\¶V x H[SHQGLWXUH��LL� (DFK�DWWHQGDQFH�DW�RWKHU�HYHQWV�ZDV�DVVXPHG�WR�JHQHUDWH������H[WUD�GD\¶V�H[SHQGLWXUH��LLL�(DFK�DWWHQGDQFH�DW DQ�H[KLELWLRQ�ZDV�DVVXPHG�WR�JHQHUDWH�����H[WUD�GD\¶V�H[SHQGLWXUH�7KHVH�DVVXPSWLRQV�ZHUH�WKH�VDPH�DV�WKRVH�PDGH�LQ�WKH������,PSDFW�VWXG\��DQG�DUH�VXSSRUWHG�EURDGO\��E\�WKH�HYLGHQFH�IURP�VXUYH\V�RI�IHVWLYDOV�DQG�HYHQWV�YLVLWRUV�VLQFH������DQG�E\�WKHDVVXPSWLRQV�PDGH�E\�FRQVXOWDQWV�LQ�RWKHU�VWXGLHV��DIWHU�WDNLQJ�DFFRXQW�RI�GLVWLQFWLYH�IHDWXUHVRI�SDUWLFXODU�HYHQWV�DQG�IHVWLYDOV����7KH�DVVXPSWLRQV�DERYH�WDNH�DFFRXQW�RI�

x $V�QR�,QSXW�2XWSXW�WDEOH�KDV�HYHU�EHHQ�SURGXFHG�IRU�WKH�+LJKODQGV�DQG�,VODQGV�DV�D�ZKROH��WKHUH�LV�QREHQFKPDUN�PXOWLSOLHU�IRU�WKH�LQFUHDVHV�LQ�RXWSXW�RU�HPSOR\PHQW�IRU�WKH�HFRQRP\�DV�D�ZKROH��QRU�IRU�LQGLYLGXDOVHFWRUV�x 'HILQHG�DV�D����KRXU�SHULRG��OHVV�WKH�WLPH�VSHQW�DW�WKH�HYHQW�

Page 43: Microsoft Word - Westbrook master _1_.doc

��

x WKH�UHODWLYHO\�ORZ�WULS�JHQHUDWLRQ�HIIHFW�ZKHUH�D�YLVLWRU�PLJKW�RQO\�JR�WR�RQH�HYHQW�LQ�D�IRXUGD\�IHVWLYDO�x WKH�HYLGHQFH�WKDW�SHRSOH�ZKR�JR�WR�D�KLJK�SURSRUWLRQ�RI�WKH�HYHQWV�LQ�D�IHVWLYDO�ZLOO�QRUPDOO\KDYH� YLVLWHG� VSHFLILFDOO\� IRU� WKH� IHVWLYDO�� RIWHQ� DGGLQJ� GD\V� EHIRUH� RU� DIWHU� ZLWKLQ� WKH+LJKODQGV�DQG�,VODQGV�

9LVLWRU� VXUYH\V� FRQFXU� LQ� ILQGLQJ� WKDW� SHRSOH� DWWHQGLQJ� HYHQWV� DQG� IHVWLYDOV� WHQG� WR� VSHQGPRUH�WKDQ�WKH�DYHUDJH�WRXULVW�YLVLWRU�WR�WKH�+LJKODQGV�DQG�,VODQGV�SHU����KRXUV���'ULQNLQJ�DQGHDWLQJ� DUH� XVXDOO\� DVVRFLDWHG� ZLWK� D� IHVWLYDO� RU� HYHQW� YLVLW�� DQG� WKH� YLVLWRU� ZLOO� WHQG� WR� EH³FDSWLYH´�ZLWKLQ� WKH� ORFDO�FRPPXQLW\� UDWKHU� WKDQ� WRXULQJ�RU�ZDONLQJ� LQ� WKH�FRXQWU\VLGH�DQGVSHQGLQJ�OLWWOH�PRQH\��RWKHU�WKDQ�RQ�SHWURO��ZKLFK�JHQHUDWHV�IHZ�MREV��

Page 44: Microsoft Word - Westbrook master _1_.doc

��

7DEOH������$QQXDO�(PSOR\PHQW�,PSDFW�IURP�$UWV�$FWLYLW\�LQ�6KHWODQG'LUHFW�(PSOR\PHQW�IWH¶V� 7RWDO�(PSOR\PHQW�LQFO��LQGLUHFW�DQG�LQGXFHG�IWH¶V$UWV�YHQXHV�DQG�JDOOHULHV �� ����,QGLYLGXDO�DUWLVWV �� ��7HDFKHUV�DQG�WXWRUV �� ��5HFRUGLQJ��PXVLFDO�LQVWUXPHQWV��SXEOLVKLQJ��HWF � ����$UWV�RIILFHUV��HWF � �$UWV�KROLGD\V��PLVF� � �7RXULVW�UHODWHG��H[WHUQDOLWLHV� ���� ��7RWDOV ����� ���

7DEOH������$QQXDO�(PSOR\PHQW�,PSDFW�IURP�$UWV�$FWLYLW\�LQ�2UNQH\'LUHFW�(PSOR\PHQW�IWH¶V� 7RWDO�(PSOR\PHQW�LQFO��LQGLUHFW�DQG�LQGXFHG�IWH¶V$UWV�YHQXHV�DQG�JDOOHULHV �� ��,QGLYLGXDO�DUWLVWV �� ����7HDFKHUV�DQG�WXWRUV �� ��5HFRUGLQJ��PXVLFDO�LQVWUXPHQWV��SXEOLVKLQJ��HWF �� ��$UWV�RIILFHUV��HWF � �$UWV�KROLGD\V��PLVF� � ���7RXULVW�UHODWHG��H[WHUQDOLWLHV� ���� ����7RWDOV ����� �����

7DEOH������$QQXDO�(PSOR\PHQW�,PSDFW�IURP�$UWV�$FWLYLW\�LQ�WKH�:HVWHUQ�,VOHV'LUHFW�(PSOR\PHQW�IWH¶V� 7RWDO�(PSOR\PHQW�LQFO��LQGLUHFW�DQG�LQGXFHG�IWH¶V$UWV�YHQXHV�DQG�JDOOHULHV �� ����,QGLYLGXDO�DUWLVWV �� ��7HDFKHUV�DQG�WXWRUV �� ��5HFRUGLQJ��PXVLFDO�LQVWUXPHQWV��SXEOLVKLQJ��HWF � ���$UWV�RIILFHUV��HWF � ��$UWV�KROLGD\V��PLVF� � ���7RXULVW�UHODWHG��H[WHUQDOLWLHV� �� ��7RWDOV ��� �����

Page 45: Microsoft Word - Westbrook master _1_.doc

��

7DEOH������$QQXDO�(PSOR\PHQW�,PSDFW�IURP�$UWV�$FWLYLW\�LQ�&DLWKQHVV�DQG�6XWKHUODQG'LUHFW�(PSOR\PHQW�IWH¶V� 7RWDO�(PSOR\PHQW�LQFO��LQGLUHFW�DQG�LQGXFHG�IWH¶V$UWV�YHQXHV�DQG�JDOOHULHV �� ��,QGLYLGXDO�DUWLVWV �� ��7HDFKHUV�DQG�WXWRUV �� ��5HFRUGLQJ��PXVLFDO�LQVWUXPHQWV��SXEOLVKLQJ��HWF � �$UWV�RIILFHUV��HWF � �$UWV�KROLGD\V��PLVF� � �7RXULVW�UHODWHG��H[WHUQDOLWLHV� �� ��7RWDOV ��� ���

7DEOH������$QQXDO�(PSOR\PHQW�,PSDFW�IURP�$UWV�$FWLYLW\�LQ�5RVV�DQG�&URPDUW\'LUHFW�(PSOR\PHQW�IWH¶V� 7RWDO�(PSOR\PHQW�LQFO��LQGLUHFW�DQG�LQGXFHG�IWH¶V$UWV�YHQXHV�DQG�JDOOHULHV �� ��,QGLYLGXDO�DUWLVWV �� ���7HDFKHUV�DQG�WXWRUV �� ��5HFRUGLQJ��PXVLFDO�LQVWUXPHQWV��SXEOLVKLQJ��HWF � ���$UWV�RIILFHUV��HWF � ��$UWV�KROLGD\V��PLVF� � �7RXULVW�UHODWHG��H[WHUQDOLWLHV� �� ����7RWDOV ��� ���

7DEOH������$QQXDO�(PSOR\PHQW�,PSDFW�IURP�$UWV�$FWLYLW\�LQ�,QYHUQHVV�DQG�1DLUQ'LUHFW�(PSOR\PHQW�IWH¶V� 7RWDO�(PSOR\PHQW�LQFO��LQGLUHFW�DQG�LQGXFHG�IWH¶V$UWV�YHQXHV�DQG�JDOOHULHV �� ���,QGLYLGXDO�DUWLVWV �� ��7HDFKHUV�DQG�WXWRUV �� ��5HFRUGLQJ��PXVLFDO�LQVWUXPHQWV��SXEOLVKLQJ��HWF �� ��$UWV�RIILFHUV��HWF �� ��$UWV�KROLGD\V��PLVF� � ���7RXULVW�UHODWHG��H[WHUQDOLWLHV� ���� ����7RWDOV ����� ���

Page 46: Microsoft Word - Westbrook master _1_.doc

��

7DEOH������$QQXDO�(PSOR\PHQW�,PSDFW�IURP�$UWV�$FWLYLW\�LQ�6N\H�DQG�/RFKDOVK'LUHFW�(PSOR\PHQW�IWH¶V� 7RWDO�(PSOR\PHQW�LQFO��LQGLUHFW�DQG�LQGXFHG�IWH¶V$UWV�YHQXHV�DQG�JDOOHULHV �� ����,QGLYLGXDO�DUWLVWV �� ��7HDFKHUV�DQG�WXWRUV �� ��5HFRUGLQJ��PXVLFDO�LQVWUXPHQWV��SXEOLVKLQJ��HWF � ��$UWV�RIILFHUV��HWF � ���$UWV�KROLGD\V��PLVF� �� ��7RXULVW�UHODWHG��H[WHUQDOLWLHV� ���� ����7RWDOV ����� �����

7DEOH������$QQXDO�(PSOR\PHQW�,PSDFW�IURP�$UWV�$FWLYLW\�LQ�/RFKDEHU'LUHFW�(PSOR\PHQW�IWH¶V� 7RWDO�(PSOR\PHQW�LQFO��LQGLUHFW�DQG�LQGXFHG�IWH¶V$UWV�YHQXHV�DQG�JDOOHULHV �� ��,QGLYLGXDO�DUWLVWV �� ��7HDFKHUV�DQG�WXWRUV �� ��5HFRUGLQJ��PXVLFDO�LQVWUXPHQWV��SXEOLVKLQJ��HWF � �$UWV�RIILFHUV��HWF � �$UWV�KROLGD\V��PLVF� � �7RXULVW�UHODWHG��H[WHUQDOLWLHV� ��� �7RWDOV ���� ��

7DEOH������$QQXDO�(PSOR\PHQW�,PSDFW�IURP�$UWV�$FWLYLW\�LQ�0RUD\��%DGHQRFK�DQG�6WUDWKVSH\'LUHFW�(PSOR\PHQW�IWH¶V� 7RWDO�(PSOR\PHQW�LQFO��LQGLUHFW�DQG�LQGXFHG�IWH¶V$UWV�YHQXHV�DQG�JDOOHULHV �� ��,QGLYLGXDO�DUWLVWV �� ����7HDFKHUV�DQG�WXWRUV � ��5HFRUGLQJ��PXVLFDO�LQVWUXPHQWV��SXEOLVKLQJ��HWF � ���$UWV�RIILFHUV��HWF ��� ���$UWV�KROLGD\V��PLVF� � ���7RXULVW�UHODWHG��H[WHUQDOLWLHV� ��� ����7RWDOV �� �����

Page 47: Microsoft Word - Westbrook master _1_.doc

��

7DEOH�������$QQXDO�(PSOR\PHQW�,PSDFW�IURP�$UWV�$FWLYLW\�LQ�$UJ\OO�DQG�WKH�,VODQGV'LUHFW�(PSOR\PHQW�IWH¶V� 7RWDO�(PSOR\PHQW�LQFO��LQGLUHFW�DQG�LQGXFHG�IWH¶V$UWV�YHQXHV�DQG�JDOOHULHV �� ��,QGLYLGXDO�DUWLVWV �� ���7HDFKHUV�DQG�WXWRUV �� ���5HFRUGLQJ��PXVLFDO�LQVWUXPHQWV��SXEOLVKLQJ��HWF �� ��$UWV�RIILFHUV��HWF � �$UWV�KROLGD\V��PLVF� � ��7RXULVW�UHODWHG��H[WHUQDOLWLHV� ���� ����7RWDOV ����� �����

��� $JJUHJDWH�(PSOR\PHQW�,PSDFW�E\�/(&�$UHD)URP� WKH� DERYH� DQDO\VLV�� WKH� DQDO\VLV� RI� WKH� LPSDFW� RI� WKH� VSHQGLQJ� RI� YLVLWLQJ� SHUIRUPLQJJURXSV� SURYLGHG� LQ� 6HFWLRQ� ��� DQG� WKH� HVWLPDWHV� SURYLGHG� LQ� WKH� &UHDWLYH� &RQWHQW� VWXG\FRPSOHWHG� IRU� +,(� LQ� ����� E\� 6QHGGHQ� (FRQRPLFV�� ZH� KDYH� SURYLGHG� EHORZ� DJJUHJDWHHPSOR\PHQW�LPSDFWV�IURP�DUWV�DFWLYLWLHV�E\�/(&�DUHD�7DNLQJ� LQWR� DFFRXQW� WKH� WLPH� WDNHQ� XS� GXULQJ� D� ��� KRXU� SHULRG� LQ� DWWHQGLQJ� DQ� HYHQW� RUH[KLELWLRQ�� ZH� KDYH� DVVXPHG� WKDW� HYHQW� DQG� H[KLELWLRQ� WRXULVW� YLVLWRUV� ZLOO� HDFK� VSHQG� DQDYHUDJH�RI�����SHU�GD\�RWKHU�WKDQ�DW�WKH�HYHQW�RU�H[KLELWLRQ���(YHQW�YLVLWRUV�ZLOO�WHQG�WR�VSHQGPRUH� RYHUDOO� WKDQ� W\SLFDO� H[KLELWLRQ� YLVLWRUV�� EXW� D� KLJKHU� SURSRUWLRQ� RI� WKLV�ZLOO� EH� DW� WKHHYHQW�YHQXH���WKH�VSHQGLQJ�EHQHILWV�RI�ZKLFK�DUH�SLFNHG�XS�LQ�RXU�DQDO\VLV�RI� WKH�GLUHFW� MREILJXUHV�IRU�YHQXHV���([KLELWLRQ�YLVLWRUV�ZLOO�RIWHQ�VSHQG�OLWWOH�WLPH�RU�PRQH\�DW�WKH�H[KLELWLRQx�EXW�WKH�+LJKODQGV�DQG�,VODQGV�WRXULVW�ZKR�YLVLWV�JDOOHULHV�DQG�RWKHU�H[KLELWLRQV�PLJKW�W\SLFDOO\KDYH�D�KLJKHU�VSHQGLQJ�SURILOH�WKDQ�WKH�DYHUDJH�YLVLWRU�$������VWXG\�E\�(.26�IRU�+LJKODQGV�DQG� ,VODQGV�(QWHUSULVH�RQ� WKH�9ROXPH�DQG�9DOXH�RI7RXULVP� LQ� WKH� +267�0RUD\� DUHDV� GHULYHG� DQ� DYHUDJH� H[SHQGLWXUH� SHU� KHDG� E\� YLVLWRUVVWD\LQJ� RYHUQLJKW� RI� ������� LQ� ������ 7KXV�� WKH� DYHUDJH� ³H[WHUQDOLW\´� RI� ���� WKDW�ZH� KDYHDVVXPHG�IRU�HYHQW�DQG�H[KLELWLRQ�YLVLWRUV�LV�UHODWLYHO\�FRQVHUYDWLYH�,Q� RUGHU� WR� FRQYHUW� WKLV� ³H[WHUQDO´� H[SHQGLWXUH� LQWR� IWH� MREV� DW� WKH� +LJKODQGV� DQG� ,VODQGV(QWHUSULVH�DUHD�OHYHO��ZH�XVHG�UDWLRV�IRU�HDFK�/(&�DUHD�GHULYHG�E\�(.26�LQ�WKHLU������VWXG\�XSGDWHG�IRU�LQIODWLRQ�VLQFH��������7KH�(.26�PXOWLSOLHUV�ZHUH�GUDZQ�IURP�WKH������6FRWWLVK7RXULVP�0XOWLSOLHUV�6WXG\�� EXW�ZHUH�GLVFRXQWHG� E\� ���� ����� IRU�/RFKDEHU�� EHFDXVH� WKHLUDUHD� RI� DQDO\VLV� ZDV� WKH� +267�0RUD\� DUHD�� � 5HPRYLQJ� WKLV� GLVFRXQWLQJ� DQG� DOORZLQJ� IRULQIODWLRQ�EHWZHHQ������DQG�WKH�2FWREHU������WR�6HSWHPEHU������SHULRG�JLYHV�WKH�IROORZLQJDSSUR[LPDWH�FRQYHUVLRQ�UDWLRV�EHWZHHQ�YLVLWRU�VSHQG�DQG�IWH�MREV�DW�WKH�+,(�DUHD�OHYHO��IXOO\DGMXVWHG�IRU�WKH�PXOWLSOLHU��LH��LQFOXGLQJ�LQGLUHFW�DQG�LQGXFHG�MREV��

x XQOHVV�WKH\�EX\�D�SDLQWLQJ�RU�RWKHU�ZRUN�RI�DUW�

Page 48: Microsoft Word - Westbrook master _1_.doc

��

9LVLWRU�([SHQGLWXUHSHU�IWH����6KHWODQG ������2UNQH\ ������:HVWHUQ�,VOHV ������&DLWKQHVV�DQG�6XWKHUODQG ������5RVV�DQG�&URPDUW\ ������,QYHUQHVV�DQG�1DLUQ ������/RFKDEHU ������6N\H�DQG�/RFKDOVK ������0RUD\��%DGHQRFK�DQG�6WUDWKVSH\ ������$UJ\OO�DQG�WKH�,VODQGV ������%HFDXVH�IWH�MREV�IURP�YLVLWRU�VSHQGLQJ�RXWZLWK�WKH�HYHQW�RU�H[KLELWLRQ�YHQXH�LQFOXGH�LQGLUHFWDQG� LQGXFHG�HIIHFWV�� WKH�GLUHFW� MREV�VKRZQ� LQ� WKH� WDEOHV�EHORZ�IURP�WKLV�FDWHJRU\�RI� LPSDFWKDYH�EHHQ�HVWLPDWHG�EDFNZDUGV�XVLQJ�DQ�HPSOR\PHQW�PXOWLSOLHU�RI�����$V�LQ�WKH������,PSDFW�VWXG\��QHW�HPSOR\PHQW�EHQHILWV�RXWZLWK�WKH�HYHQW�RU�H[KLELWLRQ�YHQXHKDYH�EHHQ�DWWULEXWHG�WR�YLVLWV�E\�+LJKODQGV�DQG�,VODQGV�UHVLGHQWV��XQOHVV�WKH\�VWD\�RYHUQLJKW�LQ�ZKLFK�FDVH�WKH\�DUH�UHJDUGHG�DV�WRXULVWV����0DQ\�ZLOO�PDNH�SXUFKDVHV�RI�JRRGV�DQG�VHUYLFHVGXULQJ�WKHLU�WULS��EXW�WKLV�H[SHQGLWXUH�ZLOO�EH�GLVSODFHG�IURP�RWKHU�GLVFUHWLRQDU\�VSHQGLQJ���DKLJK�SURSRUWLRQ�RI�ZKLFK�ZRXOG�KDYH�RWKHUZLVH�EHHQ�VSHQW�LQ�WKH�+LJKODQGV�DQG�,VODQGV��QRWQHFHVVDULO\�RQ�WKH�VDPH�GD\����7KHUH�ZRXOG�EH�VRPH�QRQ�GLVSODFHG�VSHQGLQJ�IURP�WKLV�ORFDOVSHQGLQJ� DVVRFLDWHG� ZLWK� WKH� YLVLWV� E\� UHVLGHQWV� WR� DUWV� HYHQWV� DQG� H[KLELWLRQV�� EXW� WKLV� LVDVVXPHG�HTXDO� WR� WKH�GLVSODFHPHQW�HOHPHQW�RI� WKHLU�VSHQGLQJ�ZLWKLQ� WKH�HYHQW�RU�H[KLELWLRQYHQXH�&DWHJRU\��L�� LQ�HDFK�RI� WKH� WHQ� WDEOHV�EHORZ�LV�DQ�DJJUHJDWLRQ�RI� WKH� ILUVW���FDWHJRULHV� IURP7DEOHV� �������������� ZKLOH� &DWHJRU\� �LL�� UHODWHV� WR� WKH� ODVW� FDWHJRU\� LQ� 7DEOHV� �������������&DWHJRU\��LLL��LV�WDNHQ�IURP�WKH�DQDO\VLV�LQ�6HFWLRQ����DQG�&DWHJRU\��LY��KDV�EHHQ�HVWLPDWHG�RQWKH�EDVLV�RI�VSHQG�LQ�WKH�+LJKODQGV�DQG�,VODQGV�E\�YROXQWDU\�YHQXHV�JHQHUDOO\�UDQJLQJ�IURP����� WR��������S�D�� � ,W� LV� DVVXPHG� WKDW�RQH�GLUHFW� IWH� MRE�ZLOO�EH�FUHDWHG� IRU�HYHU\��������VSHQW�E\�YROXQWDU\�YHQXHV��DQG�WKDW�WKH�PXOWLSOLHU�IRU�LQGLUHFW�DQG�HQKDQFHG�MREV�ZLOO�EH�����LQDOO� /(&� DUHDV�� � (GHQ� &RXUW� 7KHDWUH� DQG� WKH� VSHQGLQJ� RI� SHUIRUPHUV� VWD\LQJ� RYHUQLJKW� LVLQFOXGHG�LQ�WKH�DQDO\VLV�IRU�,QYHUQHVV�DQG�1DLUQ�7KH� GLUHFW� HPSOR\PHQW� ILJXUHV� IRU� WKH� FUHDWLYH� FRQWHQW� LQGXVWU\� DUH� WDNHQ� IURP� D� UHSRUWSURGXFHG�IRU�+,(�E\�HFRQRPLVW�(ZDQ�6QHGGHQ�LQ������� �%URDGO\�� WKH�VHFWRU� LQFOXGHV��ILOP�79��YLGHR�'9'��PXOWL�PHGLD�JDPHV�DQLPDWLRQ��35�DQG�DGYHUWLVLQJ�� �$UWLVWLF�ZRUN� LQ� WKHVHVHFWRUV�LV�LQFOXGHG�LQ�WKH�WDEOHV�EHORZ�

7DEOH������$JJUHJDWH�(PSOR\PHQW�,PSDFW�LQ�6KHWODQG'LUHFW�IWH¶V )WH¶V�LQFOXVLYH�RI�WKHPXOWLSOLHU�L��$UWLVWV��HYHQWV��RIILFLDOV��HWF ��� ����LL��9ROXQWDU\�YHQXH�LPSDFWV � ��LLL��([WHUQDOLWLHV�IURP�WRXULVW�YLVLWV ���� ���LY��([WHUQDOLWLHV�IURP�YLVLWLQJ�SHUIRUPHUV � ����Y��&UHDWLYH�FRQWHQW�LQGXVWU\ � ��7RWDOV ����� �����

Page 49: Microsoft Word - Westbrook master _1_.doc

��

7DEOH������$JJUHJDWH�(PSOR\PHQW�,PSDFW�LQ�2UNQH\'LUHFW�IWH¶V )WH¶V�LQFOXVLYH�RI�WKHPXOWLSOLHU�L��$UWLVWV��HYHQWV��RIILFLDOV��HWF ��� ����LL��9ROXQWDU\�YHQXH�LPSDFWV � ��LLL��([WHUQDOLWLHV�IURP�WRXULVW�YLVLWV ���� �����LY��([WHUQDOLWLHV�IURP�YLVLWLQJ�SHUIRUPHUV � ��Y��&UHDWLYH�FRQWHQW�LQGXVWU\ � �7RWDOV ����� �����

7DEOH������$JJUHJDWH�(PSOR\PHQW�,PSDFW�LQ�WKH�:HVWHUQ�,VOHV'LUHFW�IWH¶V )WH¶V�LQFOXVLYH�RI�WKHPXOWLSOLHU�L��$UWLVWV��HYHQWV��RIILFLDOV��HWF ��� ������LL��9ROXQWDU\�YHQXH�LPSDFWV � ��LLL��([WHUQDOLWLHV�IURP�WRXULVW�YLVLWV �� ���LY��([WHUQDOLWLHV�IURP�YLVLWLQJ�SHUIRUPHUV � ����Y��&UHDWLYH�FRQWHQW�LQGXVWU\ �� ��7RWDOV ��� ���

7DEOH������$JJUHJDWH�(PSOR\PHQW�,PSDFW�LQ�&DLWKQHVV�DQG�6XWKHUODQG'LUHFW�IWH¶V )WH¶V�LQFOXVLYH�RI�WKHPXOWLSOLHU�L��$UWLVWV��HYHQWV��RIILFLDOV��HWF ��� ����LL��9ROXQWDU\�YHQXH�LPSDFWV � ��LLL��([WHUQDOLWLHV�IURP�WRXULVW�YLVLWV �� ���LY��([WHUQDOLWLHV�IURP�YLVLWLQJ�SHUIRUPHUV � ����Y��&UHDWLYH�FRQWHQW�LQGXVWU\ � ����7RWDOV ��� ���

7DEOH������$JJUHJDWH�(PSOR\PHQW�,PSDFW�LQ�5RVV�DQG�&URPDUW\'LUHFW�IWH¶V )WH¶V�LQFOXVLYH�RI�WKHPXOWLSOLHU�L��$UWLVWV��HYHQWV��RIILFLDOV��HWF ��� ������LL��9ROXQWDU\�YHQXH�LPSDFWV ��� ����LLL��([WHUQDOLWLHV�IURP�WRXULVW�YLVLWV �� �����LY��([WHUQDOLWLHV�IURP�YLVLWLQJ�SHUIRUPHUV ��� ����Y��&UHDWLYH�FRQWHQW�LQGXVWU\ �� ��7RWDOV ��� ���

Page 50: Microsoft Word - Westbrook master _1_.doc

��

7DEOH������$JJUHJDWH�(PSOR\PHQW�,PSDFW�LQ�,QYHUQHVV�DQG�1DLUQ'LUHFW�IWH¶V )WH¶V�LQFOXVLYH�RI�WKHPXOWLSOLHU�L��$UWLVWV��HYHQWV��RIILFLDOV��HWF ��� ������LL��9ROXQWDU\�YHQXH�LPSDFWV � ��LLL��([WHUQDOLWLHV�IURP�WRXULVW�YLVLWV ���� �����LY��([WHUQDOLWLHV�IURP�YLVLWLQJ�SHUIRUPHUV ���� ���Y��&UHDWLYH�FRQWHQW�LQGXVWU\ �� ��7RWDOV ����� ���

7DEOH������$JJUHJDWH�(PSOR\PHQW�,PSDFW�LQ�6N\H�DQG�/RFKDOVK'LUHFW�IWH¶V )WH¶V�LQFOXVLYH�RI�WKHPXOWLSOLHU�L��$UWLVWV��HYHQWV��RIILFLDOV��HWF ��� ����LL��9ROXQWDU\�YHQXH�LPSDFWV � ����LLL��([WHUQDOLWLHV�IURP�WRXULVW�YLVLWV ���� �����LY��([WHUQDOLWLHV�IURP�YLVLWLQJ�SHUIRUPHUV � ����Y��&UHDWLYH�FRQWHQW�LQGXVWU\ �� ��7RWDOV ����� �����

7DEOH������$JJUHJDWH�(PSOR\PHQW�,PSDFW�LQ�/RFKDEHU'LUHFW�IWH¶V )WH¶V�LQFOXVLYH�RI�WKHPXOWLSOLHU�L��$UWLVWV��HYHQWV��RIILFLDOV��HWF �� ���LL��9ROXQWDU\�YHQXH�LPSDFWV � ��LLL��([WHUQDOLWLHV�IURP�WRXULVW�YLVLWV ��� ��LY��([WHUQDOLWLHV�IURP�YLVLWLQJ�SHUIRUPHUV � ��Y��&UHDWLYH�FRQWHQW�LQGXVWU\ � �7RWDOV ���� ���

7DEOH������$JJUHJDWH�(PSOR\PHQW�,PSDFW�LQ�0RUD\��%DGHQRFK�DQG�6WUDWKVSH\'LUHFW�IWH¶V )WH¶V�LQFOXVLYH�RI�WKHPXOWLSOLHU�L��$UWLVWV��HYHQWV��RIILFLDOV��HWF ���� ���LL��9ROXQWDU\�YHQXH�LPSDFWV � ��LLL��([WHUQDOLWLHV�IURP�WRXULVW�YLVLWV ��� �����LY��([WHUQDOLWLHV�IURP�YLVLWLQJ�SHUIRUPHUV � ��Y��&UHDWLYH�FRQWHQW�LQGXVWU\ � �7RWDOV �� �����

Page 51: Microsoft Word - Westbrook master _1_.doc

��

7DEOH�������$JJUHJDWH�(PSOR\PHQW�,PSDFW�LQ�$UJ\OO�DQG�,VODQGV'LUHFW�IWH¶V )WH¶V�LQFOXVLYH�RI�WKHPXOWLSOLHU�L��$UWLVWV��HYHQWV��RIILFLDOV��HWF ��� ����LL��9ROXQWDU\�YHQXH�LPSDFWV � ����LLL��([WHUQDOLWLHV�IURP�WRXULVW�YLVLWV ���� �����LY��([WHUQDOLWLHV�IURP�YLVLWLQJ�SHUIRUPHUV � ��Y��&UHDWLYH�FRQWHQW�LQGXVWU\ �� ����7RWDOV ����� �����

��� /(&�$UHDV�$FKLHYLQJ�WKH�+LJKHVW�,PSDFWV7KH�/(&�DUHDV�WKDW�DFKLHYHG�WKH�KLJKHVW�LPSDFWV�IRU�ER[�RIILFH�LQFRPH�H[KLELWLRQ�HQWU\�IHHV�WRWDO�YLVLWV�WR�HYHQWV�H[KLELWLRQV��DQG�DUWV�UHODWHG�IWH�MREV�DUH�VKRZQ�EHORZ�

%R[�2IILFH�(QWU\�)HHV��SHU�KHDG6N\H�DQG�/RFKDOVK ������

,QYHUQHVV�DQG�1DLUQ ������$UJ\OO�DQG�WKH�,VODQGV ������$XGLHQFH�1XPEHUV�([KLELWLRQ�9LVLWRUV

1R��SHU�KHDG2UNQH\ ����6N\H�DQG�/RFKDOVK ����6KHWODQG ���7RWDO�1XPEHU�RI�IWH�-REV�6XSSRUWHG��DGMXVWHG�IRU�WKH�PXOWLSOLHU�

IWH¶V�SHUWKRXVDQG�SRS�6N\H�DQG�/RFKDOVK ����2UNQH\ ����6KHWODQG ����

Page 52: Microsoft Word - Westbrook master _1_.doc

��

��� 29(5$//�+,*+/$1'6�$1'�,6/$1'6�(&2120,&�,03$&767KH�HFRQRPLF�LPSDFWV�FDOFXODWHG�IRU�HDFK�/(&�DUHD�LQ�6HFWLRQ���DERYH�DUH�DJJUHJDWHG�EHORZWR�WKH�ZKROH�RI�WKH�+,(�DUHD���� (YHQWV�DQG�([KLELWLRQV7KH� (YHQWV� DQG� ([KLELWLRQV� DQDO\VLV�� 7DEOHV� ����D�� DQG� ����E��� LV� JLYHQ� LQFOXVLYH� DQGH[FOXVLYH�RI�(GHQ�&RXUW�UHVSHFWLYHO\��DQG�UHSUHVHQWV�DQ�DJJUHJDWLRQ�RI�7DEOHV�������WR�������IRU� WKH� LQGLYLGXDO� /(&� DUHDV�� � ,Q� WHUPV� RI� WRWDO� DXGLHQFH�YLVLWRU� QXPEHUV�� (GHQ� &RXUWDFFRXQWV�IRU�����RI�DOO�LGHQWLILHG�DFWLYLW\�LQ�WKH�+LJKODQGV�DQG�,VODQGV��DQG�LQ�WHUPV�RI�WRWDOER[�RIILFH�HQWU\�IHHV�LW�DFFRXQWV�IRU�����

7DEOH�����D�$UWLVWLF�(YHQWV�DQG�([KLELWLRQV�LQ�WKH�+LJKODQGV�DQG�,VODQGV��2FW������6HSW������LQFOXVLYH�RI�(GHQ�&RXUW�7KHDWUH�$UW�)RUP 1R��RI�(YHQWV�3HUIRUPDQFHV 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV&ODVVLFDO�0XVLF ��� ������ ����� �������7UDGLWLRQDO�0XVLF ����� ������� ������ �������2WKHU�0XVLF ����� ������� ������ ���������'DQFH ��� ������ ����� �������'UDPD���3URIHVVLRQDO ��� ������ ������ ���������$PDWHXU ��� ������� ������ �������&KLOGUHQV�(YHQWV ��� ������ ����� ������3RHWU\�5HDGLQJV ��� ����� ����� ������&LQHPD ����� ������ ����� �������0L[HG�(YHQWV�)HVWLYDOV �� ����� ����� ������([KLELWLRQV��GD\V� ������ ������� ������� �������7RWDO��,QFO��([KLELWLRQV� ��������� ������� ���������7RWDO��([FO��([KLELWLRQV� ����� ������� ������� ���������

7DEOH�����E�$UWLVWLF�(YHQWV�DQG�([KLELWLRQV�LQ�WKH�+LJKODQGV�DQG�,VODQGV��2FW������6HSW������H[FOXVLYH�RI�(GHQ�&RXUW�7KHDWUH�$UW�)RUP 1R��RI�(YHQWV�3HUIRUPDQFHV 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV&ODVVLFDO�0XVLF ��� ������ ����� �������7UDGLWLRQDO�0XVLF ����� ������� ������ �������2WKHU�0XVLF ����� ������� ������ �������'DQFH ��� ����� ��� ������'UDPD���3URIHVVLRQDO ��� ������ ������ ���������$PDWHXU ��� ������� ������ �������&KLOGUHQV�(YHQWV ��� ����� ��� ������3RHWU\�5HDGLQJV ��� ����� ����� ������&LQHPD ��� ������ ����� �������0L[HG�(YHQWV�)HVWLYDOV �� ����� ����� ������([KLELWLRQV��GD\V� ������ ������� ������� �������7RWDO��,QFO��([KLELWLRQV� ��������� ������� ���������7RWDO��([FO��([KLELWLRQV� ����� ������� ������� ���������

Page 53: Microsoft Word - Westbrook master _1_.doc

��

��� 2YHUDOO�(FRQRPLF�,PSDFWV7KH�HPSOR\PHQW�LPSDFWV�LQ�7DEOH�����EHORZ�DUH�LQFOXVLYH�RI�(GHQ�&RXUW�7KHDWUH��DQG�ZHUHFDOFXODWHG�E\�DJJUHJDWLQJ�7DEOHV�������WR��������IRU�WKH�LQGLYLGXDO�/(&�DUHDV�

7DEOH����$QQXDO�(PSOR\PHQW�,PSDFW�IURP�$UWV�$FWLYLW\�LQ�WKH�+LJKODQGV�DQG�,VODQGV'LUHFW�(PSOR\PHQW�IWH¶V� 7RWDO�(PSOR\PHQW�LQFO��LQGLUHFW�DQG�LQGXFHG�IWH¶V$UWV�YHQXHV�DQG�JDOOHULHV ��� �����,QGLYLGXDO�DUWLVWV ��� ���7HDFKHUV�DQG�WXWRUV ��� ���5HFRUGLQJ��PXVLFDO�LQVWUXPHQWV��SXEOLVKLQJ��HWF �� ���$UWV�RIILFHUV��HWF ���� ��$UWV�KROLGD\V��PLVF� �� ��7RXULVW�UHODWHG��H[WHUQDOLWLHV� ����� ���7RWDOV ����� �����

7KH� DJJUHJDWH� HPSOR\PHQW� LPSDFWV� LQ� 7DEOH� ���� EHORZ� DUH� DJDLQ� LQFOXVLYH� RI� (GHQ� &RXUW7KHDWUH��DQG�DUH�FDOFXODWHG�IURP�7DEOHV�������WR����������7KHVH�LPSDFWV�UHODWH�EURDGO\�WR�WKH\HDU�2FWREHU������WR�6HSWHPEHU������7DEOH����$JJUHJDWH�(PSOR\PHQW�,PSDFW�LQ�WKH�+LJKODQGV�DQG�,VODQGV

'LUHFW�IWH¶V )WH¶V�LQFOXVLYH�RI�WKH�PXOWLSOLHU�L� $UWLVWV��HYHQWV��RIILFLDOV��HWF ������� ��������LL� 9ROXQWDU\�YHQXH�LPSDFWV ��� ��LLL� ([WHUQDOLWLHV�IURP�WRXULVW�YLVLWV ����� ����LY� ([WHUQDOLWLHV�IURP�YLVLWLQJ�SHUIRUPHUV ���� �����Y� &UHDWLYH�FRQWHQW�LQGXVWU\ ��� ���7RWDOV ����� �����$V� GHILQHG� IRU� WKH� SXUSRVHV� RI� WKH� VWXG\�� WKH� DUWV� VXSSRUW� PRUH� WKDQ� ������ GLUHFW� IXOO�WLPHHTXLYDOHQW� MREV�� HTXDWLQJ� WR� DSSUR[LPDWHO\� ������ IXOO�WLPH� HTXLYDOHQW� �IWH�� MREV� �GLUHFW�LQGLUHFW�DQG�LQGXFHG��LQFOXGLQJ�PXOWLSOLHU�HIIHFWV�������RI�WKLV�WRWDO�LV�DWWULEXWDEOH�WR�YHQXHVDQG�JDOOHULHV������WR�ZRUN�E\�LQGLYLGXDO�DUWLVWV������WR�DUWV�UHODWHG�WHDFKHUV�DQG�WXWRUV�����WR� WKH� VSHQGLQJ� RI� WRXULVW� YLVLWRUV� WR� HYHQWV� DQG� H[KLELWLRQV� RWKHU� WKDQ� DW� WKH� YHQXH� EXWDWWULEXWDEOH�WR�WKH�YLVLW������WR�WKH�FUHDWLYH�FRQWHQW�LQGXVWU\��DQG�����WR�RWKHU�LPSDFWV�����RI� WKH�RYHUDOO�GLUHFW� HPSOR\PHQW� LPSDFW� UHSUHVHQWV�³H[WHUQDOLWLHV´� IURP�YLVLWRUV� WR� WKHDUHD��ULVLQJ�WR�DSSUR[LPDWHO\����������IWH¶V��LI�WKH�WRXULVP�FRPSRQHQW�RI�YLVLWV�WR�DUWV�HYHQWVDQG� JDOOHULHV� �DYHUDJLQJ� ���� RI� DOO� VXFK� YLVLWV�� DQG� DUWV� KROLGD\V� DUH� DGGHG�� DQG� LI� DQDOORZDQFH�RI�����LV�DGGHG�IRU�WKH�WRXULVP�FRPSRQHQW�RI�WKH�ZRUN�RI�LQGLYLGXDO�SHUIRUPLQJDQG�YLVXDO�DUWLVWV�&RPSDULVRQV�ZLWK������LPSDFWV��DV�IDU�DV�WKHVH�DUH�SRVVLEOH��DUH�SURYLGHG�LQ�6HFWLRQ ��EHORZ�

Page 54: Microsoft Word - Westbrook master _1_.doc

��

7KH�������IWH�MREV�DWWULEXWHG�WR�WKH�DUWV�LQ�WKH�+LJKODQGV�DQG�,VODQGV�DERYH�UHSUHVHQW������RIWKH�HVWLPDWHG���������IWH¶V�LQ�WKH�DUHD� 7KLV� FRPSDUHV�� IRU� H[DPSOH�� ZLWK� ������ IWH� MREV� JHQHUDWHG� E\� VDOPRQ� IDUPLQJ� LQ� WKH+LJKODQGV�DQG�,VODQGV�LQ�������DV�FDOFXODWHG�LQ�D�VWXG\�E\�3$&(&�IRU�+,(�DQG�7KH�6FRWWLVK2IILFH� �LQFOXVLYH� RI� VXSSOLHU� DQG� LQGXFHG� PXOWLSOLHU� HIIHFWV�� EXW� H[FOXVLYH� RI� GRZQVWUHDPSURFHVVLQJ����� 8QTXDQWLILHG�,PSDFWV$�IXUWKHU�FDWHJRU\�RI� LPSDFW� WKDW�ZH�KDYH�QRW�EHHQ�DEOH� WR�TXDQWLI\�LQ�RXU�VWXG\�LV� WKH�UROHWKDW�D�WKULYLQJ�DUWLVWLF�FRPPXQLW\��EH�LW�WKH�FLW\�RI�,QYHUQHVV�RU�D�VPDOO�LVODQG��KDV�LQ�DWWUDFWLQJSHRSOH�WR�PRYH�WR�WKH�+LJKODQGV�DQG�,VODQGV�WR�VWDUW�EXVLQHVVHV��WR�DXJPHQW�WKH�VNLOOHG�ODERXUVXSSO\��WR�KHOS�PDLQWDLQ�SRSXODWLRQ�OHYHOV�LQ�IUDJLOH�DUHDV��RU�WR�UHWLUH���,QGHHG�SHRSOH�LQ�HDFKRI� WKHVH� FDWHJRULHV�� LQFOXGLQJ� WKH� UHWLUHG�� RIWHQ� LQ� WXUQ� VWUHQJWKHQ� WKH� ORFDO� DUWV� FRPPXQLW\WKURXJK� SDUW�WLPH� DUWLVWLF� ZRUN�� SURYLGLQJ� YROXQWDU\� LQSXW� DQG�� SHUKDSV�� VWDUWLQJ� QHZLQLWLDWLYHV�RU�SURYLGLQJ�EXVLQHVV� H[SHUWLVH� WKDW� KHOSV� LQ�GHYLVLQJ� IXQGDEOH� DUWV� GHYHORSPHQWSURMHFWV�

FDOFXODWHG�IURP������GDWD�RQ�IXOO�DQG�SDUW�WLPH�HPSOR\PHQW��DQG������GDWD�RQ�WKH�VHOI�HPSOR\HG�

Page 55: Microsoft Word - Westbrook master _1_.doc

��

��� $1$/<6,6�2)�92/817$5<�$&7,9,7<�$1'�$0$7(85�3$57,&,3$7,21��� 6FRSH�DQG�0HWKRGRORJ\2XU� HVWLPDWHV� RI� YROXQWDU\� DFWLYLW\� E\� FDWHJRU\� RI� DUWV�UHODWHG� RUJDQLVDWLRQ� LQ� WKLV� 6HFWLRQGUDZ�RQ�

x 2XU�ILHOGZRUN�E\�/(&�DUHD��ZKLFK�LQFOXGHG�GLUHFW�FRQWDFW�ZLWK�D�VDPSOH�RI�UHSUHVHQWDWLYHV�RIDOO�RI�WKH�GLIIHUHQW�W\SHV�RI�RUJDQLVDWLRQ�x ,QIRUPDWLRQ� IURP� FRPSDUDEOH� /(&� DUHDV� ZKHUH� ZH� ZHUH� VKRUW� RI� LQIRUPDWLRQ� RQ� FHUWDLQFDWHJRULHV�LQ�SDUWLFXODU�/(&�DUHDV�x 6XPPDU\�LQIRUPDWLRQ�SURYLGHG�E\�'XQFDQ�0DF,QQHV�IURP�D�VXUYH\�RI�3$1�PHPEHUV�x $Q�LQWHULP�DVVHVVPHQW�RI�)HLVHDQ�QDQ�*DLGKHDO�E\�(.26�

,Q� RUGHU� WR� HVWLPDWH� DJJUHJDWH� YROXQWDU\� DFWLYLW\�� LW�ZDV� LPSRUWDQW� WR� GHYLVH� DV� DFFXUDWH� DVSRVVLEOH�D�EDVH�RI�DFWLYH�RUJDQLVDWLRQV�� �2XU�VWDUWLQJ�SRLQW�ZDV� WKH�+,�$UWV�GDWDEDVH�RI�DUWVRUJDQLVDWLRQV��ZKLFK�ZDV�VXSSOHPHQWHG�E\�OLVWV�UHFHLYHG�IURP�ORFDO�VRXUFHV�� LQFOXGLQJ�ORFDODXWKRULW\� DUWV� RIILFHUV�� � $V� RXU� ILHOGZRUN� SURFHHGHG�� RUJDQLVDWLRQV� QR� ORQJHU� DFWLYH� ZHUHGHOHWHG� IURP�RXU�GDWDEDVH��ZKLOH�RWKHUV� WKDW�FDPH� WR�RXU� DWWHQWLRQ�ZHUH� DGGHG�� � ,QHYLWDEO\�KRZHYHU��WKHUH�ZLOO�EH�PRUH�RUJDQLVDWLRQV�LQYROYHG�LQ�TXDOLI\LQJ�DUWV�DFWLYLWLHV�WKDQ�VKRZQ�LQ7DEOH� ���� RYHUOHDI�� DQG� WKHUHIRUH� PRUH� YROXQWDU\� DQG� DPDWHXU� DUWV� DFWLYLW\�� � $V� LQ� RWKHUDVSHFWV�RI�WKH�VWXG\��WKHUHIRUH��RXU�HVWLPDWHV�RI�LPSDFW�VKRXOG�EH�UHJDUGHG�DV�WKH�PLQLPXP�-XQLRU�PHPEHUV�DUH�LQFOXGHG�LQ�WKH�PHPEHUVKLS�GDWD�SURYLGHG�EHORZ�IRU�VRPH�RUJDQLVDWLRQV�EXW�WRWDOV�IRU�FHUWDLQ�RUJDQLVDWLRQV�WKDW�LQFOXGH�MXQLRU�PHPEHUV�FDQ�EH�PLVOHDGLQJ�ZKHUH�WKHUHPLJKW��IRU�H[DPSOH��EH������YHU\�DFWLYH�DGXOW�PHPEHUV��DQG����MXQLRU�PHPEHUV�ZKR�MRLQHGVLPSO\�WR�DWWHQG�RQH�RU�PRUH�RI�D�VKRUW�VHULHV�RI�ZRUNVKRSV���6FKRRO�JURXSV�ZHUH�H[FOXGHG�9ROXQWDU\� WLPH� LV� DOVR� FRQFHSWXDOO\� GLIILFXOW� WR� YDOXH�� �2XU�PDLQ� LQWHUHVW� LQ� WKLV� VWXG\� KDVEHHQ� WR� HVWLPDWH� WKH� YDOXH� RI� YROXQWDU\� WLPH� LQ� SHUIRUPLQJ� IRU� WKH� SXEOLF�� SUHSDULQJ� IRUSHUIRUPDQFHV��DQG�SURPRWLQJ�DQG�KRVWLQJ�HYHQWV�JLYHQ�E\�ORFDO�RU� WRXULQJ�DUWV�JURXSV�� �:HZHUH� OHVV� LQWHUHVWHG� LQ� ZRUN� LQYROYHG� LQ� URXWLQH� FOXE� DFWLYLWLHV� IRU� WKH� PXWXDO� EHQHILW� RIPHPEHUV�� �+RZHYHU�� WKLV�GLVWLQFWLRQ�FDQ�EH�GLIILFXOW�� �$Q�DPDWHXU�SOD\��FKRLU�SHUIRUPDQFH�HWF�� FDQ� HQWDLO� D� ORW� RI� UHKHDUVDOV� DQG� RWKHU� SUHSDUDWRU\� WLPH�� EXW� KDYH� DQ� DXGLHQFH� DOPRVWHQWLUHO\� FRPSRVHG� RI� UHODWLYHV� DQG� FORVH� IULHQGV� �HVSHFLDOO\� ZKHUH� SHUIRUPDQFHV� LQYROYHFKLOGUHQ���LH��WKH�HYHQW�ZLOO�DOPRVW�EH�HTXLYDOHQW�WR�D�FOXE�VHVVLRQ�7KH�SURPRWLRQ�DQG�DGPLQLVWUDWLRQ�RI� IHVWLYDOV�� IHLVHDQ�DQG�VSHFLDO�HYHQWV�ZKHUH�XQGHUWDNHQE\�YROXQWHHUV�LV�LQFOXGHG�XQGHU�WKH�³SURPRWHUV´�FDWHJRU\��DV�ZHOO�DV�JURXSV�DQG�LQGLYLGXDOVLQYROYHG� LQ�PRUH� UHJXODU� HYHQW� SURPRWLRQ�� HJ�� LQ� YLOODJH� KDOOV�� � ,Q� VRPH� FDVHV�� HJ�� WKH� 6W0DJQXV�)HVWLYDO��D�ODUJH�QXPEHU�RI�SHRSOH�FDQ�EH�LQYROYHG�LQ�RUJDQLVLQJ�D�IHVWLYDO�RU�VSHFLDOHYHQW�� �0DQ\�JURXSV�FODVVLILHG�XQGHU�DQ�DUWIRUP�FDWHJRU\�� HJ�� WUDGLWLRQDO�PXVLF��ZLOO� DFW� DVSURPRWHUV�DV�ZHOO�DV�RUJDQLVLQJ�FOXE�VHVVLRQV�DQG�SHUIRUPDQFHV�JLYHQ�E\�WKH�JURXS�LWVHOI�9ROXQWDU\� DFWLYLW\� E\� LQGLYLGXDOV� RQ� WKHLU� RZQ� DFFRXQW� �LH�� QRW� DV� JURXS�PHPEHUV�� LV� QRWLQFOXGHG�LQ�WKH�DQDO\VLV��QRU�LV�YROXQWDU\�WXLWLRQ��WKH�SODQQLQJ�RI�ORFDO�DUWV�SURMHFWV��HWF��HYHQZKHUH�LQGLYLGXDOV�PD\�EH�LQYROYHG�DV�JURXS�UHSUHVHQWDWLYHV���6XFK�DFWLYLW\�LV�WKXV�DGGLWLRQDOWR�WKDW�VKRZQ�LQ�7DEOH�����

Page 56: Microsoft Word - Westbrook master _1_.doc

��

6RPH�JURXSV��HJ��GDQFH�JURXSV��ZLOO�JLYH�FODVVHV�DV�ZHOO�DV�SHUIRUPDQFHV��:KHUH�WKLV�WXLWLRQLV�UHPXQHUDWHG��LW�LV�QRW�LQFOXGHG�LQ�WKH�DQDO\VLV���*URXSV��HJ��RI�PXVLFLDQV��ZKR�SHUIRUP�IRU�DIHH��HYHQ�ZKHUH�WKLV�LV�VPDOO��DUH�QRW�LQFOXGHG�LQ�7DEOH����0HPEHUVKLSV� RI� JURXSV� DUH� QRW� LQFOXGHG� LQ� WKH� DQDO\VLV� ZKHUH� WKHVH� JURXSV� DUH� VLPSO\PHFKDQLVPV�IRU�EX\LQJ� WLFNHWV� IRU�D�VHULHV�RI�HYHQWV�RU�FRQGXLWV� IRU�REWDLQLQJ�ILQDQFH�IURPVRXUFHV�VXFK�DV�(QWHUSULVH�0XVLF�6FRWODQG���HJ��ORFDO�PXVLF�VRFLHWLHV����$OVR��PHPEHUVKLSV�RIPDMRU�RUJDQLVDWLRQV�SULPDULO\�HVWDEOLVKHG�DV�D�PHDQV�RI�IXQGUDLVLQJ��HJ��WKH�)ULHQGV�RI�(GHQ&RXUW��DUH�H[FOXGHG��DV�WKLV�ZRXOG�XQEDODQFH�WKH�UHVXOWV���$Q�&RPXQQ�*DLGKHDGFK��H[FOXGHG�KDV� DURXQG� ������ PHPEHUV� QDWLRQDOO\�� DQG� UHFHLYHV� VRPH� ������� LQ� PHPEHUVKLSVXEVFULSWLRQV�,Q� LQWHUSUHWLQJ� 7DEOH� ���� EHORZ�� LW� VKRXOG� EH� ERUQH� LQ�PLQG� WKDW�PDQ\� LQGLYLGXDOV� ZLOO� EHPHPEHUV�RI�PRUH�WKDQ�RQH�RUJDQLVDWLRQ�

7DEOH����$UWV�2UJDQLVDWLRQV�DQG�$QQXDO�9ROXQWDU\�,QSXWLQ�WKH�+LJKODQGV�DQG�,VODQGV9ROXQWDU\�,QSXW��GD\V�&DWHJRU\ 1R��RI2UJDQLVDWLRQV 7RWDO�1R��RI0HPEHUV 3URPRWLQJ�DQG+RVWLQJ 3HUIRUPLQJ

7UDGLWLRQDO�0XVLF �� ����� ����� �����3LSH�%DQGV �� ��� ��� �����&ODVVLFDO�0XVLF �� ����� ����� �����2WKHU�0XVLF �� ��� ��� ���'DQFH�*URXSV �� ����� ��� �����$PDWHXU�'UDPD �� ����� ����� �����9LVXDO�$UWV�*URXSV �� ����� ����� Q�D/LWHUDU\�*URXSV �� ��� �� Q�D3URPRWHUV ��� ����� ������ Q�D7RWDO ��� ������ ������ ������7KH�WRWDO�PHPEHUVKLS�RI�WKH�����RUJDQLVDWLRQV�LGHQWLILHG�WKURXJK�WKH�VWXG\�ZDV����������DQDYHUDJH�RI����SHU�RUJDQLVDWLRQ�$SSO\LQJ�D�PRGHVW�UDWH�RI����SHU�KRXU�WR�WKH�WRWDO�YROXQWDU\�LQSXWV�FDOFXODWHG�DERYH�JLYHV�WKHIROORZLQJ�

3URPRWLQJ�DQG+RVWLQJ 3HUIRUPLQJ 7RWDO1R��RI�9ROXQWHHU�'D\V ������ ������ ������9DOXH�RI�9ROXQWHHU�'D\V�EDVHG�RQ�D�����KRXU�GD\� ���������� �������� ����������)XOO�WLPH�HPSOR\HH�HTXLYDOHQFH�EDVHG�RQ�D�ZRUNLQJ�\HDU�RI�����GD\V� ��� ��� ���7KH� WRWDO� YDOXH� RI� WKH� WLPH� RI� YROXQWHHUV� DQG� DPDWHXU� SDUWLFLSDQWV� RI� DSSUR[LPDWHO\����������� LV�FOHDUO\�D�PDMRU� FRQWULEXWLRQ� WR� DUWV� DFWLYLW\� LQ� WKH�+LJKODQGV� DQG� ,VODQGV�� � ,QSUDFWLFH��PXFK�RI� WKH�ZRUN� LQYROYHG�ZRXOG�DWWUDFW�D� UDWH�RI�PXFK�PRUH� WKDQ����SHU�KRXU� LIXQGHUWDNHQ� E\� D� SURIHVVLRQDO�� DOWKRXJK�� RI� FRXUVH�� WKH� YROXQWHHUV� DQG� SDUWLFLSDQWV� ODUJHO\

Page 57: Microsoft Word - Westbrook master _1_.doc

��

HQMR\�WKHLU�³ZRUN´�DQG�GR�QRW�WHQG�SHUVRQDOO\�WR�SXW�D�FRVW�RQ�WKHLU�WLPH���$Q�H[FHSWLRQ�WR�WKLVLV� WKH� 3URPRWHUV�$UWV�1HWZRUN� �3$1���ZKRVH�PHPEHUV� KDYH� GHPRQVWUDWHG� WKHLU� H[WHQVLYHFRPPLWPHQW�WKURXJK�D�YDOXDWLRQ�RI�WKHLU�DJJUHJDWH�WLPH�LQSXW�

Page 58: Microsoft Word - Westbrook master _1_.doc

��

��� &203$5,6216�:,7+�7+(������,03$&7�678'<��� (YHQWV�DQG�([KLELWLRQV7DEOH�����EHORZ�UHSHDWV�WKH�WDEOH�IURP�WKH������,PSDFW� �6WXG\�UHSRUW� WKDW�UHODWHG�WR�(YHQWVDQG�([KLELWLRQV��7DEOH�����RI�WKDW�UHSRUW���ZLWK�WKH�ER[�RIILFH�HQWU\�IHHV�DGMXVWHG�IRU�LQIODWLRQDW�����VLQFH�WKH�$SULO������WR�0DUFK������SHULRG�

7DEOH����$XGLHQFH�DQG�%R[�2IILFH�(VWLPDWHV�E\�$UW�)RUP$SULO������0DUFK�����$UW�)RUP 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV����&ODVVLFDO�0XVLF ������ ����� ������7UDGLWLRQDO�0XVLF ������ ����� �������2WKHU�0XVLF ������ ����� �������'DQFH ����� ��� ������'UDPD���3URIHVVLRQDO ������ ����� ��������$PDWHXU ������ ����� ������&KLOGUHQV�(YHQWV ������ ��� �����3RHWU\�5HDGLQJV ����� ����� �����0L[HG�(YHQWV�)HVWLYDOV ������ ����� ������([KLELWLRQV��GD\V� ������� ������ ������+,(�DUHD�WRWDOV��LQFO��H[KLELWLRQV��H[FOXGLQJ�(GHQ�&RXUW��LQFOXGLQJ�(GHQ�&RXUW� �������������� ������������� ����������������+,(�DUHD�WRWDOV��H[FO�H[KLELWLRQV��H[FOXGLQJ�(GHQ�&RXUW��LQFOXGLQJ�(GHQ�&RXUW� �������������� ������������ ����������������7DEOH�����VKRZV�WKH�SHUFHQWDJH�FKDQJH�EHWZHHQ�$SULO��������0DUFK������DQG�2FWREHU�������6HSWHPEHU������IRU�HDFK�FDWHJRU\�RI�DFWLYLW\�LQ�7DEOH�����DV�PHDVXUHG�E\�WKH�QHZ�VWXG\���7KHILJXUHV� E\� DUW� IRUP� LQ� WKH� ERG\� RI� 7DEOH� ���� H[FOXGH� (GHQ� &RXUW� 7KHDWUH�� EXW� WKH� RYHUDOOFKDQJHV�DUH�VKRZQ�ERWK�H[FOXVLYH�DQG�LQFOXVLYH�RI�WKLV�PDMRU�IDFLOLW\�$V�SUHYLRXVO\�QRWHG��WKH�QHZ�VWXG\�ZDV�PXFK�PRUH�FRPSUHKHQVLYH�LQ�LWV�FRYHUDJH��DQG�PXFKPRUH�LQIRUPDWLRQ�RQ�DUWLVWLF�DFWLYLW\� LQ� WKH�+LJKODQGV�DQG�,VODQGV� LV�QRZ�DYDLODEOH� WKDQ� WHQ\HDUV�DJR���)RU�WKLV�UHDVRQ��VRPH�RI�WKH�FHOOV�LQ�7DEOH�����DUH�VKRZQ�DV�Q�D��QRW�DSSOLFDEOH��7KH������ VWXG\�GLG�QRW� LQFOXGH�SHUIRUPDQFHV�RI� WUDGLWLRQDO� RU� RWKHU�PXVLF� LQ� KRWHOV�� SXEV�QLJKW� FOXEV�� HWF� H[FHSW� ZKHUH� JLYHQ� E\� PXVLFLDQV� WRXULQJ� WKH� +LJKODQGV� DQG� ,VODQGV� RUDVVRFLDWHG�ZLWK�IHVWLYDOV���$OVR��SHUIRUPDQFHV��LQFOXGLQJ�SDQWRPLPHV��JLYHQ�E\�ORFDO�DPDWHXUGUDPD�JURXSV�ZHUH�JHQHUDOO\�QRW�FRYHUHG�LQ�WKH������VWXG\���,W�ZDV�WKHUHIRUH�QRW�FRQVLGHUHGDSSURSULDWH� WR�PDNH� GLUHFW� FRPSDULVRQV� EHWZHHQ� WKH� ����� DQG� ����� VWXGLHV� IRU� WUDGLWLRQDOPXVLF��RWKHU�PXVLF�RU�DPDWHXU�GUDPD�� �7KH�RYHUDOO� LQFUHDVHV�LQ�DFWLYLW\�VKRZQ�LQ�7DEOH����IRU�WKH�+LJKODQGV�DQG�,VODQGV�GR��KRZHYHU��LQFOXGH�WKH�LQFUHDVHV�GXH�WR�WKH�ZLGHU�VFRSH�RI�WKHQHZ�VWXG\�LQ�WKHVH�WKUHH�VHFWRUV�

Page 59: Microsoft Word - Westbrook master _1_.doc

��

7DEOH����&KDQJHV�LQ�(YHQWV�DQG�([KLELWLRQV�$FWLYLW\�LQ�WKH�+,(�$UHD$SULO������0DUFK������WR�2FWREHU������6HSWHPEHU�����$UW�)RUP 7RWDO�$XGLHQFH�9LVLWRUV 1R��RI7RXULVWV 7RWDO�%R[�2IILFH�(QWU\�)HHV����&ODVVLFDO�0XVLF ����� ������ ������7UDGLWLRQDO�0XVLF Q�D Q�D Q�D2WKHU�0XVLF Q�D Q�D Q�D'DQFH ����� ����� �����'UDPD���3URIHVVLRQDO ����� ����� ��������$PDWHXU Q�D Q�D Q�D&KLOGUHQV�(YHQWV ����� ����� ������3RHWU\�5HDGLQJV ������ ����� ������0L[HG�(YHQWV�)HVWLYDOV ����� ����� �����([KLELWLRQV��GD\V� ������ ������ ������+,(�DUHD�WRWDOV��LQFO��H[KLELWLRQV��H[FOXGLQJ�(GHQ�&RXUW��LQFOXGLQJ�(GHQ�&RXUW� ������������ ������������ ������������+,(�DUHD�WRWDOV��H[FO�H[KLELWLRQV��H[FOXGLQJ�(GHQ�&RXUW��LQFOXGLQJ�(GHQ�&RXUW� ������������ ������������ ������������1RWHV� �L� 7KH�0L[HG�(YHQWV� ��)HVWLYDOV� FDWHJRU\� LV� ORZHU� IRU����������� WKDQ� IRU���������EHFDXVH�PRUHHYHQWV�ZHUH�FODVVLILHG�WR�DQ�DUWIRUP�FDWHJRU\�LQ�WKH�����������VWXG\�

�LL� &LQHPD�LV�QRW�VKRZQ�LQ�7DEOH�����DV�LW�ZDV�QRW�FRYHUHG�LQ�WKH������VWXG\���� 'LUHFW�(PSOR\PHQW7KH�LQFUHDVH�RI�PRUH�WKDQ������LQ� WKH�³ERWWRP�OLQH´��ER[�RIILFH� LQFRPH��EHWZHHQ� WKH� WZRVWXGLHV�LV�FRQVLVWHQW�ZLWK�WKH�LQFUHDVH�LQ�WKH�QXPEHU�RI�IXOO�WLPH�HTXLYDOHQW�MREV�VXSSRUWHG�E\WKH� DUWV� EHWZHHQ� WKH� WZR� VWXGLHV� �� XS� IURP� DSSUR[LPDWHO\� �������� GLUHFW� IWH¶V� WRDSSUR[LPDWHO\�������GLUHFW�IWH¶V���,W�LV�GLIILFXOW�WR�DVVHVV�SUHFLVHO\�KRZ�PXFK�RI�WKLV�LQFUHDVHLQ�HPSOR\PHQW�LPSDFW�LV�GXH�WR�WKH�ZLGHU�FRYHUDJH�RI�WKH�QHZ�VWXG\�DQG�WKH�JUHDWHU�YLVLELOLW\RI� DUWV� DFWLYLW\�� EXW� ZH� FRQVLGHU� WKDW� WKH� XQGHUO\LQJ� LQFUHDVH� ZLOO� EH� DURXQG� ���� �LH�� ���DGGLWLRQDO�IWH�MREV�VXSSRUWHG��VLQFH�������7KH������VWXG\�GLG�QRW�HVWLPDWH�LQGLUHFW�DQG�LQGXFHG�MRE�FUHDWLRQ�WKURXJK�WKH�PXOWLSOLHU��DQGD�FRPSDULVRQ�RQ�WKLV�EDVLV�LV�WKHUHIRUH�QRW�SRVVLEOH�

Page 60: Microsoft Word - Westbrook master _1_.doc

��

���� &203$5,6216�:,7+�27+(5�$5($6���� ,QWURGXFWLRQ,Q�RUGHU�WR�H[SORUH�SRWHQWLDO�FRPSDULVRQV�EHWZHHQ�WKH�GHJUHH�DQG�YDOXH�RI�DUWV�DFWLYLW\�LQ�WKH+LJKODQGV�DQG�,VODQGV�DQG�RWKHU�DUHDV��D�QXPEHU�RI�UHSRUWV�WKDW�KDYH�EHHQ�SURGXFHG�RYHU�WKHSDVW�ILYH�\HDUV�ZHUH�UHYLHZHG���VRPH�QDWLRQDO��VRPH�UHJLRQDO��VRPH�RQ�WKH�DUWV�DV�D�ZKROH�DQGVRPH� RQ� VSHFLILF� VHFWRUV�� � 1RQH�� KRZHYHU�� DUH� GLUHFWO\� FRPSDUDEOH�� DQG� WKHUH� DUH� WZR� NH\UHDVRQV�IRU�WKLV�

x 2WKHU�DQDO\VHV�DUH�JHQHUDOO\�PRUH�EURDG�EDVHG�LQ�WKH�DFWLYLWLHV�WKDW�WKH\�FRYHU�x 1R�RWKHU�LPSDFW�VWXGLHV�RI�ZKLFK�ZH�DUH�DZDUH�DUH�EDVHG�RQ�DV�KLJK�D�GHJUHH�RI�³ERWWRP�XS´GDWD�JDWKHULQJ�

$�UHSRUW�LQ������FRPPLVVLRQHG�E\�WKH�6FRWWLVK�&XOWXUDO�$JHQFLHV�IURP�0LFKDHO�4XLQH��&LW\8QLYHUVLW\��/RQGRQ��HPSKDVLVHG�WKH�LQDGHTXDWH�QDWXUH�RI�VWDWLVWLFDO�LQIRUPDWLRQ�RQ�WKH�VHFWRU�ERWK�IRU�6FRWODQG�DQG�WKH�8.��DQG�LQFOXGHG�D�UDQJH�RI�UHFRPPHQGDWLRQV�IRU�LPSURYLQJ�WKLV�LQWKH�IXWXUH�0RUH�UHFHQWO\��D�PDMRU�UHSRUW�SURGXFHG�E\�WKH�3ROLF\�6WXGLHV�,QVWLWXWH�LQ�-XO\�������³7KH�8.&XOWXUDO�6HFWRU���3URILOH�DQG�3ROLF\�,VVXHV´��ZDV�YHU\�FULWLFDO�RI�WKH�TXDOLW\�RI�SXEOLF�VWDWLVWLFVDYDLODEOH� WR� DVVHVV� WKH� LPSDFW� DQG� YDOXH� RI� FXOWXUDO� DFWLYLW\� LQ� WKH� 8.�� � 2IILFLDO� GDWD� DUHGHVFULEHG� DV� ³EURDG� EUXVK�� DQG� RI� OLWWOH� XVH� LQ� EXLOGLQJ� XS� D� SLFWXUH� RI� VSHFLILF� DUHDV� RIFXOWXUDO�DFWLYLW\´�$V� GLVFXVVHG� LQ� 6HFWLRQ� �� DERYH�� WKH� FDWHJRULHV� RI� DFWLYLW\� IRU� WKLV� +LJKODQGV� DQG� ,VODQGVVWXG\�ZHUH�WLJKWO\�GUDZQ���,Q�SDUWLFXODU��FUDIWV�DQG�FXOWXUDO�IDFLOLWLHV��VXFK�DV�PXVHXPV��ZHUHH[FOXGHG��DQG�WKHVH�WHQG�WR�SURYLGH�D�UHODWLYHO\�ODUJH�QXPEHU�RI�MREV�ZLWKLQ�WKH�EURDG�FXOWXUDOVHFWRU�LQ�UXUDO�DQG�XUEDQ�DUHDV�UHVSHFWLYHO\���2WKHU�VWXGLHV�RQ�DUWV�DQG�FXOWXUH�WHQG�WR�LQFOXGHDFWLYLWLHV�VXFK�DV�WKHVH�WKDW�VXSSRUW�UHODWLYHO\�ODUJH�QXPEHUV�RI�MREV��DQG��LI�EDVHG�RQ�&HQVXVRI�3RSXODWLRQ�RU�(PSOR\PHQW�GDWD��PD\�DOVR�LQFOXGH��IRU�H[DPSOH��VSRUWV�IDFLOLWLHV��ZKHUH�WKHHPSOR\PHQW�GDWD�FDQQRW�EH�GLVDJJUHJDWHG�DW�WKH�VSDWLDO�OHYHO�EHLQJ�DQDO\VHG���,QGHHG��RIILFLDOVRXUFHV�RIWHQ�FDQQRW�SURYLGH�ILJXUHV�IRU�HYHQ�WKH�EURDG�DUWV�RU�FXOWXUDO�VHFWRUV�IRU�DUHDV�ZLWKVPDOO�WRWDO�SRSXODWLRQV�VXFK�DV� WKH�+LJKODQGV�DQG�,VODQGV�� �$OVR��UHWDLOLQJ��H�J��RI�PXVLF�� LVRIWHQ�LQFOXGHG�LQ�DUWV�LPSDFW�VWXGLHV�� �6LJQLILFDQWO\�KLJKHU�HPSOR\PHQW� LPSDFWV�ZRXOG�KDYHEHHQ� IRXQG� LQ� WKLV�+LJKODQGV�DQG� ,VODQGV� VWXG\�KDG�DOO� UHWDLOLQJ�RI�ERRNV� DQG� UHFRUGV�EHHQFRYHUHG��LQFOXGLQJ�WKH�PDMRU�VWRUHV��$V�QRWHG�HOVHZKHUH�LQ�WKLV�UHSRUW��PXFK�DUWV�UHODWHG�HPSOR\PHQW�LQ�WKH�+LJKODQGV�DQG�,VODQGVLV�SDUW�WLPH�RU�FDVXDO��DQG�D�YLVXDO�DUWLVW��PXVLFLDQ��ZULWHU��HWF��ZKR�HDUQV�PRQH\�IURP�WKHLUDUWV�DFWLYLW\�ZLOO�RIWHQ�KDYH�D�IXOO�WLPH�MRE�LQ�DQRWKHU�ILHOG��D�SHQVLRQ��RU�ZRUNLQJ�VSRXVH�WRVXSSRUW�WKHLU�DUWLVWLF�LQWHUHVW���7KHVH�SHRSOH�ZLOO�QRW�WHQG�WR�EH�SLFNHG�XS�WKURXJK�DQDO\VHV�RI&HQVXV� UHWXUQV�� LQFRPH� WD[� RU� 9$7� UHWXUQV�� HWF�� QRW� OHDVW� EHFDXVH� WKHLU� LQFRPH� LV� RIWHQXQGHFODUHG�IRU�WD[�SXUSRVHV���7KLV�DOVR�DSSOLHV�WR�D�SURSRUWLRQ�RI�WKH�WRXULVP�EXVLQHVVHV��HJ�%%¶V�� WKDW� JDLQ� HFRQRPLF� EHQHILW� IURP� WKH� RYHUQLJKW� VWD\� DQG� RWKHU� VSHQGLQJ� RI� WRXULVWYLVLWRUV� WR� HYHQWV� DQG� H[KLELWLRQV�� � ,Q� DJJUHJDWH�� WKHVH� SDUW�WLPH� ZRUNHUV� UHSUHVHQW� DVXEVWDQWLDO� SURSRUWLRQ� RI� WKH� IXOO�WLPH� HTXLYDOHQW� MREV� HVWLPDWHG� DV� DUWV�UHODWHG� LQ� WKH+LJKODQGV�DQG�,VODQGV�

Page 61: Microsoft Word - Westbrook master _1_.doc

��

7KH� SDUW�WLPH� QDWXUH� RI� PXFK� DUWLVWLF� ZRUN� LV� QRW� XQLTXH� WR� WKH� +LJKODQGV� DQG� ,VODQGV�DOWKRXJK� RXU� UHVHDUFK� VXJJHVWV� WKDW� LW� LV� UHODWLYHO\� SUHYDOHQW�� � $� 6RFLR�(FRQRPLF� 6WXG\� RI$UWLVWV� LQ�6FRWODQG�IRU� WKH�6$&�E\�WKH�8QLYHUVLW\�RI�*ODVJRZ�IRXQG� WKDW�����RI� WKH�DUWLVWVVXUYH\HG� HDUQHG� OHVV� WKDQ� ���� RI� WKHLU� LQFRPH� IURP� WKHLU� SULQFLSDO� DUWLVWLF� DFWLYLW\� LQ���������DQG�����HDUQHG�OHVV�WKDQ�����

Page 62: Microsoft Word - Westbrook master _1_.doc

��

���� $WWHQGDQFH�DW�$UWV�(YHQWV�DQG�([KLELWLRQV$� UHSRUW� E\� 6\VWHP� �� IRU� WKH� 6$&� �-XO\� ������ SURYLGHV� XVHIXO� EHQFKPDUN� ILJXUHV� IRU6FRWODQG���)URP�WKH�ILJXUHV�RQ�DWWHQGDQFH�DW�GLIIHUHQW�W\SHV�RI�HYHQWV�SURYLGHG�LQ�WKH�UHSRUW��LWLV�SRVVLEOH�WR�FRPSXWH�DSSUR[LPDWHO\�KRZ�PDQ\�WLPHV�SHU�\HDU�SHRSOH�DWWHQG�WKH�FDWHJRULHVRI�HYHQW�DQG�H[KLELWLRQ�WKDW�EURDGO\�PDWFK�WKRVH�FRYHUHG�E\�RXU�+LJKODQGV�DQG�,VODQGV�VWXG\�([FOXGLQJ�FLQHPD�IURP�WKH�DQDO\VLV��DV�WKLV�ZDV�RQO\�FRYHUHG�SDUWLDOO\�LQ�RXU�+LJKODQGV�DQG,VODQGV� VWXG\��� 6FRWWLVK� DGXOWV� �DJHG� ��� SOXV�� DWWHQGHG� DQ� DYHUDJH� RI� ���� HYHQWV� DQGH[KLELWLRQV�SHU�SHUVRQ�SHU�\HDU�2XU�+LJKODQGV�DQG�,VODQGV�VWXG\�JLYHV�DQ�DYHUDJH�RI�DSSUR[LPDWHO\�����DWWHQGDQFHV�SHU�\HDUE\�WKH�SRSXODWLRQ�DV�D�ZKROH�ZLWKLQ�WKH�+LJKODQGV�DQG�,VODQGV���,I�DWWHQGDQFHV�DW�DUWV�HYHQWVDQG� H[KLELWLRQV�E\�+LJKODQGV� DQG� ,VODQGV� UHVLGHQWV� RXWZLWK� WKH� DUHD� DUH� WDNHQ� LQWR� DFFRXQW�HJ��FRQFHUWV�LQ�*ODVJRZ�RU�(GLQEXUJK��DQG�LI�WKH�6FRWWLVK�DYHUDJH�LV�DGMXVWHG�GRZQZDUGV�WRLQFOXGH� \RXQJ� FKLOGUHQ� LQ� WKH� SHU� KHDG� EDVH�� LW� ZRXOG� DSSHDU� WKDW� WKH� UHVXOWV� RI� RXU� VWXG\PLUURU�IDLUO\�FORVHO\�WKH�QDWLRQDO�SDWWHUQ�3DUWLFXODU� HYHQWV� LQ� VPDOO� FRPPXQLWLHV� LQ� WKH� +LJKODQGV� DQG� ,VODQGV� FDQ� DWWUDFW� YHU\� KLJKSURSRUWLRQV�RI�WKH�ORFDO�SRSXODWLRQ��EXW�WKH�RSSRUWXQLW\�WR�DWWHQG�DUH�IDU�PRUH�OLPLWHG�WKDQ�LQD�FLW\�ZKHUH�D�UDQJH�RI�DOWHUQDWLYHV�LV�DYDLODEOH�GDLO\���7LFNHW�SULFHV�DUH�JHQHUDOO\�FKHDSHU�LQWKH�+LJKODQGV�DQG�,VODQGV��EXW�LW�LV�UDUH�IRU�VWDU�QDPHV�WR�SHUIRUP�LQ�WKH�+LJKODQGV�DQG�,VODQGV�RWKHU�WKDQ�RFFDVLRQDOO\�DW�(GHQ�&RXUW��7KH� 6\VWHP� �� VXUYH\� LQFOXGHG� ���� LQWHUYLHZHHV� IURP� WKH� +LJKODQGV� DQG� ,VODQGV�� DQG� WKHIROORZLQJ�FKDUDFWHULVWLFV�RI�WKHLU�DWWHQGDQFHV�ZHUH�IRXQG�

+LJKODQGV�DQG�,VODQGV��� 6FRWWLVK�$YHUDJH���&LQHPD1HYHU�DWWHQG$WWHQG����WLPHV�SHU�\HDU ���� ����0XVLFDOV$WWHQG����WLPHV�SHU�\HDU �� ��5RFN�3RS�0XVLF$WWHQG����WLPHV�SHU�\HDU �� ��)RON�7UDGLWLRQDO�6FRWWLVK�0XVLF1HYHU�DWWHQG$WWHQG����WLPHV�SHU�\HDU ���� ����&RQWHPSRUDU\�3DLQWLQJ1HYHU�DWWHQG$WWHQG����WLPHV�SHU�\HDU ���� ����&RXQWU\�DQG�:HVWHUQ�0XVLF1HYHU�DWWHQG �� ��

7KHVH�VWDWLVWLFV� LOOXVWUDWH� WKH�LQWHUHVW� LQ� WKH�+LJKODQGV�DQG�,VODQGV�LQ� WUDGLWLRQDO�DQG�FRXQWU\DQG� ZHVWHUQ� PXVLF�� WKH� RSSRUWXQLWLHV� WR� VHH� FRQWHPSRUDU\� SDLQWLQJ� LQ� JDOOHULHV�� DQG� WKHOLPLWHG�RSSRUWXQLWLHV� WR�DWWHQG�FLQHPD��LQ�PRVW�SDUWV�RI� WKH�DUHD��� URFN�SRS�PXVLF�FRQFHUWV�DQG�PXVLFDOV�

Page 63: Microsoft Word - Westbrook master _1_.doc

��

���� /RFDO�$XWKRULW\�([SHQGLWXUH�RQ�WKH�$UWV/HYHOV�RI�H[SHQGLWXUH�E\�+LJKODQGV�DQG�,VODQGV�/RFDO�$XWKRULWLHV�RQ�WKH�DUWV�DUH�UHOHYDQW�WR�DQXPEHU�RI�DVSHFWV�RI�WKLV�UHSRUW��DV�ZHOO�DV�EHLQJ�D�GHWHUPLQDQW�RI�DUWV�UHODWHG�HPSOR\PHQW�LQDV�IDU�DV�VXFK�H[SHQGLWXUH�LV�LQFXUUHG�RQ�GLUHFW�HPSOR\PHQW�$Q�DQQXDO�VXUYH\�E\�WKH�6$&�DQG�&26/$�SURYLGHV�FRPSDUDWLYH�GHWDLOV�RI�VSHQGLQJ�RQ�WKHDUWV�E\�/RFDO�$XWKRULWLHV� LQ�6FRWODQG�� �5HYHQXH�H[SHQGLWXUHV�SHU�FDSLWD� IRU� WKH�PRVW� UHFHQW\HDU�IRU�ZKLFK�ILJXUHV�DUH�DYDLODEOH�DUH�VXPPDULVHG�EHORZ�

3HU�&DSLWD�5HYHQXH�([SHQGLWXUH�������������$UJ\OO�DQG�%XWH ����&RPKDLUOH�QDQ�(LOHDQ�6LDU QR�UHWXUQ+LJKODQG ����0RUD\ ����2UNQH\ ����6KHWODQG �����6FRWWLVK�$YHUDJH ����

([SHQGLWXUHV�E\�DOO�RI�WKH�/RFDO�$XWKRULWLHV�EDU�6KHWODQG�DUH�EHORZ�WKH�QDWLRQDO�DYHUDJH�SHUKHDG�RI�SRSXODWLRQ���6KHWODQG�,VOHV�&RXQFLO�PDNHV�E\�IDU�WKH�KLJKHVW�OHYHO�RI�H[SHQGLWXUH�SHUKHDG�RI�6FRWWLVK�/RFDO�$XWKRULWLHV�� �*HQHUDOO\��UHODWLYHO\�KLJK�H[SHQGLWXUHV�DUH�PDGH�E\�WKHFLWLHV� ZLWK� VXEVWDQWLDO� DUWV� IDFLOLWLHV� WR� VXSSRUW� �� *ODVJRZ� ���������� (GLQEXUJK� ���������$EHUGHHQ� ���������� DQG� 'XQGHH� ��������� � (GLQEXUJK� DQG� *ODVJRZ� &LW\� &RXQFLOV� MRLQWO\DFFRXQW� IRU� ���� RI� WKH� JUDQW� H[SHQGLWXUH� WR� DUWV� RUJDQLVDWLRQV� PDGH� E\� 6FRWWLVK� /RFDO$XWKRULWLHV� �LQFOXGHG� LQ� WKH� DERYH� ILJXUHV��� � :LWKLQ� WKH� +LJKODQGV� DQG� ,VODQGV�� +LJKODQG&RXQFLO¶V� VSHQGLQJ�RI���������� LQ��������� LV� VLJQLILFDQW� ��(GHQ�&RXUW�7KHDWUH� UHFHLYLQJ� DKLJK�VKDUH�RI�WKLV�$V� DQ� LOOXVWUDWLRQ� RI� WKH� UHGXFWLRQV� LQ� /RFDO� $XWKRULW\� DUWV� VXSSRUW� VLQFH� UH�RUJDQLVDWLRQUHIHUUHG�WR�HOVHZKHUH�LQ�WKLV�UHSRUW��+LJKODQG�&RXQFLO¶V�H[SHQGLWXUH�RI�������PLOOLRQ�RQ�WKHDUWV� LQ���������FRPSDUHV�ZLWK�WRWDO�H[SHQGLWXUH�E\�WKH�+LJKODQG�'LVWULFW�&RXQFLOV��SOXV� WKH5HJLRQDO�&RXQFLO� RI� ������PLOOLRQx LQ��������� �XQDGMXVWHG� IRU� LQIODWLRQ��� �'LUHFW� SURYLVLRQH[SHQGLWXUH� �LQFOXGLQJ� DUWV� RIILFHUV�� IHOO� IURP� DSSUR[LPDWHO\� ��������� WR� DSSUR[LPDWHO\���������

x &DLWKQHVV�'LVWULFW�GLG�QRW�VXEPLW�ILJXUHV�IRU����������DQG�LWV���������WRWDO�ZDV�LQVWHDG�XVHG�

Page 64: Microsoft Word - Westbrook master _1_.doc

��

���� $1$/<6,6� 2)� )81',1*� )520� 7+(� 6&277,6+� $576� &281&,/�� 7+($576�/277(5<��$1'�7+(�(8523($1�81,21���� &RPSDUDWLYH�$QDO\VLV�RI�6FRWWLVK�$UWV�&RXQFLO�$VVLVWDQFH�WR�WKH�+LJKODQGV�DQG,VODQGV�DQG�6FRWODQG�DV�D�:KROH)URP�VWDWLVWLFV�SURYLGHG�GLUHFWO\�E\�WKH�6FRWWLVK�$UWV�&RXQFLO�DQG�IURP�LQIRUPDWLRQ�IURP�LWV����������$QQXDO� 5HSRUW�� WKH� IROORZLQJ� WDEOH� ZDV� FRPSLOHG� RQ� JUDQW� DVVLVWDQFH� IURP� WKH6$&�WR�+LJKODQGV�DQG�,VODQGV�YHQXHV��RUJDQLVDWLRQV�DQG�LQGLYLGXDOV�

1R��RI�*UDQWV 7RWDO�³9RWHG´�)XQGLQJ���6KHWODQG � ������2UNQH\ �� ������:HVWHUQ�,VOHV �� �������+LJKODQG �� �������0RUD\��ZHVW� � ���$UJ\OO�DQG�,VODQGV �� ������7RWDOV ��� ���������7KH� DERYH� ILJXUHV� PLJKW� H[FOXGH� VRPH� VPDOO� JUDQWV� WR� LQGLYLGXDOV� �HJ�� ZULWHUV��� EXW� WKLVZRXOG�KDYH�PLQLPDO�HIIHFW�RQ�WKH�+LJKODQGV�DQG�,VODQGV�WRWDO�*UDQWV� KDYH� EHHQ� DOORFDWHG� E\� DUHD� WR� WKH� DGGUHVV� RI� WKH� UHFLSLHQW�� DOWKRXJK�� LW� VKRXOG� EHDSSUHFLDWHG�WKDW�LQ�VRPH�FDVHV�WKH�EHQHILW�ZLOO�JR�EH\RQG�WKDW�DUHD��HJ��+,�$UWV�DQG�3URLVHDFWQDQ�(DODQ��7KHUH� ZLOO� DOVR� EH� H[DPSOHV�� QRW� DOORZHG� IRU� LQ� WKH� WDEOH� DERYH�� RI� 6$&� JUDQW�DLGHGRUJDQLVDWLRQV� EDVHG� RXWZLWK� WKH� +LJKODQGV� DQG� ,VODQGV� ZKRVH� DFWLYLWLHV� EHQHILW� WKH� DUHD�LQFOXGLQJ�RUJDQLVDWLRQV�ZLWK�D�QDWLRQDO�UHPLW��HJ��6FRWWLVK�%RRN�7UXVW��*DHOLF�%RRN�&RXQFLO��ZKLFK�DUH�EDVHG�LQ�WKH�&HQWUDO�%HOW���(QWHUSULVH�0XVLF�6FRWODQG��EDVHG�LQ�$EHUGHHQ��SURYLGHGIXQGLQJ�WRZDUGV����HYHQWV�DW���YHQXHV�LQ�WKH�+LJKODQGV�DQG�,VODQGV�GXULQJ�WKH�\HDU��DQG�WKHUHDUH� D� QXPEHU� RI� H[WHUQDOO\�EDVHG� SHUIRUPLQJ� JURXSV� ZKRVH� IXQGLQJ� DOORZV� WKHP� WR� WRXUZLWKLQ�WKH�+LJKODQGV�DQG�,VODQGV��DOWKRXJK�WKLV�LV�SDUWO\�EDODQFHG�E\�WRXUV�E\�JURXSV�VXFK�DV726*�RXWZLWK�WKH�+LJKODQGV�DQG�,VODQGV��6$&� JUDQW� DLG� WR� WKH� +LJKODQGV� DQG� ,VODQGV� LV� FRPSDUHG� EHORZ� ZLWK� LWV� WRWDO� JUDQW� DLGH[SHQGLWXUH�LQ�6FRWODQG�LQ�WKH�����������ILQDQFLDO�\HDU�

6$&*UDQW�$LG +,($UHD�DV�3RSXODWLRQ������ +,($UHD�DV�

*UDQW�$LGSHU�+HDG+,(�$UHD ���������� ������� �����6FRWODQG� �L� LQFOXVLYH�RI�QDWLRQDO�FRPSDQLHV

�LL� H[FOXVLYH�RI�QDWLRQDO�FRPSDQLHV����������������������

������

��������� ��� ����������

1RWH� 7KH�DERYH�FRPSDULVRQ�LV�QRW�SUHFLVH�DV�WKH�+LJKODQGV�DQG�,VODQGV�ILJXUHV� KDYH�EHHQ�DGMXVWHGWR�WDNH�DFFRXQW�RI�JUDQWV�DSSURYHG�EXW�QRW�WDNHQ�XS�LQ�IXOO�DV�DW�1RYHPEHU��������7KH�QDWLRQDO�ILJXUHVPD\�QRW�KDYH�EHHQ�DGMXVWHG�WR�WKH�VDPH�H[WHQW�

Page 65: Microsoft Word - Westbrook master _1_.doc

��

*UDQW�DLG�SHU�KHDG�LQ�WKH�+LJKODQGV�DQG�,VODQGV��XQDGMXVWHG��ZDV�����RI�WKH�DYHUDJH�6FRWWLVKOHYHO���7KLV�LV�DQ�LPSURYHPHQW�RQ�WKH�����VKDUH�RQ�D�SHU�KHDG�RI�SRSXODWLRQ�EDVLV�IRU���������UHSRUWHG�LQ�WKH������,PSDFW�6WXG\��ZKLFK�ZDV�EDVHG�RQ�D�VLPLODU�DQDO\VLV���$V�EHIRUH��WKHUHODWLYHO\�ORZ�SHU�KHDG�VKDUH�RI�WKH�+LJKODQGV�DQG�,VODQGV�LV�H[SODLQHG�WR�D�VLJQLILFDQW�H[WHQWE\�WKH�ORFDWLRQ�RI�WKH�QDWLRQDO�FRPSDQLHV�LQ� WKH�&HQWUDO�%HOW�� �$OVR��(GHQ�&RXUW� LV� WKH�RQO\PDMRU�YHQXH�LQ�WKH�+LJKODQGV�DQG�,VODQGV�-RLQWO\��WKH�IROORZLQJ�IRXU�QDWLRQDO�FRPSDQLHV�UHFHLYHG�D�WRWDO�RI�������������IURP�WKH�6$&LQ�������������6FRWWLVK�2SHUD���������������5R\DO�6FRWWLVK�1DWLRQDO�2UFKHVWUD��������������6FRWWLVK�%DOOHW� ������������� DQG�6FRWWLVK�&KDPEHU�2UFKHVWUD� �������������� � ,I� WKHVH� JUDQWVDUH�H[FOXGHG��WKH�*UDQW�$LG�SHU�+HDG�RI�6FRWODQG¶V�3RSXODWLRQ�IDOOV�WR��������DV�VKRZQ�LQ�WKHWDEOH�DERYH�7KH�PDMRU�UHFLSLHQWV�RI�JUDQW�IXQGLQJ�LQ�WKH�+LJKODQGV�DQG�,VODQGV�LQ�����������LQFOXGHG�6KHWODQG � 6KHWODQG�$UWV�7UXVW � �����������DSSURYDOV�2UNQH\ � 3LHU�$UWV�&HQWUH �6W�0DJQXV�)HVWLYDO � ��������������:HVWHUQ�,VOHV � 3URVHDFW�QDQ�(DODQ �$Q�/DQQWDLU � ���������FRUH�IXQGLQJ�SOXV�WKUHH�RWKHU�JUDQWV����������FRUH�IXQGLQJ�SOXV�IRXU�RWKHU�JUDQWV�+LJKODQG � (GHQ�&RXUW�7KHDWUH �)HLVHDQ�1DQ�*DLGKHDO �DUW�WP �726*�7KHDWUH�&RPSDQ\ �+LJKODQG�)HVWLYDO �$UYRQ�DW�0RQLDFN�0KRU �

����������FRUH�IXQGLQJ�SOXV�WZR�RWKHU�SURMHFWV���������������������������������DSSURYDOV��������$UJ\OO�DQG�WKH�,VODQGV� 0XOO�7KHDWUH �$UJ\OO�DQG�%XWH�&RXQFLO � �����������DSSURYDOV������������DSSURYDOV�$V� SUHYLRXVO\� QRWHG�� LW� KDV� EHHQ� GLIILFXOW� IRU� QHZ� IDFLOLWLHV� WR� REWDLQ� VLJQLILFDQW� DQQXDOIXQGLQJ� IURP� WKH� 6$&� EHFDXVH� RI� LWV� RQJRLQJ� FRPPLWPHQW� WR� HVWDEOLVKHG� YHQXHV� DQGRUJDQLVDWLRQV� WKDW� DUH� FULWLFDOO\� GHSHQGHQW� RQ� WKLV� IXQGLQJ� �HVSHFLDOO\� LQ� WKH� FRQWH[W� RIUHGXFHG� /RFDO�$XWKRULW\� VSHQGLQJ� RQ� WKH� DUWV� WKURXJKRXW� 6FRWODQG� DQG� WKH� LQDELOLW\� RI� WKH/RWWHU\�WR�SURYLGH�ORQJ�WHUP�UHYHQXH�IXQGLQJ��ZKLFK�LV�SURKLELWHG�E\�LWV�GLUHFWLRQV��7KH� QDWLRQDO� FRPSDQLHV� DEVRUE� D� ODUJH� SURSRUWLRQ� RI� WKH� 6$&¶V� DQQXDO� EXGJHW�� DQG� WKHHFRQRPLF�LPSDFWV�IURP�WKLV�WHQG�WR�EH�FRQFHQWUDWHG�LQ�WKH�&HQWUDO�%HOW�� �6RFLDO��DUWLVWLF�DQGFDUHHU�EHQHILWV�WR�+LJKODQGV�DQG�,VODQGV�UHVLGHQWV�QHYHUWKHOHVV�LQFOXGH�YLVLWV�E\�WKH�QDWLRQDOFRPSDQLHV� WR� WKH�DUHD�� WKH�RSSRUWXQLW\� IRU�+LJKODQGV�DQG� ,VODQGV�PXVLFLDQV��GDQFHUV�� HWF� WRMRLQ� D� QDWLRQDO� FRPSDQ\�� DQG� WKH� RSSRUWXQLW\� IRU� +LJKODQGV� DQG� ,VODQGV� UHVLGHQWV� WR� VHH� DSHUIRUPDQFH� E\� D� QDWLRQDO� FRPSDQ\� ZKLOH� YLVLWLQJ� *ODVJRZ� RU� (GLQEXUJK�� � 7KH� SODQV� WRHVWDEOLVK�D�QDWLRQDO� WKHDWUH� LQ�6FRWODQG�FRXOG�SXW�D� IXUWKHU� VWUDLQ�RQ�6$&¶V� UHYHQXH�EXGJHW�GHSHQGLQJ�RQ�KRZ�PXFK�H[WUD�IXQGLQJ�LV�UHFHLYHG�IURP�WKH�*RYHUQPHQW�IRU�WKLV����KRZHYHUGHVLUDEOH�VXFK�DQ�LQLWLDWLYH�PLJKW�EH�LQ�LWVHOI�,W� LV� LQWHUHVWLQJ� WR� QRWH� WKDW� WKH� 6FRWWLVK� &KDPEHU� 2UFKHVWUD� KDV� EHHQ� PRUH� DFWLYH� LQ� WKH+LJKODQGV�DQG�,VODQGV�WKDQ�WKH�RWKHU�QDWLRQDO�FRPSDQLHV�EHFDXVH�WKLV�LV�D�UHTXLUHPHQW�RI�LWV

Page 66: Microsoft Word - Westbrook master _1_.doc

��

FRUH� IXQGLQJ� IURP� 6$&�� DOWKRXJK� WKH� RWKHU� QDWLRQDO� FRPSDQLHV� KDYH� RFFDVLRQDOO\� JLYHQODUJH�VFDOH� SHUIRUPDQFHV� LQ� RXWO\LQJ� DUHDV� VXFK� DV� 6KHWODQG� DV�ZHOO� DV� DW� (GHQ�&RXUW�� DQGKDYH�WRXULQJ�RXWUHDFK�SURJUDPPHV����� $QDO\VLV�RI�/RWWHU\�)XQGHG�3URMHFWV)LJXUHV�ZHUH�SURYLGHG�E\�WKH�6FRWWLVK�$UWV�&RXQFLO�RQ�/RWWHU\�IXQGLQJ�IRU�HDFK�RI�WKH�/RFDO$XWKRULW\�DUHDV�ZLWKLQ�WKH�+LJKODQGV�DQG�,VODQGV�IURP�WKH�VWDUW�RI�WKH�$UWV�/RWWHU\�LQ������WR2FWREHU��������7KLV�LV�VXPPDULVHG�EHORZ��DGMXVWHG�WR�WKH�+,(�DUHD�ERXQGDULHV�

1R��RI�$ZDUGV $PRXQW����6KHWODQG � �������2UNQH\ �� �������:HVWHUQ�,VOHV �� ���������+LJKODQG �� ���������0RUD\��ZHVW� � ������$UJ\OO�DQG�WKH�,VODQGV �� �������7RWDOV ��� ����������7KH�ILJXUHV�DERYH�KDYH�WDNHQ�DFFRXQW�RI�SURMHFWV�ZLWKGUDZQ�E\�WKH�DSSOLFDQW�DIWHU�DSSURYDODQG� /RWWHU\� IXQGLQJ� QRW� WDNHQ� XS� LQ� IXOO� �DV� DW� 2FWREHU� ������� � (VWLPDWHV� ZHUH� PDGH� IRUEHQHILWV� WR�:HVW�0RUD\� DQG�$UUDQ� IURP� SURMHFWV� FRYHULQJ�0RUD\� DQG�1RUWK�$\UVKLUH� DV� DZKROH�UHVSHFWLYHO\�7KH�WRWDO�IRU�WKH�:HVWHUQ�,VOHV�LQFOXGHV������������HDUPDUNHG�IRU�$Q�/DQQWDLU�/WG�WRZDUGV�DQHZ�DUWV�FHQWUH�LQ�6WRUQRZD\��WKDW�QRZ�DSSHDUV�XQOLNHO\�WR�SURFHHG�DW�WKH�RULJLQDOO\�SODQQHGVFDOH� �D� UH�VXEPLVVLRQ� RI� D� UHYLVHG� VFKHPH� LV� WR� EH� FRQVLGHUHG� E\� WKH� 6$&¶V� &RXQFLO� LQ-DQXDU\�������� � ,I� WKLV�VXP�LV�H[FOXGHG�IURP�WKH�DJJUHJDWH� ILJXUHV�DERYH�� WKH�:HVWHUQ� ,VOHVWRWDOV� IDOO� WR� ��� DZDUGV� DQG� ��������� RI� /RWWHU\� IXQGLQJ�� DQG� WKH� +LJKODQGV� DQG� ,VODQGV(QWHUSULVH�DUHD�WRWDOV�IDOO�WR�����DZDUGV�DQG������������RI�/RWWHU\�IXQGLQJ�'XULQJ�WKH�VDPH�SHULRG��/RWWHU\�IXQGLQJ�WR�6FRWODQG�DV�D�ZKROH�WRWDOOHG�������������x IURP�����x DZDUGV�,QFOXGLQJ�WKH�6WRUQRZD\�DUWV�FHQWUH�DW� WKH�RULJLQDOO\�DSSURYHG� OHYHO�JLYHV� WKH� IROORZLQJ�SHUKHDG�RI�SRSXODWLRQ�FRPSDULVRQ�

/RWWHU\$ZDUGV +,(�$UHDDV�� 3RSXODWLRQ���� +,(�$UHDDV�� $ZDUGV3HU�+HDG+,(�$UHD ����������� ������� ������6FRWODQG ������������ ��� ��������� ��� ������

x $�VPDOO�GHJUHH�RI�HVWLPDWLRQ�ZDV�LQYROYHG�LQ�DOORFDWLQJ�WKH�6FRWWLVK�ILJXUHV�WR�WKH�SUHFLVH�SHULRG�FRYHUHG�E\WKH�+,(�DUHD�DQDO\VLV�

Page 67: Microsoft Word - Westbrook master _1_.doc

��

([FOXGLQJ�WKH�6WRUQRZD\�DUWV�FHQWUH�JLYHV�WKH�IROORZLQJ�/RWWHU\$ZDUGV +,(�$UHDDV�� 3RSXODWLRQ���� +,(�$UHDDV�� $ZDUGV3HU�+HDG+,(�$UHD ���������� ������� ������6FRWODQG ������������ ��� ��������� ��� ������

$�VPDOOHU�/RWWHU\�DZDUG�WR�D�VFDOHG�GRZQ�6WRUQRZD\�$UWV�&HQWUH��ZKLFK�ORRNV�OLNHO\��ZRXOGJLYH�WKH�+LJKODQGV�DQG�,VODQGV�EURDGO\�LWV�SRSXODWLRQ�VKDUH�RI�$UWV�/RWWHU\�IXQGLQJ�1RWDEOH�DSSURYDOV�KDYH�LQFOXGHG�6KHWODQG� ��DZDUGV�WR�WKH�6KHWODQG�$UWV�7UXVW��LQFOXGLQJ����������WRZDUGV�D� ��\HDUPXVLF�GHYHORSPHQW�SURJUDPPH�2UNQH\� ��������� WRZDUGV� WKH� FRVW� RI� D� ���� VHDW� FLQHPD� ZLWK� DXGLR�YLVXDO� DQGJUDSKLFV�ZRUNVKRS�VWXGLRV��SDUW�RI�WKH�3LFNDTXR\�SURMHFW��:HVWHUQ�,VOHV� �����������WR�$Q�/DQQWDLU�WRZDUGV�D�QHZ�DUWV�FHQWUH�LQ�6WRUQRZD\�

���������WRZDUGV�DQ�H[WHQVLRQ�RI�7DLJ�&KHDUVDEKDJK��1RUWK�8LVW�����������WR�3URLVHDFW�QDQ�(DODQ�WRZDUGV�WKH�FRVW�RI�DQ�LQWHJUDWHG�DUWV�DQGPHGLD�WUDLQLQJ�SURJUDPPH�IRU�*DHOLF�DFWRUV��ZULWHUV�DQG�PXVLFLDQV�

+LJKODQG� ���������WRZDUGV�GHYHORSPHQWV�DW�$Q�7XLUHDQQ�$UWV�&HQWUH��3RUWUHH����������� WRZDUGV� WKH� FRVW� RI� H[WHQGLQJ� $URV� WR� SURYLGH� DQDXGLWRULXP�FLQHPD����������WR�(GHQ�&RXUW�IRU�UHIXUELVKPHQWV����������WR�+,�$UWV�IRU�WKH�PRELOH�FLQHPD���������� IRU� D� WKUHH� \HDU� FODVVLFDO� DQG� WUDGLWLRQDO� PXVLF� SURMHFW� LQ/RFKDEHU����������IRU��0,'$6��D�WKUHH�\HDU�+,�$UWV�PXVLF�LQGXVWU\�LQLWLDWLYH����������WR�6N\H�DQG�/RFKDOVK�<RXQJ�0XVLF�0DNHUV�IRU�D�GHYHORSPHQWSURJUDPPH����������WR�FUHDWH�DQ�DUW�JDOOHU\�DW�7LPHVSDQ��+HOPVGDOH����������� WR�+LJKODQG�&RXQFLO� IRU���GUDPD�ZRUNHUV�IRU�FKLOGUHQ�DJHG��������������� WR� H[WHQG� DQG� UHIXUELVK� +LJKODQG� 3ULQWPDNHUV�:RUNVKRS� DQG*DOOHU\��QRZ�DUW�WP��

Page 68: Microsoft Word - Westbrook master _1_.doc

��

+LJKODQG��FRQW���� ��������� WR� WKH� 0DF3KDLO� &HQWUH� IRU� FUHDWLQJ� D� WKHDWUH� LQ� WKH� QHZ8OODSRRO�+LJK�6FKRRO���������WR�*UH\�&RDVW�7KHDWUH�&RPSDQ\�WRZDUGV� WKH�FRVW�RI�³(JLO��6RQRI� WKH�1LJKW�:ROI´�� DQ� LQQRYDWLYH� WKHDWUH� SURGXFWLRQ�ZLWK� DQ� HGXFDWLRQSURJUDPPH�DQG�SXEOLF�H[KLELWLRQV�

$UJ\OO�DQG�WKH�,VODQGV� ��DZDUGV�WRWDOOLQJ����������WR�WKH�7REHUPRU\�&HQWUH��$Q�7REDU�� IRU� LWVGHYHORSPHQW�DQG�VXEVHTXHQW�SURMHFWV��������� WR� 7LUHH� $UW� (QWHUSULVHV� WRZDUGV� D� VHULHV� RI� ZRUNVKRSVFXOPLQDWLQJ�LQ�DQ�HUHFWLRQ�RI�DUWZRUN�DW�WKH�3LHUKHDG���������WR�$UUDQ�%UDVV�IRU�QHZ�LQVWUXPHQWV�

7KH�DERYH�/RWWHU\�VWDWLVWLFV�H[FOXGH�WKH�QHZ�$ZDUGV�IRU�$OO�VFKHPH�IRU�SURMHFWV�SXW�IRUZDUGE\�JURXSV�ZLWK�DQ�DQQXDO�LQFRPH�RI�XQGHU���������UHTXHVWLQJ�DVVLVWDQFH�RI�EHWZHHQ������DQG�������� � %HWZHHQ� WKH� ILUVW� JUDQWV� WR� WKH� +LJKODQGV� DQG� ,VODQGV� WKURXJK� WKH� VFKHPH� LQ'HFHPEHU������DQG���WK )HEUXDU\�������WKH�/RFDO�$XWKRULW\�DUHDV�ZLWKLQ�WKH�+LJKODQGV�DQG,VODQGV�KDG�UHFHLYHG�WKH�IROORZLQJ�DUWV�UHODWHG�$ZDUGV�IRU�$OO�1R��RI�$ZDUGV $PRXQW����6KHWODQG � ������2UNQH\ �� ������:HVWHUQ�,VOHV �� ������+LJKODQG �� �������0RUD\��DOO� �� ������$UJ\OO�DQG�%XWH��DOO� �� �������7RWDOV ��� �������

1RWH� $UUDQ�DQG�&XPEUDH�DUH�H[FOXGHG�DERYH����� $QDO\VLV�RI�2EMHFWLYH�����)XQGHG�3URMHFWV7KH�+LJKODQGV�DQG�,VODQGV�2EMHFWLYH���3URJUDPPH�WKDW�UDQ�IURP������WR������ZDV�D�PDMRUERRVW�WR�GHYHORSPHQW�LQ�WKH�DUHD���6XSSRUW�IRU�LQYHVWPHQW�WKURXJK�(5')�WRWDOOHG�VRPH�����PLOOLRQ�RYHU�WKH�SHULRG�WRZDUGV�SURMHFWV�ZLWK�D�WRWDO�FRVW�RI�VRPH������PLOOLRQ�1R�3URJUDPPH�0HDVXUH��KRZHYHU��ZDV�VSHFLILFDOO\�JHDUHG�WRZDUGV�DUWV�UHODWHG�IDFLOLWLHV��DQGVRPH�RI� WKH�ODUJHU�VRFLDO�IDFLOLW\�SURMHFWV� WKDW�ZHUH�DVVLVWHG�ZHUH�MXVWLILHG� �E\�DSSOLFDQWV�RQWRXULVP�JURXQGV���LH��WKH�H[WHQW�WR�ZKLFK�WKH\�ZRXOG�LQFUHDVH�WRXULVP�QXPEHUV�RU�VSHQG�LQ�WKH+LJKODQGV� DQG� ,VODQGV�� � ,Q�JHQHUDO�� WKH�3URJUDPPH� IDYRXUHG� MRE� FUHDWLQJ�SURMHFWV�� DQG� IHZDUWV� IDFLOLWLHV� DFKLHYH� D� KLJK� UDWLR� RI� DGGLWLRQDO� MREV� FUHDWHG� �RU� UHWDLQHG�� WR� SXEOLF� FDSLWDOH[SHQGLWXUH�)URP� DQ� DUWV� GHYHORSPHQW� SHUVSHFWLYH�� WKH� H[LVWHQFH� RI� WKLV� (8� 3URJUDPPH� �� DQG� LWVVXFFHVVRU�� WKH� +LJKODQGV� DQG� ,VODQGV� 6SHFLDO� 7UDQVLWLRQDO� 3URJUDPPH� ������������ �� KDYHEHHQ�D�PL[HG�EOHVVLQJ���$OWKRXJK�VRPH�DUWV�SURMHFWV�WKDW�PLJKW�QRW�RWKHUZLVH�KDYH�EHHQ�IXOO\IXQGDEOH�IURP�RWKHU�VRXUFHV�PLJKW�KDYH�SURFHHGHG��WKH�3URJUDPPHV�DV�D�ZKROH�DEVRUE�D�ORWRI�RWKHU�SXEOLF�PDWFK� IXQGLQJ�� VRPH�RI�ZKLFK�PLJKW�RWKHUZLVH�KDYH�EHHQ�SXW� WRZDUGV� DUWVGHYHORSPHQW���3RWHQWLDOO\��WKH�QHZ�6SHFLDO�7UDQVLWLRQDO�3URJUDPPH�FRXOG�DVVLVW�PRUH�DUWV�DQG

Page 69: Microsoft Word - Westbrook master _1_.doc

��

FXOWXUDO� SURMHFWV� WKDQ� WKH� 2EMHFWLYH� �� 3URJUDPPH�� EXW� WKH� 0HDVXUHV� IURP� ZKLFK� IXQGLQJFRXOG� EH� GUDZQ� ZLOO� EH� YHU\� FRPSHWLWLYH�� FRYHULQJ� PDQ\� GLIIHUHQW� W\SHV� RI� FRPPXQLW\GHYHORSPHQW� SURMHFW�� DQG� WKH� 3URJUDPPH� DOVR� DJDLQ� KDV� D� VWURQJ� ELDV� WRZDUGV� GLUHFW� MREFUHDWLQJ� SURMHFWV� �DQG� WRZDUGV� SURMHFWV�ZLWK� D� KLJK� VWUDWHJLF� LPSRUWDQFH�� LQ� WKH� UHJLRQDO� RUORFDO�FRQWH[W��)URP�D� OLVW� RI� DOO�2EMHFWLYH���(5')�DSSURYDOV�� WKH� IROORZLQJ� KDYH� EHHQ� LGHQWLILHG� DV� DUWV�UHODWHG�

7RWDO�3URMHFW&RVW���� (5')���:HVWHUQ�,VOHV�)LOP�DQG�7HOHYLVLRQ�6WXGLR ��������� �������.LQW\UH�$UWV�DQG�5HFUHDWLRQDO�'HYHORSPHQW ������ ������([WHQVLRQ�WR�7LPHVSDQ�+HULWDJH�&HQWUH��+HOPVGDOH�LQFOXGLQJ�D�QHZ�DUW�JDOOHU\� ������� ������$Q�7REDU ������� ������7KH�3LFNDTXR\�3URMHFW���&LQHPD�DQG�:RUNVKRSV ��������� �������&DLWKQHVV�DQG�6XWKHUODQG�&LQHPD�DQG�&RPPXQLW\�)DFLOLW\ ��������� �������3URYLVLRQ�RI�1HZ�7HOHYLVLRQ�7UDLQLQJ�(TXLSPHQW�IRU�*DHOLF�79� ������� ������3URPRWLRQ�DQG�0DUNHWLQJ�RI�+LJKODQG�$UWLVWV ������� ������$Q�7XLUHDQQ�$UWV�&HQWUH ������� ������*DHOLF�7RXULVP�0DUNHWLQJ�DQG�7UDLQLQJ ������ ������*DHOLF�7RXULVP�'HYHORSPHQW�3URMHFW�����SKDVHV ������� ������7RWDOV ��������� ���������6RPH� RI� WKH� DERYH� SURMHFWV� DUH� QRW�ZKROO\� DUWV�UHODWHG�� DOWKRXJK� WKHUH�ZHUH� RWKHU� DVVLVWHGSURMHFWV� ZLWK� DQ� DUWV� GLPHQVLRQ� QRW� LQFOXGHG� DERYH� �� QRWDEO\� WKH� PDLQ� 3LFNDTXR\� &HQWUHGHYHORSPHQW��D�VSRUWV�FHQWUH�WKDW�FDQ�DOVR�SURYLGH�DQ�DXGLWRULXP�IRU�WKH�DUWV���ZKLFK�UHFHLYHG��������� LQ�(5')�� �7KLV�SURMHFW� DV� D�ZKROH� DOVR� UHFHLYHG� LQ� WKH� UHJLRQ�RI������PLOOLRQ� LQ0LOOHQQLXP�/RWWHU\�IXQGLQJ����������ZDV� DSSURYHG� WRZDUGV� WKH� SURSRVHG� ������PLOOLRQ�$Q�/DQQWDLU� GHYHORSPHQW�� EXWWKLV�GLG�QRW�SURFHHG�ZLWKLQ�WKH�WLPHVFDOH�RI�WKH�2EMHFWLYH���3URJUDPPH��DV�SUHYLRXVO\�QRWHGDW������DERYH��2XU� DVVHVVPHQW� RI� DJJUHJDWH� DUWV�UHODWHG� GLUHFW� MRE� FUHDWLRQ� IURP� WKH� DERYH�(5')�DVVLVWHGSURMHFWV�LV����IWH¶V��H[FOXGLQJ�WKH�PDUNHWLQJ�SURMHFWV��ZKRVH�HPSOR\PHQW�LPSDFW�LV�GLIILFXOWWR�TXDQWLI\����7KH�ILOP�DQG�WHOHYLVLRQ�VWXGLR�SURMHFW�ZDV�DOVR�H[SHFWHG�WR�VDIHJXDUG�D�IXUWKHU���MREV�7KH� IROORZLQJ� WUDLQLQJ� SURJUDPPHV� ZHUH� DZDUGHG� D� WRWDO� RI� ��������� LQ� (6)� XQGHU� WKH2EMHFWLYH���3URJUDPPH�3URMHFW�7LWOH ,PSOHPHQWLQJ�$JHQF\ (6)�$ZDUG <HDU7KHDWUHWUDLQ +LJKODQG�5HJLRQDO�&RXQFLO ������� ��7KHDWUHWUDLQ +LJKODQG�5HJLRQDO�&RXQFLO ������� ��

Page 70: Microsoft Word - Westbrook master _1_.doc

��

7KHDWUHWUDLQ -(7�����/WG ������� ��3URMHFW�7LWOH ,PSOHPHQWLQJ�$JHQF\ (6)�$ZDUG <HDU7KHDWUHWUDLQ -(7�����/WG ������� ��+1&�LQ�*DHOLF�3HUIRUPLQJ�$UWV 6DEKDO�0RU�2VWDLJ ������� ��7UDGLWLRQDO�0XVLF 7KXUVR�&ROOHJH ������� ��%XVLQHVV�0XVLF�&RXUVH 7KXUVR�&ROOHJH ������� ��$UW�DQG�&UHDWLYH�6WXGLHV 7KXUVR�&ROOHJH ������� ��7KHDWUHWUDLQ -(7�����/WG ������� ��+1&�'�LQ�*DHOLF�3HUIRUPLQJ�$UWV 6DEKDO�0RU�2VWDLJ ������� ��7UDGLWLRQDO�0XVLF�&RXUVH 7KXUVR�&ROOHJH ������� ��%XVLQHVV�0XVLF�&RXUVH 7KXUVR�&ROOHJH ������� ��0XVLF�3HUIRUPDQFH�IRU�WKH�+, 7KXUVR�&ROOHJH ������� ��7KHDWUHWUDLQ -(7�����/WG ������� ��7UDLQLQJ�IRU�WKH�0HGLD�DQG�3HUIRUPLQJ�$UWV 7KXUVR�&ROOHJH ������� ������ $QDO\VLV�RI�/HDGHU�,,�)XQGHG�3URMHFWV7KH�/HDGHU� ,,� 3URJUDPPH� ����������ZDV� GHFHQWUDOLVHG� WR� /(&� DUHD� OHYHO�� ZLWK� WKH� /(&¶VZRUNLQJ�LQ�SDUWQHUVKLS�ZLWK�RWKHU� UHOHYDQW�DJHQFLHV� WR�GHOLYHU� ORFDOO\�GHVLJQHG�SURJUDPPHVWKURXJK� /RFDO� $FWLRQ� *URXSV� �/$*¶V��� � (8� IXQGLQJ� IRU� WKH� ZKROH� 3URJUDPPH� WRWDOOHGDSSUR[LPDWHO\����PLOOLRQ���(DFK�/$*�GUHZ�XS�DQ�LQGLFDWLYH�EXVLQHVV�SODQ�DW�WKH�RXWVHW��XQGHUKHDGLQJV� WKDW�PDWFKHG� WKH� VFRSH�RI� WKH�/HDGHU� ,,�&RPPXQLW\� ,QLWLDWLYH�� DOWKRXJK� WKHUH�ZDVFRQVLGHUDEOH�IOH[LELOLW\�LQ�SUDFWLFH�LQ�PRVW�DUHDV�IRU�SURMHFWV�RI�VRFLDO�DQG�RU�HFRQRPLF�YDOXHZLWK�DQ�DUWLVWLF�GLPHQVLRQ�WR�EH�DZDUGHG�/HDGHU�,,�IXQGLQJ���DOEHLW�WKDW�WKLV�ZDV�VRPHWLPHV�DUHODWLYHO\� VPDOO� FRQWULEXWLRQ� WRZDUGV� D� SURMHFW� WKDW�PLJKW� KDYH� EHHQ� IXQGHG� E\� D� UDQJH� RIRUJDQLVDWLRQV���,Q�FRPSDULVRQ�ZLWK�WKH�2EMHFWLYH���3URJUDPPH��/HDGHU�,,�SURMHFWV�ZHUH�VPDOO�VFDOH�� DQG� DSSOLFDQWV� ZHUH� XQGHU� OHVV� SUHVVXUH� WR� H[DJJHUDWH� SRWHQWLDO� EHQHILWV� WR� JDLQDSSURYDO���7KH�:HVWHUQ�,VOHV�DQG�6N\H�RSHUDWHG�D�MRLQW�SURJUDPPH�$SSHQGL[���SURYLGHV�D�FRPSUHKHQVLYH�OLVW�RI�SURMHFWV�DVVLVWHG�XQGHU� WKH�/HDGHU�3URJUDPPHE\�/(&�DUHD���7KLV�FDQ�EH�VXPPDULVHG�DV�IROORZV�

1R��RI3URMHFWV 7RWDO�3URMHFW&RVW�/HDGHU�,,)XQGLQJ�6KHWODQG � ������� ������2UNQH\ � ������ ������:HVWHUQ�,VOHV�6N\H�DQG�/RFKDOVK �� ��������� �������&DLWKQHVV�DQG�6XWKHUODQG �� ������� ������5RVV�DQG�&URPDUW\ �� ������� �������,QYHUQHVV�DQG�1DLUQ��UXUDO� � ������� ������/RFKDEHU �� ������� ������0RUD\��%DGHQRFK�DQG�6WUDWKVSH\ � ������ ������$UJ\OO�DQG�WKH�,VODQGV �� ������� ������7RWDOV ��� ��������� �������

1RWH� &UDIW�SURMHFWV�DUH�H[FOXGHG�DERYH��DOWKRXJK�LQIRUPDWLRQ�RQ�WKHVH�LV�SURYLGHG�LQ�$SSHQGL[����,Q�VRPH�DUHDV��HJ��6KHWODQG��WKH�/HDGHU�,,�IXQGLQJ�WRWDO�ZRXOG�LQFUHDVH�VLJQLILFDQWO\�LIFUDIWV�ZHUH�LQFOXGHG�

Page 71: Microsoft Word - Westbrook master _1_.doc

��

7KLV�WDEOH�KLJKOLJKWV�x 7KH�ZLGH�GLIIHUHQFHV�EHWZHHQ�/(&�DUHDV�LQ�WKH�H[WHQW�WR�ZKLFK�/HDGHU�IXQGLQJ�ZDV�XVHG�WRIXQG�DUWV�UHODWHG�SURMHFWV��DOWKRXJK�WKH\�GLG�KDYH�ZLGHO\�YDU\LQJ�/HDGHU�DOORFDWLRQV��x 7KH�VXEVWDQWLDO�XVH�PDGH�RI� WKH�3URJUDPPH� LQ� WKH�:HVWHUQ� ,VOHV� DQG�6N\H� LQ� VXSSRUWLQJ� DODUJH� QXPEHU� RI� DUWV�UHODWHG� SURMHFWV�� �0DQ\� RI� WKHVH�ZRXOG� QRW� KDYH� KDSSHQHG�� RU�ZRXOGKDYH�EHHQ�UHGXFHG�LQ�VFDOH��ZLWKRXW�WKLV�IXQGLQJ�VRXUFH�x 7KH� YDOXH� RI� KDYLQJ� D� /HDGHU� 3URJUDPPH� WR� EDFN� XS� WKH� PRUH� HPSOR\PHQW�RULHQWHG2EMHFWLYH���3URJUDPPH�

0DQ\�RI�WKH�SURMHFWV�OLVWHG�LQ�$SSHQGL[���DOVR�UHFHLYHG�$UWV�/RWWHU\�IXQGLQJ�RU�6$&�³YRWHG´IXQGLQJ�,W�LV�LPSRUWDQW�WR�QRWH�WKDW�EHFDXVH�/($'(5�,,�SULRULWLVHG�LQQRYDWLYH�SURMHFWV��WKH�PDMRULW\�RIVXFFHVVIXO�SURMHFWV�DUH�PRUH�FRQFHUQHG�ZLWK�HQDEOLQJ�SHRSOH�WR�GHYHORS�WKHLU�VNLOOV�WR�GULYH�DSURMHFW� IRUZDUG�� WKDQ�ZLWK� WKH�FUHDWLRQ�RI� MREV�RU� UHYHQXH�� � ,Q�JHQHUDO�� WKH� VRFLDO� LPSDFW�RI/($'(5�,,�LV�PRUH�DSSURSULDWH�WR�DVVHVV�WKDQ�WKH�HFRQRPLF�EHQHILWV���/($'(5�,,�IXQGLQJ�LQ�PDQ\�FDVHV��KDV�KHOSHG�WR�FUHDWH�D�EHWWHU�SODFH�IRU�ORFDO�DUHD�UHVLGHQWV�E\�HPSRZHULQJ�DQGHQFRXUDJLQJ�FRPPXQLWLHV�WR�IXOILO�D�YLVLRQ���0DQ\�/($'(5�,,�VXSSRUWHG�SURMHFWV�KDYH�JRQHRQ�WR�EHFRPH�PXFK�ELJJHU�DQG�HFRQRPLFDOO\�VWURQJHU�YHQWXUHV��ZKLFK�ZLWKRXW�LQLWLDO�VXSSRUWIURP�/($'(5�,,��ZRXOG�QRW�KDYH�EHHQ�SRVVLEOH�7KH�IROORZLQJ�OLVW�SURYLGHV�PRUH�GHWDLO�RI�D�VHOHFWLRQ�RI�SURMHFWV�ZKLFK�UHFHLYHG�/($'(5�,,IXQGLQJ�EHWZHHQ������DQG������

/HZV�&DVWOH�&ROOHJH�7DLJK�&KHDUVDEKDJK���GHYHORSPHQW�RI�DUW�DQG�GHVLJQ�GLSORPD$UW�2Q�WKH�(GJH��WRWDO�IXQGLQJ����������/($'(5�,,�IXQGLQJ���������7KLV� SDUWQHUVKLS� SURMHFW� LQLWLDOO\�PHW�ZLWK�PXFK� F\QLFLVP� DQG�ZDV� GHHPHG� WR� EH� XQQHFHVVDU\�+RZHYHU�� WKURXJK� WKH� SHUVLVWHQFH� RI� WKH� WZR� PDLQ� SOD\HUV�� /HZV� &DVWOH� &ROOHJH� DQG� 7DLJK&KHDUVDEKDJK�0XVHXP�DQG�$UW�*DOOHU\�LQ�1RUWK�8LVW��DORQJ�ZLWK�VRPH�IXQGLQJ�IURP�/($'(5�,,LW� EHFDPH� D� VXFFHVVIXO� UHDOLW\�� � 7KH� FRXUVH� LV� IRU� RQH� \HDU� DQG� FDQ� WDNH� EHWZHHQ� �� DQG� ��VWXGHQWV���,W�KDV�EHHQ�GHVLJQHG�WR�EH�DV�IOH[LEOH�DV�SRVVLEOH�WR�FDWHU�IRU�YDULRXV�DJHV�DQG�DELOLWLHV�,W�KDV�EHHQ�KLJKO\�VXFFHVVIXO�LQ�DWWUDFWLQJ�VWXGHQWV��PDQ\�RI�ZKRP�XSRQ� FRPSOHWLRQ��VWDUW� WKHLURZQ�EXVLQHVVHV�RU�DWWHQG�DUW�FROOHJH����/($'(5�,,�SURYLGHG�VWDUW�XS�FRVWV�WR�HQDEOH�D�IHDVLELOLW\VWXG\�WR�EH�XQGHUWDNHQ�LQ������+,�$UWV�0,'$6���<RXWK�3HUIRUPHU�DQG�3URPRWHU�6FKHPH�WRWDO� IXQGLQJ����������/($'(5�,,� IXQGLQJ� ������� ,1(���������0%6(���������:HVWHUQ� ,VOHV��������&$6(��7RWDO��������7KLV� SURMHFW�ZDV� HVWDEOLVKHG� WR� DVVLVW� WKH� LPSOHPHQWDWLRQ� RI� D�<RXWK� 3HUIRUPHU� DQG� 3URPRWHU6FKHPH� ZKLFK� HQFRXUDJHV� \RXQJ� SHRSOH� ������� \HDUV� ROGV�� WR� GHYHORS� WKH� DSSURSULDWH� VNLOOVUHODWLQJ�WR�WKH�PXVLF�LQGXVWU\�� WKXV�HQVXULQJ�WKDW�\RXWK�EDQGV�JDLQ�D� WKRURXJK�XQGHUVWDQGLQJ�RIHDFK�DVSHFW�RI�WKH�EXVLQHVV�7KH� SURMHFW� SURYLGHV� YLWDO� VXSSRUW� DQG� DGYLFH� WR� \RXQJ� PXVLFLDQV� WKURXJK� ZRUNVKRSV�� � 7KLVLQFOXGHV�EXVLQHVV� WUDLQLQJ�ZRUNVKRSV�DV�ZHOO�DV�SUDFWLFDO�DGYLFH�IURP�WKRVH� µLQ� WKH�NQRZ¶�� �7RGDWH� LW�ZDV�EHHQ�D�YHU\�VXFFHVVIXO�SURMHFW�� ILOOLQJ�JDSV�ZKHUH� OLWWOH�RWKHU�SURYLVLRQ�H[LVWV�� �)RUH[DPSOH�� WKUHH� LQGLYLGXDOV�IURP�WKH�<RXWK�&DIp� LQ�,QYHUJRUGRQ�ZKR�KDYH�EHHQ� LQYROYHG� LQ� WKH

Page 72: Microsoft Word - Westbrook master _1_.doc

��

VFKHPH�KDYH�EHHQ�DFFHSWHG� WR�XQGHUWDNH� WKH�%$� LQ�PXVLF� DW�6WUDWKFO\GH�8QLYHUVLW\�� �0DQ\�RIWKRVH�WDNLQJ�SDUW�KDYH�EHHQ�JLYHQ�RSSRUWXQLWLHV�WR�SOD\�ZLWK�HVWDEOLVKHG�EDQGV��WR�SURGXFH�GHPRWDSHV�DQG�WR�KDYH�DFFHVV�WR�QDWLRQDO�UDGLR�VWDWLRQV�'XULQJ� ������ ���� \RXQJ� SHRSOH� ZHUH� WUDLQHG� DQG� �� FRQFHUWV� ZHUH� RUJDQLVHG� ZLWK� DQ� DYHUDJHDXGLHQFH�RI�������7KURXJKRXW������WKLV�LV�OLNHO\�WR�LQFUHDVH�8LVW������*DHOLF�0XVLF�&HQWUH�WRWDO�IXQGLQJ����������/($'(5�,,�IXQGLQJ���������7KLV�SURMHFW� LQYHVWLJDWHG� WKH� IHDVLELOLW\�RI� HVWDEOLVKLQJ� D� GHGLFDWHG� FHQWUH� IRU� WUDGLWLRQDO�PXVLFDQG� WKH� *DHOLF� ODQJXDJH�� LQFRUSRUDWLQJ� DQ� DUFKLYH� RI� ORFDO� PDWHULDO�� WHDFKLQJ� IDFLOLWLHV� DQG� DUHFRUGLQJ�VWXGLR�LQ�6RXWK�8LVW�/($'(5�,,�SURYLGHG�DVVLVWDQFH�IRU�D�IHDVLELOLW\�VWXG\�WR�EH�SURGXFHG�WR�ORRN�DW�WKH�SRWHQWLDO�RIVXFK�DQ� LGHD�� � ,I� WKLV�SURMHFW�SURJUHVVHV� WKLV�ZLOO� UHVXOW� LQ� WKH�JHQHUDWLRQ�RI�HPSOR\PHQW� LQ� WKHORQJHU�WHUP�DQG�JUHDWHU�VRFLDO�DQG�HFRQRPLF�EHQHILWV�WR�WKH�DUHD�)HLV�5RLV�WRWDO�IXQGLQJ�UHFHLYHG����������/($'(5�,,����������������������)HLV�5RLV�LV�FRQVLGHUHG�WR�EH�RQH�RI�WKH�PRVW�VXFFHVVIXO�RI�DOO�WKH� )HLVHDQ�DQG�RYHU�WKH�\HDUV�KDVSOD\HG�D�VLJQLILFDQW�SDUW�LQ�UDLVLQJ�DZDUHQHVV�RI�+LJKODQG�FXOWXUH���)HLV�5RLV�KHOSV�FRPPXQLWLHVWR�DSSUHFLDWH�WKHLU�FXOWXUH�DQG�WR�EHFRPH�LQYROYHG�� �,W�DOVR�KHOSV�WR�GHYHORS�WKH�VNLOOV�RI�\RXQJSHRSOH�WR�HQKDQFH�WKHLU�SHUIRUPDQFHV�DQG�LQFUHDVH�FRQILGHQFH���/($'(5�,,�IXQGLQJ�VLQFH�����KDV�EHHQ�LPSRUWDQW�LQ�WKLV�2YHU� WKH� ODVW� IRXU�\HDUV�� IRXU�SDUW�WLPH�� WHPSRUDU\� FR�RUGLQDWRUV�KDYH�EHHQ�HPSOR\HG�� WRJHWKHUZLWK�WKH�'HYHORSPHQW�2IILFHU���2I�WKHVH�IRXU��WZR�KDYH�JRQH�RQ�WR�PDNH�VXFFHVVIXO�FDUHHUV�LQ�WKHDUWV�� DQG� WKH� )HLV� FDQ� EH� FRQVLGHUHG� WR� KDYH� EHHQ� D� VWHSSLQJ� VWRQH�� � +RZHYHU�� IRU� HDFK� )HLVSURJUDPPH��ZHOO�RYHU�����PXVLFLDQV� WDNH�SDUW�� DOO� RI� ZKRP� UHFHLYH�SD\PHQW�� �7KURXJKRXW� WKH)HLV� 5RLV� SURJUDPPHV�� PDQ\� KXQGUHGV� RI� SHRSOH� KDYH� WDNHQ� SDUW�� UHDFKLQJ� DXGLHQFHV� RIWKRXVDQGV�� �7KHUH� LV� DOVR� D� VWURQJ� WRXULVP�HOHPHQW�� SDUWLFXODUO\� IURP�RWKHU� DUHDV�ZLWK� D� VWURQJ&HOWLF�WUDGLWLRQ��VXFK�DV�,UHODQG�6WUD\�7KHDWUH�&RPSDQ\�WRWDO�IXQGLQJ������������/($'(5�,,���������6WUD\�7KHDWUH�&RPSDQ\�LV�EDVHG�LQ�$UJ\OO�DQG�UHFHLYHG�/($'(5�,,�IRU�WZR�VHSDUDWH�SURMHFWV��WKH�WRXU�RI�D�SURGXFWLRQ�FDOOHG�³&ROXPFLOOH´�DQG�WKH�SURGXFWLRQ�RI�5RPHR�DQG�-XOLHW��ZKLFK�DOVRKDG� D� ZLGHU� RXWUHDFK� HOHPHQW� DQG� SURYLGHG� ZRUN� SODFHPHQWV� DQG� WUDLQLQJ� ZRUNVKRSV�� � 6WUD\7KHDWUH� &RPSDQ\� HPSOR\V� D� GLUHFWRU� DQG� FUHDWHV� VLJQLILFDQW� HPSOR\PHQW� RSSRUWXQLWLHV� RQ� DSURMHFW�EDVLV�

7KH�SRWHQWLDO�LQWHUQDWLRQDO�GLPHQVLRQ�RI�/HDGHU�,,�ZDV�UHDOLVHG�WR�D�OLPLWHG�H[WHQW��LI�DW�DOO��LQPRVW� DUHDV� �� D� QRWDEOH� H[FHSWLRQ� EHLQJ�5RVV� DQG�&URPDUW\¶V� &HOWLF� &RQQHFWLRQV� OLQN�ZLWK,UHODQG�

Page 73: Microsoft Word - Westbrook master _1_.doc

��

���� 62&,$/�,03$&76���� 7KH�$UHD�&DVH�6WXGLHV$VSHFWV�RI�WKH�VRFLDO�LPSDFW�RI�DUWV�DFWLYLW\�LQ�WKH�+LJKODQGV�DQG�,VODQGV�DUH�DQDO\VHG�LQ�WKLV6HFWLRQ�WKURXJK��L��WZR�DUHD�FDVH�VWXGLHV���LL��LGHQWLI\LQJ�NH\�WKHPHV�IURP�RXU�TXHVWLRQQDLUHVXUYH\�RI�YHQXHV��RUJDQLVDWLRQV��JURXSV�DQG�LQGLYLGXDOV���LLL��GLVFXVVLRQV�ZLWK�UHSUHVHQWDWLYHVRI� VXSSRUW� DJHQFLHV� ZLWKLQ� WKH� UHJLRQ�� DQG� �LY�� PDWHULDO� IURP� RWKHU� UHSRUWV� WKDW� ZH� KDYHUHYLHZHG�7KH� WZR� &DVH� 6WXG\� DUHDV�� 6WRUQRZD\� DQG� &DLWKQHVV� �RQH� LVODQG� DQG� RQH� PDLQODQG��� ZHUHVHOHFWHG�DV�KDYLQJ�IHDWXUHV�WKDW�ZLOO�DSSO\�PRUH�EURDGO\�LQ�WKH�+LJKODQGV�DQG�,VODQGV���%RWKDUHDV�KDYH� VWUHQJWKV� DQG�ZHDNQHVVHV�KLVWRULFDOO\� LQ� WHUPV�RI� DUWV� GHYHORSPHQW� DQG� DFWLYLW\�6HYHUDO�DUWV�RUJDQLVDWLRQV�LQ�HDFK�DUHD�ZHUH�LQWHUYLHZHG�XVLQJ�D�OLVW�RI�TXHVWLRQV�WKDW�VRXJKWWR�DVVHVV�WKH�RUJDQLVDWLRQ¶V�RSLQLRQ�RQ�

x ,WV�RZQ�VWDWH�RI�KHDOWK�x 7KH�IDFWRUV�WKDW�KDYH�LQIOXHQFHG�LW�x 7KH� VWDWH� RI� WKH� DUWV� JHQHUDOO\� LQ� WKH� +LJKODQGV� DQG� ,VODQGV�DQG� WKH� IDFWRUV� WKDW� KDYHLQIOXHQFHG�LW��x :KHUH�WKH�JUHDWHVW�LPSDFW�LV�PDGH�DQG�KRZ�

2UJDQLVDWLRQV�ZHUH�DVNHG�WR�FRQVLGHU�WKHLU�GHYHORSPHQW�RYHU�WKH�SDVW�WHQ�\HDUV��LH��WKH�SHULRGVLQFH�WKH�ODVW�6RFLDO�DQG�(FRQRPLF�6WXG\�RI�WKH�$UWV�LQ�WKH�+LJKODQGV�DQG�,VODQGV���DOWKRXJKQRW�DOO�ZHUH�LQ�RSHUDWLRQ�DW�WKDW�WLPH����� 6WRUQRZD\(LJKW�RUJDQLVDWLRQV�ZHUH�LQWHUYLHZHG�

x $Q�/DQQWDLU���9LVXDO�$UWV��SHUIRUPDQFH�x +HEULGHDQ�&HOWLF�)HVWLYDO���)HVWLYDO��WUDGLWLRQDO�PXVLF�x )HLV�QDQ�&RLVLU���7UDGLWLRQDO�PXVLF�x (RODV���1HZ�PHGLD�x 3RLQW�3OD\HUV���'UDPD�x 6WRUQRZD\�7KHVSLDQV���'UDPD�x ,VOHV�)0���&RPPXQLW\�5DGLR�x 1DWLRQDO�*DHOLF�$UWV�$JHQF\��1*$$����'HYHORSPHQW�DJHQF\�*HQHUDOO\�� WKHUH� ZDV� D� IHHOLQJ� IURP� LQWHUYLHZHHV� WKDW� DOWKRXJK� DUWV� DFWLYLW\� KDG� QRWGLPLQLVKHG�RYHU�WKH�SDVW�WHQ�\HDUV�LW�KDG�QRW�UHDOLVHG�LWV�IXOO�SRWHQWLDO��GXH�ODUJHO\�WR�D�ODFN�RISXEOLF�VHFWRU�IXQGLQJ�VXSSRUW�6SHFLILFDOO\��LW�ZDV�DFNQRZOHGJHG�WKDW�LQFUHDVHG�DZDUHQHVV�RI�*DHOLF�DQG�UHFRJQLWLRQ�RI�WKLVIURP�IXQGLQJ�ERGLHV�KDG�EHHQ�SHUKDSV�WKH�PRVW�VLJQLILFDQW�FKDQJH�LQ�WKH�SDVW�GHFDGH�7KH�FRQWLQXLQJ�JURZWK�RI�WKH�IHLV�PRYHPHQW�DQG�WKH�RQJRLQJ�ZRUN�RI�WKH�1*$3�ZHUH�HDFKFLWHG�DV�VLJQLILFDQW��DOWKRXJK�LW�ZDV�IHOW�WKDW�WKH�DUULYDO�RI�WKH�*DHOLF�%URDGFDVWLQJ�&RPPLWWHH

Page 74: Microsoft Word - Westbrook master _1_.doc

��

�&&*�� DQG� WKH� FRQVHTXHQW� IXQGLQJ� RSSRUWXQLWLHV� DQG� SURILOH�UDLVLQJ� RI� WKH� DUHD� KDG� EHHQH[WUHPHO\�LPSRUWDQW�,W� ZDV� DOVR� DFNQRZOHGJHG� WKDW� WKH� DUWV� VHFWRU� LV� LQIOXHQFHG� KHDYLO\� E\� WKH� FXOWXUDO� DQGKLVWRULFDO� FRQWH[W� RI� WKH� WRZQ� DQG� WKH� LVODQG� RI� /HZLV�� � ,Q� SDUWLFXODU�� WKH� VWURQJ� LQIOXHQFHUHOLJLRQ�SOD\V�ZLWKLQ�PDQ\�DVSHFWV�RI�FRPPXQLW\�OLIH�LPSDFWV�GLUHFWO\�DQG��DOO�IHOW��QHJDWLYHO\RQ�WKH�DUWV���,Q�DGGLWLRQ��WKHUH�DUH�YDULRXV�HFRQRPLF�DQG�RWKHU�FKDOOHQJHV�RI�LVODQG�OLIH�ZKLFKDOVR�DIIHFW�WKH�DUWV�±�IRU�H[DPSOH��LW�LV�H[SHQVLYH�WR�DWWUDFW�YLVLWLQJ�SURIHVVLRQDOV�WR�SHUIRUP�RUWHDFK�,W�ZDV�IHOW�WKDW�VXSSRUW�IURP�WKH�SXEOLF�VHFWRU�ZDV�DW�EHVW�SDWFK\�DQG�DW�ZRUVW�XQLQIRUPHG�DQGXQLQWHUHVWHG�� �7KH�6$&� IXQGLQJ� SURFHGXUH�ZDV� IHOW� WR� EH� XQGXO\� EXUHDXFUDWLF� DQG� OHQJWK\�6XSSRUW� IURP�&RPKDLUOH�QDQ�(LOHDQ�6LDU� �&Q(6��ZDV� JHQHUDOO\� FRQVLGHUHG� WR� EH� SRRU�� DQG:HVWHUQ�,VOHV�(QWHUSULVH��:,(��WR�EH�TXLWH�KHOSIXO��DOWKRXJK�OLPLWHG�LQ�WKH�UDQJH�RI�DUHDV�WKDWLW�FDQ�DVVLVW�7KH� &DUU� 3ODQ� LQ� WKH� ODWH� ����V� HQYLVDJHG� PDMRU� DUWV� GHYHORSPHQW� LQ� 6WRUQRZD\�� EXW� LWUHPDLQHG�XQLPSOHPHQWHG�DV�D�UHVXOW�RI�WKH�QHZ�JRYHUQPHQW¶V�SULRULWLHV���$V�D�UHVXOW��WKH�$Q/DQQWDLU�JDOOHU\�ZDV�SUREDEO\�VHHQ�DV�D�VWRSJDS�LQ�WKH�ODWH�����V���+RZHYHU��WKH�VFRSH�RI�WKH&DUU� 3ODQ� KDV� QHYHU� EHHQ� UH�YLVLWHG�� �7KH� FUHDWLRQ� RI� D� QHZ�SXUSRVH�EXLOW�$Q�/DQQWDLU� KDVEHHQ�LQ�WKH�SODQQLQJ�VWDJH�IRU�VRPH�ILYH�\HDUV��DQG�D�VFDOHG�GRZQ�SURMHFW�KDV�UHFHQWO\�EHHQSXW�IRUZDUG��IROORZLQJ�WKH�IDLOXUH�RI�D�PRUH�DPELWLRXV�SURMHFW� WR�REWDLQ� IXOO� IXQGLQJ�GXH� WREXLOGLQJ�FRVW�HVWLPDWHV�EHLQJ�IDU�LQ�H[FHVV�RI�WKH�/RWWHU\�JUDQW�RIIHUHG���7KLV�SURMHFW�LV�VHHQE\�PDQ\� DUWV� RUJDQLVDWLRQV� DV� WKH�PRVW� LPSRUWDQW� DUWV� GHYHORSPHQW�� LQ� WHUPV� RI� VRFLDO� DQGHFRQRPLF�LPSDFW��WKDW�6WRUQRZD\�DQG�WKH�:HVWHUQ�,VOHV�FRXOG�KDYH�7KHUH�KDYH�EHHQ�JRRG�GHYHORSPHQWV� LQ� WKH�DUWV� LQ� WKH�SDVW� WHQ�\HDUV� �� WKH�+HEULGHDQ�&HOWLF)HVWLYDO��WKH�GHYHORSPHQW�RI�QHZ�PHGLD��WKH�RQJRLQJ�GHYHORSPHQWDO�ZRUN�RI�1*$$��DQG�WKHDUULYDO�RI�,VOHV�)0���0DQ\�RI�WKH�RUJDQLVDWLRQV�ZKLFK�KDYH�EHHQ�DURXQG�6WRUQRZD\�IRU�RYHU���\HDUV�KRZHYHU���LH��$FDLU��$Q�/DQQWDLU��WKH�FRPPXQLW\�GUDPD�JURXSV���IHHO�DV�WKRXJK�WKH\KDYH� UHDFKHG� D� SODWHDX� RI� JURZWK� IURP� ZKLFK� WKH\� KDYH� QRW� EHHQ� DEOH�� RU� HQFRXUDJHG� WRGHYHORS� E\� SXEOLF� ERGLHV� DQG� RWKHU� DUWV� DJHQFLHV�� � 7KHUH� LV� D� JURZLQJ� VHQVH� RI� D� FXOWXUDOFRPPXQLW\�LQ�WKH�WRZQ�WKDW�GHILQHV�LWVHOI�PRUH�LQ�WHUPV�RI�WKH�µFUHDWLYH�LQGXVWULHV¶�UDWKHU�WKDQµDUWV¶���,W�ZDV�HVWLPDWHG�ODVW�\HDU�WKDW�LQ�6WRUQRZD\�LWVHOI�WKHUH�ZHUH�����IXOO�WLPH�DQG����SDUW�WLPH�MREV�LQ�WKLV�VHFWRU�7KHUH� LV� XQGRXEWHGO\� JUHDW� SRWHQWLDO� WR� GHYHORS� D� YHU\� VLJQLILFDQW� DQG� XQLILHG� FUHDWLYHLQGXVWULHV�VHFWRU�LQ�6WRUQRZD\��RI�ZKLFK�WKH�DUWV�FRXOG�EH�DQ�LPSRUWDQW�SDUW���7KH�$Q�/DQQWDLUGHYHORSPHQW� LV� FRQVLGHUHG� NH\� ERWK� WR� UHOHDVLQJ� LQFUHDVHG� UHVRXUFHV� IRU� WKH� WRZQ¶V� DUWVFRPPXQLW\��DQG�WR�UDLVLQJ�WKH�FRQILGHQFH�DQG�SURILOH�RI�WKDW�FRPPXQLW\�ZLWKLQ�WKH�WRZQ�DQGWKH�:HVWHUQ�,VOHV�� �6XFK�GHYHORSPHQW�ZRXOG�KHOS� WKH�DUHD� WR�DWWUDFW�QHZ�EXVLQHVV� VWDUWV�E\SHRSOH�DEOH�WR�FKRRVH�WKHLU�EXVLQHVV�EDVH�RQ�TXDOLW\�RI�OLIH�FULWHULD��DV�ZHOO�DV�KHOSLQJ�WR�UHWDLQVNLOOHG�\RXQJ�SHRSOH�WKURXJK�WKH�LPSURYHPHQW�LQ�FXOWXUDO�IDFLOLWLHV�%HORZ��ZH�VXPPDULVH�WKH�NH\�SRLQWV�PDGH�E\�WKH�6WRUQRZD\�EDVHG�RUJDQLVDWLRQV�LQWHUYLHZHGWR�WKH�TXHVWLRQV�VKRZQ�

+RZ�KHDOWK\�ZRXOG�\RX�VD\�\RXU�RUJDQLVDWLRQ�LV�DW�WKH�PRPHQW"

Page 75: Microsoft Word - Westbrook master _1_.doc

��

*HQHUDOO\��RUJDQLVDWLRQV�IHOW�WKH\�ZHUH�LQ�D�JRRG�VWDWH�RI�KHDOWK�DW�WKH�PRPHQW�ZLWK�VRPHRI�WKH�QHZHU�RQHV�JURZLQJ�DW�D�UDWH�ZKLFK�WKH\�DUH�EHJLQQLQJ�WR�ILQG�GLIILFXOW�WR�FRSH�ZLWK��³,W� LV�GLIILFXOW� WR�H[SDQG�DW� WKLV� UDWH� ��ZH� DUH� ORRNLQJ� DW� DSSRLQWLQJ�SRVWV�QRZ�DV� LW� LVFXUUHQWO\�UXQ�E\�YROXQWHHUV´�6RPH�RI� WKH�PRUH�HVWDEOLVKHG�RUJDQLVDWLRQV� ILQG� LW�GLIILFXOW� WR�HQMR\�VXVWDLQHG�H[LVWHQFHUDWKHU� WKDQ� GHYHORSPHQW� �� ³7KH� IDFW� WKDW� ZH� DUH� VWLOO� DOLYH� LV� IDLUO\� UHPDUNDEOH� LQ� WKHFLUFXPVWDQFHV´�+DV�WKH�VLWXDWLRQ�JRW�EHWWHU�RU�ZRUVH�LQ�UHFHQW�\HDUV"7KH� H[SHULHQFH� RI� RQH� RI� WKH� PRUH� HVWDEOLVKHG� RUJDQLVDWLRQV� VHHPV� WR� KDYH� HFKRHV� IRURWKHUV���³7KH�RUJDQLVDWLRQ�JUHZ�TXLFNO\�LQ�WKH�HDUO\�\HDUV�WKHQ�UHDFKHG�D�SODWHDX���OLPLWHGE\�WKH�VL]H�RI�WKH�SUHPLVHV�VR�QHHGHG�WR�H[SDQG���QHHG�WR�FDWFK�XS�SK\VLFDOO\�ZLWK�WKH�VL]HRI�WKH�RUJDQLVDWLRQ´�2Q�WKH�ZKROH�WKH�VLWXDWLRQ�VHHPV�WR�KDYH�JRW�EHWWHU�IRU�DOO�JURXSV��DOWKRXJK�WKHUH�DUH�QRFRQVLVWHQW� WKHPHV� �� WKH� UHDVRQV� UDQJH� IURP� VXFFHVVIXO� JUDQW� DSSOLFDWLRQV� WR� EHWWHUUHODWLRQVKLSV�ZLWK�ORFDO�WUDGHUV��WR�JDLQLQJ�,L3�VWDWXV�:KDW��LQ�UHFHQW�\HDUV��KDV�KDG�WKH�JUHDWHVW�LPSDFW�RQ�\RXU�RUJDQLVDWLRQ"3HUKDSV� XQVXUSULVLQJO\� PRVW� UHVSRQVHV� LQYROYHG� VRXUFLQJ� ILQDQFH� DQG� WKH� HDVH� RUGLIILFXOW\�E\�ZKLFK�WKLV�KDV�EHHQ�DFKLHYHG��7KH�6$&�FDPH�LQ�IRU�FULWLFLVP�IRU�WKH�QDWXUHRI�LWV�IXQGLQJ�SURFHVV���³WRUWXRXV´���DQG�WKH�VHHPLQJ�ODFN�RI�VWUDWHJLF�DSSURDFK�WR�WKH�W\SHRI�SURMHFWV�WKDW�ZHUH�VXSSRUWHG�LQ�WKH�DUHD�1*$$�ZDV� IUHTXHQWO\�FLWHG�DV�EHLQJ�DQ� LQIOXHQFH� �DQG�RFFDVLRQDO� ILQDQFLDO� VXSSRUW�� DVZHUH� WKH�RWKHU�PDLQ�*DHOLF�DJHQFLHV� ��)HLVHDQ�QDQ�*DLGKHDO��&&*�DQG� ORFDO�0RG��7KH+HEULGHDQ� &HOWLF� )HVWLYDO� ZDV� IUHTXHQWO\� UHIHUUHG� WR� DV� DQ� LPSRUWDQW� ORFDO� DUWVGHYHORSPHQW�+RZ�GR�\RX�WKLQN�\RXU�RUJDQLVDWLRQ�PDNHV�LWV�JUHDWHVW�LPSDFW�ORFDOO\"7KH� RUJDQLVDWLRQV� IHOW� WKDW� WKHLU� LPSDFW� UDQJHG� IURP� EHLQJ� WKH� FDWDO\VW� IRU� ³D� PXFKKHDOWKLHU� DUWV� VFHQH´� WR� WKH� SUDJPDWLF� ³JLYLQJ� LVODQGHUV� JRRG� YDOXH� HQWHUWDLQPHQW´� RU³SURYLGLQJ�LQIRUPDWLRQ�DQG�HQWHUWDLQPHQW´�6RPH�ZHUH�DZDUH�RI�WKH�FXUUHQW�HFRQRPLF�LPSDFW�WKH\�KDYH�RQ�WKH�ORFDO�FRPPXQLW\�DQGDUH�VHHNLQJ�WR�GHYHORS�WKLV���³:H�ZRXOG�OLNH�WR�KHOS�SXW�WKH�DUHD�RQ�WKH�FXOWXUDO�PDS���DORW�RI�IRON�FRPLQJ�EDFN�WR�GLVFRYHU�WKHLU�URRWV���ZH¶G�OLNH�WR�GHYHORS�FXOWXUDO�WRXULVP´�:KDW¶V�\RXU�RUJDQLVDWLRQ¶V�UROH�LQ�WKH�ORFDO�DUWV�FRPPXQLW\"0DLQO\�WKLV�ZDV�VHHQ�DV�SURPRWLQJ�WKHLU�RZQ�SDUWLFXODU�DUWIRUP�V�DOWKRXJK�VRPH�SHUFHLYHGD�EURDGHU�ORFDO�FRQWULEXWLRQ�2QH�IHOW�LW�ZDV�³D�IRUXP�IRU�DUWLVWV�DQG�H[KLELWLRQV���D�SURPRWHU�DQG�DQ�HQDEOHU´��DQRWKHUVRXJKW� ³WR� HVWDEOLVK� SDUWQHUVKLSV� ZLWKLQ� WKH� ORFDO� DUWV� FRPPXQLW\´� ZKLOH� D� WKLUG� IHOW� LWFRXOG�KHOS�³EROVWHU�FRQILGHQFH�LQ�WKH�DUWV�FRPPXQLW\´�

Page 76: Microsoft Word - Westbrook master _1_.doc

��

&DQ�\RX�TXDQWLI\�WKH�VRFLDO�LPSDFW�\RXU�RUJDQLVDWLRQ�PDNHV"1RQH�RI�WKH�RUJDQLVDWLRQV�KDG�SUHYLRXVO\�DWWHPSWHG�WR�TXDQWLI\�WKHLU�VRFLDO� LPSDFW�RWKHUWKDQ�DQHFGRWDOO\��³0DNHV�D�JUHDW�LPSDFW�RQ�VRFLDO�OLIH�RI�IRON�LQYROYHG´��7KHUH� ZDV� DQ� DZDUHQHVV�� WKURXJK� WDONLQJ� WR� DXGLHQFHV� DQG� YLVLWRUV�� RI� WKHLU� UHVSHFWLYHZRUWK� ORFDOO\�� 7KLV� ZDV� SHUFHLYHG� DV� EHLQJ� SDUWLFXODUO\� VWURQJ� LQ� WHUPV� RI� WUDLQLQJ� DQGHGXFDWLRQ� �� ³VKRZV� FKLOGUHQ� ZKDW� WKH\� FDQ� DFKLHYH´� �� DQG� WKH� DELOLW\� WR� DFW� DV� DVSULQJERDUG�IRU�IXWXUH�FDUHHUV�LQ�WKH�DUWV���³$�QXPEHU�RI�\RXQJ�IRON�KDYH�JRQH�WKURXJK�XVLQWR�WKH�DUWV�SURIHVVLRQDOO\´�:KDW�VRUW�RI�VXSSRUW�GR�\RX�JHW�IURP�WKH�SXEOLF�VHFWRU"5HVSRQVHV� YDULHG� EXW� LQ� JHQHUDO� WKHUH� ZDV� D� IHHOLQJ� WKDW� SXEOLF� VXSSRUW� FRXOG� EH� D� ORWEHWWHU��SDUWLFXODUO\�IURP�WKH�ORFDO�DXWKRULW\���³2Q�D�JHQHUDO�OHYHO��WKH�DZDUHQHVV�FRXOG�EHEHWWHU��EXW� LW�KDV� LPSURYHG�VLQFH� WKH�VWDUW�� �7KH�FRXQFLO� LV�QRZ�EHJLQQLQJ� WR� UHDOLVH� WKDWWKHUH�DUH�MREV�DQG�WKH�HFRQRPLF�LPSDFW�RI�WKH�DUWV´�9LHZV�RQ�6$&�ZHUH�PL[HG��VRPH�VDZ�WKHP�DV�VXSSRUWLYH��RWKHUV�GLG�QRW��EXW�DOO�IRXQGWKHLU�GHDOLQJV�ZLWK�6$&�YHU\�EXUHDXFUDWLF��³$Q�H[SHQVLYH�SURFHVV�WR�JR�WKURXJK�DQG�ZHKDYH�ORVW�DOO�RXU�DFFXPXODWHG�VDYLQJV´���:,(�ZHUH�JHQHUDOO\�VHHQ�DV�V\PSDWKHWLF�DQG�DEOHWR�KHOS�RXW�ZLWKLQ�WKH�SDUDPHWHUV�RI�WKHLU�IXQGLQJ�JXLGHOLQHV�'R�\RX�WKLQN�\RXU�RUJDQLVDWLRQ�UHDOLVHV�LWV�IXOO�SRWHQWLDO"1R� RUJDQLVDWLRQ� IHOW� LW� ZDV� FXUUHQWO\� UHDOLVLQJ� LWV� IXOO� SRWHQWLDO�� 0RVW� IHOW� WKH\� DUHUHVWULFWHG�E\�WKH�DYDLODELOLW\�RI�YROXQWHHU�WLPH�DQG�E\�IXQGLQJ�:KDW�KDV�EHHQ�WKH�JUHDWHVW�LPSDFW�RQ�WKH�DUWV�LQ�WKLV�DUHD�LQ�UHFHQW�\HDUV"7KH�SRVLWLYH�LPSDFWV�FLWHG�ZHUH�YDULRXV���1*$$��WKH�+HEULGHDQ�&HOWLF�)HVWLYDO�DQG�$Q/DQQWDLU�0RVW� IHOW� WKDW� WKH� DUULYDO� RI� WKH� QHZ�$Q�/DQQWDLU�ZRXOG� EH� D� YHU\� LPSRUWDQW� GULYHU� IRUIXWXUH�DUWV�GHYHORSPHQW�6LPLODUO\�� QHJDWLYH� LPSDFWV� ZHUH� IHOW� WR� EH� WKH� SRVVLELOLW\� RI� QRW� JHWWLQJ� WKH� QHZ� $Q/DQQWDLU��DQG�WKH�DGYHUVH�LPSDFW�RI�WKH�UHOLJLRXV�EDFNJURXQG�LQ�WKH�DUHD�+RZ�KHDOWK\�DUH�WKH�DUWV�LQ�WKLV�DUHD�DW�WKH�PRPHQW"$OPRVW�DOO�RUJDQLVDWLRQV�IHOW�WKH�DUWV�WR�EH�LQ�D�KHDOWK\�VWDWH�DW�WKH�PRPHQW���WKH�JURZWK�LQWKH�QXPEHU�RI�RUJDQLVDWLRQV�LQ�WKH�SDVW�WHQ�\HDUV�ZDV�PHQWLRQHG�DV�HYLGHQFH�RI�WKLV��$OVRFLWHG�ZDV�WKH�LQFUHDVLQJ�QXPEHU�RI�SDUWLFLSDQWV�DW�HYHQWV�VXFK�DV�WKH�IHLV��DQG�DXGLHQFHVIRU�WKH�QHZ�HYHQWV�DQG�IHVWLYDOV�7KH�DUULYDO�RI�7RVJ��WKH�*DHOLF�GUDPD�FRPSDQ\��ZDV�PHQWLRQHG�DV�D�SRVLWLYH�LQIOXHQFH�RQWKHDWUH�LQ�WKH�DUHD�2Q� WKH�QHJDWLYH�VLGH�� WKHUH�ZHUH� IUHTXHQW� UHIHUHQFHV� WR� WKH� LPSDFW�RI� WKH�)UHH�&KXUFK� �³WKH�FRPPXQLW\�LV�HQWUHQFKHG�LQ�UHOLJLRQ��DQG�DUWV�DQG�UHOLJLRQ�GRQ¶W�JR���PDQ\�IRON�JLYH

Page 77: Microsoft Word - Westbrook master _1_.doc

��

XS�SOD\LQJ�PXVLFDO�LQVWUXPHQWV�EHFDXVH�RI�UHOLJLRQ���5HOLJLRQ�LV�VXSSUHVVLQJ�WKH�MR\�RI�WKHDUWV���,W�LV�D�UHDO�SUREOHP�LQ�WKLV�FRPPXQLW\´�+DV�WKLV�JRW�EHWWHU�RU�ZRUVH�LQ�UHFHQW�\HDUV"*HQHUDOO\� �EXW�QRW�XQDQLPRXVO\�� LW�ZDV� IHOW� WKDW� WKLQJV�KDG�JRW�EHWWHU� LQ� UHFHQW�\HDUV�� ,WZDV� IHOW� WKDW� SUHYLRXVO\� DUWV� SURYLVLRQ� KDG� EHHQ� ³IDLUO\� VKDPEROLF´� EXW� QRZ� LW� LV� EHWWHURUJDQLVHG�DQG�FRRUGLQDWHG��6SHFLILFDOO\�� ³KDUGO\�D�FKLOG�XVHG� WR�SOD\�DQ� LQVWUXPHQW��QRZ�PRVW�GR�� �7KHUH� DUH�PRUHDQG�PRUH�EDQGV�HPHUJLQJ´�$OWKRXJK� LW� LV� LPSURYLQJ� LW� ZDV� DOVR� IHOW� WKDW� WKHUH� ZDV� VWLOO� TXLWH� D� ELW� RI� URRP� IRUGHYHORSPHQW���³7KLQJV�PLJKW�QRW�EH�ZRUVH��EXW�WKH\�DUH�QRW�DV�JRRG�DV�WKH\�FRXOG�EH´�,V�WKHUH�D�VHQVH�RI�DUWLVWLF�FRPPXQLW\�ORFDOO\"7KH� UHVSRQVHV� KHUH� ZHUH� YDULDEOH� �� VRPH� IHOW� WKHUH� ZDV� D� JURZLQJ� VHQVH� RI� DUWLVWLFFRPPXQLW\� EXW� LW�ZDV� VWLOO� DW� D� FRPSDUDWLYHO\� ORZ� OHYHO��2WKHUV� IHOW� WKHUH�ZDV� ³QR� UHDOMRLQHG�XS�DUWLVWLF�FRPPXQLW\´�DV�WKHUH�SHUKDSV�KDG�EHHQ�LQ�SUHYLRXV�\HDUV��7KHUH�VHHPV�WREH�JUHDWHU�DZDUHQHVV�RI�WKH�UDQJH�RI�HYHQWV�DQG�RUJDQLVDWLRQV�WKDW�FXUUHQWO\�H[LVW�EXW�QRIRUPDO��RU�HYHQ�LQIRUPDO��QHWZRUNLQJ�EHWZHHQ�WKHP�:KDW�DUH�WKH�DUWV�WUDLQLQJ�DQG�HGXFDWLRQ�RSSRUWXQLWLHV�OLNH"³7KHUH� DUH� IHZ� RSSRUWXQLWLHV´� ZDV� WKH� PRVW� FRPPRQ� YLHZ� DOWKRXJK� HDFK� RUJDQLVDWLRQZDV�DEOH�WR�FLWH�DW�OHDVW�RQH�WUDLQLQJ�DQG�RU�HGXFDWLRQ�LQLWLDWLYH�WKDW�ZDV�SHUWLQHQW�WR�WKHLUSDUWLFXODU�DUHD�%RWK�1*$$�DQG�/HZV�&DVWOH�&ROOHJH�ZHUH�PHQWLRQHG�DV�XVHIXO�FXUUHQW�SURYLGHUV�$UH�\RX�RSWLPLVWLF�RU�SHVVLPLVWLF�DERXW�WKH�IXWXUH�RI�WKH�DUWV�ORFDOO\"$OO�ZHUH� RSWLPLVWLF� DERXW� WKH� IXWXUH�� DOEHLW� LQ� D� TXDOLILHG� VHQVH� XVXDOO\� DVVRFLDWHG�ZLWKIXQGLQJ�� 6RPH� PHQWLRQHG� WKH� LQFUHDVLQJ� LQYROYHPHQW� RI� \RXQJ� SHRSOH� DV� WKHLU� PDLQUHDVRQ�IRU�RSWLPLVP��RWKHUV�IHOW�WKH�SXEOLF�VHFWRU�ZHUH�EHJLQQLQJ�WR�DSSUHFLDWH��KRZHYHUVORZO\��WKH�EHQHILWV�DQG�PHULWV�RI�WKH�DUWV�VHFWRU�

���� &DLWKQHVV,QWHUYLHZV�ZHUH�KHOG�ZLWK�VHYHQ�RUJDQLVDWLRQV�x )qLV�&KDWDLEK���7UDGLWLRQDO�PXVLF�x *UH\�&RDVW�7KHDWUH�&RPSDQ\���7KHDWUH�x /\WK�$UWV�&HQWUH���9LVXDO�DUWV��3HUIRUPDQFH�xx 1RUWK�/DQGV�&UHDWLYH�*ODVV ��'HVLJQ��FUDIWV�x 7KXUVR�3OD\HUV���'UDPD�x 7KXUVR�/LYH�0XVLF���0XVLF�x 1RUWKODQGV�)HVWLYDO���&RPELQHG�DUWV�

Page 78: Microsoft Word - Westbrook master _1_.doc

��

*HQHUDOO\��WKHUH�ZDV�D�PRRG�RI�FDXWLRXV�RSWLPLVP�DPRQJVW�LQWHUYLHZHHV�GHVSLWH�D�XQLYHUVDOYLHZ�WKDW�SXEOLF�VHFWRU�IXQGLQJ�FRXOG�EH�PXFK�LPSURYHG���7KH�IUXVWUDWLRQ�ZLWK�SXEOLF�VHFWRUIXQGLQJ� VWHPV�� LQ� SDUWLFXODU�� IURP� WKH� ODFN� RI� VXSSRUW� IURP� +LJKODQG� &RXQFLO� �DQG� WKHLUFHVVDWLRQ�RI� VXSSRUW� IRU� WKH�&DLWKQHVV�$UWV�$VVRFLDWLRQ��� DQG� WKH�EXUHDXFUDWLF�QDWXUH�RI� WKH6FRWWLVK� $UWV� &RXQFLO� IXQGLQJ� SURFHVV�� � +RZHYHU�� &DLWKQHVV� DQG� 6XWKHUODQG� (QWHUSULVH�&$6(��DUH�YLHZHG�DV�YHU\�VXSSRUWLYH�DQG�HDV\�WR�ZRUN�ZLWK�7KHUH�ZDV�DFNQRZOHGJHPHQW�WKDW�WKH�KHDOWK�RI�WKH�DUWV�VHFWRU�LQ�WKH�DUHD�LV�KHDYLO\�LQIOXHQFHGE\� WKH� SUHYDLOLQJ� HFRQRPLF� VLWXDWLRQ�� � 'XULQJ� WKH� JURZWK� SHULRG� RI� 'RXQUHD\� D� ORW� RI� DUWVDFWLYLW\� GHYHORSHG� LQ� WKH� 7KXUVR� DUHD� ZLWK� WKH� LQIOX[� RI� µLQFRPHUV¶�� � 7KHUH� ZDV� DOVRDFNQRZOHGJHPHQW� RI� WKH� FKDQJLQJ� GHPRJUDSKLFV� RI� WKH� DUHD� �� DQ� DJHLQJ� SRSXODWLRQ� ZLWKVLJQLILFDQW�QXPEHUV�RI�\RXQJ�SHRSOH�OHDYLQJ�WKH�DUHD���DQG�WKH�LQIOXHQFH�WKLV�KDV�RQ�WKH�QDWXUHDQG�H[WHQW�RI�DUWV�DFWLYLW\�WKDW�FDQ�WDNH�SODFH�$OO� LQWHUYLHZHHV�PHQWLRQHG�WKH�ULYDOU\�EHWZHHQ�WKH�WZR�PDLQ�WRZQV��:LFN�DQG�7KXUVR��DQGKRZ� GHVWUXFWLYH� WKDW� KDG� EHHQ� JHQHUDOO\�� DV� ZHOO� DV� IRU� WKH� DUWV�� � 7KHUH� ZDV� D� IHHOLQJ� WKDWEHFDXVH� RI� ORFDO� FLYLF� IHXGLQJ� WKH� DUHD� KDG� PLVVHG� RXW� RQ� D� QXPEHU� RI� LQLWLDWLYHV�� � 2QHSRWHQWLDO� FDVXDOW\�RI� WKLV� ULYDOU\�ZDV� IHOW� WR�EH� D� QHZ� DUWV� YHQXH�� �7KLV� KDV� EHHQ� GLVFXVVHGORFDOO\�IRU�VRPH�WLPH��ZLWK�7KXUVR�LGHQWLILHG�DV�WKH�PRVW�DSSURSULDWH�ORFDWLRQ��D�YLHZ�WKDW�ZDVEDFNHG�XS�E\� WKH�+LJKODQG�&RXQFLO�$UWV�6WUDWHJ\�� �+RZHYHU� FLYLF� GLVDJUHHPHQW� KDV� VR� IDUSUHYHQWHG�WKH�LGHD�IURP�GHYHORSLQJ�IXUWKHU�7KH� GHYHORSPHQW� RI� WKH� 1RUWK� +LJKODQG� �IRUPHUO\� 7KXUVR�� &ROOHJH� LV� VHHQ� DV� DQ� H[FLWLQJRSSRUWXQLW\��SDUWLFXODUO\�ZLWK�LWV�UROH�DV�D�8+,�SDUWQHU�,Q�WHUPV�RI�WKH�DUWV�VHFWRU�RYHU�WKH�SDVW�WHQ�\HDUV��WKHUH�KDYH�EHHQ�VLJQLILFDQW�DUULYDOV�RQ�WKHVFHQH� �� LQ� SDUWLFXODU� WKH� 1RUWKODQGV� )HVWLYDO�� WKH� *UH\� &RDVW� 7KHDWUH� &RPSDQ\� DQG� 1RUWK/DQGV�&UHDWLYH�*ODVV���7KHVH�QHZ�LQLWLDWLYHV�LQGLFDWH�D�KHDOWK\�VWDWH�RI�GHYHORSPHQW��EXW�HDFKRUJDQLVDWLRQ� VWLOO� KDV� QR� VHFXUH� IXQGLQJ� URRW�� � 7KHUH� LV� D� VHQVH�� KRZHYHU�� WKDW� DUWVRUJDQLVDWLRQV�WKDW�KDYH�EHHQ�DURXQG�IRU�RYHU�WHQ�\HDUV�KDYH�QRW�PRYHG�IRUZDUG�DQG�KDYH�EHHQPDUNLQJ� WLPH�� GXH� ODUJHO\� WR� VWDQGVWLOO� IXQGLQJ� DQG� DQ� DJHLQJ� DXGLHQFH� ZLWK� IHZ� QHZPHPEHUV���7KLV�LV�IHOW�HYHQ�DW�WKH�/\WK�$UWV�&HQWUH�ZKLFK��ZKHQ�LW�RSHQHG��DQG�XS�WR�WHQ�\HDUVDJR���ZDV�FRQVLGHUHG�WR�EH�YHU\�PXFK�DW�WKH�IRUHIURQW�RI�SUHVHQWLQJ�FKDOOHQJLQJ�ZRUN�LQ�ERWKYLVXDO�DQG�SHUIRUPDQFH�DUWV���$OWKRXJK�WKH�DQQXDO�SURJUDPPH�PD\�KDYH�ORVW�VRPH�RI�LWV�HGJH�WKH�&HQWUH�FRQWLQXHV�WR�ILOO�D�QLFKH�LQ�WKH�&DLWKQHVV���DQG�+LJKODQG���DUWV�LQIUDVWUXFWXUH�7KHUH� LV� XQGRXEWHGO\� DQ� XQGHUO\LQJ� VHQVH� RI� IUDJLOLW\� DERXW� WKH� DUWV� LQIUDVWUXFWXUH� LQ&DLWKQHVV���,W�LV�EXLOW�ODUJHO\�RQ�WKH�JRRGZLOO�DQG�FRPPLWPHQW�RI�LQGLYLGXDOV��DQG�DSSHDUV�WRKDYH�QR�VHFXUH�ORQJ�WHUP�XQGHUSLQQLQJ�IURP�WKH�SXEOLF�VHFWRU���7KHUH�LV�D�ODFN�RI�D�FRKHUHQWGHYHORSPHQW�VWUDWHJ\�DQG��SHUKDSV�DV�D�FRQVHTXHQFH�RI�WKLV��QR�IHHOLQJ�RI�D�XQLILHG�&DLWKQHVVDUWV�FRPPXQLW\�7KH�UHVSRQVHV�IURP�WKH�&DLWKQHVV�LQWHUYLHZHHV�WR�VSHFLILF�TXHVWLRQV�DUH�VXPPDULVHG�EHORZ�

+RZ�KHDOWK\�ZRXOG�\RX�VD\�\RXU�RUJDQLVDWLRQ�LV�DW�WKH�PRPHQW"0RVW� IHOW� WKH\� ZHUH� LQ� D� YHU\� KHDOWK\� VWDWH� DW� WKH� PRPHQW�� SDUWLFXODUO\� ZLWK� UHJDUG� WRDWWUDFWLQJ�\RXQJ�SHRSOH�

Page 79: Microsoft Word - Westbrook master _1_.doc

��

+DV�WKH�VLWXDWLRQ�JRW�EHWWHU�RU�ZRUVH�LQ�UHFHQW�\HDUV")RU�WKH�ORQJHU�HVWDEOLVKHG�RUJDQLVDWLRQV�WKLQJV�DSSHDU�WR�KDYH�UHPDLQHG�PXFK�WKH�VDPH�LQUHFHQW�\HDUV��+RZHYHU�PRVW�RI�WKH�PRUH�UHFHQWO\�HVWDEOLVKHG�RUJDQLVDWLRQV�IHOW�WKLQJV�KDGLPSURYHG��6RPH�ZHUH�UHOLDQW�RQ�RQJRLQJ�IXQGLQJ�DSSOLFDWLRQV�IRU�SURMHFW�RU�$GYDQFHPHQWIXQGV� �� RWKHUV� KDG� UHFHLYHG� VXSSRUW� IURP� UHJLRQDO� RU� QDWLRQDO� ERGLHV� WKDW� KDG� HQDEOHGWKHP�WR�GHYHORS�:KDW��LQ�UHFHQW�\HDUV��KDV�KDG�WKH�JUHDWHVW�LPSDFW�RQ�\RXU�RUJDQLVDWLRQ",Q� PRVW� FDVHV� WKH� JUHDWHVW� LPSDFW� KDG� EHHQ� LQ� WKH� DUHD� RI� DWWUDFWLQJ� �RU� QRW�� IXQGLQJ�([SHULHQFHV�YDULHG�ZLWK� UHJDUG� WR�6$&��+,(� DQG� RWKHU� UHJLRQDO� ERGLHV� �LH� )HLVHDQ� QDQ*DLGKHDO���2QJRLQJ�GLVFXVVLRQV�WR�WU\�DQG�DWWUDFW�DQ�DUWV�FHQWUH�ZHUH�DOVR�PHQWLRQHG�+RZ�GR�\RX�WKLQN�\RXU�RUJDQLVDWLRQ�PDNHV�LWV�JUHDWHVW�LPSDFW�ORFDOO\"7KH�RUJDQLVDWLRQV�IHOW�WKHLU�VWUHQJWKV�KDG�EHHQ�LQ�GHYHORSLQJ�D�OR\DO�DXGLHQFH�ORFDOO\�RYHUWKH�\HDUV��SURYLGLQJ�³D�PRUH�IULHQGO\��LPPHGLDWH�DQG�VRFLDO�IXQFWLRQ´��7KH\�DOVR�IHHO�WKH\KDYH�UDLVHG�DZDUHQHVV�RI�WKH�DUWV��DV�ZHOO�DV�SURYLGLQJ�HQWHUWDLQPHQW��ORFDOO\�$QRWKHU� LPSRUWDQW� IXQFWLRQ� PDQ\� RUJDQLVDWLRQV� IHOW� WKH\� SURYLGHG� ZDV� LQ� HGXFDWLRQDOWHUPV���³7KH�FRQILGHQFH�RI� ORFDO�\RXQJVWHUV� LQ� WKHLU�RZQ�VRFLDO� DQG�PXVLFDO�DELOLW\� LV�DUHIOHFWLRQ�RI�RXU�ZRUN´�7KHUH�ZDV�DOVR�VRPH�UHFRJQLWLRQ�RI�WKH�RUJDQLVDWLRQV¶�HFRQRPLF�LPSDFW�:KDW¶V�\RXU�RUJDQLVDWLRQ¶V�UROH�LQ�WKH�ORFDO�DUWV�FRPPXQLW\"3HUFHSWLRQV�DQG�DVSLUDWLRQV�YDULHG�IURP�D�YHU\�VSHFLILF�GHVLUH�WR�SURYLGH�D�FHUWDLQ�DPRXQWRI� WRXULQJ�RU�YLVLWLQJ�DUWV�SURGXFW�HDFK�\HDU�� WR�D� UHFRJQLWLRQ� WKDW�³3UHYLRXV�JHQHUDWLRQVKDG�QRWKLQJ��>ZH�KDYH@�ILOOHG�D�JDS´�2QH�RUJDQLVDWLRQ� IHOW� LW� KDG� SOD\HG� ³D� SLRQHHULQJ� UROH� IRU� YLVXDO� DUWV� �� FUHDWLQJ� SRSXODUDZDUHQHVV� RI�PRGHUQ� DUW� LQ�&DLWKQHVV´�ZKLOH� DQRWKHU� IHOW� LW� ³SURYLGHG� D� XQLTXH� IDFLOLW\ZLWKLQ�6FRWODQG�DQG�DWWUDFWHG�VLJQLILFDQW�QDPHV�WR�WHDFK�KHUH´�,Q� JHQHUDO� WKHUH� ZDV� D� YLHZ�� ERWK� H[SOLFLW� DQG� LPSOLFLW�� DPRQJ� WKH� H[LVWLQJ� DUWVRUJDQLVDWLRQV�WKDW�³:H�FUHDWH�DQ�RSSRUWXQLW\�WKDW�GRHVQ¶W�RWKHUZLVH�H[LVW´�&DQ�\RX�TXDQWLI\�WKH�VRFLDO�LPSDFW�\RXU�RUJDQLVDWLRQ�PDNHV"1R�TXDQWLILDEOH�GDWD�ZDV�DYDLODEOH��KRZHYHU�DQHFGRWDOO\�LW�ZDV�IHOW�WKH�PDLQ�LPSDFW�ZDVLQ�SURYLGLQJ�VRPH�SDUWLFLSDQWV�ZLWK�D�FRQGXLW�WR�ZRUNLQJ�SURIHVVLRQDOO\�LQ�WKH�DUWV�,Q�DGGLWLRQ�VRPH�IHOW�WKDW�³2WKHU�SDUWLFLSDQWV�FRPH�EDFN�WR�WKH�DUHD�DQG�FRQWULEXWH�WR�WKHORFDO�FXOWXUDO�OLIH´�

Page 80: Microsoft Word - Westbrook master _1_.doc

��

:KDW�VRUW�RI�VXSSRUW�GR�\RX�JHW�IURP�WKH�SXEOLF�VHFWRU"*HQHUDOO\�SXEOLF�VHFWRU�ILQDQFLDO�VXSSRUW�ZDV�IHOW�WR�EH�JRRG��SDUWLFXODUO\�IURP�6$&��ZKRKDYH�VXSSRUWHG�DW�OHDVW�WKUHH�RI�WKH�RUJDQLVDWLRQV�WR�D�VLJQLILFDQW�GHJUHH�&$6(�ZHUH�DOVR�IHOW� WR�EH�XQGHUVWDQGLQJ�DQG�VXSSRUWLYH� ��³>&$6(@�KDYH�D�V\PSDWKHWLFHDU�DQG�DUH�NHHQ�WR�VSHQG�PRQH\�ORFDOO\´�+LJKODQG�&RXQFLO�ZHUH�QRW�FRQVLGHUHG�VXSSRUWLYH��7KHUH�ZDV�VRPH�FRQFHUQ�DW�WKH�ORVV�RIWKH�&DLWKQHVV�$UWV�$VVRFLDWLRQ�IXQGLQJ�DQG�WKDW�ERG\¶V�VXEVHTXHQW�JUDQW�JLYLQJ�SRZHUV��³$OWKRXJK�WKH�DPRXQWV�ZHUH�VPDOO��WKH\�GLG�KHOS�PDLQWDLQ�DQG�FUHDWH�VRPH�VPDOO�JURXSV�'RHVQ¶W�DIIHFW�ODUJHU�JURXSV�VR�PXFK���7KLV�ZLOO�KDYH�DQ�DGYHUVH�VRFLDO�LPSDFW´�'R�\RX�WKLQN�\RXU�RUJDQLVDWLRQ�UHDOLVHV�LWV�IXOO�SRWHQWLDO"$OO� RUJDQLVDWLRQV� IHOW� WKH\� ZHUH� QRW� UHDOLVLQJ� WKHLU� IXOO� SRWHQWLDO� �� ³,W� FRXOG� DOZD\V� JRELJJHU�DQG�EHWWHU´��0DLQ�UHDVRQV�IRU�ODFN�RI�GHYHORSPHQW�ZHUH�IXQGLQJ��³$QRWKHU�������SHU�\HDU�ZRXOG�PDNH�D�KXJH�GLIIHUHQFH´��DQG�³E\�WKH�IDFW�WKDW�LW�LV�UXQ�E\�YROXQWHHUV�DQGWKDW�WLPH�LV�OLPLWHG´�:KDW�KDV�EHHQ�WKH�JUHDWHVW�LPSDFW�RQ�WKH�DUWV�LQ�WKLV�DUHD�LQ�UHFHQW�\HDUV"9DULRXV� VXJJHVWLRQV�ZHUH�PDGH�� VRPH�RI�ZKLFK�ZHUH�ZLWK� UHVSHFW� WR� WKH�JHQHUDO� VRFLDODQG� HFRQRPLF� FRQWH[W� RI� WKH� DUHD�� LH� ³&DLWKQHVV� LV� KDHPRUUKDJLQJ�\RXQJ�SHRSOH� DOO� WKHWLPH���7KHUH�DUH�QR�HFRQRPLF�PHDVXUHV�WR�SUHYHQW�WKLV´��DV�ZHOO�DV�³3HRSOH�DUH�FKDQJLQJWKHLU�H[SHFWDWLRQV�RI�VWDQGDUGV�DQG�TXDOLW\´�7KHUH� ZDV� DOVR� D� OHVV� SURQRXQFHG� YLHZ� WKDW� WKH� SXEOLF� VHFWRU� ERGLHV� DUH� RYHUO\EXUHDXFUDWLF�WR�GHDO�ZLWK��DQG�VXJJHVWLRQV�WKDW�WKLV�LV�ZK\�³VRPH�SHRSOH�QR�ORQJHU�DSSO\WR�+,(�DQG�/(&V´�+RZ�KHDOWK\�DUH�WKH�DUWV�LQ�WKLV�DUHD�DW�WKH�PRPHQW",QWHUHVWLQJO\��YLHZV�RQ�WKLV�ZHUH�GLYLGHG�PRUH�RU�OHVV�HTXDOO\��1HZHU�RUJDQLVDWLRQV�WHQGHGWR�EHOLHYH�WKDW�WKH�DUWV�LQ�WKH�DUHD�ZHUH�³1RW�YHU\�KHDOWK\���WRWDOO\�XQGHYHORSHG´�ZKLOH�WKHPRUH�HVWDEOLVKHG�JURXSV�IHOW�WKDW�WKH�DUWV�ZHUH�³9HU\�KHDOWK\���7KH�DUWV�DUH�IORXULVKLQJ�LQ&DLWKQHVV´�7ZR� VSHFLILF� REVHUYDWLRQV� UHJDUGHG� WKH� ODFN� RI� DQ� DUWV� VSDFH� LQ� &DLWKQHVV� WR� DFW� DV� DFDWDO\VW�IRU�DUWV�GHYHORSPHQW��DQG�WKH�ODFN�RI��D�VWUDWHJLF�DSSURDFK�WR�GHYHORSPHQW���³:HGRQ¶W�UHDOO\�KDYH�DUWV�GHYHORSPHQW�LQ�&DLWKQHVV���:H�QHHG�VRFLDO�UHJHQHUDWLRQ�WKURXJK�WKHDUWV´�+DV�WKLV�JRW�EHWWHU�RU�ZRUVH�LQ�UHFHQW�\HDUV"$JDLQ� YLHZV�ZHUH� VSOLW��ZLWK� QHZHU� RUJDQLVDWLRQV� XQFRQYLQFHG� WKDW� WKLQJV�ZHUH� JHWWLQJEHWWHU��EHOLHYLQJ�WKDW�WKH�ODVW�WHQ�\HDUV�KDYH�EHHQ�³XS�DQG�GRZQ´��7KH�HVWDEOLVKHG�JURXSVKRZHYHU�WHQG�WR�IHHO�WKLQJV�DUH�PXFK�EHWWHU�DQG�³0XFK�ULFKHU�DUWLVWLFDOO\�WKDQ�LW�ZDV�����\HDUV�DJR���7KH�RQO\�SUREOHP�LV�WKH�ODFN�RI�HQFRXUDJHPHQW�IURP�WKH�&RXQFLO´�

Page 81: Microsoft Word - Westbrook master _1_.doc

��

,V�WKHUH�D�VHQVH�RI�DUWLVWLF�FRPPXQLW\�ORFDOO\"7KHUH� ZDV� OLWWOH� HYLGHQFH� RI� DQ� DUWLVWLF� FRPPXQLW\� �� WKH� VWURQJHVW� H[SUHVVLRQ� ZDV� RQHYLHZ�WKDW�³7KHUH�LV�SUREDEO\�D�NLQVKLS´�EXW�PRVW�IHOW�WKDW�DFWLYLWLHV�DQG�JURXSV�DUH�³D�ELWIUDJPHQWHG��ODUJHO\�GXH�WR�WKH�:LFN�7KXUVR�GLYLGH´�:KDW�DUH�WKH�DUWV�WUDLQLQJ�DQG�HGXFDWLRQ�RSSRUWXQLWLHV�OLNH"7KLV�ZDV�IHOW�WR�EH�OLPLWHG�WR�WKH�VFKRROV�DQG�WKH�&ROOHJH��DOWKRXJK�RQH�RUJDQLVDWLRQ�XVHV³IRUPHU� SDUWLFLSDQWV� DV� WXWRUV� �� WKLV� DOORZV� WKHP� WR� SDVV� RQ� WKHLU� RZQ� VNLOOV� DV� ZHOO� DVOHDUQLQJ�WHDFKLQJ�VNLOOV´�$UH�\RX�RSWLPLVWLF�RU�SHVVLPLVWLF�DERXW�WKH�IXWXUH�RI�WKH�DUWV�ORFDOO\"$OO�ZHUH�RSWLPLVWLF�DQG�SRVLWLYH�DERXW�WKH�LQFUHDVLQJ�UROH�WKHLU�RUJDQLVDWLRQ�FRXOG�LQWHQGVWR� SOD\� �� SDUWLFXODUO\� LI� WKH\� JHW� D� OLWWOH� H[WUD� VXSSRUW�� 2WKHUV� ZHUH� RSWLPLVWLF� EHFDXVH³\RXQJ�SHRSOH�DUH�EULJKW�DQG�DPELWLRXV´�7KHUH�ZHUH� FDXWLRQDU\�QRWHV�� KRZHYHU�� SDUWLFXODUO\� UHJDUGLQJ� WKH�KDUP�RI� WKH� SHUFHLYHG:LFN�7KXUVR�GLYLGH��$OVR� D� FRQFHUQ� UHJDUGLQJ� DJH�RI�SDUWLFLSDQWV� �� ³3HVVLPLVWLF� LQ� RQHVHQVH�WKDW� WKHUH� LV�DQ�DJHLQJ�PHPEHUVKLS�DQG�SDUWLFLSDWLRQ�� �'HPRJUDSKLFDOO\�&DLWKQHVVKDV�DQ�DJHLQJ�SRSXODWLRQ��EXW�:LFN�LV�SDUWLFXODUO\�GHDG´�$Q\�JHQHUDO�SRLQWV"0RVW� RI� WKHVH� FRQFHUQHG� WKH� SDUWLFXODU� EDFNJURXQG� RI� WKH� RUJDQLVDWLRQ�� DOWKRXJK� WKHUHZHUH�VRPH�SRLQWV�ZLWK�D�EURDGHU�LPSOLFDWLRQ��(VVHQWLDOO\�WKHVH�ZHUH�x 7KH�JHQHUDO�PRUDOH�ORFDOO\�LV�QRW�DOZD\V�KLJK��QRW�D�KXJH�EXVLQHVV�EDVH��x 7KLQJV�KDYH�ERWWRPHG�RXW�DV�IDU�DV�WKH\�FDQ�JR�x ,QFUHDVH�LQYHVWPHQW�DW�PLFUR�OHYHO�LQVWHDG�RI�FHQWUDO�EXUHDXFUDFLHV�x ,I�DQ�DUWV�GHYHORSPHQW�ZRUNHU�SRVW�ZDV�FUHDWHG��EXW�RQ�D�EURDGHU�DUWV�EDVH��LW�ZRXOG�EH�YHU\SRVLWLYH�IRU�WKH�DUHD�x 1RW�ZHOO�GLVSRVHG�WR�GLVSDULW\�RI�IXQGLQJ�EHWZHHQ�ORFDO�RUJDQLVDWLRQV�

Page 82: Microsoft Word - Westbrook master _1_.doc

��

���� 6XPPDU\�RI�WKH�0DLQ�3RLQWV�IURP�WKH�&RQVXOWDWLRQ7KHPHV�IURP�WKH�DUHD�FDVH�VWXGLHV�DQG�RWKHU�VXUYH\�HYLGHQFH�WKDW�UHIOHFW�ZLGHU�H[SHULHQFH�LQWKH�+LJKODQGV�DQG�,VODQGV�LQFOXGH�

x 7KH�GLYHUVLW\�RI�H[SHULHQFH�RI�DUWV�RUJDQLVDWLRQV��H[SDQVLRQ�LQ�VRPH��FRQWUDFWLRQ�LQ�RWKHUV�FKDQJHV�RI�HPSKDVLV�RYHU�WLPH��HWF��x &RQWLQXDO�VWUXJJOH�WR�REWDLQ�VXIILFLHQW�IXQGLQJ�WR�VXUYLYH�GHYHORS�x 0DQ\�H[DPSOHV�RI�VXFFHVVIXO�HQJDJHPHQW�RI�\RXQJ�SHRSOH�LQ�DFWLYLWLHV��QRWDEO\�WKURXJK�WKHIHLVHDQ��x 9HU\�KLJK�OHYHOV�RI�FRPPLWPHQW�RYHU�D�ORQJ�SHULRG�RI�WLPH�E\�NH\�SHRSOH�x /LPLWHG� QHWZRUNLQJ� ZLWKLQ� DQG� EHWZHHQ� DUHDV�� H[FHSW� ZKHUH� D� FR�RUGLQDWRU� ZLWK� WKLVVSHFLILF�IXQFWLRQ�LV�HPSOR\HG�WKURXJK�D�QHZ�LQLWLDWLYH�

$� PDMRU� SHUFHLYHG� SUREOHP� KDV� EHHQ� WKH� GLIILFXOW\� /RFDO� $XWKRULWLHV� KDYH� KDG� LQ� PRYLQJHIIHFWLYHO\� IURP� EHLQJ� GLUHFW� SURYLGHUV� WR� HQDEOHUV� DV� WKH� IXQGLQJ� DYDLODEOH� IRU� WKHP� WRGHYHORS� QHZ� IDFLOLWLHV� �RU� HYHQ� PDLQWDLQ� H[LVWLQJ� IDFLOLWLHV�� KDV� VKUXQN� GUDVWLFDOO\�� � (YHQZKHUH�ZHOO�LQWHQWLRQHG�$UWV�6WUDWHJLHV�KDYH�EHHQ�SURGXFHG��WKHUH�KDV�RIWHQ�EHHQ�DQ�LQDELOLW\WR�GHOLYHU�SDUWLFXODU�SURMHFWV�WKURXJK�ODFN�RI�IXQGLQJ��DQG�VRPHWLPHV�D� ODFN�RI�FRPPLWPHQWIURP� ORFDO� &RXQFLOORUV� DQG�RU� RIILFLDOV��� � $OVR�� FRPSHWLWLYH� /RWWHU\� IXQGLQJ� LV� VRPHWLPHVUHTXLUHG� WR�SURJUHVV� D�SURMHFW�� DQG� DSSOLFDWLRQV�E\� ORFDO� DXWKRULWLHV� DQG� RWKHU� RUJDQLVDWLRQVKDYH�QRW�DOZD\V�EHHQ�VXFFHVVIXO�/(&�DVVLVWDQFH� LV�ZHOO�DSSUHFLDWHG��EXW� LV�JHQHUDOO\� OLPLWHG� WR�QHZ� LQLWLDWLYHV� WKDW� LW� FDQ�EHGLIILFXOW�WR�VXVWDLQ�DIWHU�SXPS�SULPLQJ�IXQGLQJ�H[SLUHV����� .H\�$VSHFWV�RI�6RFLDO�,PSDFW�LQ�WKH�+LJKODQGV�DQG�,VODQGV,Q�WKH�³(FRQRPLF�DQG�6RFLDO�,PSDFW�RI�WKH�$UWV´��0DFND\�&RQVXOWDQWV���������WKH�ZULWHU�7RP0F*UDWK�ZURWH�H[WHQVLYHO\�RQ�WKH�HIIHFW�WKDW�LQYROYHPHQW�LQ�WKH�DUWV�KDG�RQ�SHRSOH¶V�OLYHV�RQD� GD\� WR� GD\� EDVLV�� � ,W� UHPDLQV� DQ� HDUO\�� DQG� SHUKDSV� XQLTXH�� DWWHPSW� WR� DQDO\VH� WKH� VRFLDOLPSDFW�RI�WKH�DUWV�LQ�D�UXUDO�DUHD�RI�6FRWODQG��DOEHLW�IURP�D�SHUVRQDO�SHUVSHFWLYH�7ZR�PRUH�UHFHQW�VWXGLHV�KDYH�EHJXQ� WR�FRQVLGHU� WKH�VRFLDO� LPSDFW�RI� WKH�DUWV� LQ�TXDOLWDWLYHUDWKHU� WKDQ�TXDQWLWDWLYH� WHUPV�� � ,Q�������&RPHGLD�VWXGLHG�IRXU�DUWV�SURMHFWV�DURXQG� WKH�8.�RQH�RI�ZKLFK�ZDV�WKH�IHLV�PRYHPHQW�LQ�WKH�+LJKODQGV�DQG�,VODQGV���,Q�������%ODNH�6WHYHQVRQ/WG�VWXGLHG�WKH�µ7KH�5ROH�RI�WKH�$UWV�LQ�5HJHQHUDWLRQ¶�LQ�6FRWODQG�IRU�WKH�6FRWWLVK�([HFXWLYHDQG�6$&���2QH�RI�WKH�IRXU�FDVH�VWXG\�DUHDV�ZDV�WKH�&HRODV�6XPPHU�6FKRRO��6RXWK�8LVW�$OO� WKUHH� VWXGLHV� IRFXV� RQ� WKH� SHUVRQDO� HQULFKPHQW� WKDW� DUWV� SDUWLFLSDQWV� DQG� DXGLHQFHPHPEHUV� FDQ� JDLQ�� � ,Q� WKH� &RPHGLD� 6WXG\� �� ³1RUWKHUQ� /LJKWV�� 7KH� 6RFLDO� ,PSDFW� RI� WKH)HLVHDQ´� ������� �� WKH� H[DPSOH� ZDV� FLWHG� RI� ZRPHQ� LQ� 6RXWK� 8LVW� JDLQLQJ� VXIILFLHQWFRQILGHQFH�LQ�WKHLU�DGPLQLVWUDWLYH�DELOLWLHV�DQG�VNLOOV�JDLQHG�WKURXJK�UXQQLQJ�WKH�IHLV�WR�VWDUWXS�D�VHSDUDWH�FRPPHUFLDO�HQWHUSULVH�DQG�DSSO\�IRU�VXEVWDQWLDO�(XURSHDQ�IXQGLQJ��ZKLFK�WKH\UHFHLYHG��

Page 83: Microsoft Word - Westbrook master _1_.doc

��

7RP� 0F*UDWK� IUHTXHQWO\� QRWHG� WKDW� WKH� UROH� RI� WKH� DUWV� ZLWKLQ� +LJKODQG� FRPPXQLWLHV� ZDVPRUH�SURPLQHQW�DQG�PRUH�LPSRUWDQW��IURP�D�VRFLDO�SRLQW�RI�YLHZ��WKDQ�HOVHZKHUH�LQ�6FRWODQG�³«WKH� DUWV� GR� QRW� H[LVW� VLPSO\� LQ� WHUPV� RI� VXSSO\� DQG� GHPDQG� LQ� WKH� +LJKODQGV� DQG,VODQGV«� �WKH\�� DUH� DOVR� EHLQJ� XWLOLVHG� LQ� UXUDO� DUHDV� DV� SDUW� RI� DQ� RYHUDOOVRFLDO�FRPPXQLW\� HIIRUW«� �WKH\� FDQ�� RSHUDWH� DV� D� IRFDO� SRLQW�� EULQJLQJ� WKH� FRPPXQLW\WRJHWKHU��RU�DV�D�VWLPXOXV�WR�KHOS�D�FRPPXQLW\�UH�HQHUJLVH�LWVHOI«´(FRQRPLF�DQG�6RFLDO�,PSDFW�RI�WKH�$UWV��0DFND\�&RQVXOWDQWV������

7KH� %ODNH� 6WHYHQVRQ� VWXG\� RQ� WKH� UROH� RI� WKH� DUWV� LQ� UHJHQHUDWLRQ� µGLVFRYHUHG� JHQHUDODJUHHPHQW�WKDW�WKH�DUWV�FDQ¶�x ,QFUHDVH�DQ�LQGLYLGXDO¶V�SHUVRQDO�GHYHORSPHQW E\�KHOSLQJ�WKHLU�FRQILGHQFH��VNLOOV�DQGPRWLYDWLRQ�x $VVLVW� LQ� VRFLDO� GHYHORSPHQW DV� SDUWLFLSDQWV� FDQ� PDNH� QHZ� IULHQGV� DQG� EHFRPHLQWHUHVWHG�x ,PSURYH�WKH�ORFDO�LPDJH ZLWK�SHRSOH�IHHOLQJ�PRUH�SRVLWLYH�DERXW�ZKHUH�WKH\�OLYH��DQGKHOS�SDUWLFLSDQWV�IHHO�EHWWHU�DQG�KHDOWKLHU�IURP�WKHLU�LQYROYHPHQW�LQ�WKH�DUWV�

$UWV�RUJDQLVDWLRQV�LQ� WKH�+LJKODQGV�DQG�,VODQGV��KRZHYHU�� UDUHO\�HYDOXDWH� WKH�ZRUN� WKH\�GR�SDUWLFXODUO\�LQ�WHUPV�RI�VRFLDO�LPSDFW�� �7KHUHIRUH�WKHUH�LV�YHU\�OLWWOH�TXDQWLWDWLYH�LQIRUPDWLRQRQ�VRFLDO� LPSDFW�DYDLODEOH�±� LW� LV�XVXDOO\�DVVHVVHG�DQHFGRWDOO\� LQ� WHUPV�RI�� IRU�H[DPSOH�� WKHQXPEHU�RI�SHRSOH�ZKR�SURJUHVV�IURP�SDUWLFLSDWLRQ�WR�SURIHVVLRQDO�LQYROYHPHQW�7R� JDLQ� D� EURDGHU� SROLF\� SHUVSHFWLYH� RQ� WKH� VRFLDO� LPSDFW� RI� WKH� DUWV� ZH� LQWHUYLHZHG� IRXUSHRSOH� ZLWK� UHVSRQVLELOLW\� IRU� DUWV� SROLF\� IRUPXODWLRQ� DV� ZHOO� DV� SURMHFW� FR�RUGLQDWLRQ� DQGLPSOHPHQWDWLRQ�

x 5REHUW�/LYLQJVWRQ��'LUHFWRU��+,�$UWV��+LJKODQGV�DQG�,VODQGV��x -LP�*DLWHQV��$UWV�0DQDJHU��+LJKODQG�&RXQFLO��+LJKODQG��x $UWKXU�:DWW��'LUHFWRU��6KHWODQG�$UWV�7UXVW��6KHWODQG��x 0DOFROP�0DF/HDQ��'LUHFWRU��1*$$��*DLGKHDOWDFKG���:HVWHUQ�,VOHV��7KH�PDLQ�SRLQWV�RI�LQWHUHVW�IURP�WKHVH�LQWHUYLHZV�DUH�VXPPDULVHG�EHORZ�*HQHUDOO\��LW�ZDV�IHOW�WKDW�ZKLOH�WKHUH�KDYH�EHHQ�DUHDV�RI�LPSURYHPHQW�LQ�WKH�DUWV�LQ�WKH�SDVWWHQ� \HDUV� �� ERWK� JHRJUDSKLFDOO\� DQG� E\� DUWIRUP� �� WKH\� DUH� VWLOO� LQ� D� VWDWH� RI� VRPH� IUDJLOLW\�7KHUH� LV� QRW� HQRXJK� VWDELOLW\�� SDUWLFXODUO\� RI� IXQGLQJ�� WR� DOORZ� PHDQLQJIXO� ORQJ�WHUPGHYHORSPHQWDO� SODQQLQJ�� � 7KH� GHPLVH� RI� %DOQDLQ� +RXVH� DW� WKH� HQG� RI� ����� DQG� WKHLQFUHDVLQJO\� GLIILFXOW� VWDWH� RI� WKH� +LJKODQG� )HVWLYDO� ZHUH� IHOW� WR� EH� WZR� RI� WKH� PRUH� KLJK�SURILOH�H[DPSOHV�RI�WKLV�IUDJLOLW\�7ZR�RI� WKH�PRVW� LPSRUWDQW� IDFWRUV� DIIHFWLQJ� WKH� DUWV� KDYH� EHHQ� DVVRFLDWHG� ZLWK� FKDQJHV� LQJRYHUQPHQW� VWUXFWXUHV�� � 7KH� UHRUJDQLVDWLRQ� RI� ORFDO� JRYHUQPHQW� LQ� ����� ZDV� IHOW� WR� EHGDPDJLQJ�WRZDUGV�WKH�DUWV��SDUWLFXODUO\�LQ�WKH�+LJKODQG�DUHD�ZKHUH�WKH�DUWV�UHODWHG KXPDQ�DQGILQDQFLDO�UHVRXUFHV�DYDLODEOH�WR�ORFDO�JRYHUQPHQW�ZHUH�VLJQLILFDQWO\�GLPLQLVKHG�

Page 84: Microsoft Word - Westbrook master _1_.doc

��

&RQYHUVHO\��6FRWWLVK�GHYROXWLRQ�LQ������KDV�DOORZHG�WKH�RSSRUWXQLW\�IRU�JUHDWHU� UHFRJQLWLRQRI�WKH�LVVXHV�FRQFHUQLQJ�ERWK�WKH�DUWV�DQG�WKH�+LJKODQGV�DQG�,VODQGV��DOWKRXJK�WKLV�SRWHQWLDOLPSDFW�KDV�\HW�WR�PDQLIHVW�LWVHOI�IXOO\�7ZR�RWKHU�VLJQLILFDQW�IDFWRUV�LQWURGXFHG�LQ�WKH�ODVW�WHQ�\HDUV�KDYH�EHHQ�WKH�IXQGLQJ�DYDLODEOHIURP� WKH� 1DWLRQDO� /RWWHU\� DQG� WKH� HVWDEOLVKPHQW� RI� WKH� *DHOLF� %URDGFDVWLQJ� &RPPLWWHH�&&*����7KH�/RWWHU\�KDV�HQDEOHG�D�QXPEHU�RI�EXLOGLQJ�SURMHFWV�WR�JR�DKHDG�ZKLFK�RWKHUZLVHZRXOG�QRW�KDYH�KDSSHQHG��PRVW�QRWDEO\�SHUKDSV�WKH�FUHDWLRQ��RU�UHIXUELVKPHQW��RI�YHQXHV�DQGJDOOHULHV�LQ�,QYHUQHVV��6KHWODQG��2UNQH\��:HVWHUQ�,VOHV��6N\H�DQG�0XOO���:KLOH�/RWWHU\�PRQH\KDV�EHHQ�KXJHO\�EHQHILFLDO��LW�KDV�QRW�LQFUHDVHG�VWDELOLW\�RU�FRQVROLGDWHG�WKH�DUWV�LQIUDVWUXFWXUH�DQG�LQ�VRPH�FDVHV���$Q�/DQQWDLU�DQG�WKH�SURSRVHG�0HUFDW�&HQWUH� LQ�'LQJZDOO��� WKH�SURFHVVKDV�EHHQ�GHPRUDOLVLQJ�DQG�FRQVXPHG�FRQVLGHUDEOH�UHVRXUFHV�7KH�&&*¶V�DQQXDO�EXGJHW�RI�F����PLOOLRQ�VLQFH������KDV�SURYLGHG�D�PDVVLYH� LQMHFWLRQ� LQWRERWK�*DHOLF�DQG�EURDGFDVWLQJ���7KH�HIIHFW�KDV�EHHQ�HVSHFLDOO\�SRVLWLYH�ZLWKLQ�6WRUQRZD\�DQGWKH�:HVWHUQ�,VOHV��DOWKRXJK�VRPH�REVHUYHUV�IHHO�WKDW�PRUH��ODVWLQJ�LQIUDVWUXFWXUH�VKRXOG�KDYHEHHQ�HYLGHQW�E\�QRZ�*HQHUDOO\��WKHUH�KDV�EHHQ�D�WUHPHQGRXV�LQFUHDVH�RI�LQWHUHVW�LQ�WKH�WUDGLWLRQDO�DUWV��SDUWLFXODUO\PXVLF� DQG�� WR� D� OHVVHU� H[WHQW�� GDQFH�� � 7KLV� LV� GXH� LQ� ODUJH� SDUW� WR� WKH� VXFFHVV� RI� WKH� IHLVPRYHPHQW� ZKRVH� LQIRUPDO� DSSURDFK� WR� PXVLF� WXLWLRQ� KDV� SURYHG� H[WUHPHO\� HIIHFWLYH�� � )RUPDQ\�\RXQJ�SHRSOH�LQ�WKH�WUDGLWLRQDOO\�µGLIILFXOW¶�DJH�JURXS����������WUDGLWLRQDO�PXVLF�LV�QRZFRRO�� �6WHS�GDQFH�KDV�DOVR�XQGHUJRQH�D�FRQVLGHUDEOH�UHYLYDO�� �7HQ�\HDUV�DJR�LW�ZRXOG�EDUHO\UHJLVWHU� DV� DQ� DFWLYLW\�� EXW� QRZ� WKHUH� DUH� D� QXPEHU� RI� FODVVHV�� ZRUNVKRSV� DQG� SHUIRUPHUVWKURXJKRXW�6FRWODQG��� ,W� LV� SUREDEO\� IDLU� WR�REVHUYH� WKDW� WKH� UHYLYDO� RI� LQWHUHVW� LQ� WUDGLWLRQDOµ+LJKODQG¶�DUWV�KDV�ERWK�HQKDQFHG�DQG�EHHQ�HQKDQFHG�E\�WKH�UHYLYLQJ�HFRQRPLF�FRQILGHQFH�RIWKH�DUHD�7KH� EXLOW� LQIUDVWUXFWXUH� RI� WKH� DUHD� KDV� EHHQ� ERRVWHG� E\� D� QXPEHU� RI� VWUDWHJLF� YLOODJH� KDOOUHGHYHORSPHQWV� DQG� QHZ�EXLOGV�� SDUWO\� DV� D� UHVXOW� RI� D� 0LOOHQQLXP� /RWWHU\�IXQGHG� ��VW&HQWXU\�+DOOV�VFKHPH�� �$�µ6XUYH\�RI�9HQXHV�LQ� WKH�+LJKODQGV�DQG�,VODQGV¶��+,�$UWV�������VKRZHG�WKDW�YLOODJH�KDOOV�UHPDLQ�D�KXJHO\�LPSRUWDQW�SDUW�RI�D�FRPPXQLW\¶V�VRFLDO�OLIH�DQG�WKDWDUWV� HYHQWV� SOD\� D� FHQWUDO� UROH� LQ� WKH� GLYHUVLW\� RI� WKH� KDOOV�� � ,Q� DGGLWLRQ�� QHZ� SHUIRUPDQFHYHQXHV�� VXFK� DV�$URV� �6N\H�� DQG� ,QYHUJRUGRQ�$UWV�&HQWUH� KDYH� DXJPHQWHG� WKH� ODUJHU� VFDOHWRXULQJ�SURJUDPPH�LQ�+LJKODQG�WKDW�(GHQ�&RXUW�FRQWLQXHV�WR�KRVW�(GHQ�&RXUW�UHPDLQV�WKH�ODUJHVW�SURIHVVLRQDO�DUWV�RUJDQLVDWLRQ�DQG�YHQXH�LQ�WKH�+LJKODQGV�DQG,VODQGV�DQG�DV�VXFK�KROGV�D�SLYRWDO�UROH�LQ�IXWXUH�GHYHORSPHQW���,QWHUQDO�FKDQJHV�LQ�WKH�WKHDWUHLQ�WKH�SDVW�ILYH�\HDUV�KDYH�VHHQ�JUHDWHU�HPSKDVLV�RQ�GHYHORSLQJ�HGXFDWLRQ�DQG�RXWUHDFK�ZRUNDQG�IRVWHULQJ�OLQNV�ZLWK�DUHDV�DQG�RUJDQLVDWLRQV�RXWZLWK�,QYHUQHVV�2YHUDOO��KRZHYHU��WKH�+LJKODQGV�DQG�,VODQGV�KDV�D�IUDJPHQWHG�DUWV�FRPPXQLW\��GXH�SDUWO\�WRJHRJUDSK\���7KHUH�KDV�EHHQ�OLWWOH�VHQVH�RI�RYHUDOO�VWUDWHJLF�IRFXV�IRU�WKH�ZKROH�DUHD��DOWKRXJKSURJUHVV� KDV� EHHQ� PDGH� LQ� WKH� SDVW� WHQ� \HDUV�� DQG� WKH� FUHDWLRQ� RI� WKH� +LJKODQG� $UWV3DUWQHUVKLS�LQ������VKRXOG�KHOS�SURYLGH�WKLV�IRFXV�LQ�WKH�+LJKODQG�&RXQFLO�DUHD�1HWZRUNLQJ�LV�LPSURYLQJ��DOWKRXJK�IXOO�DGYDQWDJH�KDV�QRW�\HW�EHHQ�WDNHQ�RI�WKH�SRVVLELOLWLHVDYDLODEOH� WKURXJK� ,7�� � 1HZ� DVVRFLDWLRQV� KDYH� EHHQ� PDGH� ZLWKLQ� FHUWDLQ� DUWIRUPV�� DQG� WKH3URPRWHUV� $UWV� 1HWZRUN� KDV� EHFRPH� DQ� LPSRUWDQW� RUJDQLVDWLRQ�� ZKLOH� VRPH� DUHDV� DUHGHYHORSLQJ�LQIRUPDO�ORFDO�QHWZRUNV�RI�DUWV�RUJDQLVDWLRQV�

Page 85: Microsoft Word - Westbrook master _1_.doc

��

7KHUH�LV�D�ZLGHO\�KHOG�YLHZ�WKDW�WKH�SXEOLF�VHFWRU�IXQGLQJ�ERGLHV�VWLOO�GR�QRW�IXOO\�XQGHUVWDQGWKH�DUWV�DQG�WKH�SRWHQWLDO�WKDW�WKH\�KDYH�WR�HIIHFW�SRVLWLYH�VRFLDO�DQG�HFRQRPLF�FKDQJH���,W�LVIHOW�WKDW�WKH�ERGLHV�DEOH�WR�SURYLGH�IXQGLQJ�GR�QRW�PDNH�DQ�DSSURSULDWH�LQYHVWPHQW�LQ�WKH�DUWVVHFWRU�RU�JLYH�LW�D�KLJK�HQRXJK�FRUSRUDWH�SULRULW\���$FFRUGLQJ�WR�RXU�LQWHUYLHZHHV��WKLV�LV�QRWKHOSHG�E\�ZKDW�DUH�SHUFHLYHG�DV�VRPHWLPHV�FRQIXVLQJ�VLJQDOV�IURP�6$&�ZLWK�UHJDUG�WR�WKHLURQJRLQJ�UHYHQXH�VXSSRUW�OHYHOV�DQG�FKRLFH�RI�FDSLWDO�SURMHFWV�WR�VXSSRUW�WKURXJK�WKH�/RWWHU\�2QH�KRQRXUDEOH�H[FHSWLRQ�ZLWKLQ�WKH�SXEOLF�VHFWRU�KDV�EHHQ�WKH�DUULYDO�DQG�VLJQLILFDQW�JURZWKRI�+,�$UWV��D�MRLQW�6$&�+,(�LQLWLDWLYH��ZKLFK�ZDV�HVWDEOLVKHG�IROORZLQJ�WKH������(FRQRPLFDQG�6RFLDO�,PSDFW�6WXG\�DQG�VXEVHTXHQW�FRQIHUHQFH��,W�LV�FXUUHQWO\�WKH�RQO\�DUWV�RUJDQLVDWLRQZLWK�D�VSHFLILF�DUWV�UHPLW�IRU�WKH�ZKROH�RI�WKH�+LJKODQGV�DQG�,VODQGV�DUHD���+,�$UWV¶�UHPLW��DQGEXGJHW��UHVWULFWV�WKH�UDQJH�RI�GHYHORSPHQWDO�DFWLYLW\�LQ�ZKLFK�LW�FDQ�EHFRPH�LQYROYHG��EXW�LWKDV� XQGRXEWHGO\� EHHQ� WKH� FDWDO\VW� IRU� D� QXPEHU� RI� LPSRUWDQW� LQLWLDWLYHV� DQG� RUJDQLVDWLRQV�7KHVH� UDQJH� IURP� DUWIRUP� GHYHORSPHQWV� �LH� PXVLF� WKURXJK� WKH� 0,'$6� SURMHFW��� GLUHFWSURYLVLRQ� �LH� 6FUHHQ� 0DFKLQH�� PLVFHOODQHRXV� WUDLQLQJ� HYHQWV��� QHWZRUN� GHYHORSPHQW� �LHVXSSRUW� RI� 3$1�� DQG� UHVHDUFK� �LH� $UWV� DQG� &KLOGUHQ� LQLWLDWLYH�� PLVFHOODQHRXV� UHVHDUFKVWXGLHV���+,�$UWV�DOVR�FRQWLQXHV�WR�SOD\�DQ�LPSRUWDQW�DGYLVRU\�DQG�OREE\LQJ�UROH�IRU� WKH�DUWVZLWKLQ�+,(��WKH�/(&V�DQG�WKH�EURDGHU�SXEOLF�VHFWRU�DJHQFLHV�LQ�WKH�DUHD�7KH�ILIWHHQ�\HDU�ROG�6KHWODQG�$UWV�7UXVW�PLJKW�EH�FRQVLGHUHG�D�PRGHO�RI�VXVWDLQDEOH�RUJDQLFJURZWK�ZRUWK�UHSOLFDWLQJ�LQ�RWKHU�DUHDV���,W�KDV�GHYHORSHG�JUDGXDOO\��DQG�LQ�FORVH�FR�RSHUDWLRQZLWK�6KHWODQG�,VODQGV�&RXQFLO��WR�HQVXUH�ODVWLQJ�DQG�UHOHYDQW�FKDQJH�$OWKRXJK� WKHUH� LV� RIWHQ VRPH�GLVLOOXVLRQ� UHJDUGLQJ� WKH� FXUUHQW� VWDWH�RI� WKH� DUWV� �SDUWLFXODUO\ZLWK�UHJDUG�WR�DUHDV�ZKHUH�DUWV�DFWLYLW\�DQG�IXQGLQJ�KDV�GHFOLQHG���WKHUH�LV�DOVR�D�UHDOLVDWLRQWKDW�PDQ\�WKLQJV�DUH�EHWWHU�WKDQ�WKH\�ZHUH�WHQ�\HDUV�DJR�DQG�WKDW�WKHUH�DUH�VWLOO�D�QXPEHU�RIQHZ�RSSRUWXQLWLHV�WR�GHYHORS�IXUWKHU�LQ�IXWXUH�\HDUV�

Page 86: Microsoft Word - Westbrook master _1_.doc

��

���� 7+(�52/(�2)�7+(�$576�,1�&8/785$/�7285,60���� ,QWURGXFWLRQ&XOWXUDO� WRXULVP� LV� EDVHG� RQ� WKH� PRVDLF� RI� SODFHV�� WUDGLWLRQV�� DUW� IRUPV�� FHOHEUDWLRQV� DQGH[SHULHQFHV� WKDW� SRUWUD\� D� UHJLRQ� �RU� FRXQWU\�� DQG� LWV� SHRSOH�� UHIOHFWLQJ� LWV� GLYHUVLW\� DQGFKDUDFWHU�7KH� $PHULFDQ� DXWKRU�� *DUULVRQ� .HLOORU�� GHVFULEHG� FXOWXUDO� WRXULVP� LQ� D� ZD\� WKDW� FRXOG� EHDUJXHG�DV�XQLYHUVDOO\�DSSOLFDEOH�

³:H�QHHG�WR�WKLQN�DERXW�FXOWXUDO�WRXULVP�EHFDXVH�UHDOO\�WKHUH�LV�QR�RWKHU�NLQG�RI�WRXULVP�,WV�ZKDW�WRXULVP�LV���3HRSOH�GRQW�FRPH�WR�$PHULFD�IRU�RXU�DLUSRUWV��SHRSOH�GRQW�FRPH�WR$PHULFD� IRU� RXU� KRWHOV�� RU� WKH� UHFUHDWLRQ� IDFLOLWLHV����� 7KH\� FRPH� IRU� RXU� FXOWXUH�� KLJKFXOWXUH��ORZ�FXOWXUH��PLGGOH�FXOWXUH��ULJKW��OHIW��UHDO�RU�LPDJLQHG���WKH\�FRPH�KHUH�WR�VHH$PHULFD�´�7ZR�WUDYHO�WUHQGV�DUH�OLNHO\�WR�LQIOXHQFH�WKH�WRXULVP�PDUNHW�VLJQLILFDQWO\�LQ�WKH�QH[W�GHFDGH�

x 0DVV� PDUNHWLQJ� LV� JLYLQJ� ZD\� WR� RQH�WR�RQH� PDUNHWLQJ� ZLWK� WUDYHO� EHLQJ� WDLORUHG� WR� WKHLQWHUHVWV�RI�WKH�LQGLYLGXDO�FRQVXPHU�x $� JURZLQJ� QXPEHU� RI� YLVLWRUV� DUH� EHFRPLQJ� VSHFLDO� LQWHUHVW� WUDYHOOHUV� ZKR� UDQN� WKH� DUWV�KHULWDJH�DQG�RU�RWKHU�FXOWXUDO�DFWLYLWLHV�DV�RQH�RI�WKH�WRS�ILYH�UHDVRQV�IRU�WUDYHOOLQJ�

7KH�FRPELQDWLRQ�RI�WKHVH�WZR�WUHQGV�LV�EHLQJ�IXHOOHG�E\�WHFKQRORJ\��WKURXJK�WKH�SUROLIHUDWLRQRI� RQOLQH� VHUYLFHV� DQG� WRROV�� PDNLQJ� LW� HDVLHU� IRU� WKH� WUDYHOOHU� WR� FKRRVH� GHVWLQDWLRQV� DQGFXVWRPLVH�WKHLU�LWLQHUDULHV�EDVHG�RQ�WKHLU�LQWHUHVWV�%URDGHQLQJ� SDUWLFLSDWLRQ� LQ� WKH� DUWV�� LQFUHDVLQJ� RSSRUWXQLWLHV� IRU� DUWLVWV�� SUHVHUYLQJ� DQGSURPRWLQJ� FXOWXUDO� UHVRXUFHV� DQG� LQYHVWLQJ� LQ� FRPPXQLWLHV� TXDOLW\� RI� OLIH� DUH� DPRQJ� WKHUHDVRQV� WKDW� DUWV� DJHQFLHV� DUH� NH\� SOD\HUV� LQ� VXSSRUWLQJ� DQG� OHDGLQJ� FXOWXUDO� WRXULVPLQLWLDWLYHV��6RPH�SXEOLF�VHFWRU�ERGLHV�DUH�EHJLQQLQJ�WR�GHYHORS�VWUDWHJLHV�OLQNLQJ�WKH�DUWV�DQGWRXULVP�LQ�FRPPXQLWLHV�DFURVV�WKH�FRXQWU\�5HVHDUFK�KDV�VKRZQ�WKDW�FXOWXUDO�DQG�KHULWDJH�WUDYHOOHUV� WHQG�WR�VWD\�ORQJHU�DQG�VSHQG�PRUHWKDQ�WKH�DYHUDJH�WUDYHOOHU����� &XOWXUDO�7RXULVP�LQ�WKH�+LJKODQGV�DQG�,VODQGV&XOWXUDO�WRXULVP�UHPDLQV�DQ�XQGHUGHYHORSHG�DVSHFW�RI�WKH�DUWV�LQ�WKH�+LJKODQGV�DQG�,VODQGV�8QOLNH�RWKHU�DUHDV�±� VXFK�DV� VRPH�$XVWUDOLDQ�DQG�$PHULFDQ�VWDWHV�� DQG�5RPDQLD� �VHH�����EHORZ��±�WKH�FRQFHSW�RI�FXOWXUDO�WRXULVP�KDV�EHHQ�DFNQRZOHGJHG�EXW�QRW�HPEUDFHG�RU�SXW�LQWRSUDFWLFH�LQ�DQ\�VLJQLILFDQW�ZD\�LQ�WKH�+LJKODQGV���,Q�JHQHUDO��WKH�FXOWXUDO�YLVLWRU�LV�DWWUDFWHG�WRWKH�+LJKODQGV�DQG�,VODQGV�IRU�LWV�HQYLURQPHQW�RU�KHULWDJH�UDWKHU�WKDQ�IRU�DUWLVWLF�UHDVRQV�$UWV�HYHQWV�DQG�YHQXHV�RIWHQ�DWWUDFW�YLVLWRUV��SULQFLSDOO\�EHFDXVH�WKH\�KDSSHQ�WR�EH�RSHQ��RUWDNLQJ� SODFH�� GXULQJ� WKH� PDLQ� YLVLWRU� VHDVRQ�� 7KHUH� DUH� YHU\� IHZ� RUJDQLVDWLRQV� WKDW� XVHFXOWXUDO� DFWLYLW\� DV� DQ� LQWHJUDO� SDUW� RI� WKHLU�PDUNHWLQJ� WR� DWWUDFW� YLVLWRUV�� DOWKRXJK� WKHUH� DUH� .HLOORU��µ$GGUHVV�WR�WKH������:KLWH�+RXVH�&RQIHUHQFH�RQ�7UDYHO��7RXULVP¶������

Page 87: Microsoft Word - Westbrook master _1_.doc

��

H[DPSOHV� RI� JRRG� SUDFWLFH� �� LQFOXGLQJ� WKH�&HLOLGK�3ODFH��8OODSRRO�� 7DLJK� &KHDUVDEKDJK� LQ6RXWK�8LVW��$URV�LQ�3RUWUHH��DQG�D�QXPEHU�RI�IHVWLYDOV�$Q�LQLWLDWLYH�LQ�WKH�PLG�����¶V�WR�SURPRWH�*DHOLF�WRXULVP�LOOXVWUDWHG�WKH�RSSRUWXQLWLHV�LQ�WKLVVHFWRU�� �$� EURFKXUH�� ³)DLOWH´�� IHDWXULQJ� *DHOLF�UHODWHG� SODFHV� RI� LQWHUHVW�� YLVLWRU� DWWUDFWLRQV�HYHQWV� DQG� DFFRPPRGDWLRQ� SURYLGHUV� ZDV� SURGXFHG� LQ� VHYHUDO� ODQJXDJHV�� � 0RQLWRULQJ� LQ�����DQG������VKRZHG�H[WUHPHO\�NHHQ�LQWHUHVW�LQ�*DHOLF�UHODWHG�WRXULVP��ERWK�VWLPXODWHG�E\WKH� EURFKXUH� DQG� LQ� UHVSRQVH� WR� TXHVWLRQV� DERXW� IXWXUH� YLVLW� SDWWHUQV�� � 7KH� UHVSRQVH� IURPFHUWDLQ�RYHUVHDV�FRXQWULHV�ZDV�SDUWLFXODUO\�NHHQ� �FRXQWULHV�ZLWK�KLVWRULFDO� IDPLO\� OLQNV�ZLWK6FRWODQG��DQG�\RXQJ�SHRSOH�IURP�(XURSHDQ�FRXQWULHV��*HQHUDOO\��WKH�FXOWXUH�RI�WKH�+LJKODQGV�DQG�,VODQGV�LV�QRW�HPSOR\HG�HIIHFWLYHO\�DV�D�PDUNHWLQJWRRO�WR�DWWUDFW�YLVLWRUV��,W� LV�XQGHU�XWLOLVHG�E\�WKH�SXEOLF�VHFWRU��ZKLOH�SULYDWH�VHFWRU� WHQGV�WRIDOO�EDFN�RQ�ROG�IRUPXODV�IRU�µHQWHUWDLQLQJ�WKH�YLVLWRUV¶���XVXDOO\�ZLWK�VRPH�IRUP�RI�WUDGLWLRQDOPXVLF�DQG�GDQFH�7KLV�SLFWXUH�LV�EHJLQQLQJ�WR�FKDQJH��KRZHYHU��DOEHLW�VORZO\��7KHUH�DUH�D�JUDGXDOO\�LQFUHDVLQJQXPEHU�RI�DUWV�EDVHG�FRXUVHV�EHLQJ�GHYHORSHG�IRU�WKH�YLVLWRU�PDUNHW��7KHVH�DUH�XVXDOO\�YLVXDODUWV�RU�WUDGLWLRQDO�PXVLF�EDVHG��IRU�H[DPSOH�WKH�UHFHQWO\�RSHQHG�3LSLQJ�&HQWUH�LQ�$FKLOWLEXLH�RU�WKH�)HLV�5RLV�6XPPHU�&HLOLGK�7UDLO��&HRODV�LQ�6RXWK�8LVW�DQG�6DEKDO�0RU�2VWDLJ�LQ�6N\H�7KHUH�DUH�XQGRXEWHGO\�RSSRUWXQLWLHV�IRU�WKLV� WR�EH�GHYHORSHG�IXUWKHU��SHUKDSV�ZLWK�WKH�/(&QHWZRUN� ZRUNLQJ� PRUH� FORVHO\� ZLWK� ORFDO� DUWV� SURYLGHUV�YHQXHV� WR� GHYHORS� QHZ� SURGXFWUDQJHV��DQG�PRUH�HIIHFWLYH�PDUNHWLQJ���,QFOXGLQJ�LPDJHV�RI�WKH�DUHD¶V�DUWLVWLF�FXOWXUH��DV�ZHOODV� DGYHUWLVLQJ� VLJQLILFDQW� DQQXDO� DUWV� HYHQWV� DQG� IHVWLYDOV�� VKRXOG� EH� D� FRUH� HOHPHQW� RI� WKHUHJLRQ¶V�PDUNHWLQJ��� IRU� WKH�EHQHILW�RI�ERWK� WKH� UHJLRQ�DQG� WKH�HYHQWV��7KLV� LV�QRW�FXUUHQWO\H[SORLWHG�0DQ\�YLVLWRUV� WR� WKH�+LJKODQGV�DQG�,VODQGV�EHFRPH�FXOWXUDO� WRXULVWV�E\�DFFLGHQW� UDWKHU� WKDQGHVLJQ��7KH\�DWWHQG� ORFDO�HYHQWV�DQG�H[KLELWLRQV� WKDW�DUH�FRQWHPSRUDU\� WR� WKHLU�YLVLW�� UDWKHUWKDQ� YLVLWLQJ� WKH� DUHD� EHFDXVH� WKH� HYHQWV� DUH� RQ�� � $JDLQ�� ZLWK� JRRG� PDUNHWLQJ�� �LQFOXGLQJHQFRXUDJLQJ�UHSHDW�YLVLWV�DQG�ZRUG�RI�PRXWK�UHFRPPHQGDWLRQV���WKHUH�LV�QR�UHDVRQ�ZK\�WKHRUJDQLVHUV� RI� WKHVH� HYHQWV� PLJKW� QRW� EHJLQ� WR� WU\� DQG� DWWUDFW� DQ� LQFUHDVLQJO\� VLJQLILFDQWSURSRUWLRQ� RI� WKHLU� DXGLHQFH� IURP� YLVLWRUV�� � $WWUDFWLQJ� YLVLWRUV� WR� H[LVWLQJ� DUWLVWLF� HYHQWVVKRXOG�KDYH�D�KLJKHU�SULRULW\�LQ�PRVW�DUHDV�WKDQ�GHYLVLQJ�QHZ�HYHQWV�IRU�WRXULVW�YLVLWRUV�7KH� VXPPHU� WRXULVW� PDUNHW� LV� XVHIXO� LQ� VXVWDLQLQJ� DWWHQGDQFHV� DW� HYHQWV� WKDW� ORFDO� SHRSOHPLJKW�EH�WRR�EXV\�LQ�FDWHULQJ�IRU� WRXULVWV� WR�DWWHQG��RU�EH�RQ�KROLGD\� WKHPVHOYHV���DOWKRXJKFXOWXUDO� WRXULVP�FDQ�DOVR�EH�D�JRRG�ZD\�RI�H[WHQGLQJ� WKH� VHDVRQ�RU�� HJ�� WKURXJK�D� IHVWLYDO�FUHDWLQJ� D� UHDVRQ� IRU� YLVLWLQJ� D� SDUWLFXODU� DUHD� LQ� D� SDUWLFXODU�ZHHN� GXULQJ� WKH�ZLQWHU�� � )RUPXVLFDO�SHUIRUPHUV��WRR��WRXULVW�DWWHQGDQFHV�DW�HYHQWV��DQG�HYHQWV�SXW�RQ�IRU�WRXULVWV��KHOS�LQHQKDQFLQJ�WKHLU�SURVSHFWV�RI�HDUQLQJ�DW��OHDVW�D�UHDVRQDEOH�SDUW�WLPH�OLYLQJ�IURP�WKHLU�PXVLF����� (FRQRPLF�,PSDFW7KH� HVWLPDWHV� SURGXFHG� LQ� WKLV� VWXG\� RQ� WRXULVW� YLVLWRUV� WR� HYHQWV� DQG� H[KLELWLRQV� DQG� WKHHPSOR\PHQW� JHQHUDWLQJ� HIIHFWV� RI� WKHLU� H[SHQGLWXUHV� DUH� RQH� LQGLFDWLRQ� RI� WKH� HFRQRPLFLPSDFW�RI� DUWV�UHODWHG� WRXULVP�� �$EVWUDFWLQJ� IURP�VSHFLILF� HYHQWV� DQG� H[KLELWLRQV�� KRZHYHU�WKH�DUWV�ZLOO�KDYH�D�PXFK�ZLGHU� LPSRUWDQFH�LQ�GHFLVLRQV� WR�YLVLW� WKH�+LJKODQGV�DQG�,VODQGV�SDUWLFXODUO\�WKH�WUDGLWLRQDO�DUWV�DQG�YHQXHV�YLVLWRU�DWWUDFWLRQV�ZKHUH�WKHVH�DUH�IHDWXUHG�

Page 88: Microsoft Word - Westbrook master _1_.doc

��

7KH�(.26� UHSRUW� RQ� WKH�9ROXPH�DQG�9DOXH�RI�7RXULVP� LQ� WKH�+267�0RUD\� DUHD� LQ�����HVWLPDWHG�WKH�WRWDO�YDOXH�RI�RYHUQLJKW�VWD\�WRXULVP�DW������PLOOLRQ�RYHU�WKH�\HDU���$GGLQJ�WKHRWKHU� SDUWV� RI� WKH� +,(� DUHD� DQG� DGMXVWLQJ� WKH� PXOWLSOLHU� EHQHILWV� ZLOO� EULQJ� WKH� YDOXH� RIWRXULVP�LQ�WKH�+LJKODQGV�DQG�,VODQGV�XS�WR�DW�OHDVW������PLOOLRQ���$�VPDOO�SHUFHQWDJH�RI�WKLVDWWULEXWHG� WR� DUWV� IDFLOLWLHV� DQG� DFWLYLWLHV�ZRXOG� UHSUHVHQW� D� PDMRU� FRQWULEXWLRQ�� ZLWK� VFRSH�DUJXDEO\�� IRU� VHYHUDO� �� PLOOLRQV� RI� DGGLWLRQDO� LPSDFW� WKURXJK� LPSURYHG� SURPRWLRQ� DQGSURGXFW�GHYHORSPHQW�IRU�WRPRUURZ¶V�FXOWXUDO�WRXULVW���7KLV��ZLWK�IXQGLQJ�FRQWULEXWLRQV�IURPWRXULVP�UHODWHG�EXVLQHVVHV�DQG� WRXULVP�VXSSRUW� DJHQFLHV��ZRXOG�KHOS� WR�FRPSHQVDWH� IRU� WKHUHGXFWLRQV�LQ�/RFDO�$XWKRULW\�DQG�$UWV�/RWWHU\�IXQGLQJ�QRWHG�HOVHZKHUH�LQ�WKLV�UHSRUW�7KH�DUWV�FRPSOHPHQW�WKH�FXOWXUDO�DQG�KHULWDJH�IDFLOLWLHV�WKDW�DUH�NH\�DVSHFWV�RI�WKH�GLVWLQFWLYHWRXULVP�³SURGXFW´�RI�WKH�+LJKODQGV�DQG�,VODQGV��ERWK�LQ�JHQHUDO�DQG�WKURXJK�WKH�*DHOLF�&HOWLFGLPHQVLRQ�LQ�SDUWLFXODU���7RXULVP�LV�FULWLFDO�WR�WKH�HFRQRPLHV�RI�PRVW�SDUWV�RI�WKH�+LJKODQGVDQG�,VODQGV��DQG�PDQ\�IUDJLOH�DUHDV��WKURXJK�ODFN�RI�DOWHUQDWLYHV��ZLOO�EH�KLJKO\�GHSHQGHQW�IRUWKHLU�IXWXUH�RQ�VXFFHVVIXO�IXWXUH�WRXULVP�LQLWLDWLYHV�7KH�XQGHUO\LQJ�WRXULVP�PDUNHW�LQ�6FRWODQG�LV�QR�ORQJHU�H[SDQGLQJ��KRZHYHU��DQG�WKH�QHHG�WRGHYHORS�QLFKH�WRXULVP�LV�EHFRPLQJ�HYHU�PRUH�LPSRUWDQW�WR�WKH�UHPRWHU�DUHDV�DQG�WKRVH�DUHDVSURSRUWLRQDWHO\�PRVW�KLJKO\�GHSHQGHQW�RQ�WRXULVP�7KH� SRWHQWLDO� ORQJHU� WHUP� EHQHILWV� IURP� GHYHORSLQJ� FXOWXUDO� WRXULVP� DUH� LPSRUWDQW� EXWGLIILFXOW�WR�TXDQWLI\��DQG�LQFOXGH�

x 5HSHDW�YLVLWV�IRU�IXWXUH�KROLGD\V�E\�SHRSOH�DWWHQGLQJ�IHVWLYDOV�DQG�RWKHU�FXOWXUDO�HYHQWV�x 0RYHV�LQWR�WKH�+LJKODQGV�DQG�,VODQGV�E\�SHRSOH�DWWUDFWHG�E\�D�UDQJH�RI�IDFWRUV�WKDW�LQFOXGHVLWV�DUWLVWLF�HQYLURQPHQW��ERWK�ZRUNLQJ�DJH�IDPLOLHV�DQG�WKH�UHWLUHG��

3HRSOH�LQWHUHVWHG�LQ� WKH�DUWV�ZKR�PRYH� LQWR� WKH�+LJKODQGV�DQG�,VODQGV�ZLOO� LQMHFW� WUDGLWLRQVDQG� VSHFLDOLVPV� IURP�RWKHU� DUHDV�� FUHDWLQJ� DQ� DUWLVWLF�G\QDPLF� LQ� WKH� ORFDO� DUHD��ZKLOH� DOVRHQKDQFLQJ�WKH�YROXQWHHU�EDVH�LQ�FRPPXQLWLHV���7KH�UHWLUHG��LQ�SDUWLFXODU��ZLOO�RIWHQ�KDYH�WKHWLPH� WR� KHOS� SODQ� DQG� SURPRWH� QHZ� HYHQWV�� DV� ZHOO� DV� EHLQJ� DEOH� WR� SDVV� RQ� WKHLU� VNLOOVWKURXJK�IRUPDO�WXLWLRQ�RU�VLPSO\�WKURXJK�LQWHUDFWLRQ�ZLWKLQ�WKHLU�QHZ�FRPPXQLW\����� 2SSRUWXQLWLHV:LWK� WKH� DGYHQW�RI� WKH�+LJKODQG�$UWV� 3DUWQHUVKLS� WKHUH� LV� DQ� RSSRUWXQLW\� WR� FRPPLVVLRQ� DMRLQW�DSSURDFK�WR�WKH�GHYHORSPHQW�RI�FXOWXUDO�WRXULVP�LQ�+LJKODQG�WKDW�WKH�PDLQ�SXEOLF�VHFWRUERGLHV�FDQ�VLJQ�XS�WR���6LPLODUO\��LQ�WKH�RWKHU�SDUWV�RI�WKH�+LJKODQGV�DQG�,VODQGV��SDUWQHUVKLSVEHWZHHQ�UHOHYDQW�DJHQFLHV�DQG�WKH�³LQGXVWU\´�FRXOG�EH�FUHDWHG�6XFK�D�MRLQW�LQLWLDWLYH�FRXOG�LQFOXGH�VRPH�RI�WKH�IROORZLQJ�PHDVXUHV�

x &RQYHQH� DOO� LQWHUHVWHG� SDUWLHV� �� SXEOLF�� SULYDWH� DQG� YROXQWDU\� �� WR� LQLWLDWH� GLVFXVVLRQV� DQGGHEDWHV�x 'LVWULEXWH� QHZV� UHOHDVHV� WKURXJK� WKH� SRSXODU� SUHVV�� DV� ZHOO� DV� LQWHUQDO� QHZVOHWWHUV�DFNQRZOHGJLQJ� WKDW� FXOWXUDO� WRXULVP� DQG� FRPPHUFLDO� WRXULVP� DUH� OLQNHG�� UHFRJQLVH� HDFKRWKHUV�LPSRUWDQFH�WR�RQH�DQRWKHU��DQG�PRYH�IRUZDUG�ZLWK�SDUWQHUVKLSV�

Page 89: Microsoft Word - Westbrook master _1_.doc

��

x ,GHQWLI\� SRWHQWLDO� SDUWQHUV� �� QRW� QHFHVVDULO\� DOO� ZLOO� EH� IRXQG� LQ� FRPPHUFLDO� DQG� FXOWXUDOWRXULVP��HFRWRXULVP��DQG�QDWXUDO�UHVRXUFHV�x ,QLWLDWH� HGXFDWLRQ� LQ� WUDYHO� DQG� WRXULVP� �� FRPPHUFLDO�� KHULWDJH� DQG� FXOWXUDO� WRXULVP�� DQGHFRWRXULVP�x 6XSSRUW�UHJLRQDO�WUDYHO�DQG�WRXULVP�SURPRWLRQDO�HIIRUW�x 5HVHDUFK�WKH�SRWHQWLDO�RSSRUWXQLWLHV�IRU�FXOWXUDO�WRXULVP��DQG�WKH�ZD\V�LW�FDQ�EHQHILW�WKH�DUHD�x (GXFDWH�DQG�SURYLGH�WUDLQLQJ�RSSRUWXQLWLHV�IRU�FRPPXQLW\�OHDGHUV�RQ�FXOWXUDO�HQWUHSUHQHXULDODFWLYLWLHV�DQG�EXVLQHVV�RSSRUWXQLWLHV�x ([SORUH�WKH�XVH�DQG�DSSOLFDWLRQ�RI�WHFKQRORJ\�LQ�PDUNHWLQJ�FXOWXUDO�DQG�KLVWRULFDO�SURGXFWV�x (QFRXUDJH� RSHUDWRUV� WR� SURPRWH� VWXG\� WRXUV� IURP� RYHUVHDV� �HJ�� JURXSV� IURP� $PHULFDQXQLYHUVLWLHV�� WKDW� ZRXOG� LQFOXGH� HQWHUWDLQLQJ� VWXG\� VHVVLRQV�� YLVLWV� WR� GLIIHUHQW� DUHDV�� DQGFRLQFLGH�ZLWK�NH\�DUWLVWLF�HYHQWV�

���� &DVH�6WXG\���µ&XOWXUDO�DQG�7RXULVP�,QLWLDWLYH¶��5RPDQLD7KH�IROORZLQJ�EULHI�&DVH�6WXG\�JLYHV�DQ�LGHD�RI�KRZ�D�IRFXVVHG�DSSURDFK�WR�FXOWXUDO�WRXULVPFDQ� GHYHORS� LQWR� D� YHU\� DFWLYH� FRPPHUFLDO� HQWHUSULVH� EHQHILWLQJ� DQ� DUHD¶V� HFRQRP\� DQGFXOWXUH�� � 6XFK� LQLWLDWLYHV� PLJKW� LQ� VRPH� FDVHV� EH� YLDEOH� DW� WKH� OHYHO� RI� WKH� +LJKODQGV� DQG,VODQGV��ZKLOH�LQ�RWKHU�FDVHV�D�QDWLRQDO�DSSURDFK�ZRXOG�EH�PRUH�SURGXFWLYH�7KH� &XOWXUDO� 7RXULVP� ,QLWLDWLYH� �&7,� LV� RQH� RI� WKH� PDLQ� GHSDUWPHQWV� RI� WKH� (XURSHDQ&XOWXUDO� &HQWUH�� %XFKDUHVW�� D� QRQ�SURILW� DFDGHPLF� DVVRFLDWLRQ� DIILOLDWHG� WR� WKH� (XURSHDQ&XOWXUDO�&HQWUH��*HQHYD��)RVWHULQJ�WKH�LQWHUFXOWXUDO�GLDORJXH�DQG�WKH� WUDQVIHU�RI�NQRZOHGJHDQG� LQIRUPDWLRQ� EHWZHHQ� WKH� ZHVWHUQ� ZRUOG� DQG� 5RPDQLD�� WKH� (XURSHDQ� &XOWXUDO� &HQWUH�%XFKDUHVW�KDV�D�UDQJH�RI�HGXFDWLRQDO�DFWLYLWLHV�DQG�SXEOLFDWLRQV�LQ�(QJOLVK�DQG�)UHQFK��DPRQJZKLFK�$�7UDYHOOHU¶V�&RPSHQGLXP�RI�5RPDQLDQ�+LVWRU\ DQG� WKH� VHULHV�RI�ERRNOHWV�DQG�&'�520V�5RPDQLD�� D�&XOWXUDO�*XLGH DUH� V\QRSWLF� SUHVHQWDWLRQV� RI� 5RPDQLD¶V� OLYLQJ� KLVWRU\�WUDGLWLRQV��DUWLVWLF�DQG�FXOWXUDO�DVVHWV�'LUHFWHG�E\�D�JURXS�RI�5RPDQLDQ�DFDGHPLFV�DQG�VFKRODUV��&7, KDV�ZRUNHG�ZLWK�UHVHDUFKHUVIURP� WKH� ,QVWLWXWHV� RI� +LVWRU\�� *HRJUDSK\� DQG� )LQH� $UWV� RI� WKH� 5RPDQLDQ� $FDGHP\�� ZLWKWHDFKHUV��SURIHVVRUV�DQG�VWXGHQWV��,W�KDV�DOVR�FROODERUDWHG�ZLWK�VSHFLDOLVWV�IURP�WKH�0LQLVWU\�RI7RXULVP� DQG� WKH�0LQLVWU\� RI�&XOWXUH� LQ�5RPDQLD�� � ,Q� ����� DQG� ������&7, RUJDQLVHG� VKRUWFRXUVHV� RQ� FXOWXUDO� WRXULVP�� PDLQO\� DWWHQGHG� E\� XQGHUJUDGXDWHV� SURILFLHQW� LQ� IRUHLJQODQJXDJHV��L�H��(QJOLVK��*HUPDQ��)UHQFK��7KH�\RXQJ�WUDLQHHV�KDYH�QRZ�EHFRPH�SURIHVVLRQDOJXLGHV�LQ�KHULWDJH�WRXULVP��DQG�ZRUN�DV�VXFK��RU�GR�UHVHDUFK�ZRUN�ZLWKLQ�&7,����%\�WKH�HQG�RI������&7,¶V�VHUYLFHV�KDG�EHHQ�XVHG�E\�RYHU�����YLVLWRUV��LQGLYLGXDOV�DQG�VPDOO�JURXSV��IURP��� FRXQWULHV�� 7KHLU� IHHGEDFN� ZDV� FDUHIXOO\� SURFHVVHG� DQG� LQWURGXFHG� LQWR� &7,¶V� UHVHDUFKSURMHFWV�� � &7, ZDV� VHW� XS� LQ� 0D\� ������ ,Q� -XQH� ������ &7,� FKDQJHG� LWV� QDPH� LQWR5R&XOWRXUV�&7,�� DQG�EHFDPH�DQ� LQGHSHQGHQW� WRXU�RSHUDWRU�ZKRVH�PDLQ�JRDO� LV� WR�KLJKOLJKW5RPDQLD� DV� DQ� DWWUDFWLYH� FXOWXUDO� WRXULVW� GHVWLQDWLRQ�� � 5R&XOWRXUV�&7, SURYLGHV� FXOWXUDO�WRXULVW�VHUYLFHV�PDLQO\�IRU�VPDOO�JURXSV�ZKR�DUH�RIIHUHG�VLJKWVHHLQJ�WRXUV�IRU�%XFKDUHVW�DQGLWV�VXUURXQGLQJV��JXLGHG�WKHPH�WRXUV� WR�:DOODFKLD��0ROGDYLD��7UDQV\OYDQLD��0DUDPXUHV�DQGWKH� 'DQXEH� 'HOWD�� WDLORU�PDGH� LWLQHUDULHV� DQG� SHUVRQDOLVHG� WRXUV� WKURXJKRXW� 5RPDQLD�� � ,WV

Page 90: Microsoft Word - Westbrook master _1_.doc

��

SHUFHLYHG� VWUHQJWKV� DUH� IOH[LELOLW\�� FRQVWDQW� FDUH� IRU� FXVWRPHU� VDWLVIDFWLRQ� DQG� UHDVRQDEOHSULFHV�

Page 91: Microsoft Word - Westbrook master _1_.doc

��

���� 29(5$//�&21&/86,216���� .H\�6WXG\�)LQGLQJV7KLV�UHSRUW�KDV�H[SORUHG�GLIIHUHQW�DVSHFWV�RI�WKH�HFRQRPLF�DQG�VRFLDO�LPSRUWDQFH�RI�WKH�DUWV�LQWKH�+LJKODQGV�DQG�,VODQGV���7KH�NH\�ILQGLQJV�DUH�VXPPDULVHG�EHORZ�6HFWLRQ�E\�6HFWLRQ�

6HFWLRQ�������1DWLRQDO�DQG�5HJLRQDO�&RQWH[W)DFWRUV�WKDW�KDYH�LQIOXHQFHG�DUWV�GHYHORSPHQW�VLQFH������DQG�WKDW�ZLOO�EH�LPSRUWDQW�LQ�WKHIXWXUH�LQFOXGH�x 2SSRUWXQLWLHV� FUHDWHG� WKURXJK� WKH� H[LVWHQFH� RI� WKH� QHZ� 6FRWWLVK� 3DUOLDPHQW�� HJ�� VWHPPLQJIURP�LWV�FRPPLWPHQWV�WR�HGXFDWLRQ�DQG�VRFLDO�LQFOXVLRQ�x 7KH�LPSOHPHQWDWLRQ�RI�WKH�1DWLRQDO�&XOWXUDO�6WUDWHJ\�x ,QFUHDVLQJ� UHFRJQLWLRQ� DW� WKH� 6FRWWLVK� DQG� 8.� OHYHOV� RI� WKH� HFRQRPLF� LPSRUWDQFH� DQGSRWHQWLDO�RI�WKH�&UHDWLYH�,QGXVWULHV�6HFWRU�x /RWWHU\� IXQGLQJ��ZKLFK� KDV�PDGH�PDQ\�QHZ�SURMHFWV� DQG� LQLWLDWLYHV� SRVVLEOH�� EXW�ZKLFK� LVEHFRPLQJ�WLJKWHU�x &XWV�WR�ORFDO�DXWKRULW\�DUWV�EXGJHWV�VLQFH�UH�RUJDQLVDWLRQ�x ,PSURYHPHQWV�LQ�WKH�HFRQRP\�RI� WKH�+LJKODQGV�DQG�,VODQGV��DQG�JURZWK� LQ�PRVW�DVSHFWV�RIWKH�DUWV�x 2SSRUWXQLWLHV�WKURXJK�WKH�GHYHORSLQJ�8+,�6HFWLRQ�������7KHPDWLF�&DVH�6WXGLHV3URIHVVLRQDO�7RXULQJ�&RPSDQLHVx 7KLV� VHFWRU�KDV�JURZQ�IURP�RQH� WR����FRPSDQLHV� VLQFH�������EXW� WKHUH� LV�D�KLJK�GHJUHH�RIIUDJLOLW\�x 7KH�FRPSDQLHV�JDYH�����SHUIRUPDQFHV�DW����GLIIHUHQW�YHQXHV� LQ� WKH�+LJKODQGV�DQG� ,VODQGVGXULQJ�WKH�VWXG\�\HDU��DWWUDFWLQJ�DXGLHQFHV�RI��������x $� IXUWKHU� ��� HYHQWV� RYHU� ���� SHUIRUPDQFH� GD\V� FDWHUHG� IRU� D� IXUWKHU� ������ SDUWLFLSDQWV�ZRUNVKRSV��VFKRRO�SURMHFWV��FRPPXQLW\�GUDPD�HYHQWV��HWF��x 7RWDO�ER[�RIILFH� LQFRPH� IURP�+LJKODQGV� DQG� ,VODQGV� HYHQWV�ZDV� ��������� DQG� IURP�HYHQWVRXWZLWK�WKH�DUHD����������RXW�RI�D�WRWDO�LQFRPH��LQFOXGLQJ�JUDQWV��RI����������x 7KH�FRPSDQLHV�SURYLGHG�D�WRWDO�RI����GLUHFW�IWH�MREV�5HFRUG�/DEHOVx 7KHUH�DUH�DW�OHDVW����UHFRUG�ODEHOV�EDVHG�LQ�WKH�+LJKODQGV�DQG�,VODQGV��RI�ZKLFK�DERXW�D�WKLUGGHDO�ZLWK�EDQGV�DQG�DUWLVWV�LQGHSHQGHQWO\�RI�WKHLU�SURSULHWRUV¶�RZQ�SHUIRUPDQFH�LQWHUHVWV�

Page 92: Microsoft Word - Westbrook master _1_.doc

��

x 7KH����ODEHOV�LQ�WKLV�ODWWHU�FDWHJRU\�WKDW�ZH�FRQWDFWHG�UHOHDVHG����DOEXPV�LQ�WKH�VWXG\�\HDU�VHOOLQJ��������DOEXPV��DQG�ZLWK�D�WRWDO�WXUQRYHU�RI�DURXQG�����������QHW�RI�9$7��x 7KH�VHFWRU�SURYLGHV�DERXW���GLUHFW�IWH�MREV�*DOOHULHVx 7KLV� KDV� DOVR� EHHQ� D� UDSLGO\� JURZLQJ� VHFWRU�� ZLWK� PRUH� WKDQ� ���� QRZ� HVWDEOLVKHG� LQ� WKH+LJKODQGV�DQG�,VODQGV�x 7KH�JDOOHULHV�DUH�YHU\�LPSRUWDQW�LQ�VHOOLQJ�WKH�ZRUN�RI�WKH�YHU\�ODUJH�QXPEHU�RI�YLVXDO�DUWLVWVLQ�WKH�+LJKODQGV�DQG�,VODQGV��WKH�JUHDW�PDMRULW\�RI�ZKRP�DUH�SDUW�WLPH��x 7KH�VHFWRU�SURYLGHV�DERXW����GLUHFW�IWH�MREV�6HFWLRQ�������(GXFDWLRQDO�$UWV�5HODWHG�(PSOR\PHQW7KH� IRUPDO� HGXFDWLRQ� VHFWRU� HPSOR\V� DSSUR[LPDWHO\� ���� IWH� DUWV�UHODWHG� WHDFKHUV� LQ� WKH+LJKODQGV� DQG� ,VODQGV�� � 7KLV� LV� D� UHGXFWLRQ� RI� DSSUR[LPDWHO\� ������ VLQFH� ������ GXHPDLQO\� WR� IHZHU�VSHFLDOLVW�DUW� WHDFKHUV� LQ�SULPDU\�DQG�VHFRQGDU\� VFKRROV�� �7KHUH� LV�YHU\OLWWOH� GUDPD� RU� GDQFH� WXLWLRQ� LQ� VFKRROV�� � 7KH� UHGXFWLRQ� LQ� VSHFLDOLVW� DUW� WHDFKHUV� LVDUJXDEO\�GHWULPHQWDO� WR� WKH�SURVSHFWV�RI�VFKRRO�FKLOGUHQ�DFKLHYLQJ�D� IXWXUH�FDUHHU� LQ� WKHDUWV�DQG�ZLOO�KDYH�UHGXFHG�WKH�SUHVHQFH�LQ�+LJKODQGV�DQG�,VODQGV�FRPPXQLWLHV�RI�SHRSOHZLWK�DUWLVWLF�WDOHQW�DEOH�WR�SDUWLFLSDWH�LQ�ORFDO�DFWLYLW\�/RFDO�,PSDFWV�IURP�9LVLWLQJ�3HUIRUPHUV3HUIRUPHUV� DUH� HVWLPDWHG� WR� VSHQG� DSSUR[LPDWHO\� ��������� S�D�� ZKLOH� YLVLWLQJ� WKH+LJKODQGV�DQG�,VODQGV��RI�ZKLFK����������LV�DWWULEXWDEOH� WR�SHUIRUPDQFHV�DW�(GHQ�&RXUW7KHDWUH�6HFWLRQ�������(FRQRPLF�,PSDFW�E\�/(&�$UHD)LJXUHV� IRU� HDFK� /(&� ZHUH� FDOFXODWHG� IURP� RXU� VXUYH\� HYLGHQFH� LQ� RUGHU� WR� FRPSLOH³ERWWRP�XS´� HVWLPDWHV� RI� LPSDFW� IRU� WKH� +,(� DUHD�� � 7KH� LQGLYLGXDO� /(&� DUHD� ILJXUHVVKRXOG�EH� LQWHUSUHWHG�ZLWK�FDXWLRQ�GXH� WR�PDUJLQV� IRU� HUURU�� EXW� LW� LV� LQWHUHVWLQJ� WR�QRWHWKDW�WKH�/(&�DUHDV�FUHDWLQJ�WKH�KLJKHVW�LPSDFWV�SHU�KHDG�RI�SRSXODWLRQ�DUH�%R[�2IILFH�(QWU\�)HHV

��SHU�KHDG6N\H�DQG�/RFKDOVK ������,QYHUQHVV�DQG�1DLUQ ������$UJ\OO�DQG�WKH�,VODQGV ������

Page 93: Microsoft Word - Westbrook master _1_.doc

��

$XGLHQFH�1XPEHUV�([KLELWLRQ�9LVLWRUV1R��SHU�KHDG2UNQH\ ����

6N\H�DQG�/RFKDOVK ����6KHWODQG ���

7RWDO�1XPEHU�RI�IWH�-REV�6XSSRUWHG��DGMXVWHG�IRU�WKH�PXOWLSOLHU�IWH¶V�SHUWKRXVDQG�SRS�6N\H�DQG�/RFKDOVK ����

2UNQH\ ����6KHWODQG ����6HFWLRQ�������2YHUDOO�+LJKODQGV�DQG�,VODQGV�(FRQRPLF�,PSDFW7KH� NH\� LPSDFWV� DW� WKH� +LJKODQGV� DQG� ,VODQGV� OHYHO� IRU� WKH� \HDU� 2FWREHU� ����� WR6HSWHPEHU������ZHUH�DV�IROORZV�x ([FOXGLQJ� H[KLELWLRQV�� WKHUH� ZHUH� DSSUR[LPDWHO\� ������ SXEOLF� SHUIRUPDQFHV�� DWWUDFWLQJ� DQHVWLPDWHG�WRWDO�RI���������SHRSOH�x ,Q�DGGLWLRQ��WKHUH�ZHUH�DQ�HVWLPDWHG��������H[KLELWLRQ�YLVLWRUV�x $SSUR[LPDWHO\���������WRXULVW�YLVLWV�ZHUH�PDGH�WR�HYHQWV�DQG�H[KLELWLRQV�x %R[�RIILFH�HQWU\�IHHV�WRWDOOHG�PRUH�WKDQ����PLOOLRQ�x ,Q� WHUPV� RI� WKH� VFRSH� RI� WKH� VWXG\�� WKH� DUWV� VXSSRUW� PRUH� WKDQ� ������ IWH� MREV� �LQFOXGLQJPXOWLSOLHU�HIIHFWV��6HFWLRQ�������$QDO\VLV�RI�9ROXQWDU\�$FWLYLW\:H�LGHQWLILHG�D� WRWDO�RI�����YROXQWDU\�DUWV�UHODWHG�RUJDQLVDWLRQV�DFWLYH� LQ� WKH�+LJKODQGVDQG�,VODQGV���,Q�WRWDO��WKHVH�RUJDQLVDWLRQV�KDG�DQ�HVWLPDWHG�PHPEHUVKLS�RI���������YDU\LQJZLGHO\�IURP�VLQJOH�ILJXUHV�WR�RYHU�����*URVVLQJ�XS�IURP�RXU�VXUYH\�HYLGHQFH��WKH�PHPEHUV�RI�WKHVH�RUJDQLVDWLRQV�FRQWULEXWHG�DWRWDO�RI��������GD\V�RI�XQSDLG�WLPH�LQ�SURPRWLQJ�RUJDQLVLQJ�HYHQWV�DQG�D�WRWDO�RI�������GD\V�LQ�JLYLQJ�SHUIRUPDQFHV�IRU�WKH�SXEOLF�RYHU�WKH�FRXUVH�RI�WKH�\HDU���9DOXLQJ�WKLV�ZRUNDW�D�PRGHVW����SHU�KRXU�ZRXOG�JLYH�D�WRWDO�DQQXDO�YDOXH�RI������PLOOLRQ��DQG�����IWH�MREVDQQXDOO\�0DQ\� LQGLYLGXDO� DUWLVWV� DOVR� KHOS� LQ� WKHLU� ORFDO� FRPPXQLWLHV� WKURXJK� XQSDLG� ZRUN� LQVFKRROV��HWF�

Page 94: Microsoft Word - Westbrook master _1_.doc

��

6HFWLRQ�������&KDQJHV�LQ�,PSDFW�6LQFH�����7KH� FXUUHQW� VWXG\�� IRFXVLQJ� RQ� � 2FWREHU� ����� WR� 6HSWHPEHU� ������ ZDV� PXFK� PRUHFRPSUHKHQVLYH� LQ� VFRSH� WKDQ� WKH� ,PSDFW�6WXG\� FDUULHG�RXW� IRU� WKH�SHULRG�$SULO� ����� WR0DUFK� ������ � 1HYHUWKHOHVV�� WKH� LQFUHDVHV� LQ� DFWLYLW\� DQG� UHYHQXH� IRU� WKH� DUWIRUPV� IRUZKLFK� FRPSDULVRQV� FDQ�EH�PDGH� DUH� FRQVLGHUHG� VLJQLILFDQW�� �$W� WKH�+,(� DUHD� OHYHO�� WKHIROORZLQJ�RYHUDOO�LQFUHDVHV�ZHUH�FDOFXODWHG�7RWDO�DXGLHQFHV�H[KLELWLRQ�YLVLWRUV � ������7RWDO�QXPEHU�RI�WRXULVWV�DW�HYHQWV�DQG�H[KLELWLRQV � ������7RWDO�ER[�RIILFH�HQWU\�IHHV � ������6HFWLRQ��������&RPSDULVRQV�ZLWK�2WKHU�$UHDV&RPSDUDELOLW\�ZLWK�RWKHU�VWXGLHV�DQG�VRXUFHV�RI�RIILFLDO�VWDWLVWLFV�LV�OLPLWHG�EHFDXVH RI�WKH³ERWWRP�XS´�QDWXUH�RI�RXU�DQDO\VLV�RI� WKH�DUWV� LQ� WKH�+LJKODQGV�DQG�,VODQGV�DQG�WKH�ZD\WKDW� WKH� DUWV� ZHUH� GHILQHG� IRU� WKH� SXUSRVHV� RI� WKH� VWXG\�� � 2Q� DYHUDJH�� +LJKODQGV� DQG,VODQGV�UHVLGHQWV�PDNH�DSSUR[LPDWHO\�DV�PDQ\�YLVLWV�SHU�\HDU�WR�HYHQWV�DQG�H[KLELWLRQV�DVWKH�DYHUDJH�6FRWWLVK�UHVLGHQW��EXW�ZLWK�D�SDUWLFXODUO\�VWURQJ�IRFXV�RQ�WUDGLWLRQDO�PXVLF�DQGH[KLELWLRQV�RI�FRQWHPSRUDU\�SDLQWLQJ�6HFWLRQ��������6$&�$VVLVWDQFH%HWZHHQ�$SULO������DQG�0DUFK�������WKH�6FRWWLVK�$UWV�&RXQFLO�JUDQW�DLGHG�����SURMHFWVLQ� WKH� +LJKODQGV� DQG� ,VODQGV� WR� WKH� VXP� RI� ������������ � (GHQ� &RXUW� 7KHDWUH� UHFHLYHG��������� �����RI� WKH� WRWDO��� DOWKRXJK�� DV� VKRZQ� LQ� WKLV� UHSRUW�� LW� JHQHUDWHG� VXEVWDQWLDOHFRQRPLF�LPSDFW���7KLV�WRWDO�6$&�DVVLVWDQFH�RI�DOPRVW������PLOOLRQ�UHSUHVHQWHG�������SHUKHDG� RI� SRSXODWLRQ� �� ����RI� WKH� 6FRWWLVK� DYHUDJH� ��ZKLFK�ZDV� DQ� LPSURYHPHQW� RQ� WKH����ILJXUH�WHQ�\HDUV�DJR�/RWWHU\�)XQGLQJ%HWZHHQ� WKH� VWDUW� RI� WKH�/RWWHU\� LQ� ����� DQG�2FWREHU� ������ WKH�+LJKODQGV� DQG� ,VODQGVUHFHLYHG�����$UWV�/RWWHU\�DZDUGV�ZRUWK�D� WRWDO�RI�������������� �7KLV� UHSUHVHQWV�������SHU� KHDG� RI� SRSXODWLRQ� FRPSDUHG� ZLWK� ������� IRU� 6FRWODQG� DV� D� ZKROH�� DOWKRXJK� WKHDYHUDJH�IRU�WKH�+LJKODQGV�DQG�,VODQGV�ZLOO�IDOO�WR��������SHU�KHDG�LI�WKH�$Q�/DQQWDLU�DUWVFHQWUH�SURMHFW� LQ�6WRUQRZD\�GRHV� QRW� SURFHHG�� �$SSUR[LPDWHO\� ���� VPDOO� JURXSV� LQ� WKH+LJKODQGV�DQG�,VODQGV�KDG�UHFHLYHG�VRPH���������� LQ�$ZDUGV�)RU�$OO /RWWHU\�IXQGLQJE\�)HEUXDU\������7KH�2EMHFWLYH���3URJUDPPH$UWV� SURMHFWV� UHFHLYHG� (5')� IXQGLQJ� WRWDOOLQJ� ������ PLOOLRQ� WKURXJK� WKH� 2EMHFWLYH� �3URJUDPPH�������������IRU����SURMHFWV���$UWV�WUDLQLQJ�SURMHFWV�UHFHLYHG����������LQ�(6)IXQGLQJ�

Page 95: Microsoft Word - Westbrook master _1_.doc

��

7KH�/HDGHU�,,�3URJUDPPH���� SURMHFWV� ZHUH� DVVLVWHG� WKURXJK� WKH� /HDGHU� ,,� 3URJUDPPH�� UHFHLYLQJ� (8� IXQGLQJWRWDOOLQJ������������7KH�:HVWHUQ�,VOHV�DQG�6N\H�DQG�/RFKDOVK�PDGH�SDUWLFXODU�XVH�RI�WKLV3URJUDPPH�WR�IXQG�QHZ�DUWV�LQLWLDWLYHV�6HFWLRQ��������6RFLDO�,PSDFWV6RFLDO�LPSDFWV�DQG�WUHQGV��DQG�GLIILFXOWLHV�WKDW�YROXQWDU\�RUJDQLVDWLRQV�KDYH�LQ�SURYLGLQJDUWLVWLF� DFWLYLW\� LQ� ORFDO� DUHDV� ZHUH� H[SORUHG� WKURXJK� FDVH� VWXGLHV� LQ� &DLWKQHVV� DQG6WRUQRZD\�� DQG� WKURXJK� RWKHU� UHVHDUFK� FDUULHG� RXW� IRU� WKLV� ,PSDFW� 6WXG\�� � .H\� SRLQWVLQFOXGHG�WKH�IROORZLQJ�x 'HVSLWH�SURJUHVV�RYHU�WKH�SDVW�WHQ�\HDUV��WKH�DUWV�KDYH�QRW�\HW�UHDOLVHG�WKHLU�IXOO�SRWHQWLDO�x :HDNQHVVHV�LQ�SXEOLF�VHFWRU�IXQGLQJ�VXSSRUW�DUH�DQ�LPSRUWDQW�DVSHFW�RI�WKLV�IDLOXUH�x ,QFUHDVHG� DZDUHQHVV� RI� *DHOLF� DQG� WKH� UHFRJQLWLRQ� RI� WKLV� E\� IXQGLQJ� ERGLHV� KDYH� EHHQLPSRUWDQW�SRVLWLYH�IDFWRUV��HJ��LQ�VXSSRUWLQJ�WKH�JURZWK�RI�IHLVHDQ��x 7KH� ODFN� RI� D� FXVWRPLVHG� PXOWL�SXUSRVH� DUWV� YHQXH� LQ� SDUWLFXODU� DUHDV� �HJ�� &DLWKQHVV�/RFKDEHU�DQG�/HZLV��KDV�KHOG�XS�SURJUHVV�x $UWV�RUJDQLVDWLRQV�KDYH�KDG�YHU\�GLIIHUHQW�H[SHULHQFHV�RYHU�WKH�SDVW�WHQ�\HDUV��SRVLWLYH�DQGQHJDWLYH��� DOWKRXJK� LQ� PDQ\� FDVHV� WKH� VDPH� NH\� SHRSOH� KDYH� NHSW� XS� KLJK� OHYHOV� RIFRPPLWPHQW�x 7KHUH�LV�OLPLWHG�QHWZRUNLQJ�ZLWKLQ�DQG�EHWZHHQ�DUHDV�E\�DUWV�UHODWHG�RUJDQLVDWLRQV��DOWKRXJK3$1�LV�D�QRWDEOH�H[FHSWLRQ��DQG�0,'$6�KDV�SURPRWHG�FR�RUGLQDWLRQ�LQ�WKH�PXVLF�VHFWRU��x 7KHUH�LV�D�FRQWLQXDO�VWUXJJOH�WR�REWDLQ�VXIILFLHQW�IXQGLQJ�WR�VXUYLYH�GHYHORS�x 7KHUH�KDV�EHHQ�DQ�LQFUHDVLQJ�DSSUHFLDWLRQ�RI�WKH�SHUVRQDO�HQULFKPHQW�WKDW�SDUWLFLSDQWV�LQ�DUWVHYHQWV�DQG�WKHLU�DXGLHQFHV�FDQ�JDLQ�x 7UDGLWLRQDO�PXVLF�KDV�XQGHUJRQH�D�UHQDLVVDQFH��DWWUDFWLQJ�D�QHZ�JHQHUDWLRQ�RI�\RXQJ�SHRSOH�x 7KH�EXLOW�LQIUDVWUXFWXUH�RI�WKH�UXUDO�+LJKODQGV�DQG�,VODQGV�KDV�EHHQ�ERRVWHG�E\�D�QXPEHU�RIVWUDWHJLF�YLOODJH�KDOO�GHYHORSPHQWV�WKDW�HQDEOH�KLJKHU�TXDOLW\�DUWV�DFWLYLW\�6HFWLRQ��������&XOWXUDO�7RXULVP7RXULVW�YLVLWV�WR�DUWV�HYHQWV�DQG�H[KLELWLRQV�KDYH�JURZQ�FRQVLGHUDEO\��EXW�WKH�ULFKQHVV�RIWKH�DUWV�LQ�WKH�+LJKODQGV�DQG�,VODQGV�KDV�EHHQ�UHODWLYHO\�XQH[SORLWHG�LQ�PDUNHWLQJ�WKH�DUHDDQG�LQ�QLFKH�SURGXFW�GHYHORSPHQW�&XOWXUDO�WRXULVWV�WHQG�WR�JHQHUDWH�UHODWLYHO\�KLJK�HFRQRPLF�LPSDFW��DQG�WHQG�WR�KDYH�D�KLJKUDWH�RI�UHSHDW�YLVLWV��HVSHFLDOO\�IHVWLYDO�DQG�VSHFLDO�HYHQW�YLVLWRUV��$� UDQJH� RI� ZD\V� RI� SURPRWLQJ� FXOWXUDO� WRXULVP� WKURXJK� DUWV� GHYHORSPHQW� DQG� FUHDWLQJOLQNV�EHWZHHQ�WKH�DUWV�DQG�RWKHU�FXOWXUDO�VHFWRUV�DUH�SXW�IRUZDUG�LQ�6HFWLRQ����

Page 96: Microsoft Word - Westbrook master _1_.doc

��

���� 3URJUHVV�6LQFH�����7KH������,PSDFW�6WXG\�UHFRPPHQGHG�D�UDQJH�RI�PHDVXUHV�IRU�LQFUHDVLQJ�HFRQRPLF�DQG�VRFLDOLPSDFW���7KH�SURJUHVV�WKDW�KDV�EHHQ�PDGH��DV�IDU�DV�ZH�KDYH�EHHQ�DEOH�WR�MXGJH�WKURXJK�RXUUHVHDUFK��LV�VXPPDULVHG�EHORZ�,QFUHDVLQJ�(FRQRPLF�,PSDFW�L� ,QFUHDVLQJ�$XGLHQFHV7KH� LQIRUPDWLRQ� ZH� KDYH� FROODWHG� RQ� HYHQWV� DQG� DWWHQGDQFHV� VXJJHVW� �DV� KLJKOLJKWHG� LQ6HFWLRQ����WKDW�DWWHQGDQFHV�KDYH�JURZQ�VXEVWDQWLDOO\�LQ�DJJUHJDWH�VLQFH��������7KLV�KDV�EHHQDFKLHYHG�PXFK�PRUH� WKURXJK� DQ� LQFUHDVHG� QXPEHU� RI� HYHQWV� DQG� H[KLELWLRQV� WKDQ� WKURXJKLQFUHDVHG� DYHUDJH� DWWHQGDQFHV� DW� SDUWLFXODU� HYHQWV�� � $Q� LQFUHDVH� LQ� WKH� QXPEHU� RI� ORFDOSURPRWHUV� ZKR� KDYH� LQWURGXFHG� DUWV� HYHQWV� LQWR� PRUH� FRPPXQLWLHV� KDV� KHOSHG�� DV� KDVLQFUHDVHG�DJJUHJDWH�DWWHQGDQFHV�E\�YLVLWRUV��HVSHFLDOO\�DW�WKH�H[SDQGHG�UDQJH�RI�JDOOHULHV���LL� &UHDWLQJ�9HQXHV7KHUH�KDV�EHHQ�PRUH�VXFFHVV�LQ�FUHDWLQJ�DQG�LPSURYLQJ�VPDOO�VFDOH�YHQXHV�WKDQ�LQ�GHYHORSLQJPXOWL�SXUSRVH� DUWV� FHQWUHV�RU� VPDOO� WKHDWUH� VSDFHV� LQ� WKH� ODUJHU� WRZQV�� �'HYHORSPHQWV� KDYHLQFOXGHG�$Q�7REDU��7REHUPRU\���$URV��3RUWUHH���7DLJK�&KHDUVDEKDJK��1RUWK�8LVW���%RQKRJD*DOOHU\��6KHWODQG���DQG�QHZ�YLOODJH�KDOOV�DQG�VFKRROV�ZLWK�JRRG�DUWV�IDFLOLWLHV��LLL� ,QFUHDVLQJ�WKH�1XPEHU�RI�)HVWLYDOV0XFK� RI� WKH� DGGLWLRQDO� HFRQRPLF� LPSDFW� WKDW� KDV� EHHQ� JHQHUDWHG� VLQFH� ����� LV� GXH� WR� WKHLQFUHDVH�LQ�WKH�QXPEHU�RI�IHVWLYDOV�WKDW�KDYH�EHHQ�KHOG�DQQXDOO\�LQ�WKH�+LJKODQGV�DQG�,VODQGV�6RPH�DUHDV��HJ��$UJ\OO�DQG�WKH�,VODQGV��QRZ�VXSSRUW�D�QXPEHU�RI�IHVWLYDOV��DOWKRXJK�LW�VKRXOGEH�DSSUHFLDWHG�WKDW�PDQ\�VXFFHVVIXO�IHVWLYDOV�LQ�ORFDOLWLHV�VXFK�DV�$YLHPRUH�DQG�0LOOSRUW�DUHQRW�HQWLUHO\�DUWLVWLF� LQ�FRQWHQW�� �7KHVH�QHZ�IHVWLYDOV�KDYH�SURYHG�JHQHUDOO\� VXVWDLQDEOH�ZLWKOHYHOV�RI�SXEOLF�VXSSRUW�WKDW�DUH�PRGHVW�LQ�UHODWLRQ�WR�WKHLU�HFRQRPLF�DQG�VRFLDO�EHQHILWV��LY� ,QFUHDVLQJ�/RFDO�3DUWLFLSDWLRQ�LQ�WKH�$UWV7KLV� KDV� EHHQ� DFKLHYHG� WKURXJK� DQ� LQFUHDVH� LQ� WKH� QXPEHU� RI� DUWV� RUJDQLVDWLRQV� DQG� WKHVXFFHVV�LQ�PDQ\�DUHDV�LQ�LQFUHDVLQJ�SDUWLFLSDWLRQ�E\�\RXQJ�SHRSOH�WKURXJK�HYHQWV�VXFK�DV�WKHIHLVHDQ� �DQG� LQFUHDVLQJO\� WKH� IROORZ�RQ� FODVVHV�� DQG� /RWWHU\�IXQGHG� SURMHFWV�� VXFK� DV/RFKDEHU� 0XVLF� 6FKRRO�� 6N\H� DQG� /RFKDOVK� <RXQJ� 0XVLF� 0DNHUV�� DQG� WKH� +LJKODQG$&7LYDWRUV�3URJUDPPH�IRU�WKH������DJH�JURXS�7KH�+LJKODQG�)HVWLYDO�KDV�IDFLOLWDWHG�D�QXPEHU�RI�YHU\�VXFFHVVIXO�FRPPXQLW\�DUWV�HYHQWV�WKDWKDYH�DWWUDFWHG�WRXULVW�YLVLWRUV��DQG�WKH�/HDGHU�,,�3URJUDPPH�ZDV�LPDJLQDWLYHO\�XVHG�LQ�VRPHDUHDV��QRWDEO\�WKH�:HVWHUQ�,VOHV�DQG�6N\H��WR�SXPS�SULPH�QHZ�LQLWLDWLYHV�<RXQJ�SHRSOH¶V�HYHQWV�FDQ�DWWUDFW�VLJQLILFDQW�DXGLHQFHV��DQG�PDQ\�RI� WKH�QHZ�GHYHORSPHQWDQG� WUDLQLQJ� LQLWLDWLYHV� IURP� UHFHQW�\HDUV�ZLOO� EHDU� IUXLW� LQ� WKH� IXWXUH� LQ� WHUPV� RI� HFRQRPLFLPSDFW� DV� ORQJ� DV� DSSURSULDWH� VXSSRUW� � VWUXFWXUHV� DUH� PDLQWDLQHG� �RU� LQWURGXFHG� ZKHUHQHHGHG��

Page 97: Microsoft Word - Westbrook master _1_.doc

��

�Y� 0RUH�(PSKDVLV�RQ�3RSXODU &XOWXUH7KLV�KDV�EHHQ�DFKLHYHG�SDUWLFXODUO\�VXFFHVVIXOO\�LQ�WKH�PXVLF�VHFWRU��DOWKRXJK�RXWO\LQJ�DUHDVZLWKRXW�PDMRU�YHQXHV� VWLOO� KDYH�GLIILFXOW\� LQ� DWWUDFWLQJ� WKH�TXDOLW\�RI�EDQGV�� FRPHGLDQV�� HWFWKDW�DSSHDO�WR�WKH�\RXQJ��DQG�WKH�QRW�VR�\RXQJ��&LQHPD�SURYLVLRQ�KDV�JUHDWO\�H[SDQGHG�RYHU� WKH�SDVW� WHQ�\HDUV��PRVW�PDUNHGO\�LQ�,QYHUQHVVZLWK�WKH�:DUQHU�9LOODJH�DQG�WKURXJK�WKH�PRELOH�³6FUHHQ�0DFKLQH´�,QFUHDVLQJ�6RFLDO�,PSDFW�L� 6XSSRUWLQJ�/RFDO�2UJDQLVDWLRQV$V� RXU� FDVH� VWXGLHV� GHPRQVWUDWHG�� VXFFHVV� LQ� WKLV� KDV� EHHQ� SDWFK\�� � 6RPH� JURXSV� KDYHDFKLHYHG� KXJH� SURJUHVV� WKURXJK� DWWUDFWLQJ�PDMRU� IXQGLQJ� IURP� WKH�/RWWHU\�� WKH�2EMHFWLYH� �3URJUDPPH�� HWF�� EXW� RWKHUV� KDYH� VWUXJJOHG� IURP� \HDU�WR�\HDU� WR�PDLQWDLQ� UHODWLYHO\�PRGHVWSURJUDPPHV�+,�$UWV�KDV�KHOSHG�PDQ\�RUJDQLVDWLRQV�WR�LQWURGXFH�QHZ�LQLWLDWLYHV�RU� WR�EHFRPH�PRUH�VHOI�VXSSRUWLQJ��DQG�WKH�FORVH�VXSSRUW�WKURXJK�0,'$6�LQ�WKH�PXVLF�VHFWRU�DQG�WKH�QHZ�JDOOHULHVDGYLVRU�DUH�SDUWLFXODUO\�DSSUHFLDWHG�$FWLYLWLHV� VXFK�DV�GDQFH�DQG�FUHDWLYH�ZULWLQJ� WKDW�KDYH�EHHQ�ERRVWHG�E\� DUWLVWV�LQ�UHVLGHQFHIRU� SHULRGV� LQ� SDUWLFXODU� DUHDV� KDYH� SURYHG� GLIILFXOW� WR� VXVWDLQ� �TXDOLWDWLYHO\� DQGTXDQWLWDWLYHO\��ZKHUH�VXFK�VXSSRUW�KDV�ODWHU�EHHQ�ZLWKGUDZQ�RU�UHGXFHG��LL� 6SUHDGLQJ�%HQHILWV�LQWR�&RPPXQLWLHV�WKDW�KDG�QRW�$WWUDFWHG�$UWV�(YHQWV�DQG�([KLELWLRQV7KH� LQFUHDVHV� LQ� HYHQWV� DQG� DUWLVWLF� RUJDQLVDWLRQV� UHIHUUHG� WR� DERYH� LQ� DOO� /(&� DUHDV� KDYHKHOSHG� WR� DFKLHYH� WKLV�� EXW� LQGLYLGXDO� FRPPXQLWLHV� UHPDLQ� ODUJHO\� GHSHQGHQW� RQ� LQLWLDWLYHVIURP�ZLWKLQ�� �$UWV� RIILFHUV� DUH� JHQHUDOO\� VSUHDG� WRR� WKLQO\� WR� SURPRWH� QHZ� DFWLYLWLHV� LQ� DOOSDUWV� RI� WKH� +LJKODQGV� DQG� ,VODQGV�� EXW� D� JRRG� H[DPSOH� IURP� 6KHWODQG� KDV� EHHQ� WKHHVWDEOLVKPHQW�RI�DQ�DUWV�QHWZRUN�DFURVV�D�ODUJH�QXPEHU�RI�UXUDO�YLOODJH�KDOOV�SURPRWHG�E\�WKH6KHWODQG�$UWV�7UXVW��LLL� (QFRXUDJLQJ�0RUH�3HRSOH�:LWKLQ�&RPPXQLWLHV�WR�%HFRPH�$FWLYHO\�,QYROYHG�LQ�WKH�$UWV�(VSHFLDOO\�<RXQJ�3HRSOH7KH�HYLGHQFH�WKDW�ZH�KDYH�JDWKHUHG�VXJJHVWV�WKDW�WKLV�KDV�EHHQ�DFKLHYHG�LQ�PRVW�/(&�DUHDVWKURXJK�DQ�LQFUHDVH�LQ�DFWLYLW\�DFURVV�D�ZLGH�UDQJH�RI�DUWIRUPV�3UHVVXUHV� RQ� WKH� FXUULFXOXP� DQG� IXQGLQJ� FRQVWUDLQWV� RQ� /RFDO� $XWKRULWLHV� DUH�� KRZHYHU�UHGXFLQJ� WKH�H[WHQW�DQG�TXDOLW\�RI�DUWV� WHDFKLQJ�DQG�DFWLYLWLHV� LQ�PDQ\�VFKRROV� �� DOWKRXJK�DQXPEHU�RI�QHZ�FRPPXQLW\�VFKRROV�KDYH�EHHQ�EXLOW�ZLWK�H[FHOOHQW�DUWV�IDFLOLWLHV�

Page 98: Microsoft Word - Westbrook master _1_.doc

��

�LY� 3URPRWLQJ�$UWV�'HYHORSPHQW� LQ�&RPPXQLWLHV�DV�D�0HDQV�RI�%RRVWLQJ�6HOI�&RQILGHQFH�&UHDWLQJ� &RPPHUFLDO� 2SSRUWXQLWLHV�� DQG� %XLOGLQJ� DQ� ,PDJH� RI� WKH� +LJKODQGV� DQG,VODQGV�([WHUQDOO\�DV�D�9LEUDQW�$UHD�2IIHULQJ�D�:LGH�5DQJH�RI�$UWLVWLF�³3URGXFWV´3DUWLFXODU�SURMHFWV�KDYH�DFKLHYHG�WKLV�LQ�D�ORFDO�FRQWH[W��IRU�H[DPSOH�7DLJK�&KHDUVDEKDJK�LQ1RUWK�8LVW�DQG�$URV�LQ�3RUWUHH���$GGUHVVLQJ�WKLV�RSSRUWXQLW\�DFURVV�WKH�+LJKODQGV�DQG�,VODQGVUHPDLQV�D�FKDOOHQJH���KRZHYHU��WKDW�ZLOO�UHPDLQ�D�GUHDP�ZLWKRXW�PDMRU�LQYHVWPHQW�LQ�YHQXHVDQG� SXEOLF� VXSSRUW� IRU� FRPPXQLWLHV�� DUWV� JURXSV� DQG� LQGLYLGXDOV� WR� XVH� WKHVH� DQG� H[LVWLQJYHQXHV�WR�SURPRWH�D�UDQJH�RI�QHZ�DQG�GLVWLQFWLYH�DFWLYLWLHV�

Page 99: Microsoft Word - Westbrook master _1_.doc

��

���� 5(&200(1'$7,216� )25� ,1&5($6,1*� (&2120,&� $1'� 62&,$/,03$&77KH� PDLQ� LVVXHV� ZKLFK� DURVH� GXULQJ� WKH� FRQVXOWDWLRQ� DQG� ZKLFK� DUH� DGGUHVVHG� E\� RXUUHFRPPHQGDWLRQV�DUH�DV�IROORZV�

x ,QFUHDVHG�DZDUHQHVV�E\�SXEOLF�SROLF\�PDNHUV�RI�WKH�VRFLDO�DQG�HFRQRPLF�SRWHQWLDO�RI�WKH�DUWV�x *UHDWHU�LQYHVWPHQW�LQ�WKH�DUWV�LQIUDVWUXFWXUH�x ,QFUHDVHG�LQWHJUDWLRQ�RI�WKH�DUWV�ZLWK�RWKHU�VHFWRUV�x %XLOGLQJ�VXVWDLQDEO\�RQ�QHZ�LQLWLDWLYHV�VXSSRUWHG�E\�WLPH�OLPLWHG�SXEOLF�IXQGLQJ�x $FWLRQ�ZKLFK�FDQ�EH�WDNHQ�E\�WKH�DUWV�VHFWRU����� ,QFUHDVHG�$ZDUHQHVV�RI�WKH�6RFLDO�DQG�(FRQRPLF�3RWHQWLDO�RI�WKH�$UWV7KHUH�VKRXOG�EH�D�FR�RUGLQDWHG�HIIRUW�WR�LQIRUP�SROLF\�PDNHUV�ZLWKLQ�WKH�SXEOLF�VHFWRU�DERXWWKH�EHQHILWV�RI�WKH�DUWV�VR�WKDW�WKHLU�SRWHQWLDO�PLJKW�EH�PRUH�IXOO\�UHDOLVHG�7KLV�VKRXOG�EH�DFKLHYHG�QDWLRQDOO\ ZLWKLQ�WKH�IUDPHZRUN�RI�WKH�&XOWXUDO�6WUDWHJ\��UHJLRQDOO\ZLWKLQ�WKH�SROLF\�IUDPHZRUN�RI�WKH�+,(�1HWZRUN��DQG�ORFDOO\ ZLWKLQ�WKH�VWUDWHJLF�FRPPXQLW\SODQQLQJ�RI�/RFDO�$XWKRULWLHV��7KHUH�VKRXOG�EH�FOHDU�OLQNV�EHWZHHQ�WKHVH�WKUHH�OHYHOV�$� 6WUDWHJ\� IRU� $GYRFDF\� RI� WKH� $UWV� WR� OREE\� DQG� LQIOXHQFH� SROLF\� DQG� GHFLVLRQ� PDNHUVVKRXOG�EH�SURGXFHG�DQG�LPSOHPHQWHG�,Q�DGGLWLRQ��JXLGHOLQHV�IRU�JRRG�SUDFWLFH�VKRXOG�EH�HVWDEOLVKHG�WR�HQFRXUDJH�ORFDO�QHWZRUNLQJDQG�VWUDWHJLF�VKDULQJ�RI�UHVRXUFHV�$� FOHDU� DQG� DFFHSWHG� IRUPDW� IRU� VHOI�HYDOXDWLRQ� DQG� LQGHSHQGHQW� HYDOXDWLRQ� RI� DUWVRUJDQLVDWLRQV�DQG�HYHQWV�LQ�WHUPV�RI�VRFLDO�DQG�HFRQRPLF�LPSDFW�VKRXOG�EH�LQWURGXFHG�DV�DQLQWHJUDO�SDUW�RI�SXEOLF�VHFWRU�ILQDQFLDO�VXSSRUW����� *UHDWHU�,QYHVWPHQW�LQ WKH�$UWV�,QIUDVWUXFWXUH$V�VXPPDULVHG� LQ� WKH�VWXG\¶V�FRQFOXVLRQV�� WKH� LQYHVWPHQWV� WKDW�KDYH�EHHQ�PDGH� LQ� WKH�DUWVRYHU� WKH� SDVW� WHQ� \HDUV� KDYH� SURYLGHG� FRQVLGHUDEOH� EHQHILWV� WR� WKH� +LJKODQGV� DQG� ,VODQGV�7KHUH� DUH� JDSV� LQ� SURYLVLRQ�� KRZHYHU�� DQG� RSSRUWXQLWLHV� WR� UHDOLVH� SRWHQWLDO� WKDW� UHTXLUHVWUDWHJLFDOO\�GHWHUPLQHG��DQG�LQ�VRPH�FDVHV��VLJQLILFDQW�IXQGLQJ���,Q�UHVSRQVH�WR�WKHVH�QHHGV�WKH�SXEOLF�VHFWRU�IXQGLQJ�ERGLHV�VKRXOG�

x $FNQRZOHGJH�WKH�YDOXH�RI�LQYHVWPHQW�LQ�WKH�DUWV� LQIUDVWUXFWXUH�DFURVV�D�UDQJH�RI�VRFLDO�DQGHFRQRPLF�REMHFWLYHV�x 3ODQ�WR�LQFUHDVH�VLJQLILFDQWO\�WKHLU�ILQDQFLDO� LQYHVWPHQW�LQ� WKH�VHFWRU� LQFUHPHQWDOO\�RYHU� WKHQH[W�WHQ�\HDUV�x $FWLYHO\�HQFRXUDJH�DQ�LQFUHDVH�LQ�KXPDQ�UHVRXUFHV�VXSSRUW�WR�WKH�VHFWRU�x $FWLYHO\�SXUVXH�D�YDULHW\�RI�VWUDWHJLF�KLJK�SURILOH�DUWV�SURMHFWV��ERWK�EXLOGLQJ�GHYHORSPHQWVDQG�HYHQWV��LQFOXGLQJ�WKH�,QYHUQHVV�+LJKODQG�&DSLWDO�RI�&XOWXUH������ELG��

Page 100: Microsoft Word - Westbrook master _1_.doc

��

x &R�RUGLQDWH�DQG�HQFRXUDJH�LQYHVWPHQW�LQ�YLOODJH�KDOO�DQG�FRPPXQLW\�FHQWUH�GHVLJQ��EXLOGLQJDQG�UHIXUELVKPHQW��ZLWK�D�YLHZ�WR�JLYLQJ� WKHP�D�PRUH�FHQWUDO�DQG�IOH[LEOH�DUWV� UROH�� �/RFDODUWV�RIILFHUV�VKRXOG�IRVWHU�WKH�GHYHORSPHQW�RI�ORFDO�DUWV�DVVRFLDWLRQV�RU�KDOO�FRPPXQLW\�FHQWUHDUWV�VXE�FRPPLWWHHV��ZKHUH�WKHVH�GR�QRW�FXUUHQWO\�H[LVW�� LQ�RUGHU�WR�SURPRWH�DUWV�XVDJH�DQGQHZ�LQLWLDWLYHV�WKDW�PDNH�XVH�RI�WKH�IDFLOLWLHV�x &RQWLQXH� WR� IRFXV� RQ�PXVLF� DV� D� VHFWRU� LQ�ZKLFK�PDQ\�SDUWV� RI� WKH�+LJKODQGV� DQG� ,VODQGVKDYH�D�FRPSDUDWLYH�DGYDQWDJH�LQ�WHUPV�RI�WHFKQLFDO�VNLOOV��HQWKXVLDVP��DQG�WKH�LQYROYHPHQW�RI\RXQJ�SHRSOH�x ([SORUH�WKH�SRVVLELOLW\�RI�HVWDEOLVKLQJ�$UWV�7UXVWV��DW�DSSURSULDWH�VSDWLDO�OHYHOV�� WR�VWLPXODWHDQG�HQFRXUDJH�DUWV�GHYHORSPHQW��DQG�DV�FKDQQHOV�IRU�SXEOLF��SULYDWH�DQG�FKDULWDEOH�IXQGLQJ�

���� ,QFUHDVHG�,QWHJUDWLRQ�RI�WKH�$UWV�ZLWK�2WKHU�6HFWRUV7KH�UHOHYDQW�SXEOLF�DJHQFLHV�VKRXOG�

x (QFRXUDJH�WKH�JURZWK�RI�WKH�+LJKODQG�$UWV�3DUWQHUVKLS�WR�LQFOXGH�WKH�,VODQGV��DQG�RWKHU�SDUWVRI�WKH�+,(�DUHD���DQG�WR�DVVLVW�LQ�GHYHORSLQJ�PRUH�IRFXVVHG��VKDUHG�DVSLUDWLRQV�DQG�VWUDWHJLHV�x (QFRXUDJH� WKH� FUHDWLRQ� RI� D� &UHDWLYH� ,QGXVWULHV� JURXSLQJ� WKDW� ZRXOG� VHHN� WR� GHYHORS� DSRZHUIXO�SDQ�+LJKODQG�DQG�,VODQGV�LQGXVWU\�x :RUN�ZLWK� WKH�8+,�0LOOHQQLXP�,QVWLWXWH� WR�HQVXUH� WKDW� WKH�DUWV�DUH�D�FHQWUDO�HOHPHQW�RI� LWVFXUULFXOXP�� ZLWK� HPSKDVLV� RQ� WKH� DUHD¶V� SDUWLFXODU� VWUHQJWKV�� LH�� LQGLJHQRXV� DUWIRUPV�FRPPXQLW\�DQG�UXUDO�DUWV�GHYHORSPHQW��HWF�x :RUN�ZLWK�WKH�DUHD¶V�7RXULVW�%RDUGV�DQG�WRXULVP�LQGXVWU\�WR�HQVXUH�WKDW�WKH�DUWV�DUH�VHHQ��DQGSURPRWHG��DV�DQ�LQWHJUDO�SDUW�RI�WKH�DUHD�DQG�D�VWURQJ�UHDVRQ�IRU�SHRSOH�WR�YLVLW�x 'HYHORS� WKH� ZRUN� RI� WKH� +LJKODQG� DQG� ,VODQGV� )LOP� &RPPLVVLRQ� WR� HPEUDFH� WKH� HQWLUHEURDGFDVWLQJ�VHFWRU�x +HOS� DUWLVWV� EDVHG� LQ� WKH� DUHD� WR� PD[LPLVH� EHQHILWV� IURP� ILOP� DQG� YLGHR� SURGXFWLRQRSSRUWXQLWLHV�

���� 6XVWDLQDELOLW\$UWV� RUJDQLVDWLRQV� �FRPPHUFLDO� DQG� YROXQWDU\�� DQG� ORFDO� FRPPXQLW\� JURXSV� SODQQLQJ� QHZDUWV�UHODWHG�LQLWLDWLYHV�W\SLFDOO\�QHHG�KHOS�LQ�LGHQWLI\LQJ�WKH�ZD\�IRUZDUG�DIWHU�WKH�SHULRG�IRUZKLFK� IXQGLQJ� LV� VRXJKW� �IURP� WKH� /RWWHU\�� 6$&�� ORFDO� DXWKRULW\�� HWF��� DQG� DOVR� ZKLOH� WKHLQLWLDWLYH� LV� LQ� SURJUHVV�� WR� EXLOG� RQ� LWV� VWUHQJWKV� DQG� RQ� RSSRUWXQLWLHV� WKDW� KDYH� EHFRPHDSSDUHQW�� DQG� WR� WDFNOH� ZHDNQHVVHV�� � $UWV� RIILFHUV�� RWKHU� DJHQF\� VWDII� DQG� VSHFLDOLVWFRQVXOWDQWV�FDQ�DOO�SOD\�D�SDUW�LQ�WKLV�$�NH\�FKDOOHQJH�LV�WR�ILQG�ZD\V�RI�UHF\FOLQJ�WKH�HFRQRPLF�EHQHILWV�WKDW�WKH�DUWV�FDQ�JHQHUDWHWR� UHGXFH� GHSHQGHQFH� RQ� RQJRLQJ� SXEOLF� IXQGLQJ�� � 7KLV� FRXOG� HQWDLO� JUHDWHU� SDUWQHUVKLSEHWZHHQ�ORFDO�DUWV�SURPRWHUV�DQG�DUWLVWV�DQG�WKH�WRXULVP�HVWDEOLVKPHQWV�WKDW�EHQHILW�IURP�WKHVSHQGLQJ�RI�YLVLWRUV�GUDZQ�WR�DQ�DUHD��DW�OHDVW�SDUWLDOO\��WR�HQMR\�LWV�DUWLVWLF�DFWLYLW\�

Page 101: Microsoft Word - Westbrook master _1_.doc

��

���� $FWLRQ�:KLFK�&DQ�EH�7DNHQ�E\�WKH�$UWV�6HFWRU7KH�DUWV�VHFWRU� LQ� WKH�+LJKODQGV�DQG�,VODQGV� LV�KLJKO\�GHSHQGHQW�RQ�YROXQWDU\� LQSXW�DQG�RQDUWLVWV�ZKR�UHTXLUH�RWKHU�SDLG�HPSOR\PHQW�WR�VXSSRUW�WKHPVHOYHV�DQG�WKHLU�IDPLOLHV�LQ�RUGHU�WRFRQWLQXH� WR� SXUVXH� DUWLVWLF� LQWHUHVWV� ZKLFK� ZLOO� RIWHQ� SURYLGH� WKHP�ZLWK� VPDOO� �LI� DQ\�� QHWILQDQFLDO�EHQHILW���$OWKRXJK�WKHUH�ZLOO�EH�VRPH�DUHDV�ZKHUH�WKHUH�LV�VFRSH�WR�GHYHORS�WKH�DUWVWKURXJK� LQFUHDVHG�YROXQWDU\�HIIRUW�E\�SHRSOH�QRW�FXUUHQWO\� LQYROYHG�� WKH�FRQWULEXWLRQ�E\� WKHVHFWRU� LWVHOI� WRZDUGV�LQFUHDVLQJ�WKH�HFRQRPLF�DQG�VRFLDO� LPSDFW�RI� WKH�DUWV� LQ� WKH�+LJKODQGVDQG�,VODQGV�ZRXOG� ODUJHO\�FRPH� IURP�DGMXVWPHQWV�RI� IRFXV�DQG� WKURXJK�SXUVXLQJ� LQLWLDWLYHVWKDW�ZLOO�EULQJ�PRUH�IXQGLQJ�LQWR�WKH�DUWV�IURP�EXVLQHVVHV��WUXVW�IXQGV��DXGLHQFHV��DQG�IXQGLQJVRXUFHV�H[WHUQDO�WR�WKH�+LJKODQGV�DQG�,VODQGV�7KH� DUWV� FRPPXQLW\� VKRXOG� WKXV� DGGUHVV� WKH� IROORZLQJ� RSSRUWXQLWLHV� WR� FRPSOHPHQW� WKHPHDVXUHV� UHFRPPHQGHG� XQGHU� ����� WR� ����� DERYH��ZKLFK� DUH�PDLQO\� WDUJHWHG� DW� WKH� SXEOLFVHFWRU�

x ,QFUHDVH� FROODERUDWLRQV� ZLWKLQ� WKH� DUWV� VHFWRU�� ZLWK� RWKHU� FUHDWLYH� LQGXVWULHV�� DQG� ZLWK� WKHWRXULVP�LQGXVWU\�LQ�RUGHU�WR�GHYHORS�LQQRYDWLYH�SURMHFWV�WKDW�ZLOO�DWWUDFW�VXSSRUW�IXQGLQJ��DQGWR�GHYHORS�ODUJHU�SURMHFWV�WKDQ�ZRXOG�EH�SRVVLEOH�IRU�D�VLQJOH�RUJDQLVDWLRQ� WKDW�FDQ�DFKLHYHHFRQRPLHV�RI�VFDOH���7KHVH�FROODERUDWLRQV�VKRXOG�LQFOXGH�SDUWQHUVKLSV�ZLWK�SXEOLF�VHFWRU�DUWVSURYLGHUV��DV�ZHOO�DV�EHWZHHQ�YROXQWDU\�DQG�SULYDWH�RUJDQLVDWLRQV�DQG�EXVLQHVVHV�� � ,W�ZRXOGEH�SDUWLFXODUO\�EHQHILFLDO� IRU�DUWV�RUJDQLVDWLRQV� LQ� ODUJHU�FHQWUHV�VXFK�DV�,QYHUQHVV�DQG�)RUW:LOOLDP�WR�ZRUN�WRJHWKHU�HIIHFWLYHO\�x 7DNH� DGYDQWDJH� RI� WKH� LQFHQWLYHV� DQG� VXSSRUW� VHUYLFHV� DYDLODEOH� WR� SURPRWH� EXVLQHVVVSRQVRUVKLS�RI�WKH�DUWV�x 'HYHORS�QHZ�DXGLHQFHV�WKURXJK�SURJUDPPLQJ�WKDW�ZLOO�DWWUDFW�\RXQJ�SHRSOH��SHRSOH�ZLWK�DQLQWHUHVW� LQ� SRSXODU� DUW� DQG� HQWHUWDLQPHQW�� HOGHUO\� SHRSOH�� HWF� �DV� DSSOLFDEOH� LQ� ORFDO� DUHDVZKHUH� SDUWLFXODU� JURXSV� DUH� QRW� FDWHUHG� IRU��� � ,QLWLDWLYHV� WKDW� DGGUHVV� VRFLDO� H[FOXVLRQ�ZLOORIWHQ� DWWUDFW� VXSSRUW� IXQGLQJ� �IURP� D� UDQJH� RI� SRWHQWLDO� VRXUFHV��� EXW� VKRXOG� EH� EDVHG� RQPDUNHW�UHVHDUFK�x 0DNH�YHQXHV�DYDLODEOH�WR�D�ZLGHU�UDQJH�RI�DUWV�RUJDQLVDWLRQV��HQFRXUDJLQJ�WKH�HVWDEOLVKPHQWRI�QHZ�ORFDO�JURXSV�ZKHUH�UHTXLUHG� WR� LQFUHDVH�GLYHUVLW\�RI�SURYLVLRQ� �HJ�� ILOP�FOXE��GDQFHJURXS�� �� ZRUNLQJ� LQ� FRQMXQFWLRQ� ZLWK� ORFDO� DXWKRULW\� DUWV� RIILFHUV� DQG� RWKHU� VSHFLDOLVWV� DVDSSURSULDWH�x (QFRXUDJH�YROXQWHHUV�DQG�SDUW�WLPH�VWDII�WR�DWWHQG�UHOHYDQW�WUDLQLQJ�FRXUVHV���HJ�� LQ�DVSHFWV�RIHIIHFWLYH� DGPLQLVWUDWLRQ��PDUNHWLQJ�� UHFUXLWPHQW�RI�QHZ�YROXQWHHUV�� XVH� RI� QHZ� WHFKQRORJ\�ZRUNLQJ�ZLWK�\RXQJ�SHRSOH��HWF�x 0D[LPLVH� WKH�SHQHWUDWLRQ�RI� WKH� WRXULVW�PDUNHW� LQ� ORFDO� DUHDV�� �7KLV�ZLOO� RIWHQ�EH� DFKLHYHGSULPDULO\� WKURXJK� LPSURYHG� PDUNHWLQJ�� LQ� SDUWQHUVKLS� ZLWK� WKH� WRXULVP� WUDGH�� UDWKHU� WKDQWKURXJK� VFKHGXOLQJ� ³WRXULVW´� HQWHUWDLQPHQW�� � 3DFNDJLQJ� DUWV� IDFLOLWLHV� DQG� HYHQWV�� DQGSURGXFLQJ�DGYDQFH�EURFKXUHV�DQG�SRVWHUV��DV�ZRXOG�EH�GRQH�IRU�D�IHVWLYDO��FDQ�EH�DQ�HIIHFWLYHZD\�RI�WDSSLQJ�LQWR�WKH�WRXULVW�PDUNHW�x 'HYHORS�PRUH�DUWV�KROLGD\V��VXPPHU�VFKRROV��HWF��WKURXJK�FROODERUDWLRQV�EHWZHHQ�DUWLVWV��DUWVIDFLOLWLHV��DQG� WRXULVW�DFFRPPRGDWLRQ�SURYLGHUV�� � ,W�ZRXOG�EH�GHVLUDEOH� WR�DFKLHYH�VXIILFLHQWFULWLFDO� PDVV� WR� SURPRWH� WKLV� DV� D� GLVWLQFW� VHFWRU� RI� WKH� +LJKODQGV� DQG� ,VODQGV� WRXULVPLQGXVWU\�