Starbucks Case - 98M006 PDF
Starbucks Case - 98M006 PDF
67$5%8&.6
$ULII .DFKUD SUHSDUHG WKLV FDVH XQGHU WKH VXSHUYLVLRQ RI 3URIHVVRU 0DU\ &URVVDQ VROHO\ WR SURYLGH PDWHULDO IRU FODVV
GLVFXVVLRQ 7KH DXWKRUV GR QRW LQWHQG WR LOOXVWUDWH HLWKHU HIIHFWLYH RU LQHIIHFWLYH KDQGOLQJ RI D PDQDJHULDO VLWXDWLRQ
7KH DXWKRUV PD\ KDYH GLVJXLVHG FHUWDLQ QDPHV DQG RWKHU LGHQWLI\LQJ LQIRUPDWLRQ WR SURWHFW FRQILGHQWLDOLW\
,YH\ 0DQDJHPHQW 6HUYLFHV SURKLELWV DQ\ IRUP RI UHSURGXFWLRQ VWRUDJH RU WUDQVPLWWDO ZLWKRXW LWV ZULWWHQ SHUPLVVLRQ
7KLV PDWHULDO LV QRW FRYHUHG XQGHU DXWKRUL]DWLRQ IURP &DQ&RS\ RU DQ\ UHSURGXFWLRQ ULJKWV RUJDQL]DWLRQ 7R RUGHU
FRSLHV RU UHTXHVW SHUPLVVLRQ WR UHSURGXFH PDWHULDOV FRQWDFW ,YH\ 3XEOLVKLQJ ,YH\ 0DQDJHPHQW 6HUYLFHV FR
5LFKDUG ,YH\ 6FKRRO RI %XVLQHVV 7KH 8QLYHUVLW\ RI :HVWHUQ 2QWDULR /RQGRQ 2QWDULR &DQDGD 1$ . SKRQH
ID[ HPDLO FDVHV#LYH\XZRFD
0U +RZDUG 6FKXOW] WKH &KDLUPDQ DQG &(2 RI 6WDUEXFNV &RUSRUDWLRQ KDG MXVW JLYHQ
D VSHHFK RQ WKH IXWXUH RI WKH FRIIHH LQGXVWU\ DW D ZHOONQRZQ EXVLQHVV VFKRRO $V KH OHIW
WKH OHFWXUH KDOO KH VWRSSHG DW WKH 8QLYHUVLW\V PRVW SRSXODU FRIIHH VKRS WKH %UHZHU\
7KH VKRSV VLJQ LQGLFDWHG WKDW LW ZDV 1RZ 6HUYLQJ 6WDUEXFNV &RIIHH $V 0U 6FKXOW]
RUGHUHG WKH +RXVH %OHQG KH QRWLFHG WKDW WKH %UHZHU\ ZDV D IDU FU\ IURP DQ\ 6WDUEXFNV
FRIIHHKRXVH 7KH VKRS ZDV PHVV\ WKH VHUYLFH ZDV SRRU DQG WKH FRIIHH ZDV DYHUDJH
$V 0U 6FKXOW] ZDV OHDYLQJ WKH %UHZHU\ 2ULQ 6PLWK 6WDUEXFNV 3UHVLGHQW DQG &22
FDOOHG KLP RQ KLV FHOOXODU SKRQH 0F'RQDOGV ZKRP 6WDUEXFNV KDG WXUQHG GRZQ D
QXPEHU RI WLPHV ZDV RQFH DJDLQ SHWLWLRQLQJ IRU D FRQWUDFW WR VHUYH 6WDUEXFNV FRIIHH 2Q
WKH SODQH EDFN WR 6HDWWOH :DVKLQJWRQ 0U 6FKXOW]V WKRXJKWV GULIWHG EDFN WR KLV
H[SHULHQFH DW WKH %UHZHU\ DQG WKH FDOO IURP 0F'RQDOGV +H DVNHG KLPVHOI WZR
TXHVWLRQV :DV 6WDUEXFNV JURZLQJ LQ WKH EHVW ZD\ SRVVLEOH" :DV 6WDUEXFNV
RYHUH[WHQGLQJ LQ LWV TXHVW IRU JURZWK"
&RIIHH ZDV WKH VHFRQG PRVW WUDGHG FRPPRGLW\ QH[W WR RLO ,W ZDV GLYLGHG LQWR WZR
FDWHJRULHV VSHFLDOW\ FRIIHH DQG EDVLF FRIIHH 6SHFLDOW\ FRIIHH ZDV WKH KLJKHVW HFKHORQ RI
TXDOLW\ FRIIHH DYDLODEOH LQ WKH ZRUOG 0DQ\ SHRSOH GHVFULEHG LW DV JRXUPHW FRIIHH 7KHUH
ZDV QR RQH DFFHSWHG GHILQLWLRQ LQ WKH LQGXVWU\ KRZHYHU HYHU\RQH DJUHHG WKDW VSHFLDOW\
FRIIHH ZDV RI KLJKHU TXDOLW\ WKDQ EDVLF VXSHUPDUNHW EUDQG FRIIHH
3DJH $0
,W ZDV HVWLPDWHG LQ WKDW WKH VSHFLDOW\ FRIIHH LQGXVWU\ ZDV JURZLQJ DW D UDWH RI SHU
FHQW SHU \HDU DQG WKDW WKH EDVLF FRIIHH LQGXVWU\ ZDV VXIIHULQJ $OWKRXJK PRVW FRQVXPHUV
RQO\ VDZ WKLV GLYLVLRQ DW WKH UHWDLO OHYHO VSHFLDOW\ YV EDVLF FRIIHH ZDV D FRQFHSW WKDW
RULJLQDWHG ZLWK WKH FRIIHH JURZHU
6833/,(56
6SHFLDOW\ FRIIHH FRPSDQLHV GLG QRW W\SLFDOO\ GHDO ZLWK VXSSOLHUV LH FRIIHH IDUPHUV
GLUHFWO\ 7KH\ GHDOW ZLWK H[SRUWHUV LQVWHDG $ERXW D WKLUG RI WKH FRIIHH IDUPV LQ WKH
ZRUOG ZHUH OHVV WKDQ WKUHH DFUHV 7KHVH IDUPHUV GLG QRW KDYH WKH GHVLUH WKH YROXPH WKH
PRQH\ WKH H[SHUWLVH RU WKH FRQQHFWLRQV WR H[SRUW FRIIHH WKHPVHOYHV EHFDXVH PRVW
FRXQWULHV UHJXODWHG FRIIHH VDOHV &RIIHH SURFHVVRUV RU H[SRUWHUV UHJXODUO\ YLVLWHG VPDOOHU
IDUPHUV DQG ERXJKW WKHLU FRIIHHHLWKHULQFKHUU\RUSDUFKPHQW 7KH FRIIHH ZRXOG WKHQ
EH PRYHG WR D PLOO ZKHUH WKHUH ZRXOG EH RWKHU IDUPHUV SURGXFWLRQ IURP WKH VDPH RU
GLIIHUHQW UHJLRQV $IWHU KXVNLQJ WKH SDUFKPHQW WKH PLOOHUV VROG LW WR WKH H[SRUWHUV ,W
ZDV FRPPRQ SODFH IRU FRIIHH WR FKDQJH KDQGV DV PDQ\ DV ILYH WLPHV EHIRUH LW UHDFKHG
D VSHFLDOW\ FRIIHH VHOOHU 7\SLFDOO\ FRIIHH ZDV PRYHG IURP WKH IDUPHU WR WKH FROOHFWRU
WR WKH PLOOHU WR WKH H[SRUWHU WR WKH LPSRUWHU DQG ILQDOO\ WR WKH VSHFLDOW\ FRIIHH VHOOHU
7KH EHDQ VXSSOLHUV WKDW PDQDJHG WKLV SURFHVV ZHOO W\SLFDOO\ FRQFHQWUDWHG RQ KLJK TXDOLW\
$UDELFD EHDQV IRU ZKLFK WKH\ FRXOG FRPPDQG SUHPLXP SULFHV /RZHU TXDOLW\ EHDQ
VXSSOLHUV FRQFHQWUDWHG RQ 5REXVWD EHDQV 7KLV TXDOLW\ GLYLVLRQ ZDV VRPHZKDW FRQJUXHQW
WR WKH ZD\ WKH LQGXVWU\ ZDV GLYLGHG LH ORZHU TXDOLW\ EHDQV ZHUH KDUYHVWHG IRU WKH
FRPPHUFLDO LQGXVWU\ DQG KLJKHU TXDOLW\ EHDQV IRU WKH VSHFLDOW\ FRIIHH LQGXVWU\ ,QGXVWU\
H[SHUWV HVWLPDWHG WKDW VSHFLDOW\ FRIIHH PDGH XS SHU FHQW RI WKH WRWDO FRIIHH
FRQVXPSWLRQ 6HH ([KLELW
7KH SULFH RI FHUWDLQ FRIIHH ZDV D GLUHFW UHIOHFWLRQ RI WKH TXDOLW\ DQG TXDQWLW\ RI FRIIHH
DYDLODEOH DW D SDUWLFXODU WLPH ,W ZDV YHU\ GLIILFXOW WR JHW SULFH FRQILUPDWLRQV EHFDXVH D
VXFFHVVIXO FRIIHH KDUYHVW ZDV GHSHQGHQW RQ VR PDQ\ GLIIHUHQW IDFWRUV 7KHVH LQFOXGHG
ZHDWKHU FRQGLWLRQV KHDOWK RI WKH FRIIHH WUHHV KDUYHVWLQJ SUDFWLFHV GLVHDVH DQG LQIHFWLRQ
FDXVHG E\ LQVHFWV DQG WKH VRFLDO SROLWLFDO UHJXODWRU\ DQG HFRQRPLF HQYLURQPHQWV RI WKH
FRIIHHSURGXFLQJ FRXQWULHV )RU H[DPSOH WKH %UD]LOLDQ IURVW GURYH WKH SULFH RI
FRIIHH XS DQG 86 FRIIHH FRQVXPSWLRQ QHYHU UHFRYHUHG IURP WKH SHU FHQW GHFOLQH
&21680(56
7KLV SURFHVV YDULHG E\ FRXQWU\
2QFH WKH FRIIHH FKHUU\ KDG EHHQ ZDVKHG DQG GULHG ZKDW UHPDLQHG ZDV WKH FRIIHH EHDQ LQ VRPH VRUW RI KXVN
3DJH $0
WZR WR WKUHH FXSV GDLO\ FRQVXPSWLRQ LQ WKH V DQG V 7KH 1DWLRQDO &RIIHH
$VVRFLDWLRQ DWWULEXWHG WKLV GHFUHDVH WR SRRU SURGXFW GHYHORSPHQW SDFNDJLQJ DQG
SRVLWLRQ SULFH IRFXVHG E\ WKH LQGXVWU\V OHDGLQJ FRIIHH SURGXFHUV +RZHYHU QRZ LW
VHHPHG WKDW FRIIHH FRQVXPSWLRQ ZDV RQ WKH ULVH 7KH IROORZLQJ FRPSDUHV 86
FRQVXPSWLRQ UDWHV WR JOREDO FRQVXPSWLRQ UDWHV
7KH UHFHQW SRSXODULW\ RI VSHFLDOW\ FRIIHH ZDV WKH UHVXOW RI IRXU FRQVXPHU WUHQGV WKH
DGRSWLRQ RI D KHDOWKLHU OLIHVW\OH KDG OHG 1RUWK $PHULFDQV WR UHSODFH DOFRKRO ZLWK FRIIHH
FRIIHH EDUV RIIHUHG D SODFH ZKHUH SHRSOH FRXOG PHHW SHRSOH OLNHG DIIRUGDEOH
OX[XULHV DQG VSHFLDOW\ FRIIHH ILW WKH ELOO DQG FRQVXPHUV ZHUH EHFRPLQJ PRUH
NQRZOHGJHDEOH DERXW FRIIHH
3URILOH
(QF\FORSDHGLD RI $PHULFDQ ,QGXVWULHV 9ROXPH 0DQXIDFWXULQJ ,QGXVWULHV 6,& 5RDVWHG &RIIHH
0RQWJRPHU\ 6HFXULWLHV $SULO 9RO
:LQWHU &RIIHH 'ULQNLQJ 6WXG\ 1DWLRQDO &RIIHH $VVRFLDWLRQ RI WKH 86$ 0RQWJRPHU\ 6HFXULWLHV
9ROXPH
3DJH $0
&RQVXPHUV SDWWHUQV RI VRFLDOL]LQJ KDG FKDQJHG VLQFH WKH HLJKWLHV :KLOH WKH PLG
HLJKWLHV ZHUH FKDUDFWHUL]HG E\ WKH SXUVXLW RI HQWHUWDLQPHQW RXWVLGH WKH KRPH LQ WKH HDUO\
QLQHWLHV SHRSOH ZDQWHG WR VWD\ KRPH 7KHUH ZDV D PRYH DZD\ IURP UHVWDXUDQWV DQG
GDQFH FOXEV 1RZ LQ WKH VHFRQG SDUW RI WKH GHFDGH WKHUH VHHPHG WR EH D UHVXUJHQFH RI
RXWVLGHWKHKRPH HQWHUWDLQPHQW &RIIHHKRXVHV ZHUH DEOH WR ILOO WKLV QHHG DQG ZHUH PRUH
DFFHVVLEOH WKDQ EDUV &RIIHHV LPDJH KDG FKDQJHG IURP EHLQJ SXUHO\ D EUHDNIDVW GULQN
WR D EHYHUDJH WKDW FRXOG EH HQMR\HG DQ\ WLPH DQG DV D VRFLDO FDWDO\VW &RIIHH SXUFKDVHUV
ZDQWHG PRUH WKDQ MXVW D SODFH ZKHUH WKH\ FRXOG JHW D KLJKHU TXDOLW\ FXS RI FRIIHH 7KH\
ZDQWHG D SODFH WKDW DQVZHUHG D OLIHVW\OH QHHG ,QFUHDVLQJO\ FRIIHH VKRSV ZHUH WXUQLQJ
LQWR OLYLQJ URRPV ZKHUH SHRSOH VDW EDFN DQG HQMR\HG D FXS RI FRIIHH RU VRPHWKLQJ HOVH
DQG UHOD[HG ZLWK WKHLU IULHQGV RU EXVLQHVV DVVRFLDWHV &RIIHHKRXVHV KDG EHFRPH
FRPPXQLW\ JDWKHULQJ SODFHV
&203(7,7,21
3URGXFW%DVHG &RPSHWLWLRQ
,Q UHWDLO FRIIHHKRXVH VDOHV 6SHFLDOW\ FRIIHH QRW RQO\ FRPSHWHG ZLWK EDVLF FRIIHH LW DOVR
FRPSHWHG ZLWK WHD MXLFH VRIW GULQNV DOFRKRO DQG RWKHU FRIIHH DQG QRQFRIIHHUHODWHG
GULQNV +RZHYHU WKH FRQVXPSWLRQ RI DOO RI WKHVH EHYHUDJHV UHODWLYH WR VSHFLDOW\ FRIIHH
ZDV GHFOLQLQJ
6SHFLDOW\ &RIIHH FRXOG EH GLYLGHG LQWR IODYRXUHG FRIIHH ZKLFK UHSUHVHQWHG SHU FHQW
RI DOO VSHFLDOW\ FRIIHH VROG DQG QRQIODYRXUHG FRIIHH )ODYRXUHG FRIIHH UHIHUUHG WR FRIIHH
WKDW ZDV IODYRXUHG ZLWK D YDULHW\ RI HVVHQFHV GXULQJ WKH URDVWLQJ SURFHVV 3RSXODU
IODYRXUV LQFOXGHG KD]OHQXW DPPDUHWWR UDVSEHUU\ HWF )ODYRUHG FRIIHH ZDV QRW RIIHUHG
E\ VSHFLDOW\ FRIIHH FRPSDQLHV OLNH 6WDUEXFNV 3HHWV &DULERX &RIIHH DQG 7KH &RIIHH
6WDWLRQ EXW WKH RSSRVLWH ZDV WUXH IRU 7LPRWK\V DQG 7KH 6HFRQG &XS )ODYRUHG FRIIHH
ZDV SRSXODU DPRQJ WUDGLWLRQDOO\ QRQFRIIHH GULQNHUV \RXQJHU FRIIHH GULQNHUV DQG WKRVH
LQWHUHVWHG LQ D ORZ FDORULH VXEVWLWXWH IRU GHVVHUWV RU VQDFNV )RU D FRPSDLULVRQ RI UHWDLO
VDOHV RI GLIIHUHQW W\SHV RI FRIIHH VHH ([KLELW
$QRWKHU LPSRUWDQW SURGXFW VXEVWLWXWH ZDV VSHFLDOW\ FRIIHH RULJLQDWLQJ IURP EDVLF FRIIHH
FRPSDQLHV LQ WKH JURFHU\ FKDLQ 7R UHVSRQG WR WKH SKHQRPHQDO JURZWK LQ VSHFLDOLW\
FRIIHH LQ WKH JURFHU\ FKDLQ PDQ\ ODUJH EDVLF FRIIHH PDQXIDFWXUHUV ZHUH PRYLQJ LQWR
PRUH VSHFLDOLW\ EUDQGV E\ LQWURGXFLQJ XSVFDOH YHUVLRQV RI DOUHDG\ SRSXODU VXSHUPDUNHW
EUDQGV +RZHYHU LQGXVWU\ DQDO\VWV IRUHFDVWHG WKDW WKHUH ZRXOG EH D VKLIW LQ FRQVXPHU
SXUFKDVLQJ RI VSHFLDOW\ FRIIHH &XUUHQWO\ JURFHU\ VWRUHV ZHUH UHVSRQVLEOH IRU SHU FHQW
RI VSHFLDOW\ FRIIHH VDOHV WKLV ILJXUH ZDV H[SHFWHG WR IDOO WR SHU FHQW LQ 7KLV
VKLIW ZRXOG UHVXOW LQ JUHDWHU DPRXQWV RI FRIIHH EHLQJ SXUFKDVHG IURP VSHFLDOW\ VWRUHV
SHU FHQW FXUUHQWO\ WR SHU FHQW LQ
3DJH $0
5HWDLO%DVHG &RPSHWLWLRQ
7KH 6SHFLDOW\ &RIIHH $VVRFLDWLRQ RI $PHULFD HVWLPDWHG WKHUH ZRXOG EH URRP IRU DERXW
FRIIHH UHWDLO RXWOHWV LQ WKH 8QLWHG 6WDWHV DQG &DQDGD E\ %XW RQO\ RI
WKRVH ZRXOG EH FRIIHH EDUV DQG FDIHV WKH UHVW ZRXOG EH FDUWV 7KH IROORZLQJ WDEOH
GHSLFWV WKH DPRXQW RI URRP IRU JURZWK LQ WKH UHWDLO FRIIHH LQGXVWU\
7RWDO
3RSXODWLRQ 0D[LPXP 6WDUEXFNV
1XPEHU RI &XUUHQW QHFHVVDU\ QXPEHU RI 6WRUHV DV D
3RSXODWLRQ
/RFDWLRQ 6WDUEXFNV 3RSXODWLRQ WR VXSSRUW D FRIIHH VWRUHV SHUFHQWDJH
PLOOLRQV
6WRUHV 6WRUH FRIIHH VXSSRUWDEOH RI WRWDO
KRXVH E\ PDUNHW SRVVLEOH
VWRUHV
7RS 86
0DUNHWV
9DQFRXYHU
7RURQWR 2WWDZD
0RQWUHDO &DOJDU\
7RS 86
0DMRU &DQDGLDQ
0DUNHWV
7RWDO 86
&DQDGLDQ 0DUNHWV
*LYHQ WKH ORZ EDUULHUV WR HQWU\ LQ WKH UHWDLO VSHFLDOW\ FRIIHH PDUNHW WKHUH ZHUH PRUH WKDQ
FRPSHWLWRUV LQ WKH PDUNHW +RZHYHU PRVW RI WKHVH ZHUH RQHVWRUH HVWDEOLVKPHQWV
ZLWK QR UHDO SODQV IRU JURZWK $ GHVFULSWLRQ RI WKRVH FRPSDQLHV WKDW KDG GHYHORSHG D
VWURQJ UHJLRQDO DQGRU QDWLRQDO SUHVHQFH IROORZV
&KLFDJR 7ULEXQH 6XQGD\ 0DUFK
&DIIHLQH 5XVK &XVWRPHUV DUH +LJK RQ *RXUPHW &RIIHH DQG VR DUH 2SHUDWRUV 5HVWDXUDQW %XVLQHVV -DQXDU\
3DJH $0
& PDGH ZLWK LWV RZQ IUHVKO\ & SULPDULO\ D ZKROHVDOHU RI & ORFDWHG LQ VXEXUEDQ
URDVWHG EHDQV VSHFLDOW\ FRIIHH QHLJKERUKRRGV DQG EXVLQHVV
& VROG OLJKW IRRG LWHPV DQG FXVWRPHUV GLVWULFWV DYHUDJLQJ DERXW
ZKROH EHDQ FRIIHH & VPDOO QXPEHU RI UHWDLO WR VTXDUH IHHW LQ
& D IHZ ZKROHVDOH FXVWRPHUV RSHUDWLRQV ZLWK LQVWRUH VL]H
& RSHUDWHG D WRWDO RI URDVWLQJ IDFLOLWLHV & XVHG VSHFLDOW\ NLRVNV ORFDWHG
FRIIHHKRXVHV LQ 7H[DV & URDVWHG RYHU KLJK TXDOLW\ LQ KLJK WUDIILF ORFDWLRQV VXFK
&RORUDGR DQG &DOLIRUQLD $UDELFD FRIIHHV WR SURGXFH DV DLUSRUWV DQG VKRSSLQJ
& VDOHV PLOOLRQ RYHU YDULHWLHV PDOOV
& VDOHV PLOOLRQ & KRSHG WR KDYH ORFDWLRQV
E\
& RIIHUHG W\SHV RI JURXQG & IRFXVVHG RQ WKH & ZDQWHG WR EH WKH UG SODFH
FRIIHH QLQH W\SHV RI PHUFKDQGLVLQJ DVSHFW RI EHWZHHQ ZRUN DQG KRPH
IODYRUHG FRIIHH DQG W\SHV FRIIHH UHWDLOLQJ LW RIIHUHG ZKHUH SHRSOH FRXOG
RI ZKROH EHDQV GLIIHUHQW EUDQGHG VRFLDOL]H
& VROG LWV FRIIHH WKURXJK SURGXFWV & LPSOHPHQWHG D YHU\
UHVWDXUDQWV LQFOXGLQJ LWV & W\SLFDOO\ VHDWHG DERXW $PHULFDQ IHHO WR LWV
RZQ QHWZRUN RI FDIH SHRSOH DQG ZDV ORFDWHG LQ FRIIHHKRXVHV UDWKHU WKDQ D
ELVWURV RQO\ FRUSRUDWH PDOOV (XURSHDQ IHHO
VWRUHV & LWV QHZHVW LQQRYDWLRQ ZDV D & RIIHUHG YHU\ IDVW VHUYLFH
& JRRG UHSXWDWLRQ DV D YHQGRU UHVWDXUDQW /D 9HQH]LD &DIH PDJD]LQHV QHZVSDSHUV
RI FRIIHH WR RIILFHV KRWHOV VHDWHG SHRSOH DQG IUHH UHILOOV DQG VHDWLQJ
HWF RIIHUHG GLIIHUHQW FRIIHHV & KDG VWRUHV DQDO\VWV
& VDOHV PLOOLRQ SUHGLFWHG WKDW LW ZRXOG EH D
JURZWK OHDGHU
& IUDQFKLVHU ZKR RSHUDWHG & RSHUDWHG DV D FRIIHH & VPDOO EXW DJJUHVVLYH SOD\HU
XQLWV DFURVV WKH 86 VXSSOLHU WR WKH UHVWDXUDQW LQ WKH LQGXVWU\
& FRIIHH EHYHUDJHV DQG IRRG LQGXVWU\ & SULPDULO\ D FRIIHH URDVWHU
DFFRXQWHG IRU RI WKH & HQRXJK FRQWUDFWV ZLWK & VROG LWV FRIIHH LQ LWV RZQ
VDOHV DQG FDPH IURP UHVWDXUDQWV WR ZDUUDQW LWV UHWDLO RXOHWV IUDQFKLVHG
PHUFKDQGLVH RZQ IOHHW RI WUXFNV VWRUHV ZKROHVDOH FRIIHH WR
& IRFXV KDG DOZD\V EHHQ RQ & UHFHQWO\ FRPSDQ\ KDG VSHFLDOW\ VWRUHV DQG
PDOOV EXW LW ZDV QRZ EHJXQ GLYHUVLI\LQJ LQWR UHVWDXUDQWV JURFHU\
VKLIWLQJ LWV IRFXVW WR IUHH GLIIHUHQW FRIIHHKRXVH GLYLVLRQ GLUHFW PDLO
VWDQGLQJ ORFDWLRQV IRUPDWV OLNH GRXEOH GULYH H[SRUWV WR WKH 3DFLILF 5LP
& EHJXQ IUDQFKLVLQJ FRIIHH WKURXJKV DQG VLWGRZQ UHWDLO SULYDWH ODEHO FRIIHH
FDUWV RXWOHWV DERXW VTXDUH SURGXFWLRQ DQG FRODEHO
IHHW LQ VL]H YHQWXUHV ZLWK IDVW IRRG
FKDLQV VXFK DV 7DFR %HOO
3DJH $0
6(&21' &83
6HFRQG &XS ZDV SULPDULO\ D IUDQFKLVHU SHU FHQW RI DOO ORFDWLRQV DQG DV D UHVXOW WKH
FRPSDQ\ ZDV FRQVLVWHQWO\ FDVK IORZ SRVLWLYH DQG KDG WKH EHQHILW RI WDNLQJ OLWWOH RSHUDWLQJ
ULVN DW WKH VWRUH OHYHO 7UDGLWLRQDOO\ WKH 6HFRQG &XS ZDV PDOOEDVHG EXW LQ WKH SDVW IHZ
\HDUV LW KDG PRYHG LQWR PRUH VWDQGDORQH ORFDWLRQV 7KHVH ORFDWLRQV ZHUH HVWDEOLVKHG
UDWKHU TXLFNO\ DQG ZHUH QRW DOZD\V RQ SULPH UHDO HVWDWH ,Q LWV UHWDLO FRQFHSW WKH 6HFRQG
&XS RIIHUHG VSHFLDOW\ FRIIHH GULQNV YDULHWDOV IODYRUHG FRIIHH DQG VQDFN LWHPV
7KH 6HFRQG &XS ZDV YHU\ JURZWKRULHQWHG DQG EHOLHYHG VWURQJO\ LQ JURZWK YLD
DFTXLVLWLRQV 2QH RI LWV PDMRU DFTXLVLWLRQV LQFOXGHG *ORULD -HDQV ORFDWLRQV LQ WKH
86 ,QFOXGLQJ LWV RZQ VWRUHV WKH 6HFRQG &XS ZDV WKH VHFRQG ODUJHVW SOD\HU LQ WKH
VSHFLDOW\ FRIIHH LQGXVWU\ :KHUH WKH 6HFRQG &XSV UHYHQXHV FDPH IURP OLTXLG FRIIHH
DQG VQDFN IRRG LWHPV *ORULD -HDQV REWDLQHG D KLJK SHUFHQWDJH RI VDOHV IURP FRIIHH
PXJV UHODWHG LWHPV DQG FRIIHH EHDQV
,Q UHFHQW WLPHV WKH 6HFRQG &XS KDG EHFRPH TXLWH DFWLYH LQ GHYHORSLQJ DOOLDQFHV ZLWK
RWKHU IRRG VHUYLFH FRPSDQLHV 7KURXJK LWV DOOLDQFH ZLWK &DUD 2SHUDWLRQV /WG WKH
6HFRQG &XS KRSHG WR JDLQ DFFHVV WR D QXPEHU RI LWV SDUWQHUV LQVWLWXWLRQDO DQG UHWDLO VLWHV
VXFK DV +DUYH\V DQG 6ZLVV &KDOHW 7KH 6HFRQG &XS DOVR KHOG D SHU FHQW LQWHUHVW LQ
WKH *UHDW &DQDGLDQ %DJHO WKDW RSHUDWHG VWRUHV LQ DQG ZDV SODQQLQJ WR RZQ
E\ WKH HQG RI )LQDOO\ WKH FRPSDQ\ KDG DOVR VWUXFN D GHDO WR VHUYH LWV FRIIHH RQ $LU
&DQDGD IOLJKWV 5HYHQXHV IRU DPRXQWHG WR PLOOLRQ
6HH ([KLELW IRU D FRPSDULVRQ RI WKH LQGXVWU\ FRPSHWLWRUV XVLQJ GLIIHUHQW ILQDQFLDO DQG
JURZWK PHDVXUHV
67$5%8&.6 675$7(*<
6WDUEXFNV VWUDWHJ\ IRU WKH IXWXUH ZDV SUHVHQWHG LQ WKH IROORZLQJ H[WUDFWV RI D OHWWHU WR
6WDUEXFNV VKDUHKROGHUV 7KLV OHWWHU IURP +RZDUG 6FKXOW] &KDLUPDQ DQG &(2 DQG
2ULQ 6PLWK 3UHVLGHQW DQG &KLHI 2SHUDWLQJ 2IILFHU DSSHDUHG LQ WKH FRPSDQ\V
$QQXDO 5HSRUW
6RXUFLQJ
6WDUEXFNV VRXUFHG DSSUR[LPDWHO\ SHU FHQW RI LWV EHDQV IURP /DWLQ $PHULFD SHU
FHQW IURP WKH 3DFLILF 5LP DQG SHU FHQW IURP (DVW $IULFD +DYLQJ D GLYHUVLILHG
SRUWIROLR DOORZHG 6WDUEXFNV WR RIIHU D JUHDWHU SDOHWWH RI FRIIHHV WR LWV FXVWRPHUV ZKLOH
EHLQJ DEOH WR PDLQWDLQ D KHGJHG SRVLWLRQ
6WDUEXFNV PDLQWDLQHG FORVH UHODWLRQVKLSV ZLWK LWV H[SRUWHUV E\ ZRUNLQJ GLUHFWO\ ZLWK WKHP
DQG SURYLGLQJ WKHP ZLWK WUDLQLQJ 0DU\ :LOOLDPV 6HQLRU 9LFH3UHVLGHQW RI &RIIHH DW
6WDUEXFNV GHVFULEHG ZKDW LW WRRN WR EH FRQVLGHUHG DQ RIILFLDO 6WDUEXFNV H[SRUWHU
DQG ZH ZLOO UHSODFH LW %RWK WKH FXVWRPHU VHUYLFH DQG FRQVLVWHQF\ DUH
WKH WKLQJV ZH ORRN IRU RYHU WLPH
([SRUWHUV RI KLJK TXDOLW\ FRIIHH ZHUH YHU\ DQ[LRXV WR EHFRPH 6WDUEXFNV VXSSOLHUV
EHFDXVH 6WDUEXFNV SXUFKDVHG PRUH KLJK TXDOLW\ FRIIHH WKDQ DQ\RQH HOVH LQ WKH ZRUOG
6WDUEXFNV UHODWLRQVKLS ZLWK LWV VXSSOLHUV ZDV VR JRRG WKDW LI 6XSSOLHU $ VROG WR D
QXPEHU RI GLIIHUHQW EX\HUV DQG LW KDG RQO\ RQH FRQWDLQHU RI D FHUWDLQ FRIIHH 6WDUEXFNV
ZRXOG EH WKH ILUVW WR JHW LW
7R HQVXUH TXDOLW\ 6WDUEXFNV H[WUDFWHG WKUHH GLIIHUHQW VDPSOHV RI FRIIHH IURP HYHU\
VKLSPHQW RI EDJV 6DPSOH RQH ZDV DQ RIIHU VDPSOH VHQW E\ DQ H[SRUWHU WU\LQJ WR
PDNH D VDOH WR 6WDUEXFNV 6DPSOH WZR ZDV WDNHQ MXVW EHIRUH WKH VKLSPHQW ZDV GXH WR EH
VHQW 6DPSOH WKUHH ZDV H[WUDFWHG IURP WKH VKLSPHQW ZKLFK DUULYHG DW WKH FRIIHH URDVWLQJ
SODQW $W HYHU\ VWDJH RI VDPSOLQJ 6WDUEXFNV UHVHUYHG WKH ULJKW WR UHMHFW WKH FRIIHH LI LW
ZDV QRW LQ OLQH ZLWK LWV TXDOLW\ VWDQGDUGV
6WDUEXFNV KRSHG WR GRXEOH YROXPHV RYHU WKH QH[W WKUHH \HDUV 7KLV FRXOG PDNH WKH
DELOLW\ WR ILQG FRIIHHV WKDW ZRXOG PHHW LWV TXDQWLW\TXDOLW\ UHTXLUHPHQWV GLIILFXOW
6WDUEXFNV QHHGHG WR RIIHU DQ LQFUHDVLQJ QXPEHU RI EOHQGV WR GHDO ZLWK LWV LQFUHDVLQJ
YROXPHV VLQFH EOHQGV SURYLGHG PRUH IOH[LELOLW\ DURXQG FRPSRQHQWV 0DU\ :LOOLDPV
H[SODLQHG
:KHQ \RX EOHQG FRIIHH LWV OLNH EDNLQJ D FDNH \RX QHHG WR SXW ORWV RI
GLIIHUHQW NLQGV RI VSLFHV LQ D VSLFH FDNH \RX GRQW QHFHVVDULO\ KDYH WR
KDYH FLQQDPRQ QXWPHJ DQG DOOVSLFH <RX FDQ KDYH RWKHU NLQGV RI
VSLFHV DQG WKH FRQVXPHUV RI WKDW FDNH ZLOO QRW NQRZ WKH GLIIHUHQFH
EHFDXVH LW WDVWHV OLNH D VSLFH FDNH 6R D +RXVH %OHQG ZLWK D SDUWLFXODU
IODYRU SURILOH FDQ KDYH GLIIHUHQW W\SHV RI WKH VDPH TXDOLW\ FRPSRQHQWV
WR UHDFK WKH VDPH IODYRU SURILOH 0RYLQJ WRZDUGV RIIHULQJ PRUH EOHQGV
DQG UHYROYLQJ YDULHWDOV LV RQH RI WKH PRVW LPSRUWDQW WKLQJV 6WDUEXFNV FDQ
GR WR HQVXUH WKH TXDOLW\TXDQWLW\ PL[ RI WKH FRIIHH ZH EX\
'HVSLWH 6WDUEXFNV ODUJH VXSSO\ QHHGV JURZLQJ LWV RZQ KLJKTXDOLW\ FRIIHH ZDV DQ
RSWLRQ WKDW ZDV QHYHU VHULRXVO\ FRQVLGHUHG
5RDVWLQJ ZDV D FRPELQDWLRQ RI WLPH DQG WHPSHUDWXUH 5HFLSHV ZHUH SXW WRJHWKHU E\ WKH
FRIIHH GHSDUWPHQW RQFH DOO WKH FRPSRQHQWV KDG EHHQ WHVWHG DQG ZHUH XS WR VWDQGDUG
'HVSLWH FRPSXWHUL]HG URDVWHUV ZKLFK JXDUDQWHHG FRQVLVWHQF\ URDVWLQJ ZDV QRW D
FRPSOHWH VFLHQFH LW ZDV PRUH RI D WHFKQRORJLFDO DUW 7KLV ZDV EHFDXVH WKH SHRSOH
URDVWLQJ WKH FRIIHH KDG WR XQGHUVWDQG WKH SURSHUWLHV RI WKH URDVWLQJ SURFHVV LH PDQDJLQJ
3DJH $0
WHPSHUDWXUH DQG EHLQJ DEOH WR URDVW FRIIHHV DORQJ GLIIHUHQW URDVW FXUYHV 5RDVWLQJ ZDV
HVVHQWLDO WR 6WDUEXFNV EHFDXVH KRZ D FRIIHH ZDV URDVWHG FRXOG FKDQJH LWV HQWLUH WDVWH
6WDUEXFNV XQGHUWRRN D JUHDW GHDO RI UHVHDUFK E\ URDVWLQJ LWV FRIIHHV LQ PDQ\ GLIIHUHQW
ZD\V XQGHU PDQ\ GLIIHUHQW WHPSHUDWXUH DQG WLPH FRQGLWLRQV WR HQVXUH WKDW LW ZDV JHWWLQJ
DV PXFK DV SRVVLEOH IURP WKH EHDQ 7KHVH WULDO DQG HUURU VHVVLRQV DOORZHG 6WDUEXFNV WR
EXLOG VLJQDWXUH URDVWLQJ FXUYHV 7KHVH URDVWLQJ FXUYHV ZHUH WKHQ EXLOW LQWR SURSULHWDU\
FRPSXWHU VRIWZDUH 7KH PHWKRG E\ ZKLFK WKH\ ZHUH GHYHORSHG ZDV DV PXFK D UHVXOW RI
WKH WHFKQRORJ\ DV WKH DUW 7KLV HQVXUHG WKDW HYHQ LI D URDVWHU ZHUH WR GHIHFW WR DQRWKHU
FRPSHWLWRU KHVKH ZRXOG QRW EH DEOH WR GXSOLFDWH 6WDUEXFNV VLJQDWXUH URDVWV
$IWHU URDVWLQJ DQG DLU FRROLQJ WKH FRIIHH ZDV LPPHGLDWHO\ YDFXXPVHDOHG LQ RQHZD\
YDOYH EDJV 7KLV SDFNDJLQJ ZDV XQLTXH LQ LWV DELOLW\ WR HQVXUH IUHVKQHVV VLQFH LW DOORZHG
JDVHV QDWXUDOO\ SURGXFHG E\ IUHVK URDVWHG EHDQV RXW ZLWKRXW OHWWLQJ R[\JHQ LQ 7KLV RQH
ZD\ YDOYH WHFKQRORJ\ H[WHQGHG WKH VKHOI OLIH RI 6WDUEXFNV FRIIHH WR ZHHNV +RZHYHU
6WDUEXFNV GLG QRW NHHS DQ\ FRIIHH RQ LWV VKHOYHV IRU PRUH WKDQ WKUHH PRQWKV DQG IRU WKH
FRIIHH LW XVHG WR SUHSDUH EHYHUDJHV LQ WKH VWRUH WKH VKHOI OLIH ZDV OLPLWHG WR VHYHQ GD\V
DIWHU WKH EDJ ZDV RSHQHG
6WDUEXFNV 6XSSO\ &KDLQ 2SHUDWLRQV 6&2 FODLPHG LW KDG WKH EHVW WUDQVSRUWDWLRQ UDWHV
LQ WKH LQGXVWU\ D FRPSOH[ EDNHU\ GLVWULEXWLRQ PRGHO D IRUHFDVWLQJ SURFHVV IRU ZKR ZLOO
QHHG FRIIHH ZKHQ WKDW ZDV JHQHUDOO\ YHU\ DFFXUDWH VWURQJ LQYHQWRU\ WXUQV IRU WKH
VSHFLDOW\ FRIIHH LQGXVWU\ DQG D IXOO\ LQWHJUDWHG PDQXIDFWXULQJ DQG GLVWULEXWLRQ SURFHVV
WKDW SURWHFWHG WKH FRIIHH EHDQV IURP R[\JHQ IURP WKH WLPH EHDQV ZHUH URDVWHG WR WKH WLPH
WKH\ ZHUH SDFNDJHG FORVHG ORRS V\VWHP 6WDUEXFNV KDG GHYHORSHG WKHVH VNLOOV DQG
EHQHILWV EHFDXVH LW EHQFKPDUNHG DJDLQVW LWV FRPSHWLWRUV KLUHG H[SHUWV DQG EHOLHYHG
VWURQJO\ LQ WKH FRQFHSW RI LQWHJUDWHG VXSSO\
6WDUEXFNV WULHG WR EXLOG LWV VXSSO\ FKDLQ RSHUDWLRQV LQ RUGHU WR HOLPLQDWH UHGXQGDQF\ DQG
PD[LPL]H HIILFLHQF\ 6XSSO\ FKDLQ RSHUDWLRQV VHUYHG IRXU EXVLQHVV XQLWV WKH UHWDLO VWRUH
XQLWV WKH VSHFLDOW\ VDOHV DQG ZKROHVDOH FKDQQHOV WKH PDLO RUGHU EXVLQHVV DQG WKH JURFHU\
FKDQQHO $FFRUGLQJ WR 7HG *DUFLD 6WDUEXFNV ([HFXWLYH 9LFH 3UHVLGHQW 6XSSO\ &KDLQ
2SHUDWLRQV WKH SKHQRPHQDO JURZWK LQ WKHVH EXVLQHVV XQLWV ZDV SRVLQJ FKDOOHQJHV WR
VXSSO\ FKDLQ RSHUDWLRQV
5(7$,/ 6$/(6
7KH UHWDLO RXWOHW KDG EHHQ 6WDUEXFNV IXQGDPHQWDO JURZWK YHKLFOH )RU PDQ\ FXVWRPHUV
6WDUEXFNV ZDV QRW RQO\ D SODFH WR GULQN FRIIHH EXW DOVR DQ H[SHULHQFH +RZDUG 6FKXOW]V
YLVLRQ IRU 6WDUEXFNV ZDV D SODFH WKDW RIIHUHG LQWHUHVWLQJ FRIIHHUHODWHG GULQNV LQ D
WKHDWULFDO NLQG RI DWPRVSKHUH ZKLFK SLYRWHG DURXQG DQ HVSUHVVR PDFKLQH
<RX JHW PRUH WKDQ WKH ILQHVW FRIIHH ZKHQ \RX YLVLW 6WDUEXFNV <RX JHW
JUHDW SHRSOH ILUVWUDWH PXVLF D FRPIRUWDEOH DQG XSEHDW PHHWLQJ SODFH
DQG VRXQG DGYLFH RQ EUHZLQJ H[FHOOHQW FRIIHH DW KRPH $W KRPH \RXUH
SDUW RI D IDPLO\ $W ZRUN \RXUH SDUW RI D FRPSDQ\ $QG VRPHZKHUH LQ
EHWZHHQ WKHUHV D SODFH ZKHUH \RX FDQ VLW EDFN DQG EH \RXUVHOI 7KDWV
ZKDW D 6WDUEXFNV VWRUH LV WR PDQ\ RI LWV FXVWRPHUV D NLQG RI WKLUG
SODFH ZKHUH WKH\ FDQ HVFDSH UHIOHFW UHDG FKDW RU OLVWHQ
6WDUEXFNV IRUPXOD ZDV ILUPO\ EDVHG LQ LWV FRIIHH LWV HPSOR\HHV LWV PHUFKDQGLVLQJ LWV
RZQHUVKLS SKLORVRSK\ LWV UHDOHVWDWH DSSURDFK LWV LPDJH DQG LWV LQQRYDWLYHQHVV
(PSOR\HHV
'HYHORSLQJ FRIIHH NQRZOHGJH DQG VHUYLFH H[SHUWLVH GHPDQGHG D JUHDW GHDO RI HIIRUW IURP
HPSOR\HHV DQG DV 6WDUEXFNV JUHZ ILQGLQJ HQRXJK JRRG SHRSOH WKDW FRXOG UHSOLFDWH WKH
YDOXHV FXOWXUH DQG VHUYLFH H[SHULHQFHV ZDV DQ RQJRLQJ FKDOOHQJH
$QQXDO 5HSRUW 6WDUEXFNV &RUSRUDWLRQ
0DU\ :LOOLDPV 693 &RIIHH 6WDUEXFNV &RUSRUDWLRQ
3DJH $0
0HUFKDQGLVLQJ
5HDOHVWDWH $SSURDFK
6WDUEXFNV FRQVLGHUHG LWVHOI WR EH UHDO HVWDWH RSSRUWXQLVWLF ,W GLG QRW DOZD\V ZDLW IRU WKH
SHUIHFWO\ GHVLJQHG ORFDWLRQ LH D ER[ ,W KDG D GHVLJQ WHDP WKDW FRXOG ILW D ORFDWLRQ LQ
PDQ\ UHWDLO VSDFHV EH LW D FRUQHU D WUDSH]RLG RU WULDQJOH 7KLV IOH[LELOLW\ LQ DGGLWLRQ WR
6WDUEXFNV FRQFHSW RI VWRUH FOXVWHULQJ ZKLFK RIWHQ SODFHG UHWDLO RXWOHWV DFURVV IURP RQH
DQRWKHU RU RQ WKH VDPH EORFN DOORZHG 6WDUEXFNV WR PD[LPL]H LWV PDUNHW VKDUH LQ JLYHQ
DUHDV RI D FLW\ DQG WR EHJLQ EXLOGLQJ D UHJLRQDO UHSXWDWLRQ
7R PHHW LWV JURZWK QHHGV 6WDUEXFNV KDG DSSUR[LPDWHO\ UHDO HVWDWH PDQDJHUV DFURVV
WKH FRXQWU\ 7KHVH PDQDJHUV ZRUNHG ZLWK VWUHHW VQLIIHUV LH SURIHVVLRQDOV ZKR
VSHFLDOL]HG LQ LGHQWLI\LQJ WKH EHVW UHWDLO ORFDWLRQV 7KHLU FRPPLVVLRQV ZHUH SDLG HLWKHU
E\ WKH ODQGORUG RU E\ 6WDUEXFNV 7KHVH UHDO HVWDWH EURNHUV ZHUH JXDUDQWHHG D PLQLPXP
FRPPLVVLRQ SHU ORFDWLRQ ,I WKH ODQGORUGV EURNHUDJH FRPPLVVLRQ GLG QRW FRYHU WKH
PLQLPXP 6WDUEXFNV SDLG WKH GLIIHUHQFH 7KLV HQJHQGHUHG D YHU\ OR\DO UHODWLRQVKLS
EHWZHHQ 6WDUEXFNV DQG WKH UHDO HVWDWH QHWZRUN
6WDUEXFNV ZDV YHU\ GLVFLSOLQHG DERXW LWV HQWLUH DSSURDFK WR UHDO HVWDWH
$V 6WDUEXFNV JUHZ DQG WKH QXPEHU RI $ VLWHV LQ $ PDUNHWV GHFUHDVHG RQH RI WKH NH\
FKDOOHQJHV IDFHG E\ 6WDUEXFNV ZDV WR FRQVWDQWO\ PRWLYDWH LWV UHDO HVWDWH VWDII WR FRQWLQXH
WR JHQHUDWH WR VROLG VWRUHV SHU PRQWK 6WDUEXFNV KDG WR PHHW WKLV FKDOOHQJH LI LW ZDV
JRLQJ WR PHHW LWV JRDO RI VWRUHV E\ WKH \HDU 7UDGLWLRQDOO\ 6WDUEXFNV KDG EHHQ
$UWKXU 5XELQIHOG 6HQLRU 9LFH3UHVLGHQW 5HDO (VWDWH 6WDUEXFNV &RUSRUDWLRQ
3DJH $0
IRFXVHG RQ WKH UHWDLO VWRUH RQ 0DLQ DQG 0DLQ RI HYHU\ PDMRU 1RUWK $PHULFDQ FLW\ 1RZ
LW ZDV H[SDQGLQJ WR WKH 0DLQ DQG 0DLQ RI GLIIHUHQW UHJLRQV ZLWKLQ D FLW\ 6HH ([KLELW
IRU WKH DFWXDO DQG IRUHFDVWHG LQFRPH VWDWHPHQW RI D W\SLFDO VWRUH
$QRWKHU ZD\ LQ ZKLFK 6WDUEXFNV KRSHG WR UHDFK D QHZ FXVWRPHU EDVH ZDV WKURXJK WKH
LQWURGXFWLRQ RI LWV QHZ HVSUHVVR FDUWV RU NLRVNV %\ LQWURGXFLQJ 6WDUEXFNV (VSUHVVR
&DUWV WKH FRPSDQ\ KDG VXFFHHGHG LQ EUDQGLQJ WKH FRIIHH FDUW ZKLFK KDG DOZD\V EHHQ
D EUDQGOHVV JUDVVURRWV W\SH RI VSHFLDOW\ FRIIHH UHWDLOHU 6WDUEXFNV FDOOHG LWV YHUVLRQ RI
WKH HVSUHVVR FDUW 'RSSLR 7KH 'RSSLR ZDV DQ [IRRW FXEH WKDW XQIROGHG LQWR D ODUJHU
VWDQG ZLWK VLGHV FRXQWHUV DQG 6WDUEXFNV WUDGHPDUN ILQLVKHV ,W ZRXOG DOORZ WKH
FRPSDQ\ WR WDNH DGYDQWDJH RI VDOHV DUHDV VXFK DV WUDLQ VWDWLRQV VWUHHW FRUQHUV PDOOV HWF
6WDUEXFNV ZDV LQ WKH LQLWLDO VWDJHV RI LWV 'RSSLR VWUDWHJ\
7KH UHWDLO V\VWHP LV WKH EDVH RU DQFKRU RI WKH EUDQGEXLOGLQJ VWUDWHJ\ WKH
HVVHQFH RI WKH FRPSDQ\V SDVVLRQ IRU TXDOLW\ FRIIHH DQG WKH VKRZFDVH
IRU WKH OLIHVW\OH WKDW 6WDUEXFNV LV GHILQLQJ ,W LV WKLV OLIHVW\OH DWWULEXWH RI
WKH EUDQG WKDW FRXOG FDWDSXOW WKH FRPSDQ\ EH\RQG LWV URRWV DV D VSHFLDOLW\
UHWDLOHUUHVWDXUDQW ZLWK D IHZ FORVHO\ DVVRFLDWHG EUDQG H[WHQVLRQV
6WDUEXFNV GHFLGHG WR HQWHU WKH LQWHUQDWLRQDO PDUNHW SODFH WR SUHYHQW FRPSHWLWRUV IURP
JHWWLQJ D KHDG VWDUW WR EXLOG XSRQ WKH JURZLQJ GHVLUH IRU :HVWHUQ EUDQGV DQG WR WDNH
DGYDQWDJH RI KLJKHU FRIIHH FRQVXPSWLRQ UDWHV LQ GLIIHUHQW FRXQWULHV ,W IRFXVHG RQ $VLD
3DFLILF VLPSO\ EHFDXVH LW GLG QRW KDYH WKH UHVRXUFHV WR JR LQWR GLIIHUHQW DUHDV RI WKH JOREH
DW RQFH DQG EHFDXVH RQH KDOI RI WKH ZRUOGV SRSXODWLRQ OLYHG D ILYH DQG D KDOI KRXU IOLJKW
IURP WKH DUHD ,W ZDV H[SHFWHG WKDW LQ WKH QH[W ILYH WR WHQ \HDUV LQWHUQDWLRQDO UHWDLOV
FRQWULEXWLRQ ZRXOG EH VL]HDEOH 6HH ([KLELW IRU D IRUHFDVW RI ,QWHUQDWLRQDO 5HWDLOV
SRWHQWLDO FRQWULEXWLRQ WR 6WDUEXFNV HDUQLQJV $OVR VHH ([KLELW IRU D IRUHFDVW RI
6WDUEXFNV JURZWK LQ WKH 3DFLILF 5LP
63(&,$/7< 6$/(6
0HUULOO /\QFK &DSLWDO 0DUNHWV 6WDUEXFNV &RPSDQ\ 5HSRUW 6HSWHPEHU
3DJH $0
6RPH RI WKHVH SDUWQHUVKLSV LQYROYHG VHUYLQJ 6WDUEXFNV FRIIHH VRPH ZHUH IRU SURGXFW
GHYHORSPHQW DQG RWKHUV ZHUH IRU VWRUH GHYHORSPHQW 6WDUEXFNV ZDV DFWLYHO\ LQFUHDVLQJ
LWV SDUWLFLSDWLRQ LQ VSHFLDOW\ VDOHV FRQWUDFWV
1(: 9(1785(6
7KUHH RI 6WDUEXFNV QHZHVW EXVLQHVV YHQWXUHV LQFOXGHG LWV FRQWUDFW ZLWK 'UH\HUV ,FH
&UHDP LWV ERWWOHG )UDSSXFFLQR SURGXFW ZLWK 3HSVL DQG LWV SHQHWUDWLRQ LQWR WKH JURFHU\
FKDQQHO
,W ZDV HVWLPDWHG WKDW 6WDUEXFNV LFH FUHDP ZRXOG SHUKDSV UHDFK PLOOLRQ DW UHWDLO DQG
FRQWULEXWH DW OHDVW WR HDUQLQJV GXULQJ ILVFDO $OWKRXJK WKH UHWXUQ ZDV
VRPHZKDW OLPLWHG 6HH ([KLELW LW RSHQHG 6WDUEXFNV WR DQ HQWLUHO\ QHZ FXVWRPHU EDVH
UHLQIRUFHG LWV SUHPLXP TXDOLW\ LPDJH DQG EXLOW LWV UHSXWDWLRQ ZLWK VXSHUPDUNHW FKDLQV
HYHQ GR EHWWHU LQ FRXQWULHV ZKHUH WKHUH ZDV DOUHDG\ D PDUNHW IRU FROG FRIIHH EHYHUDJHV
OLNH WKH 3DFLILF 5LP %RWWOHG )UDSSXFFLQR ZDV FXUUHQWO\ EHLQJ RIIHUHG LQ DOO 6WDUEXFNV
UHWDLO VWRUHV DQG KDG EHJXQ WR EH GLVWULEXWHG YLD 3HSVL&RV QDWLRQDO GLVWULEXWLRQ FKDQQHOV
6HH ([KLELW IRU D IRUHFDVW RI ERWWOHG )UDSSXFFLQRV FRQWULEXWLRQ WR 6WDUEXFNV IXWXUH
HDUQLQJV
,Q SHQHWUDWLQJ WKH JURFHU\ PDUNHW 6WDUEXFNV PHW ZLWK D JUHDW GHDO RI VXFFHVV ZKHQ LW
EHJDQ WHVW PDUNHWLQJ LQ WKH 3RUWODQG DUHD 1RZ LW ZDV WHVW PDUNHWLQJ WKH &KLFDJR
PDUNHW ,I LW ZDV VXFFHVVIXO LQ &KLFDJR WKHQ LW ZRXOG FRQVLGHU LQLWLDWLQJ D QDWLRQDO UROO
RXW ZLWK WKH H[SHFWDWLRQ WKDW LQ ILYH \HDUV LW ZRXOG EH QDWLRQDOO\ DYDLODEOH 6HH ([KLELW
IRU DQ HVWLPDWH RI WKH LPSDFW RI D QDWLRQDO UROO RXW RQ 6WDUEXFNV HDUQLQJV 0U 2ULQ
6PLWK 6WDUEXFNV 3UHVLGHQW DQG &22 H[SODLQHG KRZ KH YLHZHG WKH LPSRUWDQFH RI
6WDUEXFNV SHQHWUDWLRQ LQWR WKH JURFHU\ FKDLQ
2WKHU DUHDV RI RSSRUWXQLW\ LQFOXGHG WKH LQWURGXFWLRQ RI 6WDUEXFNV FRIIHH WR WKH KLJKHU
HFKHORQ UHVWDXUDQWV DQG GD\SDUW FKDLQV 'D\SDUW FKDLQV DUH UHWDLO RXWOHWV FDWHULQJ WR WKH
GD\WLPH WUDGH ([DPSOHV DUH EDJHO VKRSV MXLFH EDUV OXQFK FRXQWHUV HWF
0$,/ 25'(5
)RU D ORQJ WLPH PDLO RUGHU KDG DOORZHG 6WDUEXFNV WR PHHW WKH QHHGV RI LWV FXVWRPHUV QRW
ORFDWHG QHDU D 6WDUEXFNV UHWDLO VWRUH DQG LWV UHJXODU KRPH XVHUV 7KH FRPSDQ\ KDG D GLUHFW
PDLO SURJUDP HQWLWOHG (QFRUH (QFRUH FXVWRPHUV UHFHLYHG D PRQWKO\ VKLSPHQW RI D
GLIIHUHQW W\SH RI HLWKHU JURXQG RU ZKROH EHDQ FRIIHH 7KLV SURJUDP KHOSHG ERRVW VDOHV
E\ LQFUHDVLQJ WUDQVDFWLRQ VL]H DQG LQWURGXFLQJ FXVWRPHUV WR D ZLGHU UDQJH RI FRPSDQ\
SURGXFWV
2ULQ 6PLWK &KLHI 2SHUDWLQJ 2IILFHU 6WDUEXFNV &RUSRUDWLRQ
3DJH $0
+2:$5' 6&+8/7=
+RZDUG 6FKXOW] EHJDQ KLV FRIIHH FDUHHU ZLWK 6WDUEXFNV &RIIHH &RPSDQ\ LQ ZKHQ
LW XVHG WR EH D UHWDLOHU VROHO\ RI ZKROH EHDQ FRIIHHV 2Q D EX\LQJ WULS WR ,WDO\ LQ
WKH YDVW QXPEHU RI FRIIHH EDUV LQ 0LODQ LQVSLUHG 0U 6FKXOW] +H UHWXUQHG WR 6WDUEXFNV
DQG SUHVHQWHG KLV LGHD WR H[SDQG WKH ZKROH EHDQ UHWDLOHU LQWR D FRIIHH EDU 7KH %RDUG RI
'LUHFWRUV UHMHFWHG KLV LGHD DQG WZR \HDUV ODWHU 0U 6FKXOW] OHIW 6WDUEXFNV WR VWDUW KLV RZQ
FRIIHH EDU FRPSDQ\ ZKLFK KH QDPHG ,O *LRUQDOH $IWHU WZR \HDUV RI JUHDW VXFFHVV ,O
*LRUQDOH SXUFKDVHG WKH 6WDUEXFNV QDPH DQG DVVHWV DQG FKDQJHG WKH QDPHV RI DOO RI LWV
UHWDLO RXWOHWV WR 6WDUEXFNV
+RZDUG 6FKXOW] FDPH IURP UDWKHU KXPEOH EHJLQQLQJV +H UHPHPEHUHG KRZ KLV IDWKHU
XVHG WR ZRUN KDUG IRU OLWWOH PRQH\ DQG QR UHVSHFW +H VDLG KLV XSEULQJLQJ LQVWLOOHG LQ KLP
QRW D IHDU RI IDLOXUH EXW D IHDU RI PHGLRFULW\ +H ZDV WKH ILUVW LQ KLV IDPLO\ WR JHW D
FROOHJH GHJUHH DQG KDG DOZD\V EHHQ DQ RYHUDFKLHYHU +H ZDV \RXQJ DQG HQHUJHWLF DW
DQG YHU\ KDQGVRQ LQ WKH FRPSDQ\ +RZDUG LV YHU\ FUHDWLYH KH LV YHU\ LQVSLULQJ KH
LV H[FHSWLRQDOO\ GHPDQGLQJ KH LV WUHPHQGRXVO\ FRPSHWLWLYH H[FHSWLRQDOO\ DPELWLRXV
DQG KDV YHU\ KLJK VWDQGDUGV LQ HYHU\WKLQJ ZH FDQ GR DQG KH LV DOZD\V UDWFKHWLQJ WKH EDU
XS +H UHDOO\ FDUHV DERXW SHRSOH DQ\WKLQJ DQ\RQH ZRXOG GR WR GDPDJH WKH FXOWXUH
KH ZRXOG EH ULJKW RQ LW
+RZDUG 6FKXOW] SOD\HG D YHU\ LPSRUWDQW DQG XQLTXH UROH DW 6WDUEXFNV 7KH EDULVWDV
LQWHUSUHWDWLRQ RI WKH YLVLRQ LV WKH HQJLQH RI WKH FRPSDQ\ +RZDUG LV WKH RQERDUG
FRPSXWHU DQG WR VRPH H[WHQW KH LV DOVR WKH IXHO WKDW GULYHV WKURXJK LW 3HRSOH DURXQG
KHUH IHHO YHU\ PXFK WKDW WKH\ DUH IROORZLQJ +RZDUG XS VRPH PRXQWDLQ ZLWK D IODJ
FOHQFKHG XQGHU WKHLU WHHWK DQG WKH\ JLYH SHU FHQW
+80$1 5(6285&(6
6WDUEXFNV KDG D YHU\ IODW RUJDQL]DWLRQDO VWUXFWXUH (YHU\RQH IURP WKH &(2 WR D EDULVWD
ZDV D SDUWQHU DQG QRW DQ HPSOR\HH 6WDUEXFNV SODFHG D JUHDW GHDO RI HIIRUW LQWR VHHNLQJ
WKH WKRXJKWV DQG RSLQLRQV RI LWV EDULVWDV EHFDXVH WKH\ ZHUH LQ GLUHFW FRQWDFW ZLWK
6WDUEXFNV FXVWRPHUV 6WDUEXFNV UHWDLO PDQDJHPHQW DW KHDGTXDUWHUV NHSW LQ UHJXODU
FRQWDFW ZLWK ILHOG SHRSOH 0DQ\ SHRSOH LQ WKH VWRUHV NQHZ 'HLGUD :DJHU WKH ([HFXWLYH
9LFH3UHVLGHQW RI 5HWDLO DQG ZRXOG QRW KHVLWDWH WR FDOO KHU GLUHFWO\ WR WDON DERXW WKH UHWDLO
JURXSV GHFLVLRQV 7KH KHDG RIILFH PDQDJHUV KDG VHVVLRQV ZLWK SHRSOH LQ WKH ILHOG
VWDQGDUG PLVVLRQ UHYLHZV ZKHUH WKH\ FROOHFWHG TXHVWLRQV IURP DQ\RQH DERXW DQ\ WRSLF
DQG WKHQ UHVSRQGHG DQG RSHQ IRUXPV ZKHUH WKH\ KHDUG IURP DQG OLVWHQHG WR WKH SDUWQHU
EDVH
2ULQ 6PLWK &KLHI 2SHUDWLQJ 2IILFHU 6WDUEXFNV &RUSRUDWLRQ
6FRWW %HGEXU\ 6HQLRU 9LFH3UHVLGHQW 0DUNHWLQJ 6WDUEXFNV &RUSRUDWLRQ
3DJH $0
7KH FRIIHH VHUYLFH V\VWHP ZDV EXLOW RQ WKUHH SULQFLSOHV KRVSLWDOLW\ SURGXFWLRQ DQG
HGXFDWLRQ 6WDUEXFNV H[SHFWHG EDULVWDV WR EH FXVWRPHUVHUYLFH RULHQWHG E\ EHLQJ
KRVSLWDEOH HIIHFWLYH LQ PDNLQJ H[DFWO\ WKH W\SH RI GULQN WKH FXVWRPHU UHTXHVWHG DQG DEOH
WR DQVZHU WKH FXVWRPHUV FRIIHHUHODWHG TXHVWLRQV 7KLV GHPDQGHG D JUHDW GHDO RI HIIRUW
RQ EHKDOI RI WKH EDULVWDV 7R SUHSDUH WKHP IRU WKH FKDOOHQJH WKH\ DOO XQGHUZHQW KRXUV
RI WUDLQLQJ EHIRUH WKH\ ZHUH DOORZHG WR VHUYH D FXS RI FRIIHH WR D 6WDUEXFNV FXVWRPHU
(YHU\ HPSOR\HH HYHQ WKRVH WKDW ZHUH KLUHG IRU H[HFXWLYH SRVLWLRQV ZHQW WKURXJK WKH
VDPH WUDLQLQJ SURJUDP ZKLFK LQFOXGHG D WZRZHHN WHUP LQ D VWRUH
,Q DGGLWLRQ WR WUDLQLQJ 6WDUEXFNV SDLG LWV SDUWQHUV D VOLJKWO\ KLJKHU ZDJH WKDQ PRVW IRRG
VHUYLFH FRPSDQLHV $OVR DOO HPSOR\HHV UHFHLYHG KHDOWK LQVXUDQFH YLVLRQ GHQWDO
PHGLFDO GLVDELOLW\ DQG OLIH LQVXUDQFH DQG D IUHH SRXQG RI FRIIHH HDFK ZHHN $OO
FRPSDQ\ HPSOR\HHV DOVR UHFHLYHG %HDQ 6WRFN DQ HPSOR\HH VWRFN RSWLRQ SODQ 7KLV
ZDV TXLWH SURILWDEOH IRU VRPH HPSOR\HHV
)URP LWV EDULVWDV WR LWV VHQLRU PDQDJHUV 6WDUEXFNV WRRN JUHDW FDUH LQ UHFUXLWPHQW )RU
EDULVWDV WXUQRYHU UDWHV ZHUH DERXW SHU FHQW WKLV ZDV OHVV WKDQ KDOI RI WKH LQGXVWU\
DYHUDJH WR SHU FHQW 0DQ\ RI WKH VHQLRU PDQDJHUV FDPH IURP FRPSDQLHV OLNH
7DFR %HOO 1LNH 0F'RQDOGV +DOOPDUN :HQG\V DQG %ORFNEXVWHU 7KHVH PDQDJHUV
NQHZ KRZ WR PDQDJH D KLJK JURZWK UHWDLOHU
25*$1,=$7,21$/ &8/785(
7KH IROORZLQJ VL[ JXLGLQJ SULQFLSOHV IURP WKH FRPSDQ\V $QQXDO 5HSRUW KHOSHG
6WDUEXFNV PHDVXUH WKH DSSURSULDWHQHVV RI LWV GHFLVLRQV
3URYLGH D JUHDW ZRUN HQYLURQPHQW DQG WUHDW HDFK RWKHU ZLWK UHVSHFW DQG GLJQLW\
(PEUDFH GLYHUVLW\ DV DQ HVVHQWLDO FRPSRQHQW RI WKH ZD\ ZH GR EXVLQHVV
$SSO\ WKH KLJKHVW VWDQGDUGV RI H[FHOOHQFH WR WKH SXUFKDVLQJ URDVWLQJ DQG IUHVK
GHOLYHU\ RI RXU FRIIHH
'HYHORS HQWKXVLDVWLFDOO\ VDWLVILHG FXVWRPHUV DOO RI WKH WLPH
&RQWULEXWH SRVLWLYHO\ WR RXU FRPPXQLW\ DQG RXU HQYLURQPHQW
5HFRJQLVH WKDW SURILWDELOLW\ LV HVVHQWLDO WR RXU IXWXUH VXFFHVV
:KHQ SHRSOH DVN PH ZKDW , GR IRU D OLYLQJ , VD\ , GULQN FRIIHH DQG WDON
DERXW LW 7KDWV P\ MRE QRW WRR VKDEE\ , KDYH D ORW WR OHDUQ DQG D ORW
RI SODFHV , FDQ JR LI , ZDQWHG WR OHDYH 6WDUEXFNV EXW LWV VR LQWHUHVWLQJ
DQG ,YH PHW WKH QHDWHVW SHRSOH WKDW ZRUN KHUH , KDYH D ORW RI SDVVLRQ
IRU LW <RX NQRZ \RX JR WKURXJK EXPSV DQG JULQGV EHFDXVH ZHYH
FKDQJHG D ORW EXW LWV OLNH EHLQJ LQ DQ\ NLQG RI UHODWLRQVKLS <RX IDOO LQ
ORYH LWV DOO JUHDW HYHU\WKLQJ LV EHDXWLIXO DQG WKHQ \RX ILQG RXW WKDW WKHUH
3DJH $0
DUH VRPH WKLQJV OLNH ZULQNOHV RU EDG KDELWV <RX ZRUN RQ WKRVH DQG WKHQ
\RXUH LQ SXSS\ ORYH DJDLQ , ORYH ZRUNLQJ DW 6WDUEXFNV P\ KXVEDQG
WKLQNV LWV SUHWW\ WZLVWHG , PHDQ , ZDV D VWRUH PDQDJHU DQG , OLYHG DW P\
VWRUH SHRSOH ZRXOG VD\ WKDW \RX GR VXFK D JUHDW MRE DQG , ZRXOG VD\
WKDW , FRXOGQW GR LW ZLWKRXW WKHVH SHRSOH , FDQW GR LW DORQH QRQH
RI XV FDQ , WRWDOO\ UHO\ RQ WKH ZHDOWK DQG GHSWK RI NQRZOHGJH WKDW RWKHU
SHRSOH KDYH WKH EDFNJURXQG WKH\ EULQJ WR 6WDUEXFNV WKHLU VXSSRUW DQG
ZRUN HWKLF $QG , MXVW HPEUDFH WKDW KXJHO\ , FDQ EULQJ P\ ZHLUG LGHDV
DQG EH DV JRRI\ DV , ZDQW RQH GD\ RU DV VHULRXV DV , QHHG WR EH DQRWKHU
GD\ DQG LWV 2. :KHQ , VWDUWHG DW 6WDUEXFNV VRPHRQH WROG PH \RX WHOO
PH ZKDW \RX ZDQW WR GR DQG , ZLOO KHOS \RX
,Q D GD\ RIIVLWH ZLWK -LP &ROOLQV DXWKRU RI %XLOW WR /DVW WKH VHQLRU
PDQDJHPHQW WHDP RI SHRSOH RU VR ZDV GLYLGHG LQWR JURXSV RI IRXU
)LUVW ZH LGHQWLILHG RXU RZQ VHW RI YDOXHV DQG WKHQ ZKHQ ZH EURNH LQWR
JURXSV RI IRXU SHRSOH DQG FRPELQHG RXU OLVWV RI YDOXHV ,W ZDV
DEVROXWHO\ PLQGERJJOLQJ WKDW ZH DOO FDPH EDFN DQG KDG H[DFWO\ WKH
VDPH OLVW RI YDOXHV &ROOLQV KDG QHYHU VHHQ DQ\WKLQJ OLNH WKDW (YHU\RQH
LV SDVVLRQDWH DERXW ZKDW WKH\ GR DERXW OLIH DERXW HYHU\WKLQJ
(YHU\ERG\ KDV D VHQVH RI LQWHJULW\ WKDW ZH ZDQW WR VXFFHHG EXW ZH ZDQW
WR GR LW LQ D IDLU HTXLWDEOH HWKLFDO ZD\ :H FDUH DERXW ZLQQLQJ \RX
NQRZ ZH DUHQW DVKDPHG WR DGPLW WKDW ZH ZDQW WR EH VXFFHVVIXO WKDW ZH
GR FDUH DERXW SHRSOH DQG GR UHVSHFW RXU SDUWQHUV 7KH ILIWK YDOXH ZDV RXU
HQWUHSUHQHXULDO VSLULW :H GRQW ZDQW WKLV WR EHFRPH D ELJ FRPSDQ\ ZH
ZDQW WR FRQWLQXDOO\ VWULYH WR EH LQQRYDWLYH DQG FRQWLQXDOO\ UHMXYHQDWH WKH
FRPSDQ\
),1$1&,$/
6WDUEXFNV VWRFN SULFH DQG (36 KDG EHHQ UDSLGO\ LQFUHDVLQJ RYHU WKH ODVW ILYH \HDUV 6HH
([KLELW ,Q WKH VSDQ RI VL[ PRQWKV IURP -DQXDU\ WR -XQH IRXU SURPLQHQW
LQYHVWPHQW FRPSDQLHV KDG UDWHG WKH FRPSDQ\ DV D %8< LQ WKHLU UHSRUW WR LQYHVWRUV
6HH ([KLELW IRU D IRUHFDVW IURP HDFK RI WKHVH FRPSDQLHV UHJDUGLQJ (36 3( UDWLRV DQG
VKDUH SULFH 2QH LQYHVWPHQW FRPSDQ\ WKDW UDWHG 6WDUEXFNV DV D ORQJWHUP EX\ VWDWHG
$LOHHQ &DUUHOO &RIIHH 7DVWHU 6WDUEXFNV &RUSRUDWLRQ
/L] 6LFNOHU 'LUHFWRU 6SHFLDO 3URMHFWV 6WDUEXFNV &RUSRUDWLRQ
3DJH $0
,Q 1RUWK $PHULFD 6WDUEXFNV RZQHG DOO RI LWV UHWDLO RXWOHWV RWKHU WKDQ KRVW OLFHQVLQJ
DUUDQJHPHQWV +RZHYHU RZQLQJ DOO RI LWV VWRUHV 6WDUEXFNV ZDV IDFHG ZLWK WKH SURVSHFW
RI GHSHQGLQJ KHDYLO\ RQ HTXLW\ DQG GHEW ILQDQFLQJ WR JURZ ,WV FRPSHWLWRUV OLNH 6HDWWOHV
%HVW &RIIHH DQG WKH 6HFRQG &XS ZHUH DOO IUDQFKLVHG DQG FRQVHTXHQWO\ QHHGHG OHVV
LQWHUQDO ILQDQFLQJ WR UROO RXW VWRUHV )RU 6WDUEXFNV EDODQFH VKHHW VHH ([KLELW )RU WKH
LQFRPH VWDWHPHQW VHH ([KLELW
0$5.(7,1*
2I NH\ FRQFHUQ LQ 6WDUEXFNV PDUNHWLQJ GHSDUWPHQW ZDV LWV EUDQG HTXLW\ 7KH UHWDLO
EXVLQHVV KDG KLVWRULFDOO\ EHHQ 6WDUEXFNV VRXUFH RI EUDQG HTXLW\ 7KLV KDG PHDQW WKDW
6WDUEXFNV ZDV QHYHU MXVW DERXW WKH FRIIHH LW ZDV DERXW D SODFH DQ H[SHULHQFH
6WDUEXFNV QRZ ZDQWHG WR GHYHORS LWV EUDQG EH\RQG EHLQJ WKH SUHIHUUHG RXWOHW IURP ZKLFK
WR SXUFKDVH FRIIHH WR EHFRPLQJ WKH SUHIHUUHG FRQVXPHU EUDQG 6FRWW %HGEXU\ 6WDUEXFNV
6HQLRU 9LFH3UHVLGHQW RI 0DUNHWLQJ H[SODLQHG LWV EUDQG
:H DUH WUDQVLWLRQLQJ IURP D YHU\ UHWDLO FHQWULF YLHZ DERXW WKH EUDQG WR
D YLHZ WKDW ZLOO DOORZ XV WR VD\ WKDW 6WDUEXFNV UROH LV WR SURYLGH
XSOLIWLQJ PRPHQWV WR SHRSOH HYHU\ GD\ , GLGQW VD\ FRIIHH ,I \RX JR
EH\RQG FRIIHH \RX FDQ JHW WR PXVLF \RX FDQ JHW WR OLWHUDWXUH \RX FDQ
JHW WR D QXPEHU RI GLIIHUHQW DUHDV ,W FDQ DOVR EHFRPH D OLFHQVH WR GLOXWH
WKH EUDQG 7KHUHIRUH RXU JRDO LV WR UHPDLQ WUXH WR RXU FRUH FRIIHH $IWHU
DOO ZH DUH WKH SURWHFWRUV RI VRPHWKLQJ WKDW LV PLOOLRQ \HDUV ROG -XVW
OLNH ZKHQ \RX GURS D URFN LQ D SRQG WKHUH ZLOO EH ULSSOHV WKDW FRPH
:LOOLDP %ODLU DQG &RPSDQ\ RQ -XQH
3DJH $0
RXWVLGH WKDW FRUH 6WDUEXFNV LV QRW MXVW D SRXQG RI FRIIHH EXW D WRWDO
FRIIHH H[SHULHQFH
2QH RI WKH NH\ FKDOOHQJHV IDFHG E\ 6WDUEXFNV ZDV WU\LQJ FRQFUHWHO\ WR GHILQH LWV EUDQG
LPDJH &RPSDQ\ H[HFXWLYHV IHOW WKDW WKLV ZDV HVVHQWLDO EHIRUH 6WDUEXFNV VWDUWHG
PRXQWLQJ JUDQGVFDOH QDWLRQDODGYHUWLVLQJ FDPSDLJQV DQG RWKHU EUDQG OHYHUDJLQJ
DFWLYLWLHV /L] 6LFNOHU 6WDUEXFNV 'LUHFWRU RI 6SHFLDO 3URMHFWV FRPPHQWHG
, GRQW WKLQN WKDW ZH OHYHUDJH RXU VL]H ZHOO HQRXJK 9HU\ RIWHQ ZH KDYH
VWURQJ FRPSHWLWLRQ LQ ORFDO PDUNHWV IURP &DULERX WR 6HDWWOHV %HVW
&RIIHH WR WKH 6HFRQG &XS LQ &DQDGD $QG LWV DOZD\V PLQGERJJOLQJ
KRZ WKH\ FDQ EH VR FRPSHWLWLYH LQ WKHLU ORFDO PDUNHWV GHVSLWH WKH IDFW
WKDW RXU QDWLRQDO EUDQG LPDJH LV VR PXFK VWURQJHU :H QHHG WR WDNH
DGYDQWDJH RI RXU QDWLRQDO SUHVHQFH :H QHHG WR FRPSHWH RQ RXU EUDQG
UHFRJQLWLRQ , WKLQN WKDWV ZK\ ZH VWDUWHG WR GR VRPH QDWLRQDO
DGYHUWLVLQJ WKLV \HDU WR VHH LI WKDWV KRZ ZH FDQ OHYHUDJH RXU VL]H , WKLQN
JRLQJ LQWR GLIIHUHQW GLVWULEXWLRQ FKDQQHOV DQG OHYHUDJLQJ WKH EUDQG LV WKH
DQVZHU
237,216
+RZDUG 6FKXOW] DQG WKH VHQLRU PDQDJHPHQW DW 6WDUEXFNV ZHUH FRPPLWWHG WR WKH
FRPSDQ\V VWUDWHJ\ ,W ZDV IHOW WKDW 6WDUEXFNV FXUUHQW VWUDWHJLF GLUHFWLRQ ZRXOG DOORZ
LW WR VXVWDLQ JURZWK E\ FRQWLQXLQJ WKH GHYHORSPHQW RI WKH 6WDUEXFNV EUDQG LPDJH DQG E\
LQFUHDVLQJ LWV SUHVHQFH LQ GLIIHUHQW PDUNHWV 6WDUEXFNV ZDV JURZLQJ YHU\ UDSLGO\ DQG ZDV
FRQVLVWHQWO\ HYDOXDWLQJ QHZ RSSRUWXQLWLHV LQ LWV GRPHVWLF DQG LQWHUQDWLRQDO UHWDLO PDUNHWV
QHZ VSHFLDOW\ VDOHV SDUWQHUV SHQHWUDWLRQ LQ WKH JURFHU\ FKDQQHO DQG WKH IXWXUH SRWHQWLDO
RI LWV PDLO RUGHU EXVLQHVV +RZ WKH FRPSDQ\ VKRXOG UHDFW WR DOO RI WKHVH RSSRUWXQLWLHV
ZDV RQH RI 0U 6FKXOW]V NH\ FRQFHUQV
3DJH $0
([KLELW
([KLELW
( (
JURZWK JURZWK
*URXQG 5HJXODU
*URXQG 'HFDIIHLQDWHG
*URXQG 6SHFLDOW\
,QVWDQW 5HJXODU
,QVWDQW 'HFDIIHLQDWHG
:KROH %HDQ
5HDG\7R'ULQN
7RWDO
6RXUFH <RUNWRQ 6HFXULWLHV ,QF 0DUFK
3DJH $0
([KLELW
86 &RPSDQLHV
%URWKHUV
&RIIHH 3HRSOH
'LHGULFK
*UHHQ 0RXQWDLQ
6WDUEXFNV
&DQDGLDQ &RPSDQLHV
&DUD
9DQ +RXWWH
6HFRQG &XS
86 &RPSDQLHV
%URWKHUV
&RIIHH 3HRSOH
'LHGULFK
*UHHQ 0RXQWDLQ
6WDUEXFNV
$YHUDJH
&DQDGLDQ &RPSDQLHV
&DUD
9DQ +RXWWH
6HFRQG &XS
$YHUDJH
7(9 LV WRWDO HQWHUSULVH YDOXH GHILQHG DV FXUUHQW PDUNHW FDS SOXV GHEW OHVV FDVK 'HEW DQG FDVK DUH DV ODWHVW DYDLODEOH EDODQFH
VKHHW GDWH
(%,7'$ IRU %URWKHUV DQG 'LHGULFK LV WUDLOLQJ WZHOYH PRQWKV
([KLELW
( ( (
&DVK ,QYHVWPHQW
6WRUH %XLOG 2XW
3UHRSHQLQJ
%HJLQQLQJ ,QYHQWRU\
7RWDO &DVK ,QYHVWPHQW
$YHUDJH 6DOHV6WRUH
$YHUDJH 6DOHV,QYHVWPHQW [ [ [ [ [ [
(%,7 0DUJLQ
(%,7
52, (%,7&DVK ,QYHVWHG
(VWLPDWHG ,QYHVWPHQW SHU VWRUH RSHQHG GXULQJ WKH ILVFDO \HDU (VWLPDWHG DYHUDJH VDOHV DQG (%,7 IRU XQLWV RSHQ DW OHDVW RQH
\HDU (%,7 LQFOXGHV PDUNHWLQJ DQG ILHOG OHYHO RYHUKHDG H[SHQVHV
([KLELW
1HZ XQLWV
(QGLQJ XQLWV
$YHUDJH XQLW YROXPH
7RWDO VDOHV D
D 1RWH WKDW WRWDO VDOHV UHIOHFW VDOHV RI MRLQW YHQWXUHV SDUWQHUVKLSV DQG OLFHQVHHV :H H[SHFW DGGLWLRQDO SDUWQHUVKLS DJUHHPHQWV LQ WKH
3DFLILF 5LP WR EH GLVFORVHG EHIRUH \HDUHQG ,Q IDFW DQ H[HFXWLYH RI 3UHVLGHQW )RRGV WKH ODUJHVW IRRG FRPSDQ\ LQ 7DLZDQ DQG D (OHYHQ
IUDQFKLVHH ZDV UHFHQWO\ TXRWHG VD\LQJ WKDW WKH FRPSDQ\ H[SHFWHG WR GHYHORS 6WDUEXFNV VWRUHV LQ 7DLZDQ DQG SHUKDSV &KLQD *LYHQ
WKH PDJQLWXGH RI WKH RSSRUWXQLW\ LQ WKH 3DFLILF 5LP ZH GR QRW DQWLFLSDWH GHYHORSPHQW LQ (XURSH XQWLO DW OHDVW :KHUHDV WKH ORQJWHUP
SRWHQWLDO RI LQWHUQDWLRQDO GHYHORSPHQW LV WUHPHQGRXV ZH H[SHFW H[SHQVHV RI EXLOGLQJ LQIUDVWUXFWXUH DQG JURZLQJ UDSLGO\ ZLOO EH D GUDJ RQ
6WDUEXFNV SURILWV DW OHDVW WKURXJK 'HSHQGLQJ RQ WKH VWUXFWXUH RI IXWXUH LQWHUQDWLRQDO YHQWXUHV WKLV EXVLQHVV FRXOG EHFRPH D
VLJQLILFDQW FRQVXPHU RI 6WDUEXFNV LQYHVWPHQW FDSLWDO
([KLELW
( ( (
$QQXDO ,QYHVWPHQW
,FH &UHDP
%RWWOHG %HYHUDJHV
:KROH %HDQ
7RWDO
5HWDLO 5HYHQXHV
,FH &UHDP
%RWWOHG %HYHUDJHV
:KROH %HDQ
7RWDO
,FH &UHDP
%RWWOHG %HYHUDJHV
:KROH %HDQ
7RWDO
([KLELW
,1&20( 67$7(0(17
86 WKRXVDQGV
( ( (
1HW 5HYHQXHV
5HWDLO
6SHFLDOW\ 6DOHV
'LUHFW 5HVSRQVH
7RWDO 1HW 5HYHQXHV
6WRUH 2SHUDWLQJ ([SHQVHV
2WKHU 2SHUDWLQJ ([SHQVHV
&RVW RI 6DOHV DQG 5HODWHG 2FFXSDQF\ &RVWV
2SHUDWLQJ ,QFRPH
2WKHU ([SHQVHV
(DUQLQJV EHIRUH LQFRPH WD[HV
,QFRPH 7D[HV
1HW (DUQLQJV
3UHIHUUHG 6WRFN 'LYLGHQGV $FFUXHG
1HW (DUQLQJV $YDLODEOH WR &RPPRQ 6KDUHKROGHUV
1HW (DUQLQJV 3HU 6KDUH
:HLJKWHG $YHUDJH 6KDUHV 2XWVWDQGLQJ
$YHUDJH 6KDUH 3ULFH
3ULFH (DUQLQJV 5DWLRV
1RWH 7KH (36 LQ H[FOXGHV WKH JDLQV IURP WKH VDOH RI 1RDKV %DJHOV
1RWH 7KH (36 LQ ZRXOG EH ZLWKRXW WKH RQHWLPH FKDUJHV DVVRFLDWHG ZLWK WKH DFTXLVLWLRQ
RI &RIIHH &RQQHFWLRQ
1RWH 2Q 'HFHPEHU WKH FRPSDQ\ UHFRUGHG D IRU VWRFN VSOLW WR KROGHUV RI UHFRUG RQ 1RYHPEHU
1HW HDUQLQJV SHU VKDUH IRU DOO \HDUV KDYH EHHQ UHVWDWHG WR UHIOHFW WKH VWRFN VSOLW
6RXUFHV 6WDUEXFNV $QQXDO 5HSRUWV :LOOLDP %ODLU &RPSDQ\
3DJH $0
([KLELW
3DLQHZHEEHU ,QF ( (
([KLELW
%$/$1&( 6+((7
86 WKRXVDQGV
( ( (
$VVHWV
&XUUHQW $VVHWV
&DVK DQG &DVK (TXLYDOHQWV
$FFRXQWV 5HFHLYDEOH
,QYHQWRULHV
2WKHU &XUUHQW $VVHWV
7RWDO &XUUHQW $VVHWV
3URSHUW\ DQG (TXLSPHQW 1HW
2WKHU $VVHWV
7RWDO $VVHWV
/LDELOLWLHV DQG 6KDUHKROGHUV
(TXLW\
&XUUHQW /LDELOLWLHV
$FFRXQWV 3D\DEOH
2WKHU &XUUHQW /LDELOLWLHV
7RWDO &XUUHQW /LDELOLWLHV
2WKHU /LDELOLWLHV
6KDUHKROGHUV (TXLW\
&RPPRQ 6WRFN
5HWDLQHG (DUQLQJV
7RWDO 6KDUHKROGHUV (TXLW\
7RWDO /LDELOLWLHV