Alibaba Group — Presentation / slide deck (8-K exhibit)

Alibaba Group (BABA) · 147 slides · Filed Jun 18, 2026

Every slide of this earnings presentation, with the text as published. Open the original deck ↗ · All BABA deck slides

Slide 1 — Exhibit 99.2

Exhibit 99.2

Slide 2 — &RQWHQWV

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

Open the original at slide 2 ↗

Slide 3 — 7RPDNHLWHDV\WRGR

2XUPLVVLRQ 2XUYLVLRQ 2XUIRXQGHUVVWDUWHGRXUFRPSDQ\WRFKDPSLRQVPDOOEXVLQHVVHVLQWKHEHOLHIWKDWWKH,QWHUQHWZRXOGOHYHOWKH SOD\LQJŀHOGE\HQDEOLQJVPDOOHQWHUSULVHVWROHYHUDJHLQQRYDWLRQDQGWHFKQRORJ\WRJURZDQGFRPSHWHPRUH HłHFWLYHO\LQGRPHVWLFDQGJOREDOHFRQRPLHV:HEHOLHYHWKDWFRQFHQWUDWLQJRQFXVWRPHUQHHGVDQGVROYLQJWKHLU SUREOHPVȨZKHWKHUWKRVHFXVWRPHUVDUHFRQVXPHUVPHUFKDQWVRUHQWHUSULVHVȨ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ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW

Open the original at slide 3 ↗

Slide 4 — 2XUYDOXHV

&XVWRPHUV ŀUVW HPSOR\HHVVHFRQG VKDUHKROGHUVWKLUG 7UXVWPDNHV HYHU\WKLQJVLPSOH &KDQJHLV WKHRQO\FRQVWDQW 7RGD\ V EHVWSHUIRUPDQFHLV WRPRUURZ VEDVHOLQH /LYHVHULRXVO\ ZRUNKDSSLO\ ,IQRWQRZZKHQ" ,IQRWPHZKR" 2XUYDOXHV 2XUYDOXHVDUHIXQGDPHQWDOWRWKHZD\ZHRSHUDWHDQG KRZZHUHFUXLWHYDOXDWHDQGFRPSHQVDWHRXUSHRSOH 7KLVUHŁHFWVRXUFKRLFHRIZKDWІVLPSRUWDQWLQRUGHURISULRULW\2QO\E\FUHDWLQJVXVWDLQHG FXVWRPHUYDOXHFDQHPSOR\HHVJURZDQGVKDUHKROGHUVDFKLHYHORQJWHUPEHQHŀW 7UXVWLVERWKWKHPRVWSUHFLRXVDQGIUDJLOHWKLQJLQWKHZRUOG 7KHVWRU\RIɹɽLEDEDLVDVWRU\RIEXLOGLQJDQGFKHULVKLQJ WUXVW&RPSOH[LW\EHJHWVFRPSOH[LW\DQGVLPSOLFLW\EUHHGV VLPSOLFLW\$OLUHQ 服抚ᾈDUHVWUDLJKWIRUZDUGȨZKDW\RXVHH LVZKDW\RXJHW:LWKWUXVWWKHUHLVQRVHFRQGJXHVVLQJRU VXVSLFLRQDQGWKHUHVXOWLVVLPSOLFLW\DQGHŃFLHQF\ :KHWKHU\RXFKDQJHRUQRWWKHZRUOGLVFKDQJLQJRXUFXVWRPHUVDUH FKDQJLQJDQGWKHFRPSHWLWLYHODQGVFDSHLVFKDQJLQJ:HPXVWIDFH FKDQJHZLWKUHVSHFWDQGKXPLOLW\2WKHUZLVHZHZLOOIDLOWRVHHLWIDLOWR UHVSHFWLWIDLOWRXQGHUVWDQGLWDQGIDLOWRFDWFKXSZLWKLW:KHWKHU\RX FKDQJH\RXUVHOIRUFUHDWHFKDQJHERWKDUHWKHEHVWNLQGVRIFKDQJH (PEUDFLQJFKDQJHLVWKHPRVWXQLTXHSDUWRIRXU'1$ ,QɹɽLEDEDІVPRVWFKDOOHQJLQJWLPHVWKLVVSLULWKDVKHOSHG XVRYHUFRPHGLŃFXOWLHVDQGVXUYLYH,QEDGWLPHVZHNQRZ KRZWRPRWLYDWHRXUVHOYHVLQJRRGWLPHVZHGDUHWRVHW GUHDPWDUJHWVVWUHWFKJRDOV)DFHWKHIXWXUHRUZH UHJUHVV:HPXVWVKRRWIRUWKHPRRQFKDOOHQJHRXUVHOYHV PRWLYDWHRXUVHOYHVDQGH[FHHGRXUVHOYHV 7KLVZDVDWDJOLQHLQɹɽLEDEDІVŀUVWMREDGYHUWLVHPHQWDQG EHFDPHRXUŀUVWSURYHUE,WLVQRWDTXHVWLRQEXWDFDOORI GXW\7KLVSURYHUEV\PEROL]HVWKHVHQVHRIRZQHUVKLSWKDW HDFK$OLUHQPXVWSRVVHVV :RUNLVQRZOLIHLVIRUHYHU:KDW\RXGRLQ\RXUMRE LVXSWR\RXEXW\RXKDYHUHVSRQVLELOLW\WRWKHRQHV ZKRORYH\RX(QMR\ZRUNDV\RXHQMR\OLIHWUHDWOLIH VHULRXVO\DV\RXGRZRUN,I\RXOLYHZLWKSXUSRVH \RXZLOOŀQGUHZDUG<RXPDNHɹɽLEDEDGLłHUHQW DQGPDNH\RXUORYHGRQHVSURXG(YHU\RQHKDVWKHLU RZQYLHZRIZRUNDQGOLIHZHUHVSHFWHDFKSHUVRQІV FKRLFH:KHWKHU\RXOLYHE\WKLVYDOXHGHSHQGVRQ KRZ\RXOLYH\RXUOLIH &XVWRPHUVŀUVWHPSOR\HHVVHFRQGVKDUHKROGHUVWKLUG 7UXVWPDNHVHYHU\WKLQJVLPSOH &KDQJHLVWKHRQO\FRQVWDQW 7RGD\ІVEHVWSHUIRUPDQFHLV WRPRUURZІVEDVHOLQH ,IQRWQRZZKHQ",IQRWPHZKR" /LYHVHULRXVO\ZRUNKDSSLO\ &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW

Open the original at slide 4 ↗

Slide 5 — 5HVSRQVLEOH$,6XVWDLQDEOH*URZWK

$OHWWHUIURPRXU&(2 5HVSRQVLEOH$,6XVWDLQDEOH*URZWK (GGLH:X &KLHI([HFXWLYH2ŃFHU ɹɽLEDED*URXS -XQH $,LVUDSLGO\EHFRPLQJIRXQGDWLRQDOLQIUDVWUXFWXUHDVHVVHQWLDOWRPRGHUQ VRFLHW\DVZDWHURUHOHFWULFLW\,WDOVRUHSUHVHQWVWKHGHŀQLQJFRQWH[WLQZKLFK HQYLURQPHQWDOVRFLDODQGJRYHUQDQFHFKDOOHQJHVPXVWEHDGGUHVVHG 5HPDLQLQJDUHVSRQVLEOHKLJKLQWHJULW\FRPSDQ\LQWKHDJHRI$,LVWKH FHQWUDOFRPPLWPHQWRIɹɽLEDED V(6*VWUDWHJ\ 7KHJOREDOFRPSHWLWLRQIRUFKLSOHDGHUVKLSPRGHOFDSDELOLWLHVDQG$, DSSOLFDWLRQVKDVLQWHQVLŀHGFRQVLGHUDEO\ɹɽLEDEDLVWDUJHWLQJWKHIURQWLHU RI$,WHFKQRORJ\GHYHORSPHQWZKLOHUHPDLQLQJGHHSO\DWWHQWLYHWRWKH UHODWLRQVKLSEHWZHHQ$,SURJUHVVDQGEURDGHUVRFLDOGHYHORSPHQWHQVXULQJ WKDW$,DGYDQFHVVDIHO\UHOLDEO\DQGLQVHUYLFHRISHRSOH 2YHUWKHSDVW\HDU'$02$FDGHP\ V'$02*5$3(PRGHOWKHZRUOG V ŀUVW$,V\VWHPIRUGHWHFWLQJHDUO\VWDJHJDVWULFFDQFHUYLDQRQFRQWUDVW&7 VFDQVZDVSXEOLVKHGLQWKHOHDGLQJSHHUUHYLHZHGMRXUQDO1DWXUH0HGLFLQH ɹɽLEDED VSLRQHHULQJ$,&ROOHJH$SSOLFDWLRQ5HSRUWVHUYLFHJHQHUDWHGQHDUO\ PLOOLRQSHUVRQDOL]HGDGPLVVLRQVUHSRUWVIRUVWXGHQWVQDYLJDWLQJ&KLQD V XQLYHUVLW\DSSOLFDWLRQSURFHVV2XU&ORXGIRU<RXWK3URJUDPKDVIXQGHGWKH FRQVWUXFWLRQRI&ORXG&RPSXWHU&ODVVURRPVSURYLGLQJWHDFKHUVDQG VWXGHQWVDFURVV&KLQDZLWKDFFHVVWRPRUHWKDQSHUVRQDOFORXG FRPSXWLQJDFFRXQWV:HSDUWQHUHGZLWK7VLQJKXD8QLYHUVLW\WRHVWDEOLVKWKH :XTLRQJ$FDGHP\GHGLFDWHGWRIURQWLHU$,UHVHDUFKDQGQH[WJHQHUDWLRQ WDOHQWGHYHORSPHQW$,LVRSHQLQJQHZDYHQXHVWKURXJKSUHYLRXVO\ LQWUDFWDEOHVRFLDOFKDOOHQJHVDQGH[SDQGLQJWKHEUHDGWKRIRXUFROODERUDWLYH SDUWQHUVKLSV $V$,DGRSWLRQDFFHOHUDWHVJOREDOO\WKHUHVLOLHQFHDQGHQYLURQPHQWDO VXVWDLQDELOLW\RIHQHUJ\VXSSO\KDYHEHFRPHDUHDVRIVLJQLŀFDQWIRFXV DQGIRUXVDFWLYHLQYHVWPHQWɹɽLEDEDZDVWKHHDUOLHVWSURSRQHQWRIJUHHQ GDWDFHQWHUSUDFWLFHVLQ&KLQDDQGWKHŀUVWWRHVWDEOLVKDJRDORIDFKLHYLQJ FOHDQHQHUJ\XVHDFURVVRXUIDFLOLWLHV&RPSDUHGWRŀYH\HDUVDJR WKHSURSRUWLRQRIFOHDQHOHFWULFLW\XVHGDFURVVRXUVHOIEXLOWGDWDFHQWHUV KDVLQFUHDVHGVXEVWDQWLDOO\DQG38(WKHFRUHPHWULFIRUGDWDFHQWHUHQHUJ\ HŃFLHQF\KDVGHFOLQHG\HDURYHU\HDU2YHUWKHSDVW\HDUZHGHHSHQHGRXU FRPSXWHHQHUJ\FRRUGLQDWLRQIUDPHZRUNGLUHFWLQJLQFUHPHQWDOFRPSXWLQJ FDSDFLW\WRZDUGUHJLRQVZLWKPRUHDEXQGDQWFRVWHł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ɹɽLEDED VVXVWDLQHGDQG XQZDYHULQJFRPPLWPHQWWR$, &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW

Open the original at slide 5 ↗

Slide 6 — %RDUG6WDWHPHQW

%RDUG6WDWHPHQW ɹɽLEDEDKDVHVWDEOLVKHGDWKUHHWLHUHG(6*JRYHUQDQFHVWUXFWXUHFRQVLVWLQJRI WKH6XVWDLQDELOLW\&RPPLWWHH6&WKH6XVWDLQDELOLW\6WHHULQJ&RPPLWWHH66& DQGWKH(6*:RUNLQJ*URXS ɹɽLEDED*URXSІV%RDUGKDVHVWDEOLVKHGWKH6&WRDVVLVWWKH%RDUGLQLGHQWLI\LQJ DQGHYDOXDWLQJWKH&RPSDQ\ІV(6*RSSRUWXQLWLHVDQGULVNVLQFOXGLQJFOLPDWH UHODWHGULVNVDQGRSSRUWXQLWLHVDQGLQRYHUVHHLQJWKH&RPSDQ\ІV(6*VWUDWHJLHV DQGJRDOVLQFOXGLQJWKHLPSOHPHQWDWLRQDQGSHUIRUPDQFHRI(6*LQLWLDWLYHVDQG SURMHFWV7KH6&UHSRUWVUHJXODUO\WRWKH%RDUGZLWKUHVSHFWWR(6*PDWWHUV 7KH66&FRQVLVWLQJRIPHPEHUVRIWKH&RPSDQ\ІVPDQDJHPHQWWHDPLV UHVSRQVLEOHIRUWKHGDLO\H[HFXWLRQRI(6*UHODWHGZRUNLQFOXGLQJSODQQLQJDQG LPSOHPHQWLQJ(6*VWUDWHJLHVDQGJRDOVSUHSDULQJ(6*GLVFORVXUHPRQLWRULQJ WKH&RPSDQ\ІV(6*ZRUNSURJUHVVDQGUHSRUWLQJWRWKH6&7KH&RPSDQ\KDV LQFRUSRUDWHGNH\(6*ULVNVLQFOXGLQJFOLPDWHUHODWHGULVNVLQWRLWVFRPSUHKHQVLYH ULVNPDQDJHPHQWV\VWHPDQGGHOHJDWHGWKH(6*:RUNLQJ*URXSWRPRQLWRUDQG PDQDJHWKHVHULVNV ,QŀVFDO\HDUWKH66&RYHUVDZGLVFXVVLRQVZLWKLQWHUQDOEXVLQHVVWHDPV DVZHOODVUHOHYDQWH[WHUQDOVWDNHKROGHUVWRLGHQWLI\DQGDVVHVVWKHSULRULW\RI GLłHUHQW(6*WRSLFVWDNLQJLQWRFRQVLGHUDWLRQSRWHQWLDOEXVLQHVVDQGŀQDQFLDO LPSDFWVRIWKH(6*PDWWHUDVZHOODVWKHLQGXVWU\FKDUDFWHULVWLFVDQGEXVLQHVV PRGHOVRIWKH&RPSDQ\ VYDULRXVEXVLQHVVHV7KH66&IRUPXODWHGWKH&RPSDQ\ V (6*JRDOVIRUŀVFDO\HDUEDVHGRQWKHVHGLVFXVVLRQVDQGVXEPLWWHGWKHP WRWKH6&7KH6&KDVUHYLHZHGWKHSURJUHVVPDGHDJDLQVWWKH(6*JRDOVVHWIRU ŀVFDO\HDUDQGDSSURYHGWKHJRDOVIRUŀVFDO\HDU &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW

Open the original at slide 6 ↗

Slide 7 — ,QVWUXFWLRQV

,QVWUXFWLRQV 7KLVUHSRUWPDLQO\FRYHUVWKHHQYLURQPHQWDOVRFLDODQGJRYHUQDQFHKHUHLQDIWHUUHIHUUHGWRDV(6*SURJUHVVRIɹɽLEDED*URXS +ROGLQJ/LPLWHGDQGDOOLWVGLUHFWRULQGLUHFWVXEVLGLDULHVDQGDŃOLDWHGFRPSDQLHVIURP$SULOWR0DUFK)RUFRPSOHWHQHVV DQGFRQWLQXLW\ZHDOVRUHYLVLWHGDQGH[SDQGHGVRPHFRQWHQWIRUVSHFLŀFWRSLFV 7KHUHSRUWLVSUHSDUHGLQDFFRUGDQFHZLWKWKH(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUWLQJ&RGHIURPWKH+RQJ.RQJ6WRFN ([FKDQJH,WDOVRUHIHUVWRWKH8QLWHG1DWLRQV6XVWDLQDEOH'HYHORSPHQW*RDOV6'*VWKH*OREDO5HSRUWLQJ,QLWLDWLYH*5, 6WDQGDUGVWKHVWDQGDUGVLVVXHGE\WKH6XVWDLQDELOLW\$FFRXQWLQJ6WDQGDUGV%RDUG6$6%DQGWKH6XVWDLQDELOLW\'LVFORVXUH6WDQGDUGVRI WKH,QWHUQDWLRQDO)LQDQFLDO5HSRUWLQJ6WDQGDUGV,)566DQG6 7KLVUHSRUWDGKHUHVWRWKHSULQFLSOHVRIPDWHULDOLW\TXDQWLWDWLYHEDODQFHDQGFRQVLVWHQF\ Ȱ 0DWHULDOLW\:HFRQGXFWDPDWHULDOLW\DVVHVVPHQWWRLGHQWLI\DQGHYDOXDWH(6*LVVXHVWKDWDUHPDWHULDOWRRXUEXVLQHVVRXULQWHUQDO VWDNHKROGHUVDQGRXUH[WHUQDOVWDNHKROGHUV Ȱ 4XDQWLWDWLYH7KHPHDVXUHPHQWVWDQGDUGVPHWKRGRORJLHVDVVXPSWLRQVDQGRUFDOFXODWLRQWRROVDVZHOODVWKHVRXUFHVRIFRQYHUVLRQ IDFWRUVXVHGIRUWKHTXDQWLWDWLYHPHWULFVLQWKLVUHSRUWDUHGLVFORVHGLQWKHUHOHYDQWVHFWLRQVDVDSSOLFDEOH Ȱ %DODQFH7KLVUHSRUWDLPVWRSURYLGHDEDODQFHGSUHVHQWDWLRQRIRXUZRUNDFURVVDOODVSHFWVRI(6*LQFOXGLQJ(QYLURQPHQW6RFLDODQG *RYHUQDQFH Ȱ &RQVLVWHQF\7KHPHWKRGRORJ\XVHGWRSUHSDUHWKLVŀVFDO\HDU V(6*UHSRUWLVFRQVLVWHQWZLWKWKDWXVHGLQSUHYLRXVŀVFDO\HDUV$Q\ DGMXVWPHQWVWKDWFRXOGDłHFWWKHFRPSDUDELOLW\EHWZHHQWKLVŀVFDO\HDU VGDWDDQGKLVWRULFDOGDWDDUHGHWDLOHGLQWKHUHOHYDQWVHFWLRQV RIWKLVUHSRUW 8QOHVVRWKHUZLVHVSHFLŀHGDOOPRQHWDU\DPRXQWVSUHVHQWHGLQWKLVUHSRUWDUHGHQRPLQDWHGLQ5HQPLQEL50% 7KLVUHSRUWLVSUHVHQWHGLQHOHFWURQLFYHUVLRQVLQWKH(6*VHFWLRQRIWKH*URXSІVRŃFLDOZHEVLWHKWWSVZZZDɽLEDEDJURXSFRPHVJ$ VLPSOLŀHG&KLQHVHYHUVLRQDWUDGLWLRQDO&KLQHVHYHUVLRQDQGDQ(QJOLVKYHUVLRQDUHDYDLODEOH :HYDOXHDQ\IHHGEDFNDQGRSLQLRQVZKLFKFDQEHHPDLOHGWRXVDW(6*#DɽLEDEDLQFFRP &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW

Open the original at slide 7 ↗

Slide 8 — %XVLQHVV2YHUYLHZ

%XVLQHVV2YHUYLHZ 7KH&RPSDQ\ІVEXVLQHVVHVFRPSULVHɹɽLEDED&KLQD(FRPPHUFH*URXSɹɽLEDED,QWHUQDWLRQDO 'LJLWDO&RPPHUFH*URXS&ORXG,QWHOOLJHQFH*URXSDQGRWKHUEXVLQHVVHV$QHFRV\VWHPKDV GHYHORSHGDURXQGWKH&RPSDQ\ІVSODWIRUPVDQGEXVLQHVVHVWKDWFRQVLVWVRIFRQVXPHUV PHUFKDQWVEUDQGVUHWDLOHUVHQWHUSULVHVWKLUGSDUW\VHUYLFHSURYLGHUVVWUDWHJLFDOOLDQFH SDUWQHUVDQGRWKHUEXVLQHVVHV ɹɽLEDED&KLQD(FRPPHUFH*URXSLVFRPSULVHGRIL(FRPPHUFHEXVLQHVVLL4XLFN FRPPHUFHEXVLQHVVDQGLLL&KLQDFRPPHUFHZKROHVDOHEXVLQHVV(FRPPHUFHEXVLQHVV PDLQO\FRQVLVWVRI7DREDRDQG7PDOOWKH&RPSDQ\ІVGLJLWDOUHWDLOEXVLQHVVLQ&KLQD;LDQ\X DFRQVXPHUWRFRQVXPHUFRPPXQLW\DQGPDUNHWSODFHIRULGOHJRRGVLQ&KLQDDVZHOODV )OLJJ\DQRQOLQHWUDYHOSODWIRUPSURYLGLQJFRPSUHKHQVLYHVHUYLFHV4XLFNFRPPHUFHEXVLQHVV LQFOXGHV7DREDR,QVWDQW&RPPHUFHDORFDOVHUYLFHVDQGRQGHPDQGGHOLYHU\SODWIRUP LQ&KLQD&KLQDFRPPHUFHZKROHVDOHEXVLQHVVPDLQO\LQFOXGHVFRPDQLQWHJUDWHG GRPHVWLFZKROHVDOHPDUNHWSODFHLQ&KLQD ɹɽLEDED,QWHUQDWLRQDO'LJLWDO&RPPHUFH*URXSLVFRPSULVHGRIL,QWHUQDWLRQDOFRPPHUFH UHWDLOEXVLQHVVDQGLL,QWHUQDWLRQDOFRPPHUFHZKROHVDOHEXVLQHVV,QWHUQDWLRQDOFRPPHUFH UHWDLOEXVLQHVVPDLQO\LQFOXGHV$OL([SUHVVDJOREDOHFRPPHUFHSODWIRUP7UHQG\RODQ HFRPPHUFHSODWIRUPLQ7¾UNL\H/D]DGDDQHFRPPHUFHSODWIRUPLQ6RXWKHDVW$VLD DQG'DUD]DQHFRPPHUFHSODWIRUPDFURVV6RXWK$VLDZLWKNH\PDUNHWVLQ3DNLVWDQDQG %DQJODGHVK,QWHUQDWLRQDOFRPPHUFHZKROHVDOHEXVLQHVVPDLQO\LQFOXGHVɹɽLEDEDFRPDQ LQWHJUDWHGLQWHUQDWLRQDORQOLQHZKROHVDOHPDUNHWSODFH &ORXG,QWHOOLJHQFH*URXSRłHUVDFRPSUHKHQVLYHVXLWHRIFORXGVHUYLFHVEDVHGRQDWKUHH WLHUHGDUFKLWHFWXUHRILQIUDVWUXFWXUHDVDVHUYLFH,DD6SODWIRUPDVDVHUYLFH3DD6DQG PRGHODVDVHUYLFH0DD6WRFXVWRPHUVZRUOGZLGH 2WKHUEXVLQHVVHVLQFOXGH)UHVKLSSR&DLQLDRɹɽLEDED+HDOWK+XMLQJ'LJLWDO0HGLDDQG (QWHUWDLQPHQW*URXS$PDS4ZHQ&RQVXPHU%XVLQHVV*URXS/LQJ[L*DPHVDQG'LQJ7DON &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW

Open the original at slide 8 ↗

Slide 9 — ([HFXWLYH6XPPDU\

6LQFHWKHLQFHSWLRQRIɹɽLEDEDWRPDNHLWHDV\WRGREXVLQHVV DQ\ZKHUHKDVEHHQRXUPLVVLRQ$FKLHYLQJJURZWKE\WDFNOLQJ UHDOZRUOGFKDOOHQJHVLQEXVLQHVVDQGVRFLHW\LVDSKLORVRSK\ORQJ LQJUDLQHGLQɹɽLEDED V'1$2XUPLVVLRQVHUYHVDVWKHYHU\FRUHRI ERWKRXUEXVLQHVVDQG(6*VWUDWHJ\ 'ULYHQE\RXUPLVVLRQZHSULRULWL]H(6*LVVXHVFULWLFDOWRRXU VXVWDLQDEOHGHYHORSPHQW7KHVHLVVXHVDUHKLJKO\UHOHYDQWWRRXU EXVLQHVVDQGHVVHQWLDOIRUEXLOGLQJDQGVXVWDLQLQJVWDNHKROGHUWUXVW :HUHJXODUO\UHYLHZ(6*PDWHULDOLW\UHIHUWR$SSHQGL[IRUWKH )<PDWHULDOLW\DVVHVVPHQWUHVXOWVDQGHQJDJHVWDNHKROGHUVYLD PXOWLSOHFKDQQHOVWRXQGHUVWDQGWKHLUH[SHFWDWLRQVFRQFHUQVDQG QHHGVVRWKDWZHFDQFDOLEUDWHRXUGLUHFWLRQIRUZDUG :HSURSHOSURJUHVVRQWKHVHLVVXHVDORQJWKUHHSDWKZD\V LQWHJUDWLRQLQWREXVLQHVVWHFKQRORJLFDOLQQRYDWLRQDQGVWDNHKROGHU HFRV\VWHPFRRUGLQDWLRQ$VZHSXUVXHEXVLQHVVJURZWKZHGULYH SRVLWLYHFKDQJHDQGVKRXOGHUJUHDWHUUHVSRQVLELOLW\ 6RFLDO 6WDNHKROGHUV *RDOV 6'*V 3LOODUVRIRXU(6*VWU DWHJ\ *RYHUQDQFH 6WDQGDUGL]LQJFRUSRUDWH JRYHUQDQFH :HDFKLHYHDEDODQFHRILQWHUHVWVDPRQJDOOVWDNHKROGHUVWKURXJKLQVWLWXWLRQDOGHVLJQ 0DLQWDLQLQJEXVLQHVV LQWHJULW\ ,QWHJULW\LVWKHEHGURFNRIɹɽLEDED VGHYHORSPHQW,WLVWKHXQGHUSLQQLQJIRUUHWDLQLQJ HPSOR\HHVDQGSURYLGLQJJRRGVHUYLFHVIRUFRQVXPHUVDVZHOODVHQWHUSULVHFXVWRPHUV,WLV DOVRWKHRULJLQDODVSLUDWLRQHPERGLHGLQRXUFRPPLWPHQWWRVRFLDOUHVSRQVLELOLW\ %XLOGLQJGLJLWDO LQWHOOLJHQWSODW IRUPVIRU HQWHUSULVHFXVWRPHUV ɹɽLEDED VPLVVLRQLVWRPDNHLWHDV\WRGREXVLQHVVDQ\ZKHUH:HDUHVLJQLŀFDQWO\LQFUHDVLQJ RXULQYHVWPHQWVLQ$,LQIUDVWUXFWXUHDQG5 'ZKLOHDOVRGULYLQJ$,SRZHUHGXSJUDGHVDFURVV RXUH[LVWLQJEXVLQHVVVHJPHQWV:HŀUPO\EHOLHYHWKDWWKHDSSOLFDWLRQRI$,WHFKQRORJLHVZLOO HOHYDWHWKHSURGXFWLYLW\RIRXUHQWHUSULVHFXVWRPHUVWRDQHQWLUHO\QHZOHYHO 6XSSRUWLQJRXUSHRSOH :HFUHDWHDQHTXLWDEOHLQFOXVLYHKHDOWK\DQGVDIHZRUNSODFHIRURXUHPSOR\HHVHVWDEOLVK DFRPSUHKHQVLYHWDOHQWGHYHORSPHQWDQGWUDLQLQJV\VWHPDQGIRFXVRQWKHGHYHORSPHQWRI RXUHPSOR\HHVWRKHOSWKHPEHFRPHWKHLUEHWWHUVHOYHV (QYLURQPHQWDO 3URWHFWLQJWKH HQYLURQPHQW :HDUHFRPPLWWHGWRHPSRZHULQJHQYLURQPHQWDOSURWHFWLRQZLWKWHFKQRORJLHV7KURXJKWKH WKUHHDSSURDFKHVRIWHFKGULYHQHŃFLHQF\UHVRXUFHWUDQVLWLRQDQGVWDNHKROGHUHFRV\VWHP FRRUGLQDWLRQZHZRUNZLWKDOOVWDNHKROGHUVWRFRPEDWFOLPDWHFKDQJHDQGVDIHJXDUGWKH QDWXUDOHFRV\VWHP 3URYLGLQJUHVSRQVLEOH SURGXFWVIRUFRQVXPHUV :HDUHFRPPLWWHGWRDXVHUŀUVWDSSURDFKFRQVLVWHQWO\GHOLYHULQJKLJKTXDOLW\SURGXFWV DQGVHUYLFHVWRHDUQFRQVXPHUWUXVWDQGOR\DOW\$VZHDGYDQFHWKHYLVLRQRILQFOXVLYH FRQVXPSWLRQWKDWOHDYHVQRRQHEHKLQGZHFDUHDERXWWKHQHHGVRIGLYHUVHJURXSV LQFOXGLQJLQGLYLGXDOVZLWKGLVDELOLWLHVPLQRULW\JURXSVDQGVHQLRUFLWL]HQV *LYLQJEDFNWRVRFLHW\ DQGFRPPXQLWLHV $GGUHVVLQJVRFLDOFKDOOHQJHVLVQRWDEXUGHQIRUHQWHUSULVHV,QVWHDGLWLVDFDWDO\VWIRU JURZWKDQGLQQRYDWLRQ:HDGYRFDWHIRUHYHU\RQHWRJHWLQYROYHGWDNHDFWLRQVWRPDNHD GLłHUHQFHDQGEHSDUWRIDMRLQWHłRUWWREXLOGDPRUHFRPSDVVLRQDWHVRFLHW\ (QWHUSULVHFXVWRPHUV (QYLURQPHQW (PSOR\HHV &RQVXPHUV 6RFLHW\DQGFRPPXQLWLHV $OOVWDNHKROGHUV ([HFXWLYH6XPPDU\ &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW

Open the original at slide 9 ↗

Slide 10 —

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łHFWLYHQHVV38(DFURVVRXUVHOIEXLOW GDWDFHQWHUVGURSSHGWR 6XSSRUWLQJ2XU3HRSOH &KDSWHU )RUEHVOLVWRI WKH:RUOG V%HVW (PSOR\HUV ɹɽLEDEDZDVQDPHGRQWKH)RUEHV OLVWRIWKH:RUOG V%HVW(PSOR\HUV PDLQWDLQLQJDWRSŀYHSRVLWLRQ DPRQJDOO&KLQHVHFRPSDQLHVRQLW :RPHQDFFRXQWHGIRURI RXUZRUNIRUFH $,3URGXFWLYLW\ 3ODQ 7KH$,3URGXFWLYLW\3ODQSURYLGHV DOOHPSOR\HHVZLWKIUHHDFFHVVWR $,WRROV 2YHU 2YHUHPSOR\HHVWRRNIDPLO\ FDUHOHDYHWRVSHQGTXDOLW\WLPH ZLWKWKHLUORYHGRQHV 7KHVDWLVIDFWLRQUDWHIRURXURŃFH HQYLURQPHQWLQFUHDVHGWR (6*SHUIRUPDQFH &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW

Open the original at slide 10 ↗

Slide 11 —

3URYLGLQJ5HVSRQVLEOH3URGXFWVIRU&RQVXPHUV &KDSWHU 7KHFRQVXPHUFRPSODLQWUDWHRQ7DREDRDQG7PDOOZDV 2YHUPLOOLRQ 7KHQXPEHURIŀ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ɹɽLEDEDKDVRSHQVRXUFHGRYHU4ZHQPRGHOVWRXVHUV ZRUOGZLGH 0LFURVPDOODQGPHGLXPVL]HGHQWHUSULVHV060(V DFFRXQWHGIRURIDFWLYHPHUFKDQWVRQ7DREDRDQG 7PDOO 6$,/6WDU$ZDUG 0DUFRRXU$,VROXWLRQIRUPHUFKDQWVZRQWKH6$,/6WDU $ZDUGDWWKH:RUOG$UWLŀFLDO,QWHOOLJHQFH&RQIHUHQFH (6*SHUIRUPDQFH 6RFLDO &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW

Open the original at slide 11 ↗

Slide 12 — *LYLQJ%DFNWR6RFLHW\DQG&RPPXQLWLHV

*LYLQJ%DFNWR6RFLHW\DQG&RPPXQLWLHV &KDSWHU 7RLQWURGXFHWDOHQWLQWRWKHFRXQWU\VLGHZHKDYHGHSOR\HG DFXPXODWLYHWRWDORIUXUDOUHYLWDOL]DWLRQFRPPLVVLRQHUV 7KH&ORXGIRU<RXWK3URJUDPKDVEXLOWDQGGRQDWHGDFXPXODWLYH WRWDORIFORXGFRPSXWHUFODVVURRPVHTXLSSLQJWHDFKHUVDQG VWXGHQWVZLWKRYHUSHUVRQDOFORXGFRPSXWHUDFFRXQWV ,QQRYDWHIRU ,PSDFW8VH&DVH 2XUQRQFRQWUDVW&7$,VROXWLRQIRUPXOWLFDQFHUHDUO\ VFUHHQLQJZDVUHFRJQL]HGDVDQ,QQRYDWHIRU,PSDFW8VH&DVH DWWKH8QLWHG1DWLRQV$,IRU*RRG6XPPLW 2YHU $FXPXODWLYHWRWDORIRYHULQGLYLGXDOVKDYHFRPSOHWHGWKH$, $SSOLFDWLRQ(QJLQHHU&HUWLŀFDWLRQ3URJUDPODXQFKHGE\'LQJ7DONDQG DFKLHYHGWKHFHUWLŀFDWLRQ KRXUV 2XUHPSOR\HHVFORFNHGKRXUVRIYROXQWHHUVHUYLFH 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ &KDSWHU +LJKHVWVFRUHV ɹɽLEDED&ORXGDFKLHYHGWKHKLJKHVWVFRUHVDFURVV DOOVHYHQGLPHQVLRQVLQ,'& VVHFXULW\FDSDELOLW\ DVVHVVPHQWIRU&KLQD VSXEOLFFORXGVHUYLFH SURYLGHUV ,QWHJULW\WUDLQLQJFRYHUHGRI%RDUGPHPEHUV 2XUHPSOR\HHVDFKLHYHGDSDVVUDWHIRU WKHɹɽLEDED*URXS&RGHRI%XVLQHVV&RQGXFW H[DPLQDWLRQ )LUVWWRDFKLHYHFRPSOLDQFH FHUWLŀFDWLRQXQGHUQDWLRQDOVWDQGDUG 4ZHQODUJHPRGHOVZHUHDPRQJWKHŀUVWWRDFKLHYH HQKDQFHGOHYHOFRPSOLDQFHFHUWLŀFDWLRQXQGHU &KLQD VQDWLRQDOVWDQGDUGIRUJHQHUDWLYH$,VDIHW\ $URXQG $URXQGVXSSOLHUVKDYHVLJQHGDQ+RQHVW\ DQG,QWHJULW\$JUHHPHQW (6*SHUIRUPDQFH 6RFLDO &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW

Open the original at slide 12 ↗

Slide 13 — (6*,PSDFW/LVW

(6*,PSDFW/LVW )RUWXQH&KLQD V %%% 06&,(6*UDWLQJ % &DUERQ'LVFORVXUH3URMHFW&'3 FOLPDWHFKDQJHVFRUH &ROOHFWLRQRI ,QQRYDWLYH&DVHV &KDQJHWKH :RUOGOLVW )RUWXQH V VHFXULQJDVSRWRQWKHOLVWIRU FRQVHFXWLYH\HDUV 7RS0RVW ,QŁXHQWLDO$, &RPSDQLHV 7,0( V RI IRU5XUDO5HYLWDOL]DWLRQ 'LJLWDO9LOODJHV +6,(6*,QGH[ ,QFOXGHGLQ 1DWLRQDO $GYDQFHG6RFLDO 2UJDQL]DWLRQ ɹɽLEDED)RXQGDWLRQKRQRUHGDV (6*DZDUGVDQGUDWLQJV ɹɽLEDED)RXQGDWLRQIHDWXUHGLQ &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW

Open the original at slide 13 ↗

Slide 14 — *RYHUQDQFH

6WDQGDUGL]LQJ&RUSRUDWH *RYHUQDQFH *RYHUQDQFH $WɹɽLEDEDZHDUHFRPPLWWHGWREXLOGLQJDUREXVWFRUSRUDWH JRYHUQDQFHV\VWHPDVDVROLGIRXQGDWLRQIRURXUGHYHORSPHQW 8QGHUSLQQHGE\WUDQVSDUHQWGHFLVLRQPDNLQJDQGULJRURXV ULVNPDQDJHPHQWWKLVV\VWHPHPSRZHUVXVWRPDLQWDLQ RUJDQL]DWLRQDOUHVLOLHQFHDQGVWUDWHJLFUHVROYHDPLGDUDSLGO\ HYROYLQJGLJLWDOODQGVFDSHXOWLPDWHO\GULYLQJVXVWDLQDEOHJURZWK 7KLVFKDSWHU %RDUGJRYHUQDQFH (6*JRYHUQDQFH 5LVNPDQDJHPHQW ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV *RYHUQDQFH

Open the original at slide 14 ↗

Slide 15 —

6WDQGDUGL]LQJ &RUSRUDWH *RYHUQDQFH (6*JRYHUQDQFH 5LVNPDQDJHPHQW %RDUGJRYHUQDQFH 1RQH[HFXWLYHGLUHFWRUVDFFRXQWHGIRURI %RDUGPHPEHUV RIQRQH[HFXWLYHGLUHFWRUVSDUWLFLSDWHGLQ ULVNPDQDJHPHQWWUDLQLQJ RI%RDUGPHPEHUVUHFHLYHG(6*WUDLQLQJ 2YHU :HFRPSOHWHGRYHUHPHUJHQF\GULOOVDQG WKHRYHUDOOUHVXOWVPHWRXUH[SHFWDWLRQV )HPDOHUHSUHVHQWDWLRQRQWKH%RDUGKDV UHPDLQHGDWIRUIRXUFRQVHFXWLYH\HDUV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV *RYHUQDQFH

Open the original at slide 15 ↗

Slide 16 — 6WUDWHJLHVDQGDSSURDFKHV

:HKDYHHVWDEOLVKHGDV\VWHPDWLF(6*JRYHUQDQFH IUDPHZRUNDQGULVNPDQDJHPHQWPHFKDQLVPWR XQGHUSLQWKHVWDEOHDQGVXVWDLQDEOHJURZWKRIRXU EXVLQHVV ,PSURYLQJ(6*DQGULVNPDQDJHPHQW 6WUDWHJLHVDQGDSSURDFKHV 2XUEXVLQHVVLVEXLOWXSRQSXEOLFWUXVW:HEHOLHYHWKDWWUDQVSDUHQWDQG SURIHVVLRQDOJRYHUQDQFHLVHVVHQWLDOWREXLOGLQJDQGVXVWDLQLQJVWDNHKROGHU FRQŀGHQFH7KLVEHOLHIGULYHVWKHFRQWLQXRXVUHŀQHPHQWRIRXUFRUSRUDWH JRYHUQDQFHV\VWHP :HDUHFRPPLWWHGWRDSURIHVVLRQDODQGGLYHUVH%RDUG FRPSRVLWLRQPDLQWDLQLQJDQDSSURSULDWHSURSRUWLRQRI LQGHSHQGHQWGLUHFWRUV7KH%RDUGRI'LUHFWRUVKDVVHW XSWKH$XGLW&RPPLWWHHWKH&RPSHQVDWLRQ&RPPLWWHH WKH1RPLQDWLQJDQG&RUSRUDWH*RYHUQDQFH&RPPLWWHH WKH6XVWDLQDELOLW\&RPPLWWHHWKH&RPSOLDQFHDQG5LVN &RPPLWWHHDQGWKH&DSLWDO0DQDJHPHQW&RPPLWWHH WRHQVXUHHłHFWLYHVWUDWHJLFRYHUVLJKWDQGULJRURXVULVN PDQDJHPHQW 6WUHQJWKHQLQJWKHJRYHUQDQFHVWUXFWXUH :HUHJXODUO\SXEOLVKWKLUGSDUW\DXGLWHGŀQDQFLDO DQG(6*UHSRUWVZKLFKGHWDLORXUNH\SHUIRUPDQFH LQGLFDWRUVDQGSURJUHVVDJDLQVWWKHP7KHVHFRQVLVWHQW GLVFORVXUHVVWUHQJWKHQRXUFRUSRUDWHFUHGLELOLW\ 5DLVLQJWUDQVSDUHQF\ &RUSRUDWH JRYHUQDQFH V\VWHP ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV *RYHUQDQFH

Open the original at slide 16 ↗

Slide 17 — %RDUGJRYHUQDQFH

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ŀOOVLWVUHVSRQVLELOLWLHV IRUVWUDWHJLFJXLGDQFHDQGRYHUVLJKW:H FRQVLVWHQWO\UHŀQH%RDUGJRYHUQDQFH DFURVVIRXUGLPHQVLRQVFRPPLWWHHVHWXS LQGHSHQGHQFHRSHUDWLRQDOHł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ɹɽLEDEDІV&RUSRUDWH*RYHUQDQFH *XLGHOLQHVDQGWKHFRPPLWWHHFKDUWHUVWKH%RDUGRI'LUHFWRUVDQGLWVFRPPLWWHHVPD\ LQGHSHQGHQWO\VHHNDGYLFHIURPH[WHUQDOFRQVXOWDQWVLQŀHOGVVXFKDVOHJDODłDLUVDQG ŀQDQFHDQGLQGHSHQGHQWGLUHFWRUVPD\KROGPHHWLQJVLQWKHDEVHQFHRIWKHPDQDJHPHQW ,QGHSHQGHQFH 3XUVXDQWWRWKH&KDUWHURIWKH1RPLQDWLQJDQG&RUSRUDWH*RYHUQDQFH&RPPLWWHHRXUGLUHFWRU QRPLQDWLRQSURFHVVHYDOXDWHVFDQGLGDWHVDFURVVYDULRXVIDFWRUVVXFKDVDJHJHQGHUFXOWXUDO EDFNJURXQGDQGSURIHVVLRQDOH[SHUWLVH7KH%RDUGRI'LUHFWRUVUHSUHVHQWVDEURDGUDQJHRI SURIHVVLRQDOFUHGHQWLDOVDQGLQGXVWU\H[SHULHQFHVVSDQQLQJŀHOGVVXFKDVUHWDLOFRPSXWHU VFLHQFHHOHFWURQLFHQJLQHHULQJHFRQRPLFVŀQDQFHODZEXVLQHVVDGPLQLVWUDWLRQDQGUHDO HVWDWH$VRI0DUFKIHPDOHUHSUHVHQWDWLRQRQWKH%RDUGRI'LUHFWRUVKDGUHPDLQHG DWIRUIRXUFRQVHFXWLYH\HDUV 'LYHUVLW\ $XGLW &RPPLWWHH &RPSHQVDWLRQ &RPPLWWHH 1RPLQDWLQJ DQG&RUSRUDWH *RYHUQDQFH &RPPLWWHH 6XVWDLQDELOLW\ &RPPLWWHH &RPSOLDQFH DQG5LVN &RPPLWWHH &DSLWDO 0DQDJHPHQW &RPPLWWHH :HFRQWLQXRXVO\PRQLWRUWKH%RDUG VWHQXUHSURŀOHWREDODQFHVWUDWHJLFFRQWLQXLW\ZLWKIUHVK JRYHUQDQFHSHUVSHFWLYHV$VRI0DUFKWKHDYHUDJHWHQXUHRIRXU%RDUGPHPEHUV ZDVDERXW\HDUV7KH%RDUGRI'LUHFWRUVDQGLWVFRPPLWWHHVFRQGXFWVHOIHYDOXDWLRQV DWOHDVWRQFHD\HDUDFURVVPXOWLSOHGLPHQVLRQVLQFOXGLQJEXWQRWOLPLWHGWRWKHVNLOOVDQG EDFNJURXQGVRIWKHLUPHPEHUVWKHDGHTXDF\DQGHłHFWLYHQHVVRIWKHLUPHHWLQJVDQG GLUHFWRUDWWHQGDQFHDQGHQJDJHPHQWDWWKHVHPHHWLQJV,Q)<WKHGLUHFWRUDWWHQGDQFH UDWHDWIXOO%RDUGPHHWLQJVZDV7RHQVXUHWKDW%RDUGPHPEHUVPDLQWDLQDQDGHTXDWH XQGHUVWDQGLQJRIWKHLUVWDWXWRU\REOLJDWLRQVDQGɹɽLEDED VEXVLQHVVRSHUDWLRQVWKH PDQDJHPHQWUHJXODUO\EULHIVWKHPRQEXVLQHVVG\QDPLFVLQGXVWU\WUHQGVDQGUHJXODWRU\ GHYHORSPHQWV7KLVLVFRPSOHPHQWHGE\WKHPDWLFWUDLQLQJVHVVLRQV 2SHUDWLRQDOHłHFWLYHQHVV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV *RYHUQDQFH

Open the original at slide 17 ↗

Slide 18 — 7KLVFRPPLWWHHLVFKDLUHGE\DQLQGHSHQGHQWGLUHFWRUDQGτ

6WDQGDUGL]LQJ&RUSRUDWH*RYHUQDQFH %RDUGJRYHUQDQFH 2YHUYLHZRI%RDUGFRPPLWWHHV 2XU&RPSHQVDWLRQ&RPPLWWHHLVUHVSRQVLEOHIRUDPRQJRWKHUWKLQJV Ȱ 'HWHUPLQLQJWKHSURSRUWLRQRIDQQXDOFDVKERQXVSRRODOORFDWHGDQG SD\DEOHWRRXUPDQDJHPHQWIRUWKH\HDUDQGGHWHUPLQLQJWKHDPRXQWRI FDVKERQXVSD\DEOHWRRXUH[HFXWLYHRŃFHUVDQGGLUHFWRUV Ȱ 5HYLHZLQJHYDOXDWLQJDQGLIQHFHVVDU\UHYLVLQJRXURYHUDOOFRPSHQVDWLRQ SROLFLHV Ȱ 5HYLHZLQJDQGHYDOXDWLQJWKHSHUIRUPDQFHRIRXUGLUHFWRUVDQGH[HFXWLYH RŃFHUVDQGGHWHUPLQLQJWKHFRPSHQVDWLRQRIRXUGLUHFWRUVDQGH[HFXWLYH RŃFHUV Ȱ 5HYLHZLQJDQGDSSURYLQJRXUH[HFXWLYHRŃFHUVІHPSOR\PHQWDJUHHPHQWV ZLWKXV Ȱ 'HWHUPLQLQJSHUIRUPDQFHWDUJHWVIRURXUH[HFXWLYHRŃFHUVZLWKUHVSHFW WRRXUQRQHTXLW\LQFHQWLYHFRPSHQVDWLRQSODQVDQGVKDUHEDVHG FRPSHQVDWLRQSODQV Ȱ $GPLQLVWHULQJRXUVKDUHEDVHGFRPSHQVDWLRQSODQVLQDFFRUGDQFHZLWKWKH WHUPVWKHUHRILQFOXGLQJWKHPDWWHUVUHTXLUHGXQGHU&KDSWHURIWKH+RQJ .RQJ/LVWLQJ5XOHVDQG Ȱ &DUU\LQJRXWRWKHUPDWWHUVWKDWDUHVSHFLŀFDOO\GHOHJDWHGWRWKH &RPSHQVDWLRQ&RPPLWWHHE\RXUERDUGRIGLUHFWRUVIURPWLPHWRWLPH &RPSHQVDWLRQ&RPPLW WHH 7KLVFRPPLWWHHLVFKDLUHGE\DQLQGHSHQGHQWGLUHFWRUDQGτ RILWVPHPEHUVDUHDOVRLQGHSHQGHQWGLUHFWRUV 7KH$XGLW&RPPLWWHHRYHUVHHVRXUDFFRXQWLQJDQGŀQDQFLDOUHSRUWLQJSURFHVVHV DQGWKHDXGLWVRIRXUŀQDQFLDOVWDWHPHQWV2XU$XGLW&RPPLWWHHLVUHVSRQVLEOHIRU DPRQJRWKHUWKLQJV Ȱ 6HOHFWLQJDQGHYDOXDWLQJWKHTXDOLŀFDWLRQVSHUIRUPDQFHDQGLQGHSHQGHQFHRI WKHLQGHSHQGHQWDXGLWRU Ȱ 3UHDSSURYLQJRUDVSHUPLWWHGDSSURYLQJDXGLWLQJDQGQRQDXGLWLQJVHUYLFHV SHUPLWWHGWREHSHUIRUPHGE\WKHLQGHSHQGHQWDXGLWRU Ȱ $VVHVVLQJWKHDGHTXDF\RIRXULQWHUQDODFFRXQWLQJFRQWUROVDQGDXGLWSURFHGXUHV Ȱ 5HYLHZLQJZLWKWKHLQGHSHQGHQWDXGLWRUDQ\DXGLWSUREOHPVRUGLŃFXOWLHVDQG PDQDJHPHQWІVUHVSRQVH Ȱ 5HYLHZLQJDQGDSSURYLQJUHODWHGSDUW\WUDQVDFWLRQVDVGHŀQHGLQ)RUP) DQGFRQQHFWHGWUDQVDFWLRQVDVUHTXLUHGXQGHUWKH+RQJ.RQJ/LVWLQJ5XOHV Ȱ 5HYLHZLQJDQGGLVFXVVLQJWKHTXDUWHUO\UHSRUWVKDOI\HDUUHSRUWVDQGDQQXDO UHSRUWVZLWKPDQDJHPHQWDQGWKHLQGHSHQGHQWDXGLWRU Ȱ (VWDEOLVKLQJSURFHGXUHVIRUWKHUHFHLSWUHWHQWLRQDQGWUHDWPHQWRIFRPSODLQWV UHFHLYHGIURPRXUHPSOR\HHVUHJDUGLQJDFFRXQWLQJLQWHUQDODFFRXQWLQJ FRQWUROVRUDXGLWLQJPDWWHUVDQGWKHFRQŀGHQWLDODQRQ\PRXVVXEPLVVLRQE\RXU HPSOR\HHVRIFRQFHUQVUHJDUGLQJTXHVWLRQDEOHDFFRXQWLQJRUDXGLWLQJPDWWHUV Ȱ 0HHWLQJVHSDUDWHO\SHULRGLFDOO\ZLWKPDQDJHPHQWLQWHUQDODXGLWRUVDQGWKH LQGHSHQGHQWDXGLWRUDQG Ȱ 5HSRUWLQJUHJXODUO\WRWKHIXOOERDUGRIGLUHFWRUV $XGLW&RPPLW WHH 7KLVFRPPLWWHHLVFKDLUHGE\DQLQGHSHQGHQWGLUHFWRUDQGτ RILWVPHPEHUVDUHLQGHSHQGHQWGLUHFWRUVZLWKDŀQDQFLDOEDFNJURXQG 2XU1RPLQDWLQJDQG&RUSRUDWH*RYHUQDQFH&RPPLWWHHLVUHVSRQVLEOH IRUDPRQJRWKHUWKLQJV Ȱ 6HOHFWLQJWKHERDUGQRPLQHHVRWKHUWKDQWKHGLUHFWRUQRPLQHHV WREHQRPLQDWHGE\WKHɹɽLEDED3DUWQHUVKLSIRUHOHFWLRQE\WKH VKDUHKROGHUVRUDSSRLQWPHQWE\WKHERDUG Ȱ 3HULRGLFDOO\UHYLHZLQJZLWKWKHERDUGWKHFXUUHQWFRPSRVLWLRQRI WKHERDUGZLWKUHJDUGVWRFKDUDFWHULVWLFVVXFKDVLQGHSHQGHQFH NQRZOHGJHVNLOOVH[SHULHQFHDQGGLYHUVLW\DQGDVVLVWLQJWKHERDUG LQPDLQWDLQLQJDERDUGVNLOOPDWUL[ Ȱ 0DNLQJUHFRPPHQGDWLRQVRQWKHIUHTXHQF\DQGVWUXFWXUHRIERDUG PHHWLQJVDQGPRQLWRULQJWKHIXQFWLRQLQJRIWKHFRPPLWWHHVRIWKH ERDUG Ȱ $GYLVLQJWKHERDUGSHULRGLFDOO\ZLWKUHJDUGVWRVLJQLŀFDQW GHYHORSPHQWVLQFRUSRUDWHJRYHUQDQFHODZDQGSUDFWLFHVDQG PDNLQJUHFRPPHQGDWLRQVWRWKHERDUGRQFRUSRUDWHJRYHUQDQFH PDWWHUVDQG Ȱ 2YHUVHHLQJWKHHYDOXDWLRQRIWKHERDUG VSHUIRUPDQFHDQGDVVHVVLQJ HDFKGLUHFWRU VWLPHFRPPLWPHQWDQGFRQWULEXWLRQWRWKHERDUGDQG WKHDELOLW\RIWKHGLUHFWRUWRGLVFKDUJHKLVRUKHUUHVSRQVLELOLWLHV HłHFWLYHO\ 1RPLQDWLQJDQG&RUSRUDWH*RYHUQDQFH&RPPLWWHH 2XU&RPSOLDQFHDQG5LVN&RPPLWWHHLVUHVSRQVLEOHIRUDPRQJRWKHUWKLQJV Ȱ 2YHUVHHLQJRXURYHUDOOFRPSOLDQFHDQGULVNPDQDJHPHQWUHTXLUHPHQWVDQG RYHUDOOFRPSOLDQFHDQGULVNPDQDJHPHQWIUDPHZRUN Ȱ (YDOXDWLQJNH\ULVNH[SRVXUHVDQGYXOQHUDELOLWLHVDQGRYHUVHHWKH LPSOHPHQWDWLRQRIFRPSOLDQFHDQGULVNSROLFLHVDQGSURFHGXUHVDQG Ȱ $VVHVVLQJWKHSHUIRUPDQFHRIPHPEHUVRIPDQDJHPHQWUHVSRQVLEOHIRU FRPSOLDQFHDQGULVNPDQDJHPHQWDQGDGYLVHRXU&RPSHQVDWLRQ&RPPLWWHH WRDOLJQWKHFRPSHQVDWLRQRIWKHFKLHIH[HFXWLYHRŃFHUVRIRXUVXEVLGLDU\ EXVLQHVVHVZLWKSHUIRUPDQFHRQFRPSOLDQFHDQGULVNPDQDJHPHQW &RPSOLDQFHDQG5LVN0DQDJHPHQW&RPPLW WHH 7KLVFRPPLWWHHLVFKDLUHGE\DQLQGHSHQGHQWGLUHFWRUDQGτ RILWVPHPEHUVDUHLQGHSHQGHQWGLUHFWRUV 6XVWDLQDELOLW\&RPPLW WHH 2XU6XVWDLQDELOLW\&RPPLWWHHLVUHVSRQVLEOHIRUDPRQJRWKHUWKLQJV Ȱ $VVLVWLQJWKHERDUGLQLGHQWLI\LQJDQGHYDOXDWLQJWKHFRPSDQ\ІV(6*RSSRUWXQLWLHV DQGULVNVLQFOXGLQJFOLPDWHUHODWHGRSSRUWXQLWLHVDQGULVNV Ȱ 2YHUVHHLQJDQGHYDOXDWLQJWKHLPSOHPHQWDWLRQDQGSHUIRUPDQFHRI(6*LQLWLDWLYHV DQGSURMHFWVDQG Ȱ $GYLVLQJWKHERDUGRQ(6*UHODWHGOHJDOUHJXODWRU\DQGFRPSOLDQFH GHYHORSPHQWVDQGSXEOLFSROLF\WUHQGV 7KLVFRPPLWWHHLVFKDLUHGE\DQLQGHSHQGHQWGLUHFWRUDQGτ RILWVPHPEHUVDUHLQGHSHQGHQWGLUHFWRUV 2XU&DSLWDO0DQDJHPHQW&RPPLWWHHLVUHVSRQVLEOHIRUDPRQJRWKHU WKLQJV Ȱ (VWDEOLVKLQJDQGRYHUVHHLQJWKHLPSOHPHQWDWLRQRIRXURYHUDOO FDSLWDOPDQDJHPHQWDQGDOORFDWLRQSODQDQG Ȱ 5HYLHZLQJDQGDGYLVLQJRXUERDUGRUDSSURYLQJEDVHGRQ DXWKRUL]DWLRQE\RXUERDUGVLJQLŀFDQWFDSLWDOUHODWHGWUDQVDFWLRQV DQGXQGHUWDNLQJVE\XVDQGRXUVXEVLGLDU\EXVLQHVVHV &DSLWDO0DQDJHPHQW&RPPLW WHH 7KLVFRPPLWWHHLVFKDLUHGE\WKH&KDLUPDQRIWKH%RDUGRI'LUHFWRUV 7KLVFRPPLWWHHLVFKDLUHGE\DQLQGHSHQGHQWGLUHFWRUDQGτ RILWVPHPEHUVDUHDOVRLQGHSHQGHQWGLUHFWRUV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV *RYHUQDQFH

Open the original at slide 18 ↗

Slide 19 — 5LVNPDQDJHPHQW

5LVNPDQDJHPHQW 6WDQGDUGL]LQJ&RUSRUDWH*RYHUQDQFH 5LVNPDQDJHPHQW 5LVNPDQDJHPHQWVWUXFWXUH 2XUULVNPDQDJHPHQWVWUXFWXUHUHPDLQVDQLQWHUOLQNHG WKUHHWLHUV\VWHPFRPSULVLQJWKH%RDUGRI'LUHFWRUVWKH5LVN 0DQDJHPHQW&RPPLWWHHDQGWKH5LVN0DQDJHPHQW:RUNLQJ *URXS ɹɽLEDED VULVNPDQDJHPHQWVWUXFWXUH $QDGHTXDWHDQGHłHFWLYHV\VWHPIRUULVN PDQDJHPHQWDQGLQWHUQDOFRQWUROLVFULWLFDO WRDGYDQFLQJRXUVWUDWHJLFJRDOV,Q)< ZHUHYLVHGWKHɹɽLEDED*URXS&RPSUHKHQVLYH 5LVN0DQDJHPHQW)UDPHZRUNDFFRUGLQJWR RXUHYROYLQJEXVLQHVVQHHGV7KLVUHYLVLRQ FODULŀ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ɹɽLEDED 5LVN0DQDJHPHQW&RPPLW WHH 7KLVFRPPLWWHHLVWDVNHGZLWKGHVLJQLQJDFRPSUHKHQVLYHULVNPDQDJHPHQWV\VWHP ,WVSULPDU\UHVSRQVLELOLWLHVLQFOXGHLGHQWLI\LQJPDWHULDOULVNVWRWKH*URXSDQG IRUPXODWLQJULVNJRYHUQDQFHVWUDWHJLHVDFFRUGLQJO\UHŀQLQJWKHULVNPDQDJHPHQW V\VWHPDQGHVWDEOLVKLQJRYHUVLJKWDQGHYDOXDWLRQPHFKDQLVPV(DFKTXDUWHULW UHSRUWVWRWKH&RPSOLDQFHDQG5LVN&RPPLWWHHRQWKHGHVLJQLPSOHPHQWDWLRQDQG PRQLWRULQJRIWKHULVNPDQDJHPHQWDQGLQWHUQDOFRQWUROV\VWHP 5LVN0DQDJHPHQW: RUNLQJ*URXS 7KLVZRUNLQJJURXSFRPSULVHVWKHKHDGVRIFRPSUHKHQVLYHULVNPDQDJHPHQWIURP RXUEXVLQHVVHVDQGWKHKHDGVRIIXQFWLRQDOGHSDUWPHQWV,WLVWDVNHGZLWKH[HFXWLQJ VSHFLŀFLQLWLDWLYHVIRUULVNPDQDJHPHQW ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV *RYHUQDQFH

Open the original at slide 19 ↗

Slide 20 — 5LVNPDQDJHPHQWSURFHVV

5LVNPDQDJHPHQW 6WDQGDUGL]LQJ&RUSRUDWH*RYHUQDQFH 5LVNPDQDJHPHQWSURFHVV 2XUULVNPDQDJHPHQWSURFHVVLVVWUXFWXUHGDURXQGIRXUSKDVHVPRQLWRULQJDQG LGHQWLŀFDWLRQDVVHVVPHQWDQGJRYHUQDQFHUHSRUWLQJDQGGHFLVLRQPDNLQJ DQGJRYHUQDQFHYDOLGDWLRQDQGUHYLHZ,Q)<ZHUHOHDVHGWKHɹɽLEDED *URXS0DWHULDO5LVN0DQDJHPHQW6SHFLŀFDWLRQVWRIXUWKHUFODULI\UHTXLUHPHQWVIRU PDQDJLQJPDWHULDOULVNVDFURVVWKHVHSKDVHV /HYHUDJLQJɹɽLEDED*URXS V FDWHJRU\WUHHIRUULVNPDQDJHPHQW UHIHUUHGWRDVWKHULVNOLVWZH KDYHHVWDEOLVKHGPRQLWRULQJ FKDQQHOVDQGVHOILQVSHFWLRQ PHFKDQLVPVWRFRQWLQXRXVO\ FROOHFWDQGDQDO\]HGDWDIRU WKHLGHQWLŀFDWLRQRIULVNVDQG DQRPDOLHV5LVNVDUHUDWHGEDVHG RQWKHLULPSDFWDQGOLNHOLKRRG7KH ULVNOLVWLVG\QDPLFDOO\XSGDWHG DFFRUGLQJWRWKHLGHQWLŀFDWLRQ UHVXOWV %DVHGRQEXVLQHVVG\QDPLFVDQG ULVNDVVHVVPHQWŀQGLQJVZHKDYH GHYHORSHGDWLHUHGPDQDJHPHQW PHFKDQLVPDQGFRUUHVSRQGLQJ JRYHUQDQFHSODQV)RUPDWHULDO ULVNVZHPDQGDWHWKHHVWDEOLVKPHQW RIJRYHUQDQFHWDVNIRUFHV )XUWKHUPRUHZHV\VWHPDWLFDOO\ UHYLHZKLVWRULFDOULVNLQFLGHQWVWR LGHQWLI\XQGHUO\LQJULVNIDFWRUVDQG LPSOHPHQWWDUJHWHGUHPHGLHV :HKDYHHVWDEOLVKHGDULVN FRPPXQLFDWLRQDQGUHSRUWLQJ PHFKDQLVPWRHQVXUHWKH WLPHOLQHVVDFFXUDF\DQG FRPSOHWHQHVVRILQIRUPDWLRQŁRZV )RUPDWHULDOULVNVZHUHJXODUO\ UHSRUWWKHLUVWDWXVDQGUHPHGLDWLRQ SURJUHVVWRWKH%RDUG V&RPSOLDQFH DQG5LVN&RPPLWWHHDQGWKH5LVN 0DQDJHPHQW&RPPLWWHH :HFODULI\UHVSRQVLEOHSDUWLHVZRUN VFRSHVSURFHVVHVDQGVWDQGDUGVWR HQVXUHWKHHłHFWLYHLPSOHPHQWDWLRQ RIJRYHUQDQFHPHDVXUHV)RU PDWHULDOULVNVZHIROORZGHGLFDWHG YDOLGDWLRQDQGUHYLHZSURFHVVHVWR DFKLHYHFORVHGORRSPDQDJHPHQW 0RQLWRULQJDQG LGHQWLŀFDWLRQ $VVHVVPHQWDQG JRYHUQDQFH 5HSRUWLQJDQG GHFLVLRQPDNLQJ *RYHUQDQFH YDOLGDWLRQDQG UHYLHZ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV *RYHUQDQFH

Open the original at slide 20 ↗

Slide 21 — 2YHU

5LVNPDQDJHPHQW 6WDQGDUGL]LQJ&RUSRUDWH*RYHUQDQFH (PHUJHQF\PDQDJHPHQWSURFHVV &XOWXUHDQGWUDLQLQJIRUULVN PDQDJHPHQW 2YHUVLJKWHYDOXDWLRQDQGLQVSHFWLRQ :HKDYHXSGDWHGWKHɹɽLEDED*URXS6SHFLŀFDWLRQVIRU+DQGOLQJ(68,QFLGHQWVWRDOLJQ LWZLWKRXUEXVLQHVVRSHUDWLRQV7RVWUHDPOLQHHPHUJHQF\UHVSRQVHZHKDYHVHWXS HPHUJHQF\PDQDJHPHQWWHDPVGHVLJQDWHGHPHUJHQF\PDQDJHPHQWRŃFHUVEDVHG RQLQFLGHQWW\SHVDQGHVWDEOLVKHGPDQDJHPHQWZRUNŁRZV,QFLGHQWVDUHFODVVLŀHGLQWR GLłHUHQWOHYHOVE\LPSDFWFRQWUROODELOLW\DQGVHYHULW\$FRQWLQJHQF\SODQLVGHYHORSHG IRUHDFKOHYHOVSDQQLQJWKHIXOOF\FOHIURPSUHLQFLGHQWSUHYHQWLRQWRLQFLGHQWUHVSRQVH KDQGOLQJUHSRUWLQJGHFLVLRQPDNLQJSRVWPRUWHPDQDO\VHVDQGDFFRXQWDELOLW\ DVVLJQPHQW7KLVHQKDQFHVRXUHPHUJHQF\UHVSRQVHFDSDELOLWLHVRQDOOIURQWV )XUWKHUPRUHZHFRQGXFWUHJXODUHPHUJHQF\GULOOVEDVHGRQRXUFRQWLQJHQF\SODQV,Q )<ZHFRPSOHWHGRYHUVXFKGULOOVFRYHULQJFULWLFDOVFHQDULRVVXFKDVGDWD VHFXULW\F\EHUVHFXULW\SHUVRQDOVDIHW\DQGŀUHSURWHFWLRQ7KHLURYHUDOOUHVXOWVPHWRXU H[SHFWDWLRQV ,QDFFRUGDQFHZLWKWKHɹɽLEDED*URXS(PSOR\HH&RPSOLDQFH 7UDLQLQJ6\VWHPZHPDNHFRQVLVWHQWHłRUWVWRIRVWHUD FXOWXUHRIFRPSOLDQFHDQGULVNPDQDJHPHQW7RWKLVHQGZH RUJDQL]HGQHDUO\DGYRFDF\DQGWUDLQLQJDFWLYLWLHVLQ )<UDQJLQJIURPRQOLQHDQGRńLQHWUDLQLQJVHVVLRQVWR LQWHUQDOFRPPXQLW\RXWUHDFKDQGPXOWLPHGLDFDPSDLJQV 5LVNPDQDJHPHQWLVDOVRLQFRUSRUDWHGLQWRWKHɹɽLEDED *URXS&RGHRI%XVLQHVV&RQGXFWH[DPLQDWLRQUHTXLUHGIRUDOO HPSOR\HHV,Q)<WKHSDVVUDWHIRUWKHH[DPLQDWLRQZDV ,Q'HFHPEHUZHKHOGRXUWK*URXSZLGH&RPSOLDQFH 'D\IHDWXULQJVHQLRUPDQDJHPHQWPHVVDJHVSROLF\ EULHŀQJVDQGLQWHUDFWLYHVHVVLRQVWRGLVVHPLQDWHFRPSOLDQFH NQRZOHGJHLQYDULRXVGRPDLQVDQGEROVWHUULVNDZDUHQHVV DFURVVWKHRUJDQL]DWLRQ )XUWKHUPRUHZHKDYHLQWHJUDWHGULVNPDQDJHPHQWLQWRWKH WUDLQLQJDJHQGDIRUWKH%RDUGRI'LUHFWRUV,Q)<RI QRQH[HFXWLYHGLUHFWRUVUHFHLYHGWUDLQLQJLQWKLVŀHOG :HKDYHHVWDEOLVKHGDPXOWLWLHURYHUVLJKWDQGLQVSHFWLRQPHFKDQLVPWRHQVXUHWKDWRXU FRPSOLDQFHDQGULVNPDQDJHPHQWSUDFWLFHVDUHHYDOXDWHGFRQWLQXRXVO\DQGHłHFWLYHO\ 2XUEXVLQHVVHVVHUYHDVWKHŀUVWOLQHRIGHIHQVHKROGLQJXOWLPDWHUHVSRQVLELOLW\IRU WKHLURZQFRPSOLDQFHDQGULVNPDQDJHPHQW7KH\DUHUHTXLUHGWRFRQGXFWUHJXODUVHOI LQVSHFWLRQDQGVHOIUHPHGLDWLRQWRSURDFWLYHO\LGHQWLI\DQGSUHYHQWULVNV%XLOGLQJRQWKLV IRXQGDWLRQ*URXSOHYHOIXQFWLRQDOGHSDUWPHQWVPRQLWRUDQGLQVSHFWWKHFRPSOLDQFHDQG ULVNPDQDJHPHQWSUDFWLFHVRIHDFKEXVLQHVVDFFRUGLQJWRLWVULVNSURŀOH7KLVSURYLGHV DQLQGHSHQGHQWRYHUVLJKWSHUVSHFWLYH)XUWKHUPRUHZHFRQGXFWLQWHUQDODQGH[WHUQDO DXGLWVRQPDWHULDOPDWWHUVDWOHDVWRQFHD\HDUWRHQVXUHWKHHłHFWLYHHQIRUFHPHQWRI FRPSOLDQFHUHTXLUHPHQWV,Q)<ZHFRQGXFWHGVSHFLDODXGLWVWDUJHWLQJVRPHULVN VFHQDULRV 2QWKHDFFRXQWDELOLW\IURQWWKH5LVN0DQDJHPHQW&RPPLWWHHFRQGXFWVDQQXDORYHUVLJKW DQGHYDOXDWLRQVIRUFRPSOLDQFHDQGULVNPDQDJHPHQWDFURVVRXUEXVLQHVVHV7KHUHVXOWV DUHOLQNHGWRWKHSHUIRUPDQFHDVVHVVPHQWVRIWHDPVHQVXULQJWKDWULVNPDQDJHPHQW UHVSRQVLELOLWLHVDUHHłHFWLYHO\IXOŀOOHG :HFRPSOHWHGRYHU HPHUJHQF\GULOOVFRYHULQJFULWLFDO VFHQDULRV 2YHU RIQRQH[HFXWLYHGLUHFWRUV SDUWLFLSDWHGLQULVNPDQDJHPHQW WUDLQLQJ τ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV *RYHUQDQFH

Open the original at slide 21 ↗

Slide 22 — (6*JRYHUQDQFH

(6*JRYHUQDQFHVWUXFWXUH 6WDQGDUGL]LQJ&RUSRUDWH*RYHUQDQFH (6*JRYHUQDQFH (6*JRYHUQDQFHVWUXFWXUH (6*PDQDJHPHQWV\VWHP (6*ULVNPDQDJHPHQW &RPPXQLFDWLRQDQGWUDLQLQJ IRU(6* (6*JRYHUQDQFHVWUXFWXUH ,QZHHVWDEOLVKHGDWKUHHWLHU(6*JRYHUQDQFH VWUXFWXUHLQYROYLQJWKH%RDUGRI'LUHFWRUVWKHPDQDJHPHQW DQGZRUNLQJJURXSVWRHQVXUHWKHHłHFWLYHLPSOHPHQWDWLRQ RIRXU(6*LQLWLDWLYHV ɹɽLEDED V(6*JRYHUQDQFHVWUXFWXUH 6XVWDLQDELOLW\&RPPLW WHH 7KLVFRPPLWWHHDVVLVWVWKHERDUGLQLGHQWLI\LQJDQGHYDOXDWLQJWKHFRPSDQ\І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ŀFGRPDLQ (6*:RUNLQJ*URXS 7KLVZRUNLQJJURXSFRPSULVHVWKH(6*2ŃFHUVRIRXUEXVLQHVVHVDQGWKHKROGLQJ JURXS VIXQFWLRQDOGHSDUWPHQWV,WZRUNVZLWKWKH(6*6WUDWHJLF2SHUDWLRQVDQG 5HVHDUFK'HSDUWPHQWZKLFKLVOHGE\WKH6XVWDLQDELOLW\6WHHULQJ&RPPLWWHHWR HQVXUHWKHDFKLHYHPHQWRIVWUDWHJLF(6*JRDOV 2XU(6*VWUDWHJ\LVRQHRIɹɽLEDED V FRUQHUVWRQHVWUDWHJLHVDQG(6*JRYHUQDQFH VHUYHVDVDFULWLFDOHQDEOHUIRULWVH[HFXWLRQ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV *RYHUQDQFH

Open the original at slide 22 ↗

Slide 23 — (6*PDQDJHPHQWV\VWHP

(6*JRYHUQDQFHVWUXFWXUH 6WDQGDUGL]LQJ&RUSRUDWH*RYHUQDQFH (6*PDQDJHPHQWV\VWHP (6*ULVNPDQDJHPHQW &RPPXQLFDWLRQDQGWUDLQLQJIRU(6* *XLGHGE\WKHɹɽLEDED*URXS(6**RYHUQDQFHDQG'LVFORVXUH 3ROLF\ZHGULYHWKHFRQWLQXRXVUHŀQHPHQWRIRXU(6* PDQDJHPHQWV\VWHPLQD3ODQ'R&KHFN$FW3'&$F\FOH 3XUVXDQWWRWKHɹɽLEDED*URXS3ROLF\IRU0DQDJLQJ(6* UHODWHG*RDOVDQG0HWULFVZHKDYHLQVWLWXWLRQDOL]HGDFORVHG ORRSZRUNŁRZWKDWHQFRPSDVVHVJRDOVHWWLQJSURJUHVV WUDFNLQJDQGUHVXOWHYDOXDWLRQ$WWKHVWDUWRIHDFKŀVFDO \HDUWKH6XVWDLQDELOLW\&RPPLWWHHDSSURYHVWKH*URXS V(6* JRDOVZKLFKWKH6XVWDLQDELOLW\6WHHULQJ&RPPLWWHHFDVFDGHV WRRXUEXVLQHVVHV7KURXJKRXWWKHŀVFDO\HDUWKH(6*2ŃFHU :HPDNHFRQVLVWHQWHłRUWVWRHPEHG(6*ULVNVLQWRRXUFRPSUHKHQVLYHULVNPDQDJHPHQWV\VWHP (6*ULVNVVXFKDVFOLPDWHFKDQJHDQGHPLVVLRQVKDYHEHHQDGGHGWRWKHULVNOLVW/HYHUDJLQJ DXQLŀHGGLJLWDOSODWIRUPZHPDLQWDLQUHJXODUPRQLWRULQJWRLGHQWLI$6*ULVNVDQGIRUPXODWH UHPHGLHVDFFRUGLQJO$XUWKHUPRUHZHUHJXODUO\VHHNSURIHVVLRQDODGYLFHIURPH[WHUQDOFRQVXOWDQWV UHJDUGLQJ(6*ULVNPDQDJHPHQWVRWKDWZHFDQFRQWLQXRXVO\LPSURYHRXUFDSDELOLWLHV,Q)< ZHFRQWLQXHGFRQGXFWLQJFRPSOLDQFHDQGULVNLQVSHFWLRQVRQNH\(6*LVVXHVWRHQVXUHWKHHłHFWLYH LPSOHPHQWDWLRQRIRXUPDQDJHPHQWPHDVXUHV 7KHHł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ŃFLDO ZHEVLWH V(6*VHFWLRQWRV\VWHPDWLFDOO\SUHVHQWRXUFRQFHSWVLQLWLDWLYHVDQGSROLFLHVIRU VXVWDLQDELOLW\WRJHWKHUZLWKWKHODWHVWXSGDWHVRQRXU(6*UDWLQJVDQGDZDUGVIRUWKHSXUSRVH RIPRUHWUDQVSDUHQWDQGWLPHO\GLVFORVXUH2XUPRQWKO\(6*QHZVOHWWHUVDGGUHVVWKHLQWHUHVWRI &KLQHVHDQGRYHUVHDVLQVWLWXWLRQDOLQYHVWRUVLQɹɽ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ŀVFDO\HDUWKH6XVWDLQDELOLW\6WHHULQJ&RPPLWWHHUHSRUWV WRWKH6XVWDLQDELOLW\&RPPLWWHHRQWKHSURJUHVVPDGHE\WKH *URXSDQGRXUEXVLQHVVHVDJDLQVWWKHLUUHVSHFWLYH(6*JRDOV :HKDYHLQVWLWXWHGDPHWULFEDVHGVFRULQJV\VWHPWRPHDVXUH (6*DFKLHYHPHQWVPDGHE\HDFKEXVLQHVV%\PHDQVRI LQFHQWLYHVVXFKDV(6*DZDUGVZHPRWLYDWHRXUEXVLQHVVHVWR H[FHHGWKHLU(6*JRDOV 3ODQ $FW 'R &KHFN (6* PDQDJHPHQW V\VWHP ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV *RYHUQDQFH

Open the original at slide 23 ↗

Slide 24 — (QYLURQPHQWDO

3URWHFWLQJWKH(QYLURQPHQW (QYLURQPHQWDO $VWKHVWUDLQEHWZHHQHFRQRPLFJURZWKDQGŀQLWHUHVRXUFHV HVFDODWHVWKHJOREDOHQYLURQPHQWLVQHDULQJPXOWLSOHWLSSLQJ SRLQWV%XVLQHVVDVXVXDOFDUULHVV\VWHPLFULVNVWKUHDWHQLQJ ERWKWKHSODQHWDQGWKHJOREDOHFRQRP\$JUHHQWUDQVLWLRQLVQR ORQJHURSWLRQDOLWLVLPSHUDWLYH 7KLVFKDSWHU $GGUHVVLQJFOLPDWHFKDQJH $GYDQFLQJFDUERQQHXWUDOLW\ &RQVHUYLQJDQGUHVWRULQJQDWXUH ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 24 ↗

Slide 25 —

*RDOVDQGSURJUHVV :HHQVXUHWKDWRIRXUZDVWHGLVSRVDOLVKDQGOHGE\FHUWLŀHGFRQWUDFWRUV ,PSOHPHQWHG :DVWHPDQDJHPHQWJRDOV 3URJUHVVLQ)< (QHUJ\JRDOV 3URJUHVVLQ)< 6WDUWLQJIURPRXUFORXGFRPSXWLQJRSHUDWLRQVZLOOEHSRZHUHGE\FOHDQHOHFWULFLW\ 7KHDQQXDODYHUDJHSRZHUXVDJHHłHFWLYHQHVV38(DFURVVɹɽLEDED&ORXG VVHOIEXLOWGDWDFHQWHUVZLOOQRW H[FHHG &OHDQHOHFWULFLW\DFFRXQWHGIRURIWKHHOHFWULFLW\PL[DW ɹɽLEDED&ORXG VVHOIEXLOWGDWDFHQWHUVXSSHUFHQWDJH SRLQWVIURP)< 7KHDQQXDODYHUDJH38(DFURVVɹɽLEDED&ORXG VVHOIEXLOWGDWD FHQWHUVIXUWKHUGURSSHGIURPWR &DUERQQHXWUDOLW\JRDOV 3URJUHVVLQ)< 'HFDUERQL]LQJɹɽLEDED 6FRSHVDQG :HZLOODFKLHYHFDUERQQHXWUDOLW\LQRXURZQRSHUDWLRQVE\ 1HWHPLVVLRQVIURPRXURZQRSHUDWLRQV6FRSHVDQG WRWDOHGPLOOLRQWRQVGRZQ\HDURQ\HDUDQGZH UHGXFHGHPLVVLRQVE\PLOOLRQWRQVPRUHWKDQLQ WKHSUHYLRXVŀVFDO\HDU *UHHQLQJWKHYDOXHFKDLQ 6FRSH ɹɽLEDEDZLOOFROODERUDWHZLWKXSVWUHDPDQGGRZQVWUHDPSDUWQHUVWR DFKLHYHDUHGXFWLRQLQWKHQHWHPLVVLRQVLQWHQVLW\RIWKHYDOXHFKDLQ E\DVFRPSDUHGWRDQGɹɽLEDED&ORXGZLOODFKLHYHFDUERQ QHXWUDOLW\LQ6FRSHE\ 7KHQHWHPLVVLRQVLQWHQVLW\RIWKHYDOXHFKDLQ6FRSHZDV WRQVSHUPLOOLRQ50%RIUHYHQXHGRZQIURPWKH SUHYLRXVŀVFDO\HDUDQGIURPWKHEDVHOLQH\HDU (QDEOLQJDORZFDUERQGLJLWDO FLUFXODUHFRV\VWHP6FRSH %H\RQGRXURZQRSHUDWLRQVDQGWKHYDOXHFKDLQZHSOHGJHWROHYHUDJH SODWIRUPPHFKDQLFVWRHPSRZHUFRQVXPHUVDQGFRPSDQLHVWKHUHE\ HQFRXUDJLQJHYHQEURDGHUSDUWLFLSDWLRQDFURVVVRFLHW\2YHUWKH \HDUSHULRGIURPWRZHZLOOHQJDJHDQGHQDEOHWKHSODWIRUP HFRV\VWHPWRUHGXFHHPLVVLRQVE\DFXPXODWLYHWRWDORIJLJDWRQV :HHQJDJHGDQGHQDEOHGWKHSODWIRUPHFRV\VWHP6FRSH WRDYRLGDURXQGPLOOLRQWRQVRIHPLVVLRQVXS\HDU RQ\HDU7KHFXPXODWLYHWRWDORIDYRLGHGHPLVVLRQVIURPWKH EDVHOLQH\HDUWR)<ZDVDURXQGPLOOLRQWRQV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 25 ↗

Slide 26 —

3URWHFWLQJWKH (QYLURQPHQW $GYDQFLQJFDUERQQHXWUDOLW\ &OHDQHOHFWULFLW\DFFRXQWHGIRURIRXUHOHFWULFLW\PL[XS SHUFHQWDJHSRLQWV\HDURQ\HDU PLOOLRQWRQV ,QRXUHłRUWVWRGULYHWKHFRQVXPSWLRQRIORZFDUERQSURGXFWV ZHHQJDJHGVWDNHKROGHUVWRUHGXFHPLOOLRQWRQVRIHPLVVLRQV 7KHŁRRUDUHDFHUWLŀHGIRU/(('*ROGRQRXUVHOIRZQHG FDPSXVHVLQFUHDVHGE\\HDURQ\HDU &RQVHUYLQJDQGUHVWRULQJQDWXUH PLOOLRQFRUHV ɹɽLEDED&ORXGOHYHUDJHGLWVUHYHUVHVXSSO\FKDLQWRDFKLHYHZDUUDQW\ H[WHQVLRQVIRUDEDWFKRIVHUYHUVWRWDOLQJPLOOLRQFRUHV /N:K 7KHDQQXDODYHUDJHZDWHUXVDJHHłHFWLYHQHVV:8(DFURVV ɹɽLEDED&ORXG VVHOIEXLOWGDWDFHQWHUVZDV/N:K ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 26 ↗

Slide 27 — 6WUDWHJLHVDQGDSSURDFKHV

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ɹɽLEDED*URXS(QYLURQPHQWDO 3ROLF\WKHɹɽLEDED*URXS&RPSOLDQFH3ROLF\IRU0DQDJLQJ&OLPDWH 5LVNVDQG2SSRUWXQLWLHVDQGWKHɹɽLEDED*URXS&RPSOLDQFH3ROLF\ IRU0DQDJLQJ&DUERQ(PLVVLRQV ,QZHDQQRXQFHGRXUFDUERQQHXWUDOLW\JRDOVWRDOLJQZLWK WKHIUDPHZRUNRIWKH3DULV$JUHHPHQW7RDFKLHYHRXUHPLVVLRQV UHGXFWLRQJRDOVLQ6FRSHVDQGZHKDYHLGHQWLŀHGWKUHH SULPDU\DSSURDFKHVIRUEXLOGLQJDUHGXFHUHXVHUHF\FOHUHQHZDEOH UHVRXUFHWUDQVLWLRQ5FLUFXODUHFRQRP\WHFKGULYHQHŃFLHQF\ UHVRXUFHWUDQVLWLRQDQGVWDNHKROGHUHFRV\VWHPFRRUGLQDWLRQ 5FLUFXODU HFRQRP\ 5HGXFH 5HXVH 5HF\FOH 5HQHZDEOH UHVRXUFH WUDQVLWLRQ ,PSURYLQJHŃFLHQF\ WKURXJKWHFKQRORJLHV &KDQJLQJWKHZD\ ZHXVHUHVRXUFHV %XLOGLQJDVWDNHKROGHU HFRV\VWHP ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 27 ↗

Slide 28 — $GGUHVVLQJ

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ɹɽLEDED V(6*JRYHUQDQFHDQGULVN PDQDJHPHQWV\VWHP 7KH6XVWDLQDELOLW\&RPPLWWHHRIWKH%RDUG RI'LUHFWRUVFRPSULVHVGLUHFWRUVZLWK SURIHVVLRQDOEDFNJURXQGVLQŀQDQFHODZ DQGWKHWHFKQRORJ\LQGXVWU\RYHUVHHLQJ FOLPDWHUHODWHGLVVXHVIURPWKHSHUVSHFWLYHVRI SRWHQWLDOLPSDFWVRQRXUŀQDQFHVUHJXODWRU\ FRPSOLDQFHWHFKQRORJLFDOGHYHORSPHQWDQG EXVLQHVVVWUDWHJ\,Q)<WKH6XVWDLQDELOLW\ &RPPLWWHHUHFHLYHGSURJUHVVXSGDWHVRQ FOLPDWHUHODWHGZRUNDQGDSSURYHGWKHUHVXOWV RIFOLPDWHULVNDQGRSSRUWXQLW\DVVHVVPHQWV UHVSRQVHVWUDWHJLHVDQGSURJUHVVWRZDUG WDUJHWV7KH&RPPLWWHHDOVRUHFHLYHGD GHGLFDWHGWUDLQLQJVHVVLRQWRVKDUSHQLWV DZDUHQHVVRISRWHQWLDOFOLPDWHUHODWHGLPSDFWV RQRXUEXVLQHVVHVDQGŀQDQFHV /HGE\WKH6XVWDLQDELOLW\6WHHULQJ&RPPLWWHH WKH(6*6WUDWHJ\DQG2SHUDWLRQV'HSDUWPHQW HVWDEOLVKHGDFURVVIXQFWLRQDO&OLPDWH &KDQJH:RUNLQJ*URXSFRPSULVLQJPHPEHUV IURPWKH/HJDODQG&RPSOLDQFH,QWHUQDO &RQWURO(QWHUSULVH5LVN0DQDJHPHQWDQG ,QYHVWRU5HODWLRQV7KH*URXSFRRUGLQDWHV ZLWKEXVLQHVVJURXSVDQGFRPSDQLHVWRGULYH WKHLPSOHPHQWDWLRQRIFOLPDWHLQLWLDWLYHV,W UHJXODUO\FRQVROLGDWHVNH\LQWHUQDODQGH[WHUQDO FOLPDWHUHODWHGLQIRUPDWLRQDQGUHJXODWRU\ GHYHORSPHQWVDQGUHSRUWVWRWKH6WHHULQJ &RPPLWWHH)RUPRUHGHWDLOVVHH6HFWLRQ(6* JRYHUQDQFHLQ&KDSWHU &OLPDWHVWUDWHJ\ :HKDYHFRQVLVWHQWO\LQWHJUDWHGFOLPDWHDFWLRQLQWRRXUORQJWHUPEXVLQHVVGHYHORSPHQWDQG(6*PDQDJHPHQWV\VWHP ,QUHFHQW\HDUVULVLQJJOREDOWHPSHUDWXUHVH[WUHPHZHDWKHUHQHUJ\WUDQVLWLRQDQGHYROYLQJFOLPDWHUHJXODWLRQVDQG GLVFORVXUHUHTXLUHPHQWVKDYHPDGHFOLPDWHUHODWHGIDFWRUVFULWLFDOYDULDEOHVDłHFWLQJFRUSRUDWHULVNPDQDJHPHQW RSHUDWLRQDOUHVLOLHQFHDQGORQJWHUPFRPSHWLWLYHQHVV$WWKHVDPHWLPHWKHFRPELQHGHłHFWVRIHQHUJ\VHFXULW\ FRQFHUQVJHRSROLWLFDOG\QDPLFVDQGWUDGHEDUULHUVDUHDOVRLQWURGXFLQJQHZXQFHUWDLQWLHVDURXQGWKHSDWKZD\DQGFRVW RIWKHFRUSRUDWHORZFDUERQWUDQVLWLRQ )RUɹɽLEDEDWKHJURZLQJGHPDQGIRU$,GULYHQFRPSXWLQJSRZHUDQGWKHH[SDQVLRQRIRXUJOREDORSHUDWLRQVFRQWLQXHWR UHVKDSHRXUHQHUJ\FRQVXPSWLRQSURŀOHDQGUHVRXUFHDOORFDWLRQ7KHVHVKLIWVUDLVHWKHEDUIRUG\QDPLFDOO\RSWLPL]LQJWKH SDFHRIHPLVVLRQVUHGXFWLRQDQGEXLOGLQJFOLPDWHUHVLOLHQFH,QOLJKWRIORQJWHUPGHFDUERQL]DWLRQWDUJHWVDQGH[WHUQDO XQFHUWDLQWLHVZHFRQWLQXRXVO\UHŀQHRXUHPLVVLRQVUHGXFWLRQVWUDWHJLHVDQGHQKDQFHRXUFDSDFLW\WRUHVSRQGWRFOLPDWH ULVNV:HGULYHWKHVHHłRUWVWKURXJKWKHG\QDPLFPRQLWRULQJDQGDVVHVVPHQWRIFOLPDWHULVNVDQGRSSRUWXQLWLHVWUDFNLQJ RISURJUHVVDJDLQVWHVWDEOLVKHGWDUJHWVDQGLQWHUQDODQGH[WHUQDOFRRUGLQDWLRQ :HLGHQWLI\DQGV\VWHPDWLFDOO\DVVHVVWKHSK\VLFDODQGWUDQVLWLRQLPSDFWVRQRXUFRUHEXVLQHVVHVDQGYDOXHFKDLQXQGHU GLłHUHQWFOLPDWHVFHQDULRVSURYLGLQJDEDVLVIRUGHFLVLRQPDNLQJRQEXLOGLQJFRUSRUDWHFOLPDWHUHVLOLHQFH $VVHVVLQJFOLPDWHULVNVDQGRSSRUWXQLWLHV %XVLQHVVPRGHODQGFOLPDWHUHVLOLHQFHIRXQGDWLRQV ɹɽLEDED VEXVLQHVVIRFXVHVRQWZRFRUHVHJPHQWVFRQVXPSWLRQDQG $,FORXG2XUGDWDFHQWHUVORJLVWLFVDQGGHOLYHU\QHWZRUNVDQGRŃFH FDPSXVHVDVZHOODVPHUFKDQWRSHUDWLRQVDQGFRQVXPHUEHKDYLRURQ RXUSODWIRUPVPD\EHGLUHFWO\DłHFWHGE\FOLPDWHFKDQJH1RWDEO\WKH HQHUJ\GHPDQGDQGFDUERQHPLVVLRQVPDQDJHPHQWDULVLQJIURPWKH JURZWKRIRXU$,DQGFORXGEXVLQHVVHVDUHFHQWUDOLVVXHVLQRXUFOLPDWH VWUDWHJ\0HDQZKLOHɹɽLEDED VEXVLQHVVHFRV\VWHPIHDWXUHVDEURDGXVHU EDVHDGLYHUVLŀHGEXVLQHVVSRUWIROLRDFURVVPDUNHWRSHUDWLQJIRRWSULQW DQGFROODERUDWLYHPHFKDQLVPVZLWKHFRV\VWHPSDUWQHUV7KLVHQDEOHV XVWRPDLQWDLQEXVLQHVVFRQWLQXLW\DQGWRLGHQWLI\DQGVHL]HUHODWHG RSSRUWXQLWLHVZKHQFRQIURQWHGZLWKUHJLRQDOH[WUHPHZHDWKHUHQHUJ\ VXSSO\ŁXFWXDWLRQVRUVKLIWVLQPDUNHWGHPDQG ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 28 ↗

Slide 29 — $VVHVVPHQWUHVXOWV

$GGUHVVLQJ&OLPDWH&KDQJH 3URWHFWLQJWKH(QYLURQPHQW 3K\VLFDOULVNV $FXWHSK\VLFDOULVNVPD\FRPSURPLVHWKHSK\VLFDOVDIHW\DQGRSHUDWLRQDOVWDELOLW\RIFRUH LQIUDVWUXFWXUHRUGULYHXSH[SHQVHVUHODWHGWRHOHFWULFLW\IRUFRROLQJDVVHWPDLQWHQDQFH DQGORJLVWLFVGHOD\V2YHUWKHORQJWHUPZDWHUVWUHVVDQGGURXJKWVZLOOSURPSWXVWR LQFUHDVHLQYHVWPHQWVLQZDWHUVDYLQJWHFKQRORJLHVDQGHTXLSPHQWXSJUDGHVLQFHUWDLQ RSHUDWLQJPDUNHWVSODFLQJSRWHQWLDOSUHVVXUHRQRSHUDWLQJFRVWV $VVHVVPHQWUHVXOWV 8QGHUH[LVWLQJFRQWUROPHDVXUHVWKHSK\VLFDOULVNVIDFHGE\ɹɽLEDEDDUHJHQHUDOO\ PDQDJHDEOHLQWKHVKRUWWHUP\HWWKHLULPSDFWVPD\HVFDODWHRYHUWKHPHGLXPWRORQJ WHUPXQGHUWKHKLJKHPLVVLRQVFHQDULR7UDQVLWLRQULVNVPDLQO\UHVLGHLQWKHGLPHQVLRQV RIUHJXODWLRQVDQGWKHPDUNHW7UDQVLWLRQRSSRUWXQLWLHVDUHSULPDULO\DVVRFLDWHGZLWK UHVRXUFHHŃFLHQF\DVZHOODVSURGXFWVDQGVHUYLFHV%RWKULVNVDQGRSSRUWXQLWLHVVKRZ DQLQFUHDVLQJWUHQGRYHUWKHPHGLXPWHUPXQGHUWKHORZHPLVVLRQVFHQDULR 6FHQDULRDQDO\VLV ,QOLJKWRIWKHLQGXVWU\FKDUDFWHULVWLFV RSHUDWLQJPRGHOVDQGJHRJUDSKLF IRRWSULQWRIRXUSULQFLSDOEXVLQHVVHVZH KDYHDGRSWHGORZHPLVVLRQDQGKLJK HPLVVLRQFOLPDWHVFHQDULRVIURPWKH ,QWHUJRYHUQPHQWDO3DQHORQ&OLPDWH&KDQJH ,3&&DQGWKH,QWHUQDWLRQDO(QHUJ\$JHQF\ ,($:HXVHWKHVHVFHQDULRVWRKHOSLGHQWLI\ DQGDVVHVVPDWHULDOFOLPDWHUHODWHGULVNV DQGRSSRUWXQLWLHVϿDVZHOODVWKHSRWHQWLDO LPSDFWVRQRXUEXVLQHVVDQGŀQDQFHVϿ DFURVVRXURZQRSHUDWLRQVDQGYDOXHFKDLQ RYHUWKUHHWLPHKRUL]RQVVKRUWWHUPWKURXJK )<PHGLXPWHUPWKURXJK)< DQGORQJWHUPWKURXJK$VRI0DUFK WKHVFRSHRIWKHDVVHVVPHQW KDGFRYHUHGLQWHUQDWLRQDODQGGRPHVWLF HFRPPHUFHFORXGFRPSXWLQJDQGORJLVWLFV )RUPRUHGHWDLOVRQVFHQDULRVHWWLQJV WLPHKRUL]RQVDQGGDWDEDVHYHUVLRQVVHH $SSHQGL[&OLPDWH6FHQDULR'HVFULSWLRQV &DWHJRU\ 3K\VLFDO ULVNV 0DLQW\SHVRI DVVHWVDłHFWHG 3RWHQWLDOLPSDFWVRQRXUEXVLQHVV 3RWHQWLDOLPSDFWVRQRXUŀQDQFHV 7LPHKRUL]RQV 6KRUW 0HGLXP /RQJ $FXWH +HDWZDYH 'DWDFHQWHUV FDPSXVHVDQG ZDUHKRXVHV Ȱ 5LVLQJFRROLQJORDGVLQFUHDVHHOHFWULFLW\FRVWV Ȱ 3RZHUVXSSO\RUFRROLQJIDLOXUHVDłHFWFORXG VHUYLFHVDQGORJLVWLFV Ȱ 5HGXFHGHŃFLHQF\LQORJLVWLFVPD\OHDGWR GHOD\VVSRLODJHDQGFRPSHQVDWLRQ Ȱ +HDOWKULVNVIRURXWGRRUZRUNHUVLQFUHDVH 2SHUDWLQJH[SHQGLWXUH HOHFWULFLW\FRVWVKLJKWHPSHUDWXUH VXEVLGLHVPHGLFDOH[SHQVHV FRPSHQVDWLRQ &DSLWDOH[SHQGLWXUH FRROLQJDQGSRZHUVXSSO\DQG GLVWULEXWLRQXSJUDGHV 2SHUDWLQJUHYHQXH VHUYLFHLQWHUUXSWLRQVIHZHURUGHUV )ORRGVDQG WURSLFDO F\FORQHV 'DWDFHQWHUV FDPSXVHVDQG ZDUHKRXVHV Ȱ 'DPDJHWRVLWHVDQGHTXLSPHQWDQGZDWHU LQJUHVVPD\DłHFWRSHUDWLRQV Ȱ ,QWHUUXSWLRQVWRSRZHUVXSSO\RUFRROLQJDłHFW FORXGVHUYLFHVDQGORJLVWLFV Ȱ %ORFNHGORJLVWLFVPD\UHVXOWLQGHOD\VDQG FRPSHQVDWLRQ $VVHWYDOXH GDPDJHDVVHWLPSDLUPHQW &DSLWDOH[SHQGLWXUH UHLQIRUFHPHQWDQGUHWURŀWV 2SHUDWLQJH[SHQGLWXUH UHSDLUVHPHUJHQF\UHVSRQVH FRPSHQVDWLRQ 2SHUDWLQJUHYHQXH VHUYLFHLQWHUUXSWLRQVIHZHURUGHUV &KURQLF :DWHU VWUHVVDQG GURXJKWV 'DWDFHQWHUV Ȱ 8QFHUWDLQW\LQZDWHUVXSSO\RUULVLQJZDWHUSULFHV Ȱ 0D\UHTXLUHWKHDGRSWLRQRIZDWHUVDYLQJ RUORZZDWHUFRROLQJVROXWLRQVFRQVWUDLQLQJ HQHUJ\HŃFLHQF\DQGRSHUDWLRQDOŁH[LELOLW\ 2SHUDWLQJH[SHQGLWXUH ZDWHUFRVWVHOHFWULFLW\FRVWV &DSLWDOH[SHQGLWXUH ZDWHUVDYLQJUHWURŀWV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 29 ↗

Slide 30 — )LQDQFLDOLPSDFWVDQGFDSLWDODOORFDWLRQ

$GGUHVVLQJ&OLPDWH&KDQJH 3URWHFWLQJWKH(QYLURQPHQW 7UDQVLWLRQ RSSRUWXQLWLHV ([WHQVLYHDSSOLFDWLRQRIUHVRXUFHHŃFLHQF\WHFKQRORJLHVFDQUHGXFHRSHUDWLQJFRVWVDFURVVFORXGFRPSXWLQJDQGORJLVWLFVRSHUDWLRQV/HYHUDJLQJ$,DQGGLJLWDO WHFKQRORJLHVZHDUHFRPPLWWHGWRSURYLGLQJORZFDUERQGLJLWDOVROXWLRQVIRUYDULRXVLQGXVWULHVWRFDSWXUHJUHHQPDUNHWGHPDQG 6XSSRUWHGE\H[LVWLQJPHDVXUHVϿLQFOXGLQJIDFLOLW\ GHVLJQRSHUDWLRQDQGPDLQWHQDQFHV\VWHPV HPHUJHQF\UHVSRQVHSODQVDQGLQVXUDQFH FRYHUDJHϿWKHŀQDQFLDOLPSDFWRISK\VLFDOULVNV RQRXURYHUDOORSHUDWLRQVUHPDLQVSURSRUWLRQDOO\ VPDOOLQWKHVKRUWWHUPDQGKDVQRWFRQVWLWXWHG DPDWHULDOŀ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ŀQDQFHVIURPSK\VLFDOULVNVPD\LQWHQVLI\ DVFOLPDWHFKDQJHDFFHOHUDWHV7KHSRWHQWLDO LPSDFWVRQRXUŀQDQFHVIURPWUDQVLWLRQULVNVDUH H[SHFWHGWREHPRVWSURQRXQFHGLQWKHPHGLXP WHUPSULPDULO\LQWKHIRUPRILQFUHDVHGFDSLWDO H[SHQGLWXUHGULYHQE\FOHDQHQHUJ\WUDQVLWLRQDQG HQHUJ\HŃFLHQF\XSJUDGHV2YHUWKHORQJWHUP DVWKHFOHDQHQHUJ\PDUNHWPDWXUHVDQGORZ FDUERQWHFKQRORJLHVDFKLHYHHFRQRPLHVRIVFDOH WKHVHLQYHVWPHQWVDUHH[SHFWHGWRLPSURYHFRVW VWUXFWXUHVDQGSRVLWLYHO\FRQWULEXWHWRRSHUDWLQJ SHUIRUPDQFH*LYHQWKHFRPSOH[LW\RIWKHH[WHUQDO HQYLURQPHQWTXDQWLWDWLYHDVVHVVPHQWVRYHU WKHPHGLXPDQGORQJWHUPUHPDLQVXEMHFWWR VLJQLŀFDQWXQFHUWDLQW\:HZLOOFRQWLQXHWRUHŀQH RXUPHWKRGRORJLHVIRUWKHTXDQWLWDWLYHDQDO\VLVRI SRWHQWLDOLPSDFWVRQRXUŀQDQFHV )LQDQFLDOLPSDFWVDQGFDSLWDODOORFDWLRQ 7UDQVLWLRQ ULVNV $VJOREDOFOLPDWHUHJXODWLRQVWLJKWHQDQGGHPDQGIRU$,FRPSXWLQJSRZHUVXUJHVSROLF\FRPSOLDQFHDQGHQHUJ\PDUNHWSULFHYRODWLOLW\KDYHHPHUJHGDVSULPDU\ULVN IDFWRUV$WWKHVDPHWLPHWKHUDSLGLWHUDWLRQRIORZFDUERQWHFKQRORJLHVPD\DOVRGULYHXSWKHULVNRIWHFKQRORJ\VXEVWLWXWLRQ &DWHJRU\ 7UDQVLWLRQULVNV %XVLQHVVHV DłHFWHG 3RWHQWLDOLPSDFWVRQRXUEXVLQHVV 3RWHQWLDOLPSDFWVRQRXUŀQDQFHV 7LPHKRUL]RQV 6KRUW 0HGLXP /RQJ 3ROLF\DQG OHJDOULVNV 7LJKWHQLQJFOLPDWH UHODWHGSROLFLHV &ORXGVHUYLFHV DQGFURVV ERUGHUORJLVWLFV Ȱ 6WULFWHUHQHUJ\FRQVXPSWLRQDQGFDUERQHPLVVLRQ UHJXODWLRQVGULYHXSFRPSOLDQFHDQGHQHUJ\FRVWV Ȱ (QKDQFHGGLVFORVXUHUHTXLUHPHQWVLQFUHDVH FRPSOLDQFHFRVWV Ȱ 3ROLF\SUHVVXUHSDVVHGWKURXJKIURPFXVWRPHUVDłHFWV FRPSHWLWLYHQHVV 2SHUDWLQJH[SHQGLWXUH HQHUJ\DQGFRPSOLDQFH FRVWV &DSLWDOH[SHQGLWXUH LQYHVWPHQWLQ HPLVVLRQVUHGXFWLRQ IDFLOLWLHV 7HFKQRORJ\ ULVNV 'HSOR\PHQWDQG 5 'RIORZFDUERQ WHFKQRORJLHV &ORXGVHUYLFHV Ȱ ,WHUDWLYHXSJUDGHVWRGDWDFHQWHUHQHUJ\HŃFLHQF\ DUFKLWHFWXUHVDQGWHFKQRORJ\UHSODFHPHQWVLQFUHDVH 5 'DQGUHWURŀWWLQJLQYHVWPHQWHQWDLODVVHW LPSDLUPHQWULVN &DSLWDOH[SHQGLWXUH WHFKQRORJ\UHWURŀWWLQJ $VVHWYDOXH 0DUNHWULVNV 6XSSO\XQFHUWDLQW\ DQGSULFHYRODWLOLW\RI JUHHQHOHFWULFLW\DQG JUHHQFHUWLŀFDWHV &ORXGVHUYLFHV DQGORJLVWLFV Ȱ (QHUJ\VXSSO\GHPDQGG\QDPLFVDQGSULFHYRODWLOLW\ FUHDWHXQFHUWDLQW\LQHQHUJ\FRVWVDłHFWLQJRXU EXVLQHVVRSHUDWLQJFRVWV 2SHUDWLQJH[SHQGLWXUH HQHUJ\FRVWV 5HSXWDWLRQDO ULVNV 6WDNHKROGHUVFUXWLQ\ RIFRUSRUDWHFOLPDWH DFWLRQ ɹɽLEDED*URXS Ȱ +HLJKWHQHGH[WHUQDODWWHQWLRQWRFOLPDWHDFWLRQDQG HPLVVLRQVUHGXFWLRQSURJUHVVUDLVHVGLVFORVXUHDQG FRPPXQLFDWLRQUHTXLUHPHQWV Ȱ ,QVXŃFLHQWSURJUHVVPD\HURGHFXVWRPHUDQGLQYHVWRU WUXVW 2SHUDWLQJH[SHQGLWXUH FRPSOLDQFHFRVWV 2SHUDWLQJUHYHQXH FXVWRPHUDWWULWLRQ )LQDQFLQJFRVWV &DWHJRU\ 7UDQVLWLRQ RSSRUWXQLWLHV %XVLQHVVHV DłHFWHG 3RWHQWLDOLPSDFWVRQRXUEXVLQHVV 3RWHQWLDOLPSDFWVRQRXUŀQDQFHV 7LPHKRUL]RQV 6KRUW 0HGLXP /RQJ 2SSRUWXQLWLHV DVVRFLDWHGZLWK UHVRXUFHHŃFLHQF\ ,PSURYHGUHVRXUFH XVHHŃFLHQF\ &ORXGVHUYLFHV DQGORJLVWLFV Ȱ (QKDQFHUHVRXUFHXVHHŃFLHQF\WKURXJK HQHUJ\HŃFLHQF\DQGRSHUDWLRQDORSWLPL]DWLRQ UHGXFLQJHQHUJ\FRQVXPSWLRQSHUXQLWRIVHUYLFH 2SHUDWLQJH[SHQGLWXUH HQHUJ\FRVWV 2SSRUWXQLWLHV DVVRFLDWHGZLWK SURGXFWVDQGVHUYLFHV /RZFDUERQSURGXFWV JUHHQWHFKQRORJLHV DQGORZFDUERQ GLJLWDOVROXWLRQV &ORXGVHUYLFHV DQGHFRPPHUFH Ȱ /HYHUDJHGLJLWDOWHFKQRORJLHVLQFOXGLQJDUWLŀFLDO LQWHOOLJHQFHWRGHOLYHUORZFDUERQVROXWLRQVDQG ORZFDUERQSURGXFWVDFURVVLQGXVWULHV 2SHUDWLQJUHYHQXH FXVWRPHU JURZWK ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 30 ↗

Slide 31 — %XLOGLQJFOLPDWHUHVLOLHQFH

$GGUHVVLQJ&OLPDWH&KDQJH 3URWHFWLQJWKH(QYLURQPHQW %XLOGLQJFOLPDWHUHVLOLHQFH :HHQKDQFHWKHUHVLOLHQFHRIRXURZQ RSHUDWLRQVWKURXJKERWKFOLPDWHDGDSWDWLRQ DQGPLWLJDWLRQZKLOHVXSSRUWLQJEURDGHU VRFLHWDOUHVLOLHQFHWKURXJKRXUSURGXFWVDQG VHUYLFHVDVZHOODVH[WHUQDOFROODERUDWLRQ :LWKUHIHUHQFHWRUHOHYDQWHOHPHQWVRIWKH 7UDQVLWLRQ3ODQ7DVNIRUFH737IUDPHZRUNZH DUHFRQVLVWHQWO\UHŀQLQJRXUDFWLRQSDWKZD\V PLOHVWRQHVDQGGLVFORVXUHVWUDWHJ\ &OLPDWHDGDSWDWLRQ 7RDGGUHVVNH\SK\VLFDOULVNVZHIRUPXODWH DQGUHŀQHRXUDGDSWDWLRQVWUDWHJLHVE\ V\VWHPDWLFDOO\LGHQWLI\LQJYXOQHUDELOLWLHV DFURVVRXURSHUDWLRQVDQGYDOXHFKDLQLQ OLJKWRIVSHFLŀFFRQWH[WVVXFKDVRSHUDWLQJ ORFDWLRQV7KLVSURFHVVLVFRQGXFWHGZLWK UHIHUHQFHWRWKH:RUOG%XVLQHVV&RXQFLO IRU6XVWDLQDEOH'HYHORSPHQW:%&6' $GDSWDWLRQ3ODQQLQJIRU%XVLQHVVDQG WKH,QWHUQDWLRQDO2UJDQL]DWLRQIRU 6WDQGDUGL]DWLRQVWDQGDUG,62 $GDSWDWLRQWR&OLPDWH&KDQJHϿ*XLGHOLQHV RQ9XOQHUDELOLW\,PSDFWVDQG5LVN $VVHVVPHQW$FURVVIRXUGLPHQVLRQVϿ LQIUDVWUXFWXUHRSHUDWLRQVZRUNIRUFHDQG YDOXHFKDLQϿZHHPEHGSK\VLFDOULVN PDQDJHPHQWUHTXLUHPHQWVLQWRWKHIXOO OLIHF\FOHPDQDJHPHQWRIFULWLFDODVVHWV VXSSOHPHQWHGE\LQVXUDQFHDUUDQJHPHQWVDV DQDGGLWLRQDOVDIHJXDUG (QKDQFLQJFOLPDWHUHVLOLHQFHLQRXU RZQRSHUDWLRQV ,QIUDVWUXFWXUHUHVLOLHQFH :HHPEHGULVNDVVHVVPHQWVLQWRWKHIXOOOLIHF\FOHRIRXUGDWDFHQWHUVRŃFHFDPSXVHVDQGORJLVWLFV ZDUHKRXVLQJDQGGLVWULEXWLRQIDFLOLWLHVϿVSDQQLQJVLWHVHOHFWLRQGHVLJQDQGFRQVWUXFWLRQRSHUDWLRQV PDLQWHQDQFHDQGPRQLWRULQJϿWRVWUHQJWKHQFOLPDWHVSHFLŀFSURWHFWLRQVWDQGDUGVDQGNH\UHVRXUFH SUHSDUHGQHVV Ȱ 6LWHVHOHFWLRQ$VDSULQFLSOHGDWDFHQWHUVDYRLGKLJKULVN]RQHVZKLOHSURMHFWVLQDGMDFHQWDUHDV DUHEXLOWZLWKDGGHGGHVLJQPDUJLQV2ŃFHFDPSXVHVZDUHKRXVLQJDQGGLVWULEXWLRQIDFLOLWLHVDUH OLNHZLVHDVVHVVHGIRUVWRUPZDWHUDQGXUEDQZDWHUORJJLQJULVNV Ȱ 'HVLJQDQGFRQVWUXFWLRQ'DWDFHQWHUVDUHGHVLJQHGZLWKUHIHUHQFHWR*%&RGHIRU 'HVLJQRI'DWD&HQWHUVDQG$16,7,$7HOHFRPPXQLFDWLRQV,QIUDVWUXFWXUH6WDQGDUGIRU'DWD &HQWHUVIHDWXULQJUHLQIRUFHGŁRRGSUHYHQWLRQDQGGUDLQDJHFDSDELOLWLHV$UHGXQGDQWSRZHUVXSSO\ V\VWHPFRPSULVLQJGXDOXWLOLW\IHHGV836XQLWVDQGGLHVHOJHQHUDWRUVLVHVWDEOLVKHGVXSSRUWHGE\ IXHOUHVHUYHVDQGHPHUJHQF\IXHOVXSSO\DUUDQJHPHQWV&RROLQJVROXWLRQVDUHWDLORUHGWRORFDOZDWHU UHVRXUFHFRQGLWLRQVZLWKFDSDFLW\DQGUHGXQGDQF\GHVLJQHGIRUH[WUHPHKHDWVFHQDULRV2ŃFH FDPSXVHVLQFRUSRUDWHVSRQJHFLW\GHVLJQSULQFLSOHVIHDWXULQJFOLPDWHDGDSWLYHLQIUDVWUXFWXUHVXFK DVVXQNHQJUHHQEHOWV\VWHPVSHUPHDEOHSDYHPHQWVDQGKLJKHŃFLHQF\GUDLQDJHV\VWHPV Ȱ 2SHUDWLRQVPDLQWHQDQFHDQGPRQLWRULQJ)LQHJUDLQHGPRQLWRULQJLVFRQGXFWHGDWFULWLFDOQRGHV DFURVVGDWDFHQWHUVϿFRYHULQJWRWDOZDWHUFRQVXPSWLRQPDNHXSZDWHUYROXPHDQGGUDLQDJH YROXPHϿZKLOHZDWHUVWRUDJHDQGHPHUJHQF\UHSOHQLVKPHQWDUUDQJHPHQWVHQVXUHVXSSO\ FRQWLQXLW\&OLPDWHDGDSWLYHLQIUDVWUXFWXUHDFURVVFDPSXVHVXQGHUJRHVUHJXODULQVSHFWLRQDQG PDLQWHQDQFHWRHQVXUHLWVORQJWHUPVWDEOHDQGUHOLDEOHRSHUDWLRQ 2SHUDWLRQDODQGEXVLQHVVFRQWLQXLW\ :HKDYHHVWDEOLVKHGDPXOWLWLHUHGFORVHGORRSHPHUJHQF\PDQDJHPHQWV\VWHP FRYHULQJHDUO\ZDUQLQJUHVSRQVHUHFRYHU\DQGSRVWLQFLGHQWUHYLHZWRVDIHJXDUG WKHFRQWLQXLW\RIEXVLQHVVHVVXFKDVFORXGFRPSXWLQJHFRPPHUFHORJLVWLFVDQG TXLFNFRPPHUFHXQGHUH[WUHPHZHDWKHUVFHQDULRVɹɽLEDED&ORXGKDVEHHQFHUWLŀHG WRVWDQGDUGVVXFKDV,626HFXULW\DQG5HVLOLHQFHϿ%XVLQHVV&RQWLQXLW\ 0DQDJHPHQW6\VWHPVϿ5HTXLUHPHQWV Ȱ (DUO\ZDUQLQJ'DWDFHQWHUVDUHHTXLSSHGZLWKHQYLURQPHQWDOPRQLWRULQJGHYLFHV WKDWWUDFNNH\SDUDPHWHUVVXFKDVWHPSHUDWXUHDQGKXPLGLW\LQUHDOWLPH7KURXJK FHQWUDOL]HGPRQLWRULQJYLDORFDOSODWIRUPVDQGFHQWUDOV\VWHPVHPHUJHQF\UHVSRQVH SURFHGXUHVDUHWULJJHUHGDXWRPDWLFDOO\ZKHQHYHUDQRPDOLHVDUHGHWHFWHG Ȱ 5HVSRQVH'HGLFDWHGVWDQGDUGRSHUDWLQJSURFHGXUHVDUHIRUPXODWHGDQGPDLQWDLQHG IRUVFHQDULRVLQFOXGLQJSRZHURXWDJHVWHPSHUDWXUHLQFUHDVHVŀUHVKHDY\UDLQDQG W\SKRRQV5HVSRQVHUHVRXUFHVDUHDOORFDWHGDFFRUGLQJWRLQFLGHQWVHYHULW\OHYHOV DQGEDVLFVXSSOLHVIRUGLVDVWHUSUHSDUHGQHVVDUHGHSOR\HGDWFULWLFDOIDFLOLWLHV Ȱ 5HFRYHU\5HFRYHU\WLPHREMHFWLYHV572VDQGUHFRYHU\SRLQWREMHFWLYHV532VDUH VHWIRUFULWLFDOEXVLQHVVHVDQGFURVVUHJLRQDOGLVDVWHUUHFRYHU\DUFKLWHFWXUHVDQG DXWRPDWLFIDLORYHUPHFKDQLVPVDUHHVWDEOLVKHGWRUHGXFHWKHULVNRILQWHUUXSWLRQV FDXVHGE\FOLPDWHGLVDVWHUVDłHFWLQJDVLQJOHORFDWLRQ Ȱ 3RVWLQFLGHQWUHYLHZ%DVHGRQGULOOVLQVSHFWLRQVDQGSRVWLQFLGHQWUHYLHZV HPHUJHQF\SURFHVVHVDQGRSHUDWLRQDOVWDQGDUGVDUHFRQWLQXRXVO\UHŀQHG :RUNIRUFHDQGRUJDQL]DWLRQDOUHDGLQHVV :HLQFRUSRUDWHZRUNIRUFHVDIHW\DQGHPHUJHQF\UHVSRQVHFDSDELOLWLHVLQWRURXWLQHPDQDJHPHQW FRYHULQJNH\UROHVDQGKLJKH[SRVXUHVFHQDULRVLQFOXGLQJWKRVHRIGDWDFHQWHURSHUDWLRQVDQG PDLQWHQDQFHSHUVRQQHOFDPSXVHPSOR\HHVZDUHKRXVLQJDQGGLVWULEXWLRQZRUNHUVDQGIURQWOLQH FRXULHUVDQGGHOLYHU\ULGHUV Ȱ :RUNHQYLURQPHQW:HFRQWLQXRXVO\LPSURYHWKHSK\VLFDOZRUNHQYLURQPHQWVDWRXUFDPSXVHVDQG ORJLVWLFVZDUHKRXVHVSURYLGLQJHPSOR\HHVZLWKDFRPIRUWDEOHDQGVDIHRŃFHHQYLURQPHQWDQG SURYLGLQJIURQWOLQHZRUNHUVVXFKDVFRXULHUVDQGGHOLYHU\ULGHUVZLWKHVVHQWLDOFRROLQJVSDFHVDQG VXSSOLHV Ȱ 2UJDQL]DWLRQDOPHFKDQLVPV:HDSSURSULDWHO\DUUDQJHVKLIWVFKHGXOLQJDQGEUHDNVDQGLPSOHPHQW H[WUHPHZHDWKHUUHVSRQVHSODQV:HKDYHHVWDEOLVKHGSURIHVVLRQDOHPHUJHQF\UHVSRQVH WHDPVDQGVWDQGDUGL]HGRSHUDWLQJPDQXDOVDQGLPSURYHGRQFDOOGXW\URVWHUVDQGFURVVWHDP FRRUGLQDWLRQ Ȱ &DSDELOLW\EXLOGLQJ:HFRQGXFWUHJXODUŀUHVDIHW\ZRUNSODFHVDIHW\DQGH[WUHPHZHDWKHU HPHUJHQF\GULOOVFRPSOHPHQWHGE\WDUJHWHGWUDLQLQJWRVWUHQJWKHQWKHHPHUJHQF\UHVSRQVHDQG FRRUGLQDWHGLQFLGHQWKDQGOLQJFDSDELOLWLHVRISHUVRQQHOLQNH\UROHV ([WHUQDOGHSHQGHQFLHVDQGY DOXHFKDLQUHVLOLHQFH :HPDLQWDLQPXOWLOD\HUHGFROODERUDWLRQZLWKVXSSOLHUVDQGUHOHYDQWDXWKRULWLHVLQWKH ORFDWLRQVZKHUHZHRSHUDWHWRVWUHQJWKHQWKHUHVLOLHQFHRIRXUFRUHVXSSO\FKDLQV Ȱ 6XSSOLHUPDQDJHPHQW:HLPSOHPHQWRQERDUGLQJTXDOLŀFDWLRQVGXHGLOLJHQFH RQJRLQJPRQLWRULQJDQGVHUYLFHOHYHODJUHHPHQW6/$PDQDJHPHQWIRUNH\ VXSSOLHUVDQGUHJXODUO\DVVHVVWKHLURSHUDWLRQDOVWDELOLW\ Ȱ &ULWLFDOUHVRXUFHDVVXUDQFH)RUFULWLFDOUHVRXUFHVVXFKDVIXHODQGZDWHUVXSSO\ZH HQWHULQWRHPHUJHQF\UHSOHQLVKPHQWDQGUHVHUYHDJUHHPHQWVZLWKVXSSOLHUV Ȱ 6XSSO\FKDLQRSWLPL]DWLRQ:HGLYHUVLI\RXUVXSSOLHUEDVHDQGZDUHKRXVLQJDQG GLVWULEXWLRQUHVRXUFHVWRUHGXFHVLQJOHSRLQWGHSHQGHQFLHVDQGG\QDPLFDOO\DGMXVW VXSSO\DUUDQJHPHQWVORFDWLRQVRIVKLSSLQJZDUHKRXVHVDQGORJLVWLFVURXWHVLQ UHVSRQVHWRH[WUHPHZHDWKHUZDUQLQJV Ȱ ([WHUQDOFRRUGLQDWLRQ:HPDLQWDLQFORVHFRRUGLQDWLRQZLWKUHOHYDQWORFDO DXWKRULWLHVIDFLOLWDWLQJLQIRUPDWLRQVKDULQJUHVRXUFHFRRUGLQDWLRQDQGMRLQW UHVSRQVHHłRUWVGXULQJGLVDVWHUVFHQDULRV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 31 ↗

Slide 32 — $GGUHVVLQJ&OLPDWH&KDQJH

$GGUHVVLQJ&OLPDWH&KDQJH 3URWHFWLQJWKH(QYLURQPHQW &OLPDWHPLWLJDWLRQ ɹɽLEDED VFOLPDWHPLWLJDWLRQSODQVWDUWVIURPWKH LGHQWLŀ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łRUWVDUH DGYDQFHGMRLQWO\E\WKH&OLPDWH&KDQJH:RUNLQJ*URXSDQGWKH3XEOLF $łDLUV'HSDUWPHQWDQGZHPDLQWDLQUHJXODUHQJDJHPHQWZLWK LQGXVWU\RUJDQL]DWLRQVDQGUHJXODWRUV)RUPRUHGHWDLOVRQWKHVH LQLWLDWLYHVVHH([WHUQDOFROODERUDWLRQLQ6HFWLRQ&KDSWHU 7HFKQRORJ\ULVNV :HSXUVXHIXOOVWDFNRSWLPL]DWLRQDFURVVRXUFORXGFRPSXWLQJVHUYLFHVVSDQQLQJ FKLSVPRGHOVIDFLOLWLHVDQGRSHUDWLRQVDQGPDLQWHQDQFH)XUWKHUPRUHZHLQWHJUDWH DGYDQFHGWHFKQRORJLHVDQGHTXLSPHQWLQWRDPRGXODUFRQWDLQHUEDVHGGHOLYHU\ V\VWHPFUHDWLQJDPRUHHŃFLHQWDQGŁH[LEOHGDWDFHQWHUDUFKLWHFWXUH$FURVVRXU FDPSXVHVDQGORJLVWLFVRSHUDWLRQVZHFRQWLQXHWRDGYDQFHHQHUJ\HŃFLHQF\ PRQLWRULQJDQGLQWHOOLJHQWFRQWUROVWRLPSURYHRSHUDWLRQDOHŃFLHQF\DQG PDQDJHPHQWSUHFLVLRQ7KHVHLQYHVWPHQWVDUHPDQDJHGWKURXJKVWDQGDUG FDSLWDODQGRSHUDWLQJH[SHQGLWXUHOLQHVDQGDUHEXLOWLQWRWKHDQQXDO SODQQLQJDQGSHUIRUPDQFHWUDFNLQJRIWKHUHOHYDQWEXVLQHVVHV 0DUNHWULVNV :HKDYHHVWDEOLVKHGDGLYHUVLŀHGSRUWIROLRWRKHOSRXUEXVLQHVVHV VHFXUHDVWDEOHVXSSO\RIFOHDQHQHUJ\:HFRQWLQXHWRHQKDQFHWKH &RPSXWH3RZHU&RRUGLQDWLRQPHFKDQLVPIRURXUGDWDFHQWHUV$WWKH SODQQLQJOHYHOZHVWHHUQHZFRPSXWLQJFDSDFLW\WRZDUGUHJLRQVZLWK DEXQGDQWFRVWHłHFWLYHDQGORZFDUERQSRZHU$WWKHRSHUDWLRQDO OHYHOZHLPSURYHWKHXWLOL]DWLRQRIJUHHQHOHFWULFLW\DQGWKHHŃFLHQF\ RIVXSSO\GHPDQGPDWFKLQJWKURXJKFRRUGLQDWHGGLVSDWFKLQJ,Q WHUPVRIPDQDJHPHQWZHKDYHDGRSWHGDQDQQXDOG\QDPLFSODQQLQJ PHFKDQLVPWRUHJXODUO\UHYLHZFOHDQHQHUJ\RSWLRQVDQGWDUJHWUDWLRV DFURVVFRXQWULHVDQGUHJLRQVLQFRUSRUDWHUHODWHGH[SHQGLWXUHV LQWRURXWLQHEXGJHWVDQGHPEHGHQHUJ\HŃFLHQF\DQG FOHDQHQHUJ\UHTXLUHPHQWVLQWRRXUVXSSOLHUFROODERUDWLRQ PHFKDQLVPV 5HSXWDWLRQDOULVNV ,QOLJKWRIWKHVXVWDLQHGDWWHQWLRQWRFOLPDWHLVVXHVIURPWKHSXEOLF FXVWRPHUVDQGFDSLWDOPDUNHWVWKHFUHGLELOLW\RIFOLPDWHUHODWHGGDWD DQGFODLPVPD\DOODłHFWH[WHUQDOWUXVW:HHPEHGFDUERQDFFRXQWLQJ DQGDYRLGHGHPLVVLRQVDVVHVVPHQWVLQWRRXUGDWDJRYHUQDQFHSURFHVVHV :KHQVHOHFWLQJPHWKRGRORJLHVDQGVWDQGDUGVZHDGKHUHWRWKHSULQFLSOHV RISUXGHQFHDQGFRQVHUYDWLVPZLWKUHIHUHQFHWRSUHYDLOLQJDQGOHDGLQJ LQWHUQDWLRQDOVWDQGDUGV%\FOHDUO\GHŀQLQJERXQGDULHVDVVXPSWLRQV DQGDFFRXQWLQJSDUDPHWHUVZHDYRLGRYHUVWDWLQJHPLVVLRQVUHGXFWLRQ RXWFRPHV)XUWKHUPRUHZHHQKDQFHWKHFUHGLELOLW\RIRXUFOLPDWHDFWLRQV WKURXJKWKLUGSDUW\DVVXUDQFHDQQXDOWUDQVSDUHQWGLVFORVXUHVDQGLQYHVWRU FRPPXQLFDWLRQPHFKDQLVPV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 32 ↗

Slide 33 — (QKDQFLQJVRFLDOUHVLOLHQFHWKURXJKSURGXFWVDQGVHUYLFHV

$GGUHVVLQJ&OLPDWH&KDQJH 3URWHFWLQJWKH(QYLURQPHQW (QKDQFLQJVRFLDOUHVLOLHQFHWKURXJKSURGXFWVDQGVHUYLFHV :HHQJDJHLQH[WHUQDOFROODERUDWLRQWRLQWHJUDWHRXUEXVLQHVVGHYHORSPHQWDQGFOLPDWHUHVSRQVHVWUDWHJLHVLQWRWKH GRPHVWLFDQGLQWHUQDWLRQDOFOLPDWHDJHQGDV ɹɽLEDED VFORXGFRPSXWLQJHFRPPHUFHSODWIRUPVORJLVWLFVQHWZRUNVDQGGLJLWDOPRELOLW\VHUYLFHVKDYH EHFRPHFULWLFDOLQIUDVWUXFWXUHXQGHUSLQQLQJWKHGLJLWDOHFRQRP\:HLQWHJUDWHFOLPDWHDGDSWDWLRQDQGPLWLJDWLRQ UHTXLUHPHQWVLQWRWKHRQJRLQJRSWLPL]DWLRQRIRXUSURGXFWVDQGVHUYLFHVDSSO\LQJFDSDELOLWLHVGHYHORSHG WKURXJKRXURZQRSHUDWLRQVWRWKHEURDGHUYDOXHFKDLQ7KLVHł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ɹɽLEDED FRQWULEXWHGWRWKHGUDIWLQJRIWKH,QWHUQDWLRQDO 7HOHFRPPXQLFDWLRQ8QLRQ,78*XLGHOLQHVIRU (QYLURQPHQWDO,PSDFW$VVHVVPHQWRI$,6\VWHPV DVZHOODVWKH:%&6' V$GDSWDWLRQ3ODQQLQJIRU %XVLQHVVDQG*XLGDQFHRQ$YRLGHG(PLVVLRQV DQGDSSOLHGWKHUHOHYDQWPHWKRGRORJLFDO IUDPHZRUNVWRRXURZQSUDFWLFHV 3URPRWLQJGLJLWDOFOLPDWHVROXWLRQV :HVKDUHDQGSURPRWHSUDFWLFHVLQOHYHUDJLQJGLJLWDO WHFKQRORJLHVWRGULYHFOLPDWHDFWLRQVWKURXJKMRLQWUHVHDUFK SDUWLFLSDWLRQLQLQWHUQDWLRQDOIRUXPVDQGFURVVLQGXVWU\ H[FKDQJHV ,Q)<WKHɹɽ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ɹɽLEDED&ORXGODXQFKHG WKH&ORXG9DOOH\7RNHQDQG:DWW)RUXPWRIRVWHUFURVVLQGXVWU\ H[FKDQJHDQGFROODERUDWLRQRQORZFDUERQGHYHORSPHQWRI GDWDFHQWHUVLQWKH$,HUD (QVXULQJWKHUREXVWRSHUDWLRQRIGLJLWDO LQIUDVWUXFWXUH $VRXUSODWIRUPVVHUYHDVFULWLFDOGLJLWDOHFRQRP\ LQIUDVWUXFWXUHWKHVWDELOLW\DQGGLVDVWHUUHFRYHU\ FDSDELOLWLHVRIWKHLUNH\VHUYLFHVGLUHFWO\DłHFWEXVLQHVV FRQWLQXLW\IRUPHUFKDQWVDQGSXEOLFDFFHVVWRVHUYLFHV 7KHVHFDSDELOLWLHVEHFRPHHVSHFLDOO\FULWLFDOGXULQJ H[WUHPHZHDWKHUHYHQWVDQGQDWXUDOGLVDVWHUV:H LQWHJUDWHWKHVHFDSDELOLWLHVLQWRRXUEXVLQHVVFRQWLQXLW\ PDQDJHPHQWPHFKDQLVPVDQGFRRUGLQDWHZLWKSXEOLF HPHUJHQF\UHVSRQVHV\VWHPVWKHUHE\VXSSRUWLQJWKH HQKDQFHPHQWRIVRFLHWDOUHVLOLHQFHZKLOHVDIHJXDUGLQJ RXURZQEXVLQHVVFRQWLQXLW\ &DLQLDROHYHUDJHVLWVORJLVWLFVQHWZRUNDQGGLVSDWFKLQJ FDSDELOLWLHVWRSDUWLFLSDWHLQSXEOLFHPHUJHQF\ UHVSRQVH$VRQHRIWKHŀUVWPHPEHURUJDQL]DWLRQV XQGHUWKH*RYHUQPHQW6RFLHW\&RRUGLQDWHG(PHUJHQF\ 6XSSOLHV$VVXUDQFH0HFKDQLVPLVVXHGE\WKH1DWLRQDO &RPPLVVLRQIRU'LVDVWHU3UHYHQWLRQ5HGXFWLRQDQG 5HOLHI&DLQLDRFRPSOHWHGPXOWLSOHPDMRUHPHUJHQF\ ORJLVWLFVVXSSRUWPLVVLRQVGXULQJ)<LQFOXGLQJ VXSSRUWLQJGLVDVWHUUHOLHIGXULQJWKHGURXJKWLQ+HQDQ DQG6KDDQ[LUDLQVWRUPVLQ%HLMLQJDQG+HEHLDQGWKH :DQJ)XN&RXUWŀ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ɹɽLEDED&ORXG V=KDQJEHLGDWD FHQWHUFKDQQHOVZDVWHKHDWIURPLWVVHUYHUVLQWRWKH ORFDOPXQLFLSDOKHDWLQJQHWZRUNRSWLPL]LQJFRROLQJ HŃFLHQF\ZKLOHSURYLGLQJDORZFDUERQKHDWVRXUFH IRUVXUURXQGLQJFRPPXQLWLHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 33 ↗

Slide 34 — 5LVNPDQDJHPHQW

$GGUHVVLQJ&OLPDWH&KDQJH 3URWHFWLQJWKH(QYLURQPHQW 5LVNPDQDJHPHQW 0HWULFVDQGWDUJHWV 7KH&OLPDWH&KDQJH:RUNLQJ*URXSZRUNVLQFRRUGLQDWLRQZLWKWKH(QWHUSULVH 5LVN0DQDJHPHQW'HSDUWPHQWWRLQFRUSRUDWHFOLPDWHULVNVLQWRɹɽLEDED *URXS VRYHUDOOULVNWD[RQRP\DVVHVVHGXVLQJFRQVLVWHQWHYDOXDWLRQFULWHULD DQGPDQDJHGRQDWLHUHGEDVLVDFFRUGLQJWRWKHLULPSDFWVDQGOLNHOLKRRG ,Q)<ZHEXLOWDQLQWHUQDOFOLPDWHSK\VLFDOULVNDVVHVVPHQWSODWIRUP WKDWHQDEOHVEXVLQHVVJURXSVDQGFRPSDQLHVWRLGHQWLI\DQGDVVHVVVKRUW PHGLXPDQGORQJWHUPSK\VLFDOULVNVWRWKHLUDVVHWVXQGHUGLłHUHQWFOLPDWH VFHQDULRVSURYLGLQJDEDVLVIRUFOLPDWHDGDSWDWLRQSODQQLQJDQGUHVRXUFH DOORFDWLRQ&RQFXUUHQWO\ZHFRQWLQXRXVO\WUDFNFOLPDWHUHODWHGHYHQWVWKURXJK DULVNHYHQWPRQLWRULQJSODWIRUPDQDO\]LQJDQGUHVSRQGLQJWRWKHPLQUHDO WLPHWRG\QDPLFDOO\YDOLGDWHH[LVWLQJULVNDVVHVVPHQWRXWFRPHV ɹɽLEDEDVHWWKUHHFDUERQQHXWUDOLW\WDUJHWVLQ,QOLJKWRIGHYHORSPHQWV DQGG\QDPLFDGMXVWPHQWVDFURVVEXVLQHVVJURXSVDQGFRPSDQLHVZH IRUPXODWHDQGDGMXVWDQQXDOWDUJHWVDWWKHEXVLQHVVOHYHODFFRUGLQJO\WR HQVXUHWKHIHDVLELOLW\RIWKH*URXS VWDUJHWV:HFRQWLQXRXVO\WUDFNSURJUHVV WRZDUGRXUFDUERQQHXWUDOLW\WDUJHWVDVZHOODVFORVHO\UHODWHGPHWULFV LQFOXGLQJWKHSURSRUWLRQRIUHQHZDEOHHQHUJ\3RZHU8VDJH(łHFWLYHQHVV 38(DQG:DWHU8VDJH(łHFWLYHQHVV:8(DQGGLVFORVHWKHVHLQWKHDQQXDO (6*UHSRUWV7RDGYDQFHFOLPDWHDGDSWDWLRQHłRUWVZHKDYHLQLWLDWHGWKH IRUPXODWLRQRIUHODWHGWDUJHWVDQGPHWULFV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 34 ↗

Slide 35 — $GYDQFLQJFDUERQ

$GYDQFLQJFDUERQQHXWUDOLW\ 3URWHFWLQJWKH(QYLURQPHQW $GYDQFLQJFDUERQ QHXWUDOLW\ 3URJUHVVWRZDUGFDUERQQHXWUDOLW\ (PLVVLRQVUHGXFWLRQIURPRXURZQ RSHUDWLRQVDQGWKHYDOXHFKDLQ 'ULYLQJSODWIRUPHFRV\VWHP GHFDUERQL]DWLRQ &DUERQQHXWUDOLW\LVDFULWLFDO\DUGVWLFN IRUPHDVXULQJWKHVXFFHVVRIRXUJUHHQ WUDQVLWLRQ:HHPEHGVXVWDLQDELOLW\LQWRRXU EXVLQHVVRSHUDWLRQVWRIXOŀOORXUFDUERQ QHXWUDOLW\FRPPLWPHQW 3URJUHVVWRZDUGFDUERQQHXWUDOLW\ &DUERQQHXWUDOLW\DQG$, $VWKHJOREDOHQHUJ\ODQGVFDSHXQGHUJRHVDSURIRXQGVKLIWDQG$,SHQHWUDWLRQDFFHOHUDWHVDFKLHYLQJFDUERQQHXWUDOLW\UHTXLUHVDFOHDU XQGHUVWDQGLQJRIGHFDUERQL]DWLRQUHODWHGULVNVDQGRSSRUWXQLWLHVDVZHOODVVXVWDLQHGSUDJPDWLFDFWLRQV 7KHJOREDOHQHUJ\V\VWHPLVLQWKHPLGGOHRID UHVWUXFWXULQJRQERWKWKHVXSSO\DQGGHPDQG VLGHV2QWKHVXSSO\VLGHWKHWUDQVLWLRQIURP IRVVLOIXHOVWRFOHDQHQHUJ\LVVSHHGLQJXS2Q WKHGHPDQGVLGHHOHFWULŀFDWLRQLVGHHSHQLQJ DQGDOWHULQJHQGXVHHQHUJ\PL[HV7KH LQWHUDFWLRQEHWZHHQWKHVHVWUXFWXUDOVKLIWV LVGULYLQJWKHHOHFWULFV\VWHP VRSHUDWLRQDO SDUDGLJPDZD\IURPWKHWUDGLWLRQDO JHQHUDWLRQIROORZLQJORDGVPRGHOZKHUH SRZHUJHQHUDWLRQSDVVLYHO\UHDFWVWRGHPDQG WRZDUGWKHVRXUFHJULGORDGVWRUDJHPRGHO $PLGWKLVLUUHYHUVLEOHWUHQGFDUERQQHXWUDOLW\ KDVEHFRPHWKHLQHYLWDEOHGLUHFWLRQIRU UHVKDSLQJWKHJOREDOHQHUJ\V\VWHP 3URJUHVVRYHUYLHZ 2XUGHFDUERQL]DWLRQHłRUWVDUHDQFKRUHGLQWHFK GULYHQHŃFLHQF\UHVRXUFHWUDQVLWLRQDQGVWDNHKROGHU HFRV\VWHPFRRUGLQDWLRQ6LQFHDQQRXQFLQJRXUFDUERQ QHXWUDOLW\JRDOVLQZHKDYHPDGHFRQWLQXRXV SURJUHVV ,Q)<ZHFRQVLVWHQWO\UHŀQHGRXUFDUERQGDWD PDQDJHPHQWV\VWHPWRDFKLHYHG\QDPLFPRQLWRULQJ RQRXUGHFDUERQL]DWLRQSURJUHVV/HYHUDJLQJWKLV FDSDELOLW\ZHVHWDQQXDOHPLVVLRQVWDUJHWVIRUWKH *URXSDQGRXUEXVLQHVVHV(PLVVLRQVPDQDJHPHQW UHTXLUHPHQWVDUHHPEHGGHGLQWRNH\RSHUDWLRQV LGHQWLŀHGYLDPDWHULDOLW\DVVHVVPHQWVZLWKSURJUHVV UHJXODUO\WUDFNHGDQGGLVFORVHG)RUUHVLGXDOHPLVVLRQV WKDWFDQQRWEHHOLPLQDWHGZLWKGLUHFWUHGXFWLRQHłRUWV ZHDFWSURDFWLYHO\WREXLOGDUHVHUYHRIFDUERQFUHGLWV 7KLVLVVXSSRUWHGE\DVFLHQFHEDVHGDVVHVVPHQWV\VWHP WKDWIDFWRUVLQSURMHFWDWWULEXWHVVXFKDVDGGLWLRQDOLW\ PHDVXUHPHQWDFFXUDF\SHUPDQHQFHDQGYLQWDJH WRJXLGHWKHVHOHFWLRQDQGUHWLUHPHQWRIKLJKTXDOLW\ FDUERQFUHGLWVIURPERWKUHPRYDOVDQGRłVHWV )XUWKHUPRUHZHDGYDQFHWKHGHYHORSPHQWRI6FRSH DFFRXQWLQJVWDQGDUGVDQGFRQVLVWHQWO\H[SORUHKRZ GLJLWDOWHFKQRORJLHVDQGLQQRYDWLYHEXVLQHVVPRGHOVFDQ SRWHQWLDOO\DFFHOHUDWHDVRFLHW\ZLGHJUHHQWUDQVLWLRQ $,LPSDFWVERWKWKHVXSSO\DQGGHPDQGVLGHVGXULQJWKH HQHUJ\WUDQVLWLRQ$OWKRXJKWKHH[SDQVLRQRIFRPSXWLQJ SRZHUGULYHVXSHOHFWULFLW\GHPDQG$,SURYLGHV XQSUHFHGHQWHGWHFKQLFDOFDSDELOLWLHVIRUŁH[LEOHORDG VFKHGXOLQJDQGUHDOWLPHVXSSO\GHPDQGPDWFKLQJ7KLV KDVWUDQVIRUPHGWKHVRXUFHJULGORDGVWRUDJHPRGHO IURPDFRQFHSWXDOIUDPHZRUNLQWRDQLPSOHPHQWDEOH V\VWHPVROXWLRQ2QEDODQFH$,VHUYHVDVDFULWLFDO HQDEOHUIRUWKHHQHUJ\WUDQVLWLRQ:LWKRXW$,GULYHQ LQWHOOLJHQWVFKHGXOLQJDQGV\VWHPRSWLPL]DWLRQLWZRXOG EHGLŃFXOWWRHŃFLHQWO\XWLOL]HFOHDQHOHFWULFLW\DWVFDOHE\ GHHSO\LQWHJUDWLQJLWZLWKSRZHUJULGV :HKDYHFKRVHQWREHDQDFWLYHSDUWLFLSDQWLQWKHHQHUJ\ WUDQVLWLRQ:LWKLQRXURZQRSHUDWLRQVZHHPEHGJUHHQ ORZFDUERQSULQFLSOHVLQWREXVLQHVVGHYHORSPHQW VWHDGLO\DGYDQFLQJWRZDUGRXUFDUERQQHXWUDOLW\JRDOV )RUEURDGHUYDOXHFUHDWLRQRXU$,GULYHQVWUDWHJ\ DPSOLŀHVRXUJUHHQLPSDFW%\GHHSO\LQWHJUDWLQJ$, LQWRRXUEXVLQHVVDQGGHOLYHULQJ$,FDSDELOLWLHVWRRXU FXVWRPHUVZHIDFLOLWDWHPRUHSUHFLVHHQHUJ\HŃFLHQF\ PDQDJHPHQWDQGHPLVVLRQVUHGXFWLRQ([DPSOHV LQFOXGH$PDS V$,UHFRPPHQGDWLRQIHDWXUHIRUORZHULQJ HPLVVLRQVIURPPRELOLW\DQGɹɽLEDED&ORXG VVROXWLRQ IRURSWLPL]LQJHQHUJ\HŃFLHQF\LQLQGXVWULDOVHWWLQJV:H EHOLHYHWKDWDQ$,GULYHQJUHHQDQGORZFDUERQɹɽLEDED FDQEXLOGDPRUHVXVWDLQDEOHIXWXUHIRUERWKRXUVHOYHV DQGVRFLHW\DWODUJH ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 35 ↗

Slide 36 — ɹɽLEDED VSDWKZD\VWRZDUGFDUERQQHXWUDOLW\

$GYDQFLQJFDUERQQHXWUDOLW\ 3URWHFWLQJWKH(QYLURQPHQW 8QLWPLOOLRQ0W&2H 6FRSH 6FRSH 6FRSH %XVLQHVV JURZWK 3URGXFWGULYHQ HŃFLHQF\ %XLOGLQJD VWDNHKROGHU HFRV\VWHP &KDQJLQJWKHZD\ ZHXVHUHVRXUFHV ,PSURYLQJHŃFLHQF\ WKURXJKWHFKQRORJLHV 2SHUDWLRQDO HŃFLHQF\ (OHFWULŀFDWLRQ &OHDQ HQHUJ\ /RZFDUERQ UHVRXUFHV 6WDNHKROGHU HFRV\VWHP &DUERQUHPRYDOV FDUERQRłVHWV )< )< )< 6FRSHDQG &DUERQQHXWUDOLW\ 6FRSH $UHGXFWLRQLQ WKHQHWHPLVVLRQV LQWHQVLW\DV FRPSDUHGWR )< )< 1HWHPLVVLRQVEHWZHHQ)<DQG)< &DUERQQHXWUDOLW\ JRDOVE\ 3DWKZD\VWRZDUGFDUERQQHXWUDOLW\ ɹɽLEDED VSDWKZD\VWRZDUGFDUERQQHXWUDOLW\ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 36 ↗

Slide 37 —

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ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 37 ↗

Slide 38 — (PLVVLRQVUHGXFWLRQIURP

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ŃFLHQF\ 38(LVWKHFRUHPHWULFIRUHYDOXDWLQJWKHHQHUJ\HŃFLHQF\RIGDWDFHQWHUV,QWKH LQWHOOLJHQWFRPSXWLQJHUD$,WUDLQLQJDQGLQIHUHQFHKDYHGUDPDWLFDOO\HOHYDWHGWKHSRZHU GHQVLW\RIFKLSVVHUYHUVDQGUDFNVVLJQLŀFDQWO\FRPSOLFDWLQJWKHUPDOPDQDJHPHQWDQG PDNLQJ38(RSWLPL]DWLRQIDUPRUHVWUHVVIXOWKDQLQWKHWUDGLWLRQDOFORXGFRPSXWLQJHUD ɹɽLEDED&ORXGERRVWVHŃFLHQF\YLDDV\QHUJ\RISURGXFWUHVWUXFWXULQJDQGJUDQXODU RSHUDWLRQVWRVWDELOL]H38(DPLGEXVLQHVVH[SDQVLRQ,Q)<WKHDQQXDODYHUDJH 38(DFURVVRXUVHOIEXLOWGDWDFHQWHUVGURSSHGIURPWRVXVWDLQLQJDOHDGLQJ SRVLWLRQDFURVV$VLD*LYHQWKHPDVVLYHVFDOHRIRXUGDWDFHQWHURSHUDWLRQVDVHHPLQJO\ PDUJLQDO38(UHGXFWLRQRILVDOUHDG\DQHŃFLHQF\JDLQWKDWWUDQVODWHVLQWRWKH DYRLGDQFHRIVXEVWDQWLDOHOHFWULFLW\FRQVXPSWLRQ $QQXDODYHUDJH38(DFURVVɹɽLEDED&ORXG VVHOIEXLOWGDWDFHQWHUV $SU 0DU )< $SU 0DU )< $SU 0DU )< $SU 0DU )< $SU 0DU )< (PLVVLRQVUHGXFWLRQIURPRXURZQRSHUDWLRQV6FRSHVDQG $SU 0DU )< $SU 0DU )< $SU 0DU )< $SU 0DU )< $SU 0DU )< 8QLW0W&2H (PLVVLRQVUHGXFWLRQIURPWKHYDOXHFKDLQ6FRSH 8QLW0W&2H 3URJUHVVLQGHFDUERQL]DWLRQ $SU 0DU )< $SU 0DU )< $SU 0DU )< $SU 0DU )< 8S 8S ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 38 ↗

Slide 39 — $GYDQFLQJFDUERQQHXWUDOLW\

$GYDQFLQJFDUERQQHXWUDOLW\ 3URWHFWLQJWKH(QYLURQPHQW 2QFHDGDWDFHQWHUJRHVOLYHLWVHQHUJ\HŃFLHQF\LVQRW VWDWLF6XVWDLQLQJDKLJKOHYHORIHQHUJ\HŃFLHQF\UHOLHV KHDYLO\RQJUDQXODUPDQDJHPHQWGXULQJRSHUDWLRQV )RUVHOIEXLOWGDWDFHQWHUVLQVWDEOHRSHUDWLRQVZHVHW DQQXDO38(WDUJHWVZKLFKGULYHFRQVLVWHQWHłRUWVWR WDSLQWRWKHHQHUJ\VDYLQJSRWHQWLDORIRXUH[LVWLQJ LQIUDVWUXFWXUH:LWKLQWKLVIUDPHZRUNJUDQXODU RSHUDWLRQVVHUYHDVRXUSULPDU\OHYHUIRUHŃFLHQF\ JDLQV:HHPEHGDQLQWHOOLJHQWDOJRULWKPLQWRGDLO\ RSHUDWLRQDQGPDLQWHQDQFH2 0XWLOL]LQJ$, SRZHUHGORDGRSWLPL]DWLRQDQGFRROLQJFRQWUROWRORZHU RSHUDWLRQDOHQHUJ\FRQVXPSWLRQ$VRI0DUFK WKLVVROXWLRQKDGEHHQLPSOHPHQWHGDFURVVVHUYHU URRPVDWDFXPXODWLYHWRWDORIVHOIEXLOWGDWDFHQWHUV )XUWKHUPRUHɹɽ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ɹɽLEDED&ORXG VGDWD FHQWHUVGHOLYHUHG*-RIWKHUPDOHQHUJ\WR=KDQJEHL &RXQW\+HEHL 2SHUDWLRQDOHŃFLHQF\ 3URGXFWGULYHQHŃ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ŃFLHQF\DQGGHSOR\PHQWDJLOLW\EXW DOVRUHGXFHVHPLVVLRQVIURPRQVLWHFRQVWUXFWLRQDFWLYLWLHV 3URGXFWGULYHQHŃFLHQF\ $GDWDFHQWHU VHŃ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ɹɽLEDED&ORXGLVGULYLQJWKHGHSOR\PHQWRI+9'&SRZHUVXSSO\ DUFKLWHFWXUHVDWDEURDGVFDOH7KLVVLJQLŀFDQWO\VLPSOLŀHVVWHSGRZQVDQGFRQYHUVLRQVGXULQJ SRZHUWUDQVPLVVLRQUHGXFLQJHQHUJ\ORVVDQGZDVWHKHDWDWWKHVRXUFH2XUODWHVWJHQHUDWLRQRI GDWDFHQWHUVLVQRZIXOO\FRPSDWLEOHZLWK+9'&SRZHUVXSSO\DUFKLWHFWXUHVXSWR9 8SJUDGLQJWKHSRZHUVXSSO\DUFKLWHFWXUH ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 39 ↗

Slide 40 —

$GYDQFLQJFDUERQQHXWUDOLW\ 3URWHFWLQJWKH(QYLURQPHQW 9DOXHFKDLQV\QHUJ\ 7KURXJKLWVVXSSOLHUPDQDJHPHQWV\VWHPɹɽLEDED&ORXGH[WHQGVLWVVWDQGDUGVIRU FOHDQHOHFWULFLW\DQGHQHUJ\HŃFLHQF\LQWRWKHYDOXHFKDLQ :HDUHSURJUHVVLYHO\VHWWLQJUHTXLUHPHQWVIRUVWHSSHGWDUJHWVWRLQFUHDVHWKH SURSRUWLRQRIFOHDQHOHFWULFLW\XVDJHLQRXUOHDVHGGDWDFHQWHUV)XUWKHUPRUHZH HPEHGFODXVHVIRU38(OLQNHGLQFHQWLYHVDQGFRQVWUDLQWVLQWRVXSSOLHUFRQWUDFWV 7KHYDVWPDMRULW\RIRXUOHDVHGGDWDFHQWHUVLQ&KLQDDUHQRZVXEMHFWWR38( SHUIRUPDQFHDVVHVVPHQW 7RVWUHQJWKHQFORVHGORRSPDQDJHPHQWɹɽ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łRUWVDUHFRPSOHPHQWHGE\WKH SKDVHLQRI,*JUHHQŀUHVXSSUHVVLRQV\VWHPVDFURVVRXUOHDVHGGDWDFHQWHUV ,Q)<WKHDQQXDODYHUDJH38(DFURVVɹɽ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ńLQHUHWDLO2XUYDULHG EXVLQHVVHVIDFHGLVWLQFWORJLVWLFVUHTXLUHPHQWV ZKLFKLVZK\ZHKDYHEXLOWDYDVWPXOWLWLHU ORJLVWLFVQHWZRUN&DLQLDRIXUWKHUDPSOLŀHVWKH UHDFKDQGFRPSOH[LW\RIWKLVQHWZRUNE\RSHQLQJ XSLWVLQWHUQDOVROXWLRQVWRH[WHUQDOFXVWRPHUV /RJLVWLFVVFHQDULRVZLWKDPDWHULDOLPSDFWRQRXU HPLVVLRQVLQ6FRSHVDQGLQFOXGHORJLVWLFV VHUYLFHVIXOŀOOHGRUSURFXUHGE\ɹɽ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ŀOHɹɽLEDED&ORXGSOHGJHVWRSRZHURILWVFORXGFRPSXWLQJRSHUDWLRQVZLWK FOHDQHOHFWULFLW\E\ 7RIXOŀOOWKLVSOHGJHZHDGRSWDWZRSURQJHGVWUDWHJ\2QHRILWVSURQJVIRFXVHVRQWKH FRQVLVWHQWGHSOR\PHQWRIGLVWULEXWHGVRODU39V\VWHPVWRJHQHUDWHUHQHZDEOHHQHUJ\RQVLWH 7KHRWKHUOHYHUDJHVPDUNHWEDVHGPHFKDQLVPVVXFKDVDQQXDOSRZHUWUDGLQJDQGORQJ WHUPSRZHUSXUFKDVHDJUHHPHQWV33$VWRSULRULWL]HWKHFRQVXPSWLRQRIFOHDQHOHFWULFLW\ DYDLODEOHZLWKLQSRZHUJULGVZKHUHZHRSHUDWH7KLVDSSURDFKFKDQQHOVRXUGHPDQGWR FDWDO\]HLQYHVWPHQWDQGFRQVWUXFWLRQLQWKHŀHOGRIFOHDQHQHUJ\LQIUDVWUXFWXUH,Q)< FOHDQHOHFWULFLW\DFFRXQWHGIRURIWKHHOHFWULFLW\PL[DWɹɽLEDED&ORXG VVHOIEXLOWGDWD FHQWHUVZKLFKSXWXVLQDQLQGXVWU\ZLGHOHDGLQJSRVLWLRQDFURVV&KLQD1RWDEO\WKRVHORFDWHG LQ*XDQJGRQJ-LDQJVXDQG6LFKXDQDUHDOUHDG\SRZHUHGE\FOHDQHOHFWULFLW\ ,QDGGLWLRQWRWUDQVIRUPLQJRXUHOHFWULFLW\PL[ZHHPEHGORZFDUERQSULQFLSOHVLQWREURDGHU RSHUDWLRQVɹɽLEDED&ORXGLVGHSOR\LQJ,*JUHHQŀUHVXSSUHVVLRQV\VWHPVDFURVVLWVVHOI EXLOWGDWDFHQWHUVWRUHSODFHWUDGLWLRQDOKHSWDŁXRURSURSDQHŀUHH[WLQJXLVKHUV7RSXWWKLV LQSHUVSHFWLYHKHSWDŁXRURSURSDQHKDVDJOREDOZDUPLQJSRWHQWLDO*:3YDOXHRI ZKHUHDV,*LVFORVHWRRQWKLVPHWULF 6KDUHRIFOHDQHOHFWULFLW\DWɹɽLEDED&ORXG VVHO IEXLOWGDWDFHQWHUV $SU 0DU )< $SU 0DU )< $SU 0DU )< $SU 0DU )< $SU 0DU )< VKDUHRIFOHDQHOHFWULFLW\DWRXU OHDVHGGDWDFHQWHUVZRUOGZLGH ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 40 ↗

Slide 41 — 2UGHUSURFHVVLQJ

$GYDQFLQJFDUERQQHXWUDOLW\ 3URWHFWLQJWKH(QYLURQPHQW 2UGHUSURFHVVLQJLVWKHOLQFKSLQRIGHFDUERQL]DWLRQDWWKHVRXUFH0RUHIUDJPHQWHG RUGHUVQHFHVVLWDWHKLJKHUGHOLYHU\IUHTXHQFLHVLQKHUHQWO\GULYLQJXSHPLVVLRQV:KHQ ZHKDYHPRUHŁH[LELOLW\WRRUFKHVWUDWHRUGHUŁRZVZHFDQFRQVROLGDWHRUGHUVDW IXOŀOOPHQWQRGHVXQGHUWKHFRQWURORIRXUEXVLQHVVHVFRPELQLQJVHSDUDWHVKLSPHQWV LQWRDVLQJOHGHOLYHU\WRFXWHPLVVLRQVIURPUHGXQGDQWWUDQVSRUWDWLRQ7KLVVWUDWHJ\KDV EHHQUROOHGRXWDFURVVPXOWLSOHEXVLQHVVHV,Q)<$OL([SUHVVDGYDQFHGIURPVLQJOH PHUFKDQWWRPXOWLPHUFKDQWFRQVROLGDWLRQZLWKLQWKHVDPHZDUHKRXVH7KLVDSSURDFK DOORZVSURGXFWVIURPGLłHUHQWPHUFKDQWVWREHSDFNHGWRJHWKHUUHGXFLQJWKHWRWDO TXDQWLW\RISDFNDJHVLQOLQHKDXOWUDQVSRUWDWLRQ 2UGHUSURFHVVLQJ ,PSURYLQJHQHUJ\HŃFLHQF\DQGRSWLPL]LQJWKHHQHUJ\PL[DUHWKHWZRSULPDU\OHYHUV IRUGHFDUERQL]DWLRQLQZDUHKRXVLQJ:HGHSOR\VPDUWWHUPLQDOVDFURVVRXUZDUHKRXVHV WRHQDEOHGDWDGULYHQUHDOWLPHPRQLWRULQJDQGJUDQXODUPDQDJHPHQWIRUHQHUJ\ FRQVXPSWLRQ)XUWKHUPRUHZHGHSOR\GLVWULEXWHGVRODU39V\VWHPVDQGSDUWLFLSDWH LQPDUNHWEDVHGWUDGLQJIRUFOHDQHOHFWULFLW\WRGULYHWKHHQHUJ\WUDQVLWLRQRIRXU ZDUHKRXVLQJRSHUDWLRQVDWWKHVRXUFH$VRI0DUFKWKHWRWDOLQVWDOOHGFDSDFLW\ RIJULGFRQQHFWHGVRODU39V\VWHPVDFURVVRXUZDUHKRXVHVZDV0:WULSOHWKH SUHYLRXVŀVFDO\HDU VŀJXUHDQGFDSDEOHRIJHQHUDWLQJHQRXJKHOHFWULFLW\DQQXDOO\ WRSRZHUDERXWKRXVHKROGVLQ&KLQDIRUDQDYHUDJH\HDU2XUSDUWLFLSDWLRQLQ PDUNHWEDVHGWUDGLQJIRUFOHDQHOHFWULFLW\LQYROYHVPXOWLSOHEXVLQHVVHVDQGORZHUV HOHFWULFLW\UHODWHGHPLVVLRQVIURPZDUHKRXVLQJ :DUHKRXVLQJ )RUPRUHGHWDLOVUHIHUWR 6HFWLRQ&RQVHUYLQJDQGUHVWRULQJQDWXUHLQ&KDSWHU 7KHXVHRISDFNDJLQJPDWHULDOVVSDQVWKHHQWLUHORJLVWLFVFKDLQIURPSURGXFWVKLSSLQJ WRŀ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ŀFDWLRQLVDNH\PHDVXUHIRUFXWWLQJ YHKLFXODUHPLVVLRQV:HDUHH[SDQGLQJWKHXVHRIHOHFWULFYHKLFOHVIRUVHOI RZQHGORJLVWLFVŁHHWVDQGVKRUWKDXOVFHQDULRV,Q)<ZHGHSOR\HG DXWRQRPRXVHOHFWULFYHKLFOHVIRUXUEDQGHOLYHU\DQGIXOŀOOHGRYHU PLOOLRQSDFNDJHVZLWKWKLVŁHHW&URVVERUGHUWUDQVSRUWDWLRQLVPRUH GLŃFXOWWRGHFDUERQL]HWKDQGRPHVWLFGHOLYHU\%DODQFLQJWUDQVSRUWDWLRQ HŃFLHQF\ZLWKHQYLURQPHQWDOLPSDFW$OL([SUHVVKDVGHYHORSHGD PXOWLPRGDOQHWZRUNVSDQQLQJVHDODQGDLUDQGUDLOLQVHDUFKRIORZHU FDUERQVROXWLRQVIRUFURVVERUGHUWUDQVSRUWDWLRQ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 41 ↗

Slide 42 — 6XVWDLQDEOHUHWDLO

$GYDQFLQJFDUERQQHXWUDOLW\ 3URWHFWLQJWKH(QYLURQPHQW 6XVWDLQDEOHUHWDLO )UHVKLSSRRXUQHZUHWDLOSODWIRUPIRU JURFHULHVDQGIUHVKIRRGVLVGHGLFDWHGWR EXLOGLQJVXVWDLQDEOHVWRUHHQYLURQPHQWV DQGLPSURYLQJFRQVXPHUH[SHULHQFH 7HFKGULYHQHŃFLHQF\ 5HVRXUFHWUDQVLWLRQ )UHVKLSSRKDVHVWDEOLVKHGDGHGLFDWHGWHDPDQGDGLJLWDOV\VWHPIRUHQHUJ\ PDQDJHPHQWGULYLQJJUDQXODURSHUDWLRQVZLWKRUJDQL]DWLRQDOVXSSRUWDQGGDWD FDSDELOLWLHV7KHEXVLQHVVOHYHUDJHVWDUJHWHGWHFKQLFDOXSJUDGHVDQGRSHUDWLRQDO LPSURYHPHQWVWRGHFDUERQL]HLWVPRVWHQHUJ\LQWHQVLYHSURFHVVHV )UHVKLSSRKDVLGHQWLŀHGWKUHHSULPDU\VRXUFHVRIHQHUJ\FRQVXPSWLRQFROGFKDLQ RSHUDWLRQVLQVWRUHOLJKWLQJDQGOLYHVHDIRRGVWRUDJH7KHEXVLQHVVKDVVSHFLŀF PHDVXUHVWDUJHWLQJHDFKRIWKHVH)RUFROGFKDLQRSHUDWLRQVV\VWHPVDUHEHLQJ XSJUDGHGZLWKG\QDPLFWHPSHUDWXUHFRQWUROWRDFKLHYHSUHFLVHHQHUJ\FRQVHUYDWLRQ ZLWKRXWLPSDFWLQJSURGXFWIUHVKQHVV)RULQVWRUHOLJKWLQJVPDUWFRQWUROIXQFWLRQDOLW\ KDVEHHQGHSOR\HGRQDIXOOVFDOHWRPDQDJHOLJKWLQJKRXUVDQGWKHUHE\DYRLG HOHFWULFLW\ZDVWDJH)RUOLYHVHDIRRGVWRUDJHZDWHUUHFLUFXODWLRQV\VWHPVDUHXVHGWR SXULI\ZDWHUDWWKHEDFNHQGDQGUHGXFHWKHQHHGIRUIUHVKLQWDNH7KLVPD[LPL]HVWKH XVHRIFRQVWDQWWHPSHUDWXUHFLUFXODWHGZDWHUDQGDYRLGVFRQVXPLQJH[WUDHOHFWULFLW\ WRUHSHDWHGO\KHDWRUFRROLQFRPLQJZDWHU )UHVKLSSRDGYDQFHVLWVHQHUJ\WUDQVLWLRQE\IRFXVLQJRQHOHFWULŀFDWLRQDQGFOHDQHOHFWULFLW\ XVH,QLWVQHZVWRUHVDOOHOHFWULFV\VWHPVDUHXVHGIRUIRRGSUHSDUDWLRQWRSKDVHRXWQDWXUDO JDV7RH[SDQGWKHXVHRI]HURFDUERQHQHUJ\WKHEXVLQHVVLQVWDOOVGLVWULEXWHGVRODU39 V\VWHPVIRUZDUHKRXVHVDQGHQFRXUDJHVLWVVWRUHVWRSDUWLFLSDWHLQPDUNHWEDVHGWUDGLQJIRU FOHDQHOHFWULFLW\ 3ULPDU\VRXUFHVRI HQHUJ\FRQVXPSWLRQ &ROGFKDLQ RSHUDWLRQV ,QVWRUH OLJKWLQJ /LYHVHDIRRG VWRUDJH ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 42 ↗

Slide 43 — 6XVWDLQDEOHFDPSXVHV

$GYDQFLQJFDUERQQHXWUDOLW\ 3URWHFWLQJWKH(QYLURQPHQW 6XVWDLQDEOHFDPSXVHV 2XUFDPSXVHVDUHWKHSULPDU\KXEVIRU GDLO\ZRUNDQGYLVLWRUH[SHULHQFH7KHLU HQYLURQPHQWDOSHUIRUPDQFHGLUHFWO\ VKDSHVKRZYDULRXVVWDNHKROGHUVSHUFHLYH RXUFRPPLWPHQWWRVXVWDLQDELOLW\ :HPDQDJHRXUGLVWULEXWHGFDPSXVHV XQGHUDXQLŀHGHQYLURQPHQWDOJRYHUQDQFH IUDPHZRUNFHQWHUHGRQPDQDJHPHQW V\VWHPVJUHHQFRQVWUXFWLRQDQGJUHHQ RSHUDWLRQV8QGHUWKLVIUDPHZRUNWKH,62 (QYLURQPHQWDO0DQDJHPHQW6\VWHP HQDEOHVXVWRV\VWHPDWLFDOO\LGHQWLI\WKH HQYLURQPHQWDOIDFWRUVRIHDFKFDPSXV DQGGULYHFRQWLQXRXVLPSURYHPHQWV$V RI0DUFKVHYHQRIRXUFDPSXVHV KDGDFKLHYHGWKLVFHUWLŀFDWLRQDIWHU SDVVLQJLQWHUQDODQGH[WHUQDODXGLWV 'HVLJQDQGFRQVWUXFWLRQRIJUHHQFDPSXVHV $EXLOGLQJ VJUHHQSHUIRUPDQFHLVODUJHO\GLFWDWHGE\GHFLVLRQVPDGH GXULQJWKHGHVLJQVWDJH2QFHLWLVFRQVWUXFWHGWKHUHLVPXFKOHVV ŁH[LELOLW\WRDOWHULWVHOHFWURPHFKDQLFDOV\VWHPVDQGVSDWLDOVWUXFWXUHV FUHDWLQJLQKHUHQWERWWOHQHFNVIRUSRVWRFFXSDQF\RSWLPL]DWLRQ 5HFRJQL]LQJWKLVZHGHHSO\HPEHG(6*SULQFLSOHVDFURVVWKHSODQQLQJ GHVLJQDQGFRQVWUXFWLRQVWDJHVRIRXUFDPSXVHV$VRI0DUFK RXUFDPSXVHVKDGQHDUO\VTXDUHPHWHUVRIŁRRUDUHDFHUWLŀHG E\/(('DWWKH*ROGOHYHORUDERYHXSIURPD\HDUHDUOLHU7KLVODLG WKHSK\VLFDOJURXQGZRUNIRURSHUDWLRQDOGHFDUERQL]DWLRQ *UHHQRSHUDWLRQV :HUHJXODUO\FRQGXFWHQHUJ\DVVHVVPHQWVDQG DXGLWVWRLGHQWLI\RSSRUWXQLWLHVIRUHPLVVLRQV UHGXFWLRQ7RGULYHGHFDUERQL]DWLRQZHUHPDLQ FRPPLWWHGWRWKHVHWKUHHDSSURDFKHVWHFK GULYHQHŃFLHQF\UHVRXUFHWUDQVLWLRQDQG VWDNHKROGHUHFRV\VWHPFRRUGLQDWLRQ,Q)< HPLVVLRQVSHUXQLWRIDUHDDFURVVRXUVHOIXVHG RŃFHFDPSXVHVIHOO\HDURQ\HDUZLWK VL[FDPSXVHVFHUWLŀHGDVFDUERQQHXWUDO /(('FHUWLŀHGFDPSXVHV Ȱ %XLOGLQJ%LQ:DQJMLQJ%HLMLQJ Ȱ ɹɽLEDED&HQWHU+RQJTLDR6KDQJKDL Ȱ ɹɽLEDED&HQWHU*XDQJ]KRX /(('*ROG Ȱ ;L[L&DPSXV3DUN$ Ȱ ɹɽLEDED'LJLWDO(FRV\VWHP,QQRYDWLRQ3DUN Ȱ 4LQFKHQJOL Ȱ )O\=RR+RWHO /(('Y3ODWLQXPIRU H[LVWLQJFDPSXVHV Ȱ ;L[L&DPSXV3DUN&LQ+DQJ]KRX Ȱ ;XKXL%LQMLDQJ3DUN=RQH'LQ6KDQJKDL Ȱ %XLOGLQJ1DQKX)XWXUH6FLHQFH 3DUNLQ+DQJ]KRX Ȱ %HLMLQJ&KDR\DQJ6FLHQFH 7HFKQRORJ\3DUN /(('Y*ROG 1HZ 1HZ Ȱ ɹɽLEDED&HQWHU*XDQJ]KRX Ȱ ɹɽLEDED&HQWHU6KHQ]KHQ Ȱ ;L[L&DPSXV3DUN$LQ+DQJ]KRX Ȱ %LQMLDQJ3DUNLQ+DQJ]KRX Ȱ ;XKXL%LQMLDQJ3DUN=RQH'LQ 6KDQJKDL Ȱ ;XKXL%LQMLDQJ3DUN=RQH;LQ 6KDQJKDL &DUERQQHXWUDOFDPSXVHV 1HZ 1HZ Ȱ ;L[L&DPSXV3DUN$LQ+DQJ]KRX Ȱ ɹɽLEDED'LJLWDO(FRV\VWHP,QQRYDWLRQ 3DUNLQ+DQJ]KRX Ȱ ;L[L&DPSXV3DUN&LQ+DQJ]KRX Ȱ &ORXG9DOOH\&DPSXVLQ+DQJ]KRX Ȱ ɹɽLEDED&HQWHU*XDQJ]KRX Ȱ ;XKXL%LQMLDQJ3DUN=RQH'LQ6KDQJKDL Ȱ %HLMLQJ&KDR\DQJ6FLHQFH 7HFKQRORJ\3DUN ,62FHUWLŀHGFDPSXVHV 1HZ 1HZ 1HZ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 43 ↗

Slide 44 — $GYDQFLQJFDUERQQHXWUDOLW\

$GYDQFLQJFDUERQQHXWUDOLW\ 3URWHFWLQJWKH(QYLURQPHQW 5HVRXUFHWUDQVLWLRQ (QJDJLQJHPSOR\HHVLQGHFDUERQL]DWLRQ 7HFKGULYHQHŃFLHQF\ +HDWLQJFRROLQJDQGOLJKWLQJDUHWKHSULPDU\VRXUFHVRIHQHUJ\ FRQVXPSWLRQRQRXUFDPSXVHV:LWKDIRFXVRQ5 'DQGLQYHVWPHQWLQ HQHUJ\VDYLQJWHFKQRORJLHVZHDUHLQWHJUDWLQJ$,LQWRFDPSXVRSHUDWLRQV WRKDUQHVVWKHV\QHUJ\EHWZHHQLQWHOOLJHQFHDQGVXVWDLQDELOLW\,Q)< RXU$,GULYHQHQHUJ\PDQDJHPHQWV\VWHPWKH(TXLSPHQW%UDLQKHOSHG UHGXFHHPLVVLRQVE\WRQV $,GULYHQFDPSXVRSHUDWLRQVUHTXLUHWKHIRXQGDWLRQDOKDUGZDUHWREH LQKHUHQWO\HŃFLHQWDQGLQWHOOLJHQW,Q)<ZHXSJUDGHGWKHFHQWUDODLU FRQGLWLRQLQJV\VWHPDQGLQWURGXFHGPRUHHŃFLHQWERLOHUXQLWVZKLOHDOVR GHSOR\LQJPLOOLPHWHUZDYHUDGDUVHQVRUVLQFRQIHUHQFHURRPVWRSUHFLVHO\ PRQLWRUHQYLURQPHQWDOFRQGLWLRQV%\DVVLJQLQJDGLJLWDOLGHQWLW\WRHDFK HQHUJ\FRQVXPLQJXQLWZHPDGHLWXQLTXHO\LGHQWLŀDEOHDQGLQGHSHQGHQWO\ FRQWUROODEOH)XUWKHUPRUHZHODXQFKHGDQDVVHWKHDOWKDVVHVVPHQW PRGXOHWRUHJXODUO\H[DPLQHWKHFRQGLWLRQPDQDJHPHQWDQGRSHUDWLQJ HQYLURQPHQWVRIKDUGZDUHHQVXULQJWKDWDOOIDFLOLWLHVUXQRSWLPDOO\ $WWKHXSSHUOD\HUWKH(TXLSPHQW%UDLQSHUIRUPVXQLŀHGRUFKHVWUDWLRQ ,Q)<LWVFRQWUROVFRSHH[SDQGHGIURPRFFXSDQF\EDVHGOLJKWLQJ WRVPDUWKHDWLQJDQGFRROLQJ,WEUHDNVGRZQWKHVLORVLQWUDGLWLRQDO KHDWLQJDQGFRROLQJV\VWHPVDJJUHJDWLQJLVRODWHGHQHUJ\FRQVXPLQJ XQLWVLQWRDUHVRXUFHSRRODYDLODEOHIRUFHQWUDOL]HGVFKHGXOLQJ3RZHUHG E\$,WKHV\VWHPIDFWRUVLQUHDOWLPHGDWDVXFKDVRXWGRRUZHDWKHUDQG LQGRRURFFXSDQF\WRPDNHFHQWUDOL]HGVFKHGXOLQJPRUHDGDSWLYHWKHUHE\ LQFUHDVLQJRSHUDWLRQDOŁH[LELOLW\DQGDFKLHYLQJHQYLURQPHQWDOFRPIRUWZLWK PLQLPDOHQHUJ\FRQVXPSWLRQ 7UDQVLWLRQLQJWRDFOHDQHUHQHUJ\PL[LVIXQGDPHQWDOWRGHHS GHFDUERQL]DWLRQDFURVVRXUFDPSXVHV%\GHSOR\LQJGLVWULEXWHG VRODU39V\VWHPVDQGSDUWLFLSDWLQJLQPDUNHWEDVHGWUDGLQJIRUFOHDQ HOHFWULFLW\ZHLQFUHDVHGWKHVKDUHRIFOHDQHOHFWULFLW\RQRXUVHOIXVHG RŃFHFDPSXVHVDQGOHDVHGRXWSURSHUWLHVWRLQ)<2Q WKHGHPDQGVLGHZHDUHDFFHOHUDWLQJWKHHOHFWULŀFDWLRQRIFDPSXV WUDQVSRUWDWLRQZLWKWKHHQWLUHŁHHWRIVKXWWOHEXVHVQRZUXQQLQJRQ HOHFWULFLW\)XUWKHUPRUHZHDUHH[SDQGLQJRXUFKDUJLQJLQIUDVWUXFWXUH $VRI0DUFKRXUFDPSXVHVZHUHHTXLSSHGZLWKFKDUJHUV $PRUHSURIRXQGWUDQVLWLRQLVWRHYROYHRXUFDPSXVHVIURPSDVVLYH SRZHUFRQVXPHUVWRDFWLYHSDUWLFLSDQWVLQJULGEDODQFLQJ,Q)< ZHGHSOR\HGYLUWXDOSRZHUSODQWV933VDFURVVRXUFDPSXVHVLQWKH VRXUFHJULGORDGVWRUDJHPRGHO7KURXJKRXWWKHŀ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ŁH[ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 44 ↗

Slide 45 — 'ULYLQJSODWIRUPHFRV\VWHPGHFDUERQL]DWLRQ

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łVHWHPLVVLRQVIURPRXURZQRSHUDWLRQVDQGWKH\DUHGLVFORVHGLQGHSHQGHQWO\RIHPLVVLRQVIURPRXURZQRSHUDWLRQVDQGWKHYDOXHFKDLQ $VSDUWRIWKHODWHVWUHYLVLRQWKH*UHHQKRXVH*DV3URWRFROLWV$FWLRQVDQG0DUNHW,QVWUXPHQWV:RUNLQJ*URXSKDVIRUPDOO\LQFOXGHGDYRLGHGHPLVVLRQVLQLWVUHYLVHGDJHQGD 6FRSHDYRLGHGHPLVVLRQVV\VWHP 0DMRUDYRLGHGHPLVVLRQVSDWKZD\VRI6FRSH ,Q)<ZHUHOHDVHGWKHɹɽLEDED6FRSH$YRLGHG(PLVVLRQV ,PSOHPHQWDWLRQ*XLGDQFHLQSDUWQHUVKLSZLWKWKH&KLQD (QYLURQPHQWDO8QLWHG&HUWLŀFDWLRQ&HQWHU&(&,WSURYLGHVV\VWHPDWLF JXLGDQFHRQDYRLGHGHPLVVLRQVDFFRXQWLQJLQFOXGLQJERWK UHFDOFXODWLRQDQGUHWURVSHFWLYHFDOFXODWLRQPDQDJHPHQWDVVXUDQFH DQGGLVFORVXUH7KH,PSOHPHQWDWLRQ*XLGDQFHZDVGHYHORSHGLQ DOLJQPHQWZLWK:%&6' V*XLGDQFHRQ$YRLGHG(PLVVLRQV9HUVLRQ WKH*UHHQKRXVH*DV3URWRFRODVZHOODVLQWHUQDWLRQDOVWDQGDUGV VXFKDV,62DQG,62,QWHJUDWLQJWKHVHPHWKRGRORJLHV DQGVWDQGDUGVZLWKWKHSUDFWLFDOH[SHULHQFHRIRXUSODWIRUPVLW GHŀQHVDYDOXHFKDLQSOXVHQDEOLQJHQYLURQPHQWIUDPHZRUNWR VXSSRUWGHFDUERQL]DWLRQDWVFDOHDQGHVWDEOLVKHVJRYHUQDQFHDQG PDQDJHPHQWPHFKDQLVPVDOLJQHGZLWKOHDGLQJFOLPDWHUHODWHG GLVFORVXUHVWDQGDUGV 7RVXSSRUWWKHHłHFWLYHRSHUDWLRQRIRXU6FRSHDYRLGHG HPLVVLRQVPDQDJHPHQWV\VWHPZHFRQWLQXRXVO\GHYHORSIRXU FULWLFDOFDSDELOLWLHVVFLHQWLŀFDFFRXQWLQJGLJLWDOPDQDJHPHQWWKLUG SDUW\DVVXUDQFHDQGHFRV\VWHPFROODERUDWLRQ$VRI0DUFK ZHKDGSDUWLFLSDWHGLQGHFDUERQL]DWLRQUHODWHGVWDQGDUGVDQG LQWHJUDWHGDFFRXQWLQJPHWKRGRORJLHVHPLVVLRQIDFWRUVDQGEXVLQHVV GDWDLQWRRXUGLJLWDOSODWIRUPHQDEOLQJRQOLQHWKLUGSDUW\DVVXUDQFH $VDFRUHPHPEHURIWKH:%&6' V$YRLGHG(PLVVLRQV:RUNLQJ*URXS ZHKDYHSDUWLFLSDWHGLQIRUPXODWLQJDYRLGHGHPLVVLRQVDFFRXQWLQJ PHWKRGRORJLHVIRUWKHGLJLWDOVHFWRUDQGFRKRVWHGWKH,QWHUQDWLRQDO 6XSSO\&KDLQ'HFDUERQL]DWLRQ,QQRYDWLRQ:RUNVKRSGULYLQJHłRUWV WRHVWDEOLVK6FRSHDYRLGHGHPLVVLRQVDVDFRPPRQODQJXDJHIRU TXDQWLŀDEOHDQGYHULŀDEOHFOLPDWHSHUIRUPDQFH &ORXG FRPSXWLQJ 0RELOLW\ 'LJLWDO ZRUNSODFH ,QGXVWU\ /RZFDUERQ SURGXFWV 0RELOLW\ &DWHULQJ 5HXVH UHF\FOLQJ 7KLUGSDUW\ DVVXUDQFH (FRORJLFDO FRFRQVWUXFWLRQ 'LJLWDO PDQDJHPHQW 6FLHQFHEDVHG DVVHVVPHQW (QJDJPHQW (QDEOHPHQW ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 45 ↗

Slide 46 — 3URMHFWVDQGSURJUHVV

$GYDQFLQJFDUERQQHXWUDOLW\ 3URWHFWLQJWKH(QYLURQPHQW 3URMHFWVDQGSURJUHVV ,Q)<JXLGHGE\RXUWZRDYRLGHGHPLVVLRQVVWUDWHJLHVHQDEOHPHQWDQGHQJDJHPHQWZHFRQWLQXHGH[SDQGLQJWKHFRYHUDJHRIH[LVWLQJDYRLGHGHPLVVLRQVSURMHFWVDQGODXQFKHGQHZLQLWLDWLYHV (QDEOHPHQW (QJDJHPHQW :HFRQVLVWHQWO\H[SORUHWKHSRWHQWLDORIGLJLWDO WHFKQRORJLHVLQGULYLQJGHFDUERQL]DWLRQYLD RSWLPDOUHVRXUFHDOORFDWLRQSURFHVVHŃFLHQF\ DQGRSHUDWLRQDOV\QHUJ\ ,Q)<ɹɽLEDED&ORXGFRQWLQXRXVO\HQKDQFHG LWVJUHHQFORXGFRPSXWLQJFDSDELOLWLHVDQG DFKLHYHGPLOOLRQWRQVRIDYRLGHG HPLVVLRQV7KHLQWHOOLJHQWFRQWUROV\VWHPRI ɹɽLEDED&ORXGFRQWLQXHGWRVXSSRUWHQHUJ\ VDYLQJVDQGHŃFLHQF\LPSURYHPHQWVLQHQHUJ\ LQWHQVLYHLQGXVWULHVVXFKDVFHPHQWDQGVROLG ZDVWHWUHDWPHQW $PDS V$,1DYLJDWLRQIHDWXUHVG\QDPLFDOO\ JHQHUDWHURXWHUHFRPPHQGDWLRQVEDVHGRQ UHDOWLPHWUDŃFKLVWRULFDOSDWWHUQVZHDWKHU FRQGLWLRQVDQGXVHUSUHIHUHQFHV%\KHOSLQJXVHUV DYRLGFRQJHVWLRQUHGXFHLGOLQJDQGPLQLPL]H XQQHFHVVDU\GHWRXUVLWORZHUVHPLVVLRQVSHU NLORPHWHUGULYHQ,Q)<WKLVIHDWXUHDFKLHYHG PLOOLRQWRQVRIDYRLGHGHPLVVLRQV 'LQJ7DONSURYLGHVXVHUVZLWKDVXLWHRIRQOLQH FROODERUDWLRQWRROVUDQJLQJIURPYLUWXDO FRQIHUHQFLQJWRSDSHUOHVVRŃFHVROXWLRQVWRKHOS UHGXFHHPLVVLRQVDVVRFLDWHGZLWKEXVLQHVVWUDYHO DQGSDSHUFRQVXPSWLRQ,Q)<'LQJ7DON FRQWULEXWHGWRPLOOLRQWRQVRIDYRLGHG HPLVVLRQV :HXVHSODWIRUPPHFKDQLVPVWRHQFRXUDJHORZFDUERQOLIHVW\OHVDPRQJRXU XVHUV :HFRQWLQXHWRGHYHORSVWDQGDUGVIRUORZFDUERQSURGXFWVRQRXUSODWIRUPV LQFUHDVLQJWKHYLVLELOLW\RIVXFKLWHPVϿSDUWLFXODUO\HQHUJ\HŃFLHQWKRPH DSSOLDQFHVDQGQHZHQHUJ\SURGXFWV,Q)<DYRLGHGHPLVVLRQVUHDFKHG PLOOLRQWRQVRQ7DREDRDQG7PDOOPLOOLRQWRQVRQFRPDQG PLOOLRQWRQVRQɹɽLEDEDFRP :HKDYHEXLOWFRQYHQLHQWDQGVHFXUHSODWIRUPVIRUWKHUHVDOHDQGUHF\FOLQJ RISUHRZQHGJRRGVH[WHQGLQJSURGXFWOLIHF\FOHVDQGUHGXFLQJHPLVVLRQV DVVRFLDWHGZLWKWKHSURGXFWLRQRIQHZLWHPV,Q)<;LDQ\XFRQWULEXWHG WRPLOOLRQWRQVRIDYRLGHGHPLVVLRQVZKLOHɹɽ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ɹɽLEDED6FRSH$YRLGHG(PLVVLRQV5HSRUW ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 46 ↗

Slide 47 — 2YHUPLOOLRQ

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ŀOOHGRUSURFXUHGE\ ɹɽLEDEDIRU&DLQLDR$OL([SUHVVDQG/D]DGD:KLOH VSHFLŀFSDFNDJLQJWUDGHRłVYDU\E\IXOŀOOPHQW VFHQDULRUHGXFLQJRXUSDFNDJLQJIRRWSULQWLVWKH VKDUHGREMHFWLYH&DLQLDRIRULQVWDQFHVODVKHGWKH XVHRISDFNDJLQJPDWHULDOVE\DWRWDORIDURXQG WRQVYLDUHGXFWLRQUHF\FOLQJDQGUHXVHLQ )<7KLVWUDQVODWHGLQWRDURXQGWRQVRI HPLVVLRQVUHGXFWLRQ 5HGXFLQJWKHXVHRISDFNDJLQJ PDWHULDOV :HOHYHUDJHGLJLWDOWHFKQRORJLHVDQGLQWHOOLJHQW DOJRULWKPVWRUHGXFHWKHXVHRISDFNDJLQJ PDWHULDOVWKHUHE\LPSURYLQJPDWHULDOHŃ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ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 47 ↗

Slide 48 — 5HGXFLQJDQGUHF\FOLQJZDVWH

&RQVHUYLQJDQGUHVWRULQJQDWXUH 3URWHFWLQJWKH(QYLURQPHQW 5HGXFLQJDQGUHF\FOLQJZDVWH :LWKLQRXURSHUDWLRQDOERXQGDULHVZDVWHSULPDULO\VWHPVIURPWKHEXVLQHVVDFWLYLWLHVRIɹɽLEDED&ORXGDQG)UHVKLSSRDVZHOODVWKHGDLO\ XVDJHRIRXURŃFHFDPSXVHV2XUDSSURDFKLVWRPLQLPL]HZDVWHJHQHUDWLRQGULYHFLUFXODULW\DQGSURPRWHFRPSOLDQWGLVSRVDO7KLVORZHUV RSHUDWLQJFRVWVDQGDOOHYLDWHVHQYLURQPHQWDOSUHVVXUHDPLGEXVLQHVVJURZWK )UHVKLSSR %DVHGRQWKHSULQFLSOHRIPDWHULDOLW\)UHVKLSSRLGHQWLŀ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ŀWVDQG VRFLDOLPSDFW(QGRISLSHUHVRXUFHXWLOL]DWLRQWDUJHWVNLWFKHQZDVWHDQGSDSHUSDFNDJLQJ .LWFKHQZDVWHLVXOWLPDWHO\KDQGHGRYHUWRORFDOO\GHVLJQDWHGTXDOLŀHGYHQGRUVIRUFRPSOLDQW GLVSRVDOZKLOHSDSHUSDFNDJLQJLVURXWHGWRSDSHUPLOOVIRUUHSXOSLQJYLDSLORWSDUWQHUVKLSV ZLWKVSHFLDOL]HGUHF\FOHUV 2ŃFHFDPSXVHV )RUWKHPRVWSDUWRXURŃFHFDPSXVHVJHQHUDWHKLJKO\KHWHURJHQHRXVPXQLFLSDOZDVWH3UHFLVH PHDVXUHPHQWLVWKHSUHUHTXLVLWHIRUZDVWHPDQDJHPHQW$VRI0DUFKZDVWHPDQDJHPHQW DFURVVRXUVHOIXVHGRŃFHFDPSXVHVZDVIXOO\GLJLWDOL]HGHQDEOLQJXVWRLGHQWLI\PDQDJHPHQW RSSRUWXQLWLHVYLDPHDVXUHPHQWDQGDVVHVVPHQW)RURXURŃFHFDPSXVHVZHKDYHEXLOW LPSOHPHQWDWLRQSODQVFHQWHUHGRQFRUHPHWULFVVXFKDVZDVWHVRUWLQJDFFXUDF\DQGUHVRXUFHUHFRYHU\ UDWHV'UDZLQJRQWKLVSUDFWLFDOH[SHULHQFHZHZHUHGHHSO\LQYROYHGLQWKHIRUPXODWLRQRIWKH7 &$6(YDOXDWLRQ*XLGHOLQHVIRU2ŃFHW\SH=HURZDVWH&DPSXVHVLQ)<WRVHWKLJKHU EHQFKPDUNV,QWKHŀVFDO\HDUZHGURYHHłRUWVWKDWHQDEOHGVL[FDPSXVHVWREHFRPHWKHŀUVW]HUR ZDVWHVLWHVFHUWLŀHGXQGHUWKLVVWDQGDUG &DPSXVZDVWHPDQDJHPHQWXOWLPDWHO\KLQJHVRQEHKDYLRUDOFKDQJHDPRQJHPSOR\HHV:HHQKDQFH WKHLUZDVWHVRUWLQJDZDUHQHVVZLWKFOHDUVLJQDJHDQGWUDLQLQJLQLWLDWLYHVSURPSWLQJWKHPWRSHUIRUP LQLWLDOVRUWLQJSULRUWRVHFRQGDU\VRUWLQJ $VDEHQFKPDUNIRUZDVWHWUHDWPHQWRXU%HLMLQJFDPSXVPDLQWDLQHGUHF\FOLQJIRUNLWFKHQ ZDVWHLQ)<$ELRIHUPHQWDWLRQSURFHVVFRQYHUWVNLWFKHQZDVWHLQWRRUJDQLFIHUWLOL]HUFRPSOHWLQJ DVRUWUHF\FOHXWLOL]HFORVHGORRSWKHUHE\UHGXFLQJWKHDPRXQWRIZDVWHVHQWWRODQGŀOO ɹɽLEDED&ORXG ɹɽLEDED&ORXGKDVIRUPXODWHGDQG UHOHDVHGWKH&ORXG,QWHOOLJHQFH*URXS +D]DUGRXV:DVWH0DQDJHPHQW6\VWHP IRU,'&&DPSXVHVWRHVWDEOLVKDQHQGWR HQGFRQWUROIUDPHZRUNIRUKDUGZDUH7KLV IUDPHZRUNHQVXUHVWKDWRIKD]DUGRXV ZDVWHIURPLWVVHOIEXLOWGDWDFHQWHUVLV KDQGHGRYHUWRTXDOLŀHGYHQGRUVIRU FRPSOLDQWGLVSRVDO ,QDGGLWLRQWRWKHFRPSOLDQWGLVSRVDORI KD]DUGRXVZDVWHɹɽLEDED&ORXGH[WHQGV KDUGZDUHOLIHF\FOHVDQGGULYHVHTXLSPHQW FLUFXODULW\YLDDUHYHUVHVXSSO\FKDLQ7KH EXVLQHVVKDVFRQVWUXFWHGDGDWDV\VWHP ZKHUHHDFKSLHFHRIKDUGZDUHLVDVVLJQHG DQLGHQWLW\7KLVHQDEOHVG\QDPLFHQG WRHQGWUDFNLQJIURPSURFXUHPHQWDQG LQERXQGUHFHLSWWRŀQDOUHWLUHPHQW /HYHUDJLQJWKLVFDSDELOLW\ɹɽLEDED&ORXG KDVHVWDEOLVKHGDFLUFXODULW\HYDOXDWLRQ VWDQGDUGWRWULDJHGHFRPPLVVLRQHG VHUYHUV)XQFWLRQDOVHUYHUVDUHSULRULWL]HG IRUZKROHPDFKLQHUHXVHZKHQEXVLQHVV RSHUDWLRQVQHHGVHUYHUV1RQUHXVDEOH RQHVDUHURXWHGWRD&LUFXODU5HXVH &HQWHUIRUGLDJQRVWLFVUHIXUELVKPHQW WHDUGRZQDQGUHSDLU,Q)<DEDWFK RIVHUYHUVWRWDOLQJPLOOLRQFRUHV UHFHLYHGZDUUDQW\H[WHQVLRQVDQGFRPSRQHQWVKDUYHVWHGIURPVHUYHUVHQWHUHGWKH UHF\FOLQJVWUHDP)RUHTXLSPHQWGHVLJQDWHGIRUVFUDSDFRPSRQHQWOHYHOWHDUGRZQDQG HYDOXDWLRQZRUNŁRZSUHFHGHVŀQDOSURFHVVLQJ)RUVWRUDJHKDUGZDUHUHF\FOLQJYHQGRUV DUHPDQGDWHGWRH[HFXWHSK\VLFDOVKUHGGLQJLQVWULFWFRPSOLDQFHZLWKGDWDVHFXULW\ SURWRFROV6KUHGGHGPDWHULDOVVXFKDVSODVWLFVDQGPHWDOVDUHPRGLŀHGDQGUHLQMHFWHG LQWRWKHPDQXIDFWXULQJF\FOHFORVLQJWKHUHVRXUFHXWLOL]DWLRQORRS 5HYHUVHVXSSO\FKDLQ 6HUYHUV LQXVH ,GOH VHUYHUV 'HFRPPLVVLRQHG XSRQHYDOXDWLRQ 5HXVDEOHFRPSRQHQWV 8QVXLWDEOHIRU VHUYHUOHYHO UHXVH 6XLWDEOHIRUVHUYHUOHYHOUHXVH 1RQUHXVDEOHFRPSRQHQWV &RPSRQHQWV UHXVH 5HF\FOLQJDQG GLVSRVDO ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 48 ↗

Slide 49 —

&RQVHUYLQJDQGUHVWRULQJQDWXUH 3URWHFWLQJWKH(QYLURQPHQW &RQVHUYLQJZDWHUUHVRXUFHV :DWHUXVDJHLQ&KLQDLVUHJLRQDOO\ LPEDODQFHG2XURSHUDWLRQDOQRGHV LQWKHQRUWKIRULQVWDQFHIDFHKLJKHU ZDWHUVWUHVV:HDUHFRPPLWWHGWR ZDWHUHŃFLHQF\DFURVVRXURSHUDWLRQV DQGVWULYHWRUHGXFHDYRLGDEOHZDWHU ORVV)XUWKHUPRUHZHDOLJQZLWKORFDO UHTXLUHPHQWVDQGFDOFXODWHRXUZDWHU IRRWSULQWLQYHQWRULHVWRDVVHVVEXVLQHVV VSHFLŀFZDWHUULVNVDQGLGHQWLI\ RSSRUWXQLWLHVIRULPSURYLQJZDWHU HŃFLHQF\7KLVSURYLGHVLQVLJKWVGULYLQJ RXUZDWHUFRQVHUYDWLRQDQGFLUFXODULW\ PHDVXUHV7KHIROORZLQJVHFWLRQVGHWDLO WKHVHPHDVXUHVDFURVVɹɽLEDED&ORXG RXURŃFHFDPSXVHVDQG)UHVKLSSR VLQFHWKH\KDYHDPDWHULDOLPSDFWRQ RXUZDWHUIRRWSULQW ɹɽLEDED&ORXG $ORZHU:8(YDOXHLVQRWQHFHVVDULO\EHWWHU,QZDWHUVXVWDLQDEOHUHJLRQVDFRQWUROODEOH DPRXQWRIZDWHUFDQEHFRQVXPHGWRGULYHVLJQLŀFDQWHQHUJ\HŃFLHQF\JDLQVDQG ERRVWHPLVVLRQVUHGXFWLRQ7KHUHIRUHQDYLJDWLQJWKHWUDGHRłEHWZHHQ38(DQG:8( LVDFULWLFDOWRSLFIRUɹɽLEDED&ORXG VVXVWDLQDEOHRSHUDWLRQV ɹɽLEDED&ORXG VZDWHUPDQDJHPHQWPHWKRGRORJ\LVVWUXFWXUHGRQDIUDPHZRUNRIVLWH VSHFLŀFDGDSWDWLRQDQGIXOOOLIHF\FOHFRRUGLQDWLRQ2XUFKRLFHRIFRROLQJWHFKQRORJLHVLV FORVHO\DOLJQHGZLWKUHJLRQDOZDWHUHQGRZPHQWDVVHVVPHQWV,QZDWHUVFDUFHUHJLRQV ZHSULRULWL]HDLUFRROLQJWRPLQLPL]HSUHVVXUHRQORFDOZDWHUHFRV\VWHPV&RQYHUVHO\ LQZDWHUDEXQGDQWDUHDVZHSUXGHQWO\GHSOR\HYDSRUDWLYHFRROLQJWRVLJQLŀFDQWO\FXW SRZHUFRQVXPSWLRQDQGHPLVVLRQV,Q)<WKHDQQXDODYHUDJH:8(DFURVVRXUVHOI EXLOWGDWDFHQWHUVZDV6SHFLŀFDOO\WKLVPHWULFZDVIRUWKRVHGRPLQDWHGE\ DLUFRROLQJDQGIRUWKRVHSULPDULO\XVLQJHYDSRUDWLYHFRROLQJ2XUGLłHUHQWLDWHG DSSURDFKHQVXUHVWKHKLJKO\HŃFLHQWRSHUDWLRQRIFRPSXWLQJLQIUDVWUXFWXUHZKLOH OLPLWLQJWKHLPSDFWRQZDWHUHFRV\VWHPVZLWKLQUHDVRQDEOHERXQGDULHV ,QZDWHUVFDUFHUHJLRQVZKHUHDLUFRROLQJGRPLQDWHVɹɽLEDED&ORXGQRWRQO\OHYHUDJHV WHFKQLFDOVROXWLRQVWROLPLWGLUHFWZDWHUFRQVXPSWLRQEXWDOVRUHOHQWOHVVO\PD[LPL]HV ZDWHUFLUFXODULW\GXULQJLWVRSHUDWLRQV,Q)<GDWDFHQWHUVDFURVVVRPHRILWV EDVHVLQFOXGLQJ8ODQTDEUHFODLPHGFXELFPHWHUVRIZDWHUYLDKLJKHŃFLHQF\ UHF\FOLQJV\VWHPV 7RDFKLHYHJUDQXODURSHUDWLRQVɹɽLEDED&ORXGKDVIRUPXODWHG:8(PDQDJHPHQW JXLGHOLQHVDQGFRQWLQXRXVO\LWHUDWHVLWVFRQWUROVWUDWHJ\7KHEXVLQHVVVWDQGDUGL]HV ZDWHUPDQDJHPHQWSUDFWLFHVIRUGDWDFHQWHUVDFURVVYDULRXVGLPHQVLRQVUHODWHGWR WKHRSHUDWLRQRIFRROLQJWRZHUVLQFOXGLQJWKHPDNHXSOHYHOF\FOHVRIFRQFHQWUDWLRQ FRQGXFWLYLW\DQGDPELHQWKXPLGLW\7KHVHSUDFWLFHVDLPWRPD[LPL]HWKHFRROLQJ HŃFDF\RIHYHU\FXELFPHWHURIZDWHUDWGDWDFHQWHUVWKDWXWLOL]HHYDSRUDWLYHFRROLQJ WKHUHE\FXUELQJXQQHFHVVDU\ZDWHUZLWKGUDZDO $QQXDODYHUDJH:8(DFURVVɹɽLEDED &ORXG VVHOIEXLOWGDWDFHQWHUV $QQXDODYHUDJH:8(DFURVVɹɽLEDED &ORXG VVHOIEXLOWGDWDFHQWHUV $SU 0DU )< $SU 0DU )< $SU 0DU )< ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 49 ↗

Slide 50 — P

&RQVHUYLQJDQGUHVWRULQJQDWXUH 3URWHFWLQJWKH(QYLURQPHQW 2ŃFHFDPSXVHV :DWHUZLWKGUDZDOSUHVVXUHRQRXURŃFHFDPSXVHV VWHPVSUHGRPLQDQWO\IURPWKHFXPXODWLYHHłHFWV RIGDLO\RSHUDWLRQV7KHFRPELQDWLRQRIYDULHG GHPDQGFDWHJRULHVLQFOXGLQJJHQHUDORŃFH XVDJHODQGVFDSHLUULJDWLRQDLUFRQGLWLRQLQJDQG FDWHULQJKDVFUHDWHGDVXVWDLQHGUHOLDQFHRQWKH PXQLFLSDOZDWHUQHWZRUN$OOHYLDWLQJWKHEXUGHQ WKDWRXURŃFHFDPSXVHVLPSRVHRQORFDOZDWHU HFRV\VWHPVKDVHPHUJHGDVDSULRULW\ 2XUFDPSXVZDWHUPDQDJHPHQWVSDQVWKH SODQQLQJGHVLJQDQGRSHUDWLRQDOVWDJHV 8SKROGLQJWKHVSRQJHFLW\SKLORVRSK\IRUSODQQLQJ DQGGHVLJQZHOHYHUDJHUDLQZDWHUKDUYHVWLQJ DQGSHUPHDEOHSDYLQJWRUHF\FOHURRIWRSDQG VXUIDFHUXQRłUDWKHUWKDQGLVFKDUJLQJLWLQWRWKH PXQLFLSDOGUDLQDJHV\VWHP )XUWKHUPRUHZHKDYHHVWDEOLVKHGDPRQLWRU FRQVHUYHUHXVHRSHUDWLRQDOPDQDJHPHQW V\VWHP$WWKHLQŁRZHQGZHGHSOR\ZDWHU VDYLQJHTXLSPHQWDQGXSJUDGHH[LVWLQJŀ[WXUHV WR*UDGHZDWHUHŃFLHQWDOWHUQDWLYHVWKHUHE\ ORZHULQJZDWHULQWHQVLW\DWWKHVRXUFHDFURVV YDULRXVVFHQDULRV:HDOVRRUJDQL]HWUDLQLQJ VHVVLRQVWRHQKDQFHZDWHUFRQVHUYDWLRQDZDUHQHVV DPRQJHPSOR\HHV$WWKHRXWŁRZHQGZHKDYH GHYHORSHGDUHF\FOLQJQHWZRUNIRUDLUFRQGLWLRQLQJ FRQGHQVDWHDVZHOODVZDVWHZDWHUIURPGLUHFW GULQNLQJZDWHUV\VWHPVUHLQWHJUDWLQJVXFKGLUHFW GLVFKDUJHLQWRWKHFLUFXODUORRS,Q)<ZH FRQWLQXHGRXULQLWLDWLYHWRUHWURŀWZDWHUUHF\FOLQJ V\VWHPVDFURVVRXUVHOIXVHGRŃFHFDPSXVHV DFKLHYLQJDQDQQXDOUHF\FOLQJYROXPHRI FXELFPHWHUV )UHVKLSSR )RUIUHVKIRRGUHWDLOZDWHULVDQHFHVVDU\LQSXWIRUSURGXFWTXDOLW\DQGIRRGVDIHW\ 7KLVSRVHVDXQLTXHFKDOOHQJHIRUZDWHUPDQDJHPHQW/LYHVHDIRRGVWRUDJHUHTXLUHV WKHFRQWLQXRXVFLUFXODWLRQRIFOHDQZDWHUWRNHHSDTXDWLFDQLPDOVDOLYHDQGDFWLYH ZKLOHIRRGSUHSDUDWLRQGHPDQGVVLJQLŀFDQWYROXPHVRIZDWHUWRPHHWK\JLHQH VWDQGDUGV$VWKHVHWZRIXQFWLRQVDUHIXQGDPHQWDOWRVWRUHRSHUDWLRQVDQGUHSUHVHQW WKHSULPDU\VRXUFHVRIZDWHUFRQVXPSWLRQSUHFLVHZDWHUFRQVHUYDWLRQZLWKRXW FRPSURPLVLQJTXDOLW\LVDFHQWUDOPDWWHULQ)UHVKLSSR VZDWHUPDQDJHPHQWVWUDWHJ\ )UHVKLSSRKDVHVWDEOLVKHGDZDWHUGDWDPDQDJHPHQWV\VWHPWRV\VWHPDWLFDOO\WUDFN FRQVXPSWLRQSDWWHUQVDFURVVLWVVWRUHRSHUDWLRQV7KLVV\VWHPHQDEOHVWKHEXVLQHVVWR GHSOR\GLłHUHQWLDWHGWHFKQLFDOVWUDWHJLHVIRULWVWZRSULPDU\ZDWHUXVDJHVFHQDULRV OLYHVHDIRRGVWRUDJHDQGIRRGSUHSDUDWLRQ)RUOLYHVHDIRRGVWRUDJH)UHVKLSSR XWLOL]HVDQLQWHOOLJHQWZDWHUWUHDWPHQWV\VWHPWKDWFRPELQHVSK\VLFDOŀOWUDWLRQ ELRORJLFDOSXULŀFDWLRQDQGORZWHPSHUDWXUHFLUFXODWLRQ3K\VLFDOŀOWUDWLRQUHPRYHV SDUWLFXODWHVDQGLPSXULWLHVELRORJLFDOSXULŀFDWLRQOHYHUDJHVPLFURELDOFRPPXQLWLHV WRGHFRPSRVHPHWDEROLFZDVWHVXFKDVDPPRQLDQLWURJHQDQGORZWHPSHUDWXUH FLUFXODWLRQUHGXFHVR[\JHQFRQVXPSWLRQZKLOHLQKLELWLQJSDWKRJHQJURZWK 7KHV\QHUJ\RIWKHVHWKUHHWHFKQRORJLHVVXSSRUWVFORVHGORRSFLUFXODULW\ZKLOH PDLQWDLQLQJVWDEOHZDWHUTXDOLW\$VDUHVXOWZDVWHZDWHULVUHGXFHGUHF\FOHGDQG UHXVHG,QIRRGSUHSDUDWLRQDVPDUWGHYLFHZLWKZDWHUOHYHOVHQVLQJDXWRPDWLFDOO\ DGMXVWVZDWHULQWDNHDQGŁRZGXUDWLRQEDVHGRQDFWXDOGHPDQG7KLVDYRLGVWKH LVVXHVRIRYHUŁRZDQGZDVWHFRPPRQO\VHHQLQWUDGLWLRQDOŀ[HGŁRZHTXLSPHQW RIZDWHUUHF\FOHG P ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 50 ↗

Slide 51 — 3URWHFWLQJQDWXUDOHFRV\VWHPV

&RQVHUYLQJDQGUHVWRULQJQDWXUH 3URWHFWLQJWKH(QYLURQPHQW 3URWHFWLQJQDWXUDOHFRV\VWHPV :HFRQWLQXRXVO\GHHSHQRXUXQGHUVWDQGLQJ RILQWHUQDWLRQDOVWDQGDUGVDQGHYDOXDWLRQ IUDPHZRUNVIRUELRGLYHUVLW\ULVNVDQG RSSRUWXQLWLHVZLWKDIRFXVRQWKH7DVNIRUFHRQ 1DWXUHUHODWHG)LQDQFLDO'LVFORVXUHV71)' %LRGLYHUVLW\SUHVHUYDWLRQLVHPEHGGHGLQWRRXU RSHUDWLRQDOSUDFWLFHVFRPSOHPHQWHGE\PXOWL VWDNHKROGHUSDUWLFLSDWLRQ 2ŃFHFDPSXVHV ,QGLYLGXDORŃ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ŀ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łRUWVIRURXURŃFHFDPSXVHV VWDUWDVHDUO\DVVLWHVHOHFWLRQ7KHVHHł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ŀ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łHFWLRQDWHO\NQRZQDVEXJKRWHOV 8VLQJQDWXUDOZRRGEDPERRVHJPHQWVDQGUHHGWXEHVDV SULPDU\PDWHULDOVZHGHVLJQHGWDLORUHGDFFRPPRGDWLRQV IRUGLłHUHQWVSHFLHVLQFOXGLQJOHDIFXWWHUEHHVODG\EXJV ODFHZLQJVDQGVSLGHUV6RPHGHVLJQVPLPLFKROORZWUHH FDYLWLHVRWKHUVUHSOLFDWHVWDFNHGGU\WZLJVDQGVRPHRłHU QDUURZFUHYLFHVϿDOOWRUHFUHDWHWKHLUDXWKHQWLFQDWXUDO KDELWDWVDVFORVHO\DVSRVVLEOH ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV (QYLURQPHQWDO

Open the original at slide 51 ↗

Slide 52 — 6RFLDO

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ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 52 ↗

Slide 53 — 2YHU

6XSSRUWLQJ 2XU3HRSOH 2YHU :HKDYHWUDLQHGDFXPXODWLYHWRWDORIRYHU )LUVWDLG5HVSRQGHUV 7KHVDWLVIDFWLRQUDWHIRURXURŃFHHQYLURQPHQW LQFUHDVHGWR )RUEHVOLVWRIWKH :RUOG V%HVW(PSOR\HUV ɹɽLEDED*URXSZDVQDPHGRQWKH)RUEHVOLVWRI WKH:RUOG V%HVW(PSOR\HUVPDLQWDLQLQJD WRSŀYHSRVLWLRQDPRQJDOO&KLQHVHFRPSDQLHV RQLW $,3URGXFWLYLW\3ODQ 7KH$,3URGXFWLYLW\3ODQSURYLGHVDOOHPSOR\HHV ZLWKIUHHDFFHVVWR$,WRROV 2YHU 2YHUHPSOR\HHVWRRNIDPLO\FDUHOHDYHWR VSHQGTXDOLW\WLPHZLWKWKHLUORYHGRQHV :RPHQDFFRXQWHGIRURIRXUZRUNIRUFH 'LYHUVLW\HTXLW\ DQGLQFOXVLRQ 7DOHQWDFTXLVLWLRQ DQGUHWHQWLRQ (PSOR\HHKHDOWK DQGYLWDOLW\ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 53 ↗

Slide 54 — 6WUDWHJLHVDQGDSSURDFKHV

6WUDWHJLHVDQGDSSURDFKHV 7REXLOGDIUDPHZRUNIRUHPSOR\HHGHYHORSPHQWZHIRVWHUDFXOWXUHRIJURZWK WKURXJKRXUYDOXHVDQFKRUEDVHOLQHUHTXLUHPHQWVLQLQWHUQDWLRQDOVWDQGDUGV DQGJRYHUQVSHFLŀ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ɹɽLEDED*URXS&RGHRI %XVLQHVV&RQGXFWDQGWKHɹɽLEDED*URXS(PSOR\HH5LJKWV&RGH7KHIRUPHU VHUYHVDVWKHSURIHVVLRQDOFRGHRIFRQGXFWIRUDOOHPSOR\HHVIHDWXULQJH[SOLFLW SURYLVLRQVRQPDLQWDLQLQJZRUNSODFHRUGHUDQGSURWHFWLQJHPSOR\HHULJKWV7KH ODWWHUIXQFWLRQVDVDJRYHUQLQJSROLF\WKDWFRYHUVKXPDQULJKWVRFFXSDWLRQDO KHDOWKDQGVDIHW\GLYHUVLW\HTXLW\DQGLQFOXVLRQ'(,DQGHPSOR\HHWUDLQLQJ (PSRZHULQJ HPSOR\HHVWR EHFRPHWKHLU EHWWHUVHOYHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 54 ↗

Slide 55 —

6XSSRUWLQJ2XU3HRSOH 'LYHUVLW\HTXLW\DQGLQFOXVLRQ 'LYHUVLW\HTXLW\ DQGLQFOXVLRQ :HDUHFRQYLQFHGWKDW'(,LVWKHSULPDU\ HQJLQHIXHOLQJRXUFRQWLQXRXVLQQRYDWLRQDQG ORQJWHUPJURZWK%\EXLOGLQJDZRUNSODFH WKDWUHVSHFWVGLłHUHQFHVDQGOHYHOVWKH SOD\LQJŀHOGZHHPSRZHUHPSOR\HHVIURP YDULRXVEDFNJURXQGVWRUHDOL]HWKHLUIXOO SRWHQWLDODQGKDUQHVVGLYHUVHSHUVSHFWLYHV WRGULYHEXVLQHVVYDOXH8QGHUWKHJXLGDQFH RIWKH%RDUG V6XVWDLQDELOLW\&RPPLWWHH ZHKDYHHVWDEOLVKHGD'(,:RUNLQJ*URXS WRVWHHUWKHIRUPXODWLRQRISROLFLHVDQGWKH LPSOHPHQWDWLRQRIVSHFLŀFPHDVXUHV 2XU'(,SKLORVRSK\LVZRYHQLQWRHYHU\VWDJH RIKXPDQUHVRXUFHVPDQDJHPHQWIURP VHOHFWLRQDQGUHFUXLWPHQWWRGHYHORSPHQW DQGUHWHQWLRQ(YHU\HPSOR\HHUHFHLYHV IDLUDQGLPSDUWLDOWUHDWPHQWUHJDUGOHVV RIQDWLRQDOLW\UDFHDJHJHQGHUSK\VLFDO FRQGLWLRQUHOLJLRQRUFXOWXUDOEDFNJURXQG 6XSSRUWLQJDGLYHUVHZRUNIRUFH :HIXOO\UHFRJQL]HDFFHSWDQGYDOXHLQGLYLGXDO GLł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ϿLQFOXGLQJ &KLQD6LQJDSRUH,QGRQHVLD*HUPDQ\)UDQFHDQG WKH86ϿWRFHOHEUDWH$OL'D\DVSHFLDOGD\GHGLFDWHG WR$OLUHQDURXQGWKHZRUOG2XU3KLOLSSLQHVWHDP FHOHEUDWHG%XZDQQJ:LNDLQ$XJXVWRXU0DOD\VLD RŃFHKRVWHGD'HHSDYDOLFDQGOHPDNLQJZRUNVKRS LQ2FWREHUDQGZHRUJDQL]HG&KULVWPDVIHVWLYLWLHVIRU RXULQWHUQDWLRQDOVWDłLQ'HFHPEHU7KHVHDFWLYLWLHV QRWRQO\EURXJKWIUHVKFXOWXUDOH[SHULHQFHVWRRXU HPSOR\HHVEXWDOVRIXUWKHUUHLQIRUFHGWKHLQFOXVLYLW\RI RXURUJDQL]DWLRQ 6XSSRUWLQJDGLYHUVHZRUNIRUFH $ZRUNSODFHRIHTXLW\DQG PXWXDOUHVSHFW $QLQFOXVLYHFXOWXUH WRWDOQXPEHURIHPSOR\HHV SHUFHQWDJHRIIHPDOHHPSOR\HHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 55 ↗

Slide 56 — $ZRUNSODFHRIHTXLW\

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ɹɽLEDED ,QWHUQDWLRQDO'LJLWDO&RPPHUFH*URXS V%%%DURSHUDWHVWKHVDPH ZD\7KHVHVXEPLVVLRQVDGGUHVVDZLGHUDQJHRIFRQFHUQVDERXWGDLO\ PDQDJHPHQWDQGDUHSURFHVVHGE\EXVLQHVVOHYHO+5WHDPV7KLV VWUHDPOLQHGXVHUIULHQGO\DSSURDFKHQVXUHVWKDWHPSOR\HHYRLFHVDUH KHDUG 7KHLGHQWLWLHVRIUHSRUWLQJLQGLYLGXDOVDORQJZLWKWKHLQIRUPDWLRQ SURYLGHGE\WKHPDUHNHSWVWULFWO\FRQŀGHQWLDO$Q\IRUPRIUHWDOLDWLRQLV VWULFWO\SURKLELWHGDJDLQVWWKRVHZKRUHSRUWLQJRRGIDLWKDQGWKRVHZKR FRRSHUDWHZLWKLQYHVWLJDWLRQVSURYLGHWLSVRUDVVLVWLQDQ\RWKHUZD\ )HHGEDFNDQGUHSRUWLQJFKDQQHOV :HKDYHIRUPXODWHGDQGUHOHDVHGWKHɹɽLEDED*URXS&RGHRI&RQGXFW $JDLQVW6H[XDO+DUDVVPHQWZKLFKFOHDUO\GHOLQHDWHVSURKLELWHG DQGLQDSSURSULDWHEHKDYLRUVLQWKHZRUNSODFHVWDQGDUGL]LQJWKH SURFHGXUHVIRUFRPSODLQWLQWDNHLQYHVWLJDWLRQDQGUHVROXWLRQ2QFH DFRPSODLQWLVDFFHSWHGWKH$,'WHDPFRQGXFWVDQLQGHSHQGHQW LQYHVWLJDWLRQDQGXSRQLWVFRPSOHWLRQPDNHVDGLVFLSOLQDU\GHFLVLRQ 7KLVGHFLVLRQLVWKHQHQIRUFHGE\WKHUHVSRQGHQW VWHDPVXSHUYLVRUDQG UHOHYDQW+5SHUVRQQHO,IWKHUHVSRQGHQWLVYHULŀHGWRKDYHFRPPLWWHG VHYHUHPLVFRQGXFWZHWHUPLQDWHWKHLUHPSOR\PHQW 'HSHQGLQJRQWKHFLUFXPVWDQFHVZHPD\SURYLGHWKHFRPSODLQDQW ZLWKQHFHVVDU\DVVLVWDQFHVXFKDVOHJDODQGSV\FKRORJLFDOFRXQVHOLQJ WRSURWHFWWKHLUOHJLWLPDWHULJKWV,Q)<RIVH[XDOKDUDVVPHQW FRPSODLQWVZHUHLQYHVWLJDWHGDQGUHVROYHGZLWKWDUJHWHGUHYLHZV FRQGXFWHGWRFRQWLQXRXVO\UHŀ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ŀOLQJDQDSSHDOZLWKWKH 'LVFLSOLQDU\0DQDJHPHQW&RPPLWWHHZKLFKW\SLFDOO\UHQGHUVDFRQFOXVLRQ ZLWKLQZRUNLQJGD\VRIWKHDSSHDO VUHFHLSW 3URFHVVIRUDSSHDOLQJGLVFLSOLQDU\DFWLRQV 7KLVFKDQQHODOORZVHPSOR\HHVWRUHSRUWLVVXHVGLUHFWO\WREXVLQHVV SUHVLGHQWV$UHVSRQVHLVJHQHUDOO\SURYLGHGZLWKLQWZRGD\V 23(10DLOER[ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 56 ↗

Slide 57 — $QLQFOXVLYHFXOWXUH

6XSSRUWLQJ2XU3HRSOH 'LYHUVLW\HTXLW\DQGLQFOXVLRQ $QLQFOXVLYHFXOWXUH 2SHQFRPPXQLFDWLRQ $QLQFOXVLYHFXOWXUHLVHVVHQWLDOWRXQORFNLQJWKHIXOOSRWHQWLDO RIDGLYHUVHRUJDQL]DWLRQ$WɹɽLEDEDRSHQFRPPXQLFDWLRQ'(, DGYRFDF\DQGYDULRXVFRPPXQLW\DFWLYLWLHVIRVWHUPHDQLQJIXO LQWHUDFWLRQVDPRQJHPSOR\HHV7KHVHLQLWLDWLYHVVWUHQJWKHQWHDP FROODERUDWLRQDQGRUJDQL]DWLRQDOFRKHVLRQ 2XUFRPPXQLFDWLRQPHFKDQLVPHQFRPSDVVHVIRUPDODQGLQIRUPDO H[FKDQJHVEHWZHHQPDQDJHUVDQGHPSOR\HHVDVZHOODVGD\WRGD\ LQWHUDFWLRQVDPRQJHPSOR\HHV %RRNLQJLVDQLQWHUQDOFRPPXQLFDWLRQWRROZKHUHPDQDJHUV FDQDQQRXQFHWKHLUDYDLODELOLW\VRWKDWHPSOR\HHVFDQPDNH DSSRLQWPHQWVIRUIDFHWRIDFHWDONVZLWKWKHP,Q)<DWRWDO RIPDQDJHUVSRVWHGHQWULHVRQ%RRNLQJ$SDUWIURP RQHRQRQHLQWHUDFWLRQVPDQDJHUVIURPRXUEXVLQHVVHVPDLQWDLQ UHJXODUGLDORJXHZLWKHPSOR\HHVYLDVWUDWHJLFEULHŀ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ɹɽLEDEDLQWUDQHWLVDQLQWHUQDOGLJLWDO SODWIRUPH[FOXVLYHWRRXUHPSOR\HHV VHUYLQJPXOWLSOHIXQFWLRQVVXFKDV FRPPXQLFDWLRQFROODERUDWLRQFXOWXUH EXLOGLQJDQGHPSOR\HHLQWHUDFWLRQ Ȱ $OLZD\LVDQLQWHUQDOIRUXPIRUHPSOR\HHV WRVKDUHH[SHULHQFHH[FKDQJH SHUVSHFWLYHVDQGVXSSRUWRQHDQRWKHU *URXQGHGLQDFXOWXUHRIWUDQVSDUHQF\ WKHIRUXPUHŁHFWVWKHEHOLHIWKDWFDQGLG GLDORJXHLVWKHEHGURFNRIRUJDQL]DWLRQDO JURZWK,Q)<$OLZD\UHDFKHG RYHUHPSOR\HHVZLWKLWVSRVWV UHFRUGLQJPRUHWKDQPLOOLRQYLHZV Ȱ 2UDQJH7DONLVDQLPDJHFHQWULFLQWHUDFWLYH VSDFHZKHUHZHUHJXODUO\LQLWLDWHWRSLFV IRUHPSOR\HHVWRVKDUHWKHLUSURIHVVLRQDO DQGSHUVRQDOPRPHQWVYLDSKRWRVDQG WH[W7KLVLQVSLUHVWKHPWRGLVFRYHU LQWHUHVWLQJSHRSOHDQGWKLQJVDURXQG WKHP,Q)<2UDQJH7DONUHFRUGHG DERXWHQJDJHPHQWV Ȱ 7KH+HUR&DUGVHUYHVDVDSHHU UHFRJQLWLRQWRROGHVLJQHGWRHQFRXUDJH HPSOR\HHVWRH[SUHVVJUDWLWXGHWRZDUG H[FHSWLRQDOSDUWQHUVVXSSRUWLYH FROOHDJXHVDQGLQVSLUDWLRQDOPHQWRUV GXULQJGDLO\FROODERUDWLRQ,Q)< PRUHWKDQHPSOR\HHVXVHGWKHWRRO WRVKRZWKHLUDSSUHFLDWLRQRYHU WLPHV ɹɽLEDEDLQWUDQHW ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 57 ↗

Slide 58 — '(,DGYRFDF\

6XSSRUWLQJ2XU3HRSOH 'LYHUVLW\HTXLW\DQGLQFOXVLRQ '(,DGYRFDF\ 9LEUDQWHPSOR\HHFRPPXQLWLHV :HRUJDQL]HDZLGHDUUD\RIDFWLYLWLHVWRQXUWXUHD'(,FXOWXUH LQWHJUDWLQJLWV\VWHPDWLFDOO\LQWRRXUHPSOR\HHWUDLQLQJ IUDPHZRUNWREULGJHWKHJDSEHWZHHQDZDUHQHVVDQGSUDFWLFH ,Q)<ZHKRVWHGDQ(6*)DLURQRXUFDPSXVHVIHDWXULQJ LQWHUDFWLYHERRWKVZKHUHVFHQDULREDVHG4 $VHVVLRQV KHOSHGHPSOR\HHVJDLQDQLQWXLWLYHXQGHUVWDQGLQJRI'(, FRQFHSWV%H\RQGLQSHUVRQDFWLYLWLHVZHKDYHLQFRUSRUDWHG '(,FRQFHSWVLQWRWKHWUDLQLQJDQGH[DPLQDWLRQSURJUDPIRU WKHɹɽLEDED*URXS&RGHRI%XVLQHVV&RQGXFWDFURVVRXUPDMRU EXVLQHVVHV,Q)<RIRXUHPSOR\HHVFRPSOHWHGWKH DQQXDOH[DPLQDWLRQRQWKHɹɽLEDED*URXS&RGHRI%XVLQHVV &RQGXFWZLWKD'(,PRGXOHLQFOXGHGLQVRPHYHUVLRQVRIWKH H[DPLQDWLRQ )XUWKHUPRUHRXUEXVLQHVVHVKDYHODXQFKHG'(,LQLWLDWLYHV WDLORUHGWRWKHLUVSHFLŀFFKDUDFWHULVWLFVDQGSUDFWLFDOQHHGV ɹɽLEDED&ORXGKDVHVWDEOLVKHGDQDGYRFDF\FRPPXQLW\WR IRVWHUD'(,FXOWXUHYLDHYHQWVOLNHURXQGWDEOHVDQGZRUNVKRSV '(,FRQFHSWVDUHQRZLQWHJUDWHGLQWRWUDLQLQJSURJUDPVIRU ERWKPDQDJHUVDQGQHZHPSOR\HHVWRFKDPSLRQLQFOXVLRQ,Q )<DQHZ'(,VXUYH\FRQGXFWHGE\ɹɽLEDED&ORXGVKRZHG DIDYRUDELOLW\UDWHRIDPRQJHPSOR\HHVIRUZRUNSODFH LQFOXVLRQ &DLQLDRHTXLSVPDQDJHUVZLWKDFKHFNOLVWWKDWDGGUHVVHVWKH FRPSOH[LWLHVRIFRPPXQLFDWLRQDQGWKHSURWHFWLRQRIPLQRULW\ JURXSVLQFURVVFXOWXUDODQGRYHUVHDVVHWWLQJV7KLVWDFWLFDO UHVRXUFHHPSRZHUVPDQDJHUVWRQDYLJDWHFXOWXUDOQXDQFHV ZLWKJUHDWHUFRQŀGHQFH)XUWKHUPRUHWKH&DLQLDR2YHUVHDV 7UDYHO+DQGERRNVHUYHVDVDFXOWXUDOFRPSDVVIRUHPSOR\HHV GHSOR\HGRYHUVHDV,WFRYHUVDUDQJHRIWRSLFVVXFKDV UHVSHFWIRUGLYHUVHFXOWXUHVWUDGLWLRQVDQGUHOLJLRQVKHOSLQJ H[SDWULDWHVTXLFNO\LQWHJUDWHLQWRORFDOHQYLURQPHQWV $OL6KLSDLLVDSODWIRUPRILQWHUHVWFRPPXQLWLHVLQLWLDWHGDQGJRYHUQHGE\HPSOR\HHV$VRI0DUFKLWKDG IRUPDOFOXEVVSDQQLQJWKUHHSULPDU\FDWHJRULHVVSRUWVVXFKDVEDVNHWEDOOVTXDVKDQGNHQGRFUHDWLYH DUWVVXFKDVSKRWRJUDSK\FDOOLJUDSK\DQGSDLQWLQJDQGSHUVRQDOJURZWKDFWLYLWLHVVXFKDVUHDGLQJ(QJOLVK OHDUQLQJDQGPLQGIXOQHVV:KHQHPSOR\HHVFRPHWRJHWKHURYHUVKDUHGLQWHUHVWVWKH\SUDFWLFHWKHSKLORVRSK\RI ZRUNLQJZLWKSDVVLRQDQGOLYLQJZLWKSXUSRVH ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 58 ↗

Slide 59 — 7DOHQWDFTXLVLWLRQ

7DOHQWDFTXLVLWLRQDQGUHWHQWLRQ 6XSSRUWLQJ2XU3HRSOH 7DOHQWDFTXLVLWLRQ DQGUHWHQWLRQ $FTXLULQJDQGUHWDLQLQJWDOHQWLVWKH FRUQHUVWRQHRIEXVLQHVVJURZWK$W ɹɽLEDEDDEURDGDUUD\RIRSHQUHFUXLWPHQW FKDQQHOVHQVXUHVDQLQŁX[RIFRPSHWHQW SURIHVVLRQDOV2XUFRPPLWPHQWWRVKDULQJ WKHIUXLWVRIRXUGHYHORSPHQWZLWK HPSOR\HHVLVUHŁHFWHGLQDFRPSHQVDWLRQ V\VWHPWKDWLVERWKLQWHUQDOO\HTXLWDEOHDQG H[WHUQDOO\FRPSHWLWLYH7KLVFRPSHQVDWLRQ V\VWHPFRPSOHPHQWHGE\DFRQWLQXRXVO\ LPSURYLQJEHQHŀWV\VWHPIRVWHUVDQ HQYLURQPHQWZKHUHHPSOR\HHVZRUNZLWK SDVVLRQDQGOLYHZLWKSXUSRVH 5HFUXLWPHQW 7DOHQWDFTXLVLWLRQLVWKHŀUVWVWHSLQKXPDQUHVRXUFHVPDQDJHPHQW$WɹɽLEDEDWDOHQW SODQQLQJLVFORVHO\LQWHJUDWHGZLWKRXUEXVLQHVVVWUDWHJ\&RQWLQXRXVDVVHVVPHQWVLQIRUPHG E\VXSSO\GHPDQGG\QDPLFVLQWKHMREPDUNHWDQGLQWHUQDOWDOHQWVWRFNWDNHVHQVXUHWKDW RXUWDOHQWSLSHOLQHLVERWKDGHTXDWHDQGVWUXFWXUDOO\VRXQG2XUUHFUXLWPHQWSUDFWLFHV OHYHUDJHGLYHUVHFKDQQHOVWREURDGHQWDOHQWVRXUFHVZLWKDVWHDGIDVWFRPPLWPHQWWR FDQGLGDWHH[SHULHQFHDQGUHFUXLWPHQWFRPSOLDQFH 5HFUXLWPHQW $IDLUV\VWHPIRUFRPSHQVDWLRQ DQGSHUIRUPDQFHDVVHVVPHQW %HQHŀWVDQGHPSOR\HHFDUH 5HFUXLWPHQWFKDQQHOVDQGFDQGLGDWHH[SHULHQFH ,QDGGLWLRQWRRXUSUHVHQFHRQRXURŃFLDOUHFUXLWPHQWSODWIRUPDQGWKLUGSDUW\MREERDUGV ZHKDYHH[SDQGHGLQWRHPHUJLQJFKDQQHOVVXFKDVVRFLDOPHGLDDQGOLYHVWUHDPLQJ WRZLGHQRXUWDOHQWUHDFKDQGEROVWHUFDQGLGDWHLQWHUHVW,Q)<ZHIXUWKHUUHŀQHG RXULQWHUQDOUHIHUUDOSURJUDPDQGERRVWHGLWVYLVLELOLW\WREHWWHULQFHQWLYL]HHPSOR\HHVWR UHFRPPHQGKLJKFDOLEHUWDOHQW )XUWKHUPRUHZHSULRULWL]H\RXQJWDOHQWHVSHFLDOO\LQWKH$,ŀHOGDVDNH\FRPSRQHQWRIRXU ORQJWHUPWDOHQWSLSHOLQHDQGFRQVLVWHQWO\GHHSHQRXUSDUWQHUVKLSVZLWKKLJKHUHGXFDWLRQ LQVWLWXWLRQV7RVWUHQJWKHQRXUWLHVZLWKXQLYHUVLWLHVDQG\RXQJVWXGHQWVZHHQJDJHWKHP WKURXJKHQWHUSULVH2SHQ'D\VFDPSXVSUHVHQWDWLRQVDQGLQWHUQVKLSSURJUDPV6RPH RIRXUEXVLQHVVHVDOVRUXQPDQDJHPHQWWUDLQHHSURJUDPVWREXLOGDUHVHUYHRIQH[W JHQHUDWLRQWDOHQW 7RV\VWHPDWLFDOO\LPSURYHFDQGLGDWHH[SHULHQFHZHKDYHVWDQGDUGL]HGRXUUHFUXLWPHQW ZRUNŁ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ɹɽLEDED*URXSZDVQDPHGRQWKH)RUEHVOLVWRIWKH:RUOG V%HVW(PSOR\HUV PDLQWDLQLQJDWRSŀYHSRVLWLRQDPRQJDOO&KLQHVHFRPSDQLHVRQLW )RUEHVOLVWRIWKH:RUOG V%HVW(PSOR\HUV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 59 ↗

Slide 60 — $IDLUV\VWHPIRUFRPSHQVDWLRQ

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ɹɽ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ł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łHUPDUNHWFRPSHWLWLYHFRPSHQVDWLRQDQGEHQHŀWV 'LYHUVHLQFHQWLYHVDUHWDLORUHGWRŀWVSHFLŀFUROHVDQGEXVLQHVV QHHGV6KRUWWHUPLQFHQWLYHVLQFOXGHFRPPLVVLRQVDQGSURMHFW ERQXVHVDVZHOODVTXDUWHUO\DQGDQQXDOERQXVHV/RQJ WHUPLQFHQWLYHVVXFKDVVWRFNRZQHUVKLSDQGORQJWHUP FDVKLQFHQWLYHVLQVSLUHHPSOR\HHVWRJURZWRJHWKHUZLWKWKH RUJDQL]DWLRQ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 60 ↗

Slide 61 — %HQHŀWVDQGHPSOR\HHFDUH

7DOHQWDFTXLVLWLRQDQGUHWHQWLRQ 6XSSRUWLQJ2XU3HRSOH %HQHŀWVDQGHPSOR\HHFDUH :HDUHFRPPLWWHGWRSURYLGLQJWKRXJKWIXOEHQHŀWVDQGFDUHIRUDOOHPSOR\HHV %H\RQGEDVLFVWDWXWRU\EHQHŀWVVXFKDVVRFLDOVHFXULW\WKH+RXVLQJ3URYLGHQW )XQGDQGOHJDOO\PDQGDWHGOHDYHZHFRQWLQXRXVO\UHŀQHDPXOWLWLHUEHQHŀW V\VWHPEXLOWDURXQGSK\VLFDOKHDOWKPHQWDOZHOOEHLQJZRUNOLIHEDODQFH DQGIDPLO\FDUH6XSSRUWIRUHPSOR\HHIDPLOLHVUHPDLQVDWRSSULRULW\)RU GHWDLOVUHIHUWRWKHVHFWLRQDERXWRXUHPSOR\HHEHQHŀWV\VWHP 2XUEHQHŀWVH[WHQGEH\RQGHPSOR\HHVWRVXSSRUWWKHLUIDPLOLHV)RUWKHLU SDUHQWVZHSURYLGHDQQXDOSK\VLFDOFKHFNXSVDQGSURIHVVLRQDOVHUYLFHV WKDWLQWHUSUHWWKHUHVXOWVERWKIUHHRIFKDUJH,Q)<ZHDUUDQJHG VXFKSK\VLFDOFKHFNXSV&RPSUHKHQVLYHSUHQDWDODQGSDUHQWLQJVXSSRUWLV DYDLODEOHWRHPSOR\HHVDWHYHU\VWDJHRIWKHMRXUQH\7RKHOSH[SHFWDQWDQG QHZSDUHQWVFRQŀ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ŀUVWKDQG2YHU RIWKHPVLJQHGXSIRURXU$OL'D\FHOHEUDWLRQLQ'XULQJWKH6SULQJ )HVWLYDOZHVHQGD/HWWHU+RPHIURPɹɽLEDEDVKDULQJRXUSURJUHVVRYHUWKH SDVW\HDUDQGH[SUHVVLQJRXUJUDWLWXGHWRWKHIDPLOLHVEHKLQGRXUSHRSOH ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 61 ↗

Slide 62 — ɹɽLEDED VHPSOR\HHEHQHŀWV\VWHP

7DOHQWDFTXLVLWLRQDQGUHWHQWLRQ 6XSSRUWLQJ2XU3HRSOH Ȱ %DVLFSHQVLRQLQVXUDQFH Ȱ %DVLFPHGLFDOLQVXUDQFH Ȱ 8QHPSOR\PHQWLQVXUDQFH Ȱ :RUNUHODWHGLQMXU\LQVXUDQFH Ȱ 0DWHUQLW\LQVXUDQFH Ȱ +RXVLQJ3URYLGHQW)XQG Ȱ $QQXDOOHDYH Ȱ 0DUULDJHOHDYH Ȱ 0DWHUQLW\OHDYH Ȱ 3DUHQWDOOHDYH Ȱ /DFWDWLRQOHDYH Ȱ 3DWHUQLW\OHDYH Ȱ 6XSSOHPHQWDOFRPPHUFLDOLQVXUDQFH LQFOXGLQJSHUVRQDODFFLGHQWLQVXUDQFHVXSSOHPHQWDO FRPPHUFLDOPHGLFDOLQVXUDQFHDQGPHGLFDOLQVXUDQFH ZLWKDFRYHUDJHOLPLWRI50%PLOOLRQ Ȱ $QQXDOSK\VLFDOFKHFNXSVWRJHWKHUZLWKUHVXOW LQWHUSUHWDWLRQ Ȱ L+HDOWK(PSOR\HH+HDOWK0DQDJHPHQW3URJUDP LQFOXGLQJKHDOWKFRXQVHOLQJSV\FKRORJLFDOFRXQVHOLQJ DQGKHDOWKHGXFDWLRQ Ȱ 3K\VLRWKHUDS\VHUYLFHVDQGŀWQHVVIDFLOLWLHVDORQJZLWK WUDLQLQJFODVVHV 3K\VLFDODQGPHQWDOKHDOWK Ȱ 3UHQDWDOFKHFNXSOHDYH Ȱ %HUHDYHPHQWOHDYH Ȱ &RPPHUFLDOLQVXUDQFHIRUHPSOR\HHV FKLOGUHQ Ȱ 3K\VLFDOFKHFNXSVIRUHPSOR\HHV SDUHQWV XQGHUWKH&DUQDWLRQ3DUHQW&DUH3ODQ Ȱ L+RPH3URSHUW\3XUFKDVH3URJUDP )DPLO\FDUH ɹɽLEDED VHPSOR\HHEHQHŀWV\VWHP Ȱ )DPLO\FDUHOHDYH Ȱ /RQJVHUYLFHOHDYH Ȱ 7UDQVLWOHDYH Ȱ 2XWLQJOHDYH Ȱ )OH[LEOHZRUNDUUDQJHPHQWV :RUNOLIHEDODQFH Ȱ L+HOS'DQGHOLRQ0XWXDO$VVLVWDQFH3URJUDP Ȱ L+RSH5DLQERZ3URJUDP Ȱ L+RPH3URSHUW\3XUFKDVH3URJUDP Ȱ *LIWVIRUWKHŀUVWWKLUGŀIWKDQGWHQWKZRUNDQQLYHUVDULHV Ȱ $/HWWHU+RPHIURPɹɽLEDED Ȱ *LIWVIRUWKH,QWHUQDWLRQDO:RPHQ V'D\ Ȱ *LIWSDFNDJHVIRUWKH0LGDXWXPQ'D\ Ȱ $OORZDQFHVIRUOXQFKGLQQHUDQGODWHQLJKWVQDFNV )HDWXUHGEHQHŀWV %DVLFVWDWXWRU\EHQHŀWV 7KHFDWHJRUL]DWLRQRIEDVLFVWDWXWRU\EHQHŀWVLVEDVHGRQWKHODZVDQG UHJXODWLRQVRIWKH3HRSOH V5HSXEOLFRI&KLQD 7KHDERYHEHQHŀWVDUHVXEMHFWWRDGMXVWPHQWVPDGHE\RXUEXVLQHVVHVLQ OLQHZLWKWKHLURSHUDWLRQDOFRQWH[WVDVZHOODVWKHODZVDQGUHJXODWLRQVRIWKHLU RSHUDWLQJMXULVGLFWLRQV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 62 ↗

Slide 63 — $EXQGDQW

$EXQGDQWRSSRUWXQLWLHVIRUWDOHQWGHYHORSPHQW 6XSSRUWLQJ2XU3HRSOH $EXQGDQW RSSRUWXQLWLHVIRU WDOHQWGHYHORSPHQW )URPGD\RQHZHVXSSRUWQHZHPSOR\HHV WKURXJKDFRPSUHKHQVLYHVXSSRUWSURJUDP GHVLJQHGWRHQVXUHDVPRRWKWUDQVLWLRQDQG ORQJWHUPUHWHQWLRQ:HOHYHUDJHDGLYHUVH WUDLQLQJPDWUL[WRFRQWLQXRXVO\HQKDQFH SURIHVVLRQDOH[SHUWLVHDQGOHDGHUVKLS DFURVVWKHRUJDQL]DWLRQ)XUWKHUPRUHRXU UREXVWWDOHQWVWRFNWDNHPHFKDQLVPDQG WUDQVSDUHQWSURPRWLRQV\VWHPHQVXUHWKDW HYHU\HPSOR\HHFDQDFKLHYHWUDQVIRUPDWLYH JURZWKRQDOHYHOSOD\LQJŀHOG ,QWHJUDWLRQRIQHZHPSOR\HHV 7UDLQLQJV\VWHP &DUHHUGHYHORSPHQW ,QWHJUDWLRQRIQHZHPSOR\HHV :HSODFHJUHDWHPSKDVLVRQWKHLQWHJUDWLRQRIQHZHPSOR\HHV GXULQJWKHRQERDUGLQJSKDVHSURYLGLQJFRPSUHKHQVLYHVXSSRUWWKDW VSDQVHYHU\WKLQJIURPWRROXVDJHWRFXOWXUDODOLJQPHQW(DUO\LQWKLV SKDVHZHXVHGLJLWDOWRROVOLNHWKH1HZ+LUH0DSWRRłHUWDUJHWHG LQVWUXFWLRQVDWHDFKVWHSRIWKHLURQERDUGLQJMRXUQH\WRHQVXUHWKDW WKH\FOHDUO\XQGHUVWDQGWKHLURQERDUGLQJSURFHGXUHVDQGJURZWK SDWKV7RIRVWHURUJDQL]DWLRQDOEHORQJLQJZHKDYHHVWDEOLVKHGD PHQWRUVKLSSURJUDPWKDWSDLUVHYHU\QHZFRPHUZLWKDQH[SHULHQFHG FROOHDJXHVHUYLQJDVWKHLUPHQWRUIRURQHRQRQHFRDFKLQJ7KLV SURJUDPFRXSOHGZLWKHYHQWVVXFKDV+HUH&RPHVWKH0HQWRU DQG0HQWRU'D\GULYHVNQRZOHGJHVKDULQJDQGFXOWXUDOFRQWLQXLW\ EHWZHHQWHQXUHGDQGQHZHPSOR\HHV$VWKH\VHWWOHLQQHZ HPSOR\HHVSDUWLFLSDWHLQDVHULHVRIWUDLQLQJSURJUDPVVXFKDV <HDUVRIɹɽLEDEDZKRVHFXUULFXOXPLQFOXGHVJHQHUDODQGVSHFLDOL]HG FRXUVHVRQɹɽLEDED VVWUDWHJ\KLVWRU\DQGFXOWXUHDOOGHVLJQHGWR IRVWHUSURIRXQGYDOXHDOLJQPHQW)XUWKHUPRUHZHFXVWRPL]HOHDUQLQJ WUDFNVWRDGGUHVVWKHXQLTXHQHHGVRIVSHFLŀFJURXSVVXFKDVFDPSXV UHFUXLWVDQGQHZWHFKQLFDOKLUHVWRKHOSWKHPEULGJHWKHJDSIURP FDPSXVWRFDUHHUDQGIURPWKHRU\WRSUDFWLFH,Q)<RXUWUDLQLQJ LQLWLDWLYHVZHUHZHOOUHFHLYHGDPRQJQHZHPSOR\HHV)RULQVWDQFH WKH&ORXG,QVSLUDWLRQ&ODVVRI&ORXG,QWHOOLJHQFH*URXSDQGWKH63$5. 7HFK3URJUDPRIɹɽLEDED,QWHUQDWLRQDO'LJLWDO&RPPHUFH*URXSERWK DFKLHYHGDVDWLVIDFWLRQUDWLQJRIRQDSRLQWVFDOH $VHDPOHVVFDPSXVWRFDUHHUWUDQVLWLRQ PD[LPL]HVDQLQWHUQ VSRWHQWLDOWRVHFXUH DIXOOWLPHSRVLWLRQDQGVWUHQJWKHQV RXUWDOHQWSLSHOLQH7DREDRDQG7PDOO *URXSSDLUVHYHU\LQWHUQZLWKDPHQWRU IRURQHRQRQHVSHFLDOL]HGFRDFKLQJ 7KHEXVLQHVVDOVRSURYLGHVDQH[FOXVLYH QHWZRUNLQJSODWIRUPIRULQWHUQVDQG KRVWVUHJXODUHYHQWVWRKHOSWKHPVHW LQWHUQVKLSREMHFWLYHVEXLOGUROHVSHFLŀF H[SHUWLVHDQGVPRRWKO\LQWHJUDWHLQWR WKHZRUNSODFH /HYHUDJLQJWKH$,3URGXFWLYLW\3ODQ 7DREDRDQG7PDOO*URXSJUDQWHG LQWHUQVDFFHVVWRDGYDQFHG$,PRGHOV DQGWRROVDORQJZLWKWKHQHFHVVDU\ WRNHQUHVRXUFHVLQ)<7KLV LQLWLDWLYHHPSRZHUVLQWHUQVWRH[SORUH WHFKQRORJLFDOLQQRYDWLRQVLQKDQGVRQ SUDFWLFH$FFRUGLQJWRVXUYH\UHVXOWV WKHLQWHUQVKLSSURJUDPRIWKHEXVLQHVV DFKLHYHGDVDWLVIDFWLRQUDWLQJRIRQD SRLQWVFDOHIRUWKHŀVFDO\HDU 7DREDRDQG7PDOO*URXS V VXSSRUWIRULQWHUQV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 63 ↗

Slide 64 — 2YHUHPSOR\HHV

$EXQGDQWRSSRUWXQLWLHVIRUWDOHQWGHYHORSPHQW 6XSSRUWLQJ2XU3HRSOH ,PSURYLQJSURIHVVLRQDOFDSDELOLWLHV :HSURYLGHVSHFLDOL]HGWUDLQLQJUHVRXUFHVWDLORUHGWRWKH FRPSHWHQF\UHTXLUHPHQWVIRUHDFKUROH7KHVHUHVRXUFHV DYDLODEOHWRDOOHPSOR\HHVVSDQDEURDGVSHFWUXPRIŀHOGV VXFKDV$,5 'GDWDDQDO\WLFVRSHUDWLRQVSURGXFWVPDUNHWLQJ ULVNPDQDJHPHQWFXVWRPHUVHUYLFHŀQDQFHKXPDQUHVRXUFHV DQG(6* 2XULQWHUQDOOHDUQLQJSODWIRUPVSURYLGHHPSOR\HHVZLWKDFFHVV WRDQH[WHQVLYHUDQJHRIFRXUVHV$OL/HDUQLQJSURYLGHVSUHPLXP FRQWHQWDFURVVFXOWXUHPDQDJHPHQWSURIHVVLRQDOH[SHUWLVH DQGJHQHUDOFRPSHWHQFLHV$7$DQGWKH6LQJXODULW\$FDGHP\ H[SODLQFXWWLQJHGJHWHFKQRORJLHVWREXLOGFRPPXQLWLHVIRU SURIHVVLRQDONQRZOHGJHVKDULQJDQGWHFKQLFDOH[FKDQJH (DFKEXVLQHVVVXSSOHPHQWVWKHVHUHVRXUFHVZLWKWUDLQLQJ SURJUDPVWDLORUHGWRLWVVSHFLŀFQHHGV,Q)<7DREDRDQG 7PDOO*URXSODXQFKHGWKH+HOOR3'VHULHVIRUSURGXFWPDQDJHUV DQGWKH%,'61LJKW6FKRROIRUEXVLQHVVDQDO\VWV6LPLODUO\&ORXG ,QWHOOLJHQFH*URXSUROOHGRXWVSHFLDOL]HGWUDLQLQJLQLWLDWLYHV VXFKDV5 '7DONVDQGDVHULHVRIFORXGSURGXFWFRXUVHV$V $,SHQHWUDWLRQGHHSHQVDFURVVEXVLQHVVVFHQDULRVZHKDYH LQWURGXFHGVSHFLŀFWUDLQLQJSURJUDPV)RUGHWDLOVUHIHUWRWKH VHFWLRQ$,OHDUQLQJDQGSUDFWLFH %H\RQGLQWHUQDOWUDLQLQJZHVXSSRUWHPSOR\HHVLQDFKLHYLQJ SURIHVVLRQDOFHUWLŀFDWLRQV7KHŀQDQFLDOIXQFWLRQRłHUV GHGLFDWHGLQFHQWLYHVIRUHOLJLEOHHPSOR\HHVWRHDUQFUHGHQWLDOV VXFKDV&3$DQG&)$&ORXG,QWHOOLJHQFH*URXSHQFRXUDJHV VWDłWRDFKLHYHFORXGUHODWHGFHUWLŀFDWLRQVVXFKDVWKRVHIRU WKHɹɽLEDED&ORXG&HUWLŀHG$VVRFLDWH$&$DQGɹɽLEDED&ORXG &HUWLŀHG3URIHVVLRQDO$&3 7KH$&$DQG$&3FHUWLŀFDWLRQVFRYHUYDULRXVWHFKQLFDOGRPDLQVVXFKDVODUJHPRGHOVFORXGFRPSXWLQJDQGELJGDWD 7UDLQLQJV\VWHP :HEHOLHYHWKDWLQYHVWLQJLQHPSOR\HHV FDSDELOLWLHVQRWRQO\IXHOVSHUVRQDOJURZWKEXW DOVRSUHSDUHVWKHWDOHQWWKDWZHQHHGIRUWKHIXWXUH$VSHUWKHɹɽ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łHULQJVQXPHURXVLQ SHUVRQWUDLQLQJVHVVLRQVDQGOLYHVWUHDPVFHQWHUHGRQ$, OHDUQLQJDQGDSSOLFDWLRQKDYHEHHQRUJDQL]HGWRSURYLGH HPSOR\HHVZLWKLQWHUDFWLYHOHDUQLQJH[SHULHQFHV :HFKDPSLRQDFRQWLQXRXVOHDUQLQJE\GRLQJDSSURDFK XVLQJWKH$,3URGXFWLYLW\3ODQWRGULYH$,H[SORUDWLRQLQ5 ' DQGEXVLQHVVLQQRYDWLRQ,Q)<DOOHPSOR\HHVUHFHLYHG IUHHWRNHQTXRWDVDQGDFFHVVWRWRROVLQFOXGLQJ:XNRQJDQG 4RGHU7RIXUWKHUVXSSRUW5 'H[WHUQDO$,GHYHORSPHQWWRROV SXUFKDVHGE\VWDłDUHQRZUHLPEXUVDEOH $,OHDUQLQJDQGSUDFWLFH YLVLWHG$,:HQGDR 2YHUHPSOR\HHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 64 ↗

Slide 65 — &DUHHUGHYHORSPHQW

$EXQGDQWRSSRUWXQLWLHVIRUWDOHQWGHYHORSPHQW 6XSSRUWLQJ2XU3HRSOH &DUHHUGHYHORSPHQW :HKDYHHVWDEOLVKHGDQRSHQWUDQVSDUHQWDQGGLYHUVHFDUHHU GHYHORSPHQWV\VWHPWKDWHQFRXUDJHVHPSOR\HHVWRIXOO\OHYHUDJHWKHLU VWUHQJWKVDQGVXSSRUWVWKHLUORQJWHUPJURZWKYLDFOHDUSDWKZD\VDQG FRPSUHKHQVLYHPHFKDQLVPV +DYLQJGHŀQHGDV\VWHPDWLFMREOHYHOLQJVWDQGDUGZHFRQGXFW DQQXDOWDOHQWVWRFNWDNHVWRDVVHVVWKHFDSDELOLWLHVDQGSRWHQWLDORI HPSOR\HHV7KHDQQXDOSHUIRUPDQFHDVVHVVPHQWDOVRVHUYHVDVD WZRZD\FRPPXQLFDWLRQFKDQQHOZKHUHE\HPSOR\HHVVKDUHWKHLU FDUHHUH[SHFWDWLRQVZKLOHPDQDJHUVSURYLGHDGYLFHEDVHGRQEXVLQHVV QHHGVWRKHOSHPSOR\HHVGHWHUPLQHWKHLUQH[WVWHSVZKHWKHUWR GHOYHGHHSHULQWRWKHLUFXUUHQWUROHVH[SDQGWKHLUUHVSRQVLELOLWLHVRU URWDWHWRDQRWKHUMRE:HRł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łHFWLYHFRPPXQLFDWLRQFURVVFXOWXUDO HQJDJHPHQWDQGFURVVUHJLRQDOVWUDWHJLFDOLJQPHQW QHHGVDQGSHUVRQDODVSLUDWLRQV)RUHLWKHUWUDFNZHSURYLGHFRPSHWHQF\ PRGHOVWKDWHVWDEOLVKDFOHDUSDWKZD\IRUJURZWK 3URPRWLRQVDUHSLYRWDOFDUHHUPLOHVWRQHV:HKDYHHVWDEOLVKHGD IDLUDQGWUDQVSDUHQWSURPRWLRQHYDOXDWLRQPHFKDQLVPWKDWZHLJKVD FRPSUHKHQVLYHVHWRIIDFWRUVVXFKDVSHUIRUPDQFHYDOXHVPDQDJHU UHYLHZVDQGSHHUFRPPHQWV)RUUROHVDERYHDFHUWDLQOHYHOZH LQFRUSRUDWHUHVSRQVLELOLW\DVVHVVPHQWVDQGSDQHOLQWHUYLHZVWRHQVXUH WKHFRQVLVWHQF\DQGFUHGLELOLW\RIHYDOXDWLRQFULWHULD.H\VWDJHVLQWKH SURPRWLRQSURFHVVDUHIXOO\RSHQDQGWUDQVSDUHQWZLWKFKDQQHOVIRU IHHGEDFNDQGDSSHDOV %H\RQGSURPRWLRQVZHVXSSRUWKRUL]RQWDOPRELOLW\YLDDPHFKDQLVPIRU LQWHUQDOMREWUDQVIHUV$VSLULQJDQGHOLJLEOHHPSOR\HHVFDQFURVVEXVLQHVV DQGIXQFWLRQDOERXQGDULHVWRSXUVXHJURZWKRQDEURDGHUSODWIRUP ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 65 ↗

Slide 66 — (PSOR\HHKHDOWK

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ŀFDWLRQZHKDYHSXWLQSODFHDPDQDJHPHQW VWUXFWXUH)XUWKHUPRUHZHKDYHIRUPXODWHGWKHɹɽLEDED*URXS(PSOR\HH5LJKWV&RGHWRVDIHJXDUGRFFXSDWLRQDO KHDOWKDQGVDIHW\ 2XUHPSOR\HHVZRUNDFURVVGLłHUHQWVLWHVLQFOXGLQJRŃFHFDPSXVHVɹɽLEDED&ORXG VGDWDFHQWHUVDQG&DLQLDR V ORJLVWLFVIDFLOLWLHV$FFRUGLQJO\ZHKDYHGHYHORSHGVLWHVSHFLŀFVDIHW\PDQDJHPHQWSROLFLHVDQGRSHUDWLRQDO VSHFLŀFDWLRQVIRULQVWDQFHWKH(QYLURQPHQW+HDOWKDQG6DIHW\(+63ROLF\7KHVHDUHLPSOHPHQWHGRQWZRIURQWV ULVNLGHQWLŀFDWLRQDQGSUHYHQWLRQDQGHPHUJHQF\PDQDJHPHQW ,62FHUWLŀHGVLWHV Ȱ =KHMLDQJ&DLQLDR6XSSO\ &KDLQ0DQDJHPHQW &R/WGLQFOXGLQJ ZDUHKRXVLQJVLWHV /RJLVWLFVIDFLOLWLHV Ȱ 0LDRWDQGDWDFHQWHULQ=KDQJEHL =KDQJMLDNRX Ȱ 'DWDFHQWHULQWKH/LQSLQJ(FRQRPLF DQG7HFKQRORJLFDO'HYHORSPHQW=RQH +DQJ]KRX Ȱ +H\XDQGDWDFHQWHU Ȱ )HQJMLQJGDWDFHQWHULQ6KDQJKDL 'DWDFHQWHUV &DPSXVHV Ȱ ;L[L&DPSXV3DUN$DQG3DUN&LQ +DQJ]KRX Ȱ &ORXG9DOOH\&DPSXVLQ+DQJ]KRX Ȱ ɹɽLEDED'LJLWDO(FRV\VWHP ,QQRYDWLRQ3DUNLQ+DQJ]KRX Ȱ %HLMLQJ&KDR\DQJ6FLHQFH 7HFKQRORJ\3DUN Ȱ ;XKXL%LQMLDQJ3DUN=RQH'LQ 6KDQJKDL Ȱ ɹɽLEDED&HQWHU*XDQJ]KRX 1HZ 1HZ 1HZ 1HZ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 66 ↗

Slide 67 — KRXUV

(PSOR\HHKHDOWKDQGYLWDOLW\ 6XSSRUWLQJ2XU3HRSOH 5LVNLGHQWLŀFDWLRQDQGJRYHUQDQFH (PHUJHQF\UHVSRQVHDQGGULOOV 7RPLWLJDWHVDIHW\ULVNVDFURVVYDULRXVW\SHVRIRSHUDWLRQDO VLWHVZHFRPELQHV\VWHPDWLFLGHQWLŀFDWLRQDVVHVVPHQW PRQLWRULQJDQGWUDLQLQJZLWKHQJLQHHULQJWHFKQRORJLHVDQG SURFHVVFRQWUROV 2XUUHJXODUKD]DUGLGHQWLŀFDWLRQHłRUWVVFUHHQIRUVDIHW\ ULVNVLQHTXLSPHQWRSHUDWLRQVRQVLWHWDVNVDQGRSHUDWLQJ HQYLURQPHQWV7KLVSURFHVVHQJDJHVHPSOR\HHVWRLGHQWLI\ KD]DUGVE\DSSO\LQJWKHLUSURIHVVLRQDONQRZOHGJHDQG DSSOLFDEOHVWDQGDUGV)RUDQLQGHSWKDVVHVVPHQWGXULQJ RSHUDWLRQVD-RE6DIHW\$QDO\VLV-6$LVFRQGXFWHGWR GHFRPSRVHWDVNVLQWRVWHSVDQGSLQSRLQWKD]DUGVZKLOHWKH /LNHOLKRRG([SRVXUH&RQVHTXHQFH/(&PHWKRGLVXVHGWR FODVVLI\VDIHW\ULVNVXOWLPDWHO\JHQHUDWLQJDULVNPDS %DVHGRQWKHULVNPDSZHFRQGXFWG\QDPLFLQVSHFWLRQVWKDW LQWHJUDWHYLGHRVXUYHLOODQFHDQG$,UHFRJQLWLRQWRPDLQWDLQ FRQWLQXRXVPRQLWRULQJDQGHDUO\ZDUQLQJIRUNH\ORFDWLRQV DQGKLJKULVNDFWLYLWLHV2QFHDVDIHW\ULVNLVLGHQWLŀHGDQ DOHUWLVWULJJHUHGWRSURPSWDTXLFNUHVSRQVH7REXLOGD V\VWHPDWLFULVNFRQWUROIUDPHZRUNZHKDYHVHWTXDQWLWDWLYH ULVNPRQLWRULQJPHWULFVEDVHGRQWKHRSHUDWLRQDO FKDUDFWHULVWLFVRIGLłHUHQWVLWHVDQGVWUHQJWKHQHGULVN SUHYHQWLRQWKURXJKHQJLQHHULQJPHDVXUHVSURFHVVFRQWUROV DQGLQWHUQDOLQVSHFWLRQV,Q)<ZHIXUWKHUHQKDQFHG VWDQGDUGSURFHVVPDQDJHPHQWIRUKLJKULVNVFHQDULRV VXFKDVKRWZRUNRQRŃFHFDPSXVHVDQGODXQFKHGVDIHW\ JRYHUQDQFHLQLWLDWLYHVIRUORJLVWLFVIDFLOLWLHVWDUJHWLQJIRUNOLIW RSHUDWLRQVDQGHOHFWULFDOWDVNVDPRQJRWKHUWKLQJV :HRUJDQL]HUHJXODUVDIHW\WUDLQLQJWRHQKDQFHULVN DZDUHQHVVDQGSUHYHQWLRQFDSDELOLWLHVDPRQJHPSOR\HHV 2QRXURŃFHFDPSXVHVZHKDYHEHHQUXQQLQJWKH)LUVWDLG 5HVSRQGHUWUDLQLQJSURJUDP,Q)<WKHSURJUDPKHOG FHUWLŀFDWLRQRULHQWHGWUDLQLQJVHVVLRQVWRWDOLQJ 7RHQVXUHHłHFWLYHHPHUJHQF\UHVSRQVHZHKDYH HVWDEOLVKHGDPDQDJHPHQWPHFKDQLVPFRYHULQJ RŃFHFDPSXVHVGDWDFHQWHUVDQGORJLVWLFV IDFLOLWLHV,WLQFRUSRUDWHVFRQWLQJHQF\SODQVDQG VWDQGDUGL]HGUHVSRQVHSURWRFROVDOOVXSSRUWHGE\ DGHGLFDWHGRUJDQL]DWLRQDOIUDPHZRUN :HUHJXODUO\FRQGXFWPXOWLVFHQDULRVLPXODWHG GULOOVWRYDOLGDWHRXUFRQWLQJHQF\SODQVDQG HQKDQFHWKHUHVSRQVHFDSDELOLWLHVRIRXURQ VLWHWHDPV,Q)<ZHFRQGXFWHGGULOOVRQ RŃFHFDPSXVHVIRUŀUHVQDWXUDOGLVDVWHUVDQG PHGLFDOHPHUJHQFLHVWRWHVWWHDPUHVSRQVLYHQHVV DWGDWDFHQWHUVWRDGGUHVVVSHFLŀFRSHUDWLRQDO ULVNVFRYHULQJŀUHUHVSRQVHFRQŀQHGVSDFH UHVFXHDQGHTXLSPHQWIDLOXUHPDQDJHPHQWDQG DWORJLVWLFVIDFLOLWLHVRQDSHULRGLFEDVLVIRUŀUH HYDFXDWLRQVDQGVDIHW\LQFLGHQWUHVSRQVH )XUWKHUPRUHZHHTXLSRXURSHUDWLRQDOVLWHVZLWK HPHUJHQF\UHVSRQVHVXSSOLHVVXFKDVDXWRPDWHG H[WHUQDOGHŀEULOODWRUV$('VŀUVWDLGNLWVDQG ŀUHŀJKWLQJHTXLSPHQW$VRI0DUFK $('VZHUHLQVWDOOHGDFURVVRXURŃFHFDPSXVHV XSXQLWVIURPD\HDUHDUOLHU RIWUDLQLQJIRU)LUVWDLG5HVSRQGHUV KRXUV FXPXODWLYHO\WRWDOQXPEHURI)LUVWDLG 5HVSRQGHUV 2YHU KRXUV$VRI0DUFKLWKDGWUDLQHGDFXPXODWLYHWRWDORI PRUHWKDQ)LUVWDLG5HVSRQGHUV)RURQFDPSXVRŃFH ZRUNDQGEXVLQHVVWUDYHOZHKDYHGHYHORSHG(+6FRXUVHVWKDW HTXLSHPSOR\HHVZLWKEDVLFVDIHW\NQRZOHGJHWHDFKWKHP WRLGHQWLI\ULVNVDQGSUHSDUHWKHPIRUHPHUJHQF\UHVSRQVH WKHUHE\HPSRZHULQJWKHPWRSURWHFWWKHPVHOYHVDQGRWKHUV $WɹɽLEDED&ORXG VGDWDFHQWHUVZHIROORZDVWUXFWXUHGVDIHW\ VFKHGXOHRIGDLO\UHPLQGHUVZHHNO\PRUQLQJEULHŀQJVDQG PRQWKO\WUDLQLQJVHVVLRQV$W&DLQLDR VORJLVWLFVIDFLOLWLHV ZHKDYHHVWDEOLVKHGDVDIHW\DZDUHQHVVFXUULFXOXPWDLORUHG WRGLłHUHQWUROHVLQFOXGLQJIURQWOLQHRSHUDWRUVRSHUDWLRQV PDQDJHUVDQGVDIHW\PDQDJHUV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 67 ↗

Slide 68 — τ

(PSOR\HHKHDOWKDQGYLWDOLW\ 6XSSRUWLQJ2XU3HRSOH 3K\VLFDODQGPHQWDO KHDOWKRIHPSOR\HHV '\QDPLFZRUNLQJHQYLURQPHQWV 7KHL+HDOWK(PSOR\HH+HDOWK0DQDJHPHQW 3URJUDPSURYLGHVHPSOR\HHVZLWKKROLVWLF VXSSRUWKHOSLQJVHHNPHGLFDODVVLVWDQFH RłHULQJKHDOWKFRXQVHOLQJDQGRUJDQL]LQJ ZHOOQHVVDFWLYLWLHV7RIDFLOLWDWHKHDOWKFDUH DFFHVVWKHSURJUDPSURYLGHVFRQVXOWDWLRQV DQGKHDOWKFDUHQDYLJDWLRQ)XUWKHUPRUHLW RłHUVFRPSOLPHQWDU\SURIHVVLRQDOFRXQVHOLQJ RQSK\VLFDODQGPHQWDOKHDOWKZKLFKFDQEH ERRNHGYLDDKRWOLQHRUDQLQWHUQDOGLJLWDOWRRO ,Q)<WKHSURJUDPKRVWHGZHOOQHVV VHVVLRQVDYHUDJLQJDERXWWZRSHUZHHN7KH\ UDQJHGIURPKHDOWKVHPLQDUVRQWUDGLWLRQDO &KLQHVHPHGLFLQHDQGFHUYLFDOVSLQHFDUHWR SHUVRQDOJURZWKFRXUVHVDQGSK\VLRWKHUDS\ VHVVLRQV2XUEXVLQHVVHVDOVRRUJDQL]HG DFWLYLWLHVWDLORUHGWRWKHLUVSHFLŀFQHHGV VXFKDV&ORXG,QWHOOLJHQFH*URXS V(PSOR\HH :HOOEHLQJ3URJUDPZKLFKRUJDQL]HVPRQWKO\ DFWLYLWLHVDQGɹɽLEDED,QWHUQDWLRQDO'LJLWDO &RPPHUFH*URXS VPLQGERG\FRQGLWLRQLQJ SURJUDPVZKLFKIHDWXUHPHGLWDWLRQGDQFH ŀWQHVVDQGER[LQJ :HJURXQGRXUZRUNSODFHVWUDWHJ\LQJUHHQGHYHORSPHQWKXPDQ FHQWULFLW\DQGSURIHVVLRQDOHŃFLHQF\7REXLOGSUHPLHUZRUNLQJ HQYLURQPHQWVIRUHPSOR\HHVZHFRQWLQXRXVO\RSWLPL]HRXU SK\VLFDODQGGLJLWDOZRUNVSDFHV7KLVLQYROYHVEXLOGLQJVSDFLRXV XVHUIULHQGO\RŃFHVSURYLGLQJKHDOWK\OLIHDPHQLWLHVGHSOR\LQJ FRPSUHKHQVLYHVDIHW\PHDVXUHVDQGRłHULQJFRQVLGHUDWH SURIHVVLRQDOVHUYLFHVGHOLYHUHGE\GHGLFDWHGVWDł 2XUGLJLWDOVHUYLFHSODWIRUPRSHUDWHVDOORZLQJHPSOR\HHVWR VXEPLWLQTXLULHVRUUHTXHVWVUHJDUGLQJWKHRŃFHHQYLURQPHQWRU RWKHUPDWWHUVYLDPXOWLSOHFKDQQHOVVXFKDVWKHKRWOLQHDQG $OL$VVLVWDQW,Q)<$OL$VVLVWDQWKDQGOHGDERXWPLOOLRQ LQTXLULHVDOORIZKLFKZHUHUHVSRQGHGWRSURPSWO\ 7RFUHDWHDKHDOWKFRQVFLRXVZRUNSODFHZHHTXLSRXU FDPSXVHVZLWKDGMXVWDEOHHUJRQRPLFFKDLUVJ\PV SK\VLRWKHUDS\URRPVDQGVSRUWVŀHOGV7KHODQGVFDSHG JUHHQVSDFHVRQRXUFDPSXVHVIHDWXUHUHOD[DWLRQIDFLOLWLHV VHUYLQJDVWUDQTXLOUHWUHDWVZKHUHHPSOR\HHVFDQXQZLQG DQGGHFRPSUHVVIURPZRUNUHODWHGVWUHVV :HLQFRUSRUDWHWKH:(//%XLOGLQJ6WDQGDUGLQWRWKH RQJRLQJUHŀQHPHQWRIRXURŃFHHQYLURQPHQWZLWK;L[L &DPSXV3DUN&LQ+DQJ]KRXKDYLQJDFKLHYHGWKH:(// *ROGFHUWLŀFDWLRQ:HDOVRFRQGXFWTXDUWHUO\VDWLVIDFWLRQ VXUYH\VWRLPSURYHRXUFDPSXVVHUYLFHVEDVHGRQ HPSOR\HHIHHGEDFN,Q)<WKHVDWLVIDFWLRQUDWHIRURXU RŃFHHQYLURQPHQWLQFUHDVHGWR :HLQWHJUDWHWKHGLYHUVHQHHGVRIRXU HPSOR\HHVLQWRHYHU\DVSHFWRIFDPSXVGHVLJQ DQGRSHUDWLRQVWKHUHE\FUHDWLQJDZRUNVSDFH WKDWLVLQFOXVLYHDQGZHOFRPLQJ 2XUFDPSXVHVIHDWXUHDFFHVVLEOHUDPSV DQGUHVWURRPVGHVLJQHGLQFRPSOLDQFHZLWK WKH&RGHIRU$FFHVVLELOLW\'HVLJQWRVXSSRUW HPSOR\HHVDQGYLVLWRUVZLWKOLPLWHGPRELOLW\ ,Q)<WKH9LVLWRU&HQWHURI;L[L&DPSXV 3DUN&LQ+DQJ]KRXZDVUHQRYDWHGLQOLQH ZLWKWKHVDPHFRGHDQGHDUQHGDWKUHH VWDUDFFHVVLELOLW\UDWLQJ2XUFDIHWHULDWHDP SURYLGHVSHUVRQDOL]HGVHUYLFHVIRUHPSOR\HHV ZLWKGLVDELOLWLHVRULQMXULHVVXFKDVPHDO VHUYLQJDVVLVWDQFHDWFDIHWHULDVDQGPHDO GHOLYHU\WRZRUNVWDWLRQV 2XUFDPSXVHVSURYLGHORXQJHVIRUSUHJQDQW HPSOR\HHVDQGODFWDWLRQURRPVIRUQXUVLQJ HPSOR\HHV7RFUHDWHDFRPIRUWDEOHDQG VHDPOHVVGLQLQJH[SHULHQFHIRUH[SHFWDQW PRWKHUVRXUFDIHWHULDVRłHUWKHPGHGLFDWHG VHDWVHTXLSSHGZLWKFXVKLRQVDQGEDFNUHVWV )XUWKHUPRUHSULRULW\TXHXLQJVLJQDJHLV SRVWHGWRHQVXUHSULRULWL]HGDFFHVVIRUWKHP $QLQFOXVLYHZRUNSODFH VDWLVIDFWLRQUDWHIRUɹɽLEDED VRŃFHHQYLURQPHQW τ 7KLVLVDQRQOLQHV\VWHPWKDWDGGUHVVHVLQTXLULHVIURPHPSOR\HHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 68 ↗

Slide 69 — 6RFLDO

3URYLGLQJ5HVSRQVLEOH 3URGXFWVIRU&RQVXPHUV 6RFLDO $VGLJLWDOFRQVXPSWLRQHYROYHVFRQVXPHUVGHPDQG EHWWHUTXDOLW\DQGKLJKHUHŃFLHQF\IURPSURGXFWVDQG VHUYLFHV7KH\DUHDOVRLQFUHDVLQJO\IRFXVHGRQSODWIRUP DFFRXQWDELOLW\UHJDUGLQJLQIRUPDWLRQDXWKHQWLFLW\DQG GLJLWDOLQFOXVLRQ:HDVVXPHUHVSRQVLELOLW\IRURXURłHULQJV PDLQWDLQVWULFWTXDOLW\VWDQGDUGVXSKROGPDUNHWLQJ LQWHJULW\DQGOHYHUDJHGLJLWDOWHFKQRORJLHVWREHQHŀWDOO 7KHVHHłRUWVDUHYLWDOWREXLOGLQJXVHUWUXVWDQGHQVXULQJ WKHVXVWDLQDEOHGHYHORSPHQWRIRXUSODWIRUPV 7KLVFKDSWHU &UHDWLQJDJRRGFRQVXPHUH[SHULHQFH %XLOGLQJDQLQFOXVLYHKHDOWK\GLJLWDOOLIH ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 69 ↗

Slide 70 — 2YHU

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ŀYHVWDUVWRUHVRQ7DREDRDQG7PDOOH[FHHGHGRQHPLOOLRQ 2YHUPLOOLRQ 7KH*UHHQ1HW3URJUDPUHGLUHFWHGRYHUPLOOLRQLQDSSURSULDWH VHDUFKHVWRHGXFDWLRQDODQGDZDUHQHVVSDJHV &UHDWLQJDJRRGFRQVXPHUH[SHULHQFH ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 70 ↗

Slide 71 — 6WUDWHJLHVDQGDSSURDFKHV

6WUDWHJLHVDQGDSSURDFKHV 8SKROGLQJDXVHUŀUVWVWUDWHJ\ZHEXLOGRXUEXVLQHVVDURXQG FRQVXPHUQHHGV)RUWKH&KLQHVHPDUNHWRXUHFRPPHUFHRSHUDWLRQV FDWHUWRDEURDGVSHFWUXPRIFRQVXPHUQHHGVZLWKDZLGHYDULHW\RI SURGXFWVDQGVHUYLFHVFUHDWLQJDVKRSSLQJH[SHULHQFHZLWKJRRG SURGXFWVFRPSHWLWLYHSULFHVDQGH[FHOOHQWVHUYLFHV)RURYHUVHDV PDUNHWVZHVWUHQJWKHQORFDOVXSSO\FKDLQVDQGOHYHUDJHDGLYHUVLŀHG VWUDWHJLFIRRWSULQWWRGHOLYHUSUHPLXPRłHULQJVDFURVVYDULRXV FRXQWULHVDQGUHJLRQV 6LQFHRXUSODWIRUPVFRQQHFWVXSSO\DQGGHPDQGZHVDIHJXDUG SURGXFWTXDOLW\DQGVHUYLFHVWDQGDUGVYLDUXOHVPDUNHWPHFKDQLVPV DQGWHFKQLFDOPHDQV&OHDURSHUDWLRQDOUXOHVUHJXODWHPHUFKDQW EHKDYLRUZKLOHHŃFLHQWFRQVXPHUIHHGEDFNFKDQQHOVGULYH VHUYLFHLPSURYHPHQWV'LJLWDOWHFKQRORJLHVFRQWLQXRXVO\RSWLPL]H RSHUDWLRQDOHŃFLHQF\IRUERWKSODWIRUPVDQGPHUFKDQWV 'ULYHQE\RXUFRPPLWPHQWWRPDNLQJKLJKTXDOLW\SURGXFWVDQG VHUYLFHVDYDLODEOHWRHYHU\FRQVXPHUZHFDUHDERXWWKHQHHGVRI GLYHUVHJURXSVVXFKDVVHQLRUFLWL]HQVSHRSOHZLWKGLVDELOLWLHV DQGPLQRUV7KHUHIRUHZHZRUNWRGLVPDQWOHEDUULHUVDQGPLWLJDWH SRWHQWLDOULVNVLQGLJLWDOFRQVXPSWLRQ 8VHUŀUVW VWUDWHJ\ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 71 ↗

Slide 72 — &UHDWLQJDJRRG

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ŀFDWHV3URGXFWVRQRłHUPXVWFRPSO\ZLWKQDWLRQDO ODZVDQGUHJXODWLRQVDVZHOODVQDWLRQDODQGLQGXVWU\VWDQGDUGV:HKDYH HVWDEOLVKHGSURGXFWVSHFLŀFVSHFLŀFDWLRQVWRVWLSXODWHDGGLWLRQDOTXDOLW\ UHTXLUHPHQWV3URGXFWGHVFULSWLRQVPXVWEHFRPSOHWHFRQVLVWHQWDQG DFFXUDWHWRDYRLGPLVOHDGLQJFRQVXPHUV:HUHYLHZPHUFKDQWFUHGHQWLDOVDQG SURGXFWLQIRUPDWLRQDJDLQVWRXURQERDUGLQJUXOHV0HUFKDQWVDUHDXWKRUL]HG WRRSHUDWHRQRXUSODWIRUPVRQO\XSRQSDVVLQJWKLVUHYLHZ 2SWLPL]LQJSURGXFWTXDOLW\ ,PSURYLQJVHUYLFHTXDOLW\ 0HUFKDQWRQERDUGLQJDQGSURGXFWYHWWLQJ 7DREDR5XOHV&HQWHU 7PDOO5XOHV&HQWHU $OL([SUHVV5XOHV&HQWHU ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 72 ↗

Slide 73 — +DQGOLQJQRQFRPSOLDQWSURGXFWV

&UHDWLQJDJRRGFRQVXPHUH[SHULHQFH 3URYLGLQJ5HVSRQVLEOH3URGXFWVIRU&RQVXPHUV :HLGHQWLI\SURGXFWTXDOLW\LVVXHVYLDPRQLWRULQJDQG VSRWFKHFNVLQVWUXFWLQJPHUFKDQWVWRUHPHGLDWHWKHP ZLWKLQDVSHFLŀHGWLPHIUDPH,QWKHFDVHRILQDGHTXDWH UHPHGLDWLRQRUVHYHUHYLRODWLRQVZHHQIRUFHPHDVXUHV VXFKDVGHOLVWLQJUHPRYDORUUHVWULFWLRQVRQOLVWLQJV:H IXOŀOORXUREOLJDWLRQWRDVVLVWLQSURGXFWUHFDOOVLQLWLDWHG E\UHJXODWRU\DXWKRULWLHVRUPDQXIDFWXUHUV :HSURYLGHFRQVXPHUVZLWKUHWXUQDQGH[FKDQJH VHUYLFHV)RUDFRQŀUPHGTXDOLW\LVVXHWKHPHUFKDQW LVUHVSRQVLEOHIRUUHWXUQVUHSODFHPHQWVRUUHSDLUV LQDFFRUGDQFHZLWKUHOHYDQWUXOHV,IDGLVSXWHDULVHV EHWZHHQDFRQVXPHUDQGDPHUFKDQWWKHSODWIRUP LQWHUYHQHVEDVHGRQDQHVWDEOLVKHGSURWRFROIRUGLVSXWH UHVROXWLRQ +DQGOLQJQRQFRPSOLDQWSURGXFWV :HKDYHEXLOWDSURGXFWTXDOLW\PRQLWRULQJV\VWHP FHQWHUHGRQDOJRULWKPLFPRGHOVDQGVXSSRUWHGE\ PDQXDOLQVSHFWLRQV7KLVV\VWHPSHUIRUPVG\QDPLF ULVNLGHQWLŀFDWLRQDQGTXDOLW\PRQLWRULQJEDVHGRQ PXOWLGLPHQVLRQDOGDWDVXFKDVFRQVXPHUIHHGEDFN SURGXFWFKDUDFWHULVWLFVDQGWUDQVDFWLRQGHWDLOV ,Q)<ZHFRQWLQXRXVO\HQKDQFHGWKHFDSDELOLWLHV RIRXUDOJRULWKPLFPRGHOV$,SURYLGHVGHHSLQVLJKWV LQWRXQVWUXFWXUHGGDWDDQGZHWUDQVODWHWKHVHLQVLJKWV LQWRSURGXFWULVNODEHOV7KLVHQDEOHVXVWRSLQSRLQW VSHFLŀFULVNIDFWRUVLQKLJKULVNOLVWLQJVDQGLPSURYH JRYHUQDQFHHŃFLHQF\ :HPDLQWDLQDVWULQJHQWVSRWFKHFNPHFKDQLVPIRU SURGXFWTXDOLW\6SRWFKHFNVDUHFRQGXFWHGE\RXU SODWIRUPVRUWKLUGSDUW\WHVWLQJDJHQFLHVLQDFFRUGDQFH ZLWKWKH7DREDR6SHFLŀFDWLRQVIRU3URGXFW4XDOLW\6SRW &KHFNVWKH7PDOO*HQHUDO&RGHRI&RQGXFWIRU3URGXFW 4XDOLW\6SRW&KHFNVDQGWKH$OL([SUHVV5XOHVIRU 3URGXFW4XDOLW\6SRW&KHFNV,Q)<7DREDRDQG 7PDOOLQWHQVLŀHGVSRWFKHFNVPDUNLQJDQRYHU \HDURQ\HDULQFUHDVHLQIXQGLQJIRUWKHVHLQVSHFWLRQV ,QWKHŀVFDO\HDUWKHQXPEHURIWKLUGSDUW\WHVWLQJ DJHQFLHVSDUWQHULQJZLWKWKHSODWIRUPVLQFUHDVHG WRDVZHH[SDQGHGWKHFROODERUDWLRQQHWZRUN7R HQVXUHULJRURXVDQGLPSDUWLDOWHVWLQJWKHSODWIRUPV KDYHGHSOR\HGDGLJLWDOV\VWHPWRG\QDPLFDOO\DVVHVV WKHVHWHVWLQJDJHQFLHVRQDGDLO\EDVLV)XUWKHUPRUH 7DREDRDQG7PDOOKDYHODXQFKHGWKH&RQVXPHU,Q KDQG,QVSHFWLRQ3URJUDPSURYLGLQJFRQYHQLHQW DXWKHQWLFDWLRQFKDQQHOVIRUFHUWDLQFDWHJRULHVVR WKDWFRQVXPHUVFDQTXLFNO\FKHFNSURGXFWTXDOLW\ YLDFRQVLVWHQF\YHULŀFDWLRQ7KLVLPSURYHVGLVSXWH UHVROXWLRQHŃ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ŀF PHDVXUHVZDVWRKHOSPHUFKDQWVQDYLJDWHWKH TXDOLŀFDWLRQUHTXLUHPHQWVIRUSURGXFWVVXEMHFWWR LQWHQVLYHVXSHUYLVLRQ 'LJLWDOL]DWLRQHPSRZHUVPHU FKDQWV WRLPSURYHSURGXFWTXDOLW\ 7DREDRDQG7PDOOHQKDQFHSURGXFWTXDOLW\PDQDJHPHQW YLDVWDQGDUGL]DWLRQLQLWLDWLYHV$VRI0DUFKRYHU SURGXFWVWDQGDUGVKDGEHHQSXEOLVKHGDQGPDGHSXEOLFO\ DYDLODEOHYLDDWHFKQLFDOVHUYLFHSODWIRUPIRUVWDQGDUGL]DWLRQ 7KHVHVWDQGDUGVVSHFLI\HQWU\UHTXLUHPHQWVIRUSURGXFWVDQG OHYHUDJHDPHWULFEDVHGHYDOXDWLRQV\VWHPWRLGHQWLI\KLJK TXDOLW\RłHULQJV%XLOGLQJRQWKLVIRXQGDWLRQWKHSODWIRUPV XWLOL]HVKRSSLQJDVVLVWDQWIHDWXUHVDQGYLVXDOWDJVWRKHOS FRQVXPHUVŀQGSUHPLXPLWHPVDQGSURYLGHJURZWKVXSSRUW IRUWRSSHUIRUPLQJPHUFKDQWV6WDQGDUGVHWWLQJFRQVXPHU WUXVWDQGPHUFKDQWJURZWKUHLQIRUFHRQHDQRWKHULQD YLUWXRXVF\FOH )XUWKHUPRUHZHMRLQKDQGVZLWKH[WHUQDOVWDNHKROGHUVWR H[SDQGWKHTXDOLW\JRYHUQDQFHHFRV\VWHP)RUWKH&KLQHVH PDUNHW7DREDRDQG7PDOOSDUWQHUHGZLWKWHVWLQJDJHQFLHV LQ)<WRIRXQGWKH3URGXFW4XDOLW\*RYHUQDQFH$OOLDQFH ZKLFKIRFXVHVRQTXDOLW\LQIRUPDWLRQVKDULQJFRQVLVWHQF\ YHULŀ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łRUW WRHQKDQFHWKHFDSDELOLWLHVRIHPSOR\HHVWRLGHQWLI\DQG PDQDJHTXDOLW\ULVNVZHRUJDQL]HGPXOWLSOHVSHFLDOL]HG WUDLQLQJVHVVLRQVLQWKHŀVFDO\HDU %XLOGLQJDQHFRV\VWHPIRU SURGXFWTXDOLW\DQGVDIHW\ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 73 ↗

Slide 74 — 7DREDR,QVWDQW&RPPHUFH

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ŀFDWLRQVDQGWKH)RRG6DIHW\0DQDJHPHQW 6SHFLŀFDWLRQVIRU)RRG'HOLYHU\6HUYLFHV7KHVHDUHUHJXODUO\ UHYLHZHGDQGXSGDWHGWRUHŁHFWWKHODWHVWOHJDODQG UHJXODWRU\UHTXLUHPHQWV7KHEXVLQHVVKDVHVWDEOLVKHGD)RRG 6DIHW\0DQDJHPHQW'HSDUWPHQWZKLFKLVHTXLSSHGZLWK GHGLFDWHGVWDłUHVSRQVLEOHIRUGUDIWLQJSROLFLHVDQGGULYLQJ WKHLPSOHPHQWDWLRQRIJRYHUQDQFHPHDVXUHV$VRI0DUFK 7DREDR,QVWDQW&RPPHUFHKDGLQYLWHGH[WHUQDO LQVWLWXWLRQVWRSURYLGHVSHFLDOL]HGWUDLQLQJIRUHPSOR\HHVLQ WKH)RRG6DIHW\0DQDJHPHQW'HSDUWPHQWHQDEOLQJWKHPWR EHFRPHFHUWLŀHGDVIRRGVDIHW\DGPLQLVWUDWRUV )RRGPHUFKDQWRQERDUGLQJDQGSURGXFWYHWWLQJ 7DREDR,QVWDQW&RPPHUFHUHTXLUHVHDFKIRRGPHUFKDQWWRKDYHD EULFNDQGPRUWDUVWRUHZKRVHDFWXDORSHUDWLQJDGGUHVVPXVWEH FRQVLVWHQWZLWKWKHRQHRQLWVEXVLQHVVOLFHQVHDQGIRRGEXVLQHVV SHUPLW7KHPHUFKDQWPXVWQRWJREH\RQGWKHEXVLQHVVVFRSH VSHFLŀHGE\LWVIRRGEXVLQHVVSHUPLW$YLRODWLRQOHDGVWRDSHQDOW\ IRULQVWDQFHPDQGDWRU\UHPHGLDWLRQDVXVSHQVLRQRIRSHUDWLRQV RUDVWRUHWDNHGRZQ ,Q)<7DREDR,QVWDQW&RPPHUFHOHYHUDJHG$,WHFKQRORJLHV WRHQKDQFHWKHDFFXUDF\DQGHŃFLHQF\RIRQERDUGLQJUHYLHZV 7KHVWRUHYHWWLQJSURFHVVQRZLQWHJUDWHV$,VFUHHQLQJZLWKPDQXDO YHULŀFDWLRQZLWKWKHIRUPHUDFKLHYLQJDDFFXUDF\UDWH )RUWKHSURGXFWOLVWLQJSKDVHWKHSODWIRUPKDVLQWURGXFHG$,LQWR SURGXFWLQIRUPDWLRQUHYLHZV,WVUHYLHZFDSDELOLWLHVKDYHHYROYHG IURPVWDWLFNH\ZRUGŀOWHULQJWRGHHSVHPDQWLFXQGHUVWDQGLQJDQG FRQWH[WXDODVVRFLDWLRQ7KLVLPSURYHVUHYLHZSUHFLVLRQKHOSLQJ HQVXUHWKHDXWKHQWLFLW\DQGDFFXUDF\RISURGXFWLQIRUPDWLRQ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 74 ↗

Slide 75 — &UHDWLQJDJRRGFRQVXPHUH[SHULHQFH

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ŀQGLQJVIURPPRQLWRULQJDQGTXDOLW\VSRWFKHFNV1RQFRPSOLDQW PHUFKDQWVIDFHSHQDOWLHVUDQJLQJIURPZDUQLQJVDQGWHPSRUDU\VXVSHQVLRQVRI RSHUDWLRQVWRSHUPDQHQWVWRUHWDNHGRZQVGHSHQGLQJRQWKHVHYHULW\RIWKHLU YLRODWLRQV7RHQVXUHWKDWIRRGVDIHW\LVVXHVDUHSURPSWO\LGHQWLŀHGWKHSODWIRUP SURYLGHVPXOWLSOHFRPSODLQWFKDQQHOVVXFKDVKRWOLQHVDQGRQOLQHFXVWRPHUVHUYLFH %H\RQGWUDGLWLRQDOFKDQQHOV7DREDR,QVWDQW&RPPHUFHSURDFWLYHO\LGHQWLŀ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ŀHGDQDOHUWLV VHQWWRWKHPHUFKDQWLQTXHVWLRQ:LWKLQWKH7DREDR ,QVWDQW&RPPHUFHDSSFRQVXPHUVFDQYLHZNLWFKHQ RSHUDWLRQVLQUHDOWLPHDQGSURYLGHIHHGEDFN,Q)< DOOFULWLFDOLVVXHVUDLVHGE\FRQVXPHUVZHUHUHPHGLDWHG )XUWKHUPRUHWKHDSSIHDWXUHVWDJVVXFKDV'LQHLQ $YDLODEOHDQG2SHQ.LWFKHQRQPHUFKDQWSDJHVWR HQKDQFHLQIRUPDWLRQWUDQVSDUHQF\ %H\RQGWHFKQLFDOPRQLWRULQJ7DREDR,QVWDQW&RPPHUFH SDUWQHUVZLWKWKLUGSDUW\WHVWLQJDJHQFLHVWRFRQGXFW WDUJHWHGVSRWFKHFNV7KHSODWIRUPKDVDOVRODXQFKHG DQRńLQHVXSHUYLVLRQPRGHOWKDWIHDWXUHVRQVLWH LQVSHFWLRQVE\LWVEXVLQHVVWHDPVDQGUHPRWHUHSRUWLQJ YLDWKH&RPPXQLW\*XDUGLDQ6QDS3URJUDP7KLV FRPELQDWLRQRIŀ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ŀUH SURWHFWLRQDQGHPHUJHQF\UHVSRQVHDWPHUFKDQWORFDWLRQVE\FDSWXULQJDQGXSORDGLQJSKRWRVYLDWKHLUPRELOHSKRQHV 7KLVVWDWHPHQWLVEDVHGRQWKHIDFWWKDWQRSXEOLFDQQRXQFHPHQWLVVXHGE\UHJXODWRU\DXWKRULWLHVIRUDSURGXFWUHFDOOLGHQWLŀHGDQ\RIWKHVHEXVLQHVVHVDVWKHUHVSRQVLEOHHQWLW\ 2XUVHOIRSHUDWHGEXVLQHVVHVLQFOXGH)UHVKLSSR7PDOO6XSHUPDUNHWDQGɹɽLEDED +HDOWKDPRQJRWKHUV,QDFFRUGDQFHZLWKODZVDQGUHJXODWLRQVVXFKDVWKH 3URGXFW4XDOLW\/DZRIWKH3HRSOH V5HSXEOLFRI&KLQDDQGWKH/DZRIWKH3HRSOH V 5HSXEOLFRI&KLQDRQWKH3URWHFWLRQRI&RQVXPHU5LJKWVDQG,QWHUHVWVWKH\KDYH HVWDEOLVKHGWKHLUSURGXFWTXDOLW\PDQDJHPHQWV\VWHPV %DVHGRQWKHLUVSHFLŀFRSHUDWLRQDOFKDUDFWHULVWLFVWKHVHEXVLQHVVHVKDYH HVWDEOLVKHGSURGXFWTXDOLW\PDQDJHPHQWSROLFLHVGHŀ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ŀUPHGYLDDVSRWFKHFNRUDIWHUVDOHVIROORZXSD UHVSRQVHPHFKDQLVPLVWULJJHUHGWRFRPSHQVDWHDłHFWHGFRQVXPHUVKDQGOHWKH SURGXFWDQGKROGWKHPHUFKDQWDFFRXQWDEOHWKHUHE\HQVXULQJWKDWWKHTXDOLW\ LVVXHLVSURSHUO\UHVROYHG ,Q)<RXUPDMRUVHOIRSHUDWHGEXVLQHVVHVPHQWLRQHGDERYHZHUHQRWVXEMHFW WRDQ\SURGXFWUHFDOOVSXEOLFO\DQQRXQFHGE\UHJXODWRU\DXWKRULWLHV 3URGXFWTXDOLW\PDQDJHPHQWIRUVHOIRSHUDWHGEXVLQHVV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 75 ↗

Slide 76 — ,PSURYLQJ

&UHDWLQJDJRRGFRQVXPHUH[SHULHQFH 3URYLGLQJ5HVSRQVLEOH3URGXFWVIRU&RQVXPHUV ,PSURYLQJ VHUYLFHTXDOLW\ :HFRQWLQXRXVO\RSWLPL]HWKHFRQVXPHU MRXUQH\E\UHŀ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ŀFDWLRQVIRU0DQDJLQJ9LRODWLRQVWKH 4XDQ]KDQWXL2QERDUGLQJ5HTXLUHPHQWVDQGWKH$OL([SUHVV6HOOHU%DVLF 5XOHV9LRODWLRQDQG3HQDOW\5XOHVWRFODULI\RXUUHTXLUHPHQWVIRUWKH TXDOLŀFDWLRQVRIDGYHUWLVLQJPHUFKDQWVDQGWKHFRQWHQWRIDGYHUWLVHPHQWV :HWUDFNPDUNHWG\QDPLFVDQGUHJXODWRU\XSGDWHVDVZHLWHUDWHRXUUXOH V\VWHPEDVHGRQXVHUIHHGEDFNDQGQRQFRPSOLDQFHFDVHVWXGLHV:KHQ ZHUHYLVHRXUUXOHVZHFRQVXOWZLWKPHUFKDQWVYLDSXEOLFFKDQQHOV %HIRUHDPHUFKDQWFDQUXQDPDUNHWLQJFDPSDLJQWKHSODWIRUPSHUIRUPV DFRPSOLDQFHUHYLHZRQLWVFUHGHQWLDOVDQGSURPRWLRQDOFRQWHQW$WLHUHG UHYLHZV\VWHPKDVEHHQVHWXSEDVHGRQDULVNFODVVLŀFDWLRQPRGHODQG KLVWRULFDOULVNGDWD7KLVLVDGLłHUHQWLDWHGVWUDWHJ\FRPELQLQJDXWRPDWHG FKHFNVZLWKPDQXDOLQVSHFWLRQV,Q)<WKHSODWIRUPLQFRUSRUDWHG GDWDIURPUHSXWDEOHWKLUGSDUWLHVDQGRŃFLDOSXEOLFUHFRUGVWRHVWDEOLVK DPXOWLGLPHQVLRQDOFURVVYHULŀ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ŁDJJHGDQ DXWRPDWHGKDQGOLQJSURFHGXUHLVWULJJHUHG DQGWKHRXWFRPHLVWKHQPDQXDOO\UHYLHZHG 7KHSODWIRUPDOVRSHUIRUPVURXWLQHULVN VFUHHQLQJIURPDFRQVXPHU VVWDQGSRLQWWR YHULI\WKHHłHFWLYHQHVVRIUXOHHQIRUFHPHQW )XUWKHUPRUHZHPDLQWDLQIHHGEDFNDQG FRPSODLQWFKDQQHOVWRKHDUIURPXVHUV,Q )<$OLPDPDUHFHLYHGQHJDWLYH UHVSRQVHVWRGLVSOD\DGYHUWLVLQJSHUWKRXVDQG LPSUHVVLRQVDQGDFKLHYHGDUHVROXWLRQ UDWHIRUXVHUFRPSODLQWV 2QFHDQDGYHUWLVLQJYLRODWLRQLVFRQŀUPHGWKHSODWIRUPWDNHV DFWLRQVVXFKDVUHWXUQVDQGFRPSHQVDWLRQWRVDIHJXDUGFRQVXPHU ULJKWV0HDQZKLOHWKHSODWIRUPLVVXHVDZDUQLQJWRWKHPHUFKDQW LQYROYHGUHVWULFWVLWVSURPRWLRQDODFWLYLWLHVDQGUHTXLUHVLWWR LPSOHPHQWUHPHGLDWLRQZLWKLQWKUHHGD\V,IWKHPHUFKDQWIDLOV WRPHHWWKLVGHDGOLQHRULILWVSURPRWLRQDOFRQWHQWUHPDLQVQRQ FRPSOLDQWDIWHUUHPHGLDWLRQWKHSURPRWLRQDOFRQWHQWLQTXHVWLRQ ZLOOEHWDNHQRńLQH$PHUFKDQWWKDWKDVUHDFKHGDFHUWDLQSHQDOW\ WKUHVKROGZLOOEHSHUPDQHQWO\H[SHOOHGIURPWKHSODWIRUP 7KHSODWIRUPUHJXODUO\UHYLHZVFRPSODLQWGDWDDQGGLVWLOOV H[SHULHQFHIURPSDVWJRYHUQDQFHSUDFWLFHV7KLVGULYHVUXOH LWHUDWLRQVDQGULVNPRGHOXSGDWHVWRSUHYHQWYLRODWLRQVDWWKH VRXUFH $OLPDPDKDVHVWDEOLVKHGDWUDLQLQJV\VWHPWRUDLVHFRPSOLDQFH DZDUHQHVVDPRQJPHUFKDQWV,Q)<WKHSODWIRUPUHOHDVHG EDWFKHVRIWUDLQLQJFRXUVHVZKLFKZHUHSXVKHGWRRXUPHUFKDQW EDVHYLDQRWLŀFDWLRQV)RUWKHSXUSRVHRISUHFLVHRXWUHDFK WKHSODWIRUPVHQGVWUDLQLQJUHPLQGHUVWRPHUFKDQWVZLWKSULRU YLRODWLRQV$VLWHPSRZHUVPHUFKDQWV$OLPDPDDOVRVWUHQJWKHQV LQWHUQDOUHYLHZFDSDELOLWLHV,Q)<WKHSODWIRUPRUJDQL]HG VL[VSHFLDOL]HGWUDLQLQJVHVVLRQVIRUUHYLHZHUVWRHQKDQFHWKHLU XQGHUVWDQGLQJRIUXOHVDQGWKHLUDELOLW\WRLGHQWLI\ULVNV $OLPDPDPDWFKHVWKHPDUNHWLQJQHHGVRIPHUFKDQWVRQWKH 7DREDRDQG7PDOOSODWIRUPVZLWKPHGLDUHVRXUFHVRZQHGE\ ɹɽLEDEDRUWKLUGSDUWLHV,WFRQGXFWVFRPSOLDQFHUHYLHZVRQ WKHVHPDUNHWLQJQHHGV 3UH VDOHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 76 ↗

Slide 77 — 2SWLPL]LQJUHYLHZV\VWHPVIRUWUDQVSDUHQF\

&UHDWLQJDJRRGFRQVXPHUH[SHULHQFH 3URYLGLQJ5HVSRQVLEOH3URGXFWVIRU&RQVXPHUV ,Q)<WKH*UHHQ1HW3URJUDPOHYHUDJHG$,VHPDQWLF UHFRJQLWLRQDQGDG\QDPLFDOO\XSGDWHGNH\ZRUGOLEUDU\ WREURDGHQLWVVFRSHRIVHDUFKPRGHUDWLRQIRULOOHJDO ZLOGOLIHWUDGLQJGHSUHVVLRQUHODWHGLWHPWUDQVDFWLRQV DQGPRUH'XULQJWKHŀVFDO\HDUWKHSURJUDPDGGHG QHDUO\UHVWULFWHGNH\ZRUGVDQGUHGLUHFWHGRYHU PLOOLRQLQDSSURSULDWHVHDUFKHVWRHGXFDWLRQDODQG DZDUHQHVVSDJHV /HYHUDJLQJLQVLJKWVLQWRXVHUSV\FKRORJ\ZLWKLQ VSHFLŀFVHDUFKVFHQDULRVWKH*UHHQ1HW3URJUDPKDV WUDQVIRUPHGLWVLQWHUYHQWLRQPHFKDQLVPIURPVWDWLF JXLGDQFHLQWRDQLQWHUDFWLYHIUDPHZRUNSRZHUHGE\DQ $,FRPSDQLRQ8VHUVFDQQRZLQGLFDWHWKHLUPRRGVWR UHFHLYHSHUVRQDOL]HGHPSDWKHWLFVXSSRUWDQGHQJDJHLQ UHDOWLPHFRPPXQLFDWLRQZLWKWKH$,FRPSDQLRQZKLFK VHUYHGRYHULQWHUDFWLYHVHVVLRQVLQ)< )XUWKHUPRUHWKH*UHHQ1HW3URJUDPEURDGHQVLWVVRFLDO LPSDFWYLDFURVVVHFWRUDOSDUWQHUVKLSV8QGHUWKH SURJUDP7DREDRKRVWHGWKH7DREDR4LQJFKHQJ&XS =KHMLDQJ3URYLQFLDO&ROOHJLDWH'HEDWHLQ)<WRKHOS \RXQJSHRSOHEHWWHUGLVFHUQOHJLWLPDWHDQGKHDOWK\ FRQWHQW *UHHQ1HW3URJUDP ,Q)<7DREDRDQG7PDOOXSJUDGHGWKH6WRUH([SHULHQFH6FRUHWRWKH5HDO([SHULHQFH6FRUH*URXQGHGLQ DFWXDOWUDQVDFWLRQGDWDWKLVV\VWHPGHSOR\VDOJRULWKPVWRLGHQWLI\IDNHRUGHUVDQGEORFNPDQLSXODWHGUDWLQJV IURPWKHP,WHQVXUHVDQDXWKHQWLFTXDQWLŀFDWLRQRIPHUFKDQWSHUIRUPDQFHDFURVVWKUHHGLPHQVLRQVSURGXFW TXDOLW\ORJLVWLFVVSHHGDQGVHUYLFHDVVXUDQFH)XUWKHUPRUHWKH5HDO([SHULHQFH6FRUHLVHPEHGGHGLQWRWUDŃF GLVWULEXWLRQPHFKDQLVPVGLUHFWLQJPRUHSODWIRUPUHVRXUFHVWRZDUGPHUFKDQWVGHOLYHULQJH[FHSWLRQDOVHUYLFHV $VRI0DUFK7DREDRDQG7PDOOKDGRYHURQHPLOOLRQŀYHVWDUVWRUHV :HFRQWLQXRXVO\HQKDQFHDIWHUVDOHVVHUYLFHWRHQVXUHWKDWFRQVXPHUFRQFHUQV DUHDGGUHVVHGLPSDUWLDOO\DQGHŃFLHQWO\ 2SWLPL]LQJUHYLHZV\VWHPVIRUWUDQVSDUHQF\ ,PSURYLQJDIWHUVDOHVVHUYLFHWRRłHUSHDFHRIPLQG 0LG VDOHV $IWHU VDOHV 7RTXDOLI\IRUŀYHVWDUVWDWXVDVWRUHPXVWDFKLHYHD5HDO([SHULHQFH6FRUHRIDWOHDVWZKLOHDOVRHQVXULQJWKDWLWVVXEVFRUHVIRUSURGXFWTXDOLW\ORJLVWLFVVSHHGDQGVHUYLFHDVVXUDQFHDOOUHDFKRUDERYH :LOGOLIHSURWHFWLRQ .H\ZRUGV $,VHPDQWLF UHFRJQLWLRQ 3HUVRQDOLQIRUPDWLRQ VHFXULW\ KL, P7DR]L \RXU$, FRPSDQLRQ 3URWHFWLQJOLIH DQGKHDOWK 3HUVRQDODQGSXEOLFVHFXULW\ *UHHQ1HW 3URJUDP 6DIHJXDUGLQJ 6DIHJX DJUHHQ D JUH GLJLWDOVSDFH 3URWHFWLRQRIPLQRUV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 77 ↗

Slide 78 — /RJLVWLFV

&UHDWLQJDJRRGFRQVXPHUH[SHULHQFH 3URYLGLQJ5HVSRQVLEOH3URGXFWVIRU&RQVXPHUV /RJLVWLFV /RJLVWLFVIXOŀOOPHQWHŃFLHQF\LVDPDMRUGHWHUPLQDQWRIFRQVXPHU H[SHULHQFH,Q)<ZHDGRSWHGGLłHUHQWORJLVWLFVJRYHUQDQFHVWUDWHJLHV IRU&KLQDDQGRYHUVHDVPDUNHWVJLYHQWKHGLłHUHQFHVEHWZHHQWKHPLQ WUDQVLWGLVWDQFHRSHUDWLRQDOFRPSOH[LW\DQGDIWHUVDOHVWXUQDURXQG )RUWKH&KLQHVHPDUNHW7DREDRDQG7PDOOKDYHGHSOR\HGDOJRULWKPLF PRGHOVWRDVVHVVWKHDFWXDOIXOŀOOPHQWFDSDFLW\RIPHUFKDQWVRQDQKRXUO\ EDVLV)RUWKRVHXQDEOHWRVKLSZLWKLQWKHSURPLVHGWLPHIUDPHWKHLU VKLSSLQJWDJVDUHDXWRPDWLFDOO\DGMXVWHGWRSUHHPSWLYHO\HOLPLQDWHWKHULVN RIRYHUSURPLVLQJ)XUWKHUPRUHRUGHUWUDMHFWRULHVDUHWUDFNHGLQUHDOWLPH ,IDVKLSSLQJDQRPDO\LVGHWHFWHGWKHSODWIRUPLQWHUYHQHVDQGGHPDQGV DSSURSULDWHIXOŀ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ІVFXVWRPHUVHUYLFHWR LQWHUYHQHLQDQDIWHUVDOHVGLVSXWHRUZLVKHVWRŀOHDFRPSODLQWDERXWFXVWRPHU VHUYLFHWKH\FDQVXEPLWWKHLUFRQFHUQRUIHHGEDFNYLDWKHSODWIRUPІVVHUYLFH SRUWDO$OOVXEPLVVLRQVDUHSURPSWO\UHVSRQGHGWRDQGKDQGOHGLQOLQHZLWKRXU VHUYLFHVSHFLŀFDWLRQV:HPRQLWRUVHUYLFHTXDOLW\YLDDFRPELQDWLRQRIFRQVXPHU IHHGEDFNDQGLQWHUQDOVSRWFKHFNVSURPSWO\DVVLJQLQJLGHQWLŀ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ŀOOPHQWRIRUGHUFRPPLWPHQWVSURIHVVLRQDOGHPHDQRUDQG FRPSHQVDWLRQ7KHV\VWHPWULJJHUVUHPHGLDWLRQZRUNŁRZVZKHQVHUYLFH GHYLDWLRQVDUHGHWHFWHG,IDQLPSURSULHW\LVLGHQWLŀHGLQFXVWRPHU VHUYLFHWKHSODWIRUPLQTXHVWLRQFRQWDFWVWKHDłHFWHGFRQVXPHUWR RłHUDQDSRORJ\UHDGGUHVVHVWKHFRQVXPHU VFRQFHUQDQGSURYLGHV FRPSHQVDWLRQ,QWKHHYHQWRIDVHYHUHVHUYLFHSUREOHPDQLQWHUYHQWLRQ PHFKDQLVPLVDFWLYDWHGWRUHDVVLJQWKHFDVHWRDQDOWHUQDWLYHFXVWRPHU VHUYLFHDJHQW)XUWKHUPRUH7DREDRDQG7PDOOKDYHXSJUDGHGWKHLU HYDOXDWLRQIUDPHZRUNIRUFXVWRPHUVHUYLFHDJHQWVIURPDVLQJOH FXVWRPHUVDWLVIDFWLRQUDWHWRDFRPSUHKHQVLYH*RRG6HUYLFH,QGH[ZKLFK FRQVLGHUVVHUYLFHSURFHVVGHVLJQSURIHVVLRQDOGHPHDQRUDQGVXSSRUW HŃFDF\6RPHVHUYLFHFHQWHUVKDYHOHYHUDJHGWKLVLQGH[WRJXLGHLVVXH LGHQWLŀFDWLRQURRWFDXVHDQDO\VLVDQGWHDPFDSDFLW\RULHQWHGWUDLQLQJ ,Q)<WKHFRQVXPHUFRPSODLQWUDWHRQ7DREDRDQG7PDOOZDV 7KH7DREDR&RQVXPHU5LJKWV/LDLVRQ6WDWLRQLVDQDOWHUQDWLYHGLVSXWHUHVROXWLRQ$'5PHFKDQLVPWKDWZHKDYH HVWDEOLVKHGLQFROODERUDWLRQZLWKWKH+DQJ]KRX&RQVXPHU5LJKWV3URWHFWLRQ&RPPLVVLRQ,WSURYLGHVDQHŃ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ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 78 ↗

Slide 79 — %XLOGLQJDQ

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ŁRZVWKH SODWIRUPKDVH[SDQGHGDFFHVVLELOLW\FRYHUDJHWRDZLGHUDUUD\ RISURGXFWVDQGSDJHV,Q)<WKH7DREDRDSSLQWURGXFHG WKH7DREDR,QVWDQW&RPPHUFHVHUYLFHZKLFKLPSRVHGIUHVK DGDSWDWLRQUHTXLUHPHQWVRQH[LVWLQJDFFHVVLELOLW\IHDWXUHVWR DFFRPPRGDWHTXLFNFRPPHUFHVFHQDULRV7RDGGUHVVWKHVH UHTXLUHPHQWVZHŀQHWXQHGWKHDXGLRDQQRXQFHPHQWORJLF ZLWKLQG\QDPLFLQWHUDFWLRQVHQVXULQJWKDWSULFHXSGDWHVDQG DFWLRQDEOHHOHPHQWVIURPSRSXSVDQGŁRDWLQJPHQXVDUHIXOO\ GHWHFWDEOHDQGQDYLJDEOH 7KHVHRSWLPL]DWLRQVDUHQRWLVRODWHGHłRUWV:HKDYHLQWHJUDWHG DFFHVVLELOLW\DQGH[SHULHQFHLPSURYHPHQWLQWRRXUURXWLQH PDQDJHPHQWV\VWHP7DREDRKDVHVWDEOLVKHGDQDFFHVVLELOLW\ PRQLWRULQJPHFKDQLVPZKLFKŀ[HGRYHUUHODWHGLVVXHV LQ)<7KHWHFKQLFDONQRZKRZDFFXPXODWHGGXULQJWKH PRQLWRULQJDQGŀ[LQJSURFHVVHVKDVEHHQGLVWLOOHGLQWRDQ DXWRPDWHGWRROWKDWVFDQVFRGHIRUDFFHVVLELOLW\GHIHFWVDQG SURYLGHVLPSURYHPHQWVXJJHVWLRQVWRSUHYHQWSUREOHPVDW WKHVRXUFH)XUWKHUPRUHWKHSODWIRUPJDWKHUVIHHGEDFNIURP SHRSOHZLWKGLVDELOLWLHVYLDRQOLQHFRPPXQLWLHVDQGRńLQH VXUYH\VWRHVWDEOLVKFRPPXQLFDWLRQFKDQQHOVDQGLQWHJUDWH XVHUQHHGVLQWRWKHSURGXFWRSWLPL]DWLRQSURFHVV ,Q)<WKH7DREDRDSSSURYLGHGDFFHVVLEOHVHUYLFHVIRURYHU YLVXDOO\LPSDLUHGXVHUV $FFHVVLEOHFRQVXPSWLRQ $FFHVVLEOH VKRSSLQJ 5DUH'LVHDVH &DUH,QLWLDWLYH 9LVXDOO\LPSDLUHG QDYLJDWLRQ :KHHOFKDLU QDYLJDWLRQ %DUULHUIUHH7KHDWHU ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 79 ↗

Slide 80 — 3HRSOH V([HPSODU\

%XLOGLQJDQLQFOXVLYHKHDOWK\GLJLWDOOLIH 3URYLGLQJ5HVSRQVLEOH3URGXFWVIRU&RQVXPHUV $FFHVVLEOHKHDOWKFDUH 2YHUPLOOLRQSDWLHQWVZLWKUDUHGLVHDVHVLQ&KLQDIDFHD ORQJWHUPVWUXFWXUDOSUHGLFDPHQWUHJDUGLQJWKHDYDLODELOLW\ DQGDłRUGDELOLW\RIGUXJVDQGVSHFLDOL]HGPHGLFDOIRRGV %HFDXVHWKHSDWLHQWSRSXODWLRQRIDVLQJOHUDUHGLVHDVHLVVPDOO GHYHORSLQJGUXJVRUVSHFLDOL]HGPHGLFDOIRRGVIRULWLQFXUV KLJK5 'FRVWVDQGSURGXFWLRQYROXPHVDUHOLPLWHGXOWLPDWHO\ OHDGLQJWRDQXQVWDEOHVXSSO\7RDGGUHVVWKLVɹɽLEDED+HDOWK KDVOHYHUDJHGLWVSODWIRUPFDSDELOLWLHVWRGHYHORSDUDUH GLVHDVHVHUYLFHPRGHOZKLFKFRQQHFWVSDWLHQWGHPDQGZLWK LQGXVWULDOUHVRXUFHVWRLPSURYHWKHDYDLODELOLW\RIGUXJVDQG VSHFLDOL]HGPHGLFDOIRRGVHQVXULQJDPRUHVWDEOHVXSSO\ )XUWKHUPRUHɹɽLEDED3KLODQWKURS\DQGɹɽLEDED+HDOWKDOORFDWH IXQGVWRSURYLGHH[WUDŀQDQFLDOVXSSRUWIRUORZLQFRPHIDPLOLHV SODJXHGE\UDUHGLVHDVHVEXLOGLQJDPXOWLVWDNHKROGHUFRVW VKDULQJPHFKDQLVPZKHUHPDQXIDFWXUHUVRłHUGLVFRXQWV FKDULWDEOHGRQRUVPDNHFRQWULEXWLRQVDQGSDWLHQWIDPLOLHV EHDUSDUWRIWKHFRVW7KLVPHFKDQLVPZDVŀUVWSXWLQWRSUDFWLFH LQWKH/HPRQ%DE\&DUH,QLWLDWLYHDVSHFLDODVVLVWDQFHSURJUDP IRUPHWK\OPDORQLFDQGSURSLRQLFDFLGHPLD ,Q)<ɹɽLEDED+HDOWKXSJUDGHGWKH/HPRQ%DE\&DUH ,QLWLDWLYHLQWRWKH5DUH'LVHDVH&DUH,QLWLDWLYH3DWLHQWVFDQDSSO\ IRU&DUH&DUGVRQɹɽ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ń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ŃFOLJKWFRXQWGRZQVWRIDFLOLWDWH VDIHUDQGPRUHLQGHSHQGHQWPRELOLW\ ,Q)<$PDSSURFHVVHGRYHU PLOOLRQUHTXHVWVIRUDFFHVVLEOHURXWH SODQQLQJDQGYLVXDOO\LPSDLUHGQDYLJDWLRQ $FFHVVLEOHPRELOLW\ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 80 ↗

Slide 81 — $JHIULHQGO\GLJLWDOVHUYLFHV

%XLOGLQJDQLQFOXVLYHKHDOWK\GLJLWDOOLIH 3URYLGLQJ5HVSRQVLEOH3URGXFWVIRU&RQVXPHUV $JHIULHQGO\GLJLWDOVHUYLFHV :HGULYHDJHIULHQGO\XSJUDGHVWDLORUHGWRWKHUHDOQHHGVRIVHQLRUFLWL]HQVDQGSURYLGHWKHPZLWKGLJLWDOVHUYLFHVWKDWDUHWKRXJKWIXOFRQYHQLHQWDQGHŃFLHQW 7DREDR VDJHIULHQGO\LQQRYDWLRQV $JHIULHQGO\YLGHRYLHZLQJ RQ<RXNX ɹɽLEDED+HDOWK VFDUHIRU KHDULQJLPSDLUHGVHQLRUFLWL]HQV 7DREDR,QVWDQW&RPPHUFH V(OGHUO\0HDO$VVLVWDQFHH3URJUDP ,Q7DREDRODXQFKHGDVHQLRUPRGHWRORZHUXVDJHEDUULHUV IRUROGHUXVHUVYLDDVLPSOLŀHGLQWHUIDFHHQODUJHGIRQWVDQGYRLFH DVVLVWDQFH%DFNWKHQH[LVWLQJDGDSWDWLRQVZHUHPRVWO\IRUWH[W HOHPHQWVRQWKHXVHULQWHUIDFHZKLOHLPDJHVZLWKHPEHGGHGWH[W VXFKDVWKRVHLQSURPRWLRQDOSRVWHUVIURPPHUFKDQWVUHPDLQHG DQDFFHVVLELOLW\JDS,Q)<7DREDRSDUWQHUHGZLWK1DQ\DQJ 7HFKQRORJLFDO8QLYHUVLW\WRGHYHORSDQDJHIULHQGO\SRVWHUJHQHUDWLRQ V\VWHPWKDWXVHVJHQHUDWLYH$,WRWUDQVIRUPFRPSOH[SRVWHUVLQWR DFFHVVLEOHYHUVLRQVIHDWXULQJSURPLQHQWLQIRUPDWLRQHQODUJHGIRQWV DQGVLPSOLŀHGEDFNJURXQGV([SHULPHQWVGHPRQVWUDWHGDQ UHGXFWLRQLQSRVWHUFRPSUHKHQVLRQPLVWDNHVDPRQJXVHUVDJHG 7KLVV\VWHPZDVIHDWXUHGLQWKH&KLQD&RPSXWHU)HGHUDWLRQ V&&) 7HFKIRU*RRG&DVH6WXGLHV ,Q<RXNXODXQFKHGWKH6LOYHU7KHDWHU ZKLFKRYHUFDPHWHFKQLFDOKXUGOHVLQUDUH &KLQHVHFKDUDFWHUUHFRJQLWLRQDQGDXGLRYLGHR V\QFKURQL]DWLRQWRSURYLGHIHDWXUHVOLNHHQODUJHG VXEWLWOHVDJHIULHQGO\DXGLRHłHFWVVLPSOLŀHG LQWHUIDFHVDQGFRQWHQWUHFRPPHQGDWLRQV $VRI0DUFKWKH6LOYHU7KHDWHURłHUHG RYHUHSLVRGHVDFURVV79GUDPDVPRYLHV GRFXPHQWDULHVDQGRWKHUFDWHJRULHV 3UHVE\FXVLVDIRUPRIKHDULQJORVVFDXVHGE\WKHDJLQJ RIWKHDXGLWRU\V\VWHPLVEHFRPLQJPRUHSUHYDOHQW DV&KLQD VSRSXODWLRQDJHVDWDQHYHUIDVWHUSDFH ,Q)<ɹɽLEDED+HDOWKODXQFKHGWKH+HDULQJ $VVLVWDQFH,QLWLDWLYHWRSURYLGHKHDOWKHGXFDWLRQ KHDULQJVFUHHQLQJDQGIUHHPHGLFDOFRQVXOWDWLRQV IRUKHDULQJLPSDLUHGVHQLRUFLWL]HQVSURPRWLQJHDUO\ GHWHFWLRQHDUO\GLDJQRVLVDQGHDUO\LQWHUYHQWLRQ7KH LQLWLDWLYHDOVRRłHUVKHDULQJWHVWDOORZDQFHVIRUWKRVH IDFLQJŀQDQFLDOGLŃFXOWLHV,WVŀUVWFKDULWDEOHVFUHHQLQJ VLWHKDVEHHQHVWDEOLVKHGLQ+DQJ]KRX=KHMLDQJ 7RDGGUHVVWKHGLQLQJFKDOOHQJHVIDFHGE\KRPHERXQGVHQLRUFLWL]HQVZKRDUHDGYDQFHGLQDJHRUFDUHGHSHQGHQW7DREDR ,QVWDQW&RPPHUFHODXQFKHGWKH(OGHUO\0HDO$VVLVWDQFHH3URJUDPLQDGLJLWDOVROXWLRQGHVLJQHGWREULQJJRYHUQPHQW PHDODOORZDQFHVRQOLQH/HYHUDJLQJGLJLWDOQHWZRUNVIRUFLYLODłDLUVWKHSURJUDPFRQQHFWVWKHVHVHQLRUFLWL]HQVZLWK FRPPXQLW\FDIHWHULDVWRHVWDEOLVKDVHDPOHVVRQOLQHWRGRRUVWHSGHOLYHU\SLSHOLQH,WDXWRPDWLFDOO\YHULŀHVXVHULGHQWLWLHV DSSOLHVWKHFRUUHVSRQGLQJDOORZDQFHOHYHOVDQGSURFHVVHVRUGHUVGLUHFWO\7KHVHRUGHUVDUHGHOLYHUHGE\GHGLFDWHGGHOLYHU\ WHDPVZKLFKRSHUDWHLQDŀ[HGURXWHDQGIDPLOLDUIDFHPRGHOWRHQVXUHWLPHO\GHOLYHU\DQGRłHUDGGLWLRQDOVHUYLFHV VXFKDVGRRUVWHSFKHFNLQVDQGPHGLFDWLRQSURFXUHPHQW$VRI0DUFKWKH(OGHUO\0HDO$VVLVWDQFHH3URJUDPZDV DYDLODEOHLQHLJKWFLWLHVLQFOXGLQJ%HLMLQJ6KDQJKDL=KRQJVKDQDQG1DQMLQJ %XLOGLQJRQWKHVHSUDFWLFHV7DREDR,QVWDQW&RPPHUFHKDVFROODERUDWHGZLWKWKH&KLQD6LOYHU,QGXVWU\$VVRFLDWLRQWRUHOHDVH &KLQD VŀUVWRILWVNLQGJURXSVWDQGDUGWKH'LJLWDO6HUYLFH6SHFLŀFDWLRQIRU6HQLRU0HDO$VVLVWDQFHZKLFKRłHUVDUHIHUHQFH IUDPHZRUNIRUWKHVWDQGDUGL]HGGHYHORSPHQWRIWHFKGULYHQVHQLRUFDUHE\HVWDEOLVKLQJFOHDUJXLGHOLQHVIRUVHUYLFH ZRUNŁRZVGDWDVHFXULW\DQGSHUVRQQHOWUDLQLQJ 0LQRUSURWHFWLRQ 7DREDRODXQFKHGDPLQRUPRGHLQ 7DREDRFRQWLQXRXVO\HYROYHVLWVULVN LGHQWLŀ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ŀFDWLRQVIRU 3URWHFWLQJWKH3HUVRQDO,QIRUPDWLRQRI0LQRUV DSSRLQWHGDKHDGRISULYDF\SURWHFWLRQIRU FKLOGUHQDQGHVWDEOLVKHGDUHYLHZPHFKDQLVP IRUDFFHVVLQJSURFHVVLQJDQGXVLQJWKHLU VHQVLWLYHSHUVRQDOLQIRUPDWLRQ7KHSODWIRUP SURKLELWVWKHXVHRIDXWRPDWHGGHFLVLRQPDNLQJ IRUFRPPHUFLDOPDUNHWLQJWKDWWDUJHWVPLQRUV $WWKHWLPHRIUHDOQDPHDXWKHQWLFDWLRQWKH SODWIRUPLGHQWLŀHVFKLOGXVHUVDQGWULJJHUVD PDQGDWRU\UHTXHVWIRUJXDUGLDQDXWKRUL]DWLRQ ,Q)<7DREDRDQG7PDOOFRPSOHWHGD FRPSOLDQFHDXGLWRQWKHSURWHFWLRQRIPLQRUV SHUVRQDOLQIRUPDWLRQ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 81 ↗

Slide 82 — 6RFLDO

%XLOGLQJ'LJLWDO,QWHOOLJHQW 3ODWIRUPVIRU(QWHUSULVH &XVWRPHUV $,LVHPHUJLQJDVDPDMRUGULYLQJIRUFHEHKLQGWKHGLJLWDO WUDQVIRUPDWLRQDQGKLJKTXDOLW\JURZWKRIHQWHUSULVHV8SKROGLQJ ɹɽLEDED VPLVVLRQWRPDNHLWHDV\WRGREXVLQHVVDQ\ZKHUH ZHEHDUWKHUHVSRQVLELOLW\WRLQYHVWKHDYLO\LQLQQRYDWLRQVDQG IXVHGLJLWDOWHFKQRORJLHVVXFKDV$,ZLWKWKHUHDOHFRQRP\7KLV HPSRZHUVPHUFKDQWVDQGHQWHUSULVHVWRVHL]H$,GULYHQQHZ RSSRUWXQLWLHVXOWLPDWHO\IRVWHULQJLQGXVWU\ZLGHGLJLWDODQG LQWHOOLJHQWXSJUDGHVWKDWDUHPRUHVHFXUHDQGRSHQ 7KLVFKDSWHU 'HYHORSLQJUHVSRQVLEOHWHFKQRORJLHV %XLOGLQJKHDOWK\VXVWDLQDEOHHFRPPHUFHSODWIRUPV 6RFLDO ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 82 ↗

Slide 83 — $ERXW

%XLOGLQJ'LJLWDO ,QWHOOLJHQW3ODWIRUPV IRU(QWHUSULVH &XVWRPHUV 'HYHORSLQJUHVSRQVLEOHWHFKQRORJLHV $ERXW :HKDYHEHHQJUDQWHGDERXWSDWHQWVZRUOGZLGH $ERXW 7KH0RGHO6FRSHFRPPXQLW\KRVWHGDERXWRSHQVRXUFHPRGHOV DYDLODEOHIRUIUHHXVHE\GHYHORSHUVZRUOGZLGH PLOOLRQ $FXPXODWLYHWRWDORIPLOOLRQHQWHUSULVHVDQGRUJDQL]DWLRQVKDYH DGRSWHG$,WHFKQRORJLHVRQ'LQJ7DON 2YHU 7KH,624XDOLW\0DQDJHPHQW6\VWHPFHUWLŀFDWLRQFRYHUHG RYHURIɹɽLEDED&ORXG VSXEOLFFORXGSURGXFWV 0RVW,QŁXHQWLDO$,&RPSDQLHV ɹɽLEDEDZDVUHFRJQL]HGDVRQHRIWKH0RVW,QŁXHQWLDO$,&RPSDQLHV 6$,/6WDU$ZDUG 0DUFRDQ$,VROXWLRQIRUPHUFKDQWVZRQWKH6$,/6WDU$ZDUGDWWKH :RUOG$UWLŀFLDO,QWHOOLJHQFH&RQIHUHQFH 2YHU 7KHɹɽLEDED,QWHUQDWLRQDO'LJLWDO&RPPHUFH*URXS,QWHOOHFWXDO3URSHUW\ 3URWHFWLRQ3ODWIRUPKDVVDIHJXDUGHGRYHUULJKWV 0LFURVPDOODQGPHGLXPVL]HGHQWHUSULVHV060(VDFFRXQWHGIRU RIDFWLYHPHUFKDQWVRQ7DREDRDQG7PDOO 2YHUPLOOLRQ 7KH7DREDRDQG7PDOO*URXS,QWHOOHFWXDO3URSHUW\3URWHFWLRQ3ODWIRUPKDV VDIHJXDUGHGRYHUPLOOLRQULJKWV %XLOGLQJKHDOWK\VXVWDLQDEOH HFRPPHUFHSODWIRUPV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 83 ↗

Slide 84 — 6WUDWHJLHVDQGDSSURDFKHV

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ŃFLHQF\IRUUHVRXUFHDOORFDWLRQDQGYDOXHFUHDWLRQ:HKDYH FRQVLVWHQWO\SDUWQHUHGZLWKPHUFKDQWVRQRXUSODWIRUPVWRVHUYHDYDVWFRQVXPHU PDUNHW7KHLUGHHSHQJDJHPHQWKDVVKDSHGWKHɹɽLEDEDWKDWFRQVXPHUVWUXVW WRGD\7HFKQRORJLFDOSURJUHVVLVFKDUDFWHUL]HGE\HYLGHQWQHWZRUNHłHFWVDQGD GLVWULEXWHGQDWXUH%UHDNWKURXJKVDUHUDUHO\DFKLHYHGE\DVLQJOHHQWLW\,QVWHDG WKH\HPHUJHIURPDQHYHUHYROYLQJGLVWULEXWHGQHWZRUNWKDWIHDWXUHVGLYHUVH SDUWLFLSDWLRQDQGFURVVGLVFLSOLQDU\FROODERUDWLRQ,QWKH$,HUDZHŀUPO\EHOLHYH WKDWRSHQVRXUFHWHFKQRORJLHVDQGRSHQWHFKHFRV\VWHPVHQKDQFHLQQRYDWLRQ HŃFLHQF\DQGDFFHOHUDWHDVRFLHW\ZLGHLQWHOOLJHQWWUDQVIRUPDWLRQ 5HOLDELOLW\DQGWUXVWZRUWKLQHVV 7RIRVWHUDUHOLDEOHDQGWUXVWZRUWK\HQYLURQPHQWIRUWHFKQRORJLHVDQGEXVLQHVV DFWLYLWLHVZHDUHFRPPLWWHGWRHVWDEOLVKLQJDGHSHQGDEOHSODWIRUPHFRV\VWHPWKDW SURYLGHVVWDEOHDQGVHFXUHVSDFHVIRUDOOVWDNHKROGHUVWRWKULYH $,GULYHQ VWUDWHJ\ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 84 ↗

Slide 85 — 'HYHORSLQJ

'HYHORSLQJUHVSRQVLEOHWHFKQRORJLHV %XLOGLQJ'LJLWDO,QWHOOLJHQW3ODWIRUPVIRU(QWHUSULVH&XVWRPHUV 'HYHORSLQJ UHVSRQVLEOH WHFKQRORJLHV :HDOZD\VYLHZ5 'DVWKHSULPDU\HQJLQH IRURXUJURZWKDQGOHYHUDJHWHFKQRORJLFDO LQQRYDWLRQWRGULYHVRFLDOHŃFLHQF\DQG LQFOXVLYHGHYHORSPHQW $GYDQFLQJWHFKQRORJLFDO LQQRYDWLRQ :HFRQVLVWHQWO\LQYHVWLQ5 'DQGHQFRXUDJH LQQRYDWLRQ$VRI0DUFKZHKDGEHHQ JUDQWHGDERXWSDWHQWVZRUOGZLGH ,Q)<ɹɽLEDEDPDGHVLJQLŀFDQWVWULGHVLQIXOO VWDFN$,FDSDELOLWLHV 7+HDGKDVEURXJKWLWVSURSULHWDU\*38LQWR SURGXFWLRQDWVFDOHVXSSRUWLQJHQGWRHQG $,ZRUNORDGVIURPWUDLQLQJDQGŀQHWXQLQJWR LQIHUHQFH +LJKSHUIRUPDQFHQHWZRUNLQJGLVWULEXWHGVWRUDJH DQGFORXGRSHUDWLQJV\VWHPVKDYHIRUPHGWKH IRXQGDWLRQRIRXUFORXGFRPSXWLQJLQIUDVWUXFWXUH VLJQLŀFDQWO\ERRVWLQJH[HFXWLRQHŃFLHQF\IRU ODUJHVFDOH$,WDVNV(łRUWVDFURVVWKHVHDVSHFWV KDYHHDUQHGɹɽLEDED&ORXGPXOWLSOHLQWHUQDWLRQDO DFFRODGHV7KHEXVLQHVVKDVEHHQQDPHGD/HDGHU LQ*DUWQHUp0DJLF4XDGUDQW ɢIRU&ORXG'DWDEDVH 0DQDJHPHQW6\VWHPVIRUVL[FRQVHFXWLYH\HDUV *DUWQHUKDVDOVRSRVLWLRQHGLWDVDQ(PHUJLQJ/HDGHU DFURVVDOOIRXUTXDGUDQWVHYDOXDWHGIRUJHQHUDWLYH$, FORXGLQIUDVWUXFWXUHHQJLQHHULQJPRGHORłHULQJV DQGNQRZOHGJHPDQDJHPHQWDSSOLFDWLRQVPDNLQJ LWWKHRQO\FORXGVHUYLFHSURYLGHULQ$VLD3DFLŀFWR HDUQWKLVGLVWLQFWLRQ 'LVFODLPHU*DUWQHUGRHVQRWHQGRUVHDQ\YHQGRUSURGXFWRUVHUYLFHGHSLFWHGLQLWVUHVHDUFKSXEOLFDWLRQVDQGGRHVQRWDGYLVHWHFKQRORJ\XVHUVWRVHOHFWRQO\WKRVHYHQGRUVZLWKWKHKLJKHVWUDWLQJVRURWKHUGHVLJQDWLRQ*DUWQHUUHVHDUFKSXEOLFDWLRQVFRQVLVWRIWKHRSLQLRQV RI*DUWQHUІVUHVHDUFKRUJDQL]DWLRQDQGVKRXOGQRWEHFRQVWUXHGDVVWDWHPHQWVRIIDFW*DUWQHUGLVFODLPVDOOZDUUDQWLHVH[SUHVVHGRULPSOLHGZLWKUHVSHFWWRWKLVUHVHDUFKLQFOXGLQJDQ\ZDUUDQWLHVRIPHUFKDQWDELOLW\RUŀWQHVVIRUDSDUWLFXODUSXUSRVH*$571(5LVDUHJLVWHUHG WUDGHPDUNDQGVHUYLFHPDUNRI*DUWQHU,QFDQGRULWVDŃOLDWHVLQWKH86DQGLQWHUQDWLRQDOO\DQGLVXVHGKHUHLQZLWKSHUPLVVLRQ$OOULJKWVUHVHUYHG $GYDQFLQJWHFKQRORJLFDO LQQRYDWLRQ &KDPSLRQLQJRSHQDQGLQFOXVLY H WHFKQRORJLHV 'HOLYHULQJUHOLDEOHDQG WUXVWZRUWK\FORXGVHUYLFHV ,QWKLVQHZHUDGULYHQE\$,DJHQWVPRGHOVDUH EHLQJUDSLGO\HPEHGGHGLQWRDEURDGUDQJHRIPDMRU ZRUNSODFHDQGEXVLQHVVVFHQDULRVZLWKPRGHO DSSOLFDWLRQLQWHJUDWLRQQRZWLJKWHUWKDQHYHU,QWKH UHDOPRIIRXQGDWLRQDOPRGHOV4ZHQ3OXVUHOHDVHG LQ0DUFKGHOLYHUVVLJQLŀ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ŁRZVYLDVNLOOPRGXOHVWKDWZHKDYHEXLOW7RJHWKHU :XNRQJDQGWKH4ZHQDSSFRQVWLWXWHRXUGXDOSURQJHG $,DSSOLFDWLRQVWUDWHJ\GULYLQJPRPHQWXPDFURVVERWK FRQVXPHUDQGEXVLQHVVVHWWLQJV /HYHUDJLQJLWVIXOOVWDFN$,FDSDELOLWLHV ɹɽLEDED*URXSVHFXUHGLWVŀUVWHYHUVSRW LQWKH$,FDWHJRU\RI)DVW&RPSDQ\ VOLVW RIWKH:RUOG V0RVW,QQRYDWLYH&RPSDQLHV LQ0DUFKVWDQGLQJDVWKHVROH$VLDQ HQWHUSULVHUHFRJQL]HGLQWKLVFDWHJRU\ :RUOG V0RVW ,QQRYDWLYH&RPSDQLHV ɹɽLEDED*URXSZDVQDPHGRQWKH 7,0(0RVW,QŁXHQWLDO&RPSDQLHVOLVWDQG UHFRJQL]HGE\7,0(DVRQHRIWKH0RVW ,QŁXHQWLDO$,&RPSDQLHVRI 0RVW,QŁXHQWLDO $,&RPSDQLHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 85 ↗

Slide 86 — 2YHU

'HYHORSLQJUHVSRQVLEOHWHFKQRORJLHV %XLOGLQJ'LJLWDO,QWHOOLJHQW3ODWIRUPVIRU(QWHUSULVH&XVWRPHUV &KDPSLRQLQJRSHQDQG LQFOXVLYHWHFKQRORJLHV ɹɽLEDEDLVDVWDXQFKEHOLHYHULQDQGDVWHDGIDVW GULYHURIRSHQVRXUFHWHFKQRORJLHVDQGRSHQWHFK HFRV\VWHPV$VRI0DUFKZHKDGRSHQ VRXUFHGRYHU4ZHQPRGHOVWRXVHUVZRUOGZLGH 7KHFDSDELOLWLHVRIWKHVHPRGHOVVSDQPXOWLSOH PRGDOLWLHVLQFOXGLQJWH[WLPDJHVDXGLRDQGYLGHRV 7KH\DUHDYDLODEOHLQDYDULHW\RIYHUVLRQVWKDWFRPH ZLWKGLłHUHQWQXPEHUVRISDUDPHWHUVWRŀWGLYHUVH DSSOLFDWLRQVFHQDULRV2XUFRQWULEXWLRQVWRRSHQ VRXUFH$,VHFXUHGXVDVSRWRQ)RUWXQH V&KDQJHWKH :RUOGOLVWLQ6HSWHPEHU%H\RQGRSHQVRXUFLQJ RXUPRGHOVZHSOD\DQDFWLYHUROHLQQXUWXULQJ DPRGHOHFRV\VWHP$VRI0DUFKWKH 0RGHO6FRSHFRPPXQLW\KRVWHGDERXWRSHQ VRXUFHPRGHOVDYDLODEOHIRUIUHHXVHE\GHYHORSHUV ZRUOGZLGH $VZHOHYHUDJHWHFKQRORJLHVWREHQHŀWDOOOLQJXLVWLF LQFOXVLRQLVDSDUWLFXODUSULRULW\'XHWRGDWDVFDUFLW\ OHVVHUVSRNHQODQJXDJHVGLDOHFWVDQGUHJLRQDO YDULDQWVWHQGWRODFNVXSSRUWIURPKLJKTXDOLW\ PRGHOV7REULGJHWKLVJDSWKH4ZHQPRGHOIDPLO\ KDVVSHFLŀFDOO\HQKDQFHGLWVFRYHUDJHRIORZ UHVRXUFHODQJXDJHVDFURVVUHJLRQVVXFKDV6RXWK $VLD2FHDQLDDQG$IULFD$VRI0DUFK 4ZHQPRGHOVVXSSRUWHGPRUHWKDQODQJXDJHV DQGGLDOHFWVHPSRZHULQJGHYHORSHUVIURPGLYHUVH FXOWXUDOEDFNJURXQGVWRŀQHWXQHDQGGHSOR\PRGHOV ZLWKLQWKHLUORFDOFRQWH[WV 'HOLYHULQJUHOLDEOH DQGWUXVWZRUWK\ FORXGVHUYLFHV )RUWHFKQRORJLHVWRVHUYHFXVWRPHUVZHOO WKH\PXVWŀUVWDQGIRUHPRVWEHUHOLDEOHDQG WUXVWZRUWK\ 3ULRULWL]LQJSURGXFWTXDOLW\ ,QDFFRUGDQFHZLWKVSHFLŀFDWLRQVVXFK DVWKH&ORXG,QWHOOLJHQFH*URXS6WDELOLW\ 0DQDJHPHQW3ROLF\ɹɽLEDED&ORXGKDV HVWDEOLVKHGDFURVVIXQFWLRQDOTXDOLW\ PDQDJHPHQWIUDPHZRUNDQFKRUHGE\PXOWL SDUW\FRRUGLQDWLRQDPRQJ5 'SURGXFW PDQDJHPHQWVWDELOLW\HQJLQHHULQJDQG FXVWRPHUVHUYLFH$PHFKDQLVPGULYHQE\ IXOOOLIHF\FOHSURGXFWPDQDJHPHQWVWDELOLW\ DVVXUDQFHDQGFXVWRPHUIHHGEDFNLVLQSODFH WRVDIHJXDUGSURGXFWTXDOLW\DPLGLWHUDWLRQV $VRI0DUFKWKH,624XDOLW\ 0DQDJHPHQW6\VWHPFHUWLŀFDWLRQFRYHUHG RYHURIɹɽLEDED&ORXG VSXEOLFFORXG SURGXFWVVLJQLŀFDQWO\XSIURPD\HDUHDUOLHU 2SHQVRXUFHWHFKQRORJLHV ,16,*+76 $8720$7,21 &,&'3LSH/LQH $UWLŀFLDOLQWHOOLJHQFH +773+7736 !B +773+7736 !B &ORXGQDWLYH %LJGDWD 'DWDEDVH 2SHUDWLQJ V\ VWHP NHUQHO 2SHQVRXUFHGRYHU4ZHQPRGHOV WRXVHUVZRUOGZLGH 2YHU 7KH0RGHO6FRSHFRPPXQLW\KRVWHG DERXWRSHQVRXUFHPRGHOV $ERXW 7KLVSHUFHQWDJHFRXQWVɹɽLEDED&ORXGІVSXEOLFFORXGSURGXFWVWKDWZHUHFRPPHUFLDOO\DYDLODEOHDVRI0DUFK 2SHQWHFKHFRV\ VWHP \^ PYROGQDPHW[W QHZQDPHW[W FSŀOHW[W FRS\ W[W ROGQDPH W[W ROGQDPH W[W & 64/ 3+3 -$9$ 3\WKRQ \^ PYROGQDPHW[W QHZQDPHW[W FSŀOHW[W FRS\ W[W ROGQDPH W[W ROGQDPH W[W & 64/ 3+3 -$9$ 3\WKRQ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 86 ↗

Slide 87 — ,QPDUNHWPDQDJHPHQW

'HYHORSLQJUHVSRQVLEOHWHFKQRORJLHV %XLOGLQJ'LJLWDO,QWHOOLJHQW3ODWIRUPVIRU(QWHUSULVH&XVWRPHUV ,QPDUNHWPDQDJHPHQW :HOHYHUDJHDPDQDJHPHQWV\VWHP WRPRQLWRURSHUDWLQJPHWULFVDQG WKUHVKROGEUHDFKHVDXWRPDWLFDOO\WULJJHU DOHUWVIRUUDSLGWURXEOHVKRRWLQJ ɹɽLEDED&ORXGDOZD\VSXWVFXVWRPHUQHHGVŀUVWGHOLYHULQJVWDEOHDQGUHOLDEOHVHUYLFHVEDFNHGE\DUREXVWSURGXFWTXDOLW\PDQDJHPHQWV\VWHP 3URGXFWTXDOLW\PDQDJHPHQWV\VWHP )HDWXUHFKDQJHV &KDQJHVDUHVXEMHFWWRDGYDQFHŀOLQJ DQGFXVWRPHULPSDFWDVVHVVPHQWV DFFRPSDQLHGE\ULVNQRWLŀFDWLRQVDQG PLWLJDWLRQSODQVZKHUHQHFHVVDU\ 3URGXFWGLVFRQWLQXDWLRQ :HHQIRUFHDVWDQGDUGL]HGPDQDJHPHQW PHFKDQLVPWRPLQLPL]HGLVUXSWLRQVWR EXVLQHVVRSHUDWLRQVRQWKHFXVWRPHUVLGH 3URGXFWODXQFKHVDQGQHZIHDWXUHUHOHDVHV 7RLPSURYHHŃFLHQF\ZHOHYHUDJH$,WRDQDO\]HDQGGLVWLOOFXVWRPHU UHTXLUHPHQWV,QSDUDOOHOZHFRQGXFWDUFKLWHFWXUDOUHYLHZVFHQWHUHG RQFRQVLVWHQF\DQGV\VWHPDYDLODELOLW\WRHQVXUHWKDWQHZSURGXFWVDUH FRPSDWLEOHZLWKH[LVWLQJRłHULQJV 5HTXLUHPHQWDQDO\VLVDQGGHVLJQ %DVHGRQXVHUH[SHULHQFHZHUHLQIRUFHFURVVSURGXFWLQWHJUDWHG WHVWLQJRQWRSRIVLQJOHSURGXFWWHVWLQJWRHQVXUHVHDPOHVVV\QHUJ\ ZKHQPXOWLSOHSURGXFWVDUHXVHGWRJHWKHU)XUWKHUPRUHZHFRQGXFW V\VWHPDWLFORFDOL]DWLRQWRDFFRPPRGDWHYDULRXVODQJXDJHVWLPH ]RQHVDQGFXUUHQF\IRUPDWVDFURVVYDULRXVFRXQWULHVDQGUHJLRQV 'HYHORSPHQWDQGWHVWLQJ 3URGXFWVPXVWSDVVDIRXUVWDJHYHULŀFDWLRQSURFHVVSUHOLPLQDU\ UHYLHZFORVHGWHVWLQJSXEOLFWHVWLQJDQGŀQDOUHYLHZ2QFHSURGXFWV DUHDSSURYHGYLDWKLVSURFHVVWKHLUVHUYLFHOHYHODJUHHPHQWV6/$V EHFRPHRXUIRUPDOFRPPLWPHQWVWRFXVWRPHUV 3UHODXQFKUHYLHZ ɹɽLEDED&ORXGKDVHVWDEOLVKHGDV\VWHPDWLFULVNPDQDJHPHQWPHFKDQLVPFHQWHUHGRQ DULVNOLVW3URGXFWWHDPVLQGHSHQGHQWO\FRQGXFWULVNUHYLHZVDQGLPSDFWDVVHVVPHQWV RQDUHJXODUEDVLV2QFHDULVNLVLGHQWLŀHGWKHWHDPLQFKDUJHGULYHVUHPHGLDWLRQ DQGWKHVWDELOLW\WHDPRUJDQL]HVDWDUJHWHGYDOLGDWLRQEDVHGRQWKHULVNOHYHO7KLV IRUPVDFORVHGORRS )RUULVNSUHYHQWLRQɹɽLEDED&ORXGSHULRGLFDOO\UHYLHZVKLVWRULFDOLQFLGHQWVDQGVFDQV IRUYXOQHUDELOLWLHVVXFKDVVLQJOHSRLQWVRIIDLOXUHDQGFRPPXQLFDWLRQDQRPDOLHV EHWZHHQDYDLODELOLW\]RQHV$=V7RYDOLGDWHLWVPRQLWRULQJDOHUWLQJDQGDXWR UHFRYHU\FDSDELOLWLHVWKHEXVLQHVVFRQGXFWVIDXOWLQMHFWLRQWHVWLQJZKLFKLQYROYHV VLPXODWLQJW\SLFDOIDLOXUHVOLNHQHWZRUNGLVFRQQHFWLRQVDQGVHUYLFHRXWDJHV,WKDV HVWDEOLVKHGVWDQGDUGVWUHVVWHVWLQJSURWRFROVWRHQVXUHWKHVWDELOLW\DQGUHOLDELOLW\ RIFORXGFRPSXWLQJLQKLJKFRQFXUUHQF\FRPSOH[EXVLQHVVVFHQDULRV)XUWKHUPRUH ɹɽLEDED&ORXGUHJXODUO\RUJDQL]HVGULOOVIRUVHUYLFHSURYLVLRQLQJGLVDVWHUUHFRYHU\ LQ$=VDQGODUJHVFDOHIDLOXUHUHFRYHU\DWGDWDFHQWHUV7KHUHVXOWVRIWKHVHGULOOV VHUYHDVFULWLFDOLQSXWVIRUWKHYDOLGDWLRQRIULVNUHPHGLDWLRQGULYLQJWKHFRQWLQXRXV UHŀQHPHQWRILWVULVNSUHYHQWLRQPHFKDQLVP )RULQFLGHQWUHVSRQVHɹɽLEDED&ORXGOHYHUDJHVDQDXWRPDWHGV\VWHPWRDFFHOHUDWH WURXEOHVKRRWLQJDQGUHFRYHU\$QHPHUJHQF\GHFLVLRQPDNLQJFRPPLWWHHKDVEHHQVHW XSWRFRRUGLQDWHWHFKQLFDOVXSSRUWFXVWRPHUVHUYLFHDQGIXQFWLRQDOGHSDUWPHQWVLQ DWLHUHGLQFLGHQWUHVSRQVHPHFKDQLVPZKLFKHQVXUHVKLJKO\HŃFLHQWDQGVWUHDPOLQHG ZRUNŁRZV$Q\LQFLGHQWWULJJHUVDSRVWPRUWHPDQDO\VLVZKHUHWKHWHDPVLQYROYHG ORRNLQWRWKHURRWFDXVHDQGJHQHUDWHDSRVWLQFLGHQWUHSRUW7DUJHWHGSUHYHQWLYH PHDVXUHVDUHWKHQIRUPXODWHGEDVHGRQWKLVUHSRUWWRERRVWULVNPDQDJHPHQW FDSDELOLWLHV 0DQDJHPHQWPHFKDQLVPIRUSURGXFWTXDOLW\ULVNV $Q$=LVDSK\VLFDOORFDWLRQRSHUDWLQJRQLQGHSHQGHQWSRZHUDQGQHWZRUNLQJLQIUDVWUXFWXUHZLWKLQDUHJLRQ ɹɽLEDED&ORXGYLHZVWKHSURIHVVLRQDOGHYHORSPHQWRIHPSOR\HHVDVDFULWLFDOOHYHU IRUHQVXULQJWKHTXDOLW\RIFORXGVHUYLFHV,Q)<WKHEXVLQHVVRUJDQL]HG WUDLQLQJVHVVLRQVRQSURGXFWPDQDJHPHQWFRYHULQJSURGXFWSHUIRUPDQFHKDQGV RQRSHUDWLRQVDQG$,DSSOLFDWLRQV'XULQJWKHŀVFDO\HDULWDOVRUDQDWUDLQLQJDQG FHUWLŀFDWLRQSURJUDPIRUUROHVLQYROYHGLQVWDELOLW\DVVXUDQFHZLWKDERXWRI HPSOR\HHVDWWKHEXVLQHVVFRPSOHWLQJWKHSURJUDPDQGEHFRPLQJFHUWLŀHG 7UDLQLQJRQSURGXFWTXDOLW\DQGULVNPDQDJHPHQW ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 87 ↗

Slide 88 —

'HYHORSLQJUHVSRQVLEOHWHFKQRORJLHV %XLOGLQJ'LJLWDO,QWHOOLJHQW3ODWIRUPVIRU(QWHUSULVH&XVWRPHUV ,PSURYLQJFXVWRPHUVHUYLFH &XVWRPHUWUXVWKLQJHVQRWRQO\RQWHFKQLFDO FDSDELOLWLHVEXWDOVRRQWKHIXOŀOOPHQWRI VHUYLFHFRPPLWPHQWVDQGSURPSWUHVSRQVHV WRFXVWRPHULQTXLULHVɹɽLEDED&ORXGUHPDLQV FXVWRPHUFHQWULFDQGGULYHVFRQWLQXRXV LPSURYHPHQWVLQVHUYLFHTXDOLW\ ɹɽLEDED&ORXGGHŀQHVVHUYLFHVFRSHVWKURXJK GRFXPHQWVVXFKDVWKHɹɽLEDED&ORXG 3URGXFW6HUYLFH$JUHHPHQWDQGWKHɹɽLEDED &ORXG8VHU$JUHHPHQW7RVWDQGDUGL]H DIWHUVDOHVVHUYLFHWKHEXVLQHVVUHŀQHVWKH ɹɽLEDED&ORXG4XDOLW\6WDQGDUGIRUWKH$IWHU VDOHV6HUYLFH7HDPDQGWKHɹɽLEDED&ORXG 3ROLF\RQ'LVFLSOLQDU\$FWLRQVIRU9LRODWLRQV RQWKH$IWHUVDOHV6HUYLFH7HDP,WLPSURYHV DIWHUVDOHVH[SHULHQFHE\GHSOR\LQJDPXOWL FKDQQHOFXVWRPHUVHUYLFHWHDPDQGDVHQLRU WHFKQLFDOH[SHUWWHDP)RUKLJKO\FRPSOH[ LVVXHVLWSURYLGHVGHGLFDWHG9,3VXSSRUW 7RHQVXUHWKDWFXVWRPHUVDUHKHDUGDQGXQGHUVWRRGLQDQ\ VFHQDULRZHKDYHHVWDEOLVKHGPXOWLSOHFXVWRPHUIHHGEDFN PHFKDQLVPVUDQJLQJIURPLQVWDQWUHVSRQVHVWRGHHSLQVLJKWV ɹɽLEDED&ORXGHQVXUHVWKDWFXVWRPHUVUHFHLYHVXSSRUWDWDQ\ WLPHWKURXJKDQ\FKDQQHO7KHEXVLQHVVSURYLGHVFXVWRPHU VHUYLFHYLDRQOLQHFKDWVSKRQHFDOOVDQG'LQJ7DONPHVVDJHV FRPSOHPHQWHGE\DVHOIVHUYLFHKXEIHDWXULQJKDQG\WRROVDQG )$4VWRH[SHGLWHLVVXHUHVROXWLRQ3URPLQHQWHQWU\SRLQWVDUH DYDLODEOHYLDSXEOLFFKDQQHOVVXFKDVɹɽLEDED&ORXG VRŃFLDO ZHEVLWHIRUFXVWRPHUVWRŀOHFRPSODLQWV(DFKFRPSODLQWWULJJHUV DFORVHGORRSSURFHVVIURPLQWDNHWRIROORZXSDQGUHPHGLDWLRQ :LWKLQRQHZRUNLQJGD\DFXVWRPHUVHUYLFHDJHQWFDOOVWKH FXVWRPHUDQGVHHVWKHFDVHWKURXJKɹɽLEDED&ORXGUHJXODUO\ DQDO\]HVFRPSODLQWW\SHVDQGFROODERUDWHVZLWKUHOHYDQWWHDPVWR GULYHSURGXFWDQGVHUYLFHLPSURYHPHQWV,Q)<WKHEXVLQHVV UHFHLYHGFXVWRPHUFRPSODLQWV 5DWKHUWKDQZDLWLQJIRUIHHGEDFNɹɽLEDED&ORXGSURDFWLYHO\ LQLWLDWHVGLDORJXH7KH&RQQHFWSODWIRUPRQLWVRŃFLDOZHEVLWH JDWKHUVVXJJHVWLRQVIURPFXVWRPHUVUHJDUGLQJSURGXFWVVHUYLFHV DQGWKHZHEVLWHLWVHOI,Q)<WKHEXVLQHVVUHFHLYHG VXJJHVWLRQVRIZKLFKZHUHDGRSWHGXSRQHYDOXDWLRQ 7KH&RQQHFWSODWIRUPOHYHUDJHV$,WRDXWRPDWLFDOO\PDWFK QHZVXJJHVWLRQVZLWKKLVWRULFDOHQWULHVVRWKDWFXVWRPHUVFDQ LQVWDQWO\DFFHVVH[LVWLQJVROXWLRQVWRVLPLODULVVXHV)XUWKHUPRUH WKHEXVLQHVVXWLOL]HVQHWSURPRWHUVFRUH136VXUYH\VWR DVVHVVDOODVSHFWVRIFXVWRPHUH[SHULHQFHFRYHULQJSUHVDOHV FRPPXQLFDWLRQSURFHVVHVSURGXFWVGHOLYHU\DQGDIWHUVDOHV VHUYLFH,Q)<VXFKVXUYH\VZHUHFRQGXFWHGIRURYHUPDMRU FORXGSURGXFWV)RUORZVFRULQJLWHPVɹɽLEDED&ORXGHQJDJHG GLUHFWO\ZLWKFXVWRPHUVWRLGHQWLI\URRWFDXVHVDQGXVHGLQVLJKWV WKXVJDLQHGDVDSULPDU\EDVLVIRUSURGXFWLWHUDWLRQVDQGVHUYLFH XSJUDGHV &XVWRPHUFRPPXQLFDWLRQ ,Q)<ɹɽLEDED&ORXGXSJUDGHGLWVLQWHOOLJHQW TXDOLW\DVVXUDQFHV\VWHPWRSLQSRLQWVHUYLFH VKRUWFRPLQJVYLDDQ$,VFUHHQLQJPDQXDO UHYLHZDSSURDFKIRUVHUYLFHWLFNHWV7KHV\VWHP QRZURXWHVLPSURYHPHQWFKHFNOLVWVWRUHOHYDQW VHUYLFHVWDłDQGWUDFNVWKHLUUHPHGLDWLRQSURJUHVV ,QWKHŀVFDO\HDUWKHEXVLQHVVDOVRRSWLPL]HG LWVFXVWRPHUVHUYLFHLQFHQWLYHPHFKDQLVPWR EXLOGDPXOWLGLPHQVLRQDOHYDOXDWLRQV\VWHP WKDWDFFRXQWVIRUFXVWRPHUVDWLVIDFWLRQ UHVSRQVLYHQHVVDQGLVVXHUHVROXWLRQTXDOLW\ (YDOXDWLRQRXWFRPHVDUHIHGLQWRSHUIRUPDQFH UHVXOWVWRGULYHVHUYLFHVWDQGDUGL]DWLRQDQG HOHYDWHFXVWRPHUH[SHULHQFH ɹɽLEDED&ORXGSULRULWL]HVWKHSURIHVVLRQDOLVP DQGSURGXFWLYLW\RILWVFXVWRPHUVHUYLFHVWDł7KH FXVWRPHUVHUYLFHWHDPUHJXODUO\RUJDQL]HVTXDOLW\ WUDLQLQJVHVVLRQVWKDWGULYHDGKHUHQFHWRVHUYLFH VWDQGDUGVDQGHQKDQFHSUDFWLFDOFDSDELOLWLHVE\ UHYLHZLQJFDVHVWXGLHVDQGVKDULQJEHVWSUDFWLFHV )XUWKHUPRUHWKHFXVWRPHUVHUYLFHSODWIRUPLV HTXLSSHGZLWKDQLQWHOOLJHQWDVVLVWDQFHV\VWHP WKDWDXWRPDWLFDOO\VXPPDUL]HVLQTXLULHV UHFRPPHQGVVROXWLRQVDQGVWUHDPOLQHVSRVW UHVROXWLRQUHYLHZV7KLVHPSRZHUVFXVWRPHU VHUYLFHDJHQWVWRXQGHUVWDQGDQGDGGUHVV LQTXLULHVZLWKJUHDWHUDFFXUDF\XOWLPDWHO\UDLVLQJ UHVROXWLRQHŃFLHQF\DQGFXVWRPHUVDWLVIDFWLRQ 6HUYLFHTXDOLW\WUDFNLQJ ,PSURYLQJVHUYLFHTXDOLW\ 7KLVŀJXUHUHŁHFWVWKHQXPEHURIFXVWRPHUFRPSODLQWVUHFHLYHGIRUɹɽLEDED&ORXGІVRSHUDWLRQVLQ&KLQD ,Q)<ɹɽLEDED&ORXGUHFHLYHG VXJJHVWLRQVRIZKLFKZHUHDGRSWHG XSRQHYDOXDWLRQ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 88 ↗

Slide 89 — 2YHUPLOOLRQ

'HYHORSLQJUHVSRQVLEOHWHFKQRORJLHV %XLOGLQJ'LJLWDO,QWHOOLJHQW3ODWIRUPVIRU(QWHUSULVH&XVWRPHUV 'Hŀ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ŁRZV%\RUFKHVWUDWLQJ PXOWLSOHDJHQWVWRKDQGOHFRPSOH[ORQJUXQQLQJWDVNVZLWKLQDXQLŀHGLQWHUIDFH :XNRQJHYROYHV$,IURPDPHUHFRQYHUVDWLRQDODVVLVWDQWLQWRDZRUNSDUWQHUFDSDEOHRI DXWRQRPRXVO\H[HFXWLQJEXVLQHVVORJLF $FXPXODWLYHWRWDORIRYHUPLOOLRQ HQWHUSULVHVDQGRUJDQL]DWLRQVKDYH DGRSWHG$,WHFKQRORJLHVRQ'LQJ7DON 2YHUPLOOLRQ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 89 ↗

Slide 90 — %XLOGLQJKHDOWK\

%XLOGLQJKHDOWK\VXVWDLQDEOHHFRPPHUFHSODWIRUPV %XLOGLQJ'LJLWDO,QWHOOLJHQW3ODWIRUPVIRU(QWHUSULVH&XVWRPHUV %XLOGLQJKHDOWK\ VXVWDLQDEOH HFRPPHUFH SODWIRUPV 3URYLGLQJGLJLWDO LQWHOOLJHQWFDSDELOLWLHVIRU FRPPHUFH 7KHJOREDOHFRQRP\LVXQGHUJRLQJDSURIRXQG LQWHOOLJHQWWUDQVIRUPDWLRQ+RZHYHUWKHEHQHŀWVRI WHFKQRORJLHVGRQRWPDWHULDOL]HDXWRPDWLFDOO\:LWKRXW HłHFWLYHWRROVDQGDGHTXDWHFDSDELOLWLHVDYDVW QXPEHURIVPDOODQGPHGLXPVL]HGHQWHUSULVHV60(V ZHLJKHGGRZQE\UHVRXUFHFRQVWUDLQWVPD\VWUXJJOH WRIXOO\HQJDJHLQWKHGLJLWDOHFRQRP\:HEHOLHYH WKDWWKHYDOXHRI$,OLHVQRWMXVWLQERRVWLQJSODWIRUP HŃFLHQF\EXWDOVRLQHPSRZHULQJHFRV\VWHPSDUWQHUV WRDFKLHYHDWUDQVIRUPDWLYHOHDSLQWKHLURSHUDWLRQDO FDSDELOLWLHV ,Q)<ZHIRFXVHGRQOHYHUDJLQJ$,WHFKQRORJLHV WRDGGUHVVWKHRSHUDWLRQDOSDLQSRLQWVRIPHUFKDQWV SULPDULO\DFURVVWKUHHPDMRUVFHQDULRVFRQWHQW FUHDWLRQFXVWRPHUVHUYLFHDQGSUHFLVLRQPDUNHWLQJ%\ ORZHULQJWKHDGRSWLRQEDUULHUVZHHQDEOHPHUFKDQWV RIDOOVL]HVWRHTXDOO\EHQHŀ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ŀ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ŀFLDO,QWHOOLJHQFH&RQIHUHQFH 7KHXOWLPDWHYDOXHRIDQ\WRROUHOLHVRQLWVXVHUV DELOLW\ WRIXOO\XQGHUVWDQGDQGXWLOL]HLW7KHUHIRUHDORQJVLGH WKHUROORXWRI$,WRROVZHKDYHODXQFKHGH[WHQVLYH WUDLQLQJLQLWLDWLYHV%H\RQGWUDLQLQJZHKDYHHVWDEOLVKHG DQLQWHJUDWHGRQOLQHRńLQHIHHGEDFNORRSWRPDLQWDLQ RQJRLQJGLDORJXHZLWKPHUFKDQWVYLDVXUYH\V H[KLELWLRQVVDORQVVHPLQDUVDQGVLWHYLVLWVOHYHUDJLQJ LQVLJKWVWKXVJDLQHGWRGULYHFRQWLQXRXVWRROLWHUDWLRQV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 90 ↗

Slide 91 — %XLOGLQJDQRSHQ

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ŀUPHGULVNVZH LQLWLDWHWDUJHWHGPLWLJDWLRQPHDVXUHV)LQDOO\ ZHFRQGXFWV\VWHPDWLFSRVWPRUWHPDQDO\VHV WRXQFRYHUURRWFDXVHVVRWKDWZHFDQHVWDEOLVK 3URWHFWLQJPHUFKDQWV DJDLQVWRSHUDWLQJULVNV 0HUFKDQWVDUHWKHEDFNERQHRIWKH SODWIRUPHFRV\VWHPDQGZHSULRULWL]H EXLOGLQJDQHłHFWLYHIUDPHZRUNWRSURWHFW WKHLUULJKWV 7RHPEHGSURDFWLYHFRPSOLDQFHLQWR PHUFKDQWRSHUDWLRQVZHFRQWLQXRXVO\ XSJUDGH<LQJVKDQJEDRRXURSHUDWLQJ ULVNPDQDJHPHQWVROXWLRQ,Q)< <LQJVKDQJEDRHPSRZHUHGPHUFKDQWV WRFRQGXFWFRPSOLDQFHLQVSHFWLRQVRQ PLOOLRQSURGXFWV)XUWKHUPRUHZH KDYHVWUHQJWKHQHGRXUULVNHDUO\ZDUQLQJ PHFKDQLVP%\H[SDQGLQJHQGWRHQG DOHUWFKDQQHOVDQGDGGUHVVLQJDIXOO VSHFWUXPRIJUDQXODUULVNVFHQDULRVWKLV PHFKDQLVPGHOLYHUVSROLF\LQWHUSUHWDWLRQV DQGFORVHGORRSVROXWLRQV,Q)< LWKHOSHGPLOOLRQPHUFKDQWVDYRLG SRWHQWLDOFRPSOLDQFHYLRODWLRQV 7RVDIHJXDUGPHUFKDQWULJKWV <LQJVKDQJEDRKDVHQKDQFHGWKH LGHQWLŀFDWLRQDQGLQWHUFHSWLRQRIDWWDFNV KDUDVVPHQWDQGLQWHUIHUHQFH,Q)< LWVHQWDURXQGPLOOLRQULVNDOHUWV WRPHUFKDQWV:LWKLQ<LQJVKDQJEDRD GHGLFDWHGSRUWDOLVUHDGLO\DYDLODEOHIRU PHUFKDQWVWRUHSRUWPDOLFLRXVEHKDYLRU DQGKDYHLWKDQGOHGSURPSWO\ ,QRYHUVHDVPDUNHWVYDU\LQJUHJXODWRU\ UHTXLUHPHQWVDFURVVMXULVGLFWLRQVSRVH 7PDOO VHPDLOIRUUHSRUWLQJ XQIDLUFRPSHWLWLRQ 7PDOOWRXVX#ɹɽLEDEDLQFFRP 7DREDR VHPDLOIRUUHSRUWLQJ XQIDLUFRPSHWLWLRQ 7DREDRWRXVX#ɹɽLEDEDLQFFRP SUHYHQWDWLYHPHFKDQLVPVDWWKHVRXUFHWRSUHFOXGH UHFXUUHQFH ,Q)<7DREDRDQG7PDOO*URXSFRQWLQXRXVO\ RSWLPL]HGLWVPDQDJHPHQWPHFKDQLVPIRU SXEOLVKLQJDQGUHYLVLQJSODWIRUPUXOHV5LVNW\SH VSHFLŀFWLHUHGPDQDJHPHQWSURWRFROVZHUHFUHDWHG LQWKLVSURFHVV)RUWKHIRUPXODWLRQDQGUHYLVLRQRI PDMRUSODWIRUPUXOHVWKHEXVLQHVVKDVHVWDEOLVKHG DQLQFOXVLYHFRQVXOWDWLRQPHFKDQLVPLQFRUSRUDWLQJ SURFHGXUHVVXFKDVIHHGEDFNVROLFLWDWLRQDQG SXEOLFFRPPHQWWRLQYLWHEURDGHUSDUWLFLSDWLRQ IURPYDULRXVVWDNHKROGHUV7KLVSURDFWLYHDSSURDFK HQVXUHVWKDWSODWIRUPUXOHVDEVRUEGLYHUVH SHUVSHFWLYHVWRHłHFWLYHO\VDIHJXDUGWKHULJKWV RIDOOVWDNHKROGHUVRQWKHSODWIRUPVDQGIRVWHUD VWDEOHKHDOWK\HFRV\VWHPIRUWUDQVDFWLRQV )XUWKHUPRUHZHKDYHHVWDEOLVKHGLQWHUQDODQG H[WHUQDOUHSRUWLQJFKDQQHOVHQDEOLQJPHUFKDQWV DQGRWKHUVWDNHKROGHUVWRŀOHFRPSODLQWVDQG SURYLGHIHHGEDFNUHJDUGLQJLVVXHVVXFKDV PRQRSROLVWLFSUDFWLFHVDQGXQIDLUFRPSHWLWLRQRQ RXUSODWIRUPV 7DREDRDQG7PDOO*URXSSODFHVDSUHPLXPRQ FRPSHWLWLRQFRPSOLDQFHDZDUHQHVVDPRQJ HPSOR\HHV,Q)<WKHEXVLQHVVRUJDQL]HG UHOHYDQWWUDLQLQJVHVVLRQVWDUJHWLQJNH\RSHUDWLRQDO SHULRGV7KHVHWUDLQLQJVHVVLRQVWRRNYDULRXV IRUPVVXFKDVLQSHUVRQOHFWXUHVDQGOLYHVWUHDPV UHFRUGLQJDWRWDODWWHQGDQFHRIRYHU DGGLWLRQDOFRPSOLDQFHFKDOOHQJHVIRU PHUFKDQWV7DLORULQJLWVDSSURDFKWRWKH VSHFLŀFUHJXODWRU\FKDUDFWHULVWLFVRIHDFK PDUNHWɹɽLEDED,QWHUQDWLRQDO'LJLWDO &RPPHUFH*URXSSURYLGHVPHUFKDQWV ZLWKDRQHVWRSEDFNHQGPDQDJHPHQW WRROWKDWPRQLWRUVSURGXFWFRPSOLDQFH ULVNVLQUHDOWLPH&RYHULQJHDUO\ZDUQLQJ VLJQVVXFKDVWKRVHLGHQWLŀ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ɹɽLEDED,QWHUQDWLRQDO'LJLWDO&RPPHUFH *URXSRłHUVUHJXODWRU\LQVLJKWV FRPSOLDQFHJXLGHOLQHVDQGVSHFLDOL]HG WUDLQLQJVHVVLRQV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 91 ↗

Slide 92 — 3URWHFWLQJ

%XLOGLQJKHDOWK\VXVWDLQDEOHHFRPPHUFHSODWIRUPV %XLOGLQJ'LJLWDO,QWHOOLJHQW3ODWIRUPVIRU(QWHUSULVH&XVWRPHUV 3URWHFWLQJ LQWHOOHFWXDOSURSHUW\ 7DREDRDQG7PDOO*URXSDQGɹɽLEDED ,QWHUQDWLRQDO'LJLWDO&RPPHUFH*URXS KDYHVHWXSWDVNIRUFHVFKDUJHG ZLWKFRQWLQXRXVO\RSWLPL]LQJWKHLU LQWHOOHFWXDOSURSHUW\SURWHFWLRQ V\VWHPV5XOHGRFXPHQWVVXFKDVWKH 7DREDR6SHFLŀFDWLRQVIRU0DUNHWSODFH 0DQDJHPHQWDQG9LRODWLRQ+DQGOLQJ WKH7PDOO0DUNHWSODFH0DQDJHPHQW 6SHFLŀ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ɹɽLEDED,QWHUQDWLRQDO 'LJLWDO&RPPHUFH*URXSFRQVWDQWO\HQKDQFHWKHLULGHQWLŀFDWLRQDQG SUHYHQWLRQFDSDELOLWLHVWRUHGXFHWKHRFFXUUHQFHRILQIULQJHPHQWVLQYROYLQJ SURGXFWVRUEXVLQHVVDFWLYLWLHV :HSURYLGHLQWHOOHFWXDOSURSHUW\RZQHUVZLWKFRPSUHKHQVLYHSURWHFWLRQ SODWIRUPVDQGDFRQWLQXRXVO\RSWLPL]HGXVHUH[SHULHQFHWRHQVXUHWKDWWKHLU ULJKWVDUHVDIHJXDUGHG 7KH7DREDRDQG7PDOO*URXS,QWHOOHFWXDO3URSHUW\3URWHFWLRQ3ODWIRUPSURYLGHV YDULRXVIHDWXUHVVXFKDVFRPSODLQWLQWDNHDSSHDOPDQDJHPHQWDQGPXOWL SDUW\QRWLŀFDWLRQ3RZHUHGE\$,LWVWDQGDUGL]HVHQIRUFHPHQWZRUNŁRZV WRDXWRPDWLFDOO\GHWHUPLQHHYLGHQWLDU\UHTXLUHPHQWVEDVHGRQŀOLQJ LQIRUPDWLRQIRULQVWDQFHUHJDUGLQJWUDGHPDUNVSDWHQWVDQGFRS\ULJKWV 7KHVHUHTXLUHPHQWVDUHVHQWWRLQWHOOHFWXDOSURSHUW\RZQHUVDVVWUXFWXUHG JXLGHOLQHVDQGWHPSODWHV7KHSODWIRUPDOVRKDVDXVHUH[SHULHQFHIROORZXS PHFKDQLVP0HDQZKLOHWKHɹɽLEDED,QWHUQDWLRQDO'LJLWDO&RPPHUFH*URXS ,QWHOOHFWXDO3URSHUW\3URWHFWLRQ3ODWIRUPRłHUVDRQHVWRSFURVVSODWIRUP FRPSODLQWVHUYLFH7RFUHDWHDEHWWHUH[SHULHQFHIRULQWHUQDWLRQDOXVHUVLWKDV LPSOHPHQWHGDPXOWLOLQJXDOXSJUDGH$VRI0DUFKLWVXSSRUWHG ODQJXDJHV $VRI0DUFKDERXWLQWHOOHFWXDOSURSHUW\RZQHUVKDG UHJLVWHUHGRQWKH7DREDRDQG7PDOO*URXS,QWHOOHFWXDO3URSHUW\3URWHFWLRQ 3ODWIRUPZKLFKKDGSURWHFWHGRYHUPLOOLRQULJKWV%\WKLVGDWHWKH ɹɽLEDED,QWHUQDWLRQDO'LJLWDO&RPPHUFH*URXS,QWHOOHFWXDO3URSHUW\3URWHFWLRQ 3ODWIRUPKDGRQERDUGHGRYHULQWHOOHFWXDOSURSHUW\RZQHUVDQG SURWHFWHGPRUHWKDQULJKWVIURPFRXQWULHVDQGUHJLRQV 7REXLOGDKHDOWK\HFRPPHUFHHFRV\VWHPZHSURYLGH PHUFKDQWVZLWKLQWHOOHFWXDOSURSHUW\FRPSOLDQFHWUDLQLQJ YLDYDULRXVIRUPDWVVXFKDVWH[WLPDJHVDQGYLGHRV,Q )<7DREDRDQG7PDOOKRVWHGWUDLQLQJVHVVLRQV FRYHULQJWUDGHPDUNVSDWHQWVSRUWUDLWULJKWVDQG FRS\ULJKWV:LWKLQLWVUXOHVFHQWHU$OL([SUHVVODXQFKHG DQLQWHOOHFWXDOSURSHUW\OHDUQLQJKXEZKLFKRłHUV FRPSOLDQFHJXLGHOLQHVIRUPXOWLSOHVHFWRUVVXFKDV KRPHIXUQLVKLQJVPRELOHSKRQHVDQGFORWKLQJWRKHOS PHUFKDQWVEXLOGDV\VWHPDWLFNQRZOHGJHIUDPHZRUN 7KH7DREDRDQG7PDOO*URXS2ULJLQDOLW\ 3URWHFWLRQ3ODWIRUPSURYLGHVŀOLQJVHUYLFHV DQGULJKWVSURWHFWLRQIRURULJLQDOZRUNV GHEXWHGE\PHUFKDQWVRQ7DREDRRU7PDOO VXFKDVLPDJHVVKRUWYLGHRVDQGFUHDWLYH GHVLJQV$VRI0DUFKWKHSODWIRUP KDGKHOSHGDFXPXODWLYHWRWDORI PLOOLRQPHUFKDQWVSURWHFWDSSUR[LPDWHO\ PLOOLRQLPDJHVDURXQGPLOOLRQ VKRUWYLGHRVDQGPLOOLRQGHVLJQ PDQXVFULSWV 7RDGGUHVVQHZFKDOOHQJHVHPHUJLQJIURP WKHRZQHUVKLSRI$,JHQHUDWHGFRQWHQWZH KDYHLQWURGXFHGDVDQGER[EDVHGULJKWV FRQŀUPDWLRQPHFKDQLVPZKLFKOHYHUDJHV DQHQGWRHQGSURWHFWLRQZRUNŁRZ FRYHULQJŀUVWSXEOLFDWLRQŀOLQJ$,PDUNLQJ DQGFRPSODLQWKDQGOLQJ7KLVPHFKDQLVP SURYLGHVPHUFKDQWVZLWKFOHDURZQHUVKLS VDIHJXDUGVIRUKLJKTXDOLW\$,JHQHUDWHG FRQWHQWVXFKDVLPDJHVFUHDWLQJV\QHUJ\ EHWZHHQWHFKQLFDOLQQRYDWLRQDQGULJKWV SURWHFWLRQ 7DREDRDQG7PDOO*URXS2ULJLQDOLW\ 3URWHFWLRQ3ODWIRUP ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 92 ↗

Slide 93 — &UHDWLQJDGLYHUVH

%XLOGLQJKHDOWK\VXVWDLQDEOHHFRPPHUFHSODWIRUPV %XLOGLQJ'LJLWDO,QWHOOLJHQW3ODWIRUPVIRU(QWHUSULVH&XVWRPHUV &UHDWLQJDGLYHUVH HFRPPHUFHFRPPXQLW\ 'LYHUVHHQWUHSUHQHXUVSDUWLFXODUO\WKRVHRSHUDWLQJ 060(VJUDYLWDWHWRZDUGV7DREDRZKLFKLV QLFNQDPHGWKHXQLYHUVDO7DREDR,Q)< 060(VDFFRXQWHGIRURI7DREDRDQG7PDOO V DQQXDODFWLYHPHUFKDQWV7RVXVWDLQFRPPHUFLDO YLWDOLW\7DREDRDQG7PDOO*URXSKDVUDPSHGXS VXSSRUWIRUQHZPHUFKDQWV7DREDRKDVODXQFKHG WKH1HZ0HUFKDQW6XSSRUW3ODQRłHULQJWUDŃ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ɹɽLEDEDFRPRXULQWHJUDWHGLQWHUQDWLRQDOZKROHVDOH PDUNHWSODFHFUHDWHVJOREDOJURZWKRSSRUWXQLWLHV IRUHQWHUSULVHV,Q)<LWFRQQHFWHGRYHU VHOOHUVZRUOGZLGHZLWKRYHUPLOOLRQEX\HUVIURP FRXQWULHVDQGUHJLRQV 'ULYLQJPXOWLVWDNHKROGHUFRJRYHUQDQFH ,QWHOOHFWXDOSURSHUW\SURWHFWLRQFDQQRWEHDFKLHYHGE\DQ\ SODWIRUPDORQH6LQFHLWVLQFHSWLRQLQWKHɹɽLEDED$QWL &RXQWHUIHLWLQJ$OOLDQFH$$&$KDVEHHQFRPPLWWHGWRQXUWXULQJ DPXOWLVWDNHKROGHUFRJRYHUQDQFHHFRV\VWHPIRULQWHOOHFWXDO SURSHUW\SURWHFWLRQ$VRI0DUFKEUDQGVKDGMRLQHG WKHDOOLDQFH 7RDGGUHVVWKHGHHSVHDWHGFKDOOHQJHVLQLQWHOOHFWXDOSURSHUW\ HQIRUFHPHQWDQGFRPEDWFRPSOH[LQIULQJHPHQWWDFWLFVVXFKDV FRYHUWFRXQWHUIHLWLQJDQGWKHFRPLQJOLQJRIJHQXLQHJRRGVDQG NQRFNRł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ɹɽLEDED,QWHUQDWLRQDO'LJLWDO&RPPHUFH*URXSFRQWLQXRXVO\ GHHSHQVLWVFRRSHUDWLRQZLWKRUJDQL]DWLRQVZRUOGZLGHKDYLQJ HVWDEOLVKHGSDUWQHUVKLSVZLWKWKH:RUOG,QWHOOHFWXDO3URSHUW\ 2UJDQL]DWLRQ:,32WKH,QWHUQDWLRQDO$QWL&RXQWHUIHLWLQJ&RDOLWLRQ ,$&&DQGWKH.RUHD,QWHOOHFWXDO3URSHUW\3URWHFWLRQ$JHQF\ .2,3$1RWDEO\WKHEXVLQHVVKDVZRUNHGZLWKWKH,$&&RQWKH 0DUNHW6DIHp3URJUDPWRHVWDEOLVKDFROODERUDWLRQPHFKDQLVP WKDWSURYLGHVSODWIRUPJUDQWVDQG,$&&DVVLVWDQFHIRU060(VWR IDFLOLWDWHULJKWVSURWHFWLRQDQGFRPSODLQWŀ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ŃFVXSSRUWDQGFRQVXPHU DZDUHQHVVHQKDQFHPHQWWKHEXVLQHVVDFFHOHUDWHV WKHJURZWKRIVWRUHVVSHFLDOL]LQJLQLQWDQJLEOHFXOWXUDO KHULWDJHSURGXFWVDQGWKHFRPPHUFLDOVXFFHVVRI DUWLVDQVZKRPDNHWKHVHLWHPV,Q)<WKHWRWDO QXPEHURIFHUWLŀHGVWRUHVUXQE\LQWDQJLEOHFXOWXUDO KHULWDJHEHDUHUVVXUJHGE\\HDURQ\HDU 7RDGGUHVVWKHFKDOOHQJHVIDFHGE\PHUFKDQWVVHOOLQJ LQWDQJLEOHFXOWXUDOKHULWDJHSURGXFWVVXFKDVKLJK RSHUDWLQJEDUULHUVDQGOLPLWHGPDUNHWUHDFKZHRłHU IUHHRQOLQHDQGRńLQHFRXUVHVDVZHOODVJRYHUQPHQW SDUWQHUHGWUDLQLQJSURJUDPV7KHVHWUDLQLQJUHVRXUFHV FRYHUVWRUHRSHUDWLRQV$,WRRODSSOLFDWLRQVDQGGLJLWDO PDUNHWLQJ,QSHUVRQHYHQWVOLNHWKH7DREDR,QWDQJLEOH &XOWXUDO+HULWDJH*DUGHQ3DUW\7UHDVXUHVRI&KLQD DOORZFRQVXPHUVWRH[SHULHQFHWKHKXPDQWRXFKRI FUDIWVPDQVKLSŀUVWKDQGGHHSHQLQJSXEOLFDSSUHFLDWLRQ DQGSDVVLRQIRUWUDGLWLRQDOFXOWXUH %RRVWLQJWKHVDOHVRILQWDQJLEOHFXOWXUDOKHULWDJHSURGXFWV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 93 ↗

Slide 94 — 6RFLDO

*LYLQJ%DFNWR6RFLHW\ DQG&RPPXQLWLHV 6LQFHWKHLQFHSWLRQRIɹɽLEDEDZHKDYHFORVHO\DOLJQHG EXVLQHVVJURZWKZLWKRXUUHVSRQVHWRVRFLDOSUREOHPV'ULYLQJ EXVLQHVVVXFFHVVDQGVRFLDOYDOXHLQWDQGHPQRWRQO\IRVWHUV FRPPXQLW\SURVSHULW\DQGIDFLOLWDWHVHQYLURQPHQWDOSURWHFWLRQ EXWDOVREXLOGVWKHXVHUEDVHDQGPDUNHWVSDFHIRURXU VXVWDLQDEOHJURZWK 7KLVFKDSWHU 3DUWLFLSDWLQJLQUXUDOUHYLWDOL]DWLRQ (PHUJHQF\UHOLHI /HYHUDJLQJWHFKQRORJLHVWRWDFNOHVRFLDOFKDOOHQJHV $GYDQFLQJHQWUHSUHQHXUVKLSDQGHPSOR\PHQW 6RFLDO ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 94 ↗

Slide 95 — KRXUV

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ŀFDWLRQ 3URJUDPODXQFKHGE\'LQJ7DONDQGDFKLHYHGWKH FHUWLŀFDWLRQ $ERXW $PDS V/LYH:DWHUORJJLQJ0DSFRYHUHGDERXW Ł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ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 95 ↗

Slide 96 — 6WUDWHJLHVDQGDSSURDFKHV

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ŁXHQFHVRWKDWZH FDQGULYHLQFOXVLYHJURZWKVRFLHW\ZLGH 7ROHDUQKRZZHSURWHFWQDWXUDOHFRV\VWHPVUHIHUWR 6HFWLRQ&RQVHUYLQJDQGUHVWRULQJQDWXUHLQ&KDSWHU 7RXQGHUVWDQGRXUDSSURDFKWRVXSSRUWLQJYXOQHUDEOH JURXSVUHIHUWR6HFWLRQ%XLOGLQJDQLQFOXVLYHKHDOWK\ GLJLWDOOLIHLQ&KDSWHU 3DUWLFLSDWRU\ SKLODQWKURS\ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 96 ↗

Slide 97 — 3DUWLFLSDWLQJLQ

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ŁRXULVKZKHQUXUDOLQGXVWULHVGR:HZRUNWRVWUHDPOLQHIDUPWR PDUNHWFKDQQHOVDQGXQORFNWKHSRWHQWLDORIUXUDOFXOWXUDOWRXULVPWUDQVIRUPLQJRXUGLJLWDO FDSDELOLWLHVLQWRDSRZHUIXOHQJLQHWKDWGULYHVWKHWUDQVIRUPDWLRQRIUXUDOLQGXVWULHV 6XSSRUWIRUUXUDOLQGXVWULHV 7DOHQWVXSSRUW 7HFKQRORJLFDOVXSSRUW 6XSSRUWIRUEDVLFOLYHOLKRRGV :HPDNHFRQVLVWHQWHłRUWVWRIDFLOLWDWHIDUPWRPDUNHWGLVWULEXWLRQDQGERRVWUXUDO GHYHORSPHQW7RWKLVHQGZHPRELOL]HIXQGVSURYLGHVDOHVVXSSRUWDQGUXQRULJLQEDVHG PDUNHWLQJFDPSDLJQV /HYHUDJLQJIXQGVDQGUHVRXUFHVWRGULYHDJULFXOWXUDOJURZWK,QZHODXQFKHGWKH 9HQWXUH3KLODQWKURS\3ODQ)RULWVLQDXJXUDOSURMHFWUROOHGRXWLQ.DLKXD&RXQW\=KHMLDQJ 3URYLQFHZHSRROHGIXQGVIURPPXOWLSOHVRXUFHVDQGEURXJKWLQDJULFXOWXUDOH[SHUWVWR FRQGXFWŀHOGVWXGLHV%DVHGRQORFDOVRLODQGFOLPDWHFRQGLWLRQVZHVHOHFWHGPLQLVZHHW SRWDWRHVDVDVSHFLDOW\FURSWREXLOGDORFDOVLJQDWXUHLQGXVWU\6XSSRUWHGE\UHWDLOFKDQQHOV VXFKDV7DREDR7PDOODQG)UHVKLSSRPLQLVZHHWSRWDWRHVIURPWKLVFRXQW\UHDFKHGEURDGHU PDUNHWVGULYLQJDWDQJLEOHLQFRPHLQFUHDVHIRUORFDOIDUPHUV,Q)<SURFHHGVIURPWKH SURMHFWZHUHFKDQQHOHGEDFNLQWRUHLQYHVWPHQWFUHDWLQJDYLUWXRXVF\FOHRILQYHVWPHQW LQFRPHJURZWKUHŁRZDQGUHLQYHVWPHQW 'ULYLQJJURZWKIRUGLUHFWIURPVRXUFHPHUFKDQWV7DREDRDQG7PDOOKDYHHVWDEOLVKHG DFRPSUHKHQVLYHDVVHVVPHQWIUDPHZRUNIRUGLUHFWIURPVRXUFHPHUFKDQWVGHVLJQDWLQJ SURGXFWVWKDWPHHWRXUVWDQGDUGVZLWKDQ2ULJLQ6HOHFWODEHO7KHVHSURGXFWVUHFHLYHWUDŃF LQFHQWLYHVWKDWKHOSWKHPEXLOGEUDQGUHFRJQLWLRQDQGVKDUSHQWKHLUFRPSHWLWLYHHGJHLQWKH PDUNHW /RZHULQJHQWU\EDUULHUVWRHFRPPHU FH7RVXSSRUWFRXQW\EDVHGVPDOOKROGHUIDUPHUV DQGFRRSHUDWLYHVWKDWKDYHOLPLWHGHFRPPHUFHH[SHULHQFH7DREDRDQG7PDOOWDNHRYHU VWRUHRSHUDWLRQVDQGFXVWRPHUVHUYLFH7KLVDOORZVWKRVHIDUPHUVDQGFRRSHUDWLYHVWR IRFXVH[FOXVLYHO\RQIXOŀOOLQJRUGHUVWKHUHE\ORZHULQJWKHRSHUDWLRQDOEDUULHUVIRUEULQJLQJ DJULFXOWXUDOSURGXFWVWRPDUNHW 6XSSRUWLQJIDUPHUVZLWKRULJLQEDVHGOLY HVWUHDPLQJ7DREDRDQG7PDOOUHJXODUO\GHSOR\ WRSLQŁXHQFHUVDQGIDUPHUOLYHVWUHDPHUVWRSURGXFWLRQUHJLRQVZKHUHWKH\ZRUNWRGULYHWKH VDOHVRIIUHVKIRRGV7KHVHRQVLWHHłRUWVDUHDQFKRUHGE\IHDWXUHGPDUNHWLQJFDPSDLJQV VXFKDV6DYRULQJWKH6RXUFHFRPSOHPHQWHGE\GHGLFDWHGVHVVLRQVRQWKH7DREDRDSS7R HQVXUH\HDUURXQGFRQWLQXLW\ZHOHYHUDJHRXUUXUDOUHYLWDOL]DWLRQFRPPLVVLRQHUPRGHOWRUXQ UXUDOHPSRZHUPHQWOLYHVWUHDPVWLPHGWRFRLQFLGHZLWKWKHKDUYHVWVHDVRQVRIORFDOSURGXFH 7RHQKDQFHWKHFXOWXUDOLQŁXHQFH RIUXUDODUHDVZHKDUQHVVWKH EURDGUHDFKRIRXUSODWIRUPVWRSXW DPD]LQJYLOODJHVRQWKHPDS7KH 'UHDP9LOODJH3URJUDPKRVWVODUJH VFDOHIRONIHVWLYDOVDQGFXOWXUDO JDODVOHYHUDJLQJGLJLWDOPHGLD WRPD[LPL]HH[SRVXUHZKLFKLQ WXUQHOHYDWHVORFDOYLVLELOLW\DQG LQFUHDVHVSXEOLFHQJDJHPHQW7KH 'LVFRYHULQJ%HDXW\ZLWK3KLODQWKURS\ 3URJUDPZKLFKGLYHVGHHSLQWRUXUDO WRXULVPXQYHLOVUHJLRQDOFXOWXUHV DQGFXUDWHVERXWLTXHLWLQHUDULHVIRU VKRUWJHWDZD\VHPSRZHULQJYLOODJHV WREXLOGGLłHUHQWLDWHGFRPSHWLWLYH DGYDQWDJHVLQFXOWXUDOWRXULVP 3XWWLQJUXUDODUHDVRQWKHPDS 6LQFH)UHVKLSSRKDVEHHQEXLOGLQJ )UHVKLSSR9LOODJHVWRH[SORUHFRQWUDFWIDUPLQJ ZKLFKKHOSVIRUJHUREXVWSDUWQHUVKLSV ZLWKSURGXFWLRQUHJLRQVWRGULYHSUHFLVH VWDQGDUGL]HGDQGGLJLWDOL]HGDJULFXOWXUDO SURGXFWLRQ$VSDUWQHUVKLSVPDWXUHWKLV LQLWLDWLYHKDVFRQFHQWUDWHGLWVHłRUWVRQWZR EURDGFDWHJRULHVSURGXFWVLQQHHGRI VWULQJHQWTXDOLW\FRQWURODWWKHVRXUFHHJ FKLYHVEURFFROLDQGVWUDZEHUULHVUHTXLULQJ HQGWRHQGRYHUVLJKWIURPFXOWLYDWLRQWR GHOLYHU\DQGVFDUFHKLJKYDOXHJRRGVHJ RUJDQLFYHJHWDEOHVRUIUXLWVDQGVORZUHDUHG SRXOWU\GHOLYHUHGYLDFXVWRPL]HGVXSSO\ VROXWLRQV$VRI0DUFK)UHVKLSSR 9LOODJHVKDGEHHQHVWDEOLVKHGDFURVV SURYLQFLDOOHYHOUHJLRQVLQ&KLQD &RQWUDFWIDUPLQJLQ)UHVKLSSR9LOODJHV %ULQJLQJSUHPLXPSURGXFWVWREURDGHUPDUNHWV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 97 ↗

Slide 98 — 7DOHQWVXSSRUW

3DUWLFLSDWLQJLQUXUDOUHYLWDOL]DWLRQ *LYLQJ%DFNWR6RFLHW\ DQG&RPPXQLWLHV 7DOHQWVXSSRUW 7UXHHPSRZHUPHQWLVOLNHWHDFKLQJVRPHRQHKRZWRŀVKUDWKHUWKDQ VLPSO\JLYLQJWKHPDŀVK:HGULYHUXUDOGHYHORSPHQWE\EULQJLQJLQ RXWVLGHH[SHUWLVHDQGQXUWXULQJORFDOWDOHQW /LQ'RQJKRQJKRQRUHGDV 1DWLRQDO0DUFK WK5HG%DQQHU +ROGHU &ROOHFWLRQRI ,QQRYDWLYH&DVHV IRU5XUDO5HYLWDOL]DWLRQ 'LJLWDO9LOODJHV 7KHɹɽ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ŀ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ŀ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ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 98 ↗

Slide 99 — 7HFKQRORJLFDOVXSSRUW

3DUWLFLSDWLQJLQUXUDOUHYLWDOL]DWLRQ *LYLQJ%DFNWR6RFLHW\ DQG&RPPXQLWLHV 7HFKQRORJLFDOVXSSRUW 6XSSRUWIRUEDVLFOLYHOLKRRGV 7HFKQRORJLFDOLQQRYDWLRQLVWKHSULPDU\HQJLQHIRUKLJKTXDOLW\UXUDO GHYHORSPHQW:HDUHFRPPLWWHGWREULQJLQJ$,WRIDUPODQGVDQGUXUDO FODVVURRPV &RQVROLGDWLQJSRYHUW\DOOHYLDWLRQDFKLHYHPHQWVUHTXLUHV DFRPPLWPHQWWRWKHEDVLFQHHGVRIYXOQHUDEOHJURXSV7R WKLVHQGZHFRQVLVWHQWO\FKDQQHOUHVRXUFHVDQGHłRUWVLQWR VXSSRUWLQJVHQLRUFLWL]HQVZRPHQDQGFKLOGUHQ :HKDYHODXQFKHGWKH3DUHQWV &DIHWHULD,QLWLDWLYHLQ FROODERUDWLRQZLWKWKH$PLW\)RXQGDWLRQWRHVWDEOLVK FRPPXQLW\NLWFKHQVLQXQGHUGHYHORSHGUHJLRQV7KH LQLWLDWLYHSURYLGHVPHDODOORZDQFHVIRUOHIWEHKLQGVHQLRU FLWL]HQVDQGZKHUHUHVRXUFHVSHUPLWKRPHGHOLYHU\VHUYLFHV IRUWKRVHZLWKOLPLWHGPRELOLW\,Q)<LWHVWDEOLVKHG FDIHWHULDVVHUYLQJRYHUQXWULWLRXVPHDOVWRPRUH WKDQEHQHŀ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ɹɽLEDED&ORXGSDUWQHUHGZLWKWKH,QVWLWXWHRI*HQHWLFVDQG 'HYHORSPHQWDO%LRORJ\DWWKH&KLQHVH$FDGHP\RI6FLHQFHVWRODXQFK DVPDUWEUHHGLQJSURMHFWZKLFKUXQVRQDUHVHDUFKSODWIRUPWKDW LQWHJUDWHVKDUGZDUHEDVHGGDWDDFTXLVLWLRQFORXGFRPSXWLQJDQGDQ LQWHOOLJHQWGHFLVLRQPDNLQJHQJLQH,QDFRGHYHORSHGYLUWXDOVLPXODWLRQ HQYLURQPHQWUHVHDUFKHUVFDQVLPXODWHDQGWZHDNEUHHGLQJSODQVLQ WKHFORXGEHIRUHŀHOGYDOLGDWLRQWKHUHE\VKRUWHQLQJ5 'F\FOHV7KH LQWHOOLJHQWGHFLVLRQPDNLQJHQJLQHSRZHUHGE\4ZHQODUJHPRGHOV WUDQVIRUPVPDVVLYHDPRXQWVRIELRORJLFDOGDWDLQWRTXDQWLŀ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ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 99 ↗

Slide 100 — (PHUJHQF\UHOLHI

(PHUJHQF\UHOLHI *LYLQJ%DFNWR6RFLHW\ DQG&RPPXQLWLHV (PHUJHQF\UHOLHI :HGUDZRQH[SHUWLVHDQGUHVRXUFHVDFURVV RXUEXVLQHVVHVWRWUDQVODWHWHFKQRORJLHV DQGVHUYLFHFDSDELOLWLHVLQWRUDSLGUHVSRQVH DFWLRQVWKDWVDIHJXDUGSXEOLFVDIHW\DQG HQVXUHEURDGEDVHGUHOLHILQWKHHYHQWRI HPHUJHQFLHV )ROORZLQJWKH1RYHPEHUŀUHLQ 7DL3R+RQJ.RQJZHVZLIWO\DFWLYDWHG RXUHPHUJHQF\UHVSRQVHPHFKDQLVP GRQDWLQJVSHFLDOIXQGVLPPHGLDWHO\7KH ŀUVWWUDQFKHRIRXUGRQDWLRQZDVXVHG IRUHPHUJHQF\UHORFDWLRQHVVHQWLDOGDLO\ VXSSOLHVDQGSV\FKRORJLFDOFRXQVHOLQJ 2XUEXVLQHVVHVDOVRVWHSSHGLQWRRłHU UHOLHI&DLQLDROHYHUDJHGLWVORJLVWLFV LQIUDVWUXFWXUHWRIDVWWUDFNWKHGHOLYHU\ RIIRRGDQGSURWHFWLYHJHDUWRWKH IURQWOLQHVZKLOH$PDSSURYLGHGRYHU UHDOWLPHXSGDWHVRQWUDŃFUHVWULFWLRQV DQGDOWHUQDWLYHURXWHVHQVXULQJ XQREVWUXFWHGDFFHVVIRUUHVFXHWHDPV DQGVDIHWUDQVLWIRUORFDOUHVLGHQWV ,Q0D\VHYHUDOUHJLRQVLQFOXGLQJ 6KDDQ[LDQG+HQDQZHUHKLWE\ GURXJKWV,Q-XO\WKDW\HDU%HLMLQJ+HEHL DQGRWKHUSODFHVVXłHUHGŁRRGV$PLG WKHVHGLVDVWHUVZHVZLIWO\GHSOR\HG HPHUJHQF\UHOLHIUHVRXUFHVWRVXSSRUW WKHHYDFXDWLRQDQGUHORFDWLRQRIDłHFWHG SRSXODWLRQV 'LVDVWHUUHOLHILQ+RQJ.RQJ 6HDUFKDQGUHVFXHRSHUDWLRQVLQXQLQKDELWHG DUHDVDUHH[WUHPHO\GLŃFXOWEHFDXVHRIOLPLWHG FHOOXODUFRYHUDJH7RDGGUHVVWKLVFKDOOHQJH $PDSKDVODXQFKHGWKH6DWHOOLWHEDVHG2ńLQH 1DYLJDWLRQDQG6DWHOOLWH626IHDWXUHVDOORZLQJ XVHUVWRQDYLJDWHDQGVHQG626VLJQDOVZLWKRXW PRELOHFRQQHFWLYLW\%XLOGLQJRQWKHVHIHDWXUHV $PDSKDVHVWDEOLVKHGDFRPSUHKHQVLYH PHFKDQLVPHQFRPSDVVLQJULVNDOHUWV HPHUJHQF\UHVSRQVHDQGUHVFXHUHVRXUFH FRRUGLQDWLRQ (PHUJHQF\UHVFXHLQXQLQKDELWHGDUHDV 5HVSRQVHWRŁRRGVDQGGURXJKWV ,Q)<WKHVHIHDWXUHVZHUHXSJUDGHGWRVXSSRUWPRUHPRELOHGHYLFHVDQGEHQHŀW DEURDGHUUDQJHRIXVHUV1RWDEO\WKH6DWHOOLWH626IHDWXUHIDFLOLWDWHGPXOWLSOHUHVFXH PLVVLRQVLQWKHŀVFDO\HDUDLGLQJLQGLYLGXDOVLQGLVWUHVV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 100 ↗

Slide 101 — /HYHUDJLQJ

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ł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ŃFDFFLGHQWVDEUXSWGHFHOHUDWLRQE\YHKLFOHVDKHDG RQIUHHZD\VQLJKWWLPHWUXFNHQFRXQWHUVDQGRYHUWDNLQJLQWKHRQFRPLQJ ODQH,Q)<WKHV\VWHPLVVXHGRYHUELOOLRQDOHUWV 'HVSLWHDYDVWYLVXDOO\LPSDLUHG SRSXODWLRQLQ&KLQDWKHDYDLODELOLW\RI JXLGHGRJVUHPDLQVFULWLFDOO\ORZZLWK DFRYHUDJHUDWHRIOHVVWKDQ7R DGGUHVVWKLVJDS$PDSKDVGHYHORSHG 7XWXDQDXWRQRPRXVVHQVLQJDQG QDYLJDWLRQURERWWKDWDVVLVWVWKHYLVXDOO\ LPSDLUHGLQWKHLUGDLO\PRELOLW\,Q 7XWXGHEXWHGDWWKH%HLMLQJ<L]KXDQJ +XPDQRLG5RERW+DOI0DUDWKRQ KHOSLQJYLVXDOO\LPSDLUHGDWKOHWHVWDFNOH FKDOOHQJHVLQFRPSOH[VFHQDULRVVXFK DVDYRLGLQJREVWDFOHVDQGQDYLJDWLQJ WKURXJKFURZGV ,Q)<ZHKRVWHGWKHLQDXJXUDO 6PDOO<HW0LJKW\$,2SHQVRXUFH ,QQRYDWLRQ&KDOOHQJHIRU6RFLDO*RRGYLD WKH0RGHO6FRSHFRPPXQLW\%\SURYLGLQJ GHYHORSHUVZLWKRSHQVRXUFHPRGHOV FRPSXWLQJUHVRXUFHVDQGWRROVZH HPSRZHUHGWKHPWREXLOGDSSOLFDWLRQV GULYLQJWDQJLEOHVRFLDOLPSDFWLQWKH ŀHOGVRIUXUDOHGXFDWLRQVHQLRUFDUH DXWLVPVXSSRUWDQGDFFHVVLEOHOLYLQJ 7KLVLQLWLDWLYHDLPHGWRIRVWHUDYLEUDQW LQQRYDWLRQHFRV\VWHPDQGH[SDQGWKH SUDFWLFDOERXQGDULHVRI$,IRUJRRG $,DVVLVWHGHDUO\VFUHHQLQJIRUGLVHDVHV $PDSVDIHJXDUGVPRELOLW\ $PDSIDFLOLWDWHVPRELOLW\ IRUWKHYLVXDOO\LPSDLUHG 6PDOO<HW0LJKW\$,2SHQ VRXUFH,QQRYDWLRQ&KDOOHQJHIRU 6RFLDO*RRG 7RPLWLJDWHWUDYHOULVNVSRVHGE\URDG ZDWHUORJJLQJGXULQJH[WUHPHZHDWKHU$PDSKDV ODXQFKHGWKH/LYH:DWHUORJJLQJ0DSDIHDWXUH WKDWPRQLWRUVŁRRGHGDUHDVPLQXWHE\PLQXWH DQGGLVSOD\VUHDOZRUOGLPDJHU\IRUQDYLJDWLRQ LQWKHGULYLQJF\FOLQJDQGZDONLQJPRGHV7KLV DOORZVXVHUVWRDGMXVWWKHLUURXWHVLQUHDOWLPH ,Q)<WKHIHDWXUHZDVDYDLODEOHIRUDERXW ŁRRGSURQHORFDWLRQV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 101 ↗

Slide 102 — $GYDQFLQJ

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łHFWLYHO\ORZHULQJWKHHQWU\WKUHVKROGIRUZRPHQLQGLYLGXDOVZLWK GLVDELOLWLHVDQGSHRSOHLQXQGHUGHYHORSHGUHJLRQV ɹɽLEDED*OREDO,QLWLDWLYHV$*,FRQVLVWHQWO\QXUWXUHVGLJLWDO WDOHQWIRUGHYHORSLQJFRXQWULHV,WLQWHJUDWHVWKH$*,/HDUQRQOLQH SODWIRUPZLWKFXVWRPL]HGFXUULFXODWRWUDLQORFDOSXEOLFVHFWRU SURIHVVLRQDOVDQGHQWUHSUHQHXUV,Q)<$*,SDUWQHUHGZLWK JRYHUQPHQWDJHQFLHVDQGLQVWLWXWLRQVLQ(WKLRSLDWRHVWDEOLVK WKHŀUVW*OREDO'LJLWDO7DOHQW$FDGHP\LQ$IULFD7KHDFDGHP\ ORFDWHGLQWKHFRXQWU\ VFDSLWDOGHVLJQVLQGXVWU\VSHFLŀ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ŃFVXSSRUWGLUHFWLQJXVHU VHDUFKHVIRUWKHNH\SKUDVHHQWUHSUHQHXUVKLSE\SHRSOHZLWKGLVDELOLWLHVLQWKH7DREDRDSSWRD VSHFLDOL]HG'LVDELOLW\$VVLVWDQFHVHFWLRQDQGDOLVWRIVWRUHVRSHUDWHGE\PHUFKDQWVZLWKGLVDELOLWLHV $VRI0DUFKWKHSODQKDGVHUYHGDFXPXODWLYHWRWDORIRYHUEHQHŀ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łLQQRWLFLQJGHOLYHU\RUGHUVDQGGLQHLQVHUYLFHFDOOVZH KDYHGHYHORSHG6KDQMLHEDRDVPDUWKDUGZDUHGHYLFHWKDWSURYLGHVUHDOWLPHDOHUWVYLDŁDVKLQJ OLJKWVRUYLEUDWLRQVWRHQVXUHWKDWWKH\FDQUHVSRQGSURPSWO\ 7DREDR,QVWDQW&RPPHUFHVXSSRUWVGHOLYHU\ULGHUVZLWKGLVDELOLWLHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 102 ↗

Slide 103 — +LJKTXDOLW\HQWUHSUHQHXUVKLSDQG

$GYDQFLQJHQWUHSUHQHXUVKLSDQGHPSOR\PHQW *LYLQJ%DFNWR6RFLHW\ DQG&RPPXQLWLHV +LJKTXDOLW\HQWUHSUHQHXUVKLSDQG HPSOR\PHQW 'LJLWDOL]DWLRQDQG$,DUHSURIRXQGO\UHVKDSLQJFDUHHURSSRUWXQLWLHVDFURVVDOOVHFWRUV 7DREDR/HDUQLQJ&HQWHU 2UDQJH&ODVV $,$SSOLFDWLRQ(QJLQHHU <28563$&(&RPPXQLW\ ,Q)<WKH7DREDR/HDUQLQJ&HQWHUGHYHORSHGDQGODXQFKHGKDQGVRQ$,FRXUVHV WRKHOSHQWUHSUHQHXUVDFFHOHUDWH$,DGRSWLRQLQHFRPPHUFHVFHQDULRV,WORJJHG PLOOLRQOHDUQLQJVHVVLRQVLQWKHŀVFDO\HDU ,Q)<WKH2UDQJH&ODVVQHZO\GHYHORSHGDQGUHOHDVHGDVHULHVRIFRXUVHVRQ$, NQRZOHGJHDQGVNLOOVFRPSOHPHQWHGE\DQ$,GULYHQLQWHUYLHZVLPXODWRUWRHTXLS OHDUQHUVZLWKFXWWLQJHGJHFDSDELOLWLHVDQGERRVWWKHLUHPSOR\DELOLW\$VRI0DUFK WKHSURJUDPKDGHQJDJHGDFXPXODWLYHWRWDORIRYHUOHDUQHUV,WZDV UHFRJQL]HGZLWKWKH*ROG$ZDUGDWWKH+DQJ]KRX<RXWK9ROXQWHHU6HUYLFH3URMHFW &RPSHWLWLRQ 'LQJ7DONKDVODXQFKHGWKH$,$SSOLFDWLRQ(QJLQHHU&HUWLŀFDWLRQ3URJUDPZKLFKRłHUV WKHJHQHUDOSXEOLFV\VWHPDWLFVNLOOWUDLQLQJDQGFHUWLŀFDWLRQDLPHGDWQXUWXULQJ$, UHDG\GLJLWDOWDOHQW$VRI0DUFKDFXPXODWLYHWRWDORIRYHULQGLYLGXDOV KDGREWDLQHGWKH$,$SSOLFDWLRQ(QJLQHHU&HUWLŀFDWHYLDWKLVSURJUDP ,Q)<ZHODXQFKHGWKH<28563$&(&RPPXQLW\WRVXSSRUWQHZW\SHVWDUWXS WHDPVVXFKDVRQHSHUVRQFRPSDQLHVE\SURYLGLQJHDUO\VWDJHHQWHUSULVHVHUYLFHV DQGUHVRXUFHVOLNHŀQDQFLDOPDWFKPDNLQJDQGWHFKQLFDOVHUYLFHVWDWLRQV$VRI0DUFK DURXQGHQWUHSUHQHXUVKDGMRLQHGWKHFRPPXQLW\ ,Q)<7DREDR,QVWDQW&RPPHUFH FRQVLVWHQWO\HQIRUFHGWKH3ROLF\RQWKH 3URWHFWLRQRI'HOLYHU\5LGHU5LJKWVDQG ,QWHUHVWV7KH'HOLYHU\6HUYLFH6SHFLŀ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łRUWVIRUGHOLYHU\ULGHUVLQGLVWUHVV)RUGHOLYHU\VWDWLRQIDFLOLWLHV ZHHVWDEOLVKHGDQLQWHOOLJHQWFORXGFRQWUROV\VWHPIRUŀUHVDIHW\LQVWDOOLQJVPDUWGHYLFHVWKDW VXSSRUWWKHUPDOLPDJLQJVPRNHVHQVLQJFKDUJLQJYLRODWLRQPRQLWRULQJDQGQHWZRUNHG DODUPLQJ7KLVV\VWHPZKLFKHQDEOHVUHDOWLPHKD]DUGGHWHFWLRQDQGHDUO\ZDUQLQJKDGEHHQ GHSOR\HGDWGHOLYHU\VWDWLRQVDVRI0DUFK 6WUHQJWKHQLQJVDIHW\WUDLQLQJ 7DREDR,QVWDQW&RPPHUFHKDVHVWDEOLVKHGDVDIHW\WUDLQLQJV\VWHPFRYHULQJŀUHVDIHW\WUDŃF UXOHVDQGSXEOLFVHFXULW\UHJXODWLRQV7KLVV\VWHPSURYLGHVWUDLQLQJIRUERWKGHOLYHU\ULGHUV DQGORJLVWLFVVHUYLFHSURYLGHUV,Q)<RXUVDIHW\WUDLQLQJVHVVLRQVIRUGHOLYHU\ULGHUV UHFRUGHGDWRWDODWWHQGDQFHRIRYHUPLOOLRQ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 103 ↗

Slide 104 — &DUHHUFDUHDQGGHYHORSPHQW

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ń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ŀQDQFLDODLGZHVHHNWR RSWLPL]HWKHZRUNLQJFRQGLWLRQVRIGHOLYHU\ ULGHUVIRFXVLQJRQPDWWHUVVXFKDVUHVW DUUDQJHPHQWVGLQLQJRSWLRQVDFFHVVWR UHVLGHQWLDOFRPSOH[HVDQGHELNHEDWWHU\ VZDSSLQJ2QHH[DPSOHLV7DREDR,QVWDQW &RPPHUFH V&DULQJ0HDOV,QLWLDWLYHZKLFK OHYHUDJHVDFROODERUDWLYHPRGHOLQYROYLQJWKH JRYHUQPHQWWKHSODWIRUPDQGPHUFKDQWVWR SURYLGHGHOLYHU\ULGHUVZLWKQXWULWLRXVPHDOV WKDWDUHVXEVLGL]HGRUGLVFRXQWHG 6WURQJSURIHVVLRQDOUHFRJQLWLRQ 7DREDR,QVWDQW&RPPHUFHFRQVLVWHQWO\ UHŀQHVLWVKRQRUEDGJHV\VWHP7KURXJK VSHFLDODZDUGVDQGLQFHQWLYHERQXVHV ZHIRVWHUDVWURQJHUVHQVHRISURIHVVLRQDO EHORQJLQJDPRQJGHOLYHU\ULGHUV'XULQJ WKH0D\'D\FRPPHQGDWLRQV GHOLYHU\ULGHUVZHUHKRQRUHGDV1DWLRQDO 0RGHO:RUNHUVUHFHLYHG1DWLRQDO0D\ /DERU0HGDOVDQGUHFHLYHG3URYLQFLDORU 0XQLFLSDO0D\/DERU0HGDOV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 104 ↗

Slide 105 — 3DUWLFLSDWRU\SKLODQWKURS\

*LYLQJ%DFNWR6RFLHW\ DQG&RPPXQLWLHV 3DUWLFLSDWRU\SKLODQWKURS\ :HHPEUDFHWKHSKLORVRSK\RISDUWLFLSDWRU\SKLODQWKURS\ %\ORZHULQJWKHHQWU\EDUULHUVZHPRELOL]HERWKRXU HPSOR\HHVDQGWKHEURDGHUSXEOLFWRGULYHVRFLDOLPSDFW WRJHWKHU 6LQFHZHODXQFKHGWKH7KUHH+RXUVIRUD%HWWHU:RUOG ,QLWLDWLYHLQZHKDYHFRQVLVWHQWO\HQFRXUDJHG HPSOR\HHVWRVHUYHDVYROXQWHHUV,Q)<RXUIXOO WLPHHPSOR\HHVFORFNHGKRXUVRIYROXQWHHU VHUYLFHDQGDFWLYH+XJVDQG+HOS*URXSVHVWDEOLVKHG E\HPSOR\HHVKHOGSKLODQWKURSLFHYHQWVZKLFK GUHZDWRWDODWWHQGDQFHRI:HVWDUWHGRXU ŀIWK3KLODQWKURS\&RPPLWWHHHOHFWLRQLQ-XO\7KH FRPPLWWHH VPHPEHUVVHUYHDVHPSOR\HHUHSUHVHQWDWLYHV LQSKLODQWKURSLFGHFLVLRQPDNLQJDQGFDQOHYHUDJHWKH FRPPLWWHH VIXQGVWRWUDQVODWHFKDULWDEOHLGHDVLQWR FRQFUHWHDFWLRQV)XUWKHUPRUHZHUHFRJQL]HHPSOR\HHV DQGWHDPVGHGLFDWHGWRSKLODQWKURS\YLDDQDQQXDO ɹɽLEDED3KLODQWKURS\/LVW %\LQVSLULQJVRFLHW\ZLGHSDUWLFLSDWLRQLQFKDULWDEOH FDXVHVZHFRQWULEXWHWRWKHGHYHORSPHQWRIDQH[WHQVLYH QHWZRUNIRUVRFLDOJRRG,Q)<WKH*RRGVIRU*RRG 3URJUDPH[SDQGHGWRWKH;LDQ\XSODWIRUPHQDEOLQJERWK VDOHSURFHHGVGRQDWLRQVDQGGLUHFWLQNLQGFRQWULEXWLRQV 7KURXJKRXWWKHŀVFDO\HDULWHQJDJHGRYHUPLOOLRQ PHUFKDQWVDQGPRUHWKDQPLOOLRQXVHUV:HKDYH H[WHQGHGWKH7KUHH+RXUVIRUD%HWWHU:RUOGSKLORVRSK\WR WKHEURDGHUSXEOLFE\ODXQFKLQJ7KUHH+RXUVIRUD%HWWHU :RUOGSODWIRUPVLQYDULRXVDSSVLQFOXGLQJ7DREDR7KLV LQLWLDWLYHHQDEOHVFRQYHQLHQWDFFHVVWRSKLODQWKURS\ORZHULQJ WKHWKUHVKROGIRUSDUWLFLSDWLRQ,Q)<LWHQJDJHGRYHU PLOOLRQXVHUVDQGUHFRUGHGPRUHWKDQPLOOLRQDFWV RINLQGQHVV)XUWKHUPRUHWKH;,13URJUDPFROODERUDWHV ZLWKSDUWQHUVWRDGYRFDWHLQQRYDWLYHPRGHOVIRUFKDULW\,Q WKHŀVFDO\HDULWVXSSRUWHGEHQFKPDUNSURMHFWVIURP SKLODQWKURSLFRUJDQL]DWLRQV ,Q)<ɹɽLEDED*URXSGRQDWHGDERXW50%PLOOLRQWR ɹɽLEDEDLQLWLDWHGFKDULWDEOHIRXQGDWLRQV ,Q'HFHPEHUWKHɹɽLEDED)RXQGDWLRQZDV KRQRUHGDVD1DWLRQDO$GYDQFHG6RFLDO2UJDQL]DWLRQ 1DWLRQDO$GYDQFHG 6RFLDO2UJDQL]DWLRQ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 105 ↗

Slide 106 — 6RFLDO

0DLQWDLQLQJ %XVLQHVV,QWHJULW\ :HDOZD\VYLHZLQWHJULW\DQGFRPSOLDQFHDVWKHFRUQHUVWRQHV RIRXUEXVLQHVV7KHUHIRUHZHDUHFRPPLWWHGWREXLOGLQJD UHOLDEOHJRYHUQDQFHIUDPHZRUNWKDWZLQVWUXVWIURPFXVWRPHUV DQGWKHEURDGHUSXEOLF 7KLVFKDSWHU 2EVHUYLQJEXVLQHVVHWKLFV 6WUHQJWKHQLQJVXSSOLHUPDQDJHPHQW 'DWDVHFXULW\DQGSULYDF\SURWHFWLRQ 6DIHJXDUGLQJF\EHUVHFXULW\ (QKDQFLQJWHFKQRORJ\HWKLFV 6RFLDO ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 106 ↗

Slide 107 —

0DLQWDLQLQJ %XVLQHVV ,QWHJULW\ RI%RDUGPHPEHUVUHFHLYHGLQWHJULW\ WUDLQLQJ $URXQG $URXQGVXSSOLHUVKDYHVLJQHGWKH +RQHVW\DQG,QWHJULW\$JUHHPHQW 2XUHPSOR\HHVDFKLHYHGDSDVVUDWH IRUWKHɹɽLEDED*URXS&RGHRI%XVLQHVV &RQGXFWH[DPLQDWLRQ 7KHHPSOR\HHUDWLQJRIRXUZRUNSODFH LQWHJULW\LPSURYHGWRRQDSRLQW VFDOH *UDGH$FHUWLŀFDWHV ɹɽLEDEDZDVDZDUGHG*UDGH$FHUWLŀFDWHV LQDUHDVUHODWHGWR$,JHQHUDWHGFRQWHQW $,*&$,*&DXGLRGHWHFWLRQ$,*&YLGHR GHWHFWLRQDQG$,*&LGHQWLŀHUH[WUDFWLRQ DQGWUDFHDELOLW\FDVHV )LUVWWRDFKLHYH FRPSOLDQFH FHUWLŀFDWLRQXQGHU QDWLRQDOVWDQGDUG 4ZHQODUJHPRGHOVZHUHDPRQJWKHŀUVWWR DFKLHYHHQKDQFHGOHYHOFRPSOLDQFHFHUWLŀFDWLRQ XQGHU&KLQD VQDWLRQDOVWDQGDUGIRUJHQHUDWLYH$, VDIHW\ 2EVHUYLQJ EXVLQHVVHWKLFV 6WUHQJWKHQLQJ VXSSOLHUPDQDJHPHQW (QKDQFLQJ WHFKQRORJ\HWKLFV +LJKHVWVFRUHV ɹɽLEDED&ORXGDFKLHYHGWKHKLJKHVW VFRUHVDFURVVDOOVHYHQGLPHQVLRQVLQ ,'& VVHFXULW\FDSDELOLW\DVVHVVPHQW IRU&KLQD VSXEOLFFORXGVHUYLFH SURYLGHUV 6DIHJXDUGLQJ F\EHUVHFXULW\ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 107 ↗

Slide 108 — 6WUDWHJLHVDQGDSSURDFKHV

6WUDWHJLHVDQGDSSURDFKHV 2XUEXVLQHVVHFRV\VWHPLVIXQGDPHQWDOO\EXLOWXSRQXVHUWUXVW *XLGHGE\ɹɽLEDED VPLVVLRQYLVLRQDQGYDOXHVZHKDYH IRUPXODWHGWKHɹɽ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ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 108 ↗

Slide 109 — 2EVHUYLQJ

2EVHUYLQJEXVLQHVVHWKLFV 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ 2EVHUYLQJ EXVLQHVVHWKLFV :HDOZD\VUHJDUGEXVLQHVVHWKLFVDVWKH IRXQGDWLRQRIRXUORQJWHUPJURZWKDQG KDYH]HURWROHUDQFHIRUFRUUXSWLRQ$VZH FRQWLQXRXVO\UHŀQHRXUDQWLFRUUXSWLRQ FRPSOLDQFHPDQDJHPHQWV\VWHPDQG VWUHQJWKHQRXULQWHJULW\FXOWXUHZHZRUNZLWK HPSOR\HHVDQGSDUWQHUVWRPDLQWDLQDIDLUDQG WUDQVSDUHQWEXVLQHVVODQGVFDSH :HFRPSO\ZLWKDSSOLFDEOHODZVDQG UHJXODWLRQVRIRXURSHUDWLQJMXULVGLFWLRQVVXFK DVWKH&ULPLQDO/DZRIWKH3HRSOH V5HSXEOLF RI&KLQDWKH$QWLXQIDLU&RPSHWLWLRQ/DZ RIWKH3HRSOH V5HSXEOLFRI&KLQDWKH(8 :KLVWOHEORZHU3URWHFWLRQ'LUHFWLYHWKH86 )RUHLJQ&RUUXSW3UDFWLFHV$FWDQG6LQJDSRUH V 3UHYHQWLRQRI&RUUXSWLRQ$FW&OHDUHWKLFDO ERXQGDULHVKDYHEHHQGHŀQHGIRUDOO HPSOR\HHVDQGSDUWQHUVSULPDULO\EDVHGRQ WKHɹɽLEDED*URXS&RGHRI%XVLQHVV&RQGXFW FRPSOHPHQWHGE\SROLFLHVVXFKDVWKHɹɽLEDED *URXS$QWLEULEHU\DQG$QWLFRUUXSWLRQ3ROLF\ DQGWKHɹɽLEDED*URXS*LIW+DQGOLQJ5XOHV 5HSRUWLQJDQGLQYHVWLJDWLRQ :HKDYHHVWDEOLVKHGDQLQWHJULW\UHSRUWLQJV\VWHPWKDW RSHUDWHVLQGHSHQGHQWO\DQGSURYLGHVYDULRXVUHSRUWLQJ FKDQQHOVVXFKDVWKHRŃFLDOZHEVLWHVRIɹɽLEDED *URXSDQGRXUEXVLQHVVHVGHGLFDWHGHPDLODGGUHVVHV KRWOLQHVPHUFKDQWRQERDUGLQJSODWIRUPVSURFXUHPHQW SODWIRUPVDQGLQWHUQDORQOLQHFRPPXQLWLHV$VRI0DUFK ZHKDGRYHURQOLQHDQGRńLQHUHSRUWLQJ WRXFKSRLQWV7KH\VXSSRUWPXOWLSOHODQJXDJHVVXFKDV &KLQHVH(QJOLVK6SDQLVK7KDL0DOD\DQG)UHQFKWR DFFRPPRGDWHVWDNHKROGHUVLQYDULRXVFRXQWULHVDQG UHJLRQVZKHUHZHRSHUDWH2XUKXPDQ$,DVVLVWDQW PRGHOHQVXUHVUHVSRQVLYHQHVVDQGZHSOHGJH WRSURYLGHIHHGEDFNRQZKHWKHUDQLQYHVWLJDWLRQZLOO EHLQLWLDWHGZLWKLQVHYHQZRUNLQJGD\VRIUHFHLYLQJD OHDG,Q)<UHSRUWHGLVVXHVFRQFHUQHGFRQŁLFWVRI LQWHUHVWIDOVLŀFDWLRQDQGEUHDFKHVRIFRQŀGHQWLDOLW\ DPRQJRWKHUV 7RKHOSHPSOR\HHVPHUFKDQWVVXSSOLHUVDQGSDUWQHUV OHDUQDERXWDQGXVHWKHVHUHSRUWLQJFKDQQHOVZHUXQ DQRQJRLQJDZDUHQHVVFDPSDLJQWKDWOHYHUDJHVUHJXODU DQQRXQFHPHQWVDQG$,DVVLVWDQWV$WNH\MXQFWXUHVZH LVVXHVSHFLDOUHPLQGHUV 5HSRUWLQJDQGLQYHVWLJDWLRQ 5LVNPDQDJHPHQWI RU EXVLQHVVHWKLFV 2YHUVLJKWDQGDXGLW %XLOGLQJDQLQWHJULW\FXO WXUH 5HSRUWVRIPLVFRQGXFWDUHKDQGOHGE\GHVLJQDWHGVWDł DQGWKHSURFHVVLVVXEMHFWWRGHGLFDWHGPRQLWRULQJ (DFKFRUUXSWLRQUHODWHGOHDGLVLQYHVWLJDWHGE\WKH ,QWHJULW\DQG&RPSOLDQFH'HSDUWPHQWWRJHWKHUZLWKWKH PDQDJHPHQWRIWKHUHVSRQGHQW VEXVLQHVVGHSDUWPHQW 2QFHDYLRODWLRQLVFRQŀUPHGWKHEXVLQHVVGHSDUWPHQW DQGWKH+XPDQ5HVRXUFHV'HSDUWPHQWZLOOZLWKLQŀYH ZRUNLQJGD\VPDNHDGLVFLSOLQDU\GHFLVLRQZKLFKPD\ EHDUHSULPDQGDZDUQLQJDGHPHULWWHUPLQDWLRQRU UHIHUUDOWRMXGLFLDODXWKRULWLHV([FHSWIRUPLQRUYLRODWLRQV WKDWRQO\UHVXOWLQUHSULPDQGVDOOYLRODWLRQVLPSDFW FRPSHQVDWLRQLQFHQWLYHVDQGSURPRWLRQV :HSULRULWL]HWKHSURWHFWLRQRIZKLVWOHEORZHUVE\ PDLQWDLQLQJVWULFWFRQŀGHQWLDOLW\IRUWKHLULGHQWLWLHV DQGWKHLQIRUPDWLRQWKDWWKH\SURYLGH$QRQ\PRXV UHSRUWLQJLVDOVRVXSSRUWHG,QYHVWLJDWRUVDUHUHTXLUHG WRLPSOHPHQWUHDVRQDEOHPHDVXUHVWRSURWHFWWKH OHJLWLPDWHULJKWVRIZKLVWOHEORZHUVDQGZLWQHVVHV$Q\ IRUPRIUHWDOLDWLRQDJDLQVWWKHPLVH[SOLFLWO\IRUELGGHQ ,Q)<FRUUXSWLRQLQFLGHQWVLPSOLFDWLQJRXU HPSOR\HHVZHUHUHIHUUHGWRWKHMXGLFLDOV\VWHPZKHUH WZRODZVXLWVZHUHLQLWLDWHGDQGFRQFOXGHG ɹɽLEDED VLQWHJULW\UHSRUWLQJZHEVLWHμ KWWSVMXEDRDɽLEDEDFRP ɹɽLEDED VLQWHJULW\UHSRUWLQJHPDLOμ OLDQ]KHQJ#DɽLEDEDLQFFRP # K ,QYHVWLJDWLRQ &RQFOXVLRQ ,QWHJULW\ JXLGHOLQHV (QWHUIHHGEDFN %DVLFLQIRUPDWLRQ &RQWHQW ,QWHJULW\DQG FRPSOLDQFHUHSRUWLQJ %XVLQHVV FRPSOLDQFH JXLGHOLQHV 6XEPLW ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 109 ↗

Slide 110 —

2EVHUYLQJEXVLQHVVHWKLFV 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ 5LVNPDQDJHPHQWIRUEXVLQHVVHWKLFV 2YHUVLJKWDQGDXGLW (DFK\HDUWKH,QWHJULW\DQG&RPSOLDQFH'HSDUWPHQWSURDFWLYHO\LGHQWLŀHVPDMRUULVNVDFURVVWKH *URXSEDVHGRQEXVLQHVVG\QDPLFVDQGSDVWFRUUXSWLRQLQFLGHQWV,Q)<ZHLGHQWLŀHG SRWHQWLDOULVNSRLQWV2IWKHVHKDYHEHHQDGGUHVVHGWKURXJKPDQDJHPHQWHQKDQFHPHQWV ZKLOHUHPHGLDWLRQLVXQGHUZD\IRUWKHUHVW)XUWKHUPRUHZHFRQGXFWWDUJHWHGDVVHVVPHQWVIRU NH\EXVLQHVVDUHDVDQGKLJKULVNUROHVDQDO\]LQJULVNH[SRVXUHDFURVVPXOWLSOHGLPHQVLRQVVXFK DVRSHUDWLRQDOFKDUDFWHULVWLFVDQGMREUHVSRQVLELOLWLHVWRGHYLVHSUHYHQWLRQDQGFRQWUROSODQV IRULGHQWLŀHGULVNV7KHVHSODQVLQYROYHDPRQJRWKHUWKLQJVRSWLPL]LQJSURFHVVHVLPSURYLQJ SURGXFWVDQGUXQQLQJLQWHJULW\DZDUHQHVVLQLWLDWLYHVDVZHOODVIRUPXODWLQJDQGXSGDWLQJSROLFLHV 7KHɹɽLEDED*URXS&RGHRI%XVLQHVV&RQGXFWH[SOLFLWO\VWLSXODWHVWKDWPDQDJHUVDUHGLUHFWO\ UHVSRQVLEOHIRUFRQWUROOLQJULVNVDQGEXLOGLQJDQLQWHJULW\FXOWXUHRQWKHLUWHDPV7KHUHVXOWVRID WHDP VHłRUWVWRPDQDJHLQWHJULW\ULVNVDUHIHGLQWRWKHSHUIRUPDQFHDVVHVVPHQWVRILWVPDQDJHUV DQGOLQNHGWRWKHLUDSSRLQWPHQWVSURPRWLRQVDQGLQFHQWLYHV :HKDYHHVWDEOLVKHGLQWHUQDODQGH[WHUQDODXGLWPHFKDQLVPVWRDVVHVVWKHHłHFWLYHQHVVRIRXULQWHUQDOFRQWUROLQSUHYHQWLQJFRUUXSWLRQ 7KH,QWHJULW\DQG&RPSOLDQFH'HSDUWPHQWFROODERUDWHVZLWKGHSDUWPHQWVVXFKDV$XGLWDQG,QWHUQDO&RQWUROWRFRQGXFWDQQXDOLQWHJULW\ DXGLWVIRUKLJKULVNEXVLQHVVDUHDV(DFKTXDUWHUWKLVGHSDUWPHQWGLVFORVHVFRUUXSWLRQLQFLGHQWVWRDQH[WHUQDODXGLWLQJŀUPDQG UHVSRQGVWRLWVLQTXLULHVDERXWULVNFRQWURO:HKDYHHVWDEOLVKHGDFRQWLQXRXVWUDFNLQJPHFKDQLVPIRULVVXHVLGHQWLŀHGLQDXGLWVWRHQVXUH WKDWUHODWHGGHSDUWPHQWVLPSOHPHQWUHPHGLDWLRQ$VRI0DUFKUHPHGLDWLRQIRUPDWHULDOULVNVGLVFRYHUHGGXULQJDXGLWVKDGEHHQ LPSOHPHQWHG ,Q)<ZHFRQVROLGDWHGWKHFKDUDFWHULVWLFVRIULVNVGLVFRYHUHGLQRXUWDUJHWHGDQWLEULEHU\DXGLWXQGHUWKH)RUHLJQ&RUUXSW3UDFWLFHV $FW)&3$LQWRDNH\ZRUGGDWDEDVHZKLFKZDVWKHQHPEHGGHGZLWKLQRXUGLJLWDOL]HGŀ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ɹɽLEDED*URXS&RGHRI%XVLQHVV &RQGXFW,Q)<ZHKRVWHGRYHUWUDLQLQJVHVVLRQVLQWKLVŀHOG ,Q)<ZHSULRULWL]HGULVNPDQDJHPHQW LQKLJKULVNDUHDVDQGHQIRUFHGVWULQJHQW FRPSOLDQFHUHTXLUHPHQWVIRUSURFXUHPHQW %XLOGLQJXSRQH[LVWLQJSROLFLHVZH LQWURGXFHGWKHɹɽLEDED*URXS3URFXUHPHQW &RPSOLDQFH0DQDJHPHQW3ROLF\WRGHŀQH DWKUHHWLHUDFFRXQWDELOLW\IUDPHZRUN H[HFXWLRQE\SURFXUHPHQWHQWLWLHV VXSHUYLVLRQE\EXVLQHVVOHYHO,QWHUQDO &RQWURODQGRYHUVLJKWE\*URXSOHYHO ,QWHUQDO&RQWURO:HUHTXLUHDOOSURFXUHPHQW UHODWHGSHUVRQQHOWRVLJQWKHɹɽLEDED*URXS /HWWHURI&RPPLWPHQWWR%XVLQHVV&RQGXFW IRU3URFXUHPHQWUHODWHG3HUVRQQHOUHFHLYH WKHPDWLFWUDLQLQJRQFRPSOLDQFHDQG GLVFORVHDQ\FRQŁLFWVRILQWHUHVWWRɹɽLEDED LQDWLPHO\DQGDFFXUDWHPDQQHU 6WULQJHQWFRPSOLDQFHUHTXLUHPHQWVIRUSURFXUHPHQW 3DUWQHUV :HH[WHQGRXUKLJKVWDQGDUGVRIEXVLQHVVFRQGXFWWRWKLUGSDUW\SDUWQHUVVXFKDV VXSSOLHUVDQGPHUFKDQWVRQRXUHFRPPHUFHSODWIRUPV7RWKLVHQGZHRUJDQL]H RQOLQHDQGRńLQHWUDLQLQJIURPWLPHWRWLPH,Q)<ZHSURYLGHGRYHU KRXUVRILQWHJULW\WUDLQLQJIRURXWVRXUFHGZRUNHUVVXSSOLHUVDQGRWKHUSDUWQHUV ,Q)<RXUHPSOR\HHVDFKLHYHGDSDVV UDWHLQWKHWUDLQLQJDQGH[DPLQDWLRQSURJUDPIRU WKHɹɽLEDED*URXS&RGHRI%XVLQHVV&RQGXFWD SURJUDPWKDWLQFOXGHVDQLQWHJULW\PRGXOH ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 110 ↗

Slide 111 — &RPSOLDQFHFRQVXOWDQF\

2EVHUYLQJEXVLQHVVHWKLFV 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ :HSURYLGHFRPSOLDQFHFRQVXOWDQF\FKDQQHOVIRUERWKLQWHUQDODQG H[WHUQDOVWDNHKROGHUV(PSOR\HHVFDQREWDLQFRPSOLDQFHJXLGDQFH YLD$,DVVLVWDQWVSKRQHFDOOVHPDLOVDQGZHEVLWHV,Q)<ZH UHVSRQGHGWRRYHULQWHUQDOLQTXLULHVSULPDULO\FRQFHUQLQJ FRQŁLFWRILQWHUHVWVFHQDULRVVXFKDVLQYHVWPHQWSUHFOHDUDQFHDQGJLIW GLVSRVLWLRQ2XUSDUWQHUVKDYHDFFHVVWRFRPSOLDQFHFRQVXOWDQF\YLD SXEOLFHPDLODGGUHVVHVSKRQHFDOOVDQGZHEVLWHV 7KHLQWHJULW\VHFWLRQRIRXULQWHUQDORQOLQHFRPPXQLW\WUDQVODWHV FRPSOLDQFHSROLFLHVLQWREXVLQHVVVFHQDULRVSHFLŀFUHPLQGHUV(DFK TXDUWHUZHSXEOLVKDFROOHFWLRQRIFDVHVWXGLHVIURPZLWKLQɹɽLEDED DQGDFURVVWKHLQGXVWU\)RUSRWHQWLDOULVNVLGHQWLŀHGIURPWKHVHFDVH VWXGLHVZHLVVXHSURPSWDOHUWV(DFK\HDUZHSURGXFHGUDPDWL]HG VKRUWYLGHRVEDVHGRQW\SLFDOLQWHJULW\YLRODWLRQVWRKLJKOLJKWWKH FRQVHTXHQFHVRIPLVFRQGXFWDQGJXLGHHPSOR\HHVLQUHFRJQL]LQJ SURIHVVLRQDOERXQGDULHV$QLQWHUQDOVXUYH\VKRZHGWKDWLQ)< HPSOR\HHVUDWHGRXUZRUNSODFHLQWHJULW\DWRQDSRLQWVFDOHXS IURPLQWKHSUHYLRXVŀVFDO\HDU &RPSOLDQFHFRQVXOWDQF\ 'HWHUUHQWHGXFDWLRQ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 111 ↗

Slide 112 — 6WUHQJWKHQLQJ

6WUHQJWKHQLQJVXSSOLHUPDQDJHPHQW 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ 6WUHQJWKHQLQJ VXSSOLHU PDQDJHPHQW 6XSSOLHUPDQDJHPHQWV\VWHP %XLOGLQJDFOHDQKRQHVWDQGVXVWDLQDEOHVXSSO\FKDLQHFRV\VWHPLVDWWKHKHDUWRIVXSSOLHUPDQDJHPHQWDQGKLJKO\FRQVLVWHQWZLWKRXU (6*SULQFLSOHV ,Q)<ZHXSGDWHGWKHɹɽLEDED*URXS+ROGLQJ/LPLWHG6XSSOLHU&RPSOLDQFH0DQDJHPHQW6SHFLŀFDWLRQVWRLQWURGXFHUHTXLUHPHQWV EHWWHUDOLJQHGZLWKEXVLQHVVUHDOLWLHVLQDUHDVVXFKDVVXSSOLHUSHUIRUPDQFHDVVHVVPHQWDQGSDUWQHUVKLSULVNPDQDJHPHQW7RHQVXUH WKHHłHFWLYHHQIRUFHPHQWRIWKHVHEDVHOLQHUHTXLUHPHQWVRXUEXVLQHVVHVKDYHIRUPXODWHGVSHFLŀFFRPSOLDQFHSROLFLHVWDLORUHGWRWKHLU RZQFKDUDFWHULVWLFV 6XSSOLHUPDQDJHPHQWV \VWHP (6*LQWHJUDWLRQLQWRWKHVXSSOLHU PDQDJHPHQWV\VWHP 7KLVŀJXUHLVWKHQXPEHURIVXSSOLHUVSHUPDQHQWO\EORFNOLVWHGIRUEULELQJɹɽLEDED VHPSOR\HHV :HKDYHGLJLWDOL]HGRXUVXSSOLHUPDQDJHPHQWV\VWHPFRYHULQJYDULRXVVWDJHVVXFKDVRQERDUGLQJVHOHFWLRQDVVHVVPHQWDQG FRQVHTXHQFHPDQDJHPHQW 6XSSOLHUPDQDJHPHQWSURFHVV :HKDYHHVWDEOLVKHGDULJRURXVVXSSOLHURQERDUGLQJPHFKDQLVP ZKHUHVXSSOLHUVPXVWVXEPLWWKHLUFUHGHQWLDOVDQGFHUWLŀ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ŀFQHHGVHYDOXDWLQJVXSSOLHUV DFURVVPXOWLSOHFRUHGLPHQVLRQV VXFKDVSURGXFWTXDOLW\VHUYLFH FDSDELOLWLHVWHFKQLFDOH[SHUWLVH DQGFRVWEHQHŀWV'XULQJWKH VHOHFWLRQSURFHVVZHDGKHUHWR WKHSULQFLSOHVRIIDLUQHVVDQG LPSDUWLDOLW\ZLWKDSHUIRUPDQFH RULHQWHGLQFHQWLYHPHFKDQLVPWR SULRULWL]HSDUWQHUVZLWKDQH[FHOOHQW WUDFNUHFRUG :HKDYHHVWDEOLVKHGD PHFKDQLVPIRUG\QDPLF RUSHULRGLFDVVHVVPHQW WRJDXJHVXSSOLHU SHUIRUPDQFHDFURVVNH\ PHWULFVVXFKDVTXDOLW\ VHUYLFHWHFKQLFDO H[SHUWLVHDQGGHOLYHU\ HŃFLHQF\ (DFKEXVLQHVVKDVHVWDEOLVKHG DFRQVHTXHQFHPDQDJHPHQW PHFKDQLVPIRUVXSSOLHUV'HSHQGLQJ RQWKHVHYHULW\RIYLRODWLRQV FRQVHTXHQFHVUDQJHIURPŀQHVWR WKHVXVSHQVLRQRUWHUPLQDWLRQRI FRRSHUDWLRQ$WWKH*URXSOHYHOZH KDYHEXLOWDQLQIRUPDWLRQVKDULQJ V\VWHPWRSUHYHQWQRQFRPSOLDQW VXSSOLHUVIURPVZLWFKLQJEHWZHHQ EXVLQHVVHV,Q)<ZHEORFNOLVWHG VXSSOLHUVDQGWHUPLQDWHG FRRSHUDWLRQZLWKWKHPDVSHURXU UXOHV 2QERDUGLQJ 6HOHFWLRQ $VVHVVPHQW &RQVHTXHQFHPDQDJHPHQW 6XSSOLHUULVN PDQDJHPHQW :HKDYHHPEHGGHGGLJLWDOULVN FRQWUROPRGXOHVLQWRWKHVXSSOLHU PDQDJHPHQWOLIHF\FOHHQDEOLQJ LQWHOOLJHQWULVNLGHQWLŀFDWLRQ DQGUHDOWLPHPRQLWRULQJIURP RQERDUGLQJUHYLHZDOOWKHZD\WR RQJRLQJFROODERUDWLRQ7KLVFRYHUV NH\GLPHQVLRQVVXFKDVUHJXODWRU\ FRPSOLDQFHOLWLJDWLRQDQGVHFXULW\ )RUKLJKULVNFDWHJRULHVZH VXSSOHPHQWGLJLWDOULVNFRQWURO PRGXOHVZLWKRńLQHYHULŀFDWLRQV VXFKDVRQVLWHLQVSHFWLRQVSKRQH LQWHUYLHZVDQGWDUJHWHGUHYLHZV HQJDJLQJWKLUGSDUW\DJHQFLHVIRU LQGHSHQGHQWDVVHVVPHQWVZKHQ QHFHVVDU\)RULVVXHVLGHQWLŀHGZH HQVXUHFORVHGORRSUHPHGLDWLRQWR FRQWLQXRXVO\RSWLPL]HRXUVXSSO\ FKDLQRSHUDWLRQV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 112 ↗

Slide 113 — (6*LQWHJUDWLRQ

6WUHQJWKHQLQJVXSSOLHUPDQDJHPHQW 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ (6*LQWHJUDWLRQLQWRVXSSOLHUPDQDJHPHQWSURFHVVHV (6*LQWHJUDWLRQLQWRVXSSOLHUULVNPDQDJHPHQW ,Q)<ZHLQWHJUDWHG(6*ULVNLGHQWLŀ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ŀQHVVWDQGDUGVDQGFRPSOLDQFH EDVHOLQHVIRUVXSSOLHU(6*HQVXULQJWKDW EHVWSUDFWLFHVLQWKLVDUHDDUHLPSOHPHQWHG DFURVVRXUEXVLQHVVHV7RDOLJQZLWK LQGXVWU\EHQFKPDUNVZHMRLQHGWKH&KLQD *UHHQ6XSSO\&KDLQ$OOLDQFHLQ)< 2QERDUGLQJ $VVHVVPHQW :HKDYHIRUPXODWHGDQGUHOHDVHG WKHɹɽLEDED6XSSOLHU(6*&RGH RI&RQGXFW7KHFRGHGHŀ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ŀFPHDVXUHVWDLORUHGWRLWVRZQRSHUDWLRQDO FRQWH[WVɹɽLEDED&ORXGKDVLQWHJUDWHG6FRSH HPLVVLRQVUHGXFWLRQLQWRWKHSHUIRUPDQFH DVVHVVPHQWVRIOHDVHGGDWDFHQWHUVXSSOLHUVDQG )UHVKLSSRSULRULWL]HVFUHGHQWLDOVVXFKDVWKH0DULQH 6WHZDUGVKLS&RXQFLOFHUWLŀFDWLRQIRUVHDIRRGWR HQVXUHUHVSRQVLEOHUDZPDWHULDOVRXUFLQJ ,Q)<ZHODXQFKHGDQ(6*FDSDFLW\EXLOGLQJ LQLWLDWLYHIRUVXSSOLHUVSURYLGLQJPXOWLGLPHQVLRQDO FRPSOLDQFHWUDLQLQJRQFRUHLVVXHV2XUWUDLQLQJRłHUV DGHHSGLYHLQWR(6*FRQFHSWVDQGRXUFRPSOLDQFH VWDQGDUGVIRUVXSSO\FKDLQ(6*FRPSOHPHQWHGE\ EHVWSUDFWLFHVIURPDFURVVWKHLQGXVWU\7KLVKHOSV VXSSOLHUVLPSURYHWKHLUFDSDELOLWLHVRI(6*FRPSOLDQFH DQGVXVWDLQDEOHGHYHORSPHQW (6*FRPSOLDQFHWUDLQLQJIRUVXSSOLHUV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 113 ↗

Slide 114 — 'DWDVHFXULW\DQG

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ɹɽLEDED*URXS *HQHUDO*XLGHOLQHDVWKHFRUHIUDPHZRUN ZHKDYHSXEOLVKHGSULYDF\SROLFLHVDFURVV RXUDSSVWRHQVXUHWKHHQIRUFHPHQWRIRXU VHFXULW\PDQDJHPHQWUHTXLUHPHQWV 'DWDVHFXULW\PDQDJHPHQW :HHQIRUFHVHFXULW\FRQWUROWKURXJKRXWWKHHQWLUHGDWDOLIHF\FOH :HVWULFWO\OLPLWWKHVFRSHDQGIUHTXHQF\RIGDWD FROOHFWLRQ7RSULRULWL]HWKHSURWHFWLRQRISHUVRQDO LQIRUPDWLRQDQGRWKHUVHQVLWLYHGDWDZHKDYH HVWDEOLVKHGDV\VWHPIRUFODVVLI\LQJDQGWLHULQJ GDWDDVVHWV,Q)<ZHLQWURGXFHGODUJH PRGHOVWRHQKDQFHWKHDFFXUDF\RIVHQVLWLYHGDWD LGHQWLŀFDWLRQDQGEURDGHQLWVFRYHUDJH &ROOHFWLRQFODVVLŀFDWLRQ DQGWLHULQJ :HOHYHUDJHHQFU\SWHGVWRUDJHDFFHVVFRQWURO DQGVHFXULW\PRQLWRULQJWRSUHYHQWXQDXWKRUL]HG DFFHVVWDPSHULQJRUGDPDJHWKHUHE\HQVXULQJWKH FRQŀGHQWLDOLW\DYDLODELOLW\DQGLQWHJULW\RIGDWD,Q )<ZHXSJUDGHGRXUDFFHVVFRQWUROSROLF\WR VWDQGDUGL]HOLIHF\FOHPDQDJHPHQWIRUGDWDDFFHVV DQGUHLQIRUFHDFFRXQWFUHGHQWLDOPDQDJHPHQW 6WRUDJHDQGXVDJH 'DWDVHFXULW\PDQDJHPHQW 'DWDULVNPDQDJHPHQW 2YHUVLJKWDQGDXGLW 3ULYDF\SURWHFWLRQ :HKDYHIRUPXODWHGWKH6HFXULW\6SHFLŀ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ŀ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ɹɽLEDED*URXSIRU([WHUQDO'DWD 'LVFORVXUHWRJHWKHUZLWKLWVVXSSRUWLQJV\VWHPV VWDQGDUGL]HVWKHSURFHVVIRUGLVFORVLQJLQWHUQDOGDWDWR H[WHUQDOVWDNHKROGHUV)RUGDWDUHTXHVWVIURPUHJXODWRUV RUODZHQIRUFHPHQWDXWKRULWLHVRXUEXVLQHVVHVSURYLGH ODZIXODQGFRPSOLDQWUHVSRQVHVDIWHUFRQGXFWLQJOHJDO DVVHVVPHQWV)RUVSHFLŀFVFHQDULRVUHTXLULQJKHLJKWHQHG SURWHFWLRQZHHVWDEOLVKFXVWRPL]HGDSSURYDOZRUNŁRZVDQG ULVNDOHUWPHFKDQLVPV 'LVFORVXUHDQG H[WHUQDOSURYLVLRQ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 114 ↗

Slide 115 — 'DWDULVNPDQDJHPHQW

'DWDVHFXULW\DQGSULYDF\SURWHFWLRQ 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ 'DWDULVNPDQDJHPHQW :HKDYHIRUPXODWHGWKHɹɽLEDED*URXS 6SHFLŀFDWLRQVIRU'DWD6HFXULW\$VVHVVPHQWVDQG $XGLWVPDQGDWLQJURXWLQHULVNDVVHVVPHQWVIRU EXVLQHVVVFHQDULRVUHODWHGWRGDWDVHFXULW\DQG SULYDF\SURWHFWLRQ,QFLGHQWVDQGULVNVFRQFHUQLQJ GDWDVHFXULW\DUHFRQWLQXRXVO\PRQLWRUHG 7KLVHQDEOHVUHDOWLPHDOHUWVIRUDQRPDORXV RSHUDWLRQVDQGDFKLHYHVSURDFWLYHGHIHQVH ,QDFFRUGDQFHZLWKWKHɹɽLEDED*URXS6HFXULW\ 6SHFLŀ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ɹɽLEDED*URXS6SHFLŀFDWLRQVIRU+DQGOLQJ(68,QFLGHQWVWRHVWDEOLVK ULVNFODVVLŀFDWLRQDQGWLHULQJVWDQGDUGVDVZHOODVSURWRFROVIRUSUHLQFLGHQWPRQLWRULQJ HDUO\ZDUQLQJLQFLGHQWUHVSRQVHSRVWPRUWHPDQDO\VHVDQGDFFRXQWDELOLW\DVVLJQPHQW (DFKEXVLQHVVKDVGHYHORSHGFRQWLQJHQF\SODQVWDLORUHGWRLWVGDWDVHFXULW\VFHQDULRV7KHVH FRQWLQJHQF\SODQVXSGDWHGRQDQDVQHHGHGEDVLVGHŀQHGHSDUWPHQWDOUHVSRQVLELOLWLHV LQGLYLGXDOGXWLHVKDQGOLQJZRUNŁRZVUHVSRQVHVWUDWHJLHVHVFDODWLRQPHFKDQLVPVDQG GHFLVLRQPDNLQJSURFHGXUHV2XUEXVLQHVVHVUHJXODUO\SHUIRUPHPHUJHQF\GULOOVWRVKDUSHQ LQGLYLGXDOFDSDELOLWLHVLPSURYHKDQGOLQJZRUNŁRZVDQGHQKDQFHGHFLVLRQPDNLQJ SURFHGXUHVWKHUHE\ERRVWLQJWKHHłHFWLYHQHVVRIWKHLUFRQWLQJHQF\SODQV ,QUHVSRQVHWRSXEOLFGLVFRXUVHRULQWHOOLJHQFHFRQFHUQLQJGDWDVHFXULW\DQGSULYDF\SURWHFWLRQ ZHFRQGXFWDQDQDO\VLVPDNHDMXGJHPHQWDQGLVVXHDQDOHUW,IWKHLQIRUPDWLRQLQTXHVWLRQ 'DWDEDFNXSDQGGLVDVWHU UHFRYHU\ ,QFLGHQWUHVSRQVHDQGSRVWPRUWHPDQDO\VHV LVVXEVWDQWLDWHGZHKDQGOHLWDVDULVNLQFLGHQWDVSHURXUULVNFODVVLŀFDWLRQDQG WLHULQJPHFKDQLVP$MRLQWWDVNIRUFHLVWKHQHVWDEOLVKHGFRPSULVLQJVWDłIURPWKH GDWDVHFXULW\OHJDODQGULVNPDQDJHPHQWIXQFWLRQVDWWKH*URXSDQGEXVLQHVV OHYHOV,WH[HFXWHVUHVSRQVHDFWLRQVDQGDVVLJQVUHVSRQVLELOLWLHVDFFRUGLQJWRRXU FRQWLQJHQF\SODQV)RUDVHFXULW\LQFLGHQWLQYROYLQJSHUVRQDOLQIRUPDWLRQZHQRWLI\ XVHUVYLDFKDQQHOVVXFKDVWH[WPHVVDJHVSKRQHFDOOVSXVKQRWLŀFDWLRQVDQG DQQRXQFHPHQWV0HDQZKLOHZHUHSRUWRXUUHVSRQVHDFWLRQVWRUHJXODWRU\DXWKRULWLHV DVUHTXLUHG2QFHWKHLQFLGHQWKDVEHHQKDQGOHGZHFRQGXFWDSRVWPRUWHPDQDO\VLV WRXQGHUVWDQGWKHURRWFDXVHDQGIRUPXODWHUHPHGLHV:KHQWKHLPSOHPHQWDWLRQRI WKHVHUHPHGLHVKDVEHHQYDOLGDWHGZHFORVHWKHFDVHDQGWDNHGLVFLSOLQDU\DFWLRQV DJDLQVWHPSOR\HHVDWIDXOW,Q)<ɹɽLEDED*URXSUHFRUGHGQRPDMRULQFLGHQWVRI GDWDOHDNDJH 7KH'DWD6HFXULW\3ODWIRUPLVRQHRIRXUGDWDULVNPDQDJHPHQWSODWIRUPV:KHQ DSRWHQWLDOULVNLVLGHQWLŀHGDXWRPDWLFDOO\RUPDQXDOO\WKHSODWIRUPJHQHUDWHV DULVNUHFRUG$GHGLFDWHGRSHUDWLRQVWHDPWKHQUHYLHZVDQGYHULŀHVWKHUHFRUG EHIRUHDVVLJQLQJUHPHGLDWLRQWDVNV7KHSODWIRUPIHDWXUHVLQWHOOLJHQWWUDFNLQJ DQGYDOLGDWLRQPHFKDQLVPVWRHQVXUHWKDWHDFKULVNLVHłHFWLYHO\UHVROYHG,Q )<ZHHVWDEOLVKHGDUROHEDVHGDXWKRUL]DWLRQV\VWHPWRHQKDQFHGDWDDFFHVV JRYHUQDQFH7KHV\VWHPWUDQVODWHVURXWLQHDFFHVVSDWWHUQVLQWRVWDQGDUGL]HG UROHSURŀOHVDOORZLQJHPSOR\HHVWRDSSO\IRUUROHVDOLJQHGZLWKWKHLUQHHGV7KLV HOLPLQDWHVUHGXQGDQWDSSOLFDWLRQVDQGLPSURYHVGDWDDFFHVVHŃFLHQF\:HKDYH DOVRLQWURGXFHGDQHVFDODWHGDSSURYDOZRUNŁRZIRUVHQVLWLYHGDWDWRPLWLJDWHULVNV RIGDWDOHDNDJHDQGXQDXWKRUL]HGDFFHVVDWWKHVRXUFH$VEXVLQHVVG\QDPLFVDQG H[WHUQDOHQYLURQPHQWVHYROYHWKH'DWD6HFXULW\3ODWIRUPFRQWLQXRXVO\EURDGHQV WKHUDQJHRIULVNVWKDWLWFDQGHWHFW,Q)<LWLQWHJUDWHG$,WHFKQRORJLHVWR DXWRPDWLFDOO\LGHQWLI\DQRPDORXVEHKDYLRUDQGJHQHUDWHUHPHGLDWLRQWLFNHWV HPSRZHULQJVHFXULW\H[SHUWVWRFRQŀJXUHUXOHVDQGDVVHVVULVNVPRUHHŃFLHQWO\ 'DWDULVNPDQDJHPHQWSODWIRUP ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 115 ↗

Slide 116 — 2YHUVLJKWDQGDXGLW

'DWDVHFXULW\DQGSULYDF\SURWHFWLRQ 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ :HKDYHLQWHJUDWHGDSULYDF\FRPSOLDQFHVFDQQLQJWRROLQWRWKH5 'SODWIRUPWR DXWRPDWLFDOO\LGHQWLI\FRPSOLDQFHULVNVDQGWULJJHUUHPHGLDWLRQZRUNŁRZV7KLVWRROSURYLGHV DFRPSOLDQFHNQRZOHGJHEDVHDQGVXJJHVWVŀ[HV'XULQJWKHWHVWLQJSKDVHFRPSOLDQFHDQG VHFXULW\FKHFNVDUHSHUIRUPHGDJDLQWRHQVXUHDOOLGHQWLŀHGULVNVKDYHEHHQUHPHGLDWHG 2YHUVLJKWDQGDXGLW 3ULYDF\SURWHFWLRQ (DFK\HDUZHPDQGDWHDQGRYHUVHHDWOHDVW RQHFRPSUHKHQVLYHDXGLWRQGDWDVHFXULW\ DQGSULYDF\SURWHFWLRQIRUHDFKEXVLQHVV FRPSOHPHQWHGE\UHJXODUFRPSOLDQFH DXGLWVRQSHUVRQDOLQIRUPDWLRQSURWHFWLRQ 7RDGGUHVVFRPPRQSUREOHPVZHFRQGXFW WDUJHWHGDXGLWVFRYHULQJDUHDVVXFKDVDSS SULYDF\FRPSOLDQFHDFFHVVFRQWUROFURVV ERUGHUGDWDWUDQVIHUVDQGGDWDFLUFXODWLRQ ,Q)<ZHSHUIRUPHGSULYDF\ FRPSOLDQFHDXGLWV$OOLGHQWLŀ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ŀOHFRPSODLQWVYLDLQDSSFXVWRPHUVHUYLFHWKH LQIRUPDWLRQOHDNDJHPRGXOHRIWKHɹɽLEDED6HFXULW\&HQWHUDQGWKH3HUVRQDO ,QIRUPDWLRQ3URWHFWLRQ2Ń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ŀUVWWLPHDSRSXSPHVVDJH SUHVHQWVWKHVHUXOHVDQGDVNVIRUWKHLUFRQVHQW,IWKLUGSDUW\GDWDSURFHVVLQJ H[FHHGVWKHRULJLQDOO\SURPLVHGVFRSHWKHDSSQRWLŀHVWKHXVHUDQGDVNV IRUWKHLUFRQVHQWDJDLQ7RFOHDUO\GLVSOD\WKHUXOHVIRUSURFHVVLQJSHUVRQDO LQIRUPDWLRQZHKDYHJUDGXDOO\LQFRUSRUDWHGDOLVWRIFROOHFWHGSHUVRQDO LQIRUPDWLRQDOLVWRIVKDUHGSHUVRQDOLQIRUPDWLRQDQGVLPSOLŀHGSULYDF\ SROLFLHVLQWRRXUDSSV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 116 ↗

Slide 117 — 6DIHJXDUGLQJ

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ɹɽLEDED *URXSGHŀQHVRXUPDQDJHPHQWVWUXFWXUH DQGUHVSRQVLELOLWLHVIRUF\EHUVHFXULW\DV ZHOODVHQGWRHQGULVNPDQDJHPHQW UHTXLUHPHQWV:HFRQVWDQWO\XSGDWH LWVVXSSRUWLQJSROLFLHV,Q)<ZH LQWURGXFHGQHZPDQDJHPHQWVSHFLŀFDWLRQV IRUWKHVHFXULW\RIDSSOLFDWLRQVDQG$, WHFKQRORJLHV &\EHUVHFXULW\PDQDJHPHQW &\EHUVHFXULW\LVDIXQGDPHQWDO VDIHJXDUGIRUGLJLWDOFRPPHUFH VHUYLFHV:HFRQWLQXRXVO\UHŀQH RXUF\EHUVHFXULW\GHIHQVHV\VWHP IRUFORXGSODWIRUPVDQGEXVLQHVV RSHUDWLRQV &\EHUVHFXULW\IRU FORXGSODWIRUPV ɹɽLEDED&ORXGEXLOGVVHFXUH FRPSOLDQWFORXGLQIUDVWUXFWXUH,W HPEHGVVHFXULW\FDSDELOLWLHVLQWR WKHGHYHORSPHQWDQGRSHUDWLRQRI FORXGSURGXFWVDQG$,DSSOLFDWLRQVWR HVWDEOLVKDVROLGVHFXULW\IRXQGDWLRQ IRULQQRYDWLRQGULYHQJURZWK &\EHUVHFXULW\PDQDJHPHQW &\EHUVHFXULW\ULVNPDQDJHPHQW 6HFXULW\WUDLQLQJ 6XSHUYLVLRQDQGFHUWLŀFDWLRQ ,'&7HFKQRORJ\$VVHVVPHQW6HFXULW\&DSDELOLW\RI&KLQHVH3XEOLF&ORXG 6HUYLFH3URYLGHUV )RUF\EHUVHFXULW\PDQDJHPHQW ZHHPEHG$,LQWRYDULRXVVWDJHV VXFKDVULVNLGHQWLŀFDWLRQ5 ' VHFXULW\DQGLQFLGHQWUHVSRQVH $,XQFRYHUVSRWHQWLDOULVNVYLD YXOQHUDELOLW\VFUHHQLQJVDQG DWWDFNVLPXODWLRQV,WDOVRDVVLVWV LQULVNWULDJHYXOQHUDELOLW\ UHPHGLDWLRQDQGVHQVLWLYHGDWD LGHQWLŀFDWLRQ)XUWKHUPRUHLW SHUIRUPVVWDQGDUGL]HGDXGLWV 7KHVHIXQFWLRQVVKRUWHQWKHF\FOH IRUSURFHVVLQJVHFXULW\WLFNHWV%\ DXWRPDWLQJLQFLGHQWDQDO\VLVDQG UHVSRQVH$,OLEHUDWHVVHFXULW\ H[SHUWVIURPURXWLQHWDVNVVRWKDW WKH\FDQFRQFHQWUDWHRQFULWLFDO GHFLVLRQPDNLQJ $,HPSRZHUHGVHFXULW\ RSHUDWLRQV ,Q)<ɹɽLEDED&ORXG DFKLHYHGWKH DFURVVDOOVHYHQGLPHQVLRQV ,'& VVHFXULW\FDSDELOLW\ DVVHVVPHQWIRU&KLQD VSXEOLF FORXGVHUYLFHSURYLGHUV KLJKHVWVFRUHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 117 ↗

Slide 118 — &\EHUVHFXULW\ULVN

6DIHJXDUGLQJF\EHUVHFXULW\ 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ &\EHUVHFXULW\ULVN PDQDJHPHQW :HKDYHHVWDEOLVKHGDF\EHUVHFXULW\ULVNPDQDJHPHQW PHFKDQLVPFHQWHUHGRQULVNLGHQWLŀFDWLRQLQFLGHQW UHVSRQVHDQGVHFXULW\FRPPXQLFDWLRQWRGULYH FRQWLQXRXVLPSURYHPHQWVLQRXUULVNKDQGOLQJ FDSDELOLWLHV 5LVNLGHQWLŀFDWLRQDQGDVVHVVPHQW :HUHJXODUO\LGHQWLI\F\EHUVHFXULW\ULVNVYLDDVVHW VWRFNWDNLQJYXOQHUDELOLW\VFDQQLQJSHQHWUDWLRQWHVWLQJ WKUHDWLQWHOOLJHQFHFROOHFWLRQDQGHPSOR\HHUHSRUWLQJ 2QFHGHWHFWHGULVNVDUHURXWHGE\WKHVHFXULW\ RSHUDWLRQVWHDPWRVHFXULW\H[SHUWVIRUFRQŀUPDWLRQ EHIRUHEHLQJDVVLJQHGWR5 'WHDPVIRUUHPHGLDWLRQ )ROORZLQJUHPHGLDWLRQVHFXULW\H[SHUWVYHULI\WKH ŀ[HVDQGFRQGXFWDSRVWPRUWHPDQDO\VLV5LVNVDUH FODVVLŀHGDQGWLHUHGZLWKPDMRURQHVUHSRUWHGWR UHJXODWRU\DXWKRULWLHVDVUHTXLUHGE\ODZ $EDVWLRQKRVWLVDVSHFLDOL]HGVHUYHUXVHGIRUVHFXUHRSHUDWLRQDQGPDLQWHQDQFHPDQDJHPHQWDFWLQJOLNHWKHV\VWHP VVHFXULW\JXDUG $ZKLWHKDWLVDQH[WHUQDOVHFXULW\UHVHDUFKHUZKRDVVLVWVLQLGHQWLI\LQJV\VWHPYXOQHUDELOLWLHVYLDDXWKRUL]HGFKDQQHOV %\HQJDJLQJWKHZKLWHKDWHFRV\VWHPDQGUXQQLQJ EXJERXQW\SURJUDPVZHWDSLQWRH[WHUQDOH[SHUWLVH WRŀOORXULQWHUQDOJDSVLQVHFXULW\ULVNLGHQWLŀFDWLRQ ,Q)<ZHKRVWHGRXULQDXJXUDO*OREDO$, 6HFXULW\&KDOOHQJHJDWKHULQJRYHUWHFKQLFDO SURIHVVLRQDOVWRFRQGXFWWHQVRIWKRXVDQGVRI DGYHUVDULDOVLPXODWLRQVDFURVVUHDOZRUOGVFHQDULRV 7KHVHHłRUWVYDOLGDWHGWKHLQWULQVLFVHFXULW\RIRXU PRGHOVUHYHDOHGULVNVLQSUDFWLFDODSSOLFDWLRQVDQG VWUHVVWHVWHGRXUVHFXULW\JXDUGUDLOV %XJERXQW\PHFKDQLVP &\EHUVHFXULW\IRUEXVLQHVVRSHUDWLRQV :HFRQWLQXRXVO\PRQLWRURXULQIRUPDWLRQV\VWHPVDQGQHWZRUNHQYLURQPHQWV WRVZLIWO\LGHQWLI\ULVNVDQGDGDSWRXUUHVSRQVHVWUDWHJLHV2XUDSSURDFKWR F\EHUVHFXULW\LVGHIHQVHLQGHSWKDQGWUXVWHGPDQDJHPHQW,QDFFRUGDQFH ZLWKWKHɹɽLEDED*URXS6HFXULW\0DQDJHPHQW3ROLF\IRUWKH6RIWZDUH6XSSO\ &KDLQDQGWKH6XSSOLHU6HFXULW\5HTXLUHPHQWVZHFRQGXFWVHFXULW\UHYLHZV IRUVXSSOLHUVDQGWKLUGSDUW\VRIWZDUH7KHVHUHYLHZVVWDUWIURPLQLWLDOYHWWLQJ DQGFRYHUWKHVRIWZDUHOLIHF\FOHIURPGHSOR\PHQWDQGLQFLGHQWUHVSRQVHWR GHFRPPLVVLRQLQJ 'HIHQVHLQGHSWK 7UXVWHGPDQDJHPHQW Ȱ (QGSRLQWVHFXULW\μ :HGHSOR\VHFXULW\PHDVXUHVVXFKDVHQGSRLQWGHWHFWLRQ DQGUHVSRQVHSURWHFWLRQDJDLQVWGDWDOHDNDJHDGPLVVLRQFRQWURODFFHVV FRQWURODQGFOLHQWKDUGHQLQJ Ȱ *DWHZD\VHFXULW\μ:HGHSOR\VHFXULW\PHDVXUHVVXFKDVSURWHFWLRQDJDLQVW GLVWULEXWHGGHQLDORIVHUYLFHDWWDFNVZHEDSSOLFDWLRQŀUHZDOOVDQGEDVWLRQ KRVWV WRGHIHQGDJDLQVWH[WHUQDOPDOLFLRXVDWWDFNV Ȱ $SSOLFDWLRQDQGKRVWVHFXULW\μ :HHPEHGDXWRPDWHGVFDQVLQWRWKH GHYHORSPHQWSKDVHGHSOR\UXQWLPHDSSOLFDWLRQVHOISURWHFWLRQDVZHOODV G\QDPLFPRQLWRULQJDQGFRQGXFWURXWLQHSHQHWUDWLRQWHVWLQJWRFRQWLQXRXVO\ VKULQNWKHDWWDFNVXUIDFH Ȱ 6WRUDJHVHFXULW\μ:HGHSOR\VHFXULW\PHDVXUHVVXFKDVGDWDHQFU\SWLRQ UHJXODUEDFNXSDQGDFFHVVFRQWURO :HKDYHHVWDEOLVKHGDWUXVWHGV\VWHPWKDWFRYHUVLGHQWLW\PDQDJHPHQWVWULFW DXWKRUL]DWLRQDQGEHKDYLRUDODXGLWLQJ&RQWLQXRXVRSHUDWLRQDOPRQLWRULQJ PLWLJDWHVWKHULVNVRIXQDXWKRUL]HGDFFHVVDQGGDWDOHDNDJHVLJQLŀFDQWO\ EROVWHULQJRYHUDOOGHIHQVLYHUHVLOLHQFH 5 'SURFHVVRIFORXGSURGXFWV $IWHUWKHODXQFKRIFORXGSURGXFWV )XOOOLIHF\FOHPDQDJHPHQW ɹɽLEDED&ORXGLQWHJUDWHVVHFXULW\WRROVDQGFRQWUROPHFKDQLVPVDFURVVWKHHQWLUH SURGXFWFKDLQHQVXULQJWKDWVHFXULW\GRHVQRWUHO\RQDQ\VLQJOHOLQN Ȱ 3URMHFWLQLWLDWLRQDQGGHVLJQ$OOSURMHFWVXQGHUJRDPDQGDWRU\VHFXULW\UHYLHZ ZKHUHH[SHUWVSHUIRUPWKUHDWPRGHOLQJRQWKHDUFKLWHFWXUHVIRUQHWZRUNLQJ DSSOLFDWLRQVDQGWHQDQWLVRODWLRQ7KHVHH[SHUWVLGHQWLI\SRWHQWLDOULVNVDQGGHVLJQ VDIHJXDUGVKROGLQJYHWRSRZHURYHUGHVLJQSURSRVDOV Ȱ &RGLQJμ'HYHORSHUVDGKHUHWRVHFXULW\UXOHVXVLQJVWDQGDUGL]HGVHFXULW\WRRONLWV DQGVHFXULW\LQVSHFWLRQSOXJLQV Ȱ 7HVWLQJμ$QLQKRXVHVFDQQLQJWRROLQWHJUDWHGLQWRWKH5 'SURFHVVDXWRPDWLFDOO\ LGHQWLŀHVYXOQHUDELOLWLHVDQGEORFNVH[SORLWVVXFKDVXQDXWKRUL]HGDFFHVV$XWRPDWHG WHVWVJHQHUDWHGEDVHGRQVSHFLŀFDWLRQVHQVXUHKLJKFRYHUDJHWHVWLQJIRUWKH$3,VRI FRUHSURGXFWV Ȱ 5HOHDVHDQGFKDQJHμ%HIRUHDSURGXFWRUFKDQJHJRHVOLYHDVFDQIRUWKHGHIDXOW FRQŀJXUDWLRQDQGVHQVLWLYHLQIRUPDWLRQHQVXUHVDGKHUHQFHWREDVHOLQHUHTXLUHPHQWV VXFKDVOHDVWSULYLOHJHDQGDPLQLPXPDWWDFNVXUIDFHWKHUHE\VHFXULQJSDVVZRUGV DQGDFFHVVNH\V Ȱ $QLQWUXVLRQGHWHFWLRQDQGUHVSRQVHPHFKDQLVPWUDFNVEHKDYLRUDODQRPDOLHVDQG WUDŃFSDWWHUQVWRVZLIWO\LGHQWLI\DQGUHVROYHSRWHQWLDOULVNV&RQWLQXRXVPRQLWRULQJ IRUH[WHUQDOWKUHDWLQWHOOLJHQFHSURDFWLYHO\XQFRYHUVQHZULVNVZKLFKDUHWKHQ DVVHVVHGIRUV\VWHPLPSDFWDQGDGGUHVVHGYLDUDSLGUHPHGLDWLRQ Ȱ :HKDYHHVWDEOLVKHGDURXWLQHDGYHUVDULDOH[HUFLVHPHFKDQLVPZKHUHZHFRQGXFW UHVHDUFKLQWRFXWWLQJHGJHRłHQVLYHDQGGHIHQVLYHWHFKQRORJLHVIRUWKHSXUSRVHRI VLPXODWHGSHQHWUDWLRQWHVWVRQRXU$,LQIUDVWUXFWXUH ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 118 ↗

Slide 119 — 6HFXULW\WUDLQLQJ

6DIHJXDUGLQJF\EHUVHFXULW\ 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ ,QFLGHQWUHVSRQVHDQGGULOOV 6HFXULW\FRPPXQLFDWLRQ DQGQRWLŀFDWLRQ ,QDFFRUGDQFHZLWKWKHɹɽLEDED*URXS 1HWZRUN6HFXULW\(PHUJHQF\5HVSRQVH 6SHFLŀFDWLRQDQGWKHɹɽLEDED*URXS &\EHUVHFXULW\,QFLGHQW5HSRUWLQJ*XLGHOLQHV ZHKDYHHVWDEOLVKHGDF\EHUVHFXULW\ LQFLGHQWUHVSRQVHPHFKDQLVPFRYHULQJWKH HQWLUHSURFHVVIURPLQFLGHQWUHSRUWLQJDQG VHYHULW\FODVVLŀFDWLRQWRFRQWLQJHQF\SODQ H[HFXWLRQDQGHPHUJHQF\KDQGOLQJ$IWHU LQFLGHQWVDUHUHVROYHGZHFRQGXFWDSRVW PRUWHPDQDO\VLVWRSLQSRLQWURRWFDXVHV DVVLJQDFFRXQWDELOLW\DQGIRUPXODWH UHPHGLDWLRQSODQV :HFRQGXFWUHJXODUF\EHUVHFXULW\GULOOV EDVHGRQDFWXDOEXVLQHVVQHHGV,Q)< ZHRUJDQL]HGQLQHVXFKGULOOV7KHɹɽLEDED *URXS,QIUDVWUXFWXUH6HFXULW\0DQDJHPHQW 6SHFLŀFDWLRQVUHTXLUHVKLJKDYDLODELOLW\ IRULQIUDVWUXFWXUHDQGUHJXODUGULOOVIRU YHULI\LQJEXVLQHVVFRQWLQXLW\,Q)< ZHXSJUDGHGRXUGULOOPHWKRGRORJ\IURP VLPXODWHGWUDŃFGLVUXSWLRQVWRSK\VLFDO QHWZRUNGLVFRQQHFWLRQV'XULQJEXLOGLQJ OHYHOGULOOVFRQGXFWHGDWRXUPDMRUGDWD FHQWHUVLQ=KDQJEHLDQG1DQWRQJEXVLQHVV RSHUDWLRQVUHFRYHUHGZLWKLQPLQXWHV:H DGGUHVVLGHQWLŀ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ŃFLDOZHEVLWH 6HFXULW\WUDLQLQJ :HKDYHHVWDEOLVKHGDVWDłZLGHWUDLQLQJV\VWHPIRU F\EHUVHFXULW\GDWDVHFXULW\DQGSULYDF\SURWHFWLRQ%RWKIXOO WLPHHPSOR\HHVDQGRXWVRXUFHGZRUNHUVDUHUHTXLUHGWR XQGHUJRUHJXODUWUDLQLQJDQGDVVHVVPHQWVRQVHFXULW\SROLFLHV NQRZOHGJHDQGVNLOOV7KH\PXVWSDVVWKH&RGHRI%XVLQHVV &RQGXFWH[DPLQDWLRQZKLFKLQFOXGHVDPRGXOHRQF\EHUVHFXULW\ DQGGDWDVHFXULW\)XUWKHUPRUHIXOOWLPHHPSOR\HHVLQWHUQVDQG RXWVRXUFHGZRUNHUVLQWHFKQLFDOUROHVPXVWDFKLHYHDQDQQXDO VHFXULW\UHGOLQHFHUWLŀFDWLRQ :HSURYLGHUROHVSHFLŀFWUDLQLQJ)RU3HUVRQDO,QIRUPDWLRQ 3URWHFWLRQ2ŃFHUVDQGOHJDOVWDłDVZHOODVWKRVHLQYROYHGLQ SURGXFWVDQG5 'ZHSURYLGHWUDLQLQJRQGDWDVHFXULW\DQG SULYDF\SURWHFWLRQ)RUVHFXULW\SHUVRQQHOZHRłHUF\EHUVHFXULW\ WUDLQLQJFRYHULQJFRPSOLDQFHPDQDJHPHQWULVNPDQDJHPHQW DQGDXGLWLQJ,Q)<ZHRUJDQL]HGVXFKWDUJHWHGWUDLQLQJ VHVVLRQV )XUWKHUPRUHZHKDYHRSHQHGWKH6HFXULW\6HUYLFH&HQWHUWR VXSSRUWVHOIGLUHFWHGOHDUQLQJ,Q)<IXOOWLPHHPSOR\HHV DQGRXWVRXUFHGZRUNHUVYLVLWHGLWRYHUPLOOLRQWLPHV 6XSHUYLVLRQDQGFHUWLŀFDWLRQ (DFK\HDUZHLQVSHFWF\EHUVHFXULW\FRPSOLDQFHDFURVV RXUEXVLQHVVHVLQDFFRUGDQFHZLWKRXUF\EHUVHFXULW\ PDQDJHPHQWSROLF\YLDLQWHUYLHZVRSHUDWLRQDOGDWD UHYLHZVZDONWKURXJKWHVWVDQGUHGEOXHWHDPLQJ &RQWLQXRXVPRQLWRULQJIRUGDWDGDVKERDUGVSURYLGHV DUHDOWLPHYLHZRIVHFXULW\VWDWXVDQGHQVXUHVFORVHG ORRSYDOLGDWLRQIRULGHQWLŀHGYXOQHUDELOLWLHV%DVHGRQRXU QHZO\UHOHDVHG$,VHFXULW\PDQDJHPHQWVSHFLŀFDWLRQV ZHODXQFKHG$,VHFXULW\LQVSHFWLRQVDFURVVRXUEXVLQHVVHV LQ)<WRDVVHVVWKHOHYHORI$,ULVNVDQGWKH LPSOHPHQWDWLRQRIFRQWUROVWUDWHJLHVLQRŃFHVHWWLQJVDQG SURGXFWLRQHQYLURQPHQWV,QWKHŀVFDO\HDUZHFRPSOHWHG VXFKLQVSHFWLRQVIRURXUPDMRUEXVLQHVVHVDQGGURYH QHFHVVDU\LPSURYHPHQWV )XUWKHUPRUHZHDQQXDOO\KLUHDWKLUGSDUW\WRFRQGXFW DQLQWHUQDOFRQWURODXGLWZKLFKWHVWVWKHGHVLJQDQG RSHUDWLQJHłHFWLYHQHVVRILQIRUPDWLRQWHFKQRORJ\JHQHUDO FRQWUROVFRYHULQJSROLFLHVVSHFLŀFDWLRQVDQGLQFLGHQW UHVSRQVHDVZHOODVWKHGHSOR\PHQWRIVHFXULW\PHDVXUHV VXFKDVDFFHVVFRQWURO6XFKDXGLWVJHQHUDWHDWWHVWHG V\VWHPDQGRUJDQL]DWLRQFRQWUROV62&UHSRUWVZKLFK ɹɽLEDED&ORXGOHYHUDJHVWRVKRZFORXGFXVWRPHUVDQG RWKHUVWDNHKROGHUVRXULQWHUQDOFRQWUROPHDVXUHVDV ZHOODVRXUH[SHUWLVHLQDQGFRPPLWPHQWWRLQIRUPDWLRQ VHFXULW\VHUYLFHDYDLODELOLW\DQGFRQŀGHQWLDOLW\ 7KHVHUHIHUWRWKHIRXQGDWLRQDOFRQWUROVRI,7V\VWHPVDFURVVDFFHVVPDQDJHPHQWFKDQJHPDQDJHPHQWDQGRSHUDWLRQDQGPDLQWHQDQFH2 0PDQDJHPHQW ɹɽLEDED&ORXGUXQVDVHFXULW\ EXOOHWLQRQLWVRŃFLDOZHEVLWHWR LVVXHDQQRXQFHPHQWVDERXWSURGXFW VHFXULW\LVVXHVRULQGXVWU\ZLGHULVNV WKDWPD\LPSDFWFXVWRPHUV7KHVH DQQRXQFHPHQWVDUHFDWHJRUL]HGLQWR YXOQHUDELOLW\DGYLVRULHVVHFXULW\LPSDFW VWDWHPHQWVULVNDOHUWVDQGPRUH 6HFXULW\EXOOHWLQ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 119 ↗

Slide 120 — (QKDQFLQJ

(QKDQFLQJWHFKQRORJ\HWKLFV 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ (QKDQFLQJ WHFKQRORJ\HWKLFV $,JRYHUQDQFHKDVHPHUJHGDVDYLWDOFRPSRQHQWRIVRFLDO UHVSRQVLELOLW\:HDUHFRPPLWWHGWRGHYHORSLQJUHVSRQVLEOH $,E\EXLOGLQJDQGUHŀQLQJDWHFKQRORJ\HWKLFVJRYHUQDQFH IUDPHZRUN7KLVPDNHVVRFLDOJRRGDQLQWULQVLFPHFKDQLVPIRU WKHGHYHORSPHQWRIWHFKQRORJLHV ,QUHVSRQVHWRWKHUDSLGLWHUDWLRQVRI$,WHFKQRORJLHVZH KDYHHVWDEOLVKHGDQ$,JRYHUQDQFHVWUXFWXUHEHQFKPDUNHG DJDLQVWLQWHUQDWLRQDOIUDPHZRUNVLQFOXGLQJWKH*OREDO'LJLWDO &RPSDFWDQGWKH*OREDO$,*RYHUQDQFH,QLWLDWLYH%XLOGLQJ RQWKLVIRXQGDWLRQHDFKEXVLQHVVH[SORUHVUHVSRQVLEOH$, SUDFWLFHVWDLORUHGWRLWVVSHFLŀFFKDUDFWHULVWLFVLQDFFRUGDQFH ZLWKDSSOLFDEOHODZVDQGUHJXODWLRQV7KHVHSUDFWLFHVDUH XQGHUSLQQHGE\WKHFRUHSULQFLSOHVRISHRSOHFHQWULFLW\LQFOXVLRQ LQWHJULW\SULYDF\SURWHFWLRQVDIHW\ UHOLDELOLW\WUXVWZRUWKLQHVV FRQWUROODELOLW\DQGRSHQFRJRYHUQDQFH ɹɽLEDED*URXSKDVHVWDEOLVKHGD&RPPLWWHHRQ*RYHUQDQFH RI(WKLFVLQ6FLHQFHDQG7HFKQRORJ\DQGHDFKEXVLQHVVKDV LQVWLWXWHGDVWDQGLQJERG\IRUWHFKQRORJ\HWKLFV$VRI0DUFK ZHKDGUHOHDVHGWKH&RGHRI*RYHUQDQFHRI(WKLFVLQ 6FLHQFHDQG7HFKQRORJ\RIɹɽLEDED*URXSWKH0DQDJHPHQW 6WDQGDUGVIRUWKH(WKLFV5HYLHZRI6FLHQFHDQG7HFKQRORJ\ RIɹɽLEDED*URXSDQGWKHɹɽLEDED*URXS0DQDJHPHQW 6SHFLŀFDWLRQVIRU$,7HFKQRORJLHVDWWKH*URXSOHYHO(DFK EXVLQHVVIRUPXODWHVFRUUHVSRQGLQJLPSOHPHQWDWLRQUXOHVEDVHG RQLWVVHFWRUDODWWULEXWHVDQGRSHUDWLRQDOFKDUDFWHULVWLFV 0DQDJHPHQWPHDVXUHV &DSDFLW\EXLOGLQJIRU$,JRYHUQDQFH %XLOGLQJFRQVHQVXVIRUFRPPRQGHYHORSPHQW 0DQDJHPHQWPHDVXUHV 'HYHORSPHQWDQGWUDLQLQJ :HKDYHHVWDEOLVKHGDPDQDJHPHQWIUDPHZRUNHQFRPSDVVLQJERWK PRGHOVDQGDSSOLFDWLRQV :HHPEHGWHFKQRORJ\HWKLFVLQWRWKHHQWLUHSURFHVVRIGHYHORSLQJDQG WUDLQLQJPRGHOV7KLVHłRUWLVDQFKRUHGLQVDIHW\FRPSOLDQFHDQGYDOXH DOLJQPHQWZLWKGDWDTXDOLW\VHUYLQJDVWKHIRXQGDWLRQ :HHQIRUFHPXOWL GLPHQVLRQDOFULWHULDIRU GDWDLQWDNHSULRULWL]LQJ UHSXWDEOHGDWDVHWVZLWK FOHDULQWHOOHFWXDOSURSHUW\ ULJKWVDQGFRPSOLDQWRULJLQV 7KLVLVFRPSOHPHQWHGE\ WKHJUDGXDOLQWURGXFWLRQ DQGGHYHORSPHQWRIKLJK TXDOLW\WHFKQRORJ\HWKLFV GDWDVHWV7RHQVXUHGDWD GLYHUVLW\ZHFXUDWHDZHOO EDODQFHGPL[RIPXOWLSOH GDWDVRXUFHVZKLOHDGKHULQJ WRFRPSOLDQFHUHTXLUHPHQWV IRUWUDLQLQJGDWD :HKDYHHVWDEOLVKHG DPXOWLWLHUŀOWHULQJ PHFKDQLVPWKDWFRPELQHV DXWRPDWHGGDWDFOHDQLQJ ZLWKPDQXDOUHYLHZ7KLV PHFKDQLVPLGHQWLŀHV DQGUHFWLŀHVFRQWHQWWKDW H[KLELWVGLVFULPLQDWRU\ ODQJXDJHRULQDSSURSULDWH YDOXHV%\UHGXFLQJWKH LQFOXVLRQRIULVN\GDWD ZHHQVXUHWKHVDIHW\DQG FRPSOLDQFHRIWUDLQLQJ GDWDDWWKHVRXUFH :HFOHDUO\GLł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ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 120 ↗

Slide 121 — 'HSOR\PHQWDQGRSHUDWLRQ

(QKDQFLQJWHFKQRORJ\HWKLFV 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ 'HSOR\PHQWDQGRSHUDWLRQ 7HFKQRORJ\HWKLFVUHYLHZ 3RVWODXQFKZHGHSOR\RSHUDWLRQDOVDIHJXDUGV IRUPRGHOVDQGDSSOLFDWLRQVFRYHULQJFRQWHQW TXDOLW\FRQWHQWODEHOLQJDQGXVHUULJKWV :HKDYHHVWDEOLVKHGDWHFKQRORJ\HWKLFV UHYLHZPHFKDQLVPZKLFKFRYHUV$, DFWLYLWLHVWKDWPD\SRVHHWKLFDOULVNVWR KXPDQGLJQLW\SXEOLFRUGHUOLIHKHDOWK WKHHFRHQYLURQPHQWDQGVXVWDLQDEOH GHYHORSPHQW7KHUHYLHZSURFHVV LQFOXGHVVWDJHVVXFKDVULVNLGHQWLŀFDWLRQ DVVHVVPHQWDQGLQVSHFWLRQDSSO\LQJ DSSURSULDWHSURFHGXUHVEDVHGRQWKH WHFKQRORJ\W\SHDQGWKHULVNOHYHO)RU WKHZKROHGXUDWLRQRI$,DFWLYLWLHVZH FRQWLQXRXVO\PRQLWRUFKDQJHVLQHWKLFDO ULVNV5HFRJQL]LQJWKHEURDGUHDFKDQG OLPLWHGWUDFHDELOLW\RIRSHQVRXUFH SURMHFWVZHLQFRUSRUDWHWKHLUPRGHO ZHLJKWVGDWDVHWVDQGFRGHLQWRWKH UHYLHZVFRSH 7KHVHDUHLQWHUQDOYDULDEOHVRIPRGHOVWKDWGHWHUPLQHKRZWKH\SURFHVVLQIRUPDWLRQDQGJHQHUDWHRXWSXWV )RUGHWHUPLQLVWLFLVVXHVLQNH\GRPDLQVZHKDYHHVWDEOLVKHGDQLQWHUYHQWLRQPHFKDQLVPDQGDQRPQLPRGDOVDIHW\HQJLQH DSSO\LQJFRQWHQWVDIHW\JXDUGUDLOVWRXVHULQSXWVDQGPRGHORXWSXWV)XUWKHUPRUHZHFRQGXFWSURGXFWULVNDVVHVVPHQWVWR LGHQWLI\DUHDVIRULPSURYHPHQWDQGRSWLPL]HRXUGHIHQVHVWUDWHJLHV &RQWHQWDFFXUDF\DQGVDIHW\ 7KURXJKSXEOLFFKDQQHOVVXFKDVSURGXFWVHUYLFHDJUHHPHQWVZHGLVFORVHWKHOLPLWDWLRQVDQGXVDJHQRUPVRI$,VHUYLFHV WRKHOSXVHUVUHDVRQDEO\HYDOXDWHWKHFDSDELOLW\ERXQGDULHVRI$,WHFKQRORJLHV)XUWKHUPRUHZHSURYLGHUHDGLO\DYDLODEOH FRPPXQLFDWLRQFKDQQHOVWRSURPSWO\DGGUHVVFRPSODLQWVDQGIHHGEDFNIURPXVHUV 8VHUQRWLŀFDWLRQDQGIHHGEDFN :HKDYHHVWDEOLVKHGDQRSHUDWLRQDOPRQLWRULQJPHFKDQLVPIRUPRGHOVDQGDSSOLFDWLRQV,WWULJJHUVWLPHO\DOHUWVIRUDQRPDOLHV WRGULYHUHPHGLDWLRQDQGRSWLPL]DWLRQ)XUWKHUPRUHZHDUFKLYHDOOLWHUDWLYHXSGDWHORJVWRLQIRUPWKHIRUPXODWLRQRIVDIHW\ PDQDJHPHQWVWUDWHJLHV &RQWLQXRXVPRQLWRULQJDQGRSWLPL]DWLRQ :HKDYHHVWDEOLVKHGDGXDOFRQWHQWLGHQWLŀFDWLRQPHFKDQLVPFRPELQLQJYLVLEOHDQGLQYLVLEOHPDUNV3URPLQHQW$,JHQHUDWHG ODEHOVDUHDWWDFKHGWRV\QWKHWLFFRQWHQWIRULQVWDQFHLPDJHVDQGYLGHRVDVZHOODVWRXVHULQWHUIDFHV0HDQZKLOHPHWDGDWD HPEHGGHGLQYLVLEOHPDUNVHQVXUHWKHWUDFHDELOLW\RIFRQWHQW:HHQIRUFHVWDQGDUGL]HGPDQDJHPHQWIRUWKHVHLGHQWLŀHUVYLD SURGXFWVHUYLFHDJUHHPHQWVSODWIRUPDQQRXQFHPHQWVDQGFRPPXQLW\UXOHVH[SOLFLWO\SURKLELWLQJXVHUVIURPPDOLFLRXVO\ WDPSHULQJZLWKRUUHPRYLQJWKHP $,JHQHUDWHGFRQWHQWPDUNLQJ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 121 ↗

Slide 122 — &DSDFLW\EXLOGLQJIRU$,

(QKDQFLQJWHFKQRORJ\HWKLFV 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ &DSDFLW\EXLOGLQJIRU$, JRYHUQDQFH :HKDYHJUDGXDOO\GHYHORSHG$,JRYHUQDQFH FDSDELOLWLHVFRYHULQJGDWDVHWFRQVWUXFWLRQ EHKDYLRUDOJXLGHOLQHVVDIHW\HYDOXDWLRQV JXDUGUDLOVDQGDSSOLFDWLRQVDQGER[HV 'DWDVHWVIRUWHFKQRORJ\HWKLFVDQG EHKDYLRUDOJXLGHOLQHVIRU$,XVDJH 6DQGER[IRU$,DJHQWV :HKDYHGHYHORSHGDSHRSOHFHQWULF&KLQHVHODQJXDJH GDWDVHWIRUWHFKQRORJ\HWKLFVVSDQQLQJPDMRU GLPHQVLRQVDQGŀQHJUDLQHGFDWHJRULHVFRPSOHWHZLWK HYDOXDWLRQEHQFKPDUNV7KLVGDWDVHWLVEHLQJSURJUHVVLYHO\ HPEHGGHGLQWRRXUPRGHOWUDLQLQJLWHUDWLRQV :HKDYHHVWDEOLVKHGEHKDYLRUDOJXLGHOLQHVIRUXVLQJ$, PRGHOVDQGDSSOLFDWLRQV7KHVHJXLGHOLQHVZKLFKDUH RSHQVRXUFHWUDQVLWLRQ$,VDIHW\IURPSDVVLYHGHWHFWLRQ WRDFWLYHGLVFLSOLQHGHŀQLQJFOHDUEHKDYLRUDOERXQGDULHV DQGHVWDEOLVKLQJUHVROXWLRQPHFKDQLVPVIRUFRQŁLFWLQJ LQVWUXFWLRQV)XUWKHUPRUHZHKDYHLQWURGXFHGWKHFRQFHSW RIFRQVWUXFWLYHVDIHW\DOLJQPHQWZKLFKUHSODFHVRXWULJKW UHIXVDOVZLWKJXLGDQFHIRUORZULVNTXHULHV7KLVSUHVHUYHV WKHJHQHUDOXWLOLW\RIPRGHOVZLWKRXWFRPSURPLVLQJVDIHW\ 6DIHW\HYDOXDWLRQDQGJXDUGUDLOV :HKDYHLQWURGXFHGWKH6(YDOIUDPHZRUNWR HVWDEOLVKDIRXUWLHUULVNFODVVLŀ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ŀFDQWO\UHGXFH IDOVHUHIXVDOUDWHVZLWKRXWŀQHWXQLQJPRGHOV7KLV EROVWHUVVDIHW\LQFRPSOH[LQWHUDFWLYHVFHQDULRV $,PDUNLQJDQG$,*&GHWHFWLRQ :HFRQGXFWRQJRLQJUHVHDUFKLQ$,PDUNLQJ WHFKQRORJLHV$VRI0DUFKZHKDGEHHQ JUDQWHGDFXPXODWLYHWRWDORIUHODWHGSDWHQWV 1RWDEO\RXULQYLVLEOHZDWHUPDUNLQJWHFKQRORJ\ EDVHGRQGHHSOHDUQLQJLVUREXVWDQGDWWDFN UHVLVWDQW:DWHUPDUNVHPEHGGHGZLWKWKLV WHFKQRORJ\FDQEHH[WUDFWHGHYHQLIFRQWHQWLV FURSSHGFRPSUHVVHGRUIRUPDWFRQYHUWHG $WWKHWK&KLQD$,&RPSHWLWLRQɹɽLEDEDZDV DZDUGHG*UDGH$FHUWLŀFDWHVLQWKUHHDUHDV UHODWHGWR$,JHQHUDWHGFRQWHQW$,*&$,*& DXGLRGHWHFWLRQ$,*&YLGHRGHWHFWLRQDQG$,*& LGHQWLŀHUH[WUDFWLRQDQGWUDFHDELOLW\FDVHV 7KHGHHSLQWHJUDWLRQRI$,DJHQWVLQWREXVLQHVV VFHQDULRVSRVHVQRYHOVHFXULW\DQGHWKLFDO FKDOOHQJHV:HKDYHGHYHORSHGDQGRSHQ VRXUFHG2SHQ6DQGER[DJHQHUDOSXUSRVH VDQGER[IRU$,DJHQWV,WGHOLYHUVDIXOOVHFXULW\ VROXWLRQIRU$,DJHQWVVSDQQLQJFRQWDLQHU LVRODWLRQQHWZRUNFRQWURODQGUHVRXUFH FRQVWUDLQWVWRVXSSRUWHQWHUSULVHJUDGH GHSOR\PHQW2SHQ6DQGER[KDVHDUQHGWKH6LOYHU OHYHO2SHQ66)%HVW3UDFWLFHV%DGJH $WWKHWK&KLQD$,&RPSHWLWLRQ ɹɽLEDEDZDVDZDUGHG *UDGH$FHUWLŀFDWHV LQWKUHHDUHDVUHODWHGWR $,JHQHUDWHGFRQWHQW$,*& $,*&DXGLRGHWHFWLRQ $,*&YLGHRGHWHFWLRQDQG $,*&LGHQWLŀHUH[WUDFWLRQDQGWUDFHDELOLW\ FDVHV 2SHQ66)LVDVHFXULW\IRXQGDWLRQHVWDEOLVKHGE\WKH/LQX[)RXQGDWLRQWKHZRUOG VODUJHVWRSHQVRXUFHWHFKRUJDQL]DWLRQ,WV%HVW3UDFWLFHV%DGJH3URJUDPZKLFKDVVHVVHVWKHVHFXULW\DQGJRYHUQDQFHPDWXULW\RISURMHFWVRłHUVFHUWLŀFDWLRQDWWKUHHOHYHOV3DVVLQJ6LOYHUDQG*ROG ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 122 ↗

Slide 123 — %XLOGLQJFRQVHQVXVIRU

(QKDQFLQJWHFKQRORJ\HWKLFV 0DLQWDLQLQJ%XVLQHVV,QWHJULW\ %XLOGLQJFRQVHQVXVIRU FRPPRQGHYHORSPHQW $,JRYHUQDQFHLVDQFKRUHGLQWHFKQLFDO FDSDELOLWLHVDQGLQVWLWXWLRQDOIUDPHZRUNV,W QHHGVWREHVXSSRUWHGE\RUJDQL]DWLRQDOFXOWXUH DQGHFRV\VWHPFROODERUDWLRQ$WɹɽLEDEDZH PDNHFRQVLVWHQWHłRUWVWRIRVWHUDFXOWXUHRI WHFKQRORJ\HWKLFV7RVKDUHEHVWSUDFWLFHVDFURVV WKHLQGXVWU\ZHDFWLYHO\SDUWLFLSDWHLQVWDQGDUG VHWWLQJDQGDFDGHPLFSDUWQHUVKLSV &XOWXUHEXLOGLQJ 8SKROGLQJDKXPDQFHQWULFWHFKYLVLRQZHDUHFRPPLWWHGWR EXLOGLQJDFXOWXUHRIWHFKQRORJ\HWKLFV,QWHUQDOO\ZHHPEHG UHVSRQVLEOH$,SULQFLSOHVLQWRWKHSURIHVVLRQDOFRPSHWHQFLHV RIRXUHPSOR\HHVHQVXULQJFRPSOLDQFHLQWKHGHYHORSPHQW DQGGHSOR\PHQWRIWHFKQRORJLHV([WHUQDOO\ZHKHOSWKH SXEOLFXQGHUVWDQGUHVSRQVLEOH$,YLDHGXFDWLRQDORXWUHDFK DQGDFDGHPLFGLDORJXH :HRł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ŀHVFRPSOH[WHFKQLFDO FRQFHSWVYLDH[SHUWOLYHVWUHDPVELWHVL]HGHGXFDWLRQDO YLGHRVDQGLQVLJKWIXODUWLFOHV$VRI0DUFKLW KDGKRVWHGDFXPXODWLYHWRWDORIOLYHVWUHDPVZKLFK DPDVVHGRYHURQHPLOOLRQYLHZV7KLVLQLWLDWLYHHłHFWLYHO\ ORZHUVWKHEDUULHUWRXQGHUVWDQGLQJWHFKQRORJLHVDQG KHOSVIRVWHUDVRFLHW\ZLGHFRQVHQVXVRQUHVSRQVLEOH$, $,&KDVHU 0XOWLVWDNHKROGHUFRFUHDWLRQ 8QGHUWKHSULQFLSOHRIFROODERUDWLYHJRYHUQDQFH ZHGHHSO\HQJDJHLQWKHGHYHORSPHQWRI IURQWLHUVWDQGDUGVDQGSOD\DQDFWLYHUROHLQ DFDGHPLFUHVHDUFK%\WUDQVODWLQJRXUWHFKQLFDO SUDFWLFHVLQWRDIRXQGDWLRQIRULQGXVWU\ZLGH FRPSOLDQFHZHFRQWULEXWHWRWKHFRQVWUXFWLRQ RIDQRSHQ$,HFRV\VWHP *%&\EHUVHFXULW\7HFKQRORJ\/DEHOLQJ 0HWKRGIRU&RQWHQW*HQHUDWHGE\$UWLŀFLDO,QWHOOLJHQFH *%7&\EHUVHFXULW\7HFKQRORJ\%DVLF6HFXULW\ 5HTXLUHPHQWVIRU*HQHUDWLYH$UWLŀFLDO,QWHOOLJHQFH6HUYLFH *%7&\EHUVHFXULW\7HFKQRORJ\ ,PSOHPHQWDWLRQ*XLGHOLQHRI'LJLWDO:DWHUPDUNLQJ 7HFKQRORJ\ 7&3*$&\EHUVHFXULW\6WDQGDUG3UDFWLFH *XLGHOLQHV'HWHFWLRQRI&RQWHQW*HQHUDWHGE\$UWLŀFLDO ,QWHOOLJHQFH3DUW)UDPHZRUN (QJDJLQJLQDQGOHDGLQJWKHGHY HORSPHQWRI IURQWLHUVWDQGDUGVDQGJXLGHOLQHV Ȱ :HKDYHSDUWQHUHGZLWK7VLQJKXD8QLYHUVLW\WRFRQGXFW MRLQWUHVHDUFKRQDJHQWVDQGPXOWLPRGDOVDIHW\VRWKDW ZHFDQEXLOGDIXOOVWDFNVDIHW\IUDPHZRUNWKDWVSDQV IURPXQGHUO\LQJPRGHOVWRWKHDSSOLFDWLRQOD\HU Ȱ :HKDYHSDUWQHUHGZLWK=KHMLDQJ8QLYHUVLW\WR ODXQFKDMRLQWODERUDWRU\IRU$,VDIHW\DLPLQJWRGULYH WHFKQRORJLFDOEUHDNWKURXJKVDQGLQQRYDWLRQVLQWKLVŀHOG ZLWKKLJKHUTXDOLW\DQGHŃFLHQF\ Ȱ :HKDYHZRUNHGZLWKWKH6KDQJKDL$,/DERUDWRU\WR FRGUDIW$,JRYHUQDQFHVWDQGDUGVDQGFRQWULEXWHEHVW SUDFWLFHVLQPRGHOHYDOXDWLRQDQGGDWDFOHDQVLQJ7KLV GULYHVWKHWUDQVLWLRQIURPVLQJOHSRLQWWHFKQLFDOGHIHQVHV WRV\VWHPLFHFRV\VWHPJRYHUQDQFH &ROODERUDWLRQRQIURQWLHUWHFKQRORJLHV ɹɽLEDED&ORXGDQG'LQJ7DON KDYHDFKLHYHGWKH ,62 $,0DQDJHPHQW 6\VWHPFHUWLŀFDWLRQ 4ZHQODUJHPRGHOVZHUHDPRQJWKH ILUVWWRDFKLHYH FRPSOLDQFH FHUWLŀFDWLRQXQGHU QDWLRQDOVWDQGDUG ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV 6RFLDO

Open the original at slide 123 ↗

Slide 124 — $SSHQGL[(6*.H\3HUIRUPDQFH0HWULFV7DEOH

(QYLURQPHQW 8QLW <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK 7RWDO*+*HPLVVLRQV6FRSHVDQG 0W&2H 6FRSHHPLVVLRQV 0W&2H 6FRSHHPLVVLRQV 0W&2H PDUNHWEDVHG 0W&2H ORFDWLRQEDVHG 0W&2H 6FRSHHPLVVLRQV 0W&2H &DUERQRłVHWV 0W&2H 6FRSHFDUERQRłVHWV 0W&2H 6FRSHFDUERQRłVHWV 0W&2H 6FRSHFDUERQRłVHWV 0W&2H 1HW*+*HPLVVLRQVDIWHUDSSO\LQJRłVHWV6FRSHVDQG 0W&2H 6FRSHQHWHPLVVLRQV 0W&2H 6FRSHQHWHPLVVLRQV 0W&2H 6FRSHQHWHPLVVLRQV 0W&2H *+*HPLVVLRQVLQWHQVLW\DI WHUDSSO\LQJRłVHWV *+*HPLVVLRQVSHUXQLWRIUHYHQXHLQ6FRSHVDQG 0W&2HPLOOLRQ50%RIUHYHQXH 6FRSHHPLVVLRQVLQWHQVLW\ 0W&2HPLOOLRQ50%RIUHYHQXH 6FRSHHPLVVLRQVLQWHQVLW\ 0W&2HPLOOLRQ50%RIUHYHQXH 6FRSHHPLVVLRQVLQWHQVLW\ 0W&2HPLOOLRQ50%RIUHYHQXH $SSHQGL[(6*.H\3HUIRUPDQFH0HWULFV7DEOH :HDSSO\WKHSULQFLSOHRIRSHUDWLRQDOFRQWUROWRGHŀQHWKHERXQGDULHVRIWKLVJUHHQKRXVHJDVLQYHQWRU\,WFRYHUVWKRVHJUHHQKRXVHJDVHPLVVLRQVFDWHJRULHVLQ6FRSHVDQGWKDWDUHERWKVLJQLŀFDQWIRUɹɽLEDEDLQWKHŀVFDO\HDUHQGHG0DUFK)<DQGPHDVXUDEOH7KHJUHHQKRXVHJDVFDWHJRULHVFRYHUHGLQWKLVLQYHQWRU\LQFOXGHFDUERQGLR[LGH&2 PHWKDQH&+QLWURXVR[LGH12K\GURŁXRURFDUERQV+)&VSHUŁXRURFDUERQV3)&VQLWURJHQWULŁXRULGH1)DQGVXOIXUKH[DŁXRULGH6),QWKHUHVXOWVRIWKHLQYHQWRU\ŀ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ŀVFDO\HDU*LYHQWKHDYDLODELOLW\RIGDWDWKLVDGMXVWPHQWRQO\FRYHUHG)<GDWDRQHPLVVLRQVHQHUJ\DQGSDFNDJLQJPDWHULDOV+LVWRULFDOGDWDSULRUWRWKLVSHULRGZDVQRWDGMXVWHG)XUWKHUPRUHLQDFFRUGDQFHZLWKWKHSULQFLSOHVRIUHSRUWLQJVFRSH FRPSDUDELOLW\GDWD VSXEOLFDYDLODELOLW\DQGPDWHULDOLW\ZHGHŀQHGWKHUHYHQXHEDVHIRUFDOFXODWLQJHFRQRPLFLQWHQVLW\GDWDUHODWHGWRHQYLURQPHQWDOPHWULFVIRU)<DVWKH)<UHYHQXHRIɹɽLEDED*URXSPLQXVDQHVWLPDWHGUHYHQXHDPRXQWRI6XQ$UWIRUPRQWKVRI)<H[FOXGLQJWKH)<UHYHQXHRIWKHDIRUHPHQWLRQHGORJLVWLFVEXVLQHVV (PLVVLRQVIRUWKHVHPHWULFVDUHFDOFXODWHGXVLQJWKHPDUNHWEDVHGPHWKRG 1HWHPLVVLRQVDUHWKHGLłHUHQFHEHWZHHQHPLVVLRQVDQGFDUERQRłVHWV7KLVFDOFXODWLRQPHWKRGDSSOLHVWR6FRSHHPLVVLRQV6FRSHHPLVVLRQVPDUNHWEDVHGDQG6FRSHHPLVVLRQVPDUNHWEDVHG ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 124 ↗

Slide 125 — (QYLURQPHQW

(QYLURQPHQW 8QLW <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK 7RWDO*+*HPLVVLRQVUHGXFWLRQ 0W&2H 6FRSHHPLVVLRQVUHGXFWLRQ 0W&2H 6FRSHHPLVVLRQVUHGXFWLRQ 0W&2H 6FRSHHPLVVLRQVUHGXFWLRQ 0W&2H 6FRSHDYRLGHGHPLVVLRQV 0W&2H 7RWDOHQHUJ\FRQVXPSWLRQ 0:K 'LUHFWHQHUJ\FRQVXPSWLRQ 0:K 'LUHFWHQHUJ\FRQVXPSWLRQLQWHQVLW\GLUHFWHQHUJ\FRQVXPSWLRQSHUXQLWRIUHYHQXH 0:KPLOOLRQ50%RIUHYHQXH 1DWXUDOJDV 7KRXVDQGPu /LTXHŀHGSHWUROHXPJDV 7RQ 'LHVHO 7RQ *DVROLQH 7RQ ,QGLUHFWHQHUJ\FRQVXPSWLRQSXU FKDVHGHOHFWULFLW\ 0:K ,QGLUHFWHQHUJ\FRQVXPSWLRQLQWHQVLW\SXUFKDVHGHOHFWULFLW\LQGLUHFWHQHUJ\FRQVXPSWLRQSHU XQLWRIUHYHQXH 0:KPLOOLRQ50%RIUHYHQXH 3HUFHQWDJHRIFOHDQHOHFWULFLW\ ,QGLUHFWHQHUJ\FRQVXPSWLRQSXU FKDVHGKHDW 0:K ,QGLUHFWHQHUJ\FRQVXPSWLRQLQWHQVLW\SXUFKDVHGKHDWLQGLUHFWHQHUJ\FRQVXPSWLRQSHUXQLWRI UHYHQXH 0:KPLOOLRQ50%RIUHYHQXH 5HQHZDEOHHQHUJ\FRQVXPSWLRQ 0:K $YHUDJH38(RIVHOIEXLOWGDWDFHQWHUV $YHUDJH38(RIOHDVHGGDWDFHQWHUV ԉ ԉ ,Q)<ZHFRQGXFWHGDUHWURVSHFWLYHFDOFXODWLRQRIDYRLGHGHPLVVLRQVIRUSUHYLRXVŀVFDO\HDUVEDVHGRQWKHɹɽLEDEDЃ6FRSHЄ$YRLGHG(PLVVLRQV,PSOHPHQWDWLRQ*XLGHOLQHV 38(LVWKHUDWLRRIDGDWDFHQWHU VWRWDOHQHUJ\FRQVXPSWLRQWRWKHHQHUJ\FRQVXPSWLRQRILWV,7HTXLSPHQW ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 125 ↗

Slide 126 — (QYLURQPHQW

(QYLURQPHQW 8QLW <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK 3DFNDJLQJ 7RWDOTXDQWLW\RISDFNDJLQJ 7RQ 3DFNDJLQJLQWHQVLW\ 7RQPLOOLRQ50%RIUHYHQXH :DWHUUHVRXUFHV ԉ ԉ ԉ 7RWDOZDWHUFRQVXPSWLRQ Pu 7RWDOZDWHUFRQVXPSWLRQLQWHQVLW\ PuPLOOLRQ50%RIUHYHQXH :DVWH ԉ ԉ ԉ 7RWDOTXDQWLW\RIQRQKD]DUGRXVZDVWH 7RQ 1RQKD]DUGRXVZDVWHLQWHQVLW\ 7RQPLOOLRQ50%RIUHYHQXH 7RWDOTXDQWLW\RIKD]DUGRXVZDVWH 7RQ +D]DUGRXVZDVWHLQWHQVLW\ 7RQPLOOLRQ50%RIUHYHQXH ,Q)<ZHHQKDQFHGGDWDJRYHUQDQFHDQGPDQDJHPHQWZKLFKOHGWRPRUHFRPSOHWHGDWDDERXWZDVWHIRUDIHZEXVLQHVVHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 126 ↗

Slide 127 — 6RFLDO

6RFLDO 8QLW <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK (PSOR\PHQWȨ(PSOR\HHQXPEHUV 7RWDOQXPEHURIHPSOR\HHV 3HRSOH 3HUFHQWDJHVRIHPSOR\HHVE\JHQGHU 0DOH )HPDOH 3HUFHQWDJHVRIHPSOR\HHVE\DJH ! 3HUFHQWDJHVRIHPSOR\HHVE\ZRUNORFDWLRQ &KLQHVHPDLQODQG +RQJ.RQJ0DFDRDQG7DLZDQ 2WKHUFRXQWULHVDQGUHJLRQV 1XPEHURIHPSOR\HHVZLWKSK\VLFDOGLVDELOLWLHV 3HRSOH 3HUFHQWDJHRIZRPHQLQPDQDJHPHQW ԉ ԉ ԉ ԉ ԉ 0DQDJHPHQW 6HQLRUPDQDJHPHQW 7KHVFRSHRIHPSOR\HHGDWDLQFOXGHVWKHIXOOWLPHHPSOR\HHVRIDOOFRQVROLGDWHGHQWLWLHVRIɹɽLEDED*URXS,Q)<WKHGLYHVWLWXUHRI6XQ$UWZDVFRPSOHWHGDQGWKHGLYHVWLWXUHRI,QWLPHZDVPRVWO\FRPSOHWHG:HDOVRUHWURVSHFWLYHO\DGMXVWHGWKHKLVWRULFDOGDWDUHPRYLQJWKHGDWDIRU6XQ$UWDQG,QWLPH 0DQDJHPHQWUHIHUVWRHPSOR\HHVZKRVXSHUYLVHDQGOHDGRWKHUIXOOWLPHHPSOR\HHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 127 ↗

Slide 128 — 6RFLDO

6RFLDO 8QLW <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK (PSOR\HHWXUQRYHU 7RWDOWXUQRYHUUDWH 3HUFHQWDJHVRIHPSOR\HHWXUQRYHUE\JHQGHU 0DOH )HPDOH 3HUFHQWDJHVRIHPSOR\HHWXUQRYHUE\DJH ! 3HUFHQWDJHVRIHPSOR\HHWXUQRYHUE\ZRUNORFDWLRQ &KLQHVHPDLQODQG +RQJ.RQJ0DFDRDQG7DLZDQ 2WKHUFRXQWULHVDQGUHJLRQV 7UDLQLQJDQGHGXFDWLRQ ԉ ԉ ԉ ԉ $YHUDJHKRXUVRIWUDLQLQJSHUHPSOR\HH +RXU $YHUDJHKRXUVRIWUDLQLQJSHUHPSOR\HHE\JHQGHU 0DOH +RXU )HPDOH +RXU $YHUDJHKRXUVRIWUDLQLQJSHUHPSOR\HHE\OHYHO 0DQDJHPHQW +RXU 1RQPDQDJHPHQW +RXU 7KHVFRSHRIVWDWLVWLFVRQHPSOR\HHWUDLQLQJKHDOWKDQGVDIHW\LQFOXGHVDOOIXOOWLPHHPSOR\HHVLQWKHEXVLQHVVJURXSVDQGFRPSDQLHVGLUHFWO\PDQDJHGE\ɹɽLEDED*URXS(PSOR\HHWUDLQLQJUHIHUVWRSURIHVVLRQDOWUDLQLQJFRXUVHVOHFWXUHVDQGRWKHUHGXFDWLRQDODFWLYLWLHVWKDWHPSOR\HHVSDUWLFLSDWHLQYLDRXUOHDUQLQJSODWIRUPV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 128 ↗

Slide 129 — 6RFLDO

6RFLDO 8QLW <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK <HDUHQGHG 0DUFK 3HUFHQWDJHRIHPSOR\HHVWUDLQHG 3HUFHQWDJHVRIHPSOR\HHVWUDLQHGE\JHQGHU 0DOH )HPDOH 3HUFHQWDJHVRIHPSOR\HHVWUDLQHGE\OHYHO 0DQDJHPHQW 1RQPDQDJHPHQW (PSOR\HHKHDOWKDQGVDIHW\ ԉ ԉ ԉ ԉ 1XPEHURIZRUNUHODWHGIDWDOLWLHV 3HRSOH :RUNUHODWHGIDWDOLW\UDWH 1XPEHURIZRUNUHODWHGLQMXULHV 3HRSOH 1XPEHURIZRUNGD\VORVWGXHWRZRUNUHODWHGLQMXULHV 'D\ :RUNUHODWHGLQMXU\UDWH 1XPEHURIZRUNUHODWHGLQMXULHVPLOOLRQ ZRUNLQJKRXUV 1XPEHURIVXSSOLHUV &KLQHVHPDLQODQG [ 2WKHUFRXQWULHVDQGUHJLRQV [ 7KHGDWDDERXWZRUNUHODWHGLQMXULHVDQGIDWDOLWLHVDPRQJHPSOR\HHVLVEDVHGRQUHFRUGVPDLQWDLQHGE\WKHKXPDQUHVRXUFHVWHDPDQGYHULŀHGE\ORFDODXWKRULWLHV :RUNUHODWHGIDWDOLW\UDWH 1XPEHURIZRUNUHODWHGIDWDOLWLHV7RWDOQXPEHURIHPSOR\HHV :RUNUHODWHGLQMXU\UDWH 1XPEHURIZRUNUHODWHGLQMXULHV7RWDOQXPEHURIZRUNLQJKRXUV 6XSSOLHUVUHIHUWRWKRVHWKDWPDLQWDLQHGDFWLYHEXVLQHVVUHODWLRQVKLSVZLWKRXUPDMRUEXVLQHVVHVLQ)<5HJLRQDOLQIRUPDWLRQIRUVXSSOLHUVLVEDVHGRQWKHLUUHJLVWHUHGORFDWLRQVUDWKHUWKDQORFDWLRQVZKHUHWKH\FRQGXFWRSHUDWLRQVIRUɹɽLEDED ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 129 ↗

Slide 130 — $SSHQGL[(6*'DWD9HULŀFDWLRQ6WDWHPHQW

$SSHQGL[(6*'DWD9HULŀFDWLRQ6WDWHPHQW ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 130 ↗

Slide 131 —

ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 131 ↗

Slide 132 —

ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 132 ↗

Slide 133 —

ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 133 ↗

Slide 134 —

ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 134 ↗

Slide 135 — $SSHQGL[UHHQKRXVHDV,QYHQWRU\DQG$FFRXQWLQJ%RXQGDULHV

6FRSH (PLVVLRQVFDWHJRULHV (PLVVLRQVVRXUFHV 6FRSH 'LUHFWHPLVVLRQVIURP FRPSDQ\RZQHGDQG FRQWUROOHGUHVRXUFHV 6WDWLRQDU\(PLVVLRQV (PLVVLRQVIURPWKHXVHRIQDWXUDOJDVDQGOLTXHŀHGSHWUROHXPJDVLQ ERLOHUVDQGFRRNZDUHDQGWKHXVHRIGLHVHOLQGLHVHOJHQHUDWRUV 0RELOH(PLVVLRQV (PLVVLRQVIURPWKHXVHRIIXHOVVXFKDVGLHVHODQGJDVROLQHLQVHOI RZQHGYHKLFOHV )XJLWLYH(PLVVLRQV (PLVVLRQVIURPOHDNLQJŀ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ɹɽLEDED*URXSLQ)< ZLWKLQWKHRUJDQL]DWLRQDODQGUHSRUWLQJERXQGDULHV7KH W\SHVRIJUHHQKRXVHJDVHVLQYROYHGLQWKLVLQYHQWRU\ LQFOXGHFDUERQGLR[LGH&2PHWKDQH&+QLWURXV R[LGH12K\GURŁXRURFDUERQV+)&VSHUŁXRURFDUERQV 3)&VQLWURJHQWULŁXRULGH1)DQGVXOIXUKH[DŁXRULGH 6)7KURXJKWKHLQYHQWRU\ŀYHW\SHVRIJUHHQKRXVH JDVHPLVVLRQVLQFOXGLQJ&212&++)&VDQG6)DUH LQYROYHGGXULQJWKHUHSRUWLQJSHULRG ,QDFFRUGDQFHZLWK,626SHFLŀFDWLRQ:LWK *XLGDQFHDWWKH2UJDQL]DWLRQ/HYHOIRU4XDQWLŀFDWLRQ DQG5HSRUWLQJRI*UHHQKRXVH*DV(PLVVLRQVDQG 5HPRYDOV*UHHQKRXVH*DV3URWRFRO&RUSRUDWH $FFRXQWLQJDQG5HSRUWLQJ6WDQGDUG*UHHQKRXVH*DV 3URWRFRO&RUSRUDWH9DOXH&KDLQ6FRSH$FFRXQWLQJ DQG5HSRUWLQJ6WDQGDUG,626SHFLŀFDWLRQ ZLWK*XLGDQFHIRUWKH9HULŀFDWLRQDQG9DOLGDWLRQRI *UHHQKRXVH*DV6WDWHPHQWVDQGRWKHUDSSOLFDEOHODZV UHJXODWLRQVDQGVWDQGDUGVZHFRQGXFWHGDQLQYHQWRU\ RIɹɽLEDED VJUHHQKRXVHJDVHPLVVLRQVDQGUHPRYDOV GXULQJWKHLQYHQWRU\SHULRG)<*UHHQKRXVH JDVHPLVVLRQDFWLYLW\GDWDVWULFWO\PHHWWKHTXDOLW\ UHTXLUHPHQWVRIUHOHYDQWSULPDU\DQGVHFRQGDU\DFWLYLW\ GDWD7KHHPLVVLRQIDFWRUVFRPHIURPWKH,3&& *XLGHOLQHVIRU1DWLRQDO*UHHQKRXVH*DV,QYHQWRULHV SXEOLVKHGE\WKH,QWHUJRYHUQPHQWDO3DQHORQ&OLPDWH &KDQJH,3&&LQDQGWKH5HŀQHPHQWWRWKH ,3&&*XLGHOLQHVIRU1DWLRQDO*UHHQKRXVH*DV ,QYHQWRULHVSXEOLVKHGLQWKH&KLQD(QHUJ\ 6WDWLVWLFDO<HDUERRNDQGRWKHUDXWKRULWDWLYHUHIHUHQFHV $OOSURFHVVHVIROORZ&(& VLQWHUQDOJUHHQKRXVHJDV HPLVVLRQLQYHQWRU\TXDOLW\FRQWUROSURFHGXUHVDQGVWULFWO\ PHHWWKHUHTXLUHPHQWVRIWKH,62VWDQGDUG 7KHLQYHQWRU\LVEDVHGRQ,62,3&& JXLGHOLQHVDQGRWKHUDSSOLFDEOHODZVDQG UHJXODWLRQV7KHGHWDLOVDUHVKRZQEHORZ Ȱ ,626SHFLŀFDWLRQZLWK*XLGDQFH DWWKH2UJDQL]DWLRQ/HYHOIRU4XDQWLŀFDWLRQDQG 5HSRUWLQJRI*UHHQKRXVH*DV(PLVVLRQVDQG 5HPRYDOV Ȱ ,626SHFLŀFDWLRQZLWK *XLGDQFHIRUWKH9HULŀFDWLRQDQG9DOLGDWLRQRI *UHHQKRXVH*DV6WDWHPHQWV Ȱ *XLGHOLQHVIRU$FFRXQWLQJDQG5HSRUWLQJ *UHHQKRXVH*DV(PLVVLRQV&KLQD3XEOLF %XLOGLQJ2SHUDWLRQ8QLWV(QWHUSULVHV7ULDO Ȱ *UHHQKRXVH*DV3URWRFRO&RUSRUDWH$FFRXQWLQJ DQG5HSRUWLQJ6WDQGDUG5HYLVHG(GLWLRQ Ȱ *UHHQKRXVH*DV3URWRFRO&RUSRUDWH9DOXH &KDLQ6FRSH$FFRXQWLQJDQG5HSRUWLQJ 6WDQGDUG Ȱ ,3&&*XLGHOLQHVIRU1DWLRQDO*UHHQKRXVH *DV,QYHQWRULHV Ȱ 5HŀQHPHQWWRWKH,3&&*XLGHOLQHVIRU 1DWLRQDO*UHHQKRXVH*DV,QYHQWRULHV Ȱ 2WKHUDSSOLFDEOHODZVUHJXODWLRQVDQGUHODWHG VWDQGDUGV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 135 ↗

Slide 136 — $SSHQGL[6WDNHKROGHU(QJDJHPHQWDQG0DWHULDOLW\$VVHVVPHQW

6WDNHKROGHUJURXSV &RPPXQLFDWLRQFKDQQHOV &RQVXPHUV 2ŃFLDOVRFLDOPHGLDLQWHUDFWLRQVFXVWRPHUVHUYLFHKRWOLQHVRQOLQHDQGRńLQHFRQVXPHUVXUYH\V 0HUFKDQWVDQGFXVWRPHUV &XVWRPHUVHUYLFHKRWOLQHVFRPPXQLFDWLRQDWWKHPHUFKDQWEDFNHQGWDUJHWHGVXUYH\VPHUFKDQW FRQIHUHQFHVDQGLQGXVWU\VXPPLWV (PSOR\HHV (PDLOVWRDOOVWDł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ŃFLDOVRFLDOPHGLDLQWHUDFWLRQVQRQ SURŀWVHFWRUIRUXPVDQGHYHQWVYROXQWHHUDFWLYLWLHV $SSHQGL[6WDNHKROGHU(QJDJHPHQWDQG0DWHULDOLW\$VVHVVPHQW ɹɽLEDEDDFWLYHO\HQJDJHVVWDNHKROGHUV:HIXOO\UHFRJQL]HWKHH[WHQVLYHLQWHUFRQQHFWLRQVDPRQJRXURSHUDWLRQVWKHSODWIRUPHFRV\VWHP DQGVWDNHKROGHUV([DPSOHVRIRXUNH\VWDNHKROGHUVLQFOXGHFRQVXPHUVHPSOR\HHVVKDUHKROGHUVLQYHVWRUVJRYHUQPHQWVDQGUHJXODWRU\ DXWKRULWLHVDVZHOODVEXVLQHVVSDUWQHUVDQGFRPPXQLWLHVWKURXJKRXWWKHYDOXHFKDLQDQGZLWKLQWKHSODWIRUPHFRV\VWHP :HOHYHUDJHGLYHUVHFRPPXQLFDWLRQFKDQQHOVDQGPHWKRGVWRSURPSWO\DGGUHVVWKHFRQFHUQVDQGH[SHFWDWLRQVRIYDULRXVVWDNHKROGHUV FRQWLQXRXVO\RSWLPL]LQJRXUEXVLQHVVRSHUDWLRQVDQG(6*SUDFWLFHV7KURXJKHł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ŀHGPDWHULDOLVVXHVE\LQFRUSRUDWLQJ PDLQVWUHDPUDWLQJPHWULFVDQGLQGXVWU\EHQFKPDUNLQJDQDO\VHV 0DWHULDOLVVXHVLGHQWLŀ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ŀQLQJRXUIRFXVDUHDVDQGSULRULWLHVIRU(6* 3ULRULW\PDWUL[IRUPDWHULDOLVVXHV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 136 ↗

Slide 137 — 0DWHULDOLW\WR6RFLHW\(FRQRP\DQG(QYLURQPHQW

&OLPDWHFKDQJHDQG FDUERQQHXWUDOLW\ (QHUJ\PDQDJHPHQW 5HVRXUFHFLUFXODULW\DQG ZDVWHPDQDJHPHQW :DWHUPDQDJHPHQWDQG XWLOL]DWLRQ %LRGLYHUVLW\DQG HFRV\VWHPV 0DWHULDOLW\WR6RFLHW\(FRQRP\DQG(QYLURQPHQW 0DWHULDOLW\WRɹɽ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ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 137 ↗

Slide 138 — $SSHQGL[&OLPDWH6FHQDULR'HVFULSWLRQV

3K\VLFDOULVNV 7UDQVLWLRQULVNVDQGRSSRUWXQLWLHV 7LPHKRUL]RQ 6KRUWWHUPVWKURXJK)< 0HGLXPWHUPVWKURXJK)< /RQJWHUPVWKURXJK 'DWDEDVHVHOHFWLRQ ,3&&6L[WK$VVHVVPHQW5HSRUW$56KDUHG6RFLRHFRQRPLF3DWKZD\V663 ,QWHUQDWLRQDO(QHUJ\$JHQF\,($ 6FHQDULRVHOHFWLRQ 663 663 6WDWHG3ROLFLHV6FHQDULR67(36 1HW=HUR(PLVVLRQV6FHQDULR1=( 5LVNV2SSRUWXQLWLHV $FXWH Ȱ ([WUHPHKHDW Ȱ ([WUHPHFROG Ȱ )ORRGVLQFOXGLQJULYHULQHŁRRGVKHDY\UDLQŁRRGVDQGFRDVWDOŁRRGV Ȱ 7URSLFDOF\FORQHV Ȱ 3UHFLSLWDWLRQLQGXFHGODQGVOLGHV Ȱ :LOGŀUHV &KURQLF Ȱ :DWHUVWUHVVDQGGURXJKWV 7UDQVLWLRQULVNV Ȱ 3ROLF\DQGOHJDO Ȱ 7HFKQRORJ\ Ȱ 0DUNHW Ȱ 5HSXWDWLRQ 7UDQVLWLRQRSSRUWXQLWLHV Ȱ 5HVRXUFHHŃFLHQF\ Ȱ (QHUJ\VRXUFHV Ȱ 3URGXFWVDQGVHUYLFHV Ȱ 0DUNHW $SSHQGL[&OLPDWH6FHQDULR'HVFULSWLRQV 3K\VLFDOULVNDVVHVVPHQWVIROORZ:RUOG0HWHRURORJLFDO2UJDQL]DWLRQ:02VWDQGDUGVXVLQJGDWDIRUWKH%DVHOLQHFRYHULQJȨFRYHULQJȨDQGFRYHULQJȨWUDQVLWLRQULVNDQGRSSRUWXQLW\DVVHVVPHQWVXVHVFHQDULRGDWDDWŀYH\HDULQWHUYDOVIURPWR 7KHVKRUWWHUPUHIHUVWRWKHSHULRGWKURXJKWKHHQGRIWKHFXUUHQWŀVFDO\HDUSULPDULO\DOLJQHGZLWKɹɽLEDED VDQQXDORSHUDWLQJSODQEXGJHWPDQDJHPHQWDVVHVVPHQWDQGGLVFORVXUHF\FOHV7KHPHGLXPWHUPVUHIHUVWRWKHSHULRGWKURXJK)<SULPDULO\FRYHULQJNH\PLOHVWRQHVDURXQGϿLQFOXGLQJFOLPDWHSROLFLHVHQHUJ\WUDQVLWLRQWHFKQRORJLFDOGHYHORSPHQW PDUNHWGHPDQGDQGɹɽLEDED VPHGLXPWHUPSODQQLQJDQG6FRSHDQG&DUERQQHXWUDOLW\WDUJHWV7KHORQJWHUPUHIHUVWRWKHSHULRGWKURXJKSULPDULO\XVHGWRDVVHVVWKHVWUXFWXUDOLPSDFWVRIORQJWHUPORZFDUERQWUDQVLWLRQQHW]HURSDWKZD\VDQGWKHHYROXWLRQRIFOLPDWHUHODWHGSK\VLFDOULVNV:HZLOOFRQWLQXHWRUHYLHZWKHUHOHYDQWWLPHKRUL]RQVDQGDVVHVVPHQW MXGJPHQWVLQOLJKWRIWKHH[WHUQDOHQYLURQPHQWUHJXODWRU\UHTXLUHPHQWVEXVLQHVVGHYHORSPHQWVDQGGDWDDYDLODELOLW\ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 138 ↗

Slide 139 — $SSHQGL[3URJUHVVRQWKH8QLWHG1DWLRQV*OREDO&RPSDFW

)LHOG 3ULQFLSOHV &RUUHVSRQGLQJFKDSWHUV +XPDQULJKWV 3ULQFLSOH%XVLQHVVHVVKRXOGVXSSRUWDQGUHVSHFWWKHSURWHFWLRQRI LQWHUQDWLRQDOO\SURFODLPHGKXPDQULJKWV 6XSSRUWLQJ2XU3HRSOH'LYHUVLW\HTXLW\DQGLQFOXVLRQ 3ULQFLSOH0DNHVXUHWKDWWKH\DUHQRWFRPSOLFLWLQKXPDQULJKWVDEXVHV /DERU 3ULQFLSOH%XVLQHVVHVVKRXOGXSKROGWKHIUHHGRPRIDVVRFLDWLRQDQGWKH HłHFWLYHUHFRJQLWLRQRIWKHULJKWWRFROOHFWLYHEDUJDLQLQJ 6XSSRUWLQJ2XU3HRSOH'LYHUVLW\HTXLW\DQGLQFOXVLRQ 3ULQFLSOH(OLPLQDWHDOOIRUPVRIIRUFHGDQGFRPSXOVRU\ODERU 3ULQFLSOH7KHHłHFWLYHDEROLWLRQRIFKLOGODERU 3ULQFLSOH(OLPLQDWHGLVFULPLQDWLRQLQUHVSHFWRIHPSOR\PHQWDQG RFFXSDWLRQ (QYLURQPHQW 3ULQFLSOH%XVLQHVVHVVKRXOGVXSSRUWDSUHFDXWLRQDU\DSSURDFKWR HQYLURQPHQWDOFKDOOHQJHV 3URWHFWLQJWKH(QYLURQPHQW 3ULQFLSOH8QGHUWDNHLQLWLDWLYHVWRSURPRWHJUHDWHUHQYLURQPHQWDO UHVSRQVLELOLW\ 3ULQFLSOH(QFRXUDJHWKHGHYHORSPHQWDQGGLłXVLRQRIHQYLURQPHQWDOO\ IULHQGO\WHFKQRORJLHV $QWLFRUUXSWLRQ 3ULQFLSOH%XVLQHVVHVVKRXOGZRUNDJDLQVWFRUUXSWLRQLQDOOLWVIRUPV LQFOXGLQJH[WRUWLRQDQGEULEHU\ 0DLQWDLQLQJ%XVLQHVV,QWHJULW\2EVHUYLQJEXVLQHVV HWKLFV $SSHQGL[3URJUHVVRQWKH8QLWHG1DWLRQV*OREDO&RPSDFW ɹɽLEDEDEHFDPHDVLJQDWRU\WRWKH8QLWHG1DWLRQV*OREDO&RPSDFW 81*&LQ)HEUXDU\2XU&(2(GGLH:XKHUHE\UHLWHUDWHVRXU VXSSRUWIRUWKH81*&DQGLWVWHQSULQFLSOHV:HWDNHDUHVSRQVLEOH SULQFLSOHVEDVHGDQGLQWHJUDWHGDSSURDFKDVZHVWULYHWRDFKLHYH WKH81 VGHYHORSPHQWJRDOVFRQGXFWEXVLQHVVLQDUHVSRQVLEOH PDQQHUEHFRPHDVWURQJORQJWHUPSDUWQHURIWKH81DQGIXOŀOO RXUFRPPLWPHQWVWRVRFLHW\ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 139 ↗

Slide 140 — $SSHQGL[5HSRUW,QGLFDWRU,QGH[

5HSRUW,QGLFDWRU,QGH[ &KDSWHU +.(;(6*5HSRUWLQJ&RGH 6$6% *5, 6'*V &KDSWHU6WDQGDUGL]LQJ&RUSRUDWH*RYHUQDQFH 6SHFLDO3DJH 6WUDWHJLHVDQGDSSURDFKHV 5HVXOWVRIRXUDFWLRQV %RDUGJRYHUQDQFH *RYHUQDQFHVWUXFWXUH ' 5LVNPDQDJHPHQW (6*JRYHUQDQFH *RYHUQDQFHVWUXFWXUH ' $SSHQGL[5HSRUW,QGLFDWRU,QGH[ ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 140 ↗

Slide 141 — 5HSRUW,QGLFDWRU,QGH[

5HSRUW,QGLFDWRU,QGH[ &KDSWHU +.(;(6*5HSRUWLQJ&RGH 6$6% *5, 6'*V &KDSWHU3URWHFWLQJWKH(QYLURQPHQW 6SHFLDO3DJH *RDOVDQGSURJUHVV 5HVXOWVRIRXUDFWLRQV 6WUDWHJLHVDQGDSSURDFKHV $$'DLY''' ' &*(&D &*(&D $GGUHVVLQJFOLPDWHFKDQJH 'DL'DLL'DLLL'D LY'EL'ELL'D'E 'F'G'D'E' DL'DLL'DLLL''D 'E'DL'DLL'E 'F'D'E'D'E 'F &*(&D&*(&D $GYDQFLQJFDUERQQHXWUDOLW\ $$%'''D 'E'F' &*(&D&*(&D &RQVHUYLQJDQGUHVWRULQJQDWXUH $$$$$$$' &*(&D&*(&D ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 141 ↗

Slide 142 — 5HSRUW,QGLFDWRU,QGH[

5HSRUW,QGLFDWRU,QGH[ &KDSWHU +.(;(6*5HSRUWLQJ&RGH 6$6% *5, 6'*V &KDSWHU6XSSRUWLQJ2XU3HRSOH 6SHFLDO3DJH 5HVXOWVRIRXUDFWLRQV 6WUDWHJLHVDQGDSSURDFKHV 'LYHUVLW\HTXLW\DQGLQFOXVLRQ %%%% 7DOHQWDFTXLVLWLRQDQGUHWHQWLRQ %%% $EXQGDQWRSSRUWXQLWLHVIRUWDOHQW GHYHORSPHQW %% (PSOR\HHKHDOWKDQGYLWDOLW\ %% &KDSWHU3URYLGLQJ5HVSRQVLEOH3URGXFWVIRU&RQVXPHUV 6SHFLDO3DJH 5HVXOWVRIRXUDFWLRQV 6WUDWHJLHVDQGDSSURDFKHV &*(&$ &UHDWLQJDJRRGFRQVXPHUH[SHULHQFH %%%%% &*(&D&*(&% %XLOGLQJDQLQFOXVLYHKHDOWK\GLJLWDO OLIH ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 142 ↗

Slide 143 — 5HSRUW,QGLFDWRU,QGH[

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ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 143 ↗

Slide 144 — 5HSRUW,QGLFDWRU,QGH[

5HSRUW,QGLFDWRU,QGH[ &KDSWHU +.(;(6*5HSRUWLQJ&RGH 6$6% *5, 6'*V &KDSWHU0DLQWDLQLQJ%XVLQHVV,QWHJULW\ 6SHFLDO3DJH 5HVXOWVRIRXUDFWLRQV 6WUDWHJLHVDQGDSSURDFKHV % 2EVHUYLQJEXVLQHVVHWKLFV %%%% 6WUHQJWKHQLQJVXSSOLHUPDQDJHPHQW %%%% 'DWDVHFXULW\DQGSULYDF\SURWHFWLRQ %% &*(&D&*(&D&*(& D 6DIHJXDUGLQJF\EHUVHFXULW\ (QKDQFLQJWHFKQRORJ\HWKLFV $SSHQGLFHV $SSHQGL[(6*.H\3HUIRUPDQFH0HWULFV 7DEOH $$$$$%% %%%%%'D 'E'F'& &*(&D&*(&D&*(& D $SSHQGL[(6*'DWD9HULŀFDWLRQ 6WDWHPHQW $SSHQGL[*UHHQKRXVH*DV,QYHQWRU\ DQG$FFRXQWLQJ%RXQGDULHV 'D'EL'ELL'G $SSHQGL[6WDNHKROGHU(QJDJHPHQWDQG 0DWHULDOLW\$VVHVVPHQW $SSHQGL[&OLPDWH6FHQDULR'HVFULSWLRQV 'D'E'F'G'E ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 144 ↗

Slide 145 — $SSHQGL['HŀQLWLRQV

$SSHQGL['HŀQLWLRQV 'HŀQLWLRQVWKDWDSSO\WRWKH)<(6*5HSRUW 8QOHVVRWKHUZLVHLQGLFDWHGE\WKHFRQWH[WWKHVHWHUPVKDYHWKHIROORZLQJPHDQLQJVZKHQWKH\DUHXVHGLQWKLVUHSRUW +ROGLQJJURXSɹɽLEDED*URXS+ROGLQJ/LPLWHG ,QWKHŀVFDO\HDUWKLVŀVFDO\HDU)< (68LQFLGHQWV(PHUJHQF\6HUYLFH8QLW(68LQFLGHQWVLQFOXGH LQFLGHQWVZKHUHWKHFRPSDQ\VXłHUVKDUPRULVVXEMHFWWR WKUHDWVEHFDXVHRIIDFWRUVLQWKHH[WHUQDOHQYLURQPHQWDQG LQFLGHQWVZKHUHLQWHUQDORSHUDWLRQVDQGPDQDJHPHQWFDXVH VXEVWDQWLDOKDUPWRWKHFRPSDQ\RUOHDGWRDQH[WHUQDOQHJDWLYH LPSDFW 5FLUFXODUHFRQRP\UHGXFHUHXVHUHF\FOHUHQHZDEOHUHVRXUFH WUDQVLWLRQ5 (PLVVLRQVJUHHQKRXVHJDVHPLVVLRQV7KHW\SHVRIJUHHQKRXVH JDVHVLQFOXGHFDUERQGLR[LGH&2PHWKDQH&+QLWURXVR[LGH 12K\GURŁXRURFDUERQV+)&VSHUŁXRURFDUERQV3)&V QLWURJHQWULŁXRULGH1)VXOIXUKH[DŁXRULGH6)DQGPRUH (PLVVLRQVUHGXFWLRQUHGXFWLRQLQJUHHQKRXVHJDVHPLVVLRQV 7KHW\SHVRIJUHHQKRXVHJDVHVLQFOXGHFDUERQGLR[LGH&2 PHWKDQH&+QLWURXVR[LGH12K\GURŁXRURFDUERQV+)&V SHUŁXRURFDUERQV3)&VQLWURJHQWULŁXRULGH1)VXOIXU KH[DŁ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łVHWV 1HWHPLVVLRQVLQWHQVLW\RIWKHY DOXHFKDLQ7KHQHW HPLVVLRQVLQWHQVLW\LQWKHYDOXHFKDLQUHIHUVWRHPLVVLRQVSHU XQLWRIUHYHQXHDIWHUWKHQDWXUDOJUHHQKRXVHJDVHPLVVLRQV RIRXUXSVWUHDPDQGGRZQVWUHDPSDUWQHUVLQWKHYDOXHFKDLQ DUHORZHUHGYLDYDULRXVGHFDUERQL]DWLRQPHDVXUHVLQFOXGLQJ UHGXFWLRQUHPRYDOVDQGRłVHWV 38(WKHUDWLRRIDGDWDFHQWHU VWRWDOHQHUJ\FRQVXPSWLRQWR WKHHQHUJ\FRQVXPSWLRQRILWVFRPSXWLQJHTXLSPHQW :8(WKHUDWLRRIDGDWDFHQWHU VZDWHUFRQVXPSWLRQWRLWV HQHUJ\FRQVXPSWLRQ &DPSXV2XUFDPSXVHVLQFOXGHɹɽLEDED VVHOIXVHGRŃFH FDPSXVHVVHOIEXLOWRUOHDVHGOHDVHGRXWFDPSXVHVDQG VRRQ 2ŃFHFDPSXV2XURŃFHFDPSXVHVUHIHUWRFDPSXVHVXVHG IRUɹɽLEDED VRŃFHRSHUDWLRQVLQFOXGLQJERWKVHOIEXLOW RŃFHFDPSXVHVDQGOHDVHGRQHV /RZFDUERQZRUNSODFHSU DFWLFHVWXUQLQJRłOLJKWVLQ XQRFFXSLHGDUHDVSULQWLQJGRFXPHQWVRQERWKVLGHVRIWKH SDSHUWDNLQJWKHVWDLUVEULQJLQJSHUVRQDOFXSVWRZRUN VXSSRUWLQJWKH&OHDQ3ODWH,QLWLDWLYHUHF\FOLQJFDUGERDUG ER[HVDQGSODVWLFERWWOHVHWFORZFDUERQWUDYHORSWLQJ IRUWUDLQVRYHUDLUSODQHVFDUSRROLQJDQGWDNLQJHPSOR\HH VKXWWOHVDQGWKHVXEZD\ 5HFODLPHGZDWHU1RQSRWDEOHZDWHUGHULYHGIURP ZDVWHZDWHUWUHDWHGWRPHHWVSHFLŀFTXDOLW\VWDQGDUGV VXLWDEOHIRUGRPHVWLFPXQLFLSDODQGHQYLURQPHQWDO DSSOLFDWLRQVDPRQJRWKHUV 3DFNLQJDOJRULWKPDFRPSXWDWLRQDOPHWKRGWKDWVXJJHVWV WKHRSWLPDOW\SHVVL]HVDQGGHVLJQVRISDFNDJLQJER[HV IRUVSHFLŀFLWHPVDQGVKLSSLQJFRQGLWLRQVZLWKWKHJRDORI PLQLPL]LQJWKHXWLOL]DWLRQRISDFNDJLQJPDWHULDOVDQGRWKHU FRQVXPDEOHV 6,2&6KLSVLQ2ZQ&RQWDLQHUDSUDFWLFHZKHUHDVKLSSLQJ ODEHOLVDŃ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ł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ŀUVWDLGFHUWLŀFDWHVIURPDSURIHVVLRQDO RUJDQL]DWLRQVXFKDVWKH5HG&URVV6RFLHW\RI&KLQDRUWKH $PHULFDQ+HDUW$VVRFLDWLRQ$+$DUHFHUWLŀHGDV)LUVWDLG 5HVSRQGHUV )LYHVWDUVWRUH7RTXDOLI\IRUŀYHVWDUVWDWXVDVWRUHPXVW DFKLHYHD5HDO([SHULHQFH6FRUHRIDWOHDVWZKLOHDOVR HQVXULQJWKDWLWVVXEVFRUHVIRUSURGXFWTXDOLW\ORJLVWLFVVSHHG DQGVHUYLFHDVVXUDQFHDOOUHDFKRUDERYH $QQXDODFWLYHPHUFKDQWVPHUFKDQWVWKDWKDGVDOHVLQWKH ŀVFDO\HDURQWKH7DREDRRU7PDOOSODWIRUP$QQXDODFWLYH PHUFKDQWVWKDWKDGDJURVVPHUFKDQGLVHYROXPH*09RI OHVVWKDQ50%PLOOLRQLQWKHŀVFDO\HDUDUHGHŀQHGDVPLFUR VPDOODQGPHGLXPVL]HGPHUFKDQWV (PHUJHQF\ORJLVWLFV (PHUJHQF\ORJLVWLFVUHIHUVWRORJLVWLFV VHUYLFHVQHHGHGGXULQJQDWXUDOGLVDVWHUVRUSXEOLFKHDOWK HPHUJHQFLHVVXFKDVSDQGHPLFV ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 145 ↗

Slide 146 — $SSHQGL[,PSRUWDQW/HJDO,QIRUPDWLRQ

$SSHQGL[,PSRUWDQW/HJDO,QIRUPDWLRQ 7KLVUHSRUWFRQWDLQVIRUZDUGORRNLQJVWDWHPHQWV7KHVHVWDWHPHQWVDUHPDGHXQGHUWKHVDIHKDUERUSURYLVLRQXQGHU 6HFWLRQ(RIWKH86([FKDQJH$FWDQGDVGHŀQHGLQWKH3ULYDWH6HFXULWLHV/LWLJDWLRQ5HIRUP$FWRI)RUZDUG ORRNLQJVWDWHPHQWVFDQEHLGHQWLŀHGE\ZRUGVRUSKUDVHVVXFKDVPD\ZLOOH[SHFWDQWLFLSDWHIXWXUHDLP HVWLPDWHLQWHQGVHHNSODQEHOLHYHSRWHQWLDOFRQWLQXHRQJRLQJWDUJHWJRDOLVDUHOLNHO\WRRURWKHU VLPLODUH[SUHVVLRQV7KHVHVWDWHPHQWVLQFOXGHDPRQJRWKHUWKLQJVWKRVHDERXWRXU(6*VWUDWHJLHVDQGWKHHłHFWLYHQHVV RIRXU(6*VWUDWHJLHVDQGLQLWLDWLYHV )RUZDUGORRNLQJVWDWHPHQWVLQYROYHLQKHUHQWULVNVDQGXQFHUWDLQWLHV$QXPEHURIIDFWRUVLQFOXGLQJWKRVHGHVFULEHGLQ ɹɽLEDED VDQQXDOUHSRUWVDQGRWKHUŀOLQJVZLWKWKH866HFXULWLHVDQG([FKDQJH&RPPLVVLRQDQGDQQRXQFHPHQWVRQWKH ZHEVLWHRIWKH6WRFN([FKDQJHRI+RQJ.RQJ/LPLWHGFRXOGFDXVHDFWXDOUHVXOWVWRGLłHUPDWHULDOO\IURPWKRVHFRQWDLQHG LQDQ\IRUZDUGORRNLQJVWDWHPHQW 7KHIRUZDUGORRNLQJVWDWHPHQWVPDGHLQWKLVUHSRUWUHODWHRQO\WRHYHQWVRULQIRUPDWLRQDVRIWKHGDWHRQZKLFKWKH VWDWHPHQWVDUHPDGHLQWKLVUHSRUWDQGDUHEDVHGRQFXUUHQWH[SHFWDWLRQVDVVXPSWLRQVHVWLPDWHVDQGSURMHFWLRQV ɹɽLEDEDXQGHUWDNHVQRREOLJDWLRQWRXSGDWHDQ\IRUZDUGORRNLQJVWDWHPHQWVWRUHŁHFWHYHQWVRUFLUFXPVWDQFHVDIWHUWKH GDWHRQZKLFKWKHVWDWHPHQWVDUHPDGHRUWRUHŁHFWWKHRFFXUUHQFHRIXQDQWLFLSDWHGHYHQWV ,QIRUPDWLRQUHIHUHQFHGLQWKLVUHSRUWLQFOXGLQJRWKHU,QWHUQHWVLWHVDQGWKLUGSDUW\UHSRUWVDQGSXEOLFDWLRQVLVQRW LQFRUSRUDWHGLQWRWKLVUHSRUW)RUWKHUHDGHU VFRQYHQLHQFHRQO\WKLVGRFXPHQWPD\SURYLGHWKHDGGUHVVHVRIRUFRQWDLQ K\SHUOLQNVWRWKLUGSDUW\ZHEVLWHVɹɽLEDEDKDVQRWUHYLHZHGVXFKK\SHUOLQNVDQGWDNHVQRUHVSRQVLELOLW\IRUWKHFRQWHQW WKHUHLQ 7KHLQFOXVLRQRILQIRUPDWLRQLQWKLVUHSRUWVKRXOGQRWEHFRQVWUXHGDVDFKDUDFWHUL]DWLRQUHJDUGLQJWKHPDWHULDOLW\RU ŀQDQFLDOLPSDFWRUSRWHQWLDOLPSDFWRIWKDWLQIRUPDWLRQ)RUPRUHFRPSUHKHQVLYHLQIRUPDWLRQDERXWRXUUHVXOWVDQG RSHUDWLRQVLQFOXGLQJULVNVWKDWFRXOGDGYHUVHO\DłHFWRXUEXVLQHVVUHVXOWVRIRSHUDWLRQVRUŀQDQFLDOFRQGLWLRQSOHDVH UHIHUWRRXUDQQXDOUHSRUWVDQGRWKHUŀOLQJVZLWKWKH866HFXULWLHVDQG([FKDQJH&RPPLVVLRQDQGDQQRXQFHPHQWVRQWKH ZHEVLWHRIWKH6WRFN([FKDQJHRI+RQJ.RQJ/LPLWHG ɹɽLEDED(QYLURQPHQWDO6RFLDODQG*RYHUQDQFH5HSRUW &RQWHQW 6RFLDO (QYLURQPHQWDO *RYHUQDQFH $SSHQGLFHV $SSHQGLFHV

Open the original at slide 146 ↗

Slide 147 — ɹɽLEDED*URXS+ROGLQJ/LPLWHG

ɹɽLEDED*URXS+ROGLQJ/LPLWHG

Open the original at slide 147 ↗

Alibaba Group — Presentation / slide deck (8-K exhibit)

Slide 1 — Exhibit 99.2

Slide 2 — &RQWHQWV

Slide 3 — 7RPDNHLWHDV\WRGR

Slide 4 — 2XUYDOXHV

Slide 5 — 5HVSRQVLEOH$,6XVWDLQDEOH*URZWK

Slide 6 — %RDUG6WDWHPHQW

Slide 7 — ,QVWUXFWLRQV

Slide 8 — %XVLQHVV2YHUYLHZ

Slide 9 — ([HFXWLYH6XPPDU\

Slide 10 — 

Slide 11 — 

Slide 12 — *LYLQJ%DFNWR6RFLHW\DQG&RPPXQLWLHV

Slide 13 — (6*,PSDFW/LVW

Slide 14 — *RYHUQDQFH

Slide 15 — 

Slide 16 — 6WUDWHJLHVDQGDSSURDFKHV

Slide 17 — %RDUGJRYHUQDQFH

Slide 18 — 7KLVFRPPLWWHHLVFKDLUHGE\DQLQGHSHQGHQWGLUHFWRUDQGτ

Slide 19 — 5LVNPDQDJHPHQW

Slide 20 — 5LVNPDQDJHPHQWSURFHVV

Slide 21 — 2YHU

Slide 22 — (6*JRYHUQDQFH

Slide 23 — (6*PDQDJHPHQWV\VWHP

Slide 24 — (QYLURQPHQWDO

Slide 25 — 

Slide 26 — 

Slide 27 — 6WUDWHJLHVDQGDSSURDFKHV

Slide 28 — $GGUHVVLQJ

Slide 29 — $VVHVVPHQWUHVXOWV

Slide 30 — )LQDQFLDOLPSDFWVDQGFDSLWDODOORFDWLRQ

Slide 31 — %XLOGLQJFOLPDWHUHVLOLHQFH

Slide 32 — $GGUHVVLQJ&OLPDWH&KDQJH

Slide 33 — (QKDQFLQJVRFLDOUHVLOLHQFHWKURXJKSURGXFWVDQGVHUYLFHV

Slide 34 — 5LVNPDQDJHPHQW

Slide 35 — $GYDQFLQJFDUERQ

Slide 36 — ɹɽLEDED VSDWKZD\VWRZDUGFDUERQQHXWUDOLW\

Slide 37 — 

Slide 38 — (PLVVLRQVUHGXFWLRQIURP

Slide 39 — $GYDQFLQJFDUERQQHXWUDOLW\

Slide 40 — 

Slide 41 — 2UGHUSURFHVVLQJ

Slide 42 — 6XVWDLQDEOHUHWDLO

Slide 43 — 6XVWDLQDEOHFDPSXVHV

Slide 44 — $GYDQFLQJFDUERQQHXWUDOLW\

Slide 45 — 'ULYLQJSODWIRUPHFRV\VWHPGHFDUERQL]DWLRQ

Slide 46 — 3URMHFWVDQGSURJUHVV

Slide 47 — 2YHUPLOOLRQ

Slide 48 — 5HGXFLQJDQGUHF\FOLQJZDVWH

Slide 49 — 

Slide 50 — P

Slide 51 — 3URWHFWLQJQDWXUDOHFRV\VWHPV

Slide 52 — 6RFLDO

Slide 53 — 2YHU

Slide 54 — 6WUDWHJLHVDQGDSSURDFKHV

Slide 55 — 

Slide 56 — $ZRUNSODFHRIHTXLW\

Slide 57 — $QLQFOXVLYHFXOWXUH

Slide 58 — '(,DGYRFDF\

Slide 59 — 7DOHQWDFTXLVLWLRQ

Slide 60 — $IDLUV\VWHPIRUFRPSHQVDWLRQ

Slide 61 — %HQHŀWVDQGHPSOR\HHFDUH

Slide 62 — ɹɽLEDED VHPSOR\HHEHQHŀWV\VWHP

Slide 63 — $EXQGDQW

Slide 64 — 2YHUHPSOR\HHV

Slide 65 — &DUHHUGHYHORSPHQW

Slide 66 — (PSOR\HHKHDOWK

Slide 67 — KRXUV

Slide 68 — τ

Slide 69 — 6RFLDO

Slide 70 — 2YHU

Slide 71 — 6WUDWHJLHVDQGDSSURDFKHV

Slide 72 — &UHDWLQJDJRRG

Slide 73 — +DQGOLQJQRQFRPSOLDQWSURGXFWV

Slide 74 — 7DREDR,QVWDQW&RPPHUFH

Slide 75 — &UHDWLQJDJRRGFRQVXPHUH[SHULHQFH

Slide 76 — ,PSURYLQJ

Slide 77 — 2SWLPL]LQJUHYLHZV\VWHPVIRUWUDQVSDUHQF\

Slide 78 — /RJLVWLFV

Slide 79 — %XLOGLQJDQ

Slide 5 — 5HVSRQVLEOH$,6XVWDLQDEOH*URZWK

Slide 10 —

Slide 11 —

Slide 15 —

Slide 18 — 7KLVFRPPLWWHHLVFKDLUHGE\DQLQGHSHQGHQWGLUHFWRUDQGτ

Slide 21 — 2YHU

Slide 25 —

Slide 26 —

Slide 37 —

Slide 40 —

Slide 47 — 2YHUPLOOLRQ

Slide 49 —

Slide 50 — P

Slide 53 — 2YHU

Slide 55 —

Slide 62 — ɹɽLEDED VHPSOR\HHEHQHŀWV\VWHP

Slide 64 — 2YHUHPSOR\HHV

Slide 67 — KRXUV

Slide 68 — τ

Slide 70 — 2YHU

Slide 73 — +DQGOLQJQRQFRPSOLDQWSURGXFWV

Slide 80 — 3HRSOH V([HPSODU\

Slide 81 — $JHIULHQGO\GLJLWDOVHUYLFHV

Slide 83 — $ERXW

Slide 86 — 2YHU

Slide 87 — ,QPDUNHWPDQDJHPHQW

Slide 88 —

Slide 89 — 2YHUPLOOLRQ

Slide 90 — %XLOGLQJKHDOWK\

Slide 95 — KRXUV

Slide 103 — +LJKTXDOLW\HQWUHSUHQHXUVKLSDQG

Slide 107 —

Slide 110 —

Slide 124 — $SSHQGL[(6*.H\3HUIRUPDQFH0HWULFV7DEOH

Slide 130 — $SSHQGL[(6*'DWD9HULŀFDWLRQ6WDWHPHQW

Slide 131 —

Slide 132 —

Slide 133 —

Slide 134 —

Slide 135 — $SSHQGL[UHHQKRXVHDV,QYHQWRU\DQG$FFRXQWLQJ%RXQGDULHV

Slide 136 — $SSHQGL[6WDNHKROGHU(QJDJHPHQWDQG0DWHULDOLW\$VVHVVPHQW

Slide 137 — 0DWHULDOLW\WR6RFLHW\(FRQRP\DQG(QYLURQPHQW

Slide 138 — $SSHQGL[&OLPDWH6FHQDULR'HVFULSWLRQV

Slide 139 — $SSHQGL[3URJUHVVRQWKH8QLWHG1DWLRQV*OREDO&RPSDFW

Slide 140 — $SSHQGL[5HSRUW,QGLFDWRU,QGH[

Slide 145 — $SSHQGL['HŀQLWLRQV

Slide 146 — $SSHQGL[,PSRUWDQW/HJDO,QIRUPDWLRQ