5,90UHSRUW 3UHOLPLQDU\DVVHVVPHQWRIDLUTXDOLW\IRU FDUERQPRQR[LGHDQGEHQ]HQHLQWKH 1HWKHUODQGVXQGHU(8OHJLVODWLRQ 5-0)RONHUW%$-LPPLQNDQG+1RRUGLMN 7KLVLQYHVWLJDWLRQKDVEHHQSHUIRUPHGE\RUGHUDQGIRUWKHDFFRXQWRIWKH'LUHFWRUDWH*HQHUDO IRU(QYLURQPHQWDO3URWHFWLRQ'LUHFWRUDWH&OLPDWLF&KDQJHDQG,QGXVWU\ZLWKLQWKH IUDPHZRUNRISURMHFWµ3ROLF\DGYLFHQDWLRQDODQGLQWHUQDWLRQDO¶ 5,9032%R[%$%LOWKRYHQWHOHSKRQHWHOHID[
SDJHRI 5,90UHSRUW
$EVWUDFW
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
&RQWHQWV
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
6DPHQYDWWLQJ
'HWZHHGHGRFKWHUULFKWOLMQOXFKWNZDOLWHLWYDQGH(XURSHVH8QLHLVRSGHFHPEHU JHSXEOLFHHUGHQPRHWXLWHUOLMNGHFHPEHULQGHQDWLRQDOHZHWJHYLQJ]LMQ JHw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ppQQDDOOH]RQHV$OOHHQYRRU]RQH0LGGHQ LVGHUHJLPHYDVWVWHOOLQJYRRUEHQ]HHQVWUHQJHUGDQYRRUNRROPRQR[LGH5HJLPHLQGHOLQJYDQGHYHUVFKLOOHQGH]RQHVHQDJJORPHUDWLHV VWUHQJVWH ODDJVWH7XVVHQKDDNMHVZRUGW KHWDDQWDOYHUSOLFKWHPHHWVWDWLRQVELMPHWLQJHQDOVHQLJHLQIRUPDWLHEURQGDWDIKDQJWYDQKHWUHJLPH ZHHUJHJHYHQ
=RQH 5HJLPH
DDQWDOPHHWSXQWHQ $JJORPHUDWLH DDQWDOPHHWSXQWHQ5HJLPH
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
SDJHRI 5,90UHSRUW YROGDDQ=RQGHUKHWJHEUXLNYDQPRGHOOHQ]LMQPHHWSXQWHQYRRUSDVVLHYHPRQVWHUQDPH QRGLJ 'HFRQFHQWUDWLHVURQGRPEHQ]LQHWDQNVWDWLRQVHQSDUNHHUJDUDJHVZRUGHQQLHWYHUZDFKWGH ERYHQVWHEHRRUGHOLQJVGUHPSHOWHRYHUVFKULMGHQRSSOHNNHQZDDUPHQVHQODQJGXULJ]XOOHQ YHUEOLMYHQ'HFRQFHQWUDWLHYHUKRJLQJURQGRPJURWHLQGXVWULsOHEURQQHQLQ$PVWHUGDP1RRUG HQLQKHW5LMQPRQGJHELHGEHSHUNW]LFKWRWLQGXVWULHHOWHUUHLQ%ORRWVWHOOLQJYDQGHEHYRONLQJ DDQFRQFHQWUDWLHVERYHQGHERYHQVWHEHRRUGHOLQJVGUHPSHOLVLQGH]HJHYDOOHQQLHW ZDDUVFKLMQOLMN'HOXFKWNZDOLWHLWNDQRSGH]HSOHNNHQPHWPRGHOOHQLQNDDUWZRUGHQ JHEUDFKW
5,90UHSRUW SDJHRI
6XPPDU\
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
=RQH 5HJLPH
QXPEHURIPRQLWRULQJVLWHV $JJORPHUDWLRQ QXPEHURIPRQLWRULQJVLWHV5HJLPH
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
5,90UHSRUW SDJHRI
,QWURGXFWLRQ
,QWKHµ&RXQFLO'LUHFWLYH(&IRUDPELHQWDLUTXDOLW\DVVHVVPHQWDQG PDQDJHPHQW¶NQRZQLQVKRUWDVWKH)UDPHZRUNGLUHFWLYHFDPHLQWRIRUFH(87KLV JHQHUDOGLUHFWLYHRIWKH(XURSHDQ8QLRQKDVSURYLGHGDUHIHUHQFHIUDPHZRUNIRUDVVHVVLQJ DQGPDQDJLQJDPELHQWDLU,WGHILQHVWDUJHWVIRUSUHYHQWLQJKDUPIXOHIIHFWVRIDLUSROOXWDQWV RQKXPDQKHDOWKDQGWKHHQYLURQPHQW,WDOVRJLYHVDOLVWRIDLUSROOXWDQWVIRUZKLFK IXUWKHUOHJLVODWLRQDW(XURSHDQOHYHOZLOOQHHGWREHGHYHORSHG7KLVIXUWKHUHODERUDWLRQWDNHV SODFHLQVRFDOOHGGDXJKWHUGLUHFWLYHV7KHILUVWGDXJKWHUGLUHFWLYHIRUVXOSKXUGLR[LGH62QLWURJHQGLR[LGH12DQGQLWURJHQ
R[LGHV12[SDUWLFXODWHPDWWHU30DQGOHDG3EFDPHLQWRIRUFHLQ(8 7KHVHFRQGGDXJKWHUGLUHFWLYHIRUFDUERQPRQR[LGH&2DQGEHQ]HQH&+FDPHLQWR IRUFHLQ(8,QWKLVGLUHFWLYHOLPLWYDOXHVPDUJLQVRIWROHUDQFHDQGUHODWHG DVVHVVPHQWYDOXHVDUHGHILQHGDJDLQVWZKLFKWKHDLUTXDOLW\PXVWEHFKHFNHG%HIRUHWKH LPSOHPHQWDWLRQRIWKHGLUHFWLYHWKHPHPEHUVWDWHVDUHUHTXLUHGWRJLYHDJHQHUDOGHVFULSWLRQ RIWKHDLUTXDOLW\RIWKHUHVSHFWLYHFRPSRQHQWVLQWKHIRUPRIDVRFDOOHG3UHOLPLQDU\ $VVHVVPHQW3$7RPDNHWKLVSUHOLPLQDU\DVVHVVPHQWXVHKDVEHHQPDGHRIWKHUHSRUW µ*XLGDQFHRQDVVHVVPHQWXQGHUWKH(8$LU4XDOLW\'LUHFWLYHV¶FRPSLOHGE\DQ(8ZRUNLQJ JURXSDQGWKHVXSSRUWLQJUHSRUWµ*XLGDQFHUHSRUWRQSUHOLPLQDU\DVVHVVPHQWXQGHU(&DLU TXDOLW\GLUHFWLYHV¶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
5,90UHSRUW SDJHRI
'DWDDQGPHWKRGV
0HDVXUHPHQWV
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
1XPEHURIVWDWLRQV &DUERQPRQR[LGH&2 %HQ]HQH&+
0RGHOV
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
([DPLQDWLRQIUDPHZRUN
/LPLWYDOXHVDQGPDUJLQVRIWROHUDQFH 7KHVHFRQGGDXJKWHUGLUHFWLYHSURYLGHVDQH[DPLQDWLRQIUDPHZRUNIRUDVVHVVLQJDLUTXDOLW\ $QXPEHURIOLPLWYDOXHVDUHGHILQHG7DEOH-XVWDVIRUWKHILUVWGDXJKWHUGLUHFWLYHWKH OHJLVODWLRQIRUWKHVHFRQGGDXJKWHUGLUHFWLYHGHILQHVWKHVRFDOOHGµPDUJLQVRIWROHUDQFH¶7KH PDUJLQRIWROHUDQFHLVWKHSHUFHQWDJHRIWKHOLPLWYDOXHZKLFKGHFUHDVHVZLWKWLPHE\ZKLFK WKLVOLPLWYDOXHPD\EHH[FHHGHGSHQGLQJWKHUHVXOWVRIWKHDLUTXDOLW\LPSURYHPHQW PHDVXUHV(87DEOH7KHPDUJLQRIWROHUDQFHLVVRPHZKDWFRPSDUDEOHWRWKH µ([FHSWLRQOLPLWYDOXHLQEXV\WUDIILFVLWXDWLRQV¶XVHGXQWLOUHFHQWO\LQWKH'XWFKOHJLVODWLRQ 7DEOH2YHUYLHZRIOLPLWYDOXHVDFFRUGLQJWRWKHVHFRQGGDXJKWHUGLUHFWLYH(8&RPSRQHQW $LP 8QLW /LPLWYDOXH 0HDVXULQJ
SHULRG 6WDUWLQJGDWH &DUERQPRQR[LGH
&2 + PJP
KRXU -DQXDU\
%HQ]HQH&+ + JP \HDU -DQXDU\
+DLPHGDWWKHSURWHFWLRQRIKXPDQKHDOWK
7DEOH0DUJLQVRIWROHUDQFHRIOLPLWYDOXHVDFFRUGLQJWRWKHVHFRQGGDXJKWHUGLUHFWLYH(8 &RPSRQHQW /LPLWYDOXH 0HDVXULQJ
SHULRG 0DUJLQRIWROHUDQFH &DUERQ PRQR[LGH PJPñ&2 KRXU PJP RQ'HFHPEHU2Q-DQXDU\ DQGWKHUHDIWHUHYHU\PRQWKVGHFUHDVLQJE\PJPSHU \HDUVRWKDWLVUHDFKHGRQ-DQXDU\
%HQ]HQH JPñEHQ]HQH \HDU JPRQ'HFHPEHU2Q-DQXDU\
DQGWKHUHDIWHUHYHU\PRQWKVGHFUHDVLQJE\JPSHU
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
WKUHVKROG 8SSHUWKUHVKROG
/RZHU WKUHVKROG /RZHU WKUHVKROG )LJXUH,PSOLFDWLRQRIH[FHHGLQJWKHOLPLWYDOXHWKHXSSHUDQGORZHUDVVHVVPHQWWKUHVKROGVDQGWKHUHVXOWLQJ DVVHVVPHQWPHWKRGDGDSWHGIUHHO\IURP9DQ$DOVWHWDO ,WLVLPSRUWDQWWRQRWHWKDWH[FHHGDQFHRIDWKUHVKROGYDOXHLQDQDUHDGRHVQRWPHDQWKDWWKH DLUTXDOLW\LQWKDWHQWLUHDUHDLVSRRU7KRXJKWKHXSSHUWKUHVKROGLVH[FHHGHGLWLVSRVVLEOH 7KLVLQFOXGHVWKHVLWXDWLRQLQZKLFKWKHFRQFHQWUDWLRQH[FHHGVWKHOLPLWYDOXH
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
WKUHVKROG
/RZHU DVVHVVPHQW
WKUHVKROG &DUERQPRQR[LGH
&2 SURWHFWLRQRIKXPDQKHDOWKKRXUPHDQ PJ&2P
%HQ]HQH&+ <HDUO\PHDQ SURWHFWLRQRIKXPDQKHDOWK J&+Pñ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
5,90UHSRUW SDJHRI
=RQHVDQGDJJORPHUDWLRQV
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ð$FRQQHFWHGDUHDZLWKD SRSXODWLRQGHQVLW\DERYHLQKDELWDQWVSHUNPð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
5,90UHSRUW SDJHRI
7DEOH$JJORPHUDWLRQVLQWKH1HWKHUODQGV&%6
1R &LW\FHQWUH 6XUURXQGLQJPXQLFLSDOLWLHV 1XPEHURI
LQKDELWDQWV [ $PVWHUGDP
+DDUOHP $PVWHUGDP$DOVPHHU$PVWHOYHHQ8LWKRRUQ2XGHU$PVWHO'LHPHQ=DDQVWDG+HHPVNHUN%HYHUZLMN9HOVHQ+DDUOHP %ORHPHQGDDO=DQGYRRUW+HHPVWHGH%HQQHEURHN
+DDUOHPPHUOLHGHDQG+DDUOHPPHUPHHU
5RWWHUGDP
'RUGUHFKW 5RWWHUGDP6FKLHGDP9ODDUGLQJHQ0DDVVOXLV5R]HQEXUJ6SLMNHQLVVH$OEUDQGVZDDUG&DSHOOHDG,-VVHO5LGGHUNHUN %DUHQGUHFKW+HHUMDQVGDP=ZLMQGUHFKW+HQGULNLGR$PEDFKW 'RUGUHFKW3DSHQGUHFKWDQG6OLHGUHFKW 7KH+DJXH /HLGHQ 7KH+DJXH0RQVWHUV¶*UDYHQ]DQGH1DDOGZLMN'H/LHU0DDVODQG6FKLSOXLGHQ:DWHULQJHQ'HOIW5LMVZLMN9RRUEXUJ /HLGVFKHQGDP:DVVHQDDU9RRUVFKRWHQ/HLGHQ2HJVWJHHVW .DWZLMN9DONHQEXUJ5LMQVEXUJDQG/HLGHUGRUS 8WUHFKW 8WUHFKW+RXWHQ1LHXZHJHLQ,-VVHOVWHLQDQG0DDUVVHQ (LQGKRYHQ (LQGKRYHQ%HVW9HOGKRYHQ*HOGURS0LHUOR1XHQHQDQG +HOPRQG +HHUOHQ .HUNUDGH +HHUOHQ.HUNUDGH/DQGJUDDI%UXQVVXP9RHUHQGDDODQG1XWK Zone North Zone Middle Zone South Agglomerations Province borders Heerlen/ Kerkrade Eindhoven Rotterdam /Dordrecht Utrecht The Hague/ Leiden Amsterdam/ Haarlem )LJXUH=RQHVDQGDJJORPHUDWLRQVLQWKH1HWKHUODQGV
SDJHRI 5,90UHSRUW 0 - 100 100 - 500 500 - 2500 2500 - 5000 > 5000 0 - 100 100 - 500 500 - 2500 2500 - 5000 > 5000 )LJXUH3RSXODWLRQGHQVLW\LQWKH1HWKHUODQGVDVWKHQXPEHURILQKDELWDQWVSHUNPð&%6
5,90UHSRUW SDJHRI
5HVXOWV
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
$LUTXDOLW\DQGFKHFNLQJDJDLQVWWKHVWDQGDUGV
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
&KHFNLQJDJDLQVWDVVHVVPHQWWKUHVKROGV
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
5RDG 2XWHUZDOO 5RDG 2XWHUZDOO 5RDG 2XWHUZDOO 5RDG 2XWHUZDOO
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
SDJHRI 5,90UHSRUW FLWLHVLQWKHQRUWKDUHH[SHFWHGWREHDERYHWKHORZHUDVVHVVPHQWWKUHVKROGFRQVLGHULQJWKH EDFNJURXQGFRQFHQWUDWLRQGHFUHDVHVDVRQHJRHVQRUWKDQGWKHODUJHVWFLWLHVLQWKHQRUWKDUH QRWVXEVWDQWLDOO\ODUJHUWKDQWKHFLWLHVPHQWLRQHGDERYH
%HQ]HQH
$LUTXDOLW\DQGFKHFNLQJDJDLQVWWKHVWDQGDUGV
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§.WRQRIWKHWRWDOLQGXVWULDOSRLQWVRXUFHHPLVVLRQVLQWKHFRXQWU\7KHWRWDOEHQ]HQH HPLVVLRQLVDERXW.WRQLQWKH1HWKHUODQGVIRU5,902WKHUSRLQWVRXUFHVDUH FDOFXODWHGZLWKHPLVVLRQVVFDOHGDFFRUGLQJWKHQDWLRQDOHPLVVLRQWUHQG )LJXUH6SDWLDOGLVWULEXWLRQRI\HDUO\PHDQEHQ]HQHFRQFHQWUDWLRQVEDVHGRQPHDVXUHPHQWVDQGFDOFXODWLRQV XVLQJ236IRU 5HVXOWVIRUVKRZQRH[FHHGDQFHVIRUWKH\HDUO\PHDQRIWKHEDFNJURXQGFRQFHQWUDWLRQV )LJXUHLQWKH1HWKHUODQGV,QFUHDVHGYDOXHVDSSHDUPDLQO\LQXUEDQDUHDVLQWKH 5DQGVWDGLQGHFUHDVLQJRUGHURIFRQFHQWUDWLRQV$PVWHUGDP5RWWHUGDP7KH+DJXHDQG 8WUHFKW7KHKLJKHVWEDFNJURXQGYDOXHVRFFXUGXHWRODUJHSRLQWVRXUFHVLQWKHSRUWRI $PVWHUGDPVWRUDJHDQGWUDQVIHURIIXHOVDQGLQWKH5LMQPRQGDUHDFKHPLFDOLQGXVWU\7KH5,90UHSRUW SDJHRI ILJXUHDOVRVKRZVWKHODUJHORFDOFRQWULEXWLRQRIWKHRLODQGJDVH[WUDFWLRQIURPWKH1RUWK 6HD 7KH\HDUO\PHDQEHQ]HQHFRQFHQWUDWLRQVKRZVDGRZQZDUGWUHQGZKLFKLVWKHVWURQJHVWDW VWUHHWVWDWLRQV)LJXUH7KHFRQFHQWUDWLRQDWVWUHHWVWDWLRQVKDVKDOYHGLQWKHODVWIRXU \HDUV7KLVVWULNLQJIDOOLVWKHUHVXOWRIWKHLQWURGXFWLRQRIWKHUHJXODWHGWKUHHZD\FDWDO\WLF FRQYHUWHUWHFKQLFDOLPSURYHPHQWVLQFDUVDQGWKHUHGXFWLRQRIWKHEHQ]HQHOHYHOVLQSHWURO $VRI-DQXDU\WKHVWDQGDUGIRUWKHEHQ]HQHOHYHOLQSHWUROZDVUHGXFHGIURPWR 6WDDWVEODG7KHPHDQEHQ]HQHOHYHOLQWKHQLQHWLHVZDV$FFRUGLQJWRVSRW )LJXUH<HDUO\PHDQEHQ]HQHWUHQG FKHFNVE\WKH,QVSHFWRUDWHIRUWKH(QYLURQPHQWWKHEHQ]HQHOHYHOKDGDOUHDG\FRQIRUPHGWR WKLVQHZVWDQGDUGLQ2FWREHU )URPFDOFXODWLRQVXVLQJ&$590.ZRUNHGRXWZLWKPHDVXUHPHQWVWKHKLJKHVW FRQFHQWUDWLRQVVHHPWRRFFXULQ$PVWHUGDPDQG5RWWHUGDP7DEOH7KHFDOFXODWHG FRQFHQWUDWLRQVKHUHDUHEHORZWKHVWDQGDUG$OWKRXJKQRFDOFXODWLRQVKDYHEHHQGRQHIRU7KH +DJXHFRQFHQWUDWLRQVDUHH[SHFWHGWREHORZHUDVLWLVVLWXDWHGFORVHWRWKHVHD,QFLWLHVVXFK DV(LQGKRYHQ$UQKHP+DDUOHP9HQOR%UHGDDQG'HQ%RVFKWKHPD[LPXPOHYHOVDUH ORZHUVWLOODQGDUHWKHUHIRUHFRPIRUWDEO\XQGHUWKHVWDQGDUG <HDUO\PHDQEHQ]HQHWUHQG J P VWUHHWVWDWLRQV FLW\VWDWLRQV UHJLRQDOVWDWLRQV FRQWULEXWLRQRIVWUHHWVWDWLRQV
SDJHRI 5,90UHSRUW 7DEOH/HQJWKRIWUDIILFURDGVLQNPDQGDQLQGLFDWLRQRIFRQFHQWUDWLRQDWWKHRXWHUZDOO LQVLGH LQWHUYDO RXWVLGHLQWHUYDORIUHVLGHQFHVLQ'XWFKFLWLHVZLWKWKHUHODWHGFODVVIRU\HDUO\PHDQEHQ]HQH FRQFHQWUDWLRQLQ &RQFHQWUDWLRQ LQWHUYDOJP EHQ]HQH !
5RDG 2XWHUZDOO 5RDG 2XWHUZDOO 5RDG 2XWHUZDOO 5RDG 2XWHUZDOO
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
5,90UHSRUW SDJHRI NP JP )LJXUH<HDUO\PHDQEHQ]HQHFRQFHQWUDWLRQLQWKHSRUWDUHDRI$PVWHUGDPLQ NP JP )LJXUH<HDUO\PHDQEHQ]HQHFRQFHQWUDWLRQDURXQGSRLQWVRXUFHVLQWKH5LMQPRQGDUHDLQ
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
&KHFNLQJDVVHVVPHQWWKUHVKROGV
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
5,90UHSRUW SDJHRI
$VVHVVPHQW
&KDSWHUSUHVHQWHGGDWDRQWKHDLUTXDOLW\IRUFDUERQPRQR[LGHDQGEHQ]HQHLQWKH 1HWKHUODQGV'DWDFDQEHXVHGDVDQDLGIRUDVVLJQLQJDUHJLPHWRWKHDVVHVVPHQWRIWKHDLU TXDOLW\IRUWKH'XWFK]RQHVDQGDJJORPHUDWLRQVIRUGLIIXVHVRXUFHV,QDGGLWLRQWR PHDVXUHPHQWGDWDDQGWKHUHVXOWVRIPRGHOFDOFXODWLRQVRWKHUVRXUFHVRILQIRUPDWLRQPD\ DOVREHXVHGWRDUULYHDWDGHILQLWLRQRIDQDVVHVVPHQWUHJLPHIRUD]RQHRUDJJORPHUDWLRQ)RU H[DPSOHLQIRUPDWLRQDERXWFXUUHQWRULQWHQGHGSROLF\RUHPLVVLRQWUHQGVLQWKH1HWKHUODQGV DQGDEURDGHWFFRXOGDOVREHFRQVLGHUHG$VWKHUHDUHOLWWOHPHDVXUHPHQWVDYDLODEOHIRUWKH µKRWVSRWV¶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
%HQ]HQH
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
&RQVHTXHQFHVIRUWKH/0/
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
UHTXLUHPHQW /0/ DGMXVWPHQWV/0/DIWHU UHTXLUHPHQW(8 /0/ DGMXVWPHQWV/0/DIWHU VDPSOHU3DVVLYH $JJORPHUDWLRQV $PVWHUGDP+DDUOHP 5RWWHUGDP'RUGUHFKW 7KH+DJXH/HLGHQ 8WUHFKW (LQGKRYHQ +HHUOHQ.HUNUDGH =RQHV 1RUWK 0LGGOH 6RXWK 7RWDO 2QHVWDWLRQLVVLWXDWHGRXWVLGHWKHXUEDQDUHDRIWKHDJJORPHUDWLRQ
/0/DGMXVWPHQWVIRUFDUERQPRQR[LGH
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
SDJHRI 5,90UHSRUW
/0/DGMXVWPHQWVIRUEHQ]HQH
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
5,90UHSRUW SDJHRI