Knowledge representation is essential for semantics modeling and intelligent information processing. For decades researchers have proposed many knowledge representation techniques. However, it is a daunting problem how to capture deep semantic information effectively and support the construction of a large-scale knowledge base efficiently. This article describes a new knowledge representation model, SenseNet, which provides semantic support for commonsense reasoning and natural language processing. SenseNet is formalized with a Hidden Markov Model. An inference algorithm is proposed to simulate human-like natural language understanding procedure. A new measurement, confidence, is introduced to facilitate the natural language understanding. The authors present a detailed case study of applying SenseNet to retrieving compensation information from company proxy filings.