At a Crossroads: Defining your Future, and Leveraging the Potential of Treasury 3.0 SM

1. At a Crossroads:Defining your Future, and Leveraging the Potential of Treasury 3.0SM September 2012 • Dave Wexler • Principal

2. Agenda Assess the Current State of your Treasury Create a Vision for your Future State Treasury Define and Execute a Roadmap to Achieve Treasury 3.0

3. Why a Treasury Assessment? • Treasury is the Financial Nerve Center

4. Treasury 3.0®: Corporate View 1st Generation 2nd Generation 3rd Generation High Treasury Operations is an immature, fragmented or informal function, characterized by manual processes. Treasury centralizes key roles, improving transparency and controls. There is greater access to data and computing power and consolidation of competency. Treasury is a strategic advisor, more closely integrated with business units, supporting globalization, efficiency, trading partner/supply chain integration and greater sophistication in risk/return optimization. Information Data Intelligence Low

5. Data vs. Intelligence Scope of Influence 3.0 2.0 2.0 3.0 Technology/Data Architecture

6. Why a Current State Assessment Can’t Wait • The recent financial crisis is a call to action for Treasury 3.0®. • The first step is to assess your current state. • In the face of uncertainty, 3.0 helps you stay in control.

7. Key Assessment Elements Policies & Procedures • Do policies support the goals of the organization, clearly communicate permissions and account for unique situations? Organizational Structure • Does our organizational structure effectively support the business? Bank Account Structure • Are banking relationships and bank account structures leveraged to their potential? Cash Flow & Liquidity • Do we know where our cash is and can we effectively sustain operations? Technology • Treasury technology must reflect an organization’s need to be extremely nimble and adjust quickly to the changes demanded by market conditions.

8. Assessment: Policies & Procedures • Key to Success • Do policies support the goals of the organization, clearly communicate permissions and account for unique situations? Policy Considerations: • Investment • Debt • FX • Financial Risk Management • Counterparty Risk Management • Bank Account Administration • Business Continuity Policy Elements: Instrument Types • Monetary Limits • Durations • Credit Ratings • Concentration Limits • Defined Review Periods

9. Assessment: Policies & Procedures • Benefits • Procedural support increases controls • Segregation of Duties • Regulatory Compliance • Standardization • Risk Mitigation • Key Assessment Indicators • Timing of last policy review • What has transpired since the last review? • Authorization • Access/Distribution • Sign-offs

10. Assessment: Organizational Structure • Key to Success • Does our organizational structure effectively support the business? • Organizational Considerations • Recent/Future Actions - Mergers/Acquisitions - Spin-offs • Staffing - Resource levels - Experience - Knowledge/Training - Authority • Geographic Footprint - Tax Implications - Regulatory

11. Assessment: Organizational Structure • Key Assessment Indicators • Treasury Mandate • Staffing • Roles and Responsibilities • Performance Metrics • Business Unit/Subsidiary Roles • Collaboration with Tax Department • Timing of Review • Repatriation Strategies • Operational Support • Regulatory Awareness • Local Relationships • Communication • Benefits • Financial • Tax Savings • Funding Cost Reduction • Employee Morale • Compliance

12. Assessment: Bank Account Structure • Key to Success • Are banking relationships and bank account structures leveraged to their potential? • Bank Account Considerations • Materiality • Visibility • Complexity - Number of Bank Relationships/Accounts - Drivers • Administration • Oversight • Fee Analysis • Relationship Review

13. Assessment: Bank Account Structure • Key Assessment Indicators • Optimized Structure Effectively Supporting Business • Identify Redundant Services • Duplicative Bank Accounts • Review of Bank Relationships • Periodic: RFP for Services • Geographic • Fee Analysis • Frequency • Mechanism • ECR • Oversight • Centralized/Decentralized • Benefits • Costs • Efficiency • Control/Risk Mitigation • Income (Investment, etc.)

14. Assessment: Cash Flow & Liquidity • A typical billion-dollar company spends approximately $27 million annually for unnecessary working capital and inefficient processing functions because they lack visibility into the financial supply chain and receivables.* • *Source: Killen Associates Global Visibility The capability of an organization to have timely and comprehensive information on all positions and exposures.

15. Assessment: Cash Flow & Liquidity • Key to Success • Do we know where our cash is and can we effectively sustain operations? • Cash & Liquidity Considerations • Cash Positioning Process • Mechanisms • Sources • Cash Flow Forecasting • Methodology • Accounts Receivable/Payable • Mechanisms: External • Systems: Internal • Cash Concentration/Pooling • Intercompany Transactions/Loans • Purpose • Credit Access

16. Assessment: Cash Flow & Liquidity • Cash Concentration/Pooling • ZBA Structures • Physical/Notional Pooling • Intercompany Transactions • Settlement Timing • Currency • On Behalf Of • Credit Access • Planning/Coordination with Corporate Finance • Syndicate Participants • Sources Key Assessment Indicators • Cash Positioning • Automation • Consistency • Completeness • Timelines • Cash Flow Forecasting • Precision • Relevance (Timing) • Consistency • Accounts Receivable/Payable • Timing • Velocity

17. Assessment: Cash Flow & Liquidity • Benefits • Optimize idle cash balances • Lower borrowing costs • Lower cost of capital • Netting Opportunities • Greater investment income • More favorable FX rates • Early warning system

18. Assessment: Technology Key to Technology Success Treasury technology must reflect an organization’s need to be extremely nimble and adjust quickly to the changes demanded by market conditions. Technology Considerations • System Types • Older Treasury Workstation Systems (TWS) • Bank Online Systems • Spreadsheets • Best-of-Breed • License expiration, migration, “sunset” • Upgrade timing • Deployment Mode • Costs • Integration/Interfaces • Enterprise accessibility • Information workflow • Controls

19. Assessment: Technology • Key Assessment Indicators • Percentage of Manual Processes • Timing of Last Upgrade • Interfaces to Promote STP • Banking • ERP (GL, AR/AP) • Trading • System Access • Auditability • Security • Reporting • Costs • Internal • 3rd Party • Benefits • Enable Treasury Best Practice • Automation + Efficiency • Standardization • STP • Controls • Scalability

20. Technology & Treasury Applications • Treasury Management System • Functions used: • Bank Polling • Cash Positioning • Cash Forecasting • Bank Account Administration • Payments (& Payment Factory) • Short-term Investments and Debt • FX, Commodities & Risk Management • LT Debt & LT Investments • In-house Bank & Intercompany Loans • Multilateral Netting • Accounting & Reconciliation Bank Account Administration Bank Communication via SWIFT Dashboard & Reporting Financial Transactions Centralized, Integrated & Real-Time System Analysis & Pricing In-house Banking, Intercompany Loans & Netting Payment Factory Accounting & Reconciliation

21. Create a Vision for Your Treasury Organization’s Future 1. Gap Analysis 2. Benchmark Reporting 3. Opportunities for Improvement 4. Reporting Protocols 5. Roadmap Planning & Development

22. Creating the Future Vision: Essential Elements 1. Gap Analysis • Controls Deficiencies • Completeness • Material Weakness • Inconsistencies • Process Inefficiencies

23. Creating the Future Vision: Essential Elements 2. Benchmark Reporting • General Best Practice • Operation/Function • Industry Best Practice • Substantiated and Credible Best Practice Standards • Source • Metrics • Local/Regional Practices • Regulatory Implications

24. Sample Treasury Metrics

25. Guidelines: Policies and Procedures • Formally define and document global Treasury policies and procedures: • Dependent upon business: Debt, Short-Term Investments, Bank Account Administration, Cash Forecasting, FX Risk Mgt. • Policies should be approved by company’s Board of Directors. • Create written global treasury procedures, tailored to individual countries to reflect regional/country nuances and systems • Formally document a Treasury Disaster Recovery Plan: • Periodically test plan to verify its effectiveness. • Continue to document and refine country treasury process maps

26. Creating the Future Vision:Essential Elements 3. Opportunities for Improvement • Identified • Quantified • Fundamentals • Costs • Efficiencies • Strategic • ROI • FTE

27. Creating the Future Vision:Essential Elements • 4. Reporting Protocols • Consistent • Detailed Support • Actionable • Realistic • Metrics/Statistics • Executive Presentation

28. Creating the Future Vision:Essential Elements 5. Roadmap Planning & Development Prioritization Dependencies Timelines Resources Milestones Risks

29. The Treasury Roadmap • A treasury roadmap enables organizations to visualize: Critical assets within the organization Interdependencies of tasks Required skills, competencies and technology

30. Roadmap Benefits

31. The Treasury Roadmap Process

32. Operational to Strategic Transition Strategic (30%) Strategic (5%) Analytical (30%) Analytical (15%) Operational (40%) Distribution of time spent on tasks in a “typical” Treasury department Distribution of time spent on tasks in a “best-practices” Treasury department Operational (80%)

33. Achieve Treasury 3.0® • Never before has Treasury’s contribution to an organization’s survival been so critical: • Strategic focus • Rapid and comprehensive response • Business Continuity Planning (“BPM”) • Proactive Plan • Integrated data • Impact of uncontrollable forces • Efficiency • Communication • Control • Enterprise Support