Managing Risk and Opportunity through Uncertainty

LIQUIDITY Percentage of Operating Flows in Pooling Structure Percentage of Respondents with Automated Pooling Processes For many corporations, traditional cash management processes can be leveraged to manage both on-balance sheet and forecasted transactional FX risks. Cash pooling, for example, traditionally used by companies seeking to mobilize global cash, can also reduce, or even entirely eliminate, the need to perform certain FX transactions. It is not surprising, then, that 59% of respondents reported pooling cash at either a global or regional level, 76% of which reported concentrating cash on a daily basis. 65% of companies also reported including at least 75% of operating flows in their pooling structure. 31% 4% 12% 11% 7% 34% 9% 16% 76% 25% or less 26-50% 51-74% 75-94% 95% or more Daily Monthly Periodically Weekly Frequency of Cash Concentration Level at Which Cash is Pooled/Mobilized Visibility of Cash Balances Frequency of Liquidity Exposure Reporting Use of Cash Flow Forecasting No Yes, completely Yes, partially 16% 42% 42% 65% 14% 7%3% 11% 17% 9% 37% 10% 11% 14% 9% 18% 52% 1% 91% 22% 28% 46% Global Regional Country None Other 25% or less 26-50% 51-74% 75-94% 95% or more Daily Half-yearly Monthly Never Per request Quarterly No Yes 59% 84% Cash flow forecasting, which can provide visibility into future aggregate cash positions across currencies, can be invaluable in helping companies identify natural offsets and opportunities for internal hedging. 91% of participants reported forecasting their cash flows. Somewhat surprisingly, given the importance placed on effective cash flow forecasting, 72% of survey respondents reported that inputs are compiled manually. 72% Manual Input 44% Forecast of collections 35% Forecast of payables 34% Automated from TMS/ERP 32% Statistical analysis of past patterns 9% Other Forecasting Methodology LIQUIDITY (CONT.) 28 29