Managing Risk and Opportunity through Uncertainty

LIQUIDITY (CONT.) 41% Medium 7% Low 2% Not at all Top Priorities of Your Company’s Treasury in 2019 Priority to Understand the Nature and Impact of Uncertainty Around Your Forecast of Currency, Liquidity and Working Capital Exposures Managing and reducing forecasting error will be a core Key Performance Indicator for many leading global treasuries in next 3 to 5 years” Americas Treasurer High 44% 50% Improve cash forecasting 26% Review FX risk management strategy 14% Improve liquidity 7% Upgrade treasury systems 5% Refinance debt 2% Raise additional capital 2% Improve control of operations Forecasting continues to be a major focus area for corporates into 2019. It was selected as the top priority for 44% of respondents. In addition, it comes out in the top three processes that will be disrupted by transformation. In order to improve forecasting accuracy, corporates must first understand their forecasting error, then once the source is identified, steps can be taken to reduce and remedy the error. Data and analytics will play a critical role in that regard. SUBSIDIARY FUNDING POLICY Subsidiary Funding Policy 83% of companies reported having formal intercompany funding policies in place. Most respondents also indicated that subsidiary funding requests are reviewed by both Treasury and Tax in accordance with broad guidelines/policies (93%) and that funding/repatriation requests are linked with their cash flow forecasts in some capacity (92%). Ad hoc process/no formal policy Formal loan agreements in place 17% 83% Funding/Repatriation Requests Linked with Cash Flow Forecasts Approval Level of Subsidiary Funding Requests 92% No Always linked Sometimes linked Limited and/or no involvement by Tax Reviewed by Treasury and Tax in accordance with broad guidance/ policies 55% 8% 7% 37% 93% 30 31