CaseStudies

Global Transaction Services

Global Liquidity and Investments

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AT&T | NA | Single IBAN account breaks new ground for corporate receivables & enhances daily liquidity management 4

EMC Corporation | NA | Increasing the efficiency and flexibility of global funds investments 6

Grundfos | ASIA | Interest optimization structure unlocks trapped liquidity 8

Honeywell China | ASIA | Three-tier automated zero-balancing cash pool is a first for China 9

InterContinental | EMEA | Streamlining short-term investments for the global hotel group 10

Lenovo | ASIA | Integrating global payments for simplicity and efficiency 11

MACH | EMEA | TreasuryVision® provides predictability to cash-flow forecasting 12

Nabors Industries | NA | Streamlining investment and compliance reporting with Treasury Analytics 13

Novartis China | ASIA | Cash pooling and overdrafts make a winning combination 14

SABMiller | EMEA | Multi-currency cash concentration strategy delivers considerable cost savings 16

TAQA | EMEA | Appointing a single global banking partner improves liquidity management 17

Tata | ASIA | TreasuryVision® facilitates improved strategic decision-making 18

Turkish Airlines | EMEA | Target-balancing structure provides visibility and cost benefits 19

Insight. Flexibility. Results.

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The recent financial crisis has heightened awareness of liquidity risk – treasury practitioners

recognize that effective liquidity management is critical to continuing operations and must be

addressed through comprehensive processes, policies and programs.

As a consequence, companies have been focusing on gaining real-time visibility on global positions

and improving cash forecasting processes, as bedrock to liquidity planning. They have been extending

global cash concentration and pooling structures to access worldwide cash and take advantage of

internal offsets. And they have been centralizing dealing and portfolio monitoring to guard against

hidden risk-taking.

Our 13 case studies illustrate some of the tools that companies are implementing to monitor, mobilize

and manage their global liquidity – placing more control into the hands of the treasury organization

to manage risk effectively.

Citi brings worldwide experience and local insights to bear to craft tailored solutions for our clients.

These case studies also demonstrate how Citi acts as a trusted advisor in helping clients evaluate and

re-engineer their treasury management and achieve their objectives.

Call on Citi so that our expertise can work on your behalf.

welcome

Elyse Weiner

Global Head of Liquidityand Investments

Global Transaction Services

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AT&TSingle IBAN account breaks new ground for corporate receivables andenhances daily liquidity managementAT&T, with annual revenues of USD123 billion, is the largest communications holding companyin the world.

The challengeAT&T, a leading communicationsprovider to thousands of multinationalcorporations on six continents, offers itsclients the flexibility to pay for theirservices in a single currency, whetherthey do business with AT&T in onecountry or dozens of them.

This popular, value-added offering, calledConsolidated Statement, provides aneasy, convenient way for companies topay for services provided by AT&T entitiesaround the world without having to issuemultiple payments in multiple currencies.

With this service, a customer choosesto pay his/her bills in a given currency,say euros, and AT&T’s ConsolidatedStatement department converts all of thecustomer’s invoices from various AT&Tsubsidiaries to Euros and issues oneEuro-denominated invoice on top of alllocal invoices.

Historically, once the customer submittedhis/her payment in Euros, AT&T wouldtransfer funds, in the local operatingcurrency, to its subsidiaries for theirportion of the payment, which involvedbuying those currencies to complete thetransaction. What’s more, individualpayments were issued to subsidiariesevery time a customer payment wasreceived, resulting in a multitude of FXforward transactions and funds transferseach month.

In addition, the processing of customers’payments and subsequent fundstransfers was outsourced to a third-partyvendor. This provider handled all back-office processing support and managedthe FX forward contracts and cross-border transactions associated withcountry-specific reconciliations.

The process was inefficient and involvedthousands of FX transactions a month.Plus, because of forward contracts sittingwith AT&T’s third-party provider, it wasdifficult to transfer a customer credit inone country to a debit in another country.

To streamline and improve the processingof Consolidated Statement receivables,reduce the number of FX transactionsand related costs, and better controlFX risk, AT&T’s Treasury departmentproposed bringing everything in-house.

“We wanted to find a way to have ourcustomers, regardless of the currencythey chose, make a payment into a singlemulticurrency account, where we couldhave access to the money. In addition,instead of paying thousands of paymentsa month to subsidiaries, we wanted toaggregate receivables for their servicesand make a single monthly payment tothem,”said Tom Clemens, AT&T’s formerDirector of Financial Analysis.

The solutionTo achieve its goals, AT&T turned to Citi.“We had an existing relationship with Citiand recognized that it possesses theglobal capability to handle the type ofrequest we were making,” Clemens said.

Citi responded with a solution thatis typically reserved for financialinstitutions: a single IBAN redirectionaccount. In fact, AT&T is the firstcorporation to take advantage of asingle IBAN account structure.

AT&T’s account is set up in the UK andis used to receive all ConsolidatedStatement customer payments in allcurrencies. From this depository account,funds are redirected to underlyingsubaccounts denominated in variousforeign currencies.

In addition, the subaccounts arenotionally pooled to a US-dollar accountthat is zero balanced on a daily basis,providing AT&T’s Treasury departmentwith access to the funds until monthlypayments are made to its subsidiaries.

FX translation is executed automaticallyand BAI files are sent directly from Citi toAT&T’s systems, something that has bothautomated and simplified accountreconciliations and provides AT&T withready access to information about itsfunds. Treasury and cash managementstaff can view funds movements andavailability around the clock using theCitiDirect® Online Banking system.

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The resultAT&T’s funds are no longer tied up in avendor’s systems. The company has morecontrol over and visibility into its funds ona daily basis. Manual processes and largevolumes of FX transactions — andassociated fees — have been eliminated.What’s more, all of this was achievedwithout increasing the workload ofAT&T’s cash managers.

“We wanted to bring everything in house,but we also wanted to minimize theimpact on both our FX traders and cashmanagement staff,” Clemens said. “Thesingle IBAN account, combined with thedaily sweeps, has done that. And more.”Referring to the daily, drain-the-poolstructure, Elaine Lou, Director of FinancialAnalysis, adds: “The multi-currencynotional is really key. It provides a cost-effective means of moving and deployingfunds and makes it easier for us tomanage liquidity on a day-to-day basis.Equally important, it frees up funds to paydown commercial paper or put to othercorporate uses.

“Plus, our cash management people canaccess CitiDirect and see how muchmoney they’re going to get that day orhow much money is going to be takenfrom their U.S. account to cover poolneeds,” Clemens added. “It’s a very cleansystem that provides consolidation with aminimal amount of additional work forour FX and cash management team.”

It was also easy to transition customers tothe new payment process, since only oneset of payment instructions was neededfor all customers, regardless of thepayment currency of their choice.

Lastly, another notable payoff frombringing the Consolidated Statementprocess in-house is substantial costsavings.

“The multi-currency notional is reallykey. It provides a cost-effective means ofmoving and deploying funds and makes iteasier for us to manage liquidity on aday-to-day basis.”

Elaine Lou, Director of FinancialAnalysis, AT&T

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EMC CorporationIncreasing the efficiency and flexibility of global funds investmentsEMC, a USD15 billion provider of products and solutions for storing, protecting, optimizing, and leveraginginformation, generates its revenues from operations that span more than 60 countries. Its Treasuryoperation, centralized at its U.S. headquarters, manages and invests nearly USD6 billion in cash on behalfof EMC’s business units.

The challengeTo strengthen its business and tap newmarkets, EMC acquired more than 30growth-oriented companies around theworld over a two-year period. Theseacquisitions created new businessopportunities and contributed to sixstraight years of double-digit revenuegrowth. However, they also created newchallenges related to managing,controlling, and investing cash. Inresponse, the company centralizedoverall treasury and cash managementresponsibilities in the U.S. Then itsTreasury department, working with itsinternational tax department and Citi,implemented an automated targetbalancing solution to mobilize funds fromthe local level to pooling structures in theU.S. and Ireland, centralizing funds inmore than a dozen header accounts invarious currencies. “Thanks to Citi, we’vebeen able to use technology to createa streamlined and efficient cash-consolidation structure that requires littlehuman intervention,” says Daisy Alba,EMC’s Global Cash Manager. Herdepartment, however, did face human-related challenges in meeting time-zoneconstraints when transferring andinvesting cash in euro and sterlingdenominated money market funds andtime deposits. “On a day-to-day basis, wehave a very good idea of how much cashwe have to fund our accounts,” saysLeandro Manavella, Principal TreasuryAnalyst, who manages the cash positionsfor Europe from EMC’s U.S. headquarters.

“But, it was extremely inconvenient tomanage urgent next-day funding needsfrom European accounts while based inthe U.S. because of early morning cut-offs.” Leandro would get up at 6:00 a.m.to review and analyze data andcommunications from Europe to beready to place a position before 7:30 a.m.

The solutionEMC told Citi that future-dated tradingwould solve its problem. Withouthesitating, the Citi team went back to thedrawing board. In just a matter of monthsnew features were added to the system,providing the ability to book transactionsoutside trading hours, including holidaysand weekends. Users gained the ability tostore trade details for money marketfunds and time deposit products andexecute trades based on a future valuedate of up to five days. They were alsogiven the ability to cancel their future-dated trades online, if necessary.Indicative rates are displayed when tradesare entered and real rates are appliedwhen they are executed.

The resultEMC became the first company to pilotthe new solution. Today, the company’sTreasury department is enjoying theadded flexibility and convenience of thenew capabilities. In fact, “flexibility” is aword that Daisy Alba uses a lot todescribe why EMC chose Citi to meet thecompany’s cash management andliquidity needs. Explaining why she askedCiti to enhance its capabilities, rather thanconsider switching providers, Alba said:“We liked the flexibility of Citi’s OnlineInvestments technology, including itsreporting capabilities, and the ability todiversify EMC’s investments. We use thesystem to invest in a number of fundsfrom different institutions.” She alsonoted the flexibility of the Citi team. “It’snot every day that you explain a situationto a provider and have them turn arounda solution that works in such a shortperiod of time,” she added. “The solutionreally was about listening to the voice ofthe customer.” But, most importantly,Alba says that she and her team aredelighted with the benefits of future-dated trading: “It has really added moreefficiency, more flexibility, and more valueto our processes – every day.”

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“It’s not every day that you explain asituation to a provider and have them turnaround a solution that works in such ashort period of time. The solution reallywas about listening to the voice of thecustomer.”

Daisy Alba, Global Cash Manager,EMC Corporation

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GrundfosInterest optimization structure unlocks trapped liquidityGrundfos is a leading pump manufacturer. In Asia, they have presence in 14 countries.

The challengeGrundfos operates a regional treasurycenter in Singapore without a taxbeneficial treasury entity, so liquidity isnot centralized and optimized in thetraditional manner. The company also hadtrapped liquidity in countries such asChina, Korea, Vietnam, the Philippines,and Thailand. Having consolidated its 14Asian bank relationships to just one,Grundfos challenged Citi to optimize theyield from its liquidity management,which consisted of surplus balances heldin-country. Grundfos also wanted to solveproblems relating to intra-monthmismatches of liquidity positions acrossdifferent currencies. The companystipulated that any solution must be lowmaintenance as it has limited resources inits regional treasury operation.

The solutionCiti analyzed Grundfos’ business modeland presented the company with twooptions. Due to its largely decentralizedtreasury management activities,Grundfos declined a structure withdomestic and regional concentration thatwould have required inter-companyposition management. Instead Grundfosopted for an interest optimizationstructure that provided yieldimprovement based on the notionalconversion of all balances held with Citiinto a single currency position. Providingthe company’s overall balance remainsabove a set level, Grundfos receives ahigher rate of interest than would

ordinarily be paid. The enhanced interestpayments are provided directly andautomatically to each participatingaccount, with proper accounting of anyapplicable withholding taxes and in fullcompliance with local regulations.

The resultCiti’s interest optimization solutionwith Grundfos now has more than40 accounts across 10 countriesparticipating. Citi helped Grundfos topresent a strong case to convinceindividual operating entities of theadvantages of adopting the structure.Grundfos can now leverage its pockets ofcash across Asia, improve the interestrate it receives, and lower overdraft rates.“We wanted a solution that leveraged ourregional relationship with Citi to improveinterest income, while concurrentlycompressing interest borrowings,” saysPetra Ho, Regional Treasury Manager atGrundfos. “Also, we needed a solutionthat required minimal maintenance anddocumentation. This solution meets ourimmediate needs perfectly with minimalimplementation efforts.”

“We needed a solution that requiredminimal maintenance and documentation.This solution meets our immediate needsperfectly with minimal implementationefforts.”

Petra Ho, Regional Treasury Manager,Grundfos

Honeywell ChinaThree-tier automated zero-balancing cash pool is a first for ChinaDiversified technology and manufacturing company Honeywell began operating in China in 1935 andcurrently has over 30 legal entities in the country.

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The challengeFollowing significant growth, the cashbalances of Honeywell China — 65% ofwhich were denominated in renminbi andthe remaining 35% in U.S. dollars — hadgrown substantially. “Our U.S. dollar cashbalances were highly decentralized, withbalances being held in various bankaccounts with different banks,” saysLinLin Wu, Regional Treasury Manager atHoneywell China. “This made it difficult toget visibility and control.” Honeywell’sdecentralization resulted largely from theregulatory framework for foreigncurrency bank accounts in China. Usingentrustment loans to manage companycash was ruled out as an option. Instead,the company wanted a U.S. dollar cashpooling arrangement to concentrate thecompany’s cash balances in China, reduceexternal funding costs, and streamline itsbank relationships.

The solutionAfter a rigorous RFP process, Citi wasawarded the mandate. It proposed athree-tier, automated, zero-balancing,account-entrustment loan structure withparticipants’ operational accounts in thelowest tier, loan accounts in the secondtier, and the pool header in the third tier.This structure ensured funds did notcommingle and interest allocation couldbe simplified. The solution was the first ofits kind in China. Implementation wascompleted two months after SAFE (StateAdministration of Foreign Exchange)approval was granted. The speed and

success of implementation was helped byHoneywell’s treasury efforts. Regularregional meetings were held with localbusiness units to ensure they understoodtheir roles, while at headquarters, CFOs ofHoneywell’s various businesses were keptinformed about progress.

The resultSince implementation, Honeywell Chinahas enjoyed higher investment returns,a reduction in bank fees, increasedoperational efficiencies, and enhancedregulatory compliance. As well asproviding competitive interest rates(pegged against the U.S. dollar Liborrate), the solution has given HoneywellChina the scalability required for easyinclusion of new participants into thepool, in particular Honeywell China’s jointventures (JVs). “The cash pool tracks theaggregated amount contributed by eachparticipating JV and also limits thewithdrawal amount of each participatingJV to the total of contributions it hasmade. We have already included one JVinto the cash pool and we certainly hopeto include more in the future,” says Wu.

InterContinentalStreamlining short-term investments for the global hotel groupInterContinental Hotels Group manages more than 590,000 rooms in 100+ countries.

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The challengeHaving moved from an ownership modelto managing and franchising hotels,InterContinental Hotels Group (IHG) hasfocused increasingly on optimizingworking capital, from ensuring efficientcollection of revenues from franchiseesto streamlining short-term investmentmanagement processes. The desire toreward participants in its financing roundsmeans IHG restricts its short-terminvestment policy to relationship lenders.But investing in these providers’ moneymarket funds directly proved very manualand time-consuming for IHG’s smalldealing team. Consolidating statementsfrom different fund managers was afurther burden on resources.

The solutionDuring a relationship review meetingwith Citi, the client manager introducedCitibank® Online Investments, an easy-to-use module of the bank’s CitiDirect®

Online Banking platform that enablesclients to invest in a wide range offinancial institutions’ money market fundsand time deposits. Citi’s investment portalcan automatically settle transactions toclient accounts held in 27 differentcountries and offers investments in 18currencies, including several types ofdirect investments and over 150 moneymarket funds in the U.S. and offshore. Itfurther supports the streamlining ofshort-term investments by allowingclients such as IHG to add new fundmanagers without needing to complete

additional documentation. Becauseof their interest in accessing multiplesuppliers’ funds from a single platform,IHG’s dealing team reviewed CitibankOnline Investments’ capabilities via a CitiOnline Academy session, then completedthe necessary documentation and begantrading within a week.

The resultIHG’s dealing team now has substantiallymore time to focus on making short-terminvestment decisions, rather than dealingwith the administration of its choices.Moreover, IHG has streamlined itsreporting processes and uses CitibankOnline Investments to view yieldinformation, dividend accruals and exportreports on holdings. “Partly because wewere already very familiar with CitiDirect,we soon benefitted from Citibank OnlineInvestments’ ease of use. The ability tobook all deals on a single platformhas made our investment processessignificantly faster,” says David Daniels,Assistant Treasurer, IHG. “A streamlinedapproach to investment that enables usto deal with multiple relationship banksquickly and effectively supports thegroup’s overall management philosophyof strong relationships and cost efficientprocesses.”

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LenovoIntegrating global payments for simplicity and efficiencyLenovo is dedicated to building exceptionally engineered personal computers. Formed by Lenovo Group’sacquisition of the former IBM Personal Computing Division, the company develops, manufactures andmarkets reliable, high-quality, secure, and easy-to-use technology products and services worldwide.

The challengeFollowing its acquisition of IBM’s PCbusiness, Lenovo worked withCiti to deliver a cash and liquiditymanagement structure for 66 countriesin just four months. The challenge wascompounded by the fact that Lenovohad no treasury staff outside China, nosystems and no banking relationshipsat this time. “While the situation was achallenge, it was also an amazingopportunity,” says Damian Glendinning,Vice President and Treasurer at Lenovo.“We got to design a cash and liquiditymanagement structure on a blank pieceof paper.” The centralized structurecreated in those four months utilizeshost-to-host connectivity to Citi® FileXchange (CFX) payment channel. Inrecent years, the company has soughtCiti’s help in integrating local currency,in-country payments as new countriescontinue to be added to its globalSAP ERP system.

The solutionIn order to further enhance its liquiditymanagement, Lenovo has progressivelyimplemented its country operations inits SAP system while integrating andautomating in-country vendor paymentsto Citi. The first phase of integrationbegan with Canada. A second phaseadded Australia, Hong Kong, Japan,Korea, Malaysia, Mexico, New Zealand,Singapore, Taiwan, and Thailand. The nextphase, integrated Poland and Mexico intoCFX. Citi coordinated the global

implementation using a dedicatedregional implementation manager, andlocal Citi solution specialists whoaddressed country-specific challengessuch as the complexities of the Polishclearing system and provided Lenovo asingle point of contact in Singapore forglobal integration onto SAP. Citi alsoprovided Lenovo with in-country vendorpayments implementation.

The resultLenovo’s strikingly simple and almostuniform model is based on a centralizedglobal treasury in Singapore. It has beenfurther improved in recent years byleveraging the operational efficiency ofintegrating countries into its SAP systemand automated integration to Citi for in-country vendor payments. By partneringwith Citi and standardizing processesglobally, Lenovo is continually strivingto improve its efficiency. The treasury’sunique “against-the-sun” structure —where surplus funds are sent toSingapore at a rate determined by thescale of sales in a given country —continues to effectively meet Lenovo’sliquidity needs. The structure requires nolocal funding as it is based on the sale ofgoods. Any funding element is on tradeterms and therefore less affected byexchange controls.

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MACHTreasuryVision® provides predictability to cash-flow forecastingLuxembourg-headquartered MACH provides a wide range of solutions, outsourcing and consultancyservices to the fixed-line and mobile telecom industry.

The challengeA private equity firm acquired MACH and,as with most private equity transactions,funded much of the acquisition coststhrough debt. Consequently, the companyhad debt repayments on a scheduledbasis. As conditions in the telecomsindustry became tougher, MACHrecognized that it needed to increasecash visibility in its central treasury in theUK. “MACH had multiple banks worldwideas a result of a series of acquisitions,”explains Shawn McCarthy, Head ofTreasury at MACH in London. “Overall,the company had 20 banks, with 80 bankaccounts in nine currencies, with euros asour functional currency. This combinationof factors meant we had little visibility ofour operating companies’ ongoing cashpositions.” McCarthy was familiar withTreasuryVision® from a previous positionand realized that it could offer MACH theflexibility and visibility it required. “Wedidn’t need a comprehensive treasurymanagement system,” she says. “Wesimply wanted balance and cashmanagement reporting capabilities. Inaddition, we wanted to introduce acash flow forecasting discipline to ouroperating companies to enable them tomore accurately forecast their futurecash positions and needs.”

The solutionTreasuryVision aggregates bank accountbalances, statements, and transactionsfrom Citi and third-party banks on anautomated daily basis. Once aggregated,TreasuryVision offers MACH visibility intoits data and allows it to customize howdata is presented and used. A cash-flowforecasting service was provided throughthe portal, which allowed MACH operatingentities throughout the world to detailtheir future cash needs. MACH’s treasurythen used this data to better predictthe group’s future cash and liquidityrequirements.

The resultCiti was formally appointed to the projectjust two months before MACH’s tight end-of-year deadline for the implementation ofTreasuryVision across MACH’s accounts.Of MACH’s 20 most important accountsfor cash management purposes, 18 werelinked to TreasuryVision by the end of theyear and made a significant contributionto the company’s year-end reporting. Asan Internet-based system, there was noinstallation. Implementation simplyrequired MACH’s banks to send dailySWIFT messages to Citi to enable thesolution.

By Q2 the following year, just six of MACH’s80 bank accounts were not incorporatedinto TreasuryVision. “TreasuryVisionhas changed the way we operate,” saysMcCarthy. “We now have the ability to see

accounts on a daily basis converted intoour functional currency – either at marketrates or at a rate we upload into thesystem to match our accounting rates,for example.” As an automated service,TreasuryVision saves considerable timeand also increases security by storing datain a data warehouse where it is notsusceptible to accidental alteration.

“TreasuryVision has changed the way weoperate. We now have the ability to seeaccounts on a daily basis converted intoour functional currency.”Shawn McCarthy, Head of Treasury,MACH, London

Nabors IndustriesStreamlining investment and compliance reporting with Treasury AnalyticsNabors, one of the world’s largest drilling contractors, provides on-shore and offshore drilling in themajor oil and gas producing regions of North, Central and South America, Africa, and the Middle East. Itgenerates more than USD5 billion in annual revenues from operations that span more than 30 countries.

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The challengeNabors, long perceived as a NorthAmerican company, is actually a majormultinational enterprise whose drillingoperations have mushroomed over thepast decade in a high-stakes race to tapnew energy reserves around the world.Nabors chose Citi as its global bankingand consolidation partner to helpcentralize treasury operations andstreamline multicurrency paymentsacross the 33 countries in which it doesbusiness. Seeing even more opportunityto streamline and automate, Naborsturned to Citi to simplify another criticalresponsibility: fiduciary and compliancereporting. Its Treasury and Accountingdepartments wanted to eliminate therecurring headaches triggered by themanual information gathering and reportbuilding that accompanied managing thecompany’s cash assets and investments.“We were faced with what seemed like anunlimited demand for reports, but hadlimited resources to gather data frommultiple sources and in various formatsto meet the demands,” said DeanCastleberry, Nabors Assistant Treasurer.These reporting responsibilities covereverything from individual requests fromupper management to short-terminvestment forecasts for month-endclosings to 10K and 10Q disclosures and awhole lot in between.

The solutionFortunately, Castleberry knew that aprescription for relief was just a phonecall away. He had seen a demonstration ofthe Treasury Analytics module ofCitiDirect® for Securities and knew themoment he saw it that it would make lifeeasier for him and his counterparts inaccounting. Treasury Analytics is acomprehensive web-based custody andcorporate cash solution that aggregatesinvestment-related information andpresents it from four perspectives:accounting, compliance, risk, andperformance. What’s more, it’s easy toimplement. Once Nabors decided to useTreasury Analytics, it took less than aweek to get it up and running. Now,reports are generated in a matter ofminutes, with a few keystrokes andmouse clicks, instead of hours.

“The beauty of Treasury Analytics isthat two departments gained criticalfunctionality from one system,” saysCastleberry. “The ability to call up oneconcise, composite report of totalholdings and to enhance reporting andtransparency to upper management isinvaluable to the Treasury function,” headds, “while the ability to generatefinancial statements and drill into securitydetails is critical to the Accountingfunction.”

The resultAutomating reporting has saved Nabors’Accounting and Treasury departmentsmore than 70 man hours a quarter.Equally important, it has freed upvaluable personnel to work on morestrategic and value added activities.“There have been both tangible andintangible benefits,” Castelberry reports.“It’s hard to attach a value to having theinformation we need when we need it orreporting capabilities at our fingertips.Bottom line, Citi and Treasury Analyticshave transformed the way we meet ourmanagement and compliance reportingresponsibilities. I only wish we had done itsooner.”

“It’s hard to attach a value to having theinformation we need when we need it orreporting capabilities at our fingertips.Bottom line, Citi and Treasury Analyticshave transformed the way we meet ourmanagement and compliance reportingresponsibilities. I only wish we had doneit sooner.”

Dean Castleberry, Nabors AssistantTreasurer

Novartis ChinaCash pooling and overdrafts make a winning combinationNovartis is a global leader in innovative pharmaceuticals, vaccines, and consumer health products.Headquartered in Basel, Switzerland, the company entered the Chinese market in 1987, and has enjoyedrapid growth since then.

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The challengeRapid growth had created a number ofchallenges for Novartis China’s treasuryfunction, chief of which was to manage itsworking capital more efficiently. Thecompany’s strategy was to keep as littlecash as possible in bank accounts, relyingmainly on its cash pool and temporaryoverdrafts to meet short-term financingneeds. Bank loans were kept to aminimum.

“Some companies borrow more than isnecessary for their immediate needs, andkeep the cash idle in their account, ormake structured deposits, in case theyneed funding,” says Sherwin Zhang,Country Treasurer of Novartis China.“Like a bear that eats a lot in the autumnto prepare for hibernating in the winter,this is a practical solution if you thinkcredit is going to be harder to obtain.However, we won’t adopt such a strategyas it reduces cash efficiency dramaticallyand is against our treasury guidelines.”The challenge for Mr. Zhang was tofurther reduce the amount of cash leftidle in its bank accounts, lower its relianceon external borrowing and negotiatemore favorable overdraft terms. Heregards overdrafts, which can be paid offquickly, as much more efficient thanloans, because the latter can result inspare cash sitting in deposit accountsearning a lower rate of interest than thecompany is paying on the loans. Andalthough inter-company loans charge lessinterest than bank loans, they are more

complicated to arrange and are on fixedtenors, which makes it difficult to matchthem closely to funding needs.

The solutionThe answer was to set up an integratedcash management system, based on adomestic zero balancing cash pool, onlinebanking, and renegotiated overdraftfacilities — all provided by Citi, following ahotly contested tender process. NovartisChina now sweeps spare cash into oneaccount where it can be deployed moreefficiently. Knowing exactly how muchcash is in the system, how much isforecast to be in the system, and whenbank loans will be needed has reducedthe company’s external borrowingrequirements and improved cashefficiency. “We selected Citi as our mainbank because it has the most mature andstable cash management system,” saysMr. Zhang. “With the flexibility of cashpooling, we rely more on our forecasting,enabling us to keep cash balances low.We still use bank loans, though less so.Although they are less flexible thanoverdrafts and can lead to spare cashsitting idle, they are cheaper. The keything is to get the balance right betweenloans and overdrafts.”

The resultNovartis China now has less cash sittingidle in accounts. It has a reduced require-ment for bank or inter-company loansbecause it has increased its use of itscash pool and overdrafts. The solutionwas well timed, as it helped the companydeal with the global credit crunch that hitChina in 2008. It initially involved justfour subsidiary companies, but in 2008and 2009 the rest were added, so thepool now includes all nine subsidiaries.Today, Novartis China is still reaping thebenefits of low cash balances and over-drafts for temporary funding as andwhen needed. Ultimately, it was becauseof partnerships like this that Citi was rec-ognized as the best cash managementbank in Asia in the Asia money pollsand by The Asset. Today, Citi managesmore than 160 multi-entity cash poolingstructures in China, providing a highdegree of certainty from our automatedcapabilities.

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“We selected Citi as our main bank because it has the most mature and stable cashmanagement system. With the flexibility of cash pooling, we rely more on our forecasting,enabling us to keep cash balances low. We still use bank loans, though less so. ”

Sherwin Zhang, Country Treasurer, Novartis China

SABMillerMulti-currency cash concentration strategy delivers considerable cost savingsSABMiller is one of the world’s largest brewing companies with a portfolio of 200 beer brands.

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The challengeWith brewing interests and majordistribution agreements in over 60countries — in both cash generativedeveloped and fast-growing developingmarkets such as China and Russia —SABMiller’s liquidity managementstructure is necessarily complex.Moreover, having grown largely byacquisition, SABMiller’s operational andliquidity management structures arehighly irregular. “We wanted to addressthe problems posed by our structure andreduce working capital requirementswhile ensuring sufficient liquidity for ourbusiness units,” explains Giles Newell,Deputy Treasurer at SABMiller, based inthe UK. In addition, SABMiller wanted toalign its treasury strategy with its broaderfinance strategy and achieve the holytrinity of liquidity management: costreduction, process standardization, andrisk reduction. The company also aimedto establish an infrastructure for futuretreasury projects, such as inter-companynetting and foreign exchangecentralization.

The solutionHaving appointed Citi on the basis of itsgeographic coverage, capability for multi-currency cash pooling, and competitivepricing, SABMiller embarked on phaseone of the multi-currency cash poolingproject, covering all of Europe (exceptRussia) and the USA — nine currencies,10 business units, and 10 countries. Futurephases covering Latin America, Africa,and Asia are being explored. Citi’ssolution to SABMiller’s challenges was apragmatic mix of cash concentration andnotional cash pooling, where funds couldstay in the name of the business unit — animportant consideration in a decentralizedcompany. Instead of local business unitsborrowing against short-term deficits anddepositing short-term surplus cash withlocal banks, they would be able to borrowor deposit with the group treasury.

The result“Implementation was tricky. Thecomplexities of achieving buy-in fromlocal businesses cannot be underestimated,but it was worth it,” says Giles Newell.“SABMiller has greater clarity in itsliquidity management and centralizedbalances mean improved rates fordeposits or the ability to repay externalborrowings. By netting balances, we avoidpaying overdraft and deposit margins.Overall, the savings are considerable.”

TAQAAppointing a single global banking partner improves liquidity managementAbu Dhabi National Energy Company (TAQA) is a leading United Arab Emirates company and has aportfolio of businesses in the Middle East, North America, Europe, and India in upstream oil and gas,pipelines, gas storage, power generation, and water desalination.

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The challengeRapid expansion abroad created newdemands on TAQA’s treasury team:the treasury organization wasdecentralized, which caused difficultyin maintaining clear visibility of funds;multiple new systems and processesneeded to be built to support thecompany’s larger multinationaloperations; and significant new injectionsof capital were needed to reduce leverageand support growth. It was for thesereasons that TAQA undertook arestructuring of its treasurymanagement function.

The solutionTAQA appointed PwC to help set upa Global Treasury Center to manageits funds flow in all countries andcurrencies. The company selectedAmsterdam as the center to house itsglobal treasury operations due to anumber of favorable factors, one of whichwas better time-zone coverage for itsworldwide operations. The GlobalTreasury Center required a single globalbanking service provider. This mandatewas awarded to Citi’s Global TransactionServices. The arrangement, involves theprovision by Citi of a number of best-practice and cutting-edge solutions,including:

• Domestic cash management servicesfor 30 legal entities in North America,Europe, and the Middle East

• A global liquidity structure with amulti-currency notional pool in London

• Daily sweeping of cash balances

• Host-to-host payment and reconciliationconnectivity to TAQA’s SunGard treasuryworkstation

• CitiDirect® Online Banking platform

The resultAs the program rolls out, TAQA will havea single global banking partner to helpit conduct its cash management andliquidity operations effectively, which is animportant element towards achievingsuccess in its future businesses. DougFraser, Chief Financial Officer of TAQA,says: “By choosing Citi we are gainingaccess to its high-caliber expertise, globalfootprint and local knowledge. Citi wasable to provide us with a solution that wasflexible and matched the needs of ourcompany.”

“By choosing Citi we are gaining access toits high-caliber expertise, global footprintand local knowledge. Citi was able toprovide us with a solution that was flexibleand matched the needs of our company.”

Doug Fraser, Chief Financial Officer,TAQA

Tata CommunicationsTreasuryVision® facilitates improved strategic decision-makingTata Communications is a leading global provider of a new world of communications. With a leadershipposition in emerging markets, the company leverages its advanced solutions capabilities and domainexpertise across its global and pan-Indian network to deliver managed solutions to multi-nationalenterprises, service providers, and Indian consumers.

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The challengeTata Communications had made anumber of acquisitions over a four-yearperiod and had consequently gainednumerous banking partners. As a result,the company had more than 40 legalentities across 20 countries and 120accounts with 10 banks spread over 20countries. In order to gain an overview ofthe company’s positions, the company’streasury team had to manuallyconsolidate account balances — resultingin delays and potentially redundantinformation. This limited visibilityhampered the company from optimizingits global resources and gave it limitedinsight into its liquidity positions, bankexposures, and country and currencyexposures. The company wanted onlineaccess to consolidated informationshowing its treasury positions acrossdifferent entities, with different banks,and in different countries and currencies.The company also wanted to increase thecentralization of its treasury operationand reduce its dependence on localteams for timely reporting of liquiditypositions.

The solutionTata Communications ultimately choseCiti’s TreasuryVision® portal to achieveregional and global financial visibility on adaily basis. TreasuryVision facilitates theaggregation of financial informationacross currencies, countries, and bankaccounts, increasing visibility and

enabling better utilization of funds.TreasuryVision addresses the company’srequirements by giving it the ability tomonitor cash positions and accesstransactional level information onaccounts, reducing its administrativecosts and time. It helps the companymodulate its currency and bankexposures by appropriately managingfunds. The company has also reduced theoperational risk associated with manualdata compilation.

The resultCiti initially implemented TreasuryVisionon Tata Communications Citi accountsbefore expanding its scope to includeaccounts in 20 countries across EMEAand the U.S. Finally, all in-countryaccounts — where visibility had beenless of a problem — were added to thesolution. With the exception of somedelays caused by third-party banks inrelation to SWIFT messages,implementation went smoothly. TataCommunications has gained visibility ofits balances across its numerous entitiesaround the world, which facilitatedimproved strategic decision-making.Moreover, TreasuryVision has improvedefficiency by allowing treasury staffformerly occupied with manualconsolidation of positions to focus onvalue-added tasks. In the words of AroonDasappa from Tata Communications’Finance division: “TreasuryVision is a

perfect tool for a centralized treasury set-up to handle large-scale bankingoperations with ease.”

“TreasuryVision is a perfect tool for acentralized treasury set-up to handle large-scale banking operations with ease.”

Aroon Dasappa, Vice President Finance,Tata Communications

Turkish AirlinesTarget-balancing structure provides visibility and cost benefitsTurkish Airlines flies 20 million passengers annually to 138 cities in 69 countries around the world.

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The challengeAfter a period of ongoing businessgrowth, cash flow visibility at TurkishAirlines’ head-office treasury departmentwas severely restricted. The firm held 250bank accounts with 91 banks in 69countries and commonly used manualprocesses to transfer cash between its107 offices. Cash reporting relied heavilyon phone communication and faxedspreadsheets. But following its stocklisting, a company-wide cost control driveled Turkish Airlines to issue a tender forits global cash management business,aimed at improving payment processefficiency, increasing visibility throughreal-time electronic reporting andreducing transaction charge.

The solutionCiti was awarded the tender on the basisof its matching geographic footprint andits combination of global and regionalcapabilities and expertise. To improve theefficiency of Turkish Airlines’ cash flows,Citi began a phased implementation of aregional cross-border target balancingstructure that would sweep the vastmajority of the firm’s balances into CitiLondon. Because most of Turkish Airlines’sales were euro-denominated, these werecentralized in phase one, with eurobalances swept automatically from Citior third-party accounts. In phase two,selected additional currencies, includingU.S. dollars, were introduced to thestructure. Phase three saw therationalization of currency balances

that could not participate for legal orother practical reasons. In addition toimplementing CitiDirect® – Citi’selectronic banking system – to eliminatemanual payment initiation, TurkishAirlines also became the first Turkishcustomer to install Citi’s transaction flowanalysis tool, TreasuryVision®, whichprovides real-time balance information onaccounts across the world in customizedformats. At the client’s specific request,the new structure is supported on a 24/7basis by a customer service team basedin Istanbul in coordination with staffacross Citi’s global branch network.

The resultTurkish Airlines has benefited from astreamlined account structure andreduced banking costs, an eliminationof manual payment processes, andsignificantly enhanced visibility andcontrol over its cash flows. And althoughmany of the benefits accrued frombeing the first Turkish multinational toimplement a regional cross-bordertarget balancing structure, balances incurrencies that remained outside thestructure have also achieved improvedinvestment rates.

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© 2010 Citibank, N.A. All rights reserved. Arc Design, Citi and Arc Design and Citi Never Sleeps are trademarksand service marks of Citigroup Inc., used and registered throughout the world.

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Liquidity management takes more than knowing where yourcash is. It’s also about having the right amount, in the rightplace, at the right time — and making it work harder throughout.When you partner with Citi, you can achieve this and more. Ourglobal presence, on-the-ground experts and advanced solutionshelp you minimize idle cash, reduce borrowing and optimizeyields, while controlling risks — wherever you do business.

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