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GE Cash Management Strategy and SWIFT MaCUG’s

GE Treasury

January 24, 2006

GE Cash Management and SWIFT MaCUG’s

™ Introduction

™ GE Treasury and Cash Management

™ Major Operation Services Platforms

™ GE Businesses and Payment Requirements

™ GE Payment Systems – Past and Today

™ GE SWIFT Project - Strategy, Scope & Status

™ GE Payment Systems – Tomorrow

™ Wrap Up

GE Treasury and Cash Management

Strong Centralized Treasury

Responsible for:

™ Corporate Policy

™ Selection of Banks and Banking Services

™ All Bank Account Administration (Business Delegation of Authority)

™ Provide Funds Transfer and Banking Software

™ Manage Cash Pools, Sweep Funds and Fund Disbursement Accounts

™ Execute all FX, Debt and Derivatives

™ Treasury Risk, Compliance, Legal, Corporate Reporting and Systems

™ Support of Business Functions, Acquisitions and Divestitures

™ Funding of GE and GE Businesses

Cash Pooling – Central Philosophy

9 All Cash Belongs To Corporate

9 Where Possible, All Cash Should Be Part Of A Cash Pool 9 Cash Not In A Cash Pool Must Be Managed By Treasury

Over 100 Cash Pools in 27 Countries Coming Soon …

Brazil Canada Mexico

United States

The Americas

Austria Italy Belgium Norway Denmark Portugal Finland Spain

France Sweden

Germany Switzerland Hungary The Netherlands

Ireland UK

Pan-Europe USD

Europe

Australia

China (RMB & USD) Hong Kong

Singapore New Zealand Japan

Thailand

Asia/Pacific

Turkey UAE

US Legal Entity (Cross-Border Europe)

UK – (Global Consumer Finance)

Global Locations

Treasury Centers

¾ Americas – Stamford, CT

¾ Europe – Delhi

¾ Asia – Tokyo

FX/Derivatives

¾ Dublin

Regional Offices

¾ Mexico City (Mexico)

¾ Sao Paulo (Latin America)

¾ Shanghai (China)

¾ Delhi (India)

¾ Paris (European Funding)

Major Operation Services Platforms

Tool Features Benefits

•Bank account database

•On-line workflow

•Business Æ Treasury Æ Bank

•Controllership

•Compliance with OFAC, KYC

•Productivity

•On-line cash management

•Funds transfers

•Balance reporting

•Forecasts

•Standardization across GE

•Cash positioning window to business activity

•Urgent & Non-Urgent Payments

•Potential for FX, vanilla swap and collateral messaging

•Single, highly secure network

•Somewhat standardized message formats

•Real-time and Batch OFAC / Compliance checking

•Compliance

•28 US and other national / super- national compliance lists

•On-Line FX trade requests

•FAS 133 wizard

•Small ticket process

•Bid/Offer spread reduction

•Settlement risk reduction

•Interface to Bank Trading System

Major Operation Services Platforms

Tool Features Benefits

•Intercompany sub ledger

•Loan creation and maintenance

• (Trema)

•Interest & fees calculation

•Automated journal entries

•Bank fee processing

•Analysis and allocation

•Fee recoveries > $1 MM annually

•Handle International Bank Compensation

•FX trading system

•Commodities trading

•Interfaces to TRS, GE Web Cash and FXALL

•Debt & Derivatives system •Centralization of Debt &

Derivatives

•Interfaces to GE Web Cash

•Web Portal used by

counterparties to confirm rate resets, interest & swap payments

•GE Innovation – STP helps Middle Office cope with growing volumes (Alexander Hamilton Award)

BRM

GE Web Cash - Payment System

Banks

Banks &

Brokers

GE Businesses and Payment Requirements

¾ GE Industrial Business

Large Volume AP Payments Some Wires

Large Volume FX Payments

¾ GE Financial Services

¾ NBC Universal

Speed of Implementation

¾ GE Treasury

¾ General

GE Web Cash Metrics - Today

GE Banks and Accounts

¾ Banks 200

¾ Accounts 17,000

Treasury Processing – GE Web Cash

¾ Banks Reporting 133

¾ Accounts Reporting Daily 9,600

¾ Monthly Urgent Payments

Number of 78,000 / 330 Billion USD

¾ Monthly Non-Urgents Payments

Number of 40,000 / 4.5 Billion USD

¾ Active Business Units 300

¾ Active Business Users 2,500

GE Payment Systems - Past

™ 2 Central Systems

™ Outdated Technology (Desktop without Central Database)

™ Met US and European Treasury Needs

™ Met US and 50% of European Businesses Requirements

™ Extremely High Maintenance / Proprietary Technologies

™ Operated at Capacity

GE Payment Systems - Today

9 GE Web Cash - Centralized Web Based System 9 Integrated Centralized Support Teams

24 Hour Production Support - Stamford, New Delhi &

Tokyo

24 Hour Technical Support - Mexico, Spain & India 9 Standardized Bank Connectivity (SWIFT)

9 Enhanced Functionality to Support GE Businesses

9 Greater Reliability and Increased Straight-Thru-Processing 9 Reduced Technical Support / Increased Value Added

Support

9 100% Systems Redundancy / Regional Operational

Bank Connectivity - Past

Primary Technology - EDI Mapping Software & VANs

™ Outbound - PAYMUL, PAYORD, PAYEXT & 820

™ Inbound – FINSTA, BANSTA, CONTRL, 821, 824, 997 & AUTACK

™ EDI VAN’s & Leased Lines w/ Matched Transmission Hardware

™ Direct Send to Banks and Via Conduit Bank

Issues

™ Different Standards Even for Same Message Types (Banks Customize)

™ Lack of Bank Responses (Confirms & Rejects)

™ Delays in Transmission / Processing

™ Security / Authorization not Standardized or Non-Existent

™ Some Banks Manually Process Messages (Not STP)

™ Lack of Consistency

™ Fragile High Maintenance Environment

Bank Connectivity – Legacy Systems

Harbinger EDI Platform

ISDN Line SMTP Connection Dedicated Lease Line

X 400 Van Link

Banks Business

Applications Treasury Applications

Banks Dial Up

Business Severs

Web Browsers Banks

Internet

Banks Workstations

Dial Up

GE SWIFT Project Strategy

¾ Move Existing Bank Messaging to SWIFT

¾ Add New Bank Capability in Parallel to Migrations

¾ Standardize SWIFTNet Fin messages for Urgent Wires:

MT101, MT103, MT900, MT910, MT942, MT199 &

MT195

¾ FileAct for Bulk Payments

¾ Complete Messaging from Banks:

“Confirms” on Execution

“Rejects” on Cancels & Return of Funds

¾ Focus on Bank STP (Straight Thru Processing)

GE SWIFT Project Scope

9 32 Banking Groups / 100 Banks (Urgents)

9 20 banks identified for SWIFT FileAct (Non-Urgents) 9 Add Direct Debits

9 Expand Asia, Middle East, Eastern Europe and Latin America

9 FX, Swap and Collateral Messaging with Counterparties

GE SWIFT Project Status (January 15, 2006)

¾ SWIFT Fin (Urgents / Wires) – 72,000 per Month

¾ 30 Banks Live on SWIFTNet Fin

¾ 6 Banks in SWIFTNet Fin User Acceptance Testing

¾ 17 Banks in SWIFTNet Fin Development

¾ 2 Banks Live on FileAct

¾ 5 Banks in FileAct Development

SWIFT / Bank Connectivity

Intermediary Bank

2^nd Tier Banks Business Systems

1^st Tier Banks

Two Connectivity Options

¾ 1^st Tier Banks – Large Volume Partner Banks Urgents and/or Non-Urgents

¾ 2^nd Tier Banks – Low Volume Partner Banks and/or Banks without CUGs

Urgents only

GE Payment Systems - Future

™ Expand Banks on SWIFT CUG

™ Expand Direct Debits and Non-Urgent Payments Capabilities

™ Improve STP and Reduce Touch Points

™ Add Multi-Language Support

™ Add In-House Banking and Payment Factory

™ Add Smart Screens (Intelligent Payment Entry)

GE SWIFT CUG ISSUES

™ Not enough standardization with SWIFTNet Fin messages Banks have to much latitude in usage of fields / tags and message types

™ No adoption to date of SWIFT / TWIST XML standard

™ Many banks have not accepted/implemented SWIFT CUG

™ Many more banks have not accepted/implemented FileAct

™ Some banks initially did a terrible job of implementation

™ Not many corporations can undertake this large initial implementation efforts

Other Hot Cash Management Topics

™ KYC (Know Your Customer) – Balance/Transaction Reporting must carry full remitting party information

™ Application of Cash – Balance/Transaction Reporting must be able to carry large amounts of Payment Details

™ IBC (International Bank Compensation) – Electronic Presentation of Bank Invoice

™ In Europe IBANs and the Single European Payment Area (SEPA) initiative

™ The TWIST/SWIFT XML Payment Standard

用語解説

GE Cash Management Strategy and SWIFT MA-CUG’s GE Treasury January 24, 2006

用語 ^スライド

ページ 日本語解説

Cash Pool 4 通貨別又は複数通貨にまたがってグループ会社の決済預金口座残高の凸凹を調整し、仮想的又は特

定の時点でバランスを移し替えて総計の残高に対して金利の計算をする銀行のサービス。 グループ 会社間の貸借になるため対象通貨・国によっては規制の対象になる場合もある。また、２国間の租税 条約に関連し源泉税の問題が発生する場合もある。

OFAC 6 Office of Foreign Asset Controlの略。 米国財務省の部門で、国家の安全保障を脅かす可能性の あるテロなどの活動に関し、米国内でその活動資金を凍結する権限を持つ。

KYC 6 Know Your Customerの略。BIS（国際決済銀行）が定めた「銀行の顧客確認」に関する基準。 マネ ーロンダリング防止のほか、法的、評判リスクなども含めて、銀行の健全性の観点から重要な要素とさ れている。ひいては日本を含んだ先進国の市場慣行を定める会（日本では外為委員会）などでもKYC の重要性を強調している。

Wire 9 米国では、高額のValue Date（当日利用可能な資金の入金予定日）を守らなければならない送金のこ とを、主にWireと呼ぶ。

ACH 9 Automated Clearing Houseの略。 クリアリングハウスで決済される小口大量送金のことを指す。

Straight- Through- Processing

12 STP。Straight Through Processingの略。 人手を介さず、（決済）取引をend-to-endでコンピュータ ー処理により自動化することにより、安全性と効率を高めること。

Redundancy 12 直訳すれば冗長性だが、システムの対障害性を高めるために、一つの系統に頼らない設計を施した構

築デザイン。

EDI 13 Electronic Data Interchangeの略。国連のUN/EDIFACTにて各業務に特化したスタンダード（

PAYMULなど）が定められている。

X.400 14 国際電気通信連合の電気通信標準化部門（ITU-T）の定めるメッセージハンドリングシステムの規 定集。 現実的には、現代のe-mailの前身ともいえる。

SMTP 14 Simple Mail Transfer Protocolの略。 いわゆるインターネット・メールのデータの送信・転送の 手順。

FileAct 15 SWIFTが提供するSWIFTNet環境でのファイル転送の仕組み。安全性確保のためFTPなどの通

常の手順とは根本的に異なっている。

Bulk

Payment 15 給料・総合振込・口座引落しなど、小口・大量の送金を言う。（ACHペイメントとほぼ同じ意味）

SWIFT CUG 19 SWIFTが提供する、電子的コミュニケーションにかかわるClosed User Groupという名の論理的 な環境。 一般に事業法人はSWIFTメンバーが管理する（Member Administered）CUGに間接 参加する形態をとる。

TWIST 20 Treasury Workstation Integration Standard Teamの略。ロンドンベースの標準化団体であり

、財務取引にかかわるワークフローの分析や決済の標準化を目指す団体。 SWIFTの標準化の 動きと連携をとっている。

IBC 21 International Bank Compensation. GE, International Paper Co, Lucent Technology, Pfizer, UPSなど 北米の多国籍企業が、内外の銀行に対して、決済手数料、金利計算などの計算書を電子的な手 段で出すことを求めているイニシアティブ。 FormatとしてANSI822を推奨している。手数料管理の 効率化を目指している。米銀では約９０行がANSI822準拠の計算書を発行。

IBAN 21 International Bank Account Number ECBS(European Committee for banking

standards)が定めた欧州域内のEUR決済のための送金に必須な番号。 IBANにより、銀行、支 店、口座番号が一意に決まる。

SEPA 21 Single European Payment Area EUが進める、EURO決済圏の更なる統合の対象地域