TOM DUGGAN: Our first topic of this year'saward is the liquidity management category. This year our sponsoris Northern Trust and please to allow me to introduce JohnKonstantos with Northern Trust.

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John has over 15 years of experience in financial services andcurrently is the senior relationship manager for the balance sheetand operations asset group, which is part of Northern Trust's assetmanagement business focus on corporate and institutional clients.John is responsible for the overall sales and servicing strategy inthe East region.

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John joined Northern Trust in 2001 as a senior portfolio managerin the bank's corporate and institutional group coming from CorusBank in Chicago. In 2003, John moved to the role of senior bankercovering the East Coast in the corporate and institutional groupwith primary responsibilities of overseeing the credit functions,cross-selling the bank's products and prospecting for newclients.

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John has earned his bachelor of science in finance from DePaulUniversity in Chicago and also has a Series 7 and 63certifications. So I'd like to turn it over to John.

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JOHN KONSTANTOS: Thanks, Tom. Iappreciate that. Well, I think it's got to be a good sign for usthat Lewis [Booth] from Ford was able to fly into New York asopposed to driving a Ford Focus. But I'm really happy to be able tomoderate this liquidity panel. This is my second year doing that.These guys are definitely accomplished professionals. I'd be theirgroupie any day, doing the whole rock star montage thing.

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I do work at Northern Trust Global Investments. We are a proudsponsor of AHA for years now. While there's no direct linkage toAlexander Hamilton for Northern Trust, we've been around almostthat long——125 years, headquartered in Chicago for those of youthat don't know us too well.

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We are a global market leader. We have grown organically throughall these years and maintain a pretty strong culture. We're reallydedicated to three business segments: the wealth, the custody, andthe asset management. That's our focus, that's what we look at. Wehave 20 global locations. We're in 40-plus countries, so we'vegrown significantly.

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Strength, stability, conservative strategy—that's what we'reknown for. I do lead our sales and relationship efforts on the EastCoast for the balance sheet investment group, and we are a Top 10now asset manager globally, specializing in fixed income, shortduration as well as indexing.

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I do have a little experience with liquidity, being that I spentthe better part of my career as a banker. Liquidity certainly hasbeen a hot topic, you would have to say, over the last coupleyears—at least three years. And I think the question begs, youknow, how much liquidity is enough?

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And obviously, the answer to that question is probably, youcannot have enough. You know, one of the things I was thinkingabout, too, as Lewis mentioned, is you think you have liquidityuntil you don't. And you find out the hard way that sometimes youdon't have what you think you have, and I think that these nomineeshere were able to really navigate those waters quite well.

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You look at differentiating factors and some of the things theydid, thinking outside of the box, foresight, working within theorganization, and just the commitment to execute a business plan.And all those things, I think, were important for them to kind ofaccomplish what they were able to accomplish. I mean, luckily forus, things have improved significantly from last year and certainlyfrom two years ago when we were here. You know, last year we weresitting here, we were fresh off near-financial ruin. Markets werefrozen, there was no trust among counterparties — some seriousissues.

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And you flash-forward to today and you look at companies andthey're just flush with cash, just hoarding cash. Over $1 trillionon balance sheets right now for corporates and cash. It's now thefirst line of defense. There's no more reliance on banks or capitalmarkets. You're looking—it's not a rainy day fund. You're lookingto have a hurricane day fund.

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And so that's the trend right now. You know, you look at debtmarkets, it's all about going long right now. I mean issuance isreally robust out the yield curve. Fed policy, you know, is turninginto a 2012 story, or at least late 2011 before we see any types ofincreases in rates.

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So 10-year and 30-year structures are really what's dominatingright now. It's really hard to find short issuance if you're abuyer. A couple of statistics: this year 6% of issuance is 10-yearsand in, vs. 11% last year; 19% of issuance is 3-years and in, vs.almost 40% last year. So that kind of gives you an idea. Ten-years,that's up 10% this year, so that's certainly a sweet spot. So youare incentivized to really go out, replace short debt with long,and just push out maturities. You know, do it while you can, whileit's manageable, while rates are manageable.

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And that's what people are doing. God forbid we have anothercrisis. You know, you look at the money market fund world. That'scertainly going to be -– there's going to be an adverse effectthere in terms of raising short-term liquidity with all theregulation and the NAV issue and accounting issues, so there'sgoing to be a lot going on there.

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Lastly, the bank piece. When you look at banks, you know, it wasall about self-preservation for banks the last couple years. Thatspigot got turned off really quick. They were in the middle of theruins of the real estate bubble. So their willingness to lend wasbasically zero. And for some, even today, it's zero.

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And when you look at, you know, the nonfinancial small marketprivate sector, they're still having difficulties obtaining that.Large corporates, investment grades, not as much. It's become quiteadvantageous. Tenders are getting extended again. Private fundingwith insurance companies is big. Funded assets, smaller club deals,those are all happening again.

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But banks are definitely still hedging their bets with CDSpricing. They still have some issues to worry about, whether it'sthe capital requirements that they're going to need, constraints,bad loans still on their books. So that's still some murkywaters.

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As I think through all this, I think the common theme is stillthere's a lot of uncertainty. So in times of uncertainty, you needto do your best to make sure that you have enough liquidity.

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So against that backdrop, I think we can start introducing ourwinners here. First up is the Bronze winner: and the winner is fromAT&T, presenting Tom Clemens. A little bit about Tom here. Tomis director of investments, overseas equity investments acrossAT&T's $87 billion in assets. Before his current position, Tomled AT&T's international treasury team as well as managingFX.

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Tom has over 20 years of experience, financial experience, thelast 12 years in capital market and treasury roles. Tom is a CFA,CPA and a B.B.A. in finance from the University of Texas in Austin.Go, Longhorns. Welcome, Tom. Congratulations.

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TOM CLEMENS: Thank you, everybody. Good morning and thankyou for coming out. As you said, I'm Tom Clemens. I work withAT&T in Dallas, Texas, and I've been with SBC since 1997, backto the days of San Antonio and when we were SBC Communications. Iwas going to go over my bio, but John just did that for me, so letme skip ahead here.

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I want to talk about a project that I led beginning in 1999,when I was in charge of the international treasury group. And likea lot of projects, it began not as an initiative of treasury but ofour billing team. We needed to improve our billing processes withour international customers.

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And so let me take a minute to describe the process and then Ican explain how we solved the problem. At AT&T, we try to serveour international customers wherever they may be. I mean we haveoperations in a large number of countries. Now, I should rememberthe number of countries. I don't. Please don't tell the marketingpeople that. They wouldn't be happy with me.

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But for example let's say a customer, and I'll use Ford, justbecause they were here a moment ago. If they have operations in,say, five countries—we'll say U.S., Germany, U.K., Mexico, Japan.We can provide telecom services to them via our local subsidiariesin each country. We then will invoice their in-country costs totheir operations in the country. That's all well and good, but wealso have situations where customers want to pay one consolidatedbill in one currency in one location. And so if Ford wanted to pay,for some reason, all their bills in euros, we could do that.

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What we do is we'll take all those individual bills andtranslate them into one euro-based bill and deliver it. They thenpay us and we'll turn around and pay our subsidiaries back in localcurrency. This is what we call the CSS service—consolidatedstatement services. And it works out well.

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But there are some risks in there, and there are risks oftiming, of when the customers pay us. There are risks of FX. Is theamount that they pay us going to meet what our subsidiaries have onthe books? And there are operational issues. How do we pay oursubsidiaries? And how do we get all those hedges in place?

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So when I got here, how did we solve these issues? We outsourcedit. We gave it to a third-party bank and we let them handle it. Inthat case, those invoices would come to us. We would go to thebank. They would take those five invoices, hedge them out, each oneindividually. Ford would then pay the bank. The contracts would beclosed out and the payments would be made to the subsidiaries. Andfor this, we paid a lot of fees. We had a fee for the contract; wehad a fee if they didn't pay on time; if we had to roll overcontracts, gains and losses—surprisingly enough, gains got sharedwith the bank, losses came to us.

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So, and for scope purposes, we're talking 400 to 500 customerswe're billing in 12 different currencies across 30-odd countries.And this worked fine, but one of the things that happened was thethird-party bank didn't have the ability, given the way theirsystems work, to solve the credit issue.

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So if you had a credit—if Ford would have a credit in Mexico andsaid, 'Yeah, but I got a bill in the U.K. Can you cross those?' Itcouldn't happen. So we looked at trying to figure out a way to doit better and that came down to doing it internally.

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Now, as you look to bring an internal, there are a couple ruleshere, and I'm sure they're familiar to most of you all in the room.One, I couldn't hire any other staff. So we had to figure out a wayto get it to work. The other problem I had is that the people thatwould do the work, all the FX trades and all the cash transfers,didn't work for me. So I was going to have to push that work ontomy peers and they probably weren't going to be happy with that. Andso we tried to figure out a better way.

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Now, I'll try to explain how it all works. I reached out toCitibank, who was and is our major bank in Europe and they are aconcentration bank in the U.S. And the first thing I needed to dowas figure out all those currencies that our customer, that Fordwould be in — U.S. dollars, euros, yen, whatever. I needed a placeto hold them.

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So if you can see in that middle area of the box, there's fourblue boxes, okay? And those are notionally pooled subaccounts. Soeach time we would get a payment in a foreign currency, they wouldcome into those sub-accounts. All well and good. We could pool itnotionally. We'd get a U.S. dollar value for that. I could thentake that U.S. dollar value and use it for AT&T purposes,paying down CP, whatever we wanted to do.

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The next challenge I had was—and we've used pooling before, sothat wasn't new to us—the next challenge I had was I didn't want tohave to go out to our marketing people and our sales people andtell them, “If you want to pay in yen, you pay in this account. Ifyou pay in pounds, you pay in this account.” So that big, greenbox, that big, long, green box there, is a single IBAN account, asingle IBAN number, and it basically is an account that all fundscome into. It's one number, and then Citibank redistributes thatautomatically into the various subaccounts.

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So I've made that much cleaner for our back office folks, and Idon't have to worry about them. So all that cash comes through, andit flows straight through, and now I'm holding on to a lot ofdifferent currencies, all notionally pooled, all the dollars comeback to me.

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Now, remember, and this is an internal system issue, we didn'twant to, I didn't want to be making these 5,000 payments a monththat were coming in under the old system. So we built our owninternal system to say when payments come in through that IBANaccount, we got a BAI file.

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We took the BAI file and we put it into our system and we passedthrough the accounting records so we could clear the customer'saccount. So the customers were happy. And then we would be able toreduce that 5,000 payments down to one or two a month because wewere basically paying our own subsidiary.

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So we could control liquidity management; we could control whenwe paid our subs. So instead of having a lot of money stuckoverseas that may not be invested well or utilized well, we couldhold on to that for another few weeks.

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And the last piece I have is, you'll see that upper green box.There are two upper green boxes, actually. The bigger green box iswhere we show on a daily basis we can use those ACH, or those U.S.dollar notional balance.

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That little green box in the upper right corner is an automaticZBA from the pool into our U.S. account. So all those accounts inthe middle, those are all U.K. accounts. And those accounts are,again we have the notional value everyday and we 'drain the pool'on a daily basis. Put ZBAs up into our concentration account in NewYork.

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I think there are a couple ofinteresting pieces here. That big green box that I talked about alittle while ago, I think we're the first corporate to do that.There may be some brokerage houses that do it, but I think we werethe first corporate to do that.

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That little green drain the pool from the U.K., I think we arethe first corporate to use that as well. There are a couplecountries, kingdoms, maybe, that use it, maybe, but we're the firstones to do that.

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But at the end of the day, what did we do? We took a processthat was outsourced that was costing us a substantial amount ofmoney. We brought it in-house. We reduced the payments from 5,000 amonth to 30 a month, and even that we automated. So it's onetransaction. So we've saved money, we've improved liquidity; Ihaven't added any work to any other team materially.

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Again, the first thing we wanted to do was solve the customer'sproblems about credits. So it all started with the customer. But atthe end of the day, it's about process and I'm pretty impressed athow it all worked out. So thank you very much.

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KONSTANTOS: Thanks, Tom. Next up is ourSilver winner from Freeport McMoRan Cooper & Gold. Presentingwill be Kathleen Quirk. Kathleen is an executive vice president,chief financial officer and treasurer. She's been in that rolesince 2003 and EVP since the acquisition of Phelps Dodge in'07.

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Kathleen joined Freeport in 1989 holding various positionsthrough that tenure, from tax, investor relations, treasury,corporate finance and business development. She holds a bachelor'sof science in accounting from Louisiana State. Kathleen,congratulations.

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KATHLEEN QUIRK: Thank you. It's an honorfor us to be here today to talk about liquidity and it's been apopular subject over the last couple of years. And Lewis[Booth]'scomments resonated a lot with us as we were going through a verydifficult time in our industry. We're a, I don't know how much youknow about Freeport, but we're the world's largest publicly tradedproducer of copper.

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We operate all over the world, with copper mines in NorthAmerica. We have mines in Chile and Peru. We also have a verymassive operation in Indonesia, and we have a new mine that we justcompleted development of in the Democratic Republic of Congo. Sowe're a very global operation.

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We also produce byproducts—significant production of gold andalso a product called molybdenum, which is used in the steelindustry as a hardening agent. We're a company that's financiallystrong. A key part of what we do in mining in a way that'ssustainable, in a way that's environmentally responsible.

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Our enterprise value is roughly $45 billion. In 2009, we wereranked 154 in Fortune, and we have nearly 30,000 employeesworldwide. This is just a chart to show the leading producers ofcopper. As I said, we're the largest publicly traded producer. Thelargest is a producer in Chile, the state-owned, government-ownedcompany called Codelco.

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This was our challenge and it occurred, a lot of the thingsLewis [Booth] was talking about, it occurred at the end of, really,right around the time of the Lehman failure and the other failuresthat we saw in September of 2008. And what our issue was is thatour revenues essentially were cut in half in a very short period oftime.

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The copper price, which is our primary product, was trading atabout $3.60. It averaged in that range in 2008 throughout the year.And it fell very sharply and suddenly. We've been in the commoditybusiness for a very long time and know that we have to operatewithin high prices and low prices, but it really dropped in anunprecedented fashion because it went from $3.60 to $1.60 andactually got as low as $1.26 at one point in December.

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Certain of our operations were operating at a cash cost that wasabove $1.60, and so we had to react very quickly. We were in themidst of going gangbusters because leading up to the collapse wasvery strong demand out of China. Our whole industry was workingvery hard to invest capital, to raise capacity to meet theincreased demand, and then all of a sudden the brakes came on andprices fell very quickly, overnight.

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So we lost, in operating cash flows, we lost roughly $7 billionper annum if you looked at the change in prices in our key product.So we had to move very quickly to make sure we had liquidity tomanage through what we didn't know how long this period wouldbe.

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We were positive long term about the markets that we're in, butwe didn't know how long we would be in a situation of having lowprices and having basic capital markets that were shut down toCorporate America.

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This is the history of our stock price. John mentioned weacquired Phelps Dodge. This was a major transaction that we haddone in 2007. We acquired it for $26 billion and did it mostly in aleveraged transaction through debt. But over time or very quicklyafter the acquisition, we paid down the debt.

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So we were in a good position going into the crisis from a debtstandpoint. But the issue we had was making sure we had liquidityto operate in what could be a protracted period of weak prices. Butyou see what happened to our stock price between late '06 andleading up to this: we had gone from roughly $60 to $120 and thenvery, very quickly moved down. At one point, we were below $20 ashare.

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So that's just a sign of what was going on in our industry. Weshow down at the bottom where our debt was trading, and it had beentrading sub-8% for some time. And then with the crisis, our CDSsexpanded and our bonds got up to over 14% yields.

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So what we had been doing going into the crisis, our priorstrategy was, after the acquisition, to reduce debt. And we didthat very effectively. We were defining the potential of all of ourresources. We were conducting a lot of drilling and explorationanalysis, expansion analysis because we really believed that theworld was going to need more of our resources, more of our copper;as China and the other emerging economies expanded, the world wasgoing to need more resources.

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And so we were aggressively defining our resource potential anddeveloping growth projects, and we were generating cash well inexcess of our capital expenditure requirements. So we werereturning cash to shareholders though strong dividends and sharebuybacks.

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And when this happened, we had to move very quickly to develop anew plan. And this was a coordinated effort. Lewis talked aboutthis, but it was not just a financial effort. It involved workingacross our functional lines, across the operation, across ourglobal business to work with our operating teams to make sure thateach operation was profitable and could survive a period of, anunknown period of low prices.

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So our strategy was to reduce cost, capital spending, protectour liquidity, because we really wanted to be in a position to,during a recovery, to prosper. And we, through the whole time, feltthat markets would improve. We didn't know when. And that thecompany with its long-lived assets would be in a good position tobenefit from that.

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So that's really what our whole plans were designed around. Wedidn't want to fire-sale assets. We just wanted to make sure thatwe could live within our cash flows, preserve the value of ourresources for better markets in the future.

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So I talked about the problem that we have where we lost on anannualized basis over $6 billion of cash flows. And so what we did,really, to try to shore up our liquidity was first work onoperating costs. We worked with each of our managers that operateour mining operations and processing operations to reduce cost.

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Unfortunately, we had to make some tough decisions on headcounts. We lost about a third of our U.S. workforce during thistime, but we also idled equipment. Our consumables went down as aresult of that. We used less energy, etc., etc. And that resultedin operating cost savings of roughly $800 million.

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We suspended a number of projects. You know, we had committedcapital to buying lots of trucks, shovels, we were buying new millsto increase our capacity. And we had to move very quickly to workwith our suppliers to cancel equipment orders and work with them tomake sure that we had liquidity so that long term, their businessesalso could benefit.

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We're, for example, Caterpillar's largest customer. So we had towork cooperatively with our vendors in going through this to makesure that we could cut our capital expenditures and do it in amutually satisfactory way with our vendors. That saved us $1.2billion.

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During times like this, no one likes to do it, but we suspendedour common stock dividend, which was just over $750 million a year.We also had some preferred stock that required a dividend. Weconverted that into equity and that saved us another $60 million ayear.

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We had some trusts available that, it was a kind of a rainy dayfunds and trusts that were available, and we used cash from thosetrusts. We worked with our customers and got our payment termsshortened. We worked to get 15-day payment terms, which resulted ina reduction in our receivables.

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We also worked with our customers because we were doing somehedging on their behalf because they wanted to buy a fixed price ofcopper and we wanted to receive market prices of copper. So we weredoing some hedging on behalf of customers and when prices collapsedso far, we had marked to market on those hedges, and we worked withcustomers to back those mark-to-market losses. And that avoidedroughly $160 million of margin calls.

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We were taking advantage under vendor programs and we werepaying our invoices early and getting a discount. We extended thosepayables, so a lot of working capital initiatives to free up cashfrom the balance sheet.

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And then we worked to—the capital markets were essentially shut.It was a difficult time. You know, we had talked to banks aboutwhat we could do and they were quoting us very, very expensive debtterms. And we really didn't want to go out and lock in long-termdebt at those kinds of rates.

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We also considered whether it would make sense for us to drawdown our revolver. We had a $1.5 billion revolver that wasunfunded. We looked really hard at that and talked to our bankgroup about that and at the end of the day we decided not to do it.Ford made the comments that they did it and they had reasons to doit. But we felt like it would put additional strain on the bankmarket and ended up not drawing that revolver.

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And so we looked at alternatives for raising money in thecapital markets in this kind of environment and really didn't wantto expose the company to an equity offering where markets were openfor one day and maybe shut down the next day.

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So we filed with our shelf, it sounds like Ford did some of thesame things, a dribble-out program, so that we could sell sharesinto the market from time to time without picking a certain day tosell it in. And that was a highly successful program. We —raised$750 million in gross proceeds from this offering over a 10-dayperiod.

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And actually over that 10-day period, our stock was up 22%.Usually, as you know, when you issue equity you have to face adeclining stock price. But that was a very efficient way to raisecapital in a very tough environment. And so we took all theseactions. It was a coordinated fashion with our operating teams, andit was very successful.

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I mentioned we did our Phelps Dodge deal in '07 in a leveragedtransaction. We had $17.6 billion in debt at that time.Fortunately, we worked very hard to repay that debt quickly. Wewere permitted to do that. Within nine months, we had paid down $10billion in term debt from that acquisition.

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And that's about where our level of debt was going into thecrisis in 2008. Since that time, our business has recovered. Chinahas emerged again as a very strong consumer of natural resource,particularly copper. We've seen some steady recovery in the U.S.and Europe.

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We're not back to the levels of demand in the U.S. and Europethat we were in 2008, but prices of copper have improved. We'reback to the level of where we were in June of 2008. And during thistime, we've taken advantage of these cash and our strongeroperating cost structure to continue to pay down debt.

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We've paid down an additional 35% of the debt since thebeginning of '09. And you can see our cash position has grown to$3.7 billion, and going into the crisis we had cash of just under$1 billion. Next slide.

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And our stock price has rebounded. We're back up to roughly $100a share. So two years ago, there would have been some days whereour stock was at $20 or below and now we're back up to $100 ashare, roughly. Just under $100. And our debt, our notes have comein very nicely. They're quoting us new issue prices today in the4½% range for 10-year money.

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So it all worked out very well for us, but the lesson here isthe same thing that people have been saying: when you needliquidity, it's too late. You're got to plan. I think more and morecompanies are keeping more cash on the balance sheet or thinkingthrough more scenarios of 'what could happen' and 'do I have enoughliquidity right now?' We've got all the money available to us thatwe'd want, but we don't need it. We're generating very, verysignificant cash flows in excess of our capital spending.

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So lessons learned, for us, were, it helped us to move veryquickly. We took those tough steps, which were positive for therating agencies. We were able to maintain our investment-graderating by S&P and Fitch during this time period. That alsoenhanced our liquidity because if we had lost our rating, we wouldhave had to put up additional letters of credit under certain ofour obligations.

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So it was, move quickly. Work throughout the organization tomake sure you understand where the sources and uses of liquiditypotentially are, and work as a team and execute the plan. That'sreally—our learnings. And it was a great experience because we didthis on the heels of a merger transaction, so it was the first timeafter the merger that business was very good and you workeddifferently with people when businesses are going very well.

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When times are tough is when you really learn the business at avery detailed level and you learn how people address issues andchallenges and how they execute. And so as an organization, it wasa very good exercise for us, as well.

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So it was a tough time but we feel like we learned a lot as acompany going through it and we rebounded and have a great outlookfor the future. That was it. Thank you.

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KONSTANTOS: Thanks, Kathleen. Last and certainly not leastis our Gold winner, Toyota Financial Services, and presenting forToyota will be Vanita Aggarwal. She's the director of treasury riskwith oversight for Latin America operations. She overseesliquidity, interest rate as well as counterparty risk.

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She's a former banker at RBS. We won't hold that against you.Sorry to hear that. Vanita has a bachelor's in engineering fromDelhi University; master's from University of Toronto and is a CFAmember. Congratulations.

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VANITA AGGARWAL: Thank you, John. I'd like to thankTreasury & Risk magazine and our judges for thisaward. And I am honored to accept it on behalf of my team here. Tostart off with, I want to spend a minute on basically what ToyotaFinancial Services or TFS does.

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We provide financing to the Toyota and Lexus customers in theform of consumer loans, leases and also dealer financing andinsurance products. As of the last fiscal year, the size of ourbalance sheet was just over $80 billion and we had debt outstandingof about $73 billion.

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We're currently a AA-rated company. Let me provide some contexton why we undertook this initiative. This morning we've beentalking quite a bit about liquidity, how important that is, howimportant it is to do the cash flow forecasting. So Toyota hasmaintained a very strong liquidity position with diversifiedfunding sources, diversified funding strategy, to keep marketaccess high and our funding costs low.

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This strategy certainly helped us successfully navigate throughthe financial crisis of 2008. With our strong liquidity positionand as AAA in the past, as far as our liquidity risk managementgoes, it was really kind of more on the back burner based on simplestatic metrics with some cash flow modeling but not really on muchmore of a proactive day-to-day basis.

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However, with the changing market conditions and economicenvironment and with some of the ratings downgrades for Toyota, weneeded to re-evaluate our liquidity risk management strategy andalso incorporate some of the lessons that were learned through thefinancial crisis.

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This need was further required, as many of you know, we probablyall of you know, we were hit with the recall event in early 2010.This brings me to the objective of our project, which is to createan infrastructure that would enable swift, prudent, and decisiveliquidity risk management capability with an empowered liquidityrisk team with robust scenario modeling incorporating many of thedifferent reigning conditions, ranging from normal marketconditions to highly stressed conditions and also incorporating allof that in some comprehensive reporting tools that are easy tounderstand.

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The overall idea being to provide transparency and visibilityinto our true liquidity position to our stakeholders internally andexternally.

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So what was our strategy for the execution? We used the classicframework of people, process and tools. Firstly, as far asliquidity risk management goes, it was being managed before thecrisis in more of the front office, which had been closest to themarket while we reorganized our structure and treasury to form aseparate independent liquidity risk team to manage and measure thisrisk.

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Secondly, as I just mentioned a minute ago, before the crisisour liquidity risk management was more narrow-focused, looking intosome of the static metrics, not incorporating the full balancesheet view or the timing of the cash flows in the future. Well, weresearched on that particular topic quite a bit, identifying themetrics that were most relevant to our business, and we identifiednine key metrics that would provide a comprehensive view of ourliquidity profile.

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These metrics ranged from the simple metrics to incorporatingthe highest stress scenarios. Not only did we identify thosemetrics, but we also put some risk tolerance and limits aroundthose metrics.

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Of course, while we'd formed a separate liquidity risk team, wewere not doing this all in silence. So collaboration is a big partof it. So we worked cross-organizationally with the different areasof the organization, including the market execution teams and thefront office and also asset origination teams who are responsiblefor actually deep financing to the end customers to incorporatetheir input in terms of different assumptions, the feasibility ofthe scenarios, what kind of access would we have in differentmarket environments, and so on and so forth.

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Now that we had a lot of this data, metrics, the question was,it can be pretty overwhelming. So our challenge was to provide allthis information to our senior management and to our stakeholdersin a user-friendly manner. So for that particular thing, we createddashboards to organize all of our liquidity metrics into one pageand this was charted and color-coded with historical trends, whichvery quickly in a snapshot, at least to start with, would provideyou with a quick assessment of any changes in the liquidityprofile. Of course, a lot of detail goes behind it.

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Lastly, we also modeled. I mentioned about modeling multiplestress scenarios. But given the stress scenario, the contingencyfunding required can be significant. So we did the scenarios toproduce what the different contingency requirements would be undereach of those scenarios.

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I mentioned about the recalls a few minutes ago. So I want totake a couple of minutes to talk about how we were impacted duringthe recall and how this infrastructure helped us navigate throughthat. The recall that we faced was quite different from the earlierfinancial crisis, earlier being more of a market event, where itwas impacting everybody. We, as Toyota, actually enjoyed the flightto quality: our commercial paper strength, we were a directcommercial paper issuer, and so on.

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However, this being more of a market-specific event, what wefaced was it shook some of the investor confidence. We foundourselves temporarily being shut out of the term markets. So itcertainly made it pretty challenging for us. Well, in those timesand since we'd already been on the path of developing a lot of thiscapability, it was really put to the test in those times.

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And what we found is, we were actually looking at this frameworkin detail on a daily basis, looking at what our contingency fundingneeds are from day-to-day, as well as over the long-term horizon,especially given the company's specific events at that time, andnot knowing the horizon of the stress.

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This really provided us with the guardrails and the triggerpoints and helped us implement alternate funding sources in a veryquick manner. As a result, we went back into the securitizedborrowing markets after having been out of those markets for sevenyears. We also further increased our contingent funding sources byadding a larger size portfolio of our more liquid assets.

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So all in all, this helped us bring in the required funding,thereby enabling us to continue funding our customers and dealersthrough the recall as well as post-recall.

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So just to summarize some of the results, this new frameworksignificantly increased management engagement and confidence,including our parent in Japan, especially during the recall, whatwe experienced with them as well. So it helped us communicate withour stakeholders, our senior management, as well as to our externalstakeholders.

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We do use this framework for optimal decision making on anongoing basis for determining our funding needs, the differentsources, the cost, the tenors, as well as for our contingencyplanning. This framework has also been shared and accepted as theglobal framework, and we're in the process of implementing it forthe other entities to get more of a global view on it. And asmentioned before, this framework and the resulting fundingcertainly enabled us to support record-high market share—by marketshare here, I mean the percent of vehicles financed as a percent ofour total vehicle sales, so, ou financing market sharebasically—throughout and post the recall events by providinguninterrupted funding to our consumers and our dealers during thiscompany-specific event, and thereby supporting our Toyota brand.Thank you.

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KONSTANTOS: Okay, I'd like to open it upto one question at this point. So who's got a question for us?

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Q: This question is for Tom. Do you guysdo netting at AT&T in terms of between the subs and so forth,and how do you do that in terms of keeping your FX costs down?

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CLEMENS: For the most part we don't donetting. We don't. No, if I had stayed in that job, that was one ofthe things I was going to be looking into, that and a globalin-house bank were my two priorities.

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Q: Any idea what those savings mightbe?

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CLEMENS: No, not off the top of my head.I mean

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I should rephrase. We do some internal netting in Europe, butfor the most part we don't.

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KONSTANTOS: I guess we've been given thegreen light to ask one more question, so I will do that. And since,Tom, you're just answered one, I'll ask it of the ladies, then.Obviously it's important to have a collaborative effort to getsomething like this done and it's not just the treasury function atthe end of the day.

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Can you guys talk about, a little bit, the experience there andhow difficult that was and what you found out, maybe, about thecompany that you didn't know before?

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QUIRK: Well, ours was very collaborativewith our operating teams and it was an iterative process becausewhat we were doing is trying to solve for, 'cause we have differingtypes of ores, and what we were trying to solve for is the miningplan that would result in the lowest cash cost.

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And so we had to involve our geological team, mine planningteams, operational teams, we had to involve our purchasing, globalsupply chain group as we worked through our vendor relations. So itwas across the organization, and the organization really embracedit. And I think everybody saw, I think everybody had the fear of,being fearful of the unknown, given the times that we were in. Soit was a very transparent process. There was no hiding the ball. Itwas just real good, and we learned a lot about the organization ingoing through that. So I think it was a fruitful exercise.

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AGGARWAL: It can be challenging; however,incorporating the viewpoints from many of the different areas hascertainly proved to be fruitful. One of the challenges actually forus has also been managing that communication and collaborating withthe parent in Japan, which certainly we continue to work upon, because of the time difference, because of us being sodistant, it's to keep that channel of communication going andcollaborating and keeping them on the same page in terms of ourobjective and moving toward the result. That's certainly been onearea that we've worked consistently on.

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KONSTANTOS: Well, on behalf of ourwinners, good night, everybody.