TOM DUGGAN: Our sponsor this year forWorking Capital Management is Ariba and I'm pleased to introducePeter Lugli, who will present the awards today. Peter is senior director of working capital management and businessdevelopment at Ariba. In this role he isresponsible for the company's strategies in marketing regardingworking capital management solutions offered to Global 2000companies and their suppliers.

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Prior to joining Ariba, Peter served as vice president ofmarketing and global program management for a global supply chainfinance technology solutions provider based inAtlanta. He pioneered supply chain financeenablement methodologies for companies such as Volvo, Lowes, Kohl'sand others. An interesting fact about Peter, healso served as chief of staff to Canada's Minister of InternationalTrade, and senior special advisor to Canada's Minister of Justiceand Attorney General of Canada. Peter receivedhis law degree from the University of Windsor and a Bachelor ofSocial Sciences from the University of Ottawa inCanada. So now I'd like to turn it over toPeter.

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PETER LUGLI: Thankyou, Tom, and thank you, Donna, as well for the warm receptionyou've shown Ariba at this event. This is ourfirst time here as sponsor. We're typicallyperceived more as a supply chain solutions provider, but giveneconomic conditions of late, what happens in the supply chain isresonating very strongly with folks in this room.

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Just one slide on Ariba. We're a global software andservices provider. Many of you are actually customers of ours. Youmay not know it, or you may know it. We provide solutions to300,000 companies worldwide who use our solutions to better buy,sell or manage cash. We deliver technologies and services that helpour customers with what we call collaborative business commerce,and that's everything from the initial sourcing of a good orservice that you're looking to acquire, and any of the downstreamprocurement activities related to that with respect to electronicpurchase order generation; and most importantly, over the lastseveral years, e-invoicing, payment and working capitalsolutions.

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We are very honored to be sponsors of the AHAawards. And I just wanted to set the stage forthe working capital discussion with some of the things that we see,and we know that you've seen happening out there, and how thatresonates in the supply chain, and in particular within the CFO andtreasury function.

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I think Donna referred to topsy-turvy; you'll see both thetopsy and the turvy, and theoretically the topsy again in the charton the right, which is from the Netherlands bureau for economicpolicy analysis, or the CPB. It effectively indicates howindustrial production had peaked in January of 2008, vis-à-vis2000, where 100 is the index. It went right down below 120, andthen back up to 135, in what was a very dramatic whipsaw of demandin the economy. You'll see Ed Rapp, who's CFO ofCaterpillar, remark about how this has impacted their ability tomeet market demand with respect to their suppliers, and he'sindicated that they've seen their facilities go from zero, up toproduction demands up 50%, 60%, 70% in the year, with a supplychain that had zero notice. And he went on to say that we've had todigest all of this as the supply chain ramps up from a dead stop inthe last part of '09.

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Now on the face of it, this is very much a supply chain issue.However, when you dig deeper, it touches on the CFO and treasuryrole very significantly, and we're going to hear some of that inour stories today from our award recipients. Gone are the dayswhere you can, to a large extent, look to the supplier to managetheir liquidity in today's environment. In effect, with $1.8trillion on U.S. corporate balance sheets, you start to see thatthere's an element emerging of the big investment-grade corporatebecoming their brother's keeper, and in the case of Caterpillar,they've deployed programs to help suppliers access liquidity to bebetter able to ramp up vis-à-vis monetizing theirreceivables. And so we start to see how workingcapital very much becomes part of the story in meeting thechallenges of the current economicenvironment.

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Similarly, this was not just Cat; we have GeneralElectric, who's alluded to this as well with respect to trouble inthe supply chain. This is from a story in theWall Street Journal in July and straight out of Mr.Sherin's comments to investors, and his analysts call mostrecently. And in a rather muted but significant way, the CFO ofEricsson indicating that the cash flow miss in their last quarterwas in no small part due to the supply chain challenges that theywere facing and indicating that the miss of $360 million on thecash flow was a number that they were not happywith.

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So as practitioners, we're seeing how these externalenvironmental forces are increasing the effort to look beyond thefour walls. And I think what's fascinating aboutour award recipients is that they have each levered or used workingcapital solutions to address many of the challenges that they'refacing internally and externally.

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With respect to Cisco — and I want to preface that this isin no particular order — with Cisco, they've taken working capitalas a competitive solution to meet the challenges faced by theeconomic environment, by growing sales and helping cash-constrainedchannel partners, and we'll hear from Maryann about how they veryeffectively did that. Ford — and its great storyof how they've used working capital as a driver for renewal byimproving agency ratings and delivering tangible liquidityoptions. And as well, from Kimberly-Clark, whoseworking capital objectives and challenges met the objectives andimperatives of creating new shareholder value in what is atremendous story as well.

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On behalf of Ariba, we're very honored to share the stagewith these award finalists, and what we view as great innovationsand accomplishments in the working capital realm. So, I willintroduce our Bronze recipient, Maryann Von Seggern, who's directorof Cisco Systems. Maryann?

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MARYANN VON SEGGERN: Thank you,Peter. Thank you, everyone. Thank you, Treasury & Risk. I'mthrilled to be recognized on behalf of Cisco with the Bronze forthe Working Capital Solution. Ten minutes is going to be incrediblyhard to take you through what is truly some secret sauce here atCisco, but to have everyone here who gets what working capital is,and gets the importance of a balance sheet, I'm absolutelythrilled.

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Channel financing at Cisco is broad-based and it'sfoundational, and it's part of the channel incentive programs thatCisco offers. And you might say, 'Well, why isthat so important?' but Cisco sells 85% of its product through itschannel partners, and if it doesn't have a healthy channel, Ciscois not going to grow and Cisco's not going to be able to deliverthat shareholder value. So it's incrediblyimportant, the health of our channel partners, and our incentivesthat we provide to them are both income statement-based for thechannel partner, right through types of rewards and rebates that wegive them, but they're also balance sheet focused, and making surethat our channel partners have the working capital that they needto be able to continue to place the orders and grow theirbusiness. So very unique in theindustry. Most companies focus only on incomestatement type of rewards and rebates — Cisco doesboth. And I'm going to take you through a storyof what we did over the past two years and share with you some ofthe incredible results that were obtained when we made some changesin Europe.

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So with that, we'll get started. If wego back, 2009 is a year that I think all of you would very muchlike to forget, I know I would. We were basically in a situationwhere we had contracting credit markets; the banks were repricingloans and pulling commitments; we had a tremendous amount ofuncertainty. Our channel partners wereexperiencing significant payment delays with theircustomers. There was enormous pressure onprofits and there were delays in customer spending. A really,really difficult year. And as part of aleadership team at Cisco (and I sit on the channels board forCisco), we were trying to figure out what can and what should we doto make sure that our channel partners would survive this economicstorm that we found ourselves in. And what wedid was, we came up with a program that was called Navigate toAccelerate. The concept was to focus on how wereour channel partners — and there's 40,000 of them — going tonavigate through these economic times to then be able to acceleratewhen we got to the upturn. The top of thecompass was finance, and we did an awful lot of training with thechannel partners around their financials and things they needed todo operationally to make sure they were tight and incontrol. But we're going to talk about somethingthat we did with channel financing, particularly in Europe rightnow, and give you a sense for what the impact was toCisco.

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So the objectives from the focus on finance: There werefour key objectives, and the first was to figure out how to makesure that our channel partners were going to survive this terriblestorm that we found ourselves in. We had toensure that we avoided material increase in credit risk; protectthe Cisco sales volume; and also increase our partnerloyalty.

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The IT space is more and more competitive by the day, and makingsure that your channel partners, which for Cisco are the extendedsales team for us, making sure that they stayed loyal and stayedwith us and actually that we gain share through them through thesetimes was what was top of mind for us. So whatwe did specific to Europe was, for about 40 of the top channelpartners, we provided 90-day payment terms to them and we leveragedoff what we've been doing now for over 10 years.

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This program is tremendous. It'soffered in 146 countries now. About 2 millioninvoices a year are going through it. It'sautomated and we actually use five banks. So thebanks actually take assignment of the receivable, Cisco gets paidon day 30, and then the banks collect from theresellers. But the results were that we added$700 million of credit lines to the channel financing program withno risk to Cisco, $15 million of risk to Cisco. So we transferred all of those credit lines off of open accounts toour bank partners. We had a significantimprovement in the Cisco DSO for these 40 channel partners, andthese were the big guns in Europe. They werepaying us on about day 55. So we went from day55 to day 30, which was significant. And this isthe blockbuster one, everybody: Their sales growth was up 23%versus the European theater average. So make nobones or mistake about it, the working capital element of the Ciscoincentive program actually drove this. Partners, all of them,shared with us that they would not have been able to place theseorders without having this type of program fromus.

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So what were we able to do? We wereable to optimize the working capital across the entire supplychain, both for Cisco — we went from day 55 to day 30 — and for ourchannel partners. By stretching out when theyhad to pay their Cisco invoices, they were actually able to ordermore and take any working capital they had in their business andreinvest it for Cisco. We added new bankcapacity at a time when that certainly wasn'teasy. We now have about $8 billion of creditlines running through this program. We improvedour partner profitability, we accelerated their customer spending,and we truly increased our partner loyalty and provided a realcompetitive edge for Cisco.

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So as a finance person working for the premier IT companyin the world, I'm so proud of this, and I knew everybody here inthe room would be as well because we're all balance sheetpeople. This is a balance sheet program thatdrove significant sales, and it's an absolutely core andfoundational part of how Cisco goes to market with its channelpartners. So that's the presentation, thankyou.

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LUGLI: Thank you,Maryann. I'd like now to turn to Jun Wang fromKimberly-Clark, our Silver Award recipient.

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JUN WANG: Thank you,and on behalf of Kimberly-Clark team (it's a very cross-functionalteam), I'm very honored to accept the SilverAward. And thank you very much to the panel ofjudges of Treasury & Risk, and again, I'm very honoredto be here with all of you that have great innovative ideas thathelp to drive business growth.

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I'll explain a little bit about who we are and ourbusiness case, and who are the stakeholders, and how we organizefor success and what are the drivers, and finally I'll share withyou some of the results.

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Many of you, or your families, probably are using ourproducts on a daily basis. We are a health and hygiene productscompany that touches people's lives every day. We serve about 1.3 billion people every day around theworld. We operate in 35 countries, and about 150countries that have our sales force.

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Why is it important that we focus on working capitalimprovements? I think we've heard many peopletalk about the 2008, 2009 credit experience, financial crisis wasan eye-opener for us. We are a $20 billion salescompany and we are single-A credit rating. Nonetheless, we felt that same crunch in the marketplace and thatsame patterning of all the liquidities. And alsoback in 2008, our balance sheet was not very healthy, and we wereunder the gun of Moody's basically saying, 'You have to improve,otherwise you're going to be put on the negativewatch.' And we also looked at peer benchmarking.The seed started many years ago; back in 2003 we started our globalbusiness plan, and through that experience, we looked at how ourpeers are performing, what is our competitiveness, are thereopportunities for us to improve our cash flow, to generate cash athand, fund innovations, product development, andexpansion?

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And so that was the external environment we were operatingin. And with respect to the internalenvironment, in early 2008 we got our first quarter of negativefree cash flow in many, many years of KC history, and part of thatwas a big inventory build, and working capital drag was a majorcomponent on our RIC underperformance. (RIC is a major financialmetric that we use to measure our success and our healthiness.)

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We realized through the peer benchmarking that we haveoutdated terms and we have a lot of opportunities toimprove.

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The stakeholders in this were senior management. Seniormanagement team agreement is really very important for us becauseit is very hard to pool a cross-functional team and to generateactivities that actually starting from the operationallevel. We realize that all the mills, theoperators of the mills, and the planners of the mills and all ofthem have a very important role in playing, especially in theinventory production and that type of thing, and our accountspayable team and procurement team; they all need to go out to talkto our suppliers to make sure that we get the competitive terms andmake sure that we also pay them intime.

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And the other part we want to protect is our keysuppliers' financial health. We want to makesure that we don't drive them out of business. It's a win-win solution for both parties, and on the other end,make sure our customers gets their supplies. IfWal-Mart wants to order something, a certain package, a certainspecs of Huggies products, we want to make sure we have thatproduct for them. So a lot of things, and a lotof other departments, including legal,accounting. Being a treasury person, you willprobably notice a meaningful department is missing from this one —it's tax. It's not that I left them out onpurpose, but actually tax is very helpful in thiscase. I think they're just not objecting to alot of our initiatives.

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And so how do we organize for success? Senior management, again, came out in beginning of 2009 to say cashgeneration is the key and it's built in all our senior leaderscompensation profile, and it is everybody's objective of 2009,2010, and ongoing. It is a nonstopeffort. I think we generated a lot of cash flowsthrough working capital in the last year, and the next few years isgoing to be protecting those and continuing toimprove. And, again, like anything, if you lookat it, there are a lot of opportunities, and how do we plan for itand what are the low-hanging fruits and prioritization of inventorymanagement and accounts payable terms. Those are important thingsfor us in determining the winning strategy that helps thecustomers, Kimberly-Clark suppliers, and all have a healthy productcycle. Having coordinated efforts and select theright partner, I think it's very important here that we get a teameffort, and then we have our external partners help us.

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We have our banks coming in to tell us what are thecreative solutions, and treasury is kind of the front end of thisand helping to channel all of those innovative ideas to therelative departments and help to put together the teamwork. Ourpartners give us a lot of ideas and help us to implement — they'reabsolutely important in the success of the wholeprogram. And execution iskey.

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So the drivers, there's the inventories, payables andreceivables, and we take production curtailment, just make surethat we do not produce things that are notneeded. We only want to produce when it isneeded and what is needed. And inventoryreduction; now add to that also rationalization. And together with all of these efforts, we're able to take about 10days off our inventory days and related, we wereable to exit all our 23 overflowing warehouses. So all of those storage costs, transportation costs, and thendamage insurance and all of that isgone.

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And for payables, to extend our terms to match market standardand to improve our competitiveness and get additional funding andutilize the electronic invoicing and supply chain financing andother tools to help our key suppliers. Wepartnered with Citi on both of the fronts.

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Receivables is the smaller part of all three for us in2009, because we have a pretty efficient receivables team, butnonetheless, we're not as efficient as we wanted in Europe, so weput some of our smartest people on the team to collect the pastdues, and realize the significant benefit as well.

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So, what's our result? We came out with agoal of 2-3 days of improvement on workingcapital. At the end of the day, we got 15 daysout of working capital, and that equates to us over $900 million ofcash flow. And all of these helped us to formour single-A credit rating. We contributed to over $500 million onthe debt reduction and funded $800 million of pension, that isabove the line for the cash from ops. So wegenerated over 38% of cash flow growth, outside of the pensioncontribution. And RIC improvement, over 160basis points, and we funded modern acquisitions that help ourorganic growth. That's all, thank you.

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LUGLI: Thank you, Jun, that was a great story. I'm veryproud to announce our Gold Award recipient, Michael Seneski ofFord.

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MICHAELSENESKI: Thank you onbehalf of Ford. This is, honestly, a greataward; it's something we've been working for, for a longtime. What I'm going to try and do is talk alittle bit about the 'how' of our capitalstrategy. [Ford CFO] Lewis [Booth] yesterdaytalked a little bit about the 'what,' and I want to try and peelthat back a little bit and tell you how we went aboutit.

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I'll start off by showing a couple of slides Lewis hadyesterday. We're not going to rehash them, butjust to remind everyone.

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One of the key points that was facing us as we got into2008 and 2009 was couple-fold. One, we knew wehad to continue to fund the business during this time, but, two, asLewis said yesterday, the most important thing is you got to have astrategy when you come out of it, because we knew it wasn't goingto go back to where it was in the beginning, so you needed a newway of looking at the business going forward.

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The good part, as Lewis said yesterday, we already had aplan. This was part and parcel of what [CEO]Alan [Mulally] had brought in to Ford Motor Co. One of his key tenets: Finance the plan andimprove the balance sheet. So what did wedo?

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This is a little bit different way of looking at some ofthe actions that we took in the business. Nowyesterday, Lewis focused a lot on what we did in the debt andequity area. I want to mention a couple of theones at the top, because they're just as important to what weundertook as a company. One, we started todivest basically all of our non-Ford brands because we needed themanagement attention and management focus on Ford, and so between2006 and '10 you can see what we took out of thebusiness. The other one, which is a story in andof itself, we have a captive financing company, FordCredit. It's the largest automotive captivefinance company in the world, and we needed to fund that throughoutthis entire time. And that, truthfully, is astory that we could go into all by itself. Thenet result of these actions is that we are able to get ourselvesthrough, but as we said yesterday, it left us with an uncompetitivebalance sheet.

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So Lewis built this yesterday, and I won't really go intoit, but at the bottom was our journey and ourstrategy. And I think the key that I'm going tofocus on is right about down where the $1.87 was, is how we startedto undertake our debt strategy and our operations strategy combinedinto a capital strategy to move us forward. Iwill say that I think the market has responded. You can see from the $1.87 up to 14 bucks, put another way, ourmarket cap has gone from $2 billion to almost $50 billion in acouple of years.

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All right, so what did we do? Unfortunately, I can't promise that there's any special saucehere. In fact, it was reallysimple. The process we used is the same processyou'd use in any other part of the business. Youstart off and you say, well, what's the target? What are the metrics I'm going to use? What plando you have and how am I going to measure myself againstit? Pretty simple,right?

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So we started off and we said, well what is the target forus as a company, as it relates to our capitalstrategy? Well, for us it was investmentgrade. Now why? We had twokey issues. One, as I mentioned, was FordCredit. We believe Ford Credit is an absolutestrategic asset to us as a company. It financesvirtually all of our dealers and the vast majority of ourcustomers, and if we can't get them competitive funding so thatthey can provide competitive external pricing, then this strategicasset would have been at risk.

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Secondly, internally, our cost of capital needed to be at thesame level as our key competitors, because even if you've gotbetter products, if you're starting off handicapped by a highercost of capital, you're not going to be able to compete in the longrun. So investment grade was thetarget.

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Now what's the metric? One of the otherkey things that Alan Mulally has brought to Ford is that you don'tget to define your own success. I think this isreally important. How many of you are measuredby budget performance or efficiency levels? Hedoesn't care about any of that. The only peoplethat determine your success are external. It'syour customers, it's your suppliers, it's your shareholders, it'syour stakeholders, and those are the only metrics he wants to lookat.

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So when you stand back, and investment grade is thetarget, we got to go talk to the ratingagencies. And so we worked in depth with therating agencies to identify for the auto sector what are thequalitative and quantitative things we need to do and we need todeliver, to deliver investment-graderatings.

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From there we worked really closely with our bankingpartners and our advisers to say, based on that type of stuff, whatplan are we going to put together related to our debt and otheractions to be able to deliver those metrics, and then we measureourselves every quarter on it, and I'll show you that in a fewminutes.

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So what were some of the key tenets of the plan that weput in place to improve our capital strategy? First, I'm going to talk about cash. This is going to sound likeBusiness 101, but when you're a multinational company that's 105years old on all six continents — well six out of the seven — andin hundreds of countries, you can imagine how we've grownup. So the key question for all of you is, Doyou know where your cash is exactly, daily? Notonly do you know where it is exactly and daily, can you get to itand move it whenever and wherever you want? I'lltell you, we couldn't say yes to any of those a couple of yearsago. Today, we can do all of that.

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And that leads right into the next key part of cash, whichis operating minimums. If you know exactly whereyour cash is, you know where it is daily, and you know you can moveevery penny of it whenever you want like that, think what you cando to your operating minimums. But it wasn'tjust that type of thing that we looked at. Obviously we looked at the same things that Jun talked about,inventory, payables, receivables, but it went so much further thanthat. And I can't tell you the reduction that wegot in our operating minimum, but I'll guarantee you, think of thebiggest number you can possibly think of in your head and quadrupleit; it's that big. And the types of things thatwe did beyond inventory, payables and receivables, staggered plantsshutdowns, smooth supplier payments, bank account reductions, legalentity reductions, complete restructuring of national salescompanies. We basically reinvented the businessand fundamentally changed what cash it took to run thecompany.

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The next step was obviously liquidity. And we talked a little bit about this yesterday, but we now on aquarterly basis have models where we run probabilistic shockscenarios on what level of liquidity we need through our businessplan period, and we update that on a quarterly basis because it'snot just the minimums that you need to worry about, it's theliquidity you can't plan for. But if you don'thave a continual process to understand what the extent of thatshock could be, how will you know that you have the cash that youneed before you need it, that was one of the key things fromyesterday.

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Operating targets. The rating agenciestold us the metrics. We worked with our advisersso they helped us identify the debt vs. equity level, so if youknow your debt and you know your metrics, PBT is just math,right? We're all finance people, we can dothat. So when you stand there in front of youroperating guys and you walk them through, this is why we need to bean investment grade and here it is, and now your PBT target has togo up by 20%, 30%, 40%. Lewis yesterday made it sound likealtruism, and these guys were just going to come along for theride. We kind of knew that wasn't going to work,and so we took a little different approach. Andinstead, again this is just basic finance, you take the plan, youtake your cash flows and you use basic multiples and you show whatcould or should happen to your stock price with the delivery of thekey investment-grade metrics. And I'll tell you,every one of Alan's direct reports, and Alan's eyes got really widewhen they saw what could or should happen to our stockprice. I'll tell you the commitment that thatgave to, “Yes, I can get this 40% improvement or 30% improvement inmy operating underlines” was probably the most fundamental thing wedid to get operating buy-in.

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As it relates to debt, debt was reallysimple. We had a list of every single one of ourdebt items and we had to prioritize how we were going to get rid ofit. So we looked at the key attributes —interest costs, collateral, maturity profile, equity linkage — andwe set a priority and every quarter based on our excess liquidity,we determined which one's next in line and we knock itoff. This is just a simple chart. Just to letyou know, I took off the data to protect theinnocent. But this is the type of stuff, theseare investment-grade metrics. We review it everyquarter. We do a business plan update, theentire business plan gets updated every quarter at Ford Motor Co.,and we show this and we share it with Alan's team along with theplan of what are we going to do to achieve thosemetrics. It's very powerful in what we do inmoving forward.

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And then finally, what's been theresults? This is S&P's view of issuerratings for us and, obviously, we made it down to double-C in thedepths of 2008. Since then I'm happy to saywe're up six notches to B+. We're only fournotches away from investment grade; however, Moody's only has ustwo notches away and based on our earnings announcement the otherday, I got a phone call to make, but we're veryclose. We're not where we want to be, but weknow where we're going. We have a very robustplan all based on external metrics and we have the complete buy-inof the operating team to deliver the operating metrics necessaryfor us to deliver this plan. That's it,thanks.

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LUGLI: Thank you,Michael. Gosh, what a greatstory. I think Ford's stock price has gone up 5%after that presentation. Sorry about that.

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I'm going to ask the floor forquestions. We have people withmicrophones. I'm going to kick it off with one,and it actually is to Michael, once you have a chance to catch yourbreath there, and it relates to the credit ratingagencies. And, gosh, these have been times ofwoe and intrigue over the last two years for that group inparticular as well, and for many of us, and part of the drive forrenewal involved the significant engagement with the agencies. Whatdid you do with the credit rating agencies to get them to move tothe next level and are there stories that you can share with theaudience here who are looking at that kind of dialogue as well?Insights or even surprises?

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SENESKI: Yeah, I wouldactually say, as you can guess, through this period the ratingagencies have been pretty embattled, wouldn't yousay? Because of that there is a significanteffort on most of their parts to become significantly moretransparent in their rating methodologies. And Iwill say, you know, a number of them are very forthcoming insharing exactly how they measure you and how they're measuring youto a benchmark. And some of them even go so faras to say, here is the metrics for your industry or otherindustries for each of the credit ratings. So itreally requires in-depth discussions with them. Now recognize that ratings are not just quantitative, they'requalitative as well, so you need to understand; for example,consistency of earnings, consistency of cash flow confidence andproducts, consumer sentiment, things like that, overall economicfactors. At the end of the day we all recognize that the ratingagencies aren't going to, just because we hit the metrics, make thenumbers; however, the market will. And I'll tellyou we're already trading at investment-gradespreads. So we know where it is that we need toget to. Every quarter we do a deep dive review with every singleone of the rating agencies so they understand not only our actuals,but our forecast. We talked about it yesterday;I'll say it again. Complete transparency of yourphysicals and your financials, both actuals and your plan, iscritical to getting their buy-in.

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LUGLI: Great, thankyou. Any questions from thefloor? Way at the back.

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Q: Hi, this question is forthe Kimberly-Clark presentation. Could you justbreak down for us the improvement of $900 million in workingcapital between reduction in inventories, collecting more quicklyfrom customers, and stretching payables? Wherewas the biggest part of the opportunity for you?

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WANG: Sure. Inventory is our biggest opportunity thatwe materialized last year. This year we started to see the benefitsof accounts payable showing up on term extension, because when youthink about product and production curtailment and inventoryreduction, we produce less, we're buying less. So last year is kind of combined, but we can single out inventoryas the big one. And this year, I think, the termextensions and supply term financing and all of those benefitsstart to show.

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LUGLI: Question up inthe front here.

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Q: Hi, quick questionfor Michael. I like what you said about do youknow where your cash is exactly, daily, and can you move it; howdid you get to that consolidated view?

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SENESKI: I'd love tobe able to say that we have one global integrated system. We do useSWIFT SCORE and I would say we've moved over 90% of our banks ontothat, and those that aren't, we get daily electronic feeds for theother ones that automatically, through spreadsheet-type systems(unfortunately at this stage), consolidate up. And in regards to mobilization, our work with the tax office, webecame absolute partners and understood — and I'm telling you, wehad to fundamentally restructure so many parts of the world inorder to be able to access your cash wherever you want it, whereveryou need it. And if you think about the way youguys run your multinational businesses, how many of those pocketskeep double or triple what they need because they're sitting therethinking, 'Well, what about my liquidity shock?' Well, you get a diversification benefit of liquidity shock, so geteverybody down to their operating minimums, hold the restcentrally, you can cut it by 50%, 60%, 70%. Thisis the most fundamental thing we were able to do.

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LUGLI: I've got aquestion for Jun. One of the things that we'veheard over the last day or so is the amount of collaboration,collaboration within the organization and outside to externalparties. You listed seven or eight differentstakeholders within the Kimberly-Clark initiative, can you explaina bit about what treasury's role was in thatprocess? Was it a leadership role; was it acollaborative role within a broader set; what was the experiencefrom the treasury perspective?

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WANG: Sure. The way I think of our role is first we'rethe front end of hearing new ideas, and we're the front end tochannel it to our partners internally and try to form a team toinvestigate whether it is viable or not. I think that's a strategicpartner role. And we also participate incommunication. Communication is key for us, andwe've heard a lot of people talking about buy-in, and KC being a140-year-old company, that buy-in is absolutelyimportant.

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Treasury translates the financial results or financialexpectations to the business actions, and communicating with thepartners. And reinforcement — we always have tomake sure that treasury has that corporate view.

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LUGLI: Thankyou. Any more questions from thefloor?

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Q: Navigate to Accelerate, is that justin Europe or are you including it in other areas aswell?

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VON SEGGERN: Greatquestion. No, it wasn't justEurope. Navigate to Accelerate was a globalinitiative that Cisco took on, so the channel partners all aroundthe globe — you know, one of the core incentives is this workingcapital channel financing product. What we didduring the economic storm was, we extended all their payment termsto 90 and we also committed to significant continued build-out inEurope and Asia PAC. So what I took you throughwas just the initial build-out in Europe, the 40 partners that weput on there. So, like the U.S. partners, thethousand of them that are on channel financing, they typically get60 days, but when we were back in 2009 and it was really, reallydifficult, we took them out to 90 and we saw significant uptick intheir ability to order, in their ability to invest in Cisco, andthen also in their loyalty to the company. ButNavigate to Accelerate was global, and what was so cool to me wasthat it was a finance-led initiative for the company, with really atreasury product. But if the health of yourchannel is not strong — I mean, we were meeting daily back at theend of '08 and into the early months of '09 watching, and justmaking sure that these guys were all going to make it because itwas really sort of scary, scary, scary times forthem. They're so thinly capitalized, our channelpartners. But, yeah, it wasglobal. Thank you.

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LUGLI: Maybe just anotherfollow on to Maryann. Could you give us somesense of the size of the program, how many countries, how manyinvoices, banks, et cetera?

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VON SEGGERN: So thereare five bank partners that we use today, so we don't use Cisco'smoney. You know, one area that I really didn'ttouch on is the IT automation here. Here I amsitting here, it's the day before the quarter-end close for Cisco,and my phone is not ringing off the hook. Twomillion invoices went through this program last year, so thestructure is right, but we've also got theautomation. Cisco uses an Oracle-based ordersystem that the channel partners order through and the IT thatwe've been able to implement, with the feeds between Oracle and thefive banks, and then the portals that the banks have to work withour partners, has just been incredible. So 146countries, 2 million invoices, $8 billion of credit lines; over $20billion of invoices will go through this program thisyear.

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LUGLI: Thank you,Maryann. Any more questions from thefloor? I've actually got a follow-on to Mike, ifI can, and it actually relates a bit to what Lewis Booth saidyesterday around ownership of the balance sheet, which I thoughtwas very telling. He indicated something about the balance sheetnot being the purview of finance and treasury, but that theoperations organization really needed to understandthat. Now that's quite a chasm tocross. Can you give us some idea of some hint ofthe tactics or specifics that you did to sort of bring theoperations team into focus? You talked aboutshare price, were there other motivators?

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SENESKI: Well, I thinkthe key when you looked at a base plan that we had, what we had tobe able to do — and I don't know how your companies operate, but wetalked a little bit about it yesterday. Mostpeople come down to the PBT line and are pretty happy, most of youroperating guys, right, that's how their budgets areset. And what we needed to do was fundamentallychange that view and start by sharing with them, well, what arecompetitive capital structures, what does investment grade mean,how much do we have to pay in interest a year — we were paying over$2 billion of interest a year. We showed anotherchart to the operating guys, $2 billion of interest per year isabout three major product programs a year. So ifwe're going to sit there and just pay $2 billion of interest whilemaybe other domestic competitors who no longer have much debt don'thave to, how long before we can truly still be competitive from aproduct perspective? That hits home just as hardas your plan isn't aggressive enough. Sofundamentally how are we going to generate more cash so we can makethis go away? With our announcement of what wepaid down with the UAW today, we've reduced $10.8 billion this yearalone, over $800 million in interest expense in this yearalone. That allows, like Lewis said, a majorprogram. Over a couple of years, it's a huge benefit forus. And at the end of the day, what we do ismake product, so when you tell the product guys, I can give you acouple more products if we do this, in addition to your ownpersonal wealth, it's extremely powerful.

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LUGLI: Great. Thank you very much. Ithink we've got time for one last question from the floor if thereis one. If not, I'll thank all the awardrecipients and join me in applauding theirefforts.

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DUGGAN: Thanks, Peterand thank you to Ariba for sponsoring this session andcongratulations again to our winners, Maryann, Michael andJun.

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