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Al exander Ham i l t on Let t er of Cr edi t Paym ent M odul e A P M Tr easur y Goes Gr een and Saves Lynda M cGoey M anager of Tr ade and Pr oj ect Fi nance Oct ober 28, 2008 / 1 W el com e

  1. Al exander Ham i l t on Let t er of Cr edi t Paym ent M odul e “ A P M ” Tr easur y Goes Gr een and Saves Lynda M cGoey M anager of Tr ade and Pr oj ect Fi nance Oct ober 28, 2008 / 1 W el com e t o GE

  2. GE. W hat we do > / 2 W el com e t o GE

  3. Gl obal Reach, Gl obal I m pact • 300, 000+ em pl oyees w or l dw i de • Gr ow i ng i n key m ar ket s • M anuf act ur i ng f aci l i t i es i n 40+ count r i es • Oper at i ons i n 100+ count r i es • $173 Bi l l i on i n Revenues i n 2007 • $22. 5 Bi l l i on i n Ear ni ngs i n 2007 3 /

  4. GE Capi t al Avi at i on Fi nanci al Ser vi ces • Com m er ci al Fi nance • Ener gy Fi nanci al Ser vi ces • GE M oney • Tr easur y • GE Ener gy I nf r a s t r u c t ur e Ener gy • Oi l & Gas • W at er & Pr ocess Technol ogi es • 4 /

  5. NBC Uni ver sal Cabl e • . Fi l m • I nt er nat i onal • Net w or k • Spor t s & Ol ym pi cs • GE Technol ogy I nf r a s t r u c t ur e Avi at i on • E n t er p r i se Sol ut i ons • Heal t h ca r e • Tr anspor t at i on • GE Cons um er & I ndus t r i al Appl i ances • Li ght i ng • I ndust r i al • 5 /

  6. Tr ade and Pr oj ect Fi nance > Suppor t s GE W or l dw i de Suppor t s GE W or l dw i de / 6 W el com e t o GE

  7. Let t er of cr edi t f ee paym ent s • 2002 • 2008 • 12 busi ness s i t es, 20 banks, 1000 • 61 busi nes s s i t es, 30 banks, 3300 act i ve i nst r u m e n t s, 3, 500 annual act i ve i nst r u m e n t s, 9, 200 annual paym ent s, por t f ol i o $1. 8B, w eekl y paym ent s, por t f ol i o $8B, quar t er l y paym ent cycl e, 2 f ul l - t i m e paym ent cycl e, 2 f ul l - t i m e em pl oyees em pl oyees How can we ensur e? Fee accur acy, accur at e paym ent s, cor r ect char ge back t o t he busi ness, cont r o l l er shi p, det ai l ed i nf or m at i on on each t r a n sa c t i on f or al l , paym ent cycl e t o com pl y wi t h com pany’ s 90 st andar d Al l whi l e bei ng a good cor por at e envi r o n m e n t al ci t i z en Answer : APM -ALOC paym ent m odul e 7 /

  8. Let t er of cr edi t f ee paym ent s Paym ent cycl e: • Banks aut o- gener at i ng i nvoi ces dai l y, caus i ng conf us i on • To keep up wi t h t he l ar ge vol um e of i nvoi ces , paym ent s wer e m ade w eekl y For ei gn exchange r a t es: • 3300 act i ve L/ Cs and guar ant i es i s s ued i n 39 di f f er ent c u r r e n ci es • 30 banks ut i l i z i ng t hei r ow n var i ous i nt er nal FX r a t es on a gi ven day, banks aut o- gener at i ng i nvoi ces dai l y M anual pr ocess, m ul t i pl e r a t es, conf usi on 8 /

  9. Let t er of cr edi t f ee paym ent s –APM • I dent i f y al t er nat i ve t o vendor paym ent t hr ough account s payabl e – W or k wi t h GE cash m anagem ent t eam t o l i nk t o web cash, set t i ng up t r u st ed s our ce s t at us f or aut om at i c appr oved paym ent s on pr e- det er m i ned bank m odel s . – W or k wi t h i nt er nal bi l l i ng t eam ( I BS) – I ncr eas e cont r o l l er shi p pr oces s ar ound f ee paym ent s – Ext end paym ent cycl e f r o m 7 t o 90 days – I ns ur e bi l l back t o bus i nes s com pl et ed bef or e l edger cl os i ng each quar t er W or k wi t h i nt er nal and ext er nal cust om er s f or best r e so l ve 9 /

  10. Let t er of cr edi t f ee paym ent s –APM • VOC obt ai ned f r o m banks and bus i nes ses – Det ai l s r e q u i r e d f or eas e of r e c o n c i l i at i on – How t o pr ovi de com pl et e r e p o r t i ng, r e a l t i m e – Expl or ed bi l l i ng opt i ons / s ol ut i ons wi t h s har ed s er vi ces – How t o char ge bus i nes ses t hr ough i nt er nal bi l l i ng s ys t em ( I BS) i f we adopt web cash t o m ake vendor paym ent s – Bui l d an I BS l i nk t o t he t ool t o aut o val i dat e i nt er nal char ge codes at t he t i m e of L/ C i s s uance r e q u e s t , gr eat l y r e d u c i ng i n c o r r e c t l edger char ges W or k w i t h i nt er nal and ext er nal cust om er s f or best r eso l ve 10 /

  11. Let t er of cr edi t f ee paym ent s • Tar get s m et and exceeded by APM — GE’ s bol t - o n t o ALOC – El i m i nat ed m anual i nvoi ce dat a i nput – Zer o paper i nvoi ces , z er o checks , z er o pos t age – Adm i ni s t r a t i ve f ee s avi ngs f or t he banks and t he busi ness es – El i m i nat ed r e w o r k i nvol ved i n i n c o r r e c t or l ack of paym ent r e s o l ut i on – Sys t em cal cul at es al l f ees of f of bank’ s bi d r e p l y i n ALOC – El i m i nat es f ee di s cr epanci es / di s put es • Envi r o n m e n t –t he 3 Rs – Reduce, r e u s e , r e c y c l e – Zer o paper i nvoi ces , z er o checks , z er o pos t age – 1 t r e e = 8, 300 pi eces of paper 6. 65 – APM s avi ng t r ees annual l y! 11 /

  12. Let t er s of cr edi t Banker s: On APM –“ JP M or gan i s ver y pl eas ed w i t h Gener al El ect r i c’ s APM s ys t em –a com pl et e account s payabl e s ys t em . The syst em i s ver y r e l i abl e and accur at e i n pr oces s i ng f ees i n a t i m el y f as hi on r e l at ed t o t he st andby l et t er s of cr edi t and bank guar ant ees i ss ued by JP M or gan. Si nce t he i nt r o d u ct i on of APM s ys t em , JP M or gan' s need t o cr eat ei nvoi ces, m ai l i ng cost , t el ephone f ol l ow up, and di s put e r e so l ut i on have been t ot al l y el i m i nat ed and our i nvoi ce D PO s have r educed by at l eas t 30 days . W hen t he paym ent i s r e ce i ved by t he bank, i t pr ovi des f ul l br eak dow n of char ges , and how t he f ees w er e cal cul at ed. JP M or gan i s ver y pl eas ed w i t h t he APM s ys t em , and w oul d l i ke t oext end s peci al t hanks t o Lynda M cG oey, M anager Tr ade and Pr oj ect Fi nance and D ee Dobl er - Pl ai n, Seni or Anal yst at GE Cor por at e Tr eas ur y f or i nnovat i ve t hi nki ng, and br i ngi ng t hi s syst em i nt o r e a l i t y -i m agi nat i on at w or k. Saadat H. Khan JP M or gan Execut i ve Di r e ct or Gl obal Tr ade Ser vi ces Gener al El ect r i c’ sAPM s ys t em el i m i nat es t he s t andby l et t er of cr edi t bi l l i ng pr oces s f r o m a bank’ s per s pect i ve. W hen a bi d i s pl aced i n ALOC, t he bi d i ncor por at es t he f ees as s oci at ed w i t h t he i s s uance of t he s t andby l et t er of cr edi t . Once a bank i s not i f i ed t hat t hey w on t he bi d, t he s t andby L/ C i s i s s ued. On a quar t er l y basi s , t he f ees as s oci at ed w i t h t he i s s uance of st andby l et t er s of cr edi tar e r e m i t t ed t o t he bank. The APM pr oces s i m pl em ent ed by Gener al El ect r i c el i m i nat es banks cost s as s oci at ed w i t h st andby l et t er of cr edi t bi l l i ng. Taki ng w hat w as once a ver y paper i nt ens i ve pr oces s , and m aki ng i t com pl et el y w eb- based i s as envi r o n m e n t al l y f r i endl y as i t i s cos t r educi ng. I f one l ooks at t he num ber of banks ar ound t he w or l d w ho s er vi ce Gener al El ect r i c t hr ough t he ALOC syst em , t he cos t s avi ngs and t he el i m i nat i on of paper , t he num ber s m us t be s t agger i ng. An envi r o n m e n t al l y f r i endl y pr oces s , w hi ch r e d u ce s cos t s , now t hat ’ s i m agi nat i on at w or k! John M M cAr t hur Vi ce Pr esi dent , Tr ade & Suppl y Chai n | HSBC BANK USA, N. A. Quot es f r o m busi ness user s and banker s 12 /

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