Treasury and Trade Solutions
Practical Steps to Realising the Benefits of SEPA
18th March 2014
Todayrsquos Speakers
Jonathan Jordan
EMEA Market Manager
Payments and Receivables
Treasury and Trade Solutions
Citi
John Murray
EMEA Head
Corporate and Public Sector
Cash Management Sales
Treasury and Trade Solutions
Citi
ldquoSEPA is one piece in a jigsaw of measures and initiatives being introduced with the
aim of creating a more competitive EuropehellipIn this sense SEPA may prove to be
similar to the harmonisation of the power supply in Europe during the second half of
the last century
PWC - Economic analysis of SEPA - Benefits and opportunities ready to be unlocked by stakeholders (Jan 2014)
Treasury and Trade Solutions
Todayrsquos Agenda
Market Update
ndash Adoption and the Extended Transition Period
Beyond Compliance
ndash Immediate opportunities and Re-engineering with SEPA
The Next Deadlines
ndash 2016 Niche schemes and Non-Euro markets
3
SEPA ndash the market vs 1st Feb 2014 deadline
4
Feb - 94
SEPA Credit Transfers
Source European Central Bank
SEPA Direct Debits
Febndash 80
Many markets now complete
Market Migration almost completed
Accelerated adoption
More time needed for SME creditors to
complete migrations
The now agreed SEPA Extended Transition Period was introduced primarily to facilitate direct debit
initiators and SME migrations
The Extended Transition Period ndash 1 Aug 2014
5
The European Commission and Parliament have introduced an extra transition period of six
months until 1 August 2014 to allow banks and other payment service providers to continue
processing legacy Euro ACH payments and direct debit collections
Real Concerns over the ability of the wider market to meet the 1 February 2014 deadline the
extension aims to limit payment and economic disruption by allowing the market an
additional 6 months to complete migration activities
The European Central bank national central banks and regulators urged all stakeholders to
complete migrations by 1 February 2014 or as soon as possible thereafter
National and industry bodies have reacted in varying manners to the Extended Transition
Period based on their own SEPA readiness state Countries have announced their own
plans leading to a fragmented approach to
ndash The length of the extension
ndash Potential limitations on legacy ACH Direct Debit
ndash Legacy clearing costs
ndash Parallel transactions in both legacy and SEPA schemes
Extended
Transition
Period
Reaction of
the Market
Citi strongly advises any client still transacting legacy instruments to migrate all flows to SEPA
asap and we are encouraging full adoption and compliance no later than 31st March 2014
Fragmented Country Approaches
The Extended Transition Period provides countries PSPs the option to use the 6 month window however it
is clear that all markets wish to close their SEPA migration projects
As of 1 Feb 2014 Finland and Slovakia have fully migrated their legacy ACH and direct debit flows to SEPA
Spain ACH is now migrated to SEPA
Restrictions are being introduced and more are expected ndash eg no new debtor mandates allowed
Increased charges are being introduced in the market ndash eg Spain transaction charges
6
1 Feb 17 Mar 31 Mar 5 May 1 Aug 9 Jun
Maintained 1 Feb 14
ndash Slovakia ndash ACHDD
ndash Finland ndash DD
ndash Italy ndash ACH
ndash Germany ndash B2B DD (Abbuchungsauftragsverfahren)
Deadline
ndash Spain ndash ACH
Deadline
ndashIreland ndash ACHDD
ndashBelgium ndash ACHDD
Deadline
ndash Greece - ACH
Deadline
ndashSpain ndash DD
1 Aug
ndashGermany
ndashAustria
ndashFrance
ndashPortugal
ndashNetherlands
ndashLuxembourg
ndashItaly
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashDD
ACH ndash Legacy ACH deadline
DD - Legacy DD deadline
Excluding Niche schemes
Legacy Scheme Deadlines
Niche Schemes
7
Niche schemes will migrate to SEPA by 1 Feb 2016 They will likely fold into the current SEPA schemes or evolve into
Additional Optional Services (AOS)
Titre Interbancaire de Paiement (TIP)
Electronic Payment order (teleacuteregraveglement)
Out of Scope
Lettre de change (LCR)]
ELV (not officially a niche scheme but should migrate to SEPA by 2016)
Los anticipo de credito (cuaderno 58)
Los recibos (cuaderno 32)
Business continuity arrangements for
electronic credit transfers
Image transfer Verfahren
RID finanziario
RID a importe fisso
Non-automatic credit
Out of Scope
RIBA
A number of market challenges remain
SEPA Direct Debit RejectReturn message information
bull Usage of MS03 code ldquoReason Not Specifiedrdquo causing confusion
XML Variations
bull Countries have adopted interpretations of XML (eg ZKA XML CBI XML)
Unexpected beneficiary bank charges
bull SALA code word recommended for payroll payments PENS for pension payments
Usage of SEPA fields
bull eg End to End reference field not being utilised as expected by initiators
8
Beyond Compliance
Seizing the opportunity for change and re-engineering
SEPA has introduced opportunities for efficiency and centralisation
Standardisation and Process Efficiency
10
The features and inherent standardisation of SEPA can help organisations in the drive to achieve efficiency
centralisation and liquidity optimisation
Elimination of local formats and exception
processes facilitates standardisation of processes
including accounts payable and accounts receivable
Harmonisation of payment instruction content
and structures - leading to system process
simplification and increased STP
Standardisation of payment execution cycles
delivering a further streamlining of payments and
collections processes
Improved reconciliation from transmission of
additional non-truncated remittance data and new
scheme fields
Standardisation of payment schemes and
payment information on basis of ISO 20022 XML ndash an
information-rich bank agnostic provides clients with
additional flexibility
Can help accelerate centralisation initiatives such
as Shared Services Centres In-house Banks and
PaymentCollection Factories
Rationalisation and centralisation of account
structures
Reduction in the number of bank relationships due
to fewer bank account requirements
Simpler cash forecasting given consistency in value
dating versus disparate national payment
infrastructures
More efficient use of liquidity via rationalised
account structures
Supporting Centralisation amp Liquidity Optimisation
Immediate Opportunities
11
As organisations are becoming SEPA compliant attention is shifting towards how to best reap investment
benefits from SEPA
bull Evaluate SEPA migration decisions manual processes and arrangements put in place to meet SEPA compliance
bull Put in place a plan for future deadlines (2016)
SDD scheme selection ndash B2B reachability
Additional Optional Services eg COR1
XML Conversion Services
Mandate Management services and process
Usage of SEPA message fields
The new SEPA Agenda
ldquoLarge and international operating companies are best positioned to benefit directly from
SEPA
A reduction of up to 9 million bank accounts resulting from more efficient corporate euro cash-
management infrastructures
We expect that companies will review their bank account structures and consolidate
processing of euro-denominated transactions across the SEPA-zone to a central location of a
prime cash management bank By doing so organisations aim to economise on bank account
fees and operate simpler and more efficient cash-pooling structuresrdquo
PWC
In recent years we have rationalised our collections banks from over 30 to just over a dozen after SEPA
compliance we will look to move to 3-4 collection banksrdquo
Multinational client
ldquoWe intend to begin moving our direct debits collections to the SEPA B2B schemerdquo
Multinational client
12
Reengineering Opportunities
13
Leverage SEPA to fundamentally re-engineer cash management structure
Bank Rationalisation ndash reducing the number of bank partners to a preferred group
Account Rationalisation ndash seeking reduction in number of Euro accounts
Receivables Optimisation - seeking standardisation andor centralisation of collection processes
Payments Optimisation ndash seeking standardisation of processes (ie vendor payroll) and or new structures (eg POBO)
Reconciliation improvements ndash improving matching rates to reduce exceptions and improve cash application
Technology rationalisation and SWIFT amp XML
Expand geographic scope beyond SEPA ndash Nordics UK Switzerland
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
ldquoSEPA is one piece in a jigsaw of measures and initiatives being introduced with the
aim of creating a more competitive EuropehellipIn this sense SEPA may prove to be
similar to the harmonisation of the power supply in Europe during the second half of
the last century
PWC - Economic analysis of SEPA - Benefits and opportunities ready to be unlocked by stakeholders (Jan 2014)
Treasury and Trade Solutions
Todayrsquos Agenda
Market Update
ndash Adoption and the Extended Transition Period
Beyond Compliance
ndash Immediate opportunities and Re-engineering with SEPA
The Next Deadlines
ndash 2016 Niche schemes and Non-Euro markets
3
SEPA ndash the market vs 1st Feb 2014 deadline
4
Feb - 94
SEPA Credit Transfers
Source European Central Bank
SEPA Direct Debits
Febndash 80
Many markets now complete
Market Migration almost completed
Accelerated adoption
More time needed for SME creditors to
complete migrations
The now agreed SEPA Extended Transition Period was introduced primarily to facilitate direct debit
initiators and SME migrations
The Extended Transition Period ndash 1 Aug 2014
5
The European Commission and Parliament have introduced an extra transition period of six
months until 1 August 2014 to allow banks and other payment service providers to continue
processing legacy Euro ACH payments and direct debit collections
Real Concerns over the ability of the wider market to meet the 1 February 2014 deadline the
extension aims to limit payment and economic disruption by allowing the market an
additional 6 months to complete migration activities
The European Central bank national central banks and regulators urged all stakeholders to
complete migrations by 1 February 2014 or as soon as possible thereafter
National and industry bodies have reacted in varying manners to the Extended Transition
Period based on their own SEPA readiness state Countries have announced their own
plans leading to a fragmented approach to
ndash The length of the extension
ndash Potential limitations on legacy ACH Direct Debit
ndash Legacy clearing costs
ndash Parallel transactions in both legacy and SEPA schemes
Extended
Transition
Period
Reaction of
the Market
Citi strongly advises any client still transacting legacy instruments to migrate all flows to SEPA
asap and we are encouraging full adoption and compliance no later than 31st March 2014
Fragmented Country Approaches
The Extended Transition Period provides countries PSPs the option to use the 6 month window however it
is clear that all markets wish to close their SEPA migration projects
As of 1 Feb 2014 Finland and Slovakia have fully migrated their legacy ACH and direct debit flows to SEPA
Spain ACH is now migrated to SEPA
Restrictions are being introduced and more are expected ndash eg no new debtor mandates allowed
Increased charges are being introduced in the market ndash eg Spain transaction charges
6
1 Feb 17 Mar 31 Mar 5 May 1 Aug 9 Jun
Maintained 1 Feb 14
ndash Slovakia ndash ACHDD
ndash Finland ndash DD
ndash Italy ndash ACH
ndash Germany ndash B2B DD (Abbuchungsauftragsverfahren)
Deadline
ndash Spain ndash ACH
Deadline
ndashIreland ndash ACHDD
ndashBelgium ndash ACHDD
Deadline
ndash Greece - ACH
Deadline
ndashSpain ndash DD
1 Aug
ndashGermany
ndashAustria
ndashFrance
ndashPortugal
ndashNetherlands
ndashLuxembourg
ndashItaly
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashDD
ACH ndash Legacy ACH deadline
DD - Legacy DD deadline
Excluding Niche schemes
Legacy Scheme Deadlines
Niche Schemes
7
Niche schemes will migrate to SEPA by 1 Feb 2016 They will likely fold into the current SEPA schemes or evolve into
Additional Optional Services (AOS)
Titre Interbancaire de Paiement (TIP)
Electronic Payment order (teleacuteregraveglement)
Out of Scope
Lettre de change (LCR)]
ELV (not officially a niche scheme but should migrate to SEPA by 2016)
Los anticipo de credito (cuaderno 58)
Los recibos (cuaderno 32)
Business continuity arrangements for
electronic credit transfers
Image transfer Verfahren
RID finanziario
RID a importe fisso
Non-automatic credit
Out of Scope
RIBA
A number of market challenges remain
SEPA Direct Debit RejectReturn message information
bull Usage of MS03 code ldquoReason Not Specifiedrdquo causing confusion
XML Variations
bull Countries have adopted interpretations of XML (eg ZKA XML CBI XML)
Unexpected beneficiary bank charges
bull SALA code word recommended for payroll payments PENS for pension payments
Usage of SEPA fields
bull eg End to End reference field not being utilised as expected by initiators
8
Beyond Compliance
Seizing the opportunity for change and re-engineering
SEPA has introduced opportunities for efficiency and centralisation
Standardisation and Process Efficiency
10
The features and inherent standardisation of SEPA can help organisations in the drive to achieve efficiency
centralisation and liquidity optimisation
Elimination of local formats and exception
processes facilitates standardisation of processes
including accounts payable and accounts receivable
Harmonisation of payment instruction content
and structures - leading to system process
simplification and increased STP
Standardisation of payment execution cycles
delivering a further streamlining of payments and
collections processes
Improved reconciliation from transmission of
additional non-truncated remittance data and new
scheme fields
Standardisation of payment schemes and
payment information on basis of ISO 20022 XML ndash an
information-rich bank agnostic provides clients with
additional flexibility
Can help accelerate centralisation initiatives such
as Shared Services Centres In-house Banks and
PaymentCollection Factories
Rationalisation and centralisation of account
structures
Reduction in the number of bank relationships due
to fewer bank account requirements
Simpler cash forecasting given consistency in value
dating versus disparate national payment
infrastructures
More efficient use of liquidity via rationalised
account structures
Supporting Centralisation amp Liquidity Optimisation
Immediate Opportunities
11
As organisations are becoming SEPA compliant attention is shifting towards how to best reap investment
benefits from SEPA
bull Evaluate SEPA migration decisions manual processes and arrangements put in place to meet SEPA compliance
bull Put in place a plan for future deadlines (2016)
SDD scheme selection ndash B2B reachability
Additional Optional Services eg COR1
XML Conversion Services
Mandate Management services and process
Usage of SEPA message fields
The new SEPA Agenda
ldquoLarge and international operating companies are best positioned to benefit directly from
SEPA
A reduction of up to 9 million bank accounts resulting from more efficient corporate euro cash-
management infrastructures
We expect that companies will review their bank account structures and consolidate
processing of euro-denominated transactions across the SEPA-zone to a central location of a
prime cash management bank By doing so organisations aim to economise on bank account
fees and operate simpler and more efficient cash-pooling structuresrdquo
PWC
In recent years we have rationalised our collections banks from over 30 to just over a dozen after SEPA
compliance we will look to move to 3-4 collection banksrdquo
Multinational client
ldquoWe intend to begin moving our direct debits collections to the SEPA B2B schemerdquo
Multinational client
12
Reengineering Opportunities
13
Leverage SEPA to fundamentally re-engineer cash management structure
Bank Rationalisation ndash reducing the number of bank partners to a preferred group
Account Rationalisation ndash seeking reduction in number of Euro accounts
Receivables Optimisation - seeking standardisation andor centralisation of collection processes
Payments Optimisation ndash seeking standardisation of processes (ie vendor payroll) and or new structures (eg POBO)
Reconciliation improvements ndash improving matching rates to reduce exceptions and improve cash application
Technology rationalisation and SWIFT amp XML
Expand geographic scope beyond SEPA ndash Nordics UK Switzerland
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
Todayrsquos Agenda
Market Update
ndash Adoption and the Extended Transition Period
Beyond Compliance
ndash Immediate opportunities and Re-engineering with SEPA
The Next Deadlines
ndash 2016 Niche schemes and Non-Euro markets
3
SEPA ndash the market vs 1st Feb 2014 deadline
4
Feb - 94
SEPA Credit Transfers
Source European Central Bank
SEPA Direct Debits
Febndash 80
Many markets now complete
Market Migration almost completed
Accelerated adoption
More time needed for SME creditors to
complete migrations
The now agreed SEPA Extended Transition Period was introduced primarily to facilitate direct debit
initiators and SME migrations
The Extended Transition Period ndash 1 Aug 2014
5
The European Commission and Parliament have introduced an extra transition period of six
months until 1 August 2014 to allow banks and other payment service providers to continue
processing legacy Euro ACH payments and direct debit collections
Real Concerns over the ability of the wider market to meet the 1 February 2014 deadline the
extension aims to limit payment and economic disruption by allowing the market an
additional 6 months to complete migration activities
The European Central bank national central banks and regulators urged all stakeholders to
complete migrations by 1 February 2014 or as soon as possible thereafter
National and industry bodies have reacted in varying manners to the Extended Transition
Period based on their own SEPA readiness state Countries have announced their own
plans leading to a fragmented approach to
ndash The length of the extension
ndash Potential limitations on legacy ACH Direct Debit
ndash Legacy clearing costs
ndash Parallel transactions in both legacy and SEPA schemes
Extended
Transition
Period
Reaction of
the Market
Citi strongly advises any client still transacting legacy instruments to migrate all flows to SEPA
asap and we are encouraging full adoption and compliance no later than 31st March 2014
Fragmented Country Approaches
The Extended Transition Period provides countries PSPs the option to use the 6 month window however it
is clear that all markets wish to close their SEPA migration projects
As of 1 Feb 2014 Finland and Slovakia have fully migrated their legacy ACH and direct debit flows to SEPA
Spain ACH is now migrated to SEPA
Restrictions are being introduced and more are expected ndash eg no new debtor mandates allowed
Increased charges are being introduced in the market ndash eg Spain transaction charges
6
1 Feb 17 Mar 31 Mar 5 May 1 Aug 9 Jun
Maintained 1 Feb 14
ndash Slovakia ndash ACHDD
ndash Finland ndash DD
ndash Italy ndash ACH
ndash Germany ndash B2B DD (Abbuchungsauftragsverfahren)
Deadline
ndash Spain ndash ACH
Deadline
ndashIreland ndash ACHDD
ndashBelgium ndash ACHDD
Deadline
ndash Greece - ACH
Deadline
ndashSpain ndash DD
1 Aug
ndashGermany
ndashAustria
ndashFrance
ndashPortugal
ndashNetherlands
ndashLuxembourg
ndashItaly
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashDD
ACH ndash Legacy ACH deadline
DD - Legacy DD deadline
Excluding Niche schemes
Legacy Scheme Deadlines
Niche Schemes
7
Niche schemes will migrate to SEPA by 1 Feb 2016 They will likely fold into the current SEPA schemes or evolve into
Additional Optional Services (AOS)
Titre Interbancaire de Paiement (TIP)
Electronic Payment order (teleacuteregraveglement)
Out of Scope
Lettre de change (LCR)]
ELV (not officially a niche scheme but should migrate to SEPA by 2016)
Los anticipo de credito (cuaderno 58)
Los recibos (cuaderno 32)
Business continuity arrangements for
electronic credit transfers
Image transfer Verfahren
RID finanziario
RID a importe fisso
Non-automatic credit
Out of Scope
RIBA
A number of market challenges remain
SEPA Direct Debit RejectReturn message information
bull Usage of MS03 code ldquoReason Not Specifiedrdquo causing confusion
XML Variations
bull Countries have adopted interpretations of XML (eg ZKA XML CBI XML)
Unexpected beneficiary bank charges
bull SALA code word recommended for payroll payments PENS for pension payments
Usage of SEPA fields
bull eg End to End reference field not being utilised as expected by initiators
8
Beyond Compliance
Seizing the opportunity for change and re-engineering
SEPA has introduced opportunities for efficiency and centralisation
Standardisation and Process Efficiency
10
The features and inherent standardisation of SEPA can help organisations in the drive to achieve efficiency
centralisation and liquidity optimisation
Elimination of local formats and exception
processes facilitates standardisation of processes
including accounts payable and accounts receivable
Harmonisation of payment instruction content
and structures - leading to system process
simplification and increased STP
Standardisation of payment execution cycles
delivering a further streamlining of payments and
collections processes
Improved reconciliation from transmission of
additional non-truncated remittance data and new
scheme fields
Standardisation of payment schemes and
payment information on basis of ISO 20022 XML ndash an
information-rich bank agnostic provides clients with
additional flexibility
Can help accelerate centralisation initiatives such
as Shared Services Centres In-house Banks and
PaymentCollection Factories
Rationalisation and centralisation of account
structures
Reduction in the number of bank relationships due
to fewer bank account requirements
Simpler cash forecasting given consistency in value
dating versus disparate national payment
infrastructures
More efficient use of liquidity via rationalised
account structures
Supporting Centralisation amp Liquidity Optimisation
Immediate Opportunities
11
As organisations are becoming SEPA compliant attention is shifting towards how to best reap investment
benefits from SEPA
bull Evaluate SEPA migration decisions manual processes and arrangements put in place to meet SEPA compliance
bull Put in place a plan for future deadlines (2016)
SDD scheme selection ndash B2B reachability
Additional Optional Services eg COR1
XML Conversion Services
Mandate Management services and process
Usage of SEPA message fields
The new SEPA Agenda
ldquoLarge and international operating companies are best positioned to benefit directly from
SEPA
A reduction of up to 9 million bank accounts resulting from more efficient corporate euro cash-
management infrastructures
We expect that companies will review their bank account structures and consolidate
processing of euro-denominated transactions across the SEPA-zone to a central location of a
prime cash management bank By doing so organisations aim to economise on bank account
fees and operate simpler and more efficient cash-pooling structuresrdquo
PWC
In recent years we have rationalised our collections banks from over 30 to just over a dozen after SEPA
compliance we will look to move to 3-4 collection banksrdquo
Multinational client
ldquoWe intend to begin moving our direct debits collections to the SEPA B2B schemerdquo
Multinational client
12
Reengineering Opportunities
13
Leverage SEPA to fundamentally re-engineer cash management structure
Bank Rationalisation ndash reducing the number of bank partners to a preferred group
Account Rationalisation ndash seeking reduction in number of Euro accounts
Receivables Optimisation - seeking standardisation andor centralisation of collection processes
Payments Optimisation ndash seeking standardisation of processes (ie vendor payroll) and or new structures (eg POBO)
Reconciliation improvements ndash improving matching rates to reduce exceptions and improve cash application
Technology rationalisation and SWIFT amp XML
Expand geographic scope beyond SEPA ndash Nordics UK Switzerland
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
SEPA ndash the market vs 1st Feb 2014 deadline
4
Feb - 94
SEPA Credit Transfers
Source European Central Bank
SEPA Direct Debits
Febndash 80
Many markets now complete
Market Migration almost completed
Accelerated adoption
More time needed for SME creditors to
complete migrations
The now agreed SEPA Extended Transition Period was introduced primarily to facilitate direct debit
initiators and SME migrations
The Extended Transition Period ndash 1 Aug 2014
5
The European Commission and Parliament have introduced an extra transition period of six
months until 1 August 2014 to allow banks and other payment service providers to continue
processing legacy Euro ACH payments and direct debit collections
Real Concerns over the ability of the wider market to meet the 1 February 2014 deadline the
extension aims to limit payment and economic disruption by allowing the market an
additional 6 months to complete migration activities
The European Central bank national central banks and regulators urged all stakeholders to
complete migrations by 1 February 2014 or as soon as possible thereafter
National and industry bodies have reacted in varying manners to the Extended Transition
Period based on their own SEPA readiness state Countries have announced their own
plans leading to a fragmented approach to
ndash The length of the extension
ndash Potential limitations on legacy ACH Direct Debit
ndash Legacy clearing costs
ndash Parallel transactions in both legacy and SEPA schemes
Extended
Transition
Period
Reaction of
the Market
Citi strongly advises any client still transacting legacy instruments to migrate all flows to SEPA
asap and we are encouraging full adoption and compliance no later than 31st March 2014
Fragmented Country Approaches
The Extended Transition Period provides countries PSPs the option to use the 6 month window however it
is clear that all markets wish to close their SEPA migration projects
As of 1 Feb 2014 Finland and Slovakia have fully migrated their legacy ACH and direct debit flows to SEPA
Spain ACH is now migrated to SEPA
Restrictions are being introduced and more are expected ndash eg no new debtor mandates allowed
Increased charges are being introduced in the market ndash eg Spain transaction charges
6
1 Feb 17 Mar 31 Mar 5 May 1 Aug 9 Jun
Maintained 1 Feb 14
ndash Slovakia ndash ACHDD
ndash Finland ndash DD
ndash Italy ndash ACH
ndash Germany ndash B2B DD (Abbuchungsauftragsverfahren)
Deadline
ndash Spain ndash ACH
Deadline
ndashIreland ndash ACHDD
ndashBelgium ndash ACHDD
Deadline
ndash Greece - ACH
Deadline
ndashSpain ndash DD
1 Aug
ndashGermany
ndashAustria
ndashFrance
ndashPortugal
ndashNetherlands
ndashLuxembourg
ndashItaly
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashDD
ACH ndash Legacy ACH deadline
DD - Legacy DD deadline
Excluding Niche schemes
Legacy Scheme Deadlines
Niche Schemes
7
Niche schemes will migrate to SEPA by 1 Feb 2016 They will likely fold into the current SEPA schemes or evolve into
Additional Optional Services (AOS)
Titre Interbancaire de Paiement (TIP)
Electronic Payment order (teleacuteregraveglement)
Out of Scope
Lettre de change (LCR)]
ELV (not officially a niche scheme but should migrate to SEPA by 2016)
Los anticipo de credito (cuaderno 58)
Los recibos (cuaderno 32)
Business continuity arrangements for
electronic credit transfers
Image transfer Verfahren
RID finanziario
RID a importe fisso
Non-automatic credit
Out of Scope
RIBA
A number of market challenges remain
SEPA Direct Debit RejectReturn message information
bull Usage of MS03 code ldquoReason Not Specifiedrdquo causing confusion
XML Variations
bull Countries have adopted interpretations of XML (eg ZKA XML CBI XML)
Unexpected beneficiary bank charges
bull SALA code word recommended for payroll payments PENS for pension payments
Usage of SEPA fields
bull eg End to End reference field not being utilised as expected by initiators
8
Beyond Compliance
Seizing the opportunity for change and re-engineering
SEPA has introduced opportunities for efficiency and centralisation
Standardisation and Process Efficiency
10
The features and inherent standardisation of SEPA can help organisations in the drive to achieve efficiency
centralisation and liquidity optimisation
Elimination of local formats and exception
processes facilitates standardisation of processes
including accounts payable and accounts receivable
Harmonisation of payment instruction content
and structures - leading to system process
simplification and increased STP
Standardisation of payment execution cycles
delivering a further streamlining of payments and
collections processes
Improved reconciliation from transmission of
additional non-truncated remittance data and new
scheme fields
Standardisation of payment schemes and
payment information on basis of ISO 20022 XML ndash an
information-rich bank agnostic provides clients with
additional flexibility
Can help accelerate centralisation initiatives such
as Shared Services Centres In-house Banks and
PaymentCollection Factories
Rationalisation and centralisation of account
structures
Reduction in the number of bank relationships due
to fewer bank account requirements
Simpler cash forecasting given consistency in value
dating versus disparate national payment
infrastructures
More efficient use of liquidity via rationalised
account structures
Supporting Centralisation amp Liquidity Optimisation
Immediate Opportunities
11
As organisations are becoming SEPA compliant attention is shifting towards how to best reap investment
benefits from SEPA
bull Evaluate SEPA migration decisions manual processes and arrangements put in place to meet SEPA compliance
bull Put in place a plan for future deadlines (2016)
SDD scheme selection ndash B2B reachability
Additional Optional Services eg COR1
XML Conversion Services
Mandate Management services and process
Usage of SEPA message fields
The new SEPA Agenda
ldquoLarge and international operating companies are best positioned to benefit directly from
SEPA
A reduction of up to 9 million bank accounts resulting from more efficient corporate euro cash-
management infrastructures
We expect that companies will review their bank account structures and consolidate
processing of euro-denominated transactions across the SEPA-zone to a central location of a
prime cash management bank By doing so organisations aim to economise on bank account
fees and operate simpler and more efficient cash-pooling structuresrdquo
PWC
In recent years we have rationalised our collections banks from over 30 to just over a dozen after SEPA
compliance we will look to move to 3-4 collection banksrdquo
Multinational client
ldquoWe intend to begin moving our direct debits collections to the SEPA B2B schemerdquo
Multinational client
12
Reengineering Opportunities
13
Leverage SEPA to fundamentally re-engineer cash management structure
Bank Rationalisation ndash reducing the number of bank partners to a preferred group
Account Rationalisation ndash seeking reduction in number of Euro accounts
Receivables Optimisation - seeking standardisation andor centralisation of collection processes
Payments Optimisation ndash seeking standardisation of processes (ie vendor payroll) and or new structures (eg POBO)
Reconciliation improvements ndash improving matching rates to reduce exceptions and improve cash application
Technology rationalisation and SWIFT amp XML
Expand geographic scope beyond SEPA ndash Nordics UK Switzerland
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
The Extended Transition Period ndash 1 Aug 2014
5
The European Commission and Parliament have introduced an extra transition period of six
months until 1 August 2014 to allow banks and other payment service providers to continue
processing legacy Euro ACH payments and direct debit collections
Real Concerns over the ability of the wider market to meet the 1 February 2014 deadline the
extension aims to limit payment and economic disruption by allowing the market an
additional 6 months to complete migration activities
The European Central bank national central banks and regulators urged all stakeholders to
complete migrations by 1 February 2014 or as soon as possible thereafter
National and industry bodies have reacted in varying manners to the Extended Transition
Period based on their own SEPA readiness state Countries have announced their own
plans leading to a fragmented approach to
ndash The length of the extension
ndash Potential limitations on legacy ACH Direct Debit
ndash Legacy clearing costs
ndash Parallel transactions in both legacy and SEPA schemes
Extended
Transition
Period
Reaction of
the Market
Citi strongly advises any client still transacting legacy instruments to migrate all flows to SEPA
asap and we are encouraging full adoption and compliance no later than 31st March 2014
Fragmented Country Approaches
The Extended Transition Period provides countries PSPs the option to use the 6 month window however it
is clear that all markets wish to close their SEPA migration projects
As of 1 Feb 2014 Finland and Slovakia have fully migrated their legacy ACH and direct debit flows to SEPA
Spain ACH is now migrated to SEPA
Restrictions are being introduced and more are expected ndash eg no new debtor mandates allowed
Increased charges are being introduced in the market ndash eg Spain transaction charges
6
1 Feb 17 Mar 31 Mar 5 May 1 Aug 9 Jun
Maintained 1 Feb 14
ndash Slovakia ndash ACHDD
ndash Finland ndash DD
ndash Italy ndash ACH
ndash Germany ndash B2B DD (Abbuchungsauftragsverfahren)
Deadline
ndash Spain ndash ACH
Deadline
ndashIreland ndash ACHDD
ndashBelgium ndash ACHDD
Deadline
ndash Greece - ACH
Deadline
ndashSpain ndash DD
1 Aug
ndashGermany
ndashAustria
ndashFrance
ndashPortugal
ndashNetherlands
ndashLuxembourg
ndashItaly
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashDD
ACH ndash Legacy ACH deadline
DD - Legacy DD deadline
Excluding Niche schemes
Legacy Scheme Deadlines
Niche Schemes
7
Niche schemes will migrate to SEPA by 1 Feb 2016 They will likely fold into the current SEPA schemes or evolve into
Additional Optional Services (AOS)
Titre Interbancaire de Paiement (TIP)
Electronic Payment order (teleacuteregraveglement)
Out of Scope
Lettre de change (LCR)]
ELV (not officially a niche scheme but should migrate to SEPA by 2016)
Los anticipo de credito (cuaderno 58)
Los recibos (cuaderno 32)
Business continuity arrangements for
electronic credit transfers
Image transfer Verfahren
RID finanziario
RID a importe fisso
Non-automatic credit
Out of Scope
RIBA
A number of market challenges remain
SEPA Direct Debit RejectReturn message information
bull Usage of MS03 code ldquoReason Not Specifiedrdquo causing confusion
XML Variations
bull Countries have adopted interpretations of XML (eg ZKA XML CBI XML)
Unexpected beneficiary bank charges
bull SALA code word recommended for payroll payments PENS for pension payments
Usage of SEPA fields
bull eg End to End reference field not being utilised as expected by initiators
8
Beyond Compliance
Seizing the opportunity for change and re-engineering
SEPA has introduced opportunities for efficiency and centralisation
Standardisation and Process Efficiency
10
The features and inherent standardisation of SEPA can help organisations in the drive to achieve efficiency
centralisation and liquidity optimisation
Elimination of local formats and exception
processes facilitates standardisation of processes
including accounts payable and accounts receivable
Harmonisation of payment instruction content
and structures - leading to system process
simplification and increased STP
Standardisation of payment execution cycles
delivering a further streamlining of payments and
collections processes
Improved reconciliation from transmission of
additional non-truncated remittance data and new
scheme fields
Standardisation of payment schemes and
payment information on basis of ISO 20022 XML ndash an
information-rich bank agnostic provides clients with
additional flexibility
Can help accelerate centralisation initiatives such
as Shared Services Centres In-house Banks and
PaymentCollection Factories
Rationalisation and centralisation of account
structures
Reduction in the number of bank relationships due
to fewer bank account requirements
Simpler cash forecasting given consistency in value
dating versus disparate national payment
infrastructures
More efficient use of liquidity via rationalised
account structures
Supporting Centralisation amp Liquidity Optimisation
Immediate Opportunities
11
As organisations are becoming SEPA compliant attention is shifting towards how to best reap investment
benefits from SEPA
bull Evaluate SEPA migration decisions manual processes and arrangements put in place to meet SEPA compliance
bull Put in place a plan for future deadlines (2016)
SDD scheme selection ndash B2B reachability
Additional Optional Services eg COR1
XML Conversion Services
Mandate Management services and process
Usage of SEPA message fields
The new SEPA Agenda
ldquoLarge and international operating companies are best positioned to benefit directly from
SEPA
A reduction of up to 9 million bank accounts resulting from more efficient corporate euro cash-
management infrastructures
We expect that companies will review their bank account structures and consolidate
processing of euro-denominated transactions across the SEPA-zone to a central location of a
prime cash management bank By doing so organisations aim to economise on bank account
fees and operate simpler and more efficient cash-pooling structuresrdquo
PWC
In recent years we have rationalised our collections banks from over 30 to just over a dozen after SEPA
compliance we will look to move to 3-4 collection banksrdquo
Multinational client
ldquoWe intend to begin moving our direct debits collections to the SEPA B2B schemerdquo
Multinational client
12
Reengineering Opportunities
13
Leverage SEPA to fundamentally re-engineer cash management structure
Bank Rationalisation ndash reducing the number of bank partners to a preferred group
Account Rationalisation ndash seeking reduction in number of Euro accounts
Receivables Optimisation - seeking standardisation andor centralisation of collection processes
Payments Optimisation ndash seeking standardisation of processes (ie vendor payroll) and or new structures (eg POBO)
Reconciliation improvements ndash improving matching rates to reduce exceptions and improve cash application
Technology rationalisation and SWIFT amp XML
Expand geographic scope beyond SEPA ndash Nordics UK Switzerland
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
Fragmented Country Approaches
The Extended Transition Period provides countries PSPs the option to use the 6 month window however it
is clear that all markets wish to close their SEPA migration projects
As of 1 Feb 2014 Finland and Slovakia have fully migrated their legacy ACH and direct debit flows to SEPA
Spain ACH is now migrated to SEPA
Restrictions are being introduced and more are expected ndash eg no new debtor mandates allowed
Increased charges are being introduced in the market ndash eg Spain transaction charges
6
1 Feb 17 Mar 31 Mar 5 May 1 Aug 9 Jun
Maintained 1 Feb 14
ndash Slovakia ndash ACHDD
ndash Finland ndash DD
ndash Italy ndash ACH
ndash Germany ndash B2B DD (Abbuchungsauftragsverfahren)
Deadline
ndash Spain ndash ACH
Deadline
ndashIreland ndash ACHDD
ndashBelgium ndash ACHDD
Deadline
ndash Greece - ACH
Deadline
ndashSpain ndash DD
1 Aug
ndashGermany
ndashAustria
ndashFrance
ndashPortugal
ndashNetherlands
ndashLuxembourg
ndashItaly
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashACHDD
ndashDD
ACH ndash Legacy ACH deadline
DD - Legacy DD deadline
Excluding Niche schemes
Legacy Scheme Deadlines
Niche Schemes
7
Niche schemes will migrate to SEPA by 1 Feb 2016 They will likely fold into the current SEPA schemes or evolve into
Additional Optional Services (AOS)
Titre Interbancaire de Paiement (TIP)
Electronic Payment order (teleacuteregraveglement)
Out of Scope
Lettre de change (LCR)]
ELV (not officially a niche scheme but should migrate to SEPA by 2016)
Los anticipo de credito (cuaderno 58)
Los recibos (cuaderno 32)
Business continuity arrangements for
electronic credit transfers
Image transfer Verfahren
RID finanziario
RID a importe fisso
Non-automatic credit
Out of Scope
RIBA
A number of market challenges remain
SEPA Direct Debit RejectReturn message information
bull Usage of MS03 code ldquoReason Not Specifiedrdquo causing confusion
XML Variations
bull Countries have adopted interpretations of XML (eg ZKA XML CBI XML)
Unexpected beneficiary bank charges
bull SALA code word recommended for payroll payments PENS for pension payments
Usage of SEPA fields
bull eg End to End reference field not being utilised as expected by initiators
8
Beyond Compliance
Seizing the opportunity for change and re-engineering
SEPA has introduced opportunities for efficiency and centralisation
Standardisation and Process Efficiency
10
The features and inherent standardisation of SEPA can help organisations in the drive to achieve efficiency
centralisation and liquidity optimisation
Elimination of local formats and exception
processes facilitates standardisation of processes
including accounts payable and accounts receivable
Harmonisation of payment instruction content
and structures - leading to system process
simplification and increased STP
Standardisation of payment execution cycles
delivering a further streamlining of payments and
collections processes
Improved reconciliation from transmission of
additional non-truncated remittance data and new
scheme fields
Standardisation of payment schemes and
payment information on basis of ISO 20022 XML ndash an
information-rich bank agnostic provides clients with
additional flexibility
Can help accelerate centralisation initiatives such
as Shared Services Centres In-house Banks and
PaymentCollection Factories
Rationalisation and centralisation of account
structures
Reduction in the number of bank relationships due
to fewer bank account requirements
Simpler cash forecasting given consistency in value
dating versus disparate national payment
infrastructures
More efficient use of liquidity via rationalised
account structures
Supporting Centralisation amp Liquidity Optimisation
Immediate Opportunities
11
As organisations are becoming SEPA compliant attention is shifting towards how to best reap investment
benefits from SEPA
bull Evaluate SEPA migration decisions manual processes and arrangements put in place to meet SEPA compliance
bull Put in place a plan for future deadlines (2016)
SDD scheme selection ndash B2B reachability
Additional Optional Services eg COR1
XML Conversion Services
Mandate Management services and process
Usage of SEPA message fields
The new SEPA Agenda
ldquoLarge and international operating companies are best positioned to benefit directly from
SEPA
A reduction of up to 9 million bank accounts resulting from more efficient corporate euro cash-
management infrastructures
We expect that companies will review their bank account structures and consolidate
processing of euro-denominated transactions across the SEPA-zone to a central location of a
prime cash management bank By doing so organisations aim to economise on bank account
fees and operate simpler and more efficient cash-pooling structuresrdquo
PWC
In recent years we have rationalised our collections banks from over 30 to just over a dozen after SEPA
compliance we will look to move to 3-4 collection banksrdquo
Multinational client
ldquoWe intend to begin moving our direct debits collections to the SEPA B2B schemerdquo
Multinational client
12
Reengineering Opportunities
13
Leverage SEPA to fundamentally re-engineer cash management structure
Bank Rationalisation ndash reducing the number of bank partners to a preferred group
Account Rationalisation ndash seeking reduction in number of Euro accounts
Receivables Optimisation - seeking standardisation andor centralisation of collection processes
Payments Optimisation ndash seeking standardisation of processes (ie vendor payroll) and or new structures (eg POBO)
Reconciliation improvements ndash improving matching rates to reduce exceptions and improve cash application
Technology rationalisation and SWIFT amp XML
Expand geographic scope beyond SEPA ndash Nordics UK Switzerland
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
Niche Schemes
7
Niche schemes will migrate to SEPA by 1 Feb 2016 They will likely fold into the current SEPA schemes or evolve into
Additional Optional Services (AOS)
Titre Interbancaire de Paiement (TIP)
Electronic Payment order (teleacuteregraveglement)
Out of Scope
Lettre de change (LCR)]
ELV (not officially a niche scheme but should migrate to SEPA by 2016)
Los anticipo de credito (cuaderno 58)
Los recibos (cuaderno 32)
Business continuity arrangements for
electronic credit transfers
Image transfer Verfahren
RID finanziario
RID a importe fisso
Non-automatic credit
Out of Scope
RIBA
A number of market challenges remain
SEPA Direct Debit RejectReturn message information
bull Usage of MS03 code ldquoReason Not Specifiedrdquo causing confusion
XML Variations
bull Countries have adopted interpretations of XML (eg ZKA XML CBI XML)
Unexpected beneficiary bank charges
bull SALA code word recommended for payroll payments PENS for pension payments
Usage of SEPA fields
bull eg End to End reference field not being utilised as expected by initiators
8
Beyond Compliance
Seizing the opportunity for change and re-engineering
SEPA has introduced opportunities for efficiency and centralisation
Standardisation and Process Efficiency
10
The features and inherent standardisation of SEPA can help organisations in the drive to achieve efficiency
centralisation and liquidity optimisation
Elimination of local formats and exception
processes facilitates standardisation of processes
including accounts payable and accounts receivable
Harmonisation of payment instruction content
and structures - leading to system process
simplification and increased STP
Standardisation of payment execution cycles
delivering a further streamlining of payments and
collections processes
Improved reconciliation from transmission of
additional non-truncated remittance data and new
scheme fields
Standardisation of payment schemes and
payment information on basis of ISO 20022 XML ndash an
information-rich bank agnostic provides clients with
additional flexibility
Can help accelerate centralisation initiatives such
as Shared Services Centres In-house Banks and
PaymentCollection Factories
Rationalisation and centralisation of account
structures
Reduction in the number of bank relationships due
to fewer bank account requirements
Simpler cash forecasting given consistency in value
dating versus disparate national payment
infrastructures
More efficient use of liquidity via rationalised
account structures
Supporting Centralisation amp Liquidity Optimisation
Immediate Opportunities
11
As organisations are becoming SEPA compliant attention is shifting towards how to best reap investment
benefits from SEPA
bull Evaluate SEPA migration decisions manual processes and arrangements put in place to meet SEPA compliance
bull Put in place a plan for future deadlines (2016)
SDD scheme selection ndash B2B reachability
Additional Optional Services eg COR1
XML Conversion Services
Mandate Management services and process
Usage of SEPA message fields
The new SEPA Agenda
ldquoLarge and international operating companies are best positioned to benefit directly from
SEPA
A reduction of up to 9 million bank accounts resulting from more efficient corporate euro cash-
management infrastructures
We expect that companies will review their bank account structures and consolidate
processing of euro-denominated transactions across the SEPA-zone to a central location of a
prime cash management bank By doing so organisations aim to economise on bank account
fees and operate simpler and more efficient cash-pooling structuresrdquo
PWC
In recent years we have rationalised our collections banks from over 30 to just over a dozen after SEPA
compliance we will look to move to 3-4 collection banksrdquo
Multinational client
ldquoWe intend to begin moving our direct debits collections to the SEPA B2B schemerdquo
Multinational client
12
Reengineering Opportunities
13
Leverage SEPA to fundamentally re-engineer cash management structure
Bank Rationalisation ndash reducing the number of bank partners to a preferred group
Account Rationalisation ndash seeking reduction in number of Euro accounts
Receivables Optimisation - seeking standardisation andor centralisation of collection processes
Payments Optimisation ndash seeking standardisation of processes (ie vendor payroll) and or new structures (eg POBO)
Reconciliation improvements ndash improving matching rates to reduce exceptions and improve cash application
Technology rationalisation and SWIFT amp XML
Expand geographic scope beyond SEPA ndash Nordics UK Switzerland
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
A number of market challenges remain
SEPA Direct Debit RejectReturn message information
bull Usage of MS03 code ldquoReason Not Specifiedrdquo causing confusion
XML Variations
bull Countries have adopted interpretations of XML (eg ZKA XML CBI XML)
Unexpected beneficiary bank charges
bull SALA code word recommended for payroll payments PENS for pension payments
Usage of SEPA fields
bull eg End to End reference field not being utilised as expected by initiators
8
Beyond Compliance
Seizing the opportunity for change and re-engineering
SEPA has introduced opportunities for efficiency and centralisation
Standardisation and Process Efficiency
10
The features and inherent standardisation of SEPA can help organisations in the drive to achieve efficiency
centralisation and liquidity optimisation
Elimination of local formats and exception
processes facilitates standardisation of processes
including accounts payable and accounts receivable
Harmonisation of payment instruction content
and structures - leading to system process
simplification and increased STP
Standardisation of payment execution cycles
delivering a further streamlining of payments and
collections processes
Improved reconciliation from transmission of
additional non-truncated remittance data and new
scheme fields
Standardisation of payment schemes and
payment information on basis of ISO 20022 XML ndash an
information-rich bank agnostic provides clients with
additional flexibility
Can help accelerate centralisation initiatives such
as Shared Services Centres In-house Banks and
PaymentCollection Factories
Rationalisation and centralisation of account
structures
Reduction in the number of bank relationships due
to fewer bank account requirements
Simpler cash forecasting given consistency in value
dating versus disparate national payment
infrastructures
More efficient use of liquidity via rationalised
account structures
Supporting Centralisation amp Liquidity Optimisation
Immediate Opportunities
11
As organisations are becoming SEPA compliant attention is shifting towards how to best reap investment
benefits from SEPA
bull Evaluate SEPA migration decisions manual processes and arrangements put in place to meet SEPA compliance
bull Put in place a plan for future deadlines (2016)
SDD scheme selection ndash B2B reachability
Additional Optional Services eg COR1
XML Conversion Services
Mandate Management services and process
Usage of SEPA message fields
The new SEPA Agenda
ldquoLarge and international operating companies are best positioned to benefit directly from
SEPA
A reduction of up to 9 million bank accounts resulting from more efficient corporate euro cash-
management infrastructures
We expect that companies will review their bank account structures and consolidate
processing of euro-denominated transactions across the SEPA-zone to a central location of a
prime cash management bank By doing so organisations aim to economise on bank account
fees and operate simpler and more efficient cash-pooling structuresrdquo
PWC
In recent years we have rationalised our collections banks from over 30 to just over a dozen after SEPA
compliance we will look to move to 3-4 collection banksrdquo
Multinational client
ldquoWe intend to begin moving our direct debits collections to the SEPA B2B schemerdquo
Multinational client
12
Reengineering Opportunities
13
Leverage SEPA to fundamentally re-engineer cash management structure
Bank Rationalisation ndash reducing the number of bank partners to a preferred group
Account Rationalisation ndash seeking reduction in number of Euro accounts
Receivables Optimisation - seeking standardisation andor centralisation of collection processes
Payments Optimisation ndash seeking standardisation of processes (ie vendor payroll) and or new structures (eg POBO)
Reconciliation improvements ndash improving matching rates to reduce exceptions and improve cash application
Technology rationalisation and SWIFT amp XML
Expand geographic scope beyond SEPA ndash Nordics UK Switzerland
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
Beyond Compliance
Seizing the opportunity for change and re-engineering
SEPA has introduced opportunities for efficiency and centralisation
Standardisation and Process Efficiency
10
The features and inherent standardisation of SEPA can help organisations in the drive to achieve efficiency
centralisation and liquidity optimisation
Elimination of local formats and exception
processes facilitates standardisation of processes
including accounts payable and accounts receivable
Harmonisation of payment instruction content
and structures - leading to system process
simplification and increased STP
Standardisation of payment execution cycles
delivering a further streamlining of payments and
collections processes
Improved reconciliation from transmission of
additional non-truncated remittance data and new
scheme fields
Standardisation of payment schemes and
payment information on basis of ISO 20022 XML ndash an
information-rich bank agnostic provides clients with
additional flexibility
Can help accelerate centralisation initiatives such
as Shared Services Centres In-house Banks and
PaymentCollection Factories
Rationalisation and centralisation of account
structures
Reduction in the number of bank relationships due
to fewer bank account requirements
Simpler cash forecasting given consistency in value
dating versus disparate national payment
infrastructures
More efficient use of liquidity via rationalised
account structures
Supporting Centralisation amp Liquidity Optimisation
Immediate Opportunities
11
As organisations are becoming SEPA compliant attention is shifting towards how to best reap investment
benefits from SEPA
bull Evaluate SEPA migration decisions manual processes and arrangements put in place to meet SEPA compliance
bull Put in place a plan for future deadlines (2016)
SDD scheme selection ndash B2B reachability
Additional Optional Services eg COR1
XML Conversion Services
Mandate Management services and process
Usage of SEPA message fields
The new SEPA Agenda
ldquoLarge and international operating companies are best positioned to benefit directly from
SEPA
A reduction of up to 9 million bank accounts resulting from more efficient corporate euro cash-
management infrastructures
We expect that companies will review their bank account structures and consolidate
processing of euro-denominated transactions across the SEPA-zone to a central location of a
prime cash management bank By doing so organisations aim to economise on bank account
fees and operate simpler and more efficient cash-pooling structuresrdquo
PWC
In recent years we have rationalised our collections banks from over 30 to just over a dozen after SEPA
compliance we will look to move to 3-4 collection banksrdquo
Multinational client
ldquoWe intend to begin moving our direct debits collections to the SEPA B2B schemerdquo
Multinational client
12
Reengineering Opportunities
13
Leverage SEPA to fundamentally re-engineer cash management structure
Bank Rationalisation ndash reducing the number of bank partners to a preferred group
Account Rationalisation ndash seeking reduction in number of Euro accounts
Receivables Optimisation - seeking standardisation andor centralisation of collection processes
Payments Optimisation ndash seeking standardisation of processes (ie vendor payroll) and or new structures (eg POBO)
Reconciliation improvements ndash improving matching rates to reduce exceptions and improve cash application
Technology rationalisation and SWIFT amp XML
Expand geographic scope beyond SEPA ndash Nordics UK Switzerland
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
SEPA has introduced opportunities for efficiency and centralisation
Standardisation and Process Efficiency
10
The features and inherent standardisation of SEPA can help organisations in the drive to achieve efficiency
centralisation and liquidity optimisation
Elimination of local formats and exception
processes facilitates standardisation of processes
including accounts payable and accounts receivable
Harmonisation of payment instruction content
and structures - leading to system process
simplification and increased STP
Standardisation of payment execution cycles
delivering a further streamlining of payments and
collections processes
Improved reconciliation from transmission of
additional non-truncated remittance data and new
scheme fields
Standardisation of payment schemes and
payment information on basis of ISO 20022 XML ndash an
information-rich bank agnostic provides clients with
additional flexibility
Can help accelerate centralisation initiatives such
as Shared Services Centres In-house Banks and
PaymentCollection Factories
Rationalisation and centralisation of account
structures
Reduction in the number of bank relationships due
to fewer bank account requirements
Simpler cash forecasting given consistency in value
dating versus disparate national payment
infrastructures
More efficient use of liquidity via rationalised
account structures
Supporting Centralisation amp Liquidity Optimisation
Immediate Opportunities
11
As organisations are becoming SEPA compliant attention is shifting towards how to best reap investment
benefits from SEPA
bull Evaluate SEPA migration decisions manual processes and arrangements put in place to meet SEPA compliance
bull Put in place a plan for future deadlines (2016)
SDD scheme selection ndash B2B reachability
Additional Optional Services eg COR1
XML Conversion Services
Mandate Management services and process
Usage of SEPA message fields
The new SEPA Agenda
ldquoLarge and international operating companies are best positioned to benefit directly from
SEPA
A reduction of up to 9 million bank accounts resulting from more efficient corporate euro cash-
management infrastructures
We expect that companies will review their bank account structures and consolidate
processing of euro-denominated transactions across the SEPA-zone to a central location of a
prime cash management bank By doing so organisations aim to economise on bank account
fees and operate simpler and more efficient cash-pooling structuresrdquo
PWC
In recent years we have rationalised our collections banks from over 30 to just over a dozen after SEPA
compliance we will look to move to 3-4 collection banksrdquo
Multinational client
ldquoWe intend to begin moving our direct debits collections to the SEPA B2B schemerdquo
Multinational client
12
Reengineering Opportunities
13
Leverage SEPA to fundamentally re-engineer cash management structure
Bank Rationalisation ndash reducing the number of bank partners to a preferred group
Account Rationalisation ndash seeking reduction in number of Euro accounts
Receivables Optimisation - seeking standardisation andor centralisation of collection processes
Payments Optimisation ndash seeking standardisation of processes (ie vendor payroll) and or new structures (eg POBO)
Reconciliation improvements ndash improving matching rates to reduce exceptions and improve cash application
Technology rationalisation and SWIFT amp XML
Expand geographic scope beyond SEPA ndash Nordics UK Switzerland
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
Immediate Opportunities
11
As organisations are becoming SEPA compliant attention is shifting towards how to best reap investment
benefits from SEPA
bull Evaluate SEPA migration decisions manual processes and arrangements put in place to meet SEPA compliance
bull Put in place a plan for future deadlines (2016)
SDD scheme selection ndash B2B reachability
Additional Optional Services eg COR1
XML Conversion Services
Mandate Management services and process
Usage of SEPA message fields
The new SEPA Agenda
ldquoLarge and international operating companies are best positioned to benefit directly from
SEPA
A reduction of up to 9 million bank accounts resulting from more efficient corporate euro cash-
management infrastructures
We expect that companies will review their bank account structures and consolidate
processing of euro-denominated transactions across the SEPA-zone to a central location of a
prime cash management bank By doing so organisations aim to economise on bank account
fees and operate simpler and more efficient cash-pooling structuresrdquo
PWC
In recent years we have rationalised our collections banks from over 30 to just over a dozen after SEPA
compliance we will look to move to 3-4 collection banksrdquo
Multinational client
ldquoWe intend to begin moving our direct debits collections to the SEPA B2B schemerdquo
Multinational client
12
Reengineering Opportunities
13
Leverage SEPA to fundamentally re-engineer cash management structure
Bank Rationalisation ndash reducing the number of bank partners to a preferred group
Account Rationalisation ndash seeking reduction in number of Euro accounts
Receivables Optimisation - seeking standardisation andor centralisation of collection processes
Payments Optimisation ndash seeking standardisation of processes (ie vendor payroll) and or new structures (eg POBO)
Reconciliation improvements ndash improving matching rates to reduce exceptions and improve cash application
Technology rationalisation and SWIFT amp XML
Expand geographic scope beyond SEPA ndash Nordics UK Switzerland
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
The new SEPA Agenda
ldquoLarge and international operating companies are best positioned to benefit directly from
SEPA
A reduction of up to 9 million bank accounts resulting from more efficient corporate euro cash-
management infrastructures
We expect that companies will review their bank account structures and consolidate
processing of euro-denominated transactions across the SEPA-zone to a central location of a
prime cash management bank By doing so organisations aim to economise on bank account
fees and operate simpler and more efficient cash-pooling structuresrdquo
PWC
In recent years we have rationalised our collections banks from over 30 to just over a dozen after SEPA
compliance we will look to move to 3-4 collection banksrdquo
Multinational client
ldquoWe intend to begin moving our direct debits collections to the SEPA B2B schemerdquo
Multinational client
12
Reengineering Opportunities
13
Leverage SEPA to fundamentally re-engineer cash management structure
Bank Rationalisation ndash reducing the number of bank partners to a preferred group
Account Rationalisation ndash seeking reduction in number of Euro accounts
Receivables Optimisation - seeking standardisation andor centralisation of collection processes
Payments Optimisation ndash seeking standardisation of processes (ie vendor payroll) and or new structures (eg POBO)
Reconciliation improvements ndash improving matching rates to reduce exceptions and improve cash application
Technology rationalisation and SWIFT amp XML
Expand geographic scope beyond SEPA ndash Nordics UK Switzerland
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
Reengineering Opportunities
13
Leverage SEPA to fundamentally re-engineer cash management structure
Bank Rationalisation ndash reducing the number of bank partners to a preferred group
Account Rationalisation ndash seeking reduction in number of Euro accounts
Receivables Optimisation - seeking standardisation andor centralisation of collection processes
Payments Optimisation ndash seeking standardisation of processes (ie vendor payroll) and or new structures (eg POBO)
Reconciliation improvements ndash improving matching rates to reduce exceptions and improve cash application
Technology rationalisation and SWIFT amp XML
Expand geographic scope beyond SEPA ndash Nordics UK Switzerland
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
Examples of Leveraging SEPA
14
Client Example 1
Multinational client with local
receivables accounts across 15+
European countries
Receivables Direct Debits and
incoming electronic transfers
With SEPA migration the
organisation took advantage to
centralise SEPA Direct debits into
one EUR account in London
Mandate management processes
also centralised utilising third party
provider
Local accounts for retained to
receive incoming SEPA Credit
Transfers - will be centralised in
phase 2
Client Example 2
Multinational industrials company
with central treasury and SSC in
Germany
Receivables Direct Debits and
incoming transfers
Adopted big bang approach to
SEPA migration
Consolidated receivables flows
including Direct debits and other
electronic flows in to one EUR
receivables account in London
Mandate management and
reconciliation managed out of SSC
A number of local accounts
retained for local receipts with TBA
structure in place
Client Example 3
Multinational organisation
operating across euro markets
Operating through a single legal
entity
Payroll accounts previously held
with multiple banks within in
country accounts
Centralised all payroll payments
by legal entity to accounts in
London
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
Assessment of Current Cash Management
Structures and Processes
Definition of Future State
Implementing Change
Practical Recommends for seizing the opportunities Accounts payment and collection instruments systems processes
legal entities etc
Analysis for all entities under consideration
Banking partners and configuration
Treasury and operational strategies
Process owners
Visibility and Controls in place today
Future cash management strategy
Bank strategy (eg rationalisation)
Process vision (SSC payment factory)
Technology strategy
SEPA changes to AP and AR processesreconciliation
Scope of changes (vendor payroll TampE treasury etc)
Engagement of parties to form this vision
Clearly defined benefits
Senior sponsorship for changes ahead
Shared vision across Finance AP Technology Treasury
Budget
Project management Timing
Alignment with other major projects
eg ERP upgrade (one instance of SAP)
Benefits tracking to ensure continued traction
15
SEPA - Phase 1
SEPA - Phase 2
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
The Next Deadlines
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
The next SEPA deadlines
17
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
Conclusions and Recommendations on Next Steps
The SEPA Extended Transition Period was introduced primarily to facilitate large
direct debit initiators and SME migrations
As organisations are becoming SEPA compliant focus is shifting towards how to
best maximise benefits from SEPA
Large international organisations are best positioned to benefit directly from SEPA
Build on the momentum of your SEPA project to achieve the benefits available
Citi is committed to helping you to seize the opportunities
18
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
QampA
19
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
such legal tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters By acceptance of these materials you and we hereby agree that from the commencement of discussions with
respect to any Transaction and notwithstanding any other provision in this presentation we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction
We are required to obtain verify and record certain information that identifies each entity that enters into a formal business relationship with us We will ask for your complete name street address and taxpayer ID number We may also
request corporate formation documents or other forms of identification to verify information provided
Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers These indications are provided solely for your information and consideration are subject to change at any time without notice and are
not intended as a solicitation with respect to the purchase or sale of any instrument The information contained in this presentation may include results of analyses from a quantitative model which represent potential future events that may or
may not be realized and is not a complete analysis of every material fact representing any product Any estimates included herein constitute our judgment as of the date hereof and are subject to change without any notice We andor our
affiliates may make a market in these instruments for our customers and for our own account Accordingly we may have a position in any such instrument at any time
Although this material may contain publicly available information about Citi corporate bond research fixed income strategy or economic and market analysis Citi policy (i) prohibits employees from offering directly or indirectly a favorable or
negative research opinion or offering to change an opinion as consideration or inducement for the receipt of business or for compensation and (ii) prohibits analysts from being compensated for specific recommendations or views contained in
research reports So as to reduce the potential for conflicts of interest as well as to reduce any appearance of conflicts of interest Citi has enacted policies and procedures designed to limit communications between its investment banking and
research personnel to specifically prescribed circumstances
copy 2014 Citibank NA All rights reserved Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc or its affiliates and are used and registered throughout the world
The information in this guide is believed to be reliable but Citi does not warrant its accuracy or completeness The guide does not constitute a recommendation to take any action and Citi is not providing
investment tax regulatory or legal advice and we recommend you seek further advice from your relevant local advisers Citi and its affiliates accept no liability whatsoever for any use of this guide or any action
taken based on or arising from the material in the guide
Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
2008 the Carbon Principles a framework for banks and their US power clients to evaluate and address carbon risks in the financing of electric power projects (f) producing equity research related to climate issues that helps to inform investors
on risks and opportunities associated with the issue and (g) engaging with a broad range of stakeholders on the issue of climate change to help advance understanding and solutions
Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
IRS Circular 230 Disclosure Citigroup Inc and its affiliates do not provide tax or legal advice Any discussion of tax matters in these materials (i) is not intended or written to be used and cannot be used or relied upon by you
for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby (Transaction) Accordingly you should seek advice based
on your particular circumstances from an independent tax advisor
Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements This presentation is not a commitment to lend syndicate a financing underwrite or
purchase securities or commit capital nor does it obligate us to enter into such a commitment nor are we acting as a fiduciary to you By accepting this presentation subject to applicable law or regulation you agree to keep confidential the
information contained herein and the existence of and proposed terms for any Transaction
Prior to entering into any Transaction you should determine without reliance upon us or our affiliates the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal tax and accounting
characterizations and consequences of any such Transaction In this regard by accepting this presentation you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal tax or accounting advice (b)
there may be legal tax or accounting risks associated with any Transaction (c) you should receive (and rely on) separate and qualified legal tax and accounting advice and (d) you should apprise senior management in your organization as to
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Citi believes that sustainability is good business practice We work closely with our clients peer financial institutions NGOs and other partners to finance solutions to climate change develop industry standards reduce our own environmental
footprint and engage with stakeholders to advance shared learning and solutions Highlights of Citirsquos unique role in promoting sustainability include (a) releasing in 2007 a Climate Change Position Statement the first US financial institution to do
so (b) targeting $50 billion over 10 years to address global climate change includes significant increases in investment and financing of renewable energy clean technology and other carbon-emission reduction activities (c) committing to an
absolute reduction in GHG emissions of all Citi owned and leased properties around the world by 10 by 2011 (d) purchasing more than 234000 MWh of carbon neutral power for our operations over the last three years (e) establishing in
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Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and where appropriate to mitigate those risks
efficiency renewable energy and mitigation
