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Treasury Today Country Profiles in association with Citi

Adam Smith Webinar with Intel

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  1. Christian Wild, Analyst Process Optimization, Hoerbiger – Switzerland asked:

    How do you maintain the right quality of cash flows forecasted/liquidity planning to have accurate data for hedge accounting-effective hedges?

    Regan Nanbara, Director, Cash Management, Intel answered:

    I will break this down into components because they are different things in our environment and I am not sure what the specific question is.

    • First of all, our BV cash pooling centre is not involved with the hedge accounting-effective hedges. However, coincidentally our US centre is. I say coincidentally because we draw a distinction between the cash pooling centre job of managing liquidity and the hedging operation job of managing the balance sheet hedges and the cash flow hedges requiring hedge accounting.
    • The cash pooling centres do receive cash flow forecasts for liquidity planning. Short term, within a month, for actual spends. Long term liquidity, greater than a year, for the large ticket items such as major capex spends.
    • In general opex is a constant number which is easily extrapolated from past data. Capex is the large variable which requires more analysis but that already happens in our finance department that schedule the factory capex programmes so that data comes from them.
    • In both cases, we usually hedge for 18 months in advance but in layers so over time as the exposures become clearer, the aggregate total of hedges are coming closer to the maximum level of hedge desired.
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    qa@treasurytoday.com 2015-01-22 11:02:54