CRITICAL THINKING AT THE CRITICAL TIME TM

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1 OFFICE OF THE CFO

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3 CRITICAL THINKING AT THE CRITICAL TIME TM FTI Consulting is a global business advisory firm that provides multidisciplinary solutions to complex challenges and opportunities. With more than 3,900 professionals and offices in 24 countries on six continents, our breadth and depth extend across every major social, political and economic hub across the globe We combine unparalleled expertise and industry knowledge to understand, protect and enhance enterprise value NYSE: FCN We are trusted advisors with diverse expertise and exceptional credentials serving clients globally $2 bil Enterprise Value 300+ Senior Managing Directors 1,300+ Clients 80 Different Disciplines 85 of Fortune 100 Companies 1

4 DRIVING ENTERPRISE VALUE The FTI Consulting service model provides a single source that addresses the interrelated issues that can affect enterprise value. Our goal is not just to address challenges but to anticipate them, surround them and deliver sustainable solutions that range from the immediate to the long term. Governance Compliance Liability Performance Reputation Enterprise Value Information FINANCE Serving as a strategic partner Building sustainable business performance Possessing an ownership mindset Fostering a supportive culture Improving decision making Increasing efficiency Delivering value to the organization Spanning countless industries, FTI Consulting has unrivaled industry expertise, providing clients with sector depth in the following areas: Energy Chemicals Life Sciences Manufacturing and Industrials Transportation Tech Real Estate and Hospitality Retail and Consumer Financial Services Communications, Media and Entertainment Aerospace and Defense Education 2

5 THE CHANGING ROLE OF THE CFO Today s CFO faces increasing challenges and demands from the board of directors, stakeholders and other external sources. This expanding role requires balancing traditional responsibilities with strategy, performance and operations, as well as risk, talent and stakeholder management. Role» Keeping score Partnering with the business Realizing value over the long term Maximizing value Efficient finance Efficient and effective finance Value creation and value preservation Responsible value creation Focus» Transaction processing Utilization of technology (e.g., best of breed) Reduction of cost of finance Business process reengineering Leveraging of technology (e.g., ERP) Management information/decision support Balance of performance and risk Integrated finance and business transformation Holistic approach Sustainable confidence and value Evaluation and pressure testing of business models and plans Analytics-led finance and business transformation Cultural approach Effectiveness of global operations 1980s 1990s 2000s PRESENT 3

6 OFFICE OF THE CFO Working collaboratively with CFOs, we provide the objectivity, structure and creativity to design pragmatic solutions and plans of action that deliver value to their organizations and build sustainable business performance. Your Trusted Advisor EARNINGS ANALYTICS Financial Transformation Event Readiness Human Capital Performance Accounting Risk Management LEADERSHIP Finance Performance Management Treasury Solutions DECISIONS The House of the CFO Is Built to LEAD Leadership Create a strong finance leadership team with a supportive culture and the right person in the right job to achieve the best service organization Earnings Analytics Decisions Build a business performance management framework for confidence and clarity of vision and manage the message to stakeholders Enable insight through data analytics driven by mastering technology and building internal business partnerships Develop a sustainable business model with consideration of enterprise risk, portfolio analysis and transaction readiness 4

7 OUR SOLUTIONS Our solutions are driven by the six areas that most concern a CFO. We take pride in our roll-up-the-sleeves work ethic to take control of your inbox; establish a stable, efficient organization; and implement solutions that maximize your organization s performance. Financial Transformation Create a financially aware enterprise to drive strategic business imperatives throughout the organization, create value and enable sustainable financial performance Event Readiness Manage the path to an event across critical workstreams; identify, assess and address the operational gaps; and work collaboratively to create a foundation that will provide success Finance Performance Management Transform performance planning and management processes into dynamic, efficient and connected experiences to create an analytics-driven enterprise Accounting Risk Management Implement and monitor accounting best practices, close the books faster with confidence, and identify and manage accounting risks Treasury Solutions Redesign processes, manage risks and strengthen controls to enable treasury to operate as an effective business partner Human Capital Performance Optimize finance team performance and efficiency through organizational planning and design, robust talent management and timely communications 5

8 TRANSFORMING COMPANIES FROM GOOD TO GREAT COMPANY STRATEGY 1 PROCESS ONGOING COMPANY OPERATIONS 2 Company Business Plan Finance Performance Management Human Capital Performance Refine EXECUTE STRATEGIC COMMUNICATIONS 5 P E O P L E Assess Accounting Risk Management Treasury Solutions T E C H N O L O G Y EVENT PREPARATION TRANSFORMATION ROAD MAP 3 Event Readiness 4 CONTINUOUS LEARNING ORGANIZATION Financial Transformation Achieving the Vision of Greatness 1 Business plan pressure tested for sustainability 2 Portfolio analytics determines the call to action 3 CFO organization drives agenda for financial transformation and events 4 FTI Consulting subject matter experts augment strategy and act as agents of change 5 Strategic Communications creates the internal/external story to stakeholders 6

9 FINANCIAL TRANSFORMATION Create a financially aware enterprise to drive strategic business imperatives throughout the organization, create value and enable sustainable financial performance. Operations Strategy Sales and Marketing Transformation Planning Finance Operations Effectiveness People and Culture Strategy Finance Sustainable Performance Shared Services Cost Optimization Data Analytics and Technology Products Process Customers Financial Transformation Framework Targeted operating model defined with a clear vision of the transformation Competent finance skills to support and extend corporate strategy Variable and flexible delivery model and system Sourcing of good quality data from systems to achieve efficient processing and less manual remediation Strong change and communications team involved in every aspect of the transformation Robust cost and profit culture bolstered by a reward structure toward sustained cost/ profit performance 7

10 EVENT READINESS Manage the path to an event across critical workstreams; identify, assess and address the operational gaps; and work collaboratively to create a foundation that will provide success. Strong Value Proposition Company Strategy Robust Operating Model IPO Assess Company Business Plan Refine EXECUTE Acquisition Sound Capital Structure Effective Organizational Platform Divestiture Event Readiness Framework Portfolio evaluation Assessment of the day one operating model Pressure testing of the business plan and underlying model Development of robust and detailed analytics Clear and frequent communications and reporting Comprehensive project management and swift issue resolution Rapid establishment of an efficient and effective organization Continuous evaluation, assessment and monitoring to minimize stranded costs 8

11 FINANCE PERFORMANCE MANAGEMENT Transform performance planning and management processes into dynamic, efficient and connected experiences to create an analytics-driven enterprise with confidence and clarity. Report and Monitor STRATEGIC FINANCE BUSINESS PERFORMANCE MANAGEMENT BUSINESS INTELLIGENCE Strategize and Prioritize Performance Measurement Human Performance Budgeting and Forecasting Planning and Simulation Cost Management Profitability Management Enterprise Insight and Management Reporting Effective Dashboards Financial Insight and Consolidations Data Governance Reporting Strategy Plan and Execute Communications and Change Model and Optimize Finance Performance Management Framework Enhance decision making with information insights and data visualization Provide methods, tools and insights to achieve peak profitability Render information that is more accurate, timely and transparent Maintain single-version-of-the-truth (SVOT) approach Increase efficiency and reduce manual effort, with fewer systems and paper reports Improve organizational alignment and risk management Establish a stronger link between performance and strategy 9

12 ACCOUNTING RISK MANAGEMENT Implement and monitor accounting best practices, close the books faster with confidence, and identify and manage accounting risks. Stewardship Remediation Material Weakness/ Significant Deficiency Remediation Accounting Policy Preparation Technical Accounting Analysis Accuracy Assurance Governance and Compliance SOX Compliance and Corporate Governance SEC Reporting and Disclosure Support Risk-Based Balance Sheet Reviews Risk Management Transparency Accounting Risk Management Framework Understanding of the internal management environment and strategic objectives Ability to identify, assess, control and respond to the risks and opportunities that impact those objectives Management through competing priorities, inadequate resources, and insufficient understanding of core risk management principles and values Effective use of heat maps to identify risk hot spots and action steps to mitigate risk Diagnosis and remediation of inefficiencies in the accounting close cycle Implementation of communications, training and policies for a risk-aware culture Governance and compliance driven through surveys and impactful methodologies 10

13 TREASURY SOLUTIONS Redesign processes, manage risks and strengthen controls to enable treasury to operate as an effective business partner. Our team s depth and experience span all areas of treasury from liquidity risk management to funding strategy to operations to treasury systems, allowing us to work quickly to develop and implement a solution that is tailored to the company s situation. Operations and Back Office Risk Management Maximize Return Minimize Risk Effective Business Partner Strengthen Controls Systems and Technology Liquidity and Funding Treasury Solutions Framework Risk management and investment return maximization through data analytics and visualization Accurate forecasting and process methodology to holistically manage liquidity risk Understanding of strategic objectives to create flexible and optimized capital structure to support business needs Proactive decision making enabled through technology supported by strong financial performance management tools 11

14 HUMAN CAPITAL PERFORMANCE Optimize finance team performance and efficiency through organizational planning and design, robust talent management and timely communications. Gain an edge in the war on talent and build a winning finance team. Right People Right Skills Organizational Planning and Design and Alignment Finance Organizational Strategy Rewards and Mobility Promote Retain and Creating a High Performance Culture Drives Superior Business Results Retire Acquire and Recruiting Assess and Right Role Develop Performance Management Right Time Human Capital Performance Framework Alignment of finance as a strategic business partner throughout the organization A winning team built and driven by finance in collaboration with human resources Team ownership mindset delivering critical corporate initiatives The right people with the right skills in the right roles at the right time 12

15 WHY HIRE THE OFFICE OF THE CFO TEAM? UNIQUE PERSPECTIVE TRUSTED ADVISORS Creating shareholder value through a risk-aware culture, a foundation to our practice Equipping our engagements with small teams of highly experienced personnel, robust methodologies and industry expertise Exceeding expectations and delivering thoughtful, concise advice in sync with your vision for finance Providing insights and challenging the organization s leaders to consider measured alternatives to current thinking but always with tactical implementation actions in mind Balancing an external perspective with the level of organizational change the company can support in line with your desired goals Winning your confidence and delivering on your agenda THE OFFICE OF THE CFO TEAM ADVANTAGE Performing analytics and modeling to monitor performance and ensure targets are being achieved and benefits captured Driving the change agenda as the program management office Building dashboards and business intelligence tools Developing and executing communications and change management plans Filling interim management roles, particularly in finance, accounting, treasury, and financial planning and analysis Identifying and capturing cost optimization efforts Leading event readiness efforts such as initial public offerings and divestitures before the deal announcement Identifying control weaknesses and implementing remediation efforts Building better finance teams to lead great organizations 13

16 CASE STUDIES FINANCIAL TRANSFORMATION AND IPO READINESS Global Hospitality Company On the heels of an international merger, an acquisition by a private equity investor and a restructuring that reduced headcount and relocated company headquarters, a global hospitality company engaged FTI Consulting to transform the finance organization and prepare for an initial public offering (IPO). Our professionals partnered with a team of new finance leaders to develop complex financial models, fulfill various interim management roles, execute communications and change management plans, and manage several financial system and process improvement initiatives. Throughout a resource-constrained and segmented organization, the FTI Consulting team was instrumental in collaboratively driving enhancements in the review, accuracy and timeliness of the financial consolidation and reporting process while leading the creation and standardization of key accounting policies and procedures. Our project management expertise frequently was tapped by the company to support high-impact enterprise-wide initiatives, including a global financial systems re-implementation, finance organizational realignment and company-wide preparation for an IPO, global debt refinancing and tax restructuring. The value derived from our work has been demonstrated in the efficient upgrading of the policies, processes and communications infrastructure, enabling the finance organization to drive corporate strategic initiatives in a cost-effective manner. Our colleagues continue to be agents of change to drive efficiency improvements while building a risk-aware culture. POST-MERGER INTEGRATION The Coca-Cola Company In 2010, The Coca-Cola Company announced that it would acquire its largest bottler, Coca-Cola Enterprises, for approximately $12.3 billion. FTI Consulting provided merger communications and investor relations counsel to mitigate overall risk and help advise The Coca-Cola Company in developing strategies to engage and communicate directly with key internal and external stakeholders throughout each phase of the transaction. FINANCIAL SYSTEM OPTIMIZATION Premier Jewelry Designer FTI Consulting was engaged by a premier luxury jewelry designer to assist with both business process improvement and finance department transformation. Our team developed critical solutions to increase organizational effectiveness in managing the order-to-cash cycle and helped the company raise customer service levels. Working capital management was heightened, and inventory levels were reduced through diligent collaborative efforts between FTI Consulting and the company s management teams. The company ultimately was better positioned to use technology, demonstrated improved process responsiveness through the inclusion of best practices and introduced requisite discipline in key processes. The strategic vision for finance was embraced, and the company is prepared for global expansion. 14

17 CASE STUDIES CARVE-OUT ACQUISITION SUPPORT Global Chemical Company After a private equity sponsor acquired a $5 billion subsidiary of a much larger, $50 billion chemical company, the new standalone entity was left without an accounting or finance organization. FTI Consulting played the role of interim treasurer, controller, and head of financial planning and analysis (FP&A) to support the establishment of a finance organization. Our professionals managed all cashrelated activities in coordination with the seller s treasury staff. We built a global treasury function by hiring personnel in Europe, Asia and South America to facilitate the movement of cash among dozens of countries. FTI Consulting also led the creation of separate financial reporting, tracking reporting across several legal entities around the world. In addition, we developed an FP&A function to drive the nearand long-term budgeting and planning processes. Working closely with the sponsor and management, we established policies and procedures and performed reporting and analysis across business segments. Through the course of our work, we assisted the company in forming relationships with key external stakeholders, including vendors, lenders and other capital providers. As a result, the sponsor and company were able to undertake a $600 million leveraged recapitalization, leading to a significant distribution to shareholders. IPO READINESS Restoration Hardware Restoration Hardware listed its shares on the New York Stock Exchange in November 2012, days after Superstorm Sandy wreaked havoc on the east coast of the United States. FTI Consulting helped the company develop and communicate its messaging platform; drive communications efforts to all key stakeholders, including investors, employees and the media; and execute a positive listing day. FTI Consulting successfully aided the company in outlining its strategic advantages in a market with many challenges. Activities included targeting and messaging advisory services during the IPO preparation process, as well as listing day support. Restoration Hardware traded up 30 percent on its first day of trading, and in the weeks that followed, it continued to command this premium. The company also outsourced its investor relations function to FTI Consulting following the listing and has continued to leverage our firm s counsel and support of the investor relations program. IPO READINESS AND FINANCE PERFORMANCE MANAGEMENT Mortgage REIT FTI Consulting assisted a global investment manager, with more than $10 billion in assets under management, in successfully launching a publicly traded mortgage real estate investment trust (REIT). Our professionals advised the company through the U.S. Securities and Exchange Commission (SEC) registration process. Within the finance organization, we helped implement web-based accounting and financial reporting software and acted as the REIT s chief accounting officer. Our role included maintaining books and records of the REIT and its subsidiaries, determining key metrics calculations, performing REIT compliance testing, and preparing all financial statements for inclusion in quarterly and annual financial reports. 15

18 CASE STUDIES FINANCIAL TRANSFORMATION Global Car Rental Company Following the acquisition of the business by a private equity investor and chief executive-led team, a series of engagements was embarked upon to augment efforts to revitalize the business. Working closely with the executive team, we assisted in the development of comprehensive financial models, served in interim management roles, and supplemented management resources in various financial and accounting operating areas. Our professionals were instrumental in establishing and managing key ad hoc systems projects focused on business intelligence to provide the chief financial officer with critical financial and operating reports to support SEC and private equity sponsor requests. In addition, FTI Consulting added significant value in analyzing and facilitating asset sales and purchases. With our assistance, the company was able to successfully transition its headquarters across the country and prepare an S-1 shelf registration. FTI Consulting also provided the additional resources needed to prepare the company for ultimate sale to a competitor at a superior value for management and the private equity sponsor. FINANCE PERFORMANCE MANAGEMENT Waste Management Service Provider The company, a provider of waste management services, had recently acquired a business saddled with material misstatements in historical and projected earnings. At the same time, the company s core business was performing below expectations so the organization was behind on its integration efforts. FTI Consulting was retained and immediately reviewed financial statements for defalcations, errors and omissions. We also aided the company in gaining visibility into its operations and near-term earnings by developing and implementing operational metrics and key performance indicators. This included establishing a comprehensive strategic and financial planning process and presenting a revised plan to lenders and public markets, resetting their expectations and providing clearer, more accurate ongoing guidance. FTI Consulting also facilitated the settlement with the seller of the recently acquired business, enabling the recovery of millions in cash and the forgiveness of deferred compensation. TREASURY SOLUTIONS Apparel Retailer A $1 billion direct-to-market apparel retailer was given 90 days to transfer all its cash management services for operations from a major money center bank after it had switched its credit relations from the institution. Sixty days later, the project had not commenced, and the treasurer resigned. FTI Consulting assumed the role of interim treasurer and worked on an expedited time frame to lead the development and execution of a plan to effectively transfer all cash management services to a new bank within 45 days; coordinate the systemic requirements for the transfer and receipt of information required to effectively manage the cash management cycle; reduce bank service fees by 35 percent; transition trade financing requirements from the old bank to a different service provider; develop a post-transition plan to more efficiently integrate cash management systems and information; and transition the process back to the company. The total time frame was approximately 50 days. 16

19 fticonsulting.com/officeofthecfo About FTI Consulting FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. FTI Consulting professionals, who are located in all major business centers throughout the world, work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management and restructuring. More information can be found at FTI Consulting, Inc. All rights reserved.