Panel Discussion was presented at Peninsula Treasury Management Association Monthly Luncheon. The following presented: Helen Kane, President, Hedge Trackers; Laura Langone, Director Global Risk Management, Juniper Networks; Guillermo Gualino, Assistant Treasurer, Agilent Technologies; Tamara Anthony, Director of Treasury, Lam Research. They discussed the risk factors and the due diligence performed by your treasury peers to address the possibility of one or multiple countries defecting from the Euro. All areas of treasury are contemplated including operational cash management, currency hedge programs, counter-party risk and enterprise risk. We will also discuss how other treasury groups and peer organizations are raising awareness, how best to educate senior management and how to identify potential tax and legal implications.

1. 1
Euro Dissolution Panel Discussion
--
Giving Treasury the Tools to Take
the Lead
Peninsula Treasury Management Association
March 28th, 2012

2. 2
Agenda
• Introductions
• Latest news
• Creating a framework for risk
• Actions Taken
• Communication and Disclosure
• Questions
• Conclusion

3. 3
Panel Introductions
• Tamara Anthony Lam Research
• Guillermo Gualino Agilent Technologies
• Laura Langone Juniper Networks
• Helen Kane Hedge Trackers

4. 4
The New Normal
Not will it or won’t it
But…..
If it does will you be ready
(Greece or general contagion)

5. 5
In the News
Dow off over 200 points as economy,
Greece hit Wall Street
Reuters, March 6, 2012
EU's Van Rompuy warns over complacency
in euro debt crisis
Reuters, March 4, 2012
European Focus Shifts to Crisis Firewall
Ahead of Summit
Bloomberg, February 27, 2012
Chance of Greece default remains high,
says Moody’s
Business Times, February 28, 2012

6. 6
In the News
A new €130 billion ($172 billion) bailout deal "binds
Greece to euro" and will shield the country from
default, the finance minister Evangelos Venizelos
said Wednesday.
AP, February 22, 2012
Chancellor Angela Merkel's conservative Interior
Minister became the first member of her centre-
right government to openly call for Greece to leave
the euro zone.
Reuters, February 25, 2012

7. 7
Starting Point
• How did Treasury get involved?

8. 8
Create a Framework to Understand Risk
Direct or indirect exposure to the Euro-Zone within Treasury
and Company
Contractual exposures
Business continuity plans of direct and indirect
counterparties
Business systems preparedness
Supplier risks (i.e., credit exposure, supply issues, etc…)

9. 9
Commonalities in Approach
• Identify company financial assets at risk
▫ Cash
▫ Debt
▫ Financial instruments
• Identify enterprise risk
▫ Supply chain
▫ Customers
▫ Employees

10. 10
Risk Scenarios
Highlight Summary
1. Status Quo – Highly likely the status quo will continue with some degree of
Continued Market closer fiscal cooperation required to enforce fiscal policies
Turmoil Similar Continued extreme volatility on macro-economy and FX risk
to Past 6 Months High likelihood of Euro-zone recession impacting growth
2. Weakest Moderate risk
Member Creates risk of “exit contagion” particularly if Greece is pushed
Exits /Greece out
Exiting member state’s currency to legacy currency
redenomination
3. Euro Zone Highly unlikely due to catastrophic economic consequences
Break- Highly uncertain FX dynamics for both strong and weak
up/German currencies
Exit Significant interruptions in banking and clearing infrastructure

11. 11
Actions Taken

12. 12
Agilent- Top Preventive Actions
• Counterparties: Monitor banks, limit exposure to
banks with significant activity in high-risk countries
▫ Centralize sovereign countries’ liquidity with global banks
and offshore MMF
• Natural Hedges: Increase matching of IC AP/AR,
dividends, cash conversions, etc.
• Convert EUR to USD: Change the underlying risk
while maintaining the same FX risk profile
• Debt: Refinance soon-to-mature debt, taking advantage
of favorable market windows
• Contracts: Review material contracts (credit,
derivatives, etc) for currency indemnity provisions and
events that could trigger MAC clauses

13. 13
Juniper Networks: Potential impact
Key Issues Potential Impact to Juniper
Investments Potential indirect sovereign risk exposure
Weekly monitoring of global counterparties
Liquidity Monthly bank holdings in EMEA and those denominated in EUR
Interruptions in local banking and clearing infrastructure
Potential impact on intercompany funding as balances would be
redenominated
Derivatives EUR OPEX
Legal Potential contract unenforceability
Non-Payment and insolvency of customers
Temporary government regulations
Supply Chain Potential risk from credit exposures to customers and obligations
to suppliers
Smaller suppliers and distributors may be hit with hard costs and
currency conversion risk

14. 14
Juniper Networks: Actions/Contingency Plans
Key Issues Juniper Actions / Contingency Plans
Investments No direct sovereign investments as of Q1-11
Monitor and take action on indirect exposure
Liquidity Diversify EUR bank balances to stronger member state banks (i.e.,
Netherlands and Germany)
Positively positioned with banks in EMEA with European-wide
capabilities
Confirm bank business continuity 1-day post event
Derivatives Monitor FX volatility
Evaluate EUR-centric documentation for cash flow hedges
Evaluate ISDAs for FX redenomination
Legal Legal evaluating other key contract provisions
Negotiate payments in EUR and/or USD
Supply Chain Identify potential customers at risk
Explore potential trade credit and financing solutions

15. 15
Lam Research – Actions/Conclusions
Financial Risk Assessment Euro-zone Countries Euro-zone Countries
With no Lam Presence With Lam Presence
Banking Relationships NA Risks Low – identified banks
/assessed counter party risks
Cash Assets Risk Low – MMF’s Risks Low - bank balances, deposits,
* Deposits, investments (include MMF holdings)
* Investments
Foreign Exchange NA Risks Low - FX - notional/MTM
Debt & Lines of Credit NA Risk Low - identified exposures by
financial institution/country
Trade Finance NA Risks Low
Enterprise Wide Risk Assessment Euro-zone Countries Euro-zone Countries
With no Lam Presence With Lam Presence
Number of Employees NA Risk Low - identified employees by
country and assessed risk
Buildings NA Risk Low - exposures in various
countries (owned/leased)
Customers - AR NA Risk Low - assess and monitor
customers by domiciliation & by
global account
Supply Chain Supply Chain – BCP planning for Supply Chain – BCP planning for
disruptions disruptions

16. 16
Hedge Accounting Implications
• Impact on natural hedge relationships
• Cash Flow Hedges
▫ Probability
▫ Documentation
Layering
Defining countries of exposure
• ISDAs
• Net Investment Hedging

17. 17
Communication & Disclosure
Internal
Get stakeholders “on the bus”
Who
Preparedness
Senior management, SOX
Bus’n continuity planning committee
External
Disclosures (10K/10Q)
Preparation for analyst calls/road shows

18. 18
Lam 10K Disclosure
Our Future Success Depends Heavily on International
Sales and the Management of Global Operations
We are subject to various challenges related to international
sales and the management of global operations including, but
not limited to………
▫ Global economic and political conditions, including the
ongoing macroeconomic challenges associated with debt
levels in certain Euro-zone countries and the financial
contagion to global markets;

19. 19
Your Thoughts and Questions

20. 20
Conclusion
• Regardless of where Greece ends up our new
normal is more global risk planning
• Create a framework for identifying key risk areas
• Work with stakeholders across company
• Have a plan for different scenarios
• Communicate internally and externally

21. 21
Contact Information
• Tamara Anthony: Tamara.Anthony@lamresearch.com
• Guillermo Gualino: Guillermo_gualino@agilent.com
• Laura Langone: langone@juniper.com
• Helen Kane: hkane@hedgetrackers.com
Additional resource
• A Primer on the Euro Breakup (Variant Perception)
http://www.scribd.com/doc/82034180/VP-February-2012-Eurozone-Breakup-Summary