Carolina Cash ExchangeNavigating the Global Banking LandscapeStrategies for implementing best practices

Meet Our Presenters

Anthony GuideCTP, CertlCM, International

Advisor

Anthony.Guide@pnc.com

Ethan KellerCTP, Treasury Analystethan.keller@ansys.com

2

Bill AdamsSenior International Economist

@pnc.com

2

ANSYS, Inc. (NASDAQ: ANSS)Company at a Glance

Founded in 1970

Over 1B in annual revenue

3,000 professionals. HQ in Pennsylvania, entities in

20 countries, more than 75 strategic sales locations

and channel partners in 40+ countries.

Largest engineering software simulation company in

the world with more than 40,000+ customers.

3.2%

3.3%

3.4%

3.5%

3.6%

3.7%

3.8%

2017P 2018F 2019F 2020F

2017 Forecast 2018 Forecast

Global Real GDP Growth

GLOBAL GROWTH IS BEATING EXPECTATIONS FOR THE FIRST TIME SINCE 2011

Sources: IMF World Economic Outlook Databases, April 2017 and April 2018; P=preliminary, F=forecast

WE EXPECT THE US YIELD CURVE TO FLATTEN BUT NOT

“INVERT” AS THE FED RAISES RATES

Source: PNC Economics April 2018 Baseline Economic Forecast

0%

1%

2%

3%

4%

5%

6%

Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19

10-year Treasury bond yield

Federal funds effective rate

WE THINK MOST OF THE DOLLAR’S APPRECIATION IS IN THE REAR VIEW WINDOW

Source: PNC Economics April 2018 Exchange Rate Forecasts

100

105

110

115

120

125

130

U.S. dollar broad index, Jan. 1997 = 100

PNC Forecast

IN THE EURO ECONOMIES, GROWTH IS MODERATING IN 2018 AFTER A ROBUST 2017

Sources: EU Directorate-General for Economic and Financial Affairs, CEIC

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

80

85

90

95

100

105

110

115

120

Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16 Jan 17 Jan 18

Economic SentimentIndex (Orange)

Business Climate Indicator (Blue)

EURO AREA MONETARY POLICY COULD ROIL FINANCIAL MARKETS IN 2019

Sources: European Central Bank, CEIC, PNC Economics forecasts

-0.50%

-0.25%

0.00%

0.25%

0.50%

0.75%

1.00%

-€50

-€25

€0

€25

€50

€75

€100

4/2015 4/2016 4/2017 4/2018 4/2019

ECB's monthly asset purchases ("QE")

ECB policydeposit rate, %

PNC Forecasts

NEW LEADERSHIP AT THE EUROPEAN CENTRAL BANK COULD MOVE THE EURO HIGHER

Source: PNC Economics April 2018 Exchange Rate Forecasts

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1.45

1.50U.S. dollars per euro

PNC Forecast

BREXIT’S MOST FRAUGHT DILEMMA IS NORTHERN IRELAND’S BORDER WITH THE REPUBLIC OF IRELAND

Source: European Commission, https://ec.europa.eu/commission/sites/beta-political/files/slide_presented_by_barnier_at_euco_15-12-2017.pdf

Ukraine

Norway

Iceland

Liechtenstein

Turkey

S Korea

Canada

Switzerland

“BREVERMIND” WOULD SUPPORT A RECOVERY OF THE POUND STERLING

Source: PNC Economics April 2018 Exchange Rate Forecasts

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8U.S. $ per U.K. pound sterlingU.S. $ per U.K. pound sterling

PNC Forecast

CANADA’S GROWTH IS MODERATING TOO, BUT THE OUTLOOK IS STILL PRETTY SOLID

Source: Bank of Canada’s Quarterly Business Outlook Survey

-10

0

10

20

30

40

50

60

Mar-14 Mar-15 Mar-16 Mar-17 Mar-18

Sales Investment Hiring

Canadian Business Outlook: Balance of Opinion100 = all positive, -100 = all negative

HOUSING IS CANADA’S ACHILLES' HEEL

Sources: Canada Real Estate Association, Bloomberg, PNC Economics’ calculations

90

95

100

105

110

115

120

125

130

Jan 13 Jan 14 Jan 15 Jan 16 Jan 17 Jan 18

Canadian monthly home sales, index: December 2012 = 100

WITH AN EYE ON HOUSING, THE BANK OF CANADA WILL HIKE SLOWER THAN THE FED THIS TIME

Source: PNC Economics April 2018 Exchange Rate Forecasts

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1.45Canadian dollars per U.S. dollar

PNC Forecast

MEXICO IS LAGGING BECAUSE OF FALLING OIL OUTPUT, NAFTA, & ELECTION UNCERTAINTY

Sources: INEGI, CEIC

75

80

85

90

95

100

105

110

115

Jan 14 Jan 15 Jan 16 Jan 17 Jan 18

Industrial Production

Oil & Mining

Construction

Manufacturing

Monthly Production Indices, 2013 = 100

PESO STANDS TO APPRECIATE IF POLITICAL TAIL RISKS STAY CONTAINED AS WE EXPECT

Source: PNC Economics April 2018 Exchange Rate Forecasts

12

13

14

15

16

17

18

19

20

21

22Mexican pesos per U.S. dollar

PNC Forecast

Mexican Pesos per US Dollar

CHINA IS TIGHTENING CREDIT, A HEADWIND TO COMMODITY-INTENSIVE INVESTMENT

Sources: People’s Bank of China, National Bureau of Statistics, CEIC, PNC Economics calculationsNote: Real credit aggregates are adjusted for inflation using PNC Economics’ estimate of the monthly Chinese GDP deflator

0%

10%

20%

30%

40%

'98 '02 '06 '10 '14 '18

Real Credit Aggregates,Year Over Year Growth

LoansBroadMoneySupply

0%

1%

2%

3%

4%

5%

6%

Jan 15 Jan 16 Jan 17 Jan 18

Effective interest rates, %

1 Week Policy Rate

1 Month Interbank Rate

CHINESE GOVERNMENT SPENDING IS ALSO PROVIDING LESS SUPPORT TO GROWTH

Sources: Ministry of Finance, National Bureau of Statistics, CEIC, PNC Economics calculations

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%Central Government Fiscal Deficit as % of GDP4-Quarter Rolling Average

YUAN LIKELY TO DEPRECIATE AS GROWTH SLOWS LATER IN 2018 AND IN 2019

Source: PNC Economics April 2018 Exchange Rate Forecasts

6.0

6.1

6.2

6.3

6.4

6.5

6.6

6.7

6.8

6.9

7.0Chinese yuan per U.S. dollar

PNC Forecast

UPSIDE AND DOWNSIDE RISKS TO THE OUTLOOK

Source: PNC Economics

• Virtuous cycle of stronger global growth could resume

• Possible US infrastructure plan or favorable regulatory changes

• “Lowflation” could give expansion more room to run

• Hotter economy

Upside Risks:

• US might simultaneously tighten fiscal and monetary policy in

2020

• Withdrawal of monetary stimulus in other advanced economies

• Trade friction

• Hotter global economy might turn into an overheating economy

Downside Risks:

20

Best Practices in International Treasury Management

Governance and Controls

Treasury and Account

Structures

Visibility and Forecasting

Payments Efficiencies

Cross-border WC and Liquidity

Risk Management and Hedging

Regulations/Tax Structure

Bank Partnerships/De-risking

Market Knowledge

Systems Strategy

Fraud/Cyber

Benchmark and Measurement

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Governance and Controls

22

Account Structure

Transactional volumes

Signatory requirements

Fraud prevention

Cross border transactions

Local credit facilities

Check receivables

23

Optimizing Account Structures

Determine the best account structure and mix based upon your business:

U.S.-Based Account for international payments in USD and FX

Multicurrency Accounts – U.S. Domiciled

In-Country Account

Cost–Benefit Analysis/Considerations

Volume and currency of transactions to compare transaction and FX fees

Low-value networks (SEPA and Canadian EFT) vs. International Payments

Proximity to clients/suppliers for billing/payment purposes (Canadian cheques)

Local market services (payroll, taxes), cap reqs and central bank/currency controls

Account opening reqs (KYC, resident vs. non-)

Consider multicurrency accounts vs. offshore accounts

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Global Account Visibility

25

Building an Efficient Payment Strategy

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Building an Efficient Payment Strategy

International USD and

FX payments

All US payments

Canadian Wires

Payables Advantage Platform File Processing

International USD and

FX payments

All US payments

Canadian EFT/ACH,

cheque, Positive Pay

Web Payments

File Upload/Transmission

SWIFT for Corporates

Foreign Bank

Foreign Bank

Standardized

Gateway

Your

Company

Best Practice

International dashboard for Payment

centralization and consolidation (U.S.,

international, and local markets) via

web, transmission or SWIFT

27

Forecasting

Determine the forecasting tool (Excel, TMS, etc.)

Identify sources of forecast information (completed locally or centrally)

Specify the time horizon

Short term: less than one year Long term: greater than one year

Analyze actual vs. forecast variances and continually refine forecasts

Best Practices

Obtaining real-time visibility into accounts is critical for accurate starting point.

Excel-based forecasting has limitations but higher degree of flexibility and significant cost savings vs. a TMS.

Keep the forecast simple and manageable. The longer the list of forecasting categories, the greater the threat to accuracy.

28

Intercompany Management

Rationalize current intercompany settlement processes — Do you have a large volume of intercompany transactions? How are they being settled?

Prevent unexpected cash requests by requiring locally submitted cash flow forecasts

Defined policies adopted company-wide to reduce last-minute intercompany lending and establish control over local units (example: cannot ask for cash unless forecast warrants it)

Large volume of IC invoices being settled bilaterally? Is IC netting appropriate?

Do you have staff to manage IC transactions? Do you have the systems?

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Intercompany Management

30

Market Knowledge – International Resources

AFP Country Profile Reports

−Updated quarterly

−32 country profiles

−Available through AFP site

31

Standard Disclaimer

The web seminar and/or materials were prepared for general information purposes only and are not intended as legal, tax,

accounting or financial advice, or recommendations to buy or sell securities or currencies or to engage in any specific

transactions, and do not purport to be comprehensive. Under no circumstances should any information contained in the web

seminar and/or materials be used or considered as an offer or a solicitation of an offer to participate in any particular

transaction or strategy. Any reliance upon any such information is solely and exclusively at your own risk. Please consult your

own counsel, accountant or other advisor regarding your specific situation. Any views expressed in the web seminar and/or

materials are subject to change without notice due to market conditions and other factors.

PNC is a registered service mark of The PNC Financial Services Group, Inc. (“PNC”). Bank deposit, treasury management,

and lending products and services are provided by PNC Bank, National Association (“PNC Bank”), Member FDIC and a

wholly-owned subsidiary of PNC. Foreign Exchange and derivative products are obligations of PNC Bank, are not bank

deposits and are not FDIC insured, nor are they insured or guaranteed by PNC Bank or any of its subsidiaries or affiliates.

©2017 The PNC Financial Services Group, Inc. All rights reserved.

THANKS FOR HAVING ME

For more PNC economic forecasts, visitwww.pnc.com/economicreports

And for investment strategy insights, seehttps://www.pnc.com/en/personal-banking/wealth-management/investment-corner/Investment-Corner.html

Disclaimer: The material presented is of a general nature and does not constitute theprovision of investment or economic advice to any person, or a recommendation to buy or sellany security or adopt any investment strategy. Opinions and forecasts expressed herein aresubject to change without notice. Relevant information was obtained from sources deemedreliable. Such information is not guaranteed as to its accuracy. You should seek the advice ofan investment professional to tailor a financial plan to your particular needs.

© 2018 The PNC Financial Services Group, Inc. All rights reserved.

Questions?

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