1. Tower46 LLC www.tower46.com Tower46 LLC www.tower46.com FORAD Multinational Business Finance Simulation Corporate Learning

2. Tower46 LLC www.tower46.com 2  Executive summary  The FORAD simulation:  FORAD company structure and details  Decisions process  Performance measures  Simulation process  Reporting  Learning points  Benefits for the corporation  Logistics and sample schedule

3. Tower46 LLC www.tower46.com 3 EXPERIENCE: The FORAD business finance simulation is a computer-based game designed to help players, usually in teams of 3 to 5, understand what it takes to manage the financial and operational challenges of a multinational corporation. FORAD is typically structured as a competition between 5-10 teams. LEARNING POINTS: During the course of the competition, the players gain complex corporate finance knowledge and practice crucial managerial and leadership skills. A successful FORAD team demonstrates competencies in Operational Planning, Capital Structure, Hedging, Derivatives, Debt & Cash Management, F/X, Tax Optimization, and Intercompany/Transfer Pricing Strategies. PLAYERS: While pre-existing knowledge is helpful, it is not a requirement. The Players Manual details how to play FORAD, and the model generates all reporting automatically. Additionally, the players can use the application to test concepts and ideas and examine the effects real time. BENEFITS: The FORAD competition enhances employees’ professional knowledge, increases engagement and motivation, and reveals employee talent.

4. Tower46 LLC www.tower46.com 4 Banks: LT/ST loans; FX hedging instruments Shareholders: Equity; Dividends Clients: Domestic sales; International sales IC loans and dividends IC trade U.S. Holding Company Japan Operational Subsidiary Germany Operational Subsidiary Banks: LT/ST loans; FX hedging instruments Banks: LT/ST loans; FX hedging instruments Clients: Domestic sales; International sales IC loans and dividends Consolidated FORAD Company IC: Inter-company ST: Short-term LT: Long-term

5. Tower46 LLC www.tower46.com Multiple steps, but no formal flow or limit for the desired iterations Preparation - analyze company’s results, study competitors’ results; forecast the market data; set goals and plan the current period Operations – decide capacity and production levels, looks for ways to improve revenues and profitability Financing and investing – review the company needs or excess resources; borrow or repay debt, decide on maturity and currency, issue equity or buyback shares Review – examine expected results, stress test for unexpected market data, think for ways to increase EPS and/or PE score, adjust the decisions Tax management – search for opportunities to lower corporate tax rate – via IC loans, transfer pricing, IC dividends FX management – review the exposures and decide on the hedging approach

6. Tower46 LLC www.tower46.com 6 Share Price = Annualized Earnings per Share x current PE score PE score elements, description and weights:

7. Tower46 LLC www.tower46.com 7 Team 1 Decision The teams submit their decision files to the Administrator During the simulation, the teams predictions for market data are replaced with the market actuals and teams’ results are recalculated Team 2 Decision Team N Decision The teams receive their final results with complete detailed reporting package and can proceed with the next period decisions The teams also receive companies’ rankings, selected data for the competitors and economic commentary forecast for the next period Next period forecast Industry summary Team 2 Results S I M U L A T I O N Team 1 Results Team N Results

8. Tower46 LLC www.tower46.com 8 The model generates all reports the users need: For the competitors and the industry: Share prices, EPS, PE scores by company Operations and production highlights Consolidated financials of the competitors Market data and forecasts Individual teams’ detailed results Financial statements by subsidiary in local currency and in USD All current and historical decisions and results by position – FX exposures and results, borrowings and investments, productions data, tax management All reports are Excel compatible PE scores by team by period Share prices by team by period

9. Tower46 LLC www.tower46.com 9 Risk management  Identify, understand and manage risk exposures – those resulting from volatility in the foreign exchange rates, interest rates, commodity pricing  Use economic commentaries to develop market forecasting process  Learn how to develop risk management strategy and use the different hedging instruments and structures available in the simulation Corporate structure and capital markets  Define target corporate structure and manage credit worthiness  Choose between multiple sources of capital available – equity capital, short-term and long-term fixed and floating rate debt  Refine the details – currency, duration, type, risk profile  Learn to evaluate the strategy and how to adjust, if needed The FORAD simulation allows the users to build skills in multiple areas of corporate finance – essential for any well rounded finance professional, and therefore, crucial for success at the work place

10. Tower46 LLC www.tower46.com 10 Financial planning and analysis  Use market data to forecast sales and structure company’s operations accordingly  Manage the company’s budget for long-term assets (capacity) and med-term assets (inventory)  Understand the long-term effects and how to plan beyond the current period International taxation  Learn the differences and specifics of the local tax rules and rates  Test the various tools available to a multinational corporation to achieve better tax efficiency Financial statements analysis  Learn how to read and explain the numbers after they have been already generated  Review the historical results and examine the trends Competitors’ analysis  Learn how to use limited publicly available data for the competitors to draw conclusions for their strategy and make adjustments to be more competitive

11. Tower46 LLC www.tower46.com 11 Management Skills  See the “big picture” about managing a complex organization and how certain decisions effect multiple areas of corporate finance  Acknowledge and manage trade-offs and learn to prioritize and focus  Learn to evaluate performance, identify mistakes and recover  Accountability – take ownership of the decisions and defend them to the public, develop and follow internal rules Organizational Skills  Time management – deadlines in FORAD are similar to the deadlines in any real business and require tight organization  Team dynamics – success in FORAD is nearly impossible without effective team with quality discussions and team commitments  Communication skills – learn to communicate and negotiate within the team, but also when presenting the company’s decisions and results The FORAD simulation also allows the users to build skills in areas outside of corporate finance – to complete the overall training experience

12. Tower46 LLC www.tower46.com 12 Professional training Build stronger team Share the knowledge Motivational effect Flexibility Effective format Increases the employees’ expertise and may help identify talent early The game replicates real world experience - easier transition from academics. The competition element provides extra motivation to learn. Team members learn from each other too and get exposure to various areas of corporate finance, strategy and reporting Choice between various game formats to fit corporate’s training needs and goals. No need for investment in technology or users’ preparation Increases employees’ motivation; could be a long-term activity and carry over the positive effect ; could be structured as “fun” activity too Team members build relationships with colleagues from different functions and levels

13. Tower46 LLC www.tower46.com 13 Possible game formats: Intense short course with a few decisions taken each day Extended course with decisions due every couple of days Teams and users - no fixed requirement for the number of teams or team members. 3 to 5-member teams offer good balance between work load and efficiency and 5 to 10 teams provide the best competitive environment. Length – the simulation could continue between three and 20 periods, ideal results are achieved between 5 and 8 periods. Location - the learning experience is most effective when teams discuss their decisions and results together, but they do not need to be physically at the same location and could work remotely. Administration – the simulation could be administered in-house (brief training would be needed) or remotely by Tower46 member. In all cases – interpretation of the results and help with any questions from the users will be provided by the Tower46 team. No specific technology requirements. Documentation: Manual for the users with all details to play the game; no additional training required Manual for the Administrator, if needed Ready to use market scenarios with economic commentary packages; customization of the scenarios is an option

14. Tower46 LLC www.tower46.com 14 FORAD simulation course could be executed as short-term intense course:  Users are together at the same location – could be in-house or at remote offsite location  Course instructor is needed – Tower46 team will provide brief training Suggested schedule:

15. Tower46 LLC www.tower46.com 15 FORAD simulation course could be executed as long-term activity over a few weeks:  Users do not need to be together at the same location – team discussions could be organized remotely at users convenience  Course instructor is not a requirement – Tower46 team could administer the training remotely Suggested schedule: