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Cashflow Outranks Historical P&L as a Lending Criteria

CALABASAS, CA, and LONDON – 24 June, 2004 – SunGard Treasury Systems, a leading provider of treasury management solutions and an operating group of SunGard (NYSE:SDS), today announced the results of a survey conducted in association with gtnews.com.

In April 2004, gtnews.com polled its international readership consisting of finance and treasury professionals. Over half of the qualified responses were from firms with annual revenue in excess of US$1bn. According to the survey, over 80% confirmed that cash flow data outranks historical P&L data as a lending criteria. The results clearly indicated that with more competition for short-term credit the provision of consistent and accurate corporate cash flow data becomes more important.

“Financial executives need to check the technology currently in use to ensure that they are able to obtain real-time visibility into free cash flow from multiple, diverse systems. This technology is available and the resulting benefits will provide more options for careful cash planning and enable the CFOs and treasurers to be proactive in their decision making,” said Martin Boyd, EVP, SunGard Treasury Systems, EMEA.

“With a majority of the banks who responded to the survey predicting a continuing scarcity of short-term credit, it will be prudent for corporates to concentrate on improving cash flow data for the purposes of negotiating with banks and for the careful management of resources to lessen the need for reliance upon funding at this end of the market,” Boyd said.

The Survey

In April 2004, following an article on gtnews.com by SunGard’s Martin Boyd entitled “Credit Squeeze: How Will You Fill the Liquidity Gap?”, SunGard sponsored a readers’ poll asking three “yes or no” questions. The poll received more than 280 responses - the questions and answers are summarized on the next page.

Question 1: Will a scarcity of short term bank credit remain for the foreseeable future?

Selection Agree % Disagree %
ALL 56% 44%
Corporates 47% 53%
Banks 64% 36%
Consultants 60% 40%

Question 2: Should companies become less reliant on short-term bank borrowing?

Selection Agree % Disagree %
ALL 74% 26%
Corporates 73% 27%
Banks 73% 27%
Consultants 80% 20%

Question 3: Does Cashflow data outrank historical P&L as a lending criteria?

Selection Agree % Disagree %
ALL 82% 18%
Corporates 81% 19%
Banks 85% 15%
Consultants 90% 10%