FOOD PROCESSING MAGAZINES ANNUAL MANUFACTURING TRENDS SURVEY 2013

Labor, not Energy, the Concern in 2013

Table of contents 1 Cover story 3 Dealing with uncertainty in 2013 4 Protecting your data in a mobile world 7 Managing ingredient supply and pricing with predictive analytics 8  Tax and strategic considerations you need to know about health care reform

2 Labor, not Energy, the Concern in 2013

Cover story

While economic uncertainty remains, respondents expect more growth while continuing to emphasize food safety.
David Phillips, Plant Operations Editor, Food Processing Magazine Figure 1: Manufacturing priorities for 2013*

Labor issues are of greater concern to food manufacturers as they enter 2013 but not as important as cost control and food safety while worries about energy cost escalation have all but disappeared (that was a surprise). Manufacturers are a bit less optimistic than they were at this time last year (or in the past three years, for that matter).
Yet more plant operations executives foresee production increases of 20 percent or more and additions to their workforces.

First-place votes Food safety Cost control Labor Inspections/certifications Sourcing & materials Automation Water issues Environmental concerns Consolidation challenges Energy concerns 59% 27% 11% 10% 10% 9% 7% 6% 6% 4%

Rating avg. 8.2 7.4 6.3 5.9 6.4 5.1 5.1 5.6 4.4 5.7

Rating avg. last year 8.2 7.6 6.3 6.3 6.7 5.5 4.9 5.9 4.7 6.2

*Respondents were able to select more than one answer.

Those are some of the results of FOOD PROCESSINGS 12th annual Manufacturing Trends Survey. Invitations went out in November for the web-based survey. We had 249 total respondents, up from 205 last year.

Labor, not Energy, the Concern in 2013 1

The Food Safety Modernization Act also was a concern for lack of clarity in what the regulations will require and how some companies are anticipating and reacting to that lack of clarity.
Figure 2: How is your company dealing with the economy?

Were growing slowly No great changes Staff reductions and/or salary cuts Adding headcount and/or new lines Closing plants/consolidating Were growing fast Other Outsourcing to U.S. or Canadian contract manufacturers Outsourcing to overseas manufacturers

47.3% 29.6% 26.3% 19.3% 12.8% 11.9% 10.7%

5.4% 4.5%

Safety first

Each year the survey asks food processors to rank 10 pre-selected major concerns. As has always been the case, food safety ranks No. 1. This year 59 percent of respondents indicated this was their most important concern, up slightly from 53 percent last year. No surprise really, when one considers the catastrophic results of not prioritizing food safety. In second place for the second year are cost issues, with 27 percent naming it their top concern for the year (down 3 points from last year). Whats more interesting is how our respondents rank the other eight concerns.
Last year, inspections and certifications came in third with 21 percent of the vote, but this year that vote fell to 10 percent apparently most companies earned their Global Food Safety Initiative certificates last year.

Instead, labor moved up to third place with 11 percent, about the same as last year. Sourcing and materials also won a 10 percent vote (totals exceed 100 percent because respondents could select more than one top priority). Energy concerns recorded the biggest drop in first-place votes, from seventh place to dead last (10th) in the rankings this year although it had higher second, third, etc. votes than most other concerns. So using a weighted scoring method, its 5.7 point score was in sixth place, higher than environmental concerns, automation, water issues and consolidation challenges. But still lower than its overall ranking last year. We also asked voters to tell us about major concerns they did not find in our top 10 list. Among the responses were issues such as accurate forecasting for expansion, commodity price volatility, availability of raw materials, transportation costs, matching capacity with demand and implementing lean manufacturing. The Food Safety Modernization Act also was a concern for lack of clarity in what the regulations will require and how some companies are anticipating and reacting to that lack of clarity. Another food processor pointed to the weather: Our biggest concern now is the effect of the Midwest drought and how that will affect supply and price of our ingredients.
A long way to go?

We reworded our question about dealing with the economy (Figure 2). Last year we asked only if you were growing (45 percent said yes). This year, we split that response and found 12 percent growing fast and another 47 percent growing slowly that adds up to 59 percent growing at least some. However, approximately 26 percent were turning to staff reductions and salary cuts to deal with the lingering difficulties, and more than 12 percent indicated plant closings and consolidations. About 10 percent were outsourcing to save money.

2 Labor, not Energy, the Concern in 2013

Dealing with uncertainty in 2013

Dexter Manning, Partner, National Food and Beverage Practice Leader, Grant Thornton LLP

The results are in for the 2013 Food Manufacturing Trends Survey and its no surprise that food safety is still the number one concern among food manufacturers, followed closely by cost control. In fact, 72% of respondents to the survey indicated that their company had implemented new food safety processes in 2012, likely in response to the looming requirements of the Food Safety Modernization Act (FSMA). Cost control, however, may prove harder to tackle. Continued volatility of ingredient prices, changing weather patterns and still more governmental regulations, such as changes to employee benefit plans based on the Affordable Care Act, and new or impending income tax laws, continue to drive costs upward. Manufacturers are awash in uncertainties heading into 2013, yet still are managing to wade through them. Uncertainty is the elephant in the room whether about FSMA, the financial toll from health care reform provisions, commodity price volatility, severe weather or any number of other concerns.
The 2012 drought in the Midwest wreaked havoc on commodity prices and an already volatile market for ingredients.

emerging markets, rising energy prices and the uncertain state of the economy at home and abroad. Most, if not all, of these uncertainties have a direct impact on manufacturers bottom-line profitability.
Focusing on core competencies

The net result is that prudent leaders are exercising more caution in 2013. While most of the respondents expressed optimism about 2013 (60%), slightly fewer were optimistic than the prior year (63%). This cautious optimism translates into a more strategic approach to business. While a focus on cost control and lean processes have remained par for the course since the beginning of the last recession, there is little excess left to trim. Consequently, many companies are taking a hard look at their businesses core competencies and shedding unrelated or nonstrategic business units as part of their cost-control plans.
Embracing mobile technologies

turning on these appliances to checking the contents of their refrigerators. Easy to use apps are helping people eat healthier, simplify meal planning, and make in-store decisions about the food they buy. Food and beverage manufacturers need to have a mobile strategy, and it needs to address the new risks that come with the territory.
Connecting with customers via social media

Other issues on their minds include changing demographics in the U.S., soaring demand for raw materials in

Historically, technology has contributed to the demise of some businesses and the success of others. Expect the same for 2013 and beyond. Consumers continue to embrace technologyenhanced shopping, and some food and beverage manufacturers have caught on. A growing number of consumers are using smartphones and tablets for price comparisons, coupons, recipes, to review quick response (QR) codes, food blogs and, an emerging trend, to make their payments. Some smartphones network with kitchen appliances to allow consumers to do everything from

Food and beverage manufacturers are using social media in new and creative ways to create a dialogue with their customers. The information gleaned from these customer interactions, in turn, helps manufacturers create and market innovative products that satisfy the ever-changing market. But social media, too, is not without its risks, and manufacturers are becoming more savvy about implementing controls and policies for their social media efforts. Amid the uncertainties, one thing is certain. If manufacturers plan to continue to thrive in this environment, they must become more flexible and dynamic to adjust to the rising uncertainties in the economy and marketplace.

Historically, technology has contributed to the demise of some businesses and the success of others. Expect the same for 2013 and beyond.

Labor, not Energy, the Concern in 2013 3

Protecting your data in a mobile world

Anthony J. Hernandez, Principal, Business Advisory Services, IT Strategy and Risk Management, Grant Thornton LLP

Devices breed data risks

Mobile devices are taking over the planet. According to a 2013 Cisco report, there will be more mobile devices than the seven billion people who inhabit the earth by year-end.1 Whats more, the report predicts there will be a staggering 10 billion mobile devices by 2017.2 Indeed, an entire global generation Millennials communicates primarily through a combination of mobile devices and social media. In keeping with the times, 71% of companies are considering custom mobile apps, according to Symantecs 2012 State of Mobility Survey. And one in three enterprises is actively rolling out a mobile app or already has done so.3 Many forward-thinking food manufacturers are on top of this trend and already interacting with customers via mobile apps which include videos, location-aware coupons, promotional announcements and loyalty programs. Moreover, a growing number of food manufacturers are turning to enterpriseconnected mobile devices to provide insight into business operations, boost productivity and achieve new efficiencies. Enterprise mobile apps offer the ability to track real-time inventory, gain visibility into factory-floor operations, and monitor sales and operations performance. A Motorola survey of mobile technologies found that manufacturers saved a daily average of 42 minutes per employee by using mobile apps.4

Enterprise mobile security, however, is a different story. Many companies are paying insufficient attention to this critical business factor. A Ponemon Institute survey showed that 51% of surveyed companies experienced a data breach due to insecure mobile devices.5 With the explosive increase in corporate mobile device use, there is a commensurate increase in sensitive data residing in employee smartphones, tablets, USB drives and other apparatuses.
In addition to e-mail, voicemail, location information and documents, there may be credentials to access enterprise applications and other confidential information on devices.

For example, people need to beware of free charging kiosks at airports that enable users to plug a USB cable into their mobile devices. These unknown tools can easily be configured to read or remove data from devices and even upload viruses or malware.
To bring or not to bring

Yet, many employees arent accustomed to protecting their devices. Unfortunately, lost or stolen smart phones and tablets are not unusual.
Poor risk awareness

Adding to the problem is the fact that most consumers and enterprises do not take the time to regularly patch or update their smartphones and tablets, increasing their risk exposure. Cyber attacks have become more frequent and sophisticated, coming from diverse sources such as SMS, Wi-Fi, Bluetooth, infra-red, USB, Web browsers and mobile platforms.

Every manufacturer needs to address the bring-your-own-device (BYOD) to work trend, which can be good for productivity but add complexity to data security. Managing a mix of mobile device platforms Blackberry, iPhone and Android, among others is more complicated for IT, and users often inadvertently circumvent security policies. If employers decide to adopt a BYOD approach, they need to establish clear policies and implement IT security controls to protect their data and their network. As more food manufacturers turn to enterprise mobile technologies to connect with customers, achieve efficiencies and gain visibility into operations, they need to continually assess the security implications of their technology and mitigate risks accordingly. An effective enterprise solution will address a range of device types, integrate seamlessly with manufacturers existing systems, and most importantly keep sensitive data safe and sound.

 Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 20122017, Feb. 6, 2013. www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.html 2 Ibid. 3 2012 State of Mobility Survey, Symantec, 2012. www.symantec.com/about/news/resources/press_kits/detail.jsp?pkid=state-of-mobility-survey 4 Lane, Brian. Manufacturing goes mobile, http://news.thomasnet.com/IMT/2012/07/24/manufacturing-goes-mobile/ 5 Global Study on Mobility Risks, Ponemon Institute, Feb. 2012. www.ponemon.org/local/upload/file/Websense_Mobility_US_Final.pdf
1

4 Labor, not Energy, the Concern in 2013

Figure 3: In 2013, does your facility plan to?* M  aintain staffing level 41% A  dd to the workforce 36.8% P  assively reduce workforce (i.e. through attrition) 9.6% D  ont know 7.5% A  ctively reduce workforce 5.0%

Figure 4: Do you anticipate your plants production in 2013 to:* I ncrease 20% or more 18.5% I ncrease 1019% 21.8% I ncrease 29% 31.7% S  tay about the same 20.2% D  ecrease 29% 3.7% D  ecrease 1019% 1.7% D  ecrease 20% or more 2.5%

When asked How do you feel going into 2013? only 60 percent expressed optimism, down from 63 percent last year and 66 percent in both 2011 and 2010.
Looking forward with Figure 3, most of those who took the survey said they expect to add to their employee ranks (nearly 37 percent) or maintain staff levels (41 percent), compared to around 15 percent who plan to further reduce staffing either actively or passively. That compares favorably with last year, when 18 percent were bracing for staff reductions and just 28 percent had planned on new hires. Asked about plant production forecasts for 2013 (Figure 4), 19 percent foresee increases of 20 percent or more, up significantly from 11 percent last year and 16 percent the year before. Altogether, 72 percent expect at least some increase in production at their own facility this year within a percentage point of last year while only 7.9 percent are planning for a decrease. When asked about the production outlook for their entire company (Figure 5), 32.5 percent of respondents expect their company to expand the number of manufacturing facilities this year, up significantly from 23 percent the year prior. Just 12 percent (roughly matching last years number) said they expect their companies to consolidate this year. While these numbers are encouraging, respondents were cautious about their optimism (Figure 6). When asked How do you feel going into 2013? only 60 percent expressed optimism, down from 63 percent last year and 66 percent in both 2011 and 2010. As for salaries, just 4 percent of those surveyed anticipate a decrease, while 41 percent expect salaries to increase. A year ago, a similar number planned on payroll increases but a higher percentage (5.6 percent) expected to trim salaries. Capital spending may be in for a drop in 2013. Thirty-five percent of respondents said they will spend more this year than they did in 2012, whereas 47 percent expected to spend more last year at this time. This year 10 percent have trimmed their CapEx budget by some measure. Also, 35 percent report they have delayed capital spending projects in the past year due to the economy. That is up from 32 percent a year ago, but not as drastic as 2011, when a full 45 percent hit the brakes on capital projects. This years respondents listed a variety of project types they hope to tackle in 2013, including warehouses, production and packaging expansions, a new plant in Kentucky, updated manufacturing software and adding automation in warehousing, production and throughout the plant.

Figure 5: For 2013, is your whole company planning to:* S  tay the same 46.9% E  xpand production/ number of manufacturing plants 32.5% C  onsolidate production/ number of manufacturing plants 11.9% D  ont know 8.6%

Figure 6: How do you feel going into 2013?* O  ptimistic 60.1% N  eutral/Im not sure 25.1% P  essimistic 14.8%

*Responses may not equal 100% due to rounding.

Labor, not Energy, the Concern in 2013 5

Figure 7: Will you implement new food safety measures in 2013? Y  es 69.1% D  ont know 16.9% N  o 14.0%

Figure 8: What portion of your plant has been automated?

Production sections Packaging sections All or most of the plant None Warehousing Entire production line Maintenance, repair & operations Other *Respondents were able to select more than one answer.

48.6% 34.9% 17.4% 15.8% 10.4% 9.1% 5.0% 5.0%

Nearly 16 percent of survey respondents said they still have no automation in their food plants

Knowing that food safety is the top priority among food companies, we also asked some questions about what steps processors are taking to protect against incidents and to verify compliance with food safety regulations. Of those surveyed, 72 percent indicated they implemented new food safety measures in 2012. That reflects a slight up-tick in implementation compared to the year prior when 70 percent said they had taken food safety measures in 2011. Nearly 70 percent say they will launch new food safety initiatives this year, up 2 points from last year (Figure 7).
Employee training and third-party certification remain the two top steps food processors are taking to improve food safety. Those two also topped the list in 2012.

Speaking of certification, we asked participants to name which certifications they were involved with. The top answer remains Safe Quality Food, which was noted by 49 percent of respondents this year, up from 40 percent in the 2012 survey. The British Retail Consortium program was second this year with 22 percent, 1 point down from last year. Automation has changed food manufacturing substantially in recent years. This year, 17.4 percent said the entire plant is automated, nearly 49 percent said production is highly automated (less than the 54 percent answering that way in the year prior) and 35 percent indicated their packaging areas were stocked with robotics. Nearly 16 percent of survey respondents said they still have no automation in their food plants (Figure 8).

Respondents were allowed to list multiple approaches, and 69 percent mentioned employee training this year, while 47 percent planned for third-party certification. HACCP plans are in use or in the works for 39 percent of surveytakers this year, compared to 46 percent of those who answered the question last year thats kind of odd.

6 Labor, not Energy, the Concern in 2013

Managing ingredient supply and pricing with predictive analytics

Steve Lyman, Managing Director, Business Advisory Services, Grant Thornton LLP

Global increases and volatility in ingredient pricing are wreaking havoc on the profit margins of food manufacturers. Unfortunately, processors may be looking at deepening distress as agricultural turmoil from droughts, fires, floods, freezes and blights is driving prices sharply upward.
Adding to the pain are growing speculation on commodities, surging populations and increasing per capita consumption in such countries as China and India, as well as rising fuel prices.

Widespread concerns have turned some manufacturers notably, a number of the bigger players to predictive analytics. Described by some as forecasting on steroids, predictive analytics uses data to predict the likelihood of future events and help manufacturers plan for them. Companies are using the tool to understand how a number of factors (e.g., weather, natural disasters, legal and regulatory impacts, civil unrest) can impact ingredient supply availability and costs.

The data can help identify effective mitigation strategies to address possible disruptive events. For example, a manufacturer might seek different suppliers if civil unrest is threatening a particular region or develop hedging strategies to manage costs where drought is occurring. In addition, predictive analytics is valuable in forecasting customer trends. It is thought of primarily in terms of customer behavior and revenue growth. But there is significant opportunity on the supply side to better understand cost and supplier behavior, and to give companies better data for leverage with suppliers. Consider the Super Bowl chicken wing shortage of 2013. Drought in the Midwest impacted crop prices, as did the uptick in demand for ethanol driven in part by the EPA Renewable Fuel Standard. These factors drove up chicken feed prices, which resulted in less farming of chickens and/or higher prices for chicken and wings.6 Prices for whole chickens were 21% higher in December 2012 than a year earlier, according to the U.S. Department of Agricultures Livestock, Dairy & Poultry Outlook report.7

The long and short of it is that companies need to understand everything they can about their supply chains: Who are their suppliers suppliers? Where are they located? What are the factors that drive their supply and pricing? What risks are they facing? Too many companies are depending on historical data and trends to manage their business, while not paying enough attention to the future. This is at a time when unpredictable weather, growing demand, increasing and volatile commodity prices, surging fuel costs, and myriad other factors are eroding profits. Fundamental laws of economics are at work. With no relief in sight, food and beverage companies that do not take immediate action will continue to see profit margins shrink.

While larger food processors have been among the first to adopt predictive analytics, all industryrelated companies ultimately will need to do so to remain competitive.

 glesias, Matthew, The Great Chicken Wing Shortage of 2013, Slate, Feb. 1, 2013. Y www.slate.com/articles/business/moneybox/2013/02/chicken_wing_shortage_drought_ethanol_standards_and_expensive_corn_have.html 7 Ibid.
6

Labor, not Energy, the Concern in 2013 7

Tax and strategic considerations you need to know about health care reform
Ken Cameron, Director, Compensation and Benefits, Grant Thornton LLP; and Mark Ritter, Managing Director, Compensation and Benefits, Grant Thornton LLP

According to a study by Market Strategies International, up to 60% of employers in the United States were waiting for the outcome of the 2012 presidential election before preparing to respond to requirements of the Patient Protection and Affordable Care Act (PPACA). Those employers now need to move quickly to manage this new business risk.
Even though many of the taxes imposed for noncompliance with the PPACA go into effect in 2014, employers who wait until later in 2013 to respond may risk increased costs of compliance.

This is particularly true for industries that employ seasonal or part-time workers because many of the penalties and taxes are computed by multiplying a tax rate times the number of full time employees. Contributing to the confusion is the fact that regulations defining the term are extremely complex and can be difficult to apply to a particular work force. Following are four significant types of fees, taxes and penalties which employers need to know:8

PCOR funding fee This fee is assessed against all health insurers including self-funded employer health care plans to fund the Patient-Centered Outcomes Research Institute, which was created by PPACA to perform comparative effectiveness research on medical treatment outcomes. The initial annual fee is $1 per covered life (including employees and their participating dependents) for plan years ending between Oct. 1, 2012, and Sept. 30, 2013. The fee increases to $2 per covered life for plan years ending between Oct. 1, 2013, and Sept. 30, 2014, and is indexed for inflation thereafter. Action: If you have a self-funded health plan, you should prepare to comply with the first filing deadline of July 31, 2013. For fully insured plans, the insurance carrier computes and remits this fee. Increased Medicare taxes on high-income earners Beginning in 2013, individuals who earn more than $200,000 in taxable income ($250,000 where filing jointly) are subject to an increase in their share of the Medicare tax, from 1.45% to 2.35%. While the employers matching Medicare tax remains at 1.45%, employers who fail to withhold and remit the employees increased Medicare tax may be subject to penalties and interest.

Action: Confirm now that your payroll processing area (or payroll vendor) has updated the payroll system so the correct amount of Medicare tax will be withheld and remitted to the IRS. Transitional reinsurance fee Beginning in 2014, employers must pay a transitional reinsurance fee to help offset the impact of high-cost enrollees who obtain health insurance. This fee will be assessed annually for a three-year period. The fee will be computed based on the number of covered lives (employees and dependents), but the amount per covered life is not yet set for 2014. Action: Take steps during 2013 to ensure that the count of covered lives, as defined under the regulations, can be prepared and submitted in time. This may require programming and other data management steps, so lead time should be allowed. Penalties for insufficient coverage or benefits Effective in 2014, PPACA provides for numerous and complex penalties, applicable to employers in either of the following circumstances: Not offering a health plan to 95% or more of full-time employees Offering a plan to 95% or more of full-time employees, but the plan fails an employee affordability test or minimum value test.

To view an outline of the Patient Protection and Affordable Care Act, along with the full text of the law, see www.healthcare.gov/law/full/.

8 Labor, not Energy, the Concern in 2013

54 percent of those surveyed said they are taking steps in energy conservation.
Energy and green initiatives

These minimum coverage and benefits rules may require significant policy discussions. Action: Establish a formal process as early in 2013 as possible to determine a direction for your health plan. This may involve calculating the cost of a number of scenarios as well as considering non-financial human resources issues such as employee retention and recruiting.

Given the complexities of PPACA, employers need to keep the new health care law top of mind and be cognizant of developments. Work with your tax adviser and employee benefits provider now to learn more about these and other requirements.

Green initiatives, which can help both the bottom line and a companys reputation with consumers, have been important for some time. Our survey shows that for as much as 82 percent of food manufacturers surveyed, those programs continue to be important heading into 2013. However, 6.6 percent said that in light of the economy, green initiatives are becoming less important to them. Thats up from the 5.6 percent who gave that answer in 2012. The number who said the importance of green initiatives was about the same also increased from 46 percent going into 2012 to about 53 percent of those surveyed for our 2013 report. Asked what initiatives they are pursuing, food processors had a variety of responses reflecting a range of actions from simple common sense steps to comprehensive programs. They included increasing use of recycled content materials, water reuse in the process and motion control lights and sky lights in the warehouse. One respondent indicated his or her company was

already on track, and had reached goals and (would) continue monitoring towards a zero-landfill facility. Energy consumption can certainly be considered in concert with other green initiatives, but energy can also be a simple bottom-line issue. When the latter is the case, energy concerns enter and leave the spotlight as prices fluctuate. With energy prices somewhat at a plateau, this years respondents put less emphasis on energy consumption than we have seen in the past. When asked how are you approaching energy management? (Figure 9) 54 percent of those surveyed said they are taking steps in energy conservation but close to 29 percent said it is not a burning issue right now up from 24 percent last year. Nearly twenty-seven percent are conducting energy audits and 22 percent are recycling or redirecting energy throughout the plant. Just over 5 percent of respondents are looking at cogeneration and 10 percent are looking for alternative energy sources (down from 16 percent a year ago); 4 percent are installing solar panels.

Figure 9: How are you approaching energy management?

Taking steps in energy conservation Not a burning issue right now Conducting energy audits Recycling energy (i.e. through redirection systems) Negotiating with energy providers Looking to energy management consultants Seeking alternate energy sources Looking at co-generation Other Installing solar panels *Totals exceed 100(%) because respondents could select more than one choice.

54.2% 28.6% 26.5% 21.9%

12.2% 11.3%

10.1% 5.5% 5.0% 4.2%

Labor, not Energy, the Concern in 2013 9

Dexter Manning Partner, National Food and Beverage Practice Leader T 404.475.0061 E dexter.manning@us.gt.com Anthony J. Hernandez Principal, Business Advisory Services, IT Strategy and Risk Management T 215.701.8870 E anthony.hernandez@us.gt.com Steve Lyman Managing Director, Business Advisory Services T 404.475.0070 E steve.lyman@us.gt.com Ken Cameron Director, Compensation and Benefits T 404.704.0136 E ken.cameron@us.gt.com Mark Ritter Managing Director, Compensation and Benefits T 404.704.0114 E mark.ritter@us.gt.com

About Grant Thornton LLPs Food and Beverage Practice Grant Thornton LLP assists domestic and international food and beverage companies as they navigate the complex industry supply chain, as well as the ever-changing marketplace. Our professionals work with a diverse range of businesses from multinational food and beverage manufacturers to beverage distributors, grocery stores and restaurants. With vast experience in this sector, we offer guidance on restructuring and reorganization, process improvement, supply chain management, M&A, tax, audit and other matters. Our professionals provide clients with solutions designed to deliver growth and create value for their various stakeholders. The people in the independent firms of Grant Thornton International Ltd provide personalized attention and the highest-quality service to public and private clients in more than 100 countries. Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd, one of the six global audit, tax and advisory organizations. Grant Thornton International Ltd and its member firms are not a worldwide partnership, as each member firm is a separate and distinct legal entity. In the United States, visit Grant Thornton LLP at www.GrantThornton.com.

Content in this publication is not intended to answer specific questions or suggest suitability of action in a particular case. For additional information on the issues discussed, consult a Grant Thornton client service partner.

Grant Thornton LLP All rights reserved U.S. member firm of Grant Thornton International Ltd