July 12
July 12
July 12
Source:
Duke University/
CFO Magazine
Global Business
Outlook Survey
12 CFO | July/August 2012 | cfo.com
from last year.
But not all is doom and
gloom, according to Jim
Morrison, CFO of plastics
compounding firm Teknor
Apex and chair of the
AICPAs Business Indus-
try Executive Committee.
Morrison does not con-
sider the 2-point drop that
dire, considering the index
has dropped 9 to 10 points
in some years. We might
have been in a holding pat-
tern for a while, but we are
going to resume growth,
Morrison says. It may not
happen right away. Theres
still optimism that over the next year, we
will be on a growth pattern rather than a
downward spiral. K.H.
CFOs looking for a promotion
may take heart from the latest
annual survey of CEO succes-
sion from consultancy Booz &
Co. Last year, the percentage of top
bosses who departed the worlds 2,500
largest companies rose to 14.2%
thats 355 CEOs who moved outfrom
11.6% in 2010.
The improved outlook for the econ-
omy may be partly responsible for the
acceleration in CEO turnover. Boards
are increasingly seeking new leaders
to help drive growth in a recovering
global economy, the survey authors
write. But theres at least a hard bar-
gain, if not a catch: the need to ride the
upswing places a distinct burden on
those newly elevated CEOs to prove
More
CEOs Go
A majority of executives surveyed by
the American Institute of Certified Public
Accountants in the second quarter said
their companies have enough cash or
have increased their cash this year, but
they remain reluctant to deploy it.
Forty-three percent of the 1,250 senior
executives in the AICPA Business and
Industry Outlook Survey said their com-
panies have about the right amount of
cash currently, while 36% said cash as-
sets have increased from the first quar-
ter to the second quarter of 2012. Almost
half of those surveyed were CFOs, while
22% were controllers. Sixty-nine percent
represented privately owned firms.
But 24% of the total respondent base
said they were hesitant to
deploy their excess cash, an
increase from 20% who felt
that way last quarter. Only
12% said they would actu-
ally use it.
The reluctance to spend
cash may stem from an
overall negative take on
the economy. The AICPAs
CPA Outlook Index dropped
two points, to 67 from 69,
from the first quarter of
2012 to the second. Similar-
ly, expectations for revenue, profit, and
employment growth slid this quarter,
though they were essentially unchanged
Have Cash, Wont Spend
24%
of those surveyed
said they were hesi-
tant to deploy their
excess cash, up from
20% last quarter.
themselves early in their
tenure.
Overall, 2.2% of CEOs
lost their jobs because of
merger-and-acquisition ac-
tivity, 2.2% were forced out
for other reasons, and the re-
maining 9.8% planned their
departures.
Good news for CFOs
with their eye on the CEO
role: so-called insider CEOs,
those promoted from with-
in the firm rather than ap-
pointed from outside, serve
longer and, more important,
create more value for share-
holders. From 2009 to 2011,
these CEOs firms outper-
formed local market indexes by 4.4%,
compared with 0.5% for external CEOs.
The bad news: those insider promo-
tions are harder to get. In 2011, 22% of
CEOs were appointed from outside,
compared with just 14% back in 2007.
The Booz survey makes no mention
of the role of CFOs in succession plan-
ning. It does, however, carry advice to
newly appointed CEOs from Andre-
Michel Ballester, CEO of the Italian
company Sorin Group: The first is-
sue is to create a leadership team very
quickly, making decisions on who are
the keepers and who are the leavers in
the first few weeks.
And therein lies a warning: CFOs
who dont get the top job themselves
should quickly cement their relation-
ship with the successful CEO candi-
date. In fact, recent research by recruit-
ing firm Korn/Ferry suggests that 28%
of CFOs leave their company within
two years of an external CEOs ap-
pointment. If another internal candi-
date gets the CEO role, there is only a
10% chance the CFO will leave for new
pastures. AndrEW SAWErS
HuMAn CAPITAl
CASH FlOW
13 cfo.com | July/August 2012 | CFO
-0.6%
-2%
0
2
4
6%
Insider Outsider
-1.3%
3.9%
5.1%
3.6%
2.2%
4.4%
0.5%
09-11 06-08 03-05 00-02
Source: CEO Succession Report: 12
th
Annual Global
CEO Succession Study (Booz & Co.)
The Insiders Edge
Median shareholder returns of companies
where the outgoing CEO had been promoted
from within vs. recruited externally.
The bad news: insider
promotions are harder
to get. In 2011, 22% of CEOs
were appointed from out-
side, up 8% from 2007.
Thinkstock
Topline
Even employees who have tra-
ditional pensions will be work-
ing longer than they planned
and their bosses know it.
In a recent survey con-
ducted by CFO Research in
collaboration with Prudential
Financial, about 70% of senior
finance executives said they
believe their companies em-
ployees will be forced to delay retirement because of insufficient
savings. (CFO Research and Prudential conducted similar surveys in
2009 and 2010.) The 186 finance executives surveyed work at large
and midsize companies, all with defined-benefit (DB) pension plans
with assets of at least $250 million. Employers also said that employ-
ee benefits are critical to attracting and retaining talent, with three-
quarters agreeing that employee satisfaction with benefits is impor-
tant to the success of their company.
So whats a CFO to do? The survey suggests that finance execu-
tives are exploring new ways to manage those financial risks that
pose threats to both a companys bottom line and an employees
nest egg. This years survey found an increase in the percentage of
companies likely to transfer DB plan risk to a third-party insurer.
Because pension plans are guaranteed, employers have to pay extra
if the investments underperform. With that in mind, we are fig-
uring out a way to move future risks off of our companys balance
sheet, said the CFO of a health-care company. While only 5% of
respondents had transferred DB plan risk to a third-party insurer,
43% said they were likely to do so within two years, up from 30%
in 2010.
Finance executives in the study also said they will explore prod-
ucts that can dampen the markets volatility and encourage employ-
ees to keep their own investments in defined-contribution plans
intact. These executives are becoming more interested in exploring
how using strategies such as target-date funds, stable-value prod-
ucts, and guaranteed-income products might help bolster employee
retirement investments. Josh hyatt and david owens
retirement plans
To download the report, The Future of Retirement and
Employee Benefits, go to www.cfo.com/research
Retirement:
A Recalculated Risk
If you would like to submit a question to Bill
MrExcel Jelen, go to CFOs Spreadsheet
Community Center at www.cfo.com/spreadsheets.
A Refreshing
Change
Q: Ive discovered that
some of the underlying
data in my pivot table is
wrong. After I correct a
number, the pivot table
does not appear to include
the change. Why does this
happen, and how do I hold
on to my updates?
A: There is an important concept to understand
about pivot tables: When you create a pivot
table, all the data is loaded into memory to allow
it to calculate quick-
ly. Changing the
data on the original
worksheet does not
automatically up-
date the pivot table.
You need to se-
lect a cell in the
pivot table. The Piv-
otTable ribbon tabs will appear. On the Options
tab, click the Refresh icon to recalculate the pivot
table from the worksheet data (see Figure 1). The
result should be that the pivot table is updated.
One word of caution: Making changes to the
underlying data could cause the table to grow.
For example, if you reclassify some records from
the East region to the Southeast region, be aware
that clicking the Refresh button will cause the
table to grow by one column. If there happens to
be other data in that column, Excel will warn you
and ask if it is okay to overwrite those cells.
Ask
MrExcel
Bill Jelen
Figure #1
Anticipating
Delays
More than
two-thirds of
CFOs expect
employees to
have to put
off retirement.
0%
20
40
60
80%
Dont Know No Yes
14%
17%
69%
14 CFO | July/August 2012 | cfo.com
Thinkstock
Wind-project developers or solar-
facility owners typically have tax-eq-
uity partnerships with large-company
investors such as Google or Chevron,
where both sides benefit: the develop-
ers get necessary capital and the inves-
tors get big tax write-offs. Corporate
investors in wind, geothermal, and bio-
energy projects are currently eligible
for the production tax credit (PTC),
which provides an income-tax credit
of 2.2 cents per kilowatt hour for up
to the first 10 years a facility is open.
They can also take the investment tax
credit (ITC), a one-time tax break of
30% on their investments, or an equiv-
alent cash payment from the U.S. Trea-
sury Department.
But sooner or later, that could all
change. The PTC for wind projects,
which companies can exchange for a
cash grant, is set to expire at the end
of this year, while the geothermal and
other bioenergy PTCs expire at the
end of 2013. Treasurys 1603 grant,
which provides cash payments worth
30% of the total cost of a renewable
project, is also phasing out. Named
after Section 1603 of the American
Recovery and Reinvestment Act of
2009, the grant is now available only
to projects that began construction in
2011. Solar ITCs, meanwhile, are set to
expire in 2016.
The uncertainty surrounding the
renewable-project market is already
slowing project development. Some
participants are hopeful that Congress
will extend the credits at the 11
th
hour,
but typically, when lawmakers do re-
new these credits, they tend to extend
them for no more than a year or two.
Demand for tax-equity financing
already exceeds the supply of funds
available. Only $3.6 billion in tax-equity
funds will be available for renewable-
energy projects in 2012, but the demand
for renewable-project financing in 2011
was $7.5 billion, according to an Ameri-
can Council on Renewable Energy
survey last year. That source of capi-
If long-standing renewable-energy credits expire as
scheduled starting this year, companies that have
taken advantage of those hefty tax breaks for wind and solar
financing will have to consider new alternatives.
Renewed Concerns
About Renewables
Key tax credits for investments in renewable-energy projects could
soon begin to expire. By Kathleen Hoffelder
,
Android
or other mobile device to download. Best of all, CFO magazine remains free of
charge for fnance executives.
Stephen Webster
now has a window of six years be-
fore any meaningful maturities and
$350 million to $400 million of free
cash flow after debt service. The com-
pany is now looking to spend heavily
in international markets in the next 18
months, and going public is also on its
radar screen. With the proceeds of an
[initial public offering], we could pay
down debt and get to a more normal-
ized public-company debt level, says
Samuelson. For Infor, at least, there is
life after debt. CFO
Private Equitys
Picky Appetite
PE frms are craving
service and health-care
targets, according
to a new survey.
Bloomberg/Getty Images
Human
capital
Training at Dell:
Here, There, and Everywhere
The computer giants fnancial-education programs rely on a mix of long-distance
and local learning. By David McCann
I dont know of anoth-
er company that combines
the two approaches, says
Tom Conine, founder of
TRI Corp., which helps
large companies design,
develop, and implement
financial-education pro-
grams (Dell is a client). Going for-
ward, decision-makers have to be able
to work both virtually and face-to-
face, and the team dynamics of the two
are very different, says Conine. He
credits the dual approach to Dell CFO
Brian Gladden and Alicia Davis, the
companys director of global finance
learning and development.
The approach supports three edu-
cation programs, geared toward fi-
nance professionals with varying lev-
els of experience. In addition to the
FDP, there is the Financial Rotation
Program (FRP), for top talent with 5
to 7 years experience, and the Global
Financial Excellence Program (GFEP),
generally for those with 10 to 12 years
experience who have just received or
are about to receive their first execu-
tive appointments.
Learning Through
Simulations
Dells educational effort began in 2009,
though the programs are still consid-
ered new in the companys culture.
These are contemporary programs
that deal with the realities of today,
says Gladden. To that end, all three
programs feature simulations, in which
participants form teams that make
business decisions for hypothetical
companies.
The simulations in-
crease in complexity from
one program level to the
next. They require partici-
pants to make decisions rel-
ative to the entire business,
about pricing, production,
cost, new products, market
direction, and more. Simu-
lations are effective because you learn
by doing, observes Conine. When
you do that, you make mistakes that
you learn a lot from. The simulations
are also competitive, and most finan-
cial people thrive around that.
The simulations force participants
to work under four different types of
These are contem-
porary programs
that deal with the
realities of today.
Brian Gladden,
CFO of Dell
Almost all companies of Dells size
are globalized, and most try to homog-
enize their training programs as much
as possible. They generally educate
their employees in one of two ways:
either virtually via the Internet or in
classrooms scattered around the world.
Dell, however, uses both of those meth-
ods. For example, for the third and
fourth semesters of the companys Fi-
nancial Development Program (FDP),
a two-year program for high-potential
recent college graduates and under-
graduate interns, teams work virtually
for several weeks and then convene for
a week in Austin, Texas.
23 cfo.com | July/August 2012 | CFO
stress. They have to deal with time
pressure, limited information, scarce
resources, and divergent opinions from
teammates. When you mix those ele-
ments together, observes Conine, it
makes for real-world decision making
under conditions of uncertainty. The
simulator runs the various decisions
made through an econometric model
and spits out hard-number results.
In addition to the simulations, the
FDP calls for participants to rotate
among roles that include segment and
operating-expense analysis, intercom-
pany accounting, cash-management
analysis, pricing, corporate planning,
competitive analysis, financial services,
credit analysis, external reporting, bud-
geting and forecasting, and logistics.
About 50 employees are enrolled
each year in the entry-level FDP,
which lasts two years. FDP graduates
branch off to internal audit or finance
roles. Within three years, they are eli-
gible for consideration in the Financial
Rotation Program. That lasts for three
years, with three different one-year as-
signments, many outside participants
home countries. Roles include investor
relations, assistant controllership, pro-
curement (where a person would be an
analyst for a commodity buyer), opex
roles such as supporting the marketing
budget, financial planning and analy-
sis, treasury, foreign exchange, and
cash management.
There is also a tax role, which Davis
calls relatively unique to our rotation,
to understand not necessarily how to
do an accrual but how value-added tax
or transfer pricing works. Participants
dont necessarily choose which assign-
ments they get, she adds, but they can
express a preference.
Thinkstock
it pays to be public
Three out of four CFOs (74%) received a raise in 2011, according to a survey
by Grant Thornton and the Financial Executives Research Foundation.
The average salary increase was 4%, compared with 3% in 2010. Public-
company CFOs received an average base salary of $286,500 last year, versus
$197,400 for private-company finance chiefs.
Editors
Choice
tion to certain nonfinancial-employee
groups. People from marketing, sales,
research and development, and infor-
mation technology will take four mod-
ules built around the income statement,
the balance sheet, factors affecting
profitability, and key financial ratios.
As a result of the programs, Dell is
now more consistently focused on a
core set of operational financial tools,
says Gladden. A good example is in-
come variance, driving a consistent set
of tools across the firm to measure the
results of our business units, he says.
Can the return on Dells investment
in the educational programs be quanti-
fied? Gladden says they pay for them-
selves through less reliance on recruit-
ers to find talent. Since he came to Dell
as CFO in 2008, Gladden has tried to
instill in his top staff the mind-set that
they are building a 25-year career at
the company, rather than just joining
to get a certain set of experiences to
make you more attractive in the ex-
ternal market, he says. This is about
developing a culture and leadership
capabilities for the long term. CFO
Studying
Financial Excellence
At the third program level, the Global
Financial Excellence Program, partici-
pants do benchmarking work at other
companies, which are selected based
on their reputation for maintaining
best practices. The Dell employees
work with the CFO and finance staff to
understand how the issues those com-
panies are dealing with relate to Dell.
In turn, those companies send finance
staffers to Dell for similar learning.
The GFEP participants also work on
a team project; they deliver the results
to Dell chairman and CEO Michael
Dell. Last years project focused on
purpose-driven companiesthose
companies that execute against strate-
gies that are clear, concise, and brand-
ed. Key take-aways included how ev-
ery team member lives the brand at
Coca-Cola, how the business-integra-
tion processes at Stanley Works func-
tion, and how executives are involved
in recruiting at Goldman Sachs.
Meanwhile, Dell is developing a
program to provide financial educa-
educating dell
Financial training at Dell comes in three parts.
Financial Development program. Two-year entry-level program for
high-potential recent college graduates and undergraduate interns.
Areas covered include segment and operating-expense analysis,
intercompany accounting, cash-management analysis, pricing, credit
analysis,external reporting, and logistics.
Financial rotation program. Three-year program for top employees
with 5 to 7 years experience. Consists of three one-year assignments,
often outside participants home countries. Areas covered include in-
vestor relations, assistant controllership, procurement,
financial planning and analysis, treasury, and foreign exchange.
global Financial excellence program. For employees with 10 to
12 years experience who have received (or are close to receiving)
their first executive appointments. Participants visit best-practices
companies to see how their CFOs and finance teams handle various
issues.
1.
3.
2.
24 CFO | July/August 2012 | cfo.com
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39 cfo.com | July/August 2012 | CFO
Unfinished
Business
Two years after the passage of the
Dodd-Frank Act, the laws implemen-
tation is far behind schedule, and
its success is still in doubt.
By Randy MyeRs
photo-illustration by stephen Webster
Its easy to criticize
the Dodd-Frank
Wall Street Reform
and Consumer
Protection Act of
2010, the contro-
versial legislation
aimed at strengthen-
ing the nations
financial system.
At 848 pages, the law
is frightfully obese,
yet crucial details
are missing. Like
most two-year-olds
(July 21 marks the
second anniversary
of its passage) the
law is still wobbly
on its feet, with prog-
ress measured in
baby steps. Propo-
nents laud it, while
critics see a law only
its creators could
love. Even many
who appreciate its
mission question
whether it will
ever be achieved.
No law can prevent incompetent management or fraud-
ulent management, warns Jeffrey Burchill, CFO of insur-
ance company FM Global. You can penalize people for
gross error or gross misconduct, but its very difficult to
prevent that conduct.
Dodd-Frank nonetheless aims to try. The most sweep-
ing regulatory overhaul of the financial services industry
since the Great Depression, the law created several over-
sight bodies and a deluge of rules for the industry. Yet be-
cause the legislation was drafted so hurriedly, and because
the matters it tackles are so complex, Congress left much
of the heavy lifting to regulators, saddling them with near-
ly 400 rulemaking requirements and calling upon them to
complete dozens of studies.
It didnt happen. By June 1 of this
year, understaffed and overwhelmed
regulatorsat the Securities and
Exchange Commission, the Federal
Reserve, the Commodity Futures
Trading Commission (CFTC), the
Federal Deposit Insurance Corp.
(FDIC), the Office of the Comptrol-
ler of the Currency, and elsewhere
had finalized only 110 of the 398
regulations they were tasked with
crafting, according to law firm Davis
Polk & Wardwell. They had missed
148 deadlines, including 21 for which
they had not even issued any pro-
posed rules. They faced another 140
future rulemaking deadlines, includ-
ing 123 where they had no proposed
rules on the table, and a clutch of
additional rulemaking requirements
for which they had been given no
deadline. Former SEC commissioner
Annette Nazareth, now an attorney
with Davis Polk, says it will probably
be at least well into 2013 before
rulemaking is completed. In some
cases, implementation could stretch
beyond that.
Dodd-Frank was easy to pass in
the aggregate, but implementing it
has been difficult, says former SEC
attorney John Sten, now a partner
at McDermott Will & Emery. Sten
blames not only the size of the task and
regulators budgetary constraints, but
also regulators efforts to make sure that
any rules they do hand down are both
workable and reflective of Congresss
intent. Toward that end, regulators have spent thousands
of hours meeting with business leaders and trade groups
to get their input on rulemaking. While some have blamed
business lobbying for holding up implementation of the law,
Nazareth, who has represented swap dealers, broker-deal-
ers, banks, and the Securities Industry and Financial Mar-
kets Association in talks with regulators, sees it differently.
I understand theres lobbying going on, but theres also
a huge amount of educa-
tional activity going on, she
says. This is a major exer-
cise, and regulators have to
meet with people to under-
stand what the issues are.
Regulators welcome that;
they really want to get it
right.
No law can prevent incompetent manage-
ment or fraudulent management. You can
penalize people for gross error or gross
misconduct, but its very difficult to prevent
that conduct. Jeffrey Burchill, CFO, FM GlObal
Unfinished
Business
40 CFO | July/August 2012 | cfo.com
41 cfo.com | July/August 2012 | CFO
Now, as the third year of implementing Dodd-Frank be-
gins, significant pieces of the legislationsome of them ar-
guably the most controversial and hardest to implement
loom on the agenda. They include the so-called Volcker
Rule, which would bar banks from trading with their own
money; regulating the over-the-counter derivatives mar-
ket; designating systemically important nonbank finan-
cial institutions for greater oversight; and calculating bank
capital requirements.
Signature Accomplishments
ll this is not to downplay the signature accom-
plishments of Dodd-Frank to date. New regu-
latory authorities have been created, including
the Financial Stability Oversight Council, the
Federal Insurance Office, and the Consumer Financial Pro-
tection Bureau. Publicly traded companies must now give
shareholders a nonbinding say on pay indicating wheth-
er they support their companies executive-compensation
packages. Whistle-blowers now have incentives to bypass
internal compliance channels and report potentially illegal
or fraudulent activity directly to the SEC.
Hedge-fund advisers are now required to register with
the SEC. Beginning in June 2012, the largest funds must file
reports on the value of their assets under management,
their counterparty risk, their debts, and other key metrics.
Also beginning in June, the nations largest financial insti-
tutions must have living wills in place outlining how they
will wind down in the event they fail. In April of this year,
the SEC and the CFTC issued final rules defining the terms
swap dealer and major swap participant, a critical first
step in regulating the over-the-counter derivatives market.
A few of these early initiatives have already had an im-
pact on corporate behavior. In response to say-on-pay, notes
attorney James Hauser of Brown Rudnick, some companies
have been redesigning their compensation plans, revising
change-of-control agreements, eliminating tax gross-ups on
change-of-control payments, linking equity awards more
tightly to total shareholder returns or other performance
metrics, and providing more disclosure in their proxy state-
ments. Many observers surmised that General Electric was
seeking to head off negative say-on-pay votes in April of this
year when it announced that, in the wake of constructive
conversations with shareholders, it would retroactively ap-
ply performance measures to stock options it had awarded
Source: SEC (updated 6/20/12). Not all planned activity is listed above. Other regulators are also responsible for rulemaking.
Corporate Governance & Disclosure
Section 952: Report to Congress on study
and review of the use of compensation
consultants and the effects of such use.
Sections 953 and 955: Adopt rules regard-
ing disclosure of pay-for-performance,
pay ratios, and hedging by employees and
directors.
Section 954: Adopt rules regarding recov-
ery of executive compensation.
Credit Ratings
Section 932: Adopt rules regarding NRSRO
[nationally recognized statistical rating
organizations] reports of internal controls
over the ratings process, preventing sales
and marketing activities from influenc-
ing the production of ratings, providing
for a report to the SEC and look-back
when an entity subject to a rating employs
a person who previously worked for the
NRSRO.
Section 932: Adopt rules regarding trans-
parency of NRSRO ratings performance.
Section 936: Adopt rules establishing
training, experience, and competence
standards, and a testing program for
NRSRO analysts.
Section 939F: Report to Congress on study
on the rating process for structured fi-
nance products and associated conflicts
of interest, the feasibility of an assignment
system, metrics to determine the accuracy
of ratings, and alternative compensation
that creates incentives for accurate rat-
ings.
Derivatives
Section 719(d): Joint report to Congress
(with the CFTC) on study regarding stable
value contracts.
Sections 763 and 766: Adopt rules on trade
reporting, data elements, and real-time
public reporting for security-based swaps.
Section 763: Adopt antimanipulation rules
for security-based swaps.
Section 763: Adopt rules regarding the
registration and regulation of security-
based swap execution facilities.
Section 764: Adopt rules regarding the
registration and regulation of security-
based swap dealers and major security-
based swap participants.
Section 765: Adopt rules regarding con-
flicts of interest for clearing agencies, ex-
ecution facilities, and exchanges involved
in security-based swaps.
Market Oversight
Section 210: Jointly with other financial
regulators prescribe recordkeeping re-
quirements that will assist the FDIC when
acting as a receiver.
Section 417: Report to Congress on study
on the state of short selling on exchanges
and in the over-the-counter markets.
Section 619: Adopt rules to implement
prohibition on proprietary trading and
certain relationships with hedge funds
and private-equity funds (the Volcker
Rule).
Section 917: Report to Congress on study
to identify financial literacy among retail
investors.
Municipal Securities
Section 975: Adopt permanent rules for
the registration of municipal
advisers.
On The SeCS AgendA Upcoming rulemaking activity at the Securities and
Exchange Commission for implementing the Dodd-Frank Act (estimated JulyDecember 2012)
A
Bob O'Connor
to CEO Jeffrey Immelt in 2010.
Elsewhere, many banks have already taken steps to cut
their business ties to hedge funds, as will be required under
the Volcker Rule. And growing numbers of banks and busi-
nesses are already clearing more of their over-the-counter
derivatives trades as will be required by Dodd-Frank, even
as they await final rules from federal regulators on exactly
which trades must be cleared.
Preventing Too Big to Fail
till, many of these developments are but a side-
show to the real thrust of Dodd-Frank: to pre-
vent the unwieldy collapse of systemically im-
portant, too big to fail financial institutions.
The act attacks the problem from several anglescreat-
ing stiffer capital requirements for financial institutions, re-
quiring firms that securitize assets to retain some exposure
to the resulting securities, creating greater regulation and
transparency in the over-the-counter derivatives market,
increasing regulation and oversight of credit-rating agen-
cies, prohibiting speculative trading by banks, and creat-
ing the Financial Stability Oversight Council. (The FSOC
brings together the heads of the Treasury Department, the
Federal Reserve, the SEC, and other regulatory bodies to
monitor financial markets and identify potential threats to
U.S. financial stability.)
The FSOC is only getting started on its mission, though,
and regulators have made only partial progress on the other
fronts. Few of their tasks have proven more complicated or
controversial than implementing the Volcker Rule, which
prohibits proprietary trading by banks for their own ac-
counts, precludes Fed-regulated financial institutions from
owning or sponsoring hedge funds or private-equity funds,
and gives regulators the authority to impose additional
capital requirements on nonfinancial companies engaged in
proprietary trading. Dodd-Frank provides that the Volcker
Rule statutory provisions take effect on July 21 of this year,
yet regulators at the Fed, the SEC, the FDIC, and the Office
of the Comptroller of the Currency were still debating the
necessary implementation rules heading into this summer,
and it is unlikely that implementation rules will be issued
by the deadline. The regulators issued interim guidance that
will apply until final rules are adopted.
The delay stemmed in part from the complexity of de-
ciding just what constitutes speculative trading and what
qualifies as hedging, which the Volcker Rule expressly
permits. Regulators also have been the target of vigorous
lobbying by bankers opposed to the rule, often led by JP-
Morgan Chase chairman and CEO Jamie Dimonalthough
JPMorgans announcement in May that it had lost $2 billion
trading credit-default swaps in its own account (with the
chance for that number to go much higher) renewed pres-
sure on regulators to issue final rules with real teeth. Still
at question is whether the JPMorgan Chase trading would
have been covered by the Volcker Rule; the bank insists it
S
Fang Zhe /Landov
42 CFO | July/August 2012 | cfo.com
Former Federal Reserve
chairman Paul Volcker inspired
the rule that would bar
proprietary trading by banks.
Regulators are still
hammering out the details
of the Volcker Rule, one
of Dodd-Franks most
controversial provisions.
would not, while skep-
tics wonder whether
it was, in fact, hedging
and not speculating.
Other major initia-
tives still on the docket include identify-
ing which nonbank financial institutions
will qualify as systemically important
financial institutions, or SIFIs, and
therefore be subject to heightened regu-
lation under Dodd-Frank; and imple-
menting all the rules and regulations
pertaining to the over-the-counter de-
rivatives, or swaps, market, where most
trades will have to be submitted for
clearing to central counterparties. The
FSOC spelled out in April how it will
identify SIFIs, but actually identifying
them is expected to take several more
months.
Regulating Swaps
mplementing Dodd-Franks
swaps regulations has
proved nearly as compli-
cated as parsing out regula-
tory language on the Volcker Rule, with
much of the controversy centered on
whom, and which types of transactions,
should be covered by the new rules. In
addition to instituting regulation of swap
dealers and major swap participants,
Dodd-Frank prohibits those entities from
receiving any federal assistance, such as
advances from a Federal Reserve credit
facility or discount window, that is not
part of a broad-based eligibility program.
Following the JPMorgan Chase loss,
the CFTC began looking into whether the
swaps regulations should be extended
to cover the overseas units of U.S. insti-
tutions, a situation U.S. banks have said
would hurt their ability to compete with
foreign-based rivals. The regulation of
swaps is still a work in progress, says
Sten. It may have a bigger impact on the
affected U.S. institutions than the Vol-
cker Rule.
Elsewhere, the SEC headed into sum-
mer still needing to issue final guidance
on how companies should go about re-
claiming incentive compensation in cases
where companies restate their financial
results due to material noncompliance
with accounting laws. The Sarbanes-
Keeping track of
regulatory prog-
ress on implementing the
Dodd-Frank Act is no easy
matter. As one attorney
recently confessed, No
one really knows what
the hell is going on with
Dodd-Frank.
But there are study
aids. Law firm Davis Polk & Wardwell publishes a monthly progress
report available on its website at www.davispolk.com/Dodd-Frank-Rule-
making-Progress-Report/. For anyone just being introduced to the acts
intricacies, The Dodd-Frank Act: A Cheat Sheet, published by law firm
Morrison & Foerster, is still helpful. It can be found on the firms website
at www.mofo.com/files/Uploads/Images/SummaryDoddFrankAct.pdf.
Meanwhile, many regulatory agencies are doing their best to keep the
public informed as well. The Securities and Exchange Commission has
more rulemaking requirements than any other agency, and it rou-
tinely publishes news on its latest activities. To see the page where
it spotlights its progress on Dodd-Frank, go to www.sec.gov/
spotlight/dodd-frank.shtml. R.M.
Keeping
TracK
of dodd-
franK
W
Unfinished
Business
liams notes, the nations biggest banks have gotten bigger,
not smaller, with the six largest holding assets equal to 63%
of the countrys gross domestic product. That makes their
potential failure an even bigger concern than it would have
been in the past, he contends.
Meanwhile, small community banks are being hurt
by the cost of complying with a law written in response
to problems created by large banks, says Williams. That
charge has been echoed by former FDIC chairman Bill
Isaac, now chairman of Fifth Third Bancorp., who has said
he wouldnt be surprised if half of the nations community
banks go out of business if they dont get some relief from
Dodd-Frank.
I think Dodd-Frank was a political response to an eco-
nomic problem, and history tells us that is not always the
best solution, says Isaac.
If Williams proves prescient, Dodd-Frank will have been
a large, costly, and ultimately misguided effort to strength-
en the financial markets. Yet in light of the ongoing devas-
tation wrought by the 2008 credit crisisto the financial
and housing markets and economies around the worldit
is probably unrealistic to expect that policymakers would
not have tried.
CFO
Randy MyeRs is a contributing editor at CFO.
Dodd-Frank co-sponsor Sen. Christopher Dodd (right)
retired from Congress in 2011; Rep. Barney Frank (left)
will leave in 2013.
44 CFO | July/August 2012 | cfo.com
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The FuTuRe OF FinanCe
Working capital is piling up
at Americas largest companies.
Too
Much
Of A
Good
Thing
CFO | July/August 2012 | cfo.com 46
By russ BAnhAm
illustrAtions By dAvid plunkert
the 2012
CFO/rel
Working
CApitAl
sCoreCArd
Its one of the most
important metrics
for gauging a compa-
nys efficiency and fi-
nancial health. So when
a new survey of 1,000 of
the largest public com-
panies in the United
States indicates that
their working capital
continues to be much
larger than is consid-
ered prudent, thats
cause for concern.
The annual survey,
conducted by REL
Consulting, reveals an
overall lack of sus-
tained working capital improvement among U.S. companies.
After a predictable decrease in working capital during the
Great Recession, when companies focused more on the bal-
ance sheet, working capital performance has leveled off.
Days working capital (DWC)the number of days it
takes to convert working capital into revenuedid decrease
marginally in 2011, from 37.7 days to 37 days. But REL down-
plays the improvement, attributing it in part to the compa-
nies 13% average revenue growth. To have a 1.9% decrease
is a positive, but not by a lot, says Prathima Iddamsetty, se-
nior manager of operations, research, and marketing at REL,
a working capital consultancy.
Cash on hand across the group of surveyed companies,
dubbed the REL U.S. 1,000, increased by $60.3 billion in 2011,
helped in part by companies taking advantage of low interest
rates to issue more debt, up by a record $233 billion year-over-
year. Those companies now have a staggering $910 billion in
excess working capital, including $425 billion in inventory,
according to REL. Way too much cash is being left on the
table and not being put toward growth objectives, says Id-
damsetty.
There is a wide gulf between top-performing companies
in the upper quartile of the survey and median performers.
On average, top performers have 49% less working capital
tied up in operations, collect from customers more than two
weeks faster, pay suppliers about 10 days slower, and hold
less than half the inventory than median companies. (The
2012 CFO/REL Working Capital Scorecard, which begins on
page 51, shows the best and worst companies in terms of
working capital performance in 20 industries.)
The research indicates little sustainability in working
capital improvement. Fewer than 8% of companies managed
to reduce days working capital over the past three years, and
no company surveyed improved all elements of DWCin-
ventory, receivables, and payablesover the period.
CFOs should care about these results, not just because
working capital is a reliable index of efficiency, but because
the world is getting more competitive. When global inves-
tors think about where to put their money, they look for
where theyre going to get the best return for a given amount
of risk, says Kevin Kaiser, professor of management prac-
tice at INSEAD, the international business school. Having
capital tied up is an inefficient use of their investments. In a
world where people have choices about where to send their
cash, theyre not going to invest it in companies with ineffi-
cient working capital practices.
Gains Not Sustained
REL also attributes the modest improvement in DWC to
companies doing several things (in addition to the revenue
growth already mentioned): collecting faster from custom-
ers, getting rid of excess inventory built up during the re-
cession, and tightening production. Although days inventory
Companies now have a stagg-
ering $910 billion in excess
working capital, including $425
billion in inventory, according
to REL. Way too much cash
is being left on the table.
Prathima iddamsetty,
senior manager of operations, reL ConsuLting
outstanding fell, the survey indicates that companies turned
inventory over slower in 2011 than in the prior year.
We are more or less back to where we were well before
the recession, says Iddamsetty. The long-term trends in-
dicate virtually no ability to make sustained working capital
improvements.
Many companies that improved working capital dur-
ing the recession havent continued to do so, says Ashley
Sparks, an REL associate. They made it a priority to get
working capital in order, but now they have so much cash
theyve shifted their focus from the balance sheet to the P&L
statement, emphasizing new products and revenue growth,
she says.
Overall, corporate efficiency declined in 2011: operating
expenses increased by 13%, gross margins decreased by 2.3%,
and profitability fell by 0.4%, according to REL. Sparks notes
that operating expenses are increasing in tandem with rev-
enue growth$1.2 trillion and $1.1 trillion, respectively, ac-
cording to the survey. Companies are failing to realize the
importance of a sustainable, significant, and reinforcing cash
flow, she says. Revenues are increasing, but so are oper-
ating expenses. There is a missed opportunity to limit the
48 CFO | July/August 2012 | cfo.com
the 2012 CFO/reL Working Capital scorecard
David Bowman
ix companies top the REL U.S.
1,000 list in terms of sustained
working capital performance:
Colgate-Palmolive, Cubic, Cytec Indus-
tries, Deluxe, PH Glatfelter, and Watts Wa-
ter Technologies. These companies either
improved working capital performance
(days working capital and its three major
elements) or sustained it (performance
did not deteriorate by more than 5%) each
year for three successive years.
Working capital performance is a
critical element of how we define suc-
cess here, says Bill McCartney, CFO of
Watts Water Technologies, a $1.5 billion
(in 2011 revenues) global manufacturer of
safety and control packages for residen-
tial and commercial applications. Half
our growth here has come from acquisi-
tions36 in the last 11 yearsand weve
been able to finance a lot of it through
At these companies, working capital is working well.
Capital Companies
internal cash flows. Weve been able to
achieve free cash flow in excess of net in-
come the last 4 years, thanks to effective-
ly managing working capital.
Working capital also is a key part of
the cash flow metrics at Cytec Industries,
where it is linked to employees annual
incentive compensation. The firm estab-
lished a target to reduce net working cap-
ital in 2009 and challenged the workforce
to achieve it. We linked 20% of every-
ones bonus to achieving the metric, says
CFO Dave Drillock. Theyve done it now
three years in a row.
The $3 billion specialty materials and
chemicals manufacturer did it by seg-
menting inventory to better track slow-
and fast-moving products, hunting down
late payers, and extending terms with
vendors. We did things like hiring more
collectors and urging them to make pro-
active phone calls to improve receiv-
ables, Drillock says. That took our days
past due from an average of 12 to 15 days
to 5. We then extended terms with ven-
dors from 45 days to 60 days, but prom-
ised wed always pay on time. And we de-
cided if a product moves slowly, it should
be made when needed, whereas we could
build inventory for products with a fast
turnover.
Constantly Chipping Away
Deluxe, a $1.42 billion provider of market-
ing tools and web services for small busi-
nesses and financial institutions, also has
what CFO Terry Peterson calls a diligent
accounts-receivable process. After a
certain number of days past due, we send
a letter and follow up with phone calls to
collect the balance, Peterson explains.
We also push customers to receive elec-
tronic invoices, which shaves several
days off the payment terms. Were also
more careful in extending credit to small
businesses, we reduced the number of
our SKUs, and we enhanced forecasting
with a new SAP tool to get our inventory
in line.
He adds, Were constantly chipping
away to get another inch of progress.
Like the other top-performing compa-
nies, $1.2 billion Cubic keeps close watch
on its key working capital metric: days
sales outstanding plus days inventory
outstanding minus days payable out-
standing. Were a systems integrator for
government and transportation, so we
dont have products, but when youre in
the services business its all about per-
formance, says John D. Thomas, Cubics
vice president of finance. You make de-
liveries on time, you get paid on time.
Cubic also links working capital to se-
nior employee compensation. Our man-
agements incentive pay has been very
good of late because of our high return
on net assets, Thomas says. People are
focused when they negotiate contracts,
building in terms they can meet and get-
ting advance payments where they can,
minimizing the amount of capital used per
transaction.
The CFOs were not surprised their
companies topped the REL U.S. 1,000. But
they cant offer any simple solutions for
their poorer-performing peers. Says Dril-
lock, Theres no magic to improving
working capital management. The key is
not to take your eye off the ball. R.B.
Theres no magic to improving
working capital management.
The key is not to take your eye
off the ball.
Dave Drillock, CFO, Cytec industries
S
49 cfo.com | July/August 2012 | CFO
Making it
Work
To help create long-term,
sustainable working
capital improvements,
REL Consulting recom-
mends the following best
practices:
e Make working capital optimization and cash flow im-
provement a strategic priority, with visible senior ex-
ecutive backing.
r Link cash-flow performance and working capital man-
agement to the compensation structure.
t Make cash flow one of the key metrics for performance
management within operations and finance.
u Invest in improving demand forecasting and deployment
of effective sales and operations planning processes.
i Standardize customer and supplier payment terms, and
control exceptions through an escalation process.
o Segment customers and suppliers according to value
and risk to support a differentiated approach that ap-
plies the companys resources to those customers and
suppliers to improve cash flow.
p Automate and eliminate high-volume, low-value transac-
tions to free up resources to focus on high-value custom-
ers, suppliers, and transactions.
a Regularly review trade-receivables allowances accord-
ing to historical experience, creditworthiness, and age of
the trade-receivables balances.
s Create estimates and judgments for age of inventories
and other relevant issues that could affect the salable
condition of products and their estimated selling prices.
R.B.
amount of working capital it takes to generate revenue.
Kaiser notes that poor working capital performance and
inferior products may go together. A company with a poor
product will provide better payment terms to customers
than its competition45 days instead of 30, he says. It will
keep more inventory to provide that product on the spot to
a buyer. It will pay suppliers faster to make sure the inven-
tory is full. In effect, its working capital deficiency drives its
revenue growth, not the quality of its goods or services. If
this keeps up, it will eventually be overtaken.
Hoarding Cash
Why arent companies putting more energy into their work-
ing capital management? For the most part, they have strong
Companies have strong
balance sheets, record cash
on hand, and record cash flow
from operations over the
last five years, so theyre
thinking theyll just sustain
things as they are.
Dan GinsBeRG,
associate principal, rel consulting
balance sheets, record cash on hand, and record cash flow
from operations over the last five years, so theyre thinking
theyll just sustain things as they are, says REL associate
principal Dan Ginsberg. This is a common, but shortsighted,
attitude.
Indeed, cash is still king for the REL U.S. 1,000. This is
clearly evidenced by the $60 billion increase in cash on hand
and the $233 billion increase in debt in 2011. Over a three-
year period, cash on hand was $277 billion and accumulated
debt $268 billion.
But using debt instead of efficient working capital man-
agement to get more cash into the bank account comes with
a long-term cost: eventually they will have to pay [the debt]
down, points out Ginsberg. Theyll also have to generate a
return on their existing assets that exceeds the interest rate,
which is not what were seeing.
Its better to tap working capital as a funding source for
long-term growth strategies, says Ginsberg. REL Consulting
cites top performers in a broad range of industries, leverag-
ing working capital to open up new businesses in emerging
markets with growing consumer demand, for instance.
Top performers have very tight manufacturing time-
tables and inventory management practices, in addition to
strict collections and payment systems that are standardized
across all locations, says Michael K. Rellihan, an associate
principal at REL. The cash they generate from this high level
of working capital efficiency is then applied to the growth
agenda. Long-term, the result is a powerful benefit to the
bottom line.
Only process improvements will provide sustainable
cash flow benefits, adds RELs Sparks. This requires work-
ing more closely with customers, getting better information
to suppliers, and improving demand forecasting. You need to
have an underlying process in place to manage working capi-
tal on a day-to-day basis; if not, it will be difficult to sustain.
Kaiser has a similar view: Building a business with a sus-
tainable competitive advantage insists on working capital ef-
ficiency, he says. They go hand in hand. CFO
Russ Banham is a contributing editor at CFO.
50 CFO | July/August 2012 | cfo.com
The 2012 CFO/ReL Working Capital scorecard
N/M = not meaningful, because DWC moved from a positive to a negative number or vice versa.
Based on fnancial statements of 1,000 of the largest U.S. public companies (excluding the fnancial
sector), as reported by Capital IQ. Median shown is for the full industry. Source: REL Consulting
Aerospace & Defense
Northrop Grumman 41 -5% 43 12 4% 12 20 0% 20 33 -5% 34
Lockheed Martin 48 5% 45 19 3% 19 18 37% 13 49 -4% 51
Raytheon 66 4% 64 5 -6% 5 22 -1% 22 49 5% 47
Goodrich 61 5% 58 132 1% 131 35 29% 27 158 -2% 162
Spirit AeroSystems 19 15% 17 197 -10% 219 42 8% 39 175 -11% 197
BE Aerospace 49 -7% 53 216 -14% 252 29 -7% 31 236 -14% 274
Median 60 0% 60 57 5% 54 27 5% 26 90 1% 88
Airlines
Southwest Airlines 7 18% 6 9 28% 7 25 11% 22 (8) -8% (9)
SkyWest 8 -49% 16 12 -18% 14 22 -23% 29 (2) -277% 1
United Continental 13 -47% 25 6 -17% 7 20 -30% 28 (0) -106% 4
US Airways Group 9 -4% 10 7 -7% 7 11 -9% 12 5 3% 5
Hawaiian 21 25% 17 5 2% 5 18 -8% 19 8 230% 2
Republic Airways 11 12% 10 13 0% 13 6 -7% 6 19 9% 17
Median 10 -8% 11 6 -12% 7 17 -10% 19 (1) 19% (1)
Auto Components
Lear 48 -10% 54 16 -3% 17 52 -7% 56 13 -10% 14
TRW Automotive 50 -6% 53 19 -2% 19 52 -2% 53 17 -12% 19
Tenneco 47 -3% 49 30 -11% 34 59 -8% 64 18 0% 18
Federal-Mogul 63 -1% 63 50 2% 50 41 5% 39 73 -2% 74
Cooper Tire & Rubber 40 -12% 45 65 4% 63 32 -24% 42 73 11% 66
Exide Technologies 64 -3% 66 66 16% 57 53 16% 45 77 -1% 78
Median 51 -4% 54 30 -6% 32 47 -1% 47 35 -9% 39
Building Products
Masco 45 3% 43 38 5% 36 38 28% 29 45 -10% 50
USG 39 -4% 41 37 2% 36 28 4% 27 48 -4% 50
Armstrong World Industries 29 -3% 30 52 -6% 55 27 22% 22 53 -14% 62
Owens Corning 42 5% 40 54 20% 45 33 -4% 35 63 24% 51
Nortek 47 -13% 54 53 -14% 61 27 -19% 34 72 -12% 82
Griffon 68 -23% 89 53 -31% 76 37 -30% 52 84 -25% 113
Median 45 3% 43 45 8% 42 31 -5% 32 59 12% 53
2011
1-yr. %
change 2010 2011
1-yr. %
change 2010 2011
1-yr. %
change 2010 2011
1-yr. %
change 2010
DIO DWC DPO
The 2012 Working
Capital Scorecard
DSO
Best in Industry
Worst in Industry
Days Sales Outstanding (DSO): AR/(total revenue/365)
Year-end trade receivables net of allowance for doubtful accounts, plus financial
receivables, divided by one day of average revenue.
A decrease in DSO represents an improvement, an increase a deterioration.
Some companies have securitized receivables, which improve DSO through
financing alternatives without improving the underlying customer-to-cash
processes such as credit-risk assessment, billing, collections, and dispute
management. The scorecard eliminates this distortion by adding securitized
receivables back on the balance sheet before calculating DSO.
Days Inventory Outstanding: Inventory (DIO)/(total revenue/365)
Year-end inventory plus LIFO reserve, divided by one day of average revenue.
A decrease in DIO is an improvement, an increase a deterioration.
Days Payables Outstanding (DPO): AP/(total revenue/365)
Year-end trade payables divided by one day of average revenue.
An increase in DPO is an improvement, a decrease a deterioration. For purposes
of the survey, payables exclude accrued expenses.
Days Working Capital (DWC): (AR + inventory - AP)/(total revenue/365)
Year-end net working capital (trade receivables plus inventory, minus AP) divided by
one day of average revenue.
The lower the number of days, the better. The percentage change is marked N/M
(not meaningful) if DWC moved from a positive to a negative number or vice versa.
Note: Many companies use cost of goods sold instead of net sales when calculating DPO and DIO. Our methodology
uses net sales across the four working capital categories to allow a balanced comparison.
Companies in the survey are categorized using the Global Industry Classification Standard.
How
Working
Capital
Works
51 cfo.com | July/August 2012 | CFO
N/M = not meaningful, because DWC moved from a positive to a negative number or vice versa.
Based on fnancial statements of 1,000 of the largest U.S. public companies (excluding the fnancial
sector), as reported by Capital IQ. Median shown is for the full industry. Source: REL Consulting
Chemicals
TPC Group 28 -17% 34 12 -37% 19 23 -21% 29 17 -28% 24
CF Industries 16 -27% 22 18 -27% 25 6 -26% 8 28 -27% 39
PolyOne 41 0% 41 31 6% 29 38 0% 37 35 5% 33
Ecolab 112 88% 60 59 109% 28 44 109% 21 128 90% 67
Sensient Technologies 56 -7% 60 106 -2% 108 24 -9% 26 138 -3% 142
OM Group 51 8% 47 148 65% 90 41 27% 32 158 51% 105
Median 48 -5% 51 51 1% 51 29 -5% 31 70 0% 70
Communications Equipment
Qualcomm 24 0% 24 19 6% 18 24 -7% 25 19 18% 16
Juniper Networks 47 -11% 53 6 194% 2 27 2% 26 26 -9% 29
EchoStar 59 34% 44 9 92% 5 35 42% 25 32 37% 24
Netgear 81 -12% 92 51 -2% 52 36 0% 36 95 -11% 107
Ciena 87 -14% 101 48 -38% 77 33 -44% 59 103 -14% 119
Tellabs 90 18% 76 41 13% 36 28 1% 27 103 22% 85
Median 62 3% 61 21 -3% 21 28 7% 26 55 -1% 56
Computers & Peripherals
Apple 18 -41% 31 3 -56% 6 49 -27% 67 (29) -6% (31)
Dell 38 -1% 39 8 7% 8 69 2% 67 (22) 7% (21)
Western Digital 46 -1% 47 22 7% 21 59 6% 56 9 -20% 11
Imation 66 3% 65 59 16% 51 58 6% 55 67 11% 61
Diebold 53 2% 52 57 -1% 57 29 3% 28 82 -1% 82
NCR 66 1% 66 52 -8% 56 35 -7% 38 83 -1% 84
Median 52 13% 47 22 7% 21 42 2% 42 32 26% 26
Containers & Packaging
Crown 34 -7% 36 48 -1% 49 59 -2% 60 23 -8% 25
Graphic Packaging 33 2% 32 42 12% 37 36 11% 32 39 4% 37
Greif 49 -4% 51 37 -11% 42 42 -15% 49 44 2% 43
Rock-Tenn 75 85% 41 61 59% 39 53 72% 31 84 72% 49
AptarGroup 61 -3% 63 46 -6% 49 17 -22% 22 89 0% 90
Sealed Air 90 58% 57 55 24% 44 40 112% 19 105 28% 82
Median 47 6% 45 45 -4% 48 37 8% 34 56 -4% 58
Diversified Telecommunication Services
Level 3 Communications 55 107% 26 N/M N/M N/M 63 90% 33 (8) 22% (7)
Frontier Communications 39 -21% 49 N/M N/M N/M 36 -14% 42 3 -59% 7
TW Telecom 26 10% 23 N/M N/M N/M 14 -8% 15 12 44% 8
AT&T 39 -2% 40 3 -11% 4 25 13% 22 18 -19% 22
Verizon Communications 39 -4% 41 3 -20% 4 14 2% 13 28 -9% 31
Windstream 56 52% 37 7 26% 5 25 69% 15 37 38% 27
Median 39 6% 37 - N/M - 25 62% 16 14 -34% 21
Food Products
Darling International 19 -56% 44 10 -55% 23 12 -65% 35 18 -45% 32
Dean Foods 26 -1% 27 13 -1% 13 21 -9% 24 18 9% 16
Flowers Foods 22 3% 22 15 8% 14 15 5% 14 22 5% 21
Hain Celestial 46 2% 45 55 -12% 62 30 -17% 36 71 0% 72
J. M. Smucker 26 38% 19 65 26% 52 18 25% 14 74 30% 57
Seneca Foods 24 15% 21 167 7% 155 20 2% 19 171 9% 157
Median 26 1% 26 42 4% 40 23 -14% 26 45 14% 40
Health-Care Equipment & Supplies
Invacare 52 -5% 54 39 6% 37 30 -1% 30 61 0% 61
West Pharmaceutical Services 45 8% 42 46 -4% 49 27 32% 21 64 -8% 69
Idexx Laboratories 42 7% 40 40 -6% 42 11 46% 7 71 -4% 75
ResMed 81 6% 76 59 -5% 62 16 -16% 19 123 4% 119
Teleflex 68 -9% 75 71 -17% 86 16 -26% 22 124 -11% 140
Zimmer 69 2% 67 76 -6% 81 12 5% 11 133 -3% 137
Median 64 0% 64 49 4% 47 16 -7% 17 97 3% 94
Household Products
Procter & Gamble 28 12% 25 33 11% 30 35 6% 34 25 21% 21
Church & Dwight 35 7% 33 27 -2% 28 31 6% 29 32 0% 32
Clorox 37 -3% 38 29 14% 25 30 3% 29 36 5% 34
Spectrum Brands 41 -21% 52 50 -34% 75 35 -21% 44 55 -33% 83
Central Garden & Pet 44 -5% 46 74 8% 69 26 -3% 27 92 4% 88
Energizer 70 -1% 71 51 -10% 57 23 -2% 23 99 -6% 105
Median 38 -1% 39 39 1% 39 30 5% 29 47 -3% 49
2011
1-yr. %
change 2010 2011
1-yr. %
change 2010 2011
1-yr. %
change 2010 2011
1-yr. %
change 2010
DIO DWC DPO DSO
Best in Industry
Worst in Industry
52 CFO | July/August 2012 | cfo.com
The 2012 CFO/REL Working Capital Scorecard
N/M = not meaningful, because DWC moved from a positive to a negative number or vice versa.
Based on fnancial statements of 1,000 of the largest U.S. public companies (excluding the fnancial
sector), as reported by Capital IQ. Median shown is for the full industry. Source: REL Consulting
Machinery
Paccar 23 -3% 24 21 -23% 27 26 -5% 28 18 -23% 23
Deere 41 -23% 53 71 5% 67 93 -3% 96 19 -23% 25
Navistar International 32 7% 30 45 -5% 48 56 1% 56 22 -3% 22
Terex 66 2% 65 99 -18% 120 43 -9% 47 122 -11% 137
Kennametal 68 7% 63 94 14% 82 34 39% 24 128 5% 121
Joy Global 73 5% 70 111 40% 79 38 24% 30 146 23% 119
Median 56 -3% 58 57 1% 57 32 1% 32 82 -1% 83
Metals & Mining
Cliffs Natural Resources 12 -58% 28 43 5% 41 20 -2% 21 35 -28% 49
Alcoa 23 -17% 28 54 -6% 58 39 -3% 40 38 -16% 45
Sims Metal Management 21 -10% 24 40 6% 38 23 9% 21 39 -4% 41
Allegheny Technologies 50 2% 49 108 1% 107 35 -3% 36 124 2% 121
AM Castle 58 18% 50 132 35% 98 38 36% 28 153 28% 120
Carpenter Technology 57 -2% 57 149 -9% 163 37 -7% 40 168 -7% 181
Median 32 -9% 35 56 -4% 58 23 -6% 24 65 -7% 69
Multiline Retail
Family Dollar Stores N/M N/M N/M 49 3% 48 29 -7% 31 20 23% 16
Dollar General N/M N/M N/M 52 2% 51 26 -2% 27 26 6% 24
Dollar Tree N/M N/M N/M 48 -4% 50 16 -3% 16 32 -5% 34
Belk 4 20% 3 88 4% 84 21 5% 20 70 5% 67
Saks N/M N/M N/M 87 -1% 88 14 21% 12 73 -4% 76
Nordstrom 68 -11% 77 40 4% 38 32 -4% 33 76 -7% 82
Median - N/M - 62 -6% 66 25 9% 23 37 -14% 43
Paper & Forest Products
Verso Paper 27 12% 24 35 9% 32 23 -17% 28 39 37% 29
Louisiana-Pacific 15 2% 14 44 10% 40 16 11% 14 43 6% 41
International Paper 43 3% 41 37 -4% 39 35 -5% 37 45 4% 43
PH Glatfelter 31 -13% 35 52 -6% 55 25 1% 25 58 -12% 66
MeadWestvaco 47 -3% 48 50 -3% 51 38 1% 38 58 -6% 61
Clearwater Paper 33 -18% 41 46 -24% 61 12 -49% 24 67 -13% 77
Median 32 -16% 38 45 -1% 46 24 -9% 26 53 -7% 57
Pharmaceuticals
Bristol-Myers Squibb 57 0% 57 24 5% 23 45 20% 37 36 -15% 43
Allergan 49 2% 48 17 -1% 17 13 -18% 17 53 8% 49
Forest Laboratories 40 11% 36 38 -9% 41 16 39% 11 62 -6% 66
Endo Pharmaceuticals 98 -16% 117 35 -8% 38 35 -32% 51 98 -5% 103
Watson Pharmaceuticals 93 62% 57 71 10% 65 60 173% 22 103 3% 100
Hospira 58 2% 56 92 4% 89 22 -27% 30 128 11% 116
Median 61 6% 58 38 -11% 42 21 -3% 22 77 -1% 78
Software
Intuit 16 14% 14 N/M N/M N/M 12 -19% 15 4 -571% (1)
Take-Two Interactive Software 27 -21% 34 8 -30% 11 18 -14% 21 17 -30% 24
Electronic Arts 34 66% 21 8 -22% 10 23 155% 9 19 -13% 21
VMware 93 8% 86 N/M N/M N/M 5 -36% 8 88 13% 78
Parametric Technology 101 14% 89 N/M N/M N/M 5 25% 4 96 13% 85
salesforce.com 110 17% 94 N/M N/M N/M 5 34% 4 105 16% 90
Median 67 -3% 68 1 4% 1 9 -9% 10 58 -1% 59
Specialty Retail
Aarons 16 16% 14 N/M N/M N/M 41 0% 40 (25) -8% (27)
AutoZone 6 2% 6 111 -2% 114 125 3% 121 (7) 4991% (0)
Rent-A-Center 6 -15% 7 1 -28% 1 13 -21% 17 (7) -25% (9)
Mens Wearhouse 9 -17% 11 88 4% 84 19 -12% 22 77 5% 73
Zale N/M N/M N/M 158 -3% 163 30 -15% 35 128 1% 128
Tiffany 18 -16% 22 208 8% 192 11 5% 11 215 6% 203
Median 6 11% 5 52 -2% 53 23 -4% 24 35 1% 34
Textiles, Apparel & Luxury Goods
Skechers USA 40 -18% 48 51 -29% 72 52 17% 45 39 -49% 76
Coach 13 14% 11 37 1% 37 10 -3% 11 39 6% 37
Liz Claiborne 29 -39% 47 46 -29% 65 35 -21% 44 41 -40% 68
Wolverine World Wide 57 -1% 57 65 1% 64 15 -21% 19 107 4% 103
Columbia Sportswear 76 3% 74 79 2% 77 32 0% 32 122 3% 119
Hanesbrands 37 -13% 42 127 13% 112 36 2% 35 128 7% 119
Median 40 -15% 47 56 -10% 62 25 1% 24 71 -16% 85
2011
1-yr. %
change 2010 2011
1-yr. %
change 2010 2011
1-yr. %
change 2010 2011
1-yr. %
change 2010
DIO DWC DPO DSO
Best in Industry
Worst in Industry
53 cfo.com | July/August 2012 | CFO
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research
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research
AUTHORITATIVE.
INDEPENDENT.
FINANCE-DRIVEN.
JUST LIKE YOU.
You
answered.
77
We
asked.
7 7
55
60
65
70
Asia
Europe
US
Q2 12 Q1 12 Q4 11 Q3 11
40
50
60
70
Asia
Europe
US
Q2 12 Q1 12 Q411 Q3 11
55 cfo.com | July/August 2012 | CFO
Source for all charts: Duke University/CFO Magazine Global Business Outlook
Survey of 773 CFOs444 from the U.S., 102 from Europe, and 227 from Asia.
Even as the global economy
continues to send signals rang-
ing from mixed to downright
alarming, U.S. finance chiefs
say they still plan to hire at a rela-
tively strong pace, according to the
latest Duke University/CFO Maga-
zine Global Business Outlook Survey,
released in June. U.S. CFOs say they
will expand their full-time domestic
workforces by 2.5% on average over
the next 12 months, a bump that could
lower the unemployment rate to 7% by
the end of the year.
Of the more than 400 U.S. CFOs
surveyed in this 65
th
consecutive quar-
terly survey, nearly 30% say their em-
ployees are maxed out, and 60% are
looking to add staff. Finance chiefs will
also increase their hiring of temporary
employees by just under 1% and ex-
pand their offshore outsourced work-
forces by 4%.
Muddling Through
CFOs continue to hire but are less optimistic, according
to the latest Duke/CFO Business Outlook Survey.
By Kate OSullivan
2.5%
The average by which U.S.
CFOs say they will expand
their full-time domestic
workforce over the next
12 months.
Duke University/CFO Survey Results
Business
Outlook
lion in revenue planning to expand
their staffs by 6% on average in the
next year and those with $100 mil-
lion to $499 million in revenue plan-
ning to add 4%. Technology, soft-
ware, and biotech companies will add
more staff than any other sector, with
CFOs at those companies forecasting
a 5% increase in full-time workers.
Still, despite generally positive
hiring plans, the CFO Optimism In-
Tom Fitzsimmons, CFO of TMP
Worldwide, a New Yorkbased com-
munications firm focusing on recruit-
ment advertising programs, says his
company is hiring, mostly on the tech-
nology side. Fitzsimmons also has a
good window into overall hiring based
on clients plans. While TMP is seeing
some growth in its business, we can
attest that were not seeing rapid ex-
pansion in the private sector, especially
in larger corporations, he says. Well-
managed companies are continuing to
acquire talent and expand slowly. But
theres no sense of pressure on corpo-
rations to fill their open jobs.
The survey data supports Fitzsim-
monss impression: at companies with
more than $10 billion in annual rev-
enue, there are no plans to hire in the
next 12 months. Midsize companies
will be the most active recruiters, with
those with $500 million to $999 mil-
On the Home Front
CFOs rate their optimism about their companies
financial prospects compared with last quarter.
Own company
CFOs were asked to rate their optimism about their companies on a scale of
0100, with 0 being least optimistic.
Taking a Dip
CFOs rate their optimism about their domestic or
regional economy compared with last quarter.*
National/regional economy
*CFOs were asked to rate their optimism about the economy on a scale of 0100,
with 0 being least optimistic.
U.S.
Europe
Asia
U.S.
Europe
Asia
1.0%
1.5
2.0
2.5
3.0%
Wages
Q2 12 Q1 12 Q4 11 Q3 11
0%
2
4
6
8
10%
A&M S
R&D S
TS
CS
Q2 12 Q1 12 Q4 11 Q3 11
Business
Outlook
dex fell in the second quarter, as the
773 finance chiefs surveyed around
the globe grew gloomier. U.S. CFOs
rate their optimism about the domes-
tic economy at 56 out of 100, compared
with 59 last quarter. The optimism of
Asias CFOs dropped notably, falling
from 65 last quarter to 58 in May. That
marked the first time in the history
of the survey that Asias CFOs, tradi-
tionally more optimistic, fell in line
with their U.S. counterparts. They cite
consumer demand, government poli-
cy, price pressure from competitors,
and global financial instability as top
concerns. Meanwhile, at 52 out of 100,
optimism in Europe lags more than in
other regions, not surprisingly given
the ongoing debt crisis.
U.S. CFOs cite consumer demand as
their top concern, followed by worries
about price pressure from competitors
and federal government policies. Glob-
al financial instability also continues to
weigh on finance chiefs.
Fitzsimmons says the continued
softness in the housing market is pro-
ducing emotional problems for the
economy. As long as people continue
to feel less wealthy, there will be cau-
tion in consumer spending, he says,
noting that deflated home prices mean
that many people have less personal
wealth than they did 10 years ago. We
also have a significant number of un-
employed or underemployed, he adds.
Still Spending
Finance chiefs in the United States
do continue to plan to spend money
in critical areas, however. Technol-
ogy leads the major spending catego-
ries, with CFOs reporting a planned
increase of 8% on tech spending over
the next 12 months, up from 6% last
quarter. CFOs also say their compa-
nies will increase capital spending
by 5% on average in the coming year,
down from 7% last quarter. Research-
and-development spending and mar-
keting-and-advertising spending will
both rise by 3%, in line with last quar-
ters plans.
As they look for growth, 39% of
finance chiefs say their companies
are spending money on the pursuit of
major innovationinvesting in proj-
ects that, if successful, would have a
significant impact on the business. On
average, CFOs say their companies are
Capital
spending
Technology
spending
R&D
spending
Marketing
& advertising
spending
Selective Spending
12-month % change predicted by U.S. CFOs
Wages: Little Movement
12-month % change predicted by U.S. CFOs
Note: Concerns that received identical scores are grouped together.
About the macro economy:
e
Consumer demand
r
Federal-government
agenda/policies
Price pressure from
competitors
t
Global financial
instability
OTheR COnCeRns inCluDe:
national employment outlook
Federal budget deficit
Cost of fuel
Credit markets/interest rates
state/local government
budget deficits
About their own companies:
e
Ability to maintain
margins
r
Attracting and retaining
qualified employees
Ability to forecast
results
t
Cost of health care
OTheR COnCeRns inCluDe:
Working capital
management
Maintaining morale/
productivity
supply-chain risk
Balance-sheet weakness
Managing iT systems
TOp COnCernS OF CFOs
56 CFO | July/August 2012 | cfo.com
-2%
0
2
4
6%
Number of domestic full-time employees
Number of domestic temporary employees
Number of offshore outsourced employees
Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2
Pricing Parity
Change in prices of own-company products
0%
1
2
3
4
5%
Ination
Q2 12 Q1 12 Q4 11 Q3 11
No. of offshore
outsourced
employees
No. of domestic
full-time
employees
No. of domestic
temporary
employees
Staffing Up, Slowly
12-month % change predicted by U.S. CFOs
2010 2011 2012
CaSh: Still King
Is it likely that your firm will begin to deploy its cash reserves
during the next 12 months?
60% Capital spending
41% Acquisitions
27% Pay down debt
25% Increase hiring
20%
Marketing &
advertising
45%
Need cash as
a liquidity buffer
42%
Lack excess cash
to deploy
32%
Holding cash until
economic
uncertainty declines
19%
Few attractive
investment
opportunities
4%
Want to avoid
repatriation tax
On what would cash
reserves be spent?
IF YES
Note: Multiple responses permitted.
0% 20 40 60 80 100%
Yes 48% No 52%
spending about 15% of their total bud-
get on innovation efforts.
Even with plans to spend, CFOs
continue to keep a careful watch on
cash, with cash holdings as a percent-
age of total assets rising from 16% to
17% over the past year. Slightly fewer
than half of respondents say they plan
the global view
In Europe, finance chiefs say hiring,
R&D, and advertising spending will
all be relatively flat over the next year,
while capital spending and earnings
are both expected to decline. European
CFOs plan to hold cash, citing liquidity
concerns and economic uncertainty in
the region, as well as a lack of attrac-
tive investment opportunities.
Asias finance chiefs plan to in-
crease capital spending by 7% on aver-
age over the next 12 months, and ex-
pect to increase R&D spending by 4%.
Forty percent of Asias CFOs say their
companies are spending a portion of
their budgets on major innovations, in
line with their U.S. counterparts. Com-
petition for workers in the region con-
tinues to be fierce, with finance chiefs
planning to boost wages by 7% on
average over the next year. CFOs also
plan to expand their full-time work-
forces in Asia by 3% over the same
time period. CFO
7Of those surveyed, the
amount of cash and market-
able securities that their firms
held as a percentage of total
assets was 17%.
Why not?
IF NO
to deploy some cash in the next 12
months, with capital spending winning
the largest share of the dollars, fol-
lowed by spending on acquisitions and
debt payments. Most of the finance
chiefs who plan to continue to hold
cash point to economic uncertainty,
saying that they need a liquidity buffer.
57 cfo.com | July/August 2012 | CFO
ternal networks outperformed their
rivals financially. Such capabilities
correlated, for instance, with rising
market share and thickening operating
margins. Twenty-seven percent of the
3,200 global executives in McKinseys
survey reported that they had gained
real economic value through collabora-
tive and social-media tools.
Those results were explored ear-
lier this year in a CFO Research study
sponsored by Ariba, the maker of busi-
ness software. Based on interviews
with 18 executives, academics, consul-
tants, and authors, the study examined
how companies have embraced the net-
work model of doing business, embed-
ding technological advances in every
job and using it to generate increased
productivity. Technology is serving
as the enabler, says Walter Wallace,
instructor in the department of mana-
gerial sciences at Georgia State Uni-
versitys Robinson School of Business.
Businesses now have the tools to take
trust to a whole new level.
Part of this development is due to
the emergence of easier-to-use techno-
logical tools for internal networking
tools that mimic the capabilities of, for
example, Twitter. A lot of the stuff
that is happening out on external social
networks is influencing the collabora-
tion systems that are being developed
for the inside of enterprises, says Da-
vid Armano, executive vice president
of innovation and integration at Edel-
man Digital, the interactive arm of the
Thinkstock
For some time now, executives
have been touting teamwork as
a competitive tool. The com-
plexity brought on by globaliza-
tion, they argue, creates challenges so
grand they can be addressed only by
multiple minds. And the rise of internal
networks and social-media tools makes
far-flung collaboration increasingly fea-
sible. Indeed, the knowledge that em-
ployees already devote so much time to
websites like Facebook and Twitter has
surely made more than one CFO won-
der: Why cant we work this way?
That turns out to be a better idea
than anyone may have realized. Two
years ago, in The Rise of the Net-
worked Enterprise: Web 2.0 Finds Its
Payday, McKinsey & Co. found that
companies that used internal and ex-
Putting Social
Networks to Work
Companies are fnding real economic value in
cooperation and social media.
By Josh Hyatt
To be effective, you
need to embed the
use of social media
across the fabric of
the company.
Richard Binhammer, director of
social media and community, Dell
Field
Notes
Perspectives from CFO Research
Source: Booz & Co./Buddy Media, 2011
Social Studies
Which social-media platforms
are priorities for large
companies?
public-relations firm. As those evolve,
they will change the way employees
will work together and the level at
which they collaborate.
Companies are also shifting their
goals for the technology, from mere-
ly reducing operating costs (travel,
for example, or communications) to
boosting capabilities such as time to
market and rate of innovation through
collaboration. The notion is that col-
laboration can be a competitive advan-
tage, says Bruce Weinberg, professor
of marketing at the Isenberg School of
Management at the University of Mas-
sachusetts Amherst. Its beyond hav-
ing a social-media strategy; it means
infusing the company with the kind of
collaborative spirit that can give the
business an edge.
Becoming Socially aware
Adopting collaboration technology
typically starts with the awareness of
its value as a marketing or customer-
service tool. Richard Binhammer, who
is now director of social media and
community at Dell, recalls that he first
0%
20
40
60
80
100%
YouTube Twitter Facebook
94%
77%
42%
58 CFO | July/August 2012 | cfo.com
More froM Cfo researCh:
To read the full report cited in this article, go to the research page
on www.cfo.com. Our research team regularly polls senior finance
executives on core aspects of financial management. Youre certain to
find insights that are relevant to your most pressing concerns.
Editors
Choice
sition through social-media tools re-
quires patience, flexibility, and adapt-
ability. New applications and tools
are constantly emerging (have you
pinned anything lately?). But by
sharing informationboth internally
and externallya company can tackle
problems more readily, collaborate
more freely, and compete more flex-
ibly.
Does all that teamwork slow things
down? Quite the opposite: Collabo-
ration speeds you up and gets you to
market. It gets you into the race faster
and better and cheaper, says Zach-
ary Tumin, a senior researcher at Har-
vard Universitys Kennedy School of
Government and co-author of a recent
book, Collaborate or Perish! Work-
ing Across Boundaries in a Networked
began responding to online posts (in
blogs, forums, and so on) about the
computer giant in 2006, when such
posts numbered about 4,000 a day.
Today, that figure is up to 25,000. The
company now offers formal social-
media training to employees.
We came to a very early realization
that the discussions that go on on the
Web touch every part of the business,
says Binhammer. To be effective, you
need to embed the use of social media
across the fabric of the company.
Chuck Hollis, vice president for
global marketing and chief technology
officer at data-storage company EMC,
says that about six years ago, he real-
ized that you could take just about
any fundamental process you might
care about and you could envision it in
a social-media world and how it might
look different and better. For exam-
ple, using social-networking tools to
identify the top candidates for a posi-
tion is cheaper than pursuing tradi-
tional routes. And an internal social
network can help new employees get
up to speed much quicker than weeks
of training can.
We do a lot of R&D and project
development, which is basically smart
people working together, says Hollis.
More and more those smart people
are scattered around the world, and
may or may not be badged employ-
ees of the company. So how do we
start doing collaborative product de-
velopment with the very best ideas
out there? This other theme, around
our core business processes, began to
emerge.
Fortifying a businesss value propo-
Making Connections
Users of Web 2.0 technologies report the following internal benefits:
Source: McKinsey & Co. survey of about 3,200 executives, reported
in The Rise of the Networked Enterprise: Web 2.0 Finds Its Payday,
McKinsey Quarterly, December 2010.
Increasing
speed of access to
knowledge
Reducing
communication
costs
Increasing speed
of access to
internal experts
Decreasing
travel costs
77% 60% 52% 44%
41% 40% 29% 28%
Increasing
employee
satisfaction
Reducing
operational costs
Reducing time
to market for
products/services
Increasing number
of successful
innovations in new
products/services
World. Its always been true that col-
laboration has given people tremen-
dous advantage. Today that advantage
is really decisive.
Thats because the pace of compe-
tition is constantly accelerating. Its
like the [wording] you see on the rear-
view mirror of your car: Objects may
be closer than they appear, says Joel
Babbit, co-founder and CEO of Mother
Nature Network, which supplies en-
vironmental news. Its much closer
than you think, and its coming up right
behind you at a speed much faster than
before. CFO
The full report on which this article
is based, Collaborate to Win, is avail-
able for downloading at www.cfo
.com/research.
59 cfo.com | July/August 2012 | CFO
TAKE
AWAY
HIS TAKE-AWAY: The Popeyes system is about 98% franchised. We have to be
attentive to our franchisees and their needs in order for the whole company
to thrive. We make money by capturing a royalty from their revenues. Some
companies might simply drive revenues by doing a lot of low-price offerings that
dont make a lot of money for the franchisees. But that works against you in time.
You might get a temporary bump by running a deeply discounted promotion,
but it would cost you a lot in terms of your credibility with your franchisees, and
you certainly wouldnt be
able to sustain it as a busi-
ness model. So weve fo-
cused on making our fran-
chisees more profitable.
We started analyzing
their P&Ls and pick-
ing out areas where they
could do better on
electricity, food, and labor
costs. Weve stripped out
about $32 million to $34
million of costs over the
last two to three years.
Saving our franchisees-
that money is a good
expression of our com-
mitment to a partnership.
interview by
marielle Segarra
Stan Kaady
Popeyes CFO Mel Hope
Recipe for Profts
nAmE Mel Hope
poSITIon CFO of Popeyes Louisiana Kitchen
prEvIouS poSITIonS SVP of finance and chief accounting officer
of AFC Enterprises, the parent company of Popeyes; CFO of First
Cambridge HCI Acquisitions, a real estate investment firm in
Alabama; accounting, auditing, and business advisory professional
for PwC.
noTAblE for Being finance chief of the worlds second-largest
fast-food fried-chicken chain. Popeyes has more than 2,000
restaurants in 45 states and 25 other countries.
60 CFO | July/August 2012 | cfo.com
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Wait ad.indd 1 5/7/12 2:50 PM