CFO, The Magazine for Senior Financial Executives articles from January 2002

CFO, The Magazine for Senior Financial Executives archives from January 2002

Holding out for a hero. (From the editor).(Brief Article)
January 1, 2002... ENRON MAY BE THE MOST SPECTACULAR business failure ever, but these days it has plenty of company. Every one of the "10 stocks to last the decade" named in Fortune's August 2000 investor's guide has lost at least a third of its value. Most,...

Taking the long view. (Letters to the editor).(Brief Article)
January 1, 2002... I ENJOYED STEPHEN BARR'S ARTICLE "The Hard Sell" (November 2001). This is a complicated topic, and Mr. Barr's coverage was interesting and very readable. One important point that seems to be missing in the debate about...

Goad timing. (Letters to the editor).(Brief Article)
January 1, 2002... "UNDER COVER?" (NOVEMBER 2001) was a very insightful, well-timed article that focused on a community that very much needs the information you provided. I have worked in [the insurance] industry as a broker for more than two decades. This cycle...

Feed the dogs, starve the stars. (Letters to the editor).(Brief Article)
January 1, 2002... CONGRATULATIONS ON YOUR WELL-written piece on brand valuation ("New Brand Day," November2001). To my mind, there are two issues that merit further exploration: First, how do you solve the "feed the dogs, starve the stars" problem; that is,...

Wrong numbers. (Newswatch).(strategies of Tenet International)(Brief Article)
January 1, 2002... Roger Oustecky, chief operating officer of Tenet International, a company that audits corporate telecommunications bills, claims that 80 percent of phone-company bills are wrong, accounting for customer overpayments of 7 percent on average....

Capital idea. (Newswatch).(Brief Article)
January 1, 2002... CAPITAL IDEA: 17% of middle-market manufacturing CFOs use the Web to investigate sources of capital, says a Fleet Capital survey.

The toxic avenger. (Capital heroes).(investment outlook)(Brief Article)
January 1, 2002... THINGS COULD BE WORSE. Despite a dismal economy, companies with solid credit have had little trouble raising capital (see "No Ordinary Time," November 2001). And although borrowing is tougher for companies with a double-B rating or lower,...

What andy knew. (News watch).(Enron CEO Andrew Fastow)(Brief Article)
January 1, 2002... REGARDLESS of his lawyer's insistence that former Enron Corp. CEO Andrew Fastow bears no responsibility for the company's collapse, the largest in corporate history, Fastow's own comments suggest that he does. More than two years ago, as...

Partnerships within partnerships. (News watch).(Enron's finances)(Brief Article)
January 1, 2002... The debt that Fastow discussed with CFO was needed for a partnership called Marlin, which helped finance the Atlantic Water Trust, Enron's unconsolidated subsidiary. The Atlantic Water Trust in turn invested in Azurix, a subsidiary that owned a...

Dancing in the dark. (News watch).(Enron's finances)(Brief Article)
January 1, 2002... In hindsight, of course, analyst understanding turned out to be woefully inadequate. Perhaps, in the case of the rating agencies, analysts felt constrained in their research by the fact that Enron, like other issuers, paid their employers for...

The enron debacle. (News watch).(Brief Article)
January 1, 2002... THE ENRON DEBACLE prompted the Big Five accounting firms to issue recommendations to improve corporate financial disclosure.

Come together. (Tax-Free mergers).(I.R.S. rules on mergers)(Brief Article)
January 1, 2002... SOMETIMES THE INTERNAL REVENUE Service is on your side. Just look what it's done for mergers lately. In the past year, so-called forward triangular mergers have become very popular. In these multistep transactions, the acquiring company creates...

Contingency plans. (Debt issues).(Brief Article)
January 1, 2002... Contingent convertible bonds (cocos) have their advantages (see "Who Needs Equity?" July 2001). But they also carry a risk that has become much more evident since the bull market ground to a halt. The problem with cocos is that during a...

Guard up, hacking down. (Cybersecurity).(fighting computer viruses)(Brief Article)
January 1, 2002... A WELCOME BYPRODUCT of inCreased national seCurity is that the frequency and Cost of computer-code viruses has dropped, says a new report from Computer Economics Inc. With cyberspace patrolled more heavily since September 11, "virus activity...

Closing the gap? (Human capital).(happy employees increase profits)(Brief Article)
January 1, 2002... It's a line employees and union leaders have touted for years: Happy employees make for more profitable companies. Now there seems to be more data to back it up. Watson Wyatt Worldwide, the benefits consulting firm, says it has evidence to...

We believe. (Newswatch).(employee attitudes)(Brief Article)
January 1, 2002... WE BELIEVE: 02% of U.S. workers are "very confident" that employers are working to avoid layoffs, reports the Employment Law Alliance.

Union busts wall street. (Conflicts of interest).(AFL-CIO filed shareholder resolution with Goldman Sachs Group Inc.)(Brief Article)
January 1, 2002... FOR THE PAST YEAR, Wall Street firms have been under the gun for longstanding conflicts of interest between their sell-side analysts and investment bankers. Regulators, Congress, and irate investors have all expressed concern that purportedly...

Give me credit. (Shareholders VS. Bondholders).(improving a credit rating)(Brief Article)
January 1, 2002... Looking to boost your company's credit rating? Try issuing equity, and then use the proceeds to redeem or refinance debt. Moody's Investors Service reports that 24 companies saw upgrades at least partly stemming from the injection of common...

Game over. (Newswatch).(pro-forma financial statements)(Brief Article)
January 1, 2002... GAME OVER: The SEC warns that companies could face civil-fraud suits if they release potentially misleading pro-forma figures.

Ready for PRM time? Companies that need to talk to companies are the luckiest companies of all. (Tech watch).(partner relationship management)(Brief Article)
January 1, 2002... THESE DAYS, corporate executives banter about "relationships" more enthusiastically than a gaggle of guests on "Oprah." They also seem willing to put their money where their buzzwords are: Customer relationship management (CRM), for example,...

They've come undone: With buying activity sharply down, merger breakups made the biggest headlines last year. (New deals).
January 1, 2002... IN LATE SUMMER, with the economy slouching toward recession, it was clear that deal-making in 2001 would fall far short of the prior year's stunning $1.7 trillion record. Looking for some positives in the situation, investment banker Jon...

Watching and waiting: The wed seemed poised to change everything. What happened? (Spotlight treasury).
January 1, 2002... If the Internet is the future of corporate treasury management, few treasurers or other finance executives seem in a rush to get there. A recent survey by the Association for Financial Professionals (AFP) of nearly 1,000 of its members...

In house or out? (Spotlight treasury).(information systems)(Brief Article)
January 1, 2002... Any executive who has experienced an ERP implementation knows about the trials and tribulations of breaking in a new information system. Treasury applications may not be as complex as ERP, but their adoption, maintenance, and protection involve...

Meet the new boss: He's here to save your company. But don't expect miracles.(examining the careers of turnaround CEOs)(Cover Story)
January 1, 2002... UNITED AIRLINES. Providian Financial. Warnaco. Xerox. Gillette. Campbell Soup. Just a few of the companies that have hired so-called turnaround CEOs in the past year. The list is growing daily--and little wonder. In these recessionary...

Operating romm: Rising hospital costs, a plague to host companies, have helped CFOs nurse profits back to health.
January 1, 2002... THE MID-1990s WERE PROMISING years for most corporate finance chiefs trying to hold down health- care costs, but painful ones for hospital companies such as Tenet Healthcare. Like other hospital operators, Tenet was no match for the rapidly...

The medicare millstone.(medicare reimbursement for hospitals)(Brief Article)
January 1, 2002... HOSPITALS SUFFERED A NASTY BLOW last month, when the federal government reported that a glitch in a new software system would delay the processing of billions of dollars of 2002 Medicare payments for three months, at least until April. ...

Double whammy: As real estate markets SAG, companies with synthetic leases could face a costly dilemma. (Special report real estate).
January 1, 2002... WHEN SILICON GRAPHICS Inc. announced that it sold part of its northern California headquarters in December 2000 to Goldman Sachs for $276 million, one building alone accounted for $160 million. That was $50 million more than SGI had paid for...

On or off? (Special report).(managing synthetic leases)(Brief Article)
January 1, 2002... THE CONUNDRUM OF WHAT off-balance-sheet treatment of assets and liabilities is worth comes quickly to the fore when discussing the merits of synthetic leases. High-performance-computing company Silicon Graphics Inc., for instance,...

Coming into focus: New merger-accounting rules may sharpen investor views of intangibles, but CFOs should also consider the impact of write-offs. (Accounting).
January 1, 2002... A ROUND MIDYEAR, INVESTORS WILL BE GETTING A better look at corporate balance sheets, thanks to new accounting rules covering goodwill and how to reflect its impairment. The big question is, will they like what they see? Financial...

A Graham of prevention: The Bush administration has changed its tactics for ridding business of regulations deemed undesirable. Meet the man who's now in charge. (Regulation).(John D. Graham)
January 1, 2002... JOHN D. GRAHAM ISN'T A WELL-KNOWN BUSH Administration official, even inside the Beltway. But CFOs ought to acquaint themselves with this bureaucrat in the Office of Management and Budget (0MB), since he is responsible for making sure federal...

Prodigal CFOs. (Grapevine).(Michael Yonker rejoins InFocus Corp.)(Brief Article)
January 1, 2002... It's deja vu all over again at InFocus Corp.: CFO Michael Yonker has rejoined the company after three years as CFO of Wieden + Kennedy, a privately held advertising agency. Yonker left InFocus, he says, to spend more time with his children,...

For the love of money. (Grapevine).(executive change news briefs)(Brief Article)
January 1, 2002... Doyle Arnold is the king of cash! The new EVP and CFO of Salt Lake City-based Zions Bancorp comes from BankAmerica Corp., where he was group EVP for corporate strategy and development. Prior to BankAmerica, Arnold was employed at Wells Fargo &...

Are you okmart? (Turnaround turmoil).(chief financial officer changes at Kmart)(Brief Article)
January 1, 2002... ARE YOU OKMART? CFO Martin Welch lasted a year after Kmart directors brought in Chuck Conaway as CEO and charged him with turning around the fortunes of the slumping retailer. "I thought we hit it off really well,". recalls Welch, who had...

Returning in 2002. (News watch).(Brief Article)
January 1, 2002... RETURNING IN 2502: Look for companies to begin issuing tracking stock again if Loews's October issue is well received.