From the November 2008 issue of Treasury & Risk magazine

Gold AHA Award Winner in Corporate Finance

It's not every day that the switch is flipped on the range of corporate functions in a $6 billion public company, yet this was the case at Dr. Pepper Snapple Group Inc. The beverage maker, formerly a division of Cadbury Schweppes in the United Kingdom, was spun off as a newly formed public company in May. Since it previously was a division, albeit one roughly half the size of its parent company, it did not have its own set of corporate functions, relying instead on the finance organization within Cadbury Schweppes. With only 45 days to begin reporting quarterly earnings externally, and in a credit environment that was daunting, Dr. Pepper Snapple Group (DPS) confronted extraordinary pressure. "It was very difficult for us to finance in the March-April timeframe when Bear Stearns went under," recalls Jolene Varney, DPS senior vice president of corporate financing. "We got in just under the gun."

Varney was recruited to help plan and execute the separation, secure financing, get the organization ready to become a public company and develop from scratch such corporate functions as tax, treasury and accounting. She had some experience with spin-offs in her previous job as global treasurer of Kimberly-Clark Corp., selling both its pulp and technical papers businesses, but from the other side of the table. "I had never set up corporate functions before; it's not very often that you get the chance to set up processes, hire people and create an organization to match the way you envision it," she says.

Assisted by two other new hires--Taun Dimatteo, senior vice president of tax, and Benita Casey, vice president of internal audit--Varney inaugurated a 90-day plan in January 2008 to prepare for the demerger. Significant challenges were identified, among them the need to report financials under U.S. Generally Accepted Accounting Principles (GAAP), cobbling together $4 billion of financing in a tough credit market, and hiring the rest of the finance organization and setting up core processes and controls, such as insurance, corporate audit, controller, tax, treasury and Sarbanes-Oxley functions. Looming over Varney and her team was the 45-day deadline. "I walked in the door in January and by May we were a public company," she says. "Looking back it is amazing what we pulled off. You're in the middle of the major transaction and within a month and a half you have to have everything in place--the full range of insurance policies, books ready to be closed, your first 10-Q ready to be filed, and your first quarterly earnings on tap to be reported. It was all-consuming."

Within 60 days of joining the company, Varney had only half the organization in place. Still, these were the key leaders of various finance functions, charged with filling out the rest of their staffs and functions, developing processes, and establishing short-term and long-term goals. They hit the ground running. "Everyone walked in without a job description, was handed a blank sheet of paper, and told to figure out how to meet the objectives laid out in the 90-day plan," says Varney. "We were all aligned in terms of what needed to be done, functioning as a team rather than in individual silos." They finished the sprint together. DPS filed its first quarterly earnings report on May 7.


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