October 2010 Newsletter - Financial Executives International

President’s
Corner
Steve Martin
SDFEI President
BakBone Software
Dear Colleagues:
In September we initiated our fall
season of dinner meetings with a fantastic
overview of the Del Mar Thoroughbred
Club by CEO, Joe Harper.
Joe was very engaging and set the bar
high for our upcoming slate of dinner
speakers in this coming year. I hope all
of you will be able to join us at an upcoming
meeting.
FEI is a national organization of financial
executives that has representation
at the national level before legislative
and regulatory bodies in our profession.
At the local level, the chapters
support professional interaction and
information sharing among finance
professionals, FEI sponsors and other
support professionals.
Based upon my recent involvement
with both the national and local leadership
teams, I am pleased that FEI is
working diligently to evolve into an
organization that remains relevant to
the career development of many finance
and non-financial professionals.
FEI is seeking to build a structure
and culture to respect the prestige of
executive members, while increasing
(continued on page 4)
FEI San Diego
Chapter Newsletter
October 2010
Volume 2010 — No. 8
SDFEI Focuses Attention on Health Care
With Sharp’s Michael Murphy October 21
With today’s substantial outlays for healthcare occupying the minds
and efforts of San Diego financial executives, SDFEI turns to Sharp
HealthCare President & CEO Michael Murphy for insights at the
chapter’s dinner session Thursday October 21, Marriott La Jolla.
Register via e-mail at pierpoint2@cox.net or call Paul at
619.231.5953. Timeline: Reception at 5:30pm; Dinner at 6:30pm;
and Mr. Murphy’s insightful comments at 7:30pm.
Mr. Murphy is president and chief executive officer of Sharp
HealthCare. He oversees a workforce of nearly 14,000 employees,
2,600 affiliated physicians and 2,000 volunteers. They provide care
and service in a fully integrated not-for-profit system that includes
four acute-care hospitals, three specialty hospitals, three affiliated
medical groups, five urgent care centers, four skilled nursing facilities,
home health, hospice, state-of-the-art outpatient facilities and a
health plan.
Mike Murphy grew up in Southern California. He is a graduate of
California State University at Long Beach and is a certified public
accountant. His career in health care spans more than 20 years. He
served as chairman of the board of the Greater San Diego Regional
Chamber of Commerce in 2005.
Recent reports reveal that at least 15% of the U.S. population is
completely uninsured and a substantial additional portion of the population
(35%) is "underinsured", or not able to cover the costs of their
medical needs. Per person, more funds are spent on health care in the
United States than in any other nation in the world. Despite the fact
that not all citizens are covered, the nation has the third highest public
healthcare expenditure per capita. Learn more October 21 at SDFEI!
DUES PAY FOR SDFEI MEETINGS
Each chapter program is financed by local dues remitted by chapter members.
None of your national dues are applied to any chapter dinners, nor to
the cost of your newsletter, nor to the members’ directory nor to other costs
of providing benefits and services for you at the chapter level. Your annual
San Diego Chapter dues investment covers the cost of meals, banquet wine,
parking, audio-visual equipment and hotel fees. Renew membership today!

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FEI SAN DIEGO CHAPTER
Newsletter Editor: Paul Pierpoint
Post Office Box 13054
La Jolla, CA 92039-3054
Phone: 619-231-5953
Fax: 1-619-231-5958
Email: pierpoint2@cox.net
Website: www.financialexecutives.org
October 21, 2010
Marriott La Jolla
Board of Directors
Professional Development Seminar
Insurance Panel — “Healthcare”
Reception
Dinner with Michael W. Murphy,
President & CEO, Sharp HealthCare
Presentation by Mr. Murphy
November 18, 2010
Marriott La Jolla
Board of Directors
Professional Development Seminar
“Tax & Other Updates”
By Sara Mankiewicz, Deloitte
Director — Lead Tax Services
Reception
Dinner
Presentation by Guest Speaker
December 2010
No Meeting Scheduled
January 19, 2011 (Wednesday)
Marriott La Jolla
Board of Directors
Reception
“Dinner with SEC”
James Kroeker (Invited)
Chief Accountant, SEC
Presentation by Mr. Kroeker
February 17, 2011
Marriott La Jolla
Board of Directors
Professional Development Seminar
“Revenue Recognition”
PricewaterhouseCoopers Experts
Reception
Dinner with Dan McAllister
Presentation by Dan McAllister,
San Diego County Treasurer and
Tax Collector
March 17, 2011
Marriott La Jolla
Board of Directors
Professional Development Seminar
Reception
Dinner
Presentation by Guest Speaker
3:15pm
4:30pm
5:30pm
6:30pm
7:30pm
3:15pm
4:30pm
5:30pm
6:30pm
7:30pm
4:00pm
5:30pm
6:30pm
7:30pm
3:15pm
4:30pm
5:30pm
6:30pm
7:30pm
3:15pm
4:30pm
5:30pm
6:30pm
7:30pm
October PD Seminar: Health Care Panel
A health care panel of insurance experts continues the 2010 series
of SDFEI Professional Development Seminars October 21, headed up
by two of SDFEI’s Sponsoring Partners, Barney & Barney and
Marsh-Mercer, joined by BB&T-John Burnham Insurance professionals.
Panelists are Barney & Barney’s Principal Emeritus Dan Murphy;
Marsh-Mercer’s San Diego Office Leader Brian Cote; and participation
by BB&T-John Burnham Insurance’s Ron Hensley, Denise
Hujing, Kandace McCrae, and Jim Iacometti. Register at pierpoint2@cox.net
or call Paul at 619.231.5953. See you there!
Chapter Leadership At Work For SDFEI
SDFEI’s Board began 2010-11 with its summer strategic planning meeting held
at La Jolla Beach and Tennis Club. Above (l.-r.) Past President Gary Correia
and visiting FEI President-CEO Marie Hollein on the beach promenade with
Board Member Tom Nirschl of USAopoly and Chapter President Steve Martin
of BakBone Software. Above right, Ms. Hollein offered a comprehensive overview
of Financial Executives International, its myriad programs and benefits.
Below, SDFEI’s Board met in September. Pictured (l.-r.) are Paul Sullivan of
the YMCA of San Diego County; Greg Hanson from Brinson Patrick Securities;
Patrick Edd of Annex Brands; Past SDFEI President Gary Correia; and President
Steve Martin. Back to camera are (l.-r.) Vernon Evans of the San Diego
Regional Airport Authority; Carolynn Workman with Hybrid Investment Group;
SDFEI Treasurer Barrett Lambert from Autosplice, Inc., and SDFEI Secretary
Tom Zech, Marshall Edwards, Inc.
Not pictured are Board Members — Immediate SDFEI Past President Chris
Peavey of Watkins Manufacturing; SDFEI VP-Special Events Ron Dutt; Steve
Fisher of SAIC; SDFEI VP-Professional Development Tesfaye Hailemichael; Dr.
Sharon Lightner of San Diego State University; SDFEI Key Club Member Phil
Nerhood; Tom Nirschl with USAopoly, Inc.; Kit Sparks from Cushman & Wakefield;
consultant Julie Rayle; and Jessica Walker of TGG Accounting.

Member Roster Stands At 180 . . .
Financial Executives Continue to Join SDFEI in 2010-11
Tricia Gilmore
Cubic Corporation
Tricia Gilmore became the Director of Financial Planning and Reporting of Cubic Corporation in
March 2008. Previously, she was the Manager of that department. Tricia joined Cubic in May
2006.
Prior to employment with Cubic Corporation, she performed Accounting Management roles for
various organizations, from medical device distribution to municipal government. Tricia is an
alumna of PricewaterhouseCoopers, originally starting with Coopers and Lybrand in 1996.
Mrs. Gilmore received her B.S. in Business Administration (Accountancy) from San Diego State
University in 1996.
Greg Hamilton
Enigma Diagnostics Inc.
Greg Hamilton was appointed Chief Operating Officer and Chief Financial Officer of Enigma
Diagnostics Inc. in October of 2009. Enigma Diagnostics is a molecular diagnostics manufacturer
that has developed a novel “sample to result” real time PCR platform for use in the point of care
setting. Prior to Enigma Diagnostics he was Vice President of Operations at Hologic, Inc. which
acquired Third Wave Technologies in July 2008.
Mr. Hamilton received his M.B.A. from the University of Chicago Booth School of Business
and a B.S. degree in Finance from Purdue University.
Victoria Krivogorsky, Ph.D
San Diego State University
A faculty member in the Charles W. Lamden School of Accountancy, Dr. Krivogorsky’s research
and teaching experience includes serving as visiting faculty at ESSEC-Paris, ESCP-EAP European
School of Management in Paris; Higher School of Economics in Moscow; and l’Universite
d’Avergne, Clermont-Ferrand, France. Her research interests rest in the areas of IFRS and corporate
governance.
Her research efforts resulted in numerous academic publications. and she presented the results of
her research efforts at business schools and conferences in France, Netherlands, Switzerland, Portugal,
Finland, Poland, Russia, Turkey, Italy and China.
Dr. Krivogorsky received her Ph.D in economics from the Academy of Sciences of Soviet Union and Ph.D in
accounting from the University of Wisconsin-Madison.
Jeff Slovak
Pro Performance Sports (SKLZ)
Jeff Slovak is the Chief Financial Officer for Pro Performance Sports. He relocated from Chicago
to join the company in October 2009. Previously he worked at ACCO Brands where he
held a variety of divisional and corporate roles. His most recent role within ACCO was the Vice
President-Finance for the Workspace Tools division.
Prior to ACCO, Jeff worked in the audit department of Fortune Brands and started his career in
public accounting at Deloitte and Touche.
Jeff received his B.S. in Accounting from Miami University and an M.B.A. from Northwestern
University’s Kellogg School of Management.
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Politics & Business. . .
Building A Relationship
The news media, elected officials, regulators,
customers, shareholders, and interest
groups are all exerting a tremendous
amount of influence over policy, politics
and boardroom decisions. Two political
insiders recently met at an FEI Houston
gathering to share perspectives on the impact
that the changing regulatory environment
and upcoming mid-term elections
will have on the private sector.
Financial executives saw a lively interaction
and debate between Dan Bartlett,
President and CEO, Public Strategies, Inc.
and former Counselor to President George
W. Bush; and Jeff Eller, Vice Chairman,
Public Strategies, Inc. and former Media
Affairs Director to President Bill Clinton.
With Election Day just around the corner,
anti-incumbent sentiment high and
public opinion of government and corporations
at historic lows, the unrest of the electorate
is being felt at ballot boxes and
boardrooms across the country.
From the public’s opinion of government
and corporate America to hot topic issues
and political predictions, FEI Members
gained valuable insight and an “in the
trenches” viewpoint on the upcoming elections
and the current political landscape.
— Michelle Lewis, Public Strategies, Inc.
mlewis@pstrategies.com Ph:512.432.1784
Cont’d from Page 1
President’s Corner
awareness and creating a pipeline for future
members. There are some exciting
developments in this area and I look forward
to sharing them with you in future
communications.
Thanks for your continuing support of
the San Diego Chapter of FEI and please
encourage others who may benefit from
being part of our San Diego FEI
“Community” to contact me about joining
us at an upcoming meeting.
Help Steve Martin Build SDFEI
Route your dues to SDFEI, P.O. Box
13054, La Jolla, CA 92039. Or call Paul
at 619.231.5953 for credit card payment.
International Tax Legislation Changes
By Patrick Connolly
PricewaterhouseCoopers LLP
2010 has shown to be another active year for
international tax law reform in the U.S. From
the new contract manufacturing regulations becoming
effective on January 1, 2010 for calendar
year taxpayers (these rules impose current
US tax on certain income of a controlled foreign
corporation where the foreign corporation engages
a contract manufacturer), to the enactment
of new withholding, reporting and disclosure
requirements (the "FATCA" rules) to address
Mr. Connolly.
offshore tax compliance, to the codification of
economic substance (which denies tax benefits associated with a
transaction where the transaction serves no economic purpose
other than tax savings).
Continuing the wave of international tax reform, President
Obama signed into law on August 10, 2010 H.R. 1586 which
included eight additional targeted international tax law changes
anticipated to generate $11 billion in revenue for the government.
One international provision is a change in the foreign tax credit
rules related to deemed dividends to the U.S. taxpayer from a
second or lower-tiered foreign corporation (typically arising from
loans by that foreign corporation to its US parent group, referred
to as "section 956 assets").
Under this new rule, a taxpayer may no longer look solely to
the pool of foreign taxes paid or accrued by that lower-tiered foreign
corporation if a dividend from that corporation to its immediate
foreign parent and then up the corporate chain to the U.S.
group would have resulted in a lower foreign tax credit being
available to the taxpayer. In that case, only the lower foreign tax
credit may be claimed.
This rule is effective for section 956 assets acquired by a controlled
foreign corporation after 12/31/10. Another international
provision denies taxpayers foreign tax credits to the extent the
foreign tax is on income that will otherwise not be subject to
U.S. tax because of a "covered asset acquisition".
A "covered asset acquisition" arises, for example, when a taxpayer
purchases the stock of a foreign corporation and then
makes a U.S. election to increase the tax basis in that foreign corporation's
assets (such as goodwill and other intangibles). Annual
amortization and/or depreciation deductions of those assets occur
solely for U.S. tax purposes as a result of this election, and while
the income of the foreign corporation is not decreased for local
foreign tax purposes, the deductions result in lower earnings for
that foreign corporation for U.S. tax purposes.
Consequently, while the foreign corporation may make a future
distribution to its U.S. shareholder and the distribution is treated
as a dividend for foreign purposes, the distribution may be
(continued on page 5)

Environmental Challenges . . .
Sempra Tackling Renewable Energy
By Mark Fisher, VP & Controller
Sempra Generation
At Sempra Energy we’re focused on a lowcarbon
energy model, and plan to invest nearly
$15 billion over the next five years to bring new
supplies of clean and reliable energy to our customers.
We believe these investments are consistent
with public policy initiatives at both the federal
and state level.
We are expanding the supply of renewable energy
through investments in solar and wind fa-
Mark Fisher.
cilities. One such project is the 48-megawatt
Copper Mountain Solar facility, currently being built by our Sempra
Generation subsidiary in Nevada. The project consists of over
750,000 solar panels on nearly 400 acres and is one of the largest
photovoltaic solar facilities in North America.
The primary benefits of renewable energy are: an elimination carbon
emission, which reduces global warming; cleaner air; use of
natural resources that are not depleted by energy production; and
decreased reliance on foreign resources.
But, even with all of the benefits, renewable energy faces a variety
of challenges that make its development very difficult.
A major challenge to the development of renewable energy is the
availability of electric transmission capacity. Just as power produced
from fossil-fueled sources must travel across transmission
lines to reach consumers, so must renewable energy. Often, renewable
energy is produced in remote locations that require extensions
from the existing transmission network to reach them. Both new
electric transmission projects and renewable energy projects typically
face long regulatory reviews and legal challenges.
Additional challenges are the current economic environment,
which is making it difficult for many developers to obtain the financing
they need to build projects, and production limitations for supplies
of solar panels and wind turbines. But, it’s fair to say that renewable
energy is here to stay and will become an increasingly important
part of our nation’s energy mix in the coming years.
Index of Leading Economic Indicators . . .
San Diego Economy Static in August 2010
The USD Burnham-Moores Center for Real Estate's Index of Leading
Economic Indicators for San Diego County was unchanged in August, according
to Professor Alan Gin of the University of San Diego’s School of
Business Administration. Although there was no decline, the unchanged
reading breaks a string of 16 consecutive increases in the USD Index.
Four of the components in the Index were up: Help wanted advertising
and the outlook for the national economy registered medium-sized gains
while local stock prices and consumer confidence were positive but virtually
unchanged. Rounding out a month that saw no significant changes in
either direction, building permits declined moderately while initial claims
for unemployment insurance were slightly negative.
Cont’d from Page 4
Tax Legislation Changes
treated as a non-taxable return of capital
for U.S. tax purposes because those deductions
may have offset all of the foreign
corporation's income.
The "covered asset acquisition" rule
acknowledges this disparity between the
calculation of income for U.S. and foreign
tax purposes and prevents a taxpayer
from claiming a foreign tax credit
for foreign taxes associated with amounts
that are not treated as income for U.S.
tax purposes due to deductions that arise
for U.S. tax purposes but not for foreign
tax purposes. This rule is effective for
"covered asset acquisitions" after
12/31/10.
International tax law changes proposed
by President Obama in the President's
2011 budget include an extension
through 2011 of (a) the controlled foreign
corporation "look-through" exception
to current US tax on passive transactions
between a taxpayer controlled foreign
subsidiaries (e.g., royalty, interest
and dividend payments). An unfavorable
proposal in the budget is to currently tax
a new category of income of a controlled
foreign corporation for excess returns
generated by the foreign corporation
from intangible property transferred by
the US shareholder to the foreign corporation
if the corporation is low-taxed.
The details of this proposal have not yet
been provided.
What Are Taxpayers to Do?
In the face of international tax legislation
uncertainty, taxpayers are encouraged
to stay up to date on legislative developments
and be proactive in their
planning. Understanding the impact of
the various proposed international tax
changes may provide a taxpayer the opportunity
to preserve benefits they may
have otherwise expected to realize in the
future.
ABOUT THE AUTHOR
Mr. Connolly is a partner in Pricewaterhouse-
Coopers' SoCal international tax practice.
More: patrick.t.connolly@us.pwc.com. PwC’s
SDFEI Sponsoring Partner is Rich Kalenka.
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SDFEI SPONSORING PARTNERS
October 2010
Please include SDFEI’s Sponsoring Partners in
your business relationships to help assure them
that their participation in your professional society
is a worthwhile business experience.
Lenora Preciado, Bank of America Merrill Lynch
619.515.7485 leni.preciado@baml.com
Trindl Reeves, Barney & Barney LLC
858.457.3414 treeves@barneyandbarney.com
Mike Metz, Bowne & Co.
858.623.9936 mike.metz@bowne.com
Anthony Vicari, Capital Advisors Group
858.812.2962 tvicari@capitaladvisors.com
David Crabb, CB Richard Ellis
858.546.2652 david.crabb@cbre.com
Theresa Drew, Deloitte
619.232.6500 tdrew@deloitte.com
John Clift, Ernst & Young LLP
858.535.7200 john.clift@ey.com
Michael McCloskey, Foley & Lardner LLP
619.234.6655 mmccloskey@foley.com
Karen Miles, Houlihan Lokey
310.788.5243 KMiles@HL.com
David Fredrickson, KPMG LLP
858.750.7100 defredrickson@kpmg.com
Steven Berk, Marsh-Mercer
858.552.4234 Steven.R.Berk@marsh.com
Richard Kalenka, PricewaterhouseCoopers LLP
619.744.8000 Richard.F.Kalenka@us.pwc.com
Paige Simon Boyd, Resources Global Professionals
619.230.7640 Paige.SimonBoyd@resources-us.com
Susan Pace, Robert Half Management Resources
858.452.2626 Susan.Pace@rhi.com
Judy Thompson, Thompson Search
858.452.1200 judy@thompsonsearch.com