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McKinsey on Finance

McKinsey on Finance

The enduring value of fundamentals

10-year anniversary issue

Special 10-year anniversary issue 2001–2011 Number 40, Summer 2011

Summer 2011

McKinsey on Finance is a quarterly publication written by experts and practitioners in McKinsey & Company’s corporate finance practice. This publication offers readers insights into value-creating strategies and the translation of those strategies into company performance. This and archived issues of McKinsey on Finance are available online at corporatefinance.mckinsey.com, where selected articles are also available in audio format. A series of McKinsey on Finance podcasts is also available on iTunes.

Editorial Board: David Cogman, Ryan Davies, Marc Goedhart, Bill Huyett, Bill Javetski, Tim Koller, Werner Rehm, Dennis Swinford Editor: Dennis Swinford Art Direction: Veronica Belsuzarri Design and layout: Veronica Belsuzarri, Cary Shoda Managing Editor: Drew Holzfeind Information Design Editor: Mary Reddy Editorial Production: Kelsey Bjelland, Roger Draper Circulation: Diane Black Illustrations by Brian Stauffer

This publication is not intended to be used as the basis for trading in the shares of any company or for undertaking any other complex or significant financial transaction without consulting appropriate professional advisers. No part of this publication may be copied or redistributed in any form without the prior written consent of McKinsey & Company.

Editorial Contact: McKinsey_on_ Finance@McKinsey.com To request permission to republish an article, send an e-mail to Quarterly_Reprints@McKinsey.com. The editors would also like to thank past members of the McKinsey on Finance editorial board who have contributed to many of the articles included in this anniversary edition. They include James Ahn, Richard Dobbs, Massimo Giordano, Keiko Honda, Rob McNish, Jean-Hugues Monier, Herbert Pohl, and Michelle Soudier. Copyright © 2011 McKinsey & Company. All rights...