Wintergreen Advisers today released a list of questions for The
Coca-Cola Company (NYSE:KO) to address during its conference call with
investors tomorrow following the release of the company’s fourth quarter
and full-year 2014 financial results.
Wintergreen urged Coca‐Cola to address investor concerns regarding the
company’s dividend and credit rating, the number of secret bonus shares
awarded to top management, and whether Coca-Cola has been approached by
third parties to explore a buyout or breakup of the company.
Wintergreen Advisers said: “It's important that shareholders continue to
keep the pressure on Coca-Cola to fix its problems and realize the huge
value in this great brand. We think the pace of restructuring is still
far too slow, management is not being held accountable and the Board of
Directors appears content to sail along as if nothing is amiss. But
change is coming to Coca-Cola, one way or another.”
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1.
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On the December 15, 2014 modeling call with analysts, Coca-Cola CFO
Kathy Waller acknowledged that Coca-Cola’s 2010 $13 billion
acquisition of the North American bottling assets of Coca-Cola
Enterprises will apparently result in a zero percent return, at
best, over nearly a decade. We think this is a shockingly bad
investment. Who is being held accountable?
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2.
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During the fourth quarter of 2014, there were reports in the media
that a large buyout firm, 3G Capital, potentially had its sights on
Coca-Cola. Coke shares traded sharply higher following the report.
Has Coca-Cola been approached by 3G or any other parties regarding a
strategic transaction?
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3.
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In early January 2015, Coca-Cola announced the company would lay off
1,800 employees. How many senior management positions are being
eliminated as part of these firings? What is the company’s projected
cash and pension expense for severance and other restructuring costs
this year?
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4.
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How many secret bonus shares have been granted under Article 13 of
the 2014 Equity Compensation Plan without regard to meeting
performance hurdles?
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5.
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In recent years, Coca-Cola’s spending on share repurchases, capital
expenditures, and dividends have outpaced its cash flow, and
Coca-Cola has borrowed to bridge the gap. How much longer can
Coca-Cola continue to spin the financial plates like this? What is
the risk of a downgraded credit rating?
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6.
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Has Coca-Cola examined its real estate portfolio to see what assets
are excess and should be sold? For example, the seemingly incredibly
valuable 711 5th Ave in New York City seems to be an unproductive
use of assets and long overdue for rationalization.
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7.
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With the upcoming nationwide introduction of Fairlife milk product,
what gives Coca-Cola confidence that moving into a new market and
spending significant amounts of money on branding is a productive
use of company cash?
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8.
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What is the company’s plan for succession following the exit of
Muhtar Kent, who we believe has made material misstatements to
shareholders and overseen an extended period of poor corporate
performance? Will Coca-Cola look outside of its broken system for
best-in-class succession candidates?
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About Wintergreen Advisers
Established in 2005, Wintergreen is an independent global money manager
that employs a research-driven value style in managing global
securities. As of December 31, 2014, the firm has approximately $1.8
billion under management on behalf of individuals and institutions, and
is based in Mountain Lakes, New Jersey. Wintergreen, on behalf of its
clients, beneficially owns over 2.5 million shares of The Coca-Cola
Company.
For further information on Wintergreen Advisers, please call
973-263-4500 or visit www.wintergreenadvisers.com.
Additional information on the issues at The Coca-Cola Company can be
found at www.FixBigSoda.com.
For information, forms and documents regarding our U.S. mutual fund,
please visit www.wintergreenfund.com.
Copyright Business Wire 2015