NEW YORK--(BUSINESS WIRE)--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.”
| 1. | 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? | |||||
| 2. | 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? | |||||
| 3. | 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? | |||||
| 4. | How many secret bonus shares have been granted under Article 13 of the 2014 Equity Compensation Plan without regard to meeting performance hurdles? | |||||
| 5. | 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? | |||||
| 6. | 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. | |||||
| 7. | 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? | |||||
| 8. | 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? | |||||
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.
