Sinking Euro can't be helping CCE. Maybe the EU Central Bank will raise rates, helping the Euro vis a vis the USD, thereby helping CCE? Every source of pennies is needed. Fuel and interest rates still are at unhealthy levels. And how much can a company lower taxes? These 3 sources of relief were a major part of CCE's earnings 'growth' of the past few years. Pendulum has swung... Note... none of them are truly operational sources...
continued from prior post... here's the punch line!!!!!!!!!!
But it looks to me like the cash -- the cash was one time, but your use of it to show as income to shareholders is two times.
MR. LOWRY KLINE:
Well, the cumulative change on a cumulative basis takes care of that, but I mean to see your point.
No, I guess my point would be that what you ought to be doing is forget
about the past and go forward, but I guess the problem there is you're not getting much more cash. Is that the idea? What is the cash that you expect to receive from Coke in '02 and '03 under this program?
MR. PATRICK MANNELLY:
This cumulative change has no effect on cash received from Coke.
So what do you expect to receive in cash from Coca-Cola in '02 and '03 from this program?
Going forward in this program, nothing. Last cash payment was received in 2001
So there was no cash to be received in '02, but you were still going to
show, under the old accounting treatment, you were still going to show 80 to 100 million dollars?
Under the old accounting treatment, what we had talked about and what we had planned on originally was we had -- we (indiscernible) cash payment to be received under the old program. Once it became clear that we had to change our accounting, we used the opportunity to sit down with Coke and redo the agreements and we are foregoing $100 million cash payment in 2002.
Okay, but back in December -- not to belabor this but on December 4th when you said you were going to earn 80 to 85 cents, at that time Wall Street knew you weren't going to be getting any cash in '02 under this program.
MR. PATRICK MANNELLY:
No, at that point in the program -- was saying that we were expecting $100 million at that point. (indiscernible) booked that into income. After it became clear that we needed to change the accounting with the SEC we also sat down with Coke and looked at the program and we decided to make a change in the program.
Okay, so there's no cash coming in from here on?
That's correct. Under this program, there's none.
Under this program?
MR. PATRICK MANNELLY:
Art, I think it is important to clarify though that the new agreement we
spoke about in December that does have cash flow coming forward in the
future 2002 through 2008, is not impacted by this at all.
That was often the case when I was there. Too much equipment not making any money in the warehouse, create incentives to get people to place equipment, Offer large commission on low vend rates, Drivers and service techs having to service equipment with low volume, someone finally realizes it costs more to have poor placements than no placements, cooler guys go back and pick up the equipment, put it back in warehouse, get beaten up at qtr end because KBI's indicate not enough net placements.
What is the possibility the pile is over half a billion dollars of non performing assets ?
What about a quarter of a billion dollars ?
Anyone want to guess corporate wide how many pieces of Cold Drink equipment and what their tax book value is ?
For canu... since you seem to carry the torch on credibility of figures. How large of an asset base would need to be nonperforming before a credible auditor requires you to take them off the books ?
How can a company carry hundreds of millions of dollars of non performing assets on its books ? They are non performing and they have little to no marketable salvage value.
Yes indeed...thank you cceforlife. Where are all the pile workers?
Canoe, you can speak to the accounting practices. Consider this long fairy tale:
What if a contributing factor to the pile is speculated to be a package transition?
Specifically the 20 oz PET bottle replacing the 16oz plastishield.
The success of 20 oz PET dictated change in that this new product needed to be inserted into the cold drink market ASAP. There was not enough equipment in front of the consumer (particularly schools)to vend this extremely profitable package.
That was a key contributer to the pile. 12oz sales were positively canniblized by 20 oz PET
That is were some money was well spent. Someone else can comment on the wasted money in terms of unwise placement of equipment. I prefer to dwell on...why.
Canoe perhaps the difference in bottler payments you posted the diagram to is related to the cost of a transition as outlined above.
It probaly cost more for CCE to convert than COKE.
Why, why, why did it take so long for the Coke system as a whole to transition from glass to plastic?
Arrogance, plain and simple. For years consumers that preferred Coke were drinking Pepsi in plastic bottles because they wanted plastic bottles. It started with the 2L then 16oz then 1L then 20oz.
One would ask how in the world could the giant that Coke is allow this to happen? Arrrogance and piss poor management at the top.
That is why I stated earlier that KO and CCE are stricken with a product that provides a level of financial success regardless of how the companies are managed.
The Coke system does not know what it is like to be hungry such as the Pepsi system WAS decades ago.
Robert Woodruff never would have let that happen.
Maybe too much attention to lining their own pockets or worse yet making deposits into their sperm banks was too much of a distraction.