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In 2001, accounting regulators, especially those in the U.S., began to reconsider the rules of consolidation with a move toward a requirement based on "control," with much less consideration of the size of the equity stake. The fundamental accounting and reporting issue for the Coca-Cola Company was whether the investment in, and operation of, anchor bottlers such as Coca-Cola Enterprises should be reported as a consolidated subsidiary or as an investment and, if the latter, whether that investment should be accounted for using the equity method of accounting, at fair value, or at cost. Includes a detailed history of the Coca-Cola Company.

In July 2002, a legal watchdog group, Judicial Watch, announced that it was suing Halliburton Company for overstating revenues during the period 1998 to 2001. The group's contention was that Halliburton used fraudulent accounting practices to boost revenues and hide a deteriorating financial position from investors. Specifically, the lawsuit centered around the way the company recognized claims recoveries on long-term construction projects. Prior to 1998, the company's policy was to book cost overrun expenses as soon as they occurred, but not to book claims recoveries as revenue until the repayment amount was agreed to with the client. In 1998, the company changed policies to begin estimating future recoveries and recognizing them in the same period that overrun expenses were realized. The company, which had been suffering from a recent slowdown in business and large litigation losses from asbestos lawsuits, claimed that its accounting practices were permitted under generally accepted accounting principals (GAAP). Judicial Watch, however, claimed the accounting policy inflated revenues over the four-year period by as much as $534 million. This case focuses on the accounting issues and disclosure policy of the company during the 1998 to 2001 period. Readers of the case are asked to assess whether the company's policies and decisions were appropriate in the relevant areas of accounting and disclosure.

Evaluates the role that the quarterly conference calls play in a company's overall communications strategy with investors. In particular, students are asked to assess what additional information they can learn from the conference call that they would not otherwise learn in reading quarterly earnings results and financial statements.

AMB Property Corporation set out to be a leader in corporate governance and financial reporting. The company, a publicly traded real estate investment trust (REIT) that acquires, develops, and owns industrial properties, believed that its governance and reporting practices were among the best in the industry. The implementation of good disclosure practices in the REIT industry was not a simple undertaking. Historically, the real estate industry was dominated by private partnerships and institutional investors who used tax and partnership accounting rather than generally accepted accounting principles (GAAP). As a result, there was a need for new financial terms that were meant to bridge the differences between GAAP and private partnership accounting, notably funds from operations. However, because such industry-specific metrics were not consistently calculated, it was difficult for users of REIT financial statements to compare operating results across companies. Public REITs that used non-GAAP metrics were required to reconcile these metrics to GAAP standards, a process which added significantly to the length of REIT financial reports. In addition, companies were required to apply GAAP accounting standards that were mostly designed for industries other than real estate and had the unintended consequence of making it difficult to evaluate the operating performance of REITs and compare those results across periods. Explores the issue of financial reporting in the REIT industry, including important FASB standards that potentially distort REIT financial results, the use of Funds From Operations as a metric of financial performance, and different approaches for valuing REITs.

In 2005, Relational Investors, a registered investment advisor, launched a proxy contest to gain two seats on the board of directors of Sovereign Bancorp. Relational accused Sovereign of operational mismanagement and poor corporate governance, representing a breach in fiduciary responsibility by the company's board of directors. Relational claimed that a board reconstitution was in the best interest of investors. Subsequently, Sovereign entered into a controversial three-way deal with Banco Santander Central Hispano of Spain, which thwarted Relational's efforts by diluting its ownership position and by giving Santander board seats and veto power over the removal of Sovereign's CEO. Discusses the tactics used by Relational Investors to attempt to derail the Santander deal and the tactics used by Sovereign Bancorp to defend it.

Describes the economic and cultural models that have led to the success of Keller Williams Realty. By 2006, Keller Williams was one of the most profitable real estate companies in the United States (if not the most profitable); in addition, it was on its way to becoming one of the largest in terms of number of agents (over 70,000). Describes the factors that led to this company's success--including its operational model, compensation model, profit sharing model, and culture. Readers are asked to evaluate how these factors contribute to the company's success and whether they will continue to enhance the company's growth going forward. In addition, explores the critical role that culture and organizational practices can have on a company's operating performance.

Describes the initial considerations of Gilead Sciences as it designed a strategy for delivering its AIDS drug Viread to developing nations in Africa. In October 2001, Gilead Sciences received approval from the U.S. Food and Drug Administration for the commercial sale of Viread, a significant new drug for the treatment of HIV/AIDS. Viread proved to be an immediate success, increasing rapidly in sales and market share in the United States within its first year on the market. As Gilead made plans to take the drug global in early 2003, a high priority was to make the drug readily available to millions of people in the least developed nations, where the HIV virus was having its most devastating effects. Pricing and distribution were key considerations. Gilead did not have a distribution system in place in any of these countries, and the price charged in the United States would be prohibitive in the developing world.

Eugene Isenberg, CEO of Nabors Industries, was listed in a 2006 Wall Street Journal article as one of the highest paid executives in the U.S. over the previous 14 years. He received this compensation as a result of a unique bonus arrangement and large stock option grants with several favorable features. At the same time, the strategy that he implemented for Nabors led to a remarkable financial turnaround as the company emerged from bankruptcy and expanded to become a global leader in the oilfield services industry. Readers are asked to evaluate the structure of Isenberg's compensation agreement in light of the company's industry, strategy, and financial position. Particular consideration is paid to the total compensation, mix of compensation, performance measures, and other compensation terms.

An investor is called on to make a forecast and valuation for Costco. Provides information about the history of Costco as an investment, industry growth drivers, and forecasting models.

A financial statement, ratio analysis involving a high-growth retail company. An individual shareholder in the Costco Wholesale Corp. is trying to evaluate the operational performance of the business she has invested in over the last five years. She seeks to answer two questions: Has Costco become more or less efficient over this time period? And how has it financed its growth? She organizes her analysis into three parts: common-size financial statements, sustainable growth modeling, and benchmarking ratios particular to retail companies. Provides information on developments in mass merchandising in the United States, with an emphasis on discounter retailing over the last 40 years. Costco's performance set in historical context provides the relative background information necessary to make a comparative evaluation between Costco and other industry participants.