SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 15, 2001
COCA-COLA ENTERPRISES INC.
(Exact name of registrant as specified in its charter)
DELAWARE 01-09300 58-0503352
(State of Incorporation) (Commission File No.) (IRS Employer Identification No.)
2500 WINDY RIDGE PARKWAY, ATLANTA, GEORGIA 30339
(Address of principal executive offices, including zip code)
(770) 989-3000
(Registrant's telephone number, including area code)
Page 1
Exhibit Index Page 4
Item 9. Regulation FD Disclosure
On October 15, 2001, the Company released pro forma financial
information for purposes of additional analysis of the acquisition of
Herb Coca-Cola.
Page 2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
COCA-COLA ENTERPRISES INC.
(Registrant)
Date: October 15, 2001 By:/s/ E. Liston Bishop III
----------------------------
E. Liston Bishop III
Vice President and
Deputy General Counsel
Page 3
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO.
99 Coca-Cola Enterprises Inc. Pro Forma Combined Condensed 5
Financial Information (Unaudited)
99.1 Coca-Cola Enterprises Inc. Pro Forma Combined Condensed 16
Financial Information Excluding Nonrecurring Items
(Unaudited)
Page 4
EXHIBIT 99
INDEX TO COCA-COLA ENTERPRISES INC. PROFORMA
COMBINED CONDENSED FINANCIAL INFORMATION (UNAUDITED)
PAGE
NUMBERS
-------
Coca-Cola Enterprises Inc. Pro Forma Combined Condensed
Financial Information (Unaudited):
Introductory Information........................................... 6
Pro Forma Combined Condensed Statement of Income for
the Six Months Ended June 29, 2001............................... 7
Pro Forma Combined Condensed Statement of Income for
the Quarter Ended June 29, 2001.................................. 8
Pro Forma Combined Condensed Statement of Income for
the Quarter Ended March 30, 2001................................. 9
Pro Forma Combined Condensed Statement of Income for
the Year Ended December 31, 2000................................. 10
Pro Forma Combined Condensed Statement of Income for
the Quarter Ended December 31, 2000.............................. 11
Pro Forma Combined Condensed Statement of Income for
the Quarter Ended September 29, 2000............................. 12
Pro Forma Combined Condensed Statement of Income for
the Quarter Ended June 30, 2000.................................. 13
Pro Forma Combined Condensed Statement of Income for
the Quarter Ended March 31, 2000................................. 14
Notes to Pro Forma Combined Condensed Financial
Information (Unaudited).......................................... 15
Page 5
COCA-COLA ENTERPRISES INC.
NOTES TO PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION (UNAUDITED)
INTRODUCTORY INFORMATION
The following unaudited pro forma combined condensed financial information sets
forth the combined results of operations of Coca-Cola Enterprises Inc. (the
"Company") and Hondo Incorporated and Herbco Enterprises, Inc. (collectively,
"Herb Coca-Cola") assuming the Company purchased Herb Coca-Cola as of January 1,
2000. Although not required to be filed under the rules applicable to
significant acquisitions, this pro forma financial information is provided for
purposes of additional analysis of the effects of the acquisition of Herb
Coca-Cola on the Company pursuant to Regulation FD.
On July 10, 2001 the Company completed the acquisition of 100 percent of the
outstanding common and preferred shares of Herb Coca-Cola. The results of Herb's
operations have been included in the Company's consolidated statements since
July 1, 2001. Herb Coca-Cola was previously the third largest bottler of
products of The Coca-Cola Company in the United States. As a result of the
acquisition, the Company will sell approximately 80% of The Coca-Cola Company's
bottle and can volume in the United States. The Company also expects cost
savings and system rationalization as a result of the proximity of Herb
Coca-Cola's operations to its existing territories.
The total transaction value was approximately $1.4 billion, including cash of
approximately $1 billion and common stock of $400 million. The value of the 25
million shares issued was determined based on the average closing price of the
Company's common shares over the two day period before and after the terms of
the acquisition were finalized and agreed to. The total transaction value is
comprised of approximately $1.3 billion for the bottling operations and $100
million for the value of incremental tax benefits associated with the structure
of the transaction.
The following unaudited pro forma financial information should be read in
conjunction with the Company's audited and unaudited financial statements,
including the notes thereto, contained in: (i) the Coca-Cola Enterprises' Annual
Report on Form 10-K for the year ended December 31, 2000 and (ii) Coca-Cola
Enterprises' Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 2000, June 30, 2000, September 29, 2000, March 30, 2001, and June 29,
2001.
The unaudited pro forma combined condensed statements of income for the six
months ended June 29, 2001 and for the year ended December 31, 2000 and the
unaudited pro forma combined condensed statements of income for each of the
quarterly periods ended March 31, 2000, June 30, 2000, September 29, 2000,
December 31, 2000, March 30, 2001, and June 29, 2001 present the combined
operating results of the Company and Herb Coca-Cola as if the acquisition
described above had occurred at the beginning of 2000. Certain reclassifications
and adjustments have been made to the historical financial statements of Herb
Coca-Cola to conform to the Company's financial presentation.
Page 6
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 29, 2001
(UNAUDITED; IN MILLIONS, EXCEPT PER SHARE DATA)
Coca-Cola Herb
Enterprises Coca-Cola
Six Months Six Months
Ended Ended
June 29, June 29, Pro Forma Pro Forma
2001 2001 Adjustments Combined
----------- -------- ----------- --------
Net Operating Revenues $ 7,457 $457 $ -- $ 7,914
Cost of Sales 4,613 284 -- 4,897
------- ---- ---- -------
Gross Profit 2,844 173 -- 3,017
Selling, Delivery, and
Administrative Expenses 2,507 167 (3) 2,671
------- ---- ---- -------
Operating Income 337 6 3 346
Interest Expense, Net 380 6 24 410
Other Nonoperating Expense, Net -- -- -- --
------- ---- ---- -------
Loss Before Income Taxes (43) -- (21) (64)
Income Tax Expense (Benefit) (28) -- (8) (36)
Nonrecurring Income Tax (Benefit) (46) -- -- (46)
------- ---- ---- -------
Net Income (Loss) 31 -- (13) 18
Preferred Stock Dividends 2 -- -- 2
------- ---- ---- -------
Net Income (Loss) Applicable
to Common Shareowners $ 29 $ -- $(13) $ 16
======= ==== ==== =======
Basic Average Common Shares
Outstanding 419 -- 25 444
======= ==== ==== =======
Basic Net Income Per Share
Applicable to Common
Shareowners $ 0.07 -- -- $ 0.04
======= ==== ==== =======
Diluted Average Common Shares
Outstanding 428 -- 25 453
======= ==== ==== =======
Diluted Net Income Per Share
Applicable to Common
Shareowners $ 0.07 -- -- $ 0.04
======= ==== ==== =======
Cash Operating Profit Data:
Operating Income $ 337 $ 6 $ 3 $ 346
Depreciation 437 23 -- 460
Amortization 225 4 (3) 226
------- ---- ---- -------
Cash Operating Profit $ 999 $ 33 $ -- $ 1,032
======= ==== ==== =======
The introductory information on Page 6 and the accompanying Notes to Unaudited
Pro Forma Combined Condensed Financial Information on Page 15 are an integral
part of these statements. Pro forma combined information should not be construed
to be forecasts of future operating results.
Page 7
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE QUARTER ENDED JUNE 29, 2001
(UNAUDITED; IN MILLIONS, EXCEPT PER SHARE DATA)
Coca-Cola Herb
Enterprises Coca-Cola
Quarter Ended Quarter Ended
June 29, June 29, Pro Forma Pro Forma
2001 2001 Adjustments Combined
-------------- ------------- ----------- ---------
Net Operating Revenues $ 4,105 $ 252 $ -- $ 4,357
Cost of Sales 2,545 156 -- 2,701
------- ------- ------- -------
Gross Profit 1,560 96 -- 1,656
Selling, Delivery, and
Administrative Expenses 1,289 95 (2) 1,382
------- ------- ------- -------
Operating Income 271 1 2 274
Interest Expense, Net 188 2 13 203
Other Nonoperating Expense, Net -- -- -- --
------- ------- ------- -------
Income (Loss) Before Income Taxes 83 (1) (11) 71
Income Tax Expense (Benefit) 14 -- (4) 10
Nonrecurring Income Tax (Benefit) (46) -- -- (46)
------- ------- ------- -------
Net Income (Loss) 115 (1) (7) 107
Preferred Stock Dividends 1 -- -- 1
------- ------- ------- -------
Net Income (Loss) Applicable to
Common Shareowners $ 114 $ (1) $ (7) $ 106
======= ======= ======= =======
Basic Average Common Shares
Outstanding 419 -- 25 444
======= ======= ======= =======
Basic Net Income Per Share
Applicable to Common
Shareowners $ 0.27 -- -- $ 0.24
======= ======= ======= =======
Diluted Average Common Shares
Outstanding 427 -- 25 452
======= ======= ======= =======
Diluted Net Income Per Share
Applicable to Common
Shareowners $ 0.27 -- -- $ 0.24
======= ======= ======= =======
Cash Operating Profit Data:
Operating Income $ 271 $ 1 $ 2 $ 274
Depreciation 224 12 -- 236
Amortization 113 2 (2) 113
------- ------- ------- -------
Cash Operating Profit $ 608 $ 15 $ -- $ 623
======= ======= ======= =======
The introductory information on Page 6 and the accompanying Notes to Unaudited
Pro Forma Combined Condensed Financial Information on Page 15 are an integral
part of these statements. Pro forma combined information should not be construed
to be forecasts of future operating results.
Page 8
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE QUARTER ENDED MARCH 30, 2001
(UNAUDITED; IN MILLIONS, EXCEPT PER SHARE DATA)
Coca-Cola Herb
Enterprises Coca-Cola
Quarter Ended Quarter Ended
March 30, March 30, Pro Forma Pro Forma
2001 2001 Adjustments Combined
------------- -------------- ------------ ----------
Net Operating Revenues $ 3,352 $ 205 $ -- $ 3,557
Cost of Sales 2,068 128 -- 2,196
------- ------- ------- -------
Gross Profit 1,284 77 -- 1,361
Selling, Delivery, and
Administrative Expenses 1,219 72 (1) 1,290
------- ------- ------- -------
Operating Income 65 5 1 71
Interest Expense, Net 191 4 11 206
Other Nonoperating Expense, Net -- -- -- --
------- ------- ------- -------
Income (Loss) Before Income Taxes (126) 1 (10) (135)
Income Tax Expense (Benefit) (42) -- (4) (46)
Nonrecurring Income Tax (Benefit) -- -- -- --
------- ------- ------- -------
Net Income (Loss) (84) 1 (6) (89)
Preferred Stock Dividends 1 -- -- 1
------- ------- ------- -------
Net Income (Loss) Applicable to
Common Shareowners $ (85) $ 1 $ (6) $ (90)
======= ======= ======= =======
Basic Average Common Shares
Outstanding 418 -- 25 443
======= ======= ======= =======
Basic Net Income (Loss) Per Share
Applicable to Common
Shareowners $ (0.20) -- -- $ (0.20)
======= ======= ======= =======
Diluted Average Common Shares
Outstanding 418 -- 25 443
======= ======= ======= =======
Diluted Net Income (Loss) Per Share
Applicable to Common
Shareowners $ (0.20) -- -- $ (0.20)
======= ======= ======= =======
Cash Operating Profit Data:
Operating Income $ 65 $ 5 $ 1 $ 71
Depreciation 213 11 -- 224
Amortization 113 2 (1) 114
------- ------- ------- -------
Cash Operating Profit $ 391 $ 18 $ -- $ 409
======= ======= ======= =======
The introductory information on Page 6 and the accompanying Notes to Unaudited
Pro Forma Combined Condensed Financial Information on Page 15 are an integral
part of these statements. Pro forma combined information should not be construed
to be forecasts of future operating results.
Page 9
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2000
(UNAUDITED; IN MILLIONS, EXCEPT PER SHARE DATA)
Coca-Cola Herb
Enterprises Coca-Cola
Year Ended Year Ended
December 31, December 31, Pro Forma Pro Forma
2000 2000 Adjustments Combined
------------ ------------ ----------- ---------
Net Operating Revenues $ 14,750 $917 $ -- $ 15,667
Cost of Sales 9,083 555 -- 9,638
-------- ---- ----- --------
Gross Profit 5,667 362 -- 6,029
Selling, Delivery, and
Administrative Expenses 4,541 280 (6) 4,815
-------- ---- ----- --------
Operating Income 1,126 82 6 1,214
Interest Expense, Net 791 15 43 849
Other Nonoperating Expense, Net 2 4 -- 6
-------- ---- ----- --------
Income (Loss) Before Income Taxes 333 63 (37) 359
Income Tax Expense (Benefit) 111 -- 10 121
Nonrecurring Income Tax (Benefit) (14) -- -- (14)
-------- ---- ----- --------
Net Income (Loss) 236 63 (47) 252
Preferred Stock Dividends 3 -- -- 3
-------- ---- ----- --------
Net Income (Loss) Applicable to
Common Shareowners $ 233 $ 63 $ (47) $ 249
======== ==== ===== ========
Basic Average Common Shares
Outstanding 419 -- 25 444
======== ==== ===== ========
Basic Net Income Per Share
Applicable to Common
Shareowners $ 0.56 -- -- $ 0.56
======== ==== ===== ========
Diluted Average Common Shares
Outstanding 429 -- 25 454
======== ==== ===== ========
Diluted Net Income Per Share
Applicable to Common
Shareowners $ 0.54 -- -- $ 0.55
======== ==== ===== ========
Cash Operating Profit Data:
Operating Income $ 1,126 $ 82 $ 6 $ 1,214
Depreciation 810 42 -- 852
Amortization 451 9 (6) 454
-------- ---- ----- --------
Cash Operating Profit $ 2,387 $133 $ -- $ 2,520
======== ==== ===== ========
The introductory information on Page 6 and the accompanying Notes to Unaudited
Pro Forma Combined Condensed Financial Information on Page 15 are an integral
part of these statements. Pro forma combined information should not be construed
to be forecasts of future operating results.
Page 10
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE QUARTER ENDED DECEMBER 31, 2000
(UNAUDITED; IN MILLIONS, EXCEPT PER SHARE DATA)
Coca-Cola Herb
Enterprises Coca-Cola
Quarter Ended Quarter Ended
December 31, December 31, Pro Forma Pro Forma
2000 2000 Adjustments Combined
-------------- -------------- ----------- ---------
Net Operating Revenues $ 3,561 $228 $ -- $ 3,789
Cost of Sales 2,219 133 -- 2,352
------- ---- ----- -------
Gross Profit 1,342 95 -- 1,437
Selling, Delivery, and
Administrative Expenses 1,142 68 (2) 1,208
------- ---- ----- -------
Operating Income 200 27 2 229
Interest Expense, Net 197 5 10 212
Other Nonoperating Expense, Net 3 1 -- 4
------- ---- ----- -------
Income (Loss) Before Income Taxes -- 21 (8) 13
Income Tax Expense (Benefit) (2) -- 5 3
Nonrecurring Income Tax (Benefit) (14) -- -- (14)
------- ---- ----- -------
Net Income (Loss) 16 21 (13) 24
Preferred Stock Dividends 1 -- -- 1
------- ---- ----- -------
Net Income (Loss) Applicable to
Common Shareowners $ 15 $ 21 $ (13) $ 23
======= ==== ===== =======
Basic Average Common Shares
Outstanding 417 -- 25 442
======= ==== ===== =======
Basic Net Income Per Share
Applicable to Common
Shareowners $ 0.04 -- -- $ 0.05
======= ==== ===== =======
Diluted Average Common Shares
Outstanding 427 -- 25 452
======= ==== ===== =======
Diluted Net Income Per Share
Applicable to Common
Shareowners $ 0.04 -- -- $ 0.05
======= ==== ===== =======
Cash Operating Profit Data:
Operating Income $ 200 $ 27 $ 2 $ 229
Depreciation 206 9 -- 215
Amortization 111 3 (2) 112
------- ---- ----- -------
Cash Operating Profit $ 517 $ 39 $ -- $ 556
======= ==== ===== =======
The introductory information on Page 6 and the accompanying Notes to Unaudited
Pro Forma Combined Condensed Financial Information on Page 15 are an integral
part of these statements. Pro forma combined information should not be construed
to be forecasts of future operating results.
Page 11
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE QUARTER ENDED SEPTEMBER 29, 2000
(UNAUDITED; IN MILLIONS, EXCEPT PER SHARE DATA)
Coca-Cola Herb
Enterprises Coca-Cola
Quarter Ended Quarter Ended
September 29, September 29, Pro Forma Pro Forma
2000 2000 Adjustments Combined
------------- --------------- ------------ ------------
Net Operating Revenues $3,868 $228 $ -- $4,096
Cost of Sales 2,368 141 -- 2,509
------ ---- ----- ------
Gross Profit 1,500 87 -- 1,587
Selling, Delivery, and
Administrative Expenses 1,105 70 (1) 1,174
------ ---- ----- ------
Operating Income 395 17 1 413
Interest Expense, Net 197 3 11 211
Other Nonoperating Expense, Net -- 1 -- 1
------ ---- ----- ------
Income (Loss) Before Income Taxes 198 13 (10) 201
Income Tax Expense (Benefit) 67 -- 1 68
Nonrecurring Income Tax (Benefit) -- -- -- --
------ ---- ----- ------
Net Income (Loss) 131 13 (11) 133
Preferred Stock Dividends 1 -- -- 1
------ ---- ----- ------
Net Income (Loss) Applicable to
Common Shareowners $ 130 $ 13 $ (11) $ 132
====== ==== ===== ======
Basic Average Common Shares
Outstanding 418 -- 25 443
====== ==== ===== ======
Basic Net Income Per Share
Applicable to Common
Shareowners $ 0.31 -- -- $ 0.30
====== ==== ===== ======
Diluted Average Common Shares
Outstanding 427 -- 25 452
====== ==== ===== ======
Diluted Net Income Per Share
Applicable to Common
Shareowners $ 0.30 -- -- $ 0.29
====== ==== ===== ======
Cash Operating Profit Data:
Operating Income $ 395 $ 17 $ 1 $ 413
Depreciation 203 11 -- 214
Amortization 113 2 (1) 114
------ ---- ----- ------
Cash Operating Profit $ 711 $ 30 $ -- $ 741
====== ==== ===== ======
The introductory information on Page 6 and the accompanying Notes to Unaudited
Pro Forma Combined Condensed Financial Information on Page 15 are an integral
part of these statements. Pro forma combined information should not be construed
to be forecasts of future operating results.
Page 12
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE QUARTER ENDED JUNE 30, 2000
(UNAUDITED; IN MILLIONS, EXCEPT PER SHARE DATA)
Coca-Cola Herb
Enterprises Coca-Cola
Quarter Ended Quarter Ended
June 30, June 30, Pro Forma Pro Forma
2000 2000 Adjustments Combined
-------------- --------------- ----------- ---------
Net Operating Revenues $ 4,027 $ 251 $ -- $ 4,278
Cost of Sales 2,483 155 -- 2,638
------- ------- ------- -------
Gross Profit 1,544 96 -- 1,640
Selling, Delivery, and
Administrative Expenses 1,156 73 (1) 1,228
------- ------- ------- -------
Operating Income 388 23 1 412
Interest Expense, Net 200 3 11 214
Other Nonoperating Expense, Net 1 1 -- 2
------- ------- ------- -------
Income (Loss) Before Income Taxes 187 19 (10) 196
Income Tax Expense (Benefit) 64 -- 4 68
Nonrecurring Income Tax (Benefit) -- -- -- --
------- ------- ------- -------
Net Income (Loss) 123 19 (14) 128
Preferred Stock Dividends 1 -- -- 1
------- ------- ------- -------
Net Income (Loss) Applicable to
Common Shareowners $ 122 $ 19 $ (14) $ 127
======= ======= ======= =======
Basic Average Common Shares
Outstanding 420 -- 25 445
======= ======= ======= =======
Basic Net Income Per Share
Applicable to Common
Shareowners $ 0.29 -- -- $ 0.29
======= ======= ======= =======
Diluted Average Common Shares
Outstanding 429 -- 25 454
======= ======= ======= =======
Diluted Net Income Per Share
Applicable to Common
Shareowners $ 0.29 -- -- $ 0.28
======= ======= ======= =======
Cash Operating Profit Data:
Operating Income $ 388 $ 23 $ 1 $ 412
Depreciation 196 11 -- 207
Amortization 112 2 (1) 113
------- ------- ------- -------
Cash Operating Profit $ 696 $ 36 $ -- $ 732
======= ======= ======= =======
The introductory information on Page 6 and the accompanying Notes to Unaudited
Pro Forma Combined Condensed Financial Information on Page 15 are an integral
part of these statements. Pro forma combined information should not be construed
to be forecasts of future operating results.
Page 13
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE QUARTER ENDED MARCH 31, 2000
(UNAUDITED; IN MILLIONS, EXCEPT PER SHARE DATA)
Coca-Cola Herb
Enterprises Coca-Cola
Quarter Ended Quarter Ended
March 31, March 31, Pro Forma Pro Forma
2000 2000 Adjustments Combined
------------- --------------- ------------ --------
Net Operating Revenues $ 3,293 $210 $ -- $ 3,503
Cost of Sales 2,012 126 -- 2,138
------- ---- ---- -------
Gross Profit 1,281 84 -- 1,365
Selling, Delivery, and
Administrative Expenses 1,137 69 (2) 1,204
------- ---- ---- -------
Operating Income 144 15 2 161
Interest Expense, Net 196 4 11 211
Other Nonoperating Expense, Net (1) 1 -- --
------- ---- ---- -------
Income (Loss) Before Income Taxes (51) 10 (9) (50)
Income Tax Expense (Benefit) (17) -- -- (17)
Nonrecurring Income Tax (Benefit) -- -- -- --
------- ---- ---- -------
Net Income (Loss) (34) 10 (9) (33)
Preferred Stock Dividends 1 -- -- 1
------- ---- ---- -------
Net Income (Loss) Applicable to
Common Shareowners $ (35) $ 10 $ (9) $ (34)
======= ==== ==== =======
Basic Average Common Shares
Outstanding 421 -- 25 446
======= ==== ==== =======
Basic Net Income (Loss) Per Share
Applicable to Common
Shareowners $ (0.08) -- -- $ (0.08)
======= ==== ==== =======
Diluted Average Common Shares
Outstanding 421 -- 25 446
======= ==== ==== =======
Diluted Net Income (Loss) Per Share
Applicable to Common
Shareowners $ (0.08) -- -- $ (0.08)
======= ==== ==== =======
Cash Operating Profit Data:
Operating Income $ 144 $ 15 $ 2 $ 161
Depreciation 204 11 -- 215
Amortization 114 2 (2) 114
------- ---- ---- -------
Cash Operating Profit $ 462 $ 28 $ -- $ 490
======= ==== ==== =======
The introductory information on Page 6 and the accompanying Notes to Unaudited
Pro Forma Combined Condensed Financial Information on Page 15 are an integral
part of these statements. Pro forma combined information should not be construed
to be forecasts of future operating results.
Page 14
COCA-COLA ENTERPRISES INC.
NOTES TO PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION (UNAUDITED)
The following notes describe the pro forma adjustments necessary to reflect the
effects of the acquisition.
NOTE A - Pro forma adjustments to "Selling, Delivery & Administrative Expenses"
eliminate amortization of franchise and goodwill included in Herb Coca-Cola's
results of operations. Adjustments to eliminate goodwill and franchise
amortization have been made to present pro forma financial information as of
January 1, 2000 in accordance with FASB Statement No. 142, Goodwill and Other
Intangible Assets (FAS 142). Under the provisions of FAS 142, goodwill acquired
in a business combination after June 30, 2001 is not amortized. In addition, as
franchise is classified as an intangible asset with an indefinite useful life
according to FAS 142, any franchise acquired in a business combination after
June 30, 2001 is also not amortized.
NOTE B - The pro forma adjustments to "Interest Expense, Net" reflect the
additional interest costs on debt issued to fund the cash portion of the
purchase price as if the debt were outstanding on January 1, 2000 and the
reduction of interest expense as if the assumed debt was repaid on January 1,
2000. These adjustments are made assuming an effective annual interest rate of
5.79%.
NOTE C - The pro forma adjustments to "Income Tax Expense (Benefit)" reflect the
income tax attributes of the foregoing adjustments and the effect on the
consolidated tax provision after inclusion of Herb Coca-Cola. On a quarterly
basis, the pro forma adjustments reflect modifications to the Company's
estimated effective annual income tax rate for full-year 2000 and 2001 giving
effect to the results of operations of Herb Coca-Cola and the pro forma
adjustments.
NOTE D - Pro forma basic and diluted net income (loss) per common share data are
not presented for Herb Coca-Cola and pro forma adjustments because the results
are not meaningful. All per share data is calculated prior to rounding to
millions.
NOTE E - The Company's results include the following significant nonrecurring
items: (i) a restructuring charge of $12 million related to operations in Great
Britain, recognized in the second quarter of 2000, (ii) insurance proceeds of
$20 million related to the Company's 1999 Belgian product recall, recognized in
the third quarter of 2000, (iii) an income tax benefit of $14 million
principally due to a rate change in France and a revaluation of income tax
obligations, recognized in the fourth quarter of 2000, and (iv) an income tax
benefit of $46 million principally due to rate changes in Canada, recognized in
the second quarter of 2001.
Herb Coca-Cola's results include the following significant nonrecurring items:
(i) net occupancy expense eliminated with the acquisition of $2 million per
quarter from the first quarter of 2000 through the second quarter of 2001, (ii)
employee loyalty bonuses of $20 million recognized in the second quarter of
2001, and (iii) bad debt expense of $6 million recognized in the second quarter
of 2001.
Page 15
EXHIBIT 99.1
INDEX TO COCA-COLA ENTERPRISES INC. PROFORMA COMBINED CONDENSED
FINANCIAL INFORMATION EXCLUDING
NONRECURRING ITEMS (UNAUDITED)
PAGE
NUMBERS
-------
Coca-Cola Enterprises Inc. Pro Forma Combined Condensed Financial
Information Excluding Nonrecurring Items (Unaudited):
Introductory Information............................................... 17
Pro Forma Combined Condensed Statements of Income Excluding
Nonrecurring Items for the Quarters and the Six Months
Ended June 29, 2001................................................... 19
Pro Forma Combined Condensed Statements of Income Excluding
Nonrecurring Items for the Quarters and the Year Ended
December 31, 2000..................................................... 20
Notes to Pro Forma Combined Condensed Financial Information
Excluding Nonrecurring Items (Unaudited)............................... 21
Page 16
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION EXCLUDING
NONRECURRING ITEMS (UNAUDITED)
INTRODUCTORY INFORMATION
The following unaudited pro forma combined condensed financial information sets
forth the combined results of operations of Coca-Cola Enterprises Inc. (the
"Company") and Hondo Incorporated and Herbco Enterprises, Inc. (collectively,
"Herb Coca-Cola") assuming the Company purchased Herb Coca-Cola as of January 1,
2000 and after excluding certain nonrecurring items described in the notes on
page 21 from results of operations of the Company and Herb Coca-Cola. This pro
forma financial information is provided solely for the purposes of additional
analysis of the acquisition of Herb Coca-Cola and is not intended to be a
presentation in conformity with the rules governing the preparation of pro forma
financial information.
On July 10, 2001 the Company completed the acquisition of 100 percent of the
outstanding common and preferred shares of Herb Coca-Cola. The results of Herb's
operations have been included in the Company's consolidated statements since
July 1, 2001. Herb Coca-Cola was previously the third largest bottler of
products of The Coca-Cola Company in the United States. As a result of the
acquisition, the Company will sell approximately 80% of The Coca-Cola Company's
bottle and can volume in the United States. The Company also expects cost
savings and system rationalization as a result of the proximity of Herb
Coca-Cola's operations to its existing territories.
The total transaction value was approximately $1.4 billion, including cash of $1
billion and common stock of $400 million. The value of the 25 million shares
issued was determined based on the average closing price of the Company's common
shares over the two day period before and after the terms of the acquisition
were finalized and agreed to. The total transaction value is comprised of
approximately $1.3 billion for the bottling operations and $100 million for the
value of incremental tax benefits associated with the structure of the
transaction.
The following unaudited pro forma financial information should be read in
conjunction with the Company's audited and unaudited financial statements,
including the notes thereto, contained in: (i) the Coca-Cola Enterprises' Annual
Report on Form 10-K for the year ended December 31, 2000 and (ii) Coca-Cola
Enterprises' Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 2000, June 30, 2000, September 29, 2000, March 30, 2001, and June 29,
2001.
The accompanying unaudited pro forma combined condensed statements of income
excluding nonrecurring items for the six months ended June 29, 2001 and for the
year ended December 31, 2000 and the unaudited pro forma combined condensed
statements of income excluding nonrecurring items for each of the quarterly
periods ended March 31, 2000, June 30, 2000, September 29, 2000, December 31,
2000, March 30, 2001, and June 29, 2001 present the combined operating results
of the Company and Herb Coca-Cola as if the acquisition described above had
occurred at the beginning of 2000. Certain reclassifications and adjustments
have been made to the historical financial statements of Herb Coca-Cola to
conform to the Company's financial presentation.
Page 17
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION EXCLUDING
NONRECURRING ITEMS (UNAUDITED)
INTRODUCTORY INFORMATION - (CONTINUED)
This pro forma financial information is not intended to be indicative of the
operating results that would have occurred if the acquisitions had been
consummated in accordance with the assumptions set forth, nor is it intended to
be a forecast of future operating results. Among the events and uncertainties
which could adversely affect future periods are ineffective advertising,
marketing and promotional programs that result in lower than expected volume,
efforts to manage price that adversely affect volume, efforts to manage volume
that adversely affect price, changes in the estimates of charges related to our
anticipated restructuring, an inability to meet performance requirements for
expected levels of marketing support payments from The Coca-Cola Company,
material changes from expectations in the costs of raw materials and
ingredients, an inability to achieve the expected timing for returns on cold
drink equipment and employee infrastructure expenditures, an inability to meet
projections for performance in newly acquired territories, potential assessment
of additional taxes resulting from audits conducted by the Canadian Customs and
Revenue Agency, unexpected costs or effect on European sales associated with
conversion to the common European currency (the euro), and unfavorable interest
rate and currency fluctuations. We caution readers that in addition to the above
cautionary statements, all information contained herein should be read in
conjunction with the detailed cautionary statements found on page 48 of the
Company's Annual Report for the fiscal year ended December 31, 2000.
Page 18
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
EXCLUDING NONRECURRING ITEMS
For the Quarters and the Six Months Ended June 29, 2001
(Unaudited; in millions, except per share data)
Pro Forma Pro Forma Pro Forma
Combined Combined Combined
Quarter Ended Quarter Ended Six Months
March 30, June 29, Ended
2001 2001 June 29, 2001
------------- ------------- -------------
Net Operating Revenues $ 3,557 $4,356 $ 7,913
Cost of Sales 2,195 2,699 4,894
------- ------ -------
Gross Profit 1,362 1,657 3,019
Selling, Delivery, and
Administrative Expenses 1,289 1,355 2,644
------- ------ -------
Operating Income 73 302 375
Interest Expense, Net 206 203 409
Other Nonoperating Expense, Net -- -- --
------- ------ -------
Income (Loss) Before Income Taxes (133) 99 (34)
Income Tax Expense (Benefit) (45) 20 (25)
Nonrecurring Income Tax (Benefit) -- -- --
------- ------ -------
Net Income (Loss) (88) 79 (9)
Preferred Stock Dividends 1 1 2
------- ------ -------
Net Income (Loss) Applicable to
Common Shareowners $ (89) $ 78 $ (11)
======= ====== =======
Basic Average Common Shares
Outstanding 443 444 444
======= ====== =======
Basic Net Income (Loss) Per Share
Applicable to Common
Shareowners $ (0.20) $ 0.17 $ (0.03)
======= ====== =======
Diluted Average Common Shares
Outstanding 443 452 444
======= ====== =======
Diluted Net Income (Loss) Per Share
Applicable to Common
Shareowners $ (0.20) $ 0.17 $ (0.03)
======= ====== =======
Cash Operating Profit Data:
Operating Income $ 73 $ 302 $ 375
Depreciation 224 236 460
Amortization 114 113 227
------- ------ -------
Cash Operating Profit $ 411 $ 651 $ 1,062
======= ====== =======
The introductory information on pages 17 and 18 and the accompanying Notes to
Unaudited Pro Forma Combined Condensed Financial Information on page 21 are an
integral part of these statements. Pro forma combined information contained in
these statements should not be construed to be forecasts of future operating
results.
Page 19
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
EXCLUDING NONRECURRING ITEMS
For the Quarters and the Year Ended December 31, 2000
(Unaudited; in millions, except per share data)
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
Combined Combined Combined Combined Combined
Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended
March 31, June 30, September 30, December 31, December 31,
2000 2000 2000 2000 2000
-------------- ------------- -------------- -------------- ------------
Net Operating Revenues $ 3,503 $4,278 $4,096 $3,789 $15,666
Cost of Sales 2,137 2,638 2,508 2,351 9,634
------- ------ ------ ------ -------
Gross Profit 1,366 1,640 1,588 1,438 6,032
Selling, Delivery, and
Administrative Expenses 1,203 1,213 1,193 1,208 4,817
------- ------ ------ ------ -------
Operating Income 163 427 395 230 1,215
Interest Expense, Net 211 214 212 212 849
Other Nonoperating Expense, Net -- 2 1 4 7
------- ------ ------ ------ -------
Income (Loss) Before Income Taxes (48) 211 182 14 359
Income Tax Expense (Benefit) (16) 72 62 3 121
Nonrecurring Income Tax (Benefit) -- -- -- -- --
------- ------ ------ ------ -------
Net Income (Loss) (32) 139 120 11 238
Preferred Stock Dividends 1 1 1 1 3
------- ------ ------ ------ -------
Net Income (Loss) Applicable to
Common Shareowners $ (33) $ 138 $ 119 $ 10 $ 235
======= ====== ====== ====== =======
Basic Average Common Shares
Outstanding 446 445 443 442 444
======= ====== ====== ====== =======
Basic Net Income (Loss) Per Share
Applicable to Common
Shareowners $ (0.07) $ 0.31 $ 0.27 $ 0.02 $ 0.53
======= ====== ====== ====== =======
Diluted Average Common Shares
Outstanding 446 454 452 452 454
======= ====== ====== ====== =======
Diluted Net Income (Loss) Per Share
Applicable to Common
Shareowners $ (0.07) $ 0.30 $ 0.26 $ 0.02 $ 0.52
======= ====== ====== ====== =======
Cash Operating Profit Data:
Operating Income $ 163 $ 427 $ 395 $ 230 $ 1,215
Depreciation 215 207 215 215 852
Amortization 114 112 113 113 453
------- ------ ------ ------ -------
Cash Operating Profit $ 492 $ 746 $ 723 $ 558 $ 2,520
======= ====== ====== ====== =======
The introductory information on pages 17 and 18 and the accompanying Notes to
Unaudited Pro Forma Combined Condensed Financial Information on page 21 are an
integral part of these statements. Pro forma combined information contained in
these statements should not be construed to be forecasts of future operating
results.
Page 20
COCA-COLA ENTERPRISES INC.
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
EXCLUDING NONRECURRING ITEMS (UNAUDITED)
The following notes describe the pro forma adjustments necessary to reflect the
effects of the acquisition and the nonrecurring items excluded from this
supplemental presentation.
NOTE A - Pro forma adjustments included in "Selling, Delivery & Administrative
Expenses" eliminate amortization of franchise and goodwill included in Herb
Coca-Cola's results of operations. Adjustments to eliminate goodwill and
franchise amortization have been made to present pro forma financial information
as of January 1, 2000 in accordance with FASB Statement No. 142, Goodwill and
Other Intangible Assets (FAS 142). Under the provisions of FAS 142, goodwill
acquired in a business combination after June 30, 2001 is not amortized. In
addition, as franchise is classified as an intangible asset with an indefinite
useful life according to FAS 142, any franchise acquired in a business
combination after June 30, 2001 is also not amortized.
NOTE B - The pro forma adjustments included in "Interest Expense, Net" reflect
the additional interest costs on debt issued to fund the cash portion of the
purchase price as if the debt were outstanding on January 1, 2000 and the
reduction of interest expense as if the assumed debt was repaid on January 1,
2000. These adjustments are made assuming an effective annual interest rate of
5.79%.
NOTE C - The pro forma adjustments included in "Income Tax Expense (Benefit)"
reflect the income tax attributes of the foregoing adjustments and the effect on
the consolidated tax provision after inclusion of Herb Coca-Cola. On a quarterly
basis, the pro forma adjustments reflect modifications to the Company's
estimated effective annual income tax rate for full-year 2000 and 2001 giving
effect to the results of operations of Herb Coca-Cola and the pro forma
adjustments.
NOTE D - The Company's results in the accompanying presentation exclude the
following significant nonrecurring items: (i) a restructuring charge of $12
million related to operations in Great Britain, recognized in the second quarter
of 2000, (ii) insurance proceeds of $20 million related to the Company's 1999
Belgian product recall, recognized in the third quarter of 2000, (iii) an income
tax benefit of $14 million principally due to a rate change in France and a
revaluation of income tax obligations, recognized in the fourth quarter of 2000,
and (iv) an income tax benefit of $46 million principally due to rate changes in
Canada, recognized in the second quarter of 2001.
Herb Coca-Cola's results presented exclude the following significant
nonrecurring items: (i) net occupancy expense eliminated with the acquisition $2
million per quarter from the first quarter of 2000 through the second quarter of
2001, (ii) employee loyalty bonuses of $20 million recognized in the second
quarter of 2001, and (iii) bad debt expense of $6 million recognized in the
second quarter of 2001.
NOTE E - All per share data is calculated prior to rounding to millions.
Page 21