UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 2, 1994
Commission File Number 0-9286
COCA-COLA BOTTLING CO. CONSOLIDATED
(Exact name of registrant as specified in its charter)
Delaware 56-0950585
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1900 Rexford Road, Charlotte, North Carolina 282ll
(Address of principal executive offices) (Zip Code)
(704) 551-4400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1)
has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for
such shorter period that the registrant was
required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days. Yes X No
Indicate the number of shares outstanding of each
of the issuer's classes of common stock, as of the
latest practicable date.
Class Outstanding at November 4, 1994
Common Stock, $1 Par Value 7,958,059
Class B Common Stock, $1 Par Value 1,336,362
<PAGE>
PART I - FINANCIAL INFORMATION
Item l. Financial Statements.
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands of Dollars
<TABLE>
<CAPTION>
Oct. 2, Jan. 2, Oct. 3,
1994 1994 1993
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash $ 2,200 $ 1,262 $ 1,562
Accounts receivable, trade, less
allowance for doubtful accounts
of $419, $425 and $634 7,522 4,960 5,257
Accounts receivable from
The Coca-Cola Company 5,991 6,698 2,842
Due from Piedmont Coca-Cola
Bottling Partnership 1,907 2,454 2,268
Accounts receivable, other 6,583 10,758 12,952
Inventories 30,320 27,533 30,592
Prepaid expenses and other
current assets 8,321 4,734 5,159
Total current assets 62,844 58,399 60,632
Property, plant and equipment,
at cost 317,030 297,561 292,273
Less - accumulated depreciation
and amortization 138,022 134,546 131,876
Property,
plant and equipment,
net 179,008 163,015 160,397
Investment in Piedmont Coca-Cola
Bottling Partnership 68,801 68,400 70,343
Other assets 19,317 18,700 19,865
Identifiable intangible assets,
less accumulated amortization of
$73,200, $65,803 and $63,398 260,318 267,715 279,134
Excess of cost over fair value
of net assets of businesses
acquired, less accumulated
amortization of $21,117, $19,399
and $18,826 70,502 72,220 72,793
Total $660,790 $648,449 $663,164
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Oct. 2, Jan. 2, Oct. 3,
1994 1994 1993
<S> <C> <C> <C>
Current Liabilities:
Portion of long-term debt payable
within one year $ 376 $ 711 $ 1,133
Accounts payable and accrued
liabilities 54,948 69,232 62,027
Accounts payable to The Coca-Cola
Company 1,993 1,876 4,494
Accrued interest payable 5,593 10,108 4,680
Total current liabilities 62,910 81,927 72,334
Deferred income taxes 88,302 80,065 89,044
Other liabilities 21,630 22,470 21,765
Senior long-term debt 454,392 434,358 444,587
Total liabilities 627,234 618,820 627,730
Shareholders' Equity:
Convertible Preferred Stock, $100 par
value: Authorized-50,000 shares;
Issued-None
Nonconvertible Preferred Stock, $100
par value: Authorized-50,000 shares;
Issued-None
Preferred Stock, $.01 par value:
Authorized-20,000,000 shares;
Issued-None
Common Stock, $1 par value:
Authorized-30,000,000 shares;
Issued-10,090,859 shares 10,090 10,090 10,090
Class B Common Stock, $1 par value:
Authorized-10,000,000 shares;
Issued-1,964,476 shares 1,965 1,965 1,965
Class C Common Stock, $1 par value:
Authorized-20,000,000 shares;
Issued-None
Capital in excess of par value 132,351 139,322 141,246
Accumulated deficit (87,590) (98,488) (100,221)
Minimum pension liability adjustment (5,614) (5,614)
51,202 47,275 53,080
Less-Treasury stock, at cost:
Common-2,132,800 shares 17,237 17,237 17,237
Class B Common-628,114 shares 409 409 409
Total shareholders' equity 33,556 29,629 35,434
Total $660,790 $648,449 $663,164
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands (Except Per Share Data)
<TABLE>
<CAPTION>
Third Quarter Nine Months
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales (includes sales to
Piedmont of $23,121, $23,886,
$67,932 and $23,886) $ 188,418 $ 182,149 $ 552,927 $ 530,922
Cost of products sold,
excluding depreciation shown
below (includes $19,679,
$20,953, $59,785 and $20,953
related to sales to Piedmont) 112,554 108,758 328,979 302,054
Gross margin 75,864 73,391 223,948 228,868
Selling expenses 37,524 34,508 111,473 111,869
General and administrative
expenses 13,565 13,499 39,732 39,927
Depreciation expense 5,895 5,755 17,659 17,403
Amortization of goodwill
and intangibles 3,081 3,144 9,235 11,766
Income from operations 15,799 16,485 45,849 47,903
Interest expense 7,999 7,292 23,358 23,795
Other income (expense), net 761 (686) 474 (2,386)
Income before income taxes and
effect of accounting change 8,561 8,507 22,965 21,722
Federal and state income taxes 3,662 2,791 9,856 8,622
Income before effect of
accounting change 4,899 5,716 13,109 13,100
Effect of accounting change (2,211)
Net income $ 4,899 $ 5,716 $ 10,898 $ 13,100
Income per share:
Income before effect of
accounting change $ .53 $ .62 $ 1.41 $ 1.42
Effect of accounting change (.24)
Net income $ .53 $ .62 $ 1.17 $ 1.42
Cash dividends per share:
Common Stock $ .25 $ .22 $ .75 $ .66
Class B Common Stock .25 .13 .75 .39
Weighted average number of
Common and Class B Common
shares outstanding 9,294 9,294 9,294 9,245
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
In Thousands of Dollars
<TABLE>
<CAPTION>
Capital Minimum
Class B in Pension
Common Common Excess of Accumulated Liability Treasury
Stock Stock Par Value Deficit Adjustment Stock
<S> <C> <C> <C> <C> <C> <C>
Balance on
January 3,
1993 $ 9,977 $ 1,965 $ 144,831 $ (113,321) $ 17,646
Net income 13,100
Cash dividends
declared:
Common (5,741)
Issuance of
Common Stock 113 2,156
Balance on
October 3, 1993 $10,090 $ 1,965 $ 141,246 $ (100,221) $ 17,646
Balance on
January 2,
1994 $10,090 $ 1,965 $ l39,322 $ (98,488) $ (5,614) $ 17,646
Net income 10,898
Cash dividends
declared:
Common (6,971)
Balance on
October 2, 1994 $10,090 $ 1,965 $ 132,351 $ (87,590) $ (5,614) $ 17,646
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
In Thousands of Dollars
<TABLE>
<CAPTION>
Nine Months
1994 1993
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 10,898 $ 13,100
Adjustments to reconcile net income to net
cash provided by operating activities:
Effect of accounting change 2,211
Depreciation expense 17,659 17,403
Amortization of goodwill and intangibles 9,235 11,766
Deferred income taxes 9,856 8,602
(Gains) losses on sale of property, plant
and equipment (1,432) 1,334
Amortization of debt costs 341 400
Undistributed earnings of Piedmont
Coca-Cola Bottling Partnership (401) (343)
Increase in current assets less current
liabilities (26,004) (12,128)
Decrease (increase) in other noncurrent
assets (710) 264
Decrease in other noncurrent liabilities (301) (618)
Other 490 (80)
Total adjustments 10,944 26,600
Net cash provided by operating
activities 21,842 39,700
Cash Flows from Financing Activities
Proceeds from the issuance of long-term debt 21,246
Repayments of long-term debt (1,213) (110,540)
Issuance of Common Stock 2,269
Cash dividends paid (6,971) (5,741)
Other (1,260) (1,584)
Net cash provided by (used in) financing
activities 11,802 (115,596)
Cash Flows from Investing Activities
Additions to property, plant and equipment (36,748) (19,068)
Proceeds from the sale of property, plant
and equipment 4,042 611
Acquisition of companies, net of cash
acquired (1,572)
Net proceeds from sale and contribution
of assets to Piedmont Coca-Cola Bottling
Partnership 96,073
Net cash provided by (used in) investing
activities (32,706) 76,044
Net increase in cash 938 148
Cash at beginning of period 1,262 1,414
Cash at end of period $ 2,200 $ 1,562
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements
(Unaudited)
1. Accounting Policies
The consolidated financial statements include the
accounts of Coca-Cola Bottling Co. Consolidated
and its wholly owned subsidiaries ("the Company").
All significant intercompany accounts and
transactions have been eliminated.
The information contained in the financial
statements is unaudited. The statements reflect
all adjustments which, in the opinion of
management, are necessary for a fair statement of
the results for the interim periods presented.
Except for the accounting change discussed in Note
2, all such adjustments are of a normal, recurring
nature.
The accounting policies followed in the
presentation of interim financial results are the
same as those followed on an annual basis. These
policies are presented in Note 1 to the
consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year
ended January 2, 1994 filed with the Securities
and Exchange Commission.
Certain prior year amounts have been reclassified
to conform to current year classifications.
2. Accounting Change
In November 1992, the Financial Accounting
Standards Board issued Statement of Financial
Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits" ("SFAS
112"). SFAS 112 requires the accrual, during the
years that employees render service, of the
expected cost of providing postemployment benefits
if certain criteria are met. The Company adopted
the provisions of SFAS 112 in the first quarter of
1994, effective January 3, 1994. As a result, the
Company recorded a one-time, after-tax charge of
$2.2 million. This charge appears within the
caption "Effect of accounting change."
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements
(Unaudited)
3. Summarized Income Statement Data of Piedmont
Coca-Cola Bottling
Partnership
On July 2, 1993, the Company and The Coca-Cola
Company formed Piedmont Coca-Cola Bottling
Partnership ("Piedmont") to distribute and market
soft drink products primarily in portions of North
Carolina and South Carolina. The Company and The
Coca-Cola Company, through their respective
subsidiaries, each beneficially own a 50% interest
in Piedmont. The Company provides a majority of
the soft drink products to Piedmont and receives a fee
for managing the business of Piedmont pursuant to a
management agreement. Summarized income statement
data for Piedmont is as follows:
<TABLE>
<CAPTION>
Third Quarter Nine Months
In Thousands 1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales $51,837 $50,427 $149,470 $50,427
Gross margin 22,534 21,619 64,313 21,619
Income from operations 2,576 2,579 6,397 2,579
Net income 1,612 686 802 686
</TABLE>
4. Inventories
Inventories are summarized as follows:
<TABLE>
<CAPTION>
Oct. 2, Jan. 2, Oct. 3,
In Thousands 1994 1994 1993
<S> <C> <C> <C>
Finished products $18,272 $16,622 $19,546
Manufacturing materials 10,444 9,498 10,173
Used bottles and cases 1,604 1,413 873
Total inventories $30,320 $27,533 $30,592
</TABLE>
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
5. Long-Term Debt
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
Fixed(F) or
Interest Variable Interest Oct. 2, Jan. 2, Oct. 3,
In Thousands Maturity Rate (V) Rate Paid 1994 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C>
Lines of Credit 1997 4.98% - V Varies $114,601 $ 18,335 $ 18,420
5.55%
Commercial Paper 9,987
Term Loan Agreement 75,000 75,000
Term Loan Agreement 2000 5.75% V Semi- 60,000 60,000 60,000
annually
Term Loan Agreement 2001 5.69% V Semi- 60,000 60,000 60,000
annually
Medium-Term Notes 1998 5.61% V Quarterly 10,000 10,000 10,000
Medium-Term Notes 1999 7.99% F Semi- 66,500 66,500 66,500
annually
Medium-Term Notes 2000 10.05% F Semi- 57,000 57,000 57,000
annually
Medium-Term Notes 2002 8.56% F Semi- 66,500 66,500 66,500
annually
Notes acquired in
Sunbelt acquisition 2001 8.00% F Quarterly 5,421 5,442 5,441
Capital leases and
other notes payable 1994 - 6.85% - F Varies 14,746 16,292 16,872
2001 12.00%
454,768 435,069 445,720
Less: Portion of
long-term debt
payable within
one year 376 711 1,133
Senior long-term debt $454,392 $434,358 $444,587
</TABLE>
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements
(Unaudited)
5. Long-Term Debt (cont.)
As of October 2, 1994, the Company was in
compliance with all of the covenants of its
various borrowing agreements.
It is the Company's intent to renew its lines of
credit, commercial paper borrowings and borrowings
under the revolving credit facility as they
mature. To the extent that these borrowings do
not exceed the amount available under the
Company's $170 million revolving credit facility,
they are classified as noncurrent liabilities.
A $100 million commercial paper program was
established in January 1990 with funds to be used
for general corporate purposes. There were no
balances outstanding under this program on October
2, 1994 or January 2, 1994. On October 3, 1993,
approximately $10.0 million was outstanding under
the commercial paper program.
In June 1992, the Company entered into a three-
year arrangement under which it has the right to
sell an undivided interest in a designated pool
of trade accounts receivable for up to a maximum
of $40 million. The Company had sold trade
receivables of $35 million, $33 million and $34.5
million as of October 2, 1994, January 2, 1994 and
October 3, 1993, respectively.
6. Financial Instruments with Off-Balance-Sheet
Risk
The Company uses interest rate hedging products to
cost effectively modify risk from interest rate
fluctuations in its underlying debt. The Company
alters its fixed/floating interest rate mix based
upon anticipated operating cash flows of the
Company relative to its debt level and the
Company's ability to absorb increases in interest
rates. The Company has entered into interest rate
hedging transactions that resulted in weighted
average interest rates for the debt portfolio of
approximately 6.6%, 6.7% and 6.1% as of October 2,
1994, January 2, 1994 and October 3, 1993,
respectively. Including the effect of hedging
activities, approximately 55%, 43% and 44% of the
total debt portfolio was subject to changes in
short-term interest rates as of October 2, 1994,
January 2, 1994 and October 3, 1993, respectively.
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements
(Unaudited)
6. Financial Instruments with Off-Balance-Sheet
Risk (cont.)
Off-balance-sheet financial instruments were as
follows:
<TABLE>
<CAPTION>
October 2, 1994 January 2, 1994 October 3, 1993
Remaining Remaining Remaining
In Thousands Amount Term Amount Term Amount Term
<S> <C> <C> <C> <C> <C> <C>
Interest swaps-
floating $221,600 6-9 years $221,600 7-10 years $221,600 7-10 years
Interest swaps-
fixed 215,000 1-9 years 368,000 1-10 years 308,000 1-10 years
Interest caps 110,000 1 year 110,000 1.5 years 110,000 2 years
Financial
guarantees 26,861 7-10 years 13,094 7 years 16,961 8 years
</TABLE>
7. Income Taxes
Reported income tax expense differs from the
amount computed at the statutory rate due to
amortization of nondeductible goodwill, state
income taxes, nondeductible premiums on officers'
life insurance and other nondeductible expenses.
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements
(Unaudited)
8. Supplemental Disclosures of Cash Flow
Information
Changes in current assets and current liabilities
affecting cash, net of effects from acquisitions
and divestitures and effect of accounting change,
are as follows:
<TABLE>
<CAPTION>
Nine Months
In Thousands 1994 1993
<S> <C> <C>
Accounts receivable, trade, net $ (2,562) $ (9,616)
Due from Piedmont 547 (2,268)
Accounts receivable, other 4,882 (1,862)
Inventories (2,787) (5,999)
Prepaid expenses and other current assets (3,587) (2,113)
Portion of long-term debt payable within
one year (335) (370)
Accounts payable and accrued liabilities (17,647) 16,462
Accrued interest payable (4,515) (6,362)
Increase $(26,004) $(12,128)
</TABLE>
Cash payments during the period were as follows:
<TABLE>
<CAPTION>
Nine Months
In Thousands 1994 1993
<S> <C> <C>
Interest $ 27,533 $ 29,757
Income taxes 55 1,252
</TABLE>
Noncash items related to the formation of Piedmont on July 2, 1993 were as
follows:
<TABLE>
<CAPTION>
In Thousands
<S> <C>
Assets contributed to Piedmont $48,254
Assumption of Company liabilities by Piedmont 4,800
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Introduction:
The following discussion presents management's
analysis of the results of operations for the
first nine months of 1994 compared to the first
nine months of 1993 and changes in financial
condition from October 3, 1993 and January 2, 1994
to October 2, 1994.
On July 2, 1993, the Company and The Coca-Cola
Company formed Piedmont Coca-Cola Bottling
Partnership ("Piedmont") to distribute and market
soft drink products primarily in certain portions
of North Carolina and South Carolina. The Company
provides a majority of the soft drink products to
Piedmont and receives a fee for managing the
business of Piedmont pursuant to a management
agreement. The Company sold or contributed to
Piedmont its territories located in South
Carolina, as well as certain territories located
in North Carolina. Assets were sold or
contributed at their approximate carrying values.
Proceeds from the sale of territories to Piedmont,
net of the Company's cash contribution, totaled
approximately $96 million and were used to reduce
the Company's long-term debt. The Company is
accounting for its investment in Piedmont using
the equity method of accounting.
The Company filed a registration statement with
the Securities and Exchange Commission on July 20,
1994 (which became effective October 12, 1994)
pursuant to which the Company may offer from time
to time debt or equity securities in an aggregate
amount of $400 million. Upon any future
commencement of an offering, any net proceeds from
sales of the securities would be used for general
corporate purposes, including repayment of debt,
future acquisitions, capital expenditures or
working capital. There are no current plans with
respect to any specific significant acquisition or
use of proceeds.
The Company reported net income of $4.9 million or
$.53 per share for the third quarter of 1994
compared with $5.7 million or $.62 per share for
the same period in 1993. For the first nine
months of 1994, the Company reported net income of
$10.9 million or $1.17 per share compared to $13.1
million or $1.42 per share in the first nine
months of 1993. A one-time, after-tax noncash
charge of $2.2 million or $.24 per share was
recorded in the first quarter of 1994 due to the
adoption of Statement of Financial Accounting
Standards No. 112, "Employers' Accounting for
Postemployment Benefits" ("SFAS 112"). The
Company does not expect any significant impact on
the results of future operations due to the
adoption of this accounting standard.
The results for interim periods are not
necessarily indicative of the results to be
expected for the year due to seasonal factors.
<PAGE>
Result of Operations:
For the third quarter of 1994, net sales increased
approximately 3.5% over the 1993 period. Case volume increased
by slightly more than 1% and average selling
prices were slightly higher. The volume growth
was slower in the third quarter of 1994 than in
the first half of 1994, reflecting milder
temperatures in July and August within the
franchise territories.
Net sales for the first nine months of 1994
increased 4.1% over the same period of 1993;
however, results of operations for the nine-month
periods are not directly comparable due to the
formation of Piedmont on July 2, 1993.
Excluding the results of the branches sold or
contributed to Piedmont from 1993 results,
franchise net sales increased by 5.5% for the
first nine months of 1994. This increase in
franchise net sales was primarily due to increased
volume. The introduction of certain New Age
beverages, such as Nestea and PowerAde,
contributed approximately 1.4% of the increase in
franchise sales in the first nine months of 1994.
Average net selling prices were slightly higher
than those of the 1993 periods, sustaining the
increases realized in 1993 versus 1992. Sales to
other bottlers increased for the first nine months
of 1994 over the same period in 1993 primarily due
to the sale of finished products to Piedmont.
Soft drink products are sold to Piedmont at cost.
When the results for the first nine months are
adjusted to reflect comparable territories, gross
margin increased 4.3%. Cost of goods sold as a
percentage of net sales was slightly higher as
increases in the costs of ingredients were
partially offset by lower packaging costs.
Packaging costs are expected to increase
significantly at the end of the fourth quarter of
1994 and during the first quarter of 1995 as a
result of increases in the cost of PET and
aluminum. The Company expects to increase selling
prices to cover the expected increased cost of raw
materials.
Excluding the results of the branches sold or
contributed to Piedmont from 1993 results, selling
expenses increased from approximately 23.3% of net
sales in the first nine months of 1993 to
approximately 24.7% of net sales in the first nine
months of 1994. Higher employment costs resulted
from normal wage rate adjustments and planned
increases in certain sales and operations
functions to improve customer service and reduce
turnover. Also, the sales and operations
functions increased as a result of increased
volume in the first half of 1994. Expenses
associated with the introduction of New Age
beverages also increased 1994 selling expenses.
General and administrative expenses as a
percentage of net sales for the comparable
franchise territories were slightly lower than for
the 1993 periods.
Amortization of goodwill and intangibles declined
21.5% for the first nine months of 1994,
reflecting the sale and contribution of franchise
territories to Piedmont.
<PAGE>
Interest expense increased almost 10% from the
third quarter of 1993 to the third quarter of 1994
but was slightly lower for the first nine months
of 1994 versus the comparable period in 1993. The
third quarter increase was due to higher short-
term interest rates. Interest expense had been
lower during the first half of 1994 due primarily
to the decrease of more than $100 million in
outstanding debt during the third quarter of 1993.
Proceeds from the sale of territories to Piedmont,
net of the Company's cash contribution, were used
to reduce the Company's long-term debt.
The change in "other income (expense), net" for
the first nine months of 1994 was due primarily to
a third quarter 1994 gain on the sale of one of
the Company's aircraft and a first quarter 1994
gain on the sale of an idle production facility.
This facility was acquired in the 1991 Sunbelt
acquisition and was closed in April 1992. For the
first nine months of 1994, gains of approximately
$1.4 million on sales of property, plant and
equipment were included in "other income
(expense), net." Losses of approximately $1.3
million on sales of property, plant and equipment
were included in "other income (expense), net" for
the first nine months of 1993.
The estimated annual effective tax rate for
federal and state income taxes was 43% for both
the third quarter and the first nine months of
1994. The difference between the effective rate
and the statutory rate was due primarily to
amortization of nondeductible goodwill, state
income taxes, nondeductible premiums on officers'
life insurance and other nondeductible expenses.
Changes in Financial Condition:
Working capital increased $23.5 million from
January 2, 1994 and $11.6 million from October 3,
1993 to October 2, 1994. These increases resulted
principally from increases in trade accounts
receivable and decreases in accounts payable.
Inventory balances increased from January 2, 1994
in order to support Piedmont's inventory
requirements. The increase in trade accounts
receivable resulted primarily from increases in
net sales.
Capital expenditures in 1994 will be higher than
in 1993. The Company is purchasing rather than
leasing new vehicles and is making certain
manufacturing improvements needed to produce new
packages. Expenditures for capital additions in
1995 are expected to be lower than in 1994.
The Company uses interest rate hedging products to
cost effectively modify risk from interest rate
fluctuations in its underlying debt. The Company
alters its fixed/floating interest rate mix based
upon anticipated operating cash flows of the
Company relative to its debt level and the
Company's ability to absorb increases in interest
rates. As of October 2, 1994, the debt portfolio
had a weighted average interest rate of
approximately 6.6% and approximately 55% of the
total portfolio was subject to changes in
<PAGE>
short-term interest rates. As a result of
increases in short-term interest rates, the
Company expects that interest expense in the
remainder of 1994 will increase versus the fourth
quarter of 1993.
Long-term debt increased $20.0 million from
January 2, 1994 due primarily to the increase in
working capital. As of October 2, 1994, the
Company was in compliance with all of the
covenants of its various borrowing agreements.
It is the Company's intent to renew any borrowings
under its $170 million revolving credit facility
and the informal lines of credit as they mature.
To the extent that any borrowings under the
revolving credit facility, the informal lines of
credit and commercial paper program do not exceed
the amount available under the Company's $170
million revolving credit facility, they are
classified as noncurrent liabilities. As of
October 2, 1994, the Company had no balances
outstanding under the revolving credit facility or
the commercial paper program and had $114.6
million outstanding under the informal lines of
credit. The Company had sold trade accounts
receivable of $35 million as of October 2, 1994
compared to $33 million and $34.5 million on
January 2, 1994 and October 3, 1993, respectively.
In February 1994, the Board of Directors approved
an increase in the dividend for the first quarter
of 1994. Quarterly dividends were increased to
$.25 per share on both the Common and Class B
Common shares outstanding. This dividend rate has
been maintained during 1994. Annual dividend
payments will total approximately $9.3 million in
1994.
Management believes that the Company, through the
generation of cash flow from operations and the
utilization of unused borrowing capacity, has
sufficient financial resources available to
maintain its current operations and provide for
its current capital expenditure requirements. The
Company considers the acquisition of additional
franchise territories on an ongoing basis.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
10.1 Agreement, dated as of December 23, 1993, between the Company and
Western Container Corporation covering purchase of PET bottles.
10.2 Lease Funding No. 94007, dated as of August 12, 1994, of a Master
Equipment Lease between the Company and Coca-Cola Financial
Corporation covering various vending machines.
10.3 Lease Funding No. 94008, dated as of September 7, 1994, of a Master
Equipment Lease between the Company and Coca-Cola Financial
Corporation covering various vending machines.
10.4 Lease Funding No. 94009, dated as of October 10, 1994, of a Master
Equipment Lease between the Company and Coca-Cola Financial
Corporation covering various vending machines.
10.5 Lease Funding No. 94010, dated as of October 26, 1994, of a Master
Equipment Lease between the Company and Coca-Cola Financial
Corporation covering various vending machines.
27 Financial data schedule for period ended October 2, 1994.
</TABLE>
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
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, thereunto duly authorized.
<TABLE>
<CAPTION>
<S> <C>
COCA-COLA BOTTLING CO. CONSOLIDATED
(REGISTRANT)
Date: November 14, 1994 By: /s/ David V. Singer
David V. Singer
Principal Financial Officer
of the Registrant
and
Vice President - Chief Financial
Officer
</TABLE>
<PAGE>
<PAGE>
AGREEMENT
This Agreement is made and entered on this 23 day of December, 1993 between
Western Container Corporation ("Seller"), a Texas corporation having its
principal place of business at Houston, Texas, and Coca-Cola Bottling Co.
Consolidated, a Delaware corporation having its principal place of business
at 1900 Rexford Rd., Charlotte, NC 28210 ("Buyer").
WITNESSETH:
WHEREAS, Seller is in the business of manufacturing for sale sixteen ounce,
twenty ounce and 1 liter unlabeled polyethylene terephthalate bottles (PET
Bottles) in what is commonly known as "generic" or straight-walled design
("Generic Bottles"); and
WHEREAS, Buyer wants to purchase from Seller PET Bottles of a contoured
design ("Contoured Bottles") which Seller does not currently manufacture, nor
does Seller have the equipment to so manufacture; and
WHEREAS, Buyer also wants to purchase from Seller additional volumes of
Generic Bottles which Seller currently does not have the capacity to
manufacture; and
WHEREAS, in order for Seller to acquire the manufacturing capacity
necessary to supply Buyer and other customers with their expected volume
of Contoured and Generic Bottles from Seller, Seller will be required to
make substantial capital expenditures for Bottle manufacturing and related
equipment, which expenditures are estimated to be in excess of $16,000,000;
and
<PAGE>
WHEREAS, Seller is willing to enter into this agreement to supply
Contoured and Generic Bottles to Buyer only on the condition that Seller is
afforded protection from Buyer that Seller will not be at risk or suffer any
financial loss resulting from its purchase of such additional capital
equipment in the event that Buyer for any reason whatsoever, including
an event of force majeure, either ceases to purchase Bottles from Seller,
or ceases to purchase Bottles in sufficient quantities to substantially
fully utilize such additional capital equipment, all in accordance with
the terms and conditions hereof.
NOW, THEREFORE, for good and valuable consideration, the sufficiency and
receipt of which is hereby acknowledged by both parties, and in consideration
of the following terms and provisions, the parties agree as follows:
1. Sale of PET Bottles to Buyer.
(a) Seller shall be obligated to sell and deliver to Buyer a
cumulative total of 59.6MM 16-ounce, 20-ounce, and/or 1-liter Generic or
Contour Bottles, in such proportions as Buyer may determine, for each twelve
(12) month period beginning the earlier of July 1, 1994, or the first day of
the month after the month in which Seller has available for shipment to Buyer
commercial quality and quantity of Contoured or Generic Bottles (the "Initial
Date"); and
(b) Seller shall be relieved of the obligations in Paragraph 1(a)
above if Seller's failure to sell and deliver such quantity of PET Bottles is
due to an event of force majeure affecting Seller. For the purposes of this
Agreement, an event of force majeure shall mean any act which is beyond the
reasonable control of Seller, including without limitation, fire, explosion,
breakdown or plant failure of machinery, strike, walk-out
-2-
<PAGE>
labor dispute, casualty or accident, lack of or failure in whole or in part
of transportation facilities, or lack of or failure in whole or in part of
sources of supply of labor, raw materials and/or power ("Force Majeure").
In the event of an act of Force Majeure which prevents Seller from delivering
Bottles to Buyer and such event is covered by Seller's insurance then in
effect, Buyer shall be relieved of its obligation to take or pay for such
Bottles but only to the extent of the Bottles not delivered as a result of
such event and only to the extent of such payments made to Seller under the
insurance coverage as a result of such event. Seller agrees to maintain with
financially sound and reputable insurers insurance with respect to its
properties and business, including business interruption insurance, against
such liabilities, casualties, risks and contingencies and in such types and
amounts as is customary in the case of persons engaged in the same or similar
businesses and similarly situated.
2. Price.
(a) The price to be paid by Buyer to Seller for PET Bottles purchased
pursuant to this Agreement shall be Seller's price as established from time
to time by Seller's Board of Directors in accordance with the then applicable
provisions of the Seller's bylaws and Seller's written policies relating to
pricing, as such price may be changed from time to time by Seller's Board of
Directors upon not less than five (5) days prior notice in accordance with
Seller's pricing policy then in effect. In addition, Buyer shall be invoiced
on and shall pay a reasonable deposit for all PET Bottle packaging materials
including, without limitation, pallets, tear sheets, top frames and the like,
which deposit shall be credited to Buyer when and if such packaging materials
are returned to Seller in good condition. Payment by Buyer shall be due net
within thirty (30) days from receipt of invoice
-3-
<PAGE>
by Seller and payments received within fifteen (15) days from receipt of
invoice may be discounted by an amount established from time to time by
Seller. If Buyer fails to make full payment to Seller on any invoice within
thirty (30) days from the date of such invoice (the "Due Date"), such amounts
shall accrue interest from the Due Date at the rate of eighteen percent (18%)
per annum, or the maximum rate permitted by applicable law, whichever is
lesser, and all future shipments of PET Bottles to Buyer shall be sent by
Seller to Buyer C.O.D. or on any other basis acceptable to Seller, at Seller's
discretion, unless credit terms are reinstated by Seller.
3. Take or Pay.
(a) Except as expressly provided in Paragraphs 1(b) and 4(b), the parties
hereto recognize and agree that in no event or circumstance, regardless of
fault or lack of fault of either party, including lack of consumer acceptance
of or demand for beverage products packaged in the Contoured Bottles, shall
Seller be at risk for any economic loss resulting from Seller's purchase of
the capital equipment necessary to supply Buyer with Contoured Bottles or
additional Generic Bottles hereunder. Accordingly, the parties have agreed
to the provisions in Paragraph 3(b) hereof in order to implement this feature
of the Agreement.
(b) In order to compensate Seller for the purchase of the Contour and
Generic Bottle equipment during the term of this Agreement until termination
thereof,
(1) Buyer promises to make 20 quarterly payments (the "Quarterly
Payment") to Seller of $119,184 beginning with the full three calendar month
-4-
<PAGE>
starting with the Initial Date and each 3-month period thereafter during the
term of this Agreement;
(2) In connection with computing each Quarterly Payment as
required by paragraph 3(b)(1) of this Section, Buyer will be entitled to a
credit against such Quarterly Payment of $10.00 for each 1,000 Contour and/or
Generic Bottles (16 oz., 20 oz., or 1 liter size) shipped to and paid for by
Buyer from Seller during the calendar quarter and for each 1,000 Contour and/or
Generic Bottles shipped to other customers of Seller and then filled with
beverages and shipped to Buyer during the calendar quarter up to a maximum
of $119,184 per quarter. The Quarterly Payment is payable to and must be
received by Buyer within 15 days after the end of each such 3-month period;
and
(3) When making each fourth Quarterly Payment during each 12-month
period hereunder, Buyer may use all Bottles purchased during such 12-month
period to determine the credit due on an annual basis to the four quarterly
payments due under Paragraph 3(b)(1). If the quantities purchased during
such twelve months in which the take or pay obligations were assessed exceeds
the annual volume required to negate the take or pay obligation, then any
Quarterly Payments made in such twelve months shall be returned by Seller.
4. Term
(a) The term of this Agreement is for the five year period beginning from
and including the Initial Date.
-5-
<PAGE>
(b) Each party hereto shall have the right at its option to terminate this
Agreement prior to the end of the term, only if (1) one party fails to cure a
material breach of any of its obligations under this Agreement within ninety
(90) days after receiving written notice from the other party of such breach,
such termination to be effective ninety (90) days after the other party gives
such written notice; or (2) the other party files a petition in Bankruptcy
Court or is adjudicated a bankrupt; or (3) the other party has a receiver
of assets or property appointed because of insolvency; or (4) the other
party makes a general assignment of all its assets for the benefit of
creditors.
5. Estimates; PET Bottles.
Buyer must provide Seller with good faith written estimates of Buyer's
estimated purchases of PET Bottles by type (Generic or Contour) and size
(16-oz, 20-oz, and 1-liter) from Seller. These estimates will be calculated
for each twelve-month period beginning April 1 with the first such estimate
to cover the period beginning April 1, 1994 through March 31, 1995. These
estimates will be submitted to Seller by Buyer upon execution hereof for
the first twelve-month period, and no later than ninety (90) days before
the beginning of each subsequent twelve-month period. Buyer further agrees
to provide Seller with information reflecting likely material deviations
from then current forecasts within a reasonable period of time after Buyer has
knowledge of the likelihood of such deviations. Buyer shall place all orders
with Seller at least two weeks prior to the requested delivery date of the
order. In no event shall Seller be required to sell to Buyer Bottles in excess
of the quantities set forth in Paragraph 1.
-6-
<PAGE>
6. Delivery.
Seller shall ship the PET Bottles to the locations specified by Buyer in
its order within two (2) weeks after receipt of an order (subject, however,
to events of Force Majeure); provided, however, if the designated location
is more than five hundred (500) highway miles from Seller's plant from which
the PET Bottles are to be shipped, then Buyer shall pay all transportation
costs with respect to shipping such PET Bottles from Seller's plant to the
designated location to the extent such costs exceed the cost for shipping
such PET Bottles for the first five hundred (500) highway miles. Buyer
agrees to accept delivery of the PET Bottles unlabeled in bulk pallets.
Buyer agrees that Seller is not required to deliver the PET Bottles in
corrugated boxes.
7. Warranties.
Seller represents and warrants that:
(a) Upon delivery, the PET Bottles shall be acceptable at the time
of manufacture to The Coca-Cola Company.
(b) It will at all times carry products liability insurance in the
amount of $500,000 with an umbrella of $10,000,000.
ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ARE
HEREBY EXPRESSLY DISCLAIMED AND NEGATED.
(c) A breach of the warranties in this Section shall entitle Buyer to
damages as provided in Paragraph 8(c) only, but shall not permit Buyer to
terminate this
-7-
<PAGE>
Agreement unless terminated in accordance with a failure of performance by
Seller pursuant to Paragraph 4(b) hereof.
8. Indemnification.
(A) SELLER SHALL, AT ITS OWN EXPENSE, DEFEND, INDEMNIFY, AND HOLD
HARMLESS BUYER FROM ANY AND ALL LIABILITY, COMPLAINT, CLAIM OR LEGAL
ACTION THAT MAY BE INSTITUTED BY A THIRD PARTY AGAINST BUYER ALLEGING
DAMAGE, DEATH, ILLNESS, OR INJURY RESULTING FROM OR ALLEGING A DEFECT
IN THE MANUFACTURE OR MATERIALS OF THE PET BOTTLES OR FROM CONTAMINATION
OF THE CONTENTS THEREOF BY THE MATERIALS FROM WHICH THE PET BOTTLES ARE
MANUFACTURED (BUT NOT SUCH CLAIMS WHICH RESULT FROM A DEFECT OR
CONTAMINATION WHICH OCCURS AFTER THE BOTTLES LEAVE SELLER'S PLANT,
SUCH AS DURING THE HANDLING, SHIPPING, BOTTLING OR THE DISTRIBUTION
OPERATION UNLESS SUCH DEFECT OR CONTAMINATION IS CAUSED ONLY BY THE
PET BOTTLES AS MANUFACTURED) AND TO ASSUME FULL RESPONSIBILITY AND
EXPENSE OF INVESTIGATION, LITIGATION, NEGOTIATION, AND/OR SETTLEMENT
OF ANY SUCH COMPLAINT, CLAIM OR LEGAL ACTION, BUT SUCH LIABILITY,
RESPONSIBILITY AND EXPENSE SHALL NOT EXCEED THE AMOUNT OF SELLER'S
PRODUCT LIABILITY COVERAGE FOR WHICH THE INSURANCE CARRIER MAKES
PAYMENT TO SELLER (PLUS ANY APPLICABLE DEDUCTIBLE). LIKEWISE, BUYER
SHALL, AT ITS OWN EXPENSE, DEFEND, INDEMNIFY, AND HOLD
-8-
<PAGE>
HARMLESS SELLER FROM ANY AND ALL LIABILITY, COMPLAINT, CLAIM OR LEGAL ACTION
THAT MAY BE INSTITUTED BY A THIRD PARTY AGAINST SELLER ALLEGING DAMAGE, DEATH,
ILLNESS, OR INJURY RESULTING FROM OR ALLEGING A DEFECT IN THE PET BOTTLES OR
FROM CONTAMINATION OF THE CONTENTS THEREOF WHICH RESULT FROM A DEFECT OR
CONTAMINATION WHICH OCCURS AFTER THE BOTTLES LEAVE SELLER'S PLANT, SUCH AS
DURING THE HANDLING, SHIPPING, BOTTLING OR THE DISTRIBUTION OPERATION UNLESS
SUCH DEFECT OR CONTAMINATION IS IN THE PET BOTTLES AS MANUFACTURED BY SELLER,
AND BUYER SHALL ASSUME FULL RESPONSIBILITY AND EXPENSE OF ANY INVESTIGATION,
LITIGATION, NEGOTIATION, AND/OR SETTLEMENT OF ANY SUCH COMPLAINT, CLAIM OR
LEGAL ACTION BUT SUCH LIABILITY, RESPONSIBILITY AND EXPENSE SHALL NOT EXCEED
THE AMOUNT OF BUYER'S PRODUCT LIABILITY COVERAGE FOR WHICH THE INSURANCE
CARRIER MAKES PAYMENT TO BUYER (PLUS ANY APPLICABLE DEDUCTIBLE).
(B) BOTH SELLER AND BUYER AGREE THAT NEITHER WILL SETTLE OR COMPROMISE
ANY CLAIM OR SUIT HAVING ANY ADVERSE EFFECT UPON THE OTHER PARTY WITHOUT
PROVIDING THE OTHER PARTY REASONABLE ADVANCE NOTICE THEREOF. IN THE EVENT
EITHER PARTY OBJECTS TO THE PROPOSED SETTLEMENT OF THE OTHER, THE
OBJECTING PARTY MAY ASSUME FULL RESPONSIBILITY FOR THE DEFENSE OF ANY
-9-
<PAGE>
SUCH CLAIM OR SUIT AT ITS OWN EXPENSE, CONDITIONED UPON THE OBJECTING PARTY
AGREEING TO PAY FOR ALL DAMAGES OBTAINED AGAINST THE OTHER PARTY OVER AND ABOVE
THE AGREED UPON BASIS OF SETTLEMENT. IT IS EXPRESSLY UNDERSTOOD THAT EITHER
PARTY, AT ITS ELECTION, MAY, AT ITS OWN EXPENSE, RETAIN COUNSEL TO PARTICIPATE
IN THE DEFENSE OF ANY CLAIM OR SUIT BROUGHT AGAINST THE OTHER PARTY WHICH MAY
HAVE AFFECT UPON ITS RIGHT OR LIABILITIES HEREUNDER.
(C) BUYER'S EXCLUSIVE REMEDY, AND SELLER'S SOLE LIABILITY IN RESPECT TO
ANY CLAIM FOR DAMAGES FOR BREACH OF ANY WARRANTY OF SECTION 7 (OTHER THAN AS
PROVIDED WITH RESPECT TO THIRD PARTY CLAIMS COVERED BY SECTION 8(A) WHICH
SHALL BE GOVERNED EXCLUSIVELY BY SECTION 8(A)), SHALL BE LIMITED TO
REIMBURSEMENT OF THE ACTUAL COST TO BUYER, AS DETERMINED BY SELLER'S BOARD
OF DIRECTORS, OF THE PET BOTTLES CLAIMED TO BE DEFECTIVE OR OTHERWISE NOT IN
COMPLIANCE WITH SUCH WARRANTIES, OR THE REPLACEMENT THEREOF, BUT SHALL NOT
INCLUDE ANY CONSEQUENTIAL OR OTHER DAMAGES EXCEPT FOR THE COST OF REMOVING
SUCH DEFECTIVE PET BOTTLES FROM THE FACILITIES OF BUYER. No person not a
party hereto shall have any rights hereunder or with respect hereto, and
no such person shall be considered a third-party beneficiary hereof.
-10-
<PAGE>
9. Conflict With Other Agreements; Indemnity.
Buyer represents and warrants to Seller that neither the execution and
delivery of this Agreement nor the performance of the transactions contemplated
herein by Buyer will violate or conflict with (a) any provision of any contract
or agreement to which Buyer is a party or by which it is bound; or (b) any duty
to any third party. Seller represents and warrants to Buyer that neither the
execution and delivery of this Agreement nor the performance of the
transactions contemplated herein by Seller will violate or conflict
with (a) any provision of any contract or agreement to which Seller is a
party or by which it is bound; or (b) any duty to any third party. Each
party hereto shall, at its own expense, defend, indemnify and hold
harmless the other party hereto from any and all liability, complaint,
claim or legal action that may be instituted by a third party involving
a breach of the representations and warranties in this Paragraph 9.
10. Governing Law.
The terms and provisions of this Agreement shall be governed by the
substantive laws of the State of Texas, excluding any rule or principle
that might refer to or apply the substantive law of another jurisdiction.
11. Successors and Assigns.
This Agreement shall be binding upon and inure to benefit of the parties
hereto and their respective successors and assigns; provided, however, this
Agreement shall not be assigned by Buyer or Seller without the prior written
consent of the other party hereto, except that either party may effect a
corporate reorganization from a corporation to a corporate cooperative without
the need for such consent and except that Seller may
-11-
<PAGE>
grant to NationsBank of Texas, N.A. a security interest in this Agreement to
secure Seller's obligations to NationsBank of Texas, N.A. without the need for
such consent.
12. Entire Agreement; Amendments.
This Agreement constitutes the entire agreement between the parties
relating to the subject matter hereof and supersedes all prior negotiations,
understandings and agreements between the parties relating thereto. No
supplement, modification, waiver or amendment of this Agreement shall be
binding unless executed in writing by the parties, and no waiver shall be
deemed to apply to any continuing default or any subsequent breach or default,
either of a similar or different nature, unless expressly so stated in writing.
13. Notices.
All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given upon receipt
on a business day at the address for notice for the party to whom the notice
is addressed.
The addresses for notice are as follows:
(a) If to Seller:
Western Container Corporation
3801 Distribution Boulevard
Houston, Texas 77018
Attention: Robert H. Jackson
(b) If to Buyer:
Coca-Cola Bottling Co. Consolidated
1900 Rexford Rd.
Charlotte, North Carolina 28210
Attention: Michael A. Perkis
-12-
<PAGE>
The respective addresses for notice may be changed by either party hereto
by furnishing to the other party written notice in accordance with the
provision of such change of address.
14. Survival.
The obligations of Paragraphs 2,7,8 and 9 shall survive any termination
of this Agreement.
15. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
16. Exhibits and Headings.
The Exhibits attached hereto are made a part hereof. The paragraph
and section headings contained in this Agreement are for reference
purposes only and shall not affect in any manner the meaning or
interpretation of this Agreement.
17. Invalidity.
In the event any one or more provisions contained in this Agreement shall,
for any reason, be held to be invalid, illegal or unenforceable in any
respect, the validity, legality or enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby and any such invalid, illegal, or unenforceable
provision shall be construed as broadly as is permitted by law so
that only that portion which is invalid, illegal or unenforceable is
impaired.
-13-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives or officers.
[BUYER]
By: Michael A. Perkis
Title: Vice President
Date: December 23, 1993
WESTERN CONTAINER CORPORATION
By:
Title:
Date:
TREASURY BOND 7.25%
RENTAL FACTOR 3.23180%
LEASE FUNDING NO: 94007
LEASE SUPPLEMENT TO
MASTER EQUIPMENT LEASE (the "Master Lease")
BETWEEN
COCA-COLA FINANCIAL CORPORATION ("Lessor")
AND
COCA-COLA BOTTLING CO. CONSOLIDATED ("Lessee")
DATED: February 9, 1993
1. Term
The "Initial Term" shall commence on the 12th day of August, 1994
("Lease Commencement Date"); and will continue for a term of one
hundred eight (108) months ending on 12th day of August, 2003.
2. Rent
(a) BASIC RENT: As Basic Rent hereunder, Lessee shall pay an
aggregate rental charge of $2,380,887.72, payable in arrears in thirty-six
(36) quarterly installments of $66,135.77 each, beginning on November
12th and continuing on the same day of each calendar quarter thereafter
during the Initial Term, with the final such installment being due and
payable on August 12, 2003.
(b) INTERIM RENT: Lessee shall pay Lessor Interim Rent on all
payments made by Lessor for Equipment from the date of Lessor's payment,
if paid prior to the Lease Commencement Date, until the Lease
Commencement Date. Interim Rent shall be calculated from the date of
such payment on the basis of a rate which shall be the lesser of (i)
a daily rate of .0003591% per dollar so paid by Lessor, (which rate is
based on the rate implied by the Basic Rent amount set forth above),
or (ii) a per annum rate applied to the amount so paid by Lessor equal
to the "Prime Rate" as published in The Wall Street Journal on the
last business day prior to the date of such payment by Lessor. Interim
Rent shall be payable in full on the Lease Commencement Date.
(c) SUPPLEMENTAL RENT: In addition to Basic Rent and Interim Rent,
Lessee shall pay Lessor all Supplemental Rent provided for in the Master
Lease including, without limitation, all applicable sales and use taxes.
3. Location of the Equipment
The location(s) of the Equipment leased is (are) set forth on Exhibit
"A" attached hereto.
<PAGE>
4. Equipment Leased
The Equipment leased is described on each equipment invoice and
installation notification subject to this Lease Supplement. The supporting
equipment invoices, installation notifications and equipment serial
numbers are summarized on Exhibit "A" attached hereto.
5. Stipulated Loss Value
The "Stipulated Loss Value" of each item of Equipment, as of any
particular date of computation, shall be determined with reference to
Exhibit "B" attached hereto by multiplying the original cost of such item
of Equipment as stated on Exhibit "A" hereto by the percentage of the cost
of such item set forth opposite the applicable month number on Exhibit "B"
hereto. For this purpose the applicable month number means the number of
months or partial months elapsed since the Lease Commencement Date. If
only a portion of an item of Equipment is affected by any event causing
calculation of "Stipulated Loss Value" as specified in the Master Lease,
and the cost of such portion of the Equipment cannot be readily determined
from the original cost of such item set forth on Exhibit A, then the
Stipulated Loss Value for such portion of the Equipment shall be as
reasonably calculated by Lessor, with written notice of such amount
being sent to Lessee by Lessor.
6. Lease
This Lease Supplement is executed and delivered under and pursuant
to the terms of the Master Lease, and this Lease Supplement shall be
deemed to be a part of, and shall be governed by the terms and conditions
of the Master Lease. For purposes of this Lease Supplement, capitalized
terms which are used herein but which are not otherwise defined herein
shall have the meanings ascribed to such terms in the Master Lease.
<PAGE>
IN WITNESS WHEREOF, Lessee has caused this Lease Supplement to be
duly executed and delivered by its duly authorized officers, this 12th
day of August, 1994.
LESSEE:
COCA-COLA BOTTLING CO. CONSOLIDATED
(CORPORATE SEAL) By: Brenda B. Jackson
Attest: Patricia A. Gill Title: Vice President & Treasurer
Title: Asst. Secretary
Accepted in Atlanta, Georgia, this 22nd day of August, 1994.
LESSOR:
COCA-COLA FINANCIAL CORPORATION
By: Kathy L. Meyers
Title: Op. Mgr.
<PAGE>
TREASURY BOND 7.18%
RENTAL FACTOR 3.21075%
LEASE FUNDING NO: 94008
LEASE SUPPLEMENT TO
MASTER EQUIPMENT LEASE (the "Master Lease")
BETWEEN
COCA-COLA FINANCIAL CORPORATION ("Lessor")
AND
COCA-COLA BOTTLING CO. CONSOLIDATED ("Lessee")
DATED: February 9, 1993
1. Term
The "Initial Term" shall commence on the 7th day of September, 1994 ("Lease
Commencement Date"); and will continue for a term of one hundred eight (108)
months ending on 7th day of September, 2003.
2. Rent
(a) BASIC RENT: As Basic Rent hereunder, Lessee shall pay an aggregate
rental charge of $1,516,048.92, payable in arrears in thirty-six (36)
quarterly installments of $42,112.47 each, beginning on December 7th and
continuing on the same day of each calendar quarter thereafter during the
Initial Term, with the final such installment being due and payable on
September 7, 2003.
(b) INTERIM RENT: Lessee shall pay Lessor Interim Rent on all payments
made by Lessor for Equipment from the date of Lessor's payment, if paid
prior to the Lease Commencement Date, until the Lease Commencement Date.
Interim Rent shall be calculated from the date of such payment on the
basis of a rate which shall be the lesser of (i) a daily rate of .0357%
per dollar so paid by Lessor, (which rate is based on the rate implied
by the Basic Rent amount set forth above), or (ii) a per annum rate
applied to the amount so paid by Lessor equal to the "Prime Rate" as
published in The Wall Street Journal on the last business day prior to the
date of such payment by Lessor. Interim Rent shall be payable in full on the
Lease Commencement Date.
(c) SUPPLEMENTAL RENT: In addition to Basic Rent and Interim Rent, Lessee
shall pay Lessor all Supplemental Rent provided for in the Master Lease
including, without limitation, all applicable sales and use taxes.
<PAGE>
3. Location of the Equipment
The location(s) of the Equipment leased is (are) set forth on Exhibit "A"
attached hereto.
4. Equipment Leased
The Equipment leased is described on each equipment invoice and installation
notification subject to this Lease Supplement. The supporting equipment
invoices, installation notifications and equipment serial numbers are
summarized on Exhibit "A" attached hereto.
5. Stipulated Loss Value
The "Stipulated Loss Value" of each item of Equipment, as of any particular
date of computation, shall be determined with reference to Exhibit "B" attached
hereto by multiplying the original cost of such item of Equipment as stated on
Exhibit "A" hereto by the percentage of the cost of such item set forth
opposite the applicable month number on Exhibit "B" hereto. For this purpose
the applicable month number means the number of months or partial months
elapsed since the Lease Commencement Date. If only a portion of an item of
Equipment is affected by any event causing calculation of "Stipulated Loss
Value" as specified in the Master Lease, and the cost of such portion of the
Equipment cannot be readily determined from the original cost of such item
set forth on Exhibit A, then the Stipulated Loss Value for such portion of the
Equipment shall be as reasonably calculated by Lessor, with written notice of
such amount being sent to Lessee by Lessor.
6. Lease
This Lease Supplement is executed and delivered under and pursuant to the
terms of the Master Lease, and this Lease Supplement shall be deemed to be a
part of, and shall be governed by the terms and conditions of the Master
Lease. For purposes of this Lease Supplement, capitalized terms which are used
herein but which are not otherwise defined herein shall have the meanings
ascribed to such terms in the Master Lease.
<PAGE>
IN WITNESS WHEREOF, Lessee has caused this Lease Supplement to be duly
executed and delivered by its duly authorized officers, this 7th day of
September, 1994.
LESSEE:
COCA-COLA BOTTLING CO. CONSOLIDATED
(CORPORATE SEAL) By: Brenda B. Jackson
Attest: Patricia A. Gill Title: Vice President & Treasurer
Title: Asst. Secretary
Accepted in Atlanta, Georgia, this 13 day of September, 1994.
LESSOR:
COCA-COLA FINANCIAL CORPORATION
By: William Knight
Title: Vice President
<PAGE>
TREASURY BOND 7.75%
RENTAL FACTOR 3.29519%
LEASE FUNDING NO: 94009
LEASE SUPPLEMENT TO
MASTER EQUIPMENT LEASE (the "Master Lease")
BETWEEN
COCA-COLA FINANCIAL CORPORATION ("Lessor")
AND
COCA-COLA BOTTLING CO. CONSOLIDATED ("Lessee")
DATED: February 9, 1993
1. Term
The "Initial Term" shall commence on the 10th day of October, 1994 ("Lease
Commencement Date"); and will continue for a term of one hundred eight (108)
months ending on 10th day of October, 2003.
2. Rent
(a) BASIC RENT: As Basic Rent hereunder, Lessee shall pay an aggregate
rental charge of $1,934,304.48, payable in arrears in thirty-six (36) quarterly
installments of $53,730.68 each, beginning on January 10th and continuing on
the same day of each calendar quarter thereafter during the Initial Term, with
the final such installment being due and payable on October 10, 2003.
(b) INTERIM RENT: Lessee shall pay Lessor Interim Rent on all payments
made by Lessor for Equipment from the date of Lessor's payment, if paid prior
to the Lease Commencement Date, until the Lease Commencement Date. Interim
Rent shall be calculated from the date of such payment on the basis of a rate
which shall be the lessor of (i) a daily rate of .000366% per dollar so paid
by Lessor, (which rate is based on the rate implied by the Basic Rent amount
set forth above), or (ii) a per annum rate applied to the amount so paid by
Lessor equal to the "Prime Rate" as published in The Wall Street Journal on
the last business day prior to the date of such payment by Lessor. Interim
Rent shall be payable in full on the Lease Commencement Date.
(c) SUPPLEMENTAL RENT: In addition to Basic Rent and Interim Rent, Lessee
shall pay Lessor all Supplemental Rent provided for in the Master Lease
including, without limitation, all applicable sales and use taxes.
3. Location of the Equipment
The location(s) of the Equipment leased is (are) set forth on Exhibit "A"
attached hereto.
<PAGE>
4. Equipment Leased
The Equipment leased is described on each equipment invoice and installation
notification subject to this Lease Supplement. The supporting equipment
invoices, installation notifications and equipment serial numbers are
summarized on Exhibit "A" attached hereto.
5. Stipulated Loss Value
The "Stipulated Loss Value" of each item of Equipment, as of any particular
date of computation, shall be determined with reference to Exhibit "B"
attached hereto by multiplying the original cost of such item of Equipment
as stated on Exhibit "A" hereto by the percentage of the cost of such item
set forth opposite the applicable month number on Exhibit "B" hereto. For this
purpose the applicable month number means the number of months or partial
months elapsed since the Lease Commencement Date. If only a portion of an item
of Equipment is affected by any event causing calculation of "Stipulated Loss
Value" as specified in the Master Lease, and the cost of such portion of the
Equipment cannot be readily determined from the original cost of such item
set forth on Exhibit A, then the Stipulated Loss Value for such portion of
the Equipment shall be as reasonably calculated by Lessor, with written
notice of such amount being sent to Lessee by Lessor.
6. Lease
This Lease Supplement is executed and delivered under and pursuant to the terms
of the Master Lease, and this Lease Supplement shall be deemed to be a part of,
and shall be governed by the terms and conditions of the Master Lease. For
purposes of this Lease Supplement, capitalized terms which are used herein
but which are not otherwise defined herein shall have the meanings ascribed to
such terms in the Master Lease.
IN WITNESS WHEREOF, Lessee has caused this Lease Supplement to be
duly executed and delivered by its duly authorized officers, this 10th
day of October, 1994.
LESSEE:
COCA-COLA BOTTLING CO. CONSOLIDATED
(CORPORATE SEAL) By: Brenda B. Jackson
Attest: Patricia A. Gill Title: Vice President & Treasurer
Title: Asst. Secretary
Accepted in Atlanta, Georgia, this day of , 1994.
LESSOR:
COCA-COLA FINANCIAL CORPORATION
By:
Title:
<PAGE>
TREASURY BOND 7.78%
RENTAL FACTOR 3.29480%
LEASE FUNDING NO: 94010
LEASE SUPPLEMENT TO
MASTER EQUIPMENT LEASE (the "Master Lease")
BETWEEN
COCA-COLA FINANCIAL CORPORATION ("Lessor")
AND
COCA-COLA BOTTLING CO. CONSOLIDATED ("Lessee")
DATED: February 9, 1993
1. Term
The "Initial Term" shall commence on the 26th day of October, 1994 ("Lease
Commencement Date"); and will continue for a term of one hundred eight (108)
months ending on 26th day of October, 2003.
2. Rent
(a) BASIC RENT: As Basic Rent hereunder, Lessee shall pay an aggregate
rental charge of $1,099,719.00, payable in arrears in thirty-six (36) quarterly
installments of $30,547.75 each, beginning on December 7th and continuing on
the same day of each calendar quarter thereafter during the Initial Term, with
the final such installment being due and payable on October 26, 2003.
(b) INTERIM RENT: Lessee shall pay Lessor Interim Rent on all payments made
by Lessor for Equipment from the date of Lessor's payment, if paid prior to the
Lease Commencement Date, until the Lease Commencement Date. Interim Rent shall
be calculated from the date of such payment on the basis of a rate which shall
be the lessor of (i) a daily rate of .00037% per dollar so paid by Lessor,
(which rate is based on the rate implied by the Basic Rent amount set forth
above), or (ii) a per annum rate applied to the amount so paid by Lessor equal
to the "Prime Rate" as published in The Wall Street Journal on the last
business day prior to the date of such payment by Lessor. Interim Rent shall
be payable in full on the Lease Commencement Date.
(c) SUPPLEMENTAL RENT: In addition to Basic Rent and Interim Rent, Lessee
shall pay Lessor all Supplemental Rent provided for in the Master Lease
including, without limitation, all applicable sales and use taxes.
<PAGE>
3. Location of the Equipment
The location(s) of the Equipment leased is (are) set forth on Exhibit "A"
attached hereto.
4. Equipment Leased
The Equipment leased is described on each equipment invoice and installation
notification subject to this Lease Supplement. The supporting equipment
invoices, installation notifications and equipment serial numbers are
summarized on Exhibit "A" attached hereto.
5. Stipulated Loss Value
The "Stipulated Loss Value" of each item of Equipment, as of any particular
date of computation, shall be determined with reference to Exhibit "B" attached
hereto by multiplying the original cost of such item of Equipment as stated on
Exhibit "A" hereto by the percentage of the cost of such item set forth
opposite the applicable month number on Exhibit "B" hereto. For this purpose
the applicable month number means the number of months or partial months
elapsed since the Lease Commencement Date. If only a portion of an item of
Equipment is affected by any event causing calculation of "Stipulated Loss
Value" as specified in the Master Lease, and the cost of such portion of the
Equipment cannot be readily determined from the original cost of such item set
forth on Exhibit A, then the Stipulated Loss Value for such portion of the
Equipment shall be as reasonably calculated by Lessor, with written notice of
such amount being sent to Lessee by Lessor.
6. Lease
This Lease Supplement is executed and delivered under and pursuant to the
terms of the Master Lease, and this Lease Supplement shall be deemed to be a
part of, and shall be governed by the terms and conditions of the Master Lease.
For purposes of this Lease Supplement, capitalized terms which are used herein
but which are not otherwise defined herein shall have the meanings ascribed to
such terms in the Master Lease.
<PAGE>
IN WITNESS WHEREOF, Lessee has caused this Lease Supplement to be duly
executed and delivered by its duly authorized officers, this 7th day of
September, 1994.
LESSEE:
COCA-COLA BOTTLING CO. CONSOLIDATED
(CORPORATE SEAL) By: Brenda B. Jackson
Attest: Patricia A. Gill Title: Vice President & Treasurer
Title: Asst. Secretary
Accepted in Atlanta, Georgia, this day of , 1994.
LESSOR:
COCA-COLA FINANCIAL CORPORATION
By:
Title:
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements as of and for the nine months ended October 2, 1994
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-01-1995
<PERIOD-END> OCT-02-1994
<CASH> 2,200
<SECURITIES> 0
<RECEIVABLES> 7,522
<ALLOWANCES> 419
<INVENTORY> 30,320
<CURRENT-ASSETS> 62,844
<PP&E> 317,030
<DEPRECIATION> 138,022
<TOTAL-ASSETS> 660,790
<CURRENT-LIABILITIES> 62,910
<BONDS> 454,392
<COMMON> 12,055
0
0
<OTHER-SE> 39,147
<TOTAL-LIABILITY-AND-EQUITY> 660,790
<SALES> 552,927
<TOTAL-REVENUES> 552,927
<CGS> 328,979
<TOTAL-COSTS> 328,979
<OTHER-EXPENSES> 178,099
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,358
<INCOME-PRETAX> 22,965
<INCOME-TAX> 9,856
<INCOME-CONTINUING> 13,109
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (2,211)
<NET-INCOME> 10,898
<EPS-PRIMARY> 1.17
<EPS-DILUTED> 1.17
</TABLE>
