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 APRIL 4, 1999
----------------------------
Commission File Number 0-9286
------------------------------------
COCA-COLA BOTTLING CO. CONSOLIDATED
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
DELAWARE 56-0950585
- ----------------------------------------------- -------------------------------
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification Number)
organization)
4100 COCA-COLA PLAZA, CHARLOTTE, NORTH CAROLINA 28211
-----------------------------------------------------
(Address of principal executive offices) (Zip Code)
(704) 551-4400
------------------
(Registrant's telephone number, including area code)
</TABLE>
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 May 4, 1999
--------- ------------------------------
Common Stock, $1 Par Value 6,023,739
Class B Common Stock, $1 Par Value 2,341,108
<PAGE>
PART I - FINANCIAL INFORMATION
Item l. Financial Statements
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands (Except Share Data)
<TABLE>
<CAPTION>
April 4, Jan. 3, March 29,
1999 1999 1998
-------- ---------- --------------
ASSETS
<S> <C> <C> <C>
Current Assets:
Cash $ 6,654 $ 6,691 $ 5,177
Accounts receivable, trade, less allowance for
doubtful accounts of $611, $600 and $512 58,372 57,217 52,599
Accounts receivable from The Coca-Cola Company 13,279 10,091 11,594
Due from Piedmont Coca-Cola Bottling Partnership 693 1,931
Accounts receivable, other 6,371 7,997 5,983
Inventories 43,035 41,010 40,154
Prepaid expenses and other current assets 17,200 15,545 13,414
--------- --------- ----------
Total current assets 145,604 138,551 130,852
-------- -------- ---------
Property, plant and equipment, net 430,327 258,329 251,663
Leased property under capital leases, net 9,306
Investment in Piedmont Coca-Cola Bottling Partnership 61,086 62,847 61,601
Other assets 53,403 51,576 45,525
Identifiable intangible assets, less accumulated
amortization of $118,705, $116,015 and $107,937 250,483 253,156 259,620
Excess of cost over fair value of net assets of
businesses acquired, less accumulated
amortization of $31,423, $30,850 and $29,132 60,196 60,769 62,486
--------- --------- ----------
Total $1,010,405 $825,228 $811,747
========== ======== ========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands (Except Share Data)
<TABLE>
<CAPTION>
April 4, Jan. 3, March 29,
1999 1999 1998
----------- ---------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C> <C>
Current Liabilities:
Portion of long-term debt payable within one year $117,544 $ 30,115 $ 72,733
Current portion of obligations under capital leases 4,176
Accounts payable and accrued liabilities 69,082 72,623 65,609
Accounts payable to The Coca-Cola Company 8,103 5,194 7,639
Due to Piedmont Coca-Cola Bottling Partnership 435
Accrued compensation 5,897 10,239 3,297
Accrued interest payable 9,715 15,325 9,515
---------- --------- ----------
Total current liabilities 214,517 133,931 158,793
Deferred income taxes 118,247 120,659 110,142
Deferred credits 4,319 4,838 6,545
Other liabilities 59,695 58,780 56,275
Obligations under capital leases 5,083
Long-term debt 599,329 491,234 475,272
---------- --------- --------
Total liabilities 1,001,190 809,442 807,027
--------- --------- --------
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-9,086,113, 9,086,113 and 10,107,421 shares 9,086 9,086 10,107
Class B Common Stock, $1 par value:
Authorized-10,000,000 shares;
Issued-2,969,222, 2,969,222 and 1,947,914 shares 2,969 2,969 1,948
Class C Common Stock, $1 par value:
Authorized-20,000,000 shares; Issued-None
Capital in excess of par value 92,618 94,709 100,983
Accumulated deficit (34,204) (29,724) (47,064)
------------ --------- ---------
70,469 77,040 65,974
Less-Treasury stock, at cost:
Common - 3,062,374 shares 60,845 60,845 60,845
Class B Common - 628,114 shares 409 409 409
-------------- ----------- -----------
Total shareholders' equity 9,215 15,786 4,720
------------- --------- ----------
Total $1,010,405 $825,228 $811,747
========== ======== ========
</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>
First Quarter
-----------------------------
1999 1998
---------- ----------
Net sales (includes sales to Piedmont of $15,181 and
<S> <C> <C>
$12,203) $ 220,263 $ 203,331
Cost of sales, excluding depreciation shown below
(includes $13,604 and $10,835 related to sales to Piedmont) 128,111 118,397
--------- ---------
Gross margin 92,152 84,934
---------- ----------
Selling expenses, excluding depreciation shown below 49,555 50,698
General and administrative expenses 18,669 15,781
Depreciation expense 14,648 8,780
Amortization of goodwill and intangibles 3,262 3,175
----------- -----------
Income from operations 6,018 6,500
Interest expense 11,695 9,258
Other income (expense), net (1,215) (1,157)
------------ ----------
Income (loss) before income taxes (6,892) (3,915)
Income taxes (benefit) (2,412) (1,453)
----------- ----------
Net income (loss) $ (4,480) $ (2,462)
=========== ===========
Basic net income (loss) per share $ (.54) $ (.29)
Diluted net income (loss) per share $ (.53) $ (.29)
Weighted average number of common
shares outstanding 8,365 8,365
Weighted average number of common
shares outstanding - assuming dilution 8,489 8,493
Cash dividends per share
Common Stock $ .25 $ .25
Class B Common Stock $ .25 $ .25
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
In Thousands
<TABLE>
<CAPTION>
Capital
Class B in
Common Common Excess of Accumulated Treasury
Stock Stock Par Value Deficit Stock
--------- --------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance on
December 28, 1997 $ 10,107 $ 1,948 $ 103,074 $ (44,602) $ 61,254
Net loss (2,462)
Cash dividends
paid (2,091)
-------- -------- -------- --------- ---------
Balance on
March 29, 1998 $ 10,107 $ 1,948 $ 100,983 $ (47,064) $ 61,254
======== ======== ======== ========= =========
Balance on
January 3, 1999 $ 9,086 $ 2,969 $ 94,709 $ (29,724) $ 61,254
Net loss (4,480)
Cash dividends
paid (2,091)
--------- ---------- ---------- ---------- ----------
Balance on
April 4, 1999 $ 9,086 $ 2,969 $ 92,618 $ (34,204) $ 61,254
========= ======== ========= ========== ==========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
In Thousands
<TABLE>
<CAPTION>
First Quarter
---------------------------
1999 1998
---------- -----------
Cash Flows from Operating Activities
<S> <C> <C>
Net income (loss) $ (4,480) $ (2,462)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation expense 14,648 8,780
Amortization of goodwill and intangibles 3,262 3,175
Deferred income taxes (benefit) (2,412) (1,453)
Losses on sale of property, plant and equipment 725 729
Amortization of debt costs 150 149
Amortization of deferred gain related to terminated
interest rate swaps (141) (141)
Undistributed losses of Piedmont Coca-Cola Bottling
Partnership 1,761 1,725
Increase in current assets less current liabilities (18,108) (11,402)
Increase in other noncurrent assets (1,978) (2,556)
(Decrease) increase in other noncurrent liabilities 804 (173)
Other (126) 3
----------- -------------
Total adjustments (1,415) (1,164)
--------- -----------
Net cash used in operating activities (5,895) (3,626)
--------- -----------
Cash Flows from Financing Activities
Proceeds from the issuance of long-term debt 108,095
Increase in current portion of long-term debt 87,429 60,733
Payments on long-term debt (18,517)
Cash dividends paid (2,091) (2,091)
Payments on capital lease obligations (1,045)
Proceeds from interest rate swap termination 6,480
Debt fees paid (185) (11)
Other (268) 82
---------- ----------
Net cash provided by financing activities 191,935 46,676
-------- --------
Cash Flows from Investing Activities
Additions to property, plant and equipment (186,101) (8,906)
Proceeds from the sale of property, plant and equipment 41 10
Acquisition of companies, net of cash acquired (17) (33,404)
--------- --------
Net cash used in investing activities (186,077) (42,300)
-------- --------
Net increase (decrease) in cash (37) 750
Cash at beginning of period 6,691 4,427
---------- ---------
Cash at end of period $ 6,654 $ 5,177
========= =========
</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 majority 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.
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 3, 1999 filed
with the Securities and Exchange Commission.
Certain prior year amounts have been reclassified to conform to current year
classifications.
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
2. 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 portion of the soft drink
products to Piedmont at cost 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>
First Quarter
---------------------
In Thousands 1999 1998
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 63,326 $ 57,358
Gross margin 27,651 24,725
Income (loss) from operations (248) (219)
Net loss (3,522) (3,450)
3. Inventories
Inventories are summarized as follows:
Apr. 4, Jan. 3, Mar. 29,
In Thousands 1999 1999 1998
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Finished products $27,125 $26,300 $24,066
Manufacturing materials 11,340 10,382 12,684
Plastic pallets and other 4,570 4,328 3,404
--------- --------- ---------
Total inventories $43,035 $41,010 $40,154
======= ======= =======
</TABLE>
Substantially all merchandise inventories are valued by the LIFO method. The
amounts included above for inventories valued by the LIFO method were greater
than replacement or current cost by approximately $3.2 million, $3.2 million and
$2.7 million on April 4, 1999, January 3, 1999 and March 29, 1998, respectively,
as a result of inventory premiums associated with certain acquisitions.
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
4. Property, Plant and Equipment
The principal categories and estimated useful lives of property, plant and
equipment were as follows:
<TABLE>
<CAPTION>
April 4, Jan. 3, March 29, Estimated
In Thousands 1999 1999 1998 Useful Lives
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Land $ 11,781 $ 11,781 $ 9,685
Buildings 81,566 81,527 80,807 10-50 years
Machinery and equipment 88,933 84,047 79,234 5-20 years
Transportation equipment 99,053 60,620 57,794 4-10 years
Furniture and fixtures 27,978 26,395 26,081 7-10 years
Vending equipment 272,508 152,163 143,997 6-13 years
Leasehold and land improvements 34,203 33,894 30,395 5-20 years
Construction in progress 22,556 4,532 5,867
- ----------------------------------------------------------------------------------------------------
Total property, plant and equipment, at cost 638,578 454,959 433,860
Less: Accumulated depreciation 208,251 196,630 182,197
- ----------------------------------------------------------------------------------------------------
Property, plant and equipment, net $430,327 $258,329 $251,663
- ----------------------------------------------------------------------------------------------------
</TABLE>
On January 15, 1999, the Company purchased approximately $155 million of
equipment (principally vehicles and vending equipment) previously leased under
various operating lease agreements. The assets purchased will continue to be
used in the distribution and sale of the Company's products and will be
depreciated over their remaining useful lives, which range from three years to
12.5 years. The Company used a combination of its revolving credit facility and
its informal lines of credit with certain banks to finance this purchase.
<TABLE>
<CAPTION>
5. Leased Property Under Capital Leases
The category and terms of the capital leases were as follows:
<S> <C>
In Thousands April 4, 1999 Terms
- -------------------------------------------------------------------------------------------------
Transportation equipment $10,433 1-4 years
Less: Accumulated amortization 1,127
-------
Leased property under capital leases, net $ 9,306
=======
</TABLE>
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
6. Long-Term Debt
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
Fixed(F) or
Interest Variable Interest April 4, Jan. 3, Mar. 29,
In Thousands Maturity Rate (V)Rate Paid 1999 1999 1998
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lines of Credit 2002 5.13% - V Varies $177,014 $36,400 $20,400
5.25%
Revolving Credit 2002 5.17% V Varies 85,000
Term Loan Agreement 2004 5.76% V Varies 85,000 85,000 85,000
Term Loan Agreement 2005 5.76% V Varies 85,000 85,000 85,000
Medium-Term Notes 1998 6.28% V Quarterly 10,000
Medium-Term Notes 1998 10.05% F Semi- 2,000
annually
Medium-Term Notes 1999 7.99% F Semi- 28,585 28,585
annually
Medium-Term Notes 2000 10.00% F Semi- 25,500 25,500 25,500
annually
Medium-Term Notes 2002 8.56% F Semi- 47,000 47,000 47,000
annually
Debentures 2007 6.85% F Semi- 100,000 100,000 100,000
annually
Debentures 2009 7.20% F Semi- 100,000 100,000 100,000
annually
Other notes payable 1999 - 7.33% - F Varies 12,359 13,864 44,520
2001 10.00%
---------------------------------------
716,873 521,349 548,005
Less: Portion of long-term
debt payable within one year 117,544 30,115 72,733
- ----------------------------------------------------------------------------------------------------------
Long-term debt $599,329 $491,234 $475,272
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
6. Long-Term Debt (cont.)
It is the Company's intent to renew its lines of credit 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.
On October 12, 1994, a $400 million shelf registration for debt and equity
securities filed with the Securities and Exchange Commission became effective
and the securities thereunder became available for issuance. On November 1,
1995, the Company issued $100 million of 6.85% debentures due 2007 pursuant
to such registration. In July 1997, the Company issued $100 million of 7.20%
debentures due 2009. The net proceeds from these issuances were used for
refinancing a portion of existing public debt with the remainder used to
repay other debt. On January 22, 1999, the Company filed a new $800 million
shelf registration for debt and equity securities (which includes $200
million of unused availability from the prior shelf registration).
The Company has guaranteed a portion of the debt for two cooperatives in
which the Company is a member. The amounts guaranteed were $32.8 million,
$30.7 million and $30.3 million as of April 4, 1999, January 3, 1999 and
March 29, 1998, respectively.
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
7. Derivative Financial Instruments
The Company uses derivative financial instruments to modify risk from
interest rate fluctuations in its underlying debt. The Company has
historically altered 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. These
derivative financial instruments are not used for trading purposes.
The Company had weighted average interest rates for its debt portfolio of
approximately 6.4%, 7.3% and 7.1% as of April 4, 1999, January 3, 1999 and
March 29, 1998, respectively. The Company's overall weighted average interest
rate on its long-term debt decreased from an average of 7.1% during the first
quarter of 1998 to an average of 6.5% during the first quarter of 1999. After
taking into account the effect of all of the interest rate swap activities,
approximately 48%, 23% and 21% of the total debt portfolio was subject to
changes in short-term interest rates as of April 4, 1999, January 3, 1999 and
March 29, 1998, respectively.
A rate increase of 1% on the floating rate component of the Company's debt
would have increased interest expense for the first quarter of 1999 by
approximately $0.7 million and the net loss for the first quarter ended
April 4, 1999 would have been increased by approximately $0.4 million.
Derivative financial instruments were as follows:
<TABLE>
<CAPTION>
April 4, 1999 January 3, 1999 March 29, 1998
-------------------------------------------------------------------------
Remaining Remaining Remaining
In Thousands Amount Term Amount Term Amount Term
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest rate swaps-floating $ 60,000 4.5 years $ 60,000 4.75 years $ 60,000 5.5 years
Interest rate swaps-fixed 60,000 4.5 years 60,000 4.75 years 60,000 5.5 years
Interest rate swaps-fixed 50,000 5.75 years 50,000 6 years 50,000 6.75 years
Interest rate cap 35,000 1.25 years 35,000 1.5 years 35,000 2.25 years
</TABLE>
In January 1998, the Company terminated two floating rate interest swaps with
a total notional amount of $100 million. The gain of $6.5 million resulting
from this termination will be amortized over 11.5 years, the remaining term
of the initial swap agreements.
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
7. Derivative Financial Instruments (cont.)
The carrying amounts and fair values of the Company's balance sheet and
off-balance-sheet instruments were as follows:
<TABLE>
<CAPTION>
April 4, 1999 January 3, 1999 March 29, 1998
----------- ---------------- ----------------
Carrying Fair Carrying Fair Carrying Fair
In Thousands Amount Value Amount Value Amount Value
- -------------------------------------------------------------------------------------------------------
Balance Sheet Instruments
<S> <C> <C> <C> <C> <C> <C>
Public debt $272,500 $282,991 $301,085 $312,118 $313,085 $326,544
Non-public variable rate
long-term debt 432,014 432,014 206,400 206,400 190,400 190,400
Non-public fixed rate
long-term debt 12,359 13,012 13,864 14,476 44,520 45,456
Off-Balance-Sheet Instruments
Interest rate swaps (225) (2,030) (2,450)
Interest rate cap 2 10 41
</TABLE>
The fair values of the interest rate swaps at April 4, 1999, January 3, 1999
and March 29, 1998 represent the estimated amounts the Company would have had
to expense to terminate these agreements. The fair values of the interest
rate cap at April 4, 1999, January 3, 1999 and March 29, 1998 represent the
estimated amount the Company would have received upon termination of this
agreement.
<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 effect
of acquisition, were as follows:
<TABLE>
<CAPTION>
First Quarter
-------------------------
In Thousands 1999 1998
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Accounts receivable, trade, net $ (1,155) $ 3,286
Accounts receivable, The Coca-Cola Company (3,188) (6,904)
Accounts receivable, other 1,626 2,820
Inventories (2,025) (1,228)
Prepaid expenses and other current assets (1,655) (518)
Accounts payable and accrued liabilities (3,541) (6,146)
Accounts payable, The Coca-Cola Company 2,909 3,531
Accrued compensation (4,342) (1,798)
Accrued interest payable (5,610) (4,523)
Due to (from) Piedmont Coca-Cola Bottling Partnership (1,127) 78
--------- -----------
Increase in current assets less current liabilities $(18,108) $(11,402)
======== ========
</TABLE>
9. Subsequent Event
On April 26, 1999, the Company issued $250 million of 10-year debentures at a
fixed interest rate of 6.375% under the Company's $800 million shelf
registration filed in January 1999. The Company subsequently entered into
10-year floating interest rate swap agreements for $100 million related to these
debentures. The proceeds from the issuance of these debentures were used to
reduce amounts outstanding under the revolving credit facility and the informal
lines of credit.
<PAGE>
10. Earnings Per Share
The following table sets forth the computation of basic net income per share and
diluted net income per share.
<TABLE>
<CAPTION>
First Quarter
----------------------
In Thousands (Except Per Share Data) 1999 1998
- --------------------------------------------------------------------------------
Numerator:
- ----------
<S> <C> <C>
Numerator for basic net income and diluted net income $(4,480) $(2,462)
Denominator:
- ------------
Denominator for basic net income per share - weighted
average common shares 8,365 8,365
Effect of dilutive securities - Stock options 124 128
------ -------
Denominator for diluted net income per share-
adjusted weighted average common shares 8,489 8,493
====== =======
Basic net income per share $ (.54) $ (.29)
======= =======
Diluted net income per share $ (.53) $ (.29)
======= =======
</TABLE>
11. Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
<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 three months of 1999 compared to the first three months
of 1998 and changes in financial condition from March 29, 1998 and January 3,
1999 to April 4, 1999.
The Company reported a net loss of $4.5 million or $.54 per share for the first
quarter of 1999 compared with a net loss of $2.5 million or $.29 per share for
the same period in 1998. The first quarter of 1999 was highlighted by volume
growth of 6%, significantly outpacing the U.S. soft drink industry average
growth. This growth in the first quarter is on top of 11% volume growth for all
of 1998.
The decline in earnings from the first quarter of the prior year reflects the
Company's continued investment in its selling infrastructure including vehicles,
sales personnel, cold drink equipment and the additional support personnel
required to service the cold drink equipment. Expenses related to the continued
infrastructure investments are recognized throughout the year although the
benefit from these investments is disproportionately realized during the
seasonally higher volume periods in the second and third quarters. To the extent
the Company continues to make such infrastructure investments, earnings in the
lower volume periods of the fiscal year, typically the first and fourth
quarters, may be lower than prior periods.
The Company signed an Agreement and Plan of Merger effective March 26, 1999 to
acquire a Coca-Cola bottler with territory covering certain parts of South
Carolina. The acquisition is expected to close during the second quarter of
1999.
The results for interim periods are not necessarily indicative of the results to
be expected for the year due to seasonal factors.
RESULTS OF OPERATIONS:
The first quarter of 1999 was highlighted by a sales volume increase of 6%, a
net selling price increase of 1.5% and 8% growth in gross margin. Net sales for
the first quarter of 1999 increased 8% from the first quarter of 1998 driven by
the volume and selling price increases. The strong volume growth of 6%, on top
of 11% volume growth in 1998, was attributable to focused marketing initiatives
and the additional cold drink equipment the Company has placed.
<PAGE>
The sales volume growth was highlighted by continued strong performance from
Sprite, with volume growth of 11% for the quarter. Non-carbonated beverages
experienced outstanding volume growth of 70% from the first quarter of 1998. The
growth in non-carbonated beverages, including POWERaDE, Fruitopia, Cool from
Nestea and bottled water, is on top of 70% volume growth for all of 1998.
Cost of sales on a per case basis increased approximately 2.5% over the same
period in 1998. The increase in cost of sales is primarily due to price
increases for concentrate the Company purchases from The Coca-Cola Company and
other beverage companies.
Gross margin increased by 8% primarily due to the increased volume and net
selling price. Gross margin as a percentage of sales was unchanged from the
first quarter of 1998.
Selling expenses for the first quarter of 1999 decreased 2% over the first
quarter of 1998. The decrease in selling expenses resulted from a reduction in
lease expense and an increase in marketing funding support, offset somewhat by
increased employment costs reflecting additional sales personnel added to
support the Company's growth, higher sales commission costs related to the sales
volume increase, increased marketing costs and increased expenses related to
sales development programs.
During January 1999, the Company purchased $155 million of equipment that had
previously been leased. The Company used a combination of its revolving credit
facility and its informal lines of credit with certain banks to finance this
purchase. As a result of this transaction, lease expense for the first quarter
of 1999 declined by $3.4 million or 57%. Additionally, the terms of certain
leases that were previously recorded as operating leases were changed during the
first quarter of 1999. Due to the changes in the terms of these leases, they are
now accounted for as capital leases.
The Company relies extensively on advertising and sales promotion in the
marketing of its products. The Coca-Cola Company and other beverage companies
that supply concentrate, syrups and finished products to the Company make
substantial advertising expenditures to promote sales in the local territories
served by the Company. The Company also benefits from national advertising
programs conducted by The Coca-Cola Company and other beverage companies.
Certain of the marketing expenditures by The Coca-Cola Company and other
beverage companies are made pursuant to annual arrangements. Although The
Coca-Cola Company has advised the Company that it intends to provide marketing
funding support in 1999, it is not obligated to do so under the Company's Master
Bottle Contract. Also, The Coca-Cola Company has agreed to provide additional
marketing funding under a multi-year program to support the Company's cold drink
infrastructure. Total marketing funding and infrastructure support from The
Coca-Cola Company and other beverage companies in the first quarter of 1999 and
1998 was $12.0 million and $9.6 million, respectively.
<PAGE>
General and administrative expenses increased by 18% primarily due to wage
increases necessary to compete in highly competitive labor markets, management
incentive programs that were not in place during the first quarter of 1998 and
costs associated with additional administrative personnel to support the
Company's accelerated growth. The increase in general and administrative
expenses reflects the Company's commitment to ensuring that the appropriate
administrative infrastructure is available to support the Company's accelerated
growth objectives.
Depreciation expense increased by $5.9 million or 67% from the first quarter of
1998 to the first quarter of 1999. This increase was due primarily to the
purchase of previously leased equipment, as discussed above, and to the
significant investments the Company continues to make in cold drink equipment.
Depreciation expense is recognized on a straight-line basis throughout the year
while the revenue generated by these cold drink assets tends to be more
seasonal, with the majority of the revenue realized in the second and third
quarters.
Interest expense of $11.7 million increased by $2.4 million or 26% from the
first quarter of 1998. The increase is due to additional borrowings used
primarily to purchase previously leased equipment and the acquisition of two
Coca-Cola bottlers during 1998. The Company's overall weighted average interest
rate decreased from an average of 7.1% during the first quarter of 1998 to an
average of 6.5% during the first quarter of 1999.
CHANGES IN FINANCIAL CONDITION:
Working capital decreased $73.5 million from January 3, 1999 and decreased $41.0
million from March 29, 1998 to April 4, 1999. The decrease from January 3, 1999
is primarily attributable to increases in the current portion of long-term debt
of $87.4 million and the current portion of obligations under capital leases of
$4.2 million, offset by a decrease in accounts payable and accrued liabilities
of $3.5 million, a decrease in accrued compensation of $4.3 million and a
decrease in accrued interest of $5.6 million. The change in accrued compensation
relates primarily to the timing of management incentive payments. The change in
accrued interest relates to the timing of interest payments on the Company's
long-term debt.
Working capital decreased by $41.0 million from March 29, 1998 due to increases
in the current portion of long-term debt of $44.8 million, the current portion
of obligations under capital leases of $4.2 million and in accounts payable and
accrued liabilities of $3.5 million. The decrease in working capital from March
29, 1998 is offset somewhat by increases in trade accounts receivable of $5.8
million and an increase in prepaid expenses and other current assets of $3.8
million. The increase in trade accounts receivable is due to the sales volume
growth over the prior year. The increase in prepaid expenses and other current
assets is due to the timing of advance rental payments, higher estimated federal
income tax payments and an increase of marketing merchandise.
<PAGE>
Capital expenditures in the first quarter of 1999 were $186.1 million compared
to $8.9 million in the first quarter of 1998. The significant increase in
capital expenditures in the first quarter of 1999 relates primarily to the
purchase of $155 million of previously leased equipment. In addition, the
Company is purchasing its fleet requirements in 1999, whereas in 1998, the
Company leased its additional fleet requirements.
Long-term debt increased by $124.1 million from March 29, 1998 and $108.1
million from January 3, 1999. The increases from March 29,1998 and January 3,
1999 are primarily due to the purchase of $155 million of leased equipment
previously discussed.
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 and,
to the extent that any borrowings under the revolving credit facility and the
informal lines of credit do not exceed the amount available under the Company's
$170 million revolving credit facility, they are classified as noncurrent
liabilities. As of April 4, 1999, the Company had $85.0 million outstanding
under the revolving credit facility and $177.0 million outstanding under the
informal lines of credit. Since the amounts outstanding under the revolving
credit facility and the informal lines of credit exceed $170 million, the excess
amount of $92.0 million is classified as a current liability.
On April 26, 1999 the Company issued $250 million of 10-year debentures at a
fixed interest rate of 6.375% under the Company's $800 million shelf
registration filed in January 1999. The Company subsequently entered into
10-year floating interest rate swap agreements for $100 million. The proceeds
from the issuance of these debentures were used to reduce the amounts
outstanding under the revolving credit facility and the informal lines of
credit.
As of April 4, 1999 the debt portfolio had a weighted average interest rate of
approximately 6.4% and approximately 48% of the total portfolio of $716.9
million was subject to changes in short-term interest rates. On April 26, 1999
after the Company issued $250 million of 10-year debentures, approximately 27%
of the total debt portfolio was subject to changes in short-term interest rates.
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 bottling territories on an ongoing basis.
YEAR 2000
Since many computer systems and other equipment with embedded chips or
processors (collectively, "business systems") use only two digits to represent
the year, these business systems may be unable to process accurately certain
data before, during or after the year 2000. As a result, business and
governmental entities are at risk for possible miscalculations or systems
failures causing disruptions in their business operations. This is commonly
known as the Year 2000 issue. The Year 2000 issue can arise at any point in the
Company's supply, manufacturing, distribution and financial chains.
<PAGE>
The Company began work on the Year 2000 compliance issue in 1997. The scope of
the project includes: ensuring the compliance of all applications, operating
systems and hardware on mainframe, PC and LAN platforms; addressing issues
related to non-IT embedded software and equipment and addressing the compliance
of key suppliers and customers. The project has four phases: assessment of
systems and equipment affected by the Year 2000 issue; definition of strategies
to address affected systems and equipment; remediation or replacement of
affected systems and equipment and testing that each is Year 2000 compliant.
With respect to ensuring the compliance of all applications, operating systems
and hardware on the Company's various computer platforms, the assessment and
definition of strategies phases have been completed. It is estimated that 90% of
the remediation or replacement phase has been completed with the balance of this
phase expected to be completed by the end of August 1999. The testing phase has
begun and is expected to be completed by the end of the third quarter of 1999.
Approximately 80% of the internal application development resources were
committed to Year 2000 remediation efforts in 1997, 1998 and the first quarter
of 1999. The Company expects that approximately 70% of its internal application
development resources will be committed to this effort in the second quarter of
1999. The Company has also utilized contract programmers to identify Year 2000
noncompliance problems and modify code.
With respect to addressing issues related to non-IT embedded software and
equipment, which principally exists in the Company's four manufacturing plants,
the assessment and definition of strategies phases have been completed.
Approximately 80% of the remediation or replacement phase has been completed
with the balance of this phase expected to be completed by the middle of the
third quarter of 1999. Testing is expected to be completed by the end of third
quarter of 1999.
The Company relies on third party suppliers for raw materials, water, utilities,
transportation and other key services. Interruption of supplier operations due
to Year 2000 issues could affect the Company operations. We have initiated
efforts to evaluate the status of our most critical suppliers' progress. This
process of evaluating our critical suppliers is scheduled for completion by
mid-1999. Options to reduce the risks of interruption due to supplier failures
include identification of alternate suppliers and accumulation of inventory to
assure production capability, where feasible or warranted. These activities are
intended to provide a means of managing risk, but cannot eliminate the potential
for disruption due to third party failure.
The Company is also dependent upon our customers for sales and cash flow. Year
2000 interruptions in our customers' operations could result in reduced sales,
increased inventory or receivable levels, increased bad debt write-offs and cash
flow reductions. While these events are possible, the Company's customer base is
broad enough to minimize somewhat the effects of a single occurrence. The
Company's evaluation of
<PAGE>
critical customers' progress toward mitigating Year 2000 exposures is ongoing.
However, the Company expects to complete its evaluation of the majority of its
critical customers by mid-1999.
The Company has begun the process of developing contingency plans for those
areas that are critical to our business. These contingency plans will be
designed to mitigate serious disruptions to our business flow beyond the end of
1999, where possible. The major efforts related to contingency planning will
occur in the first nine months of 1999.
It is currently estimated that the aggregate cost of the Company's Year 2000
efforts will be approximately $4.5 million to $5.5 million, of which
approximately $4.0 million has been spent to date. These costs are being
expensed as they are incurred and are being funded through operating cash flow.
These costs do not include any costs associated with the implementation of
contingency plans, which are in the process of being developed. The costs
associated with the replacement of computerized systems, hardware or equipment
(currently estimated to be $4.5 million), substantially all of which would be
capitalized, are not included in the above estimates.
The Company's Year 2000 program is an ongoing process and the estimates of costs
and completion dates for various components of the program described above are
subject to change.
The failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
results of operations, liquidity and financial condition. Due to the general
uncertainty inherent in the Year 2000 problem, resulting in part from the
uncertainty of the Year 2000 readiness of third-party suppliers and customers,
the Company is unable to determine at this time whether the consequences of Year
2000 failures will have a material impact on the Company's results of
operations, liquidity or financial condition.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, as well as information included in, or
incorporated by reference from, future filings by the Company with the
Securities and Exchange Commission and information contained in written
material, press releases and oral statements issued by or on behalf of the
Company, contains, or may contain, certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Such "forward- looking statements"
include information relating to, among other matters, the Company's future
prospects, developments and business strategies for its operations. These
forward-looking statements are identified by their use of terms and phrases such
as "expect", "estimate", "project", "believe" and similar terms and phrases.
Such forward-looking statements are contained in various sections of this
Quarterly Report.
<PAGE>
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and perception of historical trends, current
conditions, expected future developments and other factors they believe are
appropriate under the circumstances, and involve risks and uncertainties that
may cause actual future activities and results of operations to be materially
different from that suggested or described in this Quarterly Report or in such
other documents. These risks include, but are not limited to (A) risks
associated with any changes in the historical level of marketing funding support
which the Company receives from The Coca-Cola Company, (B) risks associated with
interruptions in the Company's business operations as a result of any failure to
adequately correct the Year 2000 computer problem in any systems or equipment of
the Company or one of its major suppliers or customers and (C) other risks
detailed from time to time in the Company's filings with the Securities and
Exchange Commission. You are cautioned that any such statements are not
guarantees of future performance. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary from those expected, estimated or projected.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
1.1 Underwriting Agreement dated April 21, 1999, among the
Company, Salomon Smith Barney Inc. and other parties named
within.
4.1 Form of the Company's 6.375% Debentures due 2009.
27 Financial data schedule for period ended April 4, 1999.
(b) Reports on Form 8-K
A current report on Form 8-K was filed on February 19, 1999 related to
the Company's purchase of equipment previously leased under various
operating lease agreements.
<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.
COCA-COLA BOTTLING CO. CONSOLIDATED
(REGISTRANT)
Date: May 11, 1999 By: /s/ David V. Singer
----------------------------------------
David V. Singer
Principal Financial Officer of the Registrant
and
Vice President - Chief Financial Officer
Coca-Cola Bottling Co. Consolidated
UNDERWRITING AGREEMENT
New York, New York
April 21, 1999
To the Representatives named in Schedule I hereto of the Underwriters named in
Schedule II hereto
Dear Sirs:
Coca-Cola Bottling Co. Consolidated, a Delaware corporation (the
"Company"), proposes to sell to the underwriters named in Schedule II hereto
(the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, (1) the principal amount, if any, of its debt securities
(including debt securities convertible into common stock or preferred stock of
the Company ("Convertible Debt") identified in Schedule I hereto (such debt
securities, including Convertible Debt, the "Debt Securities"), to be issued
under an indenture (the "Indenture") dated as of July 20, 1994, between the
Company and NationsBank of Georgia, National Association, as trustee (the
"Trustee"), as supplemented and restated by a Supplemental Indenture dated March
3, 1995 between the Company and the Trustee (all references herein to the
"Indenture" are to the Indenture as so supplemented, and all references to the
"Trustee" are to Citibank, N.A., which succeeded to all of the rights, powers,
duties and obligations of the initial Trustee under the Indenture by agreement
of all parties, effective September 15, 1995); (2) the shares of common stock,
$1.00 par value, of the Company, if any, identified in Schedule I hereto (the
Common Stock"); (3) the shares of Class C common stock, $1.00 par value, of the
Company, if any, identified in Schedule I hereto (the "Class C Common Stock");
(4) the shares of preferred stock, $0.01 par value, of the Company, if any,
identified in Schedule I hereto (the "Preferred Stock"); (5) the shares of
<PAGE>
2
convertible preferred stock, $100.00 par value, of the Company, if any,
identified in Schedule I hereto (the "Convertible Preferred Stock"); and/or (6)
the shares of non-convertible preferred stock, $100.00 par value, of the
Company, if any, identified in Schedule I hereto (the "Nonconvertible Preferred
Stock"). The Debt Securities, Common Stock, Class C Common Stock, Preferred
Stock, Convertible Preferred Stock, and Nonconvertible Preferred Stock may be
sold either separately or as units (the "Units") together with any of the
foregoing. The Debt Securities, Common Stock, Class C Common Stock, Preferred
Stock, Convertible Preferred Stock, and Nonconvertible Preferred Stock described
in Schedule I hereto shall collectively be referred to herein as the
"Securities". The Common Stock, Class C Common Stock, Preferred Stock,
Convertible Preferred Stock, and Nonconvertible Preferred Stock described in
Schedule I hereto shall collectively be referred to herein as the "Equity
Securities." If the firm or firms listed in Schedule II hereto include only the
firm or firms listed in Schedule I hereto, then the terms "Underwriters" and
"Representatives", as used herein, shall each be deemed to refer to such firm or
firms.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in paragraph (c)
hereof.
(a) If the offering of the Securities is a Delayed Offering (as
specified in Schedule I hereto), paragraph (i) below is applicable and,
if the offering of the Securities is a Non-Delayed Offering (as so
specified), paragraph (ii) below is applicable.
(i) The Company meets the requirements for the use
of Form S-3 under the Securities Act of 1933 (the "Act")
and has filed with the Securities and Exchange Commission
(the "Commission") a registration statement (the file
number of which is set forth in Schedule I hereto) on such
Form, including a basic prospectus, for registration under
the Act of the offering and sale of the Securities. The
Company may have filed one or more amendments thereto, and
may have used a Preliminary Final Prospectus, each of
which has previously been furnished to you. Such
registration statement, as so amended, has become
effective. The offering of the Securities is a Delayed
Offering and,
<PAGE>
3
although the Basic Prospectus may not include all the
information with respect to the Securities and the
offering thereof required by the Act and the rules
thereunder to be included in the Final Prospectus, the
Basic Prospectus includes all such information required by
the Act and the rules thereunder to be included therein as
of the Effective Date. The Company will next file with the
Commission pursuant to Rules 415 and 424(b)(2) or (5) a
final supplement to the form of prospectus included in
such registration statement relating to the Securities and
the offering thereof. As filed, such final prospectus
supplement shall include all required information with
respect to the Securities and the offering thereof and,
except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific
additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary
Final Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein.
(ii) The Company meets the requirements
for the use of Form S-3 under the Act and has filed with
the Commission a registration statement (the file number
of which is set forth in Schedule I hereto) on such Form,
including a basic prospectus, for registration under the
Act of the offering and sale of the Securities. The
Company may have filed one or more amendments thereto,
including a Preliminary Final Prospectus, each of which
has previously been furnished to you. The Company will
next file with the Commission either (x) a final
prospectus supplement relating to the Securities in
accordance with Rules 430A and 424(b)(1) or (4), or (y)
prior to the effectiveness of such registration statement,
an amendment to such registration statement, including the
form of final prospectus supplement. In the case of clause
(x), the Company has included
<PAGE>
4
in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder
to be included in the Final Prospectus with respect to the
Securities and the offering thereof. As filed, such final
prospectus supplement or such amendment and form of final
prospectus supplement shall contain all Rule 430A
Information, together with all other such required
information, with respect to the Securities and the
offering thereof and, except to the extent the
Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished
to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond
that contained in the Basic Prospectus and any Preliminary
Final Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance Rule 424(b) and on the Closing Date, the Final Prospectus
(and any supplement thereto) will, comply in all material respects with
the applicable requirements of the Act, the Securities Exchange Act of
1934 (the "Exchange Act") and the Trust Indenture Act of 1939 (the
"Trust Indenture Act") and the respective rules thereunder; on the
Effective Date, the Registration Statement did not or will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; on the Effective Date and on the
Closing Date the Indenture did or will comply in all material respects
with the requirements of the Trust Indenture Act and the rules
thereunder; and, on the Effective Date, the Final Prospectus, if not
filed pursuant to Rule 424(b), did not or will not, and on the date of
any filing pursuant to Rule 424(b) and on the Closing Date, the Final
Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which
<PAGE>
5
they were made, not misleading; provided, however, that the Company
makes no representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee or (ii) the information contained in or omitted from the
Registration Statement or the Final Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration Statement
or the Final Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective and each date after the
date hereof on which a document incorporated by reference in the
Registration Statement is filed. "Execution Time" shall mean the date
and time that this Agreement is executed and delivered by the parties
hereto. "Basic Prospectus" shall mean the prospectus referred to in
paragraph (a) above contained in the Registration Statement at the
Effective Date including, in the case of a Non-Delayed Offering, any
Preliminary Final Prospectus. "Preliminary Final Prospectus" shall mean
any preliminary prospectus supplement to the Basic Prospectus which
describes the Securities and the offering thereof and is used prior to
filing of the Final Prospectus. "Final Prospectus" shall mean the
prospectus supplement relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time, together with the
Basic Prospectus or, if, in the case of a Non-Delayed Offering, no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities, including the Basic Prospectus,
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred
to in paragraph (a) above, including incorporated documents, exhibits
and financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto
becomes effective prior to the Closing Date (as hereinafter defined),
shall also mean such registration
<PAGE>
6
statement as so amended. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as
provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and
"Regulation SK" refer to such rules or regulation under the Act. "Rule
430A Information" means information with respect to the Securities and
the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A. Any reference
herein to the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act
on or before the Effective Date of the Registration Statement or the
issue date of the Basic Prospectus, any Preliminary Final Prospectus or
the Final Prospectus, as the case may be; and any reference herein to
the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of securities
which is intended to commence promptly after the effective date of a
registration statement, with the result that, pursuant to Rules 415 and
430A, all information (other than Rule 430A Information) with respect to
the securities so offered must be included in such registration
statement at the effective date thereof. A "Delayed Offering" shall mean
an offering of securities pursuant to Rule 415 which does not commence
promptly after the effective date of a registration statement, with the
result that only information required pursuant to Rule 415 need be
included in such registration statement at the effective date thereof
with respect to the securities so offered. Whether the offering of the
Securities is a Non-Delayed Offering or a Delayed Offering shall be set
forth in Schedule I hereto.
2. Purchase and Sale. (a) Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and
<PAGE>
7
not jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto the principal amount or number of shares or Units of
Securities set forth opposite such Underwriter's name in Schedule II hereto,
except that, in the case of Debt Securities, if Schedule I hereto provides for
the sale of such Debt Securities pursuant to delayed delivery arrangements, the
respective principal amount of Securities to be purchased by the Underwriters
shall be as set forth in Schedule II hereto less the respective amounts of
Contract Securities determined as provided below. Securities to be purchased by
the Underwriters are herein sometimes called the "Underwriters' Securities" and
Securities to be purchased pursuant to Delayed Delivery Contracts as hereinafter
provided are herein called "Contract Securities".
(b) If so provided in Schedule I hereto, the Underwriters are
authorized to solicit offers to purchase Securities from the Company pursuant to
delayed delivery contracts ("Delayed Delivery Contracts"), substantially in the
form of Schedule III hereto but with such changes therein as the Company may
authorize or approve. The Underwriters will endeavor to make such arrangements
and, as compensation therefor, the Company will pay to the Representatives, for
the account of the Underwriters, on the Closing Date, the percentage set forth
in Schedule I hereto of the principal amount of the Debt Securities for which
such Delayed Delivery Contracts are made. Delayed Delivery Contracts are to be
with institutional investors, including commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions. The Company will enter into Delayed Delivery Contracts in all
cases where such sales of Contract Securities arranged by the Underwriters have
been approved by the Company (it being understood that the Company may
reasonably withhold such approval) but, except as the Company may otherwise
agree, each such Delayed Delivery Contract must be for not less than the minimum
principal amount set forth in Schedule I hereto and the aggregate principal
amount set forth in Schedule I hereto and the aggregate principle amount of
Contract Securities may not exceed the maximum aggregate principal amount set
forth in Schedule I hereto. The Underwriters will not have any responsibility in
respect of the validity or performance of Delayed Delivery Contracts. The
principal amount of Securities to be purchased by each Underwriter as set forth
in Schedule II hereto shall be reduced by an amount which shall bear the same
proportion to the total principal amount of Contract Securities as the principal
amount of Securities set forth opposite the name of such Underwriter bears to
the
<PAGE>
8
aggregate principal amount set forth in Schedule II hereto, except to the extent
that you determine that such reduction shall be otherwise than in such
proportion and so advise the Company in writing; provided, however, that the
total principal amount of Securities to be purchased by all Underwriters shall
be the aggregate principal amount set forth in Schedule II hereto less the
aggregate principal amount of Contract Securities.
3. Delivery and Payment. Delivery of and payment for the Underwriter's
Securities shall be made on the date and at the time specified in Schedule I
hereto (or such later date not later than five business days after such
specified date as the Representatives shall designate), which date and time may
be postponed by agreement between the Representatives and the Company or as
provided in Section 8 hereof (such date and time of delivery and payment for the
Underwriter's Securities being herein called the "Closing Date"). Delivery of
the Underwriter's Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Company by certified or official bank check or checks
drawn on or by a New York Clearing House bank or wire transfer payable in same
day funds. Delivery of the Underwriter's Securities shall be made at such
location as the Representatives shall reason- ably designate at least one
business day in advance of the Closing Date and payment for the Securities shall
be made at the office specified in Schedule I hereto. Certificates for the
Underwriter's Securities shall be registered in such names and in such
denominations as the Representatives may request not less than three full
business days in advance of the Closing Date.
The Company agrees to have the Underwriter's Securities available
for inspection, checking and packaging by the Representatives in New York, New
York, not later than 1:00 PM on the business day prior to the Closing Date.
4. Agreements. The Company agrees with the
several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement (including the Final Prospectus
or any
<PAGE>
9
Preliminary Final Prospectus) to the Basic Prospectus unless the Company
has furnished you a copy for your review prior to filing and will not
file any such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, the Company will cause the
Final Prospectus, properly completed, and any supplement thereto to be
filed with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company
will promptly advise the Representatives (i) when the Registration
Statement, if not effective at the Execution Time, and any amendment
thereto, shall have become effective, (ii) when the Final Prospectus,
and any supplement thereto, shall have been filed with the Commission
pursuant to Rule 424(b), (iii) when, prior to termination of the
offering of the Securities, any amendment to the Registration Statement
shall have been filed or become effective, (iv) of any request by the
Commission for any amendment of the Registration Statement or supplement
to the Final Prospectus or for any additional information, (v) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (vi) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a result
of which the Final Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the Final
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company promptly will (i) prepare and file with
the Commission, subject to the second sentence of paragraph (a) of this
Section 4, an amendment or supplement which will correct such statement
or omission or effect such
<PAGE>
10
compliance and (ii) supply any supplemented Prospectus to you in such
quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, copies of the Registration
Statement (including exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as
many copies of any Preliminary Final Prospectus and the Final Prospectus
and any supplement thereto as the Representatives may reasonably
request. The Company will pay the expenses of printing or other
production of all documents relating to the offering.
(e) The Company will arrange for the qualification of the
Securities and any Debt Securities, Common Stock, Class C Common Stock,
Preferred Stock, Convertible Preferred Stock, or Nonconvertible
Preferred Stock that may be issuable pursuant to the exercise,
conversion or exchange, as the case may be, of the Securities offered by
the Company, for sale under the laws of such jurisdictions as the
Representatives may designate (provided, however, that in connection
therewith, the Company will not be required to (i) qualify generally to
do business in any jurisdiction where it is not then so qualified, (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction where it is not then
so subject), will maintain such qualifications in effect so long as
required for the distribution of the Securities, will arrange for the
determination of the legality of the Securities for purchase by
institutional investors, and will pay the fee of the National
Association of Securities Dealers, Inc., in connection with its review,
if any, of the offering.
(f) Until the business date set forth on Schedule I hereto, the
Company will not, without the consent of the Representatives, offer,
sell or contract to sell, or otherwise dispose of, directly or
indirectly, or
<PAGE>
11
announce the offering of, any securities issued or guaranteed by the
Company (other than the Securities) and other than (i) as specified in
Schedule I, or (ii) sales of Equity Securities to The Coca-Cola Company
pursuant to its rights under the Stock Rights and Restrictions Agreement
(the "Stock Agreement") dated as of January 27, 1989.
(g) The Company will arrange for the listing of any Equity
Securities upon notice of issuance on any national securities exchange
or automated quotation system designated in Schedule I hereto.
(h) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, An Act Relating to Disclosure of Doing Business with Cuba, and
the Company further agrees that if it commences engaging in business
with the government of Cuba or with any person or affiliate located in
Cuba after the date the Registration Statement becomes or has become
effective with the Securities and Exchange Commission or with the
Florida Department of Banking and Finance (the "Department"), whichever
date is later, or if the information reported in the Prospectus, if any,
concerning the Company's business with Cuba or with any person or
affiliate located in Cuba changes in any material way, the Company will
provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwriters' Securities shall
be subject to the accuracy of the representations and warranties on the part of
the Company contained herein as of the Execution Time and the Closing Date, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representatives agree in writing to a
later time, the Registration Statement will become effective not later
than (i) 6:00 PM New York City time, on the date of determination of the
public offering price, if such determination occurred at or prior to
3:00 PM New York City time on such date or (ii) 12:00 Noon on the
<PAGE>
12
business day following the day on which the public offering price was
determined, if such determination occurred after 3:00 PM New York City
time on such date; if filing of the Final Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Final Prospectus, and
any such supplement, shall have been filed in the manner and within the
time period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have furnished to the Representatives the
opinion of Witt, Gaither & Whitaker, P.C., counsel for the Company,
dated the Closing Date, to the effect that:
(i) each of the Company, Coca-Cola Bottling Company of
Mobile, LLC, CCBC of Nashville, L.P., Coca-Cola Bottling Company
of North Carolina, LLC, Coca-Cola Bottling Company of Roanoke,
Inc., Columbus Coca-Cola Bottling Company, Panama City Coca-Cola
Bottling Company, Tennessee Soft Drink Production Company,
Thomasville Coca-Cola Bottling Company, Coca-Cola Ventures, Inc.,
CCBC of Wilmington, Inc., The Coca-Cola Bottling Company of West
Virginia, Inc., Metrolina Bottling Company, COBC, Inc., ECBC,
Inc., MOBC, Inc., NABC, Inc., PCBC, Inc., ROBC, Inc., TOBC, Inc.,
WCBC, Inc., and WVBC, Inc. (individually a "Subsidiary" and
collectively the "Subsidiaries"), is duly incorporated and
validly exists as a corporation in good standing under the laws
of the jurisdiction in which it is chartered or organized, with
full corporate power and authority to own, lease and operate its
properties, and conduct its business as described in the Final
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business, other
than jurisdictions, except where the failure so to qualify would
not have a material adverse effect.
(ii) the Company's 50% owned general partnership, Piedmont
Coca-Cola Bottling Partnership ("Piedmont") is duly organized and
validly existing under the laws of the State of
<PAGE>
13
Delaware, with full power and authority to own, lease and operate
its properties, and to conduct its business as described in the
Final Prospectus and each of its corporate partners is duly
registered and qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction which
requires such qualification wherein Piedmont owns or leases
material properties or conducts material business, other than
jurisdictions, except where the failure so to qualify would not
have a material adverse effect.
(iii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and
are fully paid and nonassessable, and, except as otherwise set
forth in the Final Prospectus, all outstanding shares of capital
stock of the Subsidiaries and the 50% partnership interest in
Piedmont are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any perfected
security interest and, to the knowledge of such counsel, after
due inquiry, any other security interests, claims, liens or
encumbrances;
(iv) the Company's authorized equity capitalization is as
set forth in the Final Prospectus; the Securities conform to the
description thereof contained in the Final Prospectus; and, if
the Securities are to be listed on any securities exchange or
automated quotation system, authorization therefor has been
given, subject to official notice of issuance and evidence of
satisfactory distribution, or the Company has filed a preliminary
listing application and all required supporting documents with
respect to the Securities with such securities exchange or
automated quotation system and such counsel has no reason to
believe that the Securities will not be authorized for listing,
subject to official notice of issuance and evidence of
satisfactory distribution;
(v) in the case of an offering of Debt Securities, the
Indenture has been duly authorized, executed and delivered, and
has been duly qualified under the Trust Indenture Act; the
Indenture constitutes a legal, valid and binding instrument
enforceable against the Company in
<PAGE>
14
accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
fraudulent transfer, moratorium or other laws relating to or
affecting the enforcement of creditors' rights generally from
time to time in effect and by general equitable principles,
including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of
whether such enforceability is considered in equity or at law);
and the Debt Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Underwriters
pursuant to this Agreement, in the case of the Underwriters'
Securities, or by the purchasers thereof pursuant to Delayed
Delivery Contracts, in the case of any Contract Securities, will
constitute legal, valid and binding obligations of the Company,
be convertible or exercisable for other securities of the Company
in accordance with their terms as set forth in the Final
Prospectus, as the case may be, and will be entitled to the
benefits of the Indenture; if the Debt Securities are convertible
or exercisable into Equity Securities, the shares of Equity
Securities issuable upon such conversion or exercise will have
been duly authorized and reserved for issuance upon such
conversion and, when issued upon such conversion, will be validly
issued, fully paid and nonassessable; the outstanding shares of
such Equity Securities will have been duly authorized and issued,
will be fully paid and nonassessable and will conform to the
description thereof contained in the Final Prospectus; and the
holders of outstanding capital stock of the Company have no
preemptive rights with respect to any of such shares of Equity
Securities issuable upon such conversion, except as provided in
the Stock Agreement;
(vi) in the case of an offering of Common Stock or Class C
Common Stock, the shares of Common Stock or Class C Common Stock
have been duly and validly authorized and, when issued and
delivered and paid for by the Underwriters pursuant to this
agreement, will be fully paid and nonassessable and will conform
to the description thereof contained in the Final Prospectus; the
Common Stock has been duly authorized for listing,
<PAGE>
15
subject to official notice of issuance, on the National
Association of Securities Dealers Automated Quotation National
Market System; the certificates for the Common Stock or Class C
Common Stock are in valid and sufficient form; and the holders of
outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the
Common Stock or Class C Common Stock, except as provided in the
Stock Agreement.
(vii) in the case of an offering of Preferred Stock,
Convertible Preferred Stock or Nonconvertible Preferred Stock,
the Company has authorized capital stock as set forth in the
Final Prospectus; the shares of Preferred Stock, Convertible
Preferred Stock, or Nonconvertible Preferred Stock being
delivered at such Closing Date have been duly and validly
authorized and, when issued and delivered and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the shares of Preferred Stock, Convertible
Preferred Stock, or Nonconvertible Preferred Stock conform to the
descriptions thereof contained in the Final Prospectus; and the
stockholders of the Company have no preemptive rights with
respect to any of such shares of Preferred Stock, Convertible
Preferred Stock or Nonconvertible Preferred Stock, except as
provided in the Stock Agreement. If the shares of Preferred Stock
or Convertible Preferred Stock being delivered at such Closing
Date are convertible or exchangeable into Common Stock or other
securities (including Securities), such shares of Preferred Stock
or Convertible Preferred Stock are, and the Contract Securities,
when so issued, delivered and sold, will be, convertible or
exchangeable into Common Stock or such other securities in
accordance with their terms; the shares of such Common Stock or
other securities initially issuable upon conversion or exchange
of such shares of Preferred Stock or Convertible Preferred Stock
will have been duly authorized and reserved for issuance upon
such conversion or exchange and, when issued upon such conversion
or exchange, will be duly issued, fully paid and nonassessable;
the outstanding shares of such Common Stock have been duly
authorized and issued, are fully paid and nonassessable and
conform to
<PAGE>
16
the description thereof contained in the Final Prospectus;
(viii) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court
or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries or Piedmont, of
a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Final
Prospectus, and there is no franchise, contract or other document
of a character required to be described in the Registration
Statement or Final Prospectus, or to be filed as an exhibit,
which is not described or filed as required; and the statements
included or incorporated in the Final Prospectus describing any
legal proceedings or material contracts or agreements relating to
the Company, its subsidiaries and Piedmont fairly summarize such
matters;
(ix) the Registration Statement has become effective under
the Act; any required filing of the Basic Prospectus, any
Preliminary Final Prospectus and the Final Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); to the
best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened,
and the Registration Statement and the Final Prospectus (other
than the financial statements and other financial and statistical
information contained therein as to which such counsel need
express no opinion) comply as to form in all material respects
with the applicable requirements of the Act, the Exchange Act and
the Trust Indenture Act and the respective rules thereunder; and
such counsel has no reason to believe that at the Effective Date
the Registration Statement contained any untrue statement of a
material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading or that the Final Prospectus includes any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the
<PAGE>
17
light of the circumstances under which they were made, not
misleading;
(x) this Agreement has been duly authorized,
executed and delivered by the Company;
(xi) any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company and are valid
and binding agreements of the Company enforceable in accordance
with their terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, fraudulent
transfer, moratorium or other laws relating to or affecting the
enforcement of creditors' rights generally from time to time in
effect and by general equitable principles, including, without
limitation, concepts of materiality, good faith and fair dealing,
regardless of whether such enforceability is considered in equity
or at law);
(xii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated herein or in any
Delayed Delivery Contracts, except such as have been obtained
under the Act and such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such other
approvals (specified in such opinion) as have been obtained;
(xiii) neither the execution and delivery of the
Indenture, the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated
nor the fulfillment of the terms hereof or of any Delayed
Delivery Contracts will conflict with, result in a breach or
violation of, or constitute a default under any law or the
charter or by-laws of the Company or the terms of any indenture
or other agreement or instrument known to such counsel and to
which the Company or any of its subsidiaries or Piedmont is a
party or bound or any judgment, order or decree known to such
counsel to be applicable to the Company or any of its
subsidiaries or Piedmont of any court, regulatory body,
administrative agency, governmental body or
<PAGE>
18
arbitrator having jurisdiction over the Company or any of its
subsidiaries or Piedmont;
(xiv) the information, if any, in the Final Prospectus
under "Taxation", has been reviewed by them and constitutes a
complete and accurate summary of the matters disclosed
thereunder;
(xv) no holders of securities of the Company
have rights to the registration of such securities
under the Registration Statement; and
(xvi) such other legal opinions as are set
forth on Schedule I hereto.
In rendering such opinion, Witt, Gaither & Whitaker, P.C. may rely (A)
as to matters involving the application of laws of any jurisdiction
other than the States of Delaware and Tennessee or the United States, to
the extent deemed proper and specified in such opinion, upon the opinion
of other counsel of good standing believed to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of
fact, to the extent deemed proper, on certificates of responsible
officers of the Company and public officials. References to the Final
Prospectus in this paragraph (b) include any supplements thereto at the
Closing Date.
(c) The Representatives shall have received from Cravath, Swaine
& Moore, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the
Securities, the Indenture, any Delayed Delivery Contracts, the
Registration Statement, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel
such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Final Prospectus, any supplement to the Final Prospectus and this
Agreement and that:
<PAGE>
19
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the
Closing Date and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial
statements included in the Final Prospectus (exclusive of any
supplement thereto), there has been no material adverse change in
the condition (financial or other), earnings, business affairs,
properties or business prospects of the Company and its
subsidiaries or Piedmont, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus (exclusive of
any supplement thereto).
(e) At the Closing Date, PricewaterhouseCoopers LLP shall have
furnished to the Representatives a letter or letters (which may refer to
letters previously delivered to one or more of the Representatives),
dated as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective
applicable published rules and regulations thereunder and that they have
performed the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial
information in accordance with, and as described in, Statement of
Auditing Standards No. 71 for the latest unaudited financial statements
in or incorporated in the Registration Statement or the Final Prospectus
and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules and any pro forma financial
statements of the Company and its subsidiaries and of Piedmont
included or
<PAGE>
20
incorporated in the Registration Statement and the Final
Prospectus and reported on by them comply in form in all material
respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published rules and
regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; their limited review in accordance with standards
established by the American Institute of Certified Public
Accountants under Statement of Auditing Standards No. 71, of the
unaudited interim financial information of the Company and its
subsidiaries; carrying out certain specified procedures (but not
an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, directors and the executive, finance, audit,
pension and compensation committees of the Company and the
Subsidiaries and of the partnership proceedings of Piedmont; and
inquiries of certain officials of the Company and Piedmont who
have responsibility for financial and accounting matters of the
Company and its subsidiaries and of Piedmont as to transactions
and events subsequent to the date of the most recent audited
financial statements in or incorporated in the Final Prospectus,
nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Final
Prospectus do not comply in form in all material respects
with applicable accounting requirements and with the
published rules and regulations of the Commission with
respect to financial statements included or incorporated
in quarterly reports on Form 10-Q under the Exchange Act;
or that said unaudited financial statements are not in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of
the audited financial statements
<PAGE>
21
included or incorporated in the Registration Statement and
the Final Prospectus;
(2) with respect to the period subsequent to the
date of the most recent financial statements (other than
any capsule information), audited or unaudited, in or
incorporated in the Registration Statement and the Final
Prospectus, there were any increases, at a specified date
not more than five business days prior to the date of the
letter, in the long-term debt of the Company and its
subsidiaries and of Piedmont or capital stock of the
Company, or decreases in the stockholders' equity of the
Company as compared with the amounts shown on the most
recent consolidated balance sheet included or incorporated
in the Registration Statement and the Final Prospectus, or
for the period from the date of the most recent financial
statements included or incorporated in the Registration
Statement and the Final Prospectus to such specified date
there were any decreases, as compared with the
corresponding period in the preceding year in net sales,
gross margin, income from operations, income before income
taxes and effect of accounting changes or in total or
per share amounts of net income applicable to common
stockholders of the Company and its subsidiaries, except
in all instances for changes or decreases set forth in
such letter, in which case the letter shall be accompanied
by an explanation by the Company as to the significance
thereof unless said explanation is not deemed necessary by
the Representatives;
(3) the information included in the Registration
Statement and Prospectus in response to Regulation S-K,
Item 301 (Selected Financial Data), Item 302
(Supplementary Financial Information), Item 402 (Executive
Compensation) and Item 503(d) (Ratio of Earnings to Fixed
Charges) is not in conformity with the applicable
disclosure requirements of Regulation S-K; or
(4) the amounts included in any unaudited "capsule"
information included or
<PAGE>
22
incorporated in the Registration Statement and the Final
Prospectus do not agree with the amounts set forth in the
unaudited financial statements for the same periods or
were not determined on a basis substantially consistent
with that of the corresponding amounts in the audited
financial statements included or incorporated in the
Registration Statement and the Final Prospectus;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company, its subsidiaries and Piedmont) set forth in the
Registration Statement and the Final Prospectus and in Exhibit 12
to the Registration Statement, including the information included
or incorporated in Items 1, 2, 6, 7 and 11 of the Company's
Annual report on Form 10-K, incorporated in the Registration
Statement and the Prospectus, and the information included in the
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" included or incorporated in the Company's
Quarterly Reports on Form 10-Q, incorporated in the Registration
Statement and the Final Prospectus, agrees with the accounting
records of the Company, its subsidiaries and Piedmont, excluding
any questions of legal interpretation; and
(iv) if unaudited pro forma financial statements are
included or incorporated in the Registration Statement and the
Final Prospectus, on the basis of a reading of the unaudited pro
forma financial statements, carrying out certain specified
procedures, inquiries of certain officials of the Company and the
acquired company who have responsibility for financial and
accounting matters, and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the pro forma
financial statements do not comply in form in all material
respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments
<PAGE>
23
have not been properly applied to the historical amounts in the
compilation of such statements.
References to the Final Prospectus in this paragraph (e) include
any supplement thereto at the date of the letter.
In addition, except as provided in Schedule I hereto, at the
Execution Time, PricewaterhouseCoopers LLP shall have furnished to the
Representatives a letter or letters, dated as of the Execution Time, in form and
substance satisfactory to the Representatives, to the effect set forth above.
(f) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Registration Statement (exclusive
of any amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph (e)
of this Section 5 or (ii) any change, or any development involving a
prospective change, in or affecting the business or properties of the
Company, its subsidiaries and Piedmont the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto).
(g) Subsequent to the Execution Time, there shall not have been
any decrease in the rating of any of the Company's debt securities by
any "nationally recognized statistical rating organization" (as defined
for purpose of Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
(h) At the Execution Time, the Company shall have furnished to
the Representatives a letter from each officer and director of the
Company and certain major shareholders specified in Schedule I hereto,
addressed to the Representatives, in which each such person agrees not
to offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce an offering of, any shares of Equity Securities
beneficially owned by such person or any
<PAGE>
24
securities convertible into, or exchangeable for, shares of such
Securities for a period specified in Schedule I hereto following the
Execution Time without the prior written consent of the
Representatives.
(i) Prior to the Closing Date, the Company shall have furnished
to the Representatives such further legal opinions, information,
certificates and documents as the Representatives may reasonably
request.
(j) The Company shall have accepted Delayed Delivery Contracts in
any case where sales of Contract Securities arranged by the Underwriters
have been approved by the Company.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the office of Cravath, Swaine & Moore, counsel for the
Underwriters, at Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the
Closing Date.
6. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of one Underwriters' counsel and one local counsel in each
jurisdiction) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities.
<PAGE>
25
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that (i) the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein, and (ii) such indemnity with
respect to any Preliminary Final Prospectus shall not inure to the benefit of
any Underwriter (or any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage or liability purchased the
Securities which are the subject thereof if such person did not receive a copy
of the Final Prospectus (or the Final Prospectus as supplemented), excluding
documents incorporated therein by reference, at or prior to the confirmation of
the sale of such Securities to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a material fact
contained in such Preliminary Final Prospectus was corrected in the Final
Prospectus (or the Final Prospectus as supplemented). This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
<PAGE>
26
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the statements
set forth in the last paragraph of the cover page, under the heading
"Underwriting" or "Plan of Distribution" and, if Schedule I hereto provides for
sales of Securities pursuant to delayed delivery arrangements, in the last
sentence under the heading "Delayed Delivery Arrangements" in any Preliminary
Final Prospectus or the Final Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in the documents referred to in the foregoing indemnity, and you, as the
Representatives, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
<PAGE>
27
have the right to employ one separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Underwriters may be subject in such proportion as is appropriate to
<PAGE>
28
reflect the relative benefits received by the Company and by the Underwriters
from the offering of the Securities; provided, however, that in no such case
shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the Company
and the Underwriters shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and of the Underwriters in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses), and
benefits received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Final Prospectus. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Company or the Underwriters. The Company and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
8. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
or number of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that the
aggregate amount
<PAGE>
29
or number of Securities which the defaulting Underwriter or Underwriters agreed
but failed to purchase shall exceed 10% of the aggregate amount or number of
Securities set forth in Schedule II hereto, the remaining Underwriters shall
have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such nondefaulting Underwriters do not
purchase all the Securities, this Agreement will terminate without liability to
any nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 8, the Closing Date shall be postponed
for such period, not exceeding seven days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Final Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in the Company's Common Stock or Class C Common Stock shall have been
suspended by the New York Stock Exchange or National Association of Securities
Dealers Automated Quotation National Market System or trading in securities
generally on the New York Stock Exchange or National Association of Securities
Dealers Automated Quotation National Market System shall have been suspended or
limited or minimum prices shall have been established on [either of] such
Exchange or market system, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Final Prospectus (exclusive of
any supplement thereto).
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 7 hereof,
and will survive delivery of and payment for the
<PAGE>
30
Securities. The provisions of Sections 6 and 7 hereof shall survive the
termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telecopied and confirmed to them, at the address specified in
Schedule I hereto; or, if sent to the Company, will be mailed, delivered or
telecopied and confirmed to it at 1900 Rexford Road, Charlotte, NC 28211,
attention of the Treasurer, with a copy sent to the Company's counsel, Witt,
Gaither & Whitaker, P.C., at 1100 American National Bank Building, Chattanooga,
Tennessee 37402.
12. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7 hereof,
and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York without reference
to principles of conflicts of laws.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
Coca-Cola Bottling Co.
Consolidated,
By: /s/ Jonathan W. Albright
Name: Jonathan W. Albright
Title: Vice President and
Treasurer
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
Salomon Smith Barney Inc.
NationsBanc Montgomery Securities LLC
<PAGE>
First Union Capital Markets Corp.
Goldman, Sachs & Co.
SunTrust Equitable Securities
By: Salomon Smith Barney Inc.
By: /s/ Martha D. Bailey
------------------------------
Name: Martha D. Bailey
Title: First Vice President
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
<PAGE>
SCHEDULE I
Underwriting Agreement dated April 21, 1999
Registration Statement No. 333-71003
Representative(s): Salomon Smith Barney Inc.
NationsBanc Montgomery Securities LLC
First Union Capital Markets Corp.
Goldman, Sachs & Co.
SunTrust Equitable Securities
Title, Purchase Price and Description of Securities:
Title: 6.375% Debentures Due 2009
Principal Amount: $250,000,000
Purchase price: $247,112,500 (99.495% of Principal Amount,
less a discount of 0.650%), plus interest, if any, since April
26, 1999
Sinking fund provisions: None
Redemption provisions: Redeemable in whole or in part
at any time at the redemption prices described in the
Company's Prospectus Supplement dated April 21, 1999
Other provisions: None
Closing Date, Time and Location: 10:00 a.m. New York City
Time on April 26, 1999 at the offices of Cravath, Swaine &
<PAGE>
Moore, 825 Eighth Avenue, New York, New York 10019
Type of Offering: Delayed Offering
Delayed Delivery Arrangements: None
Fee:
Minimum principal amount of each contract: $
Maximum aggregate principal amount of all contracts: $
Date referred to in Section 4(f) after which the Company may offer or sell debt
securities issued
<PAGE>
or guaranteed by the Company without the consent of the Representative(s ):
April 26, 1999
Modification of items to be covered by the letter from PricewaterhouseCoopers
LLP delivered pursuant to Section 5(e) at the Execution Time: None
<PAGE>
SCHEDULE II
Principal Amount
of Securities to
Underwriters be Purchased
- ------------ ------------
Salomon Smith Barney Inc. $ 137,500,000
NationsBanc Montgomery Securities LLC 50,000,000
First Union Capital Markets Corp. 12,500,000
Goldman, Sachs & Co. 37,500,000
SunTrust Equitable Securities 12,500,000
-------------
Total.......................................... $250,000,000
Unless this certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
COCA-COLA BOTTLING CO. CONSOLIDATED
6.375% DEBENTURES DUE 2009
CUSIP No. 191098 AD4
(Hereinafter "Securities")
$200,000,000
COCA-COLA BOTTLING CO. CONSOLIDATED, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of Two Hundred Million Dollars
($200,000,000) on May 1, 2009, and to pay interest thereon from April 26,1999 or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on May 1 and November 1 in each year,
commencing November 1, 1999 at the rate of 6.375% per annum, until the principal
hereof is paid or made available for payment, and (to the extent that the
payment of such interest shall be legally enforceable) at the rate of 6.375% per
annum on any overdue principal and premium and on any overdue installment of
interest. Interest payments on this Security will be calculated on the basis of
a 360-day year consisting of twelve 30-day months. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the April 15 or
October 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 11 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture.
Payment of the principal of (and premium, if any) and any such interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, The City of New York, New York, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
at the option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register.
<PAGE>
The defeasance provisions of Sections 1302 and 1303 of the Indenture
will not apply to this Debenture.
The Debentures will be redeemable, as a whole or in part, at the option
of the Company, at any time or from time to time, on at least 30 days, but not
more than 60 days, prior notice mailed to the registered address of each holder
of Debentures. The redemption prices will be equal to the greater of (1) 100% of
the principal amount of the Debentures to be redeemed or (2) the sum of the
present values of the Remaining Scheduled Payments (as defined below)
discounted, on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months), at a rate equal to the sum of the Treasury Rate (as defined
below) plus 25 basis points. In the case of each of clause (1) and (2), accrued
interest will be payable to the redemption date.
"Treasury Rate" means, with respect to any redemption date for the
Debentures, (a) the yield, under the heading that represents the average for the
immediately preceding week, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication that is published
weekly by the Board of Governors of the Federal Reserve System and that
established yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the maturity date, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Treasury Rate shall be interpolated or extrapolated
from such yields on a straight-line basis, rounding to the nearest month) or (b)
if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. The Treasury Rate shall be calculated
on the third business day preceding the redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Debentures that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the Debentures.
"Comparable Treasury Price" means, with respect to any redemption date,
(A) the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m., New York
City time, on the third business day preceding such redemption date.
<PAGE>
"Independent Investment Banker" means Salomon Smith Barney Inc., its
successor, or if such firm is unwilling or unable to select the Comparable
Treasury Issue, an independent investment banking institution of reputation and
stature substantially the same as that of Salomon Smith Barney Inc. at the date
of issue of the Debentures appointed by the Trustee after consultation with the
Company.
"Reference Treasury Dealer" means (1) each of Salomon Smith Barney,
Inc., NationsBanc Montgomery Securities LLC, Goldman, Sachs & Co., First Union
Capital Markets Corp. and SunTrust Equitable Securities and their respective
successors, provided, however, that if any of such firms shall cease to be
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), we will substitute another Primary Treasury Dealer and (2) any two
other Primary Treasury Dealers selected by the Company.
"Remaining Schedule Payments" means, with respect to any Debenture, the
remaining scheduled payments of principal of and interest on such Debenture that
would be due after the related redemption date but for such redemption. If such
redemption date is not an interest payment date with respect to such Debenture,
the amount of the next succeeding scheduled interest payment on such Debenture
will be reduced by the amount of interest accrued on such Debenture to such
redemption date.
On and after the redemption date, interest will cease to accrue on the
Debentures or any portion of the Debentures called for redemption (unless the
Company defaults in the payment of the redemption price and accrued interest).
On or before the redemption date, the Company will deposit with a paying agent
(or the Trustee) money sufficient to pay the redemption price and accrued
interest on the Debentures to be redeemed on such date. If less than all the
Debentures are to be redeemed, the Debentures to be redeemed shall be selected
by the Trustee by such method as the Trustee shall deem fair and appropriate.
This Security is one of a duly authorized issue of securities of the
Company, issued and to be issued in one or more series under an Indenture, dated
as of July 20, 1994, as supplemented and restated by a Supplemental Indenture
dated March 3, 1995 (as supplemented, herein called the "Indenture"), between
the Company and NationsBank of Georgia, National Association, as Trustee (herein
called the "Trustee", which term includes Citibank, N.A., which succeeded to all
of the rights, powers, duties and obligations of the initial trustee under the
Indenture by agreement of all parties, effective September 15, 1995, as well as
any subsequent successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof limited in aggregate
principal amount to $250,000,000.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
<PAGE>
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the right of the Holder of this
Security, which is absolute and unconditional, to receive payment of the
principal of (and premium, if any) and interest on this Security at the times,
place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiples of $1,000
in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
<PAGE>
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: April 26, 1999
Certificate of Authentication: COCA-COLA BOTTLING CO.
CONSOLIDATED
This is one of the Securities of the
series designated herein referred to
in the within-mentioned Indenture.
Citibank, N.A., as Trustee By: __________________________
David V. Singer
Chief Financial Officer
By: ____________________________
Authorized Officer Attest:
------------------------------
Patricia A. Gill
Assistant Secretary
[SEAL]
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------------------------------------------
(Name and address of assignee, including zip code, must be printed or
typewritten)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
the within Debenture, and all rights thereunder, hereby irrevocably constituting
and appointing
- ------------------------------------------------------------------------------
Attorney to transfer said Debenture on the books of the within Company, with
full power of substitution in the premises.
Dated:__________________ ______________________________________
NOTICE: The signature to this assignment must
correspond with the name as it appears
upon the face of the within or
attached Debenture in every particular,
without alteration or enlargement or
any change whatever.
<PAGE>
Unless this certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
COCA-COLA BOTTLING CO. CONSOLIDATED
6.375% DEBENTURES DUE 2009
CUSIP No. 191098 AD4
(Hereinafter "Securities")
$50,000,000
COCA-COLA BOTTLING CO. CONSOLIDATED, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of Fifty Million Dollars ($50,000,000) on
May 1, 2009, and to pay interest thereon from April 26,1999 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on May 1 and November 1 in each year, commencing November 1,
1999 at the rate of 6.375% per annum, until the principal hereof is paid or made
available for payment, and (to the extent that the payment of such interest
shall be legally enforceable) at the rate of 6.375% per annum on any overdue
principal and premium and on any overdue installment of interest. Interest
payments on this Security will be calculated on the basis of a 360-day year
consisting of twelve 30-day months. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the April 15 or October 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 11 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in the Indenture.
Payment of the principal of (and premium, if any) and any such interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, The City of New York, New York, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
at the option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register.
<PAGE>
The defeasance provisions of Sections 1302 and 1303 of the Indenture
will not apply to this Debenture.
The Debentures will be redeemable, as a whole or in part, at the option
of the Company, at any time or from time to time, on at least 30 days, but not
more than 60 days, prior notice mailed to the registered address of each holder
of Debentures. The redemption prices will be equal to the greater of (1) 100% of
the principal amount of the Debentures to be redeemed or (2) the sum of the
present values of the Remaining Scheduled Payments (as defined below)
discounted, on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months), at a rate equal to the sum of the Treasury Rate (as defined
below) plus 25 basis points. In the case of each of clause (1) and (2), accrued
interest will be payable to the redemption date.
"Treasury Rate" means, with respect to any redemption date for the
Debentures, (a) the yield, under the heading that represents the average for the
immediately preceding week, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication that is published
weekly by the Board of Governors of the Federal Reserve System and that
established yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the maturity date, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Treasury Rate shall be interpolated or extrapolated
from such yields on a straight-line basis, rounding to the nearest month) or (b)
if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. The Treasury Rate shall be calculated
on the third business day preceding the redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Debentures that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the Debentures.
"Comparable Treasury Price" means, with respect to any redemption date,
(A) the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m., New York
City time, on the third business day preceding such redemption date.
<PAGE>
"Independent Investment Banker" means Salomon Smith Barney Inc., its
successor, or if such firm is unwilling or unable to select the Comparable
Treasury Issue, an independent investment banking institution of reputation and
stature substantially the same as that of Salomon Smith Barney Inc. at the date
of issue of the Debentures appointed by the Trustee after consultation with the
Company.
"Reference Treasury Dealer" means (1) each of Salomon Smith Barney,
Inc., NationsBanc Montgomery Securities LLC, Goldman, Sachs & Co., First Union
Capital Markets Corp. and SunTrust Equitable Securities and their respective
successors, provided, however, that if any of such firms shall cease to be
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), we will substitute another Primary Treasury Dealer and (2) any two
other Primary Treasury Dealers selected by the Company.
"Remaining Schedule Payments" means, with respect to any Debenture, the
remaining scheduled payments of principal of and interest on such Debenture that
would be due after the related redemption date but for such redemption. If such
redemption date is not an interest payment date with respect to such Debenture,
the amount of the next succeeding scheduled interest payment on such Debenture
will be reduced by the amount of interest accrued on such Debenture to such
redemption date.
On and after the redemption date, interest will cease to accrue on the
Debentures or any portion of the Debentures called for redemption (unless the
Company defaults in the payment of the redemption price and accrued interest).
On or before the redemption date, the Company will deposit with a paying agent
(or the Trustee) money sufficient to pay the redemption price and accrued
interest on the Debentures to be redeemed on such date. If less than all the
Debentures are to be redeemed, the Debentures to be redeemed shall be selected
by the Trustee by such method as the Trustee shall deem fair and appropriate.
This Security is one of a duly authorized issue of securities of the
Company, issued and to be issued in one or more series under an Indenture, dated
as of July 20, 1994, as supplemented and restated by a Supplemental Indenture
dated March 3, 1995 (as supplemented, herein called the "Indenture"), between
the Company and NationsBank of Georgia, National Association, as Trustee (herein
called the "Trustee", which term includes Citibank, N.A., which succeeded to all
of the rights, powers, duties and obligations of the initial trustee under the
Indenture by agreement of all parties, effective September 15, 1995, as well as
any subsequent successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof limited in aggregate
principal amount to $250,000,000.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
<PAGE>
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the right of the Holder of this
Security, which is absolute and unconditional, to receive payment of the
principal of (and premium, if any) and interest on this Security at the times,
place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiples of $1,000
in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
<PAGE>
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: April 26, 1999
Certificate of Authentication: COCA-COLA BOTTLING CO.
CONSOLIDATED
This is one of the Securities of
the series designated herein
referred to in the within-mentioned
Indenture.
Citibank, N.A., as Trustee By: __________________________
David V. Singer
Chief Financial Officer
By: ____________________________
Authorized Officer Attest:
------------------------------
Patricia A. Gill
Assistant Secretary
[SEAL]
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------------------------------------------
(Name and address of assignee, including zip code, must be printed or
typewritten)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
the within Debenture, and all rights thereunder, hereby irrevocably constituting
and appointing
- ------------------------------------------------------------------------------
Attorney to transfer said Debenture on the books of the within Company, with
full power of substitution in the premises.
_______________________________
Dated:__________________ NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
or attached Debenture in every
particular, without alteration or
enlargement or any change whatever.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements as of and for the three months ended April 4, 1999 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<RESTATED>
<CIK> 0000317540
<NAME> Coca-Cola Bottling Co. Consolidated
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-02-2000
<PERIOD-START> JAN-04-1999
<PERIOD-END> APR-04-1999
<EXCHANGE-RATE> 1
<CASH> 6,654
<SECURITIES> 0
<RECEIVABLES> 58,983
<ALLOWANCES> 611
<INVENTORY> 43,035
<CURRENT-ASSETS> 145,604
<PP&E> 638,578
<DEPRECIATION> 208,251
<TOTAL-ASSETS> 1,010,405
<CURRENT-LIABILITIES> 214,517
<BONDS> 599,329
0
0
<COMMON> 12,055
<OTHER-SE> (2,840)
<TOTAL-LIABILITY-AND-EQUITY> 1,010,405
<SALES> 220,263
<TOTAL-REVENUES> 220,263
<CGS> 128,111
<TOTAL-COSTS> 128,111
<OTHER-EXPENSES> 86,134
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,695
<INCOME-PRETAX> (6,892)
<INCOME-TAX> (2,412)
<INCOME-CONTINUING> (4,480)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,480)
<EPS-PRIMARY> (0.54)
<EPS-DILUTED> (0.53)
</TABLE>
