THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE
CHANGED. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE NOT AN
OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED APRIL 15, 1999
[COCA-COLA BOTTLING CO. CONSOLIDATED LOGO APPEARS HERE]
P R O S P E C T U S S U P P L E M E N T
(TO PROSPECTUS DATED JANUARY 22, 1999)
$250,000,000
COCA-COLA BOTTLING CO. CONSOLIDATED
% DEBENTURES DUE 2009
------------
The % Debentures will mature on , 2009. Interest on the
Debentures is payable semiannually on and , beginning ,
1999. The Company may redeem some or all of the Debentures at any time. The
redemption prices are described under the heading "Description of Debentures --
Optional Redemption" on Page S-14 of this Prospectus Supplement. There is no
sinking fund for either series of Debentures.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
<TABLE>
<CAPTION>
PER %
DEBENTURE
DUE 2009 TOTAL
---------- ------
<S> <C> <C>
Public Offering Price % $
Underwriting Discount % $
Proceeds to the Company (before expenses) % $
</TABLE>
Interest on the Debentures will accrue from April , 1999 to the date of
delivery.
------------
The underwriters are offering the Debentures subject to various
conditions. The underwriters expect to deliver the Debentures in book-entry
form through the facilities of the Depository Trust Company on or about April
, 1999.
------------
BOOK RUNNING LEAD MANAGER SENIOR CO-MANAGER
SALOMON SMITH BARNEY NATIONSBANC MONTGOMERY
SECURITIES LLC
FIRST UNION CAPITAL MARKETS CORP. GOLDMAN, SACHS & CO. SUNTRUST EQUITABLE
SECURITIES
April , 1999
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS.
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION.
WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE
OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION
PROVIDED BY THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS
ACCURATE AS OF ANY DATE AFTER THE DATE ON THE FRONT OF THIS PROSPECTUS
SUPPLEMENT.
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
PROSPECTUS SUPPLEMENT
<S> <C>
The Company .............................................................. S-3
Use of Proceeds .......................................................... S-3
Consolidated Ratios of Earnings to Fixed Charges ......................... S-3
Capitalization ........................................................... S-4
Summary Financial Information ............................................ S-5
Recent Developments ...................................................... S-6
Management's Discussion and Analysis of Financial Condition and Results of
Operations ............................................................. S-7
Description of Debentures ................................................ S-14
Underwriting ............................................................. S-16
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
About This Prospectus ......................................... 2
Where You Can Find More Information About the Company ......... 2
Forward-Looking Statements .................................... 3
The Company ................................................... 3
Use of Proceeds ............................................... 3
Consolidated Ratios of Earnings to Fixed Charges .............. 4
Description of Debt Securities ................................ 4
Description of Preferred Stock ................................ 11
Description of Common Stock and Class C Common Stock .......... 13
Plan of Distribution .......................................... 16
Experts ....................................................... 17
Legal Opinions ................................................ 17
</TABLE>
THE PRINCIPAL EXECUTIVE OFFICES OF COCA-COLA BOTTLING CO. CONSOLIDATED
ARE LOCATED AT 4100 COCA-COLA PLAZA, (FORMERLY 1900 REXFORD ROAD),
CHARLOTTE, NORTH CAROLINA 28211 AND THE COMPANY'S TELEPHONE NUMBER IS
(704) 551-4400.
S-2
<PAGE>
THE COMPANY
Coca-Cola Bottling Co. Consolidated ("the Company") is the second largest
Coca-Cola bottler in the United States. In business since 1902, the Company is
engaged in the production, marketing and distribution of products made by The
Coca-Cola Company, which include some of the most recognized brands in the
world. The Company also distributes several other beverage brands, which
represent approximately 10% of its sales volume. The Company's product
offerings include carbonated soft drinks, teas, juices, isotonics and bottled
water.
The Company's mission is to be the premier soft drink bottler within the
Coca-Cola system and the soft drink industry. To this end, since 1984 the
Company has expanded its bottling territory beyond North Carolina so that it
currently encompasses a significant portion of the southeastern United States.
Net sales have increased from $130 million in 1984 to $929 million in 1998,
primarily through acquisitions. The Company now bottles approximately 8% of all
Coca-Cola bottle/can products produced in the United States.
The Company's growth has resulted in its becoming a key bottler in the
Coca-Cola system. The Coca-Cola Company purchased 20% of the Company's
outstanding common stock in 1987 and raised its stake to about 30% in 1989. In
1991, The Coca-Cola Company provided a portion of the financing (now retired)
for the Company's purchase of Sunbelt Coca-Cola Bottling Company. In 1993, the
Company and The Coca-Cola Company formed Piedmont Coca-Cola Bottling
Partnership ("Piedmont"). Piedmont distributes and markets the product
offerings listed above in portions of North Carolina and South Carolina. The
Company and The Coca-Cola Company each own 50% of Piedmont through their
respective subsidiaries. The Company currently provides part of the finished
product requirements for Piedmont and receives a fee for managing Piedmont's
operations under a management agreement.
The Company considers selective acquisitions for additional territories on
an ongoing basis. To achieve its goals, the Company may engage in further
purchases of bottling contract rights and entities possessing such rights and
other related transactions designed to facilitate such purchases.
USE OF PROCEEDS
The net proceeds (after deducting the underwriting discount and estimated
expenses) to be received by the Company from the sale of the Debentures are
estimated to be approximately $248 million. Substantially all of this amount
will be used to repay borrowings under the Company's revolving credit facility
(the "Credit Facility") and informal lines of credit and for the repayment of
other outstanding indebtedness, including medium-term notes, term loans and
short-term debt. It is possible, however, that some portion of the proceeds may
be used for general corporate purposes, which could include (in addition to
repayment of outstanding indebtedness) working capital increases, capital
expenditures, acquisitions, and repurchases of the Company's Common Stock. The
Credit Facility bears interest at the rate of 5.16% per annum (at March 31,
1999) and matures in December 2002. Approximately $155 million of the
indebtedness to be repaid under the Credit Facility and informal lines of
credit were utilized to finance the Company's buyout of certain equipment
leases in January 1999, with the remainder of such indebtedness having been
utilized for general corporate purposes. The refinanced leases had remaining
lease terms ranging from less than 12 months to seven years, and future minimum
lease payments under these leases totaled approximately $122 million.
Within the context of its strategic planning process, the Company
frequently evaluates opportunities such as acquisitions, divestitures and joint
ventures. Except as described herein under "Recent Developments," the Company
has no material pending understandings or agreements with respect to
acquisitions, divestitures or joint ventures. The Company from time to time,
however, may pursue such transactions, and the balance of the proceeds may be
used for such purposes.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The consolidated ratios of earnings to fixed charges for the Company for
its 1998 and 1997 fiscal years were 1.42x and 1.49x, respectively. These ratios
have been computed using amounts for the Company, its consolidated subsidiaries
and its proportionate share of losses incurred by its fifty percent (50%) owned
affiliate. Earnings available for fixed charges represent earnings before
income taxes and fixed charges. Fixed charges represent interest incurred plus
that portion of rental expense deemed to be the equivalent of interest.
S-3
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company as of January 3, 1999, and as adjusted. The adjustment reflects the
sale of the Debentures and use of the net proceeds as described under "Use of
Proceeds." This table should be read in conjunction with the Company's
consolidated financial statements and related notes incorporated by reference
into the accompanying Prospectus.
SUMMARY CAPITALIZATION
<TABLE>
<CAPTION>
JANUARY 3, 1999
-------------------------------------
(DOLLARS IN MILLIONS) ACTUAL ADJUSTMENTS AS ADJUSTED
- ----------------------------------------------------------- ---------- ------------- ------------
<S> <C> <C> <C>
SHORT-TERM DEBT:
Current portion of long-term debt ......................... $ 30.1 $ (30.1) $ 0.0
LONG-TERM DEBT (LESS CURRENT MATURITIES):
Lines of credit, medium-term notes and other notes payable 121.2 ( 48.7) 72.5
Term loan agreements ...................................... 170.0 ( 16.2) 153.8
Other debt ................................................ 200.0 200.0
Debentures being offered .................................. 250.0 250.0
------- -------- -------
TOTAL LONG-TERM DEBT ...................................... 491.2 185.1 676.3
------- -------- -------
TOTAL DEBT ............................................... 521.3 155.0 676.3
TOTAL SHAREHOLDER'S EQUITY:
Common stock, $1 par value ................................ 9.1 9.1
Class B Common Stock, $1 par value ........................ 3.0 3.0
Class C Common Stock, $1 par value ........................ 0.0 0.0
Capital in excess of par value ............................ 94.7 94.7
Accumulated deficit ....................................... ( 29.7) ( 29.7)
Less: Treasury stock ...................................... ( 61.3) ( 61.3)
------- --------- -------
TOTAL SHAREHOLDERS' EQUITY ................................ $ 15.8 $ 15.8
TOTAL CAPITALIZATION ...................................... $ 537.1 $ 155.0 $ 692.1
======= ======== =======
Present Value of Operating Leases ......................... 207.0 (155.0) 52.0
------- -------- -------
ADJUSTED TOTAL CAPITALIZATION ............................. $ 744.1 $ 0.0 $ 744.1
======= ======== =======
</TABLE>
- ---------
Source: Company's Fiscal 1998 Form 10-K and projections.
S-4
<PAGE>
SUMMARY FINANCIAL INFORMATION
The following summary financial information was derived from data
contained in the Company's Annual Report on Form 10-K for the fiscal year ended
January 3, 1999. You should read the summary financial information in
conjunction with the Company's consolidated financial statements and related
notes incorporated by reference into the accompanying Prospectus. Such
information is presented in this Prospectus Supplement for convenience of
reference.
HISTORICAL FINANCIAL INFORMATION
(IN MILLIONS EXCEPT RATIOS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
--------------------------------------------------------
JANUARY 3, 1999 DECEMBER 28, 1997 DECEMBER 29, 1996
----------------- ------------------- ------------------
<S> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA
Net sales .................................... $ 928.5 $ 802.1 $ 773.8
Cost of sales ................................ 534.9 452.9 436.0
------- ------- -------
Gross margin ................................ 393.6 349.2 337.8
Selling expenses ............................. 207.2 183.1 177.7
General and administrative expenses .......... 69.0 56.8 58.8
Depreciation expense ......................... 36.8 33.7 28.5
Amortization of goodwill and intangibles ..... 13.3 12.3 12.3
------- ------- -------
Income from operations ....................... 67.3 63.3 60.5
Interest expense ............................. 40.0 37.5 30.4
Other income (expense), net .................. ( 4.1) ( 1.5) ( 4.4)
-------- -------- --------
Income before income taxes ................... 23.2 24.3 25.7
Income taxes ................................. 8.3 9.0 9.5
-------- -------- --------
Net income ................................... $ 14.9 $ 15.3 $ 16.2
======== ======== ========
BALANCE SHEET DATA
Cash and cash equivalents .................... $ 6.7 $ 4.4 $ 2.9
Total assets ................................. 825.2 778.0 702.4
Short-term debt .............................. 30.1 12.0 0.1
Long-term debt ............................... 491.2 493.8 439.5
Total debt ................................... 521.3 505.8 439.6
Shareholders' Equity ......................... 15.8 9.3 22.3
Capitalization ............................... 537.1 515.1 461.9
OTHER DATA
Capital expenditures ......................... $ 46.8 $ 100.1 $ 30.0
Acquisition expenditures(1) .................. 35.0 3.9 --
Depreciation and amortization ................ 50.0 46.0 40.8
Rental expense ............................... 28.9 23.0 27.0
EBITDAR(2) ................................... 146.3 132.3 128.3
Ratio of earnings to fixed charges(3) ........ 1.42x 1.49x 1.54x
</TABLE>
- ---------
(1) Net of cash acquired.
(2) Earnings before interest, taxes, depreciation, amortization and rental
expense.
(3) Computed in accordance with Item 503 of SEC Regulation S-K.
S-5
<PAGE>
RECENT DEVELOPMENTS
REFINANCING OF CERTAIN OPERATING LEASES
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.
PENDING ACQUISITION
Pursuant to an Agreement and Plan of Merger dated as of March 26, 1999,
the Company has agreed to acquire all of the outstanding capital stock of
Carolina Coca-Cola Bottling Company, Inc. ("Coke Carolina"), a bottler located
in Sumter, South Carolina. Under this agreement, the total consideration to be
paid for all of the outstanding shares of Coke Carolina Common Stock will be
$36,600,000, subject to certain adjustments. If the merger is consummated, each
Coke Carolina shareholder may elect to receive his or her proportionate share
of the total merger consideration in a combination of (a) shares of the
Company's Common Stock, (b) 5.75% Installment Notes of the Company due 2006 and
(c) cash, subject to the requirements that each shareholder must elect to
receive at least 3.5% of his or her merger consideration in cash and shares of
the Company's Common Stock must compose at least 51%, but not more than 60%, of
the total merger consideration.
On April 6, 1999, the Company filed a Registration Statement on Form S-4
with the Securities and Exchange Commission ("SEC") concerning up to 368,457
shares of its Common Stock and up to $16,653,000 principal amount of its 5.75%
Installment Notes issuable under the terms of this acquisition. The acquisition
is subject to approval by the shareholders of Coke Carolina, and it is expected
that a special meeting of the Coke Carolina shareholders will be held for such
purpose approximately 30 days following the date that the Company's
Registration Statement on Form S-4 is declared effective by the SEC. Subject to
customary closing conditions, the closing of the transaction is expected to
take place as soon as practicable if approved by the shareholders of Coke
Carolina.
S-6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FOLLOWING DISCUSSION AND ANALYSIS CONTAINS INFORMATION FROM THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 3, 1999. SUCH
INFORMATION IS PRESENTED IN THIS PROSPECTUS SUPPLEMENT FOR CONVENIENCE OF
REFERENCE AND HAS NOT BEEN SUBSTANTIVELY UPDATED SINCE THE DATE OF SUCH
DOCUMENT.
INTRODUCTION
THE COMPANY
Coca-Cola Bottling Co. Consolidated is engaged in the production,
marketing and distribution of products of The Coca-Cola Company, which include
the most recognized brands in the world. The Company also distributes several
other beverage brands. The Company's product offerings include carbonated soft
drinks, teas, juices, isotonics and bottled water.
In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities", which
is required to be adopted in years beginning after June 15, 1999. The Statement
permits early adoption as of the beginning of any fiscal quarter after its
issuance. The Company has not determined at this time when Statement No. 133
will be adopted. The Statement will require the Company to recognize all
derivatives on the balance sheet at fair value. Derivatives that are not hedges
must be adjusted to fair value through income. If the derivative is a hedge,
depending on the nature of the hedge, changes in the fair value of derivatives
will either be offset against the change in fair value of the hedged assets,
liabilities or firm commitments through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be immediately
recognized in earnings. The Company has not yet determined what effect the
adoption of Statement No. 133 will have on the earnings and financial position
of the Company.
HISTORY OF ACQUISITIONS
Since 1984, the Company has expanded its franchise territory throughout
the southeastern United States, primarily through acquisitions, increasing its
net sales from $130 million in 1984 to $929 million in 1998. The Company is
currently the second largest bottler of products of The Coca-Cola Company in
the United States. The Company plans to grow in the future through both
internal opportunities and selected acquisitions.
RESULTS OF OPERATIONS
THE 1998 YEAR IN REVIEW
The Company accelerated its rate of growth significantly in 1998 with
volume growth of more than 10%, three times the U.S. soft drink industry
average. Net sales grew by 16% in 1998, increasing to $929 million. Operating
cash flow (defined as income from operations plus non-cash charges for
depreciation and amortization) increased by 7% to a record level of $117
million. The Company continued its commitment to the cold drink market with the
placement of a record number of new pieces of cold drink equipment in 1998.
The accelerated volume growth in 1998 was across the Company's key market
channels. The volume gains in 1998 were driven by targeted marketing programs
with key customers and continued emphasis and investment in cold drink
equipment and infrastructure. As in 1997, per capita consumption in the
Company's franchise territory increased at a rate in excess of the average for
the Coca-Cola bottling system in the U.S. The increase in net sales in 1998 was
driven primarily by the accelerated volume growth, as well as a small increase
in net selling prices of 0.6% and the impact of a 53rd selling week in 1998.
The 1997 fiscal year had 52 weeks.
Net income for 1998 was down slightly at $14.9 million versus $15.3
million in 1997. During 1998, the Company continued to make significant
investments in cold drink equipment and infrastructure to support accelerated
growth. The increased equipment and infrastructure costs in 1998 were partially
offset by additional marketing funding support from The Coca-Cola Company. The
Company believes that these significant investments will help deliver long-term
shareholder value.
The Company continued its strong commitment to expanding its business with
capital expenditures of $46.8 million in 1998. The cold drink market continues
to be a point of emphasis as it generally provides a solid return on investment
and expands the availability of our products.
S-7
<PAGE>
Our continued success is attributable to many factors including a strong
assortment of brands, a solid relationship with our strategic partner, The
Coca-Cola Company, acquisitions, strong internal growth, solid operating
performance and a work force of over 6,000 talented individuals working
together as a team. The Company continues to focus on its key long-term
objectives, including increasing per capita consumption, operating cash flow
and long-term shareholder value. We are committed to alignment with The
Coca-Cola Company to ensure that we fully utilize our joint resources to
maximize our full potential with our consumers and customers.
Our partnership with The Coca-Cola Company continues to provide our
customers and consumers with innovative products and packaging. In 1998, the
Company introduced new and enhanced product lines, including expanded Minute
Maid offerings and new flavors of both Fruitopia and POWERaDE. Citra was
introduced in the first quarter of 1999. Some of the new packaging in 1998
included tie-ins with our NASCAR sponsorship, which proved to be very popular
with both customers and consumers. The combination of the new products and
packaging, along with our core brands, provide the Company with a line-up of
beverage offerings unsurpassed in the industry.
SIGNIFICANT EVENTS OF PRIOR YEARS
The Company repurchased approximately 930,000 shares of its Common Stock
in three separate transactions between December 1996 and February 1997. The
repurchase of shares was a significant factor in increased earnings per share
in 1997 in spite of lower net earnings.
On June 1, 1994, the Company executed a management agreement with South
Atlantic Canners, Inc. ("SAC"), a manufacturing cooperative located in
Bishopville, South Carolina. The Company is a member of the cooperative and
receives a fee for managing the day-to-day operations of SAC pursuant to this
10-year management agreement. SAC significantly expanded its operations in 1994
by adding two PET bottling lines. These new bottling lines supply a portion of
the Company's volume requirements for finished product in PET containers.
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 of The Coca-Cola Company and other third party licensors, primarily in
certain portions of North Carolina and South Carolina. The Company provides a
portion of the soft drink products to Piedmont and receives a fee for managing
the business of Piedmont pursuant to a management agreement. The Company and
The Coca-Cola Company, through their respective subsidiaries, each beneficially
own a 50% interest in Piedmont. The Company is accounting for its investment in
Piedmont using the equity method of accounting.
1998 COMPARED TO 1997
NET INCOME
The Company reported net income of $14.9 million or basic net income per
share of $1.78 for fiscal year 1998 compared to $15.3 million or $1.82 basic
net income per share for fiscal year 1997. Diluted net income per share in 1998
was $1.75 compared to $1.79 in 1997. The decline in net income is primarily
attributable to expenses related to the Company's investment in the
infrastructure necessary to support accelerated, long-term growth, partially
offset by additional marketing funding support from The Coca-Cola Company.
Investments in additional personnel, information systems and cold drink
equipment resulted in cost increases. Management believes that these
infrastructure investments will enable the Company to generate accelerated
growth that should lead to enhanced shareholder value over time.
NET SALES
Net sales for 1998 grew by 16% to $929 million compared to $802 million in
1997. The increase was due to broad-based volume growth across key sales
channels, an increase in net selling prices of 0.6%, acquisitions of additional
bottling territory in Alabama and Virginia and a 53rd week in the Company's
1998 fiscal year. The Company continued to experience strong growth from its
carbonated soft drinks with growth of approximately 9% in 1998. Newer products
such as SURGE, an expanded line-up of Minute Maid products as well as
double-digit growth for Sprite helped drive the growth in carbonated beverages.
Sales growth in non-carbonated beverages, including POWERaDE, Fruitopia, tea
and bottled water exceeded 70% in 1998. Non-carbonated products now account for
5% of the Company's bottle and can volume.
Sales to other bottlers increased by 25% during 1998 over 1997 levels,
primarily due to additional sales to Piedmont, which experienced significant
sales volume growth in 1998. The Company sells finished products to Piedmont at
cost.
S-8
<PAGE>
COST OF SALES AND OPERATING EXPENSES
Cost of sales on a per case basis increased by 2.3% in 1998, primarily due
to increases in concentrate costs offset somewhat by lower packaging costs. The
Company has agreements with its aluminum can suppliers which require the
Company to purchase the majority of its aluminum can requirements. These
agreements, which extend through the end of 2000 and 2001, also reduce the
variability of the cost of cans.
Selling expenses increased by approximately $24 million or 13% in 1998
over 1997 levels. Increased selling costs resulted from higher sales volume,
employment costs for additional sales personnel, a new incentive program for
certain employees, additional marketing expenses, higher costs for sales
development programs and increased lease expense for cold drink equipment and
vehicles. The increase in selling expenses was partially offset by increased
marketing funding and infrastructure support from The Coca-Cola Company. The
Company has made a significant investment in its sales and technical service
infrastructure and anticipates that over time, the increases in sales revenue
from these investments will outpace the growth in costs. Selling expenses on a
per case basis for 1998 were relatively unchanged from 1997.
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 concentrates, syrups and finished products to the Company make
substantial advertising expenditures to promote sales in the local bottling
territories served by the Company. The Company also benefits from national
advertising programs conducted by The Coca-Cola Company and other third party
licensors. 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 1998 and
1997 was approximately $61 million and $42 million, respectively. A portion of
the marketing funding and infrastructure support from The Coca-Cola Company is
subject to annual performance requirements. The Company was in compliance with
all such performance requirements in 1998.
General and administrative expenses increased by $12 million from 1997.
The increase in general and administrative expenses was due to the hiring of
additional support personnel and higher employment costs in certain of the
Company's labor markets. The Company has made an investment in additional
administrative infrastructure to support the accelerated growth of the Company.
Depreciation expense increased $3 million or 9%. The increase is due to
significant capital expenditures over the past several years, including $46.8
million in 1998.
INVESTMENT IN PARTNERSHIP
The Company's share of Piedmont's net loss of $.5 million was down from a
loss of $1.1 million in 1997. The reduction in Piedmont's net loss reflects
improved operating results from Piedmont.
INTEREST COSTS
Interest expense increased by $2.5 million or 7% in 1998. The increase is
due to additional borrowings used to fund acquisitions and capital
expenditures. The Company's overall weighted average borrowing rate for 1998
was 7.1% compared to 7.0% in 1997.
OTHER INCOME/EXPENSE
"Other income (expense), net" increased by $2.5 million in 1998. The
increase was due primarily to losses on the disposal of cold drink equipment.
INCOME TAXES
The effective tax rate for federal and state income taxes was
approximately 36% in 1998 versus approximately 37% in 1997. The difference
between the effective rate and the statutory rate in 1998 was due primarily to
amortization of nondeductible goodwill, state income taxes, nondeductible
premiums on officers' life insurance and other nondeductible expenses.
S-9
<PAGE>
1997 COMPARED TO 1996
NET INCOME
The Company reported net income of $15.3 million or basic net income per
share of $1.82 for fiscal year 1997 compared to $16.2 million or $1.74 basic
net income per share for fiscal year 1996. Diluted net income per share
increased from $1.73 in 1996 to $1.79 in 1997. The slight decrease in net
income was due to a 2.5% reduction in net selling prices and higher interest
costs associated with the Company's repurchase of its Common Stock. The
repurchase of Common Stock resulted in an increase in both basic and diluted
earnings per share, in spite of reduced net income.
NET SALES
The Company had sales in 1997 exceeding $800 million for the first time.
Net sales for 1997 increased 4%, reflecting a volume increase of 8% in
franchise sales offset by a 2.5% decline in overall net selling prices and a
reduction in sales to other bottlers. The Company continued to see strong
broad-based growth across most brands and channels. Carbonated soft-drink
brands including the flagship brand, Coca-Cola classic, and diet Coke showed
solid growth. Sprite volume increased by almost 15%, the fourth consecutive
year of double-digit volume growth. The Company's expanding non-carbonated
beverage offerings also contributed to the solid volume growth in 1997. Volume
in Fruitopia, POWERaDE and Cool from Nestea increased by more than 50% over the
prior year.
Sales volume to other bottlers decreased by 11% during 1997 as compared to
1996 primarily due to South Atlantic Canners, rather than the Company,
providing finished products to Piedmont. The Company sells finished products to
Piedmont at cost.
COST OF SALES AND OPERATING EXPENSES
Cost of sales on a per case basis was virtually unchanged from 1996. The
Company benefited from decreases in costs for some of the key raw materials and
packaging materials used in its production process. The decreases were offset
by increased concentrate prices.
Selling expenses increased by approximately $5.4 million in 1997,
primarily as a result of the significant increase in volume. Selling expenses
on a per case basis declined by almost 5% during the year. The decline in
selling expenses on a per case basis is partially attributable to the buyout of
certain leased equipment in early 1997. The buyout of the leases reduced
selling expenses by approximately $4.0 million during the year. The Company
experienced a comparable increase in depreciation expense, which is reflected
separately.
General and administrative expenses decreased by $2.0 million in 1997. In
1996, the Company recorded a non-cash, pre-tax charge of approximately $4.4
million related to a retirement benefit awarded to J. Frank Harrison, Jr. This
retirement benefit was in recognition of his two decades of leadership as
Chairman of the Board of Directors.
Depreciation expense increased $5.1 million or 18% in 1997. The increase
was primarily attributable to the buyout of $66.3 million of leased vending
equipment in January 1997. The increase is also due to significant capital
expenditures over the past several years.
INVESTMENT IN PARTNERSHIP
The Company's share of Piedmont's net loss of $1.1 million was
approximately the same as 1996.
INTEREST COSTS
Interest expense increased by $7.1 million or 23% in 1997. The significant
increase was due to increased levels of long-term debt as a result of the
buyout of equipment leases for $66.3 million in January 1997 and the repurchase
of approximately 930,000 shares of the Company's Common Stock for $43.6 million
in late 1996 and early 1997. The Company's overall weighted average borrowing
rate for 1997 was 7.0% compared to 7.1% in 1996.
OTHER INCOME/EXPENSE
The decrease in "other income (expense), net" for 1997 was due primarily
to the termination of the Company's program to sell its trade accounts
receivable in late 1996. The discount on the sale of trade accounts receivable
was recorded as other expense in 1996. Other expense included $1.7 million in
1996 related to the discount on the sale of trade accounts receivable.
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<PAGE>
INCOME TAXES
The effective tax rate for federal and state income taxes was
approximately 37% in both 1997 and 1996. The difference between the effective
rate and the statutory rate was due primarily to amortization of nondeductible
goodwill, state income taxes, nondeductible premiums on officers' life
insurance and other nondeductible expenses.
FINANCIAL CONDITION
Working capital decreased by approximately $15.2 million to $4.6 million
at January 3, 1999 compared to $19.8 million at December 28, 1997. The change
in working capital is primarily due to an increase in the current portion of
long-term debt of $18.1 million and an increase in accrued compensation of $5.2
million, partially offset by an increase in accounts receivable from The
Coca-Cola Company. The increase in accounts receivable from The Coca-Cola
Company relates to additional marketing funding and infrastructure support in
1998. The increase in the current portion of long-term debt is due to the
maturing of $28.6 million of the Company's Medium-Term Notes in the first
quarter of 1999. The increase in accrued compensation is due to the adoption of
new employee incentive programs in 1998.
Total long-term debt increased to $521.3 million at January 3, 1999
compared to $505.8 million at December 28, 1997. The increase in debt relates
to the acquisition of two Coca-Cola bottlers in 1998 for a total of $35.0
million, offset primarily by cash flow from operations.
LIQUIDITY AND CAPITAL RESOURCES
CAPITAL RESOURCES
Sources of capital for the Company include operating cash flows, bank
borrowings, issuance of public or private debt and the issuance of equity
securities. Management believes that the Company, through these sources, has
sufficient financial resources available to maintain its current operations and
provide for its current capital expenditure and working capital requirements,
scheduled debt payments, interest and income tax liabilities and dividends for
shareholders.
INVESTING ACTIVITIES
Additions to property, plant and equipment during 1998 were $46.8 million.
The Company acquired two Coca-Cola bottlers in northwestern Alabama and
southwestern Virginia during 1998 for a total of $35.0 million.
At the end of 1998, the Company had no material commitments for the
purchase of capital assets other than those related to the normal replacement
of equipment. The Company considers the acquisition of additional bottling
territories on an ongoing basis.
FINANCING ACTIVITIES
The Company filed a $400 million shelf registration for debt and equity
securities that was effective in October 1994. On November 1, 1995, the Company
issued $100 million of 6.85% debentures due 2007 pursuant to this shelf
registration. The net proceeds from this issuance were used to repurchase $87
million of the Company's Medium-Term Notes due between 1997 and 2002 and to
repay other outstanding borrowings. In July 1997, the Company issued an
additional $100 million of 7.2% debentures due 2009 under this shelf
registration. The proceeds from this offering were used primarily to repay
amounts outstanding under the Company's lines of credit. The lines of credit
were used as interim financing for the repurchase of Company Common Stock and
the buyout of certain operating leases.
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 not
issued any securities under this shelf registration. The Company expects to use
the proceeds from any future offerings under this registration for general
corporate purposes, including repayment of debt, future acquisitions, capital
expenditures and/or working capital.
The Company borrows from time to time under informal lines of credit from
various banks. On January 3, 1999, the Company had $210 million available under
these lines, of which $36.4 million was outstanding. Loans under these lines
are made at the sole discretion of the banks at rates negotiated at the time of
borrowing.
In December 1997, the Company extended the maturity of a revolving credit
agreement totaling $170 million to December 2002. The agreement contains
several covenants that establish minimum ratio requirements related to debt and
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<PAGE>
cash flow. A commitment fee of 1/8% per year on the available amount of the
banks' commitment is payable quarterly. There were no amounts outstanding under
this facility as of January 3, 1999.
It is the Company's intent to renew any borrowings under the revolving
credit facility and the lines of credit as they mature. 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.
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. As a
result of this purchase, the Company's total cost of ownership of this
equipment in the future is expected to be slightly lower.
INTEREST RATE HEDGING
The Company periodically uses interest rate hedging products to cost
effectively modify risk from interest rate fluctuations in its underlying debt.
The Company has historically altered its fixed/floating 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. Sensitivity
analyses are performed to review the impact on the Company's financial position
and coverage of various interest rate movements. The Company does not use
derivative financial instruments for trading purposes.
The weighted average interest rate of the debt portfolio as of January 3,
1999 was 7.3% compared to 7.1% at the end of 1997. The Company's overall
weighted average borrowing rate on its long-term debt was 7.1% in 1998 versus
7.0% in 1997. Approximately 23% of the Company's debt portfolio of $521.3
million was subject to changes in short-term interest rates as of January 3,
1999. See Notes 7 and 8 to the consolidated financial statements for more
information.
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.
The Company began work on the Year 2000 issue in 1997. The scope of the
project includes: ensuring the compliance of all applications, operating
systems and hardware on mainframe, personal computer, local area network and
wide area network platforms; addressing issues related to non-IT embedded
software and equipment; and addressing the compliance and readiness 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 80% of the remediation or replacement phase has been completed
with the balance of this phase expected to be completed by the end of the
second quarter 1999. The testing phase has begun and is expected to be
completed by the end of the third quarter of 1999.
Approximately 80% of internal application development resources were
committed to Year 2000 remediation efforts in 1997 and 1998. The Company
expects that approximately 70% of its internal application development
resources will be committed to this effort in the first 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 50% 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 1999. Testing is expected to be completed by the end of third
quarter 1999.
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<PAGE>
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 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 and
mitigating risk, but cannot eliminate the potential for disruption due to third
party failure.
The Company is also dependent upon its customers for sales and cash flow.
Year 2000 interruptions in our customers' operations could result in reduced
sales, increased inventory or receivable levels 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 is in the
assessment phase with respect to the evaluation of critical customers' progress
and is scheduled for completion 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 $5 million to $6 million, of which
approximately $4 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 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 Prospectus Supplement, 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 Prospectus Supplement and in the documents incorporated herein by
reference. 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 Prospectus
Supplement 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.
S-13
<PAGE>
DESCRIPTION OF DEBENTURES
This description of particular terms of the Debentures supplements and
replaces (if inconsistent with), the description of the general terms and
provisions of the Debt Securities under the caption "Description of Debt
Securities" in the accompanying Prospectus. Capitalized terms used in this
Prospectus Supplement that are not otherwise defined shall have the meanings
ascribed to them in the accompanying Prospectus.
GENERAL
The Debentures will constitute a series of Debt Securities and will be
issued under the Indenture as described in the accompanying Prospectus.
The % Debentures will mature on , 2009 and will bear interest from
, 1999 at the rate of % per annum, payable semiannually in arrears on
and of each year, commencing on , 1999. Interest on these
Debentures will be payable to the persons in whose names such Debentures are
registered at the close of business on the applicable preceding and .
Interest payable on the Debentures will be calculated on the basis of a 360-day
year consisting of twelve 30-day months.
RANKING
The Debentures will be unsecured senior obligations of the Company,
ranking the same as other unsecured senior obligations of the Company. As of
January 3, 1999, the Company had $521.3 million of debt that would rank the
same as the Debentures, approximately $95 million of which would be repaid with
the proceeds of the offering of the Debentures. The Indenture does not limit
the incurrence of unsecured debt by the Company or its subsidiaries. The
Debentures will be effectively subordinated to any secured debt of the Company,
to the extent of the value of the assets securing such debt. The Indenture
permits, subject to certain limitations, the Company and its Restricted
Subsidiaries (as defined in the Indenture) to incur secured debt.
SINKING FUND
There will be no sinking fund.
OPTIONAL REDEMPTION
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 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.
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<PAGE>
"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.
"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 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.
ISSUANCE AND SETTLEMENT
The Debentures will be issued only in fully registered form, without
coupons, in denominations of $1,000 and integral multiples of $1,000, and will
be issued in book-entry form. Except as set forth in the Prospectus under
"Description of Debt Securities -- Global Securities", book-entry Debentures
will not be issuable in certificate form. See "Book-Entry System" below.
Settlement for the Debentures will be made by the underwriters in
immediately available funds. All payments of principal and interest will be
made by the Company in immediately available funds. The Debentures will be in
the Same-Day Funds Settlement System of The Depository Trust Company and, to
the extent that any secondary market trading in the Debentures is effected
through the facilities of such Depositary, such trades will be settled in
immediately available funds. There can be no assurance of the existence of any
secondary trading market for the Debentures. See "Underwriting" below.
TRUSTEE
Citibank, N.A., the Trustee under the Indenture, has normal commercial
banking relationships with the Company.
PAYMENT OF PRINCIPAL AND INTEREST
Principal of and interest on the Debentures will be payable, and the
transfer of the Debentures will be registrable, at the Corporate Trust Office
of the Trustee in the Borough of Manhattan, The City of New York. In addition,
payment of interest may, at the option of the Company, be made by check mailed
to the Holders of such Debentures at the address of each such Holder as it
appears on the Security Register.
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<PAGE>
DEFEASANCE
The defeasance provisions described in the Prospectus will not be
applicable to the Debentures.
REGISTERED GLOBAL SECURITY
The Debentures will be represented by a global security registered in the
name of The Depository Trust Company (the "Depositary") or its nominee. The
Depositary or its nominee will maintain a record, on its book entry
registration and transfer system, of the principal amounts of Debentures that
are beneficially owned by participants in that system and represented by the
registered global security. A description of the depositary arrangements
generally applicable to the Debentures is set forth in the accompanying
Prospectus under the caption "Description of the Debt Securities -- Global
Securities." The Depositary has confirmed to the Company, the underwriters and
the Trustee that it intends to follow such procedures. The Debentures will not
be issued in definitive form except as described in the accompanying
Prospectus.
The Depositary has advised the Company and the underwriters as follows:
The Depositary is a limited-purpose trust company organized under New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. The Depositary was created to hold securities
of its participants and to facilitate the clearance and settlement of
securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations, and certain other
organizations, some of whom (and/or their representatives), together with the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc., own the Depositary. Access to
the Depositary's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. The rules
applicable to the Depositary and its participants are on file with the
Commission.
UNDERWRITING
Subject to the terms and conditions stated in the Underwriting Agreement
dated among the Company, Salomon Smith Barney Inc, NationsBanc
Montgomery Securities LLC, Goldman, Sachs & Co., First Union Capital Markets
Corp. and SunTrust Equitable Securities Corporation, each of the underwriters
named below has severally agreed to purchase, and the Company has agreed to
sell to such underwriter, the principal amount of Debentures set forth opposite
the name of such underwriter.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF % DEBENTURES
- ------------ --------------------
<S> <C>
Salomon Smith Barney Inc. .........................
NationsBanc Montgomery Securities LLC .............
Goldman, Sachs & Co. ..............................
First Union Capital Markets Corp. .................
SunTrust Equitable Securities Corporation .........
--------------------
Total ............................................ $
====================
</TABLE>
The Underwriting Agreement provides that the obligations of the several
underwriters to purchase the Debentures included in this offering are subject
to approval of certain legal matters by counsel and to certain other
conditions. The underwriters are obligated to purchase all of the Debentures if
they purchase any of the Debentures.
The underwriters propose initially to offer the Debentures to the public
at the public offering price set forth on the cover page of this Prospectus
Supplement and to offer some of the Debentures to certain dealers at the public
offering price less a concession not in excess of % of the principal amount
of the Debentures. The underwriters may allow, and such dealers may reallow, a
discount not in excess of % of the principal amount of the Debentures on
sales to certain other dealers. After the initial public offering, the public
offering price, concession and discount may be changed by the underwriters.
The Debentures are a new issue of securities with no established trading
market. The Company presently does not intend to apply for listing of the
Debentures on any national securities exchange or in the interdealer quotations
system of the National Association of Securities Dealers. The Company has been
advised by the underwriters that they intend to
S-16
<PAGE>
make a market in the Debentures but the underwriters are not obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the existence or liquidity of any trading market for the
Debentures.
The underwriting discounts and commissions to be paid to the underwriters
by the Company in connection with this offering will be % per Debenture, for
a total of $ . In addition, the Company estimates that it will incur other
offering expenses of approximately $ .
The underwriters or their respective affiliates have performed and may in
the future perform various financial advisory, commercial banking, and
investment banking services for the Company from time to time, for which they
have received or will receive customary fees. The underwriters may, from time
to time, engage in transactions with and perform services for the Company in
the ordinary course of business.
Pursuant to the Underwriting Agreement, the Company has agreed to
indemnify the underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, or to contribute to payments the underwriters
may be required to make in respect of any of those liabilities.
In connection with this offering, Salomon Smith Barney Inc., on behalf of
the underwriters, may engage in over-allotment, syndicate covering
transactions, stabilizing transactions and penalty bids. Over-allotment
involves syndicate sales of Debentures in excess of the number of Debentures to
be purchased by the underwriters in the offering, which creates a syndicate
short position. Syndicate covering transactions involve purchases of the
Debentures in the open market after the distribution has been completed in
order to cover syndicate short positions. Stabilizing transactions consist of
certain bids for or purchases of Debentures made for the purpose of preventing
or retarding a decline in the market price of the Debentures while the offering
is in progress. Penalty bids permit the underwriters to reclaim a selling
concession from a syndicate member when Salomon Smith Barney Inc. repurchases
Debentures originally sold by that syndicate member in covering syndicate short
positions. Stabilizing transactions and syndicate covering transactions may
cause the prices of the Debentures to be higher than they would otherwise be in
the open market in the absence of such transactions. These transactions, if
commenced, may be discontinued at any time.
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<PAGE>
PROSPECTUS
[COCA-COLA BOTTLING CO. CONSOLIDATED LOGO APPEARS HERE.]
COCA-COLA BOTTLING CO.
CONSOLIDATED
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
CLASS C COMMON STOCK
---------------
Coca-Cola Bottling Co. Consolidated (the "COMPANY", which may be referred
to herein as "we" or "us"), is a Delaware corporation and is the second largest
Coca-Cola bottler in the United States. The Company's principal executive
offices are located at 1900 Rexford Road, Charlotte, North Carolina, 28211,
Telephone (704) 551-4400. This Prospectus may be used by the Company to offer
and sell, together or separately, one or more of the following types of its
securities (collectively, the "SECURITIES"):
o Debt Securities (in one or more series)
o Preferred Stock (in one or more classes or series)
o Common Stock, $1.00 par value per share
o Class C Common Stock, $1.00 par value per share
These Securities will have an aggregate initial public offering price not
to exceed $800,000,000, and will be offered and sold at prices and on terms to
be determined at the time of sale. The specific terms of the Securities for
which this Prospectus is being delivered (the "OFFERED SECURITIES") will be set
forth in an accompanying supplement to this Prospectus (the "PROSPECTUS
SUPPLEMENT"). These terms may include, where applicable, the initial public
offering price of the Offered Securities, the net proceeds to the Company and
whether the Offered Securities will be listed on any securities exchange.
As described in more detail in the Prospectus Supplement, the Securities
may be offered through an underwriter or underwriting syndicates represented by
one or more managing underwriters, or through dealers. The Securities may also
be sold directly or through agents to investors. See "PLAN OF DISTRIBUTION".
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF OFFERED SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
---------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
---------------
THE DATE OF THIS PROSPECTUS IS JANUARY 22, 1999.
<PAGE>
ABOUT THIS PROSPECTUS
This Prospectus is part of a Registration Statement that we filed with the
Securities and Exchange Commission (the "COMMISSION" or "SEC") utilizing a
"shelf" registration process. Under this shelf process, we may from time to
time over approximately the next two years, sell any combination of the
securities described in this Prospectus in one or more offerings up to a total
dollar amount of $800,000,000 or the equivalent of this amount in foreign
currencies or foreign currency units.
This Prospectus provides you with a general description of the securities
we may offer. Each time we sell securities, we will provide a Prospectus
Supplement that will contain specific information about the terms of that
offering. The Prospectus Supplement also may add, update or change information
contained in this Prospectus. You should read both this Prospectus and any
Prospectus Supplement together with additional information described under the
heading "Where You Can Find More Information About the Company" beginning below
on page 2 of this Prospectus.
YOU SHOULD RELY ONLY ON THE INFORMATION OR REPRESENTATIONS INCORPORATED BY
REFERENCE OR PROVIDED IN THIS PROSPECTUS AND IN THE ACCOMPANYING PROSPECTUS
SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT
INFORMATION. YOU MAY OBTAIN COPIES OF THE REGISTRATION STATEMENT, OR OF ANY
DOCUMENT WHICH WE HAVE FILED AS AN EXHIBIT TO THE REGISTRATION STATEMENT OR TO
ANY OTHER SEC FILING, EITHER FROM THE SEC OR FROM THE CHIEF FINANCIAL OFFICER
OF THE COMPANY AS DESCRIBED BELOW. WE ARE NOT MAKING AN OFFER OF THESE
SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME
THAT THE INFORMATION IN THIS PROSPECTUS OR IN THE ACCOMPANYING PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATES PRINTED ON THE FRONT
OF EACH SUCH DOCUMENT.
WHERE YOU CAN FIND MORE
INFORMATION ABOUT THE COMPANY
The Company files annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any document we file
at the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings also are available
to the public from the SEC's worldwide web site at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" into this Prospectus the
information we file with them, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this Prospectus, and
information that we file later with the SEC will automatically update and
supersede this information. The "file number" used by the SEC to identify
documents filed by the Company is 0-9286. We incorporate by reference the
documents listed below and any future filings we will make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
(1) the Company's Annual Report on Form 10-K for the fiscal year ended
December 28, 1997;
(2) the Company's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 29, 1998, June 28, 1998 and September 27, 1998; and
(3) the description of the Company's Common Stock contained in its
registration statement on Form 8-A filed January 29, 1973, as updated
from time to time by the Company's subsequent filings with the
Securities and Exchange Commission.
You may request a copy of these filings, at no cost, by writing or
telephoning the Company's Chief Financial Officer at the following address:
David V. Singer
Vice President and Chief Financial Officer
Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, North Carolina 28211
Telephone: (704) 551-4400
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FORWARD-LOOKING STATEMENTS
This Prospectus, including the information incorporated by reference
herein, information included in, or incorporated by reference from, future
filings by the Company with the Commission, as well as 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 Prospectus and in the documents incorporated herein by reference. 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 Prospectus 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 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 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. Investors
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.
THE COMPANY
The Company produces, markets and distributes carbonated and noncarbonated
beverages, primarily products of The Coca-Cola Company. The Company has been in
the soft drink manufacturing business since 1902. The Company has grown
significantly since 1984. During this time period, the Company has made several
acquisitions which have resulted in its becoming the second largest Coca-Cola
bottler in the United States.
At present, the Company (including its subsidiaries and its 50% owned
affiliate) holds rights under bottle contracts to produce and market carbonated
soft drinks, primarily products of The Coca-Cola Company, within certain
territories in the states of Alabama, Florida, Georgia, Kentucky, Mississippi,
North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia and
West Virginia. The Company also produces and distributes certain other brands
of soft drinks within such territories. A portion of these soft drink
distribution and marketing operations (primarily in parts of North Carolina and
South Carolina) are conducted through Piedmont Coca-Cola Bottling Partnership
("PIEDMONT"), a joint venture owned equally by the Company and The Coca-Cola
Company through their respective subsidiaries. The Company sold and contributed
certain territories to Piedmont upon its formation. The Company currently
provides part of the finished product requirements for Piedmont and receives a
fee for managing Piedmont's operations under a management agreement.
The Company considers selective acquisitions for additional territories on
an ongoing basis. To achieve its goals, the Company may engage in further
purchases of bottling contract rights and entities possessing such rights and
other related transactions designed to facilitate such purchases.
The Company's principal executive offices are located at 1900 Rexford
Road, Charlotte, North Carolina, 28211, and its telephone number is (704)
551-4400.
USE OF PROCEEDS
The net proceeds we receive from the sale of Securities offered by this
Prospectus and the accompanying Prospectus Supplement will be used for general
corporate purposes. General corporate purposes may include the repayment of
debt, investments in or extensions of credit to our subsidiaries, the financing
of future acquisitions or capital expenditures, and working capital. The net
proceeds also may be invested temporarily or applied to repay short-term debt
until they are used for their stated purpose. The Company is engaged in an
ongoing program of selective acquisitions for additional territories and
regularly evaluates the desirability of making such acquisitions. Except as may
be specifically set forth in the
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accompanying Prospectus Supplement, the Company has no understandings or
agreements with respect to any specific significant acquisition or investment.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The consolidated ratios of earnings to fixed charges for the Company are as
follows:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED FISCAL YEAR ENDED(1)
--------------------------------- ------------------------------------------------------
SEPT. 27, 1998 SEPT. 28, 1997 1997 1996 1995 1994 1993
---------------- ---------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges .. 1.57x 1.67x 1.49x 1.54x 1.51x 1.54x 1.59x
</TABLE>
- ---------
(1) The Company's fiscal year ends on the Sunday nearest December 31.
The above ratios have been computed using amounts for the Company, its
consolidated subsidiaries and its proportionate share of losses incurred by its
fifty percent (50%) owned affiliate. Earnings available for fixed charges
represent earnings before income taxes, extraordinary items and fixed charges.
Fixed charges represent interest incurred plus that portion of rental expense
deemed to be the equivalent of interest.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities which the Company may offer under this Prospectus will
be issued under an 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 in this Prospectus and in
the accompanying Prospectus Supplement to the "Indenture" are to the Indenture
as so supplemented. By mutual agreement among the parties involved, as of
September 15, 1995, Citibank, N.A. succeeded to all of the rights, powers,
duties and obligations of NationsBank of Georgia, N.A. as Trustee under the
Indenture. All references in this Prospectus and in the accompanying Prospectus
Supplement to the "Trustee" refer to Citibank, N.A. and to any other entity
that subsequently may replace Citibank, N.A. as Trustee under the Indenture.
The following summaries of certain provisions of the Indenture are not
complete. These summaries are qualified in their entirety by reference to the
full provisions of the Indenture. The Indenture is filed as an exhibit to the
registration statement of which this Prospectus is a part (Registration
Statement File No. 333-71003; the "REGISTRATION STATEMENT"). Section references
set forth below or in any accompanying Prospectus Supplement refer to such
Sections in the Indenture, which Sections are incorporated herein or therein by
reference. Capitalized terms, unless otherwise defined herein or in any
Prospectus Supplement, have the meanings assigned to them in the Indenture.
Such definitions are incorporated herein by reference.
The Debt Securities may be issued from time to time in one or more series.
The Prospectus Supplement relating to each such series will describe the
particular terms of that series of Debt Securities.
GENERAL
The Indenture does not limit the aggregate amount of Debt Securities that
the Company may issue. We may issue Debt Securities (in one or more series) up
to the principal amount authorized by us from time to time for each such
series. The Debt Securities will be unsecured obligations of the Company and
will rank equally and ratably with other unsecured and unsubordinated
indebtedness of the Company.
Additional terms to be described in an accompanying Prospectus Supplement
for any series of Debt Securities with respect to which this Prospectus is
being delivered ("OFFERED DEBT SECURITIES") are:
o the title and aggregate principal amount of the Offered Debt Securities;
o whether the Offered Debt Securities will be issued in whole or in part in
global form and, if so, the name of the Depositary;
o the issue price or prices for the Offered Debt Securities (expressed as a
percentage of their aggregate principal amount);
o the date or dates on which the principal of the Offered Debt Securities
is payable;
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o the applicable interest rate or rates (if any), and the date or dates
from which any such interest will accrue;
o the Interest Payment Dates on which any such interest will be payable and
the Regular Record Date with respect thereto;
o any obligation of the Company to redeem or repay the Offered Debt
Securities pursuant to sinking fund or similar provisions, or at the
option of a holder of such securities, and the prices and other terms and
conditions applicable to any such redemption or repurchase;
o each office or agency for the payment of principal and any premium and
interest on the Offered Debt Securities (subject to the terms of the
Indenture as described below under "Payment and Paying Agents");
o each office or agency where the Offered Debt Securities may be presented
for registration of transfer or exchange (subject to the terms of the
Indenture as described below under "Denominations; Registration of
Transfers and Exchange");
o the terms and conditions upon which the Offered Debt Securities may be
redeemed, in whole or in part, at the option of the Company, or repaid at
the option of the Holder, prior to Stated Maturity (including, in the case
of an Original Issue Discount Security, the information necessary to
determine the amount due upon redemption or repayment);
o whether the Offered Debt Securities will be issuable in any denominations
other than $1,000 and any integral multiple thereof;
o the portion of the principal amount of Offered Debt Securities that shall
be payable upon declaration of acceleration of maturity (if other than the
principal amount thereof);
o the application, if any, of either or both of the sections of the
Indenture relating to defeasance to the Offered Debt Securities; and
o any other terms of the Offered Debt Securities not inconsistent with the
provisions of the Indenture.
Some of the Debt Securities may be issued as Original Issue Discount
Securities. Original Issue Discount Securities bear no interest or bear
interest at a below-market rate and will be sold at a substantial discount
below their stated principal amount. Special federal income tax considerations
applicable to any Debt Securities issued at an original issue discount,
including Original Issue Discount Securities, will be described in the
accompanying Prospectus Supplement relating thereto. Persons considering the
purchase, ownership or disposition of any Original Issue Discount Securities
should consult their own tax advisors concerning the United States Federal
income tax consequences to them with regard to such purchase, ownership or
disposition in light of their particular situations, as well as any
consequences arising under the laws of any other taxing jurisdiction.
DENOMINATIONS; REGISTRATION OF TRANSFERS AND EXCHANGE
Debt Securities of a given series will be issued only in fully registered
form without coupons in denominations of $1,000 and integral multiples thereof,
unless otherwise specified in the related Prospectus Supplement. (SECTION 302)
Debt Securities may be presented for registration of transfer or for
exchange (duly endorsed or accompanied by a written instrument of transfer duly
executed), at the office of the Security Registrar or at the office of any
transfer agent designated by the Company for any series of Debt Securities and
referred to in the applicable Prospectus Supplement. Such transfer or exchange
will be made without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. The Trustee is the initial
Security Registrar. (SECTION 305) If a Prospectus Supplement states that the
Company has designated any transfer agents (in addition to the Security
Registrar) with respect to any series of Debt Securities, we may at any time
rescind the designation of such transfer agent(s) or approve a change in the
location through which such transfer agent(s) act. The Company, however, will
be required to maintain a transfer agent in each place where principal and any
premium and interest in respect of any such series are payable. The Company may
at any time designate additional transfer agents with respect to any series of
Debt Securities. (SECTION 1002)
If we redeem Debt Securities of any series, the Company will not be
required to (A) issue, register the transfer of or exchange Debt Securities of
such series during a period beginning at the opening of business 15 days before
the mailing of the applicable notice of redemption and ending at the close of
business on the day of such mailing, or (B) register the transfer of or
exchange any Debt Security, or portion thereof, called for redemption, except
the unredeemed portion of any Debt Security being redeemed in part. (SECTION
305)
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PAYMENT AND PAYING AGENTS
Payment of principal of and any premium and interest on Debt Securities
will be made at the office of a Paying Agent or Paying Agents designated by the
Company from time to time. We also may elect to pay interest by check mailed to
the address of the Person entitled thereto as such address appears in the
Security Register. The Company will pay any interest due on Debt Securities on
any interest payment date to the Person in whose name such Debt Security is
registered at the close of business on the Regular Record Date for such
interest. (SECTION 307)
The principal office of the Paying Agent will be designated as the
Company's Paying Agent for payments with respect to Debt Securities. Any other
Paying Agents initially designated by the Company for the Debt Securities will
be named in an applicable Prospectus Supplement. The Company may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts,
except that we will be required to maintain a Paying Agent in each place where
principal and any premium or interest in respect of such series of Debt
Securities are payable. (SECTION 1002)
All moneys paid by the Company to the Trustee or a Paying Agent for the
payment of principal of and any premium or interest on any Debt Security which
remain unclaimed for two years after such amounts have become due and payable
may be paid to the Company. Thereafter, the holder of such Debt Security, as a
general unsecured creditor, may look only to the Company for payment of such
amounts. (SECTION 1003)
GLOBAL SECURITIES
The Debt Securities of any series may be issued in the form of one or more
fully registered securities in global form (a "GLOBAL SECURITY"). Any such
Global Security will be deposited with, or on behalf of, a depositary (the
"DEPOSITARY") identified in the Prospectus Supplement relating to such series.
Such Global Securities will be issued in a denomination or aggregate
denominations in an amount equal to the aggregate principal amount of all
outstanding Debt Securities of the series represented by such Global Security
or Securities. Unless and until it is exchanged in whole or in part for Debt
Securities in definitive registered form, a Global Security may not be
transferred except as a whole by the Depositary for such Global Security to (A)
a nominee of such Depositary (or between such nominees) or (B) to a successor
of such Depositary or a nominee of such successor Depositary. (SECTION 305)
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will apply
to all depositary arrangements.
Upon the issuance of a Global Security, and the deposit of such Global
Security with or on behalf of the applicable Depositary, such Depositary will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the individual Debt Securities represented by such Global
Security to the accounts of institutions that have accounts with such
Depositary or its nominee ("PARTICIPANTS"). Such accounts will be designated
(A) by the underwriters or agents for such Debt Securities or (B) by the
Company, if such Debt Securities are offered and sold directly by the Company.
Ownership of beneficial interests in such Global Security will be limited to
participants or Persons that may hold interests through participants. The
beneficial interests of participants in such Global Security will be shown on,
and the transfer of such ownership interest will be effected only through,
records maintained by the Depositary or its nominee for such Global Security.
The ownership of beneficial interests in such Global Security by Persons that
hold through participants will be shown on, and the transfer of that ownership
interest will be effected only through, records maintained by such participant.
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. The limitations
imposed by these laws may impair the ability of owners to transfer beneficial
interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner or Holder of such Global Security, such Depositary or such
nominee, as the case may be, will be considered the sole owner or Holder of the
individual Debt Securities represented by such Global Security for all purposes
under the Indenture. Except as set forth below, owners of beneficial interests
in a Global Security will not be entitled to have any of the individual Debt
Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
Debt Securities of such series in definitive form and will not be considered
the Holders thereof for any purposes under the Indenture. Accordingly, each
Person owning a beneficial interest in such Global Security must rely on the
procedures of the Depositary and, if such Person is not a participant, on the
procedures of the participant through which such Person owns its interest, to
exercise any rights of a Holder under the Indenture. The Indenture provides
that the Depositary may grant proxies and otherwise authorize participants to
give or take any request, demand,
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authorization, direction, notice, consent, waiver or other action which a
Holder is entitled to give or take under the Indenture. (SECTION 104) The
Company understands that, under existing industry practices, if the Company
requests any action of Holders or if an owner of a beneficial interest in such
Global Security desires to give any notice or take any action that a Holder is
entitled to give or take under the Indenture, the Depositary would authorize
the participants to give such notice or take such action, and participants
would authorize beneficial owners owning through such participants to give such
notice or take such action or would otherwise act upon the instructions of
beneficial owners who own through them.
Principal, premium, if any, and interest payments on individual Debt
Securities represented by a Global Security held by a Depositary or its nominee
will be made by us to the Depositary or its nominee, as the case may be, as the
registered owner of such Global Security. None of the Company, the Trustee or
any Paying Agent for such Debt Securities will have any responsibility or
liability for any aspect of the records of the Depositary or any nominee or
participant relating to, or payments made on account of, beneficial ownership
interests in any such Global Security or Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. (SECTION 308)
The Company understands that, under existing industry practices, the
Depositary for a series of Debt Securities or its nominee, upon receipt of any
payment of principal, premium or interest with respect to a definitive Global
Security representing any of such Debt Securities, will credit immediately
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
as shown on the records of the Depositary or its nominee. The Company also
expects that payments by participants to owners of beneficial interests in such
Global Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name",
and will be the responsibility of such participants.
If the Depositary for a series of Debt Securities is at any time unwilling
or unable to continue as Depositary and a successor Depositary is not appointed
by the Company within 90 days, the Company will issue individual Debt
Securities of such series in definitive form in exchange for the Global
Security or Securities representing such series of Debt Securities. In
addition, we may at any time and in our sole discretion (subject to any
limitations described in the Prospectus Supplement relating to such Debt
Securities) determine not to have the Debt Securities of a series represented
by one or more Global Securities. In such event, the Company will issue
individual Debt Securities of such series in definitive form in exchange for
the Global Security or Securities representing such series of Debt Securities.
(SECTION 305)
Further, if we so specify with respect to the Debt Securities of a series,
an owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to the Company and to the
Depositary for such Global Security, receive Debt Securities of such series in
definitive form. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to have Debt Securities of the series
represented by such Global Security equal in principal amount to such
beneficial interest registered in such owner's name and will be entitled to
physical delivery of such Debt Securities in definitive form. Any Debt
Securities so issued in definitive form will, except as set forth in the
applicable Prospectus Supplement, be issued in denominations of $1,000 and
integral multiples thereof and will be issued in registered form only without
coupons. (SECTION 305)
CERTAIN COVENANTS OF THE COMPANY
CERTAIN DEFINITIONS APPLICABLE TO COVENANTS (SECTION 101):
o "SUBSIDIARY" of the Company is defined as a corporation more than 50% of
the voting stock of which is owned, directly or indirectly, by the Company
and/or one or more Subsidiaries of the Company.
o "RESTRICTED SUBSIDIARY" is defined as a Subsidiary of the Company which
(1) owned a Principal Property as of the date of the Indenture, or (2)
acquires a Principal Property after such date from the Company or a
Restricted Subsidiary other than for cash equal to such property's fair
market value as determined by the Board of Directors of the Company, or
(3) acquires a Principal Property after such date by purchase with funds
substantially all of which are provided by the Company or a Restricted
Subsidiary or with the proceeds of indebtedness for money borrowed, which
indebtedness is guaranteed in whole or in part by the Company or a
Restricted Subsidiary, or (4) is a party to any contract with respect to
the bottling, canning, packaging or distribution of soft drinks or soft
drink products (unless such contract, in the opinion of the Board of
Directors of the Company, is not materially important to the total
business conducted by the Company and its Subsidiaries as an entirety).
o "PRINCIPAL PROPERTY" is defined to mean any bottling, distribution or other
facility, together with the land upon which it is erected and fixtures
comprising a part thereof, owned or leased by the Company or any
Subsidiary, the
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gross book value of which (without deduction of any depreciation reserves)
on the date as of which the determination is being made exceeds 3% of
Consolidated Net Tangible Assets (other than any such facility which, in
the opinion of the Board of Directors of the Company, is not materially
important to the total business conducted by the Company and its
Subsidiaries as an entirety).
o "ATTRIBUTABLE DEBT" is defined to mean the total net amount of rent
required to be paid during the remaining term of certain leases, discounted
at the rate per annum equal to the weighted average interest rate borne by
the Debt Securities.
o "CONSOLIDATED NET TANGIBLE ASSETS" is defined to mean the aggregate amount
of assets (less applicable reserves and other properly deductible items)
after deducting (1) all current liabilities, and (2) goodwill and like
intangibles of the Company and its consolidated subsidiaries.
RESTRICTIONS ON DEBT
The Company:
(1) will not itself, and will not permit any Restricted Subsidiary to, incur
or guarantee any evidence of any indebtedness for money borrowed ("DEBT")
secured by a mortgage, pledge or lien ("MORTGAGE") on any Principal
Property of the Company or any Restricted Subsidiary, or on any share of
capital stock or Debt of any Restricted Subsidiary, without securing or
causing such Restricted Subsidiary to secure the Debt Securities equally
and ratably with (or, at the Company's option, prior to) such secured Debt,
and
(2) will not permit any Restricted Subsidiary to incur or guarantee any
unsecured Debt or to issue any preferred stock, in each instance unless the
aggregate amount of (A) all such Debt, (B) the aggregate preferential
amount to which such preferred stock would be entitled on any involuntary
distribution of assets and (C) all Attributable Debt of the Company and its
Restricted Subsidiaries with respect to sale and leaseback transactions
involving Principal Properties (with the exception of transactions which
are excluded as described in "Restrictions on Sales and Leasebacks" below),
would not exceed 10% of Consolidated Net Tangible Assets.
The above restrictions DO NOT apply to any of the following, which will be
excluded from Debt in any computation under such restrictions:
o Debt secured by Mortgages on property of, or on any shares of capital stock
or Debt of, any corporation, and unsecured Debt of any corporation,
existing at the time such corporation becomes a Restricted Subsidiary,
o Debt secured by Mortgages in favor of the Company or a Restricted
Subsidiary and unsecured Debt payable to the Company or a Restricted
Subsidiary,
o Debt secured by Mortgages in favor of governmental bodies to secure
progress or advance payments,
o Debt secured by Mortgages on property, shares of capital stock or Debt
existing at the time of acquisition thereof (including acquisition through
merger or consolidation) or incurred within certain time limits to finance
the acquisition thereof or construction thereon,
o unsecured Debt incurred within certain time limits to finance the
acquisition of property, shares of capital stock or Debt (other than shares
of capital stock or Debt of the Company) or to finance construction on such
property,
o Debt secured by Mortgages securing industrial revenue bonds, or
o any extension, renewal or replacement of any Debt referred to in any of the
foregoing exceptions.
In addition, the above restrictions do not apply to any issuance of
preferred stock by a Restricted Subsidiary to the Company or another
Restricted Subsidiary, provided that such preferred stock shall not
thereafter be transferrable to any person other than the Company or a
Restricted Subsidiary. (SECTION 1006)
RESTRICTIONS ON SALES AND LEASEBACKS
Neither the Company nor any Restricted Subsidiary may enter into any sale
and leaseback transaction involving any Principal Property, unless, after
giving effect to such transaction, the aggregate amount of all Attributable
Debt of the Company and its Restricted Subsidiaries with respect to all such
transactions plus all Debt to which SECTION 1006 is applicable (as described in
"Restrictions on Debt" above) would not exceed 10% of Consolidated Net Tangible
Assets.
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This restriction does not apply to any of the following, which shall be
excluded in any computation of Attributable Debt under such restriction,
Attributable Debt with respect to any sale and leaseback transaction if:
o the lease is for a period not in excess of three years, including renewal
rights,
o the sale or transfer of the Principal Property is made within a specified
period after the later of its acquisition or construction,
o the lease secures or relates to industrial revenue or pollution control
bonds,
o the transaction is between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries or
o the Company or a Restricted Subsidiary, within 180 days after the sale or
transfer is completed, applies to the retirement of Funded Debt of the
Company or a Restricted Subsidiary ranking on a parity with or senior to
the Debt Securities, or to the purchase of other property which will
constitute Principal Property of a value at least equal to the value of the
Principal Property leased in such sale and leaseback transaction, an amount
not less than the greater of (A) the net proceeds of the sale of the
Principal Property so leased, or (B) the fair market value of the Principal
Property leased. In lieu of applying the proceeds of such sale to the
retirement of Funded Debt, the Company may receive credit for (1) the
principal amount of any Debt Securities (or other notes or debentures
constituting Funded Debt of the Company or a Restricted Subsidiary)
delivered within such 180-day period to the applicable trustee for
retirement and cancellation, and (b) the principal amount of any other
Funded Debt voluntarily retired within such 180-day period. (SECTION 1007)
EVENTS OF DEFAULT AND REMEDIES
The Indenture defines an "Event of Default" whenever used therein with
respect to Debt Securities of any series as one or more of the following
events:
(1) default in the payment of interest, if any, on Debt Securities of such
series for 30 days after becoming due;
(2) default in the payment of principal of (or premium, if any, on) Debt
Securities of such series when due;
(3) default in the deposit of any sinking fund when and as due by the terms
of Offered Debt Securities;
(4) default in the performance of any other covenant for 90 days after
notice;
(5) certain events of bankruptcy, insolvency or reorganization;
(6) a default under, or the acceleration of the maturity date of, any bond,
debenture, note or other evidence of indebtedness of the Company or any
Restricted Subsidiary (other than the Debt Securities of such series) or a
default under any indenture or other instrument under which any such
evidence of indebtedness has been issued or by which it is governed and the
expiration of any applicable grace period specified in such evidence of
indebtedness, indenture or other instrument, if the aggregate amount of
indebtedness with respect to which such default or acceleration has
occurred exceeds $1.0 million; and
(7) any other Event of Default provided with respect to Debt Securities of
such series.
If any Event of Default described above shall occur and be continuing,
then either the Trustee or the Holders of at least 25% in principal amount of
the outstanding Debt Securities of that series may declare the principal amount
(or, if any of the Offered Debt Securities are Original Issue Discount
Securities, such portion of the principal amount of such Debt Securities as may
be specified by the terms thereof) of all of the Offered Debt Securities to be
due and payable immediately. (SECTIONS 501 AND 502)
The Indenture provides that the Trustee, within 90 days after the
occurrence of a default with respect to any series of Debt Securities, shall
notify the Holders of Debt Securities of that series of all uncured defaults
known to it (the term default to mean any event specified above which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to the Offered Debt Securities). Except, however, in the case of
default in the payment of the principal of (or premium, if any) or interest on
any Debt Securities or in the payment of any sinking fund installment with
respect to the Offered Debt Securities, the Trustee is permitted to withhold
such notice if it in good faith determines that the withholding of such notice
is in the interest of the Holders of Debt Securities. (SECTION 602)
The Company is required annually to furnish the Trustee with a certificate
by certain officers of the Company stating whether or not, to the best of their
knowledge, the Company is in default in the fulfillment of its covenants under
the
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Indenture. If there has been a default in the fulfillment of any such covenant,
the certificate must specify the nature and status of each such default.
(SECTION 1005)
The Holders of a majority in principal amount of the outstanding Offered
Debt Securities (voting as one class) will have the right, subject to certain
limitations, to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee with respect to the Offered Debt Securities, and to
waive certain defaults. (SECTIONS 512 AND 513)
The Indenture provides that, if an Event of Default shall occur and be
continuing, the Trustee shall exercise such of its rights and powers under the
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs. (SECTION 601)
Subject to such provisions, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request or
direction of any of the Holders of Debt Securities, unless such Holders first
offer to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction. (SECTION 603)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indenture provides that the Company shall not consolidate with or
merge into, or transfer all or substantially all of its assets to, any person
unless:
(1) that person (including the successor corporation) is a corporation
organized under the laws of the United States of America or any State or
the District of Columbia;
(2) that person (including the successor corporation) assumes by supplemental
Indenture all of the Company's obligations on Debt Securities outstanding
at that time; and
(3) after giving effect thereto, no Event of Default, and no event which,
after notice or lapse of time, would become an Event of Default shall have
occurred and be continuing.
The Indenture further provides that no such consolidation or merger of the
Company with or into any other corporation and no conveyance or transfer of all
or substantially all of its property to any person may be made if, as a result
thereof, any Principal Property of the Company or any Restricted Subsidiary
would become subject to a Mortgage which is not expressly excluded from the
restrictions or permitted by the provisions of SECTION 1006 (see "Restrictions
on Debt") unless the Debt Securities are secured equally and ratably with (or,
at the Company's option, prior to) the Debt secured by such Mortgage by a lien
upon such Principal Property. (SECTION 801)
DEFEASANCE
The accompanying Prospectus Supplement will state whether any defeasance
provision will apply to any Offered Debt Securities which are the subject
thereof.
The Indenture provides, if such provision is made applicable to the Debt
Securities of any series pursuant to SECTION 301 of the Indenture, that the
Company may elect either:
(A) to defease and be discharged from any and all obligations with respect to
such Debt Securities (except for the obligation to register the transfer or
exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency
in respect of the Debt Securities and to hold moneys for payment in trust)
("DEFEASANCE") or
(B) to be released from its obligations with respect to such Debt Securities
under SECTIONS 501(5), 1006 and 1007 of the Indenture (being the
cross-default provisions described in clause (6) under "EVENTS OF DEFAULT
AND REMEDIES" and the restrictions described under "Restrictions on Debt"
and "Restrictions on Sales and Leasebacks", respectively) ("COVENANT
DEFEASANCE"),
upon the deposit with the Trustee (or other qualifying trustee), in trust for
such purpose, of money and/or U.S. Government Obligations which, through the
payment of principal and interest in accordance with their terms, will provide
money in an amount sufficient to pay the principal of (and premium, if any) and
interest, if any, on such Debt Securities, and any mandatory sinking fund or
analogous payments thereon, on the scheduled due dates for such payments. In
the case of defeasance, the Holders of such Debt Securities will be entitled to
receive payments in respect of such Debt Securities solely from such trust.
Such a trust may only be established if, among other things, the Company has
delivered to the
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Trustee an opinion of counsel (as specified in the Indenture) to the effect
that the Holders of such Debt Securities will not recognize income, gain or
loss for federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred. Such opinion, in the case
of defeasance under clause (A) above, must refer to and be based upon a ruling
of the Internal Revenue Service or a change in applicable federal income tax
law occurring after the date of the Indenture. The accompanying Prospectus
Supplement may further describe the provisions, if any, permitting such
defeasance or covenant defeasance with respect to the Debt Securities of a
particular series. (ARTICLE THIRTEEN)
MODIFICATION
Modifications and amendments of the Indenture may be made by the Company
and the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the outstanding Debt Securities issued under the
Indenture which are affected by the modification or amendment (which Holders,
in the case of a Global Security, shall be the Depositary appointed therefor),
provided that no such modification or amendment may, without the consent of
each Holder of any Debt Security affected thereby:
(1) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, such Debt Security;
(2) reduce the principal amount of (or premium, if any) or the interest, if
any, on such Debt Security or the principal amount due upon acceleration of
an Original Issue Discount Security;
(3) change the place or currency of payment of principal (or premium, if any)
or interest, if any, on such Debt Security;
(4) impair the right to institute suit for the enforcement of any such
payment on or with respect to such Debt Security;
(5) reduce the above-stated percentage of Holders of Debt Securities
necessary to modify or amend the Indenture; or
(6) modify the foregoing requirements or reduce the percentage of outstanding
Debt Securities necessary to waive compliance with certain provisions of
the Indenture or for waiver of certain defaults. (SECTION 902)
THE TRUSTEE
Citibank, N.A., is the Trustee under the Indenture. The Company may
maintain deposit accounts and conduct other banking transactions with the
Trustee in the normal course of the Company's business.
DESCRIPTION OF PREFERRED STOCK
Under the Company's Restated Certificate of Incorporation (the
"CERTIFICATE OF INCORPORATION"), the Company's Board of Directors (without any
further vote or action by the Company's stockholders) may authorize the
issuance, in one or more series, of up to (A) 50,000 shares of Convertible
Preferred Stock having a par value of $100.00 per share; (B) 50,000 shares of
Non-Convertible Preferred Stock having a par value of $100.00 per share; and
(C) 20,000,000 shares of Preferred Stock having a par value of $0.01 per share
(collectively, the "PREFERRED STOCK"). The Board of Directors is authorized to
fix the number of shares, the relative powers, preferences and rights, and the
qualifications, limitations or restrictions applicable to each series of
Preferred Stock by resolution authorizing the issuance of such series. As of
the date of this Prospectus, there were no shares of Preferred Stock issued and
outstanding.
The description below sets forth certain general terms and provisions of
each of the three classes of the Company's Preferred Stock to which a
Prospectus Supplement may relate. The specific terms of any series of Preferred
Stock in respect of which this Prospectus is being delivered (the "OFFERED
PREFERRED STOCK") will be described in the accompanying Prospectus Supplement
relating to such Offered Preferred Stock. The following summaries of certain
provisions governing the Company's preferred stock are not complete. These
summaries are subject to, and are qualified in their entirety by reference to,
the Certificate of Incorporation and the certificate of designations relating
to each particular series of Offered Preferred Stock, which will be filed with
the Commission (and incorporated by reference in the Registration Statement) in
connection with such Offered Preferred Stock.
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GENERAL
The Offered Preferred Stock, when issued in accordance with the terms of
the Certificate of Incorporation and of the applicable certificate of
designations and as described in the applicable Prospectus Supplement, will be
fully paid and non-assessable.
To the extent not fixed in the Certificate of Incorporation, the relative
rights, preferences, powers, qualifications, limitations or restrictions of the
Offered Preferred Stock of any series will be as fixed by the Board of
Directors pursuant to a certificate of designations relating to such series.
The Prospectus Supplement relating to the Offered Preferred Stock of each such
series shall specify the terms thereof, including:
(1) The class, series title or designation and stated value (if any) for such
Offered Preferred Stock;
(2) The maximum number of shares of Offered Preferred Stock in such series,
the liquidation preference per share and the offering price per share for
such series;
(3) The dividend preferences and the dividend rate(s), period(s) and/or
payment date(s) or method(s) of calculation thereof applicable to such
Offered Preferred Stock;
(4) The date from which dividends on such Offered Preferred Stock will
accumulate, if applicable, and whether dividends will be cumulative;
(5) The provisions for a retirement or sinking fund, if any, with respect to
such Offered Preferred Stock;
(6) The provisions for redemption, if applicable, of such Offered Preferred
Stock;
(7) The voting rights, if any, of shares of such Offered Preferred Stock;
(8) Any listing of such Offered Preferred Stock for trading on any securities
exchange or any authorization of such Offered Preferred Stock for quotation
in an interdealer quotation system of a registered national securities
association;
(9) The terms and conditions, if applicable, upon which such Offered
Preferred Stock will be convertible into, or exchangeable for, any other
securities of the Company, including the title of any such securities and
the conversion or exchange price therefor;
(10) A discussion of federal income tax considerations applicable to such
Offered Preferred Stock; and
(11) Any other specific terms, preferences, rights, limitations or
restrictions of such Offered Preferred Stock.
Subject to the terms of the Certificate of Incorporation and to any
limitations contained in the certificate of designations pertaining to any
then-outstanding series of Preferred Stock, the Company may issue additional
series of Preferred Stock at any time or from time to time, with such powers,
preferences and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof, as the Board of Directors
shall determine, all without further action of the stockholders, including the
holders of any then-outstanding series of any class of Preferred Stock of the
Company.
DIVIDENDS
Holders of any series of Offered Preferred Stock will be entitled to
receive cash dividends when, as and if declared by the Board of Directors of
the Company out of funds of the Company legally available therefor, at such
rate and on such dates as will be set forth in the applicable Prospectus
Supplement. Each dividend will be payable to holders of record as they appear
on the stock books of the Company on the record date fixed by the Board of
Directors. Dividends, if cumulative, will be cumulative from and after the date
set forth in the applicable Prospectus Supplement.
LIQUIDATION RIGHTS
The Company's Certificate of Incorporation provides that, in the event of
a liquidation or dissolution of the Company, or a winding up of its affairs,
whether voluntary or involuntary, or in the event of a merger or consolidation
of the Company, no distributions will be made to holders of any class of the
Company's common stock until after payment or provision for payment of the
debts or liabilities of the Company and any amounts to which holders of shares
of any class of the Company's preferred stock shall be entitled. The applicable
Prospectus Supplement will specify the amount and type of distributions to
which the holders of any series of Offered Preferred Stock would be entitled
upon the occurrence of any such event.
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REDEMPTION
If so stated in the applicable Prospectus Supplement, the Offered
Preferred Stock will be redeemable in whole or in part at the option of the
Company, at the times, at the redemption prices and in accordance with any
additional terms and conditions set forth in the Prospectus Supplement.
VOTING RIGHTS
Except as expressly required by applicable law, the holders of any series
of Offered Preferred Stock will not be entitled to vote on any matter submitted
for approval by the Company's shareholders.
CONVERSION
If shares of the Offered Preferred Stock are convertible into any other
class of the Company's securities, the accompanying Prospectus Supplement will
set forth the applicable terms and conditions relating to such conversion. Such
terms will include the designation of the security into which the shares are
convertible, the conversion price, the conversion period, whether conversion
will be at the option of the holder or the Company, any events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of the Offered Preferred Stock. If the Offered
Preferred Stock is convertible into Common Stock or into any other security of
the Company for which there exists an established public trading market at the
time of such conversion, such terms may include provisions for calculating the
amount of such security to be received by the holders of the Offered Preferred
Stock according to the market price of such security as of a time stated in the
accompanying Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
AND CLASS C COMMON STOCK
GENERAL
The Company may issue shares of its Common Stock and/or Class C Common
Stock, either separately or together with or upon the conversion of or in
exchange for other Securities. If this Prospectus is being delivered in
connection with such an issuance, all of the details thereof will be set forth
in the accompanying Prospectus Supplement. The following summaries are not
complete and are subject to, and are qualified in their entirety by reference
to, the following documents: (A) the Certificate of Incorporation; (B) the
Company's By-Laws, as amended to date (the "BY-LAWS"); and (C) the certificate
of designations filed by the Company with respect to shares of any series of
Preferred Stock which may be issued subsequent to the date of this Prospectus
(and as described in any applicable Prospectus Supplement). Copies of each of
the Restated Certificate of Incorporation of the Company and the Bylaws of the
Company, as amended, are filed as exhibits to the Registration Statement.
In addition to the three classes of Preferred Stock described above, the
authorized capital stock of the Company consists of
o 30,000,000 shares of Common Stock having a par value of $1.00 per share;
o 10,000,000 shares of Class B Common Stock having a par value of $1.00 per
share; and
o 20,000,000 shares of Class C Common Stock having a par value of $1.00 per
share.
As of January 22, 1999, the Company had issued and outstanding: (i)
6,023,739 shares of Common Stock; (ii) options to purchase an aggregate of
250,000 shares of Common Stock, which options are currently exercisable; and
(iii) 2,341,108 shares of Class B Common Stock. There are no outstanding shares
of Class C Common Stock.
The outstanding shares of Common Stock and Class B Common Stock are, and
any shares of Common Stock or Class C Common Stock offered hereby will be, upon
issuance and payment therefor in accordance with the Certificate of
Incorporation and as described in the applicable Prospectus Supplement, fully
paid and non-assessable.
VOTING RIGHTS
Except to the extent otherwise provided by law, holders of Common Stock,
Class B Common Stock and Class C Common Stock vote together as a single voting
group on any matters brought before the Company's shareholders. Holders of
Common Stock are entitled to one (1) vote per share on all such matters, while
holders of Class B Common Stock
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are entitled to twenty (20) votes per share on all such matters and holders of
Class C Common Stock are entitled to one-twentieth ( 1/20) vote per share on
all such matters. Neither Common Stock, Class B Common Stock nor Class C Common
Stock possess any cumulative voting rights under the Certificate of
Incorporation.
Under the Certificate of Incorporation, the Company may not change the
relative rights, preferences, privileges, restrictions, dividend rights, voting
powers or other powers of the Common Stock, Class B Common Stock or Class C
Common Stock without approval by the holders of each class of stock adversely
affected thereby (voting as a separate class). Such approval requires the
affirmative vote of not less than two-thirds ( 2/3) of all the votes entitled
to be cast by the holders of each such class of stock. In the case, however, of
a proposed increase in the authorized number of shares of Common Stock, Class B
Common Stock or Class C Common Stock, the Certificate of Incorporation requires
approval by a majority of all the votes entitled to be voted by holders of
Common Stock, Class B Common Stock and Class C Common Stock, voting together as
a single class.
DIVIDENDS
GENERAL.
Subject to any prior rights of holders of any then-outstanding shares of
Preferred Stock, and to the provisions regarding relative dividend rights
discussed below, holders of all three classes of the Company's common stock are
entitled to receive dividends when, as and if declared by the Company's Board
of Directors out of funds legally available therefor. See also "DESCRIPTION OF
PREFERRED STOCK -- Dividends".
RELATIVE DIVIDEND RIGHTS.
Holders of Class B Common Stock are entitled to receive such dividends,
including stock dividends (if any), in such amounts and at such rates per share
as may be declared by the Company's Board of Directors out of funds legally
available therefor; provided, however, that any such dividends may not exceed
any such dividends declared and paid to holders of Common Stock. Holders of
Common Stock are entitled to receive such dividends, including stock dividends
(if any), in such amounts and at such rates as may be declared by the Board of
Directors out of funds legally available therefor. Dividends declared and paid
to holders of Common Stock may exceed any dividends declared and paid to
holders of Class B Common Stock. A dividend of shares may be declared and paid
in Common Stock to holders of Common Stock and in Class B Common Stock to
holders of Class B Common Stock, if the number of shares paid per share to
holders of Common Stock and Class B Common Stock are the same.
Any dividends declared and paid on Common Stock and Class C Common Stock
must be equal in amount or value and may exceed, but not be less than, any such
dividends declared and paid to holders of Class B Common Stock. Dividends of
shares of Common Stock may be paid to holders of Common Stock and Class C
Common Stock only, or to holders of all classes of the Company's common stock
if the number of shares paid per share to such holders is the same. Similarly,
dividends of shares of Class B Common Stock may be paid to holders of Common
Stock and Class C Common Stock only, or to holders of all classes of the
Company's common stock if the number of shares paid per share to such holders
is the same. Dividends of shares of Class C Common Stock may be paid to holders
of Common Stock and Class C Common Stock only, or to holders of all classes of
the Company's common stock if the number of shares paid per share to such
holders is the same. Additionally, a dividend of Common Stock may be paid to
holders of Common Stock simultaneously with a dividend of Class B Common Stock
to holders of Class B Common Stock and a dividend of Class C Common Stock to
holders of Class C Common Stock, provided that the number of shares paid per
share to holders of each such class is the same.
If only shares of Class B Common Stock and Class C Common Stock are
outstanding, then a dividend of shares of Class C Common Stock, Class B Common
Stock or Common Stock may be declared and paid to holders of Class C Common
Stock only or to holders of Class B Common Stock and Class C Common Stock if
the number of shares paid per share to such holders is the same; PROVIDED that
a dividend of shares of Class B Common Stock may be paid to holders of Class B
Common Stock while holders of Class C Common Stock receive Common Stock or
Class C Common Stock if the number of shares paid to such holders is the same.
Additionally, if only shares of Class B Common Stock and Class C Common Stock
are outstanding, a dividend of shares of Common Stock or Class B Common Stock
may be declared and paid to holders of Class B Common Stock, provided that a
dividend of shares of Common Stock or Class C Common Stock is declared and paid
to holders of Class C Common Stock and the number of shares paid per share to
such holders is the same.
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If only shares of Common Stock and Class C Common Stock are outstanding,
then a dividend of shares of Common Stock, Class B Common Stock, or Class C
Common Stock may be declared and paid to the holders of both Common Stock and
Class C Common Stock; provided that the number of shares paid per share to such
holders is the same. Additionally, if only shares of Common Stock and Class C
Common Stock are outstanding, a dividend of Common Stock may be paid to holders
of Common Stock and a dividend of Class C Common Stock paid to holders of Class
C Common Stock if the number of shares paid per share to such holders is the
same.
PREEMPTIVE RIGHTS
Generally, holders of the Common Stock, Class B Common Stock and Class C
Common Stock do not have any preemptive or other rights to subscribe for
additional shares of any class of the Company's capital stock. If, in the
future, the Company takes any action that gives such rights to holders of any
shares of Common Stock, Class B Common Stock or Class C Common Stock, the terms
of such rights will be described in an applicable Prospectus Supplement.
LIQUIDATION RIGHTS
The Certificate of Incorporation provides that, in the event of any
liquidation or dissolution of the Company, or a winding up of its affairs,
whether voluntary or involuntary, or in the event of a merger or consolidation
of the Company, no distributions will be made to holders of any class of the
Company's common stock until after payment or provision for payment of the
debts or liabilities of the Company, plus any amounts payable to holders of
shares of any then-outstanding class of Preferred Stock. After the Company
makes such payments (or provisions therefor), holders of the Common Stock,
Class B Common Stock and Class C Common Stock would be entitled to share
ratably (I.E., an equal amount of assets for each share of such stock) in the
distribution of the remaining assets of the Company.
CONVERSION RIGHTS
Shares of Common Stock and Class C Common Stock do not possess any
conversion rights. Shares of Class B Common Stock are convertible, at the
option of the holder and without the payment of any additional consideration to
the Company, into shares of Common Stock on a one share for one share basis.
Shares of Class B Common Stock are not convertible into shares of Class C
Common Stock.
TRANSFERABILITY AND PUBLIC TRADING MARKET
There are no restrictions on the transferability of shares of Common
Stock, Class B Common Stock or Class C Common Stock. The Common Stock currently
trades on The Nasdaq Stock Market (National Market) with the symbol "COKE".
Neither the Class B Common Stock nor the Class C Common Stock is currently
listed for trading on any securities exchange or authorized for quotation in an
interdealer quotation system of a registered national securities association.
OTHER FACTORS
PROVISION REGARDING REDEMPTION OR CALL OF CLASS C COMMON STOCK.
The Certificate of Incorporation specifically provides that shares of the
Class C Common Stock shall not be made subject to any redemption or call by the
Company.
STOCK SPLITS AND REVERSE STOCK SPLITS.
The Certificate of Incorporation provides that, except for dividends of
the Company's stock, which are governed by the provisions described above,
shares of Class B Common Stock outstanding at any time shall not be split up or
subdivided, whether by stock distribution, reclassification, recapitalization
or otherwise, so as to increase the number of shares thereof issued and
outstanding, unless at the same time the shares of Common Stock are split up or
subdivided in like manner, in order to maintain the same proportionate equity
ownership (I.E., the same proportion of shares held by each class) between the
holders of Common Stock and Class B Common Stock as existed on the record date
of any such transaction.
Except in the case of dividends of the Company's stock, the Certificate of
Incorporation also provides that, if shares of Common Stock and Class B Common
Stock outstanding at any time are split or subdivided, whether by stock
distribution, reclassification, recapitalization or otherwise, so as to
increase the number of shares thereof issued and outstanding,
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then the shares of Class C Common Stock shall be split or subdivided in like
manner, in order to maintain the same proportionate equity ownership (I.E., the
same proportion of shares held by each class) among the holders of Common
Stock, Class B Common Stock and Class C Common Stock as existed on the date
prior to such split or subdivision. Similarly, if shares of Class C Common
Stock shall be split or subdivided in any manner, then all other outstanding
classes of the Company's common stock shall be proportionately split or
subdivided.
In the case of reverse splits, the Certificate of Incorporation provides
that shares of Common Stock outstanding at any time shall not be reverse split
or combined, whether by reclassification, recapitalization or otherwise, so as
to decrease the number of shares thereof issued and outstanding, unless at the
same time the shares of Class B Common Stock are reverse split or combined in
like manner in order to maintain the same proportionate ownership between the
holders of Common Stock and Class B Common Stock as existed on the record date
of any such transaction.
The Certificate of Incorporation also provides that if shares of Common
Stock and Class B Common Stock outstanding at any time are reverse split or
combined, whether by reclassification, recapitalization or otherwise, so as to
decrease the number of shares thereof issued and outstanding, then the shares
of all other classes of the Company's common stock also shall be reverse split
or combined in like manner in order to maintain the same proportionate
ownership (I.E., the same proportion of shares held by each class) between the
holders of Common Stock, Class B Common Stock and Class C Common Stock as
existed on the date prior to the reverse split or combination. Similarly, if
shares of Class C Common Stock are reverse split or combined in any manner, all
other outstanding classes of the Company's common stock shall be
proportionately reverse split or combined.
CLASSIFICATION OF BOARD OF DIRECTORS.
The Company's Board of Directors is divided into three approximately equal
classes, having staggered terms of office of three years each. This
classification of the Board cannot be changed without approval by the
affirmative vote of the holders of not less than two thirds of all of the
outstanding shares of Common Stock, Class B Common Stock and Class C Common
Stock, voting together as a single class.
PLAN OF DISTRIBUTION
The distribution of the Securities may be effected from time to time in
one or more transactions at a fixed price or prices (which may be changed from
time to time), at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Company
also may offer and sell the Securities in exchange for one or more of its
outstanding issues of debt or convertible debt securities, or in exchange for
one or more classes of securities of other issuers in connection with business
combination transactions. Each Prospectus Supplement will describe the method
of distribution of the Securities offered therein.
We may sell Securities in any of three ways: (1) through underwriters or
dealers; (2) through agents; or (3) directly to one or more purchasers. The
accompanying Prospectus Supplement with respect to a particular offering of
Securities will set forth the terms of the offering of such Securities,
including the name or names of any underwriters, dealers or agents, the
purchase price of such Securities, the proceeds to the Company from such sale,
any delayed delivery arrangements, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price, any
discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which such Securities may be listed.
If underwriters are used in the sale, the Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
Securities may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more
firms acting as underwriters. The underwriter or underwriters with respect to a
particular underwritten offering of the Securities will be named in the
Prospectus Supplement relating to such offering, and if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth
on the cover of such Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement relating thereto, the obligations of the underwriters or
agents to purchase a particular offering of Securities will be subject to
conditions precedent, and the underwriters will be obligated to purchase all
the particular Securities offered if any are purchased.
If dealers are utilized in the sale of a particular offering of Securities
with respect to which this Prospectus is delivered, the Company will sell such
Securities to the dealers as principals. The dealers may then resell such
Securities to the public at varying prices to be determined by such dealers at
the time of resale. The names of the dealers and the terms of
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the transaction will be set forth in the Prospectus Supplement relating
thereto. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
Only underwriters named in a Prospectus Supplement will be deemed to be
underwriters in connection with the Securities described therein. Firms not so
named will have no direct or indirect participation in the underwriting of such
Securities, although such a firm may participate in the distribution of such
Securities under circumstances entitling it to a dealer's commission. It is
anticipated that any underwriting agreement pertaining to any such Securities
will (1) entitle the underwriters to indemnification by the Company against
certain civil liabilities under the Securities Act or to contribution with
respect to payments which the underwriters may be required to make in respect
thereof, (2) provide that the obligations of the underwriters will be subject
to certain conditions precedent and (3) provide that the underwriters generally
will be obligated to purchase all such Securities if any are purchased.
Securities also may be offered directly by the Company or through agents
designated by the Company from time to time at fixed prices, which may be
changed, or at varying prices determined at the time of sale. Any such agent
will be named, and the terms of any such agency (including any commissions
payable by the Company to such agent) will be set forth, in the Prospectus
Supplement relating thereto. Unless otherwise indicated in such Prospectus
Supplement, any such agent will act on a reasonable best efforts basis for the
period of its appointment. Agents named in a Prospectus Supplement may be
deemed to be underwriters (within the meaning of the Securities Act) of the
Securities described therein and, under agreements which may be entered into
with the Company, may be entitled to indemnification by the Company against
certain civil liabilities under the Securities Act or to contribution with
respect to payments which the agents may be required to make in respect
thereof.
If so indicated in a Prospectus Supplement, the Company will authorize
underwriters or other agents of the Company to solicit offers by certain
specified entities to purchase Securities from the Company pursuant to delayed
delivery contracts providing for payment and delivery at a specified future
date. The obligations of any purchaser under any such contract will not be
subject to any conditions except those described in such Prospectus Supplement.
Such Prospectus Supplement will set forth the commissions payable for
solicitations of such contracts.
Underwriters and agents may purchase and sell Securities in the secondary
market, but are not obligated to do so. There can be no assurance that there
will be a secondary market for the Securities or liquidity in the secondary
market if one develops. From time to time, underwriters and agents may make a
market in the Securities. A particular offering of Securities may or may not be
listed on a national securities exchange.
Underwriters and agents may engage in transactions with, or perform
services for, the Company and its subsidiaries in the ordinary course of
business.
EXPERTS
The financial statements incorporated in the Prospectus by reference to
the Annual Report on Form 10-K of Coca-Cola Bottling Co. Consolidated for the
fiscal year ended December 28, 1997, have been so incorporated in reliance on
the reports of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
Any financial statements and schedules hereafter incorporated by reference
in the Registration Statement of which this Prospectus is a part that have been
audited and are the subject of a report by independent accountants will be so
incorporated by reference in reliance upon such reports and upon the authority
of such firms as experts in auditing and accounting to the extent covered by
consents filed with the Commission.
LEGAL OPINIONS
Certain legal matters relating to the Securities offered hereby will be
passed upon for the Company by Witt, Gaither & Whitaker, P.C., 1100 SunTrust
Bank Building, Chattanooga, Tennessee 37402, and for any underwriters or agents
by Cravath, Swaine & Moore. As of January 22, 1999, members of Witt, Gaither &
Whitaker, P.C. reported ownership of shares of the Company's Common Stock as
follows: John W. Murrey, III, 1,000 shares; Hugh J. Moore, Jr., 100 shares; and
Harold A. Schwartz, Jr., 100 shares. John W. Murrey, III is a director of the
Company and John F. Henry, Jr., Secretary of the Company, also is a member of
Witt, Gaither & Whitaker, P.C..
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$250,000,000
COCA-COLA BOTTLING CO. CONSOLIDATED
% DEBENTURES DUE 2009
[COCA-COLA BOTTLING CO. CONOLIDATED LOGO APPEARS HERE.]
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PROSPECTUS SUPPLEMENT
APRIL , 1999
(INCLUDING PROSPECTUS
DATED JANUARY 22, 1999)
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BOOK RUNNING LEAD MANAGER SENIOR CO-MANAGER
SALOMON SMITH BARNEY NATIONSBANC MONTGOMERY
SECURITIES LLC
FIRST UNION CAPITAL MARKETS CORP. GOLDMAN, SACHS & CO. SUNTRUST EQUITABLE
SECURITIES
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