<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: November 14, 1996
(Date of earliest event reported)
COCA-COLA ENTERPRISES INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 1-09300 58-0503352
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
2500 WINDY RIDGE PARKWAY, ATLANTA, GEORGIA 30339
(Address of principal executive offices, including zip code)
(770) 989-3000
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS.
The Company is filing, as exhibits to this Report, pro forma financial
information for the nine-month period ended September 27, 1996, which sets forth
the combined results of operations and financial position of the Company
including certain completed and pending acquisitions. This information includes
unaudited financial statements of Amalgamated Beverages Great Britain Limited
for the 40-week periods ended October 5, 1996 and October 7, 1995.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
Exhibit 99.1 Amalgamated Beverages Great Britain Limited Report and Accounts -
for the 40-week periods ended 7 October 1995 and 5 October 1996
(unaudited):
Group Profit and Loss Account
Group Balance Sheet
Group Cash Flow Statement
Notes on the Accounts
Exhibit 99.2 Coca-Cola Enterprises Inc. Pro Forma Combined Condensed Financial
Information - for the nine-month period ended September 27,
1996 (unaudited):
Introductory Information
Pro Forma Combined Condensed Statement of Operations for the
Nine Months Ended September 27, 1996
Pro Forma Combined Condensed Statements of Operations for the
Quarters Ended March 29, 1996, June 28, 1996 and
September 27, 1996
Pro Forma Combined Condensed Balance Sheet as of September
27, 1996
Notes to Unaudited Pro Forma Combined Condensed Financial
Information
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COCA-COLA ENTERPRISES INC.
(Registrant)
By: /s/ Lowry F. Kline
-------------------------
Name: Lowry F. Kline
Title: Senior Vice President and
General Counsel
Date: November 13, 1996
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit Page No.
- ------------ ---------------------- --------
Exhibit 99.1 Amalgamated Beverages Great Britain Limited Report
and Accounts - for the 40-week periods ended
7 October 1995 and 5 October 1996 (unaudited):
Group Profit and Loss Account........................ F-1
Group Balance Sheet.................................. F-2
Group Cash Flow Statement............................ F-3
Notes on the Accounts................................ F-4
Exhibit 99.2 Coca-Cola Enterprises Inc. Pro Forma Combined Condensed
Financial Information - for the nine-month period ended
September 27, 1996 (unaudited):
Introductory Information............................. PF-1
Pro Forma Combined Condensed Statement of Operations
for the Nine Months Ended September 27, 1996.... PF-4
Pro Forma Combined Condensed Statements of Operations
for the Quarters Ended March 29, 1996, June 28,
1996 and September 27, 1996..................... PF-6
Pro Forma Combined Condensed Balance Sheet as of
September 27, 1996.............................. PF-7
Notes to Unaudited Pro Forma Combined Condensed
Financial Information........................... PF-8
<PAGE>
<TABLE>
<CAPTION>
GROUP PROFIT AND LOSS ACCOUNT
FOR THE 40 WEEKS ENDED 7 OCTOBER 1995 AND 5 OCTOBER 1996
(Unaudited)
- ----------------------------------------------------------------------------------
1995 1996
(Pounds)'000 (Pounds)'000
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
TURNOVER 705,894 716,700
Cost of sales (481,998) (476,346)
-------- --------
GROSS PROFIT 223,896 240,354
Net operating expenses (122,283) (147,695)
-------- --------
Operating Profit 101,613 92,659
Profit (loss) on sale of tangible fixed assets (648) 248
-------- --------
PROFIT ON ORDINARY ACTIVITIES BEFORE
INTEREST 100,965 92,907
Net interest (941) (5,135)
-------- --------
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION 100,024 87,772
Tax on profit on ordinary activities (33,389) (29,955)
-------- --------
PROFIT FOR THE PERIOD 66,635 57,817
Dividends to ordinary shareholders - (100,000)
-------- --------
Transfer to (from) retained earnings for
the period 66,635 (42,183)
======== ========
</TABLE>
The accompanying notes are an integral part of this profit and loss account.
F-1
<PAGE>
<TABLE>
<CAPTION>
GROUP BALANCE SHEET
AS AT 30 DECEMBER 1995 AND 5 OCTOBER 1996
(Unaudited)
- -------------------------------------------------------------------------------
1995 1996
(Pounds)'000 (Pounds)'000
- -------------------------------------------------------------------------------
<S> <C> <C>
FIXED ASSETS
Tangible assets 199,519 199,317
------- -------
CURRENT ASSETS
Stocks 33,029 44,700
Debtors 143,950 153,233
Cash at bank and in hand 21,371 597
------- -------
198,350 198,530
Creditors: Amounts falling due
within one year (246,187) (290,510)
------- -------
NET CURRENT ASSETS/(LIABILITIES) (47,837) (91,980)
------- -------
TOTAL ASSETS LESS CURRENT
LIABILITIES 151,682 107,337
Creditors: Amounts falling due after
more than one year (37,813) (35,465)
Provisions for liabilities and charges (8,007) (8,191)
------- -------
NET ASSETS 105,862 63,681
======= =======
EQUITY CAPITAL AND RESERVES
Called-up equity share capital 204 204
Other reserves 57,811 57,811
Merger reserve (17,484) (17,484)
Profit and loss account 65,322 23,141
CALLED-UP NON-EQUITY SHARE
CAPITAL 9 9
------- -------
TOTAL CAPITAL EMPLOYED 105,862 63,681
======= =======
</TABLE>
The accompanying notes are an integral part of this balance sheet.
F-2
<PAGE>
<TABLE>
<CAPTION>
GROUP CASH FLOW STATEMENT
FOR THE 40 WEEKS ENDED 7 OCTOBER 1995 AND
5 OCTOBER 1996
(Unaudited)
- ----------------------------------------------------------------------------------
1995 1996
(Pounds)'000 (Pounds)'000
- ----------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net cash inflow from operating
activities 135,503 219,588
RETURNS ON INVESTMENTS AND SERVICING OF
FINANCE
Interest paid (3,474) (5,578)
Interest received 2,474 343
Dividends paid to shareholders (86,600) (168,200)
------- -------
(87,600) (173,435)
------- -------
TAXATION
U.K. Corporation tax paid (37,271) (45,068)
INVESTING ACTIVITIES
Purchase of tangible fixed assets (18,220) (36,096)
Receipts from sale of tangible fixed
assets 1,741 1,188
------- -------
(16,479) (34,908)
------- -------
NET CASH OUTFLOW BEFORE FINANCING (5,847) (33,823)
FINANCING ACTIVITIES
Finance leases repaid (4,329) (3,015)
------- -------
(4,329) (3,015)
------- --------
DECREASE IN CASH AND CASH EQUIVALENTS (10,176) (36,838)
======= ========
</TABLE>
The accompanying notes are an integral part of this statement.
F-3
<PAGE>
NOTES ON THE ACCOUNTS
1. Basis of Presentation
---------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared under the historical cost convention following accounting policies in
accordance with generally accepted accounting principles applicable in the
United Kingdom for interim financial information and with the instructions to
Form 8-K and Article 10 of Regulation S-X. Accordingly, they do not include all
information and notes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments,
consisting of normal recurring accruals, considered necessary for a fair
presentation, have been included. For further information, refer to the
consolidated financial statements and footnotes included in the Amalgamated
Beverages Great Britain Limited annual report for the year ended 30 December
1995.
2. Seasonality of Business
-----------------------
Operating results for the 40 weeks ended 7 October 1995 and 5 October 1996 are
not indicative of results that may be expected for the years ended 30 December
1995 and 28 December 1996, respectively, primarily due to the seasonality of
the Company's business. Unit sales of the Company's products are generally
greater in the second and third quarters due to seasonal factors.
3. Group Accounts
--------------
The profit and loss accounts cover the 40 weeks from 1 January 1995 to 7 October
1995, and the 40 weeks from 31 December 1995 to 5 October 1996. The balance
sheets for 1995 and 1996 have been drawn up at 30 December 1995 and 5 October
1996, respectively.
4. Summary of Differences Between UK and US Generally Accepted Accounting
----------------------------------------------------------------------
Principles
----------
The financial statements are prepared in accordance with generally accepted
accounting principles applicable in the UK ("UK GAAP"), which differ in certain
significant respects from those applicable in the US ("US GAAP"). These
differences relate principally to the following items and the necessary
adjustments are shown in the tables which follow.
F-4
<PAGE>
NOTES ON THE ACCOUNTS
(Continued)
(a) Interest capitalisation
Under UK GAAP, the capitalisation of interest is optional and the Company
has not capitalized any interest on major capital construction projects.
Under US GAAP, interest incurred as part of the cost of acquiring all fixed
assets which become assets in course of construction is capitalized and
amortized over the life of the asset, following its commissioning.
(b) Revaluation of properties
Under UK GAAP, properties may be re-stated on the basis of appraised values
in financial statements prepared in all other respects in accordance with
the historical cost convention. Such re-statements are not generally
permitted under US GAAP, except in connection with purchase accounting, and
accordingly adjustments to net income and Shareholders' equity are required
to eliminate the above re-statements.
(c) Pension Costs
Under UK GAAP, the costs of providing pension benefits may be calculated by
the use of any recognized actuarial method which is appropriate and whose
assumptions reflect the long term nature of the assets and liabilities
involved.
Under US GAAP (SFAS 87), the Group's employees are considered to have
participated in a multi-employer pension plan. For multi-employer plans
employers are required to recognise as net pension expense total
contributions for the period.
(d) Ordinary Dividends
Under UK GAAP, final ordinary dividends are provided in the financial
statements on the basis of the recommendation by the Directors which
requires subsequent approval by the Shareholders to become a legal
obligation of the Company.
Under US GAAP, dividends are only provided when the legal obligation to pay
arises.
(e) Deferred Taxation
Under UK GAAP, no provision is made for deferred taxation if there is
reasonable evidence that such deferred taxation will not be payable in the
foreseeable future.
Under US GAAP, deferred taxation is provided in full on the liability
method in accordance with the provisions of SFAS 109 "Accounting for Income
Taxes".
(f) Cash Flows
Under UK GAAP the Group complies with the Financial Reporting Standard No.
1 "Cash Flow Statements" (FRS 1), the objective and principles of which are
similar to those set out in SFAS 95 "Statement of Cash Flows" (SFAS 95).
The principle difference between the two standards is in respect of
classification. Under FRS 1, the Group presents its cashflows for (a)
operating activities; (b) returns on investments and servicing of finance;
(c) taxation; (d) investing activities;
F-5
<PAGE>
NOTES ON THE ACCOUNTS
(Continued)
and (e) financing activities. SFAS 95 requires only three categories of
cash flow activity (a) operating; (b) investing; and (c) financing.
Cash flows arising from taxation and returns on investments and servicing
of finance under FRS 1 would, with the exception of dividends paid, be
included as operating activities under SFAS 95; dividend payments would be
included as a financing activity under SFAS 95. In addition, under FRS 1,
cash and cash equivalents include short term borrowings with original
maturities of less than 90 days. SFAS 95 requires movements on such short
term borrowings to be included in financing activities.
Approximate effects on net income of differences between UK
and US generally accepted accounting principles
<TABLE>
<CAPTION>
7 October 5 October
1995 1996
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Net Income (per UK GAAP) 66,635 57,817
US GAAP adjustments:
Interest Capitalisation
and related amortisation (940) (1,944)
Amortisation of revaluation
surplus and disposal loss reversal 1,174 -
Pension costs (242) 185
Deferred Taxation: on adjustments 390 581
methodology 2,446 1,566
------ ------
Net income as adjusted for US GAAP 69,463 58,205
====== ======
</TABLE>
Approximate cumulative effect on Shareholders' equity of differences
between UK and US generally accepted accounting principles
<TABLE>
<CAPTION>
30 December 5 October
1995 1996
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Shareholders' equity (per UK GAAP) 105,862 63,681
US GAAP adjustments:
Interest Capitalisation 7,645 5,701
Pension costs 9,076 9,261
Dividends 68,200 -
Deferred Taxation: on adjustments (5,518) (4,937)
methodology (15,417) (13,851)
------- -------
Shareholders' equity as adjusted for US GAAP 169,848 59,855
======= =======
</TABLE>
There is no adjustment in the above reconciliations for the unrealised
gains and losses on hedged anticipated transactions as the amounts are not
material.
F-6
<PAGE>
NOTES ON THE ACCOUNTS
(Continued)
5. Cash Flow Statement
-------------------
<TABLE>
<CAPTION>
7 October 5 October
1995 1996
(Pounds)'000 (Pounds)'000
<S> <C> <C>
(a) Net cash inflow from operating
activities
Operating profit 101,613 92,659
Depreciation charges 24,939 27,186
Increase in stock (21,081) (11,671)
Increase in debtors (16,348) (10,640)
Increase in creditors 46,622 121,870
(Decrease) Increase in pension provision (242) 184
------ ------
Net cash inflow from operating
activities 135,503 219,588
======= =======
</TABLE>
(b) Cash and cash equivalents
<TABLE>
<CAPTION>
Cash and cash equivalents
-------------------------
Cash at
ank and in Short-term Bank
hand investment overdrafts Total
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C>
End of 1994 6,571 79,423 - 85,994
Net outflow first 40 weeks of 1995 (2,901) (7,275) - (10,176)
------- ------- ------ --------
7 October 1995 3,670 72,148 - 75,818
Net inflow/(outflow) last
12 weeks of 1995 17,701 (55,888) (449) (38,636)
------- ------- ------ --------
End of 1995 21,371 16,260 (449) 37,182
Net inflow/(outflow) first
40 weeks of 1996 (20,774) (16,260) 196 (36,838)
------- ------- ------ --------
5 October 1996 597 - (253) 344
======= ======= ====== ========
</TABLE>
Short-term investments are cash transferred to a group company on short-
term loan and included within debtors.
F-7
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA FINANCIAL INFORMATION REGARDING THE ACQUISITIONS OF:
SA BEVERAGE SALES HOLDING NV
COCA-COLA BEVERAGES SA
COCA-COLA PRODUCTION SA
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
OUACHITA COCA-COLA BOTTLING COMPANY, INC.
COCA-COLA BOTTLING COMPANY WEST, INC.
GRAND FORKS COCA-COLA BOTTLING COMPANY
INDEX
-----
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Introductory Information................................... PF-1
Pro Forma Combined Condensed Statement of Operations
for the Nine Months Ended September 27, 1996............ PF-4
Pro Forma Combined Condensed Statements of Operations
for the Quarters Ended March 29, 1996, June 28, 1996
and September 27, 1996................................... PF-6
Pro Forma Combined Condensed Balance Sheet as of
September 27, 1996....................................... PF-7
Notes to Unaudited Pro Forma Combined Condensed Financial
Information.............................................. PF-8
</TABLE>
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA FINANCIAL INFORMATION
INTRODUCTORY INFORMATION
The following unaudited pro forma combined condensed financial information sets
forth the combined results of operations and financial position of Coca-Cola
Enterprises Inc. (the "Company") and (i) SA Beverage Sales Holding NV,
Coca-Cola Beverages SA, and Coca-Cola Production SA (collectively
"France/Belgium"), (ii) Amalgamated Beverages Great Britain Limited ("Great
Britain"), (iii) Ouachita Coca-Cola Bottling Company, Inc. ("Ouachita"), and
(iv) Coca-Cola Bottling Company West, Inc., and Grand Forks Coca-Cola Bottling
Company (collectively "Coke West") and assuming the Company purchased the
Acquired Companies (referring to all of the purchased companies, collectively)
based on the assumptions set forth in the following Notes to Unaudited Pro Forma
Combined Condensed Financial Information. The Company has entered into various
letters of intent and purchase agreements related to the aforementioned Acquired
Companies which are described below.
Completed Acquisitions
- ----------------------
On February 21, 1996, the Company acquired all the issued and outstanding shares
of stock of Ouachita for a total transaction value of approximately $313
million. The purchase price was paid in a combination of cash, shares of
the Company's common stock from treasury, and two types of convertible preferred
stock. The acquisition was accounted for using the purchase method of
accounting. The Ouachita bottling operations are located in portions of
Arkansas, Louisiana, and Mississippi.
On July 26, 1996, the Company acquired The Coca-Cola Company's bottling and
canning operations in France and Belgium for a transaction value of
approximately $915 million. The acquisition was accounted for using the purchase
method of accounting. The France/Belgium franchise territories include
approximately 90% of the population in France and all of the population in
Belgium.
On August 12, 1996, the Company acquired Coke West for a transaction value of
approximately $158 million. Coke West operates in franchise territories in
portions of Montana, Wyoming, North Dakota, South Dakota, and Minnesota. The
acquisition was accounted for using the purchase method of accounting.
PF-1
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA FINANCIAL INFORMATION
INTRODUCTORY INFORMATION -- (CONTINUED)
Pending Acquisition
- -------------------
On August 9, 1996, the Company signed an agreement to purchase the Great Britain
bottler from The Coca-Cola Company and Cadbury Schweppes plc for an aggregate
transaction value (purchase price, assumed debt, and other long-term
obligations) of approximately 1.2 billion British pounds. A wholly owned
subsidiary of the Great Britain bottler produces and distributes beverage
products of The Coca-Cola Company and Cadbury Schweppes plc in England, Scotland
and Wales.
On September 13, 1996, the European Commission (the "Commission") announced it
was opening a second phase investigation of the Company's proposed acquisition
of the Great Britain bottler, under the merger regulation of the European
Union. The Commission has until January 29, 1997 to make a final decision. The
Company believes that the Commission's Merger Task Force will issue a Statement
of Objections to the proposed acquisition before the end of November 1996, to
which the Company and the other parties to the proposed acquisition will
respond. The Statement of Objections could, under some circumstances, result in
modifications to the terms of the transaction to resolve issues raised by the
staff, but, the Company is unable to predict what effect they may have upon the
proposed transaction. However, the Company remains confident that the
transaction will ultimately be approved and completed.
The preceding completed and pending acquisitions were, or will be, initially
financed through short-term bank borrowings and commercial paper. The Company
intends to refinance portions of these short-term borrowings on a long-term
basis subsequent to the acquisitions. With respect to international
acquisitions, the Company has financed, or intends to finance, the acquisitions
in local currency (or alternatively to execute currency swaps) to eliminate
exposure to fluctuating currencies on the Company's acquisition cost.
The following unaudited pro forma financial information should be read in
conjunction with the Company's audited and unaudited financial statements,
including the notes thereto, contained in: (i) the Coca-Cola Enterprises Inc.
Annual Report on Form 10-K for the year ended December 31, 1995 and (ii) Coca-
Cola Enterprises Inc. Quarterly Reports on Form 10-Q for the quarterly periods
ended March 29, 1996, June 28, 1996, and September 27, 1996.
The unaudited pro forma combined condensed statements of operations for the nine
months ended September 27, 1996 and each of the quarterly periods ended March
29, 1996, June 28, 1996 and September 27, 1996 present the combined operating
results of the Company and the Acquired Companies, as if the completed and
pending acquisitions described above had occurred at the beginning of the
earliest period presented. The unaudited pro forma combined condensed balance
sheet as of September 27, 1996 includes the unaudited historical balance sheet
of Coca-Cola Enterprises Inc. as of September 27, 1996 and Great Britain
presented as of October 5, 1996. The unaudited pro forma combined condensed
balance sheet as of September 27, 1996 presents the combined financial position
of the Company and Great Britain as if the pending acquisition described above
had occurred on September 27, 1996. There can be no assurance that the pending
acquisition will close. These pro forma financial statements reflect use of the
purchase method of accounting and are based on the historical financial
information of the Company and the Acquired Companies adjusted for the pro forma
adjustments described in the attached notes to unaudited pro forma combined
condensed financial information. Certain reclassifications and adjustments have
been made to the historical financial statements of the Acquired Companies to
conform to the Company's financial presentation and interim reporting dates.
PF-2
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA FINANCIAL INFORMATION
INTRODUCTORY INFORMATION -- (CONTINUED)
The pro forma adjustments are based on preliminary estimates of the fair value
of assets and liabilities of the Acquired Companies, which may require further
adjustment when additional information is obtained as of the acquisition date
and during the one year period subsequent to acquisition. Any reallocation of
the purchase price based on final valuations of assets and liabilities should
not differ significantly from the original estimates and should not have a
material impact on the pro forma financial statements.
The pro forma financial information is presented for illustrative purposes only
and is not necessarily indicative of the operating results that would have
occurred if the acquisitions had been consummated in accordance with the
assumptions set forth below, nor is it necessarily indicative of future
operating results or financial position.
PF-3
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 27, 1996
(UNAUDITED; IN MILLIONS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
COCA-COLA FRANCE/ GREAT
ENTERPRISES BELGIUM BRITAIN OUACHITA COKE WEST PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) (HISTORICAL) (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
NET OPERATING REVENUES............. $5,803 $846 $1,117 $20 $69 $ (60) $7,795
Cost of sales...................... 3,586 570 727 12 44 (54) 4,885
------ ---- ------ --- --- ----- ------
GROSS PROFIT....................... 2,217 276 390 8 25 (6) 2,910
Selling, general & administrative
expenses.......................... 1,784 223 249 14 26 53 2,349
------ ---- ------ --- --- ----- ------
OPERATING INCOME................... 433 53 141 (6) (1) (59) 561
Interest expense, net.............. 253 6 11 1 7 149 427
Other (income) deductions, net..... 1 2 - (7) - - (4)
------ ---- ------ --- --- ----- ------
INCOME (LOSS) BEFORE INCOME TAXES.. 179 45 130 - (8) (208) 138
Income tax expense (benefit)....... 74 2 42 - - (63) 55
------ ---- ------ --- --- ----- ------
NET INCOME (LOSS).................. 105 43 88 - (8) (145) 83
Preferred stock dividends.......... 6 - - - - 1 7
------ ---- ------ --- --- ----- ------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHARE OWNERS.............. $ 99 $ 43 $ 88 $ - $(8) $(146) $ 76
====== ==== ====== === === ===== ======
AVERAGE COMMON SHARES OUTSTANDING.. 125 125
====== ======
NET INCOME (LOSS) PER COMMON SHARE. $ 0.79 $ 0.61
====== ======
OTHER OPERATING DATA:
Operating Income................. $ 433 $ 53 $141 $(6) $(1) $ (59) $ 561
Depreciation..................... 279 32 41 1 2 - 355
Amortization..................... 173 5 - 1 3 57 239
------ ---- ---- --- --- ----- ------
OPERATING INCOME BEFORE DEPRECIATION
AND AMORTIZATION................. $ 885 $ 90 $182 $(4) $ 4 $ (2) $1,155
====== ==== ==== === === ===== ======
</TABLE>
The introductory information contained on page PF-1 and the accompanying Notes
to Unaudited Pro Forma Combined Condensed Financial Information are an integral
part of these statements. Pro forma combined information should not be construed
to be necessarily indicative of future operating results. The Pro Forma
Adjustments for each Acquired Company are detailed by company on the following
page.
PF-4
<PAGE>
COCA-COLA ENTERPRISES INC.
DETAIL OF PRO FORMA ADJUSTMENTS BY COMPANY
FOR THE NINE MONTHS ENDED SEPTEMBER 27, 1996
(UNAUDITED; IN MILLIONS)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
---------------------------------------------------------------------
FRANCE/ GREAT
BELGIUM BRITAIN OUACHITA COKE WEST TOTAL
-------- ------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET OPERATING REVENUES................... $(36) (D) $ - $ - $ -
(13) (E)
(11) (F) $ (60)
Cost of sales............................ (35) (D) - - -
(12) (E)
(7) (G) (54)
---- ---- ---- ----- ------
GROSS PROFIT............................. (6) - - - (6)
Selling, general & administrative
expenses............................... 5 (A) 50 (A) 1 (A) 1 (A)
(4) (H) 53
---- ---- ---- ----- -----
OPERATING INCOME......................... (7) (50) (1) (1) (59)
Interest expense, net.................... 35 (B) 114 (B) - - 149
Other (income) deductions, net........... - - - - -
---- ------ ----- ----- -----
INCOME (LOSS) BEFORE INCOME TAXES........ (42) (164) (1) (1) (208)
Income tax expense (benefit)............. (5) (C) (57) (C) (1) (C) - (63)
---- ------ ----- ----- -----
NET INCOME (LOSS)....................... (37) (107) - (1) (145)
Preferred stock dividends............... - - 1 (I) - 1
---- ------ ----- ----- -----
NET INCOME (LOSS) APPLICABLE TO
COMMON SHARE OWNERS................... $(37) $ (107) $ (1) $ (1) $(146)
==== ====== ===== ===== =====
OTHER OPERATING DATA:
Operating Income....................... $ (7) $ (50) $ (1) $ (1) $ (59)
Depreciation........................... - - - - -
Amortization........................... 5 50 1 1 57
---- ------ ----- ----- -----
Operating income before depreciation
and amortization....................... $ (2) $ - $ - $ - $ (2)
==== ====== ===== ===== =====
</TABLE>
The introductory information contained on page PF-1 and the accompanying Notes
to Unaudited Pro Forma Combined Condensed Financial Information are an integral
part of these statements.
PF-5
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 29, 1996, JUNE 28, 1996 AND SEPTEMBER 27, 1996
(UNAUDITED; IN MILLIONS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
MARCH 29, JUNE 28, SEPTEMBER 27,
1996 1996 1996 TOTAL
---------- ------ -------------- -------
<S> <C> <C> <C> <C>
NET OPERATING REVENUES...................... $2,201 $2,879 $2,715 $7,795
Cost of sales............................... 1,373 1,813 1,699 4,885
------ ------ ------ ------
GROSS PROFIT................................ 828 1,066 1,016 2,910
Selling, general & administrative expenses.. 738 786 825 2,349
------ ------ ------ ------
OPERATING INCOME............................ 90 280 191 561
Interest expense, net....................... 141 146 140 427
Other (income) deductions, net............. (7) 1 2 (4)
------ ------ ------ ------
INCOME (LOSS) BEFORE INCOME TAXES........... (44) 133 49 138
Income tax expense (benefit)................ (14) 47 22 55
------ ------ ------ ------
NET INCOME (LOSS)........................... (30) 86 27 83
Preferred stock dividends................... 3 2 2 7
------ ------ ------ ------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHARE OWNERS....................... $ (33) $ 84 $ 25 $ 76
====== ====== ====== ======
AVERAGE COMMON SHARES OUTSTANDING........... 126 123 124 125
====== ====== ====== ======
NET INCOME (LOSS) PER COMMON SHARE.......... $(0.26) $ 0.68 $ 0.19 $ 0.61
====== ====== ====== ======
OTHER OPERATING DATA:
Operating Income.......................... $ 90 $ 280 $ 191 $ 561
Depreciation.............................. 114 120 121 355
Amortization.............................. 74 79 86 239
------ ------ ------ ------
OPERATING INCOME BEFORE DEPRECIATION
AND AMORTIZATION.......................... $ 278 $ 479 $ 398 $1,155
====== ====== ====== ======
</TABLE>
The introductory information contained on page PF-1 and the accompanying Notes
to Unaudited Pro Forma Combined Condensed Financial Information are an integral
part of these statements. Pro forma combined information should not be construed
to be necessarily indicative of future operating results.
PF-6
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
SEPTEMBER 27, 1996
(UNAUDITED; IN MILLIONS)
<TABLE>
<CAPTION>
COCA-COLA GREAT
ENTERPRISES BRITAIN PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
------------ ------------ ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents.................... $ 26 $ 1 $ - $ 27
Trade accounts receivable, net............... 730 240 - 970
Inventories.................................. 374 70 - 444
Prepaid expenses and other assets............ 294 - - 294
------- ---- ------ -------
Total Current Assets....................... 1,424 311 - 1,735
PROPERTY, PLANT AND EQUIPMENT, NET............ 2,814 320 - 3,134
FRANCHISE AND OTHER NONCURRENT ASSETS......... 7,139 - 2,774 (L) 9,913
------- ---- ------ -------
$11,377 $631 $2,774 $14,782
======= ==== ====== =======
LIABILITIES AND
SHARE-OWNERS' EQUITY
CURRENT
Accounts payable and accrued expenses........ $ 1,299 $440 $ 2 (L) $ 1,741
Notes payable and current maturities of
long-term debt.............................. 782 - - 782
------- ---- ------ -------
Total Current Liabilities.................. 2,081 440 2 2,523
LONG-TERM DEBT................................ 4,645 55 1,992 (K) 6,692
DEFERRED INCOME TAXES......................... 2,460 29 874 (L) 3,363
OTHER LONG-TERM OBLIGATIONS................... 664 13 - 677
SHARE-OWNERS' EQUITY
Preferred Stock.............................. 132 - - 132
Common Stock................................. 147 - - 147
Paid-in Capital.............................. 1,408 - - 1,408
Reinvested earnings (deficit)................ 233 94 (94) (L) 233
Cumulative effect of currency translations... 30 - - 30
Common stock in treasury..................... (423) - - (423)
------- ---- ------ -------
Total Share-Owners' Equity................. 1,527 94 (94) 1,527
------- ---- ------ -------
$11,377 $631 $2,774 $14,782
======= ==== ====== =======
</TABLE>
The introductory information contained on page PF-1 and the accompanying Notes
to Unaudited Pro Forma Combined Condensed Financial Information are an integral
part of these statements.
PF-7
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION
The historical information for each company reflected in the accompanying Pro
Forma Combined Condensed Financial Statements have been determined using United
States generally accepted accounting principles.
The following notes describe the pro forma adjustments necessary to reflect the
effects of completed and pending acquisitions with an aggregate purchase price
totaling approximately $3.3 billion (France/Belgium - $915 million; Great
Britain - $2 billion; Ouachita and Coke West - $471 million) in cash and assumed
debt. Actual adjustments to account for the acquisitions under the purchase
method are dependent upon the final valuations of the various assets and
liabilities of the Acquired Companies. The Ouachita acquisition occurred in
February 1996 and the France/Belgium and Coke West acquisitions occurred in the
third quarter of 1996 and, therefore, balance sheet accounts for these
acquisitions are included in the balance sheet of the Company as of September
27, 1996. The historical information for each Acquired Company presented in the
pro forma combined condensed statements of operations for the nine months ended
September 27, 1996 reflect historical operations from January 1, 1996 through
date of acquisition. The results of operations of the Acquired Companies from
date of acquisition through September 27, 1996 are included in the historical
results of operations of the Company.
NOTE A - Pro forma adjustments to "Selling, general & administrative expenses"
reflect amortization of the assigned value of the rights of the Acquired
Companies to market, produce, and distribute beverage products in their
franchise territories principally over 40 years, net of amortization previously
recorded.
NOTE B - The pro forma adjustments to "Interest expense, net" reflect additional
interest costs on debt issued to fund the cash portion of the purchase price
and to repay assumed debt contemplating the long-term fixed rate financing of
the transactions. The acquisitions will initially be financed through short-term
bank borrowings and commercial paper. The Company intends to refinance portions
of these short-term borrowings on a long-term basis subsequent to the
acquisitions. Interest rates assumed applicable to contemplated financings were
7.5% (reflecting the Company's weighted average long-term borrowing rate for
1995).
NOTE C - The pro forma adjustments to "Income tax expense (benefit)" reflect the
income tax attributes of the foregoing adjustments and the effect on the
consolidated tax provision after inclusion of the Acquired Companies. On a
quarterly basis, the pro forma adjustments reflect modifications to the
Company's estimated effective annual income tax rate for full year 1996
giving effect to the results of operations of the Acquired Companies and the pro
forma adjustments.
NOTE D - This pro forma adjustment to "Net Operating Revenues" and "Cost of
sales" gives effect to the elimination of historical sales by France/Belgium to
the Company's Netherlands operations.
NOTE E - This pro forma adjustment to "Net Operating Revenues" and "Cost of
sales" gives effect to the elimination of historical product sales by
France/Belgium to the German Coca-Cola bottler owned by The Coca-Cola Company.
These sales were discontinued as a condition of the purchase agreement.
PF-8
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION -- (CONTINUED)
NOTE F - This pro forma adjustment to "Net operating revenues" gives effect to
the elimination of certain marketing support funding provided by The Coca-Cola
Company. As a condition of the purchase agreement, the marketing support
arrangement between France/Belgium and The Coca-Cola Company has reduced the
funding. Therefore, France/Belgium will no longer be receiving this marketing
support.
NOTE G - This pro forma adjustment to "Cost of sales" gives effect to the
elimination of intercompany centralized purchasing costs for certain products
and packaging materials purchased directly from a subsidiary of The Coca-Cola
Company by France/Belgium. As a condition of the purchase agreement,
France/Belgium will no longer be charged a mark-up on centralized purchasing
costs.
NOTE H - This pro forma adjustment to "Selling, general & administrative
expenses" gives effect to the elimination of certain overhead and administrative
expense allocations charged to France/Belgium by the corporate regional offices
of The Coca-Cola Company. As a condition of the acquisition, these costs will
no longer be incurred by France/Belgium.
NOTE I - In connection with the acquisition of Ouachita in February, 1996, the
Company authorized 1,110,000 shares and issued 923,413 shares of voting
convertible preferred stock, Ouachita Series A ("Series A") and authorized
350,000 shares and issued 95,880 shares of voting convertible preferred stock,
Ouachita Series B ("Series B"). Series A pays quarterly cumulative dividends of
4% per year and Series B pays no dividend. Dividends are provided at a market-
related rate for both Series A and Series B to reflect the actual cost of the
preferred stock.
NOTE J - Pro forma fully diluted net income (loss) per common share data are not
presented because there are no material differences between such amounts and the
pro forma net income (loss) per share presented. All per share data is
calculated prior to rounding to millions.
NOTE K - The pro forma adjustments to reflect the increase in outstanding
indebtedness as a result of (i) the pending acquisition of the Great Britain
bottler by the Company; and (ii) the repayment of assumed debt at the
acquisition date was calculated as follows:
<TABLE>
<S> <C>
Purchase price of the pending acquisition:
Amount payable in cash.................................. $1,866
Long-term debt assumed from sellers..................... 126
------
Net increase in long-term debt ......................... $1,992
======
</TABLE>
PF-9
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION -- (CONTINUED)
NOTE L - The purchase method of accounting for acquisitions requires that the
assets and liabilities of the acquired company be adjusted to their estimated
fair values. The following are the pro forma adjustments which reflect
management's best estimate of the fair values of the assets and liabilities of
the Great Britain bottler as of September 27, 1996 using information currently
available.
Net Assets
------------------
Increase (Decrease)
Amounts as reported by the Acquired Company.... $ 94
Fair value adjustments:
Franchise and other noncurrent assets......... 2,774
Current liabilities........................... (2)
Deferred income taxes......................... (874)
------
$1,992
======
PF-10
