<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 33-62757
Registration No. 33-46675
PROSPECTUS SUPPLEMENT
(To Prospectus dated November 15, 1995)
$300,000,000
(LOGO) COCA-COLA ENTERPRISES INC.
7% DEBENTURES DUE OCTOBER 1, 2026
---------------------------
INTEREST PAYABLE APRIL 1 AND OCTOBER 1
---------------------------
Interest on the 7% Debentures due October 1, 2026 (the "Debentures") will
be payable semiannually on April 1 and October 1 of each year, commencing April
1, 1997.
Each holder of Debentures may require the Company to repurchase all or a
portion (but only denominations of $1,000 and any integral multiple thereof) of
the Debentures owned by such holder (the "Put Option") on October 1, 2006 (the
"Put Option Exercise Date") at a purchase price equal to 100% of the principal
amount thereof. The Debentures are not redeemable at the option of the Company
prior to maturity. See "Description of Debentures".
Each of the Debentures will be represented by certificates registered in
the name of the nominee of The Depository Trust Company (the "Depository").
Beneficial interests in such certificates will be shown on, and transfers
thereof will be effected only through, records maintained by the Depository's
participants. Owners of beneficial interests in the certificates representing
the Securities will be entitled to physical delivery of Debentures in
certificated form in the amount of their respective beneficial interests only
under the limited circumstances described herein. See "Book-Entry, Delivery and
Form."
---------------------------
THESE DEBENTURES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Debenture.......................... 99.765% .650% 99.115%
- ------------------------------------------------------------------------------------------------------
Total.................................. $299,295,000 $1,950,000 $297,345,000
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from October 1, 1996 to date of delivery.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $225,000.
---------------------------
The Debentures offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, withdrawal, cancellation or modification of
the offer without notice, to delivery to and acceptance by the Underwriters and
to certain other conditions. It is expected that delivery of the Debentures will
be made through the facilities of The Depository Trust Company on or about
September 30, 1996.
---------------------------
LEHMAN BROTHERS MORGAN STANLEY & CO.
INCORPORATED
September 25, 1996
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
RECENT DEVELOPMENTS
On September 10, 1996, the Company filed a Form 8-K/A with the Securities
and Exchange Commission that included unaudited pro forma financial information
(the "Pro Forma Financial Information") for the acquisitions of bottling
franchises in the United States, France and Belgium, and for the contemplated
acquisitions of the bottling franchise in Great Britain. The Pro Forma Financial
Information does not include the impact from the proposed acquisition of Nora
Beverages Inc., a Canadian bottled water business ("Nora"), announced on July
17, 1996. The completed and pending acquisitions are discussed below. Assuming
each of the acquisitions described in the Pro Forma Financial Information had
been consummated and based on the assumptions in the Pro Forma Financial
Information, pro forma income before income taxes, pro forma net income
applicable to common share owners and pro forma net income per common share
would each have been less for the year ended December 31, 1995 and for the six
months ended June 28, 1996 than the Company's historical amounts for those items
during such periods. Pro forma net income applicable to common share owners for
the year ended December 31, 1995, and the six months ended June 28, 1996, was
$38 million and $51 million, respectively, compared to historical net income
applicable to common share owners of $80 million and $62 million, respectively.
The 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 Company's Annual Report on Form 10-K for the year
ended December 31, 1995 and (ii) the Company's Quarterly Reports on Form 10-Q
for the quarterly periods ended March 29, 1996, and June 28, 1996. 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 included
therein, nor is it necessarily indicative of future operating results or
financial position.
COMPLETED ACQUISITIONS
On February 21, 1996, the Company completed the acquisition of the Ouachita
Coca-Cola Bottling Company, Inc., a bottler serving parts of Louisiana,
Mississippi and Arkansas. The total transaction value was approximately $313
million, including assumed debt and other obligations and the issuance of
convertible preferred securities of the Company.
On July 26, 1996, a wholly owned subsidiary of the Company completed the
acquisition of bottling and canning operations in France and Belgium previously
owned by affiliates of The Coca-Cola Company. The French bottler serves
approximately 90% of the population of France; the Belgian bottler serves all of
Belgium. The total transaction value was approximately $915 million, including
cash paid to the sellers in the aggregate amount of $686 million and assumption
of certain obligations of the acquired companies.
On August 12, 1996, the Company completed the acquisition of Coca-Cola
Bottling Company West, Inc. and Grand Forks Coca-Cola Bottling Company. These
bottlers serve parts of Montana, Wyoming, North Dakota, South Dakota and
Minnesota. The total transaction value was approximately $158 million,
consisting of amounts paid to the sellers and assumed debt.
PENDING ACQUISITIONS
The following acquisitions are pending as of the date of this Prospectus
Supplement; however, there can be no assurances that unanticipated events will
not prevent any such acquisitions from being completed. In addition, although no
other material acquisitions are pending currently, management of the Company
will continue to review opportunities for further acquisitions.
S-2
<PAGE> 3
On July 17, 1996, the Company announced the signing of a letter of intent
with the majority shareholder of Nora to acquire for approximately $117 million
Nora, which produces a high quality, pure Canadian spring water sold under the
trade name NAYA. This transaction is expected to close during the fourth quarter
of 1996.
On August 9, 1996, the Company signed an agreement to purchase Coca-Cola &
Schweppes Beverages Limited ("CCSB") from Cadbury Schweppes plc and The
Coca-Cola Company for a transaction value of approximately $1.9 billion. CCSB
produces and distributes beverage products of The Coca-Cola Company and Cadbury
Schweppes plc in England, Scotland, Wales, and the Isle of Man. On September 13,
1996, the European Commission (the "Commission") announced that it was opening a
second phase investigation of this proposed transaction under the merger
regulations of the common market. This investigation gives the Commission as
long as four additional months to study the proposed transaction. The parties to
the acquisition are in the process of responding to the Commission's requests
for information and are still hopeful that the transaction can close in the
fourth quarter of 1996.
USE OF PROCEEDS
The net proceeds of the offering of the Debentures are estimated to be
$297,120,000. The Company will use the net proceeds to repay commercial paper
borrowings of the Company. Commercial paper has been issued in the last several
months to finance the Company's stock repurchase program and a substantial
portion of the cost of the completed acquisitions described above. At September
25, 1996, such commercial paper borrowings bore interest at a blended rate of
5.5% per annum.
S-3
<PAGE> 4
SUMMARY FINANCIAL DATA
The following table sets forth selected consolidated financial data of the
Company. The selected consolidated financial data are derived from and should be
read in conjunction with the Consolidated Financial Statements of the Company
(including the notes thereto). With respect to the fiscal years presented,
audited consolidated financial statements are included in the Company's Annual
Reports on Form 10-K for such periods and, with respect to the six-month periods
ended June 28, 1996 and June 30, 1995, unaudited condensed consolidated
financial statements are included in the Company's Quarterly Reports on Form
10-Q for such periods. The interim data are not necessarily indicative of
results for the full year. The selected consolidated pro forma financial data
for the fiscal year ended December 31, 1991 give effect to the acquisition of
Johnston Coca-Cola Bottling Group, Inc. ("Johnston") as if it occurred as of the
beginning of 1991 (year ended December 31, 1991 with respect to the Company and
October 26, 1991 with respect to Johnston).
<TABLE>
<CAPTION>
FISCAL YEAR
--------------------------------------------------------
1991
SIX MONTHS -------------------
----------------- PRO
1996 1995(A) 1995(A) 1994 1993(B) 1992(C) FORMA(D) REPORTED
------- ------- ------- ------ ------ ------ -------- --------
(IN MILLIONS, EXCEPT RATIOS AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS SUMMARY:
Net operating revenues.................. $ 3,616 $3,289 $6,773 $6,011 $5,465 $5,127 $5,027 $3,915
Cost of sales........................... 2,223 2,054 4,267 3,703 3,372 3,219 3,170 2,420
------- ------- ------- ------ ------ ------ -------- --------
Gross profit............................ 1,393 1,235 2,506 2,308 2,093 1,908 1,857 1,495
Selling, general and administrative
expenses.............................. 1,117 992 2,038 1,868 1,708 1,602 1,535 1,223
Restructuring provision................. -- -- -- -- -- -- 152 152
------- ------- ------- ------ ------ ------ -------- --------
Operating income........................ 276 243 468 440 385 306 170 120
Interest expense, net................... 163 162 326 310 328 312 312 210
Other nonoperating income (deductions),
net................................... -- 3 (6 ) (3) (2) (6) (3) (2)
Gain on sale of bottling operations..... -- 9 9 -- -- -- -- --
------- ------- ------- ------ ------ ------ -------- --------
Income (loss) before income taxes and
cumulative effect of changes in
accounting principles................. 113 87 145 127 55 (12) (145) (92)
Income taxes:
Expense (benefit) excluding rate
change.............................. 47 38 63 58 30 3 (17) (9)
Rate change -- federal................ -- -- -- -- 40 -- -- --
------- ------- ------- ------ ------ ------ -------- --------
Income (loss) before cumulative effect
of changes in accounting principles... 66 49 82 69 (15) (15) (128) (83)
Cumulative effect of changes in
accounting principles................. -- -- -- -- -- (171) -- --
------- ------- ------- ------ ------ ------ -------- --------
Net income (loss)....................... 66 49 82 69 (15) (186) (128) (83)
Preferred stock dividend requirements... 4 1 2 2 -- -- 9 9
------- ------- ------- ------ ------ ------ -------- --------
Net income (loss) applicable to common
share owners.......................... $ 62 $ 48 $ 80 $ 67 $ (15) $ (186) $ (137) $ (92)
======== ======== ======== ====== ====== ====== ========= ========
OTHER OPERATING DATA:
Depreciation expense.................... 176 $ 155 $ 318 $ 282 $ 254 $ 227 $ 205 $ 160
Amortization expense.................... 107 93 211 179 165 162 125 91
SHARE AND PER SHARE DATA:
Average common shares outstanding....... 125 129 129 130 129 129 129 116
Net income (loss) per common share
before cumulative effect of changes in
accounting principles................. $ 0.50 $ 0.37 $ 0.62 $ 0.52 $(0.11) $(0.11) $(1.06) $(0.79)
Net income (loss) applicable to common
share owners.......................... 0.50 0.37 0.62 0.52 (0.11) (1.45) (1.06) (0.79)
Dividends per common share.............. 0.05 0.025 0.05 0.05 0.05 0.05 0.05 0.05
Closing stock price..................... 34.63 21.88 26.88 18.00 15.25 12.25 15.38 15.38
RATIOS(E):
Ratio of earnings to fixed charges...... 1.67 1.50 1.41 1.38 1.16 (F) (G) (H)
Ratio of earnings to combined fixed
charges and preferred stock
dividends............................. 1.60 1.48 1.40 1.37 1.16 (F) (G) (H)
YEAR-END FINANCIAL POSITION:
Property, plant and equipment, net...... $ 2,353 $2,131 $2,158 $1,963 $1,890 $1,733 $1,706 $1,706
Franchise and other noncurrent assets... 6,318 6,115 5,924 5,965 6,046 5,651 4,265 4,265
Total assets............................ 9,856 9,375 9,064 8,738 8,682 8,085 6,677 6,677
Long-term debt.......................... 4,506 4,367 4,201 4,187 4,391 4,131 4,091 4,091
Share-owners' equity.................... 1,468 1,414 1,435 1,339 1,260 1,254 1,442 1,442
</TABLE>
S-4
<PAGE> 5
The Company acquired subsidiaries in each year presented and divested
subsidiaries in certain periods. Such transactions, except for the acquisition
of Johnston and gains from the sale of certain bottling operations, did not
significantly affect the Company's operating results in any one fiscal period.
All acquisitions and divestitures have been included in or excluded from (as
appropriate) the consolidated operating results of the Company from their
respective transaction dates.
(A) In January 1995, the Company sold its 50% ownership interest in The
Coca-Cola Bottling Company of the Mid South for a pre-tax gain of $9
million, or approximately $0.04 per common share.
(B) A one-time charge of $40 million ($0.31 per common share) to increase
deferred income taxes resulted from a 1% increase in the corporate marginal
income tax rate in connection with the Omnibus Budget Reconciliation Act of
1993.
(C) The adoption of FAS 106 and FAS 109 resulted in one-time charges to income.
Fiscal periods prior to 1992 were not restated for these accounting changes.
(D) The pro forma Operations Summary, Other Operating Data and Share and Per
Share Data give effect to the acquisition of Johnston in December 1991 as
though it had been completed at the beginning of 1991.
(E) The ratio of earnings to fixed charges has been determined by dividing (a)
income before income taxes and fixed charges by (b) fixed charges. The ratio
of earnings to combined fixed charges and preferred stock dividends has been
determined by dividing (a) income before income taxes and fixed charges by
(b) the sum of fixed charges and the Company's preferred stock dividend
requirements. Fixed charges consist of interest expense, amortization of
deferred debt charges, the portion of rent expense representative of
interest costs and preferred stock dividend requirements of subsidiaries.
Preferred stock dividends have been increased to an amount representing the
pre-tax earnings that would be required to satisfy such dividend
requirements.
(F) Earnings for 1992 were insufficient to cover fixed charges and combined
fixed charges and preferred stock dividends by $12 million.
(G) On a pro forma basis, after giving effect to the acquisition of Johnston as
described in note (D), earnings were insufficient to cover fixed charges and
preferred stock dividends by $137 million and $146 million, respectively.
(H) Earnings for 1991 were insufficient to cover fixed charges and combined
fixed charges and preferred stock dividends by $93 million and $102 million,
respectively.
S-5
<PAGE> 6
DESCRIPTION OF DEBENTURES
The following description of the particular terms of the Debentures (which
represent series of, and are referred to in the accompanying Prospectus as,
"Debt Securities") supplements and, to the extent, if any, inconsistent
therewith, replaces the description of the general terms and provisions of the
Debt Securities set forth in the accompanying Prospectus to which reference is
hereby made. The particular terms of the Debentures offered by this Prospectus
Supplement are described herein. Certain capitalized terms used herein are
defined in the accompanying Prospectus.
The Debentures will be issued under an Indenture between the Company and
The Chase Manhattan Bank (formerly known as Chemical Bank, as successor to
Manufacturers Hanover Trust Company), as trustee (the "Trustee"), dated as of
July 30, 1991, as amended by the First Supplemental Indenture dated as of
January 29, 1992, which is more fully described in the accompanying Prospectus.
The following summaries of certain provisions of the Indenture do not purport to
be complete and are subject to, and qualified in their entirety by reference to,
all of the provisions of the Indenture, including the definitions therein of
certain terms.
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued in one or more series up to the aggregate principal amount which may
be authorized from time to time by the Company. The Company may, from time to
time, without the consent of the Holders of the Debentures, provide for the
issuance of other Debt Securities under the Indenture in addition to the
Debentures. As used herein, "Holder" includes the Depository (as hereinafter
defined) as holder of the certificates representing Debentures. See "Book-Entry,
Delivery and Form."
The Debentures will be unsecured and will rank pari passu with each other,
with other Debt Securities and with other unsecured and unsubordinated
indebtedness of the Company from time to time outstanding. However, since the
Company is primarily a holding company, the right of the Company, and hence the
rights of creditors of the Company (including the Holders), to participate in
any distribution of the assets of any subsidiary upon its liquidation or
reorganization or otherwise is necessarily subject to the prior claims of
creditors of the subsidiary, except to the extent that claims of the Company
itself as a creditor of the subsidiary may be recognized.
The Debentures will bear interest from October 1, 1996 or from the most
recent Interest Payment Date to which interest has been paid or provided for, at
the respective rates per annum set forth on the cover page of this Prospectus
Supplement, payable, in arrears, on April 1 and October 1, of each year and at
maturity, commencing April 1, 1997, to each person in whose name a Debenture was
registered at the close of business on the preceding March 15 and September 15,
respectively, subject to certain exceptions. See "Book-Entry, Delivery and
Form." Other than as described under the caption "Purchase at Option of Holder",
the Debentures are not subject to redemption or repayment prior to maturity, and
the Debentures will not be subject to any sinking fund.
PURCHASE AT OPTION OF HOLDER
Each Holder of the Debentures will have the right to require the Company to
repurchase all or a portion (which portion must be $1,000 or any integral
multiple thereof) of the Debentures owned by such Holder (the "Put Option") on
October 1, 2006 (the "Put Option Exercise Date") at a purchase price equal to
100% of the principal amount of the Debentures (or portion thereof, as
appropriate) plus accrued interest thereon, and will be paid by the Company in
immediately available funds, subject to certain conditions.
A Holder must provide the Company with notice of its intention to exercise
the Put Option during the period from and including August 1, 2006 through and
including September 1, 2006. Such notice, once given, will be irrevocable. Any
notice of exercise given by each Holder exercising the Put Option shall state,
among other things, (i) if applicable, the certificate number(s) of the
Debentures to be delivered by such Holder for purchase by the Company; (ii) the
portion of the principal amount of each Debenture to be purchased for each
certificate, which portion must be $1,000 or an integral multiple thereof; and
(iii) that such Debentures
S-6
<PAGE> 7
(or portion thereof) are to be purchased by the Company pursuant to the
applicable provisions of the Debentures. See "Book-Entry, Delivery and Form".
The Company will comply with the provisions of Rule 13e-4, Rule 14e-1 and
any other tender offer rules under the Securities Exchange Act of 1934 if
required and will file Schedule 13E-4 or any other schedule if required
thereunder in connection with any offer by the Company to purchase the
Debentures.
Payment of the repurchase price for a Debenture (or portion thereof) for
which a notice of exercise has been delivered is conditioned upon delivery or
book-entry transfer of such Debenture (together with necessary endorsements) to
the Paying Agent on the Put Option Exercise Date. See "Book-Entry, Delivery and
Form". Once so delivered or transferred, payment of the repurchase price for
such Debenture (or portion thereof) will be made by wire transfer of immediately
available funds on the Put Option Exercise Date in an amount equal to the
repurchase price in respect of the Debentures that are subject to the relevant
notice of exercise. If the Paying Agent holds immediately available funds
sufficient to pay the repurchase price in respect of such a Debenture on a day
following a Put Option Exercise Date, then immediately thereafter, such
Debenture (or portion thereof) will cease to be Outstanding and interest thereon
will cease to accrue, whether or not such Debenture is delivered to the Paying
Agent, and all other rights of the Holder in respect of the Debenture (or
portion thereof), including the Holder's right to require the Company to
repurchase such Debenture (or portion thereof), shall terminate and lapse (other
than the right to receive the repurchase price in immediately available funds by
wire transfer upon deliver of such Debenture).
In the case where any Interest Payment Date, Put Option Exercise Date or
Stated Maturity shall not be a Business Day at any Place of Payment, the payment
of interest or any repurchase price or principal need not be made at such Place
of Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date, Put Option Exercise Date or at Stated Maturity, and no interest
shall accrue on the amount so payable for the period from and after such
Interest Payment Date, Put Option Exercise Date or Stated Maturity, as the case
may be.
ABSENCE OF PUBLIC MARKET FOR DEBENTURES
The Company does not intend to apply for listing of the Debentures on a
national securities exchange and there is no established trading market for the
Debentures. No assurance can be given as to the liquidity of, or trading markets
for, the Debentures.
BOOK-ENTRY, DELIVERY AND FORM
The Debentures will be issued in the form of one or more fully registered
certificates registered in the name of Cede & Co., the nominee of The Depository
Trust Company, New York, New York (the "Depository"). Except as provided below,
owners of beneficial interests in the certificates will not be entitled to have
the Debentures registered in their names and will not receive or be entitled to
receive physical delivery of the Debentures in definitive form. Unless and until
definitive Debentures are issued, Holders of the Debentures will not be
recognized as such by the Trustee. Hence, until such time, Holders of the
Debentures will only be able to exercise the rights of Holders indirectly
through the Depository and its participating organizations. Except as set forth
below, the certificates may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
nominee to a successor of the Depository or a nominee of such successor.
The Depository has advised the Company and the Underwriters that it is a
limited-purpose trust company organized under the State of 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 "Exchange Act"). The Depository holds securities
that its participants and facilitates the clearance and settlement of securities
transactions among its participants in such securities through electronic
computerized book-entry changes in
S-7
<PAGE> 8
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. The Depository's participants include securities
brokers and dealers (including the Underwriters (as defined below)), banks,
trust companies, clearing corporations and certain other organizations, some of
which (and/or their representatives) own the Depository. Access to the
Depository'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. Persons who are
not participants may beneficially own securities held by the Depository only
through participants.
The Depository advises that, pursuant to the procedures established by it,
(i) upon the issuance of the Debentures by the Company, the Depository will
credit the accounts of participants designated by the Underwriters with the
amount of the Debentures purchased by the respective Underwriters, and (ii)
ownership of beneficial interests in the certificates representing the
Debentures will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the Depository (with respect to
participants' interests) and the participants and the indirect participants
(with respect to beneficial owners' interests). The laws of some states require
that certain persons take physical delivery in definitive form of securities
which they own. Consequently, the ability to transfer beneficial interests in
such certificates is limited to such extent.
Neither the Company, the Trustee, any Paying Agent, nor the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the certificates representing the Debentures or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Principal and interest payments on the Debentures registered in the name of
the Depository's nominee will be made by the Trustee to the Depository's nominee
as the registered owner of the certificates relating to the Debentures,
respectively. The Indenture provides that the Company and the Trustee will treat
the persons in whose names the Debentures are registered (the Depository or its
nominee) as the owners of such Debentures for the purpose of receiving payment
of principal and interest on the Debentures and for all other purposes
whatsoever. Therefore, neither the Company, the Trustee nor any Paying Agent has
any direct responsibility or liability for the payment of principal or interest
on the Debentures to owners of beneficial interests in the certificates relating
to the Debentures, respectively. The Depository has advised the Company and the
Trustee that its present practice is, upon receipt of any payment of principal
or interest, to credit the accounts of the participants with such payment in
amounts proportionate to their respective holdings in principal amount of
beneficial interests in the certificates relating to the Debentures,
respectively, as shown on the records of the Depository. Payments by
participants and indirect participants to owners of beneficial interests in the
certificates relating to the Debentures, respectively, 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 the participants or indirect
participants.
If the Depository is at any time unwilling or unable to continue as a
depository and a successor depository is not appointed by the Company within 90
days, the Company will issue Debentures in definitive form in exchange for the
total amount of the certificates representing such Securities. In addition, the
Company may at any time determine not to have Debentures represented by
certificates and, in such event, will issue Debentures in definitive form in
exchange for the total amount of the certificates representing such Debentures.
In addition, if any event shall have happened and be continuing that constitutes
or, after notice or lapse of time or both, would constitute an Event of Default
with respect to the Debentures, the Holders of such Debentures will be entitled
to receive Debentures, as the case may be, in certificated form in exchange for
the Book-Entry Note or Notes representing the Debentures. In any such instance,
an owner of a beneficial interest in such certificates will be entitled to
physical delivery in definitive form of Debentures equal in amount to such
beneficial interest and to have such Debentures registered in its name.
Debentures so issued in definitive form will be issued in denominations of
$1,000 and integral multiples thereof and will be issued in fully registered
form without coupons.
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<PAGE> 9
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
and the Terms Agreement relating to the Debentures, the Company has agreed to
sell to the underwriters named below (the "Underwriters"), and the Underwriters
have agreed to purchase from the Company, the respective amounts of Debentures
set forth after their names below. The Underwriters are obligated to purchase
all of the Debentures offered hereby if any Debentures are purchased.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
UNDERWRITER OF DEBENTURES
- ---------------------------------------------------------------------------- ---------------
<S> <C>
Lehman Brothers Inc. ....................................................... $ 150,000,000
Morgan Stanley & Co. Incorporated........................................... 150,000,000
---------------
Total.................................................................. $ 300,000,000
============
</TABLE>
The Company has been advised by the Underwriters that they propose to offer
the Debentures to the public at the public offering prices set forth on the
cover page of this Prospectus Supplement and to certain dealers at such prices
less concessions not in excess of 0.400% of the principal amount of the
Debentures, respectively. The Underwriters may allow and such dealers may
reallow concessions not in excess of 0.250% of the principal amount of the
Debentures to other dealers. After the initial offering to the public, the
public offering prices and such concessions may be changed.
The Debentures are new issues of securities with no established trading
markets. The Company has been advised by the Underwriters that they intend to
make markets in the Debentures, but they are not obligated to do so and may
discontinue such market-making at any time without notice. No assurance can be
given as to whether trading markets in the Debentures will develop or as to the
liquidity of any trading markets for the Debentures. The Debentures will not be
listed on any securities exchange.
The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or contribute to payments the Underwriters
may be required to make in respect thereof.
LEGAL MATTERS
The legality of the Debentures offered hereby has been passed upon for the
Company by Lowry F. Kline, General Counsel of the Company. Certain legal matters
will be passed upon for the Underwriters by Cravath, Swaine & Moore, New York,
New York.
S-9
<PAGE> 10
PROSPECTUS
[LOGO] COCA-COLA ENTERPRISES INC.
SENIOR DEBT SECURITIES,
DEBT WARRANTS AND CURRENCY WARRANTS
Coca-Cola Enterprises Inc. (the "Company") intends to sell from time to time
its senior debt securities (the "Debt Securities"), warrants to purchase Debt
Securities (the "Debt Warrants") and warrants to receive from the Company the
cash value in U.S. dollars of the right to purchase ("Currency Call Warrants")
and to sell ("Currency Put Warrants" and, together with the Currency Call
Warrants, the "Currency Warrants") such foreign currencies or units of two or
more currencies as shall be designated by the Company at the time of offering,
from which the Company will receive proceeds of up to $1,595,575,000 (or the
equivalent in foreign denominated currencies or units of two or more currencies,
based on the applicable exchange rate at the time of offering, as shall be
designated by the Company at the time of offering). The Debt Securities, Debt
Warrants and Currency Warrants, which are collectively called the "Securities,"
may be offered either jointly or separately and will be offered to the public on
terms determined by market conditions at the time of sale.
The Debt Securities will be unsecured and will rank equally with all other
unsecured and unsubordinated indebtedness of the Company.
Debt Securities of a series may be issuable in registered form without
coupons ("Registered Securities"), in bearer form with or without coupons
attached ("Bearer Securities") or in the form of one or more global securities
(each a "Global Security"). Bearer Securities will be offered only to non-United
States persons and to offices located outside the United States of certain
United States financial institutions.
Each issue of Securities may vary, where applicable, as to aggregate
principal amount, maturity date, public offering or purchase price, interest
rate or rates and timing of payments thereof, provision for redemption or
sinking fund requirements, if any, exercise provisions, currencies of
denomination or currencies otherwise applicable thereto, selection of indices or
formulae and any other variable terms, and methods of distribution. The
accompanying Prospectus Supplement (the "Prospectus Supplement") sets forth the
specific terms with regard to the Securities in respect of which this Prospectus
is being delivered.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
The Securities will be sold directly, through agents, underwriters or
dealers as designated from time to time or through a combination of such
methods. If agents of the Company or any dealers or underwriters are involved in
the sale of the Securities in respect of which this Prospectus is being
delivered, the names of such agents, dealers or underwriters and any applicable
commissions or discounts are set forth in or may be calculated from the
Prospectus Supplement with respect to such Securities. The net proceeds to the
Company from such sale will be the purchase price less such commission in the
case of an agent, the purchase price in the case of the dealer, or the public
offering price less such discount in the case of an underwriter and less, in
each case, other attributable issuance expenses. See "Plan of Distribution."
---------------------
THE DATE OF THIS PROSPECTUS IS NOVEMBER 15, 1995.
<PAGE> 11
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY AGENT, UNDERWRITER OR DEALER. THIS PROSPECTUS
AND THE PROSPECTUS SUPPLEMENTS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES IN ANY JURISDICTION TO ANY
PERSON TO WHOM SUCH OFFER WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS OR
THE PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN
OR THEREIN IS CORRECT AS OF ANYTIME SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements and
other information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: Chicago Regional Office, Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and New York Regional
Office, 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Company's Common Stock is listed on the New York Stock Exchange, and
such reports, proxy and information statements and other information concerning
the Company may also be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement under
the Securities Act of 1933, as amended, with respect to the Securities offered
hereby (the "Registration Statement"). This Prospectus does not contain all of
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission.
Reference is made to the Registration Statement and to the exhibits relating
thereto for further information with respect to the Company and the Securities
offered hereby. Statements contained herein concerning any document filed as an
exhibit to the Registration Statement are not necessarily complete and, in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1994, as amended on November 3, 1995, Quarterly Reports on Form 10-Q for the
fiscal quarters ended March 31, June 30, and September 29, 1995 and Current
Reports on Form 8-K dated January 31, 1995, April 17, 1995, May 12, 1995, July
18, 1995, July 27, 1995, October 13, 1995 and October 17, 1995 filed with the
Commission pursuant to Section 13 of the Exchange Act under File No. 1-9300 are
hereby incorporated by reference into this Prospectus.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the offering of the Securities shall hereby be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus and the
Prospectus Supplement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein or in the Prospectus Supplement modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus or
the Prospectus Supplement.
2
<PAGE> 12
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus and the Prospectus Supplement is
delivered, on written or oral request of such person, a copy of any or all of
the foregoing documents incorporated by reference into this Prospectus (without
exhibits to such documents other than exhibits specifically incorporated by
reference into such documents). Requests for such copies should be directed to
the office of the Treasurer, Coca-Cola Enterprises Inc., 2500 Windy Ridge
Parkway, Suite 700, Atlanta, Georgia 30339; telephone number (770) 989-3051.
3
<PAGE> 13
THE COMPANY
The Company is in the liquid nonalcoholic refreshment business and is the
world's largest marketer, distributor and producer of bottled and canned
beverage products of The Coca-Cola Company.
The Company was incorporated in Delaware in 1944 as a wholly owned
subsidiary of The Coca-Cola Company and became a public company in 1986. The
Coca-Cola Company owns approximately 44% of the Company's common stock.
The Company's bottling territories include portions of 38 states, all of
the District of Columbia, the U.S. Virgin Islands, the islands of Tortola and
Grand Cayman, and the Netherlands. The Company's bottling rights are perpetual
within the United States. In the Caribbean and the Netherlands, the Company's
bottling rights run for stated terms of years, after which the Company may
request extensions. (References in this prospectus to the "Company" include the
Company and its divisions and subsidiaries.) In 1994, the Company's territories
contained approximately 154 million people, and approximately 54% of the
population of the United States lived within the Company's domestic bottling
territories. In 1994 the Company sold approximately 1.7 billion equivalent
cases, approximately 90% of which were beverage products of The Coca-Cola
Company. (As used in this prospectus, "equivalent case" refers to 192 ounces of
finished beverage product -- 24 eight-ounce servings.)
The Company's principal executive offices are located at One Coca-Cola
Plaza, N.W., Atlanta, Georgia 30313. The telephone number is (404) 676-2100.
STRATEGY
The Company expects to accomplish its primary goal -- the enhancement of
share-owner value -- through the implementation and execution of operating and
financial strategies designed to build the value of the Company. The Company's
principal operating goal is to increase long-term operating cash flow through
profitable increases in sales volume. The increased complexity of the Company's
business drives the Company's strategy of developing and executing innovative
marketing programs at the local level. The increased competitiveness of its
business dictates the Company's strategy to obtain profitable increases in case
sales by balancing volume growth with improved margins and sustainable increases
in market share. The realization of short-term profitability at the expense of
market share is inconsistent with the Company's strategy. The Company intends to
increase volume through profitable business partnerships with its customers and
superior marketing to its consumers. The Company's financial strategies are
designed to add value through the allocation of funds to projects and activities
which generate returns in excess of the Company's cost of capital and which
increase share-owner value. One of the Company's primary financial objectives is
to achieve an optimal capital structure which provides financial flexibility for
internal projects, share repurchases, and appropriately priced acquisitions.
RELATIONSHIP WITH THE COCA-COLA COMPANY
The Coca-Cola Company is the Company's largest share owner. The Chairman of
the Board of Directors and three other directors of the Company are executive
officers or former executive officers of The Coca-Cola Company. The Company and
The Coca-Cola Company are parties to a number of significant transactions and
agreements incident to their respective businesses and may enter into additional
material transactions and agreements from time to time in the future. The
Company conducts its business primarily under contracts with The Coca-Cola
Company. These contracts give the Company the exclusive right to market,
distribute and produce beverage products of The Coca-Cola Company in authorized
bottles and cans in specified territories and provide The Coca-Cola Company with
the ability, in its sole discretion, to establish prices, terms of payment, and
other terms and conditions for the purchase of concentrates and syrups from The
Coca-Cola Company. Other significant transactions and agreements relate to,
among other things, arrangements for cooperative marketing, advertising
expenditures and purchases of sweeteners.
Since 1979, The Coca-Cola Company has assisted in the transfer of ownership
or financial restructuring of a majority of its United States bottler operations
and has assisted in similar transfers of bottlers operating
4
<PAGE> 14
outside the United States. Certain bottlers and interests therein have been
acquired by The Coca-Cola Company and certain of those have been sold to
bottlers, including the Company, which are believed by management of The
Coca-Cola Company to be the best suited to manage and develop these acquired
operations. The Coca-Cola Company has advised the Company that it may continue
to acquire bottling companies or interests therein and to assist in the sale of
acquired bottlers to other bottlers, which may or may not include the Company,
viewed as those best suited to promote the interests of The Coca-Cola Company
and the Coca-Cola bottler system. In connection with such transactions, The
Coca-Cola Company may own all or part of the equity interests of acquired
bottlers for varying periods of time.
As a result of matters such as the foregoing, the relationship between the
Company and The Coca-Cola Company may give rise to potential conflicts of
interest.
ACQUISITIONS AND DIVESTITURES
The Company intends to acquire only bottling businesses offering the
Company the ability to produce long-term share-owner value. The total cost of
acquisitions since reorganization in 1986, including assumed and issued debt,
where applicable, is approximately $5.7 billion. Since reorganization in 1986,
the aggregate proceeds to the Company from the sale of bottlers and other
businesses have been approximately $456 million; of this amount, bottlers
representing sales proceeds of approximately $404 million were reacquired by the
Company in 1991 as a result of the acquisition of Johnston Coca-Cola Bottling
Group, Inc. ("Johnston"), now a subsidiary of the Company.
RISK FACTORS RELATING TO CURRENCIES AND CURRENCY WARRANTS
Debt Securities denominated or payable in foreign currencies and Currency
Warrants may entail significant risks. These risks include, without limitation,
the possibility of significant fluctuations in the foreign currency markets.
These risks will vary depending upon the currency or currencies involved, and in
the case of any Currency Warrants, the particular terms of such Currency
Warrants. These risks will be more fully described in a Prospectus Supplement
relating thereto.
USE OF PROCEEDS
Except as set forth in a Prospectus Supplement, the Company intends to use
the net proceeds from the sale of the Securities for general corporate purposes,
including the repayment of debt and possible business acquisitions. The Company
may also use a portion of the proceeds from the sale of any Currency Warrants to
hedge currency risks with respect to such Warrants. Pending such applications,
the net proceeds will be temporarily invested in marketable securities.
The Company expects to engage in additional financings as the need arises.
The nature and amount of the Company's equity and long-term and short-term debt
and the proportionate amount of each can be expected to vary from time to time
as a result of business requirements, market conditions and other factors.
5
<PAGE> 15
SUMMARY FINANCIAL DATA
The following table sets forth selected consolidated financial data of the
Company. The selected consolidated financial data are derived from and should be
read in conjunction with the Consolidated Financial Statements of the Company
(including the notes thereto). With respect to the fiscal years presented,
audited consolidated financial statements are included in the Company's Annual
Reports on Form 10-K, for such periods, and on Form 10-K/A with respect to the
fiscal year ended December 31, 1994. With respect to the nine-month periods
ended September 29, 1995 and September 30, 1994, unaudited condensed
consolidated financial statements are included in the Company's Quarterly
Reports on Form 10-Q for such periods. The interim data are not necessarily
indicative of results for the full year. The selected consolidated pro forma
financial data for the fiscal year ended December 31, 1991 give effect to the
acquisition of Johnston as if it occurred as of the beginning of 1991 (year
ended December 31, 1991 with respect to the Company and October 26, 1991 with
respect to Johnston).
<TABLE>
<CAPTION>
FISCAL YEAR
-----------------------------------------------------------------------------
1991
NINE MONTHS -------------------
---------------- PRO
1995(A) 1994 1994 1993(B) 1992(C) FORMA(D) REPORTED 1990(E)
------- ------ ------ ------- ------- -------- -------- -------
(IN MILLIONS EXCEPT RATIOS AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operations Summary:
Net operating revenues......................... $5,130 $4,524 $6,011 $5,465 $5,127 $5,027 $3,915 $3,933
Cost of sales.................................. 3,237 2,780 3,703 3,372 3,219 3,170 2,420 2,400
------- ------ ------ ------- ------- -------- -------- -------
Gross profit................................... 1,893 1,744 2,308 2,093 1,908 1,857 1,495 1,533
Selling, general and administrative expenses... 1,505 1,399 1,868 1,708 1,602 1,535 1,223 1,199
Provision for restructuring.................... -- -- -- -- -- 152 152 9
------- ------ ------ ------- ------- -------- -------- -------
Operating income............................... 388 345 440 385 306 170 120 325
Interest expense, net.......................... 244 233 310 328 312 312 210 200
Other nonoperating income (deductions), net.... 3 2 (3) (2 ) (6 ) (3) (2) 3
Gain on sale of bottling operations............ 9 -- -- -- -- -- -- 56
------- ------ ------ ------- ------- -------- -------- -------
Income (loss) before income taxes and
cumulative effect of changes in accounting
principles................................... 150 110 127 55 (12 ) (145) (92) 184
Income taxes:
Expense (benefit) excluding rate change...... 65 52 58 30 3 (17) (9) 91
Rate change -- federal....................... -- -- -- 40 -- -- -- --
------- ------ ------ ------- ------- -------- -------- -------
Income (loss) before cumulative effect of
changes in accounting principles............. 85 58 69 (15 ) (15 ) (128) (83) 93
Cumulative effect of changes in accounting
principles................................... -- -- -- -- (171 ) -- -- --
------- ------ ------ ------- ------- -------- -------- -------
Net income (loss).............................. 85 58 69 (15 ) (186 ) (128) (83) 93
Preferred stock dividend requirements.......... 2 2 2 -- -- 9 9 16
------- ------ ------ ------- ------- -------- -------- -------
Net income (loss) applicable to common share
owners....................................... $ 83 $ 56 $ 67 $ (15 ) $ (186 ) $ (137) $ (92) $ 77
======= ====== ====== ======= ======= ======== ======= =======
Other Operating Data:
Depreciation expense........................... $ 235 $ 209 $ 282 $ 254 $ 227 $ 205 $ 160 $ 150
Amortization expense........................... 140 134 179 165 162 125 91 86
Share and Per Share Data:
Average common shares outstanding.............. 129 130 130 129 129 129 116 119
Net income (loss) per common share before
cumulative effect of changes in accounting
principles................................... $ 0.64 $ 0.43 $ 0.52 $(0.11 ) $(0.11 ) $(1.06) $(0.79) $ 0.65
Net income (loss) applicable to common share
owners....................................... 0.64 0.43 0.52 (0.11 ) (1.45 ) (1.06) (0.79) 0.65
Dividends per common share..................... 0.0375 0.0375 0.05 0.05 0.05 0.05 0.05 0.05
Closing stock price............................ 24.38 18.00 18.00 15.25 12.25 15.38 15.38 15.50
Ratios(F):
Ratio of earnings to fixed charges............. 1.57 1.44 1.38 1.16 (G) (H) (I) 1.81
Ratio of earnings to combined fixed charges and
preferred stock dividends.................... 1.56 1.43 1.37 1.16 (G) (H) (I) 1.59
Year-End Financial Position:
Property, plant and equipment, net............. $2,154 $1,963 $1,963 $1,890 $1,733 $1,706 $1,706 $1,373
Franchise and other noncurrent assets.......... 5,998 5,965 5,965 6,046 5,651 4,265 4,265 3,153
Total assets................................... 9,161 8,738 8,738 8,682 8,085 6,677 6,677 5,021
Long-term debt................................. 4,302 4,187 4,187 4,391 4,131 4,091 4,091 2,537
Share-owners' equity........................... 1,415 1,339 1,339 1,260 1,254 1,442 1,442 1,627
</TABLE>
6
<PAGE> 16
The Company changed its fiscal year end in 1991 from the Friday nearest
December 31 to a calendar year end. Accordingly, fiscal years presented are the
periods ended December 31, 1994, 1993, 1992 and 1991 and December 28, 1990. The
Company acquired subsidiaries in each year presented and divested subsidiaries
in certain periods. Such transactions, except for the acquisition of Johnston
and gains from the sale of certain bottling operations, did not significantly
affect the Company's operating results in any one fiscal period. All
acquisitions and divestitures have been included in or excluded from (as
appropriate) the consolidated operating results of the Company from their
respective transaction dates.
(A) In January 1995, the Company sold its 50% ownership interest in The
Coca-Cola Bottling Company of the Mid South for a pre-tax gain of $9
million, or approximately $0.04 per common share. The Company's proposed
acquisition of the Ouachita Coca-Cola Bottling Company, Inc. will result in
the reacquisition of the Mid-South interest.
(B) A one-time charge of $40 million ($0.31 per common share) to increase
deferred income taxes resulted from a 1% increase in the corporate marginal
income tax rate in connection with the Omnibus Budget Reconciliation Act of
1993.
(C) The adoption of FAS 106 and FAS 109 resulted in one-time charges to income.
Fiscal periods prior to 1992 were not restated for these accounting
changes.
(D) The pro forma Operations Summary, Other Operating Data, and Share and Per
Share Data give effect to the acquisition of Johnston in December 1991 as
though it had been completed at the beginning of 1991.
(E) In June 1990, the Company sold its interest in Coca-Cola Bottling Company
of Ohio and Portsmouth Coca-Cola Bottling Company. These operations were
sold to Johnston and, as a result of the 1991 acquisition of Johnston, were
reacquired by the Company.
(F) The ratio of earnings to fixed charges has been determined by dividing (a)
income before income taxes and fixed charges by (b) fixed charges. The
ratio of earnings to combined fixed charges and preferred stock dividends
has been determined by dividing (a) income before income taxes and fixed
charges by (b) the sum of fixed charges and the Company's preferred stock
dividend requirements. Fixed charges consist of interest expense,
amortization of deferred debt charges, the portion of rent expense
representative of interest costs and preferred stock dividend requirements
of subsidiaries. Preferred stock dividends have been increased to an amount
representing the pre-tax earnings that would be required to satisfy such
dividend requirements.
(G) Earnings for 1992 were insufficient to cover fixed charges and combined
fixed charges and preferred stock dividends by $12 million.
(H) On a pro forma basis, after giving effect to the acquisition of Johnston as
described in note (D), earnings were insufficient to cover fixed charges
and preferred stock dividends by $137 million and $146 million,
respectively.
(I) Earnings for 1991 were insufficient to cover fixed charges and combined
fixed charges and preferred stock dividends by $93 million and $102
million, respectively.
7
<PAGE> 17
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities and the
related indenture (the "Indenture") dated as of July 30, 1991, as amended by the
First Supplemental Indenture dated as of January 29, 1992 between the Company
and Chemical Bank (as successor by merger to Manufacturers Hanover Trust
Company), as trustee (the "Trustee"), summarizes certain general terms and
provisions of the Debt Securities and such Indenture. The following summaries do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all terms and provisions of the Debt Securities and
the Indenture, including the definitions therein of certain terms. A copy of the
Indenture is incorporated by reference as an exhibit to the Registration
Statement. The particular terms of the Debt Securities and any variations from
such general provisions applicable to any series of Debt Securities are
described in the Prospectus Supplement with respect to such series.
GENERAL
Debt Securities may be issued pursuant to the Indenture, without limitation
as to aggregate principal amount, in one or more series, by the Company from
time to time upon satisfaction of certain conditions precedent, including the
delivery by the Company to the Trustee of a resolution of the Board of Directors
of the Company, an authorized committee thereof, or any designees of such Board
or committee, which fixes or provides for the establishment of terms of such
Debt Securities, including: (1) the aggregate principal amount of such Debt
Securities; (2) the date on which such Debt Securities are payable; (3) the rate
or rates per annum (which may be fixed or variable) at which such Debt
Securities will bear interest, if any; (4) the dates on which such interest, if
any, will be payable; (5) the provisions for redemption of such Debt Securities,
if any, the redemption price and any remarketing arrangements relating thereto;
(6) the sinking fund requirements, if any, with respect to such Debt Securities;
(7) whether the Debt Securities are denominated or provide for payment in United
States dollars, a foreign currency or a composite currency; (8) whether the
amount of payments of principal of (and premium, if any) or interest, if any, or
any additional amounts ("Additional Amounts") in respect of such Securities may
be determined with reference to any index, formula or other method, or based on
a coin or currency other than that in which the Securities are stated to be
payable, the manner in which such amounts shall be determined and the
calculation agent, if any with respect thereto; (9) the form (registered or
bearer or both) in which Debt Securities may be issued and any restrictions
applicable to the exchange of one form for another and to the offer, sale and
delivery of Debt Securities in either form (including restrictions applicable to
the offer, sale and delivery of Securities in bearer form which result from the
requirements of the Internal Revenue Code of 1986, as amended, and the Treasury
regulations promulgated thereunder (the "Code")); (10) whether and under what
circumstances the Company will pay Additional Amounts relating to specified
taxes, assessments or other governmental charges in respect of Debt Securities
and whether the Company has the option to redeem the affected Debt Securities
rather than pay such Additional Amounts, and the terms of any such redemption;
(11) whether such Debt Securities shall be subject to defeasance and, if so, the
terms thereof; and (12) the title of the Debt Securities and the series of which
such Debt Securities shall be a part. Reference is made to the Prospectus
Supplement for the terms of the Debt Securities being offered thereby. Debt
Securities may also be issued under the Indenture upon the exercise of Debt
Warrants. See "Description of Debt Warrants."
Debt Securities may be issued from time to time with the amount of
principal or interest payable to be determined by reference to one or more
currency exchange rates, commodity prices, equity indices or other financial or
non-financial indices and on such other terms as may be described in the
applicable Prospectus Supplement.
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount below their
stated principal amount. Federal income tax consequences and other special
considerations applicable to any such Original Issue Discount Securities will be
described in the Prospectus Supplement relating thereto. "Original Issue
Discount Securities" means any Debt Securities that provide for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof upon the occurrence of an Event of Default
and the continuation thereof.
8
<PAGE> 18
The Indenture provides the Company with the ability to "reopen" a previous
issue of a series of Debt Securities and issue additional Debt Securities of
such series in addition to the ability to issue Debt Securities with terms
different than those of Debt Securities previously issued.
The Debt Securities will be unsecured and will rank pari passu with all
other unsecured and unsubordinated indebtedness of the Company. However, since
the Company is a holding company, the right of the Company, and hence the right
of creditors of the Company (including the Holders of Debt Securities), to
participate in any distribution of the assets of any subsidiary upon its
liquidation or reorganization or otherwise is necessarily subject to the prior
claims of creditors of the subsidiary, except to the extent that claims of the
Company itself as a creditor of the subsidiary may be recognized.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Debt Securities of a series will be issuable as Registered Securities,
Bearer Securities or both. Debt Securities of a series may be issuable in the
form of one or more Global Securities, as described below under "Global
Securities." Unless otherwise provided in an applicable Prospectus Supplement
with respect to a series of Debt Securities, Registered Securities denominated
in U.S. dollars will be issued only in denominations of $1,000 or any integral
multiple thereof without coupons and Bearer Securities denominated in U.S.
dollars will be issued only in denominations of $5,000 with or without coupons.
The Prospectus Supplement relating to a series of Debt Securities denominated in
a foreign or composite currency will specify the denominations thereof.
In connection with its original issuance, no Bearer Security will be mailed
or otherwise delivered to any location in the United States. A Bearer Security
may be delivered in connection with its original issuance only if the person
entitled to receive such Bearer Security furnishes written certification, in a
form specified in the applicable Prospectus Supplement, to the effect that such
Bearer Security is not being acquired by or on behalf of a United States person
(as defined in the Code) or, if a beneficial interest in such Bearer Security is
being acquired by or on behalf of a United States person, that such United
States person is a financial institution which agrees to comply with the
requirements of Section 165(j) (3) (A), (B) or (C) of the Code.
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. In addition, if Debt
Securities of any series are issuable as both Registered Securities and as
Bearer Securities and if so provided in an applicable Prospectus Supplement, at
the option of the Holder and subject to the terms of the Indenture, Bearer
Securities (with all unmatured coupons, except as provided below, and all
matured coupons in default) of such series will be exchangeable for Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor. Unless otherwise indicated in an
applicable Prospectus Supplement, any Bearer Security surrendered in exchange
for a Registered Security between (i) a Regular Record Date or a Special Record
Date and (ii) the relevant date for payment of interest, shall be surrendered
without the coupon relating to such date for payment of interest. Interest will
not be payable in respect of the Registered Security issued in exchange for such
Bearer Security but will be payable only to the Holder of such coupon when due
in accordance with the terms of the Indenture.
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer duly executed), at the
office of the Security Registrar or at the office of any transfer agent
designated by the Company for such purpose with respect to any series of Debt
Securities referred to in an applicable Prospectus Supplement, without service
charge and upon payment of any taxes and other governmental charges as described
in the Indenture. Such transfer or exchange will be effected upon the Security
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. The Company
has initially appointed the Trustee as Security Registrar under the Indenture.
If a Prospectus Supplement refers to any transfer agents (in addition to the
Security Registrar) initially designated by the Company with respect to any
series of Debt Securities, the Company may at any time rescind the designation
of any such transfer agent or approve a change in the location through which any
such transfer agent acts, except that if Debt Securities of a series are
issuable only as Registered Securities, the Company will be
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required to maintain a transfer agent in each Place of Payment for such series.
If Debt Securities of a series are issuable as Bearer Securities, the Company
will be required to maintain (in addition to the Security Registrar) a transfer
agent in a Place of Payment for such series located outside the United States.
The Company may at any time designate additional transfer agents with respect to
any series of Debt Securities.
In the event of any redemption in part, the Company shall not be required
to (i) register the transfer of or exchange Debt Securities of any series during
a period beginning at the opening of business 15 days before the day of the
selection of Debt Securities of that series for redemption and ending at the
close of business of the day of such selection; (ii) register the transfer of or
exchange any Registered Securities so selected for redemption in whole or in
part, except the unredeemed portion of any Registered Security being redeemed in
part; or (iii) exchange any Bearer Security so selected for redemption, except
with respect to Securities of a series, that such Bearer Security may be
exchanged for a Registered Security of that series so long as such Registered
Security shall be immediately surrendered for redemption with written
instruction for payment consistent with the provisions of the Indenture.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal (and premium, if any) and interest, if any, on Registered
Securities (other than a Global Security) will be made at the office of such
Paying Agent or Paying Agents as the Company may designate from time to time.
However, at the option of the Company, payment of any interest may be made by
check mailed to the address of the person entitled thereto as such address shall
appear in the Security Register, or by wire transfer to an account maintained by
the person entitled thereto as specified in the Security Register. Unless
otherwise indicated in an applicable Prospectus Supplement, payment of any
installment of interest on Registered Securities will be made to the person in
whose name such Registered Security is registered at the close of business on
the Regular Record Date for such interest payment.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal (and premium, if any) and interest, if any, on Bearer Securities
will be payable, subject to any applicable laws and regulations, at the offices
of such Paying Agents outside the United States as the Company may designate
from time to time. However, at the option of the Company, payment of any
interest may be made by check mailed to any address outside the United States or
by transfer to an account maintained by the payee outside the United States.
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
interest on Bearer Securities on any Interest Payment Date will be made only
against surrender of the coupon relating to such Interest Payment Date. No
payment with respect to any Bearer Security will be made at any office or agency
of the Company in the United States, by check mailed to any address in the
United States, or by transfer to an account maintained in the United States.
Payments will not be made in respect of Bearer Securities or coupons
appertaining thereto pursuant to presentation or any other demand for payment to
the Company or its designated Paying Agents within the United States.
Notwithstanding the foregoing, payment of principal of (and premium, if any) and
interest, if any, on Bearer Securities denominated and payable in U.S. dollars
will be made at the office of the Company's Paying Agent in the United States
if, and only if, payment of the full amount thereof in U.S. dollars at all
offices or agencies outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions.
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in The City of New York will be designated as
the Company's Paying Agent for payments with respect to Debt Securities which
are issuable solely as Registered Securities. Any Paying Agents outside the
United States and any other Paying Agents in the United States initially
designated by the Company for the Debt Securities will be named in the related
Prospectus Supplement. The Company may at any time designate additional Paying
Agents or rescind the designation of any Paying Agents or approve a change in
the office through which any Paying Agent acts, except that if Debt Securities
of a series are issuable only as Registered Securities, the Company will be
required to maintain a Paying Agent in each Place of Payment for such series.
The Company will be required to maintain a Paying Agent with respect to any
Bearer Securities of a series in a Place of Payment located outside the United
States where Debt Securities of such series and any coupons appertaining thereto
may be presented and surrendered for payment; provided that if the Debt
Securities of such series are listed on The Stock Exchange of the United Kingdom
and the Republic of Ireland or the
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Luxembourg Stock Exchange or any other stock exchange located outside of the
United States and such stock exchange shall so require, the Company will
maintain a Paying Agent in London, Luxembourg or any other required city located
outside the United States as long as the Debt Securities of such series are
listed on such exchange.
All monies paid by the Company to a Paying Agent for the payment of
principal of (and premium, if any) and interest, if any, on any Debt Security
which remain unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will be repaid to the Company, and
the Holder of such Debt Security or any coupon will thereafter look only to the
Company for payment thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depository identified in an applicable Prospectus Supplement. Global
Securities may be issued in either registered or bearer form and in either
temporary or permanent form. Unless and until it is exchanged for Debt
Securities in definitive form, a temporary Global Security may not be
transferred except as a whole by the depository for such Global Security to a
nominee of such depository, by a nominee of such depository to such depository
or another nominee of such depository, or by such depository or any such nominee
to a successor of such depository or a nominee of such successor.
The specific terms of the depository 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
any depository arrangements.
Upon the issuance of a Global Security, the depository for such Global
Security or its nominee will credit the accounts of persons held with it with
the respective principal amounts of the Debt Securities represented by such
Global Security. Such amounts shall be designated by the underwriters or agents
with respect to such Debt Securities or by the Company if such Debt Securities
are offered and sold directly by the Company. Ownership of beneficial interests
in a Global Security will be limited to persons that have amounts with the
depository for such Global Security or its nominee ("participants") or persons
that may hold interests through participants. Ownership of beneficial interests
in such Global Security will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the depository (with
respect to participants' interests) for such Global Security or by participants
or persons that hold interests through participants (with respect to beneficial
owners' interests).
CERTAIN COVENANTS IN THE INDENTURE
RESTRICTIONS ON LIENS. The Company covenants in the Indenture that it will
not, nor will it permit any Restricted Subsidiary (as hereinafter defined) to,
create, incur, issue, assume, guarantee or suffer to exist any Secured Debt (as
hereinafter defined) without in any such case effectively providing,
concurrently with the creation, incurrence, issuance, assumption or guaranty of
any such Secured Debt, that the Debt Securities (together with, if the Company
shall so determine, any other indebtedness of or guaranteed by the Company or
such Restricted Subsidiary ranking equally with the Debt Securities and then
existing or thereafter created) shall be secured equally and ratably with or
prior to such Secured Debt so long as such Secured Debt shall be secured. The
foregoing restrictions shall not apply to (1) Mortgages (as hereinafter defined)
on property, shares of stock or indebtedness of any corporation existing at the
time such corporation becomes a Restricted Subsidiary; (2) Mortgages on property
or shares of stock existing at the time of acquisition of such property or stock
by the Company or a Restricted Subsidiary or existing as of June 28, 1991; (3)
Mortgages to secure the payment of all or any part of the price of acquisition,
construction or improvement of such property or stock by the Company or a
Restricted Subsidiary, or to secure any Secured Debt incurred by the Company or
a Restricted Subsidiary, prior to, at the time of, or within 90 days after, the
later of the acquisition or completion of construction (including any
improvements on an existing property), which Secured Debt is incurred for the
purpose of financing all or any part of the purchase price thereof or
construction of improvements thereon; provided, however, that, in the case of
any such acquisition, construction or improvement, the Mortgage shall not apply
to any property theretofore owned by the Company or a Restricted Subsidiary,
other than, in the case of any such construction or improvement, any theretofore
substantially unimproved real property on which the property or improvement so
constructed is located; (4) Mortgages securing Secured Debt of a
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Restricted Subsidiary owing to the Company or to another Restricted Subsidiary;
(5) Mortgages on property of a corporation existing at the time such corporation
is merged into or consolidated with the Company or a Restricted Subsidiary or at
the time of a sale, lease or other disposition of the properties of a
corporation or firm as an entirety or substantially as an entirety to the
Company or a Restricted Subsidiary; (6) Mortgages on property of the Company or
a Restricted Subsidiary in favor of the United States of America or any state
thereof, or any department, agency or instrumentality or political subdivision
of the United States of America or any state thereof, or in favor of any other
country or any political subdivision thereof, or any department, agency or
instrumentality of such country or political subdivision, to secure partial
progress, advance or other payments pursuant to any contract or statute or to
secure any indebtedness incurred for the purpose of financing all or any part of
the purchase price or the cost of construction of the property subject to such
Mortgages; or (7) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any Mortgage
referred to in the foregoing clauses (1) through (6), inclusive; provided,
however, that the principal amount of Secured Debt secured thereby shall not
exceed the principal amount of Secured Debt so secured at the time of such
extension, renewal or replacement, and that such extension, renewal or
replacement shall be limited to all or a part of the property which secured the
Mortgage so extended, renewed or replaced (plus improvements and construction on
such property).
Notwithstanding the foregoing provisions, the Company and any one or more
Restricted Subsidiaries may, without securing the Debt Securities, create,
incur, issue, assume or guarantee Secured Debt secured by a Mortgage which would
otherwise be subject to the foregoing restrictions in an aggregate amount which,
together with all other Secured Debt of the Company and its Restricted
Subsidiaries which (if originally created, incurred, issued, assumed or
guaranteed at such time) would otherwise be subject to the foregoing
restrictions (not including Secured Debt permitted to be secured under clauses
(1) through (7) above), does not at the time exceed 10% of the share-owners'
equity of the Company and its consolidated Subsidiaries (as hereinafter defined)
as shown on the consolidated financial statements of the Company as of the end
of the fiscal year immediately preceding the date of determination.
RESTRICTIONS ON SALE AND LEASEBACK TRANSACTIONS. The Company covenants in
the Indenture that it will not, nor will it permit any Restricted Subsidiary to,
enter into any Sale and Leaseback Transaction (as hereinafter defined) unless:
(1) the Company or such Restricted Subsidiary would be entitled to create,
incur, issue, assume or guarantee indebtedness secured by a Mortgage upon such
property at least equal in amount to the Attributable Debt (as hereinafter
defined) in respect of such arrangement without equally and ratably securing the
Debt Securities; provided, however, that from and after the date on which such
arrangement becomes effective, the Attributable Debt in respect of such
arrangement shall be deemed, for all purposes under the "Restrictions on Liens"
covenant above, to be Secured Debt subject to the provisions of such covenant;
or (2) since June 28, 1991 and within a period commencing twelve months prior to
the consummation of such Sale and Leaseback Transaction and ending twelve months
after the consummation of such Sale and Leaseback Transaction, the Company or
Restricted Subsidiary, as the case may be, has expended or will expend for the
Principal Property (as hereinafter defined) an amount equal to (A) the net
proceeds of such Sale and Leaseback Transaction, and the Company elects to
designate such amount as a credit against such Sale and Leaseback Transaction,
or (B) a part of the net proceeds of such Sale and Leaseback Transaction and the
Company elects to designate such amount as a credit against such Sale and
Leaseback Transaction and applies an amount equal to the remainder of the net
proceeds as provided in clause (3) hereof; or (3) such Sale and Leaseback
Transaction does not come within the exceptions provided by clause (1) above and
the Company does not make the election permitted by clause (2) above or makes
such election only as to a part of such net proceeds, in either of which events
the Company shall apply an amount in cash equal to the Attributable Debt in
respect of such arrangement (less any amount elected under clause (2) hereof) to
the retirement, within 90 days of the effective date of any such arrangement, of
indebtedness for borrowed money of the Company or any Restricted Subsidiary
(other than indebtedness for borrowed money of the Company which is subordinated
to the Debt Securities) which by its terms matures at or is extendible or
renewable at the sole option of the obligor without requiring the consent of the
obligee to a date more than twelve months after the date of the creation of such
indebtedness for borrowed money (it being understood that such retirement may be
made by prepayment of such indebtedness for borrowed money, if
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permitted by the terms thereof, as well as by payment at maturity and that at
the option of the Company and pursuant to the terms of the Indenture, such
indebtedness may include the Debt Securities).
RESTRICTIONS ON CONSOLIDATION, MERGER OR SALE. Under the terms of the
Indenture, the Company may not consolidate with or merge with or into, or
transfer all or substantially all of its assets to, any person unless (i) either
the Company will be the resulting or surviving entity or such person is a
corporation organized and existing under the laws of the United States, a state
thereof or the District of Columbia, (ii) such person expressly assumes, by
supplemental indenture satisfactory to the Trustee, all the obligations of the
Company under the Debt Securities and the Indenture and (iii) immediately before
and immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Company as a result of such
transaction as having been incurred by the Company at the time of such
transaction, no Default or Event of Default shall have occurred or be
continuing.
CERTAIN DEFINITIONS. The term "Attributable Debt" in respect of a Sale and
Leaseback Transaction means the present value (discounted at the weighted
average interest rate borne by all Debt Securities Outstanding at the time of
such Sale and Leaseback Transaction discounted semi-annually) of the obligation
of a lessee for net rental payments during the remaining term of any lease
(including any period for which such lease has been extended).
The term "Mortgage" or "Mortgages" means any mortgage, pledge, lien,
security interest or other encumbrances upon any Principal Property or on any
shares of stock or indebtedness of any Restricted Subsidiary (whether such
Principal Property, shares of stock or indebtedness are now owned or hereafter
acquired) .
The term "Principal Property" means each bottling plant or facility of the
Company or a Restricted Subsidiary located within the United States of America
(other than its territories and possessions) or Puerto Rico, except any such
bottling plant or facility which the Board of Directors of the Company by
resolution reasonably determines not to be of material importance to the total
business conducted by the Company and its Restricted Subsidiaries.
The term "Restricted Subsidiary" means any Subsidiary (i) substantially all
of the property of which is located, or substantially all of the business of
which is carried on, within the fifty states of the United States of America,
the District of Columbia or Puerto Rico and (ii) which owns or leases any
Principal Property.
The term "Sale and Leaseback Transaction" means any arrangement with any
person providing for the leasing by the Company or any Restricted Subsidiary of
any Principal Property whether such Principal Property is now owned or hereafter
acquired (except for temporary leases for a term, including renewals at the
option of the lessee, of not more than three years and except for leases between
the Company and a Restricted Subsidiary or between Restricted Subsidiaries),
which property has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such person with the intention of taking back a lease
of such property.
The term "Secured Debt" means notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed secured by any Mortgage.
The term "Subsidiary" means any corporation of which stock having by its
terms ordinary voting power to elect at least a majority of the board of
directors of such corporation (irrespective of whether or not at the time stock
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned by the Company or by the Company and one or more
Subsidiaries or by one or more Subsidiaries.
EVENTS OF DEFAULT
Under the Indenture, the following will be Events of Default with respect
to Debt Securities of a particular series: (a) default in the payment of,
interest on or Additional Amounts payable in respect of any Debt Security of
that series when due, continued for 30 days; (b) default in the payment of any
principal or premium, if any, on any Debt Security of that series when due; (c)
default in the making of any sinking fund payment, when due, in respect of any
Debt Security of that series; (d) default in the performance of any other
covenant of the Company contained in the Indenture for the benefit of such
series or in the Debt Securities of such series, continued for 60 days after
written notice as provided in the Indenture; (e) the acceleration of any
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other indebtedness of the Company in excess of $15,000,000 due to default; (f)
certain events of bankruptcy, insolvency or reorganization; and (g) any other
Event of Default provided with respect to Debt Securities of that series. The
Trustee or the Holders of 25% in principal amount of the Outstanding Debt
Securities of that series may declare the principal amount (or such lesser
amount as may be provided for in the Debt Securities of that series) of all
Outstanding Debt Securities of that series and the interest accrued thereon and
Additional Amounts payable in respect thereof, if any, to be due and payable
immediately if an Event of Default (other than one in (f) above) with respect to
Debt Securities of such series shall occur and be continuing at the time of
declaration. If an Event of Default as specified in (f) above occurs, all unpaid
principal and accrued interest (or such lesser amount as may be provided for in
the Debt Securities of that series) shall ipso facto become immediately due and
payable without any other declaration or act on the part of the Trustee or any
Holder. It is anticipated that the terms of each series of Original Issue
Discount Securities will provide that, upon declaration of acceleration of the
Maturity of any such series of Original Issue Discount Securities, the Accreted
Amount (as hereinafter defined) of such Original Issue Discount Securities shall
be due and payable. "Accreted Amount" shall mean an amount in respect of each
Original Issue Discount Security of the affected series equal to the sum of (a)
the issue price of such Original Issue Discount Security as determined in
accordance with Section 1273 of the Code, (b) the aggregate of the portions of
the original issue discount which shall theretofore have accrued pursuant to
Section 1272 of the Code (without regard to Section 1272(a) (7) of the Code)
from the date of issue of such Original Issue Discount Security (i) for each six
month or shorter period ending on the Interest Payment Date prior to the date of
declaration of acceleration, and (ii) for the shorter period, if any, from the
end of the immediately preceding six-month period, as the case may be, to the
date of declaration of acceleration, and (c) accrued interest to the date such
Accreted Amount is paid (without duplication of any amount set forth in (b)
above); minus all amounts theretofore paid in respect of such Original Issue
Discount Security, which amounts are considered as part of the "stated
redemption price at maturity" of such Original Issue Discount Security within
the meaning of Section 1273(a)(2) of the Code or any successor provision
(whether such amounts paid were denominated principal or interest).
At any time after a declaration of acceleration has been made with respect
to Debt Securities of any series but before a judgment or decree for payment of
money due has been obtained by the Trustee, the Holders of a majority in
principal amount of the Outstanding Debt Securities of that series may rescind
any declaration of acceleration and its consequences, if all payments due (other
than those due as a result of acceleration) have been made and all Events of
Default have been remedied or waived. Any Event of Default with respect to Debt
Securities of any series may be waived by the Holders of a majority in principal
amount of all Outstanding Debt Securities of that series, except in a case of
failure to pay principal or premium, if any, or interest or Additional Amounts,
if any, on any Debt Security of that series for which payment had not been
subsequently made or in respect of a covenant or provision which cannot be
modified or amended without the consent of the Holder of each Outstanding Debt
Security of such series affected.
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of default with respect to a particular series of Debt Securities,
give the Holders of the Debt Securities of such series notice of such default
known to it (the term default to mean the events specified above without grace
periods); provided that, except in the case of default in the payment of
principal of, premium (if any) on, interest on or any Additional Amount payable
with respect to any Debt Securities of any series or in the making of any
sinking fund payment payable with respect to any Debt Securities of any series,
the Trustee may withhold the notice if and so long as a committee of its trust
officers in good faith determines that withholding the notice is in the best
interests of the Holders of Debt Securities of that series and any related
series.
The Holders of a majority in principal amount of the Outstanding Debt
Securities of a series may 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 Debt Securities of such series,
provided that such direction shall not be in conflict with any law or the
Indenture. Before proceeding to exercise any right or power under the Indenture
at the direction of such Holders, the Trustee will be entitled to receive from
such Holders reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in complying with any such direction.
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The Company will be required to furnish to the Trustee annually a statement
as to the fulfillment by the Company of all of its obligations under the
Indenture.
MODIFICATION AND WAIVER
With certain exceptions, modification or amendment of the Indenture or the
rights of Holders of the Debt Securities may be effected by the Company and the
Trustee with the consent of the Holders of 66 2/3% in principal amount of the
Outstanding Debt Securities of each series affected thereby, provided that no
such modification or amendment may, without the consent of the Holder of each
Outstanding Debt Security affected thereby, (a) change the Stated Maturity of
any installment of principal of, or interest or Additional Amounts on, any Debt
Security or any premium payable on the Redemption Price; (b) reduce the
principal amount of, or the interest or Additional Amounts payable on, any Debt
Security or reduce the amount of principal which could be declared due and
payable on, any Debt Security or reduce the amount of principal which could be
declared due and payable prior to the Stated Maturity; (c) change the coin or
currency of any payment of principal, any premium, interest or Additional
Amounts on any Debt Security; (d) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Security; (e) reduce
the percentage in principal amount of the Outstanding Debt Securities of any
series, the consent of whose Holders is required to approve any supplemental
indenture, to waive compliance with certain provisions of the Indenture or
certain defaults thereunder, or to reduce quorum or voting requirements
applicable to meetings of Holders; or (f) modify the foregoing requirements in
(a) through (e) above, requiring the consent of each Holder of each Outstanding
Debt Security affected thereby, or the percentages of such Holders required to
waive past defaults, or the percentage of such Holders which may rescind an
acceleration, except to increase any such percentage, and except to provide that
other provisions of the Indenture cannot be modified or amended without the
consent of the Holder of each outstanding Debt Security affected thereby. Except
with respect to certain fundamental provisions, the Holders of at least a
majority in principal amount of Outstanding Debt Securities of any series may,
with respect to such series, waive past defaults under the Indenture and waive
compliance by the Company with certain provisions of the Indenture.
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series if Debt Securities of that series are issuable as
Bearer Securities. A meeting may be called at any time by the Trustee, and also,
upon request, by the Company or the Holders of at least 10% in principal amount
of the Outstanding Debt Securities of such series, in any such case upon notice.
Any resolution passed or decision taken at any meeting of Holders of Debt
Securities of any series duly held in accordance with the Indenture will be
binding on all Holders of Debt Securities of that series and the related
coupons. With certain exceptions, the quorum at any meeting called to adopt a
resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the Outstanding Debt Securities
of a series.
SATISFACTION AND DISCHARGE OF INDENTURE
The Indenture generally provides that the Company may terminate its
obligations under the Indenture with respect to a particular series of Debt
Securities if all the Debt Securities of such series previously authenticated
and delivered (other than lost, destroyed or stolen Debt Securities of such
series that have been replaced or paid) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it thereunder or if
(i) the Debt Securities of a particular series have matured or will mature
within one year or all of them are to be called for redemption within one year
under arrangements satisfactory to the Trustee for giving the notice of
redemption and (ii) the Company irrevocably deposits with the Trustee money
sufficient to pay principal of and interest on such Debt Securities that are due
or will become due upon redemption or maturity, as the case may be, and to pay
all other sums payable by it thereunder. In such case, Holders of such Debt
Securities must look to the deposited money for payment.
CONCERNING THE TRUSTEE
Chemical Bank (as successor by merger to Manufacturers Hanover Trust
Company), New York, New York, is the Trustee under the Indenture. The Company
maintains banking relationships in the ordinary course of business with Chemical
Bank.
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DESCRIPTION OF DEBT WARRANTS
The Company may issue, together with Debt Securities or Currency Warrants
or separately, Debt Warrants for the purchase of Debt Securities. The Debt
Warrants are to be issued under Debt Warrant Agreements (each a "Debt Warrant
Agreement") to be entered into between the Company and a bank or trust company,
as Debt Warrant Agent (the "Debt Warrant Agent"), all as shall be set forth in
the Prospectus Supplement relating to Debt Warrants being offered thereby. A
copy of the form of Debt Warrant Agreement, including the form of Warrant
Certificates representing the Debt Warrants (the "Debt Warrant Certificates"),
reflecting the alternative provisions to be included in the Debt Warrant
Agreements that will be entered into with respect to particular offerings of
Debt Warrants, is incorporated by reference as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Debt Warrant
Agreement and the Debt Warrant Certificates do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, all the
provisions of the Debt Warrant Agreement and the Debt Warrant Certificates,
respectively, including the definitions therein of certain terms.
GENERAL
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Debt Warrant Agreement relating to such Debt
Warrants and the Debt Warrant Certificates representing such Debt Warrants,
including the following: (1) the designation, aggregate principal amount and
terms of the Debt Securities purchasable upon exercise of such Debt Warrants and
the procedures and conditions relating to the exercise of such Debt Warrants;
(2) the designation and terms of any related Debt Securities with which such
Debt Warrants are issued and the number of such Debt Warrants issued with each
such Debt Security; (3) the date, if any, on and after which such Debt Warrants
and the related Debt Securities will be
separately transferable; (4) the principal amount of Debt Securities purchasable
upon exercise of each Debt Warrant and the price at which such principal amount
of Debt Securities may be purchased upon such exercise; (5) the date on which
the right to exercise such Debt Warrants shall commence and the date on which
such right shall expire (the "Expiration Date"); (6) a discussion of material
federal income tax considerations, if any; and (7) whether the Debt Warrants
represented by the Debt Warrant Certificates will be issued in registered or
bearer form, and, if registered, where they may be transferred and registered.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Debt Warrant Agent or any other office
indicated in the Prospectus Supplement. Prior to the exercise of their Debt
Warrants, Holders of Debt Warrants will not have any of the rights of Holders of
the Debt Securities purchasable upon such exercises and will not be entitled to
payments of principal of (and premium, if any) or interest, if any, on the Debt
Securities purchasable upon such exercise.
EXERCISE OF DEBT WARRANTS
Each Debt Warrant will entitle the Holder to purchase for cash such
principal amount of Debt Securities at such exercise price as shall in each case
be set forth in, or be determinable as set forth in, the Prospectus Supplement
relating to the Debt Warrants offered thereby. Debt Warrants may be exercised at
any time up to the close of business on the Expiration Date set forth in the
Prospectus Supplement relating to the Debt Warrants offered thereby. After the
close of business on the Expiration Date, unexercised Debt Warrants will become
void.
Debt Warrants may be exercised as set forth in the Prospectus Supplement
relating to the Debt Warrants offered thereby. Upon receipt of payment and the
Debt Warrant Certificate properly completed and duly executed at the corporate
trust office of the Debt Warrant Agent or any other office indicated in the
Prospectus Supplement, the Company will, as soon as practicable, forward the
Debt Securities purchasable upon such exercise. If less than all of the Debt
Warrants represented by such Debt Warrant Certificate are exercised, a new Debt
Warrant Certificate will be issued for the remaining amount of Debt Warrants.
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DESCRIPTION OF CURRENCY WARRANTS
The Company may issue, together with Debt Securities or Debt Warrants or
separately, Currency Warrants (i) in the form of Currency Put Warrants entitling
the Holders thereof to receive from the Company the Cash Settlement Value in
U.S. dollars of the right to sell a specified amount of a specified foreign
currency or currency units for a specified amount of U.S. dollars and/or (ii) in
the form of Currency Call Warrants entitling the Holders thereof to receive from
the Company the Cash Settlement Value in U.S. dollars of the right to purchase a
specified amount of a specified foreign currency or units of two or more
currencies for a specified amount of U.S. dollars. The spot exchange rate of the
applicable Base Currency, upon exercise, as compared to the U.S. dollar, will
determine whether the Currency Warrants have a Cash Settlement Value on any
given day prior to their expiration.
The Currency Warrants are to be issued under a Currency Warrant Agreement
to be entered into between the Company and a bank or trust company, as Currency
Warrant Agent (the "Currency Warrant Agent"), all as shall be set forth in the
applicable Prospectus Supplement. A copy of the form of Currency Warrant
Agreement, including the forms of global Warrant Certificates representing the
Currency Put Warrants and Currency Call Warrants (the "Currency Warrant
Certificates"), reflecting the provisions to be included in the Currency Warrant
Agreement that will be entered into with respect to particular offerings of
Currency Warrants, is incorporated by reference as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Currency Warrant Agreement and the Currency Warrant Certificates do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to, all the provisions of the Currency Warrant Agreement and the
Currency Warrant Certificates, respectively, including the definitions therein
of certain terms.
GENERAL
The applicable Prospectus Supplement will describe the terms of Currency
Warrants offered thereby, the Currency Warrant Agreement relating to such
Currency Warrants and the Currency Warrant Certificates representing such
Currency Warrants, including the following: (1) whether such Currency Warrants
will be Currency Put Warrants, Currency Call Warrants, or both; (2) the formula
for determining the Cash Settlement Value, if any, of each Currency Warrant; (3)
the procedures and conditions relating to the exercise of such Currency
Warrants; (4) the circumstances which will cause the Currency Warrants to be
deemed to be automatically exercised; (5) any minimum number of Currency
Warrants which must be exercised at any one time, other than upon automatic
exercise; (6) the date on which the right to exercise such Currency Warrants
will commence and the date on which such right will expire (the "Expiration
Date"); and (7) a discussion of material federal income tax considerations, if
any.
BOOK-ENTRY PROCEDURES AND SETTLEMENT
Except as may otherwise be provided in an applicable Prospectus Supplement,
the Currency Warrants will be issued in book-entry form represented by a global
Currency Warrant Certificate registered in the name of a depository or its
nominee. Holders will not be entitled to receive definitive certificates
representing Currency Warrants. A Holder's ownership of a Currency Warrant will
be recorded on or through the records of the brokerage firm or other entity that
maintains such Holder's account. In turn, the total number of Currency Warrants
held by an individual brokerage firm for its clients will be maintained on the
records of the depository in the name of such brokerage firm or its agent.
Transfer of ownership of any Currency Warrant will be effected only through the
selling Holder's brokerage firm.
The Cash Settlement Value will be paid by the Currency Warrant Agent to the
depository. The depository will be responsible for crediting the amount of such
payments to the accounts of participants or indirect participants in accordance
with its standard procedures. Each participant or indirect participant will be
responsible for disbursing such payments to the Holders that it represents and
to each brokerage firm for which it acts as agent. Each such brokerage firm will
be responsible for disbursing funds to the Holders that it represents.
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<PAGE> 27
EXERCISE OF CURRENCY WARRANTS
Except as may otherwise be provided in an applicable Prospectus Supplement,
each Currency Warrant will entitle the Holder to receive the Cash Settlement
Value of such Currency Warrant on the applicable Exercise Date, in each case as
such terms will be defined in the applicable Prospectus Supplement. If not
exercised prior to 3:00 P.M., New York City time, on the fifth New York Business
Day preceding the Expiration Date, Currency Warrants will be deemed
automatically exercised on the Expiration Date.
LISTING
Except as may otherwise be provided in an applicable Prospectus Supplement,
each issue of Currency Warrants will be listed on a national securities
exchange, subject only to official notice of issuance, as a condition of sale of
any such Currency Warrants. In the event that the Currency Warrants are delisted
from, or permanently suspended from trading on, such exchange, the Expiration
Date for such Currency Warrants will be the date such delisting or trading
suspension becomes effective and Currency Warrants not previously exercised will
be deemed automatically exercised on such Expiration Date. The applicable
Currency Warrant Agreement will contain a covenant of the Company not to seek
delisting of the Currency Warrants, or suspension of their trading, on such
exchange.
PLAN OF DISTRIBUTION
The Company may sell the Securities in any of the following ways: (i)
through underwriters or dealers, (ii) directly to a limited number of
institutional purchasers or to a single institutional purchaser, (iii) through
agents and (iv) a combination of any of the foregoing. Any such underwriter,
dealer or agent may be deemed to be an underwriter within the meaning of the
Securities Act of 1933. The Prospectus Supplement with respect to the Securities
of a particular series sets forth the terms of the offering of such Securities,
including the name or names of any underwriters or agents, the public offering
or purchase price and the proceeds to the Company from such sale, any discounts
and commissions to be allowed or paid to the underwriters or agents, all other
items constituting underwriting compensation, the discounts and commissions to
be allowed or paid to dealers, if any, and the securities exchanges, if any, on
which the Securities will be listed. Under certain circumstances, the Company
may repurchase Securities and reoffer them to the public as set forth above. The
Company may also arrange for repurchases and resales of such Securities by
dealers.
If so indicated in the Prospectus Supplement, the Company will authorize
the underwriters to solicit offers by certain institutions to purchase Debt
Securities from the Company pursuant to Delayed Delivery Contracts providing for
payment and delivery on the date stated in the Prospectus Supplement. Each such
contract will be for an amount not less than the amount specified in such
Prospectus Supplement, and unless the Company otherwise agrees, the aggregate
principal amount of Debt Securities sold pursuant to such contracts shall not be
more than the respective amounts stated in the Prospectus Supplement.
Institutions with whom such contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions, and other institutions, but
shall in all cases be subject to the approval of the Company. Delayed Delivery
Contracts will not be subject to any conditions except that the purchase by an
institution of the Debt Securities covered thereby shall not at the time of
delivery be prohibited under the laws of any jurisdiction in the United States
to which such institution is subject.
Under the agreements that may be entered into with the Company, the
underwriters, dealers and agents may be entitled to indemnification by the
Company against certain civil liabilities, including liabilities under the
Securities Act of 1933, or to contribution with respect to payments which the
underwriters, dealers or agents may be required to make in respect thereof.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, the Company in the ordinary course of business.
Each underwriter, dealer and agent participating in the distribution of any
Debt Securities that are issuable as Bearer Securities will agree that it will
not offer, sell or deliver, directly or indirectly, Bearer
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<PAGE> 28
Securities in the United States or to United States persons (other than
qualifying financial institutions) in connection with the original issuance of
such Debt Securities.
LEGAL MATTERS
The legality of the Securities has been passed upon for the Company by
Lowry F. Kline, General Counsel of the Company, who as to matters of New York
law has relied upon the opinion of Cravath, Swaine & Moore, New York, New York.
EXPERTS
The consolidated financial statements of Coca-Cola Enterprises Inc. at
December 31, 1994 and December 31, 1993 and for each of the three years in the
period ended December 31, 1994, included in Coca-Cola Enterprises Inc.'s Annual
Report on Form 10-K, as amended on November 3, 1995, have been audited by Ernst
& Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
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<PAGE> 29
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No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this Prospectus or
the accompanying Prospectus Supplement and, if given or made, such information
or representation must not be relied upon as having been authorized by the
Company or any agent or underwriter. This Prospectus and the accompanying
Prospectus Supplement do not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful to make such offer in such jurisdiction. Neither
the delivery of this Prospectus or any Prospectus Supplement nor any sale made
hereunder or thereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Recent Developments................... S-2
Use of Proceeds....................... S-3
Summary of Financial Data............. S-4
Description of Debentures............. S-6
Book-Entry, Delivery and Form......... S-7
Underwriting.......................... S-9
Legal Matters......................... S-9
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents By
Reference........................... 2
The Company........................... 4
Risk Factors Relating to Currencies
and Currency Warrants............... 5
Use of Proceeds....................... 5
Summary Financial Data................ 6
Description of Debt Securities........ 8
Description of Debt Warrants.......... 16
Description of Currency Warrants...... 17
Plan of Distribution.................. 18
Legal Matters......................... 19
Experts............................... 19
</TABLE>
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$300,000,000
(LOGO) COCA-COLA ENTERPRISES INC.
7% DEBENTURES DUE OCTOBER 1, 2026
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PROSPECTUS SUPPLEMENT
September 25, 1996
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LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
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