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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 01-09300
(COCA-COLA ENTERPRISES INC. LOGO)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 58-0503352
(STATE OF (IRS EMPLOYER IDENTIFICATION
INCORPORATION) NUMBER)
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2500 WINDY RIDGE PARKWAY, ATLANTA, GEORGIA 30339
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(770) 989-3000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Securities registered pursuant to Section 12(b) of the Act:
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NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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Common Stock, par value $1.00 per share New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
NONE
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Indicate by check mark whether the registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /
The aggregate market value of Common Stock held by nonaffiliates of the
registrant as of February 26, 1996 was $1,492,634,930.
There were 125,325,109 shares of Common Stock outstanding as of February
26, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Share Owners for the year
ended December 31, 1995, are incorporated by reference in Parts II and IV.
Portions of the registrant's Proxy Statement for the Annual Meeting of
Share Owners to be held on April 11, 1996 are incorporated by reference in Part
III hereof.
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TABLE OF CONTENTS
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PART I
ITEM 1. BUSINESS....................................................... 1
Introduction................................................... 1
Relationship with The Coca-Cola Company........................ 2
Acquisitions and Divestitures.................................. 3
Territories.................................................... 3
Products....................................................... 4
Marketing...................................................... 4
Raw Materials.................................................. 4
Domestic Bottle Contracts...................................... 5
International Bottler's Agreement.............................. 9
Competition.................................................... 10
Employees...................................................... 10
Governmental Regulation........................................ 10
ITEM 2. PROPERTIES..................................................... 12
ITEM 3. LEGAL PROCEEDINGS.............................................. 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............ 13
ITEM 4(A). EXECUTIVE OFFICERS OF THE COMPANY.............................. 14
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS........................................................ 16
ITEM 6. SELECTED FINANCIAL DATA........................................ 16
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.......................................... 16
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................... 16
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE........................................... 17
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT..................................................... 17
ITEM 11. EXECUTIVE COMPENSATION......................................... 17
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT..................................................... 17
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................. 17
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K............................................................ 18
SIGNATURES..................................................... 23
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PART I
ITEM 1. BUSINESS
INTRODUCTION
Coca-Cola Enterprises Inc. (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. At
December 31, 1995, The Coca-Cola Company owned approximately 44% of the
Company's common stock. References in this report to the "Company" include the
Company and its subsidiaries and divisions.
The Company's domestic and international bottling territories (see
"Acquisitions and Divestitures" and "Territories" below), contained
approximately 156 million people at the end of 1995. During 1995, the Company
sold approximately 1.9 billion equivalent cases1 of beverage product throughout
its territories, approximately 90% of which were beverage products of The
Coca-Cola Company.
In the United States, the Company operates in exclusive and perpetual
territories containing approximately 54% of the population and accounting for
approximately 56% of all equivalent cases of bottled and canned product sales of
The Coca-Cola Company sold during 1995. These territories include the five
states with the largest population increases from 1991 to 1995 -- California,
Texas, Florida, Georgia, and Washington.
Domestic Operations
Management estimates that the Company's 1995 total case sales of beverage
products in the United States and the Caribbean were approximately 1.8 billion
equivalent cases, or approximately 19% of the estimated total 1995 case sales of
carbonated beverage products by all bottlers and fountain distributors.
In 1995, approximately 69% of the equivalent case sales of the Company,
excluding products in post-mix (fountain) form, were Coca-Cola Trademark
Beverages,2 approximately 21% were other beverage products of The Coca-Cola
Company and approximately 10% were beverage products of companies other than The
Coca-Cola Company. The Company's equivalent case sales of products in bottles
and cans, including products of companies other than The Coca-Cola Company,
constituted approximately 86% of the equivalent case sales of the Company in
1995. The remaining 14% of the Company's equivalent case sales in 1995 were in
post-mix form.
The Netherlands Operations
In 1995, the Company's subsidiary in the Netherlands, Coca-Cola Beverages
Nederland B.V. ("CCB Nederland"), sold approximately 90 million equivalent
cases, approximately 99% of which were beverage products of The Coca-Cola
Company.
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1 As used in this report, the term "equivalent case" refers to 192 ounces of
finished beverage product (24 eight-ounce servings).
2 As used in this report, the term "Coca-Cola Trademark Beverages" refers to
beverages bearing the trademarks "Coca-Cola" or "Coke", and "beverage products
of The Coca-Cola Company" refers collectively to the Coca-Cola Trademark
Beverages and all other beverage products of The Coca-Cola Company.
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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 primary operating objective is to increase long-term
operating cash flows through profitable increases in sales volume. The Company
expects to achieve this objective by creating and executing innovative and
superior marketing programs at the local level, balancing volume growth with
improved margins and sustainable increases in market share, developing
profitable business partnerships with customers, increasing investments in
high-profit, high-volume distribution channels, such as cold drink, and
providing financial incentives to employees to increase their focus on enhancing
share-owner value.
The Company's primary financial objective is to deliver a superior return
on investment to share owners. The Company intends to achieve this objective by
maintaining a capital structure which maximizes financial flexibility, given
current investment opportunities, identifying and acquiring territories that
provide long-term value, and allocating resources appropriately between capital
expenditures, infrastructure, share repurchases, acquisitions, and debt
repayment.
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. See "Domestic Bottle Contracts" and
"International Bottler's Agreement" below. 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 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 viewed as those best suited to promote the interests of The
Coca-Cola Company and the Coca-Cola bottler system, which may or may not include
the Company. 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. See "Acquisitions and Divestitures" below and "Certain Relationships and
Related Transactions -- Agreements and Transactions with The Coca-Cola Company"
in the Company's Proxy Statement for the Annual Meeting of Share Owners to be
held April 11, 1996 (the "Company's 1996 Proxy Statement"), which information is
incorporated by reference in Item 13 hereof.
The Company intends to acquire only bottling businesses offering the
Company the ability to produce long-term share-owner value.
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ACQUISITIONS AND DIVESTITURES
During 1995, the Company acquired The Wichita Coca-Cola Bottling Company,
having territories in Kansas, Nebraska, Colorado and Missouri, for approximately
$157 million, and the assets of a fountain business in Las Vegas, Nevada for
approximately $3.4 million. The total cost of all the Company's acquisitions
since reorganization in 1986 through December 31, 1995, including assumed and
issued debt, where applicable, is approximately $5.7 billion.
On February 21, 1996, the Company acquired the Ouachita Coca-Cola Bottling
Company, Inc. ("Ouachita Coca-Cola") having territories in Arkansas, Louisiana
and Mississippi, for a total consideration of approximately $313 million
(including assumed and issued debt), which was paid to the former shareholders
in cash, common stock and convertible preferred stock of the Company.
On December 12, 1995, the Company announced it was in preliminary
discussions with The Coca-Cola Company to acquire its bottlers located in
Belgium and France and a canning facility in Dunkirk, France.
In 1995, the Company sold its 50% interest in a Mississippi bottler for
approximately $17 million. Since reorganization in 1986, the aggregate proceeds
to the Company from the sale of bottlers and other businesses have been
approximately $473 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
Coca-Cola"), and the above-referenced Mississippi bottler was reacquired by the
Company in 1996 as a result of the acquisition of Ouachita Coca-Cola.
TERRITORIES
The Company's bottling territories in the United States and the Caribbean
include portions of 38 states and all of the District of Columbia, the U.S.
Virgin Islands, and the islands of Tortola and Grand Cayman. At December 31,
1995, these territories contained approximately 141 million people; giving
effect to the acquisition of Ouachita Coca-Cola, these territories contained
approximately 143 million people, representing approximately 54% of the United
States population. Population in the territories in the United States in which
the Company operated at December 31, 1995 increased over the preceding five
years by approximately 5.4%, as compared to an increase of 4.5% for the general
United States population during the same period.
The Company's territory in the Netherlands has a population of
approximately 15 million people.
The following maps identify the territories in which the Company operates:
Appearing here are maps of the United States,
a portion of the Caribbean and a portion of
Western Europe, outlining the Company's
territories.
(MAPS ARE NOT TO SAME SCALE)
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PRODUCTS
The Company markets, distributes, and produces beverage products of The
Coca-Cola Company; these products include Coca-Cola, Coca-Cola classic, caffeine
free Coca-Cola classic, diet Coke, caffeine free diet Coke, Sprite, diet Sprite,
Cherry Coke, diet Cherry Coke, Barq's, Fanta, Fresca, Fruitopia, Hi-C fruit
drinks, Mello Yello, Minute Maid and diet Minute Maid soft drinks, Minute Maid
Juices to Go, Mr. PiBB, diet Mr. PiBB, Powerade, Ramblin' root beer, and TAB.
Additionally, the Company markets, produces and distributes (or obtains from
contract packers) Nestea products, under license from Coca-Cola Nestle
Refreshments Company, USA, and various noncola beverage products under the
trademarks of companies other than The Coca-Cola Company. Substantially all of
the Coca-Cola Trademark Beverages, as well as TAB, Sprite, Minute Maid, and diet
Minute Maid carbonated orange beverages, are available throughout the Company's
domestic territories. Other products of The Coca-Cola Company and of other
companies are available in selected territories. Certain of the Company's
locations supply product to other Coca-Cola bottlers and major fountain
accounts.
The Coca-Cola Company and other companies manufacture syrups and
concentrates, and in some cases the finished product, for sale to bottlers and
to fountain wholesalers. Bottling and canning operations combine the syrup or
concentrate with sweetener and carbonated water, and package the finished
product in authorized bottles, cans, and post-mix containers for sale to
retailers. See "Marketing" and "Raw Materials" below.
Approximately 71% of the Company's domestic equivalent case sales in 1995
(excluding post-mix) represented caloric products and the balance represented
low-calorie products.
MARKETING
The Company sells its products in a variety of packages authorized by The
Coca-Cola Company and other companies. In 1995, domestic and international
equivalent case sales of the Company, excluding post-mix syrup sales, were
packaged approximately 56% in cans, 39% in other nonrefillable packaging, 4% in
returnable containers, and 1% in pre-mix containers. Post-mix syrup accounted
for approximately 14% of the Company's equivalent case sales in 1995.
The Company relies extensively on advertising and sales promotion in the
marketing of its products. The Coca-Cola Company and the other beverage
companies that supply concentrates, syrups, and finished product to the Company
join in making substantial advertising expenditures in all major media to
promote sales in the local areas served by the Company. The Company also
benefits from national advertising programs conducted by The Coca-Cola Company
and other beverage companies. In 1995, the Company's local media advertising
expenditures were approximately $39 million, in addition to cooperative media
advertising payments by The Coca-Cola Company of approximately $44 million.
Certain of the marketing expenditures by The Coca-Cola Company are made pursuant
to annual arrangements between The Coca-Cola Company and the Company. Although
The Coca-Cola Company has advised the Company that it intends to continue to
provide marketing support in 1996, it is not obligated to do so under either the
domestic or international bottle contracts between The Coca-Cola Company and the
Company. See "Domestic Bottle Contracts" and "International Bottler's Agreement"
below.
Sales of the Company's products are seasonal, with the second and third
calendar quarters generally accounting for higher sales volumes than the first
and fourth quarters.
RAW MATERIALS
In addition to concentrates, sweeteners, and finished product, the Company
purchases carbon dioxide, glass and plastic bottles, cans, closures, post-mix
packaging (such as plastic bags in
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cardboard boxes), and other packaging materials. The Company generally purchases
its raw materials, other than concentrates, syrups, and sweeteners, from
multiple suppliers. The bottle contracts with The Coca-Cola Company provide
that, with respect to the products of The Coca-Cola Company, all authorized
containers, closures, cases, cartons, and other packages and labels must be
purchased from manufacturers approved by The Coca-Cola Company.
High fructose corn syrup currently is the principal sweetener of the
beverage products, other than low-calorie products, of The Coca-Cola Company.
The Company and The Coca-Cola Company have entered into arrangements for the
purchase by the Company from The Coca-Cola Company of substantially all of the
Company's requirements for sweeteners for 1996. See "Certain Relationships and
Related Transactions -- Agreements and Transactions with The Coca-Cola
Company -- Sweetener Requirements Agreement" in the Company's 1996 Proxy
Statement, which information is incorporated by reference in Item 13 hereof. The
Company does not separately purchase low-calorie sweeteners because sweeteners
for the low-calorie beverage products of The Coca-Cola Company are contained in
the syrup or concentrate purchased by the Company from The Coca-Cola Company.
The Company currently purchases a significant portion of its requirements
for plastic bottles from bottling cooperatives jointly owned by it and other
Coca-Cola bottlers. Management of the Company believes that ownership interests
in certain suppliers and the self-manufacture of certain packages serve to
reduce or contain costs.
There are no materials or supplies used by the Company which are currently
in short supply, although the supply of specific materials could be adversely
affected by strikes, weather conditions, governmental controls, or national
emergencies.
DOMESTIC BOTTLE CONTRACTS
The Company purchases concentrate and syrup from The Coca-Cola Company and
markets, distributes, and produces its principal liquid nonalcoholic refreshment
products within the United States under two basic forms of bottle contracts with
The Coca-Cola Company: bottle contracts that cover the Coca-Cola Trademark
Beverages (the "Cola Bottle Contracts") and bottle contracts that cover other
carbonated beverages of The Coca-Cola Company (the "Allied Bottle Contracts")
(herein referred to collectively as the "Bottle Contracts"). See "Introduction"
and "Products" above. The Company and each of its wholly owned bottling company
subsidiaries are parties to one or more separate Cola Bottle Contracts and to
various Allied Bottle Contracts. In this section, unless the context indicates
otherwise, a reference to the Company refers to the legal entity, which may be
either the Company or one of its bottling company subsidiaries, which is a party
to the Bottle Contracts with The Coca-Cola Company.
The Cola Bottle Contracts
The Cola Bottle Contracts provide that the Company will purchase its entire
requirements of concentrates and syrups for Coca-Cola Trademark Beverages from
The Coca-Cola Company at prices, terms of payment, and other terms and
conditions of supply, as determined from time to time by The Coca-Cola Company
in its sole discretion. The Company has the exclusive right to distribute
Coca-Cola Trademark Beverages for sale in its territories in authorized
containers. The Coca-Cola Company may determine, from time to time in its sole
discretion, what types of containers to authorize for use with products of The
Coca-Cola Company.
Pursuant to the Cola Bottle Contracts, The Coca-Cola Company annually
establishes the prices charged to the Company for concentrates and syrups for
Coca-Cola Trademark Beverages. The Company expects that net prices charged by
The Coca-Cola Company in 1996 for syrup and concentrates will increase
approximately 2.8% as compared to 1995 prices. The Coca-Cola Company has no
rights under the Bottle Contracts to establish the resale prices at which the
Company sells its products.
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The Company is obligated to maintain such plant and equipment, staff,
distribution, and vending facilities as are capable of manufacturing, packaging,
and distributing Coca-Cola Trademark Beverages in accordance with the Cola
Bottle Contracts and in sufficient quantities to fully satisfy the demand for
these beverages in its territories; to undertake adequate quality control
measures prescribed by The Coca-Cola Company; to develop and stimulate the
demand for Coca-Cola Trademark Beverages in those territories; to use all
approved means, and spend such funds on advertising and other forms of
marketing, as may be reasonably required to satisfy that objective; and to
maintain such sound financial capacity as may be reasonably necessary to assure
performance by the Company and its affiliates of their obligations to The
Coca-Cola Company. The Company is required to meet annually with The Coca-Cola
Company to present its marketing, management, and advertising plans with respect
to the Coca-Cola Trademark Beverages for the year, including financial plans
showing that the Company and all of its bottler affiliates have the consolidated
financial capacity to perform their duties and obligations to The Coca-Cola
Company. The Coca-Cola Company may not unreasonably withhold approval of such
plans. If the Company carries out its plans in all material respects, it will be
deemed to have satisfied its obligations to develop, stimulate, and satisfy
fully the demand for the Coca-Cola Trademark Beverages and to maintain the
requisite financial capacity. Failure to carry out such plans in all material
respects would constitute an event of default that, if not cured or waived by
The Coca-Cola Company within 120 days of notice of the failure, would give The
Coca-Cola Company the right to terminate the Cola Bottle Contract. If the
Company at any time fails to carry out a plan in all material respects in any
geographic segment of its territory, and if such failure is not cured within six
months after notice of the failure, The Coca-Cola Company may reduce the
territory covered by that Cola Bottle Contract by eliminating the portion of the
territory in which such failure has occurred.
The Coca-Cola Company has no obligation under the Bottle Contracts to
participate with the Company in expenditures for advertising and marketing, but
it may, in its discretion, contribute to such expenditures and undertake
independent advertising and marketing activities, as well as cooperative
advertising and sales promotion programs, that would require the cooperation and
support of the Company. Although The Coca-Cola Company has advised the Company
that it intends to continue to provide various forms of marketing support in
1996 at a comparable level of support as that provided in 1995, it is not
obligated to do so under the Bottle Contracts.
If the Company acquires control, directly or indirectly, of any bottler of
Coca-Cola Trademark Beverages in the United States, or any party controlling a
bottler of Coca-Cola Trademark Beverages in the United States, the Company must
cause the acquired bottler to amend its bottle contract for the Coca-Cola
Trademark Beverages to conform to the terms of the Cola Bottle Contract
described above.
The Cola Bottle Contracts are perpetual, except for the contract covering
the U.S. Virgin Islands and the islands of Tortola and Grand Cayman; this
contract has a term of five years after which the Company may request an
additional five-year extension that can be granted at the sole discretion of The
Coca-Cola Company. All Cola Bottle Contracts are subject to termination by The
Coca-Cola Company in the event of default by the Company. Events of default with
respect to each Cola Bottle Contract include: (i) production or sale of any cola
product not authorized by The Coca-Cola Company; (ii) insolvency, bankruptcy,
dissolution, receivership, or the like; (iii) any disposition by the Company of
any voting securities of any bottling company without the consent of The
Coca-Cola Company; and (iv) any material breach of any obligation of the Company
under the Cola Bottle Contract that remains uncured for 120 days after notice by
The Coca-Cola Company. If any Cola Bottle Contract is terminated, The Coca-Cola
Company has the right to terminate all other Cola Bottle Contracts held by the
bottler which is a party to the terminated contract, as well as the Cola Bottle
Contracts of any other entity which such bottler controls.
In addition, each Cola Bottle Contract held by the Company provides that
The Coca-Cola Company has the right to terminate that Cola Bottle Contract if a
person or affiliated group (with specified exceptions) acquires or obtains any
contract, option, conversion privilege, or other right to
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acquire, directly or indirectly, beneficial ownership of more than 10% of any
class or series of voting securities of the Company; however, The Coca-Cola
Company has agreed with the Company that this provision will not apply with
respect to the ownership of any class or series of voting securities of the
Company, although it would apply to the voting securities of each bottling
company subsidiary.
The provisions of the Cola Bottle Contracts of the Company which make it an
event of default to dispose of any Cola Bottle Contract or voting securities of
any bottling company subsidiary without the consent of The Coca-Cola Company and
which prohibit the assignment or transfer of the Cola Bottle Contracts are
designed to preclude any person not acceptable to The Coca-Cola Company from
obtaining an assignment of a Cola Bottle Contract or from acquiring any voting
securities of the Company's bottling subsidiaries. These provisions will prevent
the Company from selling or transferring any of its interest in any bottling
operations without the consent of The Coca-Cola Company. These provisions may
also make it impossible for the Company to benefit from certain transactions,
such as mergers or acquisitions, involving any of the bottling operations that
might be beneficial to the Company and its share owners but which are not
acceptable to The Coca-Cola Company.
Supplementary Agreement
In addition to the Cola Bottle Contracts with The Coca-Cola Company
described above, the Company is a party to a supplementary agreement (the
"Supplementary Agreement") with The Coca-Cola Company regarding the exercise by
The Coca-Cola Company of its rights under the Bottle Contracts. Pursuant to the
Supplementary Agreement, The Coca-Cola Company has agreed to exercise good faith
and fair dealing under the Bottle Contracts; offer marketing support and
exercise its rights under the Bottle Contracts in a manner consistent with its
dealings with comparable bottlers; offer to the Company any material written
amendment to such Bottle Contracts which it offers to any other bottler; and,
subject to certain limitations, sell syrups and concentrates to the Company at
prices not greater than those charged to other bottlers which are parties to
agreements substantially similar to the Bottle Contracts. The Supplementary
Agreement provides for a term expiring on March 15, 1999 and may be terminated
by The Coca-Cola Company upon 30 days' notice in the event that The Coca-Cola
Company should cease to own more than 40% of the Company's outstanding common
stock.
The Allied Bottle Contracts
The Allied Bottle Contracts contain provisions that are similar to those of
the Cola Bottle Contracts with respect to pricing, authorized containers,
planning, quality control, transfer restrictions, and related matters, and grant
similar exclusive rights with respect to the distribution of beverages of The
Coca-Cola Company which are neither Coca-Cola Trademark Beverages nor, except
for Hi-C fruit drinks, noncarbonated beverages (the "Allied Beverages") for sale
in authorized containers in specified territories. Under the Allied Bottle
Contracts, the Company likewise has advertising, marketing, and promotional
obligations, but without restriction as to the marketing of competitive products
as long as there is no manufacturing or handling of other products that would
imitate, infringe upon, or cause confusion with, the products of The Coca-Cola
Company. The Coca-Cola Company has the right to discontinue any or all Allied
Beverages, and the Company has a right, but not an obligation, under each of the
Allied Bottle Contracts (except under the Allied Bottle Contracts for Hi-C fruit
drinks and carbonated Minute Maid beverages) to elect to market any new beverage
introduced by The Coca-Cola Company under the trademarks covered by the
respective Allied Bottle Contracts. The Allied Bottle Contracts each has a term
of ten years and is renewable by the bottler for an additional ten years at the
end of each term. The initial term for most of the Company's Allied Bottle
Contracts will expire in 1996 and subsequent years. The Company intends to renew
substantially all the Allied Bottle Contracts. The Allied Bottle Contracts are
subject to termination in the event of default by the Company. The Coca-Cola
Company may
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terminate an Allied Bottle Contract in the event of: (i) insolvency, bankruptcy,
dissolution, receivership, or the like; (ii) termination of the Cola Bottle
Contract of the Company by either party for any reason; or (iii) any material
breach of any obligation of the Company under the Allied Bottle Contract that
remains uncured for 120 days after notice by The Coca-Cola Company.
Noncarbonated Beverage Agreements
The Company purchases certain noncarbonated beverages such as isotonic,
tea, and fruit drinks in finished form from The Coca-Cola Company, or its
designees, pursuant to Marketing and Distribution Agreements ("Noncarbonated
Beverage Agreements"). The Noncarbonated Beverage Agreements have certain
significant differences from the Cola Bottle Contracts.
Each of the Noncarbonated Beverage Agreements has a term of ten years and
is renewable by the Company for an additional ten years at the end of each term.
The initial term for most of the Noncarbonated Beverage Agreements for Powerade
will expire in 2004. Unlike the Cola Bottle Contracts, which grant the Company
exclusivity in the distribution of the covered beverages in the territory, the
Noncarbonated Beverage Agreements permit The Coca-Cola Company to test market
noncarbonated beverage products in the territory, subject to the Company's right
of first refusal to do so, and to sell noncarbonated beverages to commissaries
for delivery to retail outlets in the territory where noncarbonated beverages
are consumed on-premise, such as restaurants. The Coca-Cola Company shall pay
the Company certain fees for lost volume, delivery, and taxes in the event of
such commissary sales.
The Coca-Cola Company, in its sole discretion, sets the pricing the Company
must pay for noncarbonated beverages but has agreed, under certain
circumstances, to give the Company the benefit of more favorable pricing if
offered to other Coca-Cola bottlers. Under the Noncarbonated Beverage Agreements
for Powerade the Company may not sell other isotonic beverages.
In general, except as set forth above, the Noncarbonated Beverage
Agreements contain provisions similar to those in the Bottle Contracts with
respect to pricing, planning, quality control, marketing, and promotional
obligations.
Post-Mix Marketing, Fountain Appointments, and Other Similar Arrangements
The Company has in the past sold and delivered the post-mix products of The
Coca-Cola Company pursuant to one-year post-mix distributorship appointments. In
1995, the Company sold and/or delivered such post-mix products in most of its
major markets. Under the terms of the appointments, the Company is authorized to
distribute such syrups to retailers for dispensing to consumers within the
United States. The appointments are terminable by either party without cause
upon ten days' written notice. Unlike the Bottle Contracts, there is no
exclusive territory, and the Company faces competition not only from sellers of
other post-mix syrups but from other sellers of post-mix syrups of The Coca-Cola
Company (including The Coca-Cola Company). Depending on the market, the Company
is involved in the sale, distribution, and marketing of post-mix syrups in
differing degrees. In some markets, the Company sells syrup on its own behalf,
but the primary responsibility for marketing lies with The Coca-Cola Company. In
other territories, the Company is responsible for marketing post-mix syrup to
certain segments of the market. See "Certain Relationships and Related
Transactions -- Agreements and Transactions with The Coca-Cola Company -- Agency
Billing and Delivery Arrangements" in the Company's 1996 Proxy Statement, which
information is incorporated by reference in Item 13 hereof.
Other Bottle Agreements
The bottle agreements between the Company and other licensors of beverage
products and syrups generally give those licensors the unilateral right to
change the prices for their products and syrups at any time in their sole
discretion. Some of these bottling agreements have limited terms of appointment
and, in most instances, prohibit the bottler from dealing in competitive
products. Those
8
<PAGE> 11
agreements contain restrictions generally similar in effect to those in the Cola
Bottle Contracts as to trade names, approved bottles, cans and labels, sale of
imitations, and cause for termination.
INTERNATIONAL BOTTLER'S AGREEMENT
CCB Nederland operates in the Netherlands under a Bottler's Agreement dated
December 14, 1992 (the "International Bottler's Agreement") with The Coca-Cola
Company; this agreement has certain significant differences from the domestic
Bottle Contracts.
The International Bottler's Agreement expires September 30, 1998, unless
terminated earlier as provided therein. If CCB Nederland has fully complied with
the agreement during the initial term, is "capable of the continued promotion,
development, and exploitation of the full potential of the business" and
requests an extension of the agreement, an additional ten-year term may be
granted at the sole discretion of The Coca-Cola Company. The Coca-Cola Company
is given the right to terminate the International Bottler's Agreement before the
expiration of the stated term upon the insolvency, bankruptcy, nationalization,
or similar condition of CCB Nederland or the occurrence of a default under the
International Bottler's Agreement which is not remedied within 60 days of notice
of the default being given by The Coca-Cola Company. The International Bottler's
Agreement may be terminated by either party in the event foreign exchange is
unavailable or local laws prevent performance.
CCB Nederland has the exclusive right within the Netherlands to sell the
beverages covered by the International Bottler's Agreement in refillable glass
and PET bottles. The covered beverages include the Coca-Cola Trademark and
Allied Beverages. The Coca-Cola Company has retained the rights to produce and
sell, or authorize third parties to produce and sell, the beverages in any other
manner or form, including cans, within the territory. CCB Nederland has been
granted a nonexclusive authorization to purchase finished product in cans from
The Coca-Cola Company or its designee and to distribute them within its
territory. This authorization is granted in connection with the International
Bottler's Agreement and expires on September 30, 1998, with a provision for an
extension of five years at the discretion of The Coca-Cola Company. The
Coca-Cola Company has granted CCB Nederland a nonexclusive authorization to
package and sell postmix and pre-mix beverages in the territory; this
authorization is terminable by either party with 90 days' prior notice.
CCB Nederland is prohibited from making sales of the beverages outside of
its territory, or to anyone intending to resell the beverages outside the
territory, without the consent of The Coca-Cola Company, except for sales
arising out of an order from a customer in another member state of the European
Union or for export to another such member state. The International Bottler's
Agreement contemplates that there may be instances in which large or special
buyers have operations transcending the boundaries of CCB Nederland's
territories, and in furtherance of this, CCB Nederland and The Coca-Cola Company
are cooperating in sales to such buyers.
The Company believes that the International Bottler's Agreement is
substantially similar to other agreements between The Coca-Cola Company and
European bottlers of Coca-Cola Trademark and Allied Beverages.
Similar to the Bottle Contracts under which the Company and its other
subsidiaries operate, the International Bottler's Agreement provides that the
sales of beverage base and other goods to CCB Nederland are at prices which are
set from time to time by The Coca-Cola Company. The Company expects that net
prices charged in 1996 by The Coca-Cola Company for syrup, concentrate, and
other goods will increase approximately 4% over 1995 prices.
The Coca-Cola Company has no commitment to provide marketing support under
the International Bottler's Agreement, but it has provided substantial marketing
support in the past and has advised CCB Nederland that it intends to continue
marketing support to CCB Nederland in 1996 at a similar level as provided in
1995.
9
<PAGE> 12
COMPETITION
The liquid nonalcoholic refreshment business is highly competitive.
Competition exists among all beverages, including soft drinks, sports drinks,
tea, juices, juice drinks, coffee, water, beer, wine and bottled waters.
Competitors in this business include bottlers and distributors of nationally
advertised and marketed products, regionally advertised and marketed products,
and chain store and private label beverages. The Company estimates that in 1995
the products of The Coca-Cola Company represented approximately 35% of total
food store carbonated soft drink sales in all domestic territories in which the
Company operates, and that those of PepsiCo, Inc. represented approximately 31%.
The Company also estimates that in each of its domestic territories, between 55%
and 75% of food store carbonated soft drink sales are accounted for by the
Company and its major competitor, which in most territories is the bottler of
the soft drink products of PepsiCo, Inc.
Brand recognition and pricing are significant factors affecting the
Company's competitive position, and the trademarks associated with its products
are the most favorable factor for the Company. Other competitive factors among
bottlers are marketing, distribution methods, service to the trade and the
management of sales promotion activities. Vending machine sales, packaging
changes and contracts with fountain customers are also competitive factors. The
introduction of new products has been another major competitive element in the
liquid nonalcoholic refreshment industry.
EMPLOYEES
At December 31, 1995, the Company had approximately 33,000 employees, about
850 of these located in the Netherlands. The acquisition of Ouachita Coca-Cola
in 1996 added approximately 850 additional employees. The Company is a party to
collective bargaining agreements covering approximately 24% of its employees.
These collective bargaining agreements expire at various dates through 2000. The
Company has no reason to believe that it will be unable to renegotiate any of
these agreements on satisfactory terms. Management of the Company believes that
the Company's relations with its employees are generally good.
GOVERNMENTAL REGULATION
Anti-litter measures have been enacted in California, Connecticut,
Delaware, Iowa, Massachusetts, Michigan, New York, Oregon, and the City of
Columbia, Missouri, where some of the Company bottlers operate, prohibiting the
sale of certain beverages, whether in refillable or nonrefillable containers,
unless a deposit is charged by the retailer for the container. The retailer or
redemption center refunds the deposit to the customer upon the return of the
container. The containers are then returned to the bottler, which, in most
jurisdictions, must pay the refund and, in certain others, must also pay a
handling fee. In the past, similar legislation has been proposed but not adopted
elsewhere, although the Company anticipates that additional states or local
jurisdictions may enact such laws.
Massachusetts requires the creation of a deposit transaction fund by
bottlers and the payment to the state of balances in that fund that exceed three
months of deposits received, net of deposits repaid to customers and interest
earned. A portion of the Massachusetts law was held unconstitutional by the
Massachusetts Supreme Judicial Court as it related to deposits escheated to the
state prior to the effective date of the law. A favorable settlement with the
state on the deposits escheated to the state prior to the effective date of the
law is anticipated in 1996. Michigan also has a statute, effective January 1,
1990, requiring bottlers to pay to the state unclaimed container deposits.
Excise taxes on sales of soft drinks have been in place in various states
for several years. The states in which the Company operates currently imposing
such taxes are Arkansas, Louisiana, North Carolina and Tennessee. In addition,
two local jurisdictions in which the Company operates, Baltimore City, Maryland
and Honolulu, Hawaii, have imposed a special tax on nonrefillable soft drink
containers. The Baltimore City container tax will be phased out over a period of
eigh-
10
<PAGE> 13
teen months, ending July 1, 1997. To the knowledge of management of the Company,
no similar legislation has been enacted in any other markets served by the
Company. Proposals have been introduced in certain states and localities that
would impose a special tax on beverages sold in nonrefillable containers as a
means of encouraging the use of refillable containers. Management of the Company
is unable to predict, however, whether such additional legislation will be
adopted.
The Company has taken actions to mitigate the adverse effects resulting
from legislation concerning deposits, restrictive packaging, and escheat of
unclaimed deposits which impose additional costs on the Company. The Company is
unable to quantify the impact on current and future operations which may result
from such legislation if enacted in the future, but any such legislation could
be significant if widely enacted.
The domestic production, distribution, and sale of many of the Company's
products are subject to the Federal Food, Drug, and Cosmetic Act; the
Occupational Safety and Health Act; the Lanham Act; various federal, state, and
local environmental statutes and regulations; and various other federal, state,
and local statutes regulating the production, packaging, sale, safety,
advertising, labeling, and ingredients of such products.
A California law requires that any person who exposes another to a
carcinogen or a reproductive toxicant must provide a warning to that effect.
Because the law does not define quantitative thresholds below which a warning is
not required, virtually all manufacturers of food products are confronted with
the possibility of having to provide warnings due to the presence of trace
amounts of defined substances. Regulations implementing the law exempt
manufacturers from providing the required warning if it can be demonstrated that
the defined substances occur naturally in the product or are present in
municipal water used to manufacture the product. The Company has assessed the
impact of the law and its implementing regulations on the Company's soft drink
and other products and has concluded that none of the Company's products
currently requires a warning under the law. The Company cannot predict whether
or to what extent food industry efforts to minimize the law's impact on food
products will succeed, neither can the Company predict what impact, either in
terms of direct costs or diminished sales, imposition of the law may have.
Substantially all of the facilities of the Company are subject to federal,
state, and local provisions regulating above-ground and underground fuel storage
tanks and the discharge of materials into the environment. Compliance with these
provisions has not had, and the Company does not expect such compliance to have,
any material effect upon the capital expenditures, net income, financial
condition, or competitive position of the Company. The Company's beverage
manufacturing operations do not use or generate a significant amount of toxic or
hazardous substances. Management believes that its current practices and
procedures for the control and disposition of such wastes comply with applicable
federal and state requirements. The Company has been named as a potentially
responsible party ("PRP") in connection with certain landfill sites where the
Company may have been a de minimis contributor. Under current law, the Company's
liability for cleanup costs may be joint and several with other users of such
sites, regardless of the extent of the Company's use in relation to other users.
However, in the opinion of management of the Company, the potential liability of
the Company in connection with such activity is not significant and will not
have a material adverse effect on the financial condition or results of
operations of the Company.
Several underground fuel storage tanks used by the Company may be found to
be in noncompliance with applicable federal and state requirements for the
continued maintenance and use of such tanks. The Company has adopted a plan for
the testing, removal, replacement, and repair, if necessary, of underground fuel
storage tanks at Company bottlers and remediation of their sites, if necessary
and, to a lesser extent, the abatement of the discharge of pollutants, upgrading
water treatment facilities, and remediating friable asbestos, at various Company
facilities. The Company spent approximately $8 million pursuant to such plan in
1992, $9 million in 1993, $12 million in 1994, and $6 million in 1995. The
Company estimates it will spend approximately
11
<PAGE> 14
$5 million in 1996 and $6 million in 1997 pursuant to this plan. In the opinion
of management of the Company, any liabilities associated with the items covered
by such plan will not have a material adverse effect on the financial condition
or results of operations of the Company.
The business of the Company, as the exclusive manufacturer and distributor
of bottled and canned beverage products of The Coca-Cola Company and other
manufacturers within specified geographic territories, is subject to federal and
state antitrust laws of general applicability. Under the federal Soft Drink
Interbrand Competition Act, the exercise and enforcement of an exclusive
contractual right to manufacture, distribute, and sell a soft drink product in a
geographic territory is presumptively lawful if the soft drink product is in
substantial and effective interbrand competition with other products of the same
class in the market. Management of the Company believes that there is such
substantial and effective competition in each of the exclusive geographic
territories in which the Company operates.
ITEM 2. PROPERTIES
The principal properties of the Company include the executive offices,
production facilities, distribution facilities, administrative offices, and
service centers. At the end of 1995, the Company operated 44 beverage production
facilities, 16 of which are solely production facilities and 28 of which are
combination production/distribution facilities, and also operated 223 principal
distribution facilities. The Company owns 43 of its production facilities, 192
of its principal distribution facilities, and leases the others. In the
aggregate, the Company's owned and leased facilities covered approximately 22
million square feet. The acquisition of Ouachita Coca-Cola in 1996 added one
leased combination production/distribution facility and eight distribution
facilities owned by Ouachita Coca-Cola. These facilities cover approximately
800,000 square feet. Management of the Company believes that its production and
distribution facilities are generally sufficient to meet present operating
needs.
Twelve of the facilities owned by the Company are subject to liens to
secure indebtedness in an aggregate principal amount of approximately $7.7
million at December 31, 1995. Excluding expenditures for bottler acquisitions,
the Company's capital expenditures in 1995 were approximately $501 million.
At the end of 1995, the Company owned and operated approximately 27,000
vehicles of all types used in the sale, production, and distribution of its
products and approximately 1,030,000 coolers, beverage dispensers, and vending
machines. The acquisition of Ouachita Coca-Cola added approximately 800 vehicles
and 42,000 coolers and vending machines.
ITEM 3. LEGAL PROCEEDINGS
On January 10, 1996, the Delaware Court of Chancery approved the settlement
of the derivative suit filed in 1991 by Three Bridges Investment Group against
The Coca-Cola Company, Johnston Coca-Cola and the directors of the Company then
in office, relating to the acquisition of Johnston Coca-Cola by the Company.
Under the terms of the settlement, (i) an amount of attorneys' fees was awarded
to plaintiffs' counsel; (ii) the Company agreed that, for five years after the
date the settlement became final, any proposed merger or consolidation with,
purchase of an equity interest in, for a consideration of $10 million or more,
or other acquisition of an entity or other ownership interest from, The
Coca-Cola Company or any company in which The Coca-Cola Company has a 20% or
greater equity or other ownership interest, must be approved by a committee of
three independent directors of the Company; and (iii) the Company agreed to
continue its share repurchase program through at least April 1996.
The Company and several of its bottling subsidiaries or divisions have been
named as PRPs at several federal "Superfund" sites. In 1992, the Florida
Coca-Cola Bottling Company ("Florida CCBC") was named by the Environmental
Protection Agency ("EPA") as a PRP at the Peak Oil site in Tampa, Florida,
formerly the location of a refiner of used motor oil. Following an internal
12
<PAGE> 15
investigation and lengthy negotiations with the PRP Group's Allocation Task
Force, Florida CCBC agreed to accept liability for 32,141 gallons of used oil,
representing approximately 1.6% of the total amount (approximately two million
gallons) sent by all identified PRPs. Although the total remediation costs are
not yet known, it is estimated that Florida CCBC's ultimate liability could
reach $300,000. In 1992, a PRP at the South 8th Street landfill (a/k/a West
Memphis landfill) site in West Memphis, Arkansas brought The Coca-Cola Bottling
Company of Memphis, Tenn. ("CCBC Memphis") into the remediation proceedings as
an additional PRP with respect to that site, which is alleged to have been used
in the 1950s and 1960s as a dump site for the byproducts from the reprocessing
of used motor oil. The EPA is still investigating the site and has not issued an
estimate for the cost of remediation, although the PRP naming CCBC Memphis has
estimated the total cost to be as much as $45 million. In May 1995, CCBC Memphis
received and responded to a Request for Information from the EPA. Following its
initial investigation of this matter, CCBC Memphis determined that some of its
waste oil may have been taken to the South 8th Street landfill. Thus, CCBC
Memphis has joined the PRP group. However, neither the specific volume of waste
oil that may have been generated by CCBC Memphis nor CCBC Memphis' percentage of
the whole relative to other PRPs have yet been determined; accordingly CCBC
Memphis does not yet know whether its liability, if any, would be material. In
November 1994, the EPA notified the Coca-Cola Bottling Company of Northeast
Arkansas ("CCBC NEARK"), a bottler acquired by the Company in December 1993,
that it was also considered to be a PRP with respect to the South 8th Street
landfill site. It is believed that CCBC NEARK had no connection with this site,
and in any event the Company has the right of indemnification against the former
owners of CCBC NEARK. In April 1994, the Company was notified by a PRP group at
the Waste Disposal Engineering site in Andover, Minnesota, that one of its
predecessor companies, Midwest Coca-Cola Bottling Company ("Midwest CCBC") could
be a PRP at such site, a former landfill. The claim against the Company is
approximately $100,000; however, if this site is a "qualified landfill" under
Minnesota law, the entire cost of remediation may be paid by the state without
contribution from any PRP. In November 1994, Florida CCBC received notice from a
PRP group at the Petroleum Products Corporation site in Pembroke Park, Florida,
that it could be a PRP at such site, the former location of a used oil recycling
facility. Total cleanup for the site is believed to be as much as $40 million.
Following its initial investigation of this matter, Florida CCBC determined that
some of its waste oil may have been taken to the Petroleum Products Corporation
site. Thus, Florida CCBC has joined the PRP group. However, neither the specific
volume of waste oil that may have been generated by Florida CCBC nor Florida
CCBC's percentage of the whole relative to other PRPs have yet been determined;
accordingly, Florida CCBC does not yet know whether its liability, if any, would
be material. The Company or its bottling subsidiaries have been named PRPs at
sixteen other federal and five state "Superfund" sites where management of the
Company has concluded either (i) that the Company will have no further liability
because there was no responsibility for having deposited hazardous waste; (ii)
that payments made to date would be sufficient to satisfy all liability; or
(iii) that the Company's ultimate liability, if any, for such site would be less
than $100,000.
There are various other lawsuits and claims pending against the Company.
Included among such litigation are claims for injury to persons or property.
Management of the Company believes that such claims are covered by insurance
with financially responsible carriers or adequate provisions for losses have
been recognized by the Company in its consolidated financial statements. In the
opinion of management of the Company, the losses that might result from such
litigation will not have a material adverse effect on the financial condition or
results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
13
<PAGE> 16
ITEM 4(A). EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is information as of March 1, 1996 regarding the executive
officers of the Company:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
NAME AGE THE PAST FIVE YEARS
- --------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Summerfield K. Johnston, Jr. .... 63 Mr. Johnston has been the Vice Chairman of the Board
and Chief Executive Officer of the Company since
December 1991. From 1979 to December 1991, he served
as Chairman of the Board and Chief Executive Officer
of Johnston Coca-Cola and served as President of
Johnston Coca-Cola prior to that time.
Henry A. Schimberg............... 62 Mr. Schimberg has been the President, Chief Operating
Officer, and a director of the Company since December
1991. From 1984 to December 1991, he served as
President and Chief Operating Officer of Johnston
Coca-Cola.
John R. Alm...................... 50 Mr. Alm has been Senior Vice President and Chief
Financial Officer of the Company since December 1991.
From 1985 to December 1991, he served as Senior Vice
President--Finance and Administration of Johnston
Coca-Cola.
Norman P. Findley III............ 51 Mr. Findley has been Senior Vice President of the
Company since December 1995. He was Vice President,
Domestic and International Marketing from July 1993
to December 1995. From 1989 to July 1993, he served
as Vice President, Marketing of the Company. From
1987 to 1989, he served as Vice President and Account
Manager of the Coca-Cola USA division of The
Coca-Cola Company.
Robert F. Gray................... 48 Mr. Gray has been Vice President, Information Systems
of the Company since February 1992. Mr. Gray was a
partner with KPMG Peat Marwick (accounting firm) from
1984 to 1992.
John C. Heinrich................. 54 Mr. Heinrich has been Vice President, Operations of
the Company since February 1992. He was the Vice
President for Operations of Johnston Coca-Cola from
1988 to 1991, and served as Vice President,
Operations from 1985 to 1988 of the Central States
Coca-Cola Bottling Company division of Johnston
Coca-Cola.
Summerfield K. Johnston III...... 42 Mr. Johnston has been Senior Vice President of the
Company since December 1995. He was Vice President,
Regional Operations from July 1993 to December 1995.
He was Vice President and General Manager, West
Central Region from December 1992 to July 1993. He
served as Vice President, Human Resources of the
Company from February 1992 to December 1992 and from
1987 to 1991, Mr. Johnston served as Executive Vice
President and General Manager of the Midwest
Coca-Cola Bottling Company division of Johnston
Coca-Cola.
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
NAME AGE THE PAST FIVE YEARS
- --------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Jarratt H. Jones................. 42 Mr. Jones has been Vice President, Human Resources of
the Company since October 1993. He was a General
Manager for International Business Machines
Corporation from 1989 to 1993.
Lowry F. Kline................... 55 Mr. Kline has been Senior Vice President of the
Company since February 1996 and General Counsel of
the Company since December 1991. He was a partner in
the law firm of Miller & Martin, Chattanooga,
Tennessee, from 1970 until his resignation from that
firm in 1996 to become a full-time employee of the
Company.
Vicki G. Roman................... 42 Ms. Roman has been Vice President and Treasurer of
the Company since December 1993. She was Treasurer of
the Company from February 1992 to December 1993 and
was an Assistant Treasurer of the Company from 1986
to February 1992.
Philip H. Sanford................ 42 Mr. Sanford has been Senior Vice President of the
Company since December 1995. He was Vice President,
Finance and Administration from February 1993 to
December 1995, and was Vice President and Executive
Assistant to the Chief Executive Officer from
February 1992 to February 1993. From 1985 to 1991, he
served as Senior Vice President and Treasurer of
Johnston Coca-Cola.
Gary P. Schroeder................ 50 Mr. Schroeder has been Vice President, Regional
Operations of the Company since December 1994. He was
Regional Vice President, General Manager of the
Southwest Region from January 1992 to December 1994
and served as Division General Manager of the
Cincinnati Division of Johnston Coca-Cola from 1988
to 1992.
G. David Van Houten, Jr.......... 46 Mr. Van Houten has been Senior Vice President of the
Company since December 1995. He was Vice President,
Regional Operations of the Company from July 1993 to
December 1995 and he was Regional Vice President and
General Manager, Texas Region from 1992 to 1993. He
served as Area Vice President, Texas Area from 1989
to 1991.
Bernice H. Winter................ 47 Ms. Winter has been Vice President and Controller of
the Company since December 1993 and principal
accounting officer since April 1994. She was Vice
President, European Community Group of Coca-Cola
International from 1991 to December 1993 and was
President of the Coca-Cola Financial Corporation from
1988 to 1991.
</TABLE>
Summerfield K. Johnston, Jr. is the father of Summerfield K. Johnston III.
The officers of the Company are elected annually by the Board of Directors
for terms of one year or until their successors are elected and qualified,
subject to removal by the Board of Directors at any time.
15
<PAGE> 18
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
LISTED AND TRADED: New York Stock Exchange
TRADED: Boston, Cincinnati, Chicago,
Pacific, and Philadelphia Exchanges
Share owners of common stock of record as of February 26, 1996: 8,877
STOCK PRICES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
1995 HIGH LOW
- -----------------------------------------------------------------------------------------------
Fourth Quarter 29 7/8 24 1/8
Third Quarter 25 1/2 20 5/8
Second Quarter 23 1/4 20 1/8
First Quarter 21 3/4 17 3/4
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
1994 HIGH LOW
- -----------------------------------------------------------------------------------------------
Fourth Quarter 19 1/2 16 3/8
Third Quarter 18 3/8 16
Second Quarter 18 7/8 15 1/2
First Quarter 19 1/4 14
</TABLE>
DIVIDENDS
Quarterly dividends in the amount of $0.0125 per share were paid during the
fiscal years 1994 and 1995. In February 1996, the Company's Board of Directors
increased the quarterly dividend to $0.025 per share, effective for the
quarterly dividend payable April 1, 1996.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial Data" for the years 1986 through 1995, on pages 46 and
47 of the Company's Annual Report to Share Owners for the year ended December
31, 1995, is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
"Management's Financial Review" on pages 18 through 29 of the Company's
Annual Report to Share Owners for the year ended December 31, 1995, is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of the Registrant and its
subsidiaries are incorporated herein by reference to the Company's Annual Report
to Share Owners for the year ended December 31, 1995, at the pages indicated:
Consolidated Statements of Operations -- Years ended December 31, 1995,
1994 and 1993 (page 21)
Consolidated Statements of Cash Flows -- Years ended December 31, 1995,
1994 and 1993 (page 23)
Consolidated Balance Sheets -- December 31, 1995 and 1994 (page 25)
16
<PAGE> 19
Consolidated Statements of Share-Owners' Equity -- Years ended December
31, 1995, 1994 and 1993 (page 26)
Notes to Consolidated Financial Statements (pages 30-43)
Report of Independent Auditors (page 45)
"Quarterly Financial Data," on page 43 of the Company's Annual Report to
Share Owners for the years ended December 31, 1995 and 1994, is also
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the directors of the Company is set forth under the
captions "Election of Directors -- Nominees" and "Election of
Directors -- Information Concerning Directors" on page 4 and on pages 4 through
7, respectively, of the Company's 1996 Proxy Statement. Such information is
incorporated herein by reference. Pursuant to Instruction 3 of Item 401(b) of
Regulation S-K and General Instruction G(3) of Form 10-K, information relating
to the executive officers of the Company is set forth at Item 4(A) of this
report under the caption "Executive Officers of the Company." Information
regarding compliance with the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934, as amended, by the Company's executive officers
and directors, persons who own more than ten percent of the Company's common
stock and their affiliates who are required to comply with such reporting
requirements is set forth in "Election of Directors -- Compliance with Section
16(a) of the Securities Exchange Act of 1934" on page 12 of the Company's 1996
Proxy Statement. Such information is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to executive compensation is set forth under the
captions "Election of Directors -- Compensation of Directors" and "Executive
Compensation" on page 9 and pages 13 through 22, respectively, of the Company's
1996 Proxy Statement. Such information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding ownership of the Company's common stock by certain
persons is set forth under the captions "Voting -- Principal Share Owners" and
"Election of Directors--Security Ownership of Directors and Officers" on page 3
and pages 9 through 12, respectively, of the Company's 1996 Proxy Statement.
Such information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain transactions between the Company, The
Coca-Cola Company and their affiliates and certain other persons is set forth
under the caption "Certain Relationships and Related Transactions" on pages 22
through 26 of the 1996 Proxy Statement. Such information is incorporated herein
by reference.
17
<PAGE> 20
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(A) (1) Financial Statements. The following consolidated financial statements
of the Company and subsidiaries, included in the Company's Annual Report to
Share Owners for the year ended December 31, 1995, are incorporated by reference
in Part II, Item 8 of this report:
Consolidated Statements of Operations -- Years ended December 31, 1995,
1994 and 1993.
Consolidated Statements of Cash Flows -- Years ended December 31, 1995,
1994 and 1993.
Consolidated Balance Sheets -- December 31, 1995 and 1994.
Consolidated Statements of Share-Owners' Equity -- Years ended December 31,
1995, 1994 and 1993.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
(2) Financial Statement Schedules. The following financial statement
schedule of the Company and its subsidiaries is included in this report on the
page indicated:
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors................................................ F-2
Schedule II -- Valuation and Qualifying Accounts for the fiscal years ended
December 31, 1995, 1994 and 1993............................... F-3
</TABLE>
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission have been
omitted either because they are not required under the related instructions or
because they are inapplicable.
(3) Exhibits.
<TABLE>
<CAPTION>
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
EXHIBIT REPORTS ARE FILED WITH THE SECURITIES AND
NUMBER DESCRIPTION EXCHANGE COMMISSION UNDER FILE NO. 01-09300)
- ------ ---------------------------------------- ----------------------------------------------
<C> <C> <S> <C>
3.1 -- Restated Certificate of Incorporation of Exhibit 28.2 to the Company's Quarterly
Coca-Cola Enterprises, as amended on Report on Form 10-Q as filed May 11,
April 15, 1992. 1992.
3.2 -- Bylaws of Coca-Cola Enterprises, as Filed herewith.
amended through February 20, 1996.
</TABLE>
18
<PAGE> 21
<TABLE>
<CAPTION>
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
EXHIBIT REPORTS ARE FILED WITH THE SECURITIES AND
NUMBER DESCRIPTION EXCHANGE COMMISSION UNDER FILE NO. 01-09300)
- ------ ---------------------------------------- ----------------------------------------------
<C> <C> <S> <C>
4.1 -- Indenture dated as of July 30, 1991, Exhibit 4.1 to the Company's Current
together with the First Supplemental Report on Form 8-K (Date of Report: July
Indenture thereto dated January 29, 30, 1991); Exhibit 4.01 to the Company's
1992, between Coca-Cola Enterprises and Current Report on Form 8-K (Date of
Manufacturers Hanover Trust Company, as Report: January 29, 1992); Exhibit 4.02
Trustee, with regard to certain to the Company's Current Report on Form
unsecured and unfunded debt securities 8-K (Date of Report: January 29, 1992);
of Coca-Cola Enterprises, and forms of Exhibit 4.01 to the Company's Current
notes and debentures issued thereunder. Report on Form 8-K (Date of Report:
September 8, 1992); Exhibits 4.01 and
4.02 to the Company's Current Report on
Form 8-K (Date of Report: November 12,
1992); Exhibit 4.01 to the Company's
Current Report on Form 8-K (Date of
Report: January 4, 1993); Exhibit 4.02
to the Company's Current Report on Form
8-K (Date of Report: September 15,
1993); Exhibit 4.01 to the Company's
Current Report on Form 8-K (Date of
Report: May 12, 1995).
4.2 -- Medium-Term Notes Issuing and Paying Exhibit 4.2 to the Company's Annual
Agency Agreement dated as of October 24, Report on Form 10-K for the fiscal year
1994, between Coca-Cola Enterprises and ended December 31, 1994.
Chemical Bank, as issuing and paying
agent, including as Exhibit B thereto
the form of Medium-Term Note issuable
thereunder.
4.3 -- Indenture dated as of November 15, 1989 Exhibit 4.01 to the Company's Current
between Coca-Cola Enterprises and Report on Form 8-K (Date of Report:
Bankers Trust Company, as Trustee, with December 12, 1989); Exhibit 4.4(a) to
regard to certain unsecured and the Company's Annual Report on Form 10-K
unsubordinated debt securities of for the fiscal year ended December 29,
Coca-Cola Enterprises, and forms of 1989; Exhibit 4.4(b) to the Company's
Fixed Rate Medium Term Note and Floating Annual Report on Form 10-K for the
Rate Medium Term Note, each issuable fiscal year ended December 29, 1989.
commencing December 18, 1989 pursuant to
the above-referenced Indenture.
4.4 -- Credit Agreement dated as of December 7, Exhibit 4.4 to the Company's Annual
1994 among Coca-Cola Enterprises; Bank Report on Form 10-K for the fiscal year
of America National Trust and Savings ended December 31, 1994.
Association; Citibank, N.A.; The First
National Bank of Chicago; NationsBank of
Texas, National Association; Union Bank
of Switzerland, New York Branch; Texas
Commerce Bank National Association;
Trust Company Bank; Wachovia Bank of
Georgia, N.A.; Canadian Imperial Bank of
Commerce; Toronto Dominion (Texas),
Inc.; Swiss Bank Corporation, New York
Branch and Cayman Islands Branch; Mellon
Bank, N.A.; The Northern Trust Company;
ABN AMRO Bank, N.V., Atlanta Agency.
</TABLE>
19
<PAGE> 22
<TABLE>
<CAPTION>
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
EXHIBIT REPORTS ARE FILED WITH THE SECURITIES AND
NUMBER DESCRIPTION EXCHANGE COMMISSION UNDER FILE NO. 01-09300)
- ------ ---------------------------------------- ---------------------------------------------
<C> <C> <S> <C>
Certain instruments which define the rights of holders of long-term debt of the
Company and its subsidiaries are not being filed because the total amount of
securities authorized under each such instrument does not exceed 10% of the total
consolidated assets of the Company and its subsidiaries. The Company and its
subsidiaries hereby agree to furnish a copy of each such instrument to the
Commission upon request.
10.1 -- 1986 Stock Option Plan of Coca-Cola Exhibit 10.1 to the Company's Annual
Enterprises, as amended through February Report on Form 10-K for the fiscal year
12, 1991.* ended December 31, 1991.
10.2 -- Form of Stock Option Agreement between Exhibit 10.5 to the Company's
Coca-Cola Enterprises and certain of its Registration Statement on Form S-1, No.
officers.* 33-9447.
10.3 -- Coca-Cola Enterprises 1991 Stock Option Exhibit 10.11 to the Company's Annual
Plan, as amended and restated through Report on Form 10-K for the fiscal year
February 18, 1992.* ended December 31, 1992.
10.4 -- Coca-Cola Enterprises 1994 Stock Option Exhibit 4.3 to the Company's
Plan.* Registration Statement on Form S-8, No.
33-53221.
10.5 -- Coca-Cola Enterprises 1995 Stock Option Exhibit 4.3 to the Company's
Plan.* Registration Statement on Form S-8, No.
33-58699.
10.6 -- Coca-Cola Enterprises 1992 Restricted Exhibit 4.3 to the Company's
Stock Award Plan (as amended and Registration Statement on Form S-8, No.
restated effective February 7, 1994).* 33-53219.
10.7 -- Coca-Cola Enterprises 1995 Restricted Exhibit 4.3 to the Company's
Stock Award Plan.* Registration Statement on Form S-8, No.
33-58695.
10.8 -- Coca-Cola Enterprises Restricted Stock Filed herewith.
Award Tax Withholding Agreement.*
10.9 -- 1995 Phantom Stock Award Plan.* Filed herewith.
10.10 -- 1992 and 1993 Long-Term Incentive Plan Exhibit 10.6 to the Company's Annual
of Coca-Cola Enterprises, as amended.* Report on Form 10-K for the fiscal year
ended December 31, 1994.
10.11 -- Coca-Cola Enterprises 1994-1996 Long- Exhibit 10.7 to the Company's Annual
Term Incentive Plan.* Report on Form 10-K for the fiscal year
ended December 31, 1994.
10.12 -- Coca-Cola Enterprises Inc. Long-Term Filed herewith.
Incentive Plan (Effective January 1,
1995).*
10.13 -- Coca-Cola Enterprises 1994 Executive Exhibit 10.8 to the Company's Annual
Management Incentive Plan (Effective Report on Form 10-K for the fiscal year
January 1, 1994).* ended December 31, 1994.
10.14 -- Coca-Cola Enterprises 1995 Executive Filed herewith.
Management Incentive Plan (Effective
January 1, 1995).*
10.15 -- 1991 Amendment and Restatement of the Exhibit 10.9 to the Company's Annual
Coca-Cola Enterprises Supplemental Report on Form 10-K for the fiscal year
Retirement Plan, as amended effective ended December 31, 1994.
July 1, 1993.*
10.16 -- Form of Stock Option Agreements between Exhibit 10.36 to the Company's
Coca-Cola Enterprises and certain of its Registration Statement on Form S-1, No.
directors.* 33-9447.
10.17 -- Coca-Cola Enterprises 1988 Stock Exhibit 10.10 to the Company's Annual
Appreciation Rights Plan, as amended Report on Form 10-K for the fiscal year
through February 12, 1991.* ended December 31, 1991.
</TABLE>
20
<PAGE> 23
<TABLE>
<CAPTION>
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
EXHIBIT REPORTS ARE FILED WITH THE SECURITIES AND
NUMBER DESCRIPTION EXCHANGE COMMISSION UNDER FILE NO. 01-09300)
- ------ ---------------------------------------- ------------------------------------------------
<C> <C> <S> <C>
10.18 -- Amended and Restated Deferred Exhibit 10.16 to the Company's Annual
Compensation Agreement between Johnston Report on Form 10-K for the fiscal year
Coca-Cola Bottling Group and Henry A. ended December 31, 1993.
Schimberg dated December 16, 1991, as
amended.*
10.19 -- 1993 Amendment and Restatement of Exhibit 10.17 to the Company's Annual
Deferred Compensation Agreement between Report on Form 10-K for the fiscal year
Johnston Coca-Cola Bottling Group and ended December 31, 1993.
John R. Alm as of April 30, 1993.*
10.20 -- Retirement Plan for the Board of Exhibit 10.33 to the Company's Annual
Directors of Coca-Cola Enterprises, Report on Form 10-K for the fiscal year
effective April 11, 1991.* ended December 31, 1991.
10.21 -- Deferred Compensation Plan for Non- Exhibit 10.16 to the Company's Annual
Employee Director Compensation, as Report on Form 10-K for the fiscal year
amended and restated effective April 1, ended December 31, 1994.
1994.*
10.22 -- Tax Sharing Agreement dated November 12, Exhibit 10.1 to the Company's
1986 between Coca-Cola Enterprises and Registration Statement on Form S-1, No.
The Coca-Cola Company. 33-9447.
10.23 -- Registration Rights Agreement dated Exhibit 10.3 to the Company's
November 12, 1986 between Coca-Cola Registration Statement on Form S-1, No.
Enterprises and The Coca-Cola Company. 33-9447.
10.24 -- Registration Rights Agreement dated as Exhibit 10 to the Company's Current
of December 17, 1991 among Coca-Cola Report on Form 8-K (Date of Report:
Enterprises, The Coca-Cola Company and December 18, 1991).
the share owners of Johnston Coca-Cola
Bottling Group named therein.
10.25 -- Registration Rights Agreement dated as Exhibit 10.25 to the Company's Annual
of December 15, 1993 among Coca-Cola Report on Form 10-K for the fiscal year
Enterprises, The Coca-Cola Company and ended December 31, 1993.
the share owners of the Coca-Cola
Bottling Company of Northeast Arkansas,
Inc.
10.26 -- Form of Bottle Contract, as amended. Exhibit 10.24 to the Company's Annual
Report on Form 10-K for the fiscal year
ended December 30, 1988.
10.27 -- Letter Agreement dated March 15, 1989 Exhibit 10.23 to the Company's Annual
between Coca-Cola Enterprises and The Report on Form 10-K for the fiscal year
Coca-Cola Company with respect to the ended December 31, 1991.
Bottle Contracts, as amended by letter
agreement dated December 18, 1991.
10.28 -- Form of Tolling Agreement between The Exhibit 10.41 to the Company's Annual
Coca-Cola Company and various Company Report on Form 10-K for the fiscal year
bottlers. ended January 2, 1987.
10.29 -- Sweetener Sales Agreement -- Bottler Exhibit 10.30 to the Company's Annual
between The Coca-Cola Company and Report on Form 10-K for the fiscal year
various Company bottlers. ended December 31, 1992.
</TABLE>
21
<PAGE> 24
<TABLE>
<CAPTION>
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
EXHIBIT REPORTS ARE FILED WITH THE SECURITIES AND
NUMBER DESCRIPTION EXCHANGE COMMISSION UNDER FILE NO. 01-09300)
- ------ ---------------------------------------- ----------------------------------------------
<C> <C> <S> <C>
10.30 -- Can Supply Agreement, dated November 30, Filed herewith.
1995, between American National Can
Company and Coca-Cola Enterprises.
10.31 -- Share Repurchase Agreement dated January Exhibit 10.44 to the Company's Annual
1, 1991 between The Coca-Cola Company Report on Form 10-K for the fiscal year
and Coca-Cola Enterprises. ended December 28, 1990.
11 -- Statement re computation of per share Filed herewith.
earnings.
12 -- Statement re computation of ratios. Filed herewith.
13 -- 1995 Annual Report to Share Owners Filed herewith.
(Pages 18-43, 45-47).
21 -- Subsidiaries of the Registrant. Filed herewith.
23 -- Consent of Independent Auditors. Filed herewith.
24 -- Powers of Attorney. Filed herewith.
27 -- Financial Data Schedule (for SEC use only). Filed herewith.
</TABLE>
- ---------------
* Management contracts and compensatory plans as arrangements required to be
filed as an exhibit to this form pursuant to Item 14(c).
(B) REPORTS ON FORM 8-K.
During the fourth quarter of 1995, the Company filed the following
current reports on Form 8-K:
<TABLE>
<CAPTION>
DATE OF REPORT DESCRIPTION
- ---------------------------- -------------------------------------------------------
<S> <C>
October 17, 1995............ Reporting financial results for third quarter and first
nine months of 1995.
November 28, 1995........... Filing opinion of counsel in connection with offering
of Medium-Term Notes.
December 12, 1995........... Announcing discussions with The Coca-Cola Company
regarding acquisition of bottling and canning
operations in France and Belgium.
December 19, 1995........... Announcing changes in share repurchase program and
increase in certain noncash expenses.
</TABLE>
(C) EXHIBITS
See Item 14(a)(3) above.
(D) FINANCIAL STATEMENT SCHEDULES
See Item 14(a)(2) above.
22
<PAGE> 25
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
COCA-COLA ENTERPRISES INC.
(Registrant)
By: /s/ S. K. JOHNSTON, JR.
------------------------------------
S. K. Johnston, Jr.
Vice Chairman and Chief Executive
Officer
Date: March 5, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- ----------------
<C> <S> <C>
/s/ S. K. JOHNSTON, JR. Vice Chairman, Chief March 5, 1996
- --------------------------------------------- Executive
(S. K. Johnston, Jr.) Officer and a Director
(principal executive
officer)
/s/ JOHN R. ALM Senior Vice President and March 5, 1996
- --------------------------------------------- Chief Financial Officer
(John R. Alm) (principal financial
officer)
/s/ BERNICE H. WINTER Vice President and Controller March 5, 1996
- --------------------------------------------- (principal accounting
(Bernice H. Winter) officer)
* Chairman of the Board of March 5, 1996
- --------------------------------------------- Directors
(M. Douglas Ivester)
* President, Chief Operating March 5, 1996
- --------------------------------------------- Officer and a Director
(Henry A. Schimberg)
* Director March 5, 1996
- ---------------------------------------------
(Howard G. Buffett)
* Director March 5, 1996
- ---------------------------------------------
(John L. Clendenin)
* Director March 5, 1996
- ---------------------------------------------
(Johnnetta B. Cole)
* Director March 5, 1996
- ---------------------------------------------
(T. Marshall Hahn, Jr.)
</TABLE>
23
<PAGE> 26
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- ----------------
<C> <S> <C>
* Director March 5, 1996
- ---------------------------------------------
(Claus M. Halle)
* Director March 5, 1996
- ---------------------------------------------
(L. Phillip Humann)
* Director March 5, 1996
- ---------------------------------------------
(E. Neville Isdell)
* Director March 5, 1996
- ---------------------------------------------
(John E. Jacob)
* Director March 5, 1996
- ---------------------------------------------
(Robert A. Keller)
* Director March 5, 1996
- ---------------------------------------------
(Scott L. Probasco, Jr.)
* Director March 5, 1996
- ---------------------------------------------
(Francis A. Tarkenton)
*By: /s/ LOWRY F. KLINE
- ---------------------------------------------
Lowry F. Kline
Attorney-in-Fact
</TABLE>
24
<PAGE> 27
INDEX TO FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors........................................................ F-2
Schedule II -- Valuation and Qualifying Accounts for the fiscal years ended December
31, 1995, 1994 and 1993................................................ F-3
</TABLE>
F-1
<PAGE> 28
COCA-COLA ENTERPRISES INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors
Coca-Cola Enterprises Inc.
We have audited the consolidated financial statements of Coca-Cola
Enterprises Inc. listed in Part IV, Item 14 (a) (1). Our audits also included
the financial statement schedule listed in Part IV, Item 14 (a) (2). These
financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Coca-Cola Enterprises Inc. at December 31, 1995 and 1994, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1995, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
/s/ ERNST & YOUNG LLP
Atlanta, Georgia
January 22, 1996
F-2
<PAGE> 29
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
COCA-COLA ENTERPRISES INC.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
- ---------------------------------- ---------- ----------------------------- ------------ ---------
<S> <C> <C> <C> <C> <C>
ADDITIONS
-----------------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING COSTS AND OTHER ACCOUNTS-- DEDUCTIONS -- AT END OF
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE PERIOD
- ---------------------------------- ---------- ---------- ---------------- ------------ ---------
(IN MILLIONS)
FISCAL YEAR ENDED:
DECEMBER 31, 1995
Allowance for losses on trade
accounts...................... $ 34 $ 5 $ 3(a) $ 9(b) $ 33
Valuation allowance for deferred
tax assets.................... $112 $ 8 $ -- $ -- $ 120
DECEMBER 31, 1994
Allowance for losses on trade
accounts...................... $ 33 $ 11 $ -- $ 10(b) $ 34
Valuation allowance for deferred
tax assets.................... $105 $ 7 $ -- $ -- $ 112
DECEMBER 31, 1993
Allowance for losses on trade
accounts...................... $ 31 $ 13 $ 5(a) $ 16(b) $ 33
Valuation allowance for deferred
tax assets.................... $ 86 $ 19 $ -- $ -- $ 105
</TABLE>
- ---------------
(a) Principally represents recoveries of amounts previously charged off and, at
December 31, 1993, allowances for losses on trade accounts of acquired
companies at date of acquisition.
(b) Charge off of uncollectible accounts.
F-3
<PAGE> 30
(Printed on recycled paper LOGO)
<PAGE> 1
EXHIBIT 3.2
BY-LAWS
OF
COCA-COLA ENTERPRISES INC.
As amended through February 20, 1996
<PAGE> 2
COCA-COLA ENTERPRISES INC.
BY-LAWS
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I - SHAREHOLDERS
Section 1 Place, Date and Time of Holding
Annual Meetings. . . . . . . . . . . . . . . . . . . . 1
Section 2 Voting . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 4 Adjournment of Meetings . . . . . . . . . . . . . . . . . 1
Section 5 Special Meetings . . . . . . . . . . . . . . . . . . . . 1
Section 6 Notice of Shareholders Meeting . . . . . . . . . . . . . 1
Section 7 Organization . . . . . . . . . . . . . . . . . . . . . . 2
Section 8 Inspectors of Election . . . . . . . . . . . . . . . . . 2
Section 9 Record Date . . . . . . . . . . . . . . . . . . . . . . . 2
Section 10 Notice of Shareholder Proposals . . . . . . . . . . . . . 2
ARTICLE II - DIRECTORS
Section 1 Number of Directors . . . . . . . . . . . . . . . . . . . 4
Section 2 Regular Meetings . . . . . . . . . . . . . . . . . . . . 4
Section 3 Special Meetings . . . . . . . . . . . . . . . . . . . . 4
Section 4 Notice of Meetings . . . . . . . . . . . . . . . . . . . 4
Section 5 Quorum and Voting . . . . . . . . . . . . . . . . . . . . 4
Section 6 General Powers of Directors . . . . . . . . . . . . . . . 4
Section 7 Chairman . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 8 Compensation of Directors . . . . . . . . . . . . . . . . 5
Section 9 Qualification of Directors . . . . . . . . . . . . . . . 5
Section 10 Resignation of Directors Who Cease
to be Officers of the Company . . . . . . . . . . . . 5
ARTICLE III - COMMITTEES OF THE BOARD OF DIRECTORS
Section 1 Committees of the Board of Directors . . . . . . . . . . 5
Section 2 Election of Committee Members . . . . . . . . . . . . . . 6
Section 3 Procedure/Quorum/Notice . . . . . . . . . . . . . . . . . 6
Section 4 Executive Committee . . . . . . . . . . . . . . . . . . . 6
Section 5 Audit Committee . . . . . . . . . . . . . . . . . . . . . 7
Section 6 Compensation Committee . . . . . . . . . . . . . . . . . 7
Section 7 Committee on Directors . . . . . . . . . . . . . . . . . 7
Section 8 Public Issues Review Committee . . . . . . . . . . . . . 7
Section 9 Retirement Plan Review Committee . . . . . . . . . . . . 7
Section 10 Affiliated Transaction Committee . . . . . . . . . . . . 8
ARTICLE IV - NOTICE AND WAIVER OF NOTICE
Section 1 Notice . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2 Waiver of Notice . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V - OFFICERS
Section 1 Officers of the Company . . . . . . . . . . . . . . . . . 9
Section 2 Election of Officers . . . . . . . . . . . . . . . . . . 10
Section 3 Tenure of Office; Removal . . . . . . . . . . . . . . . . 10
Section 4 President . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5 Vice Presidents . . . . . . . . . . . . . . . . . . . . . 11
Section 6 Assistant Vice Presidents . . . . . . . . . . . . . . . . 11
Section 7 Secretary . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 8 Treasurer . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 9 Controller . . . . . . . . . . . . . . . . . . . . . . . 12
Section 10 Director of Internal Audit . . . . . . . . . . . . . . . 12
</TABLE>
(i)
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE VI - RESIGNATIONS: FILLING OF VACANCIES
Section 1 Resignations . . . . . . . . . . . . . . . . . . . . . . 12
Section 2 Filling of Vacancies . . . . . . . . . . . . . . . . . . 12
ARTICLE VII - CAPITAL STOCK
Section 1 Form and Execution of Certificates . . . . . . . . . . . 13
Section 2 Record Ownerships . . . . . . . . . . . . . . . . . . . . 13
Section 3 Transfer of Shares . . . . . . . . . . . . . . . . . . . 13
Section 4 Lost, Stolen or Destroyed Stock Certificates . . . . . . 13
Section 5 Regulations . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6 Transfer Agent and Registrar . . . . . . . . . . . . . . 14
ARTICLE VII - SEAL . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IX - FISCAL YEAR . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE X - AMENDMENTS
Section 1 Directors may Amend By-Laws . . . . . . . . . . . . . . . 14
Section 2 By-Laws Subject to Amendment by Shareholders . . . . . . 14
ARTICLE XI - EMERGENCY BY-LAWS
Section 1 Emergency By-Laws . . . . . . . . . . . . . . . . . . . 15
Section 2 Meetings . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4 By-Laws . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5 Liability . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6 Repeal or Change . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
(ii)
<PAGE> 4
BY-LAWS
OF
COCA-COLA ENTERPRISES INC.
ARTICLE I
SHAREHOLDERS
Section 1. Place, Date and Time of Holding Annual Meetings. Annual
meetings of shareholders shall be held at such place, date and time as shall be
designated from time to time by the Board of Directors. In the absence of a
resolution adopted by the Board of Directors establishing such place, date and
time, the annual meeting shall be held at 1209 Orange Street, Wilmington,
Delaware, on the second Wednesday in April of each year at 9:00 A.M. (local
time).
Section 2. Voting. Each outstanding share of common stock of the Company
is entitled to one vote on each matter submitted to a vote. The vote for the
election of directors shall be by written ballot. Directors shall be elected by
a plurality of votes cast in the election for such directors. All other action
shall be authorized by a majority of the votes cast unless a greater vote is
required by the Certificate of Incorporation or the laws of Delaware. A
shareholder may vote in person or by written proxy.
Section 3. Quorum. The holders of a majority of the issued and outstanding
shares of the common stock of the Company, present in person or represented by
proxy, shall constitute a quorum at all meetings of shareholders.
Section 4. Adjournment of Meetings. In the absence of a quorum or for any
other reason, the chairman of the meeting may adjourn the meeting from time to
time. If the adjournment is not for more than thirty days, the adjourned
meeting may be held without notice other than an announcement at the meeting.
If the adjournment is for more than thirty days, or if a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each shareholder of record entitled to vote at such meeting. At any
such adjourned meeting at which a quorum is present, any business may be
transacted which might have been transacted at the meeting originally called.
Section 5. Special Meetings. Special meetings of the shareholders for any
purpose or purposes may be called by the Board of Directors, the Chairman of
the Board of Directors or the President. Special meetings shall be held at the
place, date and time fixed by the Secretary.
Section 6. Notice of Shareholders Meeting. Written notice, stating the
place, date, hour and purpose of the annual or special meeting shall be given
by the Secretary not less than ten nor more than sixty days before the date of
the meeting to each shareholder entitled to vote at such meeting.
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Section 7. Organization. The Chairman of the Board of Directors shall
preside at all meetings of shareholders. In the absence of, or in case of a
vacancy in the office of, the Chairman of the Board of Directors, the
President, or in his absence any Vice President in order of seniority in time
in office, shall preside. The Secretary of the Company shall act as secretary
at all meetings of the shareholders and in the Secretary's absence, the
presiding officer may appoint a secretary.
Section 8. Inspectors of Election. All votes by ballot at any meeting of
shareholders shall be conducted by such number of inspectors of election as are
appointed for that purpose by either the Board of Directors or by the chairman
of the meeting. The inspectors of election shall decide upon the
qualifications of voters, count the votes and declare the results.
Section 9. Record Date. The Board of Directors, in order to determine
the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or entitled to receive payment of any
dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect of any change, conversion or exchange of stock
or for the purpose of any other lawful action, shall fix in advance a record
date which shall not be more than sixty nor less than ten days before the date
of such meeting, nor more than sixty days prior to any other action and in such
case only such shareholders as shall be shareholders of record on the date so
fixed, shall be entitled to such notice of or to vote at such meeting or any
adjournment thereof, or be entitled to receive payment of any such dividend or
other distribution or allotment of any rights or be entitled to exercise any
such rights in respect of stock or to take any such other lawful action, as the
case may be, notwithstanding any transfer of any stock on the books of the
Company after any such record date fixed as aforesaid.
Section 10. Notice of Shareholder Proposals.
(a) At any annual meeting of the shareholders, only such business shall be
conducted as shall have been brought before the meeting (i) by or at the
direction of the Board of Directors or (ii) by any shareholder of the
Company who complies with the notice procedures set forth in this Section
10(a) provided, in each case, that such business proposed to be conducted
is, under the law, an appropriate subject for shareholder action. For
business to be properly brought before an annual meeting by a shareholder,
the shareholder must have given timely notice thereof in writing to the
Secretary of the Company. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of
the Company not less than 30 days nor more than 60 days prior to the
meeting; provided, however, that in the event that less than 40 days' prior
public disclosure of the date of the meeting is given or made by the
Company, notice by the shareholder to be timely must be received not later
than the close of business on the 10th day
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following the day on which such public disclosure was made. A shareholder's
notice to the Secretary shall set forth as to each matter such shareholder
proposes to bring before the annual meeting (i) a brief description of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (ii) the name and address,
as they appear on the Company's books, of the shareholder proposing such
business, (iii) the class and number of shares of the Company which are
beneficially owned by such shareholder and (iv) any material interest of
such shareholder in such business. The Chairman of an annual meeting may,
if the facts warrant, determine and declare to the meeting that business was
not properly brought before the meeting and in accordance with the
provisions of this Section 10(a) and, if he should so determine, he shall so
declare to the meeting and any such business so determined to be not
properly brought before the meeting shall not be transacted.
(b) Only persons who are nominated in accordance with the procedures set
forth in the By-Laws shall be eligible for election as directors.
Nominations of persons for election to the Board of Directors of the Company
may be made at a meeting of shareholders (i) by or at the direction of the
Board of Directors or (ii) by any shareholder of the Company entitled to
vote for the election of directors at the meeting who complies with the
notice procedures set forth in this Section 10(b). Such nominations, other
than those made by or at the direction of the Board of Directors, shall be
made pursuant to timely notice in writing to the Secretary of the Company.
To be timely, a shareholder's notice shall be delivered to or mailed and
received at the principal executive offices of the Company not less than 30
days nor more than 60 days prior to the meeting; provided, however, that in
the event that less than 40 days' prior disclosure of the date of the
meeting is given or made by the Company, notice by the shareholder to be
timely must be so received not later than the close of business on the 10th
day following the day on which such public disclosure was made. Such
shareholder's notice shall set forth (i) as to each person whom such
shareholder proposes to nominate for election or reelection as a director,
all information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (including such person's written consent to
being named in the proxy statement as a nominee and to serving as a director
if elected); and (ii) as to the shareholder giving the notice (x) the name
and address, as they appear on the Company's books, of such shareholder and
(y) the class and number of shares of the Company which are beneficially
owned by such shareholder. At the request of the Board of Directors any
person nominated by the Board of Directors for election as a director shall
furnish to the Secretary of the Company that information required to be set
forth in the shareholder's notice of nomination which pertains to the
nominee. No person shall be eligible for election as a shall furnish to the
Secretary of the Company that information required to be set forth in the
shareholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a
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director of the Company unless nominated in accordance with the procedures
set forth in the By-Laws. The Chairman of the meeting may, if the facts
warrant, determine and declare to the meeting that a nomination was not made
in accordance with the procedures prescribed by the By-Laws and, if he
should so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
ARTICLE II
DIRECTORS
Section 1. Number of Directors. The whole Board of Directors shall
consist of not less than three (3) nor more than twenty (20) members, the
exact number to be set from time to time by the Board of Directors. No
decrease in the number of directors shall shorten the term of any incumbent
director. In absence of the Board of Directors setting the number of
directors, the number shall be 12.
Section 2. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times as the Board of Directors may determine from time
to time.
Section 3. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board of Directors, the President, the
Secretary or by a majority of the directors by written request to the
Secretary.
Section 4. Notice of Meetings. The Chairman, a Vice Chairman or the
Secretary shall give notice of all meetings of the Board of Directors by
mailing the notice at least three days before each meeting or by telegraphing
or telephoning the directors not later than one day before the meeting. The
notice shall state the time, date and place of the meeting, which shall be
determined by the Chairman of the Board of Directors, or, in absence of the
Chairman, by the Secretary of the Company, unless otherwise determined by the
Board of Directors.
Section 5. Quorum and Voting. A majority of the directors holding office
shall constitute a quorum for the transaction of business. Except as otherwise
specifically required by Delaware law or by the Certificate of Incorporation of
the Company or by these By-Laws, any action required to be taken shall be
authorized by a majority of the directors present at any meeting at which a
quorum is present.
Section 6. General Powers of Directors. The business and affairs of the
Company shall be managed under the direction of the Board of Directors.
Section 7. Chairman. The Board of Directors may appoint a Chairman of
the Board of Directors, who shall preside as chairman of all meetings of the
directors and all meetings of the shareholders of the Company, and who shall
perform such other duties as may be assigned from time to time by the Board of
Directors. The Board of Directors may also appoint one or more Vice Chairmen,
who shall perform such
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duties as may be assigned from time to time by the Board of Directors. In the
absence of, or in the case of a vacancy in the office of, the Chairman of the
Board of Directors, the Vice Chairman shall preside. If there is more than one
Vice Chairman, the Vice Chairman who is also an officer, or, if each is an
officer, the Vice Chairman who is the senior officer, shall preside. In the
absence of, or, in the case of vacancies in the offices of, Chairman and Vice
Chairman of the Board of Directors, a chairman selected by the Chairman of the
Board of Directors, or if he fails to do so, by the directors, shall preside.
Section 8. Compensation of Directors. Directors and members of any
committee of the Board of Directors shall be entitled to such reasonable
compensation and fees for their services as shall be fixed from time to time by
resolution of the Board of Directors and shall also be entitled to
reimbursement for any reasonable expenses incurred in attending meetings of the
Board of Directors and any committee thereof, except that a Director who is an
officer or employee of the Company shall receive no compensation or fees for
serving as a Director or a committee member.
Section 9. Qualification of Directors. Each person who shall attain the
age of 70 shall not thereafter be eligible for nomination or renomination as a
member of the Board of Directors.
Section 10. Resignation of Directors Who Cease to be Officers of the
Company. Any director who was an officer of the Company at the time of his or
her election or most recent reelection shall resign as a member of the Board of
Directors simultaneously when he or she ceases to be an officer of the Company.
ARTICLE III
COMMITTEES OF THE BOARD OF DIRECTORS
Section 1. Committees of the Board of Directors. The Board of Directors
shall designate an Executive Committee, an Audit Committee, a Compensation
Committee, a Committee on Directors, a Public Issues Review Committee, a
Retirement Plan Review Committee, and an Affiliated Transaction Committee, each
of which shall have and may exercise the powers and authority of the Board of
Directors to the extent hereinafter provided. The Board of Directors may
designate one or more additional committees of the Board of Directors with such
powers as shall be specified in the resolution of the Board of Directors. Each
committee shall consist of such number of directors as shall be determined from
time to time by resolution of the Board of Directors. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board
of Directors to act at the meeting in the place of any such absent or
disqualified member.
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All actions of the Board of Directors designating committees, or electing
or removing members of such committees, shall be taken by a resolution passed
by a majority of the whole Board.
Each committee shall keep regular minutes of its meetings. All action taken
by a committee shall be reported to the Board of Directors at its meeting next
succeeding such action and shall be subject to approval and revision by the
Board, provided that no legal rights of third parties shall be affected by such
revisions
Section 2. Election of Committee Members. The members of each committee
shall be elected by the Board of Directors and shall serve until the first
meeting of the Board of Directors after the annual meeting of shareholders and
until their successors are elected and qualified or until the members' earlier
resignation or removal. The Board of Directors may designate the Chairman of
each committee. Vacancies may be filled by the Board of Directors at any
meeting.
Section 3. Procedure/Quorum/Notice. The Chairman, Vice Chairman or a
majority of any committee may call a meeting of that committee. A quorum of
any committee shall consist of a majority of its members unless otherwise
provided by resolution of the Board of Directors. The majority vote of a
quorum shall be required for the transaction of business. The secretary of the
committee or the chairman of the committee shall give notice of all meetings of
the committee by mailing the notice to the members of the committee at least
three days before each meeting or by telegraphing or telephoning the members
not later than one day before the meeting. The notice shall state the time,
date and place of the meeting. Each committee shall fix its other rules of
procedure.
Section 4. Executive Committee. During the interval between meetings of
the Board of Directors, the Executive Committee shall have and may exercise all
the powers and authority of the Board of Directors, to act upon any matters
which, in the opinion of the Chairman of the Board, should not be postponed
until the next previously scheduled meeting of the Board of Directors; but, to
the extent prohibited by law, shall not have the power or authority of the
Board of Directors in reference to amending the Certificate of Incorporation of
the Company (except that the Committee may, to the extent authorized in the
resolutions providing for the issuance of shares of stock adopted by the Board
of Directors fix the designations and any of the preferences or rights of such
shares relating to dividends, redemption, dissolution, any distribution of
assets of the Company or the conversion into, or the exchange of such shares
for, shares of any other class or classes or any other series of the same or
any other class or classes of stock of the Company or fix the number of shares
of any series of stock or authorize the increase or decrease of the shares of
any series), adopting an agreement of merger or consolidation for the Company,
recommending to the shareholders of the Company the sale, lease or exchange of
all or substantially all of the Company's property and assets, recommending to
the shareholders a dissolution of the Company or a revocation of a dissolution,
or amending the By-Laws of the Company. The Executive Committee shall
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have the power and authority to authorize the issuance or sale of the capital
stock of the Company.
Section 5. Audit Committee. The Audit Committee shall have the power to
recommend to the Board of Directors the selection and engagement of independent
accountants to audit the books and accounts of the Company and the discharge of
the independent accountants. The Audit Committee shall review the scope of the
audits as recommended by the independent accountants, the scope of the internal
auditing procedures of the Company and the system of internal accounting
controls and shall review the reports to the Audit Committee of the independent
accountants and the internal auditors.
Section 6. Compensation Committee. The Compensation Committee shall have
the powers and authorities vested in it by the incentive, stock option and
similar plans of the Company. The Compensation Committee shall have the power
to approve, disapprove, modify or amend all plans designed and intended to
provide compensation primarily for officers of the Company. The Compensation
Committee shall review, fix and determine from time to time the salaries and
other remunerations of all officers of the Company.
Section 7. Committee on Directors. The Committee on Directors shall have
the power to recommend candidates for election to the Board of Directors and
shall consider nominees for directorships submitted by shareholders. The
Committee on Directors shall consider issues involving potential conflicts of
interest of directors and committee members and recommend and review all
matters relating to fees and retainers paid to directors, committee members and
committee chairmen.
Section 8. Public Issues Review Committee. The Public Issues Review
Committee shall have the power to review Company policy and practice relating
to significant public issues of concern to the shareholders, the Company, the
business community and the general public. The Committee may also review
management's position on shareholder proposals involving issues of public
interest to be presented at annual or special meetings of shareholders.
Section 9. Retirement Plan Review Committee. The Retirement Plan Review
Committee shall have the power to review the administration of all employee
retirement plans for the Company and the financial condition of all trusts and
other funds established pursuant to such plans. The Retirement Plan Review
Committee shall also have the power to recommend to the Board of Directors the
adoption or amendment of any employee retirement plan of the Company.
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Section 10. Affiliated Transaction Committee.
(a) The Affiliated Transaction Committee shall review, consider and pass
upon any Affiliated Transaction, and no such transaction shall be effected
without the concurrence of the Affiliated Transaction Committee. The
Affiliated Transaction Committee shall have the powers to (i) negotiate
with the representatives of any party to an Affiliated Transaction; (ii)
require approval of an Affiliated Transaction by a vote of the share owners
of Coca-Cola Enterprises Inc. which may be greater than or in addition to
any vote required by law; and (iii) engage Independent Advisers at the
reasonable expense of the Company, and without prior approval of the
Company, to assist in its review and decision regarding any Affiliated
Transaction.
(b) The Affiliated Transaction Committee shall consist of at least three
Independent Directors, with each other Independent Director being an
alternate member if any committee member is unable or unwilling to serve.
(c) The Affiliated Transaction Committee shall cease to exist on the later
of (i) February 10, 2001 or (ii) the date on which any Affiliated
Transaction being reviewed, considered and passed upon by the Affiliated
Transaction Committee prior to February 10, 2001 shall have been either
consummated or abandoned.
(d) For the purposes of the foregoing Article III, Section 10, the
following definitions shall apply:
(i) "Company" means Coca-Cola Enterprises Inc. or any company in which
Coca-Cola Enterprises Inc. has more than 50% of the voting power in the
election of directors or in which it has the power to elect a majority
of the Board of Directors.
(ii) "The Coca-Cola Company" means The Coca-Cola Company or any
company in which The Coca-Cola Company has more than 50% of the voting
power in the election of directors or in which it has the power to
elect a majority of the Board of Directors.
(iii) "Affiliate" means any entity (other than the Company) in which
The Coca-Cola Company has a 20% or greater equity or other ownership
interest, or any entity controlled directly or indirectly by such
Affiliate. Notwithstanding the above, no entity shall be an Affiliate
solely by virtue of the rights granted to The Coca-Cola Company
pursuant to a bottling contract.
(iv) "Affiliated Transaction" means any proposed merger or
consolidation with, purchase of an equity interest in, or purchase of
assets other than in the ordinary course of business from an Affiliate.
and which transaction has an aggregate value exceeding $10 million.
(v) "Independent Directors" means any member of the Company's Board of
Directors who (i) is not, and for the past five years has not been, an
officer, director or employee of The Coca-Cola Company or an Affiliate;
(ii) does not own in excess of 1% of the shares of The Coca-Cola
Company; and (iii) own any equity or other ownership
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interest in an entity (except as permitted by the preceding (ii) and
other than in the Company) which is a party to the Affiliated
Transaction.
(vi) "Independent Adviser" means any legal or financial adviser or
other expert (i) that has not represented or provided services to The
Coca-Cola Company during the past calendar year, or (ii)
notwithstanding (i) above, that the Affiliated Transaction Committee
(as defined below) determines, after due inquiry, is able to represent
it in an independent manner not adverse to the interests of the Company
and its stockholders.
ARTICLE IV
NOTICE AND WAIVER OF NOTICE
Section 1. Notice. Any notice required to be given to shareholders or
directors under these By-Laws, the Certificate of Incorporation or by law may
be given by mailing the same, addressed to the person entitled thereto, at such
person's last known post office address and such notice shall be deemed to be
given at the time of such mailing.
Section 2. Waiver of Notice. Whenever any notice is required to be given
under these By-Laws, the Certificate of Incorporation or by law, a waiver
thereof, signed by the person entitled to notice, whether before or after the
time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of any regular or special meeting of the
shareholders, directors or a committee of directors need be specified in any
written waiver of notice.
ARTICLE V
OFFICERS
Section 1. Officers of the Company. The officers of the Company shall be
selected by the Board of Directors and shall be a President, one or more Vice
Presidents, a Secretary and a Treasurer. The Board of Directors may elect a
Controller and one or more of the following:
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Senior Executive Vice President, Executive Vice President, Senior Vice
President, Assistant Vice President, Assistant Secretary, Associate Treasurer,
Assistant Treasurer, Associate Controller and Assistant Controller. Two or
more offices may be held by the same person.
The Company may have a Chief Executive Officer who shall be appointed by
the Board of Directors and who, subject to the overall direction and
supervision of the Board of Directors and Committees thereof, shall be in
general charge of the affairs of the Company and shall consult with and advise
the Board of Directors and committees thereof on the business and the affairs
of the Company.
The Company may have a Chief Operating Officer who shall be appointed by
the Board of Directors and who, subject to the overall direction and
supervision of the Chief Executive Officer, shall be in general charge, control
and supervision over the administration and operations of the Company and shall
have such other duties and powers as may be imposed or given by the Board of
Directors.
The Company may have a General Counsel who shall be appointed by the Board
of Directors and shall have general supervision of all matters of a legal
nature concerning the Company, unless the Board of Directors has also appointed
a General Tax Counsel, in which event the General Tax Counsel shall have
general supervision of all tax matters of a legal nature concerning the
Company.
The Company may have a Chief Financial Officer who shall be appointed by
the Board of Directors and shall have general supervision over the financial
affairs of the Company. The Company may also have a Director of Internal Audit
who shall be appointed by the Board of Directors.
Section 2. Election of Officers. At the first meeting of the Board of
Directors after each annual meeting of shareholders, the Board of Directors
shall elect the officers. From time to time the Board of Directors may elect
other officers.
Section 3. Tenure of Office; Removal. Each officer shall hold office
until the first meeting of the Board of Directors after the annual meeting of
shareholders following the officer's election and until the officer's successor
is elected and qualified or until the officer's earlier resignation or removal.
Each officer shall be subject to removal at any time, with or without cause, by
the affirmative vote of a majority of the entire Board of Directors.
Section 4. President. The President shall have such powers and perform
such duties as may be assigned by the Board of Directors or by the Chairman of
the Board of Directors. In the absence or disability of the President, his or
her duties shall be performed by such Vice Presidents as the Chairman of the
Board of Directors or the Board of Directors may designate. The President
shall have the power to make and execute contracts on the Company's behalf and
to delegate such power to others.
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Section 5. Vice Presidents. Each Vice President shall have such powers
and perform such duties as may be assigned to the Vice President by the Board
of Directors or the President. Each Vice President shall have the power to
make and execute contracts on the Company's behalf.
Section 6. Assistant Vice Presidents. An Assistant Vice President shall
perform such duties as may be assigned to him by the Board of Directors, the
President or any Vice President.
Section 7. Secretary. The Secretary shall keep minutes of all meetings
of the shareholders and of the Board of Directors, and shall keep, or cause to
be kept, minutes of all meetings of Committees of the Board of Directors,
except where such responsibility is otherwise fixed by the Board of Directors.
The Secretary shall issue all notices for meetings of the shareholders and
Board of Directors and shall have charge of and keep the seal of the Company
and shall affix the seal attested by the Secretary's signature to such
instruments or other documents as may properly require same. The Secretary
shall cause to be kept such books and records as the Board of Directors, the
Chairman of the Board of Directors or the President may require; and shall
cause to be prepared, recorded, transferred, issued, sealed and cancelled
certificates of stock as required by the transactions of the Company and its
shareholders. The Secretary shall attend to such correspondence and such
other duties as may be incident to the office of the Secretary or assigned to
him by the Board of Directors or the President.
In the absence of the Secretary, an Assistant Secretary is authorized to
assume the duties herein imposed upon the Secretary and any Assistant Secretary
or other duly authorized officer may affix the seal of the Company to such
instruments or other documents as may require the same.
Section 8. Treasurer. The Treasurer shall perform all duties and acts
incident to the position of Treasurer, shall have custody of the Company funds
and securities, and shall deposit all money and other valuable effects in the
name and to the credit of the Company in such depositories as may be designated
by the Board of Directors. The Treasurer shall disburse the funds of the
Company as may be authorized, taking proper vouchers for such disbursements,
and shall render to the Board of Directors, whenever required, an account of
all the transactions of the Treasurer and of the financial condition of the
Company. The Treasurer shall vote all of the stock owned by the Company in any
corporation and may delegate that power to others. The Treasurer shall perform
such other duties as may be assigned to the Treasurer by the Board of
Directors, the President or the Chief Financial Officer and shall report to the
Chief Financial Officer or, in the absence of the Chief Financial Officer, to
the President.
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In the absence of the Treasurer, an Assistant Treasurer is authorized to
assume the duties herein imposed upon the Treasurer.
Section 9. Controller. The Controller shall keep or cause to be kept in
the books of the Company provided for that purpose a true account of all
transactions and of the assets and liabilities of the Company. The Controller
shall prepare and submit to the Chief Financial Officer or, in the absence of
the Chief Financial Officer, to the President, such financial statements and
schedules as may be required to keep the Chairman of the Board of Directors,
the President and the Chief Financial Officer currently informed of the
operations and financial condition of the Company, and perform such other
duties as may be assigned by the Chief Financial Officer, or the President.
In the absence of the Controller, an Assistant Controller is authorized to
assume the duties herein imposed upon the Controller.
Section 10. Director of Internal Audit. The Director of Internal Audit
shall cause to be performed, and have general supervision over, auditing
activities of the financial transactions of the Company, including the
coordination of such auditing activities with the independent accountants of
the Company and shall perform such other duties as may be assigned to him from
time to time. The Director of Internal Audit shall report to the Chief
Executive Officer or, in the absence of the Chief Executive Officer, to the
President. From time to time at the request of the Audit Committee, the
Director of Internal Audit shall inform that Committee of the auditing
activities of the Company.
ARTICLE VI
RESIGNATIONS; FILLING OF VACANCIES
Section 1. Resignations. Any director, member of a committee, or officer
may resign at any time. Such resignation shall be made in writing and shall
take effect at the time specified therein, and, if no time be specified, at the
time of its receipt by the Chairman of the Board of Directors or the Secretary.
The acceptance of a resignation shall not be necessary to make it effective.
Section 2. Filling of Vacancies. If the office of any director becomes
vacant, the directors then in office, although less than a quorum, or, if the
number of directors is increased, the directors then in office, may elect any
qualified person to fill such vacancy. In the case of a vacancy in the office
of a director caused by an increase in the number of directors, the person so
elected shall hold office until the next annual meeting of shareholders, or
until his successor shall be elected and qualified. In the case of a vacancy
in the office of a director resulting otherwise than from an increase in the
number of directors, the person so elected to fill such vacancy shall hold
office for the unexpired term of the director whose office became vacant. If
the office of any officer becomes vacant, the Chairman of the Board of
Directors may appoint any qualified person to fill such vacancy temporarily
until the Board of Directors elects any qualified person for the
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unexpired portion of the term. Such person shall hold office for the unexpired
term and until the officer's successor shall be duly elected and qualified or
until the officer's earlier resignation or removal.
ARTICLE VII
CAPITAL STOCK
Section 1. Form and Execution of Certificates. The certificates of
shares of the capital stock of the Company shall be in such form as shall be
approved by the Board of Directors. The certificates shall be signed by the
Chairman or Vice Chairman of the Board of Directors or the President, or a Vice
President, and by the Secretary or an Assistant Secretary or the Treasurer or
an Assistant Treasurer. Each certificate of stock shall certify the number of
shares owned by the shareholder in the Company.
A facsimile of the seal of the Company may be used in connection with the
certificates of stock of the Company, and facsimile signatures of the officers
named in this Section may be used in connection with said certificates. In the
event any officer whose facsimile signature has been placed upon a certificate
shall cease to be such officer before the certificate is issued, the
certificate may be issued with the same effect as if such person were an
officer at the date of issue.
Section 2. Record Ownerships. All certificates shall be numbered
appropriately and the names of the owners, the number of shares and the date of
issue shall be entered in the books of the Company. The Company shall be
entitled to treat the holder of record of any share of stock as the holder in
fact thereof and accordingly shall not be bound to recognize any equitable or
other claim to or interest in any share on the part of any other person,
whether or not it shall have express or other notice thereof, except as
required by the laws of Delaware.
Section 3. Transfer of Shares. Upon surrender to the Company or to a
transfer agent of the Company of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment, or authority to
transfer, it shall be the duty of the Company, if it is satisfied that all
provisions of law regarding transfers of shares have been duly complied with,
to issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
Section 4. Lost, Stolen or Destroyed Stock Certificates. Any person
claiming a stock certificate in lieu of one lost, stolen or destroyed shall
give the Company an affidavit as to such person's ownership of the certificate
and of the facts which prove that it was lost, stolen or destroyed. The person
shall also, if required by the Treasurer or Secretary of the Company, deliver
to the Company a bond, sufficient to indemnify the Company against any claims
that may be made
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<PAGE> 17
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate. Any Vice President or the
Secretary or any Assistant Secretary of the Company is authorized to issue such
duplicate certificates or to authorize any of the transfer agents and
registrars to issue and register such duplicate certificates.
Section 5. Regulations. The Board of Directors from time to time may
make such rules and regulations as it may deem expedient concerning the issue,
transfer and registration of shares.
Section 6. Transfer Agent and Registrar. The Board of Directors may
appoint such transfer agents and registrars of transfers as it may deem
necessary, and may require all stock certificates to bear the signature of
either or both.
ARTICLE VIII
SEAL
The Board of Directors shall provide a suitable seal containing the name of
the Company, the year "1986", and the words, "CORPORATE SEAL, DELAWARE," or
other appropriate words. The Secretary shall have custody of the seal.
ARTICLE IX
FISCAL YEAR
The fiscal year of the Company for each year shall end on December 31 in
each year or shall end on such other date as may be determined by the Audit
Committee from time to time.
ARTICLE X
AMENDMENTS
Section 1. Directors may Amend By-Laws. The Board of Directors shall
have the power to make, amend and repeal the By-Laws of the Company at any
regular or special meeting of the Board of Directors.
Section 2. By-Laws Subject to Amendment by Shareholders. All By-Laws
shall be subject to amendment, alteration, or repeal by the shareholders
entitled to vote at any annual meeting or at any special meeting.
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<PAGE> 18
ARTICLE XI
EMERGENCY BY-LAWS
Section 1. Emergency By-Laws. This Article XI shall be operative during
any emergency resulting from an attack on the United States or on a locality in
which the Company conducts its business or customarily holds meetings of its
Board of Directors or its shareholders, or during any nuclear or atomic
disaster or during the existence of any catastrophe or other similar emergency
condition, as a result of which a quorum of the Board of Directors or the
Executive Committee thereof cannot be readily convened (an "emergency"),
notwithstanding any different or conflicting provision in the preceding
Articles of these By-Laws or in the Certificate of Incorporation of the
Company. To the extent not inconsistent with the provisions of this Article,
the By-Laws provided in the preceding Articles and the provisions of the
Certificate of Incorporation of the Company shall remain in effect during such
emergency, and upon termination of such emergency, the provisions of this
Article XI shall cease to be operative.
Section 2. Meetings. During any emergency, a meeting of the Board of
Directors, or any committee thereof, may be called by any officer or director
of the Company. Notice of the time and place of the meeting shall be given by
any available means of communication by the person calling the meeting to such
of the directors and/or Designated Officers, as defined in Section 3 hereof, as
it may be feasible to reach. Such notice shall be given at such time in
advance of the meeting as, in the judgment of the person calling the meeting,
circumstances permit.
Section 3. Quorum. At any meeting of the Board of Directors, or any
committee thereof, called in accordance with Section 2 of this Article XI, the
presence or participation of two directors, one director and a Designated
Officer or two Designated Officers shall constitute a quorum for the
transaction of business.
The Board of Directors or the committees thereof, as the case may be,
shall, from time to time but in any event prior to such time or times as an
emergency may have occurred, designate the officers of the Company in a
numbered list (the "Designated Officers") who shall be deemed, in the order in
which they appear on such list, directors of the Company for purposes of
obtaining a quorum during an emergency, if a quorum of directors cannot
otherwise be obtained.
Section 4. By-Laws. At any meeting called in accordance with Section 2
of this Article XI, the Board of Directors or the committees thereof, as the
case may be, may modify, amend or add to the provisions of this Article XI so
as to make any provision that may be practical or necessary for the
circumstances of the emergency.
Section 5. Liability. No officer, director or employee of the Company
acting in accordance with the provisions of this Article XI shall be liable
except for willful misconduct.
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Section 6. Repeal or Change. The provisions of this Article XI shall be
subject to repeal or change by further action of the Board of Directors or by
action of the shareholders, but no such repeal or change shall modify the
provisions of Section 5 of this Article XI with regard to action taken prior to
the time of such repeal or change.
16
<PAGE> 1
EXHIBIT 10.8
COCA-COLA ENTERPRISES INC.
RESTRICTED STOCK AWARD TAX WITHHOLDING AGREEMENT
- --------------------------------
Name of Share Owner
Please indicate the arrangement by which you wish to satisfy
the tax obligation with respect to the portion of your 1995 restricted stock
grant that vested on April 17, 1995.
You may elect more than one method of satisfying your tax
obligations, but the amounts indicated for the options you elect must equal the
amount of your total tax obligation of $----------------.
You should return one copy of this Restricted Stock Award Tax
Withholding Agreement ("Agreement") no later than May 8, 1995, along with any
payment you are making at this time, in the self-addressed, stamped envelope
provided to you. You should retain one copy of the completed Agreement for
your records. Note: Any payments you make to the Company after this Agreement
is returned must be made to your local payroll department.
---- I have enclosed a check, with this Agreement, in the
amount of $------------ made payable to Coca-Cola
Enterprises Inc., as payment for federal, state, FICA
and Medicare taxes that have been paid by the Company
on my behalf.
---- I elect to accept a loan* from the Company and
authorize the Company to make deductions from my
paychecks, in equal installments, beginning in
---------, 19--- and ending in -----------, 19---,
but, in no event, shall extend past April 15th of the
calendar year following the date on which this
Agreement is executed. The aggregate amount of the
loan to be subject to repayment by payroll deduction
shall be $------------, as satisfaction of my tax
obligation. If my employment with the Company
terminates prior to the full repayment of this loan,
the outstanding balance will become due and payable
to my local payroll department on the actual date of
my termination.
---- I elect to accept a loan* from the Company in the
amount of $-------- and agree to repay the Company
the full balance of this amount in a lump sum no
later than April 15th of the calendar year following
the date on which this Agreement is executed. I will
make all payments with respect to this loan to my
local payroll department. If my employment with the
Company terminates prior to the full repayment of
this loan, the outstanding balance will become due on
the actual date of my termination.
- -------------------------------- -------------------
Signature Date
__________________________________
*This loan is interest-free. However, if the employee to which this loan
is made currently has an outstanding balance on one or more loans from the
Company and this loan is not repaid within 30 days of the date of this
Agreement, the employee will realize income equal to an interest rate required
by the Internal Revenue Service on the aggregate balance of such loan(s), if
the loan(s) exceed(s) $10,000.
<PAGE> 2
COCA-COLA ENTERPRISES INC.
TO:
DATE:
Congratulations! We are pleased to advise you that, due to the recent
performance of the shares of the common stock of Coca-Cola Enterprises Inc.
(the "Company"), the increase in the fair market value required for
restrictions to be removed from 20% of your 1995 restricted stock award has
been achieved. The 1995 Restricted Stock Award Plan (the "Plan") was approved
by the Share Owners on April 17, 1995; therefore, as of that date 20% of your
1995 award is "vested." This means that you will have all rights of ownership
in those shares of stock, including the right to transfer them. You will, of
course, continue to receive any dividends on and to retain voting rights with
respect to your shares of stock. The vesting of these shares of stock is
evidence that your daily efforts contribute to the Company's consistent growth
and financial performance.
As explained in the materials on tax consequences that accompanied your 1995
Stock Grant Agreement, restricted stock is subject to federal and state
taxation on the value of the stock at the time it vests. The Company was
required to pay these taxes within one business day of the date your stock
vested, so you must, either promptly repay the Company to satisfy your tax
obligations or make arrangements with the Company regarding such repayment.
The total amount of taxes that were withheld with respect to the vesting of
your shares of stock is $----------------. This amount includes federal
income, FICA, and Medicare taxes and, if you are a resident of a state that has
a state income tax, your state taxes.
To assist you in satisfying your tax obligations, the Company is offering you
several alternative arrangements under the enclosed Restricted Stock Award Tax
Withholding Agreement (the "Agreement").
* You may simply provide a check to the Company for the full
amount of your taxes.
* You may accept an interest-free loan from the Company for the
full amount of your taxes by completing the enclosed Agreement
and indicating by your signature that you agree to repay the
loan, in full, as of April 15, 1996. As your method of
repayment:
- You may elect to repay the amount of your loan in a
single payment by providing a check to your local
payroll department.
- You may elect to have equal monthly installments
deducted from your paychecks over the number of months
you specify in the Agreement.
<PAGE> 3
* You may elect to use a combination of these repayment methods
by indicating the amounts you wish to have subject to each
election you make.
Although this loan from the Company is available to you interest-free, your
acceptance of the loan may, in certain circumstances, cause you to realize
income. Unless you repay this loan within 30 days, you will have income
"imputed" to you in an amount equal to a rate of interest required by the
Internal Revenue Service to the extent that this loan or the total of all that
you currently have through the Company exceeds $10,000. Your W-2 will reflect
this imputed income for any tax year it is required to be included in your
gross income.
The certificate representing your vested shares of Company stock will be
delivered to you in a few days. This certificate is a negotiable instrument,
and consideration should be given to its safekeeping. Suggestions for
safekeeping your certificate include: (1) depositing it in a personal safe
deposit box; (2) returning it to First Chicago Trust Company, the transfer
agent for CCE common stock, to hold the certificate on your behalf; or (3)
using the services of Trust Company Bank or your personal bank or broker to
safeguard the certificate. For more information on safekeeping your
certificate and any fees that may be associated with these alternatives, you
may contact Helene Krupp in Share-Owner Relations at (404)676-7997.
If you have questions about the tax consequences associated with the vesting of
your restricted stock, you should consult your personal tax or financial
advisor. If you have any questions regarding your 1995 restricted stock award
or the repayment of your tax obligations, please call Davina Godwin in
Corporate Human Resources at (404) 989-3114.
Summerfield K. Johnston, Jr.
<PAGE> 1
EXHIBIT 10.9
COCA-COLA ENTERPRISES INC.
1995 PHANTOM STOCK AWARD PLAN
SECTION 1. PURPOSE
The purpose of the 1995 Phantom Stock Award Plan of Coca-Cola
Enterprises Inc. (the "Plan") is to advance the interest of Coca-Cola
Enterprises Inc. (the "Company") and its subsidiaries (as defined in Section 4)
by encouraging and providing an incentive to select key employees to increase
the value of the Company through grants of Phantom Stock Awards ("PSAs").
SECTION 2. ADMINISTRATION
The Plan shall be administered by a committee (the "Committee")
appointed by the Chief Executive Officer of the Company from among its officers
not eligible to participate in the Plan and shall be comprised of not fewer
than two members.
The Committee shall determine the persons to whom and the times at
which PSAs will be granted, the number of PSAs to be granted, the duration of
each PSA, the times within which the PSA may be exercised, the cancellation of
the PSA and the other conditions of a grant of a PSA. The conditions of the
grants of PSAs need not be the same with respect to each grantee or with
respect to each grant.
The Committee may, subject to the provisions of the Plan, establish
such rules and regulations as it deems necessary or advisable for the proper
administration of the Plan, and may make interpretations and may take other
action in connection with or in relation to the Plan as it deems necessary or
advisable. Each interpretation or other action made or taken pursuant to the
Plan, including interpretation of the Plan and the specific conditions and
provisions of the Plan granted hereunder by the Committee, shall be final and
conclusive for all purposes and upon all persons including, but without
limitation, the Company, its Subsidiaries, the Committee, the Board, the
affected grantees and their respective successors in interest.
In addition to such other rights of indemnification as they have as
members of the Committee, the members of the Committee shall be indemnified by
the Company against reasonable expenses (including, without limitation,
attorney's fees) incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal to which they or any of them may
be a party by reason of any action taken or failure to act in connection with
the Plan or any PSA granted hereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved to the extent required
by and in the manner provided by the Certificate of Incorporation or Bylaws of
the Company and under Delaware law relating to indemnification of the
Committee) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such Committee member or
members did not act in good faith and in a manner he, she, or they reasonably
believed to be in or not opposed to the best interest of the Company.
<PAGE> 2
SECTION 3. NUMBER OF AWARDS
The stock to which the PSAs shall relate under the Plan shall be
shares of Common Stock, $1.00 par value, of the Company (the "Stock"). The
total number of PSAs that may be granted under the Plan shall not exceed
300,000. Such number shall be subject to adjustment in accordance with Section
10 hereof. PSAs which expire or are canceled, surrendered or terminated for
any reason may again be granted under the Plan.
SECTION 4. ELIGIBILITY
As determined by the Committee, PSAs may be granted to select key
employees of the Company or its Subsidiaries, who are not "officers" within the
meaning of Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended,
as determined by the Committee. No grant under this Plan shall be made in any
year to an employee who is eligible to receive a grant, in that same year, from
any stock plan maintained by the Company.
"Subsidiary" shall mean any corporation or other business organization
in which the Company owns, directly or indirectly, 25% or more of the voting
stock or capital at the time of the granting of such PSA.
SECTION 5. AWARD OF PHANTOM STOCK
(a) Exercise of a PSA. Each PSA represents the right of the
grantee thereof to receive a cash amount equal to the excess of (i) the fair
market value of a share of Stock on the date of exercise, over (ii) the fair
market value of a share of Stock on the date the PSA was granted.
(b) Value of Stock to Which PSA Relates. The fair market value of a
share of Stock on any date shall be the average of the high and low market
prices at which a share of Stock shall have been sold on such date or on the
next preceding trading day, if such date is not a trading day, as reported on
the New York Stock Exchange Composite Transactions Listing.
(c) Duration of PSA. The duration of the PSA shall be 10 years
from the date of grant, unless determined otherwise by the Committee.
(d) Withholding. The Company and its Subsidiaries shall, to the
extent permitted by law, have the right to deduct from any payment of any kind
otherwise due to the grantee the amount of any taxes required by law to be
withheld with respect to the compensation paid under the Plan.
(e) Time Period for Exercise of PSAs. Subject to the provisions of
Section 8, a PSA shall be exercisable (A) to the extent of one-third of the
total number of PSAs granted a participant, 12 months following the date of
grant; (B) to the extent of an additional one-third of the total number of PSAs
granted a participant, 24 months following the date of grant; and (C) in full,
36 months following the date of grant.
(f) Condition Precedent for Exercise of PSA. Subject to the
provisions of Section 8, a PSA may be exercised only if the grantee is
continuously employed, by the Company or a Subsidiary, from the date of grant
through the date of exercise.
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<PAGE> 3
(g) Restrictions on Exercise. Any election by a grantee to
exercise, in full or in part, any PSA granted under the Plan shall be made in
such manner and in accordance with such procedures as the Committee may
prescribe.
(h) Other Terms and Conditions. A grant of PSA may contain such
other provisions not inconsistent with the provisions of the Plan, as the
Committee shall determine appropriate from time to time. The grant of PSA to
any employee shall not affect in any way the right of the Company and any
Subsidiary to terminate the relationship between the Company and the grantee.
SECTION 6. EXTENSION OF THE TERMS
The Committee may extend the duration of any PSA for a period not to
exceed one year without changing the value of the PSA as determined on the date
of grant and on such other terms and condition as the Committee may deem
advisable.
SECTION 7. NONTRANSFERABILlTY OF PHANTOM STOCK AWARD
PSA's shall be exercisable, during the lifetime of a grantee, only by
the grantee personally or by the grantee's legal representative.
SECTION 8. EFFECT OF TERMINATION OF EMPLOYMENT
(a) Retirement.
(i) The Committee, in its sole discretion, may cause all
outstanding PSAs held by a grantee to become immediately exercisable upon his
or her retirement.
(ii) Notwithstanding Section 5(f), PSAs exercisable upon
retirement of a grantee (whether due to Committee action or otherwise), shall
expire no later than (A) 36 months from the date of such grantee's retirement,
or (B) 12 months after the grantee's death, whichever occurs first, unless the
Committee determines otherwise.
(b) Death or Disability While Employed. Notwithstanding Section
5(f), upon the death or disability of a grantee prior to termination of
employment, all exercisable PSAs held by such employee shall expire no later
than 12 months after the employee's death or termination due to disability,
whichever occurs first, unless the Committee determines otherwise.
(c) Other Termination of Employment.
(i) Upon the termination of employment of a grantee other
than for death, disability or retirement ("Other Termination of Employment"),
then the Committee, in its sole discretion, may cause all outstanding
nonexercisable PSAs held by such grantee to become immediately exercisable.
(ii) Notwithstanding Section 5(f), PSAs exercisable upon
Other Termination of Employment (whether due to Committee action or
3
<PAGE> 4
otherwise), shall expire no later than six months after such Other Termination
of Employment, unless the Committee determines otherwise.
(d) Definitions and other Determinations.
(i) For purpose of this Section 8, "retirement"
means an optionee's voluntary termination of employment on a date which is on
or after the earliest date on which such optionee would be eligible for an
immediately payable benefit pursuant to the terms of the defined benefit
pension plan sponsored by the Company or a Subsidiary in which the optionee
participates. If the optionee does not participate in such a plan, the date
shall be determined as if the optionee participated in the Company's defined
benefit plan covering the majority of its non-bargaining employees in the
United States. With respect to non-employee officers, "retirement" means
termination of services as an officer at or after age 55.
(ii) For purposes of this Section 8, "disability"
shall be determined according to the definition of "total and permanent
disability," in effect at the time of determination, in the defined benefit
pension plan sponsored by the Company or a Subsidiary in which the optionee
participates. If the optionee does not participate in such a plan, the
definition shall be determined as if the optionee participated in the Company's
defined benefit plan covering the majority of its non-bargaining employees in
the United States.
(iii) For purposes of this Section 8, a grantee's
employment shall not be deemed to have terminated if the grantee obtains
immediate employment with an Affiliate of the Company, and termination from
such subsequent employment shall be deemed a termination from the Company,
unless the grantee obtains immediate reemployment with the Company or its
Subsidiaries. The term "Affiliate" shall include The Coca-Cola Company or any
corporation or business entity in which The Coca-Cola Company owns, directly or
indirectly, 25% or more of the voting stock or capital.
(iv) Whether military or other government service
or other leave of absence will constitute termination of employment shall be
determined in each case by the Committee in its sole discretion, with reference
to applicable labor and employment laws.
SECTION 9. NO RIGHTS AS A SHARE OWNER
A grantee or a transferee of any PSA pursuant to Section 5 shall have
no right as a share owner with respect to any Stock to which the PSA relates.
SECTION 10. ADJUSTMENT IN THE NUMBER OF PHANTOM STOCK AWARDS AND IN THE
EXERCISE PRICE
In the event there is a change in the number of outstanding shares of
Stock through the declaration of stock dividends or stock splits or through
recapitalization or merger or consolidation or combination of shares or
otherwise, the Committee shall make such adjustment, if any, as it may deem
appropriate in the number of PSAs available under the Plan, the number of
shares of Stock to which any outstanding PSA relates, the fair market value of
such shares on the date(s) of grant of the PSAs and/or the number of PSAs
outstanding. Any such adjustment may
4
<PAGE> 5
provide for the elimination, without payment therefor, of any fractional shares
to which any PSA otherwise might relate.
SECTION 11. AMENDMENTS, MODIFICATION AND TERMINATION OF THE PLAN
The Committee may terminate the Plan, in whole or in part, may suspend
the Plan, in whole or in part from time to time, and may amend the Plan from
time to time, including the adoption of amendments deemed necessary or
desirable to qualify the PSA under the laws of various countries (including tax
laws) or to correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any PSA granted thereunder.
No amendment or termination or modification of the Plan shall in any
manner affect any PSA theretofore granted without the consent of the grantee,
except that the Committee may amend or modify the Plan in a manner that does
affect PSAs theretofore granted upon a finding by the Committee that such
amendment or modification is in the best interest of grantees of outstanding
PSAs affected thereby.
The Plan shall terminate five years after the date of approval of the
Plan by the Committee. Such termination, however, shall not affect PSA's
already granted.
SECTION 12. GOVERNING LAW
The Plan and all determinations made and actions taken pursuant
thereto shall be governed by the laws of the State of Georgia and construed in
accordance therewith.
5
<PAGE> 1
EXHIBIT 10.12
COCA-COLA ENTERPRISES INC.
LONG-TERM INCENTIVE PLAN
(EFFECTIVE JANUARY 1, 1995)
SECTION 1. PURPOSE.
The purpose of the Long-Term Incentive Plan (the "Plan") is to advance
the interest of Coca-Cola Enterprises Inc. (the "Company") by providing key
management and sales employees with incentive to assist the Company in meeting
and exceeding its business goals.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by a Compensation Committee (the
"Committee") appointed by the Board of Directors of the Company (the "Board")
from among its members and shall be comprised of not fewer than two members who
shall be "outside directors" within the meaning of Section 162(m) and the
regulations thereunder, (including the transition rules of Proposed Treasury
Regulation Section 1.162-27) of the Internal Revenue Code of 1986, as amended.
The Committee may, subject to the provisions of the Plan, establish
such rules and regulations or take such action as it deems necessary or
advisable for the proper administration of the Plan. Each determination made or
action taken pursuant to the Plan, including interpretation of the Plan, shall
be final and conclusive for all purposes and upon all persons, including, but
not limited to, the Company, the Committee, the Board, officers, the affected
Participants (as defined in Section 3), and their respective successors in
interest.
In addition to such other rights of indemnification as they have as
directors or as members of the Committee, the members of the Committee shall be
indemnified by the Company against reasonable expenses (including, but not
limited to, attorneys' fees) incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal, to which they or
any of them may be a party by reason of any action taken or failure to act in
connection with the Plan, and against all amounts paid by them in settlement
thereof (provided such settlement is approved to the extent required by and in
the manner provided by the Certificate of Incorporation or Bylaws of the
Company relating to indemnification of directors) or paid by them in
satisfaction of judgment in any such action, suit, or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Committee member or members did not act in good faith and
in a manner he, she or they reasonably believed to be in or not opposed to the
best interest of the Company.
SECTION 3. ELIGIBILITY.
Cash awards ("Awards") may be made under this Plan to the chief
executive officer; the chief operating officer; senior vice presidents; vice
presidents, regional operations; region vice presidents/general managers;
corporate vice
1
<PAGE> 2
presidents; region vice presidents; division vice presidents/general managers;
area vice presidents; corporate directors, and, as such positions are defined
by the Compensation Committee, senior staff of the Company and its Subsidiaries
("Participants").
"Subsidiary" shall mean any corporation or other business organization
in which the Company owns, directly or indirectly, 25% or more of the voting
stock or capital during a Performance Period.
SECTION 4. PERFORMANCE GOAL CRITERIA.
Awards made under the Plan shall be paid solely on account of the
attainment of specified increases in cash operating profit ("COP"), as measured
on a corporate-wide basis, over the period of three consecutive calendar years
(the "Performance Period") beginning on January 1 of any year the Compensation
Committee designates as the beginning of a Performance Period for which an
Award shall be made under the Plan. For the purposes of the Plan, COP is
determined as operating income plus depreciation and amortization, normalized
for acquisitions, divestitures and other significant financial events.
SECTION 5. CALCULATION OF THE AWARD.
The Committee has established Award levels, described as percentages
by which a Participant's average annual base salary shall be multiplied, to
determine the amount of an Award payable upon the attainment of specified
increases in the corporate-wide COP. The Participant's average annual base
salary used in the calculation of an Award shall be the average of the base
salary in effect on the last day of each year of the three-year Performance
Period for which an Award is made ("Average Annual Base Salary").
Notwithstanding the preceding, the average annual base salary used to calculate
an Award paid to a Participant may not exceed such Participant's annual base
salary in effect on January 1 that constitutes the beginning of the Performance
Period for which the Award is being paid, increased by 33 1/3%.
The maximum percentages that may be used in the calculation of
Participants' Awards are determined according to a Participant's position as
follows: Chief Executive Officer or Chief Operating Officer, 80%; senior vice
president, 60%; vice president, regional operations, 50%; region vice
president/general manager, 50%; corporate vice president, 50%; region vice
president, 40%; division vice president/general manager, 40%; area vice
president, 40%; corporate director, 40%; and eligible senior staff, 30%.
SECTION 6. PAYMENT OF AWARD AND DEFINITIONS.
(i) Awards shall be paid in cash after the end of the Performance
Period in one or more installments, as determined by the Committee.
(ii) "Retirement" means a Participant's voluntary termination of
employment on a date which is on or after the earliest date on which such
Participant would be eligible for an immediately payable benefit pursuant to
the terms of the
2
<PAGE> 3
defined benefit pension plan sponsored by the Company or a Subsidiary in which
the Participant participates. If the Participant does not participate in such a
plan, the date shall be determined as if the Participant participated in the
Company's defined benefit plan covering the majority of its non-bargaining
employees in the United States.
(iii) "Disability" shall be determined according to the definition of
"total and permanent disability," in effect at the time of the determination,
in the defined benefit plan sponsored by the Company or a Subsidiary in which
the Participant participates. If the Participant does not participate in such a
plan, the definition shall be determined as if the Participant participated in
the Company's defined benefit plan covering the majority of its non-bargaining
employees in the United States.
SECTION 7. PRORATED AND PARTIAL AWARDS.
(i) If during the years to which the Plan applies, an employee is
hired or promoted into a position eligible for participation in the Plan, the
employee shall be eligible to receive a prorated Award for the period of
partial participation. To calculate the average base salary for a prorated
Award, each year's base salary shall be prorated based on the period in which
the employee was employed in the eligible position.
(ii) If a Participant is promoted from one position to another
position eligible for participation under the Plan, the Participant's Award
shall be prorated for the period of time the Participant was employed within
each position. The base salary in effect on the last day of each year shall be
included in the calculation of the Participant's average annual base salary,
irrespective of the changes of positions. Prorated awards shall be measured
according to the number of whole months in which a Participant was employed
within each position for which the Award is made.
(iii) If, within a Performance Period, a Participant transfers from a
position eligible for participation under the Plan to a position ineligible for
participation, a prorated Award shall be paid to such Participant for the
period of time the Participant was employed within the eligible position. The
base salary in effect on the last day of the Participant's employment in the
eligible position shall be included in the calculation of the Participant's
average annual base salary, irrespective of the change of positions. Prorated
awards shall be measured according to the number of whole months in which the
Participant was employed within one or more eligible positions.
(iv) Partial Awards shall be paid to a Participant whose employment is
terminated prior to the last day of the Performance Period if the reason for
such termination was the Participant's death, disability, or retirement (as
defined in Section 6). A partial Award paid to a Participant whose employment
is terminated on account of death or disability shall be paid in the year
following such Participant's termination of employment. A partial Award to a
Participant whose employment is terminated on account of retirement shall be
paid in the year following the end of the Performance Period for which the
Award is made and subject to the Committee's discretion described in Section 8,
shall be
3
<PAGE> 4
calculated on the basis of the increase in COP through the end of the
Performance Period. To determine the Average Annual Base Salary to be used in
calculating a partial Award, each year's base salary shall be prorated for the
period in which the Participant was employed, and the Average Annual Base
Salary shall be determined as the average for the years to which the Plan
applies preceding the year of termination.
(v) For purposes of this Section 7, a Participant's employment with
the Company will be deemed not to be a termination of employment if the
Participant's reason for termination with the Company is due to immediate
employment with any Affiliate; however, in such event, the Participant's Award
shall be subject to proration as if the Participant transferred to a position
within the Company that is ineligible for participation in the Plan. The term
"Affiliate" shall include The Coca-Cola Company or any corporation or business
entity in which The Coca-Cola Company owns, directly or indirectly, 25% or more
of the voting stock or capital.
SECTION 8. DISCRETION OF THE COMPENSATION COMMITTEE.
All Awards shall be made solely on the basis of the performance goals
set forth by the Committee pursuant to Section 4 and only in accordance with
the standards set forth in Section 5. The Committee shall have no authority to
increase the amount of an Award payable to a Participant which would otherwise
be due upon the attainment of the performance goal. The Committee shall,
however, have the authority to reduce or eliminate any Award under the Plan.
SECTION 9. COMMITTEE CERTIFICATION.
Prior to making an Award under the Plan, the Committee shall present
to the Board written certification that the performance-based goal of Section 4
has, in fact, been satisfied.
SECTION 10. AMENDMENTS, MODIFICATION AND TERMINATION OF THE PLAN.
The Board or the Committee may terminate the Plan in whole or in part,
may suspend the Plan in whole or in part from time to time, and may amend the
Plan from time to time to correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in the Awards made thereunder that
does not constitute the modification of a material term of the Plan, without
the approval of the share owners of the Company. No action shall be taken,
however, without the approval of the share owners of the Company unless the
Committee determines that the approval of share owners would not be necessary
to retain the benefits of Section 162(m) of the Internal Revenue Code of 1986,
as amended.
SECTION 11. GOVERNING LAW.
The Plan and all determinations made and actions taken pursuant
thereto shall be governed by the laws of the State of Georgia and construed in
accordance therewith.
4
<PAGE> 1
EXHIBIT 10.14
COCA-COLA ENTERPRISES INC.
EXECUTIVE MANAGEMENT INCENTIVE PLAN
(EFFECTIVE JANUARY 1, 1995)
SECTION 1. PURPOSE.
The purpose of the Executive Management Incentive Plan (the "Plan") is
to advance the interest of Coca-Cola Enterprises Inc. (the "Company") by
providing executive officers and managers of the Company with incentive to
assist the Company in meeting and exceeding its business goals.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by a Compensation Committee (the
"Committee") appointed by the Board of Directors of the Company (the "Board")
from among its members and shall be comprised of not fewer than two members who
shall be "outside directors" within the meaning of Section 162(m) and the
regulations thereunder, (including the transition rules of Proposed Treasury
Regulation Section 1.162-27) of the Internal Revenue Code of 1986, as amended.
The Committee may, subject to the provisions of the Plan, establish
such rules and regulations or take such action as it deems necessary or
advisable for the proper administration of the Plan. Each interpretation made
or action taken pursuant to the Plan shall be final and conclusive for all
purposes and binding upon all persons, including, but not limited to, the
Company, the Committee, the Board, the affected Participants (as defined in
Section 3), and their respective successors in interest.
In addition to such other rights of indemnification as they have as
directors or as members of the Committee, the members of the Committee shall be
indemnified by the Company against reasonable expenses (including, but not
limited to, attorneys' fees) incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal, to which they or
any of them may be a party by reason of any action taken or failure to act in
connection with the Plan, and against all amounts paid by them in settlement
thereof (provided such settlement is approved to the extent required by and in
the manner provided by the Certificate of Incorporation or Bylaws of the
Company relating to indemnification of directors) or paid by them in
satisfaction of a judgment in any such action, suit, or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Committee member or members did not act in good faith and
in a manner he, she or they reasonably believed to be in or not opposed to the
best interest of the Company.
SECTION 3. ELIGIBILITY.
Cash awards ("Awards") may be made under this Plan to persons who are
executive officers, in the senior executive band, and in the executive band of
the Company and its Subsidiaries ("Participants").
1
<PAGE> 2
"Subsidiary" shall mean any corporation or other business organization
in which the Company owns, directly or indirectly, 25% or more of the voting
stock or capital during any Performance Period.
SECTION 4. PERFORMANCE GOAL CRITERIA.
The Committee shall establish specific objective targets in relation
to the cash operating profit as budgeted by the Company ("budgeted COP") for
each performance unit of the Company, including targets at below 100% of
budgeted COP, over a period of a calendar year (the "Performance Period")
designated by the Compensation Committee as the Performance Period for which an
Award shall be made under this Plan. Awards made under the Plan shall be paid
solely on account of the attainment of these preestablished targets. For the
purposes of the Plan, COP shall be determined as operating income plus
depreciation and amortization, normalized for acquisitions, divestitures and
other significant financial events. For purposes of the Plan, performance units
shall be classified as corporate or region, or any combination thereof.
SECTION 5. CALCULATION OF AWARDS.
The Committee shall establish Award levels, described as percentages
by which a Participant's annual base salary shall be multiplied, to determine
the amount of an Award payable upon the attainment of specified targets of
budgeted COP. An Award paid to a Participant shall be calculated using the
annual base salary in effect on December 31 of the year for which the Award is
made. Notwithstanding the preceding sentence, the annual base salary used to
calculate an Award paid to a Participant may not exceed such Participant's
annual base salary in effect on January 1 of any Performance Period for which
the Award is made, increased by 10%.
The maximum percentage used in the calculation of Participants' Awards
are as follows: Chief Executive Officer and the Chief Operating Officer, 115%;
senior vice president, 95%; vice president, regional operations, 90%; region
vice president/general manager, 90%; corporate vice president-level 1, 90%;
corporate vice president-level 2, 80%; division vice president/general manager,
75%; regional vice president (human resources, finance, operations, and cold
drink), 70%; area vice president, 70%; corporate director, 70%.
SECTION 6. PRORATED AND PARTIAL AWARDS.
(i) A person hired or promoted into a position identified in Section 3
("Eligible Position") during a Performance Period shall receive a prorated
Award for the period of time the person was employed in an Eligible Position,
using the Participant's base salary in effect on December 31 of the Performance
Period for which the Award is made.
(ii) A Participant who is promoted from one Eligible Position to
another Eligible Position during a Performance Period shall receive an Award
that is prorated for the period of time the Participant was employed within
each Eligible Position, using the Participant's annual base salary in effect on
2
<PAGE> 3
December 31 of the Performance Period for which the Award is made.
(iii) A Participant who is not employed in an Eligible Position on the
last day of the Performance Period due to the Participant's transfer to a
position with the Company or a Subsidiary that is not an Eligible Position
shall receive an Award that is prorated for the period of time the Participant
was employed in an Eligible Position, using the Participant's annual salary on
the last day that the Participant is employed in that Eligible Position.
(iv) A Participant whose employment is terminated prior to the last
day of the Performance Period shall receive an Award that is prorated for the
period of time the Participant was employed in an Eligible Position if the
reason for such termination was the Participant's death, disability, or
retirement. For purposes of this Section 6, a Participant's employment with the
Company will be deemed not to be terminated if the Participant's reason for
termination was due to immediate employment with any Affiliate; however, such
Participant's Award shall be prorated as if the Participant transferred from an
Eligible Position to a position that is ineligible for participation in the
Plan. The term "Affiliate" shall include The Coca-Cola Company or any
corporation or business entity in which The Coca-Cola Company owns, directly or
indirectly, 25% or more of the voting stock or capital.
(v) For purposes of this Section 6:
(a) "Retirement" means a Participant's voluntary termination
of employment on a date which is on or after the earliest date on
which such Participant would be eligible for an immediately payable
benefit pursuant to the terms of the defined benefit pension plan
sponsored by the Company or a Subsidiary in which the Participant
participates. If the Participant does not participate in such a plan,
the date shall be determined as if the Participant participated in the
Company's defined benefit plan covering the majority of its
non-bargaining employees in the United States.
(b) "Disability" shall be determined according to the
definition of "total and permanent disability," in effect at the time
of the determination, in the defined benefit plan sponsored by the
Company or a Subsidiary in which the Participant participates. If the
Participant does not participate in such a plan, the definition shall
be determined as if the Participant participated in the Company's
defined benefit plan covering the majority of its non-bargaining
employees in the United States.
(c) "Prorated" means the determination of the amount of an
Award for partial participation that is measured according to the
nearest whole number of months in which a Participant was employed in
an Eligible Position(s) during the Performance Period for which the
Award is made.
SECTION 7. DISCRETION OF THE COMPENSATION COMMITTEE.
All Awards shall be made solely on the basis of the performance goals
set forth by the Committee pursuant to Section 4 and only in accordance with
the standards set forth in Section 5. The Committee shall have no authority to
3
<PAGE> 4
increase the amount of an Award payable to a Participant which would otherwise
be due upon the attainment of the performance goal. The Committee shall,
however, have the authority to reduce or eliminate any Award under the Plan.
SECTION 8. COMMITTEE CERTIFICATION.
The Committee shall present to the Board written certification that
the performance goal of Section 4 has, in fact, been satisfied prior to the
payment of any Award made under the Plan.
SECTION 9. AMENDMENTS, MODIFICATION AND TERMINATION OF THE PLAN.
The Board or the Committee may terminate the Plan in whole or in part,
may suspend the Plan in whole or in part from time to time, and may amend the
Plan from time to time to correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in the Awards made thereunder that
does not constitute the modification of a material term of the Plan, without
the approval of the share owners of the Company. No action shall be taken,
however, without the approval of the share owners unless the Committee
determines that the approval of share owners would not be necessary to retain
the benefits of Section 162(m) of the Internal Revenue Code of 1986, as
amended.
SECTION 10. GOVERNING LAW.
The Plan and all determinations made and actions taken pursuant
thereto shall be governed by the laws of the State of Georgia and construed in
accordance therewith.
4
<PAGE> 1
EXHIBT 10.30
CAN SUPPLY AGREEMENT
This Agreement is made this 20th day of November, 1995, between
AMERICAN NATIONAL CAN COMPANY, a Delaware corporation, with its principal
offices at 8770 W. Bryn Mawr Avenue, Chicago, Illinois 60631 ("ANC"), and
COCA-COLA ENTERPRISES INC., with its principal offices at P. O. Box 723040,
Atlanta, Georgia 31139-0049 ("Buyer"), and covers the manufacture and supply by
ANC to Buyer and the purchase by Buyer of two-piece aluminum beverage can
bodies and ends (herein collectively referred to as "cans" or "containers") of
the specifications and quantities referred to hereinbelow.
WHEREAS, the parties are desirous of entering into a long-term supply
agreement covering certain of Buyer's requirements of Containers; and
WHEREAS, the parties are desirous of establishing pricing for the
containers to be purchased and sold hereunder, with a floor and ceiling cost
for aluminum ingot ("Ingot Band") which will, over the term of this Agreement,
limit the extreme volatility which both parties have experiences in the recent
past with respect to can pricing and particularly with respect to aluminum
costs; and
WHEREAS, in order to accomplish this goal of predictability of
pricing, the parties are willing to commit themselves to purchase and sell, as
the case may be, the quantity of containers stated herein utilizing aluminum
covered by an Ingot Band, and the parties recognize that each of them has the
ability to protect itself against the fluctuation in the cost of aluminum above
or below the Ingot Band by purchasing the appropriate downside or upside
protection, which is available in the marketplace.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Description of Products. This Agreement relates to containers
of the specifications set forth on Exhibit A attached hereto, required by Buyer
at its can filling location(s) set forth on Exhibit B (and at any additional or
substitute facilities designated by Buyer where Buyer may fill cans).
2. Term. The initial term of this Agreement shall be five (5)
years commencing January 1, 1996 and terminating December 31, 2000. This
Agreement shall be automatically extended for one additional year beyond the
initial term (i.e., until December 31, 2001) if, during the period July 1, 1999
through December 31, 1999, the daily London Metal Exchange cash settlement
price for aluminum ingot plus the Midwest premium for that ingot (the "Midwest
Ingot Price") is outside of the Ingot Band (i.e., above the ceiling cost or
below the floor cost) referenced on Exhibit C attached hereto, on more than 75%
of the dates when the market is open.
<PAGE> 2
3. Volume.
(a) Buyer agrees to buy and ANC agrees to sell, in each calendar
year during the term of this Agreement, ## billion cans. Can bodies and ends
shall be purchased by Buyer and supplied by ANC in substantially equal volumes.
(b) The foregoing annual volume of containers to be purchased
hereunder may not be changed by Buyer during the terms of this Agreement
without the written consent of ANC although ANC will use its commercially
reasonable best efforts to accommodate year over year changes hereafter
requested by Buyer in its annual volume.
(c) ANC will not be required to provide more than ##% of Buyer's
annual band-priced volume hereunder in either of the following six month
periods throughout the term hereof: (i) April 1 through September 30; (ii)
October 1 through March 31.
(d) Buyer's annual forecasts of volume, provided for under
paragraph 6 below, shall each contain a breakdown of forecasted volumes for
each location set forth on Exhibit B (and any additional or substitute Buyer
filling locations), which forecasts shall remain in effect until adjusted by
Buyer upon reasonable advance notice to ANC; provided, however, that such
adjustments shall not affect Buyer's purchase commitment set forth in Paragraph
3(a) above.
4. Pricing
(a) Prices under this Agreement shall be established and adjusted
in accordance with the terms, conditions and limitations set forth on Exhibit C
attached hereto. In addition to the price adjustment mechanisms set forth on
Exhibit C, any changes in the specifications of containers supplied hereunder
may result in an upward or downward price adjustment.
(b) ANC will in no event be required to meet competitive band
formulas or other competitive offers driven by lower metal costs; however, and
notwithstanding the foregoing, ANC intends to be competitive with specific
offers not driven by lower metal costs.
(c) Buyer and ANC recognize and agree that fluctuations in the
price of aluminum may drive the spot price of aluminum above the ceiling price
or below the floor price of the Ingot Band, as such ceiling and floor prices
may be adjusted from time to time in accordance with Exhibit C. However, Buyer
and ANC agree to purchase and sell the quantities agreed to hereunder with
aluminum ingot costs no higher than such ceiling prices not lower than such
floor prices notwithstanding any such fluctuations. The parties recognize that
protection against any such market fluctuation is available to be purchased in
the marketplace.
(d) Buyer and ANC agree to share equally in any savings resulting
from reductions in the amount of metal used to make cans. Buyer's share of
such savings will be passed along to Buyer only after ANC has recovered the
cost of any expenditures made by it in connection with the implementation of
such metal reductions.
5. Payment Terms. Payment terms shall be: 1% 10, net 30 days.
Interest shall be assessed on all past-due amounts at the annual rate of two
(2%) percent above the prime rate of interest at the First National Bank of
Chicago, Chicago, Illinois.
##CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SEC
<PAGE> 3
6. Delivery. Buyer shall advise ANC, prior to October 31, of its
annual requirements of containers under this Agreement for the upcoming
calendar year (the "Forecasted Volume"). ANC shall not be required under any
circumstances to sell band priced containers to Buyer in excess of such
Forecasted volume. If the Forecasted Volume is in excess of or less than the
volume referred to in subparagraph 3(a) above, ANC shall only be required to
use its commercially reasonable best efforts to provide such excess to Buyer or
accommodate such shortfall. In the event that the Forecasted Volume is in
excess of the volume referenced in subparagraph 3(a), ANC shall first attempt
to secure metal within the then current bank pricing range. If ANC is
unsuccessful in securing band pricing for such excess, then ANC shall so advise
Buyer and Buyer shall notify ANC whether ANC should purchase metal to satisfy
such excess requirements. If Buyer requests ANC to purchase such metal, the
metal price shall be based on the Midwest Ingot Price on the date ANC purchases
the metal.
7. Effect of Termination. Upon termination of this Agreement,
for any reason, Buyer shall accept all completed, specially fabricated or
lithographed containers and related items previously ordered, acquired or
committed for by ANC in reasonable quantities in anticipation of Buyer's normal
can requirements.
8. Warranties, Claims and Limitation of Liability.
(a) ANC hereby warrants to Buyer that the containers to be
manufactured and sold to Buyer hereunder shall be free from defects in
workmanship and materials, and shall conform to the specifications set forth in
Exhibit A attached hereto. EXCEPT AS EXPRESSLY STATED ABOVE, THERE ARE NO
OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED INCLUDING, BUT NOT LIMITED TO,
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
(b) ANC shall not be liable to Buyer or to any other person where
the claimed damages result from: (1) Buyer's faulty assembly or closure of the
can body and loose end; (2) rust or outside corrosion on containers occurring
after Buyer's receipt, except when caused by ANC's faulty workmanship or
imperfect materials; (3) the failure of Buyer (or any other party excluding ANC
from time to time having custody or control of allegedly defective goods) to
exercise reasonable care in conveying, warehousing, using, packing, handling,
distributing or storing filled or unfilled containers; or (4) the failure of
empty or filled containers exported or use in foreign countries unless a
special warranty has been specifically approved by ANC to cover such exported
containers.
(c) Seller shall give immediate consideration to settlement of
Buyer's claims, but in no event shall Seller be liable on any claim unless
notice thereof is received by ANC promptly following Buyer's discovery of an
alleged defect in a container.
(d) ANC's liability to Buyer hereunder shall be limited to Buyer's
cost of the defective containers, cost of the contents of the containers lost
as a direct result of the defect, and the reasonable cost of recovery and
disposition of defective containers (but as to the latter, only to the extent
reasonably required). ANC shall also be responsible for claims by third
parties (including governmental entities) to the extent arising out of a
container defect provided that ANC is given adequate notice of such claim and
the opportunity to defend such claim by counsel of its own choosing.
<PAGE> 4
9. Force Majeure. Except for the payment of money due hereunder,
ANC and Buyer shall be excused for failure to perform under this Agreement
where such failure results from circumstances beyond the affected party's
reasonable control including, without limitation, such circumstances as fire,
storm, flood, earthquake, strikes, work stoppages or slowdowns, delay or
failure of transportation or suppliers, acts of the public enemy, acts of God
or acts, regulations, priorities or actions of the United States, a state or
any local government or agents or instrumentalities thereof.
10. Notices. All notices, requests or other communications shall
be in writing, and shall be deemed given when delivered personally or deposited
in the United States mail, postage prepaid, or to a courier service and
properly addressed to Buyer at: P. O. Box 723040, Atlanta, GA 31139-0040,
Attention Raymond J. Malone, Director of Purchasing and Lowry F. Kline, General
Counsel and to ANC at: 870 W Bryn Mawr Ave., Chicago, IL 60631, Attention:
Sales Department, or to such other address as either party may, from time to
time, designate to the other in writing.
11. Assignability. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the parties hereto, including,
without limitation, a subsidiary, a purchaser, transferee or successor by
merger of substantially all of the business or assets of either Buyer or ANC.
Buyer hereby agrees to require the purchase or transferee of all or any portion
of its can filling operations to assume that portion of this requirements
contract that relates to the portion of its operations being sold or
transferred.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
AMERICAN NATIONAL CAN COMPANY COCA-COLA ENTERPRISES INC.
By: /s/JAMES R. TURNER By: /s/ HENRY A. SCHIMBERG
------------------------- ----------------------
James R. Turner Henry A. Schimberg
Title: Senior Vice President Title: President and Chief Operating
Sales Officer
<PAGE> 5
EXHIBIT A
12 Ounce Aluminum Can Body
- 4 prints on metal
202 Diameter Aluminum Stay-On-Tab Ends
Cans must meet or exceed specifications, performance and quality criteria as
mandated by The Coca-Cola Company as they may change from time to time.
<PAGE> 6
EXHIBIT B
Buyer's Filling Locations(s)
----------------------------
1. Downey, CA
2. College Park, GA
3. Houston, TX
4. Eagan, MN
5. Baltimore, MD
6. San Leandro, CA
7. Orlando, FL
8. Cincinnati, OH
9. Lenexa, KS
10. Twinsburg, OH
11. Ft. Worth, TX
12. Phoenix, AZ
13. Hollywood, FL
14. West Memphis, AR
15. Bellevue, WA
16. Needham Heights, MA
17. Dallas, TX
18. Cleveland, TN
19. Jacksonville, FL
20. Detroit, MI
21. Sandston, VA
22. Denver, CO
23. Mattoon, IL
24. Gretna, LA
25. Wilsonville, OR
26. Maryland Heights, MO
27. San Diego, CA
28. Grand Rapids, MI
29. Austin, TX
30. Little Rock, AR
31. Flint, MI
32. Honolulu, HI
33. Wichita, KS
34. McAllen, TX
<PAGE> 7
EXHIBIT C
MECHANISMS FOR ADMINISTRATION OF PRICING OF CONTAINERS
1. Can Price Components. Prices of cans to be purchased and sold
hereunder will be determined by reference to changes in the following 3 cost
components:
(a) Cost of aluminum ingot ("ingot cost");
(b) Cost of conversion of ingot into can, end or tab sheet ("ingot
conversion cost"); and
(c) Cost of conversion of can, end and tab sheet into finished
container ("can sheet conversion cost").
2. Initial Can Price. Effective January 1, 1996, the base price for cans
to be supplied to you under this agreement will be $## 12 ounce cans and 202
ends. This price is based upon an ingot cost of $## per pound, an ingot
conversion cost of $## per pound for 0.0112 gauge body stock, $## per pound for
0.0086 gauge clear soft drink end stock and $## per pound for tab stock. This
base price will be adjusted as of January 1, 1996 to reflect any changes in the
above ingot cost and ingot conversion cost assumptions as follows: the ingot
cost will be determined based upon the average of the daily Platt's Metal week
transaction prices (i.e. the straight arithmetic average official London Metal
Exchange (LME) cash settlement prices plus the Midwest Premium on such prices)
during the period June 1, 1995 through November 30, 1995. The ingot conversion
cost is not yet set but is expected to change by about $0.02 per pound to cover
increases in the cost of coating materials on ends and tabs only. Changes by
Buyer to the specifications set forth in Exhibit A prior to January 1, 1996 may
also result in an adjustment to the base price.
An example of the January 1, 1996 base price calculation is set forth
on Attachment 1.
3. Adjustments to Can And End Pricing Within The Band. Prices for all
Containers (cans and ends) covered by this Agreement will be adjusted every six
months on April 1 and October 1, with the first such adjustment taking place on
April 1, 1996. These price adjustments will be driven by changes in the cost
of the three components described in paragraph 1 above as follows:
(a) Price adjustments reflecting changes in ingot cost will be
determined by reference to the average of the Platt's Metal Week transaction
prices (i.e., the straight arithmetic average official London Metal Exchange
cash settlement prices plus the Midwest Premium on such prices) during a
six-month period prior to the particular adjustment date (the Average Ingot
Price). For the April 1 adjustment date, the six-month average period will be
between September 1 and February 28 immediately preceding such April 1 date.
For the October 1 adjustment date, the averaging period will be from March 1 to
August 31 immediately preceding such October 1 date (i.e., for the April 1,
1996 adjustment date, the
##CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SEC
<PAGE> 8
relevant averaging period will be September 1, 1995 to February 28, 1996 and
for the October 1, 1996 adjustment date, the relevant averaging period will be
from March 1, 1996 to August 31, 1996). An example of the impact of an ingot
cost change on the can price is shown in Attachment 2.
Notwithstanding the foregoing and subject to the adjustments described
below, ingot cost, inclusive of the Midwest Premium for such ingot, will never
be higher than a ceiling cost of $## per pound or lower than a floor cost of
$## per pound (the "ingot band"). Such ingot band will remain fixed until
April 1, 1997, at which time such band will be adjusted in the amount of
one-half of the percentage change in the monthly average Producer Price Index
for Intermediate Materials, Supplies and Components as reported in Table 1 of
the monthly "Summary Data From the Producer Price Index News Release"
(hereinafter called the Producer Price Index) for the period January 1, 1996
through December 31, 1996 over the average for the January 1, 1995 through
December 31, 1995 period. The ingot band will be similarly adjusted on April 1
of 1998, 1999, 2000 and 2001 if this Agreement is extended in accordance with
the term of this Agreement. All adjustments will be based on the changes in
the Producer Price Index for the calendar year immediately preceding the
adjustment date. An example of a calculation of the ingot band adjustment is
set forth below:
EXAMPLE OF CALCULATION OF INDEX CHANGE:
Index Average for the period 102.0 (Straight average of each monthly
January 1, 1995 to December 31, index for period January 1, 1995
1995 to December 31, 1995)
Index Average for the period 104.0 (Straight average of each monthly
January 1, 1996 to December 31, index for period January 1, 1996
1996 to December 31, 1996)
Percentage Change 1.96%
Half of a Percentage Change 0.98%
EFFECT OF ABOVE INDEX CHANGE ON FLOOR AND CEILING INGOT COSTS:
Ingot Cost Per Pound Prior Effective April 1, 1997
- -------------------- ----- ------------------------
Floor Price ## x 1.0098 = ##
Ceiling Price ## x 1.0098 = ##
(b) Price adjustments reflecting changes in both the ingot
conversion cost and the can sheet conversion cost will not be implemented until
April 1, 1997. At that time, increases in such conversion costs will be no
more than one-half of the year over year Producer Price Index increase
described in paragraph 3(a) above with reference to adjustments to the ingot
band. This adjustment procedure will be repeated on April 1, 1998, 1999, 2000,
and 2001 if this contract is extended for an additional year. An example of
the impact of conversion cost changes on the can price is set forth in
##CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SEC
<PAGE> 9
Attachment 3.
(c) The parties agree that in the event of significant changes in
the cost of items which are not reflected in the Producer Price Index, the
parties will meet to discuss making appropriate adjustments for these items.
(d) All price adjustments reflecting changes in costs shall be
supported by detailed documentation reasonably acceptable to Buyer.
<PAGE> 10
ATTACHMENTS 1 - 4 TO EXHIBIT C##
## CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SEC
<PAGE> 1
<TABLE>
EXHIBIT 11
EARNINGS PER SHARE
COCA-COLA ENTERPRISES INC.
(In millions except per share data)
<CAPTION> 1995 1994 1993
----------------- ----------------- -----------------
Fully Fully Fully
Primary Diluted Primary Diluted Primary Diluted
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Income:
Net income (loss) $ 82 $ 82 $ 69 $ 69 $ (15) $ (15)
Preferred stock dividend
requirements 2 2 2 2 - -
----- ----- ------ ------ ------ ------
Net income (loss) applicable
to common share owners $ 80 $ 80 $ 67 $ 67 $ (15) $ (15)
===== ===== ====== ====== ====== ======
Number of Shares:
Weighted average
shares outstanding (A) 129 129 130 130 129 129
===== ===== ====== ====== ====== ======
Per Share Data (B):
Net income (loss) $0.63 $0.63 $ 0.53 $ 0.53 $(0.11) $(0.11)
Preferred stock dividends 0.01 0.01 0.01 0.01 - -
Net income (loss) applicable
to common share owners 0.62 0.62 0.52 0.52 (0.11) (0.11)
(A) Weighted average shares as presented are unchanged for the effect
of incremental shares related to outstanding stock options.
(B) Primary and fully diluted earnings per share do not differ from
simple earnings per share by more than 3%; accordingly, disclosure
on the face of the statement of operations of earnings per share
reflects only simple earnings per share.
</TABLE>
<PAGE> 1
<TABLE>
EXHIBIT 12
COMPUTATIONS OF RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
COCA-COLA ENTERPRISES INC.
(In millions except ratios)
<CAPTION> Fiscal Year
--------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Computation of Earnings:
Earnings (loss) from continuing
operations before income taxes
and cumulative effect of
accounting changes $145 $127 $ 55 $(12) $(92)
Add:
Interest expense 319 314 332 315 216
Amortization of
capitalized interest 1 1 1 1 1
Amortization of debt
premium/discount 12 2 3 2 3
Interest portion of rent expense 10 9 8 8 8
---- ---- ---- ---- ----
Earnings as adjusted $487 $453 $399 $314 $136
==== ==== ==== ==== ====
Computation of Fixed Charges
and Combined Fixed Charges
and Preferred Stock Dividends:
Interest expense $319 $314 $332 $315 $216
Capitalized interest 4 3 1 1 2
Amortization of debt
premium/discount 12 2 3 2 3
Interest portion of rent expense 10 9 8 8 8
---- ---- ---- ---- ----
Fixed Charges 345 328 344 326 229
Preferred stock dividends (a) 3 3 - - 9
---- ---- ---- ---- ----
Combined Fixed Charges and
Preferred Stock Dividends $348 $331 $344 $326 $238
==== ==== ==== ==== ====
Ratio of earnings to fixed
charges 1.41 1.38 1.16 (b) (c)
==== ==== ==== ==== ====
Ratio of earnings to combined
fixed charges and preferred
stock dividends 1.40 1.37 1.16 (b) (c)
==== ==== ==== ==== ====
(a) Preferred stock dividends have been increased to an amount representing
the pretax earnings which would be required to cover such dividend
requirements.
(b) Earnings for 1992 were insufficient to cover fixed charges and combined
fixed charges and preferred stock dividends by $12 million.
(c) Earnings for 1991 were insufficient to cover fixed charges and combined
fixed charges and preferred stock dividends by $93 million and
$102 million, respectively.
</TABLE>
<PAGE> 1
EXHIBIT 13
COCA-COLA ENTERPRISES INC.
MANAGEMENT'S FINANCIAL REVIEW
Coca-Cola Enterprises Inc. ("the Company") is the world's largest marketer,
distributor, and producer of bottle and can beverage products of
The Coca-Cola Company. In the United States, we operate through exclusive
and perpetual rights in franchise territories containing approximately 54%
of the population and generating approximately 56% of all bottle and can
product sales of The Coca-Cola Company. We operate in 38 states, the
District of Columbia, the U. S. Virgin Islands, the islands of Tortola and
Grand Cayman, and the Netherlands.
OBJECTIVES AND STRATEGIES FOR BUILDING SHARE-OWNER VALUE
We are excited about the Company's solid 1995 operating performance and
the numerous opportunities for development and growth. Our greatest
challenge is maintaining and accelerating our current operating momentum
while directing our cash resources toward profitable high-return projects.
To ensure a continued focus on building share-owner value, we have clearly
defined operating and financial objectives and strategies.
Our primary operating objective is to increase long-term operating cash flows
through profitable increases in sales volume. We met our objective during
1995 despite our competitive and increasingly complex industry, and the
challenge of offsetting significant packaging cost increases.
- 18 -
<PAGE>
We achieved our operating objective through the successful implementation and
execution of the following strategies:
- Creating and executing innovative and superior marketing programs at
the local level.
- Balancing volume growth with improved margins and sustainable
increases in market share.
- Developing profitable business partnerships with our customers.
- Increasing our investment in high-profit, high-volume distribution
channels such as cold drink.
- Providing financial incentives to our employees which increase their
focus on enhancing share-owner value.
Our primary financial objective is to deliver a superior return on investment
to our share owners. Our year-end stock price represented a 49% increase from
year-end 1994 and a compound annual growth rate of 30% since 1992. We
achieved this objective during 1995 through the successful implementation and
execution of the following strategies:
- Maintaining a capital structure which maximizes our financial
flexibility, given current investment opportunities.
- Identifying and acquiring territories that result in long-term value.
- Allocating resources appropriately between capital expenditures,
infrastructure, share repurchases, acquisitions, and debt repayment.
SHARE-OWNER PARTNERSHIP IN OUR OBJECTIVES
Employees of the Company and The Coca-Cola Company own approximately 60% of
our outstanding common shares. 90% of our total revenues come from products
of The Coca-Cola Company. Four current or former executives of
The Coca-Cola Company serve on our fourteen-member Board of Directors, one as
our chairman, complementing other accomplished individuals, all elected by
our share owners.
- 19 -
<PAGE>
MANAGEMENT'S FINANCIAL REVIEW
Management's Financial Review should be read in conjunction with the
Company's consolidated financial statements and the accompanying footnotes.
References are made in the following discussions to specific footnotes for
additional information when considered necessary.
OPERATIONS REVIEW - 1995
In the opinion of management, the most meaningful comparison of operating
results between 1995 and 1994 excludes the 1995 impact of our gain on the
sale of our ownership interest in the Coca-Cola Bottling Company of the
Mid South ("Mid South") and includes the effect of our acquisition of Wichita
Coca-Cola Bottling Company ("Wichita") as if it occurred on January 1, 1994
(refer to Note 2). "Comparable" results in this section refer to the results
of operations adjusted for these items.
Operating income and earnings per share increased 6% and 19%, respectively,
over 1994 levels. This operating income growth includes an increase of 2%
resulting from the acquisition of Wichita. With strong volume growth and
record net revenues per case increases, we offset the effect on the Company
of the most significant cost increase affecting our industry in the past
10 years. Although gross profit and operating margins decreased, our
operating performance, combined with favorable net interest expense as a
percent of net revenues and a lower effective tax rate, produced growth in
earnings per share applicable to common share owners of 11%, excluding the
gain on Mid South.
Cash operating profit (operating income before the deduction for depreciation
and amortization) is one of the key standards by which management measures
the Company's performance. This measurement is provided as a supplement,
and not as an alternative, to operating income as an indicator of operating
performance, and cash flows from operating activities as a measure of
liquidity, each as defined by generally accepted accounting principles.
Actual 1995 cash operating profit increased 11% over 1994, with comparable
results increasing 9%. We believe we will achieve comparable cash operating
profit growth of at least 8% in 1996. We plan to achieve this objective
through the successful implementation of our operating strategies.
Net operating revenues are comprised principally of wholesale sales to
retailers which account for approximately 96% of our net revenues and gross
profit. Reported net operating revenues for 1995 increased 13% over 1994,
while comparable net operating revenues increased 11% over 1994. The
increase in comparable net operating revenues results primarily from a 4 1/2%
increase in bottle and can physical case sales volume and a 7% increase in
net revenues per case.
Volume growth in 1995 reflected solid growth in core brands such as Coca-Cola
classic and diet Coke, partially due to consumer demand for the 20-ounce
contour bottle, and double-digit growth in Sprite. Noncarbonated beverages
also contributed to 1995 volume growth as Fruitopia, Powerade, and Nestea
products all grew by double-digit rates. In total, noncarbonated beverages
were 5% of total cases sold. We expect continued bottle and can volume
growth in 1996 close to the full-year comparable growth of 4 1/2% achieved in
1995. We also experienced growth of 8% in comparable fountain gallon volume
when compared to 1994.
Net revenues per case growth in 1995 was the largest in the Company's history.
This growth resulted from the significantly higher selling prices we
established to offset aluminum can cost increases and to achieve our cash
operating profit growth objective. Our 1996 strategies for net revenues per
case increases include net selling price increases and effective management
of our product, package, and distribution channel mix. Because of a more
favorable cost environment anticipated in 1996, we do not expect the
significant net revenue per case growth achieved in 1995. Reflecting our
decentralized organization and operating philosophy, these net revenues per
case dynamics will be managed locally based on individual market conditions
and opportunities.
Cost of wholesale sales per physical case for 1995 increased 10% over 1994.
Aluminum can cost increases which went into effect January 1, 1995 were the
major cause of the significant cost of sales increases and gross margin
decreases. Because of declining aluminum costs, we do not expect significant
cost of sales increases in 1996.
- 20 -
<PAGE>
COCA-COLA ENTERPRISES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions except per share data)
1995 1994 1993
------ ------ ------
Net Operating Revenues $6,773 $6,011 $5,465
Cost of sales (purchases from The
Coca-Cola Company -- $1,828, $1,683,
and $1,392, respectively) 4,267 3,703 3,372
------ ------ ------
Gross Profit 2,506 2,308 2,093
Selling, general, and administrative
expenses 2,038 1,868 1,708
------ ------ ------
Operating Income 468 440 385
Interest expense, net 326 310 328
Other nonoperating deductions, net 6 3 2
Gain from sale of ownership interest in
bottling operation 9 - -
------ ------ ------
Income Before Income Taxes 145 127 55
Income taxes:
Expense excluding rate change 63 58 30
Rate change - federal - - 40
------ ------ ------
Net Income (Loss) 82 69 (15)
Preferred stock dividends 2 2 -
------ ------ ------
Net Income (Loss) Applicable
to Common Share Owners $ 80 $ 67 $ (15)
====== ====== ======
Average Common Shares Outstanding 129 130 129
====== ====== ======
Net Income (Loss) Per Share Applicable
to Common Share Owners $ 0.62 $ 0.52 $(0.11)
====== ====== ======
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
- -----------------------------------------------------------------------------
Selling, general, and administrative expenses for 1995 increased 9% from 1994,
primarily as a result of increased case sales volume, acquisitions during
1995, and accelerated cost recognition of $25 million resulting from
shortening the estimated vesting period of stock awards and stock options in
the fourth quarter of 1995 (refer to Note 9). This accelerated vesting was
triggered by the favorable performance of the Company's stock during the
fourth quarter of 1995. Selling, general, and administrative expenses as a
percentage of sales decreased from 31.1% in 1994 to 30.1% in 1995.
Interest expense increased in 1995 as compared to 1994, reflecting an
increased 1995 debt balance resulting primarily from the Wichita acquisition
and share repurchase activity, and a higher weighted average borrowing rate
of 7.5% during 1995 as compared to 7.2% during 1994. We anticipate that net
interest expense will not change materially in 1996 from that of 1995,
excluding the effect of the Ouachita acquisition in addition to any other
acquisitions which may occur in 1996 (refer to "Pending Transactions and
Events" discussion later in this Review).
Income taxes decreased as a percentage of earnings before income taxes in
1995, reflecting a lower effective tax rate of 44% for 1995 as compared to
46% for 1994. The change in the effective tax rate was principally due to
the level of pretax income in each period relative to nondeductible expenses.
We do not currently anticipate that the amount of nondeductible expenses in
1996 will change significantly from that of 1995.
- 21 -
<PAGE>
CASH FLOW AND LIQUIDITY REVIEW - 1995
Capital Resources
In addition to our operating cash flows, we believe capital resources
available to us are more than sufficient to fund our capital expenditure and
working capital requirements, scheduled debt payments, interest and income
tax obligations, dividends to our share owners, and plans for share
repurchases. We believe we have significant debt and equity capacity and
market opportunities available to us, including additional bank financings
and the public debt and equity markets, as sources of financing. We also
believe our debt and equity capacity and market opportunities are sufficient
to fund anticipated acquisitions.
We have $1.5 billion of registered debt securities available for issuance
under a shelf registration. We satisfy seasonal working capital needs and
other financing requirements with short-term borrowings under our commercial
paper program. Our commercial paper program is supported by a revolving bank
credit agreement maturing in December 1999 and two short-term credit
facilities, all aggregating $1.2 billion. An aggregate $777 million of
commercial paper borrowings supported by these agreements were outstanding at
December 31, 1995. The Company intends to continue to refinance borrowings
under its commercial paper program with long-term financings.
Cash Operating Activities
Net cash provided by operating activities in 1995 increased 2% over 1994,
primarily resulting from a higher net income level in 1995 offset by working
capital changes. The increase in depreciation expense in 1995 results from
increased capital spending and the Wichita acquisition. The increase in
amortization expense in 1995 primarily reflects: (i) franchise amortization
resulting from the Wichita acquisition, (ii) expense related to additional
restricted stock grants, and (iii) accelerated cost recognition of stock
awards and stock options (refer to Note 9).
During 1987, the Company filed elections under Section 338 of the Internal
Revenue Code relating to various bottling companies acquired in 1986. Tax
operating loss carryforwards (which can be used to reduce future taxable
income) aggregating $721 million as of December 31, 1995 have arisen
principally from tax deductions for accelerated franchise amortization for
tax purposes. Because of declining deductions from franchise amortization
and anticipated future increases in earnings, the Company expects its cash
income tax obligations to increase significantly beginning in 1996. We
estimate 1996 cash tax payments will be approximately $100 million; however,
this estimate will vary based on actual levels of future earnings and changes
in future tax deductions resulting from business activities, including
acquisitions.
Investing Activities
Net cash used in investing activities in 1995 increased 66% over 1994,
primarily as a result of the acquisition of Wichita for $150 million in cash
(net of cash acquired) in January 1995 (refer to Note 2). Later in 1995, an
additional $7 million in purchase price was paid to the Wichita sellers as a
result of tax benefits accruing to the Company. Also in January 1995, we
sold our 50% ownership interest in Mid South for $17 million in cash
resulting in a pretax gain of $9 million ($0.04 per common share after-tax)
in 1995 (refer to Note 2). Capital expenditures in 1995 increased 37% over
1994 primarily because of the expansion of our cold drink program. We expect
1996 capital expenditures will be approximately $550 million. We expect to
finance our capital expenditure requirements with funds generated from
operating activities.
In the past ten years, the Company has acquired a number of bottling
companies for an aggregate purchase price of $5.7 billion. Our sources of
capital allow us to maintain flexibility for acquisitions that offer
opportunities to implement our operating strategies and to achieve an
acceptable rate of return. We will continue to purchase domestic and
international bottling operations when such opportunities become available
and are expected to increase long-term share-owner value.
Financing Activities
We used $38 million for financing activities in 1995 compared to $246 million
in 1994, due principally to decreased debt repayments in 1995. Stock options
exercised provided cash of $10 million in 1995 compared to $15 million in
1994. We repurchased common stock in 1995 under our current share repurchase
program at a cost of $41 million compared to $28 million during 1994
(refer to Note 8). Other financing activity primarily includes the return of
a collateral deposit related to interest rate swaps, and changes in the
market value of Eurodollar futures contracts (refer to Note 5).
- 22 -
<PAGE>
COCA-COLA ENTERPRISES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
1995 1994 1993
------ ------ ------
Cash Flows From Operating Activities
Net income (loss) $ 82 $ 69 $ (15)
Adjustments to derive net cash provided
by operating activities:
Depreciation 318 282 254
Amortization 211 179 165
Deferred income tax provision 22 46 60
Gain from sale of ownership interest
in bottling operation (9) - -
Net changes in current assets and
current liabilities (12) 58 22
Additional nonoperating cash flows 32 (3) 7
------ ------ ------
Net cash provided by operating
activities 644 631 493
------ ------ ------
Cash Flows From Investing Activities
Capital expenditures (501) (366) (353)
Fixed asset dispositions 16 18 19
Investments in bottling and other
businesses, net of cash acquired ($260
million was paid to The Coca-Cola
Company for bottling operations
in 1993) (158) (20) (287)
Sale of ownership interest in bottling
operations 17 - -
Additional investing activities 6 (6) -
------ ------ ------
Net cash used in investing activities (620) (374) (621)
------ ------ ------
Cash Flows From Financing Activities
Issuance of debt 301 355 822
Settlements of debt obligations (315) (562) (668)
Stock purchases for treasury (41) (28) (17)
Cash dividend payments on common and
preferred stock (7) (7) (6)
Exercise of employee stock options 10 15 2
Additional financing activities 14 (19) -
------ ------ ------
Net cash (used in) provided by
financing activities (38) (246) 133
------ ------ ------
Net (Decrease) Increase in Cash and Cash
Equivalents During Each Year (14) 11 5
Cash and cash equivalents at beginning
of each year 22 11 6
------ ------ ------
Cash and Cash Equivalents at End
of Each Year $ 8 $ 22 $ 11
====== ====== ======
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
- ---------------------------------------------------------------------------
- 23 -
<PAGE>
FINANCIAL POSITION - 1995
Assets
The increase in trade accounts receivable results primarily from increased
revenues in December 1995 when compared to December 1994. Amounts due from
The Coca-Cola Company at December 31, 1995 represent $19 million of amounts
receivable for marketing support payments and are net of $13 million in
amounts payable for purchases of ingredients. The increase in machinery and
equipment results principally from an increased rate of cold drink equipment
placement. At December 31, 1995, the Company has $130 million of current
deferred tax assets principally resulting from the anticipated utilization of
net operating losses to reduce taxable income. The decrease in franchise and
other noncurrent assets results primarily from amortization of franchise
assets, offset by an increase of $140 million associated with franchise
assets purchased in the Wichita acquisition.
Liabilities and Equity
Amounts due The Coca-Cola Company at December 31, 1994 represent amounts
payable for purchases of ingredients and are net of $17 million in amounts
receivable for marketing support payments. Total long-term debt increased
during 1995 reflecting the issuance of (i) a net $250 million of 8.35% Zero
Coupon Notes and $11 million of related discount amortization and
(ii) $50 million of Medium-Term Notes. This increase was offset by (i) a net
decrease of $51 million in commercial paper and (ii) a scheduled maturity
payment of $250 million of 8.35% Notes. The increase in the Company's total
equity in 1995, including deferred tax liabilities, reduced our net debt to
total capital ratio from approximately 56% to 55% at December 31, 1994 and
1995, respectively. Deferred income taxes increased $148 million in 1995
when compared to 1994, primarily as a result of the classification of the
benefit associated with anticipated utilization of net operating losses in
1996 as a current deferred tax asset. The favorable change in the cumulative
effect of currency translations results from the continued strength of the
Dutch florin versus the U.S. dollar during 1995.
Environmental Contingencies
The Company incurs costs for the required removal, replacement, or
modification of underground fuel storage tanks, and any required soil and
groundwater remediation resulting from leaking tanks. Anticipated
expenditures for tank removal, replacement, and remediation will aggregate
approximately $30 million through 2002. Ongoing environmental compliance
costs, including routine maintenance, monitoring, and other similar costs,
are not significant. The Company also incurs costs in connection with other
environmental programs covering the discharge of materials and waste water
treatment and expects to spend an aggregate $11 million over the next two
years under these programs. Expenditures after the next two years under these
programs cannot be estimated. Expenditures for environmental programs
aggregated $6 million, $12 million, and $9 million in 1995, 1994, and 1993,
respectively. The Company believes that any amount it may be required to pay
in excess of amounts recorded or disclosed above would not have a material
adverse effect on its financial condition, cash flows, or results of
operations.
The Company has been named as a potentially responsible party ("PRP") for the
costs of remediation of hazardous waste at federal or state Superfund sites.
The Company believes that any ultimate Superfund liability will not have a
material effect on its financial condition, cash flows, or results of
operations. At December 31, 1995, there were four federal sites where the
Company's involvement or liability as a PRP was unresolved. In addition,
there were 16 other federal and five state sites at which it has been
concluded that the Company has no responsibility, ultimate liability amounts
would be less than $100,000, or payments made to date by the Company are
sufficient to satisfy all liability of the Company. Under current law, the
Company's liability for clean-up of Superfund sites may be joint and several
with other PRPs, regardless of the extent of the Company's use in relation to
other users. As to any site where the Company may be liable, the Company has
determined that there are other PRPs who are financially solvent as well, and
that any hazardous waste deposited by the Company is minimal compared to
amounts deposited by financially solvent PRPs.
- 24 -
<PAGE>
COCA-COLA ENTERPRISES INC.
CONSOLIDATED BALANCE SHEETS
(In millions except share data)
December 31,
-----------------------
1995 1994
------ ------
ASSETS
Current
Cash and cash equivalents,
at cost approximating market $ 8 $ 22
Trade accounts receivable, less
reserves of $33 and $34 million,
respectively 510 467
Amounts due from The Coca-Cola Company 6 -
Inventories:
Finished goods 151 170
Raw materials and supplies 74 66
------ ------
225 236
Current deferred income taxes 130 -
Prepaid expenses and other current
assets 103 85
------ ------
Total Current Assets 982 810
Property, Plant and Equipment
Land 182 170
Buildings and improvements 700 661
Machinery and equipment 2,774 2,390
------ ------
3,656 3,221
Less allowances for depreciation 1,587 1,352
------ ------
2,069 1,869
Construction in progress 89 94
------ ------
2,158 1,963
Franchise and Other Noncurrent Assets 5,924 5,965
------ ------
$9,064 $8,738
====== ======
LIABILITIES AND SHARE-OWNERS' EQUITY
Current
Accounts payable and accrued expenses $ 796 $ 795
Amounts due The Coca-Cola Company - 3
Current maturities of long-term debt 63 291
------ ------
Total Current Liabilities 859 1,089
Long-Term Debt 4,138 3,896
Retirement and Insurance Programs and
Other Long-Term Obligations 600 530
Deferred Income Taxes 2,032 1,884
Share-Owners' Equity
Preferred stock, $35 stated value --
1,000,000 shares authorized and
issued 30 29
Common stock, $1 par value -- Authorized
500,000,000 shares; Issued 145,094,936
and 143,841,182 shares, respectively 145 144
Paid-in capital 1,346 1,301
Reinvested earnings 144 70
Cumulative effect of currency
translations 38 21
Common stock in treasury, at cost
(16,543,458 and 14,636,598 shares,
respectively) (268) (226)
------ ------
1,435 1,339
------ ------
$9,064 $8,738
====== ======
The accompanying Notes to Consolidated Financial Statements are an integral
part of these balance sheets.
- ----------------------------------------------------------------------------
- 25 -
<PAGE>
<TABLE>
COCA-COLA ENTERPRISES INC.
CONSOLIDATED STATEMENTS OF SHARE-OWNERS' EQUITY
(In millions except per share data)
<CAPTION>
Three Years Ended Preferred Common Paid-in Reinvested Currency Treasury Share-Owners'
December 31, 1995 Stock Stock Capital Earnings Translations Stock Equity
- ---------------------------------- --------- ------ ------- ---------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1992 $ - $142 $1,267 $ 32 $ - $(187) $1,254
Issuance of management stock
performance awards - - 6 - - - 6
Unamortized cost of management
stock performance awards - - (6) - - - (6)
Expense amortization of management
stock performance awards - - 2 - - - 2
Conversion of executive deferred
compensation to equity - - 9 - - - 9
Purchase of common stock for
treasury - - - - - (17) (17)
Issuance of preferred stock to
effect acquisition 29 - - - - - 29
Issuance of treasury stock to
effect acquisition - - - (2) - 7 5
Exercise of employee stock
options - - 2 - - - 2
Currency translations - - - - (3) - (3)
Dividends on common stock (per
share-$0.05) - - - (6) - - (6)
Net loss - - - (15) - - (15)
--- ---- ------ ---- ----- ----- ------
Balances at December 31, 1993 29 142 1,280 9 (3) (197) 1,260
Issuance of management stock
performance awards - 1 30 - - - 31
Unamortized cost of management
stock performance awards - - (31) - - - (31)
Expense amortization of management
stock performance awards - - 7 - - - 7
Forfeiture of management stock
performance awards - - 1 - - (1) -
Purchase of common stock for
treasury - - - - - (28) (28)
Exercise of employee stock
options - 1 14 - - - 15
Currency translations - - - - 24 - 24
Dividends on common stock
(per share-$0.05) - - - (6) - - (6)
Dividends on preferred stock
(refer to Note 7) - - - (2) - - (2)
Net income - - - 69 - - 69
--- ---- ------ ---- ----- ----- ------
Balances at December 31, 1994 29 144 1,301 70 21 (226) 1,339
Issuance of management stock
performance awards - - 18 - - - 18
Unamortized cost of management
stock performance awards - - (18) - - - (18)
Expense amortization of
management stock performance
awards - - 36 - - - 36
Forfeiture of management stock
performance awards - - - - - (1) (1)
Purchase of common stock for
treasury - - - - - (41) (41)
Exercise of employee stock
options - 1 9 - - - 10
Currency translations - - - - 17 - 17
Dividends on common stock (per
share-$0.05) - - - (6) - - (6)
Dividends on preferred stock
(refer to Note 7) - - - (2) - - (2)
Preferred stock accretion (refer
to Note 7) 1 - - - - - 1
Net income - - - 82 - - 82
--- ---- ------ ---- ----- ----- ------
Balances at December 31, 1995 $30 $145 $1,346 $144 $ 38 $(268) $1,435
=== ==== ====== ==== ===== ===== ======
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
- -------------------------------------------------------------------------------
</TABLE>
- 26 -
<PAGE>
Interest Rate and Currency Risk Management
Interest Rates
The Company uses interest rate swaps and other risk management instruments to
manage its fixed/floating debt profile (refer to Note 5). The use of
interest rate swaps and other risk management instruments had a favorable
impact on interest expense of $3 million and $12 million in 1995 and 1994,
respectively. A 1% increase or decrease in market interest rates would have
increased or decreased interest expense for 1995 and 1994 by $11 million and
$8 million, respectively.
Interest rate derivatives generally involve exchanges of interest payments
based upon fixed and floating interest rates without exchanges of underlying
face (notional) amounts of the designated hedges. The Company continually
evaluates the credit quality of counterparties on interest rate swaps and
other risk management instruments and does not believe that there is a
significant risk of nonperformance by any of the counterparties.
Currency
Our international operations represented approximately 5% of consolidated net
revenues and assets in 1995. As a result of our operations in the
Netherlands, we are exposed to fluctuations in the exchange rate for the
Dutch florin. We attempt to reduce our exposure to currency fluctuations
through the use of currency forwards and options which hedge certain
intercompany debt principal and interest payments denominated in Dutch
florins (refer to Note 5). During 1995 and 1994, losses on currency forwards
and options were less than $1 million in each year.
As currency exchange rates fluctuate, translation of the statements of
operations of international businesses into U.S. dollars affects comparability
of revenues and expenses between years. None of the components of
consolidated results of operations were materially affected by exchange rate
fluctuations in 1995 and 1994.
Pending Transactions and Events
Acquisitions
In October 1995, the Company signed a non-binding letter of intent to acquire
all issued and outstanding shares of stock of the Ouachita Coca-Cola Bottling
Company, Inc. ("Ouachita") for a total transaction value (purchase price plus
acquired debt) of approximately $313 million (refer to Note 2). The purchase
price is to be paid in cash, shares of Company common or convertible
preferred stock, or a combination of each, at the election of individual
Ouachita share owners. This transaction is expected to close in the first
quarter of 1996.
In December 1995, the Company announced preliminary discussions for the
acquisition of The Coca-Cola Company's bottling and canning operations in
France and Belgium. These franchise territories include approximately 90% of
the population of France and all of the population of Belgium. Because
discussions are preliminary, there is no assurance this transaction will
occur.
Accounting Developments
In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" ("SFAS 121"), which is effective beginning in
fiscal 1996. The Statement requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are
present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount. SFAS 121 also addresses
the accounting for long-lived assets that are expected to be sold or
discarded. The Company will adopt SFAS 121 in January 1996, and the effect
of adoption is not expected to be material because the Company's current
accounting policies provide for similar accounting treatment.
In October 1995, the Financial Accounting Standards Board issued Statement
No. 123, "Accounting and Disclosure of Stock-Based Compensation" ("SFAS 123")
which is effective beginning in fiscal 1996. The Statement provides an
option either to continue the Company's current method of accounting for
stock-based compensation, or to adopt the fair value method of accounting
which would require the Company to expense, over the service or vesting
period, the fair value of employee stock-based compensation at the date of
grant. Companies electing to continue using existing accounting rules will
be required to provide additional disclosures including proforma disclosures
of net income and earnings per share as if the Company adopted the new fair
value method for recognition purposes in 1995. The Company intends to
continue its present method of accounting for stock-based compensation;
accordingly, the adoption of the Statement will have no effect with the
exception of expanded disclosures required under the Statement. The 1995
footnote disclosures include disclosures assuming adoption as required by
SFAS 123 (refer to Note 9).
- 27 -
<PAGE>
OPERATIONS REVIEW - 1994-1993
In the opinion of management, the most meaningful comparison of operating
results between 1994 and 1993 reflects 1993 excluding the impact of the
Omnibus Budget Reconciliation Act on deferred income taxes (refer to Note 12),
and including the effect of acquisitions as if they occurred on
January 1, 1993 (refer to Note 2). "Comparable" results in this section
refer to the results of operations adjusted for these items.
Operating income and earnings per share increased significantly in 1994 over
1993 as a result of volume and net revenues per case increases, combined with
reduced net interest expense and a lower effective tax rate. Comparable 1994
operating income increased 13% over 1993 results, while comparable earnings
per share applicable to common share owners increased 165% over 1993.
Cash operating profit (operating income before the deduction for depreciation
and amortization) is one of the key standards by which management measures
its operating performance. This measurement is provided as a supplement,
and not as an alternative, to operating income as an indicator of operating
performance, and cash flows from operating activities as a measure of
liquidity, each as defined by generally accepted accounting principles.
Actual 1994 cash operating profit increased 12% over 1993, while comparable
results increased 9%.
Net operating revenues for 1994 increased 10% over 1993, while comparable net
operating revenues for 1994 increased approximately 6%. The increase in
comparable net revenues resulted primarily from a 4 1/2% increase in bottle
and can case sales volume and a 1/2% increase in domestic net revenues per
case.
Volume growth in 1994 resulted primarily from strong carbonated beverage
growth in our core brands and the introduction of new products. Significant
growth in noncarbonated products also contributed to total volume growth in
1994. We also experienced growth in 1994 comparable fountain gallon volume
of 3 1/2% over 1993.
Net revenues per case increases in 1994 reflected a combination of net
selling price increases (part of a strategy to counter the anticipated
significant packaging cost increases which occurred in January 1995) and a
product mix shift into higher priced products, packages and distribution
channels.
Cost of wholesale sales per physical case for 1994 increased 1/2% over 1993,
while comparable domestic cost of sales decreased 1/2%. This decrease was
primarily attributable to favorable packaging cost decreases which more than
offset ingredient cost increases.
Selling, general, and administrative expenses for 1994 increased 9% from 1993
levels, primarily as a result of the increased case sales volume and
acquisitions during 1994 and 1993. Selling, general, and administrative
expenses as a percentage of sales decreased slightly from 31.3% in 1993 to
31.1% in 1994.
Interest expense decreased in 1994 as compared to 1993, reflecting the
decreased 1994 debt balance and a lower weighted average borrowing rate of
7.2% during 1994 as compared to 7.6% during 1993.
Income taxes decreased as a percentage of earnings before income taxes in
1994, reflecting a lower effective tax rate of 46% for 1994 as compared to
55% (excluding the one-time charge) for 1993. The change in the effective
tax rate from 1993 to 1994 was principally due to the level of pretax income
in each period and the relationship of nondeductible expenses to pretax
income.
CASH FLOW REVIEW - 1994-1993
Cash Operating Activities
Net cash provided by operating activities in 1994 increased 28% over 1993,
primarily resulting from a higher net income level and favorable working
capital changes. The increase in depreciation expense in 1994 reflects
the results of capital spending and 1993 acquisitions. The increase in
amortization expense in 1994 primarily reflects: (i) franchise amortization
resulting from the full-year effect of June 1993 acquisitions (refer to
Note 2), (ii) additional restricted stock
- 28 -
<PAGE>
grants (refer to Note 9), and (iii) grants of stock performance-based
executive stock options (refer to Note 9). The 1993 increase in the deferred
income tax provision primarily reflects the $40 million one-time adjustment.
Investing Activities
Net cash used in investing activities in 1994 decreased 40% from 1993
primarily as a result of greater acquisition activity during 1993. Capital
expenditures in 1994 increased 4% over 1993. In 1993, we acquired bottling
companies for an aggregate purchase price of $426 million, and at a cash cost
of $287 million (refer to Note 2).
Financing Activities
We used $246 million for financing activities in 1994 compared to $133
million in cash funds provided by financing activities in 1993. This
difference results primarily from using available cash to reduce our debt
balance by $207 million in 1994, compared to a net increase in debt of $154
million in 1993. Stock options exercised throughout 1994 provided cash of
$15 million. We repurchased common stock at a cost of $28 million under our
share repurchase program in 1994 when compared to $17 million during 1993.
Other financing activity primarily includes payment of a collateral deposit
related to interest rate swaps, and changes in the market value of Eurodollar
futures contracts (refer to Note 5).
- 29 -
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Significant Accounting Policies
The Company's Business: The Company markets, distributes, and produces
liquid nonalcoholic refreshment products under franchise agreements with The
Coca-Cola Company and certain other franchisers. The Company operates in
38 states, the District of Columbia, the U.S. Virgin Islands, the islands
of Tortola and Grand Cayman, and the Netherlands.
Basis of Presentation: The consolidated financial statements include the
accounts of the Company and its majority-owned subsidiaries. All significant
intercompany accounts and transactions are eliminated in consolidation.
The Company's fiscal year ends December 31. For quarterly reporting, the
Company reports on a Friday close to the end of the quarterly calendar period
for reporting and comparison convenience. Management of the Company is
required to make estimates in the preparation of the financial statements and
accompanying notes that affect reported amounts. Actual results could differ
from these estimates.
Cash Equivalents: Cash equivalents include all highly liquid cash
investments purchased with original maturity dates less than three months.
The fair value of cash and cash equivalents approximates the amounts
shown in the financial statements.
Concentrations of Credit Risk: The Company sells its products to chain store
and other customers and extends credit based on an evaluation of the
customer's financial condition, generally without requiring collateral.
Exposure to losses on receivables is principally dependent on each
customer's financial condition. The Company monitors its exposure to credit
losses and maintains allowances for anticipated losses. The Company's
accounts receivable from the sale of products are collected within
approximately 30 days.
Inventories: The Company values its inventories on the first-in, first-out
(FIFO) method.
Property, Plant and Equipment: Property, plant and equipment assets are
stated at cost. Depreciation expense is computed using the straight-line
method over the estimated useful lives of 20 to 40 years for buildings and
improvements and 3 to 14 years for machinery and equipment. Leasehold
improvements are amortized over the remaining contractual lease term.
Franchise and Other Noncurrent Assets: Franchise agreements contain
performance requirements and convey to the franchisee the rights to
distribute and sell products of the franchiser within specified territories.
The majority of the Company's franchise agreements are perpetual,
reflecting a long and ongoing relationship with The Coca-Cola Company
and other franchisers. The Company's agreements covering its operations
in the Caribbean and the Netherlands are not perpetual because
The Coca-Cola Company does not grant perpetual franchise rights outside
the United States. The Company believes these agreements are
effectively perpetual and will continue to be renewed at each expiration
date.
Franchise assets, recorded in the financial statements at cost net of
accumulated amortization, are amortized on a straight-line basis
predominately over the maximum allowed estimated period of benefit of
40 years. Accumulated franchise amortization amounted to $1,069
million and $895 million at December 31, 1995 and 1994,
respectively. Other noncurrent assets are not significant to the total.
In the event that facts and circumstances indicate that the cost of franchise
assets or other assets may be impaired, an evaluation of recoverability
would be performed. If an evaluation is required, the estimated future
undiscounted cash flows associated with the asset would be compared to
the asset's carrying amount to determine if a write-down to market value
or discounted cash flow value is required.
Management Stock Performance Plans: The Company accounts for stock-based
compensation plans under APB Opinion No. 25 and related Interpretations. As
part of the Company's overall management compensation program, the Company
issues stock compensation awards to key executives which vest over time based
solely on aggressive stock performance goals. The Company believes these
awards enhance the focus of key executives on share-owner value. The costs
associated with these plans are charged to paid-in capital upon award as an
unearned compensation intangible asset and amortized over the estimated
vesting period as compensation amortization expense. Changes to the
anticipated ultimate vesting period are based on
- 30 -
<PAGE>
management's judgment and the impact of these changes are reflected in the
financial statements in the period of change and subsequent periods.
Insurance Programs: The Company is generally self-insured for costs related
to workers' compensation, health and welfare claims, business interruption
resulting from certain events, and comprehensive general, product, and
vehicle liability. Losses are accrued using actuarial assumptions followed
in the insurance industry, adjusted for company-specific history and
expectations. The Company uses commercial insurance as a risk reduction
strategy to minimize catastrophic losses.
Environmental Compliance and Remediation: Environmental maintenance,
monitoring, and other similar compliance costs are expensed as incurred.
Environmental remediation costs are accrued when environmental
assessments and/or the need for remediation are probable and the cost can be
reasonably estimated. Environmental remediation costs which improve the
condition of the property, as compared to the condition when constructed or
acquired, are capitalized.
Currency Translation: Assets and liabilities of the Netherlands operations
are translated from Dutch florins into U.S. dollars at the rate of currency
exchange at the end of the fiscal period. Revenues and expenses are
translated at average monthly exchange rates prevailing during the year.
Resulting translation differences are recognized as a component of
share-owners' equity.
Derivative Financial Instruments: To manage interest rate and currency
exposures, the Company uses (i) interest rate swaps, futures, and options and
(ii) currency forwards and options. The Company specifically designates
interest rate swaps, futures, and options as hedges of debt instruments and
recognizes interest differentials as adjustments to interest expense in the
period they occur. Realized and unrealized gains and losses arising from
currency forwards and options are recognized as adjustments to the gains and
losses resulting from the underlying hedged transactions. The Company does
not hold or issue financial instruments for trading purposes.
Marketing Costs and Support Arrangements: The Company directs various
advertising and marketing programs supported by or with The Coca-Cola Company
and other franchisers. Certain costs incurred by the Company under these
programs are reimbursed by the applicable franchiser. All costs related to
marketing and advertising the Company's products are expensed in the period
incurred or expensed ratably over the year as revenues are earned or as other
performance measures are met. All funding for marketing programs is
recognized as income in the period earned or recognized ratably over the year
as other performance measures are met. Funding for cold drink infrastructure
development is recognized as expenses are incurred.
Net Income (Loss) Per Common Share Applicable to Common Share Owners: Net
income (loss) per common share applicable to common share owners is computed
by dividing net income (loss) applicable to common share owners by the
weighted average number of common shares outstanding.
Note 2 - Acquisitions and Divestitures -- Upon acquisition of companies with
franchise rights, the Company obtains the right to market, distribute, and
produce beverage products of The Coca-Cola Company and/or other franchisers
in the franchise territories of the acquired companies. All acquisitions in
the periods covered by this report were accounted for under the purchase
method of accounting. The results of operations of these acquired companies
are included in the consolidated statements of operations as of or near the
respective acquisition date. The assets and liabilities of acquired
companies are included in the Company's consolidated balance sheets at their
estimated fair values on the date of acquisition.
In January 1995, the Company acquired all the issued and outstanding shares
of stock of the Wichita Coca-Cola Bottling Company ("Wichita") for $150
million in cash at closing. Later in 1995, an additional $7 million in
purchase price was paid to the sellers as a result of tax benefits accruing
to the Company. The Wichita bottling operations are located in portions of
Colorado, Kansas, Missouri, and Nebraska.
- 31 -
<PAGE>
Also in January 1995, the Company sold its 50% ownership interest in
The Coca-Cola Bottling Company of the Mid South ("Mid South") located in
Jackson, Mississippi to Ouachita Coca-Cola Bottling Company, Inc.
("Ouachita") for $17 million. This sale resulted in a pre-tax gain of
$9 million ($0.04 per common share after taxes). The Company's interest in
Mid South will be reacquired as a result of the Ouachita acquisition
discussed further below.
In 1994, the Company acquired: (i) a bottling operation in Shelbyville,
Kentucky for an aggregate purchase price of approximately $6 million,
(ii) approximately $8 million of the preferred stock of a manufacturer
supplying certain packaging used in the Company's manufacturing process
(refer to Note 15), and (iii) approximately 4% of the outstanding common
stock (9% of the voting shares) of The Coca-Cola Bottling Company of New York,
Inc. ("New York") from The Coca-Cola Company for $6 million in cash. The
Company has a five-year right of first refusal on the remaining New York
shares held by The Coca-Cola Company, with the option to enter into
negotiations for these shares after two years.
On June 30, 1993, the Company acquired, from The Coca-Cola Company, the stock
of: (i) Coca-Cola Beverages Nederland B.V. in the Netherlands, (ii) Roddy
Coca-Cola Bottling Company, Inc. in Knoxville, Tennessee, and (iii) Coca-Cola
Bottling Company of Johnson City in Johnson City, Tennessee for an aggregate
purchase price of $366 million in cash and assumed debt. Summarized
unaudited proforma results of operations of the Company reflecting: (i) an
assumption that the acquisition occurred as of the beginning of 1993,
(ii) adjustments for the repayment of assumed debt, (iii) financing the
transaction at a rate of 3.1%, and (iv) amortization of the franchise asset
acquired are as follows (in millions except per share data):
Net operating revenues $5,667
======
Net loss $ (15)
======
Net loss per common share $(0.11)
======
Also in 1993, in separate transactions, the Company acquired bottling
operations in Arkansas and a design and engineering company. The
aggregate purchase price for these acquisitions approximated $60 million in
common stock, preferred stock, and debt.
Pending Transactions: In October 1995, the Company signed a non-binding
letter of intent to acquire all the issued and outstanding shares of stock of
Ouachita for a total transaction value (purchase price plus acquired debt) of
approximately $313 million. The purchase price is to be paid in cash, shares
of Company common or convertible preferred stock, or a combination of each,
at the election of individual Ouachita share owners. The Ouachita bottling
operations are located in sections of Arkansas, Louisiana, and Mississippi.
The proposed transaction is subject to negotiation of a definitive purchase
agreement, among other things, and is expected to close during the first
quarter of 1996.
In December 1995, the Company announced preliminary discussions for the
acquisition of The Coca-Cola Company's bottling and canning operations
in France and Belgium. These franchise territories include approximately
90% of the population of France and all of the population of Belgium.
Because discussions are preliminary, there is no assurance this transaction
will occur.
- 32 -
<PAGE>
Note 3 - Accounts Payable and Accrued Expenses consists of the following
at December 31 (in millions):
1995 1994
---- ----
Trade accounts payable $177 $224
Accrued advertising costs 120 110
Accrued compensation costs 84 98
Accrued insurance costs 84 73
Accrued interest costs 82 84
Deposits on containers and shells 74 62
Accrued taxes 65 53
Unearned revenues 44 6
Additional accrued expenses 66 85
---- ----
$796 $795
==== ====
Note 4 - Long-Term Debt, including current maturities, consists of the
following at December 31 (in millions):
1995 1994
------ ------
Commercial Paper $ 777 $ 828
6.50% Notes due 1997 300 300
7.00% Notes due 1999 200 200
7.875% Notes due 2002 500 500
8.00% Notes due 2005 250 250
8.50% Debentures due 2012 250 250
8.75% Debentures due 2017 154 154
8.35% Zero Coupon Notes due 2020
(net of unamortized discount
(i.e. interest costs) of $1,671) 261 -
8.00% and 8.50% Debentures due 2022 1,000 1,000
6.75% Debentures due 2023 250 250
8.35% Notes due 1995 - 250
Additional debt 259 205
------ ------
$4,201 $4,187
====== ======
Aggregate maturities of long-term debt during the next five years are
as follows (in millions): 1996 - $63; 1997 - $307; 1998 - $10; 1999 - $979;
and 2000 - $2.
The Company's commercial paper program is supported by a revolving bank
credit agreement maturing in December 1999 and two short-term credit
facilities, all aggregating $1.2 billion. An aggregate $777 million of
commercial paper supported by these agreements was outstanding at
December 31, 1995. The weighted average annual interest rates on amounts
outstanding under the commercial paper program were approximately 5.7%
and 6% at December 31, 1995 and 1994, respectively.
The revolving bank credit agreement and the outstanding notes and debentures
contain various provisions which, among other things, require the Company to
maintain a defined leverage ratio and limit the incurrence of certain liens
or encumbrances in excess of defined amounts. None of these restrictions
negatively impacts the Company's liquidity or capital resources at this time.
Note 5 - Derivative Financial Instruments
Interest Rate Risk Management: The Company uses interest rate swaps and
other risk management instruments to manage its fixed/floating debt profile.
The use of interest rate swaps and other risk management instruments had
a favorable impact on interest expense of $3 million and $12 million in
1995 and 1994, respectively. The Company's activities in 1995 and 1994 with
respect to derivative financial instruments that were significant to the
Company are discussed further below.
During 1995 and 1994, the Company was party to an interest rate swap covering
debt with a total amount of $150 million outstanding. This swap, currently
outstanding and expiring in December 1996, changes the floating interest rate
exposure on $150 million of commercial paper to fixed interest rate exposure.
During 1995 and 1994, the Company was party to two additional interest
rate swaps with notional amounts ranging from $250 million to $500 million.
At December 31, 1995 and 1994, the outstanding notional amounts were $250
million and $493 million, respectively. These swaps changed fixed interest
rate exposure to floating interest rate exposure on (i) $250 million 8%
Debentures due 2022 and (ii) $250 million of the $750 million 8.5%
Debentures due 2022. The notional amounts of these swaps are amortized
(i.e., reduced) quarterly dependent upon interest rate fluctuations. The
notional amount of the swap entered into in 1991 and designated for the
8.5% Debentures began being amortized in 1994 and was fully amortized
during 1995. The notional amount of the swap entered into in 1993, with
a final maturity date in 2023, designated for the 8% Debentures may begin
to amortize in 1996. The expiration date of the remaining swap is the
earlier of (i) the notional amount being reduced to zero or (ii) the final
maturity date.
The fixed to floating swaps are subject to a bilateral security agreement
allowing one party to the agreement to require
- 33 -
<PAGE>
the second party to the agreement to establish a cash collateral account
equal to the fair value of the swap adjusted by a threshold amount.
Collateral amounts deposited by the Company totaled $9 million and $31
million at December 31, 1995 and 1994, respectively.
The Company uses Eurodollar futures contracts to hedge its floating interest
rate exposure on portions of the above swaps. During 1995 and 1994, the
Company was party to Eurodollar futures contracts with notional amounts
aggregating $250 million extending through June 1996. Deferred
(losses)/gains were $(1) million and $8 million at December 31, 1995 and
1994, respectively. Deferred gains or losses are amortized as adjustments to
interest expense over the three-month contract period beginning on the final
settlement date of each contract.
The Company uses LIBOR caps to reduce the potential impact of increases
in interest rates on commercial paper. LIBOR caps limit the Company's
interest costs on specified amounts of commercial paper to a maximum rate.
Premiums paid for LIBOR caps are amortized to interest expense over the
terms of the LIBOR caps. During 1995 and 1994, the Company had LIBOR caps
outstanding with notional amounts ranging from $50 million to $600 million.
At December 31, 1995 and 1994, the Company had $450 million and $50 million,
respectively, of LIBOR caps outstanding. No amounts were received during
1995 or 1994 under LIBOR cap agreements.
Currency Risk Management: The Company uses currency forwards and options to
hedge certain intercompany debt principal and interest payments from the
Netherlands. At December 31, 1995, the Company was not a participant in
currency forwards or options. At December 31, 1994, the Company had currency
forwards and options outstanding to exchange Dutch florins for U.S. dollars
in the amount of $1 million. During 1995 and 1994, currency forwards and
options to exchange Dutch florins for U.S. dollars in the amount of $37
million and $15 million, respectively, settled or expired. These forwards
and options resulted in realized losses of less than $1 million in each year.
Gains or losses deferred at December 31, 1995 and 1994 for currency forwards
and options were not significant.
Credit Risk: The Company is exposed to credit losses in the event of
nonperformance by counterparties on interest rate swaps and other risk
management instruments. The Company does not believe there is a
significant risk of nonperformance by any of the parties to these
instruments. Amounts due to the Company under these agreements were not
significant at December 31, 1995.
Note 6: Fair Value of Financial Instruments -- The carrying amounts and
fair values of the Company's financial instruments at December 31 are
summarized as follows (in millions; (liability)/asset):
1995 1994
-------------------- -------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- -------- -------- --------
Cash and cash equivalents $ 8 $ 8 $ 22 $ 22
Long-term debt (4,201) (4,685) (4,187) (4,060)
Warrants - - - (8)
Futures contracts - (1) - 8
Interest rate swaps - (12) - (49)
The following methods and assumptions are used in estimating fair values
for financial instruments:
Cash and cash equivalents: The carrying amount reported in the balance
sheets for cash and cash equivalents approximates fair value.
Long-term debt and warrants: The term of commercial paper instruments and
the variable interest rate on variable debt result in the recorded
liabilities of these instruments approximating their fair values. The fair
values of the Company's long-term debt, representing the amount at which the
debt could be exchanged on the open market, are determined using the
Company's current incremental borrowing rate for similar types of borrowing
arrangements. The Company does not anticipate any significant refinancing
activities which would settle long-term debt at fair value.
The fair values of the Company's warrants were estimated at December 31, 1994
based on valuations from investment banks. The debt warrants outstanding at
December 31, 1994 were exercised during 1995 for the issuance of
8.35% Zero Coupon Notes due 2020 (refer to Note 4).
Derivatives: The fair values of the Company's futures contracts are
estimated based on current settlement values. The fair values of the
Company's interest rate swaps are estimated based on valuations from
investment banks.
- 34 -
<PAGE>
Note 7 - Preferred Stock -- In connection with the 1993 acquisition of the
Coca-Cola Bottling Company of Northeast Arkansas, Inc., the Company issued
1,000,000 shares of nonvoting convertible preferred stock with a stated value
of $35 per share. Each share is convertible into one share of common stock
at any time at the option of the holder. The preferred stock may be called
by the Company at any time for cash equal to its stated value plus accrued
dividends. The preferred stock pays cumulative cash dividends of 3% per
annum for the first five years and 4.29% per annum for the following five
years, adjusting to an annual rate equal to LIBOR plus 1% thereafter.
The value of the preferred stock at date of acquisition ($29 million,
reflecting an annual market dividend cost of approximately 6% at issuance)
is being increased to its stated value over the following ten years.
Note 8 - Share Repurchases -- In August 1994, the Company began a share
repurchase program under which the Company may repurchase up to ten million
shares of its outstanding common stock. The Company repurchased (i) 1,863,700
shares with an aggregate cost of $41 million in 1995 and (ii) 1,558,000
shares with an aggregate cost of $28 million in 1994. Under a previous
repurchase program during 1993, the Company repurchased 1,153,900 shares of
its common stock for an aggregate cost of approximately $17 million.
Repurchased shares are added to treasury stock and are available for general
corporate purposes including the funding of various employee benefit and
compensation plans.
Note 9 - Stock-Based Compensation Plans -- The Company applies APB
Opinion No. 25 and related Interpretations in accounting for its plans.
FASB Statement No. 123 "Accounting for Stock-Based Compensation"
("SFAS 123") was issued by the FASB in 1995 and, if fully adopted, changes
the methods for recognition of cost on plans similar to those of the Company.
Adoption of SFAS 123 is optional; however, proforma disclosures as if the
Company adopted the cost recognition requirements under SFAS 123 in 1995 are
presented below.
The Company's stock option plans provide for the granting of nonqualified
stock options to certain key employees. Generally, options outstanding
under the Company's stock option plans: (i) are granted at prices which
equate to or are above the market value of the stock on the date of grant,
(ii) vest ratably over either a three or four year service vesting period,
and (iii) expire ten years subsequent to award. For certain senior
executives receiving awards under a 1994 plan, the options are stock
performance-based options and become exercisable solely upon attainment
of certain increases in the market price of the Company's stock within five
years from the date of grant. The compensation cost for the stock
performance-based plan was $5 million and $1 million for 1995 and 1994,
respectively. Costs in 1995 included an accelerated cost recognition of
$3 million in the fourth quarter of 1995 resulting from the shortening of the
estimated vesting periods of awards by management due to the market price
performance of the Company's stock during the fourth quarter of 1995. Upon
approval of the 1995 Stock Option plan, all unissued options under the 1994
Stock Option plan became available for grant under the 1995 plan.
A summary of the status of the Company's stock options as of December 31,
1995, 1994, and 1993 and changes during the year ended on those dates is
presented below (shares in thousands):
<TABLE>
<CAPTION>
1995 1994 1993
--------------- -------------- ---------------
Wgtd. Wgtd. Wgtd.
Avg. Avg. Avg.
Exer. Exer. Exer.
Shares Price Shares Price Shares Price
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning
of year 6,333 $15.71 6,042 $14.89 5,680 $14.94
Granted 539 17.88 1,607 18.50 1,110 15.04
Exercised (599) 15.28 (917) 15.32 (150) 14.52
Canceled (128) 16.35 (399) 15.40 (598) 15.77
----- ----- -----
Outstanding at end of year 6,145 15.93 6,333 15.71 6,042 14.89
===== ===== =====
Options exercisable at
year-end 3,858 2,923 3,035
===== ===== =====
Options available for
future grant 2,354 680 287
===== ===== =====
Weighted average fair value
of options granted during
the year $7.58
=====
</TABLE>
- 35 -
<PAGE>
The fair value of each option granted during 1995 is estimated on the date
of grant using the Black-Scholes option-pricing model with the following
assumptions: (i) dividend yield of .3%, (ii) expected volatility of 27%,
(iii) risk-free interest rate of 7.82%, and (iv) expected life of 6 years.
The following table summarizes information about stock options outstanding
at December 31, 1995 (shares in thousands):
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
--------------------------------------- -------------------------
Wgtd. Avg.
Range of Number Remaining Wgtd. Avg. Number Wgtd. Avg.
Exercise Outstanding Contractual Exercise Exercisable Exercise
Prices at 12/31/95 Life Price at 12/31/95 Price
- ---------- ------------ ------------ ---------- ----------- ----------
<C> <C> <C> <C> <C> <C>
$13 to $18 5,753 6.4 $15.59 3,697 $15.19
18 to 22 392 7.8 20.94 161 20.52
----- -----
13 to 22 6,145 6.5 15.93 3,858 15.41
===== =====
</TABLE>
Of the 2,287,000 options unexercisable at December 31, 1995, 340,000 are
stock performance-based options.
The Company's restricted stock award plans provide for awards to officers
and certain key employees of the Company. For awards granted prior to 1994,
restricted stock generally vests (i) when a participant retires, becomes
disabled, or dies or (ii) based on the attainment of certain market price
levels of the Company's stock. For awards granted 1994 and after, restricted
stock generally vests only upon attainment of certain increases in the market
price of the Company's common stock within five years from the date of grant.
Upon approval of the 1995 restricted stock plan, all unissued restricted
stock under the 1994 restricted stock plan was canceled and included in
awards available for grant under the 1995 plan.
All restricted stock awards entitle the participant to full dividend and
voting rights. Unvested shares are restricted as to disposition and subject
to forfeiture under certain circumstances. Upon issuance of restricted
shares, unearned compensation is charged to share-owners' equity for the cost
of restricted stock and recognized as amortization expense ratably over the
vesting periods, as applicable. The amount of unearned compensation
recognized as expense was $31 million, $5 million, and $2 million for 1995,
1994, and 1993, respectively. Costs in 1995 included an accelerated cost
recognition of $22 million in the fourth quarter resulting from the
shortening of the estimated vesting period of awards by management due to the
market price performance of the Company's stock during the fourth quarter of
1995. For awards granted prior to 1994, upon vesting of the restricted stock,
the Company pays a cash amount to cover a portion of the employee's taxes.
Expense recognized for this cost was $9 million, $1 million, and $1 million
for 1995, 1994, and 1993, respectively. A summary of restricted stock award
activity follows (shares in thousands):
1995 1994 1993
------ ------ ------
Awards available for grant -
beginning of year 40 186 649
New awards authorized 2,040 725 -
Available awards terminated (40) (186) -
Restricted shares awarded (655) (685) (463)
------ ------ ------
Awards available for grant -
end of year 1,385 40 186
====== ====== ======
Restricted shares forfeited 43 74 22
====== ====== ======
Weighted average market value
of stock on grant date $17.88 $17.69 $12.54
====== ====== ======
- 36 -
<PAGE>
Had compensation cost for the Company's 1995 grants for stock-based
compensation plans been determined consistent with SFAS 123, the Company's
net income, net income applicable to common share owners, and net income
per common share for 1995 would approximate the proforma amounts below
(in millions except per share data):
As Reported Proforma
----------- --------
Net income $ 82 $ 83
===== =====
Net income applicable to
common share owners $ 80 $ 81
===== =====
Net income per common share $0.62 $0.63
===== =====
The effects of applying SFAS 123 in this proforma disclosure are not
indicative of future amounts. SFAS 123 does not apply to awards prior to
1995, and additional awards in future years are anticipated.
Note 10 - Pension and Certain Benefit Plans -- The Company sponsors
qualified and nonqualified defined benefit pension plans and participates
in certain multiemployer pension plans covering substantially all U.S.
employees. The benefits related to Company-sponsored plans are based
on years of service and employee compensation. The Company's policy is
to fund no less than the minimum contribution required by applicable
regulations, and has funded more than this requirement in order to enhance
employee relations and manage costs. Company-sponsored qualified benefit
plans are insured by the Pension Benefit Guaranty Corporation ("PBGC").
In addition to U.S. plans, the Company sponsors a supplemental defined
benefit plan and an unfunded voluntary early retirement plan for certain
international employees and participates in a multiemployer pension plan
covering a majority of its international employees.
Total pension expense for multiemployer plans was $8 million in 1995,
$7 million in 1994, and $6 million in 1993. The components of net pension
expense for Company-sponsored plans are as follows (in millions):
1995 1994 1993
---- ---- ----
Service cost $ 20 $ 22 $ 20
Interest cost on projected
benefit obligation 34 32 30
Actual return on assets (77) (11) (62)
Net amortization and deferral 41 (26) 26
---- ---- ----
Net pension expense $ 18 $ 17 $ 14
==== ==== ====
- 37 -
<PAGE>
The following table reconciles the funded status of Company-sponsored plans
to amounts recognized in the consolidated balance sheets at December 31,
segregated by (i) plans whose assets exceed the accumulated benefit
obligation ("ABO") and (ii) plans whose ABO exceeds assets (in millions):
<TABLE>
<CAPTION>
PBGC Insured Plans Other Plans
------------------------------------------ --------------------
1995 1994 1995 1994
------------------ ------------------- ------- -------
Assets ABO Assets ABO ABO ABO
Exceed Exceeds Exceed Exceeds Exceeds Exceeds
ABO Assets ABO Assets Assets Assets
------ ------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefit obligation $(345) $(18) $(279) $(32) $(29) $(23)
===== ==== ===== ==== ==== ====
Accumulated benefit
obligation $(368) $(47) $(297) $(39) $(36) $(30)
===== ==== ===== ==== ==== ====
Projected benefit
obligation $(422) $(50) $(340) $(40) $(47) $(41)
Plan assets at fair value,
primarily listed stocks,
bonds and government
securities 419 37 377 28 23 19
----- ---- ----- ---- ---- ----
Plan assets in excess of
(less than) projected
benefit obligation (3) (13) 37 (12) (24) (22)
Unrecognized net (gain) loss (9) 9 (29) 6 - (1)
Unrecognized prior service
cost (asset) (3) 2 (11) 4 (8) (8)
Unrecognized net transition
(asset) liability and other (9) 8 (11) 1 2 2
----- ---- ----- ---- ---- ----
Pension (liability) asset
included in the consolidated
balance sheets $ (24) $ 6 $ (14) $ (1) $(30) $(29)
===== ==== ===== ==== ==== ====
</TABLE>
Actuarial assumptions used in determining the projected benefit obligation
are established as of September 30th of each fiscal year. Significant
assumptions are listed as follows:
1995 1994 1993
---- ----- ----
Domestic Plans:
Discount rate 7.5% 8.25% 7.5%
Expected return on plan assets 8.5% 8.5% 8.5%
Rate of increase in future
compensation 5% 5% 5.5%
International Plans:
Discount rate 7.5% 8.25% 7.5%
Expected return on plan assets 7.5% 8.25% 7.5%
Rate of increase in future
compensation 3% 3.5% 3.5%
The Company also sponsors a qualified defined contribution plan covering all
full-time nonunion employees in the U.S. The Company matches 50% of a
participant's voluntary contributions up to a maximum of 7% of a
participant's compensation. Expense related to this plan was $15 million
in 1995, $11 million in 1994, and $10 million in 1993.
Note 11 - Postretirement Benefits Plan -- The Company sponsors an unfunded
defined benefit postretirement plan providing healthcare and life insurance
benefits to substantially all nonunion and certain union U.S. retirees
retiring with service exceeding minimums under the plan.
- 38 -
<PAGE>
Postretirement benefits expense is comprised of the following components
(in millions):
1995 1994 1993
---- ---- ----
Service cost attributed to service
during the year $ 4 $ 4 $ 6
Interest cost on accumulated
postretirement benefit
obligation 14 13 14
Net amortization and deferral (8) (9) (9)
--- --- ---
Postretirement benefits expense $10 $ 8 $11
=== === ===
Amounts recognized in the consolidated balance sheets at December 31
represent unfunded previously expensed obligations as follows (in millions):
1995 1994
---- ----
Accumulated postretirement benefit
obligation:
Retirees $125 $116
Fully eligible active plan
participants 14 9
Other active plan participants 67 54
---- ----
206 179
Unamortized excess prior
service cost asset 123 131
Unrecognized net (loss) gain (16) 5
---- ----
Accrued postretirement benefit
obligation $313 $315
==== ====
Actuarial assumptions used in determining the accumulated postretirement
benefit obligation are established as of September 30th of each fiscal year.
Significant assumptions are listed as follows:
1995 1994 1993
----- ----- ----
Discount Rate 7.5% 8.25% 7.5%
Rate of increase in cost of benefits:
Pre-Medicare 10.5% 11.7% 15%
Post-Medicare 9% 9.3% 11%
The postretirement benefit plan is a defined dollar benefit plan limiting
the effect of medical inflation to a maximum of 4% per year after 1995.
Because the plan has established dollar limits for determining Company
contributions, the effect of a 1% increase in the assumed healthcare cost
trend rate is not significant.
Note 12 - Income Taxes -- The current income tax provision represents the
amount of income taxes paid or payable for the year. The deferred income
tax provision represents the change in deferred tax liabilities and assets
and, for business combinations, the change in such tax liabilities and assets
since the date of acquisition. Significant components of the provision for
income taxes are as follows (in millions):
1995 1994 1993
---- ---- ----
Current:
Domestic
Federal $29 $ 4 $ -
State and local 12 6 9
International - 2 1
--- --- ---
Total current provision 41 12 10
Deferred:
Domestic
Federal 20 38 20
State and local 3 9 2
Rate change - federal - - 40
International (1) (1) (2)
--- --- ---
Total deferred provision 22 46 60
--- --- ---
Total provision for income taxes $63 $58 $70
=== === ===
The Omnibus Budget Reconciliation Act was signed into law in August 1993.
The Company was principally affected by an increase in the corporate
marginal income tax rate from 34% to 35%. The Company's deferred income
taxes were adjusted during the third quarter of 1993 to reflect the effect
of the new rate, resulting in a one-time charge of approximately $40
million ($0.31 per common share). Additionally, the Company's annual
estimated effective tax rate was increased by an amount approximating the 1%
marginal rate increase.
- 39 -
<PAGE>
A reconciliation of the expected income tax expense at the statutory federal
rate to the Company's actual income tax provision follows (in millions):
1995 1994 1993
---- ---- ----
Statutory expense $51 $45 $19
State expense - net of federal 5 3 (1)
State benefits valuation
allowance provision 5 7 8
Nondeductible items 3 2 2
Rate change - federal - - 40
Other, net (1) 1 2
--- --- ---
$63 $58 $70
=== === ===
Deferred income taxes are recognized for tax consequences of temporary
differences between the financial reporting and tax bases of existing
assets and liabilities by applying enacted statutory tax rates applicable
to future years to such differences. Significant components of the Company's
deferred tax liabilities and assets as of December 31 are as follows
(in millions):
1995 1994
------ ------
Deferred tax liabilities:
Franchise assets $2,200 $2,241
Property, plant and equipment 225 184
------ ------
Total deferred tax liabilities 2,425 2,425
------ ------
Deferred tax assets:
Net operating loss
carryforwards (319) (353)
Employee and retiree benefit
accruals (217) (203)
Other, net (107) (97)
------ ------
Total deferred tax assets (643) (653)
Valuation allowance for deferred
tax assets 120 112
------ ------
Net deferred tax liabilities 1,902 1,884
Current deferred tax assets 130 -
------ ------
Total deferred tax liabilities $2,032 $1,884
====== ======
Deferred tax assets are recognized for the tax benefit of deductible
temporary differences and federal and state net operating loss and tax
credit carryforwards. Valuation allowances are recognized on these assets
if it is believed to be more likely than not that some or all of the deferred
tax assets will not be realized. Management believes the majority of
deferred tax assets will be realized because of the depletion of certain
significant tax deductions and anticipated future taxable income resulting
from operations. Valuation allowances of $120 million and $112 million as
of December 31, 1995 and 1994, respectively, were established for the
remaining deferred tax assets. Included in the valuation allowance as of
December 31, 1995 and 1994 were $68 million and $62 million, respectively,
for net operating loss carryforwards of acquired companies.
Federal tax operating loss carryforwards aggregating $721 million have arisen
principally from the additional tax deductions resulting from elections filed
under Section 338 of the Internal Revenue Code relating to various bottling
companies acquired in 1986. These carryforwards are available to offset
future federal taxable income through their expiration in varying amounts
from 2001 through 2008.
Deferred tax assets recognized for the tax benefit of the aforementioned
losses are classified as current assets according to the expected reversal
date. Accordingly, the Company classified $130 million at December 31, 1995
as current assets principally resulting from net operating losses expected to
reverse within one year.
Note 13 - Related Party Transactions -- The Coca-Cola Company owns
approximately 44% of the Company's outstanding common shares, and the Company
generates approximately 90% of its product sales volume from the sale of
products of The Coca-Cola Company. The Company and The Coca-Cola Company
have entered into various transactions and agreements in the ordinary course
of business. Certain transactions and agreements entered into between the
Company and The Coca-Cola Company are disclosed in other sections of the
accompanying financial statements and related notes. The following discusses
other significant transactions between the Company and The Coca-Cola Company
and its affiliates.
Fountain Syrup and Package Product Sales: The Company sells fountain syrup
to The Coca-Cola Company in certain territories and delivers this syrup to
certain major or national accounts on behalf of The Coca-Cola Company. In
addition, the Company sells bottle and can products to The Coca-Cola Company
at prices equating amounts charged by the Company to its major customers.
During 1995, 1994, and 1993, The Coca-Cola Company paid the Company
approximately $253 million, $235 million, and $220 million, respectively, for
fountain syrup, bottle and can products, and delivery and billing services.
- 40 -
<PAGE>
Marketing Support Arrangements: The Coca-Cola Company engages in a variety
of marketing programs, local media advertising, and other similar
arrangements to promote the sale of products of The Coca-Cola Company in
territories operated by the Company. In 1995, 1994, and 1993, total direct
marketing support paid or payable to the Company, or on behalf of the Company
by The Coca-Cola Company, approximated $343 million, $319 million, and
$256 million, respectively. In addition, to partially fund costs associated
with an increased rate of cold drink equipment placement, cold drink
infrastructure development funding paid or payable to the Company by
The Coca-Cola Company approximated $55 million and $33 million in 1995 and
1994, respectively. Pursuant to a cooperative advertising and trade
arrangement with The Coca-Cola Company, the Company paid The Coca-Cola Company
an additional $82 million, $71 million, and $65 million in 1995, 1994, and
1993, respectively, for local media and marketing program expense.
Note 14 - Environmental Matters -- The Company incurs costs for the
required removal, replacement, or modification of underground fuel storage
tanks, and any required soil and groundwater remediation resulting from
leaking tanks. Ongoing environmental compliance costs, including routine
maintenance, monitoring, and similar costs, are not significant. The Company
also incurs costs on other environmental programs covering the discharge of
materials and waste water treatment. Expenditures made in connection with
the Company's environmental programs aggregated $6 million, $12 million, and
$9 million in 1995, 1994, and 1993, respectively. The Company believes that
any amount it may be required to pay in excess of amounts previously funded
or accrued as an expense would not have a material adverse effect on its
financial position, cash flows, or results of operations.
The Company has been named as a potentially responsible party ("PRP") for the
costs of remediation of hazardous waste at federal or state Superfund sites.
The Company believes that any ultimate Superfund liability will not have a
material adverse effect on its financial position, cash flows, or results of
operations. At December 31, 1995, there were four federal sites for which
the Company's involvement or liability as a PRP was unresolved. In addition,
there were 16 other federal and five state sites for which it has been
concluded that the Company either had no responsibility, the ultimate
liability amounts would be less than $100,000 or payments made to date by the
Company would be sufficient to satisfy all liability of the Company.
Under current law, the Company's liability for clean-up of Superfund sites
may be joint and several with other PRPs, regardless of the extent of the
Company's use in relation to other users. As to any site where the Company
may be liable, the Company has determined that there are other PRPs who are
financially solvent as well, and that any hazardous waste deposited by the
Company is minimal when compared to amounts deposited by financially solvent
PRPs.
Note 15 - Commitments and Contingencies -- The Company purchases
substantially all of its PET (plastic) bottles from certain bottling
cooperatives and other entities involved in the manufacture of plastic
bottles. The Company has guaranteed payment of up to $240 million of
indebtedness owed by these bottling cooperatives to third parties. At
December 31, 1995, these manufacturers had approximately $160 million of
indebtedness outstanding guaranteed by the Company. In addition, the Company
has provided letters of credit aggregating approximately $82 million,
primarily in connection with self-insurance programs.
As of December 31, 1995, the Company has entered into long-term purchase
agreements with various suppliers. Subject to the supplier's quality and
performance, the purchase commitments covered by these agreements aggregate
approximately $1,310 million in 1996, $1,320 million in 1997, $901 million in
1998, $769 million in 1999, and $779 million in 2000.
The Company leases office and warehouse space, computer hardware, and
machinery and equipment under lease agreements expiring at various dates
through 2006. At December 31, 1995, future minimum lease payments under
noncancellable operating leases aggregate approximately $53 million. Rent
expense was approximately $31 million, $28 million, and $25 million during
1995, 1994 and 1993, respectively.
The Company is involved in various claims and legal proceedings which have
arisen in the ordinary course of its business. The litigation filed in 1991
by Three Bridges
- 41 -
<PAGE>
Investment Company contesting the Company's acquisition of Johnston
Coca-Cola Bottling Group has been settled. The settlement did not involve any
payment of damages to the plaintiffs. The settlement requires that, for five
years after the settlement, any proposed merger or consolidation with,
purchase of an equity interest in, or other acquisition of an entity or other
ownership interest from The Coca-Cola Company and certain affiliated
companies for an aggregate value exceeding $10 million be approved by a
committee of independent directors of the Company. It also requires the
Company to continue its share repurchase program until at least April 1996,
and that the defendants, including the Company, pay plaintiffs' attorneys
fees up to a maximum of $350,000.
Note 16 - Supplemental Disclosures of Cash Flow Information -- Cash
payments during the year were as follows (in millions):
1995 1994 1993
---- ---- ----
Interest (net of capitalized amount) $320 $328 $330
==== ==== ====
Income taxes $ 31 $ 3 $ 10
==== ==== ====
Changes in current assets and liabilities pertaining to operating
activities were as follows (in millions):
1995 1994 1993
---- ---- ----
Trade accounts and other receivables $(35) $(12) $ 1
Inventories 17 (35) 28
Prepaid expenses and other assets (20) (9) 6
Accounts payable and accrued expenses 26 114 (13)
---- ---- ----
(Decrease) increase in cash from
operations $(12) $ 58 $ 22
==== ==== ====
In conjunction with the acquisitions of bottling companies, the value of
assets acquired, cash paid, equity and debt issued, and liabilities assumed
were as follows (in millions):
1995 1994 1993
---- ---- ----
Fair value of assets acquired $172 $ 16 $774
Cash paid (160) (12) (287)
Equity issued - - (34)
Debt issued - - (1)
---- ---- ----
Liabilities assumed $ 12 $ 4 $452
==== ==== ====
- 42 -
<PAGE>
Note 17 - Quarterly Financial Data -- Unaudited quarterly financial data
follows (in millions except per share data):
<TABLE>
<CAPTION>
Fiscal
1995 First (A) Second Third Fourth (A) Year
--------- ------ ------ ---------- ------
<S> <C> <C> <C> <C> <C>
Net Operating Revenues $1,462 $1,827 $1,841 $1,643 $6,773
====== ====== ====== ====== ======
Gross Profit $ 561 $ 674 $ 658 $ 613 $2,506
====== ====== ====== ====== ======
Net Income (Loss) Applicable to
Common Share Owners $ 2(B) $ 46 $ 35 $ (3)(C) $ 80
====== ====== ====== ====== ======
Net Income (Loss) Per Common
Share (D) $ 0.02(B) $ 0.35 $ 0.27 $(0.03)(C) $ 0.62
====== ====== ====== ====== ======
Fiscal
1994 First Second Third Fourth (A) Year
------ ------ ------ ---------- ------
Net Operating Revenues $1,320 $1,610 $1,595 $1,486 $6,011
====== ====== ====== ====== ======
Gross Profit $ 521 $ 623 $ 601 $ 563 $2,308
====== ====== ====== ====== ======
Net Income (Loss) Applicable to
Common Share Owners $ (7) $ 38 $ 25 $ 11 $ 67
====== ====== ====== ====== ======
Net Income (Loss) Per Common
Share (D) $(0.06) $ 0.29 $ 0.19 $ 0.09 $ 0.52
====== ====== ====== ====== ======
- -----------------------------------------
For quarterly reporting, the Company reports on a Friday close to
the end of the quarterly calendar period for reporting and comparison
convenience.
(A) Each quarter presented includes 91 days, except for the fourth
quarter of 1994 which includes 92 days, the first quarter of 1995
which includes 90 days, and the fourth quarter of 1995 which includes
93 days.
(B) In January 1995, the Company sold its 50% ownership interest
in Mid South for $17 million (refer to Note 2), resulting in an after
tax gain of $5 million ($0.04 per common share after taxes).
(C) During the fourth quarter of 1995, the Company shortened
the estimated vesting period related to management stock
performance awards and options resulting in additional costs
of $25 million ($0.12 per common share after taxes)(refer to Note 9).
(D) Due to the method used in calculating per share data as prescribed
by Accounting Principles Board Opinion No. 15 and the timing of
share repurchases by the Company, the per share data does not
sum in certain instances to the per share data as computed for the
quarter and the year.
</TABLE>
- 43 -
<PAGE>
COCA-COLA ENTERPRISES INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors
Coca-Cola Enterprises Inc.
We have audited the accompanying consolidated balance sheets of Coca-Cola
Enterprises Inc. as of December 31, 1995 and 1994, and the related
consolidated statements of operations, share-owners' equity, and cash flows
for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Coca-Cola Enterprises Inc. at December 31, 1995 and 1994, and the
consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Atlanta, Georgia
January 22, 1996
- 45 -
<PAGE>
<TABLE>
COCA-COLA ENTERPRISES INC.
SELECTED FINANCIAL DATA
(In millions except per share data)
<CAPTION>
Fiscal Year
---------------------------------------------------------------------------------------------------
1991
-------------------- 1986 (H)
1995(A) 1994 1993(B) 1992(C) Proforma(D) Reported 1990(E) 1989(F) 1988(G) 1987 Proforma
------- ---- ------- ------- ----------- -------- ------- ------- ------- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS SUMMARY
Net operating
revenues $6,773 $6,011 $5,465 $5,127 $ 5,027 $3,915 $3,933 $3,822 $3,821 $3,327 $3,191
Cost of sales 4,267 3,703 3,372 3,219 3,170 2,420 2,400 2,350 2,303 1,953 1,872
------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------
Gross profit 2,506 2,308 2,093 1,908 1,857 1,495 1,533 1,472 1,518 1,374 1,319
Selling, general, and
administrative
expenses 2,038 1,868 1,708 1,602 1,535 1,223 1,199 1,162 1,137 1,037 1,024
Restructuring
provision - - - - 152 152 9 - 27 - -
------ ----- ----- ------ ------ ------ ------ ------ ----- ------ ------
Operating income 468 440 385 306 170 120 325 310 354 337 295
Interest expense, net 326 310 328 312 312 210 200 193 202 160 188
Other nonoperating
income (deductions),
net (6) (3) (2) (6) (3) (2) 3 10 12 (4) (9)
Gain from sale of
bottling operations 9 - - - - - 56 11 104 - -
------ ----- ----- ------ ------ ------ ------ ------ ----- ------ ------
Income (loss) before
income taxes and
cumulative effect
of changes in
accounting
principles 145 127 55 (12) (145) (92) 184 138 268 173 98
Income taxes:
Expense (benefit)
excluding rate
change 63 58 30 3 (17) (9) 91 66 115 85 77
Rate change - federal - - 40 - - - - - - - -
------ ----- ----- ------ ------ ------ ----- ------ ---- ------ ------
Income (loss) before
cumulative effect of
changes in accounting
principles 82 69 (15) (15) (128) (83) 93 72 153 88 21
Cumulative effect of
changes in accounting
principles - - - (171) - - - - - - -
------ ----- ----- ------ ------ ------ ------ ------ ---- ------ ------
Net income (loss) 82 69 (15) (186) (128) (83) 93 72 153 88 21
Preferred stock
dividends 2 2 - - 9 9 16 18 10 - -
------ ----- ----- ------ ------ ------ ------ ------ ---- ------ ------
Net income (loss)
applicable to common
share owners $ 80 $ 67 $ (15) $ (186) $ (137) $ (92) $ 77 $ 54 $143 $ 88 $ 21
====== ===== ===== ====== ====== ====== ====== ====== ==== ====== ======
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER OPERATING DATA
Depreciation expense $ 318 $ 282 $ 254 $ 227 $ 205 $ 160 $ 150 $ 148 $143 $ 123 $ 108
Amortization expense 211 179 165 162 125 91 86 81 82 72 65
- ------------------------------------------------------------------------------------------------------------------------------------
SHARE AND PER SHARE DATA
Average common shares
outstanding 129 130 129 129 129 116 119 130 139 140 140
Net income (loss) per
common share before
cumulative effect of
changes in
accounting
principles $ 0.62 $0.52 $(0.11) $(0.11) $(1.06) $(0.79) $ 0.65 $ 0.41 $1.03 $ 0.63 $ 0.15
Net income (loss)
applicable to common
share owners 0.62 0.52 (0.11) (1.45) (1.06) (0.79) 0.65 0.41 1.03 0.63 0.15
Dividends per common
share 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 -
Closing stock price 26 7/8 18 15 1/4 12 1/4 15 3/8 15 3/8 15 1/2 16 15 14 1/4 14 1/4
- ------------------------------------------------------------------------------------------------------------------------------------
YEAR-END FINANCIAL POSITION
Property, plant and
equipment, net $2,158 $1,963 $1,890 $1,733 $1,706 $1,706 $1,373 $1,286 $1,180 $1,038 $ 850
Franchise and other
noncurrent assets 5,924 5,965 6,046 5,651 4,265 4,265 3,153 2,952 3,001 2,760 2,539
Total assets 9,064 8,738 8,682 8,085 6,677 6,677 5,021 4,732 4,669 4,250 3,811
Long-term debt 4,201 4,187 4,391 4,131 4,091 4,091 2,537 2,305 2,211 2,157 1,804
Share-owners' equity 1,435 1,339 1,260 1,254 1,442 1,442 1,627 1,680 1,808 1,526 1,448
- ------------------------------------------------------------------------------------------------------------------------------------
Fiscal periods presented are calendar years, beginning after 1991,
and fiscal years ending on the Friday nearest December 31 prior to
1991. The Company acquired subsidiaries in each year presented
and divested subsidiaries in certain periods. Such transactions,
except for: (i) the acquisition of Johnston Coca-Cola Bottling Group,
Inc. ("Johnston"), (ii) gains from the sale of certain bottling operations,
and (iii) acquisitions in 1986, 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 ("Mid South")
to the Ouachita Coca-Cola Bottling Company, Inc. ("Ouachita").
The Company signed a non-binding letter of intent to acquire 100%
of Ouachita in a transaction that is expected to close early in 1996.
The Company's 50% interest in Mid South will be reacquired as a
result of the acquisition of Ouachita.
(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 proforma 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) In February 1989, the Company sold its wholly owned
subsidiaries, Goodwill Bottling Ltd. and Goodwill Bottling
North Ltd.
(G) In December 1988, the Company sold a wholly owned
subsidiary, The Coca-Cola Bottling Company of Mid-America.
The Mid-America operations were sold to Johnston and, as
a result of the 1991 acquisition of Johnston, were reacquired
by the Company.
(H) The 1986 proforma amounts give effect to acquisitions
during that year as if they had been completed at the beginning
of 1986.
</TABLE>
- 46 - and - 47 -
<PAGE>
<PAGE> 1
EXHIBIT 21
COCA-COLA ENTERPRISES INC.
1995 FORM 10-K
REGISTRANT AND ITS SUBSIDIARIES(1)
(As of March 1, 1996)
<TABLE>
<CAPTION>
Owner of Shares
(*unless
Jurisdiction otherwise
in which noted ownership Other names under
Name organized is 100%) which engaged in business
---- ------------ --------------- -------------------------
<S> <C> <C> <C>
Coca-Cola Enterprises Inc. (Registrant) ("CCE"). . . . . Delaware N/A The Atlanta Coca-Cola Bottling Company
Atlanta Ice Makers
Coca-Cola Bottling Company of Annapolis
Coca-Cola Bottling Company of New England
Coca-Cola Bottling Company of Rhode Island
Coca-Cola Bottling Company of West Point-
LaGrange
CCE Bottling Group
Colorado Springs Coca-Cola Bottling Co.
Delaware Coca-Cola Bottling Company
Denver Coca-Cola Bottling Company
Dover Coca-Cola Bottling Company
Enterprises Media
Lamar Coca-Cola Bottling Company
The Mid-Atlantic Coca-Cola Bottling Company
Pueblo Coca-Cola Bottling Company
Austin Coca-Cola Bottling Company
("Austin") . . . . . . . . . . . . . . . . . . . . . . Texas CCE Beaumont Coca-Cola Bottling Company
Coca-Cola Bottling Company of Leesville
Coca-Cola Bottling Company of North Texas
Dallas Coca-Cola Bottling Company
Houston Coca-Cola Bottling Company
Tyler Coca-Cola Bottling Company
Waco Coca-Cola Bottling Company
The Laredo Coca-Cola Bottling Company, Inc. . . . . Texas Austin CCE Bottling Group
McAllen Coca-Cola Bottling Company
Valley Coca-Cola Bottling Company
BCI Coca-Cola Bottling Company of Los Angeles. . . . . . Delaware CCE Coca-Cola Bottling Company of California
Coca-Cola Bottling Company of Cathedral City
Coca-Cola Bottling Company of
Eureka, California
Coca-Cola Bottling Company of Hawaii
Coca-Cola Bottling Company of Imperial Valley
Coca-Cola Bottling Company of Klamath Falls
Coca-Cola Bottling Company of Las Vegas
Coca-Cola Bottling Company of Los Angeles
Coca-Cola Bottling Company of Marysville
Coca-Cola Bottling Company of
Northern California
Coca-Cola Bottling Company of Oregon
Coca-Cola Bottling Company of Port Angeles
Coca-Cola Bottling Company of San Diego
Coca-Cola Bottling Company of Spokane
CCE Bottling Group
CCE Vending Services
Diamond Head Beverages
Enterprises Media
Medford Coca-Cola Bottling Company
Ore-Cal Coca-Cola Bottling Company
Pacific Coca-Cola Bottling Company
Phoenix Coca-Cola Bottling Company
Bottling Holdings (International) Inc. ("BHI").. . . . . Delaware CCE
Bottling Holdings (Netherlands) B.V. ("BHN"). . . . Netherlands BHI
Coca-Cola Beverages Nederland B.V. . . . . . . . . Netherlands BHN
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
Owner of Shares
(*unless
Jurisdiction otherwise
in which noted ownership Other names under
Name organized is 100%) which engaged in business
---- ------------ --------------- -------------------------
<S> <C> <C> <C>
CCT Acquisition Corporation, Inc. ("CCT"). . . . . . . . Delaware CCE
Coca-Cola Bottling Company of Johnson City . . . . . Tennessee CCT (75.06%)
Roddy Coca-Cola Bottling Company, Inc. . . . . . . . Tennessee CCT (59.8%) Dr Pepper Bottling Company of Knoxville
Dr Pepper Company of Knoxville
Knoxville Coca-Cola Bottling Company
The Coca-Cola Bottling Company of
Memphis, Tenn. ("Memphis"). . . . . . . . . . . . . . Delaware CCE CCE Bottling Group
Canners of Eastern Arkansas, Inc.
The Coca-Cola Bottling Company of Brownsville
The Coca-Cola Bottling Company of Marianna
The Coca-Cola Bottling Company of Mississippi
The Coca-Cola Bottling Company of Clarksdale
Coca-Cola Bottling Company of Arkansas
Coca-Cola Bottling Company of Flippen
Coca-Cola Bottling Company of Greenville
Coca-Cola Bottling Company of Jonesboro
Coca-Cola Bottling Company of Little Rock
Coca-Cola Bottling Company of Morrilton
Coca-Cola Bottling Company of Sardis
Coca-Cola Bottling Company of Searcy
Coca-Cola Bottling Company of Shreveport. . . . . . Arkansas Memphis CCE Bottling Group
Enterprises Media
Coca-Cola Bottling Company of Texarkana . . . . . . Texas Memphis CCE Bottling Group
Enterprises Media
Memphis Beverage Production Company . . . . . . . . Tennessee Memphis CCE Bottling Group
Enterprises Consulting, Inc. ("ECI") . . . . . . . . . . Delaware CCE
DM Management of Ohio, Inc. . . . . . . . . . . . . Ohio ECI
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Owner of Shares
(*unless
Jurisdiction otherwise
in which noted ownership Other names under
Name organized is 100%) which engaged in business
---- ------------ --------------- -------------------------
<S> <C> <C> <C>
Florida Coca-Cola Bottling Company ("Florida") . . . . . Tennessee CCE Apalachicola Coca-Cola Bottling Company
Perry Coca-Cola Bottling Company
Punta Gorda Coca-Cola Bottling Company
Sarasota Coca-Cola Bottling Company
Palatka Coca-Cola Bottling Company
Orlando Coca-Cola Bottling Company
North-Flor Beverage Co.
Ocala Coca-Cola Bottling Company
St. Augustine Coca-Cola Bottling Company
St. Petersburg Coca-Cola Bottling Company
CCE-South
CCE Bottling Group
Valdosta Coca-Cola Bottling Company
West-Flo Beverage Co.
Tallahassee Coca-Cola Bottling Company
Tampa Coca-Cola Bottling Company
Marianna Coca-Cola Bottling Company
Leesburg Coca-Cola Bottling Company
Coca-Cola Bottling Co. of the Virgin Islands
(St. Thomas)
Coca-Cola Bottling Co. of the Virgin Islands
(St. Croix)
Coca-Cola Bottling Company of Miami
Brooksville Coca-Cola Bottling Company
Cent-Flo Beverage Co.
Daytona Coca-Cola Bottling Company
Ft. Pierce Coca-Cola Bottling Company
Fort Myers Coca-Cola Bottling Company
Lake City Coca-Cola Bottling Company
Lakeland Coca-Cola Bottling Company
Jacksonville Coca-Cola Bottling Company
Highlands Coca-Cola Bottling Company
Florco Financial Corp.
Gainesville Coca-Cola Bottling Company
Brevard Coca-Cola Bottling Company
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
Owner of Shares
(*unless
Jurisdiction otherwise
in which noted ownership Other names under
Name organized is 100%) which engaged in business
---- ------------ --------------- -------------------------
<S> <C> <C> <C>
Johnston Coca-Cola Bottling Group, Inc. ("JCCBG"). . . . Delaware CCE Alabama Coca-Cola Bottling Company
Burlington Coca-Cola Bottling Company
Central States Coca-Cola Bottling Company
Centralia Coca-Cola Bottling Company
Champaign Coca-Cola Bottling Company
Cincinnati Coca-Cola Bottling Company
Coca-Cola Bottling Company of St. Louis
Coca-Cola Bottling Company of Bloomington
Coca-Cola Bottling Company of Mt. Pleasant
Coca-Cola Bottling Company of Muskegon
Coca-Cola Bottling Company of Michigan
Coca-Cola Bottling Company of Ottumwa
Coca-Cola Bottling Company of Port Huron
Danville Coca-Cola Bottling Company
Dayton Coca-Cola Bottling Company
Decatur Coca-Cola Bottling Company
Duquoin Coca-Cola Bottling Company
Erie Coca-Cola Bottling Company
Galesburg Coca-Cola Bottling Company
Johnston Coca-Cola Bottling Company
Lincoln Coca-Cola Bottling Company
Mid-America Packaging Company
Midwest Coca-Cola Bottling Company
Olney Coca-Cola Bottling Company
Peoria Coca-Cola Bottling Company
Peru Coca-Cola Bottling Company
Portsmouth Coca-Cola Bottling Company
Springfield Coca-Cola Bottling Company
The Coca-Cola Bottling Company of
Cedar Rapids
The Coca-Cola Bottling Company of Mid-America
The Wichita Coca-Cola Bottling Company
Bluegrass Coca-Cola Bottling Company . . . . . . . Kentucky JCCBG Coca-Cola Bottling Company of Louisville
Evansville Coca-Cola Bottling Company
Hopkinsville Coca-Cola Bottling Company
Jasper Coca-Cola Bottling Company
Louisville Coca-Cola Bottling Company
Mid-States Coca-Cola Bottling Company
The Coca-Cola Bottling Company of
Northern Ohio . . . . . . . . . . . . . . . . . Delaware JCCBG The Akron Coca-Cola Bottling Company
Circleville Coca-Cola Bottling Company
Coca-Cola Bottling Company of Columbus
Coca-Cola Bottling Company of Toledo
Elyria Coca-Cola Bottling Company
Findlay Coca-Cola Bottling Company
Great Lakes Canning
Mansfield Coca-Cola Bottling Company
Newark Coca-Cola Bottling Company
Twinsburg Production
Youngstown Coca-Cola Bottling Company
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
Owner of Shares
(*unless
Jurisdiction otherwise
in which noted ownership Other names under
Name organized is 100%) which engaged in business
---- ------------ --------------- -------------------------
<S> <C> <C> <C>
Goal Standard Company. . . . . . . . . . . . . . . Michigan JCCBC
Johnston Technology Investments Inc . . . . . . . Delaware JCCBG
Mid-America Waste Water Treatment, Inc.. . . . . . Delaware JCCBG
Midwest Canners, Inc.. . . . . . . . . . . . . . . Delaware JCCBG
Pacific Western Group, Inc.. . . . . . . . . . . . Delaware JCCBG
Ouachita Coca-Cola Bottling Company, Inc. ("Ouachita"). Louisiana CCE
Alexandria Coca-Cola Bottling Company, Ltd.
("Alexandria") . . . . . . . . . . . . . . . . . Louisiana Ouachita
Bunkie Coca-Cola Bottling Company, Inc. . . . . Louisiana Alexandria
Joe A. Biedenharn Corporation ("Biedenharn") . . . Louisiana Ouachita
Coca-Cola Bottling Company of Vicksburg . . . . Mississippi Biedenharn
The Coca-Cola Bottling Company of the
Mid South ("Mid South"). . . . . . . . . . . . . Delaware Ouachita
Jackson Coca-Cola Bottling Company ("Jackson"). Mississippi Mid South
Kwik-Ad Advertising, Inc. . . . . . . . . . Mississippi Jackson
Mississippi Coca-Cola Bottling Company, Inc.
("Mississippi)" . . . . . . . . . . . . . . . . Louisiana Ouachita
Natchez Coca-Cola Bottling Company, Inc. . . . Mississippi Mississippi
Dr Pepper Bottling Co. of Natchez, Inc. . . . . Mississippi Mississippi
Pine Bluff Coca-Cola Bottling Company, Inc.
("Pine Bluff") . . . . . . . . . . . . . . . . . Arkansas Ouachita
Coca-Cola Bottling Company of
South Arkansas. . . . . . . . . . . . . . . . Arkansas Pine Bluff Dr Pepper Bottling Company of
Pine Bluff, Arkansas
Ruston Coca-Cola Bottling Company, Inc. . . . . . . Louisiana Ouachita
The Louisiana Coca-Cola Bottling Company, Ltd.
("Louisiana"). . . . . . . . . . . . . . . . . . Louisiana CCE Dr Pepper Bottling Company of New Orleans
The Coca-Cola Bottling Company of New Iberia
CCE Bottling Group
Hygeia Coca-Cola Bottling Company. . . . . . . . Florida Louisiana CCE Bottling Group
Enterprises Media
Payroll Services (International) Inc. . . . . . . . . . Delaware CCE
Vending Holding Company. . . . . . . . . . . . . . . . . Georgia CCE
The Wave Insurance Company . . . . . . . . . . . . . . . Bermuda CCE (99%)
</TABLE>
- -----------------
(1) This Exhibit omits certain subsidiaries which, considered in the aggregate
as a single subsidiary, would not constitute a significant subsidiary.
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements of
Coca-Cola Enterprises Inc. listed below of our report dated January 22, 1996,
with respect to the consolidated financial statements and schedule of Coca-Cola
Enterprises Inc. included and/or incorporated by reference in this Annual
Report (Form 10-K) for the year ended December 31, 1995.
* Registration Statement No. 33-18039 on Form S-8, as amended, dated October
21, 1987 and related Prospectus
* Registration Statement No. 33-18495 on Form S-8, as amended, dated November
13, 1987 and related Prospectus
* Registration Statement No. 33-38771 on Form S-8 dated January 31, 1991 and
related Prospectus
* Registration Statement No. 33-44448 on Form S-8 dated December 18, 1991 and
related Prospectus
* Registration Statement No. 33-46675 on Form S-3 dated May 26, 1992 and
related Prospectus
* Registration Statement No. 33-48482 on Form S-8 dated June 17, 1992 and
related Prospectus
* Registration Statement No. 33-53219 on Form S-8 dated April 22, 1994 and
related Prospectus
* Registration Statement No. 33-53221 on Form S-8 dated April 22, 1994 and
related Prospectus
* Registration Statement No. 33-53223 on Form S-8 dated April 22, 1994 and
related Prospectus
* Registration Statement No. 33-53225 on Form S-8 dated April 22, 1994 and
related Prospectus
* Registration Statement No. 33-53227 on Form S-8 dated April 22, 1994 and
related Prospectus
* Registration Statement No. 33-53229 on Form S-8 dated April 22, 1994 and
related Prospectus
* Registration Statement No. 33-54951 on Form S-8 dated August 5, 1994 and
related Prospectus
* Registration Statement No. 33-54953 on Form S-8 dated August 5, 1994 and
related Prospectus
* Registration Statement No. 33-58695 on Form S-8, as amended, dated May 18,
1995 and related Prospectus
* Registration Statement No. 33-58697 on Form S-8, as amended, dated May 18,
1995 and related Prospectus
* Registration Statement No. 33-58699 on Form S-8, as amended, dated May 18,
1995 and related Prospectus
* Registration Statement No. 33-62757 on Form S-3, as amended, dated November
14, 1995 and related Prospectus
* Registration Statement No. 33-65257 on Form S-8 dated December 21, 1995 and
related Prospectus
* Registration Statement No. 33-65261 on Form S-8 dated December 21, 1995 and
related Prospectus
* Registration Statement No. 33-65413 on Form S-8 dated December 27, 1995 and
related Prospectus
/s/ ERNST & YOUNG LLP
Atlanta, Georgia
March 1, 1996
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, M. DOUGLAS IVESTER, Chairman of the
Board of Directors of Coca-Cola Enterprises Inc. (the "Company"), do hereby
appoint Summerfield K. Johnston, Jr., Vice Chairman and Chief Executive Officer
of the Company, John R. Alm, Senior Vice President and Chief Financial Officer
of the Company, Lowry F. Kline, General Counsel of the Company and J. Guy
Beatty, Jr., Secretary of the Company, or any one of them, my true and lawful
attorney for me and in my name for the purpose of executing on my behalf the
Company's Annual Report on Form 10-K for the year ended December 31, 1995, or
any amendment or supplement thereto, and causing such Annual Report or any such
amendment or supplement to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of February,
1996.
/s/ M. DOUGLAS IVESTER
----------------------------------
Chairman of the Board of Directors
Coca-Cola Enterprises Inc.
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, HENRY A. SCHIMBERG, President, Chief
Operating Officer and a Director of Coca-Cola Enterprises Inc. (the "Company"),
do hereby appoint Summerfield K. Johnston, Jr., Vice Chairman and Chief
Executive Officer of the Company, John R. Alm, Executive Vice President and
Chief Financial Officer of the Company, Lowry F. Kline, General Counsel of the
Company, and J. Guy Beatty, Jr., Secretary of the Company, or any one of them,
my true and lawful attorney for me and in my name in any and all capacities for
the purpose of executing on my behalf the Company's Annual Report on Form 10-K
for the year ended December 31, 1995, or any amendment or supplement thereto,
and causing such Annual Report or any such amendment or supplement to be filed
with the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of February,
1996.
/s/ HENRY A. SCHIMBERG
-----------------------------------
President, Chief Operating Officer
and Director
Coca-Cola Enterprises Inc.
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, HOWARD G. BUFFETT, a Director of
Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of February,
1996.
/s/ HOWARD G. BUFFETT
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, JOHN L. CLENDENIN, a Director of
Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of February,
1996.
/s/ JOHN L. CLENDENIN
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, JOHNNETTA B. COLE, a Director of
Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of February,
1996.
/s/ JOHNNETTA B. COLE
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, T. MARSHALL HAHN, JR., a Director of
Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of February,
1996.
/s/ T. MARSHALL HAHN, JR.
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, CLAUS M. HALLE, a Director of
Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of February,
1996.
/s/ CLAUS M. HALLE
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, JOHN E. JACOB, a Director of
Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of February,
1996.
/s/ JOHN E. JACOB
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, L. PHILLIP HUMANN, a Director of
Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Executive Vice President and Chief Financial Officer of the Company,
Lowry F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr.,
Secretary of the Company, or any one of them, my true and lawful attorney for
me and in my name in any and all capacities for the purpose of executing on my
behalf the Company's Annual Report on Form 10-K for the year ended December 31,
1995, or any amendment or supplement thereto, and causing such Annual Report or
any such amendment or supplement to be filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of February,
1996.
/s/ L. PHILLIP HUMANN
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, E. NEVILLE ISDELL, a Director of
Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Executive Vice President and Chief Financial Officer of the Company,
Lowry F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr.,
Secretary of the Company, or any one of them, my true and lawful attorney for
me and in my name in any and all capacities for the purpose of executing on my
behalf the Company's Annual Report on Form 10-K for the year ended December 31,
1995, or any amendment or supplement thereto, and causing such Annual Report or
any such amendment or supplement to be filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of February,
1996.
/s/ E. NEVILLE ISDELL
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, ROBERT A. KELLER, a Director of
Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of February,
1996.
/s/ ROBERT A. KELLER
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, SCOTT L. PROBASCO, JR., a Director
of Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John R.
Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry F.
Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of the
Company, or any one of them, my true and lawful attorney for me and in my name
for the purpose of executing on my behalf the Company's Annual Report on Form
10-K for the year ended December 31, 1995, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of February,
1996.
/s/ SCOTT L. PROBASCO, JR.
-----------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 13
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, FRANCIS A. TARKENTON, a Director of
Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of February,
1996.
/s/ FRANCIS A. TARKENTON
------------------------------------
Director, Coca-Cola Enterprises Inc.
<TABLE> <S> <C>
<ARTICLE> 5
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