<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 2)
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: July 26, 1996
(Date of earliest event reported)
COCA-COLA ENTERPRISES INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 1-09300 58-0503352
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
2500 WINDY RIDGE PARKWAY, ATLANTA, GEORGIA 30339
(Address of principal executive offices, including zip code)
(770) 989-3000
(Registrant's telephone number, including area code)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired:
SA Beverage Sales Holding NV, Coca-Cola Beverages SA, and
Coca-Cola Production SA Combined Financial Statements -
for the years ended December 31, 1995, 1994, and 1993:
Report of Independent Auditors
Combined Balance Sheets
Combined Statements of Income
Combined Statements of Cash Flows
Combined Statements of Share-Owners' Equity
Notes to Combined Financial Statements
SA Beverage Sales Holding NV, Coca-Cola Beverages SA, and
Coca-Cola Production SA Unaudited Interim Combined Financial
Statements - for the six month periods ended June 30, 1996
and June 30, 1995:
Combined Balance Sheets
Combined Statements of Income
Combined Statements of Cash Flow
Notes to Combined Financial Statements
Amalgamated Beverages Great Britain Limited Annual Report and
Accounts - for the years ended December 31, 1995, 1994,
and 1993:
Report of the Auditors
Group Profit and Loss Account
Group Statement of Total Recognised Gains and Losses and
Reconciliation of Movements in Shareholders' Funds
Balance Sheets
Group Cash Flow Statement
Notes on the Accounts
Amalgamated Beverages Great Britain Limited Report and Accounts -
for the 24-week periods ended June 15, 1996 and
June 17, 1995 (unaudited)
Group Profit and Loss Account
Group Balance Sheet
Group Cash Flow Statement
Notes on the Accounts
(b) Pro Forma Financial Information:
Coca-Cola Enterprises Inc. Pro Forma Combined Condensed Financial
Information - for the six month period ended June 28, 1996
and for the year ended December 31, 1995 (unaudited):
Introductory Information
Pro Forma Combined Condensed Statement of Operations
for the Six Months Ended June 28, 1996
Pro Forma Combined Condensed Statements of Operations
for the Quarters Ended March 29, 1996 and June 28,
1996
Pro Forma Combined Condensed Statement of Operations
for the Year Ended December 31, 1995
Pro Forma Combined Condensed Statements of Operations
for the Quarters Ended March 31, 1995, June 30, 1995,
September 29, 1995 and December 31, 1995
Pro Forma Combined Condensed Balance Sheet as of June 28, 1996
Notes to Unaudited Pro Forma Combined Condensed Financial
Information
(c) Exhibits.
EXHIBIT NO. 23.1 Consent of Ernst & Young Reviseurs
d'Entreprises SCC.
EXHIBIT NO. 23.2 Consent of Arthur Andersen.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COCA-COLA ENTERPRISES INC.
(Registrant)
By: /s/ Lowry F. Kline
-------------------------
Name: Lowry F. Kline
Title: Senior Vice President and
General Counsel
Date: December 20, 1996
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
Financial Statements Numbers
-------------------- -------
SA Beverage Sales Holding NV, Coca-Cola Beverages SA, and
Coca-Cola Production SA Combined Financial Statements -
for the years ended December 31, 1995, 1994, and 1993:
Report of Independent Auditors F-3
Combined Balance Sheets F-4
Combined Statements of Income F-6
Combined Statements of Cash Flows F-7
Combined Statements of Share-Owners' Equity F-8
Notes to Combined Financial Statements F-9
SA Beverage Sales Holding NV, Coca-Cola Beverages SA, and
Coca-Cola Production SA Unaudited Interim Combined
Financial Statements - for the six month periods ended
June 30, 1996 and June 30, 1995:
Combined Balance Sheets F-39
Combined Statements of Income F-41
Combined Statements of Cash Flow F-42
Notes to Combined Financial Statements F-43
Amalgamated Beverages Great Britain Limited Annual Report and
Accounts - for the years ended December 31, 1995, 1994,
and 1993:
Report of the Auditors F-50
Group Profit and Loss Account F-51
Group Statement of Total Recognised Gains and Losses and
Reconciliation of Movements in Shareholders' Funds F-52
Balance Sheets F-53
Group Cash Flow Statement F-54
Notes on the Accounts F-55
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
Financial Statements Numbers
-------------------- -------
Amalgamated Beverages Great Britain Limited Report and Accounts -
for the 24-week periods ended June 15, 1996 and
June 17, 1995 (unaudited)
Group Profit and Loss Account F-71
Group Balance Sheet F-72
Group Cash Flow Statement F-73
Notes on the Accounts F-74
Coca-Cola Enterprises Inc. Pro Forma Combined Condensed Financial
Information - for the six month period ended June 28, 1996
and for the year ended December 31, 1995 (unaudited):
Introductory Information PF-1
Pro Forma Combined Condensed Statement of Operations PF-4
for the Six Months Ended June 28, 1996
Pro Forma Combined Condensed Statements of Operations
for the Quarters Ended March 29, 1996 and June 28,
1996 PF-6
Pro Forma Combined Condensed Statement of Operations
for the Year Ended December 31, 1995 PF-7
Pro Forma Combined Condensed Statements of Operations
for the Quarters Ended March 31, 1995, June 30, 1995,
September 29, 1995 and December 31, 1995 PF-9
Pro Forma Combined Condensed Balance Sheet as of June 28, 1996 PF-10
Notes to Unaudited Pro Forma Combined Condensed Financial
Information PF-11
<PAGE>
COMBINED FINANCIAL STATEMENTS
SA Beverage Sales Holding NV
Coca-Cola Beverages SA
Coca-Cola Production SA
December 31, 1995
F-1
<PAGE>
COMBINED FINANCIAL STATEMENTS
SA Beverage Sales Holding NV
Coca-Cola Beverages SA
Coca-Cola Production SA
December 31, 1995
Page
----
Report of Independent Auditors 3
Combined Balance Sheets 4
Combined Statements of Income 6
Combined Statements of Cash Flows 7
Combined Statements of Share-Owners' Equity 8
Notes to Combined Financial Statements 9
F-2
<PAGE>
Report of Independent Auditors
To the Board of Directors and Share Owners
SA Beverage Sales Holding NV
Coca-Cola Beverages SA
Coca-Cola Production SA
We have audited the accompanying combined balance sheets of SA Beverage Sales
Holding NV and subsidiaries, Coca-Cola Beverages SA and subsidiaries, and
Coca-Cola Production SA as of December 31, 1995 and 1994, and the related
combined statements of income, share-owners' equity, and cash flows for each of
the three years in the period ended December 31, 1995, expressed in United
States dollar equivalents. These financial statements are the responsibility of
the combined Companies' 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 that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position of SA Beverage Sales
Holding NV and subsidiaries, Coca-Cola Beverages SA and subsidiaries, and
Coca-Cola Production SA as of December 31, 1995 and 1994, and the combined
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1995, in conformity with accounting principles
generally accepted in the United States.
Brussels, June 21, 1996
Ernst & Young Reviseurs d'Entreprises SCC
Represented by
/s/ Daniel J. Van Cutsem
- -------------------------
Daniel J. Van Cutsem
Partner
F-3
<PAGE>
COMBINED BALANCE SHEETS
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31
(In thousands) 1995 1994
- -------------- ---- ----
ASSETS
CURRENT
Cash and cash equivalents $ 142,186 $ 65,888
Trade accounts and notes receivable, less
allowances of $5,168 in 1995 and $2,827
in 1994 172,162 187,403
Inventories 80,591 88,562
Prepaid expenses and other current assets 60,395 62,604
Due from affiliates 15,238 132,578
---------- ----------
TOTAL CURRENT ASSETS 470,572 537,035
OTHER LONG-TERM ASSETS 9,172 9,747
PROPERTY, PLANT AND EQUIPMENT
Land 17,806 16,725
Buildings and improvements 144,735 131,505
Machinery and equipment 434,785 352,989
Containers 49,604 37,168
---------- ----------
646,930 538,387
Less allowances for depreciation 184,950 132,354
---------- ----------
461,980 406,033
FRANCHISE ASSETS 337,716 316,552
---------- ----------
$1,279,440 $1,269,367
========== ==========
See Notes to Combined Financial Statement
F-4
<PAGE>
COMBINED BALANCE SHEETS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31
(In thousands) 1995 1994
- -------------- ---- ----
LIABILITIES AND SHARE-OWNERS' EQUITY
CURRENT
Bank loans and overdrafts $ 13,216 $ 100,917
Trade accounts and notes payable 75,147 75,134
Accrued expenses and other payables 184,328 170,021
Current maturities of long-term debt 2,846 6,816
Accrued taxes 23,031 28,437
Due to affiliates 43,639 44,406
---------- ----------
TOTAL CURRENT LIABILITIES 342,207 425,731
ADVANCES FROM AFFILIATES 292,264 261,465
LONG-TERM DEBT 25,130 25,813
OTHER LONG-TERM LIABILITIES 12,828 12,638
DEFERRED INCOME TAXES 4,166 1,208
SHARE-OWNERS' EQUITY
Common stock 604,574 602,843
Capital surplus (deficit) (67,633) (69,481)
Reinvested earnings 18,712 13,527
Foreign currency translation adjustment 47,192 (4,377)
---------- ----------
602,845 542,512
---------- ----------
$1,279,440 $1,269,367
========== ==========
See Notes to Combined Financial Statements
F-5
<PAGE>
COMBINED STATEMENTS OF INCOME
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
Year ended December 31
(In thousands) 1995 1994 1993
- -------------- ---- ---- ----
NET OPERATING REVENUES $1,452,154 $1,197,498 $876,492
Cost of goods sold 1,057,051 867,324 635,828
---------- ---------- --------
GROSS PROFIT 395,103 330,174 240,664
Selling, administrative and general expenses 323,479 260,455 196,666
---------- ---------- --------
OPERATING INCOME 71,624 69,719 43,998
Interest income 7,644 5,385 5,449
Interest expense 19,904 13,242 7,336
Net foreign exchange gains (losses) (384) 828 164
Other income (deductions) - net (6,894) (3,487) (523)
---------- ---------- --------
INCOME BEFORE INCOME TAXES 52,086 59,203 41,752
Income tax expense (benefit) 4,372 (1,584) 2,066
---------- ---------- --------
NET INCOME $47,714 $60,787 $39,686
========== ========== ========
See Notes to Combined Financial Statements
F-6
<PAGE>
COMBINED STATEMENTS OF CASH FLOWS
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
Year ended December 31
(In thousands) 1995 1994 1993
- -------------- ---- ---- ----
OPERATING ACTIVITIES
Net income $ 47,714 $ 60,787 $ 39,686
Depreciation and amortization 58,068 45,417 31,214
Deferred income taxes 2,966 (3,524) 1,688
Restructuring charge and net losses on
disposals of assets 5,778 10,901 1,228
Net decrease (increase) in other long-term
assets 160 1,119 (2,716)
Other noncash items 4,122 3,035 3,213
Net change in operating assets and liabilities 42,722 (25,195) 3,034
-------- --------- ---------
Net cash provided by operating activities 161,530 92,540 77,347
-------- --------- ---------
INVESTING ACTIVITIES
Purchases of property, plant and equipment (82,698) (76,913) (48,763)
Acquisitions of bottling companies (net of
cash acquired) - (79,035) (97,932)
Proceeds from disposals of assets 2,560 5,029 3,749
Other investing activities 1,225 (556) (359)
-------- --------- ---------
Net cash used in investing activities (78,913) (151,475) (143,305)
-------- --------- ---------
FINANCING ACTIVITIES
Issuances of debt - 113,655 -
Payments of debt (102,660) (562) (617)
Amounts received from affiliates 124,058 96,007 105,973
Amounts paid to affiliates - (112,865) (25,990)
Increases in common stock 1,731 - 25,110
Repayment of capital - - (34,200)
Dividends (42,529) (46,172) (5,135)
Other financing activities 6,135 6,142 (1,561)
-------- --------- ---------
Net cash provided by (used in) financing
activities (13,265) 56,205 63,580
-------- --------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS 6,946 8,097 (8,352)
-------- --------- ---------
CASH AND CASH EQUIVALENTS
Net increase (decrease) during the year 76,298 5,367 (10,730)
Balance at beginning of year 65,888 60,521 71,251
-------- --------- ---------
Balance at end of year $142,186 $ 65,888 $ 60,521
======== ========= =========
See Notes to Combined Financial Statements
F-7
<PAGE>
COMBINED STATEMENTS OF SHARE-OWNERS' EQUITY
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
Year ended December 31
<TABLE>
<CAPTION>
Capital Reinvested Foreign
Common surplus earnings currency
(In thousands) stock (deficit) (deficit) translation Total
- ---------------------------- -------- --------- ---------- ----------- ------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1992 $26,208 $512,733 $(35,639) $(18,201) $485,101
Increase in common stock 25,110 - - - 25,110
Capital repayment - (34,200) - - (34,200)
Corporate capital contribution - 1,551 - - 1,551
Translation adjustments - - - (25,568) (25,568)
Net income - - 39,686 - 39,686
Dividends - - (5,135) - (5,135)
------- -------- -------- -------- --------
Balance at December 31, 1993 51,318 480,084 (1,088) (43,769) 486,545
Increase in common stock
transferred from capital
surplus 567,513 (567,513) - - -
Decrease in common stock
transferred to capital
surplus (15,988) 15,988 - - -
Corporate capital contribution - 1,960 - - 1,960
Translation adjustments - - - 39,392 39,392
Net income - - 60,787 - 60,787
Dividends - - (46,172) - (46,172)
------- -------- --------- -------- --------
Balance at December 31, 1994 602,843 (69,481) 13,527 (4,377) 542,512
Increase in common stock 1,731 - - - 1,731
Corporate capital contribution - 1,848 - - 1,848
Translation adjustments - - - 51,569 51,569
Net income - - 47,714 - 47,714
Dividends - - (42,529) - (42,529)
------- -------- --------- -------- --------
Balance at December 31, 1995 $604,574 $(67,633) $ 18,712 $ 47,192 $602,845
======== ======== ========= ======== ========
</TABLE>
See Notes to Combined Financial Statements
F-8
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
1. Accounting policies
The significant accounting policies and practices followed by the entities
included in the accompanying combined financial statements are in conformity
with accounting principles generally accepted in the United States ("US
GAAP").
Combination
The accompanying combined financial statements, expressed in United States
dollar equivalents, include the accounts of SA Beverage Sales Holding NV and
subsidiaries ("BSH"), Coca-Cola Beverages SA and subsidiaries ("CCBSA"), and
Coca-Cola Production SA ("CCP"), (collectively "the combined Companies").
All significant intercompany accounts and transactions are eliminated.
The companies included in the accompanying combined financial statements
maintain their official accounting records and prepare their separate
financial statements for domestic purposes in accordance with accounting
practices and in the currencies of their respective countries (Belgian
francs for BSH and French francs for CCBSA and CCP). These separate
financial statements issued for domestic purposes are adjusted to reflect US
GAAP and are subsequently translated into United States dollar equivalents
for purposes of combination. It should not be construed that the assets and
liabilities, expressed in United States dollar equivalents, can actually be
realized in or extinguished by United States dollars at the exchange rates
used in the accompanying translation.
Organization
The combined Companies, which are effectively wholly-owned indirect
subsidiaries of The Coca-Cola Company ("TCCC"), market, distribute and
produce nonalcoholic beverages under bottling and canning agreements with
TCCC. BSH and CCBSA operate in Belgium and France. Their franchise
territories include approximately 90% of the population of France and all of
the population of Belgium. CCP operates in France and sells to licensed
bottlers and canners of TCCC beverages primarily in Germany and The
Netherlands, in addition to supplying BSH and CCBSA. (See also notes 6, 12,
18 and 23 for additional disclosures regarding related party relationships
and transactions).
F-9
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
1. Accounting policies (Continued)
Marketing Costs and Support Arrangements
BSH and CCBSA participate to varying degrees in several advertising and
marketing programs. Certain costs incurred by the combined Companies under
these programs have historically been reimbursed by TCCC (see also note 18).
All costs related to marketing and advertising the combined Companies'
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.
Cash equivalents
Marketable securities that are highly liquid and have maturities of three
months or less at the date of purchase are classified as cash equivalents.
Inventories
Inventories are valued at the lower of cost or market value. Cost is
determined on the basis of weighted average cost or first-in, first-out
methods.
Property, plant and equipment
Property, plant and equipment are stated at cost, less allowances for
depreciation, and include assets acquired under capital lease arrangements
as well as interest relating to the financing of constructed assets until
the assets are placed in service. Property, plant and equipment are
depreciated by the straight-line method over the estimated useful lives of
the assets which are as follows:
Land improvements 20 years
Buildings and improvements 40 years
Leasehold improvements 40 years
Machinery and equipment 12 years
Furniture and fixtures 10 years
Vendors, coolers and dispensers 9 years
Vehicles 5 or 6 years
Computers and peripheral equipment 3 to 6 years
F-10
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
1. Accounting policies (Continued)
Property, plant and equipment (Continued)
Assets held under capital leases are depreciated over the term of the lease
(including potential extensions, where applicable). Depreciation expense,
including depreciation on capital leases and amortization of leasehold
improvements, amounted to approximately $48.8 million in 1995, $38 million
in 1994 and $24.4 million in 1993.
Repairs, maintenance and renewal costs which do not materially prolong the
useful life of an asset are expensed as incurred. Repairs and maintenance
expense amounted to approximately $20.6 million in 1995, $15.6 million in
1994 and $10.6 million in 1993.
Returnable containers and consignment liabilities
Returnable containers consist of returnable pallets, bottles and cases and
are accounted for as non-depreciable assets included in property, plant and
equipment. Returnable containers are recorded at the lower of cost or
current deposit price when they are initially placed in service. The excess
of original cost over the deposit price, if any, is expensed currently with
the exception of any excess on the introduction of new types of containers
which may be amortized on a straight-line basis over three years.
Subsequent increases in deposit prices result in an increase in the carrying
value of the corresponding returnable containers in trade up to, but not
exceeding, their original historical cost. Conversely, decreases in deposit
prices result in a corresponding reduction to the carrying values of the
containers.
Franchise assets
Franchise agreements contain performance requirements and convey to the
franchisee the rights to distribute and sell products of the franchiser
within specified territories. Franchise assets, representing the excess of
the purchase price over the fair value of the net assets of businesses
acquired, are stated at cost and amortized on a straight-line basis over the
estimated future periods to be benefited (40 years). Accumulated
amortization of franchise assets amounted to approximately $38.6 million and
$26.9 million at December 31, 1995 and 1994, respectively.
F-11
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
1. Accounting policies (Continued)
Use of estimates
The preparation of financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Although these
estimates represent management's best estimates given knowledge of current
events and actions it may undertake in the future, they may ultimately
differ from actual results.
Changes in accounting principles
In 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("SFAS 121").
The combined Companies' required adoption date is January 1, 1996. SFAS 121
standardizes the accounting practices for the recognition and measurement of
impairment losses on certain long-lived assets. The combined Companies
anticipate the adoption of SFAS 121 will not have a material impact on their
results of operations or financial position. However, the provisions of SFAS
121 will require certain charges historically recorded by the combined
Companies in other income (deductions) - net to be included in operating
income.
2. History and legal structure of the entities included in the combined
financial statements
SA Beverage Sales Holding NV
BSH is incorporated in Belgium as a "societe anonyme - naamloze
vennootschap" (joint stock company) and is a wholly-owned indirect
subsidiary of TCCC. BSH was originally incorporated in 1989 under the name
SA Beverage Holdings (1989) NV. Between 1989 and 1991, BSH acquired several
independent franchise bottlers, and certain of the legal entities acquired
were merged into it, directly or indirectly. BSH's name was successively
changed to SA Coca-Cola Beverages (1991) NV in 1991, to SA Coca-Cola
Beverages Belgium NV in 1994, and to its current name on March 5, 1996.
F-12
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
2. History and legal structure of the entities included in the combined
financial statements (Continued)
SA Beverage Sales Holding NV (Continued)
On November 16, 1993, BSH acquired 72% of the outstanding shares of
Belbottling NV, a toll packer of beverages of TCCC held by Interbrew, a
leading Belgian brewery. Belbottling simultaneously acquired from Interbrew
72% of the outstanding shares of Socodrink SA/NV, a franchise bottler of
beverages of TCCC, and 100% of the outstanding shares of Coca-Cola Bottling
(South & West Belgium) SA/NV ("CCBS&W"), also a franchise bottler. BSH
already owned the remaining 28% of the shares of Belbottling and Socodrink
(see also note 3). On December 30, 1993, Socodrink was merged into
Belbottling which changed its name to Socodrink ("New Socodrink").
On August 5, 1994, New Socodrink acquired all of the outstanding shares of
the independent franchise bottlers Antwerpco NV and Gentopco NV owned by the
Van Milders family (see also note 3).
On September 13, 1994, SA Coca-Cola Production Belgium NV was incorporated
as a wholly-owned subsidiary of BSH. Its name was subsequently changed to SA
Coca-Cola Bottlers Belgium NV ("Bottlers").
On December 29, 1995, CCBS&W, Antwerpco and Gentopco were merged into New
Socodrink.
On February 14, 1996, BSH contributed its bottling activities to New
Socodrink in exchange for shares with retroactive effect from January 1,
1996. New Socodrink changed its name to SA Coca-Cola Beverages Belgium NV
("CCBB") on March 5, 1996.
As a result of the above changes, the current legal structure of the Belgian
Coca-Cola bottling entities comprises BSH (parent company without activity
other than holding the shares in its subsidiaries) and its two wholly-owned
operating subsidiaries CCBB and Bottlers.
F-13
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
2. History and legal structure of the entities included in the combined
financial statements (Continued)
Coca-Cola Beverages SA
CCBSA is registered in France as a "societe anonyme" (joint stock
company) and is a wholly-owned, indirect subsidiary of TCCC.
The Company was originally incorporated in 1987 under the name Coca-Cola
Distribution SA. In 1989, Coca-Cola Distribution purchased from the Pernod
Ricard Company substantially all of the shares in four of its subsidiaries
which were the primary bottlers and distributors of beverages of TCCC in
France: Societe Parisienne de Boissons Gazeuses (100%), Societe Regionale de
Boissons Gazeuses (51%), Societe Vichyssoise de Boissons Gazeuses (100%) and
Grande Limonaderie de Vichy (100%). The remaining shares of Societe
Regionale de Boissons Gazeuses were purchased from The Coca-Cola Export
Corporation ("TCCEC") (26%), a wholly-owned subsidiary of TCCC, and
Brasseries et Glaciere Internationales (23%), a company not affiliated with
the Pernod Ricard Company or TCCC.
In 1989, Coca-Cola Distribution merged with its four subsidiaries and the
resulting entity was renamed Coca-Cola Beverages SA.
Coca-Cola Production SA
CCP is registered in France as a "societe anonyme" (joint stock company) and
was incorporated in 1987 in the Industrial Zone of Bergues (Dunkirk). CCP is
a wholly-owned subsidiary of Barlan Incorporated, a company incorporated in
the state of Delaware and a wholly-owned indirect subsidiary of TCCC.
3. Acquisitions
On November 16, 1993, BSH completed the acquisition of all of the
outstanding shares of the Coca-Cola bottling and toll packing operations
owned by Interbrew. The total purchase price amounted to approximately
$110.9 million and was financed through a subscription of common stock of
BSH (approximately $25.1 million) by Beverage Products, Ltd, a wholly-owned
subsidiary of TCCC, and through advances from TCCEC.
F-14
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
3. Acquisitions (Continued)
On August 5, 1994, BSH completed the acquisition of all of the
outstanding shares of Antwerpco and Gentopco, two independent franchise
bottlers owned by the Van Milders family. These acquisitions were
financed through an advance from SA Coca-Cola Services NV. The total
purchase price of approximately $87.5 million was paid except for
amounts due to be paid as follows (in thousands):
January 1, 1996 $ 816
January 1, 1997 816
January 1, 1998 816
January 1, 1999 816
August 5, 2004 4,605
-------
$ 7,869
=======
The amounts payable under these share purchase agreements bear interest
from the closing date at the thirty-day Belgian Interbank Offered Rate
("BIBOR") plus 2%, such interest to be recalculated as of the first
business day of each month utilizing the average BIBOR rate published or
announced on such first business day (see also note 13).
The acquisitions described above were accounted for by the purchase
method and, accordingly, the results of operations of Belbottling,
Socodrink, CCBS&W, Antwerpco and Gentopco have been included with BSH's
since the acquisition dates. The fair value of assets acquired and
liabilities assumed totalled approximately $62.3 million. The excess of
the purchase price over the fair value of net assets acquired is
attributable to franchise assets and is being amortized on a straight-
line basis over 40 years. The purchase price allocation for Belbottling,
Socodrink and CCBS&W was definitive as of December 31, 1994. For
Antwerpco and Gentopco, it was definitive as of December 31, 1995.
Summarized below are unaudited pro forma combined results of operations
for the years ended December 31, 1994 and 1993 assuming all acquisitions
occurred at January 1, 1993 (in thousands):
1994 1993
----------- -----------
Net revenues $1,240,138 $1,096,129
Operating income $ 77,252 $ 57,984
Net income $ 61,964 $ 39,613
F-15
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
3. Acquisitions (Continued)
The unaudited pro forma combined results of operations are not
necessarily indicative of the results of operations that would have been
achieved had the companies actually been combined during the period
presented, or of future results of operations of the combined Companies.
4. Inventories
Inventories consist of the following (in thousands):
1995 1994
---- ----
Raw materials $16,372 $20,024
Finished goods 52,506 54,523
Advertising and promotional materials 4,222 5,173
Other inventories 7,491 8,842
-------- --------
$80,591 $88,562
======== ========
5. Prepaid expenses and other current assets
Prepaid expenses and other current assets consist of the following (in
thousands):
1995 1994
---- ----
Prepaid expenses $17,542 $20,898
Recoverable value added tax 16,476 18,130
Miscellaneous accounts receivable 9,700 13,895
Recoverable taxes 5,554 29
Supplies inventories 5,280 4,898
Deposits on containers 4,083 2,180
Other 1,760 2,574
------- -------
$60,395 $62,604
======= =======
F-16
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
6. Due from affiliates
Amounts due from affiliates consist of the following (in thousands):
1995 1994
---- ----
Advance to TCCC $ - $94,371
Advance to Beverage Products, Ltd - 18,495
Trade receivables from affiliates 15,238 19,712
------- --------
$15,238 $132,578
======= ========
The advance to TCCC was granted on December 30, 1994 and repaid on February
28, 1995. This advance was financed by a short-term loan from Citibank (see
also note 9). The advance to Beverage Products, Ltd was granted on December
30, 1994 and repaid on September 29, 1995. Interest on these advances was
charged at a weighted average rate of 5.6% per annum.
7. Other long-term assets
Other long-term assets consist of the following (in thousands):
1995 1994
---- ----
Long-term value added tax receivable $4,866 $4,863
Security deposits 2,287 2,215
Other 2,019 2,669
------ ------
$9,172 $9,747
====== ======
8. Capital leases
Included in property, plant and equipment are the following amounts
representing assets held under capital leases (in thousands):
1995 1994
---- ----
Cost
Land $1,270 $1,173
Buildings and improvements 9,490 8,696
Machinery and equipment 2,057 1,908
------- ------
12,817 11,777
Accumulated depreciation 1,736 514
------- -------
Net book value $11,081 $11,263
======= =======
F-17
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
8. Capital leases (Continued)
The amounts for land and buildings include BSH's Antwerp facility, which
is leased from Belgo Leasing under a lease expiring on December 31,
2003. This lease can be extended, by mutual agreement between the lessor
and the lessee, for an additional period of five years after the initial
expiration date. BSH has an option to purchase the land and buildings at
the end of the lease term for approximately $3 million. The lease
agreement stipulates that the interest rate is reviewed annually based
on the rate charged by The National Bank of Belgium on advances to banks
plus 3%. The interest rate amounted to 12% in 1995 and 10.25% in 1994.
The difference between the contractual interest rate on the lease and
the market rate at the date of the acquisition of Antwerpco was
accounted for as an adjustment to franchise assets related to the
acquisition, and was credited to other accrued expenses.
Future lease commitments in respect of capital leases are shown in
note 19.
9. Bank loans and overdrafts
Bank loans and overdrafts consist of the following (in thousands):
1995 1994
---- ----
Bank overdraft with Credit Lyonnais $ 6,097 $ 1,760
Bank overdraft with Generale Bank - 3,818
Loan from Citibank - 94,371
Straight loan from Kredietbank 6,798 -
Other 321 968
------- --------
$13,216 $100,917
======= ========
The bank overdrafts with Credit Lyonnais and Generale Bank are not
covered by a formal credit facility. The weighted average interest rates
on these overdrafts were 3.75% in 1995 and 6% in 1994.
On December 29, 1994, BSH entered into a loan agreement with Citibank
whereby approximately $94.4 million was borrowed from December 30, 1994
to February 28, 1995 at a rate of 5.6% per annum. On the same date, BSH
granted an advance for the same amount, period and interest rate to TCCC
(see also note 6).
F-18
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
9. Bank loans and overdrafts (Continued)
As of December 31, 1995, BSH had a credit facility of approximately $51
million with Bank Brussel Lambert and a credit facility of approximately
$34 million with Kredietbank. The straight loan from Kredietbank
outstanding at December 31, 1995 is part of this credit facility (see
also note 13). Interest rates on borrowings made under these facilities
are based on market rates which were approximately 5% in 1995.
As of December 31, 1995, CCBSA had approximately $49 million available
under three unused short-term overdraft facilities with Credit du Nord
(approximately $29 million), Societe Generale (approximately $20
million) and BICS (approximately $400,000). Interest rates on
borrowings made under these facilities are based on Paris Interbank
Offered Rates ("PIBOR") plus margins ranging between .55% and .75%.
As of December 31, 1995, CCP had approximately $20 million available
under two short-term overdraft facilities with Societe Generale
(approximately $10 million) and Banque Nationale de Paris (approximately
$10 million). Interest rates on borrowings made using these facilities
are based on PIBOR plus margins of .3% and .35%, respectively. In
addition, CCP participates in an interest-bearing cash-pooling
arrangement with other affiliates of TCCC through Citibank which
provides CCP with the majority of its cash flow requirements.
10. Accrued expenses and other payables
Accrued expenses and other payables consist of the following (in
thousands):
1995 1994
---- ----
Accrued marketing and advertising expenses $ 53,534 $ 47,964
Accrued payroll 34,385 34,306
Container deposits 24,881 18,573
Restructuring accruals 22,638 34,949
Other accrued expenses and accounts payable 48,890 34,229
-------- --------
$184,328 $170,021
======== ========
Restructuring accruals include approximately $22 million in 1995 and
$27.4 million in 1994 relating to various restructuring actions decided
by BSH as a result of its acquisitions of independent franchise
bottlers. The offsets to these amounts were accounted for as an
adjustment to franchise assets related to the respective acquisitions.
F-19
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
10. Accrued expenses and other payables (Continued)
Restructuring accruals also include approximately $600,000 in 1995 and
$7.5 million in 1994 relating to CCBSA's decision to close its Luneville
plant. The offset to this amount (comprising approximately $5 million
related to the write-down of property, plant and equipment to net
realizable value and approximately $2.5 million for transfer,
termination, and other personnel related benefits in connection with the
closing) was accounted for as part of selling, administrative and
general expenses in 1994. At December 31, 1995, this plant closing was
substantially completed. Total costs incurred during 1995 for the
closing of the Luneville plant were substantially in accordance with the
accrual recorded at December 31, 1994.
11. Accrued taxes
Accrued taxes consist of the following (in thousands):
1995 1994
---- ----
Payroll taxes $13,259 $13,123
Excise duties and sales taxes 3,911 3,144
Value added tax 3,086 5,563
Withholding taxes - 2,325
Corporate income taxes 1,227 2,920
Other accrued taxes 1,548 1,362
------- -------
$23,031 $28,437
======= =======
12. Advances from affiliates
The advances from affiliates, which are directly or indirectly wholly-
owned subsidiaries of TCCC, consist of the following (in thousands):
1995 1994
---- ----
Advances from TCCEC $185,642 $162,241
Advance from SA Coca-Cola Services NV 87,014 80,384
Advance from Beverage Products, Ltd 19,608 18,840
-------- --------
$292,264 $261,465
======== ========
F-20
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
12. Advances from affiliates (Continued)
The maturities of these advances, which are denominated in Belgian
francs, range from March 28 to December 31, 1996. Although these
advances are usually granted for less than twelve months, they are
classified as non-current liabilities since management and TCCC have the
intent and ability to refinance the advances on a long-term basis. The
weighted average interest rate on these advances was 5.3% in 1995, 6.3%
in 1994 and 7.7% in 1993.
13. Long-term debt
Long-term debt consists of the following (in thousands):
1995 1994
---- ----
Capital lease obligations $12,012 $12,271
Amounts payable under share purchase agreements 7,869 12,277
Straight loan from Kredietbank 6,798 -
Advance from Bank Brussel Lambert - 6,280
Other 1,297 1,801
------- -------
$27,976 $32,629
Less: current maturities 2,846 6,816
------- -------
$25,130 $25,813
======= =======
Maturities of long-term debt (excluding the straight loan from
Kredietbank) are as follows (in thousands):
<TABLE>
<CAPTION>
Capital Amounts payable
lease under share
obligations purchase agreements Other Total
----------- ------------------- ----- -----
<S> <C> <C> <C> <C>
1996 $1,418 $ 816 $ 612 $2,846
1997 1,550 816 657 3,023
1998 1,099 816 21 1,936
1999 1,237 816 7 2,060
2000 1,392 - - 1,392
After 2000 5,316 4,605 - 9,921
------- ------ ------ -------
$12,012 $7,869 $1,297 $21,178
======= ====== ====== =======
</TABLE>
F-21
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
13. Long-term debt (Continued)
The straight loan from Kredietbank was obtained under a credit facility
of approximately $34 million (see also note 9). Loans obtained under
this facility are for renewable periods not exceeding 12 months. At
December 31, 1995, the total straight loan from Kredietbank amounted to
approximately $13.6 million, $6.8 million of which has been classified
as long-term debt because management has the intent and ability to
refinance it on a long-term basis. The remaining balance of
approximately $6.8 million of the straight loan is classified as short-
term bank loans.
Interest paid was approximately $2.8 million in 1995, $2.4 million in
1994 and $500,000 in 1993. Interest expense incurred on advances from
affiliates during 1993 through 1995 was not paid but recorded as an
increase in these advances.
14. Common stock and capital surplus (deficit)
The common stock included in the accompanying combined balance sheet at
December 31, 1995 is made up as follows (in thousands):
Common stock of BSH amounting to BEF 710,920,000 represented
by 122,007 ordinary shares without par value $17,867
Common stock of CCBSA amounting to FRF 3,085,316,000
represented by 30,853,160 ordinary shares with a par value
of FRF 100 each 585,988
Common stock of CCP amounting to FRF 4,300,000 represented
by 43,000 ordinary shares with a par value of FRF 100 each 719
--------
$604,574
========
The capital surplus (deficit) at December 31, 1995 arose as follows:
a. The shares of Societe Regionale de Boissons Gazeuses acquired from
TCCEC in 1989 (see note 2) were accounted for by CCBSA using the
former carrying value of these shares in the financial statements
of TCCEC. The difference of approximately $6.9 million between the
estimated fair market value at which CCBSA actually acquired these
shares and the amount at which they were accounted for, was
reported as an adjustment to capital surplus (deficit).
F-22
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
14. Common stock and capital surplus (deficit) (Continued)
b. At December 31, 1991, TCCC management decided that the long-term
advances from TCCEC amounting to approximately $519.6 million would
be converted into equity. These advances were accounted for in
CCBSA's financial statements prepared in accordance with US GAAP as
an adjustment to capital surplus (deficit) as from that date,
resulting in a balance of approximately $512.7 million.
In CCBSA's French statutory financial statements, these advances
continued to be accounted for as long-term debt and continued to bear
interest until their conversion into share capital on February 7,
1994. Interest expense of approximately $82.1 million recorded in
CCBSA's statutory financial statements in 1992 and 1993 has not been
recorded in CCBSA's financial statements prepared in accordance with
US GAAP due to the treatment of these advances as equity as from
December 31, 1991.
On February 7, 1994 a decision was made by an Extraordinary
Shareholders' Meeting of CCBSA to convert the long-term advances due
to TCCEC into common stock for approximately $567.5 million. This
amount was accounted for in CCBSA's US GAAP financial statements as
an adjustment to capital surplus (deficit). A reconciliation of the
amount capitalized for French statutory purposes and the amount
accounted for as a transfer from capital surplus (deficit) to an
increase in common stock in the US GAAP financial statements is as
follows (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Long-term advances from TCCEC recorded as US GAAP
equity in 1991 $519,638
1993 capital repayment (34,200)
1992 and 1993 interest capitalized for French statutory purposes 82,075
--------
Long-term advances from TCCEC capitalized for French statutory
purposes and accounted for as an increase in common stock $567,513
========
</TABLE>
c. The corporate capital contributions of approximately $1.6 million in
1993, $2 million in 1994 and $1.8 million in 1995 represent TCCC's
non-cash corporate overhead allocation (see also note 18), net of
income taxes, which was credited to capital surplus since TCCC has
not charged the combined Companies for such overhead, and it is
TCCC's intention not to be paid by the combined Companies for such
corporate overhead allocation.
F-23
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
14. Common stock and capital surplus (deficit) (Continued)
d. For Belgian statutory purposes, BSH reduced its common stock by
approximately $16 million in 1994 offset by a corresponding
reduction of the retained-earnings deficit. For US GAAP reporting
purposes, this reduction in common stock was credited to capital
surplus.
15. Retained earnings available for distribution
Retained earnings are only available for distribution to the extent that
they appear as such in the statutory financial statements prepared under
local GAAP of the various entities, and that they are not restricted
under Company law. As of December 31, 1995, BSH and CCBSA had no
retained earnings available for distribution, whereas the retained
earnings available for distribution by CCP amounted to approximately
$130.1 million.
16. Pension benefits
BSH and its subsidiaries (except for the employees of the former
Antwerpco entity which have no pension arrangements) sponsor and/or
contribute to pension plans covering employees who meet certain age and
seniority criteria. The plans cover both retirement indemnities and
supplemental items (death in service, medical insurance, liability
insurance, illness and work accidents).
CCBSA and CCP provide pension benefits to their employees as prescribed
by French law which requires that lump sum retirement indemnities be
paid to employees based upon seniority and compensation at retirement.
The lump sum indemnities range from one to eight months of salary. In
addition, CCBSA has a supplemental plan which guarantees that employees
having a minimum of ten years service at retirement continue receiving
between 62% and 67% of their last salary if they retire between the ages
of 60 and 65.
The net periodic pension cost for the combined Companies' defined
benefit plans consists of the following (in thousands):
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Service cost-benefits earned during
the year $1,952 $1,790 $ 945
Interest cost on projected benefit
obligation 1,265 1,198 741
Actual return on plan assets (392) (348) (162)
Net amortization and deferral 31 28 -
------ ------ ------
Net periodic pension cost $2,856 $2,668 $1,524
====== ====== ======
</TABLE>
F-24
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
16. Pension benefits (Continued)
Actuarial gains and losses resulting mainly from changes in plan
assumptions and the actuarial value of prior service cost arising on
changes in plan benefits are recognized using the straight-line method
over the estimated remaining service lives of the plan participants.
The following table sets forth the funded status for the combined
entities' defined benefit plans at December 31 (in thousands):
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation $ 6,133 $ 4,705
======= =======
Accumulated benefit obligation $10,651 $ 9,943
======= =======
Projected benefit obligation $20,072 $17,917
Plan assets at fair value 6,316 5,173
------- -------
Projected benefit obligation in excess of plan assets 13,756 12,744
Unrecognized prior service cost (504) (488)
Unrecognized net gain (loss) (528) 206
------- -------
Accrued pension liabilities $12,724 $12,462
======= =======
</TABLE>
The plan assets of BSH are held and managed by a Company-sponsored fund
or by insurance companies. Contributions to plan assets are made annually
by BSH and its employees based on calculations made in accordance with
regulatory requirements by an independent actuary for the Company-sponsored
fund and by the insurance companies for the other plans. CCBSA discharges
its obligations under its supplemental plan when an employee retires by
making a contribution to an annuity fund sufficient to cover future
benefits for the retired employee. CCBSA's supplemental plan is regularly
evaluated by independent actuaries. CCBSA's and CCP's lump sum retirement
indemnities required by French law are unfunded and non-contributory.
The accrued pension liabilities are recorded in other long-term
liabilities.
F-25
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
16. Pension benefits (Continued)
The assumptions used in computing the above information for the three
years ended December 31, 1995 are as follows:
Discount rate 7% or 8%
Rate of increase in compensation levels 5%
Expected long-term return on assets 7%
17. Income taxes
Income tax expense (benefit) consists of the following (in thousands):
1995 1994 1993
---- ---- ----
Current $1,406 $1,940 $ 378
Deferred 2,966 (3,524) 1,688
------ ------- ------
$4,372 $(1,584) $2,066
====== ======= ======
The unusual relationship between the combined income tax expense and the
reported combined income before income taxes arises because CCP currently
operates in a tax-free zone (see below) and because CCBSA's income is
currently not subject to income taxes as a result of the availability of
operating loss carryforwards.
The combined entities made income tax payments of approximately $3.1
million in 1995, $2.6 million in 1994 and nil in 1993.
The tax effects of temporary differences and carryforwards that give rise
to significant portions of deferred tax assets and liabilities consist of
the following (in thousands):
F-26
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
17. Income taxes (Continued)
1995 1994
------- -------
Deferred tax assets:
Operating loss carryforwards $43,868 $43,970
Accrued expenses 5,586 1,545
Pension plans 4,837 4,955
Other 5,256 5,705
Valuation allowance (24,956) (33,430)
------- -------
34,591 22,745
------- -------
Deferred tax liabilities:
Property, plant and equipment 29,429 14,035
Tax deductible franchise assets 3,891 3,595
Container deposit liability 1,048 2,459
Other 4,389 3,864
------- -------
38,757 23,953
------- -------
Net deferred tax liability $ 4,166 $ 1,208
======= =======
At December 31, 1995, BSH and subsidiaries had approximately $37.3 million of
operating loss carryforwards which can be carried forward indefinitely. A net
deferred tax asset of approximately $13.1 million (representing the future
income tax benefit of approximately $15 million arising from available
operating losses at the Belgian statutory income tax rate of 40.17%, less a
valuation allowance of approximately $1.9 million) has been recognized in the
accompanying combined balance sheet as of December 31, 1995 in respect of
these operating loss carryforwards.
At December 31, 1995, CCBSA had approximately $78.8 million of operating loss
carryforwards which can be carried forward indefinitely. A net deferred tax
asset of approximately $5.8 million (representing the future income tax
benefit of approximately $28.9 million arising from available operating
losses at the French statutory income tax rate of 36.67%, less a valuation
allowance of approximately $23.1 million) has been recognized in the
accompanying combined balance sheet as of December 31, 1995 in respect of
these operating loss carryforwards.
F-27
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
17. Income taxes (Continued)
During 1995, the net operating loss carryforwards of CCBSA have been
restated to take into account reassessments received from the French tax
authorities in December 1995 following their examination of CCBSA's tax
returns for 1992 and 1993. At December 31, 1995, the potential future
tax benefit of CCBSA's net operating loss carryforwards has been reduced
by approximately $11 million which represents the maximum potential
effect of the notices of reassessment, which CCBSA is currently
contesting (see also note 19).
Under a specific code of the French tax regime, CCP benefits from a ten
year corporate tax holiday on its manufacturing and trading income, from
the start of its operations in October 1989 until October 1999. Income
not directly related to CCP's principal business activity ("non-trading"
income), such as financial income, is subject to tax. Up until December
31, 1994, CCP did not record income taxes in its financial statements
due to the existence of taxable losses available for carryforward
against non-trading income and based on management's belief that the
corporate tax holiday on manufacturing and trading income would be
extended beyond October 1999.
Based on the status of the negotiations with the French tax authorities
at December 31, 1995, CCP management estimated that obtaining such an
extension was no longer certain. Consequently, for the year ended
December 31, 1995, CCP has recorded a deferred income tax liability of
approximately $4.2 million (of which approximately $600,000 relate to
temporary differences arising in 1995) on temporary differences between
US GAAP and tax reporting (primarily relating to property, plant and
equipment) that are expected to reverse in a year that is beyond the tax
exempt period (October 1999).
At December 31, 1995, CCP had operating loss carryforwards available
against non-trading income amounting to approximately $12.2 million. The
potential future tax benefit of these operating loss carryforwards has
not been recognized because the French tax authorities have recently
sent to CCP reassessment notices concerning tax returns filed for 1991,
1992 and 1993. The final outcome of these reassessments could result in
a significant reduction of these loss carryforwards and CCP being
subject to the payment of corporate tax (see also note 19).
F-28
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
18. Related party relationships and transactions
The accompanying combined financial statements include the historical
results of operations and cash flows of the combined Companies under
TCCC's ownership and may not be indicative of the results of operations
and cash flows that would have been achieved, had the combined Companies
been operated independently. Further, the historical results of
operations and cash flows are not indicative of future results of
operations or cash flows of the combined Companies.
The disclosures which follow describe the nature and amounts of the
major transactions between BSH, CCBSA, CCP and their affiliates. The
affiliates are companies which are, directly or indirectly, owned by
TCCC.
The combined Companies, which are parties to bottling and canning
agreements of specified duration with TCCC, purchase concentrates,
beverage bases, certain raw materials and finished beverages (cans and
juices) from affiliates. Major purchases from affiliated companies
during 1995, 1994 and 1993 were as follows (in thousands):
<TABLE>
<CAPTION>
Affiliate Country 1995 1994 1993
----------------------------- ----------- -------- -------- --------
<S> <C> <C> <C> <C>
Varoise de Concentres SA France $298,127 $254,037 $179,933
The Coca-Cola Trading Company Switzerland $235,820 $199,799 $161,405
SA Coca-Cola Soft Drinks NV Belgium $ 84,338 $ 54,140 $ 18,370
Coca-Cola Atlantic Ireland $ 3,171 $ 3,917 $ 2,919
International Beverages Ireland $ 1,031 $ 131 $ 689
Beverage Products, Ltd
(Belgian branch) Belgium $ - $ - $ 2,042
</TABLE>
As indirect subsidiaries of TCCC, BSH, CCBSA and CCP have available
certain support services provided by TCCC. These services include:
Risk management coordination: the combined Companies benefit from global
self-insurance programs, pool purchasing of insurance, claims
administration and loss prevention programs provided by TCCC. They are
required to fund the actual cost for specific insurance policies
maintained by TCCC on their behalf. The total cost to BSH, CCBSA and CCP
for this insurance coverage was approximately $ 2.4 million in 1995,
$1.7 million in 1994 and $1.3 million in 1993.
Internal audit services: an audit of the combined Companies' operations,
financial statements and internal controls is performed by TCCC
approximately every 18 months.
F-29
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
18. Related party relationships and transactions (Continued)
Other corporate services and resources: treasury, legal, tax, financial
and accounting services, external affairs, environmental support,
information systems and other services and resources.
Except for the insurance premiums disclosed above, the cost of these
services is not charged by TCCC to the combined Companies. However, for
the purpose of presenting the accompanying combined financial statements
on a stand-alone basis, a corporate overhead allocation with respect to
these services has been reflected for approximately $3.1 million in
1995, $3.3 million in 1994 and $2.5 million in 1993.
The allocation of corporate overhead was based on unit cases of product
sold by the combined Companies as a percentage of total unit cases sold
by the Greater Europe Group of TCCC and is considered a reasonable
approximation of the cost of these services by management.
TCCC (and/or its affiliates) can choose to participate in the cost of
certain BSH and CCBSA promotional allowances, trade programs,
advertising, and cold-drink equipment investments ("marketing support").
TCCC's marketing support amounted to approximately $161.1 million in
1995, $141.5 million in 1994 and $ 73.2 million in 1993. These amounts
represent approximately 72%, 76% and 63% of total marketing spending in
BSH's and CCBSA's territories in 1995, 1994 and 1993, respectively.
Although TCCC (and/or its affiliates) have historically participated in
marketing support on behalf of BSH and CCBSA, previous levels of
marketing support may not be indicative of future participation levels.
CCP sells canned TCCC beverages to affiliated companies at prices
identical to those offered to independent bottlers (ECU 5 per tray). BSH
and CCBSA occasionally deliver finished products to affiliated companies
in other European countries at prices similar to those offered to
independent customers. Major sales to affiliates during 1995, 1994 and
1993 were as follows (in thousands):
<TABLE>
<CAPTION>
Affiliate Country 1995 1994 1993
-------------------------------- ------- -------- -------- --------
<S> <C> <C> <C> <C>
Coca-Cola GmbH/Coca-Cola Rhein-
Ruhr GmbH (see also note 23) Germany $106,419 $106,294 $103,876
Coca-Cola International Sales
Limited Great Britain $ 16,356 $ 22,763 $ 8,707
</TABLE>
F-30
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
18. Related party relationships and transactions (Continued)
BSH also toll packs beverages of TCCC in cans and Tetra Pak for SA Coca-
Cola Soft Drinks NV. Toll packing fees charged to Coca-Cola Soft Drinks
amounted to approximately $16.7 million in 1995, $13.3 million in 1994
and $1.1 million in 1993.
19. Commitments and contingencies
Leases
The combined Companies lease office space, bottling facilities,
machinery and equipment, data processing equipment, vehicles and other
items under leases expiring at various dates during the next nine years.
Management expects that, in the normal course of business, leases that
expire will be renewed or replaced by other leases.
At December 31, 1995, minimum commitments under capital and operating
leases were as follows (in thousands):
Capital Operating
leases leases
------- ---------
1996 $2,773 $19,503
1997 2,772 12,945
1998 2,136 7,838
1999 2,136 3,265
2000 2,136 1,365
2001 and thereafter 6,409 2,911
------- -------
Total minimum lease payments 18,362 $47,827
=======
Less: amount representing interest 6,350
-------
Present value of net minimum lease
payments $12,012
=======
Capital commitments
At December 31, 1995, the combined Companies had commitments for capital
expenditures amounting to approximately $30.9 million.
F-31
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
19. Commitments and contingencies (Continued)
Long-term marketing commitments
BSH participates in long-term contracts entered into by TCCC with two
large Belgian breweries (Interbrew and Alken-Maes), which provide TCCC's
products with certain availability, visibility and promotional rights.
The total cost of these contracts amounted to approximately $10.6
million in 1995.
CCBSA entered into a sponsorship contract with the Tour de France (major
French cycling event) on February 10, 1992 which was renewed on June 10,
1994 to extend through the year 2007. The commitment for 1996 is
approximately $3.3 million and escalates annually to approximately $5.4
million in 2007. The total future commitment amounts to approximately
$50 million.
CCBSA entered into a long-term participation agreement with Disneyland
Paris effective January 1, 1990 which expires on December 31, 2004.
Under the terms of this agreement, CCBSA is to pay an annual cost of
approximately $5.5 million, payable in French Francs on January 1,
determined based on the $/FRF exchange rate three business days prior to
January 1. Such amount is indexed by reference to variations in a
composite French consumer price index from November 1991. The total
commitment for 1996 amounts to approximately $5.9 million.
CCBSA signed a contract with the Parc des Princes, the major soccer
stadium in Paris, effective July 1, 1991 which expires on June 30, 1996.
Under the terms of the agreement, CCBSA is committed to spending
approximately $1 million annually. Management is currently negotiating
to renew this contract.
The cost of the above agreements has historically been shared between an
affiliate of TCCC and BSH or CCBSA, and is reflected in TCCC's marketing
support (see also note 18).
BSH, CCBSA and/or affiliates of TCCC have many other long-term
commercial commitments with fast food restaurants (such as McDonald's,
Quick and Burger King), amusement parks (such as Walibi), retailers
(such as GIB and Promodes) and other customers. These commitments
include the delivery of products at specified prices as well as
marketing fees which provide TCCC products certain availability,
visibility and promotional rights. TCCC's participation in the cost of
certain of these commitments is reflected in TCCC's marketing support to
BSH and CCBSA (see also note 18).
F-32
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
19. Commitments and contingencies (Continued)
Legal proceedings
The combined Companies are defendants in a number of legal proceedings
and have various unresolved claims arising in the ordinary course of
business. The outcome of these lawsuits and claims is not known at this
time. The combined Companies believe that the resulting liability, if
any, net of amounts recoverable from insurance or other sources, will
not have a material adverse effect on their combined results of
operations or financial position.
Environmental matters concerning bottlers acquired
Upon the acquisition of independent bottlers, management of BSH became
aware that the entities acquired did not always fully comply with local
environmental regulations and/or TCCC policies. BSH has estimated the
costs of remedial actions required to ensure compliance with the
regulations and TCCC policies and has accrued these estimated costs in
the accompanying financial statements. Such accruals amounted to
approximately $4.4 million and $4.6 million as of December 31, 1995 and
1994, respectively. Also, management has taken the necessary actions to
ensure substantial compliance with local regulations and believes that
any situations of non-compliance will not have a material adverse effect
on BSH's consolidated results of operations or financial position.
Tax examinations
CCBSA received notices of assessment from the French tax authorities in
December 1995 concerning its tax returns for 1992 and 1993. In January
1996, CCBSA submitted its objections to the assessment notices and
received a response from the French tax authorities in April 1996. As
the most significant items of reassessment have not yet been resolved to
CCBSA's satisfaction, further discussions will be held with the tax
authorities during July 1996. If an agreement cannot be reached, CCBSA
will take its case to the French tax commission ("interlocuteur
departemental"). Due to the tax losses which CCBSA has available for
carryforward (see note 17), CCBSA believes that the ultimate resolution
of this matter will have no effect on its consolidated results of
operations or financial position.
F-33
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
19. Commitments and contingencies (Continued)
Tax examinations (Continued)
CCP has received notices of assessment from the French tax authorities
concerning tax returns filed for 1991, 1992 and 1993. Although the
statute of limitations with respect to the years 1988, 1989 and 1990 has
expired, due to the existence of loss carryforwards (see note 17), the
tax authorities can still examine the activities of CCP for this period.
Even though CCP benefits from a corporate tax holiday, any reassessments
to previously declared taxable or non-taxable income may be subject to
corporate tax.
The most significant proposed adjustment corresponds to the difference
between The Coca-Cola Trading Company's cost and its sales price for all
items sold to CCP in 1991, 1992 and 1993. TCCC and CCP management
believe that CCP's income has been properly reported in its tax returns
and, at this stage, refuse to make concessions on its transfer pricing
policy which is determined within the TCCC Group on a world-wide basis
and which management believes respects the arm's length principle. The
other main potential assessment concerns the disallowance of losses
available for carryforward against non-trading income which amounted to
approximately $13 million at December 31, 1993. The tax authorities'
position is that a company located in a tax-free zone cannot record a
net loss insofar as it relates to taxable non-trading income.
In addition to losing the future benefit of losses available for
carryforward, the maximum tax liability which could result from the
notices of assessment for 1991, 1992 and 1993 amounts to approximately
$17.7 million, including approximately $3.2 million for interest and
penalties.
In January 1996, CCP submitted its objections to the reassessment
notices and received a response from the French tax authorities in April
1996. As the most significant items of reassessment have not yet been
resolved to CCP's satisfaction, further discussions will be held with
the tax authorities during July 1996. If an agreement cannot be reached,
CCP will take its case to the French tax commission ("interlocuteur
departemental"). As CCP management is currently unable to predict the
final outcome of this matter, no accrual for any potential tax liability
has been recorded in the financial statements at December 31, 1995. CCP
does not expect, however, that the ultimate resolution of this matter
will have a material adverse effect on its financial position.
F-34
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
20. Net change in operating assets and liabilities
The changes in operating assets and liabilities in the accompanying
combined statements of cash flows, net of the effects of acquisitions of
bottling companies, are as follows (in thousands):
<TABLE>
<CAPTION>
1995 1994 1993
------- -------- -------
<S> <C> <C> <C>
Decrease (increase) in trade accounts and notes
receivable $31,938 $(12,369) $ 8,557
Decrease (increase) in inventories 15,353 (14,689) 7,131
Decrease (increase) in prepaid expenses and
other current assets 7,068 6,110 (6,787)
Decrease (increase) in amounts due from
affiliates 12,728 3,852 (13,177)
Decrease in accounts payable, accrued expenses
and accrued taxes (13,931) (19,529) (1,682)
Increase (decrease) in amounts due to affiliates (10,434) 11,430 8,992
------- -------- -------
$42,722 $(25,195) $ 3,034
======= ======== =======
</TABLE>
21. Financial instruments
The carrying amounts reflected in the accompanying combined balance
sheets for financial instruments reported as current assets and current
liabilities approximate their respective fair values due to the short
maturities of these instruments.
For other long-term assets, excluding the long-term value added tax
receivable, management believes that the carrying value of approximately
$ 4.3 million is a reasonable estimate of the fair value of these
instruments at December 31, 1995.
The long-term value added tax receivable is repayable in minimum annual
installments of approximately $500,000 and carries interest at a rate of
1% per annum. Based on a discounted cash flow analysis using market
interest rates for similar instruments, the fair value of the long-term
value added tax receivable at December 31, 1995 amounts to approximately
$3.6 million compared to a carrying value of approximately $4.9 million.
F-35
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
22. Credit risk and sale of accounts receivable
For all customers, credit is extended based upon an evaluation of the
customer's financial condition, and collateral is generally not
required. An allowance for doubtful accounts is maintained at a level
which management believes is sufficient to cover potential credit losses
including potential losses on receivables sold (see below). Credit
losses have consistently been within management's expectations.
On December 28, 1995, CCBSA entered into a one-year agreement with a
large banking institution, whereby it can sell certain accounts
receivable, in accordance with individual limits established for each
customer, up to a maximum total of approximately $90 million on an
ongoing basis, with limited recourse. The agreement is automatically
extended for successive periods of three months and can be terminated by
either party with one month's written notice. To be eligible for sale,
accounts receivable must have a maximum maturity of 60 days and
correspond to merchandise actually delivered to unaffiliated customers
having no right of offset.
CCBSA has the option to repurchase any receivables assigned to the bank
which are unpaid after 60 days. Under the terms of the agreement, the
bank assumes the risk of credit loss due to bankruptcy, including
accounts receivable repurchased by CCBSA, for a one-year period.
Accounts receivable unpaid after one year from the invoice due date, or
unpaid at any time due to commercial disputes or litigation with the
customer, or any reason other than bankruptcy, are reassigned to CCBSA.
Accounts receivable are sold on a weekly basis in exchange for a 60 day
promissory note. This promissory note is immediately discounted by the
bank for proceeds less than the face amount of the note by an amount
which approximates the bank's financing cost of issuing its own
commercial paper backed by these accounts receivable.
CCBSA, as agent for the bank, retains collection and administrative
responsibilities for the accounts receivable sold. The bank charges
CCBSA a monthly service fee of approximately $6,000 and a financing fee
on overdue receivables at a rate based on the French Money Market Rate
plus a margin of 2%.
F-36
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and
Coca-Cola Production SA
December 31, 1995
22. Credit risk and sale of accounts receivable (Continued)
Under this agreement, sales of accounts receivable amounting to
approximately $33.4 million for 1995 have been reflected as a reduction
of accounts receivable in the accompanying Combined Balance Sheet, and
proceeds of approximately $33.2 million as operating cash flows in the
accompanying Combined Statement of Cash Flows. The cost of this
financing facility is charged to selling, general and administrative
expenses on a straight-line basis over the term of the promissory notes.
23. Subsequent events
Effective January 1, 1996, most of CCP's production for the German Coca-
Cola bottling system has been moved from CCP to production facilities in
Germany. This results in a decrease in CCP's physical case volume of
approximately 15 million cases per year (representing approximately 25%
of CCP's 1995 volume) and an increase in CCP's overhead cost per case.
On February 14, 1996, BSH increased its common stock by BEF 249,080,000
(approximately $8 million) through the issuance of 27,993 ordinary
shares without par value. This capital increase was subscribed by
Beverage Products, Ltd and was paid through a reduction of its advances
to BSH.
On June 13, 1996, an extraordinary general meeting of CCBSA's
shareholders approved a two-stage restructuring of CCBSA's share capital
as follows:
a. reduction of CCBSA's share capital from FRF 3,085,316,000 to FRF
1,882,042,760 by incorporating FRF 1,203,273,240 from CCBSA's
accumulated deficit account as reported in its French statutory
financial statements, and thus reducing the par value of CCBSA's
30,853,160 ordinary shares from FRF 100 to FRF 61 each;
b. repurchase for subsequent cancellation, by CCBSA, of 20,655,738
of its own ordinary shares for the amount of FRF 1,260,000,018
at a par value of FRF 61 per share.
Shareholders can subscribe to this repurchase offer between June 13,
1996 and July 14, 1996. To finance the share repurchase scheduled to
take place on July 15, 1996, CCBSA will borrow FRF 1,024 million from a
third party lender.
F-37
<PAGE>
UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS
SA Beverage Sales Holding NV
Coca-Cola Beverages SA
Coca-Cola Production SA
<TABLE>
<CAPTION>
June 30, 1996
Page
----
<S> <C>
Unaudited interim combined financial statements
Combined Balance Sheets F-39
Combined Statements of Income F-41
Combined Statements of Cash Flows F-42
Notes to Combined Financial Statements F-43
</TABLE>
F-38
<PAGE>
UNAUDITED INTERIM COMBINED BALANCE SHEETS
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and Coca-Cola Production SA
<TABLE>
<CAPTION>
June 30
(In thousands) 1996 1995
- -------------- ---------- ----------
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 92,640 $ 46,288
Trade accounts and notes receivable (net) 195,499 249,251
Inventories 106,859 118,865
Prepaid expenses and other current assets 112,899 70,528
Due from affiliates -- 78,802
---------- ----------
TOTAL CURRENT ASSETS 507,897 563,734
PROPERTY, PLANT AND EQUIPMENT
Land 16,906 18,502
Buildings and improvements 137,918 148,227
Machinery and equipment 436,273 418,821
Containers 48,712 48,273
---------- ----------
639,809 633,823
Less allowances for depreciation 195,142 168,291
---------- ----------
444,667 465,532
FRANCHISE AND OTHER NON CURRENT ASSETS 324,574 359,854
---------- ----------
$1,277,138 $1,389,120
========== ==========
</TABLE>
See Notes to Unaudited Interim Combined Financial Statements
F-39
<PAGE>
UNAUDITED INTERIM COMBINED BALANCE SHEETS (Continued)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and Coca-Cola Production SA
<TABLE>
<CAPTION>
June 30
(In thousands) 1996 1995
- -------------- -------- -------
<S> <C> <C>
LIABILITIES AND SHARE-OWNERS' EQUITY
CURRENT
Bank loans and overdrafts $ 29,401 $ 21,007
Accounts and notes payable and accrued expenses 317,413 357,090
Current maturities of long-term debt 1,841 1,963
Accrued taxes 26,333 27,055
----------- ----------
TOTAL CURRENT LIABILITIES 374,988 407,115
ADVANCES FROM AFFILIATES 267,850 303,804
LONG-TERM DEBT 24,144 41,430
OTHER LONG-TERM LIABILITIES 12,202 14,342
DEFERRED INCOME TAXES 4,270 1,305
SHARE-OWNERS' EQUITY
Common stock 612,796 602,843
Capital surplus (deficit) (66,736) (68,584)
Reinvested earnings 29,706 36,022
Foreign currency translation adjustment 17,918 50,843
---------- ----------
593,684 621,124
---------- ----------
$1,277,138 $1,389,120
========== ==========
</TABLE>
See Notes to Unaudited Interim Combined Financial Statements
F-40
<PAGE>
UNAUDITED INTERIM COMBINED STATEMENTS OF INCOME
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and Coca-Cola Production SA
<TABLE>
<CAPTION>
Six Months Ended June 30
(In thousands) 1996 1995
- -------------- -------- --------
<S> <C> <C>
NET OPERATING REVENUES $733,321 $729,203
Cost of goods sold 507,682 527,361
-------- --------
GROSS PROFIT 225,639 201,842
Selling, administrative and general expenses 178,432 159,184
-------- --------
OPERATING INCOME 47,207 42,658
Interest income 3,000 3,821
Interest expense 7,760 10,525
Net foreign exchange gains (losses) (458) 734
Other income (deductions) - net (700) (1,569)
-------- --------
INCOME BEFORE INCOME TAXES 41,289 35,119
Income tax expense (benefit) (275) 2,429
-------- --------
NET INCOME $41,564 $32,690
======= =======
See Notes to Unaudited Interim Combined Financial Statements
</TABLE>
F-41
<PAGE>
UNAUDITED INTERIM COMBINED STATEMENTS OF CASH FLOWS
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and Coca-Cola Production SA
<TABLE>
<CAPTION>
Six Months Ended June 30
(In thousands) 1996 1995
- -------------- -------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 41,564 $ 32,690
Depreciation and amortization 30,369 28,456
Deferred income taxes 308 1,276
Restructuring charge and net losses on disposals of assets 2,106 352
Other non cash items 1,142 (653)
Net change in operating assets and liabilities (70,238) (69,073)
-------- -------
Net cash provided by operating activities 5,251 (6,952)
-------- --------
INVESTING ACTIVITIES
Purchases of property, plant and equipment (34,652) (39,849)
Proceeds from disposals of assets 319 471
Other investing activities (31) (422)
-------- -------
Net cash used in investing activities (34,364) (39,800)
-------- --------
FINANCING ACTIVITIES
Issuances of debt 9,795 --
Payments of debt (2,079) (88,172)
Amounts received from affiliates -- 113,639
Amounts paid to affiliates (8,132) --
Increases in common stock 8,222 --
Dividends (30,961) (10,195)
Other financing activities 9,046 6,722
-------- --------
Net cash provided by (used in) financing activities (14,109) 21,994
------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS (6,324) 5,158
------- -------
CASH AND CASH EQUIVALENTS
Net increase (decrease) during the period (49,546) (19,600)
Balance at beginning of period 142,186 65,888
-------- -------
Balance at end of period $ 92,640 $46,288
======== =======
See Notes to Unaudited Interim Combined Financial Statements
</TABLE>
F-42
<PAGE>
NOTES TO UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and Coca-Cola Production SA
June 30, 1996
1. Basis of Presentation
The accompanying unaudited condensed interim combined financial statements
have been prepared under the historical cost convention following the
accounting policies set out below in Note 2 and in accordance with generally
accepted accounting principles applicable for interim financial information
and with the instructions to Form 8-K and Article 10 of Regulation S-X.
Accordingly, they do not include all information and notes required by
generally accepted accounting principles (GAAP) for complete financial
statements. In the opinion of management, all adjustments, consisting of
normal recurring accruals, considered necessary for a fair presentation, have
been included. For further information, refer to the combined financial
statements and footnotes included in the Combined Financial Statements of SA
Beverage Sales Holding NV, Coca-Cola Beverages SA and Coca-Cola Production
SA for the year ended December 31, 1995.
2. Accounting policies
The accounting policies and practices followed by the entities included in
the accompanying unaudited interim combined financial statements are in
conformity with accounting principles generally accepted in the United States
("US GAAP").
Combination
The accompanying unaudited interim combined financial statements, expressed
in United States dollar equivalents, include the accounts of SA Beverage
Sales Holding NV and subsidiaries ("BSH"), Coca-Cola Beverages SA and
subsidiaries ("CCBSA"), and Coca-Cola Production SA ("CCP"), (collectively
"the combined Companies"). All significant intercompany accounts and
transactions are eliminated.
The companies included in the accompanying unaudited interim combined
financial statements maintain their official accounting records and prepare
their separate financial statements for domestic purposes in accordance with
accounting practices and in the currencies of their respective countries
(Belgian francs for BSH and French francs for CCBSA and CCP).
F-43
<PAGE>
NOTES TO UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and Coca-Cola Production SA
June 30, 1996
2. Accounting policies (Continued)
Combination (Continued)
These separate financial statements issued for domestic purposes are adjusted
to reflect US GAAP and are subsequently translated into United States dollar
equivalents for purposes of combination. It should not be construed that the
assets and liabilities, expressed in United States dollar equivalents, can
actually be realized in or extinguished by United States dollars at the
exchange rates used in the accompanying translation.
Organization
The combined Companies, which are effectively wholly-owned indirect
subsidiaries of The Coca-Cola Company ("TCCC") until July 26, 1996 (see note
6 Subsequent events), market, distribute and produce non-alcoholic beverages
under bottling and canning agreements with TCCC. BSH and CCBSA operate in
Belgium and France. Their franchise territories include approximately 90% of
the population of France and all of the population of Belgium. CCP operates
in France and sells to licensed bottlers and canners of TCCC beverages
primarily in Germany and The Netherlands, in addition to supplying BSH and
CCBSA.
Use of estimates
The preparation of financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Although these estimates
represent management's best estimates given knowledge of current events and
actions it may undertake in the future, they may ultimately differ from
actual results.
3. Seasonality of Business
Operating results for the six months ended June 30 1996 and 1995 are not
indicative of results that may be expected for the years ended December
31, 1996 and 1995, respectively, primarily due to the seasonality of the
Company's business. Unit sales of the Company's products are generally
greater in the second and third quarters due to seasonal factors.
F-44
<PAGE>
NOTES TO UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and Coca-Cola Production SA
June 30, 1996
4. History and legal structure of the entities included in the combined
financial statements
SA Beverage Sales Holding NV
BSH is incorporated in Belgium as a "societe anonyme - naamloze
vennootschap" (joint stock company) and was a wholly-owned indirect
subsidiary of TCCC until July 26, 1996 (see note 6 Subsequent events). BSH
was originally incorporated in 1989 under the name SA Beverage Holdings
(1989) NV. Between 1989 and 1991, BSH acquired several independent franchise
bottlers, and certain of the legal entities acquired were merged into it,
directly or indirectly. BSH's name was successively changed to SA Coca-Cola
Beverages (1991) NV in 1991, to SA Coca-Cola Beverages Belgium NV in 1994,
and to its current name on March 5, 1996.
On November 16, 1993, BSH acquired 72% of the outstanding shares of
Belbottling NV, a toll packer of beverages of TCCC held by Interbrew, a
leading Belgian brewery. Belbottling simultaneously acquired from Interbrew
72% of the outstanding shares of Socodrink SA/NV, a franchise bottler of
beverages of TCCC, and 100% of the outstanding shares of Coca-Cola Bottling
(South & West Belgium) SA/NV ("CCBS&W"), also a franchise bottler. BSH
already owned the remaining 28% of the shares of Belbottling and Socodrink.
On December 30, 1993, Socodrink was merged into Belbottling which changed its
name to Socodrink ("New Socodrink").
On August 5, 1994, New Socodrink acquired all of the outstanding shares of
the independent franchise bottlers Antwerpco NV and Gentopco NV owned by the
Van Milders family.
On September 13, 1994, SA Coca-Cola Production Belgium NV was incorporated as
a wholly-owned subsidiary of BSH. Its name was subsequently changed to SA
Coca-Cola Bottlers Belgium NV ("Bottlers").
On December 29, 1995, CCBS&W, Antwerpco and Gentopco were merged into New
Socodrink.
F-45
<PAGE>
NOTES TO UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and Coca-Cola Production SA
June 30, 1996
4. History and legal structure of the entities included in the combined
financial statements (Continued)
SA Beverage Sales Holding NV (Continued)
On February 14, 1996, BSH contributed its bottling activities to New
Socodrink in exchange for shares with retroactive effect from January 1,
1996. New Socodrink changed its name to SA Coca-Cola Beverages Belgium NV
("CCBB") on March 5, 1996.
As a result of the above changes, the current legal structure of the Belgian
Coca-Cola bottling entities comprises BSH (parent company without activity
other than holding the shares in its subsidiaries) and its two wholly-owned
operating subsidiaries CCBB and Bottlers.
Coca-Cola Beverages SA
CCBSA is registered in France as a "societe anonyme" (joint stock company)
and is a wholly-owned, indirect subsidiary of TCCC until July 26, 1996 (see
note 6 Subsequent events).
The Company was originally incorporated in 1987 under the name Coca-Cola
Distribution SA. In 1989, Coca-Cola Distribution purchased from the Pernod
Ricard Company substantially all of the shares in four of its subsidiaries
which were the primary bottlers and distributors of beverages of TCCC in
France: Societe Parisienne de Boissons Gazeuses (100%), Societe Regionale de
Boissons Gazeuses (51%), Societe Vichyssoise de Boissons Gazeuses (100%) and
Grande Limonaderie de Vichy (100%). The remaining shares of Societe
Regionale de Boissons Gazeuses were purchased from The Coca-Cola Export
Corporation ("TCCEC") (26%), a wholly-owned subsidiary of TCCC, and
Brasseries et Glaciere Internationales (23%), a company not affiliated with
the Pernod Ricard Company or TCCC.
In 1989, Coca-Cola Distribution merged with its four subsidiaries and the
resulting entity was renamed Coca-Cola Beverages SA.
F-46
<PAGE>
NOTES TO UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and Coca-Cola Production SA
June 30, 1996
4. History and legal structure of the entities included in the combined
financial statements (Continued)
Coca-Cola Production SA
CCP is registered in France as a "societe anonyme" (joint stock company) and
was incorporated in 1987 in the Industrial Zone of Bergues (Dunkirk). CCP was
a wholly-owned subsidiary of Barlan Incorporated, a company incorporated in
the state of Delaware and a wholly-owned indirect subsidiary of TCCC until
July 26, 1996 (see note 6 Subsequent events).
5. Contingencies
Legal proceedings
The combined Companies are defendants in a number of legal proceedings and
have various unresolved claims arising in the ordinary course of business.
The outcome of these lawsuits and claims is not known at this time. The
combined Companies believe that the resulting liability, if any, net of
amounts recoverable from insurance or other sources, will not have a material
adverse effect on their combined results of operations or financial position.
Environmental matters concerning bottlers acquired
Upon the acquisition of independent bottlers, management of BSH became aware
that the entities acquired did not always fully comply with local
environmental regulations and/or TCCC policies. BSH has estimated the costs
of remedial actions required to ensure compliance with the regulations and
TCCC policies and has accrued these estimated costs in the accompanying
financial statements. Such accruals amounted to approximately $ 3.8 million
and $ 4.7 million as of June 30, 1996 and 1995, respectively. Also,
management has taken the necessary actions to ensure substantial compliance
with local regulations and believes that any situations of non-compliance
will not have a material adverse effect on BSH's consolidated results of
operations or financial position.
F-47
<PAGE>
NOTES TO UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and Coca-Cola Production SA
June 30, 1996
5. Contingencies (Continued)
Tax examinations
CCBSA received notices of assessment from the French tax authorities in
December 1995 concerning its tax returns for 1992 and 1993. In January 1996,
CCBSA submitted its objections to the assessment notices and received a
response from the French tax authorities in April 1996. As the most
significant items of reassessment have not yet been resolved to CCBSA's
satisfaction, further discussions are currently being held with the tax
authorities on a regular basis and another meeting is scheduled for September
1996. If an agreement cannot be reached, CCBSA will take its case to the
French tax commission ("interlocuteur departemental"). Due to the tax losses
which CCBSA has available for carryforward, CCBSA believes that the ultimate
resolution of this matter will have no effect on its consolidated results of
operations or financial position.
CCP has received notices of assessment from the French tax authorities
concerning tax returns filed for 1991, 1992 and 1993. Although the statute of
limitations with respect to the years 1988, 1989 and 1990 has expired, due to
the existence of loss carryforwards, the tax authorities can still examine
the activities of CCP for this period. Even though CCP benefits from a
corporate tax holiday, any reassessments to previously declared taxable or
non-taxable income may be subject to corporate tax.
The most significant proposed adjustment corresponds to the difference
between The Coca-Cola Trading Company's cost and its sales price for all
items sold to CCP in 1991, 1992 and 1993. TCCC and CCP management believe
that CCP's income has been properly reported in its tax returns and, at this
stage, refuse to make concessions on its transfer pricing policy which is
determined within the TCCC Group on a world-wide basis and which management
believes respects the arm's length principle. The other main potential
assessment concerns the disallowance of losses available for carryforward
against non-trading income which amounted to approximately $ 13 million at
December 31, 1993. The tax authorities' position is that a company located in
a tax-free zone cannot record a net loss insofar as it relates to taxable
non-trading income.
F-48
<PAGE>
NOTES TO UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS (CONTINUED)
SA Beverage Sales Holding NV, Coca-Cola Beverages SA and Coca-Cola Production SA
June 30, 1996
5. Contingencies (Continued)
Tax examinations (Continued)
In addition to losing the future benefit of losses available for
carryforward, the maximum tax liability which could result from the notices
of assessment for 1991, 1992 and 1993 amounts to approximately $ 17.7
million, including approximately $ 3.2 million for interest and penalties.
In January 1996, CCP submitted its objections to the reassessment notices and
received a response from the French tax authorities in April 1996. As the
most significant items of reassessment have not yet been resolved to CCP's
satisfaction, further discussions are currently being held with the tax
authorities on a regular basis and another meeting is scheduled for September
1996. If an agreement cannot be reached, CCP will take its case to the French
tax commission ("interlocuteur departemental"). As CCP management is
currently unable to predict the final outcome of this matter, no accrual for
any potential tax liability has been recorded in the interim financial
statements at June 30, 1996. CCP does not expect, however, that the ultimate
resolution of this matter will have a material adverse effect on its
financial position.
6. Subsequent events
On June 13, 1996, an extraordinary meeting of CCBSA'S shareholders approved a
two-stage restructuring of CCBSA'S share capital as follows:
a. reduction of CCBSA'S share capital from FRF 3,085,316,000 to FRF
1,882,042,760 by incorporating FRF 1,203,273,240 from CCBSA'S accumulated
deficit account as reported in its French statutory financial statements,
and thus reducing the par value of CCBSA'S 30,853,160 ordinary shares from
FRF 100 to FRF 61 each;
b. repurchase for subsequent cancellation, by CCBSA, of 20,655,738 of its own
ordinary shares for the amount of FRF 1,260,000,018 at par value of FRF 61
per share.
To finance the share repurchase which took place on July 18, 1996, CCBSA
borrowed FRF 1,024 million on July 17, 1996 under two short-term credit
facilities with the Societe Generale and the BNP, of FRF 650 million each and
expiring December 31, 1996.
Effective July 26, 1996, the combined Companies were sold to Bottling
Holdings (International) Inc., a subsidiary of Coca-Cola Enterprises Inc.
F-49
<PAGE>
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
REPORT OF THE INDEPENDENT CHARTERED ACCOUNTANTS
AND REGISTERED AUDITORS
To the Shareholders of Amalgamated Beverages Great Britain Limited
We have audited the accompanying consolidated accounts of Amalgamated Beverages
Great Britain Limited and subsidiaries. These accounts are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these accounts based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
which are substantially in accordance with US auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the accounts are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the accounts. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall accounts presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the accounts referred to above present fairly, in
all material respects, the consolidated financial position of Amalgamated
Beverages Great Britain Limited and subsidiaries as of December 30 1995 and
December 31 1994 and the consolidated results of their operations and their cash
flows for each of the years in the 3 year period ended December 30 1995 in
conformity with generally accepted UK accounting principles.
The accounts have been prepared in accordance with accounting practices
prevailing in the UK which differ in certain respects from those generally
accepted in the US. The effects of the major differences in the determination
of net income and Shareholders' equity are shown in Note 5 on the accounts.
/s/ Arthur Andersen
Chartered Accountants and Registered Auditors
1 Surrey Street
London
WC2R 2PS
1 March 1996
F-50
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE 52 WEEKS ENDED 30 DECEMBER 1995 (NOTE 2)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
1995 1994 1993
Notes (Pounds)'000 (Pounds)'000 (Pounds)'000
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TURNOVER 4 904,139 802,615 757,254
Cost of sales - ordinary business (611,635) (515,214) (490,004)
- property revaluation 11 (6,490) - -
-------- -------- --------
GROSS PROFIT 286,014 287,401 267,250
Net operating expenses 6 (173,390) (157,964) (160,604)
-------- -------- --------
Operating Profit 7 112,624 129,437 106,646
(Loss)/Profit on sale of tangible
fixed assets (344) 143 (600)
-------- -------- --------
PROFIT ON ORDINARY ACTIVITIES BEFORE
INTEREST 112,280 129,580 106,046
Net interest 8 (1,142) 241 1,064
-------- -------- --------
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION 111,138 129,821 107,110
Tax on profit on ordinary activities 9 (42,938) (43,221) (35,126)
-------- -------- --------
PROFIT FOR THE FINANCIAL YEAR 68,200 86,600 71,984
Dividends to ordinary shareholders 10 (118,200) (136,600) (70,000)
-------- -------- --------
Transfer (from)/to retained earnings
for the year (50,000) (50,000) 1,984
======== ======== ========
</TABLE>
The accompanying notes are an integral part of this profit and loss account.
A statement of the movements on reserves is shown in note 20.
F-51
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
AND RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
FOR THE 52 WEEKS ENDED 30 DECEMBER 1995 (NOTE 2)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
1995 1994 1993
(Pounds)'000 (Pounds)'000 (Pounds)'000
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
STATEMENT OF TOTAL RECOGNISED
GAINS AND LOSSSES
Profit and total recognised gains
and losses for the financial year 68,200 86,600 71,984
======== ======== ========
RECONCILIATION OF MOVEMENTS IN
SHAREHOLDERS' FUNDS
Total recognised gains and losses
as above 68,200 86,600 71,984
Property revaluation (note 11) (6,073) - -
Dividends to ordinary shareholders (118,200) (136,600) (70,000)
-------- -------- --------
Net (decrease)/increase in
shareholders' funds (56,073) (50,000) 1,984
Opening shareholders' funds 161,935 211,935 209,951
-------- -------- --------
Closing shareholders' funds 105,862 161,935 211,935
======== ======== ========
NOTE OF HISTORICAL COSTS PROFIT
AND LOSSES
Profit on ordinary activities
before taxation 111,138 129,821 107,110
Realisation of property revaluation
surpluses 1,058 799 332
Adjustment of depreciation to
historical cost basis 148 176 185
Property revaluation (note 11) 6,490 - -
-------- -------- --------
Historical cost profit on ordinary
activities before taxation 118,834 130,796 107,627
======== ======== ========
Historical cost profit attributable
to ordinary shareholders 75,896 87,575 72,501
======== ======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
F-52
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
BALANCE SHEETS
AS AT 30 DECEMBER 1995 (NOTE 2)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
1995 1994
Notes (Pounds)'000 (Pounds)'0000
- ------------------------------------------------------------------------
<S> <C> <C> <C>
FIXED ASSETS
Tangible Assets 11 199,519 216,670
Investments 12 - -
-------- --------
CURRENT ASSETS
Stocks 13 33,029 24,590
Debtors 14 143,950 192,286
Cash at bank and in hand 21,371 6,571
-------- --------
198,350 223,447
Creditors: Amounts falling due
within one year 15 (246,187) (230,509)
-------- --------
NET CURRENT LIABILITIES (47,837) (7,062)
-------- --------
TOTAL ASSETS LESS CURRENT
LIABILITIES 151,682 209,608
Creditors: Amounts falling due after
more than one year 16 (37,813) (42,334)
Provisions for liabilities and charges 18 (8,007) (5,339)
-------- --------
105,862 161,935
======== ========
EQUITY CAPITAL AND RESERVES
Called-up equity share capital 19 204 204
Revaluation reserve 20 - 7,279
Other reserves 20 57,811 57,811
Merger reserve 20 (17,484) (17,484)
Profit and loss account 20 65,322 114,116
CALLED-UP NON-EQUITY SHARE
CAPITAL 19 9 9
-------- --------
TOTAL CAPITAL EMPLOYED 105,862 161,935
======== ========
On behalf of the Board
Director:..........................D.G. Wellings
1 March 1996
The accompanying notes are an integral part of this balance sheet.
</TABLE>
F-53
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
GROUP CASH FLOW STATEMENT
FOR THE 52 WEEKS ENDED 30 DECEMBER 1995 (NOTE 2)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
1995 1994 1993
Notes (Pounds)'000 (Pounds)'000 (Pounds)'000
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net cash inflow from operating
activities 17 153,542 159,456 113,622
RETURNS ON INVESTMENTS AND SERVICING
OF FINANCE
Interest paid (4,449) (4,000) (4,699)
Interest received 3,235 4,298 5,738
Dividends paid to shareholders (136,600) (120,000) -
-------- -------- --------
(137,814) (119,702) 1,039
-------- -------- --------
TAXATION
UK Corporation tax paid (37,253) (58,568) (33,453)
INVESTING ACTIVITIES
Purchase of tangible fixed assets (24,100) (35,378) (33,057)
Receipts from sale of tangible
fixed assets 2,488 2,889 1,088
-------- -------- --------
(21,612) (32,489) (31,969)
-------- -------- --------
NET CASH (OUTFLOW)/INFLOW BEFORE
FINANCING (43,137) (51,303) 49,239
FINANCING
Finance leases repaid (5,675) (7,360) (9,790)
-------- -------- --------
Net cash outflow from financing (5,675) (7,360) (9,790)
-------- -------- --------
(DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS 17 (48,812) (58,663) 39,449
======== ======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
F-54
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
1. Accounting Policies
-------------------
A summary of the principal accounting policies is set out below all of which
have been applied consistently throughout the year and with the preceding year,
except as noted.
(a) Accounting convention
---------------------
The accounts are prepared under the historical cost convention, modified
for the revaluation of certain fixed assets and in accordance with
applicable accounting standards.
(b) Financial year
--------------
The annual accounts are made up to the Saturday nearest to 31 December.
Periodically this results in a financial year of 53 weeks.
(c) Basis of consolidation
----------------------
The group accounts consolidate the accounts of the Company and its
subsidiary undertakings after eliminating internal transactions.
(d) Foreign currencies
------------------
Amounts denominated in foreign currencies are translated at the middle
market rates at the balance sheet date except in the case of third party
transactions covered forward where rates fixed in the contracts are used.
Exchange differences are taken to the profit and loss account.
(e) Turnover
--------
This represents the invoiced value of sales (net of trade discounts) and
royalties excluding value added tax.
F-55
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
(f) Deferred taxation
-----------------
Credit is taken for advance corporation tax paid to the extent that it is
recoverable against the liability to corporation tax in the foreseeable
future. Deferred taxation recoverable is recognised on short term timing
differences arising from provisions for pensions, reorganisations and other
items. Provision is made for deferred taxation, using the liability method,
on other timing differences to the extent that these amounts are regarded
as likely to become payable in the foreseeable future.
The principal categories of timing differences are:
(i) The excess of book value of tangible fixed assets over their tax
written down value.
(ii) The excess of leasing rentals over the depreciation of leased assets
and associated finance charges.
(iii) Income and expenditure in the accounts of the current year dealt with
in other years for taxation purposes.
(iv) Revaluation surpluses in respect of projected property sales on the
assumption that the properties are sold at the revalued figures.
(g) Stocks
------
Stocks are valued at the lower of average cost and estimated net realisable
value. Cost is purchase price or production cost in the case of products
manufactured by the Group. Production cost consists of direct material and
labour costs together with a reasonable proportion of manufacturing
overheads on the basis of normal activity levels.
(h) Tangible fixed assets
---------------------
Depreciation is charged on the original cost or subsequent valuation of
assets (excluding freehold land and assets in the course of construction).
The principal annual rates are as follows:
Freehold buildings and long leasehold properties 2.5%
Plant and equipment 10%
Vehicles 12.5% - 20%
Office equipment 20%
Short leasehold properties are depreciated over the life of the lease.
In specific cases higher depreciation rates are used, e.g. machinery
subject to technological changes, and any machinery with a high
obsolescence factor.
Investment and development grants are shown as deferred income and
credited to the profit and loss account by instalments on a basis
consistent with depreciation policy.
Returnable containers, including those in customers' hands, are valued at
the deposit value charged to customers with due provision for obsolescence
where required. Any write-down to deposit value is charged to the profit
and loss account.
F-56
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
(h) Tangible fixed assets (Continued)
---------------------------------
Major software development costs (comprising the cost of bought-in packages
and related labour costs incurred during installation, whether supplied
externally or from within the group) are capitalised and subsequently
amortised over the expected useful life of the product.
(i) Fixed assets held under leases
------------------------------
Where assets are financed by leasing agreements that give rights
approximating to ownership ('finance leases') the assets are treated as if
they had been purchased outright and the corresponding liability to the
leasing company is included as an obligation under finance leases.
Depreciation of leased assets is charged to the profit and loss account on
the same basis as shown above.
Leasing payments are treated as consisting of capital and interest elements
and the interest is charged to the profit and loss account.
All other leases are 'operating leases' and the relevant annual rentals are
charged wholly to the profit and loss account.
(j) Revaluation of properties
-------------------------
Freehold and leasehold properties are revalued every five years and the
surplus/deficit on book value included as a movement on revaluation
reserve. In subsequent years transfers are made to retained profits in
order to amortise the surplus/deficit over the remaining useful lives of
the properties. On disposal the unamortised revaluation surplus or deficit
on a property is transferred to retained profits.
(k) Pension costs
-------------
The costs of providing pensions and other termination benefits are charged
to the profit and loss account on a consistent basis over the service lives
of employees. Such costs are calculated by reference to actuarial
valuations and variations from such regular costs are spread over the
remaining service lives of the current employees. To the extent that such
costs do not equate with cash contributions a provision or prepayment is
recognised in the balance sheet.
2. Group Accounts
--------------
The profit and loss accounts cover the 52 weeks from 1 January 1995 to 30
December 1995, the 52 weeks from 2 January 1994 to 31 December 1994 and the
52 weeks from 3 January 1993 to 1 January 1994. The balance sheets for 1995
and 1994 have been drawn up at 30 December 1995 and 31 December 1994
respectively.
F-57
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
3. Ultimate parent company
-----------------------
The Group's immediate and ultimate parent company is Cadbury Schweppes
Public Limited Company, registered in England and Wales, which holds 51% of
the ordinary share capital. The remaining 49% of the ordinary share capital
is held by Coca-Cola Holdings (UK) Limited. Copies of the Group Accounts of
Cadbury Schweppes Public Limited Company are available to the public from 25
Berkeley Square, London W1X 6HT.
4. Turnover and profit on ordinary activities before taxation
----------------------------------------------------------
The Group has a single activity which is the manufacture, sale and
distribution of soft drinks in Great Britain.
5. Summary of differences between UK and US generally accepted accounting
----------------------------------------------------------------------
principles
----------
The accounts are prepared in accordance with generally accepted
accounting principles applicable in the UK ("UK GAAP"), which differ in
certain significant respects from those applicable in the US ("US GAAP").
These differences relate principally to the following items and the
necessary adjustments are shown in the tables set out below.
(a) Interest capitalisation
-----------------------
Under UK GAAP, the capitalisation of interest is optional and the
Company has not capitalized any interest on capital construction
projects.
Under US GAAP, interest incurred as part of the cost of acquiring all
fixed assets which become assets in the course of construction is
capitalized and amortized over the life of the asset, following its
commissioning.
(b) Revaluation of properties
-------------------------
Under UK GAAP, properties may be restated on the basis of appraised
values in accounts prepared in all other respects in accordance with the
historical cost convention. Such restatements are not generally
permitted under US GAAP, except in connection with purchase accounting,
and accordingly, adjustments to net income and Shareholders' equity are
required to eliminate the above restatements.
(c) Pension costs
-------------
Under UK GAAP, the costs of providing pension benefits may be calculated
by the use of any recognized actuarial method which is appropriate and
whose assumptions reflect the long term nature of the assets and
liabilities involved.
Under US GAAP (SFAS 87), the Groups's employees are considered to have
participated in a multi-employer pension plan. For multi-employer plans
employers are required to recognise as net pension expense total
contributions for the period.
(d) Ordinary dividends
------------------
Under UK GAAP, final ordinary dividends are provided in the accounts on
the basis of the recommendation by the Directors which requires
subsequent approval by the Shareholders' to become a legal obligation of
the Company.
F-58
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
Under US GAAP, dividends are only provided when the legal obligation to pay
arises.
(e) Deferred Taxation
-----------------
Under UK GAAP, no provision is made for deferred taxation if there is
reasonable evidence that such deferred taxation will not be payable in the
foreseeable future.
Under US GAAP, deferred taxation is provided in full on the liability method
in accordance with the provisions of SFAS 109 "Accounting for Income Taxes".
(f) Cash Flows
----------
Under UK GAAP the Group complies with the Financial Reporting Standard No. 1
"Cash Flow Statements" (FRS 1), the objective and principles of which are
similar to those set out in SFAS 95 "Statement of Cash Flows" (SFAS 95). The
principle difference between the two standards is in respective of
classification. Under FRS 1, the Group presents its cashflows for (a)
operating activities; (b) returns on investments and servicing of finance;
(c) taxation; (d) investing activities; and (e) financing activities. SFAS
95 requires only three categories of cash flow activity (a) operating; (b)
investing; and (c) financing.
Cash flows arising from taxation and returns on investments and servicing of
finance under FRS 1 would, with the exception of dividends paid, be included
as operating activities under SFAS 95; dividend payments would be included
as a financing activity under SFAS 95. In addition, under FRS 1, cash and
cash equivalents include short term borrowings with original maturities of
less than 90 days. SFAS 95 requires movements on such short term borrowings
to be included in financing activities.
Approximate effects on net income of differences between UK
and US generally accepted accounting principles
1995 1994 1993
(Pounds)'000 (Pounds)'000 (Pounds)'000
Net Income (per UK GAAP) 68,200 86,600 71,984
US GAAP adjustments:
Interest capitalisation
and related amortisation (1,198) (1,243) (1,067)
Amortisation of revaluation surplus
and disposal loss reversal 1,206 975 517
Pension costs (385) 821 3,021
Deferred Taxation: on adjustments 522 139 (645)
methodology 3,113 1,297 228
------ ------ ------
Net income as adjusted for US GAAP 71,458 88,589 74,038
====== ====== ======
Approximate cumulative effect on Shareholders' equity of differences between UK
and US generally accepted accounting principles
1995 1994
(Pounds)'000 (Pounds)'000
Shareholders' equity (per UK GAAP) 105,862 161,935
US GAAP adjustments:
Interest capitalisation 7,645 8,843
Property revaluations - (7,279)
Pension costs 9,076 9,461
Dividends 68,200 86,600
Deferred Taxation: on adjustments (5,518) (6,040)
methodology (15,417) (18,530)
------- -------
Shareholders' equity adjusted as for US GAAP 169,848 234,990
======= =======
There is no adjustment in the above reconciliations for the unrealised gains and
losses on hedged anticipated transactions as the amounts are not material.
F-59
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
<TABLE>
<CAPTION>
6. Net operating expenses
----------------------
1995 1994 1993
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
Distribution costs, including marketing 141,862 124,100 123,543
Administration expenses 31,528 33,864 37,061
------- ------- -------
173,390 157,964 160,604
======= ======= =======
7. Operating profit
----------------
1995 1994 1993
(Pounds)'000 (Pounds)'000 (Pounds)'000
Operating profit is stated
after charging:
Depreciation on owned assets
including container usage 24,426 23,972 25,977
Depreciation on leased assets under
finance leases 8,854 9,752 11,664
Operating lease rentals
- plant and machinery 5,883 7,406 7,240
- properties 3,751 3,769 3,995
Auditors' remuneration
- audit services 106 102 100
- non-audit services 13 20 173
and after crediting:
Amortisation of government grants (48) (114) (140)
====== ======= ======
8. Net interest
------------
1995 1994 1993
(Pounds)'000 (Pounds)'000 (Pounds)'000
Finance leases 1,435 1,106 1,644
Bank overdrafts and other short term
borrowings 83 163 205
Inter-company interest paid 2,859 2,788 2,788
----- ----- -----
Interest payable 4,377 4,057 4,637
----- ----- -----
Less:
Interest on short term loans and
deposits (37) (274) (71)
Intercompany interest received (3,198) (4,024) (5,630)
----- ----- -----
Interest receivable (3,235) (4,298) (5,701)
----- ----- -----
Net interest 1,142 (241) (1,064)
===== ===== =====
</TABLE>
F-60
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
9. Tax on profit on ordinary activities
------------------------------------
<TABLE>
<CAPTION>
1995 1994 1993
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
Corporation tax at 33% 39,926 43,369 36,475
Deferred taxation (note 18) 2,455 (724) (115)
------ ------ ------
Charge for the year 42,381 42,645 36,360
(Over)/underprovision in previous years:
Corporation tax (41) (477) (1,850)
Deferred taxation (note 18) 598 1,053 616
------ ------ ------
42,938 43,221 35,126
====== ====== ======
</TABLE>
Corporation tax payable is provided on taxable profits at the current rate
as noted above. The charge of (Pounds)42.9m (1994 (Pounds)43.2m; 1993
(Pounds)35.1m) was increased by (Pounds)0.3m (1994 (Pounds)1.2m) because
timing differences, which reversed during the year, have not been
previously provided for, and decreased in 1993 by (Pounds) 0.9M due to
timing differences which originated during the year.
10. Dividends to ordinary shareholders
----------------------------------
<TABLE>
<CAPTION>
1995 1994 1993
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
Interim paid (Pounds)245.00 (1994 (Pounds)245.00;
1993 (Pounds)'NIL) per ordinary share 50,000 50,000 -
Final proposed (Pounds)334.18
(1994 (Pounds)424.34; 1993 (Pounds)343.00)
per ordinary share 68,200 86,600 70,000
------- ------- ------
118,200 136,600 70,000
======= ======= ======
</TABLE>
F-61
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
11. Tangible fixed assets
---------------------
<TABLE>
<CAPTION>
Land and Plant and In course of
Group buildings equipment construction Total
- -----
<S> <C> <C> <C> <C>
(a) Movement during the year (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
Cost or valuation
-----------------
At beginning of year 92,930 258,573 6,589 358,092
Additions - 8,996 22,528 31,524
Transfer on completion 478 14,467 (14,945) -
Disposals (2,684) (9,887) - (12,571)
Revaluation adjustment (18,246) - - (18,246)
------- -------- ------- --------
At end of year 72,478 272,149 14,172 358,799
------- -------- ------- --------
Depreciation
------------
At beginning of year (6,183) (135,239) - (141,422)
Depreciation for year (1,340) (31,940) - (33,280)
Disposals 780 8,959 - 9,739
Revaluation adjustment 5,683 - - 5,683
------- -------- ------- --------
At end of year (1,060) (158,220) - (159,280)
------- -------- ------- --------
Net book value
--------------
At end of year 71,418 113,929 14,172 199,519
======= ======== ======= ========
At beginning of year 86,747 123,334 6,589 216,670
======= ======== ======= ========
</TABLE>
Plant and equipment includes fixtures and fittings. Assets in course of
construction includes payments on account. Plant and equipment also includes
returnable containers of (Pounds)8.8m (1994 (Pounds)8.8m) which have been
stated at deposit rate as charged to customers. Their value at most recent
purchase price would be (Pounds)15.1m (1994 (Pounds)16.5m).
F-62
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
11. Tangible fixed assets (Continued)
--------------------------------
<TABLE>
<CAPTION>
1995 1994
(Pounds)'000 (Pounds)'000
<S> <C> <C>
(b) Finance leases
Included in tangible fixed assets are:
Plant and equipment under finance leases 85,451 86,274
Less: accumulated depreciation (61,044) (52,624)
------- -------
24,407 33,650
======= =======
(c) Land and buildings
Freehold 69,172 82,271
Long leasehold - 4,270
Short leasehold 2,246 206
------- -------
Net book value 71,418 86,747
======= =======
Analysis of gross value
Professionally valued - Existing use 64,782 48,962
- Alternative use 4,175 -
Valued by the Directors - Existing use - 8,029
At cost 3,521 35,939
------- -------
72,478 92,930
======= =======
The properties were professionally revalued by Fuller Peiser, Chartered
Surveyors, as at 30 September 1995 and the revised valuations have been
incorporated in the accounts at the end of the year. This revaluation
resulted in a reduction of (Pounds)12,563,000 in the book value of the
group's land and buildings. (Pounds)6,073,000 of this reduction was charged
to the revaluation reserve with the remaining (Pounds)6,490,000 being
charged to the profit and loss account in the year. Depreciation for the
year has been calculated on the book values before taking into account the
1995 revaluation.
If the revalued assets were stated on a historical basis, the amounts would
be as follows:
1995 1994
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Land and buildings at cost 83,345 51,848
Accumulated depreciation thereon (8,466) (6,558)
------ ------
74,879 45,290
====== ======
Depreciation charge for the year 840 861
====== ======
</TABLE>
F-63
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
12. Investments
-----------
The Group holds 100% of the equity and loan capital of the following
companies, all incorporated and operating in Great Britain
Direct and principal trading subsidiary undertaking:
Coca-Cola & Schweppes Beverages Limited
Indirect, non-trading subsidiary undertakings:
Frontier Refreshment Services Limited
Vendleader Limited.
SD Collections Limited, a non-trading subsidiary undertaking was
voluntarily wound-up during the year.
13. Stocks
------
<TABLE>
<CAPTION>
1995 1994
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Raw materials and consumables 11,513 8,990
Finished goods and goods for resale 16,760 11,300
Consumable stores and other stocks 4,756 4,300
------- -------
33,029 24,590
======= =======
</TABLE>
The replacement cost of the stocks is not materially different from the
balance sheet value.
14. Debtors
-------
<TABLE>
<CAPTION>
1995 1994
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Receivable within one year:
Trade debtors 81,037 80,136
Amounts owed by other group undertakings 18,852 81,165
Loans to employees 19 16
Other debtors 6,492 4,866
Prepayments and accrued income 10,450 4,453
ACT recoverable on interim dividend 10,050 -
------- -------
126,900 170,636
------- -------
</TABLE>
F-64
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
<TABLE>
<CAPTION>
14. Debtors (Continued)
-------------------
1995 1994
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Receivable after more than one year:
ACT recoverable on proposed dividend 17,050 21,650
------- -------
143,950 192,286
======= =======
</TABLE>
15. Creditors: Amounts falling due within one year
----------------------------------------------
<TABLE>
<CAPTION>
1995 1994
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Borrowings:
Bank overdraft (unsecured) 449 -
Current obligations under finance leases 4,060 5,260
Loan from Cadbury Schweppes Public Limited
Company 2,462 2,462
------- -------
6,971 7,722
------- -------
Other creditors:
Payments received on account including deposits on
returnable containers 5,336 5,549
Trade creditors 41,095 34,087
Amounts owed to other group undertakings 659 1,775
Current corporation tax 18,421 18,239
Advance corporation tax 29,550 21,650
VAT 20,286 21,623
Other taxes and social security costs 3,451 2,955
Other creditors 11,633 3,507
Accruals and deferred income 40,539 26,754
Government grants 46 48
Dividends payable to ordinary shareholders 68,200 86,600
------- -------
239,216 222,787
------- -------
246,187 230,509
======= =======
</TABLE>
The loan from Cadbury Schweppes Public Limited Company is interest free.
F-65
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
<TABLE>
<CAPTION>
16. Creditors: Amounts falling due after more than one year
-------------------------------------------------------
1995 1994
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Wholly repayable within five years:
Loan from Cadbury Schweppes Public Limited Company 24,000 24,000
Obligations under finance leases 9,781 12,372
Government grants 112 158
Not wholly repayable within five years:
Obligations under finance leases 3,920 5,804
------ ------
37,813 42,334
====== ======
The loan from Cadbury Schweppes Public Limited Company is at 11.65%
fixed interest rate per annum for 10 years from 11 December 1989.
17. Cash flow statement
-------------------
1995 1994 1993
(Pounds)'000 (Pounds)'000 (Pounds)'000
(a) Net cash inflow from operating activities
<S> <C> <C> <C>
Operating profit 112,624 129,437 106,646
Depreciation charges 33,280 33,724 37,641
Property revaluation (note 11) 6,490 - -
Increase in stock (8,439) (506) (2,282)
(Increase)/decrease in debtors (9,400) (6,369) 11,530
Increase/(decrease) in creditors 19,372 2,349 (42,934)
(Decrease)/increase in pension provision (385) 821 3,021
-------- ------- -------
Net cash inflow from operating activities 153,542 159,456 113,622
======== ======= =======
</TABLE>
(b) Cash and cash equivalents and financing
<TABLE>
<CAPTION>
Cash and cash equivalents Financing
----------------------------------------------- -------------
Cash at bank Short-term Bank Total Finance lease
and in hand investment overdrafts obligations
<S> <C> <C> <C> <C> <C>
End of l992 6,958 98,281 (31) 105,208 (40,586)
Net inflow in 1993 3,184 36,234 31 39,449 9,790
------ ------- ---- ------- ------
End of l993 10,142 134,515 0 144,657 (30,796)
Net inflow/(outflow) in 1994 (3,571) (55,092) 0 (58,663) 7,360
------ ------- ---- ------- ------
End of 1994 6,571 79,423 0 85,994 (23,436)
Net inflow/(outflow) in 1995 14,800 (63,163) (449) (48,812) 5,675
------ ------- ---- ------- ------
End of 1995 21,371 16,260 (449) 37,182 (17,761)
====== ======= ==== ======= ======
</TABLE>
Short-term investments are cash transferred to a group company on short-
term loan and included within debtors.
F-66
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
18. Provisions for liabilities and charges
--------------------------------------
<TABLE>
<CAPTION>
Deferred
Pensions taxation Total
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
At beginning of year 9,461 (4,122) 5,339
Expenditure in the year (1,118) - (1,118)
Profit and loss account - current year 733 2,455 3,188
- prior year - 598 598
----- ----- -----
At end of year 9,076 (1,069) 8,007
===== ===== =====
</TABLE>
The total potential liability of the Group for deferred taxation was as
follows:
<TABLE>
<CAPTION>
1995 1994
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Not provided in accounts:
Accelerated capital allowances 14,532 17,312
Excess of lease rentals over depreciation and finance charges 885 1,218
Taxes that would arise if property were to be disposed of
at revalued amounts 1,317 2,892
------ ------
16,734 21,422
Provided in accounts:
Short-term timing differences (1,069) (4,122)
------ ------
15,665 17,300
====== ======
</TABLE>
19. Share capital
-------------
<TABLE>
<CAPTION>
1995 1994
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Authorised:
Equity - 204,082 ordinary shares of (pound)1 each 204 204
Non-equity - 900,000 5% non-cumulative preference shares of (pound)1 each 900 900
----- -----
1,104 1,104
===== =====
Allotted and called-up:
Equity - 204,082 ordinary shares of (pound)1 each fully paid 204 204
Non-equity - 900,000 5% non-cumulative preference shares of (pound)1 each
1 penny paid 9 9
--- ---
213 213
=== ===
</TABLE>
The preference shares carry no rights to vote or receive dividends in
excess of 5% per annum of the amount paid-up on such shares and in a
winding-up have priority over the ordinary shares for the return of the
amount paid up, but no further share in the assets.
F-67
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
<TABLE>
<CAPTION>
20. Reserves
--------
Revaluation Other Merger Profit and
reserve reserves reserve loss account
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C>
At beginning of year 7,279 57,811 (17,484) 114,116
Transfer from retained earnings for the year - - - (50,000)
Depreciation on revalued assets (148) - - 148
Disposals of revalued assets (1,058) - - 1,058
Property revaluation (note 11) (6,073) - - -
----- ------ ------- ------
At end of year - 57,811 (17,484) 65,322
===== ====== ======== ======
</TABLE>
21. Group set-off facility
----------------------
A right of set-off existed at the balance sheet date between the Group
Companies and Cadbury Schweppes Public Limited Company in respect of
the collective borrowing facilities with Midland Bank plc and Bank of
America.
22. Commitments for capital expenditure
-----------------------------------
<TABLE>
<CAPTION>
1995 1994
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Commitments for capital expenditure are estimated as
follows:
Contracted for but not provided in the accounts 5,348 2,108
Authorised but not contracted for 6,588 2,069
------ -----
11,936 4,177
====== =====
</TABLE>
F-68
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
23. Leasing commitments
-------------------
The future minimum lease payments to which the Group is committed as at
30 December 1995 under finance leases, fall due as follows:
<TABLE>
<CAPTION>
1995 1994
(Pounds)'000 (Pounds)'000
<S> <C> <C>
- within one year 6,110 7,573
- in two to five years 15,426 19,059
- in more than five years 5,882 8,796
------ ------
27,418 35,428
less finance charges allocated
to future periods (9,657) (11,992)
------ ------
17,761 23,436
====== ======
</TABLE>
Payments due in respect of operating leases for the next financial year
are as follows:
<TABLE>
Property Plant and equipment
1995 1994 1995 1994
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C>
On leases expiring:
- within one year 286 50 2,183 2,107
- in two to five years 2,263 2,528 5,415 2,986
- in more than five years 822 844 118 31
----- ----- ----- -----
3,371 3,422 7,716 5,124
===== ===== ===== =====
</TABLE>
24. Contingent liabilities
----------------------
(a) The Group has guaranteed bridging loans by Hambro Countrywide
Relocation plc to employees who are being relocated. The total
value of such loans outstanding at 30 December 1995 was
(Pounds)396,475 (1994 (Pounds)416,000).
(b) The potential amount of deferred taxation not provided is set out
in note 18.
F-69
<PAGE>
ABGB
----
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
NOTES ON THE ACCOUNTS
(Continued)
25. Pension arrangements
--------------------
The Group is a member of the Cadbury Schweppes group of companies which
operates group pension schemes for its UK subsidiary undertakings.
The major scheme is the Cadbury Schweppes Pension Fund for which the last
full valuation was carried out as at 5 April 1993 on the projected unit
method. At this date the market value of the assets was (Pounds)736m and
the level of funding on an actuarial basis was 110%.
The principal assumptions on average were that the rate of return on fund
assets would be 9.5%, that the rate of salary increases would be 7.0% and
that past and future pensions would increase by 5.0%.
The total pension costs for the Group were (Pounds)3.8m (1994
(Pounds)3.8m; 1993 (Pounds)3.3m) which together with the pension costs of
other subsidiaries in the group schemes were assessed by qualified
actuaries based on the latest actuarial assessment.
A provision of (Pounds)9.lm (1994 (Pounds)9.5m) included in the
balance sheet represents the excess of pension costs over the amounts
actually contributed to the external funds of the group schemes.
F-70
<PAGE>
<TABLE>
<CAPTION>
GROUP PROFIT AND LOSS ACCOUNT
FOR THE 24 WEEKS ENDED 17 JUNE 1995 AND 15 JUNE 1996
(Unaudited)
- -------------------------------------------------------------------------------
1995 1996
(Pounds)'000 (Pounds)'000
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
TURNOVER 371,091 402,809
Cost of sales (246,858) (271,263)
-------- --------
GROSS PROFIT 124,233 131,546
Net operating expenses (68,854) (78,831)
-------- --------
Operating Profit 55,379 52,715
Profit on sale of tangible fixed assets 448 390
-------- --------
PROFIT ON ORDINARY ACTIVITIES BEFORE
INTEREST 55,827 53,105
Net interest (267) (2,367)
-------- --------
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION 55,560 50,738
Tax on profit on ordinary activities (18,362) (17,298)
-------- --------
PROFIT FOR THE PERIOD 37,198 33,440
Dividends to ordinary shareholders - -
-------- --------
Transfer to retained earnings for
the period 37,198 33,440
======== ========
</TABLE>
The accompanying notes are an integral part of this profit and loss account.
F-71
<PAGE>
<TABLE>
<CAPTION>
GROUP BALANCE SHEET
AS AT 17 JUNE 1995 AND 15 JUNE 1996
(Unaudited)
- ----------------------------------------------------------------------------
1995 1996
(Pounds)'000 (Pounds)'000
- ----------------------------------------------------------------------------
<S> <C> <C>
FIXED ASSETS
Tangible assets 209,024 202,491
------- -------
CURRENT ASSETS
Stocks 50,145 51,248
Debtors 202,249 185,251
Cash at bank and in hand 1,079 1,098
------- -------
253,473 237,597
Creditors: Amounts falling due
within one year (215,829) (254,849)
------- -------
NET CURRENT ASSETS/(LIABILITIES) 37,644 (17,252)
------- -------
TOTAL ASSETS LESS CURRENT
LIABILITIES 246,668 185,239
Creditors: Amounts falling due after
more than one year (42,334) (37,814)
Provisions for liabilities and charges (5,201) (8,123)
------- -------
NET ASSETS 199,133 139,302
======= =======
EQUITY CAPITAL AND RESERVES
Called-up equity share capital 204 204
Revaluation reserve 6,149 -
Other reserves 57,811 57,811
Merger reserve (17,484) (17,484)
Profit and loss account 152,444 98,762
CALLED-UP NON-EQUITY SHARE
CAPITAL 9 9
------- -------
TOTAL CAPITAL EMPLOYED 199,133 139,302
======= =======
</TABLE>
The accompanying notes are an integral part of this balance sheet.
F-72
<PAGE>
<TABLE>
<CAPTION>
GROUP CASH FLOW STATEMENT
FOR THE 24 WEEKS ENDED 17 JUNE 1995 AND
15 JUNE 1996
(Unaudited)
- ------------------------------------------------------------------------------
1995 1996
(Pounds)'000 (Pounds)'000
- ------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net cash inflow from operating
activities 14,356 71,198
RETURNS ON INVESTMENTS AND SERVICING OF
FINANCE
Interest paid (185) (3,527)
Interest received 505 339
Dividends paid to shareholders (86,600) (68,200)
------- -------
(86,280) (71,388)
------- -------
TAXATION
U.K. Corporation tax refunded (paid) 789 (12,449)
INVESTING ACTIVITIES
Purchase of tangible fixed assets (9,534) (26,610)
Receipts from sale of tangible fixed
assets 3,346 713
------- -------
(6,188) (25,897)
------- -------
NET CASH OUTFLOW BEFORE FINANCING (77,323) (38,536)
FINANCING - -
------- --------
DECREASE IN CASH AND CASH EQUIVALENTS (77,323) (38,536)
======= ========
</TABLE>
The accompanying notes are an integral part of this statement.
F-73
<PAGE>
NOTES ON THE ACCOUNTS
1. Basis of Presentation
---------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared under the historical cost convention following accounting policies in
accordance with generally accepted accounting principles applicable in the
United Kingdom for interim financial information and with the instructions to
Form 8-K and Article 10 of Regulation S-X. Accordingly, they do not include all
information and notes required by generally accepted accounting principles
(GAAP) for complete financial statements. In the opinion of management, all
adjustments, consisting of normal recurring accruals, considered necessary for a
fair presentation, have been included. For further information, refer to the
consolidated financial statements and footnotes included in the Amalgamated
Beverages Great Britain Limited annual report for the year ended December 30,
1995.
2. Seasonality of Business
-----------------------
Operating results for the 24 weeks ended June 17, 1995 and June 15, 1996 are not
indicative of results that may be expected for the years ended December 30, 1995
and December 28, 1996, respectively, primarily due to the seasonality of the
Company's business. Unit sales of the Company's products are generally greater
in the second and third quarters due to seasonal factors.
3. Group Accounts
--------------
The profit and loss accounts cover the 24 weeks from 1 January 1995 to 17 June
1995, and the 24 weeks from 31 December 1995 to 15 June 1996. The balance sheets
for 1995 and 1996 have been drawn up at 17 June 1995 and 15 June 1996,
respectively.
4. Turnover and Profit on Ordinary Activities Before Taxation
----------------------------------------------------------
The Group has a single activity which is the manufacture, sale and distribution
of soft drinks in Great Britain.
5. Summary of Differences Between UK and US Generally Accepted Accounting
----------------------------------------------------------------------
Principles
----------
The financial statements are prepared in accordance with generally accepted
accounting principles applicable in the UK ("UK GAAP"), which differ in certain
significant respects from those applicable in the US ("US GAAP"). These
differences relate principally to the following items and the necessary
adjustments are shown in the tables which follow.
F-74
<PAGE>
NOTES ON THE ACCOUNTS
(Continued)
(a) Interest capitalisation
Under UK GAAP, the capitalisation of interest is optional and the Company
has not capitalized any interest on major capital construction projects.
Under US GAAP, interest incurred as part of the cost of acquiring all fixed
assets which become assets in course of construction is capitalized and
amortized over the life of the asset, following its commissioning.
(b) Revaluation of properties
Under UK GAAP, properties may be re-stated on the basis of appraised values
in financial statements prepared in all other respects in accordance with
the historical cost convention. Such re-statements are not generally
permitted under US GAAP, except in connection with purchase accounting, and
accordingly adjustments to net income and Shareholders' equity are required
to eliminate the above re-statements.
(c) Pension Costs
Under UK GAAP, the costs of providing pension benefits may be calculated by
the use of any recognized actuarial method which is appropriate and whose
assumptions reflect the long term nature of the assets and liabilities
involved.
Under US GAAP (SFAS 87), the Group's employees are considered to have
participated in a multi-employer pension plan. For multi-employer plans
employers are required to recognise as net pension expense total
contributions for the period.
(d) Ordinary Dividends
Under UK GAAP, final ordinary dividends are provided in the financial
statements on the basis of the recommendation by the Directors which
requires subsequent approval by the Shareholders to become a legal
obligation of the Company.
Under US GAAP, dividends are only provided when the legal obligation to pay
arises.
(e) Deferred Taxation
Under UK GAAP, no provision is made for deferred taxation if there is
reasonable evidence that such deferred taxation will not be payable in the
foreseeable future.
Under US GAAP, deferred taxation is provided in full on the liability
method in accordance with the provisions of SFAS 109 "Accounting for Income
Taxes".
(f) Cash Flows
Under UK GAAP the Group complies with the Financial Reporting Standard No.
1 "Cash Flow Statements" (FRS 1), the objective and principles of which are
similar to those set out in SFAS 95 "Statement of Cash Flows" (SFAS 95).
The principle difference between the two standards is in respect of
classification. Under FRS 1, the Group presents its cashflows for (a)
operating activities; (b) returns on investments and servicing of finance;
(c) taxation; (d) investing activities;
F-75
<PAGE>
NOTES ON THE ACCOUNTS
(Continued)
and (e) financing activities. SFAS 95 requires only three categories of
cash flow activity (a) operating; (b) investing; and (c) financing.
Cash flows arising from taxation and returns on investments and servicing
of finance under FRS 1 would, with the exception of dividends paid, be
included as operating activities under SFAS 95; dividend payments would be
included as a financing activity under SFAS 95. In addition, under FRS 1,
cash and cash equivalents include short term borrowings with original
maturities of less than 90 days. SFAS 95 requires movements on such short
term borrowings to be included in financing activities.
Approximate effects on net income of differences between UK
and US generally accepted accounting principles
<TABLE>
<CAPTION>
1995 1996
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Net Income (per UK GAAP) 37,198 33,440
US GAAP adjustments:
Interest Capitalisation
and related amortisation (595) (1,296)
Amortisation of revaluation
surplus and disposal loss reversal 1,130 -
Pension costs (138) 116
Deferred Taxation: on adjustments 242 390
methodology 1,556 1,044
------ ------
Net income as adjusted for US GAAP 39,393 33,694
====== ======
</TABLE>
Approximate cumulative effect on Shareholders' equity of differences
between UK and US generally accepted accounting principles
<TABLE>
<CAPTION>
1995 1996
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Shareholders' equity (per UK GAAP) 199,133 139,302
US GAAP adjustments:
Interest Capitalisation 8,248 6,349
Property Revaluations (6,149) -
Pension costs 9,323 9,192
Deferred Taxation: on adjustments (5,798) (5,129)
methodology (16,974) (14,373)
------- -------
Shareholders' equity as adjusted for US GAAP 187,783 135,341
======= =======
</TABLE>
There is no adjustment in the above reconciliations for the unrealised
gains and losses on hedged anticipated transactions as the amounts are not
material.
F-76
<PAGE>
NOTES ON THE ACCOUNTS
(Continued)
6. Creditors: Amounts Falling Due After More Than One Year
-------------------------------------------------------
<TABLE>
<CAPTION>
1995 1996
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Wholly repayable
within five years:
Loan from Cadbury Schweppes Public
Limited Company 24,000 24,000
Obligations under finance leases 12,372 9,782
Government grants 158 112
Not wholly repayable within five years:
Obligations under finance leases 5,804 3,920
------ ------
42,334 37,814
====== ======
</TABLE>
The loan from Cadbury Schweppes Public Limited Company is at 11.65% fixed
interest rate per annum for 10 years from 11 December 1989.
7. Cash Flow Statement
-------------------
<TABLE>
<CAPTION>
1995 1996
(Pounds)'000 (Pounds)'000
<S> <C> <C>
(a) Net cash inflow from operating
activities
Operating profit 55,379 52,715
Depreciation charges 14,241 15,717
Increase in stock (25,555) (18,219)
Increase in debtors (80,369) (67,658)
Increase in creditors 50,798 88,527
(Decrease)/increase in pension provision (138) 116
------ ------
Net cash inflow from
operating activities 14,356 71,198
====== ======
</TABLE>
F-77
<PAGE>
NOTES ON THE ACCOUNTS
(Continued)
(b) Cash and cash equivalents
<TABLE>
<CAPTION>
Cash and cash equivalents
-------------------------
Cash at
bank and in Short-term Bank
hand investment overdrafts Total
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C>
End of 1994 6,571 79,423 - 85,994
Net outflow 1st half 1995 (5,492) (70,336) (1,495) (77,323)
------- ------- ------ --------
June 1995 1,079 9,087 (1,495) 8,671
Net inflow 2nd half 1995 20,292 7,173 1,046 28,511
------- ------- ------ --------
End of 1995 21,371 16,260 (449) 37,182
Net outflow 1st half 1996 (20,273) (16,260) (2,003) (38,536)
------- ------- ------ --------
June 1996 1,098 - (2,452) (1,354)
======= ======= ====== ========
</TABLE>
Short-term investments are cash transferred to a group company on short-
term loan and included within debtors.
F-78
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA FINANCIAL INFORMATION REGARDING THE ACQUISITIONS OF:
SA BEVERAGE SALES HOLDING NV
COCA-COLA BEVERAGES SA
COCA-COLA PRODUCTION SA
AMALGAMATED BEVERAGES GREAT BRITAIN LIMITED
OUACHITA COCA-COLA BOTTLING COMPANY, INC.
COCA-COLA BOTTLING COMPANY WEST, INC.
GRAND FORKS COCA-COLA BOTTLING COMPANY
INDEX
-----
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Introductory Information................................... PF-1
Pro Forma Combined Condensed Statement of Operations
for the Six Months Ended June 28, 1996.................. PF-4
Pro Forma Combined Condensed Statements of Operations
for the Quarters Ended March 29, 1996 and June 28, 1996.. PF-6
Pro Forma Combined Condensed Statement of Operations
for the Year Ended December 31, 1995..................... PF-7
Pro Forma Combined Condensed Statements of Operations
for the Quarters Ended March 31, 1995, June 30, 1995,
September 29, 1995 and December 31, 1995................. PF-9
Pro Forma Combined Condensed Balance Sheet as of
June 28, 1996............................................ PF-10
Notes to Unaudited Pro Forma Combined Condensed Financial
Information.............................................. PF-11
</TABLE>
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA FINANCIAL INFORMATION
INTRODUCTORY INFORMATION
The following unaudited pro forma combined condensed financial information sets
forth the combined results of operations and financial position of Coca-Cola
Enterprises Inc. (the "Company") and (i) SA Beverage Sales Holding NV,
Coca-Cola Beverages SA ("CCSA"), and Coca-Cola Production SA ("CCP")
(collectively "France/Belgium"), (ii) Amalgamated Beverages Great Britain
Limited ("Great Britain"), (iii) Ouachita Coca-Cola Bottling Company, Inc.
("Ouachita"), and (iv) Coca-Cola Bottling Company West, Inc., and Grand Forks
Coca-Cola Bottling Company (collectively "Coke West") and assuming the Company
purchased the Acquired Companies (referring to all of the purchased companies,
collectively) based on the assumptions set forth in the following Notes to
Unaudited Pro Forma Combined Condensed Financial Statements. The unaudited pro
forma combined condensed financial statements do not include the impact from the
proposed acquisition of Nora Beverages Inc. ("Nora") announced on July 17, 1996
for approximately $117 million. The Company has recently begun due diligence
procedures to evaluate the assets and liabilities of Nora. There can be no
assurance that the proposed Nora acquisition will close. The Company has entered
into various letters of intent and purchase agreements related to the
aforementioned Acquired Companies and are summarized as follows.
Acquisitions
- ------------
On February 21, 1996, the Company acquired all the issued and outstanding shares
of stock of Ouachita for a total transaction value of approximately $313
million. The purchase price was paid in a combination of cash, shares of the
Company's common stock from treasury, and two types of convertible preferred
stock. The Company financed the cash portion of the acquisition through the
issuance of commercial paper. The acquisition was accounted for using the
purchase method of accounting. The Ouachita bottling operations are located in
portions of Arkansas, Louisiana, and Mississippi.
On July 26, 1996, the Company acquired from The Coca-Cola Company France/Belgium
bottling and canning operations for a transaction value of approximately $915
million. The Company financed this acquisition through the issuance of
commercial paper and has plans to refinance on a long-term basis. The
acquisition was accounted for using the purchase method of accounting. The
France/Belgium franchise territories include approximately 90% of the population
in France and all of the population in Belgium.
On August 12, 1996, the Company acquired Coke West for a transaction value of
approximately $158 million. The Company financed this acquisition through the
issuance of long-term debt. Coke West operates in franchise territories in
portions of Montana, Wyoming, North Dakota, South Dakota, and Minnesota. The
acquisition was accounted for using the purchase method of accounting.
PF-1
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA FINANCIAL INFORMATION
INTRODUCTORY INFORMATION -- (CONTINUED)
Pending Acquisition
- -------------------
On June 4, 1996, the Company announced the signing of letters of intent to
purchase the Great Britain bottler from The Coca-Cola Company and Cadbury
Schweppes plc for a total transaction value of approximately $1.9 billion. The
Company expects to finance this acquisition through issuance of long-term debt.
A wholly owned subsidiary of Great Britain produces products of The Coca-Cola
Company and Cadbury Schweppes for distribution in England, Scotland, Wales, and
the Isle of Man. Definitive agreements have been signed and this proposed
transaction is expected to close during the third quarter of 1996. There can be
no assurance this acquisition will close.
The following unaudited pro forma financial information should be read in
conjunction with the Company's audited and unaudited financial statements,
including the notes thereto, contained in: (i) the Coca-Cola Enterprises Annual
Report on Form 10-K for the year ended December 31, 1995 and (ii) Coca-Cola
Enterprises' Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 1995, June 30, 1995, September 29, 1995, March 29, 1996, and June 28,
1996.
The unaudited pro forma combined condensed statement of operations for the six
months ended June 28, 1996 and for the year ended December 31, 1995 and each of
the quarterly periods ended March 31, 1995, June 30, 1995, September 29, 1995,
December 31, 1995, March 29, 1996, and June 28, 1996 present the combined
operating results of the Company and the Acquired Companies, as if the completed
and pending acquisitions described above had occurred on January 1, 1995. The
unaudited pro forma combined condensed balance sheet as of June 28, 1996
includes the unaudited historical balance sheet of France\Belgium and Coke West
as of June 30, 1996 and Great Britain presented as of June 15, 1996. The
unaudited pro forma combined condensed balance sheet as of June 28, 1996
presents the combined financial position of the Company and the Acquired
Companies as if the completed and pending acquisitions described above had
occurred on June 28, 1996. There can be no assurance that the pending
acquisition will close. These pro forma financial statements reflect use of the
purchase method of accounting and are based on the historical financial
information of the Company and the Acquired Companies adjusted for the pro forma
adjustments described in the attached pro forma footnotes. Certain
reclassifications and adjustments have been made to the historical financial
statements of the Acquired Companies to conform to the Company's financial
presentation and interim reporting dates.
PF-2
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA FINANCIAL INFORMATION
INTRODUCTORY INFORMATION -- (CONTINUED)
The pro forma adjustments are based on preliminary estimates of the fair value
of assets and liabilities of the Acquired Companies, which may require further
adjustment when additional information is obtained as of the acquisition date
and during the one year period subsequent to acquisition. Any reallocation of
the purchase price based on final valuations of assets and liabilities should
not differ significantly from the original estimates and should not have a
material impact on the pro forma financial statements.
The pro forma financial information is presented for illustrative purposes only
and is not necessarily indicative of the operating results that would have
occurred if the acquisitions had been consummated in accordance with the
assumptions set forth below, nor is it necessarily indicative of future
operating results or financial position.
PF-3
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 28, 1996
(UNAUDITED; IN MILLIONS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
COCA-COLA FRANCE/ GREAT
ENTERPRISES BELGIUM BRITAIN OUACHITA COKE WEST PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) (HISTORICAL) (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
NET OPERATING REVENUES............. $3,616 $723 $718 $20 $54 $ (51) $5,080
Cost of sales...................... 2,223 495 467 12 34 (45) 3,186
------ ---- ---- --- --- ----- ------
GROSS PROFIT....................... 1,393 228 251 8 20 (6) 1,894
Selling, general & administrative
expenses.......................... 1,117 180 160 14 17 36 1,524
------ ---- ---- --- --- ----- ------
OPERATING INCOME................... 276 48 91 (6) 3 (42) 370
Interest expense, net.............. 163 5 6 1 6 106 287
Other (income) deductions, net..... - 1 - (7) - - (6)
------ ---- ---- --- --- ----- ------
INCOME (LOSS) BEFORE INCOME TAXES.. 113 42 85 - (3) (148) 89
Income tax expense (benefit)....... 47 2 27 - - (43) 33
------ ---- ---- --- --- ----- ------
NET INCOME (LOSS).................. 66 40 58 - (3) (105) 56
Preferred stock dividends.......... 4 - - - - 1 5
------ ---- ---- --- --- ----- ------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHARE OWNERS.............. $ 62 $ 40 $ 58 $ - $(3) $(106) $ 51
====== ==== ==== === === ===== ======
AVERAGE COMMON SHARES OUTSTANDING.. 125 125
====== ======
NET INCOME (LOSS) PER COMMON SHARE. $ 0.50 $ 0.41
====== ======
OTHER OPERATING DATA:
Operating Income................. $ 276 $ 48 $ 91 $(6) $ 3 $ (42) $ 370
Depreciation..................... 176 28 27 1 2 - 234
Amortization..................... 107 4 - 1 2 39 153
------ ---- ---- --- --- ----- ------
OPERATING INCOME BEFORE DEPRECIATION
AND AMORTIZATION................. $ 559 $ 80 $118 $(4) $ 7 $ (3) $ 757
====== ==== ==== === === ===== ======
</TABLE>
The introductory information contained on page PF-1 and the accompanying Notes
to Unaudited Pro Forma Combined Condensed Financial Information are an integral
part of these statements. Pro forma combined information should not be construed
to be necessarily indicative of future operating results. The Pro Forma
Adjustments for each acquired company are detailed by company on the following
page.
PF-4
<PAGE>
COCA-COLA ENTERPRISES INC.
DETAIL OF PRO FORMA ADJUSTMENTS BY COMPANY
FOR THE SIX MONTHS ENDED JUNE 28, 1996
(UNAUDITED; IN MILLIONS)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
---------------------------------------------------------------------
FRANCE/ GREAT
BELGIUM BRITAIN OUACHITA COKE WEST TOTAL
-------- ------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET OPERATING REVENUES................... $(32) (D) $ - $ - $ -
(11) (E)
(8) (F) $ (51)
Cost of sales............................ (30) (D) - - -
(11) (E)
(4) (G) (45)
---- ---- ---- ----- ------
GROSS PROFIT............................. (6) - - - (6)
Selling, general & administrative
expenses............................... 4 (A) 33 (A) 1 (A) 1 (A) 36
(3) (H)
---- ---- ---- ----- -----
OPERATING INCOME......................... (7) (33) (1) (1) (42)
Interest expense, net.................... 30 (B) 76 (B) - - 106
Other (income) deductions, net........... - - - - -
---- ------ ----- ----- -----
INCOME (LOSS) BEFORE INCOME TAXES........ (37) (109) (1) (1) (148)
Income tax expense (benefit)............. (5) (C) (37) (C) (1) (C) - (43)
---- ------ ----- ----- -----
NET INCOME (LOSS)....................... (32) (72) - (1) (105)
Preferred stock dividends............... - - 1 (I) - 1
---- ------ ----- ----- -----
NET INCOME (LOSS) APPLICABLE TO
COMMON SHARE OWNERS................... $(32) $ (72) $ (1) $ (1) $(106)
==== ====== ===== ===== =====
OTHER OPERATING DATA:
Operating Income....................... $ (7) $ (33) $ (1) $ (1) $ (42)
Depreciation........................... - - - - -
Amortization........................... 4 33 1 1 39
---- ------ ----- ----- -----
Operating income before depreciation
and amortization....................... $ (3) $ - $ - $ - $ (3)
==== ====== ===== ===== =====
</TABLE>
The introductory information contained on page PF-1 and the accompanying Notes
to Unaudited Pro Forma Combined Condensed Financial Information are an integral
part of these statements.
PF-5
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 29, 1996 AND JUNE 28, 1996
(UNAUDITED; IN MILLIONS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
MARCH 29, JUNE 28,
1996 1996 TOTAL
---------- ------ -------
<S> <C> <C> <C>
NET OPERATING REVENUES...................... $2,201 $2,879 $5,080
Cost of sales............................... 1,373 1,813 3,186
------ ------ ------
GROSS PROFIT................................ 828 1,066 1,894
Selling, general & administrative expenses.. 738 786 1,524
------ ------ ------
OPERATING INCOME............................ 90 280 370
Interest expense, net....................... 141 146 287
Other (income) deductions, net............. (7) 1 (6)
------ ------ ------
INCOME (LOSS) BEFORE INCOME TAXES........... (44) 133 89
Income tax expense (benefit)................ (14) 47 33
------ ------ ------
NET INCOME (LOSS)........................... (30) 86 56
Preferred stock dividends................... 3 2 5
------ ------ ------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHARE OWNERS....................... $ (33) $ 84 $ 51
====== ====== ======
AVERAGE COMMON SHARES OUTSTANDING........... 126 123 125
====== ====== ======
NET INCOME (LOSS) PER COMMON SHARE.......... $(0.26) $ 0.68 $ 0.41
====== ====== ======
OTHER OPERATING DATA:
Operating Income.......................... $ 90 $ 280 $ 370
Depreciation.............................. 114 120 234
Amortization.............................. 74 79 153
------ ------ ------
OPERATING INCOME BEFORE DEPRECIATION
AND AMORTIZATION.......................... $ 278 $ 479 $ 757
====== ====== ======
</TABLE>
The introductory information contained on page PF-1 and the accompanying Notes
to Unaudited Pro Forma Combined Condensed Financial Information are an integral
part of these statements. Pro forma combined information should not be construed
to be necessarily indicative of future operating results.
PF-6
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED; IN MILLIONS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
COCA-COLA FRANCE/ GREAT
ENTERPRISES BELGIUM BRITAIN OUACHITA COKE WEST PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) (HISTORICAL) (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
NET OPERATING REVENUES............... $6,773 $1,467 $1,492 $172 $112 $(221) $9,795
Cost of sales........................ 4,267 1,026 972 104 69 (193) 6,245
------ ------ ------ ---- ---- ----- ------
GROSS PROFIT......................... 2,506 441 520 68 43 (28) 3,550
Selling, general & administrative
expenses............................ 2,038 369 330 48 32 71 2,888
------ ------ ------ ---- ---- ----- ------
OPERATING INCOME..................... 468 72 190 20 11 (99) 662
Interest expense, net................ 326 13 4 11 11 205 570
Other (income) deductions, net....... (3) 7 11 1 - - 16
------ ------ ------ ---- ---- ----- ------
INCOME (LOSS) BEFORE INCOME TAXES.... 145 52 175 8 - (304) 76
Income tax expense (benefit)......... 63 4 62 3 - (104) 28
------ ------ ------ ---- ---- ----- ------
NET INCOME (LOSS).................... 82 48 113 5 - (200) 48
Preferred stock dividends............ 2 - - - - 8 10
------ ------ ------ ---- ---- ----- ------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHARE OWNERS............. $ 80 $ 48 $ 113 $ 5 $ - $(208) $ 38
====== ====== ====== ==== ==== ===== ======
AVERAGE COMMON SHARES OUTSTANDING.... 129 129
====== ======
NET INCOME (LOSS) PER COMMON SHARE... $ 0.62 $ 0.29
====== ======
OTHER OPERATING DATA:
Operating Income................... $ 468 $ 72 $ 190 $ 20 $ 11 $ (99) $ 662
Depreciation....................... 318 49 49 6 4 - 426
Amortization....................... 211 9 - 7 2 82 311
------ ------ ------ ---- ---- ----- -----
OPERATING INCOME BEFORE DEPRECIATION
AND AMORTIZATION................... $ 997 $ 130 $ 239 $ 33 $ 17 $ (17) $1,399
====== ====== ====== ==== ==== ===== ======
</TABLE>
The introductory information contained on page PF-1 and the accompanying Notes
to Unaudited Pro Forma Combined Condensed Financial Information are an integral
part of these statements. Pro forma combined information should not be construed
to be necessarily indicative of future operating results. The Pro Forma
Adjustments for each acquired company are detailed by company on the following
page.
PF-7
<PAGE>
COCA-COLA ENTERPRISES INC.
DETAIL OF PRO FORMA ADJUSTMENTS BY COMPANY
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED; IN MILLIONS)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
---------------------------------------------------------------------
FRANCE/ GREAT
BELGIUM BRITAIN OUACHITA COKE WEST TOTAL
-------- -------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET OPERATING REVENUES.................. $ (56) (D) $ - $ - $ -
(124) (E)
(41) (F) $ (221)
Cost of sales........................... (55) (D) - - -
(108) (E)
(30) (G) (193)
------ ------- ------- ------- -------
GROSS PROFIT............................ (28) - - - (28)
Selling, general & administrative
expenses.............................. 9 (A) 65 (A) 6 (A) 2 (A) 71
(11) (H)
------ ------- ------- ------- -------
OPERATING INCOME........................ (26) (65) (6) (2) (99)
Interest expense, net................... 53 (B) 152 (B) (1) (B) 1 (B) 205
Other (income) deductions, net.......... - - - - -
------ ------- ------- ------- -------
INCOME (LOSS) BEFORE INCOME TAXES....... (79) (217) (5) (3) (304)
Income tax expense (benefit)............ (23) (C) (78) (C) (2) (C) (1) (C) (104)
------ ------- ------- ------- -------
NET INCOME (LOSS)....................... (56) (139) (3) (2) (200)
Preferred stock dividends............... - - 8 (I) - 8
------ ------- ------- ------- -------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHARE OWNERS................... $ (56) $ (139) $ (11) $ (2) $ (208)
====== ======= ======= ======= =======
OTHER OPERATING DATA:
Operating Income...................... $ (26) $ (65) $ (6) $ (2) $ (99)
Depreciation.......................... - - - -
Amortization.......................... 9 65 6 2 82
------ ------- ------- ------- -------
Operating Income Before Depreciation
and Amortization..................... $ (17) $ - $ - $ - $ (17)
====== ======= ======= ======= =======
</TABLE>
The introductory information contained on page PF-1 and the accompanying Notes
to Unaudited Pro Forma Combined Condensed Financial Information are an integral
part of these statements.
PF-8
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 31, 1995, JUNE 30, 1995, SEPTEMBER 29, 1995 AND
DECEMBER 31, 1995
(UNAUDITED; IN MILLIONS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31, JUNE 30, SEPTEMBER 29, DECEMBER 31, FULL YEAR
1995 1995 1995 1995 1995
---------- ------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
NET OPERATING REVENUES...................... $2,040 $2,671 $2,748 $2,336 $9,795
Cost of sales............................... 1,277 1,702 1,778 1,488 6,245
------ ------ ------ ------ ------
GROSS PROFIT................................ 763 969 970 848 3,550
Selling, general & administrative expenses.. 668 714 751 755 2,888
------ ------ ------ ------ ------
OPERATING INCOME............................ 95 255 219 93 662
Interest expense, net....................... 140 144 144 142 570
Other (income) deductions, net............. (10) 3 1 22 16
------ ------ ------ ------ ------
INCOME (LOSS) BEFORE INCOME TAXES........... (35) 108 74 (71) 76
Income tax expense (benefit)................ (13) 41 28 (28) 28
------ ------ ------ ------ ------
NET INCOME (LOSS)........................... (22) 67 46 (43) 48
Preferred stock dividends................... 3 2 3 2 10
------ ------ ------ ------ ------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHARE OWNERS...................... $ (25) $ 65 $ 43 $ (45) $ 38
====== ====== ====== ====== ======
AVERAGE COMMON SHARES OUTSTANDING........... 129 130 129 129 129
====== ====== ====== ====== ======
NET INCOME (LOSS) PER COMMON SHARE.......... $(0.19) $ 0.50 $ 0.33 $(0.35) $ 0.29
====== ====== ====== ====== ======
OTHER OPERATING DATA:
Operating Income.......................... $ 95 $ 255 $ 219 $ 93 $ 662
Depreciation.............................. 102 106 108 110 426
Amortization.............................. 70 72 72 97 311
------ ------ ------ ------ ------
OPERATING INCOME BEFORE DEPRECIATION
AND AMORTIZATION.......................... $ 267 $ 433 $ 399 $ 300 $1,399
====== ===== ====== ====== ======
</TABLE>
The introductory information contained on page PF-1 and the accompanying Notes
to Unaudited Pro Forma Combined Condensed Financial Information are an integral
part of these statements. Pro forma combined information should not be construed
to be necessarily indicative of future operating results.
PF-9
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
JUNE 28, 1996
(UNAUDITED; IN MILLIONS)
<TABLE>
<CAPTION>
COCA-COLA FRANCE/ GREAT
ENTERPRISES BELGIUM BRITAIN COKE WEST PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
------------ ------------ ------------ ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents.................... $ 24 $ 93 $ 2 $ 7 $ - $ 126
Trade accounts receivable, net............... 606 195 286 11 - 1,098
Inventories.................................. 306 107 79 8 (6) (L) 494
Prepaid expenses and other assets............ 249 113 - 1 - 363
------ ------ ---- ------ ------ -------
Total Current Assets....................... 1,185 508 367 27 (6) 2,081
PROPERTY, PLANT AND EQUIPMENT, NET............ 2,353 445 323 27 (3) (L) 3,145
FRANCHISE AND OTHER NONCURRENT ASSETS......... 6,318 324 - 59 3,118 (L) 9,819
------ ------ ---- ------ ------ -------
$9,856 $1,277 $690 $ 113 $3,109 $15,045
====== ====== ==== ====== ====== =======
LIABILITIES AND
SHARE-OWNERS' EQUITY
CURRENT
Accounts payable and accrued expenses........ $1,015 $ 373 $380 $ 11 $ 2 (L) $ 1,781
Notes payable and current maturities of
long-term debt.............................. 144 2 - 1 (1) (K) 146
------ ------ ---- ------ ------ -------
Total Current Liabilities.................. 1,159 375 380 12 1 1,927
LONG-TERM DEBT................................ 4,362 292 58 109 2,738 (K) 7,559
DEFERRED INCOME TAXES......................... 2,224 4 30 - 1,089 (L) 3,347
OTHER LONG-TERM OBLIGATIONS................... 643 12 13 1 75 (L) 744
SHARE-OWNERS' EQUITY
Preferred Stock.............................. 173 - - - - 173
Common Stock................................. 147 613 - - (613) (L) 147
Paid-in Capital.............................. 1,370 (67) - (1) 68 (L) 1,370
Reinvested earnings (deficit)................ 199 48 209 (8) (249) (L) 199
Cumulative effect of currency translations... 24 - - - - 24
Common stock in treasury..................... (445) - - - - (445)
------ ------ ---- ------ ------ -------
Total Share-Owners' Equity................. 1,468 594 209 (9) (794) 1,468
------ ------ ---- ------ ------ -------
$9,856 $1,277 $690 $ 113 $3,109 $15,045
====== ====== ==== ====== ====== =======
</TABLE>
The introductory information contained on page PF-1 and the accompanying Notes
to Unaudited Pro Forma Combined Condensed Financial Information are an integral
part of these statements.
PF-10
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION
The historical information for each company reflected in the accompanying Pro
Forma Combined Condensed Financial Statements have been determined using United
States generally accepted accounting principles.
The following notes describe the pro forma adjustments necessary to reflect the
effects of completed and pending acquisitions with an aggregate purchase price
totaling $3,292 million (France/Belgium - $915 million; Great Britain - $1,906
million; Ouachita and Coke West - $471 million) in cash and assumed debt. Actual
adjustments to account for the acquisitions under the purchase method are
dependent upon the final valuations of the various assets and liabilities of the
Acquired Companies. The Ouachita acquisition occurred in February 1996 and,
therefore, balance sheet accounts for Ouachita are included in the balance sheet
of the Company as of June 28, 1996.
NOTE A - Pro forma adjustments to "Selling, general & administrative expenses"
reflect amortization of the assigned value of the rights of the Acquired
Companies to market, produce and distribute beverage products in their franchise
territories principally over 40 years, net of amortization previously recorded.
NOTE B - The pro forma adjustments to "Interest expense, net" reflect additional
interest costs on debt issued to fund the cash portion of the purchase price
and to repay assumed debt contemplating the long-term fixed rate financing of
the transactions. The acquisitions will be financed principally through the
issuance of long-term notes supplemented with limited short-term borrowings.
Interest rates assumed applicable to contemplated financings were 7.5% for long-
term notes (reflecting the Company's weighted average long-term borrowing rate
for 1995).
NOTE C - The pro forma adjustments to "Income tax expense (benefit)" reflect the
income tax attributes of the foregoing adjustments and the effect on the
consolidated tax provision after inclusion of the Acquired Companies. On a
quarterly basis, the pro forma adjustments reflect modifications to the
Company's estimated effective annual income tax rate for full year 1995 and 1996
giving effect to the results of operations of the Acquired Companies and the pro
forma adjustments.
NOTE D - This pro forma adjustment to "Net Operating Revenues" and "Cost of
sales" gives effect to the elimination of historical sales by France/Belgium to
the Company's Netherlands operations.
NOTE E - This pro forma adjustment to "Net Operating Revenues" and "Cost of
sales" gives effect to the elimination of historical product sales during 1995
by France/Belgium to the German Coca-Cola bottler owned by The Coca-Cola
Company. These sales were discontinued as a condition of the purchase
agreement. Sales to the German bottler by France/Belgium were discontinued as
of the beginning of 1996.
PF-11
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION -- (CONTINUED)
NOTE F - This pro forma adjustment to "Net operating revenues" gives effect to
the elimination of certain marketing support funding provided by The Coca-Cola
Company. As a condition of the purchase agreement, the marketing support
arrangement between France/Belgium and The Coca-Cola Company has reduced the
funding. Therefore, France/Belgium will no longer be receiving this marketing
support.
NOTE G - This pro forma adjustment to "Cost of sales" gives effect to the
elimination of intercompany centralized purchasing costs for certain products
and packaging materials purchased directly from a subsidiary of The Coca-Cola
Company by France/Belgium. As a condition of the purchase agreement,
France/Belgium will no longer be charged a mark-up on centralized purchasing
costs. The elimination of these centralized purchasing costs was implemented as
of the beginning of 1996.
NOTE H - This pro forma adjustment to "Selling, general & administrative
expenses" gives effect to the elimination of certain overhead and administrative
expense allocations charged to France/Belgium by the corporate regional offices
of The Coca-Cola Company. As a condition of the acquisition, these costs will
no longer be incurred by France/Belgium.
NOTE I - In connection with the acquisition of Ouachita in February, 1996, the
Company authorized 1,110,000 shares and issued 923,413 shares of voting
convertible preferred stock, Ouachita Series A ("Series A") and authorized
350,000 shares and issued 95,880 shares of voting convertible preferred stock,
Ouachita Series B ("Series B"). Series A pays quarterly cumulative dividends of
4% per year and Series B pays no dividend. Dividends are provided at a market-
related rate for both Series A and Series B to reflect the actual cost of the
preferred stock.
NOTE J - Pro forma fully diluted net income (loss) per common share data are not
presented because there are no material differences between such amounts and the
pro forma net income (loss) per share presented. All per share data is
calculated prior to rounding to millions.
NOTE K - The pro forma adjustments to reflect the increase in outstanding
indebtedness as a result of (i) acquisitions of the Acquired Companies by the
Company; (ii) a net decrease in net assets acquired between June 28, 1996 and
the date of acquisition; and (iii) the repayment of assumed debt at the
acquisition dates was calculated as follows:
<TABLE>
<S> <C>
Purchase price of the Acquired Companies (excluding Ouachita):
Amount payable in cash.................................. $2,309
Long-term debt assumed from sellers..................... 670
------
2,979
Increase in debt between June 28, 1996 and the
date of acquisition................................... 242
------
2,737
Repayment of notes payable and current maturities
of long-term debt..................................... 1
------
Net increase in long-term debt less current maturities.. $2,738
======
</TABLE>
PF-12
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION -- (CONTINUED)
NOTE L - The purchase method of accounting for acquisitions requires that the
assets and liabilities of the Acquired Companies be adjusted to their estimated
fair values. The following are the pro forma adjustments which reflect
management's best estimate of the fair values of the assets and liabilities of
the Acquired Companies as of June 28, 1996 using information currently
available.
Net Assets
------------------
Increase (Decrease)
Amounts as reported by the Acquired Companies
(excluding Ouachita).......................... $ 794
Fair value adjustments:
Current assets................................ (6)
Property, plant and equipment, net............ (3)
Franchise and other noncurrent assets......... 3,118
Current liabilities........................... (2)
Deferred income taxes......................... (1,089)
Other long-term obligations................... (75)
------
$2,737
======
PF-13
<PAGE>
EXHIBIT NO. 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated June 21, 1996 with respect to the
combined financial statements of SA Beverage Sales Holding NV and subsidiaries,
Coca-Cola Beverages SA and subsidiaries, and Coca-Cola Production SA for the
three-year period ended December 31, 1995, included in this report on Form 8-K
of Coca-Cola Enterprises Inc. and incorporated by reference in the Registration
Statements of Coca-Cola Enterprises Inc. listed below:
. 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 Reviseurs d'Entreprises SCC
Brussels, Belgium
December 17, 1996
<PAGE>
EXHIBIT NO. 23.2
CONSENT OF INDEPENDENT AUDITORS
As independent public accountants, we hereby consent to the incorporation by
reference in the Registration Statements of Coca-Cola Enterprises Inc. listed
below of our report dated March 1, 1996, with respect to the consolidated
financial statements of Amalgamated Beverages Great Britain Limited included in
this Form 8-K.
. 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/ ARTHUR ANDERSEN
London, England
December 18, 1996
