<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: February 10, 1997
(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 Business Acquired:
Amalgamated Beverages Great Britain Limited Annual Report and
Accounts - for the 52 weeks ended December 28, 1996, December 30,
1995 and December 31, 1994:
Report of the Independent Chartered Accountants and
Registered Auditors
Group Profit and Loss Account
Group Statement of Total Recognised Gains and Losses and
Reconciliation of Movements in Shareholders' Funds
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 year ended December 31, 1996 (unaudited):
Introductory Information
Pro Forma Combined Condensed Statement of Income for the
Year Ended December 31, 1996
Pro Forma Combined Condensed Statements of Operations for the
Quarters Ended March 29, 1996, June 28, 1996,
September 27, 1996, and December 31, 1996
Pro Forma Combined Condensed Balance Sheet as of December 31,
1996
Notes to Unaudited Pro Forma Combined Condensed Financial
Information
(c) Exhibits:
EXHIBIT NO. 23.1 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: March 5, 1997
<PAGE>
EXHIBIT NO. 23.1
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 February, 1997, 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. 33-48482 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
. Registration Statement No. 333-18569 on Form S-3 dated December 23, 1996 and
related Prospectus
/s/ ARTHUR ANDERSEN
London, England
March 4, 1997
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
Financial Statements Numbers
-------------------- -------
Amalgamated Beverages Great Britain Limited Annual Report and
Accounts - for the 52 weeks ended December 28, 1996,
December 30, 1995 and December 31, 1994:
Report of the Independent Chartered Accountants and
Registered Auditors F-2
Group Profit and Loss Account F-3
Group Statement of Total Recognised Gains and Losses and
Reconciliation of Movements in Shareholders' Funds F-4
Group Balance Sheet F-5
Group Cash Flow Statement F-6
Notes on the Accounts F-7 - F-23
Coca-Cola Enterprises Inc. Pro Forma Combined Condensed Financial
Information - for the year ended December 31, 1996
(unaudited):
Introductory Information PF-1
Pro Forma Combined Condensed Statement of Income for
the Year Ended December 31, 1996 PF-4
Pro Forma Combined Condensed Statements of Operations
for the Quarters Ended March 29, 1996, June 28,
1996, September 27, 1996, and December 31, 1996 PF-6
Pro Forma Combined Condensed Balance Sheet as of
December 31, 1996 PF-7
Notes to Unaudited Pro Forma Combined Condensed Financial
Information PF-8
<PAGE>
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ANNUAL ACCOUNTS 1996
CONTENTS
PAGES
Report of the Independent Chartered Accountants
and Registered Auditors F-2
Group Profit and Loss Account F-3
Group Statement of Total Recognised Gains and Losses and
Reconciliation of Movements in Shareholders' Funds F-4
Group Balance Sheet F-5
Group Cash Flow Statement F-6
Notes on the Accounts F-7 - F-23
F-1
<PAGE>
[LOGO OF ABGB APPEARS HERE]
REPORT OF THE INDEPENDENT CHARTERED ACCOUNTANTS
AND REGISTERED AUDITORS
TO THE MEMBERS 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 UK 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 28, 1996 and December 30, 1995
and the consolidated results of their operations and their cash flows for each
of the years in the 3 year period ended December 28, 1996 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
February 4, 1997
F-2
<PAGE>
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GROUP PROFIT AND LOSS ACCOUNT
FOR THE 52 WEEKS ENDED DECEMBER 28 1996 (NOTE 2)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
1996 1995 1994
Notes (Pounds)'000 (Pounds)'000 (Pounds)'000
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TURNOVER 4 931,005 904,139 802,615
Cost of sales - ordinary business (617,461) (611,635) (515,214)
- property revaluation - (6,490) -
------- ------- -------
GROSS PROFIT 313,544 286,014 287,401
Net operating expenses 6 (189,697) (173,390) (157,964)
------- ------- -------
Operating Profit 7 123,847 112,624 129,437
Profit/(loss) on sale of tangible fixed assets 153 (344) 143
------- ------- -------
PROFIT ON ORDINARY ACTIVITIES
BEFORE INTEREST 124,000 112,280 129,580
Net interest 8 (6,244) (1,142) 241
------- ------- -------
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 117,756 111,138 129,821
Tax on profit on ordinary activities 9 (43,073) (42,938) (43,221)
------- ------- -------
PROFIT FOR THE FINANCIAL YEAR 74,683 68,200 86,600
Dividends paid and proposed on equity shares 10 (139,400) (118,200) (136,600)
------- ------- -------
Transfer from retained earnings for the year (64,717) (50,000) (50,000)
======= ======= =======
</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-3
<PAGE>
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GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
AND RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
FOR THE 52 WEEKS ENDED DECEMBER 28 1996 (NOTE 2)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
1996 1995 1994
(Pounds)'000 (Pounds)'000 (Pounds)'000
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Profit and total recognised gains and losses for the financial year 74,683 68,200 86,600
======= ======= =======
RECONCILIATION OF MOVEMENTS IN
SHAREHOLDERS' FUNDS
Total recognised gains and losses as above 74,683 68,200 86,600
Property revaluation - (6,073) -
Dividends to ordinary shareholders (139,400) (118,200) (136,600)
------- ------- -------
Net decrease in shareholders' funds (64,717) (56,073) (50,000)
Opening shareholders' funds 105,862 161,935 211,935
------- ------- -------
Closing shareholders' funds 41,145 105,862 161,935
======= ======= =======
NOTE OF HISTORICAL COST PROFITS AND LOSSES
Profit on ordinary activities before taxation 117,756 111,138 129,821
Realisation of property revaluation surpluses - 1,058 799
Adjustment of depreciation to historical cost basis (127) 148 176
Property revaluation - 6,490 -
------- ------- -------
Historical cost profit on ordinary activities before taxation 117,629 118,834 130,796
======= ======= =======
Historical cost profit attributable to ordinary shareholders 74,556 75,896 87,575
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
[LOGO OF ABGB APPEARS HERE]
GROUP BALANCE SHEET
AS AT DECEMBER 28 1996 (NOTE 2)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
1996 1995
Notes (Pounds)'000 (Pounds)'000
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FIXED ASSETS
Tangible assets 11 196,880 199,519
Investments 12 - -
------- -------
CURRENT ASSETS
Stocks 13 36,494 33,029
Debtors - due within one year 14 122,545 126,900
- due after one year 14 24,811 17,050
Cash at bank and in hand 42,531 21,371
------- -------
226,381 198,350
Creditors: Amounts falling due within one year 15 (361,580) (246,187)
------- -------
NET CURRENT LIABILITIES (135,199) (47,837)
------- -------
TOTAL ASSETS LESS CURRENT LIABILITIES 61,681 151,682
Creditors: Amounts falling due after more than one year 16 (10,470) (37,813)
Provisions for liabilities and charges 18 (10,066) (8,007)
------- -------
41,145 105,862
======= =======
EQUITY CAPITAL AND RESERVES
Called-up equity share capital 19 1 204
Other reserves 20 57,810 57,811
Merger reserve 20 (17,484) (17,484)
Profit and loss account 20 605 65,322
CALLED-UP NON-EQUITY SHARE CAPITAL 19 213 9
------- -------
TOTAL CAPITAL EMPLOYED 41,145 105,862
======= =======
</TABLE>
On behalf of the Board
Director: ................................. D.R. Williams
February 4, 1997
The accompanying notes are an integral part of this balance sheet.
F-5
<PAGE>
[LOGO OF ABGB APPEARS HERE]
GROUP CASH FLOW STATEMENT
FOR THE 52 WEEKS ENDED DECEMBER 28 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
1996 1995 1994
Notes (Pounds)'000 (Pounds)'000 (Pounds)'000
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net cash inflow from operating
activities 17 176,175 153,542 159,456
RETURNS ON INVESTMENTS AND SERVICING OF
FINANCE
Interest paid (6,952) (4,449) (4,000)
Interest received 358 3,235 4,298
------- ------- -------
(6,594) (1,214) 298
------- ------- -------
TAXATION (70,068) (37,253) (58,568)
CAPITAL EXPENDITURE
Purchase of tangible fixed assets (42,644) (24,100) (35,378)
Receipts from sale of tangible fixed
assets 1,266 2,488 2,889
------- ------- -------
(41,378) (21,612) (32,489)
------- ------- -------
EQUITY DIVIDENDS PAID (168,200) (136,600) (120,000)
------- ------- -------
NET CASH OUTFLOW BEFORE USE OF LIQUID
RESOURCES AND FINANCING (110,065) (43,137) (51,303)
MANAGEMENT OF LIQUID RESOURCES
Net disposals of short-term investments 10,640 63,163 55,092
FINANCING
Finance leases repaid (4,140) (5,675) (7,360)
Increase in interest free loan from
parent company 125,000 - -
------- ------- -------
Net cash inflow/(outflow) from financing 120,860 (5,675) (7,360)
------- ------- -------
INCREASE/(DECREASE) IN CASH 17 21,435 14,351 (3,571)
======= ======= =======
</TABLE>
The accompanying notes are an integral part of this statement.
F-6
<PAGE>
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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 December 31.
Periodically this results in a financial year of 53 weeks.
(c) Basis of consolidation
----------------------
The group accounts consolidate the accounts of Amalgamated Beverages Great
Britain Limited ("the Company") and its subsidiary undertakings (together
"the Group") 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) 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.
F-7
<PAGE>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
(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.
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.
F-8
<PAGE>
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NOTES ON THE ACCOUNTS
(CONTINUED)
(1) Liquid resources
----------------
The Group has adopted the provisions of Financial Reporting Standard No. 1
as revised in October 1996. In accordance with this revised standard,
liquid resources are defined as current asset investments which are readily
convertible into known amounts of cash without curtailing or disrupting the
business. Liquid resources represent cash transferred to a group company on
short term loan and are included within debtors.
2. GROUP ACCOUNTS
--------------
The profit and loss accounts cover the 52 weeks from December 31, 1995 to
December 28, 1996, the 52 weeks from January 1, 1995 to December 30, 1995
and the 52 weeks from January 2, 1994 to December 31, 1994 respectively.
The balance sheets for 1996 and 1995 have been drawn up at December 28,
1996 and December 30, 1995 respectively.
3. ULTIMATE PARENT COMPANY
-----------------------
The Company'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.
On August 9, 1996 Cadbury Schweppes Public Limited Company and Coca-Cola
Holdings (United Kingdom) Limited entered into a share purchase agreement
with a subsidiary of Coca-Cola Enterprises Inc. ("CCE") for the sale of
their shareholdings in the Company, subject to certain conditions. These
conditions included, inter alia, the Commission of the European Communities
adopting a decision declaring the disposal compatible with the common
market (the "Merger Clearance") and the Commission granting clearance in
respect of each licensing agreement to be entered into on completion of the
disposal between Cadbury Schweppes Public Limited Company and Coca-Cola &
Schweppes Beverages Limited ("CCSB"), (the Company's only trading
subsidiary undertaking), which set out the basis on which CCSB will
continue to bottle and distribute Cadbury Schweppes' brands in Great
Britain following the disposal (the "Licensing Agreements Clearance").
Following a second phase investigation into the disposal by the Commission,
the Merger Clearance was received by CCE on January 22, 1997.
Completion of the disposal will occur once the Licensing Agreements
Clearance is received from the Commission.
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.
F-9
<PAGE>
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NOTES ON THE ACCOUNTS
(CONTINUED)
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 tables set out on pages 10 and 11.
(a) Interest capitalisation
-----------------------
Under UK GAAP, the capitalisation of interest is optional and the Group has
not capitalised 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 capitalised and
amortised 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 pensions benefits may be calculated
by the use of any recognised 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 total contributions for the period as a
net pension expense.
(d) Ordinary dividends
------------------
Under UK GAAP, 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.
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-10
<PAGE>
<TABLE>
<CAPTION>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
5. SUMMARY OF DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED ACCOUNTING
----------------------------------------------------------------------
PRINCIPLES (CONTINUED)
---------- -----------
(f) Cash flows
----------
Under UK GAAP, the Group complies with the Financial Reporting Standard
No. 1 "Cash Flow Statements" (FRS 1), as revised in October 1996, the
objective and principles of which are similar to those set out in
SFAS 95 "Statement of Cash Flows" (SFAS 95). The principal difference
between the two standards is in respect of classification. Under FRS 1,
the Group presents its cashflows for (a) operating activities; (b) return
on investments and servicing of finance; (c) taxation; (d) capital expenditure;
(e) equity dividends paid; (f) management of liquid resources; and (g) financing.
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,
management of liquid resources includes 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
1996 1995 1994
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
NET INCOME (PER UK GAAP) 74,683 68,200 86,600
US GAAP ADJUSTMENTS :
Interest capitalised 431 518 432
Amortisation of interest capitalised (1,770) (1,716) (1,675)
Amortisation of revaluation
surplus and disposal loss reversal - 1,206 975
Pension costs (76) (385) 821
Deferred taxation: on adjustments 467 522 139
methodology 4,170 3,113 1,297
------ ------ ------
NET INCOME AS ADJUSTED FOR US GAAP 77,905 71,458 88,589
====== ====== ======
</TABLE>
F-11
<PAGE>
<TABLE>
<CAPTION>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
5. SUMMARY OF DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED ACCOUNTING
----------------------------------------------------------------------
PRINCIPLES (CONTINUED)
----------------------
APPROXIMATE CUMULATIVE EFFECT ON SHAREHOLDERS' EQUITY OF DIFFERENCES
BETWEEN UK AND US GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
1996 1995
(Pounds)'000 (Pounds)'000
<S> <C> <C>
SHAREHOLDERS' EQUITY (PER UK GAAP) 41,145 105,862
US GAAP ADJUSTMENTS :
Interest capitalised 21,320 20,889
Amortisation of interest capitalised (15,014) (13,244)
Pension costs 9,000 9,076
Dividends 39,400 68,200
Deferred taxation: on adjustments (5,051) (5,518)
methodology (11,247) (15,417)
------ -------
SHAREHOLDERS' EQUITY ADJUSTED AS FOR US GAAP 79,553 169,848
====== =======
6. NET OPERATING EXPENSES
----------------------
1996 1995 1994
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
Distribution costs, including marketing 158,627 141,862 124,100
Administration expenses 31,070 31,528 33,864
------- ------- -------
189,697 173,390 157,964
======= ======= =======
7. OPERATING PROFIT
----------------
1996 1995 1994
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
Operating profit is stated after charging:
Depreciation on owned assets including container usage 27,891 24,426 23,972
Depreciation on leased assets under finance leases 7,805 8,854 9,752
Operating lease rentals
- plant and machinery 7,066 5,883 7,406
- properties 4,027 3,751 3,769
Auditors' remuneration - audit services 143 106 102
- non-audit services 10 13 20
and after crediting:
Amortisation of government grants (47) (48) (114)
====== ====== ======
</TABLE>
F-12
<PAGE>
<TABLE>
<CAPTION>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
8. NET INTEREST
------------
1996 1995 1994
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
Finance leases 1,431 1,435 1,106
Bank overdrafts and other short term borrowings 68 83 163
Inter-company interest paid 5,059 2,859 2,788
----- ----- -----
Interest payable 6,558 4,377 4,057
----- ----- -----
Less:
Interest on short-term loans and deposits (16) (37) (274)
Inter-company interest received (298) (3,198) (4,024)
----- ----- -----
Interest receivable (314) (3,235) (4,298)
----- ----- -----
Net interest 6,244 1,142 (241)
===== ===== =====
9. TAX ON PROFIT ON ORDINARY ACTIVITIES
------------------------------------
1996 1995 1994
(Pounds)'000 (Pounds)'000 (Pounds)'000
Corporation tax at 33% 39,704 39,926 43,369
Deferred taxation (note 18) 2,674 2,455 (724)
------ ------ ------
Charge for the year 42,378 42,381 42,645
(Over)/underprovision in previous years:
Corporation tax (406) (41) (477)
Deferred taxation (note 18) 1,101 598 1,053
------ ------ ------
43,073 42,938 43,221
====== ====== ======
Corporation tax payable is provided on taxable profits at the current rate
as noted above. The charge of (Pounds)43.1m (1995 (Pounds)42.9m; 1994
(Pounds)43.2m) was increased by (Pounds)0.3m (1995 (Pounds)0.3m; 1994
(Pounds)1.2m) because timing differences, which reversed during the year,
had not been previously provided for.
F-13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
10. DIVIDENDS PAID AND PROPOSED ON EQUITY AND NON-EQUITY SHARES
-----------------------------------------------------------
1996 1995 1994
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
Equity shares:
First interim paid (Pounds)960.78 (1995 (Pounds)245.00;
1994 (Pounds)245.00) per (Pounds)1 ordinary share 100,000 50,000 50,000
Second interim proposed (Pounds)378.55 (1995
(Pounds)Nil; 1994 (Pounds)Nil) per US$0.01 ordinary
share 39,400 - -
Final proposed (Pounds)Nil (1995 (Pounds)334.18; 1994
(Pounds)424.34) per (Pounds)1 ordinary share - 68,200 86,600
------- ------- -------
139,400 118,200 136,600
======= ======= =======
Coca-Cola Holdings (U.K.) Limited have waived their right to receive the
first and second interim dividends for 1996.
Non-equity shares:
The holders of the preference shares have waived their right to receive
dividends for 1996, 1995 and 1994.
11. TANGIBLE FIXED ASSETS
---------------------
Land and Plant and In course of
buildings equipment construction Total
(a) Movement during the year (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C>
Cost or valuation
-----------------
At beginning of year 72,478 272,149 14,172 358,799
Additions - 15,307 18,863 34,170
Transfer on completion 1,216 28,827 (30,043) -
Disposals - (7,006) - (7,006)
Transfers to other group
undertakings (467) (8) - (475)
------ ------- ------ -------
At end of year 73,227 309,269 2,992 385,488
------ ------- ------ -------
Depreciation
------------
At beginning of year (1,060) (158,220) - (159,280)
Depreciation for year (1,288) (34,408) - (35,696)
Disposals - 6,359 - 6,359
Transfers to other group
undertakings 4 5 - 9
------ ------- ------ -------
At end of year (2,344) (186,264) - (188,608)
------ ------- ------ -------
</TABLE>
F-14
<PAGE>
<TABLE>
<CAPTION>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
11. TANGIBLE FIXED ASSETS (CONTINUED)
---------------------------------
Land and Plant and In course of
buildings equipment construction Total
Net book value (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C>
At end of year 70,883 123,005 2,992 196,880
====== ======= ====== =======
At beginning of year 71,418 113,929 14,172 199,519
====== ======= ====== =======
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)8.1m (1995 (Pounds)8.8m) which
have been stated at deposit rate as charged to customers. Their value at
most recent purchase price would be (Pounds)15.7m (1995 (Pounds)15.1m).
1996 1995
(b) Finance leases (Pounds)'000 (Pounds)'000
<S> <C> <C>
Included in tangible fixed assets are :
Plant and equipment under finance leases 84,589 85,451
Less : accumulated depreciation (68,028) (61,044)
------ ------
16,561 24,407
====== ======
(c) Land and buildings
Freehold 68,792 69,172
Short leasehold 2,091 2,246
------ ------
Net book value 70,883 71,418
====== ======
Analysis of gross value
Professionally valued - Existing use 64,315 64,782
- Alternative use 4,175 4,175
At cost 4,737 3,521
------ ------
73,227 72,478
====== ======
The properties were professionally revalued in 1995.
If the revalued assets were stated on a historical basis, the amounts
would be as follows :
Land and buildings at cost 82,949 83,345
Accumulated depreciation thereon (9,610) (8,466)
------ ------
73,339 74,879
====== ======
Depreciation charge for the year 1,199 840
====== ======
</TABLE>
F-15
<PAGE>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
12. INVESTMENTS
-----------
The Company holds 100% of the equity and loan capital of the following
companies, all incorporated and operating in Great Britain.
Direct and only trading subsidiary undertaking:
Coca-Cola & Schweppes Beverages Limited
Indirect, dormant subsidiary undertakings:
Frontier Refreshment Services Limited
Vendleader Limited.
13. STOCKS
------
<TABLE>
<CAPTION>
1996 1995
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Raw materials and consumables 10,558 11,513
Finished goods and goods for resale 20,469 16,760
Consumable stores and other stocks 5,467 4,756
------ ------
36,494 33,029
====== ======
</TABLE>
The replacement cost of the stocks is not materially different from the
balance sheet value.
14. DEBTORS
-------
<TABLE>
<CAPTION>
1996 1995
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Receivable within one year:
Trade debtors 90,662 81,037
Amounts owed by other group undertakings 15,463 18,852
Loans to employees 23 19
Other debtors 4,608 6,492
Prepayments and accrued income 11,789 10,450
Advance corporation tax recoverable - 10,050
------- -------
122,545 126,900
======= =======
(Pounds)'000 (Pounds)'000
Receivable after more than one year:
Advance corporation tax recoverable 24,811 17,050
------- -------
24,811 17,050
======= =======
</TABLE>
F-16
<PAGE>
<TABLE>
<CAPTION>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
----------------------------------------------
1996 1995
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Borrowings:
Bank overdraft (unsecured) 174 449
Current obligations under finance leases 3,216 4,060
Loans from Cadbury Schweppes Public Limited Company:
Interest free 127,462 2,462
Interest bearing 24,000 -
------- -------
154,852 6,971
------- -------
Other creditors:
Payments received on account including deposits on 5,411 5,336
returnable containers
Trade creditors 58,457 41,095
Amounts owed to other group undertakings 200 659
Current corporation tax 15,170 18,421
Advance corporation tax 9,850 29,550
VAT 29,226 20,286
Other taxes and social security costs 3,379 3,451
Other creditors 3,113 11,633
Accruals and deferred income 42,476 40,539
Government grants 46 46
Dividends payable to ordinary shareholders 39,400 68,200
------- -------
206,728 239,216
------- -------
361,580 246,187
======= =======
The interest bearing loan from Cadbury Schweppes Public Limited Company
is at 11.65% fixed interest rate per annum for 10 years from December 11,
1989 but will be repaid on completion of the proposed purchase of the
Company by Coca-Cola Enterprises Inc.
16. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
-------------------------------------------------------
1996 1995
(Pounds)'000 (Pounds)'000
Wholly repayable within five years:
Loan from Cadbury Schweppes Public Limited Company - 24,000
Obligations under finance leases 7,832 9,781
Government grants 65 112
Not wholly repayable within five years:
Obligations under finance leases 2,573 3,920
------ ------
10,470 37,813
====== ======
</TABLE>
F-17
<PAGE>
<TABLE>
<CAPTION>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
17. CASH FLOW STATEMENT
-------------------
1996 1995 1994
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
(a) Reconciliation of operating profit to net cash inflow from
operating activities
Operating profit 123,847 112,624 129,437
Depreciation charges 35,696 33,280 33,724
Property revaluation - 6,490 -
Increase in stocks (3,465) (8,439) (506)
Increase in debtors (7,911) (9,400) (6,369)
Increase in creditors 28,084 19,372 2,349
(Decrease)/increase in pension provision (76) (385) 821
------- ------- -------
Net cash inflow from operating activities 176,175 153,542 159,456
======= ======= =======
(b) Analysis of changes in net debt
Net inflow/ Net inflow/ Net inflow/
End of (outflow) in End of (outflow) in End of (outflow) in
1993 1994 1994 1995 1995 1996 1996
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C> <C> <C> <C>
Cash at bank and in
hand 10,142 (3,571) 6,571 14,800 21,371 21,160 42,531
Bank overdrafts - - - (449) (449) 275 (174)
------ ------ ------ ------ ------ ------- ------
10,142 (3,571) 6,571 14,351 20,922 21,435 42,357
Finance lease
obligations (30,796) 7,360 (23,436) 5,675 (17,761) 4,140 (13,621)
Interest free loan from
Cadbury Schweppes
Public Limited
Company (2,462) - (2,462) - (2,462) (125,000) (127,462)
------ ----- ------ ----- ------ ------- -------
Changes in net debt (23,116) 3,789 (19,327) 20,026 699 (99,425) (98,726)
====== ===== ====== ====== ====== ======= =======
F-18
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
18. PROVISIONS FOR LIABILITIES AND CHARGES
--------------------------------------
Deferred
Pensions taxation Total
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
At beginning of year 9,076 (1,069) 8,007
Expenditure in the year (478) - (478)
Profit and loss account - current year 402 2,674 3,076
- prior year - 1,101 1,101
Advance corporation tax recoverable - (1,640) (1,640)
----- ----- ------
At end of year 9,000 1,066 10,066
===== ===== ======
The total potential liability of the Group for deferred taxation was as
follows:
1996 1995
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Not provided in accounts
Accelerated capital allowances 10,686 14,532
Excess of lease rentals over depreciation and finance charges 561 885
Taxes that would arise if property were to be disposed of
at revalued amounts 1,317 1,317
------ ------
12,564 16,734
Provided in accounts:
Short-term timing differences 1,066 (1,069)
------ ------
13,630 15,665
====== ======
19. SHARE CAPITAL
-------------
On August 8, 1996 the authorised share capital of the Company was altered
and increased to (Pounds)1,104,082 and US$2,040.82 by the conversion of
204,082 ordinary shares of (Pounds)1 each into 204,082 deferred shares of
(Pounds)1 each and the creation of 204,082 ordinary shares of US$0.01
each.
On the same date the ordinary shares were allocated on a one for one
basis to the holders of the deferred shares and were issued as fully paid
by the appropriation and capitalisation of the sum of (Pounds)1,323
(US$2,040.82 converted at (Pounds)1:US$1.542) from the reserves of the
Company (note 20).
</TABLE>
F-19
<PAGE>
<TABLE>
<CAPTION>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
19. SHARE CAPITAL (CONTINUED)
-------------------------
1996 1995
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Authorised:
Equity - 204,082 ordinary shares of US$0.01 each 1 -
- 204,082 ordinary shares of (Pounds)1 each - 204
Non-equity - 204,082 deferred shares of (Pounds)1 each 204 -
- 900,000 5% non-cumulative preference shares of (Pounds)1 each 900 900
----- -----
1,105 1,104
===== =====
Allotted and called-up:
Equity - 204,082 ordinary shares of US$0.01 each, fully paid 1 -
- 204,082 ordinary shares of (Pounds)1 each, fully paid - 204
Non-equity - 204,082 deferred shares of (Pounds)1 each, fully paid 204 -
- 900,000 5% non-cumulative preference shares of (Pounds)1 each,
(Pounds)0.01 paid 9 9
----- -----
214 213
===== =====
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 on a
winding up, or other return of capital of the company, have priority over
the ordinary shares for the return of the amount paid up, but no further
share in the assets.
The deferred shares carry no rights to vote or receive dividends and on a
winding up the holders are entitled only to receive payment of the amount
paid up on that share after the repayment to each holder of an ordinary
share of a sum equal to the amount paid up on that share plus US$50,000.
20. RESERVES
--------
Other Merger Profit and
reserves reserve loss account
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
At beginning of year 57,811 (17,484) 65,322
Transfer from retained earnings for the year - - (64,717)
Conversion to share capital (1) - -
------ ------ ------
At end of year 57,810 (17,484) 605
====== ====== ======
F-20
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
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
-----------------------------------
Commitments for capital expenditure contracted for but not provided in
the accounts at the end of the year were (Pounds)1.279 million (1995
(Pounds)5.348 million).
23. LEASING COMMITMENTS
-------------------
The future minimum lease payments to which the Group is committed as at
December 28, 1996 under finance leases, fall due as follows:
1996 1995 1994
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
- Within one year 5,010 6,110 7,573
- In two to five years 12,456 15,426 19,059
- In more than five years 3,762 5,882 8,796
------ ------ ------
21,228 27,418 35,428
Less finance charges allocated to future periods (7,608) (9,657) (11,992)
------ ------ ------
13,620 17,761 23,436
====== ====== ======
Payments due in respect of operating leases for the next financial year
are as follows:
Property Plant and equipment
1996 1995 1994 1996 1995 1994
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C> <C> <C>
On leases expiring:
- Within one year 388 286 50 1,895 2,183 2,107
- In two to five years 842 2,263 2,528 6,720 5,415 2,986
- In more than five years 2,802 822 844 - 118 31
----- ----- ----- ----- ----- -----
4,032 3,371 3,422 8,615 7,716 5,124
===== ===== ===== ===== ===== =====
24. CONTINGENT LIABILITIES
----------------------
(a) The Group has guaranteed bridging loans in connection with employees who
are being relocated. The total value of such loans outstanding at
December 28, 1996 was (Pounds)139,750 (1995 (Pounds)396,475).
(b) The potential amount of deferred taxation not provided is set out in note 18.
F-21
</TABLE>
<PAGE>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
25. RELATED PARTY TRANSACTIONS
--------------------------
As disclosed in note 3 the Company's share capital is held by Cadbury
Schweppes Public Limited Company and Coca-Cola Holdings (U.K.) Limited.
Material transactions during the year with Cadbury Schweppes Public
Limited Company, The Coca-Cola Company and their subsidiaries and
associate undertakings are detailed below. Other services such as
property management, insurance and taxation advice are provided by
Cadbury Schweppes Public Limited Company at a nominal charge.
<TABLE>
<CAPTION>
Company Nature of transaction Income/
------- --------------------- -------
(Expenditure)
-------------
(Pounds)'000
------------
<S> <C> <C>
CADBURY SCHWEPPES GROUP COMPANIES
Cadbury Schweppes Finance Limited Interest payable (note 8) (2,228)
Cadbury Schweppes Public Limited Interest payable (note 8) (2,831)
Company Interest receivable (note 8) 298
Schweppes International Limited Product essences and royalties (14,987)
Cadbury Beverages Limited Finished goods 9,109
Cadbury Limited Third party bulk haulage arranged 9,687
by CCSB
THE COCA-COLA COMPANY GROUP COMPANIES
Atlantic Industries Limited Product concentrate (221,428)
Coca-Cola Great Britain & Ireland Marketing support 40,924
Limited Finished goods 12,408
Refreshment Spectrum Limited Marketing activity 689
Finished goods (11,301)
Balances with related parties at the balance sheet date not disclosed in
other notes to the accounts are as follows:
Coca-Cola Great Braitain & Ireland Trade debtors (note 14) 3,075
Limited
Atlantic Industries Trade creditors (note 15) 325
Limited
Refreshment Spectrum Trade creditors (note 15) 824
Limited
</TABLE>
F-22
<PAGE>
<TABLE>
<CAPTION>
[LOGO OF ABGB APPEARS HERE]
NOTES ON THE ACCOUNTS
(CONTINUED)
26. 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 April 5, 1996 on the projected unit
method. At this date the market value of the assets was (Pounds)990m 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 8.5%, that the rate of salary increases would be 6.0% and
that past and future pensions would increase by 4.0%.
The total pension costs for the Group were (Pounds)4.6m (1995
(Pounds)3.8m; 1994 (Pounds)3.8m) 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)9.0m (1995 (Pounds)9.1m) included in the balance
sheet represents the excess of pension costs over the amounts actually
contributed to the external funds of the group schemes.
Following the proposed sale of the Company to Coca-Cola Enterprises Inc.,
employees will no longer be eligible to participate in the Cadbury
Schweppes scheme but it is anticipated that a new comparable scheme will
be established to which employees will be able to transfer.
27. EMPLOYEES AND EMOLUMENTS
------------------------
1996 1995 1994
Number Number Number
<S> <C> <C> <C>
The average number of employees in the Group was:
Production 1,333 1,291 1,276
Distribution and marketing 1,564 1,371 1,336
Administration 341 334 341
----- ----- -----
3,238 2,996 2,953
===== ===== =====
Emoluments for the above comprised: (Pounds)'000 (Pounds)'000 (Pounds)'000
Wages and salaries 80,270 79,183 72,959
Social security costs 6,225 6,288 6,051
Other pension costs 4,568 3,753 3,782
------ ------ ------
91,063 89,224 82,792
====== ====== ======
1996 1995 1994
(Pounds) (Pounds) (Pounds)
Total directors' remuneration 651,053 610,988 513,179
======= ======= =======
F-23
</TABLE>
<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 Income for
the Year Ended December 31, 1996........................ PF-4
Pro Forma Combined Condensed Statements of Operations
for the Quarters Ended March 29, 1996, June 28, 1996,
September 27, 1996, and December 31, 1996................ PF-6
Pro Forma Combined Condensed Balance Sheet as of
December 31, 1996........................................ PF-7
Notes to Unaudited Pro Forma Combined Condensed Financial
Information.............................................. PF-8
</TABLE>
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA FINANCIAL INFORMATION
INTRODUCTORY INFORMATION
The following unaudited pro forma combined condensed financial information sets
forth the combined results of operations and financial position of Coca-Cola
Enterprises Inc. (the "Company") and (i) SA Beverage Sales Holding NV,
Coca-Cola Beverages SA, and Coca-Cola Production SA (collectively
"France/Belgium"), (ii) Amalgamated Beverages Great Britain Limited ("Great
Britain bottler"), (iii) Ouachita Coca-Cola Bottling Company, Inc.
("Ouachita"), and (iv) Coca-Cola Bottling Company West, Inc., and Grand Forks
Coca-Cola Bottling Company (collectively "Coke West") and assuming the Company
purchased the Acquired Companies (referring to all of the purchased companies,
collectively) based on the assumptions set forth in the following Notes to
Unaudited Pro Forma Combined Condensed Financial Information.
On February 21, 1996, the Company acquired Ouachita for a total transaction
value of approximately $313 million. Later in 1996, an additional $2.5 million
in purchase price was paid to the sellers primarily for additional working
capital amounts acquired. 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 Ouachita bottling operations are located in portions of
Arkansas, Louisiana, and Mississippi.
On July 26, 1996, the Company acquired The Coca-Cola Company's bottling and
canning operations in France and Belgium for a transaction value of
approximately $915 million. The France/Belgium franchise territories include
approximately 90% of the population in France and all of the population in
Belgium.
On August 12, 1996, the Company acquired Coke West for a transaction value of
approximately $158 million. Coke West operates in franchise territories in
portions of Montana, Wyoming, North Dakota, South Dakota, and Minnesota.
On February 10, 1997, the Company purchased the Great Britain bottler from The
Coca-Cola Company and Cadbury Schweppes plc for an aggregate transaction value
of approximately 1.2 billion British pounds sterling, or approximately $2
billion. The Great Britain bottler produces and distributes beverage products of
The Coca-Cola Company and Cadbury Schweppes plc in Great Britain.
The purchase method of accounting has been used for all acquisitions, and
accordingly, the results of operations of acquired companies are included in the
Company's consolidated statement of income beginning with the date of
acquisition. In addition, the assets and liabilities of companies acquired in
1996 are included in the Company's consolidated balance sheet at the preliminary
estimates of their fair values on the date of acquisition.
PF-1
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA FINANCIAL INFORMATION
INTRODUCTORY INFORMATION -- (CONTINUED)
The acquisitions were initially financed through short-term bank borrowings,
commercial paper, and seller financing. The Company intends to refinance
portions of the short-term borrowings on a long-term basis. With respect to
international acquisitions, the Company has financed the acquisitions in local
currency (or alternatively, executed currency agreements) to eliminate exposure
to fluctuating currencies on the Company's acquisition cost.
The following unaudited pro forma financial information should be read in
conjunction with the Company's audited and unaudited financial statements,
including the notes thereto, contained in: (i) the Coca-Cola Enterprises Inc.
Annual Report on Form 10-K for the year ended December 31, 1996 and (ii) Coca-
Cola Enterprises Inc. Quarterly Reports on Form 10-Q for the quarterly periods
ended March 29, 1996, June 28, 1996, and September 27, 1996.
The unaudited pro forma combined condensed statement of income for the year
ended December 31, 1996 and the unaudited pro forma combined condensed
statements of operations for each of the quarterly periods ended March 29, 1996,
June 28, 1996, September 27, 1996, and December 31, 1996 present the combined
operating results of the Company and the Acquired Companies, as if the
acquisitions described above had occurred at the beginning of the earliest
period presented. The unaudited pro forma combined condensed balance sheet as of
December 31, 1996 includes the audited historical balance sheet of Coca-Cola
Enterprises Inc. as of December 31, 1996 and the Great Britain bottler presented
as of December 28, 1996. The unaudited pro forma combined condensed balance
sheet as of December 31, 1996 presents the combined financial position of the
Company and the Great Britain bottler as if the acquisition of the Great Britain
bottler described above had occurred on December 31, 1996. These pro forma
financial statements reflect use of the purchase method of accounting and are
based on the historical financial information of the Company and the Acquired
Companies adjusted for the pro forma adjustments described in the attached notes
to unaudited pro forma combined condensed financial information. Certain
reclassifications and adjustments have been made to the historical financial
statements of the Acquired Companies to conform to the Company's financial
presentation and interim reporting dates.
PF-2
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA FINANCIAL INFORMATION
INTRODUCTORY INFORMATION -- (CONTINUED)
The pro forma adjustments are based on preliminary estimates of the fair value
of assets and liabilities of the Acquired Companies, which may require further
adjustment when additional information is obtained as of the acquisition date
and during the one year period subsequent to each 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
as prepared under guidelines of the Securities and Exchange Commission and is
not intended to be 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 a forecast of future operating results or financial
position.
PF-3
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED; IN MILLIONS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
COCA-COLA FRANCE/ GREAT BRITAIN
ENTERPRISES BELGIUM BOTTLER 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............. $7,921 $846 $1,511 $20 $69 $ (60) $10,307
Cost of sales...................... 4,896 570 976 12 44 (54) 6,444
------ ---- ------ --- --- ----- -------
GROSS PROFIT....................... 3,025 276 535 8 25 (6) 3,863
Selling, general, & administrative
expenses.......................... 2,480 223 341 14 26 71 3,155
------ ---- ------ --- --- ----- -------
OPERATING INCOME................... 545 53 194 (6) (1) (77) 708
Interest expense, net.............. 351 6 12 1 7 187 564
Other income (deductions), net..... - (2) - 7 - - 5
------ ---- ------ --- --- ----- -------
INCOME (LOSS) BEFORE INCOME TAXES.. 194 45 182 - (8) (264) 149
Income tax expense (benefit)....... 80 2 60 - - (81) 61
------ ---- ------ --- --- ----- -------
NET INCOME (LOSS).................. 114 43 122 - (8) (183) 88
Preferred stock dividends.......... 8 - - - - 1 9
------ ---- ------ --- --- ----- -------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHARE OWNERS.............. $ 106 $ 43 $ 122 $ - $(8) $(184) $ 79
====== ==== ====== === === ===== =======
AVERAGE COMMON SHARES OUTSTANDING.. 125 125
====== =======
NET INCOME PER COMMON SHARE........ $ 0.85 $ 0.63
====== =======
OTHER OPERATING DATA:
Operating income................. $ 545 $ 53 $ 194 $(6) $(1) $ (77) $ 708
Depreciation..................... 392 32 56 1 2 - 483
Amortization..................... 235 5 - 1 3 75 319
------ ---- ------ --- --- ----- -------
OPERATING INCOME BEFORE DEPRECIATION
AND AMORTIZATION................. $1,172 $ 90 $ 250 $(4) $ 4 $ (2) $ 1,510
====== ==== ====== === === ===== =======
</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 forecasts 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 YEAR ENDED DECEMBER 31, 1996
(UNAUDITED; IN MILLIONS)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
--------------------------------------------------------------------
FRANCE/ GREAT BRITAIN
BELGIUM BOTTLER OUACHITA COKE WEST TOTAL
------- ------------- -------- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET OPERATING REVENUES................... $(36) (D) $ - $ - $ -
(13) (E)
(11) (F) $ (60)
Cost of sales............................ (35) (D) - - -
(12) (E)
(7) (G) (54)
---- ------ ----- ----- -----
GROSS PROFIT............................. (6) - - - (6)
Selling, general, & administrative
expenses............................... 5 (A) 68 (A) 1 (A) 1 (A)
(4) (H) 71
---- ------ ----- ----- -----
OPERATING INCOME......................... (7) (68) (1) (1) (77)
Interest expense, net.................... 35 (B) 152 (B) - - 187
Other income (deductions), net........... - - - - -
---- ------ ----- ----- -----
INCOME (LOSS) BEFORE INCOME TAXES........ (42) (220) (1) (1) (264)
Income tax expense (benefit)............. (5) (C) (75) (C) (1) (C) - (81)
---- ------ ----- ----- -----
NET INCOME (LOSS)....................... (37) (145) - (1) (183)
Preferred stock dividends............... - - 1 (I) - 1
---- ------ ----- ----- -----
NET INCOME (LOSS) APPLICABLE TO
COMMON SHARE OWNERS................... $(37) $ (145) $ (1) $ (1) $(184)
==== ====== ===== ===== =====
OTHER OPERATING DATA:
Operating income....................... $ (7) $ (68) $ (1) $ (1) $ (77)
Depreciation........................... - - - - -
Amortization........................... 5 68 1 1 75
---- ------ ----- ----- -----
Operating income before depreciation
and amortization....................... $ (2) $ - $ - $ - $ (2)
==== ====== ===== ===== =====
</TABLE>
The introductory information contained on page PF-1 and the accompanying Notes
to Unaudited Pro Forma Combined Condensed Financial Information are an integral
part of these statements.
PF-5
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 29, 1996, JUNE 28, 1996, SEPTEMBER 27, 1996, AND
DECEMBER 31, 1996
(UNAUDITED; IN MILLIONS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
QUARTER ENDED
-------------------------------------------------------
MARCH 29, JUNE 28, SEPTEMBER 27, DECEMBER 31,
1996 1996 1996 1996 TOTAL
--------- ------- ------------- ------------ -----
<S> <C> <C> <C> <C> <C>
NET OPERATING REVENUES...................... $2,201 $2,879 $2,715 $2,512 $10,307
Cost of sales............................... 1,373 1,813 1,699 1,559 6,444
------ ------ ------ ------ -------
GROSS PROFIT................................ 828 1,066 1,016 953 3,863
Selling, general, & administrative expenses. 738 786 825 806 3,155
------ ------ ------ ------ -------
OPERATING INCOME............................ 90 280 191 147 708
Interest expense, net....................... 141 146 140 137 564
Other income (deductions), net.............. 7 (1) (2) 1 5
------ ------ ------ ------ -------
INCOME (LOSS) BEFORE INCOME TAXES........... (44) 133 49 11 149
Income tax expense (benefit)................ (14) 47 22 6 61
------ ------ ------ ------ -------
NET INCOME (LOSS)........................... (30) 86 27 5 88
Preferred stock dividends................... 3 2 2 2 9
------ ------ ------ ------ -------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHARE OWNERS....................... $ (33) $ 84 $ 25 $ 3 $ 79
====== ====== ====== ====== =======
AVERAGE COMMON SHARES OUTSTANDING........... 126 123 124 125 125
====== ====== ====== ====== =======
NET INCOME (LOSS) PER COMMON SHARE.......... $(0.26) $ 0.68 $ 0.19 $ 0.02 $ 0.63
====== ====== ====== ====== =======
OTHER OPERATING DATA:
Operating income.......................... $ 90 $ 280 $ 191 $ 147 $ 708
Depreciation.............................. 114 120 121 128 483
Amortization.............................. 74 79 86 80 319
------ ------ ------ ------ -------
OPERATING INCOME BEFORE DEPRECIATION
AND AMORTIZATION.......................... $ 278 $ 479 $ 398 $ 355 $ 1,510
====== ====== ====== ====== =======
</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 forecasts of future operating results.
PF-6
<PAGE>
COCA-COLA ENTERPRISES INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
DECEMBER 31, 1996
(UNAUDITED; IN MILLIONS)
<TABLE>
<CAPTION>
COCA-COLA GREAT BRITAIN
ENTERPRISES BOTTLER PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
------------ ------------ ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
CURRENT
Cash and cash investments.................... $ 47 $ 72 $ - $ 119
Trade accounts receivable, net............... 668 249 - 917
Inventories.................................. 317 62 - 379
Prepaid expenses and other assets............ 287 - - 287
------- ---- ------ -------
Total Current Assets....................... 1,319 383 - 1,702
PROPERTY, PLANT, AND EQUIPMENT, NET........... 2,812 344 - 3,156
FRANCHISES AND OTHER NONCURRENT ASSETS, NET... 7,103 - 2,713 (L) 9,816
------- ---- ------ -------
$11,234 $727 $2,713 $14,674
======= ==== ====== =======
LIABILITIES AND
SHARE-OWNERS' EQUITY
CURRENT
Accounts payable and accrued expenses........ $ 1,199 $529 $ 2 (L) $ 1,730
Notes payable and current maturities of
long-term debt.............................. 491 - - 491
------- ---- ------ -------
Total Current Liabilities.................. 1,690 529 2 2,221
LONG-TERM DEBT................................ 4,814 18 1,992 (K) 6,824
DEFERRED INCOME TAXES......................... 2,481 28 854 (L) 3,363
OTHER LONG-TERM OBLIGATIONS................... 699 17 - 716
SHARE-OWNERS' EQUITY
Preferred stock.............................. 134 - - 134
Common stock................................. 147 - - 147
Additional paid-in capital................... 1,434 - - 1,434
Reinvested earnings (deficit)................ 237 135 (135) (L) 237
Cumulative effect of currency translations... 21 - - 21
Cost of common stock in treasury............. (423) - - (423)
------- ---- ------ -------
Total Share-Owners' Equity................. 1,550 135 (135) 1,550
------- ---- ------ -------
$11,234 $727 $2,713 $14,674
======= ==== ====== =======
</TABLE>
The introductory information contained on page PF-1 and the accompanying Notes
to Unaudited Pro Forma Combined Condensed Financial Information are an integral
part of these statements.
PF-7
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION
The historical information for each company reflected in the accompanying
unaudited 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 the acquisitions. Actual adjustments to account for the acquisitions
under the purchase method are dependent upon the final valuations of the various
assets and liabilities of the Acquired Companies. The Ouachita acquisition
occurred in February 1996 and the France/Belgium and Coke West acquisitions
occurred in the third quarter of 1996 and, therefore, balance sheet accounts for
these acquisitions are included in the balance sheet of the Company as of
December 31, 1996. For each of the companies acquired in 1996 the historical
information presented in the pro forma combined condensed statements of
operations for the year ended December 31, 1996 reflects historical operations
from January 1, 1996 through date of acquisition. The results of operations of
the 1996 Acquired Companies from date of acquisition through December 31, 1996
are included in the historical results of operations of the Company. Since the
Great Britain bottler acquisition occurred in February 1997, the historical
information of the Great Britain bottler presented in the pro forma combined
condensed statement of income for the year ended December 31, 1996 reflects
historical information for the full year 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 were initially financed through short-term
bank borrowings, commercial paper, and seller financing. The Company intends to
refinance portions of the short-term borrowings on a long-term basis. Interest
rates assumed applicable to contemplated financings were 7.5% (reflecting the
Company's weighted average long-term borrowing rate for 1995).
NOTE C - The pro forma adjustments to "Income tax expense (benefit)" reflect the
income tax attributes of the foregoing adjustments and the effect on the
consolidated tax provision after inclusion of the Acquired Companies. On a
quarterly basis, the pro forma adjustments reflect modifications to the
Company's estimated effective annual income tax rate for full year 1996
giving effect to the results of operations of the Acquired Companies and the pro
forma adjustments.
NOTE D - This pro forma adjustment to "Net Operating Revenues" and "Cost of
sales" gives effect to the elimination of historical sales by France/Belgium to
the Company's Netherlands operations.
NOTE E - This pro forma adjustment to "Net Operating Revenues" and "Cost of
sales" gives effect to the elimination of historical product sales by
France/Belgium to the German Coca-Cola bottler owned by The Coca-Cola Company.
These sales were discontinued as a condition of the purchase agreement.
PF-8
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION -- (CONTINUED)
NOTE F - This pro forma adjustment to "Net operating revenues" gives effect to
the elimination of certain marketing support funding provided by The Coca-Cola
Company. As a condition of the purchase agreement, the marketing support
arrangement between France/Belgium and The Coca-Cola Company has reduced the
funding. Therefore, France/Belgium will no longer be receiving this marketing
support.
NOTE G - This pro forma adjustment to "Cost of sales" gives effect to the
elimination of intercompany centralized purchasing costs for certain products
and packaging materials purchased directly from a subsidiary of The Coca-Cola
Company by France/Belgium. As a condition of the purchase agreement,
France/Belgium will no longer be charged a mark-up on centralized purchasing
costs.
NOTE H - This pro forma adjustment to "Selling, general, & administrative
expenses" gives effect to the elimination of certain overhead and administrative
expense allocations charged to France/Belgium by the corporate regional offices
of The Coca-Cola Company. As a condition of the acquisition, these costs will
no longer be incurred by France/Belgium.
NOTE I - In connection with the acquisition of Ouachita in February, 1996, the
Company authorized 1,110,000 shares and issued 923,413 shares of voting
convertible preferred stock, Ouachita Series A ("Series A") and authorized
350,000 shares and issued 95,880 shares of voting convertible preferred stock,
Ouachita Series B ("Series B"). Series A pays quarterly cumulative dividends of
4% per year and Series B pays no dividend. Dividends are provided at a market-
related rate for both Series A and Series B to reflect the actual cost of the
preferred stock.
NOTE J - Pro forma fully diluted net income (loss) per common share data are not
presented because there are no material differences between such amounts and the
pro forma net income (loss) per share presented. All per share data is
calculated prior to rounding to millions.
NOTE K - The pro forma adjustments to reflect the increase in outstanding
indebtedness as a result of (i) the acquisition of the Great Britain bottler
by the Company; and (ii) the repayment of assumed debt at the acquisition date
was calculated as follows:
<TABLE>
<S> <C>
Purchase price of the acquisition of the Great Britain bottler:
Amount payable in cash.......................................... $1,866
Long-term debt assumed from sellers............................. 126
------
Net increase in long-term debt ................................. $1,992
======
</TABLE>
PF-9
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION -- (CONTINUED)
NOTE L - The purchase method of accounting for acquisitions requires that the
assets and liabilities of the acquired company be adjusted to their estimated
fair values. The following are the pro forma adjustments which reflect
management's best estimate of the fair values of the assets and liabilities of
the Great Britain bottler as of December 31, 1996 using information currently
available.
Net Assets
------------------
Increase (Decrease)
Amounts as reported by the Great Britain bottler.... $ 135
Fair value adjustments:
Franchises and other noncurrent assets............. 2,713
Current liabilities................................ (2)
Deferred income taxes.............................. (854)
------
$1,992
======
PF-10
