<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended April 3, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 001-09300
COCA-COLA ENTERPRISES INC.
(Exact name of registrant as specified in its charter)
DELAWARE 58-0503352
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2500 WINDY RIDGE PARKWAY, SUITE 700
ATLANTA, GEORGIA 30339
(Address of principal executive offices) (Zip Code)
770-989-3000
(Registrant's telephone number, including area code)
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock.
386,703,709 SHARES OF $1 PAR VALUE COMMON STOCK AS OF MAY 6, 1998
================================================================================
<PAGE> 2
COCA-COLA ENTERPRISES INC.
QUARTERLY REPORT ON FORM 10-Q
FOR QUARTER ENDED APRIL 3, 1998
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations for the Quarters
ended April 3, 1998 and March 28, 1997.......................... 1
Condensed Consolidated Balance Sheets as of April 3, 1998
and December 31, 1997........................................... 2
Condensed Consolidated Statements of Cash Flows for the Quarters
ended April 3, 1998 and March 28, 1997.......................... 4
Notes to Condensed Consolidated Financial Statements.............. 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................... 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings................................................. 19
Item 4. Submission of Matters to a Vote of Security Holders............... 19
Item 6. Exhibits and Reports on Form 8-K.................................. 20
Signatures................................................................ 21
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
COCA-COLA ENTERPRISES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED; IN MILLIONS EXCEPT PER SHARE DATA)
QUARTER ENDED
---------------------------
APRIL 3, MARCH 28,
1998 1997
------------ ------------
NET OPERATING REVENUES ......................... $2,958 $2,141
Cost of sales .................................. 1,876 1,341
------ ------
GROSS PROFIT ................................... 1,082 800
Selling, delivery, and administrative
expenses ..................................... 993 742
------ ------
OPERATING INCOME ............................... 89 58
Interest expense, net .......................... 168 107
Other nonoperating deductions, net ............. -- 5
------ ------
LOSS BEFORE INCOME TAXES ....................... (79) (54)
Income tax benefit ............................. (28) (21)
------ ------
NET LOSS ....................................... (51) (33)
Preferred stock dividends ...................... -- 2
------ ------
NET LOSS APPLICABLE TO COMMON SHARE OWNERS ..... $ (51) $ (35)
====== ======
BASIC AND DILUTED NET LOSS PER SHARE APPLICABLE
TO COMMON SHARE OWNERS ....................... $(0.13) $(0.09)
====== ======
See Notes to Condensed Consolidated Financial Statements.
-1-
<PAGE> 4
COCA-COLA ENTERPRISES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
APRIL 3, DECEMBER 31,
1998 1997
------------ ------------
(Unaudited)
ASSETS
CURRENT
Cash and cash investments, at cost
approximating market ....................... $ 16 $ 45
Trade accounts receivable, less reserves
of $59 and $58, respectively ............... 1,120 1,007
Inventories:
Finished goods ............................. 376 330
Raw materials and supplies ................. 157 132
------- -------
533 462
Current deferred income tax assets ........... 70 70
Prepaid expenses and other current assets..... 226 229
------- -------
Total Current Assets ..................... 1,965 1,813
PROPERTY, PLANT, AND EQUIPMENT
Land ......................................... 298 297
Buildings and improvements ................... 1,066 1,065
Machinery and equipment ...................... 4,927 4,653
------- -------
6,291 6,015
Less allowances for depreciation ............. 2,433 2,295
------- -------
3,858 3,720
Construction in progress ..................... 176 142
------- -------
Net Property, Plant, and Equipment ......... 4,034 3,862
FRANCHISES AND OTHER NONCURRENT ASSETS, NET..... 11,812 11,812
------- -------
$17,811 $17,487
======= =======
See Notes to Condensed Consolidated Financial Statements.
-2-
<PAGE> 5
COCA-COLA ENTERPRISES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS EXCEPT SHARE DATA)
APRIL 3, DECEMBER 31,
1998 1997
------------ ------------
(Unaudited)
LIABILITIES AND SHARE-OWNERS' EQUITY
CURRENT
Accounts payable and accrued expenses........ $ 2,084 $ 2,000
Current portion of long-term debt............ 832 1,032
------- -------
Total Current Liabilities.................. 2,916 3,032
LONG-TERM DEBT, LESS CURRENT MATURITIES........ 8,443 7,760
RETIREMENT AND INSURANCE PROGRAMS AND OTHER
LONG-TERM OBLIGATIONS........................ 886 917
LONG-TERM DEFERRED INCOME TAX LIABILITIES...... 3,891 3,996
SHARE-OWNERS' EQUITY
Common stock, $1 par value - Authorized -
1,000,000,000 shares; Issued - 444,248,170
and 442,971,597 shares, respectively....... 444 443
Additional paid-in capital................... 1,386 1,364
Reinvested earnings.......................... 314 374
Cumulative comprehensive income
adjustments................................ (36) (16)
Common stock in treasury, at cost (57,926,002
and 56,418,084 shares, respectively)....... (433) (383)
------- -------
Total Share-Owners' Equity................. 1,675 1,782
------- -------
$17,811 $17,487
======= =======
-3-
<PAGE> 6
COCA-COLA ENTERPRISES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED; IN MILLIONS)
QUARTER ENDED
---------------------------
APRIL 3, MARCH 28,
1998 1997
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ..................................... $ (51) $ (33)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation ............................. 165 120
Amortization ............................. 90 96
Deferred income tax provision ............ (55) (52)
Net changes in current assets and
current liabilities..................... (209) (282)
Additional nonoperating cash flows ....... (21) 45
------- -------
Net cash used in operating activities ........ (39) (106)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets .................... (346) (183)
Fixed asset sales ............................ 2 3
Cash investments in bottling businesses,
net of cash acquired ....................... (166) (1,017)
Additional investing activities .............. (46) --
------- -------
Net cash used in investing activities ........ (556) (1,197)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt ................... 2,175 1,337
Payments on long-term debt ................... (1,556) (77)
Cash dividend payments on common stock ....... (10) --
Exercise of employee stock options ........... 9 5
Stock purchases for treasury ................. (50) --
Additional financing activities .............. (2) --
------- -------
Net cash derived from financing
activities ................................. 566 1,265
------- -------
NET DECREASE IN CASH AND CASH INVESTMENTS ...... (29) (38)
Cash and cash investments at beginning
of period .................................. 45 47
------- -------
CASH AND CASH INVESTMENTS AT END OF PERIOD ..... $ 16 $ 9
======= =======
SUPPLEMENTAL NONCASH INVESTING AND FINANCING
ACTIVITIES:
Acquisitions:
Fair value of assets acquired ............ $ 186 $ 3,344
Debt issued and assumed .................. (17) (990)
Other liabilities assumed ................ (3) (1,337)
------- -------
Cash paid, net of cash acquired .......... $ 166 $ 1,017
======= =======
See Notes to Condensed Consolidated Financial Statements.
-4-
<PAGE> 7
COCA-COLA ENTERPRISES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles (GAAP) for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all information and
footnotes required by 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
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997.
NOTE B - SEASONALITY OF BUSINESS
Operating results for the first quarter ended April 3, 1998 are not indicative
of results that may be expected for the year ending December 31, 1998 because of
business seasonality. This seasonality results from a combination of higher unit
sales of the Company's products in the second and third quarters versus the
first and fourth quarters of the year and the methods of accounting for fixed
costs such as depreciation, amortization, and interest expense which are not
significantly impacted by business seasonality. In addition, the first quarter
of 1998 includes four more selling days than the first quarter of 1997,
influencing period comparisons.
NOTE C - ACQUISITIONS
The following table summarizes unaudited pro forma financial information of the
Company as if the 1997 acquisitions of Coca-Cola Beverages Ltd. ("Coke Canada"),
The Coca-Cola Bottling Company of New York, Inc. ("Coke New York"), and
Amalgamated Beverages Great Britain Limited ("ABGB") were completed effective
January 1, 1997. The unaudited pro forma financial information for the quarter
ended March 28, 1997 reflects adjustments for: (i) financing of the transactions
at an estimated financing cost for each acquisition, (ii) amortization of the
value of the acquired franchise assets over 40 years, and (iii) the income tax
effect of the foregoing (in millions except per share data):
-5-
<PAGE> 8
COCA-COLA ENTERPRISES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE C - ACQUISITIONS (CONTINUED)
QUARTER
ENDED
------------
MARCH 28,
1997
------------
NET OPERATING REVENUES ........................................ $2,640
Cost of sales ................................................. 1,667
------
GROSS PROFIT .................................................. 973
Selling, delivery, and administrative expenses ................ 937
------
OPERATING INCOME .............................................. 36
Interest expense, net ......................................... 150
Other nonoperating income, net ................................ (4)
------
LOSS BEFORE INCOME TAXES ...................................... (110)
Income tax benefit ............................................ (42)
------
NET LOSS ...................................................... (68)
Preferred stock dividends ..................................... 2
------
PRO FORMA NET LOSS APPLICABLE TO COMMON SHARE OWNERS .......... $ (70)
======
PRO FORMA BASIC AND DILUTED NET LOSS PER SHARE APPLICABLE TO
COMMON SHARE OWNERS ......................................... $(0.18)
======
OTHER PRO FORMA OPERATING DATA:
Depreciation .................................................. $ 148
Amortization .................................................. $ 121
On January 30, 1998, the Company acquired the Coca-Cola bottling operations in
Luxembourg. In conjunction with the acquisition, the Company purchased the
exclusive rights to manufacture and distribute products of The Coca-Cola Company
in this country. The total transaction value (purchase price and acquired debt,
net of cash acquired) for this acquisition was approximately $20 million. Also
in January 1998, the Company acquired the remaining shares of Coke New York held
by minority share owners.
Pending Transactions
On April 6, 1998, the Company announced the signing of a letter of intent to
acquire CCBG Corporation and Texas Bottling Group, Inc. (collectively known as
"Coke Southwest"). The acquisition is expected to be completed for a transaction
value (purchase price and acquired debt) of approximately $1.1 billion. Coke
Southwest operates in parts of Colorado, Kansas, New Mexico, Oklahoma, and
Texas. The proposed transaction is subject to certain conditions including
negotiation of a definitive purchase agreement, expiration of the
Hart-Scott-Rodino Antitrust review period, and approval of all appropriate
Boards of Directors and is expected to close by the end of second-quarter or
early in third-quarter 1998.
-6-
<PAGE> 9
COCA-COLA ENTERPRISES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE C - ACQUISITIONS (CONTINUED)
The Company has also signed a letter of intent to acquire The Coca-Cola Bottling
Company of Bellingham for a purchase price of $12 million. The Bellingham
bottler is located in the northwest corner of Washington state. This transaction
is expected to close by the end of the second quarter or early in the third
quarter of 1998.
NOTE D - LONG-TERM DEBT
Long-term debt balances, including current maturities, are adjusted for the
effects of interest rate and currency swap agreements (in millions):
APRIL 3, DECEMBER 31,
1998 1997
------------ ------------
Commercial Paper (weighted average
rates of 4.4% and 4.3%)(A)......... $1,104 $ 773
Canadian dollar loans payable
(weighted average rates of 4.9% and
4.2%).............................. 908 892
British pound sterling loans payable
(weighted average rates of 7.7% and
6.9%).............................. 542 1,194
Notes due 1997 - 2037 (weighted
average rate of 7.2%).............. 1,550 1,550
Debentures due 2012 - 2036 (weighted
average rates of 7.5% and 7.6%)(B). 3,150 2,900
8.35% Zero Coupon Notes due 2020 (net
of unamortized discount of $1,618
and $1,625, respectively).......... 314 307
Euro notes due 2002 - 2011 (weighted
average rates of 7.2% and 7.5%)(B). 1,184 531
Various foreign currency debt........ 249 138
Additional debt(A)................... 270 504
------ ------
Long-term debt including effect of
net asset positions of currency
swaps............................ 9,271 8,789
Net asset positions of currency
swap agreements(C)............... 4 3
------ ------
$9,275 $8,792
====== ======
Aggregate maturities of long-term debt for the five twelve-month periods
subsequent to April 3, 1998 are as follows (in millions): 1998 - $832; 1999 -
$253; 2000 - $10; 2001 - $2,345; and 2002 - $532.
(A) At April 3, 1998 and December 31, 1997, $837 million and $957 million of
the Company's commercial paper and additional debt had been effectively
exchanged into non-U.S. dollar obligations through currency swap
arrangements. These currency swap arrangements provide for the exchange of
U.S. dollars into Belgian francs, French francs, Dutch florins, and British
pounds sterling and also provide for the periodic exchange of interest
payments. The Company intends to renew these short-term currency swap
arrangements as they expire. These currency swap arrangements hedge net
investments in international subsidiaries.
-7-
<PAGE> 10
COCA-COLA ENTERPRISES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE D - LONG-TERM DEBT (CONTINUED)
(B) During the first quarter of 1998 the Company issued $250 million of
debentures due 2038 with an interest rate of 6.75% and $666 million in
notes due 2003 - 2011 with a weighted average interest rate of 6.9% under
the European Medium Term Note Program.
(C) The net asset positions of currency swap agreements are included in the
balance sheet as assets.
The Company has a $1.5 billion multicurrency revolving bank credit agreement
maturing in November 2001. This credit facility supports the commercial paper
program and other borrowings as needed. No amounts were outstanding under this
credit agreement at April 3, 1998; at December 31, 1997, $422 million of
short-term British pound sterling loans had been issued under this credit
agreement. At April 3, 1998 and December 31, 1997, a total of $1.5 billion of
borrowings due in the next 12 months was classified as maturing after one year
under this agreement due to the Company's ability and intent to refinance these
borrowings on a long-term basis.
At April 3, 1998 and December 31, 1997, the Company had approximately $1,601
million and $1,217 million, respectively, outstanding under various short-term
credit facilities with additional amounts available of $1,213 million and $1,238
million, respectively. Included in the outstanding balance at April 3, 1998 and
December 31, 1997, is approximately $908 million and $866 million, respectively,
of Canadian dollar-denominated loans issued under revolving credit facilities.
Because the Company has the option to convert these revolving credit facilities
to a five-year loan, amounts have been classified as maturing after one year.
At April 3, 1998 and December 31, 1997, the Company had available for issuance
approximately $1.8 billion and $2 billion, respectively, in registered debt
securities under a registration statement with the Securities and Exchange
Commission and approximately $1.3 billion and $2 billion, respectively, in debt
securities under a program with the Luxembourg Stock Exchange.
The multicurrency revolving bank credit agreement and the outstanding notes and
debentures contain various provisions which, among other things, require the
Company to maintain a defined leverage ratio and limit the incurrence of certain
liens or encumbrances in excess of defined amounts. These requirements currently
are not, and it is not anticipated they will become, restrictive on the
Company's liquidity or capital resources.
-8-
<PAGE> 11
COCA-COLA ENTERPRISES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE E - SHARE REPURCHASES
The Company can repurchase shares in the open market and in privately negotiated
transactions based on prevailing market conditions under a share repurchase
program authorizing the repurchase of up to 30 million shares. The Company
repurchased 1,508,360 shares of common stock during the first quarter of 1998
for an aggregate cost of approximately $50 million under this program.
Management considers market conditions and alternative uses of cash and/or debt,
balance sheet ratios, and share-owner returns when evaluating share repurchases.
Repurchased shares are added to treasury stock and are available for general
corporate purposes including acquisition financing and the funding of various
employee benefit and compensation plans.
NOTE F - INCOME TAXES
The Company's effective tax rates for the first quarters of 1998 and 1997 were
36% and 39%, respectively. A reconciliation of the income tax provision at the
statutory federal rate to the Company's actual income tax provision follows (in
millions):
QUARTER ENDED
---------------------------
APRIL 3, MARCH 28,
1998 1997
------------ ------------
U.S. federal statutory benefit ....... $(28) $(19)
State benefit, net of federal
benefit ............................ -- (2)
Taxation of European and Canadian
operations, net .................... 5 3
Valuation allowance provision ........ (2) (1)
Nondeductible items .................. (2) (1)
Other, net ........................... (1) (1)
---- ----
$(28) $(21)
==== ====
NOTE G - STOCK-BASED COMPENSATION PLANS
An aggregate 1,295,000 shares of common stock were issued during first-quarter
1998 from the exercise of stock options.
Also in first-quarter 1998, the Company granted 4,448,000 service-vested stock
options to certain executive and management level employees and 47,000 stock
options to non-employee members of the Board of Directors. All options vest
ratably over a three-year period and expire ten years from the date of grant. Of
the total options granted, 1,404,000 were granted at an exercise price equal to
the fair market value of the stock on the grant date, and 3,091,000 were
premium-priced options.
NOTE H - COMPREHENSIVE INCOME
On January 1, 1998, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 130, "Reporting Comprehensive Income". SFAS No. 130
establishes new rules for reporting comprehensive income, comprised of net
income (loss) and other adjustments to comprehensive income (loss) such as
foreign currency translation adjustments and hedges of net investments in
foreign subsidiaries. The adoption of this statement had no impact on the
Company's net income or share-owners' equity.
-9-
<PAGE> 12
COCA-COLA ENTERPRISES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE H - COMPREHENSIVE INCOME (CONTINUED)
A reconciliation of comprehensive income follows (in millions):
QUARTER ENDED
---------------------------
APRIL 3, MARCH 28,
1998 1997
------------ ------------
Net loss.............................. $(51) $(33)
Currency items, including
tax effects of hedges............... (20) (18)
---- ----
Comprehensive income (loss)........... $(71) $(51)
==== ====
The Company does not provide income taxes on the impact of currency translations
as earnings from international subsidiaries are considered to be indefinitely
reinvested. The Company provides income taxes on the resulting impact of hedges
of its net investments in international subsidiaries.
NOTE I - EARNINGS PER SHARE
In the first quarter of 1998, dividends in the amount of $0.025 per common share
were declared for share owners of record on April 1, 1998. On April 17, 1998,
the Company's Board of Directors approved an increase in the regular quarterly
dividend to $0.04 per common share. This dividend increase is effective and
payable July 1, 1998 to share owners of record on June 19, 1998. Dividends are
at the discretion of the Company's Board of Directors.
The following table (in millions except per share data; per share data is
calculated prior to rounding to millions) presents information concerning basic
and diluted earnings per share. Because of the loss in each period, diluted loss
per share equals basic loss per share.
QUARTER ENDED
---------------------------
APRIL 3, MARCH 28,
1998 1997
------------ ------------
NET LOSS ....................................... $ (51) $ (33)
Preferred stock dividends ...................... -- (2)
------ ------
NET LOSS APPLICABLE TO COMMON
SHARE OWNERS ................................ $ (51) $ (35)
====== ======
BASIC AND DILUTED AVERAGE COMMON
SHARES OUTSTANDING .......................... 387 377
====== ======
BASIC AND DILUTED NET LOSS PER SHARE
APPLICABLE TO COMMON SHARE OWNERS............ $(0.13) $(0.09)
====== ======
-10-
<PAGE> 13
COCA-COLA ENTERPRISES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE J - GEOGRAPHIC OPERATING INFORMATION
The Company operates in one industry: the marketing, distribution, and
production of bottle and can liquid nonalcoholic refreshments. On April 3, 1998,
the Company operated in 44 states in the United States, the District of
Columbia, and in the 10 provinces of Canada (collectively referred to as the
Company's "North American" operations), and in Belgium, Great Britain, most of
France, Luxembourg, and the Netherlands (collectively referred to as the
Company's "European" operations).
The following presents net operating revenues for the quarters ended April 3,
1998 and March 28, 1997 and long-lived assets as of April 3, 1998 and December
31, 1997 by geographic territory (in millions):
1998 1997
--------------------- ---------------------
NET LONG- NET (A) LONG-
OPERATING LIVED OPERATING LIVED
REVENUES ASSETS REVENUES ASSETS
--------- --------- --------- ---------
North American ... $ 2,187 $11,378 $ 1,640 $11,174
European ......... 771 4,468 501 4,500
------- ------- ------- -------
Consolidated ..... $ 2,958 $15,846 $ 2,141 $15,674
======= ======= ======= =======
(A) 1997 net operating revenues do not include the results of
operations for the New York and Canadian bottlers acquired in
third-quarter 1997 and includes results beginning March 1997 for
the Great Britain bottler acquired in first-quarter 1997.
Therefore, reported 1997 information is not indicative of
full-year results.
The Company has no material amounts of sales or transfers between North American
and European operations and no significant United States export sales.
NOTE K - CONTINGENCIES
In North America, the Company purchases PET (plastic) bottles from manufacturing
cooperatives involved in the manufacture of plastic bottles. The Company has
guaranteed payment of up to $281 million of indebtedness owed by these
manufacturing cooperatives to third parties. At April 3, 1998, these
cooperatives had approximately $163 million of indebtedness guaranteed by the
Company. The Company has also issued letters of credit aggregating approximately
$145 million under self-insurance programs.
The Company is a defendant in various matters of litigation generally arising
out of the normal course of business. Although it is difficult to predict the
ultimate outcome of these cases, based on discussion with counsel, management
believes that any ultimate costs would not materially affect the Company's
financial position, results of operations, or liquidity.
-11-
<PAGE> 14
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
BUSINESS SUMMARY
Coca-Cola Enterprises Inc. ("the Company") is the world's largest marketer,
distributor, and producer of bottled and canned liquid nonalcoholic
refreshments. The Company distributes more than 65% of The Coca-Cola Company's
bottle and can products in the United States and Canada through franchise
territories in 44 states of the United States, the District of Columbia, and in
the 10 provinces of Canada. We are also the sole licensed bottler for products
of The Coca-Cola Company in Belgium, Great Britain, Luxembourg, the Netherlands,
and most of France.
Management's Discussion and Analysis should be read in conjunction with the
Company's consolidated financial statements and the accompanying footnotes along
with the cautionary statements at the end of this section.
RESULTS OF OPERATIONS
OVERVIEW
Our first quarter performance indicates we are on track to produce the 10%
comparable cash operating profit growth anticipated for full year 1998.
Consolidated cash operating profit, or net income before deducting interest,
taxes, depreciation, amortization, and other nonoperating expenses, reached $344
million in the first quarter of 1998, 26% ahead of reported first-quarter 1997
results, and 13% above comparable first-quarter 1997 performance. After
adjusting 1997 comparable cash operating profit for the effects of four
additional selling days included in first-quarter 1998 and currency
translations, cash operating profit increased 7%. Strong volume growth
contributed to the increase in operating and net income margins over comparable
1997 margins.
Management's primary objective is to deliver a superior investment return to our
share owners through increases in long-term operating cash flows and profitable
increases in sales volume. Our strong brand portfolio combined with our emphasis
on local market execution and our investments in people and infrastructure are
driving our consistent long-term growth.
In line with our objective, we have continued the integration and expansion of
our operations in North America and Europe. In first-quarter 1998, we acquired
the Coca-Cola bottling operations and the exclusive rights to manufacture and
distribute products of The Coca-Cola Company in Luxembourg. We also completed
our acquisition of the remaining shares of The Coca-Cola Bottling Company of New
York held by minority share owners. On April 6, 1998, the Company announced the
signing of a letter of intent to acquire CCBG Corporation and Texas Bottling
Group, Inc. (collectively known as "Coke Southwest") for a transaction value
(purchase price and acquired debt) of approximately $1.1 billion. Coke Southwest
operates in parts of Texas, Oklahoma, New Mexico, Colorado, and Kansas. The
Company has also signed a letter of intent to acquire The Coca-Cola Bottling
Company of Bellingham, in Bellingham, Washington for a purchase price of $12
million.
-12-
<PAGE> 15
Management believes, due to the Company's significant acquisition activity in
1997, comparable results are better indicators of current operating trends.
Comparable operating results are determined by adjusting reported 1997
performance to include results of significant acquisitions as if the
transactions occurred on January 1, 1997. In addition to comparison adjustments
for acquisitions, volume information has also been adjusted to common fiscal
periods.
The tables included in management's discussion and analysis summarize changes in
key operating information on a reported and comparable basis for first-quarter
1998.
CASH OPERATING PROFIT (COP)
In the opinion of management, COP is one of the key standards for measuring our
operating performance. COP is used by management as an additional indicator of
operating performance and not as a replacement of measures defined and required
by generally accepted accounting principles such as cash flows from operating
activities and operating income.
FIRST-QUARTER 1998
---------------------------
REPORTED COMPARABLE
CHANGE CHANGE
------------ ------------
Cash Operating Profit:
Consolidated ........................ 26% 13%
Currency-neutral and
Common Fiscal Period .............. 7%
The reported COP growth rate is affected by the significant number of
acquisitions completed in 1997. Also, first-quarter 1998 included 4 more selling
days than first-quarter 1997. After adjusting comparable first-quarter 1997
results for the effect of currency exchange rates and the additional selling
days, adjusted COP increased approximately 7% in the first quarter of 1998. Our
first-quarter 1998 performance was led by double-digit growth in our European
group which exceeded the consolidated growth.
VOLUME
Our volume performance was well in excess of industry rates across our
territories and particularly strong in our European territories, partially
offsetting the continuing pricing pressure in certain North American markets.
This performance is considerable given the 10% growth rate experienced in
first-quarter 1997 and that the Easter holiday falls in the second quarter of
1998 rather than the first quarter as in 1997.
FIRST-QUARTER 1998
---------------------------
REPORTED COMPARABLE
CHANGE CHANGE
------------ ------------
Physical Case Bottle and Can:
Consolidated ........................ 38% 8%
North American Territories .......... 33% 6%
European Territories ................ 58% 14%
-13-
<PAGE> 16
Volume results were driven by growth in brands of The Coca-Cola Company with
particularly strong performance in Coca-Cola classic, Coke light/diet Coke,
Barq's, Fanta, Sprite, and the Company's noncarbonated brand portfolio.
Our European operations represented 24% of the total physical case volume
reported in first-quarter 1998 compared to 21% of the reported volume in
first-quarter 1997. The first-quarter 1997 volume contribution from the European
operations is lower than first-quarter 1998 because we began including results
of the British bottler in March 1997.
NET OPERATING REVENUES AND COST OF SALES
The Company's first-quarter 1998 net operating revenues exceeded $2.9 billion.
In the first quarter of 1998, approximately 74% of total revenues were produced
by our operations in North America with the remaining 26% generated by our
European group.
FIRST-QUARTER 1998
---------------------------
REPORTED COMPARABLE
CHANGE CHANGE
------------ ------------
Net Operating Revenues ................ 38% 12%
Net Revenues Per Case ................. Flat (1)%
Cost of Sales Per Case ................ 1.5% (0.5)%
The first-quarter 1998 comparable currency neutral net revenues per case did not
change significantly and is a reflection of the continued competitive pricing
environment in North America. In the first quarter of 1998 currency-neutral
comparable cost of sales per case increased 1% from first-quarter 1997 levels,
principally resulting from anticipated increases in ingredient costs.
PER SHARE DATA
In first-quarter 1998, the Company generated basic and diluted net loss from
operations of $0.13 per common share as compared to reported and comparable
first-quarter 1997 net loss of $0.09 and $0.18 per common share, respectively,
after adjusting for the 1997 3-for-1 stock split. The net loss per share for
first-quarter 1997 includes a one-time charge of $6 million ($0.01 per common
share after tax) for the redemption of $142 million in outstanding debt.
The Company repurchased 1,508,360 shares of common stock during first-quarter
1998 for an aggregate cost of approximately $50 million under its share
repurchase program authorizing the repurchase of up to 30 million shares.
Approximately 623,000 shares were repurchased under the management stock buyback
program and the remaining shares were repurchased in open market transactions.
On April 17, 1998, the Company's Board of Directors approved an increase of the
regular quarterly dividend to $0.04 per common share up from $0.025 per share.
This dividend increase is effective and payable July 1, 1998 to share owners of
record on June 19, 1998.
-14-
<PAGE> 17
SELLING, DELIVERY, AND ADMINISTRATIVE
In first-quarter 1998, consolidated selling, delivery, and administrative
expenses as a percent of net operating revenues decreased to 33.6% from
comparable first-quarter 1997 results of 35.5%. The decrease is a result of
management's focus on controlling costs particularly during the competitive
pricing environment being experienced, strong volume performance, and no
incremental costs associated with stock-based compensation as reported in the
first quarter of 1997. Substantially all 1998 stock-based compensation plans
were designed to result in no recorded compensation expense to the Company and,
therefore, timing concerns relating to expense recognition encountered in
first-quarter 1997 have been eliminated.
INTEREST EXPENSE
First-quarter 1998 net interest expense increased significantly from reported
first-quarter 1997 levels due to higher average debt balances resulting from
1997 and 1998 acquisitions. The weighted average interest rate for first-quarter
1998 was 7.1% compared to 6.9% for first-quarter 1997. The increase in the
weighted average interest rates is primarily a result of our recent fixed-rate
debt transactions replacing floating-rate debt.
INCOME TAX EXPENSE
The Company's effective tax rates for first-quarter 1998 and 1997 were 36% and
39%, respectively. The effective tax rate for full-year 1997 was 37%. The
reduction in the Company's first-quarter 1998 effective tax rate is a result of
the favorable effect of our expanded operations in Europe, including the
favorable tax treatment granted to certain foreign operations under a tax
holiday expiring in the year 1999 and the Company's current expectations for
full year 1998 earnings.
CASH FLOW AND LIQUIDITY REVIEW
CAPITAL RESOURCES
Our sources of capital include, but are not limited to, the issuance of public
or private placement debt, bank borrowings, and the issuance of equity
securities. We believe that short-term and long-term capital resources available
to us are more than sufficient to fund our capital expenditure and working
capital requirements, scheduled debt payments, interest and income tax
obligations, dividends to our share owners, acquisitions, and plans for share
repurchases.
For long-term financing needs, we have available approximately $1.8 billion in
registered debt securities for issuance under a registration statement with the
Securities and Exchange Commission and an additional $1.3 billion in debt
securities under a program registered with the Luxembourg Stock Exchange.
We satisfy seasonal working capital needs and other financing requirements with
bank borrowings and short-term borrowings under our commercial paper program and
other credit facilities. At April 3, 1998, we had a total amount outstanding of
approximately $1,601 million under various short-term credit facilities, with an
additional $1,213 million available for future use. We intend to continue to
refinance borrowings under our commercial paper program and our short-term
credit facilities with longer-term fixed and floating rate financings. At the
end of first-quarter 1998, the Company's debt portfolio was 70% fixed rate debt
and 30% floating rate debt.
-15-
<PAGE> 18
SUMMARY OF CASH ACTIVITIES
Cash and cash investments decreased $29 million during first-quarter 1998 from
net cash transactions. Our primary uses of cash were for operations of
approximately $39 million, capital expenditures totaling $346 million, long-term
debt payments totaling $1,556 million, and acquisitions of bottling businesses
for a net cash cost of approximately $166 million. Our primary source of cash
for first-quarter 1998 was proceeds from the issuance of debt aggregating $2,175
million.
Operating Activities: Operating activities resulted in a net cash use of $39
million during first-quarter 1998. The higher depreciation expense in 1998
results from the effects of increased capital spending and the effects of the
1997 and 1998 acquisitions.
Investing Activities: Net cash used in investing activities results from the
Company's continued capital investments in its infrastructure and the
acquisitions of bottling operations. Capital expenditures increased 89% in
first-quarter 1998 over first-quarter 1997, primarily because of the capital
investments made by our international operations. The Company continues to
expect full-year 1998 capital expenditures to be approximately $1.1 billion,
excluding any effects from the current pending acquisition.
Financing Activities: The Company continues to refinance portions of its
short-term borrowings with longer-term fixed and floating rate debt. In
first-quarter 1998, the Company issued $916 million in notes and debentures. In
first-quarter 1998, $50 million was used to repurchase shares of the Company's
common stock.
FINANCIAL CONDITION
The increases in property, plant, and equipment results from capital
expenditures of approximately $346 million in first-quarter 1998 and the
Luxembourg acquisition. The increases in long-term debt is primarily a result of
the financing of our capital expenditures and funding of the share repurchase
program.
In first-quarter 1998 activities in currency markets resulted in a $20 million
adjustment to the Company's comprehensive income (loss). As currency exchange
rates fluctuate, translation of the statements of income for our international
businesses into U.S. dollars will affect the comparability of revenues and
expenses between periods.
-16-
<PAGE> 19
KNOWN TRENDS AND UNCERTAINTIES
YEAR 2000 COMPUTER CONVERSION
Companies are faced with the possibility that certain automated information
systems will not process data appropriately in transition from the year 1999 to
the year 2000 and beyond. This possibility impacts substantially all areas of
our business as well as our suppliers and customers, and may be further impacted
by any future acquisitions.
We have an ongoing information systems development plan with scheduled
replacements of various systems throughout the organization, resulting in Year
2000 compliant systems. We also have a multifunctional task force engaged to
identify and ensure all other Year 2000 compliance issues are corrected through
the deployment of current company resources.
Because Year 2000 compliance will result from our systems implementation plan
and the utilization of current Company resources, any incremental costs are not
projected to be significant to the Company. However, because of the numerous
uncertainties associated with Year 2000 compliance such as the effect on the
Company of noncompliance by third parties, we are unable to predict whether the
Year 2000 issue will ultimately have a material adverse impact on future
operating results or the financial condition of the Company.
UNITED KINGDOM TAX RATE CHANGE
Currently, the United Kingdom has proposed a reduction of the United Kingdom
income tax rate from 31% to 30%. The impact of this rate change, anticipated to
occur in third-quarter 1998, will be a reduction in deferred tax liabilities
associated with the Company's operations in the United Kingdom of approximately
$29 million or $0.07 per common share. The effect of this deferred tax liability
reduction will be shown as a credit in the income tax provision if and when
passed into law in the United Kingdom.
ACCOUNTING DEVELOPMENTS
The Financial Accounting Standards Board ("FASB") issued SFAS No. 130,
"Reporting Comprehensive Income", during June 1997. SFAS No. 130 is effective
for fiscal years beginning after December 15, 1997. This statement requires that
companies present disclosures of comprehensive income in the financial
statements or notes thereto. Comprehensive income includes both net income and
items of other comprehensive income such as currency translation adjustments.
The Company's adoption of SFAS No. 130 in first-quarter 1998 did not have a
material impact on the Company.
In February 1998 the FASB also issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits". SFAS No. 132 is effective for
fiscal years beginning after December 15, 1997, with early adoption allowed.
This statement revises the required disclosures for employee benefit plans, but
does not change the measurement or recognition of such plans. The adoption of
SFAS No. 132 does not have a material impact on the Company's financial
statements. Disclosures contained in the fiscal 1997 financial statements are
not impacted significantly by SFAS No. 132.
-17-
<PAGE> 20
CAUTIONARY STATEMENTS
Certain expectations and projections regarding future performance of the Company
referenced in this report are forward-looking statements involving risks and
uncertainties. These expectations and projections are based on currently
available competitive, financial, and economic data, along with the Company's
operating plans, and are subject to future events and uncertainties. Among the
events and uncertainties which could adversely affect 1998 results are
lower-than-expected net pricing resulting from increased marketplace
competition, an inability to meet performance requirements for expected levels
of marketing support payments from our franchise companies, material changes
from expectations in the cost of raw materials and ingredients, an inability to
achieve the expected timing for returns on cold drink equipment and employee
infrastructure expenditures, an inability to meet projections for performance in
newly acquired territories, unexpected costs associated with Year 2000
compliance, and unfavorable interest rate and currency fluctuations. We caution
readers that in addition to the above cautionary statements, all forward-looking
statements contained herein should be read in conjunction with the detailed
cautionary statements found on page 28 of the Company's Annual Report for the
fiscal year ended December 31, 1997.
-19-
<PAGE> 21
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
An administrative proceeding brought by the City of Tempe, Arizona concerning
wastewater discharges from the Company's Tempe facility has been settled by the
Company's payment of approximately $118,000 to the city. This proceeding was
reported in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
The Annual Meeting of share owners was held on Friday, April 17, 1998 in
Wilmington, Delaware at which the following matters were submitted to a vote of
the share owners of the Company:
(a) Votes cast for or withheld regarding the election/re-election of three
Directors for terms expiring in 2001:
FOR WITHHELD
----------- -----------
J. Trevor Eyton ...................... 354,764,942 2,432,554
L. Phillip Humann .................... 354,798,857 2,398,639
Scott L. Probasco, Jr. ............... 354,782,272 2,415,224
Additional Directors, whose terms of office as Directors continued after
the meeting, are as follows:
TERM EXPIRING IN 1999 TERM EXPIRING IN 2000
--------------------- ---------------------
John L. Clendenin Howard G. Buffett
Joseph R. Gladden, Jr. Johnnetta B. Cole
John E. Jacob Claus M. Halle
Summerfield K. Johnston, Jr. Jean-Claude Killy
Robert A. Keller Henry A. Schimberg
(b) Votes cast for or against, and the number of abstentions and broker
non-votes for each other proposal brought before the meeting are as
follows:
BROKER
PROPOSAL FOR AGAINST ABSTAIN NON-VOTES
- ------------------------ ----------- ----------- ----------- -----------
Approval of the
Long-Term Incentive
Plan ................. 334,196,165 4,575,136 725,107 17,701,088
Approval of the
Executive Management
Incentive Plan ....... 333,486,920 5,143,733 865,755 17,701,088
Ratification of the
Appointment of
Independent Auditors . 356,285,126 440,103 472,267 --
Share-owner's proposal
to create an
independent nominating
committee ............ 57,559,625 280,338,552 1,598,231 17,701,088
-20-
<PAGE> 22
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K):
Exhibit Incorporated by Reference
Number Description or Filed Herewith
- -------- -------------------------------------- ----------------------------
3 Bylaws of Coca-Cola Enterprises Inc. Exhibit 4.2 to the Company's
as amended through April 17, 1998 Registration Statement on
Form S-8, No. 333-51559
12 Statements regarding computations of Filed Herewith
ratios
27.1 Financial Data Schedule for the Filed Herewith
quarter ended April 3, 1998
27.2 Restated Financial Data Schedule for Filed Herewith
the interim year to date periods ended
March 28, June 27, and September 26,
1997
27.3 Restated Financial Data Schedule for Filed Herewith
the year ended December 31, 1996 and
the interim year to date periods ended
March 29, June 28, and September 27,
1996
27.4 Restated Financial Data Schedule for Filed Herewith
the year ended December 31, 1995
(b) Reports on Form 8-K:
During first-quarter 1998, the Company filed the following current reports on
Form 8-K:
Date of Report Description
- ---------------- -----------------------------------------------------------
January 5, 1998 Announcement of the Company's completion of the acquisition
of the balance of the capital stock of The Coca-Cola
Bottling Company of New York, Inc., filed January 20, 1998.
January 6, 1998 Terms agreement and form, filed January 15, 1998, of the
offer and sale of the 6.75% Debentures Due 2038.
January 20, 1998 Reporting fourth-quarter and full-year 1997 results of
operations and a summary of key financial results filed
January 30, 1998.
January 20, 1998 Announcement of the Company's intent to start repurchasing
shares under the previously authorized share repurchase
program, filed January 22, 1998.
-21-
<PAGE> 23
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, thereunto duly authorized.
COCA-COLA ENTERPRISES INC.
(Registrant)
Date: May 8, 1998 /s/ John R. Alm
------------------------------
John R. Alm
Executive Vice President and
Chief Financial Officer
Date: May 8, 1998 /s/ O. Michael Whigham
------------------------------
O. Michael Whigham
Vice President, Controller and
Principal Accounting Officer
-22-
<PAGE> 1
EXHIBIT 12
COCA-COLA ENTERPRISES INC.
EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(In millions except ratios)
QUARTER ENDED
---------------------------
APRIL 3, MARCH 28,
1998 1997
------------ ------------
Computation of Earnings:
Loss from continuing operations
before income taxes ........................ $(79) $(54)
Add:
Interest expense ........................... 174 104
Amortization of debt premium/discount and
expenses ................................. 7 6
Interest portion of rent expense ........... 6 5
---- ----
Earnings as Adjusted ........................... $108 $ 61
==== ====
Computation of Fixed Charges:
Interest expense ............................. $174 $104
Capitalized interest ......................... 1 --
Amortization of debt premium/discount and
expenses ................................... 7 6
Interest portion of rent expense ............. 6 5
---- ----
Fixed Charges .................................. 188 115
Preferred stock dividends(a) ................. -- 3
---- ----
Combined Fixed Charges and Preferred Stock
Dividends .................................... $188 $118
==== ====
Ratio of Earnings to Fixed Charges ............. (b) (c)
==== ====
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends .................... (b) (c)
==== ====
(a) Preferred stock dividends have been increased to an amount representing
the pretax earnings which would be required to cover such dividend
requirements.
(b) Earnings for April 3, 1998 were insufficient to cover fixed charges and
combined fixed charges and preferred stock dividends by $80 million.
(c) Earnings for March 28, 1997 were insufficient to cover fixed charges and
combined fixed charges and preferred stock dividends by $54 million and
$57 million, respectively.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS OF THE FILER FOR THE PERIOD ENDED APRIL 3, 1998
INCLUDED IN ITS QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED APRIL 3,
1998 (COMMISSION FILE NO. 001-9300) AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000804055
<NAME> COCA-COLA ENTERPRISES
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> APR-03-1998
<CASH> 16
<SECURITIES> 0
<RECEIVABLES> 1,179
<ALLOWANCES> 59
<INVENTORY> 533
<CURRENT-ASSETS> 1,965
<PP&E> 6,467
<DEPRECIATION> 2,433
<TOTAL-ASSETS> 17,811
<CURRENT-LIABILITIES> 2,916
<BONDS> 8,443
0
0
<COMMON> 444
<OTHER-SE> 1,231
<TOTAL-LIABILITY-AND-EQUITY> 17,811
<SALES> 2,958
<TOTAL-REVENUES> 2,958
<CGS> 1,876
<TOTAL-COSTS> 1,876
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 168
<INCOME-PRETAX> (79)
<INCOME-TAX> (28)
<INCOME-CONTINUING> (51)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (51)
<EPS-PRIMARY> (0.13)
<EPS-DILUTED> (0.13)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS RESTATED FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE FINANCIAL STATEMENTS OF THE FILER FOR THE PERIODS ENDED MARCH
28, JUNE 27, AND SEPTEMBER 26, 1997 INCLUDED IN ITS QUARTERLY REPORTS ON FORM
10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000804055
<NAME> COCA-COLA ENTERPRISES
<MULTIPLIER> 1,000,000
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997 DEC-31-1997
<PERIOD-START> JAN-01-1997 JAN-01-1997 JAN-01-1997
<PERIOD-END> MAR-28-1997 JUN-27-1997 SEP-26-1997
<CASH> 9 31 59
<SECURITIES> 0 0 0
<RECEIVABLES> 975 1,201 1,187
<ALLOWANCES> 47 49 59
<INVENTORY> 409 476 501
<CURRENT-ASSETS> 1,651 1,970 2,053
<PP&E> 5,170 5,360 5,890
<DEPRECIATION> 1,973 2,072 2,203
<TOTAL-ASSETS> 14,489 14,868 17,472
<CURRENT-LIABILITIES> 3,716 3,957 3,641
<BONDS> 5,123 5,129 7,108
0 0 0
115 0 0
<COMMON> 442 442 442
<OTHER-SE> 995 1,198 1,320
<TOTAL-LIABILITY-AND-EQUITY> 14,489 14,868 17,472
<SALES> 2,141 5,046 8,229
<TOTAL-REVENUES> 2,141 5,046 8,229
<CGS> 1,341 3,162 5,179
<TOTAL-COSTS> 1,341 3,162 5,179
<OTHER-EXPENSES> 5 6 6
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 107 234 377
<INCOME-PRETAX> (54) 128 212
<INCOME-TAX> (21) 50 22
<INCOME-CONTINUING> (33) 78 190
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> (33) 78 190
<EPS-PRIMARY> (0.09)<F1> 0.20<F1> 0.49<F1>
<EPS-DILUTED> (0.09)<F1> 0.20<F1> 0.48<F1>
<FN>
<F1>THE FINANCIAL DATA SCHEDULES FOR THE INTERIM YEAR TO DATE PERIODS ENDED MARCH
28, JUNE 27, AND SEPTEMBER 26, 1997 HAVE BEEN RESTATED TO REFLECT THE IMPACT OF
THE ADOPTION OF SFAS 128 "EARNINGS PER SHARE" EFFECTIVE FOR FULL-YEAR 1997 AND
SUBSEQUENT PERIODS.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS RESTATED FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE FINANCIAL STATEMENTS OF THE FILER FOR THE PERIODS ENDED MARCH
29, JUNE 28, SEPTEMBER 26, AND DECEMBER 31, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000804055
<NAME> COCA-COLA ENTERPRISES
<MULTIPLIER> 1,000,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996 DEC-31-1996 DEC-31-1996
<PERIOD-START> JAN-01-1996 JAN-01-1996 JAN-01-1996 JAN-01-1996
<PERIOD-END> MAR-29-1996 JUN-28-1996 SEP-27-1996 DEC-31-1996
<CASH> 16 24 26 47
<SECURITIES> 0 0 0 0
<RECEIVABLES> 537 641 772 713
<ALLOWANCES> 35 35 42 45
<INVENTORY> 274 306 374 317
<CURRENT-ASSETS> 1,026 1,185 1,424 1,319
<PP&E> 3,845 4,089 4,626 4,693
<DEPRECIATION> 1,657 1,736 1,812 1,881
<TOTAL-ASSETS> 9,578 9,856 11,377 11,234
<CURRENT-LIABILITIES> 943 1,159 2,081 1,690
<BONDS> 4,356 4,362 4,645 4,814
0 0 0 0
183 173 132 134
<COMMON> 145 147 147 147
<OTHER-SE> 1,147 1,148 1,248 1,269
<TOTAL-LIABILITY-AND-EQUITY> 9,578 9,856 11,377 11,234
<SALES> 1,600 3,616 5,803 7,921
<TOTAL-REVENUES> 1,600 3,616 5,803 7,921
<CGS> 970 2,223 3,586 4,896
<TOTAL-COSTS> 970 2,223 3,586 4,896
<OTHER-EXPENSES> 0 0 0 0
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 79 163 253 351
<INCOME-PRETAX> 12 113 179 194
<INCOME-TAX> 5 47 74 80
<INCOME-CONTINUING> 7 66 105 114
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 7 66 105 114
<EPS-PRIMARY> 0.01<F1> 0.17<F1> 0.26<F1> 0.28<F1>
<EPS-DILUTED> 0.01<F1> 0.16<F1> 0.26<F1> 0.28<F1>
<FN>
<F1>THE FINANCIAL DATA SCHEDULES FOR THE YEAR ENDED DECEMBER 31, 1996 AND FOR THE
INTERIM YEAR TO DATE PERIODS ENDED SEPTEMBER 27, JUNE 28, AND MARCH 29, 1996
HAVE BEEN RESTATED TO REFLECT THE IMPACT OF A 3-FOR-1 STOCK SPLIT EFFECTIVE FOR
SHARE OWNERS OF RECORD ON MAY 1, 1997 AND FOR THE ADOPTION OF SFAS 128
"EARNINGS PER SHARE" EFFECTIVE FOR FULL-YEAR 1997 AND SUBSEQUENT PERIODS.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS RESTATED FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE FINANCIAL STATEMENTS OF THE FILER FOR THE YEAR ENDED DECEMBER
31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000804055
<NAME> COCA-COLA ENTERPRISES
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 8
<SECURITIES> 0
<RECEIVABLES> 549
<ALLOWANCES> 33
<INVENTORY> 225
<CURRENT-ASSETS> 982
<PP&E> 3,745
<DEPRECIATION> 1,587
<TOTAL-ASSETS> 9,064
<CURRENT-LIABILITIES> 859
<BONDS> 4,138
0
30
<COMMON> 145
<OTHER-SE> 1,260
<TOTAL-LIABILITY-AND-EQUITY> 9,064
<SALES> 6,773
<TOTAL-REVENUES> 6,773
<CGS> 4,267
<TOTAL-COSTS> 4,267
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 326
<INCOME-PRETAX> 145
<INCOME-TAX> 63
<INCOME-CONTINUING> 82
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 82
<EPS-PRIMARY> 0.21<F1>
<EPS-DILUTED> 0.20<F1>
<FN>
<F1>THE FINANCIAL DATA SCHEDULE FOR THE YEAR ENDED DECEMBER 31, 1995 HAS BEEN
RESTATED TO REFLECT THE IMPACT OF A 3-FOR-1 STOCK SPLIT EFFECTIVE FOR SHARE
OWNERS OF RECORD ON MAY 1, 1997 AND FOR THE ADOPTION OF SFAS 128 "EARNINGS PER
SHARE" EFFECTIVE FOR FULL-YEAR 1997 AND SUBSEQUENT PERIODS.
</FN>
</TABLE>
