EX-99 2 ex990424.htm NEWS RELEASE ex990424.htm
EXHIBIT 99



CONTACT:     Thor Erickson – Investor Relations
            (770) 989-3110
 
            Laura Brightwell – Media Relations
            (770) 989-3023

FOR IMMEDIATE RELEASE

COCA-COLA ENTERPRISES INC.
REPORTS FIRST-QUARTER 2008 RESULTS

·  
CCE reports EPS of 2 cents; excluding the impact of restructuring
 costs and other items affecting comparability, EPS was 8 cents, one cent below prior year.

·  
Soft economic conditions in North America limit first quarter performance;
Europe continues to generate improving results driven by volume growth of 7 percent.

·  
CCE refines 2008 guidance and now expects full-year EPS in a range of $1.50 to $1.55,
excluding items affecting comparability and including expected currency impact.


ATLANTA, April 24, 2008 -- Coca-Cola Enterprises (NYSE: CCE) today reported first-quarter 2008 net income of $8 million, or 2 cents per diluted share.  After adjusting for items affecting comparability, including restructuring charges, net income totaled $38 million, or 8 cents per diluted share. The following table reconciles reported and comparable earnings per share:

 
   
First Quarter
  
   
2008
    
2007
  
Reported (GAAP)
   $
0.02
     $
0.03
  
Restructuring Charges
    
0.04
      
0.04
  
Loss on Equity Securities
    
-
      
0.02
  
Net Tax Items
    
0.02
      
-
  
Comparable Diluted Net Earnings Per Share(a)
   $
0.08
     $
0.09
  
(a) This non-GAAP financial information is provided to allow investors to more clearly evaluate operating performance and
business trends. Management uses this information to review results excluding items that are not necessarily indicative
of ongoing results.
  

 

Page 2 of 10


 Key operating factors in the first quarter include softer than expected volume in North American single-serve packages, particularly in sparkling beverages and Dasani, continued European operating improvement, and the benefits of restructuring programs and operating expense initiatives.

As a result of these factors, total revenues grew 7 percent as consolidated comparable volume was up 1½ percent with currency-neutral pricing growth of 4 percent. Consolidated comparable operating income decreased 10½ percent, while on a segment basis, comparable North American operating income declined approximately 32 percent and comparable European operating income rose 31 percent. Comparable EPS results reflect a benefit from currency translation of approximately 1 cent.  Pages 8 through 10 of this release provide a reconciliation of reported and comparable operating results.

“While weakness in North America’s economic environment tempered our first quarter results, we remain focused on executing against our three strategic objectives, ensuring the continued success of our restructuring programs, and controlling our operating expenses,” said John F. Brock, chairman and chief executive officer. “We continue to believe that our operating and brand initiatives, coupled with the outstanding marketplace execution generated by our skilled, dedicated work force, will create increasing levels of growth.”

In the first quarter, North American physical case bottle and can volume was flat while net pricing per case was up 4½ percent, and cost of sales per case grew 9 percent.  These results reflect the mix impact of the expanded still beverage portfolio.  Pricing and cost of sales growth statistics are comparable and exclude the effects of currency translation.

Page 3 of 10


Europe achieved strong volume growth of 7 percent, including 11 percent in Great Britain and 4 percent on the continent, reflecting sales growth in sparkling and still beverages. Net pricing per case grew 1 percent.

 “We believe positive topline trends in Europe, coupled with the improvement generated by North American operating and brand initiatives, will enable us to achieve solid earnings growth,” Mr. Brock said. “As we work to achieve this target, it is important that we respond to the marketplace challenges created by the current North American economic environment. We are working quickly and aggressively with The Coca-Cola Company on specific strategies that will strengthen our ability to deliver against our objectives.”

Full-Year 2008 Outlook

 For the full year, CCE expects EPS performance in a range of $1.50 to $1.55. The company also expects return on invested capital to improve in line with the long-term goal of 30 basis points or more of annual improvement, strong free cash flow (cash flow from operations less capital spending, net of asset disposal) of more than $700 million, and capital expenditures of approximately $1 billion.  The effective tax rate for 2008 is expected to be approximately 28 percent.  Guidance excludes items affecting comparability and includes expected currency translation impact.

Conference Call with Investors

CCE will host a conference call with analysts and investors today at 9:30 a.m. ET. The call can be accessed through the company’s website at www.cokecce.com.


Page 4 of 10

Coca-Cola Enterprises is the world's largest marketer, distributor and producer of bottle and can liquid nonalcoholic refreshment. CCE sells approximately 80 percent of The Coca-Cola Company's bottle and can volume in North America and is the sole licensed bottler for products of The Coca-Cola Company in Belgium, continental France, Great Britain, Luxembourg, Monaco, and the Netherlands.

Forward-Looking Statements

Included in this news release are forward-looking management comments and other statements that reflect management’s current outlook for future periods. As always, these expectations are based on the currently available competitive, financial, and economic data along with our operating plans and are subject to future events and uncertainties. The forward-looking statements in this news release should be read in conjunction with the risks and uncertainties statements found under Item 1A of Part I in our 2007 Form 10-K.

# # #


Page 5 of 10


COCA-COLA ENTERPRISES INC.      
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS      
(Unaudited; In Millions, Except Per Share Data)      

   
First Quarter       
   
2008(a)
    
2007(b)
    
Change 
Net Operating Revenues
   $
4,892
     $
4,567
       7 %
Cost of Sales
    
3,108
      
2,815
       10½ %
Gross Profit
    
1,784
      
1,752
       2 %
Selling, Delivery, and Administrative Expenses
    
1,621
      
1,561
       4 %
Operating Income
    
163
      
191
          
Interest Expense, Net
    
142
      
156
          
Other Nonoperating Expense, Net
    
1
      
14
          
Income Before Income Taxes
    
20
      
21
          
Income Tax Expense
    
12
      
6
          
Net Income
   $
8
     $
15
          
Basic Weighted Average Common Shares Outstanding
    
485
      
478
          
Basic Net Earnings Per Share(c)
   $
0.02
     $
0.03
          
Diluted Weighted Average Common Shares Outstanding
    
493
      
483
          
Diluted Net Earnings Per Share(c)
   $
0.02
     $
0.03
          
                         

 
(a)  First-quarter 2008 net income includes net unfavorable items totaling $30 million, or 6 cents per diluted common share.
       See page 8 of this earnings release for a list of these items.
 
(b)  First-quarter 2007 net income includes net unfavorable items totaling $28 million, or 6 cents per diluted common share.
       See page 8 of this earnings release for a list of these items.
 
(c)  Per share data calculated prior to rounding to millions.

Page 6 of 10

 
COCA-COLA ENTERPRISES INC.    
CONDENSED CONSOLIDATED BALANCE SHEETS    
(Unaudited; In Millions)    
   
March 28,
    
December 31,
  
   
2008
    
2007
  
ASSETS
            
Current:
            
     Cash and cash equivalents
   $
60
     $
170
  
     Trade accounts receivable, net
    
2,549
      
2,217
  
     Amounts receivable from The Coca-Cola Company
    
166
      
144
  
     Inventories
    
1,098
      
924
  
     Current deferred income tax assets
    
183
      
206
  
     Prepaid expenses and other current assets
    
438
      
431
  
          Total Current Assets
    
4,494
      
4,092
  
Property, plant, and equipment, net
    
6,752
      
6,762
  
Goodwill
    
604
      
606
  
Franchise license intangible assets, net
    
11,852
      
11,767
  
Customer distribution rights and other
                
noncurrent assets, net
    
847
      
819
  
    $
24,549
     $
24,046
  
LIABILITIES AND SHAREOWNERS’ EQUITY
                
Current:
                
     Accounts payable and accrued expenses
   $
2,997
     $
2,924
  
     Amounts payable to The Coca-Cola Company
    
482
      
369
  
     Deferred cash receipts from The Coca-Cola Company
    
46
      
48
  
     Current portion of debt
    
2,406
      
2,002
  
          Total Current Liabilities
    
5,931
      
5,343
  
Debt, less current portion
    
7,288
      
7,391
  
Retirement and insurance programs and
                
    other long-term obligations
    
1,354
      
1,309
  
Deferred cash receipts from The Coca-Cola Company,
                
    less current
    
112
      
124
  
Long-term deferred income tax liabilities
    
4,154
      
4,190
  
Shareowners’ equity
    
5,710
      
5,689
  
    $
24,549
     $
24,046
  
 



Page 7 of 10
 
 

COCA-COLA ENTERPRISES INC.    
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS    
(Unaudited; In Millions)   
  

   
Three Months Ended
  
   
March 28,
    
March 30,
  
   
2008
    
2007
  
Cash Flows From Operating Activities
            
Net income
   $
8
     $
15
  
Adjustments to reconcile net income to net cash used in operating activities:
                
Depreciation and amortization
    
256
      
262
  
Loss on equity securities
    
-
      
14
  
Net change in customer distribution rights
    
6
      
3
  
Share-based compensation expense
    
14
      
12
  
Deferred funding income from The Coca-Cola Company, net of cash received
     (14 )     (13 )
Deferred income tax expense
    
17
      
3
  
Pension and other postretirement expense less than contributions
     (52 )     (72 )
Net changes in assets and liabilites, net of acquisition amounts
     (298 )     (291 )
Net cash used in operating activities
     (63 )     (67 )
Cash Flows From Investing Activities
                
   Capital asset investments
     (233 )     (207 )
   Capital asset disposals
    
3
      
17
  
   Other investing activities
     (5 )     (3 )
Net cash used in investing activities
     (235 )     (193 )
Cash Flows From Financing Activities
                
Increase in commercial paper, net
    
498
      
506
  
Issuances of debt
    
104
      
112
  
Payments on debt
     (395 )     (421 )
Dividend payments on common stock
     (34 )     (29 )
Exercise of employee share options
    
14
      
11
  
Other financing activities
    
1
      
6
  
Net cash derived from financing activities
    
188
      
185
  
Net effect of exchange rate changes on cash and cash equivalents
    
-
      
1
  
Net Change In Cash and Cash Equivalents
     (110 )     (74 )
Cash and Cash Equivalents at Beginning of Period
    
170
      
184
  
Cash and Cash Equivalents at End of Period
   $
60
     $
110
  

Page 8 of 10


 
COCA-COLA ENTERPRISES INC.     
RECONCILIATION OF GAAP TO NON-GAAP     
(Unaudited; In millions, except per share data which is calculated prior to rounding) 

 
Reconciliation of Income(a)
  
First-Quarter 2008  
  
         
Items Impacting Comparability
        
   
Reported
 (GAAP)
    
Restructuring
 Charges
    
Loss on Equity
Securities
    
Net Tax Items
    
Comparable
(non-GAAP)
  
Net Operating Revenues
   $
4,892
     $
-
     $
-
     $
-
     $
4,892
  
Cost of Sales
    
3,108
      
-
      
-
      
-
      
3,108
  
Gross Profit
    
1,784
      
-
      
-
      
-
      
1,784
  
Selling, Delivery, and Administrative Expenses
    
1,621
       (31 )    
-
      
-
      
1,590
  
Operating Income
    
163
      
31
      
-
      
-
      
194
  
Interest Expense, Net
    
142
      
-
      
-
      
-
      
142
  
Other Nonoperating Expense, Net
    
1
      
-
      
-
      
-
      
1
  
Income Before Income Taxes
    
20
      
31
      
-
      
-
      
51
  
Income Tax Expense
    
12
      
9
      
-
       (8 )    
13
  
Net Income
   $
8
     $
22
     $
-
     $
8
     $
38
  
Diluted Net Earnings Per Share
   $
0.02
     $
0.04
     $
-
     $
0.02
     $
0.08
  
 

Reconciliation of Income(a)
  
First-Quarter 2007  
  
         
Items Impacting Comparability
        
   
Reported
(GAAP)
    
Restructuring
Charges
    
Loss on Equity
 Securities
    
Net Tax Items
    
Comparable
 (non-GAAP)
  
Net Operating Revenues
   $
4,567
     $
-
     $
-
     $
-
     $
4,567
  
Cost of Sales
    
2,815
      
-
      
-
      
-
      
2,815
  
Gross Profit
    
1,752
      
-
      
-
      
-
      
1,752
  
Selling, Delivery, and Administrative Expenses
    
1,561
       (26 )    
-
      
-
      
1,535
  
Operating Income
    
191
      
26
      
-
      
-
      
217
  
Interest Expense, Net
    
156
      
-
      
-
      
-
      
156
  
Other Nonoperating Expense, Net
    
14
      
-
       (14 )    
-
      
-
  
Income Before Income Taxes
    
21
      
26
       14      
-
      
61
  
Income Tax Expense
    
6
      
8
      
4
      
-
      
18
  
Net Income
   $
15
     $
18
     $ 10     $
-
     $
43
  
Diluted Net Earnings Per Share
   $
0.03
     $
0.04
     $
0.02
     $
-
     $
0.09
  


(a)  These non-GAAP measures are provided to allow investors to more clearly evaluate our operating performance and business trends.
       Management uses this information to review results excluding items that are not necessarily indicative of our ongoing results.

Page 9 of 10



 
COCA-COLA ENTERPRISES INC.     
RECONCILIATION OF GAAP TO NON-GAAP     
(Unaudited; In millions, except per share data which is calculated prior to rounding) 
 

   
First-Quarter 2008
  
         
Items Impacting
Comparability
        
Reconciliation of Segment Income(a)
  
Reported (GAAP)
    
Restructuring
Charges
    
Comparable
(non-GAAP)
  
     North America
   $
106
     $
26
     $
132
  
     Europe
    
171
      
2
      
173
  
     Corporate
     (114 )    
3
       (111 )
Operating Income
   $
163
     $
31
     $
194
  
 

   
First-Quarter 2007
  
         
Items Impacting
 Comparability
        
Reconciliation of Segment Income(a)
  
Reported (GAAP)
    
Restructuring
 Charges
     Comparable
 (non-GAAP)
  
     North America
   $
173
     $
22
     $
195
  
     Europe
    
131
      
1
      
132
  
     Corporate
     (113 )    
3
       (110 )
Operating Income
   $
191
     $
26
     $
217
  


Segment Revenue
  First Quarter     
   
2008
    
2007
  
North America
   $
3,353
     $
3,237
  
Europe
    
1,539
      
1,330
  
Net Operating Revenues
   $
4,892
     $
4,567
  

(a)  These non-GAAP measures are provided to allow investors to more clearly evaluate our operating performance and
       business trends.  Management uses this information to review results excluding items that are not necessarily
       indicative of our ongoing results.

Page 10 of 10


     
First-Quarter 2008 Change Versus
First-Quarter 2007
     
North America
Europe
Consolidated
Net Revenues Per Case
        
Change in Net Revenues per Case
5.0 %
  
10.0 %
7.0 %
 
Impact of Customer Marketing and Other
        
 
 Promotional Adjustments
(0.5)%
  
0.0 %
(0.5)%
 
Impact of Post Mix, Non-Trade, and Other
1.0 %
  
0.0 %
1.0 %
Bottle and Can Net Pricing Per Case(a)
5.5 %
  
10.0 %
7.5 %
 
Impact of Currency Exchange Rate Changes
(1.0)%
  
(9.0)%
(3.5)%
Currency-Neutral Bottle and Can
        
   Net Pricing per Case(b)
4.5 %
  
1.0 %
4.0 %
             
Cost of Sales Per Case
        
Change in Cost of Sales per Case
9.0 %
  
11.5 %
10.0 %
 
Impact of Excluding Post Mix, Non-Trade and Other
1.5 %
  
0.0 %
1.0 %
Bottle and Can Cost of Sales Per Case(c)
10.5 %
  
11.5 %
11.0 %
 
Impact of Currency Exchange Rate Changes
(1.5)%
  
(9.5)%
(4.0)%
Currency-Neutral Bottle and Can
        
   Cost of Sales per Case(b)
9.0 %
  
2.0 %
7.0 %
             
Physical Case Bottle and Can Volume
        
Change in Volume
(1.5)%
  
5.5 %
0.0 %
 
Impact of Selling Day Shift
1.5 %
  
1.5 %
1.5 %
Comparable Bottle and Can Volume(d)
0.0 %
  
7.0 %
1.5 %
 
   
First Quarter   
    
Reconciliation of Free Cash Flow(e)
  
2008
    
2007
  
Full-Year 2008
Forecast
Net Cash From Operating Activities
   $ (63 )   $ (67 )
 $ 1,700   (Approx.)
Less: Capital Asset Investments
     (233 )     (207 )
  (1,025) (Approx.)
Add: Capital Asset Disposals
    
3
      
17
  
   25   (Approx.)
Free Cash Flow
   $ (293 )   $ (257 )
$    700   (Approx.)
 
   
March 28,
    
December 31,
  
Reconciliation of Net Debt(f)
  
2008
    
2007
  
Current Portion of Debt
   $
2,406
     $
2,002
  
Debt, Less Current Portion
    
7,288
      
7,391
  
Less: Cash and Cash Equivalents
     (60 )     (170 )
Net Debt
   $
9,634
     $
9,223
  
 
(a)
The non-GAAP financial measure "Bottle and Can Net Pricing per Case" is used to more clearly evaluate bottle and can pricing trends in the
 
marketplace.  The measure excludes the impact of fountain gallon volume and other items that are not directly associated with bottle and can
 
pricing in the retail environment.  Our bottle and can sales accounted for approximately 91 percent of our net revenue during the first quarter
 
of 2008.
   
(b)
The non-GAAP financial measures "Currency-Neutral Bottle and Can Net Pricing per Case" and "Currency-Neutral Bottle and Can Cost of
 
Sales per Case" are used to separate the impact of currency exchange rate changes on our operations.
   
(c)
The non-GAAP financial measure "Bottle and Can Cost of Sales per Case" is used to more clearly evaluate cost trends for bottle and can
 
products.  The measure excludes the impact of fountain ingredient costs as well as marketing credits and Jumpstart funding, and allows
 
investors to gain an understanding of the change in bottle and can ingredient and packaging costs.
   
(d)
"Comparable Bottle and Can Volume" excludes the impact of changes in the number of selling days between periods.  The measure is used
 
to analyze the performance of our business on a constant period basis. There was one less selling day in the first quarter of 2008 versus the
 
first quarter of 2007.
   
(e)
The non-GAAP measure "Free Cash Flow" is provided to focus management and investors on the cash available for debt reduction,  dividend
 
distributions, share repurchase, and acquisition opportunities.
   
(f)
The non-GAAP measure "Net Debt" is used to more clearly evaluate our capital structure and leverage.