-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SZLC6ucUwFgJ+ITXr0ioXXGBV6BK/zgC+sUSFoSN2cBmGToKVSxBb3n30EsA+MS8 juuKlOKftJZ9UDu7lCJm2g== 0000950157-00-000207.txt : 20000516 0000950157-00-000207.hdr.sgml : 20000516 ACCESSION NUMBER: 0000950157-00-000207 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PANAMERICAN BEVERAGES INC CENTRAL INDEX KEY: 0000911360 STANDARD INDUSTRIAL CLASSIFICATION: BOTTLED & CANNED SOFT DRINKS CARBONATED WATERS [2086] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12290 FILM NUMBER: 635149 BUSINESS ADDRESS: STREET 1: BLVD MANUEL AVILA CAMACHO NO. 44 22ND FL STREET 2: COL. LOMAS DE CHAPULTEPEC CITY: DEL. MIGUEL HIDALGO STATE: O5 ZIP: 00000 BUSINESS PHONE: 5252016300 MAIL ADDRESS: STREET 1: BLVD MANUEL AVIAL CAMACHO NO 40 22ND FL STREET 2: COL LOMAS DE CHAPULTEPEC DEL MIGUEL MIDA CITY: MEXICO D F ZIP: 11000 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10 - Q X Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act - -- of 1934 For the quarterly period ended March 31, 2000 __ Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission file number 1-12290 PANAMERICAN BEVERAGES, INC. Republic of Panama Not Applicable (State or other jurisdiction of (IRS Employer incorporation or organization) identification no.) c/o Panamco L.L.C. 701 Waterford Way Suite 800 Miami, Florida 33126 ------------------------------------------------- (Address of principal executive offices) (Zip Code) (305) 856-7100 ------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports require to be failed by section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding twelve months, 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, as of the latest practicable date Class A Common Stock: 119,880,006 Class B Common Stock: 8,971,431 Class C Preferred Stock: 2 Table of Contents Page PART I FINANCIAL INFORMATION Item 1.FINANCIAL STATEMENTS: Condensed Consolidated Balance Sheets (unaudited) as of December 31, 1999 and March 31, 2000............................1 Condensed Consolidated Statements of Operations (unaudited) for the three-month periods ended March 31, 1999 and 2000...............................................2 Condensed Consolidated Statements of Cash Flows (unaudited) for the three-month periods ended March 31, 1999 and 2000...............................................3 Notes to Condensed Consolidated Financial Statements (unaudited)................................................4 PANAMCO MEXICO -- Selected Statements of Operations Data (unaudited) for the three-month periods ended March 31, 1999 and 2000..............................................11 PANAMCO BRASIL -- Selected Statements of Operations Data (unaudited) for the three-month periods ended March 31, 1999 and 2000........................................12 PANAMCO COLOMBIA -- Selected Statements of Operations Data (unaudited) for the three-month periods ended March 31, 1999 and 2000........................................13 PANAMCO VENEZUELA -- Selected Statements of Operations Data (unaudited) for the three-month periods ended March 31, 1999 and 2000........................................14 PANAMCO CENTRAL AMERICA -- Selected Statements of Operations Data (unaudited) for the three-month periods ended March 31, 1999 and 2000..............................................15 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..................................16 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK..........................................................24 PART II OTHER INFORMATION...................................................24 Item 1. Legal Proceedings...................................................24 Item 2. Change in Securities and Use of Proceeds............................24 Item 3. Defaults upon Senior Securities.....................................25 Item 4. Submission of Matters to a Vote of Security Holders.................25 Item 5. Other Information...................................................25 Item 6. Exhibits and Reports on Form 8-K....................................25 Signatures..................................................................26 PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Stated in thousands of U.S. dollars) (Unaudited) December 31, March 31, ASSETS 1999 2000 ----------- ---------- Current assets: Cash and equivalents $ 152,648 $ 154,767 Accounts receivable, net 133,776 125,188 Inventories, net 122,978 106,640 Other 17,648 19,603 ----------- ----------- Total current assets 427,050 406,198 Investments 215,129 219,555 Property, plant, and equipment, net 1,218,383 1,206,578 Bottles and cases, net 310,856 295,063 Goodwill, net 1,292,414 1,286,930 Other assets, net 149,290 153,773 ----------- ----------- $ 3,613,122 $ 3,568,097 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Bank loans $ 33,529 $ 28,907 Current portion of long-term debt 64,640 65,051 Accounts payable 152,230 154,762 Other current liabilities 130,103 167,533 ----------- ----------- Total current liabilities 380,502 416,253 Long-term liabilities: Long-term debt 1,249,972 1,250,253 Other long-term liabilities 202,778 204,246 ----------- ----------- Total long-term liabilities 1,452,750 1,454,499 Minority interest in consolidated subsidiaries 27,974 27,475 Shareholders' equity: Capital 1,480 1,480 Capital in excess of par value 1,584,787 1,585,113 Retained earnings 616,778 506,967 Accumulated other comprehensive loss (393,850) (354,716) ----------- ----------- 1,809,195 1,738,844 Less shares held in treasury, at cost 57,299 68,974 ----------- ----------- Total shareholders' equity 1,751,896 1,669,870 $ 3,613,122 $ 3,568,097 ============ ============ The accompanying notes are an integral part of these condensed consolidated unaudited statements. -1- PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Stated in thousands of U.S. dollars, except per share amounts) (Unaudited) Three months ended March 31, ------------------------------ 1999 2000 ------------ ------------ Net sales $ 562,982 $ 608,181 Cost of sales, excluding depreciation and amortization 282,381 298,421 ------------ ------------ Gross profit 280,601 309,760 Operating expenses: Selling, general and administrative 197,026 207,440 Depreciation and amortization, excluding goodwill 53,719 56,726 Amortization of goodwill 9,009 9,104 Facilities reorganization charges 7,174 79,878 ------------ ------------ 266,928 353,148 Operating income (loss) 13,673 (43,388) Interest expense, net (23,155) (29,371) Other expense, net (24,583) (8,249) ------------ ------------ Loss before income taxes (34,065) (81,008) Income taxes (benefit) 5,449 (9,255) ------------ ------------ Loss before minority interest (39,514) (71,753) Minority interest in earnings (losses) of subsidiaries 568 (251) ------------ ------------ Net loss $ (40,082) $ (71,502) ============ ============ Cash operating profit $ 76,401 $ 61,974 ============ ============ Basic loss per share $ (0.31) $ (0.55) ============ ============ Basic weighted average shares outstanding, in thousands 129,651 129,142 ============ ============ Diluted loss per share $ (0.31) $ (0.55) ============ ============ Diluted weighted average shares outstanding, in thousands 129,651 129,142 ============ ============ The accompanying notes are an integral part of these condensed consolidated unaudited statements. -2- PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Stated in thousands of U.S. dollars) (Unaudited) Three months ended March 31, ------------------------------ 1999 2000 -------------- ------------ Net cash provided by operating activities $ 50,928 $ 75,300 Cash flows from investing activities: Capital expenditures (62,124) (39,246) Purchases of bottles and cases, net (16,037) (12,083) Purchases of investments (154,027) (4,000) Proceeds from sale of investments (6) - Proceeds from sale of property, plant and equipment 7,042 10,193 Other 24,216 (257) Net cash used in investing activities (200,936) (45,393) Cash flows from financing activities: Payment of bank loans and other (209,462) (9,730) Proceeds from bank loans, other and other long-term Borrowings 490,496 6,319 Issuance of capital stock 224 412 Acquisition of capital stock - (11,761) Payment of dividends to minority interest (230) (235) Payment of dividends to shareholders (7,549) (7,730) Other 1,762 ----------- ---------- Net cash provided by (used in) financing activities 273,479 (20,963) Effect of exchange rate changes on cash (1,801) (6,825) Net increase in cash and equivalents 121,670 2,119 Cash and equivalents at beginning of year 131,152 152,648 ----------- ---------- Cash and equivalents at end of year $ 252,822 $ 154,767 =========== ========== Supplemental cash flow disclosures: Cash paid during the year for-- Interest $ 22,746 $ 36,104 =========== ========== Income taxes $ 9,193 $ 8,906 =========== ========== The accompanying notes are an integral part of these condensed consolidated unaudited statements. -3- PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in thousands of U. S. dollars) (Unaudited) (1) Basis of presentation The unaudited condensed consolidated financial statements as of March 31, 1999 and 2000 included herein have been prepared by Panamerican Beverages, Inc. (the "Company"), in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC"). In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments, which are of a normal recurring nature, necessary to present fairly the Company's financial position as of March 31, 2000, and the results of operations for the three-month periods ended March 31,1999 and 2000. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the SEC. These unaudited financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company's Annual Report on Form 20-F filed with the SEC on May 15, 2000. The Company has made no significant changes in accounting policies from those reflected in the financial statements included in the Annual Report on Form 20-F. The financial statements of the Colombian and Venezuelan subsidiaries for all periods have been remeasured into U.S. dollars, the reporting and functional currency, in accordance with Statement of Financial Accounting Standards (SFAS) No. 52, "Foreign Currency Translation", as it applies to highly inflationary economies. The functional currencies of the Mexican, Brazilian, Costa Rican, Nicaraguan and Guatemalan subsidiaries is the Mexican peso, Brazilian real, Costa Rican colon, Nicaraguan cordova and Guatemalan quetzal, respectively, for the 1999 and 2000 periods. The financial statements of the Mexican, Brazilian, Costa Rican, Nicaraguan and Guatemalan subsidiaries for the 1999 and 2000 periods have been translated using the current rate translation method and the resulting translation adjustments are included in accumulated other comprehensive income, which is as a component of shareholders' equity. Foreign currency translation gains (losses) on monetary assets and liabilities for the Colombian and Venezuelan subsidiaries have been included in the statements of operations accounts to which such items relate as shown below: -4- PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in thousands of U. S. dollars) (Unaudited) Three Months Ended March 31, ----------------------------------- 1999 2000 -------------- --------------- Net sales $ (532) $ (310) Cost of sales and Operating expenses 2,550 1,216 Interest and other Income 440 (573) Provision for income taxes 426 291 Net translation gain 2,884 $ 624 (2) New accounting standards In September 1998, the Financial Accounting Standards Board (FASB) issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". This statement will be effective beginning January 1, 2001. The Company does not believe the adoption of this standard, which will be implemented in the first quarter of 2001, will have a material effect on its financial position or results of operations. (3) Reorganization program During the quarter ended March 31, 2000, the Company implemented a reorganization program. As a result of this reorganization program, the Company recorded the following items in the statement of operations: Facilities reorganization charges.- During the quarter ended March 31, 2000, the Company recorded $79,878 of charges primarily as a result of the write-off of non-cash items of property, plant and equipment and obsolete bottles and cases amounting to $39,533, and $40,345 of cash items relating primarily to severance payments, job terminations and reorganization of the distribution system of the Venezuelan and Brazilian subsidiaries. During the quarter ended March 31, 1999, the Company recorded $7,174 of cash items related to severance payments and job terminations. These amounts have been recorded as facilities reorganization charges. -5- PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in thousands of U. S. dollars) (Unaudited) Non-operating expenses.- During the first quarter 2000, the Compnay recorded $5,387 of charges related to the diposal of non-operating assets, including land of some of the operating plants, which are presented as part of other expenses, net. As a result of the facilities reorganization chages and the reorganization expenses, the Company recorded a tax benefit of $23,405. The following table shows a summary of the charges and benefits recorded in the statements of operations: Cash Non-cash Total ---- -------- ----- Restructuring charges $ 39,810 $ 19,590 $ 59,400 Assets write-offs 535 19,943 20,478 --------- --------- --------- 40,345 39,533 79,878 Non-operating charges - 5,387 5,387 --------- --------- --------- $ 40, 345 $ 44,920 85,265 ========= ========= Income tax benefit 23,405 --------- $ 61,860 ========= The following table shows the status of the balance of the reorganization allowance at March 31, 2000 included as part of other current liabilities:
=======Applications======= ======Charges====== Balance at Write off Balance at December 31, Cash Non-cash recorded in Severance March 31, 1999 fixed assets Payments Assets sold 2000 Write-off of fixed assets $ - $ 1,411 $ 39,533 $ 20,478 $ - $ 6,112 $ 14,354 Job termination and severance benefits - 31,902 - - 12,090 - 19,812 Other - 7,032 - - - - 7,032 ------- -------- -------- -------- -------- ------- -------- Total $ - $ 40,345 $ 39,533 $ 20,478 $ 12,090 $ 6,112 $ 41,198 ======= ======== ======== ======== ======== ======= ========
(4) Inventories, net December 31, March 31, 1999 2000 ------------- ---------- Bottled beverages and coolers $ 32,683 $ 26,756 Raw materials 49,341 40,241 Spare parts and supplies 45,018 44,484 ------------ ---------- 127,042 111,481 Less - Allowance for obsolete and slow-moving items 4,064 4,841 ------------ ---------- $ 122,978 $ 106,640 ============ ========== -6- PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in thousands of U. S. dollars) (Unaudited) (5) Property, plant, equipment, bottles and cases, net December 31, March 31, 1999 2000 ---------------- ---------- Property, plant and equipment $ 2,034,622 $ 2,038,630 Less - Accumulated depreciation 816,239 832,052 ------------ ------------- 1,218,383 1,206,578 Bottles and cases, net 310,856 295,063 ------------ ------------- $ 1,529,239 $ 1,501,641 ============ ============= (6) Transactions with related parties For the three months ended March 31, 2000, the Company carried out transactions with related parties. A summary of balances as of December, 31 1999 and March 31, 2000 and transactions for the three months ended March 31, 1999 and 2000 with related parties is as follows: December 31, March 31, 1999 2000 ------------- ---------- Accounts receivable: Subsidiaries of Coca-Cola $ 9,991 $ 5,926 Subsidiaries of Kaiser 3,488 366 ---------- ---------- $ 13,479 $ 6,292 ========== ========== Accounts payable: Subsidiaries of Coca-Cola $ 48,946 $ 40,065 Productos de Vidrio, S.A. 6,630 - Central Azucarero Portuguesa, C.A. 1,628 - Tapon Corona de Colombia, S.A. 1,936 707 Comptec, S.A. 976 686 ---------- ---------- $ 60,116 $ 41,458 ========== ========== -7- PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in thousands of U. S. dollars) (Unaudited) Three Months Ended March 31, ------------------------------ 1999 2000 ---- ----- Income: Marketing expense support $ 9,528 $ 10,156 Other 824 768 ---------- ---------- $ 10,352 $ 10,924 ========== ========== Expenses: Purchase of concentrate $ 65,113 $ 64,932 Purchase of beer 23,262 14,587 Purchase of other inventories 6,570 8,410 ---------- ---------- $ 94,945 $ 87,929 ========== ========== Capital expenditure incentives received $ 2,521 $ - in cash ========== ========== (7) Other transactions On March 18, 1999, the Company entered into an agreement with ING Baring US Capital, LLC as arranger and administrative agent, for a three-year loan in the amount of $300,000 with quarterly interest payments. The proceeds were used to repay short-term bank loans of the Company. The loan agreement establishes certain restrictions including a minimum consolidated equity of $1,750,000 and other covenants and ratios. During November 1999, $80,000 of this loan was repaid prior to the scheduled repayment date. In March 27, 2000 there was an amendment to the loan agreement in which certain restrictions and other covenants and ratios were modified. The new required minimum consolidated equity is $1,500,000. (8) Repurchase program On December 9, 1999, the Board of Directors authorized a repurchase shares program of its Class A Common Stock in an amount not to exceed $100,000 in the aggregate. The shares could be repurchased in the open market or in privately negotiated transactions, depending on market conditions and other factors. The Company repurchased 645,916 shares amounting to $11,753 during the first quarter of 2000, cumulating 1,014,500 shares repurchased since the beginning of the program in December 1999. -8- PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in thousands of U. S. dollars) (Unaudited) (9) Comprehensive loss Beginning in 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income". This standard which requires the display of the comprehensive income and its components in the financial statements. In the Company's case, comprehensive income includes net income and foreign currency translation. The comprehensive income for the three-month periods ended March 31 1999 and 2000 is as follows: Three Months Ended March 31, ----------------------------- 1999 2000 ------------ --------------- Net loss $ (40,082) $ (71,502) Other comprehensive income (loss): Initial effect on deferred taxes relating to the change in the functional currency in the Mexican subsidiary (4,937) - Foreign currency translation (85,085) 8,555 --------- --------- $(130,104) $ (62,947) ========= ========= (10) Segments and related information Relevant information concerning the geographic areas in which the Company operates, is as follows: -9- PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in thousands of U. S. dollars) (Unaudited)
March 1999 Central Brazil Colombia Mexico Venezuela America Corporate Total ------ -------- ------ --------- ------- --------- ----- Net sales $ 133,283 $ 105,999 $ 163,009 $ 107,279 $ 53,412 $ - $ 562,982 ========= ========= ========= ========= ======== =========== ========= Operating income (loss) $ 2,097 $ 5,354 $ 19,559 $ (11,452) $ 7,039 $ ( 8,924) $ 13,673 ========= ========= ========= ========= ======== =========== ========= Interest expense, net $ (4,512) $ (1,496) $ (2,567) $ (3,300) $ (592) $ (10,688) $ (23,155) ========= ========= ========= ========= ======== =========== ========= Depreciation and amortization 9,661 $ 14,608 $ 8,312 $ 18,264 $ 4,493 $ 7,390 $ 62,728 ========= ========= ========= ========= ======== =========== ========= Capital expenditures $ 14,482 $ 7,250 $ 16,577 $ 14,156 $ 9,659 $ - $ 62,124 ========= ========= ========= ========= ======== =========== ========= December 1999 ------------- Long-lived assets $ 309,441 $ 445,428 $ 448,196 $ 466,846 $133,080 $1,293,878 $3,096,869 ========= ========= ========= ========= ======== =========== ========= Total assets $ 486,198 $ 498,005 $ 549,420 $ 556,696 $171,174 $1,351,629 $3,613,122 ========= ========= ========= ========= ======== =========== ========= March 2000 ---------- Net sales $ 127,717 $ 91,885 $ 219,194 $ 116,476 $ 52,909 $ - $ 608,181 ========= ========= ========= ========= ======== =========== ========= Operating income (loss) $ (3,287) $ (16,165) $ 11,491 $ (31,054) $ 4,928 $ (9,301) $ (43,388) ========= ========= ========= ========= ======== =========== ========= Interest expense, net $ (3,436) $ (1,763) $ (4,539) $ (5,847) $ (281) $ (13,505) $ (29,371) ========= ========= ========= ========= ======== =========== ========= Depreciation and Amortization $ 7,374 $ 14,782 $ 13,020 $ 19,119 $ 4,232 $ 7,303 $ 65,830 ========= ========= ========= ========= ======== =========== ========= Capital expenditures $ 1,043 $ 2,123 $ 19,814 $ 11,194 $ 5,072 $ - $ 39,246 ========= ========= ========= ========= ======== =========== ========= Long-lived assets $ 298,905 $ 434,583 $465,438 $449,499 $133,226 $1,285,926 $3,067,577 ========= ========= ========= ========= ======== =========== ========= Total assets $ 473,500 $ 490,869 $584,005 $523,945 $169,139 $1,326,639 $3,568,097
(11) Reclassifications of prior financial statements Certain amounts in the financial statements at March 31, 1999 have been reclassified in order to conform to the presentation of the financial statements at March 31, 2000. The statements of operations data for Panamco Mexico, Panamco Brasil, Panamco Colombia, Panamco Venezuela, and Panamco Central America (Costa Rica, Nicaragua and Guatemala) are presented on the following pages. The data presented as of and for each period have been derived from the unaudited financial statements of Panamco Mexico, Panamco Brasil, Panamco Colombia, Panamco Venezuela, and Panamco Central America, as applicable, which financial statements are not included herein. -10-
PANAMCO MEXICO (Stated in thousands of U.S. dollars) (Unaudited) Three months ended March 31, ---------------------------- 1999 2000 ----------- ----------- Selected Statements of Operations: Net sales $ 163,009 $ 219,194 Cost of sales, excluding depreciation and amortization 80,603 100,987 ----------- ----------- Gross profit 82,406 118,207 Operating expenses: Selling, general and administrative 54,535 74,737 Depreciation and amortization, excluding goodwill 7,609 12,274 Amortization of goodwill 703 746 Facilities reorganization charges - 18,959 ----------- ----------- 62,847 106,716 ----------- ----------- Operating income 19,559 11,491 Interest expense, net (2,567) (4,539) Other income (expense), net 3,970 (1,623) ----------- ----------- Income before income taxes 20,962 5,329 Income taxes 6,842 1,614 ----------- ----------- Income before minority interest 14,120 3,715 Minority interest in Panamco Mexico subsidiaries 533 140 ----------- ----------- Net income attributable to Panamco Mexico 13,587 3,575 Minority interest in Panamco Mexico 252 66 ----------- ----------- Net income attributable to Panamco $ 13,335 $ 3,509 =========== =========== Unit case sales data (in millions): Soft drinks 61.7 66.9 Water 30.2 37.0 Other products 0.5 0.5
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PANAMCO BRASIL (Stated in thousands of U.S. dollars) (Unaudited) Three months ended March 31, ---------------------------- 1999 2000 ----------- ----------- Selected Statements of Operations: Net sales $ 133,283 $ 127,717 Cost of sales, excluding depreciation and amortization 82,021 79,629 ------------ ------------ Gross profit 51,262 48,088 Operating expenses: Selling, general and administrative 37,280 32,883 Depreciation and amortization, excluding goodwill 9,210 6,866 Amortization of goodwill 451 508 Facilities reorganization charges 2,224 11,118 ------------ ------------ 49,165 51,375 ------------ ------------ Operating income (loss) 2,097 (3,287) Interest expense, net (4,512) (3,436) Other expense, net (29,680) (1,765) ------------ ------------ Loss before income taxes (32,095) (8,488) Income tax benefit (7,267) (3,142) ------------ ------------ Loss before minority interest (24,828) (5,346) Minority interest in Panamco Brazil (348) (58) ------------ ------------ Net loss attributable to Panamco $ (24,480) $ (5,288) ============ ============ Unit case sales data (in millions): Soft drinks 51.9 61.0 Water 4.0 3.8 Beer 15.6 16.3
-12-
PANAMCO COLOMBIA (Stated in thousands of U.S. dollars) (Unaudited) Three months ended March 31, ---------------------------- 1999 2000 ----------- ----------- Selected Statements of Operations: Net sales $ 105,999 $ 91,885 Cost of sales, excluding depreciation and amortization 46,267 39,278 ------------ ------------ Gross profit 59,732 52,607 Operating expenses: Selling, general and administrative 39,770 35,765 Depreciation and amortization 14,608 14,782 Facilities reorganization charges - 18,225 ------------ ------------ 54,378 68,772 ------------ ------------ Operating income (loss) 5,354 (16,165) Interest expense, net (1,496) (1,763) Other income (expense), net 1,445 (2,460) ------------ ------------ Income (loss) before income taxes 5,303 (20,388) Income taxes (benefit) 1,141 (6,131) ------------ ------------ Income (loss) before minority interest 4,162 (14,257) Minority interest in Panamco Colombia subsidiaries 16 48 ------------ ------------ Net income (loss) attributable to Panamco Colombia 4,146 (14,305) Minority interest in Panamco Colombia 115 (392) ------------ ------------ Net income (loss) attributable to Panamco $ 4,031 $ (13,913) ============ ============ Unit case sales data (in millions): Soft drinks 37.8 38.9 Water 9.7 8.3
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PANAMCO VENEZUELA (Stated in thousands of U.S. dollars) (Unaudited) Three months ended March 31, ---------------------------- 1999 2000 ----------- ----------- Selected Statements of Operations: Net sales $ 107,279 $ 116,476 Cost of sales, excluding depreciation and amortization 48,744 54,137 ------------ ------------ Gross profit 58,535 62,339 Operating expenses: Selling, general and administrative 46,773 43,420 Depreciation and amortization 18,264 19,119 Facilities reorganization charges 4,950 30,854 ------------ ------------ 69,987 93,393 Operating loss (11,452) (31,054) Interest expense, net (3,300) (5,847) Other income (expense), net 1,308 (998) ------------ ------------ Loss before income taxes (13,444) (37,899) Income taxes (benefit) 1,245 (3,670) Net loss attributable to Panamco $ (14,689) $ (34,229) ============ ============ Unit case sales data (in millions): Soft drinks 38.3 36.0 Water 4.2 4.9 Beer 0.0 0.3 Other products 1.2 1.6
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PANAMCO CENTRAL AMERICA (Stated in thousands of U.S. dollars) (Unaudited) Three months ended March 31, ---------------------------- 1999 2000 ----------- ----------- Selected Statements of Operations: Net sales $ 53,412 $ 52,969 Cost of sales, excluding depreciation and amortization 24,746 24,605 ------------ ------------ Gross profit 28,666 28,364 Operating expenses: Selling, general and administrative 17,134 18,482 Depreciation and amortization, excluding goodwill 4,426 4,170 Amortization of goodwill 67 62 Facilities reorganization charges - 722 ------------ ------------ 21,627 23,436 ------------ ------------ Operating income 7,039 4,928 Interest expense, net (592) (281) Other expense, net (946) (189) ------------ ------------ Income before income taxes 5,501 4,458 Income taxes 1,691 946 ------------ ------------ Net income attributable to Panamco $ 3,810 $ 3,512 ============ ============ Unit case sales data (in millions): Soft drinks 17.0 16.9 Water 0.9 0.6 Other products 0.2 0.1
-15- ITEM 2. MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General The following discussion addresses the financial condition and results of operations of Panamerican Beverages, Inc. ("Panamco") and its consolidated subsidiaries. This discussion should be read in conjunction with our unaudited consolidated financial statements as of March 31, 1999 and 2000 and the notes thereto included elsewhere herein. Results for any interim period are not necessarily indicative of results for any year. We conduct our operations through tiers of subsidiaries in which, in some cases, minority shareholders hold interests. For the first quarter of 2000, minority shareholdings in our consolidated subsidiaries represented an interest in the aggregate of approximately 0.3% of consolidated net loss before minority interest. Because we have varying percentage ownership interests in our approximately 60 consolidated subsidiaries, the amount of the minority interest in income or loss before minority interest during a period depends upon the revenues and expenses of each of the consolidated subsidiaries and the percentage of each of such subsidiary's capital stock owned by minority shareholders during such period. In 1998, we created the "Panamco Central America" group, which consists of Panamco Costa Rica, Panamco Nicaragua and Panamco Guatemala. The financial condition and results of operations of these three companies have been reported together in the financial statements of Panamco Central America. In February 1999, we formed the North Latin American Division, which consists of Panamco Mexico and Panamco Central America. We will continue to report these results of operations separately. Unit case means 192 ounces of finished beverage product (24 eight-ounce servings). Average sales prices per unit case means net sales in U.S. dollars for the period divided by the number of unit cases sold during the same period. Cash operating profit means operating income plus depreciation, amortization of goodwill and noncash facilities reorganization charges. Forward-looking statements, contained in this document include the amount of future capital expenditures and the possible uses of proceeds from any future borrowings. The words believes, intends, expects, anticipates, projects, estimates, predicts, and similar expressions are also intended to identify forward-looking statements. Such statements, estimates, and projections reflect various assumptions by our management, concerning anticipated results and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. Factors that could cause results to differ include, but are not limited to, changes in the soft drink business environment, including actions of competitors and changes in consumer performance, changes in governmental laws and regulations, including income taxes, market demand for new and existing products, raw material prices and devaluation of local currencies against the U.S. dollar. Accordingly, we cannot assure you that such statements, estimates and projections will be realized. The forecasts and actual results will likely vary and those -16- variations may be material. We make no representation or warranty as to the accuracy or completeness of such statements, estimates or projections contained in this document or that any forecast contained herein will be achieved. Three Months Ended March 31, 2000 Compared to Three Months Ended March 31, 1999 Consolidated Results of Operations Consolidated net sales for the first quarter ended March 31, 2000, increased 8.0% to $608.2 million from $563.0 million in the 1999 first quarter, mainly due to an increase of 7.3% in consolidated unit case sales volume. Total consolidated unit cases sales increased to 293.1 million cases from 273.2 unit cases in the 1999 period. Consolidated soft drink sales volume for the period was up 6.3%, reflecting increases of 17.7% in Brazil, 8.3% in Mexico and 2.9% in Colombia offset by declines of 6.2% in Venezuela and 0.6% in the Central American region. Consolidated unit case sales volume of bottled water increased 11.8% to 54.7 million, and unit case sales volume of beer sold in Brazil, and since February 1999 in Venezuela, increased 5.5% to 16.5 million unit cases. The cost of sales as a percentage of net sales decreased to 49.1% during the 2000 first quarter from 50.2% in the 1999 first quarter, primarily driven by cost savings in raw materials and packaging in several countries due to improved procurement contracts. The following discussions are after the recording of facilities reorganization charges (explained below). Operating expenses as a percentage of net sales increased to 58.1% during the 2000 first quarter from 47.4% in 1999, mainly as a result of the effect of facilities reorganization charges of $79.9 million or 13.1% as a percentage of net sales in 2000 compared to $7.2 million in the same 1999 period. Operating loss increased to $43.4 million during the first quarter of 2000 from operating income of $13.7 million in 1999. Cash operating profit decreased 18.9% to $62.0 from $76.4 million in the 1999 first quarter. Net interest expense increased to $29.4 million during the first quarter of 2000 from $23.2 million in 1999 quarter due primarily to an increase in the average interest rate. Other expense, net decreased to $8.2 million in the 2000 first quarter from $24.6 million in 1999 period, primarily caused by foreign exchange losses in Brazil of $24.1 million due to a 43.0% devaluation of the Brazilian real during the first quarter of 1999, partially offset by $5.4 million of non-operating charges related to the disposal of non-operating assets during the first quarter of 2000. The consolidated effective income tax rate decreased by 171.4% as a result of higher losses reported during the first quarter of 2000, the effect of the asset tax (minimum tax) in -17- Venezuela and our decision not to recognize the benefit of tax loss carry-forwards from prior years in Venezuela, because of our uncertainty that we will have sufficient taxable income in the near-term to offset against such benefits in 1999. As a result of the foregoing, Panamco had a net loss of $71.5 million compared to net loss of $40.1 million in the first quarter of 1999. Regarding the Year 2000 issue, as of to date, there have been no adverse effects on the Company's systems or operations, including the ability of any significant customer, vendor or service provider to do business with the Company, and we have complied with all regulatory and contractual requirements. The Company does not expect any contingencies regarding this issue. Facilities reorganization charges. During the first quarter of 2000 Panamco began a wide reorganization program designed to improve productivity and strengthen the Company's competitive position in the beverage industry. The program includes productivity initiatives to streamline Panamco's manufacturing infrastructure, consolidation of distribution centers and warehouses, and the termination of approximately 6,750 jobs across all levels of the Company. In the first quarter ended March 31, 2000, Panamco recorded a one-time charge of $85.3 million, $79.9 million as facilities reorganization charges and $5.4 million as non-operating charges, reflecting the following items related to the Company's reorganization program: 1. Restructuring charges totaling $59.4 million are broken down as follows: o Cash restructuring charges totaling approximately $39.8 million which include $31.9 million from job terminations and $7.0 million from the restructuring of our distribution system in Brazil and Venezuela; o Non-cash restructuring charges totaling approximately $19.6 million which result from seven plant closings and the related disposal of property, plant and equipment; 2. Asset write-offs totaling $20.5 million, including $15.5 million of property, plant and equipment in all operating units and $4.5 million of obsolete bottles and cases, mainly in the Venezuelan unit's water jug business, and $0.5 million of cash charges related to the disposal of property, plant and equipment; 3. Non-operating asset charges totaling $5.4 million related to the disposal of non-operating assets, including affiliated companies and land in some of the operating units. As a result of the above, for the first quarter of 2000 Panamco s income was impacted by facilities reorganization charges and non-operating charges totaling $61.9 million, net of the related tax benefit of approximately $23.4 million. -18- Regional Results Mexico Panamco Mexico reported an increase of 34.5% in net sales to $219.2 million during the first quarter of 2000, compared to $163.0 million in the 1999 first quarter. Soft drink sales increased 32.7% on volume growth of 8.3% to 66.9 million-unit cases and a 22.7% price increase in dollar terms. Water volume grew 22.6% to 37.0 million-unit cases, mainly due to the continued increase in water jug sales volume due to increased coverage of the Company's franchise territories. During the quarter, Panamco Mexico maintained its strong soft drink share of sales of 80.0%. Cost of sales as a percentage of net sales dropped to 46.1% in the 2000 first quarter versus 49.4% during first quarter of 1999, mainly due to continued cost savings in raw materials. Operating expenses, including facilities reorganization charges, as a percentage of net sales increased to 48.7% in the first quarter of 2000 from 38.6% in the comparable period for 1999, mainly due to higher depreciation expenses related to Panamco's ongoing capital expenditure program and facilities reorganization charges of $19.0 million or 8.6% as a percentage of net sales. Operating income decreased to $11.5 million from $19.6 million in the 1999 first quarter as a result of the facilities reorganization charges. Cash operating profit increased 25.1% to $34.9 million from $27.9 million in the 1999 first quarter. Net interest expense in the 2000 first quarter increased by 76.8% to $4.5 million from $2.6 million in 1999 due to the issuance of an aggregate of $106 million in unsecured peso-denominated promissory notes in November of 1999 in a local debt offering. Other expense, net increased to $1.6 million in the 2000 first quarter from income of $4.0 in the 1999 quarter due to a decrease in profit from sale of fixed assets, a decrease in contributions received from The Coca-Cola Company for capital expenditures and non-operating charges of $1.7 million related to the disposal of non-operating assets. The effective income tax rate for the period decreased to 30.3% from 32.6% due to tax planning strategies applied in some local subsidiaries. As a result of the foregoing, net income contributed by Panamco Mexico to the Company decreased 73.7% to $3.5 million for the first quarter of 2000 compared to $13.3 million in the first quarter of 1999. Net income attributable to Panamco for the 2000 quarter was impacted by facilities reorganization charges and non-operating charges totaling $13.5 million, net of the related tax benefit. Brazil Panamco Brasil, which operates in the S o Paulo, Campinas, Santos and Mato Grosso do Sul regions of Brazil, reported 2000 first quarter net sales of $127.7 million, a decrease of -19- 4.2% from the 1999 quarter, primarily as a result of Panamco's promotional pricing strategy, which was launched in March 1999. As a result of this strategy sales volume of soft drinks grew 17.7%, to 61.0 million unit cases. Beer volume grew 4.2% to 16.3 million unit cases and bottled water volume decreased 3.8% to 3.8 million unit cases due to a temporary shortage related to a shift in the water packaging mix. Panamco Brasil maintained in the 2000 first quarter the strong 57.4% total soft drink share of sales recorded in the fourth quarter of 1999, which represents an increase of 7.1 points since the Company launched its promotional pricing strategy. Cost of sales as a percentage of net sales increased to 62.3% in the 2000 first quarter from 61.5% in the 1999 first quarter. The increase is primarily attributable to the price discounting in connection with our promotional pricing strategy, slightly offset by reductions in the cost of raw materials and production labor and increased direct sales to supermarkets by Cervejarias Kaiser in Panamco Brasil territories. While Panamco Brasil records the commissions from the direct sales made by Cervejarias Kaiser to the supermarkets as net sales, this amount affects the percentage of cost of sales as a percentage of total sales. Operating expenses, including facilities reorganization charges, as a percentage of net sales rose to 40.2% from 36.9% in the 1999 quarter, mainly due to the facilities reorganization charges of $11.1 million or 8.7% as a percentage of net sales. Operating loss increased 256.7% to $3.3 million during first quarter 2000 from operating income of $2.1 million in the 1999 quarter primarily as a result of the facilities reorganization charges. Cash operating profit decreased 31.0% to $8.1 million from $11.8 million in 1999 first quarter. Net interest expense decreased by 23.8% to $3.4 million in first quarter 2000 from $4.5 million in 1999 quarter as a result of improved financing conditions resulting in lower interest costs and repayment of short-term debt. Other expense, net decreased to $1.8 million in the 2000 first quarter from $29.7 million in the 1999 quarter as a result of a $24.1 million foreign exchange loss due to the devaluation of 43.0% of the Brazilian real in 1999 quarter while during 2000 was a foreign exchange gain of $1.6 million due to the revaluation of 2.3% of the Brazilian real, income equity in earnings of Cervejarias Kaiser of $0.03 million compared to negative equity income of $3.7 million in the 1999 and non-operating charges of $1.0 million related to the disposal of non-operating assets during first quarter of 2000. The effective income tax rate increased to a negative 37.0% in first quarter 2000 from a negative 22.6% in the 1999 quarter, mainly due to non-deductible losses in the equity of Cervejarias Kaiser during the first quarter of 1999. As a result of the above, the net loss contributed to Panamco by Panamco Brasil decreased 78.4% to $5.3 million in the first quarter 2000 from $24.5 million in 1999 period. The net loss attributable to Panamco for the 2000 quarter was impacted by facilities reorganization charges and non-operating charges totaling $8.1 million, net of the related tax benefit. -20- Colombia Panamco Colombia, which operates throughout Colombia, reported net sales of $91.9 million for the 2000 first quarter, down 13.3% from the 1999 period. The revenue decline was mainly due to a 24.4% devaluation of the Colombian Peso over the last twelve months and to a 14.3% decrease in water volume to 8.3 million unit cases, partially offset by a 2.9% increase in soft drink volume to 38.9 million unit cases. The water volume decrease was attributable to economic recession and price increases mainly in individual-size presentations. Panamco Colombia continued strengthening its position in the market, achieving a record high soft drink share of sales of 67.5% in March 2000, up 4.2 points from the same period in 1999. Cost of sales as a percentage of net sales decreased to 42.7% during the first quarter of 2000 from 43.6% in the same period of 1999, as a result of cost savings in raw materials, basically in sugar prices. Operating expenses, including facilities reorganization charges, as a percentage of net sales increased to 74.8% in the first quarter of 2000 from 51.3% in the 1999 quarter, mainly due to higher depreciation expenses related to Panamco's ongoing capital expenditure program and facilities reorganization charges of $18.2 million or 19.8% as a percentage of net sales. Operating loss increased 401.9% to $16.2 million during first quarter 2000 from operating income of $5.4 million in the 1999 quarter primarily as a result of lower sales and the facilities reorganization charges. Cash operating profit decreased 72.3% to $5.5 million from $20.0 million in 1999 first quarter. Net interest expense increased during the first quarter of 2000 to $1.8 million from $1.5 million in 1999 quarter, due mainly to an increase in the average interest rate. Other expense, net increased to $2.5 million in the 2000 first quarter from income of $1.4 in the 1999 quarter due to a decrease in contributions received from The Coca-Cola Company for capital expenditures and non-operating charges of $2.5 million related to the disposal of non-operating assets. The effective income tax rate increased to 30.1% in first quarter 2000 from 21.5% in the 1999 quarter primarily due to the recognition of tax credits recorded during the first quarter of 1999, which were not available in the 2000 quarter. As a result of the above, net loss attributable to the Company from Panamco Colombia increased 445.2% to $13.9 million in the 2000 first quarter from net income of $4.0 million in 1999 period. The net loss attributable to Panamco for the 2000 first quarter was impacted by facilities reorganization charges and non-operating charges totaling $14.2 million, net of the related tax benefit. -21- Venezuela Panamco Venezuela reported net sales of $116.5 million for the first quarter of 2000, up 8.6% from 1999. Price increases totaling 11.3% in dollar terms were partially offset by a 2.4% decrease in total sales volume to 42.7 million unit cases, mainly the result of difficult economic conditions in Venezuela. Panamco Venezuela's soft drink share of sales increased 0.6 percentage points during the quarter, reaching 70.5% at the end of March 2000. Cost of sales as a percentage of net sales increased to 46.5% during the first quarter of 2000 from 45.4% in during the same period in 1999, as a result of higher costs associated with the increase in sales of nonreturnable presentations. Operating expenses, including facilities reorganization charges, as a percentage of net sales increased to 80.2% in the first quarter of 2000 from 65.2% in the prior year, mainly due to facilities reorganization charges of $30.9 million or 26.5% as a percentage of net sales, representing an increase of 21.9 points versus the first quarter of 1999. Operating loss increased 171.2% to $31.1 million from $11.5 million in the first quarter of 1999 primarily as a result of the increase in facilities reorganization charges. Cash operating profit decreased 17.2% to $5.6 million from $6.8 million in 1999 first quarter. Net interest expense increased during the first quarter of 2000 to $5.8 million from $3.3 million in 1999, due to an increase in net debt position of $27.9 million and an increase in the average interest rate. Other expense, net increased 176.3% to $1.0 million from other income, net of $1.3 million in the 1999 first quarter, mainly as a result of provisions of $1.3 million for legal contingencies related to prior years and non-operating charges of $0.2 million related to the disposal of non-operating assets during first quarter of 2000. The effective income tax rate increased to 9.7% in the first quarter 2000 from a negative 9.3% in 1999 primarily due to the asset tax or minimum tax paid in Venezuela as a result of a net loss position before income taxes and our decision not to recognize the benefit of tax loss carry-forwards from prior years, because of our uncertainty that we will generate sufficient taxable income in the near term to offset against such benefits, in 1999. As a result of the above, net loss attributable to the Company from Panamco Venezuela increased 133.0% to $34.2 million in the 2000 first quarter from $14.7 million in 1999 period. The net loss attributable to Panamco for the 2000 first quarter was impacted by facilities reorganization charges and non-operating charges totaling $25.5 million, net of the related tax benefit. -22- Central America Panamco's Central American region includes franchises in Costa Rica, Nicaragua and Guatemala. The region reported net sales of $53.0 million for the first quarter of 2000, a decrease of 0.8% from $53.4 million in the first quarter of 1999. The decrease was attributable to a volume decline of 1.9% to 17.7 million unit cases, partially offset by price increases in dollar terms of approximately 1.1%, mainly in our water business. Soft drink volume declined 0.6% to 16.9 million unit cases and water volume was down 27.0% to 0.6 million unit cases, due to a change in selling strategy for jug presentations. Panamco's share of sales increased to 93.9% in Costa Rica, 42.9% in Guatemala and 85.3% in Nicaragua. Cost of sales as a percentage of net sales increased to 46.5% during the first quarter of 2000 from 46.3% in the same period of 1999, as a result of higher costs associated with the increase in sales of nonreturnable presentations. Operating expenses, including facilities reorganization charges, as a percentage of net sales increased to 44.2% from 40.5% during the same period last year, primarily as a result of decreased sales and facilities charges of $0.7 million or 1.4% as a percentage of net sales. Operating income decreased 30.0% to $4.9 million in the first quarter of 2000 from $7.0 million in the 1999 period, primarily as a result of lower sales. Cash operating profit increased 15.0% to $9.8 million in 1999 from $11.5 million in the 1999 first quarter. Net interest expense decreased to $0.3 million from $0.6 million in the first quarter of 1999, due to a decrease in net debt and improved financing conditions. Other expense, net decreased to $0.2 million from $1.0 million in 1999 first quarter as a result of lower foreign exchange losses in Nicaragua and Guatemala. As a result of the above, net income contributed by Panamco Central America to the Company decreased 7.8% to $3.5 million in the first quarter of 2000 from $3.8 million in 1999 period. Net income attributable to Panamco for the 2000 quarter was impacted by facilities reorganization charges and non-operating charges totaling $0.5 million, net of the related tax benefit. Liquidity and Capital Resources At March 31, 1999, we had consolidated cash and cash equivalents of $154.8 million, a decrease of 38.8% compared to $252.8 million as of March 31, 1999. This decrease resulted mainly due to cash received from the syndicated loan issued during the first quarter of 1999. We have investments in bank deposits for $150 million and marketable bonds amounting to $34.5 million which guarantee bank loans obtained by subsidiaries and are therefore classified as noncurrent investments. -23- Consolidated cash flow provided by operations was $75.3 million and $50.9 million for the three months ended March 31, 2000 and 1999, respectively. Total consolidated indebtedness was $1,344.2 million as of March 31, 2000, consisting of $870.0 million at the holding company level and $474.2 million of subsidiary indebtedness. Of the total debt 88% is dollar denominated and 93% is long-term, with an average tenor of 5.2 years and average cost of debt before taxes of 9.2%. On December 9, 1999, the Board of Directors approved a share repurchase program for up to $100 million of the company's Class A common stock. The Company may repurchase shares in the open market as well as in privately negotiated transactions based on prevailing market conditions. The Company has repurchased 1,014,500 shares for $19.3 million at an average price per share of $19.05 since the beginning of the program (December 1999), during the first quarter 645,916 shares were repurchased for $11.8 million at an average price per share of $18.22. Total capital expenditures for the quarter ended March 31, 2000 were $39.2 million compared to $62.1 million for the three months ended March 31, 1999. The decrease resulted primarily from capital spending rationalization in all countries. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There has been no significant change in the Company's exposure to market risk during the first quarter of 2000. For discussion of the Company's exposure to market risk, refer to Item 9A, Quantitative and Qualitative Disclosures about Market Risk, contained in the Company's Form 20-F for the year ended December 31, 1999. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Legal Proceedings information was addressed in Item 3 of the Company's Form 20-F for the year ended December 31, 1999. There has been no material change to that information required to be disclosed in this Quarterly Report on Form 10-Q. ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS Pursuant to the Equity Incentive Plan, the Company issued 25,000 shares of Class A Common Stock during the first quarter of 2000. These securities were issued in offshore -24- transactions pursuant to Regulation S. The aggregate proceeds to the Company from these sales were $405,000. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. ITEM 5. OTHER INFORMATION Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) List of Exhibits None (b) Reports on Forms 8-K. The Registrant did not file any reports on Form 8-K during the period ended March 31, 2000. However, the Registrant filed the following reports on Form 6-K during the period as it qualified as a foreign private issuer under the Exchange Act Rule 3b-4 during the period relevant to those reports. o 6-K filed 3/17/00 o 6-K filed 3/13/00 -25- 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. May 15, 2000 PANAMERICAN BEVERAGES, INC. (REGISTRANT) By: /s/ Paulo J. Sacchi ------------------------ Paulo J. Sacchi Senior Vice President Chief Financial Officer and Treasurer (On behalf of the Registrant and and as Chief Accounting Officer) -26- -----END PRIVACY-ENHANCED MESSAGE-----