ATLANTA--(BUSINESS WIRE)--Coca-Cola Enterprises, Inc. (NYSE:CCE)(Euronext Paris: CCE) today reported full-year 2011 diluted earnings per common share of $2.29, or $2.18 excluding items affecting comparability. Reported operating income for the year totaled $1.0 billion; comparable operating income totaled $1.1 billion, up 9 percent on a comparable and currency neutral basis versus 2010 pro forma results. Currency translation positively affected full-year results by 15 cents per share compared to prior year pro forma results. Items affecting comparability and other pro forma adjustments are detailed on pages 11 through 15 of this release.
“2011 marks the sixth consecutive year of volume and profit growth in our legacy territories,” said John F. Brock, chairman and chief executive officer. “While we continue to face ongoing marketplace and macroeconomic challenges, the results from our first full year of operating exclusively as a European bottler reinforce the confidence we have in the long-term potential of today’s Coca-Cola Enterprises.
“Throughout the year, we made consistent progress against key initiatives, including the integration of Norway and Sweden and the completion of our $1 billion share repurchase program,” Mr. Brock said. “In 2012, we expect to deliver another year of growth as we continue to enhance our brand portfolio, improve the service we provide to our customers, and maximize the value of excellent marketplace opportunities, including the 2012 Olympic Games in London, which we are working to make the greenest ever.
“Ultimately, this will allow us to deliver against our long-term goal of creating increasing levels of shareowner value,” Mr. Brock said. “In working toward this objective, we initiated a new $1 billion share repurchase program in January 2012, with a goal of repurchasing at least $500 million of our shares by year end, and earlier this week increased our dividend by 23 percent.”
OPERATING REVIEW
Full-year 2011 revenue totaled $8.3 billion, an increase of 11½ percent, and up 5½ percent on a currency neutral basis, both when compared to 2010 pro forma results. For the fourth quarter, revenue grew 5½ percent both on a reported and comparable basis, and 6 percent on a currency neutral basis.
Comparable full-year operating income was up 17 percent over prior year pro forma results, and up 9 percent on a comparable and currency neutral basis. For the quarter, operating income was up 34 percent on a reported basis and 28 percent on a comparable and currency neutral basis to $184 million.
For 2011, free cash flow totaled $490 million, driven by solid business results and reflecting net negative changes in working capital, including year-over-year performance improvement in accounts receivable and declines in accounts payable. Free cash flow was also affected by fourth quarter pension contributions and a modest incremental investment in commodity inventories.
Total full-year volume increased 3½ percent. This includes 3½ percent growth in our sparkling brands, including energy, and approximately 3 percent growth in still beverages.
Key highlights for full-year 2011 included volume growth of 3½ percent for core Coca-Cola trademark brands, and more than 40 percent for energy brands, driven by Monster and the introduction of Powerade Energy in Great Britain. We also had solid growth from Capri Sun and Ocean Spray in stills. On a territory basis, volume increased in both Great Britain and continental Europe, up 2½ percent and 4½ percent respectively.
For 2011, net pricing per case was up 2 percent. Cost of sales per case grew 3 percent in 2011 and operating expenses increased 2 percent, all on a comparable and currency neutral basis.
For the fourth quarter, volume climbed 3 percent, net pricing per case grew 2½ percent, and cost of goods sold per case was up 2½ percent.
“Our success in 2011 is a demonstration of the value of our brands, the ability of our people to execute at the highest levels, and our commitment to creating ever higher levels of customer service,” said Hubert Patricot, executive vice president and president, European Group. “Throughout 2011, we continued the development of the foundation of the business – our brands, our operating strategies, and the skills of our people – in a manner that will allow our business to build on our heritage of growth and maximize the value of the opportunities that lie ahead.”
SHARE REPURCHASE
CCE completed a $1 billion share repurchase program in the fourth quarter of 2011 that began late 2010. As previously announced, CCE has initiated a new $1 billion share repurchase program with a goal of repurchasing at least $500 million worth of shares in 2012. These plans may be adjusted depending on economic, operating, or other factors, including acquisition opportunities.
FULL-YEAR 2012 OUTLOOK
For 2012, CCE now expects earnings per diluted common share growth of approximately 10 percent. Revenue is expected to grow in a high single-digit range, with operating income growth in a mid single-digit range. Our outlook for EPS growth, revenue, and operating income remain in line with previously disclosed guidance, includes the impact of the recently enacted tax increase in France, and is comparable and currency neutral. Although it is too early to predict the 2012 currency impact, based on recent rates, currency translation would decrease full-year earnings per share by approximately 6 percent.
Included in this guidance is a new initiative in Norway to transform our business and invest in the long-term growth of our brands, business, and customers. Over the next two years, we will move from direct store delivery to third-party and customer warehouse delivery. Additionally, we will transition from refillable to recyclable and non-refillable packaging. These actions will improve customer service, increase consumer packaging choice, reduce our carbon footprint, and enhance operational efficiency. This initiative will require approximately $60 million in capital investments and $50 million in nonrecurring restructuring charges.
Including the impact of this initiative, the company now expects 2012 free cash flow in a range of $500 to $525 million, with capital expenditures in a range of $400 to $425 million. Weighted average cost of debt is expected to be approximately 3 percent and the effective tax rate for 2012 is expected to be in a range of 26 percent to 28 percent.
CONFERENCE CALL
CCE will host a conference call with investors and analysts today at 11:00 a.m. ET. The call can be accessed through our website at www.cokecce.com.
Coca-Cola Enterprises, Inc. is the leading Western European marketer, distributor, and producer of bottle and can liquid nonalcoholic refreshment and one of the world’s largest Coca-Cola bottlers. CCE is the sole licensed bottler for products of The Coca-Cola Company in Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway, and Sweden. For more information about our company, please visit our website at www.cokecce.com.
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 currently available competitive, financial, and economic data along with our current operating plans and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. The forward-looking statements in this news release should be read in conjunction with the risks and uncertainties discussed in our filings with the Securities and Exchange Commission (“SEC”), including our Form 10-K for the year ended December 31, 2011, and other SEC filings.
COCA-COLA ENTERPRISES, INC. | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(In Millions, Except Per Share Data) | |||||||
Fourth Quarter | |||||||
2011 | 2010 | ||||||
Net Operating Revenues | $ | 1,893 | $ | 1,794 | |||
Cost of Sales | 1,226 | 1,161 | |||||
Gross Profit | 667 | 633 | |||||
Selling, Delivery, and Administrative Expenses | 487 | 499 | |||||
Operating Income | 180 | 134 | |||||
Interest Expense, Net - Third Party | 23 | 14 | |||||
Other Nonoperating Income, Net | 1 | 4 | |||||
Income Before Income Taxes | 158 | 124 | |||||
Income Tax Expense | 45 | 27 | |||||
Net Income | $ | 113 | $ | 97 | |||
Basic Earnings Per Common Share | $ | 0.37 | $ | 0.29 | |||
Diluted Earnings Per Common Share | $ | 0.36 | $ | 0.28 | |||
Dividends Declared Per Common Share | $ | 0.13 | $ | 0.12 | |||
Basic Weighted Average Common Shares Outstanding | 309 | 337 | |||||
Diluted Weighted Average Common Shares Outstanding | 317 | 345 | |||||
COCA-COLA ENTERPRISES, INC. | |||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(In Millions, Except Per Share Data) | |||||||||
Full Year | |||||||||
2011 |
2010(a) |
|
|||||||
Net Operating Revenues | $ | 8,284 | $ |
6,714 |
|||||
Cost of Sales | 5,254 | 4,234 | |||||||
Gross Profit | 3,030 | 2,480 | |||||||
Selling, Delivery, and Administrative Expenses | 1,997 | 1,670 | |||||||
Operating Income | 1,033 | 810 | |||||||
Interest Expense, Net - Third Party | 85 | 30 | |||||||
Interest Expense, Net - Coca-Cola Enterprises Inc. | - | 33 | |||||||
Other Nonoperating Expense, Net | (3 | ) | (1 | ) | |||||
Income Before Income Taxes | 945 | 746 | |||||||
Income Tax Expense | 196 | 122 | |||||||
Net Income | $ | 749 | $ | 624 | |||||
Basic Earnings Per Common Share(b) | $ | 2.35 | $ | 1.84 | |||||
Diluted Earnings Per Common Share(b) | $ | 2.29 | $ | 1.83 | |||||
Dividends Declared Per Common Share | $ | 0.51 | $ | 0.12 | |||||
Basic Weighted Average Common Shares Outstanding(b) | 319 | 339 | |||||||
Diluted Weighted Average Common Shares Outstanding(b) | 327 | 340 | |||||||
(a) Prior to the fourth quarter of 2010, our Consolidated Financial Statements were prepared in accordance with U.S. generally accepted accounting principles on a “carve-out” basis from legacy CCE's Consolidated Financial Statements using the historical results of operations, assets, and liabilities attributable to the legal entities that comprised new CCE at the effective date of the Merger with The Coca-Cola Company ("TCCC"). These legal entities included all that were previously part of legacy CCE’s Europe operating segment, as well as Coca-Cola Enterprises (Canada) Bottling Finance Company. Our Consolidated Financial Statements prior to the fourth quarter of 2010 also included an allocation of certain corporate expenses under SEC Staff Accounting Bulletin (“SAB”) 55 that related to services provided to us by legacy CCE. Our Consolidated Financial Statements prior to the fourth quarter of 2010 do not include the acquired bottling operations in Norway and Sweden. | |||||||||
(b) For the calculation of basic earnings per common share in periods prior to the fourth quarter of 2010, we used the number of shares outstanding immediately following the transaction with TCCC. For periods subsequent to the transaction with TCCC, we used the actual number of weighted average common shares outstanding during that period. There were no dilutive securities in periods prior to the fourth quarter of 2010. For periods subsequent to the transaction with TCCC, we used the actual number of dilutive securities during that period. | |||||||||
COCA-COLA ENTERPRISES, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(In Millions) | ||||||||
December 31, | December 31, | |||||||
2011 | 2010 | |||||||
ASSETS | ||||||||
Current: | ||||||||
Cash and cash equivalents | $ | 684 | $ | 321 | ||||
Trade accounts receivable, net | 1,387 | 1,329 | ||||||
Amounts receivable from The Coca-Cola Company | 64 | 86 | ||||||
Inventories | 403 | 367 | ||||||
Prepaid expenses and other current assets | 148 | 127 | ||||||
Total Current Assets | 2,686 | 2,230 | ||||||
Property, plant, and equipment, net | 2,230 | 2,220 | ||||||
Franchise license intangible assets, net | 3,771 | 3,828 | ||||||
Goodwill | 124 | 131 | ||||||
Other noncurrent assets, net | 283 | 187 | ||||||
Total Assets | $ | 9,094 | $ | 8,596 | ||||
LIABILITIES | ||||||||
Current: | ||||||||
Accounts payable and accrued expenses | $ | 1,716 | $ | 1,668 | ||||
Amounts payable to The Coca-Cola Company | 116 | 112 | ||||||
Current portion of third party debt | 16 | 162 | ||||||
Total Current Liabilities | 1,848 | 1,942 | ||||||
Third party debt, less current portion | 2,996 | 2,124 | ||||||
Other noncurrent liabilities, net | 160 | 149 | ||||||
Noncurrent deferred income tax liabilities | 1,191 | 1,238 | ||||||
Total Liabilities | 6,195 | 5,453 | ||||||
SHAREOWNERS' EQUITY | ||||||||
Common stock | 3 | 3 | ||||||
Additional paid-in capital | 3,745 | 3,628 | ||||||
Reinvested earnings | 638 | 57 | ||||||
Accumulated other comprehensive loss | (473 | ) | (345 | ) | ||||
Common stock in treasury, at cost | (1,014 | ) | (200 | ) | ||||
Total Shareowners' Equity | 2,899 | 3,143 | ||||||
Total Liabilities and Shareowners' Equity | $ | 9,094 | $ | 8,596 | ||||
COCA-COLA ENTERPRISES, INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In Millions) | ||||||||
Year Ended December 31, | ||||||||
2011 |
2010(a) |
|
||||||
Cash Flows From Operating Activities: |
||||||||
Net income | $ | 749 | $ | 624 | ||||
Adjustments to reconcile net income to net cash derived from operating activities: | ||||||||
Depreciation and amortization | 321 | 264 | ||||||
Deferred income tax benefit | (121 | ) | (6 | ) | ||||
Pension expense less than contributions | (24 | ) | (78 | ) | ||||
Changes in assets and liabilities, net of acquisition amounts: |
||||||||
Trade accounts receivable | (85 | ) | (14 | ) | ||||
Inventories | (44 | ) | (46 | ) | ||||
Prepaid expenses and other assets | (26 | ) | (6 | ) | ||||
Accounts payable and accrued expenses | 88 | 102 | ||||||
Other changes, net | 4 | (15 | ) | |||||
Net cash derived from operating activities | 862 | 825 | ||||||
Cash Flows From Investing Activities: |
||||||||
Capital asset investments | (376 | ) | (291 | ) | ||||
Capital asset disposals | 4 | - | ||||||
Acquisition of the bottling operations in Norway and Sweden, net of cash acquired | (1 | ) | (799 | ) | ||||
Net change in amounts due from Coca-Cola Enterprises Inc. | - | 351 | ||||||
Settlement of net investment hedges | 22 | - | ||||||
Other investing activities, net | (8 | ) | - | |||||
Net cash used in investing activities | (359 | ) | (739 | ) | ||||
Cash Flows From Financing Activities: |
||||||||
Change in commercial paper, net | (145 | ) | 4 | |||||
Issuances of third party debt | 900 | 1,871 | ||||||
Payments on third party debt | (9 | ) | (459 | ) | ||||
Share repurchases | (800 | ) | (200 | ) | ||||
Dividend payments on common stock | (162 | ) | (40 | ) | ||||
Exercise of employee share options | 13 | 13 | ||||||
Net cash received from The Coca-Cola Company for transaction-related items | 71 | - | ||||||
Contributions to Coca-Cola Enterprises Inc. | - | (291 | ) | |||||
Net change in amounts due to Coca-Cola Enterprises Inc. | - | (1,048 | ) | |||||
Other financing activities, net | 3 | 6 | ||||||
Net cash used in financing activities | (129 | ) | (144 | ) | ||||
Net effect of currency exchange rate changes on cash and cash equivalents | (11 | ) | (25 | ) | ||||
Net Change In Cash and Cash Equivalents | 363 | (83 | ) | |||||
Cash and Cash Equivalents at Beginning of Year | 321 | 404 | ||||||
Cash and Cash Equivalents at End of Year | $ | 684 | $ | 321 | ||||
(a) Prior to the fourth quarter of 2010, our Condensed Consolidated Financial Statements were prepared in accordance with U.S. generally accepted accounting principles on a “carve-out” basis from legacy CCE’s Condensed Consolidated Financial Statements using the historical results of operations, assets, and liabilities attributable to the legal entities that comprised new CCE at the effective date of the Merger with TCCC. These legal entities included all that were previously part of legacy CCE’s Europe operating segment, as well as Coca-Cola Enterprises (Canada) Bottling Finance Company. Our Condensed Consolidated Financial Statements prior to the fourth quarter of 2010 also included an allocation of certain corporate expenses under SEC Staff Accounting Bulletin (“SAB”) 55 that related to services provided to us by legacy CCE. Our Condensed Consolidated Financial Statements prior to the fourth quarter of 2010 do not include the acquired bottling operations in Norway and Sweden. | ||||||||
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) |
Fourth-Quarter 2011 | ||||||||||||||||||
|
Items Impacting Comparability |
|
|||||||||||||||||
Reported |
Net Mark-to- |
Restructuring |
Comparable |
||||||||||||||||
Net Operating Revenues | $ | 1,893 | $ | - | $ | - | $ | 1,893 | |||||||||||
Cost of Sales | 1,226 | (3 | ) | - | 1,223 | ||||||||||||||
Gross Profit | 667 | 3 | - | 670 | |||||||||||||||
Selling, Delivery, and Administrative Expenses | 487 | 2 | (3 | ) | 486 | ||||||||||||||
Operating Income | 180 | 1 | 3 | 184 | |||||||||||||||
Interest Expense, Net | 23 | - | - | 23 | |||||||||||||||
Other Nonoperating Income, Net | 1 | - | - | 1 | |||||||||||||||
Income Before Income Taxes | 158 | 1 | 3 | 162 | |||||||||||||||
Income Tax Expense | 45 | - | 1 | 46 | |||||||||||||||
Net Income | $ | 113 | $ | 1 | $ | 2 | $ | 116 | |||||||||||
Diluted Earnings Per Common Share | $ | 0.36 | $ | - | $ | - | $ | 0.36 | |||||||||||
Reconciliation of Income (a) |
Fourth-Quarter 2010 | ||||||||||||||||||
Items Impacting Comparability | |||||||||||||||||||
Reported |
Net Mark-to- |
Restructuring |
Transaction |
Comparable |
|||||||||||||||
Net Operating Revenues | $ | 1,794 | $ | - | $ | - | $ | - | $ | 1,794 | |||||||||
Cost of Sales | 1,161 | (1 | ) | - | - | 1,160 | |||||||||||||
Gross Profit | 633 | 1 | - | - | 634 | ||||||||||||||
Selling, Delivery, and Administrative Expenses | 499 | - | (1 | ) | (8 | ) | 490 | ||||||||||||
Operating Income | $ | 134 | $ | 1 | $ | 1 | $ | 8 | $ | 144 | |||||||||
Interest Expense, Net | 14 | 14 | |||||||||||||||||
Other Nonoperating Income, Net | 4 | 4 | |||||||||||||||||
Income Before Income Taxes | 124 | 134 | |||||||||||||||||
Income Tax Expense | 27 | 36 | |||||||||||||||||
Net Income | $ | 97 | $ | 98 | |||||||||||||||
Diluted Earnings Per Common Share | $ | 0.28 | $ | 0.28 | |||||||||||||||
(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 ongoing results. The adjusting items are based on established defined terms and thresholds and represent all material items management considered for year-over-year comparability. | |||||||||||||||||||
(b) As reflected in CCE's U.S. GAAP Consolidated Financial Statements. | |||||||||||||||||||
(c) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges. | |||||||||||||||||||
(d) Amounts represent non-recurring restructuring charges. | |||||||||||||||||||
(e) Amounts represent transaction related costs incurred by CCE in the fourth quarter of 2010. | |||||||||||||||||||
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) |
Full-Year 2011 |
|||||||||||||||||||||||||||||||
|
Items Impacting Comparability |
|
||||||||||||||||||||||||||||||
Reported |
Net Mark-to- |
Restructuring |
Tax |
Net Tax Items(f) |
Comparable |
|||||||||||||||||||||||||||
Net Operating Revenues | $ | 8,284 | $ | - | $ | - | $ | - | $ | - | $ | 8,284 | ||||||||||||||||||||
Cost of Sales | 5,254 | (4 | ) | - | - | - | 5,250 | |||||||||||||||||||||||||
Gross Profit | 3,030 | 4 | - | - | - | 3,034 | ||||||||||||||||||||||||||
Selling, Delivery, and Administrative Expenses | 1,997 | 1 | (19 | ) | (5 | ) | - | 1,974 | ||||||||||||||||||||||||
Operating Income | 1,033 | 3 | 19 | 5 | - | 1,060 | ||||||||||||||||||||||||||
Interest Expense, Net | 85 | - | - | - | - | 85 | ||||||||||||||||||||||||||
Other Nonoperating Expense, Net | (3 | ) | - | - | - | - | (3 | ) | ||||||||||||||||||||||||
Income Before Income Taxes | 945 | 3 | 19 | 5 | - | 972 | ||||||||||||||||||||||||||
Income Tax Expense | 196 | 1 | 6 | 1 | 53 | 257 | ||||||||||||||||||||||||||
Net Income | $ | 749 | $ | 2 | $ | 13 | $ | 4 | $ | (53 | ) | $ | 715 | |||||||||||||||||||
Diluted Earnings Per Common Share | $ | 2.29 | $ | - | $ | 0.04 | $ | 0.01 | $ | (0.16 | ) | $ | 2.18 | |||||||||||||||||||
Reconciliation of Income (a) (g) |
Full-Year 2010 |
|||||||||||||||||||||||||||||||
Items Impacting Comparability | ||||||||||||||||||||||||||||||||
Reported |
Net Mark-to- |
Restructuring |
Transaction |
Norway and |
SAB 55 |
Pro Forma |
Comparable |
|||||||||||||||||||||||||
Net Operating Revenues | $ | 6,714 | $ | - | $ | - | $ | - | $ | 714 | $ | - | $ | - | $ | 7,428 | ||||||||||||||||
Cost of Sales | 4,234 | (8 | ) | - | - | 448 | - | - | 4,674 | |||||||||||||||||||||||
Gross Profit | 2,480 | 8 | - | - | 266 | - | - | 2,754 | ||||||||||||||||||||||||
Selling, Delivery, and Administrative Expenses | 1,670 | - | (5 | ) | (8 | ) | 210 | (160 | ) | 139 | 1,846 | |||||||||||||||||||||
Operating Income | $ | 810 | $ | 8 | $ | 5 | $ | 8 | $ | 56 | $ | 160 | $ | (139 | ) | $ | 908 | |||||||||||||||
Interest Expense, Net (l) | 63 | 68 | ||||||||||||||||||||||||||||||
Other Nonoperating Expense, Net | (1 | ) | 4 | |||||||||||||||||||||||||||||
Income Before Income Taxes | 746 | 844 | ||||||||||||||||||||||||||||||
Income Tax Expense (m) | 122 | 228 | ||||||||||||||||||||||||||||||
Net Income | $ | 624 | $ | 616 | ||||||||||||||||||||||||||||
Diluted Earnings Per Common Share (n) | $ | 1.83 | $ | 1.78 | ||||||||||||||||||||||||||||
(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 ongoing results. The adjusting items are based on established defined terms and thresholds and represent all material items management considered for year-over-year comparability. | ||||||||||||||||||||||||||||||||
(b) As reflected in CCE's U.S. GAAP Consolidated Financial Statements. | ||||||||||||||||||||||||||||||||
(c) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges. | ||||||||||||||||||||||||||||||||
(d) Amounts represent non-recurring restructuring charges. Prior to the fourth quarter of 2010, these amounts only include those related to legacy CCE's Europe operating segment and do not include any legacy CCE corporate amounts. | ||||||||||||||||||||||||||||||||
(e) Amounts represent post-Merger changes to certain underlying tax matters covered by our indemnification to TCCC for periods prior to the Merger. | ||||||||||||||||||||||||||||||||
(f) Amounts represent the deferred tax benefit related to the enactment of a corporate income tax rate reduction in the United Kingdom. | ||||||||||||||||||||||||||||||||
(g) The pro forma results are for informational purposes only and do not purport to present CCE's actual results had the Merger with TCCC actually occurred on the dates specified or to project actual results for any future period. All pro forma information is based on assumptions believed to be reasonable and should be read in conjunction with the historical financial information contained in CCE's 2011 U.S. GAAP Consolidated Financial Statements. | ||||||||||||||||||||||||||||||||
(h) Amounts represent transaction related costs incurred by CCE in the fourth quarter of 2010. | ||||||||||||||||||||||||||||||||
(i) Reflects historical financial statements of Norway and Sweden as adjusted for purchase accounting adjustments and accounting policy changes. | ||||||||||||||||||||||||||||||||
(j) Adjustment to exclude the SEC Staff Accounting Bulletin ("SAB") 55 allocation of corporate expenses of legacy CCE as it existed prior to the transaction with TCCC. | ||||||||||||||||||||||||||||||||
(k) Assumed three quarters of full-year estimated corporate expense of $185 million incurred evenly throughout the first nine months of the year. | ||||||||||||||||||||||||||||||||
(l) Comparable assumed $2.4 billion in gross debt with a weighted average cost of debt of 3%. | ||||||||||||||||||||||||||||||||
(m)Comparable assumed an effective tax rate of 27%. | ||||||||||||||||||||||||||||||||
(n) Comparable assumed 347 million diluted shares outstanding. | ||||||||||||||||||||||||||||||||
COCA-COLA ENTERPRISES, INC. | |||||||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP | |||||||||||||||||||||||||||
(Unaudited; In Millions) | |||||||||||||||||||||||||||
Fourth-Quarter 2011 | |||||||||||||||||||||||||||
|
Items Impacting Comparability |
|
|||||||||||||||||||||||||
Reconciliation of Segment Income(a) |
Reported |
Net Mark-to- |
Restructuring |
Comparable |
|||||||||||||||||||||||
Europe | $ | 223 | $ | - | $ | 3 | $ | 226 | |||||||||||||||||||
Corporate | (43 | ) | 1 | - | (42 | ) | |||||||||||||||||||||
Operating Income | $ | 180 | $ | 1 | $ | 3 | $ | 184 | |||||||||||||||||||
Fourth-Quarter 2010 | |||||||||||||||||||||||||||
|
|
|
Items Impacting Comparability |
|
|||||||||||||||||||||||
Reconciliation of Segment Income(a) |
Previously |
Segment |
As Adjusted |
Net Mark-to- |
Restructuring |
Transaction |
Comparable |
||||||||||||||||||||
Europe | $ | 200 | $ | (15 | ) | $ | 185 | $ | - | $ | - | $ | - | $ | 185 | ||||||||||||
Corporate | (66 | ) | 15 | (51 | ) | 1 | 1 | 8 | (41 | ) | |||||||||||||||||
Operating Income | $ | 134 | $ | - | $ | 134 | $ | 1 | $ | 1 | $ | 8 | $ | 144 | |||||||||||||
(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 ongoing results. The adjusting items are based on established defined terms and thresholds and represent all material items management considered for year-over-year comparability. | |||||||||||||||||||||||||||
(b) As reflected in CCE's 2011 U.S. GAAP Consolidated Financial Statements. | |||||||||||||||||||||||||||
(c) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges. | |||||||||||||||||||||||||||
(d) Amounts represent non-recurring restructuring charges. | |||||||||||||||||||||||||||
(e) As reflected in CCE's 2010 U.S. GAAP Consolidated Financial Statements. |
|||||||||||||||||||||||||||
(f) Adjustment to reflect a segment measurement change that occurred in the first quarter of 2011 under which certain information technology-related costs incurred in Europe that were previously reported in our Corporate segment are now reported in our Europe operating segment. For the full-year 2010, approximately $45 million in total expenses were recast from our Corporate segment to our Europe operating segment. This change did not impact our consolidated operating income for any period. | |||||||||||||||||||||||||||
(g) Amounts represent transaction related costs incurred by CCE in the fourth quarter of 2010. | |||||||||||||||||||||||||||
COCA-COLA ENTERPRISES, INC. | |||||||||||||||||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP | |||||||||||||||||||||||||||||||||||||
(Unaudited; In Millions) | |||||||||||||||||||||||||||||||||||||
Full-Year 2011 |
|||||||||||||||||||||||||||||||||||||
|
Items Impacting Comparability |
|
|||||||||||||||||||||||||||||||||||
Reconciliation of Segment Income(a) |
Reported |
Net Mark-to- |
Restructuring |
Tax |
Comparable |
||||||||||||||||||||||||||||||||
Europe | $ | 1,195 | $ | - | $ | 19 | $ | - | $ | 1,214 | |||||||||||||||||||||||||||
Corporate | (162 | ) | 3 | - | 5 | (154 | ) | ||||||||||||||||||||||||||||||
Operating Income | $ | 1,033 | $ | 3 | $ | 19 | $ | 5 | $ | 1,060 | |||||||||||||||||||||||||||
Full-Year 2010 |
|||||||||||||||||||||||||||||||||||||
|
|
|
Items Impacting Comparability |
|
|||||||||||||||||||||||||||||||||
Reconciliation of Segment Income(a) |
Previously |
Segment |
As Adjusted |
Net Mark-to- |
Restructuring |
Transaction |
Norway and |
SAB 55 |
Pro Forma |
Comparable |
|||||||||||||||||||||||||||
Europe | $ | 1,039 | $ | (45 | ) | $ | 994 | $ | - | $ | 4 | $ | - | $ | 56 | $ | - | $ | - | $ | 1,054 | ||||||||||||||||
Corporate | (229 | ) | 45 | (184 | ) | 8 | 1 | 8 | - | 160 | (139 | ) | (146 | ) | |||||||||||||||||||||||
Operating Income | $ | 810 | $ | - | $ | 810 | $ | 8 | $ | 5 | $ | 8 | $ | 56 | $ | 160 | $ | (139 | ) | $ | 908 | ||||||||||||||||
(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 ongoing results. The adjusting items are based on established defined terms and thresholds and represent all material items management considered for year-over-year comparability. | |||||||||||||||||||||||||||||||||||||
(b) As reflected in CCE's 2011 U.S. GAAP Consolidated Financial Statements. | |||||||||||||||||||||||||||||||||||||
(c) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges. | |||||||||||||||||||||||||||||||||||||
(d) Amounts represent non-recurring restructuring charges. Prior to the fourth quarter of 2010, these amounts only include those related to legacy CCE's Europe operating segment and do not include any legacy CCE corporate amounts. | |||||||||||||||||||||||||||||||||||||
(e) Amounts represent post-Merger changes to certain underlying tax matters covered by our indemnification to TCCC for periods prior to the Merger. | |||||||||||||||||||||||||||||||||||||
(f) As reflected in CCE's 2010 U.S. GAAP Consolidated Financial Statements. |
|||||||||||||||||||||||||||||||||||||
(g) Adjustment to reflect a segment measurement change that occurred in the first quarter of 2011 under which certain information technology-related costs incurred in Europe that were previously reported in our Corporate segment are now reported in our Europe operating segment. This change did not impact our consolidated operating income for any period. | |||||||||||||||||||||||||||||||||||||
(h) Amounts represent transaction related costs incurred by CCE in the fourth quarter of 2010. | |||||||||||||||||||||||||||||||||||||
(i) Reflects historical financial statements of Norway and Sweden as adjusted for purchase accounting adjustments and accounting policy changes. | |||||||||||||||||||||||||||||||||||||
(j) Adjustment to exclude the SEC Staff Accounting Bulletin ("SAB") 55 allocation of corporate expenses of legacy CCE as it existed prior to the transaction with TCCC. | |||||||||||||||||||||||||||||||||||||
(k) Assumed three quarters of full-year estimated corporate expense of $185 million incurred evenly throughout the first three quarters of the year. | |||||||||||||||||||||||||||||||||||||
COCA-COLA ENTERPRISES, INC. | ||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||
(Unaudited; In Millions, Except Percentages) | ||||||||
Fourth-Quarter 2011 |
Full-Year 2011 |
|||||||
Net Revenues Per Case |
||||||||
Change in Net Revenues per Case |
2.5% |
|
12.5% |
|
||||
Impact of Acquired Bottlers in Norway and Sweden |
0.0% |
|
(4.0)% |
|
||||
Impact of Excluding Post Mix, Non-Trade, and Other |
(0.5)% |
|
(0.5)% |
|
||||
Bottle and Can Net Pricing Per Case(a) |
2.0% |
|
8.0% |
|
||||
Impact of Currency Exchange Rate Changes |
0.5% |
|
(6.0)% |
|
||||
Currency-Neutral Bottle and Can | ||||||||
Net Pricing Per Case(b) |
2.5% |
|
2.0% |
|
||||
Cost of Sales Per Case |
||||||||
Change in Cost of Sales per Case |
2.5% |
|
13.0% |
|
||||
Impact of Acquired Bottlers in Norway and Sweden |
0.0% |
|
(4.0)% |
|
||||
Impact of Excluding Post Mix, Non-Trade, and Other |
0.5% |
|
0.0% |
|
||||
Bottle and Can Cost of Sales Per Case(c) |
3.0% |
|
9.0% |
|
||||
Impact of Currency Exchange Rate Changes |
(0.5)% |
|
(6.0)% |
|
||||
Currency-Neutral Bottle and Can | ||||||||
Cost of Sales Per Case(b) |
2.5% |
|
3.0% |
|
||||
Physical Case Bottle and Can Volume |
||||||||
Change in Volume |
3.0% |
|
3.0% |
|
||||
Impact of Selling Day Shift |
0.0% |
|
0.5% |
|
||||
Comparable Bottle and Can Volume(d) |
3.0% |
|
3.5% |
|
||||
Full Year |
||||||||
Reconciliation of Free Cash Flow (e)(f) |
2011 | 2010 | ||||||
Net Cash Derived From Operating Activities | $ | 862 | $ | 825 | ||||
Less: Capital Asset Investments | (376 |
) |
(291 |
) |
||||
Add: Capital Asset Disposals | 4 | - | ||||||
Free Cash Flow | $ | 490 | $ | 534 | ||||
December 31, | December 31, | |||||||
Reconciliation of Net Debt (g) |
2011 | 2010 | ||||||
Current Portion of Third Party Debt | $ | 16 | $ | 162 | ||||
Debt, Less Current Portion | 2,996 | 2,124 | ||||||
Less: Cash and Cash Equivalents | (684 |
) |
(321 |
) |
||||
Net Debt | $ | 2,328 | $ | 1,965 | ||||
(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. For both the full year and fourth quarter, the measure excludes the impact of fountain volume and other items that are not directly associated with bottle and can pricing in the retail environment. The full year measure also excludes the impact of the acquired bottling operations in Norway and Sweden. Our bottle and can sales accounted for approximately 95 percent of our net revenues during 2011. | |||||||
(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. For both the full year and fourth quarter, the measure excludes the impact of fountain ingredient costs and other items not directly associated with the bottle and can cost environment. The full year measure also excludes the impact of the acquired bottling operations in Norway and Sweden. | |||||||
(d) | The non-GAAP measure "Comparable Bottle and Can Volume" is used to analyze the performance of our business on a constant period and territory basis. This measure reflects the impact of the acquired bottling operations in Norway and Sweden as if they were acquired on January 1, 2010. There were the same number of selling days in the fourth quarter of 2011 and 2010. There was one less selling day in the full year of 2011 versus the full year of 2010. | |||||||
(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) | Prior to the fourth quarter of 2010, the free cash flow calculation only includes legacy CCE's European operations and does not include any legacy CCE corporate amounts or amounts related to the bottling operations in Norway and Sweden. | |||||||
(g) | The non-GAAP measure "Net Debt" is used to more clearly evaluate our capital structure and leverage. |