COCA COLA ENTERPRISES INC - 10-Q Quarterly Report

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[COCA-COLA ENTERPRISES INC. LOGO]

FORM 10-Q

QUARTERLY REPORT

FOR THE QUARTER ENDED JUNE 28, 2002

FILED PURSUANT TO SECTION 13

OF THE

SECURITIES EXCHANGE ACT OF 1934

================================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

--------------

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

for the quarterly period ended June 28, 2002

or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 001-09300

[COCA-COLA ENTERPRISES INC. LOGO]

(Exact name of registrant as specified in its charter)

DELAWARE 58-0503352
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

2500 WINDY RIDGE PARKWAY, SUITE 700
ATLANTA, GEORGIA 30339
(Address of principal executive offices) (Zip Code)

770-989-3000
(Registrant's telephone number, including area code)

--------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

YES [ X ] NO [ ]

Indicate the number of shares outstanding of each of the
issuer's classes of common stock.

448,348,150 SHARES OF $1 PAR VALUE COMMON STOCK AS OF AUGUST 5, 2002

================================================================================

COCA-COLA ENTERPRISES INC.

QUARTERLY REPORT ON FORM 10-Q

FOR QUARTER ENDED JUNE 28, 2002

INDEX

Page
----
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Income Statements for the Quarters
ended June 28, 2002 and June 29, 2001 ............................ 1

Condensed Consolidated Income Statements for the Six Months
ended June 28, 2002 and June 29, 2001 ........................... 2

Condensed Consolidated Balance Sheets as of June 28, 2002
and December 31, 2001 ........................................... 3

Condensed Consolidated Statements of Cash Flows for the Six Months
ended June 28, 2002 and June 29, 2001 ........................... 5

Notes to Condensed Consolidated Financial Statements ............... 6

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ............................................ 19

Item 3. Quantitative and Qualitative Disclosures About Market Risk ......... 29

PART II - OTHER INFORMATION

Item 1. Legal Proceedings .................................................. 30

Item 6. Exhibits and Reports on Form 8-K ................................... 30

Signatures ................................................................. 31

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

COCA-COLA ENTERPRISES INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS
(UNAUDITED; IN MILLIONS EXCEPT PER SHARE DATA)

QUARTER ENDED
--------------------
JUNE 28, JUNE 29,
2002 2001
-------- --------

NET OPERATING REVENUES ................................ $ 4,448 $ 4,079
Cost of sales ......................................... 2,720 2,545
------- -------

GROSS PROFIT .......................................... 1,728 1,534
Selling, delivery, and administrative expenses ........ 1,236 1,280
------- -------

OPERATING INCOME ...................................... 492 254
Interest expense, net ................................. 166 188
Other nonoperating (income) expenses, net ............. (2) --
------- -------

INCOME BEFORE INCOME TAXES ............................ 328 66
Income tax expense before rate change benefit ......... 113 7
Income tax rate change (benefit) ...................... -- (46)
------- -------

NET INCOME ............................................ 215 105
Preferred stock dividends ............................. 1 1
------- -------

NET INCOME APPLICABLE TO COMMON SHAREOWNERS ........... $ 214 $ 104
======= =======

BASIC NET INCOME PER SHARE APPLICABLE TO COMMON
SHAREOWNERS ........................................ $ 0.48 $ 0.25
======= =======

DILUTED NET INCOME PER SHARE APPLICABLE TO COMMON
SHAREOWNERS ........................................ $ 0.47 $ 0.24
======= =======

DIVIDENDS PER SHARE APPLICABLE TO COMMON SHAREOWNERS .. $ 0.04 $ 0.04
======= =======

INCOME (EXPENSE) AMOUNTS FROM TRANSACTIONS WITH THE
COCA-COLA COMPANY
Net operating revenues ................................ $ 220 $ 196
Cost of sales ......................................... (1,314) (1,225)
Selling, delivery, and administrative expenses ........ 39 26

See Notes to Condensed Consolidated Financial Statements.

-1-

COCA-COLA ENTERPRISES INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS
(UNAUDITED; IN MILLIONS EXCEPT PER SHARE DATA)

SIX MONTHS ENDED
--------------------
JUNE 28, JUNE 29,
2002 2001
-------- --------

NET OPERATING REVENUES ................................. $ 8,090 $ 7,411
Cost of sales .......................................... 4,984 4,613
------- -------

GROSS PROFIT ........................................... 3,106 2,798
Selling, delivery, and administrative expenses ......... 2,434 2,504
------- -------

OPERATING INCOME ....................................... 672 294
Interest expense, net .................................. 329 379
Other nonoperating (income) expenses, net .............. (2) --
------- -------

INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE ................................. 345 (85)
Income tax expense (benefit) before rate change benefit 119 (45)
Income tax rate change (benefit) ....................... -- (46)
------- -------

NET INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 226 6

Cumulative effect of accounting change, net of taxes ... -- (302)
------- -------

NET INCOME (LOSS) ...................................... 226 (296)
Preferred stock dividends .............................. 2 2
------- -------

NET INCOME (LOSS) APPLICABLE TO COMMON SHAREOWNERS ..... $ 224 $ (298)
======= =======

BASIC NET INCOME PER SHARE APPLICABLE TO
COMMON SHAREOWNERS BEFORE CUMULATIVE EFFECT .......... $ 0.50 $ 0.01
======= =======

BASIC NET INCOME (LOSS) PER SHARE APPLICABLE TO
COMMON SHAREOWNERS ................................... $ 0.50 $ (0.71)
======= =======

DILUTED NET INCOME PER SHARE APPLICABLE TO
COMMON SHAREOWNERS BEFORE CUMULATIVE EFFECT .......... $ 0.49 $ 0.01
======= =======

DILUTED NET INCOME (LOSS) PER SHARE APPLICABLE TO
COMMON SHAREOWNERS ................................... $ 0.49 $ (0.71)
======= =======

DIVIDENDS PER SHARE APPLICABLE TO COMMON SHAREOWNERS ... $ 0.08 $ 0.08
======= =======

INCOME (EXPENSE) AMOUNTS FROM TRANSACTIONS WITH THE
COCA-COLA COMPANY:
Net operating revenues ................................. $ 416 $ 388
Cost of sales .......................................... (2,386) (2,226)
Selling, delivery, and administrative expenses ......... 69 43

See Notes to Condensed Consolidated Financial Statements.

-2-

COCA-COLA ENTERPRISES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)

JUNE 28, DECEMBER 31,
ASSETS 2002 2001
----------- -----------
(Unaudited)
CURRENT
Cash and cash investments, at cost approximating
market .......................................... $ 353 $ 284
Trade accounts receivable, less allowance reserve
of $59 and $73, respectively .................... 1,750 1,540
Inventories:
Finished goods .................................. 529 458
Raw materials and supplies ...................... 279 232
------- -------
808 690
Prepaid expenses and other current assets ......... 404 362
------- -------
Total Current Assets .......................... 3,315 2,876

PROPERTY, PLANT, AND EQUIPMENT
Land .............................................. 425 390
Buildings and improvements ........................ 1,739 1,718
Machinery and equipment ........................... 8,949 8,614
------- -------
11,113 10,722
Less allowances for depreciation .................. 5,162 4,726
------- -------
5,951 5,996
Construction in progress .......................... 194 210
------- -------
Net Property, Plant, and Equipment .............. 6,145 6,206

GOODWILL ............................................ 575 569

FRANCHISE LICENSE INTANGIBLE ASSETS ................. 13,199 13,124

OTHER NONCURRENT ASSETS, NET ........................ 942 944
------- -------

$24,176 $23,719
======= =======

See Notes to Condensed Consolidated Financial Statements.

-3-

COCA-COLA ENTERPRISES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS EXCEPT SHARE DATA)

JUNE 28, DECEMBER 31,
LIABILITIES AND SHAREOWNERS' EQUITY 2002 2001
----------- -----------
(Unaudited)
CURRENT
Accounts payable and accrued expenses .............. $ 2,578 $ 2,610
Amounts payable to The Coca-Cola Company, net ...... 303 38
Deferred cash payments from The Coca-Cola Company .. 75 70
Current portion of long-term debt .................. 1,637 1,804
------- -------
Total Current Liabilities ..................... 4,593 4,522

LONG-TERM DEBT, LESS CURRENT MATURITIES .............. 10,442 10,365

RETIREMENT AND INSURANCE PROGRAMS AND OTHER LONG-TERM
OBLIGATIONS ........................................ 1,194 1,166

DEFERRED CASH PAYMENTS FROM THE COCA-COLA COMPANY .... 469 510

DEFERRED INCOME TAX LIABILITIES ...................... 4,414 4,336

SHAREOWNERS' EQUITY
Preferred stock .................................... 37 37
Common stock, $1 par value - Authorized -
1,000,000,000 shares; Issued - 456,719,450 and
453,262,107 shares, respectively ................. 457 453
Additional paid-in capital ......................... 2,557 2,527
Reinvested earnings ................................ 410 220
Accumulated other comprehensive income (loss) ...... (265) (292)
Common stock in treasury, at cost - 8,517,712 and
8,146,325 shares, respectively ................... (132) (125)
------- -------
Total Shareowners' Equity ...................... 3,064 2,820
------- -------

$24,176 $23,719
======= =======

See Notes to Condensed Consolidated Financial Statements.

-4-

COCA-COLA ENTERPRISES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED; IN MILLIONS)

SIX MONTHS ENDED
--------------------
JUNE 28, JUNE 29,
2002 2001
-------- --------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) ..................................... $ 226 $(296)
Adjustments to reconcile net income (loss) to net cash
derived from operating activities:
Cumulative effect of accounting change .............. -- 302
Depreciation ........................................ 467 437
Amortization ........................................ 38 225
Deferred income tax expense (benefit) ............... 83 (144)
Deferred cash payments from The Coca-Cola Company ... (36) 42
Net changes in current assets and current liabilities (105) (398)
Other ............................................... 8 (33)
------- -----
Net cash derived from operating activities ............ 681 135

CASH FLOWS FROM INVESTING ACTIVITIES
Investments in capital assets ......................... (375) (408)
Capital asset disposals ............................... 4 --
Other investing activities ............................ (22) (19)
------- -----
Net cash used in investing activities ................. (393) (427)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuances of debt ..................................... 1,299 320
Payments on long-term debt ............................ (1,516) (174)
Stock purchases for treasury .......................... -- (8)
Cash dividend payments on common and preferred stock .. (19) (18)
Exercise of employee stock options .................... 17 24
------- -----
Net cash (used in) derived from financing activities .. (219) 144
------- -----

NET INCREASE (DECREASE) IN CASH AND CASH INVESTMENTS .... 69 (148)
Cash and cash investments at beginning of period ...... 284 294
------- -----

CASH AND CASH INVESTMENTS AT END OF PERIOD .............. $ 353 $ 146
======= =====

See Notes to Condensed Consolidated Financial Statements.

-5-

COCA-COLA ENTERPRISES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States (GAAP) for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments consisting of normal
recurring accruals considered necessary for a fair presentation have been
included. For further information, refer to the consolidated financial
statements and footnotes included in the Coca-Cola Enterprises Inc. ("the
Company") Annual Report on Form 10-K for the year ended December 31, 2001.

As of January 1, 2001, the Company changed its method of accounting for payments
received under the Jumpstart market development programs. The Company previously
recognized the payments as an offset to operating expenses as incurred in the
period for which the payments were designated. As of January 1, 2001, the
payments are recognized as offsets to operating expenses as cold drink equipment
is placed and over the period the Company has the potential requirement to move
equipment, primarily through 2008. The change in accounting resulted in a
noncash cumulative effect adjustment in first-quarter 2001 of $(302) million,
net of $185 million taxes, or $(0.70) per common share.

NOTE B - RECLASSIFICATIONS

Reclassifications have been made in the 2001 income statements to conform to
classifications used in the current year, in accordance with Emerging Issues
Task Force ("EITF") No. 01-09, "Accounting for Consideration Given by a Vendor
to a Customer or Reseller of the Vendor's Products." EITF 01-09 was effective
for the Company beginning January 1, 2002, and requires certain payments made to
customers by the Company, that were previously classified as selling expenses,
to be classified as deductions from revenue. The Company reclassified, as
deductions in net operating revenues, approximately $26 million and $46 million
of selling expenses which were previously classified as selling, delivery, and
administrative expenses in the statement of operations for the quarter and six
months ended June 29, 2001, respectively.

NOTE C - SEASONALITY OF BUSINESS

Operating results for the second quarter and six months ended June 28, 2002 are
not indicative of results that may be expected for the year ending December 31,
2002 because of business seasonality. Business seasonality results from a
combination of higher unit sales of the Company's products in the second and
third quarters versus the first and fourth quarters of the year and the methods
of accounting for fixed costs such as depreciation, amortization, and interest
expense which are not significantly impacted by business seasonality.

-6-

COCA-COLA ENTERPRISES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE D - INCOME TAXES

The Company's effective tax rates for the first six months of 2002 and 2001 were
approximately 35% and 53%, respectively, excluding the rate change benefit in
2001. A reconciliation of the income tax provision at the statutory federal rate
to the Company's actual income tax provision follows (in millions):

SIX MONTHS ENDED
-------------------
JUNE 28, JUNE 29,
2002 2001
-------- --------
U.S. federal statutory expense (benefit) ................. $120 $(30)
State expense (benefit), net of federal expense (benefit). 3 (5)
Taxation of European and Canadian operations, net ........ (16) (17)
Valuation allowance provision ............................ 4 3
Nondeductible items ...................................... 5 5
Other, net ............................................... 3 (1)
---- ----

$119 $(45)
==== ====

NOTE E - LONG-TERM DEBT

Long-term debt balances summarized below are adjusted for the effects of
interest rate and currency swap agreements (in millions):

JUNE 28, DECEMBER 31,
2002 2001
-------- ------------
U.S. commercial paper (weighted average rates of
1.8% and 2.0%) ..................................... $ 1,209 $ 1,759
Canadian dollar commercial paper (weighted average
rates of 2.6% and 2.5%) ............................ 248 251
Canadian dollar notes due 2002 - 2009 (weighted
average rates of 4.8% and 4.7%) (A) ................ 720 686
Notes due 2002 - 2037 (weighted average rates of
5.5% and 6.5%) (B) ................................. 3,437 2,885
Debentures due 2012 - 2098 (weighted average rate
of 7.4%) ........................................... 3,783 3,783
Euro notes due 2002 - 2021 (weighted average rates
of 6.5% and 6.3%) .................................. 2,081 2,268
Various foreign currency debt ........................ 316 236
Additional debt ...................................... 252 254
------- -------
Long-term debt including effect of net asset
positions of currency swaps ...................... 12,046 12,122
Net asset positions of currency swap agreements .... 33 47
------- -------
$12,079 $12,169
======= =======

-7-

COCA-COLA ENTERPRISES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE E - LONG-TERM DEBT (CONTINUED)

(A) In May 2002, the Company issued $38 million in floating rate notes due 2004
under its Canadian Medium Term Note Program. The interest rate on the notes
is the three month CDOR plus 20 basis points.

(B) In April 2002, the Company issued $500 million in floating rate notes due
2004 and $500 million in fixed rate notes due 2007 under the Company's
shelf registration statement with the Securities and Exchange Commission.
The interest rate on the floating rate notes is the three month LIBOR plus
25 basis points and the interest rate on the fixed notes is 5.25 percent.

Aggregate maturities of long-term debt for the five twelve-month periods
subsequent to June 28, 2002 are as follows (in millions): 2003 - $1,637; 2004 -
$1,230; 2005 - $1,516; 2006 - $11; and 2007 - $1,397.

At June 28, 2002 and December 31, 2001, the Company had $3.3 billion of amounts
available under domestic and international credit facilities. These amounts
serve as a back-up to the Company's domestic and international commercial paper
programs and support working capital needs. At June 28, 2002 and December 31,
2001, the Company had $27 million and $-0- million, respectively, of short-term
borrowings outstanding under these credit facilities.

At June 28, 2002 and December 31, 2001, approximately $1.7 billion and $2.3
billion, respectively, of borrowings due in the next 12 months were classified
as maturing after one year due to the Company's intent and ability through its
credit facilities to refinance these borrowings on a long-term basis.

At June 28, 2002 and December 31, 2001, the Company had available for issuance
approximately $0.7 billion and $1.7 billion, respectively, under a registration
statement with the Securities and Exchange Commission. To increase the amount
available for issuance, the Company intends to file a new registration statement
with the Securities and Exchange Commission sometime in the second half of 2002.
At June 28, 2002 and December 31, 2001, the Company had available for issuance
approximately $1.2 billion and $1.3 billion, respectively, under a Canadian
Medium Term Note Program. In addition, at June 28, 2002 and December 31, 2001,
the Company had available for issuance approximately $1.2 billion and $1
billion, respectively, under a Euro Medium Term Note Program.

The credit facilities and outstanding notes and debentures contain various
provisions that, among other things, require the Company to maintain a defined
leverage ratio and limit the incurrence of certain liens or encumbrances in
excess of defined amounts. These requirements currently are not, and it is not
anticipated they will become, restrictive to the Company's liquidity or capital
resources.

NOTE F - PREFERRED STOCK

In connection with the 1998 acquisition of Great Plains Bottlers and Canners,
Inc., the Company issued 401,528 shares of $1 par value voting convertible
preferred stock ("Great Plains series"). The mandatory conversion date for the
Great Plains series is August 7, 2003. As of June 28, 2002, 35,000 shares of the
Great Plains series have been voluntarily converted into 154,778 shares of
common stock.

-8-

COCA-COLA ENTERPRISES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE G - STOCK-BASED COMPENSATION PLANS

The Company granted approximately 7.9 million service-vested stock options to
certain executive and management level employees during the first six months of
2002. These options vest over a period of 3 years and expire 10 years from the
date of grant. All of the options were granted at an exercise price equal to the
fair market value of the stock on the grant date.

The Company granted 956,000 restricted stock shares and 124,000 restricted stock
units to certain key employees of the Company during the first sixth months of
2002. These awards vest upon continued employment for a period of at least 4
years.

An aggregate of 2.8 million shares of common stock were issued during the first
six months of 2002 from the exercise of stock options.

If compensation cost for the Company's grants under stock-based compensation
plans had been determined under FAS 123, the Company's net income applicable to
common shareowners, and basic and diluted net income per share applicable to
common shareowners for the quarter and six months ending June 28, 2002, would
approximate the pro forma amounts below (in millions, except per share data):

QUARTER ENDED SIX MONTHS ENDED
JUNE 28, 2002 JUNE 28, 2002
-------------------- --------------------
REPORTED PRO FORMA REPORTED PRO FORMA
-------- --------- -------- ---------

Net income applicable to common
shareowners .................... $ 214 $ 203 $ 224 $ 202
===== ===== ===== =====

Basic net income applicable to
common shareowners ............. $0.48 $0.45 $0.50 $0.45
===== ===== ===== =====

Diluted net income applicable to
common shareowners ............. $0.47 $0.44 $0.49 $0.44
===== ===== ===== =====

FAS 123, if fully adopted, would change the method for cost recognition on the
Company's stock-based compensation plans. FAS 123 does not apply to awards prior
to 1995, and additional awards in future years are possible. The estimated
effect of adopting FAS 123 for grants in the current year on basic and diluted
earnings per share is approximately ($0.03) and ($0.02), respectively.

NOTE H - SHARE REPURCHASES

Under the 1996 and 2000 share repurchase programs authorizing the repurchase of
up to 60 million shares, the Company can repurchase shares in the open market
and in privately negotiated transactions. During the first six months of 2002,
the Company did not repurchase any shares. A total of 26.7 million shares have
been repurchased under the programs since their inception.

Management considers market conditions and alternative uses of cash and/or debt,
balance sheet ratios, and shareowner returns when evaluating share repurchases.
Repurchased shares are added to treasury stock and are available for general
corporate purposes including acquisition financing and the funding of various
employee benefit and compensation plans. In 2002, the Company plans to use free
cash flow primarily for debt reduction.

-9-

COCA-COLA ENTERPRISES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE I - DERIVATIVES

The Company uses certain risk management instruments to manage its interest rate
and foreign exchange exposures. These instruments are accounted for as fair
value and cash flow hedges, as appropriate, in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended.

At June 28, 2002, a gain of approximately $1 million related to cash flow hedges
of forecasted international raw materials purchases was included in accumulated
other comprehensive income. Further, during the first six months of 2002, the
amount of ineffectiveness related to cash flow hedges of international raw
materials purchases was a gain of approximately $1 million.

The Company enters into certain nonfunctional currency borrowings to hedge net
investments in international subsidiaries. During the first six months of 2002,
the net amount recorded in accumulated comprehensive income related to these
borrowings was a loss of approximately $15 million.

NOTE J - RELATED PARTY TRANSACTIONS

The following table presents amounts included in the statement of operations for
transactions with The Coca-Cola Company ("TCCC"):

QUARTER ENDED SIX MONTHS ENDED
------------------- -------------------
JUNE 28, JUNE 29, JUNE 28, JUNE 29,
2002 2001 2002 2001
-------- -------- -------- --------
Income (expense) in millions:

Net operating revenues:
Direct marketing support ........... $ 212 $ 135 $ 389 $ 272
Fountain syrup and packaged product
sales ............................ 100 104 185 192
Cooperative trade arrangements ..... (93) (43) (160) (77)
Other transactions ................. 1 -- 2 1
------- ------- ------- -------
$ 220 $ 196 $ 416 $ 388
======= ======= ======= =======

Cost of sales:
Purchases of syrup, concentrate,
sweetener, and finished products . $(1,314) $(1,225) $(2,386) $(2,226)
======= ======= ======= =======

Selling, delivery, and administrative
expenses:
Operating expense support payments . $ 23 $ 27 $ 36 $ 42
Cooperative advertising programs ... -- (14) -- (26)
Operating expense reimbursements:
To TCCC .......................... (5) (4) (9) (7)
From TCCC ........................ 8 4 17 8
Reimbursement of repair costs ...... 13 13 25 26
------- ------- ------- -------
$ 39 $ 26 $ 69 $ 43
======= ======= ======= =======

-10-

COCA-COLA ENTERPRISES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE J - RELATED PARTY TRANSACTIONS (CONTINUED)

As of January 1, 2002 all costs in North America associated with customer
cooperative trade marketing programs ("CTM"), excluding certain specific
customers, will be incurred by the Company, and all costs for local media
programs in North America will be incurred by TCCC. Marketing support funding
from TCCC was increased for the net effect of the increased CTM cost and
decreased local media cost. The shift of CTM and local media costs would have
impacted classifications in 2001, but would not have had an impact on the
Company's 2001 net income. However, the impact of this shift on 2002 and future
operating income is dependent upon the level of CTM spending by the Company.

The Company entered into a multi-year agreement with TCCC to support profitable
growth in brands of TCCC in our territories ("Growth Incentive" program). Total
cash support expected to be received by the Company under the agreement in 2002
is $150 million. Of this amount, $30 million is being recognized during 2002 as
sales are recognized. The remaining $120 million ("volume growth funding") will
be earned only by attaining mutually established sales volume growth rates. The
Growth Incentive agreement establishes minimum targets for 2002 of 3 percent 192
ounce equivalent unit case sales volume ("Unit Case") growth in North America
and 5 percent Unit Case growth in Europe. Sales volume growth is determined
through a formula with adjustments for brand conversions, brand acquisitions,
and new brand introductions. Growth that exceeds the target in a geography
offsets any shortfalls in the other geography. For the first six months of 2002,
the shortfall in Europe was more than offset by performance in North America.

The entire Growth Incentive agreement can be canceled by either party at the end
of a fiscal year with at least six months' prior written notice. In addition,
during the first three quarters of any year, either party may cancel for ensuing
quarters the sales volume growth targets and cash support funding provisions of
the agreement for that year by providing ten days notice prior to the end of
such quarter. Upon such quarterly cancellation, all other provisions of the
agreement will remain in full force and effect. Volume growth funding is
advanced to the Company equally over the four quarters of the program year
within thirty days after the beginning of each quarter. The Company recognizes
quarterly volume growth funding as sales volume growth is attained as a
reduction of sales discounts and allowances within net revenues. Based on
year-to-date performance, the Company recognized the entire amount specified for
second-quarter 2002 and first-half of 2002 of $30 million and $60 million,
respectively.

The agreement provides for refunds of volume growth funding advances should the
Company not attain specified minimum sales volume growth targets and upon the
failure of performance by either party in specified circumstances. Accordingly,
should the Company not attain specified minimum sales volume growth targets in
the ensuing quarters of a given year, amounts recognized to date for that year
would be subject to refund to TCCC.

-11-

COCA-COLA ENTERPRISES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE K - GEOGRAPHIC OPERATING INFORMATION

The Company operates in one industry: the marketing, distribution, and
production of liquid nonalcoholic refreshments. On June 28, 2002, the Company
operated in 46 states in the United States, the District of Columbia, the 10
provinces of Canada (collectively referred to as the "North American"
territories), and in Belgium, continental France, Great Britain, Luxembourg,
Monaco, and the Netherlands (collectively referred to as the "European"
territories).

The following presents net operating revenues for the six months ended June 28,
2002 and June 29, 2001 and long-lived assets as of June 28, 2002 and December
31, 2001 by geographic territory (in millions):

2002 2001
--------------------------- ---------------------------
NET LONG- NET LONG-
OPERATING LIVED OPERATING LIVED
REVENUES ASSETS REVENUES ASSETS
----------- ------------- ------------ ------------

North American .. $6,244 $16,667 $5,631 $16,695
European ........ 1,846 4,194 1,780 4,148
------ ------- ------ -------
Consolidated .... $8,090 $20,861 $7,411 $20,843
====== ======= ====== =======

The Company has no material amounts of sales or transfers between its North
American and European territories and no significant United States export sales.

NOTE L - RESTRUCTURING AND OTHER CHARGES

During 2001, the Company recorded restructuring and other charges totaling $78
million. The restructuring charge related to a series of steps designed to
improve the Company's cost structure including the elimination of unnecessary
support functions following the consolidation of North America into one
operating unit and streamlining management of the North American operations
responsive to the current business environment.

Employees impacted by the restructuring were provided both financial and
nonfinancial severance benefits. Restructuring costs include costs associated
with involuntary terminations and other direct costs associated with
implementation of the restructuring. Salary and other benefits are being paid
over the severance period. Other direct costs include relocation costs and costs
of development, communication, and administration which are expensed as
incurred.

The table below summarizes the activity in the restructuring accrual for the six
months ended June 28, 2002 (in millions):

ACCRUED ACCRUED
BALANCE BALANCE
DECEMBER 31, JUNE 28,
RESTRUCTURING SUMMARY 2001 PAYMENTS 2002
- --------------------------------------------------------------------------------

Employee terminations ..............
Severance pay and benefits ....... $ 40 $ (16) $ 24
Other direct costs ............... 1 (1) --
------- ------- -----
Total .............................. $ 41 $ (17) $ 24
======= ======= =====

-12-

COCA-COLA ENTERPRISES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE M - EARNINGS PER SHARE

The following table presents information concerning basic and diluted earnings
per share (in millions, except per share data; per share data is calculated
prior to rounding to millions). Diluted loss per share equals basic loss per
share because dilutive securities are not considered in loss calculations.

QUARTER ENDED SIX MONTHS ENDED
------------------ ------------------
JUNE 28, JUNE 29, JUNE 28, JUNE 29,
2002 2001 2002 2001
-------- -------- -------- --------

Net income before cumulative effect of
accounting change .................... $ 215 $ 105 $ 226 $ 6
Cumulative effect of accounting
change ............................. -- -- -- (302)
----- ----- ----- ----
Net income (loss) ...................... 215 105 226 (296)
Preferred stock dividends .............. 1 1 2 2
----- ----- ----- ------
Basic and diluted net income (loss)
applicable to common shareowners ..... $ 214 $ 104 $ 224 $ (298)
===== ===== ===== ======
Basic average common shares
outstanding .......................... 449 419 448 419
Effect of dilutive securities:
Stock compensation awards ............ 9 8 8 --
----- ----- ----- ------
Diluted average common shares
outstanding .......................... 458 427 456 419
===== ===== ===== ======
Basic net income (loss) per share
applicable to common shareowners ..... $0.48 $0.25 $0.50 $(0.71)
===== ===== ===== ======
Diluted net income (loss) per share
applicable to common shareowners ..... $0.47 $0.24 $0.49 $(0.71)
===== ===== ===== ======

-13-

COCA-COLA ENTERPRISES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE N - COMPREHENSIVE INCOME (LOSS)

The following table (in millions) presents a calculation of comprehensive income
(loss), comprised of net income (loss) and other adjustments. Other adjustments
to comprehensive income (loss) may include minimum pension liability
adjustments, currency items such as foreign currency translation adjustments and
hedges of net investments in international subsidiaries, unrealized gains and
losses on certain investments in debt and equity securities, and changes in the
fair value of certain derivative financial instruments which qualify as cash
flow hedges. The Company provides income taxes on currency items, except for
income taxes on the impact of currency translations, as earnings from
international subsidiaries are considered to be indefinitely reinvested.

QUARTER ENDED SIX MONTHS ENDED
------------------ ------------------
JUNE 28, JUNE 29, JUNE 28, JUNE 29,
2002 2001 2002 2001
-------- -------- -------- --------

Net income (loss) ...................... $215 $105 $226 $(296)

Currency items, including tax effects
of net investment hedges ............. 43 (34) 26 10

Unrealized (loss) gain on securities,
net of tax ........................... (2) -- 3 1

Unrealized (loss) gain on cash flow
hedges, net of tax.................... (9) (10) (5) 26

Reclassifications into earnings for cash
flow hedges, net of tax .............. 6 7 3 8

Cumulative effect of adopting SFAS 133,
net of tax ........................... -- -- -- (26)
---- ---- ---- -----

Net adjustments to accumulated
comprehensive income (loss) .......... 38 (37) 27 19
---- ---- ---- -----

Comprehensive income (loss) ............ $253 $ 68 $253 $(277)
==== ==== ==== =====

NOTE O - ADOPTION OF SFAS NO. 142, "GOODWILL AND OTHER INTANGIBLE ASSETS"

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
141, "Business Combinations" ("FAS 141"), and Statement 142, "Goodwill and Other
Intangible Assets" ("FAS 142"), that supersede APB Opinion No. 16, "Business
Combinations," and APB Opinion No. 17, "Intangible Assets". The two statements
modify the method of accounting for business combinations entered into after
June 30, 2001 and address the accounting for intangible assets.

As of January 1, 2002, the Company no longer amortizes goodwill and franchise
license intangible assets with an indefinite life, but will instead evaluate
them for impairment annually under FAS 142.

-14-

COCA-COLA ENTERPRISES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE O - ADOPTION OF SFAS NO. 142, "GOODWILL AND OTHER INTANGIBLE ASSETS"
(CONTINUED)

The Company completed initial impairment tests under FAS 142 in the first
quarter of 2002. The Company's impairment tests for goodwill and franchise
license intangible assets compared the carrying amounts of the assets to their
fair values. Fair value was determined in accordance with the provisions of FAS
142 using present value techniques similar to those used internally by the
Company for evaluating acquisitions; comparisons to estimated market values were
also made. These valuation techniques, performed in consultation with
independent valuation professionals, involved projections of cash flows for ten
years, adopting a perpetuity valuation technique with an assumed long-term
growth rate of 3 percent, and discounting the projected cash flows, including
the perpetuity value, based on the Company's weighted average cost of capital.

A weighted average cost of capital of approximately 7 percent was utilized based
on an assumed capitalization structure of 55% debt and 45% equity. The Company's
actual weighted average cost of capital under its current capitalization
structure also approximates 7 percent. Changes in these assumptions could
materially impact the fair value estimates.

The Company performed goodwill impairment tests at its North American and
European group levels under FAS 142, which requires goodwill impairment testing
at the reporting unit level. In late 2001 and during first quarter 2002, the
Emerging Issues Task Force (EITF) of the FASB addressed the topic of when, if
ever, different indefinite-lived intangible assets, such as the Company's
territory-specific franchise license agreements, should be combined into a
single unit for purpose of performing impairment tests. This topic directly
impacted the Company's completion of impairment analyses. At the March 20-21,
2002 meeting, the EITF reached a consensus on Issue No. 02-7, "Unit of
Accounting for Testing Impairment of Indefinite-Lived Intangible Assets" that
outlines a number of factors to evaluate for determining whether
indefinite-lived intangible assets should be combined for impairment testing.
These factors include whether the assets are used together, whether the
marketing and branding strategy provide evidence that the intangible assets are
complementary, and whether the intangible assets as a group represent the
highest and best use of the assets. The Company concluded that the provisions of
EITF 02-7 require the Company to also test franchise license intangible assets
at the North American and European group levels.

The fair value impairment analyses under FAS 142 and EITF 02-7 concluded that
the fair values of goodwill and franchise license intangible assets exceed the
carrying book values of those assets. Impairment testing under FAS 142 at the
country level for each country the Company has license territories in would not
change the impact of adoption.

The transition provisions of FAS 141 prohibit changing amounts assigned to
assets and liabilities assumed in business combinations prior to July 1, 2001,
except in certain limited situations. Before adoption of FAS 141, the Company
allocated the excess of costs over net assets acquired on acquisitions to
franchise license intangible assets. The Company also provides deferred income
taxes on franchise license intangible assets that are not deductible for tax
purposes under FASB Statement 109, "Accounting for Income Taxes". FAS 141
specifically defines intangible assets and provides specific criteria to apply
in recognizing those intangible assets. Accordingly, effective with the Herb
acquisition in July 2001, the Company assigns values to franchise license
intangibles under FAS 141 and recognizes goodwill for the excess of costs over

-15-

COCA-COLA ENTERPRISES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE O - ADOPTION OF SFAS NO. 142, "GOODWILL AND OTHER INTANGIBLE ASSETS"
(CONTINUED)

net assets and franchise license intangible assets acquired. This excess
principally represents the synergistic values expected to be realized from the
acquisition.

Prior to FAS 142, franchise license intangible assets were amortized over the
maximum allowed period of 40 years. As this amortization cost was recognized,
the related deferred tax liability was recognized as a decrease to income tax
expense. Under FAS 142, previously recognized unamortized balances of franchise
license intangible assets and associated deferred income tax liabilities will
remain unchanged except for any impairment in the value of these assets or any
ultimate sale of territories. At December 31, 2001, the Company had
approximately $4.6 billion of deferred tax liabilities on franchise license
intangible assets. These deferred tax liabilities, while impacted by tax rate
changes and currency translations, will only decrease for the reasons above but
will increase for the effect of any tax deductions realized on tax deductible
franchise license assets.

Adoption of the non-amortization provisions of FAS 142 as of January 1, 2001
would have increased net income by approximately $62 million, net of $36 million
in income taxes, or $0.15 per common share, for the quarter ended June 29, 2001
and by approximately $124 million, net of $71 million in income taxes, or $0.30
per common share, for the six months ended June 29, 2001.

Changes in the carrying values of the Company's consolidated goodwill balance in
the first six months of 2002 were due to adjustments to the purchase price
allocations of acquisitions completed in 2001. Changes in the Company's
consolidated franchise license intangibles balance in the first six months of
2002 were primarily due to the effects of foreign currency translations.

On July 10, 2001, the Company completed the acquisition of 100% of the
outstanding common and preferred shares of Hondo Incorporated and Herbco
Enterprises, Inc., collectively known as Herb Coca-Cola, for consideration of
approximately $1.4 billion, including cash of $1 billion and 25 million shares
of common stock valued at approximately $400 million. In 2002, the Company
adjusted the allocation of the fair value of the assets acquired and liabilities
assumed in connection with the Herb Coca-Cola acquisition. The consideration
paid by the Company for Herb Coca-Cola was reduced by approximately $7 million
due to the final settlement of working capital balances in the second quarter of
2002. This settlement resulted in a return to CCE of approximately 400,000
shares held in escrow and returned to treasury stock. The Company is in the
process of finalizing the purchase price allocation; however, no significant
changes are anticipated.

NOTE P - COMMITMENTS AND CONTINGENCIES

In North America, the Company purchases PET (plastic) bottles from manufacturing
cooperatives. The Company has guaranteed payment of up to $285 million of
indebtedness owed by these manufacturing cooperatives to third parties. At June
28, 2002, these cooperatives had approximately $155 million of indebtedness
guaranteed by the Company. In addition, the Company has issued letters of credit
principally under self-insurance programs aggregating approximately $263
million.

-16-

COCA-COLA ENTERPRISES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE P - COMMITMENTS AND CONTINGENCIES (CONTINUED)

Under the Jumpstart programs with TCCC, the Company received payments from TCCC
for a portion of the cost of developing the infrastructure (consisting primarily
of people and systems) necessary to support the accelerated placements. The
Company recognizes the payments as cold drink equipment is placed and over the
period the Company has the potential requirement to move equipment, primarily
through 2008.

Under the programs, the Company agrees to: (1) purchase and place specified
numbers of venders/coolers or cold drink equipment each year through 2008; (2)
maintain the equipment in service, with certain exceptions, for a period of at
least 12 years after placement; (3) maintain and stock the equipment in
accordance with specified standards for marketing TCCC products; and (4) report
to TCCC during the period the equipment is in service whether, on average, the
equipment purchased under the programs has generated a stated minimum volume of
products of TCCC. Should the Company not satisfy these or other provisions of
the program, the agreement provides for the parties to meet to work out mutually
agreeable solutions. If the parties were unable to agree on an alternative
solution, TCCC would be able to seek a partial refund of amounts previously
paid. No refunds have ever been paid under this program, and the Company
believes the probability of a partial refund of amounts previously paid under
the program is remote. The Company believes it would in all cases resolve any
matters that might arise with TCCC.

The Company's and its subsidiaries' tax filings for various periods are
subjected to audit by tax authorities in most jurisdictions where they conduct
business. These audits may result in assessments of additional taxes that are
resolved with the authorities or potentially through the courts. Currently,
there are assessments involving certain of the Company's subsidiaries that may
not be resolved for many years. The Company believes it has substantial defenses
to questions being raised and would pursue all legal remedies should an
unfavorable outcome result. The Company believes it has adequately provided for
any ultimate amounts that would result from these proceedings, however, it is
too early to predict a final outcome in these matters.

In January 2002 Kmart Corporation filed for bankruptcy protection. The Company
is exposed to possible preference action claims for amounts paid to the Company
prior to the filing. It is not possible to predict the ultimate amount of
losses, if any, which might result from preference claims.

The Company is currently under investigation by the European Commission in
various jurisdictions for alleged abuses of an alleged dominant position under
Article 82 of the EU Treaty. The Company does not believe that it has a dominant
position in the relevant markets, or that its current or past commercial
practices violate EU law. Nonetheless, the Commission has considerable
discretion in reaching conclusions and levying fines, which are subject to
judicial review. The Commission has not notified the Company as to the timing
for reaching conclusions.

The Company has filed suit against two of its insurers to recover losses
incurred in connection with the 1999 European product recall. We are unable to
predict the final outcome of this action at this time.

-17-

COCA-COLA ENTERPRISES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE P - COMMITMENTS AND CONTINGENCIES (CONTINUED)

In 2000 the Company and TCCC were found by a Texas jury to be jointly liable in
a combined final amount of $15.2 million to five plaintiffs, each of whom is a
distributor of competing beverage products. These distributors had sued alleging
that the Company and TCCC engaged in unfair marketing practices. The Company is
appealing the decision and believes there are substantial grounds for appeal.
The complaint of four remaining plaintiffs is in discovery and has not yet gone
to trial. It is impossible to predict at this time the final outcome of the
Company's appeal in this matter or the ultimate costs under all of the
complaints.

The Company is a defendant in various other matters of litigation generally
arising out of the normal course of business. Although it is difficult to
predict the ultimate outcome of these cases, management believes, based on
discussions with counsel, that any ultimate liability would not materially
affect the Company's financial position, results of operations, or liquidity.

-18-

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

BUSINESS SUMMARY AND OBJECTIVES

The Company is the world's largest marketer, producer, and distributor of
products of The Coca-Cola Company ("TCCC"). The Company also distributes other
beverage brands in select markets. The Company operates in parts of 46 states in
the United States, all 10 provinces of Canada, and in portions of Europe,
including Belgium, continental France, Great Britain, Luxembourg, Monaco, and
the Netherlands.

We achieved strong financial results in the second-quarter of 2002. Our earnings
increased to $0.47 per diluted common share from comparable results of $0.29 per
share for the same quarter last year, including a $0.03 per share benefit in the
current quarter from the settlement of promotion programs and accruals. In North
America, we achieved growth above 1 1/2 percent despite the timing of the Easter
holiday, which reduced volume by approximately 1 percent. In Europe, our volume
growth slowed to approximately 1 1/2 percent in the second quarter. This rate
was below our expectations largely because of cooler and wetter weather than
normal. Despite this slower growth, it is important to note that in each of our
European territories, our volume growth outpaced the industry. We are confident
that during the second half of the year, growth rates will return to more normal
levels to allow us to achieve 2002 growth in Europe of approximately 4 percent.

We did not achieve our pricing goals in North America during the second quarter,
and the pricing performance during that quarter reflects the competitive nature
of the marketplace. While we remain committed to improving North American
pricing, we believe we must be competitive for the long-term health of our
brands and our company. Successful management of our operating expenses and
material costs has created some financial flexibility in generating solid
performance in 2002, but we clearly recognize that we cannot grow our business
long term by only controlling costs. Margin expansion is one of the most
critical factors to our long-term success and given our current outlook for cost
of goods, we believe we will have increasing opportunity for margin expansion in
the second half of this year.

OUTLOOK

We expect total volume growth of approximately 3 percent to 4 percent for 2002,
with North American volume growth of more than 3 percent and volume growth in
Europe of approximately 4 percent. We have revised our earnings per share
expectations for 2002 upward to a range of 91 cents to 96 cents, reflecting both
the promotional programs settlement and continued favorable interest rates.
Full-year currency-neutral EBITDA is expected to reach $2.35 billion to $2.4
billion. Although North American pricing was below expectations in the second
quarter, we believe pricing growth will improve in the third and fourth
quarters. We expect pricing growth in North America for the remainder of the
year to be in line with expected cost of goods increases. Our revised financial
goals for 2002 also assume low single-digit pricing increases in Europe on a
currency neutral basis, in the second half of 2002.

Marketing programs and new products are essential to ongoing volume growth. Our
marketing calendar for this fall includes the second Harry Potter program in
North America and Europe. We also have extensive plans for local football
activity and promotions in North America and for expanding Halloween promotions
in Europe. New brands and packages are planned for Europe, such as the first

-19-

Disney-branded juice drinks that will roll out in each country. We will also
expand penetration and distribution of recently introduced extensions, including
new Fanta flavors Fruit Twist, Madness, and Latina, as well as diet Coke with
Lemon and Coke light with Lemon. In North America, we expect Vanilla Coke to
contribute growth as we see its full benefit in our take-home channels
throughout the remainder of the year.

We are undertaking a multi-year business processes redesign, referred to as
Project Pinnacle, with the objective of enhancing shareowner value. The project
is designed to (i) develop standard global processes and to leverage synergies,
(ii) to increase information capabilities, and (iii) to provide system
flexibility. The project covers all functional areas of the business and is
staffed with associates from all aspects of the business with representatives
from both Europe and North America. We anticipate that completion through
implementation will encompass a three-year period beginning in 2002 and that the
cost to our Company will be approximately ($300) million with approximately
($200) million of that being capital costs. We project we will spend
approximately ($30) million in 2002 in development costs, none of which
represent capital costs. The operating and capital costs for this project are
factored into our current business plans. Our goal is to recover our investment
in this project by decreasing and sustaining lower administrative costs,
reducing the complexity of our core transaction systems, improving the speed at
which new or enhanced systems are delivered, increasing our information
capabilities for customers and suppliers, and providing flexibility for changes
from the business environment with minimal disruptions to our existing business.

Management's Discussion and Analysis should be read in conjunction with the
Company's accompanying unaudited condensed consolidated financial statements and
the accompanying footnotes along with the cautionary statements at the end of
this section.

RESULTS OF OPERATIONS

OVERVIEW

Consolidated EBITDA, or income before deducting interest, taxes, depreciation,
amortization, and other nonoperating expenses, was $748 million in the second
quarter of 2002, 27% higher than reported second quarter 2001 results of $591
million and 18% higher than comparable second quarter 2001 results. Reported
operating income increased to $492 million, 28% higher than comparable operating
income of $383 million, primarily due to increased margins resulting from lower
than expected cost of goods growth, as well as flat operating costs. The
increase also includes a $22 million benefit from the settlement of promotional
programs and accruals. The settlement of promotional programs and accruals
occurs regularly in our business. In this case, the adjustment was larger than
normal and we have noted it separately in our results. To more accurately
reflect our pricing activities, we also excluded this settlement from all net
pricing comparisons.

Consolidated average net pricing per case increased 1/2 percent in the second
quarter of 2002 compared to the second quarter of 2001, excluding the impact of
currency exchange rate fluctuations. These consolidated results include flat
pricing in North America and an increase in European pricing of 3 percent. Net
price per case is the invoice price charged to retailers less any promotional
allowances and excludes marketing credits received from franchisers. Our
consolidated bottle and can cost of sales per case was flat on a comparable and
currency-neutral comparable basis in the second quarter of 2002 compared to the
second quarter of 2001.

EBITDA is used as an indicator of operating performance and not as a replacement
of measures such as cash flows from operating activities and operating income
under generally accepted accounting principles in the United States. All per
case amounts are calculated on physical cases.

-20-

Our net income applicable to common shareowners was $214 million, or $0.47 per
diluted common share for the second quarter of 2002, compared to reported
net income applicable to common shareowners of $0.24 per diluted common share,
and comparable net income applicable to common shareowners of $0.29 per diluted
common share, for the second quarter of 2001, adjusted as described below.

All comparable 2001 results exclude the cumulative effect of $302 million in the
first quarter of 2001 for the change in our method of accounting for Jumpstart
payments, exclude franchise amortization of $98 million and $195 million for
second-quarter 2001 and first-half 2001, respectively, as if FASB Statement No.
142, "Goodwill and Other Intangible Assets", was in effect as of January 1,
2001, exclude a nonrecurring reduction in income taxes of $46 million in
second-quarter 2001, and include the Herb acquisition as of January 1, 2001.
Comparable volume growth also includes a one-day reduction to the number of
selling days in first-half 2001 to equate to the same number of days in
first-half 2002.

Our operating results in the second quarter of each year reflect the seasonality
of our business. Our unit sales traditionally are higher in the hotter months
during the second and third quarters, while costs such as interest,
depreciation, and amortization are not as significantly impacted by business
seasonality.

NET OPERATING REVENUES AND COST OF SALES

The Company's reported second-quarter 2002 net operating revenues increased 9
percent to nearly $4.45 billion, primarily reflecting the Herb acquisition and
the impact of improved volume. Comparable net operating revenues, including the
impact of acquisitions and adjusted for the impact of foreign currency
translations, increased 3 percent in the second quarter of 2002. The revenue
split between our North American and European operations was 77% and 23%,
respectively.

Currency neutral comparable bottle and can net price per case increased 1/2
percent in the second quarter and first half of 2002 compared to 2001, with
North America flat for the quarter and down 1/2 percent for the first half and
Europe up 3 percent for the quarter and first half of 2002. For the second
quarter of 2002, foreign currency translations did not materially impact
comparable revenue growth. For the first half of 2002, currency translations
reduced revenue growth by approximately 1/2 percent.

Comparable bottle and can cost of sales per case was flat in the second quarter
of 2002 compared to the second quarter of 2001. For the second quarter of 2002,
foreign currency translations did not materially impact comparable cost of sales
growth. Lower packaging material costs offset our increase in ingredient costs
for the quarter. Ingredient costs are impacted by the increase in carbonated
beverage concentrate costs for full-year 2002 of approximately 1 1/2 percent in
North America and 2 1/2 percent in Europe. We expect consolidated costs of sales
per case to grow less than 1 percent for the second half of 2002, excluding the
effects of currency translations.

-21-

VOLUME

Volume results, adjusted for acquisitions completed in 2001, and comparable
volume results, adjusted for one less selling day in first-quarter 2002, are
shown in the table below:

- --------------------------------------------------------------------------------
SECOND-QUARTER 2002 SIX-MONTHS 2002
---------------------------------------------
ACQUISITION ACQUISITION
ADJUSTED COMPARABLE ADJUSTED COMPARABLE
CHANGE CHANGE CHANGE CHANGE
- --------------------------------------------------------------------------------
Physical Case Bottle and Can
Volume:
Consolidated ................. 1 1/2% 1 1/2% 3 % 3 1/2%
North American Territories ... 1 1/2% 1 1/2% 3 % 3 1/2%
European Territories ......... 1 1/2% 1 1/2% 3 1/2% 4 %
- --------------------------------------------------------------------------------

For second-quarter 2002, non-carbonated brand volume in North America increased
nearly 25%, due primarily to Dasani, up nearly 40%, POWERade, up more than 13%,
and the success of our Minute Maid brands. Also in North America, diet Coke
volume, including diet Coke with lemon, grew more than 1 percent. In Europe,
diet Coke/Coca-Cola light grew more than 8 percent and Fanta experienced
double-digit volume growth.

Can volume grew approximately 1/2 percent in North America and declined
approximately 1 1/2 percent in Europe in the second quarter of 2002 compared to
the second quarter of 2001. 20-ounce PET volume grew more than 10 percent in
North America largely due to the initial introduction of Vanilla Coke, and 500ml
European PET volume grew more than 5 percent in the second quarter of 2002
compared to the second quarter of 2001.

PER SHARE DATA

For second-quarter 2002, our net income applicable to common shareowners was
$214 million, or $0.47 per diluted common share, versus reported second-quarter
2001 net income applicable to common shareowners of $104 million, or $0.24 per
diluted common share and comparable second-quarter 2001 net income applicable to
common shareowners of $130 million, or $0.29 per diluted common share. The
comparable results primarily reflect the impact of improved volume and lower
interest costs.

SELLING, DELIVERY, AND ADMINISTRATIVE EXPENSES

In second-quarter 2002, consolidated selling, delivery, and administrative
expenses as a percentage of net operating revenues decreased to 27.8% from
reported second-quarter 2001 results of 31.4% and comparable second quarter 2001
results of 28.6%. This decrease from comparable results is largely due to the
benefits of our restructuring announced in 2001. For second-quarter 2002, our
restructuring accrual decreased by approximately $4 million, due to expenditures
for severance pay and benefits, to approximately $24 million at June 28, 2002.

As discussed further under Accounting Developments, the Company implemented
Financial Accounting Standards Board Statement 142, "Goodwill and Other
Intangible Assets" ("FAS 142"). Under FAS 142, the Company no longer amortizes
goodwill and franchise license intangible assets. Adoption of the
non-amortization provisions of FAS 142 as of January 1, 2001 would have reduced
amortization expense by approximately $98 million and $195 million for the
quarterly and six month periods ending June 29, 2001, respectively. We also
completed our initial impairment tests under FAS 142 which supported the
carrying values of these assets and, accordingly, no impairment charge resulted
from FAS 142 adoption.

-22-

EITF No. 01-09, "Accounting for Consideration Given by a Vendor to a Customer or
Reseller of the Vendor's Products," is effective for the Company beginning
January 1, 2002, and requires certain selling expenses incurred by the Company
to be classified as deductions from revenue. Comparable amounts in prior years
are required to be reclassified in accordance with this EITF consensus. The
Company reclassified approximately $26 million and $46 million of selling
expenses as deductions in net operating revenues which were previously
classified as selling, delivery, and administrative expenses in the second
quarter and first half of 2001, respectively.

In January 2002, Kmart Corporation filed for bankruptcy protection. The Company
had approximately $20 million in trade receivables from Kmart at the date of
their bankruptcy filing. We are uncertain how much of these trade receivables we
will ultimately recover. In first-quarter 2002, the Company recognized the
potential losses on these accounts receivable by charging the amounts, net of
estimated recoverable portions, against the reserve for doubtful accounts. This
write-off had no impact on our results of operations for first-quarter 2002 as
the Company was adequately reserved for these losses.

TRANSACTIONS WITH THE COCA-COLA COMPANY

Total costs for purchases of concentrate, finished product, sweetener, and syrup
from TCCC included in cost of sales were $1,314 million for the second quarter
of 2002 as compared to $1,225 million in the second quarter of 2001. In the
second quarter of 2002 the Company recognized $212 million of direct marketing
support in net revenues as compared to $135 million in the second quarter of
2001. This increase from 2001 to 2002 was a result of higher volume and was
impacted by customer cooperative trade marketing programs ("CTM") and media cost
shifts and the $30 million in Growth Incentive funding recognized and discussed
further below. In the second quarter of 2002, the Company recognized
approximately $23 million of Jumpstart funding as a reduction of selling,
delivery, and administrative expenses, as compared to $27 million in the second
quarter of 2001. The Company expects to recognize approximately $70 million in
Jumpstart funding for full-year 2002.

Beginning in 2002 all costs in North America associated with CTM, excluding
certain specific customers, shifted to us and all costs for local media programs
in North America shifted to TCCC. Marketing support funding from TCCC was
increased for the net effect of the increased CTM cost and decreased local media
cost. Amounts paid under customer trade marketing programs to TCCC are included
as a reduction in net operating revenues and totaled $93 million for the second
quarter of 2002, as compared to $43 million for the second quarter of 2001. The
shift of CTM and local media costs would not have had an impact on the Company's
2001 net income. However, the impact of this shift on 2002 and future operating
income is dependent upon the level of CTM spending by the Company.

Sales to TCCC of bottle and can products and fountain syrup included in net
revenues totaled $100 million in the second quarter of 2002, as compared to $104
million in the second quarter of 2001.

The Company entered into a multi-year agreement with TCCC to support profitable
growth in brands of TCCC in our territories ("Growth Incentive" program). Total
cash support expected to be received by the Company under the agreement in 2002
is $150 million. Of this amount, $30 million is being recognized during 2002 as
sales are recorded. The remaining $120 million ("volume growth funding") will be
earned only by attaining mutually established sales volume growth rates. The
Growth Incentive agreement establishes minimum targets for 2002 of 3 percent 192
ounce equivalent unit case sales volume ("Unit Case") growth in North America
and 5 percent Unit Case growth in Europe. Sales volume growth is determined
through a formula with adjustments for brand conversions, brand acquisitions,

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and new brand introductions. Growth that exceeds the target in a geography
offsets any shortfalls in the other geography. For the first six months of 2002,
the shortfall in Europe was more than offset by performance in North America.

The entire Growth Incentive agreement can be canceled by either party at the end
of a fiscal year with at least six months' prior written notice. In addition,
during the first three quarters of any year, either party may cancel for ensuing
quarters the sales volume growth targets and cash support funding provisions of
the agreement for that year by providing ten days notice prior to the end of
such quarter. Upon such quarterly cancellation, all other provisions of the
agreement will remain in full force and effect.

Volume growth funding is advanced to the Company equally over the four quarters
of the program year within thirty days after the beginning of each quarter. The
Company recognizes quarterly volume growth funding as volume growth is attained
as a reduction of sales discounts and allowances within net revenues. Based on
year-to-date performance, the Company recognized the entire amount specified for
second quarter 2002 and first half of 2002 of $30 million and $60 million,
respectively.

The agreement provides for refunds of volume growth funding advances should the
Company not attain specified minimum sales volume growth targets and upon the
failure of performance by either party in specified circumstances. Accordingly,
should the Company not attain specified minimum sales volume growth targets in
the ensuing quarters of a given year, amounts recognized to date for that year
would be subject to refund to TCCC.

INTEREST EXPENSE

Second-quarter and year-to-date 2002 net interest expense decreased from
reported 2001 levels due to a decline in our weighted average cost of debt
partially offset by a higher average debt balance. The weighted average interest
rate for the second-quarter and first half of 2002 was 5.5 percent compared to
6.5 percent and 6.6 percent for second-quarter and full-year 2001, respectively.

INCOME TAXES

The Company's effective tax rates for the first six months of 2002 and 2001 were
approximately 35% and 53%, respectively, excluding the rate change benefit in
2001. The Company's second-quarter 2002 effective tax rate reflects expected
full-year 2002 pretax earnings combined with the beneficial tax impact of
certain international operations. Our effective tax rate for the remainder of
2002 is dependent upon operating results and may change if the results for the
year are different from current expectations.

CASH FLOW AND LIQUIDITY REVIEW

CAPITAL RESOURCES

Our sources of capital include, but are not limited to, cash flows from
operations, the issuance of public or private placement debt, bank borrowings,
and the issuance of equity securities. We believe that available short-term and
long-term capital resources are sufficient to fund our capital expenditure and
working capital requirements, scheduled debt payments, interest and income tax
obligations, dividends to our shareowners, acquisitions, and share repurchases.

At June 28, 2002, we had approximately $3.1 billion in available capital under
our public debt facilities which could be used for long-term financing,
refinancing of debt maturities, and refinancing of commercial paper. Of this
amount, we had (i) $0.7 billion in registered debt securities available for

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issuance under a registration statement with the Securities and Exchange
Commission, (ii) $1.2 billion in debt securities available under a Euro Medium
Term Note Program, and (iii) $1.2 billion in debt securities available under a
Canadian Medium Term Note Program for long-term financing needs. To increase the
amounts available for issuance, we intend to file a new registration statement
with the Securities and Exchange Commission sometime in the second half of 2002.

In addition, we satisfy seasonal working capital needs and other financing
requirements with short-term borrowings, under our commercial paper programs,
bank borrowings, and other credit facilities. At June 28, 2002 we had
approximately $1.6 billion outstanding in commercial paper. At June 28, 2002 we
had approximately $3.3 billion available as a back-up to commercial paper and
undrawn working capital lines of credit. We intend to continue refinancing
borrowings under our commercial paper programs and our short-term credit
facilities with longer-term fixed and floating rate financings. At the end of
second-quarter 2002, the Company's debt portfolio was 68% fixed rate debt and
32% floating rate debt.

SUMMARY OF CASH ACTIVITIES

Cash and cash investments increased $69 million during the first half of 2002
from net cash transactions. Our primary uses of cash were for debt payments
totaling $1,516 million and capital expenditures totaling $375 million. Our
primary sources of cash for second-quarter 2002 were proceeds from our
operations totaling $681 million and proceeds from the issuance of debt
aggregating $1,299 million.

Operating Activities: Operating activities resulted in $681 million of net cash
provided during second-quarter 2002 compared to $135 million of net cash
provided during the second quarter of 2001.

Investing Activities: Net cash used in investing activities resulted primarily
from our continued capital investments. We expect full-year 2002 capital
expenditures to be between $1.0 billion and $1.1 billion.

Financing Activities: The Company continues to refinance portions of its
short-term borrowings as they mature with short-term and long-term fixed and
floating rate debt.

FINANCIAL CONDITION

The decrease in net property, plant, and equipment resulted from depreciation
costs net of capital expenditures and translation adjustments. The increase in
franchise license intangible assets resulted primarily from translation
adjustments. The decrease in long-term debt primarily resulted from payments on
debt in excess of proceeds received and translation adjustments. The decrease in
the reserve for doubtful accounts resulted from the Company's recognition of
potential losses on Kmart accounts receivable, net of estimated recoverable
portions, against the reserve for doubtful accounts. The increase in treasury
stock was a result of the return of approximately 400,000 shares to treasury
after the final settlement of working capital balances associated with the Herb
acquisition.

In the first half of 2002, changes in currencies resulted in a gain in
comprehensive income of $26 million. As currency exchange rates fluctuate,
translation of the statements of operations for our international businesses
into U.S. dollars affects the comparability of revenues and expenses between
periods.

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KNOWN TRENDS AND UNCERTAINTIES

CONTINGENCIES

Under the Jumpstart programs with TCCC, the Company received payments from TCCC
for a portion of the cost of developing the infrastructure (consisting primarily
of people and systems) necessary to support the accelerated placements. The
Company recognizes the payments as cold drink equipment is placed and over the
period the Company has the potential requirement to move equipment, primarily
through 2008.

Under the programs, the Company agrees to: (1) purchase and place specified
numbers of venders/coolers or cold drink equipment each year through 2008; (2)
maintain the equipment in service, with certain exceptions, for a period of at
least 12 years after placement; (3) maintain and stock the equipment in
accordance with specified standards for marketing TCCC products; and (4) report
to TCCC during the period the equipment is in service whether, on average, the
equipment purchased under the programs has generated a stated minimum volume of
products of TCCC. Should the Company not satisfy these or other provisions of
the program, the agreement provides for the parties to meet to work out mutually
agreeable solutions. If the parties were unable to agree on an alternative
solution, TCCC would be able to seek a partial refund of amounts previously
paid. No refunds have ever been paid under this program, and the Company
believes the probability of a partial refund of amounts previously paid under
the program is remote. The Company believes it would in all cases resolve any
matters that might arise with TCCC.

The Company's and its subsidiaries' tax filings for various periods are
subjected to audit by tax authorities in most jurisdictions where they conduct
business. These audits may result in assessments of additional taxes that are
resolved with the authorities or potentially through the courts. Currently,
there are assessments involving certain of the Company's subsidiaries that may
not be resolved for many years. The Company believes it has substantial defenses
to questions being raised and would pursue all legal remedies should an
unfavorable outcome result. The Company believes it has adequately provided for
any ultimate amounts that would result from these proceedings, however, it is
too early to predict a final outcome in these matters.

In January 2002, Kmart Corporation filed for bankruptcy protection. The Company
is exposed to possible preference action claims for amounts paid to the Company
prior to the filing. It is not possible to predict the ultimate amount of
losses, if any, which might result from preference claims.

The Company is currently under investigation by the European Commission in
various jurisdictions for alleged abuses of an alleged dominant position under
Article 82 of the EU Treaty. The Company does not believe that it has a dominant
position in the relevant markets, or that its current or past commercial
practices violate EU law. Nonetheless, the Commission has considerable
discretion in reaching conclusions and levying fines, which are subject to
judicial review. The Commission has not notified the Company as to the timing
for reaching conclusions.

The Company has filed suit against two of its insurers to recover losses
incurred in connection with the 1999 European product recall. We are unable to
predict the final outcome of this action at this time.

In 2000 the Company and TCCC were found by a Texas jury to be jointly liable in
a combined final amount of $15.2 million to five plaintiffs, each of whom is a
distributor of competing beverage products. These distributors had sued alleging

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that the Company and TCCC engaged in unfair marketing practices. The Company is
appealing the decision and believes there are substantial grounds for appeal.
The complaint of four remaining plaintiffs is in discovery and has not yet gone
to trial. It is impossible to predict at this time the final outcome of the
Company's appeal in this matter or the ultimate costs under all of the
complaints.

At July 10, 2002 there were five federal and one state Superfund sites for which
the Company's involvement or liability as a potentially responsible party
("PRP") was unresolved. We believe any ultimate liability under these PRP
designations will not have a material adverse effect on our financial position,
cash flows, or results of operations. In addition, there were 33 federal and
nine state sites for which it had been concluded the Company either had no
responsibility, the ultimate liability amounts would be less than $100,000, or
payments made to date by the Company would be sufficient to satisfy the
Company's liability.

The Company is a defendant in various other matters of litigation generally
arising out of the normal course of business. Although it is difficult to
predict the ultimate outcome of these cases, management believes, based on
discussions with counsel, that any ultimate liability would not materially
affect the Company's financial position, results of operations, or liquidity.

ACCOUNTING DEVELOPMENTS

ADOPTION OF SFAS NO. 142, "GOODWILL AND OTHER INTANGIBLE ASSETS"

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
141, "Business Combinations" ("FAS 141"), and Statement 142, "Goodwill and Other
Intangible Assets" ("FAS 142"), that supersede APB Opinion No. 16, "Business
Combinations," and APB Opinion No. 17, "Intangible Assets". The two statements
modify the method of accounting for business combinations entered into after
June 30, 2001 and address the accounting for intangible assets.

As of January 1, 2002, the Company no longer amortizes goodwill and franchise
license intangible assets with an indefinite life, but will instead evaluate
them for impairment annually under FAS 142.

The Company completed initial impairment tests under FAS 142 in the first
quarter of 2002. The Company's impairment tests for goodwill and franchise
license intangible assets compared the carrying amounts of the assets to their
fair values. Fair value was determined in accordance with the provisions of FAS
142 using present value techniques similar to those used internally by the
Company for evaluating acquisitions; comparisons to estimated market values were
also made. These valuation techniques, performed in consultation with
independent valuation professionals, involved projections of cash flows for ten
years, adopting a perpetuity valuation technique with an assumed long-term
growth rate of 3 percent, and discounting the projected cash flows, including
the perpetuity value, based on the Company's weighted average cost of capital.

A weighted average cost of capital of approximately 7 percent was utilized based
on an assumed capitalization structure of 55% debt and 45% equity. The Company's
actual weighted average cost of capital under its current capitalization
structure also approximates 7 percent. Changes in these assumptions could
materially impact the fair value estimates.

The Company performed goodwill impairment tests at its North American and
European group levels under FAS 142, which requires goodwill impairment testing
at the reporting unit level. In late 2001 and during first quarter 2002, the
Emerging Issues Task Force (EITF) of the FASB addressed the topic of when, if
ever, different indefinite-lived intangible assets, such as the Company's
territory-specific franchise license agreements, should be combined into a
single unit for purpose of performing impairment tests. This topic directly

-27-

impacted the Company's completion of impairment analyses. At the March 20-21,
2002 meeting, the EITF reached a consensus on Issue No. 02-7, "Unit of
Accounting for Testing Impairment of Indefinite-Lived Intangible Assets" that
outlines a number of factors to evaluate for determining whether
indefinite-lived intangible assets should be combined for impairment testing.
These factors include whether the assets are used together, whether the
marketing and branding strategy provide evidence that the intangible assets are
complementary, and whether the intangible assets as a group represent the
highest and best use of the assets. The Company concluded that the provisions of
EITF 02-7 require the Company to also test franchise license intangible assets
at the North American and European group levels.

The fair value impairment analyses under FAS 142 and EITF 02-7 concluded that
the fair values of goodwill and franchise license intangible assets exceed the
carrying book values of those assets. Impairment testing under FAS 142 at the
country level for each country the Company has license territories in would not
change the impact of adoption.

The transition provisions of FAS 141 prohibit changing amounts assigned to
assets and liabilities assumed in business combinations prior to July 1, 2001,
except in certain limited situations. Before adoption of FAS 141, the Company
allocated the excess of costs over net assets acquired on acquisitions to
franchise license intangible assets. The Company also provides deferred income
taxes on franchise license intangible assets that are not deductible for tax
purposes under FASB Statement 109, "Accounting for Income Taxes". FAS 141
specifically defines intangible assets and provides specific criteria to apply
in recognizing those intangible assets. Accordingly, effective with the Herb
acquisition in July 2001, the Company assigns values to franchise license
intangibles under FAS 141 and recognizes goodwill for the excess of costs over
net assets and franchise license intangible assets acquired. This excess
principally represents the synergistic values expected to be realized from the
acquisition.

Prior to FAS 142, franchise license intangible assets were amortized over the
maximum allowed period of 40 years. As this amortization cost was recognized,
the related deferred tax liability was recognized as a decrease to income tax
expense. Under FAS 142, previously recognized unamortized balances of franchise
license intangible assets and associated deferred income tax liabilities will
remain unchanged except for any impairment in the value of these assets or any
ultimate sale of territories. At December 31, 2001, the Company had
approximately $4.6 billion of deferred tax liabilities on franchise license
intangible assets. These deferred tax liabilities, while impacted by tax rate
changes and currency translations, will only decrease for the reasons above but
will increase for the effect of any tax deductions realized on tax deductible
franchise license assets.

Adoption of the non-amortization provisions of FAS 142 as of January 1, 2001
would have increased net income by approximately $62 million, net of $36 million
in income taxes, or $0.15 per common share, for the quarter ended June 29, 2001
and by approximately $124 million, net of $71 million in income taxes, or $0.30
per common share, for the six months ended June 29, 2001.

CAUTIONARY STATEMENTS

Certain expectations and projections regarding future performance of the Company
referenced in this report are forward-looking statements. These expectations and
projections are based on currently available competitive, financial, and
economic data, along with the Company's operating plans and are subject to
future events and uncertainties. Among the events and uncertainties which could
adversely affect future periods are marketing and promotional programs that
result in lower than expected volume, efforts to manage price that adversely
affect volume, efforts to manage volume that adversely affect price, an

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inability to meet performance requirements for expected levels of various
support payments from TCCC, the cancellation or amendment of existing funding
programs with TCCC, material changes from expectations in the costs of raw
materials and ingredients, an inability to achieve the expected timing for
returns on cold drink equipment expenditures, an inability to place cold drink
equipment at required levels under our Jumpstart programs with TCCC, an
inability to meet volume growth requirements on an annual basis under the Growth
Incentive program with TCCC, an unfavorable outcome from the European Union
investigation, material changes in assumptions and the Company's cost of capital
used in completing impairment analyses under FAS 142, an inability to meet
projections for performance in newly acquired territories, potential assessment
of additional taxes resulting from audits conducted by tax authorities, and
unfavorable interest rate and currency fluctuations. We caution readers that in
addition to the above cautionary statements, all forward-looking statements
contained herein should be read in conjunction with the detailed cautionary
statements found on page 48 of the Company's Annual Report for the fiscal year
ended December 31, 2001.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have no material changes to the disclosure on this matter made in
"Management's Financial Review - Interest Rate and Currency Risk Management" on
Page 25 of our Annual Report to Shareowners for the year ended December 31,
2001.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In July 2002, BCI Coca-Cola Bottling Company of Los Angeles paid $878,090 in
settlement of any further liabilities with respect to the Operating Industries,
Inc. Superfund Site in Monterey Park, California.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K):

EXHIBIT INCORPORATED BY REFERENCE
NUMBER DESCRIPTION OR FILED HEREWITH
- ------- ------------------------------------------- -------------------------

12 Statements regarding computations of ratios Filed Herewith

(b) Reports on Form 8-K:

During second-quarter 2002, the Company filed the following current reports on
Form 8-K:

DATE OF REPORT DESCRIPTION
- -------------- ----------------------------------------------------------

April 12, 2002 Amending exhibits regarding cold drink equipment programs
with The Coca-Cola Company.

April 12, 2002 Press release dated April 11, 2002 announcing webcast on
April 18, 2002.

April 19, 2002 Press release dated April 15, 2002 announcing election of
Lowry Kline to succeed Summerfield Johnston as Chairman,
and election of Marvin Herb as director; press release
dated April 17, 2002 with first quarter 2002 financials.

May 7, 2002 Terms agreements dated as of April 22, 2002 relating to the
offer and sale of the Company's (i) 5.25% Notes due 2007,
and (ii) Floating Rate Notes due 2004; announcing webcast
on May 8, 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

COCA-COLA ENTERPRISES INC.
(Registrant)

Date: August 9, 2002 /s/ Patrick J. Mannelly
------------------------------
Patrick J. Mannelly
Senior Vice President and
Chief Financial Officer

Date: August 9, 2002 /s/ Michael P. Coghlan
------------------------------
Michael P. Coghlan
Vice President, Controller and
Principal Accounting Officer

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