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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 01-09300
COCA-COLA ENTERPRISES INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 58-0503352
(STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION
NUMBER)
2500 WINDY RIDGE PARKWAY, ATLANTA, GEORGIA 30339
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(770) 989-3000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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Common Stock, par value $1.00 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
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Indicate by check mark whether the registrant (1) has filed all reports 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
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of Common Stock held by nonaffiliates of the
registrant as of February 26, 1999 was $6,439,733,491.
There were 423,388,553 shares of Common Stock outstanding as of February
26, 1999.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Share Owners for the year
ended December 31, 1998, are incorporated by reference in Parts II and IV.
Portions of the registrant's Proxy Statement for the Annual Meeting of
Share Owners to be held on April 23, 1999 are incorporated by reference in Part
III hereof.
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TABLE OF CONTENTS
PAGE
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PART I
ITEM 1. BUSINESS.................................................... 1
Introduction................................................ 1
Relationship With The Coca-Cola Company..................... 1
Bottler Acquisitions Since December 31, 1997................ 2
Territories................................................. 3
Products.................................................... 4
Marketing................................................... 5
Raw Materials............................................... 5
North American Beverage Agreements.......................... 6
European Beverage Agreements................................ 11
Competition................................................. 13
Employees................................................... 13
Governmental Regulation..................................... 13
Financial Information On Industry Segments And Geographic
Areas................................................ 16
ITEM 2. PROPERTIES.................................................. 16
ITEM 3. LEGAL PROCEEDINGS........................................... 16
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......... 17
ITEM 4(A). EXECUTIVE OFFICERS OF THE COMPANY........................... 18
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS....................................... 20
ITEM 6. SELECTED FINANCIAL DATA..................................... 20
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................. 20
ITEM 7(A). QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISKS..................................................... 20
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA................. 21
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.................................. 21
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.......... 21
ITEM 11. EXECUTIVE COMPENSATION...................................... 21
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT................................................ 21
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............. 22
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K....................................................... 22
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PART I
ITEM 1. BUSINESS
INTRODUCTION
The Company is the world's largest marketer, distributor, and producer of
bottled and canned beverages of The Coca-Cola Company.
The Company was incorporated in 1944 under the laws of Delaware as a wholly
owned subsidiary of The Coca-Cola Company and became a public company in 1986.
At January 29, 1999, The Coca-Cola Company owned approximately 40% of the
Company's common stock.
The Company's bottling territories in North America and in Europe contain
approximately 353 million people. The Company estimates that it sold
approximately 3.8 billion equivalent cases (192 ounces of finished beverage
product) within its territories during 1998. About 90% of this volume consisted
of beverages produced and sold under licenses from The Coca-Cola Company.
The Company's Coca-Cola bottling rights within the United States are
perpetual; elsewhere, bottling rights have stated expiration dates. (See "North
American Beverage Agreements" and "European Beverage Agreements.")
References in this report to the "Company" include Coca-Cola Enterprises
Inc., and its subsidiaries and divisions, unless the context requires otherwise.
Population and sales data include bottling franchises acquired through January
31, 1999 as if they had been acquired January 1, 1998.
RELATIONSHIP WITH THE COCA-COLA COMPANY
The Coca-Cola Company is the Company's largest share owner. Four directors
of the Company are executive officers or former executive officers of The
Coca-Cola Company.
The Company and The Coca-Cola Company are parties to a number of
significant transactions and agreements incident to their respective businesses
and may enter into additional material transactions and agreements in the
future.
The Company conducts its business primarily under agreements with The
Coca-Cola Company. These agreements give the Company the exclusive right to
market, distribute, and produce beverage products of The Coca-Cola Company in
authorized containers in specified territories. These agreements provide The
Coca-Cola Company with the ability, in its sole discretion, to establish prices,
terms of payment, and other terms and conditions for the purchase of
concentrates and syrups from The Coca-Cola Company. See "North American Beverage
Agreements" and "European Beverage Agreements" below. Other significant
transactions and agreements include acquisitions of bottling territories,
arrangements for cooperative marketing, advertising expenditures, purchases of
sweeteners, and strategic marketing initiatives.
Since 1979, The Coca-Cola Company has assisted in the transfer of ownership
or financial restructuring of a majority of its United States bottler operations
and has assisted in similar transfers of bottlers operating outside the United
States. Certain bottlers and interests therein have been acquired by The
Coca-Cola Company, and certain of those have been sold to bottlers, including
the Company, which are believed by management of The Coca-Cola Company to be the
best suited to manage and develop these acquired operations. The Coca-Cola
Company has advised the Company that it may continue this reorganization of its
bottler system. See "Bottler Acquisitions Since December 31, 1997" below and
"Certain Relationships and Related Transactions -- Agreements and Transactions
with The Coca-Cola Company" in the Company's Proxy Statement for the Annual
Meeting of Share Owners to be held April 23, 1999 (the "Company's 1999 Proxy
Statement"); this information is incorporated by reference into Item 13 of this
report.
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BOTTLER ACQUISITIONS SINCE DECEMBER 31, 1997
Soutirages Luxembourgeois -- January 1, 1998.
Operating in Luxembourg
The Coca-Cola Bottling Group (Southwest), Inc. and Texas Bottling Group,
Inc. -- June 5, 1998.
Operating in Texas, Oklahoma, New Mexico, Colorado, and Kansas
The Coca-Cola Bottling Company of Bellingham -- June 12, 1998.
Operating in Washington State
Great Plains Bottlers and Canners, Inc. -- August 6, 1998.
Operating in Kansas, Nebraska, and South Dakota
Soo Coca-Cola Bottling, Inc. -- December 10, 1998.
Operating in the Upper Peninsula of Michigan
Magnolia Coca-Cola Bottling Company, The Coca-Cola Bottling Company of San
Angelo, The Coca-Cola Bottling Co. of Tucson, and Las Cruces Coca-Cola Bottling
Co. (NSL) (the Wolslager bottling group) -- December 31, 1998.
Operating in Texas, New Mexico, and Arizona
Cameron Coca-Cola Bottling Company, Inc. -- January 1, 1999.
Operating in Pittsburgh, Pennsylvania, Ohio, and West Virginia
Bryan Coca-Cola Bottling Company -- January 5, 1999.
Operating in East Texas
The Coca-Cola, Dr Pepper Bottling Company of Albuquerque -- January 6, 1999.
Operating in New Mexico and Arizona
Nacogdoches Coca-Cola Bottling Company and Sulphur Springs Coca-Cola Bottling
Company (the Ashcroft bottlers) -- January 7, 1999.
Operating in East Texas
Montgomery Coca-Cola Bottling Company, Inc. -- January 13, 1999.
Operating in Montgomery and southern Alabama
Perryton Coca-Cola Bottling Company, Inc. -- March 2, 1999.
Operating in West Texas and Oklahoma
The total cost of all of the Company's acquisitions since reorganization in
1986 is approximately $13 billion, including assumed and issued debt where
applicable. The Company intends to acquire only bottling businesses offering the
Company the ability to produce long-term share-owner value.
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TERRITORIES
The Company's bottling territories in North America are located in 46
states of the United States, the District of Columbia, and all ten provinces of
Canada. At December 31, 1998, these territories contained approximately 216
million people, representing approximately 69% of the population of the United
States and 94% of the population of Canada.
(NORTH AMERICA MAP)
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The Company's bottling territories in Europe consist of Great Britain,
Belgium, Luxembourg, the Netherlands, and most of France. The aggregate
population of these territories was approximately 137 million people at December
31, 1998.
(EUROPEAN MAP)
PRODUCTS
Within its North American territories the Company markets, distributes, and
produces beverage products of The Coca-Cola Company or its subsidiaries; these
products include Coca-Cola classic, caffeine free Coca-Cola classic, diet Coke,
caffeine free diet Coke, Sprite, diet Sprite, Cherry Coke, diet Cherry Coke,
Barq's, Citra, Fanta, Fresca, Fruitopia, Hi-C fruit drinks, Mello Yello, Minute
Maid and diet Minute Maid soft drinks, Minute Maid juices, Mr. PiBB, POWERaDE,
SURGE, and TAB. Substantially all of the beverages bearing the trademark
"Coca-Cola" or "Coke" (the "Coca-Cola Trademark Beverages") are available
throughout the Company's North American territories.
Additionally, the Company markets, distributes, and produces (or obtains
from authorized producers) Nestea products, under license from Coca-Cola Nestle
Refreshments Company, USA, and various noncola beverage products under the
trademarks of companies other than The Coca-Cola Company. Other products
marketed and distributed by the Company in select North American markets
include: Canada Dry, Dr Pepper, Diet Dr Pepper, Evian, Mendota Springs, NAYA,
Nestea, Cool from Nestea, diet Nestea, Schweppes, Seagrams, and Squirt.
Major products of The Coca-Cola Company and other companies marketed and
distributed by the Company in its European territories include Aquarius, Buxton
Mineral Water, caffeine free Coca-Cola, caffeine free Coca-Cola light, Canada
Dry, Capri Sun, Cherry Coke, Coca-Cola, Coca-Cola light, caffeine free diet
Coke, diet Coke, Dr Pepper, Fanta, Five Alive, Kia-Ora, Lilt, Malvern Waters,
Minute Maid juices, Nestea, Oasis, Perrier Mineral Water, Schweppes, Sprite,
Sprite light, and Vittel Water.
The Coca-Cola Company and other companies manufacture syrups and
concentrates, and in some cases the finished product, for sale to bottlers and
(in some territories) to fountain wholesalers. The Company's bottling and
canning operations first combine the syrup or concentrate with sweetener and
carbonated water then package the finished product in authorized containers for
sale and direct store delivery to wholesalers and/or retailers, depending on the
territory. See "Marketing" and "Raw Materials" below.
Approximately 75% of the Company's North American equivalent case sales in
1998 (excluding post-mix) represented caloric products and the balance
represented low-calorie products. "Post-mix" (sometimes called fountain syrup)
is syrup which is mixed with water and
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carbon dioxide at the time it is being dispensed into open containers, such as
cups, for immediate consumption.
MARKETING
The Company sells its products in a variety of packages authorized by The
Coca-Cola Company and other companies. In 1998, domestic and international
equivalent case sales of the Company, excluding post-mix syrup sales, were
packaged approximately 48% in cans, 48% in other nonrefillable packaging, and 4%
in refillable and pre-mix containers. Post-mix syrup accounted for approximately
13% of the Company's equivalent case sales in 1998.
The Company relies extensively on advertising and sales promotions in the
marketing of its products. The Coca-Cola Company and the other beverage
companies that supply concentrates, syrups, and finished products to the Company
make substantial advertising expenditures in all major media to promote sales in
the local areas served by the Company. The Company also benefits from national
advertising programs conducted by The Coca-Cola Company and other beverage
companies. Certain of the marketing expenditures by The Coca-Cola Company and
other beverage companies are made pursuant to annual arrangements. Although The
Coca-Cola Company has advised the Company that it intends to continue to provide
marketing support in 1999, it is not obligated to do so under either the
domestic or international beverage agreements, except as otherwise specifically
committed and such support in 1999 might not be at the level provided in 1998.
See "North American Beverage Agreements" and "European Beverage Agreements"
below.
Sales of the Company's products are seasonal, with the second and third
calendar quarters accounting for higher sales volumes than the first and fourth
quarters. The bottling territories in Europe have more volatile sales volumes
because of the higher sensitivity of European consumption to weather conditions.
RAW MATERIALS
In addition to concentrates, sweeteners, and finished product, the Company
purchases carbon dioxide, glass and plastic bottles, cans, closures, post-mix
packaging (such as plastic bags in cardboard boxes), and other packaging
materials. The Company generally purchases its raw materials, other than
concentrates, syrups, and sweeteners, from multiple suppliers. The beverage
agreements with The Coca-Cola Company provide that, with respect to the products
of The Coca-Cola Company, all authorized containers, closures, cases, cartons,
and other packages and labels must be purchased from manufacturers approved by
The Coca-Cola Company.
High fructose corn syrup is the principal sweetener used by the Company in
the United States and Canada for beverage products, other than low-calorie
products, of The Coca-Cola Company, although sugar is being used as a sweetener
in Western Canada during 1999. The Company and The Coca-Cola Company have
entered into arrangements for the purchase by the Company from The Coca-Cola
Company of substantially all of the Company's 1998-2002 requirements for
sweeteners in the United States. See "Certain Relationships and Related
Transactions -- Agreements and Transactions with The Coca-Cola Company --
Sweetener Requirements Agreement" in the Company's 1999 Proxy Statement, which
information is incorporated by reference into Item 13 of this report. In Europe,
the principal sweetener is sugar from sugar beets, purchased from multiple
suppliers. The Company does not separately purchase low-calorie sweeteners
because sweeteners for low-calorie beverage products of The Coca-Cola Company
are contained in the syrup or concentrate purchased by the Company from The
Coca-Cola Company.
The Company currently purchases its requirements for plastic bottles in the
United States from manufacturers jointly owned by it and other Coca-Cola
bottlers. Management of the Company believes that ownership interests in certain
suppliers and the self-manufacture of
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certain packages serve to reduce or manage costs. In Canada, a merchant supplier
is used. In Europe, the Company produces most of its plastic bottle requirements
using preforms purchased from various merchant suppliers.
There are no materials or supplies used by the Company which are currently
in short supply, although the supply of specific materials could be adversely
affected by strikes, weather conditions, governmental controls, or national
emergencies.
NORTH AMERICAN BEVERAGE AGREEMENTS
Domestic Cola and Allied Beverage Agreements in the United States with The
Coca-Cola Company
The Company purchases concentrate and syrup from The Coca-Cola Company and
produces, markets, and distributes its principal liquid nonalcoholic refreshment
products within the United States under two basic forms of beverage agreements
with The Coca-Cola Company: beverage agreements that cover the Coca-Cola
Trademark Beverages (the "Cola Beverage Agreements") and beverage agreements
that cover other carbonated and some noncarbonated beverages of The Coca-Cola
Company (the "Allied Beverages" and "Allied Beverage Agreements") (referred to
collectively in this report as the "Domestic Cola and Allied Beverage
Agreements"). See "Introduction" and "Products" above. The Company and each of
its bottling company subsidiaries are parties to one or more separate Cola
Beverage Agreements and to various Allied Beverage Agreements. In this section,
unless the context indicates otherwise, a reference to the Company refers to the
legal entity in the United States that is a party to the beverage agreements
with The Coca-Cola Company.
Pricing. Pursuant to the Domestic Cola and Allied Beverage Agreements, The
Coca-Cola Company establishes the prices charged to the Company for concentrates
and syrups for Coca-Cola Trademark Beverages and Allied Beverages. The Company
expects that net prices charged by The Coca-Cola Company in 1999 for syrup and
concentrates will increase approximately 3.0% above 1998 prices. The Coca-Cola
Company has no rights under the Domestic Cola and Allied Beverage Agreements to
establish the resale prices at which the Company sells its products.
Cola Beverage Agreements in the United States with The Coca-Cola Company
Exclusivity. The Cola Beverage Agreements provide that the Company will
purchase its entire requirements of concentrates and syrups for Coca-Cola
Trademark Beverages from The Coca-Cola Company at prices, terms of payment, and
other terms and conditions of supply, as determined from time to time by The
Coca-Cola Company in its sole discretion. The Company has the exclusive right to
distribute Coca-Cola Trademark Beverages for sale in authorized containers
within its territories. The Coca-Cola Company may determine, from time to time
in its sole discretion, what types of containers to authorize for use with
products of The Coca-Cola Company.
Transshipping. The Company may not sell Coca-Cola Trademark Beverages
outside its territories.
Company Obligations. The Company is obligated to maintain such plant and
equipment, staff, and distribution and vending facilities as are capable of
manufacturing, packaging, and distributing Coca-Cola Trademark Beverages in
accordance with the Cola Beverage Agreements and in sufficient quantities to
satisfy fully the demand for these beverages in its territories; to undertake
adequate quality control measures prescribed by The Coca-Cola Company; to
develop and to stimulate the demand for Coca-Cola Trademark Beverages in those
territories; to use all approved means, and spend such funds on advertising and
other forms of marketing, as may be reasonably required to satisfy that
objective; and to maintain such sound financial capacity as may be reasonably
necessary to assure performance by the Company of its obligations to
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The Coca-Cola Company. The Company is required to meet annually with The
Coca-Cola Company to present its marketing, management, and advertising plans
with respect to the Coca-Cola Trademark Beverages for the year, including
financial plans showing that the Company has the consolidated financial capacity
to perform its duties and obligations to The Coca-Cola Company. The Coca-Cola
Company may not unreasonably withhold approval of such plans. If the Company
carries out its plans in all material respects, it will be deemed to have
satisfied its obligations to develop, stimulate, and satisfy fully the demand
for the Coca-Cola Trademark Beverages and to maintain the requisite financial
capacity. Failure to carry out such plans in all material respects would
constitute an event of default that, if not cured or waived by The Coca-Cola
Company within 120 days of notice of the failure, would give The Coca-Cola
Company the right to terminate the Cola Beverage Agreements. If the Company at
any time fails to carry out a plan in all material respects in any geographic
segment of its territory, and if such failure is not cured within six months
after notice of the failure, The Coca-Cola Company may reduce the territory
covered by that Cola Beverage Agreement by eliminating the portion of the
territory in which such failure has occurred.
Acquisition of Other Bottlers. If the Company acquires control, directly
or indirectly, of any bottler of Coca-Cola Trademark Beverages in the United
States, or any party controlling a bottler of Coca-Cola Trademark Beverages in
the United States, the Company must cause the acquired bottler to amend its
agreement for the Coca-Cola Trademark Beverages to conform to the terms of the
Cola Beverage Agreements described above.
Term and Termination. The domestic Cola Beverage Agreements are perpetual,
but they are subject to termination by The Coca-Cola Company upon the occurrence
of an event of default by the Company. Events of default with respect to each
Cola Beverage Agreement include: (i) production or sale of any cola product not
authorized by The Coca-Cola Company; (ii) insolvency, bankruptcy, dissolution,
receivership, or the like; (iii) any disposition by the Company of any voting
securities of any bottling company without the consent of The Coca-Cola Company;
and (iv) any material breach of any obligation of the Company under that Cola
Beverage Agreement that remains uncured for 120 days after notice by The
Coca-Cola Company. If any Cola Beverage Agreement is terminated because of an
event of default, The Coca-Cola Company has the right to terminate all other
Cola Beverage Agreements held by the Company.
In addition, each Cola Beverage Agreement held by the Company provides that
The Coca-Cola Company has the right to terminate that Cola Beverage Agreement if
a person or affiliated group (with specified exceptions) acquires or obtains any
contract, option, conversion privilege, or other right to acquire, directly or
indirectly, beneficial ownership of more than 10% of any class or series of
voting securities of the Company. However, The Coca-Cola Company has agreed with
the Company that this provision will not apply with respect to the ownership of
any class or series of voting securities of the Company, although it would apply
to the voting securities of each bottling company subsidiary.
The provisions of the Cola Beverage Agreements which make it an event of
default to dispose of any Cola Beverage Agreement or voting securities of any
bottling company subsidiary without the consent of The Coca-Cola Company and
which prohibit the assignment or transfer of the Cola Beverage Agreements are
designed to preclude any person not acceptable to The Coca-Cola Company from
obtaining an assignment of a Cola Beverage Agreement or from acquiring any
voting securities of the Company's bottling subsidiaries. These provisions
prevent the Company from selling or transferring any of its interest in any
bottling operations without the consent of The Coca-Cola Company. These
provisions may also make it impossible for the Company to benefit from certain
transactions, such as mergers or acquisitions, involving any of the bottling
operations that might be beneficial to the Company and its share owners but
which are not acceptable to The Coca-Cola Company.
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Allied Beverage Agreements in the United States with The Coca-Cola Company
The Allied Beverages are beverages of The Coca-Cola Company, its
subsidiaries, and joint ventures that are either carbonated beverages but not
Coca-Cola Trademark Beverages or are certain noncarbonated beverages, such as
Hi-C fruit drinks, cold-fill Fruitopia, and Cool from Nestea. The Allied
Beverage Agreements contain provisions that are similar to those of the Cola
Beverage Agreements with respect to pricing, transshipping, authorized
containers, planning, quality control, transfer restrictions, and related
matters but have certain significant differences from the Cola Beverage
Agreements.
Exclusivity. Under the Allied Beverage Agreements, the Company has
exclusive rights to distribute the Allied Beverages in authorized containers in
specified territories. Like the Cola Beverage Agreements, the Company has
advertising, marketing, and promotional obligations, but, for some brands,
without restriction as to the marketing of products with similar flavors as long
as there is no manufacturing or handling of other products that would imitate,
infringe upon, or cause confusion with, the products of The Coca-Cola Company.
The Coca-Cola Company has the right to discontinue any or all Allied Beverages,
and the Company has a right, but not an obligation, under each of the Allied
Beverage Agreements (except under the Allied Beverage Agreements for Hi-C fruit
drinks and carbonated Minute Maid beverages) to elect to market any new beverage
introduced by The Coca-Cola Company under the trademarks covered by the
respective Allied Beverage Agreements.
Term and Termination. Each Allied Beverage Agreement has a term of ten or
fifteen years and is renewable by the Company for an additional ten or fifteen
years at the end of each term. The initial term for many of the Company's Allied
Beverage Agreements expired in 1996 and substantially all were renewed. The
Company intends to renew substantially all the Allied Beverage Agreements as
they expire. The Allied Beverage Agreements are subject to termination in the
event of default by the Company. The Coca-Cola Company may terminate an Allied
Beverage Agreement in the event of: (i) insolvency, bankruptcy, dissolution,
receivership, or the like; (ii) termination of the Cola Beverage Agreement of
the Company by either party for any reason; or (iii) any material breach of any
obligation of the Company under the Allied Beverage Agreement that remains
uncured after required prior notice by The Coca-Cola Company.
Noncarbonated Beverage Agreements in the United States with The Coca-Cola
Company
The Company purchases certain noncarbonated beverages such as isotonics,
teas, and juice drinks in finished form from The Coca-Cola Company, or its
designees and joint ventures, pursuant to the terms of marketing and
distribution agreements (the "Noncarbonated Beverage Agreements"). The
Noncarbonated Beverage Agreements contain provisions that are similar to the
Domestic Cola and Allied Beverage Agreements with respect to authorized
containers, planning, quality control, transfer restrictions, and related
matters but have certain significant differences therefrom.
Exclusivity. Unlike the Cola Beverage Agreements, which grant the Company
exclusivity in the distribution of the covered beverages in the territory, the
Noncarbonated Beverage Agreements grant exclusivity but permit The Coca-Cola
Company to test market the noncarbonated beverage products in the territory,
subject to the Company's right of first refusal to do so, and to sell the
noncarbonated beverages to commissaries for delivery to retail outlets in the
territory where noncarbonated beverages are consumed on-premise, such as
restaurants. The Coca-Cola Company must pay the Company certain fees for lost
volume, delivery, and taxes in the event of such commissary sales. Also, under
the Noncarbonated Beverage Agreements, the Company may not sell other beverages
in the same product category.
Pricing. The Coca-Cola Company, in its sole discretion, establishes the
pricing the Company must pay for the noncarbonated beverages but has agreed,
under certain
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circumstances, to give the Company the benefit of more favorable pricing if such
pricing offered to other Coca-Cola bottlers.
Term. Each of the Noncarbonated Beverage Agreements has a term of ten
years and is renewable by the Company for an additional ten years at the end of
each term. The initial term for most of the Noncarbonated Beverage Agreements
for POWERaDE will expire in 2004, and for Nestea and Minute Maid juices and
juice drinks will expire in 2007.
Marketing and Other Support in the United States from The Coca-Cola Company
The Coca-Cola Company has no obligation under the Domestic Cola and Allied
Beverage Agreements and Noncarbonated Beverage Agreements to participate with
the Company in expenditures for advertising, marketing and other support, but it
may, in its discretion, contribute to such expenditures and undertake
independent advertising and marketing activities, as well as cooperative
advertising and sales promotion programs, that would require the cooperation and
support of the Company. The Coca-Cola Company has provided support in 1998 but
is under no obligation to continue past levels of funding, and 1999 funding
could be less than that provided in 1998.
Post-Mix Sales and Marketing Agreements in the United States with The Coca-Cola
Company
In the past the Company has sold and delivered the post-mix products of The
Coca-Cola Company pursuant to one-year post-mix distributorship appointments; in
1998, the Company signed a five-year distributorship appointment ending on
December 31, 2002. The appointment is terminable by either party without cause
upon ten days' written notice. In 1998, the Company sold and/or delivered such
post-mix products in all of its major territories in the United States. Under
the terms of the appointment, the Company is authorized to distribute such
syrups to retailers for dispensing to consumers within the United States. Unlike
the Domestic Cola and Allied Beverage Agreements, there is no exclusive
territory, and the Company faces competition not only from sellers of other
post-mix syrups but from other sellers of post-mix syrups of The Coca-Cola
Company (including The Coca-Cola Company). Depending on the territory, the
Company is involved in the sale, distribution, and marketing of post-mix syrups
in differing degrees. In some territories, the Company sells syrup on its own
behalf, but the primary responsibility for marketing lies with The Coca-Cola
Company. In other territories, the Company is responsible for marketing post-mix
syrup to certain segments of the business. See "Certain Relationships and
Related Transactions -- Agreements and Transactions with The Coca-Cola
Company -- Sales of Syrups, Bottle and Can Products and Agency Billing and
Delivery Arrangements" in the Company's 1999 Proxy Statement; this information
is incorporated by reference into Item 13 of this report.
Beverage Agreements in the United States with Other Licensors
The beverage agreements in the United States between the Company and other
licensors of beverage products and syrups contain restrictions generally similar
in effect to those in the Domestic Cola and Allied Beverage Agreements as to
trade names, approved bottles, cans and labels, sale of imitations, and causes
for termination. Those agreements generally give those licensors the unilateral
right to change the prices for their products and syrups at any time in their
sole discretion. Some of these beverage agreements have limited terms of
appointment and, in most instances, prohibit the Company from dealing in
products with similar flavors in certain territories. The agreements with
subsidiaries of Cadbury Schweppes plc, which represented in 1998 approximately
7% of the beverages sold by the Company in the United States and the Caribbean,
provide that the parties will give each other at least one year's notice prior
to terminating the agreement for any brand, and pay certain fees in some
circumstances. Also, the Company agreed that it would not cease distributing Dr
Pepper brand products prior to December 31, 2005 or Canada Dry, Schweppes, or
Squirt brand products prior to December 31,
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2001. The termination provisions for Dr Pepper renew for five-year periods;
those for the other Cadbury brands renew for three-year periods.
Canadian Beverage Agreements with The Coca-Cola Company
Coca-Cola Bottling Ltd., the Company's bottler in Canada, sells,
distributes, and produces Coca-Cola Trademark Beverages, Allied Beverages, and
noncarbonated beverages of The Coca-Cola Company and Coca-Cola Ltd., an
affiliate of The Coca-Cola Company ("Coca-Cola Beverage Products") in its
territories pursuant to license agreements and arrangements with Coca-Cola Ltd.,
and in certain cases, with The Coca-Cola Company ("Canadian Beverage
Agreements"). The Canadian Beverage Agreements are similar to the Domestic Cola
and Allied Beverage Agreements with respect to authorized containers, planning,
quality control, transshipping, transfer restrictions, termination, and related
matters but have certain significant differences therefrom.
Exclusivity. The Canadian Beverage Agreement for Coca-Cola Trademark
Beverages gives Coca-Cola Bottling Ltd. the exclusive right to distribute
Coca-Cola Trademark Beverages in its territories in bottles authorized by
Coca-Cola Ltd. Coca-Cola Bottling Ltd. also is authorized on a nonexclusive
basis to sell, distribute, and produce canned, pre-mix and post-mix Coca-Cola
Trademark Beverages in such territories. At present, there are no other
authorized producers or distributors of canned, pre-mix, or post-mix Coca-Cola
Trademark Beverages in Coca-Cola Bottling Ltd.'s territories, and Coca-Cola
Bottling Ltd. has been advised by Coca-Cola Ltd. that there are no present
intentions to authorize any such producers or distributors in the future. In
general, the Canadian Beverage Agreement for Coca-Cola Trademark Beverages
prohibits Coca-Cola Bottling Ltd. from producing or distributing beverages other
than the Coca-Cola Trademark Beverages unless Coca-Cola Ltd. has given Coca-Cola
Bottling Ltd. notice that it approves the production and distribution of such
beverages.
Pricing. An affiliate of The Coca-Cola Company supplies the concentrates
for the Coca-Cola Trademark Beverages and may establish and revise at any time
the price of concentrates, the payment terms, and the other terms and conditions
under which Coca-Cola Bottling Ltd. purchases concentrates for the Coca-Cola
Trademark Beverages. The Company expects that net prices charged in 1999 for
concentrates will increase approximately 3.0% above 1998 prices. Unlike other
beverage agreements in other parts of the world, Coca-Cola Ltd. may, in its sole
discretion, establish maximum prices at which the Coca-Cola Trademark Beverages
may be sold by Coca-Cola Bottling Ltd. to its retailers. Coca-Cola Ltd. may also
establish maximum retail prices for such beverages, and Coca-Cola Bottling Ltd.
is required to use its best efforts to maintain such maximum retail prices.
Coca-Cola Bottling Ltd. may not require a deposit on any container used by it
for the sale of the Coca-Cola Trademark Beverages unless it is required by law
or approved by Coca-Cola Ltd. and, if a deposit is required, such deposit may
not exceed the greater of the minimum deposit required by law or the deposit
approved by Coca-Cola Ltd.
Term. The Canadian Beverage Agreements for Coca-Cola Trademark Beverages
expire on July 28, 2007, with provisions to renew for two additional terms of
ten years each, provided generally that Coca-Cola Bottling Ltd. has complied
with and continues to be capable of complying with their provisions. Coca-Cola
Bottling Ltd.'s authorizations to sell, distribute, and produce pre-mix and
post-mix Coca-Cola Trademark Beverages may be terminated by either party on
ninety days' notice.
Marketing and Other Support. Coca-Cola Ltd. has no obligation under the
Canadian Beverage Agreements to participate with Coca-Cola Bottling Ltd. in
expenditures for advertising, marketing and other support. However, it may, in
its discretion, contribute to such expenditures and undertake independent
advertising and marketing activities, as well as cooperative advertising and
sales promotion programs, that would require the cooperation and support of the
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Company. Coca-Cola Ltd. has provided support in 1998 but is under no obligation
to continue past levels of funding, and 1999 funding could be less than provided
in 1998.
Other Coca-Cola Beverage Products. The license agreements and arrangements
of Coca-Cola Bottling Ltd. with Coca-Cola Ltd., and in certain cases, with The
Coca-Cola Company, for the Coca-Cola Beverage Products other than Coca-Cola
Trademark Beverages are on terms generally similar to those contained in the
license agreement for the Coca-Cola Trademark Beverages.
Beverage Agreements in Canada with Other Licensors
Coca-Cola Bottling Ltd. has several license agreements and arrangements
with other licensors, including license agreements with subsidiaries of Cadbury
Schweppes plc having terms expiring in July 2002 and December 2036, each being
renewable for successive five-year terms until terminated by either party. These
beverage agreements generally give Coca-Cola Bottling Ltd. the exclusive right
to produce and distribute authorized beverages in authorized packaging in
specified territories. These beverage agreements also generally provide flexible
pricing for the licensors, and in many instances, prohibit Coca-Cola Bottling
Ltd. from dealing in beverages confusing with, or imitative of, the authorized
beverages. These agreements contain restrictions generally similar to those in
the Canadian Beverage Agreements regarding the use of trademarks, approved
bottles, cans and labels, sales of imitations, and causes for termination. On
December 11, 1998, The Coca-Cola Company announced that it was buying the
beverage brands of Cadbury Schweppes plc in various countries, including Canada.
This transaction is subject to regulatory review in a number of countries and
certain other approvals; it is expected to be closed in mid-1999.
EUROPEAN BEVERAGE AGREEMENTS
European Beverage Agreements with The Coca-Cola Company
The Company's bottlers in the Netherlands, Belgium, and France
(collectively the "Company Continental Bottlers") and the Company's bottlers in
Great Britain and Luxembourg (which together with the Company Continental
Bottlers are collectively called the "Company European Bottlers"), operate in
their respective territories under agreements with The Coca-Cola Company and The
Coca-Cola Export Corporation, dated July 26, 1996 for the Company Continental
Bottlers, February 10, 1997 for the British bottler, and January 30, 1998 for
the Luxembourg bottler (the "European Beverage Agreements"); these agreements
have certain significant differences from the beverage agreements described
above. The Company believes that the European Beverage Agreements are
substantially similar to other agreements between The Coca-Cola Company and
other European bottlers of Coca-Cola Trademark Beverages and Allied Beverages.
Exclusivity. Subject to the European Supplemental Agreement, described
below in this report, and certain minor exceptions, the Company European
Bottlers have the exclusive rights granted by The Coca-Cola Company in their
territories to sell the beverages covered by their respective European Beverage
Agreements in glass bottles, plastic bottles, and/or cans. The covered beverages
include Coca-Cola Trademark Beverages, Allied Beverages, noncarbonated
beverages, and certain beverages not sold in the United States. See "Products"
above. The Coca-Cola Company has retained the rights, under certain
circumstances, to produce and sell, or authorize third parties to produce and
sell, the beverages in any other manner or form within the territories. The
Coca-Cola Company has further granted certain Company European Bottlers a
nonexclusive authorization to package and sell post-mix and/or pre-mix beverages
in their territories.
Transshipping. The Company European Bottlers are prohibited from making
sales of the beverages outside of their territories, or to anyone intending to
resell the beverages outside their
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territories, without the consent of The Coca-Cola Company, except for sales
arising out of an order from a customer in another member state of the European
Union or for export to another such member state. The European Beverage
Agreements also contemplate that there may be instances in which large or
special buyers have operations transcending the boundaries of the territories,
and in furtherance of this, the Company European Bottlers and The Coca-Cola
Company are cooperating in sales to such buyers.
Pricing. The European Beverage Agreements provide that the sales of
beverage base and other goods to the Company European Bottlers are at prices
which are set from time to time by The Coca-Cola Company. The Company expects
that net prices charged in 1999 by The Coca-Cola Company for syrup, concentrate,
and other goods will increase approximately 4.3% over 1998 prices.
Term and Termination. The European Beverage Agreements expire July 26,
2006 for the Company Continental Bottlers, February 10, 2007 for the British
bottler, and January 30, 2008 for the Luxembourg bottler, unless terminated
earlier as provided therein. If the European Bottlers have fully complied with
the agreements during the initial term, are "capable of the continued promotion,
development, and exploitation of the full potential of the business", and
request an extension of the agreement, an additional ten-year term may be
granted at the sole discretion of The Coca-Cola Company. The Coca-Cola Company
is given the right to terminate the European Beverage Agreements before the
expiration of the stated term upon the insolvency, bankruptcy, nationalization,
or similar condition of the Company European Bottlers or the occurrence of a
default under the European Beverage Agreements which is not remedied within 60
days of notice of the default being given by The Coca-Cola Company. The European
Beverage Agreements may be terminated by either party in the event foreign
exchange is unavailable or local laws prevent performance. The post-mix and
pre-mix authorizations are terminable by either party with 90 days' prior
notice.
European Supplemental Agreement with The Coca-Cola Company
In addition to the European Beverage Agreements described above, the
Company European Bottlers, The Coca-Cola Company, and The Coca-Cola Export
Corporation are parties to a supplemental agreement (the "European Supplemental
Agreement") with regard to the Company European Bottlers' rights pursuant to the
European Beverage Agreements. The European Supplemental Agreement permits the
Company European Bottlers to prepare, package, distribute, and sell the
beverages covered by any of the Company European Bottlers' European Beverage
Agreements in any other territory of another Company European Bottler, provided
that the Company and The Coca-Cola Company shall have reached agreement upon a
business plan for such beverages. The European Supplemental Agreement may be
terminated, either in whole or in part by territory, by The Coca-Cola Company at
any time with 90 days' prior written notice.
Marketing and Other Support in Europe from The Coca-Cola Company
The Coca-Cola Company has no obligation under the European Beverage
Agreements to participate with the Company in expenditures for advertising,
marketing and other support, but it may, in its discretion, contribute to such
expenditures and undertake independent advertising and marketing activities, as
well as cooperative advertising and sales promotion programs, that would require
the cooperation and support of the Company. The Coca-Cola Company has provided
support in 1998 but is under no obligation to continue past levels of funding,
and 1999 funding could be less than that provided in 1998.
Beverage Agreements in Europe with Other Licensors
The beverage agreements between the Company and other licensors of beverage
products and syrups generally give those licensors the unilateral right to
change the prices for their
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products and syrups at any time in their sole discretion. Some of these beverage
agreements have limited terms of appointment and, in most instances, prohibit
the Company from dealing in products with similar flavors. Those agreements
contain restrictions generally similar in effect to those in the European
Beverage Agreements as to trade names, approved bottles, cans and labels, sale
of imitations, planning, and causes for termination. As a condition to Cadbury
Schweppes plc's sale of its 51% interest in the British bottler to the Company
in February 1997, the Company entered into agreements concerning certain aspects
of the Cadbury Schweppes products distributed by the British bottler. These
agreements impose obligations upon the Company with respect to the marketing,
sale, and distribution of Cadbury Schweppes products within the British
bottler's territory. These agreements further require the British bottler to
achieve certain agreed growth rates for Cadbury Schweppes brands and grant
certain rights and remedies to Cadbury Schweppes if these rates are not met.
These agreements also place some limitations upon the British bottler's ability
to discontinue Cadbury Schweppes brands, and recognize the exclusivity of
certain Cadbury Schweppes brands in their respective flavor categories. The
British bottler is given the first right to any new Cadbury Schweppes brands
introduced in the territory. These agreements run through 2012 and are
automatically renewed for a ten-year term thereafter unless terminated by either
party. On December 11, 1998, The Coca-Cola Company announced that it was buying
beverage brands of Cadbury Schweppes plc in various countries, including all
countries in which the Company European Bottlers operate except for France. This
transaction is subject to regulatory review in a number of countries and certain
other approvals; it is expected to be closed in mid-1999.
COMPETITION
The liquid nonalcoholic refreshment business is highly competitive.
Competition exists among all beverages, including soft drinks, isotonics, tea,
tea drinks, juices, juice drinks, coffee, coffee drinks, water, beer, wine, wine
coolers, milk and milk drinks, and bottled waters. Competitors in this business
include bottlers and distributors of beverages marketed and advertised at
international, national, regional, and local levels, as well as chain store and
private label beverages. Information on sales in the liquid nonalcoholic
refreshment business is not readily available.
Brand recognition and pricing are significant factors affecting the
Company's competitive position, but the consumer and customer goodwill
associated with the trademarks of its products is the most favorable factor for
the Company. Other competitive factors among beverage distributors include
marketing, distribution methods, service to the trade, and the management of
sales promotion activities. Vending machine sales, packaging changes, and
relationships with fountain customers are also competitive factors. The
introductions of new products and packages have been major competitive elements
in the liquid nonalcoholic refreshment industry.
EMPLOYEES
At January 31, 1999, the Company had approximately 66,000 employees,
approximately 9,000 of whom were in Europe. The Company is a party to 151
collective bargaining agreements covering approximately 15,300 of its North
American employees. These collective bargaining agreements expire at various
dates through 2004. The Company has no reason to believe that it will be unable
to renegotiate any of these agreements on satisfactory terms. Management of the
Company believes that the Company's relations with its employees are generally
good.
GOVERNMENTAL REGULATION
Packaging
Anti-litter measures have been enacted in the United States in California,
Connecticut, Delaware, Iowa, Maine, Massachusetts, Michigan, New York, Oregon,
Vermont, and the City of
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Columbia, Missouri, some of which prohibit the sale of certain beverages,
whether in refillable or nonrefillable containers, unless a deposit is charged
by the retailer for the container. The retailer or redemption center refunds all
or some of the deposit to the customer upon the return of the container. The
containers are then returned to the bottler, which, in most jurisdictions, must
pay the refund and, in certain others, must also pay a handling fee. In
California, a levy is imposed on beverage containers to fund a waste recovery
system. In the past, similar legislation has been proposed but not adopted
elsewhere, although the Company anticipates that additional jurisdictions may
enact such laws. Massachusetts requires the creation of a deposit transaction
fund by bottlers and the payment to the state of balances in that fund that
exceed three months of deposits received, net of deposits repaid to customers
and interest earned. Michigan also has a statute requiring bottlers to pay to
the state unclaimed container deposits.
In Canada, soft drink containers are subject to waste management measures
in each of the ten provinces. Seven provinces have forced deposit schemes, of
which three have half-back deposit systems whereby a deposit is collected from
the consumer and one-half of the deposit amount is returned upon redemption. In
Manitoba a levy is imposed on beverage containers to fund a multi-material
recovery system. Prince Edward Island requires all soft drink beverages to be
sold in refillable containers. Regulations in Ontario, which are currently not
being enforced by the government, require that sales by a bottler of soft drink
beverages in refillable containers must meet a minimum percentage of total sales
of soft drink beverages by such bottler in refillable and nonrefillable
containers within that bottler's sales areas. It is acknowledged that there is
widespread industry noncompliance with such regulations.
The European Commission has issued a packaging and packing waste directive
which is in the process of being incorporated into the national legislation of
the member states. This will result in targets being set for the recovery and
recycling of household, commercial, and industrial packaging waste and impose
substantial responsibilities upon bottlers and retailers for implementation.
The Company has taken actions to mitigate the adverse effects resulting
from legislation concerning deposits, restrictive packaging, and escheat of
unclaimed deposits which impose additional costs on the Company. The Company is
unable to quantify the impact on current and future operations which may result
from such legislation if enacted or enforced in the future, but the impact of
any such legislation could be significant if widely enacted or enforced.
Excise and Value Added Taxes
Excise taxes on sales of soft drinks have been in place in various states
in the United States for several years. The states in which the Company operates
that currently impose such taxes are Arkansas, North Carolina, Tennessee,
Washington, and West Virginia. In addition, the state of Hawaii has imposed a
special tax on glass containers. To the knowledge of management of the Company,
no similar legislation has been enacted in any other markets served by the
Company. Proposals have been introduced in certain states and localities that
would impose a special tax on beverages sold in nonrefillable containers as a
means of encouraging the use of refillable containers. However, the Company's
management is unable to predict whether such additional legislation will be
adopted.
Value added tax on soft drinks ranges from 3% to 21% within the Company's
bottling territories in Canada and the European Community. In addition, excise
taxes on sales of soft drinks are in place in Belgium, France, and the
Netherlands. The existence and level of this indirect taxation on the sale of
soft drinks is now a matter of legal and public debate given the need for
further tax harmonization within the European Community.
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California Legislation
A California law requires that any person who exposes another to a
carcinogen or a reproductive toxicant must provide a warning to that effect.
Because the law does not define quantitative thresholds below which a warning is
not required, virtually all manufacturers of food products are confronted with
the possibility of having to provide warnings due to the presence of trace
amounts of defined substances. Regulations implementing the law exempt
manufacturers from providing the required warning if it can be demonstrated that
the defined substances occur naturally in the product or are present in
municipal water used to manufacture the product. The Company has assessed the
impact of the law and its implementing regulations on the Company's beverage
products and has concluded that none of the Company's products currently
requires a warning under the law. The Company cannot predict whether or to what
extent food industry efforts to minimize the law's impact on food products will
succeed, nor can the Company predict what impact, either in terms of direct
costs or diminished sales, that imposition of the law may have.
Underground Storage Tanks and Other Environmental Regulations
Substantially all of the facilities of the Company are subject to laws and
regulations dealing with above-ground and underground fuel storage tanks and the
discharge of materials into the environment. Compliance with these provisions
has not had, and the Company does not expect such compliance to have, any
material effect upon the capital expenditures, net income, financial condition,
or competitive position of the Company. The Company's beverage manufacturing
operations do not use or generate a significant amount of toxic or hazardous
substances. Management believes that its current practices and procedures for
the control and disposition of such wastes comply with applicable law. In the
United States, the Company has been named as a potentially responsible party in
connection with certain landfill sites where the Company may have been a de
minimis contributor. Under current law, the Company's liability for cleanup
costs may be joint and several with other users of such sites, regardless of the
extent of the Company's use in relation to other users. However, in the opinion
of management of the Company, the potential liability of the Company in
connection with such activity is not significant and will not have a materially
adverse effect on the financial condition or results of operations of the
Company.
Several underground fuel storage tanks used by the Company may be found to
be in noncompliance with applicable federal and state requirements for the
continued maintenance and use of such tanks. The Company has adopted a plan for
the testing, removal, replacement, and repair, if necessary, of underground fuel
storage tanks at Company bottlers in North America; this includes any necessary
remediation of tank sites and the abatement of the discharge of pollutants. The
Company's plan extends to the upgrade of wastewater handling facilities, and the
remediation of friable asbestos. The Company spent approximately $6 million in
1998 pursuant to this plan, and the Company estimates it will spend
approximately $11 million in 1999 and $9.8 million in 2000 pursuant to this
plan. In the opinion of management of the Company, any liabilities associated
with the items covered by such plan will not have a materially adverse effect on
the financial condition or results of operations of the Company.
Trade Regulation
The business of the Company, as the exclusive manufacturer and distributor
of bottled and canned beverage products of The Coca-Cola Company and other
manufacturers within specified geographic territories, is subject to antitrust
laws of general applicability. Under the United States' Soft Drink Interbrand
Competition Act, the exercise and enforcement of an exclusive contractual right
to manufacture, distribute, and sell a soft drink product in a geographic
territory is presumptively lawful if the soft drink product is in substantial
and effective interbrand competition with other products of the same class in
the market. Management of the Company
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believes that there is such substantial and effective competition in each of the
exclusive geographic territories in the United States in which the Company
operates.
The Treaty of Rome, which established the European Community, precludes
restrictions of the free movement of goods within the member states. As a
result, unlike the Company's Domestic Cola and Allied Beverage Agreements, the
European Beverage Agreements grant exclusive bottling territories to the Company
subject to the exception that other European Union and/or European Economic Area
suppliers of the beverages produced by the Company can, in response to
unsolicited orders, sell such products in the Company's European Community
territories. See "European Beverage Agreements."
Miscellaneous Regulations
The production, distribution, and sale of many of the Company's products
are subject to the Federal Food, Drug, and Cosmetic Act; the Occupational Safety
and Health Act; the Lanham Act; various federal, state, provincial, and local
environmental statutes and regulations; and various other federal, state,
provincial, and local statutes in the United States, Canada, and Europe
regulating the production, packaging, sale, safety, advertising, labeling, and
ingredients of such products.
FINANCIAL INFORMATION ON INDUSTRY SEGMENTS AND GEOGRAPHIC AREAS
For financial information on industry segments and operations in geographic
areas, see Note 16 to the Company's Consolidated Financial Statements, found on
page 43 of the Company's Annual Report to Share Owners for the year ended
December 31, 1998, which is incorporated into this report by reference.
ITEM 2. PROPERTIES
The principal properties of the Company include the executive offices,
production facilities, distribution facilities, administrative offices, and
service centers. At January 31, 1999, the Company operated 74 beverage
production facilities, 27 of which are solely production facilities and 47 of
which are combination production/distribution facilities, and also operated 370
principal distribution facilities. The Company owns 70 of its production
facilities and 281 of its principal distribution facilities, and leases the
others. In the aggregate, the Company's owned and leased facilities cover
approximately 39 million square feet. Management of the Company believes that
its production and distribution facilities are generally sufficient to meet
present operating needs.
One of the facilities owned by the Company is subject to a lien to secure
indebtedness in an aggregate principal amount of approximately $2 million at
December 31, 1998. Excluding expenditures for bottler acquisitions, the
Company's capital expenditures in 1998 were approximately $1.6 billion.
At January 31, 1999, the Company owned and operated approximately 47,000
vehicles of all types used in the sale, production, and distribution of its
products and over 1.9 million coolers, beverage dispensers, and vending
machines.
ITEM 3. LEGAL PROCEEDINGS
The Company and several of its bottling subsidiaries or divisions in the
United States have been named as potentially responsible parties ("PRPs") at
several federal and state "Superfund" sites. In 1987, BCI Coca-Cola Bottling
Company of Los Angeles ("CCBCLA") was named by the Environmental Protection
Agency ("EPA") as a PRP at the Operating Industries, Inc. ("OII") site at
Monterey Park, California. As of 1991, CCBCLA had contributed approximately
$300,000 toward the remediation efforts. After 1991, CCBCLA had no further
communications from the EPA until October 1997 when CCBCLA received notice from
the EPA
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that a "Final Remedy" for the site had been chosen with an estimated cost (in
addition to what had already been spent) of approximately $217 million
(including an estimated $52 million for EPA's past and future oversight costs),
and which is expected to take 30 years to complete. There are approximately 280
PRPs at this site. CCBCLA's monetary participation in prior remediation
activities at the OII site was based upon its allocated percentage of volume of
waste contributed to the site, which was 0.075%. Based upon this percentage and
the estimated costs, CCBCLA's share of the Final Remedy would be about $162,750.
In 1992, Florida Coca-Cola Bottling Company ("Florida CCBC") was named as a PRP
at the Peak Oil site in Tampa, Florida, formerly the location of a refiner of
used motor oil. Following an internal investigation and lengthy negotiations
with the PRP Group, Florida CCBC agreed to accept liability for approximately
32,000 gallons of used oil, representing approximately 1.6% of the total amount.
With total remediation costs estimated at up to $18 million, Florida CCBC's
ultimate liability could reach $300,000. In 1992, The Coca-Cola Bottling Company
of Memphis, Tenn. ("CCBC Memphis") was named as a PRP with respect to the South
8th Street landfill site (a/k/a West Memphis landfill) in West Memphis,
Arkansas, which is alleged to have been used in the 1950s and 1960s as a dump
site for the by-products from the reprocessing of used motor oil. Total cleanup
for the site has been estimated at up to $45 million. CCBC Memphis conducted an
internal investigation of this matter and determined that some of its waste oil
may have been taken to the South 8th Street landfill. However, neither the
specific volume of waste oil that may have been generated by CCBC Memphis, nor
its percentage of the whole relative to other PRPs has yet been determined.
Accordingly, CCBC Memphis cannot yet estimate the amount of its ultimate
liability. In 1994, the Company was named as a PRP at the Waste Disposal
Engineering site in Andover, Minnesota, a former landfill. The claim against the
Company is approximately $110,000; however, if this site is a "qualified
landfill" under Minnesota law, the entire cost of remediation may be paid by the
state without contribution from any PRP. In 1994, Florida CCBC was named as a
PRP at the Petroleum Products Corporation site in Pembroke Park, Florida, the
former location of a used oil recycling facility. Total cleanup for the site has
been estimated at up to $100 million. Florida CCBC conducted an internal
investigation of this matter and determined that some of its waste oil may have
been taken to the site. However, neither the specific volume of waste oil that
may have been generated by Florida CCBC, nor its percentage of the whole
relative to other PRPs, has yet been determined. Accordingly, Florida CCBC
cannot yet estimate the amount of its ultimate liability. In August 1998, CCBC
Memphis received notice from the EPA naming it as a PRP at the Gurley Pit
Superfund Site in Edmondson, Arkansas. The Gurley Pit Site was operated as a
waste disposal facility from 1970 to 1976. The EPA has already cleaned up the
site at a cost of approximately $10 million, and it now seeks to recover these
costs from PRPs. CCBC Memphis cannot yet determine whether it will incur
liability at this Site, and if so, whether such liability would be material. The
Company or its bottling subsidiaries have been named as PRPs at eighteen other
federal and seven other state "Superfund" sites under circumstances which have
led the management of the Company to conclude either (i) that the Company will
have no further liability because there was no responsibility for having
deposited hazardous waste; (ii) that payments made to date would be sufficient
to satisfy all liability; or (iii) that the Company's ultimate liability, if
any, for such site would be less than $100,000.
There are various other lawsuits and claims pending against the Company.
Included among such litigation are claims for injury to persons or property.
Management of the Company believes that such claims are covered by insurance
with financially responsible carriers or adequate provisions for losses have
been recognized by the Company in its consolidated financial statements. In the
opinion of management of the Company, the losses that might result from such
litigation will not have a materially adverse effect on the financial condition
or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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ITEM 4(A). EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is information as of March 15, 1999 regarding the executive
officers of the Company:
PRINCIPAL OCCUPATION DURING
NAME AGE THE PAST FIVE YEARS
- ---- --- ---------------------------
Summerfield K. Johnston, Jr............ 66 Mr. Johnston has been Chairman of the Board of
Directors since October 1997. He was Vice Chairman
of the Board from December 1991 to October 1997, and
Chief Executive Officer from December 1991 until
April 1998.
Henry A. Schimberg..................... 66 Mr. Schimberg has been President and a director of
the Company since December 1991. He served as Chief
Operating Officer from December 1991 until April
1998, when he became Chief Executive Officer.
John R. Alm............................ 53 Mr. Alm has been Executive Vice President and Chief
Financial Officer since October 1997. He was Senior
Vice President and Chief Financial Officer of the
Company from December 1991 to October 1997.
Margaret F. Carton..................... 41 Ms. Carton has been Vice President, Investor
Relations and Planning since October 1996. She
served as Director, Investor Relations from 1990 to
October 1996.
Michael P. Coghlan..................... 43 Mr. Coghlan has been Vice President, Controller and
Principal Accounting Officer of the Company since
December 1998. He had been Chief Financial Officer
of the Company's Eastern Group since October 1996.
Prior to that, he had served as the Company's Vice
President and Director of Internal Audit (January
1996 until October 1996) and a Region Vice President
of Finance (June 1992 until December 1995).
John H. Downs, Jr...................... 42 Mr. Downs has been Vice President, Public Affairs of
the Company since 1989.
Norman P. Findley III.................. 54 Mr. Findley has been Senior Vice President of the
Company since December 1995 and European Group
President since July 1996. He was Vice President,
Domestic and International Marketing from July 1993
to December 1995. From 1989 to July 1993 he served
as Vice President, Marketing of the Company.
Summerfield K. Johnston III............ 45 Mr. Johnston has been Senior Vice President of the
Company since December 1995 and Eastern North
America Group President since July 1996. He was Vice
President, Regional Operations from July 1993 to
December 1995. He was Vice President and General
Manager, West Central Region from December 1992 to
July 1993. He served as Vice President, Human
Resources of the Company from February 1992 to
December 1992.
18
21
PRINCIPAL OCCUPATION DURING
NAME AGE THE PAST FIVE YEARS
- ---- --- ---------------------------
Lowry F. Kline......................... 58 Mr. Kline has been Executive Vice President and
General Counsel since October 1997. He was Senior
Vice President and General Counsel from February
1996 to October 1997, and General Counsel of the
Company since December 1991. He was a partner in the
law firm of Miller & Martin LLP, Chattanooga,
Tennessee, from 1970 until 1996.
Patrick J. Mannelly.................... 44 Mr. Mannelly has been Vice President, Finance and
Administration, since December 1998. He was a Group
Vice President and General Manager in the Company's
Eastern North America Group, responsible for New
York and New England, from August 1997 until
December 1998; and in the Western North America
Group, responsible for Southern California from July
1996 until August 1997. Prior to that, from April
1993 to July 1996, he was Vice President and General
Manager for the Los Angeles division of the Western
North America Group.
Vicki R. Palmer........................ 45 Ms. Palmer has been Vice President and Treasurer of
the Company since December 1993. She was Treasurer
of the Company from February 1992 to December 1993.
Gary P. Schroeder...................... 54 Mr. Schroeder has been Senior Vice President of the
Company and Western North America Group President
since July 1996. He was Vice President, Regional
Operations of the Company from December 1994 to July
1996. He was Regional Vice President, General
Manager of the Southwest Region from January 1992 to
December 1994.
G. David Van Houten, Jr................ 49 Mr. Van Houten has been Senior Vice President of the
Company since December 1995 and Central North
America Group President since July 1996. He was Vice
President, Regional Operations of the Company from
July 1993 to December 1995 and he was Regional Vice
President and General Manager, Texas Region from
1992 to 1993.
Summerfield K. Johnston, Jr. is the father of Summerfield K. Johnston III.
The officers of the Company are elected annually by the Board of Directors for
terms of one year or until their successors are elected and qualified, subject
to removal by the Board of Directors at any time.
19
22
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
LISTED AND TRADED: New York Stock Exchange
TRADED: Boston, Chicago, Cincinnati,
Pacific, and Philadelphia Exchanges
Common stock owners of record as of February 26, 1999: 16,629
STOCK PRICES*
- ---------------------------------------------------------------------------------------
1998 HIGH LOW
- ---------------------------------------------------------------------------------------
Fourth Quarter 41 3/16 22 7/8
Third Quarter 41 9/16 22 15/16
Second Quarter 41 7/16 35 9/16
First Quarter 37 13/16 31 1/4
- ---------------------------------------------------------------------------------------
1997 HIGH LOW
- ---------------------------------------------------------------------------------------
Fourth Quarter 36 25 1/2
Third Quarter 31 5/8 22 1/4
Second Quarter 23 5/8 18 1/32
First Quarter 22 15 23/32
- ---------------------------------------------------------------------------------------
* The Company's common stock split 3-for-1 during the second quarter of 1997.
All prior stock prices have been split-adjusted.
DIVIDENDS
Regular quarterly dividends in the amount of $0.04 per share have been paid
since July 1, 1998. Before that date, the regular quarterly dividend rate was
$0.025 per share for the first two quarters of 1998, and for the four quarters
of 1997.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial Data" for the years 1989 through 1998, on pages 46 and
47 of the Company's Annual Report to Share Owners for the year ended December
31, 1998 is incorporated into this report by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
"Management's Financial Review" on pages 18 through 29 of the Company's
Annual Report to Share Owners for the year ended December 31, 1998 is
incorporated into this report by reference.
ITEM 7(A). QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
"Management's Financial Review -- Interest Rate and Currency Risk
Management" on pages 24 and 27 of the Company's Annual Report to Share Owners
for the year ended December 31, 1998 is incorporated into this report by
reference.
20
23
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of the Registrant and its
subsidiaries are incorporated into this report by reference to the Company's
Annual Report to Share Owners for the year ended December 31, 1998, at the pages
indicated:
Consolidated Statements of Income -- Years ended December 31, 1998,
1997, and 1996 (page 21)
Consolidated Statements of Cash Flows -- Years ended December 31,
1998, 1997, and 1996 (page 23)
Consolidated Balance Sheets -- December 31, 1998 and 1997 (page 25)
Consolidated Statements of Share-Owners' Equity -- Years ended
December 31, 1998, 1997, and 1996 (page 26)
Notes to Consolidated Financial Statements (pages 30-44)
"Quarterly Financial Information" on page 44 of the Company's Annual
Report to Share Owners is incorporated into this report by reference.
Report of Independent Auditors (page 45)
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the directors of the Company is set forth under the
caption "Election of Directors -- Information Concerning Directors" on pages 5
through 9 of the Company's 1999 Proxy Statement. Such information is
incorporated into this report by reference. Information relating to the
executive officers of the Company is set forth at Item 4(A) of this report under
the caption "Executive Officers of the Company." Information relating to
compliance with the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, as amended, by the Company's executive officers and
directors, persons who own more than ten percent of the Company's common stock,
and their affiliates who are required to comply with such reporting requirements
is set forth in "Election of Directors -- Section 16(a) Beneficial Ownership
Reporting Compliance" on page 15 of the Company's 1999 Proxy Statement. Such
information is incorporated into this report by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to Director compensation is set forth under the
caption "Election of Directors -- Compensation of Directors" on pages 10 and 11
of the Company's 1999 Proxy Statement, and information relating to executive
compensation is set forth under the caption "Executive Compensation" on pages 16
through 25 of the Company's 1999 Proxy Statement, all of which is incorporated
into this report by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information relating to ownership of the Company's common stock by certain
persons is set forth under the captions "Voting -- Principal Share Owners" and
"Election of Directors -- Security Ownership of Directors and Officers" on page
3 and pages 12 through 15, respectively,
21
24
of the Company's 1999 Proxy Statement, all of which is incorporated into this
report by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information relating to certain transactions between the Company, The
Coca-Cola Company and their affiliates and certain other persons is set forth
under the caption "Certain Relationships and Related Transactions" on pages 26
through 29 of the Company's 1999 Proxy Statement, all of which is incorporated
into this report by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A)(1) Financial Statements. The following consolidated financial
statements of the Company and subsidiaries, included in the Company's Annual
Report to Share Owners for the year ended December 31, 1998, are incorporated by
reference into Part II, Item 8 of this report:
Consolidated Statements of Income -- Years ended December 31, 1998,
1997, and 1996.
Consolidated Statements of Cash Flows -- Years ended December 31,
1998, 1997, and 1996.
Consolidated Balance Sheets -- December 31, 1998 and 1997.
Consolidated Statements of Share-Owners' Equity -- Years ended
December 31, 1998, 1997, and 1996.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
(2) Financial Statement Schedules. The following financial statement
schedule of the Company and its subsidiaries is included in this report on the
page indicated:
PAGE
----
Report of Independent Auditors.............................. F-2
Schedule II -- Valuation and Qualifying Accounts for the
fiscal years ended December 31, 1998, 1997,
and 1996..................................... F-3
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission have been
omitted either because they are not required under the related instructions or
because they are inapplicable.
(3) Exhibits.
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
REPORTS ARE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER FILE NO. 01-09300;
THE COMPANY'S REGISTRATION STATEMENTS HAVE THE
EXHIBIT FILE NUMBERS NOTED WHEREVER SUCH STATEMENTS ARE
NUMBER DESCRIPTION IDENTIFIED IN THE EXHIBIT LISTING)
- ------- ----------- -----------------------------------------------
3.1 -- Restated Certificate of Incorporation Exhibit 3 to the Company's Current Report on
of Coca-Cola Enterprises (restated as Form 8-K (Date of Report: July 22, 1997).
of April 15, 1992) as amended by
Certificate of Amendment dated April
21, 1997.
22
25
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
REPORTS ARE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER FILE NO. 01-09300;
THE COMPANY'S REGISTRATION STATEMENTS HAVE THE
EXHIBIT FILE NUMBERS NOTED WHEREVER SUCH STATEMENTS ARE
NUMBER DESCRIPTION IDENTIFIED IN THE EXHIBIT LISTING)
- ------- ----------- -----------------------------------------------
3.2 -- Bylaws of Coca-Cola Enterprises, as Exhibit 4.2 to the Company's Registration
amended through February 16, 1999. Statement on Form S-3, No. 333-72713.
4.1 -- Indenture dated as of July 30, 1991, Exhibit 4.1 to the Company's Current Report on
together with the First Supplemental Form 8-K (Date of Report: July 30, 1991);
Indenture thereto dated January 29, Exhibit 4.01 to the Company's Current Report on
1992, between Coca-Cola Enterprises and Form 8-K (Date of Report: January 29, 1992);
The Chase Manhattan Bank, formerly Exhibit 4.02 to the Company's Current Report on
known as Chemical Bank (successor by Form 8-K (Date of Report: January 29, 1992);
merger to Manufacturers Hanover Trust Exhibit 4.01 to the Company's Current Report on
Company), as Trustee, with regard to Form 8-K (Date of Report: September 8, 1992);
certain unsecured and unfunded debt Exhibits 4.01 and 4.02 to the Company's Current
securities of Coca-Cola Enterprises, Report on Form 8-K (Date of Report: November
and forms of notes and debentures 12, 1992); Exhibit 4.01 to the Company's
issued thereunder. Current Report on Form 8-K (Date of Report:
January 4, 1993); Exhibit 4.02 to the Company's
Current Report on Form 8-K (Date of Report:
September 15, 1993); Exhibit 4.01 to the
Company's Current Report on Form 8-K (Date of
Report: September 25, 1996); Exhibit 4.01 to
the Company's Current Report on Form 8-K (Date
of Report: October 3, 1996); Exhibit 4.01 to
the Company's Current Report on Form 8-K (Date
of Report: November 19, 1996); Exhibit 4.1 to
the Company's Current Report on Form 8-K (Date
of Report: July 22, 1997); Exhibit 4.2 to the
Company's Current Report on Form 8-K (Date of
Report: July 22, 1997); Exhibit 4.3 to the
Company's Current Report on Form 8-K (Date of
Report: July 22, 1997); Exhibit 4.4 to the
Company's Current Report on Form 8-K (Date of
Report: July 22, 1997); Exhibit 4.01 to the
Company's Current Report on Form 8-K (Date of
Report: December 2, 1997); Exhibit 4.01 to the
Company's Current Report on Form 8-K (Date of
Report: January 6, 1998); Exhibit 4.01 to the
Company's Current Report on Form 8-K (Date of
Report: May 13, 1998); Exhibit 4.01 to the
Company's Current
23
26
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
REPORTS ARE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER FILE NO. 01-09300;
THE COMPANY'S REGISTRATION STATEMENTS HAVE THE
EXHIBIT FILE NUMBERS NOTED WHEREVER SUCH STATEMENTS ARE
NUMBER DESCRIPTION IDENTIFIED IN THE EXHIBIT LISTING)
- ------- ----------- -----------------------------------------------
Report on Form 8-K (Date of Report: September
8, 1998); Exhibit 4.01 to the Company's Current
Report on Form 8-K (Date of Report: September
18, 1998); Exhibit 4.01 to the Company's
Current Report on Form 8-K (Date of Report:
October 28, 1998).
4.2 -- Medium-Term Notes Issuing and Paying Exhibit 4.2 to the Company's Annual Report on
Agency Agreement dated as of October Form 10-K for the fiscal year ended December
24, 1994, between Coca-Cola Enterprises 31, 1994.
and The Chase Manhattan Bank formerly
known as Chemical Bank, as issuing and
paying agent, including as Exhibit B
thereto the form of Medium-Term Note
issuable thereunder.
4.3 -- Indenture dated as of November 15, 1989 Exhibit 4.01 to the Company's Current Report on
between Coca-Cola Enterprises and Form 8-K (Date of Report: December 12, 1989);
Bankers Trust Company, as Trustee, with Exhibit 4.4(a) to the Company's Annual Report
regard to certain unsecured and on Form 10-K for the fiscal year ended December
unsubordinated debt securities of 29, 1989; Exhibit 4.4(b) to the Company's
Coca-Cola Enterprises, and forms of Annual Report Form 10-K for the fiscal year
Fixed Rate Medium Term Note and ended December 29, 1989.
Floating Rate Medium Term Note, each
issuable commencing December 18, 1989
pursuant to the above-referenced
Indenture.
4.4 -- Five Year Credit Agreement dated as of Exhibit 4.4 to the Company's Annual Report on
November 4, 1996 (the "1996 Credit Form 10-K for the fiscal year ended December
Agreement") among Coca-Cola 31, 1996.
Enterprises; Bottling Holdings (Great
Britain) Limited; Citibank
International PLC; Citibank, N.A.; ABN
AMRO Bank N.V., Atlanta Agency; Bank of
America NT&SA; Bank Brussels Lambert,
New York Branch; CIBC Inc.; Commerzbank
AG; The Dai-Ichi Kangyo Bank, Ltd.,
Atlanta Agency; Deutsche Bank A.G., New
York and/or Cayman Islands Branches;
The First National Bank of Chicago;
Kredietbank N.V., Grand Cayman Branch;
Midland Bank PLC; Nationsbank, N.A.;
The Northern Trust Company; Societe
Generale; SunTrust Bank, Atlanta; Swiss
Bank Corporation, New York Branch;
Texas Commerce Bank, National
Association; Union Bank
24
27
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
REPORTS ARE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER FILE NO. 01-09300;
THE COMPANY'S REGISTRATION STATEMENTS HAVE THE
EXHIBIT FILE NUMBERS NOTED WHEREVER SUCH STATEMENTS ARE
NUMBER DESCRIPTION IDENTIFIED IN THE EXHIBIT LISTING)
- ------- ----------- -----------------------------------------------
of Switzerland, New York Branch;
Wachovia Bank of Georgia, N.A.
4.5 -- Amendment No. 1 to the 1996 Credit Exhibit 4.5 to the Company's Annual Report on
Agreement, dated as of September 9, Form 10-K for the fiscal year ended December
1997. 31, 1997.
4.6 -- Programme Agreement dated 25th Exhibit 4.6 to the Company's Annual Report on
September 1997 in respect of a U.S. Form 10-K for the fiscal year ended December
$2,500,000,000 Euro Medium Term Note 31, 1997.
Programme, between and among Coca-Cola
Enterprises, as issuer and guarantor,
Coca-Cola Enterprises Great Britain
plc, as issuer, and ABN AMRO Bank N.V.,
Banque Lehman Brothers, Banque
Nationale de Paris, Citibank
International plc, Credit Suisse First
Boston (Europe) Limited, Deutsche Bank
AG London, Lehman Brothers
International (Europe), Midland Bank
plc, Morgan Stanley & Co. International
Limited, Salomon Brothers International
Limited, Societe General and UBS
Limited, as Dealers.
Certain instruments which define the rights of holders of long-term debt of the Company
and its subsidiaries are not being filed because the total amount of securities authorized
under each such instrument does not exceed 10% of the total consolidated assets of the
Company and its subsidiaries. The Company and its subsidiaries hereby agree to furnish a
copy of each such instrument to the Commission upon request.
10.1 -- 1986 Stock Option Plan of Coca-Cola Exhibit 10.1 to the Company's Annual Report on
Enterprises, As Amended through Form 10-K for the fiscal year ended December
February 12, 1991.* 31, 1991.
10.2 -- Form of Stock Option Agreement between Exhibit 10.5 to the Company's Registration
Coca-Cola Enterprises and certain of Statement on Form S-1, No. 33-9447.
its officers.*
10.3 -- Coca-Cola Enterprises 1991 Stock Option Exhibit 10.11 to the Company's Annual Report on
Plan, As Amended and Restated through Form 10-K for the fiscal year ended December
February 18, 1992.* 31, 1992.
10.4 -- Coca-Cola Enterprises 1994 Stock Option Exhibit 4.3 to the Company's Registration
Plan.* Statement on Form S-8, No. 33-53221.
10.5 -- Coca-Cola Enterprises 1995 Stock Option Exhibit 4.3 to the Company's Registration
Plan.* Statement on Form S-8, No. 33-58699.
25
28
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
REPORTS ARE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER FILE NO. 01-09300;
THE COMPANY'S REGISTRATION STATEMENTS HAVE THE
EXHIBIT FILE NUMBERS NOTED WHEREVER SUCH STATEMENTS ARE
NUMBER DESCRIPTION IDENTIFIED IN THE EXHIBIT LISTING)
- ------- ----------- -----------------------------------------------
10.6 -- Coca-Cola Enterprises 1992 Restricted Exhibit 4.3 to the Company's Registration
Stock Award Plan (As Amended and Statement on Form S-8, No. 33-53219.
Restated effective February 7, 1994).*
10.7 -- Coca-Cola Enterprises Restricted Stock Exhibit 10.8 to the Company's Annual Report on
Award Tax Withholding Agreement.* Form 10-K for the fiscal year ended December
31, 1995.
10.8 -- Coca-Cola Enterprises 1995 Restricted Exhibit 10.10 to the Company's Annual Report on
Stock Award Plan (As Amended and Form 10-K for the fiscal year ended December
Restated effective January 2, 1996).* 31, 1996.
10.9 -- Coca-Cola Enterprises 1995 Stock Option Exhibit 10.11 to the Company's Annual Report on
Plan (As Amended and Restated effective Form 10-K for the fiscal year ended December
January 2, 1996).* 31, 1996.
10.10 -- Coca-Cola Enterprises 1997 Stock Option Exhibit 10.11 to the Company's Annual Report on
Plan.* Form 10-K for the fiscal year ended December
31, 1997.
10.11 -- Coca-Cola Enterprises Inc. Long-Term Exhibit 10.15 to the Company's Annual Report on
Incentive Plan (As Amended and Restated Form 10-K for the fiscal year ended December
Effective January 1, 1997).* 31, 1997.
10.12 -- Coca-Cola Enterprises Inc. Long-Term Filed herewith.
Incentive Plan (Effective January 1,
1998).*
10.13 -- Coca-Cola Enterprises Executive Filed herewith.
Management Incentive Plan (Effective
January 1, 1998).*
10.14 -- Coca-Cola Enterprises Executive Pension Exhibit 10.16 to the Company Annual Report on
Plan (Effective January 1, 1996).* Form 10-K for the fiscal year ended December
31, 1996.
10.15 -- Coca-Cola Enterprises Supplemental Exhibit 10.18 to the Company's Annual Report on
Pension Plan (As Amended and Restated Form 10-K for the fiscal year ended December
Effective July 1, 1993).* 31, 1997.
10.16 -- 1991 Amendment and Restatement of the Exhibit 10.9 to the Company's Annual Report on
Coca-Cola Enterprises Supplemental Form 10-K for the fiscal year ended December
Retirement Plan (As Amended Effective 31, 1994.
July 1, 1993).*
10.17 -- Form of Stock Option Agreements between Exhibit 10.36 to the Company's Registration
Coca-Cola Enterprises and certain of Statement on Form S-1, No. 33-9447.
its directors.*
10.18 -- Coca-Cola Enterprises 1988 Stock Exhibit 10.10 to the Company's Annual Report on
Appreciation Rights Plan, as amended Form 10-K for the fiscal year ended December
through February 12, 1991.* 31, 1991.
10.19 -- Employment Agreement between Coca-Cola Filed herewith.
Enterprises and Summerfield K.
Johnston, Jr., effective April 17,
1998.*
26
29
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
REPORTS ARE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER FILE NO. 01-09300;
THE COMPANY'S REGISTRATION STATEMENTS HAVE THE
EXHIBIT FILE NUMBERS NOTED WHEREVER SUCH STATEMENTS ARE
NUMBER DESCRIPTION IDENTIFIED IN THE EXHIBIT LISTING)
- ------- ----------- -----------------------------------------------
10.20 -- Amended and Restated Deferred Exhibit 10.16 to the Company's Annual Report on
Compensation Agreement between Johnston Form 10-K for the fiscal year ended December
Coca-Cola Bottling Group and Henry A. 31, 1993.
Schimberg dated December 16, 1991, as
amended.*
10.21 -- Employment Agreement between Coca-Cola Filed herewith.
Enterprises and Henry A. Schimberg,
effective April 17, 1998.*
10.22 -- 1993 Amendment and Restatement of Exhibit 10.17 to the Company's Annual Report on
Deferred Compensation Agreement between Form 10-K for the fiscal year ended December
Johnston Coca-Cola Bottling Group and 31, 1993.
John R. Alm as of April 30, 1993.*
10.23 -- Deferred Compensation Plan for Non- Exhibit 4.3 to the Company's Registration
Employee Director Compensation (As Statement on Form S-8, No. 333-47353.
Amended and Restated Effective January
1, 1998).*
10.24 -- 1997 Director Stock Option Plan.* Exhibit 10.26 to the Company's Annual Report on
Form 10-K for the fiscal year ended December
31, 1997.
10.25 -- Coca-Cola Enterprises Inc. Stock Filed herewith.
Deferral Plan (Effective July 1,
1998).*
10.26 -- Tax Sharing Agreement dated November Exhibit 10.1 to the Company's Registration
12, 1986 between Coca-Cola Enterprises Statement on Form S-1, No. 33-9447.
and The Coca-Cola Company.
10.27 -- Registration Rights Agreement dated Exhibit 10.3 to the Company's Registration
November 12, 1986 between Coca-Cola Statement on Form S-1, No. 33-9447.
Enterprises and The Coca-Cola Company.
10.28 -- Registration Rights Agreement dated as Exhibit 10 to the Company's Current Report on
of December 17, 1991 among Coca-Cola Form 8-K (Date of Report: December 18, 1991).
Enterprises, The Coca-Cola Company and
the share owners of Johnston Coca-Cola
Bottling Group named therein.
10.29 -- Form of Bottle Contract, as amended. Exhibit 10.24 to the Company's Annual Report on
Form 10-K for the fiscal year ended December
30, 1988.
10.30 -- Form of Tolling Agreement between The Exhibit 10.41 to the Company's Annual Report on
Coca-Cola Company and various Company Form 10-K for the fiscal year ended January 2,
bottlers. 1987.
10.31 -- Sweetener Sales Agreement -- Bottler Exhibit 10.34 to the Company's Annual Report on
between The Coca-Cola Company and Form 10-K for the fiscal year
27
30
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
REPORTS ARE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER FILE NO. 01-09300;
THE COMPANY'S REGISTRATION STATEMENTS HAVE THE
EXHIBIT FILE NUMBERS NOTED WHEREVER SUCH STATEMENTS ARE
NUMBER DESCRIPTION IDENTIFIED IN THE EXHIBIT LISTING)
- ------- ----------- -----------------------------------------------
various Company bottlers, dated July ended December 31, 1997.
10, 1997.
10.32 -- Can Supply Agreement, dated November Exhibit 10.30 to the Company's Annual Report on
30, 1995, between American National Can Form 10-K for the fiscal year ended December
Company and Coca-Cola Enterprises.** 31, 1995.
10.33 -- Share Repurchase Agreement dated Exhibit 10.44 to the Company's Annual Report on
January 1, 1991 between The Coca-Cola Form 10-K for the fiscal year ended December
Company and Coca-Cola Enterprises. 28, 1990.
10.34 -- Form of European Bottlers Agreement. Exhibit 10.33 to the Company's Annual Report on
Form 10-K for the fiscal year ended December
31, 1996.
10.35 -- Supplemental Agreement dated January Filed herewith.
30, 1998 between Coca-Cola Enterprises,
its European bottlers and The Coca-Cola
Company and The Coca-Cola Export
Corporation.
12 -- Statement re computation of ratios. Filed herewith.
13 -- 1998 Annual Report to Share Owners Filed herewith.
(Pages 18 to 47).
21 -- Subsidiaries of the Registrant. Filed herewith.
23 -- Consent of Independent Auditors. Filed herewith.
24 -- Powers of Attorney. Filed herewith.
27 -- Financial Data Schedule. Filed herewith.
- ---------------
* Management contracts and compensatory plans or arrangements required to be
filed as exhibits to this form pursuant to Item 14(c).
** The Company has requested confidential treatment with respect to portions of
this document.
(B) REPORTS ON FORM 8-K
The Company filed the following current reports on Form 8-K either during
the fourth quarter of 1998 or reporting events having occurred during that
quarter:
DATE OF REPORT DESCRIPTION
-------------- -----------
September 18, 1998................... Terms Agreement dated as of September 18, 1998
relating to the offer and sale of the 6.75%
Debentures Due 2028. (Filed October 6, 1998).
October 2, 1998...................... Financial results for the third quarter and first
nine months of 1998. (Filed October 29, 1998).
October 28, 1998..................... Terms Agreement dated as of October 28, 1998 relating
to the offer and sale of the 5.75% Notes Due 2008.
(Filed February 8, 1999).
28
31
(C) EXHIBITS
See Item 14(a)(3) above.
(D) FINANCIAL STATEMENT SCHEDULES
See Item 14(a)(2) above.
29
32
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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)
By: /s/ HENRY A. SCHIMBERG
------------------------------------
Henry A. Schimberg
President and Chief Executive
Officer
Date: March 25, 1999
Pursuant to requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ HENRY A. SCHIMBERG President, Chief Executive March 25, 1999
- ----------------------------------------------------- Officer, and a Director
(Henry A. Schimberg) (principal executive
officer)
/s/ JOHN R. ALM Executive Vice President and March 25, 1999
- ----------------------------------------------------- Chief Financial Officer
(John R. Alm) (principal financial
officer)
/s/ MICHAEL P. COGHLAN Vice President and Controller March 25, 1999
- ----------------------------------------------------- (principal accounting
(Michael P. Coghlan) officer)
* Chairman of the Board of March 25, 1999
- ----------------------------------------------------- Directors
(Summerfield K. Johnston, Jr.)
* Director March 25, 1999
- -----------------------------------------------------
(Howard G. Buffett)
* Director March 25, 1999
- -----------------------------------------------------
(James E. Chestnut)
* Director March 25, 1999
- -----------------------------------------------------
(John L. Clendenin)
* Director March 25, 1999
- -----------------------------------------------------
(Johnnetta B. Cole)
30
33
SIGNATURE TITLE DATE
--------- ----- ----
* Director March 25, 1999
- -----------------------------------------------------
(J. Trevor Eyton)
* Director March 25, 1999
- -----------------------------------------------------
(Joseph R. Gladden, Jr.)
* Director March 25, 1999
- -----------------------------------------------------
(Claus M. Halle)
* Director March 25, 1999
- -----------------------------------------------------
(L. Phillip Humann)
* Director March 25, 1999
- -----------------------------------------------------
(John E. Jacob)
* Director March 25, 1999
- -----------------------------------------------------
(Robert A. Keller)
* Director March 25, 1999
- -----------------------------------------------------
(Jean-Claude Killy)
* Director March 25, 1999
- -----------------------------------------------------
(Scott L. Probasco, Jr.)
*By: /s/ LOWRY F. KLINE
-------------------------------
Lowry F. Kline
Attorney-in-Fact
31
34
INDEX TO FINANCIAL STATEMENT SCHEDULE
PAGE
----
Report of Independent Auditors.............................. F-2
Schedule II -- Valuation and Qualifying Accounts for the
fiscal years ended December 31, 1998, 1997, and 1996...... F-3
F-1
35
COCA-COLA ENTERPRISES INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors
Coca-Cola Enterprises Inc.
We have audited the consolidated financial statements of Coca-Cola
Enterprises Inc. listed in Part IV, Item 14(a)(1). Our audits also included the
financial statement schedule listed in Part IV, Item 14(a)(2). These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Coca-Cola Enterprises Inc. at December 31, 1998 and 1997, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1998, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
/s/ ERNST & YOUNG LLP
Atlanta, Georgia
January 18, 1999
F-2
36
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
COCA-COLA ENTERPRISES INC.
(IN MILLIONS)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- ---------- ----------------------- ------------ ---------
ADDITIONS
-----------------------
CHARGED
BALANCE AT CHARGED TO TO OTHER BALANCE
BEGINNING COSTS AND ACCOUNTS - DEDUCTIONS - AT END
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE OF PERIOD
----------- ---------- ---------- ---------- ------------ ---------
FISCAL YEAR ENDED:
DECEMBER 31, 1998
Allowance for losses on trade
accounts......................... $ 58 $ 11 $ 4(a) $ 16(b) $ 57
Valuation allowance for deferred tax
assets........................... 246 8 -- 49(d) 205
DECEMBER 31, 1997
Allowance for losses on trade
accounts......................... $ 45 $ 11 $ 14(a) $ 12(b) $ 58
Valuation allowance for deferred tax
assets........................... 135 15 109(c) 13(d) 246
DECEMBER 31, 1996
Allowance for losses on trade
accounts......................... $ 33 $ 14 $ 6(a) $ 8(b) $ 45
Valuation allowance for deferred tax
assets........................... 120 9 34(c) 28(d) 135
- ------------------------------------
(a) At December 31, 1998 and 1997, amounts principally represent allowances for
losses on trade accounts of acquired companies at date of acquisition and,
for all periods, includes recoveries of amounts previously charged off.
(b) Charge off of uncollectible accounts.
(c) Valuation allowances for deferred tax assets of acquired companies at date
of acquisition.
(d) Write-off, reversal and expiration of certain components of the valuation
allowance for deferred tax assets.
F-3
37
EXHIBIT INDEX
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
REPORTS ARE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER FILE NO. 01-09300;
THE COMPANY'S REGISTRATION STATEMENTS HAVE THE
EXHIBIT FILE NUMBERS NOTED WHEREVER SUCH STATEMENTS ARE
NUMBER DESCRIPTION IDENTIFIED IN THE EXHIBIT LISTING)
- ------- ----------- -----------------------------------------------
3.1 -- Restated Certificate of Incorporation Exhibit 3 to the Company's Current Report on
of Coca-Cola Enterprises (restated as Form 8-K (Date of Report: July 22, 1997).
of April 15, 1992) as amended by
Certificate of Amendment dated April
21, 1997.
3.2 -- Bylaws of Coca-Cola Enterprises, as Exhibit 4.2 to the Company's Registration
amended through February 16, 1999. Statement on Form S-3, No. 333-72713.
4.1 -- Indenture dated as of July 30, 1991, Exhibit 4.1 to the Company's Current Report on
together with the First Supplemental Form 8-K (Date of Report: July 30, 1991);
Indenture thereto dated January 29, Exhibit 4.01 to the Company's Current Report on
1992, between Coca-Cola Enterprises and Form 8-K (Date of Report: January 29, 1992);
The Chase Manhattan Bank, formerly Exhibit 4.02 to the Company's Current Report on
known as Chemical Bank (successor by Form 8-K (Date of Report: January 29, 1992);
merger to Manufacturers Hanover Trust Exhibit 4.01 to the Company's Current Report on
Company), as Trustee, with regard to Form 8-K (Date of Report: September 8, 1992);
certain unsecured and unfunded debt Exhibits 4.01 and 4.02 to the Company's Current
securities of Coca-Cola Enterprises, Report on Form 8-K (Date of Report: November
and forms of notes and debentures 12, 1992); Exhibit 4.01 to the Company's
issued thereunder. Current Report on Form 8-K (Date of Report:
January 4, 1993); Exhibit 4.02 to the Company's
Current Report on Form 8-K (Date of Report:
September 15, 1993); Exhibit 4.01 to the
Company's Current Report on Form 8-K (Date of
Report: September 25, 1996); Exhibit 4.01 to
the Company's Current Report on Form 8-K (Date
of Report: October 3, 1996); Exhibit 4.01 to
the Company's Current Report on Form 8-K (Date
of Report: November 19, 1996); Exhibit 4.1 to
the Company's Current Report on Form 8-K (Date
of Report: July 22, 1997); Exhibit 4.2 to the
Company's Current Report on Form 8-K (Date of
Report: July 22, 1997); Exhibit 4.3 to the
Company's Current Report on Form 8-K (Date of
Report: July 22, 1997); Exhibit 4.4 to the
Company's Current Report on Form 8-K (Date of
Report: July 22, 1997); Exhibit 4.01 to the
Company's Current Report on Form 8-K (Date of
Report: December 2, 1997); Exhibit 4.01 to the
Company's Current
38
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
REPORTS ARE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER FILE NO. 01-09300;
THE COMPANY'S REGISTRATION STATEMENTS HAVE THE
EXHIBIT FILE NUMBERS NOTED WHEREVER SUCH STATEMENTS ARE
NUMBER DESCRIPTION IDENTIFIED IN THE EXHIBIT LISTING)
- ------- ----------- -----------------------------------------------
Report on Form 8-K (Date of Report: January 6,
1998); Exhibit 4.01 to the Company's Current
Report on Form 8-K (Date of Report: May 13,
1998); Exhibit 4.01 to the Company's Current
Report on Form 8-K (Date of Report: September
8, 1998); Exhibit 4.01 to the Company's Current
Report on Form 8-K (Date of Report: September
18, 1998); Exhibit 4.01 to the Company's
Current Report on Form 8-K (Date of Report:
October 28, 1998).
4.2 -- Medium-Term Notes Issuing and Paying Exhibit 4.2 to the Company's Annual Report on
Agency Agreement dated as of October Form 10-K for the fiscal year ended December
24, 1994, between Coca-Cola Enterprises 31, 1994.
and The Chase Manhattan Bank formerly
known as Chemical Bank, as issuing and
paying agent, including as Exhibit B
thereto the form of Medium-Term Note
issuable thereunder.
4.3 -- Indenture dated as of November 15, 1989 Exhibit 4.01 to the Company's Current Report on
between Coca-Cola Enterprises and Form 8-K (Date of Report: December 12, 1989);
Bankers Trust Company, as Trustee, with Exhibit 4.4(a) to the Company's Annual Report
regard to certain unsecured and on Form 10-K for the fiscal year ended December
unsubordinated debt securities of 29, 1989; Exhibit 4.4(b) to the Company's
Coca-Cola Enterprises, and forms of Annual Report Form 10-K for the fiscal year
Fixed Rate Medium Term Note and ended December 29, 1989.
Floating Rate Medium Term Note, each
issuable commencing December 18, 1989
pursuant to the above-referenced
Indenture.
4.4 -- Five Year Credit Agreement dated as of Exhibit 4.4 to the Company's Annual Report on
November 4, 1996 (the "1996 Credit Form 10-K for the fiscal year ended December
Agreement") among Coca-Cola 31, 1996.
Enterprises; Bottling Holdings (Great
Britain) Limited; Citibank
International PLC; Citibank, N.A.; ABN
AMRO Bank N.V., Atlanta Agency; Bank of
America NT&SA; Bank Brussels Lambert,
New York Branch; CIBC Inc.; Commerzbank
AG; The Dai-Ichi Kangyo Bank, Ltd.,
Atlanta Agency; Deutsche Bank A.G., New
York and/or Cayman Islands Branches;
The First National Bank of Chicago;
Kredietbank N.V., Grand Cayman Branch;
Midland Bank PLC; Nationsbank, N.A.;
The Northern Trust Company; Societe
Generale; SunTrust Bank, Atlanta; Swiss
Bank Corporation,
39
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
REPORTS ARE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER FILE NO. 01-09300;
THE COMPANY'S REGISTRATION STATEMENTS HAVE THE
EXHIBIT FILE NUMBERS NOTED WHEREVER SUCH STATEMENTS ARE
NUMBER DESCRIPTION IDENTIFIED IN THE EXHIBIT LISTING)
- ------- ----------- -----------------------------------------------
New York Branch; Texas Commerce Bank,
National Association; Union Bank of
Switzerland, New York Branch; Wachovia
Bank of Georgia, N.A.
4.5 -- Amendment No. 1 to the 1996 Credit Exhibit 4.5 to the Company's Annual Report on
Agreement, dated as of September 9, Form 10-K for the fiscal year ended December
1997. 31, 1997.
4.6 -- Programme Agreement dated 25th Exhibit 4.6 to the Company's Annual Report on
September 1997 in respect of a U.S. Form 10-K for the fiscal year ended December
$2,500,000,000 Euro Medium Term Note 31, 1997.
Programme, between and among Coca-Cola
Enterprises, as issuer and guarantor,
Coca-Cola Enterprises Great Britain
plc, as issuer, and ABN AMRO Bank N.V.,
Banque Lehman Brothers, Banque
Nationale de Paris, Citibank
International plc, Credit Suisse First
Boston (Europe) Limited, Deutsche Bank
AG London, Lehman Brothers
International (Europe), Midland Bank
plc, Morgan Stanley & Co. International
Limited, Salomon Brothers International
Limited, Societe General and UBS
Limited, as Dealers.
Certain instruments which define the rights of holders of long-term debt of the Company
and its subsidiaries are not being filed because the total amount of securities authorized
under each such instrument does not exceed 10% of the total consolidated assets of the
Company and its subsidiaries. The Company and its subsidiaries hereby agree to furnish a
copy of each such instrument to the Commission upon request.
10.1 -- 1986 Stock Option Plan of Coca-Cola Exhibit 10.1 to the Company's Annual Report on
Enterprises, As Amended through Form 10-K for the fiscal year ended December
February 12, 1991.* 31, 1991.
10.2 -- Form of Stock Option Agreement between Exhibit 10.5 to the Company's Registration
Coca-Cola Enterprises and certain of Statement on Form S-1, No. 33-9447.
its officers.*
10.3 -- Coca-Cola Enterprises 1991 Stock Option Exhibit 10.11 to the Company's Annual Report on
Plan, As Amended and Restated through Form 10-K for the fiscal year ended December
February 18, 1992.* 31, 1992.
10.4 -- Coca-Cola Enterprises 1994 Stock Option Exhibit 4.3 to the Company's Registration
Plan.* Statement on Form S-8, No. 33-53221.
10.5 -- Coca-Cola Enterprises 1995 Stock Option Exhibit 4.3 to the Company's Registration
Plan.* Statement on Form S-8, No. 33-58699.
40
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
REPORTS ARE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER FILE NO. 01-09300;
THE COMPANY'S REGISTRATION STATEMENTS HAVE THE
EXHIBIT FILE NUMBERS NOTED WHEREVER SUCH STATEMENTS ARE
NUMBER DESCRIPTION IDENTIFIED IN THE EXHIBIT LISTING)
- ------- ----------- -----------------------------------------------
10.6 -- Coca-Cola Enterprises 1992 Restricted Exhibit 4.3 to the Company's Registration
Stock Award Plan (As Amended and Statement on Form S-8, No. 33-53219.
Restated effective February 7, 1994).*
10.7 -- Coca-Cola Enterprises Restricted Stock Exhibit 10.8 to the Company's Annual Report on
Award Tax Withholding Agreement.* Form 10-K for the fiscal year ended December
31, 1995.
10.8 -- Coca-Cola Enterprises 1995 Restricted Exhibit 10.10 to the Company's Annual Report on
Stock Award Plan (As Amended and Form 10-K for the fiscal year ended December
Restated effective January 2, 1996).* 31, 1996.
10.9 -- Coca-Cola Enterprises 1995 Stock Option Exhibit 10.11 to the Company's Annual Report on
Plan (As Amended and Restated effective Form 10-K for the fiscal year ended December
January 2, 1996).* 31, 1996.
10.10 -- Coca-Cola Enterprises 1997 Stock Option Exhibit 10.11 to the Company's Annual Report on
Plan.* Form 10-K for the fiscal year ended December
31, 1997.
10.11 -- Coca-Cola Enterprises Inc. Long-Term Exhibit 10.15 to the Company's Annual Report on
Incentive Plan (As Amended and Restated Form 10-K for the fiscal year ended December
Effective January 1, 1997).* 31, 1997.
10.12 -- Coca-Cola Enterprises Inc. Long-Term Filed herewith.
Incentive Plan (Effective January 1,
1998).*
10.13 -- Coca-Cola Enterprises Executive Filed herewith.
Management Incentive Plan (Effective
January 1, 1998).*
10.14 -- Coca-Cola Enterprises Executive Pension Exhibit 10.16 to the Company Annual Report on
Plan (Effective January 1, 1996).* Form 10-K for the fiscal year ended December
31, 1996.
10.15 -- Coca-Cola Enterprises Supplemental Exhibit 10.18 to the Company's Annual Report on
Pension Plan (As Amended and Restated Form 10-K for the fiscal year ended December
Effective July 1, 1993).* 31, 1997.
10.16 -- 1991 Amendment and Restatement of the Exhibit 10.9 to the Company's Annual Report on
Coca-Cola Enterprises Supplemental Form 10-K for the fiscal year ended December
Retirement Plan (As Amended Effective 31, 1994.
July 1, 1993).*
10.17 -- Form of Stock Option Agreements between Exhibit 10.36 to the Company's Registration
Coca-Cola Enterprises and certain of Statement on Form S-1, No. 33-9447.
its directors.*
10.18 -- Coca-Cola Enterprises 1988 Stock Exhibit 10.10 to the Company's Annual Report on
Appreciation Rights Plan, as amended Form 10-K for the fiscal year ended December
through February 12, 1991.* 31, 1991.
10.19 -- Employment Agreement between Coca-Cola Filed herewith.
Enterprises and Summerfield K.
Johnston, Jr., effective April 17,
1998.*
10.20 -- Amended and Restated Deferred Exhibit 10.16 to the Company's Annual Report on
Compensation Agreement between Form 10-K for the fiscal year
41
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
REPORTS ARE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER FILE NO. 01-09300;
THE COMPANY'S REGISTRATION STATEMENTS HAVE THE
EXHIBIT FILE NUMBERS NOTED WHEREVER SUCH STATEMENTS ARE
NUMBER DESCRIPTION IDENTIFIED IN THE EXHIBIT LISTING)
- ------- ----------- -----------------------------------------------
Johnston Coca-Cola Bottling Group and ended December 31, 1993.
Henry A. Schimberg dated December 16,
1991, as amended.*
10.21 -- Employment Agreement between Coca-Cola Filed herewith.
Enterprises and Henry A. Schimberg,
effective April 17, 1998.*
10.22 -- 1993 Amendment and Restatement of Exhibit 10.17 to the Company's Annual Report on
Deferred Compensation Agreement between Form 10-K for the fiscal year ended December
Johnston Coca-Cola Bottling Group and 31, 1993.
John R. Alm as of April 30, 1993.*
10.23 -- Deferred Compensation Plan for Non- Exhibit 4.3 to the Company's Registration
Employee Director Compensation (As Statement on Form S-8, No. 333-47353.
Amended and Restated Effective January
1, 1998).*
10.24 -- 1997 Director Stock Option Plan.* Exhibit 10.26 to the Company's Annual Report on
Form 10-K for the fiscal year ended December
31, 1997.
10.25 -- Coca-Cola Enterprises Inc. Stock Filed herewith.
Deferral Plan (Effective July 1,
1998).*
10.26 -- Tax Sharing Agreement dated November Exhibit 10.1 to the Company's Registration
12, 1986 between Coca-Cola Enterprises Statement on Form S-1, No. 33-9447.
and The Coca-Cola Company.
10.27 -- Registration Rights Agreement dated Exhibit 10.3 to the Company's Registration
November 12, 1986 between Coca-Cola Statement on Form S-1, No. 33-9447.
Enterprises and The Coca-Cola Company.
10.28 -- Registration Rights Agreement dated as Exhibit 10 to the Company's Current Report on
of December 17, 1991 among Coca-Cola Form 8-K (Date of Report: December 18, 1991).
Enterprises, The Coca-Cola Company and
the share owners of Johnston Coca-Cola
Bottling Group named therein.
10.29 -- Form of Bottle Contract, as amended. Exhibit 10.24 to the Company's Annual Report on
Form 10-K for the fiscal year ended December
30, 1988.
10.30 -- Form of Tolling Agreement between The Exhibit 10.41 to the Company's Annual Report on
Coca-Cola Company and various Company Form 10-K for the fiscal year ended January 2,
bottlers. 1987.
10.31 -- Sweetener Sales Agreement -- Bottler Exhibit 10.34 to the Company's Annual Report on
between The Coca-Cola Company and Form 10-K for the fiscal year ended December
various Company bottlers, dated July 31, 1997.
10, 1997.
10.32 -- Can Supply Agreement, dated November Exhibit 10.30 to the Company's Annual Report on
30, 1995, between American Form 10-K for the fiscal year
42
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
REPORTS ARE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER FILE NO. 01-09300;
THE COMPANY'S REGISTRATION STATEMENTS HAVE THE
EXHIBIT FILE NUMBERS NOTED WHEREVER SUCH STATEMENTS ARE
NUMBER DESCRIPTION IDENTIFIED IN THE EXHIBIT LISTING)
- ------- ----------- -----------------------------------------------
National Can Company and Coca-Cola ended December 31, 1995.
Enterprises.**
10.33 -- Share Repurchase Agreement dated Exhibit 10.44 to the Company's Annual Report on
January 1, 1991 between The Coca-Cola Form 10-K for the fiscal year ended December
Company and Coca-Cola Enterprises. 28, 1990.
10.34 -- Form of European Bottlers Agreement. Exhibit 10.33 to the Company's Annual Report on
Form 10-K for the fiscal year ended December
31, 1996.
10.35 -- Supplemental Agreement dated January Filed herewith.
30, 1998 between Coca-Cola Enterprises,
its European bottlers and The Coca-Cola
Company and The Coca-Cola Export
Corporation.
12 -- Statement re computation of ratios. Filed herewith.
13 -- 1998 Annual Report to Share Owners Filed herewith.
(Pages 18 to 47).
21 -- Subsidiaries of the Registrant. Filed herewith.
23 -- Consent of Independent Auditors. Filed herewith.
24 -- Powers of Attorney. Filed herewith.
27 -- Financial Data Schedule. Filed herewith.
- ---------------
* Management contracts and compensatory plans or arrangements required to be
filed as exhibits to this form pursuant to Item 14(c).
** The Company has requested confidential treatment with respect to portions of
this document.
43
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