COCA-COLA EUROPEAN PARTNERS US, LLC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 PR JULY 25 2013 - July 29, 2013

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8-K - 8-K JULY 29 2013 - COCA-COLA EUROPEAN PARTNERS US, LLCform8-k2q13earningsnrcover.htm
Exhibit 99.1



CONTACT: Thor Erickson - Investor Relations            
+1 (678) 260-3110

Fred Roselli - Media Relations
+1 (678) 260-3421

Lauren Sayeski - European Media Relations
+ 44 (0) 7528 251 022



COCA-COLA ENTERPRISES, INC. REPORTS SECOND-QUARTER 2013 RESULTS, PROVIDES FULL-YEAR EARNINGS OUTLOOK

•
Second-quarter diluted earnings per share totaled 66 cents on a reported basis, or 77 cents on a comparable basis, including a currency benefit of approximately 1 cent.

•
Net sales totaled $2.2 billion, down 2½ percent on a reported basis, or down 3 percent on a currency neutral basis; volume declined 2½ percent.

•
Operating income totaled $272 million on a reported basis, or $314 million on a comparable basis. Comparable operating income declined 4 percent, or 5 percent on a currency neutral basis.

•
CCE expects to repurchase at least $1 billion of its shares in 2013, with a year-end net debt to EBITDA ratio within its long-term range of 2½ to 3 times.

•
For 2013, CCE now expects comparable earnings per diluted share in a range of $2.45 to $2.50, including a negative currency impact of less than 1 percent at recent rates.

•
CCE affirms 2013 free cash flow guidance of $450 to $500 million.
 
ATLANTA, July 25, 2013 - Coca-Cola Enterprises, Inc. (NYSE/Euronext Paris: CCE) today reported second-quarter diluted earnings per share of 66 cents on a reported basis, or 77 cents on a comparable basis. Currency translation had a positive impact of approximately 1 cent per share compared to second-quarter 2012. Second-quarter reported net income was $182 million,


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or $213 million on a comparable basis. Items affecting comparability are detailed on pages 10 through 13 of this release.    
For the second quarter, net sales totaled $2.2 billion, a decline of 2½ percent from the same quarter in 2012 on a reported basis, or 3 percent on a currency neutral basis.
Second-quarter reported operating income totaled $272 million, a decline of 9½ percent. Comparable operating income totaled $314 million, a decline of 5 percent on a comparable and currency neutral basis.
“Our first half results were impacted by headwinds in the operating environment and marketplace that also have impacted our full-year outlook,” said John F. Brock, chairman and chief executive officer. “These factors include ongoing macroeconomic weakness, poor weather, continuing customer challenges from the impact of the French excise tax increase last year, and the competitive environment in Great Britain. Recent weather improvements and a solid summer program have helped restore growth in our business as we begin the third quarter, although much of the key summer selling season is still ahead of us,” Mr. Brock said.
“Our focus remains on our ultimate objective - delivering growth in shareowner value. To that end, and given the sustained impact of these issues in the operating environment, we continue to evaluate each element of our company to improve our growth outlook. We will also utilize all available business levers, including our solid free cash flow and strong balance sheet to continue returning cash to shareowners through our share repurchase program and dividends,” Mr. Brock said.
Operating Review
Total second-quarter volume declined 2½ percent. Sparkling drinks declined approximately 2½ percent, with Coca-Cola trademark brands down 2½ percent, though Coca-Cola Zero achieved growth of more than 13 percent. CCE's portfolio of energy brands grew 3 percent, with Monster achieving growth of approximately 15 percent. Still beverages declined 2 percent, including a 5

Page 3 of 13

percent decline in water and high single-digit growth for Capri-Sun. Total volume in Great Britain declined approximately 1½ percent, and volume in continental Europe (including Norway and Sweden) declined 2½ percent.
Net pricing per case in the second quarter declined ½ percent, compared to an increase of 4 percent in the same quarter a year ago. Cost of sales per case increased 2 percent, compared to an increase of 3 percent in the same quarter a year ago. Gross margins were affected by prior year hurdles, a more modest pricing strategy, and a negative mix impact, most notably in Great Britain. Operating expenses declined 8 percent, reflecting timing and the benefits of ongoing expense control. These figures are comparable and currency neutral.
“At every level of our business, our people continue to seek ways to improve our customer relationships, optimize service levels, and build on the value of our brands,” said Hubert Patricot, executive vice president and president, European Group. “We are also improving our overall pricing and promotion strategies, and our operating effectiveness and efficiency.
“These efforts, combined with favorable July weather and our Share-a-Coke program, have resulted in an encouraging start to the third quarter,” Mr. Patricot said.
Full-Year 2013 Outlook
CCE now expects 2013 comparable earnings per diluted share in a range of $2.45 to $2.50, including a negative currency translation impact of less than 1 percent at recent rates. Full-year net sales are now expected to grow in a low single-digit range versus prior year. Operating income is now expected to grow in a low to mid-single-digit range. Guidance for net sales and operating income is comparable and currency neutral.
As previously announced, CCE began a new $1.5 billion share repurchase program in January 2013, and the company now expects to repurchase at least $1 billion of its shares by the end of 2013. The company also expects its year-end net debt to EBITDA ratio to be within its long-term range of 2½ to 3 times, reflecting the impact of its plan to return cash to shareowners and

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incremental optimization of its capital structure. These plans may be adjusted depending on economic, operating, or other factors, including acquisition opportunities.
The company continues to expect 2013 free cash flow in a range of $450 to $500 million after including a year-over-year increase in cash restructuring expenses of approximately $125 million. Capital expenditures are now expected to be approximately $325 million. Weighted average cost of debt is expected to be approximately 3 percent and the comparable effective tax rate for 2013 is expected to be in a range of 26 percent to 28 percent.     
Conference Call
CCE will host a conference call with investors and analysts today at 10 a.m. EDT. The call can be accessed through the company's website at www.cokecce.com.
About CCE
    Coca-Cola Enterprises, Inc. (CCE) is the leading Western European marketer, producer, and distributor of non-alcoholic ready-to-drink beverages and one of the world's largest independent Coca-Cola bottlers. CCE is the sole licensed bottler for products of The Coca-Cola Company in Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway, and Sweden. We operate with a local focus and have 17 manufacturing sites across Europe, where we manufacture nearly 90 percent of our products in the markets in which they are consumed. Corporate responsibility and sustainability is core to our business, and we have been recognized by leading organizations in North America and Europe for our progress in water use reduction, carbon footprint reduction, and recycling initiatives. For more information about our company, please visit our website at www.cokecce.com and follow us on Twitter at @cokecce.
# # #
Forward-Looking Statements

Included in this news release are forward-looking management comments and other statements that reflect management's current outlook for future periods. As always, these expectations are based on currently available competitive, financial, and economic data along with our current operating plans and are subject to risks and

Page 5 of 13

uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. The forward-looking statements in this news release should be read in conjunction with the risks and uncertainties discussed in our filings with the Securities and Exchange Commission (“SEC”), including our Form 10-K for the year ended December 31, 2012 and other SEC filings.



Page 6 of 13

COCA-COLA ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; in millions, except per share data)


 
Second Quarter
 
First Six Months
 
2013
 
2012
 
2013
 
2012
Net sales
$
2,156

 
$
2,208

 
$
4,006

 
$
4,076

Cost of sales
1,403

 
1,401

 
2,619

 
2,613

Gross profit
753

 
807

 
1,387

 
1,463

Selling, delivery, and administrative expenses
481

 
506

 
1,004

 
991

Operating income
272

 
301

 
383

 
472

Interest expense, net
24

 
23

 
49

 
46

Other nonoperating (expense) income
(2
)
 
2

 
(4
)
 
3

Income before income taxes
246

 
280

 
330

 
429

Income tax expense
64

 
75

 
87

 
115

Net income
$
182

 
$
205

 
$
243

 
$
314

Basic earnings per share
$
0.67

 
$
0.68

 
$
0.89

 
$
1.04

Diluted earnings per share
$
0.66

 
$
0.67

 
$
0.87

 
$
1.02

Dividends declared per share
$
0.20

 
$
0.16

 
$
0.40

 
$
0.32

Basic weighted average shares outstanding
271

 
298

 
275

 
300

Diluted weighted average shares outstanding
277

 
305

 
281

 
308




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COCA-COLA ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited; in millions)


 
 
Second Quarter
 
First Six Months
 
 
2013
 
2012
 
2013
 
2012
Net income
 
$
182

 
$
205

 
$
243

 
$
314

Components of other comprehensive (loss) income:
 
 
 
 
 
 
 
 
Currency translations
 
 
 
 
 
 
 
 
    Pretax activity, net
 
(10
)
 
(130
)
 
(190
)
 
(8
)
    Tax effect
 
—

 
—

 
—

 
—

Currency translations, net of tax
 
(10
)
 
(130
)
 
(190
)
 
(8
)
Net investment hedges
 
 
 
 
 
 
 
 
    Pretax activity, net
 
(9
)
 
20

 
18

 
13

    Tax effect
 
3

 
(7
)
 
(6
)
 
(5
)
Net investment hedges, net of tax
 
(6
)
 
13

 
12

 
8

Cash flow hedges
 
 
 
 
 
 
 
 
    Pretax activity, net
 
13

 
(2
)
 
28

 
(3
)
    Tax effect
 
(4
)
 
—

 
(8
)
 
—

Cash flow hedges, net of tax
 
9

 
(2
)
 
20

 
(3
)
Pension plan adjustments
 
 
 
 
 
 
 
 
    Pretax activity, net
 
6

 
5

 
12

 
9

    Tax effect
 
(1
)
 
(1
)
 
(2
)
 
(2
)
Pension plan adjustments, net of tax
 
5

 
4

 
10

 
7

Other comprehensive (loss) income, net of tax
 
(2
)
 
(115
)
 
(148
)
 
4

Comprehensive income
 
$
180

 
$
90

 
$
95

 
$
318




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COCA-COLA ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions, except share data)


 
June 28,
2013
 
December 31,
2012
ASSETS
 
 
 
Current:
 
 
 
Cash and cash equivalents
$
277

 
$
721

Trade accounts receivable
1,651

 
1,432

Amounts receivable from The Coca-Cola Company
75

 
66

Inventories
443

 
386

Other current assets
206

 
157

Total current assets
2,652

 
2,762

Property, plant, and equipment, net
2,212

 
2,322

Franchise license intangible assets, net
3,735

 
3,923

Goodwill
123

 
132

Other noncurrent assets
404

 
371

Total assets
$
9,126

 
$
9,510

LIABILITIES
 
 
 
Current:
 
 
 
Accounts payable and accrued expenses
$
1,846

 
$
1,844

Amounts payable to The Coca-Cola Company
141

 
103

Current portion of debt
429

 
632

Total current liabilities
2,416

 
2,579

Debt, less current portion
3,270

 
2,834

Other noncurrent liabilities
243

 
276

Noncurrent deferred income tax liabilities
1,108

 
1,128

Total liabilities
7,037

 
6,817

SHAREOWNERS’ EQUITY
 
 
 
Common stock
3

 
3

Additional paid-in capital
3,865

 
3,825

Reinvested earnings
1,258

 
1,126

Accumulated other comprehensive loss
(578
)
 
(430
)
Common stock in treasury, at cost
(2,459
)
 
(1,831
)
Total shareowners’ equity
2,089

 
2,693

Total liabilities and shareowners’ equity
$
9,126

 
$
9,510





Page 9 of 13

COCA-COLA ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)


 
First Six Months
 
2013
 
2012
Cash Flows from Operating Activities:
 
 
 
Net income
$
243

 
$
314

Adjustments to reconcile net income to net cash derived from operating activities:
 
 
 
Depreciation and amortization
159

 
170

Share-based compensation expense
16

 
20

Deferred income tax benefit
(15
)
 
(22
)
Pension expense less than contributions
(4
)
 
(46
)
Net changes in assets and liabilities
(252
)
 
(206
)
Net cash derived from operating activities
147

 
230

Cash Flows from Investing Activities:
 
 
 
Capital asset investments
(149
)
 
(183
)
Capital asset disposals
—

 
13

Net cash used in investing activities
(149
)
 
(170
)
Cash Flows from Financing Activities:
 
 
 
Net change in commercial paper
16

 
166

Issuances of debt
459

 
—

Payments on debt
(217
)
 
(10
)
Shares repurchased under share repurchase programs
(588
)
 
(375
)
Dividend payments on common stock
(109
)
 
(95
)
Other financing activities, net
5

 
(8
)
Net cash used in financing activities
(434
)
 
(322
)
Net effect of currency exchange rate changes on cash and cash equivalents
(8
)
 
—

Net Change in Cash and Cash Equivalents
(444
)
 
(262
)
Cash and Cash Equivalents at Beginning of Period
721

 
684

Cash and Cash Equivalents at End of Period
$
277

 
$
422





Page 10 of 13

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

 
 
Second-Quarter 2013
 
 
Cost of Sales
Selling, Delivery, and Administrative Expenses
Operating Income
Income Tax Expense
Net Income
Diluted Earnings Per Share
Reported (GAAP) (b)
$
1,403

481

272

64

$
182

$
0.66

 
Items Impacting Comparability:
 
 
 
 
 
 
 
Mark-to-Market Effects (c)
(6
)
(2
)
8

2

6

0.02

 
Restructuring Charges (d)
(1
)
(33
)
34

9

25

0.09

Comparable (non-GAAP)
$
1,396

446

314

75

$
213

$
0.77

 
 
 
 Diluted Weighted Average Shares Outstanding
 
277

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Second-Quarter 2012
 
 
Cost of Sales
Selling, Delivery, and Administrative Expenses
Operating Income
Income Tax Expense
Net Income
Diluted Earnings Per Share
Reported (GAAP) (b)
$
1,401

506

301

75

$
205

$
0.67

 
Items Impacting Comparability:
 
 
 
 
 
 
 
Mark-to-Market Effects (c)
(7
)
(6
)
13

4

9

0.03

 
Restructuring Charges (d)
—

(14
)
14

4

10

0.03

Comparable (non-GAAP)
$
1,394

486

328

83

$
224

$
0.73

 
 
 
 Diluted Weighted Average Shares Outstanding
 
305



(a) These non-GAAP measures are provided to allow investors to more clearly evaluate our operating performance and business trends. Management uses this information to review results excluding items that are not necessarily indicative of ongoing results. The adjusting items are based on established defined terms and thresholds and represent all material items management considered for year-over-year comparability.
(b) As reflected in CCE's U.S. GAAP Condensed Consolidated Financial Statements.
 
 
(c) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.
 
(d) Amounts represent non-recurring restructuring charges.
 
 
 
 




Page 11 of 13

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

 
 
First Six Months 2013
 
 
Cost of Sales
Selling, Delivery, and Administrative Expenses
Operating Income
Income Tax Expense
Net Income
Diluted Earnings Per Share
Reported (GAAP) (b)
$
2,619

1,004

383

87

$
243

$
0.87

 
Items Impacting Comparability:
 
 
 
 
 
 
 
Mark-to-Market Effects (c)
(9
)
—

9

2

7

0.02

 
Restructuring Charges (d)
(4
)
(98
)
102

28

74

0.27

Comparable (non-GAAP)
$
2,606

906

494

117

$
324

$
1.16

 
 
 
 Diluted Weighted Average Shares Outstanding
 
281

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First Six Months 2012
 
 
Cost of Sales
Selling, Delivery, and Administrative Expenses
Operating Income
Income Tax Expense
Net Income
Diluted Earnings Per Share
Reported (GAAP) (b)
$
2,613

991

472

115

$
314

$
1.02

 
Items Impacting Comparability:






 
Mark-to-Market Effects (c)
(5
)
(4
)
9

3

6

0.02

 
Restructuring Charges (d)
—

(22
)
22

6

16

0.05

Comparable (non-GAAP)
$
2,608

965

503

124

$
336

$
1.09

 
 
 
 Diluted Weighted Average Shares Outstanding
 
308




(a) These non-GAAP measures are provided to allow investors to more clearly evaluate our operating performance and business trends. Management uses this information to review results excluding items that are not necessarily indicative of ongoing results. The adjusting items are based on established defined terms and thresholds and represent all material items management considered for year-over-year comparability.
(b) As reflected in CCE's U.S. GAAP Condensed Consolidated Financial Statements.
 
 
(c) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.
 
(d) Amounts represent non-recurring restructuring charges.
 
 
 
 




Page 12 of 13

COCA-COLA ENTERPRISES, INC.
RECONCILIATION OF GAAP TO NON-GAAP SEGMENT INCOME (a)
(Unaudited; in millions)

 
 
Second-Quarter 2013
 
 
Europe
Corporate
Operating Income
Reported (GAAP) (b)
$
309

$
(37
)
$
272

 
Items Impacting Comparability:
 
 
 
 
Mark-to-Market Effects (c)
—

8

8

 
Restructuring Charges (d)
34

—

34

Comparable (non-GAAP)
$
343

$
(29
)
$
314

 
 
 
 
 
 
 
Second-Quarter 2012
 
 
Europe
Corporate
Operating Income
Reported (GAAP) (b)
$
350

$
(49
)
$
301

 
Items Impacting Comparability:
 
 
 
 
Mark-to-Market Effects (c)
—

13

13

 
Restructuring Charges (d)
14

—

14

Comparable (non-GAAP)
$
364

$
(36
)
$
328

 
 
 
 
 
 
 
 
 
 
 
 
First Six Months 2013
 
 
Europe
Corporate
Operating Income
Reported (GAAP) (b)
$
454

$
(71
)
$
383

 
Items Impacting Comparability:
 
 
 
 
Mark-to-Market Effects (c)
—

9

9

 
Restructuring Charges (d)
102

—

102

Comparable (non-GAAP)
$
556

$
(62
)
$
494

 
 
 
 
 
 
 
First Six Months 2012
 
 
Europe
Corporate
Operating Income
Reported (GAAP) (b)
$
557

$
(85
)
$
472

 
Items Impacting Comparability:
 
 
 
 
Mark-to-Market Effects (c)
—

9

9

 
Restructuring Charges (d)
22

—

22

Comparable (non-GAAP)
$
579

$
(76
)
$
503



(a) These non-GAAP measures are provided to allow investors to more clearly evaluate our operating performance and business trends. Management uses this information to review results excluding items that are not necessarily indicative of ongoing results. The adjusting items are based on established defined terms and thresholds and represent all material items management considered for year-over-year comparability.
(b) As reflected in CCE's U.S. GAAP Condensed Consolidated Financial Statements.
 
(c) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.
(d) Amounts represent non-recurring restructuring charges.
 
 


Page 13 of 13

COCA-COLA ENTERPRISES, INC.
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited; in millions, except percentages)

 
 
 
Second-Quarter 2013 Change Versus Second-Quarter 2012
First Six Months 2013 Change Versus First Six Months 2012
Net Sales Per Case
 
 
Change in Net Sales per Case
—%
1.0%
 
Impact of Excluding Post Mix, Non-Trade, and Other
—%
—%
Bottle and Can Net Pricing Per Case
—%
1.0%
 
Impact of Currency Exchange Rate Changes
(0.5)%
(0.5)%
Currency-Neutral Bottle and Can
 
 
 
Net Pricing Per Case(a)
(0.5)%
0.5%
 
 
 
 
 
Cost of Sales Per Case
 
 
Change in Cost of Sales per Case
2.5%
3.0%
 
Impact of Excluding Post Mix, Non-Trade, and Other
—%
—%
Bottle and Can Cost of Sales Per Case
2.5%
3.0%
 
Impact of Currency Exchange Rate Changes
(0.5)%
(0.5)%
Currency-Neutral Bottle and Can
 
 
 
Cost of Sales Per Case(a)
2.0%
2.5%
 
 
 
 
 
Physical Case Bottle and Can Volume
 
 
Change in Volume
 
(2.5)%
(2.5)%
 
Impact of Selling Day Shift
—%
0.5%
Comparable Bottle and Can Volume(b)
(2.5)%
(2.0)%
 
 
 
 
 
 
 
 
 
 
 
 
 
First Six Months
Reconciliation of Free Cash Flow (c)
2013
2012
Net Cash Derived From Operating Activities
$
147

$
230

Less: Capital Asset Investments
(149
)
(183
)
Add: Capital Asset Disposals
—

13

Free Cash Flow
 
$
(2
)
$
60

 
 
 
 
 
 
 
 
June 28,
December 31,
Reconciliation of Net Debt (d)
2013
2012
Current Portion of Debt
$
429

$
632

Debt, Less Current Portion
3,270

2,834

Less: Cash and Cash Equivalents
(277
)
(721
)
Net Debt
 
$
3,422

$
2,745



(a) The non-GAAP financial measures "Currency-Neutral Bottle and Can Net Pricing Per Case" and "Currency-Neutral Bottle and Can Cost of Sales per Case" are used to more clearly evaluate bottle and can pricing and cost trends in the marketplace. These measures exclude items not directly related to bottle and can pricing or cost and currency exchange rate changes.
(b) The non-GAAP measure "Comparable Bottle and Can Volume" is used to analyze the performance of our business on a constant period basis. There were the same number of selling days in the second quarter of 2013 versus the second quarter of 2012. There was one less selling day in the first six months of 2013 versus the first six months of 2012.
(c) The non-GAAP measure "Free Cash Flow" is provided to focus management and investors on the cash available for debt reduction, dividend distributions, share repurchase, and acquisition opportunities.
(d) The non-GAAP measure "Net Debt" is used to more clearly evaluate our capital structure and leverage.


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