COCA-COLA EUROPEAN PARTNERS US, LLC - FORM 8-K - EX-99.1 - EXHIBIT - February 5, 2014

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8-K - 8-K - COCA-COLA EUROPEAN PARTNERS US, LLCform8-k252014pr4q2013andfu.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) 1895 844 300



COCA-COLA ENTERPRISES, INC.
REPORTS FOURTH-QUARTER AND FULL-YEAR 2013 RESULTS

•
CCE achieved full-year earnings per diluted share of $2.44 on a reported basis, up 8½ percent, or $2.51 on a comparable basis, up 11 percent.

•
Full-year net sales totaled $8.2 billion, an increase of 2 percent on a reported basis, or up ½ percent on a currency neutral basis; both volume and net pricing per case grew slightly.

•
Full-year reported operating income was $914 million, down 1½ percent; full-year comparable operating income was $1.05 billion, up 3 percent, or up 1½ percent on a comparable and currency neutral basis.

•
Fourth-quarter earnings per diluted share totaled 51 cents on a reported basis, or 54 cents on a comparable basis.

•
CCE affirms its expectation for 2014 comparable and currency neutral earnings per diluted share growth of approximately 10 percent.


ATLANTA, February 5, 2014 - Coca-Cola Enterprises, Inc. (NYSE/Euronext Paris: CCE) today reported full-year 2013 earnings per diluted share of $2.44, or $2.51 on a comparable basis.
Reported operating income for the year totaled $914 million; comparable operating income totaled $1.05 billion, up 3 percent, or up 1½ percent on a comparable and currency neutral basis versus a year ago. Currency translation had a positive impact of approximately 4 cents on


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full-year comparable earnings per diluted share. Items affecting comparability are detailed on pages 10 through 13 of this release.        
“Throughout 2013, we continued to make important progress on delivering long-term, profitable growth as we worked through challenging marketplace and macroeconomic conditions,” said John F. Brock, chairman and chief executive officer. “We achieved solid earnings per share growth, modest growth in both currency neutral net sales and operating income, and strong free cash flow, demonstrating our ability to manage successfully each of the levers of our business.
“Over time, we remain confident in our ability to continue to grow by creating and capturing the opportunities in the expanding nonalcoholic ready-to-drink beverage category, ultimately reaching our most important goal - creating value for our shareowners.”
Operating Review
For the full year, sparkling drinks grew approximately ½ percent, with growth of ½ percent for Coca-Cola trademark brands, including growth of 15 percent for Coca-Cola Zero. Sparkling flavors grew 1 percent, including growth of 12 percent for our energy portfolio. Still beverages declined 3 percent, balanced between declines in water and juices. Total volume in Great Britain grew 1 percent and volume in continental Europe (including Norway and Sweden) declined ½ percent.
Full-year net sales totaled $8.2 billion, up 2 percent on a reported basis, or up ½ percent on a currency neutral basis. Free cash flow for 2013 totaled $524 million.
Net pricing per case for the full year was up slightly and cost of sales per case increased 2 percent. Operating expenses declined approximately 4½ percent. These figures are comparable and currency neutral.
For the fourth quarter, volume grew 2½ percent, driven primarily by growth in Coca-Cola trademark brands, including 20 percent growth for Coca-Cola Zero, and growth in energy. Fourth quarter volume in Great Britain grew 2½ percent, and continental European volume grew 2 percent.

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Fourth-quarter net pricing per case declined ½ percent, with growth in cost of sales per case of 1 percent, both on a comparable and currency neutral basis.
Fourth-quarter net sales totaled $2 billion, up 6 percent on a reported basis, or up 3½ percent on a currency neutral basis. Reported operating income totaled $217 million, an increase of 45 percent. On a comparable basis, operating income totaled $232 million, an increase of 12 percent, or 9 percent on a comparable and currency neutral basis.     
“Throughout the year, our people faced a series of rapidly evolving challenges, but their efforts, coupled with the success of our marketing programs, drove a return to growth,” said Hubert Patricot, executive vice president and president, European Group.
“In 2014, our people will execute a sound business plan that is well-balanced between marketplace initiatives and investment in our future,” Mr. Patricot said. “We will build on the success of our core brands, enhance our focus on Coca-Cola Zero and energy, and introduce new packaging that we believe will have a positive impact in the market.”    

Share Repurchase
CCE began a $1.5 billion share repurchase program in January 2013 and repurchased approximately $1 billion of its shares last year. In December 2013, our Board of Directors approved a new $1 billion share repurchase program - the fourth program since the creation of new CCE. The company plans approximately $800 million in repurchases in 2014. These plans may be adjusted depending on economic, operating, or other factors, including acquisition opportunities.
Full-Year 2014 Outlook
For 2014, CCE continues to expect earnings per diluted share to grow approximately 10 percent on a comparable and currency neutral basis. Although too early to predict the impact, based on recent rates, currency translation would benefit full-year 2014 earnings per share in a range of 3 percent to 4 percent.

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Net sales are expected to grow in a low single-digit range and operating income is expected to grow in a mid-single-digit range. This outlook is comparable and currency neutral.
The company also expects 2014 free cash flow in a range of $600 million to $650 million. Capital expenditures are expected to be approximately $350 million. Weighted average cost of debt is expected to be approximately 3 percent and the comparable effective tax rate for 2014 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. ET. 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

Page 5 of 13

competitive, financial, and economic data along with our current operating plans and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. The forward-looking statements in this news release should be read in conjunction with the risks and uncertainties discussed in our filings with the Securities and Exchange Commission (“SEC”), including our most recent Form 10-K and other SEC filings.


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COCA-COLA ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)


 
Fourth Quarter (a)
Full Year
 
2013
 
2012
 
2013
 
2012
Net sales
$
2,032

 
$
1,916

 
$
8,212


$
8,062

Cost of sales
1,344

 
1,254

 
5,350


5,162

Gross profit
688

 
662

 
2,862


2,900

Selling, delivery, and administrative expenses
471

 
512

 
1,948


1,972

Operating income
217

 
150

 
914


928

Interest expense, net
28

 
25

 
103


94

Other nonoperating (expense) income
(3
)
 
(1
)
 
(6
)

3

Income before income taxes
186

 
124

 
805


837

Income tax expense
51

 
24

 
138


160

Net income
$
135

 
$
100

 
$
667


$
677

Basic earnings per share
$
0.52

 
$
0.35

 
$
2.49


$
2.30

Diluted earnings per share
$
0.51

 
$
0.34

 
$
2.44


$
2.25

Dividends declared per share
$
0.20

 
$
0.16

 
$
0.80


$
0.64

Basic weighted average shares outstanding
258

 
284

 
268


294

Diluted weighted average shares outstanding
264

 
291

 
273


301



(a) Amounts presented for the fourth quarters of 2013 and 2012 have not been audited.



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COCA-COLA ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)


 
 
 
Year Ended December 31,
 
 
 
2013
 
2012
Net income
 
 
$
667

 
$
677

Components of other comprehensive income (loss):
 
 

 

Currency translations
 
 

 

    Pretax activity, net
 
 
82

 
175

    Tax effect
 
 
—

 
—

Currency translations, net of tax
 
 
82

 
175

Net investment hedges
 
 

 

    Pretax activity, net
 
 
(61
)
 
(45
)
    Tax effect
 
 
21

 
16

Net investment hedges, net of tax
 
 
(40
)
 
(29
)
Cash flow hedges
 
 

 

    Pretax activity, net
 
 
21

 
(11
)
    Tax effect
 
 
(6
)
 
3

Cash flow hedges, net of tax
 
 
15

 
(8
)
Pension plan adjustments
 
 

 

    Pretax activity, net
 
 
57

 
(126
)
    Tax effect
 
 
(15
)
 
31

Pension plan adjustments, net of tax
 
 
42

 
(95
)
Other comprehensive income (loss), net of tax
 
 
99

 
43

Comprehensive income
 
 
$
766

 
$
720




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COCA-COLA ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
(In millions)


 
December 31,
 
2013
 
2012
ASSETS
 
 
 
Current:
 
 
 
Cash and cash equivalents
$
343

 
$
721

Trade accounts receivable
1,515

 
1,432

Amounts receivable from The Coca-Cola Company
89

 
66

Inventories
452

 
386

Other current assets
169

 
157

Total current assets
2,568

 
2,762

Property, plant, and equipment, net
2,353

 
2,322

Franchise license intangible assets, net
4,004

 
3,923

Goodwill
124

 
132

Other noncurrent assets
476

 
371

       Total assets
$
9,525

 
$
9,510

LIABILITIES
 
 
 
Current:
 
 
 
Accounts payable and accrued expenses
$
1,939

 
$
1,844

Amounts payable to The Coca-Cola Company
145

 
103

Current portion of debt
111

 
632

Total current liabilities
2,195

 
2,579

Debt, less current portion
3,726

 
2,834

Other noncurrent liabilities
221

 
276

Noncurrent deferred income tax liabilities
1,103

 
1,128

       Total liabilities
7,245

 
6,817

SHAREOWNERS’ EQUITY
 
 
 
Common stock
3

 
3

Additional paid-in capital
3,899

 
3,825

Reinvested earnings
1,577

 
1,126

Accumulated other comprehensive loss
(331
)
 
(430
)
Common stock in treasury, at cost
(2,868
)
 
(1,831
)
       Total shareowners’ equity
2,280

 
2,693

       Total liabilities and shareowners’ equity
$
9,525

 
$
9,510





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COCA-COLA ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)


 
Year Ended December 31,
 
2013
 
2012
Cash Flows from Operating Activities:
 
 
 
Net income
$
667

 
$
677

Adjustments to reconcile net income to net cash derived from operating activities:
 
 
 
Depreciation and amortization
308

 
335

Share-based compensation expense
33

 
35

Deferred income tax benefit
(77
)
 
(132
)
Pension expense less than contributions
(19
)
 
(75
)
Changes in assets and liabilities:
 
 
 
Trade accounts receivables
(45
)
 
—

Inventories
(57
)
 
30

Prepaid expenses and other current assets
(21
)
 
(5
)
Accounts payable and accrued expenses
100

 
58

Other changes, net
(56
)
 
24

Net cash derived from operating activities
833

 
947

Cash Flows from Investing Activities:
 
 
 
Capital asset investments
(313
)
 
(378
)
Capital asset disposals
4

 
13

Settlement of net investment hedges
(21
)
 
—

Other investing activities, net
—

 
(8
)
Net cash used in investing activities
(330
)
 
(373
)
Cash Flows from Financing Activities:
 
 
 
Issuances of debt
931

 
430

Payments on debt
(623
)
 
(16
)
Share repurchases under share repurchase programs
(1,006
)
 
(780
)
Dividend payments on common stock
(213
)
 
(187
)
Other financing activities, net
15

 
(3
)
Net cash used in financing activities
(896
)
 
(556
)
Net effect of currency exchange rate changes on cash and cash equivalents
15

 
19

Net Change in Cash and Cash Equivalents
(378
)
 
37

Cash and Cash Equivalents at Beginning of Year
721

 
684

Cash and Cash Equivalents at End of Year
$
343

 
$
721





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

 
 
Fourth-Quarter 2013
 
 
Cost of Sales
Selling, Delivery, and Administrative Expenses
Operating Income
Income Tax Expense
Net Income
Diluted Earnings Per Share
Reported (GAAP)
$
1,344

471

217

51

$
135

$
0.51

 
Items Impacting Comparability:






 
Mark-to-Market Effects (b)
1

—

(1
)
—

(1
)
—

 
Restructuring Charges (c)
(1
)
(10
)
11

6

5

0.02

 
Tax Indemnification Changes (d)
—

(5
)
5

2

3

0.01

Comparable (non-GAAP)
$
1,344

456

232

59

$
142

$
0.54

 
 
 
 Diluted Weighted Average Shares Outstanding
 
264

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fourth-Quarter 2012
 
 
Cost of Sales
Selling, Delivery, and Administrative Expenses
Operating Income
Income Tax Expense
Net Income
Diluted Earnings Per Share
Reported (GAAP)
$
1,254

512

150

24

$
100

$
0.34

 
Items Impacting Comparability:






 
Mark-to-Market Effects (b)
(5
)
(2
)
7

2

5

0.02

 
Restructuring Charges (c)
—

(51
)
51

13

38

0.13

 
Net Tax Items (e)
—

—

—

12

(12
)
(0.04
)
Comparable (non-GAAP)
$
1,249

459

208

51

$
131

$
0.45

 
 
 
 Diluted Weighted Average Shares Outstanding
 
291



(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) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.
(c) Amounts represent non-recurring restructuring charges.
(d) Amounts represent post-Merger changes to certain underlying tax matters covered by our indemnification to TCCC for periods prior to the Merger.
(e) Amounts represent the deferred tax impact related to income tax rate or law changes.




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)

 
 
Full-Year 2013
 
 
Cost of Sales
Selling, Delivery, and Administrative Expenses
Operating Income
Income Tax Expense
Net Income
Diluted Earnings Per Share
Reported (GAAP) (b)
$
5,350

1,948

914

138

$
667

$
2.44

 
Items Impacting Comparability:






 
Mark-to-Market Effects (c)
(7
)
—

7

2

5

0.02

 
Restructuring Charges (d)
(5
)
(115
)
120

37

83

0.30

 
Tax Indemnification Changes (e)
—

(5
)
5

2

3

0.01

 
Net Tax Items (f)
—

—

—

71

(71
)
(0.26
)
Comparable (non-GAAP)
$
5,338

1,828

1,046

250

$
687

$
2.51

 
 
 
 Diluted Weighted Average Shares Outstanding
 
273

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Full-Year 2012
 
 
Cost of Sales
Selling, Delivery, and Administrative Expenses
Operating Income
Income Tax Expense
Net Income
Diluted Earnings Per Share
Reported (GAAP) (b)
$
5,162

1,972

928

160

$
677

$
2.25

 
Items Impacting Comparability:






 
Mark-to-Market Effects (c)
(2
)
(2
)
4

1

3

0.01

 
Restructuring Charges (d)
—

(85
)
85

24

61

0.21

 
Net Tax Items (f)
—

—

—

62

(62
)
(0.21
)
Comparable (non-GAAP)
$
5,160

1,885

1,017

247

$
679

$
2.26

 
 
 
 Diluted Weighted Average Shares Outstanding
 
301




(a) These non-GAAP measures are provided to allow investors to more clearly evaluate our operating performance and business trends. Management uses this information to review results excluding items that are not necessarily indicative of ongoing results. The adjusting items are based on established defined terms and thresholds and represent all material items management considered for year-over-year comparability.
(b) As reflected in CCE's U.S. GAAP Consolidated Financial Statements.
 
 
(c) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.
 
(d) Amounts represent non-recurring restructuring charges.
 
 
 
 
(e) Amounts represent post-Merger changes to certain underlying tax matters covered by our indemnification to TCCC for periods prior to the Merger.
(f) Amounts represent the deferred tax impact related to income tax rate or law changes.




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

 
 
Full-Year 2013
 
 
Europe
Corporate
Operating Income
Reported (GAAP) (b)
$
1,063

$
(149
)
$
914

 
Items Impacting Comparability:



 
Mark-to-Market Effects (c)
—

7

7

 
Restructuring Charges (d)
120

—

120

 
Tax Indemnification Changes (e)
—

5

5

Comparable (non-GAAP)
$
1,183

$
(137
)
$
1,046

 
 
 
 
 
 
 
Full-Year 2012
 
 
Europe
Corporate
Operating Income
Reported (GAAP) (b)
$
1,073

$
(145
)
$
928

 
Items Impacting Comparability:



 
Mark-to-Market Effects (c)
—

4

4

 
Restructuring Charges (d)
85

—

85

Comparable (non-GAAP)
$
1,158

$
(141
)
$
1,017

 
 
 
 
 
 
 
 
 
 
 
 
Fourth-Quarter 2013
 
 
Europe
Corporate
Operating Income
Reported (GAAP)
$
259

$
(42
)
$
217

 
Items Impacting Comparability:



 
Mark-to-Market Effects (c)
—

(1
)
(1
)
 
Restructuring Charges (d)
11

—

11

 
Tax Indemnification Changes (e)
—

5

5

Comparable (non-GAAP)
$
270

$
(38
)
$
232

 
 
 
 
 
 
 
Fourth-Quarter 2012
 
 
Europe
Corporate
Operating Income
Reported (GAAP)
$
194

$
(44
)
$
150

 
Items Impacting Comparability:



 
Mark-to-Market Effects (c)
—

7

7

 
Restructuring Charges (d)
51

—

51

Comparable (non-GAAP)
$
245

$
(37
)
$
208


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


Page 13 of 13

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

 
 
 
Fourth-Quarter 2013 Change Versus Fourth-Quarter 2012
Full-Year 2013 Change Versus Full-Year 2012
Net Sales Per Case


Change in Net Sales per Case
2.0%
1.5%
 
Impact of Excluding Post Mix, Non-Trade, and Other
—%
—%
Bottle and Can Net Pricing Per Case
2.0%
1.5%
 
Impact of Currency Exchange Rate Changes
(2.5)%
(1.5)%
Currency-Neutral Bottle and Can


 
Net Pricing Per Case (a)
(0.5)%
—%
 
 
 


Cost of Sales Per Case


Change in Cost of Sales per Case
3.0%
3.5%
 
Impact of Excluding Post Mix, Non-Trade, and Other
0.5%
—%
Bottle and Can Cost of Sales Per Case
3.5%
3.5%
 
Impact of Currency Exchange Rate Changes
(2.5)%
(1.5)%
Currency-Neutral Bottle and Can


 
Cost of Sales Per Case (a)
1.0%
2.0%
 
 
 


Physical Case Bottle and Can Volume


Change in Volume
 
4.0%
—%
 
Impact of Selling Day Shift
(1.5)%
—%
Comparable Bottle and Can Volume (b)
2.5%
—%
 
 
 
 
 
 
 
 
 
 
 
 
 
Full Year
Reconciliation of Free Cash Flow (c)
2013
2012
Net Cash Derived From Operating Activities
$
833

$
947

Less: Capital Asset Investments
(313
)
(378
)
Add: Capital Asset Disposals
4

13

Free Cash Flow
 
$
524

$
582

 
 
 
 
 
 
 
 
 
 
Reconciliation of Net Debt (d)
December 31, 2013
December 31, 2012
Current Portion of Debt
$
111

$
632

Debt, Less Current Portion
3,726

2,834

Less: Cash and Cash Equivalents
(343
)
(721
)
Net Debt
 
$
3,494

$
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 was one additional selling day in the fourth-quarter of 2013 versus the fourth-quarter of 2012. There were the same number of selling days in the full year 2013 versus the full year 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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