Earnings Per Share

9 Months Ended

Sep. 30, 2011

EARNINGS PER SHARE

We calculate our basic earnings per share by dividing net income by the weighted average number of common shares and participating securities outstanding during the period. Our diluted earnings per share are calculated in a similar manner, but include the effect of dilutive securities. To the extent these securities are antidilutive, they are excluded from the calculation of diluted earnings per share. As part of the Merger, outstanding shares of common stock of Coca-Cola Enterprises Inc., excluding shares held by TCCC, were converted into the right to receive one share of our common stock and $10.00 in cash consideration per share. Immediately following the Merger, 339,064,025 shares of common stock, par value $0.01 per share, of CCE were outstanding. Therefore, for periods prior to the Merger, we have used 339,064,025 as our number of basic shares outstanding for purposes of calculating our basic earnings per share. In addition, for periods prior to the Merger, we did not reflect the effect of dilutive shares because there were not any potentially dilutive securities of CCE outstanding (as we did not have any outstanding equity awards prior to the Merger, and estimating dilution using the treasury stock method is not practical or meaningful).

The following table summarizes our basic and diluted earnings per common share calculations for the periods presented (in millions, except per share data; per share data is calculated prior to rounding to millions):



	Third Quarter				First Nine Months
	2011		2010		2011		2010
Net income	$	284	$	208	$	636	$	527
Basic weighted average common shares outstanding^(A)(B)	315		339		322		339
Effect of dilutive securities^(C)	9		n/a		9		n/a
Diluted weighted average common shares outstanding	324		n/a		331		n/a
Basic earnings per common share	$	0.90	$	0.61	$	1.97	$	1.55
Diluted earnings per common share	$	0.88	n/a		$	1.92	n/a

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^(A)	For the third quarter and first nine months of 2010, we did not have any common shares outstanding. As such, we have used 339,064,025 as our number of basic weighted average common shares outstanding for purposes of calculating our basic earnings per common share, which represents the number of our shares outstanding immediately following the Merger.


^(B)	At September 30, 2011, we were obligated to issue, for no additional consideration, 0.4 million common shares under deferred compensation plans and other agreements. These shares were included in our calculation of basic and diluted earnings per share for the third quarter and first nine months of 2011.

^(C)

As of September 30, 2011, options to purchase 9 million common shares were outstanding. Of this amount, options to purchase 1.2 million common shares for the third quarter and first nine months of 2011 were not included in the computation of diluted earnings per share, because the effect of including these options in the computation would have been antidilutive. The dilutive impact of the remaining options outstanding in each period was included in the effect of dilutive securities. For periods prior to the Merger, we did not reflect the effect of dilutive shares because there were not any potentially dilutive securities of CCE outstanding (as we did not have any outstanding equity awards prior to the Merger, and estimating dilution using the treasury stock method is not practical or meaningful). Subsequent to the Merger, share-based payment awards that are contingently issuable upon the achievement of a specified performance condition are included in our diluted earnings per share calculation in the period in which the condition is satisfied.

During the first nine months of 2011, we issued an aggregate of 0.8 million shares of common stock from the exercise of share options with a total intrinsic value of $12 million.

Dividend payments on our common stock totaled $122 million during the first nine months of 2011. In April 2011, our Board of Directors approved a $0.01 per share increase in our quarterly dividend from $0.12 per share to $0.13 per share beginning in the second quarter of 2011.