EX-99 2 oct24ex99.htm PRESS RELEASE ANNOUNCING 3RD QUARTER 2007 RESULTS oct24ex99.htm
EXHIBIT 99
NEWS RELEASE


CONTACT:                     Thor Erickson – Investor Relations
(770) 989-3110

Laura Brightwell – Media Relations
(770) 989-3023

FOR IMMEDIATE RELEASE
COCA-COLA ENTERPRISES INC.
REPORTS THIRD-QUARTER 2007 RESULTS

·  
Third quarter EPS totaled 55 cents, or 44 cents excluding items affecting comparability; comparable net income declined 1½ percent to $213 million.

·  
Efficiency initiatives, restructuring progress, and North American pricing growth help offset overall volume softness and the impact of high North American cost of goods.

·  
CCE raises full-year targets, with comparable earnings per share of $1.31 to $1.36.


ATLANTA, October 24, 2007 – Coca-Cola Enterprises (NYSE: CCE) today reported third-quarter 2007 net income of $268 million, or 55 cents per diluted share. Excluding previously announced restructuring charges and other items affecting comparability, third-quarter 2007 net income was $213 million or 44 cents per diluted share.

   
Third Quarter
    
First Nine Months
  
   
2007
    
2006
    
2007
    
2006
  
Reported (GAAP)
   $
0.55
     $
0.44
     $
1.14
     $
1.18
  
Restructuring Charges
    
0.04
      
0.01
      
0.12
      
0.08
  
Legal Settlement Accrual Reversa
    
-
      
-
       (0.01 )    
-
  
Gain on Asset Sale
     (0.03 )    
-
       (0.03 )    
-
  
Debt Extinguishment Cost
    
-
      
-
      
0.01
      
-
  
Loss on Equity Securities
    
-
      
-
      
0.02
      
-
  
Gain on Termination of Distribution Agreement
     (0.02 )    
-
       (0.02 )    
-
  
Net Favorable Tax Items
     (0.10 )    
-
       (0.12 )     (0.15 )
Comparable Diluted Net Income Per Share(a)
   $
0.44
     $
0.45
     $
1.11
     $
1.11
  
(a) This non-GAAP financial information is provided to allow investors to more clearly evaluate operating performance
 and business trends. Management uses this information to review results excluding items that are not necessarily indicative
of ongoing results.
  

Page 2 of 14
Third quarter results reflect strong pricing growth driven by a high cost environment in North America, soft volume trends in both North America and Europe, and the benefits of initiatives to improve efficiency and effectiveness and control operating expenses. With these factors, comparable operating income grew 1 percent in the third quarter, and reported operating income increased ½ percent. Foreign currency translations contributed approximately 4 percent to operating income growth and 3 cents to third quarter EPS growth.
 
           “We continue to make solid progress against our strategic objectives, driving improving levels of customer service, efficiency and effectiveness through our restructuring efforts as we significantly expand and enhance our brand portfolio in conjunction with The Coca-Cola Company,” said John F. Brock, president and chief executive officer.  “These efforts are strengthening our company for the long-term and will enable us to reach our long-term performance targets more quickly as we move beyond this year’s unusually high increase in the cost of goods environment in North America.”
 
Third quarter consolidated physical case bottle and can volume declined 2½ percent, net pricing per case was up 4 percent, and cost of sales per case increased 6 percent.  Both pricing and cost of sales results exclude the effects of currency translations.  Pages 10 through 14 of this release provide a reconciliation of reported and comparable operating results.
 
North American Results
 
For the quarter, North American cost of sales per case increased 8½ percent as prices for aluminum and sweetener remained high.  Net pricing per case grew 6 percent, while volume declined 2½ percent. Though sparkling beverage
 
Page 3 of 14
 performance remained weak, both Coca-Cola Zero and higher margin energy drinks continued to achieve strong growth.
 
Still beverages, which currently account for approximately 20 percent of our North American portfolio, grew in a low single-digit range in the quarter, reflecting growth in water, isotonics, and teas.
 
“Although third quarter volume in North America remained soft, in part due to essential pricing initiatives, we remain optimistic about our long-term outlook and growth potential,” Mr. Brock said.  “For example, we are encouraged by the progress of our Red, Black, and Silver execution initiative – highlighted by the ongoing development of Coca-Cola Zero – which continues to increase consumer awareness of our core brands.
 
“In 2008 and beyond, the addition of the glacéau brands will also enhance our position in the growing category of still and emerging beverages,” Mr. Brock said.  “The glacéau brands, coupled with Fuze and Campbell’s beverages, put us much closer to our goal of being number one or number two in each beverage category in which we choose to compete.”
 
The company began distribution of Fuze and the Campbell’s single-serve beverages in the third quarter and will begin distribution of glacéau brands in early November in a majority of our North American territories.  Beginning in 2008, these new brands will strengthen CCE's ability to reach its long-term growth objectives while creating new opportunities to invest against our sparkling beverage portfolio and our go-to-market capabilities.
 
European Results
 
Total European volume in the third quarter declined 3 percent, in part because of the impact of cool, wet weather in the first half of the quarter.  Volume
 
Page 4 of 14
trends improved later in the quarter, though the improvement was not sufficient to overcome the comparison to strong mid single-digit volume growth in the same quarter a year ago.  Net pricing per case was flat as strong promotional programs limited pricing growth. European cost of sales per case grew at a rate of 1½ percent.
 
In the quarter, our Red, Black, and Silver initiative continued to achieve solid performance driven primarily by the strength of Coca-Cola Zero. Europe also achieved low to mid single-digit growth in juices and isotonics, although teas and water declined. Though immediate consumption sales were down in a low single-digit range, CCE believes the reorganization of our full service vending business in Europe, the expansion of our Boost Zone program in Great Britain, and our ongoing cooler placement initiative will provide ongoing strength to this channel.
 
“Despite challenging operating conditions early in the quarter, we believe Europe continues to offer significant opportunities for growth,” Mr. Brock said.  “Volume trends improved later in the third quarter, and we believe we will return to growth in the fourth quarter.
 
“Long-term in Europe, we are working to build on the strength of our industry-leading sparkling portfolio, to expand our presence in stills, and to create enhanced efficiency through the development of our Pan European capabilities,” Mr. Brock said. “With these steps, we remain confident we can achieve sustainable long-term growth.”
 
Full-Year 2007 Outlook
 
Management now expects comparable 2007 earnings per diluted common share in a range of $1.31 to $1.36.  This contains the expected impact of currency and excludes nonrecurring items.  Restructuring charges are expected to be
 
Page 5 of 14
 
approximately $125 million for the year.  Free cash flow from operations less capital spending is expected to total more than $675 million, with capital spending of approximately $1 billion.
 
CCE will webcast its third quarter conference call with analysts and investors live over the Internet today at 10:00 a.m. EDT.  The call is available through our Web site at www.cokecce.com.
 
Coca-Cola Enterprises Inc. is the world's largest marketer, distributor, and producer of bottle and can liquid nonalcoholic refreshment.  Coca-Cola Enterprises sells approximately 80 percent of The Coca-Cola Company's bottle and can volume in North America and is the sole licensed bottler for products of The Coca-Cola Company in Belgium, continental France, Great Britain, Luxembourg, Monaco, and the Netherlands.
 
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 the currently available competitive, financial, and economic data along with our operating plans and are subject to future events and uncertainties. The forward-looking statements in this news release should be read in conjunction with the risks and uncertainties statements found under Item 1 of Part I in our 2006 Annual Report, and under Item 1A of Part II in our second-quarter 2007 Form 10-Q.

# # #
 
 

Page 6 of 14

COCA-COLA ENTERPRISES INC.       
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS       
(Unaudited; In Millions, Except Per Share Data)       
   
Third Quarter  
  
   
2007(a)
    
2006(b)
    
Change
  
Net Operating Revenues
   $
5,405
     $
5,218
       3½ %
Cost of Sales
    
3,320
      
3,181
       4½ %
Gross Profit
    
2,085
      
2,037
       2½ %
Selling, Delivery, and Administrative Expenses
    
1,635
      
1,589
       3 %
Operating Income
    
450
      
448
       ½ %
Interest Expense, Net
    
155
      
159
          
Other Nonoperating Income, Net
    
9
      
5
          
Income Before Income Taxes
    
304
      
294
          
Income Tax Expense
    
36
      
81
          
Net Income
   $
268
     $
213
          
Basic Weighted Average Common Shares Outstanding
    
481
      
476
          
Basic Net Income Per Share(c)
   $
0.56
     $
0.45
          
Diluted Weighted Average Common Shares Outstanding
    
488
      
482
          
Diluted Net Income Per Share(c)
   $
0.55
     $
0.44
          
                         
 

(a)  Third-quarter 2007 net income includes net favorable items totaling $55 million, or 11 cents per diluted share.
       See page 10 of this earnings release for a list of these items.
 
(b)  Third-quarter 2006 net income includes net unfavorable items totaling $3 million, or 1 cent per diluted share.
       See page 10 of this earnings release for a list of these items.
 
(c)  Per share data calculated prior to rounding to millions.

 
Page 7 of 14
 


 
COCA-COLA ENTERPRISES INC.       
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS       
(Unaudited; In Millions, Except Per Share Data)       

   
First Nine Months
        
   
2007(a)
    
2006(b)
    
Change
  
Net Operating Revenues
   $
15,637
     $
15,018
       4 %
Cost of Sales
    
9,592
      
9,068
       6 %
Gross Profit
    
6,045
      
5,950
       1½ %
Selling, Delivery, and Administrative Expenses
    
4,884
      
4,787
       2 %
Operating Income
    
1,161
      
1,163
    
Flat
  
Interest Expense, Net
    
467
      
472
          
Other Nonoperating (Expense) Income, Net
     (3 )    
8
          
Income Before Income Taxes
    
691
      
699
          
Income Tax Expense
    
138
      
131
          
Net Income
   $
553
     $
568
          
Basic Weighted Average Common Shares Outstanding
    
480
      
474
          
Basic Net Income Per Share(c)
   $
1.15
     $
1.20
          
Diluted Weighted Average Common Shares Outstanding
    
485
      
480
          
Diluted Net Income Per Share(c)
   $
1.14
     $
1.18
          
 

(a)  First nine months of 2007 net income includes net favorable items totaling $16 million, or 3 cents per diluted common
      share.  See page 11 of this earnings release for a list of these items.
 
(b)  First nine months of 2006 net income includes net favorable items totaling $37 million, or 7 cents per diluted common
       share.  See page 11 of this earnings release for a list of these items.
 
(c)  Per share data calculated prior to rounding to millions.


Page 8 of 14
 
COCA-COLA ENTERPRISES INC.       
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS       
(Unaudited; In Millions)       
 
   
September 28,
    
December 31,
  
   
2007
    
2006
  
ASSETS
            
Current:
            
     Cash and cash equivalents
   $
130
     $
184
  
     Trade accounts receivable, net
    
2,254
      
2,089
  
     Amounts receivable from The Coca-Cola Company
    
180
      
106
  
     Inventories
    
1,074
      
792
  
     Current deferred income tax assets
    
198
      
230
  
     Prepaid expenses and other current assets
    
418
      
401
  
          Total Current Assets
    
4,254
      
3,802
  
Property, plant, and equipment, net
    
6,666
      
6,698
  
Goodwill
    
606
      
603
  
Franchise license intangible assets, net
    
11,837
      
11,452
  
Customer distribution rights and other
                
noncurrent assets, net
    
778
      
811
  
    $
24,141
     $
23,366
  
LIABILITIES AND SHAREOWNERS’ EQUITY
                
Current:
                
     Accounts payable and accrued expenses
   $
2,807
     $
2,732
  
     Amounts payable to The Coca-Cola Company
    
356
      
324
  
     Deferred cash receipts from The Coca-Cola Company
    
49
      
64
  
     Current portion of debt
    
812
      
804
  
          Total Current Liabilities
    
4,024
      
3,924
  
Debt, less current portion
    
9,007
      
9,218
  
Retirement and insurance programs and
                
    other long-term obligations
    
1,425
      
1,467
  
Deferred cash receipts from The Coca-Cola Company,
                
    less current
    
140
      
174
  
Long-term deferred income tax liabilities
    
4,155
      
4,057
  
Shareowners’ equity
    
5,390
      
4,526
  
    $
24,141
     $
23,366
  

Page 9 of 14

 
COCA-COLA ENTERPRISES INC.       
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS       
(Unaudited; In Millions)       
 

   
Nine Months Ended
  
   
September 28,
    
September 29,
  
   
2007
    
2006
  
Cash Flows From Operating Activities
            
Net income
   $
553
     $
568
  
Adjustments to reconcile net income to net cash derived from operating activities:
                
Depreciation and amortization
    
784
      
754
  
Net change in customer distribution rights
    
4
      
23
  
Share-based compensation expense
    
28
      
47
  
Deferred funding income from The Coca-Cola Company, net of cash received
     (49 )     (88 )
Deferred income tax expense
    
45
      
73
  
Pension expense less than retirement plan contributions
     (47 )     (40 )
Net changes in assets and liabilities, net of acquisition amounts
     (372 )     (412 )
Net cash derived from operating activities
    
946
      
925
  
                 
Cash Flows From Investing Activities
                
   Capital asset investments
     (633 )     (621 )
   Capital asset disposals
    
56
      
21
  
   Acquisition of bottling operations, net of cash acquired
    
-
       (102 )
   Other investing activities
     (9 )     (10 )
Net cash used in investing activities
     (586 )     (712 )
                 
Cash Flows From Financing Activities
                
(Decrease) increase in commercial paper, net
     (328 )    
657
  
Issuances of debt
    
1,354
      
741
  
Payments on debt
     (1,458 )     (1,568 )
Dividend payments on common stock
     (87 )     (86 )
Exercise of employee share options
    
88
      
49
  
Other financing activities
    
12
      
2
  
Net cash used in financing activities
     (419 )     (205 )
Net effect of exchange rate changes on cash and cash equivalents
    
5
      
5
  
Net Change In Cash and Cash Equivalents
     (54 )    
13
  
Cash and Cash Equivalents at Beginning of Period
    
184
      
107
  
Cash and Cash Equivalents at End of Period
   $
130
     $
120
  
 
 
 

Page 10 of 14
 

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


Reconciliation of Income(a)
  
Third-Quarter 2007
  
         
Items Impacting Comparability 
        
   
Reported
 (GAAP)
    
Restructuring
Charges
    
Gain on Asset
Sale
    
Gain on
Termination of
 Distribution
Agreement
    
Net Favorable
 Tax Items
    
Comparable
 (non-GAAP)
  
Net Operating Revenues
   $
5,405
     $
-
     $
-
     $
-
     $
-
     $
5,405
  
Cost of Sales
    
3,320
      
-
      
-
      
-
      
-
      
3,320
  
Gross Profit
    
2,085
      
-
      
-
      
-
      
-
      
2,085
  
Selling, Delivery, and Administrative Expenses
    
1,635
       (28 )    
20
      
-
      
-
      
1,627
  
Operating Income
    
450
      
28
       (20 )    
-
      
-
      
458
  
Interest Expense, Net
    
155
      
-
      
-
      
-
      
-
      
155
  
Other Nonoperating Income (Expense), Net
    
9
      
-
      
-
       (12 )    
-
       (3 )
Income Before Income Taxes
    
304
      
28
       (20 )     (12 )    
-
      
300
  
Income Tax Expense
    
36
      
10
       (6 )     (4 )    
51
      
87
  
Net Income
   $
268
     $
18
     $ (14 )   $ (8 )   $ (51 )   $
213
  
Diluted Net Income Per Share
   $
0.55
     $
0.04
     $ (0.03 )   $ (0.02 )   $ (0.10 )   $
0.44
  
 

 
Reconciliation of Income(a)
  
Third-Quarter 2006  
  
         
Items Impacting Comparability
        
   
Reported
(GAAP)
    
Restructuring
Charges
    
Gain on Asset
Sale
    
Gain on
Termination of
Distribution
Agreement
    
Net Favorable
Tax Items
    
Comparable
 (non-GAAP)
  
Net Operating Revenues
   $
5,218
     $
-
     $
-
     $
-
     $
-
     $
5,218
  
Cost of Sales
    
3,181
      
-
      
-
      
-
      
-
      
3,181
  
Gross Profit
    
2,037
      
-
      
-
      
-
      
-
      
2,037
  
Selling, Delivery, and Administrative Expenses
    
1,589
       (5 )    
-
      
-
      
-
      
1,584
  
Operating Income
    
448
      
5
      
-
      
-
      
-
      
453
  
Interest Expense, Net
    
159
      
-
      
-
      
-
      
-
      
159
  
Other Nonoperating Income, Net
    
5
      
-
      
-
      
-
      
-
      
5
  
Income Before Income Taxes
    
294
      
5
      
-
      
-
      
-
      
299
  
Income Tax Expense
    
81
      
2
      
-
      
-
      
-
      
83
  
Net Income
   $
213
     $
3
     $
-
     $
-
     $
-
     $
216
  
Diluted Net Income Per Share
   $
0.44
     $
0.01
     $
-
     $
-
     $
-
     $
0.45
  


 
(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 our ongoing results.
 
     .


Page 11 of 14
 

COCA-COLA ENTERPRISES INC.      
RECONCILIATION OF GAAP TO NON-GAAP     
(Unaudited; In millions, except per share data which is calculated prior to rounding)  
Reconciliation of Income(a)
  
First Nine-Months 2007    
  
         
Items Impacting Comparability  
        
   
Reported
 (GAAP)
    
Restructuring
Charges
    
Legal
Settlement
Accrual
Reversal
    
Gain on Asset
 Sale
    
Debt
Extinguishment
Cost
    
Loss on
Equity
Securities
    
Gain on
Termination of
Distribution
Agreement
    
Net Favorable
Tax Items
    
Comparable
(non-GAAP)
  
Net Operating Revenues
   $
15,637
     $
-
     $
-
     $
-
     $
-
     $
-
     $
-
     $
-
     $
15,637
  
Cost of Sales
    
9,592
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
9,592
  
Gross Profit
    
6,045
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
6,045
  
Selling, Delivery, and administrative Expenses
    
4,884
       (89 )    
8
      
20
      
-
      
-
      
-
      
-
      
4,823
  
Operating Income
    
1,161
      
89
       (8 )     (20 )    
-
      
-
      
-
      
-
      
1,222
  
Interest Expense, Net
    
467
      
-
      
5
      
-
       (5 )    
-
      
-
      
-
      
467
  
Other Nonoperating (Expense) Income, Net
     (3 )    
-
      
-
      
-
      
-
      
14
       (12 )    
-
       (1 )
Income Before Income Taxes
    
691
      
89
       (13 )     (20 )    
5
      
14
       (12 )    
-
      
754
  
Income Tax Expense
    
138
      
32
       (5 )     (6 )    
2
      
4
       (4 )    
56
      
217
  
Net Income
   $
553
     $
57
     $ (8 )   $ (14 )   $
3
     $
10
     $ (8 )   $ (56 )   $
537
  
Diluted Net Income Per Share
   $
1.14
     $
0.12
     $ (0.01 )   $ (0.03 )   $
0.01
     $
0.02
     $ (0.02 )   $ (0.12 )   $
1.11
  

Reconciliation of Income(a)
  
First Nine-Months 2006     
  
         
Items Impacting Comparability   
        
   
Reported
(GAAP)
    
Restructuring
Charges
    
Legal
Settlement
Accrual
 Reversal
    
Gain on
Asset Sale
    
Debt
Extinguishment
Cost
    
Loss on
Equity
Securities
    
Gain on
Termination
of Distribution
Agreement
    
Net Favorable
Tax Items
    
Comparable
(non-GAAP)
  
Net Operating Revenues
   $
15,018
     $
-
     $
-
     $
-
     $
-
     $
-
     $
-
     $
-
     $
15,018
  
Cost of Sales
    
9,068
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
9,068
  
Gross Profit
    
5,950
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
5,950
  
Selling, Delivery, and Aministrative Expenses
    
4,787
       (52 )    
-
      
-
      
-
      
-
      
-
      
-
      
4,735
  
Operating Income
    
1,163
      
52
      
-
      
-
      
-
      
-
      
-
      
-
      
1,215
  
Interest Expense, Net
    
472
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
472
  
Other Nonoperating Income, Net
    
8
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
8
  
Income Before Income Taxes
    
699
      
52
      
-
      
-
      
-
      
-
      
-
      
-
      
751
  
Income Tax Expense
    
131
      
18
      
-
      
-
      
-
      
-
      
-
      
71
      
220
  
Net Income
   $
568
     $
34
     $
-
     $
-
     $
-
     $
-
     $
-
     $ (71 )   $
531
  
Diluted Net Income Per Share
   $
1.18
     $
0.08
     $
-
     $
-
     $
-
     $
-
     $
-
     $ (0.15 )   $
1.11
  
 

(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 our ongoing results.
     
 
Page 12 of 14
 

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


   
Third-Quarter 2007 
  
       
Items Impacting Comparability
      
Reconciliation of Segment Income(a)
    Reported (GAAP)    
Restructuring Charges
    
Gain on Asset Sale
      
Comparable
 (non-GAAP)
  
     North America
   $
344
     $
19
     $ (20 )   $
343
  
     Europe
    
215
      
3
      
-
      
218
  
     Corporate
     (109 )    
6
      
-
       (103 )
Operating Income
   $
450
     $
28
     $ (20 )   $
458
  
 
 

 
   
Third-Quarter 2006 
  
   
 
    
Items Impacting Comparability
        
Reconciliation of Segment Income(a)
    
Reported (GAAP)
    
Restructuring Charges
    
Gain on Asset Sale
    
Comparable
 (non-GAAP)
  
     North America
   $
325
     $
3
     $
-
     $
328
  
     Europe
    
236
      
1
      
-
      
237
  
     Corporate
     (113 )    
1
      
-
       (112 )
Operating Income
   $
448
     $
5
     $
-
     $
453
  
 
 

Segment Revenue
  
Third Quarter   
  
   
2007
    
2006
  
North America
   $
3,813
     $
3,692
  
Europe
    
1,592
      
1,526
  
Net Operating Revenues
   $
5,405
     $
5,218
  


(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 our ongoing results.
      



Page 13 of 14
 

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

 
   
First Nine-Months 2007  
  
         
Items Impacting Comparability
        
Reconciliation of Segment Income(a)
  
Reported
(GAAP)
    
Restructuring
Charges
    
Legal
 Settlement
Accrual
Reversal
    
Gain on Asset
 Sale
    
Comparable
 (non-GAAP)
  
     North America
   $
881
     $
68
     $
-
     $ (20 )   $
929
  
     Europe
    
607
      
8
      
-
      
-
      
615
  
     Corporate
     (327 )    
13
       (8 )    
-
       (322 )
Operating Income
   $
1,161
     $
89
     $ (8 )   $ (20 )   $
1,222
  
 
 

   
First Nine-Months 2006  
  
   
 
    
Items Impacting Comparability
        
Reconciliation of Segment Income(a)
  
Reported
 (GAAP)
    
Restructuring
Charges
    
Legal
Settlement
Accrual
Reversal
    
Gain on Asset
Sale
    
Comparable
 (non-GAAP)
  
     North America
   $
955
     $
8
     $
-
     $
-
     $
963
  
     Europe
    
574
      
35
      
-
      
-
      
609
  
     Corporate
     (366 )    
9
      
-
      
-
       (357 )
Operating Income
   $
1,163
     $
52
     $
-
     $
-
     $
1,215
  



Segment Revenue
  
First Nine Months
  
   
2007
    
2006
  
North America
   $
10,979
     $
10,776
  
Europe
    
4,658
      
4,242
  
Net Operating Revenues
   $
15,637
     $
15,018
  



(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 our ongoing results.
 


Page 14 of 14
 

 
COCA-COLA ENTERPRISES INC.        
RECONCILIATION OF NON-GAAP MEASURES       


 
     
Third-Quarter 2007 Change Versus
Third-Quarter 2006
    
First Nine-Months 2007 Change Versus First
Nine-Months 2006
  
     
North America 
  
Europe 
  
Consolidated 
  
North America 
  
Europe 
  
Consolidated 
Net Revenues Per Case
                                    
Change in Net Revenues per Case
     6.0 %     7.5 %     6.5 %     5.0 %     9.0 %     6.5 %
Impact of Customer Marketing and
                                             
Other Promotional Adjustments
     0.0 %     0.0 %     0.0 %     0.0 %     0.5 %     0.0 %
Impact of Post Mix, Agency, and
        Other
     0.5 %     0.0 %     0.5 %     0.0 %     (0.5 )%     0.0 %
Bottle and Can Net Pricing Per Case(a)
     6.5 %     7.5 %     7.0 %     5.0 %     9.0 %     6.5 %
Impact of Currency Exchange Rate
   Changes
     (0.5 )%     (7.5 )%     (3.0 )%     0.0 %     (8.0 )%     (2.5 )%
Currency-Neutral Bottle and Can
                                                
   Net Pricing per Case(c)
     6.0 %     0.0 %     4.0 %     5.0 %     1.0 %     4.0 %
                                                   
Cost of Sales Per Case
                                                
Change in Cost of Sales per Case
     6.5 %     9.5 %     7.5 %     7.0 %     10.0 %     8.0 %
Impact of Excluding Bottle and Can
                                                
   Marketing Credits and Jumpstart
    Funding
     2.0 %     0.0 %     1.5 %     2.0 %     0.0 %     1.5 %
Impact of Post Mix, Agency, and
   Other
     1.0 %     0.0 %     0.5 %     0.5 %     0.0 %     0.5 %
Bottle and Can Cost of Sales Per Case(b)
     9.5 %     9.5 %     9.5 %     9.5 %     10.0 %     10.0 %
Impact of Currency Exchange Rate
   Changes
     (1.0 )%     (8.0 )%     (3.5 )%     (0.5 )%     (8.0 )%     (3.0 )%
Currency-Neutral Bottle and Can
                                               
 Cost of Sales per Case(c)
     8.5 %     1.5 %     6.0 %     9.0 %     2.0 %     7.0 %
                                                   
Physical Case Bottle and Can Volume
                                                
Change in Volume
     (2.5 )%     (3.0 )%     (2.5 )%     (3.0 )%     1.0 %     (2.0 )%
 
 
 

   
First Nine Months
    
Full-Year 2007 Forecast
Reconciliation of Free Cash Flow (d)
  
2007
    
2006
          
Net Cash From Operating Activities
   $
946
     $
925
     $
1,575
  
(Approx.)
Less: Capital Asset Investments
     (633 )     (621 )     (965 )
(Approx.)
Add: Capital Asset Disposals
    
56
      
21
      
65
  
(Approx.)
Free Cash Flow
   $
369
     $
325
    
    More than $675
  
 
 

     
September 28,
    
December 31,
  
Reconciliation of Net Debt (e)
  
2007
    
2006
  
Current Portion of Debt
   $
812
     $
804
  
Debt, Less Current Portion
    
9,007
      
9,218
  
Less: Cash and Cash Equivalents
     (130 )     (184 )
Net Debt 
   $
9,689
     $
9,838
  
 


   
Full-Year 2007
Items Impacting Diluted Earnings Per Share
  
Forecast
  
Restructuring Charges (estimate)
   $
0.15 to 0.18
  
Legal Settlement Accrual Reversal
     (0.01 )
Gain on Asset Sale
     (0.03 )
Debt Extinquishment Cost (estimate)
    
0.02
  
Net Favorable Tax Items (estimate)
     (0.15 )
Total Items Impacting Diluted Earnings Per Share
   $ (0.02) to 0.01  
 
 

 
(a)
The non-GAAP financial measure "Bottle and Can Net Pricing per Case" is used to more clearly evaluate bottle and can pricing trends in the marketplace.  The measure excludes the impact of fountain gallon volume and other items that are not directly associated with bottle and can pricing in the retail  environment.  Our bottle and can sales accounted for approximately 90 percent of our net revenue during the first nine months of 2007 and 2006.
 
(b)
The non-GAAP financial measure "Bottle and Can Cost of Sales per Case" is used to more clearly evaluate cost trends for bottle and can products. The measure excludes the impact of fountain ingredient costs as well as marketing credits and Jumpstart funding, and allows investors to gain an understanding of the change in bottle and can ingredient and packaging costs.
 
(c)
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 separate the impact of currency exchange rate changes on our operations.
 
(d)
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.
     
(e)
The non-GAAP measure "Net Debt" is used to more clearly evaluate our capital structure and leverage.