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Press release from Business Wire

Coca-Cola Enterprises, Inc. Reports Fourth-Quarter and Full-Year 2013 Results

<ul> <li class='bwlistitemmargb'> <b>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.</b> </li> <li class='bwlistitemmargb'> <b>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.</b> </li> <li class='bwlistitemmargb'> <b>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.</b> </li> <li class='bwlistitemmargb'> <b>Fourth-quarter earnings per diluted share totaled 51 cents on a reported basis, or 54 cents on a comparable basis.</b> </li> <li class='bwlistitemmargb'> <b>CCE affirms its expectation for 2014 comparable and currency neutral earnings per diluted share growth of approximately 10 percent.</b> </li> </ul>

Wednesday, February 05, 2014

Coca-Cola Enterprises, Inc. Reports Fourth-Quarter and Full-Year 2013 Results

07:30 EST Wednesday, February 05, 2014

ATLANTA (Business Wire) -- 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 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. 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.

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 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.

 
 
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.
 
 
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  
 
 
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  
 
 
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  
 
 
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
    Selling,                
Delivery, and Diluted

 

Administrative Operating Income Tax Earnings Per

Cost of Sales

Expenses Income Expense Net Income 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
Selling,
Delivery, and Diluted
Administrative Operating Income Tax Earnings Per
Cost of Sales Expenses Income Expense Net Income 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.
 
 
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
    Selling,                
Delivery, and

Diluted

Administrative Operating Income Tax Earnings Per
Cost of Sales Expenses Income Expense Net Income 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
Selling,
Delivery, and Diluted
Administrative Operating Income Tax Earnings Per
Cost of Sales Expenses Income Expense Net Income 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.
 
 
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.
COCA-COLA ENTERPRISES, INC.
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited; in millions, except percentages)
       
Fourth-Quarter 2013 Full-Year 2013
Change Versus Change Versus
Fourth-Quarter 2012   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.

Coca-Cola Enterprises, Inc.
Investor Relations
Thor Erickson, +1 (678) 260-3110
or
Media Relations
Fred Roselli, +1 (678) 260-3421
or
European Media Relations
Lauren Sayeski, + 44 (0) 1895 844 300

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