CCE Coca-Cola European Partners Plc Ordinary Shares (delisted)

• Second-quarter diluted earnings per share were 75 cents on a reported basis or 79 cents on a comparable basis, including a negative currency translation impact of 18 cents.
• Net sales were $1.9 billion, down 17½ percent on a reported basis or down 2 percent on a currency-neutral basis; volume declined 1 percent.
• Reported operating income was $275 million, down 7 percent; comparable operating income was $289 million, down 15 percent or up 2 percent on a currency-neutral basis.
• CCE affirms its full-year guidance for 2015, including comparable and currency-neutral diluted earnings per share growth at the upper end of the range of 6 percent to 8 percent, with slightly positive net sales and operating income growth.

Regulatory News:

Coca-Cola Enterprises, Inc. (NYSE: CCE) (Euronext Paris: CCE) today reported second-quarter 2015 operating income of $275 million or $289 million on a comparable basis. In the quarter, diluted earnings per share were 75 cents on a reported basis or 79 cents on a comparable basis. Currency translation had a negative impact of 18 cents on comparable diluted earnings per share.

In the second-quarter 2015, net sales totaled $1.9 billion, down 17½ percent from the same quarter a year ago. On a currency-neutral basis, net sales declined 2 percent.

“The consumer environment across our territories continues to limit retail value growth, including the nonalcoholic ready-to-drink category,” said John F. Brock, chairman and chief executive officer. “We are managing each element of our business to maximize the value of our brands, to sustain high levels of customer service, and to improve our growth outlook.

“We are now into the key summer selling season, and our people are working diligently and effectively to utilize the strengths of our summer marketing campaigns, such as the Rugby World Cup, and our brand and package innovation initiatives to drive value growth.

“These efforts support a business-wide focus on achieving our most important goal: continuing to build shareowner value.”

OPERATING REVIEW

Total second-quarter volume declined 1 percent, impacted by the challenging retail environment and strong prior year growth of 3½ percent. Sparkling brands declined 2½ percent. Coca-Cola trademark declined 3 percent, after cycling prior year growth of 4 percent, and as benefits from Coca-Cola Life and low single-digit growth in Coca-Cola Zero partially offset declines in other Coca-Cola brands. Energy brands grew more than 15 percent, driven primarily by Monster. Still brands grew 7 percent, with growth in Capri-Sun and the introduction of smartwater in Great Britain. Volume in both Great Britain and continental Europe declined 1 percent.

Second-quarter net pricing per case declined 1 percent, and cost of sales per case declined 3 percent, creating gross margin improvement. Operating expenses were up 1 percent. These figures are comparable and currency neutral.

“At every level of our company, we are focused on innovation, including building value from newer brands such as Coca-Cola Life, smartwater, and Finley, and expanding distribution of existing brands such as Capri-Sun and Monster,” said Hubert Patricot, executive vice president and president, European Group.

“In addition, we continue to roll out our One Brand strategy, which links each of our Coca-Cola trademark products by reinforcing the message of one unified Coca-Cola and highlighting each product’s unique consumer proposition. We believe this strategy helps consumers make more informed choices, which ultimately helps us to drive increasing value for our customers and our shareowners.”

FULL-YEAR 2015 OUTLOOK

For 2015, CCE continues to expect diluted earnings per share to grow at the upper end of the range of 6 percent to 8 percent on a comparable and currency-neutral basis. Based on recent rates, currency translation would negatively impact full-year 2015 diluted earnings per share by approximately 18 percent.

Net sales and operating income are each expected to achieve slightly positive growth on a comparable and currency-neutral basis.

The company expects 2015 free cash flow in a range of $600 million to $650 million including the expected negative impact of currency translation based on recent rates. Capital expenditures are 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 2015 is expected to be in a range of 27 percent to 28 percent.

CCE expects to repurchase approximately $600 million of its shares in 2015. Through the end of the second quarter, the company repurchased approximately $500 million of its shares. These plans may be adjusted depending on economic, operating, or other factors, including acquisition opportunities.

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. is the leading Western European marketer, producer, and distributor of nonalcoholic 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. CCE operates with a local focus and has 17 manufacturing sites across Europe, where the company manufactures nearly 90 percent of its products in the markets in which they are consumed. Sustainability is core to CCE’s business, and the company has been recognized by leading organizations in North America and Europe for its progress in water use reduction, carbon footprint reduction, and recycling initiatives. For more information about CCE, please visit www.cokecce.com and follow the company 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.

_____________________

Reconciliations of reported (GAAP) to comparable (non-GAAP) information and other non-GAAP measures used by management in managing the business are detailed on the following pages of this news release.

COCA-COLA ENTERPRISES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited; in millions, except per share data)

        Second Quarter First Six Months 2015     2014 2015     2014 Net sales $ 1,928 $ 2,333 $ 3,559 $ 4,203 Cost of sales 1,223   1,487   2,286   2,707 Gross profit 705 846 1,273 1,496 Selling, delivery, and administrative expenses 430   551   840   1,017 Operating income 275 295 433 479 Interest expense, net 31 30 61 58 Other nonoperating (expense) income (1 ) 1   1   — Income before income taxes 243 266 373 421 Income tax expense 67   68   101   108 Net income $ 176   $ 198   $ 272   $ 313 Basic earnings per share $ 0.76   $ 0.80   $ 1.17   $ 1.24 Diluted earnings per share $ 0.75   $ 0.78   $ 1.15   $ 1.22 Dividends declared per share $ 0.28   $ 0.25   $ 0.56   $ 0.50 Basic weighted average shares outstanding 231   249   233   252 Diluted weighted average shares outstanding 235   254   237   257  

COCA-COLA ENTERPRISES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited; in millions)

          Second Quarter First Six Months 2015     2014 2015     2014 Net income $ 176 $ 198 $ 272 $ 313 Components of other comprehensive income (loss): Currency translations Pretax activity, net 99 13 (180 ) 24 Tax effect —   —   —   —   Currency translations, net of tax 99 13 (180 ) 24 Net investment hedges Pretax activity, net (29 ) 18 123 17 Tax effect 10   (6 ) (43 ) (6 ) Net investment hedges, net of tax (19 ) 12 80 11 Cash flow hedges Pretax activity, net (2 ) (3 ) (4 ) (6 ) Tax effect —   —   —   1   Cash flow hedges, net of tax (2 ) (3 ) (4 ) (5 ) Pension plan adjustments Pretax activity, net 7 7 14 13 Tax effect (1 ) (2 ) (3 ) (3 ) Pension plan adjustments, net of tax 6   5   11   10   Other comprehensive income (loss), net of tax 84   27   (93 ) 40   Comprehensive income $ 260   $ 225   $ 179   $ 353    

COCA-COLA ENTERPRISES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions)

          July 3, 2015 December 31, 2014 ASSETS Current: Cash and cash equivalents $ 418 $ 223 Trade accounts receivable 1,637 1,514 Amounts receivable from The Coca-Cola Company 63 67 Inventories 411 388 Other current assets 326   268   Total current assets 2,855 2,460 Property, plant, and equipment, net 2,008 2,101 Franchise license intangible assets, net 3,532 3,641 Goodwill 94 101 Other noncurrent assets 217   240   Total assets $ 8,706   $ 8,543   LIABILITIES Current: Accounts payable and accrued expenses $ 1,931 $ 1,872 Amounts payable to The Coca-Cola Company 116 104 Current portion of debt 772   632   Total current liabilities 2,819 2,608 Debt, less current portion 3,712 3,320 Other noncurrent liabilities 206 207 Noncurrent deferred income tax liabilities 956   977   Total liabilities 7,693 7,112 SHAREOWNERS’ EQUITY Common stock 3 3 Additional paid-in capital 3,996 3,958 Reinvested earnings 2,133 1,991 Accumulated other comprehensive loss (807 ) (714 ) Common stock in treasury, at cost (4,312 ) (3,807 ) Total shareowners’ equity 1,013   1,431   Total liabilities and shareowners’ equity $ 8,706   $ 8,543    

COCA-COLA ENTERPRISES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

    First Six Months 2015       2014 Cash Flows from Operating Activities: Net income $ 272 $ 313 Adjustments to reconcile net income to net cash derived from operating activities: Depreciation and amortization 138 153 Share-based compensation expense 16 15 Deferred income tax expense 12 13 Pension expense less than contributions (5 ) (4 ) Net changes in assets and liabilities (72 ) (277 ) Net cash derived from operating activities 361   213   Cash Flows from Investing Activities: Capital asset investments (183 ) (156 ) Capital asset disposals — 26 Other investing activities, net (13 ) —   Net cash used in investing activities (196 ) (130 ) Cash Flows from Financing Activities: Net change in commercial paper 143 412 Issuances of debt 527 347 Payments on debt (6 ) (108 ) Shares repurchased under share repurchase programs (507 ) (588 ) Dividend payments on common stock (130 ) (125 ) Other financing activities, net 16   (7 ) Net cash derived from (used in) financing activities 43   (69 ) Net effect of currency exchange rate changes on cash and cash equivalents (13 ) (1 ) Net Change in Cash and Cash Equivalents 195 13 Cash and Cash Equivalents at Beginning of Period 223   343   Cash and Cash Equivalents at End of Period $ 418   $ 356    

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 2015 Cost of sales    

Selling,delivery, andadministrativeexpenses

   

Operatingincome

   

Income taxexpense

   

Net income

   

Dilutedearnings pershare

  Reported (GAAP) (b) $1,223

$430

$275

$67

$176 $0.75 Items Impacting Comparability: Mark-to-market effects (c) (12 ) 2 10 2 8 0.03 Restructuring charges (d) —   (4 ) 4   1   3   0.01   Comparable (non-GAAP) $1,211  

$428

 

$289

 

$70

  $187   $0.79   Diluted Weighted Average Shares Outstanding 235     Second-Quarter 2014 Cost of sales  

Selling,delivery, andadministrativeexpenses

 

Operatingincome

 

Income taxexpense

  Net income  

Dilutedearnings pershare

  Reported (GAAP) (b) $1,487

$551

$295

$68

$198 $0.78 Items Impacting Comparability: Mark-to-market effects (c) 7 1 (8 ) (3 ) (5 ) (0.02 ) Restructuring charges (d) —   (54 ) 54   18   36   0.14   Comparable (non-GAAP) $1,494  

$498

 

$341

 

$83

  $229   $0.90   Diluted Weighted Average Shares Outstanding 254  

___________________________

(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 nonrecurring restructuring charges.

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 2015 Cost of sales    

Selling,delivery, andadministrativeexpenses

   

Operatingincome

   

Income taxexpense

    Net income    

Dilutedearnings pershare

  Reported (GAAP) (b) $2,286

$840

$433

$101

$272 $1.15 Items Impacting Comparability: Mark-to-market effects (c) (12 ) 4 8 2 6 0.02 Restructuring charges (d) —   (13 ) 13   3   10   0.04   Comparable (non-GAAP) $2,274  

$831

 

$454

 

$106

  $288   $1.21   Diluted Weighted Average Shares Outstanding 237     First Six Months 2014 Cost of sales  

Selling,delivery, andadministrativeexpenses

 

Operatingincome

 

Income taxexpense

  Net income  

Dilutedearnings pershare

  Reported (GAAP) (b) $2,707

$1,017

$479

$108

$313 $1.22 Items Impacting Comparability: Mark-to-market effects (c) 6 — (6 ) (2 ) (4 ) (0.02 ) Restructuring charges (d) —   (62 ) 62   21   41   0.16   Comparable (non-GAAP) $2,713  

$955

 

$535

 

$127

  $350   $1.36   Diluted Weighted Average Shares Outstanding 257  

___________________________

(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 nonrecurring restructuring charges.

COCA-COLA ENTERPRISES, INC.

RECONCILIATION OF GAAP TO NON-GAAP SEGMENT INCOME (a)

(Unaudited; in millions)

      Second-Quarter 2015

Europe

 

Corporate

 

Operating income

Reported (GAAP) (b) $ 324 $ (49 ) $ 275 Items Impacting Comparability: Mark-to-market effects (c) — 10 10 Restructuring charges (d)   4     —       4   Comparable (non-GAAP) $ 328   $ (39 )   $ 289     Second-Quarter 2014

Europe

Corporate

Operating income

Reported (GAAP) (b) $ 321 $ (26 ) $ 295 Items Impacting Comparability: Mark-to-market effects (c) — (8

)

 

 

(8 ) Restructuring charges (d)   54     —       54   Comparable (non-GAAP) $ 375   $ (34 )   $ 341       First Six Months 2015 Europe Corporate

Operating income

Reported (GAAP) (b) $ 514 $ (81 ) $ 433 Items Impacting Comparability: Mark-to-Market Effects (c) — 8 8 Restructuring Charges (d)   13     —       13   Comparable (non-GAAP) $ 527   $ (73 )   $ 454     First Six Months 2014 Europe Corporate

Operating income

Reported (GAAP) (b) $ 545 $ (66

)

$ 479 Items Impacting Comparability: Mark-to-Market Effects (c) — (6

)

 

 

(6 ) Restructuring Charges (d)   62     —       62   Comparable (non-GAAP) $ 607   $ (72 )   $ 535    

___________________________

(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 nonrecurring restructuring charges.

COCA-COLA ENTERPRISES, INC.

CURRENCY IMPACT ON OPERATING MEASURES (a)

(Unaudited; percentages rounded to the nearest 0.5 percent)

    % Change vs. Prior Year GAAP (b)    

non-GAAP (c)

Second-Quarter 2015

Reported  

Currencyimpact onreported

 

Reportedcurrency-neutral

    Comparable  

Currencyimpact oncomparable

 

Comparablecurrency-neutral

Net sales (17.5

)%

  (15.5 )%   (2.0 )% (17.5 )%   (15.5 )%   (2.0 )% Selling, delivery, and administrative expenses (22.0 ) (14.0 ) (8.0 ) (14.0 ) (15.0 ) 1.0 Operating income (7.0 ) (19.5 ) 12.5 (15.0 ) (17.0 ) 2.0 Diluted earnings per share (4.0 )   (20.0 )   16.0   (12.0 )   (20.0 )   8.0    

Second-Quarter 2014

                              Net sales 8.0 % 5.5 % 2.5 % 8.0 % 5.5 % 2.5 % Selling, delivery, and administrative expenses 14.5 5.0 9.5 11.5 5.5 6.0 Operating income 8.5 7.5 1.0 8.5 6.5 2.0 Diluted earnings per share 18.0     8.0     10.0   16.5     7.0     9.5    

First Six Months 2015

                              Net sales (15.5 )% (16.0 )% 0.5 % (15.5 )% (16.0 )% 0.5 % Selling, delivery, and administrative expenses (17.5 ) (14.0 ) (3.5 ) (13.0 ) (15.0 ) 2.0 Operating income (9.5 ) (20.0 ) 10.5 (15.0 ) (18.0 ) 3.0 Diluted earnings per share (6.0 )   (20.5 )   14.5   (11.0 )   (21.5 )   10.5    

First Six Months 2014

                              Net sales 5.0 % 4.5 % 0.5 % 5.0 % 4.5 % 0.5 % Selling, delivery, and administrative expenses 1.5 4.0 (2.5 ) 5.5 4.5 1.0 Operating income 25.0 8.5 16.5 8.0 6.0 2.0 Diluted earnings per share 40.5     10.0     30.5   17.5     7.5     10.0    

___________________________

(a) Currency impact is calculated by converting current year results at prior year exchange rates.

(b) Calculated based on CCE's U.S. GAAP Condensed Consolidated Financial Statements.

(c) 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. See the Reconciliation of GAAP to non-GAAP tables in this release for a list of all items impacting comparability.

COCA-COLA ENTERPRISES, INC.

RECONCILIATION OF NON-GAAP MEASURES

(Unaudited; in millions, except percentages which are rounded to the nearest 0.5 percent)

        Second-Quarter First Six Months % Change vs. Prior Year % Change vs. Prior Year 2015       2014 2015     2014

Net Sales Per Case

Change in net sales per case (16.5 )% 4.5 % (17.0 )% 4.5 % Impact of excluding post mix, non-trade, and other — 1.0 (0.5 ) 0.5 Impact of currency exchange rate changes 15.5   (5.5 ) 16.0   (4.5 ) Currency-Neutral Bottle and Can Net Pricing Per Case (a) (1.0 )% —

%

(1.5 )% 0.5 %  

Cost of Sales Per Case

        Change in cost of sales per case (17.0 )% 2.5 % (17.5 )% 3.0 % Impact of excluding post mix, non-trade, and other (1.5 ) 1.5 (1.0 ) 1.0 Impact of currency exchange rate changes 15.5   (5.0 ) 16.0   (4.5 ) Currency-Neutral Bottle and Can Cost of Sales Per Case (a) (3.0 )% (1.0 )% (2.5 )% (0.5 )%  

Physical Case Bottle and Can Volume

        Change in volume (1.0 )% 3.5 % 2.5 % 0.5 % Impact of selling day shift —   —   (2.5 ) 0.5   Comparable Bottle and Can Volume (b) (1.0 )% 3.5 % —

%

1.0 %   First Six Months

Reconciliation of Free Cash Flow (c)

2015       2014 Net cash derived from operating activities $ 361 $ 213 Less: capital asset investments

(183

)

(156 ) Add: capital asset disposals —       26   Free Cash Flow $ 178       $ 83     July 3, December 31,

Reconciliation of Net Debt (d)

2015       2014 Current portion of debt $ 772 $ 632 Debt, less current portion 3,712 3,320 Less: cash and cash equivalents

(418

)

    (223 ) Net Debt $ 4,066       $ 3,729    

___________________________

(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 2015 versus the second quarter of 2014. There were four additional selling days in the first six months of 2015 versus the first six months of 2014.

(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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150730005731/en/

Coca-Cola Enterprises, Inc.Investor RelationsThor Erickson, +1-678-260-3110orMedia RelationsFred Roselli, +1-678-260-3421