Coca-Cola Enterprises Inc. Reports Third-Quarter 2009 Results

Coca-Cola Enterprises (NYSE: CCE) today reported third-quarter 2009 net income of $247 million, or 50 cents per diluted common share. Excluding items affecting comparability, third-quarter 2009 net income was $254 million or 51 cents per diluted share, 12 percent above results for the same quarter a year ago.

The following table reconciles reported and comparable earnings per common share:

Consolidated comparable third quarter operating income grew 5 percent. North American comparable operating income grew $23 million or 9 percent and, in Europe, operating income grew $46 million, or 17 percent, including a negative currency impact of approximately $31 million. In the quarter, total revenues were down 3 percent, as North American revenue declined 4 percent and European revenue fell 1 percent. Excluding a negative currency impact of 3 percent, total revenues were flat. Comparable EPS results of 51 cents include a negative currency impact of approximately 4 cents.

“Year to date, we have achieved strong profit growth through successful execution of brand and marketplace initiatives and efficiency and effectiveness programs,” said John F. Brock, chairman and chief executive officer. “Going forward, we continue to develop solid business plans for 2010 that will enable us to increase the efficiency and synergy of our system and deliver consistent, balanced growth.”

Consolidated third quarter results include a decline of 6½ percent in comparable physical case bottle and can volume. Net pricing per case increased 7½ percent, and cost of sales per case increased 3½ percent. Pages 10 through 14 of this release provide a reconciliation of reported and comparable operating results.

NORTH AMERICAN RESULTS

In North America, increased operating profitability reflects the benefits of price/package architecture, efficiency initiatives, and year-over-year declines in some commodity prices. Third-quarter volume declined 10 percent, impacted by the Olympic-related promotional volume growth hurdle created in the same quarter a year ago and the shift of 4th of July holiday volume into the second quarter. Pricing per case grew 7½ percent and cost of sales per case increased 3½ percent.

“Profitability in North America remained in-line with our expectations despite a challenging economic, consumer and operating environment,” Mr. Brock said. “Our earlier actions to drive improved effectiveness and efficiency and to enhance margins through price/package architecture initiatives continue to improve profitability.

“We see ongoing growth opportunities in North America created by the strength of our brands and portfolio,” Mr. Brock said. “Long-term success requires even greater efficiency and supply chain synergy, sustained strong cost control, and even stronger marketplace execution. We are working closely with The Coca-Cola Company to enhance our current strategies and take the steps necessary to achieve these objectives.”

EUROPEAN RESULTS

Europe again achieved strong volume and pricing growth in the quarter. Third quarter volume grew 4 percent, driven primarily by 4½ percent growth in the Coca-Cola trademark brands. Coca-Cola Zero grew more than 15 percent, and brand Coca-Cola grew 4½ percent. In addition, water grew approximately 25 percent reflecting the benefits of the addition of Abbey Well in Great Britain and double-digit growth for Chaudfontaine on the Continent. European net pricing per case was up 4½ percent and cost of sales per case was flat.

“Our European leadership team has continued to manage successfully through current economic challenges, producing another quarter of excellent operating and profit improvement,” Mr. Brock said. “We benefited from our ongoing efficiency and cost control initiatives and from the growth of our core sparkling brands, which remain a key element of the sustained growth in European profitability.

“To meet the challenge of sustaining our pattern of growth in Europe, we will remain focused on growing our core brands even as we expand our presence in other key categories with the addition of Monster and vitaminwater,” Mr. Brock said. “We also will begin distributing Ocean Spray juice drinks in Great Britain and France early next year, enhancing our portfolio of still brands that already includes Oasis, Fanta Still, and Capri-Sun.”

FULL-YEAR 2009 OUTLOOK

Management now expects full-year comparable 2009 earnings per diluted common share to be in the range of $1.54 to $1.57. This range includes an expected negative currency impact of 16 cents per share and excludes nonrecurring items. Excluding the impact of currency, revenue is expected to increase in a low to mid single-digit range and decline slightly on a reported basis. The company also expects strong free cash flow of approximately $800 million and capital expenditures of approximately $900 million.

Free cash flow will continue to be used for debt reduction, although the company is evaluating methods for returning additional cash to shareowners. The effective tax rate for 2009 is expected to be approximately 25 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 our website at www.cokecce.com.

Coca-Cola Enterprises Inc. is the world's largest marketer, distributor, and producer of bottle and can liquid nonalcoholic refreshment. CCE 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. For more information about our company, please visit our website at www.cokecce.com.

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, including our most recent annual report on Form 10-K and subsequent SEC filings.