SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to Section 240.14a-12
PANAMERICAN BEVERAGES, INC.
(Name of Person(s) Filing Proxy Statement)
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[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
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statement number, or the Form or Schedule and the date of its filing.
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Index to Exhibits
-----------------
Exhibit No. Description
- ----------- -----------
99.1 Press release, dated February 5, 2003, issued by
Panamerican Beverages, Inc.
Exhibit 99.1
THE FOLLOWING IS THE TEXT OF A PRESS RELEASE ISSUED BY PANAMERICAN
BEVERAGES, INC. ON FEBRUARY 5, 2003:
February 5, 2003
PANAMCO ANNOUNCES FOURTH QUARTER
AND FULL YEAR 2002 FINANCIAL RESULTS
------------------------------------
o On December 23rd, 2002, Panamco (NYSE:PB) announced that it had entered
into an agreement to sell the Company to Coca-Cola FEMSA (NYSE:KOF) for a
total consideration of $3.6 billion. On January 30, 2003, the Company
filed a preliminary proxy statement related to this transaction with the
Securities and Exchange Commission. The Company expects the transaction
to close during the second quarter of 2003.
o In late December, Panamco successfully concluded the tender offer for
shares of Coca-Cola de Panama through its ownership in CA Beverages Inc.,
with an acceptance rate of approximately 95%. It is expected that, during
the first quarter of 2003, CA Beverages Inc. will sell its shares in
Coca-Cola de Panama to Panamco, allowing for consolidation of this entity
into Panamco's results.
o While a general strike in Venezuela impacted results, progress in other
key markets enabled Panamco to report full year consolidated recurring
Cash Operating Profit1 ("COP") of $416.7 million, in line with previously
announced guidance of $415.0 million to $425.0 million.
o On December 2nd, 2002, a general strike began in Venezuela, halting
Panamco's production and distribution activities in that country. The
Company is working with The Coca-Cola Company to protect its employees
and assets, and with the food manufacturer's association in Venezuela to
develop and implement a plan to resume operations, albeit on a limited
basis.
o Despite a less favorable than forecasted exchange rate and adverse
weather in November, Mexico's fourth quarter recurring COP grew 22.9%
versus prior year and recurring COP margin improved to 26.7% versus prior
year. Key factors in COP performance were total unit case volume growth
of 4.6% and cash operating expense improvements from business initiatives
executed earlier in the year. Recurring COP for NOLAD increased 18.5%
from a year ago.
- ---------------
1 Recurring Cash Operating Profit is Operating Income plus depreciation and
amortization, plus facilities, reorganization and other charges. Recurring COP
is the same as COP excluding facilities reorganization and other charges, as
used in previous Panamco press releases.
o During the quarter, Colombia's 0.6% total unit case volume growth, 1.7%
increase in currency neutral revenue per case and 27.4% improvement in
cash operating expenses, contributed to a COP margin of 22.0%, 289 basis
points higher than the prior year. However, these results did not offset
the impact of a 20.7% average year-over-year devaluation of the Colombian
peso, which drove recurring COP down 2.5% for the quarter.
o Similarly, Brazil's fourth quarter recurring COP declined 30.8% or $1.6
million versus the prior year. While Brazil's pricing architecture
delivered 7.6% unit case volume growth, a 10.6% improvement in currency
neutral revenue per case and a 27.3% improvement in cash operating
expenses, these improvements did not fully offset the impact of the 43.4%
average year-over-year devaluation of the Brazilian real.
MIAMI, FL, February 5, 2003 - Panamerican Beverages, Inc. ("Panamco") (NYSE:
PB), the largest soft drink bottler in Latin America and the third largest
bottler of Coca-Cola products in the world, today reported fourth quarter and
full year 2002 financial results. For the fourth quarter, net income reached
$17.6 million, or $0.15 per diluted share. Net income for the full year
reached $33.2 million or $0.27 per diluted share. These compare to net income
of $26.4 million and $118.0 million in the fourth quarter and full year 2001,
respectively. Excluding facilities reorganization and other charges, and the
one-time gain from the sale of Kaiser, Panamco reported net income for the
full year 2002 of $76.6 million, ahead of previously announced guidance of
$60.0 million to $70.0 million.
Craig Jung, Panamco's President and Chief Executive Officer, said: "During the
fourth quarter, Panamco's overall results were negatively impacted by a
general strike in Venezuela that began on December 2nd, 2002 and has
effectively halted production and distribution activities in that country
since then. However and importantly, Panamco achieved meaningful improvements
and gains in all other markets through price and mix management, better retail
execution and tighter cost and expense controls."
Mr. Jung continued: "With regard to Venezuela, since December 2nd, we have
worked closely with The Coca Cola Company to take all appropriate actions to
safeguard our employees, our assets, and the Coca-Cola(R) trademark in that
country, while maintaining a strictly apolitical position. We are presently
working within CAVIDEA, Venezuela's food
2
manufacturers' association, to develop and implement a plan to return to
limited sales operations. Given the limited inventories of gasoline in the
country, we expect the resumption of operations to be a gradual process over a
forty-five to ninety day period from the time Venezuela's oil industry resumes
full production. In the interim, we have taken prudent steps to further reduce
Panamco's operating expense "burn rate" in Venezuela from December levels."
During the quarter, currencies continued to weaken against the U.S. dollar
across the region, affecting operating profitability through the higher cost
of imported raw materials, as well as the translation of results into U.S.
dollars. To isolate the impact of translation on results, revenue and revenue
per case growth, throughout this report, are sometimes expressed on a currency
neutral basis for comparison purposes. 2
Additionally, during the fourth quarter, Panamco did not incur any facilities,
reorganization and other charges, but reversed $2.0 million of said charges.
When comparing results to the prior year, recurring COP, as defined in
Footnote 1, excludes the effects of any facilities reorganization and other
charges.
Panamco's results throughout this report also exclude operating results of
Coca-Cola de Panama, however, an equity loss of roughly $0.4 million in CA
Beverages Inc., related to the beer business, is included in the Other Income
(Expense) line of Panamco's consolidated statements of operations.
FOURTH QUARTER CONSOLIDATED RESULTS
Volume
In the fourth quarter, Panamco's continued focus on rational and sustainable
pricing architectures, improved channel and package mix management and better
retail execution drove volume growth in all regions except Venezuela, where
sales were impacted by a general strike.
- ---------------
2 Please see Exhibit 1 for foreign exchange rates used in currency neutral
calculation.
3
NOLAD recorded total unit case volume growth of 5.1% for the quarter. Also
during the fourth quarter, Colombia and Brazil posted Carbonated Soft Drink
("CSD") unit case volume growth of 1.3% and 10.0%, respectively. Total unit
case volume growth in these countries was 0.6% in Colombia and 7.6% in Brazil
for the quarter. Although Venezuela posted 4.4% CSD volume growth in the
October/November period versus prior year, Venezuela's total volume declined
32.0% in the quarter as a result of the general strike.
REVENUES
During the quarter, Panamco generated net revenues of $546.5 million,
representing a decline of 20.4% from the same quarter a year ago. Net revenue
per unit case in US dollars declined 19.9% versus prior year, primarily due to
year-over-year currency devaluations across key regions.
In Mexico, currency neutral net revenue per unit case declined 1.4% versus the
prior year primarily due to pricing activities on the 2 Liter Returnable PET,
a key package in Panamco's Big Cola defense plan, and competitive pricing on 2
Liter PET packages in supermarkets in December. The Company is now evaluating
executing a price increase in selected markets in Mexico in the first quarter
of 2003.
In Colombia, currency neutral net revenue per unit case increased 1.7% versus
the prior year, reflecting a strategic decision to restore growth on
returnable packages, which was offset by year-over-year devaluation of 20.7%.
In Brazil, currency neutral net revenue per unit case grew 10.6%, offset by
year-over-year devaluation of 43.4%.
Venezuela's fourth quarter revenues declined 63.1% versus the prior year,
impacted by the general strike from December 2nd onward, and compounded by
year-over-year devaluation of 84.2%. On a currency neutral basis, fourth
quarter net revenue per unit case in Venezuela remained flat versus the prior
year.
4
OPERATING PROFITABILITY
Panamco's consolidated gross margin in the fourth quarter was 48.2%, a decline
of 47 basis points versus the prior year. Consolidated gross margin in the
quarter was positively impacted by Mexico's 55.6% gross margin, a 244 basis
point improvement versus prior year, but offset by lower gross margins in
Venezuela, Brazil and, to a lesser extent, Colombia. Gross margins in these
countries were affected by higher year-over-year costs for U.S. dollar
denominated raw materials (e.g., PET bottles, aluminum cans, and sugar) due to
currency devaluations, as well as continued changes in mix towards one-way
presentations.
Consolidated recurring COP for the quarter was $95.5 million, driving a
recurring COP margin of 17.5%, flat versus the prior year. Consolidated
results were impacted by a COP loss of $12.2 million in Venezuela in the
quarter, owing to the general strike in the country. Excluding Venezuela,
recurring COP would have been $107.7 million, for growth of 9.2% versus the
prior year.
Within NOLAD, Mexico led the way with recurring COP growth of 22.9% in the
fourth quarter, as expense control and volume growth contributed to a
recurring COP margin in Mexico of 26.7%, a 629 basis points improvement over
the prior year and a sequential improvement of 240 basis points over Mexico's
third quarter recurring COP margin.
NOLAD's $79.7 million recurring COP and 18.5% growth in COP in the fourth
quarter did fall short of Panamco's 20.0% to 25.0% growth forecast. This
shortfall was a result of less favorable than forecasted foreign exchange rate
and adverse weather in Mexico in November. Notwithstanding the shortfall to
the forecast, the Company is pleased with the progress in NOLAD in the fourth
quarter and, in particular, its progress in Mexico.
Colombia delivered on its commitment to restore expense controls in the fourth
quarter, as cash operating expenses improved 27.4% versus the prior year.
Expense controls drove a fourth quarter recurring COP margin of 22.0% in
Colombia, a 289 basis point improvement versus the prior year.
5
Brazil's fourth quarter recurring COP margin of 4.1%, or 83 basis points lower
than a year ago, was mainly the result of currency devaluation on dollar
denominated raw materials and difference in timing of marketing expenses
compared to a year ago.
FULL YEAR 2002
Panamco reported COP for the full year 2002, excluding facilities
reorganization and other charges, of $416.7 million, a decline of 19.9% from a
year ago. Results were in line with previous guidance and despite
deteriorating conditions in Venezuela. Venezuela reported COP for the year,
excluding facilities reorganization and other charges, of $8.7 million, a
decline of 90.8% versus a year ago. Venezuela's COP loss during the month of
December was approximately $7.7 million. Although Venezuela's COP represented
only 2.1% of Panamco's full year consolidated COP, excluding facilities
reorganization and other charges, the Company is taking appropriate actions to
minimize our losses. Venezuela's monthly COP loss is currently estimated at
$5.5 to $6.5 million, taking into account that there are no sales, but
Panamco's workforce is fully paid. The Company remains committed to Venezuela
and its main focus will continue to be the safety and security of its
employees and assets.
Panamco's full year consolidated net income totaled $33.2 million,
representing a decrease of 71.8% versus the previous year. Net income,
excluding facilities reorganization and other charges, and the one-time gain
from the sale of Kaiser, reached $76.6 million for the year, ahead of
previously announced guidance of $60.0 million to $70.0 million.
OTHER
During the fourth quarter, Panamco reversed facilities reorganization and
other charges totaling $2.0 million. Total gross facilities reorganization and
other charges for full year 2002 reached $61.6 million, of which $24.2 million
were cash charges.
During the year, Panamco reduced its gross debt by $78.4 million or 8.1%
versus the prior year. Net interest expense decreased 20.1% during the year.
Full year gross debt of $891.9
6
includes the financing of roughly $60.0 million, for the acquisition of
Coca-Cola de Panama, which is expected to be repaid during the first quarter
of 2003. Net debt totaled $822.8 million, a reduction of $13.7 million or 1.6%
compared to a year ago. In addition to the gross debt reduction, Panamco also
paid $23.0 million in operating leases.
Note: Panamco will hold a conference call on Wednesday, February 5, 2003 at
10:00 a.m. EST to discuss this announcement. Call in numbers are 877-691-0878
for US participants and 973-582-2741 for callers outside the US. This call
will be simultaneously webcast, and can be accessed directly at
www.panamco.com. A replay of the conference call will be available through
Wednesday, February 12, 2003 at 3:00 p.m. EST. Call in numbers for the replay
are 877-519-4471 for US participants and 973-341-3080 for calls outside the
US. The conference ID number for the replay is 3722842.
ABOUT PANAMCO
Panamco is the largest soft drink bottler in Latin America and one of the
three largest bottlers of Coca-Cola products in the world. The Company
produces and distributes substantially all Coca-Cola soft drink products in
its franchise territories in Mexico, Brazil, Colombia, Venezuela, Costa Rica,
Nicaragua, Guatemala and Panama along with bottled water, beer and other
beverages in some of these territories. Panamco is an anchor bottler of The
Coca-Cola Company.
FORWARD-LOOKING STATEMENTS
Statements made in this press release that are not historical in nature may
include "forward-looking statements" within the meaning of U.S. federal
securities laws, including statements related to anticipated future earnings
and cost savings. Such statements, estimates, and projections reflect various
assumptions by Panamco's management concerning anticipated results and are
subject to significant business, economic and competitive uncertainties and
contingencies, many of which are beyond Panamco's control. Factors that could
cause Panamco's actual results to differ include, but are not limited to,
changes in the soft drink business environment (including actions of
competitors and changes in consumer preference), changes in governmental laws
and regulations (including income and excise taxes), currency fluctuations,
market demand for new and existing products and raw material prices.
Accordingly, Panamco cannot assure that such statements, estimates and
projections will be realized. The forecasts and actual results will likely
vary and those variations may be material. Panamco makes no representation or
warranty as to the accuracy or completeness of such statements, estimates or
projections contained in this press release or that any forecast contained
herein will be achieved. Panamco undertakes no obligation to update such
statements, estimates or projections. Information concerning such factors is
contained in Panamco's Registration Statement on Form S-8, dated July 23,
2001, its Annual Report on Form 10-K for the year ended
7
December 31, 2001, and other documents since filed by Panamco with the U.S.
Securities and Exchange Commission (the "SEC"), all of which are available
from the SEC.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
On January 30, 2003, Panamerican Beverages, Inc. filed with the Securities and
Exchange Commission a preliminary proxy statement regarding the proposed
business combination transaction referred to in the foregoing information. In
addition, Panamerican Beverages, Inc. will prepare and file with the SEC a
definitive proxy statement and other documents regarding the proposed
transaction. Investors and security holders are urged to read the definitive
proxy statement, when it becomes available, because it will contain important
information. The definitive proxy statement will be sent to shareholders of
Panamerican Beverages, Inc. seeking their approval of the proposed
transaction. Investors and security holders may obtain a free copy of the
definitive proxy statement (when it is available) and other documents filed
with the SEC by Panamerican Beverages, Inc. at the SEC's website at
www.sec.gov. The definitive proxy statement (when it is available) and these
other documents may also be obtained for free from Panamerican Beverages, Inc.
by directing a request to Laura I. Maydon (lmaydon@panamcollc.com).
CERTAIN INFORMATION CONCERNING PARTICIPANTS
A detailed list of names, affiliations and interests of participants in the
solicitation of proxies of Panamerican Beverages, Inc. to approve the proposed
business combination is included in the preliminary proxy statement.
# # #
Contacts:
Laura I. Maydon Matt Benson/Kara Findlay
Panamerican Beverages, Inc. Citigate Sard Verbinnen
305/929-0867 212/687-8080
PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(STATED IN THOUSANDS OF U.S. DOLLARS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31,
----------------------------------- -------------------------------------
2002 2001 % CHANGE 2002 2001 % CHANGE
--------- --------- -------- ----------- ----------- --------
Net sales $ 546,465 $ 686,493 -20.4% $ 2,357,913 $ 2,630,772 -10.4%
Cost of sales, excluding depreciation and
amortization shown separately below 282,912 352,184 -19.7% 1,195,954 a) 1,296,307 -7.7%
--------- --------- ------- ----------- ----------- --------
Gross profit 263,553 334,309 -21.2% 1,161,959 1,334,465 -12.9%
Operating expenses:
Selling, general and administrative 168,071 215,606 -22.0% 750,941 b) 814,184 -7.8%
Depreciation and amortization 44,162 56,035 -21.2% 235,205 c) 237,083 -0.8%
Facilities reorganization and
other charges (benefits) (2,049) - NM 35,421 - NM
--------- --------- ------- ----------- ----------- --------
210,184 271,641 -22.6% 1,021,567 1,051,267 -2.8%
--------- --------- ------- ----------- ----------- --------
Operating income 53,369 62,668 -14.8% 140,392 283,198 -50.4%
Interest expense, net (18,203) (30,560) -40.4% (78,318) (98,049) -20.1%
Other income (expense), net
2,354 (3,424) NM 27,165 d) (10,891) NM
--------- --------- ------- ----------- ----------- --------
Income before income taxes 37,520 28,684 30.8% 89,239 174,258 48.8%
Provision for income taxes 18,203 1,152 NM 51,126 50,369 1.5%
--------- --------- ------- ----------- ----------- --------
Income before minority interest 19,317 27,532 -29.8% 38,113 123,889 -69.2%
Minority interest in earnings of
consolidated subsidiaries 1,765 1,181 49.4% 4,871 5,865 -16.9%
--------- --------- ------- ----------- ----------- --------
Net income $ 17,552 $ 26,351 -33.4% $ 33,242 $ 118,024 -71.8%
========= ========= ======= =========== =========== ========
Diluted earnings per share $ 0.15 $ 0.21 -28.6% $ 0.27 $ 0.93 -71.0%
========= ========= ======= =========== =========== ========
Diluted weighted average shares
outstanding 120,151 122,873 -2.2% 121,172 126,655 -4.3%
========= ========= ======= =========== =========== ========
Results excluding facilities reorganization
and other charges (benefits):
Operating income $ 51,320 $ 62,668 -18.1% $ 232,607 $ 283,198 -17.9%
========= ========= ======= =========== =========== ========
Cash operating profit (1) $ 95,482 $ 118,703 -19.6% $ 416,715 $ 520,281 -19.9%
========= ========= ======= =========== =========== ========
Net income $ 15,503 $ 26,351 -41.2% $ 76,572 $ 118,024 -35.1%
========= ========= ======= =========== =========== ========
(1) Reconciliation from reported operating income to Cash operating profit, excluding facilities reorganization and other charges
(benefits):
Reported operating income $ 53,369 $ 62,668 $ 140,392 $ 283,198
Plus: Depreciation and amortization 44,162 56,035 235,205 237,083
Plus: Facilities reorganization and
other charges (benefits) included in
operating expenses (a, b) - - 5,697 -
Plus: Facilities reorganization and
other charges (benefits) (2,049) - 35,421 -
--------- --------- ------- ----------- -----------
Cash operating profit, excluding
facilities reorganization and other
charges (benefits) $ 95,482 $ 118,703 $ 416,715 $ 520,281
========= ========= ======= =========== ===========
Facilities reorganization and other charges included in operating and nonoperating expenses:
a) Includes $3,221 in charges. b) Includes $2,476 in charges. c) Includes $51,097 in charges. d) Includes a $48,623 gain on sale of
Kaiser offset by $17,988 in charges.
NM = Not meaningful
PANAMCO NOLAD
(STATED IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31,
----------------------------------- -------------------------------------
2002 2001 % CHANGE 2002 2001 % CHANGE
--------- --------- -------- ----------- ----------- --------
Income statement data:
Net sales $ 312,981 $ 326,776 -4.2% $ 1,298,856 $ 1,283,824 1.2%
Cost of sales, excluding depreciation and
amortization shown separately below 140,077 152,430 -8.1% 587,194 a) 568,515 3.3%
--------- --------- ------- ----------- ----------- --------
Gross profit 172,904 174,346 -0.8% 711,662 715,309 -0.5%
Operating expenses:
Selling, general and administrative 93,187 107,093 -13.0% 409,154 b) 408,703 0.1%
Depreciation and amortization 19,144 17,174 11.5% 80,297 c) 79,634 0.8%
Facilities reorganization and
other charges - 1,144 NM 8,704 1,144 NM
--------- --------- ------- ----------- ----------- --------
Operating income $ 60,573 $ 48,935 23.8% $ 213,507 $ 225,828 -5.5%
========= ========= ======= =========== =========== ========
Net income attributable to Panamco $ 34,728 $ 29,248 18.7% $ 118,198 $ 139,915 -15.5%
========= ========= ======= =========== =========== ========
Results excluding facilities reorganization
and other charges:
Operating income $ 60,573 $ 50,079 21.0% $ 230,348 $ 226,972 1.5%
========= ========= ======= =========== =========== ========
Cash operating profit (1) $ 79,717 $ 67,253 18.5% $ 304,609 $ 306,606 -0.7%
========= ========= ======= =========== =========== ========
Net income $ 34,728 $ 30,392 14.3% $ 133,456 $ 141,059 -5.4%
========= ========= ======= =========== =========== ========
(1) Reconciliation from reported operating income to Cash operating profit, excluding facilities reorganization and other charges:
Reported operating income $ 60,573 $ 48,935 $ 213,507 $ 225,828
Plus: Depreciation and amortization 19,144 17,174 80,297 79,634
Plus: Facilities reorganization and
other charges included in operating
expenses (a, b) - - 2,101 -
Plus: Facilities reorganization and
other charges - 1,144 8,704 1,144
--------- --------- ------- ----------- -----------
Cash operating profit, excluding
facilities reorganization and
other charges $ 79,717 $ 67,253 $ 304,609 $ 306,606
========= ========= ======= =========== ===========
Facilities reorganization and other charges included in operating and nonoperating expenses:
a) Includes $1,732 in charges. b) Includes $369 in charges. c) Includes $6,036 in charges.
NM = Not meaningful
Unit case sales volume growth:
Soft drinks 5.0% 4.1%
Water 5.0% 7.4%
Other products 6.9% 59.3%
------- --------
Total growth 5.1% 5.7%
======= ========
PANAMCO COLOMBIA
(STATED IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31,
----------------------------------- -------------------------------------
2002 2001 % CHANGE 2002 2001 % CHANGE
--------- --------- -------- ----------- ----------- --------
Income statement data:
Net sales $ 90,334 $ 106,622 -15.3% $ 367,098 $ 381,468 -3.8%
Cost of sales, excluding depreciation and
amortization shown separately below 44,765 50,840 -11.9% 174,360 180,638 -3.5%
--------- --------- ------- ----------- ----------- --------
Gross profit 45,569 55,782 -18.3% 192,738 200,830 -4.0%
Operating expenses:
Selling, general and administrative 25,707 35,421 -27.4% 120,961 120,588 0.3%
Depreciation and amortization 10,462 14,025 -25.4% 49,696 a) 56,404 -11.9%
Facilities reorganization and
other charges (benefits) - (1,000) NM 2,267 (1,000) NM
--------- --------- ------- ----------- ----------- --------
Operating income $ 9,400 $ 7,336 28.1% $ 19,814 $ 24,838 -20.2%
========= ========= ======= =========== =========== ========
Net income attributable to Panamco $ 9,522 $ 2,713 NM $ 10,452 $ 10,287 1.6%
========= ========= ======= =========== =========== ========
Results excluding facilities
reorganization and other charges:
Operating income $ 9,400 $ 6,336 48.4% $ 25,443 $ 23,838 6.7%
========= ========= ======= =========== =========== ========
Cash operating profit (1) $ 19,862 $ 20,361 -2.5% $ 71,777 $ 80,242 -10.5%
========= ========= ======= =========== =========== ========
Net income $ 9,522 $ 1,713 NM $ 15,330 $ 9,287 65.1%
========= ========= ======= =========== =========== ========
(1) Reconciliation from reported operating income to Cash operating profit, excluding facilities reorganization and other charges
(benefits):
Reported operating income $ 9,400 $ 7,336 $ 19,814 $ 24,838
Plus: Depreciation and amortization 10,462 14,025 49,696 56,404
Plus: Facilities reorganization and
other charges (benefits) included in
operating expenses - - - -
Plus: Facilities reorganization and
other charges (benefits) - (1,000) 2,267 (1,000)
--------- --------- ------- ----------- -----------
Cash operating profit, excluding
facilities reorganization and other
charges benefits) $ 19,862 $ 20,361 $ 71,777 $ 80,242
========= ========= ======= =========== ===========
Facilities reorganization and other charges (benefits) included in operating and nonoperating expenses:
a) Includes $3,362 in charges.
NM = Not meaningful
Unit case sales volume growth (decline):
Soft drinks 1.3% -2.7%
Water -3.4% -8.2%
Other products 10.5% 12.5%
------- --------
Total growth (decline) 0.6% -3.6%
======= ========
PANAMCO VENEZUELA
(STATED IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31,
----------------------------------- -------------------------------------
2002 2001 % CHANGE 2002 2001 % CHANGE
--------- --------- -------- ----------- ----------- --------
Income statement data:
Net sales $ 53,644 $ 145,271 -63.1% $ 324,948 $ 554,679 -41.4%
Cost of sales, excluding depreciation and
amortization shown separately below 34,597 76,429 -54.7% 195,497 a) 277,746 -29.6%
--------- --------- ------- ----------- ----------- --------
Gross profit 19,047 68,842 -72.3% 129,451 276,933 -53.3%
Operating expenses:
Selling, general and administrative 31,225 48,726 -35.9% 123,917 b) 182,993 -32.3%
Depreciation and amortization 12,127 15,612 -22.3% 93,098 c) 61,184 52.2%
Facilities reorganization and
other charges - (4,515) NM 24,651 (4,515) NM
--------- --------- ------- ----------- ----------- --------
Operating income (loss) $ (24,305) $ 9,019 NM $ (112,215) $ 37,271 NM
========= ========= ======= =========== =========== ========
Net income (loss) attributable to
Panamco $ (25,030) $ 18,974 NM $ (109,430) $ 47,546 NM
========= ========= ======= =========== =========== ========
Results excluding facilities
reorganization
and other charges:
Operating income (loss) $ (24,305) $ 4,504 NM $ (42,724) $ 32,756 NM
========= ========= ======= =========== =========== ========
Cash operating profit (loss) (1) $ (12,178) $ 20,116 NM $ 8,675 $ 93,940 -90.8%
========= ========= ======= =========== =========== ========
Net income (loss) $ (25,030) $ 14,459 NM $ (42,179) $ 43,031 NM
========= ========= ======= =========== =========== ========
(1) Reconciliation from reported operating income (loss) to Cash operating profit (loss), excluding facilities reorganization
and other charges (benefits):
Reported operating income (loss) $ (24,305) $ 9,019 $ (112,215) $ 37,271
Plus: Depreciation and amortization 12,127 15,612 93,098 61,184
Plus: Facilities reorganization and
other charges (benefits) included in
operating expenses (a, b) - - 3,141 -
Plus: Facilities reorganization and
other charges (benefits) - (4,515) 24,651 (4,515)
--------- --------- ------- ----------- -----------
Cash operating profit (loss), excluding
facilities reorganization and other
charges (benefits) $ (12,178) $ 20,116 $ 8,675 $ 93,940
========= ========= ======= =========== ===========
Facilities reorganization and other charges (benefits) included in operating and nonoperating expenses:
a) Includes $1,489 in charges. b) Includes $1,652 in charges. c) Includes $41,699 in charges.
NM = Not meaningful
Unit case sales volume growth (decline):
Soft drinks -31.5% -14.3%
Water -36.3% -23.9%
Beer -79.5% -45.3%
Other products -7.8% 24.7%
------- --------
Total growth (decline) -32.0% -14.8%
======= ========
PANAMCO BRAZIL
(STATED IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31,
----------------------------------- -------------------------------------
2002 2001 % CHANGE 2002 2001 % CHANGE
--------- --------- -------- ----------- ----------- --------
Income statement data:
Net sales $ 89,506 $ 107,824 -17.0% $ 367,011 $ 410,801 -10.7%
Cost of sales, excluding depreciation and
amortization shown separately below 64,828 73,611 -11.9% 242,957 273,877 -11.3%
--------- --------- ------- ----------- ----------- --------
Gross profit 24,678 34,213 -27.9% 124,054 136,924 -9.4%
Operating expenses:
Selling, general and administrative 20,982 28,870 -27.3% 99,779 a) 105,061 -5.0%
Depreciation and amortization 2,627 4,275 -38.5% 13,559 19,913 -31.9%
Facilities reorganization and
other charges (benefits) - - NM (3,381) - NM
--------- --------- ------- ----------- ----------- --------
Operating income $ 1,069 $ 1,068 0.1% $ 14,097 $ 11,950 18.0%
========= ========= ======= =========== =========== ========
Net income (loss) attributable to
Panamco $ 1,231 $ (1,579) NM $ 57,413 $ 3,152 NM
========= ========= ======= =========== =========== ========
Results excluding facilities
reorganization
and other charges (benefits):
Operating income $ 1,069 $ 1,068 0.1% $ 11,171 $ 11,950 -6.5%
========= ========= ======= =========== =========== ========
Cash operating profit (1) $ 3,696 $ 5,343 -30.8% $ 24,730 $ 31,863 -22.4%
========= ========= ======= =========== =========== ========
Net income (loss) $ 1,231 $ (1,579) NM $ 7,176 $ 3,152 NM
========= ========= ======= =========== =========== ========
(1) Reconciliation from reported operating income to Cash operating profit,
excluding facilities reorganization and other charges (benefits):
Reported operating income $ 1,069 $ 1,068 $ 14,097 $ 11,950
Plus: Depreciation and amortization 2,627 4,275 13,559 19,913
Plus: Facilities reorganization and
other charges (benefits) included in
operating expenses (a) - - 455 -
Plus: Facilities reorganization and
other charges (benefits) - - (3,381) -
--------- --------- ------- ----------- -----------
Cash operating profit, excluding
facilities reorganization and other
charges (benefits) $ 3,696 $ 5,343 $ 24,730 $ 31,863
========= ========= ======= =========== ===========
Facilities reorganization and other charges (benefits) included in operating and nonoperating expenses:
a) Includes $455 in charges.
NM = Not meaningful
Unit case sales volume growth (decline):
Soft drinks 10.0% -0.9%
Water -3.8% -5.4%
Beer 2.1% -9.4%
Other products NM NM
------- --------
Total growth (decline) 7.6% -2.7%
======= ========
PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
SUMMARY OF FACILITIES REORGANIZATION AND OTHER CHARGES (BENEFITS)
(STATED IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
HEAD-
NOLAD COLOMBIA VENEZUELA BRAZIL QUARTERS TOTAL
-------- -------- --------- --------- -------- --------
FOURTH QUARTER 2002:
Cost of sales
Selling, general and administrative
Cash facilities reorganization and other
charges (benefits) $ (2,049) $ (2,049)
-------- --------
Total cash charges (benefits) (2,049) (2,049)
Depreciation: write-off of property, plant
& equipment and bottles and cases
Noncash facilities reorganization and
other charges (benefits)
Total noncash charges (benefits) - -
-------- --------
Total operating charges (benefits) (2,049) (2,049)
Other income (expense), net:
Nonoperating charges (benefits) - -
-------- --------
Gross charges (benefits) (2,049) (2,049)
Tax provision (benefit) - -
-------- --------
Net charges (benefits) $ (2,049) $ (2,049)
FULL YEAR 2002:
Cost of sales $ 1,732 $ - $ 1,489 $ - $ - $ 3,221
Selling, general and administrative 369 - 1,652 455 - 2,476
Cash facilities reorganization and other
charges (benefits) 7,743 2,267 8,704 (3,381) 3,180 18,513
-------- -------- -------- --------- -------- --------
Total cash charges (benefits) 9,844 2,267 11,845 (2,926) 3,180 24,210
Depreciation: write-off of property, plant
& equipment and bottles and cases 6,036 3,362 41,699 - - 51,097
Noncash facilities reorganization and
other charges (benefits) 961 - 15,947 - - 16,908
-------- -------- -------- --------- -------- --------
Total noncash charges (benefits) 6,997 3,362 57,646 - - 68,005
-------- -------- -------- --------- -------- --------
Total operating charges (benefits) 16,841 5,629 69,491 (2,926) 3,180 92,215
Other income (expense), net:
Nonoperating charges (benefits)
8,461 1,224 4,610 (47,885) 3,000 (30,635)
-------- -------- -------- --------- -------- --------
Gross charges (benefits) 25,257 6,853 74,101 (50,811) 6,180 61,580
Tax provision (benefit) (9,999) (1,975) (6,850) 574 - (18,250)
-------- -------- -------- --------- -------- --------
Net charges (benefits) $ 15,258 $ 4,878 $ 67,251 $ (50,237) $ 6,180 $ 43,330
======== ======== ======== ========= ======== ========
PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(STATED IN THOUSANDS OF UNITED STATES OF AMERICA ("U.S.") DOLLARS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)
DECEMBER 31, 2002 DECEMBER 31, 2001
----------------- -----------------
ASSETS
Current assets:
Cash and equivalents $ 69,024 $ 133,666
Accounts receivable, net 128,169 136,614
Inventories, net 105,116 103,040
Other current assets 17,010 27,466
----------- -----------
Total current assets 319,319 400,786
Investments 82,376 28,522
Property, plant and equipment, net 1,006,692 1,257,778
Cost in excess of net assets acquired, net 836,657 869,056
Other assets 82,562 136,884
----------- -----------
Total assets $ 2,327,606 $ 2,693,026
=========== ===========
LIABILITIES
Current liabilities:
Accounts payable $ 264,128 $ 274,164
Current portion of long-term obligations 208,914 75,439
Bank loans 135,495 35,184
Other accrued liabilities 142,898 184,878
----------- -----------
Total current liabilities 751,435 569,665
----------- -----------
Long-term liabilities:
Long-term obligations, net of current portion 547,453 859,619
Other liabilities 99,310 162,756
----------- -----------
Total long-term liabilities 646,763 1,022,375
----------- -----------
Minority interest 25,121 28,541
Shareholders' equity 904,287 1,072,445
Total liabilities and shareholders' equity $ 2,327,606 $ 2,693,026
=========== ===========
EXHIBIT 1
PANAMERICAN BEVERAGES, INC. AND SUBSIDIARIES
FOURTH QUARTER AVERAGE EXCHANGE RATES
(UNAUDITED)
The following table is for informational purposes only. Fourth quarter average
exchange rates were used for currency neutral calculations.
AVERAGE EXCHANGE RATES INFLATION RATES
------------------------------------------------------------------------ ---------------
FOURTH QUARTER FOURTH QUARTER FULL YEAR FULL YEAR FULL YEAR
2002 2001 2002 2001 2002
-------------- -------------- --------------- --------------- ---------------
Mexico 10.16 9.25 9.66 9.34 5.71%
Colombia 2,791.88 2,312.16 2,505.00 2,299.83 7.01%
Venezuela 1,377.07 747.47 1,165.72 723.85 31.19%
Brazil 3.67 2.56 2.92 2.35 12.18%