Good day ladies and gentlemen and welcome to the Coca-Cola Enterprises full year 2010 earnings conference call. At the request of Coca-Cola Enterprises this conference is being recorded for instant replay purposes. At this time I would like to turn the conference over to Mr. Thor Erickson, Vice President of Investor Relations. Please go ahead sir.

Thank you and good morning everybody. We appreciate you joining us this morning to discuss our fourth quarter 2010 results and our outlook for 2011. Before we begin I would like to remind you all of our cautionary statement. This call will contain forward-looking management comments and other statements reflecting our outlook for future periods. These comments should be considered in conjunction with the cautionary language contained in this morning’s earnings release as well as the detailed cautionary statement found in our most recent annual report on Form 10-K and subsequent SEC filings. A copy of this information is available on our Web site at www.cokecce.com. Please also note that today’s results include both (non-GAAP and pro forma) numbers. Our reported results represent our GAAP consolidated financial statements which include an allocation of corporate expenses from legacy CCE to the first two quarters of 2010 and actual corporate expenses from the fourth quarter as well as contributions of the Norway and Sweden bottling operations from the date we acquired them on October 2, 2010. Our pro forma results are for informational purposes only and represent what our business may have looked like had the transaction occurred at the beginning of the year. These non-GAAP pro forma numbers include assumptions believed to be reasonable and should be read in conjunction with the historical financial information contained in CCE’s registration statements on Form S4 declared effective on August 25, 2010. Now this morning’s prepared remarks will be made by John Brock, our CEO, and Bill Douglas, our CFO. Hubert Patricot, President of our European Group is also with us on this call this morning. Following prepared remarks we will open the call for your questions. In order to give as many people as possible the opportunity to ask questions, please limit yourself to one question and we will take follow up questions as time permits. Now I’ll turn the call over to John Brock.

Thank you Thor and we welcome each of you as we discuss our results for the fourth quarter and full year 2010 and also review our outlook for 2011. Today’s release concludes a remarkable year for our company, our employees and very importantly, our shareholders. During 2010 everyone associated with this company had an important role of delivering extraordinary value for each stakeholder while positioning CCE for sustained value building growth. Thanks to the work of many very dedicated people we concluded our transaction with the Coca-Cola Company and at the same time delivered record earnings. These are exceptional accomplishments and every member of the new CCE team and the team at Coca-Cola Refreshments should be proud of their work. Now as you have seen in our release this morning, we finished the year with earnings per share of $1.78 on a comparable and pro forma basis. This is at the upper end of our prior guidance and includes fourth quarter comparable earnings per share of 28 cents, which was achieved despite difficult December weather conditions and ongoing soft macroeconomic conditions. Looking at full year results for legacy CCE European territories, revenue growth was 4% and comparative operating income growth was 11-1/2% both on a currency income basis. These are solid results in line with or exceeding our long-term growth targets. The strength of these results is demonstrated by the fact that CCE generated about 45% of the total value growth within the nonalcoholic ready to drink category in our legacy territories last year. Importantly our core Coca-Cola trademark brands were at the very heart of these results growing more than 3% and delivering more than half of our total volume growth for the year. Improvement in sparkling flavors and energy led by Monster and increases in stills, which were…

Thank you John and thanks to each of you for joining us this morning. We recognize it’s been a busy week in our industry. I’m very pleased to discuss our fourth quarter and full year 2010 results. This has been an incredible year given the completion of our transaction with the Coca-Cola Company and our business delivering outstanding results. On a reported basis our full year diluted earnings per common share were $1.83 and on a pro forma and comparable basis full year diluted earnings per common share were $1.78. Fourth quarter diluted earnings per share were 28 cents both on a reported as well as a pro forma and comparable basis. Pro forma revenue was $7.4 billion and pro forma operating income was $908 million. As John mentioned, our legacy CCE territories achieved their fifth consecutive year of growth with currency neutral revenues up 4% and comparable and currency neutral operating income increasing 11-1/2%. As expected, we closed 2010 with total gross debt of approximately 2.3 billion and just over 300 million in cash. As a result, our net debt was slightly less than 2 billion at year end. For 2010 reported capital expenditures totaled 291 million. Now to get a pro forma capital spend we would need to add in and adjust for Norway, Sweden and corporate spending, which would result in a pro forma capital spend of approximately 5% of net revenue. Clearly the business performed at the higher end of our expectations for the year. In addition, we moved forward with our program of returning additional cash to shareholders through our share repurchase program, completing purchases of $200 million in the fourth quarter. We will continue this program in keeping with our goal of a total of $1 billion in repurchases by the end of the…

Thank you sir. Ladies and gentlemen, if you wish to ask a question today you will need to press star, 1 on your telephone keypad. Please ensure that the mute function on your telephone is turned off or we will not receive your signal. Once again that will be star, 1 to ask a question. We will pause to allow a queue to assemble. As a brief reminder ladies and gentlemen, if you wish to ask a question today you will need to press star, 1 on your telephone keypad. We will take our first question today from Steve Powers from Bernstein. Your line is open. Please go ahead.

Thanks. Good morning. You called out the plan promotion in the quarter and also your intent to keep your pricing plans in place for 2011 but I was wondering if you could just talk about the pricing environment more generally and maybe provide some more context market by market. You have spoken previously about your intent to offset commodity inflation through pricing and I’m just wondering with the higher PET cost is that still the intent? What are you seeing from competitors in the marketplace in general? That’d be great. Thanks.

I’ll explain that one first Steve by saying absolutely we have said and will continue to say that we intend on at least maintaining if not increasing margins as we balance pricing across the board. So we anticipate that will be the case in 2011. Having said that, let me ask Hubert to take a little bit about the state of our pricing situation and where we stand.

(Unintelligible) - before the end of the quarter. And we really intend to demonstrate again that we can grow both the revenue and the value, that our categories are expandable, like we did last year. And really what we have seen so far is that (unintelligible).

And does that differ at all market by market or is this pretty consistent across all your geographies?

It’s typically across all the markets.

Okay. Thank you.

Thank you.

Our next question today comes from Kaumil Gajrawala from UBS. Your line is open. Please go ahead.

Hey guys. I’m sorry if I missed this but the legacy CCE territories’ revenue growth was 4% but if you had owned Norway and Sweden last year what would your year over year revenue growth be (at large)?

Hi. It’s Bill here. The impact of that is pretty similar and I think overall the revenue growth on a pro forma basis would be about 4% as well. Remember Norway and Sweden make up less than 10% of the total revenue of the key combined CCE.

Got it. And so from the growth rate perspective it’s similar to your other businesses, correct?

Correct.

Got it. And then second, you mentioned several times in the prepared remarks you’re happy with energy. Could you - are you willing to provide us with how much it grew in the quarter?

Sure. Let me ask Hubert to talk a little bit about the strength of our energy business.

Yes. We grew more than 20% in the quarter. Energy is clearly one of the top growth categories across all our categories in terms of its growth rate. Year over year the value of the category is up 15%. Our brands, and particularly Monster, have made significant contribution to this growth. In 2010 our (unintelligible) - grew more than 25% and this is (unintelligible) - and though it’s still a small base it’s still a good and growing category for us.

Let me just add to that. I think one of the interesting things about energy in Europe is it is still reasonably small. It’s growing well above double digits and we’re taking share. So we believe it is a major growth opportunity for us both in volume and profitability.

Got it. And then just a final question - in terms of comparisons and summary, is there anything we need to know relative to the World Cup comp in a couple of quarters?

We have strong plans for this year and as mentioned by John, we have the 125th anniversary of Coca-Cola. And what I can also share with you is that this has been very well welcomed by our (testing), which will take place in quarter two and (unintelligible) - so we are really encouraged by the (unintelligible) - on this strong, strong activity. Not to mention the growth engine, which has (unintelligible)

Okay. Got it. Thank you.

Thank you.

We take our next question today from Lauren Torres from HSBC. Your line is now open.

Good morning everyone. I was hoping you’d give us an update on the health of the consumer in some of your larger markets. I guess earlier this week Coke Lenox was rather cautious with respect to trends and saying that consumers are actually weakening in a number of their markets. I know your markets are somewhat different so I was just curious to hear about trends there, if you’re seeing things firm up a bit, expectations with respect to just consumer trends and purchasing behavior. Thanks.

Maybe I’ll make one macro comment and then I’ll ask Hubert to comment a little bit more on the consumer situation in our markets. I think it’s really important to recognize that over the past 2-1/2 years challenging economic conditions throughout Europe with obviously some variances between markets. But the fact is we have had some very challenging macroeconomic situations much of which has been driven by lack of consumer confidence. And in spite of all of that as you hear me say in my opening piece, we have continued to drive our business forward, volume growth, revenue growth, profit growth has been maintained throughout all of those times, ups and downs. And frankly we think it will be the same thing in 2011 and in the future. So we do recognize macroeconomic issues. We do get concerned about what consumer expectations are. But we also think we have a business which is capable of weathering these kinds of challenges. So Hubert, do you have any other commentary?

Yes. While we are not immune from the current economic environment, which is still remaining quite difficult, it’s safe to say that we (unintelligible) - clearly more in the second channel than earlier channels, which have been so far most of our markets (unintelligible).

The other point that’s worth keeping in mind is - Lauren, I think you know this - is our price package architecture throughout our European business is very strong. And as Hubert mentioned, there has been over the last several years some trends with consumers not eating out quite as much or not participating quite as much in the away from home channel. But the fact is given the strength of our price package architecture, our clients in Europe from a profitability standpoint if there is a transition from away from home to take home, it’s not really a number issue for us, certainly not like it is in some markets around the world.

So with that said, you are still making changes with respect to price package? And I know it’s something that you probably always do but in light of a soft consumer environment there are still adjustments to be made to kind of still generate better volume and value growth?

We do that all the time. We consistently look at price package architecture. I mean introducing contouring in France is a great example of that where we really have seen some significant benefits from doing that from both a customer and a consumer standpoint. So yes, the simple answer is we adjust it regularly.

Okay. Great. Thanks.

Our next question today comes from Judy Hong from Goldman Sachs. Your line is now open.

Thanks. Good morning. I have a couple of questions for Bill actually. The negative price cost variance that you saw in the fourth quarter maybe more driven by the cost of PET accelerating, can you just go through that a little bit more and just explain kind of why was there negative variance? And then on the commodities side Bill, you said obviously the PET has risen recently but you’re still sticking to the low single digit commodity guidance. Is that just the range is a little bit towards the high end of the low single digits? Or are you assuming that PET prices come down? Thanks.

I’ll answer the second part of the question first Judy. I think intellectually the commodities have moved up within that range so whether it’s towards the higher end of the low single digits, that could be a little bit more specific. You’re not making any predictions that oil is going to move down significantly from the current prices. With respect to the first part of your question, clearly when we set a pricing plan in place we look at it on an annualized basis. So we knew that we were going to have some commodity cost of goods inflation as we moved into the back half of the year and the third quarter in particular. So that was the vision in our overall plan. And if you look at the price per case and cost per case margin expansion then imagine that on a full year basis. More specifically what you saw was as anticipated, some escalation of commodity prices in the fourth quarter particularly around the advent of the results of the oil impact. I would also say that we had a couple of minor one offs that were included in the fourth quarter that probably added somewhere between half a point or 1% of inflation in that cost number. And again given our level of headwind for 2011 as well as all of our other commodity inputs, we stand by the low single digit increase on cost of goods for 2011, arguably at the high end of that range as you highlighted.

Okay. And just from a separate pathway Bill, free cash flow conversion, there are a couple of factors like the higher CapEx and the high cash taxes at least for the next two years that depress your free cash flow conversion. Structurally speaking is this a business where free cash flow conversion should be permanently lower? Is there an opportunity to improve your working capital just in terms of the cash flow generation mirroring the net income going forward?

I guess overall we are thrilled with the free cash flow generation capability of our European business and we don’t want to do a whole lot of comparison. But it is actually a higher conversion level to use your term than the US business. The level of capital intensity overall is not as high in Europe as it is in the US. And again you’ve got to remember the majority of our capital investment in Europe is growth capital because of the good volume growth there whereas in the US there is a significant amount of maintenance capital because of the US fleet and their infrastructure to support that. I would also caution you on the comparability of the capital number. Our capital on a pro forma basis in 2010 is approximately 5% of net revenue. And our capital spend in 2011 again is going to be approximately 5% of net revenue. So there is not a meaningful step up in our capital spend ratio between ’11 and ’10. There is as I mentioned in my prepared remarks, the step up from the cash tax rate and that is we get a three-year cycle, approximately $250 million in those three years. Then that will reverse in the following years and that’s ostensibly the result of the large repatriation to support the share repurchase program. So there is nothing structurally different or concerning about our cap regeneration or conversion and working capital is in a good place and we don’t see that being a meaningful driver going forward either up or down.

And does that cash tax change at all if you do change your buy back plan either the timing of it or the amount of it?

Well, if we changed it it would. But we are pretty set on the plan that we have articulated.

So it’s based on the $1 billion plan right now.

Correct.

Okay. All right. Thank you.

Our next question today comes from Caroline Levy from CLSA. Your line is now open.

Good morning. This is Michael Avery filling in for Caroline. Just was interested to hear a little more about some of the - you said Monster is going to be in Sweden. When would that happen? And then are there other markets like Norway obviously where you might be able to do the same thing?

Hubert, you want to answer that one?

Yes. (Unintelligible) - introducing Monster in Norway (unintelligible) - it will be in the market next month.

Next month. Okay. Great. And do you have similar opportunities for anything like Ocean Spray or Capri Sun that you would also be able to move into those markets?

We are very pleased with the performance of Ocean Spray and Capri Sun and this is just something (unintelligible).

Okay. Great. And then on market share in 2010, how did that look? I know your positions are already very high but were you able to gain share in most of your markets? Could you give us a little glimpse into that?

Yes. We have gained share in all of our markets both in volume and value share. And this is (unintelligible).

All right. Great. Thank you very much.

Our next question today comes from Mark Swartzberg from Stifel Nicolaus. Your line is now open.

Yes. Thank you and good morning everyone. Two questions - one on the cost push thinking and then secondly on Coke Zero. On the cost push you mentioned this long-term commitment to maintaining margins. Is that a commitment to maintaining gross margins? Does that apply to ’11 as well? And is if fair to think that the pricing environment relative to the cost environment is a little more manageable in France than it is in Great Britain?

Hey Mark. It’s Bill here. I’ll start out with the first part of your question. The commitment to maintain our gross margins is a long-term commitment and it’s a commitment that given current information that our outlook for cost of goods sold and pricing plans, which are being implemented as we speak, we think we will maintain our slightly enhanced margins in 2011 specifically as well.

That’s a gross margin comment, Bill?

Yes. It is a gross margin comment. And clearly we strive to have modest operating expense leverage as well. So we would on balance expect it slightly better on operating margins going forward.

Great. And can you comment on France versus GB in terms of just what the consumer tolerance for price relative to cost is versus that of GB?

I don’t see a lot of major differences between the two countries. One caveat which is as you know, GB VAT has just been increased by the British government (unintelligible). Overall in both markets (unintelligible).

Okay. Great. And then on - thanks for that. In terms of Coke Zero, very strong performance in ’10. I was wondering if you guys could rank which markets particularly the three largest but which market - do you think GB is your most developed market for Coke Zero? And then as we think about getting added growth from that specific brand, where you think the most incremental case volume opportunity comes from either is it from market or some highlights you want to make on a channel? But obviously a key driver trying to get better understanding of the opportunity for incremental growth there.

We are very pleased with Coke Zero (unintelligible) - and we continue to expect Coke Zero to be a major worldwide (unintelligible) - for which the French market was a pilot worldwide and which has been (a success). (Unintelligible) - other question, France is the fastest growing Coke Zero market (unintelligible).

That’s great and helpful. Finally there, can you talk about the pricing architecture for that brand? Particularly I think I’m most interested in GB but Pepsi Max had a pretty good year last year in GB. I don’t know how successful they might be with Pepsi Max next year in France but or this year I should say in France. Can you talk a little bit about the type and position of Coke Zero versus the competition in those two markets?

(Unintelligible) - and this is really what has been very successful and useful for us. As you know, in GB specifically our (unintelligible)

Great. Thank you Hubert.

We take our next question today from Christine Farkas from Merrill Lynch. Your line is now open.

Thank you very much. Just some clarification if I could - Bill, maybe you could run through this. You have indicated legacy CCE grew top line by 4%. We see your volumes up 4 and the price mix up 1. Is there some negative mix in there on the top line?

I think we’re dealing with rounding at that point Christine. There is nothing that’s untoward that we saw in the quarter.

Okay. Great. Thanks for that. And with respect to SG&A, the percentage of expenses SG&A as a percentage of sales when we look at the full year 2010 I just want to make sure that going forward either pro forma or other adjustments, going forward is that a good level from which to follow your leverage changes? Is there anything structural than would change in 2011?

If you’re looking at the pro forma numbers, yes that’s a good basis. I’m not sure if that’s what you’re asking but just to comment we’ve had a lot of conversations in past calls about the corporate number. Again, the full year corporate number that we reported pro forma was 191 and we had said that’s a good benchmark for us in 2011.

Okay. Great. And then just finally, I’m curious if there are any additional comments on the carbonated soft drink market in GB. Just the competitive nature of it and when you look at the economy, how is that business holding up? And again, as the economy - should the economy improve, do you expect changes in that market?

Well, I think it’s difficult to say (unintelligible).

And Hubert, is that 1.4 billion pounds a category retail number or Coke specific?

(Unintelligible) - is a category retail number.

Great. Thank you very much.

We take our next question today from Philip Gorham from Morningstar. Your line is now open.

Thank you and good morning. Just one quick question left actually on your cost structure. Could you give us any guidance at all on what kind of proportion of your direct material costs are sourced in local markets? Thanks.

I’m going to give you a comment about (unintelligible) - the vast majority of our commodity inputs are sourced in local countries where (unintelligible) - there are a couple of exceptions. Clearly when we add an emollient treatment to the mix, they’re getting some of their input from local sterling and then their getting some of the input from euros. And then in Great Britain while most of the input are in sterling, there are some input that are euros. However, we have a pretty aggressive program in place as in when we have those underlying commodity exposures. We also hedge when we cross currency exposure. So for 2011 we feel pretty good that we hedged out any cross currency exposure with respect to the commodities. I hope that answers your question.

Yes. Great. Thanks.

Our next question today comes from Damian Witkowski from Gabelli & Company. Your line is now open.

Thanks. Just following on the - so you hedge transaction costs from a total currency perspective. You still haven’t really hedged translation. Is there a lead in? Is it just cost (unintelligible) - is in British pounds and euros and you’re reporting in US dollars. Is it just cost prohibitive?

Well, there is a cost to it obviously. I don’t know that I would use the phrase cost prohibitive. We’ve had a number of debates with ourselves and with investors and analysts to be honest and I think at some point in time given our operating revenue make up it becomes kind of inevitable are you speculating on where the currency is going at the time. And at this junction we just don’t think that’s the right strategy to approach. We’re trying to articulate to you and to all the investors what the exposure is and if a particular investor has a position they want to take there might be some people who take hedges on that. But we have not done that and at the present time don’t intend to do that from a translation perspective going forward.

Okay. And then would you be willing to share how much comms would be up if you hadn’t hedged at this point in time?

To be honest I don’t have that number at hand. We track everything on a real time basis with our current position. But clearly it would have been somewhat higher than our (unintelligible).

And are you actively hedging for next year for full ’11?

We have some hedges in place for 2012 and we have a strategy in place to hit (unintelligible) - incremental coverage.

The last question I’m driven to and you’ve talked about it more in the past and it looks like it actually turned positive in the last fourth quarter and what is the earliest we would hear from you in terms of progress on restaurants?

Yes. Let me talk on that one. (Unintelligible) - we have got a fairly significant process to go through due to the (unintelligible) - the growth opportunities, the cash flows, the strength it needs to bring - all of those are really important. And obviously at the end of the day what is really important is the potential (unintelligible) really in there would be that it sees increased shareholder value compared to our base business model, which is pretty robust to begin with. And we recognize of course that acquisitions and certainly everything else - they can be strategic. They can be opportunistic. They can be both. I’m just pretty simple - we’ve got a business that generates incredibly strong cash flow. If there are attractive acquisitions out there we’ll pursue them. And that doesn’t materialize we will seek other ways of returning cash to our shareholders. We’re really interested in increasing shareholder value and we feel we have a business that will do that very nicely.

Thank you.

We will take our next question today from Alec Patterson from RCM. Your line is now open.

Thank you. Bill quickly, M&A depreciation/amortization outlook going forward pro forma?

Can you repeat that Alec? I couldn’t quite hear it.

I’m sorry. Depreciation and amortization outlook pro forma.

It should be pretty consistent given that we’re spending at 5% through 2010 and that’s what we’re doing in 2011. So it should be pretty consistent.

Broadly in line with the CapEx spend if you look at it from a mirror perspective.

So I’m sorry - so roughly 400 million or so?

Correct.

Okay. And I’m sorry I’m circling back to this question around the cost versus pricing strategy. I just want to get the nomenclature right. I mean you’re talking about holding gross margin. You’re talking percent of sales, not simply gross profit dollar per case, correct?

Correct. Correct.

Okay. So that would imply a rising inflation then and a rise in gross profit dollar per case value.

Correct.

Okay. Thank you.

Thank you.

Our next question today comes from Dax Vlassis from Gates Capital Management. Your line is open.

Yes. My first question is a follow up to the last question about the P&A. It looked like from your financial numbers, which you have a full quarter in Norway and Sweden, that it was about $78-80 million. So that would be substantially below if it was at that run rate and you’d be in the low 300s versus 400. Did you make a mistake in saying that it was roughly in line at 400? It seems awfully high.

The numbers I have and we’ll follow up in the 375-400 range.

Okay. And then what was the volume for the full year legacy Europe?

(It was up four).

Up four for the quarter and up four for the year as well?

Yes.

Okay. And then what percentage of your - when you talk about your cost of goods sold per case, what percent of that number is commodity costs and what percent of that is sort of unhedgable commodity costs in just rough terms?

You’re asking me a question that’s hard to articulate. If you look at our total variable cost, some 85% of our total cost of goods are variable and that’s input costs including concentrate. If you’re talking about what’s unhedgable if you will in that context and we could see maybe something in the neighborhood of 15%.

What’s that? 15?

15.

15%. Okay. Thank you very much.

Okay. Operator, this will be the last question.

Thank you sir. We will take our final question from Mark Swartzberg from Stifel Nicolaus. Your line is open.

Yes. Thanks again. Hey guys. I guess Bill on the tax rate, it’s helpful that free cash flow commentary for the next six years. It sounds like the implication of all that is that - maybe it’s not the implication but the effective tax rate itself of 26-28 seems like there is no real change there. What might drive that number down, the effective tax rate down besides tax reform?

Well, clearly if you look at what we may do with our tax structure over time, tax rates and our repatriation of that into the US, but what we have modeled and what our guidance is based on is a $1 billion share repurchase program and then something of a more muted level going forward keeping it in that range. If we were to announce another significant repurchase program after the completion of the first one, we’d have to activate the analysis and update the guidance. But that’s completing the first program and then kind of maintaining it on a steady state effectively.

Got it. Okay. And finally John, Germany - can’t comment on a deal but if you’re spending more time reading about macros and just talking to Coke folks about what’s actually going on there in the marketplace, I wonder if you could speak broadly to the consumer landscape you see in that particular market, retail landscape which is markedly different structurally than your current markets and perhaps how you think Coke is performing versus private label in that particular market.

Yes. I think I should probably stay away from commenting about Germany specifically. Those questions - I think the market make up is well known and we’ve talked about it before. I don’t think there is anything that is dramatically different there. And in terms of how Coca-Cola is performing, I think that’s a question more appropriately asked of them. So I think that’s probably the best way to leave that one.

Okay. Fair enough. Thank you guys.

All right. Well thank you Mark. Thank you all actually for your questions today and for your interest. We appreciate it. It has been in 2010 an extraordinary year. We’re really proud of what we have accomplished and we believe we’re well positioned for solid growth in 2011. We look forward to sharing that progress with you as this year proceeds. I would like to remind you that we’re going to be presenting in Boca Raton, Florida to the Consumer Analyst Group of New York. We’ll be doing that on Friday, February 25th. And then in London on March 30th we’re going to be presenting to the Consumer Analyst Group of Europe. So we do appreciate your continued interest in our company. We hope you can join us either in person or on calls for these two important events. And I thank you again everyone for your time and attention and have a great day. Good-bye.

Ladies and gentlemen, this will conclude today’s conference call. Thank you for your participation. You may now disconnect.