trengthened Revenue Management Culture Drives Results

An essential element of our ability to drive sustained, long- term value in our company is our ability to consistently deliver balanced volume and revenue growth. Achieving such growth requires dedication to maximizing the value of our products at every level of our company through a consistent, synergistic approach for each channel, package, and brand.

For the past five years, we have worked diligently to achieve this goal through the development of a strong culture of revenue management and enhancement throughout our organization, and these efforts are continuing to demonstrate results. For example, in 2005 CCE’s North American operations delivered strong top line growth of approximately 4 percent, a performance that reflects the ongoing benefits of a disciplined revenue management approach tied to market-based pricing strategies and enhancing brand value through improved marketplace execution and product and package innovation.

This improvement was achieved with a combination of volume growth and pricing enhancement that demonstrates the benefit of a balanced marketplace approach. For example, pricing grew approximately 3 percent, driven by a combination of approximately two-thirds rate increases and one-third package mix improvement, achieved with a focus on higher margin brands and packages, such as energy drinks and 20-ounce bottled water, and renewed immediate consumption growth.

In 2006, our new organizational and operating structure in North America will strengthen our ability to generate consistently improving top line results. Implemented in early fall of 2005, this new structure enhances the ability of our managers to focus on the marketplace, to improve execution, and to work with our customers to balance our profit goals with theirs through our rates, package mix, and promotion activity.

This same level of dedication to brand-by-brand, channel-by-channel excellence has long been evident in our European operations as well. Although our most recent performance has been below expectations, limited by the region’s challenging business environment and by changing consumer beverage preferences, we believe we will return to balanced growth as we improve our brand and product portfolio and create greater market focus through an enhanced operating structure.