DBRS Rates CCE A, R-1(L) Conf Coca-Cola Ent (Cda) A, R-1(L)

Dominion Bond Rating Service (“DBRS”) has today assigned ratings to Coca-Cola Enterprises Inc. (“CCE” or the “Company”) as indicated above, with Stable trends, reflecting the continuing benefits of its relationship with The Coca-Cola Company (“Coke”). DBRS has also confirmed the ratings for Coca-Cola Enterprises (Canada) Bottling Finance Limited.

CCE’s earnings profile was under increased pressure in 2004 and Q1 2005 as a result of declining volumes and margins. Well-established brands (strong market positions) and innovative product development drive sales. However, the mature and highly competitive nature of the North American and European carbonated soft drinks (CSD) market combined with health and wellness trends have made achieving volume growth a challenge. CCE also experienced a sharp increase in cost of sales, which it was not able to completely offset with price increases.

These two factors have caused significant downward pressure on cash flow, and the Company will be challenged to overcome these in order to grow cash flow going forward. With lower free cash flow, the rate of debt reduction has slowed to a pace that is modestly lower than expected, but has been still sufficient to keep credit metrics stable to this point.

The Company continued to use its free cash flow for debt reduction, which has been a priority over acquisitions and share repurchases since 2002. CCE should continue to focus on using free cash flow to reduce absolute debt levels going forward, as it is not expected to undertake any major acquisitions or make significant share repurchases in the near future.

As Coke’s largest bottler, CCE maintains a relatively stable base earnings profile that has been driven by the strength of the brands in its markets, good economies of scale, and a well-established distribution system. The strong “Coke” brand equity is reflected by it holding five of the top ten CSD brands in the U.S. Sales continue to be driven by new product development, and investment in marketing. CCE’s exclusive right to manufacture, sell, and distribute Coke beverages in most of North America (the world’s largest market), Great Britain, France, the Netherlands, and Belgium remains a key factor underpinning the rating. CCE’s bottling and distribution of Coke products represents approximately 21% of Coke’s global beverages volume. As well, Coke owns approximately 36% of CCE’s common stock. Thus, while Coke does not guarantee CCE’s debt, the bottler network is critical to Coke’s success, and it is unlikely that any of the key bottlers would be permitted to fail. Nevertheless, there is a limit to how far CCE’s results can deteriorate without pressuring its rating relative to Coke’s AA (low)/R-1 (middle) ratings. Any further unexpected weakness could pressure the present “A” rating.