DENVER and MONTREAL, Nov. 4 /PRNewswire-FirstCall/ -- Molson Coors
Brewing Company (NYSE: TAP; TSX) today reported double-digit income
growth for the third quarter. Net income attributable to Molson
Coors increased 37.4 percent to $235.3 million for the third
quarter, up from $171.3 million a year ago. Underlying after-tax
income(1) increased 22.7 percent to $212.9 million, or $1.14 per
diluted share, up from $173.5 million, or $0.93 per diluted share,
a year ago. Peter Swinburn, Molson Coors president and chief
executive officer, said, "Molson Coors had a successful third
quarter, with underlying earnings up more than 22 percent versus a
year ago. This headline profit includes some non-operating and
one-time noise, both positive and negative. The positive resolution
of tax positions in the quarter was partially offset by currency
headwinds, a mark-to-market hedge loss this year, and the challenge
of cycling supplier negotiation benefits last year. Excluding these
factors, earnings grew approximately 13 percent in the quarter.
These trading results reflect a high level of brand investment,
coupled with cost control and price management. Our results also
reflect weak industry volume trends, continued cost inflation
across our businesses, and more promotional pricing activity in
Canada. In terms of our portfolio performance, total-company volume
in the third quarter declined, and worldwide Coors Light volumes
were down slightly against a strong growth quarter a year ago." "We
remain focused on building a diverse portfolio of extraordinary
brands, offering value-enhancing innovations for consumers, and
achieving positive pricing to grow our top-line and bottom-line as
the economy improves. We offer value to consumers in many forms,
including innovative brands and promotional packaging, as well as
category-leading advertising, retail promotions and service to our
customers. In the fourth quarter, incremental investments related
to these efforts will be most significant in our Canada, U.S. and
international businesses. These investments are consistent with our
brand-led global strategies, and we expect them to drive top-line
and bottom-line growth as we move into 2010." Third Quarter
Highlights Key operating and financial highlights for the Company's
fiscal third quarter ended September 26, 2009, compared to the
fiscal third quarter ended September 28, 2008, include the
following: -- Net income attributable to Molson Coors increased
37.4 percent to $235.3 million for the third quarter, up from
$171.3 million a year ago, driven by a lower effective tax rate, a
one-time gain on the Company's total-return swap, and lower net
special charges, as well as strong cost control and price
management across the company. -- Underlying after-tax income(1)
increased 22.7 percent to $212.9 million, or $1.14 per diluted
share, up from $173.5 million, or $0.93 per diluted share a year
ago. This earnings performance was driven by a lower effective tax
rate and strong earnings growth from MillerCoors and our U.K.
business, which were partially offset by cost inflation, lower
worldwide volume, and unfavorable currency movements. -- Third
quarter 2009 results include the impact of unfavorable foreign
currency movements, which decreased total underlying pretax income
approximately $13 million versus a year ago. -- Molson Coors
worldwide beer volume decreased 2.9 percent, driven by challenging
markets, a weak global economy, and the Company's continued
strategy in the U.K. to emphasize revenue growth over low-margin
volume growth. The Company's effective tax rate during the third
quarter 2009 for income from continuing operations was 9 percent on
a reported basis and 4 percent on an underlying basis. The Company
estimates that its full-year 2009 underlying effective tax rate
will be in the range of negative 2 percent to positive 2 percent.
These tax rates are significantly lower than the Company's
anticipated long-term tax rate range of 22 percent to 26 percent
due to the favorable resolution of unrecognized tax positions
during 2009. During the quarter, Molson Coors achieved an
incremental $18 million of cost savings as part of its three-year,
$250 million Resources for Growth (RFG) cost savings program.
Savings from the RFG program now total $246 million. MillerCoors
achieved $73 million in synergies in the third quarter, largely due
to marketing synergies, as well as organizational savings resulting
from the elimination of duplicate and transitional positions in the
third quarter 2008. Molson Coors' 42 percent share of these
synergies is $31 million. Network optimization savings continue to
be realized from shifting production of Coors and Miller brands
into the larger MillerCoors brewery network, a process which will
continue for the next nine months. MillerCoors continues to
integrate business processes and systems across the enterprise to
deliver enhanced customer solutions and better leverage the scale
of the business. MillerCoors has delivered $183 million in
synergies this year, bringing the total to $211 million since
beginning operations on July 1, 2008. The Company now expects to
achieve $270 million of cumulative synergies by the end of 2009,
surpassing its original commitment of $225 million. As previously
communicated, MillerCoors will deliver incremental cost savings
above the $500 million synergy target, and approximately $200
million in cost savings are expected to be delivered by the end of
2012, approximately in-line with current market expectations. These
cost savings include efficiencies in production costs, procurement,
and marketing, general and administrative expense. Molson Coors
Brewing Company's total worldwide beer volume was 13.8 million
hectoliters in the quarter, 2.9 percent lower versus the prior
year, as shown in Table 1 below. Molson Coors Brewing Company Table
1: 2009 Third Quarter Worldwide Beer Volume (In Millions of
Hectoliters) Thirteen Weeks Ended
-------------------------------------- September 26, 2009 September
28, 2008 % Change -------------------------------------- --------
Actual Actual Financial Volume: 5.181 5.480 (5.5%) Royalty Volume:
0.076 0.078 (2.6%) -------------------------------------- Owned
Volume: 5.257 5.558 (5.4%) Proportionate Share of Equity Investment
Sales-to-Retail(1): 8.542 8.658 (1.3%)
-------------------------------------- Total Worldwide Beer Volume:
13.799 14.216 (2.9%) ====================================== Notes:
(1) Reflects the addition of Molson Coors Brewing Company's
proportionate share of MillerCoors and Modelo Molson
sales-to-retail for the periods presented, adjusted for comparable
trading days, if applicable. Business Segments Following are the
Company's 2009 third quarter results by business segment: Canada
Business Canada underlying pretax income in local currency declined
2 percent versus a year ago. Positive net pricing and the benefit
of cost savings initiatives were offset by declines in volume and
higher marketing, general and administrative expenses, driven by
increased brand investment and the deconsolidation of our interest
in the Beer Stores in Ontario (Brewers Retail Inc.). On a reported
basis, Canada underlying pretax income was $139.3 million in the
third quarter, 7.7 percent lower than a year ago, as the Canadian
Dollar declined versus the U.S. Dollar approximately 6 percent, or
$9 million, in the quarter. Canada sales-to-retail (STRs) decreased
3.2 percent in the third quarter versus last year. Coors Light
continued to show growth, while Molson Canadian and Molson Export
declined versus prior year. Canada beer industry volumes decreased
an estimated 0.7 percent in the quarter. Canada sales volume was
2.5 million hectoliters, down 1.8 percent from a year ago.
Comparable(2) net sales per hectoliter increased 2 percent in local
currency, driven by favorable net pricing, led by price increases
across all major markets, partially offset by continued price
discounting activity. Cost of goods sold per hectoliter increased
slightly on a comparable basis in local currency. An increase in
commodity, packaging material, distribution and other input costs,
including pension expense, as well as fixed cost deleverage related
to lower export volume to the U.S., were offset by savings from our
Resources for Growth initiatives. Comparable marketing, general and
administrative expenses increased 4.4 percent in local currency,
driven by higher brand and innovation investments. United States
Business (MillerCoors)(3) Molson Coors underlying U.S. segment
pretax income grew 16.6 percent to $107.4 million in the third
quarter due to strong underlying income growth by MillerCoors.
Strong MillerCoors income growth was partially offset by cycling
high equity income last year and one day of income for the legacy
Coors business prior to the formation of MillerCoors on July 1,
2008. MillerCoors Operating and Financial Highlights (U.S. GAAP)
For the quarter, underlying net income attributable to MillerCoors,
excluding special items, increased 28.1 percent to $244.4 million
versus the prior-year comparable quarter. MillerCoors is
successfully delivering synergies, controlling costs, and managing
revenue for sustainable profit growth, despite continuing commodity
cost pressures. MillerCoors domestic sales-to-retailers (STRs) were
down 1.3 percent due to a slight decline in premium light volumes
and continued softness in above premium and premium brands.
Domestic sales-to-wholesalers (STWs) fell 0.7 percent primarily
driven by lower retail sales. MillerCoors total net revenue
increased 3.1 percent to $2.01 billion versus the prior-year
comparable quarter, driven by domestic net pricing. Excluding
contract brewing and company-owned distributor sales, net sales
revenue increased 3.0 percent to $1.87 billion. Third-party
contract brewing volumes declined 4.6 percent, though profits were
up slightly from the prior-year comparable quarter. Pricing
remained strong in the third quarter, as domestic net revenue per
barrel, excluding contract brewing and company-owned distributor
sales, increased 3.7 percent, driven by sustained price increases
taken in the fall of 2008 and reductions in discount activity. Cost
of goods sold per barrel increased 3.5 percent as benefits from
MillerCoors cost leadership programs were more than offset by
brewing and packaging material cost increases under procurement
contracts largely arranged prior to more recent commodity market
price reductions. Marketing, general and administrative costs
decreased 4.5 percent, driven primarily by lower organizational
costs and synergies, which were partially offset by IT
integration-related expenses. Depreciation and amortization
expenses for MillerCoors in the third quarter were $72.9 million
and additions to tangible and intangible assets totaled $79.5
million. United Kingdom Business U.K. underlying pretax earnings in
local currency increased more than 20 percent versus a year ago.
This increase was driven by positive results from the strategic
actions our U.K. team has taken in the past year, including
leveraging our contract brewing arrangement and brand building
efforts, allowing us to forgo low-margin volume. The benefit of
these actions was partially offset by the one-time impact of a
mark-to-market adjustment on natural gas hedges and cycling a
one-time supplier negotiation benefit of $6 million in 2008,
combined with lower volume and higher marketing, general and
administration expenses in the quarter. On a reported basis, third
quarter U.K. underlying pretax income was $32.7 million, an
increase of $2.0 million, or 6.5 percent, versus the same quarter
last year. These results include the impact of a 13 percent
devaluation of the British Pound versus the U.S. Dollar, which
reduced U.K. earnings by $5 million in the quarter. U.K.
owned-brand volume decreased 6.3 percent during the quarter due to
declining industry volume and the Company's strategy to forgo
low-margin volume. The U.K. beer industry volume declined
approximately 1 percent in the third quarter. Comparable net sales
per hectoliter of owned products increased 21 percent in local
currency, driven by two factors. Higher pricing in all channels and
positive sales mix drove 17 percent and 4 percent of the increase,
respectively. Comparable cost of goods sold per hectoliter of owned
brands increased 22 percent in local currency in the third quarter,
driven by cycling the one-time supplier negotiation benefit in
2008, input cost inflation, adverse brand and channel mix, a
mark-to-market adjustment on natural gas hedges, and the
deleveraging impact of lower owned-brand volumes. Marketing,
general and administrative expense increased 7.8 percent in local
currency due to higher marketing, incentive compensation, and bad
debt expenses in the quarter, along with sales-related costs in our
new Cobra business. International Markets and Corporate The
underlying pretax loss for International Markets and Corporate was
$57.5 million, a 7.1 percent increase versus the third quarter of
2008. The Company's International Markets business grew volume
nearly 28 percent, on a small base, driven by the strength of Coors
Light in China and Carling in Europe. Marketing, general and
administrative expense for International Markets was $12.7 million
in the quarter, an increase of $1.1 million versus a year ago.
Corporate general and administrative expense was $28.1 million in
the third quarter, an increase of $7.7 million, driven by higher
incentive compensation, project spending, and labor-related costs
this year. Corporate net interest expense was $24.7 million in the
third quarter, a decrease of $3.7 million compared to a year ago,
with approximately $2.7 million of this reduction attributable to
the deconsolidation of BRI and the balance due to foreign currency
movements. In the quarter, Corporate other income of $58.2 million
was driven by a one-time mark-to-market gain related to the
Foster's cash-settled total-return swap. Special and Other One-Time
Items During the third quarter 2009, the Company reported net
special charges of $4.3 million pretax, which was composed
primarily of $3.5 million of non-cash expenses associated with
closing the Edmonton Brewery. Other one-time items in the quarter
included a $59.3 million non-cash mark-to-market gain in Corporate
other income related to the cash-settled total-return swap the
Company arranged with respect to Foster's common stock in 2008.
During the third quarter of 2009, MillerCoors reported special
charges totaling $14.7 million, which include pension curtailment
and integration expenses. This equates to $6.2 million at Molson
Coors' 42 percent economic ownership share. The foregoing special
and other one-time items have been excluded from underlying
earnings in the third quarter 2009. The company's underlying
results were reduced by other non-operating or unusual factors,
including unfavorable year-over-year currency movements, a
mark-to-market hedge loss this year and supplier negotiation
benefits last year in the U.K. These headwinds totaled $22.3
million pretax in the 3rd quarter. Meanwhile, results in the
quarter benefited from the favorable resolution of some
unrecognized tax positions, which increased $36.4 million from a
year ago. Discontinued Operations The Company reports results
associated with its former Brazilian unit, Cervejarias Kaiser
("Kaiser"), as discontinued operations. The Company reported a loss
of $9.0 million from discontinued operations during the quarter due
to legal expenses and losses from foreign exchange, which were
partially offset by reductions in liabilities. 2009 Third Quarter
Earnings Conference Call Molson Coors Brewing Company will conduct
an earnings conference call with financial analysts and investors
at 11:00 a.m. Eastern Time today to discuss the Company's 2009
third quarter results. The Company will provide a live webcast of
the earnings call. Approximately two hours after the conclusion of
the earnings call, the Company will also host an online, real-time
webcast of an Investor Relations Follow-up Session with financial
analysts at 2:00 p.m. Eastern Time. Both webcasts will be
accessible via the Company's website, http://www.molsoncoors.com/.
Online replays of the webcasts will be available until 11:59 p.m.
Eastern Time on February 9, 2010. The Company will also post this
release and related financial statements on its website today.
Footnotes: (1) The Company calculates non-GAAP underlying income by
excluding special and other one-time items from the nearest U.S.
GAAP earnings measure. To calculate underlying income in the third
quarter of 2009, the Company excluded one-time items, particularly
related to MillerCoors, and the Foster's cash-settled total-return
swap, as well as net special charges of $4.3 million pretax. For
further details, please see the section "Special and Other One-Time
Items", along with tables for reconciliations to the nearest U.S.
GAAP measures. All $ amounts are in U.S. Dollars. (2) Except where
otherwise indicated, comparable Canada results exclude the sales
and costs related to exporting beer to MillerCoors, as well as the
reporting effects of the deconsolidation of Brewers Retail Inc.
(BRI) in Ontario on March 1, 2009. (3) MillerCoors, a U.S. joint
venture of Molson Coors Brewing Company and SABMiller plc, was
launched on July 1, 2008. Molson Coors has a 42 percent economic
interest in MillerCoors, which is accounted for using the equity
method. Molson Coors' interest in MillerCoors results, along with
certain adjustments under U.S. GAAP, are reflected in "Equity
Income in MillerCoors." This release includes reconciliation from
MillerCoors Net Income to Molson Coors Brewing Company Equity
Income in MillerCoors and Non-GAAP U.S. Segment Underlying Pretax
Income (see Table 6). Forward-Looking Statements This press release
includes "forward-looking statements" within the meaning of the
federal securities laws, and language indicating trends, such as
"trend improvements," "progress," "anticipated," "expected,"
"improving sales trends" and "on track." It also includes financial
information, of which, as of the date of this press release, the
Company's independent auditors have not completed their review.
Although the Company believes that the assumptions upon which the
financial information and its forward-looking statements are based
are reasonable, it can give no assurance that these assumptions
will prove to be correct. Important factors that could cause actual
results to differ materially from the Company's projections and
expectations are disclosed in the Company's filings with the
Securities and Exchange Commission. These factors include, among
others, changes in consumer preferences and product trends; price
discounting by major competitors; failure to realize the
anticipated cost savings and other benefits from MillerCoors;
failure to realize anticipated results from synergy initiatives;
and increases in costs generally. All forward-looking statements in
this press release are expressly qualified by such cautionary
statements and by reference to the underlying assumptions. We do
not undertake to update forward-looking statements, whether as a
result of new information, future events or otherwise.
Reconciliations to Nearest U.S. GAAP Measures Molson Coors Brewing
Company Table 2: 2009 Third Quarter Underlying After-Tax Income
(After-Tax Income From Continuing Operations, Excluding Special and
Other One-time Items) (In Millions of $US, Except Per Share Data)
(Note: Some numbers may not sum due to rounding.) 2009 3rd Q 2008
3rd Q ---------- ---------- U.S. GAAP: Income from continuing
operations attributable to MCBC, net of tax: 244.3 168.1 Per
diluted share: $1.31 $0.90 Add back: Pretax special items - net 4.3
24.8 Add back: Environmental litigation reserve (1) - 3.6 Add back:
Proportionate share of MillerCoors pretax special items - net (2)
6.2 9.5 (Less): Impact of MillerCoors accounting policy elections
(2) - (27.9) (Less): Gain related to the cash-settled total return
swap (1) (59.3) (13.6) Add back: Tax effects related to special and
other one-time items 17.4 9.0 Non-GAAP: Underlying after-tax
income: 212.9 173.5 Per diluted share: $1.14 $0.93 Notes: (1)
Included in Other Income (Expense) (2) Included in Equity Income in
MillerCoors, but excluded from non-GAAP underlying pretax income.
Molson Coors Brewing Company Table 3: 2009 Third Quarter Underlying
After-Tax Income, Net of Adjustments(1) (In Millions of $US) (Note:
Some numbers may not sum due to rounding.) Non-GAAP: Underlying
after-tax income - 3rd Q 2009: $212.9 Adjustments - 3rd Q 2009
versus 3rd Q 2008: Currency movements, mark-to-market hedge loss
16.3 Supplier renegotiation benefits in prior year 6.0 Tax effects
related to hedge loss and supplier renegotiation benefits (2.7)
Benefit of resolution of unrecognized tax positions (36.4) -------
Non-GAAP: Underlying after-tax income - 3rd Q 2009, net of
adjustments(1): $196.1 Non-GAAP: Underlying after tax income - 3rd
Q 2008: $173.5 Year-over-year percent change: 13% Notes: (1)
Adjusted for year-over-year variances in other non-operating or
unusual factors. Molson Coors Brewing Company Table 4: 2009 Third
Quarter Underlying Pretax Income (Pretax Income From Continuing
Operations, Excluding Special and Other One-time Items) (In
Millions of $US) (Note: Some numbers may not sum due to rounding.)
Business Total ----------------------------------------
------------ MCI and Canada U.S. U.K. Corporate Consolidated
---------------------------------------- ------------ U.S. GAAP:
2009 3rd Q Income (loss) from continuing operations before income
taxes $135.7 $101.2 $32.4 $1.4 $270.7 Add back: Pretax special
items - net 3.8 - 0.2 0.3 4.3 Add back: Proportionate share of
MillerCoors pretax special items - net (2) - 6.2 - - 6.2 (Less):
Gain related to the cash-settled total return swap (1) - - - (59.3)
(59.3) Non-GAAP: 2009 3rd Q underlying pretax income (loss) $139.3
$107.4 $32.7 $(57.5) $221.9
---------------------------------------- ------------ Percent
change 2009 3rd Q vs. 2008 3rd Q underlying pretax income (loss)
-7.7% 16.6% 6.5% 7.1% 0.8% ----------------------------------------
------------ U.S. GAAP: 2008 3rd Q Income (loss) from continuing
operations before income taxes $148.0 $110.5 $30.5 $(65.3) $223.7
Add back: Pretax special items - net 3.0 - 0.2 21.6 24.8 Add back:
Environmental litigation reserve (1) - - - 3.6 3.6 Add back:
Proportionate share of MillerCoors pretax special items - net (2) -
9.5 - - 9.5 (Less): Impact of MillerCoors accounting policy
elections (2) - (27.9) - - (27.9) (Less): Gain related to the
cash-settled total return swap (1) - - - (13.6) (13.6) Non-GAAP:
2008 3rd Q underlying pretax income (loss) $151.0 $92.1 $30.7
$(53.7) $220.1 ----------------------------------------
------------ Notes: (1) Included in Other Income (Expense) (2)
Included in Equity Income in MillerCoors, but excluded from
non-GAAP underlying pretax income. MillerCoors LLC Table 5: 2009
Third Quarter Underlying Net Income (Net Income, Excluding Special
Items) (In Millions) Three Months Ended Nine Months Ended
--------------------------- --------------------------- September
30, September 30, September 30, September 30, 2009 2008 2009 2008
--------------------------- --------------------------- Pro Forma
U.S. GAAP - Net Income attributable to MillerCoors LLC: $229.7
$168.2 $740.6 $479.4 Add back: Special items, net 14.7 22.6 45.5
138.7 --------------------------- ---------------------------
Non-GAAP - Underlying net income: $244.4 $190.8 $786.1 $618.1
=========================== =========================== Pretax and
after-tax underlying income should be viewed as a supplement to --
not a substitute for -- our results of operations presented on the
basis of accounting principles generally accepted in the United
States. We believe that underlying income performance is used by
and is useful to investors and other users of our financial
statements in evaluating our operating performance because it
provides them with an additional tool to evaluate our performance
without regard to items such as special items, which can vary
substantially from company to company depending upon accounting
methods and book value of assets and capital structure. Our
management uses underlying income as a measure of operating
performance to assist in comparing performance from period to
period on a consistent basis; as a measure for planning and
forecasting overall expectations and for evaluating actual results
against such expectations; and in communications with the board of
directors, stockholders, analysts and investors concerning our
financial performance. Molson Coors Brewing Company Table 6:
Reconciliation of Net Income Attributable to MillerCoors to MCBC's
Equity Income in MillerCoors and Reconciliation to U.S. Segment
Underlying Pretax Income (In Millions) (Note: Some numbers may not
sum due to rounding.) Three Three Months Ended Months Ended
------------------------------- September 30, September 30, 2009
2008 ------------------------------- MillerCoors Net Income $229.7
$168.2 Multiply: MCBC economic interest % in MillerCoors 42% 42%
------------------------------- MCBC proportionate share of
MillerCoors net income $96.5 $70.6 Add: Accounting policy elections
(1) - 31.8 Add: Amortization of the difference between MCBC
contributed cost basis and the underlying equity in net assets of
MillerCoors (2) 2.4 6.0 Add: Share-based compensation adjustment
(3) 2.3 (1.9) ------------------------------- Equity Income in
MillerCoors (reported) $101.2 $106.5
=============================== Add: U.S. Segment pretax income for
June 30, 2008 - 4.0 Add: Proportionate share of MillerCoors special
items (4) 6.2 9.5 Add: MillerCoors variable share-based
compensation (5) - 3.9 (Minus): Accounting policy elections (1) -
(31.8) ------------------------------- U.S. Segment Underlying
Pretax Income (Non-GAAP) $107.4 $92.1
=============================== Notes: (1) MillerCoors made its
initial accounting policy elections upon formation, impacting
certain asset and liability balances. These adjustments reflect the
impact to our investment in MillerCoors, which is based upon our
contributed assets and liabilities. (2) MCBC's net investment in
MillerCoors is based on the carrying values of the net assets it
contributed to the joint venture. MCBC's investment basis in
MillerCoors is less than our underlying equity (42%) in the total
net assets of MillerCoors (contributed by both Coors and Miller) by
approximately $633.4 million. This amount is being amortized over a
period of time represented primarily by the remaining useful lives
of long-lived assets giving rise to the difference. For
non-depreciable assets, such as goodwill, no adjustment will be
recorded to the MillerCoors equity method income unless there is an
impairment. (3) The net adjustment is to record all stock-based
compensation associated with preexisting equity awards to be
settled in MCBC Class B common stock held by former CBC employees
now employed by MillerCoors and eliminate all stock-based
compensation impacts related to preexisting SABMiller equity awards
held by Miller employees now employed by MillerCoors. The
adjustment is to recognize the additional 58% of the stock-based
compensation costs associated with those awards recognized and
reported by MCBC's U.S. business and eliminate all of the costs
associated with equity awards to be settled in SABMiller equity.
(4) MillerCoors Q3 2009 Special Items of $14.7 million, multiplied
by MCBC's proportionate share of MillerCoors at 42%, equals $6.2
million. MillerCoors Q3 2008 Special Items of $22.6 million,
multiplied by MCBC's proportionate share of MillerCoors at 42%,
equals $9.5 million. (5) Included in Equity Income in MillerCoors.
This adjustment represents the fair value mark to market component
of MCBC share-based compensation held by employees of MillerCoors.
Molson Coors Brewing Company and Subsidiaries Table 7: Condensed
Consolidated Statements of Operations (In Millions, Except Per
Share Data) (Unaudited) Thirteen Weeks Ended Thirty-Nine Weeks
Ended --------------------------- ---------------------------
September 26, September 28, September 26, September 28, 2009 2008
2009 2008 --------------------------- ---------------------------
Volume in hectoliters 5.181 5.480 14.082 29.868
=========================== =========================== Sales
$1,250.3 $1,373.8 $3,234.9 $5,549.5 Excise taxes (396.6) (452.7)
(1,023.3) (1,514.3) ---------------------------
--------------------------- Net Sales 853.7 921.1 2,211.6 4,035.2
Cost of goods sold (472.6) (524.4) (1,251.3) (2,392.9)
--------------------------- --------------------------- Gross
profit 381.1 396.7 960.3 1,642.3 Marketing, general and
administrative expenses (240.7) (236.8) (653.3) (1,136.6) Special
items, net (4.3) (24.8) (21.6) (136.1) Equity income in MillerCoors
101.2 106.5 332.4 106.5 ---------------------------
--------------------------- Operating income 237.3 241.6 617.8
476.1 Interest expense, net (1) (22.5) (25.6) (62.3) (80.4) Debt
extinguishment costs - - - (12.4) Other income, net 55.9 7.7 29.1
6.4 --------------------------- --------------------------- Income
from continuing operations before income taxes 270.7 223.7 584.6
389.7 Income tax expense (25.3) (54.9) (71.3) (74.9)
--------------------------- --------------------------- Income from
continuing operations 245.4 168.8 513.3 314.8 (Loss) income from
discontinued operations, net of tax (9.0) 3.2 (12.9) (18.1)
--------------------------- --------------------------- Net income
236.4 172.0 500.4 296.7 Less: Net income attributable to
noncontrolling interests (2) (1.1) (0.7) (2.1) (11.6)
--------------------------- --------------------------- Net income
attributable to MCBC $235.3 $171.3 $498.3 $285.1
=========================== =========================== Basic
income (loss) per share: From continuing operations attributable to
MCBC $1.32 $0.91 $2.78 $1.66 From discontinued operations
attributable to MCBC (0.05) 0.02 (0.07) (0.10) Basic net income per
share $1.27 $0.93 $2.71 $1.56 Diluted income (loss) per share: From
continuing operations attributable to MCBC $1.31 $0.90 $2.75 $1.63
From discontinued operations attributable to MCBC (0.05) 0.02
(0.07) (0.10) ---------------------------
--------------------------- Diluted net income per share $1.26
$0.92 $2.68 $1.53 ===========================
=========================== Weighted average shares - basic 184.6
183.5 184.2 182.3 Weighted average shares - diluted 186.2 185.7
185.6 185.5 Dividends per share $0.24 $0.20 $0.68 $0.56
=========================== =========================== Amount
attributable to MCBC Income from continuing operations, net of tax
$244.3 $168.1 $511.2 $303.2 (Loss) income from discontinued
operations, net of tax (9.0) 3.2 (12.9) (18.1)
--------------------------- --------------------------- Net income
attributable to MCBC $235.3 $171.3 $498.3 $285.1
=========================== =========================== Notes: (1)
On December 29, 2008, we adopted guidance regarding accounting for
convertible debt instruments that may be settled in cash upon
conversion (including partial cash settlement) that applies to all
convertible debt instruments that have a "net settlement feature",
which means that such convertible debt instruments, by their terms,
may be settled either wholly or partially in cash upon conversion.
This guidance requires issuers of convertible debt instruments that
may be settled wholly or partially in cash upon conversion to
separately account for the liability and equity components in a
manner reflective of the issuers' nonconvertible debt borrowing
rate. The provisions of this guidance were retroactively applied.
As a result, $4.0 million and $11.8 million of additional non-cash
interest expense was recorded in the third quarter and first
thirty- nine weeks of 2008, respectively. During the third quarter
and first thirty-nine weeks of 2009, we recorded $4.1 million and
$12.2 million of additional non-cash interest expense,
respectively. (2) On December 29, 2008, MCBC adopted guidance
regarding accounting for noncontrolling interests in consolidated
financial statements, the provisions of which, among others,
require that minority interests be renamed noncontrolling interests
and that consolidated net income (loss) includes the amounts
attributable to such noncontrolling interests for all periods
presented. Molson Coors Brewing Company and Subsidiaries Table 8:
Canada Segment Results of Operations (In Millions) (Unaudited)
Thirteen Weeks Ended Thirty-Nine Weeks Ended
--------------------------- --------------------------- September
26, September 28, September 26, September 28, 2009 2008 2009
2008(1) --------------------------- ---------------------------
Volume in hectoliters 2.477 2.522 6.642 7.548
=========================== =========================== Sales
$653.4 $706.9 $1,689.5 $1,957.8 Excise taxes (159.6) (165.2)
(400.0) (444.2) ---------------------------
--------------------------- Net sales 493.8 541.7 1,289.5 1,513.6
Cost of goods sold (239.7) (278.5) (658.2) (808.8)
--------------------------- --------------------------- Gross
profit 254.1 263.2 631.3 704.8 Marketing, general and
administrative expenses (113.4) (110.9) (300.7) (334.7) Special
items, net (3.8) (3.0) (12.8) (4.9) ---------------------------
--------------------------- Operating income 136.9 149.3 317.8
365.2 Other (expense) income, net (1.2) (1.3) 4.3 (0.5)
--------------------------- --------------------------- Earnings
before income taxes $135.7 $148.0 $322.1 $364.7
=========================== =========================== Notes: (1)
As a result of the MillerCoors formation on July 1, 2008, and
MCBC's prospective equity accounting for MillerCoors, sales shown
above for the thirteen weeks ended September 28, 2008, present
MCBC's former U.S. segment net sales for a single day of June 30,
2008, and our proportional share of net income for the period July
1, 2008, through September 28, 2008. Sales shown for the
thirty-nine weeks ended September 28, 2008, represent MCBC's former
U.S. segment net sales for the twenty-six weeks ended June 29,
2008, plus net sales for a single day of June 30, 2008, and our
proportional share of net income for the period July 1, 2008,
through September 28, 2008. Molson Coors Brewing Company and
Subsidiaries Table 9: United States Segment Results of Operations
(1) (In Millions) (Unaudited) Thirteen Weeks Ended Thirty-Nine
Weeks Ended --------------------------- ---------------------------
September 26, September 28, September 26, September 28, 2009 2008
2009 2008 --------------------------- ---------------------------
Volume in hectoliters - 0.115 - 14.894 ===========================
=========================== Sales $- $14.7 $- $1,736.4 Excise taxes
- (1.8) - (231.6) ---------------------------
--------------------------- Net sales - 12.9 - 1,504.8 Cost of
goods sold - (7.7) - (915.1) ---------------------------
--------------------------- Gross profit - 5.2 - 589.7 Marketing,
general and administrative expenses - (1.2) - (413.3) Special
items, net - - - (69.3) Equity income in MillerCoors 101.2 106.5
332.4 106.5 --------------------------- ---------------------------
Operating income 101.2 110.5 332.4 213.6 Other income, net - - -
2.3 Earnings before income taxes $101.2 $110.5 $332.4 $215.9
=========================== =========================== Notes: (1)
Reflects the formation of MillerCoors on July 1, 2008, and the
Company's pre-existing U.S. operations prior to July 1, 2008.
Molson Coors Brewing Company and Subsidiaries Table 10: United
Kingdom Segment Results of Operations (In Millions) (Unaudited)
Thirteen Weeks Ended Thirty-Nine Weeks Ended
--------------------------- --------------------------- September
26, September 28, September 26, September 28, 2009 2008 2009 2008
--------------------------- --------------------------- Volume in
hectoliters 2.552 2.724 7.048 7.894 ===========================
=========================== Sales $573.5 $632.4 $1,485.9 $1,859.8
Excise taxes (235.0) (283.6) (618.3) (833.5)
--------------------------- --------------------------- Net sales
338.5 348.8 867.6 1,026.3 Cost of goods sold (220.5) (227.9)
(561.9) (698.4) ---------------------------
--------------------------- Gross profit 118.0 120.9 305.7 327.9
Marketing, general and administrative expenses (86.5) (92.8)
(236.4) (284.1) Special items, net (0.2) (0.2) (7.9) (5.4)
--------------------------- --------------------------- Operating
income 31.3 27.9 61.4 38.4 Interest income, net 2.2 2.8 6.3 8.5
Other expense, net (1.1) (0.2) (2.7) (2.0)
--------------------------- --------------------------- Earnings
before income taxes $32.4 $30.5 $65.0 $44.9
=========================== =========================== Molson
Coors Brewing Company and Subsidiaries Table 11: Molson Coors
International and Corporate Results of Operations (In Millions)
(Unaudited) Thirteen Weeks Ended Thirty-Nine Weeks Ended
--------------------------- --------------------------- September
26, September 28, September 26, September 28, 2009 2008 2009 2008
--------------------------- --------------------------- Volume in
hectoliters 0.152 0.119 0.392 0.316 ===========================
=========================== Sales $23.4 $19.8 $59.5 $51.1 Excise
taxes (2.0) (2.1) (5.0) (5.0) ---------------------------
--------------------------- Net sales 21.4 17.7 54.5 46.1 Cost of
goods sold (12.4) (10.3) (31.2) (26.2) ---------------------------
--------------------------- Gross profit 9.0 7.4 23.3 19.9
Marketing, general and administrative expenses (40.8) (31.9)
(116.2) (104.5) Special items, net (0.3) (21.6) (0.9) (56.5)
--------------------------- --------------------------- Operating
loss (32.1) (46.1) (93.8) (141.1) Interest expense, net (24.7)
(28.4) (68.6) (88.9) Debt extinguishment costs - - - (12.4) Other
income, net 58.2 9.2 27.5 6.6 ---------------------------
--------------------------- Income (loss) before income taxes $1.4
$(65.3) $(134.9) $(235.8) ===========================
=========================== MillerCoors LLC (1) Table 12: Results
of Operations (In Millions) (Unaudited) Three Months Ended Nine
Months Ended ---------------------------
--------------------------- September 30, September 30, September
30, September 30, 2009 2008 2009 2008 ---------------------------
--------------------------- Pro Actual Actual Actual Forma (2)
Volume in hectoliters 21.640 21.881 63.000 63.998
=========================== =========================== Sales
$2,350.7 $2,293.4 $6,855.8 $6,710.2 Excise taxes (341.2) (343.7)
(993.7) (1,004.1) ---------------------------
--------------------------- Net sales 2,009.5 1,949.7 5,862.1
5,706.1 Cost of goods sold (1,266.6) (1,236.9) (3,618.8) (3,513.7)
--------------------------- --------------------------- Gross
profit 742.9 712.8 2,243.3 2,192.4 Marketing, general and
administrative expenses (496.0) (519.1) (1,438.4) (1,566.2) Special
items, net (14.7) (22.6) (45.5) (138.7) ---------------------------
--------------------------- Operating income 232.2 171.1 759.4
487.5 Other income, net 2.3 2.3 1.6 7.1 ---------------------------
--------------------------- Income from continuing operations
before income taxes 234.5 173.4 761.0 494.6 Income tax expense
(2.3) (1.9) (6.9) (1.9) ---------------------------
--------------------------- Income from continuing operations 232.2
171.5 754.1 492.7 Less: Net income attributable to noncontrolling
interests (2.5) (3.3) (13.5) (13.3) ---------------------------
--------------------------- Net income attributable to MillerCoors
LLC $229.7 $168.2 $740.6 $479.4 ===========================
=========================== Notes: (1) Economic ownership of
MillerCoors LLC is 58% held by SABMiller and 42% held by Molson
Coors. See Table 5 in the release for a reconciliation from
MillerCoors net income to Molson Coors equity income in
MillerCoors. (2) The pro forma financial information has been
derived from the historical financial results of the respective
U.S. businesses of Molson Coors Brewing Company and SABMiller,
giving effect to the MillerCoors transaction and other related
adjustments. These pro forma results are not necessarily indicative
of the results of operations that would have been achieved had the
MillerCoors transaction taken place at the beginning of the pro
forma period, and do not purport to be indicative of future
operating results. Molson Coors Brewing Company and Subsidiaries
Table 13: Condensed Consolidated Balance Sheets (In Millions)
(Unaudited) As of ------------------------------- September 26,
December 28, 2009 2008 ------------- ------------ Assets Cash and
cash equivalents $565.1 $216.2 Receivables, net 661.8 635.4
Inventories, net 223.7 192.1 Other, net 57.2 63.4 -------------
------------ Total current assets 1,507.8 1,107.1 Properties, net
1,251.8 1,301.9 Goodwill and intangibles, net 5,813.7 5,221.4
Investment in MillerCoors 2,588.1 2,418.7 Other 329.8 337.5
------------- ------------ Total assets $11,491.2 $10,386.6
============= ============ Liabilities and equity Accounts payable
$185.4 $170.5 Accrued expenses and other 912.4 815.5 Current
portion of long-term debt and short-term borrowings 300.1 0.1 Total
current liabilities 1,397.9 986.1 Long-term debt 1,376.6 1,752.0
Pension and post-retirement benefits 489.9 581.0 Other 1,192.7
1,028.1 ------------- ------------ Total liabilities 4,457.1
4,347.2 Total MCBC stockholders' equity 7,018.7 6,055.4
Noncontrolling interests 15.4 (16.0) ------------- ------------
Total equity 7,034.1 6,039.4 ------------- ------------ Total
liabilities and equity $11,491.2 $10,386.6 =============
============ Molson Coors Brewing Company and Subsidiaries Table
14: Condensed Consolidated Statements of Cash Flows (In Millions)
(Unaudited) Thirty-Nine Weeks Ended -------------------------------
September 26, September 28, 2009 2008 ------------- -------------
Cash flows from operating activities: Net income $500.4 $296.7
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 135.3 224.4
Equity income in MillerCoors (332.4) (106.5) Distributions from
MillerCoors 351.5 58.8 Change in working capital and other, net
12.0 (77.8) ------------- ------------- Net cash provided by
operating activities 666.8 395.6 Cash flows from investing
activities: Additions to properties and intangible assets (71.7)
(176.5) Proceeds from sales of assets and businesses, net 3.9 35.7
Acquisition of businesses (19.6) - Investment in MillerCoors, net
(109.2) (78.8) Other, net (29.9) 4.6 ------------- -------------
Net cash used in investing activities (226.5) (215.0) Cash flows
from financing activities: Exercise of stock options under equity
compensation plans 25.5 51.6 Dividends paid to Molson Coors Brewing
Company stockholders (125.8) (102.2) Net repayments of debt (0.4)
(163.2) Other 9.1 (6.2) ------------- ------------- Net cash used
in financing activities (91.6) (220.0) Cash and cash equivalents:
Net increase (decrease) in cash and cash equivalents 348.7 (39.4)
Effect of foreign exchange rate changes on cash and cash
equivalents 0.2 (3.1) Balance at beginning of year 216.2 377.0
------------- ------------- Balance at end of period $565.1 $334.5
============= ============= DATASOURCE: Molson Coors Brewing
Company CONTACT: Media, Colin Wheeler, +1-303-927-2443, or
Investors, Dave Dunnewald, +1-303-927-2334, or Leah Ramsey,
+1-303-927-2397, all of Molson Coors Brewing Company Web Site:
http://www.molsoncoors.com/
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