DENVER and MONTREAL, Aug. 3 /PRNewswire-FirstCall/ -- Molson Coors
Brewing Company (NYSE: TAP; TSX) today reported strong income
growth for the second quarter. Net income attributable to Molson
Coors increased 136.3 percent to $187.3 million for the second
quarter, up from $79.4 million a year ago. Underlying after-tax
income(1) increased 20.6 percent to $205.4 million, or $1.11 per
diluted share, up from $170.3 million, or $0.92 per diluted share a
year ago. Peter Swinburn, Molson Coors president and chief
executive officer, said "Our Company is off to a solid start in the
first half of this year, reflecting the benefit of our strong
brands, strategic initiatives, and cost reduction programs. In the
second quarter, we again achieved positive pricing and local
currency profit growth in each of our major markets, which helped
offset the impact of lower volume, increased input costs and
unfavorable currency movements. While we expect the balance of 2009
to present challenges in the areas of competitive price discounting
in Canada and cost inflation across our company, we are addressing
these issues by staying focused on building strong brands, reducing
costs, generating cash, and driving shareholder value." Second
Quarter Highlights Key operating and financial highlights for the
Company's fiscal second quarter ended June 28, 2009, compared to
the fiscal second quarter ended June 29, 2008, include the
following: -- Underlying after-tax income(1) increased 20.6 percent
to $205.4 million, or $1.11 per diluted share, up from $170.3
million, or $0.92 per diluted share a year ago. This earnings
performance was driven by increased beer pricing and substantial
cost reductions across the Company, which were partially offset by
continuing unfavorable currency movements, cost inflation, and
lower worldwide volume. -- Second quarter 2009 results include the
impact of unfavorable foreign currency movements, which decreased
total underlying pretax income approximately $21 million versus a
year ago. -- Excluding the impact of foreign currency, the
Company's underlying income increased approximately 30 percent in
the quarter. -- Molson Coors worldwide beer volume decreased 3.2
percent on a pro forma basis, due to poor weather in key
geographies, a weak global economy, and the Company's strategy in
the U.K. to emphasize revenue growth over low-margin volume growth.
-- Worldwide Coors Light volume grew 3 percent from a year ago. The
Company's effective tax rate during the second quarter 2009 for
income from continuing operations was 20 percent on a reported
basis, and 22 percent on an underlying basis. The Company estimates
that its full-year 2009 effective tax rate will be in the range of
10 percent to 14 percent. During the quarter, Molson Coors achieved
an incremental $32 million of cost savings as part of its
three-year, $250 million Resources for Growth (RFG) cost savings
program. Savings from the RFG program during the past 2 1/2 years
now total $229 million. These cost savings include the company's 42
percent share of RFG cost savings that were achieved by
MillerCoors, which equaled $3 million in the second quarter.
MillerCoors achieved $60 million in synergies in the second
quarter, largely due to the network optimization savings realized
from moving production of Coors brands into former Miller
breweries, continued realization of organizational savings, and
savings in marketing investment. Molson Coors' 42 percent share of
these synergies is $25 million. Year-to-date, MillerCoors has
delivered $110 million in synergies, and the Company now expects to
achieve $260 million of cumulative synergies by the end of calendar
2009, surpassing its original commitment of $225 million. While the
timing of synergy delivery has accelerated, MillerCoors' $500
million synergy goal is unchanged. Molson Coors Brewing Company's
total worldwide beer volume was 13.533 million hectoliters in the
quarter, 3.2 percent lower versus the prior year on a pro forma
basis, as shown in Table 1 below. Molson Coors Brewing Company
Table 1: 2009 Second Quarter Worldwide Beer Volume (In Millions of
Hectoliters) Thirteen Weeks Ended Thirteen Weeks Ended
----------------- ----------------- June 28, June 29, June 28, June
29, 2009 2008 % Change 2009 2008 % Change -------- --------
-------- -------- -------- -------- Actual Pro forma(1) Actual
Actual Financial Volume: 5.005 5.408 (7.5%) 5.005 13.679 (63.4%)
Royalty Volume: 0.077 0.067 14.9% 0.077 0.067 14.9% ----- -----
----- ----- Owned Volume: 5.082 5.475 (7.2%) 5.082 13.746 (63.0%)
Proportionate Share of Equity Investment Sales-to- Retail: 8.451
8.509 (0.7%) 8.451 0.099 NM ----- ----- ----- ----- Total Worldwide
Beer Volume: 13.533 13.984 (3.2%) 13.533 13.845 (2.3%) ======
====== ====== ======
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Notes: ------ NM = Not Meaningful (1) Reflects the elimination of
the U.S. segment volume reported for the 13 weeks ended June 29,
2008, and 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 second quarter results by business segment: Canada Business
Canada underlying pretax income in local currency grew 2 percent
versus a year ago as a result of positive net pricing and the
benefit of cost savings initiatives, which more than offset
inflation impacts in the quarter. On a reported basis, Canada
underlying pretax income was $137.3 million in the second quarter,
11.0 percent lower than a year ago as local currency profit growth
was offset by a 13 percent, or $18 million, year-over-year decline
in the Canadian dollar versus the U.S. dollar. Canada
sales-to-retail (STRs) decreased 0.5 percent in the second quarter
versus last year. Strategic brands increased almost 2 percent, led
by high-single-digit growth of Coors Light and solid growth by
Rickard's. Molson Canadian declined at a mid-single-digit rate
versus prior year. Canada beer industry volumes increased an
estimated 1.8 percent in the quarter. Canada sales volume was 2.4
million hectoliters, down 2.9 percent versus 2008. Comparable(2)
net sales per hectoliter increased 2.6 percent in local currency,
driven by front-line price increases in all major markets and
improved sales mix, partially offset by promotional activity across
Canada. Cost of goods sold per hectoliter increased 1.7 percent on
a comparable basis in local currency, due to a 2 percent
inflationary increase from commodities, packaging materials,
distribution, and other input costs, and a 2 percent increase from
overhead costs and ongoing product mix shifts. Savings from cost
reduction initiatives more than offset inflation and reduced cost
of goods sold per hectoliter by 3 percentage points. Comparable
marketing, general and administrative expenses decreased
approximately 1 percent in local currency, driven by lower overhead
costs. Other income increased $3.9 million due to foreign currency
gains. United States Business (MillerCoors)(3) Molson Coors
underlying U.S. segment pretax income increased 26.5 percent to
$142.7 million in the second quarter due to strong underlying
income growth by MillerCoors. U.S. segment results include the
Company's 42 percent share of second quarter 2009 net income
attributable to MillerCoors and various adjustments for the equity
income calculation under U.S. GAAP, which are then compared to the
year-earlier results reported by the legacy Coors business.
MillerCoors Operating and Financial Highlights (U.S. GAAP) For the
quarter, underlying net income attributable to MillerCoors,
excluding special items, increased by 16.4 percent to $325.3
million versus the prior year pro forma quarter. This earnings
growth was driven by strong net revenue growth, cost management and
continued synergy delivery. In a soft beer market, MillerCoors
domestic STRs were down 0.8 percent versus the prior year pro forma
quarter due to a decline in Miller Lite STRs and softness in above
premium brands, mostly offset by positive results in five of the
six focus brands. The six national focus brands increased STRs by
1.3 percent, led by Coors Light, MGD 64, and Keystone Light.
Domestic sales-to-wholesalers (STWs) declined 1.1 percent, driven
by lower STRs and a slight reduction in distributor inventories.
MillerCoors total net sales increased by 1.6 percent to $2.14
billion versus the prior pro forma quarter. Excluding contract
brewing and company-owned distributor sales, net sales increased
1.7 percent to $2.00 billion. Third-party contract brewing volumes
declined 6.5 percent, though profits were in line with the prior
year comparable quarter. Pricing remained strong in the second
quarter as domestic net sales per hectoliter, excluding contract
brewing and company-owned distributor sales, increased by 3.0
percent based on 2008 price increases. Though MillerCoors continues
to realize supply-chain-related synergies and deliver savings from
its cost leadership programs, cost of goods sold per hectoliter
increased by 5.1 percent due to significant prior year hops sales,
as well as increased brewing and packaging material costs this
year, primarily glass, aluminum and barley. For the quarter,
marketing, general and administrative costs decreased by 10.8
percent, driven primarily by synergies and other cost savings.
Depreciation and amortization expense for MillerCoors in the second
quarter was approximately $72 million, and additions to tangible
and intangible assets totaled $120 million. United Kingdom Business
The U.K. business reported underlying pretax income of $36.8
million in the second quarter, an increase of $15.3 million, or
70.1 percent, versus the same quarter last year. These results
include the impact of a 22 percent decline in the value of the
British pound versus the U.S. dollar, which reduced underlying
pretax income by approximately $10 million. In local currency, the
U.K. business underlying pretax earnings were up nearly 118
percent. This solid quarterly performance was driven by positive
results from the strategic actions our U.K. team has taken in the
past year, including supplier negotiations leveraging our contract
brewing arrangement and brand building efforts, which allowed us to
forgo low-margin volume. U.K. owned-brand volume decreased 12.4
percent during the quarter due to soft industry performance and the
Company's strategy to forgo low-margin volume. The U.K. beer
industry declined approximately 5 percent in the second quarter,
reflecting a weak economy in that market. In local currency,
comparable U.K. net sales per hectoliter of owned products
increased 19.8 percent, approximately three-quarters driven by
higher net pricing in all channels, and the balance of the increase
attributable to positive sales mix. Comparable cost of goods sold
per hectoliter of owned brands was virtually unchanged in local
currency in the second quarter, reflecting higher input cost
inflation and fixed cost de-leverage as a result of lower volumes,
offset by favorable channel mix and cost-reduction savings.
Marketing, general and administrative expense increased 10.1
percent in local currency due to higher marketing and incentive
compensation expenses in the second quarter. Global Markets
Business and Corporate The underlying pretax loss for Global
Markets and Corporate was $52.1 million, a 14.6 percent reduction
versus the second quarter of 2008. The Company's Global Markets
business grew volume more than 18 percent, on a small base, driven
by the strength of Coors Light in China and Carling in Europe.
Marketing, general and administrative expense for Global Markets
was $12.6 million in the quarter, an increase of $3.3 million
versus a year ago. Corporate general and administrative expense was
$30.6 million in the second quarter, an increase of $4.7 million,
driven by higher incentive compensation and project spending this
year. Corporate net interest expense was $22.0 million in the
second quarter, a decrease of $7.9 million compared to a year ago,
with approximately $4 million of this reduction attributable to
foreign currency movements and nearly all the balance primarily due
to BRI deconsolidation. In the quarter, Corporate other expense of
$8.9 million was driven by a one-time mark-to-market expense
related to the Foster's cash-settled total-return swap. Special and
Other One-Time Items During the second quarter 2009, the Company
reported net special charges of $7.1 million pretax, which was
composed primarily of $5.7 million of costs associated with the
Cobra brand acquisition and $1.1 million of restructuring costs in
the U.K. Other one-time items in the quarter included a $12.9
million non-cash mark-to-market expense in corporate other related
to the cash-settled total-return swap the Company arranged with
respect to Foster's common stock in 2008, as well as $1.0 million
to establish an environmental litigation reserve. During the second
quarter of 2009, MillerCoors reported special charges totaling
$20.4 million, including a charge for pension curtailment and
integration expenses. This equates to $8.6 million at Molson Coors'
42 percent economic ownership share. These special and other
one-time items have been excluded from underlying earnings in the
second quarter 2009. Discontinued Operations The Company reports
results associated with its former Brazilian unit, Cervejarias
Kaiser ("Kaiser"), as discontinued operations. In the second
quarter, gains from small reductions in liabilities were offset by
losses from foreign exchange. 2009 Second 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 second
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 also will 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 November 3, 2009. 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 second
quarter of 2009, the Company excluded one-time expenses,
particularly related to MillerCoors, the Foster's cash-settled
total-return swap, and an environmental liability reserve, as well
as net special charges of $7.1 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 deconsolidation of
Brewers Retail Inc. in Ontario on March 1, 2009, and effects of
forming MillerCoors in 2008. Comparable results also exclude the
year-over-year impact for beer sales to MillerCoors. With the
completion of the MillerCoors joint venture, the financial impact
of our brand exports to the U.S. are no longer being treated as
inter-company sales and eliminated upon consolidation of total
Molson Coors results. Sales volume for these U.S. exports is
excluded from Canada results and is now reported by MillerCoors.
(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." Historical
period results have not been reclassified to conform to this
presentation, so year-over-year comparisons of consolidated and
U.S. segment volume, net sales, cost of goods sold, and marketing,
general and administrative results are less meaningful. For
comparability, the parent companies of MillerCoors have provided a
full income statement for second quarter 2009, along with pro forma
results for the prior year period. This release also 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 5). 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 Second 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 2nd Q 2008 2nd Q ----------- ----------
U.S. GAAP: Income from continuing operations attributable to MCBC,
net of tax: 187.3 91.8 ------------------------------------- Per
diluted share: $1.01 $0.49 Add back: Pretax special items - net 7.1
103.9 Add back: Environmental litigation reserve (1) 1.0 - Add
back: Loss related to the cash- settled total return swap (1) 12.9
- Add back: Proportionate share of MillerCoors pretax special items
- net (2) 8.6 - (Minus): Tax effects related to special and other
one-time items (11.5) (25.4) Non-GAAP: Underlying after-tax income:
205.4 170.3 Per diluted share: $1.11 $0.92
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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 Second 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 ------------------------------------ ------------
Global Markets and Canada U.S. U.K. Corporate Consolidated
------------------- ------ ---- ---- ------------ ------------ U.S.
GAAP: 2009 2nd Q Income (loss) from continuing operations before
income taxes $136.4 $134.1 $30.0 $(65.4) $235.1 -------------------
Add back/(Minus): Pretax special items -net 0.9 - 6.8 (0.6) 7.1 Add
back: Environmental litigation reserve(1) - - - 1.0 1.0 Add back:
Gain related to the cash- settled total return swap (1) - - - 12.9
12.9 Add back: Proportionate share of MillerCoors pretax special
items -net (2) - 8.6 - - 8.6 Non-GAAP: 2009 2nd Q underlying pretax
income (loss) $137.3 $142.7 $36.8 $(52.1) $264.7
-------------------- ------ ------ ----- ------ ------ Percent
change 2009 2nd Q vs. 2008 2nd Q underlying pretax income (loss)
-11.0% 26.5% 70.1% -14.6% 16.3% ------------------ ----- ---- ----
----- ---- U.S. GAAP: 2008 2nd Q Income (loss) from continuing
operations before income taxes $153.9 $35.4 $18.4 $(84.0) $123.7
------------------- Add back: Pretax special items - net 0.5 77.3
3.1 23.0 103.9 Non-GAAP: 2008 2nd Q underlying pretax income (loss)
$154.4 $112.7 $21.5 $(61.0) $227.6 -------------------- ------
------ ----- ------ ------ 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 4: 2009 Second Quarter Underlying Net Income (Net Income,
Excluding Special Items) (In Millions) Three Months Ended Six
Months Ended ---------------------------
--------------------------- June 30, 2009 June 30, 2008 June 30,
2009 June 30, 2008 ------------- ------------- -------------
------------- Pro Forma Pro Forma U.S. GAAP - Net Income
attributable to MillerCoors LLC: $304.9 $174.6 $510.9 $311.2 Add
back: Special items, net 20.4 104.8 30.8 116.1 ---- ----- ----
----- Non-GAAP - Underlying net income: $325.3 $279.4 $541.7 $427.3
====== ====== ====== ====== 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 5: 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.) Thirteen Weeks Twenty-Six Weeks Ended
Ended -------------- ----------------- June 28, 2009 June 28, 2009
------------- ------------- MillerCoors Net Income $304.9 $510.9
Multiply: MCBC economic interest % in MillerCoors 42% 42% --- ---
MCBC proportionate share of MillerCoors net income $128.1 $214.6
Add: Accounting policy elections (1) - 7.3 Add: Amortization of the
difference between MCBC contributed cost basis and the underlying
equity in net assets of MillerCoors (2) 3.9 6.9 Add: Share-based
compensation adjustment (3) 2.1 2.4 --- --- Equity Income in
MillerCoors (reported) $134.1 $231.2 ====== ====== Add:
Proportionate share of MillerCoors special items (4) 8.6 12.9
(Minus): Accounting policy elections (1) - (7.3) --- ---- U.S.
Segment Underlying Pretax Income (Non-GAAP) $142.7 $236.8 ======
======
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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 $644
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 Q2 2009 Special Items
of $20.4 million, multiplied by MCBC's proportionate share of
MillerCoors at 42%, equals $8.6 million. MillerCoors first half of
2009 Special Items of $30.8 million, multiplied by MCBC's
proportionate share of MillerCoors at 42%, equals $12.9 million.
Molson Coors Brewing Company and Subsidiaries Table 6: Condensed
Consolidated Statements of Operations (In Millions, Except Per
Share Data) (Unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended
-------------------- ---------------------- June 28, June 29, June
28, June 29, 2009 2008 2009 2008 --------- --------- ---------
--------- Volume in hectoliters 5.005 13.679 8.901 24.388 =====
====== ===== ====== Sales $1,160.4 $2,359.4 $1,984.6 $4,175.6
Excise taxes (361.5) (602.0) (626.7) (1,061.6) ------ ------ ------
-------- Net Sales 798.9 1,757.4 1,357.9 3,114.0 Cost of goods sold
(432.6) (1,033.6) (778.7) (1,868.6) ------ -------- ------ --------
Gross profit 366.3 723.8 579.2 1,245.4 Marketing, general and
administrative expenses (230.0) (463.2) (412.6) (899.8) Special
items, net (7.1) (103.9) (17.3) (111.2) Equity income in
MillerCoors 134.1 - 231.2 - ----- - ----- - Operating income 263.3
156.7 380.5 234.4 Interest expense, net (1) (19.9) (27.0) (39.8)
(54.8) Debt extinguishment costs - - - (12.4) Other expense, net
(8.3) (6.0) (26.8) (1.4) ---- ---- ----- ---- Income from
continuing operations before income taxes 235.1 123.7 313.9 165.8
Income tax expense (47.3) (26.5) (46.0) (19.9) ----- ----- -----
----- Income from continuing operations 187.8 97.2 267.9 145.9 Loss
from discontinued operations, net of tax - (12.4) (3.9) (21.4) -
----- ---- ----- Net income 187.8 84.8 264.0 124.5 Less: Net income
attributable to noncontrolling interests (2) (0.5) (5.4) (1.0)
(10.8) ---- ---- ---- ----- Net income attributable to MCBC $187.3
$79.4 $263.0 $113.7 ====== ===== ====== ====== Basic income (loss)
per share: From continuing operations attributable to MCBC $1.02
$0.50 $1.45 $0.75 From discontinued operations attributable to MCBC
- (0.07) (0.02) (0.12) ----- ----- ----- ----- Basic net income per
share $1.02 $0.43 $1.43 $0.63 ===== ===== ===== ===== Diluted
income (loss) per share: From continuing operations attributable to
MCBC $1.01 $0.49 $1.44 $0.73 From discontinued operations
attributable to MCBC - (0.07) (0.02) (0.12) ---- ----- ----- -----
Diluted net income per share $1.01 $0.42 $1.42 $0.61 ===== =====
===== ===== Weighted average shares - basic 184.2 182.4 184.0 181.7
Weighted average shares - diluted 185.4 186.0 185.2 185.0 Dividends
per share $0.24 $0.20 $0.44 $0.36 ===== ===== ===== ===== Amount
attributable to MCBC Income from continuing operations, net of tax
$187.3 $91.8 $266.9 $135.1 Loss from discontinued operations, net
of tax - (12.4) (3.9) (21.4) ---- ----- ---- ----- Net income
attributable to MCBC $187.3 $79.4 $263.0 $113.7 ====== ===== ======
======
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Notes: ------ (1) On December 29, 2008, we adopted Financial
Accounting Standards Board Staff Position Accounting Principles
Board 14-1, "Accounting for Convertible Debt Instruments That May
Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)" ("FSP APB 14-1"). This FSP APB 14-1 clarifies that
convertible debt instruments that may be settled in cash upon
conversion, including partial cash settlement, should separately
account for the liability and equity components in a manner that
will reflect the entity's nonconvertible debt borrowing rate when
interest cost is recognized in subsequent periods. Upon adopting
FSP APB 14-1, the provisions were retroactively applied. As a
result, $3.9 million and $7.8 million of additional non-cash
interest expense was recorded in the second quarter and first half
of 2008, respectively. During the second quarter and first half of
2009, we recorded $4.1 million and $8.1 million of additional
non-cash interest expense, respectively. (2) On December 29, 2008,
MCBC adopted Statement of Financial Accounting Standards No. 160,
"Noncontrolling Interests in Consolidated Financial Statements - an
amendment of ARB No. 51," 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 7:
Canada Segment Results of Operations (In Millions) (Unaudited)
Thirteen Weeks Ended Twenty-Six Weeks Ended --------------------
---------------------- June 28, June 29, June 28, June 29, 2009
2008 2009 2008 --------- --------- -------- --------- Volume in
hectoliters 2.402 2.475 4.165 4.242 ===== ===== ===== ===== Sales
$614.3 $695.5 $1,036.1 $1,195.3 Excise taxes (143.3) (162.9)
(240.4) (279.1) ------ ------ ------ ------ Net sales 471.0 532.6
795.7 916.2 Cost of goods sold (231.1) (258.5) (418.5) (474.7)
------ ------ ------ ------ Gross profit 239.9 274.1 377.2 441.5
Marketing, general and administrative expenses (103.8) (117.1)
(187.3) (223.7) Special items, net (0.9) (0.5) (9.0) (1.9) ----
---- ---- ---- Operating income 135.2 156.5 180.9 215.9 Other
income (expense), net 1.2 (2.6) 5.5 0.7 --- ---- --- --- Earnings
before income taxes $136.4 $153.9 $186.4 $216.6 ====== ======
====== ====== Molson Coors Brewing Company and Subsidiaries Table
8: United States Segment Results of Operations (In Millions)
(Unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended
-------------------- ---------------------- June 28, June 29, June
28, June 29, 2009(1) 2008 2009(1) 2008 --------- ---------
--------- -------- Volume in hectoliters - 8.271 - 14.779 === =====
=== ====== Sales $- $970.3 $- $1,721.7 Excise taxes - (128.5) -
(229.9) --- ------ --- ------ Net sales - 841.8 - 1,491.8 Cost of
goods sold - (514.4) - (907.3) --- ------ --- ------ Gross profit -
327.4 - 584.5 Marketing, general and administrative expenses -
(214.6) - (412.2) Special items, net - (77.3) - (69.3) Equity
income in MillerCoors 134.1 - 231.2 - ----- ---- ----- ----
Operating income 134.1 35.5 231.2 103.0 Other (expense) income, net
- (0.1) - 2.3 --- ---- --- --- Earnings before income taxes $134.1
$35.4 $231.2 $105.3 ====== ===== ====== ======
-------------------------------------------------------------------------
Notes: ------ (1)Reflects the formation of MillerCoors on July 1,
2008. Prior periods reflect results of the Company's pre-existing
U.S. operations. Molson Coors Brewing Company and Subsidiaries
Table 9: United Kingdom Segment Results of Operations (In Millions)
(Unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended
-------------------- ---------------------- June 28, June 29, June
28, June 29, 2009 2008 2009 2008 -------- --------- ---------
-------- Volume in hectoliters 2.475 2.824 4.496 5.170 ===== =====
===== ===== Sales $526.1 $676.1 $912.4 $1,227.4 Excise taxes
(216.4) (309.0) (383.3) (549.8) ------ ------ ------ ------ Net
sales 309.7 367.1 529.1 677.6 Cost of goods sold (191.5) (251.6)
(341.4) (470.6) ------ ------ ------ ------ Gross profit 118.2
115.5 187.7 207.0 Marketing, general and administrative expenses
(82.9) (96.4) (149.9) (191.5) Special items, net (6.8) (3.1) (7.7)
(5.2) ---- ---- ---- ---- Operating income 28.5 16.0 30.1 10.3
Interest income, net 2.1 2.9 4.1 5.7 Other expense, net (0.6) (0.5)
(1.6) (1.7) ---- ---- ---- ---- Earnings before income taxes $30.0
$18.4 $32.6 $14.3 ===== ===== ===== ===== Molson Coors Brewing
Company and Subsidiaries Table 10: Global Markets and Corporate
Results of Operations (In Millions) (Unaudited) Thirteen Weeks
Ended Twenty-Six Weeks Ended --------------------
---------------------- June 28, June 29, June 28, June 29, 2009
2008 2009 2008 -------- --------- -------- --------- Volume in
hectoliters 0.128 0.109 0.240 0.197 ===== ===== ===== ===== Sales
$20.0 $17.6 $36.1 $31.3 Excise taxes (1.8) (1.7) (3.0) (2.9) ----
---- ---- ---- Net sales 18.2 15.9 33.1 28.4 Cost of goods sold
(10.0) (9.1) (18.8) (16.0) ----- ---- ----- ----- Gross profit 8.2
6.8 14.3 12.4 Marketing, general and administrative expenses (43.3)
(35.1) (75.4) (72.4) Special items, net 0.6 (23.0) (0.6) (34.8) ---
----- ---- ----- Operating loss (34.5) (51.3) (61.7) (94.8)
Interest expense, net (22.0) (29.9) (43.9) (60.5) Debt
extinguishment costs - - - (12.4) Other expense, net (8.9) (2.8)
(30.7) (2.7) ---- ---- ----- ---- Loss before income taxes $(65.4)
$(84.0) $(136.3) $(170.4) ====== ====== ======= ======= MillerCoors
LLC (1) Table 11: Results of Operations (In Millions) (Unaudited)
Three Months Ended Six Months Ended --------------------
-------------------- June 30, June 30, June 30, June 30, 2009 2008
2009 2008 --------- --------- --------- --------- Actual Pro Forma
Actual Pro Forma Volume in hectoliters 22.938 23.326 41.360 42.117
====== ====== ====== ====== Sales $2,499.4 $2,469.7 $4,505.1
$4,416.8 Excise taxes (362.7) (365.7) (652.5) (660.4) ------ ------
------ ------ Net sales 2,136.7 2,104.0 3,852.6 3,756.4 Cost of
goods sold (1,302.3) (1,259.8) (2,352.2) (2,276.8) --------
-------- -------- -------- Gross profit 834.4 844.2 1,500.4 1,479.6
Marketing, general and administrative expenses (500.6) (561.2)
(942.4) (1,047.1) Special items, net (20.4) (104.8) (30.8) (116.1)
----- ------ ----- ------ Operating income 313.4 178.2 527.2 316.4
Other (expense) income, net (0.2) 2.2 (0.7) 4.8 ---- --- ---- ---
Income from continuing operations before income taxes 313.2 180.4
526.5 321.2 Income tax expense (2.5) - (4.6) - ---- --- ---- ---
Income from continuing operations 310.7 180.4 521.9 321.2 Less: Net
income attributable to noncontrolling interests (5.8) (5.8) (11.0)
(10.0) ---- ---- ----- ----- Net income attributable to MillerCoors
LLC $304.9 $174.6 $510.9 $311.2 ====== ====== ====== ======
--------------------------------------------------------------------------
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. Molson Coors Brewing Company
and Subsidiaries Table 12: Condensed Consolidated Balance Sheets
(In Millions) (Unaudited) As of ---------------------------------
June 28, 2009 December 28, 2008 ------------- -----------------
Assets Cash and cash equivalents $296.2 $216.2 Receivables, net
732.2 635.4 Inventories, net 234.4 192.1 Other, net 70.5 63.4 ----
---- Total current assets 1,333.3 1,107.1 Properties, net 1,242.3
1,301.9 Goodwill and intangibles, net 5,618.2 5,221.4 Investment in
MillerCoors 2,557.9 2,418.7 Other 294.5 337.5 ----- ----- Total
assets $11,046.2 $10,386.6 ========= ========= Liabilities and
equity Accounts payable $156.7 $170.5 Accrued expenses and other
941.7 815.5 Short-term borrowings and current portion of long-term
debt 0.1 0.1 --- --- Total current liabilities 1,098.5 986.1
Long-term debt 1,628.6 1,752.0 Pension and post-retirement benefits
492.8 581.0 Other 1,132.0 1,028.1 ------- ------- Total liabilities
4,351.9 4,347.2 Total MCBC stockholders' equity 6,680.1 6,055.4
Noncontrolling interests 14.2 (16.0) ---- ----- Total equity
6,694.3 6,039.4 ------- ------- Total liabilities and equity
$11,046.2 $10,386.6 ========= ========= Molson Coors Brewing
Company and Subsidiaries Table 13: Condensed Consolidated
Statements of Cash Flows (In Millions) (Unaudited) Twenty-six Weeks
Ended ---------------------------- June 28, 2009 June 29, 2008
------------- ------------- Cash flows from operating activities:
Net income $264.0 $124.5 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 88.8 167.2 Equity income in MillerCoors (231.2) -
Distributions from MillerCoors 250.3 - Change in working capital
and other, net (19.4) (131.1) ----- ------ Net cash provided by
operating activities 352.5 160.6 Cash flows from investing
activities: Additions to properties and intangible assets (45.2)
(136.4) Proceeds from sales of assets and businesses, net 2.6 33.5
Acquisition of businesses (19.6) - Investment in MillerCoors, net
(119.3) - Other, net (28.8) 8.6 ----- --- Net cash used in
investing activities (210.3) (94.3) Cash flows from financing
activities: Exercise of stock options under equity compensation
plans 13.4 45.9 Dividends paid (81.4) (65.5) Net repayments of debt
(0.3) (147.6) Other 6.3 9.3 --- --- Net cash used in financing
activities (62.0) (157.9) Cash and cash equivalents: Net increase
(decrease) in cash and cash equivalents 80.2 (91.6) Effect of
foreign exchange rate changes on cash and cash equivalents (0.2)
(1.0) Balance at beginning of year 216.2 377.0 ----- ----- Balance
at end of period $296.2 $284.4 ====== ====== DATASOURCE: Molson
Coors Brewing Company CONTACT: News Media, Colin Wheeler,
+1-303-927-2443, or Investor Relations, Dave Dunnewald,
+1-303-927-2334, or Leah Ramsey, +1-303-927-2397, all of Molson
Coors Brewing Company Web Site: http://www.coors.com/
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