DENVER and MONTREAL, May 5 /PRNewswire-FirstCall/ -- Molson Coors
Brewing Company (NYSE: TAP; TSX) today reported higher income for
the first quarter ending March 29, 2009. Peter Swinburn, Molson
Coors president and chief executive officer, said "In the first
quarter, our strong brands, strategic initiatives, cost reductions
and lower incentive compensation drove 75 percent profit growth for
our company. We also achieved positive pricing and local-currency
profit growth in each of our major markets. These positive factors
more than offset continuing commodity inflation, unfavorable
currency movements, a higher tax rate, and lower volume,
particularly in the U.K. We are pleased with the bottom-line
momentum we have achieved leading into the peak summer selling
season, but we nonetheless remain cautious about the rest of the
year due to uncertainty around currency exchange rates and beer
market volume trends, plus continuing commodity price inflation."
First Quarter Highlights(1) Key operating and financial highlights
for the Company's fiscal first quarter ended March 29, 2009,
compared to the fiscal first quarter ended March 30, 2008, include
the following: -- Molson Coors worldwide beer volume declined 2.7
percent on a pro forma basis. -- Worldwide Coors Light volume grew
more than 4 percent from a year ago. -- Net income attributable to
Molson Coors increased $41.4 million, or 120.6 percent, to $75.7
million for the first quarter. -- Underlying after-tax income(2)
increased 75.3 percent to $98.8 million, or $0.53 per diluted
share, up from $56.4 million, or $0.31 per diluted share a year
ago. This strong earnings performance was driven by increased beer
pricing and substantial cost reductions across the company, which
more than offset continuing commodity inflation, unfavorable
currency movements, and lower worldwide volume. -- In the first
quarter, foreign currency movements decreased total underlying
pretax income $9 million. -- Excluding the impact of foreign
currency, the Company's underlying income increased approximately
89.4 percent in the quarter. (1) First quarter 2009 results reflect
the Company's adoption of new accounting standards for convertible
debt (FSP APB14) and "Non-controlling Interests in Financial
Statements" (FAS160), as well as the adoption of hectoliters as its
standard global volume measure. Prior period results presented have
been adjusted to reflect these changes. (2) 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 first quarter of 2009, the Company
excluded one-time expenses, particularly related to MillerCoors and
the Foster's cash-settled total-return swap, as well as net special
charges of $10.2 million pretax. For further details, please see
the section "Special and Other One-Time Items" below, along with
tables for reconciliations to the nearest U.S. GAAP measures. All $
amounts are in U.S. Dollars. The Company's effective tax rate
during the first quarter 2009 for income from continuing operations
was negative 2 percent on a reported basis, and positive 8 percent
on an underlying basis. These rates are lower than the Company's
expected annual rate for 2009 because of the favorable resolution
of unrecognized tax positions in the quarter. The Company estimates
that its full-year 2009 effective tax rate will be in the range of
16 percent to 20 percent on an underlying basis. 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. These cost savings include the
company's 42 percent share of RFG cost savings initiatives that
were achieved by MillerCoors, which equaled $3 million in the first
quarter. MillerCoors further accelerated synergy delivery timing,
realizing $50 million in the first quarter which captures some
savings originally planned for delivery in the second quarter. A
total of $78 million in synergy savings has been realized since
July 1, 2008, exceeding the company's original goal of $50 million
for the first 12 months of operations. The company now expects to
realize $128 million of synergies by June 30, 2009. By the end of
calendar year 2009, MillerCoors expects to achieve a total of $238
million in synergies, surpassing its original forecast 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 10.516 million
hectoliters in the quarter, 2.7 percent lower versus the prior year
on a pro forma basis, as shown in Table 1 below. Table 1: Molson
Coors 2009 First Quarter Worldwide Beer Volume Thirteen Weeks Ended
Thirteen Weeks Ended -------------------- --------------------
March 29, March 28, % March 29, March 28, % 2009 2008 Change 2009
2008 Change -------------------------- ---------------------------
Actual Pro Actual Actual forma (1) Volume in U.S. hectoliters
(000): Financial volume 3,895 4,201 (7.3%) 3,895 10,710 (63.6%)
Royalty volume 51 53 (3.8%) 51 53 (3.8%) --------------------
------------------- Owned volume 3,946 4,254 (7.2%) 3,946 10,763
(63.3%) Proportionate share of equity investment sales-to-retail
(2) 6,570 6,549 0.3% 6,570 45 N/M --------------------
------------------- Total Molson Coors worldwide beer volume 10,516
10,803 (2.7%) 10,516 10,808 (2.7%) ====================
=================== (1) Reflects the reduction of the U.S. segment
financial volume reported for the 13 weeks ended March 29, 2009.
(2) Reflects the addition of Molson Coors Brewing Company's
proportionate share of MillerCoors sales-to-retail for the periods
presented, adjusted for comparable trading days. N/M = Not
meaningful Business Segments Following are the Company's 2009 first
quarter results by business segment: Canada Business The Canada
business reported underlying pretax income of $58.1 million in the
first quarter, a 9.4 percent decrease from the same period last
year, as gains in the base business were more than offset by
unfavorable foreign exchange. The year-over-year depreciation of
the Canadian dollar versus the U.S. dollar was 20 percent, which
reduced the Canada segment underlying income by approximately $12
million. In local currency, Canada underlying pretax income was
more than 13 percent higher than the first quarter 2008. Canada
sales-to-retail (STR) decreased 3.2 percent in the first quarter
versus last year, resulting in a market-share decrease of about
three-quarters of a share point. Strategic brand changes were led
by double-digit growth of Coors Light and mid-single-digit growth
by Carling, offset by the decline of partner imports, Molson
Canadian and non-strategic brands. This deceleration versus first
quarter 2008 was driven by soft industry volumes and the Company's
decision to limit participation in off-premise discounting in a
number of provinces during the quarter. Canada beer industry
volumes declined an estimated 1.2 percent in the quarter. Canada
sales volume was 1.8 million hectoliters, virtually unchanged
versus 2008. Comparable(3) net sales per hectoliter increased 2.0
percent in local currency, led by price increases across all major
markets, partially offset by continued discounting activity. Cost
of goods sold per hectoliter increased 2.4 percent on a comparable
basis in local currency, primarily due to a 2.5 percent
inflationary increase in commodities, packaging materials and
distribution. About a third of these inflationary increases were
offset by savings from cost reduction initiatives. Additional cost
increase drivers include a 1 percent increase in overhead expenses
and ongoing sales mix shifts. Comparable marketing, general and
administrative expenses decreased 5.7 percent in local currency,
driven by lower overhead expense and cycling higher long-term
incentive compensation costs in the prior year. Other income
increased due to $2.7 million of pretax gains from foreign currency
hedges. (3) 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 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 are excluded from Canada results and are now reported
by MillerCoors. United States Business (MillerCoors)(4) Molson
Coors underlying U.S. segment pretax income increased 52.3 percent
to $94.2 million in the first quarter due to strong underlying
income growth by MillerCoors. U.S. segment results include the
Company's 42 percent share of net income attributable to
MillerCoors and various adjustments for the equity income
calculation under U.S. GAAP, as shown in Table 5 below. MillerCoors
Operating and Financial Highlights (U.S. GAAP) For the first
quarter, underlying net income attributable to MillerCoors,
excluding special items, increased 46.3 percent to $216.4 million
from the prior year pro forma result, driven by accelerated synergy
delivery, strong revenue growth, disciplined cost management, and
phasing of marketing expenditure, despite continuing commodity cost
pressures. MillerCoors domestic STRs increased 0.4 percent versus
the prior year pro forma quarter due to strong results from five of
the six focus brands, offset primarily by declines in Miller Lite
and Milwaukee's Best. -- Coors Light STRs were up low single digits
-- Miller Lite STRs decreased mid-single digits, a reduced
year-over-year rate of decline versus the previous quarter -- The
continued acceleration of MGD 64 led to volume growth in the Miller
Genuine Draft franchise (up mid-single digits) for the first time
in a decade -- The craft and import portfolio rose in the first
quarter, as Blue Moon continued to perform well with STRs up high
single digits -- Keystone Light delivered a strong double-digit
increase in STRs -- Miller High Life growth accelerated to
mid-single digits Domestic sales-to-wholesalers (STWs) declined 1
percent versus prior year, while total STWs declined 2 percent,
driven by a double-digit reduction in contract brewing volumes.
MillerCoors total net sales increased by 3.8 percent to $1.716
billion versus the prior pro forma quarter. Excluding contract
brewing and company-owned distributor sales, net sales increased
4.5 percent to $1.609 billion. Third-party contract brewing volumes
declined 10 percent, though profits from contract brewing increased
slightly. Pricing remained strong in the first quarter as domestic
net sales per hectoliter, excluding contract brewing and
company-owned distributor sales, increased 5.6 percent based on
2008 price increases (in the first and fourth quarters) and
reductions in discounting. Pricing growth was lower than the
previous quarter due to cycling of early 2008 general price
increases. Though MillerCoors continues to realize supply chain
related synergies and deliver savings from its cost leadership
programs - Resources For Growth and Project Unicorn - Cost of Goods
Sold (COGS) per hectoliter increased by 5.3 percent due to
significant increases in brewing and packaging materials related to
high commodity costs last year. For the quarter, marketing, general
and administrative costs decreased by 9.1 percent driven by timing
and management of marketing and sales spending and the accelerated
timing of synergy delivery. Depreciation and amortization expense
for MillerCoors in the first quarter was approximately $71 million,
and additions to tangible and intangible assets totaled $97
million. (4) 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 Investment 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 first 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 Investment Income in MillerCoors (see Table
5) and Non-GAAP U.S. Segment Underlying Pretax Income (see Table
4). United Kingdom Business The U.K. business reported underlying
pretax income of $3.5 million in the first quarter, an improvement
of $5.5 million versus the same quarter last year. A 28 percent
decline in the value of the British pound versus the U.S. dollar
reduced underlying pretax income by approximately $2 million. This
represents the company's best first quarter U.K. profit performance
in five years, driven by strong pricing growth, the ramp-up of its
contract brewing arrangement, and reduced marketing and pension
costs, partly offset by lower volumes and higher input cost
inflation. U.K. owned-brand volume decreased 13.8 percent during
the quarter, while the beer industry declined 8 percent, reflecting
a weak economy in the U.K. The Company under-performed the market,
as it took a firm stance with customers on pricing. In local
currency, comparable U.K. net sales per hectoliter of owned
products increased 11.6 percent, nearly three-quarters driven by
higher net pricing in all channels, with the balance of the
increase attributable to positive sales mix. Comparable cost of
goods sold per hectoliter for owned brands increased 5.2 percent in
local currency in the first quarter, due primarily to higher input
cost inflation, partly offset by results of cost-reduction
initiatives and lower pension costs. Marketing, general and
administrative expense decreased 2.7 percent in local currency due
to lower pensions and marketing expenses in the first quarter.
Global Markets Business and Corporate The Company's Global Markets
business grew volume nearly 26 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 $11 million in the quarter, an increase of $2.8 million versus
a year ago. Corporate general and administrative expense was $21.1
million in the first quarter, a decrease of $7.8 million, driven by
lower employee incentive compensation this year. Corporate net
interest expense was $21.9 million in the first quarter, a decrease
of $8.7 million compared to a year ago, with about $5 million of
this reduction attributable to foreign currency movements and the
balance due to BRI deconsolidation. In the quarter, Corporate other
expense of $21.9 million was driven by a one-time mark-to-market
expense related to the Foster's cash-settled total-return swap. The
underlying pretax loss for Global Markets and Corporate was $48.4
million, a 22.1 percent decrease versus the first quarter of 2008.
Special and Other One-Time Items During the first quarter 2009, the
Company reported net special charges of $10.2 million pretax, which
was composed primarily of Canada severance and pension curtailment
charges of $7.5 million and Edmonton Brewery closure costs of $0.7
million, as well as U.K. restructuring costs of $0.9 million.
Corporate other expense in the quarter included a $21.4 million
one-time, non-cash mark-to-market expense related to the
cash-settled total-return swap the Company arranged with respect to
Foster's common stock in 2008. During the first quarter of 2009,
MillerCoors reported special or exceptional items totaling $10.4
million, including employee retention and relocation expenses. This
equates to $4.4 million at Molson Coors' 42 percent ownership
share. These special and other one-time items have been excluded
from underlying earnings in the first quarter 2009. Discontinued
Operations The Company reports results associated with its former
Brazilian unit, Cervejarias Kaiser ("Kaiser"), as discontinued
operations. The Company reported a loss of $3.9 million from
discontinued operations during the quarter primarily due to the
impact of foreign exchange movements on the Kaiser indemnity
estimates. 2009 First 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 first 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 August 2, 2009. The
company will also post this release and related financial
statements on its web site today. Reconciliations to Nearest U.S.
GAAP Measures Molson Coors Brewing Company Table 2: 2009 First
Quarter Underlying After-Tax Income (After-Tax Income From
Continuing Operations, Excluding Special and Other One-time Items)
(Note: Some numbers may not sum due to rounding.) (In millions of
$US, except per share data) 2009 1st Q 2008 1st Q ----------
---------- U.S. GAAP: After-tax ---------- income from continuing
operations attributed to MCBC: 79.6 43.3 Per diluted share: $0.43
$0.24 Add back: Pretax special items - net 10.2 7.3 Add back:
Pretax debt extinguishment costs - 12.4 Add back: Pretax loss
related to the cash-settled total return swap (1) 21.4 - Add back:
Proportionate share of MillerCoors pretax special items - net (2)
4.4 - Minus: Pretax impact of MillerCoors accounting policy
elections (2) (7.3) - Minus: Tax effects related to special and
other one-time items (9.5) (6.6) Non-GAAP: Underlying after-tax
income: 98.8 56.4 --------- Per diluted share: $0.53 $0.31 Notes:
------ (1) Included in Other Income (Expense), net (2) Included in
Equity Income in MillerCoors, but excluded from non-GAAP underlying
pretax income. Molson Coors Brewing Company Table 3: 2009 First
Quarter Underlying Pretax Income (Pretax Income From Continuing
Operations, Excluding Special and Other One-time Items) (Note: Some
numbers may not sum due to rounding.) (In millions of $US) Business
Segments Total ----------------------------------------------------
Global Markets and Canada U.S. U.K. Corporate Consolidated
---------------------------------------------------- U.S. GAAP:
2009 1st Q pretax income (loss) from continuing operations -
reported $50.0 $97.1 $2.6 $(70.9) $78.8 Add back: Special items -
net 8.1 - 0.9 1.2 10.2 Add back: Loss related to the cash-settled
total return swap (1) - - - 21.4 21.4 Add back: Proportionate share
of MillerCoors pretax special items - net (2) - 4.4 - - 4.4 Minus:
Impact of MillerCoors accounting policy elections (2) - (7.3) - -
(7.3) Non-GAAP: 2009 1st Q underlying pretax income (loss) $58.1
$94.2 $3.5 $(48.4) $107.5
------------------------------------------------- Percent change
2009 1st Q vs. 2008 1st Q underlying pretax income (loss) -9.4%
52.3% 279.7% -22.1% 73.6%
------------------------------------------------- U.S. GAAP: 2008
1st Q pretax income (loss) from continuing operations $62.7 $69.9
$(4.1) $(86.4) $42.1 Add back: Special items - net 1.4 (8.0) 2.1
11.8 7.3 Add back: Debt extinguishment costs - - - 12.4 12.4
Non-GAAP: 2008 1st Q underlying pretax income (loss) $64.1 $61.9
$(2.0) $(62.1) $61.9
------------------------------------------------- Notes: ------ (1)
Included in Other Income (Expense), net (2) Included in Equity
Income in MillerCoors, but excluded from non-GAAP underlying pretax
income. MillerCoors LLC Table 4: 2009 First Quarter Underlying Net
Income (Net Income, Excluding Special Items) Three Months Ended
------------------------------- March 31, 2009 March 31, 2008
--------------- -------------- (In millions of $US) Pro Forma U.S.
GAAP - Net Income attributable to MillerCoors LLC: $206.0 $136.6
Add back: Special items, net 10.4 11.3 ---------------
-------------- Non-GAAP - Underlying net income: $216.4 $147.9
=============== ============== 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. 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. 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 (Note: Some numbers may not sum due to
rounding.) Thirteen Weeks Ended -------------------- March 29, 2009
(In millions of $US) -------------------- Net Income attributable
to MillerCoors $206.0 Multiply: MCBC economic interest % in
MillerCoors 42% -------------------- MCBC proportionate share of
MillerCoors net income $86.5 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) 3.0 Add: Share-based compensation adjustment (3) 0.3
-------------------- Equity Income in MillerCoors (reported) $97.1
==================== Add: Proportionate share of MillerCoors
special items (4) 4.4 (Minus): Accounting policy elections (1)
(7.3) -------------------- U.S. Segment Underlying Pretax Income
(Non-GAAP) $94.2 (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. These adjustments were concluded in the first quarter
of 2009. (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 $648.1
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 Q1 2009 Special Items
of $10.4 million, multiplied by MCBC's proportionate share of
MillerCoors at 42%, equals $4.4 million. Molson Coors Brewing
Company Table 6: Condensed Consolidated Statements of Operations
(In Millions, Except Per Share Data) (Unaudited) Thirteen Weeks
Ended Thirteen Weeks Ended --------------------
-------------------- March 29, 2009 March 30, 2008
-------------------- -------------------- Volume in hectoliters
3.895 10.710 ==================== ==================== Sales $824.2
$1,816.2 Excise taxes (265.2) (459.6) --------------------
-------------------- Net Sales 559.0 1,356.6 Cost of goods sold
(346.1) (835.0) -------------------- -------------------- Gross
profit 212.9 521.6 Marketing, general and administrative expenses
(182.6) (436.6) Special items, net (10.2) (7.3) Equity income in
MillerCoors 97.1 - -------------------- --------------------
Operating income 117.2 77.7 Interest expense, net (19.9) (27.8)(a)
Debt extinguishment costs - (12.4) Other (expense) income, net
(18.5) 4.6 -------------------- -------------------- Income from
continuing operations before income taxes 78.8 42.1 Income tax
benefit 1.3 6.6 -------------------- -------------------- Income
from continuing operations 80.1 48.7 Loss from discontinued
operations, net of tax (3.9) (9.0) --------------------
-------------------- Net income 76.2 39.7 Less: Net income
attributable to noncontrolling interests(b) (0.5) (5.4)
-------------------- -------------------- Net income attributable
to MCBC $75.7 $34.3 ==================== ==================== Basic
income (loss) per share: From continuing Operations attributable to
MCBC $0.43 $0.24 From discontinued operations attributable to MCBC
(0.02) (0.05) -------------------- -------------------- Basic net
income per share $0.41 $0.19 ====================
==================== Diluted income (loss) per share: From
continuing operations attributable to MCBC $0.43 $0.24 From
discontinued operations attributable to MCBC (0.02) (0.05)
-------------------- -------------------- Diluted net income per
share $0.41 $0.19 ==================== ====================
Weighted average shares - basic 183.8 181.0 Weighted average shares
- diluted 184.9 184.5 Dividends per share $0.20 $0.16
==================== ==================== Amount attributable to
MCBC Income from continuing operations, net of tax $79.6 $43.3 Loss
from discontinued operations, net of tax (3.9) (9.0)
-------------------- -------------------- Net income attributable
to MCBC $75.7 $34.3 (a) On December 29, 2008, we adopted FASB Staff
Position APB 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, $4.0 and $3.9 million of additional non-cash interest
expense was recorded in the first quarter of 2009 and 2008,
respectively. (b) 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 Thirteen
Weeks Ended -------------------- -------------------- March 29,
2009 March 30, 2008 -------------------- --------------------
Volume in hectoliters 1.763 1.767 ====================
==================== Sales $421.8 $499.8 Excise taxes (97.1)
(116.2) -------------------- -------------------- Net sales 324.7
383.6 Cost of goods sold (187.4) (216.2) --------------------
-------------------- Gross profit 137.3 167.4 Marketing, general
and administrative expenses (83.5) (106.6) Special items, net (8.1)
(1.4) -------------------- -------------------- Operating income
45.7 59.4 Other income, net 4.3 3.3 --------------------
-------------------- Earnings before income taxes $50.0 $62.7
Molson Coors Brewing Company and Subsidiaries Table 8: United
States Segment Results of Operations (In Millions) (Unaudited)
Thirteen Weeks Ended Thirteen Weeks Ended --------------------
-------------------- March 29, 2009(1) March 30, 2008
-------------------- -------------------- Volume in hectoliters -
6.509 ==================== ==================== Sales $- $751.4
Excise taxes - (101.4) -------------------- --------------------
Net sales - 650.0 Cost of goods sold - (392.9) --------------------
-------------------- Gross profit - 257.1 Marketing, general and
administrative expenses - (197.6) Special items, net - 8.0 Equity
income in MillerCoors 97.1 - --------------------
-------------------- Operating income 97.1 67.5 Other income, net -
2.4 -------------------- -------------------- Earnings before
income taxes $97.1 $69.9 ==================== ====================
(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 Thirteen Weeks Ended
-------------------- -------------------- March 29, 2009 March 30,
2008 -------------------- -------------------- Volume in
hectoliters 2.021 2.346 ==================== ====================
Sales $386.3 $551.3 Excise taxes (166.9) (240.8)
-------------------- -------------------- Net sales 219.4 310.5
Cost of goods sold (149.9) (219.0) Gross profit 69.5 91.5
Marketing, general and administrative expenses (67.0) (95.1)
Special items, net (0.9) (2.1) --------------------
-------------------- Operating income 1.6 (5.7) Interest income,
net 2.0 2.8 Other expense, net (1.0) (1.2) --------------------
-------------------- Earnings (loss) before income taxes $2.6
$(4.1) Molson Coors Brewing Company and Subsidiaries Table 10:
Global Markets and Corporate Results of Operations (In Millions)
(Unaudited) Thirteen Weeks Ended Thirteen Weeks Ended
-------------------- -------------------- March 29, 2009 March 30,
2008 -------------------- -------------------- Volume in
hectoliters 0.111 0.088 ==================== ====================
Net sales $14.9 $12.5 Cost of goods sold (8.8) (6.9)
-------------------- -------------------- Gross profit 6.1 5.6
Marketing, general and administrative expenses (32.1) (37.3)
Special items, net (1.2) (11.8) --------------------
-------------------- Operating loss (27.2) (43.5) Interest expense,
net (21.9) (30.6) Debt extinguishment costs - (12.4) Other
(expense) income, net (21.8) 0.1 --------------------
-------------------- Loss before income taxes $(70.9) $(86.4)
MillerCoors LLC (1) Table 11: Results of Operations (In Millions)
(Unaudited) Three Months Ended -------------------------------
March 31, 2009 March 31, 2008 --------------- -------------- Actual
Pro Forma Volume in hectoliters 18.422 18.791 ===============
============== Sales $2,005.7 $1,947.1 Excise taxes (289.8) (294.7)
--------------- -------------- Net sales 1,715.9 1,652.4 Cost of
goods sold (1,049.9) (1,017.0) --------------- -------------- Gross
profit 666.0 635.4 Marketing, general and administrative expenses
(441.8) (485.9) Special items, net (10.4) (11.3) ---------------
-------------- Operating income 213.8 138.2 Other (expense) income,
net (0.5) 2.6 --------------- -------------- Income before income
taxes 213.3 140.8 Income tax expense (2.1) - ---------------
-------------- Net Income 211.2 140.8 Less: Net income attributable
to noncontrolling interests (5.2) (4.2) ---------------
-------------- Net income attributable to MillerCoors LLC $206.0
$136.6 =============== ============== (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 -------------------------------------- March 29, 2009
December 28, 2008 ----------------- ----------------- Assets Cash
and cash equivalents $94.4 $216.2 Receivables, net 529.5 635.4
Total inventories, net 189.5 192.1 Other, net 75.1 63.4
----------------- ----------------- Total current assets 888.5
1,107.1 Properties, net 1,131.2 1,301.9 Goodwill and intangible
assets, net 5,126.3 5,221.4 Investment in MillerCoors 2,499.9
2,418.7 Other 253.4 337.5 ----------------- ----------------- Total
assets $9,899.3 $10,386.6 ================= =================
Liabilities and equity Accounts payable $146.9 $170.5 Accrued
expenses and other 654.3 815.5 Short-term borrowings and current
portion of long-term debt 0.1 0.1 -----------------
----------------- Total current liabilities 801.3 986.1 Long-term
debt 1,568.2 1,752.0 Pension and post-retirement benefits 448.2
581.0 Other 1,006.0 1,028.1 ----------------- -----------------
Total liabilities 3,823.7 4,347.2 Total MCBC stockholders' equity
6,071.5 6,055.4 Noncontrolling interests 4.1 (16.0)
----------------- ----------------- Total equity 6,075.6 6,039.4
----------------- ----------------- Total liabilities and equity
$9,899.3 $10,386.6 ----------------- ----------------- Molson Coors
Brewing Company and Subsidiaries Table 13: Condensed Consolidated
Statements of Cash Flows (In Millions) (Unaudited) Thirteen Weeks
Ended ---------------------- March 29, March 28, 2009 2008
---------------------- Cash flows from operating activities: Net
income $76.2 $39.7 Adjustments to reconcile net income to net cash
used in operating activities: Depreciation and amortization 44.4
82.3 Equity income in MillerCoors (97.1) - Distributions from
MillerCoors 84.0 - Change in working capital and other, net (102.7)
(248.2) ----------- --------- Net cash provided by (used in)
operating activities 4.8 (126.2) Cash flows from investing
activities: Additions to properties and intangible assets (19.6)
(69.5) Proceeds from sales of assets and businesses, net 2.1 28.3
Deconsolidation Brewers Retail Inc. (26.1) - Investment in
MillerCoors (67.2) - Other, net 0.4 16.1 ----------- --------- Net
cash used in investing activities (110.4) (25.1) Cash flows from
financing activities: Exercise of stock options under equity
compensation plans 1.5 23.0 Dividends paid (36.8) (33.1) Net
borrowings (repayments) of debt 1.8 (150.2) Other, net 20.0 54.7
----------- --------- Net cash used in financing activities (13.5)
(105.6) Cash and cash equivalents: Net decrease in cash and cash
equivalents (119.1) (256.9) Effect of foreign exchange rate changes
on cash and cash equivalents (2.7) (1.4) Balance at beginning of
year 216.2 377.0 ----------- --------- Balance at end of period
$94.4 $118.7 DATASOURCE: Molson Coors Brewing Company CONTACT: News
Media, Paul de la Plante, +1-514-843-2332, or Investor Relations,
Dave Dunnewald, +1-303-927-2334, or Jane Armstrong,
+1-303-927-2394, all of Molson Coors Brewing Company Web Site:
http://www.molsoncoors.com/ http://www.coors.com/
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