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, 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
SOURCE Molson Coors Brewing Company
05/05/2009
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
(TAP TAP. TAP.TO)
