DENVER,
COLORADO AND MONTREAL, QUEBEC, Nov 05, 2008 (MARKET WIRE via COMTEX
News Network) -- Molson Coors Brewing Company (TSX: TAP.A)(TSX:
TAP.B)(NYSE: TAP)
today reported higher pro forma global volume and net income for the
third quarter ending September 28, 2008.
Third Quarter Highlights
Key operating and financial highlights for the Company's fiscal third
quarter ended September 28, 2008, compared to the fiscal third
quarter ended September 30, 2007, include the following:
- Molson Coors net income increased 28.6 percent to $173.2 million
for the third quarter.
- Underlying after-tax income was $175.8 million, or $0.95 per
diluted share, in the third quarter 2008, compared to $173.2 million,
or $0.95 per diluted share, last year. The Company calculates
non-GAAP underlying income by excluding special and other one- time
items from the nearest U.S. GAAP earnings measure.
- Molson Coors' leading brands performed strongly in each of the
Company's major markets:
- High-single-digit growth of Canadian strategic brands
- Growth of seven of the 12 largest MillerCoors brands
- Strong market share increase for Carling in a difficult U.K. beer
market
- Sales-to-retail grew 3.7 percent in Canada on a comparable basis,
and declined 3.1 percent in the United Kingdom against market
performance of up approximately 3 percent and down approximately 7
percent, respectively.
- The Company's Canada business is performing well, however,
competitive price discounting in Quebec, along with continued steep
commodity inflation, held back Canada profit performance in the
quarter.
- The Company's U.K. business has grown market share and net sales
per barrel on the strength of its brands, despite an array of U.K.
industry challenges. This team also successfully implemented an
interim price increase at the end of September.
- In its first quarter of combined operations, MillerCoors grew
trading-day-adjusted sales to retail 0.7 percent in the U.S.,
increased revenue per barrel 3 percent, and grew underlying earnings
at a strong double-digit rate.
- MillerCoors integration is progressing well with more than 28%
growth in underlying earnings versus the pro-forma result a year ago.
MillerCoors now expects to accelerate its three-year synergy savings
targets by six months versus the original commitment when the joint
venture was announced more than a year ago.
- Molson Coors acquired an economic exposure to Foster's via a
cash-settled total return swap arranged in Australia by Deutsche
Bank. This swap gives Molson Coors exposure to nearly five percent of
Foster's Group's (ASX: FGL) outstanding common stock.
To calculate underlying income in the third quarter of 2008, the
Company excluded net special charges and other one-time items
totaling $3.6 million of pretax income. 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.
Peter Swinburn, Molson Coors president and chief executive officer,
said, "We are pleased to have achieved higher total Company volume
and income in the third quarter, despite challenging competitive and
economic conditions in all our markets. We gained market share in
both Canada and the U.K. during the quarter, and we initiated the
integration of two U.S. beer businesses into MillerCoors, a strong
and competitive brewer with the talent, brands and scale to win in
the U.S. In these challenging economic times, Molson Coors has a
solid foundation of strong brands, moderate debt levels, cash
generating capability, and cost reduction programs to generate
resources to grow our business and the bottom line."
Molson Coors achieved approximately $19 million in cost reductions
during the quarter as part of its three-year, $250 million Resources
for Growth (RFG) program. The Company is on target to achieve its
2008 goal of $77 million of additional RFG cost savings.
MillerCoors is aggressively working to deliver against its stated
goal of achieving $500 million of cost synergies in the first three
years of combined operations commencing July 1, 2008. The company
plans to deliver its initial commitment of $50 million of cost
synergies in the first year of combined operations ending June 30,
2009. These savings will be divided approximately evenly between the
second half of 2008 and the first half of 2009. In addition,
MillerCoors is on track to deliver $350 million of savings in year
two, with approximately $175 million of this delivered in the second
half of 2009. The remaining $100 million of savings will be delivered
in year three, ending June 30, 2011.
Foreign exchange rate movements decreased Molson Coors pretax income
by approximately $3 million in the quarter, due to a seven percent
year-over-year depreciation of the British Pound versus the U.S.
Dollar.
The Company's effective tax rate during the third quarter 2008 for
income from continuing operations was 25 percent on a reported basis,
and 21 percent on an underlying basis, compared to negative 4 percent
and positive 17 percent, respectively, during the third quarter a
year ago. The Company estimates that its full-year 2008 effective tax
rate will be in the range of 20 percent to 24 percent on an
underlying basis.
The Company's total worldwide beer volume was 12.025 million barrels
in the quarter, up 0.2% versus the prior year on a pro forma basis.
Third quarter volume increased 7.4 percent when compared to reported
volume a year ago, as shown in Table 1 below.
Table 1: Worldwide Beer Volume
Thirteen Weeks Ended Thirteen Weeks Ended
-------------------------------------------------------------------------
September September % September September %
28, 2008 30, 2007 Change 28, 2008 30, 2007 Change
-------------------------------------------------------------------------
Actual Pro forma Actual Actual
(1)
Volume in U.S.
barrels (000):
Financial volume 4,669 4,709 (0.8%) 4,669 11,141 (58.1%)
Royalty volume 67 59 13.6% 67 59 13.6%
-------------------------------------------------------------------------
Owned volume 4,736 4,768 (0.7%) 4,736 11,200 (57.7%)
Proportionate
share of equity
investment sales
to-retail (2) 7,289 7,238 0.7% 7,289 - 100.0%
-------------------------------------------------------------------------
Total worldwide
beer volume 12,025 12,006 0.2% 12,025 11,200 7.4%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Reflects the reduction of the U.S. segment volume reported for the 13
weeks ended September 30, 2007.
(2) Reflects the addition of Molson Coors Brewing Company's proportionate
share of MillerCoors and Molson Modelo sales-to-retail for the periods
presented, adjusted for comparable trading days.
Business Segments
Following are the Company's 2008 third quarter results by business
segment:
Canada Business
The Canada business earned underlying pretax income of $151.0 million
in the third quarter, an 8.1 percent decrease from the same period
last year. This profit decline was driven by higher cost inflation
and price discounting this year, cycling the final House of Blues
Canada equity earnings and Foster's U.S. contract earnings in the
prior year, and lower income from the Modelo brands(1) resulting from
the new joint venture this year.
On a comparable basis(2), Canada sales-to-retail increased 3.7
percent versus last year. The increase was driven by
high-single-digit growth of Molson's strategic brands, led by
double-digit growth by Coors Light, Carling and Rickard's, and
continued strong growth for Creemore and our partner import brands.
Canadian beer industry sales grew approximately 3.1 percent during
the quarter, resulting in a market-share gain for the Company's
Canada portfolio.
On a comparable basis, Canada sales volume increased 2.6 percent
during the third quarter to 2.1 million barrels. Comparable net sales
per barrel increased slightly in local currency, driven by improved
sales mix of our products, offset by negative net pricing. Cost of
goods sold per barrel increased approximately seven percent on a
comparable basis, due to higher commodity, packaging material, fuel
and transportation costs, along with sales mix shift toward
higher-cost partner import brands. Approximately one-third of the
cost inflation in the quarter was offset by Resources for Growth
savings. Comparable marketing, general and administrative expenses
decreased approximately one percent in local currency during the
quarter due primarily to lower amortization and administrative
expense, offset in part by increased promotional trade
spending.
(1) Except where otherwise indicated, comparable Canada results exclude the
effect of establishing the Modelo Molson joint venture in 2008, as well
as the reporting effects of discontinuing the Company's Foster's U.S.
contract in 2007.
(2) Results for the Modelo Molson joint venture, which sells the Modelo
brands across Canada, are recorded under the equity method of
accounting. Beginning in 2008, Modelo brand results are no longer
reported on a line-item basis in the Company's Canada results,
affecting the comparability of results with 2007. Beginning in 2008,
Modelo Molson sales volumes are excluded from financial volume. In
addition, Molson Coors now includes its 50% ownership share of
Modelo Molson sales-to-retail in its consolidated worldwide beer
volume for
both the current year and prior year. 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. will no longer be treated as inter-
company sales and eliminated upon consolidation of total Molson
Coors
results. Sales volume for these U.S. exports will be excluded from
Canada results and will now be reported by MillerCoors.
United States Business (MillerCoors) (i)
Molson Coors underlying U.S. segment pretax income increased 13.7
percent to $92.1 million in the third quarter, driven by strong
underlying income growth by MillerCoors versus a year ago. U.S.
segment results include the Company's 42% share of MillerCoors net
income and various adjustments for the equity income calculation
under U.S. GAAP, as shown in Table 2 below.
MillerCoors Operating and Financial Highlights (U.S. GAAP)
MillerCoors underlying net income, excluding special items, increased
to $190.8 million in the third quarter, up 28.2 percent from the
prior year adjusted pro forma result, driven primarily by strong
pricing and reductions in marketing and overhead expenses, which more
than offset increases in cost of goods sold and the reduction in
shipment volume.
During the period, MillerCoors U.S. sales-to-retailers (STRs) rose by
0.7 percent after adjusting for the extra trading day in the period
(+2.3% unadjusted), due to continued momentum from seven of its 12
largest brands, including strong single-digit growth by Coors Light,
double digit growth by Keystone Light, Blue Moon and Coors Banquet,
strong performance by import brands, MGD 64 and Miller High Life,
offset in part by declines in Miller Chill, Killian's Irish Red and
Miller Genuine Draft. MillerCoors shipments-to-wholesalers (STWs)
declined 0.5 percent, due to reductions in distributor inventory
levels in the third quarter.
MillerCoors total net sales increased by 2.1 percent to $1.95 billion
versus the prior period pro forma results. Excluding contract
brewing, U.S. net sales were up 2.3 percent to $1.82 billion.
Third-party contract brewing volumes decreased 3.3 percent.
Pricing remained strong as total company net sales per barrel
increased 3.0 percent. Excluding contract brewing, net sales per
barrel grew at 2.9 percent versus the prior year pro forma results,
driven by strong pricing. Net sales mix was virtually unchanged, due
to strong growth by the company's premium light, craft and import
brands, largely offset by cycling significant Miller Chill ramp-up
volumes in the prior year.
Cost of goods sold per barrel increased by 5.6 percent, as reductions
related to savings initiatives by Miller Brewing Company and Coors
Brewing Company were more than offset by increased commodity and fuel
costs.
Marketing, general and administrative expense decreased 9.1 percent,
reflecting favorability due to the non-recurrence of prior year
Miller Chill launch costs, which were partially offset by MGD 64
launch costs this year, as well as a reduction in share-based
compensation expenses.
<Table 2: Reconciliation of MillerCoors Net Income to MCBC's Equity Income
in MillerCoors And Reconciliation to U.S. Segment Underlying Pretax Income:
Thirteen Weeks Ended
--------------------------------------------------------------------------
(In Millions of US $) September 28, 2008
--------------------------------------------------------------------------
MillerCoors Net Income $168.2
Multiply: MCBC economic interest % in MillerCoors 42%
--------------------------------------------------------------------------
MCBC proportionate $ share of MillerCoors net income $70.6
Add: Accounting policy elections (1) 31.8
Add: Amortization of the difference between
MCBC contributed cost basis and the underlying
equity in net assets of MillerCoors (2) 6.0
Minus: Share-based compensation adjustment (3) (1.9)
--------------------------------------------------------------------------
Equity Income in MillerCoors (reported) $106.5
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Add: U.S. Segment Pretax Income for June 30, 2008 4.0
--------------------------------------------------------------------------
U.S. Segment Pretax Income from Continuing Operations $110.5
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Add: Proportionate share of MillerCoors special items (4) 9.5
Add: MillerCoors variable share-based compensation (5) 3.9
Minus: Accounting policy elections (1) (31.8)
--------------------------------------------------------------------------
Non-GAAP: U.S. Segment Underlying Pretax Income $92.1
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(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. The gain from
these accounting policy elections is eliminated from U.S. Segment
Underlying Pretax Income.
(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 $307 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.
(3) The net adjustment is to record all stock-based compensation associated
with pre-existing equity awards to be settled in MCBC Class B common
stock held by former CBC employees now employed by MillerCoors, as well
as to eliminate all stock-based compensation impacts related to pre-
existing SABMiller equity awards held by Miller employees now employed
by MillerCoors.
(4) MillerCoors Q3 2008 Special Items of $22.6 million, multiplied by
MCBC's proportionate share of MillerCoors at 42%, equals $9.5 million.
(5) Included in Equity Income in MillerCoors but excluded from U.S. Segment
Underlying Pretax Income. This adjustment represents the fair value
mark to market component of MCBC share-based compensation held by
employees of MillerCoors.
(i) MillerCoors, a U.S. joint venture of Molson Coors Brewing Company and
SABMiller plc, was launched on July 1, 2008. MillerCoors is 42 percent
owned by Molson Coors, and is accounted for on an equity basis. 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 third quarter 2008, 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 and Non-GAAP U.S.
Segment Underlying Pretax Income.
United Kingdom Business
The U.K. business reported underlying pretax income of $30.7 million
in the third quarter, a 19.0 percent increase over the same quarter
last year. This increase was driven by the benefit of supplier
contract negotiations this year and a $4.8 million reduction in
pension expense due to cycling a one-time increase in pension expense
last year. Third quarter operating results also benefited from the
Company's 7th consecutive quarter of year-over-year pricing growth,
the introduction of draught Magners cider, continuing cost reductions
and profits from a new contract brewing arrangement. Challenges in
the quarter included lower sales volume and higher commodity and
energy costs. A seven percent decline in the value of the British
pound versus the U.S. dollar reduced underlying pretax income by
approximately $3 million.
The U.K. business and its leading brand, Carling, gained market share
in both the on- and off-premise channels during the quarter in an
industry that continues to suffer from poor weather, smoking bans and
a weakening general economy. U.K. owned-brand volume decreased 3.1
percent during the quarter, while the beer industry declined more
than 7 percent, driven by declines in the on- and off-premise
channels.
In local currency, comparable U.K. net sales per barrel of owned
products increased 2.5 percent, due to higher pricing in both the
on-premise and off-premise channels and positive brand mix, including
growth in draught Magners Cider.
Comparable cost of goods sold per barrel for owned brands increased
7.7 percent in local currency in the third quarter, due primarily to
higher energy and materials cost inflation.
Comparable costs exclude a $6 million benefit from changes to
supplier contracts related to the first half of 2008, as well as the
benefit of cycling one-time pension expense in 2007. Marketing,
general and administrative expense decreased 5.1 percent in local
currency due to management actions to lower costs and the cycling of
one-time pension expense. Global Markets and Corporate
Marketing, general and administrative expenses for Global Markets and
Corporate decreased 13.1 percent to $31.9 million in the third
quarter 2008, which includes $20.5 million in Corporate general and
administrative expenses. Net interest expense was $24.4 million in
the third quarter 2008, a decrease of $2.7 million compared to a year
ago. The underlying pretax loss for Global Markets and Corporate was
$49.7 million, an 11.9 percent improvement versus the third quarter
of 2007. Corporate Other Income results include a one-time net gain
of $13.6 million related to the cash-settled total return swap the
Company arranged with respect to Foster's common stock.
Corporate Other results also include a one-time $3.6 million charge
to establish a reserve for environmental site remediation of chemical
businesses sold by Molson Inc. 12 years ago. This one-time charge and
the cash-settled total return swap gain are excluded from the
Company's underlying earnings, as described below.
Special and Other One-Time Items
During the third quarter 2008, the Company reported net special
charges of $24.8 million, including $10.0 million of joint venture
readiness and deal costs, $6.1 million in corporate project expenses,
$5.2 million in transitional costs related to an outsourcing
contract, U.K. restructuring charges of $2.6 million, a $1.9 million
impairment charges related to the transfer of production of a U.S.
brand from Canada to the U.S. brewing network, offset in part by a
$2.7 million gain on the sale of a non-core business in the U.K.
During the third quarter 2008, MillerCoors reported net special, or
exceptional, items of $22.6 million related to one-time integration
costs. These costs will enable MillerCoors to capture organizational
synergies as part of its stated $500 million three-year synergy
savings plan. The third quarter 2007 pro forma results include
special items of $2.8 million, relating to a one-time charge for
supply chain restructuring in the legacy Coors organization.
Discontinued Operations
The Company reports results for its former Brazilian unit,
Cervejarias Kaiser ("Kaiser"), as discontinued operations. The
Company reported a gain of $3.2 million from discontinued operations
during the quarter due to a net increase in reserve values, more than
offset by the favorable impact of foreign exchange movements on the
indemnity estimates related to the Brazil Kaiser business.
2008 Third Quarter Earnings Conference Call
Molson Coors Brewing Company will conduct an earnings conference call
with financial analysts and investors at noon Eastern Time today to
discuss the Company's 2008 third quarter results. The Company will
provide a live webcast of the earnings call.
Approximately two hours after the conclusion of the earnings call,
the Company also will host an online, real-time webcast of an
Investor Relations Follow-up Session with financial analysts at 3:00
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 February 9, 2009.
Reconciliations to Nearest U.S. GAAP Measures
Molson Coors Brewing Company
<Table 3: 2008 Third 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) 2008 3rd Q 2007 3rd Q
--------------------------------------------------------------------------
U.S. GAAP: After-tax income from
continuing operations: $170.0 $135.1
Per diluted share: $0.92 $0.74
Add back: Pretax special items - net 24.8 55.3
Add back: Loss on environmental liability reserve (1) 3.6 -
Add back: MillerCoors variable share-based
compensation (2) 3.9 -
Add back: Debt extinguishment costs - 24.5
Add back: Proportionate share of
MillerCoors pretax special items - net (2) 9.5 -
Add back: Tax effects related to special
and other one-time items 9.4 -
Minus: Gain related to the cash-settled
total return swap (1) (13.6) -
Minus: Impact of MillerCoors accounting
policy elections (2) (31.8) -
Minus: Tax effects related to special
and other one-time items - (41.7)
Non-GAAP: Underlying after-tax income: $175.8 $173.2
Per diluted share: $0.95 $0.95
Notes:
(1) Included in Other Income (Expense)
(2) Included in Equity Income in MillerCoors, but excluded from Non-GAAP
Underlying Pretax Income
--------------------------------------------------------------------------
Table 4: 2008 Third 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 Total
--------------------------------------------------------------------------
Global
Markets
and Consoli-
Canada U.S. U.K. Corporate dated
--------------------------------------------------------------------------
U.S. GAAP: 2008 3rd Q
pretax income (loss)
from continuing
operations - reported $148.0 $110.5 $30.5 $(61.3) $227.7
Add back: Pretax special
items - net 3.0 - 0.2 21.6 24.8
Add back: Loss on
environmental
liability reserve (1) - - - 3.6 3.6
Add back: MillerCoors
variable share
based compensation (2) - 3.9 - - 3.9
Add back: Proportionate
share of MillerCoors
pretax special
items - net (2) - 9.5 - - 9.5
Minus: Gain related to
the cash-settled
total return swap (1) - - - (13.6) (13.6)
Minus: Impact of
MillerCoors accounting
policy elections (2) - (31.8) - - (31.8)
Non-GAAP: 2008 3rd Q
underlying pretax
income (loss) $151.0 $92.1 $30.7 $(49.7) $224.1
--------------------------------------------------------------------------
Percent change 2008 3rd Q
vs. 2007 3rd Q underlying
pretax income (loss) -8.1% 13.7% 19.0% -11.9% 4.4%
--------------------------------------------------------------------------
U.S. GAAP: 2007 3rd Q
pretax income (loss)
from continuing
operations $121.1 $78.2 $18.5 $(82.9) $134.9
Add back: Pretax special
items - net 43.2 2.8 7.3 2.0 55.3
Add back: Debt
extinguishment costs - - - 24.5 24.5
Non-GAAP: 2007 3rd Q
underlying pretax
income (loss) $164.3 $81.0 $25.8 $(56.4) $214.7
--------------------------------------------------------------------------
Notes:
(1) Included in Other Income (Expense)
(2) Included in Equity Income in MillerCoors, but excluded from Non-GAAP
Underlying Pretax Income
--------------------------------------------------------------------------
MillerCoors LLC
Table 5: 2008 Third Quarter Underlying Net Income
(Net Income, Excluding Special Items)
(Note: Some numbers may not sum due to rounding.)
Three Months Ended
-----------------------------------------------------------------------
(In millions of US $) September 30, 2008 September 30, 2007
-----------------------------------------------------------------------
Adjusted Pro
Forma (1)
U.S. GAAP: Net Income $168.2 $146.0
Add back: Special Items, net 22.6 2.8
-----------------------------------------------------------------------
Non-GAAP: Underlying Net Income $190.8 $148.8
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(1) The adjusted pro forma net income excludes the benefit of a $16.8
million settlement received from the Ball Corporation which related to
the periods prior to the quarter ended September 30, 2007.
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 AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(VOLUMES IN THOUSANDS, DOLLARS IN MILLIONS
AND PER SHARE AMOUNTS IN WHOLE DOLLARS)
(UNAUDITED)
Thirteen Thirteen Thirty Nine Thirty Nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
--------------------------------------------------------------------------
September 28, September 30, September 28, September 30
2008 2007 2008 2007
--------------------------------------------------------------------------
Volume in barrels 4,669 11,141 25,453 31,332
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Sales $1,373.8 $2,257.2 $5,549.5 $6,152.5
Excise taxes (452.7) (571.8) (1,514.3) (1,562.2)
--------------------------------------------------------------------------
Net Sales 921.1 1,685.4 4,035.2 4,590.3
Cost of goods sold (524.4) (987.3) (2,392.9) (2,724.4)
--------------------------------------------------------------------------
Gross profit 396.7 698.1 1,642.3 1,865.9
Marketing, general and
administrative expenses (236.8) (461.1) (1,136.6) (1,314.8)
Special items, net (24.8) (55.3) (136.1) (88.9)
Equity income in
MillerCoors 106.5 - 106.5 -
--------------------------------------------------------------------------
Operating income 241.6 181.7 476.1 462.2
Interest expense, net (21.6) (24.2) (68.6) (75.5)
Debt extinguishment
costs - (24.5) (12.4) (24.5)
Other income, net 7.7 1.9 6.4 18.1
--------------------------------------------------------------------------
Income from
continuing operations
before income taxes
and minority interests 227.7 134.9 401.5 380.3
Income tax (expense)
benefit (57.0) 5.7 (80.5) (28.0)
--------------------------------------------------------------------------
Income from continuing
operations before
minority interests 170.7 140.6 321.0 352.3
Minority interests in
net income of
consolidated entities (0.7) (5.5) (11.6) (13.6)
--------------------------------------------------------------------------
Income from continuing
operations 170.0 135.1 309.4 338.7
--------------------------------------------------------------------------
Gain (loss) from
discontinued operations,
net of tax 3.2 (0.4) (18.1) (14.7)
--------------------------------------------------------------------------
Net income $173.2 $134.7 $291.3 $324.0
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Basic income (loss)
per share:
From continuing
operations $0.93 $0.75 $1.70 $1.90
From discontinued
operations 0.02 - (0.10) (0.08)
--------------------------------------------------------------------------
Basic net income per
share $0.95 $0.75 $1.60 $1.82
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Diluted income (loss)
per share:
From continuing
operations $0.92 $0.74 $1.67 $1.87
From discontinued
operations 0.02 - (0.10) (0.08)
--------------------------------------------------------------------------
Diluted net income
per share $0.94 $0.74 $1.57 $1.79
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Weighted average shares
- basic 183.5 179.4 182.3 178.2
Weighted average shares
- diluted 185.7 181.7 185.5 180.8
Dividends per share $0.20 $0.16 $0.56 $0.48
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MOLSON COORS BREWING COMPANY AND SUBSIDIARIES
CANADA SEGMENT RESULTS OF OPERATIONS
(VOLUMES IN THOUSANDS, DOLLARS IN MILLIONS)
(UNAUDITED)
Thirteen Thirteen Thirty Nine Thirty Nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
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September 28, September 30, September 28, September 30
2008 2007 2008 2007
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Volume in barrels 2,149 2,206 5,764 6,001
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Sales $706.9 $704.7 $1,902.2 $1,829.1
Excise taxes (165.2) (158.5) (444.2) (410.6)
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Net sales 541.7 546.2 1,458.0 1,418.5
Cost of goods sold (278.5) (263.6) (753.2) (728.1)
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Gross profit 263.2 282.6 704.8 690.4
Marketing, general
and administrative
expenses (110.9) (119.7) (334.7) (336.4)
Special items, net (3.0) (43.2) (4.9) (71.4)
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Operating income 149.3 119.7 365.2 282.6
Other (expense) income,
net (1.3) 1.4 (0.5) 18.5
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Earnings before
income taxes and
minority interests $148.0 $121.1 $364.7 $301.1
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MOLSON COORS BREWING COMPANY AND SUBSIDIARIES
UNITED STATES SEGMENT RESULTS OF OPERATIONS
(VOLUMES IN THOUSANDS, DOLLARS IN MILLIONS)
(UNAUDITED)
Thirteen Thirteen Thirty Nine Thirty Nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
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September 28, September 30, September 28, September 30
2008(1) 2007 2008(1) 2007
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Volume in barrels 98 6,432 12,693 18,184
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Sales $14.7 $854.4 $1,736.4 $2,410.5
Excise taxes (1.8) (117.6) (231.6) (330.4)
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Net sales 12.9 736.8 1,504.8 2,080.1
Cost of goods sold (7.7) (455.1) (915.1) (1,273.9)
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Gross profit 5.2 281.7 589.7 806.2
Marketing, general and
administrative
expenses (1.2) (200.7) (413.3) (582.4)
Special items, net - (2.8) (69.3) (2.8)
Equity income in MillerCoors 106.5 - 106.5 -
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Operating income 110.5 78.2 213.6 221.0
Other income, net - - 2.3 0.9
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Earnings before
income taxes and
minority interests $110.5 $78.2 $215.9 $221.9
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(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
UNITED KINGDOM SEGMENT RESULTS OF OPERATIONS
(VOLUMES IN THOUSANDS, DOLLARS IN MILLIONS)
(UNAUDITED)
Thirteen Thirteen Thirty Nine Thirty Nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
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September 28, September 30, September 28, September 30
2008 2007 2008 2007
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Volume in barrels 2,321 2,396 6,727 6,846
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Sales $632.4 $677.1 $1,859.8 $1,858.6
Excise taxes (283.6) (293.7) (833.5) (816.4)
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Net sales 348.8 383.4 1,026.3 1,042.2
Cost of goods sold (227.9) (257.2) (698.4) (693.9)
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Gross profit 120.9 126.2 327.9 348.3
Marketing, general
and administrative
expenses (92.8) (104.0) (284.1) (292.4)
Special items, net (0.2) (7.3) (5.4) (12.7)
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Operating income 27.9 14.9 38.4 43.2
Interest income, net 2.8 2.9 8.5 8.6
Other (expense) income,
net (0.2) 0.7 (2.0) (0.9)
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Earnings before income
taxes and minority
interests $30.5 $18.5 $44.9 $50.9
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MOLSON COORS BREWING COMPANY AND SUBSIDIARIES
GLOBAL MARKETS AND CORPORATE RESULTS OF OPERATIONS
(VOLUMES IN THOUSANDS, DOLLARS IN MILLIONS)
(UNAUDITED)
Thirteen Thirteen Thirty Nine Thirty Nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
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September 28, September 30, September 28, September 30
2008 2007 2008 2007
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Volume in barrels 101 107 269 301
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Net sales $17.7 $19.0 $46.1 $49.5
Cost of goods sold (10.3) (11.4) (26.2) (28.5)
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Gross profit 7.4 7.6 19.9 21.0
Marketing, general
and administrative
expenses (31.9) (36.7) (104.5) (103.6)
Special items, net (21.6) (2.0) (56.5) (2.0)
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Operating loss (46.1) (31.1) (141.1) (84.6)
Interest expense, net (24.4) (27.1) (77.1) (84.1)
Debt extinguishment
costs - (24.5) (12.4) (24.5)
Other income (expense),
net 9.2 (0.2) 6.6 (0.4)
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Loss before income
taxes $(61.3) $(82.9) $(224.0) $(193.6)
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MOLSON COORS BREWING COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
(UNAUDITED)
As of
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September 28, December 30,
2008 2007
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Assets
Cash and cash equivalents $334.5 $377.0
Receivables, net 708.0 871.1
Total inventories, net 231.4 369.6
Other, net 90.5 159.1
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Total current assets 1,364.4 1,776.8
Properties, net 1,550.4 2,696.2
Goodwill and intangible assets, net 6,263.6 8,385.9
Investment in MillerCoors 2,698.0 -
Other 443.7 592.7
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Total assets $12,320.1 $13,451.6
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Liabilities and stockholders' equity
Accounts payable $261.1 $380.7
Accrued expenses and other 1,061.7 1,350.5
Short-term borrowings and current
portion of long-term debt 0.6 4.3
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Total current liabilities 1,323.4 1,735.5
Long-term debt 1,994.2 2,260.6
Pension and post-retirement benefits 400.9 677.8
Other 1,453.2 1,584.4
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Total liabilities 5,171.7 6,258.3
Minority interests 8.9 43.8
Total stockholders' equity 7,139.5 7,149.5
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Total liabilities and stockholders' equity $12,320.1 $13,451.6
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MOLSON COORS BREWING COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
(UNAUDITED)
Thirty Nine
Weeks Ended
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September 28, December 30,
2008 2007
--------------------------------------------------------------------------
Cash flows from operating activities:
Net income $291.3 $324.0
Adjustments to reconcile net income to
net cash provided by operatin activities:
Depreciation and amortization 224.4 254.9
Equity income in MillerCoors (106.5) -
Distributions from MillerCoors 58.8 -
Change in working capital and other, net (72.4) (250.3)
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Net cash provided by operating activities 395.6 328.6
Cash flows from investing activities:
Additions to properties and intangible assets (176.5) (329.4)
Proceeds from sales of assets and businesses, net 35.7 35.6
Investment in and return of capital in MillerCoors (78.8) -
Other, net 4.6 (24.5)
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Net cash used in investing activities (215.0) (318.3)
Cash flows from financing activities:
Exercise of stock options under equity
compensation plans 51.6 179.3
Dividends paid (122.5) (99.1)
Net borrowings of debt (163.2) (25.3)
Other 14.1 (26.0)
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Net cash (used in) provided by financing activities (220.0) 28.9
Cash and cash equivalents:
Net (decrease) increase in cash and cash
equivalents (39.4) 39.2
Effect of foreign exchange rate changes on cash
and cash equivalents (3.1) 9.9
Balance at beginning of year 377.0 182.2
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Balance at end of period $334.5 $231.3
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MILLERCOORS LLC (1)
RESULTS OF OPERATIONS
(VOLUMES IN THOUSANDS, DOLLARS IN MILLIONS)
(UNAUDITED)
Three Months Ended
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September 28, December 30,
2008 2007
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Actual Adjusted
Pro Forma
(2)
Volume in barrels 18,646 18,808
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Sales $2,293.4 $2,249.9
Excise taxes (343.7) (341.2)
--------------------------------------------------------------------------
Net sales 1,949.7 1,908.7
Cost of goods sold (1,236.9) (1,181.8)
--------------------------------------------------------------------------
Gross profit 712.8 726.9
Marketing, general and administrative expenses (519.1) (571.0)
Special items, net (22.6) (2.8)
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Operating income 171.1 153.1
Other income (expense), net 2.3 (1.5)
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Income from continuing operations before
income taxes and minority interests 173.4 151.6
Income tax expense (1.9) -
--------------------------------------------------------------------------
Income from continuing operations before
minority interests 171.5 151.6
Minority interests (3.3) (5.6)
--------------------------------------------------------------------------
Net Income $168.2 $146.0
--------------------------------------------------------------------------
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(1) The economic ownership of MillerCoors LLC is 58% held by SABMiller and
42% held by Molson Coors Brewing Company. See Table 2 in the release
for a reconciliation from MillerCoors net income to Molson Coors equity
income in MillerCoors.
(2) The adjusted pro forma net income excludes the benefit of a $16.8
million settlement received from Ball Corporation which related to the
periods prior to the quarter ended September 30, 2007.
Contacts:
News Media
Paul de la Plante
514-843-2332
Investor Relations
Dave Dunnewald
303-279-6565
Investor Relations
Leah Ramsey
303-277-7205
SOURCE: Molson Coors Brewing Company
