Molson Coors Brewing Company (NYSE: TAP; TSX: TPX) today reported a 20.2
percent increase in second quarter worldwide beer volume and 17.9
percent higher net sales in the second quarter of 2013 due to the June
2012 acquisition of the company’s Central Europe operations. Underlying
after-tax income increased 11.4 percent for the second quarter 2013,
driven by the addition of a full quarter of Central Europe operating
results this year, along with a lower effective tax rate and improved
financial performance in our Europe and International businesses this
year. The reduction in tax rate was primarily attributable to changes in
Canada tax legislation during the quarter. Net income from continuing
operations attributable to MCBC (a U.S. GAAP earnings measure) increased
165.3 percent due to the same factors affecting underlying after-tax
income, together with a $172 million reduction in special and other
non-core expenses primarily related to the Central Europe acquisition
last year.
Molson Coors president and chief executive officer Peter Swinburn said,
“In the second quarter, Molson Coors delivered double-digit underlying
earnings growth – and more than 165 percent growth on a U.S. GAAP basis.
This underlying income growth was driven by earnings accretion from the
Central Europe acquisition that we completed during June last year and
improved financial performance in our Europe and International
businesses, along with a lower quarterly tax rate this year. We also
generated strong free cash flow and reduced our net debt by $373 million
in the quarter. We delivered these results despite weak consumer demand
and poor weather across all of our markets. Most of our key brands in
core markets gained or held share versus a year ago. Our results also
benefited from the introduction of brand and packaging innovations
globally and from the strength of our above-premium brands, which gained
market share in each of our businesses.”
Swinburn added, “In the remainder of the year, we expect consumer demand
to remain weak. Despite this, we plan to increase our marketing
investments behind our core brands and innovation in order to drive
long-term total returns for our shareholders.”
Underlying EBITDA and Free Cash Flow
Underlying earnings before interest, taxes, depreciation and
amortization, or underlying EBITDA, reached $473.2 million in the 2nd
quarter, a 12.5% increase from a year ago. Year to date underlying
EBITDA grew 9.6% from the first half of 2012 to $690.4 million this year.
Underlying free cash flow for the first half of 2013 totaled $365.8
million. This represents an increase of $29.5 million over last year,
driven by improvements in working capital and the addition of Central
Europe operating cash flow, partially offset by the addition of Central
Europe capital spending.
Foreign Exchange
The Company’s second quarter results include the impact of unfavorable
foreign currency movements, primarily from the Canadian Dollar and
British Pound, which decreased underlying pretax income by approximately
$2 million.
Effective Income Tax Rates
The Company’s second quarter effective income tax rate was 11 percent on
a reported basis and 12 percent on an underlying basis as a result of
one-time benefits, primarily due to Canadian tax law changes, which
decreased our second quarter effective tax rate by approximately 5
percentage points.
Debt
Total debt at the end of the second quarter was $4.57 billion, and cash
and cash equivalents totaled $802 million, resulting in net debt of
$3.77 billion.
Second Quarter Business Segment Results
The following are the Company’s second quarter 2013 results by business
segment:
United States Business (MillerCoors) (2)
Molson Coors underlying U.S. segment equity income decreased 6.5 percent
to $172.6 million in the quarter.
MillerCoors Operating and Financial Highlights
MillerCoors underlying net income for the quarter, excluding special
items, decreased 5.3 percent to $412.7 million, driven by the impact of
lower beer volumes.
MillerCoors domestic sales to retailers (STRs) declined 4.4 percent for
the quarter. Domestic sales to wholesalers (STWs) decreased 5.3 percent.
Domestic net revenue per hectoliter, which excludes contract brewing and
company-owned-distributor sales, grew 2.6 percent primarily due to
favorable net pricing and sales mix. Total company net revenue per
hectoliter, including contract brewing and company-owned distributor
sales, increased 2.7 percent. Third-party contract brewing volumes were
down 6.6 percent.
Cost of goods sold (COGS) per hectoliter increased 2.4 percent driven by
commodity inflation, brand innovation and lower fixed-cost absorption.
Marketing, general and administrative (MG&A) expense increased 0.2
percent, driven primarily by increased marketing investments in support
of the national launches of Redd’s Apple Ale, Third Shift Amber Lager
and Leinenkugel’s Summer Shandy, largely offset by lower pension expense.
Depreciation and amortization expenses for MillerCoors in the second
quarter were $69.7 million, and additions to tangible and intangible
assets totaled $65.9 million.
Canada Business
Canada underlying pretax income decreased 0.7 percent to $138.0 million
in the quarter and increased 0.1 percent in local currency. These
results were driven by a $12 million favorable year-over-year difference
in the timing of marketing and sales spending, offset by the impact of
lower volume and negative sales mix this year. A 0.9 percent decrease in
the Canadian dollar versus the U.S. dollar drove an approximate $1
million negative foreign exchange impact in the quarter.
STRs decreased 4.3 percent in the second quarter primarily due to a weak
Canadian market, which declined approximately 4 percent, driven by
unfavorable weather conditions across key regions. Our Canada business
volume was also affected by cycling the national launch of Coors Light
Iced T last year. Second quarter sales volume for Molson Coors Canada
decreased 2.6 percent. Net sales per hectoliter decreased 0.5 percent in
local currency, driven by a sales mix shift to lower-priced brands and
packages, largely offset by positive net pricing in the quarter.
COGS per hectoliter increased more than 6 percent in local currency,
driven by input inflation, fixed-cost deleverage, increased asset
write-offs, sales mix shift to higher-cost packages, and increased
promotional packaging expense. The asset write-offs represented
approximately one-third of the COGS per hectoliter increase. Cost
savings partially offset these factors in the quarter. MG&A expense
decreased nearly 20 percent in local currency, driven by the
year-over-year difference in the timing of marketing and sales spending
and a significant reduction in G&A costs.
Europe Business – Pro Forma (3)
Europe underlying pretax income increased 14.4 percent to $82.4 million
on a pro forma basis, driven by positive net pricing and cost savings.
Foreign currency translation had no significant effect on pro-forma
Europe results.
Europe sales volume decreased 2 percent due to poor weather, including a
significant flood in the Czech Republic in June. Europe net sales per
hectoliter increased nearly 5 percent in local currency due to positive
pricing and sales mix.
COGS per hectoliter increased approximately 2 percent in local currency,
driven by adverse channel mix, with a higher proportion of sales in the
off-premise channel this year, along with higher factored (non-owned)
beverage sales in U.K.
MG&A expenses increased approximately 3 percent in local currency mainly
due to year-over-year differences in the timing of marketing and sales
spending.
International Business (4)
The International segment posted an underlying pretax loss of $2.4
million in the second quarter, an improvement of $11.0 million, or
82.1%, from a year ago due to the elimination of losses in our China
joint venture (which was deconsolidated in the third quarter of 2012),
improved profit performance in our non-joint-venture business in China,
lower overhead expenses, and the net positive impact of business
transfers between our Europe and International segments.
Total International sales volume, including royalty volume, increased 51
percent driven by the inclusion of the Central Europe export business
this year, along with volume growth in Mexico. Net sales per hectoliter
increased approximately 8 percent, driven by positive geographic mix,
partially offset by the addition of the Central Europe export business
at lower net sales per hectoliter.
COGS per hectoliter decreased approximately 3 percent, driven by the
addition of the Central Europe export business, which has a lower cost
structure than our other businesses, and the positive impact of foreign
exchange movements. International MG&A expense decreased 39 percent,
driven by reduced marketing investment in low-margin accounts in China,
as well as the elimination of our China joint venture and reduced
overhead expenses in other markets.
Corporate
Underlying Corporate pretax expenses totaled $70.9 million for the
second quarter. This $15.7 million increase was due to interest expense
this year related to financing our Central Europe acquisition. Foreign
currency movements unfavorably impacted Corporate underlying pretax
results by approximately $1 million in the quarter.
Special and Other Non-Core Items
The following special and other non-core items have been excluded from
underlying pretax earnings.
During the quarter, Molson Coors special items resulted in a $1.3
million pretax charge, primarily driven by legal costs related to the
planned liquidation of our joint venture in China and special
termination benefit costs in Canada.
Other non-core items resulted in a $6.0 million pretax charge, which was
due to a $3.9 million unrealized loss primarily related to fair value
and foreign exchange movements of our 500 million Euro convertible note
and $2.1 million of acquisition and integration costs.
2013 Second Quarter 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 2013 second quarter results. The Company will
provide a live webcast of the earnings call.
The Company will also host an online, real-time webcast of an Investor
Relations Follow-up Session with financial analysts and institutional
investors 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 November 6, 2013. The Company will post this release and
related financial statements on its website today.
Footnotes:
(1) The Company calculates non-GAAP underlying after-tax
income, underlying EBITDA and underlying free cash flow by excluding
special and other non-core items from the nearest U.S. GAAP performance
measure, which is net income from continuing operations attributable to
MCBC for both underlying after-tax income and underlying EBITDA and net
cash provided by operating activities for underlying free cash flow. For
further details regarding these adjustments, please see the section
“Special and Other Non-Core Items,” along with tables for
reconciliations to the nearest U.S. GAAP measures. Unless otherwise
indicated, all $ amounts are in U.S. Dollars and all quarterly
comparative results are for the Company’s fiscal second quarter ended
June 29, 2013, compared to the fiscal second quarter ended June 30,
2012. Additionally, all per-hectoliter calculations exclude contract
brewing and non-owned factored beverage volume in the denominator but
include the financial impact of these sales in the numerator, unless
otherwise indicated.
(2) 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, is reflected in
“Equity Income in MillerCoors.” This release includes reconciliation
from MillerCoors Net Income to Molson Coors Brewing Company Equity
Income in MillerCoors and Non-GAAP U.S. Segment Underlying Pretax Income
(see Table 6).
(3) Unless otherwise indicated, all $ amounts are in U.S.
Dollars, and quarterly comparative results are for Europe’s actual
fiscal second quarter ended June 29, 2013, compared to the pro forma
fiscal second quarter ended June 30, 2012. Pro forma amounts include the
actual results of operations for the U.K. combined with the actual
results of operations for Central Europe for the period of June 15,
2012, through June 30, 2012, and pro forma results of operations for
Central Europe, excluding the Central Europe global export and license
business, for the period prior to June 15, 2012. The pro forma
statements of operations include adjustments directly attributable to
the acquisition of StarBev.
(4) Beginning July 1, 2012, our Central Europe export and
license business (“Central Europe export”), is reported in our MCI
segment. For periods prior to this date, this business was included with
the Central Europe business, which we acquired on June 15, 2012.
Beginning December 30, 2012, with the combination of our U.K. and
Central Europe businesses, our Carling travel and export business is
reported in our Europe segment. For periods prior to this date, this
business was included within the International business.
Overview of Molson Coors
Molson Coors Brewing Company is one of the world’s largest brewers. The
Company’s operating segments include Canada, the United States, Europe,
and Molson Coors International (MCI). The Company has a diverse
portfolio of owned and partner brands, including signature brands Coors
Light, Molson Canadian, Staropramen and Carling. Molson Coors is listed
as the beverage industry sector leader on the 2012/2013 Dow Jones
Sustainability World Index (W1SGITRD), the most recognized global
benchmark of sustainability among global corporations. For more
information on Molson Coors Brewing Company, visit the company’s web
site, www.molsoncoors.com.
Forward-Looking Statements
This press release includes estimates or projections that constitute
“forward-looking statements” within the meaning of the U.S. federal
securities laws. Generally, the words “believe,” expect,”
intend,” anticipate,” “project,” “will,” and similar expressions
identify forward-looking statements, which generally are not historic in
nature. Although the Company believes that the assumptions upon
which 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 historical experience, and present projections and
expectations are disclosed in the Company’s filings with the Securities
and Exchange Commission (“SEC”). These factors include, among
others, our ability to successfully integrate our Central Europe
business, retain key employees and achieve planned cost synergies;
pension plan costs; availability or increase in the cost of packaging
materials; our ability to maintain manufacturer/distribution agreements;
impact of competitive pricing and product pressures; our ability to
implement our strategic initiatives, including executing and realizing
cost savings; changes in legal and regulatory requirements, including
the regulation of distribution systems; increase in the cost of
commodities used in the business; our ability to maintain brand image,
reputation and product quality; our ability to maintain good labor
relations; changes in our supply chain system; additional impairment
charges; the impact of climate change and the availability and quality
of water; the ability of MillerCoors to integrate operations and
technologies; lack of full-control over the operations of MillerCoors;
the ability of MillerCoors to maintain good relationships with its
distributors; and other risks discussed in our filings with the SEC,
including our Annual Report on Form 10-K for the year-ended December 29,
2012, which are available from the SEC. All forward-looking
statements in this press release are expressly qualified by such
cautionary statements and by reference to the underlying assumptions.
You should not place undue reliance on forward-looking statements, which
speak only as of the date they are made. We do not undertake to
update forward-looking statements, whether as a result of new
information, future events or otherwise.
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Reconciliations to Nearest U.S. GAAP
Measure
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
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|
|
|
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Table 1: 2013 Second Quarter Underlying After-Tax
Income
|
|
|
|
|
(After-Tax Income From Continuing Operations, Excluding Special
and Other Non-Core Items)
|
|
($ In Millions, Except Per Share Data)
|
|
|
|
|
|
|
2nd Q
|
|
|
2013
|
|
2012
|
U.S. GAAP: Income from
continuing operations attributable to MCBC, net of tax:
|
|
$
|
276.7
|
|
|
$
|
104.3
|
|
Per diluted share:
|
|
$
|
1.50
|
|
|
$
|
0.57
|
|
Add back/(less):
|
|
|
|
|
Pretax special items - net
|
|
|
1.3
|
|
|
|
21.2
|
|
Proportionate share of MillerCoors special items - net(1) |
|
|
-
|
|
|
|
(1.0
|
)
|
Acquisition, integration and financing related costs(2) |
|
|
2.1
|
|
|
|
154.7
|
|
Unrealized mark-to-market (gains) and losses(3) |
|
|
3.9
|
|
|
|
3.5
|
|
Other non-core items(4) |
|
|
-
|
|
|
|
0.5
|
|
Noncontrolling interest effect of special items
|
|
|
-
|
|
|
|
(5.1
|
)
|
Tax effects related to special and other non-core items
|
|
|
(5.4
|
)
|
|
|
(28.0
|
)
|
Non-GAAP: Underlying
after-tax income:
|
|
$
|
278.6
|
|
|
$
|
250.1
|
|
Per diluted share:
|
|
$
|
1.51
|
|
|
$
|
1.38
|
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Notes:
|
|
|
|
|
(1) Included in Equity Income in MillerCoors, but
excluded from non-GAAP underlying pretax income.
|
(2) In Q2 2013, $2.1 million loss included in Marketing,
General and Administrative expenses. In Q2 2012, $70.9 million loss
included in Other Income (Expense), net, $8.6 million loss included
in Cost of Goods Sold, $25.3 million loss in Marketing, General and
Administrative expenses, and $49.9 million loss included in Interest
Expense.
|
(3) In Q2 2013, $0.9 million loss included in Cost of
Goods Sold, ($3.2 million) gain included in Interest Expense, and
$6.2 million loss included in Other Income (Expense), net. In Q2
2012, ($1.5 million) gain included in Cost of Goods Sold, $5.6
million loss included in Interest Expense, and ($0.6 million) gain
included in Other Income (Expense), net.
|
(4) Included in Marketing, General and Administrative
expenses
|
|
|
|
|
|
|
|
|
|
|
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|
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Molson Coors Brewing Company and Subsidiaries
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|
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|
|
|
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|
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Table 2: 2013 Second Quarter Underlying Pretax
Income
|
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|
|
|
|
|
|
|
|
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(Pretax Income From Continuing Operations, Excluding Special and
Other Non-Core Items)
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($ In Millions)
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Business
|
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Total
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Canada
|
|
U.S.
|
|
Europe
|
|
MCI
|
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Corporate
|
|
Consolidated
|
U.S. GAAP: 2013 2nd Q
Income (loss) from continuing operations before income taxes
|
|
$
|
137.3
|
|
|
$
|
172.6
|
|
|
$
|
81.6
|
|
|
$
|
(3.3
|
)
|
|
$
|
(75.8
|
)
|
|
$
|
312.4
|
|
Add back/(less):
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax special items - net
|
|
|
0.7
|
|
|
|
-
|
|
|
|
(0.3
|
)
|
|
|
0.9
|
|
|
|
-
|
|
|
|
1.3
|
|
Acquisition and integration costs(2) |
|
|
-
|
|
|
|
-
|
|
|
|
1.1
|
|
|
|
-
|
|
|
|
1.0
|
|
|
|
2.1
|
|
Unrealized mark-to-market (gains) and losses(3) |
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.9
|
|
|
|
3.9
|
|
Non-GAAP: 2013 2nd Q
underlying pretax income (loss)
|
|
$
|
138.0
|
|
|
$
|
172.6
|
|
|
$
|
82.4
|
|
|
$
|
(2.4
|
)
|
|
$
|
(70.9
|
)
|
|
$
|
319.7
|
|
Percent change 2013 2nd Q vs. 2012 2nd Q underlying pretax income
(loss)
|
|
|
(0.7
|
%)
|
|
|
(6.5
|
%)
|
|
|
72.7
|
%
|
|
|
82.1
|
%
|
|
|
(28.4
|
%)
|
|
|
5.6
|
%
|
U.S. GAAP: 2012 2nd Q
Income (loss) from continuing operations before income taxes
|
|
$
|
139.9
|
|
|
$
|
185.6
|
|
|
$
|
28.7
|
|
|
$
|
(24.3
|
)
|
|
$
|
(206.1
|
)
|
|
$
|
123.8
|
|
Add back/(less):
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax special items - net
|
|
|
(0.9
|
)
|
|
|
-
|
|
|
|
11.7
|
|
|
|
10.4
|
|
|
|
-
|
|
|
|
21.2
|
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Proportionate share of MillerCoors special items - net(1) |
|
|
-
|
|
|
|
(1.0
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1.0
|
)
|
Acquisition and integration costs(2) |
|
|
-
|
|
|
|
-
|
|
|
|
11.1
|
|
|
|
-
|
|
|
|
143.6
|
|
|
|
154.7
|
|
Unrealized mark-to-market (gains) and losses(3) |
|
|
-
|
|
|
|
-
|
|
|
|
(3.8
|
)
|
|
|
-
|
|
|
|
7.3
|
|
|
|
3.5
|
|
Other non-core items(4) |
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.5
|
|
|
|
-
|
|
|
|
0.5
|
|
Non-GAAP: 2012 2nd Q
underlying pretax income (loss)
|
|
$
|
139.0
|
|
|
$
|
184.6
|
|
|
$
|
47.7
|
|
|
$
|
(13.4
|
)
|
|
$
|
(55.2
|
)
|
|
$
|
302.7
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Included in Equity Income in MillerCoors, but
excluded from non-GAAP underlying pretax income.
|
(2) In Q2 2013, $2.1 million loss included in
Marketing, General and Administrative expenses. In Q2 2012, $70.9
million loss included in Other Income (Expense), net, $8.6 million
loss included in Cost of Goods Sold, $25.3 million loss in
Marketing, General and Administrative expenses, and $49.9 million
loss included in Interest Expense.
|
(3) In Q2 2013, $0.9 million loss included in Cost of
Goods Sold, ($3.2 million) gain included in Interest Expense, and
$6.2 million loss included in Other Income (Expense), net. In Q2
2012, ($1.5 million) gain included in Cost of Goods Sold, $5.6
million loss included in Interest Expense, and ($0.6 million) gain
included in Other Income (Expense), net.
|
(4) Included in Marketing, General and Administrative
expenses
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
|
|
|
|
|
|
|
Table 3: 2013 Second Quarter Underlying EBITDA
|
|
|
|
|
|
|
|
|
(EBITDA, Excluding Special and Other Non-Core Items)
|
|
|
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
|
|
|
|
June 29, 2013
|
|
June 30, 2012
|
|
June 29, 2013
|
|
June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP:
|
|
Net income attributable to MCBC from continuing operations
|
|
$
|
276.7
|
|
$
|
104.3
|
|
|
$
|
313.2
|
|
$
|
183.7
|
|
Add:
|
|
Net income (loss) attributable to noncontrolling interests
|
|
|
1.6
|
|
|
(6.4
|
)
|
|
|
3.0
|
|
|
(6.5
|
)
|
U.S. GAAP:
|
|
Net income (loss) from continuing operations
|
|
$
|
278.3
|
|
$
|
97.9
|
|
|
$
|
316.2
|
|
$
|
177.2
|
|
Add:
|
|
Interest expense (income), net
|
|
|
41.2
|
|
|
84.6
|
|
|
|
116.1
|
|
|
108.4
|
|
Add:
|
|
Income tax expense (benefit)
|
|
|
34.1
|
|
|
25.9
|
|
|
|
37.6
|
|
|
43.2
|
|
Add:
|
|
Depreciation and amortization
|
|
|
80.7
|
|
|
58.4
|
|
|
|
160.9
|
|
|
111.8
|
|
|
|
Adjustments to arrive at underlying EBITDA(1) |
|
|
10.0
|
|
|
124.4
|
|
|
|
2.2
|
|
|
130.3
|
|
|
|
Adjustments to arrive at underlying EBITDA related to our
investment in MillerCoors(2)
|
|
|
28.9
|
|
|
29.3
|
|
|
|
57.4
|
|
|
59.3
|
|
Non-GAAP:
|
|
Underlying EBITDA
|
|
$
|
473.2
|
|
$
|
420.5
|
|
|
$
|
690.4
|
|
$
|
630.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
(1) Includes adjustments to non-GAAP underlying income
within the table above, excluding adjustments related to interest,
taxes and depreciation and amortization, as these items are added
back in total as adjustments to net income attributable to MCBC from
continuing operations.
|
(2) Adjustments to our equity income from MillerCoors,
which include our proportional share of MillerCoors' interest,
income tax, depreciation and amortization, specials, and
amortization of the difference between the MCBC contributed cost
basis and proportional share of the underlying equity in net assets
of MillerCoors.
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
|
|
|
Table 4: Underlying Free Cash Flow --
Reconciliation to Nearest U.S. GAAP Measure
|
(In Millions)
|
|
|
|
|
|
|
|
|
Twenty-Six Weeks Ended
|
|
|
|
|
June 29, 2013
|
|
June 30, 2012
|
U.S. GAAP:
|
|
Net Cash Provided by Operating Activities
|
|
$
|
591.0
|
|
|
$
|
397.4
|
|
Less:
|
|
Additions to properties(1) |
|
|
(149.7
|
)
|
|
|
(81.4
|
)
|
Less:
|
|
Investment in MillerCoors(1) |
|
|
(615.3
|
)
|
|
|
(565.7
|
)
|
Add:
|
|
Return of capital from MillerCoors(1) |
|
|
515.2
|
|
|
|
459.9
|
|
Add:
|
|
Cash impact of Special items(2) |
|
|
17.7
|
|
|
|
2.4
|
|
Add:
|
|
Costs related to the Acquisition(3) |
|
|
6.9
|
|
|
|
109.3
|
|
Add:
|
|
MillerCoors investments in businesses(4) |
|
|
-
|
|
|
|
14.4
|
|
Non-GAAP:
|
|
Underlying Free Cash Flow
|
|
$
|
365.8
|
|
|
$
|
336.3
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
(1) Included in net cash used in investing activities.
|
|
|
|
|
(2) Included in net cash provided by operating
activities and mainly reflects restructuring costs paid.
|
(3) Included in net cash provided by operating
activities and reflects acquisition and integration costs paid.
|
(4) Amounts represent our proportionate 42% share of the
cash flow impacts.
|
|
|
|
|
|
|
|
|
|
|
|
MillerCoors LLC
|
|
|
|
|
|
|
|
|
Table 5: Underlying Net Income
|
|
|
|
|
|
|
|
|
(Net Income Attributable to MillerCoors, Excluding Special Items)
|
|
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30, 2013
|
|
June 30, 2012
|
|
June 30, 2013
|
|
June 30, 2012
|
|
|
|
|
|
|
|
|
|
U.S. GAAP: Net income
attributable to MillerCoors:
|
|
$
|
412.7
|
|
$
|
438.3
|
|
|
$
|
684.6
|
|
$
|
713.6
|
|
Add back: Special items, net
|
|
|
-
|
|
|
(2.3
|
)
|
|
|
-
|
|
|
(2.3
|
)
|
Less: Tax effect of adjustments to arrive at underlying
after-tax income
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
Non-GAAP: Underlying net
income attributable to MillerCoors:
|
|
$
|
412.7
|
|
$
|
436.0
|
|
|
$
|
684.6
|
|
$
|
711.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
|
|
|
|
|
|
|
Table 6: Reconciliation of Net Income Attributable
to MillerCoors to MCBC Underlying Equity Income in MillerCoors
(Non-GAAP)
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
|
|
June 29, 2013
|
|
June 30, 2012
|
|
June 29, 2013
|
|
June 30, 2012
|
Net Income Attributable to MillerCoors
|
|
$
|
412.7
|
|
|
$
|
438.3
|
|
|
$
|
684.6
|
|
|
$
|
713.6
|
|
Multiply: MCBC economic interest (%) in MillerCoors
|
|
|
42
|
%
|
|
|
42
|
%
|
|
|
42
|
%
|
|
|
42
|
%
|
MCBC proportionate share of MillerCoors net income
|
|
$
|
173.3
|
|
|
$
|
184.1
|
|
|
$
|
287.5
|
|
|
$
|
299.7
|
|
Add: Amortization of the difference between MCBC contributed cost
basis and the underlying equity in net assets of MillerCoors (1)
|
|
|
1.0
|
|
|
|
1.5
|
|
|
|
2.2
|
|
|
|
1.9
|
|
Add: Share-based compensation adjustment (2) |
|
|
(1.7
|
)
|
|
|
-
|
|
|
|
0.3
|
|
|
|
2.9
|
|
MCBC Equity Income in MillerCoors (U.S. GAAP)
|
|
$
|
172.6
|
|
|
$
|
185.6
|
|
|
$
|
290.0
|
|
|
$
|
304.5
|
|
Add: Proportionate share of MillerCoors special items
|
|
|
-
|
|
|
|
(1.0
|
)
|
|
|
-
|
|
|
|
(1.0
|
)
|
(Less): Tax effect on special items
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
MCBC Underlying Equity Income in MillerCoors (Non-GAAP)
|
|
$
|
172.6
|
|
|
$
|
184.6
|
|
|
$
|
290.0
|
|
|
$
|
303.5
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
(1) Our net investment in MillerCoors is based on the
carrying values of the net assets contributed to the joint venture
which is less than our proportional share of underlying equity (42%)
of MillerCoors (contributed by both Coors Brewing Company and Miller
Brewing Company) by $668.6 million as of June 29, 2013. This basis
difference, with the exception of certain non-amortizing items
(goodwill, land, etc.) is being amortized as additional equity
income over the remaining useful lives of the contributed long-lived
amortizing assets.
|
(2) The net adjustment is to eliminate all share-based
compensation impacts related to pre-existing SABMiller plc equity
awards held by former Miller Brewing Company employees now employed
by MillerCoors.
|
|
Pretax and after-tax underlying income, underlying free cash flow, and
underlying EBITDA (earnings before interest, taxes, depreciation and
amortization) should be viewed as supplements to, not substitutes for,
our results of operations and cash flow presented on the basis of
accounting principles generally accepted in the United States. Our
management uses underlying income, underlying free cash flow and
underlying EBTDA as measures of operating performance to assist in
comparing performance from period to period on a consistent basis; as
measures 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. We believe that
underlying income, underlying free cash flow and underlying EBITDA
performance are used by and are useful to investors and other users of
our financial statements in evaluating our operating and cash
performance because they provide them with additional tools to evaluate
our performance without regard to special and other non-core items,
which can vary substantially from company to company depending
upon accounting methods and book value of assets and capital structure.
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
|
|
|
Table 7: 2013 Second Quarter Worldwide Beer Volume
|
|
|
|
|
(In Millions of Hectoliters)
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|
|
|
June 29, 2013
|
|
June 30, 2012
|
|
% Change
|
|
|
|
|
|
|
|
Financial Volume:
|
|
8.751
|
|
5.799
|
|
50.9
|
%
|
Royalty Volume:
|
|
0.412
|
|
0.203
|
|
103.0
|
%
|
Owned Volume:
|
|
9.163
|
|
6.002
|
|
52.7
|
%
|
Proportionate Share of Equity Investment Sales-to-Retail(1):
|
|
7.557
|
|
7.904
|
|
(4.4
|
%)
|
Total Worldwide Beer Volume:
|
|
16.720
|
|
13.906
|
|
20.2
|
%
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
(1) Reflects the addition of Molson Coors Brewing
Company's proportionate share of equity method investments
(MillerCoors and Modelo Molson) sales-to-retail for the periods
presented.
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
|
|
|
|
|
|
|
Table 8: Condensed Consolidated Statements of
Operations
|
|
|
|
|
|
|
|
|
(In Millions, Except Per Share Data)
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
|
|
|
June 29, 2013
|
|
June 30, 2012
|
|
June 29, 2013
|
|
June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
Volume in hectoliters
|
|
|
8.751
|
|
|
|
5.799
|
|
|
|
14.501
|
|
|
|
9.404
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
1,659.7
|
|
|
$
|
1,440.9
|
|
|
$
|
2,844.5
|
|
|
$
|
2,449.0
|
|
Excise taxes
|
|
|
(481.7
|
)
|
|
|
(441.5
|
)
|
|
|
(838.0
|
)
|
|
|
(758.2
|
)
|
|
Net sales
|
|
|
1,178.0
|
|
|
|
999.4
|
|
|
|
2,006.5
|
|
|
|
1,690.8
|
|
Cost of goods sold
|
|
|
(684.1
|
)
|
|
|
(580.1
|
)
|
|
|
(1,231.2
|
)
|
|
|
(1,018.9
|
)
|
|
Gross profit
|
|
|
493.9
|
|
|
|
419.3
|
|
|
|
775.3
|
|
|
|
671.9
|
|
Marketing, general and administrative expenses
|
|
|
(304.3
|
)
|
|
|
(304.8
|
)
|
|
|
(589.6
|
)
|
|
|
(553.0
|
)
|
Special items, net
|
|
|
(1.3
|
)
|
|
|
(21.2
|
)
|
|
|
(2.8
|
)
|
|
|
(22.7
|
)
|
Equity income in MillerCoors
|
|
|
172.6
|
|
|
|
185.6
|
|
|
|
290.0
|
|
|
|
304.5
|
|
|
Operating income (loss)
|
|
|
360.9
|
|
|
|
278.9
|
|
|
|
472.9
|
|
|
|
400.7
|
|
Interest income (expense), net
|
|
|
(41.2
|
)
|
|
|
(84.6
|
)
|
|
|
(116.1
|
)
|
|
|
(108.4
|
)
|
Other income (expense), net
|
|
|
(7.3
|
)
|
|
|
(70.5
|
)
|
|
|
(3.0
|
)
|
|
|
(71.9
|
)
|
|
Income (loss) from continuing operations before income taxes
|
|
|
312.4
|
|
|
|
123.8
|
|
|
|
353.8
|
|
|
|
220.4
|
|
Income tax expense
|
|
|
(34.1
|
)
|
|
|
(25.9
|
)
|
|
|
(37.6
|
)
|
|
|
(43.2
|
)
|
|
Net Income (loss) from continuing operations
|
|
|
278.3
|
|
|
|
97.9
|
|
|
|
316.2
|
|
|
|
177.2
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
1.7
|
|
|
|
0.8
|
|
|
|
0.8
|
|
|
|
0.9
|
|
|
Net income (loss) including noncontrolling interests
|
|
|
280.0
|
|
|
|
98.7
|
|
|
|
317.0
|
|
|
|
178.1
|
|
Less: Net (income) loss attributable to noncontrolling interests
|
|
|
(1.6
|
)
|
|
|
6.4
|
|
|
|
(3.0
|
)
|
|
|
6.5
|
|
|
Net income (loss) attributable to MCBC
|
|
$
|
278.4
|
|
|
$
|
105.1
|
|
|
$
|
314.0
|
|
|
$
|
184.6
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) attributable to MCBC per share:
|
|
|
|
|
|
|
|
|
|
From continuing operations
|
|
$
|
1.51
|
|
|
$
|
0.58
|
|
|
$
|
1.72
|
|
|
$
|
1.02
|
|
|
From discontinued operations
|
|
|
0.01
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Basic net income per share
|
|
$
|
1.52
|
|
|
$
|
0.58
|
|
|
$
|
1.72
|
|
|
$
|
1.02
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) attributable to MCBC per share:
|
|
|
|
|
|
|
|
|
|
From continuing operations
|
|
$
|
1.50
|
|
|
$
|
0.57
|
|
|
$
|
1.71
|
|
|
$
|
1.01
|
|
|
From discontinued operations
|
|
|
0.01
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Diluted net income per share
|
|
$
|
1.51
|
|
|
$
|
0.57
|
|
|
$
|
1.71
|
|
|
$
|
1.01
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - basic
|
|
|
182.9
|
|
|
|
180.8
|
|
|
|
182.3
|
|
|
|
180.6
|
|
Weighted average shares - diluted
|
|
|
184.1
|
|
|
|
181.6
|
|
|
|
183.5
|
|
|
|
181.6
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
$
|
0.64
|
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to MCBC
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations, net of tax
|
|
$
|
276.7
|
|
|
$
|
104.3
|
|
|
$
|
313.2
|
|
|
$
|
183.7
|
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
1.7
|
|
|
|
0.8
|
|
|
|
0.8
|
|
|
|
0.9
|
|
|
Net income (loss) attributable to MCBC
|
|
$
|
278.4
|
|
|
$
|
105.1
|
|
|
$
|
314.0
|
|
|
$
|
184.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
|
|
|
|
|
Table 9: Canada Segment Results of Operations
|
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
|
|
June 29, 2013
|
|
June 30, 2012
|
|
June 29, 2013
|
|
June 30, 2012
|
|
|
|
|
|
|
|
|
|
Volume in hectoliters
|
|
|
2.349
|
|
|
|
2.411
|
|
|
|
4.003
|
|
|
|
4.097
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
735.8
|
|
|
$
|
761.9
|
|
|
$
|
1,257.8
|
|
|
$
|
1,289.5
|
|
Excise taxes
|
|
|
(177.6
|
)
|
|
|
(179.0
|
)
|
|
|
(304.0
|
)
|
|
|
(304.3
|
)
|
Net sales
|
|
|
558.2
|
|
|
|
582.9
|
|
|
|
953.8
|
|
|
|
985.2
|
|
Cost of goods sold
|
|
|
(308.4
|
)
|
|
|
(301.9
|
)
|
|
|
(557.5
|
)
|
|
|
(544.3
|
)
|
Gross profit
|
|
|
249.8
|
|
|
|
281.0
|
|
|
|
396.3
|
|
|
|
440.9
|
|
Marketing, general and administrative expenses
|
|
|
(111.8
|
)
|
|
|
(141.4
|
)
|
|
|
(220.8
|
)
|
|
|
(254.4
|
)
|
Special items, net
|
|
|
(0.7
|
)
|
|
|
0.9
|
|
|
|
(2.8
|
)
|
|
|
(1.2
|
)
|
Operating income (loss)
|
|
|
137.3
|
|
|
|
140.5
|
|
|
|
172.7
|
|
|
|
185.3
|
|
Other income (expense), net
|
|
|
-
|
|
|
|
(0.6
|
)
|
|
|
1.0
|
|
|
|
(1.5
|
)
|
Income (loss) before income taxes
|
|
$
|
137.3
|
|
|
$
|
139.9
|
|
|
$
|
173.7
|
|
|
$
|
183.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
Table 10: PRO FORMA Europe Results of Operations
|
|
|
|
|
|
|
|
|
(See footnote 3 on page 5)
|
|
|
|
|
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|
June 29, 2013
|
|
June 30, 2012
|
|
|
Actual
|
|
Actual - UK
|
|
Actual - CE(1) |
Pro Forma - CE(2) |
Total - CE(3) |
|
Pro Forma Europe Combined
|
|
|
|
|
|
|
|
|
|
|
|
Volume in hectoliters (4) |
|
|
6.138
|
|
|
|
2.220
|
|
|
|
0.911
|
|
|
3.135
|
|
|
4.046
|
|
|
|
6.266
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales (4) |
|
$
|
882.3
|
|
|
$
|
568.3
|
|
|
$
|
71.9
|
|
$
|
247.3
|
|
$
|
319.2
|
|
|
$
|
887.5
|
|
Excise taxes
|
|
|
(296.1
|
)
|
|
|
(242.1
|
)
|
|
|
(14.6
|
)
|
|
(53.5
|
)
|
|
(68.1
|
)
|
|
|
(310.2
|
)
|
Net sales (4) |
|
|
586.2
|
|
|
|
326.2
|
|
|
|
57.3
|
|
|
193.8
|
|
|
251.1
|
|
|
|
577.3
|
|
Cost of goods sold
|
|
|
(354.6
|
)
|
|
|
(220.9
|
)
|
|
|
(37.0
|
)
|
|
(101.5
|
)
|
|
(138.5
|
)
|
|
|
(359.4
|
)
|
Gross profit
|
|
|
231.6
|
|
|
|
105.3
|
|
|
|
20.3
|
|
|
92.3
|
|
|
112.6
|
|
|
|
217.9
|
|
Marketing, general and administrative expenses
|
|
|
(150.2
|
)
|
|
|
(78.2
|
)
|
|
|
(12.3
|
)
|
|
(56.5
|
)
|
|
(68.8
|
)
|
|
|
(147.0
|
)
|
Special items, net
|
|
|
0.3
|
|
|
|
(11.7
|
)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
(11.7
|
)
|
Operating income (loss)
|
|
|
81.7
|
|
|
|
15.4
|
|
|
|
8.0
|
|
|
35.8
|
|
|
43.8
|
|
|
|
59.2
|
|
Interest income, net
|
|
|
1.2
|
|
|
|
1.4
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
1.4
|
|
Other income (expense), net
|
|
|
(1.3
|
)
|
|
|
(0.5
|
)
|
|
|
4.4
|
|
|
(0.4
|
)
|
|
4.0
|
|
|
|
3.5
|
|
Income (loss) before income taxes
|
|
$
|
81.6
|
|
|
$
|
16.3
|
|
|
$
|
12.4
|
|
$
|
35.4
|
|
$
|
47.8
|
|
|
$
|
64.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
(1) Includes actual results from the acquisition date of
June 15, 2012, through June 30, 2012.
|
(2) Includes pre-acquisition results for StarBev from
April 1, 2012, through June 15, 2012, and pro forma adjustments.
|
(3) Includes actual results from the acquisition date
of June 15, 2012, through June 30, 2012, combined with pro forma
results from April 1, 2012, through June 15, 2012.
|
(4) Reflects gross segment sales and for Q2 2013
includes intercompany sales to MCI of 0.016 million hectoliters
and $1.4 million of net sales. Q2 2012 includes intercompany sales
to MCI of 0.067 million hectoliters and $4.5 million of net sales.
The offset is included within MCI cost of goods sold. These
amounts are eliminated in the consolidated totals.
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
|
|
|
|
|
|
|
|
Table 11: PRO FORMA Europe Results of Operations
|
|
|
|
|
|
|
|
(See footnote 3 on page 5)
|
|
|
|
|
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-Six Weeks Ended
|
|
|
June 29, 2013
|
|
June 30, 2012
|
|
|
Actual
|
|
Actual - UK
|
|
Actual - CE(1) |
Pro Forma - CE(2) |
Total - CE(3) |
|
Pro Forma Europe Combined
|
|
|
|
|
|
|
|
|
|
|
|
Volume in hectoliters (4) |
|
|
10.006
|
|
|
|
3.959
|
|
|
|
0.911
|
|
|
5.303
|
|
|
6.214
|
|
|
|
10.173
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales (4) |
|
$
|
1,514.7
|
|
|
$
|
1,018.3
|
|
|
$
|
71.9
|
|
$
|
420.5
|
|
$
|
492.4
|
|
|
$
|
1,510.7
|
|
Excise taxes
|
|
|
(522.1
|
)
|
|
|
(428.7
|
)
|
|
|
(14.6
|
)
|
|
(92.8
|
)
|
|
(107.4
|
)
|
|
|
(536.1
|
)
|
Net sales (4) |
|
|
992.6
|
|
|
|
589.6
|
|
|
|
57.3
|
|
|
327.7
|
|
|
385.0
|
|
|
|
974.6
|
|
Cost of goods sold
|
|
|
(635.8
|
)
|
|
|
(401.9
|
)
|
|
|
(37.0
|
)
|
|
(194.2
|
)
|
|
(231.2
|
)
|
|
|
(633.1
|
)
|
Gross profit
|
|
|
356.8
|
|
|
|
187.7
|
|
|
|
20.3
|
|
|
133.5
|
|
|
153.8
|
|
|
|
341.5
|
|
Marketing, general and administrative expenses
|
|
|
(278.9
|
)
|
|
|
(162.0
|
)
|
|
|
(12.3
|
)
|
|
(108.8
|
)
|
|
(121.1
|
)
|
|
|
(283.1
|
)
|
Special items, net
|
|
|
1.2
|
|
|
|
(10.0
|
)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
(10.0
|
)
|
Operating income (loss)
|
|
|
79.1
|
|
|
|
15.7
|
|
|
|
8.0
|
|
|
24.7
|
|
|
32.7
|
|
|
|
48.4
|
|
Interest income, net
|
|
|
2.4
|
|
|
|
2.9
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
2.9
|
|
Other income (expense), net
|
|
|
(3.6
|
)
|
|
|
(1.0
|
)
|
|
|
4.4
|
|
|
(0.6
|
)
|
|
3.8
|
|
|
|
2.8
|
|
Income (loss) before income taxes
|
|
$
|
77.9
|
|
|
$
|
17.6
|
|
|
$
|
12.4
|
|
$
|
24.1
|
|
$
|
36.5
|
|
|
$
|
54.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
(1) Includes actual results from the acquisition date of
June 15, 2012, through June 30, 2012.
|
(2) Includes pre-acquisition results for StarBev from
January 1, 2012, through June 15, 2012, and pro forma adjustments.
|
(3) Includes actual results from the acquisition date
of June 15, 2012, through June 30, 2012, combined with pro forma
results from January 1, 2012, through June 15, 2012.
|
(4) Reflects gross segment sales and for the first half
of 2013 includes intercompany sales to MCI of 0.037 million
hectoliters and $2.2 million of net sales. The first half of 2012
includes intercompany sales to MCI of 0.111 million hectoliters
and $7.2 million of net sales. The offset is included within MCI
cost of goods sold. These amounts are eliminated in the
consolidated totals.
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
|
|
|
|
|
|
Table 12: Molson Coors International Results of
Operations
|
|
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
|
|
June 29, 2013
|
|
June 30, 2012
|
|
June 29, 2013
|
|
June 30, 2012
|
|
|
|
|
|
|
|
|
|
Volume in hectoliters
|
|
|
0.280
|
|
|
|
0.324
|
|
|
|
0.529
|
|
|
|
0.548
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
42.7
|
|
|
$
|
42.9
|
|
|
$
|
73.6
|
|
|
$
|
75.8
|
|
Excise taxes
|
|
|
(8.0
|
)
|
|
|
(5.8
|
)
|
|
|
(11.9
|
)
|
|
|
(10.6
|
)
|
Net Sales
|
|
|
34.7
|
|
|
|
37.1
|
|
|
|
61.7
|
|
|
|
65.2
|
|
Cost of goods sold (1) |
|
|
(21.7
|
)
|
|
|
(25.8
|
)
|
|
|
(39.2
|
)
|
|
|
(44.3
|
)
|
Gross profit
|
|
|
13.0
|
|
|
|
11.3
|
|
|
|
22.5
|
|
|
|
20.9
|
|
Marketing, general and administrative expenses
|
|
|
(15.5
|
)
|
|
|
(25.4
|
)
|
|
|
(31.1
|
)
|
|
|
(43.7
|
)
|
Special items, net
|
|
|
(0.9
|
)
|
|
|
(10.4
|
)
|
|
|
(0.9
|
)
|
|
|
(10.4
|
)
|
Operating income (loss)
|
|
|
(3.4
|
)
|
|
|
(24.5
|
)
|
|
|
(9.5
|
)
|
|
|
(33.2
|
)
|
Other income (expense), net
|
|
|
0.1
|
|
|
|
0.2
|
|
|
|
0.1
|
|
|
|
0.3
|
|
Income (loss) before income taxes
|
|
$
|
(3.3
|
)
|
|
$
|
(24.3
|
)
|
|
$
|
(9.4
|
)
|
|
$
|
(32.9
|
)
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
(1) Reflects gross segment amounts and for Q2 2013 and Q2
2012 includes intercompany cost of goods sold from Europe of $1.4
million and $4.5 million, respectively. The first half of 2013 and
2012 includes intercompany cost of goods sold from Europe of $2.2
million and $7.2 million, respectively. The offset is included
within Europe net sales. These amounts are eliminated in the
consolidated totals.
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
|
|
|
|
Table 13: Corporate Results of Operations
|
|
|
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
|
|
June 29, 2013
|
|
June 30, 2012
|
|
June 29, 2013
|
|
June 30, 2012
|
|
|
|
|
|
|
|
|
|
Volume in hectoliters
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
0.3
|
|
|
$
|
0.4
|
|
|
$
|
0.6
|
|
|
$
|
0.7
|
|
Excise taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Sales
|
|
|
0.3
|
|
|
|
0.4
|
|
|
|
0.6
|
|
|
|
0.7
|
|
Cost of goods sold
|
|
|
(0.8
|
)
|
|
|
1.0
|
|
|
|
(0.9
|
)
|
|
|
1.4
|
|
Gross profit
|
|
|
(0.5
|
)
|
|
|
1.4
|
|
|
|
(0.3
|
)
|
|
|
2.1
|
|
Marketing, general and administrative expenses
|
|
|
(26.8
|
)
|
|
|
(47.5
|
)
|
|
|
(58.8
|
)
|
|
|
(80.6
|
)
|
Special items, net
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.3
|
)
|
|
|
(1.1
|
)
|
Operating income (loss)
|
|
|
(27.3
|
)
|
|
|
(46.1
|
)
|
|
|
(59.4
|
)
|
|
|
(79.6
|
)
|
Interest expense, net(1) |
|
|
(42.4
|
)
|
|
|
(86.0
|
)
|
|
|
(118.5
|
)
|
|
|
(111.3
|
)
|
Other income (expense), net
|
|
|
(6.1
|
)
|
|
|
(74.0
|
)
|
|
|
(0.5
|
)
|
|
|
(74.1
|
)
|
Income (loss) before income taxes
|
|
$
|
(75.8
|
)
|
|
$
|
(206.1
|
)
|
|
$
|
(178.4
|
)
|
|
$
|
(265.0
|
)
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
(1) Reflects acquisition-related interest expense of
$17.6 million and $20.8 million on a U.S. GAAP basis and an
underlying basis, respectively, for Q2 2013 and $68.3 million and
$41.8 million on a U.S. GAAP basis and an underlying basis,
respectively, for the first half of 2013. Beginning July 1, 2012,
interest income and expense related to our Central Europe segment is
reflected within Corporate results consistent with our other
segments, and this amount is $0.3 million of net income on both a
U.S. GAAP basis and an underlying basis for Q2 2013 and $0.9 million
of net income on both a U.S. GAAP basis and an underlying basis for
the first half of 2013.
|
|
|
|
|
|
|
|
|
|
MillerCoors LLC (1) |
|
|
|
|
|
|
|
|
Table 14: Results of Operations
|
|
|
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30, 2013
|
|
June 30, 2012
|
|
June 30, 2013
|
|
June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume in hectoliters(2) |
|
|
20.512
|
|
|
|
21.697
|
|
|
|
37.544
|
|
|
|
39.056
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
2,484.4
|
|
|
$
|
2,567.2
|
|
|
$
|
4,541.1
|
|
|
$
|
4,601.8
|
|
Excise taxes
|
|
|
(325.4
|
)
|
|
|
(343.2
|
)
|
|
|
(593.8
|
)
|
|
|
(618.0
|
)
|
Net sales
|
|
|
2,159.0
|
|
|
|
2,224.0
|
|
|
|
3,947.3
|
|
|
|
3,983.8
|
|
Cost of goods sold
|
|
|
(1,270.1
|
)
|
|
|
(1,311.8
|
)
|
|
|
(2,358.8
|
)
|
|
|
(2,381.8
|
)
|
Gross profit
|
|
|
888.9
|
|
|
|
912.2
|
|
|
|
1,588.5
|
|
|
|
1,602.0
|
|
Marketing, general and administrative expenses
|
|
|
(471.0
|
)
|
|
|
(470.1
|
)
|
|
|
(896.1
|
)
|
|
|
(880.9
|
)
|
Special items, net
|
|
|
-
|
|
|
|
2.3
|
|
|
|
-
|
|
|
|
2.3
|
|
Operating income
|
|
|
417.9
|
|
|
|
444.4
|
|
|
|
692.4
|
|
|
|
723.4
|
|
Interest income (expense), net
|
|
|
(0.4
|
)
|
|
|
(0.4
|
)
|
|
|
(0.9
|
)
|
|
|
(0.7
|
)
|
Other income (expense), net
|
|
|
0.5
|
|
|
|
1.5
|
|
|
|
1.3
|
|
|
|
3.1
|
|
Income before income taxes
|
|
|
418.0
|
|
|
|
445.5
|
|
|
|
692.8
|
|
|
|
725.8
|
|
Income tax expense
|
|
|
(1.3
|
)
|
|
|
(1.8
|
)
|
|
|
(1.7
|
)
|
|
|
(2.5
|
)
|
Net income
|
|
|
416.7
|
|
|
|
443.7
|
|
|
|
691.1
|
|
|
|
723.3
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
(4.0
|
)
|
|
|
(5.4
|
)
|
|
|
(6.5
|
)
|
|
|
(9.7
|
)
|
Net income attributable to MillerCoors
|
|
$
|
412.7
|
|
|
$
|
438.3
|
|
|
$
|
684.6
|
|
|
$
|
713.6
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
(1) Economic ownership of MillerCoors is 58% held by
SABMiller and 42% held by Molson Coors. See Table 6 in the release
for a reconciliation from Net Income Attributable to MillerCoors to
Molson Coors Equity Income in MillerCoors, and to U.S. Segment
Underlying Pretax Income (Non-GAAP).
|
(2) Includes contract brewing and
company-owned-distributor sales which are excluded from our
worldwide beer volume calculation.
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
|
|
|
Table 15: Condensed Consolidated Balance Sheets
|
|
|
|
|
(In Millions)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
June 29, 2013
|
|
December 29, 2012
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
801.6
|
|
|
$
|
624.0
|
|
Accounts receivable, net
|
|
|
693.4
|
|
|
|
660.5
|
|
Other receivables, net
|
|
|
109.8
|
|
|
|
92.9
|
|
Inventories:
|
|
|
|
|
Finished
|
|
|
178.5
|
|
|
|
139.9
|
|
In process
|
|
|
28.3
|
|
|
|
20.3
|
|
Raw materials
|
|
|
41.8
|
|
|
|
43.5
|
|
Packaging materials
|
|
|
16.8
|
|
|
|
10.2
|
|
Total inventories
|
|
|
265.4
|
|
|
|
213.9
|
|
Other current assets, net
|
|
|
134.7
|
|
|
|
117.5
|
|
Deferred tax assets
|
|
|
66.4
|
|
|
|
39.2
|
|
Total current assets
|
|
|
2,071.3
|
|
#
|
|
1,748.0
|
|
|
|
|
|
|
Properties, net
|
|
|
1,910.5
|
|
|
|
1,995.9
|
|
Goodwill
|
|
|
2,325.5
|
|
|
|
2,453.1
|
|
Other intangibles, net
|
|
|
6,947.4
|
|
|
|
7,234.8
|
|
Investment in MillerCoors
|
|
|
2,516.6
|
|
|
|
2,431.8
|
|
Deferred tax assets
|
|
|
119.3
|
|
|
|
125.4
|
|
Notes receivable, net
|
|
|
24.3
|
|
|
|
26.3
|
|
Other assets
|
|
|
202.0
|
|
|
|
196.9
|
|
Total assets
|
|
$
|
16,116.9
|
|
|
$
|
16,212.2
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
Accounts payable and other current liabilities
|
|
$
|
1,363.1
|
|
|
$
|
1,186.9
|
|
Derivative hedging instruments
|
|
|
164.9
|
|
|
|
6.0
|
|
Deferred tax liabilities
|
|
|
112.3
|
|
|
|
152.3
|
|
Current potion of long-term debt and short-term borrowings
|
|
|
1,272.4
|
|
|
|
1,245.6
|
|
Discontinued operations
|
|
|
7.2
|
|
|
|
7.9
|
|
Total current liabilities
|
|
|
2,919.9
|
|
|
|
2,598.7
|
|
|
|
|
|
|
Long-term debt
|
|
|
3,295.7
|
|
|
|
3,422.5
|
|
Pension and post-retirement benefits
|
|
|
745.7
|
|
|
|
833.0
|
|
Derivative hedging instruments
|
|
|
1.3
|
|
|
|
222.2
|
|
Deferred tax liabilities
|
|
|
937.9
|
|
|
|
948.5
|
|
Unrecognized tax benefits
|
|
|
80.5
|
|
|
|
81.8
|
|
Other liabilities
|
|
|
106.8
|
|
|
|
93.9
|
|
Discontinued operations
|
|
|
18.3
|
|
|
|
20.0
|
|
Total liabilities
|
|
|
8,106.1
|
|
|
|
8,220.6
|
|
|
|
|
|
|
Preferred stock, no par value (authorized: 25.0 shares; none issued)
|
|
|
-
|
|
|
|
-
|
|
Class A common stock, $0.01 par value per share (authorized: 500.0
shares; issued and outstanding: 2.6 shares and 2.6 shares,
respectively)
|
|
|
-
|
|
|
|
-
|
|
Class B common stock, $0.01 par value per share (authorized: 500.0
shares; issued: 166.3 shares and 164.2 shares, respectively)
|
|
|
1.7
|
|
|
|
1.6
|
|
Class A exchangeable shares, no par value (issued and outstanding:
2.9 shares and 2.9 shares, respectively)
|
|
|
108.5
|
|
|
|
110.2
|
|
Class B exchangeable shares, no par value (issued and outstanding:
19.1 shares and 19.3 shares, respectively)
|
|
|
720.5
|
|
|
|
724.4
|
|
Paid-in capital
|
|
|
3,709.5
|
|
|
|
3,623.6
|
|
Retained earnings
|
|
|
4,097.7
|
|
|
|
3,900.5
|
|
Accumulated other comprehensive income (loss)
|
|
|
(332.3
|
)
|
|
|
(72.3
|
)
|
Class B common stock held in treasury at cost (7.5 shares and 7.5
shares, respectively)
|
|
|
(321.1
|
)
|
|
|
(321.1
|
)
|
Total Molson Coors Brewing Company stockholders' equity
|
|
|
7,984.5
|
|
|
|
7,966.9
|
|
Noncontrolling interests
|
|
|
26.3
|
|
|
|
24.7
|
|
Total equity
|
|
|
8,010.8
|
|
|
|
7,991.6
|
|
Total liabilities and equity
|
|
$
|
16,116.9
|
|
|
$
|
16,212.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
|
|
|
|
Table 16: Condensed Consolidated Statements of Cash
Flows
|
|
|
|
|
|
(In Millions)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-Six Weeks Ended
|
|
|
June 29, 2013
|
|
|
June 30, 2012
|
Cash flows from operating activities:
|
|
|
|
|
|
Net income (loss) including noncontrolling interests
|
|
$
|
317.0
|
|
|
|
$
|
178.1
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
Depreciation and amortization
|
|
|
160.9
|
|
|
|
|
111.8
|
|
Amortization of debt issuance costs and discounts
|
|
|
14.2
|
|
|
|
|
25.0
|
|
Share-based compensation
|
|
|
15.4
|
|
|
|
|
10.1
|
|
Loss on sale or impairment of properties and intangibles
|
|
|
6.3
|
|
|
|
|
21.1
|
|
Deferred income taxes
|
|
|
13.1
|
|
|
|
|
5.5
|
|
Equity income in MillerCoors
|
|
|
(290.0
|
)
|
|
|
|
(304.5
|
)
|
Distributions from MillerCoors
|
|
|
290.0
|
|
|
|
|
304.5
|
|
Equity in net income of other unconsolidated affiliates
|
|
|
(7.8
|
)
|
|
|
|
(6.5
|
)
|
Distributions from other unconsolidated affiliates
|
|
|
13.0
|
|
|
|
|
11.8
|
|
Excess tax benefits from share-based compensation
|
|
|
(5.4
|
)
|
|
|
|
(3.5
|
)
|
Unrealized (gain) loss on foreign currency fluctuations and
derivative instruments
|
|
|
28.9
|
|
|
|
|
(4.1
|
)
|
Change in current assets and liabilities (net of assets acquired
and liabilities assumed in business combinations) and other:
|
|
|
36.2
|
|
|
|
|
49.0
|
|
(Gain) loss from discontinued operations
|
|
|
(0.8
|
)
|
|
|
|
(0.9
|
)
|
Net cash provided by operating activities
|
|
|
591.0
|
|
|
|
|
397.4
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Additions to properties
|
|
|
(149.7
|
)
|
|
|
|
(81.4
|
)
|
Proceeds from sales of properties and other long-lived assets
|
|
|
4.9
|
|
|
|
|
1.3
|
|
Acquisition of businesses, net of cash acquired
|
|
|
-
|
|
|
|
|
(2,257.4
|
)
|
Proceeds from sale of business
|
|
|
2.0
|
|
|
|
|
-
|
|
Investment in MillerCoors
|
|
|
(615.3
|
)
|
|
|
|
(565.7
|
)
|
Return of capital from MillerCoors
|
|
|
515.2
|
|
|
|
|
459.9
|
|
Payments on settlement of derivative instruments
|
|
|
-
|
|
|
|
|
(110.6
|
)
|
Investment in and advances to an unconsolidated affiliate
|
|
|
(2.8
|
)
|
|
|
|
(3.7
|
)
|
Loan repayments
|
|
|
4.5
|
|
|
|
|
9.5
|
|
Loan advances
|
|
|
(3.7
|
)
|
|
|
|
(4.6
|
)
|
Net cash used in investing activities
|
|
|
(244.9
|
)
|
|
|
|
(2,552.7
|
)
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Exercise of stock options under equity compensation plans
|
|
|
63.1
|
|
|
|
|
20.8
|
|
Excess tax benefits from share-based compensation
|
|
|
5.4
|
|
|
|
|
3.5
|
|
Dividends paid
|
|
|
(116.8
|
)
|
|
|
|
(115.9
|
)
|
Dividends paid to noncontrolling interests holders
|
|
|
(1.2
|
)
|
|
|
|
(2.9
|
)
|
Payments for purchase of noncontrolling interest
|
|
|
(0.2
|
)
|
|
|
|
-
|
|
Debt issuance costs
|
|
|
(0.2
|
)
|
|
|
|
(39.2
|
)
|
Proceeds from issuances of long-term debt
|
|
|
-
|
|
|
|
|
2,195.4
|
|
Payments on long-term debt and capital lease obligations
|
|
|
(52.4
|
)
|
|
|
|
(44.8
|
)
|
Payments on debt assumed in acquisition
|
|
|
-
|
|
|
|
|
(424.3
|
)
|
Proceeds from short-term borrowings
|
|
|
9.3
|
|
|
|
|
2.5
|
|
Payments on short-term borrowings
|
|
|
(15.1
|
)
|
|
|
|
(13.5
|
)
|
Payments on settlement of derivative instruments
|
|
|
(35.1
|
)
|
|
|
|
(4.0
|
)
|
Net proceeds from (payments on) revolving credit facilities
|
|
|
(2.9
|
)
|
|
|
|
3.9
|
|
Change in overdraft balances and other
|
|
|
2.0
|
|
|
|
|
2.1
|
|
Net cash (used in) provided by financing activities
|
|
|
(144.1
|
)
|
|
|
|
1,583.6
|
|
|
|
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
202.0
|
|
|
|
|
(571.7
|
)
|
Effect of foreign exchange rate changes on cash and cash equivalents
|
|
|
(24.4
|
)
|
|
|
|
8.8
|
|
Balance at beginning of year
|
|
|
624.0
|
|
|
|
|
1,078.9
|
|
Balance at end of period
|
|
$
|
801.6
|
|
|
|
$
|
516.0
|
|
|
|
|
|
|
|
|
|
|
|
Copyright Business Wire 2013