Molson Coors Brewing Company (NYSE: TAP; TSX: TPX) today reported a
115.2 percent increase in underlying after-tax income for the first
quarter 2014, driven by improved performance in all of its businesses,
along with lower interest expense versus a year ago. U.S. GAAP net
income from continuing operations attributable to MCBC increased $135.9
million due to strong underlying profit performance and an $81.2 million
positive change in special and other non-core items in the quarter. (See
Special and Other Non-Core Items below for details.) Worldwide beer
volume decreased 0.1 percent, and net sales declined 1.5 percent in the
first quarter of 2014.
Molson Coors president and chief executive officer Peter Swinburn said,
“In the 1st quarter, Molson Coors more than doubled
underlying after-tax income, grew underlying EBITDA more than 20%, and
expanded gross, operating and after-tax margins. Underlying earnings per
share also more than doubled. U.S. GAAP after-tax earnings increased
more than $135 million versus a year ago. The improvement across our
company was consistent, with each of our businesses achieving improved
operating margins, pretax earnings and EBITDA performance in the
quarter.”
Swinburn added, “Our strong focus on our core brands, portfolio shift to
above premium and value creating innovation is paying dividends. This
strategy is underpinned by our Profit After Capital Charge, or PACC
model, which aligns our entire team and each of our cash-use decisions
with our priorities."
Underlying EBITDA and Free Cash Flow
Underlying EBITDA reached $251.2 million in the first quarter, a 20.4
percent increase from a year ago.
Underlying free cash flow through the first quarter of 2014 was a cash
use of $64.6 million due to normal seasonality. This represents an
increase in cash used of $15.7 million from the prior year, driven by
timing of working capital changes, partially offset by higher net income.
Foreign Exchange
The Company’s first quarter underlying consolidated pretax income
includes a slight positive impact from foreign currency movements.
Foreign currency was $2.8 million positive in Europe and $2.4 million
negative in Canada.
Effective Income Tax Rates
The Company’s first quarter effective income tax rate was 3 percent on a
reported basis and 5 percent on an underlying basis, with the difference
driven by special and other non-core items. On an underlying basis, our
effective tax rate was approximately 6 percentage points lower than
prior year primarily due to the release of valuation allowances in
Europe and the favorable resolution of uncertain tax positions in the
quarter.
Debt
Total debt at the end of the first quarter was $3.79 billion, and cash
and cash equivalents totaled $337.6 million, resulting in net debt of
$3.46 billion, which is $685 million lower than the prior year.
First Quarter Business Segment Results
The following are the Company’s first quarter 2014 results by business
segment:
United States Business (MillerCoors)(2)
Molson Coors underlying U.S. segment equity income increased 4.9 percent
to $123.1 million in the quarter.
MillerCoors Operating and Financial Highlights
MillerCoors underlying net income for the quarter increased 7.4 percent
to $291.9 million, driven by positive pricing and sales mix, cost
savings, and lower marketing spending primarily due to timing
differences versus last year.
MillerCoors domestic sales to retailers (STRs) declined 3.4 percent for
the quarter. Domestic sales to wholesalers (STWs) decreased 3.0 percent.
Domestic net revenue per hectoliter, which excludes contract brewing and
company-owned-distributor sales, grew 3.3 percent primarily due to
favorable net pricing and positive brand mix. Total company net revenue
per hectoliter, including contract brewing and company-owned distributor
sales, increased 3.4 percent. Third-party contract brewing volumes
decreased 4.5 percent.
Cost of goods sold (COGS) per hectoliter increased 3.8 percent, driven
by commodity and brewery inflation, lower volume and higher costs
associated with brand innovation. Marketing, general and administrative
(MG&A) expense decreased 6.4 percent, driven primarily by timing of
media investments and lower employee-related expenses.
Depreciation and amortization expenses for MillerCoors in the first
quarter were $79.1 million, and additions to tangible and intangible
assets totaled $107.2 million.
Canada Business
Canada underlying pretax income increased 20.5 percent to $35.3 million
in the quarter and increased 28.7 percent on a constant currency basis.
Higher net pricing and lower MG&A expense drove the increase in Canada,
despite lower volume in the quarter. A decrease in the Canadian dollar
versus the U.S. dollar resulted in a $2.4 million negative foreign
exchange impact on underlying pretax income in the quarter.
STRs decreased 5.7 percent on a reported basis in the first quarter,
driven by weak consumer demand and promotional challenges, as well as
our change to a Gregorian calendar and the loss of the Modelo brands
this year. Excluding the Modelo brands from our results this year and
last year(3), our market share declined approximately
one-half share point. First quarter sales volume for Molson Coors Canada
decreased 5.5 percent on a reported basis. Net sales per hectoliter
increased 1.5 percent in local currency, driven by positive net pricing.
COGS per hectoliter increased 0.7 percent in local currency, driven by
fixed-cost deleverage and brewing and material inflation, partially
offset by cost savings. MG&A expense decreased 10.2 percent in local
currency, driven by results of cost savings initiatives and overhead
cost reductions, along with a year-over-year difference in the timing of
marketing and sales spending.
Europe Business
Europe underlying pretax income increased $21.5 million to $16.2 million
in the quarter, driven by volume growth, cost savings, and a $2.8
million benefit from favorable foreign currency movements.
Europe sales volume increased 5.6 percent, due to strong execution and
favorable weather this year. In the first quarter, we grew or maintained
volume in all of our markets in the region, with the exception of
Serbia. Europe net sales per hectoliter decreased 2.7 percent in local
currency primarily due to negative channel, customer and brand mix.
COGS per hectoliter decreased 8.0 percent in local currency as a result
of cost savings, fixed-cost leverage from higher volumes, and lower
logistics expenses.
MG&A expenses decreased 7.0 percent in local currency, due to lower
overhead costs and an $11.3 million non-core gain related to the
favorable resolution of an indirect-tax audit (excluded from Europe
underlying pretax income), partially offset by increased marketing and
sales investments.
International Business
The International segment posted an underlying pretax loss of $3.0
million in the first quarter, an improvement of $2.2 million from a year
ago, due to strong volume and profit growth in Mexico and Latin America,
improved performance in China, and lower overhead expenses.
Total International sales volume, including royalty volume, increased
13.7 percent, primarily due to strong Coors Light growth in Mexico and
Latin America and the addition of the Australia market, partially offset
by industry weakness in our Ukraine and Russia license markets. Net
sales per hectoliter increased 6.8 percent, driven by higher net pricing
in China, the addition of Australia, and contract brewing sales in India.
COGS per hectoliter increased 6.5 percent, due to the addition of
Australia and contract brewing volume in India. International MG&A
expense decreased 2.0 percent, driven by lower overhead expenses.
Corporate
Underlying Corporate pretax expenses totaled $65.1 million for the first
quarter, a $16.4 million improvement versus the prior year driven by
lower interest expense due to debt repayments and lower G&A costs.
Change in Interim Period Accounting for
Advertising Expenses
Effective the first quarter of 2014, we changed our policy for
recognizing advertising expenses during interim periods and have applied
this change retrospectively. The change in interim accounting affects
the timing of advertising expenses over interim periods but has no
impact on full year results. We have provided the impact to fiscal year
2013 quarterly results on our investor relations website.
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 recognized special items resulting in a
net $52.5 million pretax benefit. This benefit was largely driven by
$63.2 million received from Modelo for the early termination of the
Modelo Molson joint venture in Canada. This receipt was partially offset
by a charge of $4.9 million related to the accelerated amortization of
the remaining carrying value of the Modelo brand intangible asset in
Canada. Additionally, we recognized charges of $5.8 million during the
quarter related to restructuring programs.
During the quarter, MillerCoors reported $0.7 million in
restructuring-related special charges. Our portion of these charges is
$0.3 million at our 42 percent economic ownership share.
Other non-core items resulted in $10.9 million of pretax income, which
was primarily driven by an $11.3 million gain associated with the
release of an indirect-tax reserve in Europe, partially offset by
unrealized mark-to-market losses on commodity hedges.
2014 First 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 2014 first 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 August 6, 2014. The Company will post this release and
related financial statements on its website today.
Upcoming Investor Webcasts
The Company will host online, real-time webcasts in May and June at the
following events:
Gavin Hattersley, Molson Coors CFO, will present at the Goldman Sachs
Global Staples Summit in New York on Tuesday, May 13, 2014, at 10:05
a.m. Eastern Time.
The Company will host its Annual Meeting of Stockholders on Wednesday,
June 4, 2014, at 1:00 p.m. Eastern time. The meeting will take place in
Denver at the Ritz Carlton Hotel.
The Company will host a presentation to financial analysts in New York
on Wednesday, June 25, 2014. The presentation is scheduled for 2:00 p.m.
to 3:30 p.m. Eastern time. Company executives participating in the New
York presentation will include Molson Coors CEO Peter Swinburn and CFO
Gavin Hattersley.
Live webcasts of all three investor events will be accessible via the
Molson Coors Brewing Company website, www.molsoncoors.com,
on the Investors page. An online replay of the presentation webcasts
will be available within two hours after the presentations.
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 first quarter ended
March 31, 2014, compared to the fiscal first quarter ended March 30,
2013. 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) Excludes the Modelo brands from our Canada STR results in
first quarter 2014 and the prior year period. The Company terminated on
February 28, 2014, its joint venture that sold the Modelo brands in
Canada, and control of the brands reverted to Anheuser-Busch InBev.
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
Carling, Coors Light, Molson Canadian and Staropramen. Molson Coors is
listed as the beverage industry sector leader on the 2013/2014 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
website, www.molsoncoors.com.
About Molson Coors Canada Inc.
Molson Coors Canada Inc. (MCCI) is a subsidiary of Molson Coors Brewing
Company. MCCI Class A and Class B exchangeable shares offer
substantially the same economic and voting rights as the respective
classes of common shares of MCBC, as described in MCBC’s annual proxy
and 10-K filings with the U.S. Securities and Exchange Commission. The
trustee holder of the special Class A voting stock and the special
Class B voting stock has the right to cast a number of votes equal to
the number of then outstanding Class A exchangeable shares and Class B
exchangeable shares, respectively.
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, impact of competitive pricing and product pressures; health of
the beer industry and our brands in our markets; economic conditions in
our markets; pension plan costs; availability or increase in the cost of
packaging materials; our ability to maintain manufacturer/distribution
agreements; our ability to implement our strategic initiatives,
including executing and realizing cost savings; our ability to
successfully integrate our Central Europe business; 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; risks relating to operations
outside North America; success of our joint ventures; lack of
full-control over the operations of MillerCoors; and other risks
discussed in our filings with the SEC, including our Annual Report on
Form 10-K for the year-ended December 31, 2013, 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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|
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Reconciliations to Nearest U.S. GAAP
Measure
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Molson Coors Brewing Company and Subsidiaries
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Table 1: Underlying After-Tax Income
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($ In millions, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2014
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March 30, 2013(1)
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U.S. GAAP: Income from
continuing operations attributable to MCBC, net of tax
|
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$
|
165.3
|
|
|
$
|
29.4
|
|
|
Per diluted share
|
|
$
|
0.89
|
|
|
$
|
0.16
|
|
|
Add/(less):
|
|
|
|
|
|
|
|
Pretax special items, net
|
|
(52.5
|
)
|
|
1.5
|
|
|
42% of MillerCoors special items, net of tax(2)
|
|
0.3
|
|
|
—
|
|
|
Acquisition and integration related costs(3)
|
|
—
|
|
|
1.8
|
|
|
Unrealized mark-to-market (gains) and losses(4)
|
|
0.4
|
|
|
19.8
|
|
|
Other non-core items(5)
|
|
(11.3
|
)
|
|
(1.2
|
)
|
|
Tax effects on non-GAAP items
|
|
—
|
|
|
(3.8
|
)
|
|
Non-GAAP: Underlying
after-tax income
|
|
$
|
102.2
|
|
|
$
|
47.5
|
|
|
Per diluted share
|
|
$
|
0.55
|
|
|
$
|
0.26
|
|
|
|
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(1)
|
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|
Amounts have been adjusted to reflect the change in interim
accounting for advertising expenses.
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|
|
|
|
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(2)
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Included in Equity Income in MillerCoors.
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|
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(3)
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Included in Marketing, General and Administrative Expenses.
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|
|
|
|
|
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(4)
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In Q1 2014, $0.5 million gain included in Other Income (Expense),
net and $0.9 million loss included in Cost of Goods Sold. In Q1
2013, $0.4 million gain included in Cost of Goods Sold, $29.7
million loss included in Interest Expense and $9.5 million net gain
included in Other Income (Expense), net.
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|
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(5)
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In Q1 2014, $11.3 million gain included in Marketing, General and
Administrative Expenses. In Q1 2013, $1.2 million gain included in
Other Income (Expense), net.
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Molson Coors Brewing Company and Subsidiaries
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Table 2: Underlying Pretax Income (Loss)
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($ In millions)
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(Unaudited)
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Business
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Total
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Canada
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U.S.
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Europe
|
|
MCI
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Corporate
|
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Consolidated
|
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U.S. GAAP: 2014 1st Q
income (loss) from continuing operations before income taxes
|
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$
|
88.3
|
|
|
$
|
122.8
|
|
|
$
|
27.0
|
|
|
$
|
(3.0
|
)
|
|
$
|
(65.5
|
)
|
|
$
|
169.6
|
|
|
Add/(less):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax special items, net
|
|
(53.0
|
)
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
(52.5
|
)
|
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42% of MillerCoors special items, net of tax(1)
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
Unrealized mark-to-market (gains) and losses(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.4
|
|
|
Other non-core items(3)
|
|
—
|
|
|
—
|
|
|
(11.3
|
)
|
|
—
|
|
|
—
|
|
|
(11.3
|
)
|
|
Non-GAAP: 2014 1st Q
underlying pretax income (loss)
|
|
$
|
35.3
|
|
|
$
|
123.1
|
|
|
$
|
16.2
|
|
|
$
|
(3.0
|
)
|
|
$
|
(65.1
|
)
|
|
$
|
106.5
|
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|
Percent change 2014 1st Q vs. 2013 1st Q underlying pretax income
(loss)
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20.5%
|
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4.9%
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N/M
|
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42.3%
|
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20.1%
|
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94.7%
|
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U.S. GAAP: 2013 1st Q
income (loss) from continuing operations before income taxes(4)
|
|
$
|
28.4
|
|
|
$
|
117.4
|
|
|
$
|
(5.2
|
)
|
|
$
|
(5.2
|
)
|
|
$
|
(102.6
|
)
|
|
$
|
32.8
|
|
|
Add/(less):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax special items, net
|
|
2.1
|
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
0.3
|
|
|
1.5
|
|
|
Acquisition and integration related costs(5)
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
1.0
|
|
|
1.8
|
|
|
Unrealized mark-to-market (gains) and losses(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19.8
|
|
|
19.8
|
|
|
Other non-core items(3)
|
|
(1.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.2
|
)
|
|
Non-GAAP: 2013 1st Q
underlying pretax income (loss)
|
|
$
|
29.3
|
|
|
$
|
117.4
|
|
|
$
|
(5.3
|
)
|
|
$
|
(5.2
|
)
|
|
$
|
(81.5
|
)
|
|
$
|
54.7
|
|
|
N/M = not meaningful
|
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(1)
|
|
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Included in Equity Income in MillerCoors.
|
|
|
|
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|
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|
|
|
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(2)
|
|
|
In Q1 2014, $0.5 million gain included in Other Income (Expense),
net and $0.9 million loss included in Cost of Goods Sold. In Q1
2013, $0.4 million gain included in Cost of Goods Sold, $29.7
million loss included in Interest Expense and $9.5 million net gain
included in Other Income (Expense), net.
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
|
In Q1 2014, $11.3 million gain included in Marketing, General and
Administrative Expenses. In Q1 2013, $1.2 million gain included in
Other Income (Expense), net.
|
|
|
|
|
|
|
|
|
|
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|
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(4)
|
|
|
Amounts have been adjusted to reflect the change in interim
accounting for advertising expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
Included in Marketing, General and Administrative Expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
|
Table 3: Underlying EBITDA
|
|
|
($ In millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2014
|
|
March 30, 2013(1)
|
|
% change
|
|
U.S. GAAP: Net income
attributable to MCBC from continuing operations
|
|
$
|
165.3
|
|
|
$
|
29.4
|
|
|
462.2
|
%
|
|
Add: Net income (loss) attributable to noncontrolling
interests
|
|
(0.5
|
)
|
|
1.4
|
|
|
(135.7
|
)%
|
|
U.S. GAAP: Net income
(loss) from continuing operations
|
|
$
|
164.8
|
|
|
$
|
30.8
|
|
|
435.1
|
%
|
|
Add: Interest expense (income), net
|
|
35.4
|
|
|
74.9
|
|
|
(52.7
|
)%
|
|
Add: Income tax expense (benefit)
|
|
4.8
|
|
|
2.0
|
|
|
140.0
|
%
|
|
Add: Depreciation and amortization
|
|
81.2
|
|
|
80.2
|
|
|
1.2
|
%
|
|
Adjustments included in underlying income(2)
|
|
(63.4
|
)
|
|
21.9
|
|
|
N/M
|
|
|
Adjustments to arrive at underlying EBITDA(3)
|
|
(4.9
|
)
|
|
(29.7
|
)
|
|
(83.5
|
)%
|
|
Adjustments to arrive at underlying EBITDA related to our investment
in MillerCoors(4)
|
|
33.3
|
|
|
28.5
|
|
|
16.8
|
%
|
|
Non-GAAP: Underlying EBITDA
|
|
$
|
251.2
|
|
|
$
|
208.6
|
|
|
20.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M = Not meaningful
|
|
|
|
|
(1)
|
|
|
Amounts have been adjusted to reflect the change in interim
accounting for advertising expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
|
Includes adjustments to non-GAAP underlying income within the table
above related to special and non-core items.
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
|
Represents adjustments to remove amounts related to interest,
depreciation and amortization included in the adjustments to
non-GAAP underlying income above, as these items are added back
adjustments to net income attributable to MCBC from continuing
operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
|
|
Adjustments to our equity income from MillerCoors, which include our
proportionate share of MillerCoors' interest, income tax,
depreciation and amortization, specials, and amortization of the
difference between the MCBC contributed cost basis and proportionate
share of the underlying equity in net assets of MillerCoors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
Table 4: Underlying Free Cash Flow
|
|
($ In millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2014
|
|
March 30, 2013
|
|
U.S. GAAP: Net Cash
Provided by Operating Activities
|
|
$
|
149.7
|
|
|
$
|
118.4
|
|
|
Less: Additions to properties(1)
|
|
(65.3
|
)
|
|
(68.3
|
)
|
|
Less: Investment in MillerCoors(1)
|
|
(354.9
|
)
|
|
(331.8
|
)
|
|
Add: Return of capital from MillerCoors(1)
|
|
259.5
|
|
|
222.4
|
|
|
Add: Cash impact of Special items(2)
|
|
(57.1
|
)
|
|
8.2
|
|
|
Add: Costs related to the Central Europe Acquisition(3)
|
|
—
|
|
|
2.2
|
|
|
Add: MillerCoors investments in businesses(4)
|
|
1.3
|
|
|
—
|
|
|
Add: MillerCoors cash impact of Special items(4)
|
|
2.2
|
|
|
—
|
|
|
Non-GAAP: Underlying Free
Cash Flow
|
|
$
|
(64.6
|
)
|
|
$
|
(48.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Included in net cash used in investing activities.
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
|
Included in net cash provided by operating activities and primarily
reflects cash received for the early termination of MMI, as well as
costs paid for restructuring activities.
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 Attributable to
MillerCoors
|
|
($ In millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2014
|
|
March 31, 2013
|
|
U.S. GAAP: Net income
attributable to MillerCoors
|
|
$
|
291.2
|
|
|
$
|
271.9
|
|
Add: Special items, net
|
|
0.7
|
|
|
—
|
|
Less: Tax effect of adjustments to arrive at underlying
after-tax income
|
|
—
|
|
|
—
|
|
Non-GAAP: Underlying net
income attributable to MillerCoors
|
|
$
|
291.9
|
|
|
$
|
271.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
Table 6: Underlying Equity Income in MillerCoors
|
|
($ In millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2014
|
|
March 30, 2013
|
|
U.S. GAAP: Net Income
Attributable to MillerCoors
|
|
$
|
291.2
|
|
|
$
|
271.9
|
|
|
Multiply: MCBC economic interest (%) in MillerCoors
|
|
42
|
%
|
|
42
|
%
|
|
MCBC proportionate share of MillerCoors net income
|
|
$
|
122.3
|
|
|
$
|
114.2
|
|
|
Add: Amortization of the difference between MCBC contributed
cost basis and the underlying equity in net assets of MillerCoors(1)
|
|
1.1
|
|
|
1.2
|
|
|
Add: Share-based compensation adjustment(2)
|
|
(0.6
|
)
|
|
2.0
|
|
|
U.S. GAAP: Equity Income in
MillerCoors
|
|
$
|
122.8
|
|
|
$
|
117.4
|
|
|
Add: Proportionate share of MillerCoors special items
|
|
0.3
|
|
|
—
|
|
|
Less: Tax effect on special items
|
|
—
|
|
|
—
|
|
|
Non-GAAP: Underlying Equity
Income in MillerCoors
|
|
$
|
123.1
|
|
|
$
|
117.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 proportionate share of underlying equity (42%) of MillerCoors
(contributed by both Coors Brewing Company and Miller Brewing
Company) by $665.1 million as of March 31, 2014. This basis
difference, with the exception of certain non-amortizing items
(goodwill, land, etc.), is being amortized as additional equity
income over the remaining useful lives of the contributed long-lived
amortizing assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
|
The net adjustment is to eliminate all share-based compensation
impacts related to pre-existing SABMiller plc equity awards held by
former Miller Brewing Company employees employed by MillerCoors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
Table 7: Constant Currency Results:
Constant Currency Reporting Net Sales, U.S. GAAP Pretax
|
|
Income and Underlying Pretax Income
|
|
|
|
U.S. GAAP: Net Sales (In millions)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
Reported %
|
|
Foreign
|
|
Constant Currency
|
|
|
|
|
|
|
|
Increase
|
|
Exchange
|
|
% Increase
|
|
|
|
March 31, 2014
|
|
March 30, 2013
|
|
(Decrease)
|
|
Impact ($)
|
|
(Decrease)
|
|
Canada
|
|
$
|
347.1
|
|
|
$
|
395.6
|
|
|
(12.3
|
)%
|
|
$
|
(33.2
|
)
|
|
(3.9
|
)%
|
|
Europe
|
|
437.6
|
|
|
406.4
|
|
|
7.7
|
%
|
|
19.4
|
|
|
2.9
|
%
|
|
MCI
|
|
32.2
|
|
|
27.0
|
|
|
19.3
|
%
|
|
(1.1
|
)
|
|
23.3
|
%
|
|
Corporate
|
|
0.3
|
|
|
0.3
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
Eliminations(1)
|
|
(1.2
|
)
|
|
(0.8
|
)
|
|
50.0
|
%
|
|
—
|
|
|
50.0
|
%
|
|
Molson Coors Consolidated Total
|
|
$
|
816.0
|
|
|
$
|
828.5
|
|
|
(1.5
|
)%
|
|
$
|
(14.9
|
)
|
|
0.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Reflects intercompany sales from Europe to MCI, and the offset is
included within MCI cost of goods sold. These amounts are eliminated
in the consolidated totals.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP: Pretax Income (In millions)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
Reported %
|
|
Foreign
|
|
Constant Currency
|
|
|
|
|
|
|
|
Increase
|
|
Exchange
|
|
% Increase
|
|
|
|
March 31, 2014
|
|
March 30, 2013(1)
|
|
(Decrease)
|
|
Impact ($)
|
|
(Decrease)
|
|
MillerCoors (42% portion)
|
|
$
|
122.8
|
|
|
$
|
117.4
|
|
|
4.6
|
%
|
|
$
|
—
|
|
|
4.6
|
%
|
|
Canada
|
|
88.3
|
|
|
28.4
|
|
|
210.9
|
%
|
|
(7.9
|
)
|
|
238.7
|
%
|
|
Europe
|
|
27.0
|
|
|
(5.2
|
)
|
|
N/M
|
|
|
3.2
|
|
|
N/M
|
|
|
MCI
|
|
(3.0
|
)
|
|
(5.2
|
)
|
|
42.3
|
%
|
|
0.1
|
|
|
40.4
|
%
|
|
Corp
|
|
(65.5
|
)
|
|
(102.6
|
)
|
|
36.2
|
%
|
|
0.3
|
|
|
35.9
|
%
|
|
Molson Coors Consolidated Total
|
|
$
|
169.6
|
|
|
$
|
32.8
|
|
|
417.1
|
%
|
|
$
|
(4.3
|
)
|
|
430.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M = Not meaningful
|
|
|
|
|
|
(1)
|
|
|
Amounts have been adjusted to reflect the change in interim
accounting for advertising expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP: Underlying Pretax Income (In
millions)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
Reported %
|
|
Foreign
|
|
Constant Currency
|
|
|
|
|
|
|
|
Increase
|
|
Exchange
|
|
% Increase
|
|
|
|
March 31, 2014
|
|
March 30, 2013(1)
|
|
(Decrease)
|
|
Impact ($)
|
|
(Decrease)
|
|
MillerCoors (42% portion)
|
|
$
|
123.1
|
|
|
$
|
117.4
|
|
|
4.9
|
%
|
|
$
|
—
|
|
|
4.9
|
%
|
|
Canada
|
|
35.3
|
|
|
29.3
|
|
|
20.5
|
%
|
|
(2.4
|
)
|
|
28.7
|
%
|
|
Europe
|
|
16.2
|
|
|
(5.3
|
)
|
|
N/M
|
|
|
2.8
|
|
|
N/M
|
|
|
MCI
|
|
(3.0
|
)
|
|
(5.2
|
)
|
|
42.3
|
%
|
|
0.1
|
|
|
40.4
|
%
|
|
Corp
|
|
(65.1
|
)
|
|
(81.5
|
)
|
|
20.1
|
%
|
|
(0.1
|
)
|
|
20.2
|
%
|
|
Molson Coors Consolidated Total
|
|
$
|
106.5
|
|
|
$
|
54.7
|
|
|
94.7
|
%
|
|
$
|
0.4
|
|
|
94.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M = Not meaningful
|
|
|
|
|
|
(1)
|
|
|
Amounts have been adjusted to reflect the change in interim
accounting for advertising expenses.
|
|
|
|
|
|
|
|
|
|
Constant currency is a non-GAAP measure utilized by Molson Coors
management to measure performance, excluding the impact of foreign
currency movements. As we operate in various foreign countries where the
local currency may strengthen or weaken significantly versus the U.S.
dollar or other currencies used in operations, we utilize a constant
currency measure as an additional metric to evaluate the underlying
performance of each business without consideration of foreign currency
movements. This information is non-GAAP and should be viewed as a
supplement to (not a substitute for) our reported results of operations
under U.S. GAAP. We calculate the impact of foreign exchange on net
sales, pretax income and non-GAAP underlying pretax income using the
following steps:
|
|
|
1.
|
|
|
Multiply our current period local currency operating results (that
also include the impact of the comparable prior-period currency
hedging activities) by the weighted average foreign exchange rates
used to translate the financial statements in the comparable prior
year period. The result is the current-period operating results in
U.S. dollars, as if foreign exchange rates had not changed from the
prior-year period.
|
|
|
|
|
|
|
|
|
|
|
|
|
2.
|
|
|
Subtract the result in #1 from the unadjusted current-period
reported operating result in U.S. dollars (U.S. GAAP measure). This
difference reflects the impact of foreign currency translational
gains/losses included in the current-period results.
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
|
|
Determine the amount of actual non-operating foreign currency
gains/losses realized as a result of hedging activities and
activities transacted in a currency other than the functional
currency of each legal entity.
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
|
|
Add the results of steps 2 and 3 above. This sum equals the total
impact of foreign currency translational gains/losses and realized
gains/losses from foreign currency transactions. This is the value
shown in the “Foreign Exchange $ Impact” column within the table
above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In addition to financial measures presented on the basis of accounting
principles generally accepted in the United States of America
("U.S. GAAP"), we also present pretax and after-tax "underlying income,"
"underlying income per diluted share," "underlying effective tax rate,"
and "underlying free cash flow," which are non-GAAP measures and should
be viewed as supplements to (not substitutes for) our results of
operations presented under U.S. GAAP. We also present underlying
earnings before interest, taxes, depreciation, and amortization
("underlying EBITDA") as a non-GAAP measure. Our management uses
underlying income, underlying income per diluted share, underlying
EBITDA, underlying effective tax rate and underlying free cash flow as
measures 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; in communications with the board of
directors, stockholders, analysts and investors concerning our financial
performance; as useful comparisons to the performance of our
competitors; and as metrics of certain management incentive compensation
calculations. We believe that underlying income, underlying income per
diluted share, underlying EBITDA, underlying effective tax rate and
underlying free cash flow performance are used by and are useful to
investors and other users of our financial statements in evaluating our
operating performance because they provide an additional tool to
evaluate our performance without regard to special and non-core items,
which can vary substantially from company to company depending upon
accounting methods and book value of assets and capital structure. We
have provided reconciliations of all non-GAAP measures to their nearest
U.S. GAAP measures and have consistently applied the adjustments within
our reconciliations in arriving at each non-GAAP measure. These
adjustments consist of special items from our U.S. GAAP financial
statements as well as other non-core items, such as acquisition and
integration related costs, unrealized mark-to-market gains and losses,
and gains and losses on sales of non-operating assets, included in our
U.S. GAAP results that warrant adjustment to arrive at non-GAAP results.
We consider these items to be necessary adjustments for purposes of
evaluating our ongoing business performance and are often considered
non-recurring. Such adjustments are subjective and involve significant
management judgment.
|
|
|
Worldwide Beer Volume
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
Table 8: Worldwide Beer Volume
|
|
(In millions of hectoliters)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
March 31, 2014
|
|
March 30, 2013
|
|
% Change
|
|
Financial Volume
|
|
5.913
|
|
|
5.750
|
|
|
2.8
|
%
|
|
Royalty Volume
|
|
0.300
|
|
|
0.261
|
|
|
14.9
|
%
|
|
Owned Volume
|
|
6.213
|
|
|
6.011
|
|
|
3.4
|
%
|
|
Proportionate Share of Equity Investment Sales to Retail(1)
|
|
5.705
|
|
|
5.921
|
|
|
(3.6
|
)%
|
|
Total Worldwide Beer Volume
|
|
11.918
|
|
|
11.932
|
|
|
(0.1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Measures
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
Table 9: Condensed Consolidated Statements of
Operations
|
|
($ In millions, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2014
|
|
March 30, 2013(1)
|
|
Volume in hectoliters
|
|
5.913
|
|
|
5.750
|
|
|
Sales
|
|
$
|
1,178.3
|
|
|
$
|
1,184.8
|
|
|
Excise taxes
|
|
(362.3
|
)
|
|
(356.3
|
)
|
|
Net sales
|
|
816.0
|
|
|
828.5
|
|
|
Cost of goods sold
|
|
(523.2
|
)
|
|
(547.1
|
)
|
|
Gross profit
|
|
292.8
|
|
|
281.4
|
|
|
Marketing, general and administrative expenses
|
|
(263.9
|
)
|
|
(293.9
|
)
|
|
Special items, net
|
|
52.5
|
|
|
(1.5
|
)
|
|
Equity income in MillerCoors
|
|
122.8
|
|
|
117.4
|
|
|
Operating income (loss)
|
|
204.2
|
|
|
103.4
|
|
|
Interest income (expense), net
|
|
(35.4
|
)
|
|
(74.9
|
)
|
|
Other income (expense), net
|
|
0.8
|
|
|
4.3
|
|
|
Income (loss) from continuing operations before income taxes
|
|
169.6
|
|
|
32.8
|
|
|
Income tax expense
|
|
(4.8
|
)
|
|
(2.0
|
)
|
|
Net Income (loss) from continuing operations
|
|
164.8
|
|
|
30.8
|
|
|
Income (loss) from discontinued operations, net of tax
|
|
(1.9
|
)
|
|
(0.9
|
)
|
|
Net income (loss) including noncontrolling interests
|
|
162.9
|
|
|
29.9
|
|
|
Less: Net (income) loss attributable to noncontrolling interests
|
|
0.5
|
|
|
(1.4
|
)
|
|
Net income (loss) attributable to MCBC
|
|
$
|
163.4
|
|
|
$
|
28.5
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) attributable to MCBC per share:
|
|
|
|
|
|
|
|
From continuing operations
|
|
$
|
0.90
|
|
|
$
|
0.16
|
|
|
From discontinued operations
|
|
(0.01
|
)
|
|
—
|
|
|
Basic net income per share
|
|
$
|
0.89
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) attributable to MCBC per share:
|
|
|
|
|
|
|
|
From continuing operations
|
|
$
|
0.89
|
|
|
$
|
0.16
|
|
|
From discontinued operations
|
|
(0.01
|
)
|
|
—
|
|
|
Diluted net income per share
|
|
$
|
0.88
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - basic
|
|
184.3
|
|
|
181.7
|
|
|
Weighted average shares - diluted
|
|
185.5
|
|
|
182.9
|
|
|
|
|
|
|
|
|
|
|
Dividends per share
|
|
$
|
0.37
|
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to MCBC
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations, net of tax
|
|
$
|
165.3
|
|
|
$
|
29.4
|
|
|
Income (loss) from discontinued operations, net of tax
|
|
(1.9
|
)
|
|
(0.9
|
)
|
|
Net income (loss) attributable to MCBC
|
|
$
|
163.4
|
|
|
$
|
28.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Amounts have been adjusted to reflect the change in interim
accounting for advertising expenses.
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
Table 10: Canada Segment Results of Operations
|
|
($ In millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2014
|
|
March 30, 2013(1)
|
|
Volume in hectoliters
|
|
1.563
|
|
|
1.654
|
|
|
Sales
|
|
$
|
455.6
|
|
|
$
|
522.0
|
|
|
Excise taxes
|
|
(108.5
|
)
|
|
(126.4
|
)
|
|
Net sales
|
|
347.1
|
|
|
395.6
|
|
|
Cost of goods sold
|
|
(216.7
|
)
|
|
(249.1
|
)
|
|
Gross profit
|
|
130.4
|
|
|
146.5
|
|
|
Marketing, general and administrative expenses
|
|
(96.0
|
)
|
|
(117.0
|
)
|
|
Special items, net
|
|
53.0
|
|
|
(2.1
|
)
|
|
Operating income (loss)
|
|
87.4
|
|
|
27.4
|
|
|
Other income (expense), net
|
|
0.9
|
|
|
1.0
|
|
|
Income (loss) before income taxes
|
|
$
|
88.3
|
|
|
$
|
28.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Amounts have been adjusted to reflect the change in interim
accounting for advertising expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
Table 11: Europe Results of Operations
|
|
($ In millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2014
|
|
March 30, 2013(1)
|
|
Volume in hectoliters(2)
|
|
4.085
|
|
|
3.868
|
|
|
Sales(2)
|
|
$
|
685.8
|
|
|
$
|
632.4
|
|
|
Excise taxes
|
|
(248.2
|
)
|
|
(226.0
|
)
|
|
Net sales(2)
|
|
437.6
|
|
|
406.4
|
|
|
Cost of goods sold
|
|
(286.0
|
)
|
|
(281.2
|
)
|
|
Gross profit
|
|
151.6
|
|
|
125.2
|
|
|
Marketing, general and administrative expenses
|
|
(126.2
|
)
|
|
(130.2
|
)
|
|
Special items, net
|
|
(0.5
|
)
|
|
0.9
|
|
|
Operating income (loss)
|
|
24.9
|
|
|
(4.1
|
)
|
|
Interest income, net
|
|
1.1
|
|
|
1.2
|
|
|
Other income (expense), net
|
|
1.0
|
|
|
(2.3
|
)
|
|
Income (loss) before income taxes
|
|
$
|
27.0
|
|
|
$
|
(5.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Amounts have been adjusted to reflect the change in interim
accounting for advertising expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
|
Reflects gross segment sales and for Q1 2014 includes intercompany
sales to MCI of 0.013 million hectoliters and $1.2 million of net
sales. Q1 2013 includes intercompany sales to MCI of 0.021 million
hectoliters and $0.8 million of net sales. The offset is included
within MCI cost of goods sold. These amounts are eliminated in the
consolidated totals.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
Table 12: Molson Coors International Results of
Operations
|
|
($ In millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2014
|
|
March 30, 2013(1)
|
|
Volume in hectoliters
|
|
0.278
|
|
|
0.249
|
|
|
Sales
|
|
$
|
37.8
|
|
|
$
|
30.9
|
|
|
Excise taxes
|
|
(5.6
|
)
|
|
(3.9
|
)
|
|
Net sales
|
|
32.2
|
|
|
27.0
|
|
|
Cost of goods sold(2)
|
|
(20.8
|
)
|
|
(17.5
|
)
|
|
Gross profit
|
|
11.4
|
|
|
9.5
|
|
|
Marketing, general and administrative expenses
|
|
(14.4
|
)
|
|
(14.7
|
)
|
|
Special items, net
|
|
—
|
|
|
—
|
|
|
Operating income (loss)
|
|
(3.0
|
)
|
|
(5.2
|
)
|
|
Other income (expense), net
|
|
—
|
|
|
—
|
|
|
Income (loss) before income taxes
|
|
$
|
(3.0
|
)
|
|
$
|
(5.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Amounts have been adjusted to reflect the change in interim
accounting for advertising expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
|
Reflects gross segment amounts and for Q1 2014 and Q1 2013 includes
intercompany cost of goods sold from Europe of $1.2 million and $0.8
million, respectively. The offset is included within Europe net
sales. These amounts are eliminated in the consolidated totals.
|
|
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
Table 13: Corporate Results of Operations
|
|
($ In millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2014
|
|
March 30, 2013
|
|
Volume in hectoliters
|
|
—
|
|
|
—
|
|
|
Sales
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
Excise taxes
|
|
—
|
|
|
—
|
|
|
Net sales
|
|
0.3
|
|
|
0.3
|
|
|
Cost of goods sold
|
|
(0.9
|
)
|
|
(0.1
|
)
|
|
Gross profit
|
|
(0.6
|
)
|
|
0.2
|
|
|
Marketing, general and administrative expenses
|
|
(27.3
|
)
|
|
(32.0
|
)
|
|
Special items, net
|
|
—
|
|
|
(0.3
|
)
|
|
Operating income (loss)
|
|
(27.9
|
)
|
|
(32.1
|
)
|
|
Interest expense, net
|
|
(36.5
|
)
|
|
(76.1
|
)
|
|
Other income (expense), net
|
|
(1.1
|
)
|
|
5.6
|
|
|
Income (loss) before income taxes
|
|
$
|
(65.5
|
)
|
|
$
|
(102.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MillerCoors LLC (1)
|
|
Table 14: Results of Operations
|
|
($ In millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2014
|
|
March 31, 2013
|
|
Volume in hectoliters(2)
|
|
16.488
|
|
|
17.032
|
|
|
Sales
|
|
$
|
2,050.1
|
|
|
$
|
2,056.7
|
|
|
Excise taxes
|
|
(259.7
|
)
|
|
(268.4
|
)
|
|
Net sales
|
|
1,790.4
|
|
|
1,788.3
|
|
|
Cost of goods sold
|
|
(1,094.1
|
)
|
|
(1,088.7
|
)
|
|
Gross profit
|
|
696.3
|
|
|
699.6
|
|
|
Marketing, general and administrative expenses
|
|
(398.1
|
)
|
|
(425.1
|
)
|
|
Special items, net
|
|
(0.7
|
)
|
|
—
|
|
|
Operating income
|
|
297.5
|
|
|
274.5
|
|
|
Interest income (expense), net
|
|
(0.3
|
)
|
|
(0.5
|
)
|
|
Other income (expense), net
|
|
0.3
|
|
|
0.8
|
|
|
Income before income taxes
|
|
297.5
|
|
|
274.8
|
|
|
Income tax expense
|
|
(1.9
|
)
|
|
(0.4
|
)
|
|
Net income
|
|
295.6
|
|
|
274.4
|
|
|
Less: Net income attributable to noncontrolling interests
|
|
(4.4
|
)
|
|
(2.5
|
)
|
|
Net income attributable to MillerCoors
|
|
$
|
291.2
|
|
|
$
|
271.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Economic ownership of MillerCoors is 58% held by SABMiller and 42%
held by Molson Coors. See Table 6 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, except par value)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
As of
|
|
|
|
March 31, 2014
|
|
December 31, 2013
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
337.6
|
|
|
$
|
442.3
|
|
|
Accounts receivable, net
|
|
552.1
|
|
|
603.6
|
|
|
Other receivables, net
|
|
161.3
|
|
|
124.4
|
|
|
Inventories:
|
|
|
|
|
|
Finished
|
|
179.6
|
|
|
133.2
|
|
|
In process
|
|
24.4
|
|
|
23.3
|
|
|
Raw materials
|
|
42.6
|
|
|
36.9
|
|
|
Packaging materials
|
|
16.6
|
|
|
11.9
|
|
|
Total inventories
|
|
263.2
|
|
|
205.3
|
|
|
Other current assets, net
|
|
123.7
|
|
|
111.7
|
|
|
Deferred tax assets
|
|
46.4
|
|
|
50.4
|
|
|
Total current assets
|
|
1,484.3
|
|
|
1,537.7
|
|
|
Properties, net
|
|
1,936.2
|
|
|
1,970.1
|
|
|
Goodwill
|
|
2,394.7
|
|
|
2,418.7
|
|
|
Other intangibles, net
|
|
6,652.3
|
|
|
6,825.1
|
|
|
Investment in MillerCoors
|
|
2,608.5
|
|
|
2,506.5
|
|
|
Deferred tax assets
|
|
15.7
|
|
|
38.3
|
|
|
Notes receivable, net
|
|
23.0
|
|
|
23.6
|
|
|
Other assets
|
|
251.1
|
|
|
260.1
|
|
|
Total assets
|
|
$
|
15,365.8
|
|
|
$
|
15,580.1
|
|
|
Liabilities and equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable and other current liabilities
|
|
$
|
1,267.0
|
|
|
$
|
1,410.3
|
|
|
Deferred tax liabilities
|
|
167.3
|
|
|
138.1
|
|
|
Current portion of long-term debt and short-term borrowings
|
|
630.4
|
|
|
586.9
|
|
|
Discontinued operations
|
|
7.1
|
|
|
6.8
|
|
|
Total current liabilities
|
|
2,071.8
|
|
|
2,142.1
|
|
|
Long-term debt
|
|
3,162.3
|
|
|
3,213.0
|
|
|
Pension and post-retirement benefits
|
|
436.5
|
|
|
462.6
|
|
|
Deferred tax liabilities
|
|
932.5
|
|
|
911.4
|
|
|
Unrecognized tax benefits
|
|
56.5
|
|
|
92.7
|
|
|
Other liabilities
|
|
63.5
|
|
|
77.2
|
|
|
Discontinued operations
|
|
18.0
|
|
|
17.3
|
|
|
Total liabilities
|
|
6,741.1
|
|
|
6,916.3
|
|
|
Molson Coors Brewing Company stockholders' equity
|
|
|
|
|
|
Capital stock:
|
|
|
|
|
|
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: 167.9 shares and 167.2 shares, respectively)
|
|
1.7
|
|
|
1.7
|
|
|
Class A exchangeable shares, no par value (issued and outstanding:
2.9 shares and 2.9 shares, respectively)
|
|
108.5
|
|
|
108.5
|
|
|
Class B exchangeable shares, no par value (issued and outstanding:
18.9 shares and 19.0 shares, respectively)
|
|
712.4
|
|
|
714.1
|
|
|
Paid-in capital
|
|
3,777.6
|
|
|
3,747.6
|
|
|
Retained earnings
|
|
4,328.4
|
|
|
4,233.2
|
|
|
Accumulated other comprehensive income (loss)
|
|
(6.6
|
)
|
|
154.9
|
|
|
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
|
|
8,600.9
|
|
|
8,638.9
|
|
|
Noncontrolling interests
|
|
23.8
|
|
|
24.9
|
|
|
Total equity
|
|
8,624.7
|
|
|
8,663.8
|
|
|
Total liabilities and equity
|
|
$
|
15,365.8
|
|
|
$
|
15,580.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molson Coors Brewing Company and Subsidiaries
|
|
Table 16: Condensed Consolidated Statements of
Cash Flows
|
|
($ In millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2014
|
|
March 30, 2013
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net income (loss) including noncontrolling interests
|
|
$
|
162.9
|
|
|
$
|
29.9
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
81.2
|
|
|
80.2
|
|
|
Amortization of debt issuance costs and discounts
|
|
1.6
|
|
|
7.3
|
|
|
Share-based compensation
|
|
8.3
|
|
|
11.1
|
|
|
Loss (gain) on sale or impairment of properties and other assets, net
|
|
1.2
|
|
|
1.4
|
|
|
Deferred income taxes
|
|
0.5
|
|
|
1.3
|
|
|
Equity income in MillerCoors
|
|
(122.8
|
)
|
|
(117.4
|
)
|
|
Distributions from MillerCoors
|
|
122.8
|
|
|
117.4
|
|
|
Equity in net income of other unconsolidated affiliates
|
|
(4.2
|
)
|
|
(1.1
|
)
|
|
Distributions from other unconsolidated affiliates
|
|
11.1
|
|
|
11.7
|
|
|
Excess tax benefits from share-based compensation
|
|
(2.0
|
)
|
|
(1.6
|
)
|
|
Unrealized (gain) loss on foreign currency fluctuations and
derivative instruments, net
|
|
(1.8
|
)
|
|
19.1
|
|
|
Change in current assets and liabilities and other
|
|
(111.0
|
)
|
|
(41.8
|
)
|
|
(Gain) loss from discontinued operations
|
|
1.9
|
|
|
0.9
|
|
|
Net cash provided by operating activities
|
|
149.7
|
|
|
118.4
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Additions to properties
|
|
(65.3
|
)
|
|
(68.3
|
)
|
|
Proceeds from sales of properties and other assets
|
|
1.7
|
|
|
3.7
|
|
|
Investment in MillerCoors
|
|
(354.9
|
)
|
|
(331.8
|
)
|
|
Return of capital from MillerCoors
|
|
259.5
|
|
|
222.4
|
|
|
Loan repayments
|
|
2.2
|
|
|
2.6
|
|
|
Loan advances
|
|
(16.7
|
)
|
|
(2.5
|
)
|
|
Net cash used in investing activities
|
|
(173.5
|
)
|
|
(173.9
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Exercise of stock options under equity compensation plans
|
|
20.2
|
|
|
27.2
|
|
|
Excess tax benefits from share-based compensation
|
|
2.0
|
|
|
1.6
|
|
|
Dividends paid
|
|
(68.2
|
)
|
|
(58.2
|
)
|
|
Payments for purchase of noncontrolling interest
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
Payments on long-term debt and capital lease obligations
|
|
(46.9
|
)
|
|
—
|
|
|
Proceeds from short-term borrowings
|
|
20.9
|
|
|
5.9
|
|
|
Payments on short-term borrowings
|
|
(12.5
|
)
|
|
(13.8
|
)
|
|
Payments on settlement of derivative instruments
|
|
(65.2
|
)
|
|
—
|
|
|
Net proceeds from (payments on) revolving credit facilities and
commercial paper
|
|
(41.8
|
)
|
|
(1.2
|
)
|
|
Change in overdraft balances and other
|
|
111.5
|
|
|
3.5
|
|
|
Net cash used in financing activities
|
|
(80.2
|
)
|
|
(35.2
|
)
|
|
Cash and cash equivalents:
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
(104.0
|
)
|
|
(90.7
|
)
|
|
Effect of foreign exchange rate changes on cash and cash equivalents
|
|
(0.7
|
)
|
|
(21.8
|
)
|
|
Balance at beginning of year
|
|
442.3
|
|
|
624.0
|
|
|
Balance at end of period
|
|
$
|
337.6
|
|
|
$
|
511.5
|
|
|
|
|
|
|
|
|
|
|
|
Copyright Business Wire 2014