- U.S. GAAP net income was $369.2 million, up 16.7 percent.
- Underlying net income, a non-GAAP measure, increased 9.6 percent to $377.5 million.
- Total net sales increased 0.4 percent to $2.008 billion.
- Domestic net revenue per hectoliter, excluding contract brewing and company-owned distributor sales, increased 1.6 percent.
- Total cost of goods sold (COGS) per hectoliter decreased 0.9 percent.
- Domestic sales-to-retail volume (STRs) decreased 4.0 percent.
- Domestic sales-to-wholesalers volume (STWs) decreased 0.6 percent.
Coors Light gained share of the Premium Light segment for the sixth consecutive quarter, but STRs were down low-single digits. The brand was recognized with a bronze medal at the Great American Beer Festival last month. Coors Light recently announced a number of retail promotions around college football, from celebrity ambassadors to pregame concerts, now through the National Championship in January.Total MillerCoors Above Premium STRs finished down mid-single digits, despite success from Henry's Hard Soda, which continues as the number-one Hard Soda franchise according to Nielsen. The Redd's family declined high-single digits, as low-single-digit growth of the Wicked brands was more than offset by declines across the balance of the Redd's portfolio. The MillerCoors Tenth & Blake portfolio finished the quarter down high-single digits. The Blue Moon Brewing Company STRs declined high-single digits, led by declines in Blue Moon seasonals. The Jacob Leinenkugel Brewing Company STRs were down mid-teens, partially caused by Summer Shandy demand outselling production a month earlier than planned. MillerCoors recently announced that, due to the current scale of Blue Moon and Leinenkugel's and the capacity needed to fuel their growth, both brand families will be moved out of Tenth and Blake and into the MillerCoors commercial organization. The belief is that the shift of Blue Moon and Leinenkugel's to the MillerCoors organization will not only allow a deeper focus on and commitment to these two strategic brand families, but it will also enable Tenth and Blake to focus on the development and integration of our new craft partners into the MillerCoors system. With Tenth and Blake's acquisitions of Saint Archer Brewery, Terrapin Beer Company, Hop Valley Brewing and Revolver Brewing, our portfolio of craft brands has grown within the past 11 months. Nearly a year after partnering with Tenth and Blake, Saint Archer Brewing in San Diego achieved its highest-ever STR volume in the quarter. Saint Archer is currently working to expand its presence at retail, having recently launched in Las Vegas and Arizona, and is considering additional markets for expansion. Revolver, which joined Tenth and Blake just months ago, took home a gold medal at the Great American Beer Festival for its Anodyne Wheat Wine.
In the Premium Regular segment, Coors Banquet gained segment share and grew STR volume low-single digits for the quarter and remains on target for a 10 th consecutive year of growth. According to Nielsen, Coors Banquet remains the only national Premium Regular brand that is growing, and was recognized for the third consecutive year at the Great American Beer Festival by taking home a silver medal. The growth from Banquet partially offset a low-double-digit decline for Miller Genuine Draft, resulting in the Premium Regular segment finishing down mid-single digits.The MillerCoors Below Premium portfolio decreased mid-single digits, driven by a low-single-digit decline of Miller High Life, a mid-single-digit decline in Keystone and a high-single-digit decline in Milwaukee's Best. While Icehouse grew low-single digits for the fourth consecutive quarter, the Steel Reserve franchise was down low-single digits, with the Steel Alloy Series up low-single digits. Milwaukee's Best recently updated its packaging, which is in market now, while Keystone Light will follow suit with refreshed packaging of its own. Financial Highlights for the Third Quarter Domestic net revenue per hectoliter grew 1.6 percent for the quarter as a result of favorable net pricing and positive sales mix. Total company net revenue per hectoliter, including contract brewing and company-owned distributor sales, increased 1.5 percent. Third-party contract brewing volumes were down 5.0 percent. Total COGS per hectoliter decreased 0.9 percent, driven by supply chain cost savings and lower commodity pricing, partially offset by lower fixed-cost absorption due to lower volumes. Marketing, general and administrative costs were unchanged for the quarter. MillerCoors achieved $19 million of cost savings in the quarter, primarily related to brewery efficiencies and procurement savings. Depreciation and amortization expenses for MillerCoors were $118.5 million. These results include $34.3 million of accelerated depreciation expenses that are included in special items related to the September closure of the Eden, North Carolina brewery. Additions to tangible and intangible assets, which do not include intangible asset additions related to the craft acquisitions, totaled $84.1 million in the quarter.
MillerCoors recognized net special charges of $8.3 million, primarily related to the closure of the Eden Brewery.Overview of MillerCoors Through its diverse collection of storied breweries, MillerCoors brings American beer drinkers an unmatched selection of the highest quality beers, flavored malt beverages and ciders, steeped in centuries of brewing heritage. Miller Brewing Company and Coors Brewing Company brew national favorites such as Miller Lite, Miller High Life, Coors Light and Coors Banquet. MillerCoors also proudly offers beers such as Leinenkugel's Summer Shandy from sixth-generation Jacob Leinenkugel Brewing Company, and Blue Moon Belgian White from modern craft pioneer Blue Moon Brewing Company, founded in 1995. Beyond beer, MillerCoors operates Crispin Cider Company, an artisanal maker of pear and apple ciders using fresh-pressed American juice, and offers pioneering brands such as the Redd's franchise, Smith & Forge Hard Cider and Henry's Hard Sodas. Tenth and Blake Beer Company, our craft and import division, is the home to craft brewers Hop Valley Brewing, Revolver Brewing, Saint Archer Brewing Company and the Terrapin Beer Company. Tenth and Blake also imports world-renowned beers such as Italy's Peroni Nastro Azzurro, the Czech Republic's Pilsner Urquell and the Netherlands' Grolsch. MillerCoors, the U.S. business unit of the Molson Coors Brewing Company, has an uncompromising dedication to quality, a keen focus on innovation and a deep commitment to sustainability. Learn more at MillerCoors.com, at facebook.com/MillerCoors or on Twitter at @MillerCoors. Overview of Molson Coors Molson Coors Brewing Company is a leading international brewer delivering extraordinary brands that delight the world's beer drinkers. It brews, markets and sells a portfolio of leading brands such as Coors Light, Miller Lite, Molson Canadian, Carling, Staropramen and Blue Moon across The Americas, Europe and Asia. It operates in Canada through Molson Coors Canada; in the US through MillerCoors; across Europe through Molson Coors Europe; and outside these core markets through Molson Coors International. The company was listed on the Dow Jones Sustainability World Index for the past five years and named global Beverage Sector Leader in 2012 and 2013. For the past two years, the company was the only alcohol producer recognized on the Index for world class sustainability performance. For more information on Molson Coors Brewing Company visit the company's website, http://molsoncoors.com or http://ourbeerprint.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 the acquisition of MillerCoors; our ability to achieve expected tax benefits, accretion, synergies and other cost savings; impact of increased competition resulting from further consolidation of brewers, competitive pricing and product pressures; health of the beer industry and our brands in our markets; economic conditions in our markets; additional impairment charges; our ability to maintain manufacturer/distribution agreements; changes in our supply chain system; availability or increase in the cost of packaging materials; success of our joint ventures; risks relating to operations in developing and emerging markets; changes in legal and regulatory requirements, including the regulation of distribution systems; fluctuations in foreign currency exchange rates; increase in the cost of commodities used in the business; the impact of climate change and the availability and quality of water; loss or closure of a major brewery or other key facility; our ability to implement our strategic initiatives, including executing and realizing cost savings; our ability to successfully integrate newly acquired businesses; pension plan costs; failure to comply with debt covenants or deterioration in our credit rating; our ability to maintain good labor relations; our ability to maintain brand image, reputation and product quality; lack of full-control over the operations of MillerCoors and other risks discussed in our filings with the SEC, including our most recent Annual Report on Form 10-K. 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.
|Three Months Ended||Nine Months Ended|
|(In millions of $US)||Sept 30, 2016||Sept 30, 2015||Sept 30, 2016||Sept 30, 2015|
|U.S. GAAP : Net Income Attributable to MillerCoors||$||369.2||$||316.5||$||1,134.0||$||1,108.3|
|Plus: Special Items¹||8.3||28.0||84.6||28.0|
|Tax effect of the adjustments to arrive at underlying net income 2||-||(0.1)||(0.2)||(0.1)|
|Non-GAAP Underlying Net Income||$||377.5||$||344.4||$||1,218.4||$||1,136.2|
|Percent change versus prior year MillerCoors non-GAAP underlying net income||9.6%||7.2%|
|1 Current and prior year Special items primarily relate to net costs incurred due to the closure of the Eden Brewery.|
|2 The tax effect of the adjustments to arrive at underlying net income attributable to MillerCoors, a non-GAAP measure is calculated based on the estimated tax rate applicable to the item(s) being adjusted in the period in which they arose.|
|RESULTS OF OPERATIONS|
|(VOLUMES IN THOUSANDS, DOLLARS IN MILLIONS $US)|
|Three Months Ended||Nine Months Ended|
|Sept 30, 2016||Sept 30, 2015||Sept 30, 2016||Sept 30, 2015|
|Total STW volume in Hectoliters||18,265||18,470||53,721||54,573|
|Cost of goods sold||(1,150.8)||(1,173.9)||(3,358.3)||(3,490.6)|
|Marketing, general and administrative expenses||(475.2)||(475.1)||(1,362.0)||(1,333.0)|
|Special items, net||(8.3)||(28.0)||(84.6)||(28.0)|
|Interest income (expense), net||(0.5)||(0.3)||(1.4)||(1.0)|
|Other income (expense), net||1.1||0.2||3.7||4.6|
|Income before income taxes and non-controlling interests||374.0||322.9||1,147.9||1,129.3|
|Net income attributable to non-controlling interests||(3.5)||(5.3)||(10.6)||(17.2)|
|Net income attributable to MillerCoors LLC||$||369.2||$||316.5||$||1,134.0||$||1,108.3|