Miller Coors Reports 9.5% Net Income Growth for 2012 – Tenth & Blake Grows Craft Division by Double Digits

said MillerCoors Chief Executive Officer Tom Long. “Our portfolio transformation strategy is delivering solid results. Coors Light, which is undoubtedly the healthiest major beer brand in the market, continued to show momentum and we led Craft share growth as Tenth and Blake delivered very strong results with Blue Moon and Leinenkugel’s.”

Fourth Quarter and Full Year Highlights

Unless otherwise indicated, all amounts are in U.S. dollars and calculated in accordance with U.S. GAAP. All percentages are versus the prior-year comparable period and include MillerCoors operations in the U.S. and Puerto Rico. Quarterly sales-to-retailers (STRs) results are presented on a trading-day-adjusted basis, as the fourth quarter of 2012 had one more trading day compared with the same quarter in the prior year.

Brand Highlights for the Fourth Quarter and Full Year

Coors Light continued its momentum growing low-single digits for the quarter, outpacing the total category and the Premium Light segment which lost share in a flat industry. The brand enjoyed its eighth consecutive year of volume growth and MillerCoors will enter 2013 with a continued focus on multicultural outreach for Coors Light, including sponsorship of The Mexican Soccer League, Liga MX and the return of “Search for the Coldest” in partnership with Ice Cube. Building on the success of its packaging innovations, MillerCoors will launch the new Coors Light “World’s Most Refreshing Can” in the second quarter of 2013. Miller Lite declined mid-single digits for the quarter and low-single digits for the full year. We will continue to invest in the “It’s Miller Time” campaign and will launch a new iconic bottle for the on-premise in mid-2013, following the positive volume impact of the Miller Lite punch top can in 2012. Miller64 STRs were down low-single digits in the quarter and high-single digits for the full year. Volume trends on the brand have improved significantly since it’s re-positioning in the first quarter of 2012. MillerCoors Premium Light STRs declined low-single digits in the fourth quarter and for the full year.

Tenth and Blake Beer Company grew the MillerCoors Craft and Import portfolio by double digits in the quarter and the full year, driven by Blue Moon Brewing Company and Jacob Leinenkugel Brewing Company. Due primarily to the superior performance of Summer Shandy, Leinenkugel’s grew double digits for the year and other offerings, such as Snowdrift Vanilla Porter were drivers of Leinenkugel’s double-digit growth for the quarter. Blue Moon grew double digits for the year and high-single digits for the quarter. Peroni Nastro Azzurro once again delivered strong results, growing mid-single digits in the quarter and high-single digits for the year.

The MillerCoors Economy portfolio showed improvement for the fourth quarter over the prior two quarters in 2012, declining mid-single digits for the year and low-single digits for the quarter. Miller High Life continued its veterans program and will kick off a partnership with Harley Davidson in mid-2013. Keystone Light continued to drive its “Always Smooth” positioning primarily through digital engagement and localized marketing efforts. The brand will launch new packaging in early 2013.

The Premium Regular portfolio showed its best performance since 2008, down low-single digits for the quarter and down mid-single digits for the year. Miller Genuine Draft’s double digit decline was partly offset by continued growth of Coors Banquet, the only national Premium Regular brand in the industry to gain market share in the quarter, versus prior year. Coors Banquet grew high-single digits for the quarter and mid-single digits for the year, delivering its sixth straight year of volume growth.

Financial Highlights for the Fourth Quarter and Full Year

Domestic net revenue per barrel grew 3.5 percent for the year and 2.9 percent for the quarter as a result of strong net pricing and favorable mix.

Total company net revenue per barrel, including contract brewing and company-owned distributor sales, increased 3.3 percent for the full year and 2.9 percent for the quarter. Third-party contract brewing volumes were up 5.2 percent for the year and down 0.4 percent for the quarter.

Total COGS per barrel increased 1.6 percent for the quarter, driven by commodity inflation and packaging innovation, partially offset by strong cost savings.

Marketing, general and administrative costs increased 3.4 percent for the year and 6.4 percent for the quarter, driven primarily by increased marketing media investments in support of our premium light portfolio.

In the fourth quarter, $25 million of cost savings were achieved, primarily related to procurement savings and brewery efficiencies.

Depreciation and amortization expenses for MillerCoors in the fourth quarter were $70.3 million, and additions to tangible and intangible assets totaled $178.5 million.