Molson Coors Brewing Company

BACKGROUND FOR PAPER:
Legal Name of Company – Molson Coors Brewing Company
Ticker Symbol – TAP
Fiscal Year End – December 31
Financial Reporting Framework – U.S. GAAP
Opinion on Financials by Auditors – Unqualified for Year Ending December 29, 2012
Brief Description of Company’s Business Activities – Molson Coors Brewing Company
is a manufacturer and distributer of beer and other beverage products. The company sells
its products under various labels (i.e. Coors, Miller, Molson, Rickard’s, Carling, etc.) and
is licensed to brew and distribute under other labels (i.e. Heineken, Amstel, Foster’s,
Cobra, etc.).
REQUIRED SOURCES:
1) Thomson ONE Business School Edition- http://tobsefin.swlearning.com/
(In addition you may also use http://moneycentral.msn.com or http://finance.yahoo.com/
These sites have lots of industry ratios available.) A PASSCODE AND USERNAME
WILL BE NEEDED TO ACCESS THE THOMSON ONE SITE. I WILL PROVIDE
THIS INFORMATION ONCE IT IS PROVIDED TO ME ASAP.
2) Value Line Investment Survey. Use both the company and industry pages. If you
don’t know how to use this service, visit:
http://www.valueline.com/Tools/How_To_Use_Value_Line_Pages.aspx.
3) As far as where to find the financial statements, they can be found on the Molsoncoors website http://phx.corporate-ir.net/phoenix.zhtml?c=101929&p=irolIRHome and also from the SEC website:
http://www.sec.gov/edgar/searchedgar/companysearch.html

THE ASSIGNMENT:
1. Using Thomson ONE Business School Edition download ten years of stock price and
market index information. Use Excel’s “Slope” function to estimate a beta with these
data. Next, using Value Line find an estimate of the company’s beta.
a. Try to think of reasons why your beta estimate would be different than that of
ValueLine.
b. Explain, what the figure you found (don’t forget to give credit) tells you about
the company’s risk. Is the beta positive or negative?
i. If negative, is it smaller or larger than -1.0?
ii. If positive, is it smaller or larger than 1.0?

2. Quality of Earnings: The value of a stock depends among other things on the income
that the company generates in future periods. (E.g. P/E ratio, NOPAT in corporate
valuation method.) Compare the income for each of the three years presented in the
financial statements. Are there any non-recurring items, such as adjustments for
changes in accounting methods or estimates, changes in valuation allowances,
extraordinary gains/losses or income/losses from discontinuing operations that should
be excluded from an estimate of future income or cash flows from this company? Can
you develop an estimate of recurring income from operations?
3. Calculate the company’s Free Cash Flow and compare it to the total dividends paid in
the most recent year. Explain how and why you calculated NOPAT the way you did.
Could the company increase dividends? Why or why not?
a. To do this you must first estimate your company’s tax rate by comparing pretax
income to income tax expense and rounding this number. If your company has
a loss, you may have to make an assumption regarding carry backs or carry
forwards. If you assume a carryback is done, you may want to look at previous
years incomes to see, if you have something to carryback to.