U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2004 |
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OR |
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to . |
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Commission file number 0-8251
A. Full name of the plan and the address of the plan, if different from that of the issuer named below:
COORS SAVINGS AND INVESTMENT PLAN
311 10th Street
Golden, Colorado 80401
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
MOLSON COORS BREWING COMPANY
1225 17TH Street, Suite 1875
Denver, Colorado 80202
Pursuant to the requirements of the Securities and Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
Coors Savings and Investment Plan |
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Date: June 29, 2005 |
/s/ MICHAEL J. GANNON |
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| Name: | Michael J. Gannon Vice President, Global Treasurer |
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Page |
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| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1 | ||
FINANCIAL STATEMENTS |
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Statements of Net Assets Available for Benefits—Modified Cash Basis |
2 |
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Statement of Changes in Net Assets Available for Benefits—Modified Cash Basis |
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Notes to Financial Statements |
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SUPPLEMENTAL SCHEDULE |
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Schedule H, line 4i—Schedule of Assets (Held at End of Year) |
10 |
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EXHIBITS INDEX |
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Consent of Independent Registered Public Accounting Firm |
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Clifton
Gunderson LLP
Certified Public Accountants & Consultants
Report of Independent Registered Public Accounting Firm
To
the Molson Coors Company U.S. Pension Committee
as Trustee for the Coors Savings and Investment Plan
Golden, Colorado
We have audited the accompanying statements of net assets available for benefits—modified cash basis of the Coors Savings and Investment Plan (the "Plan") as of December 31, 2004 and 2003 and the related statement of changes in net assets available for benefits—modified cash basis for the year ended December 31, 2004. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As described in Note 2, these financial statements and supplemental schedule were prepared on a modified cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of Coors Savings and Investment Plan as of December 31, 2004 and 2003 and the changes in net assets available for benefits for the year ended December 31, 2004 on the basis of accounting described in Note 2.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information is presented for purposes of additional analysis and is not a required part of the basic financial statements but is supplementary information, required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental information is the responsibility of the Plan's management. The supplemental information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is presented fairly, in all material respects, in relation to the basic financial statements taken as a whole.
s/s Clifton Gunderson LLP
Denver,
Colorado
May 20, 2005
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COORS SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
MODIFIED CASH BASIS
December 31, 2004 and 2003
(In $
thousands)
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2004 |
2003 |
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| INVESTMENTS | ||||||||
| At fair value: | ||||||||
| Investment in mutual funds and money market fund | $ | 307,860 | $ | 282,804 | ||||
| Investment in Coors stock | 24,443 | 20,114 | ||||||
| Participant loans | 9,771 | 9,738 | ||||||
| 342,074 | 312,656 | |||||||
| At contract value: | ||||||||
| Investment in Fixed Fund | 227,127 | 223,640 | ||||||
| NET ASSETS AVAILABLE FOR BENEFITS | $ | 569,201 | $ | 536,296 | ||||
The accompanying notes are an integral part of these financial statements.
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COORS SAVINGSAND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
MODIFIED CASH BASIS
For the Year Ended December 31, 2004
(In $ thousands)
| ADDITIONS TO NET ASSETS | |||||
| Investment income | |||||
| Interest and dividends | $ | 17,524 | |||
| Net appreciation in fair value of investments | 30,394 | ||||
| Total investment income | 47,918 | ||||
| Contributions | |||||
| Participants | 25,131 | ||||
| Employer | 6,496 | ||||
| Total contributions | 31,627 | ||||
| Total additions to net assets | 79,545 | ||||
| DEDUCTIONS FROM NET ASSETS | |||||
| Participant benefit payments | 46,578 | ||||
| Net transfers out | 25 | ||||
| Management fees | 37 | ||||
| Total deductions from net assets | 46,640 | ||||
| NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS | 32,905 | ||||
| NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR | 536,296 | ||||
| NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR | $ | 569,201 | |||
The accompanying notes are an integral part of these financial statements.
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COORS SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2004 and 2003
NOTE 1—GENERAL DESCRIPTION OF PLAN AND TRUST
On February 9, 2005, Adolph Coors Company and Molson Inc. ("Molson") merged (the "Merger") and Adolph Coors Company changed its name to Molson Coors Brewing Company ("MCBC"). The Coors Savings and Investment Plan (the "Plan" or the "S and I Plan") was not affected by the Merger, except that the Coors stock fund is subsequently referred to as the Molson Coors stock fund and the Adolph Coors Class B common stock is subsequently referred to as the Molson Coors Class B common stock. Any reference herein to Molson Coors or MCBC includes the former Adolph Coors Company and its stock. Former Molson employees are not eligible to participate in the Plan.
The S and I Plan and the related Trust Agreement (the "Trust") were established effective January 1, 1974. The Plan was amended and restated effective January 1, 1997, and from time to time is amended to comply with regulatory changes and for other purposes. The Plan's purpose is to encourage employees of the former Adolph Coors Company and its subsidiaries (the "Company") to accumulate savings systematically in order to provide an additional source of income upon retirement, disability or death. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. The S and I Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
The U.S. Pension Committee (the "Committee"), consisting of MCBC employees, is appointed by the Board of Directors of MCBC and acts as fiduciary for the Plan. In accordance with its power as fiduciary, the Committee has entered into trust and asset management agreements with Fidelity Management Trust Company ("Fidelity"), the Plan's trustees.
Eligibility
All full-time, part-time and temporary employees of the Company and certain subsidiaries, who are at least age 18, are eligible to participate in the Plan. Employees of foreign subsidiaries (with the exception of expatriates) and the Memphis hourly union employees were not eligible to participate in the Plan at any time during 2004 and 2003.
Contributions
Contributions can be made to any of the investment options within the Plan which are credited to the individual participants' accounts. Participants are allowed to make basic and additional contributions, as a percentage of their compensation, as follows:
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Basic |
Additional |
Total |
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| All covered employees | 1%-6% | 1%-94% | 100% |
Contributions are to be in whole, not fractional, percentage points. The combined maximum contribution, basic and additional, that any participant is allowed to make is the lesser of 100% in 2004 or $13,000 and 50% in 2003 or $12,000.
Participant contributions deposited prior to December 1, 1986, have been taxed previously and are not taxable when paid to participants. Participant contributions deposited subsequent to November 30, 1986 are taxable when paid to participants.
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For all covered employees, the employer matches 50% of each participant's basic contribution. The maximum percentage contributed by the employer is 6% of participant compensation. The Company may also make discretionary contributions to the Plan. The Company did not make any discretionary contributions in 2004.
Subsequent to December 31, 2004, the Company increased its matching contributions for salaried exempt employees to 75% of each participant's basic contribution up to 6% of participant compensation.
Participant Accounts
Fidelity is responsible for preparing, maintaining, and allocating amounts to individual participants' accounts. Each participant account is credited with the participant's and employer matching contributions and an allocation of (a) the Company's discretionary contributions, and (b) Plan earnings. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account.
Vesting
Participants are immediately vested in their voluntary contributions, the employer's contributions, and all investment earnings on these contributions that are credited to their account. As such, there are no forfeited employer contributions.
Distributions
Participants may withdraw all or a portion of vested contributions subject to certain conditions as specified in the Plan. A participant or beneficiary entitled to receive benefits under the Plan may generally elect the method of payment.
Participant Loans
Participants may borrow up to 50% of the total value of their accounts. The minimum loan amount is $1,000 and the maximum loan amount is $50,000. These loans are available to active employees who are participants. Only one loan may be outstanding at any time. The interest rate is set at one percent above prime rate on the first business day of the month in which the loan is made and remains fixed throughout the term of the loan. Loans are subject to certain repayment provisions upon termination of employment, default, lay-off, unpaid leave of absence or disability. When participants fail to repay their loan balance in accordance with their terms, the unpaid balance is considered a distribution (default) and may be subject to a 10% penalty tax. Participants defaulted on $314,289 and $443,762 of loans during 2004 and 2003, respectively.
Plan Expenses
Participants pay expenses incurred to manage the Plan's assets in that they are netted against investment earnings. The employer pays all other expenses incident to the administration and record keeping of the Plan.
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NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accounts of the Plan are maintained on the modified basis of cash receipts and disbursements as permitted by the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA. This basis of accounting is not in accordance with accounting principles generally accepted in the United States. Under the modified basis of cash receipts and disbursements, certain revenues and related assets are recognized when received rather than when earned and certain expenses are recognized when paid rather than when the obligation is incurred.
The principal items that would be required to be reflected in the financial statements by accounting principles generally accepted in the United States (the amounts of which are not practicable to determine) are as follows:
Investment Valuation and Income Recognition
The Plan's investments are comprised of the following:
The Master Trust, which is comprised of the following investments:
Participant loans are stated at cost, which approximates fair value.
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The Plan presents in the statement of changes in net assets available for benefits the net appreciation (depreciation) in the fair value of its investments which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments.
Benefits
Benefit payments are recorded when paid.
Use of Estimates
The preparation of financial statements in conformity with the modified cash basis of accounting as described above requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Risks and Uncertainties
The Plan provides for various investment options in stocks and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the Statements of Net Assets Available for Benefits and the Statement of Changes in Net Assets Available for Benefits.
NOTE 3—INVESTMENTS IN MASTER TRUST
The Plan's assets are held by Fidelity under a Master Trust Agreement, under which Fidelity executes all transactions at the direction of the Committee.
Some of the S and I Plan's investment assets are held in a Fixed Fund, commingled with investment assets of the Coors 401(k) Savings Plan for Hourly Employees at the Memphis, Tennessee Brewery (the "Memphis Plan"). Both plans participating in the Fixed Fund collectively own the assets in the Fixed Fund based upon investment percentages. Participant transaction activity and income are allocated to benefit plans based upon their relative investment percentages. All other assets of the Master Trust are participant directed.
The total value of the Fixed Fund was $233,508,561 and $229,827,000 at December 31, 2004 and 2003, respectively. The total net investment interest income of the Fixed Fund for the years ended December 31, 2004 and 2003 was approximately $10,380,523 and $11,987,000, respectively. The Plan's interest in the Fixed Fund as a percentage of net assets of the Fixed Fund was 97.3% at December 31, 2004 and 2003.
Included in the Fixed Fund are short term investments and Global Wrap contracts that are reported in the financial statements at contract value because they are fully benefit-responsive. There are no reserves against contract value for credit risk of the contract issuers or otherwise. The total fair value and contract value of the fully benefit-responsive contracts at December 31, 2004 was approximately $234,389,669 and $230,796,270, respectively, and at December 31, 2003 was approximately $234,071,000 and $225,032,000, respectively. The fair value of the benefit responsive features of the contracts at December 31, 2004 and 2003 was $0. The portfolio average yield was
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approximately 4.50% and 5.18%, respectively for 2004 and 2003. The portfolio crediting interest rate was approximately 4.31% and 4.90%, respectively for 2004 and 2003. The crediting interest rate is based on a formula agreed upon with the issuer and is reset quarterly, but cannot be less than zero.
The other investment options offered to participants include fifteen mutual funds, a money market fund and the Molson Coors Stock Fund. The total dividend and interest in the Mutual Fund Investments, the money market fund and for the Molson Coors Stock Fund was $16,923,000 for the year ended December 31, 2004.
NOTE 4—INVESTMENTS
The following investments at December 31, 2004 and 2003 exceed 5% of net assets available for benefits:
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Contract Value (In $ thousands) |
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| Identity |
Description |
2004 |
2003 |
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| Fixed Fund | Investment contracts | $ | 224,489 | $ | 218,973 | |||
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Fair Value |
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|---|---|---|---|---|---|---|---|---|
| Identity |
Description |
2004 |
2003 |
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| Fidelity Magellan Fund | Mutual Fund | $ | 64,247 | $ | 68,138 | |||
| Fidelity Growth and Income Fund | Mutual Fund | $ | 39,182 | $ | 38,731 | |||
| Fidelity Low Price Stock Fund | Mutual Fund | $ | 49,730 | $ | 36,734 | |||
During 2004, the Plan's investments including gains and losses on investments bought and sold, as well as held during the year appreciated in value as follows (in $ thousands):
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Realized Gains |
Unrealized Gains |
Total 2004 |
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|---|---|---|---|---|---|---|---|---|---|
| Molson Coors Stock Fund | $ | 1,702 | $ | 4,944 | $ | 6,646 | |||
| Mutual Funds and Money Market Fund | 1,238 | 22,510 | 23,748 | ||||||
| Total | $ | 2,940 | $ | 27,454 | $ | 30,394 | |||
The cost of investments sold or transferred is determined on a participant level by the average cost method.
NOTE 5—PLAN TERMINATION
The company established the Plan with the intention that it continue indefinitely, but reserves the right to terminate the Plan at any time. In the event of Plan termination, any decrease or increase in net assets as determined by the Trustee will be allocated to the participants based on the current investment elections. The entire amount in each participants account will be distributed with the participant's consent.
NOTE 6—INCOME TAXES
The Company has received a favorable determination letter dated December 1, 2003 from the Internal Revenue Service ("IRS") as to the qualified status of the Plan and Trust. The IRS has
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determined and has informed the Company that the Plan and related trusts, in form, satisfy applicable sections of the Internal Revenue Code ("IRC"). The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan's tax counsel believe that the Plan currently complies, in form and operation, with the applicable requirements of the IRC. Therefore, no provision for income taxes has been made in the Plan's financial statements.
NOTE 7—PARTIES-IN-INTEREST TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Fidelity. Fidelity is the trustee as defined by the Plan and, therefore, these transactions are party-in-interest transactions under ERISA. Fees charged to the Plan investments for investment management services by Fidelity are reported as a reduction to investment return. Administration fees are paid by the Company.
This information is an integral part of the accompanying financial statements.
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COORS SAVINGS AND INVESTMENT PLAN
SCHEDULE H, LINE 4i—SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2004
(In $ thousands)
| (a) Party-in- interest |
(b) Identity of issuer, borrower, lessor or similar party |
(c) Description of investment including maturity date, rate of interest, collateral, par or maturity value |
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(e) Current Value |
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|---|---|---|---|---|---|---|---|---|---|
| Plan's Interest In Fixed Fund | |||||||||
Global Wrap Contracts |
Maturity 7/28/2005 |
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JP Morgan |
4.53% interest |
$ |
57,703 |
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Monumental Life |
4.52% interest |
57,703 |
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Rabo Bank |
4.52% interest |
57,703 |
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UBS AG |
4.52% interest |
57,703 |
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230,812 |
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Other |
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| * | Fidelity Management Company STIF | 1.90% interest | 2,712 | ||||||
| TOTAL FIXED FUND | $ | 233,524 | |||||||
| PLAN'S INTEREST IN FIXED FUND | $ | 227,127 | |||||||
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COORS SAVINGS AND INVESTMENT PLAN
SCHEDULE H, LINE 4i—SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2004
(In $ thousands, except units/shares and
values per share)
| (a) Party- in- interest |
(b) Identity of issuer, borrower, lessor or similar party |
(c) Description of investment including maturity date, rate of interest, collateral, par or maturity value |
Units/ Shares |
Value Per Unit/Share |
(d) Cost |
(e) Current Value |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| * | Molson Coors Brewing Company | Common Stock | 403,418 | $ | 60.59 | $ | 23,526 | $ | 24,443 | ||||||
| * | Fidelity RET Gov't Money Market | Money Market | 2,826,831 | 1.00 | 2,827 | 2,827 | |||||||||
| Plan's Interest in Mutual Funds | |||||||||||||||
| * | Fidelity Magellan | Mutual Fund | 619,016 | 103.79 | 58,366 | 64,247 | |||||||||
| * | Fidelity Growth and Income | Mutual Fund | 1,025,449 | 38.21 | 35,787 | 39,182 | |||||||||
| Spartan U.S. Equity Index | Mutual Fund | 483,074 | 42.86 | 17,420 | 20,705 | ||||||||||
| * | Fidelity Diversified International | Mutual Fund | 611,127 | 28.64 | 14,486 | 17,503 | |||||||||
| * | Fidelity Fund | Mutual Fund | 261,430 | 29.88 | 8,049 | 7,812 | |||||||||
| * | Fidelity Equity Income | Mutual Fund | 309,856 | 52.78 | 14,955 | 16,354 | |||||||||
| * | Fidelity Blue Chip Growth | Mutual Fund | 559,786 | 41.71 | 23,736 | 23,349 | |||||||||
| * | Fidelity Low-Priced Stock | Mutual Fund | 1,235,518 | 40.25 | 36,337 | 49,730 | |||||||||
| * | Fidelity Asset Manager | Mutual Fund | 384,810 | 16.21 | 6,237 | 6,238 | |||||||||
| * | Fidelity Asset Manager: Growth | Mutual Fund | 503,229 | 14.82 | 7,722 | 7,458 | |||||||||
| * | Fidelity Asset Manager: Income | Mutual Fund | 225,448 | 12.67 | 2,655 | 2,856 | |||||||||
| American New Perspective R4 | Mutual Fund | 883,570 | 27.58 | 19,445 | 24,369 | ||||||||||
| USAA International | Mutual Fund | 75,487 | 21.85 | 1,385 | 1,649 | ||||||||||
| PIMCO Total Return | Mutual Fund | 1,119,369 | 10.67 | 12,000 | 11,944 | ||||||||||
| AIM Small Company Growth Fund | Mutual Fund | 925,778 | 12.57 | 12,237 | 11,637 | ||||||||||
| 270,817 | 305,033 | ||||||||||||||
| Participant loans; interest rates ranging from 5.0% to 10.5% | 9,771 | 9,771 | |||||||||||||
| TOTAL PLAN ASSETS (HELD AT END OF YEAR) | $ | 569,201 | |||||||||||||
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| Exhibit No. |
Description |
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| 23 | Consent of Independent Registered Public Accounting Firm |
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