UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2
on
FORM 10-Q/A
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly period ended June 26, 2005 |
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OR |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to to . |
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Commission File Number: 1-14829
MOLSON COORS BREWING COMPANY
(Exact name of registrant as specified in its charter)
| DELAWARE (State or other jurisdiction of incorporation or organization) |
84-0178360 (I.R.S. Employer Identification No.) |
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1225 17th Street, Denver, Colorado 1555 Notre Dame Street East, Montréal, Québec, Canada (Address of principal executive offices) |
80202 H2L 2R5 (Zip Code) |
303-279-6565 (Colorado)
514-521-1786 (Québec)
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ý NO o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES ý NO o
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of July 29, 2005:
Class A Common Stock—1,284,203 shares
Class B Common Stock—60,986,000 shares
Exchangeable shares:
As of July 29, 2005, the following number of exchangeable shares was outstanding for Molson Coors Canada, Inc.:
Class A exchangeable shares 1,869,695
Class B exchangeable shares 21,244,874
In addition, the registrant has outstanding one share of special Class A voting stock, through which the holders of Class A Exchangeable shares and Class B exchangeable shares of Molson Coors Canada Inc. (a subsidiary of the registrant), respectively, may exercise their voting rights with respect to the registrant. The special Class A and Class B voting stock are entitled to one vote for each of the exchangeable share classes, respectively, excluding shares held by the registrant or its subsidiaries, and generally vote together with the Class A common stock and Class B common stock, respectively, on all matters on which the Class A common stock and class B common stock are entitled to vote. 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.
The purpose of this amendment on Form 10-Q/A to the Quarterly Report on Form 10-Q of Molson Coors Brewing Company for the quarterly period ended June 26, 2005 is to clarify in Item 4. Controls and Procedures, that due to the previously disclosed material weakness with respect to accounting for income taxes, our Global Chief Executive Officer and Global Chief Financial Officer concluded that our disclosure controls and procedures as a whole were not effective as of June 26, 2005. Because of the material weakness, we performed additional procedures to ensure that our disclosures included in the financial statements as of and for the quarter ended June 26, 2005, were fairly presented in all material respects in accordance with generally accepted accounting principles.
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ITEM 4. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures
Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to the Company's management, including our Global Chief Executive Officer and Global Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Global Chief Executive Officer and the Global Chief Financial Officer, with assistance from other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of June 26, 2005, and, based on their evaluation, have determined that a material weakness in internal control over financial reporting existed as of June 26, 2005 with respect to accounting for income taxes. Due to the material weakness our Global Chief Executive Officer and Global Chief Financial Officer concluded that our disclosure controls and procedures as a whole were not effective as of June 26, 2005. Because of the material weakness, we performed additional procedures to ensure that our disclosures included in the financial statements as of and for the quarter ended June 26, 2005, were fairly presented in all material respects in accordance with generally accepted accounting principles.
Accounting for Income Taxes
In the course of its review of income taxes during the second quarter of 2005, management determined that the Company understated its income tax benefit in the first quarter of 2005 by a net $12.4 million (see Note 1). As a result of the circumstances involved, we have concluded that there was a material weakness in internal control over financial reporting at the end of the first quarter.
In reaching this conclusion, management noted that during the first quarter, tax staff was directed toward developing and implementing the tax structure for the merger with Molson. This resulted in insufficient review of tax provision calculations. Together with inadequate systems to determine the provision for income taxes, the income tax benefit for the quarter was materially understated. In addition to amending our Form 10-Q for the first quarter of 2005 to correct the initial recording of a U.S. deferred tax asset as part of the purchase accounting for our UK acquistion, we have corrected these errors.
We are taking the following steps to remediate this material weakness:
We intend to continue to monitor and upgrade our internal controls as necessary and appropriate for our business.
Changes in internal control over financial reporting
The Merger occurred after the fiscal year 2004 and therefore our Molson Canada and Kaiser Brazil business units will complete requirements under Internal Control over Financial Reporting Section 404 of the Sarbanes-Oxley Act of 2002 as of fiscal year end 2006. This effort is in progress, and we are not aware of any material weaknesses in internal control over financial reporting.
The Company has been evaluating changes to its financial accounting and reporting systems in efforts to improve its consolidation processes, increase efficiency and enable additional functionality. In
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the third quarter of 2005, the Company plans to implement significant changes in these systems, specifically a new global chart of accounts, new reporting databases, and a new consolidation accounting system. These changes will primarily impact the United States segment and corporate accounting and consolidation processes. The impact of these changes on the Company's internal control, which are undergoing rigorous review and testing, is expected to be positive.
With the exception of the item discussed above, there were no other changes in internal controls in the second quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
The certifications attached as Exhibits 31 and 32 hereto should be read in conjunction with disclosures set forth herein.
PART II. OTHER INFORMATION
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The following are filed as a part of this Report on Form 10-Q/A:
| Exhibit Number |
Document Description |
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|---|---|---|
| 10.1 | Letter Agreement dated April 27, 2005, between Daniel J. O'Neill and Molson Coors Brewing Company (incorporated by reference to Exhibit 99.1 to Form 8-K filed on April 28, 2005). * | |
| 10.2 | Employment Agreement by and among Molson Coors Brewing Company and W. Leo Kiely III, dated June 27, 2005 (incorporated by reference to Exhibit 99.1 to Form 8-K filed on July 1, 2005). * | |
| 10.3 | Employment Agreement by and among Molson Coors Brewing Company and Peter H. Coors, dated June 27, 2005 (incorporated by reference to Exhibit 99.2 to Form 8-K filed on July 1, 2005). * | |
| 31.1 | Section 302 Certification of Chief Executive Officer. | |
| 31.2 | Section 302 Certification of Chief Financial Officer. | |
| 32 | Written Statement of Chief Executive Officer and Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| MOLSON COORS BREWING COMPANY | |||
By: |
/s/ MARTIN L. MILLER Martin L. Miller Vice President and Global Controller (Chief Accounting Officer) November 2, 2005 |
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| Exhibit Number |
Document Description |
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|---|---|---|
| 10.1 | Letter Agreement dated April 27, 2005, between Daniel J. O'Neill and Molson Coors Brewing Company (incorporated by reference to Exhibit 99.1 to Form 8-K filed on April 28, 2005). * | |
| 10.2 | Employment Agreement by and among Molson Coors Brewing Company and W. Leo Kiely III, dated June 27, 2005 (incorporated by reference to Exhibit 99.1 to Form 8-K filed on July 1, 2005). * | |
| 10.3 | Employment Agreement by and among Molson Coors Brewing Company and Peter H. Coors, dated June 27, 2005 (incorporated by reference to Exhibit 99.2 to Form 8-K filed on July 1, 2005). * | |
| 31.1 | Section 302 Certification of Chief Executive Officer. | |
| 31.2 | Section 302 Certification of Chief Financial Officer. | |
| 32 | Written Statement of Chief Executive Officer and Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) |
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