Beam Inc.: Beam Reports Third Quarter Results

  Beam Inc.: Beam Reports Third Quarter Results

UK Regulatory Announcement

  *Sustained Global Growth for Bourbon and Innovations Helps Drive Continued
    Market Outperformance
  *Diluted EPS before Charges/Gains Increases at Solid Double-Digit Rate
  *Company Reaffirms Full-Year Earnings Target

DEERFIELD, Ill.

Beam Inc. (NYSE: BEAM), a leading global premium spirits company, today
reported strong results for the third quarter of 2012.

Net sales increased 8% and were up 4% on a comparable basis, even with a
challenging comparison to strong North America sales in the year-ago quarter.
Comparable sales growth was broad-based and benefited from innovations that
improved product mix, higher pricing, and increased volumes. Comparable sales
grew across the company’s three segments, with particularly strong growth for
the company’s global Power Brands in core markets.

On a reported basis (GAAP), diluted earnings per share from continuing
operations were $0.57 versus a loss of $0.53 in the year-ago quarter. Diluted
EPS before charges/gains was $0.62, up 17%, with leverage delivered by
sustained top-line outperformance, improved price/mix, and lower interest
expense.

Through the first three quarters of 2012, reported net sales increased 5% and
were up 7% on a comparable basis. Diluted EPS before charges/gains is up 21%
year to date, and is up 526% on a reported basis. Reported earnings
comparisons reflect the impact of costs in 2011 associated with the separation
of Fortune Brands’ businesses.

           Stronger Portfolio, Market Position and Earnings Growth

“One year after becoming a pure-play spirits company, Beam is creating value
with a stronger brand portfolio, a stronger industry position, and stronger
earnings growth,” said Matt Shattock, president and chief executive officer of
Beam Inc. “With momentum from our investments in brand building, enhanced
routes to market that leverage our broad brand portfolio, and synergy-driven
acquisitions, we’ve exceeded our long-term goal over the past year by
increasing sales at approximately twice the growth rate of our global market
footprint. Our global growth is supported by our strengthened #2 position in
the United States, the world’s most profitable market, and fast growth in key
categories and geographies around the world.”

“Against this backdrop, Beam delivered better-than-expected third-quarter
results as we outperformed our global market despite a challenging comparison
to the timing of year-ago sales in North America. The sustained rapid growth
of the global Bourbon category, excellent consumer response to our innovations
and high-impact marketing, and timing of expenses helped drive upside to our
expectations. Our newly acquired Pinnacle Vodka grew 23% in its first full
quarter, and market outperformance in our EMEA and APSA segments further
supported our results. Favorable price and product mix helped improve margins
in the quarter.”

Financial Highlights for the Third Quarter and Year to Date:

  *Income from continuing operations was $91.7 million for the third quarter,
    or $0.57 per diluted share, compared to a loss of $82.0 million ($0.53 per
    share), for the third quarter of 2011.

       *For the year to date (nine months), income from continuing operations
         was $271.4 million, or $1.69 per diluted share, up from $0.27 in
         2011.

  *Excluding charges and gains, diluted EPS from continuing operations was
    $0.62 for the third quarter, up 17% from $0.53 in the year-ago quarter.

       *For the year-to-date period, diluted EPS before charges/gains was
         $1.73, up 21% from $1.43.

  *Reported net sales for the third quarter were $627.5 million (excluding
    excise taxes), up 8%.

       *For the year-to-date period, reported net sales increased 5%.

  *On a comparable basis, which adjusts for foreign exchange and
    acquisitions/divestitures, net sales were up 4% for the third quarter and
    up 7% for the year-to-date period.

       *Comparable net sales by segment: North America +2% in Q3 and +7% YTD;
         Europe/Middle East/Africa (EMEA) +5% in Q3 and +5% YTD; Asia
         Pacific/South America (APSA) +10% in Q3 and +8% YTD.

  *Operating income for the third quarter was $162.4 million, up 488%.

       *For the year-to-date period, operating income increased 62%.

  *Operating income before charges/gains for the quarter was $165.0 million,
    up 16%.

       *For the year-to-date period, operating income before charges/gains
         increased 14%.

  *Return on invested capital before charges/gains (rolling 12 months) was 7%
    and was 23% excluding intangibles.

       Investing in Future Growth and Reaffirming 2012 Earnings Target

“Our continued strong performance, the health of the global spirits market and
robust demand for Bourbon together reinforce our confidence in the strategy we
discussed three months ago to increase investments in the second half of 2012
to support long-term growth. We are executing this strategy by stepping up
brand-equity-building investment by a double-digit rate for a third
consecutive year in 2012, and accelerating the laydown of more aged spirits to
support future demand,” Shattock said.

“As we had planned, the lion’s share of these increased strategic investments
will come in the fourth quarter. In fact, we anticipate that our
fourth-quarter brand investment will be more than 20% higher than last year as
we seek to further enhance our brand equities and fuel successful high-return
advertising in the key holiday selling season, particularly in priority
categories like Bourbon and core markets like the United States. While the
timing of this increased investment will likely cause fourth quarter earnings
to be down versus the prior-year period, we believe these are the right
investments for the long-term momentum of our business. We are able to make
these investments even while reaffirming our target for Beam’s diluted EPS
before charges/gains to grow at a low-double-digit rate for the full year.

“We like our continued marketplace momentum as we deliver growth on top of
growth, and we expect to enter 2013 in a strong position. We will discuss our
earnings outlook for the year ahead next quarter,” Shattock said.

The company continues to expect that its 2012 acquisitions will be accretive
to full-year earnings per share by a few cents. The company also reaffirmed
that it is targeting an earnings-to-free-cash conversion rate for 2012 in the
range of approximately 80%, which incorporates the company’s previously
discussed investment of free cash flow to barrel more aged spirits.

Key Brand Performance

Comparable net sales growth, year-to-date 2012 (January – September):

               Comparable

               Net Sales Growth (1)
Power Brands   +11%
Jim Beam       +8%
Maker’s Mark   +23%
Sauza          +6%
Pinnacle       +22%*
Courvoisier    +15%
Canadian Club  +3%
Teacher’s      +7%
              
Rising Stars   +7%
Laphroaig      +6%
Knob Creek     +15%
Basil Hayden   +31%
Kilbeggan      +31%
Cruzan         +13%
Hornitos       -11%
EFFEN          -23%
Pucker Vodka   -6%
Skinnygirl     +19%
Sourz          +12%
              
Local Jewels   -3%
              
Value Creators +1%
              
Total (2)      +7%

Results include ready-to-drink products

(1) Comparable net sales growth rate represents the percentage increase or
decrease in reported net sales in accordance with U.S. GAAP, adjusted for
certain items. A reconciliation from reported to comparable net sales growth
rates, a non-GAAP measure, and the reasons why management believes these
adjustments are useful are included in the attached financial tables.

(2) Total represents consolidated Beam comparable net sales (excluding excise
taxes), including non-branded sales.

* Reflects sales growth since completion of acquisition in June.

About Beam Inc.

As one of the world’s leading premium spirits companies, Beam is Crafting the
Spirits that Stir the World. Consumers from all corners of the globe call for
the company’s brands, including Jim Beam Bourbon, Maker's Mark Bourbon, Sauza
Tequila, Pinnacle Vodka, Canadian Club Whisky, Courvoisier Cognac, Teacher's
Scotch Whisky, Cruzan Rum, Hornitos Tequila, Knob Creek Bourbon, Laphroaig
Scotch Whisky, Kilbeggan Irish Whiskey, EFFEN Vodka, Pucker Flavored Vodka,
Larios Gin, Whisky DYC, DeKuyper Cordials, and Skinnygirl Cocktails. Beam is
focused on delivering superior performance with its unique combination of
scale with agility and a strategy of Creating Famous Brands, Building Winning
Markets and Fueling Our Growth.Beam and its 3,200 passionate associates
worldwide generated 2011 sales of $2.8 billion, volume of 34 million 9-liter
cases and some of the industry’s fastest growing innovations.

Headquartered in Deerfield, Illinois, Beam is traded on the New York Stock
Exchange under the ticker symbol BEAM and is included in the S&P 500 Index and
the MSCI World Index. For more information on Beam, its brands, and its
commitment to social responsibility, please visit www.beamglobal.com and
www.drinksmart.com.

Forward-Looking Statements

This press release contains forward-looking statements, as that term is
defined in the Private Securities Litigation Reform Act of 1995. Readers are
cautioned that these forward-looking statements speak only as of the date
hereof, and the company does not assume any obligation to update, amend or
clarify them to reflect events, new information or circumstances occurring
after the date of this release. Actual results may differ materially from
those projected as a result of certain risks and uncertainties, including but
not limited to: general economic conditions and credit market instability,
particularly in Europe; customer defaults and related bad debt expense;
competitive market pressures (including pricing pressures); changes in
customer preferences and trends; risks pertaining to strategic acquisitions
and joint ventures, particularly financial and integration risks; any possible
downgrades of the company's credit ratings; commodity and energy price
volatility; risks associated with doing business outside the United States,
including civil and political unrest, local labor conditions, changes in laws,
governmental regulations and policies, and compliance with anti-corruption
statutes; fluctuations in currency exchange rates; inability to attract and
retain qualified personnel; the impact of excise tax increases and customs
duties on distilled spirits; the status of the U.S. rum excise tax cover-over
program; dependence on performance of distributors, promoters and other
marketing arrangements; costs of certain employee and retiree benefits and
returns on pension assets; tax law changes and/or interpretation of existing
tax laws; potential liabilities, costs and uncertainties of litigation;
ability to secure and maintain rights to trademarks and trade names;
impairment in the carrying value of goodwill or other acquired intangible
assets; disruptions at production facilities; and other risks and
uncertainties described from time to time in the Company's Securities and
Exchange Commission filings.

Use of Non-GAAP Financial Information

This press release includes measures not derived in accordance with generally
accepted accounting principles (“GAAP”), including comparable net sales,
diluted EPS before charges/gains, operating income before charges/gains,
return on invested capital, and earnings-to-free-cash conversion rate. These
measures should not be considered in isolation or as a substitute for any
measure derived in accordance with GAAP, and may also be inconsistent with
similar measures presented by other companies. Reconciliation of these
measures to the most closely comparable GAAP measures, and reasons for the
company’s use of these measures, are presented in the attached pages.



Beam Inc.
Consolidated Income Statement
(Unaudited)
                                                                              
                     Three Months Ended September 30,      Nine Months Ended September 30,
(In millions,                                  %                                       %
except per share     2012         2011         Change      2012          2011          Change
amounts)
                                                                                       
Sales                $ 778.3      $ 707.3                  $ 2,193.6     $ 2,083.1
Less: Excise          (150.8 )    (128.1 )                (436.8  )    (409.5  )
taxes
Net sales              627.5        579.2      8.3   %       1,756.8       1,673.6     5.0   %
                                                                                       
Cost of goods         256.0      243.4     5.2   %      723.7       714.7      1.3   %
sold
                                                                                       
Gross profit           371.5        335.8      10.6  %       1,033.1       958.9       7.7   %
                                                                                       
Advertising and
marketing              107.5        96.0       12.0  %       282.2         261.7       7.8   %
expense
Selling, general
and                    96.3         135.6      -29.0 %       301.4         334.2       -9.8  %
administrative
expense
Amortization of
intangible             4.3          4.2        2.4   %       12.8          12.2        4.9   %
assets
Restructuring          1.0          3.8                      3.7           5.7
charges
Business              -          68.6                   13.8        85.8    
separation costs
                                                                                       
Operating income       162.4        27.6       488.4 %       419.2         259.3       61.7  %
                                                                                       
Interest expense       28.5         26.5       7.5   %       79.9          86.5        -7.6  %
Loss on early
extinguishment         -            134.0                    -             134.0
of debt
Other income          (1.9   )    (37.7  )                (30.3   )    (34.6   )
                                                                                       
Income (loss)
from continuing
operations
before income          135.8        (95.2  )                 369.6         73.4        403.5 %
taxes
                                                                                       
Income tax
expense               44.1       (13.2  )                98.2        31.3    
(benefit)
                                                                                       
Income (loss)
from continuing        91.7         (82.0  )                 271.4         42.1        544.7 %
operations
                                                                                       
Income (loss)
from
discontinued          (15.2  )    495.8                  (15.3   )    784.9   
operations, net
of tax
                                                                                       
Net income             76.5         413.8      -81.5 %       256.1         827.0       -69.0 %
Less:
Noncontrolling
interests -           -          0.7                    -           4.1     
discontinued
operations
                                                                                       
Net income
attributable to      $ 76.5      $ 413.1     -81.5 %     $ 256.1      $ 822.9      -68.9 %
Beam Inc.
                                                                                       
Basic earnings
(loss) per
common share:
Continuing           $ 0.58       $ (0.53  )               $ 1.72        $ 0.27        537.0 %
operations
Discontinued          (0.10  )    3.20                   (0.10   )    5.06    
operations
Net income           $ 0.48      $ 2.67      -82.0 %     $ 1.62       $ 5.33       -69.6 %
                                                                                       
Diluted earnings
(loss) per
common share:
Continuing           $ 0.57       $ (0.53  )               $ 1.69        $ 0.27        525.9 %
operations
Discontinued          (0.10  )    3.20                   (0.10   )    4.97    
operations
Net income           $ 0.47      $ 2.67      -82.4 %     $ 1.59       $ 5.24       -69.7 %
                                                                                       
Weighted-average
common shares
outstanding
Basic                  158.6        154.8      2.5   %       157.9         154.3       2.3   %
Diluted                161.4        154.8      4.3   %       160.6         157.2       2.2   %



Beam Inc.
Condensed Consolidated Balance Sheet
(Unaudited)
                                                             
                                                                  
(In millions)                                   September 30,     December 31,
                                                2012              2011
Assets
Cash and cash equivalents                       $   147.5         $   218.3
Accounts receivable                                 451.7             385.8
Inventories
Maturing spirits                                    1,379.6           1,283.2
Finished products                                   218.3             167.3
Raw materials, supplies and work in process        135.8            101.0
                                                                  
Total inventories                                   1,733.7           1,551.5
Other current assets                               295.0            278.8
                                                                  
Total current assets                                2,627.9           2,434.4
Property, plant and equipment                       769.7             729.7
Goodwill and other intangible assets                4,874.8           4,202.9
Other assets                                       132.3            124.8
                                                                  
Total assets                                    $   8,404.7       $   7,491.8
                                                                  
Liabilities and Equity
Short-term debt, including current
portion of long-term debt                       $   289.2         $   28.4
Accounts payable                                    173.8             206.1
Long-term debt                                      2,225.2           1,902.1
Other liabilities                                  1,241.1          1,255.5
                                                                  
Total liabilities                                   3,929.3           3,392.1
                                                                  
Total equity                                       4,475.4          4,099.7
                                                                  
Total liabilities and equity                    $   8,404.7       $   7,491.8



Beam Inc.
Use of Non-GAAP Financial Information


Management believes that the non-GAAP measures used in this release provide
investors with important perspectives into the Company’s ongoing business
performance by excluding certain items, referred to as “charges / gains,” that
management believes are not indicative of the Company's underlying results for
purposes of analyzing the Company's performance on a year-over-year basis. The
Company’s definition of charges / gains includes restructuring charges, other
charges related to restructuring initiatives that cannot be reported as
restructuring under GAAP, acquisition and integration related costs, dividend
distribution gains from the wind down of our former Maxxium investment, costs
associated with the sale of the Company's golf business and spin-off of the
Company's home and security business (together, the "Separation"), the
one-time sales and margin impact of transitioning to our long-term
distribution agreement in Australia, tax indemnification payments received
from the seller of an acquired business and other unusual income tax matters.
In addition, the 2011 period includes adjustments to reflect Beam as a
standalone company at January 1, 2011, including adjustments to interest
expense (reflecting the debt reduction related to the Separation at January 1,
2011), an estimated standalone company effective tax rate and an estimated
standalone company corporate cost structure, as described in more detail in
the Company's fourth quarter 2011 earnings release.



Non-GAAP measures included in this release are identified as “before charges /
gains,” “comparable,” “adjusted” and “constant currency.” The Company does not
intend for this information to be considered in isolation or as a substitute
for the related GAAP measures. Other companies may define the measures
differently. Reconciliations of non-GAAP measures to the most closely
comparable GAAP measures, together with a further explanation as to why
management believes the non-GAAP measures provide useful information, are
included on the following pages.

                                        
                                        
Beam Inc.
Reconciliations of GAAP to Non-GAAP Measures (Unaudited)
($ in millions, except per share)
                                                                                                                                             
                              Three Months Ended September 30, 2012     Three Months Ended September 30, 2011    % Increase
                                                        Before                                     Before                     Before
                                          Adjustments   Charges/                     Adjustments   Charges/                   Charges/
                              GAAP        (See Detail   Gains           GAAP         (See Detail   Gains         GAAP         Gains
                                          Below)                                     Below)
                                                        (Non-GAAP)                                 (Non-GAAP)                 (Non-GAAP)
Net sales                     $ 627.5        -          $   627.5       $  579.2        -          $  579.2         8.3   %      8.3   %
Cost of goods sold             256.0      (0.7   )                     243.4      (2.6   )
                                                                                                                                                        
Gross profit                    371.5        0.7            372.2          335.8        2.6           338.4         10.6  %      10.0  %
                                                                                                                                                        
Advertising and marketing       107.5        -                             96.0         -
expense
Selling, general and            96.3         (0.9   )                      135.6        (39.7  )
administrative expense
Amortization of intangible      4.3          -                             4.2          -
assets
Restructuring charges           1.0          (1.0   )                      3.8          (3.8   )
Business separation costs      -          -                           68.6       (68.6  )
                                                                                                                                                        
Operating income                162.4        2.6            165.0          27.6         114.7         142.3         488.4 %      16.0  %
Interest expense                28.5         -                             26.5         4.5
Loss on early                   -            -                             134.0        (134.0 )
extinguishment of debt
Other (income) expense         (1.9  )     -                           (37.7 )     33.6   
                                                                                                                                                        
Income (loss) from
continuing operations           135.8        2.6                           (95.2 )      210.6
before income taxes
Income tax expense             44.1       (5.1   )                     (13.2 )     45.2   
(benefit)
    Effective tax rate          32.5  %                     28.2   %       13.9  %                    27.7   %
                                                                                                                                                        
                                                                                                                                                        
Income (loss) from            $ 91.7       7.7       $   99.4        $  (82.0 )     165.4     $  83.4                       19.2  %
continuing operations
                                                                                                                                                        
Diluted EPS - continuing      $ 0.57       0.05      $   0.62        $  (0.53 )     1.06      $  0.53                       17.0  %
operations
                                                                                                                                                        
                                                                                                                                                        
Adjustments Detail by Applicable Financial Statement Line Items
                                                                                                                                                        
                              Cost of                                                Pre-tax                     Income       Diluted
Three months ended            goods       SG&A          Restructuring   Operating    income        Income        from cont.   EPS -
September 30, 2012            sold        expense       charges         income       -cont.        taxes         operations   cont.
                                                                                     operations                               operations
                                                                                                                                                        
1   Restructuring charges     $ -         $  -          $   0.6         $  (0.6  )   $  (0.6   )   $  (0.4   )   $  (0.2  )   $  -
    (a)
2   Other charges (a)           -            0.2            -              (0.2  )      (0.2   )      -             (0.2  )      -
3   Acquisition/integration     (0.7  )      (1.1   )       (1.6   )       3.4          3.4           1.2           2.2          0.01
    related costs (b)
4   Income tax adjustment      -          -            -            -          -           (5.9   )     5.9        0.04  
    (c)
                              $ (0.7  )   $  (0.9   )   $   (1.0   )    $  2.6      $  2.6       $  (5.1   )   $  7.7      $  0.05  
                                                                                                                                                        
                                                                                                   Interest,     Pre-tax                                Diluted
Three months ended            Cost of     SG&A          Restructuring   Separation   Operating     debt          income       Income       Income       EPS -
September 30, 2011            goods       expense       charges         costs        income        extinguish-   -cont.       taxes        from cont.   cont.
                              sold                                                                 ment loss &   operations                operations   operations
                                                                                                   other exp.
                                                                                                                                                        
1   Restructuring charges     $ -         $  -          $   (3.8   )    $  -         $  3.8        $  -          $  3.8       $  -         $  3.8       $  0.03
    (a)
2   Other charges (a)           (2.6  )      (3.3   )       -              -            5.9           -             5.9          -            5.9          0.04
3   Acquisition/integration     -            (25.0  )       -              -            25.0          -             25.0         -            25.0         0.16
    related costs (b)
4   Separation costs (d)        -            -              -              (68.6 )      68.6          -             68.6         -            68.6         0.44
5   Standalone company          -            (11.4  )       -              -            11.4          4.5           6.9          -            6.9          0.04
    adjustment (e)
    Loss on early
6   extinguishment of debt      -            -              -              -            -             (134.0 )      134.0        -            134.0        0.85
    (f)
7   Maxxium distribution        -            -              -              -            -             7.6           (7.6  )      -            (7.6  )      (0.05 )
    (g)
8   Tax indemnification (h)     -            -              -              -            -             26.0          (26.0 )      -            (26.0 )      (0.16 )
9   Income tax adjustment      -          -            -            -          -           -           -          45.2       (45.2 )     (0.29 )
    (c)
                              $ (2.6  )   $  (39.7  )   $   (3.8   )    $  (68.6 )   $  114.7     $  (95.9  )   $  210.6    $  45.2     $  165.4    $  1.06  
                                                                                                                                                        
(a) Adjustment to eliminate restructuring and other charges (and credits) primarily related to facility consolidations, supply chain and distribution and other
    organizational streamlining initiatives.
                                                                                                                                                        
    The 2012 adjustments relate to the acquisition and integration of the Pinnacle and Calico Jack assets ("Pinnacle") and Cooley business, consisting primarily
(b) of expenses incurred in connection with integrating these businesses into the Company's existing operational structure (e.g., accelerated depreciation,
    employee retention, information technology systems integration costs and other organizational streamlining expenses). The 2011 adjustment relates to
    acquisition related contingent consideration accrued in September 2011.
                                                                                                                                                        
    The adjustment in the 2012 period primarily relates to our annual reconciliation of the 2011 income tax filing to the 2011 provision for income taxes. The
(c) adjustment in the 2011 period is to eliminate income tax related matters (related to resolution of routine foreign and US income tax audit examinations) and
    to adjust income tax expense to Beam's estimated effective tax rate as a standalone Spirits business.
                                                                                                                                                        
(d) Adjustment to eliminate nonrecurring business separation costs incurred to implement the Separation, principally transaction and professional advisory fees,
    severance and other employee related costs and certain other costs incurred in connection with the Separation.
                                                                                                                                                        
    Adjustments to reflect estimated expenses as a standalone Spirits business, including: (1) $11.4 million operating expense adjustment to reflect a lower
(e) corporate cost structure, and (2) $4.5 million interest expense adjustment to assume the Separation-related debt reduction had been completed as of January 1,
    2011. The Company estimated its lower corporate cost structure based on analysis and projections of costs expected to be incurred by the Company had the
    Separation occurred at January 1, 2011.
                                                                                                                                                        
(f) Adjustment to eliminate loss on early extinguishment of debt, which was related to the Separation.
                                                                                                                                                        
(g) Adjustment to eliminate a gain related to a dividend distribution received in connection with the wind down of our former Maxxium investment.
                                                                                                                                                        
(h) Nontaxable reimbursement received from seller of an acquired business for resolution of certain tax matters for years prior to our ownership.



Beam Inc.
Reconciliations of GAAP to Non-GAAP Measures (Unaudited)
($ in millions, except per share)
                                                                                                                                                               
                              Nine Months Ended September 30, 2012        Nine Months Ended September 30, 2011        % Increase
                                                          Before                                        Before                      Before
                                            Adjustments   Charges/                        Adjustments   Charges/                    Charges/
                              GAAP          (See Detail   Gains           GAAP            (See Detail   Gains         GAAP          Gains
                                            Below)                                        Below)
                                                          (Non-GAAP)                                    (Non-GAAP)                  (Non-GAAP)
Net sales                     $ 1,756.8        -          $  1,756.8      $  1,673.6         (46.3  )   $ 1,627.3        5.0    %      8.0   %
Cost of goods sold             723.7        (1.1   )                     714.7         (31.3  )
                                                                                                                                                                           
Gross profit                    1,033.1        1.1           1,034.2         958.9           (15.0  )     943.9          7.7    %      9.6   %
                                                                                                                                                                           
Advertising and marketing       282.2          -                             261.7           -
expense
Selling, general and            301.4          (16.8  )                      334.2           (63.7  )
administrative expense
Amortization of intangible      12.8           -                             12.2            -
assets
Restructuring charges           3.7            (3.7   )                      5.7             (5.7   )
Business separation costs      13.8         (13.8  )                     85.8          (85.8  )
                                                                                                                                                                           
Operating income                419.2          35.4          454.6           259.3           140.2        399.5          61.7   %      13.8  %
Interest expense                79.9           -                             86.5            6.5
Loss on early                   -              -                             134.0           (134.0 )
extinguishment of debt
Other (income) expense         (30.3   )     19.9                        (34.6    )     34.7   
                                                                                                                                                                           
Income from continuing
operations before income        369.6          15.5                          73.4            233.0
taxes
    Income tax expense         98.2         9.5                         31.3          49.9   
    Effective tax rate          26.6    %                    28.0     %      42.6     %                   26.5    %
                                                                                                                                                                           
                                                                                                                                                                           
Income from continuing        $ 271.4        6.0       $  277.4        $  42.1          183.1     $ 225.2          544.7  %      23.2  %
operations
                                                                                                                                                                           
Diluted EPS - continuing      $ 1.69         0.04      $  1.73         $  0.27          1.16      $ 1.43           525.9  %      21.0  %
operations
                                                                                                                                                                           
                                                                                                                                                                           
Adjustments Detail by Applicable Financial Statement Line Items
                                                                                                                                                                           
                                                                                                        Other         Pre-tax                    Income       Diluted
Nine Months Ended September   Cost of       SG&A          Restructuring   Separation      Operating     (income)      income        Income tax   from cont.   EPS -
30, 2012                      goods sold    expense       charges         costs           income        expense       -cont.        expense      operations   cont.
                                                                                                                      operations                              operations
                                                                                                                                                                           
1   Restructuring charges     $ -           $  -          $  (1.5     )   $  -            $  1.5        $ -           $  1.5        $  0.4       $  1.1       $  0.01
    (a)
2   Other charges (a)           (0.2    )      (0.6   )      -               -               0.8          -              0.8           0.3          0.5          -
3   Acquisition/integration     (0.9    )      (16.2  )      (2.2     )      -               19.3         -              19.3          3.7          15.6         0.10
    related costs (b)
4   Separation costs (c)        -              -             -               (13.8    )      13.8         -              13.8          5.3          8.5          0.05
5   Maxxium distribution        -              -             -               -               -            1.9            (1.9   )      -            (1.9  )      (0.01 )
    (d)
6   Tax indemnification (e)     -              -             -               -               -            18.0           (18.0  )      -            (18.0 )      (0.11 )
7   Income tax adjustment      -            -           -             -             -          -            -           (0.2  )     0.2        -     
    (f)
                              $ (1.1    )   $  (16.8  )   $  (3.7     )   $  (13.8    )   $  35.4      $ 19.9       $  15.5      $  9.5      $  6.0      $  0.04  
                                                                                                                                                                           
                                                                                                                      Interest,     Pre-tax                                Diluted
Nine Months Ended September                 Cost of                       Restructuring   Separation    Operating     debt          income       Income tax   Income       EPS -
30, 2011                      Net sales     goods sold    SG&A expense    charges         costs         income        extinguish-   -cont.       expense      from cont.   cont.
                                                                                                                      ment loss &   operations                operations   operations
                                                                                                                      other exp.
                                                                                                                                                                           
1   Restructuring charges     $ -           $  -          $  -            $  (5.7     )   $  -          $ 5.7         $  -          $  5.7       $  -         $  5.7       $  0.03
    (a)
2   Other charges (a)           -              (8.6   )      (2.7     )      -               -            11.3           -             11.3         -            11.3         0.07
3   Acquisition/integration     -              -             (25.0    )      -               -            25.0           -             25.0         -            25.0         0.16
    related costs (b)
4   Separation costs (c)        -              -             -               -               (85.8  )     85.8           -             85.8         -            85.8         0.55
5   Australia distribution      (46.3   )      (22.7  )      -               -               -            (23.6   )      -             (23.6 )      -            (23.6 )      (0.15 )
    one-time sale (g)
6   Standalone company          -              -             (36.0    )      -               -            36.0           6.5           29.5         -            29.5         0.19
    adjustment (h)
    Loss on early
7   extinguishment of debt      -              -             -               -               -            -              (134.0 )      134.0        -            134.0        0.85
    (i)
8   Maxxium distribution        -              -             -               -               -            -              7.6           (7.6  )      -            (7.6  )      (0.05 )
    (d)
9   Tax indemnifications        -              -             -               -               -            -              27.1          (27.1 )      -            (27.1 )      (0.17 )
    (e)
10  Income tax adjustments     -            -           -             -             -          -            -           -          49.9       (49.9 )     (0.32 )
    (f)
                              $ (46.3   )   $  (31.3  )   $  (63.7    )   $  (5.7     )   $  (85.8  )   $ 140.2      $  (92.8  )   $  233.0    $  49.9     $  183.1    $  1.16  
                                                                                                                                                                           
(a) Adjustment to eliminate restructuring and other charges (and credits) primarily related to facility consolidations, supply chain and distribution and other organizational
    streamlining initiatives.
                                                                                                                                                                           
    The 2012 adjustments relate to the acquisition and integration of Pinnacle and Cooley as well as 2012 tax on earnings distributed within certain of Beam's foreign tax
    jurisdictions incurred in connection with funding a portion of the capital requirement for the Cooley acquisition. The 2012 acquisition related adjustments impacting SG&A
(b) expense consist of: transaction-related expenses of $5 million, contract termination expenses of $9 million and integration related expenses of $2 million. In addition,
    acquisition related adjustments include amounts charged to cost of goods sold and restructuring charges that primarily relate to accelerated depreciation, employee retention and
    information technology systems integration. The 2011 adjustment relates to acquisition related contingent consideration accrued in September 2011.
                                                                                                                                                                           
    The adjustment in the 2012 period primarily relates to a $15.1 million pension settlement charge associated with a required $29 million lump sum distribution paid to former
(c) Fortune Brands executives in July 2012, partially offset by a decrease in accrued liabilities for estimated costs to complete the Separation.The adjustment in the 2011 period
    is to eliminate nonrecurring business separation costs incurred to implement the Separation, principally transaction and professional advisory fees, severance and other employee
    related costs and certain other costs incurred in connection with the Separation.
                                                                                                                                                                           
(d) Adjustment to eliminate a gain related to a dividend distribution received in connection with the wind down of our former Maxxium investment.
                                                                                                                                                                           
(e) Nontaxable reimbursement received from seller of an acquired business for resolution of certain tax matters for years prior to our ownership.
                                                                                                                                                                           
    The adjustment in the 2012 period is to eliminate income tax matters related to the resolution of foreign tax audit examinations and the tax return filing related adjustments
(f) discussed above for the three month period. The adjustment in the 2011 period is the combined amount required to eliminate income tax matters related to the resolution of
    foreign and US income tax audit examinations and to adjust income tax expense to Beam's estimated effective tax rate as a standalone Spirits business.
                                                                                                                                                                           
(g) Adjustment to eliminate the one-time sales and related cost of goods sold impact associated with transition to a new long-term distribution agreement in Australia in 2011.
                                                                                                                                                                           
    Adjustments to reflect estimated expenses as a standalone Spirits business, including: (1) $36.0 million operating expense adjustment to reflect a lower corporate cost
(h) structure, and (2) $6.5 million interest expense adjustment to assume the Separation-related debt reduction had been completed as of January 1, 2011. See the preceding page for
    additional information related to estimated standalone costs.
                                                                                                                                                                           
(i) Adjustment to eliminate loss on early extinguishment of debt, which was related to the Separation.



Beam Inc.
Segment Information ^(a)
(Unaudited)
                                                                           
(In millions)                                                        Constant Currency
                                                                     (Non-GAAP)
                                    Three Months Ended    %          2012        %
                                    September 30,         Change     Adjusted    Change
Net Sales                           2012        2011      Reported   Amount      Adjusted
                                                                     ^(b)
                                                                                 
North America                       $ 380.1     $ 337.3   12.7   %   $ 382.3     13.3   %
Europe, Middle East,                  116.5       120.0   -2.9   %     127.3     6.1    %
Africa ("EMEA")
Asia Pacific / South                 130.9     121.9   7.4    %    134.8    10.6   %
America ("APSA")
                                                                                 
Segment net sales                     627.5       579.2   8.3    %     644.4     11.3   %
Foreign exchange                     -         -                   (16.9 )   n/m
                                                                                 
Total net sales                     $ 627.5    $ 579.2   8.3    %   $ 627.5    8.3    %
                                                                                 
                                                                     Constant Currency
                                                                     (Non-GAAP)
                                    Three Months Ended    %          2012        %
                                    September 30,         Change     Adjusted    Change
Operating Income                    2012        2011      Reported   Amount ^    Adjusted
                                                                     (b)
                                                                                 
North America                       $ 105.8     $ 91.0    16.3   %   $ 103.9     14.2   %
EMEA                                  27.9        24.8    12.5   %     30.8      24.2   %
APSA                                 31.3      26.5    18.1   %    30.1     13.6   %
                                                                                 
Segment operating income              165.0       142.3   16.0   %     164.8     15.8   %
Deduct:
Foreign exchange                      -           -                    (0.2  )
Restructuring and other
charges / gains (see                  2.6         114.7                2.6
detail above)
                                                                   
Total operating income              $ 162.4    $ 27.6    488.4  %   $ 162.4    488.4  %
                                                                                 
(a) The Company evaluates its segment net sales and operating income before charges /
gains (as previously defined) that are not considered indicative of the segments’
underlying operating performance. Consequently, segment results presented in accordance
with GAAP exclude such items. Segment sales and operating income are also presented on a
constant currency basis, which is a non-GAAP measure. The Company uses this measure to
understand underlying growth of the segments as fluctuations in exchange rates can impact
the underlying growth rate of the segments.
                                                                                 
(b) Foreign exchange translation effects calculated by translating current year results
at prior year exchange rates and excluding hedge impacts.
                                                                                 
Reconciliation of Percentage Change in GAAP Net Sales to Percentage Change in Comparable
Net Sales (Unaudited)

                          Three Months Ended September 30, 2012
                          North     EMEA        APSA      Segment
                          America                         Total
                          %         %           %         %
Net Sales (GAAP)          13          (3    )     7       8
Foreign currency impact   -           9           3       3
Acquisitions/divestitures (11  )     (1    )    -       (7     )
Comparable Net Sales      2         5         10      4      
(Non-GAAP)
                                                                                 
                                                                                 
Comparable net sales growth rate represents the percentage increase or decrease in
reported net sales in accordance with GAAP, adjusted to eliminate the impacts of foreign
exchange and acquisitions/divestitures. The Company believes that comparable net sales
growth is useful in evaluating the Company's sales growth year-over-year because it
excludes items that are not indicative of underlying sales performance.



Beam Inc.
Segment Information ^(a)
(Unaudited)
                                                                           
(In millions)                                                      Constant Currency
                                                                   (Non-GAAP)
                            Nine Months Ended           %          2012          %
                            September 30,               Change     Adjusted      Change
Net Sales                   2012          2011          Reported   Amount ^(b)   Adjusted
                                                                                 
North America               $ 1,059.5     $ 946.1       12.0  %    $ 1,066.2     12.7  %
Europe, Middle East,          335.5         334.9       0.2   %      361.4       7.9   %
Africa ("EMEA")
Asia Pacific / South         361.8       346.3      4.5   %     363.3      4.9   %
America ("APSA")
                                                                                 
Segment net sales             1,756.8       1,627.3     8.0   %      1,790.9     10.1  %
Foreign exchange              -             -                        (34.1   )   n/m
Australia distribution       -           46.3                   -          n/m
one-time sale
                                                                                 
Total net sales             $ 1,756.8    $ 1,673.6    5.0   %    $ 1,756.8    5.0   %
                                                                                 
                                                                   Constant Currency
                                                                   (Non-GAAP)
                            Nine Months Ended           %          2012          %
                            September 30,               Change     Adjusted      Change
Operating Income            2012          2011          Reported   Amount ^      Adjusted
                                                                   (b)
                                                                                 
North America               $ 309.8       $ 269.0       15.2  %    $ 306.3       13.9  %
EMEA                          68.7          69.8        -1.6  %      74.3        6.4   %
APSA                         76.1        60.7       25.4  %     67.3       10.9  %
                                                                                 
Segment operating income      454.6         399.5       13.8  %      447.9       12.1  %
Deduct:
Foreign exchange              -             -                        (6.7    )
Adjustment for charges /      35.4          140.2                    35.4
gains (see detail above)
                                                                 
Total operating income      $ 419.2      $ 259.3      61.7  %    $ 419.2      61.7  %
                                                                                 
(a) The Company evaluates its segment net sales and operating income before charges /
gains (as previously defined) that are not considered indicative of the segments’
underlying operating performance. Consequently, segment results presented in accordance
with GAAP exclude such items. Segment sales and operating income are also presented on a
constant currency basis, which is a non-GAAP measure. The Company uses this measure to
understand underlying growth of the segments as fluctuations in exchange rates can impact
the underlying growth rate of the segments.
                                                                                 
(b) Foreign exchange translation effects calculated by translating current year results
at prior year exchange rates and excluding hedge impacts.
                                                                                 
Reconciliation of Percentage Change in GAAP Net Sales to Percentage Change in Comparable
Net Sales (Unaudited)

                            Nine Months Ended September 30, 2012
                            North         EMEA          APSA       Segment
                            America                                Total
                             %           %          %          %       
Net Sales (GAAP)              12            -           5            8
Foreign currency impact       1             8           -            2
Acquisitions/divestitures     (6      )     (3      )   -            (4      )
Ongoing impact -
Australia distribution       -           -          3          1       
margin
Comparable Net Sales         7           5          8          7       
(Non-GAAP)
                                                                                 
Comparable net sales growth rate represents the percentage increase or decrease in
reported net sales in accordance with GAAP, adjusted to eliminate the impacts of foreign
exchange, acquisitions/divestitures and the transition to the new Australia distribution
agreement. The Company believes that comparable net sales growth is useful in evaluating
the Company's sales growth year-over-year because it excludes items that are not
indicative of underlying sales performance.



Beam Inc.
Reconciliations of GAAP to Non-GAAP Measures (Unaudited)
($ in millions)
                                                              
                                                                    
Earnings Before Interest, Taxes, Depreciation
and Amortization ("EBITDA") ^(a)
                                                                    
                   Three Months Ended September     Nine Months Ended
                   30,                              September 30,
                   2012            2011             2012            2011
                                                                    
GAAP income
(loss) from        $  91.7         $  (82.0   )     $  271.4        $ 42.1
continuing
operations
                                                                    
Add (deduct):
                                                                    
Other (income)        (1.9   )        (37.7   )        (30.3  )       (34.6  )
/ expense
Interest              28.5            26.5             79.9           86.5
expense
Loss on early
extinguishment        -               134.0            -              134.0
of debt
Depreciation          25.6            23.3             75.0           67.2
expense
Amortization          4.3             4.2              12.8           12.2
expense
Income tax
expense               44.1            (13.2   )        98.2           31.3
(benefit)
Adjustment for
charges / gains      2.6           114.7          35.4         140.2  
(see detail
above)
                                                                    
EBITDA before
charges/gains      $  194.9       $  169.8        $  542.4       $ 478.9  
(Non-GAAP)
                                                                    
(a) The Company defines EBITDA as income from continuing operations before
interest expense, income taxes, depreciation and amortization expense and
other income/expense. EBITDA before charges/gains is EBITDA less charges/gains
(as previously defined).
                                                                    
                                                                    
Free Cash Flow     Three Months Ended September     Nine Months Ended
(a)                30,                              September 30,
                   2012            2011 (b)         2012            2011 (b)
GAAP cash
provided by        $  87.4         $  310.9         $  112.6        $ 317.4
operating
activities
Add (deduct):
Spirits capital
expenditures,
net of                (31.3  )        (46.2   )        (89.3  )       (108.0 )
disposition
proceeds
Cash used for
discontinued          57.9            -                80.0           -
operations (c)
Cash provided
by discontinued       -               (101.1  )        -              (80.0  )
businesses (d)
                                                                 
Adjusted free
cash flow          $  114.0       $  163.6        $  103.3       $ 129.4  
(Non-GAAP)
                                                                    
                                                                    
(a) Free cash flow is defined as GAAP cash flow from operations less capital
expenditures for property, plant and equipment additions (net of disposition
proceeds), adjusted for operating cash flow related to discontinued
operations. Management believes free cash flow provides investors with an
important perspective on the cash available for dividends, debt repayment, and
acquisitions after making the capital investments required to support ongoing
business operations and long term value creation. Management uses free cash
flow to assess business performance and overall liquidity.
                                                                    
(b) Free cash flow for the 2011 periods is not intended to be a measure of
Beam Inc. "adjusted pro forma free cash flow" that would reflect the free cash
flow generated by Beam as if it were a standalone company for the periods
presented.
                                                                    
(c) Represents cash used primarily for settlement of liabilities of divested
businesses and payment of incentive compensation, severance and pension
benefits to former Fortune Brands executives.
                                                                    
(d) Represents operating cash
flows of the Home & Security
and Golf businesses prior to
their divestiture.

                                                                     
Return on Invested Capital (ROIC) from Continuing Operations (a)
                            Twelve Months Ended
                            September 30, 2012 -
                            Income from             Average Invested
                          Continuing             Capital             ROIC
                            Operations
                            plus After-tax
                            Interest
                                                                        
Unadjusted                  $      459              $   6,574           7   %
                                                                        
Add: impact of
"charges/gains"                   (1       )          8        
(previously defined)
                                                                        
ROIC before
charges/gains                      458                  6,582           7   %
(Non-GAAP)
                                                                        
Impact of excluding
goodwill and                      12                 (4,550   )
intangibles
                                                                            
ROIC before
charges/gains and           $      470             $   2,032          23  %
excl. goodwill and
intangibles (Non-GAAP)
                                                                        
                                                                        
(a) ROIC is income from continuing operations plus after-tax interest expense
and debt extinguishment loss divided by the average of invested capital (debt
less cash plus stockholders' equity plus after-tax interest expense). Adjusted
ROIC is adjusted for the amounts used to calculate adjusted income from
continuing operations. Invested capital is a multi-point average of the 12
months ended September 30, 2012; invested capital for periods prior to the
Separation was adjusted to assume Beam was a standalone company for those
periods. See the page entitled "Use of Non-GAAP Financial Information" for
further information relating to the Company's use of non-GAAP measures.



Beam Inc.
Reconciliation of GAAP Net Sales Growth to Comparable Net Sales Growth
Nine Months Ended September 30, 2012
(Unaudited)
                                                                        
                                                                               
                      Foreign    Australia      Australia                      Non-GAAP -
              GAAP   Currency  Distribution  Distribution  Acquisitions/  Comparable
              Basis   Exchange   Agreement      Margin         Divestitures    Basis
                      Rates      Change         Structure
              %                                                                %
Power         8       3          3              1              (4)             11
Brands
Jim Beam      (1)     2          5              2              -               8
Maker’s       21      -          2              -              -               23
Mark
Sauza (a)     2       3          1              -              -               6
Courvoisier   10      2          3              -              -               15
Canadian      (4)     1          5              1              -               3
Club
Teacher’s     (6)     12         1              -              -               7
Pinnacle      -       -          -              -              22              22
                                                                               
Rising        8       1          -              -              (2)             7
Stars
Laphroaig     -       4          2              -              -               6
Knob Creek    15      -          -              -              -               15
Basil         25      -          6              -              -               31
Hayden
Kilbeggan     -       -          -              -              31              31
Cruzan        12      -          1              -              -               13
Hornitos      (11)    -          -              -              -               (11)
EFFEN         (23)    -          -              -              -               (23)
Pucker        (6)     -          -              -              -               (6)
Vodka
Skinnygirl    21      -          -              -              (2)             19
Sourz         8       4          -              -              -               12
                                                                               
                                                                               
Local         (7)     4          -              -              -               (3)
Jewels
                                                                               
Value         -       2          4              -              (5)             1
Creators
                                                                               
Net sales     5       2          3              1              (4)             7
(b)
                                                                               
                                                                               
Comparable net sales growth rate represents the percentage increase or decrease in
reported net sales in accordance with GAAP, adjusted for certain items. The Company
believes Comparable Net Sales Growth is useful in evaluating the Company's sales growth
on a year-over-year basis exclusive of items that are not indicative of the brands'
performance such as foreign exchange impacts, acquisitions/divestitures, the one-time
impact on net sales of transitioning to the new Australia distribution agreement as well
as the related impact on margin structure. See the page entitled "Use of Non-GAAP
Financial Information" for additional information related to the use of Non-GAAP
measures.
                                                                               
(a) Excludes Hornitos

(b) Net sales represents consolidated net sales (excluding excise taxes), including
non-branded sales to third parties.



Beam Inc.
Reconciliations of GAAP to Non-GAAP Measures (Unaudited)
                                                   
                                                        
                                                        Trailing Twelve Months
Reconciliation of Net Debt to Adjusted EBITDA           September 30, 2012
(Unaudited) (a)
GAAP debt / operating cash flow                         10.0
Impact of using net debt rather than GAAP total         (0.6         )
debt (a)
Impact of using adjusted EBITDA rather than             (6.2         )
GAAP operating cash flow
Net debt / EBITDA before charges/gains                  3.2          


(a) Net debt equals total debt less cash as of September 30, 2012. GAAP
operating cash flow and EBITDA are based on the twelve-month period ended
September 30, 2012. GAAP operating cash flow includes discontinued operations.
See the Reconciliation of Income from Continuing Operations to EBITDA (above)
for the Company's definition of EBITDA before charges/gains.


Reconciliation of Full Year 2012 Diluted EPS from Continuing Operations Growth
Target to GAAP Target
For the full year 2012, the Company is targeting low-double-digit growth in
diluted EPS from continuing operations before charges/gains as compared to its
full year 2011 diluted EPS from continuing operations before charges/gains
($2.12). Given the nature of special charges/gains, the Company cannot predict
such items and, therefore, the Company's 2012 targeted diluted EPS from
continuing operations used to determine the year-over-year growth rate in
diluted EPS excludes any such items.



Comparing targeted 2012 diluted EPS from continuing operations before
charges/gains to the Company's 2011 GAAP diluted EPS from continuing
operations ($0.85 per share) results in a year-over-year growth rate in excess
of 100% due to the significant number of Separation-related charges included
in GAAP 2011 income from continuing operations. For further information
related to 2011 adjusted EPS from continuing operations, which includes
adjustments for restructuring and other charges/gains as well as adjustments
to reflect Beam's cost structure as a standalone spirits company, see the
Company's fourth quarter 2011 earnings release.

Reconciliation of Full Year 2012 Earnings-to-Free-Cash-Flow Conversion Rate
Target
Adjusted Earnings to Free Cash Flow Conversion Rate is calculated as the ratio
of Adjusted Free Cash Flow to Adjusted Income from Continuing Operations.
Adjusted Free Cash Flow is cash from operations less net capital expenditures
plus operating cash outflows related to discontinued operations. Adjusted
Income from Continuing Operations is adjusted for "charges/gains" (as
previously defined). This is a non-GAAP measure. For the full year 2012, the
Company expects an Adjusted Earnings to Free Cash Flow Conversion Rate of
approximately 80%. However, given uncertainty with respect to potential
nonrecurring items that may impact earnings and/or free cash flow, the Company
cannot estimate a full-year GAAP Earnings to Free Cash Flow Conversion Rate;
therefore, a GAAP to Non-GAAP reconciliation is not included.

Beam Inc.
Media Relations
Clarkson Hine, +1-847-444-7515
Clarkson.Hine@beamglobal.com
or
Investor Relations
Tony Diaz, +1-847-444-7690
Tony.Diaz@beamglobal.com

Contact:

Beam Inc.

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