Beam Reports 2012 Fourth Quarter and Full Year Results

  Beam Reports 2012 Fourth Quarter and Full Year Results

  *Power Brands and Rising Stars Lead Continued Market Outperformance in
    Fourth Quarter and Full Year
  *Earnings Growth Exceeds 2012 Target
  *Targeting High-Single-Digit Growth in EPS Before Charges/Gains in 2013

Business Wire

DEERFIELD, Ill. -- February 1, 2013

Beam Inc. (NYSE: BEAM), a leading global premium spirits company, today
reported results for the fourth quarter and full year 2012.

For the full year 2012, reported net sales increased 7% to a record $2.5
billion. Sales for the year were up 6% on a comparable basis, significantly
outperforming the company’s global market. Growth of the company’s premium
global Power Brands and broad-based growth across geographies fueled the
full-year comparable sales performance. New product innovations, higher
pricing in select categories, and trading up by consumers contributed to
favorable price/mix and margin enhancement. On a reported basis (GAAP),
full-year diluted earnings per share from continuing operations were $2.48
versus $0.85 in 2011. Full-year diluted EPS before charges/gains was $2.40, up
13%, exceeding the company’s 2012 target for low-double-digit growth and ahead
of the company’s long-term target of high-single-digit growth. Reported
earnings comparisons largely reflect the impact of costs in 2011 associated
with the separation of Fortune Brands’ businesses.

For the fourth quarter, reported net sales increased 11% and net sales were up
5% on a comparable basis. Comparable sales growth reflected strong results in
the core markets of the United States, Australia and Germany. Diluted EPS
before charges/gains for the quarter was $0.67, down 3%, reflecting the
company’s previously projected 20% increase in brand-building investment.
Diluted EPS from continuing operations for the quarter was up 36% on a
reported basis.

         Bourbon, Premium Innovations and Pricing Benefit Q4 Results

“We closed the year with another strong sales quarter as we continued to
outperform our market,” said Matt Shattock, president and chief executive
officer of Beam. “We exceeded our expectations with better-than-anticipated
global sales of Bourbon and higher-than-expected accretion from the Pinnacle
acquisition. We also benefited from premium innovations across categories that
improved product mix, as well as higher pricing in select categories. As we
called out three months ago, Q4 EPS before charges/gains was modestly lower
due to our substantial increase in brand investment in the quarter to support
long-term growth.”

                 Excellent Results in First Full Year as Beam

“Beam continued to deliver excellent results in its first full year as a
focused pure-play spirits company,” Shattock continued. “We created value
through the long-term growth algorithm we outlined a year ago: growing sales
faster than our market, operating income faster than sales, and EPS faster
still. In 2012, we exceeded our expectations at both the top and bottom lines
as we increased comparable sales at roughly twice the rate of our global
market, and grew EPS before charges/gains ahead of our target for the year.
Full-year sales growth was balanced across our three regional segments, fueled
by double-digit global growth for our Power Brands and Rising Stars, and we
improved margins with premium innovations and higher pricing.

“We are particularly pleased that we outperformed in 2012 even as we increased
investment in the competitive position and long-term growth of our business.
These investments included a double-digit increase in brand-building
investment, as well as higher capital expenditures to produce more aged
spirits to meet future demand. In 2012, we further strengthened our core
equities with impactful brand communication on television and in digital
media; we accelerated our growth with innovative new products while also
opening our new Global Innovation Center; we continued to strengthen our
premium portfolio by adding a Power Brand in vodka and entering Irish Whiskey;
and we enhanced our routes to market across fast-growing economies like China
as well as in developed markets such as Japan.

“Beam generated higher-than-expected free cash flow of $337 million, and we
ended the year with a net-debt-to-EBITDA ratio of 2.8 times, better than we
had targeted. We’re also pleased that our 2012 acquisitions were five cents
per share accretive to our full year results,” Shattock said. “We believe our
investments and stronger balance sheet enhance Beam’s prospects to deliver
sustainable, profitable long-term growth.”

Financial Highlights for the Full Year 2012:

  *Income from continuing operations was $398.2 million, or $2.48 per diluted
    share, versus $0.85 per diluted share in 2011.
  *Excluding charges and gains, diluted EPS from continuing operations was
    $2.40, up 13% from $2.12 in 2011.
  *Reported net sales were a record $2.5 billion (excluding excise taxes), up
    7%.
  *On a comparable basis, which adjusts for foreign exchange and
    acquisitions/divestitures, net sales were up 6%.

       *Comparable net sales by segment: North America +7%; Europe/Middle
         East/Africa (EMEA) +5%; Asia Pacific/South America (APSA) +5%.

  *Operating income was $575.9 million, up 46%.
  *Operating income before charges/gains was $631.9 million, up 10%.
  *The company generated free cash flow of $336.8 million and an
    earnings-to-free-cash conversion rate of 87%.
  *Return on invested capital before charges/gains (rolling 12 months) was 7%
    and was 23% excluding intangibles.
  *The company’s net-debt-to-EBITDA ratio was 2.8 times at year end.

Financial Highlights for the Fourth Quarter:

  *Income from continuing operations was $126.8 million, or $0.79 per diluted
    share, versus $0.58 in the year-ago quarter.
  *Excluding charges and gains, diluted EPS from continuing operations was
    $0.67, down 3% from $0.69.
  *Reported net sales were $709.1 million (excluding excise taxes), up 11%.
  *On a comparable basis, which adjusts for foreign exchange and
    acquisitions/divestitures, net sales were up 5%.

       *Comparable net sales by segment: North America +8%; Europe/Middle
         East/Africa (EMEA) +4%; Asia Pacific/South America (APSA) -2%.
       *Results in North America benefited from the timing of sales in
         Mexico, while lower results in India adversely impacted sales in
         APSA.

  *Operating income was $156.7 million, up 15%.
  *Operating income before charges/gains was $177.3 million, up 3%.

                   Establishing 2013 Earnings Growth Target

The company announced that it is targeting to deliver high-single-digit growth
in diluted earnings per share before charges/gains for 2013 against its 2012
base of $2.40 per share.

“We enter 2013 with an assumption that our global spirits market will grow
value approximately 3%, consistent with what we saw in 2012,” Shattock said.
“We’ll face headwinds including higher raw materials costs and challenging
comparisons in India as we reposition our business there, and we’re not
currently assuming material new pricing in 2013. At the same time, we
anticipate benefiting from several favorable dynamics: the strength of the
bourbon category, our innovations and brand-building initiatives, strong
growth in emerging markets, our efficiency and effectiveness agenda, and an
additional five cents per share of accretion from our 2012 acquisitions.
Incorporating these factors, we’re targeting for 2013 to outperform our market
at the top line and deliver growth in diluted EPS before charges/gains at a
high-single-digit rate. With regard to phasing, we will face our most
challenging comparison of the year in the first quarter as we cycle against
new-product launches and route-to-market changes that helped drive comparable
sales up 13% in Q1 of 2012.

“We believe that Beam is well positioned to deliver sustainable, profitable
long-term growth as we continue to invest in fast-growing categories,
fast-growing new products, and fast-growing markets. We feel good about our
prospects for continued outperformance in 2013.”

The company expects to generate free cash flow for 2013 in the range of
$300-350 million, which incorporates continued investment to increase
distillation capacity and produce more aged spirits to support long-term
growth.

“While we have sustained investments in long-term value creation, we’ve also
continued our track record of delivering immediate value to shareholders with
the 10% increase in our dividend we announced recently,” Shattock concluded.

Key Brand Performance

Comparable net sales growth, full year 2012:

                 Comparable
               Net Sales
                 Growth (1)
Power Brands    +10%
Jim Beam        +10%
Maker’s Mark    +15%
Sauza           +10%
Pinnacle        +19%*
Courvoisier     +12%
Canadian Club   +6%
Teacher’s       +1%
               
Rising Stars    +10%
Laphroaig       +15%
Knob Creek      +24%
Basil Hayden’s  +35%
Kilbeggan       +1%
Cruzan          +12%
Hornitos        -2%
EFFEN           -22%
Pucker Vodka    -5%
Skinnygirl      +19%
Sourz           +1%
               
Local Jewels    -1%
               
Value Creators  -1%
               
Total (2)       +6%

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 seven months of performance for Pinnacle since acquisition.

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, Skinnygirl Cocktails, Cruzan Rum, Hornitos Tequila, Knob Creek
Bourbon, Laphroaig Scotch Whisky, Kilbeggan Irish Whiskey, Larios Gin, Whisky
DYC and DeKuyper Cordials. 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
3,400 passionate associates worldwide generated 2012 sales of $2.5 billion
(excluding excise taxes), volume of 38 million 9-liter equivalent 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; competitive innovation and
marketing pressures, including price; changes in consumer preferences and
trends; financial and integration risks associated with acquisitions, joint
ventures, and alliances, as well as potential divestitures; the price and
availability of raw materials and energy; risks associated with doing business
outside the United States, including changes in laws, governmental regulations
and policies, compliance with anti-corruption statutes, civil and political
unrest, and local labor conditions; our ability to manage organizational
productivity and global supply chains effectively; the impact of excise tax
increases and customs duties on our products or changes to government
financial incentives; fluctuations in currency exchange rates; our ability to
reach agreement on, maintain or renegotiate key agreements; potential
liabilities, costs and uncertainties of litigation; our ability to attract and
retain qualified personnel; changes to laws and regulations; downgrades of the
Company’s credit ratings; dependence on performance of distributors, promoters
and other marketing arrangements; product quality issues; costs of certain
employee and retiree benefits and returns on pension assets; tax law changes
or interpretation of existing tax laws; ability to secure and maintain rights
to intellectual property, including trademarks, trade dress and tradenames;
impairment in the carrying value of goodwill or other acquired intangible
assets; disruptions at production facilities and supply/demand forecasting
uncertainties; breaches of data security; and other risks and uncertainties
described from time to time in the Company’s filings with the Securities and
Exchange Commission.

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, free cash flow, earnings-to-free-cash conversion
rate, and net-debt-to-EBITDA ratio. 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. Reconciliations 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 December 31,    Year Ended December 31,
  (In millions,                                %
  except per share   2012         2011         Change   2012          2011          % Change 
  amounts)
                                                                                             
  Sales              $ 876.5      $ 788.6               $ 3,070.1     $ 2,871.7              
  Less: Excise        (167.4 )    (151.1 )             (604.2  )    (560.6  )            
  taxes
  Net sales            709.1        637.5      11.2 %     2,465.9       2,311.1     6.7   %  
                                                                                             
  Cost of goods       303.8      273.1     11.2 %    1,027.5     987.8      4.0   %  
  sold
                                                                                             
  Gross profit         405.3        364.4      11.2 %     1,438.4       1,323.3     8.7   %  
                                                                                             
  Advertising and
  marketing            116.5        97.0       20.1 %     398.7         358.7       11.2  %  
  expense
  Selling, general
  and                  111.5        95.8       16.4 %     412.9         430.0       -4.0  %  
  administrative
  expense
  Amortization of
  intangible           4.4          4.1        7.3  %     17.2          16.3        5.5   %  
  assets
  Restructuring        0.6          2.0                   4.3           7.7                  
  charges
  Business             -            (2.0   )              13.8          83.8                 
  separation costs
  Asset impairment    15.6       31.3                15.6        31.3                
  charges
                                                                                             
  Operating income     156.7        136.2      15.1 %     575.9         395.5       45.6  %  
                                                                                             
  Interest expense     29.1         30.9       -5.8 %     109.0         117.4       -7.2  %  
  Loss on early
  extinguishment       -            15.2                  -             149.2
  of debt
  Other income        (4.8   )    (5.8   )             (35.1   )    (40.4   )            
                                                                                             
  Income from
  continuing
  operations
  before income        132.4        95.9       38.1 %     502.0         169.3       196.5 %  
  taxes
                                                                                             
  Income taxes        5.6        4.7                 103.8       36.0                
                                                                                             
  Income from
  continuing           126.8        91.2       39.0 %     398.2         133.3       198.7 %  
  operations
                                                                                             
  Income (loss)
  from
  discontinued        (0.5   )    (2.7   )             (15.8   )    782.2               
  operations, net
  of tax
                                                                                             
  Net income           126.3        88.5       42.7 %     382.4         915.5       -58.2 %  
  Less:
  Noncontrolling
  interests -         -          -                   -           4.1     
  discontinued
  operations
                                                                                             
  Net income
  attributable to    $ 126.3     $ 88.5      42.7 %   $ 382.4      $ 911.4      -58.0 %  
  Beam Inc.
                                                                                             
  Basic earnings
  (loss) per
  common share:
  Continuing         $ 0.79       $ 0.59       33.9 %   $ 2.51        $ 0.86        191.9 %
  operations
  Discontinued        -          (0.02  )             (0.10   )    5.03    
  operations
  Net income         $ 0.79      $ 0.57      38.6 %   $ 2.41       $ 5.89       -59.1 %
                                                                                             
  Diluted earnings
  (loss) per
  common share:
  Continuing         $ 0.79       $ 0.58       36.2 %   $ 2.48        $ 0.85        191.8 %
  operations
  Discontinued        -          (0.02  )             (0.10   )    4.93    
  operations
  Net income         $ 0.79      $ 0.56      41.1 %   $ 2.38       $ 5.78       -58.8 %
                                                                                             
  Weighted-average
  common shares
  outstanding
  Basic                159.4        155.8      2.3  %     158.3         154.6       2.4   %
  Diluted              161.2        158.7      1.6  %     160.8         157.8       1.9   %


Beam Inc.
Condensed Consolidated Balance Sheet
 (Unaudited)
                                                         
                                                            
  (In millions)                                 December 31,
                                                2012        2011
  Assets
  Cash and cash equivalents                     $ 365.7     $ 218.3
  Accounts receivable                             455.7       385.8
  Inventories
  Maturing spirits                                1,425.2     1,283.2
  Finished products                               179.6       167.3
  Raw materials, supplies and work in process    132.1      101.0
                                                            
  Total inventories                               1,736.9     1,551.5
  Other current assets                           297.9      278.8
                                                            
  Total current assets                            2,856.2     2,434.4
  Property, plant and equipment                   787.9       729.7
  Goodwill and other intangible assets            4,879.1     4,202.9
  Other assets                                   106.5      124.8
                                                            
  Total assets                                  $ 8,629.7   $ 7,491.8
                                                            
  Liabilities and Equity
  Short-term debt, including current
  portion of long-term debt                     $ 480.1     $ 28.4
  Accounts payable                                264.0       206.1
  Long-term debt                                  2,024.9     1,902.1
  Other liabilities                              1,248.6    1,255.5
                                                            
  Total liabilities                               4,017.6     3,392.1
                                                            
  Total equity                                   4,612.1    4,099.7
                                                            
  Total liabilities and equity                  $ 8,629.7   $ 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
  asset impairment charges, 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 unusual tax matters that management does not consider
  indicative of ongoing operations. Charges/gains excluded from GAAP results
  also include other items which management believes are not indicative of the
  Company's underlying operating performance for purposes of evaluating past
  and future performance; such items are excluded from GAAP results to improve
  comparability between periods. 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.

  

  Additional non-GAAP measures included in this release are identified as
  “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 December 31, 2012      Three Months Ended December 31, 2011    % Increase
                                          Adjustments   Before                       Adjustments   Before                     Before
                              GAAP        (See Detail   Charges/        GAAP         (See Detail   Charges/     GAAP          Charges/
                                          Below)        Gains                        Below)        Gains                      Gains
                                                        (Non-GAAP)                                 (Non-GAAP)                 (Non-GAAP)
Net sales                     $ 709.1        -          $   709.1       $  637.5        -          $  637.5        11.2   %      11.2  %
Cost of goods sold             303.8      0.3                         273.1      (7.1   )
                                                                                                                                                                     
Gross profit                    405.3        (0.3   )       405.0          364.4        7.1           371.5        11.2   %      9.0   %
Gross profit margin             57.2  %                     57.1   %      57.2  %                  58.3  %      -             (120)   
                                                                                                                                 bps
Advertising and marketing       116.5        -                             97.0         -
expense
Selling, general and            111.5        (4.7   )                      95.8         1.9
administrative expense
Amortization of intangible      4.4          -                             4.1          -
assets
Restructuring charges           0.6          (0.6   )                      2.0          (2.0   )
Business separation costs       -            -                             (2.0  )      2.0
Asset impairment charges       15.6       (15.6  )                     31.3       (31.3  )
                                                                                                                                                                     
Operating income                156.7        20.6           177.3          136.2        36.5          172.7        15.1   %      2.7   %
Operating income margin         22.1  %                     25.0   %       21.4  %                    27.1  %      (30) bps     (210)   
                                                                                                                                 bps
Interest expense                29.1         -                             30.9         (4.0   )
Loss on early                   -            -                             15.2         (15.2  )
extinguishment of debt
Other income                   (4.8  )     -                           (5.8  )     2.7    
                                                                                                                                                                     
Income from continuing
operations before income        132.4        20.6                          95.9         53.0
taxes
Income taxes                   5.6        39.2                        4.7        35.0   
    Effective tax rate          4.2   %                     29.3   %       4.9   %                    26.7  %
                                                                                                                                                                     
                                                                                                                                                                     
Income from continuing        $ 126.8      (18.6  )   $   108.2       $  91.2       18.0      $  109.2        39.0   %      -0.9  %
operations
                                                                                                                                                                     
Diluted EPS - continuing      $ 0.79       (0.12  )   $   0.67        $  0.58       0.11      $  0.69         36.2   %      -2.9  %
operations
                                                                                                                                                                     
                                                                                                                                                                     
Adjustments Detail by Applicable Financial Statement Line Items
                              Cost of                                                              Pre-tax                    Income       Diluted
Three months ended December   goods       SG&A          Restructuring   Asset        Operating     income       Income        from cont.   EPS -
31, 2012                      sold        expense       charges         Impairment   income        -cont.       taxes         operations   cont.
                                                                                                   operations                              operations
                                                                                                                                                                     
1   Restructuring charges     $ -         $  -          $   0.5         $  -         $  (0.5   )   $  (0.5  )   $  (0.2   )   $  (0.3  )   $  -
    (a)
2   Other charges (a)           0.5          (3.6   )       -              -            3.1           3.1          1.1           2.0          0.01
3   Acquisition/integration     (0.2  )      (1.1   )       (1.1   )       -            2.4           2.4          0.9           1.5          0.01
    related costs (b)
4   Asset impairment (c)        -            -              -              (15.6 )      15.6          15.6         4.7           10.9         0.07
5   Income tax adjustment      -          -            -            -          -           -          32.7        (32.7 )     (0.21 )
    (d)
                              $ 0.3      $  (4.7   )   $   (0.6   )    $  (15.6 )   $  20.6      $  20.6     $  39.2      $  (18.6 )   $  (0.12 )
                                                                                                                                                                     
                                                                                                                Interest,     Pre-tax                                Diluted
Three months ended December   Cost of     SG&A          Restructuring   Separation   Asset         Operating    debt          income-      Income       Income       EPS -
31, 2011                      goods       expense       charges         costs        Impairment    income       extinguish-   cont.        taxes        from cont.   cont.
                              sold                                                                              ment loss &   operations                operations   operations
                                                                                                                other exp.
                                                                                                                                                                     
1   Restructuring charges     $ -         $  -          $   (2.0   )    $  -         $  -          $  2.0       $  -          $  2.0       $  -         $  2.0       $  0.01
    (a)
2   Other charges (a)           (7.1  )      1.9            -              -            -             5.2          -             5.2          -            5.2          0.03
3   Separation costs (e)        -            -              -              2.0          -             (2.0  )      -             (2.0  )      -            (2.0  )      (0.01 )
4   Standalone company          -            -              -              -            -             -            (4.0   )      4.0          -            4.0          0.03
    adjustment (f)
5   Asset impairment (c)        -            -              -              -            (31.3  )      31.3         -             31.3         -            31.3         0.19
    Loss on early
6   extinguishment of debt      -            -              -              -            -             -            (15.2  )      15.2         -            15.2         0.10
    (g)
7   Maxxium distribution        -            -              -              -            -             -            2.7           (2.7  )      -            (2.7  )      (0.02 )
    (h)
8   Income tax adjustment      -          -            -            -          -           -          -           -          35.0       (35.0 )     (0.22 )
    (d)
                              $ (7.1  )   $  1.9       $   (2.0   )    $  2.0      $  (31.3  )   $  36.5     $  (16.5  )   $  53.0     $  35.0     $  18.0     $  0.11  
                                                                                                                                                                     
    The 2012 restructuring credit of $0.5 million represents the reversal of restructuring accruals that were determined to be no longer required, while the $2 million of
    restructuring charges in 2011 relates to organizational streamlining projects.In 2012, other SG&A charges include $3.6 million of legal, forensic accounting and other
    fees related to our internal investigation with respect to our India operations.Other cost of goods sold for 2012 includes a $0.5 million gain on the sale of assets in
(a) connection with our 2011 project to centralize bottling operations in Kentucky.In 2011, the cost of goods sold adjustment includes $4.5 million of charges primarily
    associated with the streamlining of our bottling operations in Kentucky and $2.6 million of charges related to the impact of certain non-income tax matters.In 2011, the
    SG&A expense adjustment includes $3.8 million of credits related to certain non-income tax related matters, partially offset by $1.9 million of organizational streamlining
    charges.
                                                                                                                                                                     
    The 2012 adjustments relate to the acquisition and integration of the Pinnacle and Calico Jack assets ("Pinnacle") and Cooley business, consisting primarily of expenses
(b) incurred in connection with integrating these businesses into the Company's existing operational structure (e.g., distributor termination fees, accelerated depreciation,
    employee retention, and other organizational streamlining expenses).
                                                                                                                                                                     
(c) The adjustments in 2012 and 2011 relate to the non-cash impairment of tradenames in Spain.
                                                                                                                                                                     
    The income tax adjustments in the 2012 period primarily related to a $22 million foreign tax credit related to the repatriation of foreign earnings and a $9 million net
(d) benefit related to the resolution of U.S. and foreign tax audit examinations for certain years. The 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.
                                                                                                                                                                     
(e) Adjustment relates to the reversal of Separation-related accruals that were determined to be no longer required.
                                                                                                                                                                     
(f) Adjustment to the Company's interest expense to assume that the Separation-related debt extinguishments had occurred on January 1, 2011.
                                                                                                                                                                     
(g) Adjustment to eliminate loss on early extinguishment of debt related to the Separation.
                                                                                                                                                                     
(h) Adjustment to eliminate a gain related to a dividend distribution received in connection with the wind down of our former Maxxium investment.
    
bps - basis points

                                                                                                                                            
Beam Inc.
Reconciliations of GAAP to Non-GAAP Measures (Unaudited)
($ in millions, except per share)
                                                                                                                                                                          
                              Year Ended December 31, 2012                Year Ended December 31, 2011                % Increase
                                            Adjustments   Before                          Adjustments   Before                    Before
                              GAAP          (See Detail   Charges/        GAAP            (See Detail   Charges/      GAAP        Charges/
                                            Below)        Gains                           Below)        Gains                     Gains
                                                          (Non-GAAP)                                    (Non-GAAP)                (Non-GAAP)
Net sales                     $ 2,465.9        -          $  2,465.9      $  2,311.1         (46.3  )   $ 2,264.8       6.7   %      8.9    %
Cost of goods sold             1,027.5      (0.8   )                     987.8         (38.3  )
                                                                                                                                                                                       
Gross profit                    1,438.4        0.8           1,439.2         1,323.3         (8.0   )     1,315.3       8.7   %      9.4    %
Gross profit margin             58.3    %                    58.4     %      57.3     %                   58.1    %     100 bps     30 bps   
Advertising and marketing       398.7          -                             358.7           -
expense
Selling, general and            412.9          (21.5  )                      430.0           (61.9  )
administrative expense
Amortization of intangible      17.2           -                             16.3            -
assets
Restructuring charges           4.3            (4.3   )                      7.7             (7.7   )
Business separation costs       13.8           (13.8  )                      83.8            (83.8  )
Asset impairment charges       15.6         (15.6  )                     31.3          (31.3  )
                                                                                                                                                                                       
Operating income                575.9          56.0          631.9           395.5           176.7        572.2         45.6  %      10.4   %
    Operating income margin     23.4    %                    25.6     %      17.1     %                   25.2    %     N/M       40 bps
Interest expense                109.0          -                             117.4           2.5
Loss on early                   -              -                             149.2           (149.2 )
extinguishment of debt
Other income                   (35.1   )     19.9                        (40.4    )     37.3   
                                                                                                                                                                                       
Income from continuing
operations before income        502.0          36.1                          169.3           286.1
taxes
    Income tax expense         103.8        48.7                        36.0          84.9   
    Effective tax rate          20.7    %                    28.3     %      21.3     %                   26.5    %
                                                                                                                                                                                       
                                                                                                                                                                                       
Income from continuing        $ 398.2        (12.6  )   $  385.6        $  133.3         201.2     $ 334.5         198.7 %      15.3   %
operations
                                                                                                                                                                                       
Diluted EPS - continuing      $ 2.48         (0.08  )   $  2.40         $  0.85          1.27      $ 2.12          191.8 %      13.2   %
operations
                                                                                                                                                                                       
Adjustments Detail by Applicable Financial Statement Line Items
                                                                                          Asset                       Other       Pre-tax                    Income       Diluted
Year Ended December 31,       Cost of       SG&A          Restructuring   Separation      Impair-       Operating     (income)    income-       Income tax   from         EPS -
2012                          goods sold    expense       charges         costs           ment          income        expense     cont.         expense      cont.        cont.
                                                                                                                                  operations                 operations   operations
                                                                                                                                                                                       
1   Restructuring charges     $ -           $  -          $  (1.0     )   $  -            $  -          $ 1.0         $ -         $  1.0        $  0.2       $  0.8       $  -
    (a)
2   Other charges (a)           0.3            (4.2   )      -               -               -            3.9           -            3.9           1.4          2.5          0.01
3   Acquisition/integration     (1.1    )      (17.3  )      (3.3     )      -               -            21.7          -            21.7          4.6          17.1         0.11
    related costs (b)
4   Separation costs (c)        -              -             -               (13.8    )      -            13.8          -            13.8          5.3          8.5          0.05
5   Asset impairment (d)        -              -             -                               (15.6  )     15.6          -            15.6          4.7          10.9         0.07
6   Maxxium distribution        -              -             -               -               -            -             1.9          (1.9   )      -            (1.9  )      (0.01 )
    (e)
7   Tax indemnification (f)     -              -             -               -               -            -             18.0         (18.0  )      -            (18.0 )      (0.11 )
8   Income tax adjustment      -            -           -             -             -          -           -          -           32.5       (32.5 )     (0.20 )
    (g)
                              $ (0.8    )   $  (21.5  )   $  (4.3     )   $  (13.8    )   $  (15.6  )   $ 56.0       $ 19.9     $  36.1      $  48.7     $  (12.6 )   $  (0.08 )
                                                                                                                                                                                       
                                                                                                                                  Interest,     Pre-tax                                Diluted
Year Ended December 31,                     Cost of       SG&A            Restructuring   Separation    Asset         Operating   debt          income       Income tax   Income       EPS -
2011                          Net sales     goods sold    expense         charges         costs         Impair-       income      extinguish-   -cont.       expense      from cont.   cont.
                                                                                                        ment                      ment loss &   operations                operations   operations
                                                                                                                                  other exp.
                                                                                                                                                                                       
1   Restructuring charges     $ -           $  -          $  -            $  (7.7     )   $  -          $ -           $ 7.7       $  -          $  7.7       $  -         $  7.7       $  0.05
    (a)
2   Other charges (a)           -              (15.6  )      (0.9     )      -               -            -             16.5         -             16.5         -            16.5         0.10
3   Acquisition/integration     -              -             (25.0    )      -               -            -             25.0         -             25.0         -            25.0         0.16
    related costs (b)
4   Separation costs (c)        -              -             -               -               (83.8  )     -             83.8         -             83.8         -            83.8         0.53
5   Asset impairment (d)        -              -             -               -               -            (31.3   )     31.3         -             31.3         -            31.3         0.20
6   Australia distribution      (46.3   )      (22.7  )      -               -               -            -             (23.6 )      -             (23.6 )      -            (23.6 )      (0.15 )
    one-time sale (h)
7   Standalone company          -              -             (36.0    )      -               -            -             36.0         2.5           33.5         -            33.5         0.21
    adjustment (i)
    Loss on early
8   extinguishment of debt      -              -             -               -               -            -             -            (149.2 )      149.2        -            149.2        0.94
    (j)
9   Maxxium distribution        -              -             -               -               -            -             -            10.2          (10.2 )      -            (10.2 )      (0.06 )
    (e)
10  Tax indemnifications        -              -             -               -               -            -             -            27.1          (27.1 )      -            (27.1 )      (0.17 )
    (f)
11  Income tax adjustments     -            -           -             -             -          -           -          -           -          84.9       (84.9 )     (0.54 )
    (g)
                              $ (46.3   )   $  (38.3  )   $  (61.9    )   $  (7.7     )   $  (83.8  )   $ (31.3   )   $ 176.7    $  (109.4 )   $  286.1    $  84.9     $  201.2    $  1.27  
                                                                                                                                                                                       
    Restructuring charges of $1 million and $7.7 million in 2012 and 2011, respectively, primarily relate to facility consolidations, supply chain and distribution and other organizational
(a) streamlining activities.In 2012, other SG&A charges primarily include $3.6 million of charges associated with our internal investigation with respect to our India operations.In 2011,
    the other charges include adjustments 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 expense consist of: transaction-related
(b) expenses of $5 million, contract termination expenses of $10 million and integration related expenses of $2 million. In addition, acquisition related adjustments include amounts charged to
    costs of goods sold and restructuring charges that primarily relate to accelerated depreciation and employee retention. The 2011 adjustment relates to acquisition related contingent
    consideration accrued in September 2011.
                                                                                                                                                                                       
    The adjustment in 2012 primarily relates to a $15.1 million pension settlement charge associated with a required $29 million lump sum distribution paid to former Fortune Brands executives
(c) 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) The adjustments in 2012 and 2011 relate to the non-cash impairment of tradenames in Spain.
                                                                                                                                                                                       
(e) Adjustment to eliminate a gain related to a dividend distribution received in connection with the wind down of our former Maxxium investment.
                                                                                                                                                                                       
(f) Nontaxable reimbursement received from seller of an acquired business for resolution of certain tax matters for years prior to our ownership.
                                                                                                                                                                                       
    In 2012, the income tax adjustments primarily include a $22 million foreign tax credit related to the repatriation of foreign earnings, a $17 million net benefit arising from the resolution
(g) of certain foreign and US federal and state tax return matters, and $6 million of expense related to our annual reconciliation of the 2011 income tax filing to the 2011 provision for income
    taxes. 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.
                                                                                                                                                                                       
(h) Adjustment to eliminate the one-time net 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 structure, and (2)
(i) $2.5 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.
                                                                                                                                                                                       
(j) Adjustment to eliminate loss on early extinguishment of debt related to the Separation.
                                                                                                                                                                                       
N/M - not meaningful
bps - basis points


Beam Inc.
Segment Information ^(a)
(Unaudited)
                                                                               
  (In millions)                                                            Constant Currency
                                                                           (Non-GAAP)
                                        Three Months Ended      %          2012        %
                                        December 31,            Change     Adjusted    Change
  Net Sales                             2012        2011        Reported   Amount      Adjusted
                                                                           ^(b)
                                                                                       
  North America                         $ 391.1     $ 325.4     20.2  %    $ 389.7     19.8  %
  Europe, Middle East,                    177.2       171.0     3.6   %      179.7     5.1   %
  Africa ("EMEA")
  Asia Pacific / South                   140.8     141.1    -0.2  %     137.8    -2.3  %
  America ("APSA")
                                                                                       
  Segment net sales                       709.1       637.5     11.2  %      707.2     10.9  %
  Foreign exchange                       -         -                    1.9      n/m
                                                                                       
  Total net sales                       $ 709.1    $ 637.5    11.2  %    $ 709.1    11.2  %
                                                                                       
                                                                           Constant Currency
                                                                           (Non-GAAP)
                                        Three Months Ended      %          2012        %
                                        December 31,            Change     Adjusted    Change
  Operating Income                      2012        2011        Reported   Amount ^    Adjusted
                                                                           (b)
                                                                                       
  North America                         $ 83.7      $ 91.9      -8.9  %    $ 83.6      -9.0  %
  EMEA                                    54.9        50.5      8.7   %      54.6      8.1   %
  APSA                                   38.7      30.3     27.7  %     36.9     21.8  %
                                                                                       
  Segment operating income                177.3       172.7     2.7   %      175.1     1.4   %
  Deduct:
  Foreign exchange                        -           -                      (2.2  )
  Restructuring and other
  charges / gains (see                    20.6        36.5                   20.6
  detail above)
                                                                         
  Total operating income                $ 156.7    $ 136.2    15.1  %    $ 156.7    15.1  %
                                                                                       
  (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 December 31, 2012
                              North     EMEA        APSA        Segment
                              America                           Total
                              %         %           %           %
  Net Sales (GAAP)            20        4           -           11
  Foreign currency impact     -         1           (2)         -
  Acquisitions/divestitures   (12)      (1)         -           (6)
  Comparable Net Sales        8         4           (2)         5
  (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)
                                                            %          2012          %
                                Year Ended December 31,     Change     Adjusted      Change
  Net Sales                     2012          2011          Reported   Amount ^(b)   Adjusted
                                                                                               
  North America                 $ 1,450.6     $ 1,271.5     14.1  %    $ 1,455.9     14.5  %
  Europe, Middle East,            512.7         505.9       1.3   %      541.1       7.0   %
  Africa ("EMEA")
  Asia Pacific / South           502.6       487.4      3.1   %     501.1      2.8   %
  America ("APSA")
                                                                                               
  Segment net sales               2,465.9       2,264.8     8.9   %      2,498.1     10.3  %
  Foreign exchange                -             -                        (32.2   )   n/m
  Australia distribution         -           46.3                   -          n/m
  one-time sale
                                                                                               
  Total net sales               $ 2,465.9    $ 2,311.1    6.7   %    $ 2,465.9    6.7   %
                                                                                               
                                                                       Constant Currency
                                                                       (Non-GAAP)
                                                            %          2012          %
                                Year Ended December 31,     Change     Adjusted      Change
  Operating Income              2012          2011          Reported   Amount ^      Adjusted
                                                                       (b)
                                                                                               
  North America                 $ 393.5       $ 360.9       9.0   %    $ 389.9       8.0   %   
  EMEA                            123.6         120.3       2.7   %      128.9       7.1   %   
  APSA                           114.8       91.0       26.2  %     104.2      14.5  %   
                                                                                               
  Segment operating income        631.9         572.2       10.4  %      623.0       8.9   %
  Deduct:
  Foreign exchange                -             -                        (8.9    )
  Adjustment for charges /        56.0          176.7                    56.0
  gains (see detail above)
                                                                     
  Total operating income        $ 575.9      $ 395.5      45.6  %    $ 575.9      45.6  %
                                                                                               
  (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)
                                                                                               
                             Year Ended December 31, 2012
                                North         EMEA          APSA       Segment
                                America                                Total
                                %             %             %          %
  Net Sales (GAAP)              14            1             3          9
  Foreign currency impact       -             6             -          1
  Acquisitions/divestitures     (7)           (2)           -          (4)
  Ongoing impact -
  Australia distribution        -             -             2          -
  margin
  Comparable Net Sales          7             5             5          6
  (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 December   Year Ended December 31,
                       31,
                       2012            2011          2012           2011
                                                                    
  GAAP income from
  continuing           $  126.8        $  91.2       $ 398.2        $ 133.3
  operations
                                                                    
  Add (deduct):
                                                                    
  Other income            (4.8   )        (5.8   )     (35.1  )       (40.4  )
  Interest expense        29.1            30.9         109.0          117.4
  Loss on early
  extinguishment of       -               15.2         -              149.2
  debt
  Depreciation            26.9            22.9         101.9          90.1
  expense
  Amortization            4.4             4.1          17.2           16.3
  expense
  Income tax              5.6             4.7          103.8          36.0
  expense
  Adjustment for
  charges / gains        20.6          36.5       56.0         176.7  
  (see detail
  above)
                                                                    
  EBITDA before
  charges/gains        $  208.6       $  199.7     $ 751.0       $ 678.6  
  (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 December
  Cash Conversion      31,                           Year Ended December 31,
  Rate (a)
                       2012            2011 (b)      2012           2011 (b)
  GAAP cash
  provided by          $  265.6        $  137.1      $ 378.2        $ 454.4
  operating
  activities
  Add (deduct):
  Spirits capital
  expenditures, net       (35.7  )        (56.7  )     (125.0 )       (164.7 )
  of disposition
  proceeds
  Cash used for
  discontinued            3.6             28.2         83.6           28.2
  operations (c)
  Cash provided by
  discontinued            -               -            -              (80.0  )
  businesses (d)
                                                                 
  Adjusted free
  cash flow            $  233.5       $  108.6     $ 336.8   A   $ 237.9  
  (Non-GAAP)
                                                                    
  Net income before
  charges/gains                                      $ 385.6    B
  (see above)
                                                     
  Cash Conversion                                     87     % A/B
  Rate
                                                                    
                                                                    
  (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)
                       Year Ended
                       December
                       31, 2012 -
                       Income          Average
                      from            Invested      ROIC
                       Continuing      Capital
                       Operations
                       plus After-
                       tax Interest
                                                                    
  Unadjusted           $  469          $  6,774      7%
                                                                    
  Add: impact of
  "charges/gains"        (13    )       18     
  (previously
  defined)
                                                                    
  ROIC before
  charges/gains           456             6,792      7%
  (Non-GAAP)
                                                                    
  Impact of
  excluding              11            (4,719 )
  goodwill and
  intangibles
  ROIC before
  charges/gains and
  excl. goodwill       $  467         $  2,073     23%
  and intangibles
  (Non-GAAP)
                                                                    
  (a) ROIC is income from continuing operations plus after-tax
  interest expense 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 December 31, 2012. 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
Year Ended December 31, 2012
(Unaudited)
                                                                               
                                                                               
                      Foreign    Australia      Australia
                      Currency   Distribution   Distribution                   Non-GAAP -
              GAAP    Exchange   Agreement      Margin         Acquisitions/   Comparable
              Basis  Rates     Change        Structure     Divestitures   Basis
              %                                                                %
Power         10      2          3              1              (6)             10
Brands
Jim Beam      3       1          5              1              -               10
Maker’s       14      -          1              -              -               15
Mark
Sauza (a)     7       2          1              -              -               10
Courvoisier   8       1          2              1              -               12
Canadian      1       -          4              1              -               6
Club
Teacher’s     (9)     10         1              (1)            -               1
Pinnacle      -       -          -              -              19              19
                                                                               
Rising        11      1          -              -              (2)             10
Stars
Laphroaig     11      3          1              -              -               15
Knob Creek    24      -          -              -              -               24
Basil         31      -          4              -              -               35
Hayden's
Kilbeggan     -       -          -              -              1               1
Cruzan        11      -          1              -              -               12
Hornitos      (3)     1          -              -              -               (2)
EFFEN         (22)    -          -              -              -               (22)
Pucker        (5)     -          -              -              -               (5)
Vodka
Skinnygirl    21      -          -              -              (2)             19
Sourz         (3)     4          -              -              -               1
                                                                               
                                                                               
Local         (5)     4          -              -              -               (1)
Jewels
                                                                               
Value         (1)     1          3              1              (5)             (1)
Creators
                                                                               
Net sales     7       1          2              -              (4)             6
(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           December 31, 2012
(Unaudited) (a)
GAAP debt / operating cash flow                         6.6
Impact of using net debt rather than GAAP total debt    (1.0         )
(a)
Impact of using adjusted EBITDA rather than GAAP        (2.8         )
operating cash flow
Net debt / EBITDA before charges/gains                  2.8          

(a) Net debt equals total debt less cash as of December 31, 2012. GAAP
operating cash flow and EBITDA before charges /gains are based on the year
ended December 31, 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 2013 Diluted EPS from Continuing Operations Growth
Target to GAAP Target
For the full year 2013, the Company is targeting high-single-digit growth in
diluted EPS from continuing operations before charges/gains as compared to its
full year 2012 diluted EPS from continuing operations before charges/gains
($2.40). Given the nature of special charges/gains, the Company cannot predict
such items and, therefore, the Company's 2013 targeted diluted EPS from
continuing operations used to determine the year-over-year growth rate in
diluted EPS excludes any such items.



Comparing targeted 2013 diluted EPS from continuing operations before
charges/gains to the Company's 2012 GAAP diluted EPS from continuing
operations ($2.48) results in mid-single-digit growth in diluted earnings per
share from continuing operations. The lower growth rate, as compared to
year-over-year growth on a before charges/gains basis, is attributable to the
2012 charges/gains described above.
                                        
Full Year 2013 Free-Cash-Flow Target
For the full year 2013, the Company is targeting free cash flow in the range
of $300 million to $350 million. 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 that the measure of free cash flow provides investors with
helpful supplemental information about the Company's ability to fund internal
growth, make acquisitions, repay debt, pay dividends, and repurchase common
stock. This measure may be inconsistent with similar measures presented by
other companies.


                                                   
Comparable Sales Increase - First Quarter 2012 Compared to First Quarter 2011
                                                                %
Net Sales (GAAP)                                                2
Australia Distribution Agreement Change                         10
Australia Distribution Margin Structure                         2
Acquisitions/Divestitures                                       -1
Non-GAAP - Comparable Basis                                     13

Contact:

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
 
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