Beam Reports 2013 First Quarter Results

  Beam Reports 2013 First Quarter Results

  *Strong Results in North America and Global Innovations Fuel Continued
    Outperformance
  *Earnings Per Share Increase at Double-Digit Rate
  *Company Reaffirms Full-Year Outlook

Business Wire

DEERFIELD, Ill. -- May 02, 2013

Beam Inc. (NYSE: BEAM), a leading global premium spirits company, today
reported results for the first quarter of 2013. Reported net sales increased
8%, benefiting from strong commercial performance and the acquisition of
Pinnacle Vodka. On a comparable basis, net sales increased 3%, reflecting the
comparison to the year-ago quarter when new product introductions and
route-to-market transitions helped comparable net sales increase 13%.

Operating income increased 37%, benefiting from factors including favorable
product mix and the timing of expenses. Diluted earnings per share from
continuing operations were $0.72, up 47%. Diluted EPS before charges/gains
increased 21% to $0.64.

“We’re pleased with Beam’s strong start to 2013,” said Matt Shattock,
president and chief executive officer of Beam. “Even as we lapped our most
challenging quarterly sales growth comparison of the year, our brands
sustained their momentum in the marketplace and continued to outperform. We
delivered above-market growth in North America, led by our heartland United
States market, and we also continued to benefit from our sustained strength in
Bourbon and successful innovations across our portfolio in key markets around
the world.

“While sales were in line with our expectations, we delivered
better-than-expected leverage at the bottom line, which we anticipate will
reverse in the next couple of quarters. Margins benefited from factors we
called out last quarter: the timing of raw materials-related costs, favorable
product mix, and the carryover benefit of previously implemented price
increases. Mix was better than expected due to strong demand for our premium
innovations and our high-end whiskies, led by Maker’s Mark. The bottom line
further benefited from an advertising shift to the second and third quarters.”
The company continues to expect that brand investment will rise at a rate in
line with sales growth for the full year.

Financial Highlights for the First Quarter:

  *Income from continuing operations was $115.8 million, or $0.72 per diluted
    share, versus $0.49 per diluted share in the year-ago quarter.
  *Excluding charges and gains, diluted EPS from continuing operations was
    $0.64, up 21% from $0.53 in the year-ago quarter.
  *Reported net sales were $577.7 million (excluding excise taxes), up 8%.
  *On a comparable basis, which adjusts for foreign exchange and
    acquisitions/divestitures, net sales were up 3%.

       *Comparable net sales by segment: North America +7%; Europe/Middle
         East/Africa (EMEA) +1%; Asia Pacific/South America (APSA) -7%.

            *In North America, the strong comparable sales growth reflected
              favorable mix, carryover pricing and the accelerated timing of
              innovations, which combined to overcome a challenging comparison
              to 12% growth a year ago.
            *EMEA’s comparable sales growth rate reflected a comparison to
              12% growth in the year-ago quarter.
            *Growth in APSA was impacted by strength in the year-ago quarter
              when the segment’s comparable net sales increased 16% and, as
              expected, by lower results in India as the company repositions
              its business there.

       *Results for Power Brands in the company’s seasonally smallest sales
         quarter were in line with expectations, and reflected the comparison
         to exceptional 19% comparable net sales growth for these brands in
         the year-ago quarter.

  *Operating income was $179.0 million, up 37%.
  *Operating income before charges/gains was $169.0 million, up 22%.
  *Return on invested capital before charges/gains (rolling 12 months) was 7%
    and was 24% excluding intangibles.

                          Confidence in 2013 Outlook

“We compete in a dynamic, profitable and growing industry with excellent
fundamental trends across our markets,” Shattock continued. “As we look ahead,
we continue to see our global market growing in the range of 3% for the year.
With the success of our investments to further strengthen our premium brand
equities, drive growth through innovation and enhance our routes to market, we
feel very well positioned to continue outperforming our global market in 2013
and to drive sustainable, profitable long-term growth. At the bottom line, the
timing of costs that was a tailwind in Q1 will be a headwind that we expect
will result in a moderate EPS growth rate over the next couple of quarters.

“Our first quarter results combined with our inherent strengths reinforce our
confidence in our outlook for the full year, and we’re reaffirming our target
to deliver high-single-digit growth in diluted EPS before charges/gains for
2013.”

The company also reaffirmed its target 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.

Key Brand Performance

Comparable net sales growth, year to date (January-March):

                
                 Comparable
                   Net Sales
                Growth (1)
Power Brands     -2%
Jim Beam         -2%
Maker’s Mark     +44%
Sauza            -6%
Pinnacle         +8%
Courvoisier      -29%
Canadian Club    +8%
Teacher’s        -20%
                
Rising Stars     +20%
Laphroaig        +27%
Knob Creek       +3%
Basil Hayden’s   +16%
Kilbeggan        -30%
Cruzan           +6%
Hornitos         +3%
Skinnygirl       +140%
Sourz            -21%
                
Local Jewels     -6%
                
Value Creators   +1%
                
Total (2)        +3%
                   

    Results include ready-to-drink products
        
              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
        (1)  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.
              

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. These
forward-looking statements relate to matters including market growth, our
performance and the effects of the timing of expenses. 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 before charges/gains, and free cash flow. 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 March 31,
(In millions, except per share          2013         2012         % Change
amounts)
                                                                      
Sales                                   $ 715.2        $ 662.9
Less: Excise taxes                       (137.5 )      (129.1 )
Net sales                                 577.7          533.8        8.2   %
                                                                      
Cost of goods sold                       228.6        219.1       4.3   %
                                                                      
Gross profit                              349.1          314.7        10.9  %
                                                                      
Advertising and marketing expense         74.8           76.7         -2.5  %
Selling, general and administrative       102.9          100.4        2.5   %
expense
Amortization of intangible assets         4.5            4.2          7.1   %
Gain on sale of brands and related        (12.8  )       -
assets
Restructuring charges                    0.7          2.3    
                                                                      
Operating income                          179.0          131.1        36.5  %
                                                                      
Interest expense                          26.4           24.5         7.8   %
Other income                             (1.4   )      (5.9   )
                                                                      
Income from continuing operations
before income taxes                       154.0          112.5        36.9  %
                                                                      
Income taxes                             38.2         34.1   
                                                                      
Income from continuing operations         115.8          78.4         47.7  %
                                                                      
(Loss) income from discontinued          (1.3   )      0.7    
operations, net of tax
                                                                      
Net income                              $ 114.5       $ 79.1        44.8  %
                                                                      
Basic earnings (loss) per common
share:
Continuing operations                   $ 0.72         $ 0.50         44.0  %
Discontinued operations                  (0.01  )      -      
Net income                              $ 0.71        $ 0.50        42.0  %
                                                                      
Diluted earnings (loss) per common
share:
Continuing operations                   $ 0.72         $ 0.49         46.9  %
Discontinued operations                  (0.01  )      -      
Net income                              $ 0.71        $ 0.49        44.9  %
                                                                      
Weighted-average common shares
outstanding
Basic                                     160.5          157.1        2.2   %
Diluted                                   161.8          159.6        1.4   %
                                                                      

Beam Inc.
Condensed Consolidated Balance Sheet
(Unaudited)

                                                  
(In millions)                            March 31,     December 31,
                                         2013          2012
Assets
Cash and cash equivalents                $ 65.1        $   365.7
Accounts receivable                        470.2           455.7
Inventories                                1,764.3         1,736.9
Other current assets                      258.9          305.1
                                                       
Total current assets                       2,558.5         2,863.4
Property, plant and equipment              781.4           787.9
Goodwill and other intangible assets       4,807.4         4,879.1
Other assets                              113.9          106.5
                                                       
Total assets                             $ 8,261.2     $   8,636.9
                                                       
Liabilities and Equity
Short-term debt, including current
portion of long-term debt                $ 192.0       $   480.1
Accounts payable                           199.7           264.0
Long-term debt                             2,022.8         2,024.9
Other liabilities                         1,168.5        1,255.8
                                                       
Total liabilities                          3,583.0         4,024.8
                                                       
Total equity                              4,678.2        4,612.1
                                                       
Total liabilities and equity             $ 8,261.2     $   8,636.9
                                                           

Beam Inc.
Use of Non-GAAP Financial Information

Management believes that the measures used in this release, which are not
presented in accordance with generally accepted accounting principles
("GAAP"), 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 (when applicable) asset impairment charges, gain/loss on the
disposition of assets, restructuring charges, other charges related to
restructuring initiatives that cannot be reported as restructuring under GAAP,
acquisition and integration related costs, and distribution gains from the
wind down of our former Maxxium investment. Charges / gains excluded from GAAP
results may 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.

Additional non-GAAP measures included in this release include amounts
identified as “comparable,” “adjusted” and “constant currency,” as well as
"adjusted free cash flow" and "earnings before interest, income taxes,
depreciation, and amortization of intangible assets (EBITDA) before charges /
gains". 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 March 31, 2013         Three Months Ended March 31, 2012          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                   $ 577.7        -          $   577.7       $   533.8          -          $  533.8       8.2  %      8.2   %
  Cost of goods sold           228.6      (0.3   )                      219.1        (0.2   )
                                                                                                                                                    
  Gross profit                  349.1        0.3            349.4           314.7          0.2           314.9       10.9 %      11.0  %
  Gross profit margin           60.4  %                     60.5   %        59.0   %                     59.0  %   140        150 bps
                                                                                                                   bps
                                                                                                                                                    
  Advertising and marketing     74.8         -                              76.7           -
  expense
  Selling, general and          102.9        (1.8   )                       100.4          (4.4   )
  administrative expense
  Amortization of               4.5          -                              4.2            -
  intangible assets
  Gain on sale of brands        (12.8 )      12.8                           -              -
  and related assets
  Restructuring charges        0.7        (0.7   )                      2.3          (2.3   )
                                                                                                                                                    
  Operating income              179.0        (10.0  )       169.0           131.1          6.9           138.0       36.5 %      22.5  %
  Operating income margin       31.0  %                     29.3   %        24.6   %                     25.9  %   640        340 bps
                                                                                                                   bps
  Interest expense              26.4         -                              24.5           -
  Other income                 (1.4  )     -                            (5.9   )      1.9    
                                                                                                                                                    
  Income from continuing
  operations
  before income taxes           154.0        (10.0  )                       112.5          5.0
  Income taxes                 38.2       2.3                          34.1         (1.0   )
  Effective tax rate            24.8  %                     28.1   %        30.3   %                     28.2  %
                                                                                                                                                    
                                                                                                                                                    
  Income from continuing      $ 115.8      (12.3  )   $   103.5       $   78.4         6.0       $  84.4        47.7 %      22.6  %
  operations
                                                                                                                                                    
  Diluted EPS - continuing    $ 0.72       (0.08  )   $   0.64        $   0.49         0.04      $  0.53        46.9 %      20.8  %
  operations
                                                                                                                                                    
  Adjustments Detail by
  Applicable Financial
  Statement Line Items
                              Cost of                   Gain on sale                                  Pre-tax                 Income       Diluted
  Three months ended March    goods       SG&A          of brands and   Restructuring   Operating     income       Income     from         EPS -
  31, 2013                    sold        expense       related         charges         income        -cont.       taxes      cont.        cont.
                                                        assets                                        operations              operations   operations
  1 Restructuring charges     $ -         $  -          $   -           $   (0.2   )    $  0.2        $  0.2       $ 0.1      $  0.1       $  -
    (a)
  2 Other charges (b)           -            (1.8   )       -               -              1.8           1.8         0.6         1.2          0.01
  3 Acquisition/integration     (0.3  )      -              -               (0.5   )       0.8           0.8         0.3         0.5          -
    related costs (c)
  4 Gain on sale of brands      -            -              12.8            -              (12.8  )      (12.8 )     (4.6 )      (8.2  )      (0.05 )
    and related assets (d)
  5 Income tax adjustment      -          -            -             -            -           -         5.9       (5.9  )     (0.04 )
    (e)
                              $ (0.3  )   $  (1.8   )   $   12.8       $   (0.7   )    $  (10.0  )   $  (10.0 )   $ 2.3     $  (12.3 )   $  (0.08 )
                                                                                                                                                    
                              Cost of                                                                 Pre-tax                 Income       Diluted
  Three months ended March    goods       SG&A          Restructuring   Operating       Other         income       Income     from         EPS -
  31, 2012                    sold        expense       charges         income          expense       -cont.       taxes      cont.        cont.
                                                                                                      operations              operations   operations
  1 Restructuring charges     $ -         $  -          $   (2.3   )    $   2.3         $  -          $  2.3       $ 0.8      $  1.5       $  0.01
    (a)
  2 Other charges (b)           (0.2  )      (0.6   )       -               0.8            -             0.8         0.3         0.5          -
    Acquisition and
  3 integration related         -            (3.8   )       -               3.8            -             3.8         (2.1 )      5.9          0.04
    costs (c)
  4 Maxxium distribution       -          -            -             -            1.9         (1.9  )    -         (1.9  )     (0.01 )
    (f)
                              $ (0.2  )   $  (4.4   )   $   (2.3   )    $   6.9        $  1.9       $  5.0      $ (1.0 )   $  6.0      $  0.04  
                                                                                                                                                    

      The 2013 and 2012 restructuring charges primarily consist of
(a)  employee-related charges associated with the relocation of our North
      America shared services to Kentucky as well as other North America
      organizational streamlining initiatives.
      
      Other charges for 2013 represent $1.8 million of legal, forensic
      accounting and other third party expenses incurred in connection our
(b)   internal investigation of our India business. Other charges in 2012
      primarily relate to external fees incurred in connection with various
      organizational streamlining initiatives.
      
      In 2013, the adjustments relate to expenses incurred in connection with
      integrating the Pinnacle business into our operations (including,
      accelerated depreciation and employee retention costs). In 2012, the
      adjustments relate to the acquisition and integration of the Cooley
      business, consisting of expenses incurred in connection with acquiring
(c)   and integrating this business into our operations, primarily distributor
      termination fees of $3 million and transaction related expenses. The
      2012 income tax related amounts include the tax benefit associated with
      these charges and 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 acquisition.
      
(d)   The adjustment primarily relates to the gain on the sale of certain
      non-strategic, economy brands and related inventory in January 2013.
      
      The adjustment primarily relates to our decision in the first quarter of
(e)   2013 to participate in a tax amnesty program resulting in an adjustment
      to uncertain tax positions.
      
      The adjustment is to eliminate a gain in the first quarter of 2012
(f)   related to a distribution received in connection with the wind down of
      our former Maxxium investment.
      
bps - basis points

Beam Inc.
Segment Information ^(a)
(Unaudited)
                                                             
(In millions)                                        Constant Currency
                                                     (Non-GAAP)
                    Three Months Ended    %          2013            %
                    March 31,             Change     Adjusted        Change
Net Sales           2013        2012      Reported   Amount ^ (b)    Adjusted
                                                                     
North America       $ 364.0     $ 309.3   17.7  %    $  363.5        17.5   %
Europe, Middle
East, Africa          105.6       107.3   -1.6  %       105.5        -1.7   %
("EMEA")
Asia Pacific /
South America        108.1     117.2   -7.8  %      109.4       -6.7   %
("APSA")
                                                                     
Segment net           577.7       533.8   8.2   %       578.4        8.4    %
sales
Foreign              -         -                    (0.7   )     n/m
exchange
Total net sales     $ 577.7    $ 533.8   8.2   %    $  577.7       8.2    %
                                                                     
                                                     Constant Currency
                                                     (Non-GAAP)
                    Three Months Ended    %          2013            %
                    March 31,             Change     Adjusted        Change
Operating           2013        2012      Reported   Amount ^ (b)    Adjusted
Income
                                                                     
North America       $ 123.4     $ 98.6    25.2  %    $  123.6        25.4   %
EMEA                  24.6        17.4    41.4  %       24.7         42.0   %
APSA                 21.0      22.0    -4.5  %      21.7        -1.4   %
                                                                     
Segment
operating             169.0       138.0   22.5  %       170.0        23.2   %
income
Deduct:
Foreign               -           -                     1.0
exchange
Restructuring
and other
charges / gains      (10.0 )    6.9                  (10.0  )
(see detail
above)
Total operating     $ 179.0    $ 131.1   36.5  %    $  179.0       36.5   %
income
                                                                     

(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 March 31, 2013
                                  North                          Segment
                                  America        EMEA         APSA     Total
                                  %              %            %        %
Net Sales (GAAP)                  18             (2  )        (8 )     8
Foreign currency impact           -              -            1        -
Acquisitions/divestitures         (11   )        3           -       (5   )
Comparable Net Sales              7             1           (7 )     3    
(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.
Reconciliations of GAAP to Non-GAAP Measures (Unaudited)
($ in millions)
                                                              
EBITDA before             Three Months           Three Months     Twelve
charges/gains (a)                                                 Months
                          Ended                  Ended            Ended
                          March 31,              March 31,        March 31,
                          2013                   2012             2013
GAAP income from
continuing                $   115.8              $   78.4         $  435.6
operations
Add (deduct):
Other income                  (1.4      )            (5.9   )        (30.6  )
Interest expense              26.4                   24.5            110.9
Depreciation expense          28.3                   24.6            105.6
Amortization expense          4.5                    4.2             17.5
Income tax expense            38.2                   34.1            107.9
Adjustment for
charges / gains (see         (10.0     )           6.9           39.1   
detail above)
EBITDA before
charges/gains             $   201.8             $   166.8       $  786.0  
(Non-GAAP)
                                                                  
(a) EBITDA before charges/gains is EBITDA less charges/gains. Refer to the
section "Use of Non-GAAP Financial Information" (above) for definitions of
EBITDA and "charges/gains". Management uses this measure to assess returns.
Management believes this measure provides investors with helpful information
about the Company's ability to fund internal growth, make acquisitions and
repay debt and related interest.
                                                                  
Net Debt at March
31, 2013
Short-term debt,
including current         $   192.0
portion of long-term
debt
Long-term debt               2,022.8   
Total debt                    2,214.8
Less: Cash and cash          (65.1     )
equivalents
Net Debt                  $   2,149.7   
                                                                  
Net Debt-to-EBITDA
before charges/gains
Net Debt at March
31, 2013 (from            $   2,149.7       A
above)
EBITDA before
charges/gains (TME        $   786.0         B
March 31, 2013 -
from above)
Net debt to EBITDA            2.7           A/B
before charges/gains
                                                                  
Free Cash Flow (a)        Three Months Ended March 31,            2013 Full
                                                                  Year
                          2013                   2012             Targeted
                                                                  Range
GAAP cash provided
(used) by operating       $   (59.5     )        $   (51.6  )     $430 - 495
activities
Add (deduct):
Capital                                                           (145) -
expenditures, net of          (23.7     )            (23.1  )     (160)
disposition proceeds
Cash used for
discontinued                 15.9                 18.9        16 - 16
operations (b)
                                                                  
Adjusted free cash        $   (67.3     )        $   (55.8  )     $300 - 350
flow (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) 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. Targeted amount represents
actual amounts paid in 2013, as timing and amount of future payments are
uncertain.


Beam Inc.
Reconciliations of GAAP to Non-GAAP Measures (Unaudited)

Return on Invested
Capital (ROIC) from                                             
Continuing Operations
(a)
                             Twelve Months
                             Ended
                             March 31, 2013        Average Invested
($ in millions)              - Income              Capital                ROIC
                             from Cont. Ops.
                             plus After
                             -tax Interest
                                                                          
Unadjusted                   $    508              $   6,902              7  %
                                                                          
Add: impact of
"charges/gains"                  (31    )            (4       )
(previously defined)
                                                                          
ROIC before
charges/gains                     477                  6,898              7  %
(Non-GAAP)
                                                                          
Impact of excluding
goodwill and other               11                 (4,835   )
intangibles
ROIC before
charges/gains and
excl. goodwill and           $    488             $   2,063             24 %
other 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 March 31, 2013. See
the page entitled "Use of Non-GAAP Financial Information" for further
information relating to the Company's use of non-GAAP measures.

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 of
$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, which was $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.


Beam Inc.
Reconciliation of GAAP Net Sales Growth to Comparable Net Sales Growth
Three Months Ended March 31, 2013
(Unaudited)
                                                        
                                                                 
                                  Foreign
                                  Currency                       Non-GAAP -
                                  Exchange     Acquisitions/     Comparable
                   GAAP Basis     Rates        Divestitures      Basis
                   %              %            %                 %
Power Brands       5              -            (7      )         (2     )
Jim Beam           (2     )       -            -                 (2     )
Maker’s Mark       44             -            -                 44
Sauza (a)          (5     )       (1    )      -                 (6     )
Pinnacle           -              -            8                 8
Courvoisier        (29    )       -            -                 (29    )
Canadian Club      7              1            -                 8
Teacher’s          (26    )       6            -                 (20    )
                                                                 
Rising Stars       21             -            (1      )         20
Laphroaig          27             -            -                 27
Knob Creek         3              -            -                 3
Basil Hayden's     16             -            -                 16
Kilbeggan (b)      -              (1    )      (29     )         (30    )
Cruzan             6              -            -                 6
Hornitos           3              -            -                 3
Skinnygirl         139            1            -                 140
Sourz              (22    )       1            -                 (21    )
                                                                 
Local Jewels       (6     )       -            -                 (6     )
                                                                 
Value Creators     (4     )       -            5                 1
                                                                 
Net sales (c)      8              -            (5      )         3
                                                                        

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 and acquisitions/divestitures. See the section "Use of
Non-GAAP Financial Information" (above) for additional information related to
the use of Non-GAAP measures.

(a) Excludes Hornitos
(b) Includes 2Gingers
(c) Net sales represents consolidated net sales (excluding excise taxes),
including non-branded sales to third parties.


Beam Inc.
Prior Year Information ^(a)
(Unaudited)
                                                                                       
(In millions)                                                                 Constant Currency
                                                               %              2012            %
                                    Three Months Ended March   Change         Adjusted        Change
                                    31,
Net Sales                           2012        2011           Reported       Amount ^(b)     Adjusted
                                                                                              
North America                       $ 309.3     $  274.7       12.6     %     $    310.5      13.0    %
Europe, Middle East,                  107.3        95.8        12.0     %          110.3      15.1    %
Africa ("EMEA")
Asia Pacific / South                 117.2      107.2      9.3      %         112.6     5.0     %
America ("APSA")
                                                                                              
Segment net sales                     533.8        477.7       11.7     %          533.4      11.7    %
Foreign exchange                      -            -                               0.4        n/m
Australia distribution               -          46.3                          -         n/m
one-time sale
                                                                                              
Total net sales                     $ 533.8    $  524.0      1.9      %     $    533.8     1.9     %
                                                                                              
                                                                              Constant Currency
                                                               %              2012            %
                                    Three Months Ended March   Change         Adjusted        Change
                                    31,
Operating Income                    2012        2011           Reported       Amount ^ (b)    Adjusted
                                                                                              
North America                       $ 98.6      $  82.9        18.9     %     $    98.2       18.5    %
EMEA                                  17.4         20.4        -14.7    %          17.2       -15.7   %
APSA                                 22.0       14.8       48.6     %         16.7      12.8    %
                                                                                              
Segment operating income              138.0        118.1       16.9     %          132.1      11.9    %
Foreign exchange                      -            -                               (5.9   )
Adjustment for charges /              6.9          6.1                             6.9
gains
                                                                            
Total operating income              $ 131.1    $  112.0      17.1     %     $    131.1     17.1    %
                                                                                              
(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 growth of the segments on a constant currency basis 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             Three Months Ended March 31, 2012
Change in Comparable Net
Sales (Unaudited)
                                    North       EMEA           APSA           Segment Total
                                    America
                                    %           %              %              %
Net Sales (GAAP)                      13           12          9                   12
Foreign currency impact               -            3           (4       )          -
Acquisitions/divestitures             (1    )      (3     )    -                   (1     )
Ongoing impact -Australia            -          -          11                2      
distribution margin
Comparable Net Sales                 12         12         16                13     
(Non-GAAP)
                                                                                              
                                                                                              
                            Three Months Ended March 31, 2012
                                    Foreign     Australia      Australia                      Non-GAAP -
                            GAAP   Currency   Distribution  Distribution  Acquisitions/  Comparable
                            Basis   Exchange    Agreement      Margin         Divestitures    Basis
                                    Rates       Change         Structure
                            %         %            %           %                   %          %
Power Brands                2         -            13          4                   -          19
Jim Beam                    (7  )     (1    )      19          8                   -          19
Courvoisier                 27        2            12          -                   -          41
Teacher’s                   7         6            4           -                   -          17
                                                                                              
Rising Stars                19        1            2           1                   (7     )   16
Net sales (a)               2         -            10          2                   (1     )   13
                                                                                              
Comparable net sales growth rate represents the percentage change in reported net sales in accordance
with GAAP, adjusted for certain items. 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 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.
                                                                                              
(a) 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)
                                                                             
                                                                             
                                                  Three
                             Three Months         Months
                          Ended March 31,    Ended March   % Increase
                             2012                 31,
                                                  2011
    Diluted EPS - GAAP       $    0.49            $   0.39        25.6   %
    Adjustments (See             0.04              0.02
    Details Below)
    Diluted EPS Before       $    0.53           $   0.41        29.3   %
    Charges/Gains
                                                                             
                                                                             
Adjustments Detail
                                                                             
                                                                             
Three months Ended March     Diluted EPS -
31, 2012                     cont. ops
                                                                             
1   Restructuring            $    0.01
    charges (a)
2   Other charges (a)             -
    Acquisition and
3   integration related           0.04
    (b)
4   Maxxium distribution         (0.01   )
    (c)
                             $    0.04    
                                                                             
                                                                             
Three months Ended March     Diluted EPS -
31, 2011                     cont. ops
                                                                             
1   Restructuring            $    0.01
    charges (a)
2   Other charges (a)             0.03
3   Separation costs (d)          0.06
    Australia
4   distribution                  (0.15   )
    one-time sale (e)
5   Standalone company            0.09
    adjustment (f)
6   Tax indemnifications          (0.01   )
    (g)
7   Income tax                   (0.01   )
    adjustments (h)
                             $    0.02    
                                                                             

      Adjustment to eliminate restructuring and other charges (and credits)
(a)  primarily related to facility consolidations, supply chain and
      distribution and other organizational streamlining initiatives.
      
      Adjustment related to the acquisition and integration of the Cooley
(b)   business acquired 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 acquisition.
      
(c)   Adjustment to eliminate a gain related to a distribution received in
      connection with the wind down of our former Maxxium investment.
      
(d)   Adjustment to eliminate external costs directly related to implementing
      the separation of Fortune Brands, Inc. in 2011.
      
      Adjustment to eliminate the one-time sales and margin impact associated
(e)   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) $14.4 million operating expense adjustment to
(f)   reflect a lower corporate cost structure, and (2) $0.1 million interest
      expense adjustment to assume the separation-related debt reduction had
      been completed as of January 1, 2011.
      
(g)   Reimbursement received from seller of a business for resolution of
      certain tax matters for years prior to our ownership.
      
      Combined adjustment to eliminate income tax matters (related to the
(h)   resolution of routine foreign tax audit examinations) and the tax
      impacts of the above adjustments and to adjust income tax expense to
      Beam's estimated effective tax rate as a standalone Spirits business.

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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