Share-Based Payments

9 Months Ended

Sep. 29, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Payments

Share-Based Payments

During the first three quarters of 2012 and 2011, we recognized share-based compensation expense related to the following Class B common stock awards to certain directors, officers and other eligible employees, pursuant to the Molson Coors Brewing Company Incentive Compensation Plan ("Incentive Compensation Plan"): restricted stock units ("RSU"), deferred stock units ("DSU"), performance units ("PU"), stock options and stock-only stock appreciation rights ("SOSAR").

The following table summarizes share-based compensation expense:

	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	September 29, 2012			September 24, 2011			September 29, 2012			September 24, 2011
	(In millions)
Pre-tax compensation expense	$	5.2		$	5.0		$	15.1		$	19.3
Tax benefit	(1.4		)	(1.4		)	(4.3		)	(5.3		)
After-tax compensation expense	$	3.8		$	3.6		$	10.8		$	14.0

During the first three quarters of 2012, we granted 0.3 million stock options, 0.4 million RSUs and 0.7 million PUs, all of which were outstanding, other than an insignificant amount of cancellations, as of September 29, 2012.

The mark-to-market share-based compensation expense before tax, related to our share-based awards granted to former CBC employees now employed by MillerCoors, was a benefit of $0.1 million during the first three quarters of 2011. We did not record an adjustment in the third quarter of 2011, the third quarter of 2012, or the first three quarters of 2012 as these awards were fully vested as of the end of the second quarter of 2011. No further adjustments will be recorded related to these awards, which are included in the table above.

As of September 29, 2012, there was $30.1 million of total unrecognized pre-tax compensation expense related to non-vested shares from share-based compensation arrangements granted under the Incentive Compensation Plan. This compensation expense is expected to be recognized over a weighted-average period of approximately 1.4 years.

The following table represents the summary of stock options and SOSARs outstanding as of September 29, 2012, and the activity during the first three quarters of 2012:

	Outstanding options	Weighted-average exercise price per share	Weighted-average remaining contractual life (years)	Aggregate intrinsic value
	(In millions, except per share amounts and years)
Outstanding as of December 31, 2011	7.1	$38.69	4.31	$	43.1
Granted	0.3	$42.57
Exercised	(0.9)	$29.74
Forfeited	(0.1)	$47.18
Outstanding as of September 29, 2012	6.4	$40.09	4.21	$	37.9
Exercisable at September 29, 2012	5.4	$39.51	3.50	$	36.4

The total intrinsic value of options exercised during the first three quarters of 2012 and 2011 was $13.0 million and $2.7 million, respectively. During the first three quarters of 2012 and 2011, cash received from stock option exercises was $27.4 million and $8.5 million, respectively. The total tax benefit to be realized for the tax deductions from these option exercises and other awards was $4.2 million and $1.1 million during the first three quarters of 2012 and 2011, respectively.

The following table represents non-vested RSUs, DSUs and PUs as of September 29, 2012, and the activity during the first three quarters of 2012:

	RSUs and DSUs			PUs
	Units		Weighted-average grant date fair value per unit	Units		Weighted-average grant date fair value per unit
	(In millions, except per unit amounts)
Non-vested as of December 31, 2011	0.6		$43.35	2.0		$11.67
Granted	0.4		$42.02	0.7		$14.35
Vested	(0.2	)	$42.50	(0.7	)	$10.92
Forfeited	—		$43.38	(0.1	)	$10.97
Non-vested as of September 29, 2012	0.8		$43.07	1.9		$10.98

The fair value of each option granted in the first three quarters of 2012 and 2011 was determined on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	Thirty-Nine Weeks Ended
	September 29, 2012	September 24, 2011
Risk-free interest rate	1.50%	2.60%
Dividend yield	2.99%	2.56%
Volatility range	25.80%-27.56%	25.26%-29.35%
Weighted-average volatility	25.86%	26.25%
Expected term (years)	4.0-7.7	4.0-7.7
Weighted-average fair market value	$8.09	$9.64

The risk-free interest rates utilized for periods throughout the contractual life of the options are based on a zero-coupon U.S. Treasury security yield at the time of grant. Expected volatility is based on a combination of historical and implied volatility of our stock. The expected term of options is estimated based upon observations of historical employee option exercise patterns and trends. The range on the expected term results from separate groups of employees who exhibit different historical exercise behavior.

As of September 29, 2012, there were 8.0 million shares of our Class B common stock available for the issuance of stock options, SOSARs, RSUs, DSUs, PUs and performance share units under the Incentive Compensation Plan. This reflects the 5.0 million additional shares approved by our shareholders during the second quarter of 2012.