Distillers/Brewers

Allied Domecq PLC April 2001 Ratings and Contacts A Category Moody’s Rating Allied Domecq Financial Services PLC Allied Domecq PLC Senior Unsecured MTN A3* Bkd Senior Unsecured A3* Allied Domecq North America Corp. Bkd Subordinate -Dom Curr Baa1* Bkd Sr Unsec MTN A3 Allied Domecq Gestion France S.A. Bkd Commercial Paper P-2 Bkd Commercial Paper -Dom Curr P-2 Bkd Other Short Term P-2 Analyst Phone Lif B.V. David Major/London 44.20.7772.5454 Bkd Sr Unsec MTN A3* Jean-Michel Carayon/Paris 33.1.53.30.10.47 Bkd Commercial Paper P-2 Eric de Bodard/Paris Angela Jameson/New York 1.212.553.1653 * Placed under review for possible downgrade on February 7, 2001 Rating History Senior Unsecured MTN

A1 A2 A3 Baa1 4/94 4/95 4/96 4/97 4/98 4/99 4/00 4/01

Operating Statistics Allied Domecq PLC (Statistics in bold type) Peer Group Median (Statistics in light type) [1] [2]2000 1999 1998 1997 [3]5-Yr.Avg Int. cov (X) 4.6 4.6 4.4 4.0 5.9 5.8 5.6 5.6 5.3 4.7 RCF % TD 33.5 33.5 11.9 -12.5 7.0 7.0 15.5 15.5 21.6 12.4 Op. margin (%) 22.2 22.2 16.2 21.9 16.1 21.8 16.2 17.6 17.3 19.8 ROS (%) 15.4 15.4 4.0 4.0 8.0 8.7 10.2 10.2 8.6 7.9 ROC (pretax) (%) 19.1 19.1 5.8 5.8 15.9 15.9 15.8 19.9 13.9 14.2 [1] The latest year for peer group includes 1 companies out of 5. [2] For the 12 months ended August 31. [3] Five year average 2000-1996. Balance Sheet Statistics Allied Domecq PLC (Statistics in bold type) Peer Group Average (Statistics in light type) [1] [2]2000 1999 1998 1997 [3]5-Yr.Avg TD % cap. 81.6 81.6 37.3 39.9 36.9 41.9 30.9 37.5 44.0 48.4 DIT & min. int. (%) 7.1 7.1 6.6 1.6 7.2 2.1 10.0 4.2 8.2 3.7 Pfd. stk. (%) — — 0.2 — 0.2 0.2 0.5 0.2 0.4 0.2 Common (%) 11.4 11.4 56.0 58.5 55.9 55.7 58.8 58.0 47.7 47.8 Tot. cap. (US$ bil.) 2.4 2.4 11.1 6.2 11.6 6.0 10.4 5.9 [4]-20.8 [4]-19.3 TD % mkt. cap. — — 18.2 — 17.2 — 12.1 — 15.6 — [1] The latest year for peer group includes 1 companies out of 5. [2] As of August 31. [3] Five year average 2000-1996. [4] Five year compound annual growth rate. Opinion Rating Rationale Robbins and Dunkin’ Donuts international food franchises, The A3/Prime-2 debt ratings of Allied Domecq Plc and its which continue to generate cash with little use of capital. related entities reflect the company’s adequate debt protec- Recent Developments tion measurements, its steadily improving operating margins, Allied recently announced it has reached agreement to strong operational cash flow generation and its position as a acquire G.H. Mumm and Champagne Perrier-Jouet for Euro major international drinks company. However, the rating also 575million. Allied has also acquired exclusive rights to dis- recognises the challenges facing the global spirits industry, tribute the Stolichnaya Vodka brand in the US. the initial impact of the divestment of its UK retail businesses Analysis Rating Outlook on the group’s debt protection measurements and our expec- tation that the company will continue to selectively pursue In Feb. 2001 Moody's downgraded Allied's ratings by one in-fill acquisition opportunities. notch to A3/P-2 in view of the recent acquisitions and our Although the sale of the UK pub business for a consider- belief that Allied is now pursuing a more dynamic expansion ation of GBP2.64 billion, all of which was distributed to strategy. The long term rating also remains under review for shareholders, reduced Allied’s business diversity, the global possible downgrade, primarily pending the final outcome of spirits operation has produced more stable and predictable the company's potential option for the purchase of Captain cash flows, and makes the company considerably less suscep- Morgan Rum. In its review Moody's will focus upon the tible to fluctuations in the domestic economy. It also contin- financing structure of any further purchases, the potential ues to maintain a presence in the retail sector via its Baskin- enhancement to cash flow and the level of synergies Allied hopes to extract. Moody’s Coupon Type of Debt Maturity Rating Allied Domecq PLC — Global MTN Program — A3 Allied Domecq Financial Services PLC 6.750% Gtd. Conv. Sub. Eurobonds 2008 Baa1 — Gtd. Global MTN Program — A3 4.750% Gtd. Euro Medium Term Notes 2005 A3 Allied Domecq Gestion France S.A. — Commercial Paper — P-2 Allied Domecq North America Corp. — Gtd. Global MTN Program — A3 — Commercial Paper — P-2 Lif B.V. — Gtd. Global MTN Program — A3 — Commercial Paper — P-2

Rating History Peer Senior Unsecured MTN

Aa3 A1 A2 A3 Baa1 4/94 4/95 4/96 4/97 4/98 4/99 4/00 4/01 Allied Domecq PLC Peer Group Average The peer group on the front page and represented in the Rating History Peer graph may include: Allied Domecq PLC; Brown-Forman Corporation; Diageo PLC; Fortune Brands, Inc.; Seagram Company Ltd.

Author Senior Associate Senior Production Associate David Major Paolo Leschiutta John Tzanos

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2 Moody’s Analysis Risks/Weaknesses • Allied Domecq is now pursuing a considerably more dynamic expansion strategy that may bring with it a rise in event risk. • Moody's expects the company to continue to selectively consider in-fill acquisition opportunities. • We expect the sale of Seagram's global spirits business to Diageo plc and Pernod-Ricard to result in increased competitive and pricing pressures across the spirits sector. • Overall stagnant consumption in the world's core spirits markets of the US, Western Europe and Japan. • High advertising, marketing and promotional expenditures will continue to be required. Opportunities/Strengths • Allied continues to maintain and also enhance its strong international branded spirits portfolio. • Demerger of the UK retail operations, and the associated reduction in capital expenditure, has left Allied highly focused on its core spirits business. • Moody's expects the group to continue to generate strong operating cash flow. • Operating margins have trended upwards in recent years and further improvements are forecast. • Over three quarters of trading profit comes from stable and mature markets of Europe and North America. Company Fundamentals Having divested it UK retail businesses in late 1999,1 Allied's operations are now highly focused on the core spirits and wines business, which contribute around 85% of group trading profits. The only remaining retail operations comprise the Quick Service Restaurant ("QSR") operations including Dunkin' Donuts, Togo's and Baskin-Robbins, the company's international food franchises that are largely US based. At present Allied also continues to hold a 25% equity interest in Britannia Soft Drinks, which owns Britvic. In Moody's view, while the sale of the UK pub business reduced Allied's business diversity, the global spirits operation produces more stable and predictable cash flows, and makes the company considerably less suscepti- ble to fluctuations in the domestic economy. Since the demerger the company's management have been considerably more focused on the global development of the core spirits and wine business. Business Sector Analysis 2000 1999 Year ended August 31(GBP million) Trading profit* Operating margin Trading profit* Operating margin Spirits & Wine - continuing 414 18.0% 369 17.5% QSR 64 21.0% 53 17.8% Britannia (Britvic) 9 n/a 8 n/a Total Continuing Operations 487 18.7% 430 17.9% Discontinued operations 13 n/a 241 n/a Total Group 500 671 * before exceptional items and amortisation of goodwill Source: Allied Domecq 2000 annual report Management Strategy and Competitive Position Allied Domecq's core strategy is to grow the profitable volume sales of its leading brands. The company is increasingly focusing its marketing spend on key brand/market combinations that offer higher than average growth potential, in order to ensure long-term brand enhancement, generate top line growth and continued margin improvement.

1 Total consideration of approximately GBP2.5 billion cash and equity. The divested assets comprised 3,544 managed and leased pubs and Allied's 50% stake in First Quench (the off-license joint venture formed with Whitbread). All proceeds from the sale were distributed directly to Allied's existing shareholders.

Moody’s Analysis 3 Management Strategy • We expect Allied Domecq to continue to increasingly focus on the profitable development and growth of key brands in key markets: the company's top four key brands (Sauza, Kahlua, Ballantine's and Beefeater), together represent 36% of net brand contribution and account for 52% (1999 48%) of total marketing expenses. Net brand contribution in 2000 from the 'core 4 brands' rose 7% (1999 10%), fueled by a 14% increase in marketing investment (Allied's top 22 brands account for 82% of brand contribution). This growth was achieved in spite of a 19% reduction in Sauza volumes, due to the industry wide shortage of blue agave. During 2000 the spirits and wines overall brand marketing expen- diture rose by 8.7% at constant exchange rates to GBP301million representing around 13% of gross sales for the division (this compared with a similar percentage for Diageo's UDV business). In Moody's view, Allied Domecq is well positioned to continue to grow its core portfolio of premium inter- national brands, reflecting an established trend within the industry whereby leading interna- tional brands have grown at the expense of local products, which do not benefit from the same levels of investment, distribution or brand equity to sustain their market share. However, we expect it to become increasingly challenging to maintain such high growth rates in the core products, as it becomes more difficult to extract additional efficiencies from the business and also achieve further price and mix improvements in established markets. We also expect the rate of growth of marketing spend to slow over time, which in turn will require Allied to allo- cate spending in an increasingly efficient manner in order to maximise its growth opportunities. • Management remains committed to selectively pursuing in-fill acquisition, partnership and joint venture opportunities that add value: Allied Domecq has become increasingly active in the global expan- sion of its spirits and wine business.2 Part of its strategic approach is to identify and address those areas where gaps exist in its spirits portfolio — as illustrated by the recent purchase of the USA Stolichnaya Vodka distrib- ution rights, which goes some way in addressing Allied's previous weakness in the vodka market, and also its ongoing attempts to acquire Captain Morgan which, if successful, will result in a considerable strengthening of its position within the rum market. We expect Allied to continue to consider potential acquisition and joint venture opportunities that will either, improve its geographical reach (e.g. Jinro joint venture), build and leverage critical mass in key markets of strategic importance and/or deliver synergies through integration into Allied's global distribution network. In our opinion Allied's selective expansion strategy is bearing fruit, with an improvement in its portfolio balance and a strengthening of its position in areas such as Asia. However, with regard to the Champagne acquisitions, while we believe that the sector has longer term growth prospects and that these strong brands represent a good strategic fit in Allied's already diverse portfolio, the full price paid and our current outlook for the Champagne sector (i.e. charac- terised by a proliferation of brands, challenge of achieving product differentiation, pockets of stock overhang and export markets sensitive to economic fluctuations), may make it challenging for the company to achieve its targets. While the company to date appears to have been frustrated in its attempt to acquire Montana Group (N.Z.) Limited, the conclusion of a such an acquisition/partner- ship in the relatively high growth wine sector may remain attractive, if Allied can achieve sufficient economies of scale and also leverage its existing distribution capability. • Allied's management remains highly committed to improving business efficiency and we expect further modest improvements over time: Allied has engaged in a considerable streamlining of its operations with the disposal of the UK Retail assets, John Bull pubs and Panrico. The company has recently generated cost savings of GBP15 million from the closure of its Portland Place offices and is expected to achieve further savings of GBP7 million this year from sales force integration, regional office cost savings and the outsourcing of some non-core activities. Further attempts to raise productivity are expected to continue to focus on improving production and supply chain efficiencies. We believe that Allied has successfully implemented the majority of its cost reduction programme, and while the company is expected to remain highly focused on productivity and efficiency, we sense a notable shift in emphasis towards growth of the business. The streamlining of the group is a positive fac- tor overall and has enabled the company to become considerably more focused on the expansion of its core business in recent months. While Allied has retained its 25% interest in Britannia Soft Drinks, we expect it to continue to review its options to dispose of this holding. In addition, although Allied views the QSR operations as a core business, offering good growth prospects, in view of the lack of synergies with the main spirits business we see potential for Allied to divest or spin-off this business at an appropriate time over the longer term.

2 Feb. 2000 Allied Domecq purchased a 70% stake in a joint venture with Jinro Ltd., Korea's largest spirit distributor, for GBP103 million. Nov. 2000 Allied secured the exclusive right to distribute Stolichnaya Vodka in the USA from January 1, 2001. In Dec. 2000 Allied agreed to acquire the Mumm and Perrier-Jouet champagne businesses for a total consideration of Euro575 million.

4 Moody’s Analysis • Strategy for Quick Service Restaurant (QSR) operations (13% group operating profits): Allied's remaining retail operations comprise Dunkin' Donuts (4,900 coffee/baked goods stores worldwide), Baskin-Robbins (world's largest ice cream franchise with 4,500 outlets) and Togo's (240 sandwich stores on US West Coast). During 2000 trading profit rose by 14% to GBP64 million, helped by a GBP8 mil- lion improvement from restructuring and the withdrawal from unprofitable international businesses. The emphasis is expected to remain on the US where Allied aims to achieve growth and margin improvement by continuing to combine two, and sometimes three brands under one roof, updating store concept development, further product innovation and the reduction of overhead costs. Allied has successfully raised margins in this business and the franchise operations, which continue to gen- erate cash with little use of capital, provide a degree of business diversity to the company's operations. In our view, growth across this sector has been driven in part by lifestyle and demo- graphic changes in recent years. However, it has also been traditionally sensitive to overall eco- nomic trends given the discretionary nature of the expenditure and as a result the QSR opera- tions may be somewhat susceptible to a slowdown in the US (although some consumers may 'downtrade' from restaurants to quick service outlets in a recessionary environment). Spirits & Wine Competitive Position And Market Outlook Allied's Global Position: Allied Domecq is a major player in the global spirits business, with a strong portfolio of premium brands. It currently ranks as the world's second largest spirits group in terms of millions of cases sold and the third largest by number and volume of top 100 premium brands. Allied currently owns 11 of the top 100 premium brands, accounting for an approximate 10.4% top 100 world market share by volume (including the acquired Seagram brands Diageo now owns 17 top 100 brands representing an approximate 24.7% market share by volume, and Pernod-Ricard now owns 12 top 100 brands with a 10.5% market share by volume). Company [Based On Continuing Operations] Spirits & Wine Trading profit* Trading Moody's Sales (GBPm) (GBPm) Margin (%) Rating S&W (Allied Domecq) 2,297 414 18.0% A3 UDV (Diageo)** 4,971 1,002 20.2% A1 Pernod-Ricard** 1,073 184 17.2% Not rated * pre goodwill amortisation and exceptional items ** pre-acquisition of Seagram's spirits business Source: Allied Domecq's Aug. 2000 annual report; Diageo's June 2000 annual report; Pernod-Ricard Dec. 2000 results (Eur 1=£0.61)

Although Allied Domecq has demonstrated its ability to raise net brand contribution from its leading products, we expect it to become increasingly difficult to raise volumes in mature markets. During 1999 Allied's spirits portfolio benefited from having 3 brands ranking among the world's top 15 growth brands (Sauza ranked as the top growth brand, Kahlua ranked 5th and Courvoisier at 13th). However, during 2000 non of these three brands ranked in the top 15, with Sauza recording the largest volume drop due to the worldwide shortage of blue agave, the key ingredient of tequila. Allied has focused on addressing the impact of the agave shortage by implementing price increases, concentrating on enhancing the more profitable mix of Sauza in all markets and by investing in substantial plantings of the agave cactus. In addition, Kahlua's rate of growth slowed markedly, although it remains probably Allied's most successful growth brand in recent years having risen from 33rd place in 1990 to 17th in 2000. While Allied has had some success with regards to product innovation it is likely to prove challenging for the company to develop and launch new products to match the success of some of the more recent 'ready to drink' product launches such as Diageo's Smirnoff Ice and the Bacardi Breezer. The issue of Allied's potential option to acquire Captain Morgan rum currently remains unresolved, with both Allied Domecq and Diageo interested in obtaining the brand. Captain Morgan is now the world's 14th largest premium spirits brand (placed 70th in 1990) and was the fastest growing premium brand in 2000. While the acquisition of Captain Morgan, if concluded by Allied Domecq, would add considerable value to its portfolio, such an acquisition may potentially have rating implications for the company, depending on the price paid and how such an acquisition would be financed.

Moody’s Analysis 5 The Seagram Spirits Auction And Moody's View Of The Implications For Allied By withdrawing from the Seagram spirits auction Allied Domecq effectively passed on a one-off opportu- nity to significantly raise its volumes in the US, Europe and Asia. Seagram's spirits business would have guaranteed access to some strong growth brands (e.g. Crown Royal, Captain Morgan and Montilla), resulted in the expansion of its Latin American distribution and also provided reasonably good potential cost synergies. However, in Moody's opinion the Allied Domecq management made a rational deci- sion to exit the auction process, to the extent that many potentially negative aspects of the pro- posed transaction may have largely mitigated many of the benefits. The sheer size of the transaction and the full price, would have undoubtedly placed considerable pressure on Allied's financial profile (assuming a largely debt financed transaction); the deal would have presented considerable integration risks; Seagram's portfolio would have overlapped to some degree with Allied's own portfolio and finally its vast array of brands would have probably resulted in a protracted auction process. In spite of these issues the fact remains that the Seagram auction has transformed the global spirits landscape and not only strengthened Diageo's already leading position within the market, but may also result in Pernod-Ricard emerging as a formidable competitor over the longer term, despite some short term integration challenges. By increasing their product ranges and achieving considerably greater vol- umes, both Diageo and Pernod-Ricard will have greater flexibility to offer volume discounts, and are also likely to improve the fixed cost to volume ratios for their distribution networks over time. The Global Market Outlook In recent years worldwide volumes of the top premium spirits brands have been relatively stag- nant, with global volumes on average increasing at less than 0.5% per annum. Moody's anticipates continued pricing pressures in the spirits sector globally over the longer term and it will remain challeng- ing for companies to achieve price increases above the rate of inflation. Premium spirits consumption is likely to remain flat or even decline marginally in mature markets over the long term, due to a combina- tion of health concerns, social trends, legislative pressures and a willingness by consumers to trade down in times of economic weakening. Over three quarters of Allied's spirits and wines trading profit is derived from the largest and traditionally the most profitable markets for wines and spirits, North America and Western Europe. While Allied has successfully expanded into parts of Asia (e.g. Jinro joint venture) we expect that the company may pursue further expansion in some of the emerging markets which provide greater long- term growth opportunities. The spirits markets of Asia-Pacific, China, India, Latin America, Eastern Europe and Russia are approximately of similar size to the traditional spirits markets and should represent considerable longer term growth potential for the major players including Allied Domecq. However, while expansion into emerging markets may help drive growth, it will also increase the volatility of profits and cash flow. The long term growth potential of these markets will help to mitigate the short term volatility, provided that spirits companies expanding into such markets ensure that they keep an adequate cushion so that key ratios do not fall below acceptable levels for the rating category. Allied's overall top-100 Premium Distilled Spirits brand portfolio (excludes non-premium brands and low-strength spirits) is shown below:

2000 Rank in 2000 Shipments % Change in Brand Category Top 100 (1999 rank) (mil. Cases)* Shipments Ballantine's Scotch Whisky 9 (10) 5.5 5.8% Kahlua Liqueur 17 (18) 3.5 2.9% Presidente Brandy 19 (17) 3.4 0.0% Canadian Club Canadian Whisky 33 (34) 2.3 -4.3% Whisky DYC Spanish Whisky 34 (38) 2.2 0.0% Beefeater Gin 35 (39) 2.2 0.0% Sauza Tequila 41 (24) 2.1 -28.3% Don Pedro Brandy 46 (48) 1.9 0.0% Teacher's Scotch Whisky 58 (59) 1.5 -3.2% HW Cordials Liqueur 83 (86) 1.1 0.0% Courvoisier Cognac 87 (82) 1.1 -8.7% Allied's Total Brands in Top 100 26.7 -2.5% Source: Impact Database *2000 figures are estimates

6 Moody’s Analysis Financial Analysis Sales And Profitability We expect future sales growth to be driven partly by volume, price and mix improvements in rela- tion to key brands, in addition to Allied's highly selective but increasingly dynamic acquisition strategy. In recent years Allied has steadily raised operating margins and we predict gradual con- tinued improvement over the intermediate term, although additional operating efficiencies will become increasingly difficult to extract. Fluctuations in underlying sales are likely to be less pro- nounced in future, Allied having exited the UK retail business that was much more susceptible to swings in the domestic economy. Key Indicators (GBP millions) [Continuing Operations Only] Year ended Aug. 31 2000 1999 Sales 2,602 2,408 Turnover growth 8.1% 0.4% Trading profit* 487 430 Trading profit margin 18.7% 17.9% * pre exceptionals and goodwill amortisation In the face of mature and increasingly competitive markets for its products, in addition to pricing pres- sures, achieving top line growth will remain a challenge for Allied Domecq. However, during 2000 the group successfully raised underlying Spirits & Wine turnover by approximately 7% (excluding the positive impact of Jinro), primarily by focusing on the volume growth of its core brands in key markets, in addition to achieving modest price and mix improvements. We expect that organic sales growth will largely be driven by continued investment in higher margin premium products, particularly the core 4 brands. Because these rep- resent a disproportionately large percentage of total sales and net brand contribution, they will help to drive top line growth, even if volumes at the lower margin portfolio tail-end are flat or decline marginally. In 2000 acquisition-driven top line growth will increase as a result of a full year of Jinro contribution, plus additional sales resulting from the Stolichnaya distribution agreement and the Champagne acquisitions. Cash Flow Allied's debt protection measurements were impacted initially by the demerger of the UK retail operations, all the proceeds of which were returned to shareholders. However, during the last year the company demonstrated to Moody's an ability to either meet or exceed the majority of its post demerger financial projections. As projected, the company has managed to ensure that its EBIT net interest coverage has reverted to within the lower end of its 6-8x target range.3 We expect cash flow retention to remain strong, helped by the company raising its dividend coverage target level to 2.5x, and also due to the fact that by exiting the capital intensive pub business the compa- ny's capital expenditure requirements will reduce sharply in future. As previously highlighted, consumer product companies, such as Allied Domecq, need to continue to invest significantly in marketing in order to maintain brand equity, although the company's steadily improving margins would tend to indicate the positive benefits of this investment. Capital Structure And Liquidity While we expect underlying debt protection measurements to strengthen over the medium term the com- pany's increasingly dynamic growth strategy brings with it a rise in event risk. Allied Domecq's potential option to acquire Captain Morgan and/or any additional acquisitions equivalent in size to the champagne or proposed Montana deals, could place downward pressure on the company's ratings depending on sev- eral factors including the nature of any financing. Allied Domecq's leverage and capital structure was heavily impacted by the demerger of the UK retail businesses, although it should be noted that consider- able brand value is not reflected in book equity. While we expect net debt to increase during the current year, excluding the possibility of any addition- al sizeable debt financed acquisitions, in our opinion the company's net debt protection measurements are likely to improve gradually over the medium term. However, balance sheet leverage is already high and Allied's more aggressive expansion strategy could potentially result in a weakening of the financial profile which may result in downward pressure on the ratings, again depending on the nature of any financing.

3 Allied's calculation of EBIT net interest cover includes their share of profits of associated companies.

Moody’s Analysis 7 Allied Domecq PLC

(£ millions) 2000 1999 1998 1997 1996

Income Statistics Net sales 2,057 1,920 3,143 3,931 4,090 Operating income 456 420 686 690 632

Net income 317 76 275 402 43

% Sales

Cost of goods sold 72.3 75.6 74.8 79.5 81.7 Deprec. & amort. expense 2.5 2.6 3.4 2.9 2.8 Selling and admin. expense 2.9 0.0 0.0 0.0 0.0 Rent expense 2.8 2.3 2.2 1.7 1.9 R & D 0.0 0.1 0.1 0.1 0.1 Annual pension costs -0.5 0.2 0.3 0.0 0.4 Operating income 22.2 21.9 21.8 17.6 15.5 Interest expense 5.1 5.7 3.8 3.2 4.4 Other income/expense 2.1 -6.2 -4.2 0.5 -5.3 Pretax income 20.4 11.5 14.5 15.3 6.5 After tax inc. bef. equity earns. 15.4 4.0 8.7 10.2 1.1 Net income 15.4 4.0 8.7 10.2 1.1

Tax rate (%) 22.2 62.9 35.2 28.2 65.9 Dividend payout(% income) 1.3 426.3 129.5 62.2 516.3 Dividend payout(% gross cash flow) 0.9 925.7 77.1 54.1 43.1

Coverage Analysis (x)

Interest coverage 4.6 4.0 5.8 5.6 3.6 Interest & 100% rent 3.3 3.1 4.1 4.0 2.9 Interest & 1/3 rent 4.0 3.7 5.1 4.9 3.3 Total coverage 4.0 3.7 5.1 4.9 3.3

Asset Efficiency Average asset turnover (x) 0.53 0.39 0.62 0.74 0.69 Adjusted average asset turnover (x) 0.52 0.38 0.60 0.72 0.66 FIFO inventory turnover (x) 1.63 1.66 2.51 2.98 2.87 Days receivable 102.47 113.44 70.73 58.52 68.39 Days payable 174.07 212.13 158.03 127.21 124.06 FIFO working investment/sales (x) 0.38 0.33 0.17 0.15 0.19

Returns On Assets & Capitalization (%) EBIT to average assets 13.5 6.6 11.3 13.8 7.5 Adj. EBIT to adj. average assets 13.6 6.8 11.0 13.2 6.8 EBIT to avg. capitalization 18.8 8.8 15.8 19.4 10.6 Adj. EBIT to adj. avg. capitalization 16.7 8.1 13.8 16.6 8.6 Unleveraged return on avg. capitalization 14.2 4.1 10.2 13.7 4.9 Return on avg. common equity 25.7 3.5 13.3 18.9 1.9

Average cost of debt 7.1 7.1 8.3 8.6 10.5

8 Moody’s Analysis Allied Domecq PLC

(£ millions) 2000 1999 1998 1997 1996

Cash Flow/Investment Analysis Operating Activities

Income from operations 317 76 275 402 43 Depreciation & amort. 54 49 112 114 154 Other 54 -247 75 -54 318 Other non-cash adjustment 0 157 0 0 0

Gross cash flow 425 35 462 462 515

Common dividends -4 -324 -356 -250 -222 Retained cash flow 421 -289 106 212 293

Changes in working capital -101 -20 -62 -37 30 Net cash flow from operations 324 15 400 425 545

Investment Activities

Gross capital expend. -87 -75 -221 -220 -277 Less disposals 115 24 74 105 69 Net capital expend. 28 -51 -147 -115 -208

Net acquisitions -217 376 -226 -38 216 Net securities 0 0 0 16 2 Other investing activities -39 0 2 -2 23

Net cash from investing activities -228 325 -371 -139 33

Financing Activities

Change in total debt -68 -318 152 -94 -232 Total equity 0 101 25 4 13 Total dividends -4 -324 -356 -250 -222

Net financing -72 -541 -179 -340 -441

Net inc(dec) in cash equivalent 24 -201 -150 -54 137

Ratios Gross CAPEX/deprec. (x) 1.7 1.5 2.1 1.9 2.4 Accum. deprec./deprec. exp. (x) 9.5 13.7 6.7 8.1 8.0

Gross cash flow % gross CAPEX 488.5 46.7 209.0 210.0 185.9 Gross cash flow % net CAPEX -1,517.9 68.6 314.3 401.7 247.6 Ret. cash flow % gross CAPEX 483.9 -385.3 48.0 96.4 105.8 Ret. cash flow % net CAPEX -1,503.6 -566.7 72.1 184.3 140.9

Gross cash flow % total debt 31.2 2.3 30.4 33.6 32.7 Ret. cash flow % total debt 30.9 -18.6 7.0 15.4 18.6 Ret. cash flow % liq. adj. total debt 24.6 -17.3 5.4 12.6 15.6

Moody’s Analysis 9 Allied Domecq PLC

(£ millions) 2000 1999 1998 1997 1996

Balance Sheet Statistics Nominal Capitalization Total debt 1,364 1,551 1,518 1,374 1,573 Minority interest 66 26 39 136 128 Deferred taxes 52 35 38 19 4 Preferred stock at liq. value — 0999 Common & surplus 183 2,273 2,019 2,127 2,134 Cum. trans. adj. -7 ———— Total capitalization 1,672 3,885 3,623 3,665 3,848 % Capitalization Total debt 81.6 39.9 41.9 37.5 40.9 Minority interest 3.9 0.7 1.1 3.7 3.3 Deferred taxes 3.1 0.9 1.0 0.5 0.1 Preferred stock at liq. value ——0.2 0.2 0.2 Common & surplus 10.9 58.5 55.7 58.0 55.5 Cum. trans. adj. -0.4 ———— Adjusted Capitalization Total adjusted debt 1,820 1,903 2,070 1,918 2,189 Minority interest 66 26 39 136 128 Deferred taxes & 50% LIFO res. 52 35 38 19 4 Preferred stock at liq. value — 0999 Common & surplus & 50% LIFO res. 183 2,273 2,019 2,127 2,134 Cum. trans. adj. -7 ———— Total adjusted capitalization 2,128 4,237 4,175 4,209 4,464 % Adjusted capitalization Total adjusted debt 85.5 44.9 49.6 45.6 49.0 Minority interest 3.1 0.6 0.9 3.2 2.9 Deferred taxes & 50% LIFO res. 2.4 0.8 0.9 0.5 0.1 Preferred stock at liq. value — 0.0 0.2 0.2 0.2 Common & surplus & 50% LIFO res. 8.6 53.6 48.4 50.5 47.8 Cum. trans. adj. -0.3 ————

Adjusted Debt Analysis Total short term debt 558 771 660 309 483 Senior debt 806 904 1,012 873 993 Subordinated debt ——197 196 196 Rents capitalized (8x) 456 352 552 544 616 Total adjusted debt 1,820 1,903 2,070 1,918 2,189 % Adjusted debt Total short term debt 30.7 40.5 31.9 16.1 22.1 Senior debt 44.3 47.5 48.9 45.5 45.4 Subordinated debt ——9.5 10.2 9.0 Rents capitalized (8x) 25.1 18.5 26.7 28.4 28.1

Other Leverage Ratios Pension adj. TD % capzn. 85.5 44.9 49.6 45.6 49.0 Debt adj. dbl. lev. TD % adj. capzn. 85.5 44.9 49.8 45.8 49.2 Eqty. adj. dbl. lev. TD % adj. capzn. 88.7 47.9 53.1 47.2 50.8 Interest sensitive debt % adj. capzn. 29.4 18.2 15.8 7.3 10.8 Liquidity adjusted debt % adj. capzn. 84.7 41.7 48.1 42.4 45.3 Common equity % adj. total assets 6.0 42.5 36.5 37.2 35.3 Tot. liab./adjusted net worth (x) 7.9 1.1 1.4 1.3 1.4 Asset leverage index (x) 5.1 1.1 1.3 1.2 1.2

10 Moody’s Analysis

A Analysis Allied Domecq PLC Distillers/Brewers Report Number: 66183 USA. the in free Outside theUS,pleasecall1.212.553.1658. toll 800.811.6980 call please minimum), copies (100 report this of reprints order To