Fourth Quarter 2016 Highlights - Pro
Forma(1)(2)
- Worldwide beer volume: 22.1
million hectoliters, increased 1.2%; Coors Light volume decreased
1.9% worldwide
- Net sales: $2.468 billion,
decreased 4.2% on a reported basis, and decreased 2.2% in constant
currency
- Net sales per HL: $105.75,
decreased 2.8% on a reported basis, and decreased 0.8% in constant
currency
- U.S. GAAP net loss from
continuing operations attributable to MCBC: Loss of $608.1 million
($(2.83) per diluted share) compared to net income of $6.7 million
a year ago
- Underlying after-tax income:
$98.7 million ($0.46 per diluted share), increased 16.4%
- Underlying EBITDA (earnings
before interest, taxes, depreciation and amortization): $405.1
million, increased 4.6%
Full Year 2016 Highlights - Pro
Forma(1)(2)
- Worldwide beer volume: 95.2
million hectoliters, decreased 0.8%; Coors Light volume decreased
0.2% worldwide
- Net sales: $10.983 billion,
decreased 2.3% on a reported basis, and decreased 0.6% in constant
currency
- Net sales per HL: $107.75,
decreased 0.3% on a reported basis, and increased 1.4% in constant
currency
- U.S. GAAP net income from
continuing operations attributable to MCBC: $277.5 million ($1.28
per diluted share), decreased 48.9%
- Underlying after-tax income:
$936.0 million ($4.33 per diluted share), increased 1.9%
- Underlying EBITDA (earnings
before interest, taxes, depreciation and amortization): $2.383
billion, increased 2.6%
Molson Coors Brewing Company (NYSE: TAP; TSX: TPX) today
reported a U.S. GAAP net loss from continuing operations
attributable to MCBC of $608.1 million on a pro forma basis for the
fourth quarter, down from $6.7 million of net income a year ago.
This decrease was driven by an impairment charge recorded for the
Molson brands in Canada, higher U.S. GAAP tax expense, and an
indirect tax provision recorded in Europe. The Company also
reported a 16.4 percent increase in underlying after-tax income on
a pro forma basis for the fourth quarter of 2016, driven by higher
income in the U.S. and improved performance in International,
partially offset by the indirect tax provision in Europe.
Molson Coors president and chief executive officer Mark Hunter
said, "The biggest news for 2016 was completing our acquisition of
the remaining 58 percent of MillerCoors and the Miller global brand
portfolio for $12 billion, representing the largest transaction in
the Company’s history, which made Molson Coors the third-largest
global brewer. We also retained the rights to all of the brands
that were in the MillerCoors portfolio in the U.S. and Puerto Rico.
The transaction was completed at a 9.2-times effective purchase
multiple, including the present value of cash tax benefits.
Additionally, we will be driving substantial cost synergies in the
next three years, and we continue to expect this transaction to be
significantly accretive to underlying earnings in the first full
year of operations. With the completion of the transaction and the
changes we are making to align and enhance our organization, the
building blocks are in place for our company to drive top-line
growth, profit, cash generation, debt pay-down, and total
shareholder returns in the years ahead. Led by our First Choice for
Consumers and Customers agenda, these building blocks are grouped
into four areas: First, our organization and brands are all under
one roof for the first time. Second, our consumer excellence
approach with our global brand portfolio of Coors, Miller and
Staropramen, supported by our national champion, craft and
specialty brands, now gives a platform for accelerating performance
outside of our core developed markets over time. Third, our
customer excellence approach, where we are investing in sales
capability and execution improvement. And lastly, our focus on
talent development, diversity and inclusion is laser-focused on
enabling our First Choice agenda and leadership capability across
the enterprise."
Mark added, "The completion of the MillerCoors transaction
represents a step forward in the size and strength of our business,
and this will drive some significant changes in our financial
numbers in the near term as we align and enhance our financial
reporting. In order to provide more comparable financial
information, unless otherwise indicated, all fourth quarter and
full year 2016 consolidated and U.S. results in this release will
be presented on a pro-forma basis, as if the MillerCoors
transaction and its financing had been completed at the beginning
of 2015. Canada, Europe, International and Corporate results will
not be presented on a pro forma basis."
Operating and Underlying Free Cash
Flow
U.S. GAAP actual net cash provided by operating
activities for the year was $1,126.9 million, which represents
an increase of $411.0 million from prior year, driven by
incremental operating cash flow from MillerCoors post-transaction
and lower pension contributions, slightly offset by higher cash
paid for income taxes and interest.
Underlying actual free cash flow for the year totaled
$863.7 million. This represents an increase of $139.9 million from
the prior year, driven by the addition of the other 58 percent of
MillerCoors cash flows post-transaction, as well as strong working
capital performance, including lower underlying cash tax payments
versus 2015.
Underlying EBITDA - Pro
Forma
Underlying pro forma EBITDA was $405.1 million for the
fourth quarter, a 4.6% increase from a year ago. On a full year
basis, underlying pro forma EBITDA was $2.383 billion, a
2.6% increase from a year ago.
Foreign Exchange
The Company’s consolidated pro forma underlying pretax income
for the fourth quarter includes the negative effect of foreign
currency movements totaling $7.3 million. Negative currency impacts
of $9.5 million in Corporate and $0.2 million in International were
partially offset by positive currency impacts of $0.5 million in
Canada and $1.9 million in Europe.
Worldwide beer volume - Pro
Forma
Worldwide beer volume of 22.1 million hectoliters in the
fourth quarter increased 1.2 percent versus the prior year. On a
full year basis, worldwide beer volume of 95.2 million
hectoliters decreased 0.8 percent versus the prior year.
Financial volume now includes contract brewing and wholesaler
non-owned brand volumes. The financial impact of these volumes has
always been included in our results, and now we are also including
the volume impact of these sales. In contrast, worldwide volume
continues to exclude contract brewing and wholesaler non-owned
brand volumes, and it now includes 100 percent of MillerCoors brand
volumes. Prior periods presented have been revised to reflect these
changes.
Effective Income Tax Rates - Pro
Forma
The Company’s fourth quarter pro forma effective income tax rate
was negative 45.8 percent on a reported basis and positive 14.5
percent on an underlying basis. On a full year basis, the Company's
pro forma effective income tax rate was positive 61.6 percent on a
reported basis and positive 25.5 percent on an underlying basis.
The fourth quarter effective tax rate on a reported basis
was negative due to the impact of pretax loss related to the Canada
brand impairment and change in brand life from indefinite to
definite lived assets. The impairment resulted in a tax benefit
related to the impairment, which was more than offset by tax
expense related to the change in brand life. The fourth quarter
underlying effective tax rate was significantly lower than
prior year primarily due to higher valuation allowance releases and
tax-rate reductions versus prior year. The full year underlying
effective tax rate was higher than prior year primarily due to
higher mix of income from the U.S.
Debt
Total debt at the end of the fourth quarter was $12.073
billion, and cash and cash equivalents totaled $560.9 million,
resulting in net debt of $11.512 billion. Total debt reflects
transaction-related debt and approximately $200 million of debt
pay-down near the end of the year.
Business Segment Results
The following are the Company’s fourth quarter and, as
indicated, full year 2016 results by business segment:
United States Business (MillerCoors) -
Pro Forma
MillerCoors domestic sales-to-retailers volume (STRs) declined
2.5 percent for the year and 2.8 percent for the
trading-day-adjusted quarter, driven by lower volume in the Below
Premium and Premium Light segments. Domestic sales-to-wholesalers
volume (STWs) decreased 1.3 percent for the year and 0.9 percent
for the quarter. Domestic net revenue per hectoliter, which
excludes contract brewing and company-owned-distributor sales, grew
1.3 percent for the year as a result of favorable net pricing and
positive sales mix. Domestic net revenue per hectoliter increased
0.9 percent for the quarter due to favorable net pricing.
Cost of goods sold (COGS) per hectoliter decreased 2.5 percent
for the year and 2.8 percent for the quarter, driven by supply
chain cost savings and lower commodity costs, partially offset by
lower fixed-cost absorption due to lower volumes. Marketing,
general and administrative (MG&A) expense decreased 0.5 percent
in the full year, due to lower marketing spending, offset by
information technology investments. MG&A in the fourth quarter
decreased 5.4 percent, driven by the quarterly timing of brand
investments and lower employee-related expenses.
On a pro forma U.S. GAAP basis, MillerCoors income from
continuing operations before income tax was $1.287 billion for
2016 and $207.8 million for the fourth quarter. The 16.9 percent
increase for the year was driven by lower COGS, net pricing growth,
and positive sales mix, partially offset by lower volume. The 200.7
percent increase for the quarter was primarily due to lower special
charges, lower COGS, net pricing growth and decreased marketing
investment versus the same period in the prior year.
MillerCoors pro forma underlying pretax income for 2016
was $1.378 billion, 13.8 percent higher than the prior year, driven
by lower COGS, net pricing growth and positive sales mix, partially
offset by lower volume. Fourth quarter underlying pretax income
increased 42.0 percent to $214.7 million versus the same period in
the prior year, driven by lower COGS, net pricing growth and lower
marketing expense, partially offset by lower volume.
Canada Business
Canada STR volume decreased 3.5 percent in the fourth quarter,
driven by lower consumer demand, particularly in Quebec. Canada
financial volume, which includes contract brewing volume, decreased
4.3 percent. Net sales per hectoliter increased 0.6 percent in
local currency, due primarily to positive pricing and brand mix,
partially offset by mix shift toward lower-revenue packages and
contract brewing volume.
COGS per hectoliter decreased 5.9 percent in local currency due
to cost savings and lower pension and distribution costs, partially
offset by the impact of volume deleverage, inflation, mix shift to
higher-cost brands, and foreign currency movements. MG&A
expense increased 11.5 percent in local currency, driven by higher
brand amortization expense related to the reclassification of
certain Canada brands to definite-lived intangible assets,
partially offset by lower incentive compensation.
Canada reported a loss from continuing operations before
income taxes of $460.9 million, compared to income of $48.5 million
in the prior year, primarily driven by non-cash brand impairment
charges of $495.2 million.
Canada underlying pretax income decreased 6.4 percent to
$48.5 million in the quarter, primarily due to incremental brand
amortization expense of $10.9 million and lower volume, partially
offset by cost savings and positive pricing. Foreign currency
movements positively affected earnings by $0.5 million.
Europe Business
Europe owned, licensed and royalty sales volume increased 2.5
percent in the fourth quarter versus a year ago. Europe financial
volume, which includes contract brewing and factored brands,
increased 0.3 percent. Europe net sales per hectoliter decreased
9.8 percent in local currency, due to an approximate $50 million
indirect tax provision established in the quarter related to an
ongoing legal dispute. The decrease was partially offset by
positive net pricing.
COGS per hectoliter increased 0.4 percent in local currency,
driven by mix shift to higher-cost brands and geographies, along
with lower net pension benefit. MG&A expense increased 7.3
percent in local currency, due to higher brand investments.
Europe reported a loss from continuing operations before
income taxes of $18.3 million compared to profit of $28.6 million
in the prior year, primarily driven by the indirect tax
provision.
Europe underlying pretax results decreased from income of
$36.2 million a year ago to a loss of $14.5 million in the quarter,
due to the indirect tax provision and lower net pension benefit,
partially offset by higher volumes and positive net pricing.
Underlying results benefited from $1.9 million of foreign currency
movements.
International Business
Total International owned and royalty sales volume increased
82.5 percent in the fourth quarter, driven by the addition of the
Miller global brands, along with Coors Light growth in Latin
America and Australia. Net sales per hectoliter increased 11.1
percent, driven by higher pricing, favorable sales mix changes and
foreign currency movements.
COGS per hectoliter increased 11.6 percent, due to sales mix
changes and foreign currency movements. International MG&A
expense increased 19.8 percent, driven by increased brand
investments, primarily from the addition of the Miller brands.
The International segment reported a loss from continuing
operations before income taxes of $1.3 million on a US GAAP basis
and an underlying pretax loss of $1.0 million in the fourth
quarter, versus a loss of $5.1 million for both measures a year
ago, driven by the addition of the Miller brands, volume growth and
positive pricing in Latin America and Australia, cost savings in
MG&A, and cycling the substantial restructure of our China
business in 2015. This was partially offset by the impact of total
alcohol prohibition in Bihar and the transfer of the Staropramen
U.K. business to our Europe segment. Foreign currency movements
negatively impacted underlying pretax results by $0.2 million in
the fourth quarter.
Corporate
Corporate pretax loss on a reported basis was $164.4
million in the fourth quarter versus $76.0 million in the prior
year, primarily due to higher interest and other costs related to
the MillerCoors acquisition.
Underlying Corporate pretax loss totaled $121.6 million
for the fourth quarter versus a $57.2 million loss in the prior
year, driven primarily by higher interest expense, as well as
global commercial investments.
Special and Other Non-Core Items - Pro
Forma(3)
The following special and other non-core items have been
excluded from underlying pro forma results.
During the quarter, Molson Coors recognized a net special
charge of $521.1 million, primarily driven by $495.2 million of
impairment charges recorded for the Molson brands in Canada. In
conjunction with the impairment evaluation, we also reclassified
these brands to be definite-lived intangible assets to be amortized
over useful lives ranging from 30 to 50 years, which will increase
future amortization expense by $40.7 million per annum, based on
current foreign exchange rates.
Additionally, during the quarter we recorded net other
non-core charges of $12.6 million incurred primarily in
connection with post-acquisition integration costs, partially
offset by a gain from the sale of a non-core operating asset.
Incremental amortization (net of tax) resulting from the
acquisition is $37.5 million for the full year 2016 on a pro forma
basis. Estimated cash tax benefits resulting from the
acquisition are expected to average more than $275 million annually
for the next 15 years following the close of the transaction.
2016 Fourth Quarter and Full Year
Conference Call
Molson Coors Brewing Company will conduct an earnings conference
call with financial analysts and investors at 11:00 a.m. Eastern
Time today to discuss the Company’s 2016 fourth quarter and full
year results. The Company will provide a live webcast of the
earnings call.
The Company will also host an online, real-time webcast of an
Investor Relations Follow-up Session with financial analysts and
institutional investors at 1:00 p.m. Eastern Time. Both webcasts
will be accessible via the Company’s website, www.molsoncoors.com.
Online replays of the webcasts will be available until 11:59 p.m.
Eastern Time on May 3, 2017. The Company will post this release and
related financial statements on its website today.
Upcoming Investor
Webcast
The Company will host an online, real-time webcast in March at
the following event:
Mark Hunter, Chief Executive Officer, and Tracey Joubert, Chief
Financial Officer, will present at the UBS Global Consumer and
Retail Conference in Boston on Wednesday, March 8, 2017, at 8:15
a.m. Eastern Time.
A live webcast of the investor event will be accessible via the
Molson Coors Brewing Company website, www.molsoncoors.com, on the Investors page. An
online replay of the presentation webcast will be available within
two hours after the presentations.
Footnotes:
(1) Our consolidated pro forma financial information, revised as
of February 14, 2017, has been updated from the version previously
provided on November 1, 2016, and the detailed analysis of this
updated information is available on our website. The changes from
the previously provided version reflect significant refinements to
purchase accounting, with primary changes due to non-cash
adjustments to depreciation and amortization, pension expense, and
the related tax impacts. Additionally, we have adjusted our
reported volumes to align our volume reporting policy.
We have presented consolidated and U.S. segment pro forma
information to enhance comparability of financial information
between periods. Canada, Europe, International and Corporate
results are not presented on a pro forma basis. The pro forma
financial information is based on the historical consolidated
financial statements of MCBC and MillerCoors, both prepared in
accordance with U.S. GAAP, and gives effect to the acquisition of
the remaining 58 percent interest of MillerCoors and the completed
financing as if they were completed on January 1, 2015. Pro forma
adjustments are based on items that are factually supportable, are
directly attributable to the Acquisition or the related completed
financing, and are expected to have a continuing impact on MCBC's
results of operations and/or financial position. Any nonrecurring
items directly attributable to the Acquisition or the related
completed financing are excluded in the pro forma statements of
operations. Pro forma information does not include adjustments for
costs related to integration activities following the completion of
the Acquisition, synergies or other cost savings that have been or
may be achieved by the combined businesses. The pro forma
information is unaudited, based on significant estimates and
continues to be subject to significant change throughout the
one-year post-acquisition measurement period, as we have referenced
in our previous disclosures. The pro forma information is presented
for illustrative purposes only and does not necessarily reflect the
results of operations of MCBC that actually would have resulted,
had the Acquisition occurred at the date indicated, nor does this
information project the results of operations of MCBC for any
future dates or periods.
(2) The Company calculates non-GAAP underlying pretax and
after-tax income, underlying effective tax rate, underlying EBITDA
and underlying free cash flow results by excluding special and
other non-core items from the nearest U.S. GAAP performance
measure, which is net income from continuing operations
attributable to MCBC for both underlying after-tax income and
underlying EBITDA and net cash provided by operating activities for
underlying free cash flow. In addition, constant-currency results
exclude the impact of foreign currency movements. For further
details regarding these adjustments, please see the section
“Special and Other Non-Core Items,” along with tables for
reconciliations to the nearest U.S. GAAP measures. Unless otherwise
indicated, all $ amounts are in U.S. Dollars, and all quarterly
comparative results are for the Company’s fourth quarter and full
year ended December 31, 2016, compared to the fourth quarter and
full year ended December 31, 2015. Additionally, all per-hectoliter
calculations include contract brewing and non-owned factored
beverage volume in the denominator, as well as the financial impact
of these sales in the numerator, unless otherwise indicated. Some
numbers may not sum due to rounding.
(3) See tables 1 and 2 for the impact of special and other
non-core items.
Overview of Molson Coors
With a story that starts in 1774, Molson Coors has spent
centuries defining brewing greatness. As the third largest global
brewer, Molson Coors works to deliver extraordinary brands that
delight the world’s beer drinkers. From Coors Light, Miller Lite,
Carling, Staropramen and Sharp’s Doom Bar to Leinenkugel’s Summer
Shandy, Blue Moon Belgian White, Pilsner Urquell, Creemore Springs
Premium Lager and Smith & Forge Hard Cider, Molson Coors offers
a beer for every beer lover.
Molson Coors operates through Molson Coors Canada, MillerCoors,
Molson Coors Europe and Molson Coors International. The company is
not only committed to brewing extraordinary beers, but also running
a business focused on respect for its employees, communities and
drinkers, which means corporate responsibility and accountability
right from the start. It has been listed on the Dow Jones
Sustainability World Index for the past five years. To learn more
about Molson Coors Brewing Company, visit molsoncoors.com,
ourbeerprint.com or on Twitter through @MolsonCoors.
About Molson Coors Canada
Inc.
Molson Coors Canada Inc. (MCCI) is a subsidiary of Molson Coors
Brewing Company. MCCI Class A and Class B exchangeable
shares offer substantially the same economic and voting rights as
the respective classes of common shares of MCBC, as described in
MCBC’s annual proxy statement and Form 10-K filings with the U.S.
Securities and Exchange Commission. The trustee holder of the
special Class A voting stock and the special Class B
voting stock has the right to cast a number of votes equal to the
number of then outstanding Class A exchangeable shares and
Class B exchangeable shares, respectively.
Forward-Looking
Statements
This press release includes estimates or projections that
constitute “forward-looking statements” within the meaning of the
U.S. federal securities laws. Generally, the words “believe,”
“expect,” “intend,” “anticipate,” “project,” “will,” and similar
expressions identify forward-looking statements, which generally
are not historic in nature. Although the Company believes that the
assumptions upon which its forward-looking statements are based are
reasonable, it can give no assurance that these assumptions will
prove to be correct. Important factors that could cause actual
results to differ materially from the Company’s historical
experience, and present projections and expectations are disclosed
in the Company’s filings with the Securities and Exchange
Commission (“SEC”). These factors include, among others, our
ability to successfully integrate the acquisition of MillerCoors;
our ability to achieve expected tax benefits, accretion and cost
savings and synergies; impact of increased competition resulting
from further consolidation of brewers, competitive pricing and
product pressures; health of the beer industry and our brands in
our markets; economic conditions in our markets; additional
impairment charges; our ability to maintain
manufacturer/distribution agreements; changes in our supply chain
system; availability or increase in the cost of packaging
materials; success of our joint ventures; risks relating to
operations in developing and emerging markets; changes in legal and
regulatory requirements, including the regulation of distribution
systems; fluctuations in foreign currency exchange rates; increase
in the cost of commodities used in the business; the impact of
climate change and the availability and quality of water; loss or
closure of a major brewery or other key facility; our ability to
implement our strategic initiatives, including executing and
realizing cost savings; our ability to successfully integrate newly
acquired businesses; pension plan and other post retirement benefit
costs; failure to comply with debt covenants or deterioration in
our credit rating; our ability to maintain good labor relations;
our ability to maintain brand image, reputation and product
quality; and other risks discussed in our filings with the SEC,
including our most recent Annual Report on Form 10-K. All
forward-looking statements in this press release are expressly
qualified by such cautionary statements and by reference to the
underlying assumptions. You should not place undue reliance on
forward-looking statements, which speak only as of the date they
are made. We do not undertake to update forward-looking statements,
whether as a result of new information, future events or
otherwise.
Use of Non-GAAP Measures
In addition to financial measures presented on the basis of
accounting principles generally accepted in the U.S.
("U.S. GAAP"), we also present pretax and after-tax
"underlying income," "underlying income per diluted share,"
"underlying effective tax rate," and "underlying free cash flow,"
which are non-GAAP measures and should be viewed as supplements to
(not substitutes for) our results of operations presented under
U.S. GAAP. We also present underlying earnings before
interest, taxes, depreciation, and amortization ("underlying
EBITDA") as a non-GAAP measure. Our management uses underlying
income, underlying income per diluted share, underlying EBITDA, and
underlying effective tax rate as measures of operating performance,
as well as underlying free cash flow in the measure of cash
generated from core operations, to assist in comparing performance
from period to period on a consistent basis; as a measure for
planning and forecasting overall expectations and for evaluating
actual results against such expectations; in communications with
the board of directors, stockholders, analysts and investors
concerning our financial performance; as useful comparisons to the
performance of our competitors; and as metrics of certain
management incentive compensation calculations. We believe that
underlying income, underlying income per diluted share, underlying
EBITDA, and underlying effective tax rate performance are used by,
and are useful to, investors and other users of our financial
statements in evaluating our operating performance, as well as
underlying free cash flow in evaluating our generation of cash from
core operations, because they provide an additional tool to
evaluate our performance without regard to special and non-core
items, which can vary substantially from company to company
depending upon accounting methods and book value of assets and
capital structure. In addition to the reasons discussed above, we
consider underlying free cash flow an important measure of our
ability to generate cash, grow our business and enhance shareholder
value, driven by core operations and after adjusting for non-core
items. For discussion and analysis of our liquidity, see the
consolidated statements of cash flows and the Liquidity and Capital
Resources section of our Management’s Discussion and Analysis of
Financial Condition and Results of Operations in our latest Form
10-K and 10-Q filings with the SEC. We have provided
reconciliations of all non-GAAP measures to their nearest U.S. GAAP
measure and have consistently applied the adjustments within our
reconciliations in arriving at each non-GAAP measure. These
adjustments consist of special items from our U.S. GAAP financial
statements as well as other non-core items, such as acquisition and
integration related costs, unrealized mark-to-market gains and
losses, and gains and losses on sales of non-operating assets,
included in our U.S. GAAP results that warrant adjustment to arrive
at non-GAAP results. We consider these items to be necessary
adjustments for purposes of evaluating our ongoing business
performance and are often considered non-recurring. Such
adjustments are subjective and involve significant management
judgment.
MOLSON COORS BREWING COMPANY
Reconciliations
to Nearest U.S. GAAP Measure
Molson Coors Brewing Company and Subsidiaries
Table 1: Fourth Quarter Pro
Forma and Actual Underlying After-Tax Income
($ In millions, except per share data) (Unaudited)
Pro Forma(1)
Actual Three Months Ended Three Months Ended
December 31,2016
December 31,2015
December 31,2016
December 31,2015
U.S.
GAAP: Net income (loss) attributable to MCBC from
continuing operations
$ (608.1 ) $ 6.7 $
1,438.9 $ 33.4 Per diluted share $ (2.83 ) $
0.03 $ 6.65 $ 0.18 Add/(less): Special items, net(2) 521.1 93.0
(2,444.9 ) 10.9 42% of MillerCoors special items, net of tax(3) — —
0.4 34.4 Acquisition and integration related costs(4) 28.6 — 140.1
13.9 Unrealized mark-to-market (gains) and losses(5) (4.3 ) 4.9
(4.3 ) 4.9 Other non-core items(6) (11.7 ) — (11.7 ) — Tax effects
on special and non-GAAP items(7) 173.1 (19.8 ) 980.8
(6.9 )
Non-GAAP: Underlying after-tax
income
$ 98.7 $ 84.8 $
99.3 $ 90.6 Per diluted share
$ 0.46 $ 0.39
$ 0.46 $ 0.49 (1) We have
presented pro forma information to enhance comparability of
financial information between periods. The pro forma financial
information is based on the historical consolidated financial
statements of MCBC and MillerCoors, both prepared in accordance
with U.S. GAAP, and gives effect to the Acquisition and the
completed financing as if they were completed on January 1, 2015.
Pro forma adjustments are based on items that are factually
supportable, are directly attributable to the Acquisition or the
related completed financing, and are expected to have a continuing
impact on MCBC's results of operations and/or financial position.
Any nonrecurring items directly attributable to the Acquisition or
the related completed financing are excluded in the pro forma
statements of operations. Pro forma information does not include
adjustments for costs related to integration activities following
the completion of the Acquisition, cost savings or synergies that
have been or may be achieved by the combined businesses. The pro
forma information is unaudited, based on significant estimates and
continues to be subject to significant change throughout the
one-year post-acquisition measurement period, as we have referenced
in our previous disclosures. The pro forma information is presented
for illustrative purposes only and does not necessarily reflect the
results of operations of MCBC that actually would have resulted had
the Acquisition occurred at the date indicated, or project the
results of operations of MCBC for any future dates or periods.
(2) Special items, net on a pro forma basis primarily
include the intangible impairment charge related to the Molson core
brands asset recorded in the fourth quarter of 2016 as well as Eden
brewery closure charges recorded in the fourth quarter of 2015. See
note 3 below for further details. Special items for the three
months ended December 31, 2016, includes accelerated depreciation
expense of $3.1 million related to the planned closures of our
Vancouver brewery in Canada and Burton South brewery in the U.K.
Special items for the three months ended December 31, 2015,
includes accelerated depreciation expense of $3.6 million related
to the planned closure of the Burton South brewery in the U.K, the
closure of the Plovdiv brewery in Bulgaria, and the planned closure
of the Vancouver brewery. These accelerated depreciation charges
are included in our adjustments to arrive at underlying EBITDA in
table 3 below. Actual special items include net gain of
approximately $3.0 billion, net during the fourth quarter of 2016,
representing the excess of the approximate $6.1 billion estimated
fair value of our pre-existing 42% equity interest over its
transaction date carrying value of approximately $2.7 billion. This
net gain also includes the recognition of our accumulated other
comprehensive loss related to our previously held equity interest
of $458.3 million. Additionally, related to this revaluation gain,
we recorded deferred income tax expense and a corresponding
deferred tax liability of approximately $1.1 billion during the
fourth quarter of 2016. See Part II—Item 8 Financial Statements and
Supplementary Data, Note 7, "Special Items" of the Form 10-K for
detailed discussion of special items, on an actual basis.
(3) We recorded our 42% share of MillerCoors special charges on a
reported basis for the year ended December 31, 2016, and for the
pre-Acquisition period of October 1, 2016, through October 10,
2016, and during the fourth quarter 2015, MillerCoors recorded
special charges related to the closure of the Eden brewery,
including $39.5 million of accelerated depreciation in excess of
normal depreciation associated with the brewery. See note 2, for
pro forma impact. The tax effect related to our share of
MillerCoors special items in 2016 and 2015 was immaterial.
(4) On a pro forma basis, other non-core Acquisition related
charges primarily include integration and restructuring incurred in
the fourth quarter of 2016. On an actual basis, for the three
months ended December 31, 2016, we have recorded $82.0 million
within cost of goods sold for the estimated step-up in fair value
of inventory related to the Acquisition which was sold in the
fourth quarter of 2016, $56.7 million of transaction related costs
recorded within marketing, general & administrative expenses, a
gain related to FX on CAD proceeds received as part of the debt
offering related to the Acquisition of $2.5 million recorded within
other income (expense), and $3.8 million of financing costs related
to our term loan and interest income related to our fixed rate
deposit and money market accounts within interest income (expense)
net. These interest income (expense) items are included in our
adjustments to arrive at underlying EBITDA in table 3 below.
(5) The unrealized changes in fair value on our commodity swaps,
which are economic hedges, are recorded as cost of goods sold
within our Corporate business activities. As the exposure we are
managing is realized, we reclassify the gain or loss to the segment
in which the underlying exposure resides, allowing our segments to
realize the economic effects of the derivative without the
resulting unrealized mark-to-market volatility. The amounts
included for the three months ended December 31, 2016, and December
31, 2015, include the unrealized mark-to-market on these commodity
swaps. (6) A gain of $11.7 million was recognized in other
income (expense) during the three months ended December 31, 2016,
for the sale of a non-operating asset. (7) The effect of
taxes on the adjustments used to arrive at underlying income, a
non-GAAP measure, is calculated based on applying the underlying
effective tax rate to actual underlying earnings, excluding special
and non-core items. The effect of taxes on special and non-core
items is calculated based on the statutory tax rate applicable to
the item being adjusted for in the jurisdiction from which each
adjustment arises. Additionally, included in this line item is any
applicable flow through MCBC tax impacts of MillerCoors special
items.
Molson Coors Brewing Company and
Subsidiaries
Table 2: Full Year Pro Forma and
Actual Underlying After-Tax Income
($ In millions, except per share data) (Unaudited)
Pro Forma Actual
Twelve Months Ended Twelve Months Ended
December 31,2016
December 31,2015
December 31,2016
December 31,2015
U.S.
GAAP: Net income attributable to MCBC from continuing
operations
$ 277.5 $ 542.6 $ 1,978.7
$ 355.6 Per diluted share $ 1.28 $ 2.51 $ 9.27 $ 1.91
Add/(less): Special items, net(1) 526.7 456.8 (2,523.9 ) 346.7 42%
of MillerCoors special items, net of tax(2) — — 35.9 46.2
Acquisition and integration related costs(3) 28.6 — 326.0 13.9
Unrealized mark-to-market (gains) and losses(4) (23.1 ) 14.1 (23.1
) 14.1 Other non-core items(5) (20.5 ) — (20.5 ) — Tax effects on
special and non-GAAP items(6) 146.8 (95.3 ) 902.6
(76.1 )
Non-GAAP: Underlying after-tax
income
$ 936.0 $ 918.2 $
675.7 $ 700.4 Per diluted share
$ 4.33 $ 4.25
$ 3.17 $ 3.76 (1) Special
items, net on a pro forma basis primarily include the intangible
impairment charges related to the Molson core brands asset and
certain European brands recognized in the fourth quarter of 2016
and third quarter of 2015, respectively, as well as Eden brewery
closure charges. See note 2 below for further details. Special
items for the twelve months ended December 31, 2016, includes
accelerated depreciation expense of $12.4 million related to the
planned closures of our Vancouver brewery in Canada and Burton
South brewery in the U.K. Special items for the twelve months ended
December 31, 2015, includes accelerated depreciation expense of
$49.4 million related to the planned or completed closures of the
Burton South and Alton breweries in the U.K, the Plovdiv brewery in
Bulgaria, the Vancouver brewery, and the closures of bottling lines
within the Toronto and Vancouver breweries. These accelerated
depreciation charges are included in our adjustments to arrive at
underlying EBITDA in table 3 below. Actual special items include
net gain of approximately $3.0 billion, net during the fourth
quarter of 2016, representing the excess of the approximate $6.1
billion estimated fair value of our pre-existing 42% equity
interest over its transaction date carrying value of approximately
$2.7 billion. This net gain also includes the recognition of our
accumulated other comprehensive loss related to our previously held
equity interest of $458.3 million. Additionally, related to this
revaluation gain, we recorded deferred income tax expense and a
corresponding deferred tax liability of approximately $1.1 billion
during the fourth quarter of 2016. See Part II—Item 8 Financial
Statements and Supplementary Data, Note 7, "Special Items" of the
Form 10-K for detailed discussion of special items on an actual
basis. (2) MillerCoors special items for twelve months ended
December 31, 2016, include our proportionate share of accelerated
depreciation expense of $103.2 million related to the closure of
our Eden brewery on a reported basis which is included in our
adjustments to arrive at underlying EBITDA related to our
investment in MillerCoors in table 3 below on a pro forma basis.
See note 1, for pro forma details. Results for 2015 include special
charges related to the closure of the Eden brewery, including $61.3
million of accelerated depreciation in excess of normal
depreciation associated with the brewery. The tax effect related to
our share of MillerCoors special items in 2016 was immaterial.
(3) On a pro forma basis, other non-core Acquisition related
charges primarily include integration and restructuring incurred in
the fourth quarter of 2016. On an actual basis, for the twelve
months ended December 31, 2016, we recognized $108.4 million of
transaction related costs recorded within marketing, general &
administrative expenses, $82.0 million within cost of goods sold
for the estimated step-up in fair value of inventory related to the
Acquisition which was sold in the fourth quarter of 2016, $58.9
million of derivative losses and financing costs related to our
bridge loan within other income (expense), and $76.8 million of
financing costs related to our term loan, losses on our swaptions,
and interest income related to our fixed rate deposit and money
market accounts within interest income (expense) net. These
interest income (expense) items are included in our adjustments to
arrive at underlying EBITDA in the table below. (4) The
unrealized changes in fair value on our commodity swaps, which are
economic hedges, are recorded as cost of goods sold within our
Corporate business activities. As the exposure we are managing is
realized, we reclassify the gain or loss to the segment in which
the underlying exposure resides, allowing our segments to realize
the economic effects of the derivative without the resulting
unrealized mark-to-market volatility. The amounts included for the
twelve months ended December 31, 2016, and December 31, 2015,
include the unrealized mark-to-market on these commodity swaps.
(5) During the twelve months ended December 31, 2016, total
gains of $20.5 million were recognized in other income (expense)
for the sale of non-operating assets. (6) The effect of
taxes on the adjustments used to arrive at underlying income, a
non-GAAP measure, is calculated based on applying the underlying
effective tax rate to actual underlying earnings, excluding special
and non-core items. The effect of taxes on special and non-core
items is calculated based on the statutory tax rate applicable to
the item being adjusted for in the jurisdiction from which each
adjustment arises. Additionally, included in this line item is any
applicable flow through MCBC tax impacts of MillerCoors special
items.
Molson Coors Brewing Company and
Subsidiaries
Table 3: Underlying Pro Forma
and Actual EBITDA
($ In millions) (Unaudited)
Three Months Ended Twelve Months Ended
Pro
Forma
December 31,2016
December 31,2015
% change
December 31,2016
December 31,2015
% change
U.S.
GAAP: Net income (loss) attributable to MCBC from
continuing operations
$ (608.1 ) $ 6.7 N/M
$
277.5 $ 542.6 (48.9 )% Add: Net income (loss)
attributable to noncontrolling interests 2.6 4.5
(42.2 )% 16.9 24.1 (29.9 )%
U.S.
GAAP: Net income (loss) from continuing
operations
$ (605.5 ) $ 11.2 N/M
$
294.4 $ 566.7 (48.1 )% Add: Interest expense
(income), net 93.8 89.3 5.0 % 368.8 364.4 1.2 % Add: Income tax
expense (benefit) 190.3 4.4 N/M 472.7 191.4 147.0 % Add:
Depreciation and amortization 195.9 227.6 (13.9 )% 851.4 839.3 1.4
% Adjustments included in underlying income(1) 533.7 97.9 N/M 511.7
470.9 8.7 % Adjustments to arrive at underlying EBITDA(2) (3.1 )
(43.1 ) (92.8 )% (115.6 ) (110.7 ) 4.4 %
Non-GAAP: Underlying EBITDA
$ 405.1 $ 387.3 4.6 %
$ 2,383.4 $ 2,322.0 2.6 %
Three Months Ended Twelve Months Ended
Actual
December 31,2016
December 31,2015
% change
December 31,2016
December 31,2015
% change
U.S.
GAAP: Net income attributable to MCBC from continuing
operations
$ 1,438.9 $ 33.4 N/M
$
1,978.7 $ 355.6 N/M Add: Net income (loss)
attributable to noncontrolling interests 2.2 0.9
144.4 % 5.9 3.3 78.8 %
U.S.
GAAP: Net income (loss) from continuing
operations
$ 1,441.1 $ 34.3 N/M
$
1,984.6 $ 358.9 N/M Add: Interest expense
(income), net 90.0 25.4 N/M 244.4 112.0 118.2 % Add: Income tax
expense (benefit) 993.2 7.9 N/M 1,050.7 51.8 N/M Add: Depreciation
and amortization 184.1 72.5 153.9 % 388.4 314.4 23.5 % Adjustments
included in underlying income(1) (2,320.8 ) 29.7 N/M (2,241.5 )
374.7 N/M Adjustments to arrive at underlying EBITDA(2) (6.9 ) (3.7
) 86.5 % (89.2 ) (49.5 ) 80.2 % Adjustments to arrive at underlying
EBITDA related to our investment in MillerCoors(3) 4.2 61.2
(93.1 )% 142.7 169.1 (15.6 )%
Non-GAAP: Underlying EBITDA
$ 384.9 $ 227.3 69.3 %
$ 1,480.1 $ 1,331.4 11.2
%
N/M = Not meaningful
(1) Includes adjustments to non-GAAP underlying income
within the table above related to special and non-core items.
(2) Represents adjustments to remove amounts related to
interest, depreciation and amortization included in the adjustments
to non-GAAP underlying income above, as these items are added back
as adjustments to net income attributable to MCBC from continuing
operations. (3) Adjustments to our equity income from
MillerCoors, which include our proportionate share of MillerCoors'
interest, income tax, depreciation and amortization, special items,
and amortization of the difference between the MCBC contributed
cost basis and proportionate share of the underlying equity in net
assets of MillerCoors.
Molson Coors Brewing Company and
Subsidiaries
Table 4: Underlying Free Cash
Flow
($ In millions) (Unaudited)
Actual Twelve Months Ended
December 31, 2016(7) December 31,
2015(8)
U.S.
GAAP:
Net Cash Provided by Operating Activities $
1,126.9 $ 715.9 Less: Additions to
properties(1) (341.8 ) (275.0 ) Less: Investment in MillerCoors(1)
(1,253.7 ) (1,442.7 ) Add: Return of capital from MillerCoors(1)
1,086.9 1,441.1 Add/(Less): Cash impact of Special items(2) 24.3
23.1 Add: Costs related to acquisition of businesses(3) 151.2 1.1
Add: Discretionary pension contribution(4) — 227.1 Add: Settlement
of swaps, net(5) — 10.7 Add: MillerCoors investment in
businesses(6) 65.6 22.3 Add: MillerCoors cash impact of special
items(6) 4.3 0.2
Non-GAAP:
Underlying Free Cash Flow $ 863.7
$ 723.8
(1) Included in net cash used in investing
activities. (2) Included in net cash provided by operating
activities and primarily reflects termination fees received and
paid, as well as costs paid for brewery closures and restructuring
activities. Also, includes additions to properties within net cash
used in investing activities related to the cash paid to build a
new efficient and flexible brewery in British Columbia, following
the sale of our Vancouver brewery in the first quarter of 2016. The
proceeds of $140.8 million received from the sale of the Vancouver
brewery are being used to fund the construction of the new brewery
in British Columbia. (3) Included in net cash provided by
operating activities and reflects costs paid associated with the
Acquisition of 58% of MillerCoors, LLC, and the Miller global brand
portfolio, including $60.9 million of cash paid for income taxes.
(4) Discretionary cash contribution of $227.1 million made
to our U.K. pension plan in 2015 included in net cash provided by
operating activities. (5) Settlement of forward starting
interest rate swaps related to the issuance of our CAD 500 million
2.75% notes due September 2020, and CAD 400 million 2.25% notes due
September 2018, included in net cash provided by (used in)
operating activities. (6) Amounts represent our
proportionate 42% share of the cash flow impacts for the
pre-Acquisition period January 1, 2016, through October 10, 2016.
(7) Prior to October 11, 2016, MCBC’s 42% share of
MillerCoors results of operations were reported as equity income in
MillerCoors in the consolidated statements of operations. As a
result of the completion of the Acquisition, beginning October 11,
2016, MillerCoors results of operations were fully consolidated
into MCBC’s consolidated financial statements and included in the
U.S. segment. (8) Operating cash flow has been revised to
reflect the adoption of new guidance regarding accounting for
share-based compensation.
Molson Coors Brewing
Company and Subsidiaries
Table 5: Constant Currency
Results: Actual Constant Currency Reporting Net Sales, U.S.
GAAP Pretax Income and Underlying Pretax Income and Pro Forma
Constant Currency Reporting Net Sales, U.S. GAAP Pretax Income and
Underlying Pretax Income
(Unaudited)
U.S. GAAP: Net Sales (In
millions)
Three Months Ended
December 31,2016
December 31,2015
Reported %Increase
(Decrease)
ForeignExchangeImpact
($)
Constant Currency%
Increase(Decrease)
Canada $ 329.6 $ 341.9 (3.6 )% $ 0.2 (3.7 )% Europe 366.8 466.2
(21.3 )% (53.7 ) (9.8 )% MCI 60.0 36.9 62.6 % 0.5 61.2 % Corporate
0.2 0.2 — % — — %
U.S. GAAP: Pretax Income (In
millions)
Three Months Ended
December 31,2016
December 31,2015
Reported
%Increase(Decrease)
ForeignExchangeImpact
($)
Constant Currency%
Increase(Decrease)
Canada (460.9 ) 48.5 (1,050.3 )% (6.1 ) (1,037.7 )% Europe (18.3 )
28.6 (164.0 )% 2.6 (173.1 )% MCI (1.3 ) (5.1 ) 74.5 % (0.2 ) 78.4 %
Corporate (164.4 ) (76.0 ) (116.3 )% (5.6 ) (108.9 )%
Non-GAAP: Underlying Pretax
Income (In millions)
Three Months Ended
December 31,2016
December 31,2015
Reported
%Increase(Decrease)
ForeignExchangeImpact
($)
Constant Currency%
Increase(Decrease)
Canada 48.5 51.8 (6.4 )% 0.5 (7.3 )% Europe (14.5 ) 36.2 (140.1 )%
1.9 (145.3 )% MCI (1.0 ) (5.1 ) 80.4 % (0.2 ) 84.3 % Corporate
(121.6 ) (57.2 ) (112.6 )% (9.5 ) (96.0 )%
MCBC Consolidated Pro Forma (In
millions)
Three Months Ended
December 31,2016
December 31,2015
Reported
%Increase(Decrease)
ForeignExchangeImpact
($)
Constant Currency%
Increase(Decrease)
U.S. GAAP Net Sales 2,468.0 2,577.4 (4.2 )% (53.0 ) (2.2 )% U.S.
GAAP Pretax Income (415.2 ) 15.6 (2,761.5 )% (9.3 ) (2,701.9 )%
Non-GAAP Underlying Pretax Income 118.5 113.5 4.4 % (7.3 ) 10.8 %
U.S. GAAP: Net Sales (In
millions)
Twelve Months Ended
December 31,2016
December 31,2015
Reported
%Increase(Decrease)
ForeignExchangeImpact
($)
Constant Currency%
Increase(Decrease)
Canada $ 1,425.7 $ 1,511.5 (5.7 )% $ (46.8 ) (2.6 )% Europe 1,760.2
1,914.9 (8.1 )% (137.6 ) (0.9 )% MCI 163.6 144.5 13.2 % 2.0 11.8 %
Corporate 1.0 1.0 — % — — %
U.S. GAAP: Pretax Income (In
millions)
Twelve Months Ended
December 31,2016
December 31,2015
Reported
%Increase(Decrease)
ForeignExchangeImpact
($)
Constant Currency%
Increase(Decrease)
Canada (135.5 ) 277.3 (148.9 )% (12.9 ) (144.2 )% Europe 138.0
(109.7 ) 225.8 % (7.3 ) 232.5 % MCI (39.7 ) (24.8 ) (60.1 )% 1.0
(64.1 )% Corporate (497.9 ) (248.4 ) (100.4 )% 0.7 (100.7 )%
Non-GAAP: Underlying Pretax
Income (In millions)
Twelve Months Ended
December 31,2016
December 31,2015
Reported
%Increase(Decrease)
ForeignExchangeImpact
($)
Constant Currency%
Increase(Decrease)
Canada 267.3 304.5 (12.2 )% (1.3 ) (11.8 )% Europe 129.8 203.4
(36.2 )% (6.8 ) (32.8 )% MCI (8.6 ) (18.4 ) 53.3 % (0.7 ) 57.1 %
Corporate (288.0 ) (220.4 ) (30.7 )% (2.5 ) (29.5 )%
MCBC Consolidated Pro Forma (In
millions)
Twelve Months Ended
December 31,2016
December 31,2015
Reported
%Increase(Decrease)
ForeignExchangeImpact
($)
Constant Currency%
Increase(Decrease)
U.S. GAAP Net Sales 10,983.2 11,238.1 (2.3 )% (182.4 ) (0.6 )% U.S.
GAAP Pretax Income 767.1 758.1 1.2 % (18.5 ) 3.6 % Non-GAAP
Underlying Pretax Income 1,278.8 1,229.0 4.1 % (11.3 ) 5.0 %
Constant currency is a non-GAAP measure utilized by Molson Coors
management to measure performance, excluding the impact of foreign
currency movements. As we operate in various foreign countries
where the local currency may strengthen or weaken significantly
versus the U.S. dollar or other currencies used in operations, we
utilize a constant currency measure as an additional metric to
evaluate the underlying performance of each business without
consideration of foreign currency movements. This information is
non-GAAP and should be viewed as a supplement to (not a substitute
for) our reported results of operations under U.S. GAAP. We
calculate the impact of foreign exchange on net sales, pretax
income and non-GAAP underlying pretax income using the following
steps:
- Multiply our current period local
currency operating results (that also include the impact of the
comparable prior-period currency hedging activities) by the
weighted average foreign exchange rates used to translate the
financial statements in the comparable prior year period. The
result is the current-period operating results in U.S. dollars, as
if foreign exchange rates had not changed from the prior-year
period.
- Subtract the result in step 1 from the
unadjusted current-period reported operating result in U.S. dollars
(U.S. GAAP measure). This difference reflects the impact of foreign
currency translational gains/losses included in the current-period
results.
- Determine the amount of actual
non-operating foreign currency gains/losses realized as a result of
hedging activities and activities transacted in a currency other
than the functional currency of each legal entity.
- Add the results of steps 2 and 3 above.
This sum equals the total impact of foreign currency translational
gains/losses and realized gains/losses from foreign currency
transactions. This is the value shown in the “Foreign Exchange $
Impact” column within the table above.
Worldwide Beer
Volume
Molson Coors Brewing Company and Subsidiaries
Table 6: Pro Forma and Actual
Worldwide Beer Volume
(In millions of hectoliters) (Unaudited)
Three Months Ended
Twelve Months Ended
Pro
Forma
December 31,2016
December 31,2015
% Change
December 31,2016
December 31,2015
% Change Financial Volume(1) 23.337 23.679 (1.4 )% 101.934
104.012 (2.0 )% Contract brewing and wholesaler volume(1) (2.022 )
(2.159 ) (6.3 )% (8.873 ) (9.684 ) (8.4 )% Royalty Volume(2) 0.811
0.351 131.1 % 2.102 1.631 28.9 %
Total Worldwide Beer Volume 22.126 21.871 1.2
% 95.163 95.959 (0.8 )%
Three Months Ended Twelve
Months Ended
Actual
December 31,2016
December 31,2015
% Change
December 31,2016
December 31,2015
% Change Financial Volume(1) 21.796 7.771 180.5 % 46.912
33.746 39.0 % Contract brewing and wholesaler volume(1) (1.981 )
(0.660 ) 200.2 % (3.965 ) (3.250 ) 22.0 % Royalty Volume(2) 0.811
0.351 131.1 % 2.102 1.631 28.9 %
Owned Volume 20.626 7.462 176.4 % 45.049 32.127 40.2 %
Proportionate Share of Equity Investment Worldwide Beer Volume(1)
0.580 6.166 (90.6 )% 17.908 27.210
(34.2 )%
Total Worldwide Beer Volume 21.206 13.628
55.6 % 62.957 59.337 6.1 %
(1) As a result of the
Acquisition, we aligned our volume reporting policies resulting in
adjustments to our historically reported volumes. Specifically,
financial volume for all consolidated segments has been recast to
include contract brewing and wholesaler non-owned brand volumes
(including factored brands in Europe and non-owned brands
distributed in the U.S.), as the corresponding sales are reported
within our gross sales amounts. Additionally, financial volumes
continue to include our owned beer brands sold to unrelated
external customers within our geographic markets, net of returns
and allowances. Worldwide beer volume reflects only owned beer
brands sold to unrelated external customers within our geographic
markets, net of returns and allowances, royalty volume and our
proportionate share of equity investment worldwide beer volume
calculated consistently with MCBC owned volume. (2) Includes
MCI segment royalty volume that is primarily in Russia, Ukraine and
Mexico, and Europe segment royalty volume in Republic of Ireland.
U.S. GAAP and
Underlying Measures
Molson Coors Brewing Company and Subsidiaries
Table 7: U.S. GAAP Consolidated
Statements of Operations
($ In millions, except per share data) (Unaudited)
Three Months Ended
Twelve Months Ended
December 31,2016
December 31,2015
December 31,2016
December 31,2015
Volume in hectoliters 21.796 7.771 46.912
33.746 Sales $ 2,901.9 $ 1,236.9 $ 6,597.4 $ 5,127.4 Excise
taxes (607.9 ) (392.5 ) (1,712.4 ) (1,559.9 ) Net sales 2,294.0
844.4 4,885.0 3,567.5 Cost of goods sold (1,485.6 ) (542.9 )
(3,003.1 ) (2,163.5 ) Gross profit 808.4 301.5 1,881.9 1,404.0
Marketing, general and administrative expenses (753.9 ) (262.7 )
(1,597.3 ) (1,051.8 ) Special items, net 2,444.9 (10.9 ) 2,523.9
(346.7 ) Equity income in MillerCoors 9.7 46.2 500.9
516.3 Operating income (loss) 2,509.1 74.1 3,309.4
521.8 Other income (expense), net Interest expense (111.1 ) (27.6 )
(271.6 ) (120.3 ) Interest income 21.1 2.2 27.2 8.3 Other income
(expense), net 15.2 (6.5 ) (29.7 ) 0.9 Total other
income (expense), net (74.8 ) (31.9 ) (274.1 ) (111.1 ) Income
(loss) from continuing operations before income taxes 2,434.3 42.2
3,035.3 410.7 Income tax benefit (expense) (993.2 ) (7.9 ) (1,050.7
) (51.8 ) Net income (loss) from continuing operations 1,441.1 34.3
1,984.6 358.9 Income (loss) from discontinued operations, net of
tax (0.5 ) (0.6 ) (2.8 ) 3.9 Net income (loss) including
noncontrolling interests 1,440.6 33.7 1,981.8 362.8 Net (income)
loss attributable to noncontrolling interests (2.2 ) (0.9 ) (5.9 )
(3.3 ) Net income (loss) attributable to MCBC $ 1,438.4 $
32.8 $ 1,975.9 $ 359.5 Basic net income
(loss) attributable to MCBC per share: From continuing operations $
6.70 $ 0.18 $ 9.33 $ 1.92 From discontinued operations — —
(0.01 ) 0.02 Basic net income (loss) attributable to
MCBC per share $ 6.70 $ 0.18 $ 9.32 $ 1.94
Diluted net income (loss) attributable to MCBC per
share: From continuing operations $ 6.65 $ 0.18 $ 9.27 $ 1.91 From
discontinued operations — — (0.01 ) 0.02
Diluted net income (loss) attributable to MCBC per share $ 6.65
$ 0.18 $ 9.26 $ 1.93 Weighted
average shares - basic 214.8 184.5 212.0 185.3 Weighted average
shares - diluted 216.4 185.7 213.4 186.4 Dividends per share
$ 0.41 $ 0.41 $ 1.64 $ 1.64
Amounts attributable to MCBC Net income (loss) from continuing
operations $ 1,438.9 $ 33.4 $ 1,978.7 $ 355.6 Income (loss) from
discontinued operations, net of tax (0.5 ) (0.6 ) (2.8 ) 3.9
Net income (loss) attributable to MCBC $ 1,438.4 $ 32.8
$ 1,975.9 $ 359.5
Molson Coors Brewing Company and Subsidiaries
Table 8: Pro Forma Consolidated
Statements of Operations((1))
($ In millions, except per share data) (Unaudited)
Three Months Ended
Twelve Months Ended
December 31,2016
December 31,2015
December 31,2016
December 31,2015
Volume in hectoliters(2) 23.337 23.679 101.934
104.012 Sales $ 3,100.1 $ 3,217.0 $ 13,545.1 $ 13,894.7
Excise taxes (632.1 ) (639.6 ) (2,561.9 ) (2,656.6 ) Net sales
2,468.0 2,577.4 10,983.2 11,238.1 Cost of goods sold (1,502.9 )
(1,614.1 ) (6,383.2 ) (6,734.3 ) Gross profit 965.1 963.3 4,600.0
4,503.8 Marketing, general and administrative expenses (778.3 )
(766.9 ) (2,970.3 ) (2,938.0 ) Special items, net (521.1 ) (93.0 )
(526.7 ) (456.8 ) Operating income (loss) (334.3 ) 103.4 1,103.0
1,109.0 Interest income (expense), net (93.8 ) (89.3 ) (368.8 )
(364.4 ) Other income (expense), net 12.9 1.5 32.9
13.5 Income (loss) from continuing operations before
income taxes (415.2 ) 15.6 767.1 758.1 Income tax benefit (expense)
(190.3 ) (4.4 ) (472.7 ) (191.4 ) Net income (loss) from continuing
operations (605.5 ) 11.2 294.4 566.7 Income (loss) from
discontinued operations, net of tax (0.5 ) (0.6 ) (2.8 ) 3.9
Net income (loss) including noncontrolling interests (606.0 ) 10.6
291.6 570.6 Net income (loss) attributable to noncontrolling
interests (2.6 ) (4.5 ) (16.9 ) (24.1 ) Net income (loss)
attributable to MCBC $ (608.6 ) $ 6.1 $ 274.7 $ 546.5
Net income (loss) per share attributable to MCBC from
continuing operations: Net income (loss) attributable to MCBC from
continuing operations $ (608.1 ) $ 6.7 $ 277.5 $ 542.6 Basic $
(2.83 ) $ 0.03 $ 1.29 $ 2.52 Diluted $ (2.83 ) $ 0.03 $ 1.28 $ 2.51
Weighted-average shares—basic 214.8 214.4 214.7 215.2 U.S. GAAP
weighted-average shares—diluted 214.8 215.6 216.1 216.3 Non-GAAP
weighted-average shares—diluted 216.4 215.6 216.1 216.3
(1) See
notes in Tables 1 and 2 for further detail of adjusting items.
(2) Historical volumes have been recast to reflect the
impacts of aligning policies on reporting financial volumes as a
result of the Acquisition. See table 6, "Worldwide Beer Volume"
above for further details.
Molson Coors Brewing Company
and Subsidiaries
Table 9: U.S. Pro Forma and
Actual Results of Operations (previously MillerCoors LLC equity
investment)
($ In millions) (Unaudited)
Three months ended December 31, 2016
December 31, 2015 Pro Forma(1)
Actual(2) Pro Forma
Actual Volumes in hectoliters(3)(4) 15.997
15.997 16.179 16.179 Sales(4) $ 1,979.1 $
1,979.1 $ 1,995.3 $ 1,995.3 Excise taxes (237.6 ) (237.6 ) (247.1 )
(247.1 ) Net sales(4) 1,741.5 1,741.5 1,748.2 1,748.2 Cost of goods
sold(4)(6) (1,044.2 ) (1,125.1 ) (1,086.4 ) (1,056.9 ) Gross profit
697.3 616.4 661.8 691.3 Marketing, general and administrative
expenses (483.3 ) (482.1 ) (511.1 ) (495.7 ) Special items, net(5)
(6.9 ) 2,958.1 (82.1 ) (82.1 ) Operating income 207.1
3,092.4 68.6 113.5 Interest income (expense), net — — (0.6 ) (0.6 )
Other income (expense), net 0.7 0.7 1.1 1.1
Income (loss) from continuing operations before income taxes
$ 207.8 $ 3,093.1 $ 69.1 $ 114.0 Add/(less): Special items, net(5)
6.9 (2,958.1 ) 82.1 82.1 Other non-core items(6) — 82.0
— — Non-GAAP: Underlying pretax income (loss)
$ 214.7 $ 217.0 $ 151.2 $ 196.1
(1) Includes pro forma results from October 1,
2016, through October 10, 2016, and actual results from October 11,
2016, through December 31, 2016. (2) Amounts include results
from the pre-Acquisition period of October 1, 2016, through October
10, 2016, and post-Acquisition period of October 11, 2016, through
December 31, 2016. Results for the post-Acquisition period of
October 11, 2016, through December 31, 2016, reflect policy
alignment and purchase accounting impacts. (3) Historical
actual volumes have been recast to reflect the impacts of aligning
policies on reporting financial volumes as a result of the
Acquisition. See Table 6, "Pro Forma and Actual Worldwide Beer
Volume" for additional information. (4) On a reported basis,
includes gross segment sales and volumes which are eliminated in
the consolidated totals. (5) See table 10 below for special
charges related to MillerCoors for the pre-Acquisition period and
Part II—Item 8 Financial Statements and Supplementary Data, Note 7,
"Special Items" of the Form 10-K for detailed discussion of special
items for the post Acquisition period. (6) As a result of
the Acquisition, a step-up in fair value of inventory was recorded
to cost of goods sold in the fourth quarter of 2016. See Part
II—Item 8 Financial Statements and Supplementary Data, Note 4,
"Acquisition and Investments" of the Form 10-K for detailed
discussion.
Twelve Months Ended December 31, 2016
December 31, 2015 Pro Forma(1)
Actual(2) Pro Forma
Actual Volumes in hectoliters(3)(4) 70.186
70.186 71.220 71.220 Sales(4) $ 8,767.2 $
8,767.2 $ 8,822.2 $ 8,822.2 Excise taxes (1,062.9 ) (1,075.2 )
(1,096.7 ) (1,096.7 ) Net sales(4) 7,704.3 7,692.0 7,725.5 7,725.5
Cost of goods sold(4)(6) (4,445.6 ) (4,483.4 ) (4,625.7 ) (4,547.5
) Gross profit 3,258.7 3,208.6 3,099.8 3,178.0 Marketing, general
and administrative expenses (1,883.6 ) (1,844.1 ) (1,893.1 )
(1,828.7 ) Special items, net(5) (91.5 ) 2,873.5 (110.1 )
(110.1 ) Operating income 1,283.6 4,238.0 1,096.6 1,239.2 Interest
income (expense), net (1.4 ) (1.4 ) (1.6 ) (1.6 ) Other income
(expense), net 4.4 4.4 5.7 5.7 Income
(loss) from continuing operations before income taxes $ 1,286.6 $
4,241.0 $ 1,100.7 $ 1,243.3 Add/(less): Special items, net(5) 91.5
(2,873.5 ) 110.1 110.1 Other non-core items(6) — 82.0
— — Non-GAAP: Underlying pretax income (loss) $
1,378.1 $ 1,449.5 $ 1,210.8 $ 1,353.4
(1) Includes pro forma results from
January 1, 2016, through October 10, 2016, and actual results from
October 11, 2016, through December 31, 2016. (2) Amounts
include results from the pre-Acquisition period of January 1, 2016,
through October 10, 2016, and post-Acquisition period of October
11, 2016, through December 31, 2016. Results for the
post-Acquisition period of October 11, 2016, through December 31,
2016, reflect policy alignment and purchase accounting impacts.
(3) Historical actual volumes have been recast to reflect
the impacts of aligning policies on reporting financial volumes as
a result of the Acquisition. See Table 6, "Pro Forma and Actual
Worldwide Beer Volume" for additional information. (4)
Includes gross segment sales volumes which are eliminated in the
consolidated totals. (5) See table 10 below for special
charges related to MillerCoors for the pre-Acquisition period and
Part II—Item 8 Financial Statements and Supplementary Data, Note 7,
"Special Items" of the Form 10-K for detailed discussion of special
items for the post Acquisition period. (6) As a result of
the Acquisition, a step-up in fair value of inventory was recorded
to cost of goods sold in the fourth quarter of 2016. See Part
II—Item 8 Financial Statements and Supplementary Data, Note 4,
"Acquisition and Investments" of the Form 10-K for detailed
discussion.
Molson Coors Brewing Company and
Subsidiaries
Table 10: Underlying Equity
Income in MillerCoors
($ In millions) (Unaudited)
For the periodOctober 1
throughOctober 10
For the quarterended
For the periodJanuary 1
through October 10
For the year ended 2016 December 31,
2015 2016 December 31, 2015 (In millions,
except percentages) Income (loss) from continuing operations
before income taxes $ 23.6 $ 114.0 $ 1,171.5 $ 1,243.3 Income tax
expense — (0.9 ) $ (3.3 ) (4.7 ) Net (income) loss attributable to
noncontrolling interest (0.4 ) (3.6 ) $ (11.0 ) (20.8 ) Net income
attributable to MillerCoors $ 23.2 $ 109.5 $ 1,157.2 $ 1,217.8 MCBC
economic interest 42 % 42 % 42 % 42 % MCBC proportionate share of
MillerCoors net income 9.7 46.0 486.0 511.5 Amortization of the
difference between MCBC contributed cost basis and proportionate
share of the underlying equity in net assets of MillerCoors — 1.2
3.3 4.6 Share-based compensation adjustment(1) — (1.0 ) (0.7 ) 0.2
U.S. import tax benefit(2) — — 12.3 —
Equity income in MillerCoors $ 9.7 $ 46.2 $ 500.9 $ 516.3
Add/(less): MCBC proportionate share of MillerCoors special items,
net of tax(3) 0.4 34.4 35.9 46.2
Non-GAAP Equity Income in MillerCoors $ 10.1 $ 80.6 $
536.8 $ 562.5
(1) The net
adjustment is to eliminate all share-based compensation impacts
related to pre-existing SABMiller equity awards held by former
Miller employees employed by MillerCoors as well as to add back all
share-based compensation impacts related to pre-existing MCBC
equity awards held by former MCBC employees who transferred to
MillerCoors. (2) Represents a benefit associated with an
anticipated refund to Coors Brewing Company ("CBC"), a wholly-owned
subsidiary of MCBC, of U.S. federal excise tax paid on products
imported by CBC based on qualifying volumes exported by CBC from
the U.S. Due to administrative restrictions outlined within the
legislation enacted in 2016, the anticipated refund is not expected
to be received until 2018. Accordingly, the anticipated refund
amount represents a non-current receivable which has been recorded
within other non-current assets on the consolidated balance sheet
as of December 31, 2016. (3) Results include net special
charges primarily related to the closure of the Eden, North
Carolina, brewery. For the pre-Acquisition periods of January 1,
2016, through October 10, 2016, MillerCoors recorded net special
charges of $85.6 million, including $103.2 million of accelerated
depreciation in excess of normal depreciation associated with the
closure of the Eden brewery, and a postretirement benefit
curtailment gain related to the closure of Eden of $25.7 million.
Results for 2015 include special charges related to the closure of
the Eden brewery, including $61.3 million of accelerated
depreciation in excess of normal depreciation associated with the
brewery, and $6.4 million of severance and other charges.
MillerCoors also recorded special charges in 2015 of $42.4 million
related to an early settlement of a portion of its defined benefit
pension plan liability.
Molson Coors Brewing Company and
Subsidiaries
Table 11: Canada Results of
Operations
($ In millions) (Unaudited)
Three Months Ended Twelve Months Ended
December 31,2016
December 31,2015
December 31,2016
December 31,2015
Volume in hectoliters(1)(2) 2.067 2.160 8.950
9.207 Sales(2) $ 432.9 $ 455.0 $ 1,879.4 $ 1,994.2 Excise
taxes (103.3 ) (113.1 ) (453.7 ) (482.7 ) Net sales(2) 329.6 341.9
1,425.7 1,511.5 Cost of goods sold(2) (187.1 ) (207.4 ) (801.8 )
(861.6 ) Gross profit 142.5 134.5 623.9 649.9 Marketing, general
and administrative expenses (94.8 ) (84.9 ) (364.4 ) (355.6 )
Special items, net(3) (509.4 ) (3.3 ) (402.8 ) (27.2 ) Operating
income (loss) (461.7 ) 46.3 (143.3 ) 267.1 Other income (expense),
net 0.8 2.2 7.8 10.2 Income (loss) from
continuing operations before income taxes $ (460.9 ) $ 48.5 $
(135.5 ) $ 277.3 Add/(less): Special items, net(3) 509.4 3.3
402.8 27.2 Non-GAAP: Underlying pretax income
(loss) $ 48.5 $ 51.8 $ 267.3 $ 304.5
(1) Historical volumes have been recast
to reflect the impacts of aligning policies on reporting financial
volumes as a result of the Acquisition. See Table 6, "Pro Forma and
Actual Worldwide Beer Volume" for additional information.
(2) Reflects gross segment sales, purchases and volumes which are
eliminated in the consolidated totals. (3) See Part II—Item
8 Financial Statements and Supplementary Data, Note 7, "Special
Items" of the Form 10-K for detailed discussion of special items.
Special items for the three and twelve months ended December 31,
2016, includes accelerated depreciation expense of $1.3 million and
$4.9 million, respectively, related to the planned closure of the
Vancouver brewery. During 2015 we incurred $15.4 million of
accelerated depreciation associated with the closure of a bottling
line within our Vancouver brewery. Additionally, we incurred
special charges related to the closure of a bottling line within
our Toronto brewery, including $7.9 million of accelerated
depreciation associated with this bottling line. These accelerated
depreciation charges are included in our adjustments to arrive at
underlying EBITDA in table 3.
Molson Coors Brewing
Company and Subsidiaries
Table 12: Europe Results of
Operations
($ In millions) (Unaudited)
Three Months Ended Twelve Months Ended
December 31,2016
December 31,2015
December 31,2016
December 31,2015
Volume in hectoliters(1)(2) 5.260 5.244 22.590
22.981 Sales(2) $ 652.2 $ 739.0 $ 2,778.1 $ 2,959.6 Excise
taxes (285.4 ) (272.8 ) (1,017.9 ) (1,044.7 ) Net sales(2) 366.8
466.2 1,760.2 1,914.9 Cost of goods sold (265.6 ) (306.4 ) (1,123.2
) (1,193.0 ) Gross profit 101.2 159.8 637.0 721.9 Marketing,
general and administrative expenses (116.5 ) (122.4 ) (511.3 )
(519.3 ) Special items, net(3) (3.8 ) (7.6 ) (0.6 ) (313.1 )
Operating income (loss) (19.1 ) 29.8 125.1 (110.5 ) Interest
income, net 0.9 0.9 3.6 3.9 Other income (expense), net (0.1 ) (2.1
) 9.3 (3.1 ) Income (loss) from continuing operations before
income taxes $ (18.3 ) $ 28.6 $ 138.0 $ (109.7 ) Add/(less):
Special items, net(3) 3.8 7.6 0.6 313.1 Other non-core items(4) —
— (8.8 ) — Non-GAAP: Underlying pretax income
(loss) $ (14.5 ) $ 36.2 $ 129.8 $ 203.4
(1) Historical volumes have been recast to
reflect the impacts of aligning policies on reporting financial
volumes as a result of the Acquisition. See Table 6, "Pro Forma and
Actual Worldwide Beer Volume" for additional information.
(2) Reflects gross segment sales which are eliminated in the
consolidated totals. (3) See Part II—Item 8 Financial
Statements and Supplementary Data, Note 7, "Special Items" of the
Form 10-K for detailed discussion of special items. Special items
for the three and twelve months ended December 31, 2016, includes
accelerated depreciation expense of $1.8 million and $7.5 million,
respectively, related to the planned closure of our Burton South
brewery in the U.K. Special items for the three and twelve months
ended December 31, 2015, includes accelerated depreciation expense
of $1.4 million related to the planned closure of our Burton South
brewery in the U.K. and $1.0 million related to the closure of our
Plovdiv brewery in Bulgaria, and for the twelve months ended
December 31, 2015, includes $21.8 million related to the closure of
our Alton brewery in the U.K. These accelerated depreciation
charges are included in our adjustments to arrive at underlying
EBITDA in table 3. (4) A gain of $8.8 million was recognized
in other income (expense) during the twelve months ended December
31, 2016, for the sale of a non-operating asset.
Molson
Coors Brewing Company and Subsidiaries
Table 13: Molson Coors
International Results of Operations
($ In millions) (Unaudited)
Three Months Ended Twelve Months Ended
December 31,2016
December 31,2015
December 31,2016
December 31,2015
Volume in hectoliters(1)(2) 0.553 0.378 1.495
1.613 Sales $ 65.8 $ 43.5 $ 191.0 $ 177.0 Excise taxes (5.8
) (6.6 ) (27.4 ) (32.5 ) Net sales 60.0 36.9 163.6 144.5 Cost of
goods sold(3) (40.5 ) (24.8 ) (107.1 ) (98.6 ) Gross profit 19.5
12.1 56.5 45.9 Marketing, general and administrative expenses (20.6
) (17.2 ) (65.3 ) (63.9 ) Special items, net(4) (0.3 ) —
(31.1 ) (6.4 ) Operating income (loss) (1.4 ) (5.1 ) (39.9 ) (24.4
) Other income (expense), net 0.1 — 0.2 (0.4 )
Income (loss) from continuing operations before income taxes $ (1.3
) $ (5.1 ) $ (39.7 ) $ (24.8 ) Add/(less): Special items, net(4)
0.3 — 31.1 6.4 Non-GAAP: Underlying
pretax income (loss) $ (1.0 ) $ (5.1 ) $ (8.6 ) $ (18.4 )
(1) Historical volumes have been recast to
reflect the impacts of aligning policies on reporting financial
volumes as a result of the Acquisition. See Table 6, "Pro Forma and
Actual Worldwide Beer Volume" for additional information.
(2) Excludes royalty volume of 0.754 million hectoliters and 1.908
million hectoliters for the three and twelve months ended December
31, 2016, and excludes royalty volume of 0.338 million hectoliters
and 1.458 million hectoliters for the three and twelve months ended
December 31, 2015, respectively. (3) Reflects gross segment
purchases which are eliminated in the consolidated totals.
(4) See Part II—Item 8 Financial Statements and Supplementary Data,
Note 7, "Special Items" of the Form 10-K for detailed discussion of
special items.
Molson Coors Brewing Company and
Subsidiaries
Table 14: Corporate Results of
Operations
($ In millions) (Unaudited)
Three Months Ended Twelve Months Ended
December 31,2016
December 31,2015
December 31,2016
December 31, 2015
Volume in hectoliters — — — — Sales $
0.2 $ 0.2 $ 1.0 $ 1.0 Excise taxes — — — —
Net sales 0.2 0.2 1.0 1.0 Cost of goods sold 4.4 (5.1
) 22.9 (14.7 ) Gross profit 4.6 (4.9 ) 23.9 (13.7 )
Marketing, general and administrative expenses (91.1 ) (38.2 )
(225.4 ) (113.0 ) Special items, net(1) (0.7 ) — (0.7 ) —
Operating income (loss) (87.2 ) (43.1 ) (202.2 ) (126.7 )
Interest expense, net (90.9 ) (26.3 ) (248.0 ) (115.9 ) Other
income (expense), net 13.7 (6.6 ) (47.7 ) (5.8 ) Income
(loss) from continuing operations before income taxes $ (164.4 ) $
(76.0 ) $ (497.9 ) $ (248.4 ) Add/(less): Special items, net(1) 0.7
— 0.7 — Acquisition and integration related costs(2) 58.1 13.9
244.0 13.9 Unrealized mark-to-market (gains) and losses(3) (4.3 )
4.9 (23.1 ) 14.1 Other non-core items(4) (11.7 ) — (11.7 ) —
Non-GAAP: Underlying pretax income (loss) $ (121.6 ) $ (57.2
) $ (288.0 ) $ (220.4 )
(1) See Part
II—Item 8 Financial Statements and Supplementary Data, Note 7,
"Special Items" of the Form 10-K for detailed discussion of special
items. (2) In connection with the Acquisition, for the three
and twelve months ended December 31, 2016, we have recorded $56.7
million and $108.4 million, respectively, of transaction related
costs recorded within marketing, general & administrative
expenses, a gain of $2.5 million and a loss of $58.9 million,
respectively, of derivative losses and financing costs related to
our bridge loan within other income (expense), and $3.8 million and
$76.8 million, respectively, of financing costs related to our term
loan, losses on our swaptions, and interest income related to our
fixed rate deposit and money market accounts within interest income
(expense) net. These interest income (expense) items are included
in our adjustments to arrive at underlying EBITDA in table 3.
(3) The unrealized changes in fair value on our commodity
swaps, which are economic hedges, are recorded as cost of goods
sold within our Corporate business activities. As the exposure we
are managing is realized, we reclassify the gain or loss to the
segment in which the underlying exposure resides, allowing our
segments to realize the economic effects of the derivative without
the resulting unrealized mark-to-market volatility. The amounts
included for the three and twelve months ended December 31, 2016,
and December 31, 2015, include the unrealized mark-to-market on
these commodity swaps. (4) A gain of $11.7 million was
recognized in other income (expense) during the three and twelve
months ended December 31, 2016, for the sale of a non-operating
asset.
Molson Coors Brewing Company and Subsidiaries
Table 15: Consolidated Balance
Sheets
($ In millions, except par value) (Unaudited)
As of December 31, 2016
December 31, 2015 Assets Current assets: Cash and
cash equivalents $ 560.9 $ 430.9 Accounts and other receivables:
Trade, less allowance for doubtful accounts of $10.7 and $8.7,
respectively 654.4 407.9 Affiliate receivables 15.1 16.8 Other
receivables, less allowance for doubtful accounts of $0.6 and $0.8,
respectively 135.8 101.2 Inventories: Finished 213.8 139.1 In
process 81.6 13.0 Raw materials 238.5 18.6 Packaging materials 58.8
8.6 Total inventories 592.7 179.3 Other current
assets 210.7 122.7 Total current assets 2,169.6
1,258.8 Properties, less accumulated depreciation of $1,499.3 and
$1,390.1, respectively 4,507.4 1,590.8 Goodwill 8,250.1 1,983.3
Other intangibles, less accumulated amortization of $404.0 and
$341.8, respectively 14,031.9 4,745.7 Investment in MillerCoors —
2,441.0 Other assets 382.5 256.7 Total assets $
29,341.5 $ 12,276.3
Liabilities and equity
Current liabilities: Accounts payable and other current liabilities
(includes affiliate payable amounts of $2.1 and $10.6,
respectively) $ 2,467.7 $ 1,184.4 Current portion of long-term debt
and short-term borrowings 684.8 28.7 Discontinued operations 5.0
4.1 Total current liabilities 3,157.5 1,217.2
Long-term debt 11,387.7 2,908.7 Pension and post-retirement
benefits 1,196.0 201.9 Deferred tax liabilities 1,699.0 799.8 Other
liabilities 267.0 75.3 Discontinued operations 12.6 10.3
Total liabilities 17,719.8 5,213.2 Molson Coors Brewing
Company stockholders' equity Capital stock: Preferred stock, $0.01
par value (authorized: 25.0 shares; none issued) — — Class A common
stock, $0.01 par value per share (authorized: 500.0 shares; issued
and outstanding: 2.6 shares and 2.6 shares, respectively) — — Class
B common stock, $0.01 par value per share (authorized: 500.0
shares; issued: 203.7 shares and 172.5 shares, respectively) 2.0
1.7 Class A exchangeable shares, no par value (issued and
outstanding: 2.9 shares and 2.9 shares, respectively) 108.1 108.2
Class B exchangeable shares, no par value (issued and outstanding:
15.2 shares and 16.0 shares, respectively) 571.2 603.0 Paid-in
capital 6,635.3 4,000.4 Retained earnings 6,119.0 4,496.0
Accumulated other comprehensive income (loss) (1,545.5 ) (1,694.9 )
Class B common stock held in treasury at cost (9.5 shares and 9.5
shares, respectively) (471.4 ) (471.4 ) Total Molson Coors Brewing
Company stockholders' equity 11,418.7 7,043.0 Noncontrolling
interests 203.0 20.1 Total equity 11,621.7
7,063.1 Total liabilities and equity $ 29,341.5 $
12,276.3
Molson Coors Brewing Company
and Subsidiaries
Table 16: Consolidated
Statements of Cash Flows
($ In millions) (Unaudited) Twelve
Months Ended December 31, 2016 December
31, 2015 Cash flows from operating activities: Net income
(loss) including noncontrolling interests $ 1,981.8 $ 362.8
Adjustments to reconcile net income to net cash provided by
operating activities: Revaluation gain on previously held 42%
equity interest in MillerCoors and AOCI reclassification (2,965.0 )
— Inventory step-up in cost of goods sold 82.0 — Depreciation and
amortization 388.4 314.4 Amortization of debt issuance costs and
discounts 66.5 11.1 Share-based compensation 29.9 18.4 (Gain) loss
on sale or impairment of properties and other assets, net 396.0
274.7 Equity income in MillerCoors (488.6 ) (516.3 ) Distributions
from MillerCoors 488.6 516.3 Equity in net (income) loss of other
unconsolidated affiliates (2.6 ) (4.5 ) Unrealized (gain) loss on
foreign currency fluctuations and derivative instruments, net (23.5
) 16.7 Income tax (benefit) expense 1,050.7 51.8 Income tax (paid)
received (165.0 ) (134.1 ) Interest expense, excluding interest
amortization 262.3 116.1 Interest paid (162.5 ) (98.9 ) Pension
expense 10.0 15.3 Pension contributions (paid) (12.1 ) (256.1 )
Change in current assets and liabilities (net of impact of business
combinations) and other: Receivables 65.6 60.8 Inventories (23.2 )
10.9 Payables and other current liabilities 144.9 (111.0 ) Other
assets and other liabilities (0.1 ) 71.4 (Gain) loss from
discontinued operations 2.8 (3.9 ) Net cash provided by
operating activities 1,126.9 715.9 Cash flows from
investing activities: Additions to properties (341.8 ) (275.0 )
Proceeds from sales of properties and other assets 174.5 11.8
Acquisition of businesses, net of cash acquired (11,961.0 ) (91.2 )
Investment in MillerCoors (1,253.7 ) (1,442.7 ) Return of capital
from MillerCoors 1,086.9 1,441.1 Other 8.5 21.3 Net
cash used in investing activities (12,286.6 ) (334.7 ) Cash flows
from financing activities: Proceeds from issuance of common stock,
net 2,525.6 — Exercise of stock options under equity compensation
plans 11.2 34.6 Dividends paid (352.9 ) (303.4 ) Payments for
purchase of treasury stock — (150.1 ) Payments on debt and
borrowings (223.9 ) (701.4 ) Proceeds on debt and borrowings
9,460.6 703.3 Debt issuance costs (60.7 ) (61.8 ) Net proceeds from
(payments on) revolving credit facilities and commercial paper (1.1
) 3.9 Change in overdraft balances and other (40.9 ) (56.6 ) Net
cash provided by (used in) financing activities 11,317.9
(531.5 ) Cash and cash equivalents: Net increase (decrease) in cash
and cash equivalents 158.2 (150.3 ) Effect of foreign exchange rate
changes on cash and cash equivalents (28.2 ) (43.4 ) Balance at
beginning of year 430.9 624.6 Balance at end of year
$ 560.9 $ 430.9
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Molson Coors Brewing CompanyNews
MediaColin Wheeler, 303-927-2443orInvestor RelationsDave Dunnewald,
303-927-2334
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