Full Year (FY) Worldwide Brand Volume
Increased 1.0%; FY Priority Brand Volume Grew 2.8%
FY Net Sales Revenue (NSR)/HL Increased
2.6%
FY Net Income of $1.4 Billion ($6.52 Per
Share) Increased 379%, and FY Underlying (Non-GAAP) EPS of $4.47
Increased 1.1%
FY Operating Cash Flow of $1.87 Billion;
Underlying Free Cash Flow of $1.45 Billion
More Than $255 Million of Cost Savings
Delivered in 2017; Raising 3-year Target to $600 Million
____________________________________
4th Quarter (4th Q) Worldwide Brand Volume
Decreased 1.1%, and Priority Brand Volume Decreased 1.9%
4th Q NSR/HL Increased 5.8%
4th Q EPS of $2.72, Up from ($2.83), and
Underlying EPS of $0.62 Increased 31.9%
____________________________________
Molson Coors Brewing Company (NYSE: TAP; TSX: TPX) today
reported results for the 2017 full year and fourth quarter. Molson
Coors president and chief executive officer Mark Hunter said:
"2017 marked the first full year of the bigger, stronger Molson
Coors, and our full year results demonstrated balance and progress
against both our bottom-line and top-line goals. Integration,
synergies and costs savings were all delivered on or ahead of plan
by engaged employees around the world who are aligned behind our
First Choice for consumer and customer ambition. For the full year
2017 versus pro forma 2016 results, we over-delivered on costs
savings and free cash flow and optimized commercial spending,
delivering strong net income growth, underlying EBITDA margin
expansion of 77 basis points, and underlying EBITDA growth of 3.7
percent. We also strengthened our balance sheet by more than $900
million through debt pay-down and pension contributions as part of
our deleverage strategy. This was complemented by an improving top
line, with global brand volume growth of 1 percent and net sales
per hectoliter growth of 2.6 percent, driven by revenue management
and portfolio premiumization. We also grew market share in Canada
and Europe for the year and delivered positive underlying EBITDA in
our International business."
Mark added, "Across Molson Coors, against a backdrop of
integration and challenging market conditions during 2017, we
delivered financial and commercial results that demonstrate our
balanced priorities for bottom- and top-line growth are working. In
2018, our First Choice focus across regions will continue to
strengthen and premiumize our brand portfolio, while deepening our
customer relationships. We will also continue to retain flexibility
in our P&L, deliver on our cost savings and remain
laser-focused on delivering against our cash targets and
strengthening our balance sheet."
Consolidated Performance - Full Year 2017
Twelve Months Ended ($ in
millions, except per share data) (Unaudited)
December 31,
2017 December 31, 2016
Reported%
Increase(Decrease)
ForeignExchangeImpact
($)
ConstantCurrency%
Increase(Decrease)
Actual Pro forma(1) Net Sales $ 11,002.8 $
10,983.2 0.2 % $ (13.2 ) 0.3 % U.S. GAAP Net income (loss)(2) $
1,412.7 $ 294.6 379.5 % Per diluted share $ 6.52 $ 1.36 379.4 %
Underlying (Non-GAAP) Net income(2)(3) $ 968.6 $ 954.6 1.5 % Per
diluted share $ 4.47 $ 4.42 1.1 % Underlying EBITDA (Non-GAAP)(3) $
2,495.1 $ 2,406.5 3.7 % $ (15.9 ) 4.3 %
Consolidated Performance - Fourth Quarter
2017 Three
Months Ended ($ in millions, except per share data) (Unaudited)
December 31, 2017 December 31, 2016
Reported%
Increase(Decrease)
ForeignExchangeImpact
($)
ConstantCurrency%
Increase(Decrease)
Actual Pro forma(1) Net Sales $ 2,579.6
$ 2,468.0 4.5 % $ 51.9 2.4 % U.S. GAAP Net income (loss)(2) $ 588.1
$ (607.2 )
N/M
Per diluted share $ 2.72 $ (2.83 ) N/M Underlying (Non-GAAP) Net
income(2)(3) $ 133.6 $ 101.1 32.1 % Per diluted share $ 0.62 $ 0.47
31.9 % Underlying EBITDA (Non-GAAP)(3) $ 480.3 $ 410.6 17.0 % $
11.1 14.3 %
N/M = Not meaningful
(1) See p. 13 for an explanation of pro forma information.
(2) Net income (loss) attributable to MCBC from continuing
operations. (3) See Appendix for definitions and reconciliations of
non-GAAP financial measures.
Quarterly Highlights
(versus Fourth Quarter 2016 Pro Forma Results, unless otherwise
noted)
- Net sales: $2.580 billion,
increased 4.5 percent, due to positive global pricing, royalty
volume and foreign currency, along with cycling a $50 million
indirect tax provision from a year ago. These factors were
partially offset by lower financial volumes. Net sales in constant
currency grew 2.4 percent.
- Net sales per HL: $111.89,
increased 5.8 percent, and 3.7 percent in constant currency, driven
by positive global pricing, higher royalty revenue, favorable
foreign currency movements and cycling an indirect tax provision
from a year ago.
- Volume: Worldwide brand volume
of 22.4 million hectoliters decreased 1.1 percent due to lower
volume in the U.S. and International, partially offset by growth in
Europe and Canada. Global priority brand volume decreased 1.9
percent. Financial volume of 23.1 million hectoliters decreased 1.2
percent, driven by lower U.S. volume.
- U.S. GAAP net income from
continuing operations attributable to MCBC was $588.1 million,
improved from a loss of $607.2 million last year, driven by a
discrete tax benefit related to the revaluation of our deferred tax
balances, which resulted from the recent U.S. tax reform, along
with favorable underlying performance and cycling an impairment
charge for the Molson brands in Canada and an indirect tax
provision in Europe recorded a year ago.
- Underlying net income (non-GAAP)
increased 32.1 percent, driven by positive global pricing, cost
savings, MG&A efficiencies and net pension benefit, as well as
cycling the indirect tax provision a year ago, partially offset by
inflation, impacts of lower volume, investments behind global
business capabilities, and a higher underlying tax rate.
- The company looks at value creation
from the MillerCoors transaction through the lens of the sum of
three numbers. In the fourth quarter, these three numbers were:
- Underlying net earnings of
$133.6 million, plus…
- $103 million of transaction-related
cash tax benefits and…
- $11 million of transaction-related
after-tax book amortization.
- To calculate this measure on a
per-share basis, the company had 216.5 million weighted average
diluted shares outstanding in the fourth quarter.
- Underlying EBITDA: Increased
17.0 percent on a reported basis, and increased 14.3 percent on a
constant currency basis.
- U.S. GAAP cash from operations:
Net cash from operating activities for full year 2017 was $1.866
billion, which represents an increase of $739.4 million from actual
prior year results, driven by the addition of the other 58 percent
of MillerCoors cash flows, as well as lower cash paid for taxes and
working capital efficiencies, which were partially offset by higher
cash paid for pension funding and interest.
- Underlying free cash flow:
$1.449 billion for full year 2017, a 67.8 percent increase from
actual prior year results of $863.7 million, driven by the same
factors as cash from operations, partially offset by higher capital
expenditures.
- Debt: Total debt at the end of
2017 was $11.314 billion, and cash and cash equivalents totaled
$418.6 million, resulting in net debt of $10.895 billion. This net
debt is more than $600 million lower than at the beginning of the
year, despite $280 million of unfavorable foreign currency.
Additionally, we made $310 million of contributions to our
defined-benefit pension plans during 2017 as part of our
deleveraging goals.
Business Review- Fourth Quarter 2017
Net Sales
($ in millions) (Unaudited)
Three Months Ended
December 31,2017
December 31,2016
Reported%Increase(Decrease)
ForeignExchangeImpact($)
ConstantCurrency
%Increase(Decrease)
United States(1) $ 1,724.7 $ 1,735.6 (0.6 )% $ — (0.6 )% Canada $
352.9 $ 329.6 7.1
%
$ 16.7 2.0
%
Europe $ 473.2 $ 366.8 29.0
%
$ 35.2 19.4
%
International $ 71.4 $ 60.0 19.0
%
$ — 19.0
%
Corporate $ — $ 0.2 (100.0 )% $ — (100.0 )%
Pretax Income (U.S.
GAAP)
($ in millions) (Unaudited)
Three Months Ended
December 31,2017
December 31,2016
Reported%Increase(Decrease)
ForeignExchangeImpact($)
ConstantCurrency
%Increase(Decrease)
United States(1) $ 227.5 $ 205.3 10.8% $ (0.9 ) 11.3
%
Canada $ 42.2 $ (459.6 ) N/M $ 1.7 108.8
%
Europe $ 54.9 $ (15.6 ) N/M $ 3.4 430.1
%
International $ (7.5 ) $ (1.3 ) (476.9)% $ (0.1 ) (469.2 )%
Corporate $ (116.2 ) $ (164.4 ) 29.3% $ 1.0 28.7
%
N/M = Not meaningful
Underlying EBITDA
(Non-GAAP)(2)
($ in millions) (Unaudited)
Three Months Ended
December 31,2017
December 31,2016
Reported%Increase(Decrease)
ForeignExchangeImpact($)
ConstantCurrency
%Increase(Decrease)
United States(1) $ 346.0 $ 329.7 4.9
%
$ (0.9 ) 5.2
%
Canada $ 79.0 $ 82.5 (4.2 )% $ 3.4 (8.4 )% Europe $ 102.7 $ 28.1
265.5
%
$ 7.3 239.5
%
International $ 0.4 $ 1.4 (71.4 )% $ — (71.4 )% Corporate $ (47.8 )
$ (33.6 ) (42.3 )% $ 1.3 (46.1 )%
(1) United States fourth quarter 2016 results
are presented on a pro forma basis. (2) See Appendix for
definitions and reconciliations of non-GAAP financial measures.
United States Business
(MillerCoors) (versus Fourth Quarter 2016 Pro Forma
Results)
- Volume: U.S. domestic
sales-to-retailers volume (STRs) declined 3.0 percent for the
quarter, driven by lower volume in the Premium Light segment.
Domestic sales-to-wholesalers volume (STWs) decreased 1.5
percent.
- Revenue: Domestic net sales per
hectoliter, which excludes contract brewing and
company-owned-distributor sales, grew 1.4 percent as a result of
higher net pricing, partially offset by negative sales mix.
- Cost of goods sold (COGS) per
hectoliter increased 2.2 percent, driven by higher input costs and
volume deleverage, partially offset by cost savings.
- Marketing, general and
administrative (MG&A) expense decreased 4.1 percent due to
spending optimization and efficiencies.
- On a U.S. GAAP basis, United States
income from continuing operations before income taxes increased
10.8 percent to $227.5 million, primarily due to higher underlying
EBITDA performance and lower special charges.
- United States underlying EBITDA
increased 4.9 percent to $346.0 million, driven by higher net
pricing, cost savings and lower MG&A expenses, partially offset
by COGS inflation and lower STW volumes.
Canada Business
- Volume: Canada brand volume
increased 0.8 percent in the fourth quarter, driven by higher sales
of import and craft brands, partially offset by lower domestic
volumes. Canada financial volume, which includes contract brewing
volume, increased 1.0 percent.
- Revenue: Net sales per
hectoliter increased 1.0 percent in local currency, primarily due
to positive pricing, partially offset by negative sales mix.
- COGS per hectoliter increased
7.5 percent in local currency due to higher inflation, sales mix
shift to higher-cost products, increased distribution costs and
unfavorable transactional foreign currency impacts, partially
offset by cost savings.
- MG&A expense decreased 5.0
percent in local currency, driven primarily by lower brand
amortization and bad debt expense, as well as spending
reductions.
- On a U.S. GAAP basis, Canada
reported income from continuing operations before income
taxes of $42.2 million, compared to a loss of $459.6 million in
the prior year attributable to non-cash brand impairment charges of
$495.2 million.
- Canada underlying EBITDA
decreased 4.2 percent to $79.0 million in the quarter, driven by
higher cost of goods sold, partially offset by positive pricing,
lower MG&A expenses, and favorable foreign currency.
Europe Business
- Volume: Europe brand volume
increased 10.4 percent in the fourth quarter versus a year ago,
primarily driven by the transfer of royalty and export brand volume
across Europe from our International business, along with growth
from our above-premium brands. Europe financial volume, which
includes contract brewing and factored brands but excludes royalty
volume, increased 2.7 percent.
- Revenue: Europe net sales per
hectoliter increased 16.3 percent in local currency, due to cycling
a $50 million indirect tax provision last year, along with positive
mix and the addition of royalty and export brand revenue.
- COGS per hectoliter increased
0.6 percent in local currency, primarily driven by mix shift to
higher-cost brands and geographies, partially offset by higher net
pension benefit this year.
- MG&A expense decreased 2.8
percent in local currency, due to the partial reversal of a
bad-debt provision established earlier in 2017 related to a
customer in Croatia, along with higher net pension benefit this
year, partially offset by higher brand investments.
- On a U.S. GAAP basis, Europe
reported income from continuing operations before income
taxes of $54.9 million, up from a loss of $15.6 million last
year, which was primarily due to the $50 million indirect tax
provision. Pretax income also increased due to higher brand volume,
positive sales mix, higher net pension benefit, partial reversal of
a bad-debt provision and favorable foreign currency.
- Europe underlying EBITDA
was $102.7 million, up from $28.1 million last year, driven by the
same factors as U.S. GAAP income.
International Business
- Volume: International brand
volume decreased by 15.1 percent in the fourth quarter, driven by
the transfer of royalty and export brand volume to Europe and the
loss of the Modelo contract in Japan, partially offset by the
addition of the Puerto Rico business from MillerCoors and growth
across several Latin America markets.
- Revenue: Net sales per
hectoliter increased 6.1 percent, driven by sales mix changes and
positive pricing.
- COGS per hectoliter increased
9.7 percent, due to sales mix changes and higher
integration-related non-core costs.
- MG&A expense increased 40.8
percent, driven by higher organization and integration costs
related to the acquisition of the Miller International brands
business, along with increased brand investments.
- On a U.S. GAAP basis,
International segment reported a loss from continuing
operations before income taxes of $7.5 million versus a
loss of $1.3 million a year ago, driven by higher integration costs
related to the acquisition of the Miller International brands
business, along with the loss of the Modelo contract in Japan,
partially offset by higher volume and favorable sales mix
changes.
- International underlying EBITDA
was $0.4 million in the fourth quarter, down from $1.4 million a
year ago, driven by the loss of the Modelo contract in Japan, the
transfer of royalty and export business to Europe, and higher
MG&A from the addition of the Miller International business,
partially offset by the addition of Puerto Rico and volume growth
across several Latin American markets.
Corporate
- On a U.S. GAAP basis, Corporate loss
from continuing operations on a reported basis was $116.2
million in the fourth quarter compared to a loss of $164.4 million
in the prior year, primarily due to higher unrealized
mark-to-market gains on commodity swaps and lower costs this year
related to the Acquisition, partially offset by higher investments
in our global growth and efficiency initiatives.
- Corporate underlying EBITDA was
a loss of $47.8 million for the fourth quarter versus a $33.6
million loss in the prior year, driven primarily by higher global
investments in commercial, supply chain and information technology,
as well as unfavorable foreign currency impacts and certain cost
transfers from business units.
Worldwide Brand and Financial Volume(1)
(In millions of hectoliters) (Unaudited)
Three Months Ended
December 31,2017
December 31,2016
% Change
December 31,2016
Actual Pro forma Actual Financial
Volume(1) 23.055 23.337 (1.2 )% 21.796 Contract brewing
and wholesaler Volume (1.985 ) (2.153 ) (7.8 )% (1.981 ) Royalty
Volume 0.907 0.811 11.8
%
0.811 Sales-To-Wholesaler to Sales-To-Retail adjustment 0.380
0.614 (38.1 )% 0.762 Owned Volume 22.357
22.609 (1.1 )% 21.388 Proportionate share of Equity Investment
Worldwide Brand Volume — — —
%
0.513
Total Worldwide Brand Volume(1) 22.357
22.609 (1.1 )% 21.901
(1) See Appendix for
definitions and additional discussion regarding Financial and
Worldwide Brand Volume.
Other Results
Cost Savings Update
- The company delivered more than $255
million of synergies and other cost savings in 2017, exceeding
its original goal by more than $80 million. Total one-time costs to
capture transaction-related synergies totaled $83 million in 2017,
with approximately two-thirds of this in non-core operating expense
and one-third in capital spending.
- In part based on the increased delivery
of cost savings in 2017, the company is increasing its
three-year savings target to $600 million of all-in savings to
be delivered by 2019. For the two remaining years of the program,
the cost savings targets are $210 million in 2018 and $135 million
in 2019, which reflects the acceleration of some savings into 2017
and 2018.
- The company is also reducing its
anticipated one-time costs to capture synergies to $250
million over the three-year savings program, down from $350
million previously. This new target is expected to be approximately
60 percent non-core operating expense and 40 percent capital
spending.
Effective Income Tax Rates (versus
fourth quarter 2016 pro forma results)
Three Months Ended December 31, 2017
December 31, 2016 U.S. GAAP effective tax rate (195.0
)% (47.0 )% Underlying effective tax rate 28.8
%
16.4
%
- Our effective tax rate was
negative 195.0 percent in the fourth quarter of 2017, and was
driven by the recognition of a net discrete tax benefit related to
revaluing our deferred tax liabilities as a result of the reduction
of the federal statutory corporate income tax rate to 21 percent as
part of U.S. tax reform. A year ago, our effective tax rate
was negative due to the impact of a pretax loss driven by a Canada
brand impairment charge and change in brand life from indefinite to
definite-lived assets.
- Our underlying effective tax
rate increased to 28.8 percent from 16.4 percent a year ago,
primarily due to valuation allowance releases in the fourth quarter
of 2016.
Special and Other Non-Core
Items
The following special and other non-core items have been
excluded from underlying results. See the Appendix for
reconciliations of non-GAAP financial measures.
- During the fourth quarter, MCBC
recognized a net special charge of $3.7 million, primarily
driven by accelerated depreciation expense related to the planned
rebuilding of our Montreal and Vancouver breweries in Canada and
the planned closure of our Burton South brewery in Europe. These
charges were partially offset by a $5.4 million pension settlement
gain in the quarter related to the annuitization of more than $900
million of our U.S. plan's projected benefit obligation and a
corresponding reduction to the plan assets.
- Additionally during the fourth quarter,
we recorded other non-core net gains of $10.6 million,
primarily driven by unrealized mark-to-market gains on commodity
hedges, partially offset by costs related to the Acquisition.
- Finally, we recognized a $433.9 million
discrete tax benefit in the quarter, driven by the revaluation of
deferred tax balances and other changes resulting from recently
enacted U.S. tax reform.
Pension Accounting Change Applied
Retrospectively
During the fourth quarter of 2017, we changed our method of
calculating the market-related value of pension plan assets used to
determine net periodic pension cost and have accordingly
retrospectively applied this change, which only impacted our
consolidated, Canada and Europe results. These changes for the
fourth quarter and full year 2017 are reflected in the table below.
See the Company's 2017 10-K filing for additional detail.
($ in millions)
(Unaudited)
Three Months Ended
Twelve Months Ended December 31, 2017 December 31,
2017
Under PriorMethod
Adjustment As Adjusted
Under PriorMethod
Adjustment As Adjusted
Segment adjustments: Canada COGS $ (211.3 ) $ 0.7 $ (210.6 )
$ (850.2 ) $ 2.5 $ (847.7 ) Canada MG&A expenses $ (94.0 ) $
0.3 $ (93.7 ) $ (398.1 ) $ 1.0 $ (397.1 ) Europe COGS $ (299.5 ) $
4.9 $ (294.6 ) $ (1,166.1 ) $ 19.2 $ (1,146.9 ) Europe MG&A
expenses $ (125.1 ) $ 3.2 $ (121.9 ) $ (524.5 ) $ 12.8 $ (511.7 )
Consolidated adjustments: U.S. GAAP Pretax income(1) $ 191.8
$ 9.1 $ 200.9 $ 1,346.2 $ 35.5 $ 1,381.7 U.S. GAAP Net income(2) $
579.7 $ 8.4 $ 588.1 $ 1,383.5 $ 29.2 $ 1,412.7 Underlying
(Non-GAAP) Pretax income(1)(3) $ 184.9 $ 9.1 $ 194.0 $ 1,324.0 $
35.5 $ 1,359.5 Underlying (Non-GAAP) Net income(2)(3) $ 125.2 $ 8.4
$ 133.6 $ 939.4 $ 29.2 $ 968.6
(1)
Pretax income from continuing operations. (2) Net income
attributable to MCBC from continuing operations. (3) See Appendix
for definitions and reconciliations of non-GAAP financial measures.
2018 Outlook
The company has established the following targets for full year
2018 performance:
- Underlying free cash
flow: $1.5 billion, plus or minus 10 percent, which excludes a
$330 million cash payment received in January 2018 related to
resolving a purchase price adjustment to our October 2016
acquisition of the Miller International business.
- Transaction-related cash tax
benefits: approximately $200 million (included in free cash
flow).
- Transaction-related after-tax book
amortization: approximately $55 million.
- Cash pension contributions:
approximately $10 million.
- Capital spending: approximately
$670 million, plus or minus 10 percent.
- Cost savings: approximately $210
million in 2018, and $600 million (updated) for 2017 to 2019.
- Cost of goods sold per
hectoliter:
- MillerCoors: low-single-digit
increase.
- Canada: low-single-digit
increase (local currency).
- Europe: low-single-digit
increase (local currency).
- International business:
mid-single-digit decrease.
- Underlying Corporate MG&A
expense: approximately $180 million, plus or minus 10
percent.
- Underlying depreciation and
amortization: approximately $850 million, versus $792 million
in 2017, primarily due to planned information systems
implementations in the U.S.
- Pension income: approximately
$60 million.
- Underlying Corporate net interest
expense: approximately $330 million, plus or minus 10
percent.
- Underlying effective tax rate in
the range of 18 to 22 percent for 2018, following the enactment of
U.S. tax reform, which reduced the U.S. federal statutory corporate
income tax rate from 35 percent to 21 percent. Subject to
additional definitive guidance from the U.S. government regarding
the implementation of the recently passed tax reform legislation,
the company's preliminary view of its long-term effective tax rate
(after 2018) is in the range of 20 to 24 percent.
- In addition, our 2018 results will also
be impacted by the adoption of the new revenue recognition
standard, as well as guidance changing the presentation of pension
and other postretirement benefit (OPEB) costs.
- The new revenue recognition
accounting standard became effective for us at the beginning of
2018, and we have elected the modified retrospective method.
Therefore, prior period results will not be restated, but results
under the old standard will continue to be disclosed throughout
2018 for comparability, as required by the standard. Along with
some timing changes, we currently anticipate that this adoption
will change the presentation of our results, including a reduction
of net sales revenue and marketing, general and administrative
expenses of approximately $70 million to $90 million during 2018,
primarily within our Canada segment, with no significant impact to
net income.
- Under the new pension guidance,
we will report the service cost component of net periodic pension
and OPEB costs or income in our business segment results. Beginning
in 2018, however, all other components of net periodic pension and
OPEB cost or income will be reported in Corporate within other
income (expense), net. Prior period results for Europe, the U.S.,
Canada, International, Corporate and Consolidated will be restated
retrospectively for this change, as required by the guidance, with
no impact to consolidated net income. This accounting change
will primarily impact the reported results of our Europe segment,
where approximately $46 million of 2017 net periodic pension income
will move from Europe COGS ($27 million) and MG&A ($19 million)
to Corporate other income (expense), net.
- The impacts of these accounting changes
are discussed in further detail within footnote 2 of our 2017 Form
10-K.
Notes
Unless otherwise indicated in this release, all $ amounts are in
U.S. Dollars, and all quarterly comparative results are for the
Company’s fourth quarter or full year ended December 31, 2017,
compared to the fourth quarter or full year ended December 31, 2016
(pro forma 2016 results used for consolidated and U.S.
comparisons). 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.
As used in this release, the term “Acquisition” refers to the
Company’s acquisition from Anheuser-Busch InBev SA/NV on October
11, 2016, of SABMiller plc’s 58 percent economic interest and 50
percent voting interest in MillerCoors LLC and all trademarks,
contracts and other assets primarily related to the Miller
International business outside of the U.S. and Puerto Rico.
2017 Fourth Quarter 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 2017 fourth quarter results.
The live webcast will be accessible via the Company’s website,
www.molsoncoors.com. An online replay of the webcast will be
available until 11:59 p.m. Eastern Time on February 14, 2019. The
Company will post this release and related financial statements on
its website today.
Overview of Molson Coors
With a story that starts in 1774, Molson Coors has spent
centuries defining brewing greatness. As one of the largest global
brewers, Molson Coors works to deliver extraordinary brands that
delight the world’s beer drinkers. From Coors Light, Coors Banquet,
Miller Lite, Molson Canadian, Carling, Staropramen and Sharp’s Doom
Bar to Leinenkugel’s Summer Shandy, Blue Moon Belgian White, Hop
Valley, Creemore Springs and Crispin Cider, Molson Coors offers a
beer for every beer lover.
Molson Coors operates through Molson Coors Canada, MillerCoors
in the U.S., 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 Index for the past seven 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 “forward-looking statements” within
the meaning of the U.S. federal securities laws. Generally, the
words “believe,” “expect,” “intend,” “anticipate,” “project,”
“will,” “outlook,” 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 and our
Quarterly Reports on Form 10-Q. 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.
APPENDIX Consolidated Financial
Performance(1)
Molson Coors Brewing Company Three
Months Ended December 31, 2017 % Change ($
in millions, except per share data) (Unaudited)
U.S. GAAP
Non-GAAPAdjustments(2)
Non-GAAPUnderlying(2)
U.S. GAAP
Non-GAAPUnderlying
Net sales $ 2,579.6 $ — $
2,579.6 4.5% 4.5% Net Sales per HL change 5.8%
5.8%
Cost of goods sold $ (1,514.7 ) $ (34.5 ) $ (1,549.2 )
1.0% 3.0% Cost of goods sold per HL change 2.3% 4.3%
Gross profit $ 1,064.9 $ (34.5
) $ 1,030.4 9.9% 6.8%
Marketing, general and administrative expenses $
(775.9 ) $ 24.1 $ (751.8
) (0.1)% 0.5% Special items, net $ (3.7 ) $
3.7 $ — (99.3)% —%
Operating income (loss) $
285.3 $ (6.7 ) $ 278.6
N/M 28.6% Interest income (expense), net $ (84.9 ) $
— $ (84.9 ) (9.5)% (9.5)% Other income (expense), net $ 0.5 $ (0.2
) $ 0.3 (96.1)% (75.0)% Income (loss) from continuing operations
before income taxes $ 200.9 $ (6.9 ) $ 194.0 N/M 56.5% Income tax
benefit (expense) $ 391.7 $ (447.6 ) $ (55.9 ) N/M 175.4%
Net
income (loss)(3) $ 588.1 $
(454.5 ) $ 133.6
N/M 32.1% Per
diluted share $ 2.72 $ (2.10
) $ 0.62 N/M 31.9% Underlying
EBITDA(4) $ 480.3 17.0%
Molson Coors Brewing
Company Twelve Months Ended December 31, 2017 %
Change ($ in millions, except per share data) (Unaudited)
U.S. GAAP
Non-GAAPAdjustments(2)
Non-GAAPUnderlying(2)
U.S. GAAP
Non-GAAPUnderlying
Net sales $ 11,002.8 $ —
$ 11,002.8 0.2% 0.2% Net Sales per HL
change 2.6% 2.6%
Cost of goods sold $ (6,217.2 ) $ (112.6 )
$ (6,329.8 )
(2.4)% (1.0)% Cost of goods sold per HL
change —% 1.4%
Gross profit $ 4,785.6 $
(112.6 ) $ 4,673.0 3.7%
1.8% Marketing, general and administrative expenses
$ (3,032.4 ) $ 70.6 $
(2,961.8 ) 2.3% 0.9% Special items, net
$ (28.1 ) $ 28.1 $ — (94.7)% —%
Operating income (loss)
$ 1,725.1 $ (13.9 ) $
1,711.2 53.4% 3.2% Interest income (expense),
net $ (343.3 ) $ — $ (343.3 ) (6.9)% (6.9)% Other income (expense),
net $ (0.1 ) $ (8.3 ) $ (8.4 ) N/M (167.7)% Income (loss) from
continuing operations before income taxes $ 1,381.7 $ (22.2 ) $
1,359.5 75.2% 4.4% Income tax benefit (expense) $ 53.2 $ (421.9 ) $
(368.7 ) N/M 11.6%
Net income (loss)(3) $
1,412.7 $ (444.1 ) $ 968.6
379.5% 1.5% Per diluted share $
6.52 $ (2.05 ) $ 4.47
379.4% 1.1% Underlying EBITDA(4)
$ 2,495.1 3.7%
N/M = Not meaningful
(1) Versus comparable 2016 period Pro Forma results. (2)
Refer to the table "Actual and Pro Forma Condensed Consolidated
Statements of Operations" for detailed descriptions and
reconciliation of non-GAAP adjustments and 2016 results. (3) Net
income (loss) attributable to MCBC from continuing operations. (4)
EBITDA is earnings before interest, taxes, depreciation and
amortization, a non-GAAP financial measure.
Pro Forma
Information
We have presented consolidated and U.S. segment pro forma
information in this release 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, 2016. Our
consolidated pro forma financial statements have been restated
retrospectively to reflect our change in the method of calculating
the market-related value of pension plan assets used to determine
net periodic pension cost, as described above. Our U.S. segment pro
forma information has been updated from the version previously
provided on February 14, 2017, to reflect the removal of the Puerto
Rico business effective as of January 1, 2017, from the results of
the MillerCoors business, which were previously reported as part of
the U.S. segment, and are now reported within the International
segment. 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. 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 and the related financing occurred at the date
indicated, nor does this information project the results of
operations of MCBC for any future dates or periods.
Actual and Pro Forma Worldwide Brand and Financial Volumes
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 brands sold to
unrelated external customers within our geographic markets, net of
returns and allowances.
Worldwide brand volume reflects only owned 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 brand volume calculated consistently
with MCBC owned volume. Actual 2017 and 2016 pro forma worldwide
brand volumes include 100 percent of MillerCoors brand volume.
Contract brewing and wholesaler volume is included within financial
volume as noted above, but is removed from worldwide brand volume
as this is non-owned volume for which we do not directly control
performance. We also modified our worldwide brand volume definition
to include an adjustment from Sales-to-Wholesaler (STW) volume to
Sales-to-Retailer (STR) volume. We believe the STR metric is
important because, unlike STWs, it provides the closest indication
of the performance of our brands in relation to market and
competitor sales trends. Prior periods presented have been revised
to reflect these changes. We believe this definition of worldwide
brand volume more closely aligns with how we measure the
performance of our owned brands within the markets in which they
are sold. Effective January 1, 2017, European markets, including
Sweden, Spain, Germany, Ukraine and Russia, which were previously
reported under our International segment, are now presented within
our Europe segment. Additionally, effective January 1, 2017, the
results of the MillerCoors Puerto Rico business, which were
previously reported as part of the U.S. segment, are now reported
within the International segment.
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 "underlying pretax and net
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, as well as underlying EBITDA
margin, which is calculated by dividing underlying EBITDA by U.S.
GAAP net sales. Our management uses underlying income, underlying
income per diluted share, underlying EBITDA (and margin), 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 margin), 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 historical 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.
Our guidance for underlying Corporate MG&A, underlying
depreciation and amortization, underlying free cash flow,
underlying effective tax rate, and underlying Corporate net
interest expense are also non-GAAP financial measures that exclude
or otherwise have been adjusted for 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. We are unable to reconcile the
above described guidance measures to their nearest U.S. GAAP
measures without unreasonable efforts because we are unable to
predict with a reasonable degree of certainty the actual impact of
the special and other non-core items. By their very nature, special
and other non-core items are difficult to anticipate with precision
because they are generally associated with unexpected and unplanned
events that impact our company and its financial results.
Therefore, we are unable to provide a reconciliation of these
measures.
Reconciliations to Nearest U.S. GAAP Measures
Underlying Actual and Pro Forma
EBITDA
($ in millions) (Unaudited)
Three Months Ended
December 31,2017
December 31,2016
% change
December 31,2016
Actual Pro forma Actual U.S. GAAP:
Net
income (loss) attributable to MCBC from continuing operations
$ 588.1 $ (607.2 ) N/M
$
1,439.8 Add: Net income (loss) attributable to
noncontrolling interests 4.5 2.6 73.1% 2.2
U.S. GAAP:
Net income (loss) from continuing operations
592.6 (604.6 ) N/M 1,442.0 Add: Interest expense (income), net 84.9
93.8 (9.5)% 90.0 Add: Income tax expense (benefit) (391.7 ) 193.4
N/M 996.3 Add: Depreciation and amortization 208.5 195.9 6.4% 184.1
Adjustments included in underlying income(1) (6.9 ) 535.2 N/M
(2,319.3 ) Adjustments to arrive at underlying EBITDA(2) (7.1 )
(3.1 ) 129.0% (6.9 ) Adjustments to arrive at underlying EBITDA
related to our investment in MillerCoors(3) — — —%
4.2 Non-GAAP:
Underlying EBITDA $ 480.3
$ 410.6 17.0%
$ 390.4
($ in millions) (Unaudited)
Twelve Months Ended
December 31,2017
December 31,2016
% change
December 31,2016
Actual Pro forma Actual U.S. GAAP:
Net
income (loss) attributable to MCBC from continuing operations
$ 1,412.7 $ 294.6 379.5%
$
1,995.8 Add: Net income (loss) attributable to
noncontrolling interests 22.2 16.9 31.4% 5.9
U.S. GAAP:
Net income (loss) from continuing operations
1,434.9 311.5 360.6% 2,001.7 Add: Interest expense (income), net
343.3 368.8 (6.9)% 244.4 Add: Income tax expense (benefit) (53.2 )
477.2 N/M 1,055.2 Add: Depreciation and amortization 812.8 851.4
(4.5)% 388.4 Adjustments included in underlying income(1) (22.2 )
513.2 N/M (2,240.0 ) Adjustments to arrive at underlying EBITDA(2)
(20.5 ) (115.6 ) (82.3)% (89.2 ) Adjustments to arrive at
underlying EBITDA related to our investment in MillerCoors(3) —
— —% 142.7 Non-GAAP:
Underlying EBITDA
$ 2,495.1 $ 2,406.5 3.7%
$ 1,503.2
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.
Underlying Free Cash
Flow
(In millions) (Unaudited)
Actual Twelve Months Ended December
31, 2017 December 31, 2016(5) U.S.
GAAP:
Net Cash Provided by (Used In) Operating Activities
$ 1,866.3 $ 1,126.9 Less: Additions to
properties(1) (599.6 ) (341.8 ) Less: Investment in MillerCoors(1)
— (1,253.7 ) Add: Return of capital from MillerCoors(1) — 1,086.9
Add: Cash impact of special items(2) 89.5 24.3 Add: Non-core costs
related to acquisition of businesses(3) 92.8 151.2 Add: MillerCoors
investments in businesses(4) — 65.6 Add: MillerCoors cash impact of
special items(4) — 4.3 Non-GAAP:
Underlying Free
Cash Flow $ 1,449.0 $ 863.7
(1) Included in
net cash used in investing activities. (2) Included in net cash
provided by (used in) operating activities and primarily reflects
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 International brand portfolio,
including $60.9 million of cash paid for income taxes in 2016. (4)
Amounts represent our proportionate 42% share of the cash flow
impacts for the pre-Acquisition period January 1, 2016, through
October 10, 2016. (5) 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.
Statements of Operations - Molson
Coors Brewing Company and Subsidiaries
Actual and Pro Forma Condensed
Consolidated Statements of Operations
(In millions, except per share data)
(Unaudited)
Three Months Ended
December 31,2017
December 31, 2016 Actual Pro
forma Actual Financial volume in
hectoliters(1) 23.055 23.337 21.796 Sales $
3,211.7 $ 3,100.1 $ 2,901.9 Excise taxes (632.1 ) (632.1 ) (607.9 )
Net sales 2,579.6 2,468.0 2,294.0 Cost of goods sold (1,514.7 )
(1,499.2 ) (1,481.9 ) Gross profit 1,064.9 968.8 812.1 Marketing,
general and administrative expenses (775.9 ) (776.5 ) (752.1 )
Special items, net (3.7 ) (522.6 ) 2,443.4 Equity income in
MillerCoors — — 9.7 Operating income (loss)
285.3 (330.3 ) 2,513.1 Interest income (expense), net (84.9 ) (93.8
) (90.0 ) Other income (expense), net 0.5 12.9 15.2
Income (loss) from continuing operations before income taxes
200.9 (411.2 ) 2,438.3 Income tax benefit (expense) 391.7
(193.4 ) (996.3 ) Net income (loss) from continuing operations
592.6 (604.6 ) 1,442.0 Income (loss) from discontinued operations,
net of tax 0.7 (0.5 ) (0.5 ) Net income (loss) including
noncontrolling interests 593.3 (605.1 ) 1,441.5 Net (income) loss
attributable to noncontrolling interests (4.5 ) (2.6 ) (2.2 ) Net
income (loss) attributable to MCBC $ 588.8 $ (607.7 ) $
1,439.3 Basic net income (loss) attributable to MCBC
per share: From continuing operations $ 2.73 $ (2.83 ) $ 6.70 From
discontinued operations — — — Basic net income
(loss) attributable to MCBC per share $ 2.73 $ (2.83 ) $
6.70 Diluted net income (loss) attributable to MCBC
per share: From continuing operations $ 2.72 $ (2.83 ) $ 6.65 From
discontinued operations — — — Diluted net
income (loss) attributable to MCBC per share $ 2.72 $ (2.83
) $ 6.65 Weighted average shares - basic 215.5 214.8
214.8 Weighted average shares - diluted 216.5 214.8 216.4
Dividends per share $ 0.41 $ 0.41 Amounts
attributable to MCBC Net income (loss) from continuing operations $
588.1 $ (607.2 ) $ 1,439.8 Income (loss) from discontinued
operations, net of tax 0.7 (0.5 ) (0.5 ) Net income (loss)
attributable to MCBC $ 588.8 $ (607.7 ) $ 1,439.3
(1)
Historical financial volumes have been recast to reflect the
impacts of aligning policies on reporting financial volumes as a
result of the Acquisition. See "Actual and Pro Forma Worldwide
Brand and Financial Volume" above for further details.
(In millions, except per share data)
(Unaudited)
Twelve Months Ended
December 31,2017
December 31, 2016 Actual Pro
forma Actual Financial volume in
hectoliters(1) 99.563 101.934 46.912 Sales $
13,471.5 $ 13,545.1 $ 6,597.4 Excise taxes (2,468.7 ) (2,561.9 )
(1,712.4 ) Net sales 11,002.8 10,983.2 4,885.0 Cost of goods sold
(6,217.2 ) (6,367.6 ) (2,987.5 ) Gross profit 4,785.6 4,615.6
1,897.5 Marketing, general and administrative expenses (3,032.4 )
(2,962.8 ) (1,589.8 ) Special items, net (28.1 ) (528.2 ) 2,522.4
Equity income in MillerCoors — — 500.9
Operating income (loss) 1,725.1 1,124.6 3,331.0 Interest income
(expense), net (343.3 ) (368.8 ) (244.4 ) Other income (expense),
net (0.1 ) 32.9 (29.7 ) Income (loss) from continuing
operations before income taxes 1,381.7 788.7 3,056.9 Income tax
benefit (expense) 53.2 (477.2 ) (1,055.2 ) Net income (loss)
from continuing operations 1,434.9 311.5 2,001.7 Income (loss) from
discontinued operations, net of tax 1.5 (2.8 ) (2.8 ) Net
income (loss) including noncontrolling interests 1,436.4 308.7
1,998.9 Net (income) loss attributable to noncontrolling interests
(22.2 ) (16.9 ) (5.9 ) Net income (loss) attributable to MCBC $
1,414.2 $ 291.8 $ 1,993.0 Basic net
income (loss) attributable to MCBC per share: From continuing
operations $ 6.56 $ 1.37 $ 9.41 From discontinued operations 0.01
— (0.01 ) Basic net income (loss) attributable to
MCBC per share $ 6.57 $ 1.37 $ 9.40
Diluted net income (loss) attributable to MCBC per share: From
continuing operations $ 6.52 $ 1.36 $ 9.35 From discontinued
operations 0.01 — (0.01 ) Diluted net income (loss)
attributable to MCBC per share $ 6.53 $ 1.36 $ 9.34
Weighted average shares - basic 215.4 214.7 212.0
Weighted average shares - diluted 216.5 216.1 213.4
Dividends per share $ 1.64 $ 1.64 Amounts
attributable to MCBC Net income (loss) from continuing operations $
1,412.7 $ 294.6 $ 1,995.8 Income (loss) from discontinued
operations, net of tax 1.5 (2.8 ) (2.8 ) Net income (loss)
attributable to MCBC $ 1,414.2 $ 291.8 $ 1,993.0
(1)
Historical financial volumes have been recast to reflect the
impacts of aligning policies on reporting financial volumes as a
result of the Acquisition. See "Actual and Pro Forma Worldwide
Brand and Financial Volume" above for further details.
Molson Coors Brewing Company and SubsidiariesU.S. Actual and Pro Forma Results of
Operations
(In millions) (Unaudited)
Three Months Ended
December 31, 2017
December 31, 2016 Actual Pro
forma(1) Actual(2) Financial
volume in hectoliters(3)(4) 15.606 15.997 15.997
Sales(4) $ 1,963.0 $ 1,973.2 $ 1,979.1 Excise taxes (238.3 )
(237.6 ) (237.6 ) Net sales(4) 1,724.7 1,735.6 1,741.5 Cost of
goods sold(4)(7) (1,040.5 ) (1,044.2 ) (1,125.1 ) Gross profit
684.2 691.4 616.4 Marketing, general and administrative expenses
(460.1 ) (479.9 ) (482.1 ) Special items, net(5) 5.3 (6.9 )
2,958.1 Operating income 229.4 204.6 3,092.4 Interest income
(expense), net (0.9 ) — — Other income (expense), net (1.0 ) 0.7
0.7 Income (loss) from continuing operations before
income taxes $ 227.5 $ 205.3 $ 3,093.1 Add/(less): Special items,
net(5) (5.3 ) 6.9 (2,958.1 ) Acquisition and integration related
costs(6) 0.7 — — Other non-core items(7) — — 82.0
Non-GAAP: Underlying pretax income (loss) $ 222.9 $ 212.2 $
217.0 Add: Interest expense (income), net 0.9 — — Add: Depreciation
and amortization 122.2 117.5 114.6 Adjustments to arrive at
underlying EBITDA(8) — — — Non-GAAP:
Underlying EBITDA $ 346.0 $ 329.7 $ 331.6
(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 financial
volumes have been recast to reflect the impacts of aligning
policies on reporting financial volumes as a result of the
Acquisition. See "Actual and Pro Forma Worldwide Brand and
Financial Volume" above for further details. (4) On a reported
basis, includes gross inter-segment sales and volumes that are
eliminated in the consolidated totals. (5) 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. For the three months ended December 31, 2017,
we recognized a pension settlement gain of $5.4 million within
special items. For the three months ended December 31, 2016, actual
special items include net gain of approximately $3.0 billion,
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. (6) For the three months ended December 31,
2017, $0.6 million of integration costs were incurred in cost of
goods sold and $0.1 million of integration costs were incurred in
marketing, general & administrative expenses. (7) 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. (8) 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. (In millions)
(Unaudited)
Twelve Months Ended December
31, 2017 December 31, 2016 Actual
Pro forma(1) Actual(2)
Financial volume in hectoliters(3)(4) 67.731 70.186
70.186 Sales(4) $ 8,541.7 $ 8,744.0 $ 8,767.2 Excise taxes
(1,036.0 ) (1,062.9 ) (1,075.2 ) Net sales(4) 7,505.7 7,681.1
7,692.0 Cost of goods sold(4)(7) (4,331.5 ) (4,445.6 ) (4,483.4 )
Gross profit 3,174.2 3,235.5 3,208.6 Marketing, general and
administrative expenses (1,782.1 ) (1,871.4 ) (1,844.1 ) Special
items, net(5) (9.9 ) (91.5 ) 2,873.5 Operating income
1,382.2 1,272.6 4,238.0 Interest income (expense), net 13.1 (1.4 )
(1.4 ) Other income (expense), net (2.4 ) 4.4 4.4
Income (loss) from continuing operations before income taxes $
1,392.9 $ 1,275.6 $ 4,241.0 Add/(less): Special items, net(5) 9.9
91.5 (2,873.5 ) Acquisition and integration related costs(6) 7.5 —
— Other non-core items(7) — — 82.0 Non-GAAP:
Underlying pretax income (loss) $ 1,410.3 $ 1,367.1 $ 1,449.5 Add:
Interest expense (income), net (13.1 ) 1.4 1.4 Add: Depreciation
and amortization 485.7 568.7 466.1 Adjustments to arrive at
underlying EBITDA(8) — (103.2 ) (103.2 ) Non-GAAP:
Underlying EBITDA $ 1,882.9 $ 1,834.0 $ 1,813.8
(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 financial
volumes have been recast to reflect the impacts of aligning
policies on reporting financial volumes as a result of the
Acquisition. See "Actual and Pro Forma Worldwide Brand and
Financial Volume" above for further details. (4) On a reported
basis, includes gross inter-segment sales and volumes that are
eliminated in the consolidated totals. (5) 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. For the twelve months ended December 31, 2017,
we recognized a pension settlement gain of $5.4 million within
special items, offset by costs related to the closure of the Eden
brewery. For the twelve months ended December 31, 2016, actual
special items include net gain of approximately $3.0 billion 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. Results include net special charges primarily related to
the closure of the Eden, North Carolina, brewery, which for the
twelve months ended December 31, 2016, includes $103.2 million of
accelerated depreciation in excess of normal depreciation
associated with the brewery closure. Special items during the
twelve months ended December 31, 2016, also include a
postretirement benefit curtailment gain of $25.7 million related to
the closure of the Eden brewery. These accelerated depreciation
charges are included in our adjustments to arrive at underlying
EBITDA. (6) For the twelve months ended December 31, 2017, $2.4
million of integration costs were incurred in cost of goods sold
and $5.1 million of integration costs were incurred in marketing,
general & administrative expenses. (7) As a result of the
Acquisition, a step-up in fair value of inventory was recorded to
cost of goods sold in the fourth quarter of 2016. See Part II—Item
8 Financial Statements and Supplementary Data, Note 4, "Acquisition
and Investments" of the Form 10-K for detailed discussion. (8)
Represents adjustments to remove amounts related to interest,
depreciation and amortization included in the adjustments to
non-GAAP underlying income above, as these items are added back as
adjustments to net income attributable to MCBC from continuing
operations.
Molson Coors Brewing Company and SubsidiariesUnderlying Equity Income in MillerCoors
($ in millions)
(Unaudited)
For the periodOctober 1
throughOctober 10
For the periodJanuary 1
throughOctober 10
2016 2016 Income (loss) from continuing operations
before income taxes $ 23.6 $ 1,171.5 Income tax expense — (3.3 )
Net (income) loss attributable to noncontrolling interest (0.4 )
(11.0 ) Net income attributable to MillerCoors $ 23.2 $ 1,157.2
MCBC economic interest 42 % 42 % MCBC proportionate share of
MillerCoors net income 9.7 486.0
Amortization of the difference between
MCBC contributed cost basis andproportionate share of the
underlying equity in net assets of MillerCoors
— 3.3 Share-based compensation adjustment(1) — (0.7 ) U.S. import
tax benefit(2) — 12.3 Equity income in MillerCoors $
9.7 $ 500.9 Add/(less): MCBC proportionate share of MillerCoors
special items, net of tax(3) 0.4 35.9 Non-GAAP:
Underlying Equity Income in MillerCoors $ 10.1 $ 536.8
(1) The net adjustment is to eliminate
all share-based compensation impacts related to pre-existing
SABMiller equity awards held by former Miller Brewing Company
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. (3) Results include net special charges primarily related
to the closure of the Eden, North Carolina, brewery. For the
pre-Acquisition period 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.
Molson Coors Brewing Company and SubsidiariesCanada Results of Operations
(In millions)
(Unaudited)
Three Months Ended
Twelve Months Ended December 31, 2017
December 31, 2016 December 31, 2017
December 31, 2016 Financial volume in hectoliters(1)(2)
2.087 2.067 8.805 8.950 Sales(2) $
466.0 $ 432.9 $ 1,906.2 $ 1,879.4 Excise taxes (113.1 ) (103.3 )
(448.2 ) (453.7 ) Net sales(2) 352.9 329.6 1,458.0 1,425.7 Cost of
goods sold(2) (210.6 ) (185.0 ) (847.7 ) (793.2 ) Gross profit
142.3 144.6 610.3 632.5 Marketing, general and administrative
expenses (93.7 ) (94.1 ) (397.1 ) (361.6 ) Special items, net(3)
(6.3 ) (510.9 ) (11.5 ) (404.3 ) Operating income (loss) 42.3
(460.4 ) 201.7 (133.4 ) Other income (expense), net (0.1 ) 0.8
11.1 7.8 Income (loss) from continuing
operations before income taxes $ 42.2 $ (459.6 ) $ 212.8 $ (125.6 )
Add/(less): Special items, net(3) 6.3 510.9 11.5 404.3 Acquisition
and integration related costs(4) 0.8 — 4.1 — Other non-core
items(5) (0.2 ) — (8.3 ) — Non-GAAP: Underlying
pretax income (loss) $ 49.1 $ 51.3 $ 220.1 $ 278.7 Add:
Depreciation and amortization 35.9 32.5 131.2 98.4 Adjustments to
arrive at underlying EBITDA(6) (6.0 ) (1.3 ) (14.4 ) (4.9 )
Non-GAAP: Underlying EBITDA $ 79.0 $ 82.5 $ 336.9
$ 372.2
(1) Historical
financial volumes have been recast to reflect the impacts of
aligning policies on reporting financial volumes as a result of the
Acquisition. See "Actual and Pro Forma Worldwide Brand and
Financial Volume" above for further details. (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, 2017, includes
accelerated depreciation expense of $0.9 million and $4.1 million,
respectively, related to the planned closure of the Vancouver
brewery. Also incurred in the three and twelve months ended
December 31, 2017, are accelerated depreciation charges in excess
of normal deprecation of $5.1 million and $10.3 million,
respectively, related to the planned closure of our existing
Montreal brewery. 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. These accelerated
depreciation charges are included in our adjustments to arrive at
underlying EBITDA. (4) For the three and twelve months ended
December 31, 2017, $0.8 million and $4.1 million, respectively, of
acquisition and integration related costs were incurred in cost of
goods sold. (5) For the twelve months ended December 31, 2017, a
gain of $8.3 million was recorded in other income (expense), net
resulting from a purchase price adjustment related to the
historical sale of Molson Inc.’s ownership interest in the Montreal
Canadiens. (6) 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.
Molson Coors Brewing Company and SubsidiariesEurope Results of Operations
(In millions)
(Unaudited)
Three Months Ended
Twelve Months Ended December 31, 2017
December 31, 2016 December 31, 2017
December 31, 2016 Financial volume in hectoliters(1)(2)
5.401 5.260 23.290 22.590 Sales(2) $
746.5 $ 652.2 $ 2,888.3 $ 2,778.1 Excise taxes (273.3 ) (285.4 )
(947.6 ) (1,017.9 ) Net sales(2) 473.2 366.8 1,940.7 1,760.2 Cost
of goods sold (294.6 ) (264.0 ) (1,146.9 ) (1,116.2 ) Gross profit
178.6 102.8 793.8 644.0 Marketing, general and administrative
expenses (121.9 ) (115.4 ) (511.7 ) (506.6 ) Special items, net(3)
(2.6 ) (3.8 ) (5.0 ) (0.6 ) Operating income (loss) 54.1 (16.4 )
277.1 136.8 Interest income, net 0.8 0.9 3.6 3.6 Other income
(expense), net — (0.1 ) 0.3 9.3 Income (loss)
from continuing operations before income taxes $ 54.9 $ (15.6 ) $
281.0 $ 149.7 Add/(less): Special items, net(3) 2.6 3.8 5.0 0.6
Acquisition and integration related costs(4) 0.2 — 0.6 — Other
non-core items(5) — — — (8.8 ) Non-GAAP:
Underlying pretax income (loss) $ 57.7 $ (11.8 ) $ 286.6 $ 141.5
Add: Interest expense (income), net (0.8 ) (0.9 ) (3.6 ) (3.6 )
Add: Depreciation and amortization 46.9 42.6 182.3 175.7
Adjustments to arrive at underlying EBITDA(6) (1.1 ) (1.8 ) (6.1 )
(7.5 ) Non-GAAP: Underlying EBITDA $ 102.7 $ 28.1 $
459.2 $ 306.1
(1)
Historical financial volumes have been recast to reflect the
impacts of aligning policies on reporting financial volumes as a
result of the Acquisition. See "Actual and Pro Forma Worldwide
Brand and Financial Volume" above for further details. (2) Reflects
gross segment sales which are eliminated in the consolidated
totals. Excludes royalty volume of 0.417 million hectoliters and
1.694 million hectoliters for the three and twelve months ended
December 31, 2017, and excludes royalty volume of 0.057 million
hectoliters and 0.194 million hectoliters for the three and twelve
months ended December 31, 2016, respectively. (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,
2017, includes accelerated depreciation expense of $1.1 million and
$6.1 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, 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. These accelerated depreciation charges are
included in our adjustments to arrive at underlying EBITDA. (4) For
the three and twelve months ended December 31, 2017, $0.2 million
and $0.6 million, respectively, of acquisition and integration
related costs were incurred in cost of goods sold. (5) 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. (6) 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.
Molson Coors Brewing Company and SubsidiariesInternational Results of Operations
(In millions)
(Unaudited)
Three Months Ended
Twelve Months Ended December 31, 2017
December 31, 2016 December 31, 2017
December 31, 2016 Financial volume in hectoliters(1)(2)
0.620 0.553 2.394 1.495 Sales $ 78.8 $
65.8 $ 300.9 $ 191.0 Excise taxes (7.4 ) (5.8 ) (36.9 ) (27.4 ) Net
sales 71.4 60.0 264.0 163.6 Cost of goods sold(3) (49.8 ) (40.5 )
(180.5 ) (107.1 ) Gross profit 21.6 19.5 83.5 56.5 Marketing,
general and administrative expenses (29.0 ) (20.6 ) (101.7 ) (65.3
) Special items, net(4) (0.1 ) (0.3 ) (1.6 ) (31.1 ) Operating
income (loss) (7.5 ) (1.4 ) (19.8 ) (39.9 ) Other income (expense),
net — 0.1 0.1 0.2 Income (loss) from
continuing operations before income taxes $ (7.5 ) $ (1.3 ) $ (19.7
) $ (39.7 ) Add/(less): Special items, net(4) 0.1 0.3 1.6 31.1
Acquisition and integration related costs(5) 5.4 —
12.0 — Non-GAAP: Underlying pretax income (loss) $
(2.0 ) $ (1.0 ) $ (6.1 ) $ (8.6 ) Add: Depreciation and
amortization 2.4 2.4 9.6 5.1 Non-GAAP:
Underlying EBITDA $ 0.4 $ 1.4 $ 3.5 $ (3.5 )
(1) Historical financial volumes have
been recast to reflect the impacts of aligning policies on
reporting financial volumes as a result of the Acquisition. See
"Actual and Pro Forma Worldwide Brand and Financial Volume" above
for further details. (2) Excludes royalty volume of 0.490 million
hectoliters and 1.991 million hectoliters for the three and twelve
months ended December 31, 2017, and excludes royalty volume of
0.754 million hectoliters and 1.908 million hectoliters for the
three and twelve months ended December 31, 2016, 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. (5) For the three and
twelve months ended December 31, 2017, $2.2 million and $3.6
million, respectively, of integration costs were incurred in cost
of goods sold, and for the three and twelve months ended December
31, 2017, $3.2 million and $8.4 million, respectively, of
integration costs were incurred in marketing, general &
administrative expenses.
Molson Coors Brewing Company and SubsidiariesCorporate Results of Operations
(In millions)
(Unaudited)
Three Months Ended
Twelve Months Ended December 31, 2017
December 31, 2016 December 31, 2017
December 31, 2016 Financial volume in hectoliters — —
— — Sales $ — $ 0.2 $ 0.9 $ 1.0 Excise taxes —
— — — Net sales — 0.2 0.9 1.0 Cost of
goods sold 38.2 4.4 122.9 22.9 Gross
profit 38.2 4.6 123.8 23.9 Marketing, general and administrative
expenses (71.2 ) (91.1 ) (239.8 ) (225.4 ) Special items, net(1) —
(0.7 ) (0.1 ) (0.7 ) Operating income (loss) (33.0 ) (87.2 )
(116.1 ) (202.2 ) Interest expense, net (84.8 ) (90.9 ) (360.0 )
(248.0 ) Other income (expense), net 1.6 13.7 (9.2 )
(47.7 ) Income (loss) from continuing operations before income
taxes $ (116.2 ) $ (164.4 ) $ (485.3 ) $ (497.9 ) Add/(less):
Special items, net(1) — 0.7 0.1 0.7 Acquisition and integration
related costs(2) 20.8 58.1 57.1 244.0 Unrealized mark-to-market
(gains) and losses(3) (38.3 ) (4.3 ) (123.3 ) (23.1 ) Other
non-core items(4) — (11.7 ) — (11.7 ) Non-GAAP:
Underlying pretax income (loss) $ (133.7 ) $ (121.6 ) $ (551.4 ) $
(288.0 ) Add: Interest expense (income), net 84.8 90.9 360.0 248.0
Add: Depreciation and amortization 1.1 0.9 4.0 3.5 Adjustments to
arrive at underlying EBITDA(5) — (3.8 ) — (76.8 )
Non-GAAP: Underlying EBITDA $ (47.8 ) $ (33.6 ) $ (187.4 ) $ (113.3
)
(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, 2017, we recorded $20.8 million and $57.1
million, respectively, of transaction related costs recorded within
marketing, general & administrative expenses. For the three and
twelve months ended December 31, 2016, we 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. (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, 2017, and December 31, 2016,
include the unrealized mark-to-market on these commodity swaps. (4)
A gain of $11.7 million was recognized in other income (expense)
during the three and twelve months ended December 31, 2016, for the
sale of a non-operating asset. (5) Represents adjustments to remove
amounts related to interest, depreciation and amortization included
in the adjustments to non-GAAP underlying income above, as these
items are added back as adjustments to net income attributable to
MCBC from continuing operations.
Balance Sheet
Consolidated Balance
Sheets
($ in millions, except par value)
(Unaudited)
As of December 31, 2017
December 31, 2016 Assets Current
assets: Cash and cash equivalents $ 418.6 $ 560.9 Accounts and
other receivables: Trade, less allowance for doubtful accounts of
$17.2 and $10.7, respectively 728.3 654.4 Affiliate receivables 5.5
15.1 Other receivables, less allowance for doubtful accounts of
$0.5 and $0.6, respectively 168.2 135.8 Inventories, less allowance
for obsolete inventories of $8.1 and $3.3, respectively 591.5 592.7
Other current assets, net 277.6 210.7 Total current
assets 2,189.7 2,169.6 Properties, less accumulated depreciation of
$2,096.6 and $1,499.3, respectively 4,673.7 4,507.4 Goodwill
8,405.5 8,250.1 Other intangibles, less accumulated amortization of
$662.3 and $404.0, respectively 14,296.5 14,031.9 Other assets
681.5 382.5 Total assets $ 30,246.9 $ 29,341.5
Liabilities and equity Current liabilities: Accounts
payable and other current liabilities (includes affiliate payable
amounts of $0.4 and $2.1, respectively) $ 2,679.6 $ 2,467.7 Current
portion of long-term debt and short-term borrowings 714.8 684.8
Discontinued operations 4.9 5.0 Total current
liabilities 3,399.3 3,157.5 Long-term debt 10,598.7 11,387.7
Pension and postretirement benefits 848.5 1,196.0 Deferred tax
liabilities 1,648.6 1,699.0 Other liabilities 304.4 267.0
Discontinued operations 12.4 12.6 Total liabilities
16,811.9 17,719.8 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: 204.7 shares and
203.7 shares, respectively) 2.0 2.0 Class A exchangeable shares, no
par value (issued and outstanding: 2.9 shares and 2.9 shares,
respectively) 107.7 108.1 Class B exchangeable shares, no par value
(issued and outstanding: 14.7 shares and 15.2 shares, respectively)
553.2 571.2 Paid-in capital 6,688.5 6,635.3 Retained earnings
7,206.1 6,145.3 Accumulated other comprehensive income (loss)
(860.0 ) (1,571.8 ) 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 13,226.1 11,418.7
Noncontrolling interests 208.9 203.0 Total equity
13,435.0 11,621.7 Total liabilities and equity $
30,246.9 $ 29,341.5
Cash
Flow Statement
Consolidated Statements of Cash
Flows
($ in millions) (Unaudited)
Twelve Months Ended December 31, 2017
December 31, 2016 Cash flows from operating
activities: Net income (loss) including noncontrolling interests $
1,436.4 $ 1,998.9 Adjustments to reconcile net income (loss) 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 812.8 388.4 Amortization
of debt issuance costs and discounts 23.2 66.5 Share-based
compensation 58.3 29.9 (Gain) loss on sale or impairment of
properties and other assets, net (0.4 ) 396.0 Equity income in
MillerCoors — (488.6 ) Distributions from MillerCoors — 488.6
Unrealized (gain) loss on foreign currency fluctuations and
derivative instruments, net (122.8 ) (23.5 ) Income tax (benefit)
expense (53.2 ) 1,055.2 Income tax (paid) received 86.0 (165.0 )
Interest expense, excluding interest amortization 338.8 262.3
Interest paid (350.3 ) (162.5 ) Pension expense (benefit) (67.8 )
(11.6 ) Pension contributions paid (310.0 ) (12.1 ) Change in
current assets and liabilities (net of impact of business
combinations) and other: Receivables (7.2 ) 65.6 Inventories 21.3
(23.2 ) Payables and other current liabilities 31.0 144.9 Other
assets and other liabilities (28.3 ) (2.7 ) (Gain) loss from
discontinued operations (1.5 ) 2.8 Net cash provided by
operating activities 1,866.3 1,126.9 Cash flows from
investing activities: Additions to properties (599.6 ) (341.8 )
Proceeds from sales of properties and other assets 60.5 174.5
Acquisition of businesses, net of cash acquired — (11,961.0 )
Investment in MillerCoors — (1,253.7 ) Return of capital from
MillerCoors — 1,086.9 Other 0.9 8.5 Net cash used in
investing activities (538.2 ) (12,286.6 ) Cash flows from financing
activities: Proceeds from issuance of common stock, net — 2,525.6
Exercise of stock options under equity compensation plans 4.0 11.2
Dividends paid (353.4 ) (352.9 ) Payments on debt and borrowings
(3,000.1 ) (223.9 ) Proceeds on debt and borrowings 1,536.0 9,460.6
Debt issuance costs (7.0 ) (60.7 ) Net proceeds from (payments on)
revolving credit facilities and commercial paper 374.3 (1.1 )
Change in overdraft balances and other (50.2 ) (40.9 ) Net cash
provided by (used in) financing activities (1,496.4 ) 11,317.9
Cash and cash equivalents: Net increase (decrease) in cash
and cash equivalents (168.3 ) 158.2 Effect of foreign exchange rate
changes on cash and cash equivalents 26.0 (28.2 ) Balance at
beginning of year 560.9 430.9 Balance at end of year
$ 418.6 $ 560.9
Reconciliations to Nearest U.S. GAAP Measures by Line Item
Fourth Quarter 2017
Three Months Ended December 31, 2017 ($ in millions)
(Unaudited)
Net sales
Cost of
goodssold(1)
Gross profit
Marketing,general
andadministrativeexpenses(2)
Special
items,net(3)
Operating income(loss)
Reported (U.S. GAAP) $ 2,579.6 $ (1,514.7 ) $ 1,064.9 $
(775.9 ) $ (3.7 ) $ 285.3 Adjustments to arrive at underlying:
Special items, net Employee-related charges — — — — (4.9 ) (4.9 )
Impairments or asset abandonment charges — — — — 8.4 8.4
Termination fees and other (gains) losses — — — — 0.2 0.2 Non-Core
items Acquisition and integration related costs — 3.8 3.8 24.1 —
27.9 Unrealized mark-to-market (gains) losses — (38.3 )
(38.3 ) — — (38.3 )
Underlying (Non-GAAP) $
2,579.6 $ (1,549.2 ) $ 1,030.4 $ (751.8 ) $ —
$ 278.6
Fourth Quarter 2017 Three Months
Ended December 31, 2017 ($ in millions, except per share data)
(Unaudited)
Interestincome(expense),net
Otherincome(expense),net
Income
(loss)fromcontinuingoperationsbefore
incometaxes
Income
taxbenefit(expense)
Net income (loss)attributable
toMCBC fromcontinuingoperations
Net income (loss)attributable
toMCBC fromcontinuing operations perdiluted
share
Reported (U.S. GAAP) $ (84.9 ) $ 0.5 $ 200.9 $ 391.7 $ 588.1
$ 2.72 Adjustments to arrive at underlying: Special items, net
Employee-related charges — — (4.9 ) — (4.9 ) (0.02 ) Impairments or
asset abandonment charges — — 8.4 — 8.4 0.03 Termination fees and
other (gains) losses — — 0.2 — 0.2 — Non-Core items Acquisition and
integration related costs — — 27.9 — 27.9 0.13 Unrealized
mark-to-market (gains) losses — — (38.3 ) — (38.3 ) (0.18 ) Other
non-core items — (0.2 ) (0.2 ) — (0.2 ) — Tax effects on special
and non-GAAP items — — — (447.6 ) (447.6 )
(2.06 )
Underlying (Non-GAAP) $ (84.9 ) $ 0.3 $ 194.0
$ (55.9 ) $ 133.6 $ 0.62
(1) Adjustments relate to the following segments:
U.S. segment $0.6 million, Canada segment $0.8 million, Europe
segment $0.2 million, International segment $2.2 million, Corporate
segment $(38.3) million. (2) Adjustments relate to the following
segments: U.S. segment $0.1 million, International segment $3.2
million, Corporate segment $20.8 million. (3) Adjustments relate to
the following segments: U.S. segment $(5.3) million, Canada segment
$6.3 million, Europe segment $2.6 million, International segment
$0.1 million.
Full Year
2017 Twelve Months Ended December 31, 2017
($ in millions) (Unaudited)
Net sales
Cost of
goodssold(1)
Gross profit
Marketing,general
andadministrativeexpenses(2)
Special
items,net(3)
Operatingincome (loss)
Reported (U.S. GAAP) $ 11,002.8 $ (6,217.2 ) $ 4,785.6 $
(3,032.4 ) $ (28.1 ) $ 1,725.1 Adjustments to arrive at underlying:
Special items, net Employee-related charges — — — — (5.7 ) (5.7 )
Impairments or asset abandonment charges — — — — 38.4 38.4
Termination fees and other (gains) losses — — — — (4.6 ) (4.6 )
Non-Core items Acquisition and integration related costs — 10.7
10.7 70.6 — 81.3 Unrealized mark-to-market (gains) losses —
(123.3 ) (123.3 ) — — (123.3 )
Underlying
(Non-GAAP) $ 11,002.8 $ (6,329.8 ) $ 4,673.0 $
(2,961.8 ) $ — $ 1,711.2
Full Year 2017
Twelve Months Ended December 31, 2017 ($ in millions, except
per share data) (Unaudited)
Interestincome(expense),net
Otherincome(expense),net
Income
(loss)fromcontinuingoperationsbefore
incometaxes
Income
taxbenefit(expense)
Net income (loss)attributable
toMCBC fromcontinuingoperations
Net income (loss)attributable
toMCBC fromcontinuingoperations
perdiluted share
Reported (U.S. GAAP) $ (343.3 ) $ (0.1 ) $ 1,381.7 $ 53.2 $
1,412.7 $ 6.52 Adjustments to arrive at underlying: Special items,
net Employee-related charges — — (5.7 ) — (5.7 ) (0.03 )
Impairments or asset abandonment charges — — 38.4 — 38.4 0.18
Termination fees and other (gains) losses — — (4.6 ) — (4.6 ) (0.02
) Non-Core items Acquisition and integration related costs — — 81.3
— 81.3 0.38 Unrealized mark-to-market (gains) losses — — (123.3 ) —
(123.3 ) (0.57 ) Other non-core items — (8.3 ) (8.3 ) — (8.3 )
(0.04 ) Tax effects on special and non-GAAP items — —
— (421.9 ) (421.9 ) (1.95 )
Underlying (Non-GAAP) $
(343.3 ) $ (8.4 ) $ 1,359.5 $ (368.7 ) $ 968.6 $ 4.47
(1) Adjustments relate to
the following segments: U.S. segment $2.4 million, Canada segment
$4.1 million, Europe segment $0.6 million, International segment
$3.6 million, Corporate segment $(123.3) million. (2) Adjustments
relate to the following segments: U.S. segment $5.1 million,
International segment $8.4 million, Corporate segment $57.1
million. (3) Adjustments relate to the following segments: U.S.
segment $9.9 million, Canada segment $11.5 million, Europe segment
$5.0 million, International segment $1.6 million, Corporate $0.1
million.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180214005211/en/
Molson Coors Brewing CompanyNews
MediaColin Wheeler, 303-927-2443orInvestor RelationsDave Dunnewald,
303-927-2334orKevin Kim, 303-927-2515
Molson Coors Beverage (NYSE:TAP)
Historical Stock Chart
From Aug 2024 to Sep 2024
Molson Coors Beverage (NYSE:TAP)
Historical Stock Chart
From Sep 2023 to Sep 2024