securities andexchangecommissiond18rn0p25nwr6d.cloudfront.net/cik-0000024545/22aa50f7-3a... ·...
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UNITEDSTATESSECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549
Form8-K
CurrentReportPursuanttoSection13or15(d)oftheSecuritiesExchangeActof1934
DateofReport(Dateofearliesteventreported):August1,2018
MOLSONCOORSBREWINGCOMPANY(Exactnameofregistrantasspecifiedinitscharter)
CommissionFileNumber:1-14829
Delaware 84-0178360(Stateorotherjurisdiction
ofincorporation)(IRSEmployer
IdentificationNo.)
1801CaliforniaStreet,Suite4600,Denver,Colorado802021555NotreDameStreetEast,Montréal,Québec,Canada,H2L2R5
(Addressofprincipalexecutiveoffices,includingzipcode)
(303)927-2337/(514)521-1786(Registrant’stelephonenumber,includingareacode)
(Formernameorformeraddress,ifchangedsincelastreport)
ChecktheappropriateboxbelowiftheForm8-Kfilingisintendedtosimultaneouslysatisfythefilingobligationoftheregistrantunderanyofthefollowingprovisions:
⃞WrittencommunicationspursuanttoRule425undertheSecuritiesAct(17CFR230.425)
⃞SolicitingmaterialpursuanttoRule14a-12undertheExchangeAct(17CFR240.14a-12)
⃞Pre-commencementcommunicationspursuanttoRule14d-2(b)undertheExchangeAct(17CFR240.14d-2(b))
⃞Pre-commencementcommunicationspursuanttoRule13e-4(c)undertheExchangeAct(17CFR240.13e-4(c))
IndicatebycheckmarkwhethertheregistrantisanemerginggrowthcompanyasdefinedinRule405oftheSecuritiesActof1933(§230.405ofthischapter)orRule12b-2oftheSecuritiesExchangeActof1934(§240.12b-2ofthischapter).
Emerginggrowthcompany⃞
Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.⃞
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Item2.02 ResultsofOperationsandFinancialCondition.
Attached as Exhibit 99.1 is a copy of a press release of Molson CoorsBrewing Company (the “Company”), dated August 1, 2018, reporting theCompany’sfinancialresultsforthefiscalquarterendedJune30,2018.Suchinformation,includingtheExhibitattachedhereto,shallnotbedeemed“filed”forpurposesofSection18oftheSecuritiesExchangeActof1934,asamended,norshallitbedeemedincorporatedbyreferenceinanyfilingundertheSecuritiesActof1933,asamended,exceptasshallbeexpresslysetforthbyspecificreferenceinsuchfiling.
Item9.01 FinancialStatementsandExhibits.
(d)Exhibits.
99.1 PressReleaseofMolsonCoorsBrewingCompany,datedAugust1,2018,reportingMolsonCoorsBrewingCompany’sfinancialresultsforthefiscalquarterendedJune30,2018.
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Signature
PursuanttotherequirementsoftheSecuritiesExchangeActof1934,theregistranthasdulycausedthisreporttobesignedonitsbehalfbytheundersignedhereuntodulyauthorized.
MOLSONCOORSBREWINGCOMPANY
Date: August1,2018 By: /s/E.LeeReichert
E.LeeReichertChiefLegalandCorporateAffairsOfficerandSecretary
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Exhibit99.1
MolsonCoorsReports2018SecondQuarterResults
EPS (U.S. GAAP) of $1.96 Increased 28.9%, and Underlying EPS (Non-GAAP) of $1.88 Increased 10.6%, versus prior year
Sequential Improvement to Top and Bottom Line Reflects Benefits from Positive Global Net Pricing, Cost Savings Delivery,Lower Marketing Spend and U.S. Tax Reform, Despite Worldwide Brand Volumes down 2.4%
Management Remains Committed to Full-Year Free Cash Flow and Cost Savings Targets
DENVER&MONTREAL--(BUSINESSWIRE)--August1,2018--MolsonCoorsBrewingCompany(NYSE:TAP;TSX:TPX)todayreportedresultsforthe2018secondquarter.MolsonCoorspresidentandchiefexecutiveofficerMarkHuntersaid:
"Wewerepleasedwiththesequentialimprovementsinthesecondquarterfortopandbottomlineresults.Ourfullyearunderlyingcostsavingsandfreecashflowguidancehasnotchanged,despiteongoingindustrydemandchallengesintheU.S.andCanadaandinflationarypressures.WhileweareaggressivelyaddressingourvolumeperformanceinNorthAmerica,performanceinourEuropeandInternationalbusinesseswasstronginthequarter.
Markcontinued,"Morespecificallyforthequarter,ourunderlyingEPSgrowthof10.6percentreflectedpositiveglobalnetpricing,costsavingsdelivery,lowermarketingspend,andalowertaxrate,whilewecontinuedtostrengthenourbalancesheetwithlowernetdebt.Ourresultsalsoincludetheunfavorabletimingeffectoftherevenuerecognitionaccountingstandard,whichreducedunderlyingEPSby5centsforthequarter.Thistimingdifferenceislargelyexpectedtoflipbackasabenefitinthefourthquarter.Acrosstheorganization,ourteamsexercisedflexibilityintheP&LwithlowerMG&Aspendacrossallbusinessunits.
"Ourteamsareleaningintodeliveronourcommitmentsforthefullyearbyfindingopportunitiestoearnmore,uselessandinvestwisely.Guidanceforfreecashflowof$1.5billionplusorminus10percentthisyearisbasedoncontinuingtodriveourFirstChoicecommercialexcellenceinitiatives,aswellasourdisciplinedapproachtocostsavings,flexibilitywithdiscretionaryspendingandourcontinuedfocusondrivingworkingcapitalefficiencies."
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ConsolidatedPerformance-SecondQuarter2018
ThreeMonthsEnded
($inmillions,exceptpersharedata)(Unaudited)
June30,2018
June30,2017 Reported%
Increase(Decrease)
ForeignExchangeImpact($)
ConstantCurrency%Increase(Decrease)
NetSales $ 3,085.2 $ 3,091.3 (0.2)% $ 53.5 (1.9)%U.S.GAAPNetincome(loss)(1) $ 424.1 $ 329.9 28.6%
Per diluted share $ 1.96 $ 1.52 28.9%Underlying(Non-GAAP)Netincome(loss)(2) $ 406.1 $ 367.1 10.6%
Per diluted share $ 1.88 $ 1.70 10.6% UnderlyingEBITDA(Non-GAAP)(2) $ 783.3 $ 804.2 (2.6)% $ 9.7 (3.8)%
SixMonthsEnded
($inmillions,exceptpersharedata)(Unaudited)
June30,2018
June30,2017 Reported
%Increase(Decrease)
ForeignExchangeImpact($)
Constant
Currency%Increase(Decrease)
NetSales $ 5,416.7 $ 5,540.0 (2.2)% $ 111.6 (4.2)%U.S.GAAPNetincome(loss)(1) $ 702.2 $ 538.4 30.4%
Per diluted share $ 3.24 $ 2.49 30.1%Underlying(Non-GAAP)Netincome(loss)(2) $ 510.4 $ 539.3 (5.4)%
Per diluted share $ 2.36 $ 2.49 (5.2)%UnderlyingEBITDA(Non-GAAP)(2) $ 1,209.3 $ 1,327.0 (8.9)% $ 15.8 (10.1)%
(1) Netincome(loss)attributabletoMCBC.(2) SeeAppendixfordefinitionsandreconciliationsofnon-GAAPfinancialmeasures.
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QuarterlyHighlights(versus Second Quarter 2017 Results)
Netsales:$3.1billion,decreasedby0.2percent,duetolowerfinancialvolumeandtheadoptionofthenewrevenuerecognitionaccountingstandard(discussedintheAppendixbelow).Thesefactorswerelargelyoffsetbypositiveglobalpricingandfavorableforeigncurrencymovements.Netsalesinconstantcurrencydeclined1.9percent.
NetsalesperHL:$111.20onareportedfinancial-volumebasis,increased1.9percent.NetsalesperHLonabrandvolumebasis(1)inconstantcurrencydecreasedby0.3percent,drivenbytheadoptionofthenewrevenuerecognitionaccountingstandard,partiallyoffsetbypositiveglobalnetpricingaswellasfavorablemixinEuropeandInternational.
Volume:Worldwidebrandvolumeof25.7millionhectolitersdecreased2.4percentdrivenbydeclinesintheU.S.andCanadapartiallyoffsetbygrowthinEuropeandInternational.Financialvolumeof27.7millionhectolitersdecreased2.1percent,andwasadverselyimpactedbyreductionsinbrandvolumesandcontractbrewing.Globalprioritybrandvolumedecreased4.0percent.
U.S.GAAPnetincomeattributabletoMCBCincreased28.6percent,drivenbyunrealizedmark-to-marketgainsonourcommoditypositions(versuslossesayearago),costsavings,lowerincometaxexpense,lowerinterestexpenseandpositivenetpricing,partiallyoffsetbylowerfinancialvolume,higherinputcostinflationandtheadoptionofthenewrevenuerecognitionaccountingstandard.
Underlyingnetincomeincreased10.6percent,drivenbycostsavings,lowerincometaxexpense,lowerinterestexpenseandpositivenetpricing,partiallyoffsetbylowerfinancialvolume,highercostinflationandtheadoptionofthenewrevenuerecognitionaccountingstandard.
UnderlyingEBITDA:Decreased2.6percentonareportedbasisanddecreased3.8percentonaconstant-currencybasis,drivenbylowerfinancialvolume,higherinputcostinflationandtheimpactsoftheadoptionofthenewrevenuerecognitionaccountingstandard,partiallyoffsetbypositiveglobalnetpricing,costsavingsandlowermarketingspend.
U.S.GAAPcashfromoperations:Netcashprovidedbyoperatingactivitiesforthefirsthalfof2018wasapproximately$1.3billion,whichrepresentsanimprovementof$479.3million,drivenbythe$328millioncashpaymentreceivedinJanuary2018relatedtothereceiptofapurchasepriceadjustmentforouracquisitionoftheMillerInternationalbusiness,aswellasworkingcapitalimprovementsandlowercashpaidforpensioncontributionsandinterest.
Underlyingfreecashflow:cashreceivedof$659.8million,whichrepresentsanincreaseof$73.1millionfromtheprioryear,drivenbyworkingcapitalimprovementsandlowercashpaidforpensioncontributionsandinterest.
Debt:Totaldebtattheendofthesecondquarterof2018was$10.9billion,andcashandcashequivalentstotaled$792.9million,resultinginnetdebtof$10.1billion.
(1)BrandVolumeBasisNSR/HL:Effectiveinthefirstquarterof2018,wehaverevisedournetsalesrevenue(NSR)perHLperformancediscussionstobeonabrandvolumebasis,withallper-hectolitercalculationsincludingownedandactivelymanagedbrands,alongwithroyaltyvolume,inthedenominator,aswellasthefinancialimpactofthesesalesinthenumerator,unlessotherwiseindicated.SeeAppendixfordefinitions.
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BusinessReview-SecondQuarter2018
NetSales
($inmillions)(Unaudited) ThreeMonthsEnded
June30,2018
June30,2017 Reported
%Increase(Decrease)
ForeignExchangeImpact($)
Constant
Currency%Increase(Decrease)
UnitedStates $ 2,072.5 $ 2,138.9 (3.1)% $ — (3.1)%Canada 397.4 407.6 (2.5)% 15.3 (6.3)%Europe 586.1 524.7 11.7% 38.8 4.3%International 67.9 65.1 4.3% (0.5) 5.1%Corporate 0.3 0.3 —% — —%Eliminations(1) (39.0) (45.3) 13.9% (0.1) 14.1%Consolidated $ 3,085.2 $ 3,091.3 (0.2)% $ 53.5 (1.9)%
(1) Reflectsintercompanysalesthatareeliminatedinconsolidatedtotals.
PretaxIncome(U.S.GAAP)
($inmillions)(Unaudited) ThreeMonthsEnded
June30,2018
June30,2017 Reported
%Increase(Decrease)
ForeignExchangeImpact($)
Constant
Currency%Increase(Decrease)
UnitedStates $ 445.5 $ 486.5 (8.4)% $ (0.5) (8.3)%Canada 61.3 69.7 (12.1)% 1.3 (13.9)%Europe 86.8 69.9 24.2% 3.7 18.9%International 1.3 (7.7) N/M (0.1) N/MCorporate (71.9) (158.2) 54.6% 1.3 53.7%Consolidated $ 523.0 $ 460.2 13.6% $ 5.7 12.4%
N/M=Notmeaningful
UnderlyingEBITDA(Non-GAAP)(1)
($inmillions)(Unaudited) ThreeMonthsEnded
June30,2018
June30,2017 Reported
%Increase(Decrease)
ForeignExchangeImpact($)
Constant
Currency%Increase(Decrease)
UnitedStates $ 576.3 $ 621.2 (7.2)% $ (0.5) (7.1)%Canada 96.2 101.4 (5.1)% 2.7 (7.8)%Europe 135.8 114.9 18.2% 7.4 11.7%International 6.5 (0.9) N/M (0.3) N/MCorporate (31.5) (32.4) 2.8% 0.4 1.5%Consolidated $ 783.3 $ 804.2 (2.6)% $ 9.7 (3.8)%
N/M=Notmeaningful
(1) SeeAppendixfordefinitionsandreconciliationsofnon-GAAPfinancialmeasures.
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UnitedStatesBusiness
Volume:U.S.brandvolumedecreased4.8percentforthequarter,primarilydrivenbylowervolumeinthePremiumLightsegment.Sales-to-wholesalers(STWs),excludingcontractbrewing,volumedecreased3.6percent.
Revenue:Netsalesperhectoliter(brandvolumebasis),whichexcludescontractbrewingandcompany-owned-distributorsales,grew0.9percent.Excludingthe$12.1millionimpactofthenewrevenuerecognitionaccountingstandard,netsalesperhectoliter(brandvolumebasis)grew1.6percentprimarilyasaresultofhighernetpricing,partiallyoffsetbynegativesalesmix.
Costofgoodssold(COGS)perhectoliterincreased5.5percent,drivenbyhigherfreightandfuelcosts,aluminuminflationandvolumedeleverage,partiallyoffsetbycostsavings.
Marketing,generalandadministrative(MG&A)expensedecreased5.2percentduetospendingoptimizationandefficienciesaswellasloweremployee-relatedexpenses.
OnaU.S.GAAPbasis,U.S.pretaxincomedecreased8.4percentto$445.5million,primarilydrivenbyhigherCOGS,particularlyaluminumandfreight,lowervolumes,negativesalesmix,theunfavorableimpactofthenewrevenuerecognitionaccountingstandardandhigherdepreciationexpense,partiallyoffsetbyhighernetpricingandlowerMG&Aexpenses.
U.S.underlyingEBITDAdecreased7.2percentto$576.3million,drivenbyhigherCOGS,particularlyaluminumandfreight,lowervolumes,negativesalesmixandtheunfavorableimpactofthenewrevenuerecognitionaccountingstandard,partiallyoffsetbyhighernetpricingandlowerMG&Aexpenses.
CanadaBusiness
Volume:Canadabrandvolumedecreased2.4percentinthesecondquarter,asaresultofvolumechallengesinOntarioandtheWestandlowervolumesinthePremiumLightsegment,partiallyoffsetbygrowthintheValuesegment.Financialvolumedecreased2.3percentprimarilyduetobrandvolumedeclines.
Revenue:Netsalesperhectoliter(brandvolumebasis)decreased4.5percentinlocalcurrency,drivenbyouradoptionofthenewrevenuerecognitionaccountingstandard,whichreducednetsalesbyapproximately$12millioninthequarter.Excludingtheeffectofthenewaccountingstandard,NSRperHL(brandvolumebasis)wouldhavedecreased1.4percentinlocalcurrencyduetonegativebrandmix,partiallyoffsetbyhighernetpricing.
COGSperhectoliterdecreased0.7percentinlocalcurrencyduetocostsavingsandcertainone-timedistributionsavings,partiallyoffsetbyvolumedeleverage,negativemixandinputcostinflation.
MG&Aexpensedecreased13.8percentinlocalcurrency,drivenbytheapproximate$10millionfavorableimpactofthenewrevenuerecognitionaccountingstandard,aswellastimingbenefitsandanoverallreductioninbrandinvestments.
OnaU.S.GAAPbasis,Canadareportedpretaxincomeof$61.3million,a12.1percentdecreasefromtheprioryear,drivenbynegativesalesmixandlowervolumesaswellasunfavorableimpactsrelatedtotheadoptionofthenewrevenuerecognitionaccountingstandard,partiallyoffsetbylowermarketinginvestment.
CanadaunderlyingEBITDAdecreased7.8percentinconstantcurrencyto$96.2millioninthequarter,duetothesamefactorsasU.S.GAAPresults.
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EuropeBusiness
Volume:Europebrandvolumeincreased2.9percentinthesecondquarterversusayearago,asaresultofabovepremiumbrandsandnationalchampionbrandperformance,aswellasWorldCupconsumption.Europefinancialvolumeincreased3.0percent.
Revenue:Europenetsalesperhectoliter(brandvolumebasis)increased1.5percentinlocalcurrency,primarilydrivenbypositivesalesmixandpricing.Thiswaspartiallyoffsetbytheimpactofadoptingrecentlyrevisedexcise-taxguidelinesinoneofourEuropeanmarketsaswellasincreasingourinvestmentbehindourFirstChoiceAgendathisyear.
COGSperhectoliterincreased1.5percentinlocalcurrency,primarilyduetomixshifttohigher-costbrandsandgeographies,inputinflationandlogisticscosts.
MG&Aexpensedecreased3.5percentinlocalcurrency,drivenbyspendefficiencyandtimingofbrandinvestments,theimpactofadoptingthenewrevenuerecognitionaccountingstandardandabenefitfromthepartialreversalofbaddebtprovisions,slightlyoffsetbytheadditionofAspallbrandinvestments.
OnaU.S.GAAPbasis,Europereportedpretaxincomeof$86.8million,anincreaseof24.2percentdrivenbyfavorablegrossprofitimpacts,lowermarketinginvestments,thepartialreversalofbaddebtprovisionsandtheadditionoftheAspallCiderbusinessandfavorableforeigncurrencymovements.ThesefactorswerepartiallyoffsetbyadoptingrecentlyrevisedexcisetaxguidelinesinoneofourEuropeanmarketsandinvestmentsinourFirstChoiceAgenda.
EuropeunderlyingEBITDAincreased11.7percentinconstantcurrencyto$135.8million,duetothesamefactorsasU.S.GAAPresults.
InternationalBusiness
Volume:Internationalbrandvolumeincreasedby0.6percentinthesecondquarter,drivenbyorganicgrowthinmanyofourfocusmarkets,partiallyoffsetbythelossoftheModelocontractinJapan.
Revenue:Netsalesperhectoliter(brandvolumebasis)increasedby3.8percent,drivenbypositivenetpricingandfavorablesalesmix.
COGSperhectoliterdecreased6.9percent,duetosalesmixchanges.
MG&Aexpensedecreased16.6percent,drivenbylowermarketinginvestmentsandintegrationcosts.
OnaU.S.GAAPbasis,Internationalreportedpretaxincomeof$1.3millionversusalossof$7.7millionayearago,drivenbypositivenetpricing,favorablesalesmix,andlowermarketingandintegrationexpenses,partiallyoffsetbythelossoftheModelobrandsinJapan.
InternationalunderlyingEBITDAwas$6.5millioninthesecondquarter,comparedto$0.9millionlossayearago,drivenbybypositivenetpricing,favorablesalesmix,andlowermarketingexpenses,partiallyoffsetbythelossoftheModelobrandsinJapan.
Corporate
OnaU.S.GAAPbasis,Corporatereportedapretaxlossof$71.9millioninthesecondquartercomparedtoalossof$158.2millionintheprioryear,duetounrealizedmark-to-marketgainsoncommodityswaps,primarilyouraluminumpositions,comparedtolossesayearagoaswellaslowerinterestexpenseinthecurrentyear.
CorporateunderlyingEBITDAwasalossof$31.5millionforthesecondquarterversusa$32.4millionlossintheprioryear,drivenprimarilybythetimingofgeneralandadministrativecosts,slightlyoffsetbypensionbenefitandfavorableforeigncurrency.
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WorldwideBrandandFinancialVolume(1)
(Inmillionsofhectoliters)(Unaudited) ThreeMonthsEnded
June30,2018 %Change June30,2017FinancialVolume(1) 27.745 (2.1)% 28.340Contractbrewing,wholesalerandnon-beervolume (2.277) (4.7)% (2.390)Royaltyvolume 1.057 2.3% 1.033Sales-To-WholesalertoSales-To-Retailadjustment (0.780) 26.4% (0.617)TotalWorldwideBrandVolume(1) 25.745 (2.4)% 26.366
(1) SeeAppendixfordefinitionsandadditionaldiscussionregardingFinancialandWorldwideBrandVolume.
OtherResults
EffectiveIncomeTaxRates
ThreeMonthsEnded
June30,2018 June30,2017U.S.GAAPeffectivetaxrate 18% 27%Underlyingeffectivetaxrate 17% 28%
TheU.S.GAAPeffectivetaxrateandtheunderlyingeffectivetaxratedecreased9percentagepointsand11percentagepoints,respectively,fromayearago,primarilyduetothereductionoftheU.S.federalstatutorycorporateincometaxrateto21percentasaresultofU.S.taxreform.
SpecialandOtherNon-CoreItems
Thefollowingspecialandothernon-coreitemshavebeenexcludedfromunderlyingresults.SeetheAppendixforreconciliationsofnon-GAAPfinancialmeasures.
Duringthesecondquarterof2018,MCBCrecognizedanetspecialchargeof$10.5million,primarilydrivenbyassetabandonmentcharges,includingaccelerateddepreciation,relatedtobreweryclosures.
Additionally,othernon-corenetbenefitsof$35.4millionincludeunrealizedmark-to-marketgainsoncommodityhedgesaswellasintegration-relatedexpenses.
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2018Outlook
Thefollowingguidanceforfullyear2018isunchangedfrompreviousdisclosures,unlessotherwiseindicated:
Underlyingfreecashflow:$1.5billion,plusorminus10percent,whichexcludesthe$328millioncashpaymentreceivedinJanuary2018relatedtoresolvingapurchasepriceadjustmenttoourOctober2016acquisitionoftheMillerInternationalbusiness.
Transaction-relatedmetrics:approximately$200million(includedinfreecashflowguidance)ofcashtaxbenefitsandapproximately$55millionofafter-taxbookamortization.
Cashpensioncontributions:approximately$10million.
Capitalspending:approximately$670million,plusorminus10percent.
Costsavings:approximately$210millionin2018,and$600millionfor2017to2019.
Costofgoodssoldperhectoliter:
U.S.:mid-single-digitincrease.-Updated (formerly low-single-digit increase)
Canada:low-single-digitincrease(localcurrency).
Europe:low-single-digitincrease(localcurrency).
Internationalbusiness:low-single-digitdecrease.
UnderlyingCorporateMG&Aexpense:approximately$180million,plusorminus10percent.
Underlyingdepreciationandamortization:approximately$850million,versus$792millionin2017,primarilyduetoplannedinformationsystemsimplementationsintheU.S.
Pensionbenefit:approximately$60million.
Corporatenetinterestexpense:approximately$330million,plusorminus10percent.
Underlyingeffectivetaxrateintherangeof18to22percentfor2018,followingtheenactmentofU.S.taxreform.SubjecttoadditionaldefinitiveguidancefromtheU.S.governmentregardingtheimplementationoftherecentlypassedtaxreformlegislation,thecompany'spreliminaryviewofitslong-termeffectivetaxrate(after2018)isintherangeof20to24percent.
Deleverage&Dividend:Wearecommittedtomaintainingourinvestmentgraderatingandcurrentlyplantoachieveapproximately4xleverageonaratingagencybasisbytheendof2018.Weplantoachieveabout3.75xratingagencyleveragearoundthemiddleof2019.Uponachievingabout3.75xleverage,ourboardcurrentlyintendstoreinstituteadividendpayout-ratiotargetintherangeof20-25%ofannualtrailingunderlyingEBITDAforthesecondhalfof2019andongoingthereafter.-New
Inaddition,our2018resultsarealsobeingimpactedbytheadoptionofthenewrevenuerecognitionaccountingstandard,aswellasguidancechangingthepresentationofpensionandotherpostretirementbenefit(OPEB)costs.
Thenewrevenuerecognitionaccountingstandardbecameeffectiveforusatthebeginningof2018,andwehaveelectedthemodifiedretrospectiveadoptionmethod.Therefore,priorperiodresultshavenotbeenrestated,butresultsundertheoldstandardwillcontinuetobedisclosedthroughout2018forcomparability,asrequiredbythestandard.Alongwithsometimingchangesbetweenquarters,thisadoptionchangesthepresentationofourresults.Wecurrentlyanticipatethattheimpactofthischangewillresultinareductionofbothrevenueandmarketing,generalandadministrativeexpensesbyapproximately$60millionto$70millionduring2018,primarilywithinourCanadasegment,withnoimpacttofullyearnetincome.SeeAppendixfordetailedimpactson2018resultsfromouradoptionofthenewrevenuerecognitionaccountingstandard.
Underthenewpensionguidance,wearecontinuingtoreporttheservicecostcomponentofnetperiodicpensionandOPEBcostsorincomeinourbusinesssegmentoperatingresults.Beginningin2018,however,allothercomponentsofnetperiodicpensionandOPEBcostorincomearebeingreportedinCorporateoutsideofoperatingincome.PriorperiodresultsforeachofoursegmentsandConsolidatedhavebeenrestatedretrospectivelyforthischange,asrequiredbytheguidance,withnoimpacttoconsolidatednetincome.ThisaccountingchangeprimarilyimpactsthereportedresultsofourEuropesegment.SeeAppendixsectionbelow.
Theimpactsoftheseaccountingchangesarediscussedinfurtherdetailwithinfootnote2ofour2017Form10-Kandour2018quarterlyreportsonForm10-Q.
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Notes
Unlessotherwiseindicatedinthisrelease,all$amountsareinU.S.Dollars,andallquarterlycomparativeresultsarefortheCompany’ssecondquarterendedJune30,2018,comparedtothesecondquarterendedJune30,2017.Prioryearresultshavebeenadjustedtoreflecttheretrospectiveadoptionofnewpensionaccounting,asdescribedabove.Effectiveinthefirstquarterof2018,wehaverevisedournetsalesrevenue(NSR)perHLperformancediscussionstobeonabrandvolumebasis,suchthatallper-hectolitercalculationsnowincludeownedandactivelymanagedbrandvolume,alongwithroyaltyvolume,inthedenominator,aswellasthefinancialimpactofthesesalesinthenumerator,unlessotherwiseindicated.Somenumbersmaynotsumduetorounding.
Asusedinthisrelease,theterm“Acquisition”referstotheCompany’sacquisitionfromAnheuser-BuschInBevSA/NVonOctober11,2016,ofSABMillerplc’s58percenteconomicinterestand50percentvotinginterestinMillerCoorsLLCandalltrademarks,contractsandotherassetsprimarilyrelatedtotheMillerInternationalbusinessoutsideoftheU.S.andPuertoRico.
2018SecondQuarterConferenceCall
MolsonCoorsBrewingCompanywillconductanearningsconferencecallwithfinancialanalystsandinvestorsat11:00a.m.EasternTimetodaytodiscusstheCompany’s2018secondquarterresults.ThelivewebcastwillbeaccessibleviatheCompany’swebsite,www.molsoncoors.com.Anonlinereplayofthewebcastwillbeavailableuntil11:59p.m.EasternTimeonOctober31,2019.TheCompanywillpostthisreleaseandrelatedfinancialstatementsonitswebsitetoday.
UpcomingInvestorWebcast
Thecompanywillhostanonline,real-timewebcastattheBarclaysGlobalConsumerStaplesConferenceinBostononWednesday,September5,2018at9:45a.m.EasternTime.AlivewebcastofthisinvestoreventwillbeaccessibleviatheMolsonCoorsBrewingCompanyInvestorRelationswebsite,ir.molsoncoors.com.Anonlinereplayofthepresentationwebcastwillbeavailableonthewebsitewithintwohoursafterthepresentation.
OverviewofMolsonCoors
MolsonCoorshasdefinedbrewinggreatnessformorethantwocenturies.Asoneofthelargestglobalbrewers,MolsonCoorsworkstodeliverextraordinarybrandsthatdelighttheworld’sbeerdrinkers.FromCoorsLight,CoorsBanquet,MillerLite,MolsonCanadian,Carling,StaropramenandSharp’sDoomBartoLeinenkugel’sSummerShandy,BlueMoonBelgianWhite,HopValley,CreemoreSpringsandCrispinCider,MolsonCoorsoffersabeerforeverybeerlover.
MolsonCoorsoperatesthroughMolsonCoorsCanada,MillerCoorsintheU.S.,MolsonCoorsEuropeandMolsonCoorsInternational.Thecompanyisnotonlycommittedtobrewingextraordinarybeers,butalsorunningabusinessfocusedonrespectforitsemployees,communitiesanddrinkers,whichmeanscorporateresponsibilityandaccountabilityrightfromthestart.IthasbeenlistedontheDowJonesSustainabilityIndexforthepastsevenyears.TolearnmoreaboutMolsonCoorsBrewingCompany,visitmolsoncoors.com,ourbeerprint.comoronTwitterthrough@MolsonCoors.
AboutMolsonCoorsCanadaInc.
MolsonCoorsCanadaInc.(MCCI)isasubsidiaryofMolsonCoorsBrewingCompany.MCCIClassAandClassBexchangeablesharesoffersubstantiallythesameeconomicandvotingrightsastherespectiveclassesofcommonsharesofMCBC,asdescribedinMCBC’sannualproxystatementandForm10-KfilingswiththeU.S.SecuritiesandExchangeCommission.ThetrusteeholderofthespecialClassAvotingstockandthespecialClassBvotingstockhastherighttocastanumberofvotesequaltothenumberofthenoutstandingClassAexchangeablesharesandClassBexchangeableshares,respectively.
Forward-LookingStatements
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 theseassumptions will prove to be correct. Important factors that could cause actual results to differ materially from the Company’s historical experience, and presentprojections 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 and achieve expected tax benefits, accretion and cost savings and synergies relating to the Acquisition; impact of increasedcompetition 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 chainsystem; 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 thecost 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 keyfacility; our ability to implement our strategic initiatives, including executing and realizing cost savings; our ability to successfully integrate newly acquiredbusinesses; pension plan and other post-retirement benefit costs; failure to comply with debt covenants or deterioration in our credit rating; our ability to maintaingood labor relations; our ability to maintain brand image, reputation and product quality; and other risks discussed in our filings with the SEC, including ourmost 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 bysuch cautionary statements and by reference to the underlying assumptions. You should not place undue reliance on forward-looking statements, which speak onlyas 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
ConsolidatedFinancialPerformance
MolsonCoorsBrewingCompany ThreeMonthsEndedJune30,2018 %Change
(Inmillions,exceptpersharedata)(Unaudited) U.S.GAAP Non-GAAPAdjustments(1) Non-GAAP
Underlying(1) U.S.GAAP Non-GAAPUnderlying
Netsales $ 3,085.2 $ — $ 3,085.2 (0.2)% (0.2)%Net Sales per HL change 1.9% 1.9 %Costofgoodssold $ (1,739.1) $ (43.9) $ (1,783.0) (0.9)% 3.2 %
Cost of goods sold per HL change 1.2% 5.4 %
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Grossprofit $ 1,346.1 $ (43.9) $ 1,302.2 0.8% (4.5)%Marketing,generalandadministrativeexpenses $ (744.7) $ 8.5 $ (736.2) (4.8)% (4.2)%Specialitems,net $ (10.5) $ 10.5 $ — (36.4)% — %Operatingincome(loss) $ 590.9 $ (24.9) $ 566.0 10.1% (5.0)%Interestincome(expense),net $ (76.7) $ — $ (76.7) (14.0)% (14.0)%Otherpensionandpostretirementbenefits(costs),net $ 9.9 $ — $ 9.9 5.3% 5.3 %Otherincome(expense),net $ (1.1) $ — $ (1.1) N/M N/MIncome(loss)beforeincometaxes $ 523.0 $ (24.9) $ 498.1 13.6 % (4.0)%Incometaxbenefit(expense) $ (92.2) $ 6.9 $ (85.3) (26.4)% (41.9)%Netincome(loss)(2) $ 424.1 $ (18.0) $ 406.1 28.6 % 10.6 %
Per diluted share $ 1.96 $ (0.08) $ 1.88 28.9 % 10.6 %UnderlyingEBITDA(3) $ 783.3 (2.6)%
MolsonCoorsBrewingCompany SixMonthsEndedJune30,2018 %Change
(Inmillions,exceptpersharedata)(Unaudited) U.S.GAAP Non-GAAPAdjustments(1) Non-GAAP
Underlying(1) U.S.GAAP Non-GAAPUnderlying
Netsales $ 5,416.7 $ — $ 5,416.7 (2.2)% (2.2)%Net Sales per HL change 1.1% 1.1%Costofgoodssold $ (3,274.8) $ 42.2 $ (3,232.6) 4.7% 2.2%Cost of goods sold per HL change 8.3% 5.7%Grossprofit $ 2,141.9 $ 42.2 $ 2,184.1 (11.2)% (8.2)%Marketing,generalandadministrativeexpenses $ (1,425.8) $ 17.3 $ (1,408.5) (4.2)% (3.2)%Specialitems,net $ 304.3 $ (304.3) $ — N/M —%Operatingincome(loss) $ 1,020.4 $ (244.8) $ 775.6 13.2% (15.9)%Interestincome(expense),net $ (159.9) $ — $ (159.9) (13.9)% (13.9)%Otherpensionandpostretirementbenefits(costs),net $ 19.9 $ 0.1 $ 20.0 (12.3)% 1.0%Otherincome(expense),net $ — $ — $ — (100.0)% (100.0)%Income(loss)beforeincometaxes $ 880.4 $ (244.7) $ 635.7 18.8% (15.4)%Incometaxbenefit(expense) $ (167.1) $ 52.9 $ (114.2) (12.6)% (43.1)%Netincome(loss)(2) $ 702.2 $ (191.8) $ 510.4 30.4% (5.4)%Per diluted share $ 3.24 $ (0.88) $ 2.36 30.1% (5.2)%UnderlyingEBITDA(3) $ 1,209.3 (8.9)%
N/M=Notmeaningful
(1) Refertothetable"ReconciliationtoNearestU.S.GAAPMeasures"fordetaileddescriptionsandreconciliationofnon-GAAPadjustmentsandresults.(2) Netincome(loss)attributabletoMCBC.(3) EBITDAisearningsbeforeinterest,taxes,depreciationandamortization,anon-GAAPfinancialmeasure.
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AdoptionofRevenueRecognitionGuidance
Thenewrevenuerecognitionaccountingstandardbecameeffectiveforusatthebeginningof2018.Wehaveadoptedthenewstandardusingthemodifiedretrospectiveapproach,and,therefore,priorperiodresultshavenotbeenrestated.However,resultsundertheoldstandardwillcontinuetobedisclosedthroughout2018forcomparability,asrequiredbythestandard.ThefollowingtablehighlightstheimpactofthisnewguidanceonsummarizedcomponentsofourunauditedcondensedconsolidatedstatementofoperationsforthethreemonthsendedJune30,2018,whencomparingourcurrentperiodresultsofoperationsunderthenewguidance,versusourresultsofoperationsifhistoricalguidancehadcontinuedtobeapplied.
ThreeMonthsEndedJune30,2018
U.S. Canada Europe International Consolidated(Inmillions)
ImpacttoUnauditedCondensedConsolidatedStatementsofOperations-Favorable/(Unfavorable):Netsales $ (12.1) $ (12.1) $ (0.5) $ — $ (24.7)Costofgoodssold $ — $ — $ — $ — $ —Grossprofit $ (12.1) $ (12.1) $ (0.5) $ — $ (24.7)Marketing,generalandadministrativeexpenses $ 2.2 $ 9.9 $ 0.9 $ — $ 13.0Operatingincome(loss) $ (9.9) $ (2.2) $ 0.4 $ — $ (11.7)Interestincome(expense),net $ — $ — $ (0.9) $ — $ (0.9)Income(loss)beforeincometaxes $ (9.9) $ (2.2) $ (0.5) $ — $ (12.6)
Theseimpactsaredrivenprimarilybythereclassificationofcertaincashpaymentstocustomersfrommarketing,generalandadministrativeexpensestoareductionofrevenue,aswellasachangeinthetimingofrecognitionofcertainpromotionaldiscountsandcashpaymentstocustomers.Forfurtherdiscussionregardingtheimpactsoftheadoptionofthisnewguidance,refertofootnote2withinoursecondquarter2018Form10-Q.
AdoptionofPensionandOtherPostretirementBenefitAccountingPronouncement
Duringthefirstquarterof2018,weadoptedtheFASB'snewguidancerelatedtoclassificationofpensionandotherpostretirementbenefitcosts.Specifically,thenewguidancerequiresusonlytoreporttheservicecostcomponentinthesamelineitemasothercompensationcostsarisingfromservicesrenderedbythepertinentemployeesduringtheperiod;whiletheothercomponentsofnetbenefitcostarenowpresentedinthestatementsofoperationsseparatelyfromtheservicecostcomponentandoutsideofoperatingincome.Wehavealsodeterminedthatonlyservicecostwillbereportedwithineachoperatingsegment,andallothercomponentswillbereportedwithintheCorporatesegment.Thesechangestotheresultsofeachquarterandfullyear2017wereincludedinthefirstquarterEarningsRelease.SeetheCompany'ssecondquarter201810-Qfilingforadditionaldetail.
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WorldwideBrandandFinancialVolumes
Worldwidebrandvolumereflectsonlyownedbrandssoldtounrelatedexternalcustomerswithinourgeographicmarkets(netofreturnsandallowances),royaltyvolumeandourproportionateshareofequityinvestmentworldwidebrandvolumecalculatedconsistentlywithMCBCownedvolume.Contractbrewingandwholesalervolumeisincludedwithinfinancialvolume,butisremovedfromworldwidebrandvolume,asthisisnon-ownedvolumeforwhichwedonotdirectlycontrolperformance.OurworldwidebrandvolumedefinitionalsoincludesanadjustmentfromSales-to-Wholesaler(STW)volumetoSales-to-Retailer(STR)volume.Webelievethebrandvolumemetricisimportantbecause,unlikefinancialvolumeandSTWs,itprovidestheclosestindicationoftheperformanceofourbrandsinrelationtomarketandcompetitorsalestrends.
Effectiveinthefirstquarterof2018,werevisedournetsalesrevenue(NSR)perHLperformancediscussionstobeonabrandvolumebasis,suchthatallper-hectolitercalculationsnowincludeownedandactivelymanagedbrandvolume,alongwithroyaltyvolume,inthedenominator,aswellasthefinancialimpactofthesesalesinthenumerator,unlessotherwiseindicated.
UseofNon-GAAPMeasures
InadditiontofinancialmeasurespresentedonthebasisofaccountingprinciplesgenerallyacceptedintheU.S.("U.S.GAAP"),wealsopresent"underlyingpretaxandnetincome,""underlyingincomeperdilutedshare,""underlyingeffectivetaxrate,"and"underlyingfreecashflow,"whicharenon-GAAPmeasuresandshouldbeviewedassupplementsto(notsubstitutesfor)ourresultsofoperationspresentedunderU.S.GAAP.Wealsopresentunderlyingearningsbeforeinterest,taxes,depreciation,andamortization("underlyingEBITDA")asanon-GAAPmeasure,aswellasunderlyingEBITDAmargin,whichiscalculatedbydividingunderlyingEBITDAbyU.S.GAAPnetsales.Ourmanagementusesunderlyingincome,underlyingincomeperdilutedshare,underlyingEBITDA(andmargin),andunderlyingeffectivetaxrateasmeasuresofoperatingperformance,aswellasunderlyingfreecashflowinthemeasureofcashgeneratedfromcoreoperations,toassistincomparingperformancefromperiodtoperiodonaconsistentbasis;asameasureforplanningandforecastingoverallexpectationsandforevaluatingactualresultsagainstsuchexpectations;incommunicationswiththeboardofdirectors,stockholders,analystsandinvestorsconcerningourfinancialperformance;asusefulcomparisonstotheperformanceofourcompetitors;andasmetricsofcertainmanagementincentivecompensationcalculations.Webelievethatunderlyingincome,underlyingincomeperdilutedshare,underlyingEBITDA(andmargin),andunderlyingeffectivetaxrateperformanceareusedby,andareusefulto,investorsandotherusersofourfinancialstatementsinevaluatingouroperatingperformance,aswellasunderlyingfreecashflowinevaluatingourgenerationofcashfromcoreoperations,becausetheyprovideanadditionaltooltoevaluateourperformancewithoutregardtospecialandnon-coreitems,whichcanvarysubstantiallyfromcompanytocompanydependinguponaccountingmethodsandbookvalueofassetsandcapitalstructure.Inadditiontothereasonsdiscussedabove,weconsiderunderlyingfreecashflowanimportantmeasureofourabilitytogeneratecash,growourbusinessandenhanceshareholdervalue,drivenbycoreoperationsandafteradjustingfornon-coreitems.Fordiscussionandanalysisofourliquidity,seetheconsolidatedstatementsofcashflowsandtheLiquidityandCapitalResourcessectionofourManagement’sDiscussionandAnalysisofFinancialConditionandResultsofOperationsinourlatestForm10-Kand10-QfilingswiththeSEC.
Wehaveprovidedreconciliationsofallhistoricalnon-GAAPmeasurestotheirnearestU.S.GAAPmeasureandhaveconsistentlyappliedtheadjustmentswithinourreconciliationsinarrivingateachnon-GAAPmeasure.TheseadjustmentsconsistofspecialitemsfromourU.S.GAAPfinancialstatementsaswellasothernon-coreitems,suchasacquisitionandintegrationrelatedcosts,unrealizedmark-to-marketgainsandlosses,andgainsandlossesonsalesofnon-operatingassets,includedinourU.S.GAAPresultsthatwarrantadjustmenttoarriveatnon-GAAPresults.Weconsidertheseitemstobenecessaryadjustmentsforpurposesofevaluatingourongoingbusinessperformanceandareoftenconsiderednon-recurring.Suchadjustmentsaresubjectiveandinvolvesignificantmanagementjudgment.
OurguidanceforunderlyingCorporateMG&A,underlyingdepreciationandamortization,underlyingfreecashflowandunderlyingeffectivetaxratearealsonon-GAAPfinancialmeasuresthatexcludeorotherwisehavebeenadjustedforspecialitemsfromourU.S.GAAPfinancialstatementsaswellasothernon-coreitems,suchasacquisitionandintegrationrelatedcosts,unrealizedmark-to-marketgainsandlosses,andgainsandlossesonsalesofnon-operatingassets,includedinourU.S.GAAPresultsthatwarrantadjustmenttoarriveatnon-GAAPresults.Weconsidertheseitemstobenecessaryadjustmentsforpurposesofevaluatingourongoingbusinessperformanceandareoftenconsiderednon-recurring.Suchadjustmentsaresubjectiveandinvolvesignificantmanagementjudgment.WeareunabletoreconciletheabovedescribedguidancemeasurestotheirnearestU.S.GAAPmeasureswithoutunreasonableeffortsbecauseweareunabletopredictwithareasonabledegreeofcertaintytheactualimpactofthespecialandothernon-coreitems.Bytheirverynature,specialandothernon-coreitemsaredifficulttoanticipatewithprecisionbecausetheyaregenerallyassociatedwithunexpectedandunplannedeventsthatimpactourcompanyanditsfinancialresults.Therefore,weareunabletoprovideareconciliationofthesemeasures.
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ReconciliationstoNearestU.S.GAAPMeasures
UnderlyingEBITDA
($inmillions)(Unaudited) ThreeMonthsEnded
June30,2018 %change June30,2017U.S.GAAP:Netincome(loss)attributabletoMCBC $ 424.1 28.6% $ 329.9
Add: Netincome(loss)attributabletononcontrollinginterests 6.7 31.4% 5.1U.S.GAAP:Netincome(loss) 430.8 28.6% 335.0
Add: Interestexpense(income),net 76.7 (14.0)% 89.2Add: Incometaxexpense(benefit) 92.2 (26.4)% 125.2Add: Depreciationandamortization 215.9 8.5% 198.9Adjustmentsincludedinunderlyingincome(1) (24.9) N/M 58.8AdjustmentstoarriveatunderlyingEBITDA(2) (7.4) 155.2% (2.9)
Non-GAAP:UnderlyingEBITDA $ 783.3 (2.6)% $ 804.2
($inmillions)(Unaudited) SixMonthsEnded
June30,2018 %change June30,2017U.S.GAAP:Netincome(loss)attributabletoMCBC $ 702.2 30.4% $ 538.4
Add: Netincome(loss)attributabletononcontrollinginterests 11.1 (4.3)% 11.6U.S.GAAP:Netincome(loss) 713.3 29.7% 550.0
Add: Interestexpense(income),net 159.9 (13.9)% 185.8Add: Incometaxexpense(benefit) 167.1 (12.6)% 191.1Add: Depreciationandamortization 429.6 8.5% 396.0Adjustmentsincludedinunderlyingincome(1) (244.7) N/M 10.4AdjustmentstoarriveatunderlyingEBITDA(2) (15.9) 152.4% (6.3)
Non-GAAP:UnderlyingEBITDA $ 1,209.3 (8.9)% $ 1,327.0
N/M=Notmeaningful
(1) Includesadjustmentstonon-GAAPunderlyingincomewithinthetableaboverelatedtospecialandnon-coreitems.(2) Representsadjustmentstoremoveamountsrelatedtointerest,depreciationandamortizationincludedintheadjustmentstonon-GAAPunderlyingincomeabove,astheseitemsareadded
backasadjustmentstonetincomeattributabletoMCBC.
UnderlyingFreeCashFlow
(Inmillions)(Unaudited) SixMonthsEnded
June30,2018 June30,2017U.S.GAAP: NetCashProvidedby(UsedIn)OperatingActivities $ 1,297.8 $ 818.5Less: Additionstoproperties(1) (351.1) (354.0)Add/Less: Cashimpactofspecialitems(2) (321.6) 59.0Add: Non-corecostsrelatedtoacquisitionofbusinesses(3) 34.7 63.2Non-GAAP: UnderlyingFreeCashFlow $ 659.8 $ 586.7
(1) Includedinnetcashusedininvestingactivities.(2) Includedinnetcashprovidedby(usedin)operatingactivities.ForthesixmonthsendedJune30,2018,primarilyreflectsthesettlementpaymentreceivedrelatingtoapurchaseprice
adjustmentandforthesixmonthsendedJune30,2017,primarilyreflectscostspaidforbreweryclosuresandrestructuringactivities.(3) IncludedinnetcashprovidedbyoperatingactivitiesandreflectscostspaidassociatedwiththeAcquisitionof58%ofMillerCoors,LLC,andtheMillerglobalbrandportfolio.
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StatementsofOperations--MolsonCoorsBrewingCompanyandSubsidiaries
CondensedConsolidatedStatementsofOperations
(Inmillions,exceptpersharedata)(Unaudited) ThreeMonthsEnded SixMonthsEnded
June30,2018 June30,2017 June30,2018 June30,2017Financialvolumeinhectoliters 27.745 28.340 48.558 50.218Sales $ 3,820.5 $ 3,793.1 $ 6,688.5 $ 6,706.9Excisetaxes (735.3) (701.8) (1,271.8) (1,166.9)Netsales 3,085.2 3,091.3 5,416.7 5,540.0Costofgoodssold (1,739.1) (1,755.5) (3,274.8) (3,127.8)Grossprofit 1,346.1 1,335.8 2,141.9 2,412.2
Marketing,generalandadministrativeexpenses (744.7) (782.4) (1,425.8) (1,487.7)Specialitems,net (10.5) (16.5) 304.3 (23.2)Operatingincome(loss) 590.9 536.9 1,020.4 901.3
Interestincome(expense),net (76.7) (89.2) (159.9) (185.8)Otherpensionandpostretirementbenefits(costs),net 9.9 9.4 19.9 22.7Otherincome(expense),net (1.1) 3.1 — 2.9Income(loss)beforeincometaxes 523.0 460.2 880.4 741.1
Incometaxbenefit(expense) (92.2) (125.2) (167.1) (191.1)Netincome(loss) 430.8 335.0 713.3 550.0
Net(income)lossattributabletononcontrollinginterests (6.7) (5.1) (11.1) (11.6)Netincome(loss)attributabletoMCBC $ 424.1 $ 329.9 $ 702.2 $ 538.4
Basicnetincome(loss)attributabletoMCBCpershare: $ 1.96 $ 1.53 $ 3.25 $ 2.50Dilutednetincome(loss)attributabletoMCBCpershare: $ 1.96 $ 1.52 $ 3.24 $ 2.49
Weightedaverageshares-basic 216.0 215.4 215.9 215.3Weightedaverageshares-diluted 216.5 216.4 216.6 216.4
Dividendspershare $ 0.41 $ 0.41 $ 0.82 $ 0.82
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MolsonCoorsBrewingCompanyandSubsidiariesU.S.ResultsofOperations (Inmillions)(Unaudited) ThreeMonthsEnded SixMonthsEnded
June30,2018 June30,2017 June30,2018 June30,2017Financialvolumeinhectoliters(1) 18.338 19.190 33.056 34.962
Sales(1) $ 2,354.6 $ 2,433.0 $ 4,216.3 $ 4,424.4Excisetaxes (282.1) (294.1) (496.0) (535.6)Netsales(1) 2,072.5 2,138.9 3,720.3 3,888.8Costofgoodssold(1) (1,189.7) (1,180.3) (2,179.8) (2,205.4)Grossprofit 882.8 958.6 1,540.5 1,683.4
Marketing,generalandadministrativeexpenses (435.1) (458.8) (828.2) (864.5)Specialitems,net(2) (3.3) (12.6) (4.8) (15.1)Operatingincome 444.4 487.2 707.5 803.8
Interestincome(expense),net 1.6 — 0.4 —Otherincome(expense),net (0.5) (0.7) (0.7) (0.7)Income(loss)beforeincometaxes $ 445.5 $ 486.5 $ 707.2 $ 803.1
Add/(less):Specialitems,net(2) 3.3 12.6 4.8 15.1Acquisitionandintegrationrelatedcosts(3) 0.9 0.8 2.0 5.3
Non-GAAP:Underlyingpretaxincome(loss) $ 449.7 $ 499.9 $ 714.0 $ 823.5Add :Interestexpense(income),net (1.6) — (0.4) —Add :Depreciationandamortization 129.6 121.3 254.4 240.6AdjustmentstoarriveatunderlyingEBITDA(4) (1.4) — (2.8) —
Non-GAAP:UnderlyingEBITDA $ 576.3 $ 621.2 $ 965.2 $ 1,064.1
(1) Includesgrossinter-segmentsales,purchases,andvolumes,whichareeliminatedintheconsolidatedtotals.(2) SeePartI—Item1.FinancialStatements,Note6,"SpecialItems"oftheForm10-Qfordetaileddiscussionofspecialitems.SpecialitemsforthethreeandsixmonthsendedJune30,2018,
includesaccelerateddepreciationinexcessofnormaldepreciationof$1.4millionand$2.8million,respectively.TheseaccelerateddepreciationchargesareincludedinouradjustmentstoarriveatunderlyingEBITDA.
(3) ForthethreeandsixmonthsendedJune30,2018,$0.9millionand$2.0million,respectively,ofintegrationcostswereincurredincostofgoodssold,andforthethreeandsixmonthsendedJune30,2017,$0.7millionand$1.2million,respectively,ofintegrationcostswereincurredincostofgoodssold.ForthethreeandsixmonthsendedJune30,2017,integrationcostsof$0.1millionand$4.1million,respectively,wereincurredinmarketing,general&administrativeexpenses.
(4) Representsadjustmentstoremoveamountsrelatedtointerest,depreciationandamortizationincludedintheadjustmentstonon-GAAPunderlyingincomeabove,astheseitemsareaddedbackasadjustmentstonetincomeattributabletoMCBC.
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MolsonCoorsBrewingCompanyandSubsidiariesCanadaResultsofOperations (Inmillions)(Unaudited) ThreeMonthsEnded SixMonthsEnded
June30,2018 June30,2017 June30,2018 June30,2017Financialvolumeinhectoliters(1) 2.473 2.530 4.180 4.323
Sales(1) $ 524.6 $ 527.6 $ 899.5 $ 905.0Excisetaxes (127.2) (120.0) (218.3) (206.3)Netsales(1) 397.4 407.6 681.2 698.7Costofgoodssold(1) (235.7) (233.4) (423.1) (414.5)Grossprofit 161.7 174.2 258.1 284.2
Marketing,generalandadministrativeexpenses (94.3) (104.7) (175.3) (200.8)Specialitems,net(2) (5.7) (1.0) (11.3) (2.2)Operatingincome(loss) 61.7 68.5 71.5 81.2
Otherincome(expense),net (0.4) 1.2 (1.1) 9.4Income(loss)beforeincometaxes $ 61.3 $ 69.7 $ 70.4 $ 90.6
Add/(less):Specialitems,net(2) 5.7 1.0 11.3 2.2Acquisitionandintegrationrelatedcosts(3) 0.2 2.8 0.3 2.8Othernon-coreitems(4) — — — (8.1)
Non-GAAP:Underlyingpretaxincome(loss) $ 67.2 $ 73.5 $ 82.0 $ 87.5Add :Depreciationandamortization 35.0 29.0 71.0 59.8AdjustmentstoarriveatunderlyingEBITDA(5) (6.0) (1.1) (12.1) (2.3)
Non-GAAP:UnderlyingEBITDA $ 96.2 $ 101.4 $ 140.9 $ 145.0
(1) Includesgrossinter-segmentsales,purchases,andvolumes,whichareeliminatedintheconsolidatedtotals.(2) SeePartI—Item1.FinancialStatements,Note6,"SpecialItems"oftheForm10-Qfordetaileddiscussionofspecialitems.SpecialitemsforthethreeandsixmonthsendedJune30,2018,
includesaccelerateddepreciationinexcessofnormaldepreciationof$1.0millionand$2.0million,respectively,andforthethreeandsixmonthsendedJune30,2017,includesaccelerateddepreciationinexcessofnormaldepreciationof$1.1millionand$2.3million,respectively,relatedtotheplannedclosureoftheVancouverbrewery.AlsoincurredinthethreeandsixmonthsendedJune30,2018,areaccelerateddepreciationchargesinexcessofnormaldepreciationof$5.0millionand$10.1million,respectively,relatedtotheplannedclosureofourexistingMontrealbrewery.TheseaccelerateddepreciationchargesinexcessofnormaldepreciationareincludedinouradjustmentstoarriveatunderlyingEBITDA.
(3) ForthethreeandsixmonthsendedJune30,2018,$0.2millionand$0.3million,respectively,ofintegrationrelatedcostswereincurredincostofgoodssold.ForthethreeandsixmonthsendedJune30,2017,$2.8millionofintegrationrelatedcostswereincurredincostofgoodssold.
(4) ForthesixmonthsendedJune30,2017,againof$8.1millionwasrecordedinotherincome(expense),netresultingfromapurchasepriceadjustmentrelatedtothehistoricalsaleofMolsonInc.’sownershipinterestintheMontrealCanadiens.
(5) Representsadjustmentstoremoveamountsrelatedtointerest,depreciationandamortizationincludedintheadjustmentstonon-GAAPunderlyingincomeabove,astheseitemsareaddedbackasadjustmentstonetincomeattributabletoMCBC.
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MolsonCoorsBrewingCompanyandSubsidiariesEuropeResultsofOperations (Inmillions)(Unaudited) ThreeMonthsEnded SixMonthsEnded
June30,2018 June30,2017 June30,2018 June30,2017Financialvolumeinhectoliters(1)(2) 6.916 6.715 11.320 11.074
Sales(2) $ 893.9 $ 796.2 $ 1,492.4 $ 1,310.6Excisetaxes (307.8) (271.5) (532.0) (404.3)Netsales(2) 586.1 524.7 960.4 906.3Costofgoodssold (353.6) (315.8) (621.3) (541.9)Grossprofit 232.5 208.9 339.1 364.4
Marketing,generalandadministrativeexpenses (143.7) (138.0) (274.1) (264.8)Specialitems,net(3) 0.3 (2.6) (4.8) (5.2)Operatingincome(loss) 89.1 68.3 60.2 94.4
Interestincome(expense),net (1.4) 1.0 (2.1) 2.0Otherincome(expense),net (0.9) 0.6 (1.2) 0.5Income(loss)beforeincometaxes $ 86.8 $ 69.9 $ 56.9 $ 96.9
Add/(less):Specialitems,net(3) (0.3) 2.6 4.8 5.2Acquisitionandintegrationrelatedcosts(4) 0.1 0.1 0.3 0.3
Non-GAAP:Underlyingpretaxincome(loss) $ 86.6 $ 72.6 $ 62.0 $ 102.4Add: Interestexpense(income),net 1.4 (1.0) 2.1 (2.0)Add :Depreciationandamortization 47.8 45.1 97.2 88.9AdjustmentstoarriveatunderlyingEBITDA(5) — (1.8) (1.0) (4.0)
Non-GAAP:UnderlyingEBITDA $ 135.8 $ 114.9 $ 160.3 $ 185.3
(1)Excludesroyaltyvolumeof0.490millionhectolitersand0.796millionhectolitersforthethreeandsixmonthsendedJune30,2018,respectively,andexcludesroyaltyvolumeof0.479millionhectolitersand0.804millionhectolitersforthethreeandsixmonthsendedJune30,2017,respectively.
(2) Includesgrossinter-segmentsalesandvolumes,whichareeliminatedintheconsolidatedtotals.(3) SeePartI—Item1.FinancialStatements,Note6,"SpecialItems"oftheForm10-Qfordetaileddiscussionofspecialitems.SpecialitemsforthesixmonthsendedJune30,2018,includes
accelerateddepreciationinexcessofnormaldepreciationof$1.0million,andforthethreeandsixmonthsendedJune30,2017,includesaccelerateddepreciationinexcessofnormaldepreciationof$1.8millionand$4.0million,respectively,relatedtotheclosureofourBurtonSouthbreweryintheU.K.,whichwascompletedinthefirstquarterof2018.TheseaccelerateddepreciationchargesinexcessofnormaldepreciationareincludedinouradjustmentstoarriveatunderlyingEBITDA.
(4) ForthethreeandsixmonthsendedJune30,2018,$0.1millionand$0.3million,respectively,ofintegrationrelatedcostswereincurredincostofgoodssold,andforthethreeandsixmonthsendedJune30,2017,$0.1millionand$0.3million,respectively,ofacquisitionandintegrationrelatedcostswereincurredincostofgoodssold.
(5) Representsadjustmentstoremoveamountsrelatedtointerest,depreciationandamortizationincludedintheadjustmentstonon-GAAPunderlyingincomeabove,astheseitemsareaddedbackasadjustmentstonetincomeattributabletoMCBC.
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MolsonCoorsBrewingCompanyandSubsidiariesInternationalResultsofOperations (Inmillions)(Unaudited) ThreeMonthsEnded SixMonthsEnded
June30,2018 June30,2017 June30,2018 June30,2017Financialvolumeinhectoliters(1) 0.637 0.643 1.157 1.171Sales $ 86.1 $ 81.3 $ 150.9 $ 147.6Excisetaxes (18.2) (16.2) (25.5) (20.7)Netsales 67.9 65.1 125.4 126.9Costofgoodssold(2) (44.1) (47.8) (81.9) (86.8)Grossprofit 23.8 17.3 43.5 40.1
Marketing,generalandadministrativeexpenses (20.6) (24.7) (35.7) (45.7)Specialitems,net(3) (1.8) (0.3) (2.8) (0.6)Operatingincome(loss) 1.4 (7.7) 5.0 (6.2)
Otherincome(expense),net (0.1) — — —Income(loss)beforeincometaxes $ 1.3 $ (7.7) $ 5.0 $ (6.2)
Add/(less):Specialitems,net(3) 1.8 0.3 2.8 0.6Acquisitionandintegrationrelatedcosts(4) 0.8 4.0 0.8 4.9
Non-GAAP:Underlyingpretaxincome(loss) $ 3.9 $ (3.4) $ 8.6 $ (0.7)Add :Depreciationandamortization 2.6 2.5 5.0 4.8
Non-GAAP:UnderlyingEBITDA $ 6.5 $ (0.9) $ 13.6 $ 4.1
(1)Excludesroyaltyvolumeof0.567millionhectolitersand0.977millionhectolitersforthethreeandsixmonthsendedJune30,2018,respectively,andexcludesroyaltyvolumeof0.554millionhectolitersand1.027millionhectolitersforthethreeandsixmonthsendedJune30,2017,respectively.
(2) Includesgrossinter-segmentpurchases,whichareeliminatedintheconsolidatedtotals.(3) SeePartI—Item1.FinancialStatements,Note6,"SpecialItems"oftheForm10-Qfordetaileddiscussionofspecialitems.(4) ForthethreeandsixmonthsendedJune30,2017,$1.4millionofintegrationcostswereincurredincostofgoodssold.ForthethreeandsixmonthsendedJune30,2018,integrationcosts
of$0.8millionwereincurredinmarketing,general&administrativeexpenses,andforthethreeandsixmonthsendedJune30,2017,integrationcostsof$2.6millionand$3.5million,respectively,ofintegrationcostswereincurredinmarketing,general&administrativeexpenses.
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MolsonCoorsBrewingCompanyandSubsidiariesCorporateResultsofOperations (Inmillions)(Unaudited) ThreeMonthsEnded SixMonthsEnded
June30,2018 June30,2017 June30,2018 June30,2017Financialvolumeinhectoliters — — — —Sales $ 0.3 $ 0.3 $ 0.5 $ 0.6Excisetaxes — — — —Netsales 0.3 0.3 0.5 0.6Costofgoodssold 45.0 (23.5) (39.8) 39.5Grossprofit 45.3 (23.2) (39.3) 40.1
Marketing,generalandadministrativeexpenses (51.0) (56.2) (112.5) (111.9)Specialitems,net(1) — — 328.0 (0.1)Operatingincome(loss) (5.7) (79.4) 176.2 (71.9)
Interestexpense,net (76.9) (90.2) (158.2) (187.8)Otherpensionandpostretirementbenefits(costs),net 9.9 9.4 19.9 22.7Otherincome(expense),net 0.8 2.0 3.0 (6.3)Income(loss)beforeincometaxes $ (71.9) $ (158.2) $ 40.9 $ (243.3)
Add/(less):Specialitems,net(1) — — (328.0) 0.1Acquisitionandintegrationrelatedcosts(2) 7.7 11.2 16.5 24.6Unrealizedmark-to-market(gains)andlosses(3) (45.1) 23.4 39.6 (39.7)Non-coreotherpensionandpostretirementbenefits(costs),net(4) — — 0.1 (2.9)
Non-GAAP:Underlyingpretaxincome(loss) $ (109.3) $ (123.6) $ (230.9) $ (261.2)Add: Interestexpense(income),net 76.9 90.2 158.2 187.8Add :Depreciationandamortization 0.9 1.0 2.0 1.9
Non-GAAP:UnderlyingEBITDA $ (31.5) $ (32.4) $ (70.7) $ (71.5)
(1)SeePartI—Item1.FinancialStatements,Note6,"SpecialItems"oftheForm10-Qfordetaileddiscussionofspecialitems.(2) Inconnectionwiththeacquisition,forthethreeandsixmonthsendedJune30,2018,wehaverecorded$7.7millionand$16.5million,respectively,ofintegrationcostswithinmarketing,
general&administrativeexpenses,andforthethreeandsixmonthsendedJune30,2017,wehaverecorded$11.2millionand$24.6million,respectively,ofintegrationcostswithinmarketing,general&administrativeexpenses.
(3) Theunrealizedchangesinfairvalueonourcommodityswaps,whichareeconomichedges,arerecordedascostofgoodssoldwithinourCorporatebusinessactivities.Astheexposurewearemanagingisrealized,wereclassifythegainorlosstothesegmentinwhichtheunderlyingexposureresides,allowingoursegmentstorealizetheeconomiceffectsofthederivativewithouttheresultingunrealizedmark-to-marketvolatility.
(4) ForthesixmonthsendedJune30,2017,includestheretrospectiveimpactoftheFASB'snewpensionandOPEBaccountingstandardandmovingthenon-servicecostcomponentofnetperiodicpensionandotherpostretirementbenefitstotheCorporatesegment.SeePartI—Item1.FinancialStatements,Note2,"NewAccountingPronouncements"oftheForm10-Qfordetaileddiscussion.
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BalanceSheet
CondensedConsolidatedBalanceSheets
(Inmillions,exceptparvalue)(Unaudited) Asof
June30,2018 December31,2017AssetsCurrentassets:Cashandcashequivalents $ 792.9 $ 418.6Accountsreceivable,net 984.9 733.8Otherreceivables,net 131.1 168.2Inventories,net 637.5 591.5Othercurrentassets,net 341.1 277.6Totalcurrentassets 2,887.5 2,189.7
Properties,net 4,599.4 4,673.7Goodwill 8,332.6 8,405.5Otherintangibles,net 14,018.4 14,296.5Otherassets 723.0 681.5Totalassets $ 30,560.9 $ 30,246.9LiabilitiesandequityCurrentliabilities:Accountspayableandothercurrentliabilities $ 2,971.0 $ 2,684.5Currentportionoflong-termdebtandshort-termborrowings 1,411.0 714.8Totalcurrentliabilities 4,382.0 3,399.3
Long-termdebt 9,455.1 10,598.7Pensionandpostretirementbenefits 828.1 848.5Deferredtaxliabilities 1,771.0 1,648.6Otherliabilities 328.1 316.8Totalliabilities 16,764.3 16,811.9
MolsonCoorsBrewingCompanystockholders'equityCapitalstock:Preferredstock,$0.01parvalue(authorized:25.0shares;noneissued) — —ClassAcommonstock,$0.01parvaluepershare(authorized:500.0shares;issuedandoutstanding:2.6sharesand2.6shares,respectively) — —ClassBcommonstock,$0.01parvaluepershare(authorized:500.0shares;issued:205.1sharesand204.7shares,respectively) 2.0 2.0ClassAexchangeableshares,noparvalue(issuedandoutstanding:2.9sharesand2.9shares,respectively) 107.7 107.7ClassBexchangeableshares,noparvalue(issuedandoutstanding:14.7sharesand14.7shares,respectively) 553.2 553.2
Paid-incapital 6,707.0 6,688.5Retainedearnings 7,703.5 7,206.1Accumulatedothercomprehensiveincome(loss) (1,025.4) (860.0)ClassBcommonstockheldintreasuryatcost(9.5sharesand9.5shares,respectively) (471.4) (471.4)
TotalMolsonCoorsBrewingCompanystockholders'equity 13,576.6 13,226.1Noncontrollinginterests 220.0 208.9Totalequity 13,796.6 13,435.0
Totalliabilitiesandequity $ 30,560.9 $ 30,246.9
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CashFlowStatement
CondensedConsolidatedStatementsofCashFlows
($inmillions)(Unaudited) SixMonthsEnded
June30,2018 June30,2017Cashflowsfromoperatingactivities:Netincome(loss)includingnoncontrollinginterests $ 713.3 $ 550.0Adjustmentstoreconcilenetincome(loss)tonetcashprovidedbyoperatingactivities:Depreciationandamortization 429.6 396.0Amortizationofdebtissuancecostsanddiscounts 7.2 11.2Share-basedcompensation 25.1 31.6(Gain)lossonsaleorimpairmentofpropertiesandotherassets,net — (4.3)Unrealized(gain)lossonforeigncurrencyfluctuationsandderivativeinstruments,net 38.4 (41.5)Incometax(benefit)expense 167.1 191.1Incometax(paid)received 20.0 23.5Interestexpense,excludinginterestamortization 155.8 177.6Interestpaid (152.5) (175.4)Pensionexpense(benefit) (29.5) (31.4)Pensioncontributionspaid (5.0) (72.1)Changeincurrentassetsandliabilitiesandother (71.7) (237.8)
Netcashprovidedby(usedin)operatingactivities 1,297.8 818.5Cashflowsfrominvestingactivities:
Additionstoproperties (351.1) (354.0)Proceedsfromsalesofpropertiesandotherassets 4.4 46.1Other (50.5) 6.0
Netcashprovidedby(usedin)investingactivities (397.2) (301.9)Cashflowsfromfinancingactivities:
Exerciseofstockoptionsunderequitycompensationplans 6.3 1.1Dividendspaid (177.0) (176.6)Paymentsondebtandborrowings (2.4) (2,201.5)Proceedsondebtandborrowings — 1,536.0Netproceedsfrom(paymentson)revolvingcreditfacilitiesandcommercialpaper (376.1) 282.0Changeinoverdraftbalancesandother 24.5 (34.2)
Netcashprovidedby(usedin)financingactivities (524.7) (593.2)Cashandcashequivalents:
Netincrease(decrease)incashandcashequivalents 375.9 (76.6)Effectofforeignexchangeratechangesoncashandcashequivalents (1.6) 18.6Balanceatbeginningofyear 418.6 560.9
Balanceatendofperiod $ 792.9 $ 502.9
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ReconciliationstoNearestU.S.GAAPMeasuresbyLineItem
SecondQuarter2018 ThreeMonthsEndedJune30,2018
(Inmillions)(Unaudited) Netsales
Costofgoodssold(1)
Grossprofit
Marketing,generaland
administrativeexpenses(2)
Specialitems,net(3)
Operatingincome(loss)
Reported(U.S.GAAP) $ 3,085.2 $ (1,739.1) $ 1,346.1 $ (744.7) $ (10.5) $ 590.9Adjustments to arrive at underlying:Specialitems,netEmployee-relatedcharges — — — — 1.0 1.0Impairmentsorassetabandonmentcharges — — — — 8.3 8.3Terminationfeesandother(gains)losses — — — — 1.2 1.2
Non-CoreitemsIntegrationrelatedcosts — 1.2 1.2 8.5 — 9.7Unrealizedmark-to-market(gains)losses — (45.1) (45.1) — — (45.1)
Taxeffectsonspecialandnon-GAAPitems — — — — — —Underlying(Non-GAAP) $ 3,085.2 $ (1,783.0) $ 1,302.2 $ (736.2) $ — $ 566.0
SecondQuarter2018 ThreeMonthsEndedJune30,2018
(Inmillions,exceptpersharedata)(Unaudited)
Interestincome
(expense),net
Otherpensionand
postretirementbenefits(costs),net
Otherincome
(expense),net
Income(loss)beforeincometaxes
Incometax
benefit(expense)
Netincome
(loss)attributabletoMCBC
Netincome(loss)
attributabletoMCBCperdilutedshare
Reported(U.S.GAAP) $ (76.7) $ 9.9 $ (1.1) $ 523.0 $ (92.2) $ 424.1 $ 1.96Adjustments to arrive at underlying:Specialitems,netEmployee-relatedcharges — — — 1.0 — 1.0 0.01Impairmentsorassetabandonmentcharges — — — 8.3 — 8.3 0.04Terminationfeesandother(gains)losses — — — 1.2 — 1.2 0.01
Non-CoreitemsIntegrationrelatedcosts — — — 9.7 — 9.7 0.04Unrealizedmark-to-market(gains)losses — — — (45.1) — (45.1) (0.21)
Taxeffectsonspecialandnon-GAAPitems — — — — 6.9 6.9 0.03Underlying(Non-GAAP) $ (76.7) $ 9.9 $ (1.1) $ 498.1 $ (85.3) $ 406.1 $ 1.88
(1) Adjustmentsrelatetothefollowingsegments:U.S.segment$0.9million,Canadasegment$0.2million,Europesegment$0.1million,Corporatesegment$(45.1)million.(2) Adjustmentsrelatetothefollowingsegment:Internationalsegment$0.8million,Corporatesegment$7.7million.(3) Adjustmentsrelatetothefollowingsegments:U.S.segment$3.3million,Canadasegment$5.7million,Europesegment$(0.3)million,Internationalsegment$1.8million.
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YTDSecondQuarter2018 SixMonthsEndedJune30,2018
(Inmillions)(Unaudited) Netsales
Costofgoodssold(1)
Grossprofit
Marketing,generaland
administrativeexpenses(2)
Specialitems,net(3)
Operatingincome(loss)
Reported(U.S.GAAP) $ 5,416.7 $ (3,274.8) $ 2,141.9 $ (1,425.8) $ 304.3 $ 1,020.4Adjustments to arrive at underlying:Specialitems,netEmployee-relatedcharges — — — — 4.9 4.9Impairmentsorassetabandonmentcharges — — — — 17.6 17.6Terminationfeesandother(gains)losses — — — — (326.8) (326.8)
Non-CoreitemsIntegrationrelatedcosts — 2.6 2.6 17.3 — 19.9Unrealizedmark-to-market(gains)losses — 39.6 39.6 — — 39.6Othernon-coreitems — — — — — —
Taxeffectsonspecialandnon-GAAPitems — — — — — —Underlying(Non-GAAP) $ 5,416.7 $ (3,232.6) $ 2,184.1 $ (1,408.5) $ — $ 775.6
YTDSecondQuarter2018 SixMonthsEndedJune30,2018
(Inmillions,exceptpersharedata)(Unaudited)
Interestincome
(expense),net
Otherpensionand
postretirementbenefits
(costs),net(4)
Otherincome
(expense),net
Income(loss)beforeincometaxes
Incometax
benefit(expense)
Netincome
(loss)attributabletoMCBC
Netincome(loss)
attributabletoMCBCperdilutedshare
Reported(U.S.GAAP) $ (159.9) $ 19.9 $ — $ 880.4 $ (167.1) $ 702.2 $ 3.24Adjustments to arrive at underlying:Specialitems,netEmployee-relatedcharges — — — 4.9 — 4.9 0.03Impairmentsorassetabandonmentcharges — — — 17.6 — 17.6 0.08Terminationfeesandother(gains)losses — — — (326.8) — (326.8) (1.51)
Non-CoreitemsIntegrationrelatedcosts — — — 19.9 — 19.9 0.09Unrealizedmark-to-market(gains)losses — — — 39.6 — 39.6 0.18Non-coreotherpensionandpostretirementbenefits(costs),net — 0.1 — 0.1 — 0.1 —
Taxeffectsonspecialandnon-GAAPitems — — — — 52.9 52.9 0.25Underlying(Non-GAAP) $ (159.9) $ 20.0 $ — $ 635.7 $ (114.2) $ 510.4 $ 2.36
(1)Adjustmentsrelatetothefollowingsegments:U.S.segment$2.0million,Canadasegment$0.3million,Europesegment$0.3million,Corporatesegment$39.6million.(2) Adjustmentsrelatetothefollowingsegment:Internationalsegment$0.8million,Corporatesegment$16.5million.(3) Adjustmentsrelatetothefollowingsegments:U.S.segment$4.8million,Canadasegment$11.3million,Europesegment$4.8million,Internationalsegment$2.8million,Corporate
segment$(328.0)million.(4) Adjustmentsrelatetothefollowingsegment:Corporatesegment$0.1million.
CONTACT:MolsonCoorsNewsMediaColinWheeler,303-927-2443orInvestorRelationsKevinKim,303-927-2515