Investments

Our investments include both equity method and consolidated investments. Those entities identified as variable interest entities ("VIEs") have been evaluated to determine whether we are the primary beneficiary. The investments included under "Consolidated VIEs" below are those for which we have concluded that we are the primary beneficiary and accordingly, we consolidate these entities. We have not provided any financial support to any of our VIEs during the quarter that we were not previously contractually obligated to provide. Authoritative guidance related to the consolidation of VIEs requires that we continually reassess whether we are the primary beneficiary of VIEs in which we have an interest. As such, the conclusion regarding the primary beneficiary status is subject to change and we continually evaluate circumstances that could require consolidation or deconsolidation.

Equity Investments

Investment in MillerCoors

Summarized financial information for MillerCoors is as follows:

Condensed Balance Sheets



	As of
	September 30, 2012		December 31, 2011
	(In millions)
Current assets	$	1,023.6	$	810.9
Non-current assets	8,812.4		8,861.7
Total assets	$	9,836.0	$	9,672.6
Current liabilities	$	900.5	$	922.7
Non-current liabilities	1,338.8		1,471.3
Total liabilities	2,239.3		2,394.0
Noncontrolling interests	31.8		36.7
Owners' equity	7,564.9		7,241.9
Total liabilities and equity	$	9,836.0	$	9,672.6

Results of Operations



	Three Months Ended						Nine Months Ended
	September 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
	(In millions)
Net sales	$	1,993.5		$	1,964.9		$	5,977.3		$	5,796.3
Cost of goods sold	(1,201.1		)	(1,213.3		)	(3,582.9		)	(3,545.1		)
Gross profit	$	792.4		$	751.6		$	2,394.4		$	2,251.2
Operating income(1)	$	310.5		$	179.2		$	1,033.9		$	824.3
Net income attributable to MillerCoors(1)	$	306.9		$	176.4		$	1,020.5		$	809.8

(1)

Results for the three months and nine months ended September 30, 2012, include special charges of $18.7 million and $16.4 million, respectively, primarily due to the write-down of assets related to discontinuing the production of the Home Draft package in the U.S. Results for the three months and nine months ended September 30, 2011, include special charges of $60.0 million for a write-down in the value of the Sparks brand and a $50.9 million charge resulting from the planned assumption of the Milwaukee Brewery Worker's Pension Plan, an under-funded multi-employer pension plan.

The following represents MCBC's proportional share in net income attributable to MillerCoors reported under the equity method:



	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	September 29, 2012			September 24, 2011			September 29, 2012			September 24, 2011
	(In millions, except percentages)
Net income attributable to MillerCoors	$	306.9		$	176.4		$	1,020.5		$	809.8
MCBC economic interest	42		%	42		%	42		%	42		%
MCBC proportionate share of MillerCoors net income	128.9			74.1			428.6			340.1
Amortization of the difference between MCBC contributed cost basis and proportional share of the underlying equity in net assets of MillerCoors(1)	1.2			27.7			3.1			32.6
Share-based compensation adjustment(2)	1.9			(2.4		)	4.8			(0.3		)
Equity income in MillerCoors	$	132.0		$	99.4		$	436.5		$	372.4

(1)

Our net investment in MillerCoors is based on the carrying values of the net assets contributed to the joint venture which is less than our proportional share of underlying equity (42%) of MillerCoors (contributed by both Coors Brewing Company ("CBC") and Miller Brewing Company ("Miller")) by approximately $585 million as of September 29, 2012. This difference, with the exception of goodwill and land, is amortized as additional equity income over the remaining useful lives of the contributed long-lived amortizing assets. The current basis difference combined with the $35.0 million recorded in 2008 and 2009 related to differences resulting from accounting policy elections must be considered to reconcile MillerCoors equity to our investment in MillerCoors.

(2)

The net adjustment is to record all share-based compensation associated with pre-existing equity awards to be settled in Class B common stock held by former employees now employed by MillerCoors and to eliminate all share-based compensation impacts related to pre-existing SABMiller plc equity awards held by former Miller employees now employed by MillerCoors. As of the end of the second quarter of 2011, the share-based awards granted to former CBC employees now employed by MillerCoors became fully vested. As such, no further adjustments will be recorded related to these awards. We are still recording adjustments to eliminate the impacts related to the pre-existing SABMiller plc equity awards, which represent the amounts recorded in 2012.

The following table summarizes our transactions with MillerCoors:



	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	September 29, 2012		September 24, 2011		September 29, 2012		September 24, 2011
	(In millions)
Beer sales to MillerCoors	$	4.6	$	6.2	$	14.8	$	23.7
Beer purchases from MillerCoors	$	3.9	$	2.0	$	9.3	$	6.7
Service agreement costs and other charges to MillerCoors	$	1.0	$	1.7	$	3.0	$	5.1
Service agreement costs and other charges from MillerCoors	$	0.4	$	0.3	$	1.0	$	0.9

As of September 29, 2012, we had $1.9 million of net payables due to MillerCoors, and as of December 31, 2011, we had $2.0 million of net receivables due from MillerCoors.

Consolidated VIEs

The following summarizes the assets of our consolidated VIEs, including noncontrolling interests. None of our consolidated VIEs held debt as of September 29, 2012, or December 31, 2011.



	As of
	September 29, 2012		December 31, 2011
	Total assets
	(In millions)
Grolsch	$	13.4	$	20.4
Cobra U.K.	$	30.1	$	31.6

The following summarizes the results of operations of our consolidated VIEs (including noncontrolling interests).



	Thirteen Weeks Ended								Thirty-Nine Weeks Ended
	September 29, 2012				September 24, 2011				September 29, 2012				September 24, 2011
	Revenues		Pre-tax income		Revenues		Pre-tax income		Revenues		Pre-tax income		Revenues		Pre-tax income
	(In millions)
Grolsch(1)	$	6.5	$	0.9	$	6.8	$	1.0	$	18.1	$	2.6	$	19.7	$	2.8
Cobra U.K.	$	11.7	$	1.5	$	10.1	$	1.7	$	30.7	$	3.6	$	28.7	$	4.8


(1)	Substantially all such sales for Grolsch are made to us and as such, are eliminated upon consolidation.

MC Si'hai Deconsolidation and Impairment

During the third quarter of 2012, there were a number of events that caused us to re-assess the consolidation of our MC Si'hai joint venture in China. Specifically, in the third quarter, (i) we terminated an agreement previously signed in the second quarter of 2012, which was intended to allow us to acquire the noncontrolling interest in the joint venture, and (ii) we decided to also initiate the termination of the joint venture agreement and a proposed liquidation of the joint venture. We terminated the agreement to acquire the joint venture's noncontrolling interest as a result of our joint venture partner's multiple breaches of the agreement, as well as our joint venture partner's failure and inability to satisfy numerous closing conditions. We subsequently began pursuing a path to terminate and liquidate the joint venture pursuant to the terms of the joint venture agreement's dispute resolution process, which requires arbitration. It is expected that the arbitration and liquidation process likely will be protracted and that there may be significant further delays in enforcing any order from the arbitrator with the local authorities.

Due to our termination of the agreement to acquire the joint venture partner's noncontrolling interest and the joint venture agreement and the joint venture partner's actions during the third quarter of 2012, we are not able to exercise legal or operational control over the joint venture in accordance with the terms of the joint venture agreement. As a result, we deconsolidated the joint venture during the third quarter of 2012.

Upon loss of control and subsequent deconsolidation, the fair value of the remaining investment was a liability of $5.4 million representing our share of the joint venture's liabilities at termination of the joint venture. As a result, we recorded an impairment loss of $27.6 million as a Special item in the third quarter of 2012. We do not anticipate any future material impacts to our consolidated financial position, results of operations or cash flows. See Note 12, "Goodwill and Intangible Assets" for further discussion of the MC Si'hai joint venture.