Acquisition of Molson Coors Central Europe (Tables)

9 Months Ended

Sep. 29, 2012

Business Combinations [Abstract]

Business Acquisition, Pro Forma Information, Statements of Operations

he following unaudited pro forma summary presents our Condensed Consolidated Statements of Operations as if MCCE had been acquired on December 26, 2010, the first day of our 2011 fiscal year. These amounts were calculated after conversion to U.S. GAAP, conforming to our accounting policies, and adjusting MCCE's results to reflect the depreciation and amortization that would have been charged assuming the preliminary fair value adjustments to Properties, net and Other intangibles, net resulting from the purchase had been applied from December 26, 2010, together with the consequential tax effects. These adjustments also reflect the removal of StarBev historical interest expense, the addition of interest expense to be prospectively incurred on the debt issued to finance the Acquisition and the removal of the previously mentioned acquisition-related costs of $31.4 million incurred prior to the third quarter. Additional significant adjustments recorded during the second quarter of 2012 include the removal of the following non-recurring, transaction-related costs included in the historical operating results: a $57.9 million Euro currency loss, a $39.2 million loss related to standard pre-issuance U.S. Treasury interest rate hedges ("Treasury Locks"), and bridge facility costs of $13.0 million, as further described in Note 8, "Other Income and Expense" and Note 13, "Debt", as well as expense of $8.6 million related to the fair value adjustment to acquisition date inventory. This unaudited pro forma financial information is not intended to reflect the performance which would have actually resulted had the Acquisition been effected on the dates indicated. Further, the unaudited pro forma results of operations are not necessarily indicative of the results of operations that may be obtained in the future.

	Thirteen Weeks Ended		Thirty-Nine Weeks Ended
	September 24, 2011		September 29, 2012(1)		September 24, 2011
	(In millions)
Net sales	$	1,269.2	$	3,226.8	$	3,338.6
Income from continuing operations before income taxes	$	284.7	$	590.7	$	680.0
Net income attributable to MCBC	$	253.2	$	497.8	$	589.8
Net income per common share attributable to MCBC:
Basic	$	1.36	$	2.76	$	3.16
Diluted	$	1.36	$	2.74	$	3.13

(1) The thirty-nine weeks ended September 29, 2012, include actual results for the period from the Acquisition date of June 15, 2012.

Schedule of Business Acquisition, Fair Value of Consideration Transferred

The following table summarizes the purchase price, inclusive of pre-existing debt assumed and subsequently repaid, to acquire StarBev:

	Fair Value
	(In millions)
Cash consideration to Seller	$	1,816.0
Fair value of convertible note issued to Seller(1)	645.9
Senior debt facilities with third-party creditor(2)	585.0
Total consideration	$	3,046.9
Cash, net of bank overdraft acquired(3)	$	(42.3	)
Subordinated deferred payment obligation ("SDPO") with third-party creditors(4)	423.4
Total purchase price, inclusive of pre-existing debt assumed and subsequently repaid	$	3,428.0

(1) We issued a €500 millionZero Coupon Senior Unsecured Convertible Note due 2013 to the Seller upon close of the Acquisition. See Note 13, "Debt" for further discussion.

(2) According to our agreement with the Seller and in accordance with the terms of the senior debt facility agreement, upon the closing of the Acquisition, we immediately repaid pre-existing StarBev third-party debt including accrued interest.

(3) Consists of $143.6 million of cash acquired and $101.3 million of bank overdrafts assumed as part of MCCE's cash pool arrangement and repaid during the third quarter of 2012.

(4) We assumed the pre-existing StarBev $423.4 million SDPO payable to third-party creditors, which we subsequently repaid on June 29, 2012, in accordance with the terms of the SDPO agreement. The SDPO was held by private investors and accrued interest at 11%. The settlement of the SDPO was not required by our agreement with the Seller.

Schedule of Business Acquisition, Classification of Cash Flows Used

The following table represents the classifications of the cash flows used, which are included within our Condensed Consolidated Statements of Cash Flows:

	(In millions)
Operating activities(1)	$	1.4
Investing activities(2)	2,257.4
Financing activities(1)	424.3
Total cash used	$	2,683.1
Non-cash(3)	$	645.9

(1) Includes the SDPO discussed above, which was subsequently repaid on June 29, 2012, for $425.7 million including the $1.4 million of interest incurred subsequent to the close of the Acquisition noted as "Operating activities" in the table above.

(2) Includes $1,816.0 million of cash consideration to the Seller for shares acquired and release of StarBev's pre-existing obligations to the Seller. Also, included is $585.0 million of pre-existing third-party debt immediately repaid in accordance with our agreement with the Seller and the terms of the senior debt facility agreement. This amount is presented net of cash acquired of $143.6 million.

(3) Reflects the $645.9 million fair value of the convertible note issued to the Seller upon close of the Acquisition. See Note 13, "Debt" for further discussion.

Schedule of Assets Acquired And Liabilities Assumed

The following table represents the preliminary allocation of the total consideration to MCCE's identifiable net assets, fair value of the noncontrolling interest in MCCE, and resulting residual goodwill as of June 15, 2012. These allocated amounts were updated in the third quarter of 2012 and remain subject to revision until our valuation and tax-related adjustments are finalized, which we expect to occur during the fourth quarter of 2012. The changes in the third quarter of 2012 resulted in an increase to Goodwill of approximately $69 million primarily driven by the decrease in the valuation of Other intangibles, net.

	Fair Value
	(In millions)
Cash and cash equivalents	$	143.6
Current assets(1)	260.9
Properties, net	582.0
Other intangibles, net(2)	2,430.8
Other assets	41.0
Total assets acquired	$	3,458.3
Current liabilities(3)	847.6
Non-current liabilities(4)	423.3
Total liabilities assumed	$	1,270.9
Total identifiable net assets	$	2,187.4
Noncontrolling interest measured at fair value	40.6
Goodwill(5)	900.1
Total consideration	$	3,046.9

(1) Includes trade receivables of $152.2 million and inventory of $57.3 million.

(2) See Note 12, "Goodwill and Intangible Assets" for further discussion.

(3) Includes the $423.4 million SDPO assumed, which was subsequently repaid for $425.7 million on June 29, 2012.

(4) Includes $403.4 million of deferred tax liabilities.

(5) The goodwill resulting from the Acquisition is primarily attributable to MCCE's licensed brand brewing, distribution and import business, anticipated synergies and the assembled workforce. We have preliminarily assigned the majority of the goodwill to our Central Europe reporting unit with a portion allocated to the U.K. and Canada reporting units resulting from synergies. The goodwill is not expected to be deductible for tax purposes. See Note 12, "Goodwill and Intangible Assets" for further discussion.