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 VIEs included under "Consolidated VIEs" below are those for which we have concluded that we are the primary beneficiary and accordingly, consolidate these entities. None of our consolidated VIEs held debt as of September 28, 2013, or December 29, 2012. We have not provided any financial support to any of our VIEs during the quarter that we were not previously contractually obligated to provide. Amounts due to and due from our equity method investments are recorded as affiliate accounts payable and affiliate accounts receivable.

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. As of September 28, 2013, and December 29, 2012, our consolidated VIEs are Cobra Beer Partnership, Ltd. ("Cobra U.K.") and Grolsch and our unconsolidated VIEs are Brewers' Retail Inc. ("BRI"), Brewers' Distributor Ltd. ("BDL") and Modelo Molson Imports, L.P. ("MMI").

Equity Investments

Investment in MillerCoors

Summarized financial information for MillerCoors is as follows:

Condensed Balance Sheets



	As of
	September 30, 2013		December 31, 2012
	(In millions)
Current assets	$	956.3	$	841.4
Non-current assets	8,927.0		8,949.9
Total assets	$	9,883.3	$	9,791.3
Current liabilities	$	928.6	$	958.5
Non-current liabilities	1,406.8		1,537.5
Total liabilities	2,335.4		2,496.0
Noncontrolling interests	19.4		28.4
Owners' equity	7,528.5		7,266.9
Total liabilities and equity	$	9,883.3	$	9,791.3

The following represents our proportional share in MillerCoors' equity:



	As of
	September 30, 2013			December 31, 2012
	(In millions, except percentages)
MillerCoors owners' equity	$	7,528.5		$	7,266.9
MCBC economic interest	42		%	42		%
MCBC proportionate share in MillerCoors' equity	3,162.0			3,052.1
Difference between MCBC contributed cost basis and proportional share of the underlying equity in net assets of MillerCoors(1)	(667.4		)	(670.8		)
Accounting policy elections	35.0			35.0
Timing differences of cash contributions and distributions as a result of different fiscal periods	12.3			15.5
Investment in MillerCoors	$	2,541.9		$	2,431.8

(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")). This basis difference, with the exception of certain non-amortizing items (goodwill, land, etc.), is being amortized as additional equity income over the remaining useful lives of the contributed long-lived amortizing assets.

Results of Operations



	Three Months Ended						Nine Months Ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
	(In millions)
Net sales	$	2,051.0		$	1,993.5		$	5,998.3		$	5,977.3
Cost of goods sold	(1,234.0		)	(1,201.1		)	(3,592.8		)	(3,582.9		)
Gross profit	$	817.0		$	792.4		$	2,405.5		$	2,394.4
Operating income(1)	$	354.5		$	310.5		$	1,046.9		$	1,033.9
Net income attributable to MillerCoors(1)	$	348.8		$	306.9		$	1,033.4		$	1,020.5

(1)

Results for the three months and nine months ended September 30, 2013, include special charges of $15.0 million related to restructuring activities. 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.

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



	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	September 28, 2013			September 29, 2012			September 28, 2013			September 29, 2012
	(In millions, except percentages)
Net income attributable to MillerCoors	$	348.8		$	306.9		$	1,033.4		$	1,020.5
MCBC economic interest	42		%	42		%	42		%	42		%
MCBC proportionate share of MillerCoors net income	146.5			128.9			434.0			428.6
Amortization of the difference between MCBC contributed cost basis and proportional share of the underlying equity in net assets of MillerCoors	1.2			1.2			3.4			3.1
Share-based compensation adjustment(1)	0.6			1.9			0.9			4.8
Equity income in MillerCoors	$	148.3		$	132.0		$	438.3		$	436.5


(1)	The net adjustment is to eliminate all share-based compensation impacts related to pre-existing SABMiller plc equity awards held by former Miller employees now employed by MillerCoors.

The following table summarizes our transactions with MillerCoors:



	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	September 28, 2013		September 29, 2012		September 28, 2013		September 29, 2012
	(In millions)
Beer sales to MillerCoors	$	4.5	$	4.6	$	13.4	$	14.8
Beer purchases from MillerCoors	$	4.2	$	3.9	$	11.2	$	9.3
Service agreement costs and other charges to MillerCoors	$	0.5	$	1.0	$	1.8	$	3.0
Service agreement costs and other charges from MillerCoors	$	0.6	$	0.4	$	0.8	$	1.0

As of September 28, 2013, and December 29, 2012, we had $3.2 million and $0.8 million of net payables due to MillerCoors, respectively.

Other Equity Investments

Modelo Molson Imports, L.P.

MMI, a 50%/50% joint venture with Grupo Modelo S.A.B. de C.V. ("Modelo"), imports, distributes, and markets the Modelo beer brand portfolio across all Canadian provinces and territories. Our sales team is responsible for selling the brands across Canada on behalf of the joint venture. We account for MMI, a VIE, under the equity method of accounting.

On November 5, 2013, Anheuser-Busch Inbev ("ABI") and MCBC entered into an agreement providing for the accelerated termination of the MMI joint venture. The joint venture was originally a 10-year agreement ending January 1, 2018. In June 2013, ABI completed its combination with Modelo, including Modelo’s interest in MMI. Following negotiations with ABI, MCC shall receive a CAD 70 million payment in exchange for the consent to change, effective upon closing and the successful completion of the transition period, the termination date in the various joint venture agreements from January 1, 2018 to end of day on February 28, 2014. Similarly, in conjunction with these negotiations, ABI has also agreed that we will continue to represent the Modelo brands in the U.K. and Japan through the end of 2014.

During the transition period, from November 5, 2013 through February 28, 2014, MMI will continue, in its current capacity, to import, distribute, and market the Modelo beer brand portfolio across Canada in the ordinary course. Following the transition period, Modelo will pay us the CAD 70 million early termination payment accelerating the termination of the joint venture to end of day on February 28, 2014. As a result, effective end of day on February 28, 2014, MMI will cease all operations and will ultimately be dissolved. As part of the early termination agreement, the book value of the joint venture’s net assets will then be distributed to the respective joint venture partners for the owners’ proportionate ownership interest. As of September 28, 2013, our condensed consolidated balance sheet includes our investment in MMI of $19.0 million, an affiliate net payable to MMI of $11.8 million and a definite-lived intangible asset of $5.9 million. During the third quarter and first three quarters of 2013, MCC recognized equity earnings of $3.9 million and $9.0 million, respectively, under the MMI arrangement. During the third quarter and first three quarters of 2012, MCC recognized equity earnings of $4.1 million and $11.1 million, respectively. The equity earnings of MMI are recorded within cost of goods sold. In addition to the equity earnings, during the third quarter and first three quarters of 2013, MCC recognized marketing and administrative cost recoveries related to the promotion, sale and distribution of Modelo products under our agency and services agreement with MMI of $3.1 million and $9.0 million, respectively. During the third quarter and first three quarters of 2012, MCC recognized cost recoveries of $3.7 million and $9.5 million, respectively. These cost recoveries are recorded within marketing, general and administrative expenses.

Consolidated VIEs

The following summarizes the assets and liabilities of our consolidated VIEs (including noncontrolling interests):



	As of
	September 28, 2013				December 29, 2012
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In millions)
Grolsch	$	7.9	$	1.9	$	10.0	$	5.6
Cobra U.K.	$	35.9	$	1.9	$	33.2	$	3.3