Segment Reporting

Our reporting segments are based on the key geographic regions in which we operate, which are the basis on which our chief operating decision maker evaluates the performance of the business.

Reporting Segments

Canada

The Canada segment consists of our production, marketing and sales of our brands, including core brands Coors Light and the Molson brand family, as well as Carling, Coors Banquet, Rickard's and other owned and licensed brands in Canada. The Canada segment also includes BRI, our joint venture arrangement related to the distribution and retail sale of beer in Ontario, and BDL, our joint venture arrangement related to the distribution of beer in the western provinces. Both BRI and BDL are accounted for as equity method investments. Also included in the Canada segment was MMI, our joint venture with Grupo Modelo S.A.B. de C.V. ("Modelo"), established to import, distribute, and market the Modelo beer brand portfolio across all Canadian provinces and territories. MMI was accounted for under the equity method. In November 2013, Anheuser-Busch InBev ("ABI") and MCBC entered into an agreement providing for the accelerated termination of the MMI joint venture, effective February 2014. See Note 5, "Investments" for further discussion.

We have an agreement with Heineken N.V. ("Heineken") that grants us the right to import, market, distribute and sell Heineken products and with SABMiller plc ("SABMiller") that grants us the right to brew or import, market, distribute and sell several SABMiller brands. During the fourth quarter of 2014, we entered into an agreement with Miller Brewing Company ("Miller"), a wholly owned subsidiary of SABMiller, for the accelerated termination of the Miller license agreement, effective March 2015. See Note 19, "Commitments and Contingencies" of the Notes for additional information. We also contract brew and package Labatt Blue and Asahi brands for the U.S. market.

United States (U.S.)

The U.S. segment consists of our interest, and results from our interest, in MillerCoors, our joint venture with SABMiller for all U.S. operations. MillerCoors produces, markets, and sells beer brands in the U.S. and Puerto Rico. MillerCoors' core brands sold in the U.S. include Coors Light and Miller Lite, as well as Blue Moon, Coors Banquet, Keystone Light, Leinenkugel's, Miller Genuine Draft and Miller High Life. Our interest in MillerCoors is accounted for under the equity method of accounting. See Note 5, "Investments" for further discussion.

Europe

The Europe segment consists of our production, marketing and sales of our brands, including major core brands Carling and Staropramen, as well as Apatinsko, Astika, Bergenbier, Blue Moon, Borsodi, Branik, Coors Light, Jelen, Kamenitza, Niksicko, Noroc, Ostravar, Ozujsko, Sharp's Doom Bar and Worthington's, as well as a number of smaller regional ale brands in the U.K., Republic of Ireland and Central Europe. Our European business has licensing agreements with various other brewers through which it also brews or distributes Beck's, Belle-Vue Kriek brands, Hoegaarden, Leffe, Lowenbrau, Löwenweisse, Spaten and Stella Artois in certain Central European countries. Our contract for the distribution of the Modelo brands in the U.K. expired as of December 31, 2014, however, beginning in January 2015, we now distribute Corona Extra, Modelo Especial, Negra Modelo and Pacifico Clara throughout the Central European countries in which we operate. Further, we produce, import and distribute the Grolsch and Cobra brands in the U.K. and Republic of Ireland through our consolidated joint venture arrangements and are the exclusive distributor for several brands which are sold under license, including Singha. Additionally, in order to be able to provide a full line of beer and other beverages to our U.K. on-premise customers, we sell "factored" brands, which are third-party beverage brands for which we provide distribution to retail, typically on a non-exclusive basis. We have distribution agreements with Tradeteam (a subsidiary of DHL) for the distribution of our products in the U.K. through 2023. We also contract manufacture for Heineken U.K. and Carlsberg U.K. In December 2013, we entered into an agreement with Heineken to early terminate the contract brewing arrangement, whereby we produce and package Heineken products. As a result of the termination, Heineken agreed to pay us an aggregate early termination payment of GBP 13.0 million, of which we received $8.5 million (GBP 5.0 million) in 2014 and will receive the remainder at the end of the transition period, concluding on April 30, 2015.

Molson Coors International (MCI)

The objective of MCI is to grow and expand our business and brand portfolio in markets, including emerging markets, outside the U.S., Canada, and certain regions in Europe, comprising our standalone businesses in India (consisting of the Molson Coors Cobra India joint venture), Japan and China; our export business, which is expanding the reach of our international brands, in Latin America, the Caribbean, Western Europe, and Australia; and our license business, which builds long term licensing partnerships with leading global brewers to market and grow our international brands in markets which typically have a greater barrier to entry, in Ukraine, Russia, Mexico and Spain. In addition to Blue Moon, Carling, Cobra, Coors Light, Corona and Staropramen, brands unique to these international markets include Coors, Coors 1873, Coors Extra, Coors Gold, Iceberg 9000, King Cobra, Royal Brew, and Zima.

Corporate

Corporate is not a segment and includes interest and certain other general and administrative costs that are not allocated to any of the operating segments. The majority of these corporate costs relate to worldwide administrative functions, such as corporate affairs, legal, human resources, finance and accounting, treasury, tax, internal audit, insurance and risk management. Additionally, the results of our water resources and energy operations in the state of Colorado are included in Corporate. Corporate also includes certain royalty income and administrative costs related to the management of intellectual property.

Summarized Financial Information

No single customer accounted for more than 10% of our consolidated or segmented sales in 2014, 2013 or 2012. Net sales represent sales to third-party external customers. Inter-segment sales and income (loss) from continuing operations before income taxes, other than sales to MillerCoors, are insignificant and eliminated in consolidation.

The following tables represent consolidated net sales, consolidated interest expense, consolidated interest income, and reconciliations of amount shown as income (loss) from continuing operations before income taxes to income (loss) from continuing operations attributable to MCBC:



	Year ended December 31, 2014
	Canada⁽¹⁾		U.S.		Europe⁽²⁾			MCI			Corporate			Eliminations⁽³⁾			Consolidated
	(In millions)
Net sales	$	1,793.9	$	—	$	2,200.3		$	156.3		$	1.1		$	(5.3	)	$	4,146.3
Interest expense	—		—		—			—			(145.0		)	—			(145.0		)
Interest income	—		—		4.4			—			6.9			—			11.3
Income (loss) from continuing operations before income taxes	$	406.8	$	561.8	$	(111.9	)	$	(13.3	)	$	(257.1	)	$	—		$	586.3
Income tax benefit (expense)																	(69.0		)
Net income (loss) from continuing operations																	517.3
Net (income) loss attributable to noncontrolling interests																	(3.8		)
Net income (loss) from continuing operations attributable to MCBC																	$	513.5


(1)	Income from continuing operations for the year ended December 31, 2014, includes income of $63.2 million within special items, reflective of the agreed upon payment received from Modelo related to the termination of MMI in our Canada segment. See Note 5, "Investments" for further discussion.


(2)	Loss from continuing operations for the year ended December 31, 2014, includes a $360.0 million non-cash impairment charge related to two indefinite-lived brand intangibles in our Europe segment. See Note 12, "Goodwill and Intangible Assets" for further discussion.


(3)	Represents inter-segment sales from the Europe segment to the MCI segment.



	Year ended December 31, 2013
	Canada		U.S.		Europe⁽¹⁾		MCI			Corporate			Eliminations⁽²⁾			Consolidated
	(In millions)
Net sales	$	1,943.8	$	—	$	2,128.3	$	137.6		$	1.2		$	(4.8	)	$	4,206.1
Interest expense	—		—		—		—			(183.8		)	—			(183.8		)
Interest income	—		—		4.9		—			8.8			—			13.7
Income (loss) from continuing operations before income taxes	$	363.3	$	539.0	$	34.3	$	(11.8	)	$	(270.3	)	$	—		$	654.5
Income tax benefit (expense)																(84.0		)
Net income (loss) from continuing operations																570.5
Net (income) loss attributable to noncontrolling interests																(5.2		)
Net income (loss) from continuing operations attributable to MCBC																$	565.3


(1)	Income from continuing operations for the year ended December 31, 2013, includes a $150.9 million non-cash impairment charge related to two indefinite-lived brand intangibles in our Europe segment. See Note 12, "Goodwill and Intangible Assets" for further discussion.


(2)	Represents inter-segment sales from the Europe segment to the MCI segment.



	Year ended December 29, 2012
	Canada		U.S.		Europe⁽¹⁾		MCI			Corporate			Eliminations⁽²⁾		Consolidated
	(In millions)
Net sales	$	2,036.8	$	—	$	1,747.5	$	147.0		$	1.2		(16.0	)	$	3,916.5
Interest expense	—		—		—		—			(196.3		)	—		(196.3		)
Interest income	—		—		5.7		—			5.6			—		11.3
Income (loss) from continuing operations before income taxes	$	423.0	$	510.9	$	136.2	$	(72.1	)	$	(405.9	)	—		$	592.1
Income tax benefit (expense)															(154.5		)
Net income (loss) from continuing operations															437.6
Net (income) loss attributable to noncontrolling interests															3.9
Net income (loss) from continuing operations attributable to MCBC															$	441.5


(1)	Includes results from our Central Europe operations from the Acquisition date of June 15, 2012.


(2)	Represents inter-segment sales from the Europe segment to the MCI segment.

The following table presents total assets by segment:



	As of
	December 31, 2014		December 31, 2013
	(In millions)
Canada	$	5,537.2	$	6,103.2
U.S.	2,388.6		2,506.5
Europe	5,773.3		6,547.7
MCI	75.2		83.3
Corporate	222.0		339.4
Consolidated total assets	$	13,996.3	$	15,580.1

The following table presents select cash flow information by segment:



	For the years ended
	December 31, 2014		December 31, 2013		December 29, 2012
			(In millions)
Depreciation and amortization⁽¹⁾:
Canada	$	117.6	$	122.8	$	128.2
Europe	184.1		185.0		131.6
MCI	2.7		2.9		3.4
Corporate	8.6		9.8		9.5
Consolidated depreciation and amortization	$	313.0	$	320.5	$	272.7
Capital expenditures⁽²⁾:
Canada	$	77.8	$	75.7	$	98.8
Europe	168.6		204.6		110.7
MCI	0.9		1.6		5.8
Corporate	12.2		12.0		7.0
Consolidated capital expenditures	$	259.5	$	293.9	$	222.3


(1)	Depreciation and amortization amounts do not reflect amortization of bond discounts, fees, or other debt-related items.


(2)	Capital expenditures increased in 2013 due to including the results of our Central Europe operations for a full year as a result of the Acquisition.

The following table presents net sales by geography, based on the location of the customer:



	For the years ended
	December 31, 2014		December 31, 2013		December 29, 2012
	(In millions)
Net sales to unaffiliated customers:
Canada	$	1,699.9	$	1,839.8	$	1,930.7
United States and its territories	98.1		105.2		107.3
United Kingdom	1,391.5		1,261.6		1,218.4
Other foreign countries⁽¹⁾	956.8		999.5		660.1
Consolidated net sales	$	4,146.3	$	4,206.1	$	3,916.5


(1)	Reflects net sales from the individual countries within our Central European operations (included in our Europe segment), as well as our MCI segment, for which no individual country has total net sales exceeding 10% of the total consolidated net sales.

The following table presents net properties by geographic location:



	As of
	December 31, 2014		December 31, 2013
	(In millions)
Net properties:
Canada	$	736.1	$	814.8
United States and its territories	35.2		38.6
United Kingdom	465.7		503.4
Other foreign countries⁽¹⁾	561.0		613.3
Consolidated net properties	$	1,798.0	$	1,970.1


(1)	Reflects net properties within the individual countries included in our Central European operations (included in our Europe segment), as well as our MCI segment, for which no individual country has total net properties exceeding 10% of the total consolidated net properties.