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 June 30, 2015, or December 31, 2014. With the exception of the debt guarantee further discussed below, we have not provided any financial support to any of our VIEs during the year 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 June 30, 2015, and December 31, 2014, our consolidated VIEs are Cobra Beer Partnership, Ltd. ("Cobra U.K.") and Grolsch U.K. Ltd. ("Grolsch"). Our unconsolidated VIEs are Brewers' Retail Inc. ("BRI") and Brewers' Distributor Ltd. ("BDL").

During the second quarter of 2015, our equity method investment, BRI, entered into a Canadian Dollar ("CAD") 150 million revolving credit facility with Canadian Imperial Bank of Commerce (“CIBC”), maturing one year after issuance, with one year renewal options subject to approval by CIBC. In conjunction with the issuance of the revolving credit facility, we, along with an additional shareholder of BRI, were each required to guarantee 50% of BRI’s obligations under the facility. As a result of this guarantee, we recorded a current liability of $10.8 million as of June 30, 2015. The carrying value of the guarantee equals its fair value, which considers an adjustment for our own non-performance risk and is considered a level 2 measurement. The offset to the guarantee liability was recorded as an adjustment to our equity method investment balance, which carried a negative balance as of June 30, 2015. The guarantee liability was calculated based on our proportionate, 50% share of BRI’s total revolving credit facility outstanding balance at June 30, 2015. The resulting change in equity investment balance during the year due to movements in the guarantee represents a non-cash investing activity.

Equity Investments

Investment in MillerCoors Summarized Financial Information

Condensed Balance Sheets



	As of
	June 30, 2015		December 31, 2014
	(In millions)
Current assets	$	923.4	$	795.3
Non-current assets	9,005.9		9,047.4
Total assets	$	9,929.3	$	9,842.7
Current liabilities	$	1,086.1	$	1,061.3
Non-current liabilities	1,496.3		1,578.8
Total liabilities	2,582.4		2,640.1
Noncontrolling interests	20.4		23.5
Owners' equity	7,326.5		7,179.1
Total liabilities and equity	$	9,929.3	$	9,842.7

The following represents our proportionate share in MillerCoors' equity and reconciliation to our investment in MillerCoors:



	As of
	June 30, 2015			December 31, 2014
	(In millions, except percentages)
MillerCoors owners' equity	$	7,326.5		$	7,179.1
MCBC economic interest	42		%	42		%
MCBC proportionate share in MillerCoors' equity	3,077.1			3,015.2
Difference between MCBC contributed cost basis and proportionate share of the underlying equity in net assets of MillerCoors⁽¹⁾	(659.2		)	(661.6		)
Accounting policy elections	35.0			35.0
Investment in MillerCoors	$	2,452.9		$	2,388.6

(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 proportionate 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						Six Months Ended
	June 30, 2015			June 30, 2014			June 30, 2015			June 30, 2014
	(In millions)
Net sales	$	2,202.7		$	2,206.7		$	3,977.3		$	3,997.1
Cost of goods sold	(1,240.5		)	(1,282.4		)	(2,316.7		)	(2,376.5		)
Gross profit	$	962.2		$	924.3		$	1,660.6		$	1,620.6
Operating income	$	493.4		$	449.8		$	802.7		$	747.3
Net income attributable to MillerCoors	$	487.2		$	445.2		$	791.8		$	736.4

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



	Three Months Ended						Six Months Ended
	June 30, 2015			June 30, 2014			June 30, 2015			June 30, 2014
	(In millions, except percentages)
Net income attributable to MillerCoors	$	487.2		$	445.2		$	791.8		$	736.4
MCBC economic interest	42		%	42		%	42		%	42		%
MCBC proportionate share of MillerCoors net income⁽¹⁾	204.6			187.0			332.6			309.3
Amortization of the difference between MCBC contributed cost basis and proportionate share of the underlying equity in net assets of MillerCoors	1.3			1.2			2.4			2.3
Share-based compensation adjustment⁽¹⁾⁽²⁾	(0.4		)	1.9			(0.2		)	1.3
Equity income in MillerCoors	$	205.5		$	190.1		$	334.8		$	312.9


(1)	The sum of the quarterly proportionate share of MillerCoors net income and share-based compensation adjustment amounts may not agree to the year-to-date amounts due to rounding.


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

The following table summarizes our transactions with MillerCoors:



	Three Months Ended				Six Months Ended
	June 30, 2015		June 30, 2014		June 30, 2015		June 30, 2014
	(In millions)
Beer sales to MillerCoors	$	3.2	$	3.7	$	6.0	$	6.3
Beer purchases from MillerCoors	$	10.2	$	9.1	$	19.3	$	16.2
Service agreement costs and other charges to MillerCoors	$	0.7	$	0.7	$	1.3	$	1.1
Service agreement costs and other charges from MillerCoors	$	0.2	$	0.3	$	0.6	$	0.5

As of June 30, 2015, and December 31, 2014, we had $8.1 million and $8.3 million of net payables due to MillerCoors, respectively.

Consolidated VIEs

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



	As of
	June 30, 2015				December 31, 2014
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In millions)
Grolsch	$	7.1	$	2.1	$	6.8	$	2.9
Cobra U.K.	$	34.7	$	0.8	$	31.0	$	0.8

Termination of MMI Operations

On February 28, 2014, Anheuser-Busch Inbev ("ABI") and MCBC finalized the accelerated termination of MMI, a 50% - 50% joint venture with Grupo Modelo S.A.B. de C.V. ("Modelo"), which provided for the import, distribution, and marketing of the Modelo beer brand portfolio across all Canadian provinces and territories. The joint venture was accounted for under the equity method of accounting.

Following the successful completion of the transition in the first quarter of 2014, we recognized income of $63.2 million (CAD 70.0 million) within special items, reflective of the agreed upon payment received from Modelo for the early termination of the joint venture. Additionally in the first quarter of 2014, we recorded a charge of $4.9 million representing the accelerated amortization of the remaining carrying value of our definite-lived intangible asset associated with the agreement. Under the MMI arrangement, during the six months ended June 30, 2014, we recognized equity earnings within cost of goods sold of $0.7 million, and 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 $1.1 million. These cost recoveries are recorded within marketing, general and administrative expenses.

In accordance with the early termination agreement, the book value of the joint venture's net assets was required to be distributed to the respective joint venture partners for the owners' proportionate ownership interest at the end of the transition period. This distribution was finalized in the third quarter of 2014. Concurrently, we derecognized our equity investment within other non-current assets upon full recovery of our investment carrying value.