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, 2016, or December 31, 2015. 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, 2016, and December 31, 2015, 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").

In June 2016, our equity method investment, BRI, and Canadian Imperial Bank of Commerce (“CIBC”) entered into an agreement to extend the term of BRI's CAD 150 million revolving credit facility for an additional year. The extended agreement matures in June 2017, with one-year renewal options subject to approval by CIBC. MCBC, along with two additional shareholders of BRI, each guarantee BRI’s obligations under the facility, with our proportionate share of the guarantee totaling 45.9%. As a result of this guarantee, we have a current liability of $18.8 million and $16.9 million as of June 30, 2016, and December 31, 2015, respectively. 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 within the unaudited condensed consolidated balance sheets. The guarantee liability was calculated based on our proportionate 45.9% share of BRI’s total revolving credit facility outstanding balance at June 30, 2016. The resulting change in our equity method investment during the year due to movements in the guarantee represents a non-cash investing activity.

In 2015, we, along with the other owners of BRI and the Province of Ontario, agreed to revise the ownership structure of BRI. The new BRI shareholder agreement (“New Shareholder Agreement”) incorporating these changes became effective at the beginning of 2016, at which time BRI converted all existing capital stock into a new share class, as well as created a separate share class to facilitate new and existing brewer participation and governance. While governance and board of director participation continues to have the ability to fluctuate based on market share relative to the other owners, our equity interest has become fixed under the New Shareholder Agreement. We have evaluated the changes within the New Shareholder Agreement from a primary beneficiary perspective and concluded that we will continue to account for BRI as an equity method investment, as control of BRI continues to be shared under the New Shareholder Agreement.

Equity Investments

Investment in MillerCoors

On November 11, 2015, we entered into a purchase agreement with Anheuser-Busch InBev SA/NV to acquire all of SABMiller plc's (“SABMiller”) 58% economic interest and 50% voting interest in MillerCoors and all trademarks, contracts and other assets primarily related to the Miller brand portfolio outside of the U.S. and Puerto Rico as described in the Purchase Agreement (the "Acquisition"). Following the closing of the pending Acquisition, we will own 100% of the outstanding equity and voting interests of MillerCoors. See further details regarding the pending Acquisition in Note 16, "Pending Acquisition".

Summarized financial information for MillerCoors is as follows:

Condensed Balance Sheets



	As of
	June 30, 2016		December 31, 2015
	(In millions)
Current assets	$	966.3	$	800.5
Non-current assets	9,014.4		9,099.5
Total assets	$	9,980.7	$	9,900.0
Current liabilities	$	1,118.4	$	1,180.1
Non-current liabilities	1,278.5		1,407.0
Total liabilities	2,396.9		2,587.1
Noncontrolling interests	19.7		20.1
Owners' equity	7,564.1		7,292.8
Total liabilities and equity	$	9,980.7	$	9,900.0

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



	As of
	June 30, 2016			December 31, 2015
	(In millions, except percentages)
MillerCoors owners' equity	$	7,564.1		$	7,292.8
MCBC economic interest	42		%	42		%
MCBC proportionate share in MillerCoors equity	3,176.9			3,063.0
Difference between MCBC contributed cost basis and proportionate share of the underlying equity in net assets of MillerCoors⁽¹⁾	(654.8		)	(657.0		)
Accounting policy elections	35.0			35.0
Investment in MillerCoors	$	2,557.1		$	2,441.0

(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 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, 2016			June 30, 2015			June 30, 2016			June 30, 2015
	(In millions)
Net sales	$	2,126.7		$	2,202.7		$	3,942.8		$	3,977.3
Cost of goods sold	(1,174.5		)	(1,240.5		)	(2,207.5		)	(2,316.7		)
Gross profit	$	952.2		$	962.2		$	1,735.3		$	1,660.6
Operating income⁽¹⁾	$	435.7		$	493.4		$	772.2		$	802.7
Net income attributable to MillerCoors⁽¹⁾	$	429.5		$	487.2		$	764.8		$	791.8


(1)	Results include special charges related to the planned closure of the Eden, North Carolina, brewery of $39.4 million and $76.3 million for the three and six months ended June 30, 2016, respectively, including $33.0 million and $68.9 million of accelerated depreciation in excess of normal depreciation associated with the brewery, and $6.4 million and $7.4 million of other charges, respectively.

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, 2016			June 30, 2015			June 30, 2016			June 30, 2015
	(In millions, except percentages)
Net income attributable to MillerCoors	$	429.5		$	487.2		$	764.8		$	791.8
MCBC economic interest	42		%	42		%	42		%	42		%
MCBC proportionate share of MillerCoors net income	180.4			204.6			321.2			332.6
Amortization of the difference between MCBC contributed cost basis and proportionate share of the underlying equity in net assets of MillerCoors	1.1			1.3			2.2			2.4
Share-based compensation adjustment⁽¹⁾	(0.7		)	(0.4		)	(0.2		)	(0.2		)
U.S. import tax benefit⁽²⁾	11.1			—			11.1			—
Equity income in MillerCoors	$	191.9		$	205.5		$	334.3		$	334.8


(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 employed by MillerCoors, as well as to add back all share-based compensation impacts related to pre-existing MCBC equity awards held by former MCBC employees who transferred to MillerCoors.

(2)

Represents an $11.1 million benefit associated with an anticipated refund to Coors Brewing Company ("CBC"), a wholly-owned subsidiary of Molson Coors, of U.S. federal excise tax paid on products imported by CBC based on qualifying volumes exported by CBC from the U.S. Due to administrative restrictions outlined within the legislation enacted in 2016, the anticipated refund is not expected to be received until 2018. Accordingly, the anticipated refund amount represents a non-current receivable which has been recorded within other non-current assets on the unaudited condensed consolidated balance sheet as of June 30, 2016.

The following table summarizes our transactions with MillerCoors:



	Three Months Ended				Six Months Ended
	June 30, 2016		June 30, 2015		June 30, 2016		June 30, 2015
	(In millions)
Beer sales to MillerCoors	$	2.6	$	3.2	$	4.6	$	6.0
Beer purchases from MillerCoors	$	12.2	$	10.2	$	22.1	$	19.3
Service agreement costs and other charges to MillerCoors	$	0.6	$	0.7	$	1.3	$	1.3
Service agreement costs and other charges from MillerCoors	$	0.1	$	0.2	$	0.2	$	0.6

As of June 30, 2016, and December 31, 2015, we had $9.0 million and $7.6 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, 2016				December 31, 2015
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In millions)
Grolsch	$	5.5	$	0.1	$	6.9	$	3.3
Cobra U.K.	$	17.1	$	0.5	$	30.2	$	0.9