New Accounting Pronouncements

New Accounting Pronouncements Recently Adopted

In March 2016, the Financial Accounting Standards Board ("FASB") issued authoritative guidance intended to simplify and improve several aspects of the accounting for share-based payment transactions. The guidance includes amendments that require excess tax benefits or deficiencies resulting from share-based payments be recognized in the income statement as a component of the provision for income taxes, whereas previously these were recognized within additional paid-in-capital. Further, the new guidance provides an accounting policy election to account for forfeitures as they occur. The new standard also amends the presentation of employee share-based payment-related items in the statement of cash flows by requiring that: (i) excess tax benefits be classified as cash inflows provided by operating activities (MCBC previously included within cash flows provided by financing activities), and (ii) cash paid to taxing authorities arising from the withholding of shares from employees be classified as cash outflows used in financing activities (MCBC previously included within cash flows provided by operating activities). We have early adopted this guidance during the quarter ended September 30, 2016. The adoption of this guidance resulted in a reduction to our income tax expense and additional paid-in-capital of $4.1 million and $8.0 million for the three and nine months ended September 30, 2016, as a result of excess tax benefits generated during 2016 being reclassified from additional paid-in-capital to income tax expense upon adoption. The amendments also impacted our calculation of diluted earnings per share under the treasury stock method, as excess tax benefits and deficiencies resulting from share-based payments are no longer included in the assumed proceeds calculation. These provisions of the new guidance have been adopted on a prospective basis as of January 1, 2016, which is the beginning of the annual period that includes the interim period of adoption. As permitted by this standard, the Company has elected to continue to estimate forfeitures expected to occur when calculating share-based compensation expense. The cash flow impacts of the adoption of this guidance were applied on a retrospective basis to all periods presented. In the period of adoption, these impacts resulted in an increase to net cash provided by operating activities, and a corresponding decrease to net cash provided by financing activities of $25.4 million for the nine months ended September 30, 2016. The adoption of this guidance impacted our previously reported results for fiscal year 2015 as follows:



	Nine Months Ended September 30, 2015
	As Reported			As Adjusted
	(In millions)
Condensed Consolidated Statements of Cash Flows:
Net cash provided by (used in) operating activities	$	461.5		$	479.0
Net cash provided by (used in) financing activities	$	(310.1	)	$	(327.6	)

The adoption of this guidance impacted our previously reported results for fiscal year 2016, as follows:



	Three Months Ended March 31, 2016						Six Months Ended June 30, 2016
	As Reported			As Adjusted			As Reported			As Adjusted
	(In millions)
Condensed Consolidated Statements of Operations:
Income tax benefit (expense)	$	(20.6	)	$	(16.7	)	$	(41.8	)	$	(37.9	)
Net income (loss) attributable to Molson Coors Brewing Company	$	158.8		$	162.7		$	331.1		$	335.0
Basic earnings per share	$	0.78		$	0.80		$	1.58		$	1.60
Diluted earnings per share	$	0.78		$	0.80		$	1.58		$	1.59
Diluted weighted-average shares outstanding	204.8			205.1			210.2			210.5



	Three Months Ended March 31, 2016						Six Months Ended June 30, 2016
	As Reported			As Adjusted			As Reported		As Adjusted
	(In millions)
Condensed Consolidated Statements of Cash Flows:
Net cash provided by (used in) operating activities	$	(93.4	)	$	(88.3	)	$	264.4	$	282.4
Net cash provided by (used in) financing activities	$	2,463.6		$	2,458.5		$	2,356.6	$	2,338.6



	As of
	March 31, 2016				June 30, 2016
	As Reported		As Adjusted		As Reported		As Adjusted
	(In millions)
Condensed Consolidated Balance Sheets:
Paid-in capital	$	6,550.0	$	6,546.1	$	6,556.6	$	6,552.7
Retained earnings	$	4,566.5	$	4,570.4	$	4,650.6	$	4,654.5

New Accounting Pronouncements Not Yet Adopted

In August 2016, the FASB issued authoritative guidance intended to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows. The amendment addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. These updates are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted. The guidance should be applied retrospectively unless it is impractical to do so; in which case, the guidance should be applied prospectively as of the earliest date practicable. We do not anticipate that this guidance will have an impact on our condensed consolidated financial statements.

In February 2016, the FASB issued authoritative guidance intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for all leases with terms greater than twelve months. Additionally, this guidance will require disclosures to help investors and other financial statement users to better understand the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. The guidance should be applied under a modified retrospective transition approach for leases existing at the beginning of the earliest comparative period presented in the adoption-period financial statements. Any leases that expire before the initial application date will not require any accounting adjustment. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. We are currently evaluating the potential impact on our financial position and results of operations upon adoption of this guidance.

In July 2015, the FASB issued authoritative guidance intended to simplify the measurement of inventory. The amendment requires entities to measure in-scope inventory at the lower of cost and net realizable value, and replaces the current requirement to measure in-scope inventory at the lower of cost or market, which considers replacement cost, net realizable value, and net realizable value less an approximate normal profit margin. This guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2016. The amendment should be applied prospectively with early adoption permitted. We are currently evaluating the potential impact on our financial position and results of operations upon adoption of this guidance, but anticipate that such impact would be minimal.

In May 2014, the FASB issued authoritative guidance related to new accounting requirements for the recognition of revenue from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for the goods or services. Subsequent to the release of this guidance, the FASB has issued additional updates intended to provide interpretive clarifications and to reduce the cost and complexity of applying the new revenue recognition standard both at transition and on an ongoing basis. The new standard and related amendments are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted for annual reporting periods beginning after December 15, 2016, including interim periods within that annual reporting period. Upon adoption of the new standard, the use of either a full retrospective or cumulative effect transition method is permitted. We have not yet selected a transition method and are currently evaluating the potential impact on our financial position and results of operations upon adoption of this guidance.

Other than the items noted above, there have been no new accounting pronouncements not yet effective or adopted in the current year that we believe have a significant impact, or potential significant impact, to our condensed consolidated financial statements.