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Special Items
 12 Months Ended
Dec. 31, 2017
Unusual or Infrequent Items, or Both [Abstract]  
Special Items
Special Items
We have incurred charges or realized benefits that either we do not believe to be indicative of our core operations, or we believe are significant to our current operating results warranting separate classification. As such, we have separately classified these charges (benefits) as special items.
 
For the years ended
 
December 31, 2017
 
December 31, 2016
 
December 31, 2015
 
(In millions)
Employee-related charges
 
 
 
 
 
Restructuring
$
2.6

 
$
7.3

 
$
8.3

OPEB curtailment and pension settlement(1)
(8.3
)
 
10.5

 
—

Impairments or asset abandonment charges
 
 
 
 
 
U.S. - Asset abandonment(2)
14.5

 
2.7

 
—

Canada - Intangible asset impairment(3)
—

 
495.2

 
—

Canada - Asset abandonment(4)
14.4

 
5.0

 
25.1

Europe - Intangible asset impairment(3)
—

 
—

 
275.0

Europe - Asset abandonment(5)
9.5

 
10.8

 
27.5

International - Asset impairment and write-off(6)
—

 
30.8

 
3.2

Unusual or infrequent items
 
 
 
 
 
Europe - Flood loss (insurance reimbursement), net(7)
—

 
(9.3
)
 
(2.4
)
Termination fees and other (gains) losses
 
 
 
 
 
U.S. - Acquisition revaluation gain and reclassification of historical share of MillerCoors' AOCI(8)
—

 
(2,965.0
)
 
—

Canada - Gain on sale of asset(4)
—

 
(110.4
)
 
—

Europe - Gain on sale of asset(5)
(4.6
)
 
—

 
—

Europe - Termination fee expense, net(9)
—

 
—

 
10.0

Total Special items, net
$
28.1

 
$
(2,522.4
)
 
$
346.7


(1)
During the first quarter of 2017, an OPEB curtailment gain of $2.9 million was recorded within special items in the Canada segment related to a plan amendment. Separately, during the fourth quarter of 2017, we purchased an annuity contract for our U.S. pension plan and we recognized a pension settlement gain of $5.4 million within special items.
(2)
During the third quarter of 2015, our U.S. business announced plans to close its brewery in Eden, North Carolina, in an effort to optimize the brewery footprint and streamline operations for greater efficiencies. Products produced in Eden were transitioned to other breweries in the U.S. supply chain network and the Eden brewery is now closed. For the year ended December 31, 2017, and the period October 11, 2016, through December 31, 2016, certain costs related to the closure of the brewery were recorded within special items.
(3)
During the fourth quarter of 2016 and third quarter of 2015, we recognized impairment charges related to indefinite-lived intangible assets in Canada and Europe, respectively. See Note 11, "Goodwill and Intangible Assets" for further discussion.
(4)
As part of our ongoing strategic review of our Canadian supply chain network, during 2016 we completed the sale of our Vancouver brewery, resulting in net cash proceeds received of CAD 183.1 million ($140.8 million), and recognized a gain of $110.4 million within special items. In conjunction with the sale of the brewery, we agreed to leaseback the existing property to continue operations on an uninterrupted basis while our new brewery is being constructed. We have evaluated this transaction pursuant to the accounting guidance for sale-leaseback transactions, and concluded that the relevant criteria had been met for full gain recognition. Additionally, during 2017, 2016 and 2015, we incurred other abandonment charges, consisting primarily of accelerated depreciation charges in excess of normal depreciation, related to the planned closure of the Vancouver brewery, which is currently expected to occur in the third quarter of 2019.
Additionally, in the third quarter of 2017, as a result of the continuation of this strategic review, we announced the plan to build a more efficient and flexible brewery in the greater Montreal area. As a result of this decision, we have begun to develop plans to transition out of our existing Montreal brewery. Accordingly, we incurred accelerated depreciation charges associated with the existing brewery closure in the second half of 2017, of which the amount in excess of normal depreciation is recorded within special items. We expect to incur additional charges, including estimated accelerated depreciation charges in excess of normal depreciation of approximately CAD 89 million, through final closure of the brewery, which is currently expected to occur in 2021. However, due to the uncertainty inherent in our estimates, these estimated future accelerated depreciation charges as well as the timing of the brewery closure are subject to change.
Separately, during 2015 we recorded accelerated depreciation charges in excess of our normal depreciation related to the closures of bottling lines within our Vancouver and Toronto breweries also as part of our ongoing strategic review of our Canadian supply chain network.
(5)
As a result of our continued strategic review of our European supply chain network, during 2017, 2016 and 2015, we incurred charges consisting primarily of accelerated depreciation in excess of normal depreciation related to the planned closure of our Burton South brewery. Additionally, as part of this review, related to the closures of our Plovdiv brewery in Bulgaria and Alton brewery in the U.K., during 2017, 2016 and 2015, we recorded asset abandonment related special charges, which includes accelerated depreciation in excess of normal depreciation in 2015.
Separately, during 2017 we completed the sale of land related to our previously closed Plovdiv brewery and received net cash proceeds of $8.2 million and recognized a gain of $4.6 million within special items.
(6)
Based on an interim impairment assessment performed during the second quarter of 2016, which was triggered by the enactment of total alcohol prohibition in the state of Bihar, India on April 5, 2016, we recorded an impairment loss in the second quarter of 2016. See Note 11, "Goodwill and Intangible Assets" for additional details.
During the second quarter of 2015, we announced our decision to substantially restructure our business in China and consequently, recognized asset write-off charges, including accelerated depreciation in excess of our normal depreciation in 2015. We also recognized employee-related charges within our International segment following this decision and as a result of this action, employment levels were reduced by approximately 125 full-time employees.
(7)
During the third quarter of 2016, we received the final settlement of insurance proceeds related to losses incurred by our Europe business from flooding in Serbia, Bosnia and Croatia that occurred during 2014. During 2015, we recorded income from insurance proceeds for insurance proceeds received related to significant flooding in Czech Republic that occurred during 2013.
(8)
On October 11, 2016, we completed the Acquisition and recorded a revaluation gain on the excess of the estimated fair value remeasurement for our pre-existing 42% interest in MillerCoors over its carrying value, as well as the reclassification of the loss related to MCBC's historical AOCI on our 42% interest in MillerCoors within special items, net in the fourth quarter of 2016. See Note 4, "Acquisition and Investments" for further details.
(9)
In December 2013, we entered into an agreement with Heineken to early terminate our contract brewing and kegging agreement under which we produced and packaged the Foster's and Kronenbourg brands in the U.K. 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 GBP 5.0 million in 2014 and the remaining GBP 8.0 million on April 30, 2015. The full amount of the termination payment received ($19.4 million upon recognition) was included as income within special items during the year ended December 31, 2015.
Separately, in June 2015, we terminated our agreement with Carlsberg whereby it held the exclusive distribution rights for the Staropramen brand in the U.K. As a result of this termination, we agreed to pay Carlsberg an early termination payment of GBP 19.0 million ($29.4 million at payment date), which was recognized as a special charge during the second quarter of 2015. The transition period concluded on December 27, 2015, and we now have the exclusive distribution rights of the Staropramen brand in the U.K.
Restructuring Activities
Beginning in 2016, restructuring initiatives related to the integration of MillerCoors after the completion of the Acquisition were implemented in order to operate a more efficient business and achieve cost saving targets which to-date resulted in reduced employment levels by approximately 93 employees. Total restructuring costs related to integration initiatives were $1.6 million in 2017 and $9.3 million in 2016, representing the majority of the charges within the table below by segment. Severance costs related to these restructuring activities were recorded as special items within our consolidated statements of operations. As we continually evaluate our cost structure and seek opportunities for further efficiencies and cost savings as part of these initiatives, we may incur additional restructuring related charges in the future, however, we are unable to estimate the amount of charges at this time.
We have continued our ongoing assessment of our supply chain strategies across our segments in order to align with our cost saving objectives. As part of this strategic review, which began in 2014, we have had restructuring activities related to the closure of the Alton and Plovdiv breweries and our current planned closures of the Vancouver and Burton South breweries. As a result, we have reduced employment levels by a total of 406 employees, of which 334 and 72 relate to 2015 and 2014 restructuring programs, respectively. Consequently, we recognized severance and other employee-related charges, which we have recorded as special items within our consolidated statements of operations. We will continue to evaluate our supply chain network and seek opportunities for further efficiencies and cost savings, and we therefore may incur additional restructuring related charges or adjustments to previously recorded charges in the future, however, we are unable to estimate the amount of charges at this time.
The accrued restructuring balances represent expected future cash payments required to satisfy the remaining severance obligations to terminated employees, the majority of which we expect to be paid in the next 12 months.
 
U.S.
 
Canada
 
Europe
 
International
 
Corporate
 
Total
 
(In millions)
Balance at December 31, 2014
$
—

 
$
3.8

 
$
11.5

 
$
—

 
$
0.2

 
$
15.5

Charges incurred
—

 
2.1

 
4.2

 
3.2

 
—

 
9.5

Payments made
—

 
(3.1
)
 
(8.5
)
 
(1.9
)
 
(0.2
)
 
(13.7
)
Changes in estimates
—

 
—

 
(1.2
)
 
—

 
—

 
(1.2
)
Foreign currency and other adjustments
—

 
(0.5
)
 
(0.4
)
 
—

 
—

 
(0.9
)
Balance at December 31, 2015
$
—

 
$
2.3

 
$
5.6

 
$
1.3

 
$
—

 
$
9.2

Balance assumed in Acquisition
6.9

 
—

 
—

 
—

 
—

 
6.9

Charges incurred
3.2

 
4.0

 
1.2

 
0.3

 
0.7

 
9.4

Payments made
(5.0
)
 
(0.4
)
 
(1.2
)
 
(1.4
)
 
—

 
(8.0
)
Changes in estimates
—

 
—

 
(2.1
)
 
—

 
—

 
(2.1
)
Foreign currency and other adjustments
—

 
—

 
(0.7
)
 
—

 
—

 
(0.7
)
Balance at December 31, 2016
$
5.1

 
$
5.9

 
$
2.8

 
$
0.2

 
$
0.7

 
$
14.7

Charges incurred and changes in estimates
0.8

 
—

 
0.1

 
1.6

 
0.1

 
2.6

Payments made
(5.3
)
 
(1.9
)
 
(1.3
)
 
(1.6
)
 
(0.8
)
 
(10.9
)
Foreign currency and other adjustments
—

 
0.3

 
0.2

 
—

 
—

 
0.5

Balance at December 31, 2017
$
0.6

 
$
4.3

 
$
1.8

 
$
0.2

 
$
—

 
$
6.9