Acquisition and Investments (Tables)

12 Months Ended

Dec. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

Business Acquisition, Pro Forma Information [Table Text Block]

The unaudited pro forma financial information below does not reflect the realization of any expected ongoing synergies relating to the integration of MillerCoors. Further, the unaudited pro forma financial information should not be considered indicative of the results that would have occurred if the Acquisition and related financing had been consummated on January 1, 2015, nor are they indicative of future results. Net income from continuing operations attributable to MCBC, net income attributable to MCBC and the related basic and diluted per share amounts for 2016 and 2015 have been revised to reflect the retrospective application of our change in accounting policy as discussed in Note 1, "Basis of Presentation and Summary of Significant Accounting Policies".



	For the years ended
	December 31, 2016		December 31, 2015
	(in millions)
Net sales	$	10,983.2	$	11,238.1
Net income from continuing operations attributable to MCBC	$	294.6	$	578.3
Net income attributable to MCBC	$	291.8	$	582.2
Net income from continuing operations attributable to MCBC per share:
Basic	$	1.37	$	2.69
Diluted	$	1.36	$	2.67

For the years ended December 31, 2016, and December 31, 2015, the following non-recurring charges (benefits) directly attributable to the Acquisition were made as adjustments to our pro forma results to remove the impact from our historical operating results within the below noted line items.



	For the years ended
	December 31, 2016			December 31, 2015
	(In millions)
Non-recurring charges (benefits)						Location
Recognition of inventory fair value step-up	$	82.0		$	—	Cost of goods sold
Revaluation gain on previously held 42% equity interest in MillerCoors and AOCI loss reclassification	$	(2,965.0	)	$	—	Special items, net
Other transaction-related costs	$	79.7		$	6.9	Marketing, general and administrative expenses
Bridge loan - amortization of financing costs	$	63.4		$	6.9	Other income (expense)
Foreign currency forwards and transactional foreign currency - net gain	$	(4.5	)	$	—	Other income (expense)
Term loan - commitment fee	$	4.0		$	0.1	Interest expense, net
Swaption - unrealized loss	$	36.4		$	—	Interest expense, net
Interest income earned on money market and fixed rate deposit accounts	$	(19.0	)	$	—	Interest income, net

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The purchase consideration was comprised of the following (in millions):



Total cash consideration	$	12,000.0
Replacement share-based awards issued in conjunction with Acquisition⁽¹⁾	46.4
Elimination of MCBC's net payable to MillerCoors⁽²⁾	(8.0		)
Total consideration	$	12,038.4
Previously held equity interest in MillerCoors⁽³⁾	6,090.0
Total consideration and value to be allocated to net assets	$	18,128.4

(1)

In connection with the Acquisition, MCBC issued replacement share-based compensation awards to various MillerCoors' employees who had awards outstanding under the historical MillerCoors share-based compensation plan. The fair value of the replacement awards associated with services rendered through the date of the Acquisition was recognized as a non-cash component of the total purchase consideration. See Note 14, "Share-Based Payments" for further information.


(2)	Represents the net payable owed by MCBC to MillerCoors as of the closing date which became an intercompany payable upon completion of the Acquisition.

(3)

The acquisition of MillerCoors is considered a step acquisition, and accordingly, we remeasured our pre-existing 42% equity interest in MillerCoors immediately prior to completion of the Acquisition to its estimated fair value of approximately $6.1 billion. As a result of the remeasurement, we recorded a net gain of approximately $3.0 billion within special items, net during the fourth quarter of 2016, representing the excess of the approximate $6.1 billion estimated fair value of our pre-existing 42% equity interest over its transaction date carrying value of approximately $2.7 billion. This net gain also includes the reclassification of our accumulated other comprehensive loss related to our previously held equity interest of $458.3 million in the fourth quarter of 2016 as further discussed below. Additionally, related to this revaluation gain, we recorded deferred income tax expense and a corresponding deferred tax liability of approximately $1.1 billion during the fourth quarter of 2016.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the Acquisition date (in millions):



Total current assets ⁽¹⁾	$	1,061.8
Property, plant and equipment⁽²⁾	2,998.9
Other intangible assets ⁽³⁾	9,875.0
Other assets⁽⁴⁾	462.3
Total current liabilities	(1,190.1		)
Pension and postretirement benefits	(1,009.7		)
Other non-current liabilities	(208.3		)
Total identifiable net assets acquired	$	11,989.9
Goodwill⁽⁵⁾	6,323.5
Fair value of noncontrolling interests⁽⁶⁾	(185.0		)
Total consideration and value to be allocated to net assets	$	18,128.4

The fair value and remaining useful life of property, plant and equipment are estimated as follows:



	Fair value		Remaining useful life
	(In millions)		(Years)
Land	$	156.8	N/A
Buildings and improvements	413.0		3-40
Machinery and equipment	1,927.7		3-25
Software	152.4		1-5
Returnable containers	89.8		1-15
Construction in progress	259.2		N/A
Acquired property, plant and equipment	$	2,998.9

The fair value and remaining useful life of identifiable intangible assets was estimated as follows:



	Fair value		Remaining useful life
	(In millions)		(Years)
Brands not subject to amortization	$	7,320.0	Indefinite
Brands subject to amortization	2,030.0		10-30
Other intangible assets not subject to amortization	320.0		Indefinite
Other intangible assets subject to amortization	205.0		2-40
Total acquired identifiable intangible assets	$	9,875.0

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the Acquisition date (in millions):



Total current assets ⁽¹⁾	$	1,061.8
Property, plant and equipment⁽²⁾	2,998.9
Other intangible assets ⁽³⁾	9,875.0
Other assets⁽⁴⁾	462.3
Total current liabilities	(1,190.1		)
Pension and postretirement benefits	(1,009.7		)
Other non-current liabilities	(208.3		)
Total identifiable net assets acquired	$	11,989.9
Goodwill⁽⁵⁾	6,323.5
Fair value of noncontrolling interests⁽⁶⁾	(185.0		)
Total consideration and value to be allocated to net assets	$	18,128.4

(1)

Includes inventories of $505.4 million, trade receivables of $344.3 million, other receivables of $40.2 million as well as cash acquired of $39.0 million. The fair value of inventories was determined based on the estimated selling price of the inventory less the remaining manufacturing and selling costs and a normal profit margin on those manufacturing and selling efforts. The estimated step-up in fair value of inventory of $82.0 million increased cost of goods sold over approximately one month as the acquired inventory was sold. For all other current assets acquired, the fair values approximate the carrying values.

(2)The fair value of property, plant and equipment was determined by using certain estimates and assumptions that are not observable in the market and thus represent a Level 3 measurement. The fair value and remaining useful life of property, plant and equipment are estimated as follows:



	Fair value		Remaining useful life
	(In millions)		(Years)
Land	$	156.8	N/A
Buildings and improvements	413.0		3-40
Machinery and equipment	1,927.7		3-25
Software	152.4		1-5
Returnable containers	89.8		1-15
Construction in progress	259.2		N/A
Acquired property, plant and equipment	$	2,998.9

(3)

The fair value of identifiable intangible assets was estimated using significant assumptions that are not observable in the market and thus represent a Level 3 measurement. The excess earnings approach was primarily used and significant assumptions included the amount and timing of projected cash flows, a discount rate selected to measure the risk inherent in the future cash flows, and the assessment of the asset’s life cycle, including competitive trends and other factors. The fair value and remaining useful life of identifiable intangible assets was estimated as follows:



	Fair value		Remaining useful life
	(In millions)		(Years)
Brands not subject to amortization	$	7,320.0	Indefinite
Brands subject to amortization	2,030.0		10-30
Other intangible assets not subject to amortization	320.0		Indefinite
Other intangible assets subject to amortization	205.0		2-40
Total acquired identifiable intangible assets	$	9,875.0

Brands not subject to amortization include the Coors and Miller families of brands in the U.S. Brands subject to amortization include certain brands in the U.S. and the Miller global brand portfolio. Other intangible assets not subject to amortization include water rights. Other intangible assets subject to amortization include certain distribution rights, naming rights and favorable contracts.


(4)	Includes estimated deferred tax assets of approximately $430 million which were presented as non-current deferred tax liabilities upon consolidation by MCBC due to jurisdictional netting.

(5)

The goodwill arising from the Acquisition is primarily attributable to expected improvements to our global scale and agility, operational synergies and acceleration of the MCBC growth strategy, as well as the assembled workforce. We have predominantly allocated the goodwill generated in the Acquisition to our U.S. reporting unit, with a portion allocated to the Canada and Europe reporting units. All of the tax basis goodwill generated in the Acquisition is expected to be deductible for U.S. federal and state tax purposes.

(6)

MillerCoors has jointly held interests in multiple entities that are fully consolidated. The related fair value of the noncontrolling interest in each entity was estimated by applying the market and income valuation approaches. The fair value of MillerCoors' noncontrolling interest was estimated using significant assumptions that are not observable in the market and thus represent a Level 3 measurement.

MCBC's proportional share in MillerCoors of net income reported under the equity method

Summarized financial information for MillerCoors for the periods prior to the Acquisition, under the equity method of accounting, is as follows:

Condensed Balance Sheets



	As of
	October 10, 2016
	(In millions)
Current assets	$	977.9
Non-current assets	9,247.8
Total assets	$	10,225.7
Current liabilities	$	1,140.8
Non-current liabilities	1,244.7
Total liabilities	2,385.5
Noncontrolling interests	17.9
Owners' equity	7,822.3
Total liabilities and equity	$	10,225.7

The following represents our proportionate share in MillerCoors' owners' equity and reconciliation to our investment in MillerCoors prior to the Acquisition:



	As of
	October 10, 2016
	(In millions, except percentages)
MillerCoors' owners' equity	$	7,822.3
MCBC's economic interest	42		%
MCBC's proportionate share in MillerCoors' owners' equity	3,285.4
Difference between MCBC's contributed cost basis and proportionate share of the underlying equity in net assets of MillerCoors⁽¹⁾	(653.7		)
Accounting policy elections	35.0
Investment in MillerCoors	$	2,666.7

(1)

Prior to October 11, 2016, our net investment in MillerCoors was based on the carrying values of the net assets contributed to the joint venture which was less than our proportionate share of underlying equity (42%) of MillerCoors (contributed by both Coors Brewing Company ("CBC"), a wholly-owned subsidiary of MCBC, and Miller Brewing Company). This basis difference, with the exception of certain non-amortizing items (goodwill, land, etc.), was being amortized as additional equity income over the remaining useful lives of the contributed long-lived amortizing assets. Upon completion of the Acquisition on October 11, 2016, we derecognized the remaining basis difference balance along with our pre-existing equity investment in MillerCoors in the fourth quarter of 2016.

Results of Operations



	For the period January 1 through October 10			For the year ended
	2016			December 31, 2015
	(In millions)
Net sales	$	6,125.4		$	7,725.5
Cost of goods sold	(3,457.4		)	(4,547.5		)
Gross profit	$	2,668.0		$	3,178.0
Operating income⁽¹⁾	$	1,169.2		$	1,239.2
Net income attributable to MillerCoors⁽¹⁾	$	1,157.2		$	1,217.8

(1)

Results include net special charges primarily related to the closure of the Eden, North Carolina, brewery. For the pre-Acquisition periods of January 1, 2016, through October 10, 2016, MillerCoors recorded net special charges of $85.6 million, including $103.2 million of accelerated depreciation in excess of normal depreciation associated with the closure of the Eden brewery, and a postretirement benefit curtailment gain related to the closure of Eden of $25.7 million. Results for 2015 include special charges related to the closure of the Eden brewery, including $61.3 million of accelerated depreciation in excess of normal depreciation associated with the brewery, and $6.4 million of severance and other charges. MillerCoors also recorded special charges in 2015 of $42.4 million related to an early settlement of a portion of its defined benefit pension plan liability.

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



	For the period January 1 through October 10			For the year ended
	2016			December 31, 2015
	(In millions, except percentages)
Net income attributable to MillerCoors	$	1,157.2		$	1,217.8
MCBC's economic interest	42		%	42		%
MCBC's proportionate share of MillerCoors' net income	486.0			511.5
Amortization of the difference between MCBC's contributed cost basis and proportionate share of the underlying equity in net assets of MillerCoors	3.3			4.6
Share-based compensation adjustment⁽¹⁾	(0.7		)	0.2
U.S. import tax benefit⁽²⁾	12.3			—
Equity income in MillerCoors	$	500.9		$	516.3


(1)	The net adjustment is to eliminate all share-based compensation impacts related to pre-existing SABMiller equity awards held by former Miller Brewing Company 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 a benefit associated with an anticipated refund to CBC of U.S. federal excise tax paid on products imported by CBC based on qualifying volumes exported by CBC from the U.S. The anticipated refund is recorded within other non-current assets on the consolidated balance sheet as of December 31, 2017.

Summary of Transactions with Affiliates

All transactions with our equity method investments are considered related party transactions and recorded within our affiliate accounts. The following table summarizes transactions with affiliates:



	For the years ended
	December 31, 2017		December 31, 2016		December 31, 2015
	(In millions)
Beer sales to MillerCoors⁽¹⁾	$	—	$	7.5	$	11.7
Beer purchases from MillerCoors⁽¹⁾	$	—	$	32.0	$	43.2
Service agreement costs and other charges to MillerCoors⁽¹⁾	$	—	$	1.9	$	2.6
Service agreement costs and other charges from MillerCoors⁽¹⁾	$	—	$	0.9	$	0.9
Administrative fees, net charged from BRI	$	93.5	$	85.8	$	88.8
Administrative fees, net charged from BDL	$	37.3	$	34.3	$	36.4


(1)	For 2016, represents MillerCoors' activity for the pre-Acquisition period of January 1, 2016, through October 10, 2016, when MillerCoors was an equity method investment. As a result of the Acquisition, beginning October 11, 2016, MillerCoors' results of operations are consolidated into MCBC's consolidated financial statements.

Amounts due to and due from affiliates as of December 31, 2017, and December 31, 2016, respectively, are as follows:



	Amounts due from affiliates				Amounts due to affiliates
	December 31, 2017		December 31, 2016		December 31, 2017		December 31, 2016
	(In millions)
BRI	$	4.4	$	9.0	$	—	$	—
BDL	1.1		6.1		—		—
Other	—		—		0.4		2.1
Total	$	5.5	$	15.1	$	0.4	$	2.1

Assets and Results of Operation of Consolidated Investments

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



	As of
	December 31, 2017				December 31, 2016
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In millions)
Grolsch	$	4.8	$	0.2	$	4.4	$	0.5
Cobra U.K.	$	20.2	$	2.1	$	14.2	$	1.1
RMMC	$	74.4	$	4.4	$	70.2	$	3.5
RMBC	$	56.2	$	4.6	$	53.1	$	2.5