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Special Items
 12 Months Ended
Dec. 31, 2019
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, 2019
 
December 31, 2018
 
December 31, 2017
 
(In millions)
Employee-related charges
 
 
 
 
 
Restructuring
$
52.4

 
$
34.7

 
$
2.6

Impairments or asset abandonment charges
 
 
 
 
 
U.S. - Asset abandonment(1)
15.8

 
8.2

 
14.5

Canada - Goodwill impairment(2)
668.3

 
—

 
—

Canada - Asset abandonment(3)
23.0

 
24.5

 
14.4

Europe - Asset abandonment(4)
1.2

 
3.8

 
9.5

International - Goodwill and intangible asset impairment(2)
12.2

 
—

 
—

Corporate
3.4

 
—

 
—

Termination fees and other (gains) losses
 
 
 
 
 
U.S. - Gain on sale of asset
(7.5
)
 
—

 
—

Canada - Gain on sale of brewery(3)
(61.3
)
 
—

 
—

Europe - Deconsolidation of VIE
0.5

 
—

 
—

Europe - Gain on sale of asset(4)
—

 
—

 
(4.6
)
International(5)
0.8

 
7.1

 
—

Purchase price adjustment settlement gain(6)
—

 
(328.0
)
 
—

Total Special items, net
$
708.8

 
$
(249.7
)
 
$
36.4


(1)
Following management approval in December 2019, in January 2020, we announced plans to cease production at our Irwindale, California brewery and entered into an option agreement with Pabst Brewing Company, LLC ("Pabst"), granting Pabst an option to purchase our Irwindale, California brewery, including plant equipment and machinery and the underlying land.
Pursuant to the agreement, Pabst will have 120 days from receipt of the notice of the Irwindale brewery closure from MillerCoors to exercise the option to purchase the Irwindale brewery. If Pabst exercises its option to purchase the Irwindale brewery, the agreement provides (i) the purchase price will be $150 million, subject to adjustment as further specified in the agreement, (ii) the closing will be within six months from Pabst’s exercise of the option, but no earlier than September 1, 2020 and no later than December 31, 2020, subject to the satisfaction of certain customary closing conditions, (iii) for the treatment and allocation of certain liabilities related to the operation of the Irwindale brewery prior to closing, and (iv) for customary representations and warranties and certain post-closing restrictions on Pabst regarding the operations and disposal of the Irwindale brewery. In conjunction with the agreement, MillerCoors and Pabst also executed mutual releases of claims related to their ongoing litigation and agreed to dismiss the litigation with prejudice.
Charges for 2019 consist primarily of accelerated depreciation in excess of normal depreciation and other closure costs, and we will continue to incur special charges during each reporting period through the planned closure of the brewery in September 2020. Total special charges associated with the planned closure are expected to be approximately $150 million to $175 million, consisting primarily of accelerated depreciation charges. However, this estimated range contains significant uncertainty, and actual results could differ materially from these estimates due to uncertainty regarding the ultimate net cost associated with the disposition of assets, restructuring charges, as well as the overall outcome of the Pabst purchase option, which if exercised, could significantly impact these estimates.
Charges for 2018 consist primarily of accelerated depreciation in excess of normal depreciation related to the closure of the Colfax, California cidery, which was completed during the first quarter of 2019, as well as other costs associated with the previously closed Eden, North Carolina brewery, including net charges associated with the sale of the Eden real property. Charges for 2017 also relate to the Eden brewery closure.
(2)
During the third quarter of 2019, we recorded goodwill impairment losses within our Canada and India reporting units of $668.3 million and $6.1 million, respectively. We also recorded impairment losses related to definite-lived intangible assets in India of $6.1 million. See Note 10, "Goodwill and Intangible Assets" for further discussion.
(3)
During 2019, 2018 and 2017, we incurred asset abandonment charges, consisting primarily of accelerated depreciation in excess of normal depreciation related to the closure of the Vancouver brewery, which occurred in the third quarter of 2019, and the planned closure of the Montreal brewery, which is currently expected to occur in 2021. We currently expect to incur additional charges, including estimated accelerated depreciation charges in excess of normal depreciation of approximately CAD 27 million, through final closure of the Montreal brewery. 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. Additionally, during the second quarter of 2019, we completed the sale of the existing Montreal brewery property for $96.2 million (CAD 126 million), and recognized a gain of $61.3 million. See Note 19, "Leases" for further discussion.
(4)
As a result of our continued strategic review of our European supply chain network, during 2019, 2018 and 2017, we incurred charges consisting primarily of accelerated depreciation in excess of normal depreciation related to the closure of our Burton South brewery and other associated closure costs. The Burton South Brewery closed during the first quarter of 2018. Additionally, as part of this review, related to the closures of our Plovdiv brewery in Bulgaria and Alton brewery in the U.K., during 2018 and 2017, we recorded asset abandonment related special charges. 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.
(5)
Represents charges related to the exit of our China business in 2018, consisting primarily of the reclassification of the associated cumulative foreign currency translation adjustment from AOCI upon substantial liquidation in the fourth quarter of 2018. See Note 14, "Accumulated Other Comprehensive Income (Loss)" for further details.
(6)
During the first quarter of 2018, we received $330.0 million from ABI, of which $328.0 million constituted a purchase price adjustment (the "Adjustment Amount"), related to the Miller International Business which was acquired in our acquisition of the remaining portion of MillerCoors which occurred on October 11, 2016. As this settlement occurred following the finalization of purchase accounting, we recorded the settlement proceeds related to the Adjustment Amount as a gain within special items, net in our consolidated statement of operations in our Corporate segment and within cash provided by operating activities in our consolidated statement of cash flows for the year ended December 31, 2018.
Restructuring Activities
On October 28, 2019, as part of our revitalization plan, we made the determination to establish Chicago, Illinois as our North American operational headquarters, close our existing office in Denver, Colorado and consolidate certain administrative functions into our other existing office locations. In connection with these consolidation activities, certain impacted employees have been extended an opportunity to continue their employment with the company in the new organization and locations and, for those not continuing with the company, certain of such employees have been asked to provide transition assistance and offered severance and retention packages in connection with their termination of service. The company expects the costs associated with the restructuring to be substantially recognized by the end of fiscal year 2021. After taking into account all changes in each of the business units, including Europe, the plan is expected to reduce employment levels, in aggregate, by approximately 500 to 600 employees globally.
In connection with these consolidation activities and related organizational and personnel changes, we currently expect to incur certain cash and non-cash restructuring charges related to employee relocation, severance, retention and transition costs, non-cash asset related costs, lease exit costs in connection with our office lease in Denver, Colorado, and other transition activities estimated in the range of approximately $120 million to $180 million in the aggregate, the majority of which will be cash charges that we began recognizing in the fourth quarter of 2019, and will be further spread through the balance of fiscal years 2020 and 2021. In 2019, we recognized aggregate impairment losses of $2.1 million related to the closure of the Denver, Colorado office facility, including a $1.1 million impairment of the associated lease right-of-use asset. Additionally, in 2019 we recognized severance and retention charges of $41.2 million, of which, approximately $40 million remained accrued as of December 31, 2019. Actual severance and retention costs related to this restructuring, which are primarily being recognized ratably over the employees’ required future service period, may differ from original estimates based on actual employee turnover levels prior to achieving severance and retention eligibility requirements. Employee relocation charges are recognized in the period incurred and were immaterial in 2019.
Separately, during the third quarter of 2018, we initiated global restructuring activities primarily in the U.S. in order to align our cost base with our scale of business. As a result, we reduced U.S. employment levels by approximately 300 employees
in the fourth quarter of 2018. Severance costs related to these restructuring activities were recorded as special items in our consolidated statements of operations.
We continually evaluate our cost structure and seek opportunities for further efficiencies and cost savings as part of ongoing and new initiatives. As such, we 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 as of December 31, 2019 represent expected future cash payments required to satisfy our remaining obligations, the majority of which we expect to be paid in the next 12 months.
 
U.S.
 
Canada
 
Europe
 
International
 
Corporate
 
Total
 
(In millions)
Balance as of 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 as of December 31, 2017
$
0.6

 
$
4.3

 
$
1.8

 
$
0.2

 
$
—

 
$
6.9

Charges incurred and changes in estimates
29.6

 
(0.7
)
 
2.2

 
2.2

 
1.4

 
34.7

Payments made
(8.6
)
 
(2.0
)
 
(3.3
)
 
(1.8
)
 
(0.1
)
 
(15.8
)
Foreign currency and other adjustments
—

 
(0.1
)
 
(0.1
)
 
—

 
—

 
(0.2
)
Balance as of December 31, 2018
$
21.6

 
$
1.5

 
$
0.6

 
$
0.6

 
$
1.3

 
$
25.6

Charges incurred and changes in estimates
18.3

 
10.4

 
9.0

 
2.5

 
12.2

 
52.4

Payments made
(23.3
)
 
(0.6
)
 
(5.1
)
 
(0.7
)
 
(1.4
)
 
(31.1
)
Foreign currency and other adjustments
—

 
0.2

 
—

 
—

 
—

 
0.2

Balance as of December 31, 2019
$
16.6

 
$
11.5

 
$
4.5

 
$
2.4

 
$
12.1

 
$
47.1