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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Molson Coors Beverage Company | NYSE:TAP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.71 | -1.29% | 54.45 | 55.32 | 54.46 | 54.94 | 1,276,897 | 01:00:00 |
Net Sales Increased 1.8%, Financial Volumes and Net Sales/HL Improved, Worldwide Brand Volumes Down 1.0%, U.S. GAAP Net Income and Underlying EBITDA Delivered Growth
EPS (U.S. GAAP) of $1.56 Increased 17.3%, and Underlying EPS (Non-GAAP) of $1.84 Increased 34.3%, versus prior year
Management Increases Cost Savings Guidance, Reaffirms Dividend ExpectationsRemains Committed to Full-Year Free Cash Flow and Deleverage Targets
Molson Coors Brewing Company (NYSE: TAP; TSX: TPX) today reported results for the 2018 third quarter. Molson Coors president and chief executive officer Mark Hunter said:
"This quarter reflects progress on a number of fronts as we drive our consistent First Choice strategy of earning more, using less and investing wisely as brand volume grew in developed and developing markets outside of North America, NSR/HL grew globally, and we grew underlying EBITDA in constant currency in each of our four business units."
Mark continued, "The volume growth we are seeing outside North America is driven by consistency of our First Choice strategy, the breadth and depth of our global brand portfolio and a positive industry. Europe, our second largest business unit by volume, is growing consistently and accelerating the pace of portfolio premiumization while our International business unit, led by the Latin American markets, posted mid-teens growth due to the strong performance of our global brands, led by Coors Light and the Miller Trademark brands of MGD, Miller Lite and Miller High Life.
"In the U.S., brand volumes or STRs were below industry volumes. As we have indicated, improving our volume performance in the U.S. is a priority and the first step is to improve our share performance through Coors Light and accelerated premiumization of the portfolio.
"Additionally, across Molson Coors we are over delivering on our synergy and cost savings program to counter higher than anticipated commodity inflation and maintain our deleverage commitment and dividend plan."
Consolidated Performance - Third Quarter 2018
Three Months Ended ($ in millions, except per share data) (Unaudited)September 30,2018
September 30,2017
Reported% Increase(Decrease)
ForeignExchangeImpact ($)
ConstantCurrency% Increase(Decrease)(2)
Net Sales $ 2,934.2 $ 2,883.2 1.8 % $ (22.4 ) 2.5 % U.S. GAAP Net income (loss)(1) $ 338.3 $ 287.0 17.9 % Per diluted share $ 1.56 $ 1.33 17.3 % Underlying (Non-GAAP) Net income (loss)(2) $ 398.5 $ 296.5 34.4 % Per diluted share $ 1.84 $ 1.37 34.3 % Underlying EBITDA (Non-GAAP)(2) $ 756.7 $ 688.6 9.9 % $ (8.1 ) 11.1 % Nine Months Ended ($ in millions, except per share data) (Unaudited)September 30,2018
September 30,2017
Reported% Increase(Decrease)
ForeignExchangeImpact ($)
ConstantCurrency% Increase(Decrease)(2)
Net Sales $ 8,350.9 $ 8,423.2 (0.9 )% $ 89.2 (1.9 )% U.S. GAAP Net income (loss)(1) $ 1,040.5 $ 825.4 26.1 % Per diluted share $ 4.80 $ 3.81 26.0 % Underlying (Non-GAAP) Net income (loss)(2) $ 908.9 $ 835.8 8.7 % Per diluted share $ 4.20 $ 3.86 8.8 % Underlying EBITDA (Non-GAAP)(2) $ 1,966.0 $ 2,015.6 (2.5 )% $ 7.7 (2.8 )% (1) Net income (loss) attributable to MCBC. (2) See Appendix for definitions and reconciliations of non-GAAP financial measures.
Quarterly Highlights (versus Third Quarter 2017 Results)
Brand Volume Basis NSR/HL: Effective in the first quarter of 2018, we have revised our net sales revenue (NSR) per HL performance discussions to be on a brand volume basis, with all per-hectoliter calculations including owned and actively managed brands, along with royalty volume, in the denominator, as well as the financial impact of these sales in the numerator, unless otherwise indicated. See Appendix for definitions.
Business Review - Third Quarter 2018
Net Sales
($ in millions) (Unaudited) Three Months EndedSeptember 30,2018
September 30,2017
Reported% Increase(Decrease)
ForeignExchangeImpact ($)
ConstantCurrency% Increase(Decrease)(1)
United States $ 1,935.8 $ 1,892.2 2.3 % $ — 2.3 % Canada 388.9 406.4 (4.3 )% (16.2 ) (0.3 )% Europe 577.9 561.2 3.0 % (4.6 ) 3.8 % International 67.0 65.7 2.0 % (1.6 ) 4.4 % Corporate 0.2 0.3 (33.3 )% — (33.3 )% Eliminations(2) (35.6 ) (42.6 ) 16.4 % — 16.4 % Consolidated $ 2,934.2 $ 2,883.2 1.8 % $ (22.4 ) 2.5 % (1) See Appendix for definitions and reconciliations of non-GAAP financial measures. (2) Reflects intercompany sales that are eliminated in consolidated totals.Pretax Income (U.S. GAAP)
($ in millions) (Unaudited) Three Months EndedSeptember 30,2018
September 30,2017
Reported% Increase(Decrease)
ForeignExchangeImpact ($)
ConstantCurrency% Increase(Decrease)(1)
United States $ 374.2 $ 367.1 1.9 % $ (0.7 ) 2.1 % Canada 77.5 77.2 0.4 % (2.8 ) 4.0 % Europe 96.0 94.9 1.2 % (0.5 ) 1.7 % International (1.0 ) (6.0 ) 83.3 % (2.5 ) 125.0 % Corporate (136.6 ) (92.7 ) (47.4 )% 0.6 (48.0 )% Consolidated $ 410.1 $ 440.5 (6.9 )% $ (5.9 ) (5.6 )% (1) See Appendix for definitions and reconciliations of non-GAAP financial measures.Underlying EBITDA (Non-GAAP)(1)
($ in millions) (Unaudited) Three Months EndedSeptember 30,2018
September 30,2017
Reported% Increase(Decrease)
ForeignExchangeImpact ($)
ConstantCurrency% Increase(Decrease)(1)
United States $ 526.1 $ 477.6 10.2 % $ (0.7 ) 10.3 % Canada 112.6 113.0 (0.4 )% (4.3 ) 3.5 % Europe 144.1 136.9 5.3 % (0.7 ) 5.8 % International 2.9 (1.0 ) N/M (2.2 ) N/M Corporate (29.0 ) (37.9 ) 23.5 % (0.2 ) 24.0 % Consolidated $ 756.7 $ 688.6 9.9 % $ (8.1 ) 11.1 % N/M = Not meaningful(1)
See Appendix for definitions and reconciliations of non-GAAP financial measures.
United States Business
Canada Business
Europe Business
International Business
Corporate
Worldwide Brand and Financial Volume(1)
(In millions of hectoliters) (Unaudited) Three Months EndedSeptember 30,2018
% ChangeSeptember 30,2017
Financial Volume(1) 26.513 0.8 % 26.290 Contract brewing, wholesaler and non-beer volume (2.222 ) (0.8 )% (2.239 ) Royalty volume 1.171 23.7 % 0.947 Sales-To-Wholesaler to Sales-To-Retail adjustment (0.178 ) N/M 0.532 Total Worldwide Brand Volume(1) 25.284 (1.0 )% 25.530 N/M = Not meaningful (1) See Appendix for definitions and additional discussion regarding Financial and Worldwide Brand Volume.
Other Results
Effective Income Tax Rates
Three Months Ended September 30, 2018 September 30, 2017 U.S. GAAP effective tax rate 16 % 33 % Underlying effective tax rate 16 % 27 %Special and Other Non-Core Items
The following special and other non-core items have been excluded from underlying results. See the Appendix for reconciliations of non-GAAP financial measures.
2018 Outlook
The following guidance for full year 2018 is unchanged from previous disclosures, unless otherwise indicated:
Notes
Unless otherwise indicated in this release, all $ amounts are in U.S. Dollars, and all quarterly comparative results are for the Company’s third quarter ended September 30, 2018, compared to the third quarter ended September 30, 2017. Prior year results have been adjusted to reflect the retrospective adoption of new pension accounting guidance, as described above. Effective in the first quarter of 2018, we have revised our net sales revenue (NSR) per HL performance discussions to be on a brand volume basis, such that all per-hectoliter calculations now include owned and actively managed brand volume, along with royalty volume, in the denominator, as well as the financial impact of these sales in the numerator, unless otherwise indicated. Some numbers may not sum due to rounding.
As used in this release, the term “Acquisition” refers to the Company’s acquisition from Anheuser-Busch InBev SA/NV on October 11, 2016, of SABMiller plc’s 58 percent economic interest and 50 percent voting interest in MillerCoors LLC and all trademarks, contracts and other assets primarily related to the Miller International business outside of the U.S. and Puerto Rico.
2018 Third Quarter Conference Call
Molson Coors Brewing Company will conduct an earnings conference call with financial analysts and investors at 11:00 a.m. Eastern Time today to discuss the Company’s 2018 third quarter results. The live webcast will be accessible via the Company’s website, www.molsoncoors.com. An online replay of the webcast will be available until 11:59 p.m. Eastern Time on February 11, 2019. The Company will post this release and related financial statements on its website today.
Overview of Molson Coors
Molson Coors has defined brewing greatness for more than two centuries. As one of the largest global brewers, Molson Coors works to deliver extraordinary brands that delight the world’s beer drinkers. From Coors Light, Coors Banquet, Miller Lite, Molson Canadian, Carling, Staropramen and Sharp’s Doom Bar to Leinenkugel’s Summer Shandy, Blue Moon Belgian White, Hop Valley, Creemore Springs and Crispin Cider, Molson Coors offers a beer for every beer lover.
Molson Coors operates through Molson Coors Canada, MillerCoors in the U.S., Molson Coors Europe and Molson Coors International. The company is not only committed to brewing extraordinary beers, but also running a business focused on respect for its employees, communities and drinkers, which means corporate responsibility and accountability right from the start. It has been listed on the Dow Jones Sustainability Index for the past seven years. To learn more about Molson Coors Brewing Company, visit molsoncoors.com, ourbeerprint.com or on Twitter through @MolsonCoors.
About Molson Coors Canada Inc.
Molson Coors Canada Inc. (MCCI) is a subsidiary of Molson Coors Brewing Company. MCCI Class A and Class B exchangeable shares offer substantially the same economic and voting rights as the respective classes of common shares of MCBC, as described in MCBC’s annual proxy statement and Form 10-K filings with the U.S. Securities and Exchange Commission. The trustee holder of the special Class A voting stock and the special Class B voting stock has the right to cast a number of votes equal to the number of then outstanding Class A exchangeable shares and Class B exchangeable shares, respectively.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “anticipate,” “project,” “will,” “outlook,” and similar expressions identify forward-looking statements, which generally are not historic in nature. Although the Company believes that the assumptions upon which its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct. Important factors that could cause actual results to differ materially from the Company’s historical experience, and present projections and expectations are disclosed in the Company’s filings with the Securities and Exchange Commission (“SEC”). These factors include, among others, our ability to successfully integrate and achieve expected tax benefits, accretion and cost savings and synergies relating to the Acquisition; impact of increased competition resulting from further consolidation of brewers, competitive pricing and product pressures; health of the beer industry and our brands in our markets; economic conditions in our markets; additional impairment charges; our ability to maintain manufacturer/distribution agreements; changes in our supply chain system; availability or increase in the cost of packaging materials; success of our joint ventures; risks relating to operations in developing and emerging markets; changes in legal and regulatory requirements, including the regulation of distribution systems; fluctuations in foreign currency exchange rates; increase in the cost of commodities used in the business; the impact of climate change and the availability and quality of water; loss or closure of a major brewery or other key facility; our ability to implement our strategic initiatives, including executing and realizing cost savings; our ability to successfully integrate newly acquired businesses; pension plan and other post-retirement benefit costs; failure to comply with debt covenants or deterioration in our credit rating; our ability to maintain good labor relations; our ability to maintain brand image, reputation and product quality; and other risks discussed in our filings with the SEC, including our most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We do not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise.
APPENDIX Consolidated Financial Performance Molson Coors Brewing Company Three Months Ended September 30, 2018 % Change(In millions, except per share data)(Unaudited)
U.S. GAAPNon-GAAPAdjustments(1)
Non-GAAPUnderlying(1)
U.S. GAAPNon-GAAPUnderlying
Net sales $ 2,934.2 $ — $ 2,934.2 1.8 % 1.8 % Net Sales per HL change 0.9 % 0.9 % Cost of goods sold $ (1,714.0 ) $ 24.5 $ (1,689.5 ) 7.9 % 3.4 % Cost of goods sold per HL change 6.9 % 2.6 % Gross profit $ 1,220.2 $ 24.5 $ 1,244.7 (5.7 )% (0.4 )% Marketing, general and administrative expenses $ (713.9 ) $ 8.8 $ (705.1 ) (8.9 )% (8.4 )% Special items, net $ (36.6 ) $ 36.6 $ — N/M — % Operating income (loss) $ 469.7 $ 69.9 $ 539.6 (7.2 )% 12.3 % Interest income (expense), net $ (67.4 ) $ — $ (67.4 ) (7.2 )% (7.2 )% Other pension and postretirement benefits (costs), net $ 7.6 $ 2.0 $ 9.6 (20.8 )% — % Other income (expense), net $ 0.2 $ — $ 0.2 N/M N/M Income (loss) before income taxes $ 410.1 $ 71.9 $ 482.0 (6.9 )% 16.2 % Income tax benefit (expense) $ (64.5 ) $ (11.7 ) $ (76.2 ) (56.2 )% (32.1 )% Net income (loss)(2) $ 338.3 $ 60.2 $ 398.5 17.9 % 34.4 % Per diluted share $ 1.56 $ 0.28 $ 1.84 17.3 % 34.3 % Underlying EBITDA(3) $ 756.7 9.9 % Molson Coors Brewing Company Nine Months Ended September 30, 2018 % Change(In millions, except per share data)(Unaudited)
U.S. GAAPNon-GAAPAdjustments(1)
Non-GAAPUnderlying(1)
U.S. GAAPNon-GAAPUnderlying
Net sales $ 8,350.9 $ — $ 8,350.9 (0.9 )% (0.9 )% Net Sales per HL change 1.0 % 1.0 % Cost of goods sold $ (4,988.8 ) $ 66.7 $ (4,922.1 ) 5.8 % 2.7 % Cost of goods sold per HL change 7.8 % 4.6 % Gross profit $ 3,362.1 $ 66.7 $ 3,428.8 (9.3 )% (5.5 )% Marketing, general and administrative expenses $ (2,139.7 ) $ 26.1 $ (2,113.6 ) (5.8 )% (5.0 )% Special items, net $ 267.7 $ (267.7 ) $ — N/M — % Operating income (loss) $ 1,490.1 $ (174.9 ) $ 1,315.2 5.9 % (6.3 )% Interest income (expense), net $ (227.3 ) $ — $ (227.3 ) (12.0 )% (12.0 )% Other pension and postretirement benefits (costs), net $ 27.5 $ 2.1 $ 29.6 (14.9 )% 0.7 % Other income (expense), net $ 0.2 $ — $ 0.2 — % N/M Income (loss) before income taxes $ 1,290.5 $ (172.8 ) $ 1,117.7 9.2 % (4.2 )% Income tax benefit (expense) $ (231.6 ) $ 41.2 $ (190.4 ) (31.6 )% (39.1 )% Net income (loss)(2) $ 1,040.5 $ (131.6 ) $ 908.9 26.1 % 8.7 % Per diluted share $ 4.80 $ (0.60 ) $ 4.20 26.0 % 8.8 % Underlying EBITDA(3) $ 1,966.0 (2.5 )% N/M = Not meaningful (1) Refer to the table "Reconciliation to Nearest U.S. GAAP Measures" for detailed descriptions and reconciliation of non-GAAP adjustments and results. (2) Net income (loss) attributable to MCBC. (3) EBITDA is earnings before interest, taxes, depreciation and amortization, a non-GAAP financial measure.
Adoption of Revenue Recognition Guidance
The new revenue recognition accounting standard became effective for us at the beginning of 2018. We have adopted the new standard using the modified retrospective approach, and, therefore, prior period results have not been restated. However, results under the old standard will continue to be disclosed throughout 2018 for comparability, as required by the standard. The following table highlights the impact of this new guidance on summarized components of our unaudited condensed consolidated statement of operations for the three months ended September 30, 2018, when comparing our current period results of operations under the new guidance, versus our results of operations if historical guidance had continued to be applied.
Three Months Ended September 30, 2018 U.S. Canada Europe International Consolidated (In millions) Impact to Unaudited Condensed Consolidated Statements of Operations - Favorable/(Unfavorable): Net sales $ 1.5 $ (13.5 ) $ (0.6 ) $ (0.1 ) $ (12.7 ) Cost of goods sold $ — $ — $ — $ — $ — Gross profit $ 1.5 $ (13.5 ) $ (0.6 ) $ (0.1 ) $ (12.7 ) Marketing, general and administrative expenses $ 3.3 $ 14.3 $ 1.8 $ — $ 19.4 Operating income (loss) $ 4.8 $ 0.8 $ 1.2 $ (0.1 ) $ 6.7 Interest income (expense), net $ — $ — $ (0.8 ) $ — $ (0.8 ) Income (loss) before income taxes $ 4.8 $ 0.8 $ 0.4 $ (0.1 ) $ 5.9These impacts are driven primarily by the reclassification of certain cash payments to customers from marketing, general and administrative expenses to a reduction of revenue, as well as a change in the timing of recognition of certain promotional discounts and cash payments to customers. For further discussion regarding the impacts of the adoption of this new guidance, refer to footnote 2 within our third quarter 2018 Form 10-Q.
Adoption of Pension and Other Postretirement Benefit Accounting Pronouncement
During the first quarter of 2018, we adopted the FASB's new guidance related to classification of pension and other postretirement benefit costs. Specifically, the new guidance requires us only to report the service cost component in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period; while the other components of net benefit cost are now presented in the statements of operations separately from the service cost component and outside of operating income. We have also determined that only service cost will be reported within each operating segment, and all other components will be reported within the Corporate segment. These changes to the results of each quarter and full year 2017 were included in the first quarter Earnings Release. See the Company's third quarter 2018 10-Q filing for additional detail.
Worldwide Brand and Financial Volumes
Worldwide brand volume reflects only owned brands sold to unrelated external customers within our geographic markets (net of returns and allowances), royalty volume and our proportionate share of equity investment worldwide brand volume calculated consistently with MCBC owned volume. Contract brewing and wholesaler volume is included within financial volume, but is removed from worldwide brand volume, as this is non-owned volume for which we do not directly control performance. Our worldwide brand volume definition also includes an adjustment from Sales-to-Wholesaler (STW) volume to Sales-to-Retailer (STR) volume. We believe the brand volume metric is important because, unlike financial volume and STWs, it provides the closest indication of the performance of our brands in relation to market and competitor sales trends.
Effective in the first quarter of 2018, we revised our net sales revenue (NSR) per HL performance discussions to be on a brand volume basis, such that all per-hectoliter calculations now include owned and actively managed brand volume, along with royalty volume, in the denominator, as well as the financial impact of these sales in the numerator, unless otherwise indicated.
Use of Non-GAAP Measures
In addition to financial measures presented on the basis of accounting principles generally accepted in the U.S. ("U.S. GAAP"), we also present constant currency, "underlying pretax and net income," "underlying income per diluted share," "underlying effective tax rate," and "underlying free cash flow," which are non-GAAP measures and should be viewed as supplements to (not substitutes for) our results of operations presented under U.S. GAAP. We also present underlying earnings before interest, taxes, depreciation, and amortization ("underlying EBITDA") as a non-GAAP measure, as well as underlying EBITDA margin, which is calculated by dividing underlying EBITDA by U.S. GAAP net sales. Our management uses underlying income, underlying income per diluted share, underlying EBITDA (and margin), and underlying effective tax rate as measures of operating performance, as well as underlying free cash flow in the measure of cash generated from core operations, to assist in comparing performance from period to period on a consistent basis; as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; in communications with the board of directors, stockholders, analysts and investors concerning our financial performance; as useful comparisons to the performance of our competitors; and as metrics of certain management incentive compensation calculations. We believe that underlying income, underlying income per diluted share, underlying EBITDA (and margin), and underlying effective tax rate performance are used by, and are useful to, investors and other users of our financial statements in evaluating our operating performance, as well as underlying free cash flow in evaluating our generation of cash from core operations, because they provide an additional tool to evaluate our performance without regard to special and non-core items, which can vary substantially from company to company depending upon accounting methods and book value of assets and capital structure. In addition to the reasons discussed above, we consider underlying free cash flow an important measure of our ability to generate cash, grow our business and enhance shareholder value, driven by core operations and after adjusting for non-core items. In addition, constant-currency results exclude the impact of foreign currency movements. For discussion and analysis of our liquidity, see the consolidated statements of cash flows and the Liquidity and Capital Resources section of our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our latest Form 10-K and 10-Q filings with the SEC.
We have provided reconciliations of all historical non-GAAP measures to their nearest U.S. GAAP measure and have consistently applied the adjustments within our reconciliations in arriving at each non-GAAP measure. These adjustments consist of special items from our U.S. GAAP financial statements as well as other non-core items, such as acquisition and integration related costs, unrealized mark-to-market gains and losses, and gains and losses on sales of non-operating assets, included in our U.S. GAAP results that warrant adjustment to arrive at non-GAAP results. We consider these items to be necessary adjustments for purposes of evaluating our ongoing business performance and are often considered non-recurring. Such adjustments are subjective and involve significant management judgment.
Our guidance for underlying Corporate MG&A, underlying depreciation and amortization, underlying free cash flow and underlying effective tax rate are also non-GAAP financial measures that exclude or otherwise have been adjusted for special items from our U.S. GAAP financial statements as well as other non-core items, such as acquisition and integration related costs, unrealized mark-to-market gains and losses, and gains and losses on sales of non-operating assets, included in our U.S. GAAP results that warrant adjustment to arrive at non-GAAP results. We consider these items to be necessary adjustments for purposes of evaluating our ongoing business performance and are often considered non-recurring. Such adjustments are subjective and involve significant management judgment. We are unable to reconcile the above described guidance measures to their nearest U.S. GAAP measures without unreasonable efforts because we are unable to predict with a reasonable degree of certainty the actual impact of the special and other non-core items. By their very nature, special and other non-core items are difficult to anticipate with precision because they are generally associated with unexpected and unplanned events that impact our company and its financial results. Therefore, we are unable to provide a reconciliation of these measures.
Constant currency is a non-GAAP measure utilized by Molson Coors management to measure performance, excluding the impact of foreign currency movements. As we operate in various foreign countries where the local currency may strengthen or weaken significantly versus the U.S. dollar or other currencies used in operations, we utilize a constant currency measure as an additional metric to evaluate the underlying performance of each business without consideration of foreign currency movements. This information is non-GAAP and should be viewed as a supplement to (not a substitute for) our reported results of operations under U.S. GAAP. We calculate the impact of foreign exchange on net sales, pretax income, non-GAAP underlying EBITDA and non-GAAP underlying pretax income using the following steps:
Reconciliations to Nearest U.S. GAAP Measures
Underlying EBITDA
($ in millions) (Unaudited) Three Months EndedSeptember 30,2018
% changeSeptember 30,2017
U.S. GAAP: Net income (loss) attributable to MCBC $ 338.3 17.9 % $ 287.0 Add: Net income (loss) attributable to noncontrolling interests 7.3 19.7 % 6.1 U.S. GAAP: Net income (loss) 345.6 17.9 % 293.1 Add: Interest expense (income), net 67.4 (7.2 )% 72.6 Add: Income tax expense (benefit) 64.5 (56.2 )% 147.4 Add: Depreciation and amortization 214.6 3.0 % 208.3 Adjustments included in underlying income(1) 71.9 N/M (25.7 ) Adjustments to arrive at underlying EBITDA(2) (7.3 ) 2.8 % (7.1 ) Non-GAAP: Underlying EBITDA $ 756.7 9.9 % $ 688.6 ($ in millions) (Unaudited) Nine Months EndedSeptember 30,2018
% changeSeptember 30,2017
U.S. GAAP: Net income (loss) attributable to MCBC $ 1,040.5 26.1 % $ 825.4 Add: Net income (loss) attributable to noncontrolling interests 18.4 4.0 % 17.7 U.S. GAAP: Net income (loss) 1,058.9 25.6 % 843.1 Add: Interest expense (income), net 227.3 (12.0 )% 258.4 Add: Income tax expense (benefit) 231.6 (31.6 )% 338.5 Add: Depreciation and amortization 644.2 6.6 % 604.3 Adjustments included in underlying income(1) (172.8 ) N/M (15.3 ) Adjustments to arrive at underlying EBITDA(2) (23.2 ) 73.1 % (13.4 ) Non-GAAP: Underlying EBITDA $ 1,966.0 (2.5 )% $ 2,015.6 N/M = Not meaningful (1) Includes adjustments to non-GAAP underlying income within the table above related to special and non-core items. (2) Represents adjustments to remove amounts related to interest, depreciation and amortization included in the adjustments to non-GAAP underlying income above, as these items are added back as adjustments to net income attributable to MCBC.
Underlying Free Cash Flow
(In millions) (Unaudited) Nine Months EndedSeptember 30,2018
September 30,2017
U.S. GAAP: Net Cash Provided by (Used In) Operating Activities $ 1,791.4 $ 1,145.4 Less: Additions to properties(1) (491.0 ) (466.0 ) Add/Less: Cash impact of special items(2) (319.4 ) 82.0 Add: Non-core costs related to acquisition of businesses(3) 44.4 75.0 Non-GAAP: Underlying Free Cash Flow $ 1,025.4 $ 836.4 (1) Included in net cash used in investing activities. (2) Included in net cash provided by (used in) operating activities. For the nine months ended September 30, 2018, primarily reflects the settlement payment received relating to a purchase price adjustment and for the nine months ended September 30, 2017, primarily reflects costs paid for brewery closures and restructuring activities. (3) Included in net cash provided by operating activities and reflects integration costs paid associated with the Acquisition of 58% of MillerCoors, LLC, and the Miller global brand portfolio.
Statements of Operations -- Molson Coors Brewing Company and Subsidiaries
Condensed Consolidated Statements of Operations
(In millions, except per share data)(Unaudited)
Three Months Ended Nine Months EndedSeptember 30,2018
September 30,2017
September 30,2018
September 30,2017
Financial volume in hectoliters 26.513 26.290 75.071 76.508 Sales $ 3,625.1 $ 3,552.9 $ 10,313.6 $ 10,259.8 Excise taxes (690.9 ) (669.7 ) (1,962.7 ) (1,836.6 ) Net sales 2,934.2 2,883.2 8,350.9 8,423.2 Cost of goods sold (1,714.0 ) (1,589.1 ) (4,988.8 ) (4,716.9 ) Gross profit 1,220.2 1,294.1 3,362.1 3,706.3 Marketing, general and administrative expenses (713.9 ) (783.8 ) (2,139.7 ) (2,271.5 ) Special items, net (36.6 ) (4.1 ) 267.7 (27.3 ) Operating income (loss) 469.7 506.2 1,490.1 1,407.5 Interest income (expense), net (67.4 ) (72.6 ) (227.3 ) (258.4 ) Other pension and postretirement benefits (costs), net 7.6 9.6 27.5 32.3 Other income (expense), net 0.2 (2.7 ) 0.2 0.2 Income (loss) before income taxes 410.1 440.5 1,290.5 1,181.6 Income tax benefit (expense) (64.5 ) (147.4 ) (231.6 ) (338.5 ) Net income (loss) 345.6 293.1 1,058.9 843.1 Net (income) loss attributable to noncontrolling interests (7.3 ) (6.1 ) (18.4 ) (17.7 ) Net income (loss) attributable to MCBC $ 338.3 $ 287.0 $ 1,040.5 $ 825.4 Basic net income (loss) attributable to MCBC per share: $ 1.57 $ 1.33 $ 4.82 $ 3.83 Diluted net income (loss) attributable to MCBC per share: $ 1.56 $ 1.33 $ 4.80 $ 3.81 Weighted average shares - basic 216.0 215.5 215.9 215.4 Weighted average shares - diluted 216.6 216.5 216.6 216.5 Dividends per share $ 0.41 $ 0.41 $ 1.23 $ 1.23
Molson Coors Brewing Company and Subsidiaries
U.S. Results of Operations
(In millions) (Unaudited) Three Months Ended Nine Months EndedSeptember 30,2018
September 30,2017
September 30,2018
September 30,2017
Financial volume in hectoliters(1) 17.206 17.163 50.262 52.125 Sales(1) $ 2,199.8 $ 2,154.3 $ 6,416.1 $ 6,578.7 Excise taxes (264.0 ) (262.1 ) (760.0 ) (797.7 ) Net sales(1) 1,935.8 1,892.2 5,656.1 5,781.0 Cost of goods sold(1) (1,118.7 ) (1,080.1 ) (3,298.5 ) (3,285.5 ) Gross profit 817.1 812.1 2,357.6 2,495.5 Marketing, general and administrative expenses (420.4 ) (458.2 ) (1,248.6 ) (1,322.7 ) Special items, net(2) (29.7 ) (0.1 ) (34.5 ) (15.2 ) Operating income 367.0 353.8 1,074.5 1,157.6 Interest income (expense), net 7.6 14.0 8.0 14.0 Other income (expense), net (0.4 ) (0.7 ) (1.1 ) (1.4 ) Income (loss) before income taxes $ 374.2 $ 367.1 $ 1,081.4 $ 1,170.2 Add/(less): Special items, net(2) 29.7 0.1 34.5 15.2 Acquisition and integration related costs(3) 0.6 1.5 2.6 6.8 Non-GAAP: Underlying pretax income (loss) $ 404.5 $ 368.7 $ 1,118.5 $ 1,192.2 Add: Interest expense (income), net (7.6 ) (14.0 ) (8.0 ) (14.0 ) Add: Depreciation and amortization 130.6 122.9 385.0 363.5 Adjustments to arrive at underlying EBITDA(4) (1.4 ) — (4.2 ) — Non-GAAP: Underlying EBITDA $ 526.1 $ 477.6 $ 1,491.3 $ 1,541.7 (1) Includes gross inter-segment sales, purchases, and volumes, which are eliminated in the consolidated totals. (2) See Part I—Item 1. Financial Statements, Note 6, "Special Items" of the Form 10-Q for detailed discussion of special items. Special items for the three and nine months ended September 30, 2018, includes accelerated depreciation in excess of normal depreciation of $1.4 million and $4.2 million, respectively. These accelerated depreciation charges are included in our adjustments to arrive at underlying EBITDA. (3) For the three and nine months ended September 30, 2018, $0.5 million and $2.5 million, respectively, of integration costs were incurred in cost of goods sold, and $0.1 million of integration costs in each period were incurred in marketing, general & administrative expenses. For the three and nine months ended September 30, 2017, $0.6 million and $1.8 million, respectively, of integration costs were incurred in cost of goods sold, and integration costs of $0.9 million and $5.0 million, respectively, were incurred in marketing, general & administrative expenses. (4) Represents adjustments to remove amounts related to interest, depreciation and amortization included in the adjustments to non-GAAP underlying income above, as these items are added back as adjustments to net income attributable to MCBC.Molson Coors Brewing Company and Subsidiaries
Canada Results of Operations
(In millions) (Unaudited) Three Months Ended Nine Months Ended
September 30,2018
September 30,2017
September 30,2018
September 30,2017
Financial volume in hectoliters(1) 2.405 2.395 6.585 6.718 Sales(1) $ 519.4 $ 535.2 $ 1,418.9 $ 1,440.2 Excise taxes (130.5 ) (128.8 ) (348.8 ) (335.1 ) Net sales(1) 388.9 406.4 1,070.1 1,105.1 Cost of goods sold(1) (218.8 ) (222.1 ) (641.9 ) (636.6 ) Gross profit 170.1 184.3 428.2 468.5 Marketing, general and administrative expenses (87.2 ) (103.0 ) (262.5 ) (303.8 ) Special items, net(2) (5.9 ) (5.9 ) (17.2 ) (8.1 ) Operating income (loss) 77.0 75.4 148.5 156.6 Other income (expense), net 0.5 1.8 (0.6 ) 11.2 Income (loss) before income taxes $ 77.5 $ 77.2 $ 147.9 $ 167.8 Add/(less): Special items, net(2) 5.9 5.9 17.2 8.1 Acquisition and integration related costs(3) 0.1 0.5 0.4 3.3 Other non-core items(4) — — — (8.1 ) Non-GAAP: Underlying pretax income (loss) $ 83.5 $ 83.6 $ 165.5 $ 171.1 Add: Depreciation and amortization 35.0 35.5 106.0 95.3 Adjustments to arrive at underlying EBITDA(5) (5.9 ) (6.1 ) (18.0 ) (8.4 ) Non-GAAP: Underlying EBITDA $ 112.6 $ 113.0 $ 253.5 $ 258.0 (1) Includes gross inter-segment sales, purchases, and volumes, which are eliminated in the consolidated totals. (2) See Part I—Item 1. Financial Statements, Note 6, "Special Items" of the Form 10-Q for detailed discussion of special items. Special items for the three and nine months ended September 30, 2018, includes accelerated depreciation in excess of normal depreciation of $5.9 million and $18.0 million, respectively, and for the three and nine months ended September 30, 2017, includes accelerated depreciation in excess of normal depreciation of $6.1 million and $8.4 million, respectively, related to the planned closure of the Vancouver brewery in 2019 and the Montreal brewery in 2021. These accelerated depreciation charges in excess of normal depreciation are included in our adjustments to arrive at underlying EBITDA. (3) For the three and nine months ended September 30, 2018, $0.1 million and $0.4 million, respectively, of integration related costs were incurred in cost of goods sold. For the three and nine months ended September 30, 2017, $0.5 million and $3.3 million, respectively, of integration related costs were incurred in cost of goods sold. (4) For the nine months ended September 30, 2017, a gain of $8.1 million was recorded in other income (expense), net resulting from a purchase price adjustment related to the historical sale of Molson Inc.’s ownership interest in the Montreal Canadiens. (5) Represents adjustments to remove amounts related to interest, depreciation and amortization included in the adjustments to non-GAAP underlying income above, as these items are added back as adjustments to net income attributable to MCBC.Molson Coors Brewing Company and Subsidiaries
Europe Results of Operations
(In millions) (Unaudited) Three Months Ended Nine Months EndedSeptember 30,2018
September 30,2017
September 30,2018
September 30,2017
Financial volume in hectoliters(1)(2) 6.891 6.815 18.211 17.889 Sales(2) $ 860.6 $ 831.2 $ 2,353.0 $ 2,141.8 Excise taxes (282.7 ) (270.0 ) (814.7 ) (674.3 ) Net sales(2) 577.9 561.2 1,538.3 1,467.5 Cost of goods sold (346.9 ) (330.8 ) (968.2 ) (872.7 ) Gross profit 231.0 230.4 570.1 594.8 Marketing, general and administrative expenses (133.3 ) (138.9 ) (407.4 ) (403.7 ) Special items, net(3) (0.6 ) 2.8 (5.4 ) (2.4 ) Operating income (loss) 97.1 94.3 157.3 188.7 Interest income (expense), net (1.5 ) 0.8 (3.6 ) 2.8 Other income (expense), net 0.4 (0.2 ) (0.8 ) 0.3 Income (loss) before income taxes $ 96.0 $ 94.9 $ 152.9 $ 191.8 Add/(less): Special items, net(3) 0.6 (2.8 ) 5.4 2.4 Acquisition and integration related costs(4) 0.2 0.1 0.5 0.4 Non-GAAP: Underlying pretax income (loss) $ 96.8 $ 92.2 $ 158.8 $ 194.6 Add: Interest expense (income), net 1.5 (0.8 ) 3.6 (2.8 ) Add: Depreciation and amortization 45.8 46.5 143.0 135.4 Adjustments to arrive at underlying EBITDA(5) — (1.0 ) (1.0 ) (5.0 ) Non-GAAP: Underlying EBITDA $ 144.1 $ 136.9 $ 304.4 $ 322.2 (1) Excludes royalty volume of 0.522 million hectoliters and 1.318 million hectoliters for the three and nine months ended September 30, 2018, respectively, and excludes royalty volume of 0.473 million hectoliters and 1.277 million hectoliters for the three and nine months ended September 30, 2017, respectively. (2) Includes gross inter-segment sales and volumes, which are eliminated in the consolidated totals. (3) See Part I—Item 1. Financial Statements, Note 6, "Special Items" of the Form 10-Q for detailed discussion of special items. Special items for the nine months ended September 30, 2018, includes accelerated depreciation in excess of normal depreciation of $1.0 million, and for the three and nine months ended September 30, 2017, includes accelerated depreciation in excess of normal depreciation of $1.0 million and $5.0 million, respectively, related to the closure of our Burton South brewery in the U.K., which was completed in the first quarter of 2018. These accelerated depreciation charges in excess of normal depreciation are included in our adjustments to arrive at underlying EBITDA. (4) For the three and nine months ended September 30, 2018, $0.2 million and $0.5 million, respectively, of integration related costs were incurred in cost of goods sold, and for the three and nine months ended September 30, 2017, $0.1 million and $0.4 million, respectively, of integration related costs were incurred in cost of goods sold. (5) Represents adjustments to remove amounts related to interest, depreciation and amortization included in the adjustments to non-GAAP underlying income above, as these items are added back as adjustments to net income attributable to MCBC.Molson Coors Brewing Company and Subsidiaries
International Results of Operations
(In millions) (Unaudited) Three Months Ended Nine Months EndedSeptember 30,2018
September 30,2017
September 30,2018
September 30,2017
Financial volume in hectoliters(1) 0.577 0.603 1.734 1.774 Sales $ 80.7 $ 74.5 $ 231.6 $ 222.1 Excise taxes (13.7 ) (8.8 ) (39.2 ) (29.5 ) Net sales 67.0 65.7 192.4 192.6 Cost of goods sold(2) (42.0 ) (43.9 ) (123.9 ) (130.7 ) Gross profit 25.0 21.8 68.5 61.9 Marketing, general and administrative expenses (24.1 ) (27.0 ) (59.8 ) (72.7 ) Special items, net(3) (0.4 ) (0.9 ) (3.2 ) (1.5 ) Operating income (loss) 0.5 (6.1 ) 5.5 (12.3 ) Other income (expense), net (1.5 ) 0.1 (1.5 ) 0.1 Income (loss) before income taxes $ (1.0 ) $ (6.0 ) $ 4.0 $ (12.2 ) Add/(less): Special items, net(3) 0.4 0.9 3.2 1.5 Acquisition and integration related costs(4) 1.1 1.7 1.9 6.6 Non-GAAP: Underlying pretax income (loss) $ 0.5 $ (3.4 ) $ 9.1 $ (4.1 ) Add: Depreciation and amortization 2.4 2.4 7.4 7.2 Non-GAAP: Underlying EBITDA $ 2.9 $ (1.0 ) $ 16.5 $ 3.1 (1) Excludes royalty volume of 0.649 million hectoliters and 1.626 million hectoliters for the three and nine months ended September 30, 2018, respectively, and excludes royalty volume of 0.474 million hectoliters and 1.501 million hectoliters for the three and nine months ended September 30, 2017, respectively. (2) Includes gross inter-segment purchases, which are eliminated in the consolidated totals. (3) See Part I—Item 1. Financial Statements, Note 6, "Special Items" of the Form 10-Q for detailed discussion of special items. (4) For the three and nine months ended September 30, 2018, $0.5 million of integration costs were incurred in cost of goods sold, and for the nine months ended September 30, 2017, $1.4 million of integration costs were incurred in cost of goods sold. For the three and nine months ended September 30, 2018, integration costs of $0.6 million and $1.4 million, respectively, were incurred in marketing, general & administrative expenses, and for the three and nine months ended September 30, 2017, integration costs of $1.7 million and $5.2 million, respectively, were incurred in marketing, general & administrative expenses.Molson Coors Brewing Company and Subsidiaries
Corporate Results of Operations
(In millions) (Unaudited) Three Months Ended Nine Months EndedSeptember 30,2018
September 30,2017
September 30,2018
September 30,2017
Financial volume in hectoliters — — — — Sales $ 0.2 $ 0.3 $ 0.7 $ 0.9 Excise taxes — — — — Net sales 0.2 0.3 0.7 0.9 Cost of goods sold (23.2 ) 45.2 (63.0 ) 84.7 Gross profit (23.0 ) 45.5 (62.3 ) 85.6 Marketing, general and administrative expenses (48.9 ) (56.7 ) (161.4 ) (168.6 ) Special items, net(1) — — 328.0 (0.1 ) Operating income (loss) (71.9 ) (11.2 ) 104.3 (83.1 ) Interest expense, net (73.5 ) (87.4 ) (231.7 ) (275.2 ) Other pension and postretirement benefits (costs), net 7.6 9.6 27.5 32.3 Other income (expense), net 1.2 (3.7 ) 4.2 (10.0 ) Income (loss) before income taxes $ (136.6 ) $ (92.7 ) $ (95.7 ) $ (336.0 ) Add/(less): Special items, net(1) — — (328.0 ) 0.1 Acquisition and integration related costs(2) 8.1 11.7 24.6 36.3 Unrealized mark-to-market (gains) and losses(3) 23.2 (45.3 ) 62.8 (85.0 ) Non-core other pension and postretirement benefits (costs), net(4) 2.0 — 2.1 (2.9 ) Non-GAAP: Underlying pretax income (loss) $ (103.3 ) $ (126.3 ) $ (334.2 ) $ (387.5 ) Add: Interest expense (income), net 73.5 87.4 231.7 275.2 Add: Depreciation and amortization 0.8 1.0 2.8 2.9 Non-GAAP: Underlying EBITDA $ (29.0 ) $ (37.9 ) $ (99.7 ) $ (109.4 ) (1) See Part I—Item 1. Financial Statements, Note 6, "Special Items" of the Form 10-Q for detailed discussion of special items. (2) In connection with the acquisition, for the three and nine months ended September 30, 2018, we have recorded $8.1 million and $24.6 million, respectively, of integration costs within marketing, general & administrative expenses, and for the three and nine months ended September 30, 2017, we have recorded $11.7 million and $36.3 million, respectively, of integration costs within marketing, general & administrative expenses. (3) The unrealized changes in fair value on our commodity swaps, which are economic hedges, are recorded as cost of goods sold within our Corporate business activities. As the exposure we are managing is realized, we reclassify the gain or loss to the segment in which the underlying exposure resides, allowing our segments to realize the economic effects of the derivative without the resulting unrealized mark-to-market volatility. (4) For the three and nine months ended September 30, 2018, we recognized special termination benefit charges related to the restructuring program in the U.S. segment. See Part I—Item 1. Financial Statements, Note 13, "Pension and Other Postretirement Benefits" of the Form 10-Q for discussion. For the nine months ended September 30, 2017, includes the retrospective impact of the FASB's new pension and OPEB accounting standard and moving the non-service cost component of net periodic pension and other postretirement benefits to the Corporate segment. See Part I—Item 1. Financial Statements, Note 2, "New Accounting Pronouncements" of the Form 10-Q for detailed discussion.
Balance Sheet
Condensed Consolidated Balance Sheets
(In millions, except par value) (Unaudited) As of September 30, 2018 December 31, 2017 Assets Current assets: Cash and cash equivalents $ 750.1 $ 418.6 Accounts receivable, net 933.4 733.8 Other receivables, net 184.2 168.2 Inventories, net 631.9 591.5 Other current assets, net 312.7 277.6 Total current assets 2,812.3 2,189.7 Properties, net 4,593.5 4,673.7 Goodwill 8,333.0 8,405.5 Other intangibles, net 13,996.4 14,296.5 Other assets 735.1 681.5 Total assets $ 30,470.3 $ 30,246.9 Liabilities and equity Current liabilities: Accounts payable and other current liabilities $ 2,820.6 $ 2,684.5 Current portion of long-term debt and short-term borrowings 1,602.0 714.8 Total current liabilities 4,422.6 3,399.3 Long-term debt 8,970.3 10,598.7 Pension and postretirement benefits 827.6 848.5 Deferred tax liabilities 1,853.6 1,648.6 Other liabilities 306.2 316.8 Total liabilities 16,380.3 16,811.9 Molson Coors Brewing Company stockholders' equity Capital stock: Preferred stock, $0.01 par value (authorized: 25.0 shares; none issued) — — Class A common stock, $0.01 par value per share (authorized: 500.0 shares; issued and outstanding: 2.6 shares and 2.6 shares, respectively) — — Class B common stock, $0.01 par value per share (authorized: 500.0 shares; issued: 205.1 shares and 204.7 shares, respectively) 2.0 2.0 Class A exchangeable shares, no par value (issued and outstanding: 2.8 shares and 2.9 shares, respectively) 103.4 107.7 Class B exchangeable shares, no par value (issued and outstanding: 14.8 shares and 14.7 shares, respectively) 557.4 553.2 Paid-in capital 6,715.9 6,688.5 Retained earnings 7,953.2 7,206.1 Accumulated other comprehensive income (loss) (996.4 ) (860.0 ) Class B common stock held in treasury at cost (9.5 shares and 9.5 shares, respectively) (471.4 ) (471.4 ) Total Molson Coors Brewing Company stockholders' equity 13,864.1 13,226.1 Noncontrolling interests 225.9 208.9 Total equity 14,090.0 13,435.0 Total liabilities and equity $ 30,470.3 $ 30,246.9
Cash Flow Statement
Condensed Consolidated Statements of Cash Flows
($ in millions) (Unaudited) Nine Months Ended September 30, 2018 September 30, 2017 Cash flows from operating activities: Net income (loss) including noncontrolling interests $ 1,058.9 $ 843.1 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 644.2 604.3 Amortization of debt issuance costs and discounts 10.0 17.6 Share-based compensation 33.8 46.2 (Gain) loss on sale or impairment of properties and other assets, net 0.2 (9.6 ) Unrealized (gain) loss on foreign currency fluctuations and derivative instruments, net 61.2 (84.5 ) Income tax (benefit) expense 231.6 338.5 Income tax (paid) received 11.2 15.9 Interest expense, excluding interest amortization 231.8 259.3 Interest paid (273.1 ) (299.0 ) Pension expense (benefit) (42.9 ) (46.9 ) Pension contributions paid (7.1 ) (307.7 ) Change in current assets and liabilities and other (168.4 ) (231.8 ) Net cash provided by (used in) operating activities 1,791.4 1,145.4 Cash flows from investing activities: Additions to properties (491.0 ) (466.0 ) Proceeds from sales of properties and other assets 7.5 56.9 Other (50.0 ) 11.1 Net cash provided by (used in) investing activities (533.5 ) (398.0 ) Cash flows from financing activities: Exercise of stock options under equity compensation plans 6.7 3.6 Dividends paid (265.6 ) (264.9 ) Payments on debt and borrowings (310.2 ) (2,601.5 ) Proceeds on debt and borrowings — 1,536.0 Net proceeds from (payments on) revolving credit facilities and commercial paper (374.8 ) 999.7 Change in overdraft balances and other 20.5 (40.7 ) Net cash provided by (used in) financing activities (923.4 ) (367.8 ) Cash and cash equivalents: Net increase (decrease) in cash and cash equivalents 334.5 379.6 Effect of foreign exchange rate changes on cash and cash equivalents (3.0 ) 30.8 Balance at beginning of year 418.6 560.9 Balance at end of period $ 750.1 $ 971.3
Reconciliations to Nearest U.S. GAAP Measures by Line Item
Third Quarter 2018Three Months Ended September 30, 2018
(In millions) (Unaudited) Net salesCost of goodssold(1)
Gross profitMarketing,general andadministrativeexpenses(2)
Special items,net(3)
Operatingincome (loss)
Reported (U.S. GAAP) $ 2,934.2 $ (1,714.0 ) $ 1,220.2 $ (713.9 ) $ (36.6 ) $ 469.7 Adjustments to arrive at underlying: Special items, net Employee-related charges — — — — 28.7 28.7 Impairments or asset abandonment charges — — — — 7.8 7.8 Termination fees and other (gains) losses — — — — 0.1 0.1 Non-Core items Integration related costs — 1.3 1.3 8.8 — 10.1 Unrealized mark-to-market (gains) losses — 23.2 23.2 — — 23.2 Tax effects on special and non-GAAP items — — — — — — Underlying (Non-GAAP) $ 2,934.2 $ (1,689.5 ) $ 1,244.7 $ (705.1 ) $ — $ 539.6 Third Quarter 2018 Three Months Ended September 30, 2018 (In millions, except per share data) (Unaudited)Interestincome(expense),net
Other pensionandpostretirementbenefits(costs), net(4)
Otherincome(expense),net
Income(loss)beforeincometaxes
Incometaxbenefit(expense)
Net income(loss)attributableto MCBC
Net income(loss)attributable toMCBC perdiluted share
Reported (U.S. GAAP) $ (67.4 ) $ 7.6 $ 0.2 $ 410.1 $ (64.5 ) $ 338.3 $ 1.56 Adjustments to arrive at underlying: Special items, net Employee-related charges — — — 28.7 — 28.7 0.13 Impairments or asset abandonment charges — — — 7.8 — 7.8 0.03 Termination fees and other (gains) losses — — — 0.1 — 0.1 — Non-Core items Integration related costs — — — 10.1 — 10.1 0.05 Unrealized mark-to-market (gains) losses — — — 23.2 — 23.2 0.11 Non-core other pension and postretirement benefits (costs), net — 2.0 — 2.0 — 2.0 0.01 Tax effects on special and non-GAAP items — — — — (11.7 ) (11.7 ) (0.05 ) Underlying (Non-GAAP) $ (67.4 ) $ 9.6 $ 0.2 $ 482.0 $ (76.2 ) $ 398.5 $ 1.84 (1) Adjustments relate to the following segments: U.S. segment $0.5 million, Canada segment $0.1 million, Europe segment $0.2 million, International segment $0.5 million, Corporate segment $23.2 million. (2) Adjustments relate to the following segment: U.S. segment $0.1 million, International segment $0.6 million, Corporate segment $8.1 million. (3) Adjustments relate to the following segments: U.S. segment $29.7 million, Canada segment $5.9 million, Europe segment $0.6 million, International segment $0.4 million. (4) Adjustments relate to the following segment: Corporate segment $2.0 million.YTD Third Quarter 2018 Nine Months Ended September 30, 2018 (In millions) (Unaudited) Net sales
Cost of goodssold(1)
Gross profitMarketing,general andadministrativeexpenses(2)
Special items,net(3)
Operatingincome (loss)
Reported (U.S. GAAP) $ 8,350.9 $ (4,988.8 ) $ 3,362.1 $ (2,139.7 ) $ 267.7 $ 1,490.1 Adjustments to arrive at underlying: Special items, net Employee-related charges — — — — 33.6 33.6 Impairments or asset abandonment charges — — — — 25.4 25.4 Termination fees and other (gains) losses — — — — (326.7 ) (326.7 ) Non-Core items Integration related costs — 3.9 3.9 26.1 — 30.0 Unrealized mark-to-market (gains) losses — 62.8 62.8 — — 62.8 Tax effects on special and non-GAAP items — — — — — — Underlying (Non-GAAP) $ 8,350.9 $ (4,922.1 ) $ 3,428.8 $ (2,113.6 ) $ — $ 1,315.2 YTD Third Quarter 2018 Nine Months Ended September 30, 2018(In millions, except per share data)(Unaudited)
Interestincome(expense),net
Other pensionandpostretirement benefits(costs), net(4)
Otherincome(expense),net
Income(loss)beforeincometaxes
Incometaxbenefit(expense)
Net income(loss)attributableto MCBC
Net income(loss)attributable toMCBC perdiluted share
Reported (U.S. GAAP) $ (227.3 ) $ 27.5 $ 0.2 $ 1,290.5 $ (231.6 ) $ 1,040.5 $ 4.80 Adjustments to arrive at underlying: Special items, net Employee-related charges — — — 33.6 — 33.6 0.16 Impairments or asset abandonment charges — — — 25.4 — 25.4 0.12 Termination fees and other (gains) losses — — — (326.7 ) — (326.7 ) (1.51 ) Non-Core items Integration related costs — — — 30.0 — 30.0 0.14 Unrealized mark-to-market (gains) losses — — — 62.8 — 62.8 0.29 Non-core other pension and postretirement benefits (costs), net — 2.1 — 2.1 — 2.1 0.01 Tax effects on special and non-GAAP items — — — — 41.2 41.2 0.19 Underlying (Non-GAAP) $ (227.3 ) $ 29.6 $ 0.2 $ 1,117.7 $ (190.4 ) $ 908.9 $ 4.20 (1) Adjustments relate to the following segments: U.S. segment $2.5 million, Canada segment $0.4 million, Europe segment $0.5 million, International segment $0.5 million, Corporate segment $62.8 million. (2) Adjustments relate to the following segment: U.S. segment $0.1 million, International segment $1.4 million, Corporate segment $24.6 million. (3) Adjustments relate to the following segments: U.S. segment $34.5 million, Canada segment $17.2 million, Europe segment $5.4 million, International segment $3.2 million, Corporate segment $(328.0) million. (4) Adjustments relate to the following segment: Corporate segment $2.1 million.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181031005168/en/
Molson Coors Brewing CompanyNews MediaColin Wheeler, 303-927-2443orInvestor RelationsMark Swartzberg, 303-927-2334orKevin Kim, 303-927-2515
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