Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements	Page
Consolidated Financial Statements:
Management's Report	78
Report of Independent Registered Public Accounting Firm	79
Consolidated Statements of Operations for the years ended December 31, 2016, December 31, 2015, and December 31, 2014	80
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2016, December 31, 2015, and December 31, 2014	81
Consolidated Balance Sheets at December 31, 2016, and December 31, 2015	82
Consolidated Statements of Cash Flows for the years ended December 31, 2016, December 31, 2015, and December 31, 2014	84
Consolidated Statements of Stockholders' Equity and Noncontrolling Interests for the years ended December 31, 2016, December 31, 2015, and December 31, 2014	86
Notes to Consolidated Financial Statements	87

MANAGEMENT'S REPORT

The preparation, integrity and objectivity of the financial statements and all other financial information included in this annual report are the responsibility of the management of Molson Coors Brewing Company. The financial statements have been prepared in accordance with generally accepted accounting principles in the United States, applying estimates based on management's best judgment where necessary. Management believes that all material uncertainties have been appropriately accounted for and disclosed.

The Company's management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2016. In making this assessment, the Company's management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013 Framework). Based upon its assessment, management concluded that, as of December 31, 2016, the Company's internal control over financial reporting was effective. We acquired full control of MillerCoors LLC on October 11, 2016, upon completion of the Acquisition. As such, the scope of our assessment of the effectiveness of our internal control over financial reporting did not include the internal control over financial reporting at MillerCoors LLC. This exclusion is consistent with the SEC Staff's guidance that an assessment of a recently acquired business may be omitted from the scope of our assessment of the effectiveness of the Company's internal control over financial reporting in the year of acquisition. MillerCoors LLC is a wholly-owned subsidiary and represented 68% of the Company's total consolidated assets and 32% of the Company's consolidated net sales as of and for the year ended December 31, 2016, respectively.

PricewaterhouseCoopers LLP, the Company's independent registered public accounting firm, provides an objective, independent audit of the consolidated financial statements and internal control over financial reporting. Their accompanying report is based upon an examination conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), including tests of accounting procedures, records and internal control.

The Board of Directors, operating through its Audit Committee composed of independent, outside directors, monitors the Company's accounting control systems and reviews the results of the Company's auditing activities. The Audit Committee meets at least quarterly, either separately or jointly, with representatives of management, PricewaterhouseCoopers LLP, and internal auditors. To ensure complete independence, PricewaterhouseCoopers LLP and the Company's internal auditors have full and free access to the Audit Committee and may meet with or without the presence of management.

/s/ MARK R. HUNTER		/s/ TRACEY I. JOUBERT
Mark R. Hunter		Tracey I. Joubert
President & Chief Executive Officer		Chief Financial Officer
Molson Coors Brewing Company		Molson Coors Brewing Company
February 14, 2017		February 14, 2017

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

of Molson Coors Brewing Company:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Molson Coors Brewing Company and its subsidiaries at December 31, 2016 and December 31, 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Management's Annual Report on Internal Control over Financial Reporting appearing under Item 9A, management has excluded MillerCoors LLC from its assessment of internal control over financial reporting as of December 31, 2016 because it was acquired by the Company in a purchase business combination during 2016. We have also excluded MillerCoors LLC from our audit of internal control over financial reporting. MillerCoors LLC is a wholly-owned subsidiary whose total assets and total net sales represent 68 percent and 32 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2016.

/s/ PricewaterhouseCoopers LLP

Denver, Colorado

February 14, 2017

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN MILLIONS, EXCEPT PER SHARE DATA)

	For the Years Ended
	December 31, 2016				December 31, 2015				December 31, 2014
Sales	$	6,597.4			$	5,127.4			$	5,927.5
Excise taxes	(1,712.4		)		(1,559.9		)		(1,781.2		)
Net sales	4,885.0				3,567.5				4,146.3
Cost of goods sold	(3,003.1		)		(2,163.5		)		(2,493.3		)
Gross profit	1,881.9				1,404.0				1,653.0
Marketing, general and administrative expenses	(1,597.3		)		(1,051.8		)		(1,163.9		)
Special items, net	2,523.9				(346.7		)		(324.4		)
Equity income in MillerCoors	500.9				516.3				561.8
Operating income (loss)	3,309.4				521.8				726.5
Other income (expense), net
Interest expense	(271.6		)		(120.3		)		(145.0		)
Interest income	27.2				8.3				11.3
Other income (expense), net	(29.7		)		0.9				(6.5		)
Total other income (expense), net	(274.1		)		(111.1		)		(140.2		)
Income (loss) from continuing operations before income taxes	3,035.3				410.7				586.3
Income tax benefit (expense)	(1,050.7		)		(51.8		)		(69.0		)
Net income (loss) from continuing operations	1,984.6				358.9				517.3
Income (loss) from discontinued operations, net of tax	(2.8		)		3.9				0.5
Net income (loss) including noncontrolling interests	1,981.8				362.8				517.8
Net (income) loss attributable to noncontrolling interests	(5.9		)		(3.3		)		(3.8		)
Net income (loss) attributable to Molson Coors Brewing Company	$	1,975.9			$	359.5			$	514.0
Basic net income (loss) attributable to Molson Coors Brewing Company per share:
From continuing operations	$	9.33			$	1.92			$	2.78
From discontinued operations	(0.01		)		0.02				—
Basic net income (loss) attributable to Molson Coors Brewing Company per share	$	9.32			$	1.94			$	2.78
Diluted net income (loss) attributable to Molson Coors Brewing Company per share:
From continuing operations	$	9.27			$	1.91			$	2.76
From discontinued operations	(0.01		)		0.02				—
Diluted net income (loss) attributable to Molson Coors Brewing Company per share	$	9.26			$	1.93			$	2.76
Weighted-average shares—basic	212.0				185.3				184.9
Weighted-average shares—diluted	213.4				186.4				186.1
Amounts attributable to Molson Coors Brewing Company
Net income (loss) from continuing operations	$	1,978.7			$	355.6			$	513.5
Income (loss) from discontinued operations, net of tax	(2.8		)		3.9				0.5
Net income (loss) attributable to Molson Coors Brewing Company	$	1,975.9			$	359.5			$	514.0

See notes to consolidated financial statements.

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(IN MILLIONS)

	For the Years Ended
	December 31, 2016				December 31, 2015				December 31, 2014
Net income (loss) including noncontrolling interests	$	1,981.8			$	362.8			$	517.8
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(234.4		)		(918.4		)		(849.8		)
Unrealized gain (loss) on derivative instruments	9.7				20.9				7.0
Reclassification of derivative (gain) loss to income	(3.0		)		(5.4		)		2.3
Pension and other postretirement benefit adjustments	62.3				33.6				(136.8		)
Amortization of net prior service (benefit) cost and net actuarial (gain) loss to income	31.4				37.5				26.2
Reclassification of historical share of MillerCoors' AOCI loss	258.2				—				—
Ownership share of unconsolidated subsidiaries' other comprehensive income (loss)	22.3				34.3				(102.2		)
Total other comprehensive income (loss), net of tax	146.5				(797.5		)		(1,053.3		)
Comprehensive income (loss)	2,128.3				(434.7		)		(535.5		)
Comprehensive (income) loss attributable to noncontrolling interests	(3.0		)		(2.3		)		(3.8		)
Comprehensive income (loss) attributable to Molson Coors Brewing Company	$	2,125.3			$	(437.0	)		$	(539.3	)

See notes to consolidated financial statements.

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN MILLIONS)
	As of
	December 31, 2016				December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	560.9			$	430.9
Accounts and other receivables:
Trade, less allowance for doubtful accounts of $10.7 and $8.7, respectively	654.4				407.9
Affiliate receivables	15.1				16.8
Other receivables, less allowance for doubtful accounts of $0.6 and $0.8, respectively	135.8				101.2
Inventories:
Finished	213.8				139.1
In process	81.6				13.0
Raw materials	238.5				18.6
Packaging materials	58.8				8.6
Total inventories	592.7				179.3
Other current assets	210.7				122.7
Total current assets	2,169.6				1,258.8
Properties, less accumulated depreciation of $1,499.3 and $1,390.1, respectively	4,507.4				1,590.8
Goodwill	8,250.1				1,983.3
Other intangibles, less accumulated amortization of $404.0 and $341.8, respectively	14,031.9				4,745.7
Investment in MillerCoors	—				2,441.0
Other assets	382.5				256.7
Total assets	$	29,341.5			$	12,276.3

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) (IN MILLIONS, EXCEPT PAR VALUE)
	As of
	December 31, 2016				December 31, 2015
Liabilities and equity
Current liabilities:
Accounts payable and other current liabilities (includes affiliate payable amounts of $2.1 and $10.6, respectively)	$	2,467.7			$	1,184.4
Current portion of long-term debt and short-term borrowings	684.8				28.7
Discontinued operations	5.0				4.1
Total current liabilities	3,157.5				1,217.2
Long-term debt	11,387.7				2,908.7
Pension and postretirement benefits	1,196.0				201.9
Deferred tax liabilities	1,699.0				799.8
Other liabilities	267.0				75.3
Discontinued operations	12.6				10.3
Total liabilities	17,719.8				5,213.2
Commitments and contingencies (Note 18 )
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: 203.7 shares and 172.5 shares, respectively)	2.0				1.7
Class A exchangeable shares, no par value (issued and outstanding: 2.9 shares and 2.9 shares, respectively)	108.1				108.2
Class B exchangeable shares, no par value (issued and outstanding: 15.2 shares and 16.0 shares, respectively)	571.2				603.0
Paid-in capital	6,635.3				4,000.4
Retained earnings	6,119.0				4,496.0
Accumulated other comprehensive income (loss)	(1,545.5		)		(1,694.9		)
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	11,418.7				7,043.0
Noncontrolling interests	203.0				20.1
Total equity	11,621.7				7,063.1
Total liabilities and equity	$	29,341.5			$	12,276.3

See notes to consolidated financial statements.

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN MILLIONS)
	For the Years Ended
	December 31, 2016				December 31, 2015				December 31, 2014
Cash flows from operating activities:
Net income (loss) including noncontrolling interests	$	1,981.8			$	362.8			$	517.8
Adjustments to reconcile net income to net cash provided by operating activities:
Revaluation gain on previously held 42% equity interest in MillerCoors and AOCI reclassification	(2,965.0		)		—				—
Inventory step-up in cost of goods sold	82.0				—				—
Depreciation and amortization	388.4				314.4				313.0
Amortization of debt issuance costs and discounts	66.5				11.1				7.0
Share-based compensation	29.9				18.4				23.5
(Gain) loss on sale or impairment of properties and other assets, net	396.0				274.7				375.5
Equity income in MillerCoors	(488.6		)		(516.3		)		(561.8		)
Distributions from MillerCoors	488.6				516.3				561.8
Equity in net (income) loss of other unconsolidated affiliates	(2.6		)		(4.5		)		1.7
Distributions from other unconsolidated affiliates	—				—				15.4
Unrealized (gain) loss on foreign currency fluctuations and derivative instruments, net	(23.5		)		16.7				12.2
Income tax (benefit) expense	1,050.7				51.8				69.0
Income tax (paid) received	(165.0		)		(134.1		)		(93.1		)
Interest expense, excluding interest amortization	262.3				116.1				138.0
Interest paid	(162.5		)		(98.9		)		(136.3		)
Pension expense	10.0				15.3				21.0
Pension contributions (paid)	(12.1		)		(256.1		)		(33.6		)
Change in current assets and liabilities (net of impact of business combinations) and other:
Receivables	65.6				60.8				22.3
Inventories	(23.2		)		10.9				(16.5		)
Payables and other current liabilities	144.9				(111.0		)		75.3
Other assets and other liabilities	(0.1		)		71.4				(23.8		)
(Gain) loss from discontinued operations	2.8				(3.9		)		(0.5		)
Net cash provided by operating activities	1,126.9				715.9				1,287.9
Cash flows from investing activities:
Additions to properties	(341.8		)		(275.0		)		(259.5		)
Proceeds from sales of properties and other assets	174.5				11.8				8.8
Acquisition of businesses, net of cash acquired	(11,961.0		)		(91.2		)		—
Investment in MillerCoors	(1,253.7		)		(1,442.7		)		(1,388.1		)
Return of capital from MillerCoors	1,086.9				1,441.1				1,382.5
Other	8.5				21.3				16.9
Net cash used in investing activities	(12,286.6		)		(334.7		)		(239.4		)

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (IN MILLIONS)
	For the Years Ended
	December 31, 2016				December 31, 2015				December 31, 2014
Cash flows from financing activities:
Proceeds from issuance of common stock, net	2,525.6				—				—
Exercise of stock options under equity compensation plans	11.2				34.6				44.4
Dividends paid	(352.9		)		(303.4		)		(273.6		)
Payments for purchase of treasury stock	—				(150.1		)		—
Payments on debt and borrowings	(223.9		)		(701.4		)		(74.4		)
Proceeds on debt and borrowings	9,460.6				703.3				4.8
Debt issuance costs	(60.7		)		(61.8		)		(1.9		)
Payments on settlement of derivative instruments	—				—				(65.2		)
Net proceeds from (payments on) revolving credit facilities and commercial paper	(1.1		)		3.9				(513.9		)
Change in overdraft balances and other	(40.9		)		(56.6		)		62.5
Net cash provided by (used in) financing activities	11,317.9				(531.5		)		(817.3		)
Cash and cash equivalents:
Net increase (decrease) in cash and cash equivalents	158.2				(150.3		)		231.2
Effect of foreign exchange rate changes on cash and cash equivalents	(28.2		)		(43.4		)		(48.9		)
Balance at beginning of year	430.9				624.6				442.3
Balance at end of year	$	560.9			$	430.9			$	624.6

See notes to consolidated financial statements. See Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" for supplementary cash flow data.

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS (IN MILLIONS)
					MCBC Stockholders
									Accumulated												Common Stock
									other				Common stock								held in				Exchangeable												Non
					Retained				comprehensive				issued								treasury				shares issued								Paid-in-				controlling
	Total				earnings				income (loss)				Class A				Class B				Class B				Class A				Class B				capital				interests
Balance at December 31, 2013	$	8,630.1			$	4,199.5			$	154.9			$	—			$	1.7			$	(321.1	)		$	108.5			$	714.1			$	3,747.6			$	24.9
Exchange of shares	—				—				—				—				—				—				—				(52.6		)		52.6				—
Shares issued under equity compensation plan	47.9				—				—				—				—				—				—				—				47.9				—
Amortization of share-based compensation	21.7				—				—				—				—				—				—				—				21.7				—
Purchase of noncontrolling interest	(0.4		)		—				—				—				—				—				—				—				1.4				(1.8		)
Net income (loss) including noncontrolling interests	517.8				514.0				—				—				—				—				—				—				—				3.8
Other comprehensive income (loss), net of tax	(1,053.3		)		—				(1,053.3		)		—				—				—				—				—				—				—
Dividends declared and paid	(277.7		)		(273.6		)		—				—				—				—				—				—				—				(4.1		)
Balance at December 31, 2014	$	7,886.1			$	4,439.9			$	(898.4	)		$	—			$	1.7			$	(321.1	)		$	108.5			$	661.5			$	3,871.2			$	22.8
Exchange of shares	—				—				—				—				—				—				(0.3		)		(58.5		)		58.8				—
Shares issued under equity compensation plan	48.9				—				—				—				—				—				—				—				48.9				—
Amortization of share-based compensation	21.2				—				—				—				—				—				—				—				21.2				—
Purchase of noncontrolling interest	(0.3		)		—				—				—				—				—				—				—				0.3				(0.6		)
Net income (loss) including noncontrolling interests	362.8				359.5				—				—				—				—				—				—				—				3.3
Other comprehensive income (loss), net of tax	(797.5		)		—				(796.5		)		—				—				—				—				—				—				(1.0		)
Repurchase of common stock	(150.3		)		—				—				—				—				(150.3		)		—				—				—				—
Dividends declared and paid	(307.8		)		(303.4		)		—				—				—				—				—				—				—				(4.4		)
Balance at December 31, 2015	$	7,063.1			$	4,496.0			$	(1,694.9	)		$	—			$	1.7			$	(471.4	)		$	108.2			$	603.0			$	4,000.4			$	20.1
Exchange of shares	—				—				—				—				—				—				(0.1		)		(31.8		)		31.9				—
Shares issued under equity compensation plan	(1.1		)		—				—				—				—				—				—				—				(1.1		)		—
Amortization of share-based compensation	32.3				—				—				—				—				—				—				—				32.3				—
Replacement share-based awards issued in conjunction with Acquisition	46.4				—				—				—				—				—				—				—				46.4				—
Acquisition of businesses	186.3				—				—				—				—				—				—				—				—				186.3
Purchase of noncontrolling interest	(0.1		)		—				—				—				—				—				—				—				0.1				(0.2		)
Net income (loss) including noncontrolling interests	1,981.8				1,975.9				—				—				—				—				—				—				—				5.9
Other comprehensive income (loss), net of tax	146.5				—				149.4				—				—				—				—				—				—				(2.9		)
Issuance of common stock	2,525.6				—				—				—				0.3				—				—				—				2,525.3				—
Dividends declared and paid	(359.1		)		(352.9		)		—				—				—				—				—				—				—				(6.2		)
Balance at December 31, 2016	$	11,621.7			$	6,119.0			$	(1,545.5	)		$	—			$	2.0			$	(471.4	)		$	108.1			$	571.2			$	6,635.3			$	203.0

See notes to consolidated financial statements.

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Summary of Significant Accounting Policies

Unless otherwise noted in this report, any description of "we", "us" or "our" includes Molson Coors Brewing Company ("MCBC" or the "Company"), principally a holding company, and its operating and non-operating subsidiaries included within our reporting segments and Corporate. Our reporting segments include: MillerCoors LLC ("MillerCoors" or U.S. segment), operating in the United States ("U.S."); Molson Coors Canada ("MCC" or Canada segment), operating in Canada; Molson Coors Europe (Europe segment), operating in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, Republic of Ireland, Romania, Serbia, the United Kingdom ("U.K.") and various other European countries; and Molson Coors International ("MCI" or MCI segment), operating in various other countries.

On November 11, 2015, Anheuser-Busch InBev SA/NV (“ABI”) announced it had entered into a definitive agreement to acquire SABMiller plc ("SABMiller") (“ABI/SABMiller transaction”) and concurrently, on November 11, 2015, we entered into a purchase agreement (as amended, the "Purchase Agreement") with ABI to acquire, contingent upon the closing of the ABI/SABMiller transaction, all of SABMiller's 58% economic interest and 50% voting interest in MillerCoors and all trademarks, contracts and other assets primarily related to the Miller brand portfolio outside of the U.S. and Puerto Rico for $12.0 billion in cash, subject to downward adjustment as described in the Purchase Agreement (the "Acquisition"). On October 11, 2016, the Acquisition was completed and MillerCoors, previously a joint venture between MCBC and SABMiller, became a wholly-owned subsidiary of MCBC. Accordingly, for periods prior to October 11, 2016, our 42% economic ownership interest in MillerCoors was accounted for under the equity method of accounting, and, therefore, its results of operations were reported as equity income in MillerCoors in the consolidated statements of operations, and our 42% share of MillerCoors' net assets were reported as investment in MillerCoors in the consolidated balance sheets. Beginning October 11, 2016, MillerCoors was fully consolidated and continues to be reported as our U.S. segment. Additionally, our consolidated balance sheet as of December 31, 2016, includes our acquired assets and liabilities, which were recorded at their respective acquisition-date fair values upon completion of the Acquisition. See Note 4, "Acquisition and Investments" for further discussion.

Unless otherwise indicated, information in this report is presented in U.S. dollars ("USD" or "$") and comparisons are to comparable prior periods. Our primary operating currencies, other than USD, include the Canadian Dollar ("CAD"), the British Pound ("GBP"), and our Central European operating currencies such as the Euro ("EUR"), Czech Koruna ("CZK"), Croatian Kuna ("HRK") and Serbian Dinar ("RSD").

Principles of Consolidation

Our consolidated financial statements include our accounts and our majority-owned and controlled domestic and foreign subsidiaries, as well as certain variable interest entities ("VIEs") for which we are the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions used to determine certain amounts that affect the financial statements are reasonable, based on information available at the time they are made. To the extent there are differences between these estimates and actual results, our consolidated financial statements may be materially affected.

Revenue Recognition

Our net sales represent the sale of beer and other malt beverages (including adjacencies, such as cider and hard soda) net of excise taxes, the vast majority of which are brands that we own and brew ourselves. We import or brew and sell certain non-owned partner brands under licensing and related arrangements. In addition, we contract manufacture for other brewers in some of our markets, and sell beer under export and license arrangements in certain international markets.

Revenue is recognized when the significant risks and rewards of ownership, including the risk of loss, are transferred to the customer or distributor depending upon the method of distribution and shipping terms. The cost of various programs, such as price promotions, rebates and coupon programs are treated as a reduction of sales. In certain of our markets, slotting or listing fees are paid to customers and are also treated as a reduction of sales. Sales of products are for cash or otherwise agreed upon credit terms. Sales are stated net of incentives, discounts and returns. Freight costs billed to customers for shipping and handling are recorded as revenues. Shipping and handling expenses related to costs incurred to deliver product are recognized within cost of goods sold.

We do not have standard terms that permit return of product; however, in certain markets where returns occur we estimate the amount of returns based on historical return experience and adjust our revenue accordingly. Products that do not meet our high quality standards are returned by the customer or recalled and destroyed and are recorded as a reduction of revenue. The reversal of revenue is recorded upon determination that the product will be recalled and destroyed. We estimate the costs required to facilitate product returns and record them in cost of goods sold as required.

In addition to supplying our own brands, the U.K. business (within our Europe segment) sells other beverage companies' products to on-premise customers to provide them with a full range of products for their retail outlets. We refer to this as the "factored brand business." Sales from this business are included in our net sales and cost of goods sold when ultimately sold. In the factored brand business, we normally purchase inventory, which includes excise taxes charged by the vendor, take orders from customers for such brands, and invoice customers for the product and related costs of delivery. In accordance with guidance pertaining to reporting revenue gross as a principal versus net as an agent, sales under the factored brand business are reported on a gross basis.

Payments made to customers are conditional on the achievement of volume targets, marketing commitments, or both. If paid in advance, we record such payments as prepayments and amortize them in the consolidated statements of operations over the relevant period to which the customer commitment is made (up to five years). Where there is no sufficiently separate identifiable benefit, and the payment is linked to volumes, or fair value cannot be established, the amortization of the prepayment or the cost as incurred is included in sales discounts as a reduction to sales and where there are specific marketing activities/commitments, the cost is included as marketing, general and administrative expenses. The amounts capitalized are reassessed regularly for recoverability over the contract period and are impaired where there is objective evidence that the benefits will not be realized or the asset is otherwise not recoverable.

In the U.K., loans are extended to a portion of the retail outlets that sell our brands. We reclassify a portion of beer revenue to interest income to reflect a market rate of interest on these loans. In fiscal years 2016, 2015 and 2014, these amounts were $3.6 million, $3.9 million, and $4.4 million, respectively, included in the Europe segment.

Excise Taxes

Excise taxes remitted to tax authorities are government-imposed excise taxes on beer shipments. Excise taxes on beer shipments are shown in a separate line item in the consolidated statements of operations as a reduction of sales. Excise taxes are recognized as a liability, with the liability subsequently reduced when the taxes are remitted to the tax authority.

Cost of Goods Sold

Our cost of goods sold includes costs we incur to make and ship beer. These costs include brewing materials, such as barley, hops and various grains. Packaging materials, such as glass bottles, aluminum cans, cardboard and paperboard are also included in our cost of goods sold. Additionally, our cost of goods sold include both direct and indirect labor, shipping and handling including freight costs, utilities, maintenance costs, warehousing costs, purchasing and receiving costs, depreciation, promotional packaging, other manufacturing overheads and costs to purchase factored brands from suppliers, as well as the estimated cost to facilitate product returns.

Marketing, General and Administrative Expenses

Our marketing, general and administrative expenses include media advertising (television, radio, digital, print), tactical advertising (signs, banners, point-of-sale materials) and promotion costs on both local and national levels within our operating segments. The creative portion of our advertising activities is expensed as incurred. Production costs of advertising and promotional materials are expensed when the advertising is first run. Marketing, general and administrative expenses also include acquisition and integration costs of $108.4 million and $6.9 million for 2016 and 2015, respectively, associated with the Acquisition.

This classification includes general and administrative costs for functions such as finance, legal, human resources and information technology, along with acquisition and integration costs as noted above, which consist primarily of labor and outside services, as well as bad debt expense related to our allowance for doubtful accounts. Unless capitalization is allowed or required by U.S. GAAP, legal costs are expensed when incurred. These costs also include our marketing and sales organizations, including labor and other overheads. This line item additionally includes amortization costs associated with intangible assets, as well as certain depreciation costs related to non-production equipment and share-based compensation.

Share-based compensation is recognized using a straight-line method over the vesting period of the awards. We include estimated forfeitures expected to occur when calculating share-based compensation expense. Our share-based compensation plan and the awards within it contain provisions that accelerate vesting of awards upon change in control, retirement, disability or death of eligible employees and directors. Our share-based awards are considered vested when the employee's retention of

the award is no longer contingent on providing service, which for certain awards can result in immediate recognition for awards granted to retirement-eligible individuals or accelerated recognition for awards granted to individuals that will become retirement eligible within the stated vesting period. Also, if less than the stated vesting period, we recognize these costs over the period from the grant date to the date retirement eligibility is achieved.

Special Items

Our special items represent charges incurred or benefits realized 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; specifically, such items are considered to be one of the following:

• infrequent or unusual items,

• impairment or asset abandonment-related losses,

• restructuring charges and other atypical employee-related costs, or

• fees on termination of significant operating agreements and gains (losses) on disposal of investments.

The items classified as special items are not necessarily non-recurring, however, they are deemed to be incremental to income earned or costs incurred by the company in conducting normal operations, and therefore are presented separately from other components of operating income.

Equity Income in MillerCoors

On October 11, 2016, following the close of the Acquisition, MillerCoors became a wholly-owned subsidiary of MCBC and as a result, MCBC now owns 100% of the outstanding equity and voting interests of MillerCoors. Prior to October 11, 2016, MCBC's equity income in MillerCoors represented our proportionate share for the period of the net income of our investment in MillerCoors accounted for under the equity method. This amount reflected adjustments to eliminate intercompany gains and losses, and to amortize, if appropriate, any difference between cost and underlying equity in net assets upon the formation of MillerCoors.

Interest Expense, net

Our interest costs are associated with borrowings to finance our operations. In addition to interest earned on our cash and cash equivalents across our business, interest income in the Europe segment is associated with trade loans receivable from customers, primarily in the U.K. As noted above, this includes a portion of beer revenue which is reclassified to interest income to reflect a market rate of interest on these loans. Changes in estimates (if any) to mandatorily redeemable noncontrolling interest liabilities, which are presented within other non-current liabilities on the consolidated balance sheet, are also recognized within interest expense.

We capitalize interest cost as a part of the original cost of acquiring certain fixed assets if the cost of the capital expenditure and the expected time to complete the project are considered significant.

Other Income (Expense)

Our other income (expense) classification primarily includes gains and losses associated with activities not directly related to brewing and selling beer. For instance, aggregate unrealized and realized foreign exchange gains and losses resulting from remeasurement and settlement of foreign-denominated monetary assets and liabilities, as well as certain gains or losses on sales of non-operating assets are classified in this line item. These gains and losses are reported in the operating segment in which they occur; however, foreign exchange gains and losses on intercompany balances are reported within the Corporate segment. The initial recording of foreign-denominated transactions are classified based on the nature of the transaction, with the unrealized or realized foreign exchange gains or losses resulting from the subsequent remeasurement of the monetary asset or liability, and its ultimate settlement, classified in other income (expense). Other income (expense) also includes costs incurred on the bridge loan associated with the Acquisition.

Income Taxes

Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of our assets, liabilities, and certain unrecognized gains and losses recorded in accumulated other comprehensive income (loss). We apply the intraperiod tax allocation rules to allocate our provision for income taxes between continuing operations and other categories of earnings, such as discontinued operations and other comprehensive income (loss) when we meet the criteria prescribed by the guidance. We provide for taxes that may be payable if undistributed earnings of overseas subsidiaries were to be remitted to the U.S., except for those earnings that we consider to be permanently reinvested. The tax benefit from an uncertain tax position is recognized only if it is more likely than not that the tax position will be sustained based on its technical merits. We measure and record the tax benefits from such a position based on the largest benefit that has a greater than 50%

likelihood of being realized upon ultimate settlement. Interest, penalties and offsetting positions related to unrecognized tax benefits are recognized as a component of income tax expense. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) ("OCI") represents income and losses for the reporting period, including the related tax impacts, which are excluded from net income (loss) and recognized directly within accumulated other comprehensive income (loss) ("AOCI") as a component of equity. OCI also includes amounts reclassified to income during the reporting period that were previously recognized within AOCI. Amounts remaining within AOCI are expected to be reclassified out of AOCI in the future, at which point they will be recognized within the consolidated statement of operations as a component of net income (loss). We recognize OCI related to the translation of assets and liabilities of our foreign subsidiaries which are denominated in currencies other than USD, unrealized gains and losses on the effective portion of our derivatives designated in cash flow and net investment hedging relationships, actuarial gains and losses and prior service costs related to our pension and other post-retirement benefit plans, as well as our proportionate share of our equity method investments' OCI. Additionally, we do not have the expectation or intent to cash settle certain of our intercompany note receivable and note payable positions in the foreseeable future; therefore, the remeasurement of these obligations is recorded as a component of foreign currency translation adjustments within OCI.

Cash and Cash Equivalents

Cash consists of cash on hand and bank deposits. Cash equivalents represent highly liquid investments with original maturities of three months or less. Our cash deposits may be redeemed upon demand and are maintained with multiple, reputable financial institutions.

Supplementary cash flow includes non-cash issuances of share-based awards. We also have non-cash investing activities related to movements in our guarantee of indebtedness of certain equity method investments, as well as $15.1 million related to the receipt of a note upon the sale of our U.K. malting facility in 2015. In addition, total Acquisition consideration also includes non-cash investing activity related to the issuance of replacement share-based compensation awards, as well as the elimination of a net payable owed by MCBC to MillerCoors. See Note 13, "Share-Based Payments", Note 4, "Acquisition and Investments" and Note 11, "Goodwill and Intangible Assets" for further discussion. There was no other non-cash activity in 2016, 2015 and 2014.

Accounts Receivable and Notes Receivable

We record accounts and notes receivable at net realizable value. This carrying value includes an appropriate allowance for estimated uncollectible amounts to reflect any loss anticipated on the accounts and notes receivable balances. We calculate this allowance based on our country-specific history of write-offs, level of past-due accounts based on the contractual terms of the receivables and our relationships with and the economic status of our customers, which may be impacted by current macroeconomic and regulatory factors specific to the country of origin.

In the U.K., loans are extended to a portion of the retail outlets that sell our brands. At December 31, 2016, and December 31, 2015, total loans outstanding, net of allowances, were $21.9 million and $25.7 million, respectively, and are classified as either current or non-current notes receivable in our consolidated balance sheets. An allowance for credit losses is maintained to provide for loan losses deemed to be probable related to specifically identified loans and for losses in the loan portfolio that have been incurred at the balance sheet date. We establish our allowance through a provision for loan losses charged against earnings and recorded in marketing, general and administrative expenses. Loan balances that are written off are recorded against the allowance as a write-off. Activity within the allowance is immaterial for fiscal years 2016, 2015 and 2014.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out ("FIFO") method. We regularly assess the shelf-life of our inventories and reserve for those inventories when it becomes apparent the product will not be sold within our freshness specifications. The allowance for obsolete inventories was $3.3 million and $3.4 million at December 31, 2016 and December 31, 2015, respectively.

Other current assets

Other current assets include prepaid assets, maintenance and operating supplies, promotion materials and derivative assets that are expected to be recognized or realized within the next 12 months. Maintenance and operating supplies include our inventories of spare parts, which are kept on hand for repairs and maintenance of machinery and equipment. The majority of spare parts within our business include motors, fillers and other components that are required to maintain a normal level of production in the event that expected maintenance and/or repairs are required. These parts are inventoried within current assets as they are reasonably expected to be used during the normal operating cycle of the business and are reserved for excess and obsolescence, as appropriate. The allowance for obsolete supplies was $5.5 million and $5.1 million at December 31, 2016, and December 31, 2015, respectively.

Properties

Properties are stated at original cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets, which are reviewed periodically and have the following ranges: buildings and improvements: 20-40 years; machinery and equipment: 3-25 years; furniture and fixtures: 3-10 years; returnable containers: 2-15 years; and software: 3-5 years. Land is not depreciated, and construction in progress is not depreciated until ready for service. Costs of enhancements or modifications that substantially extend the capacity or useful life of an asset are capitalized and depreciated accordingly. Ordinary repairs and maintenance are expensed as incurred. When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from our consolidated balance sheets and the resulting gain or loss, if any, is reflected in our consolidated statements of operations. Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset (or asset group) may not be recoverable.

Returnable containers are recorded at acquisition cost and consist of returnable bottles, kegs, pallets and crates that are both in our direct control within our breweries, warehouses and distribution facilities and those that we indirectly control in the market through our agreements with our customers and other brewers and for which a deposit is received. The deposits received on our returnable containers in the market are recorded as deposit liabilities, included as current liabilities within accounts payable and other current liabilities in the consolidated balance sheets. We estimate that the loss, breakage and deterioration of our returnable containers is comparable to the depreciation calculated on an estimated useful life of up to 5 years for pallets, 4 years for bottles, 7 years for crates, and 15 years for returnable kegs. We also own and maintain other equipment in the market related to delivery of our products to end consumers, for example on-premise dispense equipment and refrigeration units. This equipment is recorded at acquisition cost and depreciated over lives of up to 7 years, depending on the market, reflecting the use of the equipment, as well as the loss and deterioration of the asset.

The costs of acquiring or developing internal-use computer software, including directly-related payroll costs for internal resources, are capitalized and classified within properties. Software maintenance and training costs are expensed in the period incurred.

Properties held under capital lease are depreciated using the straight-line method over the estimated useful life or the lease term, whichever is shorter, and the related depreciation is included in depreciation expense.

Goodwill and Other Intangible Assets

Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. A reporting unit is an operating segment, or a business unit one level below that operating segment, for which discrete financial information is prepared and regularly reviewed by segment management. As of the date of our annual impairment test, performed as of October 1, the operations in each of the specific regions within our Canada, Europe and MCI segments are considered components based on the availability of discrete financial information and the regular review by segment management. We have concluded that the components within the Canada and Europe segments each meet the criteria as having similar economic characteristics and therefore have aggregated these components into the Canada and Europe reporting units, respectively. Additionally, we determined that the components within our MCI segment do not meet the criteria for aggregation with the exception of the operations of our India businesses, which constitute a separate reporting unit. As required, we evaluate the carrying value of our goodwill and indefinite-lived intangible assets for impairment at the reporting unit level at least annually or when an interim triggering event occurs that would indicate that impairment may have taken place. Our annual test is performed as of the first day of our fiscal fourth quarter. We continuously monitor the performance of our other definite-lived intangible assets and evaluate for impairment when evidence exists that certain events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Significant judgments and assumptions are required in such impairment evaluations. Definite-lived intangible assets are stated at cost less accumulated amortization. Amortization is recorded using the straight-line method over the estimated lives of the assets as this approximates the pattern in which the assets economic benefits are consumed.

Equity Method Investments

We apply the equity method of accounting to 20% to 50% owned investments where we exercise significant influence or VIEs for which we are not the primary beneficiary. We use the cumulative earnings approach for determining cash flow presentation of cash distributions received from equity method investees. Distributions received are included in our consolidated statements of cash flows as operating activities, unless the cumulative distributions exceed our portion of the cumulative equity in the net earnings of the equity method investment, in which case the excess distributions are deemed to be returns of the investment and are classified as investing activities in our consolidated statements of cash flows. Equity method investments at December 31, 2016, include Brewers' Retail, Inc. ("BRI") and Brewers' Distributor Ltd. ("BDL") in Canada. Prior to the completion of the Acquisition on October 11, 2016, equity method investments included our equity ownership in MillerCoors in the U.S.

There are no related parties that own interests in our equity method investments as of December 31, 2016.

Derivative Hedging Instruments

We use derivatives as part of our normal business operations to manage our exposure to fluctuations in interest, foreign currency exchange, commodity, production and packaging material costs and for other strategic purposes related to our core business. We enter into derivatives for risk management purposes only, including derivatives designated in hedge accounting relationships as well as those derivatives utilized as economic hedges. We do not enter into derivatives for trading or speculative purposes. We recognize our derivatives on the consolidated balance sheets as assets or liabilities at fair value and are classified in either current or non-current assets or liabilities based on each contract's respective unrealized gain or loss position and each contract's respective maturity. Our policy is to present all derivative balances on a gross basis, without regard to counterparty master netting agreements or similar arrangements. Further, our current derivative agreements do not allow us to net positions with the same counterparty and therefore, we present our derivative positions gross in our consolidated balance sheets.

Changes in fair values (to the extent of hedge effectiveness) of outstanding cash flow and net investment hedges are recorded in OCI, until earnings are affected by the variability of cash flows of the underlying hedged item or the sale of the underlying net investment, respectively. Effective cash flow hedges offset the gains or losses recognized on the underlying exposure in the consolidated statements of operations, or for net investment hedges, the foreign exchange translation gain or loss recognized in AOCI. Changes in fair value of outstanding fair value hedges and the offsetting changes in fair value of the hedged item are recognized in earnings. Any ineffectiveness is recorded directly into earnings.

We record realized gains and losses from derivative instruments in the same financial statement line item as the hedged item/forecasted transaction. Changes in unrealized gains and losses for derivatives not designated in a hedge accounting relationship are recorded directly in earnings each period and are also recorded in the same financial statement line item as the hedged item/forecasted transaction. Cash flows from the settlement of derivatives, including both economic hedges and those designated in hedge accounting relationships, appear in the consolidated statements of cash flows in the same categories as the cash flows of the hedged item.

In accordance with authoritative accounting guidance, we do not record the fair value of derivatives for which we have elected the Normal Purchase Normal Sale ("NPNS") exemption. We account for these contracts on an accrual basis, recording realized settlements related to these contracts in the same financial statement line items as the corresponding transaction.

Pension and Postretirement Benefits

We maintain retirement plans for the majority of our employees. We offer different types of plans within each segment, including defined benefit plans, defined contribution plans and other postretirement benefit plans ("OPEB"). Each plan is managed locally and in accordance with respective local laws and regulations. Our equity investments, BRI and BDL, maintain defined benefit, defined contribution and postretirement benefit plans as well.

We recognize the underfunded or overfunded status of a defined benefit postretirement plan as an asset or liability in the consolidated balance sheets and recognize changes in the funded status in the year in which the changes occur within OCI. The funded status of a plan, measured as the difference between the fair value of plan assets and the projected benefit obligation, and the related net periodic pension cost are calculated using a number of significant actuarial assumptions. Changes in net periodic pension cost and funding status may occur in the future due to changes in these assumptions.

Projected benefit obligation is the actuarial present value as of the measurement date of all benefits attributed by the plan benefit formula to employee service rendered before the measurement date using assumptions as to future compensation levels and years of service if the plan benefit formula is based on those future compensation levels and years of service. Accumulated benefit obligation is the actuarial present value of benefits (whether vested or unvested) attributed by the plan benefit formula

to employee service rendered before the measurement date and based on employee service and compensation, if applicable, prior to that date. Accumulated benefit obligation differs from projected benefit obligation in that it includes no assumption about future compensation levels and years of service.

We employ the corridor approach for determining each plan's potential amortization from AOCI of deferred gains and losses, which occur when actual experience differs from estimates, into our net periodic pension and postretirement benefit cost. This approach defines the "corridor" as the greater of 10% of the projected benefit obligation or 10% of the market-related value of plan assets and requires amortization of the excess net gain or loss that exceeds the corridor over the average remaining service periods of active plan participants. For plans closed to new entrants and the future accrual of benefits, the average remaining life expectancy of all plan participants (including retirees) is used.

Fair Value Measurements

The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximate fair value as recorded due to the short-term nature of these instruments. In addition, the carrying amounts of our trade loan receivables, net of allowances, approximate fair value. The fair value of derivatives is estimated by discounting the estimated future cash flows utilizing observable market interest, foreign exchange and commodity rates adjusted for non-performance credit risk associated with our counterparties (assets) or with MCBC (liabilities). See Note 16, "Derivative Instruments and Hedging Activities" for additional information. Based on current market rates for similar instruments, the fair value of long-term debt is presented in Note 12, "Debt".

U.S. GAAP guidance for fair value includes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach). Our financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy.

The three levels of the hierarchy are as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date.

Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are less active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (market corroborated inputs).

Level 3—Unobservable inputs that reflect the assumptions that we believe market participants would use in pricing the asset or liability. We develop these inputs based on the best information available, including our own data.

Foreign Currency

Assets and liabilities recorded in foreign currencies that are the functional currencies for the respective operations are translated at the prevailing exchange rate at the balance sheet date. Translation adjustments resulting from this process are reported as a separate component of OCI. Gains and losses from foreign currency transactions are included in earnings for the period. Revenue and expenses are translated at the average exchange rates during the period.

2. New Accounting Pronouncements

Adoption of New Accounting Pronouncements

Share-based Payments

In March 2016, the Financial Accounting Standards Board ("FASB") issued authoritative guidance intended to simplify and improve several aspects of the accounting for share-based payment transactions. The guidance includes amendments that require excess tax benefits or deficiencies resulting from share-based payments be recognized in the income statement as a component of the provision for income taxes, whereas previously these were recognized within additional paid-in-capital. Further, the new guidance provides an accounting policy election to account for forfeitures as they occur. The new standard also amends the presentation of employee share-based payment-related items in the statement of cash flows by requiring that: (i) excess tax benefits be classified as cash inflows provided by operating activities (MCBC previously included within cash flows from financing activities), and (ii) cash paid to taxing authorities arising from the withholding of shares from employees be classified as cash outflows used in financing activities (MCBC previously included within cash flows from operating activities). We early adopted this guidance during the quarter ended September 30, 2016. The adoption of this guidance resulted in a reduction to our income tax expense of $8.8 million for the year ended December 31, 2016, as a result of excess tax

benefits generated during 2016 being recognized as a component of the provision for income taxes as opposed to additional paid-in-capital. The amendments also impacted our calculation of diluted earnings per share under the treasury stock method, as excess tax benefits and deficiencies resulting from share-based payments are no longer included in the assumed proceeds calculation. These provisions of the new guidance have been adopted on a prospective basis as of January 1, 2016, which is the beginning of the annual period that includes the interim period of adoption. As permitted by this standard, the Company has elected to continue to estimate forfeitures expected to occur when calculating share-based compensation expense. The cash flow impacts of the adoption of this guidance were applied on a retrospective basis to all periods presented. These impacts resulted in an increase to net cash provided by operating activities, and a corresponding decrease to net cash provided by financing activities of $26.2 million for the year ended December 31, 2016. The adoption of this guidance impacted our previously reported annual results for fiscal years 2015 and 2014 as follows:

	Year Ended December 31, 2015								Year Ended December 31, 2014
	As Reported				As Adjusted				As Reported				As Adjusted
	(In millions)
Consolidated Statements of Cash Flows:
Net cash provided by (used in) operating activities	$	696.4			$	715.9			$	1,272.6			$	1,287.9
Net cash provided by (used in) financing activities	$	(512.0	)		$	(531.5	)		$	(802.0	)		$	(817.3	)

See Note 20, "Quarterly Financial Information (Unaudited)" for the impacts of the adoption of this guidance on our previously reported quarterly results for fiscal years 2016 and 2015.

Cash Flow Presentation

In August 2016, the FASB issued authoritative guidance intended to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows. The amendment addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. We have early adopted this guidance effective for our year ended December 31, 2016. The adoption of this guidance did not result in any adjustments to our current or previously filed consolidated statements of cash flows.

New Accounting Pronouncements Not Yet Adopted

Goodwill Impairment

In January 2017, the FASB issued authoritative guidance intended to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the new guidance, the recognition of an impairment charge is calculated based on the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The guidance should be applied on a prospective basis, and is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the potential impact on our financial position and results of operations upon adoption of this guidance.

Leases

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

Inventory Measurement

In July 2015, the FASB issued authoritative guidance intended to simplify the measurement of inventory. The amendment requires entities to measure in-scope inventory at the lower of cost and net realizable value, and replaces the current

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

Revenue Recognition

In May 2014, the FASB issued authoritative guidance related to new accounting requirements for the recognition of revenue from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for the goods or services. The guidance also includes enhanced disclosure requirements which are intended to help financial statement users better understand the nature, amount, timing and uncertainty of revenue being recognized. Subsequent to the release of this guidance, the FASB has issued additional updates intended to provide interpretive clarifications and to reduce the cost and complexity of applying the new revenue recognition standard both at transition and on an ongoing basis. The new standard and related amendments are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted for annual reporting periods beginning after December 15, 2016, including interim periods within that annual reporting period. Upon adoption of the new standard, the use of either a full retrospective or cumulative effect transition method is permitted. We are currently in the process of evaluating the potential impact this new guidance will have on our financial statements and do not anticipate early adoption. We have not completed this evaluation and therefore, cannot conclude whether the guidance will have a significant impact on our financial statements at this time. However, based on preliminary work completed, we are considering the implications that the new standard may have on our contract brewing arrangements, presentation of certain customer related trade spend, as well as the timing of recognition of certain promotional discounts, which are areas that could potentially be impacted by the adoption of the new guidance. We currently anticipate that we will utilize the cumulative effect transition method, however, this expectation may change following the completion of our evaluation of the impact of this guidance on our financial statements.

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

3. Segment Reporting

Our reporting segments are based on the key geographic regions in which we operate, which are the basis on which our chief operating decision maker evaluates the performance of the business.

Reporting Segments

United States

The U.S. segment consists of our production, marketing and sale of our brands in the U.S. and Puerto Rico, including core brands Coors Light and Miller Lite, as well as Blue Moon, Coors Banquet, Keystone Light, Leinenkugel's, Miller Genuine Draft and Miller High Life and other owned and licensed brands in the U.S. The U.S. segment also has an agreement to brew, package and ship products for Pabst Brewing Company through June 2020. Prior to the completion of the Acquisition on October 11, 2016, MillerCoors was a limited liability company that we jointly owned with SABMiller and which operated in the U.S. and Puerto Rico. See Note 4, "Acquisition and Investments" for further discussion. Effective January 1, 2017, the results of the MillerCoors Puerto Rico business, which were previously included as part of the U.S. segment, will be reported within the MCI segment.

Canada

The Canada segment consists of our production, marketing and sales of our brands, including core brands Coors Light and the Molson brand family, as well as Carling, Coors Banquet, Rickard's and other owned and licensed brands in Canada. The Canada segment also includes BRI, our joint venture arrangement related to the distribution and retail sale of beer in Ontario, and BDL, our joint venture arrangement related to the distribution of beer in the western provinces. Both BRI and BDL are accounted for as equity method investments.

We have an agreement with Heineken N.V. ("Heineken") that grants us the right to import, market, distribute and sell Heineken products. Additionally, we had an agreement with SABMiller that granted us the right to brew or import, market, distribute and sell certain Miller brands in Canada which was terminated effective March 2015 and as a result, beginning in the second quarter of 2015, we discontinued distributing these Miller brands in Canada; however, as a result of the Acquisition,

beginning October 11, 2016, these Miller brands returned to our Canada business. We also contract brew and package certain, Labatt and Asahi brands for the U.S. market.

Europe

The Europe segment consists of our production, marketing and sales of our brands, including major core brands Carling and Staropramen, as well as Apatinsko, Astika, Bergenbier, Blue Moon, Borsodi, Branik, Coors Light, Jelen, Kamenitza, Miller Genuine Draft, Niksicko, Noroc, Ostravar, Ozujsko, Sharp's Doom Bar and Worthington's, as well as a number of smaller regional ale brands in the U.K., Republic of Ireland and Central Europe. As a result of the Acquisition, a portion of the operating results of the international Miller brand portfolio will be reported in our Europe segment. Our European business also has licensing agreements and distribution agreements with various other brewers. In the U.K., we also sell the Cobra brands through the Cobra Beer Partnership Ltd. joint venture and the Grolsch brands through a joint venture with Royal Grolsch N.V., and are the exclusive distributor for several brands including Singha. Additionally, in order to be able to provide a full line of beer and other beverages to our U.K. on-premise customers, we sell "factored" brands, which are third-party beverage brands for which we provide distribution to retail, typically on a non-exclusive basis. During the second half of 2016, we entered into a long-term partnership agreement with Dutch brewer Bavaria. The agreement gives us the exclusive on-premise and off-premise rights to the sales, distribution and customer marketing of Bavaria and its portfolio of brands in the U.K. In June 2015, we terminated our agreement with Carlsberg whereby it held the exclusive distribution rights for the Staropramen brand in the U.K and we paid Carlsberg an early termination payment of GBP 19.0 million ($29.4 million at payment date). When the transition period concluded on December 27, 2015, we obtained the exclusive distribution rights of the Staropramen brand in the U.K. Separately, in December 2013, we entered into an agreement with Heineken to early terminate our contract brewing and kegging agreement with Heineken 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. The full amount of the termination payment ($19.4 million upon recognition) was included as income within special items during the year ended December 31, 2015. Additionally, effective January 1, 2017, various European markets including Sweden, Spain, Germany, Ukraine and Russia, which were previously presented within our MCI segment will be included within our Europe segment.

Molson Coors International

The objective of MCI is to grow and expand our business and brand portfolio in new and existing markets, including emerging markets, outside the U.S., Canada, and Europe segments. The focus of MCI includes Latin America (including Mexico, Central America, the Caribbean and South America), Europe (excluding U.K, Ireland and Central Europe, as they are a part of the Europe segment), Asia Pacific and Africa. With the recent acquisition of the Miller brands globally outside of those sales within other segments, MCI has expanded its reach into new attractive markets. Effective January 1, 2017, the results of the MillerCoors Puerto Rico business, which were previously included as part of the U.S. segment, will be reported within the MCI segment, and the results of the MCI Europe business, which are currently included as part of the MCI segment, will be reported within the Molson Coors Europe segment.

Our Latin America business expands the reach of our brands to countries such as Colombia, Mexico and Panama through both exported product from the U.S. along with local partnerships with leading global brewers to market and grow our international brands. Our Asia Pacific business includes India, which consists of both our joint venture with majority share and operational control of Molson Coors Cobra India as well as Molson Coors India Private Ltd. (formally known as Mount Shivalik Breweries Ltd.), along with our businesses in Japan, China and Australia. Our Europe business focuses on expanding the reach of our international brands which are exported from our breweries in the U.S., U.K. and Czech Republic along with local partnerships in markets which typically have a greater barrier to entry, such as Ukraine, Russia and Spain.

The brands we sell include Blue Moon, Carling, Cobra, Coors Light, Corona, Miller Genuine Draft, Miller Lite, Miller High Life, Molson Canadian and Staropramen, as well as brands unique to our international markets including Coors, Coors 1873, Coors Extra, Coors Gold, Iceberg 9000, Thunderbolt and Zima.

Corporate

Corporate includes interest and certain other general and administrative costs that are not allocated to any of the operating segments. The majority of these corporate costs relate to worldwide administrative functions, such as corporate affairs, legal, human resources, information technology, finance, internal audit, insurance and risk management, global growth and commercial initiatives, as well as acquisition, integration and financing costs associated with the Acquisition. Additionally, Corporate includes the results of our water resources and energy operations in Colorado as well as the unrealized changes in fair value on our commodity swaps not designated in hedging relationships, which are later reclassified when realized to the segment in which the underlying exposure resides.

Summarized Financial Information

No single customer accounted for more than 10% of our consolidated sales in 2016, 2015 or 2014. Net sales represent sales to third-party external customers less excise taxes. Inter-segment transactions impacting sales revenues and income (loss) from continuing operations before income taxes eliminate in consolidation.

The following tables represent consolidated net sales, interest expense, interest income and reconciliations of amount shown as income (loss) from continuing operations before income taxes to income (loss) from continuing operations attributable to MCBC:

	Year ended December 31, 2016
	U.S.(1)				Canada				Europe				MCI				Corporate				Eliminations				Consolidated
	(In millions)
Net sales	$	1,566.6			$	1,425.7			$	1,760.2			$	163.6			$	1.0			$	(32.1	)		$	4,885.0
Interest expense	—				—				—				—				(271.6		)		—				(271.6		)
Interest income	—				—				3.6				—				23.6				—				27.2
Income (loss) from continuing operations before income taxes	$	3,570.4			$	(135.5	)		$	138.0			$	(39.7	)		$	(497.9	)		$	—			$	3,035.3
Income tax benefit (expense)																									(1,050.7		)
Net income (loss) from continuing operations																									1,984.6
Net (income) loss attributable to noncontrolling interests																									(5.9		)
Net income (loss) from continuing operations attributable to MCBC																									$	1,978.7

(1)

Prior to October 11, 2016, MCBC’s 42% share of MillerCoors' results of operations were reported as equity income in MillerCoors in the consolidated statements of operations. As a result of the completion of the Acquisition, beginning October 11, 2016, MillerCoors' results of operations were fully consolidated into MCBC’s consolidated financial statements and included in the U.S. segment. The above table reflects this treatment accordingly. Also included in net income from continuing operations attributable to MCBC is a net special items gain of approximately $3.0 billion related to the fair value remeasurement of 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. Refer to Note 4, "Acquisition and Investments" for further discussion.

Eliminations reflect inter-segment sales from the Europe segment to the MCI segment as well as inter-segment sales between the U.S. segment and the Canada segment and the U.S. segment and the MCI segment. Income (loss) from continuing operations before income taxes includes the impact of special items. Refer to Note 7, "Special Items" for further discussion.

	Year ended December 31, 2015
	U.S.				Canada				Europe				MCI				Corporate				Eliminations				Consolidated
	(In millions)
Net sales	$	—			$	1,511.5			$	1,914.9			$	144.5			$	1.0			$	(4.4	)		$	3,567.5
Interest expense	—				—				—				—				(120.3		)		—				(120.3		)
Interest income	—				—				3.9				—				4.4				—				8.3
Income (loss) from continuing operations before income taxes	$	516.3			$	277.3			$	(109.7	)		$	(24.8	)		$	(248.4	)		$	—			$	410.7
Income tax benefit (expense)																									(51.8		)
Net income (loss) from continuing operations																									358.9
Net (income) loss attributable to noncontrolling interests																									(3.3		)
Net income (loss) from continuing operations attributable to MCBC																									$	355.6

Eliminations reflect inter-segment sales from the Europe segment to the MCI segment. Income (loss) from continuing operations before income taxes includes the impact of special items. Refer to Note 7, "Special Items" for further discussion.

	Year ended December 31, 2014
	U.S.				Canada				Europe				MCI				Corporate				Eliminations			Consolidated
	(In millions)
Net sales	$	—			$	1,793.9			$	2,200.3			$	156.3			$	1.1			(5.3	)		$	4,146.3
Interest expense	—				—				—				—				(145.0		)		—			(145.0		)
Interest income	—				—				4.4				—				6.9				—			11.3
Income (loss) from continuing operations before income taxes	$	561.8			$	406.8			$	(111.9	)		$	(13.3	)		$	(257.1	)		—			$	586.3
Income tax benefit (expense)																								(69.0		)
Net income (loss) from continuing operations																								517.3
Net (income) loss attributable to noncontrolling interests																								(3.8		)
Net income (loss) from continuing operations attributable to MCBC																								$	513.5

Eliminations reflect inter-segment sales from the Europe segment to the MCI segment. Income (loss) from continuing operations before income taxes includes the impact of special items. Refer to Note 7, "Special Items" for further discussion.

The following table presents total assets by segment:

	As of
	December 31, 2016				December 31, 2015
	(In millions)
U.S.(1)	$	19,844.7			$	2,441.0
Canada	4,206.8				4,560.6
Europe	4,673.7				4,807.5
MCI	255.6				133.7
Corporate	360.7				333.5
Consolidated total assets	$	29,341.5			$	12,276.3

(1)	Prior to October 11, 2016, MCBC's 42% share of MillerCoors' net assets were reported as Investment in MillerCoors in the consolidated balance sheets. As a result of the completion of the Acquisition, beginning October 11, 2016, MillerCoors' balance sheet has been fully consolidated into MCBC's consolidated financial statements.

The following table presents select cash flow information by segment:

	For the years ended
	December 31, 2016				December 31, 2015				December 31, 2014
					(In millions)
Depreciation and amortization(1):
U.S.(2)	$	105.7			$	—			$	—
Canada	98.4				117.3				117.6
Europe	175.7				186.5				184.1
MCI	5.1				3.9				2.7
Corporate	3.5				6.7				8.6
Consolidated depreciation and amortization	$	388.4			$	314.4			$	313.0
Capital expenditures:
U.S.(2)	$	105.4			$	—			$	—
Canada	72.2				77.3				77.8
Europe	144.4				173.7				168.6
MCI	4.9				10.0				0.9
Corporate	14.9				14.0				12.2
Consolidated capital expenditures	$	341.8			$	275.0			$	259.5

(1)	Depreciation and amortization amounts do not reflect amortization of bond discounts, fees or other debt-related items.

(2)	Represents MillerCoors' activity for the post-Acquisition period of October 11, 2016, through December 31, 2016.

The following table presents net sales by geography, based on the location of the customer:

	For the years ended
	December 31, 2016				December 31, 2015				December 31, 2014
	(In millions)
Net sales to unaffiliated customers:
Canada	$	1,344.4			$	1,421.1			$	1,699.9
United States and its territories(1)	1,622.4				94.1				98.1
United Kingdom	1,071.4				1,224.6				1,391.5
Other foreign countries(2)	846.8				827.7				956.8
Consolidated net sales	$	4,885.0			$	3,567.5			$	4,146.3

(1)

Prior to October 11, 2016, MCBC’s 42% share of MillerCoors' results of operations was reported as equity income in MillerCoors in the consolidated statements of operations. As a result of the completion of the Acquisition, beginning October 11, 2016, MillerCoors' results of operations were fully consolidated into MCBC’s consolidated financial statements and included in the U.S. segment. Net sales from the period October 11, 2016, through December 31, 2016, reflect the consolidation of MillerCoors in the U.S. segment.

(2)	Reflects net sales from the individual countries within our Central European operations (included in our Europe segment), as well as our MCI segment, for which no individual country has total net sales exceeding 10% of the total consolidated net sales.

The following table presents net properties by geographic location:

	As of
	December 31, 2016				December 31, 2015
	(In millions)
Net properties:
United States and its territories(1)	$	3,065.4			$	28.4
Canada	583.1				598.1
United Kingdom	348.1				422.5
Other foreign countries(2)	510.8				541.8
Consolidated net properties	$	4,507.4			$	1,590.8

(1)	As a result of the completion of the Acquisition, beginning October 11, 2016, MillerCoors was consolidated into MCBC's consolidated financial statements.

(2)	Reflects net properties within the individual countries included in our Central European operations (included in our Europe segment), as well as our MCI segment, for which no individual country has total net properties exceeding 10% of the total consolidated net properties.

4. Acquisition and Investments

Acquisition

On November 11, 2015, ABI announced it had entered into a definitive agreement to acquire SABMiller and concurrently, on November 11, 2015, we entered into the Purchase Agreement with ABI to acquire, contingent upon the closing of the ABI/SABMiller transaction, all of SABMiller’s 58% economic interest and 50% voting interest in MillerCoors and all trademarks, contracts and other assets primarily related to the Miller brand portfolio outside of the U.S. and Puerto Rico for $12.0 billion in cash, subject to a downward adjustment as described in the Purchase Agreement. On October 11, 2016, following the satisfaction of all pre-closing conditions including ABI and SABMiller shareholder approval, the $12.0 billion of cash consideration was transferred and the Acquisition was completed. The Acquisition was funded through cash on hand, including proceeds received from our February 3, 2016, equity issuance, our 2016 Notes, as defined in Note 12, "Debt", issuance on July 7, 2016, as well as borrowings on our term loan, which occurred concurrent with the close of the Acquisition.

Prior to the Acquisition, MCBC owned a 50% voting and 42% economic interest in MillerCoors, and MillerCoors was accounted for under the equity method of accounting. Following the completion of the Acquisition, MillerCoors, which was previously a joint venture between MCBC and SABMiller, became a wholly-owned subsidiary of MCBC and its results were fully consolidated by MCBC prospectively beginning on October 11, 2016. Headquartered in Chicago, Illinois, MillerCoors brews, markets and sells the MillerCoors portfolio of brands in the United States and Puerto Rico. Its major brands include Coors Light, Miller Lite, Blue Moon, Coors Banquet, Keystone Light, Leinenkugel's, Miller Genuine Draft and Miller High Life. In addition, MillerCoors brews for third parties under contract brewing arrangements and operates one company-owned distributor. As a result of the Acquisition, we will strengthen our presence in the highly attractive U.S. beer market, further improve our global scale and agility, and benefit from significantly enhanced cash flows from operations, as well as expect to capture substantial operational synergies. Furthermore, we expect the acquisition of the Miller brand rights globally to help accelerate MCBC’s growth strategy by strengthening our international beer portfolio with another powerful and authentic American brand, as well as expand our presence in high-growth markets. The operating results of MillerCoors are reported in our U.S. segment and the operating results of the international Miller brand portfolio are reported in our Canada segment, Europe segment and MCI segment. Additionally, effective January 1, 2017, the results of the MillerCoors Puerto Rico business, which were previously included as part of the U.S. segment, will be reported within the MCI segment. See Note 3, "Segment Reporting" for more information on our reporting segments.

At this time, MCBC is not able to estimate the historical results of operations related to the Miller global brand portfolio based on the limited information available to MCBC. We have a downward purchase price adjustment as described in the Purchase Agreement, if the unaudited U.S. GAAP earnings before interest, tax, depreciation and amortization (EBITDA) for the international Miller brand portfolio for the twelve months prior to closing is below $70 million. The process by which the amount of the downward purchase price adjustment, if any, is determined is described in the Purchase Agreement.

We have elected to treat the Acquisition as an asset acquisition for U.S. tax purposes and accordingly currently expect to receive substantial tax benefits for the first 15 years following the close of the Acquisition. The assets and liabilities acquired in

connection with the Acquisition related to the remaining 58% ownership were stepped up to fair value for tax purposes and thus the carrying value of these assets and liabilities related to the purchase price for the 58% interest primarily equals the tax basis as of the acquisition date. Additionally, as a result of the Acquisition, specifically MCBC obtaining 100% ownership, MillerCoors was required to change to a calendar year end for U.S. federal and state income tax purposes, which has accelerated taxable income to MCBC that was previously deferred. We began making cash tax prepayments during 2016 in anticipation of this accelerated taxable income prior to close of the Acquisition.

The total cash paid to ABI in October 2016 to complete the Acquisition, net of cash acquired of $39.0 million, is presented as a cash outflow within investing activities during 2016. Additionally, cash flows provided by operating activities during 2016 include outflows of $90.3 million primarily related to transaction and other acquisition costs.

See Note 9, "Earnings Per Share" for details related to our February 3, 2016, equity offering completed in relation to the Acquisition and Note 12, "Debt" and Note 16, "Derivative Instruments and Hedging Activities" for details related to the financing and hedging strategies completed in relation to the Acquisition.

Our consolidated statement of operations include net sales and income from continuing operations before taxes of approximately $1.6 billion and $3.1 billion, respectively, attributable to MillerCoors since the Acquisition date. The income includes the net gain of approximately $3.0 billion related to the Acquisition as discussed below.

Unaudited Pro Forma Financial Information

Prior to October 11, 2016, MCBC’s 42% share of MillerCoors' results of operations were reported as equity income in MillerCoors in the consolidated statements of operations. As a result of the completion of the Acquisition, beginning October 11, 2016, MillerCoors' results of operations were fully consolidated into MCBC’s consolidated financial statements and included in the U.S. segment.

The following unaudited pro forma information does not reflect the impact of the acquisition of the Miller global brand portfolio as we are not able to estimate the historical results of operations from this business and have concluded, based on the limited information available to MCBC, that it is insignificant to the overall Acquisition. The preliminary purchase price allocation reflects estimated value allocated to the Miller global brand portfolio reported within identifiable intangible assets subject to amortization. Based on the limited information regarding such brands received to date, this estimated value allocated to these brands remains subject to change as additional information, reflective of the performance of the brands as of the Acquisition date, becomes available.

Additionally, the following unaudited pro forma information gives effect to the Acquisition and the completed financing as if they were completed on January 1, 2015, the first day of our 2015 fiscal year and the pro forma adjustments are based on items that are factually supportable, are directly attributable to the Acquisition, and are expected to have a continuing impact on MCBC's results of operations. The unaudited pro forma information has been calculated after applying MCBC’s accounting policies and adjusting the results of MillerCoors to reflect the additional depreciation and amortization that would have been charged assuming the preliminary fair value adjustments to property, plant and equipment, and intangible assets had been applied from January 1, 2015, together with the consequential tax effects. Pro forma adjustments have been made to remove non-recurring transaction-related costs included in historical results as well as to reflect the incremental interest expense to be prospectively incurred on the 2016 Notes and term loans, as defined in Note 12, "Debt", issued to finance the Acquisition, in addition to other pro forma adjustments. See below table for significant non-recurring costs. Also, see Note 5, "Other Income and Expense" and Note 12, "Debt" for details related to financing-related expenses incurred.

The unaudited pro forma information below does not reflect the realization of any expected ongoing synergies relating to the integration of the two companies. Further, the pro forma 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.

	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	$	277.5			$	542.6
Net income attributable to MCBC	$	274.7			$	546.5
Net income from continuing operations attributable to MCBC per share:
Basic	$	1.29			$	2.52
Diluted	$	1.28			$	2.51

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

	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 - realized loss	$	36.4			$	—		Interest expense, net
Interest income earned on money market and fixed rate deposit accounts	$	(19.0	)		$	—		Interest income, net

Fair Value of Consideration Transferred

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 13, "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 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. This valuation is preliminary, and upon completion of the detailed valuation analyses, there could be a material adjustment to the estimated fair value of our historical 42% interest in MillerCoors. Any changes in the estimated fair value of our historical 42% interest will impact the gain ultimately recognized and the associated income tax effects.

As discussed above, our revaluation gain is net of a loss of $458.3 million related to the reclassification of our historical AOCI related to our 42% interest in MillerCoors, thereby removing the historical balance from our balance sheet. The reclassified AOCI loss is related to historical net unrealized losses on derivative positions previously designated by MillerCoors as cash flow hedges and historical pension and other postretirement benefit actuarial losses. The associated income tax benefit of $200.1 million related to this reclassified AOCI loss was recorded as a component of the income tax benefit (expense) line item on the consolidated statement of operations.

Allocation of Consideration Transferred

The acquisition of MillerCoors was reflected in our consolidated financial statements as a step acquisition using the acquisition method of accounting. As such, we remeasured our pre-existing 42% equity interest in MillerCoors to fair value as discussed above. The fair value measurement of our previously held equity interest immediately prior to the completion of the Acquisition is based on significant inputs not observable in the market, and thus represents a Level 3 measurement. Specifically, the approach used in determining the fair value of our pre-existing 42% equity interest in MillerCoors, while considering an allocation of the total $12.0 billion purchase price attributable to the Acquisition and the nature of the Acquisition, also incorporated an income valuation approach using inputs including discount rate and terminal growth rate.

Under the acquisition method, MCBC recorded all assets acquired and liabilities assumed at their respective acquisition-date fair values. The excess of total consideration, including the estimated fair value of our previously held equity interest in MillerCoors, over the net identifiable assets acquired and liabilities assumed was recorded as goodwill. We have completed the preliminary detailed valuation analyses necessary to assess the fair values of the tangible and intangible assets acquired and liabilities assumed and the amount of goodwill to be recognized as of the Acquisition date. The amounts shown below for certain assets and liabilities, as well as the fair value of our previously held 42% equity interest, are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the Acquisition date. Upon completion of detailed valuation analyses, there may be adjustments to the valuation of our previously held 42% equity interest, as well as to the assigned values of acquired assets and liabilities, including but not limited to brands and other intangible assets and property, plant and equipment that may give rise to increases or decreases in the amounts of depreciation and amortization expense. The final determination of the fair values will be completed within the measurement period of up to one year from the Acquisition date as permitted under U.S. GAAP and any adjustments to provisional amounts that are identified during the measurement period will be recorded in the reporting period in which the adjustment is determined. The size and complexity of the Acquisition could necessitate the need to use the full one year measurement period to adequately analyze and assess a number of the factors used in establishing the asset and liability fair values as of the Acquisition date including contractual and operational factors underlying the intangible assets. Any potential adjustments made could be material in relation to the preliminary values presented in the table below.

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

Total current assets (1)	$	1,063.4
Property, plant and equipment(2)	3,002.0
Other intangible assets (3)	9,875.0
Other assets(4)	330.6
Total current liabilities	(1,154.3		)
Pension and postretirement benefits	(1,009.7		)
Other non-current liabilities	(209.2		)
Total identifiable net assets acquired	$	11,897.8
Goodwill(5)	6,415.6
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 preliminary 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. These fair values are preliminary and subject to change after we finalize the review of the specific types, nature, age and condition of acquired property, plant and equipment. Actual results may differ materially from these estimates. The preliminary fair value and remaining useful life of property, plant and equipment are estimated as follows:

	Preliminary 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	262.3				N/A
Acquired property, plant and equipment	$	3,002.0

(3)

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

	Preliminary 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 includes the Coors and Miller families of brands in the U.S. Brands subject to amortization includes certain brands in the U.S. and the Miller global brand portfolio. Based on the limited information received to date regarding the Miller global brands, the estimated value allocated to these brands remains subject to change as additional information, reflective of the performance of the brands as of the Acquisition date, becomes available. Other intangible assets not subject to amortization includes water rights. Other intangible assets subject to amortization includes certain distribution rights, naming rights and favorable contracts.

(4)	Includes estimated deferred tax assets of approximately $300 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 preliminarily allocated all of the goodwill generated in the Acquisition to our U.S. segment. 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.

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

Condensed Balance Sheets

	As of
	October 10, 2016				December 31, 2015
	(In millions)
Current assets	$	977.9			$	800.5
Non-current assets	9,247.8				9,099.5
Total assets	$	10,225.7			$	9,900.0
Current liabilities	$	1,140.8			$	1,180.1
Non-current liabilities	1,244.7				1,407.0
Total liabilities	2,385.5				2,587.1
Noncontrolling interests	17.9				20.1
Owners' equity	7,822.3				7,292.8
Total liabilities and equity	$	10,225.7			$	9,900.0

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				December 31, 2015
	(In millions, except percentages)
MillerCoors' owners' equity	$	7,822.3			$	7,292.8
MCBC's economic interest	42		%		42		%
MCBC's proportionate share in MillerCoors' owners' equity	3,285.4				3,063.0
Difference between MCBC's contributed cost basis and proportionate share of the underlying equity in net assets of MillerCoors(1)	(653.7		)		(657.0		)
Accounting policy elections	35.0				35.0
Investment in MillerCoors	$	2,666.7			$	2,441.0

(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). 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 years ended
	2016				December 31, 2015				December 31, 2014
	(In millions)
Net sales	$	6,125.4			$	7,725.5			$	7,848.4
Cost of goods sold	(3,457.4		)		(4,547.5		)		(4,743.8		)
Gross profit	$	2,668.0			$	3,178.0			$	3,104.6
Operating income(1)	$	1,169.2			$	1,239.2			$	1,347.3
Net income attributable to MillerCoors(1)	$	1,157.2			$	1,217.8			$	1,326.2

(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. Results for 2014 include special charges related to restructuring activities of $1.4 million.

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 years ended
	2016				December 31, 2015				December 31, 2014
	(In millions, except percentages)
Net income attributable to MillerCoors	$	1,157.2			$	1,217.8			$	1,326.2
MCBC's economic interest	42		%		42		%		42		%
MCBC's proportionate share of MillerCoors' net income	486.0				511.5				557.0
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				4.6
Share-based compensation adjustment(1)	(0.7		)		0.2				0.2
U.S. import tax benefit(2)	12.3				—				—
Equity income in MillerCoors	$	500.9			$	516.3			$	561.8

(1)	The net adjustment is to eliminate all share-based compensation impacts related to pre-existing SABMiller equity awards held by former Miller 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. Due to administrative restrictions outlined within the legislation enacted in 2016, the anticipated refund is not expected to be received until 2018. Accordingly, the anticipated refund amount represents a non-current receivable which has been recorded within other non-current assets on the consolidated balance sheet as of December 31, 2016.

Investments

Our investments include both equity method and consolidated investments. Those entities identified as variable interest entities have been evaluated to determine whether we are the primary beneficiary. The VIEs included under "Consolidated VIEs" below are those for which we have concluded that we are the primary beneficiary and accordingly, consolidate these entities. None of our consolidated VIEs held debt as of December 31, 2016, or December 31, 2015. With the exception of the

BDL debt guarantee further discussed below, we have not provided any financial support to any of our VIEs during 2016 that we were not previously contractually obligated to provide. Amounts due to and due from our equity method investments are recorded as affiliate accounts payable and affiliate accounts receivable. See below under "Affiliate Transactions" for further details.

Authoritative guidance related to the consolidation of VIEs requires that we continually reassess whether we are the primary beneficiary of VIEs in which we have an interest. As such, the conclusion regarding the primary beneficiary status is subject to change and we continually evaluate circumstances that could require consolidation or deconsolidation. As of December 31, 2016, our consolidated VIEs are Cobra Beer Partnership, Ltd. ("Cobra U.K."), Grolsch U.K. Ltd ("Grolsch"), Rocky Mountain Metal Container (“RMMC”) and Rocky Mountain Bottle Company (“RMBC”). RMMC and RMBC were previously consolidated VIEs of MillerCoors and as a result of the Acquisition are now MCBC consolidated VIEs. As of December 31, 2015, our consolidated VIEs were Cobra U.K. and Grolsch. Our unconsolidated VIEs are BRI and BDL.

Both BRI and BDL have outstanding third party debt which is guaranteed by its shareholders. As a result, we have a guarantee liability of $31.7 million and $16.9 million recorded as of December 31, 2016, and December 31, 2015, respectively, which is presented within accounts payable and other current liabilities on the consolidated balance sheets, and represents our proportionate share of the outstanding balance of these debt instruments. The carrying value of the guarantee liability equals fair value, which considers an adjustment for our own non-performance risk and is considered a Level 2 measurement. The offset to the guarantee liability was recorded as an adjustment to our respective equity method investment within the consolidated balance sheets. The resulting change in our equity method investments during the year due to movements in the guarantee represents a non-cash investing activity.

Equity Method Investments

Brewers' Retail Inc.

BRI is a beer distribution and retail network for the Ontario region of Canada, with majority of the ownership residing with MCC, Labatt Breweries of Canada LP (a subsidiary of ABI) and Sleeman Breweries Ltd. (a subsidiary of Sapporo International). BRI charges its owners administrative fees that are designed so the entity operates on a cash neutral basis. This administrative fee is based on costs incurred, net of other revenues earned, and is allocated in accordance with the operating agreement to its owners based on volume of products. Contractual provisions cause participation in governance and other interests to fluctuate based on this calculated market share requiring frequent primary beneficiary evaluations. However, based on the existing structure, control is shared, and remains shared through such changes, and therefore we do not anticipate becoming the primary beneficiary in the foreseeable future. We consider BRI an affiliate. See "Affiliate Transactions" section below summarizing our transactions and balances with affiliates, including BRI.

In 2015, we, along with the other owners of BRI and the Province of Ontario, agreed to revise the ownership structure of BRI. The new BRI shareholder agreement (“New Shareholder Agreement”) incorporating these changes became effective at the beginning of 2016, at which time BRI converted all existing capital stock into a new share class, as well as created a separate share class to facilitate new and existing brewer participation and governance. While governance and board of director participation continues to have the ability to fluctuate based on market share relative to the other owners, our equity interest has become fixed under the New Shareholder Agreement. We have evaluated the changes within the New Shareholder Agreement from a primary beneficiary perspective and concluded that we will continue to account for BRI as an equity method investment, as control of BRI continues to be shared under the New Shareholder Agreement.

We have an obligation to proportionately fund BRI's operations. As a result of this obligation, we continue to record our proportional share of BRI's net income or loss and OCI activity, including when we have a negative equity method balance. As of December 31, 2016, we had a negative equity method investment balance of $9.5 million, and as of December 31, 2015, we had a positive equity method balance of $7.3 million. The decrease to our net investment balance was primarily driven by an increase to BRI's employee retirement plan obligations (resulting from the annual actuarial valuation) unfavorably impacting the net assets of BRI. See "Affiliate Transactions" below for BRI affiliate transactions including administrative fees charged to MCBC under the agreement with BRI which are recorded in cost of goods sold, as well as for BRI affiliate due to and due from balances as of December 31, 2016, and December 31, 2015, respectively, related to trade receivables and payables for sales to external customers and costs incurred by BRI offset by administrative fees charged and paid by MCBC (which may be in a payable or receivable position depending on the amount under or over charged).

Brewers' Distributor Ltd.

BDL is a distribution operation owned by MCC and Labatt Breweries of Canada LP (a subsidiary of ABI) that, pursuant to an operating agreement, acts as an agent for the distribution of their products in the western provinces of Canada. The two

owners share 50% - 50% voting control of this business. We consider BDL an affiliate. See "Affiliate Transactions" section below summarizing our transactions and balances with affiliates, including BDL.

BDL charges the owners administrative fees that are designed so the entity operates at break-even profit levels. This administrative fee is based on costs incurred, net of other revenues earned, and is allocated in accordance with the operating agreement to the owners based on volume of products. No other parties are allowed to sell beer through BDL, which does not take legal title to the beer distributed for the owners. As of December 31, 2016, and December 31, 2015, our investment in BDL was $29.2 million and $15.7 million, respectively. The increase in our investment was primarily related to our guarantee of BDL's third party debt obligations discussed above. See "Affiliate Transactions" section below for BDL affiliate transactions including administrative fees charged to MCBC under the agreement with BDL which are recorded in cost of goods sold, as well as for BDL affiliate due to and due from balances as of December 31, 2016, and December 31, 2015, respectively, related to trade receivables and payables for sales to external customers and costs incurred by BDL offset by administrative fees charged and paid by MCBC (which may be in a payable or receivable position depending on the amount under or over charged).

Our equity method investments are not considered significant for disclosure of financial information on either an individual or aggregated basis and there were no significant undistributed earnings as of December 31, 2016, or December 31, 2015, for any of these companies.

Affiliate Transactions

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, 2016				December 31, 2015				December 31, 2014
	(In millions)
Beer sales to MillerCoors(1)	$	7.5			$	11.7			$	13.1
Beer purchases from MillerCoors(1)	$	32.0			$	43.2			$	37.3
Service agreement costs and other charges to MillerCoors(1)	$	1.9			$	2.6			$	2.4
Service agreement costs and other charges from MillerCoors(1)	$	0.9			$	0.9			$	1.0
Administrative fees, net charged from BRI	$	85.8			$	88.8			$	103.4
Administrative fees, net charged from BDL	$	34.3			$	36.4			$	50.8

(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, 2016, and December 31, 2015, respectively, are as follows:

	Amounts due from affiliates								Amounts due to affiliates
	December 31, 2016				December 31, 2015				December 31, 2016				December 31, 2015
	(In millions)
MillerCoors(1)	$	—			$	1.6			$	—			$	9.2
BRI	9.0				4.5				—				—
BDL	6.1				10.1				—				—
Other	—				0.6				2.1				1.4
Total	$	15.1			$	16.8			$	2.1			$	10.6

(1)	As a result of the Acquisition, beginning October 11, 2016, amounts due from and due to MillerCoors which were previously recorded as amounts due to and due from affiliates became intercompany transactions and thus eliminate in consolidation.

Consolidated VIEs

Grolsch

Grolsch is a joint venture between us and Royal Grolsch N.V. (a member of Asahi Group Holdings, Ltd.) in which we hold a 49% interest. The Grolsch joint venture markets Grolsch brands in the U.K. and Republic of Ireland. The majority of the Grolsch brands are produced by us under a contract brewing arrangement with the joint venture. MCBC and Royal Grolsch N.V. sell beer to the joint venture, which sells the beer back to MCBC (for onward sale to customers) for a price equal to what it paid, plus a marketing and overhead charge and a profit margin. Grolsch is a taxable entity in Europe. Accordingly, income tax expense in our consolidated statements of operations includes taxes related to the entire income of the joint venture. We consolidate the results and financial position of Grolsch and it is reported within our Europe operating segment.

Cobra Beer Partnership, Ltd

We hold a 50.1% interest in Cobra U.K., which owns the worldwide rights to the Cobra beer brand (with the exception of the Indian sub-continent, owned by Cobra India). The noncontrolling interest is held by the founder of the Cobra beer brand. We consolidate the results and financial position of Cobra U.K., and it is reported within our Europe operating segment.

Rocky Mountain Metal Container

RMMC, a Colorado limited liability company, is a joint venture with Ball Corporation in which we hold a 50% interest. MillerCoors has a can and end supply agreement with RMMC. Under this agreement, we purchase substantially all of the output of RMMC. RMMC manufactures cans and ends at our facilities, which RMMC is operating under a use and license agreement. As RMMC is a limited liability company (“LLC”), the tax consequences flow to the joint venture partners.

Rocky Mountain Bottle Company

RMBC, a Colorado limited liability company, is a joint venture with Owens-Brockway Glass Container, Inc. in which we hold a 50% interest. MillerCoors has a supply agreement with RMBC under which we agree to purchase output approximating the agreed upon annual plant capacity of RMBC. RMBC manufactures bottles at our facilities, which RMBC is operating under a lease agreement. As RMBC is an LLC, the tax consequences flow to the joint venture partners.

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

	As of
	December 31, 2016								December 31, 2015
	Total Assets				Total Liabilities				Total Assets				Total Liabilities
	(In millions)
Grolsch	$	4.4			$	0.5			$	6.9			$	3.3
Cobra U.K.	$	14.2			$	1.1			$	30.2			$	0.9
RMMC	$	70.2			$	3.5			N/A				N/A
RMBC	$	53.1			$	2.5			N/A				N/A

Termination of Investments

Modelo Molson Imports, L.P.

On February 28, 2014, ABI and MCBC finalized the accelerated termination of MMI, a 50% - 50% joint venture with Grupo Modelo S.A.B. de C.V. ("Modelo"), which provided for the import, distribution, and marketing of the Modelo beer brand portfolio across all Canadian provinces and territories. The joint venture was accounted for under the equity method of accounting.

Following the successful completion of the transition in the first quarter of 2014, we recognized income of $63.2 million (CAD 70.0 million) within special items, reflective of the agreed upon payment received from Modelo. Additionally, in the first quarter of 2014, we recorded a charge of $4.9 million representing the accelerated amortization of the remaining carrying value of our definite-lived intangible asset associated with the agreement. In accordance with the termination agreement, MMI continued to operate in its historical capacity through the end of the transition period. Effective end of day on February 28, 2014, MMI ceased all operations and was dissolved during the third quarter of 2014 upon final agreement with ABI on the distribution amount of the joint venture's remaining net assets. Our results for 2014, reflect our proportionate ownership interest

of the MMI activity during the first quarter of 2014 through end of day February 28, 2014. Under the MMI arrangement, we recognized equity earnings within cost of goods sold of $0.7 million during 2014. In addition, during 2014 MCC recognized marketing and administrative cost recoveries related to the promotion, sale and distribution of Modelo products under our agency and services agreement with MMI of $1.1 million. These cost recoveries are recorded within marketing, general and administrative expenses.

In accordance with the early termination agreement, the book value of the joint venture's net assets was required to be distributed to the respective joint venture partners for the owners' proportionate ownership interest at the end of the transition period. This distribution was finalized in the third quarter of 2014. Concurrently, we derecognized our equity investment within other non-current assets upon full recovery of our investment carrying value.

5. Other Income and Expense

The table below summarizes other income and (expense):

	For the years ended
	December 31, 2016				December 31, 2015				December 31, 2014
	(In millions)
Bridge loan commitment fees(1)	$	(63.4	)		$	(6.9	)		$	—
Gain on sale of non-operating asset	20.5				0.8				—
Gain (loss) from other foreign exchange and derivative activity, net	10.0				6.2				(6.6		)
Other, net	3.2				0.8				0.1
Other income (expense), net	$	(29.7	)		$	0.9			$	(6.5	)

(1)

During 2016 and 2015, we recognized amortization of commitment fees and other financing costs incurred in connection with our bridge loan agreement entered into subsequent to the announcement of the Acquisition. In conjunction with the July 7, 2016, issuance of the 2016 Notes, as defined in Note 12, "Debt", we terminated the bridge loan agreement and accelerated the remaining unamortized fees to other income (expense) during the third quarter of 2016. All related financing fees ceased upon termination of the bridge loan. See Note 12, "Debt", for further discussion.

6. Income Tax

Our income (loss) from continuing operations before income taxes on which the provision for income taxes was computed is as follows:

	For the years ended
	December 31, 2016				December 31, 2015				December 31, 2014
	(In millions)
Domestic	$	3,396.9			$	746.1			$	736.2
Foreign	(361.6		)		(335.4		)		(149.9		)
Total	$	3,035.3			$	410.7			$	586.3

Income tax expense (benefit) includes the following current and deferred provisions:

	For the years ended
	December 31, 2016				December 31, 2015				December 31, 2014
	(In millions)
Current:
Federal	$	83.4			$	116.1			$	78.4
State	12.0				11.8				12.9
Foreign	31.9				25.2				(22.5		)
Total current tax expense (benefit)	$	127.3			$	153.1			$	68.8
Deferred:
Federal	$	684.8			$	(26.1	)		$	27.6
State	99.9				(5.8		)		2.0
Foreign	138.7				(69.4		)		(29.4		)
Total deferred tax expense (benefit)	$	923.4			$	(101.3	)		$	0.2
Total income tax expense (benefit) from continuing operations	$	1,050.7			$	51.8			$	69.0

The increase in income tax expense for 2016 versus 2015 was driven by the income tax effects of the pretax gain recognized on the fair value remeasurement of our previously held equity interest in MillerCoors and the reclassification of the accumulated other comprehensive loss related to our historical 42% interest in MillerCoors (see Note 4, “Acquisition and Investments”). This resulted in the recognition of net deferred income tax expense of approximately $850 million upon completion of the Acquisition. In addition, we recognized incremental deferred income tax expense in 2016 as a result of the remeasurement of our deferred tax liability associated with our Molson core brand intangible asset to the Canadian ordinary income tax rate upon reclassification from indefinite-lived to definite-lived subject to amortization (see Note 11, “Goodwill and Intangible Assets”). This incremental deferred tax expense more than offset the deferred tax benefit associated with the pretax impairment charge. These increases were also slightly offset by the release of certain valuation allowances in 2016.

Our effective tax rate varies from the U.S. federal statutory income tax rate as follows:

	For the years ended
	December 31, 2016			December 31, 2015			December 31, 2014
Statutory Federal income tax rate	35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefits	2.4	%		1.6	%		2.5	%
Effect of foreign tax rates and tax planning	(1.8	)%		(29.2	)%		(24.3	)%
Effect of Molson brand useful life change	6.4	%		—	%		—	%
Effect of unrecognized tax benefits	—	%		(3.5	)%		(3.9	)%
Change in valuation allowance	(0.5	)%		8.2	%		0.4	%
Acquisition related permanent items	(7.7	)%		—	%		—	%
Other, net	0.8	%		0.5	%		2.1	%
Effective tax rate	34.6	%		12.6	%		11.8	%

The increase in the effective income tax rate for 2016 versus 2015 was primarily driven by higher pretax income in 2016 resulting from the Acquisition related revaluation gain discussed above, along with the inclusion of 100% of MillerCoors' pretax income following the completion of the Acquisition, each of which were taxed at the U.S. federal and state income tax rates. Additionally, deferred tax expense was not required to be recorded on the difference between our historical tax basis in goodwill and the new book basis in goodwill resulting from the remeasurement of our previously held equity interest in MillerCoors. This resulted in a partially offsetting decrease to the effective tax rate, which is presented in the Acquisition related permanent items line in the table above, as a portion of the revaluation gain was not tax effected. The increase in our effective income tax rate in 2016 was also impacted by the remeasurement of the deferred tax liability on our Molson core brand intangible asset to the Canadian ordinary income tax rate as discussed above. Our effective income tax rates in 2015 and 2014 were significantly lower than the federal statutory rate of 35% primarily due to lower effective income tax rates applicable to our foreign businesses, driven by lower statutory income tax rates and tax planning impacts on statutory taxable income. The statutory income tax rates in the countries in Europe in which we operate range from 9% to 21%. Canada has a statutory income

tax rate of approximately 26%. In addition, during 2015 and 2014, our effective tax rate was also positively impacted by the favorable resolution of unrecognized tax benefits in various taxing jurisdictions as further discussed below.

The table below summarizes our deferred tax assets and liabilities:

	As of
	December 31, 2016				December 31, 2015
	(In millions)
Non-current deferred tax assets:
Compensation related obligations	$	22.2			$	19.3
Pension and postretirement benefits	35.6				61.2
Tax credit carryforwards	13.0				1.5
Tax loss carryforwards	1,004.8				897.9
Accrued liabilities and other	46.1				32.3
Other	7.5				10.0
Valuation allowance	(901.7		)		(824.9		)
Total non-current deferred tax assets	$	227.5			$	197.3
Non-current deferred tax liabilities:
Fixed assets	72.5				69.7
Partnership investments	922.0				169.7
Foreign exchange gain/loss	43.0				48.7
Intangible assets	800.5				644.0
Other	13.8				13.9
Total non-current deferred tax liabilities	$	1,851.8			$	946.0
Net non-current deferred tax assets	—				—
Net non-current deferred tax liabilities	$	1,624.3			$	748.7

MillerCoors continues to be treated as a partnership for U.S. federal and state income tax purposes following the completion of the Acquisition. Accordingly, the deferred tax consequences are recognized based on the difference between the financial reporting basis and tax basis of the investments in the partnership at the investor level. The overall increase to net deferred tax liabilities in 2016 is primarily attributable to the approximate $1.1 billion deferred tax liability recognized on the fair value remeasurement of our previously held equity interest in MillerCoors. This increase was partially offset by the recognition of deferred tax assets in acquisition accounting related to certain temporary differences associated with the acquired 58% interest in MillerCoors. This increase was also partially offset by the acceleration of taxable income in 2016 related to our investment in MillerCoors, which was previously deferred, as MillerCoors was required to change to a calendar year end for U.S. federal and state income tax purposes upon MCBC obtaining 100% ownership.

Separately, during 2016, we recorded additional tax loss carryforwards in certain European jurisdictions in the aggregate of $139.7 million, primarily driven by investment losses recognized based on local statutory accounting requirements. As the carryforwards were generated in jurisdictions where we do not have operations, we concluded that it was more likely than not that the net operating losses would not be realized, and thus recorded a full valuation allowance on the associated deferred tax assets. The recognition of these deferred tax assets and fully offsetting valuation allowance resulted in a zero net impact to the consolidated statement of operations, balance sheet and statement of cash flows. This valuation allowance increase was partially offset by the release of valuation allowances in certain U.S., Canada and European jurisdictions, along with foreign exchange impacts as a significant portion of our valuation allowances relate to jurisdictions outside of the U.S.

Our deferred tax valuation allowances are primarily the result of uncertainties regarding the future realization of recorded tax benefits on tax loss carryforwards from operations in various jurisdictions. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that the deferred tax assets will not be realized. We have evaluated the realizability of our deferred tax assets in each jurisdiction by assessing the adequacy of expected taxable income, including the reversal of existing temporary differences, historical and projected operating results and the availability of prudent and feasible tax planning strategies. Based on this analysis, we have determined that the valuation allowances recorded in each period presented are appropriate.

We have deferred tax assets for U.S. tax carryforwards that expire between 2017 and 2036 of $17.8 million and $4.5 million at December 31, 2016, and December 31, 2015, respectively. We have foreign tax loss carryforwards that expire between 2017 and 2036 of $151.0 million and $160.5 million as of December 31, 2016, and December 31, 2015, respectively. We have foreign tax loss carryforwards that do not expire of $849.0 million and $734.4 million as of December 31, 2016, and December 31, 2015, respectively. The significant increase in foreign tax loss carryforwards that do not expire is primarily driven by the tax loss carryforwards related to certain European jurisdictions specifically mentioned above, and for which a full valuation allowance exists.

The following table presents our deferred tax assets and liabilities on a net basis:

	As of
	December 31, 2016				December 31, 2015
	(In millions)
Domestic net non-current deferred tax liabilities	$	925.5			$	195.0
Foreign net non-current deferred tax assets	42.0				20.2
Foreign net non-current deferred tax liabilities	740.8				573.9
Net non-current deferred tax liabilities	$	1,624.3			$	748.7

The 2016 and 2015 amounts above exclude $32.7 million and $30.9 million, respectively, of unrecognized tax benefits that have been recorded as a reduction of non-current deferred tax assets, which is presented within non-current deferred tax liabilities due to jurisdictional netting on the consolidated balance sheets.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows:

	For the years ended
	December 31, 2016				December 31, 2015				December 31, 2014
	(In millions)
Balance at beginning of year	$	39.5			$	59.8			$	137.9
Additions for tax positions related to the current year	1.7				1.8				2.2
Additions for tax positions of prior years	—				2.2				20.4
Reductions for tax positions of prior years	—				(5.5		)		(19.4		)
Settlements	—				(0.9		)		(55.4		)
Release due to statute expiration and legislative changes	(2.3		)		(9.6		)		(18.4		)
Foreign currency adjustment	0.8				(8.3		)		(7.5		)
Balance at end of year	$	39.7			$	39.5			$	59.8

During 2014, we filed an amendment to certain historical U.S. tax returns and concurrently fully settled $19.3 million of unrecognized tax benefits. This settlement amount is included in the table above but did not impact our 2014 effective tax rate as it was settled for the amount of the liability. Additionally, upon expiration of certain statutes of limitations in the U.S., we recognized a $6.3 million benefit to our 2014 income tax expense. The remaining decrease in unrecognized tax positions during 2014 was driven by the $34.9 million settlement of a tax audit and the impact of the resolution of the bilateral advanced pricing agreement (“BAPA”) in Canada that were offset by the intended utilization of deferred tax assets and therefore did not impact our effective tax rate, the favorable resolution of tax audits resolved in Europe resulting in the release of $16.2 million of unrecognized tax positions and the release of unrecognized tax benefits due to expiration of the statute of limitations in Europe and Canada.

Our remaining unrecognized tax benefits as of December 31, 2016, relate to tax years that are currently open, and amounts may differ from those to be determined upon closing of the positions. Annual tax provisions include amounts considered sufficient to pay assessments that may result from examination of prior year tax returns; however, the amount ultimately paid upon resolution of issues may differ materially from the amount accrued.

During 2017, we anticipate that approximately $25 million to $30 million of unrecognized tax benefits will be released due to settlements and closings of statutes of limitations in the U.S., Canada and Europe.

	For the years ended
	December 31, 2016				December 31, 2015				December 31, 2014
Reconciliation of unrecognized tax benefits balance	(In millions)
Estimated interest and penalties	$	5.7			$	5.3			$	7.2
Offsetting positions	—				(3.7		)		(3.7		)
Unrecognized tax positions	39.7				39.5				59.8
Total unrecognized tax benefits	$	45.4			$	41.1			$	63.3
Presented net against non-current deferred tax assets	$	32.7			$	30.9			$	37.9
Current (included in accounts payable and other current liabilities)	3.0				1.8				—
Non-current (included within other liabilities)	9.7				8.4				25.4
Total unrecognized tax benefits	$	45.4			$	41.1			$	63.3
Amount of unrecognized tax benefits that would impact the effective tax rate, if recognized(1)	$	39.7			$	39.5			$	59.8

(1)	Amounts exclude the potential effects of valuation allowances, which may fully or partially offset the impact to the effective tax rate.

We file income tax returns in most of the federal, state and provincial jurisdictions in the U.S., Canada and various countries in Europe. Tax years through 2012 are closed in the U.S. In Canada, tax years through the year ended 2011 are closed or have been effectively settled through examination except for issues relating to intercompany cross-border transactions. The statute of limitations for intercompany cross-border transactions is closed through tax year 2008. Tax years through 2009 are closed for most countries in European jurisdictions with statutes of limitations varying from 3-7 years.

We annually receive cash from our foreign subsidiaries’ current year earnings. Separately, we treat all accumulated foreign subsidiary earnings through December 31, 2016, as indefinitely reinvested under the accounting guidance, and accordingly have not provided for any U.S. or foreign tax thereon. In order to arrive at this conclusion, we considered factors including, but not limited to, past experience, domestic cash requirements and cash generated by MillerCoors, as well as cash requirements to satisfy the ongoing operations, capital expenditures and other financial obligations of our foreign subsidiaries. As of December 31, 2016, approximately $17 million of undistributed earnings and profits attributable to foreign subsidiaries were considered to be indefinitely invested. Our intention is to permanently reinvest the earnings outside of the U.S. It is not practicable to determine the amount of incremental taxes that might arise were these earnings to be remitted. The amount of tax payable could be impacted by the jurisdiction in which a distribution was made, the amount of the distribution, foreign withholding taxes under applicable tax laws when distributed, relevant tax treaties and foreign tax credits. While it is not practical to determine the amount of tax, we believe that U.S. foreign tax credits and tax planning strategies would allow us to make remittances in a tax efficient manner.

7. 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. The table below summarizes special items recorded by segment:

	For the years ended
	December 31, 2016				December 31, 2015				December 31, 2014
	(In millions)
Employee-related charges
Restructuring
U.S.	$	3.2			$	—			$	—
Canada	4.0				2.1				7.6
Europe	(0.9		)		3.0				3.7
MCI	0.3				3.2				—
Corporate	0.7				—				0.3
Other employee related costs
Canada - Pension settlement	9.0				—				—
Impairments or asset abandonment charges
U.S. - Asset abandonment(1)	2.7				—				—
Canada - Intangible asset impairment and write-off(2)(8)	495.2				—				13.8
Canada - Asset abandonment(3)	5.0				25.1				—
Europe - Intangible asset impairment(2)	—				275.0				360.0
Europe - Asset abandonment(4)	10.8				27.5				4.0
MCI - Asset impairment and write-off(5)	30.8				3.2				—
Unusual or infrequent items
Europe - Flood loss (insurance reimbursement), net(6)	(9.3		)		(2.4		)		(1.8		)
Termination fees and other (gains) losses
U.S. - Acquisition revaluation gain and reclassification of historical share of MillerCoors' AOCI(7)	(2,965.0		)		—				—
Canada - Gain on sale of asset(3)	(110.4		)		—				—
Canada - Termination fee income(8)	—				—				(63.2		)
Europe - Termination fee expense, net(9)	—				10.0				—
Total Special items, net	$	(2,523.9	)		$	346.7			$	324.4

(1)

During the third quarter of 2015, MillerCoors 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 period October 11, 2016, through December 31, 2016, certain costs related to the closure of the brewery were recorded within special items.

(2)

During the fourth quarter of 2016, and third quarters of 2015 and 2014, we recognized impairment charges related to indefinite-lived intangible assets in Canada and Europe, respectively. Additionally, in the third quarter of 2014, we recognized an impairment charge related to our definite-lived intangible asset associated with our license agreement with Miller in Canada. See Note 11, "Goodwill and Intangible Assets" for further discussion.

(3)

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 2016 and 2015, we

incurred other abandonment charges, including accelerated depreciation charges in excess of normal depreciation of $4.9 million and $1.2 million, respectively, related to the planned closure of the Vancouver brewery.

Separately, during 2015 we recorded accelerated depreciation charges in excess of our normal depreciation of $15.4 million and $7.9 million, related to the closures of bottling lines within our Vancouver and Toronto, respectively, breweries also as part of our ongoing strategic review of our Canadian supply chain network.

(4)

As a result of our continued strategic review of our European supply chain network, we incurred special charges associated with the planned closure of our Burton South brewery in the U.K. of $8.5 million in 2016, which includes accelerated depreciation charges in excess of our normal depreciation of $7.5 million. During 2015 we incurred $1.4 million of accelerated depreciation charges in excess of our normal depreciation associated with this brewery.

Related to the closure of our Plovdiv brewery in Bulgaria, in 2016 and 2015 we recorded $1.8 million and $2.1 million, respectively, of asset abandonment related special charges. Included in 2015 is accelerated depreciation in excess of our normal depreciation of $1.0 million.

Additionally, as part of this review, related to the closure of the Alton brewery in the U.K., in 2016 we incurred asset abandonment related special charges of $0.5 million, and in 2015 we incurred asset abandonment related special charges of $24.0 million, which includes accelerated depreciation in excess of our normal depreciation of $21.8 million. In 2014, we incurred accelerated depreciation in excess of our normal depreciation of $4.0 million.

(5)	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 employee-related charges and asset write-off charges, including $0.7 million of accelerated depreciation in 2015. We also recognized employee-related charges within our MCI segment following this decision and as a result of this action, employment levels were reduced by approximately 125 full-time employees.

(6)

During the third quarter of 2016, we received the final settlement of insurance proceeds of $9.3 million related to losses incurred by our Europe business from flooding in Serbia, Bosnia and Croatia which occurred during 2014. We had previously recorded losses and related costs offset by income received from insurance proceeds related to these floods during 2014. During 2015, we recorded income from insurance proceeds for insurance proceeds received related to significant flooding in Czech Republic that occurred in 2013.

(7)

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.

(8)	Upon termination of our MMI operations in 2014, we recognized termination fee income and charges associated with the write-off of the definite-lived intangible asset associated with the joint venture. See Note 4, "Acquisition and Investments" for further discussion.

(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

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 resulted in reduced employment levels by approximately 44 employees during the fourth quarter of 2016. Total restructuring costs related to integration initiatives were $9.3 million in 2016, representing the majority of the charges within the table below by segment. These severance costs were recorded as special items within our consolidated statements of operations. The accrued restructuring balances represent expected future cash payments required to satisfy the remaining severance obligations to terminated employees, which we expect to be paid in the next 12 to 24 months. 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 closed the Alton and Plovdiv breweries and we plan to close the Vancouver and Burton South breweries. As a result of these restructuring activities, we have reduced employment levels by approximately 401 employees, of which approximately 329 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 in the future, however, we are unable to estimate the amount of charges at this time.

In 2012, we introduced several initiatives focused on increasing our efficiencies and reducing costs across all functions of the business in order to develop a more competitive supply chain and global cost structure. As a result of these restructuring activities, we have reduced employment levels by approximately 1,070 employees since 2012, of which approximately 160, 310 and 600 relate to 2014, 2013 and 2012 activities, respectively. Consequently, we recognized severance and other employee related charges, which we have recorded as special items within our consolidated statements of operations. During 2014, we finalized our restructuring initiatives that began in 2012.

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 to 24 months. The table below summarizes the activity in the restructuring accruals by segment:

	U.S.				Canada				Europe				MCI				Corporate				Total
	(In millions)
Balance at December 31, 2013	$	—			$	9.7			$	13.6			$	0.5			$	0.9			$	24.7
Charges incurred	—				7.6				6.3				—				0.3				14.2
Payments made	—				(13.0		)		(5.2		)		(0.5		)		(1.0		)		(19.7		)
Changes in estimates	—				—				(2.6		)		—				—				(2.6		)
Foreign currency and other adjustments	—				(0.5		)		(0.6		)		—				—				(1.1		)
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

8. Stockholders' Equity

Changes to the number of shares of capital stock issued were as follows:

	Common stock issued						Exchangeable shares issued
	Class A			Class B(1)			Class A			Class B
	(Share amounts in millions)
Balance at December 31, 2013	2.6			167.2			2.9			19.0
Shares issued under equity compensation plans	—			1.3			—			—
Shares exchanged for common stock	—			1.4			—			(1.4	)
Balance at December 31, 2014	2.6			169.9			2.9			17.6
Shares issued under equity compensation plans	—			1.0			—			—
Shares exchanged for common stock	—			1.6			—			(1.6	)
Balance at December 31, 2015	2.6			172.5			2.9			16.0
Shares issued from public offering	—			29.9			—			—
Shares issued under equity compensation plans	—			0.5			—			—
Shares exchanged for common stock	—			0.8			—			(0.8	)
Balance at December 31, 2016	2.6			203.7			2.9			15.2

(1)

During 2016, we received proceeds of approximately $2.5 billion, net of issuance costs from our February 3, 2016, equity offering of 29.9 million shares of our Class B common stock. See "Class B Common Stock Equity Issuance" below for further discussion. During 2015, we repurchased Class B common shares which results in a lower number of outstanding shares compared to issued shares. See "Share Repurchase Program" below for further discussion. For all other classes, issued shares equal outstanding shares.

Exchangeable Shares

The Class A exchangeable shares and Class B exchangeable shares were issued by Molson Coors Canada Inc. ("MCCI"), a wholly-owned subsidiary of the Company. The exchangeable shares are substantially the economic equivalent of the corresponding shares of Class A and Class B common stock that a Molson shareholder would have received in the Merger if the holder had elected to receive shares of Molson Coors common stock. Holders of exchangeable shares also receive, through a voting trust, the benefit of Molson Coors voting rights, entitling the holder to one vote on the same basis and in the same circumstances as one corresponding share of Molson Coors common stock.

Voting Rights

Each holder of record of Class A common stock, Class B common stock, Class A exchangeable shares and Class B exchangeable shares is entitled to one vote for each share held, without the ability to cumulate votes on the election of directors. Our Class B common stock has fewer voting rights than our Class A common stock and holders of our Class A common stock have the ability to effectively control or have a significant influence over company actions requiring stockholder approval. Specifically, holders of Class B common stock voting together as a single class have the right to elect three directors of the Molson Coors Board of Directors, as well as the right to vote on certain additional matters as outlined in the our Restated Certificate of Incorporation (as amended, the “Certificate”), such as merger agreements that require approval under applicable law, sales of all or substantially all of the our assets to unaffiliated third parties, proposals to dissolve MCBC, and certain amendments to the Certificate that require approval under applicable law, each as further described and limited by the Certificate. The Certificate also provides that holders of Class A common stock and Class B common stock shall vote together as a single class, on an advisory basis, on any proposal to approve the compensation of MCBC's named executive officers.

Conversion Rights

The Certificate provides for the right of holders of Class A common stock to convert their stock into Class B common stock on a one-for-one basis at any time. The exchangeable shares are exchangeable at any time, at the option of the holder on a one-for-one basis for corresponding shares of Molson Coors common stock.

Class B Common Stock Equity Issuance

On February 3, 2016, we completed an underwritten public offering of our Class B common stock, which increased the number of Class B common shares issued and outstanding by 29.9 million shares and received proceeds of approximately $2.5 billion, net of issuance costs. The proceeds from the issuance were utilized to partially fund the completion of the Acquisition on October 11, 2016. See Note 4, "Acquisition and Investments" for further details.

Share Repurchase Program

On February 10, 2015, we announced that our board of directors approved and authorized a new program to repurchase up to $1.0 billion of our Class A and Class B common stock. The number, price and timing of the repurchases will be at the Company’s sole discretion and will be evaluated depending on market conditions, liquidity needs or other factors. The Company’s board of directors may suspend, modify or terminate the program at any time without prior notice. This repurchase program replaces and supersedes any repurchase programs previously approved by the board of directors. Under Delaware state law, these shares are not retired, and we have the right to resell any of the shares repurchased. Beginning in April 2015, under this program, we entered into accelerated share repurchase agreements (“ASRs”) with a financial institution. In exchange for up-front payments, the financial institution delivered shares of our common stock during the purchase periods of each ASR. The total number of shares ultimately delivered, and therefore the average repurchase price paid per share, was determined at the end of the applicable purchase period of each ASR based on the volume weighted-average price of our common stock during that period. The up-front payments for the treasury stock were accounted for as a reduction to shareholders’ equity in the consolidated balance sheet in the periods the payments are made. We reflected each ASR as a repurchase of common stock in the period delivered for purposes of calculating earnings per share and as forward contracts indexed to our own common stock. Each ASR met all of the applicable criteria for equity classification, and therefore, was not accounted for as a derivative instrument.

During the last three quarters of 2015, we purchased approximately 2 million shares of our Class B common stock under the new program for an aggregate of approximately $150 million. As a result of the Acquisition, we suspended the share repurchase program and thus, there have been no shares of Class A or Class B common stock repurchased in 2016. There were no share repurchases in 2014.

9. Earnings Per Share ("EPS")

Basic EPS was computed using the weighted-average number of shares of common stock outstanding during the period. Diluted EPS includes the additional dilutive effect of our potentially dilutive securities, which include restricted stock units ("RSUs"), deferred stock units ("DSUs"), performance units ("PUs"), performance share units ("PSUs"), stock options and stock-only stock appreciation rights ("SOSARs"). The dilutive effects of our potentially dilutive securities are calculated using the treasury stock method. The following summarizes the effect of dilutive securities on diluted EPS:

	For the years ended
	December 31, 2016				December 31, 2015				December 31, 2014
	(In millions, except per share amounts)
Amounts attributable to Molson Coors Brewing Company:
Net income (loss) from continuing operations	$	1,978.7			$	355.6			$	513.5
Income (loss) from discontinued operations, net of tax	(2.8		)		3.9				0.5
Net income (loss) attributable to Molson Coors Brewing Company	$	1,975.9			$	359.5			$	514.0
Weighted-average shares for basic EPS	212.0				185.3				184.9
Effect of dilutive securities:
RSUs, DSUs, PUs and PSUs	0.8				0.7				0.5
Stock options and SOSARs	0.6				0.4				0.7
Weighted-average shares for diluted EPS	213.4				186.4				186.1
Basic net income (loss) attributable to Molson Coors Brewing Company per share:
From continuing operations	$	9.33			$	1.92			$	2.78
From discontinued operations	(0.01		)		0.02				—
Basic net income (loss) attributable to Molson Coors Brewing Company per share	$	9.32			$	1.94			$	2.78
Diluted net income (loss) attributable to Molson Coors Brewing Company per share:
From continuing operations	$	9.27			$	1.91			$	2.76
From discontinued operations	(0.01		)		0.02				—
Diluted net income (loss) attributable to Molson Coors Brewing Company per share	$	9.26			$	1.93			$	2.76
Dividends declared and paid per share	$	1.64			$	1.64			$	1.48

Our calculation of weighted-average shares includes Class A common stock and Class B common stock, and Class A exchangeable shares and Class B exchangeable shares. All classes of stock have in effect the same dividend rights and share equitably in undistributed earnings. Holders of Class A common stock receive dividends only to the extent dividends are declared and paid to holders of Class B common stock. See Note 8, "Stockholders' Equity" for further discussion of the Class A common stock and Class B common stock and Class A exchangeable shares and Class B exchangeable shares. We have no unvested outstanding equity share awards that contain non-forfeitable rights to dividends.

The following anti-dilutive securities were excluded from the computation of the effect of dilutive securities on diluted earnings per share:

	For the years ended
	December 31, 2016			December 31, 2015			December 31, 2014
	(In millions)
RSUs, stock options and SOSARs	0.1			0.1			—

Class B Common Stock Equity Issuance

On February 3, 2016, we completed an underwritten public offering of our Class B common stock in relation to the Acquisition, which increased the number of Class B common shares issued and outstanding by 29.9 million shares and received proceeds of approximately $2.5 billion, net of issuance costs. See Note 8, "Stockholders' Equity" for further discussion.

Share Repurchase Program

See Note 8, "Stockholders' Equity" for details around our share repurchase program. As a result of the Acquisition, we suspended the share repurchase program and thus, there have been no shares of Class A or Class B common stock repurchased in 2016. During 2015, we purchased a total of approximately 2 million shares of our Class B common stock for approximately $150 million. There were no share repurchases in 2014.

10. Properties

The cost of properties and related accumulated depreciation consists of the following:

	As of
	December 31, 2016(1)				December 31, 2015
	(In millions)
Land and improvements	$	304.7			$	173.1
Buildings and improvements	853.1				457.3
Machinery and equipment	3,513.8				1,654.8
Returnable containers	321.7				228.0
Furniture and fixtures	313.5				224.5
Software	282.7				116.2
Natural resource properties	3.8				3.8
Construction in progress	413.4				123.2
Total properties cost	6,006.7				2,980.9
Less: accumulated depreciation	(1,499.3		)		(1,390.1		)
Properties, net	$	4,507.4			$	1,590.8

(1)	The increase in properties as of December 31, 2016, primarily resulted from the completion of the Acquisition on October 11, 2016. See Note 4, "Acquisition and Investments" for further details.

Depreciation expense was $306.3 million, $284.5 million and $268.4 million in 2016, 2015 and 2014, respectively. Loss and breakage expense related to our returnable containers, included in the depreciation expense amounts noted above, was $33.0 million, $33.3 million and $43.1 million in 2016, 2015 and 2014, respectively, and is classified within cost of goods sold in the consolidated statements of operations. Additionally, the previously mentioned depreciation expense for 2016, 2015 and 2014 includes accelerated depreciation of $12.4 million, $49.4 million and $4.0 million, respectively, associated with brewery and bottling line closures, and is classified within special items in the consolidated statements of operations. See Note 7, "Special Items" for further discussion as well as details around facility closures.

11. Goodwill and Intangible Assets

The following summarizes the changes in goodwill:

	U.S.				Canada				Europe				MCI				Consolidated
					(In millions)
Balance at December 31, 2014	$	—			$	656.5			$	1,528.0			$	7.1			$	2,191.6
Business acquisition and disposition(1)	—				—				(6.7		)		16.9				10.2
Foreign currency translation	—				(105.1		)		(112.6		)		(0.8		)		(218.5		)
Balance at December 31, 2015	$	—			$	551.4			$	1,408.7			$	23.2			$	1,983.3
Business acquisition(1)(2)	6,415.6				—				—				(0.6		)		6,415.0
Impairment related to India reporting unit(3)	—				—				—				(15.7		)		(15.7		)
Foreign currency translation	—				16.2				(148.2		)		(0.5		)		(132.5		)
Balance at December 31, 2016	$	6,415.6			$	567.6			$	1,260.5			$	6.4			$	8,250.1

(1)

The goodwill adjustment for 2016 reflects the final purchase price accounting adjustment associated with the April 1, 2015, acquisition of Mount Shivalik Breweries Ltd ("Mount Shivalik"), a regional brewer in India. As part of the purchase price accounting, goodwill generated in conjunction with this acquisition has been recorded within our MCI segment beginning in the second quarter of 2015, and included within the India reporting unit of our MCI segment for purposes of our annual goodwill impairment testing.

In addition, in July 2015, we sold our U.K. malting facility resulting in an adjustment to the goodwill in our Europe reporting unit based on the proportionate fair value of the disposed business relative to the reporting unit.

(2)	On October 11, 2016, we completed the Acquisition and have estimated preliminary goodwill of approximately $6.4 billion. This goodwill has preliminarily been allocated to our U.S. segment.

(3)	The MCI goodwill impairment loss for 2016 resulted from an interim goodwill impairment assessment for the India reporting unit performed during the second quarter of 2016, triggered by the enactment of total alcohol prohibition in the state of Bihar, India on April 5, 2016.

The following table presents details of our intangible assets, other than goodwill, as of December 31, 2016:

	Useful life		Gross				Accumulated amortization				Net
	(Years)		(In millions)
Intangible assets subject to amortization:
Brands	10 - 50		$	4,876.3			$	(288.2	)		$	4,588.1
License agreements and distribution rights	15 - 28		225.9				(89.4		)		136.5
Other	2 - 40		129.3				(26.4		)		102.9
Intangible assets not subject to amortization:
Brands	Indefinite		8,114.2				—				8,114.2
Distribution networks	Indefinite		752.6				—				752.6
Other	Indefinite		337.6				—				337.6
Total			$	14,435.9			$	(404.0	)		$	14,031.9

The following table presents details of our intangible assets, other than goodwill, as of December 31, 2015:

	Useful life		Gross				Accumulated amortization				Net
	(Years)		(In millions)
Intangible assets subject to amortization:
Brands	3 - 50		$	1,121.8			$	(226.1	)		$	895.7
License agreements and distribution rights	3 - 28		135.1				(87.1		)		48.0
Other	2 - 8		29.9				(28.6		)		1.3
Intangible assets not subject to amortization:
Brands	Indefinite		3,052.2				—				3,052.2
Distribution networks	Indefinite		731.0				—				731.0
Other	Indefinite		17.5				—				17.5
Total			$	5,087.5			$	(341.8	)		$	4,745.7

The changes in the gross carrying amounts of intangibles from December 31, 2015, to December 31, 2016, are primarily driven by the preliminary allocation of fair value to aggregate indefinite and definite-lived intangible assets of approximately $9.9 billion upon completion of the Acquisition. See Note 4, "Acquisition and Investments" for further details. These balances were also impacted by the indefinite-lived brand intangible impairment charge recorded in 2016, and the resulting change in classification of the Molson core brands in Canada from indefinite-lived to definite-lived, subject to amortization as noted below. Additionally, these balances are impacted by changes in foreign exchange rates, as a significant amount of intangibles are denominated in foreign currencies.

Based on foreign exchange rates as of December 31, 2016, and the preliminary allocation of fair value to definite-lived intangible assets, the estimated future amortization expense of intangible assets is as follows:

Year		Amount
		(In millions)
2017		$	214.5
2018		$	212.2
2019		$	211.3
2020		$	210.2
2021		$	204.8

Amortization expense of intangible assets was $82.1 million, $29.9 million, and $44.6 million for the years ended December 31, 2016, December 31, 2015, and December 31, 2014, respectively. This expense is presented within marketing, general and administrative expenses and includes the $4.9 million of accelerated amortization recognized for the write-off of the intangible asset associated with the termination of MMI operations in the first quarter of 2014. See Note 4, "Acquisition and Investments" for further discussion.

We completed our required annual goodwill and indefinite-lived intangible impairment testing as of October 1, 2016, the first day of our fourth quarter, and concluded there were no impairments of goodwill within our Europe, Canada or India reporting units; however, an impairment charge was recorded on the Molson core brand intangible asset in Canada as a result of this review. Outside of the Molson core brands impairment, there were no other impairments of our indefinite-lived intangible assets as a result of the annual review process. However, as further discussed below, we identified a triggering event in our India reporting unit in April 2016, and as a result, completed an interim impairment assessment which resulted in an impairment loss recognized in the second quarter of 2016.

Reporting Units and Goodwill

As of the date of our annual impairment test, performed as of October 1, 2016, the operations in each of the specific regions within our Canada, Europe and MCI segments are considered components based on the availability of discrete financial information and the regular review by segment management. We have concluded that the components within the Canada and Europe segments each meet the criteria as having similar economic characteristics and therefore have aggregated these components into the Canada and Europe reporting units, respectively. Additionally, we determined that the components within

our MCI segment do not meet the criteria for aggregation, and therefore, the operations of our India business constitute a separate reporting unit at the component level.

Our 2016 annual goodwill impairment testing determined that the fair value of our Canada reporting unit declined from the prior year, largely due to continued economic and competitive challenges negatively impacting our business, including sustained challenges facing the Molson core brands as further discussed below. Our Europe reporting unit fair value remained comparable with the prior year, and continues to be considered at risk of failing step one of the goodwill impairment test. Specifically, the fair value of the Europe and Canada reporting units were estimated at approximately 14% and 29% in excess of carrying value, respectively, as of the October 1, 2016, testing date. The excess of the fair value over the carrying value of the Europe reporting unit slightly improved from the prior year. The improvement in the current year was driven by a decrease to the carrying value of the reporting unit versus the prior year, in addition to the fair value of the reporting unit benefiting from improved cost savings estimates and favorable tax rate changes, which positively impacted the forecasted future cash flows for the Europe reporting unit. While the fair value of our Canada reporting unit declined from the prior year, the Canada reporting unit had an increase in the fair value in excess of the carrying value from the prior year primarily due to the impacts of the Molson core brands impairment charge resulting in a reduction to the overall carrying value of the reporting unit. The Canada reporting unit, continued to face challenging market dynamics during the year, including continued performance declines within the Molson core brands, resulting in a reduction of forecasted results in comparison to the prior year, which were slightly off-set by incremental cost savings initiatives included in the current year forecast. Although the fair value in excess of the carrying value has increased for the Canada reporting unit from the October 1, 2015, testing date, the fair value is sensitive to further unfavorable changes in forecasted cash flows, macroeconomic conditions, market multiples or discount rates that could have an adverse impact. The fair value of the India reporting unit approximated its carrying value, as there were no significant changes indicating a reduction in the fair value of the reporting unit since our completion of the interim impairment assessment during the second quarter of 2016. See Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" for further discussion of our determination of reporting units for purposes of goodwill impairment testing.

Indefinite-Lived Intangibles

During the annual impairment testing as of October 1, 2016, we identified a decline in the fair value of the Molson core brand indefinite-lived intangible asset below its carrying value, driven by key factors impacting our underlying assumptions supporting the value of the brands within the Molson portfolio. Specific changes included a continued decline in performance throughout 2016 which drove a downward shift in management's forecasts, a challenging market dynamic and competitive conditions not expected to subside in the near-term, as well as an increased discount rate. As a result, we recorded an aggregate impairment charge to the Molson core brand asset of $495.2 million within special items in the fourth quarter of 2016. The fair value of the Coors Light brand distribution rights continues to be sufficiently in excess of its carrying value as of the testing date.

In conjunction with the Molson core brand impairment during our annual testing, we also reassessed the brand's indefinite-life classification and determined that the Molson core brands had characteristics that indicated a definite-life assignment was more appropriate, including prolonged weakness in consumer demand driven by increased economic and competitive pressures. These factors have resulted in sustained declines in brand performance, and it is unclear when these ongoing pressures on the brands will subside. These brands were therefore reclassified as definite-lived intangible assets with the remaining aggregate fair value of approximately $1.8 billion, which equals the carrying value as of October 1, 2016, to be amortized over their remaining useful lives ranging from 30 to 50 years.

Our Europe indefinite-lived intangibles' fair values, including the Staropramen and Carling brands, continue to be sufficiently in excess of their respective carrying values as of the annual testing date. During 2015 and 2014, we also recognized impairment charges on certain European indefinite-lived brands of $275.0 million and $360.0 million, respectively. These brands were reclassified as definite-lived intangible assets as of September 30, 2015, and are being amortized over their remaining useful lives of 30 to 50 years. Separately, the Coors and Miller indefinite-lived brands in the U.S. were recognized at their fair values upon completion of the Acquisition on October 11, 2016.

We utilized Level 3 fair value measurements in our impairment analysis of our indefinite-lived intangible assets, which utilizes an excess earnings approach to determine the fair values of the assets as of the testing date. The future cash flows used in the analysis are based on internal cash flow projections based on our long range plans and include significant assumptions by management as noted below.

Key Assumptions

As of the date of our annual impairment test, performed as of October 1, the Europe reporting unit goodwill is at risk of future impairment in the event of significant unfavorable changes in the forecasted cash flows (including prolonged, or further weakening of, adverse economic conditions or significant unfavorable changes in tax, environmental or other regulations,

including interpretations thereof), terminal growth rates, market multiples and/or weighted-average cost of capital utilized in the discounted cash flow analyses. For testing purposes, management's best estimates of the expected future results are the primary driver in determining the fair value. Current projections used for our Europe reporting unit testing reflect continued challenging environments in the future followed by growth resulting from a longer term recovery of the macroeconomic environment, as well as the benefit of anticipated cost savings and specific brand-building and innovation activities. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill and indefinite-lived intangible impairment tests will prove to be an accurate prediction of the future. Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of our reporting units and indefinite-lived intangibles may include such items as: (i) a decrease in expected future cash flows, specifically, a decrease in sales volume and increase in costs that could significantly impact our immediate and long-range results, a decrease in sales volume driven by a prolonged weakness in consumer demand or other competitive pressures adversely affecting our long-term volume trends, a continuation of the trend away from core brands in certain of our markets, especially in markets where our core brands represent a significant portion of the market, unfavorable working capital changes and an inability to successfully achieve our cost savings targets, (ii) adverse changes in macroeconomic conditions or an economic recovery that significantly differs from our assumptions in timing and/or degree (such as a recession or worsening of the overall European economy), (iii) volatility in the equity and debt markets or other country specific factors which could result in a higher weighted-average cost of capital, (iv) sensitivity to market multiples; and (v) regulation limiting or banning the manufacturing, distribution or sale of alcoholic beverages.

Based on known facts and circumstances, we evaluate and consider recent events and uncertain items, as well as related potential implications, as part of our annual assessment and incorporate into the analyses as appropriate. These facts and circumstances are subject to change and may impact future analyses.

While historical performance and current expectations have resulted in fair values of our reporting units and indefinite-lived intangible assets in excess of carrying values, if our assumptions are not realized, it is possible that an impairment charge may need to be recorded in the future.

Definite-Lived Intangibles

Regarding definite-lived intangibles, we continuously monitor the performance of the underlying asset for potential triggering events suggesting an impairment review should be performed. Excluding the definite-lived intangible asset impairment charge associated with the triggering event which occurred in Bihar, India further discussed below, no such triggering events were identified in 2016. In addition, no such triggering events were identified in 2015 or 2014, with the exception of the license agreement litigation settlement with Miller in Canada, which resulted in $8.9 million of impairment charges of our definite-lived intangible asset in 2014.

India Triggering Event and Interim Impairment Assessment

In the fourth quarter of 2015, a newly elected government in the state of Bihar, India announced plans to ban the sale of "country" liquor and to limit the sale of other forms of alcohol, such as beer, to certain government owned outlets, effective April 1, 2016. On April 5, 2016, four days after the start of the ban on "country" liquor, the government of the state of Bihar announced immediate changes to the ban, implementing a complete prohibition of the sale and consumption of all forms of alcohol. Due to this triggering event, and as the expected length of the prohibition was unclear and was expected to remain in effect for the foreseeable future, we performed an interim impairment assessment for the impacted tangible assets, intangible assets and the India reporting unit goodwill. Specifically, upon identification of the triggering event we completed step one of the goodwill impairment test comparing the fair value of the India reporting unit to its carrying value using a combination of discounted cash flow analyses and market approaches, which resulted in the need to complete step two. Upon completion of step two, we recorded an impairment of tangible assets of $11.0 million and impairment of goodwill and definite-lived intangibles of $19.8 million within special items during the second quarter of 2016. The remaining goodwill attributable to the India reporting unit of $6.4 million, based on foreign exchange rates at December 31, 2016, is associated with cash flows in other states in India, where alcohol sales are not prohibited. We continue to monitor legal proceedings impacting the regulatory environment as it relates to our ability to resume operations in the state. In addition, if the facts or circumstances associated with the expected collectibility of certain Bihar receivables due from the government of approximately $6 million, based on foreign exchange rates at December 31, 2016, adversely change or if future cash flows are adversely impacted relative to the projected cash flows used in the impairment analysis, we may incur additional impairment or other losses in future periods.

12. Debt

Debt Obligations

Our total borrowings as of December 31, 2016, and December 31, 2015, were comprised of the following:

	As of
	December 31, 2016				December 31, 2015
	(In millions)
Senior notes:
CAD 500 million 3.95% Series A notes due 2017(1)	$	372.0			$	361.3
CAD 400 million 2.25% notes due 2018(2)	297.6				289.0
CAD 500 million 2.75% notes due 2020(2)	372.0				361.3
CAD 500 million 2.84% notes due 2023(3)	372.0				—
CAD 500 million 3.44% notes due 2026(3)	372.0				—
$300 million 2.0% notes due 2017(4)	300.2				300.6
$500 million 1.45% notes due 2019(3)	500.0				—
$1.0 billion 2.10% notes due 2021(3)	1,000.0				—
$500 million 3.5% notes due 2022(4)	515.0				517.8
$2.0 billion 3.0% notes due 2026(3)	2,000.0				—
$1.1 billion 5.0% notes due 2042(4)	1,100.0				1,100.0
$1.8 billion 4.2% notes due 2046(3)	1,800.0				—
EUR 800 million 1.25% notes due 2024(3)	841.4				—
Term loan due 2019(5)	800.0				—
Term loan due 2021(5)	1,500.0				—
Other long-term debt	2.2				—
Less: unamortized debt discounts and debt issuance costs	(85.0		)		(21.3		)
Total long-term debt (including current portion)	12,059.4				2,908.7
Less: current portion of long-term debt	(671.7		)		—
Total long-term debt	$	11,387.7			$	2,908.7
Short-term borrowings:
Cash pool overdrafts(6)	$	2.6			$	18.7
Short-term facilities(7)	7.0				7.5
Other short-term borrowings	3.5				2.5
Current portion of long-term debt	671.7				—
Current portion of long-term debt and short-term borrowings	$	684.8			$	28.7

(1)

During the fourth quarter of 2010, Molson Coors International LP completed a CAD 500 million private placement in Canada due October 6, 2017. Prior to issuing the bond, we entered into forward starting interest rate transactions for a portion of the Canadian offering. The bond forward transactions effectively established, in advance, the yield of the government of Canada bond rate over which the Company's private placement was priced. At the time of the private placement offering and pricing, the government of Canada bond rates were trading at a yield lower than that locked in with the Company's interest rate locks. This resulted in a loss on the bond forward transactions of $7.8 million which is being amortized over the term of the Canadian issued private placement and increases our effective cost of borrowing compared to the stated coupon rates by 0.23%.

(2)

On September 18, 2015, Molson Coors International, LP issued CAD 500 million 2.75% notes due September 18, 2020 ("CAD 500 million notes"), and CAD 400 million 2.25% notes due September 18, 2018 ("CAD 400 million notes", and together with the CAD 500 million notes, the "2015 Notes"). Prior to issuing the 2015 Notes, we entered into forward starting interest rate swap agreements to hedge the interest rate volatility on CAD 600 million of the 2015 Notes beginning in the second quarter of 2014. At the time of the issuance of the 2015 Notes, the government of

Canada bond rates were trading at a yield lower than that locked in by the interest rate swaps, resulting in an aggregate realized loss of CAD 39.2 million ($29.5 million at settlement), which was recorded in other comprehensive income. A portion of this loss is being amortized into interest expense over the 5-year and 3-year terms of the respective 2015 Notes and will increase our effective cost of borrowing compared to the stated coupon rates by 0.65% on the CAD 500 million notes and 0.16% on the CAD 400 million notes. The remaining portion of the loss will be amortized on future debt issuances covering the full 10-year term of the interest rate swap agreements. The cash payment associated with the settlement of the forward starting interest rate swap agreements was recorded as an operating outflow within the other assets and liabilities line item on the consolidated statement of cash flows. See Note 16, "Derivative Instruments and Hedging Activities" for further details on the forward starting interest rate swaps.

(3)

On July 7, 2016, MCBC issued approximately $5.3 billion senior notes with portions maturing from July 15, 2019, through July 15, 2046 ("USD Notes"), and EUR 800.0 million senior notes maturing July 15, 2024 ("EUR Notes"), and Molson Coors International L.P., a Delaware limited partnership and wholly-owned subsidiary of MCBC ("Molson Coors International LP"), completed a private placement of CAD 1.0 billion senior notes maturing July 15, 2023, and July 15, 2026 ("CAD Notes"), in order to partially fund the financing of the Acquisition (USD Notes, EUR Notes and CAD notes, collectively, the "2016 Notes"). These issuances resulted in total proceeds of approximately $6.9 billion, net of underwriting fees and discounts of $36.5 million and $17.7 million, respectively. Total debt issuance costs capitalized in connection with these notes including underwriting fees, discounts and other financing related costs, were approximately $65 million and are being amortized over the respective terms of the 2016 Notes. The 2016 Notes began accruing interest upon issuance, with semi-annual payments due on the USD Notes and CAD Notes in January and July beginning in 2017, and annual interest payments due on the EUR Notes in July beginning in 2017.

Prior to issuing the EUR Notes and the CAD Notes, we entered into foreign currency forward agreements to economically hedge the foreign currency exposure of a portion of the respective notes, which were subsequently settled on July 7, 2016, concurrent with the issuance of the 2016 Notes. Additionally, upon issuance we designated the EUR Notes as a net investment hedge of our Europe business. See Note 16, "Derivative Instruments and Hedging Activities" for further details.

In order to maximize the yield on the cash received from the issuance of the 2016 Notes and the February 3, 2016, equity issuance, while maintaining the ability to readily access these funds, MCBC strategically invested the proceeds in various fixed rate deposit and money market accounts with terms of three months or less in anticipation of the Acquisition. Accordingly, we recorded interest income of $19.0 million for year ended December 31, 2016, within interest income (expense). The proceeds from our 2016 Notes and February 3, 2016, equity issuance were used to partially fund the Acquisition on October 11, 2016.

(4)

On May 3, 2012, we issued approximately $1.9 billion of senior notes with portions maturing in 2017, 2022 and 2042. The 2017 senior notes were issued in an initial aggregate principal amount of $300 million at 2.0% interest and will mature on May 1, 2017 ("$300 million notes"). The 2022 senior notes were issued in an initial aggregate principal amount of $500 million at 3.5% interest and will mature on May 1, 2022 ("$500 million notes"). The 2042 senior notes were issued in an initial aggregate principal amount of $1.1 billion at 5.0% interest and will mature on May 1, 2042. The issuance resulted in total proceeds to us, before expenses, of approximately $1.9 billion, net of underwriting fees and discounts of $14.7 million and $4.6 million, respectively. Total debt issuance costs capitalized in connection with these senior notes, including the underwriting fees and discounts, were approximately $18.0 million and are being amortized over the term of the notes.

In the first quarter of 2015, we entered into interest rate swaps to economically convert our fixed rate $300 million notes to floating rate debt consistent with the interest rate swaps on our $500 million notes entered into during 2014. As a result of these hedge programs, the changes in fair value of the interest rate swaps and the offsetting changes in the fair value of our $300 million and $500 million notes attributable to the benchmark interest rate were recorded as unrealized positions in interest expense in our consolidated statement of operations. As a result of fair value hedge accounting, the carrying value of the $300 million and $500 million notes include an adjustment for the change in fair value. During the fourth quarter of 2015, we settled these interest rate swaps, at which time we ceased adjusting the carrying value of the related $300 million and $500 million notes for the fair value movements of these swaps. At the time of termination, cumulative adjustments to the carrying value of the notes were $0.7 million and $18.1 million representing the cash inflows upon termination related to the $300 million and $500 million notes, respectively. Beginning in the fourth quarter of 2015, we began amortizing these cumulative adjustments to interest expense over the remaining term of each respective note and will accordingly decrease the annual effective interest rate for the $300 million and $500 million notes for the remaining term of the notes by 0.16% and 0.56%, respectively. The impact of these swaps including amortization resulted in an effective interest rate on the $300 million and $500 million notes of

0.95% and 1.57%, respectively, for 2015. The fair value adjustments and subsequent amortization have been excluded from the aggregate principal debt maturities table presented below.

In the first quarter of 2015, we also entered into a cross currency swap with a total notional of EUR 265 million ($300 million upon execution) in order to hedge a portion of the foreign currency translational impacts of our European investment. As a result of this cross currency swap and the above mentioned interest rate swaps, we economically converted the $300 million and associated interest to a floating rate EUR denomination. During the fourth quarter of 2015, we voluntarily cash settled the EUR 265 million notional cross currency swap associated with the $300 million notes simultaneously with the voluntary settlement of the interest rate swaps discussed previously resulting in a separate cash inflow of $16.0 million. See Note 16, "Derivative Instruments and Hedging Activities" for further details.

(5)

In anticipation of the Acquisition, we entered into a term loan agreement during the fourth quarter of 2015, as further discussed below. On October 11, 2016, in connection with the closing of the Acquisition, we borrowed $1.0 billion under the 3-year tranche and $1.5 billion under the 5-year tranche, for an aggregate principal amount of $2.5 billion. Total debt issuance costs capitalized in connection with these term loans were $8.7 million and are being amortized to interest expense over each tranche's respective terms. We bear monthly interest on these term loans at the rate of 1.50% + 1-month LIBOR. The proceeds were used to partially fund the Acquisition and no additional amounts are available for borrowing under the term loan agreement. Additionally, during the fourth quarter of 2016, we made principal payments on our $1.0 billion 3-year tranche of $200.0 million and accordingly accelerated the related amortization. As of December 31, 2015, there were no outstanding borrowings on the term loan. For the years ended December 31, 2016 and December 31, 2015, $6.7 million and $0.1 million, respectively, was recorded to interest expense related to amortization of issuance and other financing costs associated with the term loan, including the accelerated amortization noted above of $0.6 million.

(6)	As of December 31, 2016, we had $2.6 million in bank overdrafts and $18.0 million in bank cash related to our cross-border, cross-currency cash pool for a net positive position of $15.4 million. As of December 31, 2015, we had $18.7 million in bank overdrafts and $39.6 million in bank cash related to our cross-border, cross-currency cash pool for a net positive position of $20.9 million.

(7)

We had total outstanding borrowings of $7.0 million and $7.5 million under our two JPY overdraft facilities as of December 31, 2016, and December 31, 2015, respectively. We had no outstanding borrowings under our CAD or GBP facilities as of December 31, 2016, or December 31, 2015. A summary of our short-term facility availability is presented below. See Note 18, "Commitments and Contingencies" for further discussion related to letters of credit.

- JPY 900 million overdraft facility at Japan base rate + 0.45%

- JPY 500 million overdraft facility at Japan base rate + 0.35%

- CAD 30.0 million line of credit at USD Prime or CAD Prime depending on the borrowing currency

- GBP 20.0 million line of credit consisting of a GBP 10 million overdraft facility at GBP LIBOR +1.5% and

- GBP 10 million uncommitted money market facility

Debt Fair Value Measurements

We utilize market approaches to estimate the fair value of certain outstanding borrowings by discounting anticipated future cash flows derived from the contractual terms of the obligations and observable market interest and foreign exchange rates. As of December 31, 2016, and December 31, 2015, the fair value of our outstanding long-term debt (including current portion of long-term debt) was approximately $12.0 billion and $2.9 billion, respectively. All senior notes are valued based on significant observable inputs and classified as Level 2 in the fair value hierarchy. The carrying values of all other outstanding long-term borrowings and our short-term borrowings approximate their fair values and are also classified as Level 2 in the fair value hierarchy.

Acquisition Bridge Financing

In connection with the Acquisition announced during the fourth quarter of 2015, we entered into a 364-day bridge loan agreement and term loan agreement by and among the Company, the lenders party thereto, and Citibank, N.A., as Administrative Agent. The bridge loan agreement provided for a 364-day bridge loan facility of up to approximately $9.3 billion, which was subsequently reduced to approximately $6.8 billion as a result of the net proceeds received from our equity offering in the first quarter of 2016. The term loan agreement provided for total term loan commitments of $1.5 billion in a 3-year tranche and $1.5 billion in a 5-year tranche, for an aggregate principal amount of $3.0 billion. The bridge loan and term loan agreements provided for an aggregate commitment of $12.3 billion consistent with our anticipated permanent financing needs related to the Acquisition.

The bridge loan was subsequently terminated on July 7, 2016, after the issuance of the 2016 Notes discussed above, and we accelerated the remaining unamortized fees of $24.8 million associated with the bridge loan to other income (expense) during the third quarter of 2016. We did not borrow any amounts under the bridge loan during 2015 or 2016, and no payments were due as a result of such termination. Additionally, all related financing fees ceased upon termination of the bridge loan. See Note 4, "Acquisition and Investments" for further details regarding the financing of the Acquisition. During the years ended December 31, 2016 and December 31, 2015, $63.4 million and $6.9 million, respectively, was recorded to other income (expense) related to amortization of commitment fees as well as other financing costs associated with the bridge loan. The term loan was subsequently funded concurrent with the close of the Acquisition as discussed above.

Other

As of December 31, 2016, and December 31, 2015, we had $750 million available to draw under our $750 million revolving multi-currency credit facility, as there were no outstanding borrowings on the revolving credit facility nor was there any outstanding commercial paper. As part of our anticipated financing for the Acquisition, we amended our $750 million revolving multi-currency credit facility during the fourth quarter of 2015, which became effective following the completion of the Acquisition on October 11, 2016, to increase the maximum leverage ratio to 5.75x debt to earnings before interest expense, tax expense, depreciation and amortization ("EBITDA") with a decline to 3.75x debt to EBITDA in the fourth year following the closing of the Acquisition.

Under the terms of each of our debt facilities, we must comply with certain restrictions. These include restrictions on priority indebtedness (certain threshold percentages of secured consolidated net tangible assets), leverage thresholds, liens, and restrictions on certain types of sale lease-back transactions and transfers of assets. As of December 31, 2016, and December 31, 2015, we were in compliance with all of these restrictions and have met all debt payment obligations. The restrictions related to our 2016 Notes and term loans are substantially similar to those of our other outstanding senior notes as of December 31, 2016, which all rank pari-passu.

As of December 31, 2016, the aggregate principal debt maturities of long-term debt and short-term borrowings, based on foreign exchange rates at December 31, 2016, for the next five years are as follows:

Year		Amount
		(In millions)
2017		$	685.3
2018		297.6
2019		1,300.0
2020		372.0
2021		2,500.0
Thereafter		6,987.4
Total		$	12,142.3

Interest

Interest incurred, capitalized and expensed were as follows:

	For the years ended
	December 31, 2016				December 31, 2015				December 31, 2014
	(In millions)
Interest incurred	$	272.2			$	121.1			$	147.7
Interest capitalized	(0.6		)		(0.8		)		(2.7		)
Interest expensed	$	271.6			$	120.3			$	145.0

13. Share-Based Payments

We have one share-based compensation plan, the MCBC Incentive Compensation Plan (the "Incentive Compensation Plan"), as of December 31, 2016, and all outstanding awards fall under this plan.

Molson Coors Brewing Company Incentive Compensation Plan

We issue the following types of awards related to shares of Class B common stock to certain directors, officers, and other eligible employees, pursuant to the Incentive Compensation Plan: RSUs, DSUs, PUs, PSUs, and stock options.

RSU awards are issued at the market value equal to the price of our stock at the date of the grant and vest over a period of three years. In 2016, 2015 and 2014, we granted 0.2 million, 0.2 million and 0.3 million RSUs, respectively, with a weighted-average market value of $92.95, $71.45 and $57.84 each, respectively. Prior to vesting, RSUs have no voting rights.

DSU awards, under the Directors' Stock Plan pursuant to the Incentive Compensation Plan, are elections made by non-employee directors of MCBC that enable them to receive all or one-half of their annual cash retainer payments in our stock. The deferred stock unit awards are issued at the market value equal to the closing price on the date of the grant. The DSUs are paid in shares of stock upon termination of service. Prior to vesting, DSUs have no voting rights. In 2016, 2015 and 2014, we granted a small number of DSUs with a weighted-average market value of $100.60, $79.34 and $69.78 per share, respectively.

PUs were previously granted based on a target value established at the date of grant based on achievement of specified adjusted earnings per share targets, and vested upon completion of a service requirement. The PU award value could be settled in cash or shares, or partly in cash and partly in shares, at the discretion of the Company and the awards were accounted for as liabilities, resulting in variable compensation expense. There were no PUs granted in 2016, 2015 or 2014 and all outstanding PUs fully vested in 2015. The total share-based liabilities settled for PUs vested during 2015 and 2014 were $1.5 million and $2.8 million, respectively.

As part of our annual grant in the first quarter of 2016, 2015 and 2014 we granted PSUs, rather than PUs that we had historically granted, for performance awards. PSUs are granted with a target value established at the date of grant and vest upon completion of a service requirement. The settlement amount of the PSUs is determined based on market and performance metrics, which include our total shareholder return performance relative to the S&P 500 and specified internal performance metrics designed to drive greater shareholder return. PSU compensation expense is based on a fair value assigned to the market metric upon grant using a Monte Carlo model, which will remain constant throughout the vesting period of three years, and a performance multiplier, which will vary due to changing estimates of the performance metric condition. During 2016, 2015 and 2014, we granted 0.1 million, 0.1 million and 0.2 million PSUs, respectively, each with a weighted-average fair value of $90.49, $74.42 and $58.69, respectively.

Stock options are granted with an exercise price equal to the market value of a share of Class B common stock on the date of grant. Stock options have a term of ten years and generally vest over three years. During 2016, 2015 and 2014, we granted 0.1 million, 0.1 million and 0.2 million options, respectively, each with a weighted-average fair value of $16.65, $13.98 and $12.78, respectively.

In connection with the Acquisition, MCBC issued replacement awards to various MillerCoors employees who had awards outstanding under the historical MillerCoors share-based compensation plan consisting of 0.5 million stock options with a weighted-average fair value of $42.21 per share, 0.4 million RSUs with a weighted-average market value of $107.91 per share, and 0.1 million PSUs with a weighted-average fair value of $106.17 per share. The terms and fair values of these awards were substantially the same as the replaced MillerCoors awards. 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. The remaining fair value of the replacement awards associated with post-Acquisition service is being recognized as an expense on a straight-line basis over the remaining vesting period of the awards. The fair values of the replacement stock options were estimated using a binomial lattice valuation model due to their various in-the-money levels and remaining terms.

The following table summarizes share-based compensation expense and includes share-based compensation related to pre-existing MCBC equity awards held by former MCBC employees who transferred to MillerCoors (for the year ended December 31, 2016, this includes the period from January 1, 2016, through October 10, 2016):

	For the years ended
	December 31, 2016				December 31, 2015				December 31, 2014
	(In millions)
Pretax compensation expense	$	32.3			$	20.7			$	23.5
Tax benefit	(10.0		)		(5.6		)		(7.0		)
After-tax compensation expense	$	22.3			$	15.1			$	16.5

As of December 31, 2016, there was $69.3 million of total unrecognized compensation cost from all share-based compensation arrangements granted under the Incentive Compensation Plan, related to unvested awards. Included within unrecognized compensation expense is $36.3 million associated with the MillerCoors replacement awards previously described. This total compensation expense is expected to be recognized over a weighted-average period of 1.8 years.

The following table represents non-vested RSUs, DSUs, and PSUs as of December 31, 2016, and the activity during 2016:

	RSUs and DSUs				PSUs
	Units		Weighted-average grant date fair value per unit		Units		Weighted-average grant date fair value per unit
	(In millions, except per unit amounts)
Non-vested as of December 31, 2015	0.6		$56.23		0.5		$57.01
Granted	0.2		$93.13		0.1		$90.49
Replacement awards issued	0.4		$107.91		0.1		$106.17
Vested	(0.3)		$51.35		(0.2)		$44.71
Forfeited	(0.1)		$82.91		—		$—
Non-vested as of December 31, 2016	0.8		$87.01		0.5		$81.67

The weighted-average fair value per unit for the non-vested PSUs is $129.00 as of December 31, 2016.

The total intrinsic values of RSUs and DSUs vested during 2016, 2015 and 2014 were $21.8 million, $17.5 million and $12.9 million, respectively.

The following table represents the summary of options and SOSARs outstanding as of December 31, 2016, and the activity during 2016:

	Awards outstanding
	Awards		Weighted- average exercise price		Weighted- average remaining contractual life (years)		Aggregate intrinsic value
	(In millions, except per share amounts and years)
Outstanding as of December 31, 2015	1.3		$49.49		4.8		$	58.0
Granted	0.1		$92.04
Replacement awards issued	0.5		$70.05
Exercised	(0.4)		$47.70
Forfeited	—		$—
Outstanding as of December 31, 2016	1.5		$59.79		5.4		$	58.2
Expected to vest	0.4		$78.97		8.5		$	7.3
Exercisable at December 31, 2016	1.1		$52.97		4.3		$	50.8

The total intrinsic values of stock options exercised during 2016, 2015 and 2014 were $17.7 million, $34.1 million and $30.9 million, respectively. During 2016, 2015 and 2014, cash received from stock options exercises was $11.2 million, $34.6

million and $44.4 million, respectively, and total tax benefits realized, including excess tax benefits, from share-based awards vested or exercised was $15.1 million, $15.6 million and $13.0 million, respectively.

The shares of Class B common stock to be issued under the stock option plans are made available from authorized and unissued MCBC Class B common stock. As of December 31, 2016, there were 5.4 million shares of MCBC Class B common stock available for the issuance under the Incentive Compensation Plan.

The fair value of each option granted in 2016, 2015 and 2014 was determined on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	For the years ended
	December 31, 2016		December 31, 2015		December 31, 2014
Risk-free interest rate	1.40%		1.70%		2.29%
Dividend yield	1.81%		2.20%		2.57%
Volatility range	23.16% - 24.64%		21.65% - 29.90%		22.66% - 26.57%
Weighted-average volatility	23.53%		23.71%		25.59%
Expected term (years)	5.2		5.7		7.5
Weighted-average fair value	$16.65		$13.98		$12.78

The risk-free interest rates utilized for periods throughout the contractual life of the stock options are based on a zero-coupon U.S. Treasury security yield at the time of grant. Expected volatility is based on a combination of historical and implied volatility of our stock. The expected term of stock options is estimated based upon observations of historical employee option exercise patterns and trends of those employees granted options in the respective year.

The fair value of the market metric for each PSU granted in 2016, 2015 and 2014 was determined on the date of grant using a Monte Carlo model to simulate total stockholder return for MCBC and peer companies with the following weighted-average assumptions:

	For the years ended
	December 31, 2016		December 31, 2015		December 31, 2014
Risk-free interest rate	1.04%		1.06%		0.72%
Dividend yield	1.81%		2.20%		2.57%
Volatility range	14.10% - 77.11%		12.73% - 62.28%		12.45% - 72.41%
Weighted-average volatility	23.68%		21.53%		21.72%
Expected term (years)	2.8		2.8		2.8
Weighted-average fair market value	$90.49		$74.42		$58.69

The risk-free interest rates utilized for periods throughout the expected term of the PSUs are based on a zero-coupon U.S. Treasury security yield at the time of grant. Expected volatility is based on historical volatility of our stock as well as the stock of our peer firms, as shown within the volatility range above, for a period from the grant date consistent with the expected term. The expected term of PSUs is calculated based on the grant date to the end of the performance period.

14. Accumulated Other Comprehensive Income (Loss)

	MCBC shareholders
	Foreign currency translation adjustments				Gain (loss) on derivative instruments				Pension and Postretirement Benefit adjustments				Equity Method Investments				Accumulated other comprehensive income (loss)
	(In millions)
As of December 31, 2013	$	979.1			$	14.6			$	(556.3	)		$	(282.5	)		$	154.9
Foreign currency translation adjustments	(818.0		)		(8.9		)		8.4				—				(818.5		)
Unrealized gain (loss) on derivative instruments	—				3.8				—				—				3.8
Reclassification of derivative (gain) loss to income	—				3.8				—				—				3.8
Pension and other postretirement benefit adjustments	—				—				(172.3		)		—				(172.3		)
Amortization of net prior service (benefit) cost and net actuarial (gain) loss to income	—				—				33.0				—				33.0
Ownership share of unconsolidated subsidiaries' other comprehensive income (loss)	—				—				—				(157.5		)		(157.5		)
Tax benefit (expense)	(31.3		)		1.7				28.7				55.3				54.4
As of December 31, 2014	$	129.8			$	15.0			$	(658.5	)		$	(384.7	)		$	(898.4	)
Foreign currency translation adjustments	(830.4		)		(16.0		)		(1.7		)		—				(848.1		)
Unrealized gain (loss) on derivative instruments	—				23.0				—				—				23.0
Reclassification of derivative (gain) loss to income	—				(7.1		)		—				—				(7.1		)
Pension and other postretirement benefit adjustments	—				—				42.0				—				42.0
Amortization of net prior service (benefit) cost and net actuarial (gain) loss to income	—				—				46.9				—				46.9
Ownership share of unconsolidated subsidiaries' other comprehensive income (loss)	—				—				—				56.5				56.5
Tax benefit (expense)	(69.3		)		(0.4		)		(17.8		)		(22.2		)		(109.7		)
As of December 31, 2015	$	(769.9	)		$	14.5			$	(589.1	)		$	(350.4	)		$	(1,694.9	)
Foreign currency translation adjustments	(227.4		)		—				(7.3		)		—				(234.7		)
Unrealized gain (loss) on derivative and non-derivative instruments	—				20.0				—				—				20.0
Reclassification of derivative (gain) loss to income	—				(3.4		)		—				—				(3.4		)
Pension and other postretirement benefit adjustments	—				—				75.1				—				75.1
Amortization of net prior service (benefit) cost and net actuarial (gain) loss to income	—				—				39.8				—				39.8
Reclassification of historical share of MillerCoors' AOCI loss to income(1)	—				—				—				458.3				458.3
Ownership share of unconsolidated subsidiaries' other comprehensive income (loss)(1)	—				—				—				36.8				36.8
Tax benefit (expense)(1)	3.2				(9.9		)		(21.2		)		(214.6		)		(242.5		)
As of December 31, 2016	$	(994.1	)		$	21.2			$	(502.7	)		$	(69.9	)		$	(1,545.5	)

(1)

Upon completion of the Acquisition on October 11, 2016, we recorded a loss of $458.3 million within special items, net upon reclassification of our accumulated other comprehensive loss related to our historical 42% interest in MillerCoors. The associated income tax benefit of $200.1 million was also reclassified and recorded as a component of the income tax benefit (expense) line item on the consolidated statement of operations. See Note 4, "Acquisition and Investments" for further details. The remaining AOCI of our equity method investments is related to changes to BRI and BDL pension obligations.

We have significant levels of net assets denominated in currencies other than the USD due to our operations in foreign countries, and therefore we recognize OCI gains and/or losses when those items are translated to USD. The foreign currency translation losses recognized during 2016 are due to the weakening of the GBP and other currencies of our Europe operations versus the USD partially offset by slight strengthening of the CAD versus the USD. The foreign currency translation losses recognized during 2015 and 2014 are due to the weakening of the CAD, GBP and other currencies of our Europe operations versus the USD.

Reclassifications from AOCI to income:

		For the years ended
		December 31, 2016				December 31, 2015				December 31, 2014
		Reclassifications from AOCI												Location of gain (loss) recognized in income
		(In millions)
Gain/(loss) on cash flow hedges:
Forward starting interest rate swaps		$	(3.8	)		$	(2.0	)		$	(1.5	)		Interest expense, net
Foreign currency forwards		(7.2		)		(11.9		)		(5.5		)		Other income (expense), net
Foreign currency forwards		14.4				21.0				2.8				Cost of goods sold
Commodity swaps		—				—				0.4				Cost of goods sold
Total income (loss) reclassified, before tax		3.4				7.1				(3.8		)
Income tax benefit (expense)		(0.4		)		(1.7		)		1.5
Net income (loss) reclassified, net of tax		$	3.0			$	5.4			$	(2.3	)
Amortization of defined benefit pension and other postretirement benefit plan items:
Prior service benefit (cost)		$	(0.6	)		$	(0.3	)		$	2.4			(1)
Net actuarial gain (loss)		(39.2		)		(46.6		)		(35.4		)		(1)
Total income (loss) reclassified, before tax		(39.8		)		(46.9		)		(33.0		)
Income tax benefit (expense)		8.4				9.4				6.8
Net income (loss) reclassified, net of tax		$	(31.4	)		$	(37.5	)		$	(26.2	)
Reclassification of historical share of MillerCoors' AOCI loss:
Historical share of MillerCoors' AOCI loss		$	(458.3	)		$	—			$	—			(2)
Income tax benefit (expense)		200.1				—				—
Net income (loss) reclassified, net of tax		$	(258.2	)		$	—			$	—
Total income (loss) reclassified, net of tax		$	(286.6	)		$	(32.1	)		$	(28.5	)

(1)	These components of AOCI are included in the computation of net periodic pension and other postretirement benefit cost. See Note 15, "Employee Retirement Plans and Postretirement Benefits" for additional details.

(2)	Upon completion of the Acquisition on October 11, 2016, we recorded a loss within special items, net upon reclassification of our accumulated other comprehensive loss related to our historical 42% interest in MillerCoors. See Note 4, "Acquisition and Investments" for further details.

15. Employee Retirement Plans and Postretirement Benefits

We maintain retirement plans for the majority of our employees. Depending on the benefit program, we provide either defined benefit pension or defined contribution plans to our employees in each of our segments. Each plan is managed locally and in accordance with respective local laws and regulations. We have defined benefit pension plans in the U.S. (MillerCoors), U.K., Canada and Japan. All retirement plans for MCBC Corporate employees in the U.S. are defined contribution pension plans. Additionally, we offer OPEB plans to a portion of our Canadian, U.S. (MillerCoors and Corporate) and Central European employees; these plans are not funded. BRI and BDL maintain defined benefit, defined contribution and postretirement benefit plans as well; however, those plans are excluded from this disclosure as BRI and BDL are equity method investments and not consolidated.

MillerCoors participates in and makes contributions to multi-employer pension plans. Contributions to multi-employer pension plans were $1.2 million for the post-Acquisition period of October 11, 2016, through December 31, 2016. Additionally, MillerCoors' postretirement health plan qualifies for the federal subsidy under the Medicare Prescription Drug Improvement and Modernization Act of 2003 (“the Act”) because the prescription drug benefits provided under the Company's postretirement

health plan for Medicare eligible retirees generally require lower premiums from covered retirees and have lower co-payments and deductibles than the benefits provided in Medicare Part D and, accordingly, are actuarially equivalent to or better than the benefits provided under the Act. The benefits paid, including prescription drugs, were $9.0 million for the post-Acquisition period of October 11, 2016, through December 31, 2016. Subsidies of $0.1 million for the post-Acquisition period of October 11, 2016, through December 31, 2016, were received.

As described in Note 1, "Basis of Presentation and Summary of Significant Accounting Policies", prior to October 11, 2016, MCBC's 42% share of MillerCoors was accounted for under the equity method of accounting, and, therefore, its results of operations, including MillerCoors' pension and OPEB expenses, were reported as equity income in MillerCoors in the consolidated statements of operations and MCBC's 42% share of MillerCoors' net assets, including MillerCoors' pension and OPEB liabilities, was reported as investment in MillerCoors in the consolidated balance sheets and, therefore, the historical MillerCoors pension and OPEB plan information was not included in this disclosure. As a result of the Acquisition, MillerCoors' results of operations became fully consolidated by MCBC, and, therefore, for the year ended December 31, 2016, the consolidated statement of operations includes MillerCoors' pension and OPEB expenses attributable to the period from October 11, 2016, to December 31, 2016, and the consolidated balance sheet as of December 31, 2016, includes MillerCoors' pension and OPEB liabilities. MillerCoors' pension and OPEB plans were recorded at fair value upon close of the Acquisition.

Defined Benefit and OPEB Plans

Net Periodic Pension and OPEB Cost

	For the years ended
	December 31, 2016												December 31, 2015												December 31, 2014
	Pension				OPEB				Consolidated				Pension				OPEB				Consolidated				Pension				OPEB				Consolidated
	(In millions)
Components of net periodic pension and OPEB cost:
Service cost—benefits earned during the year	$	7.6			$	4.1			$	11.7			$	9.5			$	1.8			$	11.3			$	13.1			$	3.0			$	16.1
Interest cost on projected benefit obligation	146.4				10.9				157.3				137.5				6.0				143.5				167.6				7.1				174.7
Expected return on plan assets	(183.4		)		—				(183.4		)		(175.8		)		—				(175.8		)		(195.6		)		—				(195.6		)
Amortization of prior service cost (benefit)	0.7				(0.1		)		0.6				0.6				(0.3		)		0.3				0.6				(3.0		)		(2.4		)
Amortization of net actuarial loss (gain)	30.2				—				30.2				46.9				(0.3		)		46.6				36.3				(0.9		)		35.4
Curtailment and settlement loss	9.0				—				9.0				(1.0		)		—				(1.0		)		—				—				—
Less: expected participant contributions	(0.5		)		—				(0.5		)		(2.4		)		—				(2.4		)		(1.0		)		—				(1.0		)
Net periodic pension and OPEB cost	$	10.0			$	14.9			$	24.9			$	15.3			$	7.2			$	22.5			$	21.0			$	6.2			$	27.2

Obligations and Changes in Funded Status

The changes in the benefit obligation, plan assets and the funded status of the pension and OPEB plans are as follows:

	For the year ended December 31, 2016												For the year ended December 31, 2015
	Pension				OPEB				Consolidated				Pension				OPEB				Consolidated
	(In millions)
Change in benefit obligation:
Prior year benefit obligation	$	3,500.0			$	136.1			$	3,636.1			$	3,979.3			$	162.2			$	4,141.5
Pension and postretirement benefit obligations assumed in Acquisition	3,045.8				734.4				3,780.2				—				—				—
Service cost, net of expected employee contributions	7.1				4.1				11.2				8.9				1.8				10.7
Interest cost	146.4				10.9				157.3				137.5				6.0				143.5
Actual employee contributions	0.5				—				0.5				0.5				—				0.5
Actuarial loss (gain)	139.2				(38.7		)		100.5				(76.5		)		(2.7		)		(79.2		)
Amendments	—				—				—				1.3				—				1.3
Benefits paid	(220.1		)		(15.5		)		(235.6		)		(194.5		)		(6.1		)		(200.6		)
Curtailment/settlement loss	(67.8		)		—				(67.8		)		(1.0		)		—				(1.0		)
Foreign currency exchange rate change	(373.6		)		3.7				(369.9		)		(355.5		)		(25.1		)		(380.6		)
Benefit obligation at end of year	$	6,177.5			$	835.0			$	7,012.5			$	3,500.0			$	136.1			$	3,636.1
Change in plan assets:
Prior year fair value of assets	$	3,523.2			$	—			$	3,523.2			$	3,667.6			$	—			$	3,667.6
Plan assets assumed in Acquisition	2,723.6				—				2,723.6				—				—				—
Actual return on plan assets	366.2				—				366.2				142.9				—				142.9
Employer contributions	12.1				15.5				27.6				256.1				6.1				262.2
Actual employee contributions	0.5				—				0.5				0.5				—				0.5
Settlement loss	(67.8		)		—				(67.8		)		—				—				—
Benefits and plan expenses paid	(227.6		)		(15.5		)		(243.1		)		(195.6		)		(6.1		)		(201.7		)
Foreign currency exchange rate change	(384.7		)		—				(384.7		)		(348.3		)		—				(348.3		)
Fair value of plan assets at end of year	$	5,945.5			$	—			$	5,945.5			$	3,523.2			$	—			$	3,523.2
Funded status:	$	(232.0	)		$	(835.0	)		$	(1,067.0	)		$	23.2			$	(136.1	)		$	(112.9	)
Amounts recognized in the Consolidated Balance Sheets:
Other non-current assets	$	184.6			$	—			$	184.6			$	97.2			$	—			$	97.2
Accounts payable and other current liabilities	(4.2		)		(51.4		)		(55.6		)		(1.6		)		(6.6		)		(8.2		)
Pension and postretirement benefits	(412.4		)		(783.6		)		(1,196.0		)		(72.4		)		(129.5		)		(201.9		)
Net amounts recognized	$	(232.0	)		$	(835.0	)		$	(1,067.0	)		$	23.2			$	(136.1	)		$	(112.9	)

The accumulated benefit obligation for our defined benefit pension plans was approximately $6.2 billion and $3.5 billion at December 31, 2016, and December 31, 2015, respectively. The $954.1 million increase in the net underfunded status of our aggregate pension and OPEB plans from December 31, 2015, to December 31, 2016, was primarily driven by the inclusion of the MillerCoors pension and OPEB plans following the completion of the Acquisition.

All defined benefit pension and OPEB plans with the exception of our U.K. and certain Canada defined benefit plans as of December 31, 2016, had aggregate accumulated benefit obligations and projected benefit obligations in excess of plan assets. Information for these plans with aggregate accumulated benefit obligations and projected benefit obligations in excess of plan assets is as follows:

	As of December 31, 2016												As of December 31, 2015
	Pension				OPEB				Consolidated				Pension				OPEB				Consolidated
	(In millions)
Accumulated benefit obligation	$	3,406.6			$	697.4			$	4,104.0			$	566.5			$	5.8			$	572.3
Projected benefit obligation	$	3,422.2			$	835.0			$	4,257.2			$	567.3			$	136.1			$	703.4
Fair value of plan assets	$	3,005.6			$	—			$	3,005.6			$	493.3			$	—			$	493.3

Accumulated Other Comprehensive Income

Amounts recognized in AOCI not yet recognized as components of net periodic pension and OPEB cost, pretax, were as follows:

	As of December 31, 2016												As of December 31, 2015
	Pension				OPEB				Consolidated				Pension				OPEB				Consolidated
	(In millions)
Net actuarial loss (gain)	$	770.1			$	(47.7	)		$	722.4			$	839.2			$	(10.3	)		$	828.9
Net prior service cost	2.4				(0.1		)		2.3				3.5				(0.1		)		3.4
Total not yet recognized	$	772.5			$	(47.8	)		$	724.7			$	842.7			$	(10.4	)		$	832.3

Changes in plan assets and benefit obligations recognized in OCI, pretax, were as follows:

	Pension				OPEB				Consolidated
	(In millions)
Accumulated other comprehensive loss (income) as of December 31, 2014	$	927.0			$	(7.5	)		$	919.5
Amortization of prior service (costs) benefit	(0.6		)		0.3				(0.3		)
Amortization of net actuarial (loss) gain	(46.9		)		0.3				(46.6		)
Current year actuarial loss (gain)	(39.3		)		(2.7		)		(42.0		)
Foreign currency exchange rate change	2.5				(0.8		)		1.7
Accumulated other comprehensive loss (income) as of December 31, 2015	$	842.7			$	(10.4	)		$	832.3
Amortization of prior service (costs) benefit	(0.7		)		0.1				(0.6		)
Amortization of net actuarial (loss) gain	(30.2		)		—				(30.2		)
Settlement loss	(9.0		)		—				(9.0		)
Current year actuarial loss (gain)	(36.5		)		(38.6		)		(75.1		)
Foreign currency exchange rate change	6.2				1.1				7.3
Accumulated other comprehensive loss (income) as of December 31, 2016	$	772.5			$	(47.8	)		$	724.7

Amortization of AOCI expected to be recognized in net periodic pension and OPEB cost during fiscal year 2017 pretax is as follows:

	Pension				OPEB				Consolidated
	(In millions)
Amortization of net prior service cost (gain)	$	0.7			$	—			$	0.7
Amortization of actuarial net loss (gain)	$	30.1			$	—			$	30.1

Assumptions

Periodic pension and OPEB cost is actuarially calculated annually for each individual plan based on data available at the beginning of each year. Assumptions used in the calculation include the settlement discount rate selected and disclosed at the end of the previous year (adjusted for the October 10, 2016, valuation for MillerCoors) as well as other assumptions detailed in the table below. The weighted-average rates used in determining the periodic pension and OPEB cost for the fiscal years 2016, 2015 and 2014 were as follows:

	For the years ended
	December 31, 2016				December 31, 2015				December 31, 2014
	Pension		OPEB		Pension		OPEB		Pension		OPEB
Weighted-average assumptions:
Settlement discount rate	3.72%		3.59%		3.70%		4.15%		4.57%		4.79%
Rate of compensation increase	2.00%		N/A		2.50%		N/A		2.50%		N/A
Expected return on plan assets(1)	5.15%		N/A		5.46%		N/A		6.16%		N/A
Health care cost trend rate	N/A		Ranging ratably from 7.7% in 2016 to 4.5% in 2028		N/A		Ranging ratably from 7.7% in 2015 to 4.5% in 2028		N/A		Ranging ratably from 7.7% in 2014 to 4.5% in 2028

(1)

We develop our long-term expected return on assets ("EROA") assumptions annually with input from independent investment specialists including our actuaries, investment consultants, plan trustee and other specialists. Each EROA assumption is based on historical data, including historical returns, historical market rates and is calculated for each plan's individual asset class. The calculation includes inputs for interest, inflation, credit, and risk premium (active investment management) rates and fees paid to service providers. We consider our EROA to be a significant management estimate. Any material changes in the inputs to our methodology used in calculating our EROA could have a significant impact on our reported defined benefit pension plans' expense.

Benefit obligations are actuarially calculated annually at the end of each year based on the assumptions detailed in the table below. Obligations under the OPEB plans are determined by the application of the terms of medical, dental, vision and life insurance plans, together with relevant actuarial assumptions and heath care cost trend rates. The weighted-average rates used in determining the projected benefit obligation for defined pension plans and the accumulated postretirement benefit obligation for OPEB plans, as of December 31, 2016, and December 31, 2015, were as follows:

	As of December 31, 2016				As of December 31, 2015
	Pension		OPEB		Pension		OPEB
Weighted-average assumptions:
Settlement discount rate	3.36%		3.76%		3.82%		4.05%
Rate of compensation increase	2.00%		N/A		2.00%		N/A
Health care cost trend rate	N/A		Ranging ratably from 7.0% in 2016 to 4.5% in 2037		N/A		Ranging ratably from 7.7% in 2016 to 4.5% in 2028

The change to the weighted-average discount rates used for our defined benefit pension plans and postretirement plans at December 31, 2016, from December 31, 2015, largely resulted from the inclusion of the MillerCoors pension and OPEB plans and change in the nature of the global economic environment, particularly in the U.K.

Assumed health care cost trend rates have a significant effect on the amounts reported for OPEB health care plans. A one-percentage point change in assumed health care cost trend rates would have the following effects on related OPEB plans:

	1% point increase (unfavorable)				1% point decrease favorable
	(In millions)
Effect on total of service and interest cost components	$	(1.7	)		$	1.5
Effect on postretirement benefit obligations	$	(58.2	)		$	51.0

Investment Strategy

The obligations of our defined benefit pension plans in the U.S., Canada and the U.K. are supported by assets held in trusts for the payment of future benefits. The business segments are obligated to adequately fund these asset trusts. The underlying investments within our defined benefit pension plans include: cash and short-term instruments, debt securities, equity securities, investment funds, and other investments including derivatives, hedge fund of funds and real estate. Investment allocations reflect the customized strategies of the respective plans.

The plans use liability driven investment strategies in managing defined pension benefits. For all defined benefit pension plan assets the plans have the following primary investment objectives:

(1)	optimize the long-term return on plan assets at an acceptable level of risk and manage projected future cash contributions;

(2)	maintain a broad diversification across asset classes and among investment managers;

(3)	manage the risk level of the plans' assets in relation to the plans' liabilities

Each plan's respective allocation targets promote optimal expected return and volatility characteristics given a focus on a long-term time horizon for fulfilling the plans' obligations. All assets are managed by external investment managers with a mandate to either match or outperform their benchmark. The plans use different asset managers in the U.S., U.K. and Canada and each plan's respective asset allocation could be impacted by a change in asset managers.

Our investment strategies for our defined benefit pension plans also consider the funding status for each plan. For defined benefit pension plans that are highly funded, assets are invested primarily in fixed income holdings that have a similar duration to the associated liabilities. For plans with lower funding levels, the fixed income component is managed in a similar manner to the highly funded plans. In addition to this liability-matching fixed income allocation, these plans also contain exposure to return generating assets including: equities, real estate, debt, and other investments held with the goal of producing higher returns, which may also have a higher risk profile. These investments are diversified by investing globally with limitations placed on issuer concentration.

Both our U.K. and Canadian plans hedge a portion of the foreign exchange exposure between plan assets that are not denominated in the local plan currency and the local currency as the Canadian and U.K. pension liabilities will be settled in CAD and GBP, respectively.

Target Allocations

The following compares target asset allocation percentages with actual asset allocations on a weighted-average asset basis at December 31, 2016:

	Target allocations		Actual allocations
Equities	23.7%		24.4%
Fixed income	65.9%		62.7%
Hedge funds	1.8%		1.8%
Real estate	2.2%		2.2%
Other	6.4%		8.9%

Significant Concentration Risks

We periodically evaluate our defined benefit pension plan assets for concentration risks. As of December 31, 2016, we did not have any individual underlying asset position that composed a significant concentration of each plan's overall assets.

However, we currently have significant plan assets invested in U.K., U.S. and Canadian government fixed income holdings. A provisional credit rating downgrade for any of these governments could negatively impact the asset values.

Further, as our benefit plans maintain exposure to non-government investments, a significant system-wide increase in credit spreads would also negatively impact the reported plan asset values. In general, equity and fixed income risks have been mitigated by company-specific concentration limits and by utilizing multiple equity managers. We do have significant amounts of assets invested with individual fixed income and hedge fund managers, therefore, the plans use outside investment consultants to aid in the oversight of these managers and fund performance.

Valuation Techniques

We use a variety of industry accepted valuation techniques to value our plan assets. The techniques vary depending upon instrument type. Whenever possible, we prioritize the use of observable market data in our valuation processes. We use market, income and cost approaches to value our plan assets as of period end. See Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" for additional information on our fair value methodologies and accounting policies. We have not changed our fair value techniques used to value plan assets this year.

Major Categories of Plan Assets

As of December 31, 2016, our major categories of plan assets included the following:

•

Cash and short-term instruments—Includes cash, trades awaiting settlement, bank deposits, short-term bills and short-term notes. Our "trades awaiting settlement" category includes payables and receivables associated with asset purchases and sales that are awaiting final cash settlement as of year end due to the use of trade date accounting for our pension plans assets. These payables normally settle within a few business days of the purchase or sale of the respective asset. The respective assets are included in or removed from our year end plan assets and categorized in their respective asset categories in the fair value hierarchy below. We include these items in Level 1 of this hierarchy, as the values are derived from quoted prices in active markets. Short-term instruments are included in Level 2 of the fair value hierarchy as these are highly liquid instruments that are valued using observable inputs, but their asset values are not publicly quoted.

•

Debt securities—Includes various government and corporate fixed income securities, interest and inflation-linked assets such as bonds and swaps, collateralized securities, and other debt securities. The majority of the plans' fixed income assets trade on "over the counter" exchanges, which provides observable inputs that are the primary data used to determine each individual investment's fair value. We also use independent pricing vendors, as well as matrix pricing techniques. Matrix pricing uses observable data from other similar investments as the primary input to determine the individual security's fair value. Government and corporate fixed income securities are generally classified as Level 2 in the fair value hierarchy as they are valued using observable inputs. Assets included in our collateralized securities include mortgage backed securities and collateralized mortgage obligations, which are considered Level 3 due to the use of the significant unobservable inputs used in deriving these assets' fair values.

•

Equities—Includes publicly traded common and other equity-like holdings, primarily publicly traded common stock and real estate investment trusts. Equity assets are well diversified between international and domestic investments. We consider equities quoted on public exchanges as Level 1 while other assets that are not quoted on public exchanges but valued using significant observable inputs as Level 2 depending on the individual asset's characteristics.

•	NAV per share practical expedient—Includes our debt funds, equity funds, hedge fund of funds, real estate fund holdings and private equity funds. The market values for these funds are based on the net asset values multiplied by the number of shares owned.

•

Other—Includes derivatives, repurchase agreements, recoverable taxes for taxes paid and awaiting reclaim due to the tax exempt nature of the pension plan, venture capital, and private equity. Derivatives are priced using observable inputs including yields, interest rate curves and spreads. Exchange traded derivatives are typically priced using the last trade price. Repurchase agreements are agreements where our plan has created an asset exposure using borrowed assets, creating a repurchase agreement liability, to facilitate the trade. The assets associated with the repurchase agreement are included in the other category in the fair value hierarchy, and the repurchase agreement liability is classified as Level 1 in the hierarchy, as the liability is valued using quoted prices in active markets. When determining the presentation of our target and asset allocations for repurchase agreements, we are viewing the asset type, as opposed to the investment vehicle, and accordingly include the associated assets within fixed income, specifically interest and inflation linked assets. We include

recoverable tax items in Level 1 of this hierarchy, as these are cash receivables and the values are derived from quoted prices in active markets. Private equity is included in Level 3 as the values are based upon the use of unobservable inputs.

Fair Value Hierarchy

The following presents our fair value hierarchy for our defined benefit pension plan assets excluding investments using the NAV per share practical expedient (in millions):

					Fair value measurements as of December 31, 2016
	Total at December 31, 2016				Quoted prices in active markets (Level 1)				Significant observable inputs (Level 2)				Significant unobservable inputs (Level 3)
Cash and cash equivalents
Cash	$	237.0			$	237.0			$	—			$	—
Trades awaiting settlement	7.0				7.0				—				—
Bank deposits, short-term bills and notes	76.9				—				76.9				—
Debt
Government securities	2,242.8				—				2,242.8				—
Corporate debt securities	997.9				—				997.8				0.1
Interest and inflation linked assets	1,011.7				—				963.3				48.4
Collateralized debt securities	21.2				—				—				21.2
Equities
Common stock	697.2				695.5				1.7				—
Other
Repurchase agreements	(1,693.1		)		(1,693.1		)		—				—
Recoverable taxes	0.5				0.5				—				—
Venture capital	0.3				—				—				0.3
Private Equity	267.4				—				—				267.4
Total fair value of investments excluding NAV per share practical expedient	$	3,866.8			$	(753.1	)		$	4,282.5			$	337.4

The following presents our total fair value of plan assets including the NAV per share practical expedient for our defined benefit pension plan assets:

	Total at December 31, 2016
	(In millions)
Fair value of investments excluding NAV per share practical expedient	$	3,866.8
Fair value of investments using NAV per share practical expedient
Debt funds	1,166.2
Equity funds	778.3
Real estate funds	45.3
Hedge funds of funds	3.4
Private equity funds	85.5
Total fair value of plan assets	$	5,945.5

The following presents our fair value hierarchy for our defined benefit pension plan assets excluding investments using the NAV per share practical expedient (in millions):

					Fair value measurements as of December 31, 2015
	Total at December 31, 2015				Quoted prices in active markets (Level 1)				Significant observable inputs (Level 2)				Significant unobservable inputs (Level 3)
Cash and cash equivalents
Cash	$	109.9			$	109.9			$	—			$	—
Trades awaiting settlement	(20.5		)		(20.5		)		—				—
Bank deposits, short-term bills and notes	13.9				—				13.9				—
Debt
Government securities	1,578.7				—				1,578.7				—
Corporate debt securities	317.7				—				317.7				—
Interest and inflation linked assets	1,047.0				—				1,010.1				36.9
Collateralized debt securities	3.4				—				—				3.4
Equities
Common stock	674.2				674.2				—				—
Other
Repurchase agreements	(1,652.0		)		(1,652.0		)		—				—
Recoverable taxes	0.7				0.7				—				—
Venture capital	0.2				—				—				0.2
Private equity	206.7				—				—				206.7
Total fair value of investments excluding NAV per share practical expedient	$	2,279.9			$	(887.7	)		$	2,920.4			$	247.2

The following presents our fair value hierarchy including the NAV per share practical expedient for our defined benefit pension plan assets:

	Total at December 31, 2015
	(In millions)
Fair value of investments excluding NAV per share practical expedient	$	2,279.9
Fair value of investments using NAV per share practical expedient
Debt funds	630.7
Equity funds	350.6
Real estate funds	57.9
Hedge funds of funds	130.5
Private equity	73.6
Total fair value of plan assets	$	3,523.2

Fair Value: Level Three Rollforward

The following presents our Level 3 Rollforward for our defined pension plan assets excluding investments using the NAV per share practical expedient:

	Amount
	(In millions)
Balance at December 31, 2014	$	119.9
Total gain or loss (realized/unrealized):
Realized gain (loss)	—
Unrealized gain (loss) included in AOCI	(2.4		)
Purchases, issuances, settlements	141.2
Transfers in/(out) of Level 3	—
Foreign exchange translation (loss)/gain	(11.5		)
Balance at December 31, 2015	$	247.2
Balance assumed in Acquisition	45.8
Total gain or loss (realized/unrealized):
Realized gain (loss)	0.2
Unrealized gain (loss) included in AOCI	22.3
Purchases, issuances, settlements	51.7
Transfers in/(out) of Level 3	16.6
Foreign exchange translation (loss)/gain	(46.4		)
Balance at December 31, 2016	$	337.4

Expected Cash Flows

In 2017, we expect to make contributions to our defined benefit pension plans of approximately $100 million to $120 million and benefit payments under our OPEB plans of approximately $50 million based on foreign exchange rates as of December 31, 2016. BRI and BDL contributions to their respective defined benefit pension plans are excluded here, as they are not consolidated in our financial statements. Plan funding strategies are influenced by employee benefits, tax laws and plan governance documents.

Expected future benefit payments for defined benefit pension and OPEB plans, based on foreign exchange rates at December 31, 2016, are as follows:

Expected benefit payments		Pension				OPEB
		(In millions)
2017		$	361.5			$	51.4
2018		$	346.9			$	52.0
2019		$	348.7			$	52.7
2020		$	350.5			$	53.2
2021		$	350.9			$	53.2
2022-2026		$	1,801.6			$	263.9

Defined Contribution Plans

We offer defined contribution pension plans for the majority of our MillerCoors, Corporate, Canadian and U.K. employees. The investment strategy for defined contribution plans are determined by each individual participant from the options we have made available as the plan sponsor. MillerCoors' employees are eligible to participate in the MillerCoors Employees' Retirement and Savings Plan, a qualified defined contribution plan, which provides for employer matching contributions up to 4% of eligible compensation (certain employees are also eligible for additional employer contributions). Corporate employees are eligible to participate in the Molson Coors Savings and Investment Plan, a qualified defined contribution plan, which provides for employer contributions ranging from 5% to 9% of our hourly and salaried employees' compensation (certain employees are also eligible for additional employer contributions). The employer contributions to the U.K. and Canadian plans range from 3% to 8.5% of employee compensation. Both employee and employer contributions were made in cash in accordance with participant investment elections.

We recognized costs associated with defined contribution plans of $24.0 million, $17.6 million and $19.0 million in 2016, 2015 and 2014, respectively.

In addition, we have other deferred compensation and nonqualified defined contribution plans. We have voluntarily funded these liabilities through Rabbi Trusts. These are company assets that are invested in publicly traded mutual funds whose performance is expected to closely match changes in the plan liabilities. As of December 31, 2016, and December 31, 2015, the plan liabilities were equal to the plan assets and were included in other assets and other liabilities on our consolidated balance sheets, respectively.

16. Derivative Instruments and Hedging Activities

Overview and Risk Management Policies

We use derivatives as part of our normal business operations to manage our exposure to fluctuations in interest rates, foreign currency and commodity price risk and for other strategic purposes related to our core business. We have established policies and procedures that govern the risk management of these exposures. Our primary objective in managing these exposures is to decrease the volatility of cash flows affected by changes in the underlying rates and prices.

To achieve our objectives, we enter into a variety of financial derivatives, including foreign currency exchange, commodity, interest rate and cross currency swaps as well as options. We also enter into physical hedging agreements directly with our suppliers to manage our exposure to certain commodities.

Counterparty Risk

While, by policy, the counterparties to any of the financial derivatives we enter into are major institutions with investment grade credit ratings of at least A- by Standard & Poor's (or the equivalent) or A3 by Moody's, we are exposed to credit-related losses in the event of non-performance by counterparties. This credit risk is generally limited to the unrealized gains in such contracts, should any of these counterparties fail to perform as contracted.

We have established a counterparty credit policy and guidelines that are monitored and reported to management according to prescribed guidelines to assist in managing this risk. As an additional measure, we utilize a portfolio of institutions either headquartered or operating in the same countries that we conduct our business. In calculating the fair value of our derivative balances, we also record an adjustment to recognize the risk of counterparty credit and our own non-performance risk, as appropriate.

Price and Liquidity Risks

We base the fair value of our derivative instruments upon market rates and prices. The volatility of these rates and prices are dependent on many factors that cannot be forecasted with reliable accuracy. The current fair values of our contracts could differ significantly from the cash settled values with our counterparties. As such, we are exposed to price risk related to unfavorable changes in the fair value of our derivative contracts.

We may be forced to cash settle all or a portion of our derivative contracts before the expected settlement date upon the occurrence of certain contractual triggers including a change of control, termination event or other breach of agreement. This could have a negative impact on our liquidity. For derivative contracts that we have designated as hedging instruments, early cash settlement would result in the timing of our hedge settlement not being matched to the cash settlement of the forecasted transaction or firm commitment. We may also decide to cash settle all or a portion of our derivative contracts before the expected settlement date through negotiations with our counterparties, which could also impact our cash position.

Due to the nature of our counterparty agreements, we are not able to net positions with the same counterparty across business units. Thus, in the event of default, we may be required to early settle all out-of-the-money contracts, without the benefit of netting the fair value of any in-the-money positions against this exposure.

Collateral

We do not receive and are not required to post collateral unless a change of control event occurs. This termination event would give either party the right to early terminate all outstanding swap transactions in the event that the other party consolidates, merges with, or transfers all or substantially all of its assets to, another entity, and the creditworthiness of the surviving entity that has assumed such party's obligations is materially weaker than that of such party. As of December 31, 2016, we did not have any collateral posted with any of our counterparties.

Derivative Accounting Policies

Overview

Our foreign currency forwards are designated in hedging relationships as cash flow hedges. Prior to settlements discussed below, our forward starting interest rate swaps were designated as cash flow hedges, our interest rate swaps were designated as fair value hedges and our cross currency swaps were designated as net investment hedges. In certain situations, we may execute derivatives that do not qualify for, or we do not otherwise seek, hedge accounting but are determined to be important for managing risk. For example, our commodity swaps, commodity options as well as the swaptions that we entered into in association with the Acquisition and discussed in Note 4, "Acquisition and Investments" were not designated in a hedge accounting relationship. These outstanding economic hedges are measured at fair value on our consolidated balance sheets with changes in fair value recorded in earnings. We have historically elected to apply the NPNS exemption to certain contracts, as applicable. These contracts are typically transacted with our suppliers and include risk management features that allow us to fix the price on specific volumes of purchases for specified delivery periods. We also consider whether any provisions in our contracts represent embedded derivative instruments as defined in authoritative accounting guidance and apply the appropriate accounting.

Hedge Accounting Policies

We formally document all relationships receiving hedge accounting treatment between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking hedge transactions pursuant to prescribed guidance. We also formally assess effectiveness both at the hedge's inception and on an ongoing basis, specifically whether the derivatives that are used in hedging transactions have been highly effective in mitigating the risk designated as being hedged and whether those hedges may be expected to remain highly effective in future periods.

We discontinue hedge accounting prospectively when (1) the derivative is no longer highly effective in offsetting changes in the cash flows of a forecasted future transaction; (2) the derivative expires or is sold, terminated, or exercised; (3) it is no longer probable that the forecasted transaction will occur; (4) management determines that designating the derivative as a hedging instrument is no longer appropriate; or (5) management decides to cease hedge accounting.

When we discontinue hedge accounting prospectively, but it continues to be probable that the forecasted transaction will occur in the originally expected period, the existing gain or loss on the derivative remains in AOCI for cash flow hedges and net investment hedges or in the carrying value of the hedged item for fair value hedges and is reclassified into earnings when the forecasted transaction affects earnings. However, if it is no longer probable that a forecasted transaction will occur by the end of the originally specified time period or within an additional two-month period of time thereafter, the gains and losses in AOCI are recognized immediately in earnings. In all situations in which hedge accounting is discontinued and the derivative

remains outstanding, we carry the derivative at its fair value on the consolidated balance sheets until maturity, recognizing future changes in the fair value in current period earnings.

Significant Derivative/Hedge Positions

Derivative Activity Related to the Acquisition

During the first quarter of 2016, we entered into swaption agreements with a total notional amount of $855.0 million to economically hedge a portion of our long-term debt issuance with which we partially funded the Acquisition. We paid upfront premiums of $37.8 million for the option to enter into and exercise swaps with a forward starting effective date. These swaptions were not designated in hedge accounting relationships as the hedges were entered into in association with the Acquisition and, accordingly, all mark-to-market fair value adjustments were reflected within interest expense. During the second quarter of 2016, we terminated and cash settled these swaptions in anticipation of the issuance of the 2016 Notes, resulting in cash proceeds of $1.4 million.

Separately, prior to issuing the EUR Notes and the CAD Notes on July 7, 2016, we entered into foreign currency forward agreements in the second quarter of 2016 with a total notional amount of EUR 794.6 million and CAD 965.5 million, representing a majority of the anticipated net proceeds from the issuance of the respective CAD Notes and EUR Notes, to economically hedge the foreign currency exposure of the associated notes against the USD prior to issuance and to convert the proceeds to USD upon issuance through gross settlement. We settled these foreign currency forwards on July 7, 2016, resulting in a loss of $3.6 million, and received the USD necessary, along with the USD Notes, to complete our financing needs for the Acquisition. These foreign currency forwards were not designated in hedge accounting relationships, and, accordingly, the mark-to-market fair value adjustments and resulting unrealized losses were recorded to other income (expense).

On July 7, 2016, concurrent with the issuance of the EUR Notes, we designated the principal EUR 800.0 million of the EUR Notes as a non-derivative financial net investment hedge of our investment in our Europe business in order to hedge a portion of the related foreign currency translational impacts, and, accordingly, record changes in the carrying value of the EUR Notes due to fluctuations in the spot rate to AOCI. See Note 12, "Debt" for further discussion of the EUR Notes and CAD Notes.

Interest Rate Swaps

In the first quarter of 2015, we entered into interest rate swaps with an aggregate notional amount of $300 million to economically convert our fixed rate $300 million notes to floating rate debt consistent with the interest rate swaps on our $500 million notes entered into during 2014. We received fixed interest payments semi-annually at a rate of 2.0% per annum on our $300 million hedges and a rate of 3.5% per annum on our $500 million hedges and paid a rate to our counterparties based on a credit spread plus the three month LIBOR rate, thereby effectively exchanging a fixed interest obligation for a floating interest obligation on both our $300 million and $500 million notes.

We entered into these interest rate swap agreements to minimize exposure to changes in the fair value of our $300 million and $500 million notes that results from fluctuations in the benchmark interest rate, specifically LIBOR, and designated these swaps as fair value hedges and determined that there was zero ineffectiveness. The changes in fair value of derivatives designated as fair value hedges and the offsetting changes in fair value of the hedged item were recognized in earnings. For the year ended December 31, 2015, the changes in fair value of the interest rate swaps resulted in unrealized gains of $0.7 million and $7.3 million on the $300 million notes and $500 million notes, respectively, and were recorded in interest expense in our consolidated statement of operations, which was fully offset by the changes in fair value of the $300 million notes and $500 million notes attributable to the benchmark interest rate, also recorded in interest expense.

During the fourth quarter of 2015, we voluntarily cash settled our notional of $300 million as well as our notional of $500 million which resulted in cash receipts of $0.7 million and $18.1 million, respectively, representing the cumulative adjustments to the carrying value of the notes from inception through termination. At the time of settlement we ceased adjusting the carrying value of our $300 million and $500 million notes for the fair value movements and these cumulative adjustments are now being amortized to interest expense over the expected remaining term of the respective note. The associated amortization recorded as a benefit to interest expense in 2015 was $0.4 million. See Note 12, "Debt" for additional details.

Forward Starting Interest Rate Swaps

Prior to the September 2015 issuance of our CAD 500 million notes and CAD 400 million notes, we entered into forward starting interest rate swaps with a notional of CAD 600 million in order to manage our exposure to the volatility of the interest rates associated with the future interest payments on the forecasted debt issuances. The swaps had an effective date of September 2015 and a termination date of September 2025 mirroring the terms of the initially forecasted debt issuance. Under these agreements we were required to early terminate these swaps at the approximate time we issued the previously forecasted

debt. We had designated these contracts as cash flow hedges and accordingly, a portion of the CAD 39.2 million ($29.5 million at settlement) loss on the forward starting interest rate swaps is being reclassified from AOCI and amortized to interest expense over the 5-year and 3-year terms of the CAD 500 million and CAD 400 million notes, respectively, and the remaining portion of the loss will be amortized on future debt issuances covering the 10-year term of the interest rate swap agreements.

Additionally, prior to the 2010 issuance of our CAD 500 million private placement notes in Canada, we entered into forward starting interest rate swaps in order to manage our exposure to the volatility of the interest rates associated with the future interest payments on the forecasted debt issuance. These swaps had effective dates mirroring the terms of the forecasted debt issuance. Under these agreements we were required to early terminate these swaps at the approximate time we issued the previously forecasted debt. We had designated these contracts as cash flow hedges of a portion of the interest payments on a future forecasted debt issuance. As a result, the loss at settlement on the forward starting interest rate swap is currently being reclassified from AOCI and amortized to interest expense over the term of the hedged debt. See Note 12, "Debt", for further discussion of our senior notes and the impact of the forward starting interest rates swaps on the effective interest rate of the issuance.

Cross Currency Swaps

In the first quarter of 2015, we entered into a cross currency swap agreement having a total notional of EUR 265 million ($300 million upon execution) in order to hedge a portion of the foreign currency translational impacts of our European investment. We received floating interest payments quarterly based on a credit spread plus the three month LIBOR (USD coupon) and paid a floating rate to our counterparty based on a credit spread plus EURIBOR (EUR coupon). As a result of this cross currency swap and the above mentioned interest rate swaps, we economically converted the $300 million notes and associated interest to a floating rate EUR denomination. We designated this cross currency swap as a net investment hedge and accordingly, recorded changes in fair value due to fluctuations in the spot rate to AOCI. During the fourth quarter of 2015, we voluntarily cash settled the EUR 265 million ($300 million) notional cross currency swap and received cash inflows of $16.0 million which was recorded as a gain within AOCI.

In January 2014, we early settled the final remaining CAD 241 million notional of our outstanding currency swaps designated as a net investment hedge of our Canadian operations for $65.2 million.

As of December 31, 2016, and December 31, 2015, we did not have any cross currency swap positions outstanding.

Foreign Currency Forwards

We have financial foreign exchange forward contracts in place to manage our exposure to foreign currency fluctuations. We hedge foreign currency exposure related to certain royalty agreements, exposure associated with the purchase of production inputs and imports that are denominated in currencies other than the functional entity's local currency, and other foreign exchanges exposures. These contracts have been designated as cash flow hedges of forecasted foreign currency transactions. We use foreign currency forward contracts to hedge these future forecasted transactions up to a 60 month horizon.

Commodity Swaps and Options

We have financial commodity swap and option contracts in place to hedge changes in the prices of natural gas, aluminum, including surcharges relating to our aluminum exposures, corn, barley and diesel. These contracts allow us to swap our floating exposure to changes in these commodity prices for a fixed rate. These contracts are not designated in hedge accounting relationships. As such, changes in fair value of these derivatives are recorded in cost of goods sold in the consolidated statements of operations. We hedge forecasted purchases of natural gas up to 60 months, aluminum up to 60 months, corn up to 60 months, barley up to 48 months and diesel up to 60 months out in the future for use in our supply chain, in line with our risk management policy. For purposes of measuring segment operating performance, the unrealized changes in fair value of the swaps not designated in hedge accounting relationships are reported in Corporate outside of the segment specific operating results until such time that the exposure we are managing is realized. At that time we reclassify the gain or loss from Corporate to the operating segment, allowing our operating segments to realize the economic effects of the derivative without the resulting unrealized mark-to-market volatility.

Derivative Fair Value Measurements

We utilize market approaches to estimate the fair value of our derivative instruments by discounting anticipated future cash flows derived from the derivative's contractual terms and observable market interest, foreign exchange and commodity rates. The fair values of our derivatives also include credit risk adjustments to account for our counterparties' credit risk, as well as our own non-performance risk, as appropriate.

The table below summarizes our derivative assets and liabilities that were measured at fair value as of December 31, 2016, and December 31, 2015. See Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" for further discussion related to measuring the fair value of derivative instruments.

					Fair Value Measurements at December 31, 2016
	Total at December 31, 2016				Quoted prices in active markets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
	(In millions)
Foreign currency forwards	$	14.4			$	—			$	14.4			$	—
Commodity swaps	(18.1		)		—				(18.1		)		—
Total	$	(3.7	)		$	—			$	(3.7	)		$	—

					Fair Value Measurements at December 31, 2015
	Total at December 31, 2015				Quoted prices in active markets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
	(In millions)
Foreign currency forwards	$	44.1			$	—			$	44.1			$	—
Commodity swaps	(21.4		)		—				(21.4		)		—
Total	$	22.7			$	—			$	22.7			$	—

As of December 31, 2016, we had no significant transfers between Level 1 and Level 2. New derivative contracts transacted during 2016 were all included in Level 2.

Results of Period Derivative Activity

The following tables include the year-to-date results of our derivative activity in our consolidated balance sheets as of December 31, 2016, and December 31, 2015, and our consolidated statements of operations for the years ended December 31, 2016, December 31, 2015, and December 31, 2014, respectively.

Fair Value of Derivative Instruments in the Consolidated Balance Sheets (in millions):

	December 31, 2016
					Asset derivatives						Liability derivatives
	Notional amount				Balance sheet location		Fair value				Balance sheet location		Fair value
Derivatives designated as hedging instruments:
Foreign currency forwards	$	329.4			Other current assets		$	12.0			Accounts payable and other current liabilities		$	(0.3	)
					Other non-current assets		3.3				Other liabilities		(0.6		)
Total derivatives designated as hedging instruments							$	15.3					$	(0.9	)
Derivatives not designated as hedging instruments:
Commodity swaps(1)	$	791.4			Other current assets		$	11.8			Accounts payable and other current liabilities		$	(23.3	)
					Other non-current assets		12.6				Other liabilities		(19.2		)
Commodity options(1)	$	13.6			Other current and non-current assets		—				Accounts payable and other current liabilities and other liabilities		—
Total derivatives not designated as hedging instruments							$	24.4					$	(42.5	)

(1)	Notional includes offsetting buy and sell positions, shown in terms of absolute value. Buy and sell positions are shown gross in the asset and/or liability position, as appropriate.

	December 31, 2015
					Asset derivatives						Liability derivatives
	Notional amount				Balance sheet location		Fair value				Balance sheet location		Fair value
Derivatives designated as hedging instruments:
Foreign currency forwards	$	300.3			Other current assets		$	28.4			Accounts payable and other current liabilities		$	—
					Other non-current assets		15.7				Other liabilities		—
Total derivatives designated as hedging instruments							$	44.1					$	—
Derivatives not designated as hedging instruments:
Commodity swaps	$	120.3			Other current assets		$	0.4			Accounts payable and other current liabilities		$	(12.5	)
					Other non-current assets		0.2				Other liabilities		(9.5		)
Total derivatives not designated as hedging instruments							$	0.6					$	(22.0	)

MCBC allocates the current and non-current portion of each contract to the corresponding derivative account above.

The Pretax Effect of Derivative Instruments on the Consolidated Statements of Operations (in millions):

For the year ended December 31, 2016
Derivatives in cash flow hedge relationships		Amount of gain (loss) recognized in OCI on derivative (effective portion)				Location of gain (loss) reclassified from AOCI into income (effective portion)		Amount of gain (loss) recognized from AOCI on derivative (effective portion)				Location of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)		Amount of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Forward starting interest rate swaps		$	—			Interest expense, net		$	(3.8	)		Interest expense, net		$	—
Foreign currency forwards		(23.7		)		Other income (expense), net		(7.2		)		Other income (expense), net		—
						Cost of goods sold		14.4				Cost of goods sold		—
Total		$	(23.7	)				$	3.4					$	—

For the year ended December 31, 2016
Non-derivative financial instruments in net investment hedge relationships		Amount of gain (loss) recognized in OCI on derivative (effective portion)				Location of gain (loss) reclassified from AOCI into income (effective portion)		Amount of gain (loss) recognized from AOCI on derivative (effective portion)				Location of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)		Amount of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
EUR 800 million notes due 2024		$	43.7			Other income (expense), net		$	—			Other income (expense), net		$	—
Total		$	43.7					$	—					$	—

For the year ended December 31, 2015
Derivatives in cash flow hedge relationships		Amount of gain (loss) recognized in OCI on derivative (effective portion)				Location of gain (loss) reclassified from AOCI into income (effective portion)		Amount of gain (loss) recognized from AOCI on derivative (effective portion)				Location of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)		Amount of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Forward starting interest rate swaps		$	(19.3	)		Interest expense, net		$	(2.0	)		Interest expense, net		$	—
Foreign currency forwards		26.3				Other income (expense), net		(11.9		)		Other income (expense), net		—
						Cost of goods sold		21.0				Cost of goods sold		—
Total		$	7.0					$	7.1					$	—

For the year ended December 31, 2015
Derivatives in net investment hedge relationships		Amount of gain (loss) recognized in OCI on derivative (effective portion)				Location of gain (loss) reclassified from AOCI into income (effective portion)		Amount of gain (loss) recognized from AOCI on derivative (effective portion)				Location of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)		Amount of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Cross currency swaps		$	16.0			Other income (expense), net		$	—			Other income (expense), net		$	—
Total		$	16.0					$	—					$	—

For the year ended December 31, 2015
Derivatives in fair value hedge relationship		Amount of gain (loss) recognized in income on derivative				Location of gain (loss) recognized in income
Interest rate swaps		$	8.0			Interest expense, net
Total		$	8.0

For the year ended December 31, 2014
Derivatives in cash flow hedge relationships		Amount of gain (loss) recognized in OCI on derivative (effective portion)				Location of gain (loss) reclassified from AOCI into income (effective portion)		Amount of gain (loss) recognized from AOCI on derivative (effective portion)				Location of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)		Amount of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Forward starting interest rate swaps		$	(13.3	)		Interest expense, net		$	(1.5	)		Interest expense, net		$	—
Foreign currency forwards		10.1				Other income (expense), net		(5.5		)		Other income (expense), net		—
						Cost of goods sold		2.8				Cost of goods sold		—
Commodity swaps		0.5				Cost of goods sold		0.4				Cost of goods sold		—
Total		$	(2.7	)				$	(3.8	)				$	—

For the year ended December 31, 2014
Derivatives in net investment hedge relationships		Amount of gain (loss) recognized in OCI on derivative (effective portion)				Location of gain (loss) reclassified from AOCI into income (effective portion)		Amount of gain (loss) recognized from AOCI on derivative (effective portion)				Location of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)		Amount of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Cross currency swaps		$	6.5			Other income (expense), net		$	—			Other income (expense), net		$	—
Total		$	6.5					$	—					$	—

For the year ended December 31, 2014
Derivatives in fair value hedge relationship	Amount of gain (loss) recognized in income on derivative				Location of gain (loss) recognized in income
Interest rate swaps	$	10.8			Interest expense, net
Total	$	10.8

We expect net gains of approximately $8 million (pretax) recorded in AOCI at December 31, 2016, will be reclassified into earnings within the next 12 months. For derivatives designated in cash flow hedge relationships, the maximum length of time over which forecasted transactions are hedged at December 31, 2016, is three years.

Other Derivatives (in millions):

For the year ended December 31, 2016
Derivatives not in hedging relationship		Location of gain (loss) recognized in income on derivative		Amount of gain (loss) recognized in income on derivative
Commodity swaps		Cost of goods sold		$	13.0
Commodity options		Cost of goods sold		(0.7		)
Foreign currency swaps		Other income (expense), net		(4.3		)
Swaption		Interest Expense		(36.4		)
Total				$	(28.4	)

For the year ended December 31, 2015
Derivatives not in hedging relationship		Location of gain (loss) recognized in income on derivative		Amount of gain (loss) recognized in income on derivative
Commodity swaps		Cost of goods sold		$	(19.9	)
Foreign currency swaps		Other income (expense), net		0.1
				$	(19.8	)

For the year ended December 31, 2014
Derivatives not in hedging relationship		Location of gain (loss) recognized in income on derivative		Amount of gain (loss) recognized in income on derivative
Commodity swaps		Cost of goods sold		$	(8.1	)
Total				$	(8.1	)

17. Accounts payable and other current liabilities

	As of
	December 31, 2016				December 31, 2015
	(In millions)
Accounts payable and accrued trade payables	$	1,297.6			$	559.6
Accrued compensation	271.0				82.3
Accrued excise and other non-income related taxes	317.3				201.6
Accrued interest	119.6				21.3
Accrued selling and marketing costs	124.0				100.3
Container liability	138.2				70.2
Other(1)	200.0				149.1
Accounts payable and other current liabilities	$	2,467.7			$	1,184.4

(1)	Includes current liabilities related to derivatives, income taxes, pensions and other postretirement benefits and other accrued expenses.

18. Commitments and Contingencies

Letters of Credit

As of December 31, 2016, we had $60.9 million outstanding in letters of credit with financial institutions. These letters primarily expire throughout 2017 and $14.3 million of the letters contain a feature that automatically renews the letter for an additional year if no cancellation notice is submitted. These letters of credit are being maintained as security for deferred compensation payments, reimbursements to insurance companies, reimbursements to the trustee for pension payments, deductibles or retention payments made on our behalf, various payments due to governmental agencies, operations of underground storage tanks and other general business purposes, and are not included on our consolidated balance sheets.

Guarantees

We guarantee indebtedness and other obligations to banks and other third parties for some of our equity method investments and consolidated subsidiaries. Accounts payable and other current liabilities in the accompanying consolidated balance sheets includes $31.7 million as of December 31, 2016, and $16.9 million as of December 31, 2015, respectively, related to the guarantee of the indebtedness of our equity method investments. See Note 4, "Acquisition and Investments" for further detail. Additionally, related to our previous ownership in the Montréal Canadiens, we guarantee its obligations under a ground lease for the Bell Centre Arena (the "Ground Lease Guarantee"). Upon sale of our interest, the new owners agreed to indemnify us in connection with the liabilities we may incur under the Ground Lease Guarantee and provided us with a CAD 10 million letter of credit to guarantee such indemnity. This transaction did not materially affect our risk exposure related to the Ground Lease Guarantee, which continues to be recognized as a liability on our consolidated balance sheets. Other non-current liabilities in the accompanying consolidated balance sheets includes $4.4 million as of December 31, 2016, and December 31, 2015, related to the Ground Lease Guarantee.

Supply and Distribution Contracts

We have various long-term supply contracts and distribution agreements with unaffiliated third parties and our joint venture partners to purchase materials used in production and packaging and to provide distribution services. The supply contracts provide that we purchase certain minimum levels of materials throughout the terms of the contracts. The future aggregate minimum required commitments under these supply and distribution contracts are shown in the table below based on foreign exchange rates as of December 31, 2016. The amounts in the table do not represent all anticipated payments under long-term contracts. Rather, they represent unconditional and legally enforceable committed expenditures:

Year		Amount
		(In millions)
2017		$	482.5
2018		319.7
2019		300.1
2020		272.5
2021		243.5
Thereafter		417.5
Total		$	2,035.8

Total purchases under our supply and distribution contracts in 2016, 2015 and 2014 were $910.7 million, $918.7 million and approximately $1.2 billion, respectively.

Advertising and Promotions

We have various long-term non-cancelable commitments for advertising, sponsorships and promotions, including marketing at sports arenas, stadiums and other venues and events. Based on foreign exchange rates as of December 31, 2016, these future commitments are as follows:

Year		Amount
		(In millions)
2017		$	211.9
2018		186.9
2019		125.1
2020		72.3
2021		43.2
Thereafter		148.1
Total		$	787.5

Total advertising expense was $644.1 million, $401.6 million and $473.9 million in 2016, 2015 and 2014, respectively. Prepaid advertising costs of $36.1 million and $10.6 million, were included in other current assets in the consolidated balance sheets at December 31, 2016, and December 31, 2015, respectively.

Operating Leases

We lease certain office facilities and operating equipment under cancelable and non-cancelable agreements accounted for as operating leases. Based on foreign exchange rates as of December 31, 2016, future minimum lease payments under operating leases that have initial or remaining non-cancelable terms in excess of one year are as follows:

Year		Amount
		(In millions)
2017		$	57.0
2018		46.6
2019		32.4
2020		28.0
2021		20.2
Thereafter		39.2
Total		$	223.4

Total rent expense was $36.6 million, $30.6 million and $35.0 million in 2016, 2015 and 2014, respectively.

Discontinued Operations

Kaiser

In 2006, we sold our entire equity interest in Kaiser to FEMSA Cerveza S.A. de C.V. ("FEMSA"). The terms of the sale agreement require us to indemnify FEMSA for certain exposures related to tax, civil and labor contingencies arising prior to FEMSA's purchase of Kaiser. In addition, we provided an indemnity to FEMSA for losses Kaiser may incur with respect to tax claims associated with certain previously utilized purchased tax credits. We settled a portion of our tax credit indemnity obligation during 2010. The maximum potential claims amount for the remainder of the purchased tax credits (which we believe present less risk than those previously settled), was $107.5 million as of December 31, 2016. Our total estimate of the indemnity liability as of December 31, 2016, was $12.4 million, of which $5.0 million was classified as a current liability, and $7.4 million classified as non-current.

Our estimates consider a number of scenarios for the ultimate resolution of these issues, the probabilities of which are influenced not only by legal developments in Brazil but also by management's intentions with regard to various alternatives that could present themselves leading to the ultimate resolution of these issues. The liabilities are impacted by changes in estimates regarding amounts that could be paid, the timing of such payments, adjustments to the probabilities assigned to various scenarios and foreign currency exchange rates. Our indemnity also covers fees and expenses that Kaiser incurs to manage the cases through the administrative and judicial systems.

Additionally, we also provided FEMSA with indemnity related to all other tax, civil, and labor contingencies existing as of the date of sale. In this regard, however, FEMSA assumed their full share of all of these contingent liabilities that had been previously recorded and disclosed by us prior to the sale on January 13, 2006. However, we may have to provide indemnity to FEMSA if those contingencies settle at amounts greater than those amounts previously recorded or disclosed by us. We will be able to offset any indemnity exposures in these circumstances with amounts that settle favorably to amounts previously recorded. Our exposure related to these indemnity claims is capped at the amount of the sales price of the 68% equity interest of Kaiser, which was $68.0 million. As a result of these contract provisions, our estimates include not only probability-weighted potential cash outflows associated with indemnity provisions, but also probability-weighted cash inflows that could result from favorable settlements, which could occur through negotiation or settlement programs arising from the federal or any of the various state governments in Brazil. The recorded value of the tax, civil, and labor indemnity liability was $5.2 million as of December 31, 2016, which is classified as non-current. For the remaining portion of our indemnity obligations, not deemed probable, we continue to utilize probability-weighted scenarios in determining the value of the indemnity obligations.

Future settlement procedures and related negotiation activities associated with these contingencies are largely outside of our control. The sale agreement requires annual cash settlements relating to the tax, civil, and labor indemnities. Indemnity obligations related to purchased tax credits must be settled upon notification of FEMSA's settlement. Due to the uncertainty involved with the ultimate outcome and timing of these contingencies, significant adjustments to the carrying values of the indemnity obligations have been recorded to date, and additional future adjustments may be required. These liabilities are denominated in Brazilian Reais and are therefore, subject to foreign exchange gains or losses, which are recognized in the discontinued operations section of the consolidated statements of operations.

The table below provides a summary of reserves associated with the Kaiser indemnity obligations from December 31, 2013, through December 31, 2016:

	Total indemnity reserves
	(In millions)
Balance at December 31, 2013	$	24.1
Changes in estimates	—
Foreign exchange impacts	(2.5		)
Balance at December 31, 2014	$	21.6
Changes in estimates	—
Foreign exchange impacts	(7.2		)
Balance at December 31, 2015	$	14.4
Changes in estimates	—
Foreign exchange impacts	3.2
Balance at December 31, 2016	$	17.6

Distribution Litigation

The gains (losses) recorded for the Kaiser indemnities and the distribution litigation are presented within discontinued operations. The table below summarizes the income (loss) from discontinued operations, net of tax, presented on our consolidated statements of operations:

	For the years ended
	December 31, 2016				December 31, 2015				December 31, 2014
	(In millions)
Adjustments to Kaiser indemnity liabilities due to foreign exchange gains and losses	$	(2.8	)		$	3.9			$	0.5
Income (loss) from discontinued operations, net of tax	$	(2.8	)		$	3.9			$	0.5

Litigation and Other Disputes and Environmental

Related to litigation, other disputes and environmental issues, we have accrued an aggregate of $27.7 million as of December 31, 2016, and $13.1 million as of December 31, 2015. While we cannot predict the eventual aggregate cost for environmental and related matters in which we are currently involved, we believe adequate reserves have been provided for

losses that are probable and estimable. Further, we believe that any payments, if required, for these matters would be made over a period of time in amounts that would not be material in any one year to our results from operations, cash flows or our financial or competitive position. Additionally, we believe that any reasonably possible losses in excess of the amounts accrued are immaterial to our consolidated financial statements, except as noted below.

In addition to the specific cases discussed below, we are involved in other disputes and legal actions arising in the ordinary course of our business. While it is not feasible to predict or determine the outcome of these proceedings, in our opinion, based on a review with legal counsel, none of these disputes or legal actions are expected to have a material impact on our business, consolidated financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business.

During the fourth quarter of 2014, and first quarters of 2015 and 2016, we received assessments from a local country regulatory authority related to indirect tax calculations in our Europe operations during the 41 month period prior to receipt of the most recent assessment. The aggregate amount of the assessments received is approximately $98 million, based on foreign exchange rates at December 31, 2016. While we continue to challenge the validity of these assessments and defend our position regarding the method of calculation, if the assessments, as issued, are ultimately upheld, they could materially affect our results of operations, including excise taxes, net sales revenue and resulting impacts to other consolidated financial statement line items. Based on the assessments received and related impacts, we estimate a current range of loss of up to approximately $132 million, based on foreign exchange rates at December 31, 2016, excluding consideration of interest and penalties.

During the fourth quarter of 2016, following on-going discussions with the regulatory authority and consideration of existing facts and circumstances, we have concluded that a portion of this estimated range of loss is deemed probable. As a result, we recorded a charge of approximately $50 million, based on foreign exchange rates at December 31, 2016, within the excise taxes line item on the consolidated statement of operations for the year ended December 31, 2016. While this provision was estimated based on the best information available at this time, significant judgment is required and the ultimate outcome of the assessments is inherently uncertain. Therefore, this provision may increase or decrease in the future due to new developments or changes in our estimates.

We continue to follow the required regulatory procedures in order to proceed with our appeal of the assessments and are proactively engaged with the regulatory authority to mutually resolve this matter. The indirect tax calculation methodology challenged in the assessments continues to be applied by us while the regulatory appeal process remains ongoing, and, as a result, the related range of loss is expected to increase until ultimately resolved. Moreover, if the assessments are upheld in full or in part, in addition to potentially recording an additional charge, we would be subject to increased indirect taxes on future sales on an ongoing basis, which could have a material adverse effect on our European results of operations and operating income.

Separately, in 2013 we became aware of potential liabilities in several European countries primarily related to local country regulatory matters associated with StarBev Holdings S.a.r.l. ("StarBev") pre-acquisition periods. We recorded liabilities related to these matters in the second quarter of 2013 as we finalized purchase price accounting related to the acquisition of StarBev. During the first quarter of 2014, these matters were favorably resolved and we released the associated indirect-tax and income-tax-related reserves, inclusive of post-acquisition accrued interest, resulting in a gain of $13.0 million recorded within marketing, general and administrative expenses and an income tax benefit of $18.5 million.

Litigation and Other Disputes

On December 12, 2014, a notice of action captioned David Hughes and 631992 Ontario Inc. v. Liquor Control Board of Ontario ("LCBO"), Brewers Retail Inc., Labatt Breweries of Canada LP, Molson Coors Canada and Sleeman Breweries Ltd. No. CV-14-518059-00CP was filed in Ontario, Canada. BRI and its owners, including Molson Coors Canada, as well as the LCBO are named as defendants in the action. The plaintiffs allege that The Beer Store (retail outlets owned and operated by BRI) and LCBO improperly entered into an agreement to fix prices and market allocation within the Ontario beer market to the detriment of licensees and consumers. The plaintiffs seek to have the claim certified as a class action on behalf of all Ontario beer consumers and licensees and, among other things, damages in the amount of CAD 1.4 billion. We note that The Beer Store operates according to the rules established by the Government of Ontario for regulation, sale and distribution of beer in the province. Additionally, prices at The Beer Store are independently set by each brewer and are approved by the LCBO on a weekly basis. As such, we currently believe the claim has been made without merit and we intend to vigorously assert and defend our rights in this lawsuit.

Environmental

When we determine it is probable that a liability for environmental matters or other legal actions exists and the amount of the loss is reasonably estimable, an estimate of the future costs is recorded as a liability in the financial statements. Costs that

extend the life, increase the capacity or improve the safety or efficiency of our assets or are incurred to mitigate or prevent future environmental contamination may be capitalized. Other environmental costs are expensed when incurred. Total environmental expenditures recognized as other expense for 2016 were $0.4 million, offset by a release to our reserves of $1.7 million. Total environmental expenditures for 2015 were $0.4 million offset by a release to our reserves of $0.1 million. Total environmental expenditures for 2014 were $1.0 million offset by a release to our reserves of $1.3 million.

Canada

Our Canada brewing operations are subject to provincial environmental regulations and local permit requirements. Our Montréal and Toronto breweries have water treatment facilities to pre-treat waste water before it goes to the respective local governmental facility for final treatment. We have environmental programs in Canada including organization, monitoring and verification, regulatory compliance, reporting, education and training, and corrective action.

We sold a chemical specialties business in 1996. We are still responsible for certain aspects of environmental remediation, undertaken or planned, at those chemical specialties business locations. We have established provisions for the costs of these remediation programs.

United States

We were previously notified that we are or may be a potentially responsible party ("PRP") under the Comprehensive Environmental Response, Compensation and Liability Act or similar state laws for the cleanup of sites where hazardous substances have allegedly been released into the environment. We cannot predict with certainty the total costs of cleanup, our share of the total cost, the extent to which contributions will be available from other parties, the amount of time necessary to complete the cleanups or insurance coverage.

Lowry

We are one of a number of entities named by the Environmental Protection Agency ("EPA") as a PRP at the Lowry Superfund site. This landfill is owned by the City and County of Denver ("Denver") and is managed by Waste Management of Colorado, Inc. ("Waste Management"). In 1990, we recorded a pretax charge of $30 million, a portion of which was put into a trust in 1993 as part of a settlement with Denver and Waste Management regarding the then-outstanding litigation. Our settlement was based on an assumed remediation cost of $120 million (in 1992 adjusted dollars). We are obligated to pay a portion of future costs, if any, in excess of that amount.

Waste Management provides us with updated annual cost estimates through 2032. We review these cost estimates in the assessment of our accrual related to this issue. We use certain assumptions that differ from Waste Management's estimates to assess our expected liability. Our expected liability (based on the $120 million threshold being met) is based on our best estimates available.

The assumptions used are as follows:

•	trust management costs are included in projections with regard to the $120 million threshold, but are expensed only as incurred;

•	income taxes, which we believe are not an included cost, are excluded from projections with regard to the $120 million threshold;

•	a 2.5% inflation rate for future costs; and

•	certain operations and maintenance costs were discounted using a 2.76% risk-free rate of return.

Based on these assumptions, the present value and gross amount of the costs at December 31, 2016, are approximately $3 million and $6 million, respectively. We did not assume any future recoveries from insurance companies in the estimate of our liability, and none are expected.

Considering the estimates extend through the year 2032 and the related uncertainties at the site, including what additional remedial actions may be required by the EPA, new technologies and what costs are included in the determination of when the $120 million is reached, the estimate of our liability may change as further facts develop. We cannot predict the amount of any such change, but additional accruals in the future are possible.

Other

In prior years, we have been notified by the EPA and certain state environmental divisions that we are a PRP, along with other parties, at the Cooper Drum site in southern California, the East Rutherford and Berry's Creek sites in New Jersey and the

Chamblee and Smyrna sites in Georgia. Certain former non-beer business operations, which we discontinued use of and subsequently sold, were involved at these sites. Potential losses associated with these sites could increase as remediation planning progresses.

We are aware of groundwater contamination at some of our properties in Colorado resulting from historical, ongoing, or nearby activities. There may also be other contamination of which we are currently unaware.

Europe and MCI

We are subject to the requirements of governmental and local environmental and occupational health and safety laws and regulations within each of the countries in which we operate. Compliance with these laws and regulations did not materially affect our 2016 capital expenditures, results of operations or our financial or competitive position, and we do not anticipate that they will do so in 2017.

In September 2015, the Environment Agency in the U.K. charged one of our subsidiaries with causing or contributing to a sewage fungus problem in a freshwater drain near the Alton brewery, which we closed in the second quarter of 2015. The dispute was settled in the first quarter of 2016 for an immaterial amount.

19. Supplemental Guarantor Information

For purposes of this Note 19, including the tables, "Parent Guarantor and Issuer" shall mean MCBC. "Subsidiary Guarantors" shall mean certain Canadian and U.S. subsidiaries reflecting the substantial operations of each of our Canada and U.S. segments.

SEC Registered Securities

On May 3, 2012, MCBC issued $1.9 billion of senior notes, in a registered public offering, consisting of $300 million 2.0% senior notes due 2017, $500 million 3.5% senior notes due 2022, and $1.1 billion 5.0% senior notes due 2042. Additionally, on July 7, 2016, MCBC issued the USD Notes and the EUR Notes, in a registered public offering, as detailed within Note 12, "Debt". "Parent Guarantor and Issuer" in the below tables is specifically referring to MCBC in its capacity as the issuer of these 2012 and 2016 issuances. These senior notes are guaranteed on a senior unsecured basis by the Subsidiary Guarantors, and, subsequent to the consummation of the Acquisition, which occurred on October 11, 2016, have been guaranteed by MillerCoors. Each of the Subsidiary Guarantors is 100% owned by the Parent Guarantor. The guarantees are full and unconditional and joint and several.

None of our other outstanding debt is publicly registered, and such other outstanding debt is guaranteed on a senior unsecured basis by the Parent Guarantor and Subsidiary Guarantors, and, upon consummation of the Acquisition, which occurred on October 11, 2016, have been guaranteed by MillerCoors. This includes the privately placed CAD Notes issued by Molson Coors International LP on July 7, 2016. These guarantees are full and unconditional and joint and several. See Note 12, "Debt" for details of all debt issued and outstanding as of December 31, 2016.

Presentation

As a result of our adoption of the FASB's recently issued share-based compensation guidance in the third quarter of 2016, we recast our condensed consolidated statements of cash flows for all periods presented. The adoption of this guidance also impacted our previously reported quarterly results for fiscal years 2015 and 2016. For purposes of this supplemental guarantor information, the recast impacted the Parent Guarantor only. See Note 2, "New Accounting Pronouncements" for further details.

In conjunction with the issuance of the 2016 Notes, and as disclosed within Exhibit 99.1 of the Current Report on Form 8-K filed with the SEC on June 28, 2016, we released Molson Coors Brewing Company (U.K.) Limited, our primary U.K. operating entity, Golden Acquisition and Molson Coors Holdings Limited as subsidiary guarantors of our existing and future debt obligations, as evidenced by the supplemental indentures dated May 13, 2016. Accordingly, the 2015 and 2014 financial information included below has been recast to reflect the release of these entities as subsidiary guarantors.

During the fourth quarter of 2016, we corrected the allocation of income tax expense assigned to the subsidiary guarantors and subsidiary non guarantors to derive equity income (loss) in subsidiaries in 2015 and 2014. This resulted in a revision to this line item and net income (loss) from continuing operations within the condensed consolidating statements of operations for the subsidiary guarantors, subsidiary non guarantors and eliminations columns of a $26.3 million loss, $70.1 million of income and a $43.8 million loss, respectively, for the year ended December 31, 2015, and a $139.2 million loss, $195.1 million of income and a $55.9 million loss, respectively, for the year ended December 31, 2014. This revision did not impact the condensed consolidating statement of operations for the year ended December 31, 2016, or the condensed consolidating balance sheets as of December 31, 2016, and December 31, 2015. The changes to our historical condensed consolidating statements of operations are not material to the financial statements taken as a whole for any periods impacted.

The following information sets forth the condensed consolidating statements of operations for the years ended December 31, 2016, December 31, 2015, and December 31, 2014, condensed consolidating balance sheets as of December 31, 2016, and December 31, 2015, and condensed consolidating statements of cash flows for the years ended December 31, 2016, December 31, 2015, and December 31, 2014. Investments in subsidiaries are accounted for under the equity method; accordingly, entries necessary to consolidate the Parent Guarantor and all of our guarantor and non-guarantor subsidiaries are reflected in the eliminations column. In the opinion of management, separate complete financial statements of MCBC and the Subsidiary Guarantors would not provide additional material information that would be useful in assessing their financial composition.

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2016

(IN MILLIONS)

	Parent Guarantor and Issuer				Subsidiary Guarantors				Subsidiary Non Guarantors				Eliminations				Consolidated
Sales	$	26.5			$	3,742.8			$	3,044.3			$	(216.2	)		$	6,597.4
Excise taxes	—				(661.4		)		(1,051.0		)		—				(1,712.4		)
Net sales	26.5				3,081.4				1,993.3				(216.2		)		4,885.0
Cost of goods sold	—				(1,836.2		)		(1,352.5		)		185.6				(3,003.1		)
Gross profit	26.5				1,245.2				640.8				(30.6		)		1,881.9
Marketing, general and administrative expenses	(249.6		)		(805.2		)		(573.1		)		30.6				(1,597.3		)
Special items, net	(1.0		)		2,556.3				(31.4		)		—				2,523.9
Equity income (loss) in subsidiaries	2,251.7				(21.8		)		(129.0		)		(2,100.9		)		—
Equity income in MillerCoors	—				500.9				—				—				500.9
Operating income (loss)	2,027.6				3,475.4				(92.7		)		(2,100.9		)		3,309.4
Interest income (expense), net	(202.1		)		268.9				(311.2		)		—				(244.4		)
Other income (expense), net	(62.0		)		(60.9		)		93.2				—				(29.7		)
Income (loss) from continuing operations before income taxes	1,763.5				3,683.4				(310.7		)		(2,100.9		)		3,035.3
Income tax benefit (expense)	212.4				(1,108.0		)		(155.1		)		—				(1,050.7		)
Net income (loss) from continuing operations	1,975.9				2,575.4				(465.8		)		(2,100.9		)		1,984.6
Income (loss) from discontinued operations, net of tax	—				—				(2.8		)		—				(2.8		)
Net income (loss) including noncontrolling interests	1,975.9				2,575.4				(468.6		)		(2,100.9		)		1,981.8
Net (income) loss attributable to noncontrolling interests	—				—				(5.9		)		—				(5.9		)
Net income (loss) attributable to MCBC	$	1,975.9			$	2,575.4			$	(474.5	)		$	(2,100.9	)		$	1,975.9
Comprehensive income (loss) attributable to MCBC	$	2,125.3			$	2,688.3			$	(705.9	)		$	(1,982.4	)		$	2,125.3

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2015

(IN MILLIONS)

AS RECAST FOR CHANGE IN GUARANTORS

	Parent Guarantor and Issuer				Subsidiary Guarantors				Subsidiary Non Guarantors				Eliminations				Consolidated
Sales	$	28.2			$	2,070.4			$	3,141.3			$	(112.5	)		$	5,127.4
Excise taxes	—				(473.9		)		(1,086.0		)		—				(1,559.9		)
Net sales	28.2				1,596.5				2,055.3				(112.5		)		3,567.5
Cost of goods sold	—				(902.9		)		(1,340.8		)		80.2				(2,163.5		)
Gross profit	28.2				693.6				714.5				(32.3		)		1,404.0
Marketing, general and administrative expenses	(131.0		)		(371.9		)		(581.2		)		32.3				(1,051.8		)
Special items, net	—				(27.2		)		(319.5		)		—				(346.7		)
Equity income (loss) in subsidiaries	432.8				(476.1		)		253.5				(210.2		)		—
Equity income in MillerCoors	—				516.3				—				—				516.3
Operating income (loss)	330.0				334.7				67.3				(210.2		)		521.8
Interest income (expense), net	(67.5		)		290.1				(334.6		)		—				(112.0		)
Other income (expense), net	(7.4		)		6.3				2.0				—				0.9
Income (loss) from continuing operations before income taxes	255.1				631.1				(265.3		)		(210.2		)		410.7
Income tax benefit (expense)	104.4				(214.5		)		58.3				—				(51.8		)
Net income (loss) from continuing operations	359.5				416.6				(207.0		)		(210.2		)		358.9
Income (loss) from discontinued operations, net of tax	—				—				3.9				—				3.9
Net income (loss) including noncontrolling interests	359.5				416.6				(203.1		)		(210.2		)		362.8
Net (income) loss attributable to noncontrolling interests	—				—				(3.3		)		—				(3.3		)
Net income (loss) attributable to MCBC	$	359.5			$	416.6			$	(206.4	)		$	(210.2	)		$	359.5
Comprehensive income (loss) attributable to MCBC	$	(437.0	)		$	(320.8	)		$	(380.5	)		$	701.3			$	(437.0	)

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2014

(IN MILLIONS)

AS RECAST FOR CHANGE IN GUARANTORS

	Parent Guarantor and Issuer				Subsidiary Guarantors				Subsidiary Non Guarantors				Eliminations				Consolidated
Sales	$	16.8			$	2,437.3			$	3,585.5			$	(112.1	)		$	5,927.5
Excise taxes	—				(558.0		)		(1,223.2		)		—				(1,781.2		)
Net sales	16.8				1,879.3				2,362.3				(112.1		)		4,146.3
Cost of goods sold	—				(1,044.7		)		(1,540.4		)		91.8				(2,493.3		)
Gross profit	16.8				834.6				821.9				(20.3		)		1,653.0
Marketing, general and administrative expenses	(123.8		)		(426.4		)		(634.0		)		20.3				(1,163.9		)
Special items, net	(0.3		)		(21.4		)		(302.7		)		—				(324.4		)
Equity income (loss) in subsidiaries	602.3				(426.5		)		422.2				(598.0		)		—
Equity income in MillerCoors	—				561.8				—				—				561.8
Operating income (loss)	495.0				522.1				307.4				(598.0		)		726.5
Interest income (expense), net	(78.9		)		240.3				(295.1		)		—				(133.7		)
Other income (expense), net	(2.1		)		(1.2		)		(3.2		)		—				(6.5		)
Income (loss) from continuing operations before income taxes	414.0				761.2				9.1				(598.0		)		586.3
Income tax benefit (expense)	100.0				(158.9		)		(10.1		)		—				(69.0		)
Net income (loss) from continuing operations	514.0				602.3				(1.0		)		(598.0		)		517.3
Income (loss) from discontinued operations, net of tax	—				—				0.5				—				0.5
Net income (loss) including noncontrolling interests	514.0				602.3				(0.5		)		(598.0		)		517.8
Net (income) loss attributable to noncontrolling interests	—				—				(3.8		)		—				(3.8		)
Net income (loss) attributable to MCBC	$	514.0			$	602.3			$	(4.3	)		$	(598.0	)		$	514.0
Comprehensive income (loss) attributable to MCBC	$	(539.3	)		$	(301.9	)		$	(591.0	)		$	892.9			$	(539.3	)

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEETS

AS OF DECEMBER 31, 2016

(IN MILLIONS)

	Parent Guarantor and Issuer				Subsidiary Guarantors				Subsidiary Non Guarantors				Eliminations				Consolidated
Assets
Current assets:
Cash and cash equivalents	$	147.3			$	141.5			$	272.1			$	—			$	560.9
Accounts receivable, net	—				374.8				294.7				—				669.5
Other receivables, net	43.6				53.8				38.4				—				135.8
Total inventories	—				466.6				126.1				—				592.7
Other current assets, net	1.3				139.3				70.1				—				210.7
Intercompany accounts receivable	—				1,098.5				36.0				(1,134.5		)		—
Total current assets	192.2				2,274.5				837.4				(1,134.5		)		2,169.6
Properties, net	27.5				3,459.9				1,020.0				—				4,507.4
Goodwill	—				6,647.5				1,602.6				—				8,250.1
Other intangibles, net	—				12,180.4				1,851.5				—				14,031.9
Net investment in and advances to subsidiaries	22,506.3				3,475.4				4,400.9				(30,382.6		)		—
Other assets, net	80.2				161.7				173.4				(32.8		)		382.5
Total assets	$	22,806.2			$	28,199.4			$	9,885.8			$	(31,549.9	)		$	29,341.5
Liabilities and equity
Current liabilities:
Accounts payable and other current liabilities	$	203.6			$	1,493.5			$	770.6			$	—			$	2,467.7
Current portion of long-term debt and short-term borrowings	299.9				371.7				13.2				—				684.8
Discontinued operations	—				—				5.0				—				5.0
Intercompany accounts payable	893.5				101.8				139.2				(1,134.5		)		—
Total current liabilities	1,397.0				1,967.0				928.0				(1,134.5		)		3,157.5
Long-term debt	9,979.4				1,408.2				0.1				—				11,387.7
Pension and postretirement benefits	2.6				1,181.2				12.2				—				1,196.0
Deferred tax liabilities	—				972.0				759.8				(32.8		)		1,699.0
Other liabilities	9.6				229.2				28.2				—				267.0
Discontinued operations	—				—				12.6				—				12.6
Intercompany notes payable	—				1,360.3				5,868.4				(7,228.7		)		—
Total liabilities	11,388.6				7,117.9				7,609.3				(8,396.0		)		17,719.8
MCBC stockholders' equity	11,418.7				26,948.9				3,433.7				(30,382.6		)		11,418.7
Intercompany notes receivable	(1.1		)		(5,867.4		)		(1,360.2		)		7,228.7				—
Total stockholders' equity	11,417.6				21,081.5				2,073.5				(23,153.9		)		11,418.7
Noncontrolling interests	—				—				203.0				—				203.0
Total equity	11,417.6				21,081.5				2,276.5				(23,153.9		)		11,621.7
Total liabilities and equity	$	22,806.2			$	28,199.4			$	9,885.8			$	(31,549.9	)		$	29,341.5

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEETS

AS OF DECEMBER 31, 2015

(IN MILLIONS)

AS RECAST FOR CHANGE IN GUARANTORS

	Parent Guarantor and Issuer				Subsidiary Guarantors				Subsidiary Non Guarantors				Eliminations				Consolidated
Assets
Current assets:
Cash and cash equivalents	$	146.4			$	106.2			$	178.3			$	—			$	430.9
Accounts receivable, net	—				120.4				304.3				—				424.7
Other receivables, net	8.7				33.5				59.0				—				101.2
Total inventories	—				61.6				117.7				—				179.3
Other current assets, net	45.6				22.4				54.7				—				122.7
Intercompany accounts receivable	—				3,796.7				5.5				(3,802.2		)		—
Total current assets	200.7				4,140.8				719.5				(3,802.2		)		1,258.8
Properties, net	20.4				578.7				991.7				—				1,590.8
Goodwill	—				225.3				1,758.0				—				1,983.3
Other intangibles, net	—				2,954.2				1,791.5				—				4,745.7
Investment in MillerCoors	—				2,441.0				—				—				2,441.0
Net investment in and advances to subsidiaries	12,394.3				3,459.1				4,765.1				(20,618.5		)		—
Deferred tax assets	37.7				—				0.1				(17.6		)		20.2
Other assets, net	14.0				115.4				107.1				—				236.5
Total assets	$	12,667.1			$	13,914.5			$	10,133.0			$	(24,438.3	)		$	12,276.3
Liabilities and equity
Current liabilities:
Accounts payable and other current liabilities	$	72.7			$	332.0			$	779.7			$	—			$	1,184.4
Current portion of long-term debt and short-term borrowings	—				—				28.7				—				28.7
Discontinued operations	—				—				4.1				—				4.1
Intercompany accounts payable	3,652.6				70.6				79.0				(3,802.2		)		—
Total current liabilities	3,725.3				402.6				891.5				(3,802.2		)		1,217.2
Long-term debt	1,902.1				1,006.6				—				—				2,908.7
Pension and postretirement benefits	3.3				184.3				14.3				—				201.9
Deferred tax liabilities	—				215.7				601.7				(17.6		)		799.8
Other liabilities	6.5				25.1				43.7				—				75.3
Discontinued operations	—				—				10.3				—				10.3
Intercompany notes payable	—				0.5				4,758.8				(4,759.3		)		—
Total liabilities	5,637.2				1,834.8				6,320.3				(8,579.1		)		5,213.2
MCBC stockholders' equity	7,031.0				16,837.4				3,793.1				(20,618.5		)		7,043.0
Intercompany notes receivable	(1.1		)		(4,757.7		)		(0.5		)		4,759.3				—
Total stockholders' equity	7,029.9				12,079.7				3,792.6				(15,859.2		)		7,043.0
Noncontrolling interests	—				—				20.1				—				20.1
Total equity	7,029.9				12,079.7				3,812.7				(15,859.2		)		7,063.1
Total liabilities and equity	$	12,667.1			$	13,914.5			$	10,133.0			$	(24,438.3	)		$	12,276.3

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2016

(IN MILLIONS)

	Parent Guarantor and Issuer				Subsidiary Guarantors				Subsidiary Non Guarantors				Eliminations				Consolidated
Net cash provided by (used in) operating activities	$	666.6			$	579.4			$	245.3			$	(364.4	)		$	1,126.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to properties	(14.3		)		(164.1		)		(163.4		)		—				(341.8		)
Proceeds from sales of properties and other assets	—				159.0				15.5				—				174.5
Acquisition of businesses, net of cash acquired	—				(11,972.6		)		11.6				—				(11,961.0		)
Investment in MillerCoors	—				(1,253.7		)		—				—				(1,253.7		)
Return of capital from MillerCoors	—				1,086.9				—				—				1,086.9
Other	—				1.9				6.6				—				8.5
Net intercompany investing activity	(11,260.0		)		(1,429.1		)		(1,425.7		)		14,114.8				—
Net cash provided by (used in) investing activities	(11,274.3		)		(13,571.7		)		(1,555.4		)		14,114.8				(12,286.6		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net	2,525.6				—				—				—				2,525.6
Exercise of stock options under equity compensation plans	11.2				—				—				—				11.2
Dividends paid	(322.2		)		(355.7		)		(39.4		)		364.4				(352.9		)
Payments on debt and borrowings	(200.0		)		(0.2		)		(23.7		)		—				(223.9		)
Proceeds on debt and borrowings	8,667.6				768.8				24.2				—				9,460.6
Debt issuance costs	(56.2		)		(4.5		)		—				—				(60.7		)
Net proceeds from (payments on) revolving credit facilities and commercial paper	—				—				(1.1		)		—				(1.1		)
Change in overdraft balances and other	(17.4		)		—				(23.5		)		—				(40.9		)
Net intercompany financing activity	—				12,624.9				1,489.9				(14,114.8		)		—
Net cash provided by (used in) financing activities	10,608.6				13,033.3				1,426.4				(13,750.4		)		11,317.9
CASH AND CASH EQUIVALENTS:
Net increase (decrease) in cash and cash equivalents	0.9				41.0				116.3				—				158.2
Effect of foreign exchange rate changes on cash and cash equivalents	—				(5.7		)		(22.5		)		—				(28.2		)
Balance at beginning of year	146.4				106.2				178.3				—				430.9
Balance at end of period	$	147.3			$	141.5			$	272.1			$	—			$	560.9

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2015

(IN MILLIONS)

AS RECAST FOR CHANGE IN GUARANTORS

	Parent Guarantor and Issuer				Subsidiary Guarantors				Subsidiary Non Guarantors				Eliminations				Consolidated
Net cash provided by (used in) operating activities	$	598.1			$	691.8			$	(220.4	)		$	(353.6	)		$	715.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to properties	(13.9		)		(70.2		)		(190.9		)		—				(275.0		)
Proceeds from sales of properties and other assets	—				0.7				11.1				—				11.8
Acquisition of businesses, net of cash acquired	—				—				(91.2		)		—				(91.2		)
Investment in MillerCoors	—				(1,442.7		)		—				—				(1,442.7		)
Return of capital from MillerCoors	—				1,441.1				—				—				1,441.1
Other	33.4				(10.7		)		(1.4		)		—				21.3
Net intercompany investing activity	(56.3		)		(134.2		)		270.7				(80.2		)		—
Net cash provided by (used in) investing activities	(36.8		)		(216.0		)		(1.7		)		(80.2		)		(334.7		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Exercise of stock options under equity compensation plans	34.6				—				—				—				34.6
Dividends paid	(271.7		)		(306.5		)		(78.8		)		353.6				(303.4		)
Payments for purchase of treasury stock	(150.1		)		—				—				—				(150.1		)
Payments on debt and borrowings	—				(676.4		)		(25.0		)		—				(701.4		)
Proceeds on debt and borrowings	—				679.9				23.4				—				703.3
Debt issuance costs	(58.3		)		(3.5		)		—				—				(61.8		)
Net proceeds from (payments on) revolving credit facilities and commercial paper	—				—				3.9				—				3.9
Change in overdraft balances and other	(10.3		)		(0.5		)		(45.8		)		—				(56.6		)
Net intercompany financing activity	—				(214.4		)		134.2				80.2				—
Net cash provided by (used in) financing activities	(455.8		)		(521.4		)		11.9				433.8				(531.5		)
CASH AND CASH EQUIVALENTS:
Net increase (decrease) in cash and cash equivalents	105.5				(45.6		)		(210.2		)		—				(150.3		)
Effect of foreign exchange rate changes on cash and cash equivalents	—				(21.4		)		(22.0		)		—				(43.4		)
Balance at beginning of year	40.9				173.2				410.5				—				624.6
Balance at end of period	$	146.4			$	106.2			$	178.3			$	—			$	430.9

MOLSON COORS BREWING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2014

(IN MILLIONS)

AS RECAST FOR CHANGE IN GUARANTORS

	Parent Guarantor and Issuer				Subsidiary Guarantors				Subsidiary Non Guarantors				Eliminations				Consolidated
Net cash provided by (used in) operating activities	$	587.3			$	216.5			$	604.5			$	(120.4	)		$	1,287.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to properties	(11.9		)		(70.8		)		(176.8		)		—				(259.5		)
Proceeds from sales of properties and other assets	—				1.4				7.4				—				8.8
Investment in MillerCoors	—				(1,388.1		)		—				—				(1,388.1		)
Return of capital from MillerCoors	—				1,382.5				—				—				1,382.5
Other	—				10.0				6.9				—				16.9
Net intercompany investing activity	(37.4		)		279.3				280.4				(522.3		)		—
Net cash provided by (used in) investing activities	(49.3		)		214.3				117.9				(522.3		)		(239.4		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Exercise of stock options under equity compensation plans	44.4				—				—				—				44.4
Dividends paid	(242.5		)		(48.1		)		(103.4		)		120.4				(273.6		)
Payments on debt and borrowings	(1.1		)		(61.7		)		(11.6		)		—				(74.4		)
Proceeds on debt and borrowings	—				—				4.8				—				4.8
Debt issuance costs	(1.8		)		—				(0.1		)		—				(1.9		)
Payments on settlement of derivative instruments	—				(65.2		)		—				—				(65.2		)
Net proceeds from (payments on) revolving credit facilities and commercial paper	(379.6		)		—				(134.3		)		—				(513.9		)
Change in overdraft balances and other	(7.1		)		—				69.6				—				62.5
Net intercompany financing activity	—				(241.2		)		(281.1		)		522.3				—
Net cash provided by (used in) financing activities	(587.7		)		(416.2		)		(456.1		)		642.7				(817.3		)
CASH AND CASH EQUIVALENTS:
Net increase (decrease) in cash and cash equivalents	(49.7		)		14.6				266.3				—				231.2
Effect of foreign exchange rate changes on cash and cash equivalents	—				(18.5		)		(30.4		)		—				(48.9		)
Balance at beginning of year	90.6				177.1				174.6				—				442.3
Balance at end of period	$	40.9			$	173.2			$	410.5			$	—			$	624.6

20. Quarterly Financial Information (Unaudited)

The following summarizes selected quarterly financial information for 2016 and 2015.

2016	First				Second				Third				Fourth(2)				Full Year(3)
	(In millions, except per share data)
Sales	$	950.8			$	1,407.0			$	1,337.7			$	2,901.9			$	6,597.4
Excise taxes	(293.6		)		(420.8		)		(390.1		)		(607.9		)		(1,712.4		)
Net sales	657.2				986.2				947.6				2,294.0				4,885.0
Cost of goods sold	(414.0		)		(562.2		)		(541.3		)		(1,485.6		)		(3,003.1		)
Gross profit	$	243.2			$	424.0			$	406.3			$	808.4			$	1,881.9
Amounts attributable to Molson Coors Brewing Company(1):
Net income (loss) from continuing operations	$	163.2			$	174.1			$	202.5			$	1,438.9			$	1,978.7
Income (loss) from discontinued operations, net of tax	(0.5		)		(1.8		)		—				(0.5		)		(2.8		)
Net income (loss) attributable to Molson Coors Brewing Company	$	162.7			$	172.3			$	202.5			$	1,438.4			$	1,975.9
Basic net income (loss) attributable to Molson Coors Brewing Company per share(1):
From continuing operations	$	0.80			$	0.81			$	0.94			$	6.70			$	9.33
From discontinued operations	—				(0.01		)		—				—				(0.01		)
Basic net income (loss) attributable to Molson Coors Brewing Company per share	$	0.80			$	0.80			$	0.94			$	6.70			$	9.32
Diluted net income (loss) attributable to Molson Coors Brewing Company per share(1):
From continuing operations	$	0.80			$	0.81			$	0.94			$	6.65			$	9.27
From discontinued operations	—				(0.01		)		—				—				(0.01		)
Diluted net income (loss) attributable to Molson Coors Brewing Company per share	$	0.80			$	0.80			$	0.94			$	6.65			$	9.26

(1)	Income tax expense was revised for the first and second quarters of 2016 following the adoption of new guidance regarding accounting for share-based compensation. See Note 2, "New Accounting Pronouncements" for further discussion of these changes, and below for the impacts of these changes to previously filed quarterly results.

(2)	Prior to October 11, 2016, MCBC's 42% share of MillerCoors' results of operations were reported as equity income in MillerCoors in the consolidated statements of operations. As a result of the Acquisition, beginning October 11, 2016, MillerCoors' results of operations were consolidated into MCBC's consolidated financial statements.

(3)

The sum of the quarterly net income per share amounts may not agree to the full year net income per share amounts. We calculate net income per share based on the weighted-average number of outstanding shares during the reporting period. The average number of shares fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters.

2015	First				Second				Third				Fourth				Full Year(1)
	(In millions, except per share data)
Sales	$	1,003.2			$	1,433.0			$	1,454.3			$	1,236.9			$	5,127.4
Excise taxes	(303.2		)		(427.3		)		(436.9		)		(392.5		)		(1,559.9		)
Net sales	700.0				1,005.7				1,017.4				844.4				3,567.5
Cost of goods sold	(454.8		)		(579.9		)		(585.9		)		(542.9		)		(2,163.5		)
Gross profit	$	245.2			$	425.8			$	431.5			$	301.5			$	1,404.0
Amounts attributable to Molson Coors Brewing Company:
Net income (loss) from continuing operations	$	79.2			$	229.3			$	13.7			$	33.4			$	355.6
Income (loss) from discontinued operations, net of tax	1.9				(0.3		)		2.9				(0.6		)		3.9
Net income (loss) attributable to Molson Coors Brewing Company	$	81.1			$	229.0			$	16.6			$	32.8			$	359.5
Basic net income (loss) attributable to Molson Coors Brewing Company per share:
From continuing operations	$	0.43			$	1.23			$	0.07			$	0.18			$	1.92
From discontinued operations	0.01				—				0.02				—				0.02
Basic net income (loss) attributable to Molson Coors Brewing Company per share	$	0.44			$	1.23			$	0.09			$	0.18			$	1.94
Diluted net income (loss) attributable to Molson Coors Brewing Company per share:
From continuing operations	$	0.42			$	1.23			$	0.07			$	0.18			$	1.91
From discontinued operations	0.01				—				0.02				—				0.02
Diluted net income (loss) attributable to Molson Coors Brewing Company per share	$	0.43			$	1.23			$	0.09			$	0.18			$	1.93

(1)

The sum of the quarterly net income per share amounts may not agree to the full year net income per share amounts. We calculate net income per share based on the weighted-average number of outstanding shares during the reporting period. The average number of shares fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters.

Adoption of Share-based Payments Accounting Guidance

The following tables present the impacts to previously filed quarterly results resulting from the adoption of the new share-based payments accounting guidance in the third quarter of 2016. See Note 2, "New Accounting Pronouncements" for further discussion of these changes.

The adoption of this guidance impacted our previously reported quarterly results for fiscal years 2016 and 2015, as follows:

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

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

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

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