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(Mark One)
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Quarterly period ended March 31, 2019
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ______ to ______ .
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DELAWARE
(State or other jurisdiction of incorporation or organization)
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84-0178360
(I.R.S. Employer Identification No.)
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1801 California Street, Suite 4600, Denver, Colorado, USA
1555 Notre Dame Street East, Montréal, Québec, Canada
(Address of principal executive offices)
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80202
H2L 2R5
(Zip Code)
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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AOCI
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Accumulated other comprehensive income (loss)
|
CAD
|
Canadian dollar
|
CZK
|
Czech Koruna
|
DBRS
|
A global credit rating agency in Toronto
|
DSUs
|
Deferred stock units
|
EBITDA
|
Earnings before interest, tax, depreciation and amortization
|
EPS
|
Earnings per share
|
EUR
|
Euro
|
FASB
|
Financial Accounting Standards Board
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GBP
|
British Pound
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HRK
|
Croatian Kuna
|
JPY
|
Japanese Yen
|
Moody’s
|
Moody’s Investors Service Limited, a nationally recognized statistical rating organization designated by the SEC
|
OCI
|
Other comprehensive income (loss)
|
OPEB
|
Other postretirement benefit plans
|
PSUs
|
Performance share units
|
RSD
|
Serbian Dinar
|
RSUs
|
Restricted stock units
|
SEC
|
Securities and Exchange Commission
|
Standard & Poor’s
|
Standard and Poor’s Ratings Services, a nationally recognized statistical rating organization designated by the SEC
|
STRs
|
Sales-to-retailers
|
STWs
|
Sales-to-wholesalers
|
2017 Tax Act
|
Tax Cuts and Jobs Act
|
U.K.
|
United Kingdom
|
U.S.
|
United States
|
U.S. GAAP
|
Accounting principles generally accepted in the U.S.
|
USD or $
|
U.S. dollar
|
VIEs
|
Variable interest entities
|
|
Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
Sales
|
$
|
2,800.1
|
|
|
$
|
2,868.0
|
|
Excise taxes
|
(496.8
|
)
|
|
(536.5
|
)
|
||
Net sales
|
2,303.3
|
|
|
2,331.5
|
|
||
Cost of goods sold
|
(1,413.0
|
)
|
|
(1,535.7
|
)
|
||
Gross profit
|
890.3
|
|
|
795.8
|
|
||
Marketing, general and administrative expenses
|
(655.2
|
)
|
|
(681.1
|
)
|
||
Special items, net
|
(13.0
|
)
|
|
314.8
|
|
||
Operating income (loss)
|
222.1
|
|
|
429.5
|
|
||
Interest income (expense), net
|
(73.3
|
)
|
|
(83.2
|
)
|
||
Other pension and postretirement benefits (costs), net
|
8.6
|
|
|
10.0
|
|
||
Other income (expense), net
|
23.9
|
|
|
1.1
|
|
||
Income (loss) before income taxes
|
181.3
|
|
|
357.4
|
|
||
Income tax benefit (expense)
|
(32.2
|
)
|
|
(74.9
|
)
|
||
Net income (loss)
|
149.1
|
|
|
282.5
|
|
||
Net (income) loss attributable to noncontrolling interests
|
2.3
|
|
|
(4.4
|
)
|
||
Net income (loss) attributable to Molson Coors Brewing Company
|
$
|
151.4
|
|
|
$
|
278.1
|
|
|
|
|
|
||||
Net income (loss) attributable to Molson Coors Brewing Company per share:
|
|
|
|
||||
Basic
|
$
|
0.70
|
|
|
$
|
1.29
|
|
Diluted
|
$
|
0.70
|
|
|
$
|
1.28
|
|
|
|
|
|
||||
Weighted-average shares outstanding:
|
|
|
|
||||
Basic
|
216.5
|
|
|
215.8
|
|
||
Dilutive effect of share-based awards
|
0.4
|
|
|
0.8
|
|
||
Diluted
|
216.9
|
|
|
216.6
|
|
||
|
|
|
|
||||
Anti-dilutive securities excluded from the computation of diluted EPS
|
1.1
|
|
|
0.5
|
|
|
Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
Net income (loss) including noncontrolling interests
|
$
|
149.1
|
|
|
$
|
282.5
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Foreign currency translation adjustments
|
71.5
|
|
|
74.1
|
|
||
Unrealized gain (loss) on derivative instruments
|
(29.7
|
)
|
|
(25.8
|
)
|
||
Reclassification of derivative (gain) loss to income
|
0.1
|
|
|
1.1
|
|
||
Amortization of net prior service (benefit) cost and net actuarial (gain) loss to income
|
(0.6
|
)
|
|
1.7
|
|
||
Ownership share of unconsolidated subsidiaries' other comprehensive income (loss)
|
1.0
|
|
|
(1.2
|
)
|
||
Total other comprehensive income (loss), net of tax
|
42.3
|
|
|
49.9
|
|
||
Comprehensive income (loss)
|
191.4
|
|
|
332.4
|
|
||
Comprehensive (income) loss attributable to noncontrolling interests
|
2.1
|
|
|
(5.2
|
)
|
||
Comprehensive income (loss) attributable to Molson Coors Brewing Company
|
$
|
193.5
|
|
|
$
|
327.2
|
|
MOLSON COORS BREWING COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT PAR VALUE)
(UNAUDITED)
|
|||||||
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As of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
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|
||||
Current assets:
|
|
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|
||||
Cash and cash equivalents
|
$
|
234.4
|
|
|
$
|
1,057.9
|
|
Accounts receivable, net
|
909.5
|
|
|
744.4
|
|
||
Other receivables, net
|
141.6
|
|
|
126.6
|
|
||
Inventories, net
|
687.9
|
|
|
591.8
|
|
||
Other current assets, net
|
364.6
|
|
|
245.6
|
|
||
Total current assets
|
2,338.0
|
|
|
2,766.3
|
|
||
Properties, net
|
4,553.3
|
|
|
4,608.3
|
|
||
Goodwill
|
8,279.4
|
|
|
8,260.8
|
|
||
Other intangibles, net
|
13,749.6
|
|
|
13,776.4
|
|
||
Other assets
|
903.3
|
|
|
698.0
|
|
||
Total assets
|
$
|
29,823.6
|
|
|
$
|
30,109.8
|
|
Liabilities and equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and other current liabilities
|
$
|
2,561.3
|
|
|
$
|
2,706.4
|
|
Current portion of long-term debt and short-term borrowings
|
1,641.1
|
|
|
1,594.5
|
|
||
Total current liabilities
|
4,202.4
|
|
|
4,300.9
|
|
||
Long-term debt
|
8,484.8
|
|
|
8,893.8
|
|
||
Pension and postretirement benefits
|
726.9
|
|
|
726.6
|
|
||
Deferred tax liabilities
|
2,151.5
|
|
|
2,128.9
|
|
||
Other liabilities
|
369.9
|
|
|
323.8
|
|
||
Total liabilities
|
15,935.5
|
|
|
16,374.0
|
|
||
Commitments and contingencies (
Note 14
)
|
|
|
|
||||
Molson Coors Brewing Company stockholders' equity
|
|
|
|
||||
Capital stock:
|
|
|
|
||||
Preferred stock, $0.01 par value (authorized: 25.0 shares; none issued)
|
—
|
|
|
—
|
|
||
Class A common stock, $0.01 par value per share (authorized: 500.0 shares; issued and outstanding: 2.6 shares and 2.6 shares, respectively)
|
—
|
|
|
—
|
|
||
Class B common stock, $0.01 par value per share (authorized: 500.0 shares; issued: 205.7 shares and 205.4 shares, respectively)
|
2.0
|
|
|
2.0
|
|
||
Class A exchangeable shares, no par value (issued and outstanding: 2.8 shares and 2.8 shares, respectively)
|
103.2
|
|
|
103.2
|
|
||
Class B exchangeable shares, no par value (issued and outstanding: 14.8 shares and 14.8 shares, respectively)
|
557.6
|
|
|
557.6
|
|
||
Paid-in capital
|
6,776.2
|
|
|
6,773.1
|
|
||
Retained earnings
|
7,862.4
|
|
|
7,692.9
|
|
||
Accumulated other comprehensive income (loss)
|
(1,182.7
|
)
|
|
(1,150.0
|
)
|
||
Class B common stock held in treasury at cost (9.5 shares and 9.5 shares, respectively)
|
(471.4
|
)
|
|
(471.4
|
)
|
||
Total Molson Coors Brewing Company stockholders' equity
|
13,647.3
|
|
|
13,507.4
|
|
||
Noncontrolling interests
|
240.8
|
|
|
228.4
|
|
||
Total equity
|
13,888.1
|
|
|
13,735.8
|
|
||
Total liabilities and equity
|
$
|
29,823.6
|
|
|
$
|
30,109.8
|
|
|
Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss) including noncontrolling interests
|
$
|
149.1
|
|
|
$
|
282.5
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|||
Depreciation and amortization
|
212.9
|
|
|
213.7
|
|
||
Amortization of debt issuance costs and discounts
|
3.7
|
|
|
4.1
|
|
||
Share-based compensation
|
11.4
|
|
|
14.8
|
|
||
(Gain) loss on sale or impairment of properties and other assets, net
|
0.5
|
|
|
0.7
|
|
||
Unrealized (gain) loss on foreign currency fluctuations and derivative instruments, net
|
(57.2
|
)
|
|
83.5
|
|
||
Income tax (benefit) expense
|
32.2
|
|
|
74.9
|
|
||
Income tax (paid) received
|
(8.5
|
)
|
|
(8.9
|
)
|
||
Interest expense, excluding interest amortization
|
72.1
|
|
|
79.3
|
|
||
Interest paid
|
(103.1
|
)
|
|
(115.2
|
)
|
||
Change in current assets and liabilities and other
|
(411.6
|
)
|
|
(314.2
|
)
|
||
Net cash provided by (used in) operating activities
|
(98.5
|
)
|
|
315.2
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Additions to properties
|
(198.0
|
)
|
|
(208.3
|
)
|
||
Proceeds from sales of properties and other assets
|
2.4
|
|
|
1.6
|
|
||
Other
|
1.0
|
|
|
(45.4
|
)
|
||
Net cash provided by (used in) investing activities
|
(194.6
|
)
|
|
(252.1
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Exercise of stock options under equity compensation plans
|
0.6
|
|
|
6.1
|
|
||
Dividends paid
|
(88.7
|
)
|
|
(88.5
|
)
|
||
Payments on debt and borrowings
|
(1,067.2
|
)
|
|
(0.8
|
)
|
||
Net proceeds from (payments on) revolving credit facilities and commercial paper
|
604.3
|
|
|
(248.7
|
)
|
||
Change in overdraft balances and other
|
16.2
|
|
|
42.0
|
|
||
Net cash provided by (used in) financing activities
|
(534.8
|
)
|
|
(289.9
|
)
|
||
Cash and cash equivalents:
|
|
|
|
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(827.9
|
)
|
|
(226.8
|
)
|
||
Effect of foreign exchange rate changes on cash and cash equivalents
|
4.4
|
|
|
6.1
|
|
||
Balance at beginning of year
|
1,057.9
|
|
|
418.6
|
|
||
Balance at end of period
|
$
|
234.4
|
|
|
$
|
197.9
|
|
|
|
|
Molson Coors Brewing Company Stockholders' Equity
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
Common Stock
|
|
|
||||||||||||||||||||
|
|
|
Common stock
|
|
Exchangeable
|
|
|
|
|
|
other
|
|
held in
|
|
Non
|
||||||||||||||||||||||||
|
|
|
issued
|
|
shares issued
|
|
Paid-in-
|
|
Retained
|
|
comprehensive
|
|
treasury
|
|
controlling
|
||||||||||||||||||||||||
|
Total
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
capital
|
|
earnings
|
|
income (loss)
|
|
Class B
|
|
interests
|
||||||||||||||||||||
As of December 31, 2017
|
$
|
13,187.3
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
|
$
|
107.7
|
|
|
$
|
553.2
|
|
|
$
|
6,688.5
|
|
|
$
|
6,958.4
|
|
|
$
|
(860.0
|
)
|
|
$
|
(471.4
|
)
|
|
$
|
208.9
|
|
Shares issued under equity compensation plan
|
(5.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Amortization of share-based compensation
|
14.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Net income (loss) including noncontrolling interests
|
282.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
278.1
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
||||||||||
Other comprehensive income (loss), net of tax
|
49.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49.1
|
|
|
—
|
|
|
0.8
|
|
||||||||||
Adoption of new accounting pronouncement
|
(27.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Contributions from noncontrolling interests
|
6.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.4
|
|
||||||||||
Distributions and dividends to noncontrolling interests
|
(2.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.9
|
)
|
||||||||||
Dividends declared and paid - $0.41 per share
|
(88.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
As of March 31, 2018
|
$
|
13,415.8
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
|
$
|
107.7
|
|
|
$
|
553.2
|
|
|
$
|
6,697.4
|
|
|
$
|
7,120.2
|
|
|
$
|
(810.9
|
)
|
|
$
|
(471.4
|
)
|
|
$
|
217.6
|
|
|
|
|
Molson Coors Brewing Company Stockholders' Equity
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
Common Stock
|
|
|
||||||||||||||||||||
|
|
|
Common stock
|
|
Exchangeable
|
|
|
|
|
|
other
|
|
held in
|
|
Non
|
||||||||||||||||||||||||
|
|
|
issued
|
|
shares issued
|
|
Paid-in-
|
|
Retained
|
|
comprehensive
|
|
treasury
|
|
controlling
|
||||||||||||||||||||||||
|
Total
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
capital
|
|
earnings
|
|
income (loss)
|
|
Class B
|
|
interests
|
||||||||||||||||||||
As of December 31, 2018
|
$
|
13,735.8
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
|
$
|
103.2
|
|
|
$
|
557.6
|
|
|
$
|
6,773.1
|
|
|
$
|
7,692.9
|
|
|
$
|
(1,150.0
|
)
|
|
$
|
(471.4
|
)
|
|
$
|
228.4
|
|
Shares issued under equity compensation plan
|
(8.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Amortization of share-based compensation
|
11.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Net income (loss) including noncontrolling interests
|
149.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
151.4
|
|
|
—
|
|
|
—
|
|
|
(2.3
|
)
|
||||||||||
Other comprehensive income (loss), net of tax
|
42.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42.1
|
|
|
—
|
|
|
0.2
|
|
||||||||||
Adoption of lease accounting standard (see
Note 2
)
|
32.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Reclassification of stranded tax effects (see
Note 2
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74.8
|
|
|
(74.8
|
)
|
|
—
|
|
|
—
|
|
||||||||||
Contributions from noncontrolling interests
|
14.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14.5
|
|
||||||||||
Dividends declared and paid - $0.41 per share
|
(88.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
As of March 31, 2019
|
$
|
13,888.1
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
|
$
|
103.2
|
|
|
$
|
557.6
|
|
|
$
|
6,776.2
|
|
|
$
|
7,862.4
|
|
|
$
|
(1,182.7
|
)
|
|
$
|
(471.4
|
)
|
|
$
|
240.8
|
|
|
Three Months Ended March 31, 2019
|
||
|
(In millions)
|
||
Operating lease expense
|
$
|
17.2
|
|
Finance lease expense
|
2.8
|
|
|
Total lease expense
|
$
|
20.0
|
|
|
Three Months Ended March 31, 2019
|
||
|
(In millions)
|
||
Cash paid for amounts included in the measurements of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
12.0
|
|
Operating cash flows from finance leases
|
$
|
0.8
|
|
Financing cash flows from finance leases
|
$
|
0.6
|
|
Supplemental non-cash information on right-of-use assets obtained in exchange for new lease liabilities:
|
|
||
Operating leases
|
$
|
10.7
|
|
Finance leases
|
$
|
—
|
|
|
|
As of March 31, 2019
|
||
|
Balance Sheet Classification
|
(In millions)
|
||
Operating Leases
|
|
|
||
Operating lease right-of-use assets
|
Other assets
|
$
|
154.1
|
|
Current operating lease liabilities
|
Accounts payable and other current liabilities
|
$
|
43.6
|
|
Non-current operating lease liabilities
|
Other liabilities
|
121.4
|
|
|
Total operating lease liabilities
|
|
$
|
165.0
|
|
|
|
|
||
Finance Leases
|
|
|
||
Finance lease right-of-use assets
|
Properties, net
|
$
|
68.4
|
|
Current finance lease liabilities
|
Current portion of long-term debt and short-term borrowings
|
$
|
3.3
|
|
Non-current finance lease liabilities
|
Long-term debt
|
82.5
|
|
|
Total finance lease liabilities
|
|
$
|
85.8
|
|
|
Weighted-Average Remaining Lease Term (Years)
|
|
Weighted-Average Discount Rate
|
Operating leases
|
4.8
|
|
4.2%
|
Finance leases
|
10.1
|
|
6.4%
|
|
Operating Leases
|
|
Finance Leases
|
||||
|
(In millions)
|
||||||
2019 - remaining
|
$
|
38.4
|
|
|
$
|
4.5
|
|
2020
|
41.9
|
|
|
36.3
|
|
||
2021
|
34.7
|
|
|
6.0
|
|
||
2022
|
27.1
|
|
|
5.9
|
|
||
2023
|
18.9
|
|
|
5.9
|
|
||
Thereafter
|
21.0
|
|
|
66.0
|
|
||
Total lease payments
|
$
|
182.0
|
|
|
$
|
124.6
|
|
Less: interest
|
(17.0
|
)
|
|
(38.8
|
)
|
||
Present value of lease liabilities
|
$
|
165.0
|
|
|
$
|
85.8
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
Year
|
(In millions)
|
||||||
2019
|
$
|
49.4
|
|
|
$
|
6.1
|
|
2020
|
40.2
|
|
|
36.2
|
|
||
2021
|
32.6
|
|
|
5.9
|
|
||
2022
|
24.6
|
|
|
5.9
|
|
||
2023
|
17.0
|
|
|
5.8
|
|
||
Thereafter
|
21.0
|
|
|
64.2
|
|
||
Total future minimum lease payments
|
$
|
184.8
|
|
|
$
|
124.1
|
|
Less: interest on finance leases
|
|
|
(38.8
|
)
|
|||
Present value of future minimum finance lease payments
|
|
|
$
|
85.3
|
|
|
Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
|
(In millions)
|
||||||
U.S.
|
$
|
1,659.2
|
|
|
$
|
1,647.8
|
|
Canada
|
261.0
|
|
|
283.8
|
|
||
Europe
|
362.9
|
|
|
374.3
|
|
||
International
|
47.9
|
|
|
57.5
|
|
||
Corporate
|
0.2
|
|
|
0.2
|
|
||
Inter-segment net sales eliminations
|
(27.9
|
)
|
|
(32.1
|
)
|
||
Consolidated net sales
|
$
|
2,303.3
|
|
|
$
|
2,331.5
|
|
|
Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
|
(In millions)
|
||||||
U.S.
|
$
|
269.4
|
|
|
$
|
261.7
|
|
Canada
(1)
|
21.8
|
|
|
9.1
|
|
||
Europe
|
(27.5
|
)
|
|
(29.9
|
)
|
||
International
|
(0.3
|
)
|
|
3.7
|
|
||
Corporate
(2)
|
(82.1
|
)
|
|
112.8
|
|
||
Consolidated income (loss) before income taxes
|
$
|
181.3
|
|
|
$
|
357.4
|
|
(1)
|
During the three months ended March 31, 2019, we recorded an unrealized mark-to-market gain of approximately
$23 million
on the HEXO Corp. ("HEXO") warrants received in connection with the formation of the Truss joint venture. Additionally, during the first quarter of 2019, we received payment and recorded a gain of
$1.5 million
resulting from a purchase price adjustment related to the historical sale of Molson Inc.’s ownership interest in the Montreal Canadiens, which is considered an affiliate of MCBC.
|
(2)
|
During the three months ended March 31, 2018, we recorded a gain of
$328.0 million
related to the Adjustment Amount as defined and further discussed in
Note 6, "Special Items."
Additionally, related to the unrealized mark-to-market valuation on our commodity hedge positions, we recorded an unrealized gain of
$34.1 million
during the
three
months ended
March 31, 2019
compared to an unrealized loss of
$84.7 million
during the
three
months ended
March 31, 2018
.
|
|
As of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(In millions)
|
||||||
U.S.
|
$
|
19,247.7
|
|
|
$
|
19,057.1
|
|
Canada
|
4,736.0
|
|
|
4,640.5
|
|
||
Europe
|
5,334.1
|
|
|
5,430.0
|
|
||
International
|
277.5
|
|
|
274.1
|
|
||
Corporate
|
228.3
|
|
|
708.1
|
|
||
Consolidated total assets
|
$
|
29,823.6
|
|
|
$
|
30,109.8
|
|
|
As of
|
||||||||||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Total Assets
|
|
Total Liabilities
|
|
Total Assets
|
|
Total Liabilities
|
||||||||
|
(In millions)
|
||||||||||||||
RMMC/RMBC
|
$
|
212.2
|
|
|
$
|
31.9
|
|
|
$
|
189.8
|
|
|
$
|
35.0
|
|
Other
|
$
|
29.5
|
|
|
$
|
1.7
|
|
|
$
|
31.0
|
|
|
$
|
5.1
|
|
|
Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
|
(In millions)
|
||||||
Pretax compensation expense
|
$
|
11.4
|
|
|
$
|
14.8
|
|
Tax benefit
|
(1.2
|
)
|
|
(1.6
|
)
|
||
After-tax compensation expense
|
$
|
10.2
|
|
|
$
|
13.2
|
|
|
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, 2018
|
1.0
|
|
|
$88.53
|
|
0.5
|
|
|
$86.85
|
Granted
|
0.4
|
|
|
$54.46
|
|
0.3
|
|
|
$53.31
|
Vested
|
(0.3
|
)
|
|
$100.91
|
|
(0.1
|
)
|
|
$90.41
|
Forfeited
|
—
|
|
|
$—
|
|
—
|
|
|
$—
|
Non-vested as of March 31, 2019
|
1.1
|
|
|
$70.06
|
|
0.7
|
|
|
$71.42
|
|
Stock options
|
||||||||
|
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, 2018
|
1.3
|
|
$70.56
|
|
5.2
|
|
$
|
4.3
|
|
Granted
|
0.3
|
|
$61.09
|
|
|
|
|
||
Exercised
|
—
|
|
$—
|
|
|
|
|
||
Forfeited
|
—
|
|
$—
|
|
|
|
|
||
Outstanding as of March 31, 2019
|
1.6
|
|
$68.70
|
|
6.0
|
|
$
|
5.4
|
|
Expected to vest as of March 31, 2019
|
0.5
|
|
$68.79
|
|
9.4
|
|
$
|
—
|
|
Exercisable as of March 31, 2019
|
1.1
|
|
$68.66
|
|
4.3
|
|
$
|
5.4
|
|
|
Three Months Ended
|
||
|
March 31, 2019
|
|
March 31, 2018
|
Risk-free interest rate
|
2.52%
|
|
2.65%
|
Dividend yield
|
4.17%
|
|
2.08%
|
Volatility range
|
24.41%-24.48%
|
|
22.36%-24.14%
|
Weighted-average volatility
|
24.42%
|
|
22.81%
|
Expected term (years)
|
5.3
|
|
5.3
|
Weighted-average fair market value
|
$9.24
|
|
$15.44
|
|
Three Months Ended
|
||
|
March 31, 2019
|
|
March 31, 2018
|
Risk-free interest rate
|
2.49%
|
|
2.34%
|
Dividend yield
|
4.17%
|
|
2.08%
|
Volatility range
|
13.82%-42.46%
|
|
13.03%-81.87%
|
Weighted-average volatility
|
24.97%
|
|
22.76%
|
Expected term (years)
|
2.8
|
|
2.8
|
Weighted-average fair market value
|
$53.31
|
|
$78.30
|
|
Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
|
(In millions)
|
||||||
Employee-related charges
|
|
|
|
||||
Restructuring
|
$
|
3.7
|
|
|
$
|
3.9
|
|
Impairments or asset abandonment charges
(1)
|
|
|
|
||||
U.S. - Asset abandonment
|
0.8
|
|
|
1.5
|
|
||
Canada - Asset abandonment
|
7.6
|
|
|
6.1
|
|
||
Europe - Asset abandonment
|
0.6
|
|
|
1.7
|
|
||
Termination fees and other (gains) losses
|
|
|
|
||||
International
|
0.3
|
|
|
—
|
|
||
Purchase price adjustment settlement gain
(2)
|
—
|
|
|
(328.0
|
)
|
||
Total Special items, net
|
$
|
13.0
|
|
|
$
|
(314.8
|
)
|
(1)
|
Charges for the three months ended
March 31, 2019
and
March 31, 2018
consist primarily of accelerated depreciation in excess of normal depreciation related to the closure of the Colfax, California cidery, which was completed during the first quarter of 2019, the planned closures of the Vancouver and Montreal breweries, which are currently expected to occur in 2019 and 2021, respectively, as well as the Burton South, U.K. brewery which closed in the first quarter of 2018.
|
(2)
|
During the first quarter of 2018, we received
$330.0 million
from ABI, of which
$328.0 million
constituted a purchase price adjustment (the "Adjustment Amount"), related to the Miller International Business which was acquired in our acquisition of the remaining portion of MillerCoors which occurred on
October 11, 2016
. As this settlement occurred following the finalization of purchase accounting, we recorded the settlement proceeds related to the Adjustment Amount as a gain within special items, net in our unaudited condensed consolidated statement of operations in our Corporate segment and within cash provided by operating activities in our unaudited condensed consolidated statement of cash flows for the
three
months ended
March 31, 2018
.
|
|
U.S.
|
|
Canada
|
|
Europe
|
|
International
|
|
Corporate
|
|
Total
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
As of December 31, 2018
|
$
|
21.6
|
|
|
$
|
1.5
|
|
|
$
|
0.6
|
|
|
$
|
0.6
|
|
|
$
|
1.3
|
|
|
$
|
25.6
|
|
Charges incurred and changes in estimates
|
0.6
|
|
|
—
|
|
|
2.7
|
|
|
0.1
|
|
|
0.3
|
|
|
3.7
|
|
||||||
Payments made
|
(11.6
|
)
|
|
(0.1
|
)
|
|
(0.8
|
)
|
|
(0.1
|
)
|
|
(0.3
|
)
|
|
(12.9
|
)
|
||||||
As of March 31, 2019
|
$
|
10.6
|
|
|
$
|
1.4
|
|
|
$
|
2.5
|
|
|
$
|
0.6
|
|
|
$
|
1.3
|
|
|
$
|
16.4
|
|
|
U.S.
|
|
Canada
|
|
Europe
|
|
International
|
|
Corporate
|
|
Total
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
As of December 31, 2017
|
$
|
0.6
|
|
|
$
|
4.3
|
|
|
$
|
1.8
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
6.9
|
|
Charges incurred and changes in estimates
|
—
|
|
|
(0.5
|
)
|
|
3.4
|
|
|
1.0
|
|
|
—
|
|
|
3.9
|
|
||||||
Payments made
|
(0.3
|
)
|
|
(0.9
|
)
|
|
(0.6
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(2.0
|
)
|
||||||
Foreign currency and other adjustments
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||||
As of March 31, 2018
|
$
|
0.3
|
|
|
$
|
2.8
|
|
|
$
|
4.6
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
8.7
|
|
|
Three Months Ended
|
||||
|
March 31, 2019
|
|
March 31, 2018
|
||
Effective tax rate
|
18
|
%
|
|
21
|
%
|
|
U.S.
|
|
Canada
|
|
Europe
|
|
International
|
|
Consolidated
|
||||||||||
Changes in Goodwill:
|
|
|
(In millions)
|
||||||||||||||||
As of December 31, 2018
|
$
|
5,928.5
|
|
|
$
|
856.6
|
|
|
$
|
1,469.4
|
|
|
$
|
6.3
|
|
|
$
|
8,260.8
|
|
Foreign currency translation
|
—
|
|
|
18.5
|
|
|
0.1
|
|
|
—
|
|
|
18.6
|
|
|||||
As of March 31, 2019
|
$
|
5,928.5
|
|
|
$
|
875.1
|
|
|
$
|
1,469.5
|
|
|
$
|
6.3
|
|
|
$
|
8,279.4
|
|
|
Useful life
|
|
Gross
|
|
Accumulated
amortization
|
|
Net
|
||||||
|
(Years)
|
|
(In millions)
|
||||||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
||||||
Brands
|
10 - 50
|
|
$
|
5,013.8
|
|
|
$
|
(737.0
|
)
|
|
$
|
4,276.8
|
|
License agreements and distribution rights
|
15 - 28
|
|
222.8
|
|
|
(99.5
|
)
|
|
123.3
|
|
|||
Other
|
2 - 40
|
|
129.2
|
|
|
(35.6
|
)
|
|
93.6
|
|
|||
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
||||||
Brands
|
Indefinite
|
|
8,160.5
|
|
|
—
|
|
|
8,160.5
|
|
|||
Distribution networks
|
Indefinite
|
|
757.8
|
|
|
—
|
|
|
757.8
|
|
|||
Other
|
Indefinite
|
|
337.6
|
|
|
—
|
|
|
337.6
|
|
|||
Total
|
|
|
$
|
14,621.7
|
|
|
$
|
(872.1
|
)
|
|
$
|
13,749.6
|
|
|
Useful life
|
|
Gross
|
|
Accumulated
amortization
|
|
Net
|
||||||
|
(Years)
|
|
(In millions)
|
||||||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
||||||
Brands
|
10 - 50
|
|
$
|
4,988.0
|
|
|
$
|
(682.4
|
)
|
|
$
|
4,305.6
|
|
License agreements and distribution rights
|
15 - 28
|
|
220.2
|
|
|
(95.7
|
)
|
|
124.5
|
|
|||
Other
|
2 - 40
|
|
129.2
|
|
|
(32.2
|
)
|
|
97.0
|
|
|||
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
||||||
Brands
|
Indefinite
|
|
8,169.9
|
|
|
—
|
|
|
8,169.9
|
|
|||
Distribution networks
|
Indefinite
|
|
741.8
|
|
|
—
|
|
|
741.8
|
|
|||
Other
|
Indefinite
|
|
337.6
|
|
|
—
|
|
|
337.6
|
|
|||
Total
|
|
|
$
|
14,586.7
|
|
|
$
|
(810.3
|
)
|
|
$
|
13,776.4
|
|
Fiscal year
|
|
Amount
|
||
|
|
(In millions)
|
||
2019 - remaining
|
|
$
|
165.8
|
|
2020
|
|
$
|
220.1
|
|
2021
|
|
$
|
213.8
|
|
2022
|
|
$
|
209.2
|
|
2023
|
|
$
|
208.2
|
|
|
As of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(In millions)
|
||||||
Long-term debt:
|
|
|
|
||||
CAD 500 million 2.75% notes due 2020
|
$
|
374.6
|
|
|
$
|
366.6
|
|
CAD 500 million 2.84% notes due 2023
|
374.6
|
|
|
366.6
|
|
||
CAD 500 million 3.44% notes due 2026
|
374.6
|
|
|
366.6
|
|
||
$500 million 1.45% notes due 2019
|
500.0
|
|
|
500.0
|
|
||
$500 million 1.9% notes due 2019
|
—
|
|
|
499.8
|
|
||
$500 million 2.25% notes due 2020
(1)(2)
|
499.2
|
|
|
499.0
|
|
||
$1.0 billion 2.1% notes due 2021
(2)
|
1,000.0
|
|
|
1,000.0
|
|
||
$500 million 3.5% notes due 2022
(1)
|
508.6
|
|
|
509.3
|
|
||
$2.0 billion 3.0% notes due 2026
|
2,000.0
|
|
|
2,000.0
|
|
||
$1.1 billion 5.0% notes due 2042
|
1,100.0
|
|
|
1,100.0
|
|
||
$1.8 billion 4.2% notes due 2046
|
1,800.0
|
|
|
1,800.0
|
|
||
EUR 500 million notes due 2019
|
—
|
|
|
573.4
|
|
||
EUR 800 million 1.25% notes due 2024
|
897.4
|
|
|
917.4
|
|
||
Finance leases and other
(3)
|
131.3
|
|
|
43.0
|
|
||
Less: unamortized debt discounts and debt issuance costs
|
(62.5
|
)
|
|
(64.8
|
)
|
||
Total long-term debt (including current portion)
|
9,497.8
|
|
|
10,476.9
|
|
||
Less: current portion of long-term debt
|
(1,013.0
|
)
|
|
(1,583.1
|
)
|
||
Total long-term debt
|
$
|
8,484.8
|
|
|
$
|
8,893.8
|
|
|
|
|
|
||||
Short-term borrowings:
|
|
|
|
||||
Commercial paper program
(4)
|
$
|
604.2
|
|
|
$
|
—
|
|
Other short-term borrowings
(5)
|
23.9
|
|
|
11.4
|
|
||
Current portion of long-term debt
|
1,013.0
|
|
|
1,583.1
|
|
||
Current portion of long-term debt and short-term borrowings
|
$
|
1,641.1
|
|
|
$
|
1,594.5
|
|
(1)
|
The fair value hedges related to these notes have been settled and are being amortized over the life of the respective note.
|
(2)
|
During the first quarter of 2019, we entered into cross currency swaps in order to hedge a portion of the foreign currency translational impacts of our European investment. As a result of the swaps, we economically converted a portion of our
$1.0 billion
2.1%
senior notes due 2021 and associated interest to EUR denominated, which will result in a EUR interest rate to be received at
0.71%
. As of
March 31, 2019
, we also held outstanding cross currency swaps on our
$500 million
2.25%
notes due 2020 which resulted in a EUR interest rate to be received of
0.85%
. See
Note 12, "Derivative Instruments and Hedging Activities"
for further details.
|
(3)
|
As of
January 1, 2019
, we reclassified approximately
$3 million
and
$82 million
of short-term and long-term finance lease liabilities from accounts payable and other current liabilities and other non-current liabilities to current portion of long-term debt and short-term borrowings and long-term debt, respectively, in connection with our adoption of the new lease accounting standard. See
Note 2, "New Accounting Pronouncements"
for further details.
|
(4)
|
During the first quarter of 2019, we used proceeds from the issuance of commercial paper to partially fund the repayment of our notes upon maturity. As of
March 31, 2019
, the outstanding borrowings under our commercial paper program had a weighted-average effective interest rate and tenor of
2.91%
and
33
days, respectively.
|
(5)
|
As of
March 31, 2019
, we had
$11.6 million
in bank overdrafts and
$40.4 million
in bank cash related to our cross-border, cross-currency cash pool, for a net positive position of
$28.8 million
. As of
December 31, 2018
, we had
$1.1 million
in bank overdrafts and
$88.9 million
in bank cash related to our cross-border, cross-currency cash pool for a net positive position of
$87.8 million
. We had total outstanding borrowings of
$8.1 million
and
$7.3 million
under our two JPY overdraft facilities as of
March 31, 2019
and
December 31, 2018
, respectively. In addition, we have USD and CAD lines of credit under which we had no borrowings as of
March 31, 2019
or
December 31, 2018
.
|
|
As of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(In millions)
|
||||||
Finished goods
|
$
|
314.2
|
|
|
$
|
229.8
|
|
Work in process
|
86.3
|
|
|
83.4
|
|
||
Raw materials
|
219.7
|
|
|
224.3
|
|
||
Packaging materials
|
67.7
|
|
|
54.3
|
|
||
Inventories, net
|
$
|
687.9
|
|
|
$
|
591.8
|
|
|
MCBC shareholders
|
||||||||||||||||||
|
Foreign
currency
translation
adjustments
|
|
Gain (loss) on
derivative
and non-derivative instruments
|
|
Pension and
postretirement
benefit
adjustments
|
|
Equity method
investments
|
|
Accumulated
other
comprehensive
income (loss)
|
||||||||||
|
(In millions)
|
||||||||||||||||||
As of December 31, 2018
|
$
|
(744.7
|
)
|
|
$
|
(17.8
|
)
|
|
$
|
(327.2
|
)
|
|
$
|
(60.3
|
)
|
|
$
|
(1,150.0
|
)
|
Foreign currency translation adjustments
|
4.6
|
|
|
72.8
|
|
|
—
|
|
|
—
|
|
|
77.4
|
|
|||||
Unrealized gain (loss) on derivative instruments
|
—
|
|
|
(39.4
|
)
|
|
—
|
|
|
—
|
|
|
(39.4
|
)
|
|||||
Reclassification of derivative (gain) loss to income
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||
Amortization of net prior service (benefit) cost and net actuarial (gain) loss to income
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
(0.9
|
)
|
|||||
Ownership share of unconsolidated subsidiaries' other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
1.4
|
|
|||||
Tax benefit (expense)
|
12.1
|
|
|
(8.5
|
)
|
|
0.3
|
|
|
(0.4
|
)
|
|
3.5
|
|
|||||
Net current-period other comprehensive income (loss)
|
16.7
|
|
|
25.0
|
|
|
(0.6
|
)
|
|
1.0
|
|
|
42.1
|
|
|||||
Reclassification of stranded tax effects
(see
Note 2
)
|
(61.0
|
)
|
|
(16.1
|
)
|
|
2.3
|
|
|
—
|
|
|
(74.8
|
)
|
|||||
As of March 31, 2019
|
$
|
(789.0
|
)
|
|
$
|
(8.9
|
)
|
|
$
|
(325.5
|
)
|
|
$
|
(59.3
|
)
|
|
$
|
(1,182.7
|
)
|
|
Three Months Ended
|
|
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
|
|
||||
|
Reclassifications from AOCI
|
|
Location of gain (loss)
recognized in income
|
||||||
|
(In millions)
|
|
|
||||||
Gain/(loss) on cash flow hedges:
|
|
|
|
|
|
||||
Forward starting interest rate swaps
|
$
|
(0.7
|
)
|
|
$
|
(0.8
|
)
|
|
Interest expense, net
|
Foreign currency forwards
|
0.8
|
|
|
(0.6
|
)
|
|
Cost of goods sold
|
||
Foreign currency forwards
|
(0.2
|
)
|
|
—
|
|
|
Other income (expense), net
|
||
Total income (loss) reclassified, before tax
|
(0.1
|
)
|
|
(1.4
|
)
|
|
|
||
Income tax benefit (expense)
|
—
|
|
|
0.3
|
|
|
|
||
Net income (loss) reclassified, net of tax
|
$
|
(0.1
|
)
|
|
$
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
||||
Amortization of defined benefit pension and other postretirement benefit plan items:
|
|
|
|
|
|
||||
Prior service benefit (cost)
|
$
|
(0.1
|
)
|
|
$
|
(0.2
|
)
|
|
Other pension and postretirement benefits (costs), net
|
Curtailment and net actuarial gain (loss)
|
1.0
|
|
|
(1.7
|
)
|
|
Other pension and postretirement benefits (costs), net
|
||
Total income (loss) reclassified, before tax
|
0.9
|
|
|
(1.9
|
)
|
|
|
||
Income tax benefit (expense)
|
(0.3
|
)
|
|
0.2
|
|
|
|
||
Net income (loss) reclassified, net of tax
|
$
|
0.6
|
|
|
$
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
||||
Total income (loss) reclassified, net of tax
|
$
|
0.5
|
|
|
$
|
(2.8
|
)
|
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||
Expected term (years)
|
2.5
|
|
|
2.8
|
|
Estimated volatility
|
74.92
|
%
|
|
88.71
|
%
|
Risk-free interest rate
|
1.65
|
%
|
|
2.04
|
%
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
|
|
Fair value measurements as of March 31, 2019
|
||||||||||||
|
As of March 31, 2019
|
|
Quoted prices in
active markets
(Level 1)
|
|
Significant other
observable inputs
(Level 2)
|
|
Significant
unobservable
inputs (Level 3)
|
||||||||
|
(In millions)
|
||||||||||||||
Cross currency swaps
|
$
|
52.6
|
|
|
$
|
—
|
|
|
$
|
52.6
|
|
|
$
|
—
|
|
Interest rate swaps
|
(44.7
|
)
|
|
—
|
|
|
(44.7
|
)
|
|
—
|
|
||||
Foreign currency forwards
|
9.0
|
|
|
—
|
|
|
9.0
|
|
|
—
|
|
||||
Commodity swaps and options
|
(7.6
|
)
|
|
—
|
|
|
(7.6
|
)
|
|
—
|
|
||||
Warrants
|
43.0
|
|
|
—
|
|
|
43.0
|
|
|
—
|
|
||||
Total
|
$
|
52.3
|
|
|
$
|
—
|
|
|
$
|
52.3
|
|
|
$
|
—
|
|
|
|
|
Fair value measurements as of December 31, 2018
|
||||||||||||
|
As of December 31, 2018
|
|
Quoted prices in
active markets
(Level 1)
|
|
Significant other
observable inputs
(Level 2)
|
|
Significant
unobservable
inputs (Level 3)
|
||||||||
|
(In millions)
|
||||||||||||||
Cross currency swaps
|
$
|
36.5
|
|
|
$
|
—
|
|
|
$
|
36.5
|
|
|
$
|
—
|
|
Interest rate swaps
|
(12.3
|
)
|
|
—
|
|
|
(12.3
|
)
|
|
—
|
|
||||
Foreign currency forwards
|
16.3
|
|
|
—
|
|
|
16.3
|
|
|
—
|
|
||||
Commodity swaps and options
|
(42.0
|
)
|
|
—
|
|
|
(42.0
|
)
|
|
—
|
|
||||
Warrants
|
19.6
|
|
|
—
|
|
|
19.6
|
|
|
—
|
|
||||
Total
|
$
|
18.1
|
|
|
$
|
—
|
|
|
$
|
18.1
|
|
|
$
|
—
|
|
|
As of March 31, 2019
|
||||||||||||||
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||
|
Notional amount
|
|
Balance sheet location
|
|
Fair value
|
|
Balance sheet location
|
|
Fair value
|
||||||
Derivatives designated as hedging instruments:
|
|||||||||||||||
Cross currency swaps
|
$
|
900.0
|
|
|
Other current assets
|
|
$
|
47.3
|
|
|
Accounts payable and other current liabilities
|
|
$
|
—
|
|
|
|
|
Other non-current assets
|
|
5.3
|
|
|
Other liabilities
|
|
—
|
|
||||
Interest rate swaps
|
$
|
1,500.0
|
|
|
Other non-current assets
|
|
—
|
|
|
Other liabilities
|
|
(44.7
|
)
|
||
Foreign currency forwards
|
$
|
311.6
|
|
|
Other current assets
|
|
4.3
|
|
|
Accounts payable and other current liabilities
|
|
(0.1
|
)
|
||
|
|
|
Other non-current assets
|
|
4.8
|
|
|
Other liabilities
|
|
—
|
|
||||
Total derivatives designated as hedging instruments
|
|
$
|
61.7
|
|
|
|
|
$
|
(44.8
|
)
|
|||||
Derivatives not designated as hedging instruments:
|
|||||||||||||||
Commodity swaps
(1)
|
$
|
781.8
|
|
|
Other current assets
|
|
$
|
22.1
|
|
|
Accounts payable and other current liabilities
|
|
$
|
(27.1
|
)
|
|
|
|
Other non-current assets
|
|
7.7
|
|
|
Other liabilities
|
|
(10.3
|
)
|
||||
Commodity options
(1)
|
$
|
46.6
|
|
|
Other current assets
|
|
0.2
|
|
|
Accounts payable and other current liabilities
|
|
(0.2
|
)
|
||
Warrants
|
$
|
51.7
|
|
|
Other non-current assets
|
|
43.0
|
|
|
|
|
|
|||
Total derivatives not designated as hedging instruments
|
|
$
|
73.0
|
|
|
|
|
$
|
(37.6
|
)
|
(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.
|
Three Months Ended March 31, 2019
|
||||||||||
Derivatives in cash flow hedge relationships
|
|
Amount of gain (loss) recognized
in OCI on derivative |
|
Location of gain (loss)
reclassified from AOCI into income |
|
Amount of gain
(loss) recognized from AOCI on derivative |
||||
Forward starting interest rate swaps
|
|
$
|
(32.4
|
)
|
|
Interest expense, net
|
|
$
|
(0.7
|
)
|
Foreign currency forwards
|
|
(7.0
|
)
|
|
Cost of goods sold
|
|
0.8
|
|
||
|
|
|
|
|
Other income (expense), net
|
|
(0.2
|
)
|
||
Total
|
|
$
|
(39.4
|
)
|
|
|
|
$
|
(0.1
|
)
|
Three Months Ended March 31, 2019
|
||||||||||||||||
Derivatives in net investment hedge relationships
|
|
Amount of gain (loss) recognized in OCI on derivative
|
|
Location of gain (loss) reclassified from AOCI into income
|
|
Amount of gain (loss) recognized from AOCI on derivative
|
|
Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)
|
|
Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)
(1)
|
||||||
$500 million 2020 cross currency swaps
|
|
$
|
10.8
|
|
|
Interest income (expense), net
|
|
$
|
—
|
|
|
Interest income (expense), net
|
|
$
|
3.7
|
|
$400 million 2021 cross currency swaps
|
|
5.3
|
|
|
Interest income (expense), net
|
|
—
|
|
|
Interest income (expense), net
|
|
0.3
|
|
|||
Total
|
|
$
|
16.1
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
4.0
|
|
(1)
|
Represents amounts excluded from the assessment of effectiveness for which the difference between changes in fair value and period amortization is recorded in other comprehensive income.
|
Three Months Ended March 31, 2019
|
||||||||||||||||
Non-derivative financial instruments in net investment hedge relationships
|
|
Amount of gain (loss) recognized in OCI on derivative
|
|
Location of gain (loss) reclassified from AOCI into income
|
|
Amount of gain (loss) recognized from AOCI on derivative
|
|
Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)
|
|
Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)
|
||||||
EUR 800 million notes due 2024
|
|
$
|
20.0
|
|
|
Other income (expense), net
|
|
$
|
—
|
|
|
Other income (expense), net
|
|
$
|
—
|
|
EUR 500 million notes due 2019
|
|
10.1
|
|
|
Other income (expense), net
|
|
—
|
|
|
Other income (expense), net
|
|
—
|
|
|||
Total
|
|
$
|
30.1
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||
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
|
|
$
|
(0.8
|
)
|
|
Interest expense, net
|
|
$
|
—
|
|
Foreign currency forwards
|
|
7.5
|
|
|
Cost of goods sold
|
|
(0.6
|
)
|
|
Cost of goods sold
|
|
—
|
|
|||
Total
|
|
$
|
7.5
|
|
|
|
|
$
|
(1.4
|
)
|
|
|
|
$
|
—
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||
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
|
|
$
|
(25.5
|
)
|
|
Other income (expense), net
|
|
$
|
—
|
|
|
Other income (expense), net
|
|
$
|
—
|
|
EUR 500 million notes due 2019
|
|
(16.0
|
)
|
|
Other income (expense), net
|
|
—
|
|
|
Other income (expense), net
|
|
—
|
|
|||
Total
|
|
$
|
(41.5
|
)
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location and amount of gain (loss) recognized in income on fair value and cash flow hedging relationships
(1)
|
||||||||||
|
|
Three Months Ended March 31, 2019
|
||||||||||
|
|
Cost of goods sold
|
|
Other income (expense), net
|
|
Interest income (expense), net
|
||||||
Total amount of income and expense line items presented in the unaudited condensed consolidated statement of operations in which the effects of fair value or cash flow hedges are recorded
|
|
$
|
(1,413.0
|
)
|
|
$
|
23.9
|
|
|
$
|
(73.3
|
)
|
Gain (loss) on cash flow hedging relationships:
|
|
|
|
|
|
|
||||||
Forward starting interest rate swaps
|
|
|
|
|
|
|
||||||
Amount of gain (loss) reclassified from AOCI into income
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|||
Foreign currency forwards
|
|
|
|
|
|
|
||||||
Amount of gain (loss) reclassified from AOCI into income
|
|
0.8
|
|
|
(0.2
|
)
|
|
—
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2019
|
||||||
Derivatives not in hedging relationships
|
|
Location of gain (loss) recognized in
income on derivative
|
|
Amount of gain (loss) recognized in
income on derivative
|
||
Commodity swaps
|
|
Cost of goods sold
|
|
$
|
32.7
|
|
Warrants
|
|
Other income (expense), net
|
|
22.9
|
|
|
Total
|
|
|
|
$
|
55.6
|
|
Three Months Ended March 31, 2018
|
||||||
Derivatives not in hedging relationships
|
|
Location of gain (loss) recognized in
income on derivative
|
|
Amount of gain (loss) recognized in
income on derivative
|
||
Commodity swaps
|
|
Cost of goods sold
|
|
$
|
(74.4
|
)
|
Total
|
|
|
|
$
|
(74.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||||||||||||||||||
|
Pension
|
|
OPEB
|
|
Consolidated
|
|
Pension
|
|
OPEB
|
|
Consolidated
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Service cost:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Service cost
|
$
|
1.0
|
|
|
$
|
1.8
|
|
|
$
|
2.8
|
|
|
$
|
1.4
|
|
|
$
|
2.3
|
|
|
$
|
3.7
|
|
Other pension and postretirement costs (benefits), net:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest cost
|
$
|
40.7
|
|
|
$
|
6.5
|
|
|
$
|
47.2
|
|
|
$
|
41.2
|
|
|
$
|
6.6
|
|
|
$
|
47.8
|
|
Expected return on plan assets
|
(54.9
|
)
|
|
—
|
|
|
(54.9
|
)
|
|
(59.7
|
)
|
|
—
|
|
|
(59.7
|
)
|
||||||
Amortization of prior service cost (benefit)
|
0.3
|
|
|
(0.2
|
)
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||||
Amortization of net actuarial loss (gain)
|
2.5
|
|
|
(3.5
|
)
|
|
(1.0
|
)
|
|
1.9
|
|
|
(0.3
|
)
|
|
1.6
|
|
||||||
Curtailment, settlement or special termination benefit loss (gain)
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||||
Total other pension and postretirement cost (benefits), net
|
$
|
(11.4
|
)
|
|
$
|
2.8
|
|
|
$
|
(8.6
|
)
|
|
$
|
(16.3
|
)
|
|
$
|
6.3
|
|
|
$
|
(10.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net periodic pension and OPEB cost (benefit)
|
$
|
(10.4
|
)
|
|
$
|
4.6
|
|
|
$
|
(5.8
|
)
|
|
$
|
(14.9
|
)
|
|
$
|
8.6
|
|
|
$
|
(6.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||||||||||||||
|
March 31, 2019
|
||||||||||||||||||
|
Parent
Issuer |
|
Subsidiary
Guarantors
|
|
Subsidiary
Non
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Sales
|
$
|
26.3
|
|
|
$
|
2,209.3
|
|
|
$
|
694.9
|
|
|
$
|
(130.4
|
)
|
|
$
|
2,800.1
|
|
Excise taxes
|
—
|
|
|
(284.7
|
)
|
|
(212.1
|
)
|
|
—
|
|
|
(496.8
|
)
|
|||||
Net sales
|
26.3
|
|
|
1,924.6
|
|
|
482.8
|
|
|
(130.4
|
)
|
|
2,303.3
|
|
|||||
Cost of goods sold
|
(1.5
|
)
|
|
(1,135.3
|
)
|
|
(365.6
|
)
|
|
89.4
|
|
|
(1,413.0
|
)
|
|||||
Gross profit
|
24.8
|
|
|
789.3
|
|
|
117.2
|
|
|
(41.0
|
)
|
|
890.3
|
|
|||||
Marketing, general and administrative expenses
|
(71.6
|
)
|
|
(457.9
|
)
|
|
(166.7
|
)
|
|
41.0
|
|
|
(655.2
|
)
|
|||||
Special items, net
|
(0.4
|
)
|
|
(8.4
|
)
|
|
(4.2
|
)
|
|
—
|
|
|
(13.0
|
)
|
|||||
Equity income (loss) in subsidiaries
|
245.3
|
|
|
(63.0
|
)
|
|
(5.9
|
)
|
|
(176.4
|
)
|
|
—
|
|
|||||
Operating income (loss)
|
198.1
|
|
|
260.0
|
|
|
(59.6
|
)
|
|
(176.4
|
)
|
|
222.1
|
|
|||||
Interest income (expense), net
|
(77.4
|
)
|
|
80.2
|
|
|
(76.1
|
)
|
|
—
|
|
|
(73.3
|
)
|
|||||
Other pension and postretirement benefits (costs), net
|
—
|
|
|
1.2
|
|
|
7.4
|
|
|
—
|
|
|
8.6
|
|
|||||
Other income (expense), net
|
—
|
|
|
(29.9
|
)
|
|
53.8
|
|
|
—
|
|
|
23.9
|
|
|||||
Income (loss) before income taxes
|
120.7
|
|
|
311.5
|
|
|
(74.5
|
)
|
|
(176.4
|
)
|
|
181.3
|
|
|||||
Income tax benefit (expense)
|
30.7
|
|
|
(66.0
|
)
|
|
3.1
|
|
|
—
|
|
|
(32.2
|
)
|
|||||
Net income (loss)
|
151.4
|
|
|
245.5
|
|
|
(71.4
|
)
|
|
(176.4
|
)
|
|
149.1
|
|
|||||
Net (income) loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
2.3
|
|
|||||
Net income (loss) attributable to MCBC
|
$
|
151.4
|
|
|
$
|
245.5
|
|
|
$
|
(69.1
|
)
|
|
$
|
(176.4
|
)
|
|
$
|
151.4
|
|
Comprehensive income (loss) attributable to MCBC
|
$
|
193.5
|
|
|
$
|
270.8
|
|
|
$
|
(64.4
|
)
|
|
$
|
(206.4
|
)
|
|
$
|
193.5
|
|
|
Three Months Ended
|
||||||||||||||||||
|
March 31, 2018
|
||||||||||||||||||
|
Parent
Issuer |
|
Subsidiary
Guarantors
|
|
Subsidiary
Non
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Sales
|
$
|
4.9
|
|
|
$
|
2,234.6
|
|
|
$
|
742.6
|
|
|
$
|
(114.1
|
)
|
|
$
|
2,868.0
|
|
Excise taxes
|
—
|
|
|
(301.4
|
)
|
|
(235.1
|
)
|
|
—
|
|
|
(536.5
|
)
|
|||||
Net sales
|
4.9
|
|
|
1,933.2
|
|
|
507.5
|
|
|
(114.1
|
)
|
|
2,331.5
|
|
|||||
Cost of goods sold
|
(0.5
|
)
|
|
(1,241.7
|
)
|
|
(399.7
|
)
|
|
106.2
|
|
|
(1,535.7
|
)
|
|||||
Gross profit
|
4.4
|
|
|
691.5
|
|
|
107.8
|
|
|
(7.9
|
)
|
|
795.8
|
|
|||||
Marketing, general and administrative expenses
|
(70.2
|
)
|
|
(463.3
|
)
|
|
(155.5
|
)
|
|
7.9
|
|
|
(681.1
|
)
|
|||||
Special items, net
|
—
|
|
|
321.4
|
|
|
(6.6
|
)
|
|
—
|
|
|
314.8
|
|
|||||
Equity income (loss) in subsidiaries
|
635.5
|
|
|
(158.8
|
)
|
|
4.8
|
|
|
(481.5
|
)
|
|
—
|
|
|||||
Operating income (loss)
|
569.7
|
|
|
390.8
|
|
|
(49.5
|
)
|
|
(481.5
|
)
|
|
429.5
|
|
|||||
Interest income (expense), net
|
(85.2
|
)
|
|
82.0
|
|
|
(80.0
|
)
|
|
—
|
|
|
(83.2
|
)
|
|||||
Other pension and postretirement benefits (costs), net
|
—
|
|
|
1.4
|
|
|
8.6
|
|
|
—
|
|
|
10.0
|
|
|||||
Other income (expense), net
|
(0.2
|
)
|
|
40.2
|
|
|
(38.9
|
)
|
|
—
|
|
|
1.1
|
|
|||||
Income (loss) before income taxes
|
484.3
|
|
|
514.4
|
|
|
(159.8
|
)
|
|
(481.5
|
)
|
|
357.4
|
|
|||||
Income tax benefit (expense)
|
(206.2
|
)
|
|
121.9
|
|
|
9.4
|
|
|
—
|
|
|
(74.9
|
)
|
|||||
Net income (loss)
|
278.1
|
|
|
636.3
|
|
|
(150.4
|
)
|
|
(481.5
|
)
|
|
282.5
|
|
|||||
Net (income) loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(4.4
|
)
|
|
—
|
|
|
(4.4
|
)
|
|||||
Net income (loss) attributable to MCBC
|
$
|
278.1
|
|
|
$
|
636.3
|
|
|
$
|
(154.8
|
)
|
|
$
|
(481.5
|
)
|
|
$
|
278.1
|
|
Comprehensive income (loss) attributable to MCBC
|
$
|
327.2
|
|
|
$
|
743.2
|
|
|
$
|
(47.3
|
)
|
|
$
|
(695.9
|
)
|
|
$
|
327.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
||||||||||||||||||
|
March 31, 2019
|
||||||||||||||||||
|
Parent
Issuer |
|
Subsidiary
Guarantors
|
|
Subsidiary
Non
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
11.7
|
|
|
$
|
26.5
|
|
|
$
|
196.2
|
|
|
$
|
—
|
|
|
$
|
234.4
|
|
Accounts receivable, net
|
—
|
|
|
556.5
|
|
|
353.0
|
|
|
—
|
|
|
909.5
|
|
|||||
Other receivables, net
|
47.9
|
|
|
61.3
|
|
|
32.4
|
|
|
—
|
|
|
141.6
|
|
|||||
Inventories, net
|
—
|
|
|
501.8
|
|
|
186.1
|
|
|
—
|
|
|
687.9
|
|
|||||
Other current assets, net
|
49.2
|
|
|
216.7
|
|
|
98.7
|
|
|
—
|
|
|
364.6
|
|
|||||
Intercompany accounts receivable
|
—
|
|
|
2,628.2
|
|
|
51.6
|
|
|
(2,679.8
|
)
|
|
—
|
|
|||||
Total current assets
|
108.8
|
|
|
3,991.0
|
|
|
918.0
|
|
|
(2,679.8
|
)
|
|
2,338.0
|
|
|||||
Properties, net
|
16.1
|
|
|
3,361.7
|
|
|
1,175.5
|
|
|
—
|
|
|
4,553.3
|
|
|||||
Goodwill
|
—
|
|
|
6,455.1
|
|
|
1,824.3
|
|
|
—
|
|
|
8,279.4
|
|
|||||
Other intangibles, net
|
5.5
|
|
|
11,810.5
|
|
|
1,933.6
|
|
|
—
|
|
|
13,749.6
|
|
|||||
Net investment in and advances to subsidiaries
|
25,765.0
|
|
|
3,727.6
|
|
|
4,679.9
|
|
|
(34,172.5
|
)
|
|
—
|
|
|||||
Other assets
|
139.6
|
|
|
337.1
|
|
|
517.7
|
|
|
(91.1
|
)
|
|
903.3
|
|
|||||
Total assets
|
$
|
26,035.0
|
|
|
$
|
29,683.0
|
|
|
$
|
11,049.0
|
|
|
$
|
(36,943.4
|
)
|
|
$
|
29,823.6
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and other current liabilities
|
$
|
121.8
|
|
|
$
|
1,627.7
|
|
|
$
|
811.8
|
|
|
$
|
—
|
|
|
$
|
2,561.3
|
|
Current portion of long-term debt and short-term borrowings
|
1,602.4
|
|
|
1.4
|
|
|
37.3
|
|
|
—
|
|
|
1,641.1
|
|
|||||
Intercompany accounts payable
|
1,989.0
|
|
|
139.1
|
|
|
551.7
|
|
|
(2,679.8
|
)
|
|
—
|
|
|||||
Total current liabilities
|
3,713.2
|
|
|
1,768.2
|
|
|
1,400.8
|
|
|
(2,679.8
|
)
|
|
4,202.4
|
|
|||||
Long-term debt
|
7,248.7
|
|
|
1,160.8
|
|
|
75.3
|
|
|
—
|
|
|
8,484.8
|
|
|||||
Pension and postretirement benefits
|
3.3
|
|
|
711.3
|
|
|
12.3
|
|
|
—
|
|
|
726.9
|
|
|||||
Deferred tax liabilities
|
—
|
|
|
1,476.0
|
|
|
766.6
|
|
|
(91.1
|
)
|
|
2,151.5
|
|
|||||
Other liabilities
|
75.9
|
|
|
208.6
|
|
|
85.4
|
|
|
—
|
|
|
369.9
|
|
|||||
Intercompany notes payable
|
1,347.6
|
|
|
29.4
|
|
|
6,022.1
|
|
|
(7,399.1
|
)
|
|
—
|
|
|||||
Total liabilities
|
12,388.7
|
|
|
5,354.3
|
|
|
8,362.5
|
|
|
(10,170.0
|
)
|
|
15,935.5
|
|
|||||
MCBC stockholders' equity
|
13,647.3
|
|
|
30,349.8
|
|
|
3,822.7
|
|
|
(34,172.5
|
)
|
|
13,647.3
|
|
|||||
Intercompany notes receivable
|
(1.0
|
)
|
|
(6,021.1
|
)
|
|
(1,377.0
|
)
|
|
7,399.1
|
|
|
—
|
|
|||||
Total stockholders' equity
|
13,646.3
|
|
|
24,328.7
|
|
|
2,445.7
|
|
|
(26,773.4
|
)
|
|
13,647.3
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
240.8
|
|
|
—
|
|
|
240.8
|
|
|||||
Total equity
|
13,646.3
|
|
|
24,328.7
|
|
|
2,686.5
|
|
|
(26,773.4
|
)
|
|
13,888.1
|
|
|||||
Total liabilities and equity
|
$
|
26,035.0
|
|
|
$
|
29,683.0
|
|
|
$
|
11,049.0
|
|
|
$
|
(36,943.4
|
)
|
|
$
|
29,823.6
|
|
|
As of
|
||||||||||||||||||
|
December 31, 2018
|
||||||||||||||||||
|
Parent
Issuer |
|
Subsidiary
Guarantors
|
|
Subsidiary
Non
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
515.8
|
|
|
$
|
156.1
|
|
|
$
|
386.0
|
|
|
$
|
—
|
|
|
$
|
1,057.9
|
|
Accounts receivable, net
|
—
|
|
|
427.3
|
|
|
317.1
|
|
|
—
|
|
|
744.4
|
|
|||||
Other receivables, net
|
50.0
|
|
|
48.3
|
|
|
28.3
|
|
|
—
|
|
|
126.6
|
|
|||||
Inventories, net
|
—
|
|
|
451.6
|
|
|
140.2
|
|
|
—
|
|
|
591.8
|
|
|||||
Other current assets, net
|
3.0
|
|
|
157.2
|
|
|
85.4
|
|
|
—
|
|
|
245.6
|
|
|||||
Intercompany accounts receivable
|
—
|
|
|
2,366.0
|
|
|
31.0
|
|
|
(2,397.0
|
)
|
|
—
|
|
|||||
Total current assets
|
568.8
|
|
|
3,606.5
|
|
|
988.0
|
|
|
(2,397.0
|
)
|
|
2,766.3
|
|
|||||
Properties, net
|
19.0
|
|
|
3,427.5
|
|
|
1,161.8
|
|
|
—
|
|
|
4,608.3
|
|
|||||
Goodwill
|
—
|
|
|
6,444.0
|
|
|
1,816.8
|
|
|
—
|
|
|
8,260.8
|
|
|||||
Other intangibles, net
|
6.0
|
|
|
11,800.0
|
|
|
1,970.4
|
|
|
—
|
|
|
13,776.4
|
|
|||||
Net investment in and advances to subsidiaries
|
25,475.0
|
|
|
3,893.2
|
|
|
4,579.7
|
|
|
(33,947.9
|
)
|
|
—
|
|
|||||
Other assets
|
159.9
|
|
|
193.2
|
|
|
436.0
|
|
|
(91.1
|
)
|
|
698.0
|
|
|||||
Total assets
|
$
|
26,228.7
|
|
|
$
|
29,364.4
|
|
|
$
|
10,952.7
|
|
|
$
|
(36,436.0
|
)
|
|
$
|
30,109.8
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and other current liabilities
|
$
|
170.8
|
|
|
$
|
1,651.0
|
|
|
$
|
884.6
|
|
|
$
|
—
|
|
|
$
|
2,706.4
|
|
Current portion of long-term debt and short-term borrowings
|
1,572.6
|
|
|
—
|
|
|
21.9
|
|
|
—
|
|
|
1,594.5
|
|
|||||
Intercompany accounts payable
|
1,836.5
|
|
|
120.9
|
|
|
439.6
|
|
|
(2,397.0
|
)
|
|
—
|
|
|||||
Total current liabilities
|
3,579.9
|
|
|
1,771.9
|
|
|
1,346.1
|
|
|
(2,397.0
|
)
|
|
4,300.9
|
|
|||||
Long-term debt
|
7,765.6
|
|
|
1,097.4
|
|
|
30.8
|
|
|
—
|
|
|
8,893.8
|
|
|||||
Pension and postretirement benefits
|
3.2
|
|
|
711.2
|
|
|
12.2
|
|
|
—
|
|
|
726.6
|
|
|||||
Deferred tax liabilities
|
—
|
|
|
1,461.1
|
|
|
758.9
|
|
|
(91.1
|
)
|
|
2,128.9
|
|
|||||
Other liabilities
|
26.0
|
|
|
199.3
|
|
|
98.5
|
|
|
—
|
|
|
323.8
|
|
|||||
Intercompany notes payable
|
1,347.6
|
|
|
63.6
|
|
|
5,998.6
|
|
|
(7,409.8
|
)
|
|
—
|
|
|||||
Total liabilities
|
12,722.3
|
|
|
5,304.5
|
|
|
8,245.1
|
|
|
(9,897.9
|
)
|
|
16,374.0
|
|
|||||
MCBC stockholders' equity
|
13,507.4
|
|
|
30,057.5
|
|
|
3,890.4
|
|
|
(33,947.9
|
)
|
|
13,507.4
|
|
|||||
Intercompany notes receivable
|
(1.0
|
)
|
|
(5,997.6
|
)
|
|
(1,411.2
|
)
|
|
7,409.8
|
|
|
—
|
|
|||||
Total stockholders' equity
|
13,506.4
|
|
|
24,059.9
|
|
|
2,479.2
|
|
|
(26,538.1
|
)
|
|
13,507.4
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
228.4
|
|
|
—
|
|
|
228.4
|
|
|||||
Total equity
|
13,506.4
|
|
|
24,059.9
|
|
|
2,707.6
|
|
|
(26,538.1
|
)
|
|
13,735.8
|
|
|||||
Total liabilities and equity
|
$
|
26,228.7
|
|
|
$
|
29,364.4
|
|
|
$
|
10,952.7
|
|
|
$
|
(36,436.0
|
)
|
|
$
|
30,109.8
|
|
|
Three Months Ended
|
||||||||||||||||||
|
March 31, 2019
|
||||||||||||||||||
|
Parent
Issuer |
|
Subsidiary
Guarantors
|
|
Subsidiary
Non
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
32.6
|
|
|
$
|
70.2
|
|
|
$
|
(171.8
|
)
|
|
$
|
(29.5
|
)
|
|
$
|
(98.5
|
)
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to properties
|
(2.6
|
)
|
|
(127.7
|
)
|
|
(67.7
|
)
|
|
—
|
|
|
(198.0
|
)
|
|||||
Proceeds from sales of properties and other assets
|
—
|
|
|
1.4
|
|
|
1.0
|
|
|
—
|
|
|
2.4
|
|
|||||
Other
|
—
|
|
|
(0.3
|
)
|
|
1.3
|
|
|
—
|
|
|
1.0
|
|
|||||
Net intercompany investing activity
|
9.4
|
|
|
4.1
|
|
|
35.8
|
|
|
(49.3
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
6.8
|
|
|
(122.5
|
)
|
|
(29.6
|
)
|
|
(49.3
|
)
|
|
(194.6
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Exercise of stock options under equity compensation plans
|
0.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|||||
Dividends paid
|
(81.4
|
)
|
|
(29.5
|
)
|
|
(7.3
|
)
|
|
29.5
|
|
|
(88.7
|
)
|
|||||
Payments on debt and borrowings
|
(1,066.3
|
)
|
|
(0.1
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
(1,067.2
|
)
|
|||||
Net proceeds from (payments on) revolving credit facilities and commercial paper
|
603.4
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
604.3
|
|
|||||
Change in overdraft balances and other
|
(2.8
|
)
|
|
(4.7
|
)
|
|
23.7
|
|
|
—
|
|
|
16.2
|
|
|||||
Net intercompany financing activity
|
—
|
|
|
(46.2
|
)
|
|
(3.1
|
)
|
|
49.3
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
(546.5
|
)
|
|
(80.5
|
)
|
|
13.4
|
|
|
78.8
|
|
|
(534.8
|
)
|
|||||
CASH AND CASH EQUIVALENTS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase (decrease) in cash and cash equivalents
|
(507.1
|
)
|
|
(132.8
|
)
|
|
(188.0
|
)
|
|
—
|
|
|
(827.9
|
)
|
|||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
3.0
|
|
|
3.2
|
|
|
(1.8
|
)
|
|
—
|
|
|
4.4
|
|
|||||
Balance at beginning of year
|
515.8
|
|
|
156.1
|
|
|
386.0
|
|
|
—
|
|
|
1,057.9
|
|
|||||
Balance at end of period
|
$
|
11.7
|
|
|
$
|
26.5
|
|
|
$
|
196.2
|
|
|
$
|
—
|
|
|
$
|
234.4
|
|
|
Three Months Ended
|
||||||||||||||||||
|
March 31, 2018
|
||||||||||||||||||
|
Parent
Issuer |
|
Subsidiary
Guarantors
|
|
Subsidiary
Non
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
353.0
|
|
|
$
|
208.1
|
|
|
$
|
(111.6
|
)
|
|
$
|
(134.3
|
)
|
|
$
|
315.2
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to properties
|
(1.2
|
)
|
|
(161.6
|
)
|
|
(45.5
|
)
|
|
—
|
|
|
(208.3
|
)
|
|||||
Proceeds from sales of properties and other assets
|
—
|
|
|
0.7
|
|
|
0.9
|
|
|
—
|
|
|
1.6
|
|
|||||
Other
|
—
|
|
|
(1.1
|
)
|
|
(44.3
|
)
|
|
—
|
|
|
(45.4
|
)
|
|||||
Net intercompany investing activity
|
12.7
|
|
|
(8.2
|
)
|
|
171.3
|
|
|
(175.8
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
11.5
|
|
|
(170.2
|
)
|
|
82.4
|
|
|
(175.8
|
)
|
|
(252.1
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercise of stock options under equity compensation plans
|
6.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.1
|
|
|||||
Dividends paid
|
(81.2
|
)
|
|
—
|
|
|
(141.6
|
)
|
|
134.3
|
|
|
(88.5
|
)
|
|||||
Payments on debt and borrowings
|
—
|
|
|
(0.5
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(0.8
|
)
|
|||||
Net proceeds from (payments on) revolving credit facilities and commercial paper
|
(250.5
|
)
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
(248.7
|
)
|
|||||
Change in overdraft balances and other
|
(2.9
|
)
|
|
(6.1
|
)
|
|
51.0
|
|
|
—
|
|
|
42.0
|
|
|||||
Net intercompany financing activity
|
(32.6
|
)
|
|
(145.4
|
)
|
|
2.2
|
|
|
175.8
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
(361.1
|
)
|
|
(152.0
|
)
|
|
(86.9
|
)
|
|
310.1
|
|
|
(289.9
|
)
|
|||||
CASH AND CASH EQUIVALENTS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase (decrease) in cash and cash equivalents
|
3.4
|
|
|
(114.1
|
)
|
|
(116.1
|
)
|
|
—
|
|
|
(226.8
|
)
|
|||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
—
|
|
|
(0.3
|
)
|
|
6.4
|
|
|
—
|
|
|
6.1
|
|
|||||
Balance at beginning of year
|
6.6
|
|
|
140.9
|
|
|
271.1
|
|
|
—
|
|
|
418.6
|
|
|||||
Balance at end of period
|
$
|
10.0
|
|
|
$
|
26.5
|
|
|
$
|
161.4
|
|
|
$
|
—
|
|
|
$
|
197.9
|
|
|
Three Months Ended
|
|||||||||
|
March 31, 2019
|
|
March 31, 2018
|
|
% change
|
|||||
|
(In millions, except percentages and per share data)
|
|||||||||
Financial volume in hectoliters
|
20.101
|
|
|
20.813
|
|
|
(3.4
|
)%
|
||
Net sales
|
$
|
2,303.3
|
|
|
$
|
2,331.5
|
|
|
(1.2
|
)%
|
Net income (loss) attributable to MCBC
|
$
|
151.4
|
|
|
$
|
278.1
|
|
|
(45.6
|
)%
|
Net income (loss) attributable to MCBC per diluted share
|
$
|
0.70
|
|
|
$
|
1.28
|
|
|
(45.3
|
)%
|
•
|
In our
U.S. segment
, income before income taxes increased
2.9%
to
$269.4 million
in the
first
quarter of
2019
, compared to the prior year primarily driven by higher net pricing and lower marketing, general and administrative expenses, partially offset by cost inflation and lower volumes.
|
•
|
In our
Canada segment
, income before income taxes increased
139.6%
to
$21.8 million
in the
first
quarter of
2019
, compared to the prior year, driven primarily by an unrealized mark-to-market gain of approximately
$23 million
recognized on the HEXO Corp. ("HEXO") warrants received in connection with the formation of the Truss joint venture and lower general and administrative expenses, partially offset by gross margin impacts of volume declines and cost inflation.
|
•
|
In our
Europe segment
, loss before income taxes decreased
8.0%
to
$27.5 million
in the
first
quarter of
2019
, compared to a loss of
$29.9 million
in the prior year, primarily driven by favorable margin impacts, partially offset by increased marketing investments.
|
•
|
In our
International segment
, income before income taxes decreased to a loss of
$0.3 million
in the
first
quarter of
2019
, compared to income of
$3.7 million
in the prior year, primarily driven by lower volumes in Puerto Rico, cycling the $2.0 million of settlement proceeds received related to our Columbia business in the first quarter of 2018, unfavorable foreign currency movements and cost inflation, partially offset by shifting to a more profitable business model in Mexico and lower marketing expenses.
|
•
|
Global priority brand volume decreased 3.6% in the
first
quarter of
2019
versus
2018
, due to declines across the U.S., Canada and International, partially offset by growth in Europe.
|
•
|
Blue Moon Belgian White
global brand volume decreased 0.9% in the
first
quarter of
2019
versus
2018
, driven by declines in the U.S., partially offset by growth in International, Canada and Europe.
|
•
|
Carling
brand volume in Europe decreased 11.0% during the
first
quarter of
2019
versus
2018
, due to lower volumes in U.K., the brand's primary market.
|
•
|
Coors
global brand volume -
Coors Light
global brand volume decreased 7.0% during the
first
quarter of
2019
versus
2018
. The overall volume decrease in the
first
quarter of
2019
was due to lower brand volume in the U.S., Canada and International, offset by growth in Europe. Volumes in the U.S. were lower than prior year reflective of the U.S. industry premium and premium light segment performance. The declines in Canada are primarily the result of industry declines due to ongoing competitive pressures in Quebec and Ontario and a continued shift in consumer preference to value brands in the West.
Coors Banquet
global brand volume decreased 4.4% during the
first
quarter of
2019
versus
2018
driven by the U.S. and Canada.
|
•
|
Miller
global brand volume
- Miller Lite
global brand volumes decreased 0.7% during the
first
quarter of
2019
versus
2018
, primarily driven by the U.S., partially offset by International. However,
Miller Lite
gained share of the U.S. premium light segment for the eighteenth consecutive quarter.
Miller Genuine Draft
global brand volume
decreased 10.6% during the
first
quarter of
2019
versus
2018
, due to decreases in all segments.
|
•
|
Molson Canadian
brand volume in Canada decreased 10.0% during the
first
quarter of
2019
versus
2018
, primarily driven by industry declines as well as share declines due to competitive pressures in the West and Ontario.
|
•
|
Staropramen
global brand volume, including royalty volume, increased 15.8% during the
first
quarter of
2019
versus
2018
, driven by higher volumes in the majority of European markets.
|
|
Three Months Ended
|
|||||||
|
March 31, 2019
|
|
March 31, 2018
|
|
% change
|
|||
|
(In millions, except percentages)
|
|||||||
Volume in hectoliters:
|
|
|
|
|
|
|||
Financial volume
|
20.101
|
|
|
20.813
|
|
|
(3.4
|
)%
|
Less: Contract brewing, wholesaler and non-beer volume
|
(1.806
|
)
|
|
(1.902
|
)
|
|
(5.0
|
)%
|
Add: Royalty volume
|
0.737
|
|
|
0.716
|
|
|
2.9
|
%
|
Add: STW to STR adjustment
|
(0.837
|
)
|
|
(0.526
|
)
|
|
59.1
|
%
|
Total worldwide brand volume
|
18.195
|
|
|
19.101
|
|
|
(4.7
|
)%
|
|
Volume
|
|
Price, Product and Geography Mix
|
|
Currency
|
|
Other
|
|
Total
|
|||||
Consolidated
|
(3.4
|
)%
|
|
4.0
|
%
|
|
(1.8
|
)%
|
|
—
|
%
|
|
(1.2
|
)%
|
U.S.
|
(3.6
|
)%
|
|
4.5
|
%
|
|
—
|
%
|
|
(0.2
|
)%
|
|
0.7
|
%
|
Canada
|
(4.9
|
)%
|
|
1.5
|
%
|
|
(4.6
|
)%
|
|
—
|
%
|
|
(8.0
|
)%
|
Europe
|
(2.3
|
)%
|
|
6.8
|
%
|
|
(7.5
|
)%
|
|
—
|
%
|
|
(3.0
|
)%
|
International
|
(18.3
|
)%
|
|
3.9
|
%
|
|
(2.3
|
)%
|
|
—
|
%
|
|
(16.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||
|
March 31, 2019
|
|
March 31, 2018
|
||
Effective tax rate
|
18
|
%
|
|
21
|
%
|
|
Three Months Ended
|
|||||||||
|
March 31, 2019
|
|
March 31, 2018
|
|
% change
|
|||||
|
(In millions, except percentages)
|
|||||||||
Financial volume in hectoliters
(1)
|
14.187
|
|
|
14.718
|
|
|
(3.6
|
)%
|
||
Sales
(1)
|
$
|
1,866.9
|
|
|
$
|
1,861.7
|
|
|
0.3
|
%
|
Excise taxes
|
(207.7
|
)
|
|
(213.9
|
)
|
|
(2.9
|
)%
|
||
Net sales
(1)
|
1,659.2
|
|
|
1,647.8
|
|
|
0.7
|
%
|
||
Cost of goods sold
(1)
|
(1,010.3
|
)
|
|
(990.1
|
)
|
|
2.0
|
%
|
||
Gross profit
|
648.9
|
|
|
657.7
|
|
|
(1.3
|
)%
|
||
Marketing, general and administrative expenses
|
(375.6
|
)
|
|
(393.1
|
)
|
|
(4.5
|
)%
|
||
Special items, net
(2)
|
(1.4
|
)
|
|
(1.5
|
)
|
|
(6.7
|
)%
|
||
Operating income (loss)
|
271.9
|
|
|
263.1
|
|
|
3.3
|
%
|
||
Interest income (expense), net
|
(2.3
|
)
|
|
(1.2
|
)
|
|
91.7
|
%
|
||
Other income (expense), net
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
%
|
||
Income (loss) before income taxes
|
$
|
269.4
|
|
|
$
|
261.7
|
|
|
2.9
|
%
|
(1)
|
Includes gross inter-segment sales, purchases, and volumes, which are eliminated in the consolidated totals.
|
(2)
|
See Part I—Item 1. Financial Statements,
Note 6, "Special Items"
for detail of special items.
|
|
Three Months Ended
|
|||||||||
|
March 31, 2019
|
|
March 31, 2018
|
|
% change
|
|||||
|
(In millions, except percentages)
|
|||||||||
Financial volume in hectoliters
(1)
|
1.624
|
|
|
1.707
|
|
|
(4.9
|
)%
|
||
Sales
(1)
|
$
|
340.7
|
|
|
$
|
374.9
|
|
|
(9.1
|
)%
|
Excise taxes
|
(79.7
|
)
|
|
(91.1
|
)
|
|
(12.5
|
)%
|
||
Net sales
(1)
|
261.0
|
|
|
283.8
|
|
|
(8.0
|
)%
|
||
Cost of goods sold
(1)
|
(180.4
|
)
|
|
(187.4
|
)
|
|
(3.7
|
)%
|
||
Gross profit
|
80.6
|
|
|
96.4
|
|
|
(16.4
|
)%
|
||
Marketing, general and administrative expenses
|
(76.2
|
)
|
|
(81.0
|
)
|
|
(5.9
|
)%
|
||
Special items, net
(2)
|
(7.6
|
)
|
|
(5.6
|
)
|
|
35.7
|
%
|
||
Operating income (loss)
|
(3.2
|
)
|
|
9.8
|
|
|
N/M
|
|
||
Other income (expense), net
|
25.0
|
|
|
(0.7
|
)
|
|
N/M
|
|
||
Income (loss) before income taxes
|
$
|
21.8
|
|
|
$
|
9.1
|
|
|
139.6
|
%
|
(1)
|
Includes gross inter-segment sales, purchases, and volumes, which are eliminated in the consolidated totals.
|
(2)
|
See Part I-Item 1. Financial Statements,
Note 6, "Special Items"
for detail of special items.
|
|
Three Months Ended
|
|||||||||
|
March 31, 2019
|
|
March 31, 2018
|
|
% change
|
|||||
|
(In millions, except percentages)
|
|||||||||
Financial volume in hectoliters
(1)(2)
|
4.304
|
|
|
4.404
|
|
|
(2.3
|
)%
|
||
Sales
(2)
|
$
|
564.1
|
|
|
$
|
598.5
|
|
|
(5.7
|
)%
|
Excise taxes
|
(201.2
|
)
|
|
(224.2
|
)
|
|
(10.3
|
)%
|
||
Net sales
(2)
|
362.9
|
|
|
374.3
|
|
|
(3.0
|
)%
|
||
Cost of goods sold
|
(252.1
|
)
|
|
(267.7
|
)
|
|
(5.8
|
)%
|
||
Gross profit
|
110.8
|
|
|
106.6
|
|
|
3.9
|
%
|
||
Marketing, general and administrative expenses
|
(132.3
|
)
|
|
(130.4
|
)
|
|
1.5
|
%
|
||
Special items, net
(3)
|
(3.3
|
)
|
|
(5.1
|
)
|
|
(35.3
|
)%
|
||
Operating income (loss)
|
(24.8
|
)
|
|
(28.9
|
)
|
|
(14.2
|
)%
|
||
Interest income (expense), net
|
(1.3
|
)
|
|
(0.7
|
)
|
|
85.7
|
%
|
||
Other income (expense), net
|
(1.4
|
)
|
|
(0.3
|
)
|
|
N/M
|
|
||
Income (loss) before income taxes
|
$
|
(27.5
|
)
|
|
$
|
(29.9
|
)
|
|
(8.0
|
)%
|
(1)
|
Excludes royalty volume of
0.294 million
hectoliters and
0.306 million
hectoliters for the three months ended
March 31, 2019
and
March 31, 2018
, respectively.
|
(2)
|
Includes gross inter-segment sales and volumes, which are eliminated in the consolidated totals.
|
(3)
|
See Part I-Item 1. Financial Statements,
Note 6, "Special Items"
for detail of special items.
|
|
Three Months Ended
|
|||||||||
|
March 31, 2019
|
|
March 31, 2018
|
|
% change
|
|||||
|
(In millions, except percentages)
|
|||||||||
Financial volume in hectoliters
(1)
|
0.425
|
|
|
0.520
|
|
|
(18.3
|
)%
|
||
Sales
|
$
|
56.1
|
|
|
$
|
64.8
|
|
|
(13.4
|
)%
|
Excise taxes
|
(8.2
|
)
|
|
(7.3
|
)
|
|
12.3
|
%
|
||
Net sales
|
47.9
|
|
|
57.5
|
|
|
(16.7
|
)%
|
||
Cost of goods sold
(2)
|
(31.0
|
)
|
|
(37.8
|
)
|
|
(18.0
|
)%
|
||
Gross profit
|
16.9
|
|
|
19.7
|
|
|
(14.2
|
)%
|
||
Marketing, general and administrative expenses
|
(16.6
|
)
|
|
(15.1
|
)
|
|
9.9
|
%
|
||
Special items, net
(3)
|
(0.4
|
)
|
|
(1.0
|
)
|
|
(60.0
|
)%
|
||
Operating income (loss)
|
(0.1
|
)
|
|
3.6
|
|
|
N/M
|
|
||
Other income (expense), net
|
(0.2
|
)
|
|
0.1
|
|
|
N/M
|
|
||
Income (loss) before income taxes
|
$
|
(0.3
|
)
|
|
$
|
3.7
|
|
|
N/M
|
|
(1)
|
Excludes royalty volume of
0.443 million
hectoliters and
0.410 million
hectoliters for the three months ended
March 31, 2019
and
March 31, 2018
, respectively.
|
(2)
|
Includes gross inter-segment purchases, which are eliminated in the consolidated totals.
|
(3)
|
See Part I-Item 1. Financial Statements,
Note 6, "Special Items"
for detail of special items.
|
|
Three Months Ended
|
|||||||||
|
March 31, 2019
|
|
March 31, 2018
|
|
% change
|
|||||
|
(In millions, except percentages)
|
|||||||||
Financial volume in hectoliters
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Sales
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
—
|
%
|
Excise taxes
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Net sales
|
0.2
|
|
|
0.2
|
|
|
—
|
%
|
||
Cost of goods sold
|
32.9
|
|
|
(84.8
|
)
|
|
N/M
|
|
||
Gross profit
|
33.1
|
|
|
(84.6
|
)
|
|
N/M
|
|
||
Marketing, general and administrative expenses
|
(54.5
|
)
|
|
(61.5
|
)
|
|
(11.4
|
)%
|
||
Special items, net
(1)
|
(0.3
|
)
|
|
328.0
|
|
|
N/M
|
|
||
Operating income (loss)
|
(21.7
|
)
|
|
181.9
|
|
|
N/M
|
|
||
Interest expense, net
|
(69.7
|
)
|
|
(81.3
|
)
|
|
(14.3
|
)%
|
||
Other pension and postretirement benefits (costs), net
|
8.6
|
|
|
10.0
|
|
|
(14.0
|
)%
|
||
Other income (expense), net
|
0.7
|
|
|
2.2
|
|
|
(68.2
|
)%
|
||
Income (loss) before income taxes
|
$
|
(82.1
|
)
|
|
$
|
112.8
|
|
|
N/M
|
|
(1)
|
See Part I-Item 1. Financial Statements,
Note 6, "Special Items"
for detail of special items.
|
|
Three Months Ended
|
||||
|
March 31, 2019
|
|
March 31, 2018
|
||
Weighted-Average Exchange Rate (1 USD equals)
|
|
|
|
||
Canadian Dollar (CAD)
|
1.34
|
|
|
1.29
|
|
Euro (EUR)
|
0.88
|
|
|
0.81
|
|
British Pound (GBP)
|
0.77
|
|
|
0.72
|
|
Czech Koruna (CZK)
|
22.60
|
|
|
20.67
|
|
Croatian Kuna (HRK)
|
6.53
|
|
|
6.04
|
|
Serbian Dinar (RSD)
|
104.06
|
|
|
96.21
|
|
Romanian Leu (RON)
|
4.15
|
|
|
3.80
|
|
Bulgarian Lev (BGN)
|
1.72
|
|
|
1.59
|
|
Hungarian Forint (HUF)
|
279.72
|
|
|
252.93
|
|
|
As of
|
||||
|
March 31, 2019
|
|
December 31, 2018
|
||
Closing Exchange Rate (1 USD equals)
|
|
|
|
||
Canadian Dollar (CAD)
|
1.33
|
|
|
1.36
|
|
Euro (EUR)
|
0.89
|
|
|
0.87
|
|
British Pound (GBP)
|
0.77
|
|
|
0.78
|
|
Czech Koruna (CZK)
|
23.02
|
|
|
22.43
|
|
Croatian Kuna (HRK)
|
6.63
|
|
|
6.46
|
|
Serbian Dinar (RSD)
|
105.15
|
|
|
103.20
|
|
Romanian Leu (RON)
|
4.25
|
|
|
4.06
|
|
Bulgarian Lev (BGN)
|
1.74
|
|
|
1.71
|
|
Hungarian Forint (HUF)
|
286.26
|
|
|
279.94
|
|
Total
|
|
Less than 1 year
|
|
1 - 3 years
|
|
3 - 5 years
|
|
More than 5 years
|
||||||||||
(In millions)
|
||||||||||||||||||
$
|
52.3
|
|
|
$
|
46.5
|
|
|
$
|
40.2
|
|
|
$
|
(8.9
|
)
|
|
$
|
(25.5
|
)
|
|
As of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(In millions)
|
||||||
Estimated fair value volatility
|
|
|
|
||||
Foreign currency risk:
|
|
|
|
||||
Forwards
|
$
|
(33.1
|
)
|
|
$
|
(35.1
|
)
|
Foreign currency denominated debt
|
$
|
(186.0
|
)
|
|
$
|
(249.3
|
)
|
Cross currency swaps
|
$
|
(81.0
|
)
|
|
$
|
(43.3
|
)
|
Interest rate risk:
|
|
|
|
||||
Debt
|
$
|
(293.6
|
)
|
|
$
|
(302.1
|
)
|
Forward starting interest rate swaps
|
$
|
(134.6
|
)
|
|
$
|
(126.2
|
)
|
Commodity price risk:
|
|
|
|
||||
Commodity swaps
|
$
|
(72.8
|
)
|
|
$
|
(77.5
|
)
|
Commodity options
|
$
|
—
|
|
|
$
|
—
|
|
Equity price risk:
|
|
|
|
||||
Warrants
|
$
|
(6.3
|
)
|
|
$
|
(2.8
|
)
|
|
|
|
|
|
MOLSON COORS BREWING COMPANY
|
||
|
By:
|
|
/s/ BRIAN C. TABOLT
|
|
|
|
Brian C. Tabolt
Vice President and Controller
(Principal Accounting Officer)
May 1, 2019
|
(1)
|
Molson Coors Brewing Company (UK & Ireland) Ltd (registered in England No. 26018) whose registered office is at 137 High Street, Burton upon Trent, Staffordshire, DE14 1JZ (the “Company”) and
|
(2)
|
Mr. Simon John Cox (the “Executive”).
|
1.
|
Definitions
|
2.
|
Appointment
|
2.1
|
The Executive shall serve the Company as the Regional President, UK & Ireland (to be known locally as Managing Director UK & Ireland or in such other capacity of a like status as the Company may require unless and until his employment shall be terminated by either the Company or the Executive in accordance with this Agreement.
|
3.
|
Powers and Duties
|
3.1
|
The Executive shall exercise such powers and perform such duties in relation to the business of the Company or any Associated Company as may from time to time be vested in or assigned to him by the Company. The Company reserves the right to
|
3.2
|
The Executive shall report to the CEO Europe and shall at all times promptly give to the Company or Associated Company (in writing if so requested) all information, advice and explanations as it may reasonably require in connection with matters relating to his employment or directorship under this Agreement or with the business of the Company generally.
|
3.3
|
The Executive shall work such hours as may reasonably be required for the proper performance of his duties. Overtime pay is not applicable.
|
3.4
|
The Executive shall devote the whole of his time, attention and abilities during those hours to carrying out his duties in a proper, loyal and efficient manner. The Executive shall well and faithfully serve the Company and any Associated Company and use his utmost efforts to promote the interests thereof.
|
3.5
|
During the performance of his duties of employment, the Executive shall travel to such places inside and outside the UK as the Company may from time to time require.
|
3.6
|
The Executive’s normal place of work shall be in Burton on Trent or at such other place in the UK as the Company may from time to time determine.
|
4.
|
Salary and Incentives
|
4.1
|
The Executive shall be paid monthly on the 16
th
day of each month (or last working day prior to the 16
th
) for his services during that month, at a salary rate of £ 225,000 per annum, less normal deductions.
|
4.2
|
The Executive shall be entitled to participate in the Company’s annual cash incentive scheme, Molson Coors Incentive Plan (MCIP) in accordance with the rules of the MCIP prevailing at that time. However, the Company reserves the right to discontinue or amend the terms of the MCIP or any replacement thereof annual cash incentive scheme at any time and from time to time without any obligation to provide a replacement or equivalent incentive scheme or to pay compensation in respect of such amendment or withdrawal. The Executive acknowledges that he has no contractual or other legal right to receive any annual cash incentive payment and that the Company is under no obligation to operate any cash incentive scheme. He further acknowledges that he will not acquire such a right (or to receive any cash incentive payment at a particular level), nor shall the Company come under such an obligation,
|
4.3
|
The Company will first review (but shall not be obliged to increase) the salary payable under this Agreement on 1
st
April 2013. Thereafter at least once in each 12 months the Company shall review (but shall not be obliged to increase) the salary payable under this Agreement.
|
4.4
|
The Executive shall not be entitled to any other salary or fees as an officer, director or employee of the Company or any Associated Company. The Executive shall, as the Company may direct, either waive his right to any such salary or fees or account for the same to the Company.
|
4.5
|
The Company shall be entitled to deduct from the Executive’s salary or other remuneration all or any sums owed by him to the Company including, but not limited to, advances, overpayments, unauthorised expenses, relocation costs or the costs of repairing or replacing any equipment or property belonging to the Company or any Associated Company which has been lost or damaged by the Executive.
|
5.
|
Pensions and Life Assurance
|
5.1
|
The Executive is eligible to participate in the Group Personal Pension Plan for Molson Coors subject to the Rules of that Plan. In addition to pension provision, four times salary life assurance is provided under the plan. The Executive will make contributions to that plan in accordance with its rules and those contributions will be deducted from salary. The Company reserves the right, in its absolute discretion, to close or amend any such plans and schemes and shall not be obliged to provide a replacement scheme or to compensate the Executive for any loss in benefits incurred as a result of such closure or amendment.
|
6.
|
Car or Car Allowance
|
6.1
|
At the option of the Executive, the Company shall provide for the Executive (subject to him being qualified to drive) a motor car suitable for a person of his status, in accordance with the whole terms and conditions of the Company Car Policy as published from time to time.
|
6.2
|
The Company may at its option, at any time, elect to pay an appropriate non-pensionable cash sum by way of car allowance, instead of the provision of a car. The rate and full terms of such allowance shall be entirely at the Company’s discretion but will be made in consultation with the Executive and upon giving the Executive reasonable notice. Payment of any such allowance shall be subject to tax and
|
7.
|
Other Benefits and Stock Options
|
7.1
|
The Executive shall be entitled to participate in the Company’s private medical/health insurance scheme, subject to the terms and conditions of that scheme and of any related policy of insurance as are from time to time in force. In the event that for whatever reason the insurer or third party provider in respect of any such scheme does not meet a claim or fails to continue to pay or provide a benefit, the Company and all Associated Companies shall not be responsible for providing the Executive with any benefit under any such insurance scheme or any payment to compensate the Executive.
|
7.2
|
The Executive shall maintain his membership of all professional, trade and other bodies deemed necessary by the Company or statute for the performance of his duties hereunder. The Executive shall be entitled to payment or reimbursement by the Company of up to two subscriptions to recognised professional bodies where such a professional body is directly related to the Executive’s current job or to his normal professional skills.
|
7.3
|
The Executive will be eligible to participate in the Molson Coors Long Term Incentive Plan, subject to the terms of the Plan. The Executive’s annual LTIP target will be grandfathered as per his current arrangement, until 2015, at US$ 245,000, following which it will be at the amount appropriate to his level in the Company. The Company reserves the right to discontinue or amend the terms of this Plan at any time and from time to time and, in such event, the Company or any Associated Company shall not be required to provide a replacement plan or to pay compensation in respect of such discontinuance or amendment. The Executive acknowledges that he has no right to receive an annual allocation (or an allocation of a particular level) under this Plan and that the Company is under no obligation to operate a log term incentive plan. The Executive also acknowledges that he will not acquire such a right, nor shall the Company come under such an obligation, merely by virtue of having received one or more allocations or payments (or allocations or payments of a particular level) under this or any other plan during the course of his employment.
|
7.4
|
The Executive shall be entitled to purchase goods or services from the Company or any Associated Company with the benefit of such discount and commissions as are from time to time authorised by the CEO Europe.
|
8.
|
Expenses
|
9.
|
Holidays
|
9.1
|
The Executive is entitled to 31 working days of paid annual holiday in every calendar year to be taken at such times as may be approved by the Chief Executive Officer of the Company. This entitlement covers an allowance for those bank and public holidays on which the Company offices are open for business. In addition, the Executive is entitled to take holiday on Christmas Day, Boxing Day and New Year’s Day or such other days as the Company declares in their place when Company offices will be closed.
|
9.2
|
The Executive may carry over up to 5 days of unused holiday into the following calendar year with approval of the CEO Europe, provided that such days are taken before the end of February in that following year. Any other holiday not taken in the calendar year of entitlement will be forfeited.
|
9.3
|
During the Executive’s first and last years of employment with the Company his holiday entitlement shall be calculated on a pro rata basis.
|
9.4
|
Upon termination the Executive will be entitled to any pay in lieu of holiday accrued but untaken. However, if upon termination, the Executive has taken more holiday than his accrued holiday entitlement, he will be required to reimburse the Company in respect of the excess days taken and the Executive hereby authorises the Company to make deductions in respect of the same from his final salary payment.
|
9.5
|
The Company may at its discretion require the Executive to take during his notice period any holiday entitlement which has accrued by the date of the termination of his employment but which has not been taken.
|
10.
|
Sickness
|
10.1
|
Subject to the production of medical certificates satisfactory to the Company (as required), if the Executive is absent from work due to sickness or accident, he shall be entitled to receive 100% of his salary during the first 6 months of sickness absence, and thereafter he shall be entitled to 50% of his salary for the second 6 months of sickness absence (“Company sick pay”). These entitlements apply in respect of all sickness absence occurring in any rolling 12 month period.
|
10.2
|
Any Company sick pay in addition to that to which the Executive is entitled under clause 10.1 shall be at the discretion of the Company. Such remuneration shall include any sums the Company is obliged to pay to the Executive pursuant to the Social Security Contributions and Benefits Act 1992 (Statutory Sick Pay).
|
10.3
|
If the Executive shall be or become incapacitated from any cause whatsoever from efficiently performing his duties hereunder for a continuous period of at least 365 days or in aggregate periods in excess of 300 normal working days in any period of 104 weeks, the Company may terminate this Agreement by giving the Executive 3 months’ written notice.
|
11.
|
Confidential Information
|
(i)
|
trade secrets,
|
(ii)
|
any inventions or improvements which the Executive may from time to time make or discover in the course of his duties.
|
(iii)
|
details of suppliers, their services, or customers and the services and their terms of business,
|
(iv)
|
prices charged to and terms of business with clients,
|
(v)
|
marketing plans and sales forecasts,
|
(vi)
|
any proposals relating to the future of the Company or its business or any part thereof,
|
(vii)
|
details of employees and officers and of the remuneration and other benefits paid to them,
|
(viii)
|
any existing or proposed business ventures, acquisitions, disposals, production agreements or outsourcing relating to the Company or any Associated Company,
|
(ix)
|
information relating to any business matters, corporate or strategic or business plans, management systems, finances, marketing or sales of any past, present or future products or services, management reports, processes, inventions, designs, know how, pitch lists, discoveries, technical specifications and other technical information relating to the creation, production or supply of any past, present or future products or service of the Company or any Associated Company,
|
(x)
|
any information given to the Company or any Associated Company in confidence by clients/customers, suppliers or other persons,
|
(xi)
|
any other information (whether or not recorded in documentary form, or on computer disk or tape) which is confidential or commercially sensitive and is not in the public domain,
|
(xii)
|
any other information which is notified to the Executive as confidential; and
|
(xiii)
|
any other information which the Executive should reasonably expect that the company or any Associated Company would regard as confidential or commercially sensitive.
|
11.2
|
The Executive shall not, either during this Appointment, or at any time thereafter without limitation in time, except in the proper course of his duties (or as required by law), directly or indirectly:
|
(b)
|
through any failure to exercise all due care and diligence, cause or permit to be disclosed,
|
(a)
|
enters the public domain other than (directly or indirectly) by way of unauthorised disclosure or unauthorised use by any person (whether or not by the Executive), or
|
(b)
|
is disclosed by way of a protected disclosure pursuant to the Public Interest Disclosure Act 1998.
|
12.1
|
The Executive shall not during the Appointment directly or indirectly be employed by, provide services to, or be an officer of, or have any financial interest in, or otherwise be concerned or interested in, any trade, business or occupation other than the business of the Company except:
|
(a)
|
with the prior written consent of the Company, but consent may be given subject to any terms or conditions which the Company requires, a breach of which shall be deemed to be a breach of the terms of this Agreement; or
|
(b)
|
as a holder of not more than 3% of any class of shares, debentures or other securities in a company which is listed or dealt in on a Recognised Investment Exchange.
|
12.2
|
In the event that the Executive becomes aware of any actual or potential conflict of interest between himself (or a member of his immediate family) and the
|
12.3
|
The Executive shall not during the Appointment directly or indirectly have any dealings with any of the Company’s or any Associated Company’s past, current or prospective suppliers, customers, agents or clients with whom he has had direct or indirect business dealings, or with the competitors of the Company or any Associated Company other than:
|
(a)
|
than for the legitimate business interests of the Company or any Associated Company;
|
12.4
|
The Executive shall not during the Appointment either on his own behalf or on behalf of any person, firm or company directly or indirectly;
|
(a)
|
solicit or endeavor to entice away from the Company an employee, or discourage from being employed by the Company or an Associated Company any person who, to the knowledge of the Executive, is an existing or prospective Restricted Employee of Company or any Associated Company;
|
(c)
|
procure or assist or facilitate another person to employ or receive services from any Restricted Employee.
|
12.5
|
The Executive shall not, without the prior written consent of the Company, other than in the performance of his duties, either directly or indirectly:
|
(d)
|
participate in the making of any film, radio broadcast or television transmission; or
|
(e)
|
communicate with any representative of the media (including but not limited to television (terrestrial, satellite and cable), radio, the internet, newspapers and other journalistic publications) or any third party,
|
13.1
|
In this clause 13 the following words and phrases shall have the following meanings:
|
(i)
|
“Prospective Customer” means any person, firm or company who in the 12 months immediately prior to the Restriction Date has been (i) an active target of the Company or any Associated Company, or (ii) offered contract terms by the Company or any Associated Company, or (iii) participating in active negotiations with the Company or any Associated Company in respect of the supply of goods or services by the Company or any Associated Company and with whom the Executive:
|
(a)
|
had dealings on behalf of the Company or any Associated Company; or
|
(b)
|
was responsible or concerned via an employee, agent or consultant of the Company or any Associated Company who reported to him;
|
(ii)
|
“Restricted Business” means those of the businesses of the Company and the Associated Companies with which the Executive was involved to a material extent at any time during the period of 12 months immediately prior to the Restriction Date;
|
(iii)
|
“Restricted Customer” means any firm, company or other person who at any time during the period of 12 months immediately prior to the Restriction Date, was a customer of, or in the habit of dealing with the Company or any Associated Company and with whom or which the Executive dealt to a material extent, or in respect of whom or which the Executive was responsible, on behalf of the Company or any Associated Company during that period;
|
(iv)
|
“Restricted Employee” means any person who, at the date of the termination of the Executive’s employment, was employed by the Company or any Associated Company at Senior Executive level or above or was an employee or consultant, and in either case with whom the Executive worked during the period of 12 months immediately prior to the Restriction Date; and
|
(v)
|
“Restricted Supplier” means any firm, company or other person who at any time during the period of 12 months immediately prior to the Restriction Date, was a provider or supplier or a prospective provider or supplier of goods or services (other than utilities and goods or services supplied for administrative purposes) to the Company or any Associated Company, including any person who provided services to the Company or any Associated Company by way of a consultancy agreement, and with whom the Executive dealt to a material extent during that period;
|
(vi)
|
“Restriction Date” means the earlier of the date of termination of this Agreement and the start of any period of Garden Leave under clause 16.
|
13.2
|
The Executive will not, without the prior written consent of the Company, for a period of 12 months immediately following the Restriction Date, canvas, solicit or approach, or cause to be canvassed, solicited or approached, for the purpose of obtaining business, orders or custom any person, firm or company who was (i) a Restricted Customer, or (ii) a Prospective Customer, or (iii) a Restricted Supplier. This restriction will only apply in circumstances where The Executive is engaged in, provides services to, is an officer of, or has any financial interest in, or be concerned with in any capacity, in any business concern which is in competition with any Restricted Business in (i) the UK, or (ii) Europe.
|
13.3
|
The Executive will not, without the prior written consent of the Company, for the period of 12 months immediately following the Restriction Date perform any services or supply goods to any person, firm or company who was (i) a Restricted Customer, or (ii) a Prospective Customer, or (iii) a Restricted Supplier. This restriction will only apply in circumstances where The Executive is engaged in, provides services to, is an officer of, or has any financial interest in, or be concerned with in any capacity, in any business concern which is in competition with any Restricted Business in (i) the UK, or (ii) Europe.
|
13.4
|
The Executive will not, without the prior written consent of the Company, for the period of 12 months immediately following the Restriction Date,
|
(b)
|
offer or conclude any contract for services with any Restricted Employee; or
|
(c)
|
procure, or facilitate or assist in the making of such an offer of employment or contract for services to a Restricted Employee by any person, firm, company or other organisation; or
|
(d)
|
entice away any Restricted Employee from the employment of the Company or any Associated Company.
|
13.5
|
The Executive will not without the prior written consent of the Company, for the period of 12 months immediately following the Restriction Date, be engaged in, provide services to, be an officer of, have any financial interest in, or be concerned with in any capacity, in any business concern which is in competition with any Restricted Business in (i) the UK, or (ii) Europe. This clause shall not restrain the Executive from being engaged or concerned in any business concern in so far as the Executive’s duties or work there shall relate solely;
|
(a)
|
to geographical areas either (i) where the business concern is not in competition with the Restricted Business, or (ii) in respect of which the Executive had had no dealings or was not responsible during the 12 month period immediately prior to the Restriction Date; or
|
(b)
|
to services or activities of a kind with which the Executive was not concerned to a material extent during the period of 12 months ending on the date of the Restriction Date.
|
13.6
|
Clause 13.5 shall not prevent the Executive from being a holder of not more than 3% of any class of shares, debentures or other securities in a company which is listed or dealt in on a Recognised Investment Exchange.
|
13.7
|
The obligations imposed on the Executive by this clause 13 extend to him acting not only on his own account but also on behalf of any other firm, company or other person and shall apply whether he acts directly or indirectly.
|
(a)
|
each of the sub-paragraphs contained in this clause 13 constitutes an entirely separate, severable and independent covenant and restriction on him;
|
(b)
|
the duration, extent and application of each of the restrictions contained in this clause 13 is no greater than is necessary for the protection of the goodwill and trade connections of the Company; and
|
(c)
|
if a restriction on him contained in this clause 13 is found void but would be valid if some part of it were deleted or amended, the restriction shall apply with such deletion or amendment as may be necessary to make it valid and effective.
|
15.1
|
The removal of the Executive from the office of director of the Company or the failure of the Company in general meeting to re-elect the Executive as a director of the Company if under the Articles of Association for the time being of the Company he shall be obliged to retire by rotation or otherwise shall not terminate his employment under this Agreement.
|
15.2
|
The Executive shall not except with the consent of the Company during his employment resign his office as a director of the Company or any Associated Company or do anything which could cause him to be disqualified from continuing to act as such a director.
|
15.3
|
The Executive shall resign as a director of the Company and all Associated Companies with immediate effect on the termination of this Appointment or (if so requested by the Company) with effect from the date when the Company exercises all or any of its rights under clause 16.
|
16.
|
Garden Leave and Suspension
|
16.1
|
The Company may suspend the Executive for a reasonable period on full pay for the purpose of investigating the substance of any potential disciplinary matter involving the Executive and holding a disciplinary hearing. The Executive must not during any period of suspension, without the written consent of the Company, go to any premises of the Company or any Associated Company or contact or deal with any employee, customer, client or supplier of the Company or any Associated Company.
|
16.2
|
Where either the Company or the Executive gives notice to terminate this Appointment, the Company may require the Executive to cease to perform all or part his duties under this Agreement and/or not to attend at the Company’s premises during all or any part of the notice period as the Company so decides. The Company may require the Executive during part or all of such period to perform part but not all of his normal duties or to perform duties different from his normal duties, including carrying out specific projects or tasks (but not being duties inappropriate to his status). The Executive shall comply with any other reasonable instructions and conditions imposed by the Company during such period.
|
16.3
|
During Garden Leave the Company shall continue to pay the Executive his normal salary and provide other contractual benefits to which he has an entitlement under this Agreement, but the Executive shall not be entitled to any incentive, bonus or commission payments. During this period the Executive, who shall remain in employment, shall continue to be bound by all obligations owed to the Company under this Agreement.
|
16.4
|
The Executive must not during Garden Leave directly or indirectly be employed by or retained by or advise or assist any other person, company or entity in any capacity whether paid or unpaid.
|
16.5
|
The Executive shall during Garden Leave remain available to perform any reasonable duty requested by the Company and shall co-operate generally with the Company to ensure a smooth hand over of his duties. Should the Executive fail to make himself available for work having been requested by the Company to attend, he shall, notwithstanding any
|
16.6
|
The Company may appoint another individual to carry out the duties of the Executive during any period that he is on Garden Leave in accordance with this clause 16.
|
17.1
|
The Company may terminate the Executive’s employment by serving 12 months’ written notice on the Executive. The Executive may terminate his employment by serving 6 months’ written notice on the Company.
|
17.2
|
The Company may, in its absolute discretion, lawfully terminate the employment of the Executive at any time by paying to the Executive a sum in lieu of notice equal to his basic salary under clause 4.1 and the value of such other benefits as the Company may opt not to provide for all or part of any notice period (whether given by the Executive or the Company). Any such payment shall be subject to appropriate statutory deductions. To avoid doubt, nothing in this clause 17.2 shall give rise to any right for the Executive to require the Company so to exercise its discretion or shall give him any right to receive any such payment in lieu of notice unless and until he has been notified in writing by the Company of its decision to make such a payment.
|
17.3
|
If applicable, should the Executive lose the right to work in the UK and/or is unable to provide the company with the required documentary evidence, the company reserves the right to terminate the Executive’s employment without notice, within a reasonable period of discovery of this.
|
(a)
|
becomes a patient for any purpose of any statute relating to mental health; or
|
(b)
|
is convicted of any criminal offence (other than a motoring offence for which no custodial sentence is given to him); or
|
(c)
|
shall have an order under Section 252 of the Insolvency Act 1986 made in respect of him or if an interim receiver of his property is appointed under Section 286 of that Act; or
|
(e)
|
shall be guilty of any gross misconduct (which, for the avoidance of doubt, includes any conduct which tends to bring the Company or any Associated Company into material disrepute, e.g., driving whilst over the legal alcohol limit), or gross negligence or shall commit any serious or persistent breach of any of his obligations to the Company or any Associated Company (whether under this Agreement or otherwise);
|
(f)
|
shall refuse or neglect to comply with any lawful orders given to him by the Company;
|
(g)
|
resigns as a director of the Company or any Associated Company without the Company’s consent.
|
17.5
|
Any delay or forbearance by the Company in exercising any right of termination shall not constitute a waiver of it.
|
18.
|
Intellectual Property
|
18.1
|
For the purposes of this clause 18 the following words and phrases shall have the following meanings:
|
(i)
|
“Works”
means all works, designs, innovations, inventions, improvements, processes, get-up, trademarks and trade names.
|
(ii)
|
“Company Works”
means all Works authored, originated, conceived, written or made by the Executive alone or with others (except only those Works which are authored, originated, conceived, written or made by the Executive wholly outside the course of his employment).
|
(iii)
|
“Intellectual Property Rights”
means any and all patents, trademarks, signs and services marks, rights in designs, trade or business names or signs, copyrights, database rights and topography rights (whether or not any of these is registered and including applications for registration of any such thing) and all rights or forms of protection of a similar nature or having
|
18.2
|
The parties foresee that the Executive may create Company Works during the course of this Appointment. All Company Works shall vest in and be owned by the Company immediately upon their creation. It shall be part of the Executive’s normal duties at all times to:
|
(i)
|
consider in what manner and by what new methods or devices the products, services, processes, equipment or systems of the Company with which the Executive is concerned or for which the Executive is responsible might be improved; and
|
(ii)
|
promptly disclose to the Company full details of any invention or improvement which the Executive may from time to time make or discover in the course of his duties including, without limitation, details of all Company Works; and
|
(iii)
|
further the interests of the Company’s undertaking with regard thereto with the intent that subject to the Patents Act 1977, the Company shall be entitled to the sole and absolute ownership of any such Company Works and to the exclusive use thereof free of charge and free of any third party rights.
|
18.3
|
To the extent such rights do not vest immediately in the Company the Executive hereby agrees to assign to the Company all of the Executive’s right, title and interest in the Company Works together with all of his right, title and interest in any and all Intellectual Property Rights which subsist from time to time in the Company Works.
|
18.4
|
To the extent such rights do not vest immediately in the Company the Executive hereby assigns to the Company all future copyright in the Company Works and the parties agree that all such future copyright shall vest in the Company by operation of law pursuant to section 91 of the Copyright, Designs and Patents Act 1988.
|
18.5
|
The Executive hereby irrevocably and unconditionally waives, in favour of the Company, its licensees and successors-in-title any and all moral rights conferred on the Executive by Chapter IV of Part I of the Copyright, Designs and Patents Act 1988 in relation to the Company Works (existing or future) and any and all other moral rights under any legislation now existing or in future enacted in any part of the world including, without limitation, the right conferred by section 77 of that
|
18.6
|
The Executive acknowledges that, for the purpose of the proviso to section 2(1) of the Registered Designs Act 1949 (as amended), the covenants made under this Agreement on the part of the Executive and the Company will be treated as good consideration and the Company will be the proprietor of any design which forms part of the Company Works.
|
18.7
|
Nothing in this clause 18 shall be construed as restricting the rights of the Executive or the Company under sections 39 to 43 (inclusive) of the Patents Act 1977.
|
18.8
|
The Executive shall not knowingly do anything to imperil the validity of any patent or protection or any application therefore, relating to any of the Company Works but shall at the cost of the Company render all possible assistance to the Company both in obtaining and in maintaining such patents or other protection.
|
18.9
|
The Executive shall not either during the Executive’s employment or thereafter exploit or assist others to exploit any of the Company Works or any invention or improvement which the Executive may from time to time make or discover in the course of his duties or (unless the same shall have become public knowledge) make public or disclose any such Company Works or invention or improvement or give any information in respect of it except to the Company or as the Company may direct.
|
18.10
|
The Executive hereby irrevocably authorises the Company for the purposes of this clause 18 to make use of his name and to sign and to execute any documents or do anything on his behalf (or where permissible to obtain the patent or other protection in the Company’s own name or in that of its nominees in relation to any of the Company Works).
|
18.11
|
The Executive shall forthwith and from time to time both during the Appointment under this contract and thereafter, at the request and expense of the Company, do all things and execute all documents necessary or desirable to give effect to the provisions of this clause 18 including, without limitation, all things necessary or conducive to obtain
|
19.
|
Waiver of Rights
|
(a)
|
by reason of liquidation of the Company for the purpose of amalgamation or reconstruction; or
|
(b)
|
as part of any arrangement for the amalgamation of the undertaking of the Company not including liquidation or the transfer of the whole or part of the undertaking of the Company to any Group Company; and
|
20.
|
Data Protection
|
21.
|
Communications
|
22.
|
Notices
|
23.
|
Miscellaneous Matters
|
23.1
|
For the purpose of the Employment Rights Act 1996 the Executive’s continuous period of employment began on 2
nd
February 2004.
|
23.2
|
The Company’s Disciplinary Procedure, as in force from time to time, shall apply to the Executive.
|
23.3
|
If the Executive has a grievance relating to his employment he should first apply in person to the CEO, Europe. If the matter is not then settled the Executive should write to the Directors of the Company (or its successor company) setting out full details of the matter. The decision of the Directors of the Company (or its successor company) on such matters shall be final.
|
23.4
|
There are no collective agreements which are applicable to this Appointment.
|
23.5
|
Upon the termination of the Executive’s employment (for whatever reason and howsoever arising) the Executive shall immediately repay all outstanding debts or loans due to the Company or any Associated Company and the Company is hereby authorised to deduct from any payment of salary a sum in repayment of all or any part of such debts or loans.
|
23.6
|
The Executive may be required by the Company at any time to undergo an appropriate medical examination as determined by a doctor appointed by the Company.
|
23.7
|
The Executive will be provided with copies of the Molson Coors Code of Business Conduct and the Company’s Competition Law Compliance Code. The Executive agrees to review these Codes and sign an affirmation that he understands and will comply with their provisions.
|
24.
|
Other Agreements
|
24.1
|
The Executive acknowledges and warrants that there are no agreements or arrangements or court orders which limit or restrict in any way the Executive from fully and efficiently performing his duties under this Agreement with effect from its commencement
|
24.2
|
Other than where other policies, plans, codes or procedures are specifically referred to and imported into this Agreement, this Agreement represents the entire agreement between the Company or any Associated Company and the Executive relating to the employment of the Executive. In the event of any inconsistencies between any such policies, plans, codes or procedures, the terms of this Agreement shall prevail. This Agreement cancels and is in substitution of all previous agreements, arrangements and understandings (whether oral or in writing) between the Executive and the Company and/or any Associated Company.
|
24.4
|
The Executive warrants that he is not entering into this Agreement in reliance on any representation not expressly set out herein.
|
25.
|
Governing Law
|
SIGNED
by the Executive as a Deed
|
/s/ Simon Cox
_____________
|
Signature of Witness:
|
/s/ T.J. Edwards
|
Name of Witness:
|
Tracy Edwards
|
1
|
TERMS AND CONDITIONS OF EMPLOYMENT
|
1.1
|
You will remain an employee of MCBC UK and you will not become an employee of MCE during your secondment by MCBC UK to MCE. Except as provided below, your terms and conditions of employment as set out in the Directors Service Agreement entered into between you and MCBC UK on 1 October 2012
("Employment Contract")
(as amended) remain unchanged.
|
1.2
|
In the event of any inconsistency between this Letter and the Employment Contract, this Letter shall prevail during the term of your secondment by MCBC UK to MCE.
|
1.3
|
If any changes are made to your terms and conditions of employment (and/or to the Employment Contract) during your secondment to MCE, the secondment shall continue on the amended terms and conditions and the terms of this Letter.
|
1.4
|
Your secondment will commence on 1 January 2015 and continues thereafter, subject to the terms of this Letter and your Employment Contract, as amended by this Letter.
|
1.5
|
During the secondment by MCBC UK to MCE, you will devote the whole of your working time, attention and skill to the duties required of you in relation to the business of MCE in the position of President and Chief Executive Officer, MCE under the instructions of the statutory body of MCE or the appropriate managing employee of MCBC. At the end of your secondment, your employment with MCBC UK will continue, unless and until terminated in accordance with the terms of the Employment Contract.
|
1.6
|
You will continue to participate in the MCBC Long Term Incentive Plan, subject to the terms of the plan. Your annual LTIP target will increase to US$1,000,000, subject always to MCBC's right to discontinue or amend the terms of this plan at any time and from time to time and, in such event, MCE, MCBC, MCBC UK or any Associated Company shall
|
1.7
|
You will continue to accrue all your pension benefits, relating to your period of employment post 4 April 2009, under the Molson Coors Retirement Savings Plan (MCRSP) and from after 5 April 2012 a combination of the MCRSP and the employer-financed retirement benefit scheme (EFRBS) arrangement as per the letters from MCBC UK to you dated 24 May 2012 and 19 September 2013.
|
2
|
DURING THE
SECONDMENT
|
(a)
|
you will report to the statutory body of MCE or the appropriate managing employee of MCBC or such other person as MCE may from time to time require and will perform work under their instructions;
|
(b)
|
while you will carry out the work required of you as President and Chief Executive Officer of MCE, you will be a mobile worker maintaining permanent residence in the UK. You will be required to attend Group locations throughout MCE as required of your duties as President and Chief Executive Officer, with a minimum requirement to spend at least 25% of your time in the performance of your duties in the United Kingdom (an average of 6 working days per month over the tax year);
|
(c)
|
your salary and other remuneration will continue to be paid by MCBC UK and reviewed, agreed and approved by the Board Compensation and Human Resources Committee of MCBC;
|
(d)
|
all other contractual benefits of your employment will continue to be honoured by MCBC UK; provided further that you acknowledge:
|
(i)
|
for purposes of the Employment Contract MCE is an Associated Company;
|
(ii)
|
or purposes of Section 3.2 of the Employment Contract you shall report to the MCBC CEO;
|
(iii)
|
for purposes of Section 4.1 of the Employment Contract, commencing on January 1, 2015, the reference to GBP 225,000 shall be increased to GBP 275,000 (with your next salary review to be effective 1 April 2016)
|
(iv)
|
for purposes of Section 6 of the Employment Contract, you will be entitled to one motor car in either the UK or Czech Republic (or a corresponding allowance as contemplated thereby);
|
(v)
|
for purposes of Section 15 of the Employment Contract you shall resign as a director of the Company or any subsidiaries effective as of December 31, 2014;
|
(e)
|
MCE shall procure that you will be eligible to participate in the benefits provided by MCBC under the Molson Coors Europe Senior Mobile Workers Policy. Key provisions of that policy are:
|
(i)
|
you will be provided with housing while in Prague and accommodation whilst travelling from your home base (with the temporary housing provided in Prague through June 2015 to be reviewed based on your travel needs at that point);
|
(ii)
|
reasonable travel costs to and from your primary residence in the UK will be covered;
|
(iii)
|
you will receive medical cover while in Prague or otherwise traveling outside of the UK; and
|
(iv)
|
you will receive tax return preparation services from the relevant company's tax provider, along with any necessary tax gross-ups on these related services.
|
(f)
|
In addition to the provisions of the Molson Coors Europe Senior Mobile Workers Policy you will be eligible to the following enhancement;
|
(i)
|
An allocation of twelve round-trip tickets per year for your immediate family (spouse and children) between the UK and Prague. Unused tickets are not subject to an "in-kind" compensation payment or available to be rolled over to the following year.
|
3
|
END OF SECONDMENT
|
3.1
|
Your secondment to MCE will terminate:
|
(a)
|
automatically and with immediate effect, if you cease to be employed by MCBC UK for any reason, including your resignation;
|
(b)
|
automatically and with immediate effect, if MCE's secondment agreement with MCBC UK terminates for any reason; or
|
(c)
|
if so decided by MCBC UK, who will have the right to terminate your secondment immediately by serving you a written immediate cancellation of your secondment, where:
|
(i)
|
you commit an act of gross misconduct;
|
(ii)
|
if you are absent for reasons other than annual, study, paternity, parental, special or other leave authorised the President & CEO of MCBC from the performance of your duties for a period of 60 working days in any period of 12 consecutive months; or
|
(iii)
|
if you act in any other such way that your continued secondment is likely to adversely affect MCE.
|
3.2
|
Termination of secondment by notice:
|
(a)
|
MCBC UK may terminate your secondment by a written secondment termination notice delivered to you with 60 days' notice period without stating a reason or for any reason such termination of secondment does not affect your employment with MCBC UK.
|
(b)
|
Should any such event occur, MCBC UK may also have the right to terminate your employment. However, the termination of your secondment does not by itself terminate your employment with MCBC UK.
|
4
|
DISCIPLINARY AND GRIEVANCE MATTERS
|
5
|
CONFIDENTIAL INFORMATION
|
6
|
PROPERTY
|
7
|
INTELLECTUAL PROPERTY RIGHTS
|
(a)
|
the maximum working hours and minimum rest periods;
|
(b)
|
the minimum duration of annual leave or its proportional part;
|
(c)
|
the minimum salary, the relevant minimum level of guaranteed salary and extra pay for overtime work;
|
(d)
|
occupational safety and health protection;
|
(e)
|
equal treatment of male and female employees and prohibition of discrimination.
|
1.
|
I hereby accept the terms and conditions of my secondment by Molson Coors Brewing Company (UK) Limited, whose registered office is at 137 High Street, Burton Upon Trent, DE14 1JZ, Staffordshire, United Kingdom, to Molson Coors Europe s.r.o., whose registered office is at Nadrazni 84, Postal Code 150 54, Prague 5, Czech Republic, Identification Number: 289 85 630 registered in the Commercial Registry maintained by the Municipal Court in Prague, Section C, Insert 157920, on the terms and conditions set out in the Secondment Letter dated November __, 2014, of which the above is a copy ; and
|
2.
|
I hereby waive, in compliance with Czech law and for the benefit of Molson Coors Europe s.r.o., whose registered office is at Nadrazni 84, Postal Code 150 54, Prague 5, Czech Republic, Identification Number: 289 85 630 registered in the Commercial Registry maintained by the Municipal Court in Prague, Section C, Insert 157920, all and any rights as I might have for satisfaction of any receivable against Molson Coors Europe s.r.o. arising from my appointment to the position of the corporate executive position at Molson Coors Europe s.r.o. and for the performance of such corporate executive position at Molson Coors Europe s.r.o. in relation to the period from my appointment to such corporate position until the date of my signature of this waiver.
|
3.
|
Notwithstanding the above, I hereby further agree and undertake, for the benefit of Molson Coors Europe s.r.o., that I have performed and will perform the position of the corporate executive of Molson Coors Europe s.r.o., for the entire period from the date of my appointment until termination of my performance of the position of the corporate executive of Molson Coors Europe s.r.o., without entitlement to any remuneration for such performance of the corporate position. If I become entitled to any remuneration for the performance of the position of the corporate executive of Molson Coors Europe s.r.o. for the period from the date following my signature and acceptance of this Secondment Letter, I hereby irrevocably waive all my rights as I might have for satisfaction of any such receivable for remuneration against Molson Coors Europe s.r.o.
|
Date:
|
5
th
December 2014
|
Place:
|
Burton on Trent
|
Name:
|
Simon Cox
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Molson Coors Brewing Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
/s/ MARK R. HUNTER
|
|
|
Mark R. Hunter
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
May 1, 2019
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Molson Coors Brewing Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
/s/ TRACEY I. JOUBERT
|
|
|
Tracey I. Joubert
Chief Financial Officer
(Principal Financial Officer)
|
|
|
May 1, 2019
|
(a)
|
the Quarterly Report on Form 10-Q of the Company for the quarterly period ended
March 31, 2019
filed on the date hereof with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(b)
|
Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
/s/ MARK R. HUNTER
|
|
|
Mark R. Hunter
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
May 1, 2019
|
|
|
|
|
|
/s/ TRACEY I. JOUBERT
|
|
|
Tracey I. Joubert
Chief Financial Officer
(Principal Financial Officer)
|
|
|
May 1, 2019
|