Question

On February 9, 2005, Adolph Coors Company merged with Molson Inc. to from Molson Coors Brewing Company. Molson was founded in 1786 in Canada and Coors was founded in 1873 in the US since the beginning, each company has been committed to producing the highest-quality beers. The Molson Coors brands are designed to appeal to a wide range of consumer tastes, styles and price preferences. The company’s largest markets are Canada, the United Kingdom. (Source: Company 2013 Form 10-K) A company’s performance can be analyzed in many ways. Return on net operating assets (RNOA) is a common metric. Answer the following questions and label your answer well. 1. Examine Molson Coors income statements for 2013 and 2012 and the relevant notes to the financial statements. a. Identify items that you consider “nonoperating.” Explain each item briefly

Answer 1

1 (a): From the analysis of Molson Coors Brewing Company’s income statements and relevant notes to the financial statements from the 2013 Form 10-K we can see that for the company the items that are non-operating are those items that do not constitute as its day-to-day production resources.

For instance for Coors Brewing Company assets like deferred tax assets, goodwill and other intangibles will be considered as non-operating in nature as these assets are not required to carry out Coors Brewing Company’s business functions.

Deferred tax assets refers to that tax that is recoverable in future period. It is an asset that is used to reduce the taxable income and hence is in no way helps in carrying out the core functions of the Coors business. Goodwill and other intangibles are also non-operating assets as they are not used in the conduct of ongoing operations of Coors business. Goodwill represents a non-physical item that adds to a company's value.

The link for the company’s 2013 10-K is provided below:

https://www.sec.gov/Archives/edgar/data/24545/000002454514000004/tap2013123110-k.htm#s56B1691883EA9DE9F504CAEFE75210AB