3. Calculate Molson Coors return on net operating assets (RNOA) for 2013 and 2012. Compare the two returns. Note: to simplify the analysis, use year-end values for net operating assets rather than averages.

Molson Coors Brewing Company Case On February 9, 2005, Adolph Coors Company merged with Molson Inc. to from Molsoin 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 b. Calculate the total after-tax amount of the nonoperating items you identified To simply this calculation, assume that the company's three-year marginal tax rate (federal, state and foreign) of 12% applies to nonoperating items in both years. Note: some nonoperating items are reported net of tax on the income statement. Use the marginal tax only for the items that are reported "before tax" on the income statement Calculate net operating profit after tax (NOPAT) for 2013 and 2012. Hint net operating profit after tax is calculated as net income before the effect of the after-tax amount of nonoperating items. c. 2. Examine Molson Coors balance sheets 2013 and 2012. Footnotes to the financial statements (not included with the case) reveal that the notes receivable (and the current portion thereof) relate to loans made to customers. a. Identify assets and liabilities that you consider "nonoperating." Explairn each item briefly. b Calculate net operating assets (NOA) for 2013 and 2012. 3. Calculate Molson Coors' return on net operating assets (RNOA) for 2013 and 2012 Compare the two returns. Note: to simplify the analysis, use year-end values for net operating assets rather than averages 4. Compute the net operating profit margin (NOPM) and net operating asset tumover NOAT) components of Molson Coors RNOA for 2013 and 2012. Use the components to explain the change in RNOA from 2013 to 2012. Note: 1) to simplify the analysis, use year-end values for net operating assets rather than averages; 2) use "Net sales" not "Sales" to compute ratios MOLSON COORS BREWING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN MILLIONS, EXCEPT PER SHARE DATA) For the Years Ended December 31,2013 December 29, 2012 December 31, 2011 5,999.6:$ (1,793.5) 2,545.6 (1,193.8) (1,698.5) (2,352.5) (1,126.1) (1,654.2) (2,049.1) (1,019.0) 457.9 Excise taxes Net sales Cost of goods sold Marketing, general and administrative expenses Equity income in MillerCoors Other income (cxpense), net 539.0 Operating ingome (loss) 867:4 euse Interest income Total other income (expense) net (275.3) 654:5 . Income (loss) from continuing operations befre income taxes Income tax benefit (expene) (154.5) 570.5 674.8. (99.4 Net income (loss) from continuing operations - Income (loss) from discontimued operations, net of tax Net income (loss) including noncontrolling intersts (5.2) 567.3 $ Less: Net (income) loss attributable to noncontrolling interests 0,8 Not income Toss) atribitable to Molson Coors Brewing Conpany Basic net income (loss) attributable to Molson Coors Brewing Company per share :676.3, 2,44 $365 From continuing operations From discontimued operations B (los attioutable to Molson Coors Breving Company per share s Diluted net income (loss) attributable to Molson Coors Brewing Company per share: Erom continuingoperations From discontinued operations .0.01 .. 0,01 Dilutedt et income(loss)at ib tabletoM ledC Weighted-average sharesbasic hares Bre ingCompany p 184.9 1801864 184.2 Amounts attributable to Molsoni Coors Brewing Company Ne ince (loss) froa continuinig operations Inoome (loss) from discontinued operations, net of tax... cCoss attributable toMolson Coors Browing Company 567.3S 4430S676.3 See notes to consolidated fnancial statetments. MOLSON COORS BREWING COMPANY AND SUBSIDIARIES CONSOLEDATED BALANCE SHEETS (Continued) IN MILLIONS, EXCEPT PAR VALUE) As of December 31,2013 December 29, 2012 Liabilities and equithy Curreat liabilities Acon peyable and other current iabilities Cinoldes atfite payable amonis of s22.8 and $34.1 1,336.4 S .: 1,186.9 Tespectively) Derivative hedging instruments Defored tax liabilities Current portion of long-term debt and short-tem borrowings isc operation 586.9 1,245.6 2,598.7 .3,422.5 2,142.1 Total current liabilities 3,213.0 462.6 833.0 222:2 948.5 Pension and postrotirement benefits vorivatives hedging instrumients1 Deferred tax liabilities 21 Unrecognized tax benefits Other liabilities 17:3 Discontinued operafions Total liabilities 6,916.3 8,220.6 Commiment and contingencies 1 Molson Coors Brewing Company stockholders' equity Prefcrred stock, no par value (authorized: 25.0 shares; none issued) class ^ commion stoct; su.o par value (anthortzed: 500.0 shares issued and outstanding 2.6 shares and 2.6shares, respectively) Class B common stock, $0.01 par value (authorized: 500.0 shares; issued: 167.2 shares and 164.2 shares, respectivey) class ^ exchaingeable shares, no par value (isued and outsianding: 2.9 shares and 2.9 shares, :.., 108.5 110.2 Class B exchangeable shares, no par value (issued and outstanding: 19.0 shares and 19.3 shares, respectivel) 724.4 3623.6 3,900.5 (72.3) (321.1) 7,966.9 24.7 7,991.6 16,212.2 3,147.6 4,233.2 154.9 (321.1) 8,638.9 Paid-in capital Retained earnings Class B common stock held in treasury at cost (7.5 shares and 7.5 shares, respectively) Total euity other o cormprehnsive income (loss) . . Total Molson Coors Brewing Comipany stockholders' equity Noncontrolling interests. 8,663:8 15,580.1 Total liabilities and equity See notes to consolidated financial statements. MOLSON COORS BREWING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (EXCERPTS) Basis of Presentation and Summary of Significant Accounting Policies 1. Revenue Recognition Our net sales represent the sale of beer and other malt beverages (including adjacencies, such as cider) net of excise taxes, the vast majority of which are brands that we own and brew oursclves. Weimport or brew and sell certain non-owned partner brands under licensing and related arangements. In addition, we contract manufacture for other brewers in some of our markets. Revenue is recognized when the significant risks and rewards of ownership, including the risk of loss, are transferred to the customer or distributor depending upon the method of distribution and shipping terms. The cost of various programs, such as price promotions, rebates and coupon programs are treated as a reduction of sales. In certain of our markets, slotting or listing fees are paid to customers and are also treated as a reduction of sales, Sales of products are for cash or otherwise agreed upon credit terms. Sales are stated nct of incentives, discounts and returns. We do not have standard terms that permit return of product; however, in certain markets where returns occur we estimate the amount of returns based on historical return experience and adjust our revenue accordingly. Products that do not meet our high quality standards are returmed by the customer or recalled and destroyed and are recorded as a reduction of revenue. The reversal of revenue is recorded upon determination that the product will be recalled and destroyed. We estimate the costs required to facilitate product returns and record them ia cost of goods sold as required. In addition to supplying our own brands, the U.K. business (within our Europe segment) sells other beverage companies' products to on-premise customers to provide them with a full range of products for their retail outlets. We refer to this as the "factored brand business." Sales from this business are included in our net sales and cost of goods sold when ultimately sold, but the related volume is not inctuded in our reported sales volumes. In the factored brand business, we normally purchase inventory, which includes excise taxes charged by the vendor, take orders from customers for such brands, and invoice customers for the product and related costs of delivery. In accordance with guidance pertaining to reporting revenue gross as a principal versus net as an agent, sales under the factored brands are reported on a gross income basis. Payments made to customers are conditional on the achievement of volume targets, marketing commitments, or both. Ifpaid in advance, we record such payments as prepayments and amortize them in the consolidated statements of operations over the relevant period to which the customer commitment is made (up to five years). Where there is no sufficiently separate identifiable benefit, and the payment is linked to volumes, or fair value cannot be established, the amortization of the prepayment or the cost as incurred is included in sales discounts as a reduction to sales and where there are specific marketing activities/commitments the cost is included as marketing, general and administrative expenses. The amounts capitalized are reassessed regularly for recoverability over the contract period and are impaired where there is objective evidence that the benefits will not be realized or the asset is otherwise not recovcrablc. In the UK., loans are extended to a portion of the retail outiets that sell our brands. We reclassify a portion of beer revenue to interest income to reflect a market rate of interest on these loans. In fiscal years 2013, 2012 and 2011, these amounts were $4.9 nillion, $5.7 million, and $6.3 million, respectively included in the Europe segment. Excise Taxes Excise taxes collected from customers and remitted to tax authorities are government-imposed excise taxes on beer shipments. Excise taxes on beer shipments are shown in a separate line item in the consolidated statements of operations as a reduction of sales. Sales taxes collected from customers are recognized as a liability, with the liability subsequently reduced when the taxes are remitted to the tax authority Cost of Goods Sold Our cost of goods sold includcs costs we incur to make and ship beer. These costs include brewing materials, such as barley, hops and various grains. Packaging materials, including glass botties, aluminum and steel cans, cardboard and paperboard are also included in our cost of goods sold. Additionally, our cost of goods sold include both direct and indirect labor, shipping and handling including freight costs, utilities, maintenance costs, depreciation, promotional packaging, other manufacturing overheads and costs to purchase factored brands from suppliers, as well as the estimated cost to facilitato product returns. Marketing, General and Administrative Expenses Our marketing, general and administrative expenses include media advertising (television, radio, print), tactical advertising (signs, banners, point-of sale materials) and promotion costs on both local and national levels within our operating segments. The areative portion of our advertising activities is expensed as incurred. Production costs of advertising and promotional materials are expensed when the advertising is first run. Advertising cxpense was $458.5 million, $423.5 million in other were included million, current assets in the consolidated balance sheets at December 31, 2013, and December 29, 2012, respectively This classification inclhudes general and administrative costs for functions such as finance, legal, human resources and information technology, which oubtful accounts. Unless capitalization is allowed or consist primarily of labor and outside services, as well as bad debt expense related to our allowance for d required by U.S. GAAP, legal costs are expensed when incurred. These costs also overheads. This line item additionally includes amortization costs associated with intangible assets, as well as production equipment and share-based compensation. inctude our marketing and sales organizations, including labor and other certain depreciation costs related to non- Share-based compensation is recognized using a straight-ine method over the vesting period of the awards. Certain share-based compensation plans that accolerate vesting of awards upon change in control, retirement, disability or death of eligible employees and directors. Our share-based awards are considered vested when the employee's retention of the award is no longer contingent on providing service, which for oertain awards can immediate recognition for awards granted t retirement eligible within the stated vesting period. Also, if less than the stated vesting period, we recognize these costs over the period from the grant date to the date retirement eligibility is achieved. We report the benefits of tax deductions in excess of recoguizod compensation cost as a financing cash flow, thereby reducing net operating cash flows and increasing net financing cash flows. to retirement-eligible individuals or accelerated recognition for awards granted to individuals that will become Special Items Our special items represent charges incurred or benofits realized that we do not believe to be indicative of our core operations; specifically, such items are considered to be one of the following: infrequent or unusual items, restructuring charges and other atypical employee-related costs, or .fees on termination of significant operating agreements and gains (losses) on disposal of investments. Although we believe these items are not indicative of our core operations, the items classificd as special items are not necessarily non-recurring. Equity Income in MillerCoors Our eqaity income in MillerCoors represents our proportionate share for the period of the net income of our investment in MillerCoors accounted for under the equity method. Such amount typically reflects adjustments to eliminate intercompany gains and losses, and to amortize, if appropriate, any difference between cost and underlying equity in net assets upon the formation of MillerCoors. Interest Expense, net earncd on our cash and cash equivalcnts across our Our interest costs are associated with borrowings to finance our operations. In addition to interest interest income in the Europe segment is associated with trade loans receivable from customers, primarily in the U.K. As noted above, this includes a portion of beer revenue which is reclassified to interest income to reflect a market rate of interest on these loans. We capitalize interest cost as a part of the certain fixed assets if the cost of the capital expenditure and the expected tine to complete the project are considered significant. Other Income (Expense) (expense) classification primarily includes gain and losses associated with activities not directlyrelated to brewing and selling beer classified in this line item. For instance, certain gains or losses on foreign exchange and on sales of non-operating assets are cl ncome Taxes income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of our assets, liabilities, and certain unrccognized gains and losses recorded in accumulated other comprehensive income (loss). We provide for taxes that may be payable if undistributed gs of overseas subsidiaries were to be remitted to the U.S., except for those earnings that we consider to be permanently reinvested. Interest, penalties an offsetting positions related to unrecognized tax benefits are recognized as a component of income t primarily the result of uncertainties regarding the future realization of reconded tax benefits on tax loss carryforwards from our consolidated balanoe sheet inchudes our investment in Tradeteam of $17.7 million. During t investment of $4.6 million, $6.0 million and S6.4 million, respectively, which are recorded within cost of goods sold ax expense. Our deferred tax valuation allowances are the fiscal years ended 2013, 2012 and 2011, we recognized equity carnings from our Tradeteami MCSi'hai Since its inception, the performance of the MC Sihai joint venture did not meet our expectations due to delays in executing its business plans as well as significant difficulties in working with our business partner. Through the on-going arbitration process, which began in 2012 as discussed below, we began discussions with the joint venture partner and concluded upon a price that we would accept to exit the relationship through the sale of our interest in the joint venture. As a result, in December 2013, we sold our interest in the joint venture and, upon finalizing the sale, we recognized a gain of $6.0 million, recorded as a special item. The gain consists of the non-cash release of the $5.4 million liability remaining upon deconsolidation in 2012, as further discussed below, as well as $0.6 million of proceeds received upon closing of the sale. We also recognized legal and related fees in relation to the sale of $1.2 milning 2013. In 2012, we recorded impairment charges related to the goodwill and definite-lived intangible assets in the joint venture, as well as concluded that we had lost our ability to exercise control of the joint venture which led to the deconsolidation of the joint venture. Speciffcally, due to the ongoing operational challenges of the joint venture, coupled with the impact of increased competitive pressures in China, we evaluated and subsequently impaired the full amount of the goodwill and definite-lived brand and distribution rights intangible assets recorded in relation to the joint venture, As a result, we recognized charges recorded as special items of $9.5 million and $0.9 million related to the goodwill and intangible asset impairments, respectively. Further, following the impairment, a number of events occurred that caused us to re-assess the consolidation of the joint venture. Specifically, due to the actions of our joint venture partner, we entered into arbitration for the termination and proposed liquidation of the joint vemture. This resulted in a loss of our ability to exercise legal or operational control over the joint venture in accordance with the terms of the joint venture agreement. As a result, we deconsolidated the joint venture during the third quarter of 2012. Upon deconsolidation, the fair value of the remaining investment was a liability of $54 million representing our share of the joint venture's liabilities at termination of the joint venture, resulting in an impairment loss of $27.6 million recorded as a special item in the third quarter of 2012. 6. Other Ineome and Expense The table below summarizes other income and expense: For the years ended December 29,2012 Tn millions) December 31, 2011 December 31, 2013 Gain on sale of non-oyerating assts(1) Bridge facility fees(2) Buro ourrency purchase loss(3) Gain from Foster's swap and related financial instruments(4) Gain (loss) from other foreign exchange and derivatiye activity(5) Loss related to the change in designation of cross currency swaps(6) Other, net Other income (expense), net 5.2 (13.0) (57.9) 23,5 $ 0.8 (6,9) (6.7) 06 3.2 18.9 (90.3) $ (1) In 1991, we became a limited partner in the Colorado Rockies Baseball Club, Ltd. (the Partnership"), treated as a cost method investment, Effective November 8, 2013, we sold our 14.6% interest in the Partnership and recognized a gain of $22.3 million. We did not make any cash contributions in 2013, 2012 or 2011, and cash distributions, recognized within other income, from the Partnership were immaterial in 2013, 2012 and 2011 Additionally, during the first quarter of 2013, we realized a S1.2 million gain for proceeds received related to a non-income-related tax settlement resulting from historical activity withi our former investment in the Montreal Canadiens. Included in this amount is a $5.2 million gain related to the sale of water rights in 2012. This also includes a related party gain of $1.0 million in 2011 related to sales of non-core real estate in Golden, Colorado to MillerCoors for $1.0 million. The selling price was based on a markot appraisal by an independent third party 95 (2)We incurred costs in connection with the issuance and subsequent termination of the bridge loan agreement entered into concurrent with the (3) In connection with the Acquisition, we used the proceeds from our issuance of the 19 billion senior notes to parchase Euros in the second quarter (4)During 2010, we settld the majority of our Foster's Group Limited's ("Posters") (ASX:FGL) totl retum swaps, which we used to gain an economic (5) Inchuded in this amount are losses of $2.4 million and $23.8 million for 2013 and 2012, respectively, related to foreign currency movements on announcement of the Acquisition during the sccond quarter of 2012. See Note 13, "Debt for further discussion. of 2012. As a result of a negative foreign exchange movement between the Euro and USD prior to using these proceeds to fiund the Acquisition, we realized a foreign exchange loss on our Euro cash holdings. interest exposure to Foster's stock, and related option contracts, which we used to limit our exposure to future changes in Foster's stock price. The remaining total return swaps and related options matured in January of 2011. foreign-denominated financing instruments entered into in conjunction with the financing and the closing of the Acquisition. Additionally, we recorded a net loss of $4.9 million during 2013, related to foreign cash positions and foreign exchange contracts entered into to hedge our risk associated with the payment of this foreign-denominated debt See Note 13, "Debt" and Note 17, "Derivative Instruments and Hedging Activities" for further discussion of financing and hedging activities related to the Acquisition. Additionally, we recorded losses of $0.5 million, S1.4 million and $6.9 million related to other foreign exchange and derivative activity during 2013, 2012 and 2011, respectively (6) See Note 17, "Derivative Instruments and Hedging Activities" under "Cross Currency Swaps" sub-heading for further discussion. 7. Income Tax Our income (loss) from continuing operations before income taxes on which the provision for income taxes was computed is as follows: For the years ended December 29,2012 (In mlllians) December 31,2013 December 31,2011 Domestic Foreign 809.7 S 155.2 654.5 $ 712.8 . $ 120.7 592.1$ 7.0 774.2 Total Income tax expense (benefit) includes the following current and deferred provisions: For the years ended December 29, 2012 (Ia millions) December 31, 2013 December 31,2011 Current Federal State Foreign.- otal rnxexpense(benefit) 39,1 11.8 50.7 45.5 $ 29.8 8.3 25.0 101.6 $ 82.0 $ 59.6 S 419588 Federal State 6.3 Foreign (22. Total deferred tax expense (benefit) Total income tax expense (benefit) from continuing operations (17.6) $ 84.0. $ 72.5 $ 154.5 99.4 96 The decrease in income tax expense in 2013 was primarily driven by the net foreign deferred tax benefits. These foreign defetred tx benefits largely resulted from the release of valuation allowances in Canada, as further discussed below, as well as decreases in deferred tax liabilities related to certain intangible assets that were impaired in 2013 Our inoome tax expense varies from the amount expected by applying the statutory federal corporate tax rate to income as follows: For the years ended December 29, 2012 December 31, 2013 December 31,2011 Statutory Federal income tax rate State income taxes, net of federal benefits 35.0% 35.0 % :-35.0 % 1.6% Bffect of foreign tax law and rate changes Bffect of unrecognied tax benefits Change in valuation allowance Other net 0.5% .3.3 % 6.8% C04 6.0% 2.1% 26.1 % - (0.9)%. i 12.8 % Bffective tax rate 12.8 % Our fiscal year effective tax rate was approximately 13% in 2013, 26% in 2012 ard 13% in 2011 our effective tax rates were significantly lower than the federal statutory rate of 35% primarily due to the rmpact of ower efective mcome tax rates applicable to our reign businesses and tax plarming. In addition, as part of the Acquisition, the statutory tax rates in the countries of Central Europe, ranging on 9% to 20% m which we began ong business drove the 2013 and 2012 change in the effect of foreign tax rates versus 2011. The 2012 foreign tax law and rate change impact, primanily relates to the Increased statutory corporate mcome tax rate tn Serbia tom 10% to 15% e ective January 1, 2013 enacted in 2012 As a result of the impact of the rate change on differences between the book basis and tax basis of intangible and other assets purchased in the Acquisitian, we increased our deferned tax liability by $38.3 milion in the fourth quarter of 2012. We recorded additional tax expense in 2012 due to increases ia our vahuation alowance related to capital loss carryforwards and operating losses in several of our jurisdictions. Seo further discussion below The table below summarizes our deferred tax assets and liabilities: Asef December 31,2013 December 29, 2012 (In milba*s) Current defecred tax assets: Compensation related obligations Foreign exchange Accrued liabilities and other Tax loss carryforwards Valuation allowance Balance sheet reserves and accruals Other 12 $ 49.4 53.5 3.0) (20.2) Total current deferred tax assets Current deferred tax liabilities: Balance sheet reserves and accruals Total current deferred tax liabilities Net current deferred tax assets Net current deferred tax liabilities 167.0 $ 156.0 87.7 $ 113.1 8. special Items We have incurred charges or recognized gains that we do not believe to be indicative of our core operations. As such, we have separately classified these charges (benefits) as special items. The table below summarizes special items recorded by segment For the years ended December 29, 2012 December 31,2011 December 31, 2013 Restructuring(1) o.1 S 19.8 10.6 14.5 0.4 1.3 2.1 MCI 2.0 Special termination benefits 5.2 2.2 17.9 150.9 5.0 Canada(2) Canada Intangible asset impairment(3) Europe - Asset abaidonment4) Europe Intangible asset impairment(5) Chia impatriment anid related costs 392 I1 lod los inurnice reimbursemen Canada -BRI loan guarantee adjustment(8) Canada-Fixed asset adjustment (9) Europe-Release of non-income-related tax rescrv(10) 0.2. (2.0) :" (2.3) (3.5) (4.2) (2.0) Europe- Flood loss (insurance reimbursement)(U1) Europe -Costs associated with strategic initiatives MCI . Costs associated with outsourcing and other strategic intiatives Europe Tradetean transiactions( 12) MCI Sale of China joint venture(6) 13.2 81.4$ 12.3 200.0 $ Totai Special items, net . (1) Dring 2013, 2012 and 2011, we recognized expenses associated with restructuring programs related to severance and other employee related charges. See further discussion of restructuring activities below pension plans in Canada. See Note 16, "Employee Retirement Plans and Postretirement Benefits" for impact to our defined benefit pension plans. agreement with Miller in Canada. See Note 19, "Commitments and Contingencies" for further discussion. determined that our Home Draft package was not meoting expectations driven by a lack of demand in the U.K. market and as a result, we recognized (2) During 2013, 2012 and 2011, we recognized charges for pension curtailment and special termination benefits related to certain defined benefit (3 During the fourth quarter of 2013, we recognized an impairment charge related to our definite-lived intangible asset associated with our licensing (4)During the second quarter of 2012, we recognized an asset abandonment charge related to tho discontinuation of primary packaging in the U.K. We (5) uing the thind quarter of 2013, we recognized impairment charges related to indefinite-lived intangible assets in Europe. See Note 12, "Goodwill a loss related to the write-off of the Home Draft packaging line, tooling equipment and packaging materials inventory and Intangible Assets" for further discussion. 101 (6) InDecember of 2013, we sold our interest in the MC Sihai joint venture in China and recognized a gain of $6.0 milion. The gain consists of the non-cash release of the $5.4 million liability representing the fair value of our remaining investment upon deconsolidation of the joint venture in 2012, as well as $0.6 million of proceeds received for our interest in the joint venture. We also recognized legal and rolated fees in relation to the sale of $1.2 million during 2013 In the second quarter of 2012, we recognized impairment charges of $104 million related to goodwill and definite-lived intangible assets in our MC Sihai joint venture in China, and in the third quarter of 2012, we deconsolidated the joint venture and recognized an impairment loss of $27.6 million upon deconsolidation. See Note 5, "Investments" for further discussion of the deconsolidation and subsequent sale of the joint venture. During 2012, we received insurance proceeds in excess of expenses marred related to flood damages at our Toronto offices. Danng 2011 we incurred expenses in excess of insurance proceeds related to these damages. (8)During the second quarter of 2011, we recognized a S2.0 million gain resulting from a reduction of our guarantee of BRI debt obligations. (9) During the second quarter of 2011, we recognized a $7.6 million loss related to the correotion of an immaterial error in prior periods in the Canada scgment, resulting from the perfomance ofa fixed asset count that reduced properties by $13.9 million in 2011. The adjustment also resulted in an increase to goodwill of $6,3 million for the assets identified as not present as of the Merger date. The impact of the error and the related correction in 2011 was not material to any prior annual or interim financial statements and was not material to the fiscal year results for 2011 (10) During 2009, we established a non-income-related tax reserve of $10.4 million that was recorded as a special item. Our estimates indicated a range of possible loss relative to this reserve of zero to $22.3 million, inclusive of potential penalties and interest. The amounts recorded in 2013, 2012 and 2011 represent the release of this reserve as a result of a change in estimate. As a result, the remaining amount of this non-income-related tax reserve was fully released in 2013 (11) During 2013, we recorded losses and rolated net costs of $5.4 million in our Europe business related to significant flooding in Czech Republic in the second quarter of 2013. These losses were offset by S7.4 million insurace proceeds received in 2013 Upon termmation of our Tradeteam distribution agreements and subsequent termination of the joint venture and sale of our 49.9% mterest m Tradeteam to DHL, we recognized a loss of $13.2 million in December 2013. See Note 5, "Investments" for further discussion. 12) In addition to the previously mentioned termination-related items recorded in special items, in the fourth quarter of 2013 we received termination notifications from Modelo and Heineken related to our MMI joint venturo agreement and contract-brewing agreement, respectively. Upon termination of the MMI joint venture, which is expected to occur at the end of the day on February 28, 2014, we expect to recognize termination fee income of CAD 70.0 million, net of the remaining carying value of the definite-lived intangible asset, within special items. See Note 5, "Investments" for further discussion. Additionally, we have a contract brewing and kegging agreement with Heinekei whereby we produce and package the Foster's and Kronenbourg brands in the U.K. In December 2013, we entered into an agreement with Heineken to early terminate this arangement. As a result of the termination, Heineken has agreed to pay us an aggregate early termination payment of GBP 13.0 million during and through the end of the transition period, concluding on April 30, 2015, which will be recognized within special items. Restructuring Activities In 2012, we introduced several initiatives focused on increasing our efficiancies and reducing costs across all fiunctions of the business in order to develop a more competitive supply chain and global cost structure. Included in these initiatives is a long-term focus on reducing labor and general overhead costs through restructuring activities. We view these restructuring activities as actions to allow us to meet our long-term growth targets by generating future cost savings within cost of goods sold and general and administrative expenses and include organizational changes that strengthen our business and accelerate efficiencies within our operational structure. As a result of these restructuring activities, we have reduccd headoount by approximately 910 employees, of which 310 and 600 relate to 2013 and 2012 activities, respectively. Consequently, we recognized severance and other employee related charges during 2013 and 2012, which we have recordod as special items within our consolidated statements of operations. As we continually evaluate our cost structure and seek opportunities for further efficiencies and cost savings, we may incur additional restructuring related charges in the future, however, are unable to estimate the amount of charges at this time. 102